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 [ ]
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[ ] 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 ss. 240.14a-12
ATLAS AIR WORLDWIDE HOLDINGS, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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[ ] 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.
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[ATLAS AIR LOGO]
ATLAS AIR WORLDWIDE HOLDINGS, INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
May 3, 2002
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend the
Annual Meeting of Stockholders of Atlas Air Worldwide Holdings, Inc. The Annual
Meeting will be held on Tuesday, June 4, 2002 at 10:00 a.m. EDT, on the second
floor of the New York Marriott East Side Hotel, 525 Lexington Avenue, New York,
New York 10017.
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/ BRIAN H. ROWE
BRIAN H. ROWE
Chairman of the Board
ATLAS AIR WORLDWIDE HOLDINGS, INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 3, 2002
To the Stockholders of ATLAS AIR WORLDWIDE HOLDINGS, INC.:
The Annual Meeting of Stockholders of Atlas Air Worldwide Holdings, Inc.
(the "Company") will be held on Tuesday, June 4, 2002 at 10:00 a.m. EDT, on the
second floor of the New York Marriott East Side Hotel, 525 Lexington Avenue, New
York, New York 10017, 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 an amendment to the 1995 Long Term Incentive and Share
Award Plan;
(iii) to ratify the appointment of Ernst & Young LLP as independent
public accountants of the Company for fiscal year 2002; 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
25, 2002.
A copy of Atlas Air Worldwide Holdings, Inc.'s Annual Report on Form 10-K
(the "Form 10-K"), as filed with the Securities and Exchange Commission (the
"SEC") for the year ended December 31, 2001, 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 Computershare Trust
Company, Inc., Attention: Proxy Department, 350 Indiana Street, Suite 800,
Golden, Colorado 80401.
By Order of the Board of Directors,
/s/ DAVID BRICTSON
DAVID BRICTSON
Secretary
ATLAS AIR WORLDWIDE HOLDINGS, INC.
2000 WESTCHESTER AVENUE
PURCHASE, NEW YORK 10577-2543
PROXY STATEMENT FOR THE
2002 ANNUAL MEETING OF STOCKHOLDERS
------------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy, being mailed to stockholders on or about May 3,
2002, is solicited by the Board of Directors of Atlas Air Worldwide Holdings,
Inc. for use at the Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, June 4, 2002. A copy of Atlas Air Worldwide Holdings, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 2001 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, 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 us. In
addition to the solicitation by mail, proxies may be solicited personally, or by
telephone, or by our employees. In addition, we 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.
Effective February 16, 2001, Atlas Air, Inc. completed a reorganization,
whereby Atlas Air Worldwide Holdings, Inc., a Delaware corporation, became the
holding company for Atlas Air, Inc. (the "Reorganization"). References to the
"Company," "Atlas Air," "we," "us" or "our" in this Proxy Statement refer to
Atlas Air Worldwide Holdings, Inc., as successor to Atlas Air, Inc., as of
February 16, 2001, and to Atlas Air, Inc. through February 15, 2001.
STOCKHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING
Only stockholders of record at the close of business on April 25, 2002 will
be entitled to vote at the Meeting. On that date there were 38,251,091 shares of
Common Stock of the Company (the "Common Stock") outstanding and entitled to
vote at the 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. If no choice has been specified on your returned proxy
card, the shares will be voted FOR the election of the Board of Directors to
serve until the next Annual Meeting of Stockholders and until their successors
are elected and qualified, FOR the approval of an amendment to the Company's
1995 Long Term Incentive and Share Award Plan and FOR the ratification of the
appointment of Ernst & Young LLP as the independent auditors of the Company for
the fiscal year ending December 31, 2002. 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
Nine directors are to be elected at the Meeting, each director to hold
office until the next Annual Meeting of Stockholders and until his or her
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. Those persons elected to
serve as directors of the Company will also be elected by the Company to serve
as directors of Atlas Air, Inc.
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 nine 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 or her with the Company and
his or her principal occupation during the past five years.
Linda Chowdry, 53, has been a member of our Board of Directors since
February 9, 2001. She is the widow of Michael Chowdry, the Company's founder.
She is President of the Chowdry Family Foundation, a non-profit organization and
serves on the Board of Directors of the Aspen Institute, Colorado Academy, a
private school, and Horizons, a philanthropic group aiding at-risk children.
Lawrence W. Clarkson, 63, 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.
Richard A. Galbraith, 63, has been a member of our Board of Directors since
June 4, 2001. He was Treasurer of British Airways, from 1983 until his
retirement in 1998, with responsibility for creating a professional treasury and
tax organization capable of handling and assessing the risks and needs of a
major international airline emerging from the public sector into the private
sector. He also served as deputy chairman of the British Airways pension funds
and was a director of British Airways offshore captive Bermuda insurance
company. Prior to joining British Airways, Mr. Galbraith worked as treasurer and
subsequently manager of oil and financial services from 1971 to 1983 for P&O
Group. He qualified as a chartered accountant with Peat Marwick Mitchell in
London and is a fellow of the Association of Corporate Treasurers.
Stephen A. Greene, 61, has been a member of our Board of Directors since
February 9, 2001. He has been a partner of the New York based law firm of Cahill
Gordon & Reindel since 1972, which law firm has represented the Company since
1994. He also serves as a director of The Transportation Group (Capital) Ltd.
David K.P. Li, 62, 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, Pacific
Century Cyberworks Limited, New World Infrastructure Limited, PowerGen Plc., San
Miguel Brewery Hong Kong Limited, Sime Darby Berhad, SCMP Group Ltd. 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, Lafarge, PowerGen and Rolls-Royce Plc.
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James T. Matheny, 62, has been President and Chief Operating Officer since
January 2001 and a member of our Board of Directors since October, 2000. From
February 1999 to January 2001, he was Executive Vice President -- Operations
Development of Atlas Air, Inc. From December 1992 to February 1999 he served as
Senior Vice President -- Operations of Atlas Air, Inc. 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.
Brian H. Rowe, 70, has been Chairman of the Board of Directors since
January 2001 and 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. and serves as a director of Textron, B/E Aerospace and Acterna
Corporation.
Richard H. Shuyler, 55, has been Chief Executive Officer since January 2001
and a member of our Board of Directors since March 1995. From February 1998
until January 2001, Mr. Shuyler was Atlas Air, Inc.'s Executive Vice
President -- Strategic Planning and Treasurer. From June 1994 to February 1998,
he was Senior Vice President -- Finance, Chief Financial Officer and Treasurer
of Atlas Air, Inc. 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. He also serves on the Board of
Trustees of Colorado Academy and on the Board of Directors of the Air Transport
Association.
Ronald B. Woodard, 59, has been a member of our Board of Directors since
June 4, 2001. He was President of the Boeing Commercial Airline Group of The
Boeing Company from 1995 to 1998 with responsibility for marketing and launching
Boeing's 777-300, 757-300, 767-400 and 737-900 aircraft, as well as Boeing's
initiation into the executive business jet marketplace through launching of the
737 Business Jet. From 1991 to 1994, he served as Vice President and General
Manager of the Renton Division of Boeing responsible for the design, development
and production of all Boeing narrow-bodied aircraft. He previously held various
management and executive positions with Boeing after he joined the company in
1966 as a structural engineer. Since his retirement from Boeing in 1998, he
founded and is currently President, Chief Executive Officer and Director of
MagnaDrive Corporation, engaged in creating new engine technology applications
for industrial equipment. Mr. Woodard currently serves on the board of directors
of Coinstar, Inc., and he served on the board of directors of Burlington
Northern Santa Fe Railroad from 1995 to 2001. He is chairman of the Seattle
Symphony Orchestra and Trustee of the University of Puget Sound and is a Fellow
of the Royal Aeronautical Society.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THE ELECTION OF EACH NOMINEE FOR
DIRECTOR NAMED ABOVE.
3
EXECUTIVE OFFICERS
The following table sets forth as of the date hereof the executive officers
of Atlas Air Worldwide Holdings, Inc.
NAME POSITION(S)
---- -----------
Richard H. Shuyler........................... Chief Executive Officer
James T. Matheny............................. President and Chief Operating Officer
Senior Vice President and Chief Financial
Douglas A. Carty............................. Officer
Fred L. deLeeuw.............................. Senior Vice President, Strategic Planning
Thomas G. Scott.............................. Senior Vice President and General Counsel
For biographical information about Messrs. Shuyler and Matheny see
"Information With Respect to Nominees."
Douglas A. Carty, 45, has been Senior Vice President and Chief Financial
Officer since July 2001. Prior to his employment with us and since 1990, Mr.
Carty was employed with Canadian Airlines, where he served in a variety of
positions, including, Senior Vice President and Chief Financial Officer. Mr.
Carty also serves as a non-executive Chairman of the Board of Exclamation Inc.,
a Canadian Company.
Fred L. deLeeuw, 51, has been Senior Vice President, Strategic Planning
since July 2001. From July 2000 to July 2001 Mr. deLeeuw was Atlas Air's Vice
President, Corporate Finance. From October 1997 until July 2000 Mr. deLeeuw
served as Director, Corporate Finance. Prior to his employment with us Mr.
deLeeuw was employed in a variety of positions with Vanguard Airlines, Northwest
Airlines, Continental Airlines, People Express and Texas International Airlines.
Thomas G. Scott, 52, 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 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.
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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 15, 2002 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 (the "Named
Executive Officers"), and (iv) all Directors and Named Executive Officers as a
group.
NUMBER OF SHARES PERCENT OF
OF COMMON STOCK OUTSTANDING
NAME BENEFICIALLY OWNED(1) SHARES
---- --------------------- -----------
Michael A. Chowdry Marital Trust(2)......................... 16,935,501 44%
Richard H. Shuyler.......................................... 123,490 *
James T. Matheny............................................ 153,264 *
Douglas A. Carty............................................ -- *
Fred L. deLeeuw............................................. 28,126 *
Thomas G. Scott............................................. 62,813 *
Berl Bernhard............................................... 21,742 *
Linda Chowdry(3)............................................ 3,940 *
Lawrence W. Clarkson........................................ 13,217 *
Richard A. Galbraith........................................ 5,461 *
Stephen A. Greene........................................... 5,728 *
David K.P. Li............................................... 20,647 *
Brian Rowe.................................................. 34,540 *
Ronald Woodard.............................................. 3,000 *
All Directors and Executive Officers as a Group............. 17,411,469 45%
Mellon Financial Corporation(4)............................. 4,918,256 13%
Wellington Management Company, LLP(4)....................... 2,398,750 6%
---------------
* 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 15, 2002: Estate of Michael A. Chowdry -- 503,440
shares; Mr. Shuyler -- 117,711 shares; Mr. Matheny -- 149,125 shares; Mr.
deLeeuw -- 28,126 shares; Mr. Scott -- 62,813 shares; Mr. Carty -- 0 shares;
Mr. Bernhard -- 10,500 shares; Ms. Chowdry -- 3,000 shares; Mr.
Clarkson -- 12,000 shares; Mr. Galbraith -- 3,000 shares; Mr.
Greene -- 3,000 shares; Mr. Li -- 12,000 shares; Mr. Rowe -- 31,250 shares;
Mr. Woodard -- 3,000 shares; and all directors and executive officers as a
group -- 938,965 shares.
(2) Linda Chowdry, John Blue and the Atlantic Trust Company, N.A., located in
Denver, Colorado, are the trustees (the "Trustees") of the Michael A.
Chowdry Marital Trust (the "Trust"). The Trust beneficially owned, as of
April 15, 2002, 16,935,501 shares of Common Stock representing 44.3% of the
outstanding Common Stock. This number of shares includes 1,755,000 shares of
Common Stock held by Chowdry, Inc. and 7,071,501 shares held by Chowdry
Limited Partnership. At April 15, 2002, Chowdry, Inc. beneficially owned
8,826,501 shares of Common Stock representing 23.1% of the outstanding
Common Stock, which includes shares held by the Chowdry Limited Partnership.
At April 15, 2002, Chowdry Limited Partnership, a Wyoming limited
partnership, beneficially owned 7,071,501 shares of Common Stock
representing 18.5% of the shares of Common Stock. The Trust has the sole
power to vote and dispose of 16,935,501 shares of Common Stock. The
Trustees, in their capacities as both Trustees and personal representatives
of the estate of Michael A. Chowdry, have shared power with each other to
vote and dispose of 17,496,843 shares of Common Stock. In addition to the
shares noted above, this number includes 561,342 shares of Common Stock held
by such estate, including exercisable and vested options to purchase 503,440
shares of Common
5
Stock. The Trust and the Trustees have these powers as to shares of Common
Stock owned by Chowdry, Inc. and Chowdry Limited Partnership because the
Trust owns 100% of the outstanding stock of Chowdry, Inc., which in turn
manages Chowdry Limited Partnership. Chowdry, Inc. and Chowdry Limited
Partnership have the sole power to vote and dispose of the Common Stock
beneficially owned by them. The Trust has informed the Company that the
Trust, Chowdry, Inc. and Chowdry Limited Partnership may transfer shares of
Common Stock to entities which are related to them and in which the Trustees
will continue to share the power to vote and dispose of the Common Stock.
(3) Does not include 17,496,843 shares of Common Stock as to which Ms. Chowdry
shares the power to vote and to dispose of as described in Note 2 above.
(4) These numbers are based upon currently available public information and
represents beneficial ownership as of December 31, 2001.
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors of Atlas Air Worldwide Holdings, Inc. held six
meetings during 2001. 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 2001 (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).
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 2001 consisted of Lawrence W.
Clarkson, Berl Bernhard, Linda Chowdry, Stephen A. Greene and Brian Rowe, held
three meetings during 2001. The Compensation Committee administers our and our
subsidiaries' 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 consisted of four outside directors in 2001, Ronald B.
Woodard, Lawrence W. Clarkson, Richard Galbraith and Brian Rowe, who were not
officers of or employees of the Company or its subsidiaries. These directors
are, in the opinion of the Board, "independent" (as defined under the standards
of New York Stock Exchange) of management and free of any relationship that
would interfere with their exercise of independent judgment as members of the
Audit Committee. The Audit Committee held three meetings during 2001. 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 receive 25% of their quarterly compensation 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.
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
6
the time of such election or appointment, and all non-employee directors receive
options to purchase 3,000 shares of Common Stock on August 16 of each year. In
addition, the Board of Directors, in its discretion, may grant additional
options to purchase Common Stock to non-employee directors upon such terms and
at such times as it may deem appropriate.
As Chairman of the Board and Chairman of the Executive Committee of the
Board of Directors, Brian Rowe receives annual compensation of $150,000. On
February 15, 2001, Mr. Rowe was granted (a) options to purchase 70,000 shares of
Common Stock at an exercise price of $28.85, the closing price on February 14,
2001, vesting on February 15, 2006, or earlier upon death, disability or
retirement; (b) options to purchase 15,000 shares at an exercise price of
$28.85, the closing price on February 14, 2001, vesting one quarter per year
beginning February 15, 2002, or earlier upon death, disability or retirement. On
February 8, 2002, Mr. Rowe was granted options to purchase 25,000 shares of
Common Stock at an exercise price of $10.68, vesting on February 8, 2007 or
earlier upon death, disability or retirement.
As a member of the Executive Committee of the Board of Directors, Linda
Chowdry receives annual compensation of $50,000.
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 2001 all filing requirements were met on a timely basis except that
due to changes in administrative personnel and the relocation of our offices
from Colorado to New York, Form 3s, 4s and 5s for certain of our officers and
directors were not filed on a timely basis as follows: Berl Bernhard, 2; Doug
Carty, 1; Linda Chowdry, 4; Lawrence Clarkson, 2; Fred deLeeuw, 1; Richard
Galbraith, 3; Stephen Greene, 3; David Li, 1; Brian Rowe, 3; Thomas Scott, 1;
Richard Shuyler, 1; Stuart Weinroth, 1 and Ronald Woodard, 3.
COMPENSATION COMMITTEE INTERLOCKS, INSIDER PARTICIPATION
AND CERTAIN TRANSACTIONS
The members of the Compensation Committee in 2001 were Messrs. Bernhard,
Clarkson, Greene, Rowe and Ms. Chowdry. Mr. Rowe was the Chairman of the Board
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 of approximately 5.9%. 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,
which loans were repaid in January 2001. As of December 31, 2001 the outstanding
balance of executive officer demand loans, including accrued interest, was
approximately $415,000.
Mr. Greene is a partner of the law firm Cahill Gordon & Reindel, which
rendered legal services to us in 2001 and is expected to provide legal services
to us in 2002.
Mr. Li is Chairman and Chief Executive of The Bank of East Asia, Limited,
which entered into a consulting agreement with the Company. The Bank of East
Asia, Limited receives an annual retainer pursuant to such agreement.
7
EXECUTIVE COMPENSATION
The following table sets forth, for 2001, 2000 and 1999, the compensation
of the Named Executive Officers for services rendered to the Company and its
subsidiaries in all capacities during each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
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
----------------- ---- --------- -------- --------------- ---------- ---------- ------------
Michael A. Chowdry............... 2001 $ 47,207 $ 38,624 $ 0 $ 0 0 $1,545,000
Chairman of the Board, Chief 2000 643,740 439,934 56,763 183,761 56,250 0
Executive Officer and 1999 643,739 143,140 60,011 170,416 56,250 0
President(4)
Richard H. Shuyler............... 2001 372,101 78,750 17,099 78,750 205,309 0
Chief Executive Officer -- 2000 315,351 106,785 5,265,413(6) 89,204 122,500 0
and Director(5) 1999 314,073 69,485 17,099 82,736 22,500 0
James T. Matheny................. 2001 255,609 39,000 26,369 39,000 106,875 0
President and Chief Operating 2000 281,250 96,104 60,755 72,272 22,500 0
Officer(7) 1999 272,035 68,790 1,322,086 52,136 60,000 0
Thomas G. Scott.................. 2000 226,187 32,725 69,725 26,775 45,000 0
Senior Vice President -- 2000 218,750 98,666 333,765 56,212 15,000 0
General Counsel(8) 1999 196,875 53,504 29,355 26,068 15,000 0
Fred L. deLeeuw.................. 2001 209,911 39,068 34,847 31,965 60,000 0
Senior Vice President -- 2000 168,374 71,298 211,578 40,048 67,500 0
Strategic Planning(9) 1999 106,907 8,985 0 0 0 0
Douglas A. Carty................. 2001 96,396 22,275 154,214 18,220 105,000 0
Senior Vice President and
Chief Financial Officer(10)
---------------
(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 units, which vest on December 31, 2002,
generally subject to continued employment with the Company through that
date: Mr. Shuyler -- 7,374 shares; Mr. Matheny -- 3,652 shares; Mr.
Scott -- 2,507 shares; Mr. deLeeuw -- 2,993 shares; and Mr. Carty -- 1,706
shares.
(4) On January 24, 2001, a private jet piloted by Mr. Chowdry crashed,
resulting in his death and the death of a passenger. A death benefit of
$1,545,000 was paid to Mr. Chowdry's estate under his employment contract.
(5) 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. Mr. Shuyler served as Executive Vice
President -- Strategic Planning, Treasurer until January, 2001, at which
time he assumed his current position as Chief Executive Officer.
(6) This amount includes options exercised by Rubicon Investments, LLC, a
limited liability company, controlled by Mr. Shuyler and his wife. Such
options were transferred to Rubicon by Mr. Shuyler prior to exercise.
(7) Mr. Matheny served as Senior Vice President -- Operations until February
22, 1999. Mr. Matheny served as Executive Vice President -- Operations
Development until January, 2001, at which time he assumed his current
position as President and Chief Operating Officer.
(8) Mr. Scott commenced employment with the Company on June 24, 1998.
8
(9) Mr. deLeeuw commenced employment with the Company on October 29, 1997. Mr.
deLeeuw served as Director of Corporate Finance and as Vice President,
Corporate Finance until July 2000, at which time he assumed his current
position as Senior Vice President, Strategic Planning.
(10) Mr. Carty commenced employment with Atlas Air, Inc. on August 7, 2001.
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, 2001.
OPTION GRANTS IN 2001
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 2001 PER SHARE DATE 5% 10%
---- ---------- ------------- --------- ---------- ------------ ------------
Michael A. Chowdry....... -- -- -- -- -- --
Richard H. Shuyler....... 22,500 1.5% $29.65 3/5/11 $ 419,551 $1,063,225
182,809 12.1% 14.85 8/2/11 1,707,269 4,326,554
James T. Matheny......... 22,500 1.5% 29.65 3/5/11 419,551 1,063,225
84,375 5.6% 14.85 8/2/11 787,985 1,996,909
Thomas G. Scott.......... 15,000 1.0% 29.65 3/5/11 279,701 708,817
30,000 2.0% 14.85 8/2/11 280,173 710,012
Fred L. deLeeuw.......... 11,250 0.7% 29.65 3/5/11 209,776 531,613
48,750 3.2% 14.85 8/2/11 455,280 1,153,770
Douglas A. Carty......... 30,000 2.0% 14.85 8/2/11 280,173 710,012
75,000 5.0% 14.63 8/6/11 690,055 1,748,734
---------------
(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 our stock price. We did not use an alternative
formula for this valuation as we are not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors. In fact, we disavow the ability of this or any other
valuation model to predict or estimate our 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, 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
Michael A. Chowdry... -- $ -- 503,440 -- $ -- $ --
Richard H. Shuyler... -- -- 86,305 271,872 -- 9,140
James T. Matheny..... -- -- 117,719 180,938 -- 4,219
Thomas G. Scott...... -- -- 56,875 89,375 -- 1,500
Fred L. deLeeuw...... -- -- 14,063 113,437 -- 2,438
Douglas A. Carty..... -- -- -- 105,000 -- 21,750
9
EMPLOYMENT AGREEMENTS
Mr. Michael A. Chowdry entered into an employment agreement with Atlas Air,
Inc. that provided 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. On January 24, 2001, a private jet piloted by Mr.
Chowdry crashed resulting in his death and the death of a passenger. Pursuant to
the employment agreement, upon Mr. Chowdry's death, his estate is entitled to
receive an annual base salary payment of $515,000 per year in semi-monthly
installments over a three year period.
Atlas Air, Inc. has entered into employment agreements with Mr. Shuyler and
Mr. Matheny, which will expire on January 31, 2003 and June 30, 2002,
respectively, subject to annual renewal thereafter. Atlas Air, Inc. entered into
an employment agreement with Mr. Scott on June 22, 1998, which will expire on
July 1, 2003. Atlas Air, Inc. entered into an employment agreement with Mr.
Carty on August 7, 2001, which will expire on August 6, 2006. Atlas Air, Inc.
entered into an employment agreement with Mr. deLeeuw on April 5, 2000, which
will expire on March 31, 2005. The employment agreements with Messrs. Shuyler,
Matheny, Carty, Scott and deLeeuw provide for annual base salaries of $525,000,
$260,000, $270,000, $238,000 and $236,750, 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 Atlas Air, Inc. Each such agreement
will be subject to termination by Atlas Air, Inc. with or without cause. If such
employment agreements are terminated by Atlas Air, Inc. without cause, Messrs.
Matheny, Scott, deLeeuw and Carty are entitled to receive a termination payment
equal to eighteen 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
We do not use predetermined or defined performance targets or a limited set
of criteria in establishing total compensation for our CEO and executive
officers. Our executive compensation philosophy is designed to align the
interests of our stockholders, CEO and executive officers, while promoting
teamwork among our CEO and executive officers. The Board of Directors and the
Compensation Committee, which administers our 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 our goals.
Profit Sharing. Atlas Air, Inc.'s Profit Sharing Plan provides for
payments to eligible employees in semiannual distributions based upon Atlas Air,
Inc.'s pretax profits. For the year 2001, 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 2001, every officer of Atlas Air,
Inc. who had completed one year of service received the same profit sharing pro
rata distribution as all other eligible employees.
Stock Options. Our 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 share units, 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 our financial and operational goals and increase
shareholder value. Our bonus arrangements for our executive officers are
intended to make a major portion of each executive officer's compensation
dependent on our overall performance. Such bonuses are also
10
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 us.
In March 2001, the Independent Subcommittee of the Compensation Committee
granted deferred compensation to executive officers in the form of restricted
share units, which vest on December 31, 2002, generally subject to continued
employment through that date.
After reviewing the performance of our executive officers during 2001
against Board approved financial plans of the Company, as well as individual
executive objectives, the Independent Subcommittee of the Compensation Committee
determined to grant cash bonuses to executive officers in amounts based on a
range of 14.46% to 23.11% of such officers' base salaries.
In determining total compensation for 2001, the Committee considered the
performance of each individual, his level of responsibility within the Company,
industry compensation levels, the officer's longevity in office and prior
salary, each officer's performance as a team member and our financial
performance. However, no mathematical weighing formulae were applied with
respect to any of these factors.
CEO. The Committee's compensation philosophy applies in all respects to
the Company's Chief Executive Officer. Mr. Chowdry's salary in 2001 totaled
$47,207 and was determined by his employment agreement. Mr. Shuyler's salary in
2001 totaled $372,101 and was determined by his employment agreement. Mr.
Shuyler's base salary is commensurate with the median base salary of chief
executive officers of similarly situated airline companies. Mr. Shuyler was
awarded a bonus of $78,750 in connection with, and based upon his contribution
to the Company. In 2001, the Committee granted Mr. Shuyler a stock option
covering 205,309 shares of Common Stock to provide an additional performance
incentive and to recognize his outstanding performance and leadership.
Deductibility of Compensation Expenses. Section 162(m) of the Internal
Revenue Code generally disallows a tax deduction to a public corporation for
compensation in excess of $1 million paid to the corporation's chief executive
officer and the four other most highly compensated executive officers. Section
162(m) provides that qualifying performance based compensation will not be
subject to the deduction limit if certain requirements are met. Executive
compensation is structured to avoid limitations on deductibility where this
result can be achieved consistent with our compensation goals.
Lawrence W. Clarkson, Chairman
Berl Bernhard
Linda Chowdry
Stephen A. Greene
Brian Rowe
11
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]
TOTAL RETURN BETWEEN 8/9/95 AND 12/31/01
-----------------------------------------------------------------------------------------------------------------------------
08/09/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-----------------------------------------------------------------------------------------------------------------------------
Atlas Air** $100 $ 69.792 $198.958 $100.000 $203.906 $171.484 $203.906 $ 91.563
S&P 500* $100 $111.143 $136.664 $182.264 $234.352 $283.667 $257.838 $236.292
S&P Airlines* $100 $ 97.385 $107.036 $180.339 $174.930 $172.801 $257.776 $180.794
* Based on Close Price on August 9, 1995.
** Based on IPO of $10.67 on August 10, 1995, as restated to reflect the 3-for-2
stock split which occurred on January 25, 1999.
+ 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.
12
ITEM 2. APPROVAL OF AMENDMENT TO THE 1995 LONG TERM INCENTIVE AND SHARE AWARD
PLAN
The Board of Directors is recommending an amendment to the 1995 Long Term
Incentive and Share Award Plan (the "1995 Plan"), attached hereto as Appendix A,
to increase the number of shares of Common Stock authorized for the granting of
awards from 5,900,000 to 8,900,000. 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 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 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 Plan. The portion of the 1995 Plan applicable to
employees is administered by the Compensation Committee. 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 Plan. The
Compensation Committee also has authority to waive conditions relating to an
award or accelerate vesting of awards. The 1995 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 5,900,000 shares of Common Stock have been reserved for
issuance under the 1995 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 8,900,000. No
eligible employee may receive options or stock appreciation rights under the
1995 Plan for more than 300,000 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 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 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 PLAN.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board has reviewed and discussed our audited
financial statements with management. The Audit Committee has discussed with
Arthur Andersen LLP, our independent auditors for 2001, the matters required to
be discussed by Statement on Auditing Standards 61. The Audit Committee also has
received the written disclosures and the letter from the independent accountants
required by Independence Standards Board Standard No. 1 (Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees) and has
discussed with Arthur Andersen LLP the independence of such independent
accounting firm. The Committee has also considered whether the independent
auditors' provision of information technology and other non-audit services to us
is compatible with the auditors' independence.
Based on its review and discussions referred to in the preceding paragraph,
the Audit Committee recommended to the Board that the audited financial
statements for the fiscal year ended December 31, 2001 be included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2001.
Audit Committee
Ronald B. Woodard, Chairman
Lawrence W. Clarkson
Richard Galbraith
Brian Rowe
13
FEES FOR ALL SERVICES PROVIDED BY ARTHUR ANDERSEN LLP FOR FISCAL YEAR 2001 ARE
AS FOLLOWS:
Audit Fees. The aggregate fees billed for professional services rendered
for the audit of our annual financial statement for the fiscal year ended
December 31, 2001 and for the reviews of the financial statements included in
our Quarterly Reports on Form 10-Q for that fiscal year were approximately
$391,000.
Financial Information Systems Design and Implementation Fees
Arthur Andersen did not render professional services relating to financial
information systems design and implementation for the fiscal year ended December
31, 2001.
All Other Fees
The aggregate fees billed by Arthur Andersen for services rendered to the
Company, other than the services described above under "Audit Fees" for the
fiscal year ended December 31, 2001, were approximately $821,000. The vast
majority of these fees relate to professional tax services.
CHANGE IN INDEPENDENT PUBLIC ACCOUNTANTS
On April 25, 2002, based upon the recommendation of the Audit Committee,
the Board of Directors decided to no longer engage Arthur Andersen LLP ("Arthur
Andersen") as the Company's independent public accountant and engaged Ernst &
Young LLP ("Ernst & Young") to serve as the Company's independent public
accountants for 2002.
The Arthur Andersen audit report on the consolidated financial statements
of the Company for the past two years, did not contain an adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope or accounting principles. During the two most recent fiscal years, and the
interim period through the date of the Board's decision, there were no
disagreements between the Company and Arthur Andersen on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedures, which, if not resolved to the satisfaction of Arthur
Andersen, would have caused them to make reference to the subject matter of the
disagreement in connection with their report on the Company's consolidated
financial statement for 2001, and there were no reportable events, as set forth
in Item 304(a)(1)(v) of SEC Regulation S-K.
During the two most recent fiscal years and through the date of the Board's
decision, the Company did not consult Ernst & Young with respect to the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the Company's consolidated financial statements, or any other matters or
reportable events set forth in Items 304(a)(2)(i) and (ii) of SEC Regulation
S-K.
ITEM 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANT
The Board of Directors, based upon the recommendation of its Audit
Committee, has appointed Ernst & Young as independent public accountants of the
Company with respect to its operations for the year 2002. In taking this action,
the members of the Board and the Audit Committee considered Ernst & Young's
independence with respect to the services to be performed and its general
reputation for adherence to professional auditing standards.
There will be presented at the Annual Meeting a proposal for the
ratification of the appointment of Ernst & Young, which the Board of Directors
believes is advisable and in the best interest of the stockholders. If the
appointment of Ernst & Young is not ratified by the affirmative vote of a
majority of the shares of common stock represented at the Annual Meeting the
appointment of independent public accountants will be reconsidered by the Board
of Directors.
14
Representatives of Ernst & Young will be present at the Annual Meeting to
make a statement if they desire to do so. They will also be available to answer
appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY
FOR THE YEAR 2002.
STOCKHOLDER PROPOSALS
Under the rules of the SEC, if a stockholder wants us to include a proposal
in our Proxy Statement and form of proxy for presentation at our 2003 Annual
Meeting of Stockholders, the proposal must be received by us, Attention: David
Brictson, Secretary, at our principal executive offices by January 3, 2003. Any
such proposal, including any accompanying supporting statement, may not exceed
500 words.
Under our By-laws, and as permitted by the rules of the SEC, no business
may be brought before the annual meeting except as specified in the notice of
the meeting (which includes stockholder proposals that we are required to set
forth in its proxy statement under SEC Rule 14a-8) or as otherwise brought
before the meeting by or at the direction of the Board or by a stockholder
entitled to vote who has delivered notice to us (containing certain information
specified in our By-laws) not less than 70 nor more than 90 days prior to the
first anniversary of the preceding year's annual meeting. These requirements are
separate and apart from and in addition to the SEC's requirements that a
stockholder must meet to have a stockholder proposal included in our proxy
statement under SEC Rule 14a-8.
On request, a copy of the full text of the By-law provisions discussed
above may be obtained by writing to our principal office: Atlas Air Worldwide
Holdings, Inc., 2000 Westchester Avenue, Purchase, New York 10577-2543,
Attention: Secretary.
The Board is not aware of any matters that it expects to bring before the
2002 Annual Meeting other than those referred to in this Proxy Statement. If any
other matter should come before the Annual Meeting, the persons named in the
accompanying proxy intend to vote the proxies in accordance with their best
judgment.
The chairman of the meeting may refuse to allow the transaction of any
business not presented beforehand, or to acknowledge the nomination of any
person not made in compliance with the foregoing procedures.
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.
By Order of the Board of Directors,
/s/ DAVID BRICTSON
DAVID BRICTSON
Secretary
Dated: May 3, 2002
15
APPENDIX A
ATLAS AIR WORLDWIDE HOLDINGS, INC.
1995 LONG TERM INCENTIVE AND SHARE AWARD PLAN
(INCLUDING AMENDMENTS ONE THROUGH EIGHT)
SECTION PAGE
------- ----
1. Purposes.................................................... A-1
2. Definitions................................................. A-1
3. Administration.............................................. A-3
(a) Authority of the Committee.............................. A-3
(b) Manner of Exercise of Committee Authority............... A-4
(c) Limitation of Liability................................. A-4
4. Shares Subject to the Plan.................................. A-4
5. Specific Terms of Awards.................................... A-5
(a) General................................................. A-5
(b) Options................................................. A-5
(c) SARs.................................................... A-6
(d) Restricted Shares....................................... A-6
(e) Restricted Share Units.................................. A-7
(f) Performance Shares and Performance Units................ A-7
(g) Dividend Equivalents.................................... A-8
(h) Other Share-Based Awards................................ A-8
6. Certain Provisions Applicable to Awards..................... A-8
(a) Stand-Alone, Additional, Tandem and Substitute Awards... A-8
(b) Terms of Awards......................................... A-8
(c) Form of Payment Under Awards............................ A-9
(d) Nontransferability...................................... A-9
7. Director's Options.......................................... A-9
(a) Annual Grant............................................ A-9
(b) Market Value............................................ A-9
(c) Termination of Service.................................. A-9
(d) Time and Method of Exercise............................. A-10
(e) Nontransferability...................................... A-10
(f) Adjustments............................................. A-10
(g) Directors' Fees......................................... A-10
(h) Administration.......................................... A-10
(i) Discretionary Grants.................................... A-10
8. General Provisions.......................................... A-11
(a) Compliance with Legal and Trading Requirements.......... A-11
(b) No Right to Continued Employment or Service............. A-11
(c) Taxes................................................... A-11
(d) Changes to the Plan and Awards.......................... A-11
(e) No Rights to Awards; No Shareholder Rights.............. A-11
(f) Unfunded Status of Awards............................... A-11
(g) Nonexclusivity of the Plan.............................. A-12
(h) Not Compensation for Benefit Plans...................... A-12
(i) No Fractional Shares.................................... A-12
(j) Governing Law........................................... A-12
(k) Effective Date; Plan Termination........................ A-12
(l) Titles and Headings..................................... A-12
A-1
ATLAS AIR WORLDWIDE HOLDINGS, INC.
1995 LONG TERM INCENTIVE AND SHARE AWARD PLAN
(INCLUDING AMENDMENTS ONE THROUGH EIGHT)
1. Purposes. The purposes of the 1995 Long Term Incentive and Share Award
Plan are to advance the interests of Atlas Air Worldwide Holdings, Inc. and
its shareholders by providing a means to attract, retain, and motivate
employees and directors of the Company upon whose judgment, initiative and
efforts the continued success, growth and development of the Company is
dependent.
2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a
participating employer under the Plan, provided that the Company directly
or indirectly owns at least 20% of the combined voting power of all classes
of stock of such entity or at least 20% of the ownership interests in such
entity.
(b) "Award" means any Option, SAR, Restricted Share, Restricted Share
Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other
Share-Based Award granted to an Eligible Employee under the Plan.
(c) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(d) "Beneficiary" means the person, persons, trust or trusts which
have been designated by such Eligible Employee in his or her most recent
written beneficiary designation filed with the Company to receive the
benefits specified under this Plan upon the death of the Eligible Employee,
or, if there is no designated Beneficiary or surviving designated
Beneficiary, then the person, persons, trust or trusts entitled by will or
the laws of descent and distribution to receive such benefits.
(e) "Board" means the Board of Directors of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to
include successor provisions thereto and regulations thereunder.
(g) "Committee" means the Board, the Compensation Committee of the
Board, or such other Board committee as may be designated by the Board to
administer the Plan; provided, however, that the Compensation Committee or
such other Board Committee as may be designated by the Board to administer
the Plan shall consist of two or more directors of the Company, each of
whom, to the extent required, is a "Non-Employee Director" within the
meaning of Rule 16b-3 under the Exchange Act.
(h) "Company" means Atlas Air Worldwide Holdings, Inc., a corporation
organized under the laws of Delaware, or any successor corporation.
(i) "Director" means a non-employee member of the Board.
(j) "Director's Option" means an NQSO granted to a Director under
paragraph (a) of Section 7 or Shares delivered to a Director in payment of
Director's fees under paragraph (g) of Section 7.
(k) "Dividend Equivalent" means a right, granted under Section 5(g),
to receive cash, Shares, or other property equal in value to dividends paid
with respect to a specified number of Shares. Dividend Equivalents may be
awarded on a free-standing basis or in connection with another Award, and
may be paid currently or on a deferred basis.
(l) "Eligible Employee" means any employee of the Company or its
Subsidiaries and Affiliates, including any director who is an employee.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act
shall be deemed to include successor provisions thereto and regulations
thereunder.
A-2
(n) "Fair Market Value" means, with respect to Shares or other
property, the fair market value of such Shares or other property determined
by such methods or procedures as shall be established from time to time by
the Committee. Unless otherwise determined by the Committee in good faith,
the Fair Market Value of Shares as of any given date prior to the existence
of a public market for the Company's Shares shall mean the Company's book
value. Thereafter, unless otherwise determined by the Committee in good
faith, the Fair Market Value of Shares shall mean the mean between the high
and low selling prices per Share on the immediately preceding date (or, if
the Shares were not traded on that day, the next preceding day that the
Shares were traded) on the principal exchange on which the Shares are
traded, as such prices are officially quoted on such exchange.
(o) "ISO" means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
(p) "NQSO" means any Option that is not an ISO.
(q) "Option" means a right, granted under Section 5(b) or Section 7,
to purchase Shares.
(r) "Other Share-Based Award" means a right, granted under Section
5(h), that relates to or is valued by reference to Shares.
(s) "Participant" means an Eligible Employee or Director who has been
granted an Award or Director's Option under the Plan.
(t) "Performance Share" means a performance share granted under
Section 5(f).
(u) "Performance Unit" means a performance unit granted under Section
5(f).
(v) "Plan" means this 1995 Long Term Incentive and Share Award Plan.
(w) "Restricted Shares" means an Award of Shares under Section 5(d)
that may be subject to certain restrictions and to a risk of forfeiture.
(x) "Restricted Share Unit" means a right, granted under Section 5(e),
to receive Shares or cash at the end of a specified deferral period.
(y) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(z) "SAR" or "Share Appreciation Right" means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date
of exercise of the right, with payment to be made in cash, Shares, or
property as specified in the Award or determined by the Committee.
(aa) "Shares" mean common stock, $.01 par value per share, of the
Company.
(bb) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns
shares possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
3. Administration.
(a) Authority of the Committee. Except as provided in Section 7, the
Plan shall be administered by the Committee and the Committee shall have
full and final authority to the following actions, in each case subject to
and consistent with the provisions of the Plan:
(i) to select Eligible Employees to whom Awards may be granted;
(ii) to designate Affiliates;
(iii) to determine the type or types of Awards to be granted to
each Eligible Employee;
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(iv) to determine the type and number of Awards to be granted, the
number of Shares to which an Award may relate, the terms and conditions
of any Award granted under the Plan (including, but not limited to, any
exercise price, grant price, or purchase price, and any bases for
adjusting such exercise, grant or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating
to transferability or forfeiture, exercisability, or settlement of an
Award, and waiver or accelerations thereof, and waivers of performance
conditions relating to an Award, based in each case on such
considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;
(v) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Shares, other Awards, or other property, or an
Award may be cancelled, forfeited, exchanged, or surrendered;
(vi) to determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, or other property payable with
respect to an Award will be deferred either automatically, at the
election of the Committee, or at the election of the Eligible Employee;
(vii) to prescribe the form of each Award Agreement, which need not
be identical for each Eligible Employee;
(viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement, or other instrument
hereunder;
(x) to accelerate the exercisability or vesting of all or any
portion of any Award or to extend the period during which an Award is
exercisable; and
(xi) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.
(b) Manner of Exercise of Committee Authority. The Committee shall
have sole discretion in exercising its authority under the Plan. Any action
of the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Company, Subsidiaries, Affiliates,
Eligible Employees, any person claiming any rights under the Plan from or
through any Eligible Employee, and shareholders. The express grant of any
specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate to officers or managers of the
Company or any Subsidiary or Affiliate the authority, subject to such terms
as the Committee shall determine, to perform administrative functions and,
with respect to Awards granted to persons not subject to Section 16 of the
Exchange Act, to perform such other functions as the Committee may
determine, to the extent permitted under Rule 16b-3 (if applicable) and
applicable law.
(c) Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or other employee of the
Company or any Subsidiary or Affiliate, the Company's independent certified
public accountants, or other professional retained by the Company to assist
in the administration of the Plan. No member of the Committee, nor any
officer or employee off the Company acting on behalf of the Committee,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of
the Committee and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such action, determination, or
interpretation.
4. Shares Subject to the Plan.
(a) Subject to adjustment as provided in Section 4(c) hereof, the
total number of Shares reserved for issuance in connection with Awards and
Director's Options under the Plan shall be 5,900,000. No Award or
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Director's option may be granted if the number of Shares to which such
Award or Director's option relates, when added to the number of Shares
previously issued under the Plan, exceeds the number of Shares reserved
under the preceding sentence. If any Awards or Director's Options are
forfeited, cancelled, terminated, exchanged or surrendered or such Award or
Director's Option is settled in cash or otherwise terminates without a
distribution of Shares to the Participant, any Shares counted against the
number of Shares reserved and available under the Plan with respect to such
Award or Director's Option shall, to the extent of any such forfeiture,
settlement, termination, cancellation, exchange or surrender, again be
available for Awards or Director's Options under the Plan; provided,
however, that in the case of forfeiture, cancellation, exchange or
surrender of Restricted Shares or Restricted Share Units with respect to
which dividends or Dividend Equivalents have been paid or accrued, such
number of Shares shall not be available for Awards or Director's Options
unless, in the case of Shares with respect to which dividends or Dividend
Equivalents were accrued but unpaid, such dividends and Dividend
Equivalents are also forfeited, cancelled, exchanged or surrendered. Upon
the exercise of any Award granted in tandem with any other Awards, such
related Awards shall be cancelled to the extent of the number of Shares as
to which the Award is exercised. Subject to adjustment as provided in
Section 4(c) hereof, the maximum number of Shares with respect to which
options or SARs may be granted during a calendar year to any Eligible
Employee under this Plan shall be 300,000 Shares.
(b) Any Shares distributed pursuant to an Award or Director's Option
may consist, in whole or in part, of authorized and unissued Shares or
treasury Shares including Shares acquired by purchase in the open market or
in private transactions.
(c) In the event that the Committee shall determine that any dividend
in Shares, recapitalization, Share split, reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase, or share
exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of Eligible Employees under the Plan, then the
Committee shall make such equitable changes or adjustments as it deems
appropriate and, in such manner as it may deem equitable, adjust any or all
of (i) the number and kind of shares which may thereafter be issued under
the Plan, (ii) the number and kind of shares, other securities or other
consideration issued or issuable in respect of outstanding Awards, and
(iii) the exercise price, grant price, or purchase price relating to any
Award; provided, however, in each case that, with respect to ISOs, such
adjustment shall be made in accordance with Section 424(h) of the Code,
unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the
criteria and performance objectives included in, Awards in recognition of
unusual or non-recurring events (including, without limitation, events
described in the preceding sentence) affecting the Company or any
Subsidiary or Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, or in response to changes in applicable laws,
regulations, or accounting principles; provided, however, that, if an Award
Agreement specifically so provides, the Committee shall not have discretion
to increase the amount of compensation payable under the Award to the
extent such an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the
Code and the regulations thereunder.
5. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 5. In addition, the Committee may impose on any Award
or the exercise thereof, at the date of grant or thereafter (subject to
Section 8(d)), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including
terms regarding forfeiture of Awards or continued exercisability of Awards
in the event of termination of employment by the Eligible Employee.
(b) Options. The Committee is authorized to grant Options, which may
be NQSOs or ISOs, to Eligible Employees on the following terms and
conditions:
(i) Exercise Price. The exercise price per Share purchasable under
an Option shall be determined by the Committee, and the Committee may,
without limitation, set an exercise price that is based upon achievement
of performance criteria if deemed appropriate by the Committee.
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(ii) Time and Method of Exercise. The Committee shall determine at
the date of grant or thereafter the time or times at which an Option may
be exercised in whole or in part (including, without limitation, upon
achievement of performance criteria if deemed appropriate by the
Committee), the methods by which such exercise price may be paid or
deemed to be paid (including, without limitation, broker-assisted
exercise arrangements), the form of such payment (including, without
limitation, cash, Shares, notes or other property), and the methods by
which Shares will be delivered or deemed to be delivered to Eligible
Employees.
(iii) ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code,
including but not limited to the requirement that no ISO shall be
granted more than ten years after the earlier of the date of adoption or
shareholder approval of the Plan.
(c) SARs. The Committee is authorized to grant SARs (Share
Appreciation Rights) to Eligible Employees on the following terms and
conditions:
(i) Right to Payment. An SAR shall confer on the Eligible Employee
to whom it is granted a right to receive with respect to each Share
subject thereto, upon exercise thereof, the excess of (1) the Fair
Market Value of one Share on the date of exercise (or, if the Committee
shall so determine in the case of any such right, the Fair Market Value
of one Share at any time during a specified period before or after the
date of exercise) over (2) the exercise price of the SAR as determined
by the Committee as of the date of grant of the SAR (which, in the case
of an SAR granted in tandem with an option, shall be equal to the
exercise price of the underlying Option).
(ii) Other Terms. The Committee shall determine, at the time of
grant or thereafter, the time or times at which an SAR may be exercised
in whole or in part, the method of exercise, method of settlement, form
of consideration payable in settlement, method by which Shares will be
delivered or deemed to be delivered to Eligible Employees, whether or
not an SAR shall be in tandem with any other Award, and any other terms
and conditions of any SAR. Unless the Committee determines otherwise, an
SAR (1) granted in tandem with an NQSO may be granted at the time of
grant of the related NQSO or at any time thereafter or (2) granted in
tandem with an ISO may only be granted at the time of grant of the
related ISO.
(d) Restricted Shares. The Committee is authorized to grant
Restricted Shares to Eligible Employees on the following terms and
conditions:
(i) Issuance and Restrictions. Restricted Shares shall be subject
to such restrictions on transferability and other restrictions, if any,
as the Committee may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under
such circumstances (including, without limitation, upon achievement of
performance criteria if deemed appropriate by the Committee), in such
installments, or otherwise, as the Committee may determine. Except to
the extent restricted under the Award Agreement relating to the
Restricted Shares, an Eligible Employee granted Restricted Shares shall
have all of the rights of a shareholder including, without limitation,
the right to vote Restricted Shares and the right to receive dividends
thereon.
(ii) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon termination of employment
during the applicable restriction period, Restricted Shares and any
accrued but unpaid dividends or Dividend Equivalents that are at that
time subject to restrictions shall be forfeited; provided, however, that
the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Shares will be waived in
whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Restricted Shares.
(iii) Certificates for Shares. Restricted Shares granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Shares are registered in the
name of the Eligible Employee, such certificates shall bear an
appropriate legend referring to the
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terms, conditions, and restrictions applicable to such Restricted
Shares, and the Company shall retain physical possession of the
certificate.
(iv) Dividends. Dividends paid on Restricted Shares shall be
either paid at the dividend payment date, or deferred for payment to
such date as determined by the Committee, in cash or in unrestricted
Shares having a Fair Market Value equal to the amount of such dividends.
Shares distributed in connection with a Share split or dividend in
Shares, and other property distributed as a dividend, shall be subject
to restrictions and a risk of forfeiture to the same extent as the
Restricted Shares with respect to which such Shares or other property
has been distributed.
(e) Restricted Share Units. The Committee is authorized to grant
Restricted Share Units to Eligible Employees, subject to the following
terms and conditions:
(i) Award and Restrictions. Delivery of Shares or cash, as the
case may be, will occur upon expiration of the deferral period specified
for Restricted Share Units by the Committee (or, if permitted by the
Committee, as elected by the Eligible Employee). In addition, Restricted
Share Units shall be subject to such restrictions as the Committee may
impose, if any (including, without limitation, the achievement of
performance criteria if deemed appropriate by the Committee), at the
date of grant or thereafter, which restrictions may lapse at the
expiration of the deferral period or at earlier or later specified
times, separately or in combination, in installments or otherwise, as
the Committee may determine.
(ii) Forfeiture. Except as otherwise determined by the Committee
at date of grant or thereafter, upon termination of employment (as
determined under criteria established by the Committee) during the
applicable deferral period or portion thereof to which forfeiture
conditions apply (as provided in the Award Agreement evidencing the
Restricted Share Units), or upon failure to satisfy any other conditions
precedent to the delivery of Shares or cash to which such Restricted
Share Units relate, all Restricted Share Units that are at that time
subject to deferral or restriction shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any
Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Share Units
will be waived in whole or in part in the event of termination resulting
from specified causes, and the Committee may in other cases waive in
whole or in part the forfeiture of Restricted Share Units.
(f) Performance Shares and Performance Units. The Committee is
authorized to grant Performance Shares or Performance Units or both to
Eligible Employees on the following terms and conditions:
(i) Performance Period. The Committee shall determine a
performance period (the "Performance Period") of one or more years and
shall determine the performance objectives for grants of Performance
Shares and Performance Units. Performance objectives may vary from
Eligible Employee to Eligible Employee and shall be based upon such
performance criteria as the Committee may deem appropriate. Performance
Periods may overlap and Eligible Employees may participate
simultaneously with respect to Performance Shares and Performance Units
for which different Performance Periods are prescribed.
(ii) Award Value. At the beginning of a Performance Period, the
Committee shall determine for each Eligible Employee or group of
Eligible Employees with respect to that Performance Period the range of
number of Shares, if any, in the case of Performance Shares, and the
range of dollar values, if any, in the case of Performance Units, which
may be fixed or may vary in accordance with such performance or other
criteria specified by the Committee, which shall be paid to an Eligible
Employee as an Award if the relevant measure of Company performance for
the Performance Period is met.
(iii) Significant Events. If during the course of a Performance
Period there shall occur significant events as determined by the
Committee which the Committee expects to have a substantial effect on a
performance objective during such period, the Committee may revise such
objective; provided, however, that, if an Award Agreement so provides,
the Committee shall not have discretion to increase the amount of
compensation payable under the Award to the extent such an increase
would cause the
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Award to lose its qualification as performance-based compensation for
purposes of Section 162(m)(4)(C) of the Code and the regulations
thereunder.
(iv) Forfeiture. Except as otherwise determined by the Committee,
at the date of grant or thereafter, upon termination of employment
during the applicable Performance Period, Performance Shares and
Performance Units for which the Performance Period was prescribed shall
be forfeited; provided, however, that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in an
individual case, that restrictions or forfeiture conditions relating to
Performance Shares and Performance Units will be waived in whole or in
part in the event of terminations resulting from specified causes, and
the Committee may in other cases waive in whole or in part the
forfeiture of Performance Shares and Performance Units.
(v) Payment. Each Performance Share or Performance Unit may be
paid in whole Shares, or cash, or a combination of Shares and cash
either as a lump sum payment or in installments, all as the Committee
shall determine, at the time of grant of the Performance Share or
Performance Unit or otherwise, commencing as soon as practicable after
the end of the relevant Performance Period.
(g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to Eligible Employees. The Committee may provide, at
the date of grant or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in
additional Shares, or other investment vehicles as the Committee may
specify, provided that Dividend Equivalents (other than freestanding
Dividend Equivalents) shall be subject to all conditions and restrictions
of the underlying Awards to which they relate.
(h) Other Share-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Employees such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by
the Committee to be consistent with the purposes of the Plan, including,
without limitation, unrestricted shares awarded purely as a "bonus" and not
subject to any restrictions or conditions, other rights convertible or
exchangeable into Shares, purchase rights for Shares, Awards with value and
payment contingent upon performance of the Company or any other factors
designated by the Committee, and Award's valued by reference to the
performance of specified Subsidiaries or Affiliates. The committee shall
determine the terms and conditions of such Awards at date of grant or
thereafter. Shares delivered pursuant to an Award in the nature of a
purchase right granted under this Section 5(h) shall be purchased for such
consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Shares, notes or other property, as
the Committee shall determine. Cash awards, as an element of or supplement
to any other Awards under the Plan, shall also be authorized pursuant to
this Section 5(h).
6. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
to Eligible Employees either alone or in addition to, in tandem with, or in
exchange or substitution for, any other Award granted under the Plan or any
award granted under any other plan or agreement of the Company, any
Subsidiary or Affiliate, or any business entity to be acquired by the
Company or a Subsidiary or Affiliate, or any other right of an Eligible
Employee to receive payment from the Company or any Subsidiary or
Affiliate. Awards may be granted in addition to or in tandem with such
other Awards or awards, and may be granted either as of the same time as or
a different time from the grant of such other Awards or awards. The per
Share exercise price of any Option, grant price of any SAR, or purchase
price of any other Award conferring a right to purchase Shares which is
granted, in connection with the substitution of awards granted under any
other plan or agreement of the Company or any Subsidiary or Affiliate or
any business entity to be acquired by the Company or any Subsidiary or
Affiliate, shall be determined by the Committee, in its discretion.
(b) Terms of Awards. The term of each Award granted to an Eligible
Employee shall be for such period as may be determined by the Committee;
provided, however, that in no event shall the term of any
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ISO or an SAR granted in tandem therewith exceed a period of ten years from
the date of its grant (or such shorter period as may be applicable under
Section 422 of the Code).
(c) Form of Payment Under Awards. Subject to the terms of the Plan
and any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award
may be made in such forms as the Committee shall determine at the date of
grant or thereafter, including, without limitation, cash, Shares, or other
property, and may be made in a single payment or transfer, in installments,
or on a deferred basis. The Committee may make rules relating to
installment or deferred payments with respect to Awards, including the rate
of interest to be credited with respect to such payments.
(d) Nontransferability. Awards (except for vested Shares) shall not
be transferable by an Eligible Employee except by will or the laws of
descent and distribution (except pursuant to a Beneficiary designation) and
shall be exercisable during the lifetime of an Eligible Employee only by
such Eligible Employee or his guardian or legal representative. An Eligible
Employee's rights under the Plan may not be pledged, mortgaged,
hypothecated, or otherwise encumbered, and shall not be subject to claims
of the Eligible Employee's creditors. Notwithstanding the foregoing, an
Option granted hereunder may be transferred by the Eligible Employee to
members of his or her "immediate family," to a trust or trusts established
for the exclusive benefit of solely one or more members of his or her
"immediate family" or to a partnership in which his or her "immediate
family" members are the only partners or to any similar entity (such as
limited liability company) the members (or shareholders) of which consist
solely of one or more persons in his/her immediate family. Any option held
by the transferee will continue to be subject to the same terms and
conditions that were applicable to the Option immediately prior to the
transfer, except that the Option will be transferable by the transferee
only by will or the laws of descent and distribution. For purposes hereof,
"immediate family" means the Eligible Employee's children, stepchildren,
grandchildren, parents, stepparents, grandparents, spouse, siblings
(including half brothers and sisters), in-laws, and relationships arising
because of legal adoption.
7. Director's Options.
(a) Annual Grant. On the date of the consummation of the initial
public offering of the Shares (the "IPO") each Director in office on such
date shall automatically be granted an NQSO to purchase 1,000 Shares with
an exercise price per Share equal to the price per Share paid by the public
in the IPO. In addition, (i) on each anniversary of the IPO, beginning with
the anniversary occurring in 1996, each Director in office on such date
shall automatically be granted a NQSO to purchase 1,000 shares with an
exercise price per Share equal to 100 percent of the Market Value of one
Share on the date of grant; and (ii) on and after June 4, 1996, each newly
appointed non-employee Director shall automatically be granted a NQSO to
purchase 1,000 Shares upon his(her) initial election or appointment to the
Board of Directors with an exercise price per Share equal to 100 percent of
the Market Value of one Share on the date of grant; provided, however, that
in all events such price shall be at least equal to the par value of a
Share. Each Option granted to a Director under this paragraph (a) shall
become fully exercisable on the date of grant, and shall expire (unless
terminated earlier under paragraph (c) below) on the tenth anniversary of
the date of grant. Effective January 1, 1998, the option grants to
Directors under 7(a)(i) (anniversary of IPO grant) and (ii) (upon initial
appointment to the Board grant) shall each be 2,000 Shares.
(b) Market Value. For purposes of this Section 7, Market Value shall
mean the mean between the high and low selling prices per Share on the
immediately preceding date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal
exchange on which the Shares are traded, as such prices are officially
quoted on such exchange.
(c) Termination of Service. If a person ceases to be a Director, (i)
due to retirement after attainment of age 65, or (ii) due to death or
disability, all of his or her outstanding Options may be exercised at any
time prior to the expiration dates of such Options. If the Director's
service terminates for any other reason, all of his or her outstanding
Options may be exercised at any time within six months after the date of
such termination, but not later than the expiration date of the Options.
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(d) Time and Method of Exercise. The exercise price of a Director's
Option shall be paid to the Company at the time of exercise either in cash,
or in Shares already owned by the optionee and having a total Market Value
equal to the exercise price, or in a combination of cash and such Shares.
(e) Nontransferability. Director's Options granted under the Plan
shall be transferable only (i) by Will or the laws of descent and
distribution and (ii) by the Director to members of his or her "immediate
family," to a trust or trusts established for the exclusive benefit of
solely one or more members of his or her "immediate family" or to a
partnership in which his or her "immediate family" members are the only
partners or to any similar entity (such as limited liability company) the
members (or shareholders) of which consist solely of one or more persons in
his/her immediate family. Any Option held by the transferee will continue
to be subject to the same terms and conditions that were applicable to the
Option immediately prior to the transfer, except that the Option will be
transferable by the transferee only by will or the laws of descent and
distribution. For purposes hereof, "immediate family" means the Director's
children, stepchildren, grandchildren, parents, stepparents, grandparents,
spouse, siblings (including half brothers and sisters), in-laws, and
relationships arising because of legal adoption.
(f) Adjustments. In the event that subsequent to the Effective Date
any dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger consolidation, spin-off, combination, repurchase, or
share exchange, or other such change, affects the Shares such that they are
increased or decreased or changed into or exchanged for a different number
or kind of shares, other securities of the Company or of another
corporation or other consideration, then in order to maintain the
proportionate interest of the Director and preserve the value of the
Director's Option, (i) there shall automatically be substituted for each
Share subject to an unexercised Director's Option and each Share to be
issued under Section 7(a) subsequent to such event the number and kind of
shares, other securities or other consideration into which each outstanding
Share shall be changed or for which each such Share shall be exchanged, and
(ii) the exercise price shall be increased or decreased proportionately so
that the aggregate purchase price for the Shares subject to any unexercised
Director's Option shall remain the same as immediately prior to such event.
(g) Directors' Fees. Each Director shall have the option to receive
all or a portion of his quarterly compensation (including any fees that may
be payable for attending meetings of the Board) payable to such Director in
such capacity in the form of Shares in lieu of cash. Each Director shall be
entitled to elect whether to receive such compensation in (i) cash, (ii)
Shares, or (iii) a combination of cash and Shares. A Director who desires
to receive a portion of his compensation in Shares shall make an election
to do so by expressing the percentage of compensation to be paid in the
form of Shares. Once an election is made, it may be changed only at the
beginning of a fiscal quarterly period. The number of Shares to be
transferred to a Director pursuant to this paragraph (g) shall be
determined by the Company by computing the mean between the high and low
selling prices per Share on the date immediately preceding the first
meeting of Directors of each Quarter (or if no meeting is held in the
quarter, then the last day of such quarter) (or, if the Shares were not
traded on that day, the next preceding day that the Shares were traded) on
the principal exchange on which the Shares are traded, as such prices are
officially quoted on such exchange, and dividing the dollar amount of fees
owed to such Director in the form of Shares by such average price.
Certificates evidencing such Shares shall bear such legends deemed to be
necessary in the opinion of the Company or its legal counsel.
(h) Administration. To the extent the Plan relates to Director's
Options granted under paragraph (a) of Section 7 of the Plan, it is
intended to operate automatically and not require administration. However,
to the extent that administration is necessary with respect to such grants,
the Plan shall be administered by the Secretary of the Company. Since the
Director's Options are awarded automatically, this function will be limited
to ministerial matters. The plan administrator will have no discretion with
respect to the selection of Director optionees, the determination of the
exercise price of Director's Options, the timing of such grants or number
of Shares covered by the Director's Options.
(i) Discretionary Grants. From time to time the Board may grant
additional Options or SARs to Directors of the Company upon such terms and
at such times as it may deem appropriate.
A-10
8. General Provisions.
(a) Compliance with Legal and Trading Requirements. The Plan, the
granting and exercising of Awards or Director's Options thereunder, and the
other obligations of the Company under the Plan and any Award Agreement,
shall be subject to all applicable federal and state laws, rules and
regulations, and to such approvals by any regulatory or governmental agency
as may be required. The Company, in its discretion, may postpone the
issuance or delivery of Shares under any Award or Director's Option until
completion of such stock exchange or market system listing or registration
or qualification of such Shares or other required action under any state or
federal law, rule or regulation as the Company may consider appropriate,
and may require any Participant to make such representations and furnish
such information as it may consider appropriate in connection with the
issuance or delivery of Shares in compliance with applicable laws, rules
and regulations. No provisions of the Plan shall be interpreted or
construed to obligate the Company to register any Shares under federal or
state law.
(b) No Right to Continued Employment or Service. Neither the Plan nor
any action taken thereunder shall be construed as giving any employee or
director the right to be retained in the employ or service of the Company
or any of its Subsidiaries or Affiliates, nor shall it interfere in any way
with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee's or director's employment or service at any time.
(c) Taxes. The Company or any Subsidiary or Affiliate is authorized
to withhold from any Award granted, any payment relating to an Award under
the Plan, including from a distribution of Shares, or any payroll or other
payment to an Eligible Employee, amounts of withholding and other taxes due
in connection with any transaction involving an Award, and to take such
other action as the Committee may deem advisable to enable the Company and
Eligible Employees to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Shares or other property and to
make cash payments in respect thereof in satisfaction of an Eligible
Employee's tax obligations.
(d) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of shareholders of the
Company or Participants, except that any such amendment, alteration,
suspension, discontinuation, or termination shall be subject to the
approval of the Company's shareholders to the extent such shareholder
approval is required (i) in order to insure that Awards granted under the
Plan are exempt under Rule 16b-3 or (ii) under Section 422 of the Code;
provided, however, that, without the consent of an affected Participant, no
amendment, alteration, suspension, discontinuation, or termination of the
Plan may impair the rights or, in any other manner, adversely affect the
rights of such Participant under any Award or Director's Option theretofore
granted to him or her. Notwithstanding the other provisions of this
paragraph, Section 7 and the other provisions of this Plan applicable to
Director's Options may not be amended more than once every six months other
than to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
(e) No Rights to Awards; No Shareholder Rights. No Eligible Employee
or employee shall have any claim to be granted any Award under the Plan,
and there is no obligation for uniformity of treatment of Eligible
Employees and employees. No Award shall confer on any Eligible Employee any
of the rights of a shareholder of the Company unless and until Shares are
duly issued or transferred to the Eligible Employee in accordance with the
terms of the Award.
(f) Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments
not yet made to a Participant pursuant to an Award or Director's Option,
nothing contained in the Plan or any Award or Director's Option shall give
any such Participant any rights that are greater than those of a general
creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Shares, other Awards,
or other property pursuant to any Award, which trusts or other arrangements
shall be consistent with the "unfunded" status of the Plan unless the
Committee otherwise determines with the consent of each affected
Participant.
A-11
(g) Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options and other awards
otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.
(h) Not Compensation for Benefit Plans. No Award payable under this
Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the
benefit of its employees or directors unless the Company shall determine
otherwise.
(i) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award or Director's Option. In the
case of Awards to Eligible Employees, the Committee shall determine whether
cash, other Awards, or other property shall be issued or paid in lieu of
such fractional Shares or whether such fractional Shares or any rights
thereto shall be forfeited or otherwise eliminated. In the case of
Director's Options, cash shall be paid in lieu of such fractional Shares.
(j) Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan, and any Award
Agreement shall be determined in accordance with the laws of New York
without giving effect to principles of conflict of laws.
(k) Effective Date; Plan Termination. The Plan shall become effective
as of March 13, 1995 (the "Effective Date") upon approval by the
affirmative votes of the holders of a majority of voting securities of the
Company. The Plan shall terminate as to future awards on the date which is
ten (10) years after the Effective Date.
(l) Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only. In the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
A-12
ATLAS AIR WORLDWIDE HOLDINGS, 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 4, 2002
The undersigned hereby constitutes and appoints Richard H. Shuyler and
Thomas G. Scott, 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 Worldwide Holdings, Inc., to be held on the
second floor of the Marriott East Side Hotel, 525 Lexington Avenue, New York,
New York 10017, (see directions enclosed), on Tuesday, June 4, 2002 at 10:00
a.m. EDT and at any adjournments thereof, on all matters coming before said
meeting.
1. Election of Directors
NOMINEES: [ ] FOR [ ] WITHHELD
LINDA CHOWDRY, LAWRENCE W. CLARKSON, RICHARD A. GALBRAITH, STEPHEN A.
GREENE, DAVID K.P. LI,
JAMES T. MATHENY, BRIAN H. ROWE, RICHARD H. SHUYLER AND RONALD B. WOODARD
(To withhold vote for any individual nominee write that name below.)
--------------------------------------------------------------------------------
2. Approval of amendment to the 1995 Long Term Incentive and Share Award
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Ratification of appointment of Ernst & Young LLP as independent public
accountants of the Company for fiscal year 2002.
[ ] 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.)
(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 --------------------------, 2002
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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.