<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
and
SCHEDULE 13D/A
(Rule 13d-101)
(Amendment No. 4)
-----------------
ASA HOLDINGS, INC.
(Name of Issuer)
DELTA AIR LINES, INC.
DELTA AIR LINES HOLDINGS, INC.
DELTA SUB, INC.
(Bidders)
-----------------
Common Stock, $0.10 Par Value
(Title of Class of Securities)
-----------------
04338Q 10 7
(CUSIP Number of Class of Securities)
-----------------
Robert S. Harkey, Esquire
Senior Vice President - General Counsel
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, GA 30320
(404) 715-2387
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
-----------------
With Copies to:
Joseph Rinaldi
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation* Amount of Filing Fee**
================================================================================
$720,965,818 $144,193
================================================================================
* Calculated by multiplying $34.00, the per share tender offer price, by
20,528,177, which represents (i) the sum of the number of shares of common
stock outstanding on February 19, 1999 (excluding shares of common stock
already owned by Delta Air Lines, Inc. and its affiliates) plus (ii) the
676,700 shares of common stock subject to options which were vested and
exercisable as of February 19, 1999.
** Calculated as 1/50 of 1% of the transaction value.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: _____________ Filing Party: ________________________
Form or Registration No.: ___________ Date Filed: __________________________
================================================================================
<PAGE>
SCHEDULE 14D-1
- -----------------------
CUSIP NO. 04338Q 10 7
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DELTA AIR LINES, INC.
IRS IDENTIFICATION NO. 58-0218548
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
BK; WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
DELAWARE
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7
7,995,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
8
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9
28%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
10
CO
- ------------------------------------------------------------------------------
2
<PAGE>
SCHEDULE 14D-1
- -----------------------
CUSIP NO. 04338Q 10 7
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DELTA AIR LINES HOLDINGS, INC.
IRS IDENTIFICATION NO. 51-0323487
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
DELAWARE
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7
7,995,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
8
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9
28%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
10
CO
- ------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE 14D-1
- -----------------------
CUSIP NO. 04338Q 10 7
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DELTA SUB, INC.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
AF
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
GEORGIA
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7
7,995,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES*
8
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
9
28%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
10
CO
- ------------------------------------------------------------------------------
4
<PAGE>
This Tender Offer Statement on Schedule 14D-1 filed by (i) Delta Air Lines,
Inc., a Delaware corporation ("Delta"), (ii) Delta Sub, Inc., a Georgia
corporation and an indirect, wholly owned subsidiary of Delta ("Delta Sub")
(iii) and Delta Air Lines Holdings, Inc., a Delaware Corporation ("Delta
Holdings"), relates to the offer by Delta Sub to purchase all of the issued and
outstanding shares (the "Shares") of common stock, $0.10 par value per share, of
ASA Holdings, Inc., a Georgia corporation ("ASA"), at a price of $34.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated February 22, 1999 (the "Offer to
Purchase") and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively.
Item 1. Security and Subject Company
(a) The name of the subject company is ASA Holdings, Inc., a Georgia
corporation, which has its principal executive offices at 100 Hartsfield Centre
Parkway, Suite 800, Atlanta, Georgia 30354.
(b) The exact title of the class of equity securities being sought is
shares of common stock, $0.10 par value per share, of ASA. As of February 19,
1999, there were 20,528,177 Shares issued and outstanding and approximately 864
holders of record. The information set forth under "Introduction" in the Offer
to Purchase is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market is set forth in "The Tender Offer--Price Range of Shares; Dividends" of
the Offer to Purchase and is incorporated herein by reference.
Item 2. Identity and Background
(a)-(d) and (g) This Statement is filed by Delta, Delta Sub and Delta
Holdings. The information set forth under "Introduction", "The Tender
Offer--Certain Information Concerning Delta, Delta Holdings and Delta Sub" and
Schedule II of the Offer to Purchase is incorporated herein by reference.
(e) and (f) To the best knowledge of Delta, Delta Sub and Delta Holdings,
during the last five years, none of Delta, Delta Sub nor Delta Holdings, nor any
of the persons listed in Schedule II of the Offer to Purchase, has been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company
(a) The information set forth under "Special Factors--Background of the
Offer", "Special Factors--The Merger Agreement", "Special Factors--Interests of
Certain Persons in the Offer and the Merger" and "The Tender Offer--Certain
Information Concerning Delta, Delta Holdings and Delta Sub" in the Offer to
Purchase is incorporated herein by reference.
(b) The information set forth under "Introduction", "Special
Factors--Background of the Offer", "Special Factors--Purpose and Structure of
the Offer and the Merger; Reasons of Delta for the Offer and the Merger",
"Special Factors--Plans for ASA after the Offer and the Merger", "Special
Factors--The Merger Agreement" and "The Tender Offer-- Certain Information
Concerning Delta, Delta Holdings and Delta Sub" in the Offer to Purchase is
incorporated herein by reference.
5
<PAGE>
Item 4. Source and Amount of Funds or Other Consideration
(a)-(c) The information set forth under "The Tender Offer--Financing of the
Offer and the Merger" in the Offer to Purchase is incorporated herein by
reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder
(a)-(e) The information set forth under "Introduction", "Special
Factors--Background of the Offer", "Special Factors--Purpose and Structure of
the Offer and the Merger; Reasons of Delta for the Offer and the Merger",
"Special Factors--Plans for ASA After the Offer and the Merger", "Special
Factors--The Merger Agreement", "The Tender Offer--Financing of the Offer and
the Merger" and "The Tender Offer--Dividends and Distributions" in the Offer to
Purchase is incorporated herein by reference.
(f) and (g) The information set forth under "The Tender Offer--Certain
Effects of the Offer" in the Offer to Purchase is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company
(a)-(b) The information set forth under "Special Factors--Interests of
Certain Persons in the Offer and the Merger", "The Tender Offer--Certain
Information Concerning ASA", "The Tender Offer--Certain Information Concerning
Delta, Delta Holdings and Delta Sub" and Schedules I and II of the Offer to
Purchase is incorporated herein by reference.
On January 26, 1999 the ASA Board of Directors granted to certain
executives options to purchase Shares under ASA's 1997 Nonqualified Stock Option
Plan as follows:
Outstanding Options
Name at Grant Date Exercise Price
---- ------------- --------------
George F. Pickett........................... 102,000 30.25
John W. Beiser.............................. 102,000 30.25
Ronald V. Sapp.............................. 40,000 30.25
Edward J. Paquette.......................... 40,000 30.25
Samuel J. Watts............................. 21,000 30.25
John P. McBryan............................. 10,000 30.25
Charles J. Thibaudeau....................... 24,000 30.25
John A. Bedson.............................. 22,000 30.25
Mark W. Fischer............................. 10,000 30.25
Renee H. Skinner............................ 14,000 30.25
R. Mark Bole................................ 16,000 30.25
W. Grant Nichols............................ 13,000 30.25
James J. Cerniglia.......................... 20,000 30.25
6
<PAGE>
On January 15, 1999 the ASA Board of Directors granted to certain
non-employee directors options to purchase Shares under the ASA's 1998
Nonqualified Stock Option Plan for Non-Employee Directors as follows:
Outstanding Options
Name at Grant Date Exercise Price
---- ------------- --------------
Alan M. Voorhees............................ 2,500 30.313
Ralph W. Voorhees........................... 2,500 30.313
Parker H. Petit............................. 2,500 30.313
Jean A. Mori................................ 2,500 30.313
George Berry................................ 2,500 30.313
ASA purchased 20,000 Shares at $30.63 and John W. Beiser gifted 200 Shares
on January 26, 1999. Parker H. Petit purchased 100 Shares at $31.125 and 2,900
Shares at $31.360 on January 19, 1999.
Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities
The information set forth under "Introduction", "Special
Factors--Background of the Offer", "Special Factors--Purpose and Structure of
the Offer and the Merger; Reasons of Delta for the Offer and the Merger",
"Special Factors--Plans for ASA After the Offer and the Merger", "Special
Factors--The Merger Agreement", "Special Factors--Interests of Certain Persons
in the Offer and the Merger", "The Tender Offer--Certain Information Concerning
ASA" and "The Tender Offer--Certain Information Concerning Delta, Delta Holdings
and Delta Sub" in the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to Be Compensated
The information set forth under "Introduction", "Special Factors--Opinion
of Financial Advisor to the ASA Board" and "The Tender Offer--Fees and Expenses"
in the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders
Not applicable.
Item 10. Additional Information
(a) The information set forth under "Special Factors--Interests of Certain
Persons in the Offer and the Merger" in the Offer to Purchase is incorporated
herein by reference.
(b)-(c) The information set forth under "The Tender Offer--Certain Legal
Matters; Regulatory Approvals" in the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth under "The Tender Offer--Certain Effects of
the Offer" in the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and Letter of
Transmittal and the Agreement and Plan of Merger, dated as of February 15, 1999,
among ASA, Delta and Delta Sub, copies of which appear as Exhibits (a)(1),
(a)(2) and (c)(3) hereto, is incorporated herein by reference.
7
<PAGE>
Item 11. Material to Be Filed as Exhibits
(a)(1) Offer to Purchase dated February 22, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on
February 22, 1999.
(a)(8) Text of Press Release issued by Delta on February 16, 1999.
(b)(1) Credit Agreement dated as of May 2, 1997 among Delta, Certain
Banks and NationsBank, N.A. (South), as agent bank. (Incorporated
herein by reference to Exhibit 4.7 of Delta's Annual Report on
Form 10-K for the year ended June 30, 1997).
(c)(1) Stock Purchase Agreement dated May 28, 1986, between Delta and
Atlantic Southeast Airlines, Inc. (Incorporated herein by
reference to Exhibit 1 of Delta's Schedule 13D filed on June 6,
1986).
(c)(2) Stock Agreement among Delta, Delta Holdings, Atlantic Southeast
Airlines, Inc. and ASA dated as of March 17, 1997.
(c)(3) Agreement and Plan of Merger, dated as of February 15, 1999,
among ASA, Delta and Delta Sub. (Incorporated herein by reference
to Exhibit 99.3 of Amendment No. 3 to Delta's Schedule 13D filed
on February 15, 1999.)
(c)(4) Memorandum Agreement (with respect to employment and consulting),
dated as of February 15, 1999, among George F. Pickett, ASA and
Delta.
(c)(5) Memorandum Agreement (with respect to employment and consulting),
dated as of February 15, 1999, among John W. Beiser, ASA and
Delta.
(c)(6) Shareholders Agreement dated as of February 15, 1999, among Delta
and certain shareholders of ASA. (Incorporated herein by
reference to Exhibit 99.4 of Amendment No. 3 to Delta's Schedule
13D filed on February 16, 1999.)
(c)(7) Confidentiality Agreement, dated February 9, 1999, between ASA
and Delta.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
8
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
February 22,1999 DELTA AIR LINES, INC.
By: /s/ Maurice W. Worth
---------------------------------------------
Name: Maurice W. Worth
Title: Chief Operating Officer
DELTA AIR LINES HOLDINGS, INC.
By: /s/ Leslie P. Klemperer
---------------------------------------------
Name: Leslie P. Klemperer
Title: Vice President and Secretary
DELTA SUB, INC.
By: /s/ Dean C. Arvidson
---------------------------------------------
Name: Dean C. Arvidson
Title: Secretary
9
<PAGE>
EXHIBIT INDEX
Exhibit No.
- -------------
(a)(1) Offer to Purchase dated February 22, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on
February 22, 1999.
(a)(8) Text of Press Release issued by Delta on February 16, 1999.
(c)(2) Stock Agreement among Delta, Delta Holdings, Atlantic Southeast
Airlines, Inc. and ASA dated as of March 17, 1997.
(c)(4) Memorandum Agreement (with respect to employment and
consulting), dated as of February 15, 1999, among George F.
Pickett, ASA and Delta.
(c)(5) Memorandum Agreement (with respect to employment and
consulting), dated as of February 15, 1999, among John W.
Beiser, ASA and Delta.
(c)(7) Confidentiality Agreement, dated February 9, 1999, between ASA
and Delta.
10
<PAGE>
Exhibit (a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
ASA Holdings, Inc.
at
$34.00 Net per Share
by
Delta Sub, Inc.
an indirect, wholly-owned subsidiary of
Delta Air Lines, Inc.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED (SUCH DATE,
AS EXTENDED FROM TIME TO TIME, THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF ASA HOLDINGS, INC. (TOGETHER WITH ITS
SUBSIDIARIES, "ASA") HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT (AS DEFINED
HEREIN) AND THE TRANSACTIONS CONTEMPLATED THEREBY AND DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER (AS DEFINED HEREIN), ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
HOLDERS OF SHARES (AS DEFINED HEREIN). THE BOARD RECOMMENDS THAT ASA'S
SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER AND
APPROVE AND ADOPT THE MERGER AGREEMENT.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer such number of
the then issued and outstanding shares (the "Shares") of common stock, par value
$0.10 per share, of ASA which, when taken together with Shares owned by Delta or
its affiliates, represent at least a majority of the then issued and outstanding
Shares on a fully diluted basis (the "Minimum Condition"). See "The Tender
Offer--Certain Conditions of the Offer."
Morgan Stanley & Co. Incorporated ("Morgan Stanley") has delivered to the
Board of Directors of ASA its written opinion as investment bankers that, as of
the date of such opinion and based on and subject to the matters stated in such
opinion, the consideration to be paid in the Offer and the Merger is fair from a
financial point of view to the holders of Shares (other than Delta and its
affiliates). See "Special Factors--Opinion of Financial Advisor to the ASA
Board" for further information concerning the opinion of Morgan Stanley.
IMPORTANT
Any shareholder who desires to tender all or any portion of such
shareholder's Shares should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) that accompanies this Offer to Purchase in
accordance with the instructions in such Letter of Transmittal, have such
shareholder's signature thereon guaranteed if required by Instruction 1 to such
Letter of Transmittal, and mail or deliver the Letter of Transmittal (or such
facsimile) together with the certificate(s) ("Share Certificates") representing
the tendered Shares and any other required documents to Harris Trust Company of
New York (the "Depositary") (at the Depositary's address set forth on the back
cover of this Offer to Purchase) or tender such shareholder's Shares pursuant to
the procedure for book-entry transfer set forth in "The Tender Offer--Procedures
for Accepting the Offer and Tendering Shares" or (2) request such shareholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. A shareholder whose Shares are registered in
the name of a broker, dealer, bank, trust company or other nominee must contact
such broker, dealer, bank, trust company or other nominee if such shareholder
desires to tender such Shares.
A shareholder who desires to tender such shareholder's Shares and whose
Share Certificates are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, or who cannot deliver all
required documents to the Depositary prior to the expiration of the Offer, may
tender such Shares by following the procedures for guaranteed delivery set forth
under the caption "The Tender Offer--Procedures for Accepting the Offer and
Tendering Shares."
Questions or requests for assistance may be directed to Morrow & Co., Inc.
(the "Information Agent") or Goldman, Sachs & Co. (sometimes referred to herein
as the "Dealer Manager") at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and other related materials may be
obtained from the Information Agent or the Dealer Manager.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
-----------------------
The Dealer Manager for the Offer is:
Goldman, Sachs & Co.
February 22, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
INTRODUCTION.............................................................................1
SPECIAL FACTORS..........................................................................3
Background of the Offer.........................................................3
Recommendation of the ASA Board; Fairness of the Offer and the Merger...........8
Opinion of Financial Advisor to the ASA Board..................................10
Position of Delta, Delta Sub and Delta Holdings Regarding Fairness of
the Offer and the Merger.....................................................13
Purpose and Structure of the Offer and the Merger; Reasons of Delta for
the Offer and the Merger.....................................................14
Plans for ASA after the Offer and the Merger...................................15
Rights of Shareholders in the Offer and the Merger.............................15
The Merger Agreement...........................................................16
The Shareholders Agreement.....................................................24
The Confidentiality Agreement..................................................24
Interests of Certain Persons in the Offer and the Merger.......................25
THE TENDER OFFER........................................................................29
Terms of the Offer.............................................................29
Acceptance for Payment and Payment for Shares..................................30
Procedures for Accepting the Offer and Tendering Shares........................31
Withdrawal Rights..............................................................34
Certain United States Federal Income Tax Consequences..........................34
Price Range of Shares; Dividends...............................................35
Certain Information Concerning ASA.............................................36
Certain Information Concerning Delta, Delta Holdings and Delta Sub.............37
Financing of the Offer and the Merger..........................................39
Dividends and Distributions....................................................39
Certain Effects of the Offer...................................................39
Certain Conditions of the Offer................................................41
Certain Legal Matters; Regulatory Approvals....................................44
Fees and Expenses..............................................................45
Miscellaneous..................................................................46
</TABLE>
SCHEDULES
SCHEDULE I - Directors and Executive Officers of ASA
SCHEDULE II - Directors and Executive Officers of Delta, Delta Sub and Delta
Holdings; Proposed Directors and Executive Officers of the
Surviving Company
-i-
<PAGE>
To the Holders of Shares of Common Stock
of ASA Holdings, Inc.:
INTRODUCTION
Delta Sub, Inc. ("Delta Sub"), a Georgia corporation, hereby offers to
purchase any and all issued and outstanding shares of common stock, par value
$0.10 per share (the "Shares"), of ASA Holdings, Inc., a Georgia corporation,
(together with its subsidiaries, "ASA") (other than Shares already owned by
Delta and its subsidiaries) at a price of $34.00 per Share, net to the seller in
cash (the "Offer Price"), upon the terms and subject to the conditions set forth
in this Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer").
Delta Sub is a direct, wholly-owned subsidiary of Delta Air Lines Holdings, Inc.
("Delta Holdings"), a Delaware corporation, and an indirect, wholly-owned
subsidiary of Delta Air Lines, Inc. ("Delta"), a Delaware corporation.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Delta Sub pursuant to the Offer. Delta or Delta Sub will pay all charges and
expenses of the dealer manager, Goldman, Sachs & Co. (the "Dealer Manager" or
"Goldman, Sachs"), the depositary, Harris Trust Company of New York (the
"Depositary") and the information agent, Morrow & Co., Inc. (the "Information
Agent") incurred in connection with the Offer. See "The Tender Offer--Fees and
Expenses."
As of February 19, 1999, Delta beneficially owned 7,995,000 of the
28,523,177 outstanding Shares, representing approximately 28% of the Shares then
outstanding.
THE BOARD OF DIRECTORS OF ASA (THE "ASA BOARD") HAS UNANIMOUSLY APPROVED
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND DETERMINED
THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING
THE OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS
OF SHARES. THE ASA BOARD RECOMMENDS THAT ASA'S SHAREHOLDERS ACCEPT THE OFFER,
TENDER THEIR SHARES PURSUANT TO THE OFFER AND APPROVE AND ADOPT THE MERGER
AGREEMENT.
Morgan Stanley & Co. Incorporated ("Morgan Stanley") has delivered to the
ASA Board its written opinion as investment bankers that, as of the date of such
opinion and based on and subject to the matters stated in such opinion, the
consideration to be paid in the Offer and the Merger is fair from a financial
point of view to the holders of Shares (other than Delta and its affiliates).
See "Special Factors--Opinion of Financial Advisor to the ASA Board" for further
information concerning the opinion of Morgan Stanley.
ASA has been advised that all of its directors intend to tender or cause
the tender of all of their Shares pursuant to the Offer. In addition, ASA's two
most senior executives (each of whom is a member of the ASA Board) have entered
into a Shareholders Agreement (as defined) with Delta pursuant to which they
have agreed to tender their Shares in the Offer. See "Special Factors--The
Shareholders Agreement."
ASA has filed with the Securities and Exchange Commission (the
"Commission") a Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which is being mailed to shareholders herewith.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer such number of
the then issued and outstanding Shares of ASA which, when taken together with
Shares owned by Delta and its affiliates, represent at least a majority of the
then issued and outstanding Shares on a fully diluted basis (the "Minimum
Condition"). See "The Tender Offer--Certain Conditions of the Offer."
<PAGE>
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of February 15, 1999 (the "Merger Agreement"), among ASA, Delta and Delta
Sub. The Offer is not conditioned on obtaining financing. The Merger Agreement
provides that, among other things, as promptly as practicable after the purchase
of Shares pursuant to the Offer and the satisfaction (or waiver, to the extent
permissible under the Merger Agreement) of the other conditions set forth in the
Merger Agreement, Delta Sub will, in accordance with the Georgia Business
Corporation Code (the "GBCC"), be merged with and into ASA (the "Merger"), with
ASA continuing as the surviving corporation (the "Surviving Company"). At the
effective time of the Merger (the "Effective Time"), subject to the terms and
conditions of the Merger Agreement, each Share outstanding immediately prior to
the Effective Time (other than Shares held in the treasury of ASA, Shares owned
by Delta or its affiliates or Shares as to which dissenters' rights have been
timely exercised) shall be converted into the right to receive the per Share
price paid in the Offer in cash, without interest (the "Merger Consideration").
The Merger Agreement is more fully described in "Special Factors--The Merger
Agreement."
The Merger is subject to the satisfaction or waiver of certain conditions,
including, unless no longer required by the GBCC, the approval and adoption of
the Merger Agreement by the requisite vote of the shareholders of ASA. See
"Special Factors--The Merger Agreement." The Merger is not conditioned on
obtaining financing. Under the GBCC, the affirmative vote of a majority of the
outstanding Shares is required to approve and adopt the Merger Agreement and the
Merger. If Delta and Delta Sub own a majority of the outstanding Shares as a
result of the Offer or otherwise, Delta and Delta Sub would have sufficient
voting power to and would approve the Merger without the affirmative vote of any
other shareholder of ASA. Unless it is no longer required to do so under the
GBCC, ASA has agreed to cause a meeting of its shareholders as soon as
reasonably practicable after consummation of the Offer for the purpose of voting
on the approval and adoption of the Merger and the Merger Agreement. Delta,
Delta Holdings and Delta Sub have agreed to vote their Shares in favor of the
Merger.
No dissenters' rights are available in connection with the Offer; however,
shareholders of ASA who have not tendered their Shares in the Offer will have
dissenters' rights in connection with the Merger. Such dissenters' rights are
described in "Special Factors--Rights of Shareholders in the Offer and the
Merger."
As of the close of business on February 19, 1999, there were outstanding
28,523,177 Shares and options to purchase an aggregate of 1,353,200 Shares at an
average exercise price of $30.14 per Share (of which 676,700 were vested and
exercisable). In addition, Delta and its affiliates owned 7,995,000 of the
outstanding Shares. Based upon the foregoing, Delta believes that the Minimum
Condition will be satisfied if at least 6,266,589 Shares (other than Shares held
by Delta or its affiliates) are validly tendered and not withdrawn prior to the
Expiration Date (as defined herein) (assuming that no options on Shares are
exercised prior to the Expiration Date).
On January 26, 1999, the ASA Board declared a regular quarterly cash
dividend of $0.115 per Share, payable on March 15, 1999 to holders of record as
of March 1, 1999. Shareholders of record as of March 1, 1999 will be entitled to
receive such dividend, regardless of whether or when their Shares are tendered
or purchased pursuant to the Offer.
This Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is made
with respect to the Offer.
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SPECIAL FACTORS
Background of the Offer 1996
Reorganization of ASA
ASA Holdings, Inc. ("ASA Holdings") is a holding company, the principal
assets of which are the shares of its wholly-owned subsidiaries, Atlantic
Southeast Airlines, Inc. ("Atlantic Southeast"), a Georgia corporation, and ASA
Investments, Inc. ("ASA Investments"), a Delaware corporation. Atlantic
Southeast is the operating company which conducts all airline operations. ASA
Holdings became the direct parent of Atlantic Southeast and ASA Investments
pursuant to a corporate reorganization which became effective December 31, 1996.
Pursuant to the reorganization, Atlantic Southeast was merged into a subsidiary
of ASA Holdings, and shareholders of Atlantic Southeast received shares of
common stock of ASA Holdings in exchange for their shares of common stock of
Atlantic Southeast. The effect of the reorganization was to replace the publicly
traded shares of Atlantic Southeast with publicly traded shares of ASA Holdings.
As such, all references herein to "Shares" shall refer, as to periods before the
reorganization, to shares of common stock of Atlantic Southeast, par value $0.10
per share, and, as to periods including and after the reorganization, to shares
of common stock of ASA Holdings, par value $0.10 per share. All references
herein to "ASA" refer, as the context may require, either individually to ASA
Holdings or collectively to ASA Holdings, Atlantic Southeast and ASA
Investments.
Marketing and Code Sharing Arrangements Between ASA and Delta
ASA has operated in Atlanta since 1984, and in Dallas/Fort Worth since
late-1986 as a "Delta Connection" carrier pursuant to a marketing agreement with
Delta (the "Delta Connection Agreement"). The Delta Connection Agreement was
originally entered into on August 6, 1984 and was restated or amended several
times subsequently. Since December 31, 1994, the Delta Connection Agreement has
been terminable by either party thereto on 30 days' prior written notice.
Under the Delta Connection program, all ASA flights are promoted as part of
the Delta route network in computer systems used by travel agents and in
advertising and published timetables, and all ASA flights carry the Delta
designator code. ASA flights are sold on Delta ticket stock, and all revenue
from ASA ticket sales by travel agents are remitted to Delta. Delta handles ASA
reservations calls. Customer payments for tickets purchased from agents or at
Delta city ticket offices for ASA flights are remitted to Delta. ASA and Delta
split revenues (less cost of sales) in accordance with a revenue proration
arrangement. Under this arrangement, ASA is paid all revenue (less agreed
expenses) for tickets sold to passengers not connecting to a Delta-operated
flight (i.e., local traffic). Revenue for passengers traveling on a ticket with
an ASA flight connecting to a Delta-operated flight are prorated between Delta
and ASA using a proration methodology that considers the mileage of the flight
segments flown and the relative cost of the service provided, minus the cost of
sales, with adjustments made for international tickets.
During 1998, approximately 80% of ASA's passengers connected with or from
Delta flights at the Atlanta or Dallas/Fort Worth hubs, and ASA derived
substantially all of its operating revenues from its marketing and code sharing
arrangements with Delta. The Delta Connection program generated revenues for ASA
of approximately $321.7 million and $348.4 million in 1997 and 1998,
respectively. In addition, pursuant to separate arrangements, ASA leases
reservation equipment and certain facilities from Delta, and Delta provides
certain services to ASA including reservation and ground handling services.
Expenses under these arrangements in 1997 and 1998 were approximately $11.7
million and $11.8 million, respectively.
Delta Ownership of ASA Shares; Stock Agreement
On June 19, 1986, Delta purchased from ASA 2,665,000 Shares pursuant to a
stock purchase agreement dated May 28, 1986 (the "Original Stock Agreement")
between the two companies. Delta made this investment for the purposes of
obtaining a significant equity interest in ASA, and to enhance ASA's continuing
participation in the "Delta
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Connection" program. After giving effect to the issuance of these Shares,
Delta's investment represented approximately 20% of the then outstanding number
of Shares. On December 27, 1989, Delta assigned and transferred to Delta Air
Lines Holdings, Inc. ("Delta Holdings") all of the Shares then owned by Delta.
On March 17, 1997, following the ASA reorganization described above, ASA
Holdings, Atlantic Southeast, Delta and Delta Holdings entered into an amended
agreement (the "Stock Agreement"), containing terms and conditions which are
substantially the same as those contained in the Original Stock Agreement.
Pursuant to the Stock Agreement, for so long as Delta beneficially owns at
least 10% of the outstanding Shares, either Delta or Delta Holdings has the
right to cause ASA (i) to include in its slate of nominees for election to the
ASA Board at least two designees of Delta or Delta Holdings who are reasonably
acceptable to ASA, and (ii) to use its reasonable best efforts to assure that
these individuals are elected to the ASA Board. The Stock Agreement also grants
Delta and Delta Holdings certain demand and piggyback registration rights and
pre-emptive rights, and grants ASA a right of first refusal in respect of
certain sales by Delta or Delta Holdings of Shares to persons pursuant to a
demand registration or in a private sale.
Other than as described above, neither Delta nor any of its subsidiaries
has acquired or disposed of any Shares prior to the date hereof. As of February
19, 1999, Delta beneficially owned 7,995,000 of the 28,523,177 outstanding
Shares, representing approximately 28% of the Shares then outstanding. The
increase since 1986 in the number of Shares beneficially owned by Delta, and in
its relative percentage ownership of Shares, is the result of stock splits and
repurchases by ASA of Shares since that time.
Recent Contacts, Negotiations and Transactions Between Delta and ASA
Since December 31, 1994, the date on which the Delta Connection Agreement
became terminable on 30 days' notice by either party, Delta and ASA have had
various discussions about aspects of their marketing alliance, and from time to
time have had discussions regarding the renewal of the Delta Connection
Agreement. In March 1995, Delta forwarded drafts of proposed renewal agreements
to each of its connection carriers, including ASA. The draft agreement forwarded
to ASA proposed increases and other changes to a number of the fees charged by
Delta to ASA under the Delta Connection Agreement. While ASA did not accept this
draft agreement, Delta and ASA subsequently agreed to certain increases in fees
associated with marketing-related activities.
In the spring of 1997, Delta began to reassess its connection carrier
strategy generally. On March 31, 1997, Delta decided to remove its one remaining
designee from the ASA Board. Delta also withdrew its designees from all of the
other connection carriers on which it had the right to board representation.
Delta's decision to withdraw its designees from the boards of ASA and Delta's
other connection carriers was motivated by Delta's intention to seek
modification of the terms of its marketing and other arrangements with each such
carrier, and its desire to minimize the potential for, or the perception of, any
conflict of interest between Delta and such connection carriers that could
otherwise arise in such a context. Since March 31, 1997, notwithstanding its
right under the Stock Agreement to nominate two designees for election to the
ASA Board, neither Delta nor any of its affiliates have nominated any designees
to, or had any representatives on, the ASA Board. In June 1997, Delta
representatives met with representatives from its various connection carriers,
including ASA, to inform them that Delta intended to seek modifications to their
respective marketing arrangements.
On September 25, 1997, Bryan LaBrecque, Director of Connection Carriers of
Delta, wrote to John W. Beiser, President of ASA, with a proposal to revise the
companies' arrangements to permit Delta to recover certain of its costs relating
to ASA's operations, and to introduce a royalty fee for ASA's use of the Delta
designator code. In subsequent meetings between Messrs. LaBrecque and Beiser,
Mr. Beiser expressed his dissatisfaction with these proposals and stated that,
on the basis of the revised cost structure proposed by Delta, it would be
uneconomical for ASA to continue providing service at Delta's Dallas / Fort
Worth hub. On November 10, 1997, at ASA's request, Delta withdrew its proposal,
pending further discussions.
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In late 1997, Delta raised with ASA certain concerns about various ASA
customer service issues. These customer service issues were, in part,
attributable to significant attrition among ASA's mechanics and the difficulties
associated with negotiating a new collective bargaining agreement with ASA's
pilots union. Discussions were held throughout the spring of 1998 between ASA
and Delta regarding various customer service issues. On July 21, 1998, Maurice
W. Worth, Chief Operating Officer of Delta, met with Mr. Beiser to discuss
Delta's concerns about ASA's service. Mr. Worth informed Mr. Beiser that if
service did not improve significantly within the next 45 days, Delta would need
to reevaluate its alternatives for Delta connection service on certain routes.
On July 27, 1998, Mr. Worth and Leo F. Mullin, President and Chief Executive
Officer of Delta, met with Mr. Beiser and George F. Pickett, Chairman and Chief
Executive Officer of ASA, to continue discussions regarding the need for
improvements in ASA's service. On September 8, 1998, Mr. Worth wrote to Mr.
Beiser, acknowledging ASA's significant progress in addressing its service
problems and noting that Delta looked forward to continued improvement by ASA.
In July and September 1998, ASA management indicated to Delta that they
were interested in expanding ASA's connecting operations into several new
markets. Although Delta noted that ASA had been making progress in improving
customer service levels, Delta nonetheless rejected expansion into these new
markets in large part on the basis of its continued concerns over ASA's service.
During regular meetings between Delta and ASA representatives over the course of
the fourth quarter of 1998, Delta noted ASA's progress in addressing certain
service issues, but also continued to express concern about a number of other
service issues.
On January 18, 1999, Mr. LaBrecque wrote to Mr. Beiser, reiterating Delta's
concerns about ASA's customer service and the appropriate sharing of costs
between the two carriers, as well as certain other issues. On January 20, 1999,
Mr. Worth met with Messrs. Beiser and Pickett to discuss the subjects covered in
Mr. LaBrecque's January 18 letter. At that meeting, Mr. Worth repeated Delta's
concerns about ASA's customer service. He said that, as a result, Delta was
considering providing another Delta Connection carrier with code sharing
opportunities on certain Atlanta routes. He also stated that Delta considered
the existing revenue allocation arrangement between Delta and ASA to be
inequitable to Delta, and believed that it needed revisiting. Messrs. Pickett
and Beiser acknowledged that ASA had experienced service problems in the first
half of 1998, but reminded Mr. Worth of the significant progress that ASA had
made since agreeing to a new collective bargaining agreement with its pilots
union in July 1998. Mr. Worth acknowledged this, but noted that there were still
significant ongoing service concerns that needed to be addressed. The parties
agreed to meet in the near future to further discuss these matters and to
establish a more specific agenda for renegotiating the companies' commercial
arrangements.
On January 25, 1999, Mr. Beiser called Mr. Worth to ask whether Delta was
still considering bringing another Delta Connection carrier into the Atlanta
market. Mr. Worth replied that no decision had yet been made on that issue.
Later that day, ASA delivered to Delta Mr. Beiser's written response to Mr.
LaBrecque's January 18 letter. In his response, Mr. Beiser clarified ASA's
position with respect to the concerns identified by Mr. LaBrecque, in particular
by stressing the significant improvements in service achieved by ASA in the
second half of 1998. Mr. Beiser reiterated ASA's desire to meet with Delta to
work out satisfactory solutions to all issues. He also requested an immediate
meeting with Mr. Mullin or Frederick W. Reid, Executive Vice President and Chief
Marketing Officer of Delta. Upon receipt of this letter, Mr. Mullin promptly
called Mr. Pickett and suggested that they meet on January 28.
On January 28, 1999, Mr. Mullin met with Mr. Pickett pursuant to the
request in Mr. Beiser's January 25 letter. Mr. Mullin assured Mr. Pickett that
Delta had made no decision to bring any other Delta Connection carrier into the
Atlanta market. However, he reiterated the concerns raised in Mr. LaBrecque's
letter, and Delta's desire to change the revenue allocation between Delta and
ASA. He stated that it was important to Delta that these issues be addressed
promptly. Mr. Pickett expressed ASA's readiness to explore all avenues that
might improve ASA's relationship with Delta. Mr. Mullin then asked Mr. Pickett
whether ASA would be interested in the parties exploring the possibility of
Delta acquiring ASA. He went on to say that if ASA believed such an approach to
be desirable, Delta would be receptive to exploring that possibility. Mr.
Pickett responded that he would be interested in exploring this alternative. Mr.
Mullin stated that while the feasibility of the acquisition alternative was
being explored, the parties should continue the discussions concerning the
renegotiation of their marketing arrangements. The parties agreed that separate
teams from each carrier should meet as soon as possible to discuss each
alternative.
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On February 4, 1999, representatives of Delta and ASA met to discuss and
define the possible terms of a new marketing arrangement between the companies.
Delta outlined its proposals, which related primarily to revenue allocation,
cost sharing, financial incentives and penalties tied to ASA's operational
performance, franchise fees, facilities and scheduling (including the
introduction of ASA service into new markets). In a call to Mr. Beiser later
that day, Mr. LaBrecque also outlined Delta's proposal that it assume
responsibility for ASA's revenue management, with the goal of increasing total
revenue for both companies. Mr. Beiser stated that he did not think that Delta's
revenue management proposal would be beneficial to ASA and therefore rejected
it. In response to one of Mr. Beiser's questions, Mr. LaBrecque then observed
that Delta estimated that Delta's proposals with respect to revenue allocation
could have a negative aggregate impact on ASA's revenues of $40 million to $50
million per year. Mr. Beiser agreed that further discussions between the
companies on Delta's proposals on matters other than revenue management could be
pursued.
On February 5, 1999, Mr. Mullin telephoned Mr. Pickett to inform him that
ASA could contact Warren C. Jenson, Chief Financial Officer of Delta, to discuss
logistics concerning the acquisition discussions. ASA then contacted Mr. Jenson,
who met with Messrs. Pickett and Beiser later that day to discuss process and
timing issues relating to both the renegotiation of the marketing arrangement
and the acquisition alternative. Mr. Jenson emphasized that Delta was willing to
pursue either of these alternatives. The parties agreed that Delta would need to
conduct some preliminary due diligence on ASA's business and operations, and the
ASA executives stated that ASA would retain lawyers and bankers as soon as
possible to assist ASA in its analysis and exploration of the acquisition
alternative.
Over the next several days, Messrs. Pickett and Beiser contacted each of
the other ASA directors individually and informed them of the discussions that
had occurred with Delta regarding a possible acquisition of ASA, and the steps
that were being taken by ASA in preparation.
On February 7, 1999, in order to better assess the feasibility of the
acquisition alternative, Delta submitted a due diligence document request list
to ASA, and representatives from each of Delta and ASA had a preliminary
discussion of the mechanics and timing of the due diligence process.
On February 8, 1999, an informal telephonic meeting was held among all the
directors of ASA except Alan Voorhees. Messrs. Pickett and Beiser reviewed for
the directors participating in this meeting the contacts between ASA and Delta
that had led to the exploration of the acquisition alternative by Delta and to
the discussions relating to the renegotiation of the marketing arrangements
between Delta and ASA. Messrs. Pickett and Beiser also reviewed for the Board
the current status of both tracks. The directors were informed that ASA was
seeking to retain a nationally-recognized investment bank and legal counsel in
connection with its evaluation of the acquisition alternative.
On February 8, 1999, ASA retained outside legal counsel. On February 9,
1999, ASA retained Morgan Stanley to be its financial advisor and Delta and ASA
entered into a Confidentiality Agreement (the "Confidentiality Agreement")
pursuant to which Delta agreed to keep ASA Confidential Information (as defined
in the Confidentiality Agreement) confidential, not to use such material to the
detriment of ASA, and to return all such material to ASA promptly upon ASA's
request. Representatives of Delta began to conduct due diligence on ASA on
February 10.
On February 9, 1999, Morgan Stanley called Delta's financial advisor,
Goldman, Sachs, to initiate discussions about an acquisition alternative. During
that call, Goldman, Sachs and Morgan Stanley also discussed briefly the nature
of the commercial relationship between Delta and ASA, as well as the recent
talks between the two companies with respect thereto. A telephonic meeting of
the ASA Board was held on February 10, 1999 to ratify the selection of Morgan
Stanley as ASA's investment banker and Sullivan & Cromwell as its legal counsel.
The ASA Board was also presented with an update on developments generally.
On February 11, 1999, Goldman, Sachs and Morgan Stanley had a discussion in
which Morgan Stanley indicated that it thought that premiums historically
received in the sale of public companies were a relevant consideration in any
valuation of an acquisition transaction. Goldman, Sachs responded that Delta was
still considering the feasibility of an acquisition and that it was premature to
discuss Delta's estimate of value ranges. Goldman, Sachs did, however,
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indicate that the then-current market price of ASA Shares was not an appropriate
measure of the future value of ASA, taking into account the fact that the
marketing arrangements between Delta and ASA were being renegotiated. Goldman,
Sachs confirmed its understanding that, in the discussions between Delta and
ASA, Delta had told ASA that in the past, in light of Delta's concerns over
ASA's service, Delta had considered the possibility of having other regional
carriers provide connecting service at Delta's Atlanta hub. Goldman, Sachs also
reiterated Delta's willingness to continue discussions to determine whether a
satisfactory agreement could be reached to modify the companies' existing
commercial arrangements. Later that day, Goldman, Sachs indicated in a call with
Morgan Stanley that if the parties were to proceed with the acquisition
alternative, Delta's current valuation work suggested that any acquisition would
have to be somewhere in the general vicinity of the then-current market price of
ASA's Shares.
Also on February 11, 1999, Mr. Worth met with Messrs. Pickett and Beiser to
discuss the treatment of ASA management and employees if the acquisition
alternative were to be pursued. Later that day, representatives of Delta and ASA
once again met to continue their discussions concerning the renegotiation of
their existing marketing arrangements. The ASA representatives asserted that
Delta was using an incorrect methodology for evaluating revenue allocation
between the carriers. Delta stated that sampling differences could lead to
different conclusions. The Delta representatives noted that, irrespective of the
methodologies employed, Delta had to consider the fact that it could enter into
arrangements with other carriers to serve the Atlanta market on a basis more
favorable to Delta than the current arrangements with ASA. The Delta
representatives further observed that, if ASA were to remain competitive, the
revenue allocation between ASA and Delta would have to be modified. The Delta
representatives acknowledged that, as a result of such modification, ASA would
probably experience reduced revenues aggregating $40 million to $50 million per
year.
Later that evening, an informal telephonic meeting was held among all of
the ASA directors except George Berry and Parker Petit. Representatives of
Morgan Stanley and Sullivan & Cromwell were introduced to the directors. Morgan
Stanley informed the directors of its discussions with Goldman, Sachs and of the
valuation range that Goldman, Sachs believed Delta was considering for ASA.
Messrs. Pickett and Beiser informed the directors of developments of the meeting
held earlier that day between Delta and ASA representatives regarding the
renegotiation of the existing marketing arrangements with Delta. The directors
did not believe that an offer at below market price was appropriate and Morgan
Stanley was instructed to return to Goldman, Sachs to establish that Delta was
not contemplating a below market price, and to negotiate for a higher price that
offered ASA shareholders a premium.
On February 12, 1999, Morgan Stanley called Goldman, Sachs to clarify
Delta's position on the value of any offer and to inquire whether Goldman, Sachs
could confirm that any offer that Delta might make would be at market price or
above. After consultation with its clients, Goldman, Sachs confirmed that Delta
would probably not present ASA with a below market offer, but that a premium, if
any, would be modest.
A telephonic meeting of ASA Board was held later in the day on February 12,
1999, during which Morgan Stanley reported on its conversations on ASA's behalf
with Goldman, Sachs. Following, among other things, a discussion of the
alternatives available to the Company, including the consideration of the effect
of the Delta proposal to renegotiate the existing marketing arrangements with
ASA, the Board instructed Morgan Stanley to propose to Goldman, Sachs a
transaction that would permit ASA shareholders to elect to receive in exchange
for their ASA Shares either common stock of Delta, on a tax-free basis, or cash
at a price of $33.00 per Share.
In the evening of February 12, 1999, Morgan Stanley indicated to Goldman,
Sachs that the ASA Board would be prepared to move forward with a transaction at
a price of $33.00 per Share, that would permit ASA shareholders to elect to
receive merger consideration in the form of Delta stock on a tax-free basis to
such shareholders. After further consultation with Delta, Goldman, Sachs advised
Morgan Stanley that Delta was not interested in pursuing a stock transaction,
but stated that Delta would be willing to consider a cash transaction at the
price ASA had suggested.
On February 13, 1999, Morgan Stanley reported to Goldman, Sachs that it had
reviewed the matter further with representatives of the ASA Board and that ASA
would be prepared to go forward with an all-cash tender offer of $35.00 per
Share, and requested that Delta not insist on preclusive termination fees or
lock-ups. After consultation with Delta
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management, Goldman, Sachs responded to Morgan Stanley, informing them that
Delta believed that it could agree to a price at the midpoint of a range between
$33.00 and $35.00 if all of the documentation issues were satisfactorily
resolved. After consultation with its client, Morgan Stanley indicated that, if
all the documentation was satisfactory, a $34.00 offer would be acceptable. That
afternoon, Delta's counsel provided a draft merger agreement to ASA's counsel.
Counsel for Delta and ASA met over the next two days to negotiate the terms of
the transaction, including, among other things, the conditions to the offer and
ASA's right to terminate the Merger Agreement if a third party were to make a
superior proposal.
A telephonic meeting of the ASA Board was held on February 14, 1999, during
which Morgan Stanley reported on its discussions on ASA's behalf with Goldman,
Sachs since the time of the February 12, 1999, ASA Board meeting. Sullivan &
Cromwell then reported on the status of the draft merger agreement and the
negotiations with Delta's legal counsel.
At a meeting on February 14, 1999, Delta's Board of Directors heard
presentations from Delta management regarding the implications of the proposed
transaction for Delta. Management reported that an acquisition of ASA would
enable Delta to realize revenue gains from factors such as more efficient
operations, market growth, better utilization of aircraft at both airlines and
improved business functions. The Delta Board approved the proposed acquisition
on the terms under consideration and authorized a Committee consisting of
Messrs. Mullin and Grinstein to be available to consider any changes in those
terms that might arise as the final issues were negotiated.
At a meeting held on the afternoon of February 15, 1999, in Atlanta,
Georgia, the ASA Board gave further consideration to the proposed transaction.
Among other things, management reported on the substantial negative impact that
the Delta proposals for renegotiating ASA's marketing arrangement with Delta
would have on the future financial performance of ASA and Morgan Stanley
expressed its view that, as of the date of such opinion and based on and subject
to the matters described therein, the consideration to be received by ASA's
shareholders in the Offer and the Merger was fair, from a financial point of
view, to ASA shareholders (other than Delta and its affiliates). The ASA Board
unanimously approved the proposed transaction and the Merger Agreement. The
Merger Agreement was signed that evening and the transaction was announced on
the morning of February 16.
Contacts or Negotiations between Delta and Other Persons With Respect to
ASA
On December 18, 1998, certain Delta representatives met with
representatives of Comair Holdings, Inc. ("Comair"), a Delta Connection carrier
in which Delta has an approximately 21% beneficial ownership interest. At that
meeting, the parties discussed various aspects of the relationship between Delta
and Comair, and exchanged views as to the strategic direction of the regional
commuter market and the Delta Connection program. This included an exploratory
discussion of the concept of a joint venture that would include certain of
Delta's, ASA's and Comair's operations. Delta subsequently informed Comair that
Delta was considering various alternatives with respect to its relationship with
ASA and it did not at such time intend to pursue further discussions with Comair
concerning such a concept.
Recommendation of the ASA Board; Fairness of the Offer and the Merger
(a) Recommendation of the Board of Directors.
AT A MEETING OF THE BOARD OF DIRECTORS ON FEBRUARY 15, 1999, THE ASA BOARD
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY AND DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN
THE BEST INTERESTS OF, THE HOLDERS OF SHARES. THE ASA BOARD RECOMMENDS THAT
ASA'S SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER
AND APPROVE AND ADOPT THE MERGER AGREEMENT.
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(b) Reasons for the Recommendation of the Board of Directors.
In reaching its conclusions with respect to the Offer and the Merger
Agreement, the ASA Board considered a number of factors, including the
following:
(1) The familiarity of the ASA Board with the financial condition, results
of operations, business and prospects of ASA (as reflected in ASA's historical
and projected financial information), current economic and market conditions
generally and in the airline industry specifically;
(2) That ASA's financial condition, results of operations, business and
prospects were substantially dependent on ASA's relationship with Delta and
ASA's role as a Delta Connection carrier and that the Delta Connection Agreement
was terminable by Delta upon 30 days' notice;
(3) That Delta had advised ASA that it was dissatisfied with ASA's
performance and service levels;
(4) That discussions between Delta and ASA's management with respect to
revenue reallocation and cost sharing arrangements proposed by Delta as part of
the negotiation for renewing the Delta Connection Agreement would, in view of
ASA's management, be likely to reduce ASA's net income by approximately $21
million in 1999 and by approximately $45-$55 million in each year thereafter
from the net income of ASA previously projected by ASA's management, and the
fact that ASA's management did not believe it could negotiate terms that would
be materially more favorable to ASA;
(5) That Delta had proposed other changes to its commercial relationship
with ASA, the effect of which ASA's management could not readily quantify at the
time but which ASA's management believed would adversely affect further the
future financial performance of ASA, including Delta's proposals to impose upon
ASA new charges for the payment of overrides to travel agents' commissions, to
specify markets into which ASA's regional jets would be deployed, and to impose
fees for passengers not connecting with Delta flights and service performance
penalties;
(6) That the $34.00 per Share in cash to be paid in the Offer and the
Merger would represent a significant premium to the price at which the Shares
would likely trade once the anticipated renegotiated Delta Connection Agreement
provisions became effective and publicly known;
(7) That ASA's relationship with Delta within the Southeastern United
States was not exclusive and that Delta could at, any time, bring in other Delta
Connection carriers into markets served by ASA;
(8) That Delta had rejected recent proposals for ASA to introduce service
into new markets as a Delta Connection carrier, using Delta's designator code,
which severely restricted ASA's ability to expand its operations on a profitable
basis;
(9) The opinion of ASA's financial advisor, Morgan Stanley & Co.
Incorporated ("Morgan Stanley"), that as of the date of such opinion, the $34.00
per Share to be offered to the shareholders of ASA pursuant to the Offer and the
Merger is fair from a financial point of view to such shareholders (other than
Delta and its affiliates) (see "Special Factors--Opinion of Financial Advisor to
the ASA Board");
(10) The fact that the Merger Agreement provides for a first-step cash
tender offer for all outstanding Shares thereby enabling all shareholders who
tender their Shares to receive promptly $34.00 per Share in cash, and that
shareholders who do not tender their Shares will receive the same cash price in
the subsequent Merger;
(11) The other terms and conditions of the Offer, the Merger and the Merger
Agreement, including the fact that the Merger Agreement does not preclude the
ASA Board from considering other bids that could reasonably lead to a Superior
Proposal (as defined below). In particular, the Merger Agreement permits the ASA
Board (i) to furnish information to, and engage in discussions or negotiations
with, third parties who make a proposal to acquire or invest
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in ASA or engage in any other business combination or similar transactions with
ASA if the ASA Board reasonably believes in good faith, after consultation with
an investment bank of nationally recognized reputation and outside legal
counsel, that such proposal is bona fide and could reasonably lead to the
delivery of a proposal to acquire at least a majority of the outstanding Shares
that the ASA Board determines in good faith, after consulting with an investment
bank of nationally recognized reputation and its outside legal counsel, would
result in a transaction, if consummated, that is more favorable to ASA's
shareholders (other than Delta and its affiliates), from a financial point of
view (a "Superior Proposal") and that furnishing such information or engaging in
such discussions or negotiations is required for the ASA Board to comply with
its fiduciary duties under applicable law and (ii) after receipt of a Superior
Proposal, to terminate the Merger Agreement and enter into a binding agreement
with respect to such a Superior Proposal after providing Delta with two business
days' notice of its intention to do so, specifying the material terms and
conditions of such Superior Proposal, considering in good faith any revised
proposal that Delta may make, and paying Delta a termination fee of $5,000,000;
(12) A review of possible alternatives to the Offer and the Merger, the
range of possible benefits and risks to the shareholders of such alternatives,
the timing and likelihood of accomplishing any such alternatives, and the effect
of Delta's ownership of approximately 28% of the Shares and commercial
relationship with ASA on ASA's ability to pursue any of these alternatives; and
(13)The likelihood that the Offer and the Merger will be consummated,
including the fact that the obligations of Delta and Delta Sub are not
conditioned upon obtaining any financing.
The foregoing discussion of the information and factors considered and
given weight by the ASA Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the Offer and
the Merger Agreement, the ASA Board did not find it practicable to, and did not,
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determination. In addition, individual members of the ASA Board
may have given different weights to different factors.
Opinion of Financial Advisor to the ASA Board
ASA retained Morgan Stanley to act as its financial advisor in connection
with the Offer and the Merger and related matters based upon Morgan Stanley's
qualifications, expertise and reputation. On February 15, 1999, Morgan Stanley
delivered its oral opinion to the ASA Board that, as of such date and based upon
the procedures and subject to the assumptions and qualifications described to
ASA Board and later set forth in the written opinion of Morgan Stanley dated
February 15, 1999, the consideration to be received by the holders of Shares
pursuant to the Merger Agreement was fair from a financial point of view to such
holders (other than Delta and its affiliates).
The full text of Morgan Stanley's written opinion dated as of February 15,
1999, which sets forth, among other things, assumptions made, matters
considered, and scope and limitations on the review undertaken (the "Morgan
Stanley Opinion"), is attached as Exhibit (b)(1) to the Schedule 13E-3 (as
defined below) and is incorporated herein by reference. Holders of Shares are
urged to, and should, read the Morgan Stanley Opinion carefully and in its
entirety. The Morgan Stanley Opinion is directed to the ASA Board and the
fairness of the consideration, from a financial point of view, to the holders of
Shares (other than Delta and its affiliates) pursuant to the Merger Agreement
and it does not address any other aspect of the Merger nor does it constitute a
recommendation as to whether or not holders of Shares should participate in the
Offer. The summary of the Morgan Stanley Opinion set forth in this Offer to
Purchase is qualified in its entirety by reference to the full text of such
opinion.
In arriving at its opinion, Morgan Stanley (i) reviewed certain publicly
available financial statements and other information of ASA; (ii) reviewed
certain internal financial statements and other financial and operating data
concerning ASA prepared by the management of ASA; (iii) analyzed certain
financial projections prepared by the management of ASA; (iv) discussed the past
and current operations and financial condition and the prospects of ASA,
including ASA's expected future relationship with Delta, with senior executives
of ASA; (v) reviewed the reported prices and
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trading activity for the Shares; (vi) compared the financial performance of ASA
and the prices and trading activity of the Shares with that of certain other
comparable publicly-traded companies and their securities; (vii) reviewed the
financial terms, to the extent publicly available, of certain comparable
acquisition transactions; (viii) participated in discussions and negotiations
among representatives of ASA and Delta and their financial and legal advisors;
(ix) reviewed the Merger Agreement and certain related documents; and (x)
performed such other analyses and considered such other factors as Morgan
Stanley deemed appropriate.
In rendering its opinion, Morgan Stanley assumed and relied upon without
independent verification the accuracy and completeness of the information
reviewed by Morgan Stanley for the purposes of the Morgan Stanley Opinion. With
respect to the financial projections, Morgan Stanley assumed that they were
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the future financial performance of ASA. In addition, Morgan
Stanley assumed that the Offer and the Merger would be consummated on the terms
set forth in the Merger Agreement. Morgan Stanley did not make any independent
valuation or appraisal of the assets or liabilities of ASA, nor was Morgan
Stanley furnished with any such appraisals. The Morgan Stanley Opinion was
necessarily based on economic, market and other conditions as in effect on, and
the information made available to Morgan Stanley as of, the date of the Morgan
Stanley Opinion.
In arriving at its opinion, Morgan Stanley was not authorized to solicit,
and did not solicit, interest from any party, nor did it have discussions with
any party other than Delta with respect to the acquisition of ASA or any of its
assets.
Below is a brief summary of certain analyses performed by Morgan Stanley
and reviewed with the ASA Board on February 15, 1999 in connection with the
preparation of the Morgan Stanley Opinion and with its oral presentation to ASA
Board on such date. Due to the anticipated revenue reallocation and cost sharing
arrangements proposed by Delta as part of the negotiations for the renewal of
the Delta Connection Agreement between ASA and Delta, ASA adjusted its financial
projections to reflect ASA management's best estimate of certain of such
arrangements and provided the revised projections as of February 11, 1999 (the
"Revised Projections") to Morgan Stanley. As such, the current unaffected market
price of the Shares was not an appropriate means of valuation because it did not
reflect the impact of the Revised Projections and, consequently, Morgan Stanley
based its analyses on the Revised Projections. The Revised Projections are set
out in the Schedule 14D-9 being mailed to ASA shareholders herewith.
Value Impact of Revised Projections. Using the market price of the Shares
on February 12, 1999 of $31.94 and median IBES earnings per share estimates as
of February 12, 1999, Morgan Stanley calculated (i) the multiple of the current
market price per common share to earnings per share estimates for 1999 of 12.0x
and (ii) the multiple of the current market price per common share to earnings
per share estimates for 2000 of 10.4x. Applying these multiples to the Revised
Projections of earnings for 1999 and 2000, Morgan Stanley calculated adjusted
estimated Share prices of $15.60 and $16.12, respectively.
Comparable Public Company Analysis. As part of its analysis, Morgan Stanley
compared certain financial information of ASA with corresponding publicly
available information of a group of five publicly-traded regional airline
companies that Morgan Stanley considered comparable in certain respects with ASA
(the "Comparable Public Companies"), which group included: Comair; Mesa Air
Group, Inc.; Atlantic Coast Airlines Holdings, Inc.; SkyWest, Inc.; and Mesaba
Holdings, Inc.
Morgan Stanley analyzed the relative performance of ASA by comparing
certain market trading statistics for ASA with those of the Comparable Public
Companies. The market trading information used in ratios provided below is as of
February 12, 1999. The market trading information used in the valuation analysis
was (i) market price to estimated earnings per share for 1999 and (ii) market
price to estimated earnings per share for 2000. Earnings estimates for ASA were
based on the Revised Projections. Earnings per share estimates for the
Comparable Public Companies were based on median IBES estimates as of February
12, 1999. An analysis of the multiples for the Comparable Public Companies
yielded (i) multiples of the current market price per common share to earnings
per share estimates for 1999 of 12.2x to 16.6x, with a mean of 15.1x and a
median of 15.3x and (ii) multiples of the current market price per common share
to earnings per share estimates for 2000 of 9.4x to 14.4x, with a mean of 12.4x
and a median of 12.1x. Applying (i)
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multiples of 12.0x to 16.5x to 1999 estimated earnings of ASA and (ii) multiples
of 10.5x to 14.5x to 2000 estimated earnings of ASA, Morgan Stanley calculated
ranges of implied equity share values for the Shares of $16 to $22 and $16 to
$23, respectively, and an overall mean range of $16 to $22.
Precedent Transaction Analysis. Using publicly available information,
Morgan Stanley performed an analysis of two precedent transactions (the
"Precedent Airline Transactions") in the regional air carrier business segments
that Morgan Stanley deemed comparable to the Offer and the Merger. The two
transactions constituting the Precedent Airline Transactions were
(acquiror/acquiree): American Airlines, Inc./Reno Air, Inc. and Mesa Air Group
Inc./CCAir, Inc. Morgan Stanley calculated that the premium to unaffected stock
price in the American Airlines, Inc./Reno Air, Inc. and Mesa Air Group
Inc./CCAir, Inc. transactions was 51.9% and 24.4%, respectively, with a mean of
38.2% and a median of 38.2%. After combining the results of the Precedent
Airline Transactions with data from Securities Data Corporation indicating that
the mean and medium premiums paid in certain "going private" transactions during
the past five years was 43.0% and 30.0%, respectively, Morgan Stanley calculated
a range of implied equity value share values of $21 to $32 based on a range of
premiums from 30.0% to 45.0% applied to the values derived from the Comparable
Public Company analysis.
Discounted Cash Flow Analysis. Morgan Stanley performed a discounted cash
flow analysis of ASA for the fiscal years ended 1999 through 2003 based on the
Revised Projections. Unlevered free cash flows of ASA were calculated as net
income plus depreciation and amortization plus deferred taxes plus other
non-cash expenses plus after-tax net interest expense less capital expenditures
less investment in working capital. Morgan Stanley calculated terminal values by
applying a range of perpetual growth rates to the unlevered free cash flows in
fiscal 2003 from 3.0% to 5.0%, representing estimated ranges of long-term cash
flow growth rates for ASA. The unlevered cash flow streams and terminal values
were then discounted to the present using a range of discount rates from 11.0%
to 12.0%, representing an estimated weighted average cost of capital range for
ASA. The discounted values representing the aggregate values were then adjusted
by adding cash and subtracting debt to arrive at implied equity values. Based on
this analysis, Morgan Stanley calculated implied per share equity values for ASA
ranging from $20 to $25.
No company or transaction used in the Comparable Public Company and
Precedent Transaction is identical to ASA or the Merger. Accordingly, an
analysis of the results of the foregoing necessarily involves complex
considerations and judgments concerning financial and operating characteristics
of ASA and other general business, economic, market, or financial factors that
could affect the public trading value of the companies to which they are being
compared. Mathematical analysis (such as determining the average or the median)
is not itself a meaningful method of using comparable public company data.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to a partial analysis or summary description. In
arriving at its opinion, Morgan Stanley considered the results of all its
analysis as a whole and did not attribute any particular weight to any analysis
or factor considered by it. Morgan Stanley believes that selecting any portion
of Morgan Stanley's analyses, without considering all analyses, would create an
incomplete view of the process underlying its opinion. In addition, Morgan
Stanley may have deemed various assumptions more or less probable than other
assumptions, so that the ranges of valuations resulting for any particular
analysis described above should not be taken to be Morgan Stanley's view of the
actual value of ASA.
In performing its analyses, Morgan Stanley made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of ASA. The analyses
performed by Morgan Stanley are not necessarily indicative of actual value,
which may be significantly more or less favorable than suggested by such
analyses. Such analyses were performed solely as part of Morgan Stanley's
analysis of whether the consideration to be received by the holders of Shares
pursuant to the Merger Agreement was fair from a financial point of view to such
holders (other than Delta and its affiliates), and were conducted in connection
with the delivery of the Morgan Stanley Opinion. The analyses do not purport to
be appraisals or to reflect the prices at which ASA might actually be sold.
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As described above, the Morgan Stanley Opinion provided to the ASA Board
was one of a number of factors taken into consideration by ASA Board in making
its determination to recommend adoption of the Merger Agreement and the
transactions contemplated thereby. Consequently, the Morgan Stanley analyses
described above should not be viewed as determinative of the opinion of the ASA
Board or the view of the management with respect to the value of ASA.
The consideration to be received by the holders of Shares pursuant to the
Merger Agreement was determined through negotiations between ASA and Delta and
was approved by the entire ASA Board.
The ASA Board retained Morgan Stanley based upon its experience and
expertise. Morgan Stanley is an internationally recognized investment banking
and advisory firm. As part of its investment banking business, Morgan Stanley is
regularly engaged in the valuation of business and securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuation for estate, corporate and other purposes. Morgan Stanley has
advised ASA that, in the ordinary course of its business, Morgan Stanley and its
affiliates may actively trade the debt and equity securities or senior loans of
ASA and Delta for their own account and for the accounts of customers and,
accordingly, may at any time hold a long or short term position in such
securities. In the past, Morgan Stanley has provided investment banking services
to Delta unrelated to the Offer and Merger, for which services Morgan Stanley
has received compensation. In December 1998, Morgan Stanley acted as agent in
connection with a private placement of Delta notes for which Delta paid Morgan
Stanley a fee not in excess of $200,000, and such fee was the only fee paid by
Delta to Morgan Stanley in 1998. Morgan Stanley and its affiliates may maintain
relationships with ASA and Delta in the future.
Pursuant to a letter agreement between ASA and Morgan Stanley, dated
February 11, 1999, ASA has agreed to pay Morgan Stanley: (A) if no Merger
Agreement is entered into, an "Advisory Fee" calculated to be approximately
$100,000, (B) if the Merger Agreement is entered into or the Offer is commenced,
an "Agreement Fee" equal to $1,500,000 or (C) if the Offer is consummated, a
"Transaction Fee" equal to $5,000,000 against which any Advisory Fee or
Agreement Fee will be credited. The full amount of the Transaction Fee is to be
paid by ASA when control of 50% or more of the Shares changes hands. In addition
to any fees for professional services, Morgan Stanley will also be reimbursed
for expenses incurred in connection with Morgan Stanley's representation of ASA.
ASA has also agreed to indemnify Morgan Stanley and its affiliates against
certain liabilities, including liabilities under the federal securities laws,
related to, arising out of or in connection with the engagement of Morgan
Stanley by ASA.
The foregoing summary does not purport to be a complete description of the
analyses performed by Morgan Stanley and is qualified by reference to the Morgan
Stanley Opinion attached as Exhibit (b)(1) to the Schedule 13E-3 and attached as
Schedule II to the Schedule 14D-9 being mailed to ASA shareholders herewith.
Copies of the Morgan Stanley Opinion are available for inspection and
copying at the principal executive offices of ASA during regular business hours
by any shareholder of ASA, or a shareholder's representative who has been so
designated in writing.
Position of Delta, Delta Sub and Delta Holdings Regarding Fairness of the Offer
and the Merger
Delta and Delta Sub believe that the consideration to be received by ASA's
shareholders pursuant to the Offer and the Merger is fair to such shareholders.
Delta and Delta Sub base their belief on the following facts:
(i) the fact that the ASA Board concluded that the Offer and the
Merger are fair to, and in the best interests of, ASA's shareholders
(other than Delta and its affiliates);
(ii) notwithstanding the fact that Morgan Stanley's opinion was
addressed to the ASA Board and that neither Delta nor Delta Sub is
entitled to rely on such opinion, the fact that the ASA Board received
an opinion from Morgan Stanley that, as of the date of such opinion
and based on and subject to certain matters stated
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in such opinion, the consideration to be paid in the Offer and the
Merger is fair to the holders of Shares (other than Delta and its
affiliates) from a financial point of view;
(iii) the long-term value and prospects of ASA given the fact
that the marketing arrangements between Delta and ASA are terminable
on 30 days' written notice and hence subject to renegotiation;
(iv) the fact that the Offer constitutes a 6.5% premium over
the closing market price of ASA's Shares on February 12, 1999, the
business day immediately prior to the date on which the Offer was
announced;
(v) the fact that the same consideration will be paid in both
the Offer and the Merger;
(vi) the fact that the Offer and the Merger will each provide
consideration to ASA's shareholders entirely in cash;
(vii) the fact that, because of the current marketing alliance
between Delta and ASA pursuant to the Delta Connection Agreement, ASA
has a higher value to Delta than it holds for any other potential
bidder; and
(viii) the terms and conditions of the Offer, the Merger and the
Merger Agreement, including the fact that the Merger Agreement does
not preclude the ASA Board from considering other bids that could
reasonably lead to a Superior Proposal, and the ASA Board's right to
terminate the Merger Agreement upon the payment of only a $5.0 million
termination fee in order to enter into a superior proposal.
Delta and Delta Sub did not find it practicable to assign, nor did they assign,
relative weights to the individual factors considered in reaching its conclusion
as to fairness. In light of the nature of ASA's business, Delta and Delta Sub
did not deem net book value or liquidation value to be relevant indicators of
the value of the Shares.
Purpose and Structure of the Offer and the Merger; Reasons of Delta for the
Offer and the Merger
The purpose of the Offer and the Merger is for Delta to increase Delta's
ownership of ASA from approximately 28% to 100%. Upon consummation of the
Merger, ASA will become an indirect, wholly-owned subsidiary of Delta. The
acquisition of the Shares not owned by Delta and its affiliates has been
structured as a cash tender offer followed by a cash merger so as to effect a
prompt and orderly transfer of ownership of ASA from ASA's public shareholders
to Delta and Delta Sub, and so as to provide such shareholders with cash for all
of their Shares.
Under the GBCC, the approval of the ASA Board and the affirmative vote of
the holders of a majority of the issued and outstanding Shares are required to
approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger. The ASA Board has approved and adopted the Merger
Agreement and the transactions contemplated thereby, and the only remaining
required corporate action of ASA is the approval and adoption of the Merger
Agreement and the transactions contemplated thereby by the affirmative vote of
the holders of a majority of the issued and outstanding Shares. Unless it is no
longer required to do so under the GBCC, ASA has agreed to cause a meeting of
its shareholders as soon as reasonably practicable after consummation of the
Offer for the purpose of voting on the approval and adoption of the Merger and
the Merger Agreement. If Delta and its affiliates own a majority of the
outstanding Shares as a result of the Offer or otherwise, Delta would have
sufficient voting power to and would approve the Merger without the affirmative
vote of any other shareholder of ASA. Delta, Delta Holdings and Delta Sub have
agreed to vote their Shares in favor of the Merger.
Delta has decided to acquire ASA at this time to improve customer service
and to strengthen its financial position. Delta believes customer service
improvements will result from more closely integrated flight schedules between
the two airlines, new service opportunities and the implementation at ASA of
operational improvements and efficiencies that Delta has developed in the last
few years. Delta also believes that the acquisition will generate revenue
benefits through more efficient operations, market growth, better utilization of
aircraft at both airlines and improved business functions such as integrated
scheduling, market planning and revenue management.
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Plans for ASA after the Offer and the Merger
Pursuant to the Merger Agreement, upon completion of the Offer, Delta and
Delta Sub intend to effect the Merger in accordance with the terms of the Merger
Agreement. See "Special Factors--The Merger Agreement."
The Merger Agreement provides that, effective upon the consummation of the
Offer, Delta will be entitled to designate a number of directors (rounded up to
the nearest whole number) to the ASA Board in proportion to the percentage of
the total number of outstanding Shares of ASA owned by Delta and its affiliates.
It also provides, however, that ASA shall use its reasonable best efforts to
cause at least two persons who are not employees of ASA or affiliated with Delta
to be members of the ASA Board until such time as the Merger is consummated.
After the Merger, it is expected that John N. Selvaggio, who is currently
Senior Vice President-Airport Customer Service of Delta, will serve as President
and Chief Executive Officer of ASA; Ronald V. Sapp, who is currently Chief
Financial Officer and Senior Vice President-Finance of ASA, will continue to
serve in those positions; and Edward J. Paquette, who is currently Senior Vice
President-Operations of ASA, will continue to serve in the same position.
Except as otherwise described in this Offer to Purchase and except for the
transactions contemplated by the Merger Agreement, Delta has no current plans or
proposals which relate to or would result in: (a) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving ASA; (b)
a sale or transfer of a material amount of assets of ASA; (c) any change in the
management of ASA or any change in any material term of the employment contract
of any executive officer; or (d) any other material change in ASA's corporate
structure or business.
Nevertheless, Delta may initiate a review of ASA and its assets, corporate
structure, capitalization, operations, properties, policies, management and
personnel to determine what changes, if any, would be desirable following the
Merger in order best to organize and coordinate the activities of ASA and Delta.
Furthermore, in connection with its ongoing review of its long term strategy
with respect to the utilization of regional jets in Delta's route network, Delta
may, in the future, consider transactions such as the disposition or acquisition
of material assets, alliances, joint ventures, other forms of co-operation with
third parties or other extraordinary transactions affecting ASA or its
operations.
Rights of Shareholders in the Offer and the Merger
Shareholders do not have dissenters' rights as a result of the Offer.
However, if the Merger is consummated, shareholders of record of ASA at the time
of the Merger who (i) do not vote their Shares in favor of the Merger and (ii)
have, prior to the shareholders meeting at which the Merger is approved,
delivered to ASA written notice of their intention to demand dissenters' rights
if the Merger is effectuated, will have the right under the GBCC to demand and
receive payment in cash of the fair value of their Shares outstanding
immediately prior to the effective date of the Merger in accordance with Part 2
of Article 13 of the GBCC.
Under the GBCC, within ten days of the later of (i) the date of the
consummation of the Merger and (ii) receipt of a payment demand from a
dissenting shareholder, by notice to each dissenting shareholder who complied
with the statutory requirements, ASA is required to offer to pay each such
dissenting shareholder the amount ASA estimates to be the fair value of the
Shares owned by such dissenting shareholder, plus accrued interest thereon, and
send to the dissenting shareholder certain other statutorily required
information with respect to ASA and its estimate of the fair value of the
Shares. If ASA does not offer payment for such Shares within the required time
period, the dissenting shareholder may (i) demand from ASA the information
required to accompany a company's offer of payment under the GBCC and (ii)
notify ASA of its own estimate of the fair value of the Shares and demand
payment thereof with respect to Shares owned by him or her. If the dissenting
shareholder fails to respond within 30 days of ASA's offer to pay, the
dissenting shareholder will be deemed to have accepted ASA's offer. If the
dissenting shareholder accepts or is deemed to have accepted ASA's offer, ASA
shall make payment for such dissenting shareholder's Shares within 60 days of
the later of (i) the making of the offer to pay and (ii) consummation of the
Merger.
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If ASA and the dissenting shareholder cannot settle on a payment amount,
ASA shall commence a court proceeding within 60 days after receiving the
dissenting shareholder's payment demand in order to determine the fair value of
the Shares and accrued interest thereon. Shareholders who properly demand
payment and otherwise comply with the applicable statutory procedures will be
entitled to receive a judicial determination of the fair value of their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) and to receive payment of such fair value in cash.
Any such judicial determination of the fair value of such Shares could be based
upon considerations other than or in addition to the price paid in the Offer and
the Merger and the market value of the Shares. Shareholders should recognize
that the value so determined could be higher than, lower than or equal to the
price per Share paid pursuant to the Offer or the consideration per Share to be
paid in the Merger.
If any holder of Shares who demands payment for of his or her Shares under
the GBCC fails to perfect, or effectively withdraws or loses his dissenters'
rights, as provided in the GBCC, the Shares of such holder will be converted
into the Merger Consideration in accordance with the Merger Agreement. A
shareholder may withdraw his demand for payment by delivery to Delta of a
written withdrawal of his demand for payment and acceptance of the Merger.
The foregoing summary of the rights of shareholders does not purport to be
a complete statement of the procedures to be followed by shareholders desiring
to exercise any available dissenters' rights. The preservation and exercise of
dissenters' rights require strict adherence to the applicable provisions of the
GBCC, which appear as Exhibit (e) to the Schedule 13E-3, and which are
incorporated herein by reference thereto. Failure to follow the procedures set
forth in such provisions may result in a loss of such rights.
The foregoing description of certain provisions of the GBCC is not
necessarily complete and is qualified in its entirety by reference to the GBCC.
The Merger Agreement
The following is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as an exhibit to Delta's Amendment No. 4 to
Schedule 13D filed with the Commission on February 16, 1999. The summary is
qualified in its entirety by reference to the Merger Agreement, which is
incorporated herein by reference thereto. Shareholders are urged to read the
Merger Agreement in its entirety.
The Offer
The Merger Agreement provides for the commencement of the Offer as promptly
as practicable after February 15, 1999, but in no event later than February 22,
1999. The Merger Agreement also provides that the obligation of Delta Sub to
accept for payment and pay for Shares tendered pursuant to the Offer is subject
to the satisfaction or waiver of the Minimum Condition and certain other
conditions that are described in "The Tender Offer--Certain Conditions of the
Offer." Pursuant to the Merger Agreement, Delta Sub generally has the right to
waive any condition to the Offer and to make any change in the terms or
conditions of the Offer. However, Delta Sub may not waive the Minimum Condition
and may not make any change in the Offer which changes the form of consideration
to be paid, decreases the price per Share or the number of Shares sought in the
Offer, imposes conditions to the Offer in addition to those set forth in "The
Tender Offer--Certain Conditions of the Offer," amends the terms or conditions
of the Offer in a manner adverse to ASA or, except as provided in the next
sentence, extends the Offer. However, Delta Sub may, without the consent of ASA,
(i) extend the Offer beyond the scheduled expiration date if on any scheduled
expiration date of the Offer all conditions to the Offer shall not have been
satisfied or waived or (ii) extend the Offer for any period required by any
rule, regulation or interpretation of the Commission. Furthermore, for so long
as the Merger Agreement is in effect and the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), has not expired, Delta Sub will extend the Offer from time to time for a
period or successive periods not to exceed ten business days each after the
previously scheduled expiration date of the Offer.
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The Merger Agreement also provides that, effective upon the acceptance for
payment by Delta Sub of any Shares pursuant to the Offer, Delta will be entitled
to designate the number of directors, rounded up to the next whole number, on
the ASA Board that equals the product of the total number of directors on the
ASA Board (giving effect to the election of any additional directors pursuant to
this provision) multiplied by the percentage that the number of Shares
beneficially owned by Delta (including Shares accepted for payment) bears to the
total number of Shares outstanding. In furtherance thereof, ASA will take all
action necessary to cause Delta's designees to be elected or appointed to the
ASA Board, including, without limitation, increasing the number of directors and
seeking and accepting resignations of incumbent directors. Effective upon such
acceptance for payment, ASA will use its best efforts to cause individuals
designated by Delta to constitute the same percentage as such individuals
represent on the ASA Board of (i) each committee of the Board and (ii) each
board of directors (and committee thereof) of each subsidiary of ASA.
Notwithstanding the foregoing, prior to the Effective Time, ASA will use its
reasonable best efforts to cause at least two persons who are not employees of
ASA or affiliated with Delta (the "Independent Directors") to be members of the
ASA Board.
The Merger
The Merger Agreement provides that as promptly as practicable after all
conditions to the Merger set forth therein have been satisfied or, to the extent
permitted thereunder, waived, Delta Sub will be merged with and into ASA in
accordance with the GBCC. As a result of the Merger, the separate existence of
Delta Sub will cease and ASA will continue as the Surviving Company. At the
Effective Time, each Share outstanding immediately prior to the Effective Time
(other than Shares held in the treasury of ASA, Shares owned by Delta and its
affiliates or Shares as to which dissenters' rights have been exercised) will be
converted into the right to receive the Merger Consideration.
Stock Options
At the Effective Time, each option to purchase Shares outstanding under any
employee stock option or compensation plan or arrangement of ASA that is vested
and exercisable (including any option that becomes vested and exercisable by its
terms as a result of the transactions contemplated in the Merger Agreement),
shall be canceled, and in consideration thereof, Delta will pay to the holder of
each such option promptly after the Effective Time an amount in cash determined
by multiplying (i) the excess, if any, of the amount of the Merger Consideration
over the applicable per Share exercise price of such option by (ii) the number
of Shares to which such option relates.
Representations and Warranties
The Merger Agreement contains various customary representations and
warranties of the parties thereto, including, without limitation,
representations (i) by ASA, Delta and Delta Sub as to their respective corporate
status, the authorization and the enforceability of the Merger Agreement against
each such party, the information to be provided by each such party for inclusion
in Commission filings related to the Offer and the Merger, finders' fees and
noncontravention and (ii) by ASA as to its capitalization, its subsidiaries, the
accuracy of its financial statements and filings with the Commission, compliance
with laws, the absence of undisclosed material liabilities, the absence of
certain changes or events concerning ASA's business from December 31, 1997 to
the date of the Merger Agreement, the absence of material litigation, certain
tax matters, certain employee benefit and pension plan matters, certain
environmental matters, assets, certain labor matters, insurance, the
inapplicability of Georgia anti-takeover statutes, year 2000 compliance and the
identification of and absence of material adverse changes with respect to its
material contracts. The representations and warranties contained in the Merger
Agreement will not survive the Effective Time.
Covenants
The Merger Agreement contains various customary covenants of the parties
thereto. A description of certain of these covenants follows:
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Conduct of Business. Pursuant to the Merger Agreement, ASA has agreed
that, from February 15, 1999 until the earlier of (x) the time designees of
Delta constitute a majority of the ASA Board and (y) the Effective Time,
ASA and its subsidiaries will:
(i) conduct their businesses as in the ordinary course consistent
with past practice and will use reasonable best efforts to preserve intact
their business organizations and relationships with third parties and to
keep available the services of their present officers and employees;
(ii) use all reasonable efforts to keep all material property and
equipment useful and necessary in its business in good working order and
condition;
(iii) continue, in respect of all aircraft, engines and spare parts
intended for use in its operations, its maintenance programs consistent
with past practice (except as required or permitted by applicable law),
including using reasonable best efforts to keep all such aircraft in such
condition as may be necessary to enable the airworthiness certification of
such aircraft under the Federal Aviation Act to be maintained in good
standing at all times; and
(iv) at all times up to and including the Effective Time, except to
the extent not available on commercially reasonable terms, maintain their
existing insurance coverage of all types, including (but not limited to)
"all risk", hull and property damage, in effect or procure substantially
similar substitute insurance policies with financially sound and reputable
insurance companies in at least such amounts and against such risks as are
currently covered by such policies.
Without limiting the generality of the foregoing, from the date hereof
until the earlier of (x) the time designees of Delta constitute a majority of
the ASA Board and (y) the Effective Time, ASA will not, and will cause its
subsidiaries not to, except as consented to in writing by Delta, which consent
shall not be unreasonably withheld:
(i) adopt or propose any change in their respective organizational
documents (including bylaws);
(ii) except pursuant to existing agreements or arrangements (A)
acquire (by merger, consolidation or acquisition of stock or assets) any
material corporation, partnership or other business organization or
division thereof, or sell, lease or otherwise dispose of a material
subsidiary or a material amount of assets or securities, (B) other than in
the ordinary course of business, consistent with past practice, make any
investment in an amount in excess of $250,000 in the aggregate whether by
purchase of stock or securities, contributions to capital (other than
contributions to capital of a wholly-owned subsidiary) or any property
transfer, or purchase for an amount in excess of $250,000 in the aggregate,
any property or assets of any other individual or entity, (C) waive,
release, grant or transfer any rights of material value, including any
routes or slots to which ASA had a right on February 15, 1999, (D) license
(as licensor), dispose of, assign, transfer or encumber any intellectual
property, (E) modify or change in any material respect any existing
material license, lease, contract, or other document, (F) enter into any
material agreement, (G) except to refund or refinance commercial paper,
incur, assume or prepay an amount of long-term or short-term debt
(including leases, financings, general airport revenue bonds, special
revenue bonds and special facility bonds) in excess of $2,000,000 in the
aggregate, (H) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person which are in excess of $250,000 in the
aggregate, (I) make any loans to any other person which are in excess of
$250,000 in the aggregate, or (J) authorize any capital expenditures which
individually are in excess of $500,000 or in the aggregate are in excess of
$10,000,000, in either case other than ordinary course capital expenditures
in connection with (1) engine overhauls, (2) ASA's Hartsfield Atlanta
International Airport Concourse
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C renovations, provided that representatives of Delta and ASA will meet as
soon as practicable after February 15, 1999 (x) to review the status of the
renovations and the remaining work to be done in order to complete the
renovations and (y) to consider whether alterations to such renovations are
appropriate, taking into account ASA's operational needs and contractual
obligations, (3) increases in inventory in connection with additions to
ASA's regional jet fleet and (4) momentary acquisitions of equity interests
in regional jet aircraft pursuant to sale-leaseback transactions on terms
consistent with past practice;
(iii) (A) acquire or lease any aircraft other than pursuant to
contracts or agreements in effect as of February 15, 1999; (B) exercise any
options to acquire any additional aircraft under contracts and agreements
in effect as of February 15, 1999; (C) enter into, or commit to enter into,
any new contract or agreement with respect to the acquisition or lease of
additional aircraft; (D) except as disclosed in writing to Delta, agree or
commit to accelerate the delivery of, or agree to materially delay or defer
the delivery of, aircraft for which contracts or commitments exist, or
exercise any right of substitution of different aircraft models under any
contract or arrangement; or (E) operate any aircraft configured with in
excess of 70 passenger seats;
(iv) split, combine or reclassify any shares of their respective
shares of capital stock, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of their respective shares of capital stock (other than
(x) regular quarterly dividends not in excess of $0.115 per Share, and (y)
cash dividends and distributions by a wholly owned subsidiary of ASA to ASA
or to a subsidiary all of the capital stock which is owned directly or
indirectly by ASA) or redeem, repurchase or otherwise acquire or offer to
redeem, repurchase, or otherwise acquire any of their securities or any
securities of their subsidiaries;
(v) enter into any agreement or arrangement that limits or otherwise
restricts ASA or any of its affiliates or any successor thereto or that
could, after the Effective Time, limit or restrict the Surviving Company,
any subsidiary thereof or any of their affiliates, from engaging or
competing in any line of business or in any location, which agreement or
arrangement would be material to the business of ASA or the business of
Delta or any of Delta's subsidiaries (assuming the Merger had taken place),
in either case taken as a whole;
(vi) except as otherwise disclosed in writing to Delta, adopt or amend
any bonus, profit sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or employee
benefit plan, agreement, trust, plan, fund or other arrangement for the
benefit and welfare of any director, officer or employee, or (except for
normal increases in the ordinary course of business that are consistent
with past practices and that, in the aggregate (excluding increases arising
pursuant to any collective bargaining agreements covering employees of ASA
as of February 15, 1999) do not result in a material increase in benefits
or compensation expense to ASA) increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any existing plan or arrangement (including, without
limitation, the granting of stock options or stock appreciation rights or
the removal of existing restrictions in any benefit plans or agreements);
(vii) revalue in any material respect any of their assets, including,
without limitation, writing down the value of inventory in any material
manner or write-off of notes or accounts receivable in any material manner;
(viii) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent
or otherwise) other than the payment, discharge or satisfaction in the
ordinary course of business, consistent with past practices, of liabilities
reflected
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or reserved against in the consolidated financial statements of ASA or
incurred in the ordinary course of business, consistent with past
practices;
(ix) make any federal or material state tax election or settle or
compromise any material income tax liability controversy;
(x) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures or except as required by generally accepted accounting
principles or Regulation S-X under the Exchange Act of 1934, as amended
(the "Exchange Act");
(xi) enter into any new or amended contract, agreement, side letter or
memorandum of understanding with any unions representing employees of ASA;
(xii) agree or commit to do any of the foregoing; or
(xiii) take or agree or commit to take any action that would make any
representation and warranty of ASA under the Merger Agreement inaccurate in
any material respect at, or as of any time prior to, the Effective Time.
Shareholder Meeting. Unless a shareholder vote is not required under
Georgia Law, ASA will cause a meeting of its shareholders to be duly called and
held as soon as reasonably practicable following the consummation of the Offer
for the purpose of voting on the approval and adoption of the Merger Agreement
and the transactions contemplated thereby. In connection with such meeting, ASA
(i) will use its reasonable best efforts to obtain the necessary approvals by
its shareholders of the Merger Agreement and the transactions contemplated
thereby (subject to fiduciary duties under applicable law) and (ii) will
otherwise comply with all legal requirements applicable to such meeting.
The ASA Board will recommend approval and adoption of the Merger Agreement
and the transactions contemplated thereby by ASA's shareholders (the
"Recommendation"), and neither the ASA Board nor any committee thereof will
amend, modify, withdraw, condition or qualify the Recommendation in a manner
adverse to Delta or take any action or make any statement inconsistent with the
Recommendation unless (i) the ASA Board determines in good faith, after
consultation with outside legal counsel, that it must take such action(s) to
comply with its fiduciary duties under applicable law, (ii) a Superior Proposal
(as defined below) is pending at the time the ASA Board determines to take any
such action(s) and (iii) ASA has provided reasonable prior notice advising Delta
that it intends to take such action. Nothing contained in the Merger Agreement
shall prevent the ASA Board from complying with Rule 14e-2 under the Exchange
Act with respect to any Acquisition Proposal (as defined below).
Other Offers. ASA shall not (whether directly or indirectly through
advisors, agents or other intermediaries), nor shall ASA authorize or permit any
of its officers, directors, agents, representatives, advisors or subsidiaries
to:
(i) solicit, initiate or take any action knowingly to facilitate the
submission of inquiries, proposals or offers from any Third Party (as
defined below) which constitutes or could reasonably be expected to lead to
(A) any acquisition or purchase of 20% or more of the consolidated assets
of ASA or of over 20% of any class of equity securities of ASA, (B) any
tender offer (including a self tender offer) or exchange offer that if
consummated would result in any Third Party beneficially owning 20% or more
of any class of equity securities of ASA, (C) any merger, consolidation,
business combination, sale of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving ASA or any of its
subsidiaries whose assets, individually or in the aggregate, constitute
more than 20% of the consolidated assets of ASA other
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than the transactions contemplated by the Merger Agreement or (D) any other
transaction the consummation of which would or could reasonably be expected
to interfere with, prevent or materially delay the Merger or which would or
could reasonably be expected to materially dilute the benefits to Delta of
the transactions contemplated hereby (each of (A) through (D), an
"Acquisition Proposal");
(ii) enter into or participate in any discussions or negotiations
regarding any of the foregoing, or furnish to any Third Party in connection
with an Acquisition Proposal any information with respect to its business,
properties or assets or any of the foregoing, or otherwise cooperate in any
way with, or knowingly assist or participate in, facilitate or encourage,
any effort or attempt by any Third Party to do or seek any of the
foregoing; or
(iii) grant any waiver or release under any standstill or similar
agreement with respect to any class of equity securities of ASA or any of
its subsidiaries;
except that the foregoing shall not prohibit ASA (either directly or
indirectly through advisors, agents or other intermediaries) from (x)
furnishing information pursuant to an appropriate confidentiality letter
(which ASA shall use all reasonable efforts to ensure will not be less
favorable to ASA in any material respect than the Confidentiality
Agreement) concerning ASA and its businesses, properties or assets to a
Third Party who has made or is seeking to initiate discussions with respect
to an Acquisition Proposal, and/or (y) engaging in discussions or
negotiations with such a Third Party who has made a bona fide Acquisition
Proposal, but, in either case, only to the extent the ASA Board reasonably
believes in good faith, after consultation with an investment bank of
nationally recognized reputation and outside legal counsel, that the
Acquisition Proposal is bona fide and could reasonably lead to the delivery
of a Superior Proposal and that such action by the ASA Board is required in
order for it to comply with its fiduciary duties under applicable law.
ASA shall notify Delta promptly (but in no event later than 24 hours) after
receipt by ASA or one of its subsidiaries (or any of their respective directors,
officers, agents or advisors), of any Acquisition Proposal, which notice shall
be made orally and in writing, and shall indicate the identity of the offeror
and the material terms and conditions of such Acquisition Proposal. ASA shall
keep Delta informed, on a reasonably current basis, of the status and material
terms of any such Acquisition Proposal or request, and the status of any
negotiations or discussions.
Either ASA or Delta may terminate the Merger Agreement if the ASA Board
shall have determined to approve or recommend an Acquisition Proposal after
concluding that such Acquisition Proposal constitutes a Superior Proposal.
However, ASA may not exercise such right to terminate (and may not enter into a
binding written agreement with respect to such an Acquisition Proposal) unless,
(i) ASA shall have provided to Delta at least two business days' prior written
notice that the ASA Board intends to terminate the Merger Agreement pursuant to
the right of termination described in this paragraph, specifying the material
terms and conditions of such Acquisition Proposal, and (ii) on or prior to such
termination, ASA shall have paid to Delta the Termination Fee (as defined
below). Delta may exercise its right to terminate the Merger Agreement two
business days after receiving the notice contemplated by this paragraph. In
connection with the foregoing, ASA agrees that it will, (x)not enter into a
binding agreement with respect to an Acquisition Proposal until at least the
third business day after it has provided the requisite notice to Delta, (y)
consider in good faith any offer made by Delta during that period and (z) notify
Delta promptly if its intention to enter into such an agreement shall change at
any time after such notification.
"Third Party" means any person, corporation, entity or "group," as defined
in Section 13(d) of the Exchange Act, other than Delta or any of its affiliates.
"Superior Proposal" means a bona fide, written Acquisition Proposal for at least
a majority of the outstanding Shares of ASA that is on terms that a majority of
the ASA Board determines in good faith, after consulting with an investment bank
of nationally recognized reputation and its outside legal counsel, would result
in a transaction, if consummated, that is more favorable to ASA's shareholders
(in their capacities as shareholders) (other than Delta and its affiliates),
from a financial point of view.
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As of February 15, 1999 ASA is obligated to immediately cease and cause its
advisors, agents and other intermediaries to cease any and all existing
activities, discussions or negotiations with any parties conducted prior to such
date with respect to any of the foregoing, and must use its reasonable best
efforts to cause any such parties in possession of confidential information
about ASA that was furnished by or on behalf of ASA in connection with any of
the foregoing to return or destroy all such information in the possession of any
such party or in the possession of any agent or advisor of any such party.
Reasonable Best Efforts. Subject to the terms and conditions of the Merger
Agreement, each party to the Merger Agreement will use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by the Merger Agreement;
provided that nothing in the Merger Agreement shall oblige Delta or ASA or any
of its affiliates to agree to dispose of, agree to cease operating or agree to
hold separate any business, properties or assets which are material to the
business or operations, as such business or operations are currently conducted,
of ASA or of Delta and its subsidiaries (including, in either case, without
limitation, any gates at Hartsfield Atlanta International Airport).
Public Announcements. Delta and ASA will consult with each other before
issuing any press release or making any public statement with respect to the
Merger Agreement and the transactions contemplated thereby.
Indemnification of ASA Directors and Officers. For six years after the
Effective time, and for so long thereafter as any claim asserted prior to such
date has not been fully adjudicated, Delta will cause the Surviving Company to
indemnify and hold harmless the present and former officers and directors of ASA
in respect of acts or omissions occurring prior to the Effective Time to the
extent provided under the Articles of Incorporation and Bylaws of Delta Sub in
effect on February 15, 1999 (which shall become the Articles of Incorporation
and Bylaws of the Surviving Corporation pursuant to the Merger) and Delta agrees
to cause the provisions of such Articles of Incorporation and Bylaws, insofar as
they relate to such matters, to continue in full force and effect for such
period of time without any amendment thereof; provided that such indemnification
and such obligation shall be subject to any limitation imposed from time to time
under applicable law. Delta guarantees irrevocably and unconditionally the
obligations of the Surviving Corporation under this paragraph and such Articles
of Incorporation and Bylaws. Furthermore, for six years after the Effective
Time, and for so long thereafter as any claim asserted prior to such date has
not been fully adjudicated, Delta will cause the Surviving Company to use its
best efforts to provide officers' and directors' liability insurance in respect
of acts or omissions occurring prior to the Effective Time covering each such
person currently covered by ASA's officers' and directors' liability insurance
policies on terms with respect to coverage and amount no less favorable than the
aggregate coverage and amounts of such policies in effect on February 15, 1999.
Employee Benefits. During the period commencing on the Effective Time and
ending on the second anniversary thereof, Delta shall provide or cause to be
provided to employees of ASA salary and benefits no less favorable, in the
aggregate, to the salary and benefits provided such employees immediately prior
to the Effective Time (disregarding for this purpose any stock options or other
equity-based compensation provided such employees prior to the Effective Time).
Conditions of the Offer
See "The Tender Offer--Certain Conditions of the Offer."
Conditions to the Merger
The Merger Agreement provides that the obligations of ASA, Delta and Delta
Sub to consummate the Merger are subject to the satisfaction of the following
conditions: (a) if required by Georgia Law, the Merger Agreement shall have been
adopted by the shareholders of ASA in accordance with such law; (b) any
applicable waiting period under the HSR Act relating to the Merger shall have
expired or been terminated; (c) no provision of any applicable law or regulation
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and no judgment, injunction, order or decree shall prohibit the consummation of
the Merger; and (d) Delta or its affiliates shall have purchased Shares pursuant
to the Offer in sufficient number to satisfy the Minimum Condition.
Termination
The Merger Agreement provides that the Merger Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of the Merger Agreement by the shareholders of
ASA) under the following circumstances:
(i) by mutual written consent of ASA and Delta;
(ii) by either ASA or Delta, (A) if Delta Sub shall not have
purchased Shares pursuant to the Offer by the Expiration Date;
provided that (x) the right to terminate the Merger Agreement under
this subparagraph shall not be available to any party whose breach of
any provision of the Merger Agreement has been the cause of, or
resulted in, the failure of such purchase to be made on or before the
Expiration Date or (y) if the waiting period (and any extension
thereof) applicable to the consummation of the Offer under the HSR Act
shall expire or terminate less than ten business days prior to the
Expiration Date, the right to terminate the Merger Agreement pursuant
to this subparagraph shall not become effective until the tenth
business day following the Expiration Date; or (B) if there shall be
any law or regulation that makes consummation of the Offer or the
Merger illegal or otherwise prohibited or if any judgment, injunction,
order or decree enjoining Delta, Delta Sub or ASA from consummating
the Offer or the Merger is entered and such judgment, injunction,
order or decree shall become final and unappealable;
(iii) by Delta, (A) in accordance with the provisions for termination
set forth in "--Covenants--Other Offers"; (B) if the ASA Board shall
or shall resolve to (x) not recommend, or withdraw its approval or
recommendation of, the Offer, the Merger, the Merger Agreement or any
of the transactions contemplated thereby, (y) modify such approval or
recommendation in a manner adverse to Delta or Delta Sub or (z)
approve, recommend or fail to take a position that is adverse to any
proposed Acquisition Proposal; (C) if ASA shall breach any of its
obligations described in "--Covenants--Other Offers"; or (D) if Delta
shall have terminated the Offer without purchasing any Shares
thereunder or failed to purchase any Shares prior to the Expiration
Date in accordance with the terms of the Merger Agreement, in either
case due to any event or circumstance that would result in a failure
to satisfy any of the conditions that are described in "The Tender
Offer--Certain Conditions of the Offer"; or
(iv) by ASA, (A) in accordance with the provisions for termination
set forth in "--Covenants--Other Offers"; (B) if Delta shall have
failed to commence the Offer in accordance with the terms of the
Merger Agreement; or (C) if Delta shall have terminated the Offer
without purchasing any Shares due to any event or circumstance, unless
such termination shall have been caused by or resulted from the
failure of ASA to perform in any material respect any material
obligation contained in the Merger Agreement.
The Merger Agreement provides that if the Merger Agreement is terminated,
it will become void and of no effect with no liability on the part of any party
thereto, except that termination of the Merger Agreement shall be without
prejudice to any rights ASA, Delta or Delta Sub may have under the Merger
Agreement against any other party to the Merger Agreement for wilful breach of
the Merger Agreement. The agreements contained in this paragraph and under
"Certain Fees and Expenses" and relating to confidentiality of information, the
obligations of Delta Sub, the liability of directors and officers of ASA,
governing law, third party beneficiaries and jurisdiction shall survive the
termination of the Merger Agreement.
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Certain Fees and Expenses
Except as provided below, all costs and expenses incurred in connection
with the Merger Agreement will be paid by the party incurring such cost or
expense. Pursuant to the Merger Agreement, ASA will pay Delta in immediately
available funds a termination fee of $5,000,000 (the "Termination Fee") if, (i)
the Merger Agreement is terminated by Delta pursuant to clauses (A), (B) or (C)
of paragraph (iii) under "--Termination" above; (ii) the Merger Agreement is
terminated by ASA pursuant to clause (A) of paragraph (iv) under "--Termination"
above; or (iii) within six months after termination of the Merger Agreement
pursuant to clause (A) of paragraph (ii) under "-- Termination" above, ASA
enters into an agreement to consummate an Acquisition Proposal with any Third
Party and such Acquisition Proposal is subsequently consummated. If ASA fails to
promptly pay any amount due described in this paragraph and, in order to obtain
such payment, Delta commences a suit which results in a judgment against ASA for
the fees set forth in this paragraph, ASA will also pay to Delta its costs and
expenses incurred in connection with such litigation.
Amendments and Waivers
Any provision of the Merger Agreement may be amended or waived prior to the
Effective Time if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by ASA, Delta and Delta Sub or in the case
of a waiver, by the party against whom the waiver is to be effective; provided
that (i) after such time that designees of Delta constitute a majority of the
ASA Board, such amendment or waiver shall be approved by a majority of the
Independent Directors (if any Independent Directors are on the ASA Board at such
time) and (ii) after the adoption of the Merger Agreement and approval of the
Merger by the shareholders of ASA, no such amendment or waiver shall, without
the further approval of such shareholders, alter or change (x) the amount or
kind of consideration to be received in exchange for any Shares, (y) any term of
the Articles of Incorporation of the Surviving Company or (z) any of the terms
or conditions of the Merger Agreement if such alteration or change would
adversely affect the holders of any Shares.
The Shareholders Agreement
Delta entered into a shareholders agreement, dated as of February 15, 1999
(the "Shareholders Agreement"), with George F. Pickett, John W. Beiser,
Elizabeth H. Pickett and Maureen W. Beiser (collectively, the "Interested
Shareholders"). Pursuant to the Shareholders Agreement, each Interested
Shareholder agreed to tender, or cause to be tendered, upon the request of Delta
(and agreed that, subject to applicable law, he or she will not withdraw),
pursuant to and in accordance with the terms of the Offer, all outstanding
Shares beneficially owned by such Interested Shareholder. Further, the
Interested Shareholders agreed not to vote any Shares in favor of the approval
of any (i) Acquisition Proposal, (ii) reorganization, recapitalization,
liquidation or winding up of ASA or any other extraordinary transaction
involving ASA, (iii) corporate action the consummation of which would frustrate
the purposes, or prevent or delay the consummation, of the transactions
contemplated by the Merger Agreement or (iv) other matter relating to, or in
connection with, any of the foregoing matters. A copy of the Shareholders
Agreement is filed as Exhibit (c)(6) to the Schedule 14D-1 (as defined below)
and is incorporated herein by reference, and the foregoing summary of the
Shareholders Agreement is qualified in its entirety by reference thereto.
The Confidentiality Agreement
On February 9, 1999, Delta and ASA entered into a Confidentiality
Agreement, under which ASA agreed to provide certain confidential information
relating to its operations to Delta. Pursuant to the Confidentiality Agreement,
Delta agreed that Delta and its representatives would hold non-public
information received from ASA under the Confidentiality Agreement in confidence,
except to the extent that disclosure is legally mandated or compelled by any
court, tribunal or governmental authority. The Confidentiality Agreement does
not limit Delta's use of any information which (i) was previously known by Delta
or its representatives, (ii) was independently developed by Delta or its
representatives, (iii) was acquired by Delta or its representatives from a third
party which is not obligated by ASA not to disclose such information or (iv)
which is or becomes publicly available through no breach by Delta of its
obligations under the Confidentiality Agreement. A copy of the Confidentiality
Agreement is filed as Exhibit (c)(7) to the Schedule
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14D-1 and incorporated herein by reference, and the foregoing summary of the
Confidentiality Agreement is qualified in its entirety by reference thereto.
Interests of Certain Persons in the Offer and the Merger
Employment and Consulting Agreements
On February 15, 1999, ASA and Messrs. George F. Pickett and John W. Beiser
(each an "Executive") agreed pursuant to certain memorandum agreements (each a
"Memorandum Agreement") with Delta to negotiate in good faith to enter into
formal written employment and consulting agreements incorporating the terms
described below, with the intention that such employment and consulting
agreements will be executed prior to the Effective Time.
Pursuant to the terms of the Memorandum Agreements, Mr. Pickett is to serve
as Chief Executive Officer of ASA and Mr. Beiser is to serve as President and
Secretary of ASA from February 15, 1999 until the Effective Time or such shorter
period as provided by Memorandum Agreements (the "Employment Term") and each is
to serve as a non-employee consultant of ASA from the Effective Time until the
180th day following the Effective Time or such shorter period as provided by the
Memorandum Agreements (the "Consulting Term"). During the Employment Term and
the Consulting Term, ASA is to pay Messrs. Pickett and Beiser base salaries at
the rate in effect as of February 15, 1999 and each is to continue to earn an
annual bonus entitlement equal to 40% of his respective base salary on the same
terms that currently apply to such officer under ASA's annual bonus plan. As of
the 180th day following the Effective Time, ASA shall pay to Mr. Pickett and to
Mr. Beiser a lump sum payment of $427,267 and $416,896, respectively, (provided,
however, that such payment is subject to a reduction, if necessary, if it would
be treated as an "excess parachute payment" under Section 280G of the Internal
Revenue Code, as amended (the "Code"), as consideration for each officer's
agreement to render services and honor the non-competition covenant in the
Memorandum Agreements. Pursuant to terms of the Memorandum Agreements, from
February 15, 1999 until the second anniversary of the Effective Time, neither
Mr. Pickett nor Mr. Beiser may (i) directly or indirectly provide management or
executive services to any person or entity operating a commuter airline using
planes with a capacity of less than 70 seats in an market in which ASA currently
operates or (ii) solicit or hire any employee of ASA to perform a service on
behalf of a competitor similar to any service performed by such employee on
behalf of ASA. If the Executive's employment or consulting services are
terminated without Cause or because of death or disability during the Employment
Term or Consulting Term, the Executive will receive accrued salary, a pro rata
bonus and the Special Payment. "Cause" and "Special Payment" are defined as set
forth in the Memorandum Agreements.
The foregoing description of the Memorandum Agreements for Messrs. Pickett
and Beiser does not purport to be complete and is qualified in its entirety by
reference to the Memorandum Agreements which are filed as Exhibits (c)(4) and
(c)(5), respectively, to the Schedule 14D-1 and incorporated herein by
reference.
Special Severance Plan
On February 15, 1999, ASA adopted the ASA Holdings, Inc. Special Severance
Plan (the "Severance Plan"). Generally, the Severance Plan provides that if ASA
terminates the employment of an eligible executive (which includes certain
senior officers other than Mr. Pickett and Mr. Beiser) without "Cause" or the
executive terminates for "Good Reason" within two years of a "Change in
Control," the executive will receive an amount in cash equal to either 18 or 24
months of the executive's highest annual rate of base salary in effect during
the twelve-month period immediately prior to termination, subject to a
reduction, if necessary, if the payments thereunder would be treated as "excess
parachute payments" under Section 280G of the Code. In addition, the executive
will also receive continued coverage under ASA's medical, dental and life
insurance plans for the same number of months. In the event the executive cannot
continue to participate in such plans, ASA will otherwise provide such benefits
on the same after-tax basis as if continued participation had been permitted.
"Cause," "Good Reason" and "Change in Control" are defined as set forth in the
Severance Plan. Consummation of the Offer will constitute a Change of Control
under the Severance Plan.
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<PAGE>
The foregoing description of the Severance Plan does not purport to be
complete and is qualified in its entirety by reference to the Special Severance
Plan which is filed as Exhibit 9 to the Schedule 14D-9 and is incorporated
herein by reference thereto.
Retention Agreements
ASA has advised Delta that it intends to enter into retention agreements
(each a "Form of Retention Agreement") with each of Ronald V. Sapp and Edward J.
Paquette. Mr. Sapp's Form of Retention Agreement provides that if Mr. Sapp is
still employed with ASA on the six month anniversary of the closing of the
Offer, Mr. Sapp will receive a lump sum amount equal to approximately three
times the annual base salary payable to Mr. Sapp for the 1999 calendar year
(provided, however, that such payment is subject to a reduction, if necessary,
if it would be treated as an "excess parachute payment" under Section 280G of
the Code). Mr. Paquette's Form of Retention Agreement provides that if Mr.
Paquette is still employed with ASA on the six month anniversary of the closing
of the Offer, Mr. Paquette will receive a lump sum amount equal to the annual
base salary payable to him for the 1999 calendar year. The Form of Retention
Agreement also provides that each respective employee will receive such amount
if ASA terminates the employee's employment without "Cause" or the employee
terminates for "Good Reason" prior to the six month anniversary of the closing
of the Offer. "Cause" and "Good Reason" are defined as set forth in the Form of
Retention Agreement.
The foregoing description of the Form of Retention Agreement does not
purport to be complete and is qualified in its entirety by reference to the Form
of Retention Agreement for Messrs. Sapp and Paquette which are filed as Exhibits
10 and 11 to the Schedule 14D-9 and are incorporated herein by reference.
Amendment to ASA's 1997 Nonqualified Stock Option Plan
On February 15, 1999, ASA amended the ASA Holdings, Inc. 1997 Nonqualified
Stock Option Plan (the "1997 Plan") to provide that in the event of a Change in
Control, all options granted under the 1997 Plan will become fully vested and
immediately exercisable. "Change in Control" is defined as set forth in the
amendment to the 1997 Plan. The foregoing description of the 1997 Plan does not
purport to be complete and is qualified in its entirety by reference to the 1997
Plan and the amendment to the 1997 Plan which are filed as Exhibit 12 to the
Schedule 14D-9 and are incorporated herein by reference. Consummation of the
Offer will constitute a Change of Control under the 1997 Plan.
Executive Deferred Compensation Plan
Pursuant to the Atlantic Southeast Airlines, Inc. Executive Deferred
Compensation (Retirement) Plan, as amended on February 15, 1999 (the "Deferred
Plan"), each month the Employer (defined as either ASA or Atlantic Southeast)
contributes an amount equal to 15% of the compensation of a Class A participant
(senior executive officer designated by the ASA Board) and 10% of the
compensation of a Class B participant (officer designated by the ASA Board), to
a fund established to receive and invest such contributions. No employee
contributions are allowed. Employees may direct the investment of their
accounts. If a participant's employment is terminated for Cause or if the
participant terminates employment for Good Reason within two years after a
Change in Control, the participant will have a nonforfeitable vested interest in
all benefits accrued under the terms of the Deferred Plan. "Change in Control,"
"Cause" and "Good Reason" are defined as set forth in the Deferred Plan. The
definition of "Change in Control" was amended on February 15, 1999 to conform to
the definition of "Change in Control" in the 1997 Plan. The consummation of the
Offer will constitute a Change in Control under the Deferred Plan.
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<PAGE>
The foregoing description of the Deferred Plan does not purport to be
complete and is qualified in its entirety by reference to the Executive Deferred
Compensation (Retirement) Plan which is filed as Exhibit 13 to the Schedule
14D-9 and is incorporated herein by reference thereto. Supplemental Executive
Retirement Plan
ASA's Supplemental Executive Retirement Plan (the "SERP") is described
under the heading "Supplemental Executive Retirement Plan" in the ASA's Proxy
Statement for the Annual Meeting of Shareholders on May 21, 1998 (the "Proxy
Statement"). A copy of the relevant portion of the Proxy Statement is filed as
Exhibit 1 to the Schedule 14D-9 being mailed to ASA shareholders herewith and
such portion of the Proxy Statement is incorporated herein by reference thereto.
On February 15, 1999, the SERP was amended to change the "Change in Control"
definition to have the same meaning as in Deferred Plan. The foregoing
description of the amendment to the SERP does not purport to be complete and is
qualified in its entirety by reference to the Second Amendment to the SERP which
is filed as Exhibit 20 to the Schedule 14D-9 being mailed to ASA shareholders
herewith hereto and is incorporated herein by reference thereto.
Indemnity Agreement of Executive Officer
On February 15, 1999, the Board of Directors authorized ASA to enter into
an Indemnity Agreement (each an "Indemnity Agreement of Executive Officer") with
each of six of its executive officers, including George F. Pickett, John W.
Beiser, Edward J. Paquette, Ronald V. Sapp, R. Mark Bole and Renee Skinner. The
Indemnity Agreement of Executive Officer provides the Indemnitee with specific
contractual assurance that indemnification protection provided under ASA's
Bylaws will be available to Indemnitee regardless of, among other things, any
amendment to or revocation of the Company's Articles or Bylaws or a Change in
Control of ASA. The Indemnity Agreement of Executive Officer further provides
that ASA has purchased and maintains directors' and officers' insurance
consisting of a primary policy providing $15 million in aggregate coverage and a
supplemental policy providing $15 million in aggregate coverage, and that ASA
will maintain such insurance coverage for so long as Indemnitee shall continue
to serve as an executive officer of ASA or thereafter shall be subject to any
possible Claim or threatened, pending or completed litigation. "Indemnitee",
"Change in Control" and "Claim" are defined as set forth in the form of
Indemnity Agreement of Executive Officer.
Indemnity Agreement of Director
On February 15, 1999, the Board of Directors authorized ASA to enter into
an Indemnity Agreement (each an "Indemnity Agreement of Director") with each of
its directors, which include George F. Pickett, John W. Beiser, Jean A. Mori,
Parker H. Petit, Alan M. Voorhees, Ralph M. Voorhees and George Berry. The terms
of the Indemnity Agreement of Director are substantially similar to the terms of
the Indemnity Agreement of Executive Officer described above.
The foregoing descriptions of the Indemnity Agreement of Executive Officer
and the Indemnity Agreement of Director do not purport to be complete and are
qualified in their entirety by reference to the forms of the Indemnity Agreement
of Executive Officer and the Indemnity Agreement of Director which are filed as
Exhibits 15 and 16, respectively, to the Schedule 14D-9 and are incorporated
herein by reference thereto.
Amended and Restated Founding Officer Agreement
ASA, Atlantic Southeast and George F. Pickett and John W. Beiser,
respectively, are parties to Amended and Restated Founding Officer Agreements,
each dated April 16, 1997, as further amended on February 15, 1999, pursuant to
which in the event Mr. Pickett or Mr. Beiser, as the case may be, ceases to be
an employee of the Company within two years after a Change in Control, Atlantic
Southeast and ASA will pay Mr. Pickett or Mr. Beiser, as applicable, the lesser
of (i) two times gross compensation accrued in the last twelve months or (ii)
the maximum amount which may be paid to Mr. Pickett or Mr. Beiser, as
applicable, which is deductible to the Company under Section 280G of the
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<PAGE>
Internal Revenue Code. "Change in Control" is defined as set forth in the
Amended and Restated Founding Officer Agreement.
The foregoing description of the Amended and Restated Founding Officer
Agreements does not purport to be complete and is qualified in its entirety by
reference to the Amended and Restated Founding Officer Agreements for Mr.
Pickett and Mr. Beiser which are filed as Exhibits 17 and 18, respectively, to
the Schedule 14D-9 and are incorporated herein by reference thereto.
Certain Travel Benefits
On February 15, 1999, in recognition of Mr. Pickett's and Mr. Beiser's
founding ASA and of their service to ASA, the ASA Board granted lifetime travel
privileges to Mr. Pickett and his wife and to Mr. Beiser, his wife and Mr.
Beiser's dependent children, respectively, on all Atlantic Southeast Airlines
flights.
Stock Options
ASA previously granted to certain employees options to purchase Shares
under the ASA 1997 Nonqualified Stock Option Plan. On February 15, 1999, in
connection with the Offer, ASA amended that plan to provide that all options
granted under the plan will become fully exercisable upon a change in control of
ASA. The consummation of the Offer will constitute a change in control for these
purposes. ASA has also previously granted to certain directors of ASA options to
purchase Shares under the ASA 1998 Nonqualified Stock Option Plan for
Non-Employee Directors, all of which options are fully exercisable by their
terms. Under the terms of the Merger Agreement, each of the employee and
director stock options outstanding as of the Effective Time of the Merger will
be cancelled in return for a cash payment to the option holder equal to the
product of (A) the Merger Consideration minus the per Share exercise price of
the option, multiplied by (B) the numbers of Shares subject to the option.
The table below sets forth for each of Messrs. Pickett, Beiser, Sapp and
Paquette and for all other executive officers and non-employee directors as a
group: (i) the number of stock options held as of February 19, 1999 and (ii) the
aggregate value of such options based on the spread between the exercise price
of such options and the Merger Consideration:
<TABLE>
<CAPTION>
Aggregate
Stock Options Value of Options Based
on Merger Consideration
-----------------------
<S> <C> <C>
George F. Pickett 459,500 $ 4,126,275.00
John W. Beiser 321,700 $ 1,882,762.50
Ronald V. Sapp 119,100 $ 638,250.00
Edward J. Paquette 103,900 $ 491,700.00
Other Executive Officers as a Group 324,000 $ 805,426.50
Non-Employee Directors as a Group 25,000 $ 46,087.50
</TABLE>
Beneficial Ownership of the Shares
Schedules I and II of this Offer to Purchase set forth information
concerning beneficial ownership of the Shares as of February 19, 1999 by each of
the directors and executive officers of ASA, Delta, Delta Sub and Delta
Holdings, respectively.
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<PAGE>
ASA has been advised that all of its directors intend to tender or cause
the tender of substantially all of their Shares pursuant to the Offer. In
addition, ASA's two most senior executives have entered into a Shareholders
Agreement with Delta pursuant to which they have agreed to tender their Shares
in the Offer. See "--The Shareholders Agreement."
Related Party Transactions
See "Special Factors-- Background of the Offer-- Marketing and Code Sharing
Arrangements Between ASA and Delta" and "-- Delta Ownership of ASA Shares; Stock
Agreement."
Management of ASA After the Merger
See "Special Factors-- Plans for ASA after the Offer and the Merger."
THE TENDER OFFER
Terms of the Offer
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension or
amendment), Delta Sub will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn as permitted
by "The Tender Offer--Withdrawal Rights." The term "Expiration Date" means 12:00
midnight, New York City time, on Friday, March 19, 1999, unless and until Delta
Sub, in its sole discretion (but subject to the terms and conditions of the
Merger Agreement), shall have extended the period during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by Delta Sub, shall expire.
Delta Sub expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any of the conditions specified in "The Tender
Offer--Certain Conditions of the Offer," by giving oral or written notice of
such extension to the Depositary. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the rights of a tendering shareholder to withdraw such shareholder's Shares.
See "The Tender Offer--Withdrawal Rights."
Subject to the applicable regulations of the Commission, Delta Sub also
expressly reserves the right, in its sole discretion (but subject to the terms
and conditions of the Merger Agreement), at any time and from time to time, (i)
to delay acceptance for payment of, or, regardless of whether such Shares were
theretofore accepted for payment, payment for, any Shares, pending receipt of
any regulatory approval specified in "The Tender Offer--Certain Legal Matters;
Regulatory Approvals" (ii) to terminate the Offer and not accept for payment any
Shares upon the occurrence of any of the conditions specified in "The Tender
Offer--Certain Conditions of the Offer" and (iii) to waive any condition, or
otherwise amend the Offer in any respect, by giving oral or written notice of
such delay, termination, waiver or amendment to the Depositary and by making a
public announcement thereof. Delta Sub acknowledges that (i) Rule 14e-1(c) under
the Exchange Act requires Delta Sub to pay the consideration offered or return
the Shares tendered promptly after the termination or withdrawal of the Offer
and (ii) Delta Sub may not delay acceptance for payment of, or payment for
(except as provided in clause (i) of the first sentence of this paragraph), any
Shares upon the occurrence of any of the conditions specified in "The Tender
Offer--Certain Conditions of the Offer" without extending the period of time
during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to shareholders in a manner reasonably designed to inform
them of such changes) and without
29
<PAGE>
limiting the manner in which Delta Sub may choose to make any public
announcement, Delta Sub shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a press
release to the Dow Jones News Service.
If Delta Sub makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Delta Sub will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Delta Sub should decide to decrease the number of Shares being sought or
to increase or decrease the consideration being offered in the Offer, such
decrease in the number of Shares being sought or such increase or decrease in
the consideration being offered will be applicable to all shareholders whose
Shares are accepted for payment pursuant to the Offer and, if at the time notice
of any such decrease in the number of Shares being sought or such increase or
decrease in the consideration being offered is first published, sent or given to
holders of such Shares, the Offer is scheduled to expire at any time earlier
than the period ending on the tenth business day from and including the date
that such notice is first so published, sent or given, the Offer will be
extended at least until the expiration of such ten business day period. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or United States federal holiday and consists of the time period from
12:01 a.m. through 12:00 midnight, New York City time.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition and the other conditions specified in "--Certain Conditions of the
Offer."
ASA has provided Delta Sub with ASA's shareholder list and security
position listings for the purpose of disseminating the Offer to holders of
Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on ASA's shareholder list
and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies, and similar
persons whose names, or the names of whose nominees, appear on the shareholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing.
Acceptance for Payment and Payment for Shares
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Delta Sub will accept for payment, and will pay for, all Shares
validly tendered prior to the Expiration Date and not properly withdrawn,
promptly after the latest to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions to the Offer set forth in "The Tender
Offer-- Certain Conditions of the Offer."
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (A) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company
("Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Tender Offer--Procedures for Accepting the Offer and Tendering Shares," (B) the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or, in the case of a book-entry
transfer, an Agent's Message (as defined below) in lieu of the Letter of
Transmittal and (C) any other documents required under the Letter of
Transmittal.
For purposes of the Offer, Delta Sub will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Delta Sub gives oral or written notice to the
Depositary of Delta Sub's acceptance for payment of such Shares pursuant to the
Offer. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payments from Delta Sub and
transmitting such payments to tendering shareholders whose Shares have been
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<PAGE>
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE
FOR SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
shareholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in "The Tender Offer--Procedures for Accepting the Offer and Tendering
Shares," such Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
If, prior to the Expiration Date, Delta Sub shall increase the
consideration offered to any holders of Shares pursuant to the Offer, such
increased consideration shall be paid to all holders of Shares that are
purchased pursuant to the Offer, whether or not such Shares were tendered prior
to such increase in consideration.
Delta Sub reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such
transaction or assignment will not relieve Delta Sub of its obligations under
the Offer and will in no way prejudice the rights of tendering shareholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
Procedures for Accepting the Offer and Tendering Shares
In order for a holder of Shares to validly tender Shares pursuant to the
Offer, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal) and any other documents required by the Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and either (i) the Share Certificates evidencing
tendered Shares must be received by the Depositary at such address or such
Shares must be tendered pursuant to the procedure for book-entry transfer
described below and a Book-Entry Confirmation must be received by the Depositary
(including an Agent's Message if the tendering shareholder has not delivered a
Letter of Transmittal), in each case prior to the Expiration Date, or (ii) the
tendering shareholder must comply with the guaranteed delivery procedures
described below. The term "Agent's Message" means a message, transmitted by a
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares which are the subject of such
book-entry confirmation, that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that Delta Sub may enforce
such agreement against such participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer
The Depositary will establish accounts with respect to the Shares at the
Book-Entry Transfer Facilities for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that is
a participant in the system of any Book-Entry Transfer Facility may make a
book-entry delivery of Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account at such Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer at a Book-Entry Transfer Facility, either the Letter of
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<PAGE>
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in lieu
of the Letter of Transmittal, and any other required documents, must, in any
case, be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase prior to the Expiration Date, or the
tendering shareholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees
Signatures on all Letters of Transmittal must be guaranteed by a firm which
is a member of the Medallion Signature Guarantee Program, or by any other
"eligible guarantor institution", as such term is defined in Rule 17Ad-15 under
the Exchange Act (each of the foregoing referred to as an "Eligible
Institution"), except in cases where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. If a Share
Certificate is registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made, or a Share Certificate not
accepted for payment or not tendered is to be returned, to a person other than
the registered holder(s), then the Share Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear on the Share Certificate, with the
signature(s) on such Share Certificate or stock powers guaranteed by an Eligible
Institution. See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery
If a shareholder desires to tender Shares pursuant to the Offer and the
Share Certificates evidencing such shareholder's Shares are not immediately
available or such shareholder cannot deliver the Share Certificates and all
other required documents to the Depositary prior to the Expiration Date, or such
shareholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered; provided that all the
following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Delta Sub, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees (or, in the case
of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the NASDAQ National Market
operated by the National Association of Securities Dealers, Inc. is open
for business.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the form
of Notice of Guaranteed Delivery made available by Delta Sub.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message), and any other
documents required by the Letter of Transmittal.
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<PAGE>
Determination of Validity
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by Delta Sub in its sole discretion, which determination shall be final and
binding on all parties. Delta Sub reserves the absolute right to reject any and
all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of its counsel, be unlawful. Subject to the
terms of the Merger Agreement, Delta Sub also reserves the absolute right to
waive any condition of the Offer or any defect or irregularity in the tender of
any Shares of any particular shareholder, whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of Shares
will be deemed to have been validly made until all defects and irregularities
have been cured or waived. None of Delta Sub, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. Delta Sub's interpretation
of the terms and conditions of the Offer (including the Letter of Transmittal
and the instructions thereto) will be final and binding.
Other Requirements
By executing the Letter of Transmittal as set forth above, a tendering
shareholder irrevocably appoints designees of Delta Sub as such shareholder's
proxies, each with full power of substitution, in the manner set forth in the
Letter of Transmittal, to the full extent of such shareholder's rights with
respect to the Shares tendered by such shareholder and accepted for payment by
Delta Sub (and with respect to any and all other Shares or other securities
issued or issuable in respect of such Shares on or after February 15, 1999). All
such proxies shall be considered coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Delta Sub accepts such Shares for payment. Upon such acceptance for payment, all
prior proxies given by such shareholder with respect to such Shares (and such
other Shares and securities) will be revoked without further action, and no
subsequent proxies may be given nor any subsequent written consent executed by
such shareholder (and, if given or executed, will not be deemed to be effective)
with respect thereto. The designees of Delta Sub will, with respect to the
Shares for which the appointment is effective, be empowered to exercise all
voting and other rights of such shareholder as they in their sole discretion may
deem proper at any annual or special meeting of ASA's shareholders or any
adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. Delta Sub reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon Delta Sub's payment for
such Shares, Delta Sub must be able to exercise full voting rights with respect
to such Shares.
The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the Offer, as well as
the tendering shareholder's representation and warranty that (a) such
shareholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Exchange Act, (b) the tender of such Shares complies with
Rule 14e-4, and (c) such shareholder has the full power and authority to tender
and assign the Shares tendered, as specified in the Letter of Transmittal. Delta
Sub's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and Delta Sub
upon the terms and subject to the conditions of the Offer.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH SHAREHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER OR SOCIAL SECURITY NUMBER OR CERTIFY THAT
SUCH SHAREHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. IF BACKUP
WITHHOLDING APPLIES WITH RESPECT TO A SHAREHOLDER, THE DEPOSITARY IS REQUIRED TO
WITHHOLD 31% OF ANY PAYMENTS MADE TO SUCH SHAREHOLDER. SEE INSTRUCTION 9 OF THE
LETTER OF TRANSMITTAL. IF A SHAREHOLDER IS A NON-RESIDENT ALIEN OR FOREIGN
ENTITY NOT SUBJECT TO BACK-UP WITHHOLDING, THE SHAREHOLDER MUST GIVE THE
DEPOSITARY A COMPLETED FORM W-8 CERTIFICATE OF FOREIGN STATUS PRIOR TO RECEIPT
OF PAYMENT.
33
<PAGE>
Withdrawal Rights
Tenders of the Shares made pursuant to the Offer are irrevocable except
that such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Delta Sub pursuant to the Offer, may
also be withdrawn at any time after April 22, 1999. If Delta Sub extends the
Offer, is delayed in its acceptance for payment of Shares or is unable to accept
Shares for payment pursuant to the Offer for any reason, then, without prejudice
to Delta Sub's rights under the Offer, the Depositary may, nevertheless, on
behalf of Delta Sub, retain tendered Shares, and such Shares may not be
withdrawn except to the extent that tendering shareholders are entitled to
withdrawal rights as described herein.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution,
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in "The Tender Offer--Procedures for Accepting
the Offer and Tendering Shares," any notice of withdrawal must specify the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Delta Sub, in its sole
discretion, whose determination will be final and binding. None of Delta Sub,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in "The Tender Offer--Procedures for Accepting the Offer
and Tendering Shares."
Certain United States Federal Income Tax Consequences
The summary of Federal income tax consequences set forth below is for
general information only and is based on the law as currently in effect. The tax
consequences to each shareholder will depend in part upon such shareholder's
particular situation. Special tax consequences not described herein may be
applicable to particular classes of taxpayers, such as financial institutions,
broker-dealers, persons who are not citizens or residents of the United States
and shareholders who acquired their Shares through the exercise of an employee
stock option or otherwise as compensation. ALL SHAREHOLDERS SHOULD CONSULT WITH
THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND
THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND
CHANGES IN SUCH TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for Federal income tax purposes under the Internal Revenue
Code of 1986, as amended, and may also be a taxable transaction under applicable
state, local or foreign income tax laws. Generally, for Federal income tax
purposes, a tendering shareholder will recognize gain or loss in an amount equal
to the difference between the cash received by the shareholder pursuant to the
Offer and the shareholder's adjusted tax basis in the Shares purchased pursuant
to the Offer. For Federal income tax purposes, such gain or loss will be a
capital gain or loss if the Shares are a capital asset in the hands of the
shareholder. Shareholders are urged to consult with their own tax advisors
concerning the treatment of capital gain or loss for Federal income tax purposes
(including the possibility of a reduced tax rate on certain capital gains and
the limitations on the deductibility of capital loss).
34
<PAGE>
A shareholder that tenders Shares may be subject to backup withholding
unless the shareholder provides its taxpayer identification number and certifies
that such number is correct or properly certifies that it is awaiting a TIN, or
unless an exemption applies. A shareholder who does not furnish its taxpayer
identification number may be subject to a penalty imposed by the Internal
Revenue Service. See "The Tender Offer--Procedures for Accepting the Offer and
Tendering Shares."
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding; provided that the required information is given to the Internal
Revenue Service. If backup withholding results in an overpayment of tax, a
refund can be obtained by the shareholder upon filing an appropriate income tax
return.
The receipt of cash by shareholders pursuant to the Merger should result in
Federal income tax consequences to such shareholders similar to those described
above.
Price Range of Shares; Dividends
The Shares are traded in the over-the-counter market and are quoted on the
NASDAQ National Market System under the symbol ASAI.
The following table sets forth for the periods indicated the high and low
sale prices per Share as reported on the NASDAQ National Market System and the
cash dividends paid per Share, as reported in ASA's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997, and thereafter as reported in
published financial sources.
Market Price
-------------- Dividend
High Low Declared
------ ------ --------
1997
First Quarter................................. $25.63 $19.63 $0.10
Second Quarter................................ 28.63 20.13 0.10
Third Quarter................................. 31.13 26.75 0.10
Fourth Quarter................................ 31.75 26.50 0.10
-----
Total....................................... $0.40
=====
1998
First Quarter................................. $40.88 $28.25 $0.11
Second Quarter................................ 51.00 35.38 0.11
Third Quarter................................. 50.25 31.50 0.11
Fourth Quarter................................ 40.00 21.75 0.11
-----
Total....................................... $0.44
=====
1999
First Quarter (through February 19, 1999)..... $33.75 $29.03 $0.115
On February 19, 1999 there were 864 holders of record of Shares and
28,523,177 outstanding Shares.
On February 12, 1999, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the closing price of the
Shares on the NASDAQ National Market System was $3115/16 per Share. On February
19, 1999, the last full day of trading before the commencement of the Offer, the
closing price of the Shares on the NASDAQ National Market System was $33.625 per
Share. Shareholders are urged to obtain a current market quotation for the
Shares.
35
<PAGE>
On January 26, 1999, the ASA Board declared a regular quarterly cash
dividend of $0.115 per Share, payable on March 15, 1999 to holders of record as
of March 1, 1999. Shareholders of record as of March 1, 1999 will be entitled to
receive such dividend, regardless of whether or when their Shares are tendered
or purchased pursuant to the Offer.
Certain Information Concerning ASA
Except as otherwise set forth herein, the information concerning ASA
contained in this Offer to Purchase, including financial information, has been
furnished by ASA or has been taken from or based upon publicly available
documents and records on file with the Commission and other public sources.
General
ASA is a Georgia corporation with its principal offices located at 100
Hartsfield Centre Parkway, Suite 800, Atlanta, Georgia 30354. ASA is a holding
company the principal assets of which are the shares of its wholly owned
subsidiaries Atlantic Southeast, a Georgia corporation, and ASA Investments,
Inc., a Delaware corporation. ASA considers the airline business of Atlantic
Southeast to be its only industry segment.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of ASA and certain other information are set forth in Schedule I
hereto.
ASA is subject to the informational filing requirements of the Exchange Act
and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's regional offices located at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Information regarding the
public reference facilities may be obtained from the Commission by telephoning
1-800-SEC-0330. ASA's filings are also available to the public on the
Commission's internet site (http://www.sec.gov). Copies of such materials may
also be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Selected Financial Information
Set forth below is certain selected financial information relating to ASA
which has been excerpted or derived from the audited financial statements
contained in ASA's Annual Report on Form 10-K for each of the fiscal years ended
December 31, 1997 and 1996 (collectively, the "ASA 10-K's") and the unaudited
financial statements contained in ASA's September 30, 1998 Form 10-Q (the "ASA
10-Q"). The financial information that follows is qualified in its entirety by
reference to the ASA 10-K's and the ASA 10-Q and other documents filed by ASA
with the Commission which contain comprehensive financial information. The ASA
10-K's, the ASA 10-Q and such other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth above under
"--General."
<TABLE>
<CAPTION>
(In Thousands Except Per Share Amounts)
Nine Months Nine Months
Ended Ended Year Ended Year Ended
September 30, September 30, December 31, December 31,
1998 1997 1997 1996
------------- ------------- ------------ ------------
(unaudited) (audited)
<S> <C> <C> <C> <C>
Operating Revenues ................. $305,418 $288,276 $385,289 $375,300
Operating Income ................... 74,092 59,768 79,585 85,152
Income before Income Taxes ......... 81,984 64,797 86,841 91,106
Net Income ......................... 51,035 40,844 54,512 56,613
Earnings per Common Share:
Primary .......................... 1.71 1.37 1.82 1.83
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
(In Thousands Except Per Share Amounts)
Nine Months Nine Months
Ended Ended Year Ended Year Ended
September 30, September 30, December 31, December 31,
1998 1997 1997 1996
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Diluted .......................... 1.70 1.36 1.81 1.83
Dividends declared per Share ....... 0.33 0.30 0.40 0.38
At end of period:
Working capital .................. 161,258 144,050 129,978 147,719
Total assets ..................... 519,676 502,926 505,960 486,237
Long-term debt ................... 59,680 79,942 72,792 94,618
Shareholders' equity ............. 329,047 293,978 295,925 260,216
Additional Data:
Book value per share ............. 11.14 9.78 9.95 8.68
Ratio of earnings to fixed
charges ........................ 3.3 2.9 3.0 2.8
</TABLE>
Repurchases of Shares by ASA
ASA has made the following repurchases of Shares since January 1, 1997:
<TABLE>
<CAPTION>
Amount of Shares Range of Prices Average
Purchased Paid Purchase Price
---------------- --------------- --------------
<S> <C> <C> <C>
1997
First Quarter .................. 125,000 $21.38-$22.75 $ 22.07
Second Quarter ................. 70,000 $20.25-$21.25 $ 20.82
Third Quarter .................. -- -- --
Fourth Quarter ................. 346,000 $27.38-$29.88 $ 28.97
1998
First Quarter .................. 132,100 $35.13-$37.50 $ 36.19
Second Quarter ................. 50,000 $35.97-$36.13 $ 35.05
Third Quarter .................. 375,000 $35.04-$41.38 $ 36.65
Fourth Quarter ................. 958,000 $22.13-$39.98 $ 32.37
1999
First Quarter (through 2/19/99) 20,000 $ 30.63 $ 30.63
</TABLE>
Certain Information Concerning Delta, Delta Holdings and Delta Sub
Delta is a Delaware corporation with its principal offices located at
Hartsfield Atlanta International Airport, 1030 Delta Boulevard, Atlanta, Georgia
30320. Delta is a major air carrier providing scheduled air transportation for
passengers, freight and mail.
Delta's total operating revenues for the years ended June 30, 1998 and
1997, were $14.1 billion and $13.6 billion, respectively, while total operating
revenues for the six months ended December 31, 1998 and 1997 were approximately
$7.3 billion and approximately $7.0 billion, respectively. Its pre-tax income
for the year ended June 30, 1998 was $1.6 billion, yielding net income of $1.0
billion, while its pre-tax income for the year ended June 30, 1997 was $1.4
billion, resulting in net income of $854 million. For the six months ended
December 31, 1998, Delta's pre-tax income was $858 million, resulting in net
income of $520 million, while pre-tax income for the similar period in 1997 was
$730 million, resulting in net income for such period of $443 million.
At December 31, 1998, Delta had total assets of $14.7 billion and
shareholders' equity of $4.1 billion, compared with total assets of $13.1
billion and shareholders' equity of $3.4 billion as at December 31, 1997.
37
<PAGE>
Delta Holdings is a Delaware corporation established on December 19, 1989
for the purpose of holding equity interests in certain subsidiaries of Delta, as
well as in other entities in which Delta owns an equity interest, including its
current connection carriers. Its principal offices are located at 1105 North
Market Street, Suite 1300, Wilmington, Delaware 19801. Delta Holdings is the
direct holder of 7,995,000 Shares.
Delta Sub is a Georgia corporation established on February 11, 1999. It has
not carried on any activities other than the execution of the Merger Agreement.
Its principal offices are located at Hartsfield Atlanta International Airport,
Post Office Box 20706, Atlanta, Georgia 30320. Delta Sub is a direct,
wholly-owned subsidiary of Delta Holdings, and an indirect, wholly-owned
subsidiary of Delta.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Delta, Delta Holdings and Delta Sub and certain other information
are set forth in Schedule II hereto.
As of February 19, 1999, Delta beneficially owned 7,995,000 of the
28,523,177 outstanding Shares, representing approximately 28% of the Shares then
outstanding.
Except as described in this Offer to Purchase, none of Delta, Delta Sub,
or, to the best knowledge of Delta, any of the persons listed in Schedule II to
this Offer to Purchase or any associate or majority-owned subsidiary of Delta or
any such listed persons owns or has any right to acquire, directly or
indirectly, any Shares or has effected any transaction in the Shares during the
past 60 days.
Except as provided in the Merger Agreement or as otherwise described in
this Offer to Purchase, none of Delta, Delta Sub, Delta Holdings nor, to the
best knowledge of Delta, Delta Sub and Delta Holdings, any of the persons listed
in Schedule II to this Offer to Purchase, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of ASA, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, finder's fees, joint ventures, loan or option arrangements, puts or
call, guarantees of loans, guaranties against loss, guaranties of profits,
division of profits or loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, since January 1, 1997, none
of Delta, Delta Sub, Delta Holdings nor, to the best knowledge of Delta, Delta
Sub, and Delta Holdings, any of the persons listed on Schedule II hereto, has
had any business relationship or transaction with ASA or any of its executive
officers, directors or affiliates that is required to be reported under the
rules and regulations of the Commission applicable to the Offer. Except as set
forth in this Offer to Purchase, since January 1, 1997, there have been no
contacts, negotiations or transactions between Delta or any of its subsidiaries
or, to the best knowledge of Delta, any of the persons listed in Schedule II to
this Offer to Purchase, on the one hand, and ASA or its affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
Delta is subject to the informational filing requirements of the Exchange
Act and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's regional offices located at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Information regarding the
public reference facilities may be obtained from the Commission by telephoning
1-800-SEC-0330. Delta's filings are also available to the public on the
Commission's internet site (http://www.sec.gov). Copies of such materials may
also be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Certain
reports and other information concerning Delta may also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
38
<PAGE>
Financing of the Offer and the Merger
The total amount of funds required by Delta and Delta Sub to consummate the
Offer and the Merger and to pay related fees and expenses is estimated to be
approximately $727.5 million. The Offer and the Merger are not conditioned on
obtaining financing. Delta expects that it will obtain such funds from cash on
hand and from financing arrangements which Delta expects to enter into prior to
the consummation of the Offer, which may include a new revolving credit facility
or an issuance of medium-term notes pursuant to Delta's existing program
providing for the issuance of up to $300 million aggregate principal amount of
Medium-Term Notes, Series C. If such financing arrangements are not available at
the time of the consummation of the Offer, then Delta would, in any event,
borrow the requisite amount of funds to consummate the Offer and the Merger
under its Credit Agreement, dated as of May 2, 1997, among Delta, the banks
party thereto, and NationsBank, N.A. (South), as Agent Bank (the "1997 Bank
Credit Agreement").
Under the 1997 Bank Credit Agreement, Delta may borrow up to $1.25 billion
on an unsecured and revolving basis until May 1, 2002, subject to compliance
with certain conditions. The interest rate under this facility is, at Delta's
option, the London Interbank Offered Rate or the prime rate, in each case plus a
margin which is subject to adjustment based on certain changes in the credit
ratings of Delta's long-term, senior unsecured debt. Delta also has the option
to obtain loans through a competitive bid process. The 1997 Bank Credit
Agreement contains certain covenants that restrict Delta's ability to grant
liens, to incur or guarantee debt and to enter into flight equipment leases. It
also provides that if there is a change of control (as defined) of Delta, the
banks' obligation to extend credit terminates, any amounts outstanding become
immediately due and payable and Delta will immediately deposit cash collateral
with the banks in an amount equal to all outstanding letters of credit. At
February 19, 1999, no borrowings had been made, and no amount was outstanding
under the 1997 Bank Credit Agreement.
The summary of the 1997 Bank Credit Agreement is qualified in its entirety
by reference to the 1997 Bank Credit Agreement, a copy of which appears as
Exhibit (a)(1) to the Schedule 13E-3 and is incorporated herein by reference.
Dividends and Distributions
On January 26, 1999, the ASA Board declared a dividend of $0.115 per Share
payable on March 15, 1999 to holders of record of Shares on March 1, 1999.
Holders of record of the Shares on the record date for such dividend will be
entitled to receive such dividend whether or not they tender their Shares
pursuant to the Offer, and no adjustment will be made to the Offer Price or to
any other terms of the Offer as a result of the payment of such dividend to such
shareholders.
If, subsequent to the date of the Merger Agreement but prior to the
Effective Time, ASA changes the number of Shares outstanding as a result of any
stock split, stock dividend, recapitalization or similar transaction, then
appropriate adjustments shall be made in all amounts payable pursuant to the
Merger Agreement, including, without limitation, the Offer Price and the Merger
Consideration.
Certain Effects of the Offer
Market for the Shares
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade publicly
and could adversely affect the liquidity and market value of the remaining
Shares held by the public.
39
<PAGE>
Stock Quotation
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued inclusion in the NASDAQ
National Market System. If, as a result of the purchase of Shares pursuant to
the Offer, the Shares no longer meet the criteria for continuing inclusion in
the NASDAQ National Market System, the market for the Shares could be adversely
affected. According to NASDAQ's published guidelines, the Shares would not meet
the criteria for continued inclusion in the NASDAQ's National Market System if
at least one of the following two standards are not met: (1) among other things,
a minimum of 750,000 publicly held Shares, an aggregate market value of the
publicly held Shares of at least $5 million and a minimum of 400 shareholders of
round lots or (2), among other things, a minimum of 1,100,000 publicly held
shares, an aggregate market value of the publicly held Shares of at least $15
million, at least four registered and active market makers and a minimum of 400
shareholders of round lots.
If one of these two standards were not met, quotations might continue to be
published in the over-the-counter "additional list" or one of the "local lists"
unless, as set forth in NASDAQ's published guidelines, the number of
publicly-held Shares (excluding Shares held by officers, directors and
beneficial owners of more than 10% of the Shares) is less than 100,000, there
are fewer than 300 holders in total, or there is not at least one market maker
for the Shares. If the Shares are no longer eligible for NASDAQ quotation,
quotations might still be available from other sources.
Exchange Act Registration
The Shares are currently registered under Section 12(b) of the Exchange
Act. Registration of the Shares under the Exchange Act may be terminated upon
application of ASA to the Commission if the Shares are not listed on a national
securities exchange and held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by ASA to its shareholders and to the
Commission and would make certain provisions of the Exchange Act no longer
applicable to ASA, such as the short-swing profit recovery provisions of Section
16(b) of the Exchange Act, the requirement of furnishing a proxy statement
pursuant to Section 14(a) of the Exchange Act in connection with shareholders'
meetings and the related requirement of furnishing an annual report to
shareholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions. Furthermore, the ability of
"affiliates" of ASA and persons holding "restricted securities" of ASA to
dispose of such securities pursuant to Rule 144 or 144A promulgated under the
Securities Act of 1933, may be impaired or eliminated. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or be eligible for inclusion in the NASDAQ National Market
System. Delta and Delta Sub currently intend to seek to cause ASA to terminate
the registration of the Shares under the Exchange Act as soon after consummation
of the Offer as the requirements for termination of registration are met.
Margin Regulations
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that,
following the Offer, the Shares would no longer constitute "margin securities"
for the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers. In
any event, the Shares will cease to be "margin securities" if registration of
the Shares under the Exchange Act is terminated.
40
<PAGE>
Increased Interest in Net Book Value and Net Earnings of ASA
If the Offer is consummated, the direct and indirect interest of Delta in
ASA's net book value and net earnings will increase in proportion to the number
of Shares acquired in the Offer. Following consummation of the Merger, Delta's
direct and indirect interest in such items will increase to 100%, and ASA will
be an indirect, wholly owned subsidiary of Delta. Accordingly, Delta and its
subsidiaries will be entitled to all benefits resulting from that interest,
including all income generated by ASA's operations, and any future increase in
ASA's value and the right to elect all members of the ASA Board. Similarly,
Delta will also bear the risk of losses generated by ASA's operations and any
decrease in the value of ASA after the Merger. Furthermore, after the Merger,
pre-Merger shareholders (other than Delta) will not have the opportunity to
participate directly in the earnings and growth of ASA and will not face the
risk of losses generated by ASA's operations or decline in the value of ASA.
If all of the outstanding Shares are purchased pursuant to the Offer,
Delta's beneficial interest in the net book value (shareholders' equity) at
September 30, 1998 and net income of ASA for the nine months ended September 30,
1998, as reflected in ASA's September 30, 1998 Form 10-Q, would increase to 100%
or $329,047,000 and $51,035,000, respectively.
Certain Conditions of the Offer
Notwithstanding any other provision of the Offer, Delta and Delta Sub shall
not be required to accept for payment or pay for any Shares, and may terminate
the Offer, if,
(i) the Minimum Condition has not been satisfied by August 31, 1999,
(ii) the applicable waiting period under the HSR Act shall not have
expired or been terminated by the Expiration Date of the Offer, or
(iii) at any time on or after the date of the Merger Agreement and prior to
the acceptance for payment or payment of Shares, any of the following conditions
exist:
(A) there shall be instituted or pending any action, suit,
investigation or proceeding by any government or governmental
authority or agency, domestic or foreign, before any court or
governmental authority or agency, domestic or foreign,
(1) challenging or seeking to make illegal, to delay materially
or otherwise directly or indirectly to restrain or prohibit
the making of the Offer, the acceptance for payment of or
payment for some of or all the Shares pursuant to the Offer
or the consummation of the Merger, seeking to obtain
material damages in connection with the transactions
contemplated by the Offer or the Merger,
(2) seeking to restrain, prohibit or terminate ASA's or, as a
result of the transactions contemplated by the Merger
Agreement, Delta's ownership, operation or lease (or that of
their respective subsidiaries or affiliates) of any
business, properties or assets which are material to the
business or operations, as such business or operations are
currently conducted, of ASA and its subsidiaries or of Delta
and its subsidiaries (including, in either case, without
limitation, any gates at Hartsfield Atlanta International
Airport), as the case may be, or to compel ASA or, as a
result of the transactions contemplated by the Merger
Agreement, Delta or any of their respective subsidiaries or
affiliates to dispose of, cease operating or hold separate
any business, properties or assets which are material to the
business or operations, as such business or operations are
currently conducted, of ASA and its subsidiaries or
41
<PAGE>
of Delta and its subsidiaries (including, in either case,
without limitation, any gates at Hartsfield Atlanta
International airport), as the case may be,
(3) seeking to impose limitations on the ability of Delta or any
of its subsidiaries or affiliates effectively to exercise
full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or owned
by Delta or any of its subsidiaries or affiliates on all
matters properly presented to ASA's shareholders,
(4) seeking to require divestiture by Delta or any of its
subsidiaries or affiliates of any Shares,
(5) that otherwise, in the judgment of Delta, is likely to have
a Material Adverse Effect (as defined in the Merger
Agreement); or
(B) there shall be in effect any judgment, decree or order of any
court or governmental authority or agency, domestic or foreign,
or any other legal restraint,
(1) which makes illegal, delays materially or otherwise
restrains or prohibits the Offer, the acceptance for payment
of or payment for some or all of the Shares pursuant to the
Offer or the consummation of the Merger, or imposes material
damages in connection with the transactions contemplated by
the Offer or the Merger,
(2) which restrains, prohibits or terminates ASA's or, as a
result of the transactions contemplated by the Merger
Agreement, Delta's ownership, operation or lease (or that of
their respective subsidiaries or affiliates) of any
business, properties or assets which are material to the
business or operations, as such business or operations are
currently conducted, of ASA and its subsidiaries or of Delta
and its subsidiaries (including, in either case, without
limitation, any gates at Hartsfield Atlanta International
Airport), as the case may be, or which compels ASA or, as a
result of the transactions contemplated by the Merger
Agreement, Delta or any of their respective subsidiaries or
affiliates to dispose of, cease operating or hold separate
any business, properties or assets which are material to the
business or operations, as such business or operations are
currently conducted, of ASA and its subsidiaries or of Delta
and its subsidiaries (including, in either case, without
limitation, any gates at Hartsfield Atlanta International
Airport), as the case may be,
(3) imposes limitations on the ability of Delta or any of its
subsidiaries or affiliates effectively to exercise full
rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or owned
by Delta or any of its subsidiaries or affiliates on all
matters properly presented to ASA's shareholders,
(4) requires divestiture by Delta or any of its subsidiaries or
affiliates of any Shares,
(5) that otherwise, in the judgment of Delta, is likely to have
a Material Adverse Effect; or
42
<PAGE>
(C) there shall be any statute, rule, regulation, injunction, order
or decree enacted, enforced, promulgated, issued or deemed
applicable to the Offer or the Merger, by any court, government
or governmental authority or agency, domestic or foreign, other
than the application of the waiting period provisions of the HSR
Act to the Offer or the Merger that, in the judgment of Delta, is
reasonably likely, directly or indirectly, to result in any of
the consequences referred to in clauses (i) through (v) of
paragraph (a) above; or
(D) there has been any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be
expected to have a Material Adverse Effect; or
(E) ASA shall have breached or failed to perform or comply with in
any material respect any of its covenants or agreements under the
Merger Agreement, or any of the representations or warranties of
ASA set forth in the Merger Agreement shall not be true in any
material respect when made or at any time prior to consummation
of the Offer as if made at and as of such time (except as to any
representation or warranty which speaks as of a specific date,
which must be untrue in any material respect as of such date); or
(F) ASA shall have entered into, or shall have publicly announced its
intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal; or
(G) ASA's Board shall or shall resolve to (x) not recommend, or
withdraw its approval or recommendation of, the Offer, the
Merger, the Merger Agreement or any of the transactions
contemplated thereby, (y) modify such approval or recommendation
in a manner adverse to Delta or Delta Sub, or (z) approve,
recommend or fail to take a position that is adverse to any
proposed Acquisition Proposal; or
(H) a tender or exchange offer for more than 20% of the Shares shall
have been made by a Third Party, or it shall have been publicly
disclosed or Delta shall have otherwise learned that:
(1) any person or "group" (as defined in Section 13(d)(3) of the
Exchange Act) shall have acquired or made a bona fide
proposal to acquire beneficial ownership of more than 20% of
any class or series of capital stock of ASA (including the
Shares), through the acquisition of stock, the formation of
a group or otherwise, or shall have been granted any option,
right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 20% of any class or series
of capital stock of ASA (including the Shares) other than
acquisitions for bona fide arbitrage purposes only and other
than as disclosed in a Schedule 13D or 13G on file with the
Commission on the date of the Merger Agreement,
(2) any such person or group which, prior to February 15, 1999,
had filed such a Schedule with the Commission shall have
acquired or proposed to acquire beneficial ownership of
additional shares of any class or series of capital stock of
ASA (including the Shares), through the acquisition of
stock, the formation of a group or otherwise, constituting
10% or more of any such class or series, or shall have been
granted any option, right or warrant, conditional or
otherwise, to acquire beneficial ownership of additional
shares of any class or series of capital stock of ASA
(including the Shares) constituting 10% or more of any such
class or series, or
43
<PAGE>
(3) any person or group shall have entered into a definitive
agreement or an agreement in principle with respect to a
merger, consolidation or other business combination with
ASA, or
(I) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the reasonable judgment of Delta in any such case, and regardless
of the circumstances giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions may, subject to the terms of the Merger Agreement,
be waived by Delta and Delta Sub in whole or in part at any time and from time
to time in their discretion. The failure by Delta or Delta Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time prior to the Effective Time.
Certain Legal Matters; Regulatory Approvals
General
Except as described in this Section, based on its review of publicly
available filings of ASA with the Commission and other publicly available
information regarding ASA, neither Delta nor Delta Sub is aware of any license
or regulatory permit that appears to be material to the business of ASA and its
subsidiaries, taken as a whole, that might be adversely affected by Delta Sub's
acquisitions of Shares (and/or the indirect acquisition of the stock of ASA's
subsidiaries) as contemplated herein or of any approval or other action by or
with any domestic, foreign, or international government authority or
administrative or regulatory agency that would be required for the acquisition
of ownership of the Shares (and/or the indirect acquisition of the stock of
ASA's subsidiaries) by Delta Sub. Should any such approval or other action be
required, Delta and Delta Sub currently contemplate that such approval or other
action will be sought. While, except as otherwise expressly described in this
Section, Delta Sub does not presently intend to delay the acceptance for payment
of or payment for Shares tendered pursuant to the Offer pending the outcome of
any such matter, there can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
failure to obtain any such approval or other action might not result in
consequences adverse to ASA's business or that certain parts of ASA's business
might not have to be divested if such approvals were not obtained or such other
actions were not taken, any of which could cause Delta Sub to decline to accept
for payment or pay for any Shares tendered. Delta Sub's obligations to accept
for payment or pay for the Shares tendered pursuant to the Offer is subject to
the conditions set forth in this Offer to Purchase, including the conditions
referred to above in this paragraph and certain conditions with respect to
litigation and governmental action. See "The Tender Offer--Certain Conditions of
the Offer."
Antitrust Compliance
Under the HSR Act, certain transactions (including certain transactions
involving the proposed acquisition of in excess of 15%, 25% and 50% of the
equity interest of a target corporation) may not be consummated unless certain
information has been furnished to the Antitrust Division of the Department of
Justice (the "Antitrust Division") and the Federal Trade Commission (the "FTC")
and certain waiting period requirements have been satisfied. Since consummation
of the Offer would result in the ownership by Delta and its subsidiaries of more
than 50% of the equity of ASA, the acquisition of Shares by Delta Sub pursuant
to the Offer is subject to such requirements.
Delta and ASA filed the required Notification and Report Forms (the
"Forms") with respect to the Offer and the Merger with the Antitrust Division
and the FTC on February 17, 1999, and February 18, 1999, respectively. The
statutory waiting period applicable to the purchase of Shares pursuant to the
Offer will expire on March 4, 1999. However, prior to such date, the Antitrust
Division or the FTC may extend the waiting period by requesting additional
44
<PAGE>
information or documentary material relevant to the acquisition. If such a
request is made, the waiting period will be extended until 11:59 P.M., New York
City time, on the tenth day after Delta certifies to the Antitrust Division or
the FTC, as the case may be, that it has substantially complied with such
request. Thereafter, the waiting period can be extended only by court order.
A request has been made for early termination of the waiting period
applicable to the Offer. There can be no assurance, however, that the 15-day HSR
Act waiting period will be terminated early or will not be extended.
The Merger would not require an additional filing under the HSR Act if
Delta Sub owns 50% or more of the shares outstanding at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Delta Sub pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Delta Sub, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Delta Sub or the divestiture of substantial assets of Delta, ASA or their
respective subsidiaries. Private parties and state attorneys general may also
bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Delta
relating to the businesses in which Delta, ASA and their respective subsidiaries
are engaged, Delta and Delta Sub believe that neither the Offer nor the Merger
will violate the antitrust laws. Nevertheless, there can be no assurance what
the result will be if a challenge is made. See "The Tender Offer-- Certain
Conditions of the Offer."
State Takeover Laws
A number of states have adopted laws and regulations applicable to attempts
to acquire securities of corporations that are incorporated, or have substantial
assets, shareholders, principal executive offices or principal places of
business, or whose business operations otherwise have substantial economic
effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which as a matter of state securities law made takeovers of
corporations meeting certain requirements more difficult. In 1987, however, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana could, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining shareholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of shareholders in the state and were incorporated
there. Subsequently, a number of federal courts ruled that various state
takeover statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
ASA has not opted into either the fair price provisions (Part II, Article
11) or the business combination provisions (Part III, Article 11) of the GBCC.
Accordingly, no Georgia anti-takeover provisions apply to the transactions
contemplated by the Merger Agreement, and there is no state takeover statute or
regulation with which Delta or Delta Sub must comply.
Fees and Expenses
Except as set forth below, Delta and Delta Sub will not pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer.
Delta has retained the services of Goldman, Sachs & Co. to act as its
financial advisor and as Dealer Manager in connection with the Offer and the
Merger. Pursuant to the terms of Goldman, Sachs & Co.'s engagement, Delta has
agreed to pay Goldman, Sachs & Co. for its services as financial advisor and
Dealer Manager an aggregate fee of $4,750,000. Delta has also agreed to
reimburse Goldman, Sachs & Co. for its reasonable travel and other out-of-pocket
45
<PAGE>
expenses, including those incurred in connection with Goldman, Sachs & Co.'s
activities as Dealer Manager and the fees and expenses of its legal counsel, and
to indemnify Goldman, Sachs & Co. and certain related parties against certain
liabilities, including liabilities under the federal securities laws, arising
out of Goldman, Sachs & Co.'s engagement.
Delta and Delta Sub have retained Morrow & Co., Inc. to be the Information
Agent and Harris Trust Company of New York to be the Depositary in connection
with the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telecopy, telegraph and personal interview and may request banks,
brokers, dealers and other nominees shareholders to forward materials relating
to the Offer to beneficial owners of Shares.
As compensation for acting as Information Agent in connection with the
Offer, Morrow & Co., Inc. will be paid a fee of $5,000 and will also be
reimbursed for certain out-of-pocket expenses and may be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. Delta Sub will pay the Depositary
reasonable and customary compensation for its services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including certain liabilities under federal securities laws. Brokers, dealers,
commercial banks and trust companies will be reimbursed by Delta Sub for
customary handling and mailing expenses incurred by them in forwarding material
to their customers.
The following is an estimate of fees and expenses to be incurred by Delta
in connection with the Offer:
Financial Advisor/Dealer Manager ........................... $4,750,000
Legal ...................................................... 500,000
Printing ................................................... 20,000
Advertising ................................................ 80,000
Filing ..................................................... 144,193
Depositary ................................................. 15,000
Information Agent (including mailing) ...................... 5,000
Financing .................................................. 1,000,000
Miscellaneous .............................................. 10,000
----------
Total ................................................ $6,519,193
==========
Miscellaneous
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. However, Delta Sub may, in its discretion, take such action as it
may deem necessary to make the Offer in any such jurisdiction and extend the
Offer to holders of Shares in such jurisdiction. In any jurisdiction the
securities, blue sky or other laws of which require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of Delta Sub by the
Dealer Manager or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF DELTA, DELTA HOLDINGS OR DELTA SUB NOT CONTAINED
HEREIN OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Delta, Delta Holdings and Delta Sub have jointly filed with the Commission
a Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") and a
Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3"), pursuant to
Rules 14d-1 and 13e-3, respectively, under the Exchange Act, together with
exhibits furnishing certain additional information with respect to the Offer,
and may file amendments thereto. In addition, ASA has filed with the
46
<PAGE>
Commission a Schedule 14D-9, together with exhibits, pursuant to Rule 14d-9
under the Exchange Act, setting forth the recommendations of the ASA Board with
respect to the Offer and the reasons for such recommendations and furnishing
certain additional related information. A copy of such documents, and any
amendments thereto, may be examined at, and copies may be obtained from the
Commission (but not the regional offices of the Commission) in the manner set
forth under "--Certain Information Concerning Delta, Delta Holdings and Delta
Sub" above.
DELTA SUB, INC.
February 22, 1999
47
<PAGE>
---------------------
SCHEDULES
---------------------
<PAGE>
SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS OF
ASA
The following table sets forth (i) the name, current business or residence
address and present principal occupation or employment, (ii) material
occupations, positions, offices or employments and business addresses thereof
for the past five years and (iii) information as to beneficial ownership of
Shares of each director and executive officer of ASA. Each of ASA's directors
and officers is a citizen of the United States. Except as otherwise indicated,
the business address of each director and executive officer of ASA is 100
Hartsfield Centre Parkway, Suite 800, Atlanta, Georgia 30354. Except as
otherwise indicated, each occupation set forth opposite a person's name refers
to employment with ASA. Other than Mr. Pickett, who beneficially owns
approximately 2.8% of the outstanding Shares and Mr. Beiser, who beneficially
owns approximately 1.6% of the outstanding Shares, no director or executive
officer of ASA beneficially owns more than 1% of the outstanding Shares.
Directors of ASA are indicated with an asterisk.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment; Material Beneficial
Name, Citizenship Positions Held During the Past Five Years and Business Ownership of
and Current Business Address Addresses Thereof Shares
- -------------------------------- --------------------------------------------------------- ----------------
<S> <C> <C>
*George F. Pickett.............. Mr. Pickett is ASA's and Atlantic Southeast's Chairman of 810,287 (2)(3)
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
Atlantic Southeast since February 1994 and of ASA since
its inception in September 1996. Since Atlantic
Southeast's inception in 1970 and until February 1994, he
served as Atlantic Southeast's President and Chief
Executive Officer. Mr. Pickett has been a member of the
Board of Directors of ASA, Atlantic Southeast and ASA
Investments since their respective inceptions.
*John W. Beiser................ Mr. Beiser is ASA's and Atlantic Southeast's President and 467,847 (3)(4)
a member of the board of Directors of both companies. He
has served as President of Atlantic Southeast since
February 1994 and of ASA since its inception in September
1996. He has served as Secretary of both companies since
their respective inception. In addition, Mr. Beiser was
Atlantic Southeast's Vice President from its inception
until 1985 when he was designated as Atlantic Southeast's
Senior Vice President-Sales and Services. Mr. Beiser has
served as the President of ASA Investments since its
inception. Mr. Beiser has been a member of the board of
Directors of Atlantic Southeast since 1982 and of ASA
since its inception.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment; Material Beneficial
Name, Citizenship Positions Held During the Past Five Years and Business Ownership of
and Current Business Address Addresses Thereof Shares
- ---------------------------- -------------------------------------------------------- ------------
<S> <C> <C>
*George Berry.................. Mr. Berry has served for the past eight years as Senior 6,000 (8)
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
administration 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.
Ronald V. Sapp................. Ronald V. Sapp is ASA's and ASA's Senior Vice 70,439 (3)
President-Finance and Chief Financial Officer. Mr. Sapp
was named Senior Vice President-Finance and Chief
Financial Officer in May 1997. Mr. Sapp served as Vice
President-Finance and Chief financial Officer for ASA from
1985 until May 1997 and for ASA from the time of the
Reorganization until May 1997. He served as ASA's
Treasurer from 1985 until February 1997 and as ASA's
Treasurer between September 1996 and February 1997. From
1983 to 1985, Mr. Sapp served as Vice President-Finance
and Treasurer of Air Atlanta, Inc., a scheduled passenger
airline. From 1979 to 1983, Mr. Sapp served as Vice
President and Controller of Air California, Inc., a
scheduled passenger airline.
R. Mark Bole................... R. Mark Bole was named ASA's and ASA's Assistant Vice 9,800 (3)
President-Treasurer in February 1997. He was ASA's
Assistant Vice President-Assistant Treasurer from February
1996 until February 1997 and held the same positions with
ASA from the effective date of the Reorganization until
February 1997. Mr. Bole served as a Vice President of
Wachovia Bank of Georgia, N.A. from May 1991 until
February 1996.
*Jean A. Mori.................. Mr. Mori has been a member of ASA's Board of Directors 6,124 (5)(8)
since September 30, 1996, and was a member of ASA's Board
of Directors from 1994 until December 31, 1996. Mr. Mori
is a Chairman of the Board and President of Mori Luggage &
Gifts, Inc., a retail chain of 29 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.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment; Material Beneficial
Name, Citizenship Positions Held During the Past Five Years and Business Ownership of
and Current Business Address Addresses Thereof Shares
- ---------------------------- ------------------------------------------------------ ------------
<S> <C> <C>
*Parker H. Petit............ Mr. Petit has been a member of ASA's Board of Directors 10,000 (8)
since September 30, 1996, and was a member of Atlantic
Southeast'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., Norrell
Corporation, Inc. and Logility, Inc.
Renee H. Skinner............ Ms. Skinner is ASA's and Atlantic Southeast's Assistant
Vice President-Controller. She has held these positions
with Atlantic Southeast since 1994 and with ASA since the
Reorganization was effective. Ms. Skinner served as
Atlantic Southeast's Manager of Accounting from 1986
through 1994.
*Alan M. Voorhees........... Mr. Voorhees has been a member of ASA's Board of Directors 248,027 (6)(8)
since September 30, 1996, and was a member of Atlantic
Southeast's Board of Directors from 1979 until December
31, 1996. Mr. Voorhees was Chairman of the Board of
Atlantic Southeast 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.
*Ralph W. Voorhees.......... Mr. Voorhees has been a member of ASA's Board of Directors 47,000 (7)(8)
since September 30, 1996, and was a member
of Atlantic Southeast's Board of Directors
from 1979 until December 31, 1996. Mr.
Voorhees has been Senior Vice
President-Investments with Paine Webber
Incorporated, an investment banking firm,
since 1973.
Edward J. Paquette.......... Mr. Paquette was named ASA's Senior Vice 43,550 (3)
President-Operations in April 1997. From May 1996 until
April 1997, he served as Vice President-Operations of
In-Flight Phone Corporation. From November 1994 to May
1996, he served as Vice President-Ground Operations at
Ogden Aviation Services. Mr. Paquette served in various
capacities at Trans World Airlines from 1969 through 1994,
including Senior Vice President-Maintenance and
Engineering and Senior Vice President-Operations.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment; Material Beneficial
Name, Citizenship Positions Held During the Past Five Years and Business Ownership of
and Current Business Address Addresses Thereof Shares
- ---------------------------- ------------------------------------------------------ ------------
<S> <C> <C>
Charles J. Thibaudeau....... Mr. Thibaudeau has served as Vice President-Human --
Resources since November 1998. Mr. Thibaudeau has
approximately twenty years of experience in the human
resources and employee relations area from his tenure at
Trans World Airlines.
James J. Cerniglia.......... Mr. Cerniglia has served as ASA's Assistant Vice --
President-Flight Systems Controls since March 1998. Mr.
Cerniglia has held positions with or served as a
consultant to a number of airlines since 1986. He served
as the Director-Flight Control of Trump Shuttle, Inc.
("Trump") from February 1989 until September 1991 and as
Senior Director-Sales and Marketing of Trump from
September 1991 until March 1992. Mr. Cerniglia served as
Vice President-Operations of Jet Express/USAir from March
1992 until July 1993, as an independent airline consultant
from July 1993 until May 1996, as Director-Operations
Control of Pan American World Airways, Inc. from may 1996
until September 1997, and as an independent airline
consultant from that time until he joined ASA.
Mark W. Fischer............. Mr. Fischer has served as the Vice President-Customer --
Service of ASA since November 1997. From 1992 until
joining ASA, Mr. Fischer served as the Vice
President-Customer Service for Piedmont Airlines, Inc.,
and from 1987 until 1992, he served as Vice
President-Customer Service for Midway Airlines, Inc. Mr.
Fischer previously held a number of positions with Fischer
Bros. Aviation, Inc. from 1987 until 1992.
John P. McBryan............. Mr. McBryan, who has served as Vice President-Technical
Services of ASA since December 1997, has 27 years of
experience in the aviation industry. He was Vice
President-Maintenance for Air Wisconsin, Inc. from 1988
until 1992, and served as Director of Maintenance for
Allegheny Airlines, Inc. from 1992 until 1993. Mr.
McBryan served as Vice President-Operations of Dyn-Air
Tech, an aircraft repair station, from 1993 until 1994 ,
and as Manager of Industrial Engineering of the Dee Howard
Company, another repair station, from 1994 through 1996.
Prior to joining ASA, he was the Director-Programs and
Planning for Miami Air International.
John A. Bedson.............. Mr. Bedson has been ASA's Assistant Vice President-Flight --
Operations since November 1998. From 1994 until 1998, Mr.
Bedson was Vice President-Operations Support for British
Aerospace, North America, Inc. Prior to this, he was
Director-Flight Operations for Trans World Express from
1990 to 1994, and held the positions of Director-Flight
Operations, Chief Pilot and Chief Instructor at PanAm
Express from 1985 to 1990.
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment; Material Beneficial
Name, Citizenship Positions Held During the Past Five Years and Business Ownership of
and Current Business Address Addresses Thereof Shares
- ---------------------------- ------------------------------------------------------ ------------
<S> <C> <C>
Samuel J. Watts............. Mr. Watts, who has served as Vice President-Sales and --
Corporate Communications of ASA since July 1997, has been
employed by Atlantic Southeast in customer service
positions since 1983. From 1985 to 1994, he was Atlantic
Southeast's Vice President-Customer Services. In 1994, he
was elected as Atlantic Southeast's Vice President-Sales
and Customer Services. Mr. Watts was employed by
Southeastern Airlines, a regional airline, from 1972 to
1983 as its Vice President-Marketing. From 1982 to 1982,
Mr. Watts worked for Eastern Airlines, Inc., a major
airline, in various line and staff positions.
W. Grant Nichols............ Mr. Nichols has served as ASA's Assistant Vice --
President-Market Development since 1997. Mr. Nichols
previously served as the Manger of Revenue Control from
1989 until 1997. Prior to 1989, Mr. Nichols held various
positions with ASA from 1985 to 1989.
</TABLE>
- --------------
* Represents Directors of ASA.
(1) Information with respect to beneficial ownership is based upon information
furnished by each owner. Percent of Class is based on 28,523,177 Shares
outstanding as of February 19, 1999 (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 that the individual has the right to acquire, on or before
May 29, 1999 (60 days from March 30, 1999), 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 --310,350
Shares; John W. Beiser -- 175,700 Shares; Ronald V. Sapp -- 60,500 Shares;
Edward J. Paquette -- 18,550 Shares; and R. Mark Bole -- 8,600 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.
(6) Includes 243,027 Shares held by irrevocable trusts created for the benefit
of the adult children of Alan M. Voorhees as to which Shares Mr. Voorhees
disclaims any beneficial ownership interest.
(7) Includes 20,000 Shares held by the wife of Ralph W. Voorhees, as to which
Shares Mr. Voorhees disclaims any beneficial ownership interest.
(8) Includes 5,000 Shares that the individual has the right to acquire, on or
before May 29, 1999 (60 days from March 30, 1999), through the exercise of
stock options granted under the Nonqualified Stock Option plan for
Non-Employee Directors.
(9) Includes an aggregate of 573,750 Shares which the directors and executive
officers as a group have the right to acquire as of May 29, 1999 through
the exercise of options.
I-5
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF
Delta, Delta Holdings and Delta Sub
The following table sets forth (i) the name, current business or residence
address and present principal occupation or employment and (ii) material
occupations, positions, offices or employments and business addresses thereof
for the past five years, in each case of each director and executive officer of
Delta, Delta Sub and Delta Holdings, and persons who may be designated by Delta
to serve as directors on ASA's Board following the Offer and Merger. Each of
Delta's, Delta Sub's and Delta Holdings' directors and officers, and each of the
proposed directors and officers of ASA after consummation of the Offer and the
Merger, is a citizen of the United States.
Except as otherwise indicated, the business address of each director and
executive officer of Delta, Delta Sub and Delta Holdings is Delta Air Lines,
Inc., 1030 Delta Boulevard, Hartsfield Atlanta International Airport, Atlanta,
GA 30320. Except as otherwise indicated, each occupation set forth opposite a
person's name refers to employment with Delta, Delta Sub or Delta Holdings,
respectively. No director or executive officer of Delta, Delta Sub or Delta
Holdings beneficially owns any material amount of outstanding Shares. Directors
of each of Delta, Delta Sub and Delta Holdings are indicated with an asterisk.
A. Directors and Executive Officers of Delta.
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment; Material Positions Held
and Current Business Address During the Past Five Years and Business Addresses Thereof
- ------------------------------------------- ------------------------------------------------------------------------
<S> <C>
*Edwin L. Artzt............................ Director since 1991. Mr. Artzt has been Chairman of the Board of
Spalding since November 1998. He was Chairman of the Board and Chief
Executive Officer of The Procter & Gamble Company from January 1990
until his retirement in July 1995, when he became Chairman of the
Executive Committee of the Board of Directors of The Procter & Gamble
Company. Mr. Artzt is also a director of American Express Company,
Barilla S.p.A. (Italy) and GTE Corporation, and a member of The
Business Council.
*Henry A. Biedenharn, III.................. Director since 1986. President, Chief Executive Officer and a
director of Ouachita Coca-Cola Bottling Company, Inc., and four other
Coca-Cola bottling companies located in Arkansas, Louisiana and
Mississippi, from 1981 until his retirement in February 1996. He also
served as Chairman of the Board of Ouachita Coca Cola Bottling
Company, Inc. from 1991 to February 1996. Mr. Biedenharn is a
director of Hudson, Inc. and Biedco Corporation.
*James L. Broadhead........................ Director since 1991. Chairman of the Board and Chief Executive
Officer of FPL Group, Inc., and its principal subsidiary, Florida
Power & Light Company, since May 1990. Mr. Broadhead is also a
director of New York Life Insurance Company and The Pittston Company,
a trustee of Cornell University and a member of The Business Council
and The Business Roundtable.
*Edward H. Budd. .......................... Director since 1985. Chairman of the Board and Chief Executive
Officer of The Travelers Corporation from 1982 until his retirement in
1993, and was an executive officer of that company from 1974 through
1993. Mr. Budd is also a director of GTE Corporation, a member of the
American Academy of Actuaries and The Business Council, and a Trustee
of Tufts University.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment; Material Positions Held
and Current Business Address During the Past Five Years and Business Addresses Thereof
- ------------------------------------------- ------------------------------------------------------------------------
<S> <C>
*R. Eugene Cartledge....................... Director since 1990. Mr. Cartledge has been Chairman of the Board of
Genevac Portable Products LLC since June 1998. Chairman of the Board
of Savannah Foods & Industries, Inc. from April 1996 until December
1997. Mr. Cartledge was Chairman of the Board and Chief Executive
Officer of Union Camp Corporation from January 1986 until his
retirement in June 1994. He is also a director of Blount, Inc., Chase
Brass Industries, Inc., Sunoco, Inc., UCAR International Inc. and
Union Camp Corporation.
*Mary Johnston Evans....................... Director since 1982 and non-executive Acting Chairman of Board of
Directors from August 1, 1997 to August 14, 1997. She is also
Director of Baxter International Inc., Dun & Bradstreet Corp.,
Household International, Inc., Scudder New Europe Fund and Sunoco
Inc. Mrs. Evans is also a senior member of the Conference Board and a
member of the Advisory Board of Morgan Stanley, Inc.
*Gerald Grinstein.......................... Director since 1987. Non-Executive Chairman of Board of Directors
since August 14, 1997. Mr. Grinstein has been a principal of Madrona
Investment Group LLC since October 1996. Mr. Grinstein was Chairman
of Burlington Northern Santa Fe Corporation (successor to Burlington
Northern Inc.) from September 1995 until his retirement in December
1995. He was Chairman and Chief Executive Officer of Burlington
Northern Inc. and Burlington Northern Railroad Company from July 1991
until consummation of the merger of Burlington Northern Inc. and Santa
Fe Corporation in September 1995. He is also a director of Browning
Ferris Industries, Inc., Imperial Sugar Company, PACCAR Inc., The
Pittston Company, Sundstrand Corporation and Vans, Inc., Grove
Worldwide LLC, Space Needle Corporation, the Seattle Symphony and the
Henry M. Jackson Foundation.
*Leo F. Mullin............................. Mr. Mullin has been director, President and Chief Executive Officer
since August 14, 1997. He was Vice Chairman of Unicom Corporation and
its principal subsidiary, Commonwealth Edison Company, from 1995
through August 13, 1997. Mr. Mullin was an executive of First Chicago
Corporation from 1981 to 1995, serving as that company's President and
Chief Operating Officer from 1993 to 1995, and as Chairman and Chief
Executive Officer of American National Bank, a subsidiary of First
Chicago Corporation, from 1991 to 1993. He is also a director of
BellSouth Corporation and Inland Steel Industries, Inc. and a member
of the Board of the Air Transport Association of America, the Atlanta
Chamber of Commerce and the Robert W. Woodruff Arts Center, and a
trustee of Northwestern University.
*Andrew J. Young........................... Director since 1994. Mr. Young has been Chairman and a Senior Partner
of Goodworks International, Inc. since January 1997. He was Vice
Chairman of Law Companies Group, Inc. from 1993 through January 1997,
and a director of that company from August 1995 through January 1997.
Chairman of Law Companies Group, Inc. (a former Subsidiary of Law
Companies Group, Inc.) from 1990 to 1993. Mr. Young is a director of
Archer Daniels Midland Company, Cox Communications, Inc., Film
Fabricators, Inc., Host Marriott Corporation, The Argus Board (The
International Advisory Board of Independent Newspapers Holdings
Limited) and Thomas Nelson, Inc. He is Chairman of the Southern
Africa Enterprise Development Fund and a director of the Martin Luther
King, Jr. Center.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment; Material Positions Held
and Current Business Address During the Past Five Years and Business Addresses Thereof
- ------------------------------------------- ------------------------------------------------------------------------
<S> <C>
Maurice W. Worth........................... Chief Operating Officer since August 15, 1997. Mr. Worth served as
Acting Chief Executive Officer from August 1, 1997 through August 15,
1997. Executive Vice President-Customer Service and Acting Chief
Operating Officer, May, 1997 through August, 1997. Executive Vice
President-Customer Service, September, 1995 through May, 1997. Senior
Vice President-Personnel, May 1991 through September, 1995.
Malcolm B. Armstrong....................... Executive Vice President-Operations since October 1, 1998. Mr.
Armstrong was Vice President-Corporate Safety & Compliance of Delta
from June 1997 until October 1998. He was Vice President-Corporate
Safety and Regulatory Compliance of US Airways, Inc. from July 1995
until June 1997. Prior to joining US Airways, Inc., he was a
commander, 21st Air Force and Lt. General in the U.S. Air Force from
1992 until he retired in 1995.
Robert L. Colman........................... Executive Vice President-Human Resources since October 2, 1998. Prior
to joining Delta, Mr. Colman was Vice President-Human Resources, GE
Aircraft Engines Division from October 1993 until October 1998.
Vicki B. Escarra........................... Executive Vice President-Customer Service since July 1, 1998. Senior
Vice President-Airport Customer Service of Delta, November 1996
through July 1998. Vice President-Airport Customer Service, August
1996 through November 1996. Vice President-Reservation Sales and
Distribution Planning, May 1996 through August 1996. Vice
President-Reservation Sales, November 1994 to May 1996.
Director-Reservations Sales, October 1994 to November 1994.
Director-In-Flight Service Operations, May 1992 to October 1994.
Warren C. Jenson........................... Executive Vice President and Chief Financial Officer since April 20,
1998. He was Senior Vice President and Chief Financial Officer of
the National Broadcasting Company, a General Electric subsidiary,
from 1992 to April 1998.
Frederick W. Reid.......................... Executive Vice President and Chief Marketing Officer since July 1,
1998. Mr. Reid was an executive of Lufthansa German Airlines from
April, 1991 to June, 1998, serving as that company's President and
Chief Operating Officer from April 1997 to June 1998; Executive Vice
President and Chief Operating Officer from 1995 to March 1997, and as
Senior Vice President, The Americas, from 1991 to 1996.
</TABLE>
- ----------------
* Represents Directors of Delta.
II-3
<PAGE>
B. Directors and Executive Officers of Delta Sub.
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment; Material Positions Held
and Current Business Address During the Past Five Years and Business Addresses Thereof
- ------------------------------------------- ------------------------------------------------------------------------
<S> <C>
* Maurice W. Worth......................... President and Chief Executive Officer. See above for his positions
with Delta and previous five year employment history.
* Edward H. West........................... Vice President and Treasurer. He has served as Vice
President-Financial Planning & Analysis of Delta since June 1997. He
also was Acting Chief Financial Officer of Delta from November 1997 to
April 1998; Controller from November 1996 until June 1997;
Director-Corporate Finance from December 1995 until November 1996;
General Manager-Corporate Finance from January 1995 until December
1995; Administrative Assistant - Finance from June 1994 until January
1995. He served as Assistant Vice President and Senior Relationship
Manager with Wachovia Bank from November 1992 until June 1994.
Dean C. Arvidson........................... Secretary. He has been Senior Attorney and Assistant Secretary with
Delta since January 1996; Attorney and Assistant Secretary from
November 1994 until January 1996; and Attorney from November 1992
until November 1994.
</TABLE>
- ------------------
* Represents Directors of Delta Sub.
II-4
<PAGE>
C. Directors and Executive Officers of Delta Holdings.
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment; Material Positions Held
and Current Business Address During the Past Five Years and Business Addresses Thereof
- ------------------------------------------- ------------------------------------------------------------------------
<S> <C>
* Edward D. Jones.......................... President. Mr. Jones has been Vice Chairman of Delaware Corporate
Delaware Corporate Management, Inc. Management, Inc. since 1997. Prior thereto, Mr. Jones was President
1105 North Market Street of Delaware Corporate Management, Inc. from 1990 to May 1997.
Suite 1300
Wilmington, DE 19899
* Leslie P. Klemperer...................... Vice President and Secretary. He has been Associate General Counsel
and Assistant Secretary of Delta since November 1998. Mr. Klemperer
was Assistant General Counsel and Assistant Secretary of Delta from
February 1992 until September 1998; and Senior Attorney and Assistant
Secretary from November 1985 until February 1992.
* David P. Fontello........................ Vice President and Assistant Secretary. Mr. Fontello has been Vice
Wilmington Trust Company President-Corporate Financial Services Department, Wilmington Trust
Rodney Square North Company since 1990.
1100 North Market Street
Wilmington, DE 19890
* Maria D'Alessandro....................... Treasurer. Ms. D'Alessandro has been General Manager-Treasury of
Delta since May 1998. Prior thereto, Ms. D'Alessandro was General
Manager-Cash Management of Delta from February 1997 until May 1998;
Manager-Financial Analysis from May 1995 until February 1997; Project
Leader from June 1994 until May 1995; and Financial Analyst from
August 1993 until June 1994.
* Thomas M. Strauss........................ Assistant Treasurer. Mr. Strauss has been Financial Services Manager
Wilmington Trust Company of Delaware Corporate Management since 1997. Prior thereto, Mr.
Rodney Square North Strauss was Accounting Supervisor with Wilmington Trust Company from
1105 North Market Street 1996 to 1997; Senior Accountant from 1994 to 1996; and Staff
Suite 1300 Accountant from 1992 to 1994.
Wilmington, DE 19899
</TABLE>
- -----------------
* Represents Directors of Delta Holdings.
II-5
<PAGE>
D. Persons Who May Be Designated by Delta to Serve as Directors on ASA's Board
After the Offer and Merger.
<TABLE>
<CAPTION>
Name, Citizenship Present Principal Occupation or Employment; Material Positions Held
and Current Business Address During the Past Five Years and Business Addresses Thereof
- ------------------------------------------- ------------------------------------------------------------------------
<S> <C>
Maurice W. Worth........................... See above for his positions with Delta and previous five year employment
history.
Malcolm B. Armstrong....................... See above for his positions with Delta and previous five year employment
history.
Vicki B. Escarra......................... See above for his positions with Delta and previous five year employment
history.
Warren C. Jenson.......................... See above for his positions with Delta and previous five year employment
history.
Frederick W. Reid.......................... See above for his positions with Delta and previous five year employment
history.
</TABLE>
II-6
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be accepted.
The Letter of Transmittal, Share Certificates and any other required documents
should be sent or delivered by each shareholder of ASA or such shareholder's
broker, dealer, commercial bank, trust company or other nominee to the
Depositary at its addresses set forth below.
The Depositary for the Offer is:
Harris Trust Company of New York
<TABLE>
<CAPTION>
By Mail: By Facsimile Transmission By Hand or Overnight Courier:
(For Eligible Institutions only):
<S> <C> <C>
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
</TABLE>
Confirm by Telephone:
(212) 701-7624
Questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth below. Shareholders may also contact their broker, dealer, commercial bank
or trust company for assistance concerning the Offer. Additional copies of this
Offer to Purchase, the Letter of Transmittal and other related materials may
also be obtained from the Information Agent or the Dealer Manager and will be
furnished promptly at Delta's expense.
The Information Agent for the Offer is:
Morrow & Co., Inc.
445 Park Avenue
5th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokers Please Call:
(800) 662-5200
The Dealer Manager for the Offer is:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll Free)
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
ASA Holdings, Inc.
Pursuant to the Offer to Purchase
dated February 22, 1999
of
Delta Sub, Inc.
a wholly-owned, indirect subsidiary of
Delta Air Lines, Inc.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To: Harris Trust Company of New York, Depositary
By Mail: By Facsimile: By Hand/Overnight Delivery:
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
For Information Telephone:
(212) 701-7624
Delivery of this instrument to an address other than as set forth above or
transmission of instructions to a facsimile number other than as set forth above
will not constitute a valid delivery to the Depositary.
This Letter of Transmittal is to be used if certificates for Shares (as
defined below) are to be forwarded herewith or, unless an Agent's Message (as
defined in the Offer to Purchase) is utilized, if delivery of Shares is to be
made by book-entry transfer to the Depositary's account at The Depository Trust
Company (hereinafter referred to as the "Book-Entry Transfer Facility"),
pursuant to the procedures set forth in the section of the Offer to Purchase
entitled "Procedures for Accepting the Offer and Tendering Shares."
Shareholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery
procedure set forth in the section of the Offer to Purchase entitled "Procedures
for Accepting the Offer and Tendering Shares." See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please fill in, if blank) (Attach additional list if necessary)
- ---------------------------------------------------------------------------------------------------------------
Certificate Total Number of Number of
Number(s)* Shares Represented Shares
by Certificate(s)* Tendered**
<S> <C> <C> <C>
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- -------------
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution
-------------------------------------------
Account No. at The Depository Trust Company
-----------------------------
Transaction Code No.
----------------------------------------------------
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Shareholder(s)
-------------------------------------
Date of Execution of Notice of Guaranteed Delivery
----------------------
Name of Institution which Guaranteed Delivery
---------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
--------------------------------------
Account No. at The Depository Trust Company
-----------------------------
Transaction Code No.
----------------------------------------------------
-------------
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Delta Sub, Inc., a Georgia corporation
("Delta Sub") and a wholly-owned, indirect subsidiary of Delta Air Lines, Inc.,
a Delaware corporation, the above-described shares of common stock, $0.10 par
value per share (the "Shares"), of ASA Holdings, Inc., a Georgia corporation
("ASA"), pursuant to Delta Sub's offer to purchase all outstanding Shares at a
price of $34.00 per Share, net to the seller in cash, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated February 22, 1999,
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together constitute the "Offer"). Delta Sub reserves the right to
transfer or assign, in whole or from time to time in part, to one or more of its
affiliates the right to purchase Shares tendered pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer and effective
upon acceptance for payment of and payment for the Shares tendered herewith, the
undersigned hereby sells, assigns and transfers to or upon the order of Delta
Sub all right, title and interest in and to all the Shares that are being
tendered hereby (and any and all other non-cash dividends, distributions, rights
and other securities issued or issuable in respect thereof on or after February
15, 1999) and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and all such
other Shares or securities), with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Shares (and all such other Shares or
securities), or transfer ownership of such Shares (and all such other Shares or
securities) on the account books maintained by the Book-Entry Transfer Facility,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of Delta Sub, (b) present such Shares (and
all such other Shares or securities) for transfer on the books of ASA and (c)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and all such other Shares or securities), all in accordance with
the terms of the Offer.
The undersigned hereby irrevocably appoints Maurice W. Worth, John N.
Selvaggio, Edward H. West and Dean C. Arvidson, and each of them, and any other
assignees of Delta Sub, the attorneys and proxies of the undersigned, each with
full power of substitution, to exercise all voting and other rights of the
undersigned in such manner as each such attorney and proxy or his substitute
shall in his sole discretion deem proper, with respect to all of the Shares
tendered hereby which have been accepted for payment by Delta Sub prior to the
time of any vote or other action (and any and all other Shares or other
securities issued or issuable in respect thereof on or after February 15, 1999),
at any meeting of shareholders of ASA (whether annual or special and whether or
not an adjourned meeting), by written consent or otherwise. This proxy is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by Delta Sub in accordance with the terms
of the Offer. Such acceptance for payment shall revoke any other power of
attorney, proxy or written consent granted by the undersigned at any time with
respect to such Shares (and all such other Shares or other securities or
rights), and no subsequent proxies will be given or written consents will be
executed by the undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities or rights
issued or issuable in respect thereof on or after February 15, 1999), and that,
when the same are accepted for payment by Delta Sub, Delta Sub will acquire
good, marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Delta Sub to be necessary or desirable to complete
or confirm the sale, assignment and transfer of the Shares tendered hereby (and
all such other Shares or securities or rights).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
3
<PAGE>
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in the section of the Offer to Purchase entitled
"Procedures for Accepting the Offer and Tendering Shares" and in the
instructions hereto will constitute a binding agreement between the undersigned
and Delta Sub upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price of any Shares purchased, and
return any Shares not tendered or not purchased, in the name(s) of the
undersigned. Similarly, unless otherwise indicated herein under "Special
Delivery Instructions", please mail the check for the purchase price of any
Shares purchased and any certificates for Shares not tendered or not purchased
(and accompanying documents, as appropriate) to the undersigned at the address
shown below the undersigned's signature. In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Shares purchased and return any Shares
not tendered or not purchased in the name(s) of, and mail said check and any
certificates to, the person(s) so indicated. The undersigned recognizes that
Delta Sub has no obligation, pursuant to the "Special Payment Instructions", to
transfer any Shares from the name of the registered holder(s) thereof if Delta
Sub does not accept for payment any of the Shares so tendered.
4
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6, 7 and 8)
To be completed ONLY if the check for the price of Shares purchased (less
the amount of any federal income and backup withholding tax required to be
withheld) and/or certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue [_] check
[_] certificates to:
Name
................................................
(Please Print)
Address
..............................................
........................................................
(Zip Code)
........................................................
(Taxpayer Identification No. or Social Security No.)
(also complete substitute Form W-9 below)
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6, 7 and 8)
To be completed ONLY if the check for the purchase price of Shares
purchased (less the amount of any federal income and backup withholding tax
required to be withheld) or certificates for Shares not tendered or not
purchased are to be mailed to someone other than the undersigned or to the
undersigned at an address other than that shown below the undersigned's
signature(s).
Mail [_] check
[_] certificates to:
Name
-------------------------------------------------
(Please Print)
Address
-----------------------------------------------
- --------------------------------------------------------
(Zip Code)
- --------------------------------------------------------------------------------
5
<PAGE>
--------------------------------------------------------------
SIGN HERE (2)
(Please complete Substitute Form W-9 below)
........................................................
........................................................
Signature(s) of Owners
Dated , 199__
......................................
Name(s)
..............................................
........................................................
(Please Print)
Capacity (full title)
...................................
Address
..............................................
........................................................
(Include Zip Code)
Area Code and Telephone Number
.....................
(Must be signed by registered holder(s) exactly as
name(s) appear(s) on stock certificate(s) or on a
security position listing or by person(s)
authorized to become registered holder(s) by
certificates and documents transmitted herewith.
If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in
a fiduciary or representative capacity, please set
forth full title and see Instruction 5.)
Guarantee of Signatures(s)
(If required; see Instructions 1 and 5)
Name of Firm
............................................
Authorized
Signature
......................................
Dated , 1999
.........................................
--------------------------------------------------------------
6
<PAGE>
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part I Taxpayer Identification No.-- For All Accounts Part II For Payees Exempt
FORM W-9 From Backup
With-holding (see
enclosed Guidelines)
..........................................................................
Department of the Treasury Enter your taxpayer identification ---------------------------------
Internal Revenue Service number in the appropriate box. For
most individuals and sole ---------------------------------
proprietors, this is your Social Social Security Number
Security Number. For other entities,
Payer's Request for it is your Employer Identification OR
Taxpayer Identification Number. If you do not have a number,
No. see "How to Obtain a TIN" in the
enclosed Guidelines ---------------------------------
Note: If the account is in more than
one name, see the chart on page 2 of ---------------------------------
the enclosed Guidelines to determine Employee Identification Number
what number to enter.
----------------------------------------------------------------------------------------------------------------------------
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me)
and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer identification number within (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
(3) Any information provided on this form is true, correct and complete.
-------------------------------------------------------------------------------------------------------------------------------
SIGNATURE DATE ,1999
------------------------------------------ -------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO
THE OFFER. PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
</TABLE>
7
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an "Eligible Institution"). Signatures on this Letter of
Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered herewith and such holder(s) have not completed the instruction entitled
"Special Payment Instructions" on this Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. See Instruction
5.
2. Delivery of Letter of Transmittal and Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or, unless an
Agent's Message is utilized, if delivery of Shares is to be made by book-entry
transfer pursuant to the procedures set forth in the section of the Offer to
Purchase entitled "Procedures for Accepting the Offer and Tendering Shares."
Certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of all Shares delivered electronically, as well as a properly completed
and duly executed Letter of Transmittal (or facsimile thereof or, in the case of
a book-entry transfer, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal prior to the
Expiration Date (as defined in the Offer to Purchase).
Shareholders who cannot deliver their Shares and all other required
documents to the Depositary by the Expiration Date must tender their Shares
pursuant to the guaranteed delivery procedure set forth in the section of the
Offer to Purchase entitled "Procedures for Accepting the Offer and Tendering
Shares." Pursuant to such procedure: (a) such tender must be made by or through
an Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by Delta Sub must be
received by the Depositary prior to the Expiration Date and (c) the certificates
for all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof or, in the case of a book-entry
delivery, an Agent's Message) and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three Nasdaq National
Market System trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided in the section of the Offer to Purchase
entitled "Procedures for Accepting the Offer and Tendering Shares."
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED DELIVERED
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A
BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF CERTIFICATES FOR SHARES ARE
SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
a facsimile thereof), the tendering shareholder waives any right to receive any
notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate delivered
to the Depositary are to be tendered, fill in the number of Shares which
8
<PAGE>
are to be tendered in the box entitled "Number of Shares Tendered". In such
case, a new certificate for the remainder of the Shares represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever. If any of the Shares tendered hereby is held of record by two or
more persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s). Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution as defined in Instruction
1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
Delta Sub of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. Delta Sub will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), or if a transfer tax is imposed for
any reason other than the sale or transfer of Shares to Delta Sub pursuant to
the Offer, then the amount of any stock transfer taxes (whether imposed on the
registered holder(s), such other person or otherwise) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or not
purchased are to be returned, in the name of a person other than the person(s)
signing this Letter of Transmittal or if the check or any certificates for
Shares not tendered or not purchased are to be mailed to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal at an address other than that shown above, the appropriate
boxes on this Letter of Transmittal should be completed. Shareholders tendering
Shares by book-entry transfer may request that Shares not purchased be credited
to such account at the Book-Entry Transfer Facility as such shareholder may
designate under "Special Payment Instructions". If no such instructions are
given, any such Shares not purchased will be returned by crediting the account
at the Book-Entry Transfer Facility designated above.
8. Substitute Form W-9. Under the federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payments made to certain
shareholders pursuant to the Offer. In order to avoid such backup withholding,
each tendering shareholder, and, if applicable, each other payee, must provide
the Depositary with such
9
<PAGE>
shareholder's or payee's correct taxpayer identification number and certify that
such shareholder or payee is not subject to such backup withholding by
completing the Substitute Form W-9 set forth above. In general, if a shareholder
or payee is an individual, the taxpayer identification number is the Social
Security number of such individual. If the Depositary is not provided with the
correct taxpayer identification number, the shareholder or payee may be subject
to a $50 penalty imposed by the Internal Revenue Service. Certain shareholders
or payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. In order to satisfy the Depositary that a foreign individual
qualifies as an exempt recipient, such shareholder or payee must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. For further
information concerning backup withholding and instructions for completing the
Substitute Form W-9 (including how to obtain a taxpayer identification number if
you do not have one and how to complete the Substitute Form W-9 if Shares are
held in more than one name), consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained provided that the required information is furnished to
the Internal Revenue Service. NOTE: FAILURE TO COMPLETE AND RETURN THE
SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE
TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
9. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal and
other tender offer materials may be obtained from the Information Agent or the
Dealer Manager at their respective addresses or telephone numbers set forth
below.
10
<PAGE>
The Information Agent is:
Morrow & Co., Inc.
445 Park Avenue
5th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokers Please Call:
(800) 662-5200
The Dealer Manager is:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Toll Free)
<PAGE>
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
in respect of
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
ASA Holdings, Inc.
at
$34.00 Net Per Share
by
Delta Sub, Inc.
a wholly-owned, indirect subsidiary of
Delta Air Lines, Inc.
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if the shares of Common Stock of ASA
Holdings, Inc. and all other documents required by the Letter of Transmittal
cannot be delivered to the Depositary by the expiration of the Offer. Such form
may be delivered by hand or facsimile transmission, telex or mail to the
Depositary. See the section of the Offer to Purchase entitled "Procedures for
Accepting the Offer and Tendering Shares."
To: Harris Trust Company of New York, Depositary
By Mail: Facsimile: By Hand/Overnight Delivery:
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
For Information Telephone:
(212) 701-7624
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Delta Sub, Inc., a Georgia corporation
("Delta Sub") and a wholly-owned, indirect subsidiary of Delta Air Lines, Inc.,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated February 22, 1999 and the related Letter of Transmittal (which together
constitute the "Offer"), receipt of which is hereby acknowledged,
__________________ shares of common stock, $0.10 par value per share (the
"Shares"), of ASA Holdings, Inc., a Georgia corporation, pursuant to the
guaranteed delivery procedure set forth in the section of the Offer to Purchase
entitled "Procedures for Accepting the Offer and Tendering Shares."
Certificate Nos. (if available) SIGN HERE
- -------------------------------------------- -----------------------------
Signature(s)
- -------------------------------------------- -----------------------------
(Address)
If shares will be tendered by
book-entry transfer:
-----------------------------
(Name(s)) (Please Print)
Name of Tendering Institution
- -------------------------------------------- -----------------------------
(Zip Code)
Account No. at The Depository Trust Company:
- -------------------------------------------- -----------------------------
(Area Code and Telephone No.)
2
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc., or
a commercial bank or trust company having an office or correspondent in the
United States, guarantees (a) that the above named person(s) "own(s)" the Shares
tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange
Act of 1934, (b) that such tender of Shares complies with Rule 14e-4 and (c) to
deliver to the Depositary the Shares tendered hereby, together with a properly
completed and duly executed Letter(s) of Transmittal (or facsimile(s) thereof)
or an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery and any other required documents, all within three Nasdaq
National Market System trading days of the date hereof.
------------------------------------------
(Name of Firm)
------------------------------------------
(Authorized Signature)
------------------------------------------
(Name)
------------------------------------------
(Address)
------------------------------------------
(Zip Code)
------------------------------------------
(Area Code and Telephone No.)
Dated: , 1999.
-------------
3
<PAGE>
Exhibit (a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
ASA Holdings, Inc.
at
$34.00 Net Per Share
by
Delta Sub, Inc.
a wholly-owned, indirect subsidiary of
Delta Air Lines, Inc.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 22, 1999
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed by Delta Sub, Inc., a Georgia corporation ("Delta
Sub") and a wholly-owned, indirect subsidiary of Delta Air Lines, Inc., to act
as Dealer Manager in connection with its offer to purchase all outstanding
shares of common stock, $0.10 par value per share (the "Shares"), of ASA
Holdings, Inc., a Georgia corporation ("ASA"), at $34.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in Delta
Sub's Offer to Purchase dated February 22, 1999 and the related Letter of
Transmittal (which together constitute the "Offer").
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated February 22, 1999;
2. Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to
Purchase);
4. A form of letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer; and
<PAGE>
5. Return envelope addressed to Harris Trust Company of New York, the
Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
Delta Sub will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manager, the Information Agent or the
Depositary as described in the Offer to Purchase) for soliciting tenders of
Shares pursuant to the Offer. Delta Sub will, however, upon request, reimburse
brokers, dealers, commercial banks and trust companies for reasonable and
necessary costs and expenses incurred by them in forwarding materials to their
customers. Delta Sub will pay all stock transfer taxes applicable to its
purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter
of Transmittal.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents, should be sent to the Depositary by
12:00 midnight, New York City time, on Friday, March 19, 1999.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU,
OR ANY OTHER PERSON, THE AGENT OF DELTA SUB, INC., DELTA AIR LINES, INC., THE
DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF
ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT
OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER
OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
Exhibit (a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
ASA Holdings, Inc.
at
$34.00 Net Per Share
by
Delta Sub, Inc.
a wholly-owned indirect subsidiary of
Delta Air Lines, Inc.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
February 22, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated February
22, 1999 and the related Letter of Transmittal (which together constitute the
"Offer") in connection with the offer by Delta Sub, Inc., a Georgia corporation
("Delta Sub") and a wholly-owned, indirect subsidiary of Delta Air Lines, Inc.,
to purchase for cash all outstanding shares of common stock, $0.10 par value per
share (the "Shares"), of ASA Holdings, Inc., a Georgia corporation (the "ASA").
We are the holder of record of Shares held for your account. A tender of such
Shares can be made only by us as the holder of record and pursuant to your
instructions. The Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. The tender price is $34.00 per Share, net to you in cash.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday, March 19, 1999, unless the Offer is extended.
3. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) a number of Shares which, when taken
<PAGE>
together with Shares owned by Delta or its affiliates, represent at
least a majority of the then issued and outstanding Shares on a fully
diluted basis.
4. Any stock transfer taxes applicable to the sale of Shares to the Delta
Sub pursuant to the Offer will be paid by Delta Sub, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
on the detachable part hereof. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless you otherwise specify on the detachable part hereof. Your
instructions should be forwarded to us in ample time to permit us to submit a
tender on your behalf by the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by Harris Trust Company of New York (the
"Depositary") of
(a) Share Certificates or timely confirmation of the book-entry
transfer of such Shares into the account maintained by the Depositary
at The Depository Trust Company (the "Book-Entry Transfer Facility"),
pursuant to the procedures set forth in the section of the Offer to
Purchase entitled "Procedures for Accepting the Offer and Tendering
Shares,"
(b) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer to Purchase), in
connection with a book-entry delivery, and
(c) any other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering shareholders at the
same time depending upon when certificates for or confirmations of book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility are actually received by the Depositary.
2
<PAGE>
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
ASA Holdings, Inc.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated February 22, 1999, and the related Letter of
Transmittal, in connection with the offer by Delta Sub, Inc. to purchase all
outstanding shares of common stock, $0.10 par value per share (the "Shares"), of
ASA Holdings, Inc.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be Tendered: SIGN HERE
*Shares
- ---------------------------------- ----------------------------------
Signature(s)
Dated , 1999
----------------------------- ----------------------------------
----------------------------------
----------------------------------
Please print name(s) and
addresses here
- -----------------------------------
*Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- --------------------------------------------------------------------------------
Give the
For this type of account TAXPAYER
IDENTIFICATION
number of --
- --------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account
or, if combined funds, any one
of the individuals(1)
3. Husband and wife (joint account) The actual owner of the account
or, if joint funds, either
person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is
the only contributor, the
minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent
committee for a designated ward, minor, person(3)
or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is not The actual owner(1)
a legal or valid trust under State
law
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or pension The Legal entity (Do not fur-
trust nish the identifying number of
the personal representative or
trustee unless the legal entity
itself is not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker of nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card, or form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entry registered at all times under the Investment Company Act of
1940.
. A Foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section
1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interst generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600
or more and its paid in the course of the payer's trade or business and
you have not provided your correct taxpayer identification number to the
payer.
. Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR, PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file a tax return. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 20% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit (a)(7)
This announcement is not an offer to purchase or a solicitation of an offer to
sell Shares (as defined below). The Offer (as defined below) is made solely by
the Offer to Purchase dated February 22, 1999 and the related Letter of
Transmittal and is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction. In those jurisdictions where the applicable laws require that the
Offer be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of Delta Sub, Inc., by the Dealer Manager or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
ASA Holdings, Inc.
at
$34.00 Net Per Share
by
Delta Sub, Inc.
an indirect, wholly-owned subsidiary of
Delta Air Lines, Inc.
Delta Sub, Inc., a Georgia corporation ("Delta Sub") and an indirect,
wholly-owned subsidiary of Delta Air Lines, Inc., a Delaware corporation
("Delta"), is offering to purchase any and all issued and outstanding shares of
common stock, par value $0.10 per share (the "Shares"), of ASA Holdings Inc., a
Georgia corporation ("ASA"), at a price of $34.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated February 22, 1999 (the "Offer to Purchase") and in the related
Letter of Transmittal (which together constitute the "Offer").
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the Offer
to Purchase) a number of Shares which, together with the Shares then owned by
Delta and its affiliates, represents at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition"). The Otter is
being made pursuant to an Agreement and Plan of Merger dated as of February 15,
1999 (the "Merger Agreement"), among ASA, Delta and Delta Sub. The Merger
Agreement provides, among other things, that as soon as practicable after the
consummation of the Offer, Delta Sub will be merged with and into ASA (the
"Merger"), with ASA continuing as the surviving corporation. Pursuant to the
Merger, each outstanding Share (other than Shares held by ASA as treasury stock,
Shares owned by Delta or any of its subsidiaries or Shares as to which
dissenters rights have been exercised, which will in each case be cancelled)
will be converted into a right to receive $34.00 in cash without interest.
<PAGE>
THE BOARD OF DIRECTORS OF ASA HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS OF SHARES
(OTHER THAN DELTA AND ITS AFFILIATES), AND RECOMMENDS THAT SHAREHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Morgan Stanley Dean Witter ("Morgan Stanley") has delivered to the Board of
Directors of ASA its written opinion as investment bankers that, as of the date
of such opinion and based on and subject to the matters stated in such opinion,
the consideration to be paid in the Offer and the Merger is fair to the holders
of Shares (other than Delta and its affiliates) from a financial point of view.
See the Offer to Purchase for further information concerning the opinion of
Morgan Stanley.
The purpose or the Offer is to acquire control of, and the entire equity
interest in, ASA. The Offer is subject to certain conditions set forth in the
Offer of Purchase. If any such condition is not satisfied, Delta Sub may (i)
terminate the Offer and return all tendered Shares to tendering shareholders,
(ii) extend the Offer and, subject to withdrawal rights as set forth below,
retain all such Shares until the expiration of the Offer as so extended or (iii)
waive such condition (other than the Minimum Condition) and, subject to any
requirement to extend the time during which the Offer is open, purchase all
Shares validly tendered prior to the Expiration Date and not withdrawn. If at
the Expiration Date, any condition set forth in the Offer to Purchase shall not
be satisfied or waived, Delta Sub reserves the right to extend the period of
time during which the Offer is open by giving oral or written notice of such
extension to Harris Trust Company of New York, the Depositary. Any such
extension will be followed as promptly as practicable by public announcement
thereof.
For purposes of the Offer, Delta Sub shall be deemed to have accepted for
payment tendered Shares when, as and if Delta Sub gives oral or written notice
to the Depositary of its acceptance of the tenders of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Shares (or a confirmation of
a book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility (as defined in the Offer to Purchase)), a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after April 22, 1999 unless theretofore accepted for
payment as provided in the Offer to Purchase. To be effective, a written,
telegraphic, telex or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth in the Offer to
Purchase and must specify the name of the person who tendered the Shares to be
withdrawn and the number of Shares to be withdrawn. If the Shares to be
withdrawn have been delivered to the Depositary, a signed notice of withdrawal
with (except in the case of Shares tendered by an Eligible Institution (as
defined in the Offer to Purchase)) signatures guaranteed by an Eligible
Institution must be submitted prior to the release of such Shares. In addition,
such notice must specify, in the case of Shares tendered by delivery of
certificates, the name of the registered holder (if different from that of the
tendering shareholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 and paragraph (e)(1) of Rule 13e-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
A request is being made to ASA for the use of its shareholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
shareholder list or. if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
The Offer to Purchase and Letter of Transmittal contain important
information which should be read before any decision is made with respect to the
Offer.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent or the Dealer Manager as set forth below, and copies will be furnished
promptly at Delta Sub's expense. Questions or requests for assistance may be
directed to the Information Agent.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, New York 10022
Toll Free (800) 566-9061
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
The Dealer Manager for the Offer is:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
(212) 902-1000
(Call Collect)
February 22, 1999
<PAGE>
Exhibit (a)(8)
News Release
[LETTERHEAD OF DELTA AIRLINES APPEARS HERE]
CONTACT: Corporate Communications
404/715-2533
DELTA TO ACQUIRE ASA HOLDINGS,
PARENT OF ATLANTIC SOUTHEAST AIRLINES
ATLANTA, GA, February 16, 1999 -- In a transaction that will improve
customer service and strengthen its financial performance, Delta Air Lines today
announced that it has signed a definitive agreement with ASA Holdings, Inc., the
parent of Atlantic Southeast Airlines, Inc. (ASA), to acquire ASA Holdings for
approximately $700 million.
ASA is a Delta Connection carrier which, through a code-share agreement,
flies customers primarily from cities in the Southeastern United States and in
Texas to connect with Delta's global network of flights at the airline's hubs in
Atlanta and Dallas/Ft. Worth. When this transaction is complete, Delta intends
to operate ASA as a wholly owned subsidiary.
The Transaction
- ---------------
Under the terms of the agreement, a Delta subsidiary will make a tender
offer to purchase all outstanding shares of common stock of ASA Holdings for $34
per share in cash. ASA Holdings has outstanding 28.5 million shares of common
stock. Delta beneficially owns 7,995,000 of these shares currently.
The tender offer will commence no later than Monday, February 22, 1999. The
completion of the tender offer is conditioned on:
. the valid tendering of shares which, together with the shares Delta
already owns, represent at least a majority of the outstanding shares
on a fully diluted basis,
. the expiration or termination of the waiting period under the
Hart-Scott-Rodino Act, and
. other customary conditions
<PAGE>
-2-
The agreement also provides that, following the completion of the tender
offer, the Delta subsidiary will merge into ASA Holdings. When the merger
becomes effective, each outstanding share of ASA Holdings will be converted into
the right to receive $34 in cash and ASA Holdings and ASA will become wholly
owned subsidiaries of Delta.
The Board of Directors of ASA Holdings has unanimously determined that
these transactions are in the best interests of the shareholders of ASA Holdings
and recommends that stockholders tender their shares in the tender offer.
Transaction To Strengthen Customer Service
- ------------------------------------------
Delta said its acquisition of ASA will enhance service for airline
customers and for communities served by ASA through closer integration of
schedules and improved operations. Furthermore, the acquisition will improve
Delta's financial performance.
Revenue gains are expected to come from more efficient operations, market
growth, better utilization of aircraft at both airlines, and improved business
functions. Delta expects the transaction to be accretive to earnings in the
first year of operations.
Leo F. Mullin, Delta's president and chief executive officer, said:
"Delta's acquisition of ASA sharpens Delta's focus on providing our customers
with improved service and access to the strongest route network in the industry.
Specifically:
. "Through more closely integrated schedules, Delta and ASA will offer
customers better connections and service patterns, including those to
small and medium-sized cities across ASA's system. As a wholly owned
subsidiary of Delta, ASA also will be better able to evaluate new
flight opportunities and supplemental frequencies on existing routes.
<PAGE>
-3-
. "To further improve the consistency of service our customers
experience, Delta will work with ASA to put in place the operational
improvements Delta has made over the past two years in on-time
performance, baggage handling and other fundamental customer service
activities.
. "Regional jets represent a strategic opportunity for ASA. Currently,
about 20% of ASA's fleet consists of regional jets, and plans call for
that number to grow substantially in the coming years. Together with
Delta's own growth plans, ASA's regional jets will offer customers
significant service improvement in the years ahead.
. "Delta intends to strengthen the overall revenue performance of ASA by
introducing business tools like improved schedule planning. ASA is
already an outstanding financial performer, and we intend to build on
that record."
Mullin further said: "Delta's acquisition of ASA complements our Delta
Connection relationships with Comair, SkyWest, TransStates and Business Express.
We have excellent relationships with these companies and intend to work
cooperatively with them to make these associations stronger. We, along with our
partners, remain dedicated to creating the most innovative, customer-friendly
and service-oriented network in the industry.
"As we build on ASA's strengths, we not only will improve Delta's overall
route network, but we also will be in position to increase traffic flows to our
other connection partners. This acquisition does not alter our commitment to
support our partners and their respective growth plans.
"Our Delta Connection carriers lead the industry in investments in
regional jet aircraft, and that gives all of us terrific opportunities to
develop the total domestic network for Delta customers."
<PAGE>
-4-
George F. Pickett, chairman and chief executive officer of ASA Holdings,
said: "This transaction is fully supported by the ASA Holdings Board of
Directors and serves the best interests of our shareowners. it also enhances
ASA's growth potential on behalf of our employees, our customers and the
communities we serve by more closely aligning ASA with Delta's superb network,
operational and business skills and financial strength. We expect to expand on
our current service pattern, with the ability to create more opportunities to
provide connecting traffic to Delta's mainline."
As a wholly owned subsidiary of Delta, ASA will retain its separate
workforce and salary and benefits structure. There will be no integration of
workforces or seniority lists. ASA's labor agreements with the Air Line Pilots
Association and the Association of Flight Attendants remain in place. The
transaction will have minimal impact on ASA employment, and there will be no
impact on Delta employment as a result of this transaction.
The transition of ASA to a wholly owned subsidiary of Delta will be
coordinated on an interim basis by John N. Selvaggio, Delta's senior vice
president, airport customer service, who will report for this assignment to
Delta's Chief Operating Officer Maurice W. Worth. Prior to joining Delta in
December 1998, Selvaggio, 52, headed the US Airways Express Division, the
connection carrier for US Airways. Delta said specific transition plans will not
be discussed publicly pending regulatory review by the Department of Justice.
Delta expects the current ASA operating management will remain an important
part of the ASA team. ASA's executive management is expected to remain through
the transition and, after that, work with ASA and Delta in an advisory capacity.
Delta is the world's most flown airline and last year more than 105 million
passengers flew on Delta. Delta, Delta Express, the Delta Shuttle, the Delta
Connection carriers and Delta's Worldwide Partners operate 5,211 flights each
day to 353 cities in 56 countries.
<PAGE>
-5-
ASA Holdings, Inc. operates Atlantic Southeast Airlines, Inc., Atlanta's
largest regional air carrier with service to 37 markets, and offers service to
21 airports from its second hub at Dallas/Fort Worth, Texas. ASA, which was
founded in 1979, has operated as a Delta Connection carrier since 1984. It has a
fleet of 88 aircraft with 2,673 employees based in 40 cities.
###
<PAGE>
Exhibit (c)(2)
STOCK AGREEMENT
THIS STOCK AGREEMENT (the "Agreement") is made and executed this 17th day
of March, 1997, by and among DELTA AIR LINES, INC., a Delaware corporation
("Delta"), DELTA AIR LINES HOLDINGS, INC., a Delaware corporation ("Delta
Holdings"), ATLANTIC SOUTHEAST AIRLINES, INC., a Georgia corporation
("Airlines"), and ASA HOLDINGS, INC., a Georgia corporation ("ASA Holdings").
WHEREAS, Delta previously acquired capital stock in Airlines pursuant to
that certain Stock Purchase Agreement dated May 28, 1986, between Delta and
Airlines (the "Purchase Agreement");
WHEREAS, Delta has previously assigned all its right, title and interest in
and to any and all capital stock owned by Delta in Airlines to Delta Holdings,
whereupon Delta ceased to be a shareholder of record of Airlines and currently
is not a shareholder of record of any capital stock in or to Airlines or ASA
Holdings; and
WHEREAS, effective 11:59 p.m. E.S.T. on December 31, 1996, Airlines
undertook a reorganization transaction (the "Subject Transaction") pursuant to
which Airlines has become a wholly owned subsidiary of ASA Holdings; and
WHEREAS, under the Subject Transaction, all capital stock owned of record
by Delta Holdings in Airlines was automatically converted to the same number of
shares of capital stock in ASA Holdings, whereupon Delta Holdings ceased to own
of record any capital stock in Airlines; and
WHEREAS, the parties desire to (i) set forth herein the applicable terms,
conditions and other provisions originally contained under the Purchase
Agreement which shall apply as between Delta and Delta Holdings, as applicable,
on the one hand, and ASA Holdings, on the other, with respect to all capital
stock now owned or hereafter acquired by Delta Holdings in ASA Holdings (the
"Subject Stock") and (ii) except as noted in subclause (i), terminate in its
entirety the Purchase Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
<PAGE>
I. RECITALS.
All parties acknowledge and agree that all of the foregoing recitals are
true and correct.
II. TERMINATION.
In accordance with Section 7.8 of the Purchase Agreement, the parties
acknowledge and agree that the Purchase Agreement is hereby amended in its
entirety as hereinafter provided.
III. COVENANTS.
3.1 ASA Holdings' Board of Directors. ASA Holdings agrees that, if Delta
or Delta Holdings shall so request, (i) as promptly as practicable, ASA Holdings
will take such action as may be necessary to cause the election to ASA Holdings'
Board of Directors of two designees selected by Delta or Delta Holdings and
reasonably acceptable to ASA Holdings and (ii) for as long as Delta or Delta
Holdings owns at least 10% of the outstanding common stock of ASA Holdings, ASA
Holdings will include at least two designees of Delta or Delta Holdings
reasonably acceptable to ASA Holdings on the slate of nominees for election as
directors nominated by the ASA Holdings' Board of Directors and will use its
reasonable best efforts to assure that such individuals are elected to ASA
Holdings' Board of Directors (including, without limitation, by soliciting
proxies in favor of their election).
3.2 Equity Accounting. ASA Holdings will furnish to Delta and Delta
Holdings all information that is required by generally accepted accounting
principles to enable Delta and Delta Holdings to account for its investment in
ASA Holdings pursuant to the equity method if Delta or Delta Holdings elects or
is required by generally accepted accounting principles to do so. To the extent
reasonably requested by Delta or Delta Holdings, ASA Holdings will, and will
cause its employees, independent public accountants and other representatives
to, provide information regarding ASA Holdings to, and otherwise cooperate with,
Delta and Delta Holdings so as to enable Delta and Delta Holdings to prepare
financial statements in accordance with generally accepted accounting principles
and to comply with its reporting requirements and other disclosure obligations
under applicable federal securities laws and regulations.
2
<PAGE>
3.3 Registration Rights.
(a) Demand Rights. If, at any time Delta Holdings shall desire to sell
any or all of the Subject Stock, or any "New Securities" (as defined in Section
3.4 hereof) acquired by Delta Holdings pursuant to Section 3.4 hereof (for
purposes of this Section 3.3, the "Subject Stock" shall include such New
Securities), under circumstances requiring registration under the Securities Act
of 1933, as amended (the "Securities Act"), and shall so advise ASA Holdings by
written notice (which notice shall specify the number of shares of the Subject
Stock proposed to be sold, describe the method of proposed sale and contain an
undertaking by Delta Holdings to provide all such information and to take all
such action as may be required in order to permit ASA Holdings to comply with
all applicable requirements of the Securities and Exchange Commission (the
"SEC") and to obtain acceleration of the effective date of such registration
statement), ASA Holdings shall promptly prepare and file a registration
statement with the SEC relating to such Subject Stock designated in such notice
and use its reasonable best efforts to cause such registration statement to
become effective and remain effective for a period of not less than six months
(or such lesser period as the parties may agree); provided, however, that ASA
Holdings shall not be obligated to effect more than three such registrations. If
the plan of distribution specified by Delta Holdings with respect to any such
registration involves the selection of a managing underwriter or underwriters,
such managing underwriter or underwriters shall be chosen by Delta Holdings,
subject to the reasonable approval of ASA Holdings. In connection with any such
registration, ASA Holdings will make such filings, and will use its reasonable
best efforts to cause such filings to become effective, so that the Subject
Stock proposed to be sold shall be registered or qualified for sale under the
securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the Subject Stock covered by the
registration statement; provided, however, that ASA Holdings shall not be
required to register as a broker or dealer in any jurisdiction where it is not
then so registered or to qualify to do business as a foreign corporation in any
jurisdiction where it is not then so qualified or to file any general consent to
service of process.
(b) Piggyback Rights. If, at any time ASA Holdings shall propose the
registration under the Securities Act of an underwritten offering of shares of
capital stock, ASA Holdings shall give written notice to Delta and Delta
Holdings of such proposed registration and will use its reasonable best efforts
to include in such registration such number of shares of the Subject Stock as
Delta Holdings shall request in writing within 15 days after receipt of ASA
Holdings' notice and to cause such Subject Stock to be offered to the public on
the same terms (including the method of distribution and, in the case of shares
of the same class of stock, the offering price) applicable to the other shares
of capital stock to
3
<PAGE>
be included in such offering; provided, however, that if the managing
underwriter or underwriters of such offering shall determine in good faith and
so advise ASA Holdings in writing that the number of shares of capital stock
proposed to be sold in such offering (including the shares of the Subject Stock
proposed to be sold by Delta Holdings) exceeds the number which can be sold in
such offering, ASA Holdings shall be required to include in such offering only
such number of shares of the Subject Stock, which, when added to the number of
shares of capital stock proposed to be sold by ASA Holdings in such offering,
can, in the good faith judgment of the managing underwriter or underwriters, be
sold without adversely affecting the success of the offering (it being
understood, however, that if other holders of capital stock of ASA Holdings
shall have requested the inclusion of their shares in such registration, the
number of shares held by Delta Holdings and the number of shares of capital
stock of ASA Holdings held by such other holders to be included in such offering
shall be determined on a pro-rata basis).
(c) Expenses. ASA Holdings shall pay all fees and expenses in connection
with any registration effected pursuant to this Section 3.3, except for
underwriting discounts and commissions to brokers or dealers attributable to the
Subject Stock being sold by Delta Holdings and the fees and disbursements of any
counsel and accountants retained by Delta Holdings in connection with such
registration.
(d) Indemnification. In the case of any registration effected pursuant to
this Section 3.3, ASA Holdings and Delta Holdings will each provide the other
and any underwriter retained in connection therewith with customary indemnities.
3.4 Preemptive Rights.
(a) For so long as Delta Holdings owns at least 10% of the outstanding
common stock of ASA Holdings, if ASA Holdings proposes to issue any shares of
any class of its voting securities (such securities, together with any voting
securities which Delta Holdings has the right to acquire under this Section
3.4(a) upon the exercise of any employee stock options or upon the issuance of
any voting securities for consideration other than cash, hereinafter
collectively referred to as the "New Securities"), ASA Holdings shall promptly
advise Delta and Delta Holdings in writing of the terms on which the New
Securities are to be issued. Delta Holdings shall have the right, which may be
exercised at any time within 30 days following such notice, to acquire on the
same terms and conditions as such proposed issuance (or, in the case of the
issuance of any New Securities upon the exercise of any employee stock options,
at the market price of such securities on the date of exercise, or in the case
of the issuance of any New Securities for consideration other than cash, at a
cash price equal to the fair market value of such non-cash consideration on the
date that ASA Holdings first agrees
4
<PAGE>
to issue such New Securities) its pro rata share of the New Securities. Delta
Holdings' pro rata share of the New Securities shall be determined by
multiplying the total number of New Securities by a fraction, the numerator of
which is the total number of votes represented by the voting securities then
owned by Delta Holdings and the denominator of which is the total number of
votes represented by all of the then outstanding voting securities.
(b) Notwithstanding the foregoing, ASA Holdings need not notify Delta and
Delta Holdings of the issuance of New Securities upon the exercise of employee
stock options or of any other issuances of New Securities which in the aggregate
represent less than 1% of the total number of votes represented by all then
outstanding voting securities, but shall notify Delta and Delta Holdings within
15 days after the end of each fiscal quarter of ASA Holdings (or more frequently
if requested by Delta Holdings) as to the number of shares of New Securities so
issued during such quarter. Delta Holdings' right under this Section 3.4 to
purchase its pro rata share of New Securities may, at the election of Delta
Holdings, be exercised at any time within 30 days following the notice given
pursuant to this Section 3.4(b) or such right to purchase New Securities after a
notice given pursuant to this Section 3.4(b) shall cumulate and may be carried
forward and exercised by Delta Holdings at the time of and together with the
subsequent purchase of additional New Securities by Delta Holdings pursuant to
the next notice received by Delta Holdings pursuant to Subsection (a) of this
Section 3.4.
(c) For purposes of this Section 3.4, (i) the term "voting securities"
shall mean any securities of ASA Holdings entitled to vote generally in the
election of directors; (ii) the term "current market price" of any voting
securities shall mean, on the day in question, the last reported sale price
(regular way) on the principal national securities exchange on which such
securities are listed or admitted to trading, or if they are not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices of such securities as reported through the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or any
comparable system, or if price quotations for such securities are not reported
through NASDAQ or a comparable system, the average of the closing bid and asked
prices of such securities as furnished by two members of the National
Association of Securities Dealers, selected from time to time by ASA Holdings
for that purpose; and (iii) the term "fair market value" of any non-cash
consideration on the date in question shall mean the fair market value of such
consideration as mutually agreed by ASA Holdings and Delta Holdings, or if such
parties are unable to agree, as determined by an investment banking firm
mutually agreeable to both parties. In the event that the parties are unable to
agree on an investment banking firm, then each party shall name its own
investment banking firm and such firms shall select a third
5
<PAGE>
investment banking firm to determine the "fair market value" of any non-cash
consideration. The fees and expenses of such third investment banking firm shall
be borne equally by ASA Holdings and Delta Holdings.
3.5 Right of First Refusal. If at a time when Delta Holdings owns at
least 5% of the outstanding common stock of ASA Holdings, Delta Holdings
proposes to sell any voting securities (as defined in Section 3.4(c)) then owned
by it either (i) to five or fewer persons pursuant to a registration statement
prepared as a result of Delta Holdings' exercise of its demand rights under
Section 3.3(a), or (ii) in a private sale without registration under the
Securities Act, Delta Holdings shall promptly advise ASA Holdings in writing of
the price and terms on which such voting securities are to be sold and, if
known, the intended purchaser of such voting securities. ASA Holdings shall have
the right, which may be exercised at any time within 30 days following such
notice, to acquire all, but not less than all, of the voting securities proposed
to be sold at the same price and on the same terms as such proposed sale;
provided, however, that if such price is payable in whole or in part in
consideration other than cash, the price payable by ASA Holdings shall be
payable in cash and shall be equal to the fair market value of such non-cash
consideration on the date Delta Holdings first agrees to sell such voting
securities, determined as provided in Section 3.4(c). If ASA Holdings does not
exercise its right to purchase the voting securities proposed to be sold, Delta
Holdings shall be free to sell such voting securities at the same price and on
the same terms contained in Delta Holdings' written notice to ASA Holdings
within the one hundred twenty (120) day period following the expiration of ASA
Holdings' thirty (30) day exercise period.
3.6 Covenant to Satisfy Conditions. Each of the parties hereto will use
their respective reasonable best efforts, and cooperate with the other, to
ensure that the conditions set forth in Article III hereof are satisfied as
promptly as practicable.
IV. MISCELLANEOUS.
4.1 Brokers. ASA Holdings and Delta Holdings each represent and warrant
to the other that neither has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby. Delta Holdings and ASA Holdings each
agrees to indemnify and hold the other harmless from and against any and all
claims, liabilities or obligations with respect to any such fees or commissions
asserted by any person on the basis of any act or statement alleged to have been
made by such party.
6
<PAGE>
4.2 Expenses. Each party shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
4.3 Survival of Representations. All representations, warranties and
agreements made by ASA Holdings and Delta Holdings in this Agreement shall
survive the execution of this Agreement and the consummation of any transaction
contemplated herein and any investigation at any time made by or on behalf of
any party hereto.
4.4 Adjustments. In the event of any change in the common stock of ASA
Holdings by reason of stock dividend, split-up, recapitalization, combination,
exchange of shares or the like, the number and kind of shares subject to this
Agreement shall be appropriately adjusted.
4.5 Legend. The certificates representing the Subject Stock shall bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED
FOR SALE, SOLD OR TRANSFERRED EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR (ii) AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT, AND IN COMPLIANCE WITH THE APPLICABLE
LAWS OF ANY STATE OR OTHER JURISDICTION. THE SALE, TRANSFER OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS ALSO
SUBJECT TO RESTRICTIONS CONTAINED IN A STOCK AGREEMENT DATED MARCH
17, 1997, AMONG DELTA AIR LINES, INC., DELTA AIR LINES HOLDINGS,
INC., ATLANTIC SOUTHEAST AIRLINES, INC., AND ASA HOLDINGS, INC., A
COPY OF WHICH IS ON FILE AT THE OFFICE OF THE SECRETARY OF ASA
HOLDINGS, INC.
4.6 Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings with
respect to the subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements and understandings
between all or any number of the parties with respect to its subject matter.
7
<PAGE>
4.7 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
4.8 Amendment; Waiver. This Agreement may be amended only by a written
instrument duly executed by each of ASA Holdings, Airlines, Delta, and Delta
Holdings. To the extent permitted by law, any condition to a party's obligations
hereunder may be waived in writing by such party.
4.9 Parties in Interest. This Agreement will be binding upon, inure to
the benefit of and be enforceable by ASA Holdings, Airlines, Delta and Delta
Holdings and their respective successors and assigns. This Agreement may not be
assigned by the parties hereto, except that Delta Holdings may assign its rights
hereunder to Delta or to any directly or indirectly wholly owned subsidiary or
parent of Delta or Delta Holdings; provided, however, that no such assignment
shall relieve Delta Holdings of any of its obligations hereunder.
4.10 Specific Performance. ASA Holdings acknowledges and agrees that Delta
Holdings would not have an adequate remedy at law and would be irreparably
harmed in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that Delta Holdings shall be entitled to injunctive relief
to prevent breaches of this Agreement and to specifically enforce the terms and
provisions hereof, in addition to any other remedy to which it may be entitled,
at law or in equity.
4.11 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder ("notices") will be given in writing and will be
deemed to have been duly given when hand-delivered or, if mailed, three days
after being mailed (registered or certified mail, postage prepaid, return
receipt requested) addressed as follows:
(a) If to Delta Holdings to:
Delta Air Lines Holdings, Inc.
Suite 1305
1105 North Market Street
Wilmington, Delaware 19801
Attention: Secretary
8
<PAGE>
(b) If to Delta to:
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
1030 Delta Boulevard
Atlanta, Georgia 30320
Attention: Chief Executive Officer
copy to:
Senior Vice President-General Counsel & Secretary
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
1030 Delta Boulevard
Atlanta, Georgia 30320
(c) If to Airlines or ASA Holdings:
ASA Holdings, Inc.
100 Hartsfield Centre Parkway, Suite 800
Atlanta, Georgia 30354
Attn: John W. Beiser, President
copy to:
Altman, Kritzer & Levick, P.C.
6400 Powers Ferry Road
Suite 224
Atlanta, Georgia 30339
Attn: Craig H. Kritzer, Esq.
or, in either case, such other address as the person to whom notice is to be
given may have previously furnished to the others in the manner set forth above.
4.12 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Georgia, without regard to the
principles of conflicts of law.
4.13 Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DELTA AIR LINES, INC.
By: /s/ Thomas J. Roeck, Jr.
--------------------------------
Title: Senior Vice President-Finance and
Chief Financial Officer
DELTA AIR LINES HOLDINGS, INC.
By: /s/Maria D'Alessando
--------------------------------
Title: Treasurer
ATLANTIC SOUTHEAST AIRLINES, INC.
By: /s/ John W. Beiser
--------------------------------
Title: President
ASA HOLDINGS, INC.
By: /s/ John W. Beiser
--------------------------------
Title: President
10
<PAGE>
Exhibit (c)(4)
ASA Holdings, Inc.
TO: George F. Pickett
FROM: ASA Holdings, Inc.
DATE: February 15, 1999
================================================================================
ASA Holdings, Inc. (the "Company") has entered into an Agreement and Plan
of Merger among the Company, Delta Air Lines, Inc. ("Delta") and Delta Sub, Inc.
as of the date hereof (the "Merger Agreement"), pursuant to which the Company
will become an indirect wholly owned subsidiary of Delta effective as of the
Effective Time, as defined in the Merger Agreement (the "Effective Time"). The
Company and Delta have acknowledged that you possess extensive knowledge and
experience critical to the operations of the Company. Accordingly, the Company
has agreed to continue your service on the terms set forth in the attached Term
Sheet, which is incorporated herein by reference (the "Term Sheet"). In
consideration of the promises and benefits provided by the Company, you have
agreed to remain in the employment of the Company and honor the terms set forth
in the Term Sheet. You and the Company have agreed to negotiate in good faith to
enter into a formal written Employment and Consulting Agreement incorporating
the terms set forth in the Term Sheet, with the intention that such Employment
and Consulting Agreement will be executed prior to the Closing Date; provided,
however, that this letter agreement will remain effective and will be fully
binding upon you and the Company unless and until such Employment and Consulting
Agreement is executed and approved in writing by Delta. In addition, Delta has
agreed to execute this letter agreement and the Employment and Consulting
Agreement to evidence its agreement to guarantee payment of your benefit under
the Company SERP as set forth in the Term Sheet.
You have acknowledged that your agreement to the terms set forth in the
Term Sheet was a critical inducement for the Company and Delta to enter into the
Merger Agreement, and you have agreed to fully honor those terms.
Notwithstanding the foregoing, this letter agreement shall be null and void
if the Offer (as defined in the Merger Agreement) is not consummated for any
reason.
<PAGE>
If the foregoing fully and accurately reflects our agreement regarding the
matters addressed, please indicate your acknowledgment and agreement by signing
in the space provided.
ASA Holdings, Inc.
By: /s/ John W. Beiser
---------------------------
2
<PAGE>
As evidence of the agreement of Delta to provisions of this letter
agreement and the Term Sheet relating to its guarantee of the benefit payments
to be made to you under the terms of the Company SERP, Delta has caused this
letter agreement to be executed by a duly authorized officer of Delta.
Delta Air Lines, Inc.
By: /s/ Maurice W. Worth
---------------------------
3
<PAGE>
I, George F. Pickett, hereby acknowledge and agree to the terms set forth in
this letter and the attached Term Sheet and agree to be bound by those terms.
Acknowledged and Agreed:
/s/ George F. Pickett
- -----------------------------
4
<PAGE>
TERM SHEET
Definitions: Except as otherwise provided, defined terms used herein
shall have the meaning set forth in the accompanying letter
agreement.
Position/Duties: George F. Pickett (the "Executive") shall serve as Chief
Executive Officer of the Company from the date hereof until
the Effective Time, or such shorter period as provided
hereunder (the "Employment Term"). The Executive shall serve
as a non-employee consultant of the Company from the
Effective Time until the 180th day following the Effective
Time or such shorter period as provided hereunder (the
"Consulting Term"). During the Employment Term and the
Consulting Term the Executive shall devote his efforts and
attention to the business of the Company on a full time
basis (or such lesser amount of time as required by the
Company) and shall perform such duties as shall reasonably
be agreed between the Executive and the Board of Directors
of the Company; provided, however, that such duties shall be
reasonably related to, and consistent with, the duties
performed by the Executive as of the date hereof.
Compensation: During the Employment Term the Company shall pay the
Executive a base salary at the rate in effect for the
Executive as of the date hereof (the "Base Salary"). During
the Consulting Term the Company shall pay the Executive a
consulting fee at same rate as the base salary rate in
effect for the Executive as of the date hereof (the
"Consulting Fee").
Bonus: During the Employment Term and the Consulting Term the
Executive shall continue to earn an annual bonus entitlement
equal to 40% of the Executive's Base Salary on the same
terms that currently apply to the Executive for 1999 annual
bonus period under the Company's annual bonus plan (the
"Bonus"), payable on a pro rata basis upon the termination
of the Consulting Period, as provided herein.
<PAGE>
Special
Consideration: As of the 180th day following the Effective Time, the
Company shall pay to the Executive a lump sum payment equal
to $427,267, provided, however, that although the parties
believe and intend that this payment shall constitute
reasonable consideration for the Executive's agreement to
render the services and honor the non-competition covenant
as provided herein, the amount of this payment shall be
reduced to the extent necessary so that no portion of the
amount paid will be non-deductible under Section 280G of the
Internal Revenue Code (the "Special Consideration").
Benefits: During the Employment Term and the Consulting the Executive
shall receive benefits comparable to the benefits provided
to similarly situated senior executives of the Company.
Following any termination of the Executive's services
hereunder for any reason other than Cause (including the
expiration of the term hereof), the Executive, his spouse
and his dependent children under age 18 (or under age 23 if
a full-time student) shall be entitled to (i) "positive
space" privileges on the flights of Delta and its
subsidiaries world-wide ("Delta Service") for a period of
one year and (ii) "space available" privileges on Delta
Service for the duration of the Executive's natural life
thereafter.
Termination: Upon a termination of the Executive's employment during the
Employment Term or a termination of Executive's consulting
services during the Consulting Term, in either case, by the
Company without Cause, the Executive shall be entitled to:
(i) accrued but unpaid Base Salary and Consulting Fees
in respect of service prior to such termination
("Accrued Compensation")
(ii) a pro rata portion of the Bonus in respect of the
period prior to such termination ("Pro Rata
Bonus")
(iii) the Special Consideration, payable as of the 180th
day following the Effective Time
Upon a termination of the Executive's employment during the
Employment Term or a termination of Executive's consulting
services during the Consulting Term, in either
2
<PAGE>
case, due to death or disability, the Executive shall be
entitled to:
(i) Accrued Compensation
(ii) Pro Rata Bonus
(iii) The Special Consideration, payable within 30 days
after the Executive's last day of employment (but
in no event later than the 180th day following the
Effective Time)
Upon a termination of the Executive's employment during the
Employment Term or a termination of Executive's consulting
services during the Consulting Term, in either case, by the
Company for Cause or by the Executive for any reason, the
Executive shall be entitled to:
(i) Accrued Compensation
(ii) Pro Rata Bonus
No portion of the Special Consideration will be paid.
For purposes of this Term Sheet, "Cause" means (i) the
Executive's gross, willful and continued failure to
reasonably perform his essential duties hereunder after
written demand is delivered by the Company to the Executive
specifying manner in which the Executive has failed to
perform such duties; (ii) the Executive's misappropriation
of any assets or opportunities of the Company which are more
than de minimus; (iii) conduct by the Executive which is
grossly and demonstrably injurious to the business of the
Company; (iv) the Executive conviction of a felony or a
crime of moral turpitude which is materially and
demonstrably injurious to the business or reputation of the
Company; or (v) the Executive's breach of the Restrictive
Covenants below.
Restrictive
Covenants: For the period commencing on the date hereof and ending on
the second anniversary of the Effective Time, the Executive
shall not (i) directly or indirectly provide management or
executive services (whether as a consultant, advisor,
officer or director) to any person or entity operating or
seeking to operate a consumer airline using
3
<PAGE>
planes with a capacity of less than 70 seats in any market
in which the Company currently operates (a "Competitor"); or
(ii) solicit or hire any employee of the Company to perform
a service or function on behalf of a Competitor similar to
any service or function performed by such employee on behalf
of the Company. At no time shall the Executive divulge any
secret or confidential information, knowledge or data
relating to the Company or any of its affiliates which the
Executive has obtained in connection with his employment or
services on behalf of the Company and which has not have
become public knowledge (other than by the Executive's
violation of the foregoing). The foregoing Restrictive
Covenants shall be enforceable by injunction, it being
agreed that the damages suffered by the Company from any
breach or threatened breach of these Restrictive Covenants
could not be adequately remedied by monetary damages alone.
SERP: Notwithstanding the existing provisions of the ASA
Supplemental Executive Retirement Plan (the "SERP"), the
Executive and the Company agree that neither ASA nor any
other party shall be required to contribute any amounts to
any trust or other funding vehicle for the funding or
payment of any benefit accrued by the Executive under the
SERP and, accordingly, in calculating the amounts that must
be contributed to the ASA grantor trust under the terms of
the SERP, the SERP benefit accrued by the Executive shall be
excluded, it being intended that any SERP benefit payable to
the Executive under the SERP in accordance with its terms
shall be payable form the general assets of ASA or its
successor; provided, however, that Delta shall guarantee
full payment of the Executive's SERP benefit in accordance
with the benefit payment terms of SERP.
The terms of the SERP shall be deemed to be amended, and
shall be amended, in accordance with the foregoing.
Founder Agreement: The Amended and Restated Founding Officer Agreement between
the Company and the Executive dated April 16, 1997 shall
remain in effect and shall continue to apply in accordance
with its terms.
4
<PAGE>
Exhibit (c)(5)
ASA Holdings, Inc.
TO: John W. Beiser
FROM: ASA Holdings, Inc.
DATE: February 15, 1999
================================================================================
ASA Holdings, Inc. (the "Company") has entered into an Agreement and Plan
of Merger among the Company, Delta Air Lines, Inc. ("Delta") and Delta Sub, Inc.
as of the date hereof (the "Merger Agreement"), pursuant to which the Company
will become an indirect wholly owned subsidiary of Delta effective as of the
Effective Time, as defined in the Merger Agreement (the "Effective Time"). The
Company and Delta have acknowledged that you possess extensive knowledge and
experience critical to the operations of the Company. Accordingly, the Company
has agreed to continue your service on the terms set forth in the attached Term
Sheet, which is incorporated herein by reference (the "Term Sheet"). In
consideration of the promises and benefits provided by the Company, you have
agreed to remain in the employment of the Company and honor the terms set forth
in the Term Sheet. You and the Company have agreed to negotiate in good faith to
enter into a formal written Employment and Consulting Agreement incorporating
the terms set forth in the Term Sheet, with the intention that such Employment
and Consulting Agreement will be executed prior to the Closing Date; provided,
however, that this letter agreement will remain effective and will be fully
binding upon you and the Company unless and until such Employment and Consulting
Agreement is executed and approved in writing by Delta. In addition, Delta has
agreed to execute this letter agreement and the Employment and Consulting
Agreement to evidence its agreement to guarantee payment of your benefit under
the Company SERP as set forth in the Term Sheet.
You have acknowledged that your agreement to the terms set forth in the
Term Sheet was a critical inducement for the Company and Delta to enter into the
Merger Agreement, and you have agreed to fully honor those terms.
Notwithstanding the foregoing, this letter agreement shall be null and void
if the Offer (as defined in the Merger Agreement) is not consummated for any
reason.
<PAGE>
If the foregoing fully and accurately reflects our agreement regarding the
matters addressed, please indicate your acknowledgment and agreement by signing
in the space provided.
ASA Holdings, Inc.
By: /s/ George F. Pickett
---------------------------
2
<PAGE>
As evidence of the agreement of Delta to provisions of this letter
agreement and the Term Sheet relating to its guarantee of the benefit payments
to be made to you under the terms of the Company SERP, Delta has caused this
letter agreement to be executed by a duly authorized officer of Delta.
Delta Air Lines, Inc.
By: /s/ Maurice W. Worth
---------------------------
3
<PAGE>
I, John W. Beiser, hereby acknowledge and agree to the terms set forth in this
letter and the attached Term Sheet and agree to be bound by those terms.
Acknowledged and Agreed:
/s/ John W.Beiser
- -----------------------------
4
<PAGE>
TERM SHEET
Definitions: Except as otherwise provided, defined terms used herein
shall have the meaning set forth in the accompanying letter
agreement.
Position/Duties: John W. Beiser (the "Executive") shall serve as President
and Secretary of the Company from the date hereof until the
Effective Time, or such shorter period as provided hereunder
(the "Employment Term"). The Executive shall serve as a
non-employee consultant of the Company from the Effective
Time until the 180th day following the Effective Time or
such shorter period as provided hereunder (the "Consulting
Term"). During the Employment Term and the Consulting Term
the Executive shall devote his efforts and attention to the
business of the Company on a full time basis (or such lesser
amount of time as required by the Company) and shall perform
such duties as shall reasonably be agreed between the
Executive and the Board of Directors of the Company;
provided, however, that such duties shall be reasonably
related to, and consistent with, the duties performed by the
Executive as of the date hereof.
Compensation: During the Employment Term the Company shall pay the
Executive a base salary at the rate in effect for the
Executive as of the date hereof (the "Base Salary"). During
the Consulting Term the Company shall pay the Executive a
consulting fee at same rate as the base salary rate in
effect for the Executive as of the date hereof (the
"Consulting Fee").
Bonus: During the Employment Term and the Consulting Term the
Executive shall continue to earn an annual bonus entitlement
equal to 40% of the Executive's Base Salary on the same
terms that currently apply to the Executive for 1999 annual
bonus period under the Company's annual bonus plan (the
"Bonus"), payable on a pro rata basis upon the termination
of the Consulting Period, as provided herein.
<PAGE>
Special
Consideration: As of the 180th day following the Effective Time, the
Company shall pay to the Executive a lump sum payment equal
to $416,896, provided, however, that although the parties
believe and intend that this payment shall constitute
reasonable consideration for the Executive's agreement to
render the services and honor the non-competition covenant
as provided herein, the amount of this payment shall be
reduced to the extent necessary so that no portion of the
amount paid will be non-deductible under Section 280G of the
Internal Revenue Code (the "Special Consideration").
Benefits: During the Employment Term and the Consulting the Executive
shall receive benefits comparable to the benefits provided
to similarly situated senior executives of the Company.
Following any termination of the Executive's services
hereunder for any reason other than Cause (including the
expiration of the term hereof), the Executive, his spouse
and his dependent children under age 18 (or under age 23 if
a full-time student) shall be entitled to (i) "positive
space" privileges on the flights of Delta and its
subsidiaries world-wide ("Delta Service") for a period of
one year and (ii) "space available" privileges on Delta
Service for the duration of the Executive's natural life
thereafter.
Termination: Upon a termination of the Executive's employment during the
Employment Term or a termination of Executive's consulting
services during the Consulting Term, in either case, by the
Company without Cause, the Executive shall be entitled to:
(i) accrued but unpaid Base Salary and Consulting Fees
in respect of service prior to such termination
("Accrued Compensation")
(ii) a pro rata portion of the Bonus in respect of the
period prior to such termination ("Pro Rata
Bonus")
(iii) the Special Consideration, payable as of the 180th
day following the Effective Time
Upon a termination of the Executive's employment during the
Employment Term or a termination of Executive's consulting
services during the Consulting Term, in either
2
<PAGE>
case, due to death or disability, the Executive shall be
entitled to:
(i) Accrued Compensation
(ii) Pro Rata Bonus
(iii) The Special Consideration, payable within 30 days
after the Executive's last day of employment (but
in no event later than the 180th day following the
Effective Time)
Upon a termination of the Executive's employment during the
Employment Term or a termination of Executive's consulting
services during the Consulting Term, in either case, by the
Company for Cause or by the Executive for any reason, the
Executive shall be entitled to:
(i) Accrued Compensation
(ii) Pro Rata Bonus
No portion of the Special Consideration will be paid.
For purposes of this Term Sheet, "Cause" means (i) the
Executive's gross, willful and continued failure to
reasonably perform his essential duties hereunder after
written demand is delivered by the Company to the Executive
specifying manner in which the Executive has failed to
perform such duties; (ii) the Executive's misappropriation
of any assets or opportunities of the Company which are more
than de minimus; (iii) conduct by the Executive which is
grossly and demonstrably injurious to the business of the
Company; (iv) the Executive conviction of a felony or a
crime of moral turpitude which is materially and
demonstrably injurious to the business or reputation of the
Company; or (v) the Executive's breach of the Restrictive
Covenants below.
Restrictive
Covenants: For the period commencing on the date hereof and ending on
the second anniversary of the Effective Time, the Executive
shall not (i) directly or indirectly provide management or
executive services (whether as a consultant, advisor,
officer or director) to any person or entity operating or
seeking to operate a consumer airline using
3
<PAGE>
planes with a capacity of less than 70 seats in any market
in which the Company currently operates (a "Competitor"); or
(ii) solicit or hire any employee of the Company to perform
a service or function on behalf of a Competitor similar to
any service or function performed by such employee on behalf
of the Company. At no time shall the Executive divulge any
secret or confidential information, knowledge or data
relating to the Company or any of its affiliates which the
Executive has obtained in connection with his employment or
services on behalf of the Company and which has not have
become public knowledge (other than by the Executive's
violation of the foregoing). The foregoing Restrictive
Covenants shall be enforceable by injunction, it being
agreed that the damages suffered by the Company from any
breach or threatened breach of these Restrictive Covenants
could not be adequately remedied by monetary damages alone.
SERP: Notwithstanding the existing provisions of the ASA
Supplemental Executive Retirement Plan (the "SERP"), the
Executive and the Company agree that neither ASA nor any
other party shall be required to contribute any amounts to
any trust or other funding vehicle for the funding or
payment of any benefit accrued by the Executive under the
SERP and, accordingly, in calculating the amounts that must
be contributed to the ASA grantor trust under the terms of
the SERP, the SERP benefit accrued by the Executive shall be
excluded, it being intended that any SERP benefit payable to
the Executive under the SERP in accordance with its terms
shall be payable form the general assets of ASA or its
successor; provided, however, that Delta shall guarantee
full payment of the Executive's SERP benefit in accordance
with the benefit payment terms of SERP.
The terms of the SERP shall be deemed to be amended, and
shall be amended, in accordance with the foregoing.
Founder Agreement: The Amended and Restated Founding Officer Agreement between
the Company and the Executive dated April 16, 1997 shall
remain in effect and shall continue to apply in accordance
with its terms.
4
<PAGE>
Exhibit (c)(7)
CONFIDENTIALITY AGREEMENT
-------------------------
THIS CONFIDENTIALITY AGREEMENT (the "Agreement") is made and entered into
this 9th day of February, 1999, by and between ASA HOLDINGS, INC., a Georgia
corporation ("Holdings") and DELTA AIR LINES, INC., a Delaware corporation
("DAL").
W I T N E S S E T H:
--------------------
WHEREAS, each of Holdings, through its wholly owned subsidiary, Atlantic
Southeast Airlines, Inc., a Georgia corporation ("Airlines"), and DAL conducts
an airline business providing commercial air transportation services to the
public; and
WHEREAS, Holdings and DAL intend to engage in discussions and negotiations
with each other regarding a possible business transaction under which DAL would
acquire stock and/or assets of Holdings (the "Possible Transaction"); and
WHEREAS, in connection with the foregoing discussions and negotiations,
DAL, on behalf of itself and all of its employees, agents, representatives,
directors, officers, advisors, counsel, successors, assigns and affiliates
(collectively referred to herein as "Delta" and each individually referred to
herein as a "Delta Party") will now and hereafter obtain from Holdings,
Airlines, ASA Investments, Inc., a Delaware corporation, and their respective
employees, agents, representatives, directors, officers, advisors, counsel,
successors, assigns and affiliates (collectively referred to herein as "ASA" and
each individually referred to herein as an "ASA Party") detailed proprietary and
otherwise confidential information (collectively the "ASA Information")
belonging to ASA concerning ASA's industry, business, relationships and
operations, all of which ASA Information is proprietary and confidential to ASA;
and
WHEREAS, all documents, lists, schedules, accumulations, compilations,
summaries, analyses, projections, work product and other tangible or intangible
manifestations including all copies, computer discs, files or tapes, media or
other repositories of the ASA Information hereafter provided by any ASA Party to
any Delta Party in connection with the Possible Transaction (but excluding all
materials provided to any Delta Party in connection with the Delta Connection
program which materials shall remain subject to the confidentiality provisions,
if any, contained under such Delta Connection program) is hereinafter
collectively referred to as the "ASA Confidential Information"; and
WHEREAS, the parties agree that the use and disclosure of the ASA
Confidential Information must be carefully and continuously controlled by DAL
and each and every other Delta Party to safeguard ASA's exclusive and
proprietary rights therein.
<PAGE>
NOW, THEREFORE, in consideration of ASA's provision of the ASA Confidential
Information to DAL and any other Delta Party and other good and valuable
consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, do hereby agree as
follows:
1. DAL agrees to inform each and every Delta Party that the ASA
Confidential Information is confidential in accordance with the terms of this
Agreement and to take actions to ensure that each Delta Party treats the ASA
Confidential Information in accordance with the provisions of this Agreement.
2. Without the prior written consent of either Holding's Board of
Directors, Chief Executive Officer, or President, DAL on behalf of itself and
each and every other Delta Party agrees that neither DAL nor any other Delta
Party shall
(i) publish, disseminate, divulge or otherwise disclose any ASA
Confidential Information to any person or entity other than a Delta Party which
must (a) receive such ASA Confidential Information for the sole purpose of
evaluating the same for or on behalf of DAL and (b) be informed as to the
confidential nature of said ASA Confidential Information;
(ii) utilize, apply or otherwise use any ASA Confidential
Information to either (a) obtain or derive on its own behalf or bestow upon any
third party any economic benefits or opportunities or other competitive
advantage, or (b) impose any economic detriment or competitive disadvantage upon
ASA; or
(iii) utilize, apply or otherwise use any ASA Confidential
Information to induce or solicit any supplier, customer, licensor, licensee,
agent, or other business contact of ASA to terminate or diminish his, her or its
relationship with ASA.
DAL shall be responsible for its failure and the failure of any Delta Party
to comply with the provisions of this Agreement.
3. Immediately upon receipt of any ASA Party's request, DAL agrees to
obtain from each Delta Party and compile all ASA Confidential Information
(including all copies thereof) and thereafter surrender and return to Holdings
or such ASA Party requesting the same all of the ASA Confidential Information
including without limitation all computer, electronic, magnetic or similar forms
of media serving as repositories thereof. Alternatively, at the request and
option of an ASA Party, DAL shall destroy all ASA Confidential Information
(including all copies thereof) provided to DAL or any Delta Party which
destruction shall be confirmed in writing by a duly authorized officer of DAL.
Notwithstanding DAL's return of any ASA Confidential Information hereunder, DAL
and each Delta Party shall remain subject to all duties and obligations of
confidentiality owed to ASA and imposed under this Agreement with respect to ASA
Confidential Information.
-2-
<PAGE>
4. Nothing in this Agreement shall prohibit or limit DAL's or any other
Delta Party's use of information (including but not limited to, ideas, concepts,
know-how, techniques and methodologies) which (i) was previously known to DAL or
such other Delta Party other than through a confidentiality obligation owed to
any ASA Party, (ii) was independently developed by DAL or such other Delta Party
outside of the scope of its or their relationship with ASA, (iii) was acquired
by DAL or such other Delta Party from a third party which is not, to DAL's or
such other Delta Party's knowledge, under an obligation to ASA not to disclose
such information, or (iv) which is or becomes publicly available through no
breach by DAL or such other Delta Party of its obligations under this Agreement
and such information so described in clauses (i) through (iv) hereof shall not
constitute ASA Confidential Information.
5. In the event DAL or any other Delta Party is legally mandated or
compelled by any court, tribunal or governmental authority to disclose any ASA
Confidential Information, DAL or such other Delta Party shall provide prompt
notice to Holdings of such mandate and, at the request of any ASA Party, will
cooperate with any action by any ASA Party to obtain protective measures with
respect to the ASA Confidential Information. Thereafter, DAL and each other
Delta Party shall be entitled to comply with such subpoena or other process to
the extent required by law; provided, that in all events, DAL or such other
Delta Party shall disclose only that portion of the ASA Confidential Information
which DAL or such other Delta Party is advised by its legal counsel as being
required to so disclose.
6. DAL acknowledges and agrees that the breach of all or any part of
this Agreement by DAL, any Delta Party, or their respective advisors will result
in irreparable and continuing damage to one or more ASA Party and therefore, in
addition to any other remedy or damages which may be afforded by law, upon any
breach or threatened breach of this Agreement by DAL or any other Delta Party or
its or their respective advisors, each ASA Party shall have the right as a
matter of law and under this Agreement to seek and obtain specific performance
hereof by injunction or any other equitable remedies of any court of competent
jurisdiction and neither DAL nor any Delta Party shall contest such specific
performance on the basis that there exists an adequate remedy at law. DAL on
behalf of itself and each other Delta Party, hereby waives any requirement that
any ASA Party post any bond or demonstrate any irreparable damage or similar
circumstance as a condition to such ASA Party's seeking specific performance by
injunction hereunder. The rights, remedies and benefits provided herein are
cumulative and not exclusive of any rights, remedies or benefits which any ASA
Party may otherwise have, all of which rights or remedies at law, in equity or
otherwise, are expressly reserved.
7. The parties specifically acknowledge and agree that neither this
Agreement nor any provision contained herein shall be construed as granting or
conferring upon DAL or any other Delta Party or its respective advisors any
rights by license or otherwise in any ASA Confidential Information.
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<PAGE>
8. The invalidity of any one or more of the clauses or words contained
in this Agreement shall not affect the enforceability of the remaining portions
of this Agreement, all of which are inserted conditionally on being valid in
law; and in the event that one or more of the words or clauses contained herein
shall be invalid, this instrument shall be construed as if such invalid words or
clauses had not been inserted. In the event that any part of this Agreement
shall be held to be unenforceable or invalid, the remaining parts of this
Agreement shall nevertheless continue to be valid and enforceable as though the
invalid portions have not been a part hereof.
9. This Agreement shall be binding upon the parties hereto and upon
their respective executors, administrators, representatives, agents, employees,
successors and assigns.
10. This Agreement shall be governed by the laws of the State of Georgia.
This Agreement may be signed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument. Each of the undersigned individuals represents and warrants to each
other party hereto that such individual is the duly authorized representative of
the party on whose behalf said individual is signing below and that such
individual has all requisite power and authority to legally bind the party on
whose behalf said individual is signing below. This Agreement contains the
entire understanding of the parties with respect to the matters described
herein. This Agreement supersedes all prior and/or contemporaneous agreements
and understandings between the parties, written or oral, with respect to the
matters described herein. No covenant or condition of this Agreement can be
waived or amended except by the written consent of the parties.
11. Although Holdings has endeavored to include in the ASA Confidential
Information information known to it which it believes to be relevant for the
purpose of DAL's investigation, DAL understands that neither Holdings nor any
ASA Party makes any representation or warranty as to the accuracy or
completeness of the ASA Confidential Information. DAL agrees that neither
Holdings nor any ASA Party shall have any liability to any DAL or any Delta
Party resulting from the use of the ASA Confidential Information.
12. Nothing contained in this Agreement shall be deemed, interpreted or
construed to constitute or require any party to consummate or implement any
potential or contemplated transaction or relationship with any other party
hereto it being the parties intention that any such potential or contemplated
relationship (other than the duty of confidentiality imposed hereunder) or
transaction shall be evidenced only by a written agreement executed by the
parties to be bound thereby.
13. The parties agree that any action or proceeding brought or initiated
by either party as against the other in respect of this Agreement may be brought
or initiated in the United States District Court for the Northern District of
Georgia or in the Superior Court of Fulton County, Georgia, and each of the
undersigned consents to the exercise of subject matter and personal
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<PAGE>
jurisdiction and the placement of venue in any of such courts, or in any
jurisdiction allowed by law, in any such action or proceeding and further
consents that service of process may be effected in any such action or
proceeding in the manner provided in Official Code of Ga. Ann. Section 9-10-94
or in such other manner as may be permitted by law.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
ASA HOLDINGS, INC.
By: /s/ John W. Beiser
---------------------------------
Its: President
DELTA AIR LINES, INC.
By: /s/ Robert S. Harkey
---------------------------------
Its: Senior Vice President - General
Counsel and Secretary
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