Exhibit 24
MEMORANDUM OF UNDERSTANDING
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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:
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:
(i) 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.
(ii) 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.
(iii) 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
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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
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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
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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
