Item 1.01 Entry into a Material Definitive Agreement.
On May 29, 2020, Air Transport International, Inc. ("ATI"), a wholly-owned
subsidiary of Air Transport Services Group, Inc. ("ATSG"), entered into a
Payroll Support Program Agreement (the "PSP Agreement") with the U.S. Department
of the Treasury ("Treasury") with respect to the grant program under the
Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). ATI expects to
receive non-repayable grant funds totaling approximately $8.3 million, to be
paid in installments through September 2020. As a condition to receiving the
funds, ATI must refrain from conducting involuntary furloughs or reducing
employee rates of pay or benefits through September 30, 2020; limit on behalf of
itself and its affiliate air carriers, executive compensation through March 24,
2022; maintain certain air transportation service through March 1, 2022 as may
be required by the U.S. Department of Transportation pursuant to its authority
under the CARES Act; and maintain certain internal controls and records relating
to the CARES Act funds and comply with certain reporting requirements. In
addition, ATSG may not pay dividends or repurchase its shares through September
30, 2021.
On May 20, 2020, Omni Air International, LLC ("OAI"), a wholly-owned subsidiary
of ATSG, entered into a PSP Agreement with Treasury under the CARES Act. OAI
expects to receive non-repayable grant funds totaling approximately $67 million,
to be paid in installments through September 2020. OAI's receipt of the funds
are subject to conditions that are substantially similar to those described
above with respect to ATI.
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