EXHIBIT 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
IN RE: ss. Chapter 11
ss.
KITTY HAWK, INC., ss. CASE NO. 400-42141-BJH-11
KITTY HAWK AIRCARGO, INC., ss. CASE NO. 400-42142
KITTY HAWK CHARTERS, INC. ss. CASE NO. 400-42143
KITTY HAWK INTERNATIONAL, INC., ss. CASE NO. 400-42144
KITTY HAWK CARGO, INC. ss. CASE NO. 400-42145
OK TURBINES, INC. ss. CASE NO. 400-42146
LONGHORN SOLUTIONS, INC. ss. CASE NO. 400-42147
AIRCRAFT LEASING, INC. ss. CASE NO. 400-42148
AMERICAN INTERNATIONAL ss. CASE NO. 400-42149
TRAVEL, INC. ss.
FLIGHT ONE LOGISTICS, INC. ss. CASE NO. 400-42069-BJH-11
ss.
Debtors. ss. Jointly Administered
---------------------------------------------
DEBTORS' JOINT PLAN OF REORGANIZATION
---------------------------------------------
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS............................................................2
RULES OF INTERPRETATION................................................2
ARTICLE 2
DESIGNATION OF
CLAIMS AND INTERESTS..................................................10
2.1 SUMMARY.........................................................10
ARTICLE 3
TREATMENT OF UNCLASSIFIED CLAIMS......................................11
3.1 ADMINISTRATIVE CLAIMS...........................................11
(a) GENERAL...................................................11
(b) PAYMENT OF STATUTORY FEES.................................11
(c) BAR DATE FOR ADMINISTRATIVE CLAIMS........................11
(i) GENERAL PROVISIONS..................................11
(ii) PROFESSIONALS.......................................11
(iii) ORDINARY COURSE LIABILITIES.........................12
(iv) CONTRACTUAL EMPLOYEE CLAIMS.........................12
(v) TAX CLAIMS..........................................12
3.2 TREATMENT OF PRE-PETITION PRIORITY TAX CLAIMS...................12
ARTICLE 4
CLASSIFICATION AND TREATMENT OF
CLASSIFIED CLAIMS AND INTERESTS.......................................13
4.1 CLASS 1 - BANK CLAIMS...........................................13
4.2 CLASS 2 - NOTEHOLDERS' SECURED CLAIMS...........................13
4.3 CLASS 3 - SECURED CLAIMS OTHER THAN BANK CLAIMS AND CLAIMS OF
THE NOTEHOLDERS.................................................14
4.4 CLASS 4 - PRIORITY CLAIMS.......................................14
4.5 CLASS 5 - CONVENIENCE CLAIMS....................................14
4.6 CLASS 6 - UNSECURED NOTEHOLDER CLAIMS ..........................15
4.7 CLASS 7 - OTHER UNSECURED CLAIMS................................15
4.8 CLASS 8 - OLD COMMON STOCK......................................15
4.9 CLASS 9 - SECURITIES CLAIMS.....................................15
ARTICLE 5
ACCEPTANCE OR REJECTION OF THE PLAN...................................16
5.1 VOTING CLASSES..................................................16
5.2 PRESUMED REJECTION OF PLAN......................................16
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ARTICLE 6
MANNER OF DISTRIBUTION OF PROPERTY UNDER THE PLAN.....................16
6.1 DISTRIBUTION PROCEDURES.........................................16
6.2 DISTRIBUTION OF NEW COMMON STOCK................................16
6.3 DISTRIBUTIONS BY INDENTURE TRUSTEE..............................17
6.4 SURRENDER AND CANCELLATION OF OLD SECURITIES....................17
6.5 DISPUTED CLAIMS.................................................18
6.6 MANNER OF PAYMENT UNDER THE PLAN................................18
6.7 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED
DISTRIBUTIONS...................................................18
(a) DELIVERY OF DISTRIBUTIONS IN GENERAL......................18
(b) UNDELIVERABLE DISTRIBUTIONS...............................18
(i) HOLDING AND INVESTMENT OF UNDELIVERABLE PROPERTY....18
(ii) DISTRIBUTION OF UNDELIVERABLE PROPERTY AFTER IT
BECOMES DELIVERABLE AND FAILURE TO CLAIM
UNDELIVERABLE PROPERTY..............................18
6.8 DE MINIMIS DISTRIBUTIONS........................................19
6.9 FAILURE TO NEGOTIATE CHECKS.....................................19
6.10 COMPLIANCE WITH TAX REQUIREMENTS................................19
6.11 SETOFFS.........................................................19
6.12 FRACTIONAL INTERESTS............................................19
ARTICLE 7
TREATMENT OF EXECUTORY CONTRACTS......................................20
7.1 REJECTION OF ALL EXECUTORY CONTRACTS AND LEASES NOT ASSUMED.....20
7.2 CURE PAYMENTS...................................................20
7.3 BAR DATE FOR FILING OF REJECTION CLAIMS.........................20
ARTICLE 8
MEANS FOR EXECUTION AND IMPLEMENTATION................................21
8.1 EXIT FINANCING..................................................21
8.3 MERGER OF CORPORATE ENTITIES....................................22
8.4 BOARD OF DIRECTORS OF THE REORGANIZED DEBTOR....................22
8.5 CANCELLATION OF OLD SECURITIES..................................22
8.6 AUTHORIZATION AND ISSUANCE OF NEW COMMON STOCK..................23
8.7 REGISTRATION EXEMPTION FOR DEBTOR'S NEW COMMON STOCK............23
8.8 CHARTER AND BY-LAWS.............................................23
8.9 CORPORATE ACTION................................................23
8.10 RELEASE OF FRAUDULENT CONVEYANCE CLAIMS.........................23
8.11 OTHER RELEASES BY DEBTORS.......................................24
8.12 PRESERVATION OF RIGHTS OF ACTION................................24
8.13 OBJECTIONS TO CLAIMS............................................24
8.14 RETIREE BENEFITS................................................24
8.15 EXEMPTION FROM STAMP AND SIMILAR TAXES..........................24
ARTICLE 9
CONDITIONS TO EFFECTIVENESS OF THE PLAN...............................25
9.1 CONDITIONS TO EFFECTIVENESS.....................................25
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9.2 WAIVER OF CONDITIONS............................................25
9.3 NO REQUIREMENT OF FINAL ORDER...................................25
ARTICLE 10
EFFECTS OF PLAN CONFIRMATION..........................................25
10.1 BINDING EFFECT..................................................25
10.2 MORATORIUM, INJUNCTION AND LIMITATION OF RECOURSE FOR PAYMENT...25
10.3 EXCULPATION AND LIMITATION OF LIABILITY.........................26
10.4 REVESTING.......................................................26
10.5 OTHER DOCUMENTS AND ACTIONS.....................................26
10.6 POST-CONSUMMATION EFFECT OF EVIDENCES OF CLAIMS OR INTERESTS....26
10.7 TERM OF INJUNCTIONS OR STAYS....................................27
ARTICLE 11
CONFIRMABILITY OF PLAN AND CRAMDOWN...................................27
ARTICLE 12
RETENTION OF JURISDICTION.............................................27
ARTICLE 13
MISCELLANEOUS PROVISIONS..............................................29
13.1 FRACTIONAL DOLLARS..............................................29
13.2 MODIFICATION OF PLAN............................................29
13.3 WITHDRAWAL OF PLAN..............................................29
13.4 GOVERNING LAW...................................................29
13.5 TIME............................................................29
13.6 PAYMENT DATES...................................................29
13.7 HEADINGS........................................................29
13.8 SUCCESSORS AND ASSIGNS..........................................30
13.9 EXHIBITS........................................................30
13.10 SEVERABILITY OF PLAN PROVISIONS.................................30
13.11 NO ADMISSIONS...................................................30
13.12 CREDITORS' COMMITTEE............................................30
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
IN RE: ss. Chapter 11
ss.
KITTY HAWK, INC., ss. CASE NO. 400-42141-BJH-11
KITTY HAWK AIRCARGO, INC., ss. CASE NO. 400-42142
KITTY HAWK CHARTERS, INC. ss. CASE NO. 400-42143
KITTY HAWK INTERNATIONAL, INC., ss. CASE NO. 400-42144
KITTY HAWK CARGO, INC. ss. CASE NO. 400-42145
OK TURBINES, INC. ss. CASE NO. 400-42146
LONGHORN SOLUTIONS, INC. ss. CASE NO. 400-42147
AIRCRAFT LEASING, INC. ss. CASE NO. 400-42148
AMERICAN INTERNATIONAL ss. CASE NO. 400-42149
TRAVEL, INC. ss.
FLIGHT ONE LOGISTICS, INC. ss. CASE NO. 400-42069-BJH-11
ss.
Debtors. ss. Jointly Administered
DEBTORS' JOINT PLAN OF REORGANIZATION
Kitty Hawk, Inc., Kitty Hawk Aircargo, Inc., Kitty Hawk Charters, Inc.,
Kitty Hawk International, Inc., Kitty Hawk Cargo, Inc., OK Turbines, Inc.,
Longhorn Solutions, Inc., Aircraft Leasing, Inc., American International Travel,
Inc., and Flight One Logistics, Inc. (collectively the "Debtors") as debtors and
debtors-in-possession, propose this Plan of Reorganization pursuant to section
1121(a) of Title 11 of the United States Code for the resolution of the Debtors'
outstanding creditor claims and equity interests. Reference is made to the
Debtors' Disclosure Statement (the "Disclosure Statement") for a discussion of
the Debtors' history, business, properties and results of operations, and for a
summary of this Plan and certain related matters.
[All holders of Claims and Interests are encouraged to read the Plan and
the Disclosure Statement in their entirety before voting to accept or reject
this Plan. No materials, other than the Disclosure Statement and any exhibits
and schedules attached thereto or referenced therein, have been approved by the
Debtors for use in soliciting acceptances or rejections of this Plan.]
DEBTORS' JOINT PLAN OF REORGANIZATION Page 1
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ARTICLE 1
DEFINITIONS
RULES OF INTERPRETATION. As used herein, the following terms have the
respective meanings specified below, and such meanings shall be equally
applicable to both the singular and plural, and masculine and feminine, forms of
the terms defined. The words "herein," "hereof," "hereto," "hereunder" and
others of similar import, refer to the Plan as a whole and not to any particular
section, subsection or clause contained in the Plan. Captions and headings to
articles, sections and exhibits are inserted for convenience of reference only
and are not intended to be part of or to affect the interpretation of the Plan.
The rules of construction set forth in section 102 of the Bankruptcy Code shall
apply. In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply. Any capitalized term used
herein that is not defined herein but is defined in the Bankruptcy Code shall
have the meaning ascribed to such term in the Bankruptcy Code. In addition to
such other terms as are defined in other sections of the Plan, the following
terms (which appear in the Plan as capitalized terms) have the following
meanings as used in the Plan.
1.1 "ADMINISTRATIVE CLAIM" means a Claim for costs and expenses of
administration allowed under section 503(b) of the Bankruptcy Code and referred
to in section 507(a)(1) of the Bankruptcy Code, including, without limitation:
(a) the actual and necessary costs and expenses incurred after the Petition Date
of preserving the Estates and operating the business of the Debtor (such as
wages, salaries or payments for goods and services); (b) compensation for legal,
financial advisory, accounting and other services and reimbursement of expenses
awarded or allowed under sections 330(a) or 331 of the Bankruptcy Code; and (c)
all fees and charges assessed against the Estates under 28 U.S.C. ss. 1930.
Administrative Claim includes any Claim of an employee or officer of the Debtors
arising out of a Court-approved contract.
1.2 "AFFILIATE" means (a) an entity that directly or indirectly owns,
controls or holds with power to vote, twenty percent or more of the outstanding
voting securities of a Debtor, other than an entity that holds such securities
(i) in a fiduciary or agency capacity without sole discretionary power to vote
such securities or (ii) solely to secure a debt, if such entity has not in fact
exercised such power to vote, or (b) a corporation twenty percent or more of
whose outstanding voting securities are directly or indirectly owned, controlled
or held with power to vote, by a Debtor, or by an entity that directly or
indirectly owns, controls or holds with power to vote, twenty percent or more of
the outstanding voting securities of a Debtor, other than an entity that holds
such securities (i) in a fiduciary or agency capacity without sole discretionary
power to vote such securities or (ii) solely to secure a debt, if such entity
has not in fact exercised such power to vote.
1.3 "AIRCARGO" means Kitty Hawk Aircargo, Inc., one of the Debtors.
1.4 "AIRCRAFT LEASING" means Aircraft Leasing, Inc., one of the Debtors.
1.5 "ALLOWED" means, with respect to any Claim, proof of which has been
timely, properly Filed or, if no proof of claim was so Filed, which was or
hereafter is listed on the Schedules as liquidated in amount and not disputed or
contingent, and, in either case, a Claim which is not a Disputed Claim.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 2
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1.6 "ALLOWED CLAIM" means that portion of a Claim which is not a Disputed
Claim.
1.7 "ALLOWANCE DATE" means the date that a Claim becomes an Allowed Claim.
1.8 "ALLOWED SECURED CLAIM" means an Allowed Claim, or that portion
thereof, of any creditor of the Debtors who holds a lien or security interest,
as those terms are defined in Section 101 of the Code, which Claim has been
properly perfected as required by law and determined in accordance with Section
506 of the Code with respect to properties owned by the Debtors. Such Allowed
Secured Claim is secured only to the extent of the value of the Debtors'
property which the Court finds is subject to a valid security interest of the
creditor enforceable against property of the Estate.
1.9 "ALLOWED UNSECURED CLAIM" means an Allowed Claim, or that portion
thereof, which is not entitled to priority or to secured status under the Code,
and includes, but is not limited to, any claim arising as a result of a Debtor's
execution of a guaranty agreement, promissory note, negotiable instrument, or
other similar written instrument, whether as maker, endorser, guarantor, or
otherwise.
1.10 "AMENDED BY-LAWS" means the by-laws of Kitty Hawk, in effect as of
the Petition Date, as amended, substantially in the form included in the Plan
Supplement.
1.11 ["AMENDED CERTIFICATE OF INCORPORATION" means the amended and
restated certificate of incorporation of Kitty Hawk, as surviving entity after
the mergers contemplated by Section of the Plan, effective as of the Effective
Date, substantially in the form included in the Plan Supplement.]
1.12 "AMERICAN INTERNATIONAL TRAVEL" means American International Travel,
Inc., one of the Debtors.
1.13 "BALLOTS" means the written Ballots for acceptance or rejection of
the Plan.
1.14 "BALLOT RECORD DATE" means September 1, 2000.
1.15 "BALLOT RETURN DATE" means 5:00 p.m. Dallas, Texas Time on , 2000,
unless and to the extent such date is extended by the Debtors in accordance with
the Disclosure Statement.
1.16 "BANK CLAIMS" mean the Claims of the Bank Group arising out of the
(1) Second Amended and Restated Credit Agreement (as may have been amended,
modified, supplemented, extended, renewed or restated from time to time) dated
as of November 19, 1997; (2) Revolving Credit Note from Kitty Hawk, Inc. and its
subsidiaries payable to the order of Wells Fargo Bank, N.A. in the original
principal amount of $100 million; and (3) Term Loan Note from Kitty Hawk and its
subsidiaries to Wells Fargo, in the original principal sum of $45.9 million.
1.17 "BANK GROUP" means Wells Fargo Bank (Texas), N.A., Bank One, Texas,
N.A., Comerica Bank, Heller Financial, Inc. and Union Bank of California, N.A..
DEBTORS' JOINT PLAN OF REORGANIZATION Page 3
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1.18 "BANKRUPTCY CODE" OR "CODE" means Title 11 of the United States Code
as now in effect or hereafter amended.
1.19 "BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Northern District of Texas, which presides over this proceeding, or if
necessary, the United States District Court for said District having original
jurisdiction over this case.
1.20 "BANKRUPTCY RULES" means, collectively (a) the Federal Rules of
Bankruptcy Procedure, and (b) the local rules of the Bankruptcy Court, as
applicable from time to time in the Reorganization Case.
1.21 "BUSINESS DAY" means any day, other than a Saturday, Sunday or "legal
holiday" (as defined in Bankruptcy Rule 9006(a)).
1.22 "CARGO" means Kitty Hawk Cargo, Inc., one of the Debtors.
1.23 "CASH" means cash, wire transfer, certified check, cash equivalents
and other readily marketable securities or instruments, including, without
limitation, readily marketable direct obligations of the United States of
America, certificates of deposit issued by banks, and commercial paper of any
Person, including interests accrued or earned thereon, or a check from
Reorganized Kitty Hawk.
1.24 "CHARTERS" means Kitty Hawk Charters, Inc., one of the Debtors.
1.25 "CLAIM" means any right to payment from the Debtors arising before
the Confirmation Date, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, contested,
uncontested, legal, equitable, secured, or unsecured; or any right to an
equitable remedy for breach of performance if such breach gives rise to a right
of payment from the Debtors, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, contested,
uncontested, secured or unsecured.
1.26 "CLASS" means one of the classes of Claims or Interests defined in
Article III hereof.
1.27 "CLASS 6 STOCK DISTRIBUTION" means the 42,500,000 shares of New
Common Stock that will be distributed to holders of Allowed Class 6 Claims.
1.28 "CLASS 7 STOCK DISTRIBUTION" means the 7,500,000 shares of New Common
Stock that will be distributed to holders of Allowed Class 7 Claims.
1.29 "CLASS 6 STOCK RESERVE ACCOUNT" means a reserve established to hold
the New Common Stock held from distribution on account of Disputed or
undetermined Class 6 Unsecured Claims equal to the Pro Rata share to which each
holder of a Disputed or undetermined Class 6 Unsecured Claim would have been
entitled on the Effective Date in respect of the Disputed or undetermined
portion as if the Disputed or undetermined portion of such Claim had been
Allowed on the Effective Date.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 4
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1.30 "CLASS 7 STOCK RESERVE ACCOUNT" means a reserve established to hold
the New Common Stock held from distribution on account of Disputed or
undetermined Class 7 Unsecured Claims equal to the Pro Rata share to which each
holder of a Disputed or undetermined Class 7 Unsecured Claim would have been
entitled on the Effective Date in respect of the Disputed or undetermined
portion as if the Disputed or undetermined portion of such Claim had been
Allowed on the Effective Date.
1.31 "CLASS 6 STOCK RESERVE SURPLUS ACCOUNT" means the New Common Stock
deposited or held in the Class 6 Stock Reserve Account on account of Disputed or
undetermined Unsecured Claims to the extent that the Claims are disallowed in
whole or in part after the Effective Date.
1.32 "CLASS 7 STOCK RESERVE SURPLUS ACCOUNT" means the New Common Stock
deposited or held in the Class 7 Stock Reserve Account on account of Disputed or
undetermined Unsecured Claims to the extent that the Claims are disallowed in
whole or in part after the Effective Date.
1.33 "COMPANY" means Kitty Hawk, Inc., a Delaware Corporation and its
subsidiaries.
1.34 "CONFIRMATION" means the entry of a Confirmation Order confirming
this Plan at or after a hearing pursuant to Section 1129 of the Bankruptcy Code.
1.35 "CONFIRMATION DATE" means the date the Confirmation Order is entered
on the docket by the Clerk of the Bankruptcy Court.
1.36 "CONFIRMATION ORDER" means the order entered by the Bankruptcy Court
determining that this Plan meets the requirements of Chapter 11 of the
Bankruptcy Code and is entitled to Confirmation pursuant to Section 1129 of the
Bankruptcy Code.
1.37 "CONVENIENCE CLAIM" means any Allowed Unsecured Claim in Class 5
other than an Intercompany Claim, in an amount (a) equal to or less than $500,
or (b) greater than $500, but which is reduced to $500 by written election of
the holder of such Claim made on a validly executed and timely delivered Ballot.
All Allowed Unsecured Claims (other than Intercompany Claims) of a single holder
will be aggregated and treated as a single Allowed Unsecured Claim for purposes
of determining such holder's entitlement to Convenience Claim treatment.
1.38 "CREDITORS' COMMITTEE" means the Official Committee of Unsecured
Creditors appointed in the Chapter 11 case by the United States Trustee pursuant
to Section 1102 of the Bankruptcy Code, as constituted by the addition or
removal of members from time to time.
1.39 "DEBTORS" means Kitty Hawk, Inc., Kitty Hawk Aircargo, Inc., Kitty
Hawk Charters, Inc., Kitty Hawk International, Inc., Kitty Hawk Cargo, Inc., OK
Turbines, Inc., Longhorn Solutions, Inc., Aircraft Leasing, Inc., American
International Travel, Inc., and Flight One Logistics, Inc., when acting in their
capacity as representatives of their respective bankruptcy estates.
1.40 "DISCLOSURE STATEMENT" means the Disclosure Statement Filed by the
Debtors as approved by the Bankruptcy Court for submission to the Creditors,
Interest holders, and parties-in-interest of the Debtors, as it may have been
amended or supplemented from time to time.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 5
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1.41 "DISPUTED CLAIM" means a Claim as to which a proof of claim has been
Filed or deemed Filed under applicable law, as to which an objection has been or
may be timely Filed and which objection, if timely Filed, has not been withdrawn
on or before any date fixed for Filing such objections by the Plan or Order of
the Bankruptcy Court and has not been overruled or denied by a Final Order.
Prior to the time that an objection has been or may be timely Filed, for the
purposes of this Plan a Claim shall be considered a Disputed Claim to the extent
that: (i) the amount of the Claim specified in the proof of claim exceeds the
amount of any corresponding Claim Scheduled by the Debtor in its Schedules of
Assets and Liabilities to the extent of such excess; (ii) any corresponding
Claim Scheduled by the Debtor in its Schedules of Assets and Liabilities has
been Scheduled as disputed, contingent, or unliquidated, irrespective of the
amount Scheduled; or (iii) no corresponding Claim has been Scheduled by the
Debtor in its Schedules of Assets and Liabilities.
1.42 "DISTRIBUTION DATE" means the date the Reorganized Debtors commence
distributions under the Plan.
1.43 "DISTRIBUTIONS" means the properties or interests in property to be
paid or distributed hereunder to the holders of Allowed Claims.
1.44 "DOCKET" means the docket in the Reorganization Case maintained by
the Clerk.
1.45 "EFFECTIVE CONFIRMATION ORDER" means the Confirmation Order rendered
by the Bankruptcy Court or other court of competent jurisdiction that has been
entered on the docket and (unless otherwise ordered by such court) as to which
(i) both (a) the time to seek reconsideration, rehearing, or new trial by the
rendering court (hereinafter, a ("Post-Trial Motion"), and (b) the time
(including time resulting from a timely filed motion under Rule 8002(c) under
the Federal Rules of Bankruptcy Procedure) to appeal or to seek a petition for
review or certiorari (hereinafter, an "Appellate Court Review"), has expired
(without regard to whether time to seek relief of a judgment under Rule 60(b) of
the Federal Rules of Civil Procedure or Rule 9024 of the Federal Rules of
Bankruptcy Procedure has expired); and (ii) either (a) no Post-Trial Motion or
request for Appellate Court Review is pending, or (b) a Post-Trial Motion or a
request for Appellate Court Review is pending but the subject order of judgment
has not been stayed, amended, modified or reversed by a court of competent
jurisdiction or, if stayed, such stay has been vacated or is no longer in
effect. Without limiting the foregoing, the pendency of, or request for, a
Post-Trial Motion or an Appellate Court Review shall not prevent an order from
becoming final and being implemented, absent the entry of a stay by a court of
competent jurisdiction and the continuation thereof.
1.46 "EFFECTIVE DATE" means the date on which all of the conditions
required in Section 9.1 have occurred, except as expressly waived as provided in
Section 9.2 of this Plan.
1.47 "EMPLOYEE CLAIM" means a Claim based on salaries, wages, sales
commissions, expense reimbursements, accrued vacation pay, health-related
benefits, incentive programs, employee compensation guarantees, severance or
similar employee benefits.
1.48 "ENGINES" means the engines mounted on wing on the Noteholders' Wide
Body Collateral airframes.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 6
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1.49 "ESTATES" means the estates created in these reorganization cases
under Section 541 of the Bankruptcy Code.
1.50 "EXECUTORY CONTRACT" means any unexpired lease and/or executory
contract as set forth in Section 365 of the Code.
1.51 "FILE" or "FILED" means filed with the Bankruptcy Court in the
Reorganization Case.
1.52 "FINAL ORDER" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the Docket in the
Reorganization Case, which has not been reversed, stayed, modified or amended,
and as to which (i) the time to appeal or seek certiorari has expired and no
appeal or petition for certiorari has been timely filed, or (ii) any appeal that
has been or may be taken or any petition for certiorari that has been or may be
filed has been resolved by the highest court to which the order or judgment was
appealed or from which certiorari was sought.
1.53 "FLIGHT ONE LOGISTICS" means Flight One Logistics, Inc., one of the
debtors.
1.54 "IMPAIRED" means that class of Claims or Interests that is impaired
within the meaning of 11 U.S.C.ss.1124.
1.55 "INDENTURE TRUSTEE" means HSBC or its successor, as Indenture Trustee
for the Senior Notes.
1.56 "INTEREST" means the rights of the owners and/or holders of
outstanding share or shares of the Company's Common Stock with respect of such
Interest as of the date immediately preceding the Petition Date.
1.57 "INTERNATIONAL" means Kitty Hawk International, Inc., one of the
Debtors.
1.58 "KITTY HAWK" means Kitty Hawk, Inc., one of the Debtors.
1.59 "LONGHORN SOLUTIONS" means Longhorn Solutions, Inc., one of the
Debtors.
1.60 "NET PROCEEDS" means with respect to the sale of pledged property,
the proceeds of such sale minus all costs of sale, including, but not limited
to, the cost of securing, maintaining and insuring such property pending the
sale, all costs incurred in preparing the property for sale, and all commissions
and other fees paid in connection with such sale.
1.61 "NEW COMMON STOCK" means the issued and outstanding stock of
Reorganized Kitty Hawk.
1.62 "NOTEHOLDERS" means the holders of Senior Notes.
1.63 "NOTEHOLDERS' 727 COLLATERAL" means the 727 airframes, engines and
related equipment pledged to the Noteholders.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 7
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1.64 "NOTEHOLDERS' WIDE BODY COLLATERAL" means the wide body airframes,
engines and related equipment pledged to the Noteholders.
1.65 "OK TURBINES" means OK Turbines, Inc., one of the Debtors.
1.66 "OLD COMMON STOCK" means the Common Stock of the Company and any
right to receive Old Common Stock pursuant to any warrant, option or other
agreement.
1.67 "OLD SECURITIES" means the Senior Notes and the Old Common Stock.
1.68 "ORDER" means an order or judgment of the Bankruptcy Court as entered
on the Docket.
1.69 "PERSON" means any individual, corporation, general partnership,
limited partnership, association, joint stock company, joint venture, estate,
trust, indenture trustee, government or any political subdivision, governmental
unit (as defined in the Bankruptcy Code), official committee appointed by the
United States Trustee, unofficial committee of creditors or equity holders or
other entity.
1.70 "PETITION DATE" means May 1, 2000, the date on which each of the
Debtors, other than Flight One Logistics, filed their voluntary Chapter 11
petitions.
1.71 "PLAN" means this Plan of Reorganization in its present form, or as
it may be amended, modified, and/or supplemented from time to time in accordance
with the Code, or by agreement of all affected parties, or by order of the
Bankruptcy Court, as the case may be.
1.72 "PLAN SUPPLEMENT" means the documents including the forms of the
Amended By- Laws, Amended Certificate of Incorporation, as well as a list of the
executory contracts and unexpired leases to be rejected pursuant to the Plan,
which shall be contained in a separate Plan Supplement which shall be filed with
the Clerk of the Bankruptcy Court at least fifteen (15) days prior to the date
on which the Confirmation Hearing shall first commence or such shorter period as
ordered by the Court. The Plan Supplement may be inspected in the office of the
Clerk of the Bankruptcy Court during hours established therefor. Holders of
Claims against and Equity Interests in the Debtors may obtain a copy of the Plan
Supplement upon written request to the Debtors. The Plan Supplement is
incorporated into and is a part of the Plan as if fully set forth herein.
1.73 "PRE-PETITION TAX CLAIM" means a Tax Claim arising before the
Petition Date.
1.74 "PRIORITY CLAIM" means any Claim against any of the Debtors entitled
to priority under 11 U.S.C. ss.ss. 507(a) of the Bankruptcy Code, other than an
Administrative Claim or a Tax Claim.
1.75 "PRO RATA" means proportionately, based on the percentage of the
distribution made on account of a particular Allowed Claim bears to the
distributions made on account of all Allowed Claims of the Class in which the
Allowed Claim is included.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 8
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1.76 "REJECTION CLAIM" means a Claim resulting from the rejection of a
lease or executory contract by a Debtor.
1.77 "REORGANIZATION CASE" means, collectively, the Debtors' case under
Chapter 11 of the Bankruptcy Code.
1.78 "REORGANIZED KITTY HAWK" or "REORGANIZED DEBTOR" means Kitty Hawk,
Inc., Aircargo, Charters, KHI, Cargo, OK Turbines, Longhorn Solutions, Aircraft
Leasing, American International Travel, and Flight One Logistics merged into
Aircargo on the Effective Date.
1.79 "RIGHTS OFFERING" means the Rights Offering pursuant to which the
holders of Old Common Stock will have the right to purchase an aggregate of
five(5) million shares of New Common Stock for a price per share established by
the Court at the Confirmation Hearing.
1.80 "RIGHTS OFFERING PROCEEDS" means the cash proceeds of the Rights
Offering net of any expenses incurred by the Debtors in connection with making
the Rights Offering.
1.81 "SCHEDULES" means the Schedules of Assets and Liabilities, Statement
of Financial Affairs and Statement of Executory Contracts which have been filed
by the Debtors with the Bankruptcy Court as amended or supplemented on or before
the Confirmation Date, listing the liabilities and assets of Debtor.
1.82 "SECURED CLAIM" means any Claim that is secured by a lien on property
in which the Estate has an interest or that is subject to setoff under section
553 of the Bankruptcy Code, to the extent of the value of the claim holder's
interest in the Estate's interest in such property or to the extent of the
amount subject to setoff, as applicable, as determined pursuant to section
506(a) of the Bankruptcy Code.
1.83 "SECURITIES CLAIMS" means (i) any Claim arising from rescission of a
purchase or sale of Old Common Stock or for damages arising from the purchase or
sale of Old Common Stock, or (ii) any Claim for indemnity, reimbursement, or
contribution on account of any such Claim.
1.84 "SECURITY AGREEMENT" means the documentation under which a lien
against property is reflected.
1.85 "SENIOR NOTES" means the 9.95% Senior Secured Notes due 2004 issued
by Kitty Hawk, Inc.
1.86 "SENIOR NOTE GUARANTEES" means the guarantees of the Senior Notes by
each of the Debtors.
1.87 "SUBSCRIPTION DEADLINE" means the last date on which holders of Old
Common Stock can exercise their Rights under the Rights Offering.
1.88 "TAX CLAIM" means an Unsecured Allowed Claim of a governmental entity
as provided by Section 507(a)(8) of the Code.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 9
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1.89 "UNSECURED CLAIM" means any Claim that is not an Administrative
Claim, Tax Claim or Secured Claim.
ARTICLE 2
DESIGNATION OF
CLAIMS AND INTERESTS
THIS PLAN CONSOLIDATES THE CLAIMS AGAINST THE DEBTORS FOR PURPOSES OF
DISTRIBUTIONS AS PART OF A SETTLEMENT WITH THE NOTEHOLDERS DESCRIBED IN SECTION
IV,D, 2 (B) OF THE DISCLOSURE STATEMENT. THE DEBTORS BELIEVE THAT THE SETTLEMENT
PROVIDES GREATER DISTRIBUTIONS OF VALUE TO UNSECURED CREDITORS (OTHER THAN THE
NOTEHOLDERS) THAN THEY WOULD RECEIVE IF DISTRIBUTIONS WERE MADE ON AN ENTITY BY
ENTITY BASIS.
2.1 SUMMARY. The following is a designation of the classes of Claims and
Interests under this Plan. In accordance with section 1123(a)(1) of the
Bankruptcy Code, Administrative Claims and Tax Claims described in Article 3 of
this Plan have not been classified and are excluded from the following classes.
A Claim or Interest is classified in a particular class only to the extent that
the Claim or Interest qualifies within the description of that class, and is
classified in another class or classes to the extent that any remainder of the
Claim or Interest qualifies within the description of such other class or
classes. A Claim or Interest is classified in a particular class only to the
extent that the Claim or Interest is an Allowed Claim or Allowed Interest in
that class and has not been paid, released or otherwise satisfied before the
Effective Date; a Claim or Interest which is not an Allowed Claim or Interest is
not in any Class. Notwithstanding anything to the contrary contained in this
Plan, no distribution shall be made on account of any Claim or Interest which is
not an Allowed Claim or Allowed Interest. The Plan consolidates distributions to
creditors of each of the Debtors as part of a settlement. Classes are considered
separately among the Debtors for voting purposes and jointly among the Debtors
for distribution purposes. The treatment provided for each Class shall be the
same for each of the Debtors as if Claims against each Debtor had been
separately classified.
CLASS STATUS
A. SECURED CLAIMS
Class 1: Bank Claims Impaired - entitled to vote
Class 2: Noteholders' Secured Claims Impaired - entitled to vote
Class 3: Secured Claims Other Than Bank Impaired - entitled to vote
Claims and Claims of the
Noteholders
B. UNSECURED CLAIMS
Class 4: Priority Claims Impaired - entitled to vote
DEBTORS' JOINT PLAN OF REORGANIZATION Page 10
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Class 5: Convenience Claims Impaired - entitled to vote
Class 6: Unsecured Noteholder Claims Impaired - entitled to vote
Class 7: Other Unsecured Claims Impaired - entitled to vote
C. INTERESTS
Class 8: Old Common Stock Impaired - entitled to vote
Class 9: Securities Claims Impaired - deemed to have
rejected
ARTICLE 3
TREATMENT OF UNCLASSIFIED CLAIMS
3.1 ADMINISTRATIVE CLAIMS.
(a) GENERAL. Subject to the bar date provisions herein, unless
otherwise agreed to by the parties, each holder of an Allowed Administrative
Claim shall receive Cash equal to the unpaid portion of such Allowed
Administrative Claim on the later of (a) the Effective Date or as soon as
practicable thereafter, (b) the Allowance Date, and (c) such other date as is
mutually agreed upon by the Debtors and the holder of such Claim; PROVIDED,
HOWEVER, that Administrative Claims that represent liabilities incurred by the
Debtors in the ordinary course of their business during the Reorganization Cases
shall be paid by Reorganized Kitty Hawk in the ordinary course of business and
in accordance with any terms and conditions of any agreements relating thereto.
Payments on Administrative Claims shall be made by the Reorganized Debtor.
(b) PAYMENT OF STATUTORY FEES. All fees payable pursuant to 28
U.S.C.ss.1930 shall be paid in Cash equal to the amount of such Administrative
Claim when due.
(c) BAR DATE FOR ADMINISTRATIVE CLAIMS.
(i) GENERAL PROVISIONS. Except as provided below in Sections
3.1(c)(iii), 3.1(c)(iv) and 3.1(c)(v), requests for payment of Administrative
Claims must be Filed no later than forty-five (45) days after the Effective
Date. Holders of Administrative Claims (including, without limitation,
professionals requesting compensation or reimbursement of expenses and the
holders of any Claims for federal, state or local taxes) that are required to
File a request for payment of such Claims and that do not File such requests by
the applicable bar date shall be forever barred from asserting such Claims
against the Debtors, any of their affiliates or any of their respective
property.
(ii) PROFESSIONALS. All professionals or other entities
requesting compensation or reimbursement of expenses pursuant to sections 327,
328, 330, 331, 503(b) and 1103 of the Bankruptcy Code for services rendered
before the Effective Date (including, without
DEBTORS' JOINT PLAN OF REORGANIZATION Page 11
<PAGE>
limitation, any compensation requested by any professional or any other entity
for making a substantial contribution in the Reorganization Case) shall File and
serve on Reorganized Kitty Hawk and the Creditors' Committee an application for
final allowance of compensation and reimbursement of expenses no later than
forty-five (45) days after the Effective Date. Objections to applications of
professionals for compensation or reimbursement of expenses must be Filed and
served on Debtors and the professionals to whose application the objections are
addressed no later than seventy (70) days after the Effective Date. Any
professional fees and reimbursements or expenses incurred by the Reorganized
Debtor subsequent to the Effective Date may be paid without application to the
Bankruptcy Court.
(iii) ORDINARY COURSE LIABILITIES. Holders of Administrative
Claims based on liabilities incurred in the ordinary course of the Debtors'
business (other than Claims of governmental units for taxes or Claims and/or
penalties related to such taxes) shall not be required to File any request for
payment of such Claims. Such liabilities shall be paid by the Reorganized Debtor
as soon as practicable after the Effective Date.
(iv) CONTRACTUAL EMPLOYEE CLAIMS. Holders of Claims under
employment contracts approved by the Court shall not be required to File any
request for payment of such Claims and such Claims shall be paid in full on the
Effective Date.
(v) TAX CLAIMS. All requests for payment of Administrative
Claims and other Claims by a governmental unit for taxes (and for interest
and/or penalties related to such taxes) for any tax year or period, all or any
portion of which occurs or falls within the period from and including the
Petition Date through and including the Effective Date ("Post-Petition Tax
Claims") and for which no bar date has otherwise been previously established,
must be Filed on or before the later of (i) 45 days following the Effective
Date; and (ii) 90 days following the filing with the applicable governmental
unit of the tax return for such taxes for such tax year or period. Any holder of
any Post-Petition Tax Claim that is required to File a request for payment of
such taxes and does not File such a Claim by the applicable bar date shall be
forever barred from asserting any such Post-Petition Tax Claim against any of
the Debtors, Kitty Hawk, or their respective property, whether any such
Post-Petition Tax Claim is deemed to arise prior to, on, or subsequent to the
Effective Date. To the extent that the holder of a Tax Claim holds a lien to
secure its Claim under applicable state law, the holder of such Claim shall
retain its lien until its Allowed Claim has been paid in full.
3.2 TREATMENT OF PRE-PETITION PRIORITY TAX CLAIMS. Each holder of an
Allowed Pre- Petition Tax Claim shall be paid by the Reorganized Debtor,
pursuant to the provisions of Section 1129(a)(4)(c) of the Bankruptcy Code, in
equal quarterly installments commencing on the first day of the first full month
following the Effective Date (or the Allowance Date, if later) with the final
payment of the remaining unpaid balance to be made on the sixth anniversary of
the assessment of the tax, together with interest thereon at % per annum from
and after the Effective Date until the date of final payment. The Reorganized
Debtor may prepay any Priority Tax Claim without penalty or premium, or may pay
any Allowed Priority Tax Claim on such terms as the holder of the Allowed Claim
and the Debtors may agree. To the extent that the holder of a Priority Tax Claim
holds a lien to secure its Claim under applicable state law, the lien shall
remain in full force and effect until the Priority Tax Claim is paid in full.
Failure by the Reorganized Debtor to timely make a payment on an Allowed Tax
Claim pursuant to the terms of this Plan shall be an event of default. If
DEBTORS' JOINT PLAN OF REORGANIZATION Page 12
<PAGE>
the Reorganized Debtor fails to cure a default within twenty (20) days after
service of written notice of default from the holder of the Allowed Tax Claim,
then the holder of such Allowed Tax Claim may enforce the total amount of its
Claim, plus interest as provided in this Plan, against the Reorganized Debtor in
accordance with applicable state or federal laws.
ARTICLE 4
CLASSIFICATION AND TREATMENT OF
CLASSIFIED CLAIMS AND INTERESTS
4.1 CLASS 1 - BANK CLAIMS.
(a) CLASSIFICATION: Class 1 consists of all Allowed Secured Bank
Claims.
(b) TREATMENT: Class 1 is impaired and the holder of the Class 1
Claim will be entitled to vote on the Plan. The Allowed Secured Bank Claims
shall be satisfied in full on the Effective Date or shall be treated on such
terms as are acceptable to the Bank Group and Reorganized Kitty Hawk.
4.2 CLASS 2 - NOTEHOLDERS' SECURED CLAIMS
(a) CLASSIFICATION: Class 2 consists of all Allowed Secured Claims
of the Noteholders.
(b) TREATMENT: Class 2 is impaired, and the holders of Allowed
Claims in such Class are entitled to vote on the Plan. On the Effective Date,
the Reorganized Debtor shall satisfy the Noteholders' Secured Claim that is
secured by the Noteholders' 727 Collateral through the payment to the
Noteholders of cash equal to the current value of the 727 Collateral, which the
Debtors, Indenture Trustee, and an Unofficial Committee of Noteholders have
agreed(1) is [$55] million and by the delivery to the Indenture Trustee of the
Net Proceeds of the Engines. To the extent that the Noteholders' Wide Body
Collateral and the Engines have not been liquidated and the net proceeds paid to
the Indenture Trustee prior to the Effective Date, at the option of the
Noteholders, acting through the Indenture Trustee, (i) KHI shall convey the Wide
Body Collateral and Engines to the Indenture Trustee, or (ii) Reorganized Kitty
Hawk shall liquidate the remaining Wide Body Collateral and Engines in
cooperation with the Indenture Trustee and its agents and deliver the Net
Proceeds to the Indenture Trustee pursuant to the Bankruptcy Court's Orders. The
Bankruptcy Court shall retain jurisdiction to enter Orders (i) approving the
sale of Wide Body Collateral and Engines and (ii) confirming to purchasers that
such sale is free and clear of liens, claims and any other interest in such
property that arose before the Confirmation Date.
--------
(1) The Debtors, the Indenture Trustee and the Unofficial Committee of
Noteholders have not reached a final agreement on the value of the Noteholders'
727 Collateral.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 13
<PAGE>
4.3 CLASS 3 - SECURED CLAIMS OTHER THAN BANK CLAIMS AND CLAIMS OF THE
NOTEHOLDERS.
(a) CLASSIFICATION: Class 3 consists of all Allowed Secured Claims
other than the Bank Claims and the Claims of the Noteholders. Each secured
creditor shall be treated as a separate sub-class of Class 3.
(b) TREATMENT: Class 3 is impaired, and the holders of Allowed
Claims in such Class are entitled to vote on the Plan. At the Debtors' option,
on the Effective Date (a) the Plan may leave unaltered the legal, equitable, and
contractual rights of the holder of an Allowed Secured Claim, OR (b)
notwithstanding any contractual provision or applicable law that entitles the
holder of an Allowed Secured Claim to demand or receive accelerated payment from
the Debtors after the occurrence of a default, the Debtors may cure any such
default, other than a default of a kind specified in section 365(b)(2) of the
Bankruptcy Code, reinstate the maturity of such Claim as such maturity existed
before such default, compensate the holder of such Claim for any damages
incurred as a result of any reasonable reliance by such holder on such
contractual provision or such applicable law, and otherwise leave unaltered the
legal, equitable or contractual rights to which such Claim entitles the holder,
all pursuant to section 1124 of the Bankruptcy Code, OR (c) the Debtors may
either (i) pay an Allowed Secured Claim in full, in cash, OR (ii) the Debtors
may deliver to the holder of an Allowed Secured Claim the property securing such
Claim, OR (iii) at Kitty Hawk's election and direction, Reorganized Kitty Hawk
may deliver to the holder of an Allowed Secured Claim deferred cash payments in
accordance with the requirements of section 1129(b)(2)(A)(II) of the Bankruptcy
Code, in all of such events, the value of such holder's interest in such
property shall be determined (A) by agreement of the Reorganized Debtor and the
holder of such Allowed Secured Claim or (B) if they do not agree, by the
Bankruptcy Court, OR (d) the Debtors may assume and assign the contract or
agreement governing an Allowed Secured Claim pursuant to section 365(b) of the
Bankruptcy Code, OR (e) the Debtors may pay an Allowed Secured Claim in such
manner as may be agreed to by the holder of such Claim.
4.4 CLASS 4 - PRIORITY CLAIMS.
(a) CLASSIFICATION: Class 4 consists of all non-tax Priority Claims.
(b) TREATMENT: Class 4 is impaired and, accordingly, the members of
Class 4 are entitled to vote on the Plan. Unless otherwise agreed to by the
parties, each holder of an Allowed Claim in Class 4 will be paid the Allowed
amount of such Claim in full in cash by the Reorganized Debtor on or before the
later of (a) the first practicable date after the Effective Date, (b) the
Allowance Date, and (c) such other date as is mutually agreed upon by the
Reorganized Debtor and the holder of such Claim.
4.5 CLASS 5 - CONVENIENCE CLAIMS
(a) CLASSIFICATION: Class 5 consists of Allowed Convenience Claims.
(b) TREATMENT: Class 5 is impaired and holders of Class 5 Claims are
entitled to vote on the Plan. Each holder of an Allowed Unsecured Claim(s) that
is $500 or less, or that is more
DEBTORS' JOINT PLAN OF REORGANIZATION Page 14
<PAGE>
than $500, but the holder of which elects on the Ballot to have its Allowed
Unsecured Claim(s) reduced to $500 and treated as a single Allowed Class 5
Convenience Claim, shall receive, on the Effective Date or as soon thereafter as
practicable, payment from the Debtors in cash in an amount equal to the lesser
of $500 or the allowed amount of such Claim(s). Creditors electing to reduce
their Claims to $500 waive the remainder of other Claims and shall not be
entitled to any other distribution in this Plan or from the Debtors.
4.6 CLASS 6 - UNSECURED NOTEHOLDER CLAIMS
(a) CLASSIFICATION: Class 6 consists of all Allowed Unsecured Claims
of Noteholders.
(b) TREATMENT: Class 6 is impaired and, accordingly, the members of
Class 6 are entitled to vote on the Plan. Holders of Allowed Unsecured Claims in
Class 6 shall receive a Pro Rata distribution of the Class 6 Stock Distribution.
4.7 CLASS 7 - OTHER UNSECURED CLAIMS
(a) CLASSIFICATION: Class 7 consists of all Allowed Unsecured Claims
not included in Classes 5 or 6.
(b) TREATMENT: Class 7 is impaired and, accordingly, the members of
Class 7 are entitled to vote on the Plan. Holders of Allowed Unsecured Claims in
Class 7 shall receive a Pro Rata distribution of the Class 7 Stock Distribution.
Holders of Class 7 Claims may elect by so indicating on their ballot to have
their New Common Stock redeemed by Reorganized Kitty Hawk from the Rights
Offering Proceeds at a price equal to 50% of the price per share established by
the Court. To the extent that a Class 7 Claimant elects to have its New Common
Stock redeemed and the Rights Offering Proceeds are insufficient to redeem all
of such Class 7 Claimant's shares of New Common Stock, the Class 7 Claimant's
shares will be redeemed Pro Rata based on the percentage that the total shares
of New Common Stock held by Class 7 Claimants electing redemption bears to the
shares purchase in the Rights Offering.
4.8 CLASS 8 - OLD COMMON STOCK
(a) CLASSIFICATION: Class 8 consists of all Interests in Old Common
Stock.
(b) TREATMENT: Holders of Interests in Class 8 will receive the
right to purchase no less than their Pro Rata share of 5 million shares of New
Common Stock pursuant to the Rights Offering at the price per share established
by the Court. The Old Common Stock will be canceled.
4.9 CLASS 9 - SECURITIES CLAIMS
(a) CLASSIFICATION: Class 9 consists of all Allowed Securities
Claims.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 15
<PAGE>
(b) TREATMENT: Holders of Class 9 Claims shall be treated with the
same priority as the Old Common Stock pursuant to Section 510(b) of the Code and
will receive no distribution under the Plan.
ARTICLE 5
ACCEPTANCE OR REJECTION OF THE PLAN
5.1 VOTING CLASSES. The holders of Claims in Classes 1, 2, 3,4, 5, 6 and 7
and Interest in Class 8 are impaired and shall be entitled to vote to accept or
reject the Plan.
5.2 PRESUMED REJECTION OF PLAN. The holders of Claims in Class 9 are not
being solicited to accept or reject the Plan and will be deemed to have rejected
the Plan.
ARTICLE 6
MANNER OF DISTRIBUTION OF PROPERTY UNDER THE PLAN
6.1 DISTRIBUTION PROCEDURES. Except as otherwise provided in the Plan, all
distributions of Cash and other property shall be made by the Reorganized Debtor
on the later of the Effective Date or the Allowance Date, or as soon thereafter
as practicable. Distributions required to be made on a particular date shall be
deemed to have been made on such date if actually made on such date or as soon
thereafter as practicable. No payments or other distributions of property shall
be made on account of any Claim or portion thereof unless and until such Claim
or portion thereof is Allowed.
6.2 DISTRIBUTION OF NEW COMMON STOCK. The Reorganized Debtor shall
distribute all of the New Common Stock to be distributed under the Plan. The
initial distribution of New Common Stock on account of Allowed Claims shall be
on the Effective Date or as soon thereafter as practicable. The Reorganized
Debtor may employ or contract with other entities to assist in or perform the
distribution of New Common Stock. On each Quarterly Surplus Distribution Date,
the Reorganized Debtor shall distribute to holders of Allowed Class 6 and Class
7 Claims, in accordance with the terms of the Plan, all shares in the Class 6
Stock Reserve Surplus Account and the Class 7 Stock Reserve Surplus Account,
PROVIDED HOWEVER, that if, in the Reorganized Debtor's judgment, the aggregate
value of the shares remaining in the Class 6 Stock Reserve Surplus Account or
the Class 7 Stock Reserve Surplus Account is less than $xxx,xxx, the Reorganized
Debtor may elect to hold such shares and distribute them on the next Quarterly
Surplus Distribution Date. All distributions on account of Class 6 Claims shall
be made by the Reorganized Debtor to the Indenture Trustee. The Reorganized
Debtor shall pay all reasonable fees and expenses of the Indenture Trustee
and/or the Depository Trust Corporation or Cede & Co. in acting as distribution
agent as and when such fees and expenses become due without further order of the
Bankruptcy Court.
To the extent that a Class 6 Claim is a Disputed or undetermined Claim on
the Effective Date, the distribution of New Common Stock allocable to the
Disputed or undetermined portion of such Claim shall be deposited in the Class 6
Stock Reserve Account. To the extent that a Class 7 Claim
DEBTORS' JOINT PLAN OF REORGANIZATION Page 16
<PAGE>
is a Disputed or undetermined Claim on the Effective Date, the distribution of
New Common Stock allocable to the Disputed or undetermined portion of such Claim
shall be deposited in the Class 7 Stock Reserve Account.
To the extent that a Class 6 or Class 7 Claim is Allowed after the
Effective Date, the holder thereof shall be entitled to receive the New Common
Stock reserved with respect to the Allowed amount of such Claim (including
Shares representing distributions of Debtor's shares from the Class 6 Stock
Reserve Surplus Account or the Class 7 Stock Reserve Surplus Account).
6.3 DISTRIBUTIONS BY INDENTURE TRUSTEE.
Subject to any liens it may assert under the Indenture for the
recovery of expenses, and subject to Section 6.4 below, the Indenture Trustee
shall distribute to the record Noteholders, as appearing on the books and
records of the Indenture Trustee on the Distribution Date, all cash and New
Common Stock received by the Indenture Trustee under the Plan. In the event a
record Noteholder is a depository or custodian for legal or beneficial owners of
the Notes (such party being a "Custodian") and is unwilling to receive
distributions on behalf of such owners of the Notes then the Indenture Trustee
shall obtain from such Custodian a list of the parties for whom, as of the
Distribution Date, it serves as custodian and/ depository and (i) the Indenture
Trustee shall directly distribute to such owners of Notes their Pro Rata share
of Cash received by the Indenture Trustee on Account of Class 2 Claims (subject
to the lien of the Indenture Trustee) and (ii) the Indenture Trustee shall
furnish to the Debtors such information as the Indenture Trustee has or may
reasonably obtain that will permit the Debtors to issue New Common Stock to the
owners of the Notes as appearing in the records of the Custodian, certificates
for which the Debtors will forward directly to the owners. As of the close of
business on the Distribution Date, the transfer ledgers with respect to the
Senior Notes shall be closed and the Debtors, the Reorganized Debtor, and the
Indenture Trustee shall have no obligation to recognize any transfer of the
Senior Notes occurring thereafter.
6.4 SURRENDER AND CANCELLATION OF OLD SECURITIES.
As a condition to receiving the New Securities distributable under
the Plan, the record holders of Senior Notes shall surrender their Senior Notes,
if held in certificate form, to the Indenture Trustee. When a holder surrenders
its Senior Notes to the Trustee, the Indenture Trustee shall hold the instrument
in "book entry only" until such instruments are canceled. Any holder of Senior
Notes whose instrument has been lost, stolen, mutilated or destroyed shall, in
lieu of surrendering such instrument, deliver to the Indenture Trustee: (a)
evidence satisfactory to the Indenture Trustee of the loss, theft, mutilation or
destruction of such instrument, and (b) such security or indemnity that may be
reasonably required by the Indenture Trustee to hold the Indenture Trustee
harmless with respect to any such representation of the holder. Upon compliance
with the preceding sentence, such holder shall, for all purposes under the Plan,
be deemed to have surrendered such instrument. Any holder of a Senior Note which
has not surrendered or have been deemed to surrender its Senior Notes within two
years after the Effective Date, shall have its Claim as a holder of Senior Notes
disallowed, shall receive no distribution on account of its Claim as a holder of
Senior Notes, and shall be forever barred from asserting any Claim on account of
its Senior Notes. Any New Common Stock issued and held for distribution on
account of such disallowed claims of holders of Senior Notes shall be returned
to the Reorganized Debtor and shall be deposited in the Stock Reserve Surplus
Account.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 17
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As of the Effective Date, all Senior Notes shall represent only the
right to participate in the distributions provided in the Plan on account of
such Senior Notes.
6.5 DISPUTED CLAIMS. Notwithstanding any other provisions of the Plan, no
payments or distributions shall be made on account of any Disputed Claim until
such Claim becomes an Allowed Claim, and then only to the extent that it becomes
an Allowed Claim.
6.6 MANNER OF PAYMENT UNDER THE PLAN. Cash payments made pursuant to the
Plan shall be in U.S. dollars by checks drawn on a domestic bank selected by the
Reorganized Debtor, or by wire transfer from a domestic bank, at Reorganized
Debtor's option, except that payments made to foreign trade creditors holding
Allowed Claims may be paid, at the option of Reorganized Debtor in such funds
and by such means as are necessary or customary in a particular foreign
jurisdiction. All distributions of Cash on account of Class 2 Claims shall be
made to the Indenture Trustee. Upon receipt of such Cash, the Indenture Trustee
shall distribute the cash as provided in Section 6.3.
6.7 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED
DISTRIBUTIONS.
(a) DELIVERY OF DISTRIBUTIONS IN GENERAL. Except as provided below
in Section 6.9(b) for holders of undeliverable distributions, distributions to
holders of Allowed Claims shall be distributed by mail as follows: (a) except in
the case of the holder of a Senior Note, (1) at the addresses set forth on the
respective proofs of claim filed by such holders; (2) at the addresses set forth
in any written notices of address changes delivered to the Reorganized Debtor
after the date of any related proof of claim; or (3) at the address reflected on
the Schedule of Assets and Liabilities Filed by the Debtors if no proof of claim
or proof of interest is Filed and the Reorganized Debtor have not received a
written notice of a change of address; and (b) in the case of the holder of the
Senior Notes, as provided in Sections 6.3 and 6.4 above.
(b) UNDELIVERABLE DISTRIBUTIONS.
(i) HOLDING AND INVESTMENT OF UNDELIVERABLE PROPERTY. If the
distribution to the holder of any Claim other than the holder of Senior Notes is
returned to the Reorganized Debtor as undeliverable, no further distribution
shall be made to such holder unless and until the Reorganized Debtor is notified
in writing of such holder's then current address. Subject to Section 7.8(b)(ii),
undeliverable distributions shall remain in the possession of the Reorganized
Debtor pursuant to this Section until such times as a distribution becomes
deliverable.
Unclaimed Cash (including interest, dividends and other
consideration, if any, distributed on or received for undeliverable New Common
Stock) shall be held in trust in a segregated bank account in the name of the
Reorganized Debtor, for the benefit of the potential claimants of such funds,
and shall be accounted for separately. Undeliverable New Common Stock shall be
held in trust for the benefit of the potential claimants of such securities by
the Reorganized Debtor in a number of shares sufficient to provide for the
unclaimed amounts of such securities, and shall be accounted for separately.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 18
<PAGE>
(ii) DISTRIBUTION OF UNDELIVERABLE PROPERTY AFTER IT BECOMES
DELIVERABLE AND FAILURE TO CLAIM UNDELIVERABLE PROPERTY. Any holder of an
Allowed Claim other than a holder of a Senior Note who does not assert a claim
for an undeliverable distribution held by the Reorganized Debtor within one (1)
year after the Effective Date shall no longer have any claim to or interest in
such undeliverable distribution, and shall be forever barred from receiving any
distributions under this Plan. In such cases, any New Common Stock shall be
deposited in the Stock Reserve Surplus Account.
6.8 DE MINIMIS DISTRIBUTIONS. No Cash payment of less than twenty-five
dollars ($25.00) shall be made to any holder on account of an Allowed Claim
unless a request therefor is made in writing to the Reorganized Debtor.
6.9 FAILURE TO NEGOTIATE CHECKS. Checks issued in respect of distributions
under the Plan shall be null and void if not negotiated within 60 days after the
date of issuance. Any amounts returned to the Reorganized Debtor in respect of
such checks shall be held in reserve by the Reorganized Debtor. Requests for
reissuance of any such check may be made directly to the Reorganized Debtor by
the holder of the Allowed Claim with respect to which such check originally was
issued. Any claim in respect of such voided check is required to be made before
the second anniversary of the Effective Date. All Claims in respect of void
checks and the underlying distributions shall be discharged and forever barred
from assertion against the Reorganized Debtor and their property.
6.10 COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan, to the
extent applicable, the Reorganized Debtor shall comply with all withholding and
reporting requirements imposed on it by any governmental unit, and all
distributions pursuant to the Plan shall be subject to such withholding and
reporting requirements.
6.11 SETOFFS. Unless otherwise provided in a Final Order or in this Plan,
the Debtors may, but shall not be required to, set off against any Claim and the
payments to be made pursuant to the Plan in respect of such Claim, any claims of
any nature whatsoever the Debtors may have against the holder thereof or its
predecessor, but neither the failure to do so nor the allowance of any Claim
hereunder shall constitute a waiver or release by the Debtors of any such Claims
the Debtors may have against such holder or its predecessor.
6.12 FRACTIONAL INTERESTS. The calculation of the percentage distribution
of New Common Stock to be made to holders of certain Allowed Claims as provided
elsewhere in this Plan may mathematically entitle the holder of such an Allowed
Claim to a fractional interest in such New Common Stock. The number of shares of
New Common Stock to be received by a holder of an Allowed Claim shall be rounded
to the next lower whole number of shares. The total number of shares of New
Common Stock to be distributed to a class of Claims shall be adjusted as
necessary to account for the rounding provided for in this Section. No
consideration shall be provided in lieu of the fractional shares that are
rounded down and not issued.
For purposes of applying this Section, the holders of Allowed Claims under
or evidenced by Senior Notes shall, in the case of Senior Notes held in street
name, mean the beneficial holders thereof as of the Distribution Date.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 19
<PAGE>
ARTICLE 7
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
7.1 REJECTION OF ALL EXECUTORY CONTRACTS AND LEASES NOT ASSUMED. The Plan
constitutes and incorporates a motion by the Debtors to reject, as of the
Confirmation Date, all pre- petition executory contracts and unexpired leases to
which the Debtors are a party, except for any executory contract or unexpired
lease that (i) has been assumed or rejected pursuant to a Final Order, (ii) is
the subject of a pending motion for authority to assume the contract or lease
Filed by the Debtors prior to the Confirmation Date, or (iii) is identified in
the Plan Supplement as an executory contract or lease that Debtors intend to
assume. Assumption by any of the Debtors shall constitute assumption by the
Reorganized Debtor as the successor to each of the Debtors. The filing of the
Plan Supplement shall constitute a motion by Debtors to assume, effective on the
Effective Date, the executory contracts and leases identified therein. With
respect to leases and executory contracts not previously assumed, the Plan
Supplement shall set forth a cure amount in accordance with section 365(b)(1) of
the Bankruptcy Code for each unexpired lease and executory contract to be
assumed. Unless the non-debtor parties timely object to such amount, the
confirmation of the Plan shall constitute consent to the approval of the
assumption of such executory contracts and unexpired leases and a determination
that such cure amount is sufficient under section 365(b)(1) of the Bankruptcy
Code.
7.2 CURE PAYMENTS. Any monetary defaults under each executory contract and
unexpired lease to be assumed under the Plan in the amount either set forth in
the Plan Supplement, motion to assume, or Final Order shall be satisfied,
pursuant to section 365(b)(1) of the Bankruptcy Code, either: (1) by payment by
the Reorganized Debtor of the default amount in Cash on the Effective Date, or
(2) on such other terms as agreed to by the Reorganized Debtor and the
non-debtor parties to such executory contract or unexpired lease. In the event
of a dispute regarding (i) the amount of any cure payments, (ii) the ability of
the Reorganized Debtor to provide adequate assurance of future performance under
the contract or lease to be assumed, or (iii) any other matter pertaining to
assumption, the cure payments required by section 365(b)(1) of the Bankruptcy
Code shall be made by the Reorganized Debtor following the entry of a Final
Order resolving the dispute and approving assumption.
7.3 BAR DATE FOR FILING OF REJECTION CLAIMS. Any Claim for damages arising
from the rejection under this Plan of an executory contract or unexpired lease
must be Filed within thirty (30) days after the mailing of notice of
Confirmation or be forever barred and unenforceable against the Debtors, the
Estates, any of their affiliates and their properties and barred from receiving
any distribution under this Plan.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 20
<PAGE>
ARTICLE 8
MEANS FOR EXECUTION AND IMPLEMENTATION
OF THE PLAN
8.1 EXIT FINANCING. On the Effective Date, the Reorganized Debtor shall
enter into a loan agreement providing available funds in a sufficient amount,
when combined with the Debtors' available resources, to fund the Reorganized
Debtor's obligations under the Plan and to meet its ongoing business needs (the
"Exit Financing"). Simultaneously with the closing of the Exit Financing
transaction, the Reorganized Debtor will satisfy the Allowed Secured Claims of
the Bank Group from Cash on hand and a portion of the proceeds of the Exit
Financing, and the Bank Group shall, at the option of the Reorganized Debtor,
either release its liens on the property of the Reorganized Debtor or assign the
liens as directed by the Reorganized Debtor. The exit lender shall be granted a
lien on assets of the Reorganized Debtor.
8.2 RIGHTS OFFERING. The Debtors shall seek to obtain Securities and
Exchange Commission approval of the Rights Offering as soon as possible after
the completion of the audited 1999 financial statements for Kitty Hawk. The
Reorganized Debtor will then distribute to each record holder of Old Common
Stock on the Record Date one subscription right for each 3.427 shares of Old
Common Stock they own ("Rights"). The Reorganized Debtor will round down to the
nearest whole number, the number of Rights to be distributed to each holder of
Old Common Stock.
A shareholder may request that the subscription agent for the Rights
Offering divide a Rights certificate into transferable parts, for instance, if a
shareholder is the record holder for a number of beneficial holders of the New
Common Stock. However, the subscription agent will not divide a Rights
certificate so that a shareholder would receive any fractional Rights.
A shareholder may exercise a subscription privilege at any time before the
Subscription Deadline. The Reorganized Debtor may, in its sole discretion,
extend the time for exercising the Rights. If a shareholder does not exercise
Rights before the Subscription Deadline, the unexercised Rights will be null and
void. The Reorganized Debtor will not be obligated to honor an exercise of
Rights if the subscription agent receives the documents relating to the exercise
after the Rights Offering expires, regardless of when a shareholder transmitted
the documents, except when a shareholder has timely transmitted the documents
under the guaranteed delivery procedures. The Reorganized Debtor may extend the
expiration date by giving oral or written notice to the subscription agent on or
before the scheduled expiration date. If the Reorganized Debtor elects to extend
the expiration of the Rights Offering, it will issue a press release announcing
the extension no later than 9:00 a.m., New York City time, on the next business
day after the most recently announced expiration date.
The Rights entitle a shareholder to the basic subscription privilege and
the over-subscription privilege.
BASIC SUBSCRIPTION PRIVILEGE. With the basic subscription privilege, a
shareholder may purchase one share of the New Common Stock per Right, upon
delivery of the required documents and payment of the subscription price (i.e.
the amount per share established by the Bankruptcy
DEBTORS' JOINT PLAN OF REORGANIZATION Page 21
<PAGE>
Court). A shareholder is not required to exercise all Rights unless the
shareholder wishes to purchase shares under the over-subscription privilege. The
Reorganized Debtor will deliver certificates representing the shares purchased
with the basic subscription privilege as soon as practicable after the Rights
Offering has expired. Over-Subscription Privilege. In addition to the basic
subscription privilege, a shareholder may subscribe for additional shares of the
New Common Stock upon delivery of the required documents and payment of the
subscription price, before the expiration of the Rights Offering. A shareholder
may only exercise the over-subscription privilege if the shareholder exercised
the basic subscription privilege in full and other holders of Rights do not
exercise their basic subscription privileges beyond the 5 million shares.
PRO RATA ALLOCATION. If there are not enough shares to satisfy all
subscriptions made under the over-subscription privilege, the Reorganized Debtor
will allocate the remaining shares pro rata, after eliminating all fractional
shares, among those over-subscribing Rights holders. For purposes of the Rights
Offering, "pro rata" means in proportion to the number of shares of the New
Common Stock which the Rights holders have purchased by exercising their basic
subscription privileges. If there is a pro rata distribution of the remaining
shares and a shareholder receives a pro rata allocation of a greater number of
shares than subscribed for under the over-subscription privilege, then the
Reorganized Debtor will allocate to the shareholder only the number of shares
for which the shareholder subscribed. The Reorganized Debtor will allocate the
remaining shares among all other Rights holders exercising their
over-subscription privileges.
The Reorganized Debtor will identify the subscription agent for the Rights
Offering in the Plan Supplement.
8.3 MERGER OF CORPORATE ENTITIES. [In one way or another, the plan will
provide that the Debtors are merged and that there is only one surviving entity
which will be a Delaware Corporation whose name is Kitty Hawk Aircargo, Inc. The
Debtors are investigating the best way to achieve this result.]
8.4 BOARD OF DIRECTORS OF THE REORGANIZED DEBTOR. On the Effective Date,
the existing directors of Kitty Hawk, Inc. shall be deemed removed from office
pursuant to the operation of the Confirmation Order. On the Effective Date, the
Reorganized Debtor will amend its bylaws to provide that the board of directors
of the Reorganized Debtor shall be comprised of seven (7) members, five (5) of
which shall be selected by the Noteholders and two (2) of which shall be
selected by the Debtor. All such selections shall be by written designation
filed as a Plan Document by the selecting Person. Any director not so selected
on a timely basis shall be designated by the Debtor on the Confirmation Date,
subject to approval of the Court. Such amended bylaws shall provide that all
such directors shall serve for a one-year term and shall not be subject to
removal other than for cause during the first year following the Effective Date.
Such amended bylaws shall provide that thereafter directors shall be elected at
annual meetings of the shareholders of the Reorganized Debtor in accordance with
the bylaws of the Reorganized Debtor and applicable law.
8.5 CANCELLATION OF OLD SECURITIES. On the Effective Date, all Old
Securities shall be terminated and canceled, and the indenture or statements of
resolution governing such Old Securities shall be rendered void. Notwithstanding
the foregoing, such termination will not impair the rights and duties under such
indenture as between Indenture Trustee and the beneficiaries of the trust
DEBTORS' JOINT PLAN OF REORGANIZATION Page 22
<PAGE>
created thereby including, but not limited to, the right of the Indenture
Trustee to receive payment of its fees and expenses, to the extent not paid by
the Company, from amounts distributable to holders of Senior Notes.
8.6 AUTHORIZATION AND ISSUANCE OF NEW COMMON STOCK. The Confirmation Order
shall provide for the authorization of 65 million shares of stock in the
Reorganized Debtor, of which 55 million shall be the New Common Stock (the
issued and outstanding shares of the Reorganized Debtor). The remaining 10
million authorized shares shall be reserved and shall not be distributed without
action by the Board of Directors selected in the manner described in Section 8.4
of this Plan.
8.7 REGISTRATION EXEMPTION FOR DEBTOR'S NEW COMMON STOCK. The Confirmation
Order shall provide that the distribution of the New Common Stock to holders of
Allowed Claims pursuant to the Plan and the Amended Certificate of Incorporation
shall be exempt from any and all federal, state and local laws requiring the
registration of such security, to the extent provided by section 1145 of the
Bankruptcy Code.
8.8 CHARTER AND BY-LAWS. The certificate of incorporation of the
Reorganized Debtor shall read substantially as set forth in the Amended
Certificate of Incorporation. The by-laws of the Reorganized Debtor shall read
substantially as set forth in the Amended By-Laws.
8.9 CORPORATE ACTION. Upon entry of the Confirmation Order, the following
shall be and be deemed authorized and approved in all respects: (i) the filing
by the Reorganized Debtor of the Amended Certificate of Incorporation, (ii) the
Amended By-Laws, (iii) the mergers contemplated by Section 8.3 hereof, and (iv)
the issuance of the New Common Stock. On the Effective Date, or as soon
thereafter as is practicable, the Reorganized Kitty Hawk shall file with the
Secretary of State of the State of Delaware, in accordance with applicable state
law, the Amended Certificate of Incorporation which shall conform to the
provisions of the Plan and prohibit the issuance of non- voting equity
securities. On the Effective Date, the matters provided under the Plan involving
the capital and corporate structures and governance of the Reorganized Kitty
Hawk, including the mergers effectuated pursuant to Section 8.3 hereof, shall be
deemed to have occurred and shall be in effect from and after the Effective Date
pursuant to applicable state laws without any requirement of further action by
the stockholders or directors of the Debtors or the Reorganized Kitty Hawk. On
the Effective Date, the Reorganized Debtor shall be authorized and directed to
take all necessary and appropriate actions to effectuate the transactions
contemplated by the Plan and the Disclosure Statement in the name of and on
behalf of the Reorganized Kitty Hawk.
8.10 RELEASE OF FRAUDULENT CONVEYANCE CLAIMS. On the Effective Date, in
consideration of the compromise with the holders of the Senior Notes
incorporated into this Plan and more fully described in Section IV, 4, b (2) of
the Disclosure Statement, which settlement results in a greater distribution to
holders of Allowed Unsecured Claims that are not Noteholder Claims, Reorganized
Kitty Hawk, on its own behalf and as representative of the Debtors' Estates,
releases the Indenture Trustee and the Noteholders, their predecessors and
successors in interest, from all claims, obligations, suits, judgments, damages,
rights, causes of action and liabilities whatsoever, whether known or unknown,
foreseen or unforeseen, in law or in equity, based in whole or in part on an
allegation that any of the Debtors' obligations on the Senior Notes, including
any guaranty liabilities, are avoidable or unenforceable.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 23
<PAGE>
8.11 OTHER RELEASES BY DEBTORS. (a) On the Effective Date, the Reorganized
Debtor, on its own behalf and as representative of the Debtors' Estates, in
consideration of services rendered in the Reorganization Case and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, releases unconditionally, and is hereby deemed to release
unconditionally, each of the Debtors' present and former officers and directors,
and the entities that elected such directors to the extent they are or may be
liable for the actions or inactions of such directors, from any and all claims,
obligations, suits, judgments, damages, rights, causes of action and liabilities
whatsoever (including, without limitation, those arising under the Code),
whether known or unknown, foreseen or unforeseen, existing or hereafter arising,
in law, equity or otherwise, based in whole or in part on any act, omission,
transaction, event or other occurrence taking place before, on or after the
Petition Date up to the Effective Date, in any way relating to the Debtors
(before, on or after the Petition Date), the Reorganization Case, or the Plan;
PROVIDED, HOWEVER, that the foregoing release shall not apply to any action or
omission that constitutes actual fraud or criminal behavior and shall not apply
to any claims or causes of action against Conrad Kalitta, the Kalitta Companies
or any entity owned or controlled by either.
8.12 INDEMNIFICATION OBLIGATIONS. The obligations of the Debtors to
indemnify their present directors and officers pursuant to charters, by-laws,
and/or applicable state law shall be deemed to be, and shall be treated as
though they are, executory contracts assumed under the Plan, and such
obligations shall survive confirmation of the Plan and remain unaffected
thereby, irrespective of whether indemnification is owed in connection with an
occurrence that occurred prior to or after the Petition Date.
8.13 PRESERVATION OF RIGHTS OF ACTION. Except as otherwise provided in the
Plan, or in any contract, instrument, release, or other agreement entered into
in connection with the Plan, in accordance with section 1123(b) of the
Bankruptcy Code, Reorganized Kitty Hawk shall retain and may enforce any claims,
rights and causes of action that the Debtors or the Estates may hold against any
entity, including, without limitation, any claims, rights or causes of action
arising under sections 544 through 551 or other sections of the Bankruptcy Code
or any similar provisions of state law, or any other statute or legal theory.
The Reorganized Debtor shall retain and may enforce the rights of each of the
Debtors to object to Claims on any basis, including 11 U.S.C. ss. 502(d). The
Reorganized Debtor may pursue those rights of action, as appropriate, in
accordance with what is in the best interests of the Reorganized Debtor.
8.14 OBJECTIONS TO CLAIMS. Except as otherwise provided for with respect
to applications of professionals for compensation and reimbursement of expenses
under Section 3.1(c)(ii) hereof, or as otherwise ordered by the Bankruptcy Court
after notice and a hearing, objections to Claims, including Administrative
Claims, shall be Filed and served upon the holder of such Claim or
Administrative Claim not later than the later of (a) one hundred twenty (120)
days after the Effective Date, and (b) one hundred twenty (120) days after a
proof of claim or request for payment of such Administrative Claim is Filed,
unless this period is extended by the Court. Such extension may occur ex parte.
After the Effective Date, the Reorganized Debtor shall have the exclusive right
to object to Claims.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 24
<PAGE>
[8.15 RETIREE BENEFITS. On or after the Effective Date, pursuant to
section 1129(a)(13) of the Bankruptcy Code, the Company will continue to pay all
retiree benefits, as that term is defined in section 1114 of the Bankruptcy
Code, at the level established pursuant to subsection (e)(1)(B) or (g) of
section 1114, at any time prior to confirmation of the Plan, for the duration of
the period the Debtors have obligated themselves to provide such benefits.]
8.16 EXEMPTION FROM STAMP AND SIMILAR TAXES. The issuance and transfer of
Debtors' New Common Stock as provided in this Plan shall not be taxed under any
law imposing a stamp tax or similar tax in accordance with 11 U.S.C.ss. 1146(c).
ARTICLE 9
CONDITIONS TO EFFECTIVENESS OF THE PLAN
9.1 CONDITIONS TO EFFECTIVENESS. Except as expressly waived by the
Debtors, the following conditions must occur and be satisfied on or before the
Effective Date:
(a) the Confirmation Order shall have been signed by the Court and
duly entered on the docket for the Reorganization Cases by the clerk of the
Court in form and substance acceptable to the Debtors;
(b) the Confirmation Order shall have become an Effective
Confirmation Order and not have been stayed, modified, reversed or amended; and
(c) the Debtors have secured exit financing in a sufficient amount,
when combined with the Debtors' available resources, to fund the Reorganized
Debtor's obligations under the Plan and to meet its ongoing business needs.
9.2 WAIVER OF CONDITIONS. The Debtors and any co-Plan proponent may waive
any condition set forth in this Article 9 at any time, without notice, without
leave of or order of the Court, and without any formal action other than
proceeding to consummate the Plan.
9.3 NO REQUIREMENT OF FINAL ORDER. So long as no stay is in effect, the
Debtors' Effective Date of the Plan will occur notwithstanding the pendency of
an appeal of the Confirmation Order or any Order related thereto. In that event,
the Debtors or Reorganized Debtor may seek dismissal of any such appeal as moot
following the Effective Date of the Plan.
ARTICLE 10
EFFECTS OF PLAN CONFIRMATION
10.1 BINDING EFFECT. The Plan shall be binding upon all present and former
holders of Claims and Equity Interests, and their respective successors and
assigns, including the Reorganized Debtors.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 25
<PAGE>
10.2 MORATORIUM, INJUNCTION AND LIMITATION OF RECOURSE FOR PAYMENT. Except
as otherwise provided in the Plan or by subsequent order of the Bankruptcy
Court, the Confirmation Order shall provide, among other things, that from and
after the Confirmation Date, all Persons or entities who have held, hold, or may
hold Claims against or Equity Interests in the Debtors are permanently enjoined
from taking any of the following actions against the Estates, the Reorganized
Debtors, the Creditors' Committee, the Indenture Trustee, and the Unofficial
Noteholders' Committee or any of their property on account of any such Claims or
Equity Interests: (i) commencing or continuing, in any manner or in any place,
any action or other proceeding; (ii) enforcing, attaching, collecting or
recovering in any manner any judgment, award, decree or order; (iii) creating,
perfecting or enforcing any lien or encumbrance; (iv) asserting a setoff, right
of subrogation or recoupment of any kind against any debt, liability or
obligation due to the Debtor other than through a proof of claim or adversary
proceeding; and (v) commencing or continuing, in any manner or in any place, any
action that does not comply with or is inconsistent with the provisions of the
Plan; PROVIDED, HOWEVER, that nothing contained herein shall preclude such
persons from exercising their rights pursuant to and consistent with the terms
of this Plan.
10.3 EXCULPATION AND LIMITATION OF LIABILITY.
None of the Indenture Trustee and any professional Persons retained by it;
the Unofficial Noteholders' Committee, its members and any professional Persons
retained by it; the Debtors and the professional Persons employed by the
Debtors; any of their affiliates nor any of their officers, directors, partners,
associates, employees, members of agents (collectively, the "Exculpated
Persons"), shall have or incur any liability to any person for any act taken or
omission made in good faith in connection with or related to the Bankruptcy
Cases or actions taken therein, including negotiating, formulating ,
implementing, confirming or consummating the Plan, the Disclosure Statement, or
any contract, instrument, or other agreement or document created in connection
with the Plan. The Exculpated Persons shall have no liability to any Creditors
or Equity Security Holders for actions taken under the Plan, in connection
therewith or with respect thereto in good faith, including, without limitation,
failure to obtain Confirmation of the Plan or to satisfy any condition or
condition, or refusal to waive any condition or conditions, precedent to
Confirmation or to the occurrence of the Effective Date. Further, the Exculpated
Persons will not have or incur any liability to any holder of a Claim, holder of
an Interest, or party-in-interest herein or any other Person for any act or
omission in connection with or arising out of their administration of the Plan
or the property to be distributed under the Plan, except for gross negligence or
willful misconduct as finally determined by the Bankruptcy Court, and in all
respect such person will be entitled to rely upon the advice of counsel with
respect to their duties and responsibilities under the Plan.
10.4 REVESTING. On the Effective Date, the Reorganized Debtor will be
vested with all the property of the respective estates of the Debtors free and
clear of all Claims and other interests of creditors and equity holders, except
as provided herein; provided, however, that the Debtors shall continue as
debtors in possession under the Bankruptcy Code until the Effective Date, and,
thereafter, the Reorganized Debtor may conduct its business free of any
restrictions imposed by the Bankruptcy Code or the Court.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 26
<PAGE>
10.5 OTHER DOCUMENTS AND ACTIONS. The Debtors, the Debtors-In-Possession,
and Reorganized Kitty Hawk may execute such documents and take such other action
as is necessary to effectuate the transactions provided for in the Plan.
10.6 POST-CONSUMMATION EFFECT OF EVIDENCES OF CLAIMS OR INTERESTS. Senior
Notes, Old Common Stock certificates, and other evidences of Claims against or
Interests in the Debtors shall, effective upon the Effective Date, represent
only the right to participate in the distributions contemplated by the Plan.
10.7 TERM OF INJUNCTIONS OR STAYS. Unless otherwise provided, all
injunctions or stays provided for in the Reorganization Cases pursuant to
sections 105 or 362 of the Bankruptcy Code or otherwise and in effect on the
Confirmation Date shall remain in full force and effect until the Effective
Date.
ARTICLE 11
CONFIRMABILITY OF PLAN AND CRAMDOWN
The Debtors request Confirmation under section 1129(b) of the Bankruptcy
Code if any impaired class does not accept the Plan pursuant to section 1126 of
the Bankruptcy Code. In that event, the Debtor reserves the right to modify the
Plan to the extent, if any, that Confirmation of the Plan under section 1129(b)
of the Bankruptcy Code requires modification.
ARTICLE 12
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order or the occurrence of
the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the
Reorganization Case after the Effective Date as is legally permissible,
including, without limitation, jurisdiction to:
1. Allow, disallow, determine, liquidate, classify or establish the
priority or secured or unsecured status of or estimate any Claim or Interest,
including, without limitation, the resolution of any request for payment of any
Administrative Claim or Indenture Trustee Expenses and the resolution of any and
all objections to the allowance or priority of Claims or Interests;
2. Grant or deny any and all applications for allowance of
compensation or reimbursement of expenses authorized pursuant to the Bankruptcy
Code or the Plan, for periods ending on or before the Effective Date;
3. Resolve any motions pending on the Effective Date to assume,
assume and assign or reject any executory contract or unexpired lease to which
the Debtors are parties or with respect to which the Debtors may be liable and
to hear, determine and, if necessary, liquidate, any and all Claims arising
therefrom;
DEBTORS' JOINT PLAN OF REORGANIZATION Page 27
<PAGE>
4. Ensure that distributions to holders of Allowed Claims and
Allowed Interests are accomplished pursuant to the provisions of the Plan;
5. Decide or resolve any and all applications, motions, adversary
proceedings, contested or litigated matters and any other matters or grant or
deny any applications involving the Debtors that may be pending on the Effective
Date or that may be brought by the Debtors after the Effective Date, including
Claims arising under Chapter 5 of the Bankruptcy Code;
6. Enter such Orders as may be necessary or appropriate to implement
or consummate the provisions of the Plan and all contracts, instruments,
releases, and other agreements or documents created in connection with the Plan
or the Prospectus/Disclosure Statement;
7. Resolve any and all controversies, suits or issues that may arise
in connection with the consummation, interpretation or enforcement of the Plan
or any entity's obligations incurred in connection with the Plan;
8. Modify the Plan before or after the Effective Date pursuant to
section 1127 of the Bankruptcy Code, or to modify the Prospectus/Disclosure
Statement or any contract, instrument, release, or other agreement or document
created in connection with the Plan or the Prospectus/Disclosure Statement; or
remedy any defect or omission or reconcile any inconsistency in any Bankruptcy
Court Order, the Plan, the Prospectus/Disclosure Statement or any contract,
instrument, release, or other agreement or document created in connection with
the Plan or the Prospectus/Disclosure Statement, in such manner as may be
necessary or appropriate to consummate the Plan, to the extent authorized by the
Bankruptcy Code;
9. Issue injunctions, enter and implement other orders or take such
other actions as may be necessary or appropriate to restrain interference by any
entity with consummation or enforcement of the Plan;
10. Enter and implement such orders as are necessary or appropriate
if the Confirmation Order is for any reason modified, stayed, reversed, revoked
or vacated;
11. To hear and determine such other matters as may be provided for
in the Confirmation Order confirming this Plan or as may be permitted under the
Bankruptcy Code and to issue such orders in aid of execution of the Plan to the
extent authorized by section 1142 of the Bankruptcy Code, including using
Bankruptcy Rule of Procedure 7070; and
12. Determine any other matters that may arise in connection with or
relate to the Plan, the Acquisition Agreement, the Prospectus/Disclosure
Statement, the Confirmation Order or any contract, instrument, release, or other
agreement or document created in connection with the Plan or the
Prospectus/Disclosure Statement;
13. To enter orders approving the sale of the Wide Body Collateral
and the Engines and confirming that the purchaser receives title free and clear
of all liens, claims and other
DEBTORS' JOINT PLAN OF REORGANIZATION Page 28
<PAGE>
encumbrances that existed prior to the entry of the Confirmation Order and the
occurrence of the Effective Date including adjudicating the value of the Wide
Body Collateral and Engines.
14. Enter an order concluding the Reorganization Case.
If the Bankruptcy Court abstains from exercising jurisdiction or is otherwise
without jurisdiction over any matter arising out of the Reorganization Case,
including, without limitation, the matters set forth in this Article, this
Article shall have no effect upon and shall not control, prohibit, or limit the
exercise of jurisdiction by any other court having competent jurisdiction with
respect to such matter.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 FRACTIONAL DOLLARS. Any other provision of the Plan notwithstanding,
no payments of fractions of dollars will be made to any holder of an Allowed
Claim. Whenever any payment of a fraction of a dollar to any holder of an
Allowed Claim would otherwise be called for, the actual payment made will
reflect a rounding of such fraction to the nearest whole dollar (up or down).
13.2 MODIFICATION OF PLAN. The Debtors reserve the right, in accordance
with the Bankruptcy Code, to amend or modify the Plan prior to the entry of the
Confirmation Order. After the entry of the Confirmation Order, the Reorganized
Debtor may, upon order of the Court, amend or modify the Plan in accordance with
section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan.
13.3 WITHDRAWAL OF PLAN. The Debtors reserve the right, at any time prior
to entry of the Confirmation Order, to revoke or withdraw the Plan. If the
Debtors revoke or withdraw the Plan under this Section 13.3 or if the Effective
Date does not occur, then the Plan shall be deemed null and void. In that event,
nothing contained in the Plan shall be deemed to constitute a waiver or release
of any Claims by or against the Debtors or any other person, or to prejudice in
any manner the rights of the Debtors or any other person in any further
proceedings involving the Debtors.
13.4 GOVERNING LAW. Except to the extent the Bankruptcy Code, the
Bankruptcy Rules or the Delaware General Corporation Law are applicable, the
rights and obligations arising under the Plan shall be governed by, and
construed and enforced in accordance with the laws of the State of Texas,
without giving effect to the principles of conflicts of law thereof.
13.5 TIME. In computing any period of time prescribed or allowed by this
Plan, the day of the act, event, or default from which the designated period of
time begins to run shall not be included. The last day of the period so computed
shall be included, unless it is not a Business Day or, when the act to be done
is the filing of a paper in court, a day on which weather or other conditions
have made the clerk's office inaccessible, in which event the period runs until
the end of the next day which is not one of the aforementioned days. When the
period of time prescribed or
DEBTORS' JOINT PLAN OF REORGANIZATION Page 29
<PAGE>
allowed is less than eight days, intermediate days that are not Business Days
shall be excluded in the computation.
13.6 PAYMENT DATES. Whenever any payment to be made under the Plan is due
on a day other than a Business Day, such payment will instead be made, without
interest, on the next Business Day.
13.7 HEADINGS. The headings used in this Plan are inserted for convenience
only and neither constitute a portion of the Plan nor in any manner affect the
provisions of the Plan.
13.8 SUCCESSORS AND ASSIGNS. The rights, benefits and obligations of any
entity named or referred to in the Plan shall be binding on, and shall inure to
the benefit of, any heir, executor, administrator, successor or assign of such
entity.
13.9 EXHIBITS. Because the Exhibits to the Plan are voluminous, some of
those Exhibits may not be served with copies of the Plan. Any party in interest
may obtain a copy of such excluded Exhibits by transmitting a written request
for same to the Debtors or any access the Exhibits at the Haynes and Boone
website at www.haynesboone.com/kittyhawk.
13.10 SEVERABILITY OF PLAN PROVISIONS. If prior to Confirmation any term
or provision of the Plan which does not govern the treatment of Claims or
Interests or the conditions of the Effective Date or which is not governed by
the terms of the Acquisition Agreement or documents related thereto, is held by
the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court
shall have the power to alter and interpret such term or provision to make it
valid or enforceable to the maximum extent practicable, consistent with the
original purpose of the term or provision held to be invalid, void, or
unenforceable, and such term or provision shall then be applicable as altered or
interpreted. Notwithstanding any such holding, alteration or interpretation, the
remainder of the terms and provisions of the Plan will remain in full force and
effect and will in no way be affected, impaired, or invalidated by such holding,
alteration, or interpretation. The Confirmation Order shall constitute a
judicial determination and shall provide that each term and provision of the
Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
13.11 NO ADMISSIONS. Notwithstanding anything herein to the contrary,
nothing contained in the Plan shall be deemed as an admission by the Debtors
with respect to any matter set forth herein, including, without limitation,
liability on any Claim or the propriety of any Claims classification.
13.12 CREDITORS' COMMITTEE. The Creditors' Committee shall be dissolved on
the Effective Date and all obligations and responsibilities of the members and
professionals for the Creditors' Committee shall terminate. The Reorganized
Debtor shall be substituted in place of the Creditors' Committee in any
litigation pending upon the Effective Date and, at the Reorganized Debtor's
option, prosecute, dismiss, compromise or dispose of such litigation.
DEBTORS' JOINT PLAN OF REORGANIZATION Page 30
<PAGE>
Dated: _____________________, 2000.
KITTY HAWK, INC. OK TURBINES, INC.
Debtor and Debtor-In-Possession Debtor and Debtor-In-Possession
__________________________________ __________________________________
By: Tilmon J. Reeves By: Tilmon J. Reeves
Its: Chief Executive Officer Its: Chief Executive Officer
KITTY HAWK AIRCARGO, INC. LONGHORN SOLUTIONS, INC.
Debtor and Debtor-In-Possession Debtor and Debtor-In-Possession
__________________________________ __________________________________
By: Tilmon J. Reeves By: Tilmon J. Reeves
Its: Chief Executive Officer Its: Chief Executive Officer
KITTY HAWK CHARTERS, INC. AIRCRAFT LEASING, INC.
Debtor and Debtor-In-Possession Debtor and Debtor-In-Possession
__________________________________ __________________________________
By: Tilmon J. Reeves By: Tilmon J. Reeves
Its: Chief Executive Officer Its: Chief Executive Officer
KITTY HAWK INTERNATIONAL, INC. AMERICAN INTERNATIONAL TRAVEL, INC.
Debtor and Debtor-In-Possession Debtor and Debtor-In-Possession
__________________________________ __________________________________
By: Tilmon J. Reeves By: Tilmon J. Reeves
Its: Chief Executive Officer Its: Chief Executive Officer
KITTY HAWK CARGO, INC. FLIGHT ONE LOGISTICS, INC.
Debtor and Debtor-In-Possession Debtor and Debtor-In-Possession
__________________________________ __________________________________
By: Tilmon J. Reeves By: Tilmon J. Reeves
Its: Chief Executive Officer Its: Chief Executive Officer
DEBTORS' JOINT PLAN OF REORGANIZATION
<PAGE>
Robert D. Albergotti John D. Penn
State Bar No. 00969800 State Bar No. 15752300
Haynes and Boone, LLP Haynes and Boone, LLP
901 Main Street, Suite 3100 201 Main Street, Suite 2200
Dallas, Texas 75202 Fort Worth, Texas 76102
Tel. No. (214) 651-5000 Direct Tel. No. (817) 347-6610
Fax No. (214) 651-5940 Direct Fax No. (817) 348-2300
Sarah B. Foster
State Bar No. 07297500
Haynes and Boone, LLP
600 Congress Ave., Suite 1600
Austin, Texas 78701
Tel. No. (512) 867-8400
Fax No. (512) 867-8470
/s/ JOHN D. PENN
-----------------------------------
Robert D. Albergotti (No. 00969800)
John D. Penn (No. 15752300)
Sarah B. Foster (No. 07297500)
COUNSEL TO THE DEBTORS AND THE DEBTORS-IN-POSSESSION
