FIRST AMENDMENT TO
THE PREFERRED STOCK RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO THE PREFERRED STOCK RIGHTS AGREEMENT
(this “
Amendment
”) dated as of October 30, 2009 is between Air Transport Services Group, Inc., a Delaware corporation formerly known as ABX Holdings, Inc. (the “
Company
”), and National City Bank, a national banking association (the “
Rights Agent
”).
WHEREAS
, on December 31, 2007, the Company and the Rights Agent entered into a Preferred Stock Rights Agreement (the “
Rights Agreement
”); and
WHEREAS
, as of the date hereof a Distribution Date (as defined in the Rights Agreement) has not occurred;
NOW, THEREFORE
, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows:
SECTION 1.
Amendment
. Pursuant to Section 27 of the Rights Agreement, Section 21 of the Rights Agreement is hereby amended by replacing the fifth sentence of Section 21 in its entirety with the following:
“Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of any state of the United States, in good standing, which is authorized under such laws to exercise corporate trust or stockholder services powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million, including the capital and surplus of its Affiliates.”
SECTION 2.
Capitalized Terms
. Capitalized terms used herein and not otherwise defined in this Amendment shall have the respective meanings as used or defined in the Rights Agreement.
SECTION 3.
Rights Agreement Otherwise Unamended
. The Rights Agreement is not otherwise supplemented or amended by virtue of this Amendment, but shall remain in full force and effect.
SECTION 4.
Successors
. All the provisions of this Amendment by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns.
SECTION 5.
Benefits of this Amendment
. Nothing in this Amendment shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim pursuant to this Amendment or the Rights Agreement; but this Amendment and the Rights Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, the Common Shares).
SECTION 6.
Governing Law
. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.
SECTION 7.
Execution in Counterparts
.
This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
SECTION 8.
Descriptive Headings
. Descriptive headings of the several Sections of this Amendment are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
SECTION 9.
Direction to Rights Agent
. By its execution and delivery hereof, the Company hereby directs the Rights Agent to execute this Amendment.
[Signatures begin on following page]
IN WITNESS WHEREOF
, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written.
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“COMPANY”
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AIR TRANSPORT SERVICES GROUP, INC.
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By:
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/s/ W. JOSEPH PAYNE
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Name:
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W. Joseph Payne
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Title:
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Sr. Vice President, General Counsel & Secretary
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“RIGHTS AGENT”
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NATIONAL CITY BANK
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By:
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/s/ LAURA LONG
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Name:
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Laura Long
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Title:
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Vice President
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7010956 V.3
SECOND AMENDMENT
TO
PREFERRED STOCK RIGHTS AGREEMENT
This SECOND AMENDMENT TO PREFERRED STOCK RIGHTS AGREEMENT (this "Amendment") is entered into as of June 11, 2012, by and between Air Transport Services Group, Inc., a Delaware corporation (formerly known as ABX Holdings, Inc.) (the "Company"), and Computershare Trust Company, N.A., as successor Rights Agent (the "Rights Agent").
RECITALS
A. The Company is a party to that certain Preferred Stock Rights Agreement dated as of December 31, 2007, as amended by the First Amendment to Preferred Stock Rights Agreement dated October 30, 2009 (the "Rights Agreement"). The Rights Agent became the successor Rights Agent under, and a party to, the Rights Agreement effective October 12, 2009 pursuant to an appointment by the Company. All capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the Rights Agreement.
B. Pursuant to Section 27 of the Rights Agreement, the Company may amend or supplement from time to time such provisions of the Rights Agreement, prior to a Distribution Date, which the Company may deem necessary or desirable, without approval of holders of Rights Certificates, and the Rights Agent shall, if the Company so directs, execute such supplement or amendment.
C. The Company, pursuant to a resolution duly adopted by its Board of Directors, has determined that it is desirable to amend the Rights Agreement as provided in this Amendment.
D. The Company hereby states that there is not as of the date hereof any Acquiring Person and no Distribution Date has occurred under the Rights Agreement.
E. The Company desires to amend the Rights Agreement in certain respects as set forth herein, including to (i) increase the beneficial ownership threshold from 15% to 17.5% by which any Person, including such Person’s Affiliates or Associates, becomes an "Acquiring Person" as contemplated by the Rights Agreement (subject to certain exceptions), and (ii) make certain other amendments to the Rights Agreement pursuant to the terms of this Amendment.
F. The Company hereby states that all acts and things necessary to make this Amendment a valid agreement according to its terms have been done and performed, and the execution and delivery of this Amendment by the Company and the Rights Agent have been in all respects authorized by the Company and the Rights Agent.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
1.
Amendment of Section 1(a)
. The definition of "Acquiring Person" set forth in Section 1(a) of the Rights Agreement is hereby amended and restated to read in its entirety as follows:
(a)
"Acquiring Person" shall mean any Person, who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 17.5% or more of the Common Shares then outstanding, but shall not include an Exempt Person. Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring Person as the result of an acquisition of the Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 17.5% or more of the Common Shares of the Company then outstanding;
provided
,
however
, that if a Person shall become the Beneficial Owner of 17.5% or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares (other than pursuant to a dividend or distribution paid or made by the Company on any of the outstanding Common Shares in Common Shares or pursuant to a split or subdivision of any of the outstanding Common Shares), then such Person shall be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of such additional Common Shares such Person does not beneficially own 17.5% or more of the Common Shares of the Company then outstanding. Notwithstanding the foregoing, if the Company’s Board of Directors determines in good faith that a Person who would otherwise be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently (including, without limitation, because (A) such Person was unaware that it beneficially owned a percentage of the Common Shares that would otherwise cause such Person to be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a) or (B) such Person was aware of the extent of the Common Shares it beneficially owned but had no actual knowledge of the consequences of such beneficial ownership under this Agreement) and without any intention of changing or influencing control of the Company, and if such Person divested or divests as promptly as practicable a sufficient number of any of the Common Shares so that such Person would no longer be an "Acquiring Person," as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement
2.
Amendment of Section 3(c
). Section 3(c) of the Rights Agreement is hereby amended to add ", AS AMENDED" after "DATED DECEMBER 31, 2007" in the capitalized text of the legend to appear on Certificates representing Common Shares which references the Rights Agreement.
3.
Amendment of Section 26
. The second paragraph of Section 26 of the Rights Agreement is hereby amended in its entirety and replaced by the following paragraph:
“Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, sent by facsimile transmission (which is confirmed) or sent by an overnight courier service, addressed (until another address is filed in writing with the Company) as follows:
Computershare Trust Company, N.A
250 Royall Street
Canton, Massachusetts 02066
Attention: Client Services
All references in the Rights Agreement to “National City Bank” as Rights Agent shall be deemed to refer to Computershare Trust Company, N.A., as Rights Agent.”
4.
Amendment of Section 33
. Section 33 of the Rights Agreement is hereby amended to add the following sentence:
"A signature to this Agreement or any amendment thereto transmitted electronically shall have the same authority, effect and enforceability as an original signature."
5.
Amendment to Exhibit A (Form of Rights Certificate).
Exhibit A to the Rights Agreement is hereby amended to add "as amended" after "Rights Agreement dated as of December 31, 2007".
6.
Amendment to Exhibit B (Summary of Rights).
Exhibit B to the Rights Agreement is hereby updated with the Summary of Rights attached hereto as Exhibit B.
7.
Agreement as Amended.
The term "Agreement" as used in the Rights Agreement shall be deemed to refer to the Rights Agreement as amended hereby. Except as set forth herein, the Rights Agreement shall remain in full force and effect and otherwise shall be unaffected hereby, and each of the Company and the Rights Agent shall continue to be subject to its terms and conditions. All references in the Rights Agreement to “ABX Holdings, Inc.” shall be deemed changed to “Air Transport Services Group, Inc.”
8.
Counterparts.
This Amendment may be executed in any number of counterparts and each of such counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature of this Amendment transmitted electronically shall have the same authority, effect, and enforceability as an original signature.
9.
Governing Law.
This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and to be performed entirely within such state.
10.
Severability.
If any term, provisions or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions or restriction of this Amendment shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
11.
Descriptive Heading.
Descriptive headings appear herein for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, this Amendment is executed as of the date first written above.
AIR TRANSPORT SERVICES GROUP, INC.
By:__
/S/ W. JOSEPH PAYNE
________________
Name:__
W. Joseph Payne
________________
Title:__
Sr. Vice President, Corporate General
Counsel and Secretary
______________
COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent
By:___
/S/ DENNIS V. MOCCIA
_____________
Name:_
Dennis V. Moccia
_________________
Title:_
Manager, Contract Administration
_____
EXHIBIT B
Stockholder Rights Plan
Air Transport Services Group, Inc.
Summary of Rights
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DISTRIBUTION AND TRANSFER
OF RIGHTS; RIGHTS CERTIFICATE:
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Each issued and outstanding share of Common Stock of Air Transport Services Group, Inc. (formerly known as ABX Holdings, Inc.) (the “Company”) has associated with it a right to purchase one one-thousandth (0.001) of a share of Series A Junior Participating Preferred Stock of the Company (each, a “Right”). Prior to the Distribution Date referred to below, the Rights will be evidenced by and trade with the certificates for the Common Stock of the Company (the “Common Stock”). After the Distribution Date, the Company will mail Rights certificates to the Company’s stockholders and the Rights will become transferable apart from the Common Stock.
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DISTRIBUTION DATE:
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Rights will separate from the Common Stock and become exercisable on the date (the “Distribution Date”) that is the earlier of: (a) the tenth (10th) day (or such later date as may be determined by the Company’s Board of Directors) after a person or group acquires beneficial ownership of 17.5% or more of the Company’s then outstanding Common Stock or (b) the tenth (10th) business day (or such later date as may be determined by the Company’s Board of Directors) after a person or group announces a tender or exchange offer, the consummation of which would result in ownership by a person or group of 17.5% or more of the Common Stock.
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SERIES A PREFERRED STOCK PURCHASABLE UPON EXERCISE:
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After the Distribution Date, each Right will entitle the holder to purchase for $180.00 (the “Exercise Price”), a fraction of a share of the Company’s Series A Junior Participating Preferred Stock with economic terms similar to that of one share of the Company’s Common Stock.
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FLIP-IN:
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If an acquirer (an “Acquiring Person”) obtains 17.5% or more of the Company’s Common Stock,
then
each Right (other than Rights owned by the Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of the Common Stock having a then-current market value of twice the Exercise Price.
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FLIP-OVER:
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If, after an Acquiring Person obtains 17.5% or more of the Company’s Common Stock, (a) the Company merges into another entity, (b) an acquiring entity merges into the Company, or (c) the Company sells more than 50% of the Company’s assets or earning power,
then
each Right (other than Rights owned by an Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of common stock of the person engaging in the transaction having a then current market value of twice the Exercise Price.
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EXCHANGE PROVISION:
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At any time after the date on which an Acquiring Person obtains 17.5% or more of the Company’s Common Stock and prior to the acquisition by the Acquiring Person of 50% of the outstanding Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by the Acquiring Person or its affiliates), in whole or in part, for shares of Common Stock of the Company at an exchange ratio of one share of Common Stock per Right (subject to adjustment).
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REDEMPTION OF THE RIGHTS:
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The Rights are redeemable at the Company’s option for $0.001 per Right at any time on or prior to the fifth day (or such later date as may be determined by the Company’s Board of Directors) after public announcement that a Person has acquired beneficial ownership of 17.5% or more of the Company’s Common Stock (the “Shares Acquisition Date”).
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EXPIRATION OF THE RIGHTS:
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The Rights expire on the earlier to occur of (a) August 15, 2013 or (b) exchange or redemption of the Rights as described above.
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AMENDMENT OF TERMS OF RIGHTS:
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The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the Rights holders prior to the Distribution Date. From and after the Distribution Date, the terms of the Rights and the Rights Agreement may be amended without the consent of the Rights holders in order to cure any ambiguities or to make changes which do not adversely affect the interests of Rights holders (other than the Acquiring Person).
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VOTING RIGHTS:
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Rights do not have any voting rights.
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ANTI-DILUTION PROVISIONS:
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Rights have the benefit of certain customary anti-dilution provisions.
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TAXES:
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Following an event which renders the Rights exercisable or upon redemption of the Rights, stockholders may recognize taxable income.
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The foregoing is a summary of certain principal terms of the Rights Plan only and is qualified in its entirety by reference to the Preferred Stock Rights Agreement dated as of December 31, 2007, as amended by the First Amendment to Preferred Stock Rights Agreement dated as of October 30, 2009 and the Second Amendment to Preferred Stock Rights Agreement dated as of June 11, 2012, by and between the Company and Computershare Trust Company, N.A., as successor Rights Agent (the “Rights Agreement”). The Rights Agreement may be amended from time to time. A copy of the Rights Agreement was filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A/A. A copy of the Rights Agreement is available free of charge from the Company.
The Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of the Rights Agreement.
13865432 V.2
[AIR TRANSPORT SERVICES GROUP, INC. LETTERHEAD]
February 2, 2009
J. Christopher Teets
Partner
Red Mountain Capital Partners LLC
10100 Santa Monica Boulevard, Suite 925
Los Angeles, CA 90067
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Re:
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Confidentiality and Standstill Agreement
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Dear Mr. Teets:
As you know, that certain letter agreement by and between Red Mountain Capital Partners LLC, a Delaware limited liability company (“Red Mountain”) and Air Transport Services Group, Inc., a Delaware corporation (formerly ABX Holdings, Inc., “ATSG”), dated February 6, 2008, terminated automatically pursuant to its terms on December 31, 2008. In response to Red Mountain's renewed request, ATSG has agreed to and expects to deliver to Red Mountain, following the execution and delivery of this letter agreement by Red Mountain, certain information about its properties, employees, finances, businesses and operations (including monthly financial information and all information and materials provided or made available to the full board of directors of ATSG (the “Board of Directors”) or otherwise to a majority of the members of the Board of Directors) that is currently available or becomes available during the duration of this letter agreement; provided, however, that nothing in this letter agreement obligates ATSG to disclose any information if such disclosure would be unlawful or result in a breach by ATSG or one of its subsidiaries of a confidentiality agreement with a third party.
All information about ATSG or any third party that is furnished by ATSG or its Representatives (as defined below) to Red Mountain on or after the date hereof, and regardless of the manner in which it is furnished, is referred to in this letter agreement as “Proprietary Information.” Proprietary Information shall not include, however, information which (i) is or becomes generally available to the public other than as a result of a disclosure by Red Mountain, the Affiliates (as defined below) or any of their respective Representatives in violation of this letter agreement; (ii) was available to Red Mountain on a nonconfidential basis prior to its disclosure by ATSG or its Representatives; (iii) becomes available to Red Mountain on a nonconfidential basis from a person other than ATSG or its Representatives who is not otherwise bound by a confidentiality agreement with ATSG or any or its Representatives, or is otherwise not under an obligation to ATSG or any of its Representatives not to transmit the information
to Red Mountain; or (iv) was independently developed by Red Mountain without reference to or use of the Proprietary Information. For purposes of this letter agreement, (i) “Affiliates” shall mean, collectively, Red Mountain Capital Partners II, L.P., a Delaware limited partnership, Red Mountain Capital Partners III, L.P., a Delaware limited partnership, RMCP GP LLC, a Delaware limited liability company, Red Mountain Capital Management, Inc., a Delaware corporation, and Willem Mesdag, a natural person; (ii) “Representative” shall mean, as to any person, its directors, officers, employees, agents and advisors (including, without limitation, financial advisors, attorneys and accountants); and (iii) “person” shall be broadly interpreted to include, without limitation, any corporation, company, partnership, other entity or individual.
Subject to the immediately succeeding paragraph, unless otherwise agreed to in writing by ATSG, Red Mountain shall, (i) except as required by law, keep all Proprietary Information confidential and not disclose or reveal any Proprietary Information to any person (other than to its Affiliates, Representatives and Representatives of the Affiliates who have a need to know such information for purposes of assisting in Red Mountain's evaluation of ATSG,
provided
that each such Affiliate and Representative shall keep confidential all Proprietary Information that is so disclosed or revealed to him or her in accordance with Red Mountain's confidentiality obligations hereunder with respect to such Proprietary Information); (ii) not use Proprietary Information for any purpose other than in connection with the evaluation of ATSG; and (iii) except as required by law or legal process, not disclose to any person the fact that Proprietary Information has been disclosed to Red Mountain;
provided
that, for the avoidance of doubt, the disclosure of the existence of this letter agreement and the filing of this letter agreement as an exhibit to any Schedule 13D or amendment thereto shall not be deemed to be a breach of the foregoing clause (iii). The obligations of Red Mountain contained in this paragraph to keep Proprietary Information confidential shall survive any termination or expiration of this agreement for a period of nine months from and after the termination or expiration of this agreement.
In the event that Red Mountain or any Affiliate is requested pursuant to, or required by, applicable law or regulation (including, without limitation, any rule, regulation or policy statement of any national securities exchange, market or automated quotation system on which any of Red Mountain's securities are listed or quoted) or by legal process to disclose any Proprietary Information, Red Mountain shall provide ATSG with prompt notice of such request or requirement in order to enable ATSG (i) to seek an appropriate protective order or other remedy, (ii) to consult with Red Mountain with respect to ATSG's taking steps to resist or narrow the scope of such request or legal process or (iii) to waive compliance, in whole or in part, with the terms of this letter agreement. In the event that such protective order or other remedy is not timely sought or obtained, or ATSG waives compliance, in whole or in part, with the terms of this letter agreement, Red Mountain shall use commercially reasonable efforts to disclose only that
portion of the Proprietary Information which is legally required to be disclosed and to ensure that all Proprietary Information that is so disclosed will be accorded confidential treatment. In the event that Red Mountain shall have complied, in all material respects, with the provisions of this paragraph, such disclosure may be made by Red Mountain without any liability hereunder.
For a period commencing with the date of this letter agreement and ending on the later to occur of December 31, 2009, or the date upon which no persons affiliated with Red Mountain are serving on the Board of Directors, neither Red Mountain nor its Affiliates nor any other person affiliated with Red Mountain shall, without the prior written consent of ATSG or the Board of Directors, directly or indirectly:
(a)
acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, (i) any additional common stock or direct or indirect rights to acquire any common stock of ATSG or any subsidiary thereof, or of any successor to or person in control of ATSG such that Red Mountain, the Affiliates and any other person affiliated with Red Mountain, collectively, beneficially own, directly or indirectly, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 13d-3 thereunder (or any comparable or successor law or regulation) in excess of 14.9% of the amount of the issued and outstanding common stock of ATSG, or (ii) any assets of ATSG or any subsidiary or division thereof or of any such successor or controlling person;
(b)
make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the rules of the Securities and Exchange Commission), or seek to advise or influence any person or entity with respect to the voting of any voting securities of ATSG;
(c)
nominate or seek to nominate, directly or indirectly, any person to the Board of Directors;
(d)
make any public announcement with respect to, or submit a proposal for, or offer of (with or without conditions) any extraordinary transaction involving ATSG or any of its securities or assets;
(e)
form, join or in any way participate in a “group” as defined in Section 13(d)(3) of the Exchange Act in connection with any of the foregoing;
(f)
otherwise act or seek to control or influence the Board of Directors or the management or policies of ATSG;
(g)
take any action that could reasonably be expected to require ATSG to make a public announcement regarding the possibility of any of the events described in clauses (a) through (e) above; or
(h)
request ATSG or any of its Representatives, directly or indirectly, to amend or waive any provision of this paragraph.
The foregoing paragraph is sometimes referenced in this letter agreement as the “standstill provision.” For the avoidance of doubt, if any person affiliated with Red Mountain serves on the Board of Directors, the standstill provisions are not intended to be construed to apply to actions taken by such person in his capacity as a member of the Board of Directors.
To the extent that any Proprietary Information may include material subject to the attorney-client privilege, work product doctrine or any other applicable privilege concerning pending or threatened legal proceedings or governmental investigations, the parties understand and agree that they have a commonality of interest with respect to such matters and it is their desire, intention and mutual understanding that the sharing of such material is not intended to, and shall not, waive or diminish in any way the confidentiality of such material or its continued protection under the attorney-client privilege, work product doctrine or other applicable privilege. All Proprietary Information provided by ATSG that is entitled to protection under the attorney-client privilege, work product doctrine or other applicable privilege shall remain entitled to such protection under these privileges, this letter agreement, and under the joint defense doctrine. Nothing in this letter agreement obligates ATSG to reveal material subject to the attorney-client privilege, work product doctrine or any other applicable privilege.
Red Mountain acknowledges that neither ATSG nor any of its Representatives makes any express or implied representation or warranty as to the accuracy or completeness of any Proprietary Information, and Red Mountain agrees that none of such persons shall have any liability to Red Mountain or any of its Affiliates or Representatives relating to or arising from the use of any Proprietary Information.
In the event that ATSG, in its sole discretion, requests, Red Mountain shall, upon ATSG's written request, promptly deliver to ATSG or destroy (
provided
that any such destruction shall be certified by Red Mountain) all Proprietary Information and all copies, reproductions, summaries, analyses or extracts thereof or based thereon (whether in hard-copy form or on intangible media, such as electronic mail or computer files)
in Red Mountain's possession or in the possession of any Representative of Red Mountain or any Affiliate.
Red Mountain is aware of the restrictions imposed by the United States securities laws on the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities and on the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell such securities in reliance upon such information.
Without prejudice to the rights and remedies otherwise available to either party hereto, ATSG shall be entitled to equitable relief by way of injunction or otherwise if Red Mountain or any of the Affiliates breaches or threatens to breach any of the provisions of this letter agreement.
No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder.
This letter agreement shall be governed by and construed in accordance with the laws of the State of Ohio, without giving effect to its principles or rules regarding conflicts of laws, other than such principles directing application of Ohio law. Each party hereby consents to the institution and resolution of any action or proceeding of any kind or nature with respect to or arising out of this agreement brought by any party hereto in the federal or state courts located within the State of Ohio.
This letter agreement contains the entire agreement between the parties hereto concerning confidentiality of the Proprietary Information, and no modification of this letter agreement or waiver of the terms and conditions hereof shall be binding upon any party hereto, unless approved in writing by each such party.
This letter agreement shall terminate automatically on the later to occur of December 31, 2009, or the date upon which no persons affiliated with Red Mountain are serving on the Board of Directors (or on such later date agreed upon in writing by the parties);
provided
that Red Mountain may, in its sole discretion, terminate this letter agreement (including the standstill provision) by delivering written notice of such termination to ATSG at any time after the approval by the Board of Directors of:
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(i)
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any sale of more than 20% of the assets of ATSG and its subsidiaries, taken as a whole;
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(ii)
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the beneficial ownership (as defined by Rule 13d-3 under the Exchange Act) by any person of more than 20% of any class of outstanding equity securities of ATSG, including any equity issuance, tender offer, exchange offer or other transaction or series of transactions that, if consummated, would result in any person beneficially owning more than 20% of any class of outstanding equity securities of ATSG; or
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(iii)
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any merger, consolidation or other business combination involving ATSG or any of its subsidiaries and a third party.
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In addition, if the Board of Directors undertakes a formal process to solicit proposals with respect to any of the foregoing or, with respect to unsolicited proposals, determines that any proposal relating to any of the foregoing is reasonably likely to be approved, ATSG shall notify Red Mountain that subparagraph (h) of the standstill provision has been waived by ATSG.
For the avoidance of doubt, neither Red Mountain nor any other person shall have any obligation hereunder (and Red Mountain shall not be prohibited by this letter agreement from taking, directly and indirectly, any or all of the actions described in subparagraphs (a) through (h) of the standstill provision) from and after the termination of this letter agreement.
Please confirm your agreement with the foregoing by signing and returning to the undersigned the duplicate copy of this letter agreement enclosed herewith.
[THE REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Very truly yours,
AIR TRANSPORT SERVICES GROUP, INC.
By:
/S/ W. JOSEPH PAYNE
W. Joseph Payne
Sr. Vice President
Corporate General Counsel & Secretary
ACCEPTED AND AGREED as of the date first written above:
RED MOUNTAIN CAPITAL PARTNERS LLC
By:
/S/ J. CHRISTOPHER TEETS
J. Christopher Teets
[AIR TRANSPORT SERVICES GROUP, INC. LETTERHEAD]
June 11, 2012
Red Mountain Capital Partners LLC
10100 Santa Monica Boulevard, Suite 925
Los Angeles, California 90067
Re:
First Amendment to Confidentiality and Standstill Agreement
Gentlemen:
Reference is made to that certain Confidentiality and Standstill Agreement, dated as of February 2, 2009 (as amended hereby and as may be further amended, modified, supplemented or restated from time to time, the “
Confidentiality and Standstill Agreement
”), by and between Red Mountain Capital Partners LLC, a Delaware limited liability company (“
Red Mountain
”), and Air Transport Services Group, Inc., a Delaware corporation (“
ATSG
”). Capitalized terms that are not defined in this letter agreement shall have the meanings ascribed to them in the Confidentiality and Standstill Agreement.
As you are aware, subparagraph (a) of the standstill provisions of the Confidentiality and Standstill Agreement provides that, for the period commencing on February 2, 2009 and ending on the later to occur of December 31, 2009, or the date upon which no persons affiliated with Red Mountain are serving on the board of directors of ATSG (the “
Board of Directors
”), neither Red Mountain nor its Affiliates nor any other person affiliated with Red Mountain shall, without the prior written consent of ATSG or the Board of Directors, directly or indirectly acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, (i) any additional common stock or direct or indirect rights to acquire any common stock of ATSG or any subsidiary thereof, or of any successor to or person in control of ATSG such that Red Mountain, the Affiliates and any other person affiliated with Red Mountain, collectively, beneficially own, directly or indirectly, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and Rule 13d-3 thereunder (or any comparable or successor law or regulation) in excess of 14.9% of the amount of the issued and outstanding common stock of ATSG, or (ii) any assets of ATSG or any subsidiary or division thereof or of any such successor or controlling person.
By this letter agreement, clause (i) of such subparagraph (a) is hereby amended such that the 14.9% percentage limitation set forth therein is increased to 17.49%. In addition, Red Mountain and ATSG hereby agree that, for so long as (i) the standstill provisions in the Confidentiality and
Red Mountain Capital Partners LLC
June 11, 2012
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Standstill Agreement are in effect and (ii) Red Mountain beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or successor law or regulation) in excess of 14.9% of the amount of the issued and outstanding common stock of ATSG, Red Mountain shall, except with the prior written consent of ATSG or the Board of Directors, cause the shares of common stock of ATSG representing the portion of Red Mountain’s beneficial ownership in excess of 14.9% (the “
Excess Shares
”) to be voted, on all matters submitted by ATSG for a vote of the holders of common stock of ATSG, in accordance with the Board of Directors’ publicly stated recommendations for voting on such matters. For the avoidance of doubt, Red Mountain (x) is free to vote all shares that are not Excess Shares, and (y) in the event the Board of Directors does not publicly state a recommendation for voting on a matter, is free to vote the Excess Shares on such matter, in each case, as Red Mountain determines in its sole discretion.
This letter agreement shall constitute an amendment to, and constitute a part of, the Confidentiality and Standstill Agreement. Accordingly, this letter agreement shall terminate concurrently with the termination of the standstill provisions of the Confidentiality and Standstill Agreement. Except to the extent expressly set forth in this letter agreement, all provisions of the Confidentiality and Standstill Agreement shall remain unchanged and in full force and effect in accordance with the terms thereof.
Please confirm your agreement with the foregoing by signing and returning to the undersigned the duplicate copy of this letter agreement enclosed herewith.
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Red Mountain Capital Partners LLC
June 11, 2012
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Very truly yours,
AIR TRANSPORT SERVICES GROUP, INC.
By:
/S/ W. JOSEPH PAYNE
W. Joseph Payne
Sr. Vice President
Corporate General Counsel & Secretary
ACCEPTED AND AGREED as of the date first written above:
RED MOUNTAIN CAPITAL PARTNERS LLC
By:
/S/ J. CHRISTOPHER TEETS 6/15/2012
J. Christopher Teets
Authorized Signatory
