Exhibit (c)(2)
STOCK AGREEMENT
THIS STOCK AGREEMENT (the "Agreement") is made and executed this 17th day
of March, 1997, by and among DELTA AIR LINES, INC., a Delaware corporation
("Delta"), DELTA AIR LINES HOLDINGS, INC., a Delaware corporation ("Delta
Holdings"), ATLANTIC SOUTHEAST AIRLINES, INC., a Georgia corporation
("Airlines"), and ASA HOLDINGS, INC., a Georgia corporation ("ASA Holdings").
WHEREAS, Delta previously acquired capital stock in Airlines pursuant to
that certain Stock Purchase Agreement dated May 28, 1986, between Delta and
Airlines (the "Purchase Agreement");
WHEREAS, Delta has previously assigned all its right, title and interest in
and to any and all capital stock owned by Delta in Airlines to Delta Holdings,
whereupon Delta ceased to be a shareholder of record of Airlines and currently
is not a shareholder of record of any capital stock in or to Airlines or ASA
Holdings; and
WHEREAS, effective 11:59 p.m. E.S.T. on December 31, 1996, Airlines
undertook a reorganization transaction (the "Subject Transaction") pursuant to
which Airlines has become a wholly owned subsidiary of ASA Holdings; and
WHEREAS, under the Subject Transaction, all capital stock owned of record
by Delta Holdings in Airlines was automatically converted to the same number of
shares of capital stock in ASA Holdings, whereupon Delta Holdings ceased to own
of record any capital stock in Airlines; and
WHEREAS, the parties desire to (i) set forth herein the applicable terms,
conditions and other provisions originally contained under the Purchase
Agreement which shall apply as between Delta and Delta Holdings, as applicable,
on the one hand, and ASA Holdings, on the other, with respect to all capital
stock now owned or hereafter acquired by Delta Holdings in ASA Holdings (the
"Subject Stock") and (ii) except as noted in subclause (i), terminate in its
entirety the Purchase Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
I. RECITALS.
All parties acknowledge and agree that all of the foregoing recitals are
true and correct.
II. TERMINATION.
In accordance with Section 7.8 of the Purchase Agreement, the parties
acknowledge and agree that the Purchase Agreement is hereby amended in its
entirety as hereinafter provided.
III. COVENANTS.
3.1 ASA Holdings' Board of Directors. ASA Holdings agrees that, if Delta
or Delta Holdings shall so request, (i) as promptly as practicable, ASA Holdings
will take such action as may be necessary to cause the election to ASA Holdings'
Board of Directors of two designees selected by Delta or Delta Holdings and
reasonably acceptable to ASA Holdings and (ii) for as long as Delta or Delta
Holdings owns at least 10% of the outstanding common stock of ASA Holdings, ASA
Holdings will include at least two designees of Delta or Delta Holdings
reasonably acceptable to ASA Holdings on the slate of nominees for election as
directors nominated by the ASA Holdings' Board of Directors and will use its
reasonable best efforts to assure that such individuals are elected to ASA
Holdings' Board of Directors (including, without limitation, by soliciting
proxies in favor of their election).
3.2 Equity Accounting. ASA Holdings will furnish to Delta and Delta
Holdings all information that is required by generally accepted accounting
principles to enable Delta and Delta Holdings to account for its investment in
ASA Holdings pursuant to the equity method if Delta or Delta Holdings elects or
is required by generally accepted accounting principles to do so. To the extent
reasonably requested by Delta or Delta Holdings, ASA Holdings will, and will
cause its employees, independent public accountants and other representatives
to, provide information regarding ASA Holdings to, and otherwise cooperate with,
Delta and Delta Holdings so as to enable Delta and Delta Holdings to prepare
financial statements in accordance with generally accepted accounting principles
and to comply with its reporting requirements and other disclosure obligations
under applicable federal securities laws and regulations.
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3.3 Registration Rights.
(a) Demand Rights. If, at any time Delta Holdings shall desire to sell
any or all of the Subject Stock, or any "New Securities" (as defined in Section
3.4 hereof) acquired by Delta Holdings pursuant to Section 3.4 hereof (for
purposes of this Section 3.3, the "Subject Stock" shall include such New
Securities), under circumstances requiring registration under the Securities Act
of 1933, as amended (the "Securities Act"), and shall so advise ASA Holdings by
written notice (which notice shall specify the number of shares of the Subject
Stock proposed to be sold, describe the method of proposed sale and contain an
undertaking by Delta Holdings to provide all such information and to take all
such action as may be required in order to permit ASA Holdings to comply with
all applicable requirements of the Securities and Exchange Commission (the
"SEC") and to obtain acceleration of the effective date of such registration
statement), ASA Holdings shall promptly prepare and file a registration
statement with the SEC relating to such Subject Stock designated in such notice
and use its reasonable best efforts to cause such registration statement to
become effective and remain effective for a period of not less than six months
(or such lesser period as the parties may agree); provided, however, that ASA
Holdings shall not be obligated to effect more than three such registrations. If
the plan of distribution specified by Delta Holdings with respect to any such
registration involves the selection of a managing underwriter or underwriters,
such managing underwriter or underwriters shall be chosen by Delta Holdings,
subject to the reasonable approval of ASA Holdings. In connection with any such
registration, ASA Holdings will make such filings, and will use its reasonable
best efforts to cause such filings to become effective, so that the Subject
Stock proposed to be sold shall be registered or qualified for sale under the
securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the Subject Stock covered by the
registration statement; provided, however, that ASA Holdings shall not be
required to register as a broker or dealer in any jurisdiction where it is not
then so registered or to qualify to do business as a foreign corporation in any
jurisdiction where it is not then so qualified or to file any general consent to
service of process.
(b) Piggyback Rights. If, at any time ASA Holdings shall propose the
registration under the Securities Act of an underwritten offering of shares of
capital stock, ASA Holdings shall give written notice to Delta and Delta
Holdings of such proposed registration and will use its reasonable best efforts
to include in such registration such number of shares of the Subject Stock as
Delta Holdings shall request in writing within 15 days after receipt of ASA
Holdings' notice and to cause such Subject Stock to be offered to the public on
the same terms (including the method of distribution and, in the case of shares
of the same class of stock, the offering price) applicable to the other shares
of capital stock to
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be included in such offering; provided, however, that if the managing
underwriter or underwriters of such offering shall determine in good faith and
so advise ASA Holdings in writing that the number of shares of capital stock
proposed to be sold in such offering (including the shares of the Subject Stock
proposed to be sold by Delta Holdings) exceeds the number which can be sold in
such offering, ASA Holdings shall be required to include in such offering only
such number of shares of the Subject Stock, which, when added to the number of
shares of capital stock proposed to be sold by ASA Holdings in such offering,
can, in the good faith judgment of the managing underwriter or underwriters, be
sold without adversely affecting the success of the offering (it being
understood, however, that if other holders of capital stock of ASA Holdings
shall have requested the inclusion of their shares in such registration, the
number of shares held by Delta Holdings and the number of shares of capital
stock of ASA Holdings held by such other holders to be included in such offering
shall be determined on a pro-rata basis).
(c) Expenses. ASA Holdings shall pay all fees and expenses in connection
with any registration effected pursuant to this Section 3.3, except for
underwriting discounts and commissions to brokers or dealers attributable to the
Subject Stock being sold by Delta Holdings and the fees and disbursements of any
counsel and accountants retained by Delta Holdings in connection with such
registration.
(d) Indemnification. In the case of any registration effected pursuant to
this Section 3.3, ASA Holdings and Delta Holdings will each provide the other
and any underwriter retained in connection therewith with customary indemnities.
3.4 Preemptive Rights.
(a) For so long as Delta Holdings owns at least 10% of the outstanding
common stock of ASA Holdings, if ASA Holdings proposes to issue any shares of
any class of its voting securities (such securities, together with any voting
securities which Delta Holdings has the right to acquire under this Section
3.4(a) upon the exercise of any employee stock options or upon the issuance of
any voting securities for consideration other than cash, hereinafter
collectively referred to as the "New Securities"), ASA Holdings shall promptly
advise Delta and Delta Holdings in writing of the terms on which the New
Securities are to be issued. Delta Holdings shall have the right, which may be
exercised at any time within 30 days following such notice, to acquire on the
same terms and conditions as such proposed issuance (or, in the case of the
issuance of any New Securities upon the exercise of any employee stock options,
at the market price of such securities on the date of exercise, or in the case
of the issuance of any New Securities for consideration other than cash, at a
cash price equal to the fair market value of such non-cash consideration on the
date that ASA Holdings first agrees
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to issue such New Securities) its pro rata share of the New Securities. Delta
Holdings' pro rata share of the New Securities shall be determined by
multiplying the total number of New Securities by a fraction, the numerator of
which is the total number of votes represented by the voting securities then
owned by Delta Holdings and the denominator of which is the total number of
votes represented by all of the then outstanding voting securities.
(b) Notwithstanding the foregoing, ASA Holdings need not notify Delta and
Delta Holdings of the issuance of New Securities upon the exercise of employee
stock options or of any other issuances of New Securities which in the aggregate
represent less than 1% of the total number of votes represented by all then
outstanding voting securities, but shall notify Delta and Delta Holdings within
15 days after the end of each fiscal quarter of ASA Holdings (or more frequently
if requested by Delta Holdings) as to the number of shares of New Securities so
issued during such quarter. Delta Holdings' right under this Section 3.4 to
purchase its pro rata share of New Securities may, at the election of Delta
Holdings, be exercised at any time within 30 days following the notice given
pursuant to this Section 3.4(b) or such right to purchase New Securities after a
notice given pursuant to this Section 3.4(b) shall cumulate and may be carried
forward and exercised by Delta Holdings at the time of and together with the
subsequent purchase of additional New Securities by Delta Holdings pursuant to
the next notice received by Delta Holdings pursuant to Subsection (a) of this
Section 3.4.
(c) For purposes of this Section 3.4, (i) the term "voting securities"
shall mean any securities of ASA Holdings entitled to vote generally in the
election of directors; (ii) the term "current market price" of any voting
securities shall mean, on the day in question, the last reported sale price
(regular way) on the principal national securities exchange on which such
securities are listed or admitted to trading, or if they are not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices of such securities as reported through the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or any
comparable system, or if price quotations for such securities are not reported
through NASDAQ or a comparable system, the average of the closing bid and asked
prices of such securities as furnished by two members of the National
Association of Securities Dealers, selected from time to time by ASA Holdings
for that purpose; and (iii) the term "fair market value" of any non-cash
consideration on the date in question shall mean the fair market value of such
consideration as mutually agreed by ASA Holdings and Delta Holdings, or if such
parties are unable to agree, as determined by an investment banking firm
mutually agreeable to both parties. In the event that the parties are unable to
agree on an investment banking firm, then each party shall name its own
investment banking firm and such firms shall select a third
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investment banking firm to determine the "fair market value" of any non-cash
consideration. The fees and expenses of such third investment banking firm shall
be borne equally by ASA Holdings and Delta Holdings.
3.5 Right of First Refusal. If at a time when Delta Holdings owns at
least 5% of the outstanding common stock of ASA Holdings, Delta Holdings
proposes to sell any voting securities (as defined in Section 3.4(c)) then owned
by it either (i) to five or fewer persons pursuant to a registration statement
prepared as a result of Delta Holdings' exercise of its demand rights under
Section 3.3(a), or (ii) in a private sale without registration under the
Securities Act, Delta Holdings shall promptly advise ASA Holdings in writing of
the price and terms on which such voting securities are to be sold and, if
known, the intended purchaser of such voting securities. ASA Holdings shall have
the right, which may be exercised at any time within 30 days following such
notice, to acquire all, but not less than all, of the voting securities proposed
to be sold at the same price and on the same terms as such proposed sale;
provided, however, that if such price is payable in whole or in part in
consideration other than cash, the price payable by ASA Holdings shall be
payable in cash and shall be equal to the fair market value of such non-cash
consideration on the date Delta Holdings first agrees to sell such voting
securities, determined as provided in Section 3.4(c). If ASA Holdings does not
exercise its right to purchase the voting securities proposed to be sold, Delta
Holdings shall be free to sell such voting securities at the same price and on
the same terms contained in Delta Holdings' written notice to ASA Holdings
within the one hundred twenty (120) day period following the expiration of ASA
Holdings' thirty (30) day exercise period.
3.6 Covenant to Satisfy Conditions. Each of the parties hereto will use
their respective reasonable best efforts, and cooperate with the other, to
ensure that the conditions set forth in Article III hereof are satisfied as
promptly as practicable.
IV. MISCELLANEOUS.
4.1 Brokers. ASA Holdings and Delta Holdings each represent and warrant
to the other that neither has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby. Delta Holdings and ASA Holdings each
agrees to indemnify and hold the other harmless from and against any and all
claims, liabilities or obligations with respect to any such fees or commissions
asserted by any person on the basis of any act or statement alleged to have been
made by such party.
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4.2 Expenses. Each party shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
4.3 Survival of Representations. All representations, warranties and
agreements made by ASA Holdings and Delta Holdings in this Agreement shall
survive the execution of this Agreement and the consummation of any transaction
contemplated herein and any investigation at any time made by or on behalf of
any party hereto.
4.4 Adjustments. In the event of any change in the common stock of ASA
Holdings by reason of stock dividend, split-up, recapitalization, combination,
exchange of shares or the like, the number and kind of shares subject to this
Agreement shall be appropriately adjusted.
4.5 Legend. The certificates representing the Subject Stock shall bear a
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED
FOR SALE, SOLD OR TRANSFERRED EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR (ii) AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT, AND IN COMPLIANCE WITH THE APPLICABLE
LAWS OF ANY STATE OR OTHER JURISDICTION. THE SALE, TRANSFER OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS ALSO
SUBJECT TO RESTRICTIONS CONTAINED IN A STOCK AGREEMENT DATED MARCH
17, 1997, AMONG DELTA AIR LINES, INC., DELTA AIR LINES HOLDINGS,
INC., ATLANTIC SOUTHEAST AIRLINES, INC., AND ASA HOLDINGS, INC., A
COPY OF WHICH IS ON FILE AT THE OFFICE OF THE SECRETARY OF ASA
HOLDINGS, INC.
4.6 Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings with
respect to the subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements and understandings
between all or any number of the parties with respect to its subject matter.
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4.7 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
4.8 Amendment; Waiver. This Agreement may be amended only by a written
instrument duly executed by each of ASA Holdings, Airlines, Delta, and Delta
Holdings. To the extent permitted by law, any condition to a party's obligations
hereunder may be waived in writing by such party.
4.9 Parties in Interest. This Agreement will be binding upon, inure to
the benefit of and be enforceable by ASA Holdings, Airlines, Delta and Delta
Holdings and their respective successors and assigns. This Agreement may not be
assigned by the parties hereto, except that Delta Holdings may assign its rights
hereunder to Delta or to any directly or indirectly wholly owned subsidiary or
parent of Delta or Delta Holdings; provided, however, that no such assignment
shall relieve Delta Holdings of any of its obligations hereunder.
4.10 Specific Performance. ASA Holdings acknowledges and agrees that Delta
Holdings would not have an adequate remedy at law and would be irreparably
harmed in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that Delta Holdings shall be entitled to injunctive relief
to prevent breaches of this Agreement and to specifically enforce the terms and
provisions hereof, in addition to any other remedy to which it may be entitled,
at law or in equity.
4.11 Notices. All notices, claims, certificates, requests, demands and
other communications hereunder ("notices") will be given in writing and will be
deemed to have been duly given when hand-delivered or, if mailed, three days
after being mailed (registered or certified mail, postage prepaid, return
receipt requested) addressed as follows:
(a) If to Delta Holdings to:
Delta Air Lines Holdings, Inc.
Suite 1305
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
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(b) If to Delta to:
Delta Air Lines, Inc.
Xxxxxxxxxx Atlanta International Airport
0000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
copy to:
Senior Vice President-General Counsel & Secretary
Delta Air Lines, Inc.
Xxxxxxxxxx Atlanta International Airport
0000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
(c) If to Airlines or ASA Holdings:
ASA Holdings, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, President
copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, P.C.
0000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
or, in either case, such other address as the person to whom notice is to be
given may have previously furnished to the others in the manner set forth above.
4.12 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws of the State of Georgia, without regard to the
principles of conflicts of law.
4.13 Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
DELTA AIR LINES, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------
Title: Senior Vice President-Finance and
Chief Financial Officer
DELTA AIR LINES HOLDINGS, INC.
By: /s/Xxxxx D'Xxxxxxxxx
--------------------------------
Title: Treasurer
ATLANTIC SOUTHEAST AIRLINES, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Title: President
ASA HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Title: President
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