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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9/A
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
(Amendment No. 3)
COMAIR HOLDINGS, INC.
(Name of Subject Company)
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Comair Holdings, Inc.
(Name of Person Filing Statement)
Common Stock, no par value per share
(Title of Classes of Securities)
199789108
(CUSIP Number of Class of Securities)
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Randy D. Rademacher
Senior Vice President Finance and Chief Financial Officer
Comair Holdings, Inc.
P.O. Box 75021, Cincinnati, Ohio 45275
(606) 767-2550
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications on Behalf of
the Person Filing Statement)
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With a copy to:
Peter D. Lyons, Esq. Richard D. Siegel, Esq.
Shearman & Sterling Keating, Muething & Klekamp P.L.L.
599 Lexington Avenue 1800 Provident Tower
New York, New York 10022 One East Fourth Street
(212) 848-4000 Cincinnati, Ohio 45202
(513) 579-6400
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This Amendment No. 3 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission on October 22, 1999, as amended (the
"Schedule 14D-9"), by Comair Holdings, Inc., a Kentucky corporation ("Comair"),
relating to the offer by Delta Air Lines, Inc., a Delaware corporation, to
purchase through its indirect, wholly owned subsidiary Kentucky Sub, Inc., a
Kentucky corporation, all of the issued and outstanding shares of common stock
(the "Shares"), no par value, of Comair, at a price of $23.50 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Merger Agreement.
Capitalized terms used but not defined herein have the meaning ascribed
to them in the Schedule 14D-9.
Item 3. IDENTITY AND BACKGROUND
(b)(1) 5. The Merger Agreement
The section entitled "The Merger Agreement" is hereby amended and
supplemented by adding the following at the end thereof:
"In accordance with the Memorandum of Understanding described
in Item 8, below, on November 10, 1999, Delta, Kentucky Sub and Comair
entered into Amendment No. 1 to the Merger Agreement, amending the
Merger Agreement to eliminate the $50 million Termination Fee payable
by Comair to Delta if Comair or Delta were to terminate the Merger
Agreement as a result of Comair's receiving and accepting a Superior
Proposal or in certain other circumstances. A copy of Amendment No. 1
to the Merger Agreement is attached hereto as Exhibit (c)(22) and is
incorporated herein by reference."
Item 8. ADDITIONAL INFORMATION TO BE FURNISHED
Item 8 is hereby amended and supplemented as follows:
"On November 1, 1999, an action styled Schutte v. Comair
Holdings, Inc., et al., Index No. 99-CI-06569, was commenced by a
purported Comair shareholder in the Jefferson County Circuit Court,
Commonwealth of Kentucky. A copy of the complaint is attached to this
Amendment No. 3 to the Schedule 14D-9 as Exhibit (d)(6) and is
incorporated herein by reference. The complaint in the Schutte action
names as defendants Comair, the members of the Comair Board and Delta.
It makes allegations and seeks relief substantially similar to the
allegations made and relief sought in the Schear amended complaint and
in the Barkley complaint, which are described in the Schedule 14D-9.
On November 10, 1999, counsel for the parties to all of the
various actions brought on behalf of certain Comair shareholders
entered into a memorandum of understanding (the "Memorandum of
Understanding") setting forth the parties' agreement-in-principle to
the terms of a proposed settlement of those actions. Under the
Memorandum of Understanding, which was agreed to by Comair, the members
of the Comair Board and Delta (collectively, the "Defendants") solely
to avoid the burden, expense and distraction of further litigation, the
Defendants agreed to amend the Merger Agreement to eliminate the $50
million Termination Fee payable to Delta if the Merger Agreement were
terminated in the event Comair were to receive and accept a Superior
Proposal or in certain other circumstances, and agreed to certain other
matters, including meeting with plaintiffs' counsel and their financial
experts and discussing with them the considerations of the Comair Board
leading up to the Merger Agreement and providing plaintiffs' counsel
with an opportunity to review and comment upon the disclosure contained
in the publicly filed disclosure documents relating to the Merger
Agreement. The settlement contemplated in the Memorandum of
Understanding is subject to a number of conditions, including
consummation of the Offer and the Merger as contemplated in the Merger
Agreement; completion by plaintiffs of appropriate discovery reasonably
satisfactory to plaintiffs' counsel; drafting and execution of
definitive settlement documents; and final approval of the settlement
by the Boone County Circuit Court following notice and a hearing
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regarding its fairness and adequacy to Comair shareholders other than
the Defendants. If the Court approves the settlement that is
contemplated in the Memorandum of Understanding, the Defendants and
certain other parties will be released and discharged from all claims
that were or could have been raised against them in the actions or in
connection with the Merger Agreement and the actions will be dismissed
with prejudice as to a class consisting of all Comair shareholders
(other than the Defendants) for the period from May 19, 1999, through
and including the Effective Time. In connection with Court approval of
the settlement contemplated in the Memorandum of Understanding,
plaintiffs' counsel intend to apply to the Court for an award of fees
to be paid by Comair or its successor corporation up to an aggregate
amount of $675,000 and expenses up to an aggregate of $75,000, which
the Defendants have agreed in principle not to oppose. This description
of the terms of the proposed settlement is qualified in its entirety by
reference to the Memorandum of Understanding, a copy of which is
attached to this Amendment No. 3 to the Schedule 14D-9 as Exhibit
(d)(7) and is incorporated herein by reference.
The waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the Offer and the
Merger expired at 11:59 p.m. EST on November 10, 1999.
On November 11, 1999, Delta and Comair issued a joint press
release regarding the proposed settlement and the expiration of the
waiting period under the HSR Act. The full text of the press release is
attached to this Amendment No. 3 to the Schedule 14D-9 as Exhibit
(d)(8) and is incorporated by reference herein."
Item 9. MATERIAL TO BE FILED AS EXHIBITS
Item 9 is supplemented as follows:
Exhibit (c)(22) -- Amendment No. 1, dated as of November 10,
1999, to the Agreement and Plan of Merger,
dated October 17, 1999, among Comair, Delta
and Kentucky Sub. (Incorporated by reference
to Amendment No. 3, dated as of November 12,
1999, to the Schedule 14D-1 filed by Delta,
Delta Holdings and Kentucky Sub on October
22, 1999).
Exhibit (d)(6) -- Class Action Complaint filed on November 1,
1999 in the Jefferson County Circuit Court,
Commonwealth of Kentucky, in an action
entitled Schutte v. Comair Holdings, Inc.,
et al. (Incorporated by reference to
Amendment No. 3, dated as of November 12,
1999, to the Schedule 14D-1 filed by Delta,
Delta Holdings and Kentucky Sub on October
22, 1999).
Exhibit (d)(7) -- Memorandum of Understanding, dated November
10, 1999. (Incorporated by reference to
Amendment No. 3, dated as of November 12,
1999, to the Schedule 14D-1 filed by Delta,
Delta Holdings and Kentucky Sub on October
22, 1999).
Exhibit (d)(8) -- Joint press release issued by Delta and
Comair on November 11, 1999. (Incorporated
by reference to Amendment No. 3, dated as of
November 12, 1999, to the Schedule 14D-1
filed by Delta, Delta Holdings and Kentucky
Sub on October 22, 1999).
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Annex I. Information Statement Pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 Thereunder
The section entitled "Directors and Executive Officers: Legal
Proceedings" is hereby amended and supplemented by adding the following at the
end thereof:
"On October 19, 1999, an action styled Schear v. Comair
Corporation, et al., Index No. 99-CI-1213, was commenced by a
purported Comair shareholder in the Boone County Circuit Court,
Commonwealth of Kentucky. On October 22, 1999, an action styled Amend
v. Comair Holdings, Inc., et al., Index No. 99-CI-01233, was commenced
by a purported Comair shareholder in the same court. On October 25,
1999, an action styled Barnett v. Comair Holdings, Inc., et al., Index
No. 99-CI-01242, was commenced by a purported Comair shareholder in the
same court. On October 28, 1999, plaintiffs in those three actions
filed a first amended consolidated class action complaint in the Boone
County Circuit Court, under the caption Schear v. Comair Corporation,
et al., Index No. 99-CI-1213, a copy of which is attached to Amendment
No. 1 to the Schedule 14D-9 as Exhibit (d)(3). On October 29, 1999, the
Boone County Circuit Court consolidated the three actions. The amended
complaint names as defendants Comair, the members of the Comair Board
and Delta and seeks to proceed on behalf of a purported class of Comair
shareholders other than the defendants. It alleges that the price for
Comair shares agreed to in the Merger Agreement is inadequate, that the
members of the Comair Board breached their fiduciary duties to Comair
shareholders by allegedly failing to thoroughly investigate the value
of Comair before entering into the Merger Agreement, and that Delta
purportedly aided and abetted these alleged breaches of duty, and among
other things also makes other related claims against the Comair Board
and Comair's financial advisor, Morgan Stanley Dean Witter. The amended
complaint seeks preliminary and permanent injunctive relief against the
Transaction, compensatory and/or rescissory damages in an unspecified
amount and plaintiffs' costs and attorneys' fees.
On October 28, 1999, an action styled Deutch v. Mueller, et
al., Case No. A9906534, was commenced by a purported Comair shareholder
in the Court of Common Pleas of Hamilton County, Ohio. A copy of the
complaint is attached to Amendment No. 1 to the Schedule 14D-9 as
Exhibit (d)(4). The complaint in the Deutch action names as defendants
Comair, the members of the Comair Board and Delta. It makes allegations
and seeks relief substantially similar to the allegations made and
relief sought in the Schear amended complaint and in the Barkley
complaint.
On October 27, 1999, plaintiff in the Barkley action filed an
ex parte motion for temporary restraining order, seeking a temporary
restraining order enjoining the Offer and the Merger and invalidating
certain provisions of the Merger Agreement. Plaintiff in the Barkley
action also sought expedited recovery. At a hearing before the
Jefferson County Circuit Court on October 28, 1999, those applications
were presented by the plaintiffs. On October 29, 1999, the Court issued
an opinion and order denying plaintiff's motions. A copy of the opinion
and order is attached to Amendment No. 1 to the Schedule 14D-9 as
Exhibit (d)(5).
On October 22, 1999, plaintiffs in the Schear action filed a
motion for expedited discovery and preliminary injunctive relief,
seeking among other things a temporary injunction preventing the
closing of the Offer and directing that expedited discovery occur.
Argument on plaintiff's motion was presented by the parties at a
hearing before the Boone County Circuit Court on October 29, 1999. At
the conclusion of the hearing, the Court denied the motion for a
preliminary injunction and overruled the motion for expedited
discovery.
Comair, the Comair Board and Delta believe that the claims
asserted against them in all of the foregoing cases are without merit
and intend to defend these lawsuits vigorously.
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On November 1, 1999, an action styled Schutte v. Comair
Holdings, Inc., et al., Index No. 99-CI-06569, was commenced by a
purported Comair shareholder in the Jefferson County Circuit Court,
Commonwealth of Kentucky. A copy of the complaint is attached to
Amendment No. 3 to the Schedule 14D-9 as Exhibit (d)(6) and is
incorporated herein by reference. The complaint in the Schutte action
names as defendants Comair, the members of the Comair Board and Delta.
It makes allegations and seeks relief substantially similar to the
allegations made and relief sought in the Schear amended complaint and
in the Barkley complaint, which are described in the Schedule 14D-9.
On November 10, 1999, counsel for the parties to all of the
various actions brought on behalf of certain Comair shareholders
entered into a memorandum of understanding (the "Memorandum of
Understanding") setting forth the parties' agreement-in-principle to
the terms of a proposed settlement of those actions. Under the
Memorandum of Understanding, which was agreed to by Comair, the members
of the Comair Board and Delta (collectively, the "Defendants") solely
to avoid the burden, expense and distraction of further litigation, the
Defendants agreed to amend the Merger Agreement to eliminate the
$50 million Termination Fee payable to Delta if the Merger Agreement
were terminated in the event Comair were to receive and accept a
Superior Proposal or in certain other circumstances, and agreed to
certain other matters, including meeting with plaintiffs' counsel and
their financial experts and discussing with them the considerations of
the Comair Board leading up to the Merger Agreement and providing
plaintiffs' counsel with an opportunity to review and comment upon the
disclosure contained in the publicly filed disclosure documents
relating to the Merger Agreement. The settlement contemplated in the
Memorandum of Understanding is subject to a number of conditions,
including consummation of the Offer and the Merger as contemplated in
the Merger Agreement; completion by plaintiffs of appropriate discovery
reasonably satisfactory to plaintiffs' counsel; drafting and execution
of definitive settlement documents; and final approval of the
settlement by the Boone County Circuit Court following notice and a
hearing regarding its fairness and adequacy to Comair shareholders
other than the Defendants. If the Court approves the settlement that is
contemplated in the Memorandum of Understanding, the Defendants and
certain other parties will be released and discharged from all claims
that were or could have been raised against them in the actions or in
connection with the Merger Agreement and the actions will be dismissed
with prejudice as to a class consisting of all Comair shareholders
(other than the Defendants) for the period from May 19, 1999, through
and including the Effective Time. In connection with Court approval of
the settlement contemplated in the Memorandum of Understanding,
plaintiffs' counsel intend to apply to the Court for an award of fees
to be paid by Comair or its successor corporation up to an aggregate
amount of $675,000 and expenses up to an aggregate of $75,000, which
the Defendants have agreed in principle not to oppose. This description
of the terms of the proposed settlement is qualified in its entirety by
reference to the Memorandum of Understanding, a copy of which is
attached to Amendment No. 3 to the Schedule 14D-9 as Exhibit (d)(7) and
is incorporated herein by reference."
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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.
Comair Holdings, Inc.
By: /s/ Randy D. Rademacher
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Name: Randy D. Rademacher
Title: Senior Vice President Finance and
Chief Financial Officer
Dated: November 12, 1999
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EXHIBIT INDEX
Exhibit No.
(c)(22)* Amendment No. 1, dated as of November 10, 1999, to
the Agreement and Plan of Merger, dated October 17,
1999, among Comair, Delta and Kentucky Sub.
(d)(6)* Class Action Complaint filed on November 1, 1999 in
the Jefferson County Circuit Court, Commonwealth of
Kentucky, in an action entitled Schutte v. Comair
Holdings, Inc., et al.
(d)(7)* Memorandum of Understanding, dated November 10, 1999.
(d)(8)* Joint press release issued by Delta and Comair on
November 11, 1999.
* Incorporated by reference to Amendment No. 3, dated as of November 12,
1999, to the Schedule 14D-1 filed by Delta, Delta Holdings and Kentucky
Sub on October 22, 1999.
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