<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
AVTEAM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
IMPORTANT
PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
AVTEAM, INC.
Dear Shareholder:
I am writing to let you know that the annual shareholders meeting of
AVTEAM, Inc. (the "Company") will be held at Don Shula's Hotel, 6842 Main
Street, Miami Lakes, Florida 33014 on Wednesday, June 3, 1998, at 1:00 p.m.,
local time.
The purpose of this meeting is to vote on several important proposals
that affect the Company. The proposals include the election of the six current
directors of the Company to serve for additional terms as directors, to consider
and vote upon a proposal to approve an amendment to the Company's Articles of
Incorporation to create three classes of the Company's Board of Directors and to
ratify the selection of Ernst & Young LLP as independent accountants of the
Company for 1998. As a shareholder, you have the opportunity to voice your
opinion on the matters that affect the Company. This package contains
information about the proposals and the materials to use when voting by mail.
Please read the enclosed materials and cast your vote on the proxy
card. PLEASE VOTE AND RETURN YOUR PROXY CARD PROMPTLY. YOUR VOTE IS EXTREMELY
IMPORTANT, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
All of the proposals have been carefully reviewed by the Board of
Directors. The Board of Directors is responsible for protecting your interests
as a shareholder. The Board of Directors believes these proposals are in the
best interest of shareholders. The Board of Directors recommends that you vote
for each proposal. Each of the proposals is described in detail in the enclosed
proxy statement.
VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED. To
cast your vote, simply complete the proxy card enclosed in this package. Be sure
to sign the proxy card before mailing it in the postage paid envelope. It is
important to sign and return the proxy card whether or not you plan to attend
the meeting. If you attend the meeting, you may vote in person even though you
have previously returned the proxy card.
If you have any questions before you vote, please call us at
1-954-431-2359. We'll be glad to help you get your vote in quickly. Thank you
for your participation in this important meeting.
Very truly yours,
Donald A. Graw
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE> 3
AVTEAM, INC.
3230 EXECUTIVE WAY, MIRAMAR, FLORIDA 33025
1-954-431-2359
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 3, 1998
To the Shareholders of AVTEAM, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of AVTEAM, Inc., a Florida corporation (the "Company"), will be held
at Don Shula's Hotel, 6842 Main Street, Miami Lakes, Florida 33014 on Wednesday,
June 3, 1998, at 1:00 p.m., local time. The purpose of the Meeting is to
consider and act upon the following proposals and to transact such other
business as may properly come before the Meeting or any adjournments thereof:
1. To elect six (6) directors to the Company's Board of Directors to
serve until their respective successors have been duly elected and qualified;
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to create three classes of the Company's
Board of Directors, consisting of Class I, to be comprised of two directors,
each to serve for an initial term of one year and thereafter for a term of three
years; Class II, to be comprised of two directors, each to serve for an initial
term of two years and thereafter for a term of three years; and Class III, to be
comprised of three directors, each to serve for a term of three years; or, in
each case, until their respective successors have been duly elected and
qualified; and
3. To ratify the selection of Ernst & Young LLP as independent
accountants of the Company for 1998.
The Board of Directors has fixed the close of business on April 20,
1998 as the record date for the determination of the shareholders entitled to
notice of, and to vote at, the Meeting or any adjournments thereof.
By Order of the Board of Directors,
RICHARD PRESTON, SECRETARY
April 27, 1998
<PAGE> 4
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY SHAREHOLDER WHO
DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO INDICATE VOTING INSTRUCTIONS
ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE
PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN ORDER TO
AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD
PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in validating
your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy
card. For example:
REGISTRATION VALID SIGNATURE
------------ ---------------
A. 1. ABC Corp. John Smith, Treasurer
2. ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1. ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2. ABC Trust Ann B. Collins, Trustee
3. Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
<PAGE> 5
1998 ANNUAL MEETING OF SHAREHOLDERS
OF
AVTEAM, INC.
----------------------------------
PROXY STATEMENT
----------------------------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of AVTEAM, Inc., a Florida corporation (the
"Company"), of proxies from the holders of the Company's Class A Common Stock,
par value $.01 per share (the "Class A Common Stock"), for use at the 1998
Annual Meeting of Shareholders (the "Meeting"), of the Company to be held on
Wednesday, June 3, 1998, or at any adjournments thereof pursuant to the attached
Notice of Annual Meeting of Shareholders. The approximate date that this Proxy
Statement and the enclosed form of proxy are first being sent to holders of
Class A Common Stock is April 27, 1998. Shareholders should review the
information provided herein in conjunction with the Company's 1997 Annual Report
to Shareholders which accompanies this Proxy Statement. The Company's principal
executive offices are located at 3230 Executive Way, Miramar, Florida 33025, and
its telephone number is (954) 431-2359.
INFORMATION CONCERNING PROXY
The enclosed form of proxy is solicited on behalf of the Company's
Board of Directors. The giving of a proxy does not preclude the right to vote in
person should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person, at the Meeting or by filing with the Company's
Secretary at the Company's principal executive offices a written revocation or
duly executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Meeting. Presence at the Meeting will not, of itself, revoke the
proxy.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone, and the Company may use the
services of a proxy solicitation firm at a cost of up to $6,500. The Company's
employees will receive no compensation for soliciting proxies other than their
regular salaries. The Company may request banks, brokers and other custodians,
nominees and fiduciaries to forward copies of the proxy material to their
principals and to request authority for the execution of proxies. The Company
may reimburse such persons for their expenses in so doing.
PURPOSES OF THE MEETING
The purpose of the Meeting is to consider and act upon the following
proposals and to transact such other business as may properly come before the
Meeting or any adjournments thereof:
1. To elect six members to the Company's Board of Directors to serve
until their respective successors have been duly elected and qualified;
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to create three classes of the Company's
Board of Directors, consisting of Class I, to be comprised of two directors,
each to serve for an initial term of one year and thereafter for a term of three
years; Class II, to be comprised of two directors, each to serve for an initial
term of two years and thereafter
<PAGE> 6
for a term of three years; and Class III, to be comprised of two directors,
each to serve for a term of three years; or, in each case, until their
respective successors have been duly elected and qualified; and
3. To ratify the selection of Ernst & Young LLP as independent
accountants of the Company for 1998.
UNLESS CONTRARY INSTRUCTIONS ARE INDICATED ON THE ENCLOSED PROXY, ALL
SHARES REPRESENTED BY VALID PROXIES RECEIVED PURSUANT TO THIS SOLICITATION (AND
WHICH HAVE NOT BEEN REVOKED IN ACCORDANCE WITH THE PROCEDURES SET FORTH ABOVE)
WILL BE VOTED IN FAVOR OF ALL THE PROPOSALS DESCRIBED IN THE NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS AND IN THE DISCRETION OF THE PROXY HOLDER AS TO ANY
OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING. IN THE EVENT A
SHAREHOLDER SPECIFIES A DIFFERENT CHOICE BY MEANS OF THE ENCLOSED PROXY, HIS OR
HER SHARES WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATION SO MADE.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on April 20, 1998
as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of, and to vote at, the Meeting. As of the Record
Date, there were 10,665,739 shares of Class A Common Stock issued and
outstanding, all of which are entitled to be voted at the Meeting. Each share of
Class A Common Stock is entitled to one vote on all matters to be acted upon at
the Meeting, and neither the Company's Articles of Incorporation nor Bylaws
provide for cumulative voting rights.
The attendance, in person or by proxy, of the holders of a majority of
the shares of Class A Common Stock entitled to vote at the Meeting is necessary
to constitute a quorum. The affirmative vote of a majority of the shares of
Class A Common Stock present in person or by proxy at the Meeting is required
for the approval of each matter that is submitted to shareholders for approval
except for the proposal to amend the Company's Articles of Incorporation to
provide for classification of the Board of Directors which requires the
affirmative vote of at least two-thirds of the outstanding shares of Class A
Common Stock entitled to vote for the election of directors and except to the
extent Florida law provides to the contrary. An independent inspector shall
count the votes and ballots. Abstentions are considered as shares present and
entitled to vote but are not counted as votes cast in the affirmative on a given
matter. A broker or nominee holding shares registered in its name, or in the
name of its nominee, which are beneficially owned by another person and for
which it has not received instructions as to voting from the beneficial owner,
has the discretion to vote the beneficial owner's shares with respect to the
election of directors and to ratify the selection of Ernst & Young LLP as
independent accountants of the Company for 1998. However, the proposal to
approve an amendment to the Company's Articles of Incorporation to create three
classes of the Company's Board of Directors is a matter which a broker or
nominee does not have discretionary voting power and no broker or nominee votes
will be considered by the inspector when counting votes cast on the matter.
Nevertheless, such shares being represented by a broker or nominee will be
considered for purposes of determining whether a quorum is present at the
Meeting. If less than a majority of the outstanding shares of Class A Common
Stock are represented at the Meeting, a majority of the shares so represented
may adjourn the Meeting from time to time without further notice.
SECURITY OWNERSHIP
The following table sets forth, as of the Record Date, information with
respect to the beneficial ownership of the Company's Class A Common Stock by (i)
each director of the Company (each of whom constitute nominees for election as
directors at the Meeting), (ii) (A) the Company's Chairman, President and Chief
Executive Officer and (B) the other four executive officers of the Company at
the end of 1997 whose compensation exceeded $100,000 (the persons referred to in
(ii) (A) - (B) are hereinafter collectively referred to as the "Named Executive
Officers"), (iii) the beneficial owners of more than 5% of the outstanding Class
A Common Stock and (iv) all directors and executive officers of the Company, as
a group.
2
<PAGE> 7
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
----------------------------------------------------------------
AMOUNT PERCENTAGE
------------------------------ ------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) CLASS A CLASS B CLASS A(2) CLASS B
- --------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Donald A. Graw.................................... 500,000 -- 4.7% --
Jaime J. Levy..................................... 500,000 -- 4.7% --
Bryan Thomas McFarland............................ -- -- -- --
Mark S. Koondel................................... -- -- -- --
Robert Munson..................................... -- -- -- --
Eugene P. Lynch................................... -- -- -- --
Sanford Miller.................................... 40,000 -- * --
Richard Preston................................... 494,758 -- 4.6% --
Leon Sragowicz.................................... 2,360,772 -- 22.1% --
The Clipper Group(3).............................. 1,974,642 439,644 18.5% 100%
Morgan Stanley, Dean Witter, Discover & Co........ 830,500 -- 7.8% --
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A
GROUP (10)........................................ 1,534,758 -- 14.4% --
</TABLE>
- ----------
* Less than 1%.
(1) The address of each shareholder other than The Clipper Group and Morgan
Stanley, Dean Witter, Discover & Co. is the address of the Company, which
is 3230 Executive Way, Miramar, Florida 33025. The address of The Clipper
Group is 650 Madison Avenue, New York, New York 10022. The address of
Morgan Stanley, Dean Witter, Discover & Co. is 1585 Broadway, New York, New
York 10036.
(2) Based on 10,665,739 shares of Class A Common Stock issued and outstanding
on the Record Date, plus shares of Class A Common Stock which may be
acquired pursuant to any options and warrants exercisable within 60 days of
the Record Date.
(3) Includes shares beneficially owned by Clipper/Merchant Partners, L.P.,
Clipper Equity Partners I, L.P., and Clipper Capital Associates, L.P.
(whose address is 650 Madison Avenue, New York, New York 10022), and
Clipper/Merban, L.P. and Clipper/European Re, L.P. (whose address is c/o
CITCO, De Ruyterkade, 62, P.O. Box 812, Curacao, Netherlands Antilles).
Clipper Capital Associates, L.P. is the general partner of all of The
Clipper Group partnerships. The general partner of Clipper Capital
Associates, L.P. is Clipper Capital Associates, Inc. Robert B. Calhoun is
the sole shareholder and a director of Clipper Capital Associates, Inc. As
a result, each of Mr. Calhoun, Clipper Capital Associates, L.P. and Clipper
Capital Associates, Inc. is deemed to beneficially own all shares of Class
A Common Stock and Class B Common Stock beneficially owned by The Clipper
Group. Merchant Capital, Inc., an affiliate of Credit Suisse First Boston
Corporation ("CSFBC"), is a 99% limited partner of Clipper/Merchant
Partners, L.P. Credit Suisse Group, an affiliate of CSFBC, is an indirect
99% limited partner of Clipper/Merban, L.P. None of Merchant Capital, Inc.,
CSFBC and Credit Suisse Group is an affiliate of The Clipper Group or
Clipper Capital Associates, L.P.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Donald A. Graw................................. 43 Chairman of the Board, President and Chief
Executive Officer
Jaime J. Levy.................................. 42 Executive Vice President and Director
Bryan Thomas McFarland......................... 44 Vice President - Business Development
Mark S. Koondel................................ 51 Chief Financial Officer, Treasurer and
Assistant Secretary
Dallas Cobb.................................... 53 Vice President - Operations
Paula Sparks................................... 45 Vice President - Quality Assurance
Richard Preston................................ 51 Secretary and Director
</TABLE>
3
<PAGE> 8
DONALD A. GRAW joined the Company in January 1994 and has served as its
Chief Executive Officer, President and a member of its Board of Directors since
that time. Mr. Graw became Chairman of the Board of Directors in March 1998.
From February 1991 to November 1993, Mr. Graw served as Vice President and Chief
Operating Officer of Scamp Auto Rental I, Inc., a subsidiary of Dollar
Rent-A-Car System, Inc., with 42 retail locations throughout Florida. From July
1982 to October 1990, Mr. Graw was employed by Diversified Services, Inc., a
franchisee of Budget Rent-A-Car, starting as the Chief Financial Officer and
becoming the Executive Vice President in February 1989.
JAIME J. LEVY joined the Company in July 1994 and has served as its
Executive Vice President and a member of its Board of Directors since that time.
From February 1991 to July 1994, he served as President of Turbine Engine Sales
Group, Inc. ("Turbine") which was acquired in July 1994 by Richard Preston and
Leon Sragowicz, co-founders of the Company. From March 1986 to January 1991, he
served as the Director of Sales and Marketing for BET Air, Inc., an aviation
surplus parts company.
BRYAN THOMAS MCFARLAND joined the Company in July 1994 as the Vice
President -- Technical Operations, and he became Vice President -- Business
Development in February 1997. From August 1992 to July 1994, he served as Vice
President -- Technical Operations of Turbine. Prior thereto, Mr. McFarland
served as the Quality Manager for International Aircraft Associates, a customer
sales manager for Aerothrust Corp. and a purchasing agent for Eastern Airlines,
Inc. He holds an Airframe and Powerplant license issued by the FAA.
MARK S. KOONDEL joined the Company in April 1996 as the Chief Financial
Officer and Treasurer. From November 1995 to April 1996, he served as the
Controller of AEC One Stop Group, Inc., a pre-recorded music distributor. From
November 1992 to October 1995, Mr. Koondel served as the Vice President of
Finance of Buenos Aires Embotelladora, S.A., a publicly-traded Pepsi-Cola
franchisee. From January 1985 to November 1992, he served as the Controller of
Florida Coca-Cola Bottling Co., Inc. Prior thereto, Mr. Koondel worked in public
accounting with Main Hurdman and Coopers & Lybrand for an aggregate of seven
years.
DALLAS COBB joined the Company in July 1995 as the Director of Airframe
Sales and he became Vice President -- Quality Assurance in September 1996. In
February 1997, Mr. Cobb was named Vice President -- Operations. From February
1980 to July 1995, Mr. Cobb served in various capacities with BET Air, Inc.,
including President, Vice President, General Manager and Marketing Manager. From
April 1968 to February 1980, Mr. Cobb served as Purchasing Agent for Eastern
Airlines, Inc.
PAULA SPARKS joined the Company in March 1997 as Vice President --
Quality Assurance. For more than 21 years prior thereto, Ms. Sparks was employed
by Pratt & Whitney, most recently as a Quality Assurance Manager. While at Pratt
& Whitney Overhaul and Repair, she was one of two holders of an Organizational
Designated Airworthiness Representative Certificate. Ms. Sparks is an active
member of the Quality Assurance Committee of the Airline Suppliers Association
and the American Society for Quality Control.
RICHARD PRESTON is a co-founder of the Company and has served as the
Company's Secretary and a member of its Board of Directors since October 1991
and, until April 1996, as its Treasurer. For more than the past 20 years, he has
served as a partner in the public accounting firm of Gerson Preston & Company,
P.A., located in Miami, Florida.
Executive officers serve at the pleasure of the Board of Directors,
except as otherwise provided below. See "Executive Compensation - Employment
Agreements."
4
<PAGE> 9
PROPOSAL FOR THE ELECTION OF DIRECTORS
At the Meeting, the shares represented by the proxies obtained hereby,
unless otherwise specified, will be voted for the election as directors of the
six nominees hereinafter named. If the Proposal with respect to the
classification of the Board of Directors, described on pages 12-14, is adopted,
it is intended that the proxies solicited by the Board of Directors will be
voted for the election of Messrs. Munson and Miller to Class I of the Company's
Board of Directors for an initial term expiring at the 1999 Annual Meeting of
Shareholders; the election of Messrs. Levy and Preston to Class II of the
Company's Board of Directors for initial terms expiring at the 2000 Annual
Meeting of Shareholders; and the election of Messrs. Graw and Lynch to Class III
of the Company's Board of Directors for an initial term expiring at the 2001
Annual Meeting of Shareholders. If such Proposal is not adopted, it is intended
that the proxies solicited by the Board of Directors will be voted for the
election of the six nominees herein named, each to serve until the next Annual
Meeting of Shareholders and until their respective successors have been duly
elected and qualified. The Board of Directors has no reason to believe that any
nominee will refuse or be unable to accept election. However, if any one or more
of the nominees herein named should not be available for election, the proxies
will be voted for such substitute nominee(s), if any, as the Board of Directors
may propose. Proxies cannot be voted at the Meeting for a greater number of
persons than the six nominees named in this Proxy Statement, although persons in
addition to those nominees may be nominated by the shareholders at the Meeting.
The following information is set forth with respect to each person
nominated for election as a director of the Company. Donald A. Graw, Jaime Levy
and Richard Preston, executive officers of the Company, are also nominees for
director at the Meeting. Reference is made to the information set forth above
under "Executive Officers" for a description of the business experience of
Messrs. Graw, Levy and Preston.
The following table sets forth certain information concerning each
director.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY DIRECTOR SINCE
- ---- --- ------------------------- --------------
<S> <C> <C> <C>
Donald A. Graw................................. 43 Chairman of the Board, President January 1994
and Chief Executive Officer
Jaime J. Levy.................................. 42 Executive Vice President July 1994
and Director
Richard Preston................................ 51 Secretary and Director October 1991
Robert Munson.................................. 62 Director January 1996
Eugene P. Lynch................................ 36 Director December 1996
Sanford Miller................................. 45 Director March 1998
</TABLE>
ROBERT MUNSON joined the Company's Board of Directors in January 1996.
From 1992 to the present, Mr. Munson has been an independent consultant to
various companies in the commercial aviation industry. Mr. Munson served for 33
years at Pratt & Whitney, and was a Vice President of Pratt & Whitney during the
period from 1980 to 1992.
EUGENE P. LYNCH joined the Company's Board of Directors in December
1996. Mr. Lynch is a Managing Director of The Clipper Group. He currently serves
on the Board of Directors of Owosso Corp., a corporation whose shares of common
stock are quoted on the Nasdaq National Market, TravelCenters of America, Inc.
and several other privately-held companies.
SANFORD MILLER joined the Company's Board of Directors in March 1998.
From 1994 to present, Mr. Miller has been the Chairman of the Board and Chief
Executive Officer of Budget Group, Inc., owner of Budget Rent A Car Corp. Prior
to 1994, he was a principal of various Budget Rent A Car franchises. Mr. Miller
served as president of the American Car Rent Association in 1993 and as chairman
of the
5
<PAGE> 10
Licensee Local Market Advisory Board of the Budget System in 1989 and 1990. He
3is also a director of MoneyGram Payment Systems, Inc., Colonial Bank of Volusia
County, and Tranex Credit Corp.
There are no family relationships among any of the Company's directors and
officers.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC"). Officers, directors and greater
than ten percent shareholders are required by regulations promulgated by the SEC
to furnish the Company with copies of all Section 16(a) forms that they file.
With reference to transactions during 1997, to the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company
and written representations, no other reports were required to be filed. In
connection with the Company's initial public offering of its Class A Common
Stock which occurred on October 31, 1997, the Executive Officers and Directors
of the Company (other than Sanford Miller) and Leon Sragowicz did not file the
Form 3s on the date the Company's Form S-1 Registration Statement was declared
effective by the SEC (the "Effective Date"), as required by the Exchange Act.
The Form 3s of such persons were filed promptly after the Effective Date.
The Board of Directors held six meetings during 1997. All of the
Company's directors attended every meeting of the Board of Directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has an Executive Committee, Audit
Committee and Compensation Committee. The members of each committee have been
appointed by the Board of Directors to serve until their respective successors
are elected and qualified.
EXECUTIVE COMMITTEE. The Executive Committee is authorized, subject to
Florida law, to exercise the power and authority of the Board of Directors in
the management of the business and affairs of the Company between meetings of
the full Board of Directors. The Executive Committee is composed of Messrs.
Graw, Levy, Lynch and Preston. The Executive Committee did not meet in 1997.
AUDIT COMMITTEE. The Audit Committee's function is to review the scope
and results of the audit of the financial statements of the Company and the
internal accounting, financial and operating control procedures of the Company.
The Audit Committee is composed of Messrs. Lynch, Munson and Miller, each of
whom is independent of management and free from any relationship that, in the
opinion of the Board of Directors, would interfere with the exercise of
independent judgment as a committee member. The Audit Committee did not meet in
1997.
COMPENSATION COMMITTEE. The Compensation and Committee's function is to
determine the cash and other incentive compensation, if any, to be paid to the
Company's executive officers. The Compensation Committee's function is to
administer and award stock options under the Company's stock option plan. The
Compensation Committee is composed of Messrs. Lynch, Munson and Miller, each of
whom is a "disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act and not employed by the Company. The Compensation Committee meet
two times in 1997.
The functions that would normally be performed by the Executive
Committee and Audit Committee were performed by the Company's Board of Directors
in 1997.
6
<PAGE> 11
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of independent outside
members of the Company's Board of Directors. The Compensation Committee's
function is to review and approve each of the elements of the executive
compensation program of the Company and assess the effectiveness and
competitiveness of the program. In addition, the Compensation Committee's
function is to administer the stock option program and other key provisions of
the executive compensation program and review with the Board of Directors all
aspects of compensation for the Company's executives.
COMPENSATION PHILOSOPHY
The Company's executive compensation program has been designed to (i)
align executive compensation with shareholder interests, (ii) attract, retain
and motivate a highly competent executive team, (iii) link compensation to
individual and Company performance and (iv) achieve a balance between incentives
for short-term and long-term results. The Company's executive compensation
package consists of the payment of a base salary, the opportunity to be paid a
cash bonus and the issuance of stock options. The Company positions base
salaries at competitive levels; however, an annual bonus has historically been
paid to reward exceptional performance in amounts above competitive levels. The
Company also believes in providing rewards for the creation of shareholder value
through the use of stock options. The Company and the Compensation Committee
believe that this philosophy will motivate the Company's executives and,
thereby, reinforce the accomplishment of the Company's strategic and financial
goals.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
BASE SALARIES
The Company's salary levels for Donald Graw, Jaime Levy, Bryan Thomas
McFarland, Dallas Cobb and Paula Sparks are determined in accordance with
written employment agreements between the Company and such executives. The
amounts being paid to the above named executive officers and the other executive
officers of the Company result from negotiations between the Company and such
executive officers, and are believed to be competitive with amounts paid to
executives in similar positions by other similarly-situated public companies in
the business of supplying aftermarket aircraft engines, engine parts and
airframe components. The Board of Directors believes that the emerging nature of
the Company's business, coupled with the attendant risks, require that the
Company offer a competitive compensation package in order to attract executive
officers of the caliber required to enable the Company to achieve its business
objectives. Salary increases are designed to reflect competitive practices in
the industry, financial performance of the Company and individual performance of
the executive.
INCENTIVE PLAN
The Company has adopted a Key Executive Annual Incentive Plan (the
"Incentive Plan") pursuant to which key executives of the Company may receive
bonus compensation based on the Company's performance during any fiscal year, as
determined by the Compensation Committee. Under the Incentive Plan, the
Company's President and Executive Vice President and other executives designated
by the Compensation Committee are assigned a target award expressed as a
percentage of base salary in varying amounts (not to exceed 100% of base
salary). The actual award is subject to achievement by the Company of minimum
levels of pre-tax income. The Compensation Committee has the authority to
establish target awards and to determine final awards in the event that the
Company's pre-tax income is less than the levels established under the Incentive
Plan during any year the Incentive Plan remains in effect.
7
<PAGE> 12
LONG-TERM INCENTIVES
The objectives of the Company's long-term incentive program are to
offer opportunities for stock ownership that are competitive with those at peer
companies and to encourage and create ownership and retention of the Company's
stock by key employees. Grant levels under the Company's employee stock option
plan consider such factors as awards to officers of companies within the
Company's peer group, the executive's tenure, responsibilities and current stock
and option holdings.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee is responsible for recommending the
compensation of the Chief Executive Officer and such compensation is determined
in the same manner as the compensation of the other officers of the Company.
SECTION 162(m) COMPLIANCE
The Company does not presently anticipate that the compensation of any
of the Named Executive Officers will exceed the $1,000,000 non-performance based
compensation threshold of Section 162(m) of the Internal Revenue Code. The
Company and the Compensation Committee will continue to monitor the compensation
levels of the Named Executive Officers and determine the appropriate response to
Section 162(m) when and if necessary. It is the Company's intention to bring the
Company's stock option program into compliance with Section 162(m), if
necessary, to insure that stock option grants are excluded from the compensation
calculation for the purposes of Section 162(m).
Comparative Stock Performance Chart
AVTEAM INC NASDAQ Composite NASDAQ Industrial
---------- ---------------- -----------------
31-Oct-97 100.00 100.00 100.00
31-Dec-97 104.60 98.63 96.33
8
<PAGE> 13
SUMMARY COMPENSATION TABLE
The following table shows, for 1995, 1996 and 1997 the compensation
earned by the Named Executive Officers:
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------------ ------------------------- PAYOUTS
OTHER LONG-TERM ALL OTHER
ANNUAL RESTRICTED NUMBER OF INCENTIVE COMPEN-
NAME AND PRINCIPAL COMPEN- STOCK OPTIONS/ PLAN SATION
POSITION(S) YEAR SALARY ($) BONUS($) SATION($)(1) AWARDS($) SARS(#) PAYOUTS($) ($)(1)
- ----------------------- ------- ------------ ------------ ------------- ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald A. Graw 1997 260,000 135,200 51,000(2)
Chairman of the 1996 288,737 -- -- -- -- --
Board, President and 1995 136,000 1,074,218 -- -- -- --
Chief Executive
Officer
Jaime J. Levy 1997 220,000 114,400 -- -- 42,000(2) -- --
Executive Vice 1996 286,430 -- -- -- -- --
President 1995 136,000 1,074,218 -- -- -- --
Bryan T. McFarland 1997 110,000 57,200 -- -- 20,000(2) -- --
Vice President - 1996 80,000 40,000 -- -- -- --
Business Development 1995 98,000 70,000 -- -- -- --
Mark S. Koondel 1997 115,000 40,000 -- -- 18,000(2) -- --
Chief Financial 1996 63,646 22,500 -- -- -- --
Officer 1995 -- -- -- -- -- --
and Treasurer (3)
Dallas Cobb 1997 108,077 28,600 -- -- 12,500(2) -- --
Vice President - 1996 63,635 15,000 -- -- -- --
Operations (4) 1995 34,500 -- -- -- -- --
</TABLE>
- ----------
(1) Perquisites to each officer did not exceed the lesser of $50,000 or 10%
of the total salary and bonus for such officer.
(2) The options have an exercise price of $8.50 per share and become
exercisable in increments of 35% on October 31, 1998 and 1999 and 30%
on October 31, 2000.
(3) Effective as of April 1996.
(4) Effective as of July 1995.
9
<PAGE> 14
STOCK OPTION GRANTS IN FISCAL 1997
The following table sets forth information regarding the grant of stock
options during 1997 to the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------------------ ANNUAL RATES OF
PERCENT OF STOCK PRICE
TOTAL OPTIONS APPRECIATION FOR
NUMBER OF GRANTED TO OPTION TERM ($)(1)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION --------------------------
NAME GRANTED FISCAL 1997 PER SHARE ($) DATE 5% 10%
- ------------------------------ ------------ ------------------ ---------------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Donald A. Graw.............. 51,000 20.4% 8.50 Oct. 30, 2007 272,340 691,050
Jaime J. Levy............... 42,000 16.8% 8.50 Oct. 30, 2007 224,280 569,100
Bryan Thomas McFarland...... 20,000 8.0% 8.50 Oct. 30, 2007 106,800 271,000
Mark S. Koondel............. 18,000 7.2% 8.50 Oct. 30, 2007 96,120 243,900
Dallas Cobb................. 12,500 5.0% 8.50 Oct. 30, 2007 66,750 169,375
</TABLE>
(1) The dollar amounts under these columns are the result of calculations at
the assumed compounded market appreciation rates of 5% and 10% as
required by the Securities and Exchange Commission over the five-year
term and, therefore, are not intended to forecast possible future
appreciation, if any, of the Class A Common Stock.
OPTION EXERCISES IN FISCAL 1997 AND
OPTION VALUES AT THE END OF FISCAL 1997
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during 1997 and
unexercised options held as of the end of 1997.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISABLE
UNEXERCISABLE IN-THE-MONEY
OPTIONS AT OPTIONS AT
NUMBER OF DECEMBER 31, 1997 DECEMBER 31, 1997($)
SHARES --------------------- -----------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------ -------------- ------------------ --------------------- -----------------------
<S> <C> <C> <C> <C>
Donald A. Graw.............. -- -- --/51,000 --/--
Jaime J. Levy............... -- -- --/42,000 --/--
Bryan Thomas McFarland...... -- -- --/20,000 --/--
Mark S. Koondel............. -- -- --/18,000 --/--
Dallas Cobb................. -- -- --/12,500 --/--
</TABLE>
DIRECTOR COMPENSATION
Each non-employee director of the Company is entitled to be paid such
compensation for his services and reimbursed for such expenses as fixed by the
Board of Directors.
EMPLOYMENT AGREEMENTS
On December 6, 1996, Messrs. Graw and Levy entered into employment
agreements (collectively, the "Graw and Levy Employment Agreements") with the
Company providing for employment as the President and Chief Executive Officer
and Executive Vice President, respectively. The Graw and Levy Employment
Agreements provide that Messrs. Graw and Levy will receive an annual base salary
of $260,000 and $220,000, respectively, for an initial term of three years
expiring December 1999, as well
10
<PAGE> 15
as the right to participate in the Company's 1996 Stock Option Plan and the
Incentive Plan. The Graw and Levy Employment Agreements contain confidentiality
and noncompete covenants from Messrs. Graw and Levy in favor of the Company.
Upon termination without cause, Messrs. Graw and Levy will be entitled to
receive two years' annual base salary paid in one lump sum.
On January 5, 1998, Mr. McFarland entered into an employment agreement
(the "McFarland Employment Agreement") with the Company providing for employment
as the Vice President - Business Development. On March 1, 1998, Mr. Cobb entered
into an employment agreement (the "Cobb Employment Agreement") with the Company
providing for employment as the Vice President Operations. The McFarland and
Cobb Employment Agreements provide that Messrs. McFarland and Cobb will receive
an annual base salary of $140,000 and $127,500, respectively, for a term of
three years, as well as the right to participate in the Company's 1996 Stock
Option Plan and the Incentive Plan. The base salary is subject to increase based
on the individual performance of the executive and competitive practices in the
industry. The McFarland and Cobb Employment Agreements contain confidentiality
and noncompete covenants from Messrs. McFarland and Cobb in favor of the
Company. Upon termination without cause, Messrs. McFarland and Cobb will be
entitled to receive one year's annual base salary paid in bi-weekly
installments.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of three members, none of whom are
employed by the Company. Each member of the Compensation Committee is a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange Act.
CERTAIN TRANSACTIONS
THE CLIPPER GROUP PRIVATE PLACEMENTS
On December 6, 1996, the Company issued and sold to The Clipper Group
in a private sale 1,480,000 shares of Class A Preferred Stock and 220,000 shares
of Class B Preferred Stock for an aggregate purchase price of $11.9 million. On
August 21, 1997, the Company issued and sold to The Clipper Group in a private
sale 494,642 shares of Class A Preferred Stock and 219,644 shares of Class B
Preferred Stock for an aggregate purchase price of approximately $5.0 million.
All of the outstanding shares of Class A Preferred Stock automatically converted
into an aggregate of 1,974,642 shares of Class A Common Stock and all of the
outstanding shares of Class B Preferred Stock automatically converted into an
aggregate of 439,644 shares of Class B Common Stock upon the consummation of the
Company's initial public offering of Class A Common Stock which occurred on
October 31, 1997 (the "Offering").
PARATI AGREEMENT
On September 5, 1995, the Company entered into the Parati Agreement
with Parati, a corporation wholly-owned by Leon Sragowicz, the former Chairman
of the Board of Directors of the Company, pursuant to which Parati purchased
Pratt & Whitney engines for disassembly. The Company handled all of the
operational and administrative aspects of the agreement and Parati remained the
owner of the engine parts from the disassembled aircraft engines purchased by
Parati. Any profit remaining after recovery by Parati of its cost of sales and
by the Company of any overhaul costs was divided equally by Parati and the
Company. On August 21, 1997, the Company and Parati terminated the Parati
Agreement and the Company purchased the remaining inventory of engine parts
valued at $270,648 (the "Parati Balance"). On August 21, 1997, the Company
issued and sold 38,664 shares of Class A Common Stock to Mr. Sragowicz as
payment for the Parati Balance. The Company does not intend to utilize similar
agreements to acquire Engines or Components in the future. Management believes
that the
11
<PAGE> 16
agreement with Parati was on terms which were no less favorable to the Company
than those which would have been obtained from independent third parties.
LOANS MADE BY EXISTING COMMON SHAREHOLDERS TO COMPANY
Mr. Sragowicz has loaned and advanced money to the Company on several
occasions for inventory acquisitions and general corporate purposes. On August
21, 1997, the Company issued and sold 289,108 shares of Class A Common Stock to
Mr. Sragowicz for an aggregate purchase price of approximately $2.0 million as
payment of the indebtedness evidenced by these loans. The Company does not
intend to enter into loan arrangements with Mr. Sragowicz in the future.
Mr. Preston has loaned and advanced money to the Company on several
occasions for inventory acquisitions and general corporate purposes. Immediately
prior to the consummation of the Offering, the Company had outstanding
indebtedness to Mr. Preston in the amount of $288,965, of which (i) $100,182
bears interest at a fluctuating rate tied to the prevailing rate as established
by the Internal Revenue Service and (ii) the remaining $188,783 is non-interest
bearing. Upon the completion of the Offering, these loans were repaid to Mr.
Preston. The Company does not intend to enter into loan arrangements with Mr.
Preston in the future.
Messrs. Graw and Levy have each loaned and advanced money to the
Company on several occasions for inventory acquisitions and general corporate
purposes. Immediately prior to the consummation of the Offering, the Company had
outstanding indebtedness to each of them in the amount of $100,182 which bore
interest at a fluctuating rate tied to the prevailing rate as established by the
Internal Revenue Service. Upon the completion of the Offering, these loans were
repaid to Messrs. Graw and Levy.
The Company does not intend to enter into any material transaction with
officers or directors, or their family members, without the approval of a
majority of the directors who do not have an interest in such transaction.
PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION
TO PROVIDE FOR CLASSIFICATION OF THE BOARD OF DIRECTORS
GENERAL
The Board of Directors has approved an amendment (the "Board
Amendment") to Article V "Board of Directors" set forth in the Company's
Articles of Incorporation (the "Articles") to classify the Company's Board of
Directors into three classes of directors serving staggered three-year terms;
and to make technical amendments to the Articles to adjust certain of the
Company's corporate governance procedures to accommodate the existence of a
classified board of directors and staggered three-year terms for directors.
DESCRIPTION OF PROPOSED AMENDMENTS
The Articles currently provide for a single class of directors. The
Board Amendment would classify the Board of Directors into three classes of
directors serving staggered terms. The Board Amendment provides that in the
event of any increase in the number of directors, the directors then in office
may select the class or classes to which the additional directors shall be
assigned, provided that the directors shall be distributed among the three
classes as nearly equally as possible.
The Articles currently provide that the term of office for each
director is one year. If the Board Amendment is approved, the slate of six
directors proposed for election at the Meeting would be elected to three
separate classes with assigned terms of from one to three years, as follows: the
directors in
12
<PAGE> 17
Class I, consisting of two directors, would be elected for a one year term
expiring at the 1999 Annual Meeting of Shareholders; directors in Class II,
consisting of two directors, would be elected for two year terms expiring at the
2000 Annual Meeting of Shareholders; and directors in Class III, consisting of
three directors, would be elected for three year terms expiring at the 2001
Annual Meeting of Shareholders. Beginning with the 1999 Annual Meeting of
Shareholders, only one class of directors would be elected at each Annual
Meeting of Shareholders, the directors so elected would succeed the directors of
the class whose term was then expiring and each newly elected director would
serve for a three-year term. If the Board Amendment is not approved, the six
nominees named herein will be nominated to serve for a one year term ending at
the 1999 Annual Meeting of Shareholders and until their respective successors
have been duly elected and qualified. See "Proposal for the Election of
Directors," beginning on page 5 for information regarding the individual
nominees for director.
REASONS FOR AND EFFECTS OF PROPOSED AMENDMENTS
The Board of Directors believes that a classified board of directors
would serve the best interests of the Company and its shareholders by promoting
the continuity and stability of the Company and its business.
The Board of Directors also believes that a classified board of
directors would better enable the Board of Directors to protect the interests of
shareholders in the event that another entity seeks to accumulate a substantial
amount of the Class A Common Stock in order to gain control of the Company or
replace its management. A corporate raider may accumulate a substantial equity
position in a public company as a prelude to proposing a takeover, a
restructuring or a sale of all or part of the company or other similar
extraordinary corporate action. Such actions are often undertaken without
advance notice to or consultation with the target company's board of directors
or management. The purchaser may have its own agenda and little or no concern
for the interests of other shareholders. In many cases, the purchaser seeks
representation on the target company's board of directors in order to increase
the likelihood that any such transaction will be consummated. If the target
company resists these efforts to obtain board of directors representation, the
purchaser may initiate a proxy contest to have itself or its nominees elected to
the board of directors in place of certain directors or the entire board of
directors.
The Board of Directors believes that if such a purchaser acquired a
significant or controlling interest in the Class A Common Stock, the purchaser's
ability to promptly remove and replace the Board of Directors, without the Board
of Directors' consent, would severely curtail the Board of Directors' ability to
negotiate effectively with the purchaser. The threat of imminent removal also
would deprive the Board of Directors of the time and opportunity necessary to
evaluate appropriately any takeover proposal, to obtain and study alternative
proposals and to help ensure that the best price would be obtained in any
transaction involving the Company. The Board of Directors believes that such a
sudden change in its membership could also be harmful to the continuity of the
Company's operations, deprive shareholders of maximum value for their shares and
jeopardize the rights of the minority shareholders.
Under a three-class structure, at least two annual shareholder
meetings, instead of one, would generally be required for such a purchaser to
obtain control of the Board of Directors by electing a majority of its
representatives to the Board of Directors. The amendments are designed to make
it more time-consuming to obtain majority control of the Board of Directors
without its consent, and thus reduce the vulnerability of the Company to an
unsolicited takeover proposal or to an unsolicited proposal for the
restructuring or sale of all or part of the Company or to enter into any other
extraordinary transaction. The Board of Directors believes that the Board
Amendment will serve to encourage any person intending to attempt such a
takeover or other transaction to negotiate with the Board of Directors, and that
the Board of Directors therefore will be better able to protect the interests of
all of the Company's shareholders. The Board Amendment is not being recommended
in response to any specific effort of which the Company is aware to accumulate
securities of the Company or acquire control of the Company or the Board of
Directors.
13
<PAGE> 18
The full text of the Articles reflecting the proposed Board Amendment
is attached to this Proxy Statement as EXHIBIT A. The foregoing description of
the Board Amendment is qualified in its entirety by reference to EXHIBIT A.
The Articles provide that Article V "Board of Directors" may be amended
or repealed only by the affirmative vote of at least two-thirds of the
outstanding shares of Class A Common Stock entitled to vote for the election of
directors. Therefore, approval of the Board Amendment will require the
affirmative vote of at least two-thirds of the outstanding shares of Class A
Common Stock entitled to vote for the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE ARTICLES TO PROVIDE FOR THE CLASSIFICATION OF THE BOARD OF
DIRECTORS AND TO ADOPT RELATED PROVISIONS.
RATIFICATION OF THE REAPPOINTMENT
OF THE COMPANY'S AUDITORS
The Board of Directors has recommended the reappointment of Ernst &
Young LLP as independent accountants of the Company for 1998. Ernst & Young LLP
has audited the books and records of the Company beginning with the Company's
fiscal year ended December 31, 1993. Although the appointment of Ernst & Young
LLP as independent auditors of the Company does not require ratification by the
Company's shareholders, the Board of Directors considers it appropriate to
obtain such ratification. Accordingly, the vote of shareholders on this matter
is advisory in nature and has no binding effect upon the Board of Directors'
reappointment of Ernst & Young LLP. A representatives of Ernst & Young LLP is
expected to be present at the Meeting and will be given the opportunity to make
a statement if he or she desires to do so and to respond to questions.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business to be presented at the Meeting. If any other
business should properly come before the Meeting, the persons named in the
accompanying proxy will vote thereon as in their discretion they may deem
appropriate, unless they are directed by a proxy to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the SEC, proposals of
shareholders intended to be presented at the Company's 1999 Annual Meeting of
Shareholders must be received in writing by the Company's Secretary at the
Company's principal executive offices not later than December 28, 1998 in order
to be included in the Company's Proxy Statement and form of Proxy relating to
that Meeting.
By Order of the Board of Directors,
DONALD A. GRAW, Chairman and
Chief Executive Officer
Miramar, Florida
April 27, 1998
14
<PAGE> 19
EXHIBIT A
ARTICLES OF AMENDMENT
TO
THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
AVTEAM, INC.
Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act, the undersigned Florida profit corporation adopts the following
Articles of Amendment to its Articles of Incorporation:
1. The name of the corporation is AVTEAM, Inc. (the
"Corporation").
2. In order to create three classes of the Corporation's Board of
Directors (the "Board"), Article V of the Articles of
Incorporation of the Corporation is hereby amended in its
entirety, so that, as amended, Article V shall be and read as
follows:
"ARTICLE V
BOARD OF DIRECTORS
DIRECTORS
---------
A. NUMBER AND TERM OF DIRECTORS.
The Corporation's Board shall consist of no fewer
than three nor more than 11 directors, with the exact number to be
fixed from time to time by resolution of the Board. The number of
directors may be decreased at any time and from time to time by a
majority of the directors then in office, but only to eliminate
vacancies existing by reason of the death, resignation, removal or
expiration of the term of one or more directors. No decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director.
B. CLASSIFICATION OF DIRECTORS.
The Board shall be divided into three classes as
nearly equal in number as possible, hereby designated Class I, Class II
and Class III. The term of office of the initial Class I directors
shall expire at the next succeeding annual meeting of the shareholders
of the Corporation, the term of office of the initial Class II
directors shall expire at the second succeeding annual meeting of the
shareholders of the Corporation and the term of office of the initial
Class III directors shall expire at the third succeeding annual meeting
of the shareholders of the Corporation. For the purposes hereof, the
initial Class I, Class II and Class III directors shall be those
directors elected at the 1998 annual meeting of the shareholders of the
Corporation and designated as members of such Class. At each annual
meeting of the shareholders of the Corporation after the 1998 annual
meeting, directors to replace those of a Class whose terms expire at
such annual meeting shall be elected to hold office until the third
succeeding annual meeting and until their respective successors shall
have been duly elected and shall qualify. If the
<PAGE> 20
number of directors is hereafter increased, the directors then in
office shall select the class or classes to which the newly created
directorships shall be assigned so as to make all classes as nearly
equal in number as possible.
C. DIRECTOR VACANCIES: REMOVAL. Whenever any vacancy on the
Board shall occur due to death, resignation, retirement,
disqualification, removal, increase in the number of directors, or
otherwise, only a majority of directors in office, although less than a
quorum of the entire Board, may fill the vacancy or vacancies for the
balance of the unexpired term or terms, at which time a successor or
successors shall be duly elected by the shareholders and qualified.
Shareholders shall not, and shall have no power to, fill any vacancy on
the Board.
D. SHAREHOLDER NOMINATIONS OF DIRECTOR CANDIDATES. Only
persons who are nominated in accordance with the following procedures
shall be eligible for elections as directors of the Corporation.
Nominations of persons for election to the Board at an annual or
special meeting of shareholders may be made by or at the direction of
the Board, by any nominating committee or person appointed by the
Board, or by any shareholder of the Corporation entitled to vote for
the election of directors at the meeting who complies with the
procedures set forth in this paragraph; provided, however, that
nominations of persons for election to the Board at a special meeting
may be made only if the election of directors is one of the purposes
described in the special meeting notice required by Section 607.0705 of
the Florida Business Corporation Act. Nominations of persons for
election at annual meetings, other than nominations made by or at the
direction of the Board, shall be made pursuant to timely notice in
writing to the secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation not less than One
Hundred Twenty (120) days nor more than One Hundred Eighty (180) days
prior to the first anniversary of the date of the Corporation's notice
of annual meeting provided with respect to the previous year's annual
meeting; provided, however, that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed to be
more than 30 calendar days earlier than the date contemplated by the
previous year's proxy statement, the notice by the shareholder to be
timely must be received not later than the close of business on the
tenth (10th) day following the date on which notice of the date of the
annual meeting is given to shareholders or made public, whichever first
occurs. The shareholder's notice to the secretary shall set forth (a)
as to each person whom the shareholder proposes to nominate for
election or re-election as a director at the annual meeting, (i) the
name, age, business address and residence address of the proposed
nominee, (ii) the principal occupation or employment of the proposed
nominee, (iii) the class and number of shares of capital stock of the
Corporation that are beneficially owned by the proposed nominee, and
(iv) any other information relating to the proposed nominee that is
required to be disclosed in solicitation for proxies for election of
directors pursuant to Rule 14a under the Securities Exchange Act of
1934, as amended; and (b) as to the shareholder giving the notice of
nominees for election at the annual meeting, (i) the name and record
address of the shareholder, and (ii) the class and number of shares of
capital stock of the Corporation that are beneficially owned by the
shareholder. The Corporation may require any proposed nominee for
election at an annual or special meeting of shareholders to furnish any
other information as may reasonably be required by the Corporation to
determine the eligibility of the proposed nominee to serve as a
director of the Corporation. No person shall be eligible for election
as a director of the Corporation unless nominated in accordance with
the procedures set forth in this paragraph. The Chair of the meeting
shall, if the facts warrant, determine and declare to the meeting that
a nomination was not made in accordance with the requirements of this
paragraph, and if the Chair should so determine, the Chair shall so
declare to the meeting and the defective nomination shall be
disregarded.
2
<PAGE> 21
E. AMENDMENTS. Notwithstanding anything contained in these
Articles of Incorporation to the contrary, this Article V shall not be
altered, amended or repealed except by an affirmative vote of at least
two-thirds of the outstanding shares of all capital stock entitled to
vote for the election of directors."
3. This Amendment to the Articles of Incorporation of the Corporation
shall be effective at the time of filing with the Secretary of State of the
State of Florida.
4. This Amendment to the Articles of Incorporation of the Corporation
was unanimously adopted and approved by the Board of Directors of the
Corporation on _____________, 1998 and approved and adopted by the shareholders
of the Corporation on _____________, 1998, and the number of votes cast by the
shareholders of the Corporation for the Amendment to the Articles of
Incorporation of the Corporation was sufficient for such approval.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment this ___ day of ____________, 1998.
AVTEAM, INC.
By:
-------------------------------------
Donald A. Graw
PRESIDENT AND CHIEF EXECUTIVE OFFICER
3
<PAGE> 22
Appendix
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF BOARD OF DIRECTORS OF
AVTEAM, INC.
The undersigned hereby appoints Donald A. Graw and Mark S. Koondel, and
each of them, as proxies each with full power of substitution to vote, as
directed below, all of the shares of Class A Common Stock of the Company held or
owned by the undersigned at the Annual Meeting of Shareholders (the "Meeting")
of AVTEAM, Inc. (the "Company") to be held at Don Shula's Hotel, 6842 Main
Street, Miami Lakes, Florida 33014, on June 3, 1998 at 1:00 p.m., local time,
and at any adjournments thereof, hereby revoking any proxies heretofore given.
1. ELECTION OF DIRECTORS: FOR all nominees listed below [ ]
(except as set forth to the contrary below)
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
Donald A. Graw, Jaime J. Levy, Richard Preston,
Robert Munson, Eugene P. Lynch and Sanford Miller
(INSTRUCTION: To withhold authority to vote for an individual
nominee, write that nominee's name on the space provided below.)
-----------------------------------------------
2. AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
to provide for the Board of Directors to be divided into
three classes and to adopt related provisions.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3. RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP
as independent accountants of the Company for 1998.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON ANY OTHER BUSINESS WHICH PROPERLY COMES BEFORE THE
MEETING AND AT ANY ADJOURNMENTS THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREBY
BY THE UNDERSIGNED SHAREHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN FAVOR OF ALL NOMINEES AND FOR PROPOSALS NO. 2 AND 3.
Please sign exactly as your name appears on your proxy card. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by an
authorized person.
DATED: , 1998
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Signature
PLEASE MARK, SIGN, DATE AND MAIL THE CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
