ExpressJet Misses 10-K Deadline, Avoids Proxy Fight

ExpressJet Holdings, Inc. missed its March 17 deadline for filing its 10K. The airline said it would file last Friday during its year-end conference call last week. The company cited its continuing assessment of the current marketability of approximately $65 million face value of auction-rate securities it...

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ExpressJet Holdings, Inc. missed its March 17 deadline for filing its 10K. The airline said it would file last Friday during its year-end conference call last week. The company cited its continuing assessment of the current marketability of approximately $65 million face value of auction-rate securities it purchased in early 2008. XJT intends to file the Form 10-K no later than April 1.

Large Shareholder Questions XJT Strategy
An expert in corporate turnarounds was named to the ExpressJet Holdings board of directors as part of a deal that ends a proxy solicitation by an investor group questioning the company’s corporate strategy. When asked if this signaled shareholder disapproval of ExpressJet’s three-pronged strategy that includes own-risk, point-to-point service as well as charter and regional feeder operations, Spokesperson Kristy Nichols would only say that there is a concern across the industry to safeguard shareholder value as fuel prices rise. In addition to fuel increases, major carriers are dramatically cutting their capacity with several regionals at the minimum operations for their contracts.
In order to accommodate a new board member, ExpressJet Holdings is increasing the size of its board from eight to nine directors and is appointing Andrew N. Jent as part of an agreement between the company and Hayman Investments, L.L.C., Hayman ADVISORS, L.P., Hayman Capital Master Fund, L.P., and J. Kyle Bass. Part of the deal calls for ExpressJet to hire the LoftusGroup LLC and its principal William Loftus, former CFO at Hawaiian Airlines and former CFO at USAir and another Hayman nominee to the board, to provide consulting services to the company. In that capacity, he will attend all board meetings as an observer. The deal ended Haymon’s proxy solicitations.
Prior to joining Hayman ADVISORS in January 2008 as president, Jent was a principal at CXO, LLC, an international crisis management and turnaround firm. Mr. Jent brings more than 17 years of experience in developing and implementing appropriate strategies designed to maximize corporate value including corporate turnarounds, financial reorganizations and asset sales, and advisory and interim management engagements.
The agreement was made to resolve a potential proxy contest pertaining to the election of directors at the 2008 annual meeting of stockholders. The two parties wanted a resolution before the May meeting. ExpressJet, said Nichols had nominated its own additions to the board who would have run against Hayman’s nominees.
Jent is appointed to the newly created vacancy in Class II of the board, with a term expiring at the 2009 annual meeting of stockholders. The company's original slate of the following continuing directors in Class I of the board will be voted on at the 2008 annual meeting of stockholders: Patrick Kelly, James B. Ream and Bonnie S. Reitz.
In addition, ExpressJet agreed that if Hayman ADVISORS gives written notice prior to September 2008 that it wishes to nominate an additional director to the board, then the company will increase the size of the board further from nine to 10 directors and appoint as a new director. Loftus would serve as a Class III director with a term expiring at the 2010 annual meeting of stockholders.
"We are pleased that we were able to reach this agreement and avoid a disruptive proxy contest," said George R. Bravante, Jr., ExpressJet’s chair. "We have always sought to maintain an open dialogue with our stockholders and are prepared to have a continuing dialogue with them. We welcome Andy Jent and Bill Loftus to our board and look forward to their contributions. Our board is well aware of the challenges we face and is actively engaged in addressing those challenges."
For his part, Jent expressed confidence in ExpressJet. He also noted that that the board must ensure that the corporate strategy is designed to maximize shareholder value.
Jent has held positions of responsibility with portfolio companies of several leading private equity firms, including Hicks Muse, Warburg Pincus, Willis Stein, Fleet Equity Partners, and Burr Egan Deleage. Mr. Jent earned his Bachelor's Degree in Business Administration with an emphasis in Finance from Texas Christian University.
Loftus currently serves as a managing director for the LoftusGroup LLC, a management and consulting firm. Prior to founding the LoftusGroup in 1999, he held senior executive positions in several Fortune 100 companies, and served as senior vice president and chief financial officer of USAir. His recent consultant assignments have included positions as chief executive officer, chief financial officer and chief restructuring officer in numerous situations, including serving as executive vice president and chief financial officer for Hawaiian Airlines. Mr. Loftus earned degrees from Yale University (BA), University of Michigan Law School (JD), New York University Law School (LLM) and Harvard Business School (CFM).