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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(Amendment No. 1)
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
AIR EXPRESS INTERNATIONAL CORPORATION
(Name of Subject Corporation)
Air Express International Corporation
(Name of Person(s) Filing Statement)
Common Stock, $0.01 par value
(Title of Class of Securities)
009104100
(CUSIP Number of Class of Securities)
DENNIS M. DOLAN
Executive Vice President and Chief Financial Officer
AIR EXPRESS INTERNATIONAL CORPORATION
120 Tokeneke Road
Darien, Connecticut 06820
(203) 655-7900
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
Copy to:
KATHERINE P. BURGESON, ESQ.
CUMMINGS & LOCKWOOD
Four Stamford Plaza
P. O. Box 120
Stamford, Connecticut 06904
(203) 351-4260
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The Solicitation/Recommendation Statement on Schedule 14D-9 of which
this Amendment No. 1 (this "Amendment No. 1") is a part relates to an offer by
DP Acquisition Corporation, a Delaware corporation (the "Offeror"), a
wholly-owned subsidiary of Deutsche Post AG, a German corporation (the
"Parent"), to purchase all of the outstanding shares of common stock, $0.01 par
value per share, of Air Express International Corporation, a Delaware
corporation (the "Company"), made by means of an Offer to Purchase dated
November 19, 1999, as amended by a supplement dated November 23, 1999 (as so
amended, the "Offer to Purchase"). The Solicitation/Recommendation Statement on
Schedule 14D-9 of the Company dated November 19, 1999 is hereinafter referred to
as the "Schedule 14-9."
Except as otherwise amended by this Amendment No. 1, the information
contained in the Schedule 14D-9 is hereby confirmed. All capitalized terms used
in this Amendment No. 1 not defined herein shall have the meanings ascribed to
them in the Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
The Annex I referenced in Item 3 is hereby amended under the heading "Security
Ownership and Certain Beneficial Owners and Management" as follows:
The following table sets forth as of November 8, 1999 (except as otherwise
noted), information with respect to the beneficial ownership of the Company's
common stock by (i) each person known by the Company to own beneficially more
than 5% of the outstanding common stock of the Company, (ii) each executive
officer of the Company named in the Summary Compensation Table under "Executive
Compensation", (iii) each current director and (iv) all directors and executive
officers of the Company as a group. Unless otherwise indicated in the footnotes
to this table, beneficial ownership of shares represents sole voting and
investment power with respect to those shares:
Percentage of
Shares Owned Outstanding
Beneficial Owner Beneficially (#) Shares (%) (1)
---------------- ---------------- --------------
Wellington Management Company (2)............. 1,772,250 5.3%
75 State Street
Boston, Massachusetts 02109
FMR Corp. (3) ................................ 1,907,637 5.7
82 Devonshire Street
Boston, Massachusetts 02109
Hendrik J. Hartong, Jr. (4)................... 486,517 1.5
Guenter Rohrmann (5).......................... 480,507 1.4
Robert J. O'Connell (6)....................... 44,742 (13)
Dennis M. Dolan (7)........................... 102,938 (13)
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Giorgio Laccona (8)........................... 45,935 (13)
Daniel J. McCauley (9)........................ 49,238 (13)
John M. Fowler (10)........................... 47,500 (13)
Donald J. Keller 10).......................... 7,563 (13)
Andrew L. Lewis IV (10)....................... 15,107 (13)
Richard T. Niner (11)......................... 359,587 1.0
John Radziwill................................ 411,002 1.2
All directors and executive officers as a
group (consisting of 11 persons ) (12)...... 2,050,636 6.10
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(1) Shares issuable upon the exercise of stock options owned by that person
which can be exercised within 60 days of November 8, 1999, are deemed
outstanding for the purpose of computing the number and percentage of
outstanding shares owned by that person (and any group that includes
that person) but are not deemed outstanding for the purpose of computing
the percentage of outstanding shares owned by any other person.
(2) Based on information believed to be accurate as of September 30, 1999,
and includes shares with shared dispositive power and shared investment
power.
(3) Based on information believed to be accurate as of November 17, 1999,
and includes shares with shared dispositive power and shared investment
power.
(4) Includes 83,750 shares issuable upon the exercise of stock options.
(5) Includes 131,250 shares issuable upon the exercise of stock options.
(6) Includes 18,750 shares issuable upon the exercise of stock options.
(7) Includes 30,000 shares issuable upon the exercise of stock options.
(8) Includes 7,500 shares issuable upon the exercise of stock options.
(9) Includes 22,500 shares issuable upon the exercise of stock options.
(10) Includes 2,500 shares issuable upon the exercise of stock options.
(11) Includes 5,061 shares held in custodial accounts for the benefit of Mr.
Niner's children.
(12) Includes 306,250 shares issuable upon the exercise of stock options.
(13) Less than 1%.
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ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The text of Item 8 is hereby deleted in its entirety and replaced with
the following:
On November 19, 1999, an action was filed by an alleged shareholder of the
Company in the Court of Chancery of the State of Delaware, entitled Smith v.
Hartong, et al., C.A. No. 17594-NC. The complaint in the action seeks to proceed
on behalf of a purported class consisting of owners of the common stock of the
Company other than the defendants. The complaint names as defendants the Company
and the members of the Company's Board of Directors. Plaintiff alleges that in
agreeing to the Merger Agreement, the members of the Company's board breached
their fiduciary duties to shareholders of the Company by failing to take
appropriate measures to maximize the value of the Company's common stock.
Plaintiff seeks monetary and/or rescisionary damages in an unspecified amount,
preliminary and permanent injunctive relief against the consummation of the
transactions contemplated under the Merger Agreement and plaintiff's costs and
disbursements in bringing the action. Defendants believe that the action is
without merit and intend to defend against it vigorously. A copy of the
complaint is filed as Exhibit (d)(1) and incorporated herein by reference, and
the foregoing description is qualified in its entirety by reference to such
Exhibit.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended to add the following exhibits:
Exhibit (d)(1) Class Action Complaint filed on November 19, 1999 in the Court
of Chancery of the State of Delaware, Civil Action No.
17594-NC, in an action entitled Smith v. Hartong, et al.*
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*Not included in copies mailed to stockholders.
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SIGNATURE
After reasonable 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.
AIR EXPRESS INTERNATIONAL CORPORATION
By: /s/ Daniel J. McCauley
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Daniel J. McCauley
Vice President, Secretary and General
Counsel
Dated: November 24, 1999
Exhibit (d)(1)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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STEVE SMITH, :
:
Plaintiff, :
: Civil Action No. 17594NC
v. :
:
HENDRIK J. HARTONG, JR. :
GUENTER ROHRMANN, JOHN M. :
FOWLER, DONALD J. KELLER :
ANDREW L. LEWIS IV, RICHARD T. :
NINER, JOHN RADZIWILL, NOEL E. :
VARGAS and AIR EXPRESS :
INTERNATIONAL CORPORATION, :
:
Defendants. :
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CLASS ACTION COMPLAINT
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Plaintiff alleges upon information and belief, except for paragraph 2
hereof, which is alleged upon personal knowledge, as follows:
SUMMARY OF ACTION
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1. Plaintiff brings this action on behalf of himself and all other
shareholders of defendant Air Express International Corporation. ("Air Express"
or the "Company"), except defendants and their affiliates, against the directors
of Air Express for breaching their fiduciary duties to Air Express's
shareholders in failing to take appropriate measures to maximize the value of
the Air Express stock held by its shareholders.
THE PARTIES
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2. Plaintiff owns shares of the common stock of Air Express and has
been the owner of such shares at all times relevant hereto.
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Exhibit (d)(2)
3. Air Express is a corporation organized and existing under the laws
of the State of Delaware. Air Express primarily provides services that
facilitate the movement of freight across international markets. The Company's
core business, air and ocean freight forwarding, involves purchasing
transportation services in bulk from air and ocean carriers at wholesale rates
and profiting from the spread by offering consolidation services at retail
rates.
4. Defendant Hendrik J. Hartong, Jr. ("Hartong") is Chairman of the
Board of Directors of Air Express.
5. Defendant Guenter Rohrmann ("Rohrmann") is President, Chief
Executive Officer and a Director of Air Express.
6. Defendant John M. Fowler ("Fowler") is a Director of Air Express.
7. Defendant Donald J. Keller ("Keller") is a Director of Air Express.
8. Defendant Andrew L. Lewis IV ("Lewis") is a Director of Air
Express.
9. Defendant Richard T. Niner ("Niner") is a Director of Air Express.
10. Defendant John Radziwill ("Radziwill") is a Director of Air
Express.
11. Defendant Noel E. Vargas ("Vargas") is a Director of Air Express.
12. The defendants named in paragraphs 4-11 above are hereinafter
sometimes collectively referred to as the "Individual Defendants" or the
"Director Defendants."
13. By virtue of the Individual Defendants' position as officers
and/or directors of Air Express, they are in a fiduciary relationship with
plaintiff and other public shareholders of Air Express and owe them the highest
obligations of good faith, fair dealing, loyalty and due care.
CLASS ACTION ALLEGATIONS
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14. Plaintiff brings this action, pursuant to Rule 23 of the Rules of
this Court, on behalf of himself and all other holders of the common stock of
Air Express (except defendants herein and any person, firm, trust, corporation,
or other entity related to or
<PAGE>
Exhibit (d)(2)
affiliated with any of the defendants) and their successors in interest, who are
or will be threatened with injury arising from defendants' actions as more fully
described herein.
15. This action is properly maintainable as a class action because;
(1) The class is so numerous that joinder of all members is
impracticable. There are about 33,598,000 shares of Air Express common stock
outstanding held by at least hundreds of shareholders throughout the United
States.
16. There are questions of law and fact which are common to the class
and which predominate over questions affecting any individual class member. The
common questions include, inter alia, the following:
(1) whether defendants have breached their fiduciary and other
common law duties owed by them to plaintiff and the other members of the class;
(2) whether the class is entitled to injunctive relief or damages
as a result of the wrongful conduct of the defendants; and
(3) whether defendants have failed to take appropriate measures to
ensure the realization of the maximum value of the Air Express stock held by the
class.
17. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class.
18. Defendants have acted in a manner which affects plaintiff and all
other members of the class alike, thereby making appropriate injunctive relief
and/or corresponding declaratory relief with respect to the class as a whole.
SUBSTANTIVE ALLEGATIONS
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19. On November 15, 1999, Air Express and Deutsche Post AG, Europe's
largest mail, parcel and logistics company ("Deutsche Post"), announced that
they had signed a definitive merger agreement. Under the terms of the merger
agreement, Deutsche Post will acquire the outstanding shares of Air Express for
$33 per share in
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Exhibit (d)(2)
cash or approximately $1.14 billion. The companies further announced that Air
Express's Board of Directors and Deutsche Post's supervisory board had both
approved the agreement.
20. Pursuant to the merger agreement, Deutsche Post will commence a
tender offer for all outstanding shares of Air Express at a price of $33 per
share in cash. Upon consummation of the tender offer, any remaining shares of
Air Express will be acquired in a cash merger at the same price.
21. Deutsche Post plans to integrate all Air Express activities into
its Danzas Inercontinental Business Unit ("Danzas"). As a result, Deutsche Post
will gain a major stronghold in the U.S.A., and Danzas will become the leading
airfreight forwarder worldwide.
22. Air Express's present Chief Executive Officer, defendant Rohrmann,
will assume the position of Vice Chairman of the combined division.
23. Air Express's present Chairman, defendant Hartong, will join the
board of the combined division.
24. The purchase price of $33.00 per share is inadequate. As recently
as November 12, 1999, Air Express common stock traded as high as $32.69 so the
proposed transaction offers virtually no premium to Class members.
25. By entering into the agreement with Deutsche Post, the Air Express
Board has initiated a process to sell the Company, imposing heightened fiduciary
responsibilities on its directors. However, the terms of the proposed
transaction were not the result of an auction process; they were arrived at
without a full and thorough investigation by the Individual Defendants and they
are intrinsically unfair and inadequate from the standpoint of the Air Express
shareholders.
26. The Individual Defendants have violated the fiduciary duties owed
to the public shareholders of Air Express. The Individual Defendants' agreement
to the terms of the transaction and the failure to auction the Company and
invite other bidders
<PAGE>
Exhibit (d)(2)
demonstrate a clear absence of the exercise of due care and of loyalty to Air
Express's public shareholders.
27. In light of the foregoing, the Individual Defendants' fiduciary
obligations require them to:
(1) undertake an appropriate evaluation of Air Express's worth as a
merger/acquisition candidate;
(2) take all appropriate steps to enhance Air Express's value and
attractiveness as a merger/acquisition candidate; and
(3) take all appropriate steps to obtain the best available
transaction for Air Express.
28. As a result of defendants' breaches of fiduciary duties, plaintiff
and the other members of the Class have been and will be damaged in that they
will be prevented from maximizing the value of their investment in Air Express.
29. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiff and the other members of the Class, to
the irreparable harm of the Class.
30. Plaintiff and the other members of the class have no adequate
remedy at law. WHEREFORE, plaintiff demands judgment against defendants jointly
and severally, as follows:
(1) declaring this action to be a class action and certifying
plaintiff as the class representative;
(2) preliminarily and permanently enjoining defendants and their
counsel, agents, employees and all persons acting under, in concert with, or for
them, from proceedings with, consummating, or closing the proposed transaction;
(3) entering an order or orders requiring defendants to take the
steps set forth above to maximize shareholder value;
<PAGE>
Exhibit (d)(2)
(4) to the extent, if any, that the contemplated transaction or
transactions complained of are consummated prior to the entry of this Court's
final judgment, rescinding such transaction or transactions, or granting the
Class rescissory damages;
(5) directing that defendants account to plaintiff and the other
members of the class for all damages caused to them and account for all profits
and any special benefits obtained as a result of their unlawful conduct;
(6) awarding plaintiff the costs and disbursement of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
(7) granting plaintiff and the other members of the class such
other and further relief as may be just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By: /s/
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Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
STULL, STULL & BRODY
6 East 45th Street
New York, New York 10017
(212) 687-7230
WEISS & YOURMAN
551 Fifth Avenue, Suite 1600
New York, New York 10176
(212) 682-3025
