EXHIBIT (a)(11)
MEMORANDUM OF UNDERSTANDING
This MEMORANDUM OF UNDERSTANDING is entered into as of March 9, 1999
among the plaintiffs ("Plaintiffs") in the Action (as defined herein), ASA
Holdings, Inc. ("ASA"), the members of ASA's Board of Directors (the "ASA
Board"), and Delta Air Lines, Inc. ("Delta"), by their undersigned attorneys.
Except as otherwise stated in this Memorandum of Understanding, capitalized
terms herein have the meaning given them in the Agreement and Plan of Merger
dated as of February 15, 1999 among ASA, Delta and Delta Sub, Inc. (the "Merger
Agreement").
WHEREAS, on February 25, 1999, Plaintiffs commenced a putative class
action on behalf of the public holders of ASA common stock in the Superior Court
of the State of Georgia, Xxxxxx County (the "Court"), styled Xxxx Xxxxxxxxx, et
al. v. Xxxx X. Xxxxxx, Xxxxxx Xxxxx, Xxxx X. Xxxx, Xxxxxx X. Xxxxx, Xxxxxx X.
Xxxxxxx, Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, ASA Holdings, Inc. and Xxxxx Xxx
Xxxxx, Xxx., Xxx. Xx. 0000XX00000 (the "Action"), relating to the tender offer
by Delta Sub, Inc. for shares of ASA and the subsequent merger of Delta Sub,
Inc. with and into ASA, as set forth in the Merger Agreement (the
"Transaction"); and
WHEREAS, the Action names as defendants ASA, the members of the ASA
Board and Delta (collectively, "Defendants"); and
WHEREAS, the Action seeks declaratory and injunctive relief, monetary
damages and/or rescission with respect to the Transaction based upon the
allegations, inter alia, that the conduct of Delta and the members of the ASA
Board in connection with the Transaction constituted a breach of their fiduciary
duties to ASA and ASA shareholders; and
WHEREAS, Defendants deny that they have committed or have attempted to
commit any violation of law or breach of duty, including breach of any duty to
ASA or ASA shareholders, or have otherwise acted in any improper manner; and
WHEREAS, following the production of certain documents to Plaintiffs'
counsel and negotiations between the parties, counsel for the parties have
reached an agreement in principle providing for the proposed settlement of the
Action on the terms and conditions set forth below (the "Settlement"); and
WHEREAS, the parties believe that the proposed Settlement is in the
best interests of the public shareholders of ASA;
NOW THEREFORE, IT IS HEREBY AGREED IN PRINCIPLE AS FOLLOWS:
1. Principal Terms of Settlement. Subject to the additional conditions,
terms and limitations described herein, as a result of the bringing of the
Action, the parties agree in principle as follows:
a. Subject to the approval of the respective boards of
directors of ASA and Delta, if necessary, the Transaction will be
modified by amending the terms of section 11.04(b) of the Merger
Agreement to eliminate the $5,000,000 Termination Fee payable to Delta
in the event of termination of the Merger Agreement as the result of a
Superior Proposal as provided in section 6.04(c) of the Merger
Agreement.
b. Reasonably promptly following the execution of this
Memorandum of Understanding by the parties, Defendants shall publicly
disclose
the terms of the proposed Settlement in a manner deemed reasonable by
Defendants.
c. Prior to dissemination to ASA shareholders of an
information statement or proxy statement seeking ASA shareholder
approval of the Merger (the "Information Statement"), Defendants shall
provide a draft or drafts of such Information Statement to co-lead
counsel for Plaintiffs for review and comment, and Defendants will give
such comments reasonable consideration in finalizing the Information
Statement. Plaintiffs agree that any drafts of the Information
Statement received by Plaintiffs' counsel hereunder shall be used
solely for the purposes described in this subparagraph and for no other
purpose, and shall be held strictly confidential and shall not be
disclosed by Plaintiffs or Plaintiffs' counsel except to a consultant
or expert assisting Plaintiffs' counsel in connection with the Action.
2. Stipulation of Settlement. The parties to the Action will attempt in
good faith to agree upon and execute an appropriate Stipulation of Settlement
(the "Stipulation") and such other documentation as may be required in order to
obtain Final Court Approval (as defined below) of the Settlement and the
dismissal of the Action upon the terms set forth in this Memorandum of
Understanding (collectively, the "Settlement Documents"). The Stipulation will
expressly provide, inter alia, for certification of a non-opt out settlement
class of ASA shareholders and their successors in interest and transferees,
immediate and remote, from February 15, 1999 through and including the Effective
Time (as defined in the Merger Agreement) (the "Class"); for entry of a
judgment dismissing the Actions "with prejudice" and without costs to any party
except as expressly provided herein; for a complete release and settlement of
all claims, whether asserted directly, derivatively or otherwise, against
Defendants or any of their families, parent entities, affiliates, subsidiaries,
predecessors, successors or assigns, and each and all of their respective past,
present or future officers, directors, associates, stockholders, controlling
persons, representatives, employees, attorneys, financial or investment
advisors, consultants, accountants, investment bankers, commercial bankers,
engineers, advisors or agents, heirs, executors, trustees, general or limited
partners or partnerships, personal representatives, estates or administrators,
which have been, or could have been, asserted, whether known or unknown and
whether arising under federal, state or any other law (including, without
limitation, the federal securities laws), relating to the Transaction, the
actions of ASA, the ASA Board (including each member of the ASA Board), Delta or
Delta Sub, Inc. relating to the Transaction, the related disclosure materials,
the events described in such disclosure materials, disclosures, facts and
allegations that are or could (insofar as such transactions, disclosures, facts
and allegations relate to, or occurred in connection with, the subject matter of
the Action) be the subject of the Action; that Defendants have denied and
continue to deny that they have committed or attempted to commit any violations
of law or breaches of duty of any kind; that Defendants are entering into the
Stipulation solely because the proposed Settlement would eliminate the burden,
risk and expense of further litigation, and is in the best interests of ASA and
all its shareholders; and that any of the Defendants shall have the right to
withdraw from the proposed Settlement in the event that (x) any claims related
to the Transaction or the subject matter of the Action (whether direct,
derivative or otherwise) are commenced against any person in any court
prior to Final Court Approval of the Settlement, and such claims are not
dismissed or stayed in contemplation of dismissal or (y) any of the
additional conditions set forth in paragraph 4 below shall not have been
satisfied. The parties agree to use their good faith efforts to obtain the
dismissal or stay in contemplation of dismissal of any action covered by
clause (x) in the foregoing sentence and further agree that Defendants
shall have the right to withdraw from this Memorandum of Understanding if
such efforts do not result in the dismissal or stay in contemplation of
dismissal of such an action.
3. Notice and Court Approval. Subject to prior Court approval of the
Stipulation and the form of the Settlement Documents, the parties to the Action
will present the Settlement Documents to the Court for approval as soon as
practicable following dissemination of appropriate notice of the proposed
Settlement to ASA shareholders. ASA or its successor shall pay the costs and
expenses related to providing such notice. As used herein, "Final Court
Approval" of the Settlement means that the Court has entered an order approving
the Settlement and that such order is finally affirmed on appeal or is no longer
subject to appeal and the time for any petition for reargument, appeal or
review, by certiorari or otherwise, has expired. Plaintiffs' counsel intend to
apply to the Court for an award of attorneys' fees and reasonable out-of-pocket
disbursements. Subject to the terms and conditions of this Memorandum of
Understanding and the contemplated Stipulation of Settlement, Plaintiffs'
counsel will apply for an award of fees and expenses in an amount not exceeding
in the aggregate $400,000, which the Defendants and other releasees will
not oppose, to be paid by ASA or its successor in the amount awarded by the
Court.
4. Other Conditions. The consummation of the Settlement is subject to:
(a) consummation of the Transaction, as contemplated in the Merger Agreement as
such may be amended from time to time; (b) the drafting and execution of the
Settlement Documents and the other agreements necessary to effectuate the terms
of the proposed Settlement; (c) the completion by Plaintiffs of appropriate
discovery in the Action reasonably satisfactory to Plaintiffs' counsel; and (d)
Final Court Approval (as defined above) of the Settlement and dismissal of the
Action with prejudice and without awarding costs to any party, except as
provided herein. This Memorandum of Understanding shall be null and void and of
no force and effect if (i) any of these conditions are not met or (ii)
Plaintiffs' counsel in the Action determine that the Settlement is not fair and
reasonable. In such event, this Memorandum of Understanding shall not be deemed
to prejudice in any way the positions of the parties with respect to the Action
and shall not entitle any party to recover any costs or expenses incurred in
connection with the implementation of this Memorandum of Understanding.
5. Interim Stay of the Action. The parties to the Action agree that
except as expressly provided herein, the Action shall be stayed pending
submission of the proposed Settlement to the Court for its consideration.
Plaintiffs' counsel agrees that all Defendants' time to answer or otherwise
respond to the class action complaint in the Action is extended without date.
Counsel shall enter into such documentation as shall be required to effectuate
the foregoing agreements.
6. Miscellaneous. (a) This Memorandum of Understanding may be executed
in counterparts by any of the signatories hereto and as so executed shall
constitute one agreement; (b) this Memorandum of Understanding and the
Settlement contemplated by it shall be governed by and construed in accordance
with the laws of the State of Georgia; (c) this Memorandum of Understanding
shall be binding upon and inure to the benefit of the parties and their
respective agents, executors, heirs, successors and assigns, subject to the
conditions set forth herein; (d) Plaintiffs and their counsel represent and
warrant that none of the claims or causes of action asserted in the Action have
been assigned, encumbered or in any manner transferred, in whole or in part; (e)
except as provided herein, Defendants shall bear no expenses, costs, damages or
fees alleged or incurred by any named Plaintiff, any member of the Class or
their respective attorneys, experts, advisors, agents or representatives; and
(f) the provisions contained in this Memorandum of Understanding shall not be
deemed a presumption, concession or admission by any Defendant of any breach of
duty, liability, default or wrongdoing as to any facts or claims alleged or
asserted in the Action, or in any other actions or proceedings, and shall not be
interpreted, construed, deemed, invoked, offered or received in evidence or
otherwise used by any person in the Action or in any other action or
proceeding of any nature whatsoever.
XXXXX & XXXXXXX
By: /s/ Xxxxxx X. Xxxxx
------------------------
Xxxxxx X. Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Of Counsel: (000) 000-0000
Xxxxxxxx & Harley Attorneys for Plaintiffs
0000 Xxxxxxxxx II
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000
Xxxxx Xxxxx & Xxxxx
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
XXXXXXXX & XXXXXXXX
By: /s/ Xxxx X. Xxxxxxxx
------------------------
Xxxx X. Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Of Counsel: (000) 000-0000
Xxxxxxxx Xxxxxxx LLP
0000 XxxxxxxXxxx Xxxxx Xxxxxxxxx for
000 Xxxxxxxxx Xxxxxx, X.X. ASA Holdings, Inc. and
Xxxxxxx, Xxxxxxx 00000 Its Board of Directors
(000) 000-0000
XXXXX XXXX & XXXXXXXX
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Of Counsel: (000) 000-0000
Xxxxxx & Xxxxxx
A Limited Liability Partnership Attorneys for
2700 International Tower Delta Air Lines, Inc.
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000
