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AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 (the "AMENDMENT") made this 23rd day of October,
1997, is by and among Kitty Hawk, Inc., a Delaware corporation ("KITTY HAWK"),
Kitty Hawk - AIA, Inc., a Michigan corporation ("KITTY HAWK - AIA"), Kitty Hawk
- AIT, Inc., a Michigan corporation ("KITTY HAWK - AIT"), Kitty Hawk - FOL,
Inc., a Michigan corporation ("KITTY HAWK - FOL"), Kitty Hawk - KFS, Inc., a
Michigan corporation ("KITTY HAWK - KFS"), Kitty Hawk - OK, Inc., a Michigan
corporation ("KITTY HAWK - OK"), M. Xxx Xxxxxxxxxxx ("XXXXXXXXXXX"), American
International Airways, Inc., a Michigan corporation ("AIA"), American
International Travel, Inc., a Michigan corporation ("AIT"), Flight One
Logistics, Inc., a Michigan corporation ("FOL"), Kalitta Flying Service, Inc.,
a Michigan corporation ("KFS"), O.K. Turbines, Inc., a Michigan corporation
("OK"), and Xxxxxx Xxxxxxx ("KALITTA") and amends the Agreement and Plan of
Merger, dated September 22, 1997 among the parties hereto (the "AGREEMENT").
WHEREAS, the parties desire to amend certain terms of the Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants herein contained, the parties hereto agree as follows:
1. The definition of "Kalitta Companies Permitted Transactions"
shall be amended by deleting the entire definition and replacing it with the
following:
"KALITTA COMPANIES PERMITTED TRANSACTIONS" shall mean (a) the
transactions contemplated by the 727 Purchase Agreement, (b) the purchase and
financing by AIA of the MEA 747s, (c) the repurchase by AIA of an L-1011 from
ACG Nevada Three LLC pursuant to that certain Purchase Option Agreement dated
April 12, 1996, between ACG Nevada Three LLC and AIA, (d) the sale by AIA of
one L-1011 aircraft, (e) the sale of aircraft N504MG and N705CA, (f) the
transactions contemplated by the Racing Entity Purchase Agreement, (g) to the
extent all conditions to the obligations of AIA are satisfied pursuant to that
letter agreement relating to the Ft. Xxxxx facility are satisfied, the
transactions contemplated thereby, (h) the borrowing of approximately
$7,750,000 and the granting of Liens on a DC-8-63F owned by AIA to secure such
borrowing, (i) up to $250,000 in miscellaneous financings of equipment, (j) the
sale by KFS to Kalitta or his Affiliate of the Hawker aircraft and the lease
back of such aircraft, in each case on terms no less favorable to KFS than
those that could be obtained in an arm's length transaction, (k) any debt
refinancing or restructuring transactions that are consented to by Kitty Hawk
(which consent shall not be unreasonably withheld), (l) the financing of
insurance premium deductibles consistent with past practice, (m) the
distribution net of prior distributions for such purpose, of up to $1,500,000
solely for the payment by Kalitta of personal income Taxes attributable to
earnings of the Kalitta Companies from January 1997, net of prior distributions
until the Closing Date, (n) the transfer from Kalitta to each of Xxxx Xxxxxxx,
Xxxxxx Xxxxxx and Xxx Xxxxxxxxx of 386.83762 shares of AIA common stock
(provided that no such transfers shall be made until each such transferee has
delivered to Kitty Hawk a written waiver of any dissenter's rights related to
the Mergers) and (o) any transactions between Kalitta, AIC or any of the
Kalitta Companies, on the one hand, and Kitty Hawk or any Subsidiary, on the
other hand.
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2. The definition of "MEA 747s" shall be amended by deleting the
entire definition and replacing it with the following:
"MEA 747S" shall mean the two Boeing-747 aircraft the subject of that
certain Option Agreement dated as of October 22, 1997, between AIA and Middle
East Airlines Airliban, X.X.X.
3. The definition of "Non-KFS Escrow Amount" shall be amended by
deleting the entire definition and replacing it with the following:
"NON-KFS ESCROW AMOUNT" shall mean 650,000 shares of Kitty Hawk Common
Stock.
4. Section 3.1(a) of the Agreement shall be amended by deleting
the entire section and replacing it with the following:
(a) At the Effective Time, by virtue of the AIA Merger of Kitty
Hawk - AIA with and into AIA and without any action on the part of Kitty Hawk -
AIA, AIA, Kitty Hawk or their respective shareholders or stockholders (other
than the filing of the certificate of merger referred to in Section 1.3
hereof), (i) each share (an "AIA SHARE") of AIA's common stock, par value $1.00
per share ("AIA COMMON STOCK"), issued and outstanding immediately prior to the
Effective Time (other than shares of AIA Common Stock held in the treasury of
AIA) shall be canceled and extinguished and be converted automatically into the
right to receive 129.2532 shares of Kitty Hawk Common Stock (the "AIA MERGER
CONSIDERATION") payable, less any required withholding Taxes, as provided in
Section 3.2 upon surrender of the certificate formerly representing such AIA
Share (an "AIA CERTIFICATE"), and (ii) each AIA Share then held in the treasury
of AIA shall be canceled and retired without conversion thereof and without
payment of any consideration and shall cease to exist.
5. Section 3.1(f) of the Agreement shall be amended by deleting
the entire section and replacing it with the following:
(f) As used herein, "STOCK MERGER CONSIDERATION" shall mean
4,099,150 duly authorized, validly issued, fully paid and nonassessable shares
of Kitty Hawk common stock, par value $0.01 per share ("KITTY HAWK COMMON
STOCK") issuable as the total number of shares in the AIA Merger, the AIT
Merger, the FOL Merger and the OK Merger. In the event that, subsequent to the
date of this Agreement but prior to the Effective Time, the outstanding shares
of Kitty Hawk Common Stock, AIA Common Stock, AIT Common Stock, FOL Common
Stock, KFS Common Stock or OK Common Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares
or securities through a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, or other similar change in
capitalization, or there shall have been proposed any such change with a record
date prior to the Effective Time, then an appropriate and proportionate
adjustment shall be made in the Stock Merger Consideration, the Non-KFS Escrow
Amount and, if applicable, the KFS Cash Merger Consideration and the KFS Escrow
Amount.
6. Section 5.5.3 of the Agreement shall be amended by deleting
the entire section and replacing it with the following:
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5.5.3 Deadlock Resolution at the Joint Nominating Committee. The
Bylaws of Kitty Hawk shall be amended at or prior to the Effective Time to
provide that if the Joint Nominating Committee does not agree on the selection
of (a) a nominee to serve as a member of the Board of Directors as a Joint
Designee to be elected at a meeting of the stockholders of Kitty Hawk or (b) an
individual to fill a vacancy on the Board of Directors as a Joint Designee,
then either member of the Joint Nominating Committee may by written notice to
the other member require such nominee or vacancy to be selected or filled,
respectively, at a meeting of the Board of Directors called by such member in
accordance with the Bylaws of Kitty Hawk at any time after the tenth day
following the receipt of notice of the first meeting of the Joint Nominating
Committee called for the express purpose of selecting such nominee or filling
such vacancy. Any individual selected by the Board of Directors to serve as a
member of the Board of Directors as a Joint Designee, if the Joint Nominating
Committee is unable to agree upon a nominee or a person to fill a vacancy, must
(a) not be a Family Member of either Xxxxxxxxxxx or Kalitta, (b) not be a
former or current employee of any Kalitta Company or AIC, Kitty Hawk, the Subs
or the Subsidiaries, (c) have within the preceding sixty (60) months been a
director, chief financial officer, or chief executive officer of a company
listed on the New York Stock Exchange or the American Stock Exchange or quoted
on the NASDAQ Stock Market's National Market System and (d) be a citizen of the
United States. If the person so chosen by the Board of Directors declines or
is unable to serve, then either member of the Joint Nominating Committee may
call a meeting of the Nominating Committee to choose another person to serve as
a director of Kitty Hawk (in which case all of the provisions of this Section
5.5.3 shall again apply).
7. Section 3.2(a) of the Agreement shall be amended by deleting
the entire section and replacing it with the following:
(a) a portion of the AIA Merger Consideration equal to 650,000
shares of Kitty Hawk Common Stock shall, pursuant to the irrevocable direction
of Kalitta, be deposited at Closing with the Escrow Agent to be held and
administered in accordance with the Non-KFS Escrow Agreement;
8. Section 6.1.12 of the Agreement shall be deleted.
9. The first sentence of Section 1(a) of the form of Non-KFS
Escrow Agreement attached as Exhibit 7.3(e) to the Agreement shall be amended
by deleting such sentence in its entirety and replacing it with the following:
Kalitta is depositing with Escrow Agent certificates representing 650,000
shares of Kitty Hawk common stock, par value $0.01 per share (the "ESCROW
SHARES"), issued in the name of Kalitta and stock transfer powers duly executed
by Kalitta endorsed in blank with respect to the Escrow Shares.
10. Kitty Hawk waives any Breach of Section 4.1.8(a) and failure
to satisfy the conditions of Section 6.1 of the Agreement due solely to the
results of operations of the Kalitta Companies for September 1997 and the
failure of the condition originally set forth in Section 6.1.12.
11. Except as amended, all other terms and provisions in the
Agreement shall remain unchanged.
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12. This Amendment may be signed in multiple counterparts, all of
which together shall be deemed to constitute one amendment to the Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment,
as of the date first written hereinabove.
KITTY HAWK, INC.
By:
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Name:
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Title:
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KITTY HAWK - AIA, INC.
By:
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Name:
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Title:
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KITTY HAWK - AIT, INC.
By:
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Name:
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Title:
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KITTY HAWK - FOL, INC.
By:
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Name:
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Title:
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KITTY HAWK - KFS, INC.
By:
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Name:
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Title:
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KITTY HAWK - OK, INC.
By:
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Name:
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Title:
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M. Xxx Xxxxxxxxxxx
AMERICAN INTERNATIONAL AIRWAYS,
INC.
By:
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Name:
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Title:
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AMERICAN INTERNATIONAL TRAVEL, INC.
By:
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Name:
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Title:
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FLIGHT ONE LOGISTICS, INC.
By:
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Name:
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Title:
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KALITTA FLYING SERVICES, INC.
By:
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Name:
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Title:
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O.K. TURBINES, INC.
By:
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Name:
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Title:
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Xxxxxx Xxxxxxx
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