SCHEDULE 14C INFORMATION
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Exchange Act of 1934
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by Rule 14c-5(d)(2))
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AIR T, INC.
(Name of Registrant As Specified In Charter)
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(3) Per unit price or other underlying value of
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PRELIMINARY COPY
AIR T, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 22, 2001
To Our Stockholders:
The annual meeting of stockholders of Air T, Inc. (the
"Company") will be held at One Independence Center, 101 North
Tryon Street, Suite 1900, Charlotte, North Carolina on Wednesday,
August 22, 2001 at 10:00 a.m. local time, for the purpose of
considering and acting on the following matters:
1.To elect ten directors to serve until their successors are duly elected
and qualified;
2.To ratify the appointment of Deloitte & Touche LLP as the independent
auditors of the Company for the current fiscal year;
3.To approve an amendment to the Company's Certificate of Incorporation to
reduce the number of authorized shares of preferred stock to 50,000; and
4.To transact such other business as may properly come before the meeting,
or any adjournment or adjournments thereof.
Only stockholders of record as of the close of business on
July 2, 2001 are entitled to notice of and to vote at the annual
meeting and adjournments thereof.
Because of the expense involved in collecting proxies, the
Company is not soliciting proxies. Accordingly, to vote on
matters that will be considered at the Annual Meeting you must
either attend the meeting or deliver a valid proxy to a person
who attends the meeting. WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
The annual report of the Company also accompanies this
notice.
By Order of the Board of Directors
/s/ John J. Gioffre
John J. Gioffre
Secretary
July 18, 2001
[Intentionally left blank.]
Air T, Inc.
3524 Airport Road
Maiden, North Carolina 28650
Telephone (704) 377-2109
INFORMATION STATEMENT
This information statement is furnished to the stockholders
of Air T, Inc. (hereinafter sometimes referred to as the
"Company") by the Board of Directors in connection with the
annual meeting of stockholders of the Company to be held on
Wednesday, August 22, 2001 at 10:00 a.m. at One Independence
Center, 101 North Tryon Street, Suite 1900, Charlotte, North
Carolina. Action will be taken at the annual meeting for the
election of directors, the ratification of the appointment of
independent auditors, approval of an amendment to the Company's
certificate of incorporation to reduce the number of authorized
shares of preferred stock, and any other business that properly
comes before the meeting. As provided in the Company's bylaws,
up to ten directors may be elected.
Because of the expense involved in collecting proxies, the
Company is not soliciting proxies. Accordingly, to vote on
matters that will be considered at the Annual Meeting you must
either attend the meeting or deliver a valid proxy to a person
who attends the meeting. WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
This information statement is being mailed to stockholders
on or about July 18, 2001. The Company's 2001 Annual Report to
Stockholders accompanies this information statement.
VOTING SECURITIES
Only stockholders of record at the close of business on July
2, 2001 will be entitled to vote at the annual meeting or any
adjournment or adjournments thereof. The number of outstanding
shares entitled to vote at the stockholders meeting is 2,705,153.
The presence of a majority of the outstanding shares of the
Company's Common Stock, par value $.25 per share (the "Common
Stock"), represented in person or by proxy at the meeting will
constitute a quorum. Directors will be elected by a plurality of
the votes cast. Cumulative voting is not allowed. Accordingly,
abstentions and broker non-votes will not affect the outcome of
the election of directors. The ratification of independent
auditors and any other business coming before the meeting
requires the affirmative vote of a majority of the shares present
or represented at the meeting and entitled to vote. On such
matters, an abstention will have the same effect as a negative
vote but, because shares held by brokers will not be considered
entitled to vote on matters as to which the brokers withhold
authority, a broker non-vote will have no effect on votes on
these matters. The approval of the amendment to the Company's
Certificate of Incorporation to reduce the number of authorized
shares of preferred stock requires the affirmative vote of a
majority of the shares of Common Stock outstanding. Accordingly,
an abstention and a broker non-vote will have the same effect as
a negative vote on this matter.
CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding the
beneficial ownership of shares of Common Stock (determined in
accordance with Rule 13d-3 of the Securities and Exchange
Commission) of the Company as of June 1, 2001 by each person that
beneficially owns five percent or more of the shares of Common
Stock. Each person named in the table has sole voting and
investment power with respect to all shares of Common Stock shown
as beneficially owned, except as otherwise set forth in the
notes to the table.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Amount of
Title of Beneficial
Class Name and Address of Ownership Percent
Beneficial Owner as of June 1, Of
2001 Class
Common Walter Clark and Caroline 1,342,416(1) 48.7%
Stock, par Clark, Executors(1)
value $.25 P.O. Box 488
per share Denver, North Carolina 28650
William H. Simpson 270,580(2) 10.0%
P.O. Box 488
Denver, North Carolina 28650
_____________________________
(1) Includes 1,279,272 shares controlled by such individuals as
the executors of the estate of David Clark, 10,922 shares
owned by Walter Clark, 50,000 shares purchasable by Walter
Clark under options awarded by the Company and 2,222 shares
owned by Caroline Clark.
(2) Includes 1,200 shares held jointly with J. Hugh Bingham and
9,000 shares under options granted by the Company.
ELECTION OF DIRECTORS
Under the Company's Certificate of Incorporation and bylaws,
directors are elected at each annual meeting and hold office
until their respective successors are elected and have qualified.
All of the incumbent directors were elected by the stockholders
at the last annual meeting. As provided in the Company's bylaws,
up to ten directors may be elected.
DIRECTORS AND EXECUTIVE OFFICERS
J. Hugh Bingham, age 55, has served as President and Chief
Operating Officer of the Company since April 1997, as Senior Vice
President of the Company from June 1990 until April 1997, as
Executive Vice President from June 1983 to June 1990, and as a
director since March 1987. Mr. Bingham also serves as Chief
Executive Officer and a director of MAC, as Chief Executive
Officer of MAS and as an Executive Vice President and director of
CSA.
Walter Clark, age 44, has served as Chairman of the Board of
Directors of the Company and Chief Executive Officer since April
1997. Mr. Clark also serves as a director of MAC and CSA. Mr.
Clark was elected a director of the Company in April 1996. Mr.
Clark was self-employed in the real estate development business
from 1985 until April 1997.
John J. Gioffre, age 57, has served as Vice President-
Finance and Chief Financial Officer of the Company since
April 1984 and as Secretary/Treasurer of the Company since
June 1983. He has served as a director of the Company since
March 1987. Mr. Gioffre also serves as Vice-President,
Secretary/Treasurer and a director of MAC and CSA and as Vice
President-Finance, Treasurer and Secretary of MAS.
J. Leonard Martin, age 64, was elected a director in August
1994 and joined the Company as a Vice President in April 1997.
From June 1995 until April 1997, Mr. Martin was an independent
aviation consultant. From April 1994 to June 1995, Mr. Martin
has served as Chief Operating Officer of Musgrave Machine & Tool,
Inc., a machining company. From January 1989 to April 1994, Mr.
Martin served as a consultant to the North Carolina Air Cargo
Authority in connection with the establishment of the Global
TransPark air cargo facility in Kinston, North Carolina. From
1955 through 1988, Mr. Martin was employed by Piedmont Airlines
(a commercial passenger airline) in various capacities,
ultimately serving as Senior Vice President-Passenger Services.
William H. Simpson, age 53, has served as Executive Vice
President of the Company since June 1990, as Vice President from
June 1983 to June 1990, and as a director of the Company since
June 20, 1985. Mr. Simpson is also the President and a director
of MAC, the Chief Executive Officer and a director of CSA and
Executive Vice President of MAS.
Menda J. Street, age 49, has served as Vice President of MAC
since 1984, and in various other capacities at MAC since 1979.
Claude S. Abernethy, Jr., age 74, was elected as director of
the Company in June 1990. For the past five years, Mr. Abernethy
has served as a Senior Vice President of IJL Wachovia Securities,
a securities brokerage and investment banking firm, and its
predecessor. Mr. Abernethy is also a director of Carolina Mills,
Inc. and Ridgeview Incorporated.
Sam Chesnutt, age 67, was elected a director of the Company
in August 1994. Mr. Chesnutt serves as President of Sam Chesnutt
and Associates, an agribusiness consulting firm. From November
1988 to December 1994, Mr. Chesnutt served as Executive Vice
President of AgriGeneral Company, L.P., an agribusiness firm.
Allison T. Clark, age 45, has served as a director of the
Company since May 1997. Mr. Clark has been self-employed in the
real estate development business since 1987.
Herman A. Moore, age 71, was elected a director of the
Company in June 1998. Mr. Moore is the president of Herman A.
Moore & Assoc., Inc., a real estate development company.
George C. Prill, age 78, has served as a director of the
Company since June 1982, as Chief Executive Officer and Chairman
of the Board of Directors from August 1982 until June 1983, and
as President from August 1982 until spring 1984. Mr. Prill has
served as an Editorial Director for General Publications, Inc., a
publisher of magazines devoted to the air transportation
industry, since November 1992 and was retired from 1990 until
that time. From 1979 to 1990, Mr. Prill served as President of
George C. Prill & Associates, Inc., of Charlottesville, Virginia,
which performed consulting services for the aerospace and airline
industry. Mr. Prill has served as President of Lockheed
International Company, as Assistant Administrator of the FAA, as
a Senior Vice President of the National Aeronautic Association
and Chairman of the Aerospace Industry Trade Advisory Committee.
The officers of the Company and its subsidiaries each serve
at the pleasure of the Board of Directors. Allison Clark and
Walter Clark are brothers.
Each director receives a director's fee of $500 per month
and an attendance fee of $500 is paid to outside directors for
each meeting of the board of directors or a committee thereof.
Pursuant to the Company's 1998 Omnibus Securities Award Plan (the
"Plan") each director who is not an employee of the Company
received an option to purchase 1,000 shares of Common Stock at an
exercise price of $6.375 per share (the closing bid price per
share on the date of stockholder approval of the Plan.) The Plan
provides for a similar option award to any director first elected
to the board after the date the stockholders approved the Plan.
Such options expire ten years after the date they were granted.
The Board of Directors has two standing committees: the
Audit Committee and the Compensation Committee. The Audit
Committee consists of Messrs. Abernethy, Chesnutt and Moore each
of whom is not an employee of the Company. The Audit Committee
met five times during the fiscal year. On May 18, 2000, the
Board of Directors adopted a charter for the Audit Committee, a
copy of which is included in this Information Statement as
Appendix A. The Charter was re-approved by the Board of
Directors on June 20, 2001. The principal functions of the Audit
Committee, included in the charter, are to recommend to the Board
of Directors the firm of independent auditors to serve the
Company each fiscal year, to review the scope, fees and results
of the audit performed by the independent auditors and to review
the adequacy of the Company's system of internal accounting
controls and the scope and results of internal auditing
procedures, to meet at least quarterly to review the Company's
financial results with management and the independent auditors
prior to the release of quarterly financial information, and to
prepare and issue to the Board of Directors annually a summary
report suitable for submission to the stockholders. A copy of
the Audit Committee's report for the fiscal year ended March 31,
2001 is included in this Information Statement. On June 6, 2000,
the Company certified to Nasdaq the Company's compliance with
Nasdaq's new audit committee charter requirements and compliance
with the new audit committee structure and composition
requirements.
The Compensation Committee consists of Messrs. Abernethy,
Chesnutt and Prill, all of whom are non-employee directors. The
functions of the Compensation Committee include establishing
policies for the compensation of the Company's executive officers
and determining the types and amounts of remuneration to be paid
to the Company's executive officers. The Compensation Committee
did not meet during the fiscal year.
During the fiscal year ended March 31, 2001, the Board of
Directors met four times. Each of the directors attended at
least 75 percent of the total of the meetings of the Board of
Directors and committees thereof on which such director served
during such period.
The following table sets forth information regarding the
beneficial ownership of shares of Common Stock of the Company by
each director of the Company and by all directors and executive
officers of the Company as a group as of June 1, 2001. Each
person named in the table has sole voting and investment power
with respect to all shares of Common Stock shown as beneficially
owned, except as otherwise set forth in the notes to the table.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
Shares and Percent of
Common Stock Beneficially
Owned as of June 1, 2001
Name Position with Company No. of Shares Percent
J. Hugh Bingham President, Chief 125,680(1)(2) 4.6%
Operating Officer,
Director
Walter Clark Chairman of the 1,340,194(3) 48.6%
Board of Directors
and Chief Executive
Officer
John J. Gioffre Vice President- 63,580(4) 2.3%
Finance, Chief
Financial Officer,
Secretary and
Treasurer, Director
J. Leonard Martin Vice President, 6,100(5) *
Director
William H. Simpson Executive Vice 270,580(1)(6) 10.0%
President, Director
Claude S. Abernethy, Jr. Director 44,011(7)(8) 1.6%
Sam Chesnutt Director 12,100(7) *
Allison T. Clark Director 3,222(7) *
Herman A. Moore Director 31,000(7) 1.1%
George C. Prill Director 46,966(7) 1.7%
All directors N/A 1,963,233(9) 70.3%
and executive
officers as a
group (11
persons)
__________________________________________
* Less than one percent.
(1) Includes 1,200 shares jointly held by Messrs. Simpson and
Bingham.
(2) Includes 6,000 shares under options granted by the Company
to Mr. Bingham.
(3) Includes 1,279,272 shares held by the estate of David Clark,
of which Mr. Walter Clark is a co-executor and 50,000 shares
under options granted by the Company to Mr. Walter Clark.
(4) Includes 6,000 shares under options granted by the Company
to Mr. Gioffre.
(5) Such 100 shares are held by Mr. Martin's spouse of which
shares Mr. Martin disclaims beneficial ownership and 6,000
shares under options granted by the Company to Mr. Martin.
(6) Includes 9,000 shares under options granted by the Company
to Mr. Simpson.
(7) Includes 1,000 shares under options granted by the Company.
(8) Includes 20,400 shares held by the Estate of Raenelle B.
Abernethy, of which Mr. Abernethy is the executor.
(9) Includes an aggregate of 88,000 shares of Common Stock
members of such group have the right to acquire within 60
days.
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation
paid during each of the three most recent fiscal years to the
Company's Chief Executive Officer and to the four other executive
officers on March 31, 2001 with total compensation of $100,000 or
more.
SUMMARY COMPENSATION TABLE
Annual Long-term
Compensation Compensation
Awards/Securities
Name and Principal Position Year Salary ($)(1) Bonus (1) Underlying
Options (#)
Walter Clark 2001 125,732 46,900 -
Chief Executive Officer 2000 126,035 15,080 50,000
1999 132,527 20,900 -
J. Hugh Bingham 2001 193,004 46,900 -
President 2000 196,032 15,080 -
1999 203,774 20,900 9,000
John J. Gioffre 2001 121,788 35,175 -
Vice President 2000 121,948 11,311 -
1999 128,297 15,675 9,000
J. Leonard Martin 2001 122,673 24,880 -
Vice President 2000 122,205 6,880 -
1999 129,955 4,000 9,000
William H. Simpson 2001 194,803 46,900 -
Executive Vice Presdient 2000 195,169 15,080 9,000
1999 204,008 20,900 -
___________________________
(1) Includes perquisites in aggregate amount no greater than ten
percent of the officer's base salary plus bonus.
The following table sets forth, for each of the executive
officers listed in the Summary Compensation Table who exercised
options to purchase shares of Common Stock during the most recent
fiscal year, the number of shares purchased and the value
realized upon exercise, which is determined based on the
aggregate fair market value of the shares at the time of the
exercise minus the aggregate exercise price. The table also sets
forth the number of shares of Common Stock underlying unexercised
options at March 31, 2001 held by each of the executive officers
listed in the Summary Compensation Table. The table also
includes the value of such options at March 31, 2001 based upon
the closing bid price of the Company's Common Stock in the over-
the-counter market on that date ($4.00 per share) and the
exercise price of the options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Value of
Securities Unexercised
Shares Underlying In-the-Money
Acquired Value Unexercised Options
On Realized Options at FY-End (#) at FY-End ($)
Name Exercise # ($) Exercisable Unexer- Unexer-
cisable Exercisable cisable
Walter Clark - - 50,000 - 40,500 -
J. Hugh Bingham 6,000 11,630 6,000 3,000 7,500 3,750
John J. Gioffre 4,000 7,750 6,000 3,000 7,500 3,750
J. Leonard Martin - - 6,000 3,000 7,500 3,750
William H. Simpson 16,000 35,500 17,000 - 13,770 -
EMPLOYMENT AGREEMENTS
Effective January 1, 1996, the Company and each of its
subsidiaries entered into employment agreements with J. Hugh
Bingham, John J. Gioffre and William H. Simpson, each of
substantially similar form. Each of such employment agreements
provides for an annual base salary ($130,000, $103,443 and
$165,537 for Messrs. Bingham, Gioffre and Simpson, respectively)
which may be increased upon annual review by the Compensation
Committee of the Company's Board of Directors. In addition, each
such agreement provides for the payment of annual incentive bonus
compensation equal to a percentage (2.0%, 1.5% and 2.0% for
Messrs. Bingham, Gioffre and Simpson, respectively) of the
Company's consolidated earnings before income taxes and
extraordinary items as reported by the Company in its Annual
Report on Form 10-K. Payment of such bonus is to be made within
15 days after the Company files its Annual Report on Form 10-K
with the Securities and Exchange Commission.
The initial term of each such employment agreement expired
on March 31, 1999, and the term is automatically extended for
additional one-year terms unless either such executive officer or
the Company's Board of Directors gives notice to terminate
automatic extensions which must be given by December 1 of each
year (commencing with December 1, 1996).
Each such agreement provides that upon the executive
officer's retirement, he shall be entitled to receive an annual
benefit equal $75,000 ($60,000 for Mr. Gioffre), reduced by three
percent for each full year that the termination of his employment
precedes the date he reaches age 65. The retirement benefits
under such agreements may be paid at the executive officer's
election in the form of a single life annuity or a joint and
survivor annuity or a life annuity with a ten-year period
certain. In addition, such executive officer may elect to
receive the entire retirement benefit in a lump sum payment equal
to the present value of the benefit based on standard insurance
annuity mortality tables and an interest rate equal to the 90-day
average of the yield on ten-year U.S. Treasury Notes.
Retirement benefits shall be paid commencing on such
executive officer's 65th birthday, provided that such executive
officer may elect to receive benefits on the later of his 62nd
birthday, in which case benefits will be reduced as described
above, or the date on which his employment terminates, provided
that notice of his termination of employment is given at least
one year prior to the termination of employment. Any retirement
benefits due under the employment agreement shall be offset by
any other retirement benefits that such executive officer
receives under any plan maintained by the Company. In the event
such executive officer becomes totally disabled prior to
retirement, he will be entitled to receive retirement benefits
calculated as described above.
In the event of such executive officer's death before
retirement, the agreement provides that the Company shall be
required to pay an annual death benefit to such officer's estate
equal to the single life annuity benefit such executive officer
would have received if he had terminated employment on the later
of his 65th birthday or the date of his death, payable over ten
years; provided that such amount would be reduced by five percent
for each year such executive officer's death occurs prior to age
65, but in no event more than 50 percent.
Each of the employment agreements provides that if the
Company terminates such executive officer's employment other than
for "cause" (as defined in the agreement), such executive officer
be entitled to receive a lump sum cash payment equal to the
amount of base salary payable for the remaining term of the
agreement (at the then current rate) plus one-half of the maximum
incentive bonus compensation that would be payable if such
executive officer continued employment through the date of the
expiration of the agreement(assuming for such purposes that the
amount of incentive bonus compensation would be the same in each
of the years remaining under the agreement as was paid for the
most recent year prior to termination of employment). Each of
the agreements further provides that if any payment on
termination of employment would not be deductible by the Company
under Section 280G(b)(2) of the Internal Revenue Code, the amount
of such payment would be reduced to the largest amount that would
be fully deductible by the Company.
CERTAIN TRANSACTIONS
The Company leases its corporate and operating facilities at
the Little Mountain, North Carolina airport from Little Mountain
Airport Associates, Inc. ("Airport Associates"), a corporation
whose stock is owned by J. Hugh Bingham, William H. Simpson, John
J. Gioffre, the estate of David Clark and three unaffiliated
third parties. Walter Clark and Allison Clark are beneficiaries
of the estate of David Clark, and Walter Clark is a co-executor
of the estate. On May 31, 2001, the Company renewed its lease
for this facility, scheduled to expire on that date, for an
additional five-year term, and adjusted the rent to account for
increases in the consumer price index. Upon the renewal, the
monthly rental payment was increased from $8,073 to $9,147. The
Company paid aggregate rental payments of $96,876 to Airport
Associates pursuant to such lease during the fiscal year ended
March 31, 2001. The Company believes that the terms of such
lease are no less favorable to the Company than would be
available from an independent third party.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors
establishes the compensation paid to the Company's executive
officers, including the individuals named in the Summary
Compensation Table. Although the Compensation Committee did not
hold a formal meeting during the fiscal year, its members
communicated informally during the course of the fiscal year.
Policies
The Compensation Committee seeks to establish compensation
policies that provide appropriate rewards to the Company's
executive officers commensurate with their service with the
Company and to provide incentives for superior performance.
Executive compensation is comprised of three components: base
salary, annual cash bonuses and stock option awards. In setting
an executive officer's base salary, the Compensation Committee
engages in a subjective evaluation, examining the officer's level
of responsibility in the Company and previous base compensation,
the officer's performance over both the short and longer terms,
the Company's performance over those periods and the length of
the officer's service with the Company, assigning no particular
weight to any of these factors. The Company has entered into
employment agreements with certain of its executive officers
establishing a minimum base annual salary and providing for an
annual cash bonus equal to an established percentage of the
Company's earnings before income taxes and extraordinary items.
Accordingly, the Committee believes that a substantial portion of
compensation of executive officers will be tied directly to the
Company's overall financial performance.
In addition, during the fiscal year ended March 31, 1999,
the Company awarded executive officers and other employees
bonuses under the Company's 1998 Omnibus Securities Award Plan.
Because the Company has not awarded stock options to its
employees in the several years, and then awarded options only to
executive officers, option awards were fairly uniformly
distributed among the key employees of the Company, with each
executive officer (other than the Chief Executive Officer and the
Executive Vice President) receiving 9,000 options. In the 2000
fiscal year, the Company awarded 9,000 options to the Executive
Vice President and 50,000 options to the Chief Executive Officer.
These options expire five and ten years, respectively, after they
were awarded. The options awarded to the Chief Executive Officer
were fully exercisable on the date of grant, while the options
awarded to the Executive Vice President became exercisable on the
date of grant with respect to one half of the shares, and will
become exercisable with respect to the remaining half one year
after the date of grant. The Compensation Committee believes that
options are performance-based compensation and serve as an
incentive to management to remain with the Company. No options
were awarded to executive officers in the most recent fiscal
year. Stock options and other equity-based performance
compensation may be awarded in the future.
Compensation of Chief Executive Officer
The Committee established Mr. Walter Clark's annual salary
at $120,000 in January 1998 and has not adjusted his salary since
that time. In setting Mr. Walter Clark's salary, the Committee
deferred in part to Mr. Walter Clark's request that his
compensation be kept relatively low. In determining salary and
bonus for Mr. Walter Clark, the Committee has used its subjective
evaluation of Mr. Walter Clark's performance and
responsibilities, the Company's overall performance and his
request that his compensation be relatively low. The Committee
believes that the scope and his performance of his
responsibilities, would justify a higher level of salary and
bonus compensation to Mr. Walter Clark. As noted above, in the
2000 fiscal year, the Company awarded 50,000 options to Mr.
Walter Clark which vested immediately and are exercisable for a
period of ten years. No options were awarded in the most recent
fiscal year to Mr. Clark or any other executive officer in light
of awards that had been made in prior years.
Compensation Committee
Claude S. Abernethy, Jr. Sam Chesnutt George C. Prill
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
The following graph compares the Company's cumulative total
shareholder return at the end of the five most recent fiscal
years, assuming an investment on March 31, 1996 of $100 in Common
Stock and reinvestment of all dividends in Common Stock, along
with the cumulative total returns determined on the same basis of
a broad-based equity market index -- The Center for Research in
Securities Prices (CRSP) Total Return Index for the Nasdaq Stock
Market (U.S. Companies) -- and a peer index - the CRSP Nasdaq
Trucking & Transportation Index.
pictureId131072pictureActive0fLine0
March 31,
1996 1997 1998 1999 2000 2001
Company 100 83 335 91 89 111
Nasdaq 100 111 167 221 414 165
Nasdaq Trucking Transportation 100 99 146 115 129 99
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on review of the
copies of reports under Section 16(a) of the Securities Exchange
Act of 1934 that have been furnished to the Company and written
representations that no other reports were required, during the
fiscal year ended March 31, 2001 all executive officers,
directors and greater than ten-percent beneficial owners have
complied with all applicable Section 16(a) filing requirements.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors recommends that the stockholders
ratify the appointment of Deloitte & Touche LLP to serve as the
independent auditors for the Company and its subsidiary
corporations for the fiscal year ending March 31, 2002. This
firm has served as the independent auditors for the Company since
1983. Representatives of Deloitte & Touche LLP are expected to
be present at the annual meeting and will have an opportunity to
make a statement and will be available to respond to appropriate
questions.
Report of the Audit Committee
The Audit Committee reviews the Company's financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial
statements and the reporting process. The Company's independent
auditors are responsible for expressing an opinion on the
conformity of the Company's audited financial statements to
generally accepted accounting principles.
In this context, the Audit Committee has reviewed and
discussed with management and the independent auditors the
audited financial statements as of and for the year ended March
31, 2001. The Audit Committee has discussed with the independent
auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 (Communication with Audit Committees).
In addition, the Audit Committee has received from the
independent auditors the written disclosures and letter required
by Independence Standards Board No. 1 (Independence Discussions
with Audit Committees) and discussed with them their independence
from the Company and its management. The Audit Committee also
has considered whether the independent auditors provision of non-
audit services to the Company is compatible with the auditor's
independence.
Based on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual
Report on Form 10-K for the year ended March 31, 2001 for filing
with the Securities and Exchange Commission.
Audit Committee
Claude S. Abernethy, Jr. Sam Chesnutt Herman A. Moore
Audit Fees
Aggregate fees estimated to be billed by Deloitte & Touche
LLP for its audit of the Company's annual financial statements
and the review of quarterly financial statements for fiscal year
2001 are $125,000, of which $30,000 were billed during the fiscal
year.
Financial Information Systems Design and Implementation Fees
Deloitte & Touche LLP did not render any services related to
financial information systems design and implementation for the
fiscal year ended March 31, 2001.
All Other Fees
Aggregate fees billed for all other services rendered by
Deloitte & Touche LLP for the fiscal year ended March 31, 2001
were $57,000.
APPROVAL OF AMENDMENT TO COMPANY'S
CERTIFICATE OF INCORPORATION TO REDUCED AUTHORIZED PREFERRED
SHARES
On June 20, 2001, the Board of Directors adopted a
resolution to amend the Company's Certificate of Incorporation to
reduce the number of authorized shares of preferred stock to
50,000. Currently, the Company's Certificate of Incorporation
authorizes 10,000,000 shares of preferred stock, which may be
issued in one or more series having rights and preferences as may
be designated by the Board of Directors before the shares are
issued. No shares of preferred stock are outstanding and the
Board of Directors has no current plans to authorize the issuance
of any shares of preferred stock.
The Board of Directors recommends amending the Certificate
of Incorporation to reduce the number of authorized shares of
preferred stock because it believes this action with lower the
Company's annual franchise taxes. The Company pays franchise
taxes to the State of Delaware based on the number of shares of
capital stock that are authorized by its Certificate of
Incorporation. The Board of Directors estimates that by reducing
the number of authorized shares of preferred stock to 50,000 the
Company will save at least $20,000 annually in franchise taxes.
The Board of Directors believes it is advisable for the
Certificate of Incorporation to authorize some number of
preferred stock to provide the Company with flexibility in
issuing new classes of equity securities. Under Delaware law,
the Company's franchise taxes would be the same if the number of
authorized shares of preferred stock is set at any number between
1 and 50,000, but franchise taxes would increase above that
amount if the number of authorized shares is greater than 50,000.
Accordingly, the Board of Directors recommends that the
stockholders approve the following resolution:
"RESOLVED, that the Certificate of Incorporation
of Air T, Inc. be amended to reduce the number of
authorized shares of preferred stock to 50,000 and
that Paragraph 4(b) of Article Fourth of the
Certificate of Incorporation be amended to read,
as amended:
`(b) The total number of shares of preferred
stock that the corporation shall have authority to
issue is fifty thousand (50,000) and the par value
of each of such shares is One Dollar ($1.00)
amounting in the aggregate to Fifty Thousand
Dollars ($50,000), and the rights (including
voting powers, if any), preferences,
qualifications, series limitations and
restrictions shall be as are provided for in a
resolution or resolutions of the board of
directors authorizing such issue.'"
Approval of this amendment requires the affirmative vote of a
majority of the outstanding shares of Common Stock of the
Company.
ADDITIONAL INFORMATION
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER
OF THE COMPANY, AND TO EACH PERSON REPRESENTING THAT AS OF THE
RECORD DATE FOR THE MEETING HE OR SHE WAS A BENEFICIAL OWNER OF
SHARES ENTITLED TO BE VOTED AT THE MEETING, IF SOLICITED BY
WRITTEN REQUEST, A COPY OF THE COMPANY'S 2001 ANNUAL REPORT ON
FORM 10-K TO THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING
THE FINANCIAL STATEMENTS. SUCH WRITTEN REQUESTS SHOULD BE
DIRECTED TO AIR T, INC., 3524 AIRPORT ROAD, MAIDEN, NORTH
CAROLINA 28650, ATTENTION: MR. JOHN J. GIOFFRE, SECRETARY.
OTHER MATTERS
The Board of Directors knows of no other matters that may be
presented at the meeting.
Appendix A
Air T, Inc.
Audit Committee Charter
There shall be a committee of the Board of Directors to be
known as the Audit Committee.
Role and independence
The audit committee of the board of directors assists the
board in fulfilling its responsibility for oversight of the
quality and integrity of the accounting, auditing and reporting
practices of the corporation and such other duties as directed by
the board. The membership of the committee shall consist of at
least three directors who are generally knowledgeable in
financial and auditing matters, including at least one member
with accounting or related financial management expertise. Each
member shall be free of any relationship that, in the opinion of
the board, would interfere with his or her individual exercise of
independent judgment. The committee is expected to maintain free
and open communication (including private executive sessions at
least annually) with the independent accountants, the internal
auditors and the management of the corporation. In discharging
this oversight role, the committee is empowered to investigate
any matter brought to its attention, with full power to retain
outside counsel or other experts for this purpose. This charter
shall be reviewed, updated and approved annually by the Board of
Directors.
Responsibilities
The audit committee's primary responsibilities include:
Primary input into the recommendation to the board for the
selection and retention of the independent accountant that audits
the financial statements of the corporation. In so doing, the
committee will discuss and consider the auditor's written
affirmation that the auditor is in fact independent, will discuss
the nature and rigor of the audit process, receive and review all
reports and will provide to the independent accountant full
access to the committee (and the board) to report on any and all
appropriate matters.
Provision of guidance and oversight to the internal audit
function of the corporation including review of the organization,
plans and results of such activity.
Review of financial statements (including quarterly reports)
with management and the independent auditor. It is anticipated
that these discussions will include quality of earnings, review
of reserves and accruals, consideration of the suitability of
accounting principles, review of highly judgmental areas, audit
adjustments whether or not recorded and such other inquiries as
may be appropriate. Annually, after satisfactory review by the
committee, the company's audited financial statements included in
the annual report on Form 10-K will be approved by the board of
directors for filing with the Securities and Exchange Commission.
Discussion with management and the auditors of the quality
and adequacy of the company's internal controls.
Discussion with management of the status of pending
litigation, taxation matters and other areas of oversight to the
legal and compliance area as may be appropriate.
Reporting on audit committee activities to the full board
and issuance annually of a summary report (including appropriate
oversight conclusions) suitable for submission to the
shareholders.
AIR T, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 22, 2001
AND
INFORMATION STATEMENT
JULY 18, 2001