UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 28, 2008
Mesa Air Group, Inc.
410 North 44th Street, Suite 100
(Exact name of registrant as specified in its charter)
Phoenix, Arizona 85008
(Address of principal executive offices including zip code)
(602) 685-4000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement. On November 28, 2008, Mesa Air Group, Inc. ("Mesa") entered into a settlement and release agreement
("Settlement Agreement"), effective as of November 28, 2008, with certain affiliates of The Yucaipa Companies LLC
(collectively, "Yucaipa") relating to the action entitled Aloha Airlines, Inc., et al. v. Mesa Air Group, Inc. before the United
States District Court for the District of Hawaii (Case No. CV 07-00007 DAE/BMK) (the "Action"). The Settlement Agreement fully and
finally settles all issues and disputes that were raised, or could have been raised, by Yucaipa, Mesa, or Aloha Airlines, Inc. and Aloha Air Group
Inc. (collectively, "Aloha") in connection with the Action. Pursuant to the Settlement Agreement, Yucaipa will fully and finally release Mesa and its affiliates, and
Mesa will fully and finally release Yucaipa and its affiliates, from all past, present or future claims related to the Action, including all claims
unknown at the time of execution of the Settlement Agreement, and/or arising out of certain non-disclosure agreements and Mesa's introduction
of flight service into the Hawaiian inter-island market. Yucaipa's release, which will be effective February 27, 2009, includes the release of any
claims relating to the Action that were or could have been brought by Aloha because Yucaipa previously acquired all of Aloha's interests and
rights in the Action. In consideration for Yucaipa's release, Mesa has agreed to issue approximately 2.7 million shares of its common stock
to Yucaipa and make a cash payment of $2 million to Yucaipa. Mesa has also agreed to register the shares of common stock it issues to
Yucaipa with the Securities and Exchange Commission. In addition, under the Settlement Agreement, Mesa and Yucaipa agreed to establish a licensing and profit
sharing arrangement whereby, in the event that Yucaipa is able to acquire from Aloha in an upcoming bankruptcy court auction the rights
to the names "Aloha" and "Aloha Airlines," Yucaipa will enter into a license agreement with Mesa to license such names
to Mesa for ten years (the "Term") in exchange for royalty payments by Mesa and Mesa will pay to Yucaipa a set percentage of the
pre-tax operating profits from Mesa's operations in the Hawaiian inter-island market. Specifically, for each year during the Term, Mesa will pay
Yucaipa 1% of the passenger ticket revenue generated from all Hawaiian inter-island flight operations, subject to a minimum annual revenue
payment of $600,000 (the "Revenue Payments"), and will also pay Yucaipa 30% of the pre-tax operating profits from Mesa's
operations in the Hawaiian inter-island market less the Revenue Payments. If Mesa ceases inter-island flight operations in Hawaii, Mesa has the right to terminate the licensing and profit sharing
arrangement. Mesa will provide Yucaipa with a $5 million promissory note payable over five years, at LIBOR +350 basis points interest, reset
quarterly, that will become payable if Mesa ceases operations in the Hawaiian inter-island market or breaches the Settlement Agreement. If, at
the end of the first five years of the Term, the note has not become payable as a result of Mesa's cessation of operations or breach, the
principal owing on the note will decrease automatically on a straight-line basis over the remaining five years of the Term. If Mesa ceases
operations in Hawaii or breaches the Settlement Agreement during the final five years of the Term, the amount payable on the note would be
the principal remaining at the time of such cessation or breach. The note will be secured by a first priority lien on certain Mesa assets with a fair
market value equal to 125% of the principal amount of the note. The Settlement Agreement also provides that the parties will take certain further actions to seek the dismissal, with
prejudice, of the entire Action. Item 8.01 Other Events. On November 28, 2008, Mesa issued a press release regarding the Settlement Agreement described in Item 1.01
above. A copy of the press release is attached hereto as Exhibit 99.1. Item 9.01. Financial Statements and Exhibits (d) Exhibits.
Description Press release regarding Settlement Agreement, dated November 28, 2008
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 1, 2008
Mesa Air Group, Inc.
By: /s/ BRIAN S. GILLMAN
Name: BRIAN S. GILLMAN
Title: Executive Vice President, General Counsel and Secretary
EXHIBIT INDEX
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Description |
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Press release regarding Settlement Agreement, dated November 28, 2008 Also provided in PDF format as a courtesy. |
Exhibit 99.1
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Mesa Air Group Settles Aloha Lawsuit and Agrees to Enter Long Term Licensing Agreement |
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PHOENIX, Nov. 28 /PRNewswire-FirstCall/ -- Mesa Air Group, Inc. (Nasdaq: MESA) today announced that it entered into a settlement with the former controlling shareholder of Aloha Airlines concerning the Aloha Airlines lawsuit over Mesa's Hawaiian inter-island flight services operated under the go! brand name. Under the terms of the settlement, and without admitting any wrongdoing, Mesa agreed: -- Mesa will make a cash payment of $2 million; -- Mesa will issue shares of Mesa common stock equal to 10% of its currently outstanding shares; -- Mesa will provide certain Hawaiian inter-island travel benefits to the former employees of Aloha Airlines; -- In the event the shareholder is able to purchase the "Aloha" name in the upcoming bankruptcy court auction, it will license the "Aloha" name to Mesa. (Logo: http://www.newscom.com/cgi-bin/prnh/19990210/LAW065 ) "We are extremely pleased to resolve all claims put forward in this litigation and look forward to re-branding service under the Aloha name in the near future," said Jonathan Ornstein, Chairman and Chief Executive Officer of Mesa. "This settlement resolves all claims by Aloha Airlines related to Mesa's entry into the Hawaiian inter-island market and permits us to focus solely on our core competency of providing the best service, convenient schedules and low fare pricing to our customers. We intend to carry on Aloha's proud tradition, maintain Mesa's status as Hawaii's low cost air carrier and look forward to future growth opportunities made possible by this settlement." |
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Mesa currently operates 152 aircraft with over 800 daily system departures to 126 cities, 38 states, the District of Columbia, Canada, and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go!. In June 2006, Mesa launched Hawaiian inter-island service as go!. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 4,100 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, projected or expected. Web site: http://www.mesa-air.com SOURCE Mesa Air Group, Inc. |