<PAGE> 1
MESA
AIR GROUP
March 22, 1996
SUPPLEMENT TO
PROXY STATEMENT
DATED FEBRUARY 26, 1996
OF
MESA AIR GROUP, INC.
To the Shareholders of Mesa Air Group, Inc.
Dear Shareholder:
Since the Mesa Air Group, Inc.'s Proxy Statement dated February 26, 1996
("Proxy Statement") was mailed to you in connection with the Annual Meeting of
Shareholders scheduled for April 8, 1996 (the "Annual Meeting"), the Company has
amended the Employee Stock Option Plan (the "Employee Plan") which is a part of
the "Omnibus Plan" described in Proposal Three of the Proxy Statement and
included as Proposal 3, on the proxy card. In addition, the Company has proposed
certain changes in the proposed Articles of Incorporation of Mesa Holdings, Inc.
(Appendix "B" to the Proxy Statement) in connection with the Reincorporation
Proposal.
AMENDMENTS TO THE OMNIBUS PLAN
The Employee Plan is included in the Proxy Statement as Appendix "E."
Enclosed with this Supplement, as Appendix "E-1," is a copy of the First
Amendment to the Employee Plan (the "First Amendment"). This amendment reduces
the aggregate number of options to purchase shares of Common Stock which may be
issued under the Employee Plan from options to purchase 10,000,000 shares to
2,800,000 shares. To reflect this change, the sentence on page 21 of the Proxy
Statement under the heading "Maximum Shares Allocated," has been amended to
read:
The aggregate number of shares of Common Stock covered by
the Stock Option Plan issuable upon exercise of all Options is
2,800,000 shares, and such shares have been reserved for
issuance by the Company upon the exercise of the Options.
Prior to approval by the Board of Directors of the First Amendment, based
on the maximum allocations set forth in Schedule B, the Company could have
issued Options to purchase shares through fiscal 2005. If the Employee Plan, as
amended by the First Amendment, is approved by the Shareholders, the Company
could issue options to purchase shares, based on the maximum allocations as
provided in Schedule B, under the Employee Plan only through fiscal 1997.
Commencing in fiscal 1998, the Company would have to secure shareholder approval
to authorize additional options to be granted under the Employee Plan, as
amended. All references in the text and the charts contained in the Proxy
Statement to Options granted through termination of the Stock Option Plan are,
by this Supplement, amended to allow grants of Options only through fiscal 1997.
Schedule B of the Employee Plan has also been amended to indicate that as to Key
Employees who are not Insiders, the maximum number of Options which may be
granted in April 1996 and 1997 under the Plan.
Subject to approval of the Omnibus Plan, the Company will adopt an
amendment to its existing Key Employee Stock Option Plan to eliminate 250,519
Options available for grant under that Plan and to reduce available Options for
grant to outside directors under its original Outside Directors Stock Option
Plan from 700,000 to 110,000 Options. With these reductions, the Company would
have approximately 1,700,000 Options outstanding or available for grant under
existing stock option plans (not including the Omnibus Plan).
<PAGE> 2
CHANGES IN THE ARTICLES OF INCORPORATION OF MESA HOLDINGS, INC.
In connection with the "Reincorporation Proposal" described in Proposal Two
of the Proxy Statement, the Company has proposed certain changes in the proposed
Articles of Incorporation of Mesa Holdings, Inc. ("Mesa Nevada").
The proposed Articles of Incorporation of Mesa Nevada were included in the
Proxy Statement as Appendix "B." Enclosed with this Supplement, as Appendix
"B-1," is a copy of these Articles of Incorporation as revised. The revisions
include the addition of a new Article IX which will be inserted into the
Articles to provide that the business combination and control-share acquisition
provisions ("Anti-Takeover Provisions") contained in the Nevada Revised
Statutes, as amended, would not be applicable to the Company in the event the
Reincorporation Proposal is approved by the Company's shareholders. Accordingly,
by this Supplement, the last sentence in the first paragraph on page 13 of the
Proxy Statement under the heading "Business Combination; Control-Share
Acquisition" has been amended to read:
The Articles of Incorporation of Mesa Nevada will contain a
provision providing that the combination of the Nevada Revised
Statutes, as amended, will not apply to Mesa Nevada.
The last sentence of the last paragraph on page 13 of the Proxy Statement
under the same heading has also been amended to read as follows:
Mesa Nevada will not be subject to the Nevada "controlling interest"
statutes because the Articles of Incorporation contain a provision providing
that such provisions will not apply to Mesa Nevada.
The revisions to the Articles of Incorporation of Mesa Nevada also change
the name of the proposed resident agent in Nevada of Mesa Nevada to Burton,
Bartlett & Glogovac, 50 West Liberty Street, Suite 650, Reno, Nevada 89501.
PROXY CARDS
Shareholders who previously submitted a proxy card for the 1996 Annual
Meeting who do not wish to modify their vote need not resubmit a proxy card. The
original Proxy submitted by shareholders for the April 8, 1996 Annual Meeting is
still valid. However, a new blue proxy card is enclosed should you choose to
modify your original vote. If you desire to modify your original vote, or if you
have not yet returned your proxy, please sign, date, and return the blue proxy
card in the enclosed envelope. Thank you for your cooperation.
Very truly yours,
/s/ LARRY L. RISLEY
Larry L. Risley, Chairman of the Board
and Chief Executive Officer
/s/ GARY E. RISLEY
Gary E. Risley, Secretary
2
<PAGE> 3
APPENDIX "B-1"
ARTICLES OF INCORPORATION
OF
MESA HOLDINGS, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Nevada (particularly Chapter 78 of the Nevada Corporation Code and the
acts amendatory thereof and supplemental thereto) hereby certifies that:
ARTICLE I: The name of the corporation (hereinafter called the
"Corporation") is:
MESA HOLDINGS, INC.
ARTICLE II: The name and address of the registered agent of the
Corporation in the State of Nevada is Burton, Bartlett & Glogovac, 50 West
Liberty Street, Suite 650, Reno, Nevada 89501.
ARTICLE III: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the laws of the State
of Nevada.
ARTICLE IV: The Corporation is authorized to issue two classes of shares
of capital stock designated as "Common Stock" and "Preferred Stock." The total
number of shares of voting Common Stock which the Corporation shall have
authority to issue is Seventy-Five Million (75,000,000) shares, with no par
value. Each share of Common Stock issued and outstanding shall be entitled to
one vote. The total number of shares of Preferred Stock which the Corporation
shall have authority to issue is Two Million (2,000,000) shares, with no par
value. The Board of Directors may divide the shares of Preferred Stock into
classes or series and shall, by resolution, fix and determine the voting powers,
designations, preferences, limitations, restrictions, relative rights and
distinguishing designation of each class or series.
The Board of Directors shall have the right to create and issue, whether or
not in connection with the issuance and sale of any of its shares or other
securities, rights or options entitling the holders thereof to purchase from the
Corporation shares of its Common or Preferred Stock upon such terms, at such
times and at such prices as the Board of Directors may determine.
ARTICLE V: The name and the mailing address of the incorporator is as
follows:
Paul R. Madden
Chapman and Cutler
Two North Central Avenue
Suite 1100
Phoenix, Arizona 85004
<PAGE> 4
ARTICLE VI: The members of the governing board shall be styled
"directors." The first Board of Directors shall consist of seven directors. The
name and address of the members of the first Board of Directors who shall serve
until the first annual meeting of Shareholders are:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
--------------------------------------------------------------
<S> <C>
2325 E. 30th Street
Larry L. Risley Farmington, New Mexico 87401
2325 E. 30th Street
E. Janie Risley Farmington, New Mexico 87401
2325 E. 30th Street
J. Clark Stevens Farmington, New Mexico 87401
78805 Pina Street
Jack Braly LaQuinta, California 92253
3405 Northridge Court
Blaine M. Jones Farmington, New Mexico 87401
401 W. Broadway
George W. Pennington Bloomfield, New Mexico 87413
6501 Montana Avenue
Richard C. Poe El Paso, Texas 79925
</TABLE>
Thereafter, the number of persons to serve on the Board of Directors, their
terms of office and the manner of their election shall be fixed in the manner
provided in the Bylaws.
ARTICLE VII: To the fullest extent allowable under the Nevada Revised
Statutes, no director or officer shall have personal liability to the
Corporation or its shareholders, or to any other person or entity, for monetary
damages for breach of his fiduciary duty as a director, except where there has
been:
(a) acts or omissions which intentional misconduct, fraud or knowing
violation of law; or
(b) authorization of the unlawful payment of a dividend or other
distribution on the Corporation's capital stock, or the unlawful purchase
of its capital stock.
ARTICLE VIII: The Corporation may, to the fullest extent permitted by the
provisions of Section 78.751 of the Corporation Code of the Nevada Revised
Statutes as the same may be amended and supplemented, indemnify all persons whom
it shall have power to indemnify under such section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by such
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person. The
Corporation may pay or otherwise advance all expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding as such
expenses are incurred and in advance of the final disposition of the action,
suit or proceeding, provided that the indemnified officer or director undertakes
to repay the amounts so advanced if a court of competent jurisdiction ultimately
determines that such officer or director is not entitled to be indemnified by
the Corporation. Nothing herein shall be construed to affect any rights to
advancement of expenses to which personnel other than officers or directors of
the Corporation may be entitled under any contract or otherwise by law.
ARTICLE IX: Pursuant to Section 78.434 of the Corporation Code of the
Nevada Revised Statutes, as the same may be amended and supplemented, the
Corporation elects not to be governed by Sections 78.411 to 78.444 inclusive of
the Nevada Revised Statutes.
Dated this day of , 1996.
B-1-2
<PAGE> 5
By
--------------------------------------
Its Incorporator
STATE OF ARIZONA )
) ss.
County of
Maricopa )
The foregoing instrument was acknowledged before me this day of
, 1996, by Paul R. Madden.
--------------------------------------
Notary Public
My Commission Expires:
- ------------------------------------
B-1-3
<PAGE> 6
APPENDIX "E-1"
FIRST AMENDMENT TO MESA AIR GROUP, INC.
EMPLOYEE STOCK OPTION PLAN
Witness the terms of this First Amendment ("First Amendment") to the Mesa
Air Group, Inc. Employee Stock Option Plan dated December 1, 1995 and effective
as of June 28, 1995 (the "Plan").
The Plan is hereby amended as follows:
1. Section 2(a) is amended in its entirety to read as follows:
(a) Description of Stock and Maximum Shares Allocated. The stock
subject to the provisions of this Plan and issuable upon exercise of the
Options are shares of the Company's Common Stock, no par value, which
may be either unissued or treasury shares, as the Board may from time to
time determine. Subject to adjustment as provided in Section 6, the
aggregate number of shares of Common Stock covered by the Plan issuable
upon exercise of all Options shall be 2,800,000 Shares, which shares
shall be reserved for use upon the exercise of the Options. The shares
available for Options and all other shares of Common Stock of the
Company shall be referred to as the "Shares."
2. Section 3(b)(1) and 3(b)(2) are deleted in their entirety and
Section 3(b) is amended in its entirety to read as follows:
(b) Date of Grants; Allotment, Adjustment. Options shall be
granted to Insiders as set forth in Schedule "B" on June 28, 1995 and on
April 1, 1996 and 1997 and with respect to non-Insiders as determined by
the Chief Executive Officer of the Company up to a maximum amount of
370,000 Options per year. If an Insider is employed by the Company after
June 28, 1995, Insider shall, upon the first day of employment, be
granted a pro rata portion of the Options as set forth in the column
labeled "April 1, 1996 and 1997" shown on Schedule "B" (collectively,
the "Pro Rata Options") and Options shall be granted to such Insider on
each succeeding April 1 in the amounts set forth in Schedule "B." The
amount of Pro Rata Options to be granted to each Insider shall be
calculated by dividing the number of days prior to April 1 by the number
of days in the calendar year and multiplying the quotient by the number
of Options listed in Schedule "B" to be allotted to that Insider.
3. Section 3(e) is amended in its entirety to read as follows:
(e) Duration of Plan. The term of the Plan, unless previously
terminated by the Board, is ten years or June 28, 2005. No Option shall
be granted under the Plan unless granted within ten years after the
adoption of the Plan by the Board, but Options outstanding on that date
shall not be terminated or otherwise affected by virtue of the Plan's
expiration.
4. Schedule "B" is deleted in its entirety and the attached Schedule
"B" is substituted therefor.
This First Amendment has been executed by the undersigned on the 22nd day
of March, 1996.
MESA AIR GROUP, INC.
By /s/ CLARK STEVENS
------------------------------------
President
<PAGE> 7
SCHEDULE "B"
<TABLE>
<CAPTION>
APRIL 1, 1996
JUNE 28, 1995 AND 1997
POSITION OPTION AMOUNTS(1) OPTION AMOUNTS(2)
- ------------------------------------------- ----------------- -----------------
<S> <C> <C>
MESA AIR GROUP, INC.:
Chief Executive Officer.................... 300,000 150,000
Chief Operating Officer.................... 160,000 80,000
Chief Financial Officer.................... 100,000 50,000
Chief Legal Officer........................ 100,000 50,000
</TABLE>
- ---------------
(1) Granted subject to the approval of the Plan by the Shareholders. On June 28,
1995, the Company also granted Options to 34 Key Employees to purchase an
aggregate of 640,000 shares of Common Stock.
(2) April 1, 1996 and 1997 Option Amounts are fixed as to Insiders. As to Key
Employees who are not Insiders, options to purchase up to 370,000 shares may
be granted to the group comprised of approximately 36 Key Employees. It is
anticipated that awards to each of the members of the Key Employee group in
1996 and 1997 will range from 2,500 options to a maximum of 40,000 options.
