<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>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
--------------------------------------------------------------------------------
(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
[AMERICAN AIRCARRIERS SUPPORT LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 17, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
American Aircarriers Support, Incorporated will be held at the Park Hotel, 2200
Rexford Road, Charlotte, North Carolina 28211 on Monday, July 17, 2000, at 10:00
a.m., Eastern Daylight Time, and thereafter as it may from time to time be
adjourned, for the following purposes:
1. To elect five directors to hold office for the term set forth
in the accompanying Proxy Statement and until their
successors shall have been duly elected and qualified;
2. To ratify the appointment of Arthur Andersen, LLP as
independent auditors; and
3. To consider and transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 31,
2000, as the record date for the determination of shareholders entitled to
notice of and to vote at this meeting or any adjournment thereof.
By Order of the Board of Directors,
June 7, 2000 /s/ David M. Furr
-------------------------------------
David M. Furr, Corporate Secretary
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL BE
GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
<PAGE> 3
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
587 GREENWAY INDUSTRIAL DRIVE
LAKEMONT BUSINESS PARK
FORT MILL, SOUTH CAROLINA 29715
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD JULY 17, 2000
GENERAL
The enclosed proxy is solicited by the Board of Directors of American
Aircarriers Support, Incorporated (hereinafter referred to as the "Company") for
use at the Annual Meeting of Shareholders to be held at the Park Hotel, 2200
Rexford Road, Charlotte, North Carolina 28211 on Monday, July 17, 2000, at 10:00
a.m., Eastern Daylight Time, for the purposes set forth in the foregoing Notice
of Annual Meeting of Shareholders. This Proxy Statement and the form of proxy
will be mailed to shareholders on or about June 7, 2000.
The record date with respect to this solicitation was May 31, 2000.
All holders of record of Common Stock of American Aircarriers Support,
Incorporated as of the close of business on that date are entitled to vote at
the meeting. As of the record date, the Company had 7,210,304 shares of Common
Stock outstanding, excluding treasury shares. Each share of Common Stock is
entitled to one vote. A majority of the votes entitled to be cast constitutes a
quorum. If a quorum exists, action on any matter other than the election of
directors will be approved by the affirmative vote of the majority of shares
present in person or by proxy at the meeting and entitled to vote. Directors
will be elected by a plurality of the votes of the shares present in person or
by proxy at the meeting and entitled to vote in the election. Abstentions and
broker non-votes are not counted in the calculation of the vote.
A proxy may be revoked by the shareholder at any time prior to its
being voted. If a proxy is properly signed and is not revoked by the
shareholder, the shares it represents will be voted at the meeting in
accordance with the instructions of the shareholder, unless it is received in
such form as to render it invalid. If the proxy is signed and returned without
specifying choices, the shares will be voted in accordance with the
recommendations of the Board of Directors.
As a matter of policy, proxies, ballots and voting tabulations that
identify individual shareholders are held confidential by the Company. Such
documents are available for examination only by the inspectors of election,
none of whom is an employee of the Company, and certain employees associated
with tabulation of the vote. The identity of the vote of any shareholder is not
disclosed except as may be necessary to meet legal requirements.
The cost of this solicitation will be borne by the Company. Employees
and directors of the Company may solicit proxies but will not receive any
additional compensation for such solicitation. Proxies may be solicited
personally or by mail, facsimile, telephone or telegraph.
<PAGE> 4
I. ELECTION OF DIRECTORS
Information concerning the five nominees for election as directors is
shown below. All nominees are now members of the Board of Directors. The Board
of Directors knows of no reason why any nominee would be unable to serve as a
director. If any nominee should for any reason become unable to serve, the
shares represented by all valid proxies will be voted for the election of such
other person as the Board of Directors may designate or the Board of Directors
may reduce the number of directors to eliminate the vacancy. There is currently
one vacancy on the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE CAPACITIES IN WHICH SERVED
---------------------------- --- --------------------------------------------------
<S> <C> <C>
Karl F. Brown(1) 36 Chairman of the Board and Chief Executive Officer
Anton K. Khoury 40 President of AAS-Amjet, Inc. and Director
David M. Furr(2) 42 Director
Pamela K. Clement(1)(2) 45 Director
James T. Comer, III(1) 51 Director
</TABLE>
---------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Karl F. Brown served as President of the Company from 1989 until
February 1999. Mr. Brown has served as Chairman of the Board and Chief
Executive Officer of the Company since January 1, 1998. From 1986 to 1989, Mr.
Brown served as a salesman for U.S. Aviation, Inc., an aircraft components and
spare parts redistributor partially owned by Herman O. Brown, Jr., Mr. Brown's
father. Mr. Brown attended the University of North Carolina at Charlotte and
received a Bachelor of Arts degree in Business in 1986.
Anton K. Khoury has been a member of the Board of Directors of the
Company and the President of AAS-Amjet, Inc. since November 1998. He was the
President and founder of American Jet Engines Services, Inc. (the predecessor
of AAS-Amjet, Inc.) from its inception in 1987 until its assets were acquired
by the Company in November 1998. Mr. Khoury has nineteen years experience in
the commercial aircraft overhaul and repair industry, having served as Senior
Propulsion Engineer for Eastern Airlines from 1984 to 1987 and Batch Air from
1980 to 1984. Mr. Khoury received a Bachelor of Science degree in Aerospace
Engineering from Northrop University in 1980. He has held a FAA Airframe and
Power Plant Certificate since 1983.
David M. Furr has served as a director of the Company since January
1998. Mr. Furr has been a partner in the law firm of Gray, Layton, Drum,
Solomon, Sigmon, Furr & Smith, P.A., Gastonia, North Carolina, and a partner of
a predecessor firm for in excess of seven years. Mr. Furr has practiced
corporate and tax law since 1983 and has represented the Company with respect
to corporate and tax matters since 1985. Mr. Furr is also a partner of Pierian
Partners, L.L.P., a Charlotte, North Carolina-based investment
banking/marketing firm and is also a director and a member of StockCar Stocks
Advisors, LLC, an advisor to the StockCar Stocks Index Fund, a mutual fund that
invests in companies involved in the sponsorship of, or that derive income
from, NASCAR sanctioned racing events at the Winston Cup Racing level. Mr. Furr
is also a director of Piedmont Venture Partners, a partnership that provides
equity capital to emerging growth companies in the fields of information
technologies and life sciences in the South Atlantic Region. Mr. Furr received
a Bachelor of Arts degree and his Juris Doctor degree from Wake Forest
University in 1980 and 1982, respectively, and a Master of Taxation degree from
the University of Florida in 1983. Mr. Furr is admitted to practice before the
United States Tax Court.
Pamela K. Clement has been a director of the Company since February
1998. She is currently a partner of Pierian Partners, L.L.P., a Charlotte,
North Carolina-based investment banking/marketing firm and
-2-
<PAGE> 5
is also a director and a member of StockCar Stocks Advisors, LLC, an advisor to
the StockCar Stocks Index Fund, a mutual fund that invests in companies
involved in the sponsorship of, or that derive income from, NASCAR sanctioned
racing events at the Winston Cup Racing level. Since May 1996, Ms. Clement has
also been a director of Piedmont Venture Partners, a partnership that provides
equity capital to emerging growth companies in the fields of information
technologies and life sciences in the South Atlantic Region. From April 1995 to
May 1996, Ms. Clement was engaged in investing for her own account. From
September 1992 to March 1995, she served as president, chief operating officer
and a director of Sovereign Advisers, Inc., a Charlotte, North Carolina-based
investment advisory firm. Ms. Clement sold her interest in Sovereign Advisers,
Inc. to Interstate/Johnson Lane Corporation in 1995. From 1976 through 1992,
Ms. Clement was employed in a variety of positions with a number of investment
banking and money management firms. Ms. Clement received a Bachelor of Arts
degree in Economics from Cornell University in 1976.
James T. Comer, III has been a director of the Company since March
1998. Since 1991, Mr. Comer has been the president of J.T. Comer Consulting,
Inc. and chairman of Southern Pension Services, Inc., both of which are
wholly-owned by Mr. Comer. J.T. Comer Consulting, Inc. provides employee
benefit consulting services and Southern Pension Services, Inc. provides
pension administration services. From 1979 to 1986, Mr. Comer served as
president of J.T. Comer & Associates, Inc., a pension administration and
benefit consulting firm that was sold to the D & B Plan Services Division of
the Dunn & Bradstreet Corporation in 1986. Mr. Comer was employed as the
president of the D & B Plan Services Division from 1986 to 1991. Mr. Comer
received a Bachelor of Arts degree in Economics from the University of North
Carolina at Charlotte in 1971.
COMMITTEES OF THE BOARD
The Board of Directors has delegated certain of its authority to a
Compensation Committee and an Audit Committee. The Compensation Committee is
currently composed of Mr. Furr and Ms. Clement. The Audit Committee is composed
of Messrs. Brown and Comer and Ms. Clement. No member of either committee is a
former or current officer or employee of the Company with the exception of Mr.
Brown.
The Compensation Committee held four meetings in 1999. The primary
function of the Compensation Committee is to review and make recommendations to
the Board with respect to the compensation, including bonuses, of the Company's
officers and to administer the Company's 1998 Omnibus Stock Option Plan.
The Audit Committee held one meeting in 1999. The function of the
Audit Committee is to review and approve the scope of audit procedures employed
by the Company's independent auditors, to review and approve the audit reports
rendered by both the Company's independent auditors and to approve the audit
fee charged by the independent auditors. The Audit Committee reports to the
Board of Directors with respect to such matters and recommends the selection of
independent auditors.
BOARD AND COMMITTEE ATTENDANCE
In 1999, the Board of Directors held five formal meetings and took a
number of actions by unanimous written consent in lieu of meetings. Overall
attendance was 100%. Attendance was at least 100% for each director.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
Elaine T. Rudisill, age 44, has served as Chief Financial Officer of
the Company since December 1997. In 1996, Ms. Rudisill became Chief Financial
Officer, Vice President of Finance and Treasurer of Novavax, Inc., Columbus,
Maryland, which until late 1995 was a subsidiary of IGI, Inc. Novavax, Inc. is
engaged in the development of biopharmaceutical products and, since its
spin-off from IGI, Inc., has been
-3-
<PAGE> 6
publicly traded. From 1987 through 1996, Ms. Rudisill served as Assistant
Controller, then Controller, of IGI, Inc., Buena, New Jersey, a publicly-traded
diversified animal healthcare and human cosmetics manufacturer. She graduated
from the University of North Carolina at Chapel Hill in 1977 with a Bachelor of
Science degree in Accounting.
Joseph E. Civiletto has served as President and a Director of the
Company since February 1999. From February 1992 until joining the Company in
February 1999, he was a Vice President and Chief Financial Officer of Aviation
Sales Company. From 1982 through 1992, Mr. Civiletto held various financial,
planning and audit positions with Baker Hughes, Inc. and Arthur Andersen LLP.
He graduated from Texas A & M University in 1982 with a Bachelor of Business
Administration degree in Accounting. Mr. Civiletto and the Company are
currently negotiating the terms of his resignation as Chief Operating Officer,
President, and Director. Such negotiations will not be finalized until after
the printing of this proxy statement and, as a result, the company is unable to
set forth the specific date of Mr. Civiletto's resignation.
Micah Chapman, age 34, has served as President of AAS Complete
Controls, Inc. since April 1999. He was the President and co-founder of
Complete Controls, Inc. (the predecessor AAS Complete Controls, Inc.) from it
inception in 1997 until its assets were acquired by AAS in April 1999. Mr.
Chapman has twelve years experience in the commercial aircraft overhaul and
repair industry including Director of Maintenance with International Jet
Charter from 1994 through 1996, Lockheed Aero Mod from 1991 through 1994 and
Eastern Airlines from 1988 through 1991. He has held an Airframe and PowerPlant
Certificate since 1988.
Kenneth R. Auen, age 50, has served as President of AAS Aviation
Services, Inc. since September 1999. Mr. Auen has 30 years experience in the
commercial aircraft overhaul and repair industry as Vice President of Aircraft
Sales and Leasing for the Ages Group and as Director of Sales and Marketing at
Nordam and Cleveland Pneumatics prior to joining AAS. Mr. Auen received a
Bachelor of Science degree in Aeronautical Engineering from Purdue University.
Russell Carlson, age 29, has served as Vice President - Domestic Sales
since December 1999. Mr. Carlson has ten years experience in the aircraft
industry including experience as Director of Sales for Avatar Alliance prior to
joining AAS. Mr. Carlson has held an Airframe and Power Point Certificate since
1990.
William E. Werts, age 66, has been employed by the Company since 1990
as Director of Sales. Mr. Werts has been employed in the aircraft components
and spare parts redistribution industry for over 35 years, including five years
at U.S. Aviation, Inc. and 22 years at Charlotte Aircraft Corporation.
James E. Cauble, age 55, has been the Company's Director of Quality
Control since 1990 and Director of Operations since 1999. Mr. Cauble has been
employed in the aircraft components and spare parts redistribution industry for
over 36 years, including eight years at U.S. Aviation, Inc. and 22 years at
Charlotte Aircraft Corporation. Mr. Cauble has held an Airframe and Powerplant
License since 1970 and an FAA Inspection Authorization since 1975.
David B. Abbott, age 44, has served as the Company's Vice President of
International Sales since January 2000. He previously served as the Company's
Director of Marketing since 1990. Prior to joining the Company, Mr. Abbott was
employed in various sales and marketing positions for over 14 years in the
aviation industry.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the annual
and long-term compensation for services in all capacities to the Company of
Karl F. Brown, who served as Chief Executive Officer and President during 1999,
Joseph Civiletto, who joined the Company in February 1999, and Elaine T.
Rudisill, who joined the Company in December 1997 and has served as Chief
Financial Officer during
-4-
<PAGE> 7
1998 and 1999. These three individuals (the "Named Executive Officers") are the
only executive officers of the Company whose total annual salary and bonus
exceeded $100,000 during the year ended December 31, 1999.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL AWARDS
FISCAL COMPENSATION(1) SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS(#) COMPENSATION(1)
--------------------------- ---- ------ ----- ----------------------- ---------------
<S> <C> <C> <C> <C> <C>
Karl F. Brown, 1999 $ 269,407 -0- -0- $ 16,632(2)
Chairman of the Board and 1998 200,000 100,000 120,000 33,921(2)
Chief Executive Officer 1997 150,000 -0- -0- 17,972(2)
Joseph E. Civiletto, 1999 $ 232,738 200,000 $ 17,242
Chief Operating Officer and 1998 (3) (3) -0- (3)
President(5) 1997 (3) (3) -0- (3)
Elaine T. Rudisill, 1999 $ 118,669 -0- -0- -0-
Chief Financial Officer 1998 65,000 60,000 35,000 -0-
1997 (4) (4) -0- 8,458(4)
</TABLE>
-------------------
(1) Excludes S Corporation distributions to Mr. Brown of $2,284,711 and
$1,500,000 in 1998 and 1997.
(2) Represents costs attributable to two Company automobiles provided for
use by Mr. Brown and his spouse, cash advances made in connection with
a split-dollar life insurance plan maintained by the Company on behalf
of Mr. Brown and contributions by the Company into Mr. Brown's 401(k)
account.
(3) Mr. Civiletto was first employed by the Company in February 1999.
(4) Ms. Rudisill was compensated as a consultant during the month of
December 1997 and was first employed by the Company as an executive
officer in January 1998.
(5) Mr. Civiletto and the Company are currently negotiating the terms of
his resignation as Chief Operating Officer, President, and Director.
Option Grants Table. The following table sets forth information on
grants of stock options pursuant to the Company's 1998 Omnibus Stock Option
Plan during 1999 to the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES PERCENT OF TOTAL EXERCISE OR
UNDERLYING OPTIONS/ OPTIONS/SARS GRANTED TO BASE PRICE EXPIRATION
NAME SARS GRANTED EMPLOYEES IN FISCAL YEAR ($/SHARE)(1) DATE
---------------------- -------------------- ------------------------ ------------ ----------
<S> <C> <C> <C> <C>
Joseph E. Civiletto 200,000 88% $9.625 1/21/09
</TABLE>
---------------
(1) The exercise price is equal to the market price of the underlying
security on the date of grant. One-fourth of such options vest
annually, the initial one-fourth vesting upon grant.
Fiscal Year-End Options/Option Values Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDER- VALUE OF UNEXERCISED IN-
LYING UNEXERCISED OPTIONS/ THE-MONEY OPTIONS/SARS
SHARES SARS AT FISCAL YEAR-END AT FISCAL YEAR-END($)(1)
ACQUIRED VALUE ---------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
-------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Karl F. Brown -0- -0- 90,000 21,500 $ 69,000 $ 69,000
Joseph E. Civiletto -0- -0- 100,000 100,000 -0- -0-
Elaine T. Rudisill -0- -0- 21,250 21,250 30,625 30,625
</TABLE>
---------------
(1) The dollar values are calculated based upon the difference between the
exercise price of the options and the closing price for the Common
Stock of $7.75 on December 31, 1999.
-5-
<PAGE> 8
No employee of the Company receives any additional compensation for
his services as a director. Non-management directors receive no salary for
their services as such, but receive a fee of $250 per meeting attended. The
Board of Directors has also authorized payment of reasonable travel or other
out-of-pocket expenses incurred by non-management directors in attending
meetings of the Board of Directors. In 1999, Mr. Furr, Ms. Clement and Mr.
Comer, all of whom are non-management directors, received options to purchase
6,000, 6,000 and 5,000 shares of Common Stock at an exercise price of $7.00 per
share, respectively. All of such options became exercisable upon grant. Mr.
Furr also performs legal services for the Company and receives compensation for
such services. Mr. Khoury was a party to an asset purchase agreement in 1998,
whereby the Company acquired his company for cash and shares of Common Stock,
entered into an employment contract with him, and leased a facility from him.
See "Certain Relationships and Related Transactions".
Employment and Other Agreements. In January 1998, the Company entered
into an employment agreement with Karl F. Brown. The employment agreement
requires that he devote his full business time to the Company, may be
terminated by the Company for "cause" (as defined in the employment agreement)
and, as currently amended, calls for Mr. Brown to receive an annual salary of
$265,000 and a discretionary bonus determined by the Compensation Committee.
The employment agreement extends for a three-year term. Mr. Brown is also
entitled to receive lump sum compensation equal to approximately three times
his annual salary and bonus in the event of a change in control of the Company
and upon Mr. Brown's services being terminated or his status, authority or
responsibilities being substantially diminished.
In February 1999, the Company entered into an employment agreement
with Joseph E. Civiletto to serve as the Chief Operating Officer and President
of the Company. Mr. Civiletto's agreement requires that he devote his full
business time to the Company, may be terminated by the Company for "cause" (as
defined in the employment agreement) and, as currently in effect, calls for him
to receive an annual salary of $225,000 and a discretionary bonus determined by
the Compensation Committee. The employment agreement extends for a three-year
term. Mr. Civiletto is also entitled to receive lump sum compensation equal to
approximately three times his annual salary and bonus in the event of a change
in control of the Company and upon Mr. Civiletto's services being terminated or
his status, authority or responsibilities being substantially diminished.
In February 1998, the Company entered into an employment agreement
with Elaine T. Rudisill to serve as the Chief Financial Officer of the Company.
The initial one-year term of this agreement has been renewed pursuant to its
provisions for successive one-year automatic renewals unless either party
provides notice of non-renewal. Ms. Rudisill is also entitled to receive lump
sum compensation equal to approximately three times her annual salary and bonus
in the event of a change in control of the Company and upon Ms. Rudisill's
services being terminated or her status, authority or responsibilities being
substantially diminished. Ms. Rudisill is entitled to an annual salary and a
discretionary bonus and upon renewal in February 2000, Ms. Rudisill's
compensation was increased to $140,000.
The Company has also entered into confidentiality and non-compete
agreements with its officers and key employees.
The Company maintains a 401(k) profit sharing plan and a medical
reimbursement plan covering substantially all of its employees.
STOCK OPTION PLAN
The Company's 1998 Omnibus Stock Option Plan (the "Option Plan") was
adopted in 1998. Currently, the maximum number of shares of Common Stock
reserved and available for Awards under the Option Plan is 900,000. As of
December 31, 1999, a total of 644,750 non-qualified and Incentive Stock
-6-
<PAGE> 9
Options were outstanding, with exercise prices ranging from $6.00 to $10.75 per
share, leaving 255,250 shares available for grant under the Option Plan.
The Option Plan permits the grant of awards to certain persons who are
affiliated with the Company and its subsidiaries. The Option Plan provides for
the grant of incentive stock options ("Incentive Stock Options") within the
meaning of the Code, non-qualified stock options, restricted shares,
performance units, performance shares, dividend equivalent, share appreciation
rights ("SARs") and other forms of awards, including deferrals of earned
awards, (collectively, the "Awards"). Employees and non-employees to whom an
offer of employment has been extended, directors and consultants of the Company
and its subsidiaries are all eligible participants for all Awards, except that
Incentive Stock Options may be granted only to employees.
The Option Plan is administered by the Compensation Committee of the
Board of Directors, or such other committee designated by the Board of
Directors (the "Committee"). The Committee has broad administrative powers,
including the authority to construe and interpret the Option Plan, promulgate
rules to implement the Options Plan, and make all determinations necessary for
administration of the plan, including determination of the terms and conditions
of the Awards granted under the Option Plan, the individuals to whom Awards are
to be granted, the exercise price, if any, the number of shares subject to an
Award and the vesting and duration of Awards, subject to any restrictions
contained in the Option Plan.
The exercise price of Incentive Stock Options granted under the Option
Plan must be at least equal to the fair market value of the Common Stock of the
Company on the date of grant, and must be 110% of fair market value when
granted to an employee who owns shares representing more than 10% of the voting
power of all classes of stock of the Company. The exercise price of
non-qualified stock options granted under the Option Plan can not be less than
85% of the fair market value of the Common Stock on the date of grant. The term
of all options granted under the Option Plan may not exceed ten years, except
the term of Incentive Stock Options granted to a 10% or more stockholder may
not exceed five years. The Option Plan may be amended or terminated by the
Board of Directors, but no such action may impair the rights of a participant
under a previously granted option.
The Option Plan provides for the award of SARs and Performance Units
and Performance Shares. An SAR is an incentive Award that permits the holder to
receive (per share covered thereby) the amount by which the fair market value
of a share of Common Stock on the date of exercise exceeds the fair market
value of such share on the date the SAR was granted or at such date as the
Compensation Committee designates. The Compensation Committee may grant SARs
independently, in addition to, or in tandem (such that the exercise of the SAR
or related stock option will result in forfeiture of the right to exercise the
related stock option or SAR for an equivalent number of shares) with a stock
option Award. A Performance Unit or Performance Share is an incentive Award
whereby the Company commits to make a distribution depending on the attainment
of a performance objective and condition established by the Committee and the
base value of the Performance Unit or Performance Share.
Upon termination of services of a non-employee director or consultant,
all options issuable, but not yet granted, to such persons for services
rendered shall be granted and all options shall remain exercisable for the
original option term. Options granted to an employee are exercisable for
specified periods of time ranging from one month to one year following an
employee's termination depending on the circumstances of the termination,
except that options granted to an employee terminated for cause shall not be
exercisable to any extent after termination. An unexercised option is
exercisable only to the extent that it was exercisable on the date of
termination.
The Option Plan provides that, in the event the Company enters into an
agreement providing for the merger of the Company into another corporation, an
exchange of shares with another corporation, the reorganization of the Company
or the sale of substantially all of the Company's assets, unvested stock
options
-7-
<PAGE> 10
become immediately vested and exercisable. Upon the consummation of the merger,
exchange, reorganization or sale of assets, the successor corporation must
assume all Awards or substitute another Award on substantially identical terms
to the outstanding Award.
The Board of Directors may amend the Plan at any time and from time to
time, subject to the receipt of stockholder approval where required by Rule
16b-3, by the Code, by the Nasdaq National Market or other exchange regulations
or by state corporation law.
COMMON STOCK OWNERSHIP
The following table sets forth certain information regarding
beneficial ownership of Common Stock as of May 31, 2000 by (i) each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director or nominee, and (iii) all executive officers and
directors as a group. The information on the institutional investors'
statements filed with the Commission under Section 13(d) or 13(g) of the
Exchange Act. Each person has sole voting and sole investment or dispositive
power with respect to the shares shown except as noted.
-8-
<PAGE> 11
<TABLE>
<CAPTION>
SHAREHOLDINGS ON
APRIL 30 , 2000
---------------------------------
NUMBER OF PERCENT OF
NAME AND ADDRESS(1) SHARES(2) CLASS(3)
------------------------------- ---------- ------------
<S> <C> <C>
Karl F. Brown(4).............................................................. 3,135,000 43.5%
Joseph E. Civiletto(5)........................................................ 102,500 1.4
Anton K. Khoury(6)............................................................ 313,500 4.3
Herman O. Brown, Jr.(7)....................................................... 1,025,000 14.2
David M. Furr(7)(8)........................................................... 1,119,735 15.5
516 South New Hope Road
Gastonia, North Carolina 28053
Pamela K. Clement(9).......................................................... 32,787 *
1 Morrocroft Centre, Suite 380
6805 Morrison Boulevard
Charlotte, North Carolina 28211
James T. Comer, III(10)....................................................... 22,000 *
4731 Hedgemore Drive
Charlotte, North Carolina 28209
All directors and executive officers as a group
(Seven persons)(11)........................................................... 4,727,022 65.6%
</TABLE>
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* Less than 1%
(1) Except as noted above, the address for all persons listed is 587
Greenway Industrial Drive, Lakemont Business Park, Fort Mill, South
Carolina 29715.
(2) Ownership includes both outstanding Common Stock and shares issuable
upon exercise of options that are currently exercisable or will become
exercisable within 60 days after the date hereof.
(3) All percentages are calculated based on the number of outstanding
shares in addition to shares which a person or group has the right to
acquire within 60 days after the date hereof.
(4) Includes 60,000 shares subject to currently exercisable options.
(5) Includes 100,000 shares subject to currently exercisable options.
(6) Excludes 312,500 shares held by Mr. Khoury's brother as to which he
disclaims beneficial ownership.
(7) In February 1998, Herman O. Brown, Jr., David M. Furr and the Company
entered into a Voting Trust pursuant to which David M. Furr has been
vested with all voting rights relating to the Common Stock currently
owned or hereafter acquired by Herman O. Brown, Jr. See below for
further information concerning the Voting Trust.
(8) Includes 41,000 shares subject to currently exercisable options.
(9) Includes 18,500 shares subject to currently exercisable options.
(10) Includes 11,000 shares subject to currently exercisable options.
(11) Includes 221,500 shares of Common Stock subject to currently
exercisable options. Excludes shares of Common Stock as to which
executive officers and directors disclaim beneficial ownership.
The Company and Messrs. David M. Furr and Herman O. Brown, Jr. entered
into the Voting Trust in February 1998. During the term of the Voting Trust,
Mr. Furr has the exclusive right to exercise all of the voting rights and
powers with respect to the Common Stock subject to the Voting Trust. The Voting
Trust will terminate on the earlier to occur of (i) sale of all of the Common
Stock subject to the Voting Trust, (ii)
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<PAGE> 12
the death of Herman O. Brown, Jr., or (iii) expiration of the ten-year term of
the Voting Trust, subject to the automatic renewal of the Voting Trust for an
additional period of ten years in the event Herman O. Brown, Jr. continues to
own Common Stock of the Company upon expiration of the initial ten-year term of
the Voting Trust. Under the Voting Trust, Herman O. Brown, Jr. retains the
power to receive dividends and to instruct the trustee to dispose of shares of
Common Stock within the Voting Trust, subject to compliance with applicable
federal and state securities laws and a one year lock-up agreement made with
the representative of the underwriters of the Company's initial public
offering.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE DIRECTOR NOMINEES IDENTIFIED ABOVE.
II. RATIFICATION OF AUDITORS
The firm of Arthur Andersen LLP audited the financial statements of
the Company for the 1999 fiscal year and has been reappointed by the Board of
Directors to serve as the Company's independent auditors for the 2000 fiscal
year. Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions from
shareholders.
The firm of Cherry, Bekaert & Holland, L.L.P audited the financial
statements of the Company for the two fiscal years prior to 1999. During those
two years, there were no disagreements with Cherry, Bekaert & Holland, L.L.P.
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure and their reports on the Company's
financial statements for those two years contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten
percent of the Company's Common Stock are required to report their initial
ownership of the Company's Common Stock and any subsequent changes in that
ownership to the Securities and Exchange Commission and the Company. Specific
due dates for these reports have been established and the Company is required
to disclose in this proxy statement any failure to file, or late filing, of
such reports with respect to the period ended December 31, 1999. Based solely
on the Company's review of Forms 3, 4 and 5 and amendments thereto furnished to
the Company and all written representations with respect to filing of such
Forms, the Company is not aware of any filings that were not made on a timely
basis.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy that future material transactions
between the Company and its executive officers, directors and principal
shareholders (i.e. shareholders owning beneficially 5% or more of the
outstanding voting securities of the Company) must be approved by a majority of
the disinterested directors. Any such transactions will be on terms believed to
be no less favorable to the Company than could be obtained from unaffiliated
parties. For this purpose, a transaction is deemed material if such
transaction, alone or together with a series of similar transactions during the
same fiscal year, involves an amount which exceeds $60,000.
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<PAGE> 13
Herman O. Brown, Jr., a principal stockholder of the Company and the
father of Karl F. Brown, is a co-founder, officer and director of U.S.
Aviation, Inc. In 1993, the Company borrowed $525,000 from the unaffiliated
co-founder of U.S. Aviation, Inc. The repayment of amounts due under the
promissory note that evidences this borrowing was personally guaranteed by Mr.
Karl Brown and Mr. Herman Brown. Neither of them received any compensation for
providing the guarantees. All amounts due under this promissory note were
repaid in 1998 using cash generated from operations. The Company was also
indebted to U.S. Aviation, Inc. in the principal amount of $46,000 at December
31, 1997, which amount was repaid in February 1998.
U.S. Aviation, Inc. has in the past consigned aircraft components and
spare parts to the Company. Under the consignment arrangement, the Company
remits to U.S. Aviation, Inc. 60% of the sales price of the components and
spare parts, less any overhaul and repair costs incurred by the Company.
Consignment sales on behalf of U.S. Aviation, Inc. totaled $37,000 and $77,000
in 1998 and 1997, respectively. The Company anticipates that consignment sales
on behalf of U.S. Aviation, Inc. will be immaterial in future periods.
At various times from 1993 through December 31, 1997, Messrs. Karl F.
Brown and Herman O. Brown, Jr. made unsecured advances to the Company. The
proceeds of such advances were used for working capital purposes. The advances
outstanding at December 31, 1997 bore interest at rates between 6% and 8% per
annum and were to mature between April 15, 1998 and June 30, 1998. At December
31, 1997, the Company was indebted to Messrs. Karl F. Brown and Herman O.
Brown, Jr. in the amounts of $711,000 and $746,000, respectively. The Company
repaid all such advances in 1998.
The Company currently leases a 15,000 square foot facility, consisting
primarily of warehouse storage, from B & C Enterprises, a partnership in which
Herman O. Brown, Jr. is a 50% partner. The facility is leased to the Company
through December 2002 for an annual rental of $50,400. The former headquarters
facility is leased to the Company through July 30, 2002 by Brown Enterprises, a
partnership of Messrs. Karl F. Brown and Herman O. Brown, Jr., for an annual
rental of $87,000. The Company moved into its new headquarters facility in late
February 1999 and Messrs. Karl F. Brown and Herman O. Brown, Jr. are attempting
to sell, lease or sublease the facility to another entity. Until such time as
it is sold or subleased, the Company will remain obligated under the lease.
Each of the foregoing leases requires the Company to pay taxes, insurance and
maintenance expenses for the facility in question. Management believes that
these facilities were leased to it on terms at least as favorable as could have
been obtained from unaffiliated third parties.
The Company terminated its S Corporation election in May 1998 and
distributed an aggregate of approximately $3.0 million in cash and $100,000 in
securities owned by the Company to Messrs. Karl F. Brown and Herman O. Brown,
Jr., which was an amount anticipated to be sufficient to pay their personal tax
liabilities related to 1998 taxable income earned prior to the date of
termination of the Company's S Corporation election, together with an amount
equal to approximately 50% of the previously undistributed accumulated taxable
income.
Prior to the date of the initial public offering in May 1998, Messrs.
Karl F. Brown and Herman O. Brown were parties to agreements providing that, in
the event of the death of Karl F. Brown, the shares of Common Stock owned by
him would be placed in a family trust under which Herman O. Brown, Jr., as
trustee, would retain all voting rights with respect to such Common Stock.
Additionally, the agreements provided that in the event of the death of Herman
O. Brown, Jr., Karl F. Brown would retain the right to purchase the Common
Stock owned by Herman O. Brown, Jr. at a price equal to the book value of such
Common Stock at the time of Herman O. Brown, Jr.'s death. Those agreements
terminated upon the close of the initial public offering.
In February 1998, Herman O. Brown, Jr. entered into a voting trust
agreement (the "Voting Trust") pursuant to which David M. Furr, a director of
the Company, has been vested with all voting rights relating to the Common
Stock currently owned or hereafter acquired by Herman O. Brown, Jr. See
"Principal Stockholders."
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<PAGE> 14
During 1999 and 1998, the Company paid legal fees of $238,000 and
$316,000 (of which $96,500 was paid to an unaffiliated firm which served as
co-counsel) to a law firm in which David M. Furr, a director of the Company, is
a partner. A substantial portion of the 1998 expenditures were included as
transaction costs relating to the public offering and as acquisition cost
relating to company acquisitions.
During the past two years, the Company has expanded its operations by
using newly formed subsidiaries to acquire substantially all of the assets of
complementary businesses. Certain founders and owners of the businesses
acquired became employees and officers of the new subsidiary or of the Company
and one of them, Anton Khoury, was appointed to the Board of Directors of the
Company in November 1998. The material terms of those transactions are as
follows:
The Company acquired substantially all of the assets of Global Turbine
Services, Inc. and its affiliate Turbine Inspections, Incorporated ("Global")
for a purchase price $1,105,032 and assumption of certain accounts payable not
to exceed $305,013. The purchase price was comprised of $586,932 cash and
issuance of 90,104 shares of common stock valued at $518,100. Michael Evans, a
principal in both of these entities, served as President of the subsidiary
which continued the operations of Global and as Vice President of Power Plant
Operations of the Company and a director of the Company until November 12,
1999.
The Company acquired substantially all of the operating assets of
Condor Flight Spares, Inc. ("Condor") for a purchase price $1,750,000. The
purchase price was comprised of $1,000,000 cash and issuance of 125,000 shares
of common stock valued at $750,000. During 1999, the two principal shareholders
of Condor (the "Condor Shareholders"), served as President and Executive Vice
President Head of Sales, respectively, of the subsidiary of the Company which
continued the operations of Condor. Simultaneously with the asset purchase, the
Company entered into a lease with Condor Properties of Miami, Inc., an
affiliate of the Condor Shareholders, for real property and an approximately
40,000 square foot facility where Condor's business was located. Initial rental
payments were $21,650 per month. In February 2000, the Company entered into an
agreement to exchange $621,000, classified on the Company's balance sheet as
accounts receivables from affiliates, for 69,000 shares of common stock which
were issued to the Condor Shareholders. The Company intends to resell those
shares for the same amount. The agreement also calls for the Company to
register the remaining shares of the Condor Shareholders or assist with a
private placement of those shares. The Company also purchased a facility from
the Condor Shareholders for $363,000 and assumption of the $450,000 mortgage on
that facility and entered into a new lease for another facility previously
subleased from the Condor Shareholders.
The Company acquired substantially all of the assets of American Jet
Engine Services, Inc. ("Amjet") for a purchase price of $12,350,000 and
assumption of certain accounts and trade payables, but excluding certain
warranty claims, employee bonuses, and claims and liability arising from
specified investigations. The purchase price was comprised of approximately
$8,600,000 cash, issuance of 625,000 shares of common stock valued at
$3,750,000 and adjustments of approximately $100,000 credited to the Company.
The Company also acquired the inventories of Global Air Spares, Inc. and
Atlantic Airmotive Corporation, both of which were affiliates of Amjet for an
aggregate purchase price of $2,550,000 cash. Mr. Anton Khoury continues to
serve as President of the subsidiary which continued the operations of these
entities. Simultaneously with the asset purchase, the Company entered into a
lease with Anton Khoury for one of the facilities in which Amjet's business has
been operating and another lease with Hanna Khoury for the other facility in
which Amjet's business has been operating. During the initial one year term,
the rental payments are $5,218 and $5,325 per month for the approximately
12,000 square foot and 15,000 square foot facilities, respectively.
In April 1999, the Company acquired substantially all of the assets of
Complete Controls, Inc. for $0.6 million comprised of $150,000 cash, assumption
of certain liabilities and the issuance of a promissory note for the balance of
the purchase price, payable over two years, issued to the former owners. The
note is in the principal sum of $337,117, bears interest at 6% and is payable
in eight equal quarterly installments of principal plus interest on the first
day of each quarter beginning July 1, 1999 and ending April 1, 2001. The
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<PAGE> 15
former owners are employees of the subsidiary of the Company which has
continued the operations of Complete Controls, Inc.
ANNUAL REPORT
The Annual Report to Shareholders for the fiscal year ended December
31, 1999 is being sent to all shareholders with this Proxy Statement. The
Annual Report to Shareholders does not form any part of the material for the
solicitation of any Proxy.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1999 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT
EXHIBITS, IS AVAILABLE WITHOUT CHARGE TO ANY SHAREHOLDER OF THE COMPANY UPON
WRITTEN REQUEST TO THE SECRETARY, AMERICAN AIRCARRIERS SUPPORT, INCORPORATED,
587 GREENWAY INDUSTRIAL DRIVE, LAKEMONT BUSINESS PARK, FORT MILL, SOUTH
CAROLINA 29715.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for
shareholder actions at future annual meetings by following the rules of the
Securities and Exchange Commission. Proposals intended for inclusion in next
year's proxy statement and proxy card must be received by the Company not later
than February 8, 2001. Such proposals and supporting statements, if any, should
be sent to the attention of the Corporate Secretary, American Aircarriers
Support, Incorporated, 587 Greenway Industrial Drive, Lakemont Business Park,
Fort Mill, South Carolina 29715.
OTHER MATTERS
Except for the matters described herein, management does not intend to
present any matter for action at the Annual Meeting and knows of no matter to
be presented at such meeting that is a proper subject for action by the
shareholders. However, if any other matters should properly come before the
Annual Meeting, it is intended that votes will be cast pursuant to the
authority granted by the enclosed Proxy in accordance with the best judgment of
the person or person acting under the Proxy.
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<PAGE> 16
AMERICAN AIRCARRIERS SUPPORT, INCORPORATED
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 17, 2000
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of
American Aircarriers Support, Incorporated (the "Company") hereby constitutes
and appoints Karl F. Brown, as attorney and proxy, with the power to appoint
his substitute, and hereby authorizes him to represent and vote, as designated
below, all of the shares of Common Stock of the Company which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Company to be
held July 17, 2000, and at any and all adjournments thereof with respect to the
matters set forth below and described in the Notice of Annual Meeting of
Shareholders and Proxy Statement dated June 7, 2000, receipt of which is
acknowledged.
1. TO CONSIDER AND ACT UPON A PROPOSAL TO ELECT KARL F. BROWN, ANTON K.
KHOURY, DAVID M. FURR, PAMELA K. CLEMENT AND JAMES T. COMER, III AS
DIRECTORS TO HOLD OFFICE FOR ONE-YEAR TERMS OR UNTIL THEIR SUCCESSORS ARE
ELECTED AND QUALIFIED.
[ ] FOR ELECTION OF ALL NOMINEES (Except as shown below)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
Instructions: To withhold authority to vote for any individual nominee,
strike through the nominee's name below
KARL F. BROWN
ANTON K. KHOURY
DAVID M. FURR
PAMELA K. CLEMENT
JAMES T. COMER, III
2. TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS AUDITORS OF THE
COMPANY.
[ ] FOR RATIFICATION
[ ] AGAINST RATIFICATION
[ ] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY AND ALL
ADJOURNMENTS THEREOF.
[ ] AUTHORIZED TO VOTE
[ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED AND FOR PROPOSAL 2 AND THE PROXY HOLDERS WILL
VOTE ON ANY PROPOSAL UNDER 3 IN THEIR DISCRETION AND IN THEIR BEST JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock
certificate. 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
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person. If this Proxy is not dated, the Proxy
will be deemed to bear the date the form was mailed to the shareholder.
Dated:
----------------- -----------------------------------
Signature
Dated:
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Signature if held jointly
