<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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] No fee required.
[_] 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:
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(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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
120 TOKENEKE ROAD
DARIEN, CONNECTICUT 06820
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1997
----------------
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 19, 1997, at 11:00 a.m.,
Eastern Daylight Time, for the following purposes:
(1) To elect eight (8) directors;
(2) To act on a proposal to approve the adoption of the Company's Executive
Incentive Award 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 the close of business on May 8, 1997, 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 16, 1997
----------------
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, CT 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 19, 1997, 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 8,
1997, 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
22,841,011 shares of Common Stock. 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. This proxy statement and the accompanying form of proxy are first
being sent or given to security holders on or about May 16, 1997.
A majority of the outstanding shares entitled to vote must be present in
person or represented by proxy at the meeting to constitute a quorum. The
shares represented by a proxy which is timely returned and marked "Abstain" as
to any matter as well as broker non-votes will be considered present at the
meeting and will be included in the calculation of those shares needed to
constitute a quorum. The shares represented by such proxies, although
considered present for proxy purposes, will not be considered a part of the
voting power present with respect to any proposal which is abstained from or
to which the broker non-vote relates.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 23, 1997 (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 own beneficially more
than 5% of the outstanding Common Stock of the Company, (ii) each executive
officer of the Company named in the Summary Compensation Table under
"Executive Compensation" in this Proxy Statement, (iii) each current director
(each of whom is also a nominee for election as a director at the meeting) 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>
SHARES OWNED PERCENTAGE OF
BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER (#) SHARES (%)(1)
---------------- ------------ -------------
<S> <C> <C>
Wellington Management Company (2).................... 2,239,960 9.8
75 State Street
Boston, Massachusetts 02109
FMR Corp. (3)........................................ 1,481,725 6.5
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHARES OWNED PERCENTAGE OF
BENEFICIALLY OUTSTANDING
BENEFICIAL OWNER (#) SHARES (%)(1)
---------------- ------------ -------------
<S> <C> <C>
Hendrik J. Hartong, Jr. (4)......................... 357,845 1.6
Guenter Rohrmann (5)................................ 307,140 1.3
Robert J. O'Connell (6)............................. 54,879 (11)
Dennis M. Dolan (7)................................. 70,340 (11)
Giorgio Laccona (8)................................. 29,185 (11)
John M. Fowler...................................... 30,000 (11)
Donald J. Keller.................................... 3,375 (11)
Andrew L. Lewis IV.................................. 9,905 (11)
Richard T. Niner (9)................................ 403,058 1.8
John Radziwill...................................... 272,335 1.2
Noel E. Vargas (10)................................. 334,589 1.5
All directors and executive officers as a group
(consisting of 14 persons).......................... 1,969,851 8.6
</TABLE>
- --------
(1) Shares issuable upon the exercise of stock options owned by that person
which can be exercised within 60 days of April 23, 1997, 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
Wellington Management Company ("Wellington"), at January 24, 1997,
Wellington shared voting and dispositive power with respect to an
aggregate of 2,239,960 shares owned by clients for whom it acts as an
investment advisor.
(3) Based on information set forth in a statement on Schedule 13G filed
jointly by FMR Corp. ("FMR"), Edward C. Johnson 3d ("Mr. Johnson"),
Abigail P. Johnson ("Ms. Johnson") and Fidelity Management & Research
Company ("Fidelity"), at February 14, 1997, FMR owned an aggregate of
1,481,725 shares. These shares include 1,357,200 shares beneficially
owned by Fidelity in its capacity as investment advisor to various
registered investment companies. Mr. Johnson, the Chairman of FMR, and
FMR, through its control of Fidelity, each has sole power to dispose of
the 1,357,200 shares owned by the investment companies. Neither Mr.
Johnson nor FMR has the sole power to vote or direct the voting of such
shares, since such shares are voted by Fidelity in accordance with
written guidelines established by the boards of trustees of the
investment companies. Fidelity Management Trust Company, a wholly-owned
subsidiary of FMR ("Fidelity Management"), is the beneficial owner of
124,525 shares as a result of its acting as investment manager of certain
institutional accounts. Mr. Johnson and FMR, through control of Fidelity
Management, each has sole voting and dispositive power over such 124,525
shares.
(4) Includes 68,500 shares issuable upon the exercise of stock options.
(5) Includes 102,750 shares issuable upon the exercise of stock options.
(6) Includes 40,125 shares issuable upon the exercise of stock options.
(7) Includes 29,250 shares issuable upon the exercise of stock options.
(8) Includes 24,375 shares issuable upon the exercise of stock options.
(9) Includes 3,374 shares held in custodial accounts for the benefit of Mr.
Niner's children.
(10) Includes 111,880 shares held as trustee of the Vargas Family Trust for
the benefit of Mr. Vargas and certain members of his family as to which
Mr. Vargas has sole voting and dispositive power.
(11) Less than 1%.
2
<PAGE>
ELECTION OF DIRECTORS
NOMINEES AND VOTE REQUIRED
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 is currently serving as a director of the Company and was elected to
that position at the last Annual Meeting of Shareholders.
A plurality of the votes of the shares present in person or represented by
proxy at the meeting shall be needed for the election of a director.
The following table sets forth information with respect to each nominee for
election as a director at the Annual Meeting:
<TABLE>
<CAPTION>
DIRECTOR
PRINCIPAL OCCUPATION AND OTHER CONTINUOUSLY
NAME AGE DIRECTORSHIPS SINCE
------------------------ --- ---------------------------------- ------------
<C> <C> <S> <C>
John M. Fowler.......... 48 Executive Vice President and Chief 1985
Financial Officer, MoneyGram
Payment Systems, Inc. since
October 1996. Independent business
consultant from July 1995 through
October 1996. Executive Vice
President of Travelers Group Inc.
(formerly Primerica Corporation),
New York, New York, 1991 through
June 1995. Director of
Transatlantic Holdings, Inc. and
MoneyGram Payment Systems, Inc.
Hendrik J. Hartong, Jr.. 58 Chairman of the Board of the 1985
Company since 1985 (Chief
Executive Officer from 1985 to
1989); General Partner since 1985
of Brynwood Management, since 1988
of Brynwood Management II and
since 1996 of Brynwood Management
III, entities that serve,
respectively, as the managing
general partner of Brynwood
Partners Limited Partnership,
Brynwood Partners II L.P. and
Brynwood Partners III, L.P.,
private investment partnerships.
Director of Hurco Companies, Inc.
Donald J. Keller........ 65 Chairman of the Board of Prestone 1990
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 IV...... 40 President, KRR Partners L.P., a 1986
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.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
PRINCIPAL OCCUPATION AND OTHER CONTINUOUSLY
NAME AGE DIRECTORSHIPS SINCE
--------------------- --- --------------------------------------- ------------
<C> <C> <S> <C>
Richard T. Niner..... 57 General Partner since 1985 of Brynwood 1985
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.,
Case Pomeroy & Company, Inc. and Hurco
Companies, Inc.
John Radziwill....... 49 President of Radix Organization Inc. 1995
since 1976; President of Radix Ventures
Inc. from 1979 until its acquisition by
the Company in June 1995.
Guenter Rohrmann..... 58 President and Chief Executive Officer 1985
of the Company since 1989 (President
and Chief Operating Officer from 1985
to 1989).
Noel E. Vargas....... 69 President of Luskcom Group Inc. since 1996
1975 (President and Chief Executive
Officer until its acquisition by the
Company in April 1996).
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF EACH OF
THE FOREGOING NOMINEES.
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, Niner and Vargas)
has the responsibility of meeting with the Company's independent public
accountants and internal auditors to review the plan, scope and results of the
audit of the Company's annual financial statements and the recommendations of
the independent accountants regarding the Company's internal accounting
systems and controls. The Audit Committee also recommends the appointment of
the independent accountants for the ensuing year.
The Compensation and Stock Option Committee (consisting of Messrs. Fowler,
Keller, Lewis and Radziwill) reviews and approves the compensation of
officers, including the Chief Executive Officer, and administers the Company's
stock option plans. If the Company's Executive Incentive Award Plan is
approved at the meeting, the Compensation and Stock Option Committee will be
responsible for administering that plan.
The Nominating Committee (consisting of Messrs. Fowler, Hartong, Niner and
Rohrmann) screens and selects candidates to stand for election as directors of
the Company. The Nominating Committee will consider responsible
recommendations by shareholders of candidates to be nominated as directors of
the Company but does not intend to solicit such recommendations. All such
recommendations must be in writing to the Nominating Committee addressed to
the Secretary of the Company. By accepting a shareholder recommendation for
consideration, the Nominating Committee does not undertake to adopt or take
any other action concerning such recommendation or to give the shareholder its
reasons for any action or inaction.
4
<PAGE>
During the year ended December 31, 1996, there were six meetings of the
Board of Directors, two meetings of the Executive Committee, two meetings of
the Audit Committee, one meeting of the Compensation and Stock Option
Committee, and one meeting of the Nominating Committee. Each director attended
more than 75% of the aggregate of the meetings of the Board of Directors and
of the committees thereof on which he served.
DIRECTOR COMPENSATION
During 1996, each director who is not an officer of the Company received an
annual fee of $16,000 for serving as a director ($8,000 in the case of Mr.
Vargas, who was elected a director at the Annual Meeting of Shareholders in
1996) and $1,000 for each day of attendance at meetings of the Board of
Directors or a committee thereof.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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
beneficially 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 and to furnish copies of such reports to the Company.
Based solely upon a review of the copies of the forms furnished to the Company
and inquiry of the Company's directors and executive officers, the Company
believes that all of its directors and executive officers, and all persons
beneficially owning more than ten percent of the Company's Common Stock,
complied in a timely manner with all filing requirements under Section 16(a)
applicable to them with respect to transactions during the year ended December
31, 1996.
APPROVAL OF THE EXECUTIVE INCENTIVE AWARD PLAN
INTRODUCTION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), limits the deductibility of compensation paid to the
chief executive officer and certain other executive officers of public
companies ("Covered Employees"). Section 162(m) provides that, unless certain
conditions are met, compensation to Covered Employees in excess of $1 million
in any year will not be deductible by the corporation for federal income tax
purposes. However, if compensation in excess of $1 million paid to Covered
Employees is "performance-based compensation" under Section 162(m), it will be
deductible by the corporation. In light of the adoption of Section 162(m), the
Compensation and Stock Option Committee (the "Compensation Committee")
initiated an examination of the Company's executive compensation policies to
develop a strategy that would likely assure deductibility to the Company of
compensation payable to its Covered Employees.
As a result of its review, the Compensation Committee recommended, and the
Board of Directors of the Company adopted, the Executive Incentive Award Plan
(the "Incentive Plan"). The Incentive Plan was adopted by the Board of
Directors subject to approval by the Company's shareholders at the 1997 annual
meeting. If the Incentive Plan is not approved at the 1997 annual meeting,
then the Incentive Plan will be void.
SUMMARY OF THE INCENTIVE PLAN
The following summary of the terms of the Incentive Plan is qualified in its
entirety by reference to the full text of the Incentive Plan, a copy of which
is attached to this Proxy Statement as Exhibit A.
Awards under the Incentive Plan may be made by the Compensation Committee to
persons who are Covered Employees or whom the Compensation Committee
determines may be Covered Employees. Awards under the Incentive Plan which
become payable will be paid in cash. Based on information currently available
to the Company, the executive officers of the Company who would be eligible to
receive payments under the Incentive Plan are the officers named in the
Summary Compensation Table.
5
<PAGE>
The maximum aggregate awards under the Incentive Plan for any Plan Year
would be equal to 4% of the Company's consolidated pre-tax income before
accrual for any award under the Incentive Plan ("Adjusted Pre-Tax Income"). To
the extent that amounts paid under the Incentive Plan in respect of any Plan
Year is less than 4% of Adjusted Pre-Tax Income, an amount equal to the lesser
of (a) 1% of Adjusted Pre-Tax Income for such Plan Year or (b) the excess of
4% of Adjusted Pre-Tax Income over awards actually paid in respect of such
Plan Year would be added to the amount of money which could be paid under the
Incentive Plan with respect to the next Plan Year. No one individual may be
granted an award under the Incentive Plan for any Plan Year in excess of 3% of
the Adjusted Pre-Tax Income for such Plan Year. Participants in the Incentive
Plan may be afforded the right to elect to defer receipt of all or a portion
of an award under the Incentive Plan.
Participants in the Incentive Plan may also receive bonus payments outside
the Incentive Plan at the discretion of the Compensation Committee. Based on
the provisions of Section 162(m) of the Internal Revenue Code, such bonuses
may not be deductible to the Company.
Within the time period prescribed by Section 162(m) of the Internal Revenue
Code, the Compensation Committee will establish the performance goals for each
fiscal year (or for the nine months ending December 31, 1997 in the case of
1997). The performance goals will be based upon one or more of the following
performance measures: return on equity, assets, capital or investment; pre-tax
or after-tax profit levels expressed in absolute dollars or earnings per share
of the Company; cash flow or similar measures; or the stock price performance
of the Company's Common Stock. The performance goals established by the
Compensation Committee will include a threshold level of performance below
which no award will be payable and a maximum award opportunity for each
participant.
Even after performance goals are fixed for a Plan Year, the Compensation
Committee may adjust the method of calculating attainment of the performance
goals to take into account (i) extraordinary or non-recurring items, (ii)
changes in tax laws, (iii) changes in generally accepted accounting principles
or changes in accounting policies, (iv) charges related to restructured or
discontinued operations, (v) restatements of prior period financial results
and (vi) any other unusual, non-recurring gain or loss that is separately
identified and quantified in the Company's financial statements. The Committee
may, in its discretion, reduce the performance results upon which awards are
based under the Incentive Plan to offset any unintended results arising from
events not anticipated when the performance goals were established, provided
that such adjustment is permitted by Section 162(m) of the Internal Revenue
Code.
The Incentive Plan is administered by the Compensation Committee, which will
certify in writing as to the achievement of performance criteria prior to
payment of any awards. Subject to the provisions of the Incentive Plan, the
Compensation Committee is authorized to administer and interpret the Incentive
Plan and to exercise all powers and authorities either specifically granted to
it under, or necessary or advisable in the administration of, the Incentive
Plan. The determinations of the Compensation Committee are final and
conclusive; provided, however, that no action may be taken which would prevent
awards that are intended to provide "performance-based compensation," within
the meaning of Section 162(m) of the Internal Revenue Code, from doing so. The
Compensation Committee may, in its discretion, reduce in whole or in part the
amount of any award that would otherwise be payable to a participant under the
Incentive Plan.
Upon the occurrence of a change in control (as defined in the Incentive
Plan), all outstanding awards under the Incentive Plan will be deemed earned
at the maximum performance goal level, and the Company will make a payment of
such awards in cash within 10 days after the effective date of the change in
control. Any such payment would not consititute "performance-based
compensation" within the meaning of Section 162(m) of the Internal Revenue
Code.
6
<PAGE>
The Board of Directors of the Company may amend, modify, suspend or
terminate the Incentive Plan for any purpose except that no amendment or
alteration will be effective prior to approval by the Company's shareholders
to the extent such approval is required pursuant to Section 162(m) of the
Internal Revenue Code or otherwise required by law. Further, no amendment to
the Incentive Plan shall be effective that would increase the maximum amount
that can be paid to a participant under the Incentive Plan for any Plan Year,
change the performance criteria set forth in the Incentive Plan or modify the
eligibility requirements for participants, unless such amendments are first
approved by the Company's shareholders.
The amounts that may be paid pursuant to the Incentive Plan for 1997 are not
currently determinable, nor are such amounts determinable for 1996, assuming
the Incentive Plan had been in effect during 1996.
SHAREHOLDER VOTE REQUIRED; BOARD RECOMMENDATION
Approval of the adoption of the Incentive Plan requires the affirmative vote
of a majority of the shares represented at the meeting in person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"APPROVAL OF THE ADOPTION OF THE
INCENTIVE PLAN
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 other most highly compensated executive officers
of the Company as of December 31, 1996, for their services in all capacities
for each of the years in the three-year period ended December 31, 1996:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION (1) OPTIONS ALL OTHER
NAME AND PRINCIPAL ----------------------- (# OF COMPENSATION
POSITION YEAR SALARY($) BONUS($) SHARES) ($)(2)
------------------ ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Guenter Rohrmann............. 1996 480,000 800,000 0 40,497
President and Chief Execu-
tive 1995 450,000 650,000 75,000 9,000
Officer 1994 420,000 500,000 27,000 9,000
Hendrik J. Hartong, Jr....... 1996 260,000 325,000 0 11,099
Chairman of the Board 1995 260,000 325,000 50,000 9,000
1994 260,000 260,000 18,000 9,000
Robert J. O'Connell.......... 1996 190,000 150,000 0 14,740
Senior Vice President 1995 180,000 110,000 15,000 9,000
1994 180,000 85,000 13,500 9,000
Dennis M. Dolan.............. 1996 175,000 150,000 0 13,088
Vice President and Chief 1995 160,000 100,000 15,000 9,000
Financial Officer 1994 140,000 75,000 9,000 9,000
Giorgio Laccona.............. 1996 155,000 150,000 0 12,488
Vice President, General Man-
ager 1995 140,000 75,000 15,000 9,000
North America 1994 120,000 48,000 7,500 9,000
</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.
7
<PAGE>
(2) Consists of contributions by the Company in the amount of $9,000 for each
year for each named executive 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. In addition, the Company makes contributions under its Deferred
Compensation Plan equal to 3% of the amounts deferred thereunder by the
named executive officers. Contributions under the Deferred Compensation
Plan for 1996 for Mr. Rohrmann, Mr. Hartong, Mr. O'Connell, Mr. Dolan and
Mr. Laccona were $29,400, $0, $4,500, $3,750 and $3,150, respectively. A
participant's interest in the Company's contributions to the 401(k)
Retirement Plan and the Deferred Compensation Plan vests at the rate of
20% for each of the first five years of service and is fully vested
thereafter. The balance in 1996 represents the dollar value of premiums
paid by the Company with respect to life insurance for the benefit of each
of the named executive officers.
STOCK OPTION GRANTS IN 1996
No options were granted during 1996 to any of the executive officers named
in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN 1996 AND
OPTION VALUE AT DECEMBER 31, 1996
The following table sets forth, for each of the executive officers named in
the Summary Compensation Table, information with respect to the exercise of
stock options during 1996 and holdings of unexercised options at the end of
the year:
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES VALUE FISCAL YEAR END (#) FISCAL YEAR END ($)(1)
ACQUIRED ON REALIZED ------------------------- -------------------------
EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Guenter Rohrmann........ 0 0 66,000 81,000 886,147 895,523
Hendrik J. Hartong, Jr.. 0 0 44,000 54,000 590,765 597,015
Robert J. O'Connell..... 0 0 27,375 23,625 395,262 304,323
Dennis M. Dolan......... 0 0 19,500 19,500 274,132 234,758
Giorgio Laccona......... 0 0 15,938 17,812 273,947 224,953
</TABLE>
- --------
(1) Based on the excess of (i) the aggregate market value (closing price on
The Nasdaq Stock Market, Inc.) of the underlying shares on December 31,
1996, over (ii) the aggregate exercise price of the options.
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 $525,000 in the
case of Mr. Rohrmann and $260,000 in the case of Mr. Hartong. By its terms,
each agreement will expire December 31, 1999. Each agreement 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 for the
unexpired term of the agreement (but not less than two times the annual base
salary). A "change of control" is defined in each agreement as (i) the
acquisition by any person
8
<PAGE>
(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.
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,
1996, 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 Fritz Companies, Inc. In prior
years, the Company included Intertrans Corporation, which was acquired by
Fritz Companies, Inc. in 1995, in the peer group. The Company has substituted
Fritz Companies, Inc. for Intertrans Corporation, since stock prices for
Intertrans Corporation are no longer available. 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, 1991
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
-----------------------------------------
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Air Express International
Corporation.......................... 100.00 202.09 149.23 227.82 263.59 373.40
Standard & Poor's 500 Stock Index.... 100.00 107.62 118.46 120.03 165.13 203.05
Peer Group........................... 100.00 80.12 107.30 106.15 152.67 110.64
</TABLE>
9
<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 above), 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 goal 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 1996 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 third year in a
row and that this strong performance was reflected in continued appreciation
in the market price of its Common Stock. In addition, the Committee observed
that management continued to integrate successfully various operations that
were acquired into the Company's logistics service and information network.
Section 162(m) of the Internal Revenue Code generally limits (to $1,000,000
per covered executive) the deductibility of the annual compensation paid to a
public 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 is 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
Company's 1996 Incentive Stock Plan has been designed to satisfy these
criteria. Compensation attributable to the exercise of outstanding options
previously granted under the Company's 1991 Incentive Stock Plan is also
excludable from the deductibility limitation pursuant to certain transition
rules under the Internal Revenue Code. The Committee is continuing to review
the Company's compensation practices for covered executives with a view to
preserving the deductibility of their compensation to the maximum extent
practicable, 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
10
<PAGE>
material loss of deductions. The Company's adoption, subject to approval of
the Company's shareholders at the meeting, of the Executive Incentive Award
Plan is consistent with that objective.
THE COMPENSATION AND
STOCK OPTION COMMITTEE
John M. Fowler, Chairman
Donald J. Keller
Andrew L. Lewis IV
John Radziwill
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.
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 but will not be specifically compensated for making such
solicitations. The Company may retain Georgeson & Company, Inc. to assist in
soliciting proxies and to send proxy materials to brokerage houses and other
custodians, nominees and fiduciaries for transmittal to their principals, at
an estimated cost of $6,500 plus out-of-pocket expenses.
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.
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.
11
<PAGE>
Any shareholder desiring to present a proposal at the 1998 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 16, 1998.
By Order of the Board of Directors
Daniel J. McCauley, Secretary
Darien, Connecticut
May 16, 1997
----------------
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, FOR THE
YEAR ENDED DECEMBER 31, 1996, TO EACH SHAREHOLDER WHO FORWARDS A WRITTEN
REQUEST TO THE SECRETARY, AIR EXPRESS INTERNATIONAL CORPORATION, 120 TOKENEKE
ROAD, DARIEN, CONNECTICUT 06820. SUCH WRITTEN REQUEST MUST INCLUDE A GOOD
FAITH REPRESENTATION THAT, AS OF MAY 8, 1997 (THE RECORD DATE), THE PERSON
MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF SECURITIES ENTITLED TO VOTE AT
THE 1997 ANNUAL MEETING.
COPIES OF SUCH FORM 10-K FURNISHED WITHOUT CHARGE WILL NOT INCLUDE ALL OF
THE EXHIBITS THERETO, IF ANY, BUT WILL INCLUDE A LIST DESCRIBING ALL OF THE
EXHIBITS NOT INCLUDED, COPIES OF WHICH WILL BE AVAILABLE AT A COST OF $1.00
PER PAGE.
12
<PAGE>
EXHIBIT A
AIR EXPRESS INTERNATIONAL CORPORATION
EXECUTIVE INCENTIVE AWARD PLAN
ARTICLE I.
PURPOSE AND GENERAL DESCRIPTION
The purpose of the Executive Incentive Award Plan (this "Plan") of Air
Express International Corporation (the "Company") is to align more closely the
interest of the Company's management and shareholders. Specifically, this
Plan's objectives are to:
. Focus management's attention on accomplishing results that can be
expected to lead to increases in shareholder value;
. Support the financial objectives of the Company; and
. Offer a results-based compensation program that is competitive and
delivers superior rewards for exceptional results.
Accordingly, the Company may award to Covered Employees of the Company,
annual incentive compensation on the terms and conditions established herein.
ARTICLE II.
DEFINITIONS
As used in this Plan, the following terms shall have the meanings set forth
below:
"Annual Incentive Award" or "Award" means the compensation payable in cash
granted under this Plan to a Participant by the Committee pursuant to such
terms, conditions, restrictions and limitations established by the Committee
and this Plan.
"Base Salary" shall mean the actual base earnings of a Participant for a
Plan Year, as approved by the Committee, exclusive of any Awards under this
Plan or any other prior or present commitment, including contractual
arrangements, any salary advance, any allowance or reimbursement,
remuneration, and the value of any basic or supplemental employee benefits or
perquisites.
"Board" shall mean the Board of Directors of the Company.
"Change in Control," for all purposes of this Plan, shall be deemed to have
occurred if, with or without the approval of the Board, any of the following
events shall occur:
(a) more than forty percent (40%) of the Company's outstanding common stock
(or the equivalent in voting power of any class or classes of outstanding
securities of the Company ordinarily entitled to vote in the election of
directors) shall be beneficially held or acquired by any corporation or person
or group except with respect to any Participant who is included in any such
person; or
(b) there is a sale or other disposition of all or substantially all of the
assets or business of the Company's and its subsidiaries.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commission" shall mean the Securities and Exchange Commission.
"Committee" means the Compensation and Stock Option Committee of the Board,
or such other committee designated by the Board to administer this Plan,
provided that the Committee shall consist of two or more persons, each of whom
is an "outside director" within the meaning of Section 162(m).
"Company" means Air Express International Corporation, a Delaware
corporation, and its successors and assigns together with any corporation of
which at least fifty percent (50%) of the total combined voting power of all
classes of stock is owned by the Company either directly or through one or
more other corporations.
"Covered Employees" means those Persons who are "covered employees" within
the meaning of Section 162(m) with respect to this Plan for an applicable Plan
Year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Participant" means any Covered Employee and any person the Committee
determines may be a Covered Employee for an applicable Plan Year.
"Performance Goals" shall be defined as the objective performance criterion
or criteria established by the Committee, pursuant to Article V hereof, for
the purpose of determining Awards under this Plan.
"Plan" shall mean the Executive Incentive Award Plan of the Company.
"Plan Year" means the consecutive twelve (12) month period that constitutes
the Company's fiscal year except with respect to the calendar year 1997, in
which case the Plan Year shall begin on April 1, 1997 and end on December 31,
1997 and all calculations and determinations with respect to such Plan Year
including without limitation the attainment of Performance Goals hereunder
shall be made on a pro rata or other basis as determined by the Committee to
satisfy the requirements of Section 162(m).
"Section 162(m)" shall mean Section 162(m) of the Code and the regulations
promulgated thereunder.
"Standard Maximum Annual Incentive Award Amount" shall have the meaning set
forth in Section 6.6 hereof.
ARTICLE III.
ADMINISTRATION
3.1 Authority of Committee. This Plan shall be administered by the
Committee. Subject to the provisions of this Plan, the Committee shall have
the authority in its sole discretion to administer and interpret this Plan and
to exercise all the powers and authorities either specifically granted to it
under this Plan or necessary or advisable in the administration of this Plan,
including, without limitation, to establish the target and maximum Awards for
each Participant; to determine the performance measures and their relative
weighting; to determine whether, to what extent and under what circumstances
any Award may be settled, cancelled, forfeited, exchanged or surrendered; to
waive or modify any condition applicable to an Award subject to compliance
with Section 162(m); to make adjustments in the performance goals of an Award
(i) in recognition of unusual or nonrecurring
A-2
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events affecting the Company or the financial statements of the Company,
subject to compliance with Section 162(m), if applicable, or (ii) in response
to changes in applicable laws, regulations, or accounting principles; to
establish, amend or rescind any administrative policies; and to make all other
determinations necessary or advisable for the administration of this Plan.
3.2 Corrections of Plan. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in this Plan or in any Award in the
manner and to the extent the Committee shall deem desirable to carry it into
effect.
3.3 Committee Determinations Conclusive. The determinations of the Committee
in the administration of this Plan, as described herein, shall be final and
conclusive, provided, however, that no action shall be taken which will
prevent Awards granted under this Plan that are intended to provide
"performance-based compensation," within the meaning of Section 162(m), from
doing so.
ARTICLE IV.
ELIGIBILITY
4.1 Persons Eligible. All Participants shall be eligible to participate in
this Plan. However, nothing in this Plan shall be interpreted or construed as
providing or guaranteeing the payment of any Award hereunder to any person
with respect to a particular Plan Year. Nothing herein shall be interpreted or
construed as preventing payments by the Company to Participants outside this
Plan.
4.2 Withdrawal of Approval of Participation. The Committee may withdraw its
approval for participation in this Plan for a Participant at any time. In the
event of such withdrawal, such Participant shall cease to be a participant as
of the date designated by the Committee and the employee shall be notified of
such withdrawal as soon as practicable following such action. Further, such
Participant shall cease to have any right to an Award for the Plan Year in
which such withdrawal is effective, provided, however, that the Committee may
in its sole discretion, authorize a prorated award based on the number of full
months or participation prior to the effective date of such withdrawal and the
Company's performance during such period.
ARTICLE V.
PERFORMANCE GOALS AND MEASURES
5.1 Compliance with Code Section 162(m). Performance Goals that are intended
to comply with Section 162(m) shall be established by the Committee within the
time period prescribed in Section 162(m) for a Plan Year relating to a
specific Award.
5.2 Performance Goals for a Participant. The Performance Goals may be
identical for all time periods. The Performance Goals may be identical for all
Participants or, at the sole discretion of the Committee, may be different to
reflect more appropriate measures of individual performance.
5.3 Performance Goal Criteria. The criterion or criteria used in
establishing Performance Goals may, at the sole discretion of the Committee,
include one or any combination of the following: (i) return on equity, assets,
capital or investment; (ii) pre-tax or after-tax profit levels expressed in
absolute dollars or earnings per share of the Company; (iii) cash flow or
similar measures; or (iv) price per share of the Company's equity securities.
The
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Performance Goals established by the Committee shall include a threshold level
of performance below which no Award will be payable and a maximum Award
opportunity for each Participant. Performance Goals also may be based upon
attaining specified levels of Company performance based upon one or more of
the criteria described above relative to prior periods or the performance of
other companies.
5.4 Determination of Attainment of Performance Goals. Attainment of the
Performance Goals shall be determined by the Committee in accordance with
generally accepted accounting principles where applicable and certified in
writing by the Committee, and any such determination shall be made in
accordance with Section 162(m).
5.5 Adjustments to Measure of Attainment of Goal. The Committee shall be
authorized to make adjustments in the method of calculating attainment of
Performance Goals in recognition of: (i) extraordinary or non-recurring items,
(ii) changes in tax laws, (iii) changes in generally accepted accounting
principles or changes in accounting policies, (iv) charges related to
restructured or discontinued operations, (v) restatement of prior period
financial results and (vi) any other unusual, non-recurring gain or loss that
is separately identified and quantified in the Company's financial statements.
Notwithstanding the foregoing, the Committee may, at its sole discretion,
reduce the performance results upon which Awards are based under this Plan to
offset any unintended result(s) arising from events not anticipated when the
Performance Goals were established, provided that such adjustment is permitted
by Section 162(m).
ARTICLE VI.
AWARD PAYMENTS / ADJUSTMENTS / MAXIMUM AMOUNTS
6.1 Method of Payment. Awards under this Plan shall be paid in cash.
6.2 Review and Certification of Performance. The Committee shall review the
prior year's performance in relation to the Performance Goals and determine
the level of achievement of the Performance Goals.
6.3 Time of Payment. Payment of Awards to Participants under this Plan shall
occur only after the Committee has certified in writing as provided herein
that the Performance Goals have been achieved for the relevant Plan Year.
6.4 Downward Adjustments. Notwithstanding the attainment of Performance
Goals of the Company as a whole, Awards for individual Participants under this
Plan may be denied or adjusted downward by the Committee, in its sole
judgment, based on its assessment of the Participant's performance.
6.5 Maximum Award Amount for Individual. The maximum Annual Incentive Award
that may be granted to a Participant under this Plan for any Plan Year shall
be seventy-five percent (75%) of the Standard Maximum Annual Incentive Award
as determined pursuant to Section 6.6 below
6.6 Maximum Award Amount for All Participants. The maximum aggregate Annual
Incentive Awards that may be granted to all Participants for any Plan Year
shall not exceed four percent (4%) of the Company's consolidated pre-tax
income before accrual for any Award hereunder (the "Standard Maximum Annual
Incentive Award Amount"). Notwithstanding the previous sentence, if in any
Plan Year the Standard Maximum Annual Incentive Award Amount is not awarded,
then the Standard Maximum Annual Incentive Award Amount for the next Plan Year
shall be increased by the lesser of (1) an amount equal to twenty five percent
(25%) of the
A-4
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Standard Maximum Annual Incentive Award Amount for the current Plan Year, or
(2) an amount equal to the difference between (x) the Standard Maximum Annual
Incentive Award Amount for the current Plan Year, minus (y) an amount equal to
the actual aggregate annual Awards for all Participants for the current Plan
Year.
ARTICLE VII.
DEFERRALS AND SETTLEMENTS
The Committee may permit Participants to elect to defer receipt of all or a
portion of the Annual Incentive Award under such terms and conditions as
determined by the Committee in its sole discretion and in compliance with
Section 162(m).
ARTICLE VIII.
WITHHOLDING TAXES
The Company shall have the right to deduct from any payment to be made
pursuant to this Plan the amount of any taxes required by law to be deducted
or withheld.
ARTICLE IX.
NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to
be retained in the employ of the Company or its subsidiaries. Further, the
Company expressly reserves the right at any time to terminate the employment
of any Participant free from any liability or any claim under this Plan,
except as provided herein.
ARTICLE X.
CHANGE IN CONTROL
10.1 Acceleration of Attainment of Performance Goal Level. Immediately upon
a Change in Control, all outstanding Awards (except Awards held by a
Participant included in any person causing a Change in Control pursuant to
clause (a) of the definition of Change in Control) shall be deemed earned at
the maximum Performance Goal level, and the Company shall make payment in cash
to each Participant within ten (10) days after the effective date of the
Change in Control in the amount of such maximum Award.
10.2 No Limitation on Company Structure or Capitalization. The granting of
Awards under this Plan shall in no way affect the right of the Company to
adjust, reclassify, reorganize, or otherwise change its capital or business
structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all
or any portion of its businesses or assets.
10.3 Possible Existence of Excess Parachute Payment. It is recognized that
under certain circumstances: (a) payments or benefits provided to a
Participant under this Plan might give rise to an "excess parachute payment"
within the meaning of Section 280G of the Code; (b) it might be beneficial to
a Participant to disclaim some portion of the payment or benefit in order to
avoid such "excess parachute payment" and thereby avoid the imposition of an
excise tax resulting therefrom; and (c) under such circumstances it would not
be to the
A-5
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disadvantage of the Company to permit the Participant to disclaim any such
payment or benefit in order to avoid the "excess parachute payment" and the
excise tax resulting therefrom.
10.4 Excess Parachute Payment Disclaimer. A Participant may, at such
Participant's option, exercisable at any time or from time to time, disclaim
any entitlement to any portion of the payment or benefits arising under this
Plan which would constitute "excess parachute payments," and it shall be such
Participant's choice as to which payments or benefits shall be so surrendered,
if and to the extent that such Participant exercises such option, so as to
avoid "excess parachute payments."
ARTICLE XI.
AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION
The Board may amend, modify, suspend or terminate this Plan for any purpose
except that no amendment or alteration shall be effective prior to approval by
the Company's shareholders to the extent such approval is then required
pursuant to Section 162(m) or otherwise required by law. Further, no amendment
to this Plan shall be effective that would (i) increase the maximum amount
that can be paid to a Participant under this Plan, (ii) change the performance
criteria set forth in Article V hereof for payment of Awards or (iii) modify
the eligibility requirements for Participants in this Plan unless first
approved by the Company's shareholders.
ARTICLE XII.
GOVERNING LAW
The validity, construction and effect of this Plan and any actions taken or
relating to this Plan shall be determined in accordance with the laws of the
State of Delaware and applicable United States law.
ARTICLE XIII.
OTHER BENEFIT AND COMPENSATION PROGRAMS
Unless otherwise specifically provided to the contrary in the relevant plan,
program or practice, settlements of Awards received by participants under this
Plan shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of calculating payments or benefits from any Company
benefit plan, program or practice or any severance policy of the Company.
Further, the Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.
ARTICLE XIV.
SUCCESSORS AND ASSIGNS
This Plan shall be binding on all successors and assigns of a Participant,
including, without limitation, the estate of such Participant and the
executor, administrator or trustee of such estate, or any receiver or trustee
in bankruptcy or representative of such Participant's creditors.
ARTICLE XV.
EFFECTIVE DATE
This Plan shall be effective as of the date it is approved by the Board.
Notwithstanding the foregoing, the adoption of this Plan is expressly
conditioned upon approval by the Company's shareholders at the annual meeting
held in 1997. If the shareholders of the Company shall fail to approve this
Plan at such meeting, this Plan shall terminate and cease to be of any further
force or effect.
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<PAGE>
ARTICLE XVI.
TRANSFERABILITY
Until paid, Awards shall not be subject to the claims of creditors and may
not be assigned, alienated, transferred or encumbered in any way other than by
will or pursuant to the laws of descent and distribution.
ARTICLE XVII.
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, each of the members of the Committee
shall be indemnified by the Company against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with this Plan or any Award
made hereunder, and against all amounts reasonably paid by them in settlement
thereof or paid by them in satisfaction of a judgment in any such action, suit
or proceeding to the maximum extent permitted by law.
ARTICLE XVIII.
INTERPRETATION
This Plan as applicable to certain employees is designed and intended to
comply with Section 162(m), and all provisions hereof shall be construed in a
manner to so comply with respect to such employee. Except as otherwise
provided herein, to the extent that any provision of this Plan or any action
by the Committee under this Plan fails to comply with Section 162(m), such
provision or action shall, without further action by any person, be deemed
automatically amended to the extent necessary to effect compliance with
Section 162(m), provided that if any such provision or action cannot be
amended to effect such compliance, such provision or action shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.
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<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 19, 1997
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 19, 1997, at the Hyatt Regency, Greenwich, 1800 East Putnam Avenue, Old
Greenwich, Connecticut 06870, at 11:00 a.m., Eastern Daylight 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 EXECUTIVE INCENTIVE AWARD
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 and FOR approval of
the adoption of the Executive Incentive Award Plan.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
FOLD AND DETACH HERE.
- --------------------------------------------------------------------------------
<PAGE>
THE BOARD OF DIRECTORS PLEASE MARK YOUR [X]
RECOMMENDS A VOTE FOR THE VOTE AS INDICATED IN
ELECTION OF EACH OF THE THE EXAMPLE.
NOMINEES NAMED BELOW AND
FOR APPROVAL OF THE
ADOPTION OF THE EXECUTIVE
INCENTIVE AWARD PLAN.
1. ELECTION OF DIRECTORS
FOR ALL NOMINEES LISTED WITHHOLD
(EXCEPT AS NOTED TO THE AUTHORITY
CONTRARY)
NOMINEES: JOHN M. FOWLER, HENDRIK J.
HARTONG, JR., DONALD J.
KELLER, ANDREW L.LEWIS IV,
RICHARD T. NINER, JOHN
RADZIWILL, GUENTER ROHRMANN
AND NOEL E.VARGAS.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.)
[ ] [ ] ------------------------------------
2. APPROVAL OF THE EXECUTIVE
INCENTIVE AWARD PLAN.
FOR AGAINST ABSTAIN
[_] [_] [_] 3. 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 , 1997
--------
---------------------------------
---------------------------------
PLEASE COMPLETE, FILL IN DATE,
SIGN AND MAIL THIS PROXY PROMPTLY
USING THE ENCLOSED POST-PAID
RETURN ENVELOPE.
FOLD AND DETACH HERE.
