<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AIR EXPRESS INTERNATIONAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] 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.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
120 TOKENEKE ROAD
DARIEN, CONNECTICUT 06820
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 20, 1996
----------------
The Annual Meeting of Shareholders of Air Express International Corporation
(the "Company") will be held at the Hyatt Regency Greenwich, 1800 East Putnam
Avenue, Old Greenwich, Connecticut, on Thursday, June 20, 1996, at 11:00 a.m.,
Eastern Daylight Time, for the following purposes:
(1) To elect eight (8) directors;
(2) To approve the adoption of the Company's 1996 Incentive Stock Plan; and
(3) To transact such other business as properly may come before the meeting
or any adjournment thereof.
The Board of Directors has fixed May 3, 1996 as the record date for the
determination of shareholders entitled to notice of, and to vote at, the
meeting.
By Order of the Board of Directors
Daniel J. McCauley, Secretary
Darien, Connecticut
May 17, 1996
----------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN,
AND MAIL THE ACCOMPANYING FORM OF PROXY TO THE COMPANY AS PROMPTLY AS POSSIBLE
IN THE ENCLOSED STAMPED ENVELOPE.
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
120 TOKENEKE ROAD
DARIEN, CONNECTICUT 06820
----------------
PROXY STATEMENT
----------------
The accompanying proxy is solicited by the Board of Directors of Air Express
International Corporation (the "Company") in connection with the Annual Meeting
of Shareholders to be held on Thursday, June 20, 1996, or at any adjournment
thereof, for the purposes set forth in the accompanying notice of the meeting.
The Board of Directors has fixed the close of business on May 3, 1996 as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the meeting. On that date, there were outstanding 19,360,094 shares of
Common Stock, exclusive of shares held in the Company's treasury. Each holder
of Common Stock is entitled to one vote for each share held on all matters to
come before the meeting, including the election of directors. Shares may be
voted in person or by proxy. The accompanying proxy may be revoked by the
person giving it at any time prior to its being voted by filing a written
notice of such revocation with the Secretary of the Company or by attending the
meeting and voting in person.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 22, 1996 (except as otherwise
noted) information with respect to the beneficial ownership of the Company's
Common Stock by (i) each person known by the Company to beneficially own more
than five percent of the outstanding Common Stock of the Company, (ii) each
executive officer of the Company named in the Summary Compensation Table on
page 13 of this Proxy Statement, (iii) each current director and each nominee
for election as a director and (iv) all directors and executive officers of the
Company as a group. Unless otherwise indicated in the footnotes to this table,
beneficial ownership of shares represents sole voting and investment power with
respect to those shares:
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OWNED OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY(#) SHARES(%)(1)
---------------- --------------- -------------
<S> <C> <C>
Neuberger & Berman (2)........................... 961,885 5.2
605 Third Avenue
New York, New York 10158
Quest Advisory Corp. (3)......................... 1,029,336 5.5
1414 Avenue of the Americas
New York, New York 10019
Wellington Management Company (4)................ 2,107,950 11.3
75 State Street
Boston, Massachusetts 02109
Hendrik J. Hartong, Jr. (5)...................... 1,097,588 5.9
Guenter Rohrmann (6)............................. 301,641 1.6
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OWNED OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY(#) SHARES(%)(1)
---------------- --------------- -------------
<S> <C> <C>
Robert J. O'Connell (7).......................... 38,379 (11)
Dennis M. Dolan (8).............................. 56,400 (11)
Daniel J. McCauley (9)........................... 24,750 (11)
John M. Fowler................................... 30,000 (11)
Donald J. Keller................................. 3,375 (11)
Andrew L. Lewis IV............................... 3,500 (11)
Richard T. Niner (10)............................ 1,061,077 5.7
John Radziwill................................... 272,335 1.5
Noel E. Vargas................................... (12) (12)
All directors and executive officers as a group
(consisting of 13 persons)...................... 2,252,375 12.1
</TABLE>
- --------
(1) Shares issuable to any person upon the conversion of outstanding 6%
Convertible Subordinated Debentures Due 2003 (the "Debentures") owned by
that person, as well as shares issuable upon the exercise of presently
exercisable stock options owned by that person, are deemed outstanding for
the purpose of computing the number and percentage of outstanding shares
owned by that person (and any group that includes that person) but are not
deemed outstanding for the purpose of computing the percentage of
outstanding shares owned by any other person.
(2) Based on information set forth in a statement on Schedule 13G filed by
Neuberger & Berman ("N&B"), at December 31, 1995 N&B owned an aggregate of
961,885 shares on behalf of clients for whom it acts as an investment
advisor. In addition, at that date partners of N&B owned in their personal
accounts an aggregate of 9,300 shares, as to which N&B disclaims beneficial
ownership.
(3) Based on information set forth in a statement on Schedule 13G filed
jointly by Quest Advisory Corp. ("Quest"), Quest Management Company ("QMC")
and Charles M. Royce, at December 31, 1995 Quest owned an aggregate of
1,000,686 shares and its affiliate QMC owned an aggregate of 28,650 shares,
in each case on behalf of clients for whom it acts as an investment advisor.
Mr. Royce may be deemed to be a controlling person of Quest and QMC and, as
such, may be deemed to beneficially own the shares held by Quest and QMC,
respectively.
(4) Based on information set forth in a statement on Schedule 13G filed by
Wellington Management Company ("Wellington"), at December 31, 1995
Wellington shared voting and dispositive power with respect to an aggregate
of 2,107,950 shares owned by clients for whom it acts as an investment
advisor.
(5) Includes 31,500 shares issuable upon the exercise of presently exercisable
stock options, 2,203 shares issuable upon the conversion of $50,000
principal amount of Debentures owned by Mr. Hartong and 17,724 shares held
in custodial accounts for the benefit of Mr. Hartong's children. Also
includes 712,462 shares owned by Brynwood Partners II L.P., a private
investment partnership. Mr. Hartong is a general partner of Brynwood
Management II, a limited partnership that serves as general partner of
Brynwood Partners II L.P. Mr. Hartong's address is c/o Brynwood Partners,
Two Soundview Drive, Greenwich, Connecticut 06830.
(6) Includes 47,250 shares issuable upon the exercise of presently exercisable
stock options and 1,982 shares issuable upon the conversion of $45,000
principal amount of Debentures owned by Mr. Rohrmann.
(7) Includes 23,625 shares issuable upon the exercise of presently exercisable
stock options and 44 shares issuable upon the conversion of a Debenture, in
the principal amount of $1,000, owned by Mr. O'Connell.
(8) Includes 15,750 shares issuable upon the exercise of presently exercisable
stock options and 440 shares issuable upon the conversion of $10,000
principal amount of Debentures owned by Mr. Dolan.
2
<PAGE>
(9) Consists of 24,750 shares issuable upon the exercise of presently
exercisable stock options.
(10) Includes 3,375 shares held in custodial accounts for the benefit of Mr.
Niner's children. Also includes 712,462 shares owned by Brynwood Partners II
L.P. Mr. Niner is a general partner of Brynwood Management II L.P., which
serves as general partner of Brynwood Partners II L.P. Mr. Niner's address
is c/o Brynwood Partners, Two Soundview Drive, Greenwich, Connecticut 06830.
(11) Less than 1%.
(12) Upon consummation on April 26, 1996 of the Company's acquisition of Lusk
Shipping Company, Inc., of which Mr. Vargas was a principal stockholder, Mr.
Vargas received an aggregate of 245,085 newly-issued shares of the Company's
Common Stock, representing approximately 1.3% of the total number of shares
of Common Stock outstanding after giving effect to that acquisition.
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting, each to serve until
the next Annual Meeting of Shareholders and until his successor has been duly
elected and qualifies. If no direction to the contrary is given, all proxies
received by the Board of Directors will be voted in favor of the nominees
listed below. If any nominee is unable or declines to serve, an event not now
anticipated by the Board of Directors, such proxies may be voted for the
election of a substitute designated by the Board of Directors. Each of the
nominees other than Mr. Vargas is currently serving as a director of the
Company and, with the exception of Mr. Radziwill (who was elected a director in
September 1995), was elected to that position at the last Annual Meeting of
Shareholders.
NOMINEES FOR ELECTION
The following table sets forth information with respect to each nominee for
election as a director at the Annual Meeting:
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ---- --- -------------------------------------------- ------------
<S> <C> <C> <C>
John M. Fowler 47 Independent business consultant 1985
since July 1995; Executive Vice
President of Travelers Group
Inc. (formerly Primerica
Corporation), New York, New
York, 1991 through June 1995.
Director of Transatlantic
Holdings, Inc.
Hendrik J. Har- 57 Chairman of the Board of the 1985
tong, Jr. Company since 1985 (Chief
Executive Officer from 1985 to
1989); General Partner since
1985 of Brynwood Management and
since 1988 of Brynwood
Management II, entities that
serve, respectively, as
managing general partner of
Brynwood Partners Limited
Partnership and Brynwood
Partners II L.P., private
investment partnerships.
Director of Hurco Companies,
Inc.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ---- --- -------------------------------------------- ------------
<S> <C> <C> <C>
Donald J. Keller 64 Chairman of the Board of 1990
Prestone Products Corporation
since January 1995; Chairman of
the Board of B. Manischewitz
Company since March 1993
(President, Co-Chief Executive
Officer and a director from May
1992 to March 1993); consultant
and private investor from 1989
to May 1992. Director of Sysco
Corporation.
Andrew L. Lewis 39 President, KRR Partners L.P., a 1986
IV private investment partnership,
since July 1993; independent
business consultant from July
1990 to March 1993; Chief
Executive Officer of
Environmental Management
Services, an environmental
consulting firm, from 1988 to
1990. Director of Hurco
Companies, Inc. and
Independence Blue Cross and
Blue Shield of Philadelphia.
Richard T. Niner 57 General Partner since 1985 of 1985
Brynwood Management and since
1988 of Brynwood Management II,
entities that serve,
respectively, as managing
general partner of Brynwood
Partners Limited Partnership
and Brynwood Partners II L.P.,
private investment
partnerships. Director of Arrow
International, Inc. and Hurco
Companies, Inc.
John Radziwill 48 President of Radix Organization 1995
Inc. since 1976; President of
Radix Ventures Inc. from 1979
until its acquisition by the
Company in June 1995.
Guenter Rohrmann 57 President and Chief Executive 1985
Officer of the Company since
1989 (President and Chief
Operating Officer from 1985 to
1989).
Noel E. Vargas 68 President of Lusk Shipping --
Company, Inc. since 1975
(President and Chief Executive
Officer until April 26, 1996).
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF EACH OF
THE FOREGOING NOMINEES.
4
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation and Stock Option Committee and a Nominating Committee.
The Executive Committee (consisting of Messrs. Hartong, Niner and Rohrmann)
has all of the powers of the Board of Directors between meetings of the Board,
subject to Delaware law.
The Audit Committee (consisting of Messrs. Lewis, Keller and Niner) has the
responsibility of meeting with the Company's independent public accountants and
internal auditors to review the plan, scope and results of the audits of the
Company's annual financial statements and the recommendations of the
independent accountants regarding the Company's internal accounting systems and
controls. The Committee also recommends the appointment of the independent
accountants for the ensuing year.
The Compensation and Stock Option Committee (consisting of Messrs. Fowler,
Keller and Lewis) reviews and approves the compensation of officers, including
the Chief Executive Officer, and administers the Company's stock option plans.
The Nominating Committee (consisting of Messrs. Fowler, Hartong, Niner and
Rohrmann) screens and selects candidates to stand for election as directors of
the Company.
During the fiscal year ended December 31, 1995, there were five meetings of
the Board of Directors, one meeting of the Executive Committee, three meetings
of the Audit Committee, two meetings of the Compensation and Stock Option
Committee and one meeting of the Nominating Committee. Each director attended
more than 75% of the meetings of the Board of Directors and of each committee
thereof on which he served.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's directors and executive officers, and each person who owns
more than ten percent of the Company's Common Stock, file with the Securities
and Exchange Commission an initial report of beneficial ownership and
subsequent reports of changes in beneficial ownership of the Company's Common
Stock. To the Company's knowledge, all reports required to be so filed by such
persons have been filed on a timely basis. The Company believes that all of its
directors and executive officers, and all persons owning beneficially more than
ten percent of the Company's Common Stock, complied with all filing
requirements applicable to them with respect to transactions during the fiscal
year ended December 31, 1995.
DIRECTOR COMPENSATION
During 1995, each director who is not an officer of the Company received an
annual fee of $16,000 for serving as a director ($4,000 in the case of Mr.
Radziwill, who was elected a director in September 1995) and $1,000 for each
day of attendance at meetings of the Board of Directors or a committee thereof.
5
<PAGE>
ADOPTION OF 1996 INCENTIVE STOCK PLAN
INTRODUCTION
On April 17, 1996, the Company's Board of Directors adopted the 1996
Incentive Stock Plan (the "Plan"), subject to stockholder approval at the
Annual Meeting. The Plan is substantially similar to and intended to replace
the Company's 1991 Incentive Stock Plan. At March 31, 1996, only 5,687 shares
remained available for future grants under the 1991 plan.
The Board of Directors believes that stock options have been, and will
continue to be, an important element in the Company's management compensation
program. In addition to assisting the Company in its efforts to attract and
retain the services of key management personnel, grants of options serve to
more effectively link executive compensation to stockholder returns through
stock price performance and provide recipients with an additional incentive for
outstanding performance. The Plan will make available an additional 500,000
shares for grants of options. The Board of Directors believes that this
increase in the total number of shares available for grants is appropriate and
will enable the Company to continue to avail itself of the benefits of its
stock option program.
Similar to the 1991 plan, the Plan also permits the grant of stock
appreciation rights. Although the Company has never granted stock appreciation
rights under the 1991 plan and the Board of Directors does not currently expect
that rights will be granted in the foreseeable future, the Board of Directors
considers it appropriate to retain the ability to grant rights should the
Compensation and Stock Option Committee, which is charged with responsibility
for administering the Plan, determine it to be advisable in the future.
SUMMARY OF PLAN AS AMENDED
The following is a summary of the material features of the Plan. The summary
does not purport to be complete and is qualified in its entirety by reference
to the full text of the Plan, a copy of which is appended to this Proxy
Statement as Annex A.
The Plan provides for the granting to eligible employees of stock options
("Options"), which may be Incentive Options (as defined) or Non-Qualified
Options (as defined). In addition, stock appreciation rights ("Rights") may be
granted alone or in conjunction with or in the alternative to Options.
Options and Rights may be granted with respect to an aggregate of up to
500,000 shares (the "Shares") of the Company's Common Stock (which number is
subject to adjustment in the event of stock dividends, stock splits and other
similar events) during the period from July 1, 1996 through June 30, 2006. To
the extent that an Option is not exercised within the period of exercisability
specified therein, it will expire as to the then unexercised part. If any
Option or Right terminates prior to the expiration of the Plan, the Committee
has the right to use the Shares as to which such Option or Right was not
exercised to grant one or more additional Options or Rights to any eligible
employee. The Shares may be made available from either authorized but unissued
shares, treasury shares or both. The effective date of the Plan is July 1,
1996. In the event that the Plan is not approved by shareholders of the Company
on or prior to December 31, 1996, the Plan and any Options and Rights
previously granted thereunder will become void.
The Compensation and Stock Option Committee (the "Committee") has been
delegated authority to administer the Plan. This Committee must consist of not
fewer than three members of the Board of Directors who are both (i)
"disinterested persons" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and (ii) "outside
directors" within the meaning of Section
6
<PAGE>
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Members
of the Committee are not eligible to receive Options or Rights under the Plan.
The Committee has the authority to determine the individuals to whom and the
date on which Options and Rights are to be granted, the number of Shares to be
subject to each Option and Right, the exercise price of Shares subject to each
Option and Right and the other terms and provisions of each Option and Right.
The Company will receive no monetary consideration for granting Options or
Rights under the Plan.
Options and Rights may be granted only to salaried key employees (including
executive officers) of the Company, or of any subsidiary corporation or parent
corporation of the Company, who are not members of the Committee.
The aggregate number of Shares with respect to which Options and/or Rights
may be granted to any one employee pursuant to the plan may not exceed 125,000
Shares. In addition, no individual employee may be granted Incentive Options to
purchase Shares if the aggregate fair market value of Shares with respect to
which Incentive Options are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the Company or any
subsidiary or parent corporation of the Company) exceeds $100,000. For the
purpose of the foregoing limitation, the fair market value of Shares subject to
an Incentive Option is to be determined as of the time the Option is granted,
the limitation is to be applied by taking into account Options in the order in
which they were granted and Incentive Options granted before 1987 need not be
taken into account.
The Committee may require, as a condition of granting any Option or Right,
that the grantee enter into an agreement with the Company providing that in the
event of the termination of employment of the grantee for any reason (other
than dismissal without cause) the grantee will not, for a period determined by
the Committee at the time of grant, enter into any other employment, or
participate directly or indirectly in any other business or enterprise that is
competitive with the business of the Company or enter into any employment in
which such employee will be called upon to utilize special knowledge and
information obtained through employment with the Company or any subsidiary or
parent corporation of the Company. The Committee also may require that the
grantee not sell or otherwise dispose of Shares acquired pursuant to the
exercise of an Option or a Right for a period of six months from the date of
acquisition.
The purchase price of Shares issuable upon exercise of an Incentive Option
may not be less than 100% of the fair market value of such Shares on the date
the Option is granted; provided, however, that, in the case of an Incentive
Option granted to a person who, at the time of the grant, owns shares of the
capital stock of the Company or of any subsidiary or parent corporation of the
Company representing more than 10% of the total combined voting power of the
outstanding capital stock of the Company or of such subsidiary or parent
corporation (hereafter, a "Control Person"), the purchase price may not be less
than 110% of such fair market value on the date the Option is granted. The
purchase price of Shares issuable upon exercise of a Non-Qualified Option will
be such amount as the Committee deems appropriate but may not be less than 100%
of the fair market value of such Shares on the date the Option is granted. The
purchase price must be paid in full at the time of exercise of the Option and
payment must be made in cash, except that in lieu of cash, the holder of an
Option may, if the instrument evidencing the Option so permits, exercise such
Option, in whole or in part, by delivering to the Company outstanding shares of
the Company's Common Stock owned by such holder. For purposes of determining
the portion of the exercised Option being paid for by the delivery of Shares,
such Shares shall be valued at their fair market value. All cash proceeds
received by the Company from the exercise of Options will be used for general
corporate purposes.
7
<PAGE>
In general, any Incentive Option granted under the Plan may be exercised
during a period of not more than ten years from the date of grant (five years
in the case of an Incentive Option granted to a Control Person), although a
shorter period may be specified in the instrument evidencing such Incentive
Option, in such amounts as the Committee may specify at the time of grant. A
Non-Qualified Option may be exercised during the period specified by the
Committee in the instrument evidencing such Non-Qualified Option. The Committee
may fix and thereafter, may accelerate, in whole or in part, the period within
which any Option may be exercised.
In the discretion of the Committee, a Right may be granted (i) alone, (ii)
simultaneously with the grant of an Option (either Incentive or Non-Qualified)
and in conjunction therewith or in the alternative thereto or (iii) subsequent
to the grant of a Non-Qualified Option and in conjunction therewith or in the
alternative thereto.
The exercise price of a Right granted alone will be set by the Committee at
the time of grant but may not be less than 100% of the fair market value of one
Share on the date of grant of such Right. A Right granted simultaneously with
or subsequent to the grant of an Option and in conjunction therewith or in the
alternative thereto must have the same exercise price as the related Option,
may not be transferred except upon the same terms and conditions as those
applicable to the related Option and must be exercisable to the same extent as
the related Option; provided, however, that a Right, by its terms, may not be
exercised unless, at the time of exercise, the fair market value of the Shares
subject to the Right and related Option exceeds the exercise price thereof.
Upon exercise of a Right granted simultaneously with or subsequent to an
Option, and in the alternative hereto, the number of Shares for which the
related Option may be exercised will be reduced by the number of Shares for
which the Right has been exercised. The number of Shares for which a Right is
exercisable will be reduced upon any exercise of a related Option by the number
of Shares for which such Option has been exercised.
The holder of a Right may elect to receive cash, Shares or a combination of
cash and Shares having an aggregate value equal to the product of (i) the
excess of (x) the fair market value of one share of Common Stock on the date
the Right is exercised over (y) the exercise price specified in such Right or
its related Option, multiplied by (ii) the number of Shares with respect to
which such Right is being exercised. The aggregate value of cash and Common
Stock payable with respect to each Share for which a Right is exercised shall
be limited, however, to 100% of the exercise price per Share under such Right.
A Right will be deemed exercised on the last day of its term, if not otherwise
exercised by its holder, provided that the fair market value of the Shares
subject to the Right exceeds the exercise price thereof on such date.
The election by a holder of a Right to receive cash in full or partial
settlement of a Right, and any exercise of such Right for cash, may be made
only during the period beginning on the third business day following the date
of release for publication by the Company of a quarterly or annual summary
statement of earnings and ending on the twelfth business day following such
date. The Committee, in its sole discretion, may disapprove, in whole or in
part, a holder's election to receive cash.
In the event of a Change of Control (as defined) of the Company, all then
outstanding Options and Rights will become immediately exercisable. Moreover,
the Committee may determine, in its discretion, that upon the occurrence of a
Change of Control, Options and Rights will terminate within a specified number
of days after notice to the holder thereof, and such holder shall receive, with
respect to each Share subject to such Option or Right, cash in an amount equal
to the excess of the fair market value of such Shares immediately prior to the
occurrence of such transaction over the exercise price of such Option or Right.
For
8
<PAGE>
purposes of the Plan, and except as noted below, a "Change of Control" will be
deemed to occur if (a) there occurs a change in control of the direction and
administration of the Company's business that would be required to be reported
in response to Item 6(e) of Schedule 14A promulgated under the Exchange Act, or
(b) any person (excluding any employee benefit plan) becomes the beneficial
owner of securities representing 50% or more of the combined voting power of
the Company's outstanding securities then entitled to vote for the election of
directors, or (c) during any consecutive two-year period, those individuals who
at the beginning of such period constituted the Board of Directors or who would
be Continuing Directors (as defined) cease for any reason to constitute a
majority of the Board of Directors, or (d) the Board of Directors approves the
sale of all or substantially all of the Company's assets or any merger,
consolidation or similar business combination involving the Company that would
result in the occurrence of any event described in clause (b) or clause (c)
above. However, none of the foregoing events will be deemed a Change of Control
if it occurs as a result of an agreement or transaction approved by the
Company's Continuing Directors who, in granting such approval, determine that
it is not in the Company's best interest for such agreement or transaction to
constitute a Change of Control for purposes of the Plan. The term "Continuing
Directors" is defined in the Plan to mean and include each director of the
Company in office on July 1, 1996 and any successor to any such director and
additional director who, after that date, was nominated or selected by a
majority of the Continuing Directors then in office and who, at the time of his
nomination or selection, is not an "affiliate" or "associate" (as defined in
Regulation 12B under the Exchange Act) of a Control Person of the Company.
Options and Rights are non-transferable, except by will or the laws of
descent and distribution. Upon an employee's termination of employment, unless
otherwise specified in the instrument evidencing the Option or Right, any
Option or Right previously granted to that employee pursuant to the Plan shall,
to the extent not theretofore exercised, terminate and become null and void,
except that (a) if the employee dies (i) while in the employ of the Company (or
any subsidiary or parent thereof), or (ii) within three months following the
employee's termination of employment by reason of retirement or dismissal other
than for cause (as defined in the Plan), or (iii) within one year following the
employee's termination of employment by reason of disability, such employee's
legal representative (or heirs or beneficiaries, if appropriate) may, not later
than one year from the date of the employee's death, exercise any Options or
Rights which were exercisable on the date of such employee's death; and (b) if
the termination of employment is due to such employee's retirement, disability
or dismissal other than for cause (as defined in the Plan), such employee or
his legal representative shall have the right to exercise the Options or Rights
which were exercisable on the date of termination of such employee's
employment, at any time up to and including (i) three months after the date of
such termination of employment in the case of termination by reason of
retirement or dismissal other than for cause, and (ii) one year after the date
of termination of employment in the case of termination by reason of
disability.
In the event of any change in the outstanding shares of Common Stock of the
Company (through events such as a stock split, stock dividend,
recapitalization, spin-off, split-up, split-off, merger, consolidation or
reorganization of the Company or other like change in its capital structure),
appropriate adjustments to the Options and Rights are to be made so that such
Options and Rights become exercisable for such securities, cash or other
property as would have been received in respect of Shares had the Option or
Right been fully exercised prior to such change, and adjustments are to be made
in the number of Shares and exercise of Options and Rights to prevent dilution
or enlargement of rights thereunder, subject to the rules of Section 424(a) of
the Code as to Incentive Options and related Rights.
The Plan may be amended from time to time by the Board of Directors, with the
concurrence of the Committee, provided that existing rights under any Option or
Right theretofore granted may not be adversely affected without the consent of
the holder thereof. In addition, the Board of Directors may not, without the
9
<PAGE>
approval of the Company's shareholders, make any amendment to the Plan that
would increase the total number of shares reserved for issuance under the Plan
(other than an increase to adjust for changes in capitalization), reduce the
exercise price of an Incentive Option below 100% of the fair market value of
the underlying Shares at the time such Incentive Option is granted, modify the
provisions of the Plan relating to eligibility or materially increase the
aggregate benefits that may be provided to participants under the Plan.
The Board of Directors may at any time suspend or terminate the Plan,
provided that rights and obligations under any Option or Right granted while
the Plan is in effect may not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the holder thereof.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Options
Incentive Options under the Plan are intended to meet the definitional
requirements of Section 422(b) of the Code for "incentive stock options."
Under the Code, the grantee of an Incentive Option generally is not subject
to regular income tax upon the receipt or exercise of the Incentive Option.
Special rules apply to an employee who exercises an Incentive Option by
delivering Shares previously acquired pursuant to the exercise of an Incentive
Option.
For purposes of computing any alternative minimum tax liability, an employee
who exercises an Incentive Option generally would be required to increase his
or her "alternative minimum taxable income" by an amount equal to the excess of
the fair market value of a Share at the time the Option is exercised over the
exercise price and must compute his or her tax basis in the acquired Share as
if such Share had been acquired through the exercise of a Non-Qualified Option
(as described below). The amount of any minimum tax liability attributable to
the exercise of an Incentive Option generally will be allowed as a credit
offsetting regular tax liability in subsequent years.
If, subsequent to the exercise of an Incentive Option (whether paid for in
cash or in shares), the optionee holds the Shares received upon exercise for a
period that exceeds the longer of two years from the date of grant or one year
from the date of transfer pursuant to the exercise of such Option (the
"applicable holding period"), the difference (if any) between the amount
realized from the sale of such Shares and their tax basis to the holder will be
taxed as long-term capital gain or loss (provided that such shares were held by
the optionee as a capital asset at the time). If the holder is subject to the
alternative minimum tax in the year of disposition, his or her tax basis in the
Shares will be determined, for alternative minimum tax purposes, as described
in the preceding paragraph. If, however, an optionee does not hold the Shares
so acquired for the applicable holding period, thereby making a "disqualifying
disposition," the optionee would realize ordinary income in the year of the
disqualifying disposition on the excess of the fair market value of the Shares
at the date the Incentive Option was exercised over the exercise price and the
balance, if any, of income would be long-term capital gain (provided the
holding period for the Shares exceeded one year and the optionee held the
Shares as a capital asset at such time).
A deduction will not be allowed to the employer corporation for federal
income tax purposes with respect to the grant or exercise of an Incentive
Option or the disposition, after the applicable holding period, of Shares
acquired upon exercise of an Incentive Option. In the event of a disqualifying
disposition, a federal income tax deduction will be allowed to the employer
corporation in an amount equal to the ordinary income included by the optionee,
provided that such amount constitutes an ordinary and necessary business
expense
10
<PAGE>
to the employer corporation and is reasonable and the limitations of Sections
162(m) (as described above) and 280G of the Code (as described below) do not
apply.
Non-Qualified Options and Stock Appreciation Rights.
A Non-Qualified Option is one that is not intended to qualify as an incentive
stock option under Section 422(b) of the Code. An individual who receives a
Non-Qualified Option will not recognize any taxable income upon the grant of
such Non-Qualified Option. In general, upon exercise of a Non-Qualified Option
an individual will be treated as having received ordinary income in an amount
equal to the excess of (i) the fair market value of the Shares at the time of
exercise over (ii) the exercise price.
An individual who receives a Right will not recognize any taxable income upon
the grant of such Right. Generally, upon the receipt of cash or the transfer of
Shares pursuant to the exercise of a Right, an individual will recognize
ordinary income in an amount equal to the sum of the cash and the fair market
value of the Shares received. In certain cases, a Right may be deemed for
federal income tax purposes to have been exercised prior to actual exercise.
In view of Section 16(b) of the Exchange Act, the timing of income
recognition for any optionee who is an officer or director of the Company or a
beneficial owner of more than ten percent (10%) of any class of equity
securities of the Company may be deferred for a period (the "Deferral Period")
following the exercise of a Non-Qualified Option or Right. Absent a written
election (pursuant to Section 83(b) of the Code) filed with the Internal
Revenue Service within 30 days after the date of transfer of the Shares
pursuant to the exercise of the Option or Right to include in income, as of the
transfer date, the excess (on such date) of the fair market value of such
Shares over their exercise price, recognition of income by the individual will
be deferred until the expiration of the Deferral Period, if any.
The ordinary income recognized with respect to the transfer of Shares or
receipt of cash upon exercise of a Non-Qualified Option or a Right under the
Plan will be subject to both wage withholding and employment taxes. In addition
to the customary methods of satisfying the withholding tax liabilities that
arise upon the exercise of a Right for Shares or upon the exercise of a Non-
Qualified Option, an individual may satisfy the liability in whole or in part
by directing its employer corporation to withhold Shares from those that would
otherwise be issuable to the individual or by tendering other shares of Common
Stock of the Company owned by the individual, valued at their fair market value
as of the date that the tax withholding obligation arises. A deduction for
federal income tax purposes will be allowed to the employer corporation in an
amount equal to the ordinary income included by the individual, provided that
such amount constitutes an ordinary and necessary business expense and is
reasonable and the limitations of Section 162(m) and 280G of the Code do not
apply.
Change of Control
As described above, upon a "change of control" of the Company (as defined in
the Plan), all the then outstanding Options and Rights shall immediately become
exercisable. In general, if the total amount of payments to certain individuals
in the nature of compensation that are contingent upon a "change in control"
(as defined in Section 280G of the Code) equals or exceeds three times the
recipient's "base amount" (generally, such recipient's average annual
compensation for the five years preceding the change in control), then, subject
to certain exceptions, the payments may be treated as "parachute payments"
under the Code, in which case a portion of such payments would be nondeductible
to the employer corporation and the recipient would be subject to a 20% excise
tax on such portion of the payments.
11
<PAGE>
Section 162(m)
As discussed in the report of the Compensation and Stock Option Committee
appearing elsewhere in this Proxy Statement, Section 162(m) of the Code
generally limits (to $1,000,000 per covered executive) the deductibility for
Federal income tax purposes of annual compensation paid to a company's chief
executive officer and each of its other four most highly compensated executive
officers. The Plan is designed to permit Options and Rights granted hereunder
to qualify as "performance based" compensation under Section 162(m) of the
Code, thereby preserving the deductibility for federal income tax purposes of
compensation that may be attributable to the exercise of such Options and
Rights.
REGULATION
The Plan is neither qualified under the provisions of Section 401(a) of the
Code, nor subject to any of the provisions of ERISA.
STOCKHOLDER VOTE REQUIRED; BOARD RECOMMENDATION
The affirmative vote of a majority of the shares present and voting at the
Annual Meeting is required to approve the adoption of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN.
12
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation, as well as certain
other compensation, paid or accrued by the Company to the Chief Executive
Officer and each of the four most highly compensated executive officers of the
Company other than the Chief Executive Officer for their services in all
capacities for each of the years in the three-year period ended December 31,
1995:
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(1) COMPENSATION
----------------------- -------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL OPTIONS COMPENSATION
POSITION YEAR SALARY($) BONUS($) (# OF SHARES) (#)(2)
------------------ ---- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Guenter Rohrmann 1995 450,000 650,000 75,000 9,000
President and Chief 1994 420,000 500,000 27,000 9,000
Executive Officer 1993 400,000 315,000 45,000 14,150
Hendrik J. Hartong, Jr. 1995 260,000 325,000 50,000 9,000
Chairman of the Board 1994 260,000 260,000 18,000 9,000
1993 250,000 202,500 30,000 14,150
Robert J. O'Connell 1995 180,000 110,000 15,000 9,000
Vice President and General 1994 180,000 85,000 13,500 9,000
Manager-North America 1993 170,000 50,000 22,500 13,725
Dennis M. Dolan 1995 160,000 100,000 15,000 9,000
Vice President and Chief 1994 140,000 75,000 9,000 9,000
Financial Officer 1993 130,000 31,500 15,000 10,800
Daniel J. McCauley 1995 135,000 50,000 10,000 6,227
Vice President, General 1994 125,000 40,000 4,500 8,310
Counsel and Secretary 1993 120,000 13,500 7,500 7,956
</TABLE>
- --------
(1) Salary levels for each year are fixed at the beginning of the year. Bonuses
for each year are determined following the end of the year.
(2) Consists of contributions by the Company to its 401(k) Retirement Plan,
which covers substantially all U.S.-based employees who are not covered by a
collective bargaining agreement. The Company contributes (i) a sum equal to
3% of the salary of each eligible employee and (ii) a further sum, not
exceeding 3% of the employee's salary, equal to the amount, if any,
contributed by the employee, subject to certain limitations imposed by the
Internal Revenue Code. A participant's interest in the Company's
contributions to the plan vests at the rate of 20% for each of the first five
years of service and is fully vested thereafter.
13
<PAGE>
STOCK OPTION GRANTS IN 1995
The following table sets forth information with respect to the grant of stock
options during 1995 to the executive officers named in the Summary Compensation
Table:
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
OPTION
INDIVIDUAL GRANTS TERMS($)(3)
- ------------------------------------------------------------------------- -----------------
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE
GRANTED(1) EMPLOYEES PER SHARE EXPIRATION
NAME (# OF SHARES) IN 1995(%)(2) ($)(1) DATE(1) 5% 10%
---- ------------- ------------- --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Guenter Rohrmann........ 75,000 9.7 23.75 6/23/00 491,625 1,088,344
Hendrik J. Hartong, Jr.
....................... 50,000 6.4 23.75 6/23/00 327,750 725,563
Robert J. O'Connell..... 15,000 1.9 23.75 6/23/00 98,325 217,669
Dennis M. Dolan......... 15,000 1.9 23.75 6/23/00 98,325 217,669
Daniel J. McCauley...... 10,000 1.2 23.75 6/23/00 65,550 145,113
</TABLE>
- --------
(1) All options were granted at an exercise price equal to the market value of
the underlying shares on the date of grant and become exercisable as to one-
quarter of the underlying shares on each of the first through fourth
anniversaries of the grant date.
(2) Options with respect to a total of 775,500 shares were granted to employees
in 1995.
(3) Represents the potential appreciation of the options over their stated term
of five-years, based upon assumed compounded rates of appreciation of 5% per
year (equivalent to 27.6%) and 10% per year (equivalent to 61.1%). The
amounts set forth in these columns are not intended as forecasts of future
appreciation, which is dependent upon the actual increase, if any, in the
market price of the underlying shares, and there is no assurance that the
amounts of appreciation shown in the table actually will be realized.
AGGREGATED OPTION EXERCISES IN 1995 AND
OPTION VALUES AT DECEMBER 31, 1995
The following table sets forth, for each of the executive officers named in
the Summary Compensation Table, information with respect to the exercise of
stock options during 1995 and holdings of unexercised options at the end of the
year:
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT OPTIONS AT
NAME EXERCISE(#) REALIZED($) FISCAL YEAR END(#) FISCAL YEAR END($)(1)
---- ----------- ----------- ------------------------- -------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Guenter Rohrmann........ 101,250 1,875,150 29,250 117,750 170,168 308,003
Hendrik J. Hartong, Jr.
....................... -- -- 19,500 78,500 113,445 205,335
Robert J. O'Connell..... -- -- 14,625 36,375 85,084 154,001
Dennis M. Dolan......... 16,875 315,563 9,750 29,250 56,723 102,668
Daniel J. McCauley...... -- -- 21,750 17,125 294,649 51,334
</TABLE>
- --------
(1) Based on the excess of (i) the aggregate market value (closing price on the
NASDAQ National Market) of the underlying shares on December 29, 1995 over
(ii) the aggregate exercise price of the options.
14
<PAGE>
EMPLOYMENT CONTRACTS AND CHANGE-OF-CONTROL ARRANGEMENTS
The Company is party to an employment agreement with each of Messrs. Rohrmann
and Hartong that provides for an annual base salary and such annual bonus and
incentive compensation as the Board of Directors may determine. The base salary
is subject to review annually and currently is $480,000 in the case of Mr.
Rohrmann and $260,000 in the case of Mr. Hartong. By its terms, each agreement
will expire December 31, 1998, but the expiration date will be automatically
extended to December 31, 1999 unless the Board of Directors elects, within
sixty days after January 1, 1997, to terminate the agreement and to pay in a
lump sum the balance of the base salary due thereunder through December 31,
1998. Each agreement further provides that in event of a change of control (as
defined below), either party may terminate the executive's employment at any
time, and upon such termination, the Company would be required to pay in a lump
sum the balance of the base salary due through the unexpired term of the
agreement (but not less than two times the annual base salary). A "change of
control" is currently defined in each agreement as (i) the acquisition by any
person (which term includes any entity or group) of shares of the Company's
Common Stock representing more than 40% of the shares outstanding or (ii) the
sale or other disposition by the Company of all or substantially all of its
assets.
15
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total shareholder
return on the Company's Common Stock over the five years ended December 31,
1995 with the cumulative total return for the same period of (i) the Standard &
Poor's 500 Stock Index and (ii) a peer group comprised of four publicly-held
companies: Airborne Freight Corporation, Expediters International of
Washington, Inc., The Harper Group, Inc. and Intertrans Corporation. Dividend
reinvestment has been assumed and, with respect to companies in the peer group,
the returns of each company have been weighted to reflect its stock market
capitalization relative to that of the other companies in the group.
FIVE YEAR CUMULATIVE TOTAL RETURNS
VALUE OF $100 INVESTED ON DECEMBER 31, 1990
[CHART]
Value at December 31,
-----------------------------------------------
Description 1990 1991 1992 1993 1994 1995
- --------------------------- ------ ------ ------ ------ ------ ------
THE COMPANY 100 191.98 388.11 286.62 437.51 505.97
PEER GROUP 100 157.99 127.06 183.93 146.08 181.03
S & P 500 100 130.48 140.46 154.62 156.66 215.54
16
<PAGE>
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
The Compensation and Stock Option Committee reviews and approves the annual
compensation of the Company's executive officers, as well as the Company's
policies and practices with respect to compensation of other management
personnel.
Compensation of executive officers consists primarily of base salary and
discretionary bonus awards tied to performance and, where appropriate, the
grant of stock options. Although the percentage of total compensation borne by
each of these components is not fixed, it is the view of the Committee that, in
the case of the most senior officers, the discretionary bonus should represent
a substantial percentage of total compensation and, indeed, a greater
percentage than is the case with officers having more narrowly-defined
responsibilities.
In reviewing the compensation of the Company's executive officers (including
the grant of stock options), the Committee considers (i) the levels of
executive compensation paid by the Company's principal competitors in the air
freight and air freight forwarding industry (including those publicly-held
companies in the peer group shown in the Performance Graph on page 16 of this
Proxy Statement), to the extent reliable information with respect thereto is
available, (ii) the Company's reported earnings, earnings per share and profit
margin (operating income as a percentage of revenues), both in absolute terms
as well as in relation to budget forecasts, results for prior years and
competitors' results (where publicly available), (iii) the Company's return on
equity and stock price performance relative to those of its publicly-held
competitors and the market as a whole and (iv) the extent to which the Company
has achieved or exceeded its goals for the year. No specific weight is accorded
to any single factor and different factors may be accorded greater or lesser
weight in particular years or for particular officers. Salary levels for each
year are reviewed and fixed at the beginning of the year based primarily on the
Company's performance during the preceding year and the general trends in
executive salaries within the Company's industry. Cash bonuses are determined
and paid shortly following the end of the year based primarily on the Company's
performance, and that of its Common Stock, during the year, the extent to which
the Company's goals for the year were met or exceeded and the success of
management in addressing particular challenges that were presented during the
year.
In determining the cash bonuses to be paid for 1995 to the Company's senior
executive officers, including the Chief Executive Officer, the Committee noted
that the Company reported record revenues and earnings for the second year in a
row and that this strong performance was reflected in significant appreciation
in the market price of its Common Stock. In addition, the Committee observed
that management completed a number of strategic acquisitions during 1995 and
successfully integrated the various acquired operations into its logistics
service and information network. Accordingly, the cash bonus paid for 1995 to
each of the Company's senior executive officers, including its Chief Executive
Officer, reflected a significant increase over 1994.
Section 162(m) of the Code generally limits (to $1,000,000 per covered
executive) the deductibility of the annual compensation paid to a company's
chief executive officer and each of its other four most highly compensated
executive officers. That section and proposed regulations thereunder contain
certain exclusions from the deductibility limitation, including compensation
that its determined on the basis of performance goals as well as compensation
attributable to the exercise of stock options and rights, under plans that meet
certain criteria and are approved by shareholders. The 1996 Incentive Stock
Plan, which will be presented to shareholders for approval at the 1996 Annual
Meeting, has been designed to satisfy these criteria. Compensation attributable
to the exercise of outstanding options previously granted under the 1991
Incentive Stock Plan is excludable from the deductibility limitation pursuant
to certain transition rules. The Committee is continuing to review the
Company's compensation practices for covered executives with a view to
17
<PAGE>
preserving the deductibility of their compensation to the maximum extent
possible, taking all relevant factors into account, and will consider carefully
the possible modification of any compensation arrangements that might be
expected to result in any material loss of deductions.
The Compensation and
Stock Option Committee:
John M. Fowler, Chairman
Donald J. Keller
Andrew L. Lewis IV
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation and Stock Option Committee is an officer or
employee of the Company or any of its subsidiaries or participates in any of
the Company's management compensation plans or programs. No executive officer
of the Company is a director or member of the compensation committee of any
other entity of which any member of the Company's Compensation and Stock Option
Committee is an officer or employee.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During 1995, the Company paid (a) to Brynwood Management, a partnership of
which Messrs. Hartong and Niner are general partners, $15,000 for investment
banking and related services and (b) to Mr. Niner $60,000 for financial
advisory services.
OTHER MATTERS
As of the date of this Proxy Statement, the only business that the Board of
Directors intends to present or knows that others will present at the meeting
is that set forth above. If any other matter or matters are properly brought
before the meeting or any adjournment thereof, the persons named in the
accompanying form of proxy intend to vote on such matters in accordance with
their judgment.
The cost of soliciting proxies will be borne by the Company. Arrangements
will be made with brokerage firms and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of the
shares held of record by such persons, and the Company will reimburse them for
their reasonable out-of-pocket expenses. Officers and directors may also
solicit proxies.
The Board of Directors has selected the firm of Arthur Andersen llp as the
Company's independent public accountants for the current fiscal year. Arthur
Andersen llp has served as the Company's independent public accountants since
1968. Representatives of Arthur Andersen llp are expected to be present at the
meeting, and will have the opportunity to make a statement if they desire to do
so and to respond to appropriate questions.
The eight nominees for election as directors who receive a plurality of the
votes cast at the Annual Meeting for the election of directors will be elected.
In respect of any other matter, the affirmative vote of the holders of a
majority of the shares present at the meeting, in person or by proxy, and
entitled to vote in respect of that matter is necessary to approve the matter.
18
<PAGE>
As a matter of policy, the Company will accord confidentiality to the votes
of individual shareholders, whether submitted by proxy or ballot, except in
limited circumstances, including any contested election, or as may be necessary
to meet legal requirements. The Company will continue its long-standing
practice of retaining an independent tabulator to receive and tabulate the
proxies and ballots and independent inspectors of election to certify the
results.
Any shareholder desiring to present a proposal at the 1997 Annual Meeting of
shareholders and wishing to have that proposal included in the Proxy Statement
for that meeting must submit the same in writing to the Secretary of the
Company at 120 Tokeneke Road, Darien, Connecticut 06820 in time to be received
by January 20, 1997.
This proxy statement and the accompanying form of proxy are first being
mailed to shareholders on or about May 17, 1996.
By Order of the Board of Directors
Daniel J. McCauley, Secretary
Darien, Connecticut
May 17, 1996
----------------
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K FOR THE YEAR ENDED DECEMBER 31, 1995, TO EACH SHAREHOLDER WHO FORWARDS A
WRITTEN REQUEST TO THE SECRETARY, AIR EXPRESS INTERNATIONAL CORPORATION, 120
TOKENEKE ROAD, DARIEN, CONNECTICUT 06820.
19
<PAGE>
ANNEX A
1996 INCENTIVE STOCK PLAN
I. PURPOSES
Air Express International Corporation (the "Company") desires to afford
certain of its key employees and the key employees of any subsidiary
corporation or parent corporation of the Company now existing or hereafter
formed or acquired who are responsible for the continued growth of the Company
an opportunity to acquire a proprietary interest in the Company, and thus to
create in such key employees an increased interest in and a greater concern for
the welfare of the Company and its subsidiaries.
The Company, by means of this 1996 Incentive Stock Plan (the "Plan"), seeks
to retain the services of persons now holding key positions and to secure the
services of persons capable of filling such positions.
The stock options ("Options") and stock appreciation rights ("Rights")
offered pursuant to the Plan are a matter of separate inducement and are not in
lieu of any salary or other compensation for the services of any key employee.
The Options granted under the Plan are intended to be either incentive stock
options ("Incentive Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or options that do not meet the
requirements for Incentive Options ("Non-Qualified Options"), but the Company
makes no warranty as to the qualification of any Option as an Incentive Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
The total number of shares of common stock of the Company that may be
purchased or acquired pursuant to the exercise of Options or Rights granted
under the Plan shall not exceed, in the aggregate, five hundred thousand
(500,000) shares of the authorized common stock, $.01 par value per share, of
the Company (the "Shares"). The aggregate number of Shares with respect to
which Options or Rights may be granted to any one employee pursuant to the Plan
shall not exceed one hundred and twenty-five thousand (125,000). Shares that
are the subject of Rights and related Options shall be counted only once in
determining whether the maximum number of Shares that may be purchased or
awarded under the Plan has been exceeded.
Shares acquired under the Plan may be either authorized but unissued Shares,
Shares of issued stock held in the Company's treasury, or both, at the
discretion of the Company. If and to the extent that Options or Rights granted
under the Plan expire or terminate without having been exercised, the Shares
covered by such expired or terminated Options or Rights shall again become
available for award under the Plan.
Except as provided in Articles XIX and XXII, the Company may, from time to
time during the period beginning July 1, 1996 (the "Effective Date") and ending
June 30, 2006 (the "Termination Date"), grant to certain key employees of the
Company, or of any subsidiary corporation or parent corporation of the Company
now existing or hereafter formed or acquired, Incentive Options and/or Non-
Qualified Options and/or Rights under the terms hereinafter set forth.
A-1
<PAGE>
Provisions of the Plan that pertain to Options or Rights granted to an
employee shall apply to Options, Rights or a combination thereof.
As used in the Plan, the term "subsidiary corporation" and "parent
corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.
III. ADMINISTRATION OF THE PLAN
The board of directors of the Company (the "Board of Directors") shall
designate from among its members an option committee (the "Committee") to
administer the Plan. The Committee shall consist of no fewer than three members
of the Board of Directors, each of whom shall be (i) a "disinterested person"
within the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and (ii) an "outside director" within the meaning of
Section 162(m) of the Code. A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed
at any time either with or without cause by resolution adopted by the Board of
Directors, and any vacancy on the Committee at any time may be filled by
resolution adopted by the Board of Directors.
Subject to the express provisions of the Plan, the Committee shall have
authority, in its discretion, to determine the employees to whom Options or
Rights shall be granted, the time when such Options or Rights shall be granted,
the number of Shares which shall be subject to each Option or Right, the
purchase price or exercise price of each Option or Right, the period(s) during
which such Options or Rights shall be exercisable (whether in whole or in part)
and the other terms and provisions thereof (which need not be identical).
Subject to the express provisions of the Plan, the Committee also shall have
authority to construe the Plan and the Options and Rights granted thereunder,
to amend the Plan and the Options and Rights granted thereunder, to prescribe,
amend and rescind rules and regulations relating to the Plan, to determine the
terms and provisions of the Options (which need not be identical) and Rights
(which need not be identical) granted thereunder and to make all other
determinations necessary or advisable for administering the Plan. The Board of
Directors or the Committee, as the case may be, also shall have the authority
to require, in its discretion, as a condition of the granting of any such
Option or Right, that the employee agree (i) not to sell or otherwise dispose
of Shares acquired pursuant to the exercise of Options or Rights for a period
of six (6) months following the date of the grant of the exercised Rights or
Options and (ii) that in the event of termination of employment of such
employee, other than as a result of dismissal without cause, such employee will
not, for a period to be fixed at the time of the grant of the Option or Right,
enter into any other employment or participate directly or indirectly in any
other business or enterprise which is competitive with the business of the
Company or any subsidiary or parent corporation of the Company, or enter into
any employment in which such employee will be called upon to utilize special
knowledge obtained through employment with the Company or any subsidiary or
parent corporation thereof.
The determination of the Committee on matters referred to in this Article III
shall be conclusive.
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The Committee may employ such legal counsel, consultants and agents as it may
deem desirable for the administration of the Plan and may rely upon any opinion
or computation received from any such legal counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company. No member or former member of
the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any award of Options or Rights granted under
the Plan.
IV. ELIGIBILITY
Options and Rights may be granted only to salaried key employees of the
Company or of any subsidiary corporation or parent corporation of the Company,
except as hereinafter provided, and shall not be granted to any officer or
director who is not also a salaried key employee. Any person who shall have
retired from active employment by the Company or a subsidiary corporation or
parent corporation thereof, although such person shall have entered into a
consulting contract with the Company or a subsidiary corporation or parent
corporation thereof, shall not be eligible to receive an Option or a Right.
The Plan does not create a right in any employee to participate in the Plan
nor does it create a right in any employee to have any Options or Rights
granted to him or her.
V. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Non-Qualified Option granted
hereunder shall be such amount as the Committee, in its best judgment, shall
determine to be one hundred percent (100%) of the fair market value per Share
at the date the Option is granted.
The price for each Share purchasable under any Incentive Option granted
hereunder shall be such amount as the Committee, in its best judgment, shall
determine to be not less than one hundred percent (100%) of the fair market
value per Share at the date the Option is granted; provided, however, that in
the case of an Incentive Option granted to a person who, at the time such
Option is granted, owns shares of the Company or any subsidiary corporation or
parent corporation of the Company which possess more than ten percent (10%) of
the total combined voting power of all classes of shares of the Company or of
any subsidiary corporation or parent corporation of the Company, the purchase
price for each share shall be such amount as the Committee, in its best
judgment, shall determine to be not less than one hundred ten percent (110%) of
the fair market value per Share at the date the Option is granted. In
determining stock ownership of an employee for any purposes under the Plan, the
rules of Section 424(d) of the Code shall be applied, and the Committee may
rely on representations of fact made to it by the employee and believed by it
to be true.
If the Shares are listed on a national securities exchange in the United
States on any date on which the fair market value per Share is to be
determined, the fair market value per Share shall be deemed to be the average
of the high and low quotations at which such Shares are sold on such national
securities exchange on the date such Option is granted. If the Shares are
listed on a national securities exchange in the United States on such date but
the Shares are not traded on such date, or such national securities exchange is
not open for business on such date, the fair market value per Share shall be
determined as of the closest preceding date on which such exchange shall have
been open for business and the Shares were traded. If the Shares are listed on
more than one national securities exchange in the United States on the date on
which the fair market value per Share is to be determined, the Committee shall
determine which national securities exchange shall be used for the purpose of
determining the fair market value per Share.
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For purposes of this Plan, the determination by the Committee of the fair
market value of a Share shall be conclusive.
Upon the exercise of an Option granted hereunder, the Company shall cause the
purchased Shares to be issued only when it shall have received the full
purchase price for the Shares in cash or by certified check; provided, however,
that in lieu of cash, the holder of an Option may, if and to the extent the
terms of such Option so provide and to the extent permitted by applicable law,
exercise an Option (a) in whole or in part, by delivering to the Company shares
of common stock of the Company (in proper form for transfer and accompanied by
all requisite stock transfer tax stamps or cash in lieu thereof) owned by such
holder having a fair market value equal to the exercise price applicable to
that portion of the Option being exercised by the delivery of such Shares or
(b) in part, by delivering to the Company an executed promissory note on such
terms and conditions as the Committee shall determine, in its sole discretion,
at the time of grant; provided, however, that the principal amount of such note
shall not exceed ninety percent (90%) (or such lesser percentage as would be
permitted by applicable margin regulations) of the aggregate purchase price of
the Shares then being purchased pursuant to the exercise of such Option. The
fair market value of the stock so delivered shall be determined as of the date
immediately preceding the date on which the Option is exercised, or as may be
required in order to comply with or to conform to the requirements of any
applicable laws or regulations.
VI. USE OF PROCEEDS
The cash proceeds of the sale of Shares pursuant to the Plan are to be added
to the general funds of the Company and used for its general corporate
purposes.
VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Any Option shall be exercisable at such times, in such amounts and during
such period or periods as the Committee shall determine at the time of the
grant of such Option; provided, however, that an Incentive Option shall not be
exercisable after the expiration of ten (10) years from the date such Option is
granted; and provided further that, in the case of an Incentive Option granted
to a person who, at the time such Option is granted, owns stock of the Company
or any subsidiary or parent corporation of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any such subsidiary or parent corporation of the Company, such
Option shall not be exercisable after the expiration of five (5) years from the
date such Option is granted.
Except to the extent otherwise provided under the Code, to the extent that
the aggregate fair market value of stock for which Incentive Options are
exercisable for the first time by an employee during any calendar year (under
all stock option plans of the Company and of any parent corporation or
subsidiary corporation of the Company) exceeds one hundred thousand dollars
($100,000), such Options shall be treated as Non-Qualified Options. For
purposes of this limitation, (i) the fair market value of stock is determined
as of the time the Option is granted, (ii) the limitation will be applied by
taking into account Options in the order in which they were granted, and (iii)
Incentive Options granted before 1987 shall not be taken into account.
Subject to the provisions of Article XVIII, the Committee shall have the
right to accelerate, in whole or in part, from time to time, conditionally or
unconditionally, rights to exercise any Option granted hereunder.
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To the extent that an Option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part.
In no event shall an Option granted hereunder be exercised for a fraction of
a Share.
VIII. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the optionee as to all
or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company at the principal
business office of the Company, specifying the number of Shares to be purchased
and specifying a business day not more than (15) days from the date such notice
is given, for the payment of the purchase price against delivery of the Shares
being purchased. Subject to the terms of Articles XIV, XVI, and XVII, the
Company shall cause certificates for the Shares so purchased to be delivered to
the optionee at the principal business office of the Company, against payment
of the full purchase price, on the date specified in the notice of exercise.
IX. STOCK APPRECIATION RIGHTS
In the discretion of the Board of Directors, a Right may be granted (i)
alone, (ii) simultaneously with the grant of an Option (either Incentive or
Non-Qualified) and in conjunction therewith or in the alternative thereto or
(iii) subsequent to the grant of a Non-Qualified Option and in conjunction
therewith or in the alternative thereto.
The exercise price of a Right granted alone shall be determined by the
Committee, but shall not be less than one hundred percent (100%) of the fair
market value of one Share on the date of the grant of such Right. A Right
granted simultaneously with or subsequent to the grant of an Option and in
conjunction therewith or in the alternative thereto shall have the same
exercise price as the related Option, shall be transferable only upon the same
terms and conditions as the related Option, and shall be exercisable only to
the same extent as the related Option; provided, however, that a Right, by its
terms, shall be exercisable only when the fair market value of the Shares
subject to the Right and related Option exceeds the exercise price thereof.
Upon exercise of a Right granted simultaneously with or subsequent to an
Option and in the alternative thereto, the number of Shares for which the
related Option shall be exercisable shall be reduced by the number of Shares
for which the Right shall have been exercised. The number of Shares for which a
Right shall be exercisable shall be reduced upon any exercise of a related
Option by the number of Shares for which such Option shall have been exercised.
Any Right shall be exercisable upon such additional terms and conditions as
may from time to time be prescribed by the Committee.
A Right shall entitle the holder upon exercise thereof to receive from the
Company, upon a written request filed with the Secretary of the Company at its
principal offices (the "Request"), a number of Shares (with or without
restrictions as to substantial risk of forfeiture and transferability, as
determined by the Board of Directors in its sole discretion), an amount of
cash, or any combination of Shares and cash, as specified in the Request (but
subject to the approval of the Committee in its sole discretion, at any time up
to and including the time of payment, as to the making of any cash payment),
having an aggregate fair market value
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equal to the product of (i) the excess of the fair market value on the day of
such Request of one Share over the exercise price per Share specified in such
Right or its related Option, multiplied by (ii) the number of Shares for which
such Right shall be exercised.
Any election by a holder of a Right to receive cash in full or partial
settlement of such Right, and any exercise of such Right for cash, may be made
only by a Request filed with the Corporate Secretary of the Company during the
period beginning on the third business day following the date of release for
publication by the Company of quarterly or annual summary statements of
earnings and ending on the twelfth business day following such date. Within
thirty (30) days of the receipt by the Company of a Request to receive cash in
full or partial settlement of a Right or to exercise such Right for cash, the
Committee shall, in its sole discretion, either consent to or disapprove, in
whole or in part, such Request. A Request to receive cash in full or partial
settlement of a Right or to exercise a Right for cash may provide that, in the
event the Committee shall disapprove such Request, such Request shall be deemed
to be an exercise of such Right for Shares.
If the Committee disapproves in whole or in part any election by a holder to
receive cash in full or partial settlement of a Right or to exercise such Right
for cash, such disapproval shall not affect such holder's right to exercise
such Right at a later date, to the extent that such Right shall be otherwise
exercisable, or to elect the form of payment at a later date, provided that an
election to receive cash upon such later exercise shall be subject to the
approval of the Committee. Additionally, such disapproval shall not affect such
holder's right to exercise any related Option or Options granted to such holder
under the Plan.
A holder of a Right shall not be entitled to request or receive cash in full
or partial payment of such Right, if such Right or the related Option shall
have been exercised during the first six (6) months of its respective term;
provided, however, that such prohibition shall not apply if the holder of such
Right dies or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the expiration of such six-month period, or if such holder is
not a director or officer of the Company or a beneficial owner of the Company
who is described in Section 16(a) of the Exchange Act.
A Right shall be deemed exercised on the last day of its term, if not
otherwise exercised by the holder thereof, provided that the fair market value
of the Shares subject to the Right exceeds the exercise price thereof on such
date.
For all purposes of this Article IX, the fair market value of Shares shall be
determined in accordance with the principles set forth in Article V.
X. NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS
Neither an Option nor a Right granted hereunder shall be transferable,
whether by operation of law or otherwise, other than by will or the laws of
descent and distribution, and any Option or Right granted hereunder shall be
exercisable, during the lifetime of the holder, only by such holder.
XI. TERMINATION OF EMPLOYMENT
Upon termination of employment of any employee with the Company and any and
all subsidiary and parent corporations of the Company, an Option or Right
previously granted to the employee, unless otherwise
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specified by the Committee in the Option or Right, shall, to the extent not
theretofore exercised, terminate and become null and void, provided that:
(a) if the employee shall die while in the employ of such corporation or
during either the three (3)-month or one (1)-year period, whichever is
applicable, specified in clause (b) below and at a time when such employee
was entitled to exercise an Option or Right as herein provided, the legal
representative of such employee, or such person who acquired such Option or
Right by bequest or inheritance or by reason of the death of the employee,
may, not later than one (1) year from the date of death, exercise such
Option or Right, to the extent not theretofore exercised, in respect of any
or all of such number of Shares as specified by the Committee in such
Option or Right; and
(b) if the employment of any employee to whom such Option or Right shall
have been granted shall terminate by reason of the employee's retirement
(at such age or upon such conditions as shall be specified by the Board of
Directors), disability (as described in Section 22(e)(3) of the Code) or
dismissal by the employer other than for cause (as defined below), and
while such employee is entitled to exercise such Option or Right as herein
provided, such employee shall have the right to exercise such Option or
Right so granted, to the extent not theretofore exercised, in respect of
any or all of such number of Shares as specified by the Committee in such
Option or Right, at any time up to and including (i) three (3) months after
the date of such termination of employment in the case of termination by
reason of retirement or dismissal other than for cause and (ii) one (1)
year after the date of termination of employment in the case of termination
by reason of disability.
In no event, however, shall any person be entitled to exercise any Option or
Right after the expiration of the period of exercisability of such Option or
Right as specified therein.
If an employee voluntarily terminates his or her employment or is discharged
for cause, any Option or Right granted hereunder shall, unless otherwise
specified by the Committee in the Option or Right, forthwith terminate with
respect to any unexercised portion thereof.
If an Option or Right granted hereunder shall be exercised by the legal
representative of a deceased employee or former employee, or by a person who
acquired an Option or Right granted hereunder by bequest or inheritance or by
reason of the death of any employee or former employee, written notice of such
exercise shall be accompanied by a certified copy of letters testamentary or
equivalent proof of the right of such legal representative or other person to
exercise such Option or Right.
For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to an employee who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary or parent corporation of the Company, which agreement or plan
contains a definition of "for cause" or "cause" (or words of like import) for
purposes of termination of employment thereunder by the Company or such
subsidiary or parent corporation of the Company, "for cause" or "cause" as
defined in the most recent of such agreements or plans, or (ii) in all other
cases, as determined by the Committee, in its sole discretion, (a) the willful
commission by an employee of a criminal or other act that causes or probably
will cause substantial economic damage to the Company or a subsidiary or parent
corporation of the Company or substantial injury to the business reputation of
the Company or a subsidiary or parent corporation of the Company; (b) the
commission by an employee of an act of fraud in the performance of such
employee's duties on behalf of the Company or a subsidiary or parent
corporation of the Company; or (c) the continuing willful failure of an
employee to perform the duties of such employee to
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the Company or a subsidiary or parent corporation of the Company (other than
such failure resulting from the employee's incapacity due to physical or mental
illness) after written notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the employee by the chief executive officer or, in the
case of an employee who is a senior executive officer of the Company or a
subsidiary or parent corporation, the Board of Directors of the Company or such
subsidiary or parent corporation, as the case may be. For purposes of the Plan,
no act, or failure to act, on the employee's part shall be considered "willful"
unless done or omitted to be done by the employee not in good faith and without
reasonable belief that the employee's action or omission was in the best
interest of the Company or a subsidiary or parent corporation of the Company.
For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for
purposes of Section 422(a) of the Code. If an individual is on military, sick
leave or other bona fide leave of absence, such individual shall be considered
an "employee" for purposes of the exercise of an Option or Right and shall be
entitled to exercise such Option or Right during such leave if the period of
such leave does not exceed 90 days, or, if longer, so long as the individual's
right to reemployment with the corporation granting the option (or a related
corporation) is guaranteed either by statute or by contract. If the period of
leave exceeds ninety (90) days, the employment relationship shall be deemed to
have terminated on the ninety-first (91st) day of such leave, unless the
individual's right to reemployment is guaranteed by statute or contract.
A termination of employment shall not be deemed to occur by reason of (i) the
transfer of an employee from employment by the Company to employment by a
subsidiary corporation or a parent corporation of the Company (ii) the transfer
of an employee from employment by a subsidiary corporation or a parent
corporation of the Company to employment by the Company or by another
subsidiary corporation or parent corporation of the Company.
In the event of the complete liquidation or dissolution of a subsidiary
corporation, or in the event that such corporation ceases to be a subsidiary
corporation, any unexercised Options or Rights theretofore granted to any
person employed by such subsidiary corporation will be deemed canceled unless
such person is employed by the Company or by any parent corporation or another
subsidiary corporation after the occurrence of such event. In the event an
Option or Right is to be canceled pursuant to the provisions of the previous
sentence, notice of such cancellation will be given to each employee holding
unexercised Options, and such holder will have the right to exercise such
Options or Rights in full (without regard to any limitation set forth or
imposed pursuant to Article VII) during the 30 day period following notice of
such cancellation.
XII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares, or
other like change in capital structure of the Company, an adjustment shall be
made to each outstanding Option and Right such that each such Option and Right
shall thereafter be exercisable for such securities, cash and/or other property
as would have been received in respect of the Shares subject to such Option or
Right had such Option or Right been exercised in full immediately prior to such
change, and such an adjustment shall be made successively each time any such
change shall occur. The term "Shares" after any such change shall refer to the
securities, cash and/or property then receivable upon exercise of an Option
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or Right. In addition, in the event of any such change, the Committee shall
make any further adjustment as may be appropriate to the maximum number of
Shares which may be acquired under the Plan pursuant to the exercise of Options
and Rights, the maximum number of Shares which may be so acquired by any one
employee and the number of Shares and price per Share subject to outstanding
Options or Rights as shall be equitable to prevent dilution or enlargement of
rights under such Options or Rights, and the determination of the Committee as
to these matters shall be conclusive. Notwithstanding the foregoing, (i) each
such adjustment with respect to an Incentive Option and any related Right shall
comply with the rules of Section 424(a) of the Code, and (ii) in no event shall
any adjustment be made which would render any Incentive Option granted
hereunder other than an "incentive stock option" for purposes of Section 422 of
the Code.
In the event of a "change in control" of the Company, all then outstanding
Options and Rights shall immediately become exercisable. For purposes of the
Plan, a "change in control" of the Company occurs if:
(a) there occurs a change in control of the direction and administration
of the Company's business of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A (or any
successor rule or regulation) promulgated under the Exchange Act, whether
or not the Company is then subject to such reporting requirement; or
(b) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act but excluding any employee benefit plan of the Company) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power of
the Company's outstanding securities then entitled ordinarily (and apart
from rights accruing under special circumstances) to vote for the election
of directors; or
(c) during any period of two (2) consecutive years, the individuals who
at the beginning of such period constitute the Board of Directors or any
individuals who would be "Continuing Directors" (as hereinafter defined)
cease for any reason to constitute at least a majority thereof; or
(d) the Board of Directors shall approve a sale of all or substantially
all of the assets of the Company; or
(e) the Board of Directors shall approve any merger, consolidation, or
like business combination or reorganization of the Company, the
consummation of which would result in the occurrence of any event described
in clause (b) or (c) above;
provided, however, that none of the foregoing events shall constitute a Change
in Control if such event occurs as a result of an agreement or transaction
approved by the "Continuing Directors," either before or after the occurrence
of such event, and the Continuing Directors in approving such agreement or
transaction determine that it is not in the best interest of the Company for
such agreement or transaction to constitute a Change in Control for purposes of
the Plan.
For purposes of the Plan, "Continuing Directors" shall mean and include each
director of the Company in office on the Effective Date and any successor to
any such director and any additional director who (i) after the Effective Date
was nominated or selected by a majority of the Continuing Directors in office
at the time of his nomination or selection and (ii) at the time of his
nomination or selection is not an "affiliate" or "associate" (as defined in
Regulation 12B under the Exchange Act) of any person who is the beneficial
owner,
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directly or indirectly, of securities representing ten percent (10%) or more of
the combined voting power of the Company's outstanding securities then entitled
ordinarily to vote for the election of directors.
The Committee, in its discretion, may determine that, upon the occurrence of
a transaction described in the second preceding paragraph, each Option or Right
outstanding hereunder shall terminate within a specified number of days after
notice to the holder, and such holder shall receive, with respect to each Share
subject to such Option or Right, cash in an amount equal to the excess of the
fair market value of such Share immediately prior to the occurrence of such
transaction over the exercise price per Share of such Option or Right. The
provisions contained in the preceding sentence shall be inapplicable to an
Option or Right granted within six (6) months before the occurrence of a
transaction described above if the holder of such Option or Right is a director
or officer of the Company or a beneficial owner of the Company who is described
in Section 16(a) of the Exchange Act, unless such holder dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the
expiration of such six-month period.
XIII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on any subsidiary
corporation or parent corporation thereof to continue the employment of any
holder of Options or Rights; and it shall not impose any obligation on the part
of any holder of Options or Rights to remain in the employ of the Company or of
any subsidiary corporation or parent corporation thereof.
XIV. PURCHASE FOR INVESTMENT
Except as hereinafter provided, the Board of Directors may require an
employee, as a condition upon exercise of any Option or Right granted
hereunder, to execute and deliver to the Company (a) stock powers with respect
to Shares underlying a particular Option or Right and required to be held by a
custodian, and (b) a written statement, in form satisfactory to the Committee,
in which the employee represents and warrants that Shares are being acquired
for such person's own account for investment only and not with a view to the
resale or distribution thereof. The employee shall, at the request of the
Committee, be required to represent and warrant in writing that any subsequent
resale or distribution of Shares by the employee shall be made only pursuant to
either (i) a Registration Statement on an appropriate form under the Securities
Act of 1933, as amended (the "Securities Act"), which Registration Statement
has become effective and is current with regard to the Shares being sold, or
(ii) a specific exemption from the registration requirements of the Securities
Act, but in claiming such exemption the employee shall, prior to any offer of
sale or sale of such Shares, obtain a prior favorable written opinion of
counsel, in form and substance satisfactory to counsel for the Company, as to
the application of such exemption thereto. The foregoing restriction shall not
apply to (i) issuances by the Company so long as the Shares being issued are
registered under the Securities Act and a prospectus in respect thereof is
current or (ii) reofferings of Shares by affiliates of the Company (as defined
in Rule 405 or any successor rule or regulation promulgated under the
Securities Act) if the Shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
XV. ISSUE OF CERTIFICATES; LEGENDS, PAYMENT OF EXPENSES
Upon any exercise of an Option or Right which may be granted hereunder and,
in the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in
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the name of the person exercising the Option or Right and shall be delivered to
or upon the order of such person.
The Company may endorse such legend or legends upon the certificates for
Shares issued pursuant to the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares as, in its
discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares, or
(iii) permit the Company to determine the occurrence of a disqualifying
disposition, as described in Section 421(b) of the Code, of Shares transferred
upon exercise of an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer, except
fees and expenses which may be necessitated by the filing or amending of a
Registration Statement under the Securities Act, which fees and expenses shall
be borne by the recipient of the Shares unless such Registration Statement has
been filed by the Company for its own corporate purposes (and the Company so
states) in which event the recipient of the Shares shall bear only such fees
and expenses as are attributable solely to the inclusion of the Shares he or
she receives in the Registration Statement.
All Shares issued as provided herein shall be fully paid and nonassessable to
the extent permitted by law.
XVI. WITHHOLDING TAXES
The Company may require an employee exercising a Right or a Non-Qualified
Option granted hereunder, or disposing of Shares acquired pursuant to the
exercise of an Incentive Option in a disqualifying disposition (within the
meaning of Section 421(b) of the Code), to reimburse the corporation that
employs such employee for any taxes required by any government to be withheld
or otherwise deducted and paid by such corporation in respect of the issuance
or disposition of such Shares. In lieu thereof, the corporation that employs
such employee shall have the right to withhold the amount of such taxes from
any other sums due or to become due from such corporation to the employee upon
such terms and conditions as the Board of Directors of such corporation shall
prescribe. The corporation that employs such employee may, in its discretion,
hold the stock certificate to which such employee is entitled upon the exercise
of an Option as security for the payment of such withholding tax liability,
until cash sufficient to pay that liability has been accumulated. In addition,
at any time that the Company becomes subject to a withholding obligation under
applicable law with respect to the exercise of a Right or Non-Qualified Option
(the "Tax Date"), except as set forth below, a holder of a Right or Non-
Qualified Option may elect to satisfy, in whole or in part, the holder's
related personal tax liabilities (an "Election") by (i) directing the Company
to withhold from Shares issuable in the related exercise either a specified
number of Shares or Shares having a specified value (in each case not in excess
of the related personal tax liabilities), (ii) tendering Shares previously
issued pursuant to the exercise of an Option or Right or other shares of the
Company's common stock owned by the holder or (iii) combining any or all of the
foregoing options in any fashion. An Election shall be irrevocable. The
withheld Shares and other shares tendered in payment should be valued at their
fair market value (determined in accordance with the principles set forth in
Article V of the Plan) on the Tax Date. The Committee may disapprove of any
Election, suspend or terminate the right to make Elections or provide that the
right to make Elections shall not apply to particular Shares or exercises. If a
holder is a person subject to Section 16
A-11
<PAGE>
of the Exchange Act then (1) any Election by such holder must be made (i) at
least six months prior to the relevant Tax Date or (ii) on or prior to the
relevant Tax Date and during a period that begins on the third business day
following the date of release of publication of the Company's quarterly or
annual summary statements of sales and earnings and that ends on the twelfth
business day following such date and (2) the Election may not be made with
respect to an exercise, or the withholding obligation arising thereon, if the
relevant Right or Non-Qualified Option was granted six months or less prior to
the date of Election. The Committee may impose any other conditions or
restrictions on the right to make an Election as it shall deem appropriate.
XVII. LISTING OF SHARES AND RELATED MATTERS
The Committee may delay any award, issuance or delivery of Shares if it
determines that listing, registration or qualification of Shares or the consent
or approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the sale or purchase of Shares under the
Plan, until such listing, registration, qualification, consent or approval
shall have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Committee.
XVIII. AMENDMENT OF THE PLAN
The Board of Directors, with the concurrence of the Committee, may, from time
to time, amend the Plan, provided that, without the approval of the
shareholders of the Company, no amendment shall be made that will (i) increase
the total number of Shares reserved for Options under the Plan (other than an
increase resulting from an adjustment provided for in Article XII), (ii) reduce
the exercise price of any Incentive Option granted hereunder below the price
required by Article V, (iii) modify the provisions of the Plan relating to
eligibility, or (iv) materially increase the benefits accruing to participants
under the Plan. The Board of Directors shall be authorized to amend the Plan
and the Options granted thereunder to the extent necessary to permit the
Incentive Options granted thereunder to qualify as incentive stock options
within the meaning of Section 422 of the Code. The rights and obligations under
any Option or Right granted before amendment of the Plan or any unexercised
portion of such Option or Right shall not be adversely affected by amendment of
the Plan, Option or Right without the consent of the holder of such Option or
Right.
XIX. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated under Article XXII or by action of the Board of
Directors, shall terminate at the close of business on the Termination Date.
Options and Rights may not be granted while the Plan is suspended or after it
is terminated. Rights and obligations under any Option or Right granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the person to whom the
Option or Right was granted. The power of the Committee to construe and
administer any Options or Rights granted prior to the termination or suspension
of the Plan under Article III nevertheless shall continue after such
termination or during such suspension.
XX. GOVERNING LAW
The Plan, such Options and Rights as may be granted thereunder and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware from time to time obtaining.
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<PAGE>
XXI. PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not be deemed to
affect the validity of any other provision.
XXII. EFFECTIVE DATE
The Plan shall become effective at 9:00 A.M., New York City time, on the
Effective Date; provided, however, that if the Plan is not approved by a vote
of the shareholders of the Company at an annual meeting or any special meeting
or by unanimous written consent on or prior to December 31, 1996, it will be of
no effect and any Options or Rights previously granted under the Plan will be
void.
A-13
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
Proxy Solicited on Behalf of the Board of Directors
for
Annual Meeting of Shareholders
June 20, 1996
The undersigned, revoking any proxy heretofore given, hereby appoints
HENDRIK J. HARTONG, JR., GUENTER ROHRMANN and DANIEL J. MCCAULEY, or each or any
of them the attorney and proxy of the undersigned, with full power of
substitution, to vote on behalf of the undersigned all shares that the
undersigned, if personally present, would be entitled to vote at the Annual
Meeting of Shareholders of Air Express International Corporation to be held on
June 20, 1996, at the Hyatt Regency Greenwich, 1800 East Putnam Avenue, Old
Greenwich, Connecticut 06870, at 11:00 local time, and at any adjournment
thereof.
Unless a contrary direction is indicated, this Proxy will be voted FOR the
election as directors of all nominees listed in the accompanying Proxy Statement
and FOR approval of the adoption of the 1996 Incentive Stock Plan, as described
in the Proxy Statement; if specific instructions are indicated, this Proxy will
be voted in accordance therewith. The Board of Directors recommends a vote FOR
all of the listed nominees.
(continued, and to be signed on reverse side)
<PAGE>
PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE. [X]
1. Election of Directors. Nominees: John M. Fowler, Hendrik J.
Hartong, Jr., Donald J. Keller, Andrew
L. Lewis IV, Richard T. Niner, John
Radziwell and Guenter Rohrmann.
FOR all Nominees WITHHOLD (INSTRUCTION: To withhold authority to
listed (except as AUTHORITY vote for any individual nominee, write
marked to the that nominee's name in the space
contrary) provided below.)
[_] [_] Exceptions:_______________________________
2. Approval of the 1996 Incentive Stock Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES NAMED ABOVE AND FOR APPROVAL OF THE 1996 INCENTIVE STOCK PLAN.
In their discretion, the Proxies are authorized to transact such other business
as may properly come before the Meeting, or any adjournment thereof.
PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON, IF THE SHARES
ARE REGISTERED IN THE NAMES OF
TWO OR MORE PERSONS, EACH
SHOULD SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES,
GUARDIANS, ATTORNEYS-IN-FACT,
GENERAL PARTNERS AND OTHER
PERSONS ACTING IN A
REPRESENTATIVE CAPACITY SHOULD
ADD THEIR TITLE. WHEN THE
PROXY IS GIVEN BY A
CORPORATION, IT SHOULD BE
SIGNED BY AN AUTHORIZED
OFFICER.
DATED___________________, 1996
______________________________
______________________________
- -------------------------------------------------
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA PLEASE FILL IN, DATE, SIGN AND
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES MAIL THIS PROXY PROMPTLY
USING THE ENCLOSED POST
PAID RETURN ENVELOPE.
- -------------------------------------------------
