SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ X ] Definitive Information Statement
AIR TRANSPORTATION HOLDING COMPANY, INC.
(Name of Registrant As Specified In Charter)
AIR TRANSPORTATION HOLDING COMPANY, INC.
(Name of Person(s) Filing the Information Statement)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-
11.
1. Title of each class of securities to which transaction applies:
________________________________________________________________________
__________
2. Aggregate number of securities to which transaction applies:
________________________________________________________________________
__________
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
________________________________________________________________________
__________
4. Proposed maximum aggregate value of transaction:
______________________________________________________________________________
____
[ ] 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.
1. Amount Previously Paid:
_____________________
2. Form, Schedule or Registration Statement No.:
DEFINITIVE INFORMATION STATEMENT
3. Filing Party:
AIR TRANSPORTATION HOLDING COMPANY, INC.
4. Date Filed:
JULY 25, 1996
1
AIR TRANSPORTATION HOLDING COMPANY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 20, 1996
AND
INFORMATION STATEMENT
JULY 24, 1996
2
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AIR TRANSPORTATION HOLDING COMPANY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 20, 1996
To Our Stockholders:
The annual meeting of stockholders of Air Transportation Holding
Company, Inc. (the "Company") will be held at 1900 Independence Center, 101
North Tryon Street, Charlotte, North Carolina on Tuesday, August 20, 1996 at
10:00 a.m. local time, for the purpose of considering and acting on the
following matters:
1. To elect ten directors to serve until their successors are duly
elected and qualified;
2. To ratify the appointment of Deloitte & Touche LLP as the
independent auditors of the Company for the current fiscal year;
and
3. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Only stockholders of record as of the close of business on July 5, 1996
are entitled to notice of and to vote at the annual meeting and adjournments
thereof.
Because of the expense involved in collecting proxies, the Company is
not soliciting proxies. Accordingly, to vote on matters that will be
considered at the Annual Meeting you must either attend the meeting or deliver
a valid proxy to a person who attends the meeting. WE ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The annual report of the Company also accompanies this notice.
By Order of the Board of Directors
John J. Gioffre
Secretary
July 24, 1996
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AIR TRANSPORTATION HOLDING COMPANY, INC.
3524 Airport Road
Maiden, North Carolina 28650
Telephone (704) 377-2109
INFORMATION STATEMENT
INTRODUCTION
This information statement is furnished to the stockholders of Air
Transportation Holding Company, Inc. (hereinafter sometimes referred to as the
"Company") by the Board of Directors in connection with the annual meeting of
stockholders of the Company to be held on Tuesday, August 20, 1996 at 10:00
a.m. at 1900 Independence Center, 101 North Tryon Street, Charlotte, North
Carolina. Action will be taken at the annual meeting for the election of
directors, the ratification of the appointment of independent auditors, and
any other business that properly comes before the meeting. As provided in the
Company's bylaws, up to ten directors may be elected.
Because of the expense involved in collecting proxies, the Company is
not soliciting proxies. Accordingly, to vote on matters that will be
considered at the Annual Meeting you must either attend the meeting or deliver
a valid proxy to a person who attends the meeting. WE ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This information statement is being mailed to stockholders on or about
July 24, 1996. The Company's 1996 Annual Report to Stockholders accompanies
this information statement.
VOTING SECURITIES
Only stockholders of record at the close of business on July 5, 1996
will be entitled to vote at the annual meeting or any adjournment or
adjournments thereof. The number of outstanding shares entitled to vote at
the stockholders meeting is 2,613,433. The presence of a majority of the
outstanding shares of the Company's Common Stock, par value $.25 per share
(the "Common Stock"), represented in person or by proxy at the meeting will
constitute a quorum. Directors will be elected by a plurality of the votes
cast. Cumulative voting is not allowed. Accordingly, abstentions and broker
non-votes will not effect the outcome of the election of directors. The
ratification of independent auditors and any other business coming before the
meeting requires the affirmative vote of a majority of the shares present or
represented at the meeting and entitled to vote. On such matters, an
abstention will have the same effect as a negative vote but, because shares
held by brokers will not be considered entitled to vote on matters as to which
the brokers withhold authority, a broker non-vote will have no effect on votes
on these matters.
5
CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding the beneficial
ownership of shares of Common Stock (determined in accordance with Rule 13d-3
of the Securities and Exchange Commission) of the Company as of May 31, 1996
by each person that beneficially owns five percent or more of the shares of
Common Stock. Each person named in the table has sole voting and investment
power with respect to all shares of Common Stock shown as beneficially owned,
except as otherwise set forth in the notes to the table.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Amount of
Title of Name and Address of Beneficial Ownership Percent
Class Beneficial Owner as of May 31, 1996 of Class
Common Stock, David Clark, Trustee 1,294,826(1) 49.5%
par value $.25 P.O. Box 488
per share Denver, North Carolina 28650
Thomas B. Henson, Trustee 1,294,826(1) 49.5%
1900 Independence Center
101 North Tryon Street
Charlotte, North Carolina 28246
William H. Simpson 261,580(2) 9.6%
P.O. Box 488
Denver, North Carolina 28650
Kennedy Capital Management, Inc.(3) 229,438 8.8%
425 North Ballas Road
St. Louis, Missouri 63141
_____________________________
(1) Shares held pursuant to a revocable trust established by David Clark
under an Agreement dated August 21, 1995.
(2) Includes 1,200 shares held jointly with J. Hugh Bingham and 108,000
shares under options granted by the Company.
(3) Information regarding Kennedy Capital Management, Inc. is based upon
information provided by Kennedy Capital Management Inc. to the Company
on June 17, 1996.
6
DIRECTORS AND EXECUTIVE OFFICERS
J. Hugh Bingham, age 50, has served as Senior Vice President of the
Company since June 1990, as Executive Vice President from June 1983 to June
1990, and as a director since March 1987. Mr. Bingham also serves as an
Executive Vice President and a director of MAC and of CSA and as President of
MAS.
David Clark, age 73, has served as Chairman of the Board of Directors of
the Company and as Chairman of the Board of all the Company's subsidiaries
since June 23, 1983. From June 23, 1983, Mr. Clark also served as the
Company's, and each of its subsidiaries', Chief Executive Officer and since
August 1994 he has served as the Company's President. Mr. Clark is also
Chairman of the Board of MAC and of CSA.
John J. Gioffre, age 52, has served as Vice President-Finance and Chief
Financial Officer of the Company since April 1984 and as Secretary/Treasurer
of the Company since June 1983. He has served as a director of the Company
since March 1987. Mr. Gioffre also serves as Vice-President,
Secretary/Treasurer and a director of MAC and CSA and as Vice President-
Finance, Treasurer and Secretary of MAS.
H. Wayne Ross, age 51, has served as President of CSA since October
1988.
William H. Simpson, age 48, has served as Executive Vice President of
the Company since June 1990, as Vice President from June 1983 to June 1990,
and as a director of the Company since June 20, 1985. Mr. Simpson is also the
President and a director of MAC, a director of CSA and Executive Vice
President of MAS.
Menda J. Street, age 44, has served as Vice President of MAC since 1984.
Claude S. Abernethy, Jr., age 69, was elected as director of the Company
in June 1990. For the past five years, Mr. Abernethy has served as a Senior
Vice President of Interstate/Johnson Lane Corporation, a securities brokerage
and investment banking firm. Mr. Abernethy is also a director of
Interstate/Johnson Lane Corporation and Carolina Mills, Inc.
Sam Chesnutt, age 62, was elected a director of the Company in August
1994. Mr. Chesnutt serves as President of Sam Chesnutt and Associates, an
agribusiness consulting firm. From November 1988 to December 1994, Mr.
Chesnutt served as Executive Vice President of AgriGeneral Company, L.P., an
agribusiness firm.
Walter Clark, age 39, was elected a director of the Company in April
1996. Mr. Clark has been self-employed in the real estate development
business since 1985.
J. Leonard Martin, age 59, was elected a director in August 1994. Mr.
Martin is currently an independent aviation consultant. From April 1994 to
June 1995, Mr. Martin has served as Chief Operating Officer of Musgrave
Machine & Tool, Inc., a machining company. From January 1989 to April 1994,
Mr. Martin served as a consultant to the North Carolina Air Cargo Authority in
connection with the establishment of the Global TransPark air cargo facility
in Kinston, North Carolina. From 1955 through 1988 Mr. Martin was employed by
Piedmont Airlines, a commercial passenger airline, in various capacities,
ultimately serving as Senior Vice President-Passenger Services.
7
George C. Prill, age 73, has served as a director of the Company since
June 1982, as Chief Executive Officer and Chairman of the Board of Directors
from August 1982 until June 1983, and as President from August 1982 until
spring 1984. Mr. Prill has served as an Editorial Director for General
Publications, Inc., a publisher of magazines devoted to the air transportation
industry, since November 1992 and was retired from 1990 until that time. From
1979 to 1990, Mr. Prill served as President of George C. Prill & Associates,
Inc., of Charlottesville, Virginia, which performed consulting services for
the aerospace and airline industry. Mr. Prill has served as President of
Lockheed International Company, as Assistant Administrator of the FAA, as a
Senior Vice President of the National Aeronautic Association and Chairman of
the Aerospace Industry Trade Advisory Committee.
Terry Sanford, age 78, was elected a director in August 1994. Mr.
Sanford is President Emeritus of Duke University, a position held since 1985,
and has been a Professor of Public Policy at the Terry Sanford Institute of
Public Policy at Duke University since 1992. In addition, since 1993,
Mr. Sanford has been a partner of The Sanford Law Firm in Raleigh, North
Carolina. From 1986 to 1993, Mr. Sanford served as a United States Senator
representing the State of North Carolina. Mr. Sanford serves on the board of
directors of IMC, Inc., the parent of Golden Corral Corporation.
Walter Clark is David Clark's son.
The officers of the Company and its subsidiaries each serve at the
pleasure of the Board of Directors.
The Board of Directors has two standing committees: the Audit Committee
and the Compensation Committee. The Audit Committee consists of Messrs.
Abernethy, Martin and Sanford, all of whom are non-employee directors. The
Audit Committee was first formed during the 1995 fiscal year and met one time
during the fiscal year. The functions of the Audit Committee are to recommend
to the Board of Directors the firm of independent auditors to serve the
Company each fiscal year, to review the scope, fees and results of the audit
performed by the independent auditors and to review the adequacy of the
Company's system of internal accounting controls and the scope and results of
internal auditing procedures.
The Compensation Committee, which met twice during the most recent
fiscal year, consists of Messrs. Chesnutt, Martin and Prill, all of whom are
non-employee directors. The functions of the Compensation Committee include
establishing policies for the compensation of the Company's executive officers
and determining the types and amounts of remuneration to be paid to the
Company's executive officers.
During the fiscal year ended March 31, 1995, the Board of Directors met
three times. Each of the directors attended at least 75 percent of the total
of the meetings of the Board of Directors and committees thereof on which such
director served during such period, except Mr. Sanford. Each director
receives a director's fee of $500 per month and an attendance fee of $500 is
paid to outside directors for each meeting of the board of directors, or a
committee thereof, attended.
To the Company's knowledge, based solely on review of the copies of
reports under Section 16(a) of the Securities Exchange Act of 1934 that have
been furnished to the Company and written representations that no other
reports were required,
8
during the fiscal year ended March 31, 1996 all executive officers, directors
and greater than ten-percent beneficial owners have complied with all
applicable Section 16(a) filing requirements, except that Mr. Chesnutt was a
few days late in filing one report regarding one acquisition transaction.
The following table sets forth information regarding the beneficial
ownership of shares of Common Stock of the Company by each director of the
Company and by all directors and executive officers of the Company as a group
as of May 15, 1996, after adjustment for the one-for-five reverse split of
shares of Common Stock effected on that date. Each person named in the table
has sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned, except as otherwise set forth in the notes
to the table.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
Shares and Percent
of Common Stock
Beneficially Owned
Name Position with Company as of May 15, 1996
No. of Shares Percent
J. Hugh Bingham Senior Vice President, 116,080 (1)(2) 4.3%
Director
David Clark Chairman of the Board of 1,294,826 (3) 49.5%
Directors and Chief
Executive Officer
John J. Gioffre Vice President-Finance, 57,580 (4) 2.2%
Secretary and Treasurer,
Director
William H. Simpson Executive Vice President, 261,580 (1)(5) 9.6%
Director
Claude S. Abernethy, Jr. Director 22,611 *
Sam Chesnutt Director 3,600 *
Walter Clark Director 0 0%
J. Leonard Martin Director 100 (6) *
George C. Prill Director 45,966 1.8%
Terry Sanford Director 0 0%
All directors and N/A 1,823,343 (7) 63.9%
executive officers as a group
(12 persons)
9
__________________________________________
* Less than one percent.
(1) Includes 1,200 shares jointly held by Messrs. Simpson and Bingham.
(2) Includes 78,000 shares under options granted by the Company to Mr.
Bingham.
(3) Shares held pursuant to a revocable trust established by David Clark
under an Agreement dated August 21, 1995.
(4) Includes 42,000 shares under options granted by the Company to
Mr. Gioffre.
(5) Includes 108,000 shares under options granted by the Company to Mr.
Simpson.
(6) Such 100 shares are held by Mr. Martin's spouse of which shares Mr.
Martin disclaims beneficial ownership.
(7) Includes an aggregate of 243,000 shares of Common Stock members of such
group have the right to acquire within 60 days.
CERTAIN TRANSACTIONS
The Company leases its corporate and operating facilities at the Little
Mountain, North Carolina airport from Little Mountain Airport Associates, Inc.
("Airport Associates"), a corporation whose stock is owned by David Clark,
J. Hugh Bingham, William H. Simpson, John J. Gioffre and three unaffiliated
third parties. On May 30, 1996, the Company renewed its lease for this
facility, scheduled to expire on that date, for an additional five-year term,
and adjusted the rent to account for increases in the consumer price index.
The lease may be extended for an additional five-year term, with rental
payments to be adjusted to reflect changes in the consumer price index. Upon
the renewal, the monthly rental payment was increased from $7,000 to $8,073.
The Company paid aggregate rental payments of $84,000 to Airport Associates
pursuant to such lease during the fiscal year ended March 31, 1996.
As part of the Company's stock repurchase program, the Company
repurchased certain shares of Common Stock from Messrs. Bingham, Gioffre and
Simpson during the fiscal year ended March 31, 1996. On October 16, 1995, the
Company purchased for cash 25,000 shares of Common Stock from Mr. Simpson in a
negotiated transaction at a price of $4.35 per share. On March 15, 1996, the
Company purchased for cash 40,000 shares and 17,500 shares of Common Stock
from Messrs. Bingham and Gioffre, respectively, in negotiated transactions at
a price of $4.20 per share. The per share purchase price in each of the
foregoing transactions was equal to the average closing price per share of the
Common Stock as reported by NASDAQ for the 30-day period prior to the date of
repurchase.
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation paid during
each of the three most recent fiscal years to Mr. Clark, as Chief Executive
Officer, and to each of the other individuals who were executive officers on
March 31, 1996 with total compensation of $100,000 or more.
10
SUMMARY COMPENSATION TABLE
All Other
Annual Compensation Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($)
David Clark 1996 155,749 59,583 -
Chief Executive Officer 1995 144,738 59,345 -
1994 136,381 55,494 (1)
J. Hugh Bingham 1996 126,441 67,583 -
Senior Vice President 1995 107,177 67,845 -
1994 102,153 37,747 -
John J. Gioffre 1996 101,250 49,937 -
Vice President 1995 99,898 52,134 -
1994 90,443 28,747 -
William H. Simpson 1996 155,364 73,583 -
Executive Vice President 1995 149,221 79,845 -
1994 140,537 77,494 -
Menda J. Street 1996 93,316 38,291 -
Vice President of MAC 1995 89,283 39,422 -
1994 84,113 36,747 -
____________________________
(1) During the fiscal year ended March 31, 1994, the Company made secured
loans of $561,000 to Mr. Clark which loans and interest thereon have
been repaid.
The following table sets forth the number of shares of Common Stock
underlying unexercised options at March 31, 1996 held by each of the executive
officers listed in the Summary Compensation Table. The table also includes
the value of such options at March 31, 1996 based upon the closing bid price
of the Company's Common Stock in the over-the-counter market on that date
($4.00 per share) and the exercise price of the options.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Shares Number of Securities Value of Unexercised
Acquired Value Underlying Unexercised In-the-Money Options
On Realized Options at FY-End (#) at FY-End ($)
Exer- Exer- Unexer- Exer- Unexer-
Name cise # ($) cisable cisable cisable cisable
David Clark - - - - - -
J. Hugh Bingham 14,000 42,000 78,000 - 312,000 -
John J. Gioffre 8,000 24,000 42,000 - 168,000 -
William H. Simpson 20,000 60,000 108,000 - 432,000 -
Menda J. Street - - 15,000 - 60,000 -
EMPLOYMENT AGREEMENTS
Effective January 1, 1996, the Company and each of its subsidiaries
entered into an Employment Agreement with David Clark, the Company's Chief
Executive Officer. The employment agreement provides for an annual base
salary of $150,000, which may be increased upon annual review by the
Compensation Committee of the Company's Board of Directors. In addition, the
agreement provides for the payment to Mr. Clark of annual incentive bonus
compensation equal to two percent of the Company's consolidated earnings
before income taxes and extraordinary items as reported by the Company in its
Annual Report on Form 10-K. Payment of such bonus is to be made within 15
days after the Company files its Annual Report on Form 10-K with the
Securities and Exchange Commission.
The initial term of the employment agreement expires on December 31, 1998, and
the term is automatically extended for additional one-year terms unless either
Mr. Clark or the Company's Board of Directors gives notice to terminate
automatic extensions by September 1 of each year (commencing with September 1,
1996).
The agreement provides that upon Mr. Clark's retirement, he shall be entitled
to receive an annual benefit equal to $75,000 for up to ten years following
termination of employment. In the event Mr. Clark dies prior to the
expiration of such ten-year period, the remaining amount of such benefit is to
be paid to his estate.
The employment agreement provides that if the Company terminates Mr. Clark's
employment other than for "cause" (as defined in the agreement), Mr. Clark
will be entitled to receive a lump sum cash payment equal to the amount of
base salary payable for the remaining term of the agreement (at the then
current rate) plus one-half of the maximum incentive bonus compensation that
would be payable if Mr. Clark continued employment through the date of the
expiration of the agreement.
12.
Effective January 1, 1996, the Company and each of its subsidiaries entered
into employment agreements with J. Hugh Bingham, John J. Gioffre and William
H. Simpson, each of substantially similar form. Each of such employment
agreements provides for an annual base salary ($130,000, $103,443 and $165,537
for Messrs. Bingham, Gioffre and Simpson, respectively) which may be increased
upon annual review by the Compensation Committee of the Company's Board of
Directors. In addition, each such agreement provides for the payment of
annual incentive bonus compensation equal to a percentage (2.0%, 1.5% and 2.0%
for Messrs. Bingham, Gioffre and Simpson, respectively) of the Company's
consolidated earnings before income taxes and extraordinary items as reported
by the Company in its Annual Report on Form 10-K. Payment of such bonus is to
be made within 15 days after the Company files its Annual Report on Form 10-K
with the Securities and Exchange Commission.
The initial term of each such employment agreement expires on March 31, 1999,
and the term is automatically extended for additional one-year terms unless
either such executive officer or the Company's Board of Directors gives notice
to terminate automatic extensions which must be given by December 1 of each
year (commencing with December 1, 1996).
Each such agreement provides that upon the executive officer's retirement, he
shall be entitled to receive an annual benefit equal $75,000 ($60,000 for Mr.
Gioffre), reduced by three percent for each full year that the termination of
his employment precedes the date he reaches age 65. The retirement benefits
under such agreements may be paid at the executive officer's election in the
form of a single life annuity or a joint and survivor annuity or a life
annuity with a ten-year period certain. In addition, such executive officer
may elect to receive the entire retirement benefit in a lump sum payment equal
to the present value of the benefit based on standard insurance annuity
mortality tables and an interest rate equal to the 90-day average of the yield
on ten-year U.S. Treasury Notes.
Retirement benefits shall be paid commencing on such executive officer's 65th
birthday, provided that such executive officer may elect to receive benefits
on the later of his 62nd birthday, in which case benefits will be reduced as
described above, or the date on which his employment terminates, provided that
notice of his termination of employment is given at least one year prior to
the termination of employment. Any retirement benefits due under the
employment agreement shall be offset by any other retirement benefits that
such executive officer receives under any plan maintained by the Company. In
the event such executive officer becomes totally disabled prior to retirement,
he will be entitled to receive retirement benefits calculated as described
above.
In the event of such executive officer's death before retirement, the
agreement provides that the Company shall be required to pay an annual death
benefit to such officer's estate equal to the single life annuity benefit such
executive officer would have received if he had terminated employment on the
later of his 65th birthday or the date of his death, payable over ten years;
provided that such amount would be reduced by five percent for each year such
executive officer's death occurs prior to age 65, but in no event more than 50
percent.
Each of the employment agreements provides that if the Company terminates such
executive officer's employment other than for "cause" (as defined in the
agreement), such executive officer be entitled to receive a lump sum cash
payment equal to the amount of base salary payable for the remaining term of
13
the agreement (at the then current rate) plus one-half of the maximum
incentive bonus compensation that would be payable if such executive officer
continued employment through the date of the expiration of the
agreement(assuming for such purposes that the amount of incentive bonus
compensation would be the same in each of the years remaining under the
agreement as was paid for the most recent year prior to termination of
employment). Each of the agreements further provides that if any payment on
termination of employment would not be deductible by the Company under Section
280G(b)(2) of the Internal Revenue Code, the amount of such payment would be
reduced to the largest amount that would be fully deductible by the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors establishes the
compensation paid to the Company's executive officers, including the
individuals named in the Summary Compensation Table. The Compensation
Committee met twice during the fiscal year and also communicated informally by
telephone conferences between certain members of the Committee and the
distribution of memoranda to all members of the Committee.
Policies
The Compensation Committee seeks to establish compensation policies that
provide appropriate rewards to the Company's executive officers commensurate
with their service with the Company and to provide incentives for superior
performance. Executive compensation is comprised of three components: base
salary, annual cash bonuses and stock option awards and other equity-based
performance compensation. In setting an executive officer's base salary, the
Compensation Committee engages in a subjective evaluation, examining the
officer's level of responsibility in the Company and previous base
compensation, the officer's performance over both the short and longer terms,
the Company's performance over those periods and the length of the officer's
service with the Company, assigning no particular weight to any of these
factors. The Company has entered into employment agreements with certain of
its executive officers establishing a minimum base annual salary and providing
for an annual cash bonus equal to an established percentage of the Company's
earnings before income taxes and extraordinary items. Accordingly, the
Committee believes that a substantial portion of compensation of executive
officers will be tied directly to the Company's overall financial performance.
Although no stock options were granted to the Company's executive officers
during the three most recent fiscal years, stock options have been granted in
previous years. Such awards have been made on a discretionary basis. The
Compensation Committee believes that options are performance-based
compensation and serve as an incentive to management to remain with the
Company. Stock options and other equity-based performance compensation may be
awarded in the future.
Compensation of Chief Executive Officer
Mr. Clark's compensation was set in recognition of the substantial time,
effort and financial commitments Mr. Clark has made in directing the Company
to its current level of profitability. Although the Committee reviewed
generally the Company's improved financial position in setting Mr. Clark's
compensation, the level of Mr. Clark's compensation was not tied to particular
financial performance criteria or objectives, and accordingly was based on the
Committee's subjective evaluation of Mr. Clark and the performance of the
Company. Approximately 28 percent of Mr. Clark's
14
cash compensation in the most recent fiscal year was through the annual cash
bonus, which is based on the Company's net income.
During the fiscal year, the Company entered into an employment agreement with
Mr. Clark providing for a salary of at least $150,000 per year and an annual
bonus equal to two percent of the Company's annual earnings before income
taxes and extraordinary items. Accordingly, the Compensation Committee
anticipates that such performance-based compensation will continue to be a
significant component of the compensation made available to the Company's
Chief Executive Officer. The agreement also provides for certain payments to
Mr. Clark upon his retirement or upon termination without "cause" (as defined
in the agreement).
Compensation Committee
Sam Chesnutt
J. Leonard Martin
George C. Prill
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AIR TRANSPORTATION HOLDING COMPANY, INC., NASDAQ
MARKET AND PEER ISSUERS INDICES
The following graph compares the Company's cumulative total shareholder return
for the five most recent fiscal years, assuming an investment on March 31,
1991 of $100 in Common Stock and reinvestment of all dividends in Common
Stock, along with the cumulative total returns determined on the same basis of
a broad-based equity market index -- The Center for Research in Securities
Prices (CRSP) Total Return Index for the Nasdaq Stock Market (U.S.
Companies) -- and a peer index including all U.S. companies with stock
registered with the Securities and Exchange Commission having the same
standard industrial classification code as the Company.
15
March 31,
1991 1992 1993 1994 1995 1996
Company 100.0 103.2 146.2 263.9 218.2 240.6
Nasdaq 100.0 127.5 146.5 158.1 175.9 238.8
Peer (1) 100.0 118.3 136.0 174.3 174.2 180.7
__________________
(1)The peer issuers index is an index constructed by the Company and is
comprised of all U.S. companies with stock registered with the Securities and
Exchange Commission having the same standard industrial classification code as
the Company: Airborne Freight Corporation, Federal Express Corporation and
Pittston Services Group, Inc., which operates Emery Air Freight.
ELECTION OF DIRECTORS
Under the Company's Certificate of Incorporation and bylaws, directors
are elected at each annual meeting and hold office until their respective
successors are elected and have qualified. All of the incumbent directors
were elected by the stockholders at the last annual meeting. As provided in
the Company's bylaws, up to ten directors may be elected.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders ratify the
appointment of Deloitte & Touche LLP to serve as the independent auditors for
the Company and its subsidiary corporations for the fiscal year ending March
31, 1997. This firm has served as the independent auditors for the Company
since 1983. Representatives of Deloitte & Touche LLP are expected to be
present at the annual meeting and will have an opportunity to make a statement
and will be available to respond to appropriate questions.
ADDITIONAL INFORMATION
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER OF THE
COMPANY, AND TO EACH PERSON REPRESENTING THAT AS OF THE RECORD DATE FOR THE
MEETING HE OR SHE WAS A BENEFICIAL OWNER OF SHARES ENTITLED TO BE VOTED AT THE
MEETING, IF SOLICITED BY WRITTEN REQUEST, A COPY OF THE COMPANY'S 1996 ANNUAL
REPORT ON FORM 10-K TO THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO AIR
TRANSPORTATION HOLDING COMPANY, INC., 3524 AIRPORT ROAD, MAIDEN, NORTH
CAROLINA 28650, ATTENTION: MR. JOHN J. GIOFFRE, SECRETARY.
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OTHER MATTERS
The Board of Directors knows of no other matters that may be presented
at the meeting.
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