UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 10)
AIR T, INC.
(Name of Issuer)
Common Stock, par value of $.25 per share
(Title of Class of Securities)
009207101
(CUSIP Number)
AO Partners I, L.P.
3033 Excelsior Blvd., Suite 560
Minneapolis, MN 55416
Telephone: (612) 353-6380
(Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications)
May 6, 2013
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
| 1 |
NAME OF REPORTING PERSON
AO Partners I, L.P. | |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
|
(a) T
|
| 3 | SEC USE ONLY | |
| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC | |
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨ |
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER
0 |
| 8 |
SHARED VOTING POWER
363,700 | |
| 9 |
SOLE DISPOSITIVE POWER
0 | |
| 10 |
SHARED DISPOSITIVE POWER
363,700 |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
363,700 | |
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) |
¨
|
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9% | |
| 14 |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN | |
| 2 |
| 1 |
NAME OF REPORTING PERSON
AO Partners, LLC | |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) |
(a) T
|
| 3 | SEC USE ONLY | |
| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC | |
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨
|
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER
0 |
| 8 |
SHARED VOTING POWER
363,700 | |
| 9 |
SOLE DISPOSITIVE POWER
0 | |
| 10 |
SHARED DISPOSITIVE POWER
363,700 |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
363,700 | |
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
|
¨
|
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9% | |
| 14 |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN | |
| 3 |
| 1 |
NAME OF REPORTING PERSON
Nicholas J. Swenson | |
| 2 |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
|
(a) T
|
| 3 | SEC USE ONLY | |
| 4 |
SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF | |
| 5 |
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨
|
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
United States | |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 |
SOLE VOTING POWER
0 |
| 8 |
SHARED VOTING POWER
363,700 | |
| 9 |
SOLE DISPOSITIVE POWER
0 | |
| 10 |
SHARED DISPOSITIVE POWER
363,700 |
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
363,700 | |
| 12 |
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
|
¨
|
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9% | |
| 14 |
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN | |
| 4 |
| Item 1. | Security and Issuer. |
This Amended Schedule 13D relates to shares of the Common Stock, $.25 par value (the “Common Stock”), of Air T, Inc., a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 3524 Airport Road, Maiden, North Carolina 28650.
| Item 2. | Identity and Background. |
This Amended Schedule 13D is being filed jointly by the parties identified below.
| · | AO Partners I, L.P., a Delaware limited partnership (“AO Partners Fund”). |
| · | AO Partners, LLC, a Delaware limited liability company and General Partner of AO Partners (“AO Partners”). |
| · | Nicholas J. Swenson as the Managing Member of AO Partners and as a Director of the Issuer. |
Each of the foregoing is referred to as a “Reporting Person” and, collectively, as the “Reporting Persons.” Each of the Reporting Persons is a party to that certain Joint Filing Agreement attached as Exhibit 1 to Amendment No. 2 to the Schedule 13D.
(a) – (c) This statement is filed by Mr. Swenson, with respect to the shares of Common Stock beneficially owned by him, as follows: shares of Common Stock held in the name of AO Partners Fund in Mr. Swenson’s capacity as Managing Member of AO Partners and as a Director of the Issuer.
The principal business address of each of AO Partners Fund, AO Partners and Mr. Swenson is 3033 Excelsior Blvd., Suite 560, Minneapolis, MN 55416. Each of AO Partners Fund and AO Partners are engaged in various interests, including investments.
The principal employment of Mr. Swenson is (1) private investor and (2) serving as the sole Managing Member of AO Partners and Groveland Capital, LLC, a Delaware limited liability company.
(d) None of the Reporting Persons described herein has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons described herein has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.
(f) Mr. Swenson is a citizen of the United States of America.
| 5 |
| Item 3. | Source and Amount of Funds or Other Consideration. |
The Common Stock was acquired in open market purchases with working capital of AO Partners Fund and the personal investment capital of Mr. Swenson.
| Item 4. | Purpose of Transaction. |
The Reporting Persons acquired shares of Common Stock because they believe that the Common Stock is undervalued. The Reporting Persons’ intent is to influence the policies of the Issuer and assert the Reporting Persons’ shareholder rights, with a goal of maximizing the value of the Common Stock.
On March 30, 2012, Mr. Swenson requested that the Board of Directors of the Issuer appoint him and Mr. Seth Barkett as directors of the Issuer. A copy of the letter is attached as Exhibit 2 to Amendment No. 3 to the Schedule 13D.
On August 30, 2012, Mr. Swenson was appointed a Director of the Issuer.
On April 4, 2013, Mr. Swenson presented the attached board reform plan to Air T’s Lead Director. He received a response from CEO Walter Clark, through the Lead Director, on April 12, 2013. The response from Mr. Clark is not shown. The response by Mr. Clark on April 12th established that Mr. Swenson and Mr. Clark have divergent viewpoints about board reform. A copy of the plan is attached as Exhibit 3 to Amendment No. 7 to the Schedule 13D.
On April 25, 2013, Mr. Swenson presented the attached amended board reform plan to Air T’s Lead Independent Director (this letter dated April 25, 2013 slightly modified and superseded a letter dated April 24, 2013). A copy of the plan is attached as Exhibit 4 to Amendment No. 8 to the Schedule 13D.
Mr. Swenson received a communication on April 25, 2013 from the CEO & Chairman of the Issuer, via the Lead Independent Director. In this response to Mr. Swenson's letter of April 25th (this letter dated April 25, 2013 slightly modified and superseded a letter dated April 24, 2013), the CEO & Chairman of the Issuer said he was rejecting Mr. Swenson's proposals and did not offer a counter proposal. Apparently, this action was taken on a unilateral basis by the CEO & Chairman and without consulting the board.
On May 6, 2013, Mr. Swenson presented the attached amended board reform plan to Air T’s Lead Independent Director. A copy of the plan is attached as Exhibit 5 to this amended Schedule 13D.
The Reporting Persons may make further purchases of shares of Common Stock. The Reporting Persons may dispose of any or all the shares of Common Stock held by them.
To the extent the actions described herein may be deemed to constitute a “control purpose” with respect to the Securities Exchange Act of 1934, as amended, and the regulations thereunder, the Reporting Persons have such a purpose. Except as noted in this Amended Schedule 13D, none of the Reporting Persons currently has any plans or proposals, which relate to, or would result in, any of the matters referred to in paragraphs (b) through (j), inclusive of Item (4) of Schedule 13D. Such individuals may, at any time and from time to time, review or reconsider their positions and formulate plans or proposals with respect thereto.
| 6 |
| Item 5. | Interests in Securities of the Issuer. |
(a) The following list sets forth the aggregate number and percentage (based on 2,446,286 shares of Common Stock outstanding as reported in the Issuer’s Form 10-Q, for the period ended December 31, 2012) of outstanding shares of Common Stock owned beneficially by each reporting person named in Item 2:
|
Name |
Shares of Common Stock Beneficially Owned |
Percentage of Shares of Common Stock Beneficially Owned |
| AO Partners Fund | 363,700 | 14.9% |
| AO Partners | 363,700 | 14.9% |
| Nicholas J. Swenson | 363,700 | 14.9% |
(b) AO Partners is the General Partner of AO Partners Fund and, as General Partner, has voting and dispositive power with regard to the shares of Common Stock held by AO Partners Fund. Because Mr. Swenson is the Managing Member of AO Partners, he has the power to direct the affairs of AO Partners. Therefore, AO Partners may be deemed to share with Mr. Swenson voting and dispositive power with regard to the shares of Common Stock held by AO Partners Fund.
Because Mr. Swenson is the Managing Member of AO Partners, the General Partner of AO Partners Fund, he has the power to direct the affairs of AO Partners Fund, including the voting and disposition of shares of Common Stock held in the name of AO Partners Fund. Therefore, Mr. Swenson is deemed to share voting and dispositive power with AO Partners Fund with regard to those shares of Common Stock.
(c) The Reporting Persons have made no purchases or sales since the date of Amendment No. 9 to the Schedule 13D.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Common Stock beneficially owned by any Reporting Person.
(e) Not applicable.
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. |
With respect to AO Partners Fund, AO Partners is entitled to (1) an allocation of a portion of profits, if any, and (2) a management fee based upon a percentage of total capital.
| 7 |
Other than the foregoing agreements and arrangements, and the Joint Filing Agreement filed as Exhibit 1 to Amendment No. 2 to the Schedule 13D, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Issuer.
| Item 7. | Material to be Filed as Exhibits. |
| Exhibit No. | Description |
| 1 | Joint Filing Agreement* |
| 2 | March 30, 2012 Letter from Nick Swenson to the Chairman and Chief Executive Officer of the Issuer* |
| 3 | April 4, 2013 Email from Nick Swenson to the Lead Director of the Issuer* |
| 4 | April 25, 2013 Letter from Nick Swenson to the Lead Independent Director of the Issuer* |
| 5 | May 6, 2013 Letter from Nick Swenson to the Lead Independent Director of the Issuer |
| * Previously filed |
| 8 |
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: May 6, 2013
|
AO PARTNERS I, L.P.
By: AO PARTNERS, LLC General Partner
By: /s/ Nicholas J. Swenson Nicholas J. Swenson Managing Member
|
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AO PARTNERS, LLC
By: /s/ Nicholas J. Swenson Nicholas J. Swenson Managing Member
|
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/s/ Nicholas J. Swenson Nicholas J. Swenson
|
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| 9 |
| AO Partners I, L.P. | 3033 Excelsior Blvd., Suite 560 Minneapolis, MN 55416 Phone: 612-843-4301 nickswenson@grovelandcapital.com |
May 6, 2013
Mr. J. Bradley Wilson
Chairman of the Board
Air T, Inc.
P.O. Box 488
Denver, North Carolina 28037
Dear Brad,
Pursuant to our conversation, an amended proposal is presented below for the board’s consideration.
I believe it is clear that shareholders want to see a reform of the Air T board, and I believe that acceptance of this proposal by the board would be well received by shareholders. The full board is copied here.
Note that this proposal represents further concessions on my part. Since joining the board, I have sought to affect change by persuasion, patience and flexibility, and my preference is to reach an amicable agreement.
Amended Proposal
| 1) | Raise the SRP ceiling to 20%. |
| 2) | The board of Air T submits a binding proposal to shareholders at the upcoming annual meeting to approve the Rights Agreement, dated March 26, 2012 (commonly referred to as a “poison pill”), between the company and American Stock Transfer & Trust Company, LLC as rights agent. I will be allowed to include in the proxy statement a brief statement on why I plan to vote against approval of the poison pill, which will be in close proximity to the company’s statement in favor of the poison pill, and will be as prominent as the company’s statement. In order to increase the likelihood of a quorum, the Ratification of the Auditor would also be included, as is standard, on the Proxy. The issue would be determined by a majority of the votes cast at the meeting. |
| 3) | Annual meeting held no later than August 30th, 2013. |
| 4) | Board reduced to seven members at this annual meeting. |
| 5) | Next Proxy ballot to include ten director Nominees from which shareholders select seven board members. |
| 6) | Five of ten on next Proxy ballot come from the current board: Clark, Wilson, Wicker, Gioffre and Simpson. |
| 7) | Shareholders select five Nominees for the upcoming Proxy using the following procedure: the Nominating committee asks the largest five shareholders for board Nominees; if the Nominating committee does not accept the Nominee, then the shareholder forwards another name and again until the Nominating committee accepts a Nominee from that shareholder; if a shareholder is non-responsive or does not want to Nominate a director for the slate then the next largest shareholder is given the chance to make a Nomination. This group of Nominees is the “Shareholder-Nominated Directors Group.” |
| 8) | Walter Clark is excluded from the procedure in #7 because five of the ten Nominees are already coming from his legacy board Nominees. |
| 9) | Chairman agrees that after the next Proxy, the Nominating Committee is set at three directors; two of three come from the Shareholder-Nominated Directors Group. |
| 10) | Chairman agrees that after the next Proxy, the Compensation Committee is set at three directors, two of three from the Shareholder-Nominated Directors Group. |
| 11) | Capital Allocation Committee. Establish a board-level committee that develops rigorous methods and makes recommendations regarding internal and external capital investment decisions; acting as a clearinghouse for the evaluation of possible uses of the company’s excess capital; measuring and reporting on the capital required by each business unit; measuring the return-on-capital for each business unit; and generally seeking to inform the board and recommend to the board the highest return on capital actions that might be taken for the benefit of the company and its shareholders. Experienced capital allocation professionals preferred for this committee; committee comprised entirely of the Shareholder-Nominated Directors Group. |
| 12) | Current board members George Prill and Sam Chestnutt become board members Emeritus. They are paid a stipend for their participation in major board meetings as non-voting observers. |
| 13) | Current board to consider and passes, if a majority of the board approves, a motion to sell the corporate aircraft as an immediate demonstration of shareholder-friendly capital allocation. Use the proceeds to either a) invest in an internal project or investment with 15%+ return on invested capital b) repurchase stock or c) pay a special dividend. Lease an equivalent aircraft as needed, thereby keeping customer service at the same level. |
I sincerely hope that we can come to a mutual agreement based on the terms provided above.
Regards,
/s/ Nick Swenson
Nick Swenson
NJS:ja
| cc: | Walter Clark, Chairman & CEO & Director |
John Parry, CFO & Director
Bill Simpson, EVP & Director
George Prill, Director
Sam Chesnutt, Director
Allison Clark, Director
Dennis Wicker, Director
John Gioffre, Director