Business Context and Reporting Period
Company: Allegiant Travel Company
Filing Type: Form 8-K (Current Report)
Date of Report: March 19, 2009
Event: Entry into a Material Definitive Agreement and Termination of a Material Definitive Agreement.
Key Financial Metrics
This filing does not provide revenue, profit, cash flow, margin, debt, or liquidity figures. The transaction involves the issuance of 41,450 shares of common stock as consideration for the acquisition of software rights.
Material Changes
- Acquisition of Technology: The Company acquired exclusive rights to its travel applications software operating system, previously licensed from CMS Solutions, Inc.
- Operational Control: The acquisition eliminates reliance on the outside vendor (CMS Solutions) over the next year, granting full control over system development and Internet offerings.
- Transaction Structure: The deal involved a perpetual license between CMS Solutions and RPW Consolidated Information Systems, Inc. ("RPW"), followed by the merger of RPW into a wholly owned subsidiary of Allegiant.
- Termination: The Permanent Software License Agreement dated August 1, 2001, between CMS Solutions and the Company was terminated.
Guidance, Outlook, and Management Commentary
- Vendor Support: CMS Solutions is obligated to support the system for up to 12 months for a monthly fee.
- Non-Compete: CMS Solutions is precluded from developing or supporting similar travel software for five years. Robert P. Wilson, III (former CMS employee, now VP of Information Systems) is restricted from similar development during employment and for six months post-termination.
- Employment Terms: Mr. Wilson receives a base salary, bonus plan participation, and six months' severance for termination without cause or resignation for good reason.
- Share Repurchase Right: The Company retains the right to repurchase up to 34,300 of the issued shares at a predetermined price if Mr. Wilson resigns or is terminated for cause within two years.
Investor Verification Checklist
- Verify the impact of the 41,450 new shares on existing shareholder dilution.
- Confirm the specific monthly fee amount for the 12-month support period from CMS Solutions.
- Review the predetermined price for the potential repurchase of 34,300 shares.
- Assess the timeline for the complete transition of software development from CMS Solutions to internal teams.