DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Under
Rule 14a-12
ATLAS AIR WORLDWIDE HOLDINGS, INC.
(Name of Registrant as Specified In
Its Charter)
N/A
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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o
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(4)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth in the amount on which the filing fee is calculated
and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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o
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Fee paid previously with preliminary materials.
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o
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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ATLAS AIR WORLDWIDE HOLDINGS,
INC.
2000 Westchester Avenue
Purchase, New York
10577-2543
April 16,
2008
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to
attend the 2008 Annual Meeting of Stockholders of Atlas Air
Worldwide Holdings, Inc. The Annual Meeting will be held at
10:00 a.m., local time, on Wednesday, May 21, 2008, at
the offices of Ropes & Gray LLP, 1211 Avenue of the
Americas, 38th Floor, New York, NY 10036.
The business to be conducted at the meeting is outlined in the
attached Notice of Annual Meeting and Proxy Statement. The
annual report for the year ended December 31, 2007 is also
enclosed.
The shares represented by your proxy will be voted at the Annual
Meeting as therein specified (if the proxy is properly executed,
returned and not revoked). Accordingly, we request that you
promptly sign, date and mail the enclosed proxy in the
accompanying prepaid envelope provided for your convenience. You
may revoke your proxy at any time before its use by delivering
to the Secretary of the Company a written notice of revocation
or a duly executed proxy bearing a later date or by attending
the Annual Meeting and voting in person. Attending the Annual
Meeting in and of itself will not constitute a revocation of a
proxy.
Sincerely,
EUGENE I. DAVIS
Chairman of the Board of Directors
ATLAS AIR WORLDWIDE HOLDINGS,
INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK
10577-2543
Notice of
2008 Annual Meeting of Stockholders
To be held on May 21, 2008
We will hold the 2008 Annual Meeting of Stockholders of Atlas
Air Worldwide Holdings, Inc., a Delaware corporation, on
Wednesday, May 21, 2008, at 10:00 a.m., local time, at
the offices of Ropes & Gray LLP, 1211 Avenue of the
Americas, 38th Floor, New York, NY 10036, for the following
purposes:
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1.
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To elect a board of directors to serve until the 2009 Annual
Meeting of Stockholders or until their successors are elected
and qualified;
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2.
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To ratify the selection of PricewaterhouseCoopers LLP as the
independent registered public accounting firm for the Company
for the fiscal year ended December 31, 2008;
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3.
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To approve an amendment to our 2007 Incentive Plan to increase
the number of shares that are available for issuance of awards
under such plan; and
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4.
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To transact such other business, if any, as may properly come
before the meeting and any adjournments thereof.
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The foregoing matters are described in more detail in the Proxy
Statement that is attached to this notice.
Only stockholders of record at the close of business on
March 24, 2008, which date has been fixed as the record
date for notice of the Annual Meeting, are entitled to receive
this notice and to vote at the meeting and any adjournments
thereof.
YOUR VOTE IS VERY IMPORTANT. WE HOPE YOU WILL ATTEND THIS ANNUAL
MEETING IN PERSON, BUT IF YOU CANNOT, PLEASE SIGN AND DATE THE
ENCLOSED PROXY. RETURN THE PROXY IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU
ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON EVEN IF YOU
HAVE RETURNED A PROXY. IF YOU HAVE RECEIVED MORE THAN ONE PROXY
CARD, IT IS AN INDICATION THAT YOUR SHARES ARE REGISTERED IN
MORE THAN ONE ACCOUNT. PLEASE COMPLETE, DATE, SIGN AND RETURN
EACH PROXY CARD YOU RECEIVE.
By Order of the Board of Directors
WILLIAM J. FLYNN
President and Chief Executive Officer
April 16, 2008
ATLAS AIR
WORLDWIDE HOLDINGS, INC.
2000 Westchester Avenue
Purchase, New York
10577-2543
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
MAY 21, 2008
GENERAL
INFORMATION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors (the
Board of Directors or Board) of Atlas
Air Worldwide Holdings, Inc., a Delaware corporation
(AAWW), for use at the Annual Meeting of
Stockholders (the Annual Meeting) to be held on
Wednesday, May 21, 2008, at the offices of
Ropes & Gray LLP, 1211 Avenue of the Americas,
38th Floor, New York, NY 10036 at 10:00 a.m., local
time, and at any adjournments or postponements of the Annual
Meeting. It is expected that this Proxy Statement and the
accompanying proxy will first be mailed or delivered to
stockholders beginning on or about April 16, 2008. Proxies
may be solicited in person, by telephone or by mail, and the
costs of such solicitation will be borne by AAWW.
AAWW was incorporated in Delaware in 2000 and is a holding
company with two principal operating subsidiaries
Atlas Air, Inc. (Atlas), which is wholly-owned, and
Polar Air Cargo Worldwide, Inc. (Polar), an entity
in which AAWW maintains a 51% economic interest and a 75% voting
interest. Except as otherwise noted, Atlas, Polar and AAWW
(along with AAWWs other subsidiaries) are collectively
referred to herein as the Company, AAWW,
we, us, or our.
ABOUT THE
ANNUAL MEETING
At our Annual Meeting, the holders of shares of our Common
Stock, par value $0.01 per share (the Common Stock),
will act upon the matters outlined in the notice of meeting on
the cover page of this Proxy Statement, in addition to
transacting such other business, if any, as may properly come
before the meeting or any adjournments thereof. The shares
represented by your proxy will be voted as indicated on your
proxy, if properly executed. If your proxy is properly signed
and returned, but no directions are given on the proxy, the
shares represented by your proxy will be voted:
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FOR the election of the director nominees named
herein, to serve until the 2009 Annual Meeting or until their
successors are elected and qualified (Proposal No. 1).
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FOR ratifying the selection of
PricewaterhouseCoopers LLP as the independent registered public
accounting firm for the Company for the fiscal year ended
December 31, 2008 (Proposal No. 2).
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FOR approving an amendment to AAWWs 2007
Incentive Plan (the Incentive Plan) to increase the
number of shares that are available for issuance of awards under
that plan (Proposal No. 3).
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In addition, if any other matters are properly submitted to a
vote of stockholders at the Annual Meeting, the accompanying
form of proxy gives the proxy holders the discretionary
authority to vote your shares in accordance with their best
judgment on that matter. Unless you specify otherwise, it is
expected that your shares will be voted on those matters as
recommended by our Board of Directors, or if no recommendation
is given, in the proxy holders discretion.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 2008
This Proxy Statement and the Atlas 2007 Annual Report are
available for
downloading, viewing and printing at
http://www.ezodproxy.com/AtlasAir/2008
2
Record
Date and Voting Securities
All of our stockholders of record at the close of business on
March 24, 2008 (the Record Date) are entitled
to notice of, and to vote at, the Annual Meeting and any
adjournments or postponements thereof. As of the Record Date,
there were 21,676,876 shares of Common Stock issued and
outstanding. Each outstanding share of Common Stock will be
entitled to one vote on each matter considered at the Annual
Meeting. A description of certain restrictions on voting by
stockholders who are not U.S. citizens, as
defined by applicable laws and regulations, can be found in
Additional Information Limited Voting by
Foreign Owners at the end of this Proxy Statement.
Shares
Registered in the Name of a Bank, Broker or Nominee
Brokerage firms and banks holding shares in street name for
customers are required to vote such shares in the manner
directed by their customers. If your shares are held in a stock
brokerage account or by a bank or other nominee, you are
considered the beneficial owner of shares held in street name,
and these proxy materials are being forwarded to you by your
broker, bank or nominee which is considered, with respect to
those shares, the stockholder of record. As the beneficial
owner, you have the right to direct your broker, bank or other
nominee how to vote and are also invited to attend the meeting.
Your broker, bank or nominee has enclosed herein or separately
provided a voting instruction card for you to use in directing
the broker, bank or nominee how to vote your shares. However,
since you are not the stockholder of record, you may not vote
these shares in person at the meeting unless you obtain a signed
proxy from the record holder giving you the right to vote these
shares.
Quorum,
Vote Required
A majority of the outstanding shares of Common Stock as of the
Record Date must be present, in person or by proxy, at the
Annual Meeting in order to have the required quorum for the
transaction of business. If the number of shares of Common Stock
present, in person and by proxy, at the Annual Meeting does not
constitute the required quorum, the Annual Meeting may be
adjourned to a subsequent date for the purpose of obtaining a
quorum.
Proposal 1: Election of
Directors. Members of the Board (each, a
Director and collectively, the
Directors) are elected by a plurality of the votes
cast at the Annual Meeting. This means that the director
nominees with the most votes will be elected.
Proposal 2: Ratification of the selection of
PricewaterhouseCoopers LLP as the independent registered public
accounting firm for the Company for the fiscal year ended
December 31, 2008. The affirmative vote of a
majority of the shares represented at the Annual Meeting, either
in person or by proxy, and entitled to vote on this proposal is
required to ratify the selection of PricewaterhouseCoopers.
Proposal 3: Approval of an amendment to AAWWs 2007
Incentive Plan. The affirmative vote of a
majority of the shares represented at the Annual Meeting, either
in person or by proxy, and entitled to vote on this proposal is
required to approve the amendment to the 2007 Incentive Plan
that would increase the number of shares available for issuance
of awards thereunder.
Shares of Common Stock that are voted FOR,
AGAINST, or ABSTAIN are treated as being
present at the Annual Meeting for purposes of establishing a
quorum. An abstention will have the effect of a negative vote
with regard to the proposals ratifying the selection of our
independent auditors and amending the 2007 Incentive Plan;
however, as each nominee to the Board of Directors must receive
a plurality of the votes cast at the Annual Meeting in order to
be elected as a director, withholding a vote for a nominee,
which is tantamount to an abstention, will have no effect on the
election of director nominees.
If you hold your shares in street name through a broker or other
nominee, your broker or nominee may not be permitted to exercise
voting discretion with respect to a particular matter to be
acted upon. Thus, if you do not give your broker or nominee
specific instructions regarding that matter, your shares may not
be voted. Such shares, commonly known as broker
non-votes, will not be counted in determining the number
of shares necessary for approval of a specific matter but will
be counted in determining whether there is a quorum
3
present at the Annual Meeting. As a result, unlike abstentions,
broker non-votes will have no effect on the outcome of the vote
for amending the 2007 Incentive Plan. With respect to the
election of directors and ratifying the selection of our
independent auditors, even if your broker or nominee does not
receive specific voting instructions from you, he or she will be
permitted to vote your shares in respect of these two matters.
Revocability
of Proxies
If you hold your shares registered in your name, you may revoke
your proxy at any time before its use by delivering to the
Secretary of AAWW a written notice of revocation or a duly
executed proxy bearing a later date or by attending the Annual
Meeting and voting in person. Attending the Annual Meeting in
and of itself will not constitute a revocation of a proxy.
If your shares are held in street name and you wish to revoke
your proxy and vote at the Annual Meeting, you must contact your
broker, bank or other nominee and follow the requirements set by
your broker, bank or nominee. We cannot guarantee you that you
will be able to revoke your proxy or attend and vote at the
Annual Meeting.
Proxy
Solicitation
This proxy solicitation is being made by our Board, and the cost
of soliciting proxies will be borne by us. We expect to
reimburse brokerage firms, banks, custodians and other persons
representing beneficial owners of shares of Common Stock for
their reasonable out-of-pocket expenses in forwarding
solicitation material to such beneficial owners. Proxies may be
solicited by certain of our directors, officers and other
employees, without additional compensation, in person or by
telephone,
e-mail or
facsimile. We have retained Morrow & Co., LLC,
470 West Avenue, Stamford, Connecticut 06902, to assist us
in the solicitation of proxies and will pay Morrow &
Co. a fee estimated not to exceed $6,000, plus out-of-pocket
expenses.
Proxy
Tabulation
Proxies and ballots will be received and tabulated by an
independent entity that is not affiliated with us. The
inspectors of election will also be independent of us. Comments
on written proxy cards will be provided to the Secretary of AAWW
without disclosing the vote unless the vote is necessary to
understand the comment.
STOCK
OWNERSHIP
The following table sets forth, as of March 28, 2008,
information regarding beneficial ownership of our Common Stock
by:
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Each stockholder who is known by us to own beneficially 5% or
greater of the Common Stock;
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Each Director;
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Each of our Named Executive Officers; and
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All of our Executive Officers and members of our Board as a
group.
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Unless otherwise indicated, each stockholder has sole voting and
investment power with respect to the shares of Common Stock
beneficially owned by that stockholder. The number of shares of
Common Stock beneficially owned is determined under rules issued
by the Securities and Exchange Commission (the SEC).
This information is not necessarily indicative of ownership for
any other purpose. Under these rules, beneficial ownership
includes any shares as to which the individual or entity has
sole or shared voting power or investment power and any shares
as to which the individual or entity has the right to acquire
beneficial ownership within 60 days of March 28, 2008,
through the exercise of any stock option or other right. The
number of shares of our Common Stock issued and outstanding as
of March 28, 2008 was 21,676,876.
4
Beneficial
Ownership Table
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Number of Shares
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Percentage of
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Beneficially
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Outstanding Shares
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Name and Address of Beneficial Owner
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Owned (a)
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Beneficially Owned
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5% Stockholders
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HMC Atlas Air, L.L.C.(b)
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8,389,690
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38.7
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%
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555 Madison Avenue,
16th Floor
New York, NY 10022
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Oppenheimer Funds, Inc.(c)
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1,566,480
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7.2
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%
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Two World Financial Center
225 Liberty Street
New York, NY 10281
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Directors:
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Robert F. Agnew
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13,358
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*
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Timothy J. Bernlohr
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10,157
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*
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Keith E. Butler
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20,582
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*
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Eugene I. Davis
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21,286
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*
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Jeffrey H. Erickson
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69,223
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*
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James S. Gilmore
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20,857
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*
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Carol B. Hallett
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10,857
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*
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Frederick McCorkle
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18,368
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*
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Director and Named Executive Officer:
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William J. Flynn
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105,083
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*
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Other Named Executive Officers:
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John W. Dietrich
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94,107
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*
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Jason Grant
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20,559
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*
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Adam R. Kokas
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20,239
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*
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Ronald A. Lane
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25,637
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Michael L. Barna
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1,719
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*
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All Directors and Executive Officers as a group
(18 persons, including the persons listed above)
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511,538
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2.4
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%
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*
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Represents less than 1% of the
outstanding shares of Common Stock.
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(a)
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For members of the Board of
Directors, includes restricted stock units scheduled to vest at
the time of the Annual Meeting. For Executive Officers, includes
shares subject to options exercisable as of March 28, 2008
or within 60 days thereafter as follows:
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William J. Flynn
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24,433
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Jason Grant
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8,119
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Adam R. Kokas
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5,062
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Ronald A. Lane
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9,469
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Michael L. Barna
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(Executive Officers other than
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20,351
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Named Executive Officers)
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(b)
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This information is based on a
Schedule 13D/A dated September 6, 2007 and filed with
the SEC on September 11, 2007 for HMC Atlas Air, L.L.C.,
along with Harbinger Capital Partners Offshore Manager, L.L.C.,
HMC Investors, L.L.C., Harbinger Capital Partners Special
Situations Fund, L.P., Harbinger Capital Partners Special
Situations GP, LLC, HMC-New York, Inc., Harbert Management
Corporation, Philip Falcone, Raymond J. Harbert, and Michael D.
Luce. We have not made any independent determination as to the
beneficial ownership of such stockholder and are not restricted
in any determination we may make by reason of inclusion of such
stockholder or its shares in this table.
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(c)
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This information is based on a
Schedule 13G dated February 4, 2008 and filed with the
SEC on such date. We have not made any independent determination
as to the beneficial ownership of such stockholder and are not
restricted in any determination we may make by reason of
inclusion of such stockholder or its shares in this table.
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5
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the Exchange Act), requires certain of our
Executive Officers, as well as our Directors and persons who own
more than ten percent (10%) of a registered class of AAWWs
equity securities, to file reports of ownership and changes in
ownership with the SEC. Based solely on our review of the copies
of such forms received by us or written representations from
reporting persons, we believe that during the last fiscal year
all Executive Officers and Directors complied with their filing
requirements under Section 16(a) for all reportable
transactions during the year, and we have no reason to
understand that our 10% stockholders have not complied with
their filing requirements under Section 16(a).
Certain
Relationships and Related Person Transactions
Our Code of Ethics Applicable to our Chief Executive Officer,
Senior Financial Officers and Members of the Board of Directors
(the Code of Ethics), which is available on our
website at www.atlasair.com, provides that our executive
officers and Directors should follow the guidelines outlined in
our Employee Compliance Manual and communicate any potential or
actual conflicts of interest (however immaterial) to the
Chairman of the Audit Committee of the Board of Directors, so
that an objective, third-party review can be made of the matter.
Pursuant to our Audit Committee Charter, which is also available
on our website at www.atlasair.com, the Audit Committee
reviews reports and disclosures of insider and affiliated party
transactions
and/or
conflicts of interest or potential conflicts of interest
involving corporate officers and members of the Board of
Directors. The Audit Committee, where appropriate, will also
review and approve any involvement of corporate officers and
members of the Board of Directors in matters that might
constitute a conflict of interest or that may otherwise be
required to be disclosed as a related party transaction under
SEC regulations. Our Nominating and Governance Committee
separately determines Director Independence as summarized in
Director Independence below.
Transactions
with Directors
In June 2007, DHL acquired a 49% economic interest and a 25%
voting interest in Polar (the DHL Transaction). On
June 28, 2007, we made a $250,000 lump sum payment to
Jeffrey H. Erickson, currently a Director who served as our
former President and Chief Executive Officer, as required by the
terms and provisions of his Retirement and General Release
Agreement. The payment represented a success fee that was
payable to Mr. Erickson upon consummation of the DHL
Transaction within a prescribed period of time and that equaled
10% of the fee paid to certain investment bankers associated
with such transaction.
Transactions
with Former Executive Officers
On September 17, 2007, Michael L. Barna resigned as Senior
Vice President and Chief Financial Officer of the Company in
order to pursue other interests. In connection with his
resignation, Mr. Barna received severence payments equal to
18 months of his annual base salary (payable in accordance
with the Companys normal pay schedule), continued coverage
under the Companys health plan for 18 months (such
covereage to cease in the event that Mr. Barna obtains
comparable coverage in connection with subsequent employment),
and up to $20,000 to cover attorneys fees and certain
other expenses.
Ronald A. Lane, who served as the Companys Senior Vice
President and Chief Marketing Officer from April 2003 to March
2007 and Senior Vice President and Special Advisor from April
2007 to December 2007, retired as an Executive Officer and
full-time employee at year-end 2007. On April 4, 2008, the
Company entered into an employment agreement with Mr. Lane
pursuant to which he will serve as a Special Advisor to the
Company through December 31, 2009 and under which he will
be compensated at a minimum annual rate of $240,000. Upon
execution of this agreement, Mr. Lane received a lump-sum
cash severance payment of $426,080 that was otherwise due him
under the terms and provisions of a prior employment agreement.
The remaining $100,000 of severance otherwise due Mr. Lane
under that prior agreement will be paid to him on
December 31, 2010, one year after the expiration of the
current employment arrangement.
6
PROPOSAL 1
ELECTION
OF DIRECTORS
Our By-laws provide for no fewer than one and no more than
eleven directors, with the exact number to be fixed by our Board
of Directors. Our Board currently consists of nine Directors.
The current term of all of our Directors expires at the Annual
Meeting.
All of our current Directors, except for Jeffrey H. Erickson,
who has decided not to stand for election, are standing for
election at the Annual Meeting. The Board wishes to thank
Mr. Erickson for his service to the Company over the past
six years. With Mr. Ericksons impending departure,
the Board has elected to reduce the number of Directors that
constitutes the entire Board from nine persons to eight,
effective as of the date of the Annual Meeting.
Our other eight Directors have been recommended for nomination
by our Nominating and Governance Committee and nominated by our
Board for election at the Annual Meeting. In making its
recommendations for nomination, the Nominating and Governance
Committee evaluated the size and composition of the Board and
reviewed each members skills, characteristics and
independence.
Each nominee has consented to be named as a nominee for election
as a Director and has agreed to serve if elected. Except as
otherwise described below, if any of the nominees is not
available for election at the time of the Annual Meeting,
discretionary authority will be exercised to vote for
substitutes designated by our Board of Directors, unless the
Board chooses to reduce the number of directors. Management is
not aware of any circumstances that would render any nominee
unavailable. At the Annual Meeting, Directors will be elected to
hold office until the 2009 Annual Meeting or until their
successors are elected and qualified, as provided in our By-laws.
The following list sets forth the names of our incumbent
Directors up for election and our Director nominee. Additional
biographical information concerning these individuals is
provided as of March 28, 2008 in the text following the
list.
Eugene I. Davis
Robert F. Agnew
Timothy J. Bernlohr
Keith E. Butler
William J. Flynn
James S. Gilmore III
Carol B. Hallett
Frederick McCorkle
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
THE ELECTION OF EACH OF THE NOMINEES NAMED ABOVE.
7
Nominees
for Director
Eugene I. Davis, age 53, has been the Chairman of
our Board of Directors and a member of our Audit Committee and
our Compensation Committee since July 2004 and of our Nominating
and Governance Committee since its establishment in March 2006.
Mr. Davis is Chairman and Chief Executive Officer of
PIRINATE Consulting Group, LLC, a privately held consulting firm
specializing in turnaround management, merger and acquisition
consulting and hostile and friendly takeovers, proxy contests
and strategic planning advisory services for domestic and
international public and private business entities. Since
forming PIRINATE in 1997, Mr. Davis has advised, managed,
sold, liquidated and served as a Chief Executive Officer, Chief
Restructuring Officer, Director, Committee Chairman and Chairman
of the Board of a number of businesses operating in diverse
sectors such as telecommunications, automotive, manufacturing,
high-technology, medical technologies, metals, energy, financial
services, consumer products and services, import-export, mining
and transportation and logistics. Previously, Mr. Davis
served as President, Vice Chairman and Director of Emerson Radio
Corporation and Chief Executive Officer and Vice Chairman of
Sport Supply Group, Inc. He began his career as an attorney and
international negotiator with Exxon Corporation and Standard Oil
Company (Indiana) and as a partner in two Texas-based law firms,
where he specialized in corporate/securities law, international
transactions and restructuring advisory. Mr. Davis holds a
bachelors degree from Columbia College, a master of
international affairs degree (MIA) in international law and
organization from the School of International Affairs of
Columbia University, and a Juris Doctorate from Columbia
University School of Law. Mr. Davis is also a member of the
Board of Directors of Delta Airlines, Inc., American Commercial
Lines, Inc., Knology, Inc., Foamex, Inc., and Silicon Graphics
Inc.
Robert F. Agnew, age 57, has been a member of our
Board since July 2004, the Chariman of our Audit Committee since
June 2006 and a member of our Nominating and Governance
Committee since its establishment in March 2006. Mr. Agnew
is President and Chief Executive Officer of Morten
Beyer & Agnew, an international aviation consulting
firm experienced in the financial modeling and technical due
diligence of airlines and aircraft funding. Mr. Agnew has
over 30 years experience in aviation and marketing
consulting and has been a leading provider of aircraft
valuations to banks, airlines and other financial institutions
worldwide. Previously, he served as Senior Vice President of
Marketing and Sales at World Airways. Mr. Agnew began his
commercial aviation career at Northwest Airlines, where he
concentrated on government and contract sales, schedule planning
and corporate operations research. Earlier, he served in the
U.S. Air Force as an officer and instructor navigator with
the Strategic Air Command. Mr. Agnew is a graduate of
Roanoke College and holds a masters degree in business
administration from the University of North Dakota. In addition,
Mr. Agnew serves on the board of The National Defense
Transportation Association and chairs the Military Airlift
Committee for the Commander of the USAF Air Mobility Command.
Timothy J. Bernlohr, age 49, has been a member of
our Board since June 2006 and a member of our Audit Committee
and Nominating and Governance Committee since that time.
Mr. Bernlohr is the managing member of TJB Management
Consulting, LLC, which specializes in providing project specific
consulting services to businesses in transformation, plan
administration, and interim executive management.
Mr. Bernlohr founded the consultancy in 2005.
Mr. Bernlohr is the former President and Chief Executive
Officer of RBX Industries, Inc., which was a nationally
recognized leader in the design, manufacture, and marketing of
closed cell rubber and plastic materials to the automotive,
construction, and industrial markets. Prior to joining RBX in
1997, Mr. Bernlohr spent 16 years in the International
and Industry Products division of Armstrong World Industries,
where he served in a variety of management positions.
Mr. Bernlohr is also a director of Cadence Innovation, WCI
Steel, Trident Resources Corporation, RAB Food Group, LLC,
General Insulation Company and Zemex Minerals, Inc.
Mr. Bernlohr is a graduate of Penn State University.
Keith E. Butler, age 54, has been a member of our
Board since July 2004 and a member of our Audit Committee since
June 2006. Mr. Butler is the sole owner of BCS Placements,
LLC, a broker dealer registered with the National Association of
Securities Dealers, Inc. Mr. Butler joined Paine Webber in
1997, which later merged with UBS Warburg, a global securities
and investment banking firm. He is currently a financial advisor
and was an investment banker with UBS Warburg until 2003.
Mr. Butlers focus was on the transportation sector
(air, shipping and rail), including the financing of freighter
aircraft. Before Paine Webber merged with UBS, Mr. Butler
was a Managing Director at Paine Webber, where he launched and
built the first structured
8
finance product group for transportation assets and at Alex
Brown, where he initiated the transportation debt practice.
Mr. Butler graduated from Harvard College and received a
masters degree in business administration from Harvard
Business School.
William J. Flynn, age 54, has been our President and
Chief Executive Officer since June 2006 and has been a member of
the Board of Directors since May 2006. Mr. Flynn has had a
30 year career in international supply chain management and
freight transportation. Prior to joining us, Mr. Flynn
served as President and Chief Executive Officer of GeoLogistics
Corporation since 2002. He was initially recruited by the
private equity sponsors of the company in 2002 to lead that
companys turnaround to profitability and the exit strategy
for the investors. The company was acquired in September 2005 by
PWC Logistics Corporation of Kuwait. Prior to his tenure at
GeoLogistics Corporation, from 2000 until 2002, Mr. Flynn
served as Senior Vice President to the Merchandise Service Group
of CSX Transportation, Inc., the operating unit serving the
traditional railcar traffic of CSX Transportation, Inc., one of
the largest Class 1 railroads operating in the
U.S. Mr. Flynn spent over 20 years with
Sea-Land
Service, Inc., a global provider of container shipping services.
He served in roles of increasing responsibility in the U.S.,
Latin America and Asia. He was ultimately responsible for
Sea-Lands
consolidated operations in Asia. Mr. Flynn is also a
director of Allied Waste Industries, Inc. and Horizon Lines,
Inc. He holds a Bachelors degree, summa cum laude, in
Latin American studies from the University of Rhode Island and a
Masters degree in the same field from the University of Arizona.
James S. Gilmore III, age 58, has been a member of
our Board since July 2004, a member of our Nominating and
Governance Committee since its establishment in March 2006 and
the Chairman of such Committee since June 2006.
Mr. Gilmore, who is currently a candidate for the United
States Senate seat from the Commonwealth of Virginia, has been a
partner in the law firm of Kelley Drye & Warren LLP
since 2002 and was Governor of the Commonwealth of Virginia from
1998 to 2002. He is currently the Chair of his firms
Homeland Security Practice Group, and his practice also focuses
on corporate, technology, information technology and
international matters. In 2003, President George W. Bush
appointed Mr. Gilmore to the Air Force Academy Board of
Visitors, and he was elected Chairman of the Air Force Board in
the fall of 2003. Former Governor Gilmore served as the Chairman
of the Republican National Committee from 2001 to 2002. He also
served as Chairman of the Congressional Advisory Panel to Assess
Domestic Response Capabilities for Terrorism involving Weapons
of Mass Destruction, a national panel established by Congress to
assess federal, state and local government capabilities to
respond to the consequences of a terrorist attack. Also known as
the Gilmore Commission, this panel was influential
in developing the Office of Homeland Security. Mr. Gilmore
is a graduate of the University of Virginia and the University
of Virginia School of Law. He is also a director of Barr
Laboratories, Windmill International, Rampart Financial
Services, Inc. and Cypress Communications, Inc., and serves on
the advisory board of Unisys Corporation.
Carol B. Hallett, age 70, has been a member of our
Board since June 2006 and a member of our Compensation Committee
since that time. She has been of counsel at the
U.S. Chamber of Commerce since 2003. From 1995 to 2003,
Ms. Hallett was President and Chief Executive Officer of
the Air Transport Association of America (ATA),
Washington, D.C., the nations oldest and largest
airline trade association. Prior to joining the ATA in 1995,
Ms. Hallett served as senior government relations advisor
with Collier, Shannon, Rill & Scott from 1993 to 1995.
Ms. Hallett has also been a member of the board of
directors of Mutual of Omaha Insurance Company since 1998, Rolls
Royce-North America since 2003 and Wackenhut Services Inc.,
since 2006. From 2003 to 2004, Ms. Hallett was chair of
Homeland Security at Carmen Group, Inc. where she helped to
develop the homeland security practice for the firm.
Additionally, from 1993 to 2003, she was a director of Fleming
Companies, Inc., and from 1993 to 2002, she was a director of
Litton Industries.
Frederick McCorkle, age 63, has been a member of our
Board and Compensation Committee since July 2004 and a member of
our Nominating and Governance Committee since its establishment
in March 2006. General McCorkle has served as Chairman of the
Compensation Committee since June 2006. General McCorkle retired
from the U.S. Marine Corps in October 2001 after serving
since 1967. He last served as Deputy Commandant for Aviation,
Headquarters, Marine Corps, Washington, D.C. General
McCorkle is a graduate of East Tennessee State University and
holds a masters degree in Administration from Pepperdine
University. He is currently a Senior Advisor and a member of the
board of directors of GKN Aerospace
9
Services. He is also a member of the board of directors of Lord
Corporation, Jura Corporation and Rolls-Royce North America. In
addition to his board memberships, General McCorkle serves as a
Senior Strategic Advisor for Optical Air Data Systems and the
Purdy Corporation.
CORPORATE
GOVERNANCE, BOARD AND COMMITTEE MATTERS
Our Board held seven in person meetings in 2007. It also held 11
telephonic meetings in 2007, including telephonic meetings held
principally to discuss monthly financial results. Pursuant to
Board policy, Directors are expected to attend all Board and
committee meetings, as well as our annual meeting of
stockholders. Each Director attended at least 75% of the
meetings of the Board and committees of the Board on which such
Director serves. All of the Directors who were serving at the
time of our 2007 annual meeting of stockholders attended the
2007 annual meeting.
Executive
Sessions
The outside members of the Board, as well as our Board
committees, meet in executive session (with no management
directors or management present) on a regular basis, and upon
the request of one or more outside Directors, at least two times
a year. The sessions are generally scheduled and chaired by
Eugene I. Davis, the Chairman of the Board, and executive
sessions of our committees were chaired, respectively, by Robert
F. Agnew, Chairman of the Audit Committee, Frederick McCorkle,
Chairman of the Compensation Committee, or James S. Gilmore III,
Chairman of the Nominating and Governance Committee, as
applicable. The executive sessions include whatever topics the
outside Directors deem appropriate.
Compensation
of Outside Directors
Cash Compensation. As of the date of this
Proxy Statement, each of our outside Directors is paid $50,000
in cash compensation annually, which is payable quarterly in
advance, and also receives the following additional cash
compensation as applicable:
Standing
Committee Membership
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Each member of the Audit Committee, $15,000 annually;
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Each member of the Compensation Committee, $5,000
annually; and
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Each member of the Nominating and Governance Committee, $5,000
annually.
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Chairman
Position
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Chairman of the Board, $100,000 annually ($75,000 annually prior
to January 1, 2008); and
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Chairman of each of the Audit Committee, the Compensation
Committee and the Nominating and Governance Committee, $25,000
annually.
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Meeting
Fees
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For each meeting of the Board or a Committee of the Board,
including any ad hoc committee, attended in person by a member,
a fee to such member of $1,500 or $3,000 if such member is its
Chairman;
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For each meeting of the Board or a Committee of the Board,
including any ad hoc committee, attended via teleconference or
videoconference, a fee to each such member of $500 or $1,000 if
such member is its Chairman; and
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For each meeting of the Board or a Committee of the Board,
including any ad hoc committee, attended in person by a member,
all customary out-of-pocket expenses of such member are
reimbursed.
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10
Polar
Board Compensation
Eugene I. Davis, our Chairman, was elected Chairman of Polar on
June 28, 2007. In light of his increased responsibility
resulting from the assumption of this position, beginning
June 28, 2007, Mr. Davis receives an annual cash
retainer of $50,000 (payable quarterly) and meeting fees in
respect of meetings of the Polar Board of Directors consistent
with the meeting fees paid to the Companys Directors for
Company Board and Committee meetings as described above.
Mr. Davis received meeting fees totalling $7,000 for
chairing one telephonic and two in person meetings of the Polar
Board of Directors during 2007. Except for Mr. Davis, no
other person is compensated by the Company for serving as a
Director of Polar.
Equity
Compensation
Restricted Shares. On August 24, 2004,
each of our outside Directors serving as members of the Board at
such time received a grant of 5,000 shares of Common Stock,
which shares vested in equal increments over three years. All of
these shares have vested. On November 4, 2004, each of our
outside Directors at such time received a grant of
15,000 shares of Common Stock, vesting in equal increments
over three years. All of such shares have vested.
Mr. Bernlohr and Ms. Hallett, who each joined the
Board in June 2006, each received 10,000 shares of Common
Stock at such time, which shares vest in equal increments over
five years. In general, any shares not yet vested are forfeited
upon a termination of a directors service as a member of
the Board, subject to certain limitations and exceptions. Each
of our outside Directors has all of the rights of a stockholder
with respect to the Common Stock described above prior to
forfeiture, if any, of such shares, including the right to vote
such shares and, to the extent declared, the right to receive
dividends on such shares.
Restricted Stock Units. Pursuant to a policy
adopted in early 2007, each of our outside Directors (other than
Mr. Erickson in respect of 2007) receives a grant of
restricted stock units on the date of each annual meeting of
stockholders (commencing with the 2007 annual meeting) for a
number of shares having a value of $50,000 on the date of grant
($75,000 in the case of Mr. Davis), which shares will vest
on the earlier of the date of the Annual Meeting or the one-year
anniversary of the date of grant. On December 18, 2007, our
Board amended this policy to provide for the grant of restricted
stock units having a value (calculated based on closing price of
the Common Stock on the date of grant) of $100,000 with vesting
terms similar to those described above to each outside Director
on the date of the Annual Meeting and on each annual meeting
date thereafter. Annual awards to the Chairman will have a value
of $175,000.
2007
Total Compensation of Directors
The following table shows (i) the cash amount paid to each
non-employee director for his or her service as a non-employee
director in 2007, and (ii) the dollar value of restricted
shares
and/or
restricted stock units recognized for financial statement
purposes that were awarded to each such person in prior years.
In accordance with SFAS 123R, we record expense for this
grant ratably over the vesting period.
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Name
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Fees Earned Or Paid in Cash
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Stock Awards
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Other
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Total
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(1)
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($)
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($)(3)
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($)(4)
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($)
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Eugene I. Davis
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241,378
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(2)
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104,445
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345,823
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Robert F. Agnew
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153,372
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89,569
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242,941
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Timothy J. Bernlohr
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103,371
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130,416
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233,787
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Keith E. Butler
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88,500
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89,569
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178,069
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Jeffrey H. Erickson
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66,941
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250,000
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316,941
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James S. Gilmore III
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101,565
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89,569
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191,134
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Carol B. Hallett
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106,431
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130,416
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236,847
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Frederick McCorkle
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135,858
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89,569
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225,427
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11
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(1)
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This table does not include
compensation paid to Mr. Flynn, who joined the Company as
President and Chief Executive Officer in June 2006 and who has
been a member of our Board since May 2006. Mr. Flynns
compensation is described in the sections covering executive
compensation. Mr. Flynn is not paid additional compensation
for his service as a director.
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(2)
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Includes amounts earned or paid to
Mr. Davis in connection with his serving as Chairman of
Polar.
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(3)
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Reflects the dollar amount
recognized for financial statement reporting purposes for the
fiscal year ended December 31, 2007, calculated in
accordance with Statement of Financial Accounting Standards
No. 123(R), and includes amounts from (i) restricted
stock awards granted in 2007 and prior years and
(ii) restricted stock units awarded in May 2007. The
underlying valuation assumptions are disclosed in Footnote 13 to
our audited financial statements filed with our Annual Report on
Form 10-K
for fiscal 2007 and in Footnote 13 to our audited financial
statements filed with our Annual Report on
Form 10-K
for fiscal 2006.
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(4)
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Represents the success fee paid to
Mr. Erickson upon consummation of the DHL Transaction. For
additional information, see Certain Relationships and
Related Person Transactions Transactions with
Directors.
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Communications
with the Board
Stockholders and other interested parties who wish to
communicate with the Board may do so by writing to our Chairman,
c/o Atlas
Air Worldwide Holdings, Inc., 2000 Westchester Avenue,
Purchase, New York 10577. All communications received by Board
members from third parties that relate to matters within the
scope of the Boards responsibilities will be forwarded to
the Chairman of the Board. All communications received by Board
members from third parties that relate to matters within the
responsibility of one of the Board committees will be forwarded
to the Chairman of the Board and the Chairman of the appropriate
committee. All communications received by Board members from
third parties that relate to ordinary business matters that are
not within the scope of the Boards responsibilities are
forwarded to AAWWs General Counsel.
Board
Committees
Our Board maintains three standing committees, an Audit
Committee, Compensation Committee and Nominating and Governance
Committee, each of which has a charter that details the
committees responsibilities. The charters for all the
standing committees of the Board of Directors are available on
the Investor Relations section of our website located at
www.atlasair.com and by clicking on the Corporate
Governance Documents link. The charters are also available
in print and free of charge to any stockholder who sends a
written request to the Secretary at Atlas Air Worldwide
Holdings, Inc, 2000 Westchester Avenue, Purchase, NY 10577.
Nominating
and Governance Committee
General
The Nominating and Governance Committee consists of
Mr. Gilmore (Chairman) and Messrs. Agnew, Bernlohr,
Davis and McCorkle, each of whom is an independent director
within the meaning of the applicable rules of the NASDAQ Stock
Market, Inc. (NASDAQ). The principal functions of
the Nominating and Governance Committee are to:
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identify and approve individuals qualified to serve as members
of our Board;
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select director nominees for the next annual meeting of
stockholders;
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review at least annually the independence of our Board members;
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oversee our Corporate Governance Principles; and
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perform or oversee an annual review of the Chief Executive
Officer, the Board and its committees.
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The Nominating and Governance Committee held two in person
meetings and one telephonic meeting in 2007.
12
Director
Qualifications
Our Nominating and Governance Committee is responsible for
reviewing and developing the Boards criteria for
evaluating and selecting new directors based on our needs from
time to time. Pursuant to the skills and characteristics as
described in the Nominating and Governance Committee charter,
members of the Board should possess core competencies in
accounting, finance and disclosure, business judgment,
management, crisis response, industry knowledge, international
markets, leadership and strategy and vision. The Nominating and
Governance Committee will also consider, in addition to whether
such individuals have the aforementioned skills and
characteristics, whether such individuals are independent, as
defined in applicable rules and regulations of the SEC and
NASDAQ. The Board will nominate new directors only from
candidates identified, screened and approved by the Nominating
and Governance Committee. The Board will take into account the
nature of and time involved in a directors service on
other boards in evaluating the suitability of individual
directors and making its recommendation to AAWWs
stockholders. Service on boards of other organizations must be
consistent with our conflict of interest policies applicable to
directors and other legal requirements. The Nominating and
Governance Committee identifies new director candidates from a
variety of sources.
Evaluation
of Stockholder Nominees
Our Nominating and Governance Committee will consider
stockholder recommendations for candidates to serve on the
Board, provided that such recommendations are made in accordance
with the procedures required under our By-laws and as described
in this Proxy Statement under Advance Notice
Procedures below. The Nominating and Governance Committee
also has adopted a policy on security holder recommendations of
director nominees (the Stockholder Nominating
Policy), which is subject to a periodic review by the
Nominating and Governance Committee. Among other things, the
Stockholder Nominating Policy provides that a stockholder
recommendation notice must include the stockholders name,
address and the number of shares beneficially owned, as well as
the period of time such shares have been held, and should be
submitted to: Attention: Secretary, Atlas Air Worldwide
Holdings, Inc., 2000 Westchester Avenue, Purchase, New York
10577. A copy of our current Policy on Security Holder
Recommendation of Director Nominees is available on our website
at www.atlasair.com. In evaluating stockholder nominees,
the Board and the Nominating and Governance Committee seek to
achieve a balance of knowledge, experience and capability. As a
result, the Nominating and Governance Committee evaluates
stockholder nominees using the same membership criteria set
forth above under Director Qualifications.
Corporate
Governance Principles
We have adopted Corporate Governance Principles, believing that
sound corporate governance practices provide an important
framework to assist the Board in fulfilling its
responsibilities. The business and affairs of AAWW are managed
under the direction of our Board, which has responsibility for
establishing broad corporate policies, setting strategic
direction and overseeing management. An informed, independent
and involved Board is essential for ensuring our integrity,
transparency and long-term strength, and maximizing stockholder
value. The Corporate Governance Principles address such topics
as codes of conduct, director nominations and qualifications,
Board committees, Director compensation, conflicts and waivers
of compliance, powers and responsibilities of the Board, Board
independence, serving on other boards and committees, meetings,
Director access to officers and employees, stockholder
communications with the Board, annual Board evaluations,
financial statements and disclosure matters, delegation of power
and oversight and independent advisors. A copy of our Corporate
Governance Principles is available on our website at
www.atlasair.com.
Code of
Ethics Applicable to the Chief Executive Officer, Senior
Financial Officers and Members of the Board of
Directors
We have a long standing commitment to conduct our business in
accordance with the highest ethical principles. We have adopted
a Code of Ethics applicable to the Chief Executive Officer,
Senior Financial Officers and Members of the Board of Directors
that is monitored by our Audit Committee and that includes
certain provisions regarding disclosure of violations and
waivers of, and amendments to, the Code of Ethics by
13
covered parties. Any person who wishes to obtain a copy of our
Code of Ethics may do so by writing to Atlas Air Worldwide
Holdings, Inc., Attn: Secretary, 2000 Westchester Avenue,
Purchase, NY 10577. A copy of the Code of Ethics is available on
our website at www.atlasair.com under the heading
Code of Conduct.
Code of
Conduct and Employee Handbook
We have adopted a Code of Conduct and Employee Handbook that
sets forth the policies and business practices that apply to all
of our employees and Directors. The Code of Conduct and Employee
Handbook addresses such topics as compliance with laws, moral
and ethical conduct, equal employment opportunity, promoting a
work environment free from harassment or discrimination and the
protection of intellectual property and proprietary information,
among other things.
Director
Independence
Our Nominating and Governance Committee Charter includes
categorical standards to assist the Committee in making its
determination of Director independence within the meaning of the
rules of the SEC and the Marketplace Rules of NASDAQ. The
Nominating and Governance Committee will not consider a Director
to be independent if, among other things, he or she was employed
by us at any time in the last three years; has an immediate
family member who is, or in the past three years was, employed
by us as an executive officer; has accepted or has an immediate
family member who has accepted any compensation from us in
excess of $100,000 during a period of 12 consecutive months
within the three years preceding the determination of
independence (other than compensation for Board service,
compensation to a family member who is a non-executive employee
or benefits under a tax-qualified retirement plan or
non-discretionary compensation); is, was or has a family member
who is or was a partner, controlling stockholder or executive
officer of any organization to which we made or from which we
received payments for property or services in the current year
or any of the past three fiscal years in an amount that exceeds
the greater of $200,000 or 5% of the recipients
consolidated gross revenues for the year; is or has a family
member who is employed as an executive officer of another entity
where at any time during the last three years any of the
Companys executive officers serve or served on the
entitys compensation committee; or is or has a family
member who is a current partner of the Companys outside
auditors or was or has a family member who was a partner or
employee of the Companys outside auditors who worked on
the Companys audit at any time during the last three years.
Pursuant to the Nominating and Governance Committee Charter and
as further required by NASDAQ rules, the Nominating and
Governance Committee made a subjective determination as to each
outside Director that no relationship exists which, in the
opinion of the Board, would interfere with such
individuals exercise of independent judgment in carrying
out his or her responsibilities as a Director. As part of such
determination, the Nominating and Governance Committee examined,
among other things, whether there were any transactions or
relationships between AAWW and an organization of which a
Director or director nominee has been a partner, stockholder or
officer within the last fiscal year. The purpose of this review
was to determine whether any such relationships or transactions
were inconsistent with a determination that a Director is
independent.
In accordance with its annual review and the policies and
procedures outlined above, the Nominating and Governance
Committee affirmatively determined that the following Directors
nominated for election at the Annual Meeting are independent
directors: Messrs. Agnew, Bernlohr, Butler, Davis, Gilmore,
McCorkle and Ms. Hallett. In reaching this decision, the
Nominating and Governance Committee considered
Mr. Gilmores partnership in Kelley Drye &
Warren LLP, a law firm of which we had been a client. Given the
small percentage of our total legal fees that were paid to
Kelley Drye & Warren LLP in 2007, and given
Mr. Gilmores indirect interest in those legal fees,
we similarly deemed that relationship immaterial.
The Nominating and Governance Committee also determined that
Mr. Flynn is not independent pursuant to the NASDAQ rules
and the Nominating and Governance Committee Charter because he
is our President and Chief Executive Officer.
14
Audit
Committee Report
The Audit Committee of the Board of Directors consists of four
outside Directors, Messrs. Agnew (Chairman), Bernlohr,
Butler and Davis, each of whom is an independent Director within
the meaning of the applicable rules and regulations of the SEC
and NASDAQ (see also Director Independence above).
The Board has determined that Messrs. Butler and Davis are
audit committee financial experts as defined under
applicable SEC rules. The Audit Committees primary
function, as set forth in its written charter, is to assist the
Board in overseeing:
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the integrity of our financial reports and other financial
information provided to the public;
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our system of controls;
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our legal, regulatory and ethical compliance; and
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the auditing process.
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The Audit Committee is also responsible for appointing and
approving in advance all audit and permitted non-audit services
and monitoring our Code of Ethics (see also Code of
Ethics above) and our related party transactions. The
Audit Committee held five in person meetings and one telephonic
meeting in 2007.
Management is responsible for our financial statements and
financial reporting process, including our systems of internal
controls. On March 1, 2007 PricewaterhouseCoopers LLP
(PwC) was engaged to serve as our independent
registered public accounting firm succeeding our previous
independent auditors, Ernst & Young LLP
(E&Y), on March 15, 2007. PwC was
responsible for performing an independent audit of AAWWs
consolidated financial statements for the fiscal year ended
December 31, 2007 in accordance with standards of the
Public Company Oversight Board (United States) and issuing a
report relating to their audit. For the 2007 period, the Audit
Committee held meetings with PwC in private without members of
management present.
In this context, the Audit Committee (1) reviewed and
discussed AAWWs audited consolidated financial statements
with management and PwC; (2) discussed with PwC the matters
required to be discussed under Statement on Auditing Standards
No. 61 (Communication with Audit Committees), as amended by
Statement on Auditing Standards No. 90 (Audit Committee
Communications); and (3) received the written disclosures
and the letter from PwC regarding their independence required by
Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees). The Audit
Committee has also discussed with PwC the firms
independence from AAWW and its management.
Based upon such reviews and discussions, the Audit Committee
recommended, and the Board of Directors approved, that
AAWWs audited consolidated financial statements be
included in the annual report on
Form 10-K
for the fiscal year ended December 31, 2007, for filing
with the SEC.
On February 21, 2007, after the completion of a formal
request for a proposal process, we determined to retain PwC as
AAWWs independent registered public accounting firm to
succeed E&Y, effective upon completion of the 2006 audit of
AAWWs consolidated financial statements and the issuance
of a report thereon as of December 31, 2006 and for the two
years then ended. During the two fiscal years ended
December 31, 2006, and through the period ended
March 12, 2007, there were no disagreements with E&Y
on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, nor were
there any reportable events.
THE AUDIT COMMITTEE
Robert F. Agnew, Chairman
Timothy J. Bernlohr
Keith E. Butler
Eugene I. Davis
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Fees to
Independent Registered Public Accounting Firms
Aggregate fees billed to the Company for the 2007 Fiscal Year
represent the fees either accrued or paid to PwC. Aggregate fees
billed to the Company for the 2006 Fiscal Year represent the
fees either accrued or paid to the Companys predecessor
accounting firm, E & Y. Services provided to us by PwC
and E&Y for each of the fiscal years are described below
(dollars in thousands).
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2007
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2006
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Audit Fees
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$
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2,587
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$
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3,861
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Audit-Related Fees
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94
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Tax Fees
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2,364
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All other Fees
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4
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Total
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$
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4,955
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$
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3,955
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Audit Fees represent professional services, including
out-of-pocket expenses, rendered for the audit of our
consolidated financial statements, for reviews of our financial
statements included in our Quarterly Reports on
Form 10-Q
and professional services related to internal control over
financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002 (404 Compliance).
Additionally in 2007, audit fees included $737,000 for
assistance with 404 Compliance, accounting and disclosure
treatment of the DHL Transaction, adoption of new accounting
pronouncements and reviews in connection with the Companys
registration and proxy statements.
Audit-Related Fees in 2006 relate to accounting
consultations regarding the structuring of the DHL Transaction.
Tax fees in 2007 consist of tax services, including tax
compliance, tax advice and tax planning. In 2006 the Company
used a separate third party to provide tax services.
All Other Fees in 2007 represent fees for use of
accounting research software from PwC.
Pre-Approval
Policies and Procedures
The Audit Committee pre-approves all audit and permissible
non-audit services provided by the independent registered public
accounting firm. These services may include audit services,
audit-related services and other services. The Audit Committee
may delegate pre-approval authority to its Chairman, who then
reports any decisions to the Audit Committee at the next
scheduled meeting. The Audit Committee will meet with management
and the independent auditor to review and approve the proposed
overall plan and scope of the audit for the current year.
Compensation
Committee
Committee Responsibility. The Compensation
Committee of the Board of Directors was established by the Board
to assist it in discharging and performing its duties with
respect to senior management compensation, equity compensation,
succession planning and employee benefits, among other things.
The Compensation Committee consists of three outside Directors,
Mr. McCorkle (Chairman), Mr. Davis and
Ms. Hallett, each of whom is an independent director within
the meaning of applicable NASDAQ rules.
Process and Procedures. The Compensation
Committee is responsible for reviewing, evaluating and
establishing compensation policies for, and reviewing and
approving the total compensation of, our executive officers at
the level of senior vice president and above, including our
Chief Executive Officer. The Compensation Committee also
monitors the search for, and approves the proposed compensation
for, any executive officers at the level of senior vice
president and above, and periodically reviews and makes
recommendations to the full Board regarding the compensation of
directors. In addition, the Compensation Committee retains and
oversees the outside compensation consultant that provides
advice regarding compensation decisions.
16
The Compensation Committee is required by its charter to meet at
least four times annually. During 2007, the Compensation
Committee held five in person meetings and seven telephonic
meetings. The Compensation Committee meets regularly in separate
executive sessions with the Chief Executive Officer, the General
Counsel, outside counsel, and the outside compensation
consultant to discuss any matters that the Compensation
Committee or any of these groups believes warrant the
Compensation Committees attention. The Chair may also
request that members of management, legal counsel, or other
advisors attend the meetings of the Committee, but any
individual whose performance or compensation is to be discussed
at a Compensation Committee meeting does not attend such meeting
(or the applicable portion of such meeting) unless specifically
invited by the Compensation Committee, and the Chief Executive
Officer is not present during voting or deliberations as to his
or her compensation.
Role of Executive Officers in Compensation
Process. Mr. Flynn, our Chief Executive
Officer, Mr. Kokas, our General Counsel and Chief Human
Resources Officer, and Mr. Grant, our Chief Financial
Officer, participate in portions of the Committees
meetings to, among other things, make recommendations to the
Committee for salary adjustments to our executive officers at
the level of senior vice president and above, and for
establishment, and ultimate payment, of annual awards to those
officers and long-term incentive awards to management. The
Committees final determinations relating to salary and
annual and long-term incentive awards, including payments, are
made in executive session without any interested members of
management present.
Annually, during the first quarter of each year, the Committee
establishes that years objectives for our financial,
operational and personal goals and objectives for our senior
executives upon which payment of that years annual
incentive award for the executives is based, and the annual
incentive range for each such executive. Those criteria are
recommended by our Chief Executive Officer and Chief Human
Resources Officer working together with the Companys
compensation consultant, and are reviewed and ultimately
established by the Committee. Our Chief Executive Officer, Chief
Human Resources Officer and Chief Financial Officer also make
recommendations to the Committee regarding our annual and
long-term incentive plans, after review by the Companys
compensation consultant.
Role of
Compensation Consultants in the Compensation Process.
In July 2007, the Compensation Committee engaged Watson Wyatt as
the outside compensation consultant to the Committee. Prior to
Watson Wyatt, the Compensation Committee had retained Mercer
Human Resource Consulting (Mercer) as its outside
compensation consultant. The Compensation Committee elected to
terminate this retention arrangement once its principal
relationship manager separated service from Mercer. The
compensation consultant advises the Committee regarding
compensation for our executive officers and reviews and advises
on the Companys annual incentive plan for senior
executives and long-term incentive compensation plans. The
Committees compensation consultant periodically reviews
the salaries and annual and long-term incentive awards levels we
pay to our executive officers so that it may advise the
Committee whether compensation paid to our executives is
competitive with companies and industries with which we compete
for executive talent. At the direction of the Committee, the
compensation consultant also works with management to develop a
framework and performance measures for both the Companys
annual and long-term incentive plans. A representative from the
Committees compensation consultant also generally
participates in Compensation Committee meetings.
Director
Compensation
The process of setting director compensation generally follows
the processes and procedures that the Compensation Committee
employs in setting the compensation for our executive officers.
In December 2007, certain changes were made in respect of the
compensation payable to the non-employee Directors of the
Company, effective January 1, 2008. In recognition of the
Companys strong financial performance over the last three
years, total stockholder returns since the Companys
emergence from bankruptcy in July 2004, and the significant
contribution of the Board to the Companys success over the
prior three and one-half years, the Compensation Committee
determined that non-employee Board members should be compensated
at or above the 75th percentile of board members at the
reference companies described below
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under Compensation Discussion and Analysis.
Following review of a report of Watson Wyatt consistent with the
Boards philosophy, the Committee recommended, and the
Board approved, the following changes: the value of the annual
grant of restricted stock units awarded to each non-employee
Director was increased from $50,000 to $100,000, and the
Chairmans annual retainer for serving as Chairman of the
Board of the Company (exclusive of compensation related to
services as a director of Polar), was increased from $75,000 to
$150,000, $25,000 of the increases being payable in cash and
$50,000 in the form of an increase of his annual equity grant.
Compensation
Discussion and Analysis
Overview
and Objectives
We have a philosophy of performance-based compensation, placing
a greater proportion of senior executive officers
compensation at-risk as responsibilities and
position increase. The fundamental objectives of our senior
executive compensation policies are to:
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link compensation to enhancement of stockholder value;
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provide a performance-oriented environment that motivates senior
executive officers to achieve collectively a high level of
earnings;
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reward strong individual performance by linking incentive-based
compensation to the performance of each senior executive
officers annual individual performance objectives; and
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enhance our ability to attract and retain top quality management.
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Total
Compensation
Total compensation is delivered through a combination of three
primary elements:
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base salary;
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performance-based annual incentive cash compensation; and
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long-term fixed and performance-based equity compensation.
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In addition to benefits provided to the broader employee
population, certain of our senior executives receive certain
enhanced change of control benefits and limited perquisites.
Grants of stock options and restricted stock were made to then
current management in August 2004 and March 2005 in connection
with our emergence from bankruptcy. In view of these grants and
their three-year vesting period, our Compensation Committee did
not make additional grants through the end of 2006, except in
cases of select promotion and new hire grants. In view of many
new executive hires and promotions following the Companys
emergence from bankruptcy, the Committee recommenced the annual
award of long-term equity incentive awards beginning in 2007.
See, Determination of 2007 Compensation
Long-Term Equity Incentive Plan below.
In making compensation decisions with respect to each of the
primary compensation components, our Compensation Committee
periodically takes measure of the competitive market for senior
executives by looking at compensation levels provided by
comparable companies.
In order to reward strong performance, the Committees
philosophy is to set long-term incentive awards at the
75th percentile of comparable companies. For 2007, this
group of comparable companies includes 22 companies whose
primary lines of business are in transportation, logistics and
outsourced transportation service industries. This group was
formulated by management based on criteria developed with the
Compensation Committee and was ultimately reviewed by the
compensation consultant and reviewed and approved by the
Compensation Committee. The reference group consisted of the
following companies: ABX Air Inc., Airtran Holdings Inc.,
Alexander & Baldwin Inc., American Commercial Lines,
Arkansas Best Corp., Bristow Group Inc. (Offshore Logistics),
EGL Inc., Expeditors Intl Wash Inc., GATX Corp., Hub Group
Inc. CLA, Hunt (JB) Transport Services Inc., JetBlue
Airways Corp., Kansas City Southern, Kirby Corp., Laidlaw
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International Inc., Prologis, Quality Distribution Inc., SAIA
Inc., Swift Transportation Co. Inc., Tidewater Inc., US Express
Enterprise Inc. CLA, and UTI Worldwide Inc.
Base
Salary
Base salary is designed to compensate senior executives for
their responsibility, experience, sustained performance and
contribution to our success. The amount of any senior executive
salary and any subsequent increase is determined by the
Compensation Committee based on a number of factors, including
but not limited to: the nature and responsibilities of the
position; the expertise of the individual; market
competitiveness for the senior executives position; and
recommendations of the Chief Executive Officer. Salary levels
for senior executives are generally reviewed annually by the
Chief Executive Officer and the Compensation Committee as part
of the performance review process, as well as on a promotion or
material change in job responsibility for any senior executive.
Performance
Based Incentive Compensation
Annual cash incentive compensation awards and long-term equity
incentive awards are made under our 2007 Incentive Plan. The
2007 Incentive Plan was approved by our stockholders in May
2007. The Compensation Committee believes that a significant
portion of a senior executives compensation should be
based upon the Companys financial and operating
performance. Performance-based compensation aligns senior
executive compensation with our goals for corporate financial
and operating performance and encourages a high level of
individual performance. Annual cash incentive compensation
awards to our executive officers are made under an annual cash
incentive sub-plan that is part of the 2007 Incentive Plan,
called in 2007 the Annual Incentive Plan for Senior Executives
(the 2007 Plan). Annual cash incentive awards under
the 2007 Plan are intended to qualify as performance based
compensation as defined in Section 162(m) of the Internal
Revenue Code of 1986, as amended (the Code).
Mr. Dietrich has a target bonus opportunity under the 2007
Plan that approximates 60% of annual base salary, with a maximum
bonus opportunity of 120%. Target bonus and maximum bonus
opportunities under the 2007 Plan for Messrs. Grant and
Kokas are 50% and 100%, respectively. Mr. Flynn has a
target bonus opportunity of 80% and a maximum bonus opportunity
of 160% of base salary. In order to achieve any annual incentive
payments, a minimum level of financial performance must be
achieved. Additional detail on the bonus awards made under the
2007 Plan is provided under the heading Determination of
2007 Compensation set forth in detail below.
Long-Term
Equity Incentive Compensation
We believe that long-term incentive opportunity should be an
important element of total compensation for our executive
officers. Long-term incentives are intended to motivate and
retain executives and to encourage a strong link between
management objectives and stockholder long-term interests. We
also believe that a significant portion of our senior
executives total compensation should be equity based,
providing a strong linkage between the senior executives
compensation and the return to stockholders.
Under our 2007 Incentive Plan, the Compensation Committee may
grant participants shares of common stock, restricted stock,
share units, stock options, stock appreciation rights,
performance units
and/or
performance bonuses. In granting these awards, the Compensation
Committee may establish any conditions or restrictions,
consistent with the Plan, it deems appropriate. All stock
options are granted at an exercise price at or above the market
price of the Companys stock at the time of the award. In
2007, the Committee, with assistance from its then compensation
consultant, Mercer, redesigned the Companys long-term
incentive plan. In general, long-term incentive awards made to
executives in 2007 consisted of a grant of time vested stock
options and performance vesting restricted shares.
Stock options deliver value only if the market price of our
stock increases over the vesting period and the senior executive
officer continues in service through the vesting period. In
2007, the Committee shortened the exercise period and vesting
period for newly granted stock options from a ten year exercise
period and a four year vesting schedule to a seven year exercise
period and a three year vesting period. The shorter exercise
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period for the options shortens the period over which the price
of the Companys common stock has to increase in order to
provide value to the executive.
Performance shares vest only if the Company achieves over a
three year period preset financial metrics measured against a
designated group of companies. Each year the committee
establishes the performance metrics for the following three-year
period. The rewards for achieving results under these
overlapping periods can vary for each three-year period and for
each participating executive.
During 2007, the Committees new compensation consultant,
Watson Wyatt, like Mercer, reported a strong linkage between
financial metrics based on earnings growth and return on capital
and favorable stockholder returns. Watson Wyatt also suggested
that measuring financial metrics against comparator company
performance works best when business strategy is stable across
the comparator companies. However, in view of the fact that the
Companys strategic plan involves significant capital
investment in its aircraft fleet over the
2008-2010
period which, in turn, results in a lag between investment
(capital) in assets and revenue production from those assets,
the Compensation Committee determined that it is appropriate to
exclude capital invested from the ROIC metric calculation until
the related assets are placed in service and earning a return
for the Company. This change will be effective for performance
share grants made in 2008 covering the
2008-2010
performance period.
See Determination of 2007 Compensation Long
Term Equity Incentive Compensation for further information
regarding equity awards made in fiscal 2007.
Other
Elements of Compensation
Other than standard benefits, such as health insurance, uniform
severance benefits commensurate with position, annual physical
and 401(k) plan employer match, the Compensation Committee
believes that perquisites should be limited. For senior
executives, new hires, and senior executives requested to
relocate, we also provide housing relocation expenses. No Named
Executive Officer received perquisites for fiscal 2007 in excess
of $10,000 in the aggregate, except for Messrs. Flynn and Grant.
Details concerning these perquisites can be found in the
footnotes to the Summary Compensation Table for Fiscal
2007 below.
Our Compensation Committee sometimes also grants sign-on
payments in connection with the commencement of employment,
which generally reflect remuneration for any compensation or
benefits forfeited by the commencing employee upon leaving his
or her previous employment.
Determination
of 2007 Compensation
Base
Salary
As described above, base salary is designed to compensate senior
executives for their responsibility, experience, sustained
performance and contribution to our success. In June 2007, the
Compensation Committee increased the compensation of
Mr. Flynn, Mr. Dietrich and Mr. Kokas in view of
the increased responsibility on each of those executives
resulting from the DHL Transaction. One-third of that increase
was in the form of a 10% salary increase to $715,000 for
Mr. Flynn, $467,500 for Mr. Dietrich and $330,000 for
Mr. Kokas, to take effect upon the closing of the DHL
Transaction. The balance of the increase was in the form of
time-vested restricted shares. See, Long-Term Equity
Incentive Compensation below.
Performance
Based Annual Incentive Compensation.
As described above, a significant portion of our senior
executives compensation is based upon the Companys
financial and operating performance in order to align senior
executive compensation with our goals for corporate financial
and operating performance and to encourage a high level of
individual performance. Based on direction from the Compensation
Committee, beginning in November 2006 and continuing through
March 2007, Mercer worked with management to develop and
recommend an annual incentive plan framework for 2007. Based on
the business plan reviewed by the Board, Mercer recommended an
annual incentive plan for 2007 based on achievement of our
pre-tax profit (50% weighting), cost per block hour (5%
weighting, 10% for Mr. Dietrich), service reliability (5%
weighting) and individual management business objectives
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(40% weighting, 35% for Mr. Dietrich). In order to
achieve any annual incentive payments under the plan, the
Company had to achieve a pre-tax net income level of at least
$100 million.
The bonuses awarded to the named executive officers for 2007
were determined as follows: Performance for the fiscal year on
the three performance measures was compared to the performance
range for each of the measures established by the Committee at
the beginning of the fiscal year. A performance factor was
calculated for each of the three financial performance measures.
The resulting performance factor for each financial performance
measure was multiplied by the weight described below, together
with the weighted achievement of individual management bonus
objectives, and the four weighted multiples were added to arrive
at an aggregate bonus amount. Targets are set under our annual
incentive plan at aggressive levels each year to motivate high
business performance. These targets, individually or
collectively, are designed to be challenging to attain.
One of the performance factors used to determine 2007 annual
cash bonuses was our
pre-tax
profits, with a performance range that ran from
$100 million (the threshold amount) to $137.5 million
(representing maximum achievement), which was weighted on a 50%
basis. For 2007, our adjusted
pre-tax
profits performance for cash bonus calculation purposes totaled
$137.2 million, resulting in a 197% performance factor that
was weighted on a 50% basis.
In addition to
pre-tax
profits, other performance metrics that were employed to
determine 2007 annual cash bonus payments include our cost per
block hour, which was weighted on a 5% basis (10% for Mr.
Dietrich), and our service reliability for our main business
units, which was weighted on a 5% basis. Over the past several
years, consistent with our Continuous Improvement Program, which
is aimed at reducing costs and improving efficiencies, we have
increased the cost per block hour target goal from the previous
years target. For example, the cost per block hour cost
metric used in 2006 to establish the maximum award for that
metric in 2006 became the minimum award level in 2007. In 2006,
we slightly exceeded our target cost per block hour metric. In
2007, we achieved maximum performance with regard to this
performance measure. With respect to service reliability, we set
our target levels to be best in class, to meet our
customers anticipated expectations and to exceed our
contractual requirements. In 2007, we exceeded our target level
and achieved maximum performance with regard to this performance
measure. In addition, all of our named executive officers met or
exceeded the maximum achievement on their individual management
business objectives resulting in a 200% performance factor, or
double the targeted amount. This metric was weighted at 40% (35%
for Mr. Dietrich).
Actual bonus amounts paid to Messrs. Flynn, Grant and Kokas
under the 2007 Plan are included in the Summary Compensation
Table under Non-Equity Incentive Plan Compensation.
Messrs. Lane and Barna did not receive an award under the
2007 Plan for fiscal 2007.
On June 27, 2007, the Compensation Committee approved a
one-time discretionary cash bonus for 2007 for certain executive
officers of the Company. All such bonuses were made in view of
the extraordinary services of certain persons in connection with
the negotiation and closing of the DHL Transaction and totaled
$200,000 for Mr. Flynn, $125,000 for Mr. Dietrich,
$75,000 for Mr. Lane, $100,000 for Mr. Grant, $50,000
for Mr. Barna and $100,000 for Mr. Kokas.
Long-Term
Equity Incentive Compensation
During 2007, the Compensation Committee made long-term equity
incentive grants for fiscal 2007 to our named executive officers
pursuant to the 2007 Incentive Plan described above. This
resulted in the award of stock options and performance shares
for fiscal 2007 as set forth in the Grants of Plan Based Awards
table. To determine the level of 2007 equity incentive grants,
Mercer (the Committees outside compensation consultant at
such time) reviewed available data on long-term equity incentive
grants for general industry and for transportation industry
companies, as well as at the reference group companies referred
to above. The Committee determined to establish target awards at
the 75th percentile of companies considered by Mercer in
order to reward strong performance with competitive and
effective levels of compensation. The 75th percentile
long-term incentive multiple as a percentage of base salary was
then applied to average base salary for participants at each
executive level and translated into an aggregate share award
based on a stock price of $47
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and a Black-Scholes value of 43.5%. The Committee determined
that 50% of such award would be in the form of time vested
options (in which value is achieved based solely upon increases
in the Companys share price) and 50% in the form of
performance restricted shares (in which value is achieved based
on financial performance over three years and is affected by
changes in the price of the Companys shares).
For the initial three-year performance period (covering fiscal
2007-2009)
of the performance restricted shares, the Committee determined
that the financial metrics should be closely linked to the total
stockholder returns. In order to determine the appropriate
performance metrics, the Committee asked Mercer to review
performance data for the reference companies and the
relationship of these metrics to stockholder return over one,
three and five year periods. Based on that report, the Committee
determined that performance shares granted in 2007 for the
fiscal
2007-2009
cycle would be based upon (i) average growth in earnings
before taxes, and (ii) return on invested capital
(cumulative net income divided by average capital), both as
measured against a select group of transportation-related
companies. At the end of the three year period, shares vest
based on a performance matrix ranging from no vesting if the
Companys performance is in the bottom quartile of both EBT
and ROIC metrics and all shares vesting if performance on both
metrics is in the top quartile. Target vesting (50% of the
performance share grant) is generally achieved if the
Companys performance is in the
45th-55th percentile
on both metrics. In addition, the value of any performance
shares that actually vest increases over the vesting period if
our stock price appreciates.
As discussed above under Determination of 2007
Compensation Base Salary, in June 2007,
the Compensation Committee increased the compensation of
Mr. Flynn, Mr. Dietrich and Mr. Kokas in view of
the anticipated increased work load on each of those executives
resulting from the DHL Transaction. Two-thirds of the increase
was in the form of time-vested restricted shares resulting in a
grant of 6,530 shares to Mr. Flynn, 4,269 shares
to Mr. Dietrich and 3,014 shares to Mr. Kokas,
such shares to vest ratably over three years beginning on the
first anniversary of their date of grant.
New Chief
Financial Officer
Mr. Grants salary was increased from $275,000 to
$300,000 in connection with his promotion to Senior Vice
President and Chief Financial Officer in September 2007.
Policies
Regarding Executive Stock Ownership
In support of the Board philosophy that performance and equity
incentives provide the best incentives for management and ensure
stockholder value, the Board adopted Stock Ownership Guidelines
(the Guidelines) for all Board members and officer
level executives, including the Chief Executive Officer,
Executive Vice Presidents, Senior Vice Presidents and Vice
Presidents. The Guidelines encourage executives to achieve
certain levels of share ownership over a three-to-five year
period based on the lesser of a percentage of annual base salary
or a fixed number of shares. The recommended amount of retained
shares increases under the Guidelines with the level of the
executives position. For example, the Chief Executive
Officer is expected to own shares with a value equal to the
lesser of four times his annual base salary or
50,000 shares.
Tax and
Accounting Considerations
Section 162(m) of the Code limits the deductibility of
compensation in excess of $1 million paid to the
Companys CEO and to each of the other four highest-paid
executive officers unless this compensation qualifies as
performance-based. Based on the applicable tax
regulations, the Company intended for any taxable compensation
derived from the exercise of stock options and the payment of
performance-based shares by senior executives under the
Companys 2007 Annual Incentive Plan for Senior Executives
to qualify as performance-based. The Companys stockholders
have previously approved terms under which the Companys
annual and long-term performance incentive awards should qualify
as performance-based, as required by the Internal Revenue
Service. These terms do not preclude the Compensation Committee
from making any payments or granting any awards, whether or not
such payments or awards qualify for tax deductibility under
section 162(m), which payments or grants may be appropriate
to retain and motivate key executives.
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We adopted the provisions of Statement of Financial Accounting
Standard No. 123(R) for the year commencing January 1,
2006, the date the standard became effective. In general, we and
the Compensation Committee seek to have all of the equity awards
qualify for fixed grant date accounting, rather than variable
accounting.
Equity
Grant Practices
Following our emergence from bankruptcy through year-end 2006,
there were no annual equity grants other than those grants
required by our bankruptcy court order or those grants made in
connection with new hires or promotions. As noted above, the
Committee granted non-qualified stock options and performance
shares to senior managerial employees in February 2007. It is
expected that the Committee will continue to make similar annual
grants to these individuals in 2008 and beyond. The Compensation
Committee does not have any programs, plans or practices of
timing these awards in coordination with the release of material
non-public information. We have never backdated, repriced or
spring-loaded stock options.
Compensation
Committee Report
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis section with senior
management. Based on this review, the Compensation Committee
recommends to the Board of Directors that the Compensation
Discussion and Analysis section be included in this proxy
statement.
By the Compensation Committee,
Frederick McCorkle, Chairman
Eugene I. Davis
Carol B. Hallett
Compensation
Committee Interlocks and Insider Participation
No member of our Compensation Committee serves as a member of
the board of directors or the compensation committee of any
entity that has one or more our executive officers serving as
members of our Board or our Compensation Committee.
23
Compensation
of Named Executive Officers
Summary
Compensation Table for Fiscal 2007
The following table provides information concerning compensation
for our Named Executive Officers during fiscal year 2007.
Mr. Barnas service as Senior Vice President and Chief
Financial Officer ended on September 17, 2007.
Mr. Grant assumed the position of Senior Vice President and
Chief Financial Officer on that date. Mr. Lane retired as
Senior Vice President and Senior Advisor on December 31,
2007.
|
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|
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|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
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|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
Stock
|
|
|
|
Option
|
|
|
|
Plan
|
|
|
|
All Other
|
|
|
|
|
|
Name and Principal
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Awards
|
|
|
|
Awards
|
|
|
|
Compensation
|
|
|
|
Compensation
|
|
|
|
Total
|
|
Position (1)
|
|
|
Year
|
|
|
|
($)
|
|
|
|
($)(2)
|
|
|
|
($)(3)
|
|
|
|
($)(3)
|
|
|
|
($)(4)
|
|
|
|
($)(5)
|
|
|
|
($)
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
1. William J. Flynn
|
|
|
|
2007
|
|
|
|
|
683,256
|
|
|
|
|
200,000
|
|
|
|
|
1,129,690
|
|
|
|
|
338,456
|
|
|
|
|
1,092,544
|
|
|
|
|
70,318
|
|
|
|
|
3,514,264
|
|
President and
Chief Executive
Officer
|
|
|
|
2006
|
|
|
|
|
342,084
|
|
|
|
|
265,781
|
|
|
|
|
422,722
|
|
|
|
|
112,658
|
|
|
|
|
263,126
|
|
|
|
|
781,511
|
|
|
|
|
2,187,882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. John W. Dietrich
|
|
|
|
2007
|
|
|
|
|
446,745
|
|
|
|
|
125,000
|
|
|
|
|
392,269
|
|
|
|
|
242,500
|
|
|
|
|
535,825
|
|
|
|
|
|
|
|
|
|
1,744,816
|
|
Chief Operating
Officer
|
|
|
|
2006
|
|
|
|
|
337,527
|
|
|
|
|
42,594
|
|
|
|
|
245,872
|
|
|
|
|
166,968
|
|
|
|
|
170,376
|
|
|
|
|
|
|
|
|
|
963,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Ronald A. Lane
|
|
|
|
2007
|
|
|
|
|
350,723
|
|
|
|
|
75,000
|
|
|
|
|
130,766
|
|
|
|
|
23,450
|
|
|
|
|
|
|
|
|
|
526,080
|
|
|
|
|
1,106,019
|
|
Former Chief
Marketing Officer
|
|
|
|
2006
|
|
|
|
|
350,720
|
|
|
|
|
|
|
|
|
|
217,544
|
|
|
|
|
48,727
|
|
|
|
|
168,605
|
|
|
|
|
|
|
|
|
|
785,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Jason Grant
|
|
|
|
2007
|
|
|
|
|
274,963
|
|
|
|
|
100,000
|
|
|
|
|
102,033
|
|
|
|
|
78,814
|
|
|
|
|
266,309
|
|
|
|
|
13,789
|
|
|
|
|
835,908
|
|
Chief Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
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|
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5. Michael L. Barna
|
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2007
|
|
|
|
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245,958
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|
|
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50,000
|
|
|
|
|
103,357
|
|
|
|
|
129,381
|
|
|
|
|
|
|
|
|
|
487,500
|
|
|
|
|
1,016,196
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|
Former Chief
Financial Officer
|
|
|
|
2006
|
|
|
|
|
306,185
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|
|
|
|
36,799
|
|
|
|
|
131,375
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|
|
|
|
98,013
|
|
|
|
|
147,195
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|
|
|
|
|
|
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719,567
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|
|
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6. Adam R. Kokas
|
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2007
|
|
|
|
|
315,349
|
|
|
|
|
100,000
|
|
|
|
|
163,141
|
|
|
|
|
63,656
|
|
|
|
|
315,119
|
|
|
|
|
|
|
|
|
|
957,265
|
|
General Counsel
and Chief Human
Resources
Officer
|
|
|
|
|
|
|
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|
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|
|
(1)
|
|
Mr. Flynn replaced
Mr. Erickson as our President and Chief Executive Officer
on June 22, 2006.
|
|
|
|
Mr. Lane was named Chief
Marketing Officer for Polar in 2003; he was also named our
Senior Vice President and Chief Marketing Officer in April 2003
and retired at year-end 2007.
|
|
|
|
Mr. Dietrich became Vice
President of Legal and General Counsel in 2003; and, in February
2004, he became Senior Vice President, General Counsel and Chief
Human Resources Officer. Mr. Dietrich was elected Secretary
of AAWW in September 2005. In September 2006, Mr. Dietrich
resigned from his position as Senior Vice President, General
Counsel and Secretary and was promoted to his current position
of Executive Vice President and Chief Operating Officer.
|
|
|
|
Mr. Grant was named Senior
Vice President and Chief Financial Officer on September 17,
2007, replacing Mr. Barna.
|
|
|
|
Mr. Kokas was named our Senior
Vice President, General Counsel and Secretary in October 2006.
He was named Chief Human Resources Officer in November 2007.
|
|
(2)
|
|
Messrs. Flynn, Dietrich, Lane,
Grant, Barna and Kokas received discretionary bonuses of
$200,000, $125,000, $75,000, $100,000, $50,000 and $100,000,
respectively, in recognition of their efforts in negotiating and
closing the DHL Transaction.
|
|
(3)
|
|
The compensation amounts reported
in the Stock Awards and Option Awards columns reflect the dollar
amount reported in our financial statements for the 2007 and
2006 fiscal years, in accordance with FAS 123(R) of awards
pursuant to the 2007 Incentive Plan (and a predecessor plan) and
includes amounts from awards granted in and prior to 2007. For
this purpose, the fair value of an award is apportioned over the
period during which the award is expected to vest. The fair
value of the stock awards shown in the table was based on the
closing market price of the common stock as of the date of the
award. The fair value of the option awards was determined using
the Black-Scholes Merton option pricing model. The underlying
valuation assumptions are disclosed in footnote 13 to our
audited financial statements filed with our Annual Report on
Form 10-K
for fiscal 2007 and in footnote 13 to our audited financial
statements filed with our Annual Report on
Form 10-K
for fiscal 2006.
|
|
|
|
The grant date value of restricted
stock is based on the closing market price of the common stock
as of the date of the award.
|
24
|
|
|
(4)
|
|
Reflects the total cash amounts
awarded under the annual cash incentive plans in 2008 for 2007
performance. Awards with respect to fiscal 2007 are discussed in
more detail under the heading Compensation Discussion and
AnalysisDetermination of 2007 Compensation above.
Amounts earned for 2007 were paid to participants in March 2008
following the Compensation Committees review of Company
and individual performance targets under the plans.
|
|
(5)
|
|
Severance payments for
Mr. Barna and Mr. Lane are included in this column at
$487,500 and $526,080, respectively.
|
|
|
|
We provide a very limited number of
perquisites and other personal benefits to our senior executive
officers. No Named Executive Officer received perquisites for
fiscal 2007 in excess of $10, 000 in the aggregate, except for
Mr. Flynn ($52,173 to cover relocation costs, $17,177 for
certain travel-related expenses and $968 for Company-paid life
insurance) and Mr. Grant ($13,319 for certain
travel-related expenses and $470 for Company-paid life
insurance).
|
Grants of
Plan-Based Awards during Fiscal 2007
The grants in the following table were made pursuant to our 2004
LTIP, our 2007 Incentive Plan and related equity agreements, all
of which are described in more detail in the section headed
Compensation Discussion and Analysis above.
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|
|
|
|
|
|
|
|
All Other
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
Stock
|
|
|
|
Option
|
|
|
|
|
|
|
|
Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
Awards:
|
|
|
|
Exercise
|
|
|
|
Date Fair
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive
|
|
|
|
Estimated Future Payouts Under Equity
|
|
|
|
Number
|
|
|
|
Number of
|
|
|
|
or Base
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
Plan Awards
|
|
|
|
Incentive Plan Awards(1)
|
|
|
|
of Shares of
|
|
|
|
Securities
|
|
|
|
Price of
|
|
|
|
Stock and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock or
|
|
|
|
Underlying
|
|
|
|
Option
|
|
|
|
Option
|
|
|
|
|
Grant
|
|
|
|
Threshold
|
|
|
|
Budget
|
|
|
|
Maximum
|
|
|
|
Threshold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
Units
|
|
|
|
Options
|
|
|
|
Awards
|
|
|
|
Awards
|
|
Name
|
|
|
Date
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
(#)(2)
|
|
|
|
(#)(3)
|
|
|
|
($)
|
|
|
|
($)(4)
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
|
|
(k)
|
|
|
|
(l)
|
|
|
William J. Flynn
Stock Options
|
|
|
|
5/23/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,800
|
|
|
|
|
58.34
|
|
|
|
|
581,034
|
|
Stock Awards
|
|
|
|
2/9/07
|
|
|
|
|
412,750
|
|
|
|
|
550,333
|
|
|
|
|
1,100,667
|
|
|
|
|
|
|
|
|
|
15,560
|
|
|
|
|
31,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
907,770
|
|
Stock Awards
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,530
|
|
|
|
|
|
|
|
|
|
59.72
|
|
|
|
|
389,972
|
|
|
John W. Dietrich
Stock Options
|
|
|
|
2/9/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,700
|
|
|
|
|
49.17
|
|
|
|
|
256,190
|
|
Stock Awards
|
|
|
|
2/9/07
|
|
|
|
|
202,406
|
|
|
|
|
269,875
|
|
|
|
|
539,750
|
|
|
|
|
|
|
|
|
|
8,140
|
|
|
|
|
16,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,244
|
|
Stock Awards
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,269
|
|
|
|
|
|
|
|
|
|
59.72
|
|
|
|
|
254,945
|
|
|
Ronald A. Lane
Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason Grant
Stock Options
|
|
|
|
2/9/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
|
49.17
|
|
|
|
|
61,650
|
|
Stock Options
|
|
|
|
3/9/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,700
|
|
|
|
|
49.10
|
|
|
|
|
77,007
|
|
Stock Awards
|
|
|
|
2/9/07
|
|
|
|
|
100,469
|
|
|
|
|
133,958
|
|
|
|
|
267,917
|
|
|
|
|
|
|
|
|
|
4,420
|
|
|
|
|
8,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
217,331
|
|
|
Michael L. Barna
Stock Options
|
|
|
|
2/9/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,200
|
|
|
|
|
49.17
|
|
|
|
|
139,740
|
|
Stock Awards
|
|
|
|
2/9/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,420
|
|
|
|
|
8,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
217,331
|
|
|
Adam R. Kokas
Stock Options
|
|
|
|
2/9/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,200
|
|
|
|
|
49.17
|
|
|
|
|
139,740
|
|
Stock Awards
|
|
|
|
2/9/07
|
|
|
|
|
119,063
|
|
|
|
|
158,750
|
|
|
|
|
317,500
|
|
|
|
|
|
|
|
|
|
4,420
|
|
|
|
|
8,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
217,331
|
|
Stock Awards
|
|
|
|
6/28/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,014
|
|
|
|
|
|
|
|
|
|
59.72
|
|
|
|
|
179,996
|
|
|
|
|
|
(1)
|
|
Represents award of
performance-based restricted stock that vests only if certain
pre-established performance criteria for the period beginning on
January 1, 2007 and ending December 31, 2009 are
achieved.
|
|
(2)
|
|
Represents award of time-based
restricted stock that vest ratably over a three year period.
|
|
(3)
|
|
Represents grant of non-qualified
stock options that vest ratably over a three year period.
|
|
(4)
|
|
The fair value of the restricted
stock shown in the table is based on the closing market price of
the common stock as of the date of the award. The fair value of
the options is determined using the Black-Scholes Merton option
pricing model as described in footnote 3 to the Summary
Compensation Table above.
|
25
Outstanding
Equity Awards at Fiscal Year-End 2007
The table below shows outstanding equity awards for our Named
Executive Officers as of December 31, 2007. Market values
reflect the closing price of our common stock on the NASDAQ
Global Market on December 31, 2007, which was $54.22 per
share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
or Payout
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
Number
|
|
|
|
Value of
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
|
|
|
|
of Unearned
|
|
|
|
Unearned
|
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Shares or
|
|
|
|
Shares,
|
|
|
|
Shares,
|
|
|
|
|
Securities
|
|
|
|
Securities
|
|
|
|
of Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
|
Units of
|
|
|
|
Units or
|
|
|
|
Units or
|
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
Units of
|
|
|
|
Stock
|
|
|
|
Other
|
|
|
|
Other
|
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Option
|
|
|
|
|
|
|
|
Stock That
|
|
|
|
That
|
|
|
|
Rights
|
|
|
|
Rights
|
|
|
|
|
Options
|
|
|
|
Options
|
|
|
|
Unearned
|
|
|
|
Exercise
|
|
|
|
Option
|
|
|
|
Have Not
|
|
|
|
Have Not
|
|
|
|
That Have
|
|
|
|
That Have
|
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
Options
|
|
|
|
Price
|
|
|
|
Expiration
|
|
|
|
Vested
|
|
|
|
Vested
|
|
|
|
Not Vested
|
|
|
|
Not Vested
|
|
Name
|
|
|
Exercisable
|
|
|
|
Unexercisable
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
Date
|
|
|
|
(#)
|
|
|
|
($)
|
|
|
|
(#)
|
|
|
|
($)
|
|
(a)
|
|
|
(b)
|
|
|
|
(c)
|
|
|
|
(d)
|
|
|
|
(e)
|
|
|
|
(f)
|
|
|
|
(g)
|
|
|
|
(h)
|
|
|
|
(i)
|
|
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William J. Flynn
|
|
|
|
12,500
|
|
|
|
|
37,500
|
(1)
|
|
|
|
50,000
|
|
|
|
|
50.00
|
|
|
|
|
6/22/16
|
|
|
|
|
13,500
|
(3)
|
|
|
|
731,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,800
|
(2)
|
|
|
|
35,800
|
|
|
|
|
58.34
|
|
|
|
|
6/22/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,120
|
(4)
|
|
|
|
1,687,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,530
|
(5)
|
|
|
|
354,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(6)
|
|
|
|
1,355,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John W. Dietrich
|
|
|
|
2,500
|
|
|
|
|
7,500
|
(7)
|
|
|
|
10,000
|
|
|
|
|
43.92
|
|
|
|
|
9/19/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,280
|
(4)
|
|
|
|
882,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,934
|
(8)
|
|
|
|
|
|
|
|
|
18,934
|
|
|
|
|
16.70
|
|
|
|
|
8/11/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,269
|
(5)
|
|
|
|
231,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
12,000
|
(9)
|
|
|
|
24,000
|
|
|
|
|
27.50
|
|
|
|
|
3/22/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(6)
|
|
|
|
271,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,700
|
(10)
|
|
|
|
18,700
|
|
|
|
|
49.17
|
|
|
|
|
2/9/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald A. Lane
|
|
|
|
9,467
|
(8)
|
|
|
|
|
|
|
|
|
9,467
|
|
|
|
|
16.70
|
|
|
|
|
8/11/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason Grant
|
|
|
|
719
|
|
|
|
|
4,000
|
(9)
|
|
|
|
4,719
|
|
|
|
|
27.50
|
|
|
|
|
3/22/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,334
|
(12)
|
|
|
|
72,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
(10)
|
|
|
|
4,500
|
|
|
|
|
49.17
|
|
|
|
|
2/9/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,900
|
(4)
|
|
|
|
211,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,700
|
(11)
|
|
|
|
5,700
|
|
|
|
|
49.10
|
|
|
|
|
3/9/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,940
|
(13)
|
|
|
|
267,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Barna
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,098
|
(14)
|
|
|
|
113,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adam R. Kokas
|
|
|
|
1,661
|
|
|
|
|
4,985
|
(15)
|
|
|
|
6,646
|
|
|
|
|
45.14
|
|
|
|
|
10/9/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,840
|
(4)
|
|
|
|
479,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,200
|
(10)
|
|
|
|
10,200
|
|
|
|
|
49.17
|
|
|
|
|
2/9/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,014
|
(5)
|
|
|
|
163,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,323
|
(6)
|
|
|
|
180,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Stock options granted on
June 22, 2006 vest 25% ratably on each of June 22,
2008, June 22, 2009 and June 22, 2010, with full
exercisability upon a change in control of the Company.
|
|
(2)
|
|
Stock options granted on
May 23, 2007 vest 33% ratably on each of May 23, 2008,
May 23, 2009 and May 23, 2010, with full
exercisability upon a change in control of the Company.
|
|
(3)
|
|
Restricted shares awarded on
June 22, 2006 vest 25% ratably on each of June 22,
2008, June 22, 2009 and June 22, 2010, with full
vesting upon a change in control of the Company.
|
|
(4)
|
|
Performance shares awarded on
February 9, 2007 vest on attainment of certain
pre-established performance criteria during the three year
performance period ended December 31, 2009.
|
|
(5)
|
|
Restricted shares awarded on
June 28, 2007 vest 33% ratably on each of June 28,
2008, June 28, 2009 and June 28, 2010, with full
vesting upon a change in control of the Company.
|
|
(6)
|
|
Performance shares awarded on
June 22, 2006 vest on attainment of a specified stock price
for a specified period of time prior to June 22, 2010.
|
|
(7)
|
|
Stock options granted on
September 19, 2006 vest 25% ratably on each of
September 19, 2008, September 19, 2009 and
September 19, 2010, with full exercisability upon a change
in control of the Company.
|
|
(8)
|
|
Stock options granted on
August 11, 2004 are fully vested.
|
|
(9)
|
|
Stock options granted on
March 22, 2005 vest 33% ratably on March 22, 2008,
with full exercisability upon a change in control of the Company.
|
|
(10)
|
|
Stock options granted on
February 9, 2007 vest 33% ratably on each of
February 9, 2008, February 9, 2009 and
February 9, 2010, with full exercisability upon a change in
control of the Company.
|
26
|
|
|
(11)
|
|
Stock options granted on
March 9, 2007 vest 33% ratably on each of March 9,
2008, March 9, 2009 and March 9, 2010, with full
exercisability upon a change in control of the Company.
|
|
(12)
|
|
Stock options granted on
May 2, 2006 vest 33% ratably on each of May 2, 2008
and May 2, 2009 with full exercisability upon a change in
control of the Company.
|
|
(13)
|
|
Performance shares awarded on
March 9, 2007 vest on attainment of certain pre-established
performance criteria during the three year performance period
ended December 31, 2009.
|
|
(14)
|
|
Restricted shares awarded on
February 9, 2007 vest 25% ratably on each of
February 9, 2008, February 9, 2009, February 9,
2010 and February 9, 2011, with full vesting upon a change
in control of the Company.
|
|
(15)
|
|
Stock options granted on
October 9, 2006 vest 25% ratably on each of October 9,
2008, October 9, 2009 and October 9, 2010, with full
exercisability upon a change in control of the Company.
|
Option
Exercises and Stock Vested during Fiscal 2007
The following table provides information relating to option
exercises and stock vesting for our Named Executive Officers
during fiscal 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized on
|
Name
|
|
|
Acquired On Exercise
|
|
|
on Exercise ($)
|
|
|
Acquired on Vesting
|
|
|
Vesting ($)
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
William J. Flynn
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
263,520
|
|
John W. Dietrich
|
|
|
|
12,000
|
|
|
|
270,001
|
|
|
|
13,200
|
|
|
|
704,616
|
|
Jason Grant
|
|
|
|
5,115
|
|
|
|
66,510
|
|
|
|
1,666
|
|
|
|
92,421
|
|
Michael L. Barna
|
|
|
|
30,000
|
|
|
|
111,242
|
|
|
|
5,000
|
|
|
|
292,100
|
|
Adam R. Kokas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment
and Other Agreements
William J. Flynn. Mr. Flynns
employment agreement was entered into on April 21, 2006 and
became effective on June 22, 2006. Pursuant to
Mr. Flynns employment agreement, he will receive an
initial base annual salary of $650,000, which was pro rated for
2006 and which is subject to periodic adjustment. Mr. Flynn
also received a sign-on payment of $200,000 and a grant of
18,000 shares of AAWW restricted stock with a value of
$900,000 under the agreement. Such shares will vest one-quarter
on each of the first four anniversaries of June 22, 2006.
In addition, Mr. Flynn received a grant of 50,000 stock
options, vesting in four equal parts on the first four
anniversaries of the commencement of his employment, and
25,000 shares of performance-based restricted stock,
vesting if our Common Stock reaches a specified value for a
specified period of time prior to the fourth anniversary of the
date of grant.
If Mr. Flynn is terminated by the Company for cause, or if
he resigns, he is entitled to receive salary earned up to date
of termination or resignation. If Mr. Flynn is terminated
by the Company without cause, or if he resigns for good reason
(as defined in the agreement and discussed in the section headed
Payments Upon a Change of Control and Termination of
Employment below), he is entitled to
(i) 18 months base salary; (ii) accrued but
unused vacation pay; (iii) all vested rights and benefits
pursuant to other Company plans and programs; and
(iv) health and welfare benefits coverage for
12 months (provided that such coverage will cease if
Mr. Flynn receives comparable coverage from subsequent
employment). Substantially equivalent benefits are payable in
the event of Mr. Flynns permanent disability (as
defined) or his death (in the event of Mr. Flynns
death, his estate would be entitled to a payment equal to
24 months of his base salary). If, within the six months
preceding or 12 months following a change of control (as
defined in the agreement and discussed in the section headed
Payments Upon a Change of Control and Termination of
Employment below), Mr. Flynns employment is
terminated not for cause or if he resigns for good reason,
Mr. Flynn is entitled to the same benefits as described
above with the exception that his payment of base salary is
increased from 18 months to 24 months.
27
Under the terms of his employment agreement, Mr. Flynn is
prevented from soliciting or interfering with any of our
contracts, client relationships, independent contractors,
suppliers, customers, employees or directors for a period of two
years following termination of his employment with us.
Additionally, for a period of one year following termination of
his employment, Mr. Flynn may not accept employment with,
or give advice to, any air cargo carrier carrying on a business
substantially similar to Atlas.
John W. Dietrich. Mr. Dietrichs
employment agreement, which was amended and restated effective
September 15, 2006, initially was entered into on
March 19, 2003 and amended as of August 1, 2003,
January 29, 2004 and April 1, 2005, respectively.
Under his current employment agreement, Mr. Dietrich will
receive a base annual salary of $425,000, which was pro rated
for the period from September 15, 2006 to December 31,
2006 and which thereafter is subject to annual review. Under the
agreement, if Mr. Dietrichs employment is terminated
without cause, or if Mr. Dietrich resigns for good reason
(as defined in his agreement), he is entitled to 18 months
base salary, payable in a single lump sum, which amount
increases to 24 months base salary if his employment is
terminated or he resigns for good reason in connection with a
change of control. Substantially equivalent benefits are payable
in the event of Mr. Dietrichs permanent disability
(as defined) or his death. Mr. Dietrichs employment
agreement also provides that he will not, for a period of one
year following the termination of his employment with us,
solicit or interfere with any of our contracts, client
relationships, independent contractors, suppliers, customers,
employees or directors. Additionally, for a period of one year
following termination of his employment, Mr. Dietrich may
not accept employment in a non-attorney capacity with, or give
non-legal advice to, certain of our major competitors.
Ronald A. Lane. Mr. Lane was a Senior
Vice President and Chief Marketing Officer of the Company from
April 2003 to March 21, 2007. He resigned from these
positions at such time and was elected Senior Vice President and
Senior Advisor to the Company on March 22, 2007, positions
he held through year-end 2007 when he retired as an executive
officer and a full-time employee. Pursuant to
Mr. Lanes Amended and Restated Employment Agreement,
dated as of March 21, 2007, Mr. Lane was entitled to
receive (i) an annual base salary of $350,720,
(ii) benefits under the Companys health insurance
plans and (iii) an automobile allowance of $700 per month,
all during the period from March 31, 2007 through his
retirement date of December 31, 2007. Thereafter, he is entitled
to receive a lump-sum payment of $526,080 and continued coverage
under the Companys health plans for a period of
twenty-four months. Mr. Lane is not eligible for, and did
not receive, an annual incentive bonus in respect of the 2007
fiscal year.
Under terms of his Amended and Restated Employment Agreement,
Mr. Lane is prevented from (i) soliciting or
encouraging any of our customers to terminate or diminish their
relationship with us or to persuade any such customer to conduct
their business with any other person or entity through December
2008. Additionally, for a one-year period following his
retirement, Mr. Lane is prohibited from engaging in certain
activities that are deemed competitive to the Company,
including, but not limited to, accepting employment with another
company, without first obtaining our express written consent,
which consent shall not be unreasonably withheld.
As previously noted, Mr. Lane recently executed an
employment agreement pursuant to which he will be employed by
the Company through year-end 2009. See Certain
Relationships and Related Person Transactions
Transactions with Former Executive Officers above
for information regarding these employment arrangements.
Potential
Payments Upon Termination or Change of Control
We have several plans that govern payments to our Named
Executive Officers in the event of a change of control of the
Company, a change in the Named Executive Officers
responsibilities, or a termination of any Named Executive
Officer. Each of our 2007 Annual Incentive Plan for Senior
Executives, 2007 Incentive Plan, and 2004 LTIP (or the related
equity agreements) includes provisions regarding payments to
Named Executive Officers upon termination of employment or a
change of control of the Company. In addition, we have entered
into employment agreements with certain of our Named Executive
Officers that contain provisions regarding such payments. These
employment agreements are summarized in the sections headed
Employment Agreements and Determination of
2007 Compensation above. Lastly, our Benefits Program for
Executive
28
Vice Presidents and Senior Vice Presidents (the Benefits
Program) includes provisions for payments upon termination
of employment or a change in control to the extent not covered
by an employment agreement or otherwise.
Payments
Upon Termination of Employment
Mr. Grant and Mr. Kokas participate in the Benefits
Program pursuant to which they are entitled to accrued but
unpaid base salary as of the date of termination in the event of
a termination of employment for cause (as defined) or
resignation. Payments due to Mr. Flynn and
Mr. Dietrich upon termination by the Company, other than
for cause or upon resignation for good reason, are described
under the section headed Employment Agreements
above. If Mr. Grant or Mr. Kokas is terminated by the
Company without cause (as defined) or if either resigns for good
reasons (as defined), he will be entitled to
(i) 12 months base salary (payable in accordance with
the Companys normal pay schedule) and (ii) health and
welfare benefits coverage for 12 months (provided that such
coverage will cease if comparable coverage is obtained as a
result of subsequent employment) under the Benefits Program.
Payments
Upon Death or Disability
Benefits payable in the event of Mr. Flynns or
Mr. Dietrichs permanent disability (as defined) or
death are described under Employment and Other
Agreements above. In the event Mr. Lanes
employment is terminated by reason of death or disability, he or
his estate would be entitled to receipt of his base salary and
accrued benefits through the date employment terminates, along
with the $100,000 severance payment otherwise payable to him at
year-end 2010, all as required by the terms and provisions of
his recently executed employment agreement. Benefits payable in
the event of Mr. Grants or Mr. Kokas death
or permanent disability (as defined) are governed by the
Benefits Program. Upon occurrence of either event, the affected
executive or his estate would receive (i) all accrued but
unpaid base salary as of the date of termination,
(ii) health and welfare benefits coverage for
12 months, and (iii) an additional cash amount equal
to 12 months of the executives monthly base salary
payable in accordance with the Companys normal pay
schedule.
Payments
upon a Change of Control (without termination of
employment)
2007 Annual Incentive Plan
The 2007 Annual Incentive Plan for Senior Executives provides
that, in the event of a change of control during the Plan year,
all annual cash incentive awards shall become payable as if the
date of the change of control was the last day of the plan year,
with the financial goal adjusted accordingly. A change of
control is defined as when another party (acting alone or with
affiliates) beneficially owns 50% or more of our issued and
outstanding voting stock.
2007 Incentive Plan
The 2007 Incentive Plan includes change in control provisions
that are triggered by a merger or consolidation, the sale of a
majority of our assets, or stockholders approving a plan of
complete liquidation. In the event that one of these changes in
control events occurs, the Compensation Committee, as
administrators of the 2007 Incentive Plan, may:
|
|
|
|
|
provide for the assumption of outstanding awards or grant new
awards in substitution therefore if there is an acquiring or
surviving entity that is a party to the transaction causing the
change in control;
|
|
|
|
cash out all or a portion of the outstanding awards if holders
of our common stock receive a payment (cash or non-cash) for
their shares in the change of control transaction. The per share
cash out price would be equal to the excess of the fair market
value of one share of our common stock (as determined by the
Compensation Committee in its sole and absolute discretion) less
any exercise or purchase price;
|
|
|
|
where there is no assumption, substitution or cash-out as
described above, each outstanding award requiring exercise will
become fully exercisable and the delivery of any shares
remaining deliverable
|
29
|
|
|
|
|
under outstanding awards for restricted stock units and
performance awards (to the extent these consist of stock units)
will be accelerated and shares will be delivered to enable
holders of awards the reasonable opportunity to participate as
stockholders in the change in control transaction.
|
For fiscal 2007, the Compensation Committee determined to
include a provision in all stock option, restricted share and
performance share award agreements that calls for full and
immediate vesting in the event of a change in control of the
Company.
2004 Long Term Incentive and Share Award Plan
The 2004 LTIP, which applies to grants of equity made prior to
May 23, 2007, includes change of control provisions which
are triggered by a merger or consolidation, the sale of a
majority of our assets, or stockholders approving a plan of
complete liquidation. In the event of one of these change of
control triggers:
|
|
|
|
|
all stock options become fully vested and exercisable;
|
|
|
|
all restrictions and other conditions on any restricted stock,
units, performance shares or other awards lapse, and such awards
become free of all restrictions and fully vested;
|
|
|
|
all outstanding options, restricted shares and other share based
awards will be cashed out for the per share price paid to
holders of common stock in connection with the change of control
(or, if no consideration is paid, the fair market value of the
stock immediately prior to the change of control), except for
incentive stock options, which will be cashed out based on the
transactions reported for the date of the change of
control; and
|
|
|
|
subject to Compensation Committee discretion, any awards of
performance shares or units relating to a period in which the
change of control occurs become immediately payable in cash, to
be paid pro rata based on achievement of the maximum performance
targets.
|
Payments
Upon a Change of Control and Termination of Employment
We have agreements with certain of our Named Executive Officers
which provide for severance benefits in the event of certain
terminations of employment following a change of control. These
benefits are summarized below. A change of control is defined to
occur upon the acquisition by any person or group of beneficial
ownership of more than 50% of the outstanding voting securities
of the Company.
The change of control provisions of the employment agreements
with our Named Executive Officers are double-trigger
agreements. Mr. Flynns agreement provides that if,
within 6 months preceding or 12 months following a
change of control, we terminate his employment (other than for
cause) or he resigns for good reason (as defined below), then
Mr. Flynn will receive the following benefits:
(i) 24 months base salary; (ii) vesting of all
rights under plans and (iii) health and welfare benefits
for 12 months. Mr. Dietrichs agreement provides
that if, within 6 months before or 12 months after a
change of control, the Company terminates his employment (other
than for cause) or he resigns for good reason, then
Mr. Dietrich will receive: (i) the payment of
24 months base salary; (ii) relocation expenses back
to Chicago; and (iii) health and welfare benefits for
12 months. Messrs. Grant and Kokas are not entitled to
any incremental compensation in the event of a change of control
followed by termination or resignation for good reason but
remain entitled to the payments owed to them upon termination
without cause or resignation for good reason.
The term cause as used in the agreements means
(i) any act of material dishonesty, (ii) failure to
comply with the material obligations set out in the employment
agreement, (iii) a material violation of the Companys
corporate policies, or (iv) the conviction or plea of
no contest to any misdemeanor of moral turpitude or
any felony.
The term good reason means, for Mr. Flynn
(i) a reduction in compensation, (ii) a material
reduction in title or job responsibilities (and in the case of
Messrs. Flynn and Lane, any reduction following a change of
control), or (iii) a requirement to relocate the
executives primary residence. For Mr. Dietrich, it
includes (i) a reduction in base salary or bonus
eligibility, or (ii) reduction in job title or
responsibilities. For Messrs. Grant and Kokas, it includes
(i) a reduction in base salary, (ii) ceasing to hold
the title of Senior Vice President,
30
other than through promotion or through reassignment to another
job title of comparable responsibility or (iii) any
reduction in job responsibilities that diminishes the
opportunity to earn the same annual incentive bonus for which he
was previously eligible.
Set forth below is the amount of compensation that
Messrs. Flynn, Dietrich, Grant and Kokas would receive in
the event of termination of such executives employment
upon certain events or a change of control that is incremental
to amounts previously earned and accrued by the executive for
performance of his duties to the date of termination. The
amounts shown assume that such termination or change of control
was effective as of December 31, 2007, and are estimates of
the amounts which would be paid out to the executives upon their
termination or upon a change of control. For the equity
component of such compensation, the Company used the closing
price of AAWW common stock as of December 31, 2007. The
actual amounts to be paid out can only be determined at the time
of such events. As previously indicated, Mr. Barna left the
Company in September 2007 to pursue other interests, and
Mr. Lane retired at year-end 2007. Amounts shown below
reflect the actual amounts paid or payable to such persons.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments on
|
|
|
|
|
|
|
|
Payments Without
|
|
|
|
Payments on
|
|
|
|
|
Termination of
|
|
|
|
Payments on
|
|
|
|
Termination of
|
|
|
|
Termination of
|
|
|
|
|
Employment
|
|
|
|
Termination of
|
|
|
|
Employment
|
|
|
|
Employment
|
|
|
|
|
Due to Death or
|
|
|
|
Employment
|
|
|
|
Following a
|
|
|
|
Following a
|
|
Name
|
|
|
Disability*
|
|
|
|
Without Cause*
|
|
|
|
Change of Control*
|
|
|
|
Change Control*
|
|
William J. Flynn
|
|
|
$
|
1,991,880
|
**
|
|
|
$
|
1,634,380
|
|
|
|
$
|
4,287,103
|
|
|
|
$
|
5,717,103
|
|
John W. Dietrich
|
|
|
|
1,315,830
|
|
|
|
|
1,315,830
|
|
|
|
|
1,877,592
|
|
|
|
|
2,812,592
|
|
Ronald A. Lane***
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason Grant
|
|
|
|
590,574
|
|
|
|
|
590,574
|
|
|
|
|
710,423
|
|
|
|
|
1,010,423
|
|
Michael L. Barna***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adam R. Kokas
|
|
|
|
489,608
|
|
|
|
|
489,608
|
|
|
|
|
919,671
|
|
|
|
|
1,249,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
We used the following assumptions
to calculate these payments:
|
|
|
|
|
|
We valued stock options using the closing price of our common
stock on the NASDAQ Global Market on December 31, 2007,
which was $54.22 per share, by multiplying the difference
between the Market Price and the Exercise Price by the number of
Accelerated Shares.
|
|
|
|
We assumed in each case that termination is not for cause, the
executive does not violate his non-competition, non-solicitation
or any other restrictive covenants or agreements with us
following termination, the executive does not receive medical
and life insurance coverage from another employer within
12 months of the termination of his employment, the
executive does not have any unused vacation time, and the
executive does not incur legal fees or relocation expenses
requiring reimbursement from us.
|
|
|
|
We used the same assumptions for health care benefits that we
used for our financial reporting under generally accepted
accounting principles.
|
|
|
|
We valued estimated payments based on the closing price of our
common stock on the NASDAQ Global Market on December 31,
2007, which was $54.22 per share, multiplied by the number of
shares of stock and other equity awards that are accelerated
upon a termination of employment or termination of employment
and change of control. See the table titled Outstanding
Equity Awards at Fiscal Year-End 2007 for information
regarding unvested equity awards.
|
|
|
|
**
|
|
Represents the amount payable to
Mr. Flynns estate in the event of his death. In the
event of diability, the amount to be paid to Mr. Flynn is
$1,634,380.
|
|
***
|
|
Mr. Lane retired as an
executive officer and a full-time employee at year-end 2007, and
Mr. Barna terminated employment with the Company in
September 2007. For information regarding payments made in
connection with these terminations, see Certain
Relationships and Related Person Transactions
Transactions with Former Executive Officers and
Compensation of Named Executive Officers
Summary Compensation Table for fiscal 2007 above.
|
31
PROPOSAL 2
RATIFICATION
OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANYS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2008
The Audit Committee has selected PricewaterhouseCoopers LLP
(PwC) as the Companys independent registered
public accounting firm for the fiscal year ended
December 31, 2008 and has directed that management submit
the selection of that firm to the stockholders for ratification
at the Annual Meeting. Representatives from PwC are expected to
be present at the Annual Meeting, will have an opportunity to
make a statement if they desire to do so, and will be available
to respond to appropriate questions.
Stockholder ratification of the selection of PwC as the
Companys independent registered public accounting firm is
not required by the Companys By-Laws or otherwise.
However, we are submitting the selection of PwC to the
stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the
Audit Committee will reconsider whether or not to retain PwC.
Even if the selection is ratified, the Audit Committee in its
discretion may direct the appointment of a different independent
registered public accounting firm at any time during the year if
it is determined that such a change would be in the best
interests of the Company and its stockholders.
For information concerning the selection of PwC, see Audit
Committee Report above. For information concerning fees
paid to PwC during 2007, see Fees to Independent
Registered Accounting Firm above.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANYS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2008.
32
PROPOSAL 3
APPROVAL
OF
AN AMENDMENT TO THE ATLAS AIR WORLDWIDE HOLDINGS, INC.
2007 INCENTIVE PLAN
The 2007 Atlas Air Worldwide Holdings, Inc. 2007 Incentive Plan
(the Plan) was approved by the stockholders at the
2007 Annual Meeting of Stockholders held on May 23, 2007.
The purpose of the Plan is to advance the interests of the
Company by providing for the grant to eligible participants of
stock-based and other incentive awards. The Plan is intended to
accomplish these goals by enabling the Company to grant awards
in the form of options, stock appreciation rights, restricted
stock, unrestricted stock, performance awards, cash awards and
stock units, including restricted stock units or combinations
thereof, all as more fully described below.
The Plan replaced the 2004 LTIP (prior plan), and no
new awards have been granted under the prior plan since
May 23, 2007. Awards outstanding under the prior plan
continue to be governed by the terms of that plan and the
agreements under which they were granted.
Proposed
Amendment
Of the 628,331 shares of Common Stock originally available
for issuance under the Plans, as of March 28, 2008,
294,055 shares remain available for issuance of future
awards. We do not believe that these remaining shares are
sufficient to continue implementing the Companys long-term
incentive program over the next several years. Accordingly, the
Board of Directors has approved an amendment to Section IV
A of the Plan to increase the shares available for awards from
294,055 to 1,394,055, subject to stockholder approval of this
amendment. No other amendments or revisions to the Plan are
being submitted to the stockholders for their consideration at
this time.
To the extent that any outstanding stock option or other
equity-based award granted under the Plan (or under the prior
plan) is cancelled, expires or is otherwise forfeited, the
shares underlying that award will be available for issuance
under the Plan. In addition, shares underlying awards issued in
assumption of, or substitution for, awards issued by a company
acquired by the Company will not reduce the number of shares
remaining available for issuance under the Plan.
If this amendment is not approved by the stockholders, the
proposed additional 1,100,000 shares will not become
available for issuance under the Plan, but the Plan will
otherwise remain in effect.
Overview
The following is a summary of the material features of the Plan.
Administration. The Plan is administered by
the Compensation Committee of the Board. The term
administrator is used in this proxy statement to
refer to the person (the Compensation Committee and its
delegates) charged with administering the Plan. Under the Plan,
the administrator may grant stock options, stock appreciation
rights, restricted stock, unrestricted stock, performance awards
(in cash or stock), cash awards and stock units, including
restricted stock units, or combinations thereof, and may waive
terms and conditions of any award.
The administrator may provide for the payment of amounts in lieu
of cash dividends or other cash distributions with respect to
shares of stock subject to an award.
Eligibility and Participation. Employees of
the Company, including executive officers, directors and other
persons providing services to the Company or its subsidiaries
who are in a position to make a significant contribution to the
success of the Company are eligible to receive awards under the
Plan. As of March 31, 2008, there were 65 of such employees
participating in the Plan. Seven non-employee Directors of the
Company are also participating in the Plan.
33
Limitations on Awards. Section 162(m) of
the Code places annual limitations on the deductibility by
public companies of compensation in excess of $1,000,000 paid to
each of the chief executive officer and the other four Named
Executive Officers ranked by pay, unless, among other things,
the compensation is performance-based. For compensation
attributable to stock options and stock appreciation rights to
qualify as performance-based, the plan under which they are
granted must state a maximum number of shares with respect to
which options and rights may be granted to an individual during
a specified period and must be approved by the Companys
stockholders. To comply with these requirements, the Plan
provides that the maximum number of shares as to which options
may be granted and the maximum number of shares as to which
stock appreciation rights may be granted to any participant
during any fiscal year will each be 200,000. The Plan provides
that the maximum number of shares as to which other awards may
be granted to any participant during any fiscal year will be
100,000 and the maximum amount payable as cash awards to any
person in any fiscal year will be $3,000,000.
Adjustments. In the event of a stock dividend,
stock split or other change in our capital structure, the
administrator will make appropriate adjustments to the limits
described above and will also make appropriate adjustments to
the number and kind of shares of stock or securities subject to
awards, and to the exercise prices of awards affected by the
change. The administrator may also make similar adjustments to
take into account other distributions to stockholders or any
other event, if the administrator determines that adjustments
are appropriate to avoid distortion in the operation of the Plan
and to preserve the value of awards.
Stock Options. The exercise price of a stock
option granted under the Plan shall not be less than 100% of the
fair market value of the Common Stock at the time of grant. Fair
market value shall be determined in accordance with the
requirements of Section 422 and Section 409A of the
Code. Subject to the foregoing, the administrator will determine
the exercise price of each option granted under the Plan on the
basis of the closing price of the stock on the date of grant of
the option.
Two types of stock options may be granted under the Plan:
incentive stock options, or ISOs, which are subject
to special tax treatment as described below, and nonstatutory
stock options, or NSOs. Eligibility for ISOs is
limited to employees of the Company and its subsidiaries. The
expiration date of options cannot be more than ten years after
the date of the original grant. The administrator may determine
other terms and conditions related to the exercise of an option,
including the time at which options may be exercised and
conditions relating to the exercise of options. No stock options
may be granted under the Plan after March 20, 2017, but
stock options previously granted may extend beyond that date in
accordance with their terms. The exercise price may be paid in
cash, by check payable to the order of the Company or by any
combination thereof.
Stock Appreciation Rights (SARs). Although
none have been issued to date, the administrator may grant SARs
under the Plan. An SAR entitles the holder upon exercise to
receive Common Stock equal in value to the excess of the fair
market value of the shares of stock subject to the right over
the fair market value of such shares on the date of grant. SARs
granted under the Plan may not be repriced other than in
accordance with the applicable stockholder approval requirements
of NASDAQ.
Stock Awards; Stock Units. The Plan provides
for awards of nontransferable shares of restricted common stock,
as well as unrestricted shares of Common Stock. Generally,
awards of restricted stock are subject to the requirement that
the shares be forfeited or resold to us unless specific
conditions are met. The administrator may provide that any
recipient of an award of restricted stock will have all the
rights of a Company stockholder, including the right to vote the
shares and to receive dividends. Other awards under the Plan may
also be settled with restricted stock. The Plan provides also
for stock units, including restricted stock units, entitling the
recipient to receive shares of Common Stock (or cash measured by
the value of the Common Stock) in the future on such conditions
as the administrator may specify.
Performance Awards. The Plan provides for
performance awards entitling the recipient to receive cash or
common stock following the attainment of performance goals
determined by the administrator. Performance conditions may also
be attached to other awards under the Plan. In the case of any
performance award intended to qualify for the performance-based
remuneration exception described in Section 162(m) of the
Code, the administrator will use one or more objectively
determinable measures of performance relating to
34
any or any combination of the following (measured either
absolutely or by reference to an index or indices and determined
either on a consolidated basis or, as the context permits, on a
divisional, subsidiary, line of business, project or
geographical basis or in combinations thereof): sales; revenues;
assets; expenses; earnings before or after deduction for all or
any portion of interest, taxes, depreciation, or amortization,
whether or not on a continuing operations or an aggregate or per
share basis (basic or fully diluted); return on equity,
investment, capital or assets; one or more operating ratios such
as earnings before interest, taxes
and/or
depreciation and amortization; borrowing levels, leverage ratios
or credit rating; market share; capital expenditures; cash flow;
free cash flow, cash flow, return on investment (discounted or
otherwise), net cash provided by operations, or cash flow in
excess of cost of capital; stock price; stockholder return;
sales of particular products or services; customer acquisition
or retention; acquisitions and divestitures (in whole or in
part); economic value added; strategic business criteria,
consisting of one or more objectives based on meeting specific
market penetration, geographic business expansion goals,
facility construction or completion goals, geographic facility
relocation or completion goals, cost targets, customer
satisfaction, supervision of litigation or information
technology; joint ventures and strategic alliances; spin-offs,
split-ups
and the like; reorganizations; or recapitalizations,
restructurings, financings (issuance of debt or equity) or
refinancings (each, a Performance Criterion). A
Performance Criterion and any targets with respect thereto
determined by the Administrator need not be based upon an
increase, a positive or improved result or avoidance of loss. To
the extent consistent with the requirements for satisfying the
performance-based compensation exception under
Section 162(m), the administrator may provide in the case
of any Award intended to qualify for such exception that one or
more of the Performance Criteria applicable to such Award will
be adjusted in an objectively determinable manner to reflect
events (for example, but without limitation, acquisitions or
dispositions) occurring during the performance period that
affect the applicable Performance Criterion or Criteria.
Stock Price. The closing price of the
Companys Common Stock as reported on NASDAQ on
March 28, 2008 was $53.12 per share. Stock options granted
under the Plan may not be repriced other than in accordance with
the applicable stockholder approval requirements of NASDAQ.
Transferability. Neither ISOs nor, except for
gratuitous transfers to the extent permitted by the
administrator, other awards may be transferred other than by
will or by the laws of descent and distribution. During a
recipients lifetime an ISO and, except as the
administrator may provide, other non-transferable awards
requiring exercise may be exercised only by the recipient.
Section 409A. Each award under the Plan
will contain terms, and will be construed and administered, so
that the award either qualifies for an exemption from the
requirements of Section 409A of the Code or satisfies such
requirements.
Termination. The Plan sets forth how awards
may be treated in the event that a participants employment
terminates. The administrator, however, may provide for
different default treatment, dependent upon the type of award
granted. Upon termination of a participants employment,
all awards requiring exercise will cease to be exercisable and
will terminate, and all other awards, to the extent not vested,
will be forfeited unless the administrator provides otherwise.
Notwithstanding the above, unless the administrator provides
otherwise, if a participant dies or terminates employment by
reason of disability, options and SARs exercisable immediately
prior to death or disability may be exercised by the
participants executor, administrator or transferee during
a period of one year following such death or termination by
reason of disability (or for the remainder of their original
term, if less). In the case of termination of the
participants employment for reasons other than death or
disability, options and SARs remain exercisable, to the extent
they were exercisable immediately prior to termination, for
three months (or for the remainder of their original term, if
less); provided that if in the administrators judgment the
reason for the award holders termination casts discredit
on the participant sufficient to justify immediate termination
of the award, then such award will immediately terminate.
Change of Control. In the case of certain
mergers, consolidations or other transactions in which the
Company is acquired or is liquidated and there is a surviving or
acquiring corporation, the Plan permits the administrator to
arrange for the assumption of awards outstanding under the Plan
or the grant to participants of replacement awards by that
corporation. If the merger, consolidation or other transaction
is one in which
35
holders of common stock will receive a payment upon consummation
of the transaction, the administrator may provide for a cash-out
payment with respect to some or all awards outstanding. All
outstanding awards not assumed by the surviving or acquiring
corporation or cashed-out shall become exercisable immediately
prior to the consummation of such merger, consolidation or other
transaction and upon such consummation all outstanding awards
that have not been assumed or replaced will terminate. The
administrator may provide for different or additional terms
relating to a change of control of the Company in the awards. In
the case of any such merger, consolidation or other transaction,
awards subject to and intended to satisfy the requirements of
Section 409A of the Code shall be construed and
administered consistent with such intent.
Amendment. The administrator may amend the
Plan or any outstanding award at any time, provided that except
as otherwise expressly provided in the Plan the administrator
may not, without the participants consent, alter the terms
of an award so as to affect materially and adversely the
participants rights under the award, unless the
administrator expressly reserved the right to do so at the time
of the award. No such amendment will, without the approval of
the stockholders of the Company, effectuate a change for which
stockholder approval is required by law (including the Code and
applicable stock exchange requirements).
Federal
Tax Effects
The following discussion summarizes certain federal income tax
consequences of the issuance and receipt of awards under the
Plan. The summary does not purport to cover federal employment
tax or other federal tax consequences that may be associated
with the Plan, nor does it cover state, local or
non-U.S. taxes.
Incentive Stock Options. In general, an
optionee realizes no taxable income upon the grant or exercise
of an ISO. However, the exercise of an ISO may result in an
alternative minimum tax liability to the optionee. With certain
exceptions, a disposition of shares purchased under an ISO
within two years from the date of grant or within one year after
exercise produces ordinary income to the optionee (and a
deduction to the Company) equal to the value of the shares at
the time of exercise less the exercise price. Any additional
gain recognized in the disposition is treated as a capital gain
for which the Company is not entitled to a deduction. If the
optionee does not dispose of the shares until after the
expiration of these one- and two-year holding periods, any gain
or loss recognized upon a subsequent sale is treated as a
long-term capital gain or loss for which the Company is not
entitled to a deduction.
Nonstatutory Options. In general, in the case
of a NSO, the optionee has no taxable income at the time of
grant but realizes income in connection with exercise of the
option in an amount equal to the excess (at the time of
exercise) of the fair market value of the shares acquired upon
exercise over the exercise price. A corresponding deduction is
available to the Company. Upon a subsequent sale or exchange of
the shares, appreciation or depreciation after the date of
exercise is treated as capital gain or loss for which the
Company is not entitled to a deduction.
In general, an ISO that is exercised more than three months
after termination of employment (other than termination by
reason of death or permanent and total disability) is treated as
a NSO. ISOs are also treated as non-ISOs to the extent they
first become exercisable by an individual in any calendar year
for shares having a fair market value (determined as of the date
of grant) in excess of $100,000. Under the so-called
golden parachute provisions of the Code, the vesting
or accelerated exercisability of awards in connection with a
change in control of the Company may be required to be valued
and taken into account in determining whether participants have
received compensatory payments, contingent on the change in
control, in excess of certain limits. If these limits are
exceeded, a substantial portion of amounts payable to the
participant, including income recognized by reason of the grant,
vesting or exercise of awards under the Plan, may be subject to
an additional 20% federal tax and may not be deductible to the
Company.
Awards under the Plan are intended either to be exempt from the
rules of Section 409A of the Code or to satisfy those rules
and shall be construed accordingly. However, the Company will
not be liable to any participant or other holder of an award
with respect to any award-related adverse tax consequences
arising under Section 409A or any other provision of the
Code.
36
Plan
Benefits
The future benefits or amounts that would be received under the
Plan by executive officers, non-executive directors and
non-executive officer employees are discretionary and are
therefore not determinable at this time. The table below sets
forth equity-based awards granted under the Plan from
May 23, 2007, the date on which the Plan was adopted,
through December 31, 2007. For additional information
concerning equity-based awards in respect of fiscal year 2007,
see Grants of Plan-Based Awards during Fiscal 2007
and Option Exercises and Stock Vesting during Fiscal
2007 above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
Underlying
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
Underlying
|
|
|
Performance
|
|
|
Restricted
|
|
|
Restricted Stock
|
|
|
|
|
Name/Group
|
|
Options Granted
|
|
|
Shares Granted
|
|
|
Shares Granted
|
|
|
Units Granted
|
|
|
Total
|
|
|
William J. Flynn
|
|
|
35,800
|
|
|
|
|
|
|
|
6,530
|
|
|
|
|
|
|
|
42,330
|
|
John W. Dietrich
|
|
|
|
|
|
|
|
|
|
|
4,269
|
|
|
|
|
|
|
|
4,269
|
|
Ronald A. Lane
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jason Grant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Barna
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adam R. Kokas
|
|
|
|
|
|
|
|
|
|
|
3,014
|
|
|
|
|
|
|
|
3,014
|
|
Executive Officers(1)
|
|
|
35,800
|
|
|
|
|
|
|
|
13,813
|
|
|
|
|
|
|
|
49,613
|
|
Directors(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,428
|
|
|
|
6,428
|
|
Other Employees(3)
|
|
|
9,000
|
|
|
|
7,800
|
|
|
|
5,800
|
|
|
|
300
|
|
|
|
22,900
|
|
|
|
|
(1)
|
|
Includes all persons who served as
an executive officer at any time during 2007.
|
|
(2)
|
|
Includes all persons who served as
a non-employee Director at any time during 2007.
|
|
(3)
|
|
Includes all employees other than
those set forth above.
|
As noted above, cash incentive performance payments are also a
form of award under the Plan. For information concerning the
cash incentive performance payments made to the Named Executive
Officers in respect to the fiscal year ended December 31,
2007, see Column (g) of the Summary Compensation Table
appearing above. Cash payments made for the 2007 fiscal year to
all executive officers as a group (10 persons) and to all
non-executive officer employees as a group (243 persons)
totaled approximately $3,000,000 and approximately $9,200,000,
respectively. Non-employee Directors did not receive cash awards
under the Plan for the 2007 fiscal year, nor are they expected
to receive this type of award in the future.
The table below sets forth the estimated threshold target and
maximum bonus amounts that might be distributed as cash
incentive performance awards under the Plan for the fiscal year
2008, based on current salary. Changes in salary that may occur
in fiscal year 2008 may change the amounts set forth in the
table, subject to the $3,000,000 limit in the Plan on the
maximum amount payable to any participant in any fiscal year as
a cash award. Cash incentive performance awards under the Plan
will not be paid unless certain pre-determined performance goals
and objectives set by the Compensation Committee for the 2008
fiscal year are met.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name/Group
|
|
Threshold
($)(1)
|
|
|
Target Bonus
($)(1)
|
|
|
Maximum Bonus
($)(1)
|
|
|
William J. Flynn
|
|
|
429,000
|
|
|
|
572,000
|
|
|
|
1,144,000
|
|
John W. Dietrich
|
|
|
210,375
|
|
|
|
280,000
|
|
|
|
561,000
|
|
Jason Grant
|
|
|
112,500
|
|
|
|
150,000
|
|
|
|
300,000
|
|
Adam R. Kokas
|
|
|
123,750
|
|
|
|
165,000
|
|
|
|
330,000
|
|
Executive Officers (other than those set forth above)
|
|
|
344,859
|
|
|
|
459,813
|
|
|
|
919,625
|
|
|
|
|
(1)
|
|
These amounts are based on a
percentage of salary and will change in the event that an
executives salary changes.
|
37
Equity
Compensation Plan Information
The following table sets forth certain information relating to
the shares of common stock that may be issued under the
Companys stock-based incentive plans at December 31,
2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
securities to be
|
|
|
|
|
|
|
|
|
|
|
|
|
issued upon
|
|
|
|
Weighted average
|
|
|
|
|
|
|
|
|
exercise of
|
|
|
|
exercise price of
|
|
|
|
Number of
|
|
|
|
|
outstanding
|
|
|
|
outstanding
|
|
|
|
securities
|
|
|
|
|
options, warrants
|
|
|
|
options, warrants
|
|
|
|
remaining available
|
|
Plan Category
|
|
|
and rights
|
|
|
|
and rights
|
|
|
|
for future issuance
|
|
Equity compensation plans approved by security
holders(1)
|
|
|
|
542,408
|
|
|
|
$
|
34.15
|
|
|
|
|
611,880
|
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
542,408
|
|
|
|
$
|
34.15
|
|
|
|
|
611,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes shares issuable pursuant
to the Plan and the 2004 LTIP.
|
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE FOR THE AMENDMENT TO THE 2007
INCENTIVE PLAN AS SET FORTH HEREIN.
38
DEADLINE
FOR RECEIPT OF STOCKHOLDER PROPOSALS TO BE PRESENTED
AT THE 2009 ANNUAL MEETING
Stockholder
Proposals to Be Included in Our 2008 Proxy Statement
We currently expect to hold our 2009 annual meeting of
stockholders on or about May 21, 2009. Under the rules of
the SEC, if a stockholder wants us to include a proposal in the
proxy statement and form of proxy for presentation at our 2009
annual meeting, the proposal must be received by our Secretary
no later than December 18, 2008. All stockholder proposals
must be made in writing and addressed to the Secretary, Atlas
Air Worldwide Holdings, Inc., 2000 Westchester Avenue,
Purchase, New York 10577.
Advance
Notice Procedures
Under our By-laws, and as permitted by the rules of the SEC, no
business may be brought before the Annual Meeting except as
specified in the notice of the meeting or as otherwise brought
before the Annual Meeting by or at the direction of the Board or
by a stockholder entitled to vote who has delivered notice to us
(containing certain information specified in our By-laws) not
earlier than February 20, 2009 and not later than
March 13, 2009. A copy of the By-laws will be sent to any
stockholder upon written request to the Secretary of AAWW. These
requirements are separate and apart from, and in addition to,
the SECs requirements that a stockholder must meet in
order to have his or her stockholder proposal included in our
Proxy Statement, as discussed above.
ADDITIONAL
COPIES OF ANNUAL REPORT
A copy of our 2007 Annual Report accompanies this Proxy
Statement. If any person who was a beneficial owner of Common
Stock on the Record Date desires additional copies, such copies
may be obtained without charge upon request in writing addressed
to the Secretary, Atlas Air Worldwide Holdings, Inc.,
2000 Westchester Avenue, Purchase, New York 10577. Each
such copy of our 2007 Annual Report so furnished does not
include any exhibits thereto, but is accompanied by a list
briefly describing all such exhibits. We will furnish any such
exhibit upon written request and upon payment of a reasonable
specified fee. The
Form 10-K
is also available on our website at www.atlasair.com.
ADDITIONAL
INFORMATION
Separate
Voting Materials
Some banks, brokers and other record holders have begun the
practice of householding proxy statements and annual
reports. Householding is the term used to describe
the practice of delivering a single set of proxy statements and
annual reports to a household at which two or more stockholders
reside if a company reasonably believes the stockholders are
members of the same family. This procedure reduces the volume of
duplicate information stockholders receive and also reduces
printing and mailing costs. If you participate in
householding and wish to continue receiving
individual copies of our proxy statement and annual report,
please write or call us at the following address or phone
number: the Secretary, Atlas Air Worldwide Holdings, Inc.,
2000 Westchester Avenue, Purchase, New York, 10577,
(914) 701-8000.
We will promptly deliver an additional copy of the proxy
and/or the
annual report to any stockholder who so requests.
List of
Stockholders
At the Annual Meeting and for 10 days prior to the meeting,
the names of stockholders entitled to vote at the Annual Meeting
will be available for inspection for any purpose germane to the
meeting, between the hours of 9 a.m. and 5 p.m., at
our principal executive offices at 2000 Westchester Avenue,
Purchase, New York 10577, by contacting the Secretary of AAWW.
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Limited
Voting by Foreign Owners
To comply with restrictions imposed by federal aviation law on
foreign ownership of U.S. airlines, our Certificate of
Incorporation and By-laws restrict foreign ownership of shares
of our Common Stock. The restrictions imposed by federal
aviation law (49 U.S.C. § 41102) currently
include a requirement that no more than 25% of our voting stock
be owned or controlled, directly or indirectly, by persons who
are not Citizens of the United States. There is a
separate requirement that we be under the actual control of
Citizens of the United States.
Pursuant to our By-laws, there is a separate stock record,
designated the Foreign Stock Record for the
registration of Voting Stock that is Beneficially Owned by
aliens. Voting Stock means all outstanding shares of
our capital stock that we may issue from time to time which, by
their terms, may vote. Beneficially Owned refers to
owners of our securities who, directly or indirectly, have or
share voting power
and/or
investment power.
At no time will ownership of our shares of Common Stock
representing more than the Maximum Percentage be registered in
the Foreign Stock Record. Maximum Percentage refers
to the maximum percentage of voting power of Voting Stock which
may be voted by, or at the direction of, aliens without
violating applicable statutory, regulatory or interpretative
restrictions or adversely affecting our, Atlass or
Polars operating certificates or authorities. If we find
that the combined voting power of Voting Stock then registered
in the Foreign Stock Record exceeds the Maximum Percentage, the
registration of such shares will be removed from the Foreign
Stock Record sufficient to reduce the combined voting power of
the shares so registered to an amount not in excess of the
Maximum Percentage.
The enclosed proxy card contains a certification that by
signing the proxy card the stockholder certifies that such
stockholder is a Citizen of the United States as
defined by 49 U.S.C. § 40102(a)(15) or that the
shares represented by the proxy card have been registered on our
Foreign Stock Record.
We will promptly deliver a copy of our By-laws to any
stockholder who writes or calls us at the following address or
phone number: Attention: the Secretary, Atlas Air Worldwide
Holdings, Inc., 2000 Westchester Avenue, Purchase, New
York, 10577,
(914) 701-8000.
Extent of
Incorporation by Reference of Certain Materials
The Audit Committee Report and the Compensation Committee Report
on Executive Compensation included in this Proxy Statement do
not constitute soliciting materials and should not be deemed
filed or incorporated by reference into any other filing made by
us under or subject to Regulation 14A or 14C (other than
Item 7 to Regulation 14A), or to the liabilities of
Section 18 of the Exchange Act, except to the extent we
specifically incorporate such report or performance graph by
reference therein.
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OTHER
MATTERS
As of the date of this Proxy Statement, we know of no business
that will be presented for consideration at the Annual Meeting
other than the election of directors, ratification of the
selection of our independent auditors and the approval of the
amendment to the 2007 Incentive Plan, all as described above. If
any other matter is properly brought before the Annual Meeting
for action by stockholders, all proxies (in the enclosed form)
returned to us will be voted in accordance with the
recommendation of the Board of Directors or, in the absence of
such a recommendation, in accordance with the judgment of the
proxy holder.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY AND THAT
YOUR SHARES BE REPRESENTED. STOCKHOLDERS ARE URGED TO FILL IN,
SIGN AND PROMPTLY RETURN THE ACCOMPANYING FORM OF PROXY IN
THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
WILLIAM J. FLYNN
President and Chief Executive Officer
April 16, 2008
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Ñ DETACH PROXY CARD HERE Ñ
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Please sign, date and return This proxy card in
the enclosed envelope. |
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Votes MUST be indicated (x)
in Black or Blue ink. |
1. Election of Directors
The Board of Directors
recommends a vote FOR the listed nominees.
Nominees: |
Robert F. Agnew, Timothy J. Bernlohr, Keith E. Butler,
Eugene I. Davis, William J. Flynn, James S. Gilmore,
Carol B. Hallett and Frederick McCorkle.
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Certification:
Pursuant to federal law and Atlas Air Worldwide Holdings, Inc.s certificate of incorporation and by-laws, voting stock is subject to certain foreign ownership restrictions.
By signing below, you represent that (1) you are a United States citizen as that term is defined by federal aviation law, or (2) the shares of stock
represented by this Proxy have been registered on the foreign stock record of the Company, as provided in the by-laws.
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FOR all nominees for director listed
above (except as marked to the contrary). |
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WITHHOLD AUTHORITY to vote for all nominees
listed above. |
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WITHHOLD AUTHORITY to vote for an
individual nominee(s). Write name(s) below. |
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Mark here if you plan to attend the meeting.
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If you attend the meeting,
you will be accompanied by ________________ |
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Ratification of the selection of
PricewaterhouseCoopers LLP as the
Companys independent auditors.
The Board of Directors recommends a vote
FOR this proposal. |
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ABSTAIN |
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Approval of the amendment to the
2007 Incentive Plan. The Board of Directors recommends a
vote FOR this proposal. |
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SCAN LINE (FPO)
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Please sign exactly as name appears on this Proxy. Joint owners each should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give the full title. If signing in the name of a corporation or partnership, please
sign full corporate or partnership name and indicate title of authorized signatory.
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Date |
Share Owner sign here |
Co-Owner sign here |
ATLAS AIR WORLDWIDE HOLDINGS, INC.
2000 Westchester Avenue, Purchase, New
York 10577
Proxy for the Annual
Meeting of Stockholders May 21, 2008
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned appoints Jason Grant, Adam R. Kokas and Michael W. Borkowski, and each of them, with full power of substitution in each, as proxies and authorizes them to vote all shares of common stock that the undersigned is entitled to vote at the Annual Meeting of Stockholders of Atlas Air Worldwide Holdings, Inc., to be held at the offices of Ropes & Gray LLP, 1211 Avenue of the Americas, 38th Floor, New York, NY 10036 on Wednesday, May 21, 2008 at 10:00 a.m., local time, and at any adjournment or
postponement of the meeting, as indicated below.
Please date, sign and return this proxy promptly. This Proxy, when properly executed and returned, will be voted in the manner directed herein by the undersigned stockholder. If no direction is given, this Proxy will be voted FOR the election as directors of all of the nominees listed on the reverse side, FOR the ratification of the selection of PricewaterhouseCoopers LLP as the Companys independent auditors and FOR the approval of the amendment to the 2007 Incentive Plan as described
in the Proxy Statement. The undersigned authorizes the Proxies to vote, in their discretion, upon any other matters as may properly come before the Annual Meeting.
If you plan to attend the meeting,
please indicate in the space provided on the reverse side.
The Board of Directors recommends a vote FOR the election as directors of the persons named in proposal 1, FOR the ratification of the selection of PricewaterhouseCoopers as the Companys independent auditors as set forth in proposal 2, and FOR the approval of the amendment to the 2007 Incentive Plan as set forth in proposal 3.
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To change your
address, please
mark this box and
provide your new
address below.
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Change of address:
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ATLAS AIR WORLDWIDE HOLDINGS, INC. P.O. BOX 11162 NEW
YORK, N.Y. 10203-0162 |
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IMPORTANT: TO BE SIGNED AND DATED ON THE
REVERSE SIDE
Please return this card in
the self-addressed envelope provided