<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
ATLAS AIR, INC.
- --------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[ATLAS AIR LOGO]
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
May 8, 2000
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 on Wednesday, June 21, 2000 at 10:00 a.m. EDT, in the Auditorium at the
Atlas Air, Inc. Headquarters, 2000 Westchester Avenue, Purchase, New York
10577-2543.
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, Chief
Executive Officer
and President
<PAGE> 3
ATLAS AIR, INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 8, 2000
To the Stockholders of ATLAS AIR, INC.:
The Annual Meeting of Stockholders of Atlas Air, Inc. (the "Company") will
be held on Wednesday, June 21, 2000 at 10:00 a.m. EDT, in the Auditorium at the
Atlas Air, Inc. Headquarters, 2000 Westchester Avenue, Purchase, New York
10577-2543, 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 qualified; (ii) to approve the appointment of Arthur Andersen
LLP as independent auditors of the Company for fiscal year 2000; (iii) to
approve an amendment to the 1995 Stock Option Plan; and (iv) 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 April
24, 2000.
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, 1999, 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, 12039 W. Alameda Parkway, Suite
Z-2, Lakewood, Colorado 80228.
By Order of the Board of Directors,
/S/ DAVID BRICTSON
DAVID BRICTSON
Secretary
<PAGE> 4
ATLAS AIR, INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
PROXY STATEMENT FOR THE
2000 ANNUAL MEETING OF STOCKHOLDERS
------------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy, being mailed to stockholders on or about May 10,
2000, 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
Wednesday, June 21, 2000. A copy of the Company's Annual Report on Form 10-K for
the year ended December 31, 1999 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 April 24, 2000 will
be entitled to vote at the Annual Meeting. On that date there were 34,472,207
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.
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.
<PAGE> 5
Berl Bernhard, 70, has been a member of our Board of Directors since October 28,
1997. He has been a member of the Washington-based law firm of Verner, Liipfert,
Bernhard, McPherson and Hand since 1960 and has served as its Chairman since
1982. He was nominated by President Kennedy and confirmed by the Senate in 1961
to serve as Staff Director of the U.S. Commission on Civil Rights. He was
Special Advisor to Secretary of State Dean Rusk and Under Secretary of State W.
Averell Harriman (1963-65), and was Senior Advisor to Secretary of State Edmund
S. Muskie (1980-81). He also served as a Trustee of Dartmouth College
(1974-1984). He has served as special counsel to the Trustee of Eastern Airlines
and the Chairman of Northwest Airlines. He served as Trustee of the Federal City
Council from 1988 to 1992. Mr. Bernhard served as Chairman of the Aspen
Institute from 1991 to 1996 as well as Chairman of its Executive Committee. He
was a director of Uniroyal Chemical Company, Inc. and UNC Inc.
Michael A. Chowdry, 45, has been Chairman of the Board of Directors and
Chief Executive Officer since our inception in August 1992, and served as
President from July 1995 to May 1996 and September 1997 to the present. He is
also Chairman of the Board (and has served in that role 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, 62, has been a member of our Board of Directors since
May 13, 1997. He was President of Boeing Enterprises from February 1997 until
his retirement on February 1, 1999, where he was responsible for establishing
and directing new airplane-related business acquisitions, joint ventures and
other relationships outside of the traditional business scope of The Boeing
Company ("Boeing"). Since April 1992 until his retirement on February 1, 1999,
he was also a Senior Vice President of Boeing. He previously held various
management and executive positions with Boeing after he joined that company 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 the United States Pacific Economic
Cooperation Committee and as a Director of Avnet, Inc. Formerly, he served as
Chairman of the National Center for APEC, a Director of the U.S.-China Business
Council, a member of the Executive Committee of the National Association of
Manufacturers and as a Director of 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.
David K.P. Li, 61, has been a member of our Board of Directors since April
16, 1998. He has been Chairman of the Bank of East Asia, Limited since 1997 and
a Director and Chief Executive of the Bank of East Asia, Limited since 1981. He
is a Director of Campbell Soup Company, CATIC Shenzhen Holdings Limited,
Chelsfield Plc., China Merchants China Direct Investments Limited, China
Overseas Land & Investment Limited, Dow Jones & Company, Inc., The Hong Kong and
China Gas Company Limited, The Hong Kong and Shanghai Hotels, Limited, Hong Kong
Interbank Clearing Limited, The Hong Kong Mortgage Corporation Limited, Cable &
Wireless HKT Ltd. (Deputy Chairman), Jones Lang LaSalle Incorporated, New World
Infrastructure Limited, PowerGen Plc., San Miguel Brewery Hong Kong Limited,
Sime Darby Berhad and Sime Darby Hong Kong Limited, South China Morning Post
(Holdings) Limited and Vitasoy International Holdings Limited. Mr. Li also
serves on the international advisory boards of Carlos P. Romulo Foundation for
Peace and Development, Daimler Chrysler, Federal Reserve Bank of New York's
International Capital Markets Advisory Committee, IBM, Lafarge, PowerGen and
Rolls-Royce Plc.
David T. McLaughlin, 68, has been a member of our Board of Directors since
September 1995. Since 1988, Mr. McLaughlin has served as Chairman and Chief
Executive Officer of Orion Safety Products (formerly Standard Fusee
Corporation). From 1987 to 1988, Mr. McLaughlin was Chairman of the Aspen
Institute and was appointed President and Chief Executive Officer in 1988. Upon
his retirement from The Aspen Institute in 1997, he was named President
Emeritus. From 1981 to 1987, Mr. McLaughlin served as President of Dartmouth
College. From 1970 to 1981, Mr. McLaughlin served in various management
positions at The Toro Company, being named Chairman and Chief Executive Officer
in 1977. Mr. McLaughlin is Chairman of the Boards of CBS Inc. and PartnerRe Ltd.
2
<PAGE> 6
Brian Rowe, 69, has been a member of our 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 and CEO of General
Electric Aircraft Engines and Senior Vice President of the General Electric
Company (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). Mr. Rowe
is Chairman of AeroEquity, Inc.
Richard H. Shuyler, 53, has been a member of our Board of Directors since
March 1995 and was Senior Vice President -- Finance, Chief Financial Officer and
Treasurer from June 1994 to February 1998. As of February 1998, Mr. Shuyler
became Executive Vice President -- Strategic Planning and also retained his
position as Treasurer. From January 1993 to June 1994, he was Senior Vice
President -- Finance and Chief Financial Officer at Trans World Airlines, Inc.
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.
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, Chief Executive Officer and President
Richard H. Shuyler................... Executive Vice President -- Strategic Planning and Treasurer
James T. Matheny..................... Executive Vice President -- Operations Development
Stanley G. Wraight................... Senior Vice President -- Marketing
Thomas G. Scott...................... Senior Vice President and General Counsel
William S. Allen..................... Senior Vice President -- Human Resources
Donald L. Hickey..................... Senior Vice President -- Sales and Marketing -- Asia
</TABLE>
For biographical information about Messrs. Chowdry and Shuyler see
"Information With Respect to Nominees."
James T. Matheny, 60, has been Executive Vice President -- Operations
Development since February 1999. He previously served as Senior Vice
President -- Operations 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.
Stanley G. Wraight, 53, has been Senior Vice President -- Marketing since
May 1997. From 1995 to 1997, he led KLM's worldwide sales efforts. From 1965 to
1995, he was employed by KLM in various capacities, including Vice President of
KLM's sales, marketing and operations in Asia, Australia and the Middle East.
Thomas G. Scott, 50, has been Senior Vice President and General Counsel
since July 1998. Prior to his employment with us and since 1980, Mr. Scott was
employed with United Parcel Service Co., where he served
3
<PAGE> 7
in a variety of positions, including Vice President and Chief Legal Officer,
with primary responsibility for managing the airline legal department including
aircraft acquisitions, airport projects and international expansion.
William S. Allen, 42, has been Senior Vice President -- Human Resources
since October 1999. He previously served as Vice President -- Human Resources
since August 1997. Prior to his employment with us and since 1985, Mr. Allen
held various positions in Human Resources at PepsiCo ranging from Senior Group
Manager, Employee Relations for PepsiCo's Frito Lay business to Senior Director,
Field Human Resources for Pizza Hut, Inc., a division of PepsiCo Inc.
Donald L. Hickey, 61, has been Senior Vice President -- Sales and
Marketing -- Asia since April 2000. He previously served as Vice
President -- Sales and Marketing since November 1995. Prior to his employment
with us and since 1960, Mr. Hickey held various positions at The Boeing Company,
including project management associated with the B-52 aircraft, Apollo and Lunar
Landing Module, the Skylab and flight simulator and training programs. Mr.
Hickey served as Program Manager for the conversion of B747 passenger aircraft
into freighter aircraft.
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 14, 2000 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 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. The share data presented has been restated to
reflect the 3-for-2 stock split, which occurred on January 25, 1999 in the form
of a stock dividend to shareholders of record at the close of business on that
date (the "Stock Split").
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
OF COMMON STOCK OUTSTANDING
NAME BENEFICIALLY OWNED(1) SHARES
- ---- --------------------- -----------
<S> <C> <C>
Michael A. Chowdry(2)....................................... 19,513,655 56.4%
Richard H. Shuyler.......................................... 208,843 *
James T. Matheny............................................ 44,046 *
Stanley G. Wraight.......................................... 13,911 *
Thomas G. Scott............................................. 6,442 *
Berl Bernhard............................................... 17,065 *
Lawrence W. Clarkson........................................ 12,792 *
David K.P. Li............................................... 13,558 *
David T. McLaughlin......................................... 27,643 *
Brian Rowe.................................................. 35,644 *
All Directors and Executive Officers as a Group............. 19,893,599 57.0%
Wellington Management Company, LLP.......................... 3,416,659(3) 9.9%
</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 14, 2000: Mr. Chowdry -- 123,752 shares; Mr.
Shuyler -- 200,993 shares; Mr. Matheny -- 39,907 shares; Mr.
Wraight -- 9,750 shares; Mr. Scott -- 3,750 shares; Mr. Bernhard -- 7,500
shares; Mr. Clarkson -- 9,000 shares; Mr. Li -- 9,000 shares; Mr.
McLaughlin -- 10,500 shares; Mr. Rowe -- 10,500 shares; and all directors
and executive officers as a group -- 424,652 shares.
(2) The number of shares of Common Stock listed for Mr. Chowdry includes
10,226,501 shares held by Chowdry, Inc., 8,471,501 shares of which are 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
4
<PAGE> 8
benefit of Mr. Chowdry's children). 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. The Chowdry Family Foundation (the
"Foundation"), a non-profit corporation, owns 292,500 shares of Common
Stock. Mr. Chowdry is one of the Foundation's directors and officers, and as
such he may be deemed to share the power to vote and the power to dispose of
these shares. However, one person other than Mr. Chowdry has been given
authority by the Foundation's Board of Directors to determine whether any
disposition of these shares is to be made.
(3) The number of shares presented is based upon currently available public
information and represents beneficial ownership as of December 31, 1999.
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors held six meetings during 1999. 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 1999
(including in the case of each director for purposes of this calculation only
such committee and Board meetings as occurred after such director commenced
service on the Board of Directors) except Mr. Li who attended three of the six
Board meetings held.
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 in 1999 consisted of Michael A. Chowdry,
Brian Rowe and Lawrence W. Clarkson, held two meetings during 1999. The
Compensation Committee administers our executive compensation programs and also
administers the Employee Stock Purchase Plan and the portion of our 1995 Long
Term Incentive and Share Award Plan (the "1995 Stock Option Plan") applicable to
employees. The Independent Subcommittee of the Compensation Committee, which
consists of Mr. Rowe and Mr. Clarkson, issues options and determines the
bonuses, if any, given to officers.
The Audit Committee, which consists of Brian Rowe and David T. McLaughlin,
held one meeting during 1999. In addition, it has been our 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 auditors are satisfactorily implemented and recommend such
special studies or actions which the Committee deems desirable.
Our non-employee directors receive $12,500 on a quarterly basis for their
services, and receive $2,500 for each Board meeting attended in person. We
reimburse non-employee directors for out-of-pocket travel expenditures relating
to their service on the Board. Under our Director Stock Plan (the "Director
Plan"), non-employee directors previously have had the option to receive all or
a portion of their quarterly renumeration in Common Stock instead of cash.
Pursuant to a February 1998 amendment to the Director Plan, however, 25% of the
quarterly compensation of non-employee directors is to be paid in Common Stock
and the balance is payable in Common Stock or cash (or a combination of Common
Stock and cash) at the non-employee director's election. 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 date immediately
preceding the first meeting of directors of each quarter for which compensation
is to be paid (or if no meeting is held in the quarter, then the last day of
such quarter) into the amount of compensation earned for the quarter which the
non-employee director chooses not to receive in cash.
In addition, pursuant to a February 1998 amendment to our 1995 Stock Option
Plan, non-employee directors receive options to purchase 3,000 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
5
<PAGE> 9
election or appointment, and all non-employee directors receive options to
purchase 3,000 shares of Common Stock on August 16 of each year.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers and directors and persons who own more than 10% of a registered class
of our 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 our
directors and officers regarding the necessity of filing a report, we believe
that during 1999 all filing requirements were met on a timely basis, except that
Mr. Allen failed to timely file Form 3 and Mr. Bernhard failed to timely file
two Form 4s.
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
The members of the Compensation Committee in 1999 were Messrs. Rowe,
Chowdry and Clarkson. Mr. Chowdry is the Chairman of the Board, Chief Executive
Officer and President of the Company.
A loan was extended in June 1996 to an executive officer for the purpose of
constructing a residence, for which the remaining balance is $250,000, bearing
interest at approximately 5.9%. In February 1998, we extended a two year loan
for approximately $147,000, bearing interest at a rate of approximately 5.5%, to
an executive officer, which loan was repaid in January 2000. In June 1998 and
March 1999, interest-free demand loans of $100,000 and $65,500, respectively,
were extended to an executive officer, which loans will be forgiven if such
employee remains in Atlas' employ through June 15, 2003. In December 1999, we
extended two interest-free bridge loans of $150,000 and $25,000 to an executive
officer for the purpose of relocating that officer's residence from Colorado to
New York, due no later than December 31, 2000. As of December 31, 1999 the
outstanding balance of executive officer demand loans, including accrued
interest, was approximately $772,000.
Mr. Bernhard is a partner of the law firm Verner, Liipfert, Bernhard,
McPherson and Hand, which rendered legal services to us in 1999 for which we
paid approximately $1,488,000.
Mr. Li is Chairman and Chief Executive of The Bank of East Asia, Limited.
Pursuant to a consulting agreement entered into between us and The Bank of East
Asia, Limited, The Bank of East Asia, Limited received a retainer of
approximately $114,000 in 1999.
In 1999, we purchased a Boeing Business Jet ("BBJ") which after interior
business configuration cost approximately $44 million. Subsequent to the
purchase of the BBJ, we entered into a sale-leaseback transaction with GE
Capital to finance the BBJ. This aircraft is used to transport our executives on
business trips throughout the world. Mr. Chowdry has agreed to share in the
acquisition and financing costs of the BBJ.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth, for 1999, 1998 and 1997, the compensation
of the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------------------
--------------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY(1) BONUS COMPENSATION(2) AWARDS(3) OPTIONS COMPENSATION
- ----------------- ---- --------- -------- --------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael A. Chowdry............ 1999 $643,739 $143,140 $ 60,011 $170,416 56,250 $ 0
Chairman of the Board, 1998 644,226 193,125 51,523 0 337,500 0
Chief Executive Officer 1997 549,569 242,500 75,941 0 0 0
and President
Richard H. Shuyler............ 1999 314,073 69,485 17,099 82,736 22,500 0
Executive Vice 1998 283,626 93,750 17,099 0 135,000 524,654(5)
President -- Strategic 1997 192,500 87,500 15,248 0 0 0
Planning, Treasurer
and Director(4)
James T. Matheny.............. 1999 272,035 68,790 1,322,086 52,136 60,000 0
Executive Vice 1998 220,521 72,188 9,767 0 90,000 0
President -- Operations 1997 192,500 87,500 8,758 0 0 0
Development(6)
Stanley G. Wraight............ 1999 250,000 61,147 26,279 59,580 15,000 0
Senior Vice President -- 1998 227,468 82,500 23,384 0 90,000 0
Marketing(7) 1997 58,333 55,000 41,148 0 30,000 0
Thomas G. Scott............... 1999 196,875 53,504 29,355 26,068 15,000 0
Senior Vice President 1998 90,865 36,094 9,675 0 75,000 0
-- General Counsel(8) 1997 0 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) As to each person named in the table, the table includes the following
shares of restricted stock, which vest on December 31, 2000, generally
subject to continued employment with the Company through that date: Mr.
Chowdry -- 6,204 shares; Mr. Shuyler -- 3,012 shares; Mr. Matheny -- 1,898
shares; Mr. Wraight -- 2,169 shares; and Mr. Scott -- 949 shares.
(4) Mr. Shuyler commenced employment with the Company on June 26, 1994. Mr.
Shuyler served as Chief Financial Officer and Senior Vice
President -- Finance until February 17, 1998, at which time he assumed his
current position.
(5) In May 1998 the Company forgave $500,000 of the principal, plus accrued
interest, of a $750,000 loan extended to Mr. Shuyler.
(6) Mr. Matheny served as Senior Vice President -- Operations until February 22,
1999, at which time he assumed his current position.
(7) Mr. Wraight commenced employment with the Company on September 1, 1997.
(8) Mr. Scott commenced employment with the Company on June 22, 1998.
7
<PAGE> 11
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, 1999.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENTAGE OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED FISCAL 1999 PER SHARE DATE 5% 10%
- ---- ---------- ------------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Chowdry....... 56,250 12.1% $26.94 6/09/09 $ 953,010 $2,415,116
Richard H. Shuyler....... 22,500 4.8 26.94 6/09/09 381,204 966,047
James T. Matheny......... 60,000 12.9 26.94 6/09/09 1,016,544 2,576,124
Stanley G. Wraight....... 15,000 3.2 26.94 6/09/09 254,136 644,031
Thomas G. Scott.......... 15,000 3.2 26.94 6/09/09 254,136 644,031
</TABLE>
- ---------------
(1) 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.
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, 1999. The share data presented
has been restated to reflect the Stock Split.
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>
Michael A. Chowdry... 0 $ 0 109,690 337,500 $1,169,138 $975,337
Richard H. Shuyler... 0 0 195,368 135,000 3,301,498 390,136
James T. Matheny..... 58,125 1,316,541 34,282 135,000 362,766 283,888
Stanley G. Wraight... 21,000 301,551 6,000 108,000 52,313 417,029
Thomas G. Scott...... 0 0 0 90,000 0 340,092
</TABLE>
EMPLOYMENT AGREEMENTS
Mr. Michael A. Chowdry has entered into an employment agreement with the
Company that provides for a base salary of $515,000 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 entered into employment agreements with Mr. Matheny and Mr.
Shuyler, which will expire on June 30, 2001 and March 31, 2001, respectively,
subject to annual renewal thereafter. The Company entered into an employment
agreement with Mr. Wraight in May 1997, which became effective on September 1,
1997 and will expire on May 18, 2002. The Company entered into an employment
agreement
8
<PAGE> 12
with Mr. Scott on June 22, 1998, which will expire on July 1, 2003. The
employment agreements with Messrs. Shuyler, Matheny, Wraight and Scott provide
for annual base salaries of $250,000, $225,000, $200,000 and $175,000,
respectively. In addition to the annual salary, each employee may receive an
annual bonus at the discretion of the Compensation Committee. The employment
agreements require that the employees devote substantially all of their time to
the Company. Each such agreement will be subject to termination by the Company
with or without cause. If such employment agreements are terminated by the
Company without cause, Messrs. Matheny, Wraight and Scott are entitled to
receive a termination payment equal to twelve months of their base compensation.
If Mr. Shuyler's employment agreement is terminated without cause or is not
renewed, Mr. Shuyler is entitled to receive a lump sum payment of $325,000, plus
$900,000 payable over a three year period commencing on the first anniversary of
termination.
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 executive officers are determined by
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.
Profit Sharing. The Company's Profit Sharing Plan provides for payments to
eligible employees in semiannual distributions based upon the Company's pretax
profits. For the years 1999 and 2000, beginning with an eligible employee's
thirteenth month of employment, an employee is entitled to receive a guaranteed
profit sharing payment of 10% of salary. In 1999, every officer of the Company
who had completed one year of service received the same profit sharing pro rata
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.
In February 1999, the Independent Subcommittee of the Compensation
Committee granted deferred compensation to executive officers in the form of
shares of restricted stock, which vest on December 31, 2000, generally subject
to continued employment with the Company through that date.
After reviewing the performance of the Company's executive officers during
1999 against Board approved financial plans of the Company, as well as
individual executive objectives, the Independent Subcommittee of
9
<PAGE> 13
the Compensation Committee determined to grant cash bonuses to executive
officers in amounts based on a range of 27.8% to 31.6% of such officers' base
salaries.
Michael A. Chowdry
Brian Rowe
Lawrence W. Clarkson
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common Stock
to the S&P 500 Index and the S&P Airlines Index for the dates indicated.
TOTAL RETURN TO SHAREHOLDERS+
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
ATLAS AIR S&P 500 S&P AIRLINES
--------- ------- ------------
<S> <C> <C> <C>
8/9/95 100.000 100.000 100.000
12/29/95 69.792 111.143 97.385
12/31/96 198.958 136.664 107.036
12/31/97 100.000 182.264 180.339
12/31/98 203.906 234.352 174.930
12/31/99 171.484 283.667 172.801
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
08/09/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ATLAS AIR** $100 $ 69.79 $ 198.96 $ 100.00 $ 203.91 $ 171.48
S&P 500* 100 111.14 136.66 182.26 234.35 283.67
S&P AIRLINES* 100 97.39 107.04 180.34 174.93 172.80
</TABLE>
* Based on Close Price on August 9, 1995.
** Based on IPO of $10.67 on August 10, 1995, as restated to reflect the Stock
Split.
+ Assumes $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.
10
<PAGE> 14
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 2000. Arthur
Andersen has performed this function since May 22, 1995.
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 2000.
ITEM 3. APPROVAL OF AMENDMENT TO THE 1995 STOCK OPTION PLAN
The Board of Directors is recommending an amendment to the 1995 Stock
Option Plan to increase the number of shares of Common Stock authorized for the
granting of awards from 3,900,000, as restated to reflect the Stock Split, to
5,900,000. This amendment must be approved by a majority of the stockholders
present, or represented by proxy, and entitled to vote at the Meeting.
The 1995 Stock Option Plan is intended to provide a means to attract,
retain and motivate selected employees of the Company and non-employee directors
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 share and performance units,
dividend equivalents and other share based awards. All employees and directors
are eligible to participate in the 1995 Stock Option Plan. The portion of the
1995 Stock Option Plan applicable to employees is administered by the
Compensation Committee by means of the Annual Incentive Compensation Plan and
the Long-Term Incentive Plan. The purpose of these plans is to reward
performance and to align the interests of the executives with those of the
shareholders. The Independent Subcommittee of the Compensation Committee has the
full and final authority to select employees to whom awards may be granted, to
determine the type of awards to be granted to such employees and to make all
administrative determinations required by the 1995 Stock Option Plan. The
Independent Subcommittee of the Compensation Committee also has authority to
waive conditions relating to an award or accelerate vesting of awards. The 1995
Stock Option Plan also provides for certain grants of non-qualified stock
options to non-employee directors, and, in the case of such grants, is intended
to operate automatically and not require administration.
An aggregate of 3,900,000 shares of Common Stock have been reserved for
issuance under the 1995 Stock Option Plan, subject to anti-dilution adjustments
in the event of certain changes in the Company's capital structure. The proposed
amendment would increase the number of shares reserved for issuance to
5,900,000. No eligible employee may receive options or stock appreciation rights
under the 1995 Stock Option Plan for more than 450,000 shares of Common Stock
(subject to adjustment) during any calendar year.
The Board has determined that the increase in the number of shares reserved
for issuance under the 1995 Stock Option Plan is in the best interests of the
Company and its stockholders. The Board believes that grants of stock options
are an effective method to attract and retain employees and that the
availability of shares for future grants under the 1995 Stock Option Plan is
important to the Company's business prospects and operations.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSED AMENDMENT TO
THE 1995 STOCK OPTION PLAN.
11
<PAGE> 15
STOCKHOLDER PROPOSALS
The Company will not consider including a stockholder's proposal for action
at its 2001 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, 2001.
Any such proposal, including any accompanying supporting statement, may not
exceed 500 words.
By Order of the Board of Directors,
/S/ DAVID BRICTSON
DAVID BRICTSON
Secretary
Dated: May 8, 2000
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.
12
<PAGE> 16
ATLAS AIR, INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF STOCKHOLDERS -- JUNE 21, 2000
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 in the Auditorium
at the Atlas Air, Inc. Headquarters, 2000 Westchester Avenue, Purchase, New
York 10577-2543, (see map enclosed), on Wednesday, June 21, 2000 at 10:00 am
EDT and at any adjournments thereof, on all matters coming before said meeting.
<TABLE>
<S> <C> <C> <C>
1. Election of Directors. Nominees: [ ] For [ ] Withheld
Berl Bernhard, Michael A. Chowdry, Lawrence W. Clarkson, David K.P. Li,
David T. McLaughlin, Brian Rowe and Richard H. Shuyler
(To withhold vote for any individual nominee write that name below.)
- ---------------------------------------------------------------------------------------------------------------
2. Ratification of appointment of Arthur Andersen LLP as independent public accountants.
[ ] For [ ] Against [ ] Abstain
3. Approval of amendment to the 1995 Stock Option Plan.
[ ] For [ ] Against [ ] Abstain
4. In their discretion, upon other matters as they may properly come before the meeting.
(Continued and to be signed on the other side.)
</TABLE>
<PAGE> 17
(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 shares 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, 2 and 3.
Dated , 2000
----------------------------
---------------------------------------
---------------------------------------
---------------------------------------
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.
