SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
-------------
(Amendment No. ___)
[x] Filed by the Registrant
[_] Filed by a Party other than the Registrant
Check the appropriate box:
[_] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
AIR EXPRESS INTERNATIONAL CORPORATION
- - ---------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - ---------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[_] Filing Fee of $__________________ was previously paid on ____________
__, 199_, the date the Preliminary Proxy Statement was filed.
AIR EXPRESS INTERNATIONAL CORPORATION
120 TOKENEKE ROAD
DARIEN, CONNECTICUT 06820
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 1994
----------------
The Annual Meeting of Shareholders of Air Express International Corporation
(the "Company") will be held at the Hyatt Regency Greenwich, 1800 East Putnam
Avenue, Old Greenwich, Connecticut, on Thursday, June 23, 1994, at 11:00 a.m.,
Eastern Daylight Time, for the following purposes:
(1) To elect six (6) directors;
(2) To consider and act upon a shareholder proposal with respect to
confidential voting; and
(3) To transact such other business as properly may come before the meeting
or any adjournment thereof.
The Board of Directors has fixed April 29, 1994 as the record date for the
determination of shareholders entitled to notice of, and to vote at, the
meeting.
By Order of the Board of Directors
Daniel J. McCauley, Secretary
Darien, Connecticut
May 23, 1994
----------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN,
AND MAIL THE ACCOMPANYING FORM OF PROXY TO THE COMPANY AS PROMPTLY AS POSSIBLE
IN THE ENCLOSED STAMPED ENVELOPE.
AIR EXPRESS INTERNATIONAL CORPORATION
120 TOKENEKE ROAD
DARIEN, CONNECTICUT 06820
----------------
PROXY STATEMENT
----------------
The accompanying proxy is solicited by the Board of Directors of Air Express
International Corporation (the "Company") in connection with the Annual Meeting
of Shareholders to be held on Thursday, June 23, 1994, or at any adjournment
thereof, for the purposes set forth in the accompanying notice of the meeting.
The Board of Directors has fixed the close of business on April 29, 1994 as the
record date for the determination of shareholders entitled to notice of, and to
vote at, the meeting. On that date, there were outstanding 11,575,768 shares of
Common Stock, exclusive of shares held in the Company's treasury. Each holder
of Common Stock is entitled to one vote for each share held on all matters to
come before the meeting, including the election of directors. Shares may be
voted in person or by proxy. The accompanying proxy may be revoked by the
person giving it at any time prior to its being voted by filing a written
notice of such revocation with the Secretary of the Company or by attending the
meeting and voting in person.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 20, 1994 (except as otherwise
noted) information with respect to the beneficial ownership of the Company's
Common Stock by (i) each person known by the Company to beneficially own more
than five percent of the outstanding Common Stock of the Company, (ii) each
executive officer of the Company named in the Summary Compensation Table on
page 7 of this Proxy Statement, (iii) each current director and each nominee
for election as a director and (iv) all directors and executive officers of the
Company as a group. Unless otherwise indicated in the footnotes to this table,
beneficial ownership of shares represents sole voting and investment power with
respect to those shares:
PERCENTAGE OF
SHARES OWNED OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY SHARES(1)
---------------- ------------ -------------
Neuberger & Berman (2).............................. 1,409,600 12.2%
605 Third Avenue
New York, New York 10158
The Prudential Insurance Company of America (3)..... 632,916 5.5%
Prudential Plaza
Newark, New Jersey 08102-3777
Quest Advisory Corp. (4)............................ 685,175 5.9%
1414 Avenue of the Americas
New York, New York 10019
Wellington Management Company (5)................... 989,879 8.4%
75 State Street
Boston, Massachusetts 02109
Hendrik J. Hartong, Jr. (6)......................... 715,724 6.2%
Guenter Rohrmann (7)................................ 159,749 1.4%
1
PERCENTAGE OF
SHARES OWNED OUTSTANDING
BENEFICIAL OWNER BENEFICIALLY SHARES(1)
---------------- ------------ -------------
Robert J. O'Connell (8)............................. 15,257 (12)
Dennis M. Dolan (9)................................. 32,396 (12)
Daniel J. McCauley (10)............................. 9,687 (12)
John M. Fowler...................................... 20,250 (12)
Leo T. Heessels..................................... -- -
Donald J. Keller.................................... 2,250 (12)
Andrew L. Lewis IV.................................. -- -
Richard T. Niner (11)............................... 707,385 6.1%
All directors and executive officers as a group
(consisting of 13 persons)......................... 1,692,528 14.6%
- - --------
(1) Shares issuable to any person upon the conversion of outstanding 6%
Convertible Subordinated Debentures Due 2003 (the "Debentures") owned by
that person, as well as shares issuable upon the exercise of presently
exercisable stock options owned by that person, are deemed outstanding for
the purpose of computing the number and percentage of outstanding shares
owned by that person (and any group that includes that person) but are not
deemed outstanding for the purpose of computing the percentage of
outstanding shares owned by any other person.
(2) Based on information set forth in a statement on Schedule 13G filed by
Neuberger & Berman ("N&B"), at January 31, 1994 N&B owned an aggregate of
1,409,600 shares on behalf of clients for whom it acts as an investment
advisor. In addition, at that date partners of N&B owned in their personal
accounts an aggregate of 8,700 shares, as to which N&B disclaims beneficial
ownership.
(3) Based on information set forth in a statement on Schedule 13G filed by The
Prudential Insurance Company of America ("Prudential"), at December 31, 1993
Prudential owned 540,466 shares for its own account and had sole or shared
voting and/or dispositive power with respect to an aggregate of 92,450
additional shares held by or for the benefit of its clients.
(4) Based on information set forth in a statement on Schedule 13G filed
jointly by Quest Advisory Corp. ("Quest"), Quest Management Company ("QMC")
and Charles M. Royce, at February 10, 1993, Quest owned an aggregate of
650,625 shares and its affiliate QMC owned an aggregate of 34,550 shares, in
each case on behalf of clients for whom it acts as an investment advisor.
Mr. Royce may be deemed to be a controlling person of Quest and QMC and, as
such, may be deemed to beneficially own the shares held by Quest and QMC,
respectively.
(5) Based on information set forth in Schedule 13G filed by Wellington
Management Corporation ("Wellington"), at February 10, 1994 Wellington
shared voting and dispositive power with respect to an aggregate of 989,879
shares owned by clients for whom it acts as an investment advisor.
(6) Includes 5,000 shares issuable upon the exercise of presently exercisable
stock options, 1,467 shares issuable upon the conversion of $50,000
principal amount of Debentures owned by Mr. Hartong and 11,816 shares held
in custodial accounts for the benefit of Mr. Hartong's children. Also
includes 474,975 shares owned by Brynwood Partners II L.P., a private
investment partnership. Mr. Hartong is a general partner of Brynwood
Management II L.P., a limited partnership that serves as general partner of
Brynwood Partners II L.P. Mr. Hartong's address is c/o Brynwood Partners,
Two Soundview Drive, Greenwich, Connecticut 06830.
2
(7) Includes 33,750 shares issuable upon the exercise of presently exercisable
stock options and 1,321 shares issuable upon the conversion of $45,000
principal amount of Debentures owned by Mr. Rohrmann.
(8) Includes 7,375 shares issuable upon the exercise of presently exercisable
stock options and 29 shares issuable upon the conversion of a Debenture, in
the principal amount of $1,000, owned by Mr. O'Connell.
(9) Includes 16,562 shares issuable upon the exercise of presently exercisable
stock options and 293 shares issuable upon the conversion of $10,000
principal amount of Debentures owned by Mr. Dolan.
(10) Consists of 9,687 shares issuable upon the exercise of presently
exercisable stock options.
(11) Includes 2,250 shares held in custodial accounts for the benefit of Mr.
Niner's children. Also includes 474,975 shares owned by Brynwood Partners II
L.P. Mr. Niner is a general partner of Brynwood Management II L.P., which
serves as general partner of Brynwood Partners II L.P. Mr. Niner's address
is c/o Brynwood Partners, Two Soundview Drive, Greenwich, Connecticut 06830.
(12) Less than 1%.
3
ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, each to serve until
the next Annual Meeting of Shareholders and until his successor has been duly
elected and qualifies. If no direction to the contrary is given, all proxies
received by the Board of Directors will be voted in favor of the nominees
listed below. If any nominee is unable or declines to serve, an event not now
anticipated by the Board of Directors, such proxies may be voted for the
election of a substitute designated by the Board of Directors.
All of the nominees were elected at the last Annual Meeting of Shareholders
and are presently serving as directors of the Company. Mr. Leo T. Heesels, who
has been a director of the Company since 1989, is retiring from that office and
will not stand for reelection at the meeting.
NOMINEES FOR ELECTION
The following table sets forth information with respect to each nominee for
election as a director at the Annual Meeting:
DIRECTOR
CONTINUOUSLY
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- - ---- --- -------------------------------------------- ------------
John M. Fowler 45 Executive Vice President of 1985
Travelers Inc. (formerly
Primerica Corporation), New
York, New York, since 1991
(Senior Vice President from
1986 to 1991). Director of
Transatlantic Holdings, Inc.
Hendrik J. 55 Chairman of the Company since 1985
Hartong, Jr. 1985 (Chief Executive Officer
from 1985 to 1989); General
Partner since 1985 of Brynwood
Management and since 1988 of
Brynwood Management II L.P.,
entities that serve,
respectively, as managing
general partner of Brynwood
Partners Limited Partnership
and Brynwood Partners II L.P.,
private investment
partnerships. Director of Hurco
Companies, Inc.
4
DIRECTOR
CONTINUOUSLY
NAME AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- - ---- --- -------------------------------------------- ------------
Donald J. Keller 62 Chairman of the Board of B. 1990
Manischewitz Company since
March 1993 (President, Co-Chief
Executive Officer and a
director from May 1992 to March
1993); consultant and private
investor from 1989 to May 1992;
President, Chief Operating
Officer and a director of West
Point Pepperell, Inc., a
textile and apparel
manufacturing and marketing
company, from 1986 through
1989. Director of Sysco
Corporation.
Andrew L. Lewis IV 37 President, KRR Partners L.P., a 1986
private investment partnership,
since July 1993; independent
business consultant from July
1990 to March 1993; Chief
Executive Officer of
Environmental Management
Services, an environmental
consulting firm, from 1988 to
1990. Director of Hurco
Companies, Inc. and
Independence Blue Cross and
Blue Shield of Philadelphia.
Richard T. Niner 54 General Partner since 1985 of 1985
Brynwood Management and since
1988 of Brynwood Management II
L.P., entities that serve,
respectively, as managing
general partner of Brynwood
Partners Limited Partnership
and Brynwood Partners II L.P.,
private investment
partnerships. Director of Arrow
International, Inc., Wiltek,
Inc., and Hurco Companies, Inc.
Guenter Rohrmann 55 President and Chief Executive 1985
Officer of the Company since
1989 (President and Chief
Operating Officer from 1985 to
1989).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ELECTION OF EACH OF
THE FOREGOING NOMINEES.
5
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation and Stock Option Committee and a Nominating Committee.
The Executive Committee (consisting of Messrs. Hartong, Niner and Rohrmann)
has all of the powers of the Board of Directors between meetings of the Board,
subject to Delaware law.
The Audit Committee (consisting of Messrs. Lewis, Keller and Niner) has the
responsibility of meeting with the Company's independent public accountants and
internal auditors to review the plan, scope and results of the audits of the
Company's annual financial statements and the recommendations of the
independent accountants regarding the Company's internal accounting systems and
controls. The Committee also recommends the appointment of the independent
accountants for the ensuing year.
The Compensation and Stock Option Committee (consisting of Messrs. Fowler,
Hartong, Heessels and Keller) reviews and approves the compensation of
officers, including the Chief Executive Officer, and administers the Company's
stock option plans.
The Nominating Committee (consisting of Messrs. Fowler, Hartong and Niner)
screens and selects candidates to stand for election as directors of the
Company.
During the fiscal year ended December 31, 1993, there were five meetings of
the Board of Directors, three meetings of the Executive Committee and one
meeting of each of the Audit Committee, the Compensation and Stock Option
Committee and Nominating Committee. Each director attended more than 75% of the
meetings of the Board of Directors and of each committee thereof on which he
served.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's directors and executive officers, and each person who owns
more than ten percent of the Company's Common Stock, file with the Securities
and Exchange Commission an initial report of beneficial ownership and
subsequent reports of changes in beneficial ownership of the Company's Common
Stock. To the Company's knowledge, all reports required to be so filed by such
persons have been filed on a timely basis. The Company believes that all of its
directors and executive officers, and all persons owning beneficially more than
ten percent of the Company's Common Stock, complied with all filing
requirements applicable to them with respect to transactions during the fiscal
year ended December 31, 1992.
DIRECTOR COMPENSATION
During 1993, each director who is not an officer of the Company received a
fee of $16,000 for the year and $1,000 for each day of attendance at meetings
of the Board of Directors or a committee thereof.
6
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND OTHER COMPENSATION
Annual compensation paid to executive officers of the Company consists solely
of salary and bonus. Officers also receive an allowance of $6,000 per year to
defray automobile expenses but do not receive any other perquisites. Long-term
compensation consists solely of the grant of stock options.
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation, as well as certain
other compensation, paid or accrued by the Company for each of the years in the
three-year period ended December 31, 1993, to the Chief Executive Officer and
each of the four most highly compensated executive officers of the Company
other than the Chief Executive Officer in all capacities in which they served:
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------- -------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL OPTIONS ALL OTHER
POSITION YEAR SALARY BONUS (# OF SHARES) COMPENSATION(1)
------------------ ---- -------- -------- ------------- ---------------
Guenter Rohrmann 1993 $400,000 $350,000 30,000 $14,150
President and Chief 1992 380,000 250,000 -- 13,732
Executive Officer 1991 360,000 200,000 -- 13,333
Hendrik J. Hartong, Jr. 1993 $250,000 $225,000 20,000 $14,150
Chairman of the Board 1992 240,000 125,000 -- 13,372
1991 225,000 100,000 -- 13,333
Robert J. O'Connell 1993 $170,000 $ 60,000 15,000 $13,725
Vice President and
General 1992 160,000 45,000 -- 12,300
Manager-North America 1991 150,000 25,000 -- 10,500
Dennis M. Dolan 1993 $130,000 $ 50,000 10,000 $10,800
Vice President and
Chief 1992 120,000 25,000 -- 8,700
Financial Officer 1991 115,000 15,000 -- 7,800
Daniel J. McCauley 1993 $120,000 $ 20,000 5,000 $ 7,956
Vice President, 1992 111,000 10,000 -- 4,725
General Counsel and
Secretary 1991(2) 44,000 -- 11,250(3) --
<FN>
- - --------
(1) Consists of contributions by the Company to its 401(k) Retirement Plan,
which covers substantially all U.S.-based employees who are not covered by a
collective bargaining agreement. The Company contributes (i) a sum equal to
3% of the salary of each eligible employee and (ii) a further sum, not
exceeding 3% of the employee's salary, equal to the amount, if any,
contributed by the employee, subject to certain limitations imposed by the
Internal Revenue Code. A participant's interest in the Company's
contributions to the plan vests at the rate of 20% for each of the first five
years of service and is fully vested thereafter.
(2) Mr. McCauley commenced employment with the Company on August 1, 1991.
(3) Adjusted for a three-for-two stock split in 1992.
7
STOCK OPTIONS
The Company currently grants to its key employees, including its executive
officers, options to purchase shares of its Common Stock pursuant to two formal
stock option plans, one for U.S.-based employees and one for foreign-based
employees.
STOCK OPTION GRANTS IN 1993
The following table sets forth information with respect to the grant of stock
options during 1993 to the executive officers named in the Summary Compensation
Table:
INDIVIDUAL GRANTS
- - -------------------------------------------------------------------------
POTENTIAL
REALIZABLE VALUE
SECURITIES PERCENT OF AT ASSUMED ANNUAL
UNDERLYING TOTAL OPTIONS RATES OF STOCK
OPTIONS GRANTED TO EXERCISE PRICE
GRANTED(1) EMPLOYEES PRICE EXPIRATION APPRECIATION FOR
NAME (# OF SHARES) IN 1993(2) PER SHARE DATE OPTION TERMS(3)
---- ------------- ------------- --------- ---------- -----------------
5% 10%
-------- --------
Guenter Rohrmann........ 30,000 6.7% $27.75 1/17/98 $230,100 $508,800
Hendrik J. Hartong, Jr.
....................... 20,000 4.5% $27.75 1/17/98 $153,400 $339,200
Robert J. O'Connell..... 15,000 3.3% $27.75 1/17/98 $115,050 $254,400
Dennis M. Dolan......... 10,000 2.2% $27.75 1/17/98 $ 76,700 $169,600
Daniel J. McCauley...... 5,000 1.1% $27.75 1/17/98 $ 38,350 $ 84,800
<FN>
- - --------
(1) All options were granted on January 18, 1993 at an exercise price equal to
the market value of the underlying shares on the date of grant and become
exercisable as to one-fifth of the underlying shares on each anniversary of
the grant date.
(2) Options with respect to a total of 448,000 shares were granted to employees
in 1993. In addition, 149,000 previously outstanding options (none of which
was held by any of the executive officers named in the table) were repriced.
(3) Represents the potential appreciation of the options over their stated term
of five-years, based upon assumed compounded rates of appreciation of 5% per
year (equivalent to 27.6%) and 10% per year (equivalent to 61.1%). The
amounts set forth in these columns are not intended as forecasts of future
appreciation, which is dependent upon the actual increase, if any, in the
market price of the underlying shares, and there is no assurance that the
amounts of appreciation shown in the table actually will be realized.
AGGREGATE OPTION EXERCISES IN 1993 AND
OPTION VALUES AT DECEMBER 31, 1993
The following table sets forth, for each of the executive officers named in
the Summary Compensation Table, information with respect to the exercise of
stock options during 1993 and holdings of unexercised options at the end of the
year:
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS AT OPTIONS AT
NAME EXERCISE(#) REALIZED FISCAL YEAR END(#) FISCAL YEAR END($)(1)
---- ----------- -------- ------------------------- -------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Guenter Rohrmann........ -- -- 84,375 46,875 $1,121,513 $222,075
Hendrik J. Hartong, Jr.
....................... -- -- -- 20,000 -- --
Robert J. O'Connell..... -- -- 5,625 15,000 $ 75,881 --
Dennis M. Dolan......... -- -- 11,250 12,812 $ 76,837 $ 18,109
Daniel J. McCauley...... -- -- 5,625 10,625 $ 50,906 $ 50,906
<FN>
- - --------
(1) Based on the excess of (i) the aggregate market value (closing price on the
American Stock Exchange) of the underlying shares on December 31, 1993 over
(ii) the aggregate exercise price of the options.
8
EMPLOYMENT CONTRACTS AND CHANGE-OF-CONTROL ARRANGEMENTS
The Company is party to an employment agreement with each of Messrs. Rohrmann
and Hartong that provides for an annual base salary and such annual bonus and
incentive compensation as the Board of Directors may determine. The base salary
is subject to review annually and currently is $420,000 in the case of Mr.
Rohrmann and $260,000 in the case of Mr. Hartong. By its terms, each agreement
will expire December 31, 1996, but the expiration date will be automatically
extended to December 31, 1997 unless the Board of Directors elects, within
sixty days after January 1, 1995, to terminate the agreement and to pay in a
lump sum the balance of the base salary due thereunder through December 31,
1996. Each agreement further provides that in event of a change of control (as
defined below), either party may terminate the executive's employment at any
time, and upon such termination, the Company would be required to pay in a lump
sum the balance of the base salary due through the unexpired term of the
agreement (but not less than two times the annual base salary). A "change of
control" is currently defined in each agreement as (i) the acquisition by any
person (which term includes any entity or group) of shares of the Company's
Common Stock representing more than 40% of the shares outstanding or (ii) the
sale or other disposition by the Company of all or substantially all of its
assets.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1993, the Compensation and Stock Option Committee consisted of Messrs.
Fowler (who served as its Chairman), Hartong, Heessels and Keller. Because of
his position as an employee and Chairman of the Board of the Company, (i) Mr.
Hartong recused himself from participating in the Committee's deliberations
regarding his own compensation and (ii) the Committee referred to the full
Board of Directors (from whose deliberations Mr. Hartong also recused himself)
consideration of the grant of stock options to Mr. Hartong. During 1993, no
other member of the Committee served as an officer or employee of the Company
or any of its subsidiaries and no executive officer of the Company served as a
director or member of the compensation committee of any other entity of which
an executive officer also served as a director or member of the Company's
Compensation and Stock Option Committee.
9
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total shareholder
return on the Company's Common Stock over the five years ended December 31,
1993 with the cumulative total return for the same period of (i) the Standard &
Poor's 500 Stock Index and (ii) a peer group comprised of four publicly-held
companies: Airborne Freight Corporation, Expediters International of
Washington, Inc., The Harper Group, Inc. and Intertrans Corporation. Dividend
reinvestment has been assumed and, with respect to companies in the peer group,
the returns of each company have been weighted to reflect its stock market
capitalization relative to that of the other companies in the group.
FIVE YEAR CUMULATIVE TOTAL RETURNS
VALUE OF $100 INVESTED ON DECEMBER 31, 1988.
[PERFORMANCE GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG THE COMPANY, S&P 500 INDEX AND PEER GROUP INDEX
Measurement period
(Fiscal year Covered) The Company S&P 500 Peer Group
- - --------------------- ----------- --------- ----------
December 31, 1988 $ 100.0 $ 100.0 $ 100.0
December 31, 1989 $ 84.3 $ 131.7 $ 152.3
December 31, 1990 $ 90.7 $ 127.6 $ 136.2
December 31, 1991 $ 174.2 $ 166.5 $ 218.7
December 31, 1992 $ 351.9 $ 179.2 $ 177.8
December 31, 1993 $ 259.9 $ 197.2 $ 236.2
10
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
The Compensation and Stock Option Committee reviews and approves the annual
compensation of the Company's executive officers, as well as the Company's
policies and practices with respect to compensation of other management
personnel.
Compensation of executive officers consists primarily of base salary and
discretionary bonus awards and, where appropriate, the grant of stock options.
Although the percentage of total compensation borne by each of these components
is not fixed, it is the view of the Committee that, in the case of the most
senior officers, the discretionary bonus should represent a substantial
percentage of total compensation and, indeed, a greater percentage than is the
case with officers having more narrowly-defined responsibilities.
In reviewing the compensation of the Company's executive officers (including
the grant of stock options), the Committee considers (i) the levels of
executive compensation paid by the Company's principal competitors in the air
freight and air freight forwarding industry (including those publicly-held
companies in the peer group shown in the Performance Graph on page 10), to the
extent reliable information with respect thereto is available, (ii) the
Company's reported earnings, earnings per share and profit margin (operating
income as a percentage of revenues), both in absolute terms as well as in
relation to budget forecasts, results for prior years and competitors' results
(where publicly available), (iii) the Company's return on equity and stock
price performance relative to those of its publicly-held competitors and the
market as a whole and (iv) the extent to which the Company has achieved or
exceeded its goals for the year. No specific weight is accorded to any single
factor and different factors may be accorded greater or lesser weight in
particular years or for particular officers.
The compensation of the Company's Chief Executive Officer for 1993 was
determined at the beginning of that year in light of all of the foregoing
factors as applied to Mr. Rohrmann's performance in 1992. The Committee took
particular notice of the significant growth in the Company's earnings in 1992,
which was achieved despite the unfavorable economic climate then prevailing in
most countries in which the Company operates, as well as the substantial
appreciation in the market price of the Company's shares during the course of
that year.
Section 162(m) of the Internal Revenue Code of 1986, as amended, which is
effective for taxable years commencing January 1, 1994, limits (to $1,000,000
per covered executive) the deductibility of the annual compensation paid to
each of the chief executive officer and the other four most highly compensated
executive officers. That section and proposed regulations thereunder contain
certain exclusions from the deductibility limitation and set forth certain
transition rules with respect to awards or grants under certain plans (such as
the Company's stock option plans) previously approved by shareholders. The
Committee is reviewing the Company's compensation practices for covered
executives in light of the proposed regulations with a view to preserving the
full deductibility of their compensation, and does not expect that any material
changes to those practices will be required if the regulations are adopted
substantially as proposed.
The Compensation and
Stock Option Committee:
John M. Fowler, Chairman
Hendrik J. Hartong, Jr.
Leo T. Heessels
Donald J. Keller
11
CERTAIN RELATIONSHIPS AND TRANSACTIONS
During 1993, the Company paid (a) to Brynwood Management, a partnership of
which Messrs. Hartong and Niner are general partners, $60,000 for investment
banking and related services and (b) to Mr. Niner $60,000 for financial
advisory services.
SHAREHOLDER PROPOSAL REGARDING CONFIDENTIAL VOTING
A shareholder has notified the Company of its intention to present for
consideration at the Annual Meeting the following proposal:
"RESOLVED, that the shareholders of the Corporation request that the
board of directors adopt and implement a policy requiring all proxies,
ballots and voting tabulations that identify how shareholders voted be kept
confidential, except when disclosure is mandated by law, such disclosure is
expressly requested by a shareholder or during a contested election for the
board of directors, and that the tabulators and the inspectors of election
be independent and not the employees of the Corporation."
The proposal was accompanied by the following supporting statement from its
proponent:
"STATEMENT IN SUPPORT
"The confidential ballot is fundamental to the American political system.
The reason for this protection is to ensure that voters are not subjected
to actual or perceived coercive pressure. We believe that it is time that
this fundamental principle of the confidential ballot be applied to public
corporations.
"Many excellent companies use confidential voting. None have reported any
difficulty reaching quorums or meeting supermajority vote requirements and
those surveyed reported that the added cost of implementing confidentiality
was negligible.
"Strong support was shown at the last annual meeting when 40.5% of the
votes were cast in favor of this proposal.
"It is our belief that all shareholders need the protection of a
confidential ballot no less than voters in political elections. Whole we
make no imputation that our company's management has acted coercively, the
existence of this possibility is sufficient to justify confidentiality.
"This resolution would permit shareholders to voluntarily disclose their
vote to management by expressly requesting such disclosure on their proxy
cards. Additionally, shareholders may disclose their vote to any other
person they choose. This resolution would merely restrict the ability of
the Corporation to have access to the vote of its shareholders without
their specific consent.
"Many shareholders believe confidentiality of ownership is ensured when
shares are held in street or nominee name. This is not always the case.
Management has various means of determining actual (beneficial) ownership.
For instance, proxy solicitors have elaborate databases that can match
account numbers with the identity of some owners. Moreover, why should
shareholders have to transfer their shares to nominees in an attempt to
maintain confidentiality? In our opinion, this resolution is the only way
to ensure a secret ballot for all shareholders irrespective of how they
choose to hold their shares.
"We believe that confidential voting is one of the most basic reforms
needed in the proxy voting system and that the system must be free of the
possibility of pressure and the appearance of retaliation.
12
"We hope that you would agree and vote FOR this proposal."
The Company will furnish the name and address of the proponent of the
foregoing proposal, and information concerning the proponent's stock ownership,
to any person requesting that information.
BOARD OF DIRECTORS' STATEMENT IN OPPOSITION TO THE PROPOSAL
The Board of Directors recommends a vote AGAINST the foregoing proposal for
the following reasons:
The proponent's comparison of a corporation to our country's political
process is misplaced. An individual's relationship to his or her government is
founded on a different premise than that of a shareholder to a corporation. The
shareholder's corporate relationship is only economic, and it is voluntary and
can be easily terminated. Further, a shareholder can choose anonymity in the
voting process by having his shares held in the name of a nominee such as a
bank or stock brokerage firm. The shareholder's name may not be divulged to the
Company, unless that shareholder so wishes. Thus, the confidentiality of a
shareholder's vote already is a matter of choice on the part of that
shareholder.
The theoretical abuses of the proxy voting system referred to in the
proponent's Statement in Support have not taken place at the Company in the
past and the Board firmly believes that they are unlikely to occur at the
Company in the future. The Company's tabulators and inspectors of election are,
and have been for many years, representatives of the Company's transfer agent.
These individuals are independent of the Company and have performed their
duties in a completely professional manner. There is no allegation in the
proposal that the Company's management has ever engaged in the type of
inappropriate conduct that is described in the Statement in Support and,
indeed, the proponent expressly acknowledges that such conduct has never
occurred. Mere speculation that such conduct could possibly occur in the future
does not justify the imposition of a mandatory system for secret voting. Such a
system would result in additional expense and inconvenience for the Company and
its shareholders, and without any justification.
A similar shareholder proposal was brought at each of the past four Annual
Meetings and was rejected by a majority of the shares present in person or by
proxy and entitled to vote in respect of the proposal at each of those
meetings.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE SHAREHOLDER
PROPOSAL.
13
OTHER MATTERS
As of the date of this Proxy Statement, the only business that the Board of
Directors intends to present or knows that others will present at the meeting
is that set forth above. If any other matter or matters are properly brought
before the meeting or any adjournment thereof, the persons named in the
accompanying form of proxy intend to vote on such matters in accordance with
their judgment.
The cost of soliciting proxies will be borne by the Company. Arrangements
will be made with brokerage firms and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of the
shares held of record by such persons, and the Company will reimburse them for
their reasonable out-of-pocket expenses. Officers and directors may also
solicit proxies.
The Board of Directors has selected the firm of Arthur Anderson & Co. as the
Company's independent public accountants for the current fiscal year. Arthur
Andersen & Co. has served as the Company's independent public accountants since
1968. Representatives of Arthur Andersen & Co. are expected to be present at
the meeting, and will have the opportunity to make a statement if they desire
to do so and to respond to appropriate questions.
The six (6) nominees for election as directors that receive the greatest
number of votes cast at the Annual Meeting for the election of directors will
become the directors of the Company at the conclusion of the tabulation of
votes. In respect of any other matter, including the shareholder proposal, the
affirmative vote of the holders of a majority of the shares present at the
meeting, in person or by proxy, and entitled to vote in respect of that matter
is necessary to approve the matter. Under Delaware law, which governs the
voting of the Company's shares, the aggregate number of shares present and
entitled to vote in respect of a matter includes shares that vote "for," shares
that vote "against" and shares that expressly abstain, and an abstention from
voting on a matter has the same legal effect as a vote "against" that matter.
Shares that are the subject of broker "non-votes" are not considered present at
the meeting for the particular matter or proposal for which the brokers
withheld voting authority.
Any shareholder desiring to present a proposal at the 1995 Annual Meeting of
shareholders and wishing to have that proposal included in the Proxy Statement
for that meeting must submit the same in writing to the Secretary of the
Company at 120 Tokeneke Road, Darien, Connecticut 06820 in time to be received
by January 25, 1995.
This proxy statement and the accompanying form of proxy are first being
mailed to shareholders on or about May 23, 1994.
By Order of the Board of Directors
Daniel J. McCauley, Secretary
Darien, Connecticut
May 23, 1994
----------------
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K FOR THE YEAR ENDED DECEMBER 31, 1993, TO EACH SHAREHOLDER WHO FORWARDS A
WRITTEN REQUEST TO THE SECRETARY, AIR EXPRESS INTERNATIONAL CORPORATION, 120
TOKENEKE ROAD, DARIEN, CONNECTICUT 06820.
14
AIR EXPRESS INTERNATIONAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 1994
The undersigned, revoking any proxy heretofore given, hereby appoints HENDRIK
J. HARTONG, JR., GUENTER ROHRMANN and DANIEL J. McCAULEY, and each or any of
them, the attorney and proxy of the undersigned, with full power of
substitution, to vote on behalf of the undersigned all shares that the
undersigned, if personally present, would be entitled to vote at the Annual
Meeting of Shareholders of Air Express International Corporation to be held on
June 23, 1994, at the Hyatt Regency Greenwich, 1800 East Putnam Avenue, Old
Greenwich, Connecticut, at 11:00 local time, and at any adjournment thereof.
Unless a contrary direction is indicated, this Proxy will be voted FOR all
nominees listed in the accompanying Proxy Statement and AGAINST the shareholder
proposal, as more specifically set forth in the Proxy Statement; if specific
instructions are indicated, this Proxy will be voted in accordance therewith.
The Board of Directors recommends a vote FOR all of the listed nominees and
AGAINST the shareholder proposal.
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE)
[X] PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE.
(1) Election of Directors.:
FOR ALL NOMINEES WITHHOLD
LISTED (EXCEPT AUTHORITY
AS MARKED TO THE
CONTRARY)
[_] [_]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES:
John M. Fowler, Hendrik J. Hartong, Jr., Donald J. Keller, Andrew L. Lewis IV,
Richard T. Niner and Guenter Rohrmann.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
- - --------------------------------------------------------------------------------
(2) Shareholder proposal concerning confidential voting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE SHAREHOLDER PROPOSAL
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion, the Proxies are authorized to
transact such other business as may properly come
before the Meeting, or any adjournment thereof.
Please sign exactly as name appears hereon. If the
shares are registered in the names of two or more
persons, each should sign. Executors, administrators,
trustees, guardians, attorneys-in-fact, general
partners and other persons acting in a representative
capacity should add their titles. When the proxy is
given by a corporation, it should be signed by an
authorized officer.
Dated ____________________________ , 1994
_________________________________________
_________________________________________
PLEASE FILL IN, DATE, SIGN AND MAIL THIS PROXY
PROMPTLY USING THE ENCLOSED POST-PAID RETURN ENVELOPE.