DE | 000-50368 | 26-1631624 | ||
(State or other jurisdiction of incorporation) | Commission File Number: | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description |
10.1 | Form of Restricted Stock Award Agreement under the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan |
10.2 | Form of Performance-Based Stock Unit Award Agreement under the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan |
10.3 | Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan |
AIR TRANSPORT SERVICES GROUP, INC. | |
By: | /S/ W. JOSEPH PAYNE |
W. Joseph Payne | |
Sr. Vice President | |
Corporate General Counsel & Secretary | |
Date: | March 15, 2016 |
• | Read the Plan and the Plan’s Prospectus carefully to ensure you understand how the Plan works; |
• | Read this Award Agreement carefully to ensure you understand the nature of your Award and what you must do to earn it; and |
• | Contact [Name] at [Telephone Number] if you have any questions about your Award. |
• | Your employment terminates because of death, Disability, or upon Retirement; or |
• | There is a Change in Control. |
• | You terminate employment voluntarily (and not due to death, Disability, or Retirement); |
• | You are involuntarily terminated by the Company for “Cause” as defined in the Plan. |
• | You breach any agreement or covenant with, or obligation to, the Company or any Subsidiary, including without limitation, any non-competition agreement, non-solicitation agreement, confidentiality or non-disclosure agreement, or assignment of inventions or ownership of works agreement, as determined by the Committee; |
• | Without the Company’s advance written consent, you engage directly or indirectly in any manner or capacity as principal, agent, officer, director, employee or otherwise in any business or activity competitive with the business conducted by the Company or any of its Subsidiaries, as determined by the Company; or |
• | You perform any act or engage in any activity that is detrimental to the best interests of the Company or any of its Subsidiaries, as determined by the Committee. |
• | The Company or Affiliate may withhold this amount from other amounts owed to you (e.g., from your salary). |
• | You may pay these taxes by giving the Company a check (payable to “Air Transport Services Group, Inc.”) in an amount equal to the taxes that must be withheld. |
• | If approved by the Committee, by having the Company withhold a portion of the shares that otherwise would be distributed. The number of shares withheld will have a fair market value equal to the taxes that must be withheld. |
• | If approved by the Committee, you may give the Company other shares of Company stock (that you have owned for at least six months) with a value equal to the taxes that must be withheld. |
• | A copy of the Plan has been made available to me; |
• |
• | I have received a copy of the Plan’s Prospectus; |
• |
• | I understand and accept the conditions placed on my Award and understand what I must do to earn my Award; |
• |
• | I will consent (on my own behalf and on behalf of my beneficiaries and without any further consideration) to any change to my Award or this Award Agreement to avoid paying penalties under Section 409A of the Internal Revenue Code, even if those changes affect the terms of my Award and reduce its value or potential value; and |
• |
• | If I do not return a signed copy of this Award Agreement to the address shown below not later than [Date], my Award will be revoked automatically as of the date it was granted and I will not be entitled to receive anything on account of the retroactively revoked Award. |
1. | The name, address, taxpayer identification number and taxable year of the undersigned are as follows: |
2. | The property with respect to which the election is made is: [Number] shares of the Common Stock of Air Transport Services Group, Inc., a Delaware corporation (“Company”). |
4. | The property is subject to the following restrictions: Forfeiture in favor of the Company upon termination of taxpayer’s employment before [Date] for reasons other than death, disability, or retirement, or in connection with a change in control. |
5. | The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is [*] per share. |
• | Read the Plan and the Plan’s Prospectus carefully to ensure you understand how the Plan works; |
• | Read this Award Agreement carefully to ensure you understand the nature of your Award and what must happen if you are to earn it; and |
• | Contact [Name] at [Telephone Number] if you have any questions about your Award. |
1. | Nature of Your Award |
a. | Grant Date: Your Performance Units were issued on [Date]. |
b. | Amount of Award: The amount of your Award and the conditions that must be met before it will be earned are discussed below in the section titled “When Your Award Will Be Settled.” |
c. | Performance Period: The period that begins on [Date], and ends on [Date] (the “Settlement Date”). |
2. | When Your Award Will Be Settled |
a. | In General: At the end of the Performance Period, your Performance Units will be converted to an equal number of common shares of the Company or forfeited depending on: |
• | The extent to which the appreciation of the Company stock during the Performance Period equals or exceeds the Total Shareholder Return (“TSR”) performance of the NASDAQ Transportation Index during the same period (these stock units are referred to as “Stock Performance Units”); and |
• | How the Company’s Average Return on Invested Capital for the Performance Period compares to the levels specified in the table below (these stock units are referred to as “ROIC Units”). |
• | Separate criteria are applied to each of the parts of your Award. This means that you might earn Stock Performance Units at the threshold level but earn your ROIC Units at the maximum level. |
• | The NASDAQ Transportation Index is a group comprised of transportation corporations whose stock is traded on the NASDAQ. |
• | “Average ROIC” is equal to the sum of the Company’s ROIC for each fiscal year that began during the Performance Period and ends on December 31, [Year], divided by three. |
• | The Company shall determine its “ROIC” for each fiscal year beginning January 1 and ending each December 31 during the Performance Period, by dividing the NOPAT for such period by its Invested Capital for such period, as such terms are defined below. |
• | The Company’s “NOPAT” for any fiscal year will be equal to the Company’s net operating profit, as shown on the Company’s audited financial statements for such year, multiplied by the factor of one minus the federal statutory income tax rate applicable to the Company for such fiscal year. The Compensation Committee of the Company’s Board of Directors (the |
• | The Company’s “Invested Capital” for any fiscal year is the result obtained by adding the Company’s operating current assets and net fixed assets in operation and subtracting its operating current liabilities, net fixed assets under capital lease and excess cash balances at the end of each calendar quarter of the previous year and dividing by four. |
b. | Your Stock Performance Units: You will earn or forfeit all or part of your Stock Performance Units depending on the extent to which the criteria described in the following table are or are not met. |
If, on December 31, [Year], the Company’s stock performance is . . . | You will receive the following number of shares of Company stock . . . |
Below the 40th percentile of the NASDAQ Transportation Index | 0 |
At the 40th percentile of the NASDAQ Transportation Index (“threshold Stock Performance Unit level”) | [Insert Number]* |
At the 50th percentile of the NASDAQ Transportation Index (“target Stock Performance Unit level”) | [Insert Number]* |
At the 75th or higher percentile of the NASDAQ Transportation Index (“maximum Stock Performance Unit Level”) | [Insert Number]* |
c. | Your ROIC Units: You will earn or forfeit all or part of your ROIC Units depending on the extent to which the criteria described in the following table are or are not met. |
If, over the Performance Period, the Company’s Average Return on Invested Capital is . . . | You will receive the following number of shares of Company stock . . . |
Less than 5% | 0 |
5% (“threshold ROIC Unit level”) | [Insert Number]* |
8% (“target ROIC Unit level”) | [Insert Number]* |
14% or higher (“maximum ROIC Unit level”) | [Insert Number]* |
d. | How Your Award Might Be Settled Before the End of the Performance Period: If there is a Change in Control while you are employed, all performance criteria will be deemed to have been met at the target level or at any higher level actually achieved as of the date of the Change in Control (“Accelerated Units”) and you will receive cash or stock (depending on the nature of the Change in Control) as if the Performance Period ended on the date of the Change in Control. The amount you will receive will be determined under the following formula and paid in accordance with the Plan: |
e. | How Your Award is Settled if You Die, Retire, or Become Disabled Before the End of the Performance Period: If your employment terminates before the end of the Performance Period (and before a Change in Control) because of death, Disability, or Retirement, you may receive a portion of your Award. The amount (if any) you will receive will depend on whether (and the extent to which) the performance criteria are met at the end of the Performance Period, not when you terminate employment subject to the terms of the Plan. If the performance criteria are met at the end of the Performance Period during which you terminate because of death, Disability, or Retirement, you (or your beneficiary) will receive the number of shares you would have received if you had remained actively employed until the end of that Performance Period multiplied by the number of whole years (i.e., elapsed 12-consecutive-month periods) between the first day of the Performance Period and the date you terminate employment and divided by the number of whole years (i.e., elapsed 12-consecutive-month periods) included in the Performance Period. |
f. | How Your Award May Be Forfeited: You will forfeit your Award if, before your Award is settled: |
• | You terminate employment voluntarily (and not due to death, Disability, or Retirement); |
• | You are involuntarily terminated by the Company for “Cause” as defined in the Plan. |
• | You breach any agreement or covenant with, or obligation to, the Company or any Subsidiary, including without limitation, any non-competition agreement, non-solicitation agreement, confidentiality or non-disclosure agreement, or assignment of inventions or ownership of works agreement, as determined by the Committee; |
• | Without the Company’s advance written consent, you engage directly or indirectly in any manner or capacity as principal, agent, officer, director, employee or otherwise in any business or activity competitive with the business conducted by the Company or any of its Subsidiaries, as determined by the Company; or |
• | You perform any act or engage in any activity that is detrimental to the best interests of the Company or any of its Subsidiaries, as determined by the Committee. |
3. | Settling Your Award |
4. | Other Rules Affecting Your Award |
a. | Rights During the Performance Period: During the Performance Period, you will not actually own the shares that you might receive at the end of the Performance Period. This means that you may not exercise any voting rights or receive any dividends associated with those shares until your Award is settled. |
b. | Beneficiary: Your Beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate. |
c. | Tax Withholding: Income taxes must be withheld when your Award is settled (see the Plan’s Prospectus for a discussion of the tax treatment of your Award). These taxes may be paid in one of several ways. They are: |
• | The Company or an Affiliate may withhold this amount from other amounts owed to you (e.g., from your salary). |
• | You may pay these taxes by giving the Company a check (payable to “Air Transport Services Group, Inc.”) in an amount equal to the taxes that must be withheld. |
• | If permitted by the Committee, by having the Company withhold a portion of the shares that otherwise would be distributed. The number of shares withheld will have a fair market value equal to the taxes that must be withheld. |
• | If permitted by the Committee, you may give the Company other shares of Company stock (that you have owned for at least six months) with a value equal to the taxes that must be withheld. |
d. | Governing Law: This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the United States and of the State of Ohio, except to the extent that the Delaware General Corporation Law is mandatorily applicable. |
e. | Other Agreements: Also, your Award will be subject to the terms of any other written agreements between you and the Company. |
f. | Adjustments to Your Award: Your Award will be adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the number of your Performance Units will be adjusted to reflect a stock split). |
g. | Other Rules: Your Performance Units are also subject to more rules described in the Plan and in the Plan’s Prospectus. You should read both these documents carefully to ensure you fully understand all the conditions of this Award. |
h. | Plan Controls: In the event that this Award Agreement conflicts or is inconsistent with any term of the Plan, the Plan shall be deemed controlling. |
5. | Your Acknowledgment of Award Conditions |
• | A copy of the Plan has been made available to me; |
• | I have received a copy of the Plan’s Prospectus; |
• | I understand and accept the conditions placed on my Award and understand what I must do to earn my Award; |
• | I will consent (on my own behalf and on behalf of my beneficiaries and without any further consideration) to any change to my Award or this Award Agreement to avoid paying penalties under Section 409A of the Internal Revenue Code, even if those changes affect the terms of my Award and reduce its value or potential value; and |
• | If I do not return a signed copy of this Award Agreement to the address shown below not later than [Date], my Award will be revoked automatically as of the date it was granted and I will not be entitled to receive anything on account of the retroactively revoked Award. |
• | Read the Plan and the Plan’s Prospectus carefully to ensure you understand how the Plan works; |
• | Read this Award Agreement carefully to ensure you understand the nature of your Award and what you must do to earn it; and, |
• | Contact [Name] at [Telephone Number] if you have any questions about your Award. |
1. | Nature of Your Award |
a. | Grant Date: Your RSUs were issued on [Date]. |
b. | Number of RSUs: You have been granted [Number] RSUs. The conditions that you must meet before the Award matures into shares of Company stock are discussed below in the section titled “When Your Award Will Be Settled.” |
c. | Restriction Period: The period that begins on the Grant Date (i.e., [Date]) and ends on the first anniversary of the Grant Date. |
2. | When Your Award Will Be Settled |
• | Normal Settlement Date: If you continue to serve as a non-employee director throughout the Restriction Period, your RSUs will be converted to an equal number of shares of Company stock and distributed to you within 60 days following the end of the Restriction Period. However, if you do not continue to serve as a non-employee director throughout the Restriction Period, your RSUs will be forfeited. However, your RSUs may be settled earlier or later under the circumstances described in the next sections. |
• | How Your RSUs Might Be Settled Earlier Than the Normal Settlement Date: All restrictions on your RSUs will be removed automatically and [Number] shares of Company stock will be distributed to you if, before the end of the Restriction Period: |
• | Your board service terminates because of death, Disability (as defined in the Plan) or after completing one full term as a board member; or |
• | There is a Business Combination (as defined in the Plan). |
• | How Your RSUs Might Be Settled Later Than The Normal Settlement Date: You may elect to defer settlement of your RSUs to either a specific date after the end of the Restriction Period or to |
• | How Your RSUs May Be Forfeited: You will forfeit any RSUs if, before your RSUs are settled: |
• | Without the Company’s advance written consent, you agree to or actually serve in any capacity for a business or entity that competes with any portion of the Company’s or any Subsidiary’s (as defined in the Plan) business or provide services (including business consulting) to an entity that competes with any portion of the Company’s or any Subsidiary’s business; |
• | You refuse or fail to consult with, supply information to or otherwise cooperate with the Company after having been requested to do so; or |
• | You deliberately engage in any action that the Company decides harms the Company or any Subsidiary. |
3. | Settling Your Award |
4. | Other Rules Affecting Your Award |
a. | Until Your RSUs are Settled: Until your RSUs are settled, you may not exercise any voting rights associated with shares underlying your RSUs. Nor will you be entitled to receive any dividends paid on these shares. |
b. | Beneficiary Designation: You may name a Beneficiary or Beneficiaries to receive any portion of your Award that is settled after you die. This may be done only on the attached Beneficiary Designation Form and by following the rules described in that form and in the Plan. If you have not made an effective Beneficiary designation, your Beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate. |
c. | Tax Withholding: You (and not the Company) are solely responsible for any income and other tax withholding obligation associated with this Award or its conversion to shares of Company stock. |
d. | Transferring Your RSUs: Normally your RSUs may not be transferred to another person. However, you may complete a Beneficiary Designation Form to name the person to receive the value of any RSUs that are settled after you die. Also, the Committee may allow you to place your RSUs into a trust established for your benefit or the benefit of your family. Contact [Name] at [Telephone Number] or at the address given below if you are interested in doing this. |
e. | Governing Law: This Award Agreement will be construed in accordance with and governed by the laws (other than laws governing conflicts of laws) of the United States and of the State of Ohio, except to the extent that the Delaware General Corporation Law is mandatorily applicable. |
f. | Other Agreements: Also, your RSUs will be subject to the terms of any other written agreements between you and the Company. |
g. | Adjustments to Your RSUs: Your Award will be adjusted, if appropriate, to reflect any change to the Company’s capital structure (e.g., the number of your RSUs will be adjusted to reflect a stock split). |
h. | Other Rules: Your RSUs also are subject to more rules described in the Plan and in the Plan’s Prospectus. You should read both these documents carefully to ensure you fully understand all the conditions of this Award. |
5. | Tax Treatment of Your Award |
6. | Your Acknowledgment of Award Conditions |
• | A copy of the Plan has been made available to me; |
• | I have received a copy of the Plan’s Prospectus; |
• | I understand and accept the conditions placed on my Award and understand what I must do to earn my Award; |
• | I will consent (on my own behalf and on behalf of my beneficiaries and without any further consideration) to any change to my Award or this Award Agreement to avoid paying penalties under Section 409A of the Internal Revenue Code, even if those changes affect the terms of my Award and reduce its value or potential value; and, |
• | If I do not return a signed copy of this Award Agreement to the address shown below not later than [Date], my Award will be revoked automatically as of the date it was granted and I will not be entitled to receive anything on account of the retroactively revoked Award. |
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