Summary Compensation Table.
SUMMARY COMPENSATION TABLE
|
Name and Principal Position (a) |
Year (b) |
Salary ($) (c) |
Bonus ($) (d) |
Stock Awards ($) (e) |
Option Awards ($) (f) |
Non-Equity Incentive Plan Compensation ($) (g) |
Nonqualified Deferred Compensation ($) (h) |
All Other Compensation ($) (i) |
Total Earnings ($) (j) |
|
Eugene R. Mallette CEO |
10/31/08 10/31/07 10/31/06 |
97,529 93,997 82,715 |
541 542 0 |
0 0 0 |
534 460 423 |
0 0 0 |
0 0 0 |
25,107 3,992 4,556 |
123,711 98,991 87,694 |
|
Bill Distefano, General Manager |
10/31/08 10/31/07 10/31/06 |
138,986 122,394 126,418 |
66,368 511 0 |
0 0 0 |
534 460 423 |
0 0 0 |
0 0 0 |
6,942 3,884 3,753 |
212,830 127,249 130,594 |
|
Don T. Squire Jr, CFO |
10/31/08 10/31/07 10/31/06 |
82,695 79,125 64,971 |
10,541 541 0 |
0 0 10,000 |
5,339 3,221 423 |
0 0 0 |
0 0 0 |
6,249 4,941 4,871 |
104,824 87,828 80,265 |
Options/SAR Grants.
During the year ended October 31, 2007 we issued options to purchase 5,000 shares each to the CEO, Eugene Mallette, General Manager Bill Distefano and to the CFO, Don T. Squire Jr.. These were issued as part of the same option grant offered to all full-time employees in June of 2007. In addition to these, the CFO was also awarded 30,000 options to purchase shares as part of an annual bonus.
During the year ended October 31, 2008 we issued options to purchase 5,000 shares each to the CEO, Eugene Mallette and the General Manager Bill Distefano. These were issued as part of the same option grant offered to all full-time employees in July of 2008. In addition to these, the CFO was also awarded 50,000 options to purchase shares as part of an annual bonus
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table.
No stock options or SARs were exercised during the fiscal year ended October 31, 2008 and 2007.
Pension Table.
None.
Compensation of Directors.
During the fiscal year ended October 31, 2008, each Director was issued stock options to acquire 10,000 shares of common stock. These options have a two year restriction and an exercise price of $0.30 per share.
During the fiscal year ended October 31, 2007, each Director was issued stock options to acquire 10,000 shares of common stock. These options have a two year restriction and an exercise price of $0.40 per share.
During the fiscal year ended October 31, 2006, each Director was issued stock options to acquire 10,000 shares of common stock. These options have a two year restriction and an exercise price of $0.50 per share.
During the fourth quarter of the current year, the Board of Directors fees were increased to $4,000 per quarter from the previous rate of $2,500 per quarter for services rendered.
Termination of Employment and Change of Control Arrangement.
There are no compensatory plans or arrangements, including payments to be received from Alpine Air, with respect to any person named in Cash Compensation set out above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such person's employment with Alpine Air or its subsidiaries, or any change in control of Alpine Air, or a change in the person's responsibilities following a change in control of Alpine Air.
Stock Option Plan.
In August 2001, Alpine Air adopted an equity incentive plan. The plan allows Alpine to issue incentive stock options ("ISOs") within the meaning of section 422A of the Internal Revenue Code of 1986, as amended ("Code"), non- statutory stock options and restricted shares to employees, directors and consultants of Alpine Air. A total of 770,000 shares of Alpine Air's common stock have been reserved for issuance under the plan. As of January of each year commencing in the year 2002, the aggregate number of shares of Alpine Air's common stock that may be awarded under the plan shall automatically increase by a number equal to the lesser of (i) 7% of the total number of shares of Alpine's common stock outstanding, minus the number of shares of stock previously authorized for award under the plan at the close of the preceding calendar year or (ii) 250,000 shares of common stock.
The exercise price of options granted under the terms of the plan must not be less than 100% of the fair market value of the shares as of the date of grant, or 110% of the fair market value for ISOs granted to optionees possessing more than 10% of the total combined voting power of all classes of stock of Alpine Air for ISOs and 85% of the fair market value of the stock for nonqualified options. In addition, the aggregate fair market value (as determined on the date of each option grant) of shares with respect to which ISOs are exercisable for the first time by an employee during any calendar year shall not exceed $100,000. Additionally, no individual may be granted more than 100,000 options in any given year.
Alpine Air has not received and does not intend to request a determination from the Internal Revenue Service that the ISOs issued under the plan will qualify under the Code for treatment as ISOs.
The plan provides that an option may be exercised by payment in cash or, with the consent of the board of directors, by delivery of common stock of Alpine Air valued at its fair market value on the date of payment. An option holder shall not have any of the rights of a shareholder with respect to the shares subject to the option until the shares have been fully paid and issued.
The board of directors or a committee of the directors will initially administer the plan, prescribe the form and content of options to be granted, receive elections for the exercise of stock conversion rights, determine the terms and restrictions on all restricted stock awards granted under the plan, and other items. No stock option can be granted for a period longer than ten years or for a period longer than five years for ISOs granted to optionees possessing more than 10% of the total combined voting power of all classes of stock of Alpine Air. The right to exercise an option terminates three months after the termination of an employee’s employment, unless the employee dies or is disabled, in which event the option will remain exercisable for a period of one year after the termination of employment. The plan terminates, and no further options may be granted after August 18, 2011.
In August 2001, Alpine Air issued options to acquire 547,185 shares of its common stock at an exercise price of $2.50 per share and an option to purchase 79,998 shares at an exercise price of $2.75 per share. In 2002, Alpine Air issued options to acquire 2,562 shares of its common stock at an exercise price of $2.50 per share. All options were issued under the plan. In addition, a total of 82,251 options have been forfeited through October 31, 2005.
During 2006, the Company issued options to acquire 325,000 shares of its common stock at an exercise price of $0.50 per share, to employees and directors of the company. To date 105,000 of the 2006 options have been forfeited. During 2007, the Company issued options to acquire 425,278 shares of its common stock at an exercise price of $0.40 per share, to employees and directors of the company. To date 87,389 of the 2007 options have been forfeited. During 2008, the Company issued options to acquire 575,000 shares at an exercise price of $0.30 per share. To date, 52,500 of those options have been forfeited.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information relating to the beneficial ownership of Alpine Air's common stock as of October 31, 2008 by each person known by Alpine Air to be the beneficial owner of more than 5% of the outstanding shares of common stock and each of Alpine Air's directors and executive officers.
|
Name and Address of Principal Stockholders |
Common Stock |
Percentage |
|
Eugene R. Mallette 1177 Alpine Air Way Provo, Utah 84601 |
27,729,465(1)(3) |
76.4% |
|
|
|
|
|
SCS, Inc. 455 East 500 South, #201 Salt Lake City, Utah 84111 |
2,450,214(2) |
6.7% |
|
|
|
|
|
Officers and Directors |
|
|
|
Eugene R. Mallette, CEO and Director |
27,729,465(1)(3) |
76.4% |
|
Don T. Squire, Jr. CFO |
60,000(4) |
Less than 1% |
|
Max Hansen, Secretary/Treasurer, Director |
11,874 |
Less than 1% |
|
Joseph O. Etchart, Director |
18,945 |
Less than 1% |
|
Ronald L. Pattison, Director |
42,600 |
Less than 1% |
|
All officers and directors as a group (5 persons) |
27,862,884 |
76.8% |
(1) IFW St. Croix Group, LLLP dissolved its partnership in February of 2007 and distributed the shares to Mr. Mallette.
(2) 2,245,464 of these shares were issued as restricted stock as compensation on a consulting contract entered into by the Company. The contract covers a two year period and lifting of the restricted status is dependant on contract performance.
(3) 15,000 of these shares are in the name of Mary Lou Mallette, Mr. Mallette's wife.
(4) These shares were issued 11/22/2005 and are restricted.
Unless otherwise noted above, Alpine Air believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants or options or the conversion of convertible securities. Each beneficial owner's percentage ownership is determined by assuming that any warrants, options or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days from the date hereof, have been exercised.
Securities Authorized for Issuance under Equity Compensation Plans.
Equity Compensation Plan Information
|
Plan Category |
Number of Securities to be issued upon exercise of outstanding options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a) |
|
|
(a) |
(b) |
(c) |
|
Equity compensation plans approved by security holders |
556,620 220,000 337,889 |
$2.53 $0.50 $0.40 |
- - - |
|
Equity compensation plans not approved by security holders |
522,500 -0- |
$0.30 -0- |
- - |
|
Total |
1,637,009 |
$1.11 |
- |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Aircraft Purchase - In December 2003, the Company acquired 16 aircraft from an entity related to an officer and majority shareholder of the Company for $9,900,000. The consideration paid included $9,104,000 in preferred stock of the Company's subsidiary Alpine Aviation, Inc. and the assumption of the underlying debt on the aircraft totaling $709,981. The remaining $86,019 is recorded as a payable to the entity related to an officer and majority shareholder of the Company. As the aircraft were purchased from a related party they have been recorded at their carryover basis of $4,111,485. A discount on preferred stock in the amount of $3,591,195, net of tax effect of $2,197,320, has been recorded and is being amortized as dividends over a five year period. The preferred stock provides for monthly dividends at an annual rate of 6.5%, and is not convertible. However, in April 2007 the Board of Directors authorized the issuance of 1,000,000 shares of Preferred Stock in the Parent Company, Alpine Air Express, with a stated value of $9.104, which were exchanged with the holder for the outstanding preferred stock in the subsidiary. The newly issued preferred stock in the Parent Company provides for monthly dividends at an annual rate of 6.5%, and is convertible at any time by the holder based on the current market price of the Company’s stock. The Company can redeem the preferred stock any time and the Holder can call for redemption of the preferred stock any time after December 31, 2011.
Notes Payable - Related Party - In connection with the purchase of the aircraft the Company issued a note to an entity related to an officer and majority shareholder of the Company in the amount of $1,476,381. The note payable dated July 31, 2003, bears an interest rate of 6.5% and called for payments of $33,624 due for 14 monthly installments with the balance due November 1, 2004. The entity related to an officer and majority shareholder of the Company previously agreed to forestay future payment until required by the note's balloon payment which was due November 1, 2004 but later agreed to defer all payments of principal, interest and balloon payments until November 1, 2006. Subsequently, all unpaid and accrued interest and the remaining principal balance was rolled into a new note at 6.5% interest and a 5-year term. On October 31, 2008 the balance of this note was $0. In connection with the purchase of aircraft during 2004 from an entity related to an officer and majority shareholder of the Company, the Company has entered into a Note Payable in the amount of $86,019. This note bears interest at 6.5%. The note holder had agreed to defer all payments of principal and interest until November 1, 2006.
Subsequently, all unpaid and accrued interest and the remaining principal balance was rolled into a new note at 6.5% interest and a 5-year term. On October 31, 2008 the balance of this note was $0. During May 2004, lease payments due to an entity related to an officer and majority shareholder of the Company in the amount of $667,115 were converted into a demand note payable with interest to accrue at six and one- half (6.50%) percent on the principal balance. No principal or interest payments were required to be paid until November 1, 2006. Subsequently, all unpaid and accrued interest and the remaining principal balance was rolled into a new note at 6.5% interest and a 5-year term. On October 31, 2008 the balance of this note was $0.
Personal Guarantee - The Company's major shareholder/officer has personally guaranteed loans which are also collateralized by certain aircraft of the Company.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The following is a summary of the fees billed to Alpine Air by its principal accountants during the fiscal years ended October 31, 2008, 2007, and 2006:
|
Fee category |
2008 |
|
2007 |
|
2006 |
| |||
|
Audit fees |
$ |
100,182 |
|
$ |
89,936 |
|
$ |
74,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-related fees |
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax fees |
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
All other fees |
|
0 |
|
|
0 |
|
|
0 |
|
|
Total fees |
$ |
100,182 |
|
$ |
89,936 |
|
$ |
74,411 |
|
Audit fees - Consists of fees for professional services rendered by our principal accountants for the audit of Alpine Air's annual financial statements and the review of financial statements included in Alpine Air's Forms 10-QSB or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.
Audit-related fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of Alpine Air's financial statements and are not reported under "Audit fees."
Tax fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.
All other fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under "Audit fees," "Audit-related fees" and "Tax fees" above. The fees disclosed in this category include due diligence, preparation of pro forma financial statements as a discussion piece for a Board member, and preparation of letters in connection with the filing of Current Reports on Form 8-K.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors.
The Company's Audit Committee Charter does not provide for the approval in advance of the performance of professional services to be provided to the Company by its principal accountant. All services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.
PART IV
ITEM 15. EXHIBITS
(a) Exhibits.
31.1 302 Certification of Eugene Mallette
31.2 302 Certification of Don T. Squire Jr.
32 906 Certification
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Alpine Air Express, Inc.
Date: 1/28/2009 By: /s/Eugene Mallette
Eugene Mallette, Chief Executive Officer and Director
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date: 1/28/2009 /s/Eugene Mallette
Eugene Mallette, Chief Executive Officer and Director
Date: 1/28/2009 /s/Don T. Squire Jr.
Don T. Squire Jr., Chief Financial Officer
Date: 1/28/2009 /s/Max A. Hansen
Max A. Hansen, Secretary/Treasurer and Director
Date: 1/28/2009 /s/Joseph O. Etchart
Joseph O. Etchart, Chairman
Date: 1/28/2009 /s/Kenneth D. Holliday
Kenneth D. Holliday, Director
Date: 1/28/2009 /s/Michael Brown
Michael Brown, Director
Date: 1/28/2009 /s/Ronald L. Pattison
Ronald L. Pattison, Director