DEF 14A 1 awcdef14a082004.txt ALLSTATES WORLDCARGO, INC. PROXY STATEMENT ALLSTATES WORLDCARGO, INC. 4 Lakeside Drive South Forked River, New Jersey 08731 (609) 693-5950 ______________________ NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AT 10:00 A.M., ON September 10, 2004 To the Stockholders of Allstates WorldCargo, Inc.: The 2004 Annual Meeting of the Stockholders of Allstates WorldCargo, Inc. (the "Company"), a New Jersey corporation will be held at the offices of the Company at 4 Lakeside Drive South, Forked River, New Jersey, 08731, on September 10, 2004, at 10:00 a.m. At the meeting, stockholders will act on the following matters: (1) Election of four (4) Directors to hold office for the ensuing year and until their successors have been duly elected and qualified; (2) Ratification of the appointment of Cowan, Gunteski & Co., P.A. as Independent accountants for fiscal 2004; and (3) Any other matters that properly come before the meeting. Stockholders of record at the close of business on August 16, 2004 are entitled to vote at the meeting or any postponement or adjournment. Stockholders (whether they own one or many shares and whether they expect to attend the annual meeting or not) are requested to vote, sign, date and return promptly the accompanying proxy in the enclosed envelope, which requires no postage if mailed in the United States. A proxy may be revoked at any time prior to its exercise (a) by notifying the Secretary of the Company in writing, (b) by delivering a duly executed proxy bearing a later date, or (c) by attending the annual meeting and voting in person. By Order of the Board of Directors: Craig D. Stratton, Corporate Secretary August 20, 2004 Forked River, New Jersey ALLSTATES WORLDCARGO, INC. 4 Lakeside Drive South Forked River, New Jersey 08731 (609) 693-5950 ______________________________ PROXY STATEMENT ______________________________ This Proxy Statement contains information related to the annual meeting of stockholders of Allstates WorldCargo, Inc. (the Company), to be held on Friday, September 10, 2004 at 10:00 a.m., local time, at the offices of the Company at 4 Lakeside Drive South, Forked River, New Jersey, 08731, and at any adjournment or adjournments thereof. ABOUT THE MEETING What is the purpose of the annual meeting? At the Company's annual meeting, stockholders will act upon the matters outlined in the accompanying notice of meeting, including the election of directors and ratification of the Company's independent auditors. In addition, the Company's management will report on the performance of the Company and respond to questions from stockholders. Who is entitled to vote? Only stockholders of record at the close of business on the record date, August 16, 2004, are entitled to receive notice of the annual meeting and to vote the shares of common stock that they held on that date at the meeting, or any postponement or adjournment of the meeting. Each outstanding share entitles its holder to cast one vote on each matter to be voted upon. Who can attend the meeting? All stockholders as of the record date, or their duly appointed proxies, may attend the meeting. Please note that if you hold your shares in "street name" (that is, through a broker or other nominee), you will need to bring a copy of a brokerage statement reflecting your stock ownership as of the record date and check in at the registration desk at the meeting. What constitutes a quorum? The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum, permitting the meeting to conduct its business. As of the record date, 32,509,872 shares of common stock of the Company were outstanding. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting. How do I vote? If you complete and properly sign the accompanying proxy card and return it to the Company, it will be voted as you direct. If you are a registered stockholder and attend the meeting, you may deliver your completed proxy card in person. "Street name" stockholders who wish to vote at the meeting will need to obtain a proxy form from the institution that holds their shares. Can I change my vote after I return my proxy card? Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised by filing with the Secretary of the Company either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will be suspended if you attend the meeting in person and so request, although attendance at the meeting will not by itself revoke a previously granted proxy. What are the board's recommendations? Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board of Directors. The Board's recommendation is set forth together with the description of each item in this proxy statement. In summary, the Board recommends a vote: (1) for election of the nominated slate of directors (see page 4); and (2) for ratification of the appointment of Cowan, Gunteski & Co., P.A. as the Company's independent auditors (see page 8). With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion. What vote is required to approve each item? Election of directors. The affirmative vote of a plurality of the votes cast at the meeting determines the election of directors. A properly executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum. Other items. For each other item, the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote on the item will be required for approval. A properly executed proxy marked "ABSTAIN" with respect to any such matter will not be voted, although it will be counted for purposes of determining whether there is a quorum. Accordingly, an abstention will have the effect of a negative vote. If you hold your shares in "street name" through a broker or other nominee, your broker or nominee may not be permitted to exercise voting discretion with respect to some of the matters to be acted upon. Thus, if you do not give your broker or nominee specific instructions, your shares may not be voted on those matters and will not be counted in determining the number of shares necessary for approval. Shares represented by such "broker non-votes" will, however, be counted in determining whether there is a quorum. STOCK OWNERSHIP Who are the largest owners of the company's stock? Joseph M. Guido, Chairman of the Board of Directors of the Company, owns or controls 56.91% of the outstanding shares of common stock of the Company; and Sam DiGiralomo, President, CEO and a director of the Company, owns or controls 14.92% of the outstanding shares of common stock of the Company. See the table below. How much stock do the company's directors and executive officers own? The following table sets forth the beneficial ownership of the Common Stock of the Company as of August 16, 2004, by each person who was known by the Company to beneficially own more than 5% of the common stock, by each director and executive officer who owns shares of common stock and by all directors and executive officers as a group: No. of Shares Title Name and Address and Percen of of Beneficial Owner Nature of t of Class Beneficial Class(1) Ownership Common Joseph M. Guido 18,500,000(2) 56.91% 4 Lakeside Drive South Forked River, NJ 08731 Common Sam DiGiralomo 4,850,000 14.92% 7 Doig Road, Suite 3 Wayne, NJ 07470 Common Barton C. Theile 500,000 1.54% 4 Lakeside Drive South Forked River, NJ 08731 Common Craig D. Stratton 200,000 0.62% 4 Lakeside Drive South Forked River, NJ 08731 All Officers and Directors as a Group 24,050,000 73.98% __________________ (1) Based upon 32,509,872 shares outstanding as of August 16, 2004. (2) Comprised of 18,250,000 shares owned by Joseph Guido and 250,000 shares owned by Teresa Guido, wife of Joseph Guido. ITEM 1 ELECTION OF DIRECTORS Four (4) directors will be elected to hold office subject to the provisions of the Companys by-laws until the next Annual Meeting of Shareholders, and until their respective successors are duly elected and qualified. The affirmative vote of a plurality of the votes cast at the meeting, either in person or by proxy, determines the election of directors. The following table sets forth the name, age, position with the Company and respective director service dates of each person who has been nominated to be a director of the Company: Positions(s) Name Age With the Company Director Since Joseph M. Guido 70 Chairman of the Board 1999 Sam DiGiralomo 60 President, CEO, Director 1997 Barton C. Theile 57 Executive Vice Pres., COO, Director 1999 Craig Stratton 52 CFO, Secretary, Treasurer, Director 1999 THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED HEREIN. Business Experience of the Directors JOSEPH M. GUIDO, Chairman of the Board, was the founder of Allstates Air Cargo, Inc., having served as its President and CEO from 1961 until 1999 when it was acquired by the Company. Mr. Guido became Chairman of the Board of the Company upon the acquisition of Allstates Air Cargo, Inc. on August 24, 1999. Prior to forming Allstates Air Cargo, Inc., Mr. Guido served as a freight supervisor with American Airlines, and as a sales and station manager for Air Cargo Consolidators. SAM DIGIRALOMO, became President, CEO and a director of the Company upon the acquisition of Allstates Air Cargo, Inc. on August 24, 1999. Prior to such acquisition, Mr. DiGiralomo had served as the President, Treasurer, CEO and a director of Audiogenesis Systems, Inc. since it was formed in January, 1997. From July 1981 through January 1997, Mr. DiGiralomo had been the President of the predecessor of Audiogenesis Systems, Inc., Genesis Safety Systems, Inc. Mr. DiGiralomo has more than 20 years of management and marketing experience. He has lectured at various trade associations and universities, and designed and authored several employee training programs. BARTON C. THEILE, became Executive Vice President, COO and a director of the Company upon the acquisition of Allstates Air Cargo, Inc. on August 24, 1999. Prior to such acquisition, Mr. Theile had served Allstates Air Cargo, Inc., as a sales representative, operations manager, Executive Vice President and COO over a period of 19 years. In addition to his experience at Allstates, Mr. Theile was President of Cargo Logistics Group, LLC. Mr. Theile has been involved in sales, marketing operations and administration in the transportation industry for over 25 years. CRAIG STRATTON, became CFO, Secretary, Treasurer and a director of the Company upon the acquisition of Allstates Air Cargo, Inc. on August 24, 1999. From November 1997 until such acquisition, Mr. Stratton served as Chief Financial Officer for Allstates Air Cargo, Inc. For three years before joining Allstates, Mr. Stratton held the position of Corporate Controller for Programmer's Paradise, Inc. a cataloger and distributor of technical software. From 1990 through 1994, he was Controller for Baronet Corporation, an importer and distributor of leather goods accessories. From 1981 through 1990, he was employed by the finance department of Contel IPC, a specialty telephone systems manufacturer and service provider, where he held various positions of increasing responsibility in corporate accounting, including an appointment to Assistant Controller in 1987. In 1973, Mr. Stratton received his B.S. in accounting, and in 1980 he earned his MBA, both from Monmouth University. Mr. Stratton has been a CPA since 1986. General Information Board of Directors. The Board of Directors is responsible for supervision of the overall affairs of the Company. To assist it in carrying out of its duties, the Board has delegated certain authority to several committees. The Board of Directors held two meetings during 2003. Overall and individual attendance at the Board and committee meetings was 100 percent. Following the Annual Meeting, the Board will consist of four directors. In the interim between Annual Meetings, the Board has the authority under the By-laws to increase or decrease the size of the Board. How are directors compensated? Directors Compensation. All members of the Board are current employees of the Company, and do not receive any additional compensation for serving on the Board. Do we have an audit committee? We do not have an audit committee at this time, because the Company does not have any independent directors. Our directors have met and held discussions with the independent auditors. The directors believe that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the directors have reviewed and discussed the consolidated financial statements with the independent auditors. Our directors discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). These discussions have included a review as to the quality, not just the acceptability, of the Company's accounting principles. The Company's independent auditors also provided to the directors the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the directors discussed with the independent auditors the auditors' independence from management and the Company. The directors have also considered the compatibility of non-audit services with the auditors' independence. Based upon the directors' discussion with the independent auditors and the directors' review of the report of the independent auditors, we have included the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended September 30, 2003 filed with the Securities and Exchange Commission. The Board of Directors has not adopted an audit committee charter. EXECUTIVE COMPENSATION The following table sets forth all information concerning total compensation earned or paid to the officers of the Company who served in such capacities as of September 30, 2003, the end of our last fiscal year, for services rendered to the Company during each of the last three fiscal years. Summary Compensation Table Annual Compensation Long term compensation ----------------------- -------------------------- Name and Year Salary Bonus Other Awards All Principal ($) ($) Annual Restrict- Options/ LTIP Other Position Compen- ed Stock SARs(#) Pay- Compensa- sation ($) ($) outs($) tion ($) ---------- ---- ------- ----- --------- --------- --------- ------ -------- J. 2003 311,818 81,600(1) Guido, 2002 311,818 81,600(1) Chairman 2001 311,818 87,600(2) of the Board Sam 2003 208,000 413,864(3) DiGiralomo, 2002 208,000 319,595(3) President, 2001 208,000 405,433(3) CEO B. Theile, 2003 206,316 9,271(4) COO, 2002 207,922 4,188(5) Exec. VP 2001 207,922 19,273(5) Craig Stratton, 2003 129,039 7,800(6) CFO, 2002 125,266 5,850(6) Secretary, 2001 120,263 Treasurer
____________ (1) Rental income from leasing of Forked River corporate office (2) Rental income from leasing of Newark branch location and Forked River corporate office (3) Royalties paid in connection with site licensing agreements (4) Car allowance for use of personal auto ($7,800) and commission paid for management services to GTD Logistics, Inc. ($1,471) (5) Commission paid for management services to GTD Logistics, Inc. (6) Car allowance for use of personal auto Employment Agreements On August 24, 1999, the Company entered into Employment Agreements with three of the Company's stockholders, and in 2001, entered into an agreement with a fourth stockholder. The Employment Agreements are effective for the term beginning with inception through December 31, 2004. The following is a summary of the terms of these agreements: Annual Name/Position Salary Bonus Joseph M. Guido, Chairman of The Board $311,818 3% of fiscal year increase in net profits Sam DiGiralomo, President/Chief Executive Officer $208,000 3% of fiscal year increase in net profits Barton C. Theile, Executive Vice President/ Chief Operating Officer $206,316 3% of fiscal year increase in net profits Craig D. Stratton Secretary, Treasurer, $140,000 At the discretion of the Chief Financial Officer Board of Directors Under the terms of their respective employment agreements, Mr. Guido, Mr. DiGiralomo, Mr. Theile and Mr. Stratton have agreed to work full time. The agreements also provide for health and life insurance benefits, participation in the Company's 401(k) plan, disability benefits, expense reimbursements, indemnification from civil or criminal actions arising out of the executive's employment, financial and tax advice, tax "gross-up" provisions, severance pay (equal to 100% of compensation for a period of five years), and payments in the event of a change of control. Option Grants for Fiscal 2003 No options were granted during fiscal 2003, and currently there are no unexercised option grants as of the date of this proxy statement. No officer, director, or other employee consequently received or was entitled to any form of non-cash compensation under any form of plan described or included within Regulation S-K, Section 402(b)(1), Reg. 229.402, Section (b)(1). ITEM 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS The Company has appointed Cowan, Gunteski & Co., P.A. as the Companys independent accountants for the fiscal year ending September 30, 2004. Services provided to the Company by Cowan, Gunteski & Co., P.A. in fiscal year 2003 included the examination of the Companys consolidated financial statements, preparation of federal and state income taxes, and services related to filings with the Securities and Exchanges Commission. Audit Fees. Cowan, Gunteski & Co., P.A. billed us $78,580 in aggregate fees for professional services in fiscal 2003 in connection with the audit of our annual financial statements and the reviews of the financial statements contained in our quarterly reports on Form 10-Q. Other Fees. Cowan, Gunteski & Co., P.A. billed us $28,658 in aggregate fees for professional services in fiscal 2003 in connection with tax-related services. Representatives of Cowan, Gunteski & Co., P.A. will be present at the annual meeting to respond to appropriate questions and to make such statements as they may desire. The Board of Directors Recommends a Vote For Ratification of The Appointment of Cowan, Gunteski & Co., P.A., as The Companys Independent Accountants For Fiscal Year 2004. OTHER MATTERS As of the date of this proxy statement, the Company knows of no business that will be presented for consideration at the annual meeting other than the items referred to above. In the event that any other matter is properly brought before the meeting for action by the stockholders, proxies in the enclosed form returned to the Company will be voted in accordance with the recommendation of the Board of Directors or, in the absence of such a recommendation, in accordance with the judgment of the proxy holder. ADDITIONAL INFORMATION Stockholder Proposals for the 2005 Annual Meeting. Stockholders interested in presenting a proposal for consideration at the Company's annual meeting of stockholders in 2005 may do so by following the procedures prescribed in Rule 14a-8 under the Securities Exchange Act of 1934 and the Company's by-laws. To be eligible for inclusion, stockholder proposals must be received by the Company's Corporate Secretary no later than March 1, 2005. Proxy Solicitation Costs. The proxies being solicited hereby are being solicited by the Company. The cost of soliciting proxies in the enclosed form will be borne by the Company. Officers and regular employees of the Company may, but without compensation other than their regular compensation, solicit proxies by further mailing or personal conversations, or by telephone, facsimile or electronic means. The Company will, upon request, reimburse brokerage firms and others for their reasonable expenses in forwarding solicitation material to the beneficial owners of stock. By order of the Board of Directors: Craig D. Stratton Corporate Secretary PROXY FORM ALLSTATES WORLDCARGO, INC. PROXY FORM 4 Lakeside Drive South, Forked River, New Jersey, 08731 THE BOARD OF DIRECTORS SOLICITS THIS PROXY The undersigned hereby appoint(s) SAM DIGIRALOMO and CRAIG D. STRATTON, or either of them, as attorney, agent and proxy of the undersigned, with full power of substitution, to vote all shares of common stock of Allstates WorldCargo, Inc. that the undersigned would be entitled to cast if personally present at the annual Meeting of the stockholders to be held on September 10, 2004, or at any adjournment thereof. THIS PROXY WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR EACH OF THE BELOW LISTED PERSONS AND PROPOSALS. 1. ELECTION OF FOUR DIRECTORS (TO SERVE UNTIL THE 2005 ANNUAL MEETING): FOR WITHHOLD Withhold authority to vote for the individual all nominees (except as authority to vote for all nominees(s) identified in the space provided below marked to the contrary) nominees ( ) ( ) ________________________________________________
Director Nominees: (1) Joseph M. Guido, (2) Sam DiGiralomo, (3) Barton M. Theile, (4) Craig D. Stratton (Continued on reverse side) 2. Ratify the appointment of Cowan, Gunteski & Co., P.A. as FOR AGAINST ABSTAIN the Company's independent public accountants for the 2004 fiscal year ( ) ( ) ( )
In their discretion, the Proxies are authorized to vote upon other business as may properly come before the meeting. Dated: _____________________ ________________________________ Signature ________________________________ Signature if jointly held