<PAGE> 1
SCHEDULE 14A
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 sec. 240.14a-11(c) or sec. 240.14a-12
ATLAS AIR, INC.
- --------------------------------------------------------------------------------
(Names of Registrant as Specified In Its Charters)
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
(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 the 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> 2
[ATLAS AIR, INC. LOGO]
ATLAS AIR, INC.
538 COMMONS DRIVE
GOLDEN, COLORADO 80401
April 12, 1997
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders of Atlas Air, Inc. The Annual Meeting will be
held at 10:00 a.m. Denver time on Tuesday, May 13, 1997, at the Hyatt Regency
Denver, 1750 Welton Street, Denver, Colorado 80202.
The business to be conducted at the meeting is outlined in the attached
Notice of Annual Meeting and Proxy Statement. In addition, members of management
will report on the Company's operations and answer stockholder questions.
It is important that your shares be represented at the meeting whether or
not you plan to attend. Accordingly, we request your cooperation by promptly
signing, dating and mailing the enclosed proxy in the envelope provided for your
convenience. If you attend the meeting and wish to vote in person, you may
revoke your proxy at that time.
Sincerely,
/s/ Michael A. Chowdry
MICHAEL A. CHOWDRY
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
ATLAS AIR, INC.
538 COMMONS DRIVE
GOLDEN, COLORADO 80401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 12, 1997
To the Stockholders of ATLAS AIR, INC.:
The Annual Meeting of Stockholders of Atlas Air, Inc. (the "Company") will
be held on Tuesday, May 13, 1997 at 10:00 a.m., at the Hyatt Regency Denver,
Denver, Colorado, for the following purposes: (i) to elect a Board of Directors
to serve until the next Annual Meeting of Stockholders and until their
successors are elected and qualify; (ii) to approve the appointment of Arthur
Andersen LLP as independent auditors of the Company for fiscal year 1997; and
(iii) to transact such other business as may properly come before the meeting.
The record date for stockholders entitled to notice of, and to vote at, the
Annual Meeting or at any adjournment thereof is the close of business on March
24, 1997.
A copy of the Company's Annual Report on Form 10-K (the "Form 10-K"), as
filed with the Securities and Exchange Commission (the "Commission") for the
year ended December 31, 1996, is enclosed.
Your vote is important. If you do not expect to be present at the meeting
and wish your stock to be voted, please sign and date the enclosed Proxy and
mail it promptly in the enclosed reply envelope addressed to American Securities
Transfer, Inc., Attention: Proxy Department, 938 Quail Street, Suite 101,
Lakewood, Colorado, 80215.
By order of the Board
of Directors,
/s/ Clark H. Onstad
CLARK H. ONSTAD
Senior Vice President,
General Counsel
and Secretary
<PAGE> 4
ATLAS AIR, INC.
538 COMMONS DRIVE
GOLDEN, COLORADO 80401
PROXY STATEMENT FOR THE
1997 ANNUAL MEETING OF STOCKHOLDERS
---------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy, being mailed to stockholders on or about April 12,
1997, is solicited by the Board of Directors of Atlas Air, Inc. (the "Company")
for use at the Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, May 13, 1997. A copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 1996 is being furnished to each stockholder with
this Proxy Statement. If a proxy is received before the Meeting, the shares
represented by it will be voted unless the proxy is revoked by written notice
prior to the Meeting or by voting by ballot at the Meeting. If matters other
than those set forth in the accompanying Notice of Annual Meeting are presented
at the Meeting for action, which is not currently anticipated, the proxy holders
will vote the proxies in accordance with their best judgment.
The cost of soliciting proxies in the form enclosed will be borne by the
Company. In addition to the solicitation by mail, proxies may be solicited
personally, or by telephone, or by employees of the Company. The Company may
reimburse brokers holding Common Stock in their names or in the names of their
nominees for their expenses in sending proxy material to the beneficial owners
of such Common Stock.
STOCKHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING
Only stockholders of record at the close of business on March 24, 1997,
will be entitled to vote at the Annual Meeting. On that date there were
22,450,229 shares of the Common Stock of the Company (the "Common Stock")
outstanding and entitled to vote at the Annual Meeting. Each share is entitled
to one vote. The presence at the Meeting in person or by proxy of the holders of
a majority of the outstanding shares of Common Stock entitled to vote shall
constitute a quorum for the transaction of business. Proxies marked as
abstaining (including proxies containing broker non votes) on any matter to be
acted upon by stockholders will be treated as present at the meeting for
purposes of determining a quorum but will not be counted as votes cast on such
matters.
ITEM 1. ELECTION OF DIRECTORS
Seven directors are to be elected at the Meeting, each director to hold
office until the next Annual Meeting of Stockholders and until his successor is
elected and qualified. The persons named as proxies on the enclosed proxy have
been designated by the Board of Directors and intend to vote, unless otherwise
directed, for the nominees listed below. With the exception of Mr. Clarkson, all
of such nominees are currently directors of the Company.
The Board of Directors has no reason to believe that any of the nominees
for the office of director will be unavailable for election as a director.
However, if at the time of the Meeting any of the nominees should be unable or
decline to serve, the persons named in the proxy will vote for such substitute
nominees, vote to allow the vacancy created thereby to remain open until filled
by the Board of Directors, or vote to reduce the number of directors for the
ensuing year, as the Board of Directors recommends. In no event, however, can
the proxy be voted to elect more than seven directors. The election of the
nominees to the Board of Directors requires the affirmative vote of a plurality
of the shares held by stockholders present at the Meeting in person or by proxy.
INFORMATION WITH RESPECT TO NOMINEES
The following information sets forth the name and age of each nominee, all
other positions or offices, if any, now held by him with the Company and his
principal occupation during the past five years.
James J. Blanchard, 54, was United States Ambassador to Canada from August,
1993 until April, 1996. From 1991 to 1993, he was a partner in the Washington,
D.C. law firm of Verner, Liipfert, Bernhard,
<PAGE> 5
McPherson and Hand. He served as Governor of Michigan for eight years
(1983-1991). From 1975 to 1983 he served as a member of the United States House
of Representatives. Before election to Congress, Ambassador Blanchard was
Assistant Attorney General of Michigan (1969-1974). He has been awarded the
State Department's Foreign Affairs Award for Public Service and the
International Freedom Festival's Freedom Award.
Michael A. Chowdry, 42, has been Chairman of the Board of Directors and
Chief Executive Officer of the Company since its inception in August 1992, and
served as President from July 1995 to May 1996. He is also Chairman of the Board
(since its inception in April 1985) of Aeronautics Leasing, Inc., an affiliate
of the Company ("ALI"). Prior to his founding of ALI, he formed a Colorado-based
certificated commuter air carrier in 1981, and was the principal stockholder of
Skybus, Inc., the certificated air carrier successor to Frontier Horizon
Airlines, from 1984 to 1985. He has been involved in the operation, acquisition,
financing and disposition of aircraft and aviation assets since 1978.
Lawrence W. Clarkson, 58, has been President of Boeing Enterprises since
February 1997, where he is responsible for establishing and directing new
commercial airplane-related business acquisitions, joint ventures and other
relationships outside of the traditional business scope of The Boeing Company
("Boeing"). Since April 1992 he has also been a Senior Vice President of Boeing.
He previously held various management and executive positions with Boeing which
he joined in 1987. Prior to that, for twenty years he held various management
and executive positions with Pratt & Whitney. He serves as Vice Chairman of the
National Bureau of Asian Research, Chairman of U.S.-Pacific Economic Cooperation
Council and Chairman of the National Center for APEC, and as a Director of the
U.S.-China Business Council, the National Association of Manufacturers and the
Atlantic Council. He also serves on the U.S.-Japan Joint High Level Advisory
Panel and is a member of the Council on Foreign Relations, the Pacific Council
on International Policy and the National Research Council -- Committee on Japan.
Mickey P. Foret, 51, has been a member of the Company's Board of Directors
and President of the Company since June 1996. From September 1993 to May 1996,
he was Executive Vice President -- Chief Financial Officer at Northwest
Airlines; he had joined Northwest as Senior Vice President Planning and Finance
in December 1992. From 1990 to 1992, he was President of KLC, Inc., an airline
consulting firm, and President and Chief Executive Officer of KLH Computers,
Inc., a personal computer manufacturer. From 1974 to 1990, he held various
management and executive positions with Continental Airlines Holdings, Inc., and
various of its affiliates and corporate predecessors, including Continental
Airlines, Inc., where he served as President and Chief Financial Officer;
Chelsea Catering Company, Inc., where he served as Chairman and Chief Executive
Officer; Eastern Airlines, Inc., where he served as Senior Vice
President -- Finance and International; and, Texas International Airlines, where
he served as Vice President and Treasurer. He is currently a director of Nor Am
Energy Corporation.
David T. McLaughlin, 64, has been a member of the Company's Board of
Directors since September 1995. He has been President and Chief Executive
Officer of The Aspen Institute since his appointment in 1988, as well as
Chairman of its Board of Trustees since 1994. From 1972 to 1977 he served as
Chief Executive Officer of The Toro Company, and served as its Chairman from
1977 to 1981. From 1981 to 1987, he served as president of Dartmouth College. He
is currently a director of ARCO, Chase Manhattan Corporation, Westinghouse
Electric Corporation, CBS Inc., Standard Fusee Corporation, and PartnerRe, Inc.
and serves as a member of the Board of Trustees of the Asia Foundation Center
for Asian Pacific Affairs.
Brian Rowe, 65, has been a member of the Company's Board of Directors since
March 1995. He retired as Chairman of the General Electric Aircraft Engines
division of the General Electric Company in January 1995, a position he held
since September 1993, where he was in charge of world-wide sales of GE engines.
Prior to that, he held various management and executive positions with General
Electric, which he joined in 1957, including President of General Electric
Aircraft Engines (from 1979 to 1993), Vice President and General Manager of the
Aircraft Engineering Division (from 1976 to 1979), Vice President and General
Manager of the Airline Programs Division (from 1974 to 1976) and Vice President
and General Manager of the Commercial Engine Projects Division (from 1972 to
1974).
Richard H. Shuyler, 50, has been a member of the Company's Board of
Directors since March 1995 and has been Senior Vice President -- Finance, Chief
Financial Officer and Treasurer of the Company since
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<PAGE> 6
June 1994. From January 1993 to June 1994, he was Senior Vice
President -- Finance and Chief Financial Officer at Trans World Airlines, Inc.
("TWA"). From 1975 to 1992, he held various management and executive positions
with Continental Airlines, Inc., and various of its affiliates and corporate
predecessors, including Texas International Airlines, Inc., Texas Air
Corporation and New York Air, serving as Senior Vice President -- Finance and
Chief Financial Officer at those entities. TWA filed for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on June 30, 1995.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF EACH NOMINEE FOR
DIRECTOR NAMED ABOVE.
EXECUTIVE OFFICERS
The following table sets forth as of the date hereof the executive officers
of the Company.
<TABLE>
<CAPTION>
NAME POSITION(S)
---- -----------
<S> <C>
Michael A. Chowdry................... Chairman of the Board and Chief Executive Officer
Mickey P. Foret...................... President
Richard H. Shuyler................... Senior Vice President -- Finance, Chief Financial
Officer and Treasurer
Clark H. Onstad...................... Senior Vice President, General Counsel and Secretary
James T. Matheny..................... Senior Vice President -- Operations
R. Terrence Rendleman................ Senior Vice President -- Flight and Technical
Operations
</TABLE>
For biographical information about Messrs. Chowdry, Foret and Shuyler see
"Information With Respect to Nominees".
Clark H. Onstad, 51, has been Senior Vice President, General Counsel and
Secretary of the Company since March 1995. From 1991 to 1995, he was affiliated
with the Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Hand. From 1982 to 1990, he held various executive positions with Texas Air
Corporation and its Continental Airlines, Inc. subsidiary, including Senior Vice
President -- Properties, Purchasing and Government Affairs. From 1977 to 1981,
he served as Chief Counsel of the Federal Aviation Administration. Prior to
that, he was affiliated with the Washington, D.C. law firm of Ginsberg, Feldman
and Bress.
James T. Matheny, 58, has been Senior Vice President -- Operations of the
Company since December 1992. From 1991 to 1992, he was Director -- Quality
Assurance and subsequently, Vice President -- Maintenance and Engineering for
Eastern Airlines, Inc. From 1961 to 1991, he served in the United States Navy,
rising to Commanding Officer of an aircraft squadron, two air wings and an
aircraft carrier, and Operations Officer of the Seventh Fleet based in Japan.
R. Terrence Rendleman, 52, has been Senior Vice President -- Technical
Services and Flight Operations since January 1, 1997. From June 1993 to December
1996, he was Senior Vice President for Maintenance Operations at United
Airlines. Prior to that, he served as Senior Vice President -- Technical
Operations at Northwest Airlines from April 1985 to June 1993. From January 1983
to April 1985, he served as Vice President of Engineering and Maintenance at
Braniff Airlines, where he was a Boeing 727 pilot from 1979 to 1983.
SHARE OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS
Set forth in the following table is the beneficial ownership of Common
Stock as of April 10, 1997 for (i) each person (or group of affiliated persons)
known to the Company to be the beneficial owner of more than 5% of Common Stock,
(ii) all Directors, (iii) each of the Company's five most highly compensated
executive
3
<PAGE> 7
officers, including the Company's Chief Executive Officer and President (the
"Named Executive Officers") and (iv) all Directors and Named Executive Officers
as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENT OF
COMMON STOCK OUTSTANDING
NAME BENEFICIALLY OWNED(1) SHARES
---- --------------------- -----------
<S> <C> <C>
Michael A. Chowdry(2)............................... 13,291,628 59.2%
Mickey P. Foret..................................... 77,180 *
Richard H. Shuyler.................................. 114,425 *
David M. McElroy.................................... 0 *
Clark H. Onstad..................................... 55,365 *
James T. Matheny.................................... 37,021 *
Brian Rowe.......................................... 16,000 *
James J. Blanchard.................................. 1,000 *
David T. McLaughlin................................. 2,500 *
All Directors and Executive Officers as a Group..... 13,595,119 60.6%
</TABLE>
- ---------------
* Represents less than 1% beneficial ownership.
(1) Unless otherwise indicated, ownership means sole voting and investment
power. As to each person or group named in the table, the table includes the
following shares issuable upon the exercise of options that are exercisable
within 60 days from April 10, 1997: Mr. Chowdry -- 35,627 shares; Mr.
Foret -- 77,180 shares; Mr. Shuyler -- 96,365 shares; Mr. McElroy -- 0
shares; Mr. Onstad -- 55,365 shares; Mr. Matheny -- 37,021 shares; Mr.
Rowe -- 2,000 shares; Mr. Blanchard -- 1,000 shares; Mr. McLaughlin -- 2,000
shares; and all directors and executive officers as a group -- 306,558
shares.
(2) The number of shares of Common Stock listed for Mr. Chowdry includes
5,981,000 shares held by Chowdry Limited Partnership (a limited partnership,
the general partner of which is Chowdry, Inc. and whose limited partner is a
trust for the benefit of Mr. Chowdry's children) and 1,170,000 shares held
by Chowdry, Inc. Mr. Chowdry is the sole stockholder and director of
Chowdry, Inc. Mr. Chowdry has the sole voting and disposition powers with
respect to these shares.
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors held six meetings during 1996. Each incumbent
director attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which the Director served during 1996,
except Mr. Blanchard who attended 66% of the meetings. For each director this
calculation is based upon such committee and Board meetings as occurred after
such Director commenced service on the Board of Directors.
The Board of Directors has a standing Compensation Committee and a standing
Audit Committee. The membership of these committees is determined from time to
time by the Board.
The Compensation Committee, which consists of Michael A. Chowdry and Brian
Rowe, held three meetings during 1996. The Compensation Committee administers
the Company's executive compensation programs, which includes determining the
bonuses, if any, given to executive officers, and also administers the Employee
Stock Purchase Plan and the portion of the Company's 1995 Long Term Incentive
and Share Award Plan (the "1995 Stock Option Plan") applicable to employees.
The Audit Committee, which consists of Brian Rowe and David T. McLaughlin,
did not hold any meetings during 1996. It has been the Company's practice to
provide detailed financial information at each meeting of the Board of
Directors. The principal functions of the Audit Committee are to review the
scope of the annual audit and the annual audit report of the independent
auditors, recommend the firm of independent auditors to perform such audits,
consider non-audit functions proposed to be performed by the independent
auditors, review the functions performed by the internal audit staff, ascertain
whether the recommendations of
4
<PAGE> 8
auditors are satisfactorily implemented and recommend such special studies or
actions which the Committee deems desirable.
The Company's non-employee directors receive $10,000 on a quarterly basis
for their services, and receive $2,500 for each Board meeting attended in
person. In August 1996, the Company established the Director Stock Plan (the
"Director Plan"), which provides the Company's non-employee directors the option
to receive all or a portion of their quarterly remuneration in Common Stock
instead of cash. If a non-employee director elects at the commencement of any
quarter to receive his quarterly remuneration, or a portion thereof, in Common
Stock, the number of shares received is determined by dividing the average price
for the 30-day period immediately preceding the end of the quarter into the
amount of compensation earned for the quarter which the non-employee director
chooses not to receive in cash. The effective date of this Director Plan was
January 1, 1997.
In addition, pursuant to the Company's 1995 Stock Option Plan, non-employee
directors of the Company receive options to purchase 1,000 shares of Common
Stock upon their initial election or appointment to the Board at an exercise
price equal to the fair market value of the Common Stock at the time of such
election or appointment, and all non-employee directors receive options to
purchase 1,000 shares of Common Stock on August 16 of each year. The Company
reimburses non-employee directors for out-of-pocket travel expenditures relating
to their service on the Board.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than 10% of a
registered class of the Company's equity securities to file initial reports of
ownership and changes in ownership with the SEC and to furnish copies of these
reports to the Company. Based on a review of these reports and written
representations from the Company's directors and officers regarding the
necessity of filing a report, the Company believes that during 1996 all filing
requirements were met on a timely basis, except Form 3 reports of initial stock
ownership which were not timely filed for Messrs. Blanchard and Foret.
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
The members of the Compensation Committee are Messrs. Rowe and Chowdry. Mr.
Chowdry is the Chairman of the Board and Chief Executive Officer of the Company.
In August and September 1995, the Company extended demand loans to three
senior vice presidents of the Company in the aggregate amount of $550,000,
bearing interest at an annual rate of 7.50%. Two of the loans plus interest were
paid in full in April and May 1996. A loan of up to $750,000, bearing interest
at 5.87% was extended in June 1996 to one officer for the purpose of
constructing a residence. As of December 31, 1996 the outstanding balance of
officer demand loans was $473,000.
During 1996, the Company rented a Cessna Citation SP, on an as needed
basis, from MAC Flightlease, Inc. for the purpose of corporate business travel.
MAC Flightlease, Inc. is wholly-owned by the wife of Mr. Chowdry. The Company
paid $265,000 in 1996 for such travel, at rates which are considered by the
Company to be at fair market value.
Mr. Clarkson is President of Boeing Enterprises and Senior Vice President
of The Boeing Company ("Boeing"). During 1996, the Company paid Boeing
approximately $46.9 million for the conversion of certain aircraft into
freighter configuration, the purchase of parts and other services.
Mr. Blanchard is a partner of the law firm of Verner, Liipfert, Bernhard,
McPherson and Hand which rendered legal services to the Company in 1996.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following table sets forth, for 1996, 1995 and 1994, the compensation
of the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------------- ------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY(1) BONUS COMPENSATION(2) OPTIONS COMPENSATION
----------------- ---- --------- ---------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Chowdry.................... 1996 $670,414 $ 363,750(3) $ 50,888 0 $ 0
Chairman of the Board 1995 563,783 240,000 49,684 0 0
and Chief Executive Officer 1994 463,542 16,800 48,818 0 0
Mickey P. Foret....................... 1996 233,333 3,041,049(3)(4) 5,268 300,000 0
President and Director 1995 0 0 0 0 0
1994 0 0 0 0 0
Richard H. Shuyler.................... 1996 240,897 131,250(3) 1,021,318 0 0
Senior Vice President -- Finance, 1995 188,470 87,500 16,013 150,391 0
Chief Financial Officer, 1994 89,444 125,000 8,006 0 0
Treasurer and Director(5)
David M. McElroy...................... 1996 109,375 0 2,805,999 0 0
Director(6) 1995 204,944 43,750 13,670 179,688 10,883(7)
1994 176,267 7,263 3,417 0 35,208(7)
Clark H. Onstad....................... 1996 225,510 131,250(3) 2,129,817 0 0
Senior Vice President, 1995 142,857 0 12,042 150,391 125,000(9)
General Counsel and Secretary(8) 1994 0 0 0 0 0
James T. Matheny...................... 1996 180,207 131,250(3) 1,671,822 0 0
Senior Vice President -- Operations 1995 128,342 0 0 93,750 0
1994 111,200 23,850 0 0 0
George Murnane III.................... 1996 29,167 0 1,857,669 0 313,349(11)
Senior Vice President(10) 1995 43,750 125,000 1,495 80,000 0
1994 0 0 0 0 0
</TABLE>
- ---------------
(1) Includes amounts paid under the Profit Sharing Plan.
(2) Represents compensation derived from the exercise of stock options, the
furnishing of Company-owned automobiles, relocation cost reimbursements and
other personal benefits.
(3) The Compensation Committee determined that, in lieu of cash, a portion of
the annual bonuses for Messrs. Chowdry, Foret, Shuyler, Onstad and Matheny
would be paid in stock options having a value based upon the Black-Scholes
pricing method equal to the dollar amount of such bonuses. Such stock
options will have a term of five years and are immediately exercisable at
$26.00 per share. Mr. Chowdry received 35,627 options; Mr. Foret received
17,180 options; Mr. Shuyler received 12,855 options; Mr. Onstad received
12,855 options; and Mr. Matheny received 12,855 options.
(4) Mr. Foret commenced employment with the Company on June 1, 1996, and
received a signing bonus of $2,865,639.
(5) Mr. Shuyler commenced employment with the Company on June 26, 1994.
(6) Mr. McElroy resigned as Senior Vice President of the Company in August
1996.
(7) Represents payments made with respect to a certain retirement plan funded
on behalf of Mr. McElroy by the Company.
(8) Mr. Onstad commenced employment with the Company on March 6, 1995.
(9) Represents forgiveness of a loan from the Company.
(10) Mr. Murnane commenced employment with the Company on October 1, 1995.
(11) Represents payments made to Mr. Murnane in connection with his resignation
from the Company on February 27, 1996.
6
<PAGE> 10
The following table sets forth information with respect to grants of stock
options to each of the Named Executive Officers during the year ended December
31, 1996.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER PERCENTAGE OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ------------------------
NAME GRANTED(1) FISCAL 1996 SHARE DATE 5% 10%
---- ----------- ------------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mickey P. Foret........................ 300,000(3) 82.2% $41.75 06/01/06 $7,878,000 $19,962,000
</TABLE>
- ---------------
(1) There were no stock options granted to Messrs. Chowdry, Shuyler, McElroy,
Onstad, Matheny or Murnane.
(2) The potential realizable value uses the hypothetical rates specified by the
Securities and Exchange Commission and is not intended to forecast future
appreciation, if any, of the Company's stock price. The Company did not use
an alternative formula for this valuation as the Company is not aware of any
formula which will determine with reasonable accuracy a present value based
on future unknown or volatile factors. In fact, the Company disavows the
ability of this or any other valuation model to predict or estimate the
Company's future stock price or to place a reasonably accurate present value
on the stock options because all models depend on assumptions about the
stock's future price movement, which is unknown. The value indicated is a
net amount, as the aggregate exercise price has been deducted from the final
appreciated value.
(3) The stock options were granted in April 1996, and become exercisable ratably
on June 1, 1997, June 1, 1998, June 1, 1999, June 1, 2000 and June 1, 2001.
The following table sets forth information with respect to each of the
Named Executive Officers concerning the value of all exercised and unexercised
stock options of such individuals at December 31, 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mickey P. Foret............... 0 $ 0 0 300,000 $ 0 $1,350,000
Richard H. Shuyler............ 48,000 959,000 64,630 37,761 2,229,558 1,142,270
David M. McElroy.............. 143,229 2,796,886 0 0 0 0
Clark H. Onstad............... 89,000 2,044,938 23,630 37,761 743,308 1,142,270
James T. Matheny.............. 55,000 1,668,906 9,583 29,167 289,886 882,302
George Murnane III............ 80,000 1,855,000 0 0 0 0
</TABLE>
EMPLOYMENT AGREEMENTS
Mr. Michael A. Chowdry has entered into an employment agreement with the
Company that provides for a base salary of $485,000 per annum and discretionary
annual bonuses to be determined by the Compensation Committee of the Board of
Directors of the Company. The employment agreement will expire June 30, 2002 and
is subject to termination by either party with or without cause. If the
employment agreement is terminated by the Company without cause, Mr. Chowdry
would be entitled to receive a termination payment equal to twelve months of his
base compensation.
The Company has also entered into employment agreements with Messrs.
Shuyler, Onstad and Matheny, each of which will expire on June 30, 1998. The
Company entered into an employment agreement with Mr. Rendleman on November 18,
1996, which will expire on November 18, 2001. Each such agreement will be
subject to termination by either party with or without cause. If such employment
agreements are
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terminated by the Company without cause, the employees are entitled to receive a
termination payment equal to twelve months of their base compensation and all
the options granted to such employees under the 1995 Stock Option Plan will vest
on the date of such termination, except Mr. Rendleman will receive a termination
payment equal to twice his base annual compensation. The employment agreements
with Messrs. Shuyler and Onstad each provide for an annual salary of $175,000,
while the employment agreement with Mr. Rendleman provides for an annual salary
of $150,000. Mr. Matheny's employment agreement established a salary of $110,000
based on his role as Vice President. Subsequent thereto, Mr. Matheny was
promoted to Senior Vice President and his salary is $175,000. In addition to the
annual salary, each employee may receive an annual bonus at the discretion of
the Compensation Committee. Mr. Rendleman is guaranteed a bonus of no less than
50% of his base annual compensation for 1997 and 1998. The employment agreements
require that the employees devote substantially all of their time to the
Company.
In February 1996, the Company entered into a separation agreement with Mr.
Murnane, a former executive officer of the Company. Pursuant to this agreement,
the Company paid Mr. Murnane $262,500 of compensation and approximately $51,000
for other fringe benefits. In addition, stock options for 80,000 shares of
Common Stock at an exercise price of $22.25 per share granted to Mr. Murnane in
October 1995 became immediately exercisable.
The Company entered into an employment agreement with Mr. Foret dated as of
April 19, 1996, pursuant to which Mr. Foret began his employment as president of
the Company effective June 1, 1996. The agreement will expire on May 31, 1999.
The employment agreement provides for a base annual salary of $400,000. In
addition, Mr. Foret received signing bonuses of $750,000 and $2,115,639 on June
1, 1996 and January 1, 1997, respectively, and is entitled to an annual bonus at
the discretion of the Compensation Committee. The agreement provides that Mr.
Foret be granted options on the commencement of his employment under the 1995
Stock Option Plan to purchase 300,000 shares of Common Stock at an exercise
price of $41.75 per share, exercisable in five equal installments commencing one
year following the date of grant and annually thereafter. The agreement is
subject to termination by either party with or without cause. If the agreement
is terminated by the Company without cause, Mr. Foret is entitled to receive a
termination payment equal to 24 months of his base annual compensation and all
options granted to Mr. Foret under the 1995 Stock Option Plan vest on the date
of his termination.
On August 13, 1996, the Company entered into a consulting agreement with
Mr. McElroy and he resigned as an executive officer of the Company shortly
thereafter. Pursuant to this agreement, the Company pays Mr. McElroy a
consulting fee of $8,000 per month for a period of ten months.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The Company's executive compensation philosophy has been to align the
interests of the Company's stockholders and executive officers, while promoting
teamwork among the Company's executive officers. The Board of Directors and the
Compensation Committee, which administers the Company's executive compensation
programs, have implemented this philosophy through a compensation program which
combines four components: base salary, profit sharing, stock options and, in
certain circumstances, bonuses.
Base Salary. The base salaries of the Company's senior vice presidents and
vice presidents were set at the time such executives were hired, and have
remained constant. Such salaries as determined at the time of hire were based on
several factors, including comparisons with industry compensation levels and the
individual executive's prior salary. In addition, base salary determinations
were made in conjunction with the other components of executive compensation
discussed herein, to assure proper attention to the Company's goals. Mr.
Chowdry's base salary was premised on the salaries of major airline executives,
adjusted to reflect in small portion the risk capital which he committed to the
start up of the Company.
Profit Sharing. The Company's Profit Sharing Plan provides for payments to
eligible employees in semiannual distributions based upon the Company's pretax
profits. The Company is obligated to make an
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annual profit sharing contribution of ten percent of the Company's pretax
profits, which is defined to mean net income before taxes, but excluding (i) any
income or loss related to charges or credits for unusual or infrequently
occurring items and (ii) extraordinary items reported on separate line items in
the Company's income statement. In 1996, every officer of the Company who had
completed one year of service received the same percentage profit sharing
distribution as all other eligible employees.
Stock Options. The Company's 1995 Stock Option Plan was adopted in March
1995, as a means to attract, retain and motivate selected employees of the
Company. The 1995 Stock Option Plan provides for the grant to eligible employees
of incentive stock options, non-qualified stock options, stock appreciation
rights, restricted shares, performance shares and performance units, dividend
equivalents and other share based awards
Bonuses. The Compensation Committee's policy is to provide a significant
portion of executive officers' total compensation through annual bonuses as
incentives to achieve the Company's financial and operational goals and increase
shareholder value. The Company's bonus arrangements for its executive officers
are intended to make a major portion of each executive officer's compensation
dependent on the Company's overall performance. Such bonuses are also intended
to link executive compensation to shareholder value and to encourage the
executives to act as a team. Bonuses are also intended to recognize the
executive's individual contributions to the Company.
After reviewing the performance of the Company's executive officers during
1996 against Board approved financial plans of the Company, along with certain
industry comparisons, the Committee determined to grant bonuses to executive
officers in amounts ranging from 50% to 75% of such officers' base salaries. In
order to further align the interest of the executives with those of the
shareholders of the Company, the Committee recommended that those bonuses be
paid in stock options to the executive officers, having a value based upon the
Black-Scholes pricing method equal to the dollar amount of such bonuses.
Michael A. Chowdry
Brian Rowe
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PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the S&P 500 Stock Index and the S&P Airlines Index for the dates indicated.
TOTAL RETURN TO SHAREHOLDER +
<TABLE>
<CAPTION>
TOT RET S&P TOT RET S&P ATLAS AIR
Measurement Period 500 STOCK AIRLINE COMMON
(Fiscal Year Covered) INDEX* INDEX* STOCK**
<S> <C> <C> <C>
8/10/95 100.000 100.000 100.000
12/31/95 111.143 97.385 104.688
12/31/96 136.664 107.036 298.438
</TABLE>
* Based on Close Price on August 9, 1995
** Based on IPO of $16 on August 10, 1995
+ Assume $100 invested on August 10, 1995 in each of the Company's Common
Stock, the S&P 500 Stock Index and the S&P Airlines Index.
ITEM 2. APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP ("Arthur
Andersen") as independent auditors of the Company for the year 1997. Arthur
Andersen has performed this function since May 22, 1995. For a discussion of the
Company's previous change in auditors, see "Item 9. Changes in and Disagreement
with Accountants on Accounting and Financial Disclosure" included in the
Company's Form 10-K being provided herewith.
Representatives of Arthur Andersen will be present at the Meeting with the
opportunity to make a statement, if they wish, and to respond to appropriate
questions from stockholders. The affirmative vote of a majority of the shares
present and entitled to vote at the Meeting is necessary for the approval of the
appointment of Arthur Andersen as independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE
YEAR 1997.
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STOCKHOLDER PROPOSALS
The Company will not consider including a stockholder's proposal for action
at its 1998 Annual Meeting of Stockholders in the proxy material to be mailed to
its stockholders in connection with such meeting unless such proposal is
received at the principal office of the Company no later than January 1, 1998.
By order of the Board of Directors,
/s/ Clark H. Onstad
CLARK H. ONSTAD
Senior Vice President, General
Counsel
and Secretary
Dated: April 12, 1997
Your vote is important. Stockholders who do not expect to be present at the
Annual Meeting and who wish to have their stock voted are requested to sign and
date the enclosed proxy and return it in the enclosed envelope. No postage is
required if mailed in the United States.
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ATLAS AIR, INC.
538 COMMONS DRIVE, GOLDEN, COLORADO 80401
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- MAY 13, 1997
The undersigned hereby constitutes and appoints Michael A. Chowdry and Richard
H. Shuyler, and each of them, his true and lawful agents and proxies with full
power of substitution in each, to represent the undersigned at the Annual
Meeting of Stockholders of Atlas Air, Inc. to be held at the Hyatt Regency
Denver, 1750 Welton Street, Denver, Colorado 80202, on Tuesday, May 13, 1997 at
10:00 a.m. Denver time and at any adjournments thereof, on all matters coming
before said meeting.
1. Election of Directors. Nominees: [ ] For [ ] Withheld
James J. Blanchard, Michael A. Chowdry, Mickey P. Foret, Lawrence W. Clarkson,
David T. McLaughlin, Brian Rowe and Richard H. Shuyler.
(To withhold vote for any individual nominee write that name below.)
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2. Ratification of appointment of Arthur Andersen LLP as independent public
accountants.
[ ] For [ ] Against [ ] Abstain
3. In their discretion, upon other matters as they may properly come before the
meeting.
(Continued and to be signed on the other side.)
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(Continued from other side.)
You are encouraged to specify your choices by marking the appropriate boxes,
see reverse side, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The persons named on
the reverse side as agents and proxies cannot vote your share unless you sign
and return this card.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
Dated , 1997
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-----------------------------------
-----------------------------------
Signature(s)
Please mark, sign and return
promptly using the enclosed
envelope. Executors,
administrators, trustees, etc.
should give a title as such. If the
signer is a corporation, please
sign full corporate name by duly
authorized officer.
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