UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
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Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 15, 2016
_____________________
(Exact name of registrant as specified in its charter)
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DE
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000-50368
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26-1631624
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(State or other jurisdiction
of incorporation)
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Commission
File Number:
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(IRS Employer
Identification No.)
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145 Hunter Drive, Wilmington, OH 45177
(Address of principal executive offices, including zip code)
(937) 382-5591
(Registrant's telephone number, including area code)
_____________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Air Transport Services Group, Inc. (the “Company”) has adopted (i) a form of restricted stock award agreement (the “Restricted Stock Award Agreement”) for the grant of restricted stock awards to officers and other designated employees (the “Restricted Stock”) under the terms of the Company’s 2015 Long-Term Incentive Plan (the “2015 Plan”), and (ii) a form of performance-based stock unit award agreement (the “Performance-Based Stock Unit Award Agreement”) for the grant of performance-based stock units (the “Performance Units”) to officers and other designated employees under the terms of the 2015 Plan.
Under the terms of the 2015 Plan and the Restricted Stock Award Agreement, an award of Restricted Stock will cover a target number of Restricted Stock. The Restricted Stock will vest and be earned, if at all, after the completion of a period of time specified in the Restricted Stock Award Agreement (the “Restriction Period”), based on (1) the participant meeting all conditions set forth in the Restricted Stock Award Agreement and the 2015 Plan and (2) the participant’s continued employment through the end of the Restricted Period (except in the case of termination due to death, Disability, Retirement or a Change in Control (all as defined in the 2015 Plan)).
Under the terms of the 2015 Plan and the Performance-Based Stock Unit Award Agreement, a performance-based award will cover a target number of Performance Units. The Performance Units will vest and be earned, if at all, after the completion of the performance period set forth in the Performance-Based Stock Unit Award Agreement (the “Performance Period”), based on (1) the extent to which the appreciation of the Company stock during the Performance Period equals or exceeds the Total Shareholder Return performance of the NASDAQ Transportation Index during the same period, (2) how the Company’s Average Return on Invested Capital for the Performance Period compares to the levels specified in the Performance-Based Stock Unit Award Agreement and (3) the participant’s continued employment through the end of the Performance Period (except in the case of termination due to death, Disability, Retirement or a Change in Control (all as defined in the 2015 Plan)).
The foregoing description of the terms of the Restricted Stock Award Agreement and the Performance-Based Stock Unit Award Agreement are qualified in their entirety by reference to the provisions of the Restricted Stock Award Agreement and the Performance-Based Stock Unit Award Agreement, which are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.
Item 8.01 Other Events.
The Company has adopted a form of restricted stock unit award agreement for the annual grant of restricted stock unit awards under the terms of the 2015 Plan to non-employee directors of the Company (the “Non-Employee Director Restricted Stock Unit Award Agreement”). The Non-Employee Director Restricted Stock Unit Award Agreement is filed herewith as Exhibit 10.3 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
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Exhibit No.
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Description
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10.1
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Form of Restricted Stock Award Agreement under the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan
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10.2
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Form of Performance-Based Stock Unit Award Agreement under the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan
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10.3
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Form of Restricted Stock Unit Award Agreement for Non-Employee Directors under the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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AIR TRANSPORT SERVICES GROUP, INC.
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By:
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/S/ W. JOSEPH PAYNE
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W. Joseph Payne
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Sr. Vice President
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Corporate General Counsel & Secretary
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Date:
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March 15, 2016
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THIS FORM OF AWARD AGREEMENT IS PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AIR TRANSPORT SERVICES GROUP, INC.
2015 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
GRANTED TO [NAME] ON [DATE]
Air Transport Services Group, Inc. (the “Company”) and its shareholders believe that their business interests are best served by extending to you an opportunity to earn additional compensation based on the growth and success of the Company’s business. To this end, the Company and its shareholders adopted the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan (the “Plan”) as a means through which you may share in the Company’s success. This is done by granting Awards to key employees like you. If the conditions described in this Award Agreement (and the Plan) are met, your Award will mature into common shares of the Company.
This Award Agreement describes many features of your Award and the conditions that must be satisfied before you may receive the value associated with your Award. All capitalized terms have the meaning set forth in the Plan unless otherwise specified in this Award Agreement. To ensure you fully understand these terms and conditions, you should:
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Read the Plan and the Plan’s Prospectus carefully to ensure you understand how the Plan works;
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Read this Award Agreement carefully to ensure you understand the nature of your Award and what you must do to earn it; and
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Contact [Name] at [Telephone Number] if you have any questions about your Award.
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Also, no later than [Date], you must return a signed copy of the Award Agreement to:
[Name]
Air Transport Services Group, Inc.
145 Hunter Drive
Wilmington, Ohio 45177
If you do not do this, your Award will be revoked automatically as of the date it was granted and you will not be entitled to receive anything on account of the retroactively revoked Award.
Section 409A of the Internal Revenue Code (“Section 409A”) imposes substantial penalties on persons who receive some forms of deferred compensation (see the Plan’s Prospectus for more information about these penalties). Your Award has been designed to avoid these penalties. As a condition of accepting this Award, you must agree to accept any revisions to your Award Agreement that the Company subsequently determines necessary in order for you to avoid these penalties, without any further consideration, even if those revisions change the terms of your Award and reduce its value or potential value.
Nature of Your Award
You have been granted Restricted Stock. If you satisfy the conditions described in this Award Agreement, the restrictions imposed on your Restricted Stock will be removed and you will own the shares. Federal income tax rules apply to Restricted Stock. These and other conditions affecting your Restricted Stock are described in this Award Agreement, the Plan and the Plan’s Prospectus, all of which you should read carefully.
Grant Date
: Your shares of Restricted Stock were issued on [Date].
This is the date you begin to earn your Award.
Number of Shares of Restricted Stock
: You have been granted [Number] shares of Restricted Stock. The conditions that you must meet before you actually own these shares are discussed below in the section titled “When Your Award Will Be Settled.”
Restricted Period
: The period that begins on the Grant Date (i.e., [Date]) and ends on [Date] (the “Settlement Date”).
This is the period over which the Committee will determine if you have met the conditions imposed on your Award.
When Your Award Will Be Settled
During the Restricted Period, your Restricted Stock will be held in escrow. On the Settlement Date, these shares either will be distributed to you, free of any restrictions, or forfeited, depending on whether or not the conditions described in this Award Agreement and in the Plan have been satisfied. You may exercise any voting rights associated with your Restricted Stock while it is held in escrow. Any dividends paid on your Restricted Stock during the Restricted Period also will be held in escrow and paid or forfeited on the Settlement Date, depending on whether or not you satisfy the conditions described in this Award Agreement and in the Plan have been satisfied.
Settlement Date
: Normally, restrictions on your Restricted Stock will be removed automatically and [Number] shares of Company common stock will be distributed to you if you are actively employed on [Date] and have been actively employed since the Grant Date. However, your Restricted Stock may be settled earlier in the circumstances described in the next section.
When Your Restricted Stock Might Be Settled Earlier Than the Settlement Date
: All restrictions on your Restricted Stock will be removed automatically and the shares of Company common stock will be distributed to you if, before the Settlement Date:
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Your employment terminates because of death, Disability, or upon Retirement; or
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There is a Change in Control.
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How Your Restricted Stock May Be Forfeited
: You will forfeit any Restricted Stock if, before your Restricted Stock is settled:
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You terminate employment voluntarily (and not due to death, Disability, or Retirement);
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You are involuntarily terminated by the Company for “Cause” as defined in the Plan.
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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;
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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
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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.
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Settling Your Award
If all applicable conditions have been met, your Restricted Stock will be settled automatically.
Other Rules Affecting Your Award
Rights During the Restricted Period
: During the Restricted Period (and even though these shares are held in escrow until they are settled), you may exercise any voting rights associated with your Restricted Stock. Dividends paid on the Restricted Stock, if any, will be held in escrow until the Award is settled and distributed to you (or forfeited) depending on whether or not you have met the conditions described in this Award Agreement and in the Plan.
Beneficiary
: Your Beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate.
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:
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The Company or Affiliate may withhold this amount from other amounts owed to you (e.g., from your salary).
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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.
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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.
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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.
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The Company may reject your requested method of withholding for any reason (or for no reason). If this happens, the Company will specify (from among the alternatives just listed) how these taxes are to be paid.
If you do not choose a method within 30 days of the Settlement Date, the Company will 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 and the balance of the shares will be distributed to you.
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.
Other Agreements
: Also, your Restricted Stock will be subject to the terms of any other written agreements between you and the Company.
Other Rules
: Your Restricted Stock also is 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.
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.
You may contact [Name] at [Telephone Number] or at the address given below if you have any questions about your Award or this Award Agreement.
*****
Your Acknowledgment of Award Conditions
Note: You must sign and return a copy of this Award Agreement to [Name] at the address given below no later than [Date].
By signing below, I acknowledge and agree that:
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A copy of the Plan has been made available to me;
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I have received a copy of the Plan’s Prospectus;
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I understand and accept the conditions placed on my Award and understand what I must do to earn my Award;
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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
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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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[Name]
___________________________________________
(signature)
Date signed: _______________________
A signed copy of this form must be sent to the following address no later than [Date]:
[Name]
Air Transport Services Group, Inc.
145 Hunter Drive
Wilmington, Ohio 45177
After it is received, the Committee will acknowledge receipt of your signed Award Agreement.
*****
Committee’s Acknowledgment of Receipt
A signed copy of this Award Agreement was received on ________________.
By: _____________________________
Committee Member
[Name]:
_______ Has complied with the conditions imposed on the grant and the Award and the Award Agreement remains in effect; or
_______ Has not complied with the conditions imposed on the grant and the Award and the Award Agreement are revoked as of the Grant Date because
_______________________________________________________________________________________
describe deficiency
Committee
By: ______________________
Date:
_______________________
AIR TRANSPORT SERVICES GROUP, INC.
2015 LONG-TERM INCENTIVE PLAN
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code, to include in taxpayer’s gross income for the current taxable year, the amount of any income that may be taxable to taxpayer in connection with taxpayer’s receipt of the property described below:
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1.
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The name, address, taxpayer identification number and taxable year of the undersigned are as follows:
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NAME OF TAXPAYER: [Name]
ADDRESS: ________________________
________________________
________________________
IDENTIFICATION NUMBER OF TAXPAYER: ________________________
TAXABLE YEAR: Calendar year 20__
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2.
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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”).
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3.
The date on which the property was transferred is: [Date]
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4.
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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.
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5.
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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.
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6.
The amount (if any) paid for such property: [*]
The undersigned has submitted a copy of this statement to Air Transport Services Group, Inc. The transferee of such property is the person performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.
Dated: _________________
__________________________________
[Name]
THIS FORM OF AWARD AGREEMENT IS PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AIR TRANSPORT SERVICES GROUP, INC.
2015 LONG-TERM INCENTIVE PLAN
PERFORMANCE-BASED STOCK UNIT AWARD AGREEMENT
GRANTED TO [NAME] ON [DATE]
Air Transport Services Group, Inc. (the “Company”) and its shareholders believe that their business interests are best served by extending to you an opportunity to earn additional compensation based on the growth and success of the Company’s business. To this end, the Company and its shareholders adopted the Air Transport Services Group, Inc. 2015 Long-Term Incentive Plan (the “Plan”) as a means through which you may share in the Company’s success. This is done by granting Awards to key employees like you. If the conditions described in this Award Agreement (and the Plan) are met, your Award will mature into common shares of the Company.
This Award Agreement describes many features of your Award and the conditions that must be met before you may receive the value associated with your Award. All capitalized terms have the meaning set forth in the Plan unless otherwise specified in this Award Agreement. To ensure you fully understand these terms and conditions, you should:
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Read the Plan and the Plan’s Prospectus carefully to ensure you understand how the Plan works;
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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
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Contact [Name] at [Telephone Number] if you have any questions about your Award.
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Also, no later than [Date], you must return a signed copy of the Award Agreement to:
[Name]
Air Transport Services Group, Inc.
145 Hunter Drive
Wilmington, Ohio 45177
If you do not do this, your Award will be revoked automatically as of the date it was granted and you will not be entitled to receive anything on account of the retroactively revoked Award.
Section 409A of the Internal Revenue Code (“Section 409A”) imposes substantial penalties on persons who receive some forms of deferred compensation (see the Plan’s Prospectus for more information about these penalties). Your Award has been designed to avoid these penalties. As a condition of accepting this Award, you must agree to accept any revisions that the Company subsequently determines to be necessary in order
for you to avoid these penalties, without any further consideration, even if those revisions change the terms of your Award and reduce its value or potential value.
You have been granted an Award consisting of performance stock units (“Performance Units”), which will be converted to common shares of the Company if the conditions described in this Award Agreement are met. Federal income tax rules apply to the payment of your Award. These and other conditions affecting your Award are described in this Award Agreement, the Plan and the Plan’s Prospectus, all of which you should read carefully.
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a.
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Grant Date:
Your Performance Units were issued on [Date].
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This is the date you begin to earn your Award.
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b.
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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.”
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c.
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Performance Period:
The period that begins on [Date], and ends on [Date] (the “Settlement Date”).
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This is the period over which the Committee will determine if you have met the conditions imposed on your Award.
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2.
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When Your Award Will Be Settled
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a.
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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:
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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
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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”).
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The tables below demonstrate how these criteria will affect your Award. However, before analyzing those tables, it is important that you understand that:
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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.
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The NASDAQ Transportation Index is a group comprised of transportation corporations whose stock is traded on the NASDAQ.
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“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.
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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.
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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
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“Committee”) may exclude any extraordinary, non-recurring items from the determination of NOPAT for any period, in its discretion.
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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.
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All determinations of the Company’s TSR, Average ROIC, ROIC, NOPAT, and Invested Capital for purposes of the Award will be made by the Committee, whose decision will be final, nonappealable and binding for every purpose. The number of Stock Performance Units or ROIC Units that are earned or forfeited by you will also be determined by the Committee, whose decision will be final, nonappealable and binding on you.
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b.
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Your Stock Performance Units
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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.
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If, on December 31, [Year], the Company’s stock performance is . . .
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You will receive the following number of shares of Company stock . . .
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Below the 40
th
percentile of the NASDAQ Transportation Index
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0
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At the 40th percentile of the NASDAQ Transportation Index (“threshold Stock Performance Unit level”)
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[Insert Number]*
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At the 50th percentile of the NASDAQ Transportation Index (“target Stock Performance Unit level”)
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[Insert Number]*
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At the 75th or higher percentile of the NASDAQ Transportation Index (“maximum Stock Performance Unit Level”)
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[Insert Number]*
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* Note: For performance outcomes between the specified percentile levels, actual awards will be interpolated.
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c.
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Your ROIC Units
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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.
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If, over the Performance Period, the Company’s Average Return on Invested Capital is . . .
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You will receive the following number of shares of Company stock . . .
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Less than 5%
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0
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5% (“threshold ROIC Unit level”)
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[Insert Number]*
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8% (“target ROIC Unit level”)
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[Insert Number]*
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14% or higher (“maximum ROIC Unit level”)
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[Insert Number]*
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* Note: For performance outcomes between these stated ROIC levels, actual awards will be interpolated.
As noted above, between the threshold and maximum performance levels, actual awards will be calculated by interpolating between the ranges shown in the preceding tables. This interpolation will be done only in whole increments (full percentiles for the Stock Performance Units and percentages to the nearest 10
th
for the ROIC Units) and will not be applied below the threshold level or above the maximum level.
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d.
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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:
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Your Accelerated Units
multiplied by
the number of whole months between the beginning of the Performance Period and the date of the Change in Control
Divided by
the number of whole months in the Performance Period
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e.
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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.
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f.
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How Your Award May Be Forfeited:
You will forfeit your Award if, before your Award is settled:
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You terminate employment voluntarily (and not due to death, Disability, or Retirement);
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You are involuntarily terminated by the Company for “Cause” as defined in the Plan.
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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;
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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
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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.
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If all applicable conditions have been met, your Award will be settled within 60 days following the end of the Performance Period.
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4.
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Other Rules Affecting Your Award
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a.
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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.
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b.
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Beneficiary:
Your Beneficiary will be your surviving spouse or, if you do not have a surviving spouse, your estate.
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c.
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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:
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•
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The Company or an Affiliate may withhold this amount from other amounts owed to you (e.g., from your salary).
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•
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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.
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•
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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.
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•
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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.
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The Company may reject your requested method of satisfying your withholding obligation for any reason (or for no reason). If this happens, the Company will specify (from among the alternatives just listed) how these taxes are to be paid.
If you do not choose a method within 30 days of the Settlement Date, the Company will 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 and the balance of the shares will be distributed to you.
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d.
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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.
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e.
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Other Agreements:
Also, your Award will be subject to the terms of any other written agreements between you and the Company.
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f.
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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).
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g.
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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.
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h.
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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.
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****
You may contact [Name] at [Telephone Number] or at the address given below if you have any questions about your Award or this Award Agreement.
****
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5.
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Your Acknowledgment of Award Conditions
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Note:
You must sign and return a copy of this Award Agreement to [Name] at the address given below no later than [Date].
By signing below, I acknowledge and agree that:
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•
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A copy of the Plan has been made available to me;
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•
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I have received a copy of the Plan’s Prospectus;
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•
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I understand and accept the conditions placed on my Award and understand what I must do to earn my Award;
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•
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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
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•
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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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[Name]
______________________________________________
(signature)
Date signed: ________________________
A signed copy of this form must be sent to the following address no later than [Date]:
[Name]
Air Transport Services Group, Inc.
145 Hunter Drive
Wilmington, Ohio 45177
After it is received, the Committee will acknowledge receipt of your signed Award Agreement.
*****
Committee’s Acknowledgment of Receipt
A signed copy of this Award Agreement was received on ________________.
By: ________________________________
Committee signature
[Name]
______ Has complied with the conditions imposed on the grant and the Award and the Award Agreement remains in effect; or
______ Has not complied with the conditions imposed on the grant and the Award and the Award Agreement are revoked as of the Grant Date because
____________________________________________________________________________________________
describe deficiency
Committee
By: ___________________________________
Date: __________________________________
THIS FORM OF AWARD AGREEMENT IS PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AIR TRANSPORT SERVICES GROUP, INC.
2015 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD AGREEMENT
GRANTED TO [NAME] ON [DATE]
Air Transport Services Group (“Company”) and its shareholders believe that their business interests are best served by extending to you an opportunity to earn additional compensation based on the growth of the Company’s business. To this end, the Company and its shareholders adopted the Air Transport Services Group 2015 Long-Term Incentive Plan (“Plan”) as a means through which you may share in the Company’s success. This is done by granting Awards to non-employee directors like you. If you satisfy the conditions described in this Agreement (and the Plan), your Award will mature into common shares of the Company.
This Award Agreement describes many features of your Award and the conditions you must meet before you may receive the value associated with your Award. To ensure you fully understand these terms and conditions, you should:
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•
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Read the Plan and the Plan’s Prospectus carefully to ensure you understand how the Plan works;
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•
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Read this Award Agreement carefully to ensure you understand the nature of your Award and what you must do to earn it; and,
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•
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Contact [Name] at [Telephone Number] if you have any questions about your Award.
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Also, no later than [Date] you must return a signed copy of the Award Agreement to:
[Name]
Air Transport Services Group
145 Hunter Drive
Wilmington, Ohio 45177
If you do not do this, your Award will be revoked automatically as of the date it was granted and you will not be entitled to receive anything on account of the retroactively revoked Award.
Section 409A of the Internal Revenue Code (“Section 409A”) imposes substantial penalties on persons who receive some forms of deferred compensation (see the Plan’s Prospectus for more information about these penalties). Your Award has been designed to avoid these penalties. As a condition of accepting this Award, you must agree to accept any revisions to your Award Agreement that the Company subsequently determines to be necessary in order for you to avoid these penalties, without any further consideration, even if those revisions change the terms of your Award and reduce its value or potential value.
You have been granted Restricted Stock Units (“RSUs”). If you satisfy the conditions described in this Award Agreement, your RSUs will be converted into an equal number of shares of Company stock. Federal income tax rules apply to RSUs. These and other conditions affecting your RSUs are described in this Award Agreement, the Plan and the Plan’s Prospectus, all of which you should read carefully.
No later than [Date], you must return a signed copy of this Award Agreement to:
[Name]
Air Transport Services Group
145 Hunter Drive
Wilmington, Ohio 45177
If you do not do this, your Award will be revoked automatically as of the Grant Date and you will not be entitled to receive anything on account of the retroactively revoked Award.
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a.
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Grant Date
: Your RSUs were issued on [Date].
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This is the date you begin to earn your Award.
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b.
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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.”
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c.
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Restriction Period
: The period that begins on the Grant Date (i.e., [Date]) and ends on the first anniversary of the Grant Date.
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This is the period over which the Plan committee will determine if you have met the conditions imposed on your Award.
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2.
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When Your Award Will Be Settled
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•
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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.
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•
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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:
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•
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Your board service terminates because of death, Disability (as defined in the Plan) or after completing one full term as a board member; or
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•
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There is a Business Combination (as defined in the Plan).
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•
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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
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your Termination of Service (as defined in the Plan) by completing a deferral election form (in the form attached to this Agreement) by no later than December 31 immediately preceding the calendar year during which you are to perform services to the Company as a non-employee director for which such RSUs are to be granted.
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•
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How Your RSUs May Be Forfeited
: You will forfeit any RSUs if, before your RSUs are settled:
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•
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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;
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•
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You refuse or fail to consult with, supply information to or otherwise cooperate with the Company after having been requested to do so; or
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•
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You deliberately engage in any action that the Company decides harms the Company or any Subsidiary.
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If all applicable conditions have been met, your RSUs will be settled. At that time, you will receive one share of Company stock for each RSU you have earned.
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4.
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Other Rules Affecting Your Award
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a.
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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.
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b.
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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.
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c.
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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.
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d.
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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.
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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.
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f.
|
Other Agreements
: Also, your RSUs will be subject to the terms of any other written agreements between you and the Company.
|
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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.
|
|
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|
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5.
|
Tax Treatment of Your Award
|
The federal income tax treatment of your RSUs is discussed in the Plan’s Prospectus which you should read carefully.
*****
You may contact [Name] at [Telephone Number] or at the address given below if you have any questions about your Award or this Award Agreement.
*****
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6.
|
Your Acknowledgment of Award Conditions
|
Note: You must sign and return a copy of this Award Agreement to [Name] at the address given below no later than [Date].
By signing below, I acknowledge and agree that:
|
|
|
|
•
|
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.
|
[Name]
(signature)
Date signed:
A signed copy of this form must be sent to the following address no later than [Date]:
[Name]
Air Transport Services Group
145 Hunter Drive
Wilmington, Ohio 45177
After it is received, the Air Transport Services Group 2015 Long-Term Incentive Plan Committee will acknowledge receipt of your signed agreement.
*****
Committee’s Acknowledgment of Receipt
A signed copy of this Award Agreement was received on ________________.
By: ________________________
Committee signature
[Name]:
______ Has complied with the conditions imposed on the grant and the Award and the Award Agreement remains in effect; or
______ Has not complied with the conditions imposed on the grant and the Award and the Award Agreement are revoked as of the Grant Date because
___________________________________________________________________________________________
describe deficiency
Air Transport Services Group 2015 Long-Term Incentive Plan Committee
By: ____________________________________
Date: ___________________________________
AIR TRANSPORT SERVICES GROUP
AMENDED AND RESTATED
2015 LONG-TERM INCENTIVE PLAN
BENEFICIARY DESIGNATION FORM
RELATING TO RESTRICTED STOCK UNITS ISSUED TO
[NAME] ON [DATE]
Instructions for Completing This Form
You may use this form to
[1]
name the person you want to receive any amount due under the Air Transport Services Group 2015 Long-Term Incentive Plan after your death or
[2]
change the person who will receive these benefits.
There are several things you should know before you complete this form.
First,
if you do not elect another Beneficiary, any amount due to you under the Plan when you die will be paid to your surviving spouse or, if you have no surviving spouse, to your estate.
Second,
your election will not be effective (and will not be implemented) unless you complete all applicable portions of this form.
Third,
your election will be effective only if this form is completed properly and returned to [Name] at the address given below.
Fourth,
all elections will remain in effect until they are changed (or until all death benefits are paid).
Fifth,
if you designate your spouse as your Beneficiary but are subsequently divorced from that person (or your marriage is annulled), your Beneficiary designation will be revoked automatically.
Sixth,
if you have any questions about this form or if you need additional copies of this form, please contact [Name] at [Telephone Number] or at the address given below.
1.00
Designation of Beneficiary
1.01 Primary Beneficiary
I designate the following persons as my Primary Beneficiary or Beneficiaries to receive any amount due under the Award Agreement described at the top of this form after my death. This benefit will be paid, in the proportion specified, to:
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
1.02 Contingent Beneficiary
If one or more of my Primary Beneficiaries dies before I die, I direct that any amount due under the Award Agreement described at the top of this form after my death:
_____ Be paid to my other named Primary Beneficiaries in proportion to the allocation given above (ignoring the interest allocated to the deceased Primary Beneficiary); or
_____ Be distributed among the following Contingent Beneficiaries.
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
_________ % to ______________________________________________________________________________
(Name)
(Relationship)
Address: ____________________________________________________________________________________
****
Elections made on this form will be effective only after this form is received by [Name] and only if it is fully and properly completed and signed.
Name: [Name]
Soc. Sec. No.:
___________________________________________________________________________________
Date of Birth:
___________________________________________________________________________________
Address: __________________________________________________________________________
__________________________________________________________________________________________________
Sign and return this form to [Name] at the address given below
____________________________
__________________________________
Date
Signature
Return this signed form to [Name] at the following address:
[Name]
Air Transport Services Group
145 Hunter Drive
Wilmington, Ohio 45177
Received on:
_____________________
By: __________________________
