8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 _____________________

FORM 8-K

 _____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2023

   _____________________

Air Transport Services Group, Inc.

(Exact name of registrant as specified in its charter)

  _____________________ 

DE	000-50368	26-1631624
(State or other jurisdiction of incorporation)	Commission File Number:	(IRS Employer Identification No.)

145 Hunter Drive, Wilmington, OH     45177

(Address of principal executive offices)        (Zip Code)

(937) 382-5591

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

 _____________________

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 (see General Instruction A.2. of Form 8-K):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ATSG	NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

Appointment of New Chief Executive Officer

On November 6, 2023, the Board of Directors of the Company (the “Board”) appointed Joseph C. Hete, age 69, as Chief Executive Officer of the Company, effective immediately. Mr. Hete succeeds Richard F. Corrado whose position as Chief Executive Officer of the Company and its subsidiaries ended on November 3, 2023. Mr. Hete is a member of the Board and the Chairman of the Company, positions that he will continue to hold while serving as the Chief Executive Officer.

Mr. Hete has served as the Chairman of the Board since May 2020. He was the Chief Executive Officer of the Company from October 2007 to May 2020 and the President of the Company from October 2007 to September 2019. He also served as the Chief Executive Officer of the Company’s subsidiary, ABX Air, Inc., from August 2003 to May 2020; the President of ABX Air, Inc. from January 2000 to February 2008; the Chief Operating Officer of ABX Air, Inc. from January 2000 to August 2003; the Senior Vice President, Chief Operating Officer, of ABX Air, Inc. from January 1997 until January 2000; the Senior Vice President, Administration, of ABX Air, Inc. from 1991 to 1997; and Vice President, Administration, of ABX Air, Inc. from 1986 to 1991. He joined ABX Air, Inc. in 1980 and has been a director of the Company since it became publicly traded in 2003.

The Compensation Committee of the Board has approved a compensation package for Mr. Hete consisting of a base salary of $750,000 and an annual target bonus opportunity of up to 115% of his base salary upon the extent of achievement of the performance measures in effect for the applicable fiscal year under the Company’s Executive Incentive Compensation Plan. Mr. Hete’s bonus opportunity for 2023 will be prorated. In addition, the Compensation Committee has awarded to Mr. Hete under the Company’s Amended and Restated 2015 Long-Term Incentive Plan (the “LTIP”) a grant of Restricted Stock Units having a grant date value (based upon the Company’s closing stock price on November 8, 2023) of $1,200,000. These Restricted Stock Units will settle in full after 12 months of continuous service, unless Mr. Hete’s employment is terminated because of death, disability or termination by the Company prior to such 12-month period in which case settlement will occur upon such termination. Commencing in 2024, Mr. Hete will be eligible to receive, at the same time grants are made to the other executive officers of the Company, the grant of long-term incentive awards under the LTIP. Mr. Hete will be eligible to receive long-term incentive awards having a grant date value at target performance of 300% of his then-current base salary based on the Company’s closing stock price on the grant date.

Mr. Hete will be offered a change-in-control agreement in the form currently provided to other executive officers of the Company. Consistent with the change-in-control agreement with the Company’s previous chief executive officer, Mr. Hete will be entitled to receive, should his employment be terminated without cause or by Mr. Hete for good reason following a change in control, a payment equal to three times his annual salary and annual bonus opportunity.

Mr. Corrado was a participant in the Company Severance Pay Plan for Senior Management (the “Severance Plan”) and is entitled to receive severance benefits thereunder as a result of the Board’s decision to make the leadership changes described above. Under the Severance Plan, Mr. Corrado is entitled to (i) the continuation of his annual base salary for a period of 24 months after termination of employment, (ii) payment of a pro rata portion of his target bonus for 2023 based upon the number of days employed during 2023, and (3) the continuation of eligibility to participate in certain employee benefits during the severance period. The timing of the salary continuation payments provided for in the Severance Plan is expected to be modified in order to comply with Section 409A of the Internal Revenue Code. Because Mr. Corrado met the requirements for “Retirement” under the LTIP, certain unvested restricted shares held by Mr. Corrado will be deemed vested as of the date of his termination, and a pro-rata portion (based on time of actual service during the performance period) of certain performance-based stock units granted to Mr. Corrado under the LTIP will be settled and shares issued to Mr. Corrado at the end of the applicable performance period if the performance criteria applicable to such performance-based stock units are satisfied.

Item 7.01 Regulation FD Disclosure

On November 6, 2023, the Company issued a press release announcing the departure of Mr. Corrado as Chief Executive Officer of the Company and the appointment of Mr. Hete as the new Chief Executive Officer. A copy of the Company’s press release is furnished with this From 8-K attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1*	ATSG Board of Directors appoints Joe Hete as Chief Executive Officer
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

*filed herewith.

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 hereunto duly authorized.

AIR TRANSPORT SERVICES GROUP, INC.
By:	/S/  W. JOSEPH PAYNE
	W. Joseph Payne
	Chief Legal Officer & Secretary
Date:	November 6, 2023

EX-99.1

ATSG Board of Directors Appoints Joe Hete as Chief Executive Officer

WILMINGTON, Ohio — November 6, 2023 – Air Transport Services Group, Inc. (NASDAQ: ATSG), the global leader in medium wide-body freighter aircraft leasing, air operations, and support services, today announced that its Board of Directors has appointed Joe Hete, current Chairman of the Board and the Company’s former longtime Chief Executive Officer, as ATSG’s CEO, effective immediately. Hete succeeds Rich Corrado, who is leaving his role as CEO of the Company, effective immediately. Hete will continue as Chairman of the Board.

Hete is a well-known, highly respected pioneer in the global air freight industry and brings approximately 40 years of leadership experience in the space. He previously served as CEO of ATSG from 2003 to 2020, and has been a member of ATSG’s Board since 2003. Prior to that, he held various senior management roles at ABX Air, Inc.

Randy Rademacher, Lead Independent Director, said, “After careful consideration by the Board, we determined that Joe is the right leader to accelerate our strategy and capitalize on the long-term opportunities ahead. As Chairman for the past three years and having previously served as CEO of ATSG for 17 years, Joe has extensive knowledge of our business and its competitive position within the industry. He is uniquely qualified to step into this role to optimize our current performance and position ASTG for the future. Under Joe’s leadership, we believe the Company will be well-positioned to continue building on its strong foundation, solidifying its market-leading position, and working to deliver meaningful value for our shareholders.”

Hete said, “ATSG has always proven itself to be a very resilient business, and I am both honored and energized to be returning to the role of CEO. With our strong balance sheet, differentiated business model, diverse customer base and unique competitive position, we believe we are poised to create value for our stakeholders as the world’s premier freighter lessor. I look forward to working closely with our talented management team to drive ATSG’s strategic priorities forward and continue delivering best-in-class transportation solutions for our air carriers, e-commerce leaders, government agencies and other stakeholders globally.”

Rademacher continued, “On behalf of the entire Board, I thank Rich for his contributions and for leading the Company through an incredibly dynamic time in our industry. We wish him the best in his future endeavors.”

Third Quarter 2023 Financial Results

In a separate press release today, ATSG will report its third quarter 2023 financial results. The Company will host an investor conference call tomorrow at 10:00 a.m. Eastern Time.

Hete will be joined by Quint Turner, Chief Financial Officer, and Mike Berger, President, to discuss the quarterly results.

Conference call participants must register in advance via a link in the Events & Presentations section of ATSG’s website, www.atsginc.com. Slides that accompany management’s discussion may be accessed from the site shortly before the start of the call.

About ATSG

ATSG is a leading provider of aircraft leasing and cargo and passenger air transportation and related services to domestic and foreign air carriers and other companies that outsource their cargo and passenger airlift requirements. ATSG, through its leasing and airline subsidiaries, is the world's largest owner and

operator of converted Boeing 767 freighter aircraft. Through its principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates, ATSG provides aircraft leasing, air cargo lift, passenger ACMI and charter services, aircraft maintenance services and airport ground services. ATSG's subsidiaries include ABX Air, Inc.; Airborne Global Solutions, Inc.; Airborne Maintenance and Engineering Services, Inc., including its subsidiary, Pemco World Air Services, Inc.; Air Transport International, Inc.; Cargo Aircraft Management, Inc.; and Omni Air International, LLC. For more information, please see www.atsginc.com.

Forward-Looking Statements

This press release contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. A reader can identify forward-looking statements because they are not limited to historical fact, they address future events, developments or results, or they are preceded by, followed by or include words such as (and without limitation) “believe,” “anticipate,“ plan,” “expect,” “opportunities,” “continue” or “look forward,” and similar expressions. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including without limitation statements concerning our plans and expectations in connection with the transition of CEO leadership, future performance and results, and other plans and expectations.

Forward-looking statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those stated in or implied by the forward-looking statements. All forward-looking statements should be evaluated in the context of such risks, uncertainties and other factors, including those factors disclosed under “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2023. All forward-looking statements are qualified in their entirety by these and other cautionary statements that ATSG makes from time to time in its SEC filings and public communications. ATSG cannot assure the reader that it will realize the results or developments ATSG anticipates or, even if substantially realized, that they will result in the consequences or affect ATSG or its operations in the way ATSG expects. Forward-looking statements speak only as of the date made. ATSG undertakes no obligation, and specifically disclaims any duty, to update or revise any forward-looking statements as a result of new information, future events or circumstances, or otherwise, except as otherwise required by law. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, ATSG.

Contact:

Quint O. Turner, ATSG Inc. Chief Financial Officer

937-366-2303

XML

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Cover [Abstract]
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Document Type	8-K
Document Period End Date	Nov. 06, 2023
Entity Registrant Name	Air Transport Services Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	000-50368
Entity Tax Identification Number	26-1631624
Entity Address, Address Line One	145 Hunter Drive
Entity Address, City or Town	Wilmington
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45177
City Area Code	937
Local Phone Number	382-5591
Written Communications	false
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Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
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