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:
[ ] Preliminary proxy statement
[ X ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
LYNTON GROUP, INC.
(Name of Registrant as Specified in Its Charter)
LYNTON GROUP, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
[ ] 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 number, or the form or schedule and the date of its
filing.
(1) Amount previously paid: N/A
(2) Form, schedule or registration statement no.: N/A
(3) Filing party: N/A
(4) Date filed: N/A
LYNTON GROUP, INC.
9 AIRPORT ROAD
MORRISTOWN MUNICIPAL AIRPORT
MORRISTOWN, NEW JERSEY 07960
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 6, 1996
To the Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of Lynton Group,
Inc. (the "Company") will be held on March 6, 1996, at 2:00 p.m., local time,
at the principal executive offices of the Company, 9 Airport Road, Morristown
Municipal Airport, Morristown, New Jersey 07960, for the following purposes:
1. To elect five Directors to serve as the Board of Directors of the
Company until the next Annual Meeting of Stockholders and until their
successors shall be elected and shall qualify;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending September 30, 1996; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The close of business on January 26, 1996 has been fixed as the record
date for determining stockholders entitled to receive notice of and to vote at
the Annual Meeting and at any adjournment thereof.
Your attention is called to the proxy statement on the following pages.
We hope that you will attend the Annual Meeting. If you do not plan to attend,
please sign, date and mail the enclosed proxy card in the enclosed envelope,
which requires no postage if mailed in the United States.
By Order of the Board of Directors,
MANUS O'DONNELL,
Secretary
Morristown, New Jersey
February 2, 1996
<PAGE>
LYNTON GROUP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 6, 1996
_____________________________
This Proxy Statement is being furnished to stockholders of Lynton Group,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board of
Directors") for use at the Annual Meeting of Stockholders of the Company to be
held on March 6, 1996, at 2:00 p.m., local time, at the principal executive
offices of the Company, 9 Airport Road, Morristown Municipal Airport,
Morristown, New Jersey 07960, and at any adjournment thereof (the "Annual
Meeting").
The Board has fixed the close of business on January 26, 1996 as the
record date for the determination of stockholders entitled to receive notice
of, and vote at, the Annual Meeting (the "Record Date"). Accordingly, only
stockholders of record on the books of the Company at the close of business on
the Record Date will be entitled to vote at the Annual Meeting. On the Record
Date, the Company had outstanding 1,962,177 shares of Common Stock, par value
$.30 per share (the "Common Stock") and 1,000 shares of Series C Convertible
Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"),
which are the only outstanding voting securities of the Company. On all
matters, each share of Common Stock is entitled to one vote and each share of
Series C Preferred Stock is entitled to such number of votes as if such shares
of Series C Preferred Stock had been converted into Common Stock which shares
shall be voted with the holders of Common Stock, together as one class.
Accordingly, the holders of the Common Stock and Series C Preferred Stock are
entitled to 2,639,956 votes in the aggregate with the holders of the Common
Stock entitled to 1,962,177 votes and the holders of the Series C Preferred
Stock entitled to 677,779 votes.
The cost of soliciting proxies will be borne by the Company. In addition
to solicitation by mail, officers, directors and other employees of the Company
may solicit proxies by personal contact, telephone, facsimile or other
electronic means without additional compensation. This Proxy Statement and the
accompanying proxy card are first being mailed to stockholders on or about
February 2, 1996.
Proxies in the accompanying form which are properly executed, duly
returned and not revoked, will be voted in accordance with the instructions
thereon. If no instructions are indicated thereon, proxies will be voted FOR
all matters listed in the Notice of Annual Meeting of Stockholders and in
accordance with the discretion of the person(s) voting the proxies with respect
to all other matters properly presented at the Annual Meeting. Execution of a
proxy will not prevent a stockholder from attending the Annual Meeting and
voting in person. Any stockholder giving a proxy may revoke it at any time
before it is voted by delivering to the Secretary of the Company written notice
of revocation bearing a later date than the proxy, by delivering a later-dated
proxy, or by voting in person at the Annual Meeting. Attendance at the Annual
Meeting will not, in and of itself, constitute revocation of a proxy. The
holders of a majority of the shares of Common Stock and Series C Preferred
Stock, together as a class, outstanding and entitled to vote as of the Record
Date, present in person or represented by proxy, shall constitute a quorum for
the transaction of business at the Annual Meeting. A plurality of the votes
cast at the Annual Meeting will be required for the election of directors. The
ratification of the selection of Ernst & Young LLP as independent auditors
requires the affirmative vote of a majority of the votes cast at such meeting.
If a stockholder, present in person or represented by proxy, abstains on any
matter, the stockholder's shares will not be voted on such matter. Thus, an
abstention from voting on a matter has the same legal effect as a vote
"against" the matter, even though the stockholder may interpret such action
differently.
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of January 26, 1996, (i) the number of
shares of Common Stock and Series C Preferred Stock owned of record or
beneficially, or both, by each person who owned of record, or is known by the
Company to have beneficially owned, individually, or with his associates, more
than 5% of such class of voting securities then outstanding; (ii) the number of
shares owned beneficially by each Director of the Company, each person
nominated to be a Director and each named executive officer of the Company; and
(iii) the number of shares owned beneficially by all Directors and executive
officers as a group. Except as otherwise indicated below, each of the persons
listed below has sole voting and investment power with respect to his or her
shares.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Title Beneficial Percent
of Beneficial Owner of Class Ownership of Class
<S> <C> <C> <C>
Christopher Tennant Common Stock 231,132(1) 11.8%
9 Airport Road
Morristown, NJ
James G. Niven Common Stock 160,280(2) 7.6%
230 Park Avenue South Series C 200 20.0%
New York, NY Preferred Stock
Richard Hambro Common Stock 141,669(3) 7.0%
10 Park Place Series C 100(4) 10.0%
London, England Preferred Stock
Nicholas R.H. Toms Common Stock 23,236(5) 1.2%
600 Madison Avenue
New York, NY
Mark A. Alexander Common Stock 8,335(6) *
99 Wood Avenue South
Iselin, NJ
George H. Hempstead, Common Stock -0-(7) -0-
III
99 Wood Avenue South
Iselin, NJ
Ian J. Borrowdale Common Stock 63,214(8) 3.2%
9 Airport Road
Morristown, NJ
Manus O'Donnell Common Stock -0-(9) -0-
9 Airport Road
Morristown, NJ
Louis Marx, Jr. Common Stock 135,556(10) 6.5%
667 Madison Avenue Series C 200(11) 20.0%
New York, NY Preferred Stock
Thomas E. Sopwith Common Stock 139,467 7.1%
Denham Airfield
Uxbridge
Middlesex, England
HM Holdings, Inc. Common Stock 1,095,968(12) 49.6%
c/o Hanson Industries
99 Wood Avenue South
Iselin, NJ
Task Holdings, Inc. Common Stock 338,889(13) 14.7%
30 Rockefeller Plaza Series C 500 50.0%
New York, NY Preferred Stock
Brae Group, Inc. Common Stock 135,556(10) 6.5%
333 Clay Street Series C 200 20.0%
Houston, TX Preferred Stock
J.O. Hambro Series C 100 10.0%
Nominees Ltd. Preferred Stock
10 Park Place
London, England
All Executive Common Stock 624,532(14) 28.3%
Officers and Series C 300 30.0%
Directors Preferred Stock
as a Group
(consisting of 8
persons)
</TABLE>
* Less than 1%
(1) Includes 220,000 shares held by Christopher Tennant and 11,132 shares held
by Lynton International Limited, a company organized under the laws of
England ("Lynton International"). Mr. Tennant is the sole shareholder of
Lynton International and, by virtue of such ownership, Mr. Tennant may be
deemed the beneficial owner of the shares held by Lynton International.
(2) Includes 12,500 shares held by Mr. Niven and 135,556 shares which Mr.
Niven has the right to acquire pursuant to the conversion of shares of
Series C Preferred Stock held by him. Also, includes 5,000 shares owned
by a foundation for which Mr. Niven serves as a trustee and a director and
7,224 shares which Mr. Niven has the right to acquire within 60 days
pursuant to the exercise of stock options. The number does not include an
additional 1,667 shares issuable pursuant to options which are not
exercisable within 60 days.
(3) Includes 66,667 shares held by BMB-H Investment Company Limited, a Jersey
corporation ("BMB-H") which is 25% owned and controlled by J.O. Hambro &
Company Limited, a corporation organized under the laws of England ("J.O.
Hambro"). Richard Hambro is an Executive Director of J.O. Hambro and, by
virtue of such status, may be deemed to be a controlling person of BMB-H
and beneficial owner of the shares held by BMB-H. Also, includes 67,778
shares J.O. Hambro Nominees Limited ("Hambro Nominees") has the right to
acquire pursuant to the conversion of shares of Series C Preferred Stock
held by Hambro Nominees, and 7,224 shares which Mr. Hambro has the right
to acquire within 60 days pursuant to the exercise of stock options. The
number does not include an additional 1,667 shares issuable pursuant to
options which are not exercisable within 60 days.
(4) Consists of 100 shares held by J.O. Hambro Nominees Limited (see (3)
above).
(5) Includes 16,012 shares held by Nicholas R.H. Toms, and 7,224 shares which
Mr. Toms has the right to acquire within 60 days pursuant to the exercise
of stock options, but does not include an additional 1,667 shares issuable
pursuant to options which are not exercisable within 60 days.
(6) Includes 3,334 shares which Mr. Alexander, a director of the Company, has
the right to acquire from Christopher Tennant pursuant to an agreement
between them and 5,001 shares which Mr. Alexander has the right to acquire
within 60 days pursuant to the exercise of stock options. Mr. Alexander
is Senior Vice President - Corporate Development of Hanson Industries,
the U.S. arm of Hanson PLC, a public limited company organized under the
laws of England. Mr. Alexander disclaims beneficial ownership of shares
owned by HM Holdings, Inc. ("HM Holdings"), an indirect wholly-owned
subsidiary of Hanson PLC. Mr. Alexander is not standing for re-election
to the Board of Directors.
(7) Mr. Hempstead, Senior Vice President - Law and Administration of Hanson
Industries, disclaims beneficial ownership of shares owned by HM Holdings.
(8) Includes 46,547 shares held by Mr. Borrowdale, and 16,667 shares which Mr.
Borrowdale has the right to acquire within 60 days pursuant to the
exercise of stock options.
(9) Does not include 20,000 shares issuable pursuant to options which are not
exercisable within 60 days.
(10) Consists of 135,556 shares which Brae Group, Inc. ("Brae") has the right
to acquire pursuant to the conversion of shares of Series C Preferred
Stock held by Brae. Louis Marx, Jr. owns the majority of the voting
securities of Brae and may therefore be deemed to beneficially own the
shares held by Brae.
(11) Consists of 200 shares held by Brae Group, Inc. (see (10) above).
(12) Includes 848,455 shares held by HM Holdings and 247,513 shares which HM
Holdings has the right to acquire within 60 days pursuant to the exercise
of warrants. (See "Election of Directors - Transactions with Management
and Others").
(13) Consists of 338,889 shares which Task Holdings, Inc. ("Task") has the
right to acquire pursuant to the conversion of shares of Series C
Preferred Stock held by Task.
(14) Includes 43,340 shares which present officers and directors have the right
to acquire within 60 days pursuant to the exercise of stock options and
203,334 shares which may be acquired pursuant to the conversion of shares
of Series C Preferred Stock.
THE STOCKHOLDERS' AGREEMENT
In August 1990, HM Holdings, the Company and Christopher Tennant executed
a Stockholders' Agreement that provides for certain rights of first refusal,
rights of inclusion and rights to compel sale in connection with certain sales
of securities of the Company by HM Holdings and Mr. Tennant. The Stockholders'
Agreement further provides that upon exercise of the warrant purchased from the
Company by HM Holdings in August 1990 and as long as HM Holdings beneficially
owns at least 25% of the outstanding shares of Common Stock of the Company, the
Board of Directors of the Company shall consist of nine directors and HM
Holdings shall have the right to nominate four directors. In connection
therewith, Mr. Tennant has agreed in the Stockholders' Agreement to vote his
shares for the nominees of HM Holdings, as directors. In addition, HM Holdings
has agreed to vote its shares for Mr. Tennant, as a director, so long as Mr.
Tennant owns not less than 5% of the outstanding shares of Common Stock of the
Company.
In December 1992, HM Holdings, the Company and Mr. Tennant agreed to and
entered into a First Amendment to the Stockholders' Agreement with the
purchasers of the Series C Preferred Stock which granted such purchasers
certain rights relating to such rights of inclusion as provided in the
Stockholders' Agreement for certain sales of the Company's securities by HM
Holdings and Mr. Tennant.
ELECTION OF DIRECTORS
A Board of Directors consisting of five members is to be elected by the
stockholders, to hold office until the next Annual Meeting of Stockholders and
until their successors are duly elected and qualify.
Unless authority is withheld, it is intended that proxies will be voted
for the election of the five nominees below, each of whom is currently serving
as a director. The Board of Directors does not contemplate that any of these
nominees will be unable or will decline to serve. However, if any of them is
unable or declines to serve, the persons named in the accompanying proxy may
vote for another person or persons in their discretion.
INFORMATION CONCERNING NOMINEES
The following table sets forth certain information with respect to the
five nominees for election to the Board of Directors.
<TABLE>
<CAPTION>
Present Position Has Served as
Name Age and Offices Director Since
<S> <C> <C> <C>
Christopher Tennant 45 President, Chief 1985
Executive Officer
and Director
James G. Niven 50 Co-Chairman of the Board, 1989
Assistant Treasurer and
Director
Richard Hambro 50 Co-Chairman of the 1989
Board and Director
Nicholas R.H. Toms 47 Assistant Secretary 1985
and Director
George H. Hempstead, 52 Director 1995
III
</TABLE>
CHRISTOPHER TENNANT has been a Director of the Company since November 1985
and became President and Chief Executive Officer in May 1989 upon the Company's
acquisition of Lynton Group Limited. From 1985 to 1988, Mr. Tennant also was
the Company's Treasurer and Chief Financial Officer. For more than the last
five years, Mr. Tennant has served as Managing Director of Lynton Group
Limited, the Company's wholly-owned subsidiary.
JAMES G. NIVEN has been a Director of the Company since May 1989 and Co-
Chairman of the Board since February 1994. Since 1982, he has been a general
partner of Pioneer Associates Company, a venture capital investment company.
He is currently a managing director of Burson-Marsteller Inc. Mr. Niven is a
director of Noel Group, Inc., The Prospect Group, Inc., Global Natural
Resources, Inc., Lincoln Snacks Company, Staffing Resources, Inc., Tatham
Offshore, Inc., HealthPlan Services, Forschner Enterprises, Inc., CBT
Bancshares, Inc., and an Advisory Director of Houston National Bank. He is
also a member of the Board of Managers of Memorial Sloan-Kettering Cancer
Center, and a trustee of the Museum of Modern Art and the National Center for
Learning Disabilities, Inc.
RICHARD HAMBRO has been a Director of the Company since May 1989, was
Chairman of the Board from May 1989 to February 1994 and has been Co-Chairman
since February 1994. Since 1988, Mr. Hambro has been an Executive Director of
J.O. Hambro & Company Limited, a London based investment banking firm. From
1984 to 1988, he was a Director of Hambros Bank in London. Mr. Hambro has also
served as a non-executive Director of Lynton Group Limited since 1982. He also
presently serves as a director of various other closely held companies.
NICHOLAS R. H. TOMS has been a Director of the Company since November 1985
and became Assistant Secretary in May 1989. From November 1985 to May 1989, he
also served as the Company's Chairman of the Board. Since 1989, Mr. Toms has
also been a Director, Chairman and Chief Executive Officer, and since 1992,
President, of The Peak Technologies Group, Inc., an integrator of bar code data
collection and wireless data transmission equipment and related computer
peripherals. Mr. Toms also presently serves as a director of various other
closely held companies.
GEORGE H. HEMPSTEAD, III has been a Director of the Company since May
1995. Since June 1995, he has served as Senior Vice President - Law and
Administration of Hanson Industries. Prior thereto, he was Senior Vice
President and General Counsel of Hanson Industries from December 1993 to June
1995 and as Vice President and General Counsel from 1982 to December 1993. He
has served as a director of Hanson Industries since 1986 and as an Associate
Director of Hanson PLC since 1990. Mr. Hempstead is also a director of Smith
Corona Corp.
THE COMPANY'S EXECUTIVE OFFICERS
There are no executive officers of the Company other than those named
above, except Ian J. Borrowdale, age 57, Vice President of International
Operations and Chief Operating Officer of the Company, and Manus O'Donnell, age
52, Vice President of Finance, Chief Financial Officer, Secretary and Treasurer
of the Company.
IAN J. BORROWDALE has been Vice President of International Operations of
the Company since January 1991 and Chief Operating Officer since May 1995.
Mr. Borrowdale is a director of European Helicopters Limited and was, from 1987
to 1988, its technical director and, from 1988 to 1990, its Managing Director.
Prior thereto and from 1981 to 1987, Mr. Borrowdale was employed as the
technical director of McAlpines Helicopters Limited, a United Kingdom
helicopter maintenance organization.
MANUS O'DONNELL has been Vice President of Finance, Chief Financial
Officer, Secretary and Treasurer of the Company since May 1995. Prior to
joining the Company, and since 1993, Mr. O'Donnell was an independent
consultant for a variety of companies. In addition, from 1991 to 1993, he was
Chief Financial Officer of Clinical Homecare Ltd., a company providing various
nursing services, and from 1987 to 1990, he was Chief Financial Officer of
Biomatrix, Inc., a biotechnology company.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth information concerning
the annual and long-term compensation for services in all capacities to the
Company for the fiscal years ended September 30, 1995, 1994 and 1993, of those
persons who were, at September 30, 1995 (i) the chief executive officer and
(ii) the other most highly compensated executive officers of the Company, whose
annual base salary and bonus compensation was in excess of $100,000 (the named
executive officers):
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
<CAPTION>
Awards
Name and Principal Fiscal Options
Position Year Salary Bonus (shares)
<S> <C> <C> <C> <C>
Christopher Tennant 1995 $144,000(1) $0 0
President and Chief 1994 $150,976(1) $0 0
Executive Officer 1993 $124,000(1) $0 0
Ian J. Borrowdale 1995 $127,227 $0 0
Vice President 1994 $135,000 $0 0
of International 1993 $110,000 $0 16,667
Operations and
Chief Operating
Officer
Robert F. Hagan(2) 1995 $124,498 $0 0
1994 $119,000 $0 0
1993 $ 99,800 $10,000 16,667
Manus O'Donnell(3) 1995 $ 65,986 $0 20,000
Vice President of
Finance, Chief
Financial Officer,
Secretary and Treasurer
(1) In addition, Lynton International Limited, a company wholly-owned by Mr.
Tennant, was paid $48,000, $64,000 and $63,000 during fiscal 1995, 1994
and 1993, respectively, for office space in London rented to the Company.
(See " - Transactions with Management and Others").
(2) Mr. Hagan, who is no longer affiliated with the Company, served as
Secretary, Treasurer and Chief Financial Officer until May 1995 and in
other capacities through September 1995.
(3) Mr. O'Donnell has been employed by the Company since March 1995 and has
been Vice President of Finance, Chief Financial Officer, Secretary and
Treasurer since May 1995.
STOCK OPTIONS GRANTED IN FISCAL 1995
The following table sets forth information concerning individual grants of
stock options made during fiscal 1995 to each of the named executive officers
of the Company. No other stock appreciation rights were granted to any of the
named executive officers during fiscal 1995. In the table below, the amounts
shown as "potential realizable value" are based upon the average of the closing
bid and asked prices of the Company's Common Stock on the date of grant and on
arbitrarily assumed annualized rates of Common Stock price appreciations of
five percent and ten percent over the full term of the options, as required by
Securities and Exchange Commission regulations. Actual gains, if any, are
dependent upon the actual performance of the Common Stock as well as the
continued employment of Mr. O'Donnell.
</TABLE>
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed
% of Total Annual Rates
Options of Stock Price
Granted to Exercise or Appreciation
Options Employees in Base Price Expiration For Option Term
Name Granted Fiscal 1995 (per share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Manus O'Donnell 20,000 100% $1.125 3/24/2005 $15,900 $28,700
</TABLE>
STOCK OPTIONS EXERCISED IN FISCAL 1995;
FISCAL YEAR-END VALUES
During the fiscal year ended September 30, 1995, none of the named
executive officers exercised any previously granted stock options.
The following table indicates the total number of exercisable and
unexercisable stock options held by each named executive officer on September
30, 1995, the last day of fiscal 1995. On September 30, 1995, the closing bid
price of the Company's Common Stock on the Nasdaq Small-Cap Market was 1/8 per
share and, therefore, none of the outstanding options to purchase Common Stock
was "in the money" on such date.
<TABLE>
<CAPTION>
Name Exercisable Unexercisable
<S> <C> <C>
Christopher Tennant -0- -0-
Ian J. Borrowdale 24,167 -0-
Robert F. Hagan 16,667 -0-
Manus O'Donnell -0- 20,000
</TABLE>
COMPENSATION OF DIRECTORS
Since inception, no director has received any cash compensation for his
services as such. Commencing with fiscal 1994, however, directors who are non-
employees of the Company have been entitled to an annual fee of $5,000 for
service on the Board, and $500 for each meeting, as well as committees of the
Board on which they serve, attended by said member. No non-employee director
has to date accepted such fees.
Since May 1993, Anglo Investors Corp., a company owned by James G. Niven
(Co-Chairman and a director of the Company), has been retained to provide
consulting services to the Company. Such company was paid the sum of $27,000
for such services during fiscal 1995.
See " - Stock Option Plan" for information on Formula Options granted to
each member of the Board who is not an employee of the Company.
In the past, directors have been and will continue to be reimbursed for
reasonable expenses incurred on behalf of the Company.
EMPLOYMENT CONTRACTS
Christopher Tennant, President and Chief Executive Officer of the Company,
is employed pursuant to an employment agreement expiring September 30, 1996 at
an annual base salary of $180,000 plus annual cost-of-living adjustments. In
addition, the agreement provides for the payment of bonus compensation based
upon certain financial performance levels being achieved.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions regarding compensation of the Company's executive officers are
generally made by the Compensation Committee (the "Committee") formed in
February 1994. Prior to the formation of the Committee, decisions regarding
executive compensation were made by the entire Board of Directors. The current
members of the Committee are James G. Niven, Richard Hambro and Mark A.
Alexander.
The executive officers compensation program generally consists of base
salary, incentive compensation, other miscellaneous compensation and stock
option awards. The Committee considers the entire compensation package when
setting any one component of compensation.
The executive compensation philosophy maintained by the Company is to
provide competitive levels of compensation, integrate management's pay with the
achievement of the Company's annual and long-term performance goals, reward
above average corporate performance, recognize individual initiative and
achievement, and assist the Company in attracting and retaining qualified
management. Assessments of both individual and corporate performance influence
management's compensation levels. The Committee believes that it is important
to encourage a performance-based environment that motivates individual
performance by recognizing the past year's results and by providing incentives
for further improvement in the future. This includes the ability to implement
the Company's business plans as well as to react to unanticipated external
factors that can have a significant impact on corporate performance.
Management compensation is intended to be set at levels that the Committee
believes is consistent with others in the Company's industry.
The Committee also believes that equity ownership by management is
beneficial in aligning managements' and stockholders' interests in the
advancement of stockholder value. Base salaries for management are determined
initially by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace
for management talent, including a comparison of base salaries and bonuses for
comparable positions at comparable companies within the aviation industry.
Based on its evaluation of these factors, the Committee believes that in
order to attract and retain qualified senior management such persons should be
employed pursuant to arrangements which generally will provide for annual cost-
of-living adjustments, bonus compensation under certain conditions and the
grant of stock options. Due to the Company's performance during fiscal 1995,
the Committee determined not to award any stock options to any of the executive
officers during fiscal 1995 with the exception of Manus O'Donnell who was
awarded stock options upon becoming employed by the Company.
Christopher Tennant became Chief Executive Officer of the Company in 1989.
His compensation for the fiscal year ended September 30, 1995 reflects the size
and complexity of the Company, as well as his experience, individual
contributions and corporate performance. In addition, in determining Mr.
Tennant's compensation, the Committee takes into account salaries being paid to
other chief executive officers of similar companies. Due to the Company's
recent performance, Mr. Tennant's salary was not increased in fiscal 1995.
Compensation Deduction Limitation. As part of the 1993 Omnibus Budget
Reconciliation Act, Congress enacted Section 162(m) of the Internal Revenue
Code, effective in 1994, which limited to $1 million per year the federal
income tax deduction available to public companies for compensation paid to its
chief executive officer and its four other highest paid executive officers,
unless the compensation qualifies for certain "performance-based" exceptions
provided for in that section of the Code. Under present employment
arrangements, it is not anticipated that any officer will receive compensation
subject to this limitation during the fiscal year ending September 30, 1996.
In the future, if necessary, the Committee will consider ways to maximize the
deductibility of executive compensation, while retaining the discretion the
Committee deems necessary to compensate execute officers in a manner
commensurate with performance and the competitive environment for executive
talent.
Compensation Committee
James G. Niven
Richard Hambro
Mark A. Alexander
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In February 1994, the Board of Directors formed a Compensation Committee,
the current members of which are James G. Niven, Richard Hambro and Mark A.
Alexander. Each of such persons served thereon throughout the fiscal year
ended September 30, 1995. In February 1994, each of Mr. Niven and Mr. Hambro
became Co-Chairman of the Board of Directors. Mr. Niven and Mr. Hambro
received no compensation during fiscal 1995 for service in such capacities.
However, since May 1993, Anglo Investors Corp., a company owned by Mr. Niven,
has been retained to provide consulting services to the Company. During the
fiscal year ended September 30, 1995, Anglo Investors Corp. was paid $27,000
for such services. Prior to February 1994, Mr. Hambro served as Chairman of
the Board from May 1989 to February 1994. Mr. Alexander is a non-officer
director and is not an employee or former or current officer of the Company or
any of its subsidiaries. He is not standing for re-election to the Board of
Directors.
See " - Transactions with Management and Others" for information on the
dividends paid during fiscal 1995 to the holders of the Company's Series C
Convertible Preferred Stock, in which each of Mr. Niven and Mr. Hambro has an
interest.
During the fiscal year ended September 30, 1995, no executive officer of
the Company served as a director or a member of the Compensation Committee (or
other board committee performing equivalent functions) of another entity one of
whose executive officers served on the Compensation Committee or the Board of
Directors of the Company.
COMPARATIVE PERFORMANCE BY THE COMPANY
The following graph shows a five-year comparison of cumulative total
returns for the Company, the NASDAQ Market Index and a MG Group Index.*
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG LYNTON GROUP, INC.,
NASDAQ MARKET INDEX AND MG GROUP INDEX
DESCRIPTION OF GRAPH: The graph is a line graph plotting the yearly change in
cumulative total returns over a five-year period from October 1, 1990 to
September 30, 1995. The graph compares the value of $100 invested on October
1, 1990 in the Company's Common Stock, the NASDAQ Market Index and a MG Group
Index. The Y axis on the graph represents $25 increments, within the range
of $0 to $250 and the X axis represents the five-year period from October 1,
1990 to September 30, 1995. The chart below reflects the data points used for
the graph.
<TABLE>
<CAPTION>
Value at Lynton Group MG Group NASDAQ Market
September 30, Common Stock Index Index
<S> <C> <C> <C>
1990 $100.00 $100.00 $100.00
1991 56.09 120.65 134.19
1992 56.09 104.19 131.96
1993 40.06 122.45 171.62
1994 9.35 141.17 181.61
1995 4.01 209.56 220.50
</TABLE>
* Source: Media General Financial Services, Inc.
STOCK OPTION PLAN
In August 1993, the Board of Directors of the Company adopted the 1993
Stock Option Plan (the "1993 Plan") for employees, officers, consultants or
directors of the Company or its subsidiaries to purchase up to 250,000 shares
of Common Stock of the Company. Stockholder approval was obtained in June
1994. Options granted under the 1993 Plan may either be "incentive stock
options" as defined in Section 422 of the Internal Revenue Code, or non-
statutory stock options. Under the terms of the 1993 Plan, participants may
receive options to purchase Common Stock in such amounts and for such prices as
may be established by the Board of Directors or the committee appointed by the
Board, provided, however, that any incentive stock options granted under the
1993 Plan shall be granted at no less than 100% of the fair market value of the
Common Stock of the Company at the time of grant.
The 1993 Plan also provides that on November 1st of each year each member
of the Board who is not an employee of the Company will be awarded an option
(the "Formula Option") to purchase 1,667 shares of Common Stock of the Company.
Formula Options will have an option price equal to 75% of the fair market value
of the Common Stock of the Company as of the date of such grant.
As of September 30, 1995, options to acquire 60,002 shares of Common Stock
have been granted under the 1993 Plan and 189,998 options were available for
future grant.
SAVINGS PLANS
The Company has a voluntary savings plan covering substantially all of its
employees in the United States. The plan qualifies under Section 401(k) of the
Internal Revenue Code. Pursuant to the plan, eligible employees may elect to
contribute up to 15% of their salaries to an investment trust. Effective
October 1, 1990, the Company contributes an amount equal to 100% of the first
4% of employee contributions. In addition, the Company has a voluntary savings
plan covering eligible employees of its subsidiaries in the United Kingdom
pursuant to which eligible employees may elect to contribute up to 17 1/2% of
their salaries to an investment trust. The Company contributes an amount equal
to 100% of the first 4% of employee contributions. During the fiscal year
ended September 30, 1995, contributions made under such savings plans by
the Company were (i) $6,356, $4,760 and $5,000 for Messrs. Tennant, Hagan and
Borrowdale, respectively; and (ii) $16,116 for all executive officers as a
group.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than 10% stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, during the fiscal year ended September 30,
1995, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with. In making
these disclosures, the Company has relied solely on a review of the copies of
such reports furnished to the Company and written representations of its
directors, executive officers and its greater than 10% stockholders.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Pursuant to a Credit Agreement, as amended, entered into in August 1990
(the "Credit Agreement"), HM Holdings, Inc., an indirect wholly-owned
subsidiary of Hanson PLC ("HM Holdings"), had provided secured debt financing
in the aggregate amount of $17,000,000 to the Company and Lynton Jet Centre,
Inc., a wholly-owned subsidiary of the Company ("Lynton Jet"). Specifically,
in August 1990, HM Holdings made a $2,000,000 term loan to the Company (the
"Company Term Loan"), a $10,800,000 term loan to Lynton Jet (the "Lynton Jet
Term Loan") and provided a $4,200,000 revolving credit facility to Lynton Jet
(the "Revolving Credit Loans" and, together with the Company Term and the
Lynton Jet Term Loan, collectively the "Loans"). In August 1994, the Revolving
Credit Loan was reduced from $4,200,000 to $3,200,000 unless HM Holdings
otherwise agrees in writing.
In June 1994, the Company Term Loan was repaid in full and the then
remaining principal payments on the Lynton Jet Term Loan were made through the
final payment due on September 30, 1997 (which will be in the principal amount
of $2,905,923). The Revolving Credit Loans of $3,200,000 shall also be due on
September 30, 1997. In October 1994, HM Holdings agreed to an additional
$500,000 Revolving Credit Loan.
Under the terms of an Agreement of Lease entered into in August 1990, as
amended in July 1994 (the "Lease"), Lynton Jet leases to HM Industries, an
affiliate of HM Holdings, office and hangar space at the Company's Jet Centre
facility in Morristown, New Jersey for the purpose of repair and operation of
certain aircraft of HM Industries and its affiliates. The term of the Lease is
ten years, provided that HM Industries has the right to terminate the Lease
upon termination of the Management Agreement (described below). Prior to July
1, 1994, the annual rent under the Lease was $325,000. Commencing July 1,
1994, the annual rent has been reduced to $250,000.
Lynton Jet and HM Industries also entered into a Management Agreement in
August 1990, as amended (the "Management Agreement"), which provided for the
hiring by Lynton Jet of the then existing HM Industries aviation management
personnel and additional personnel as shall be necessary from time to time to
maintain adequate level of staffing for the services to be provided by Lynton
Jet to HM Industries pursuant to the agreement. Until June 30, 1995, Lynton
Jet was obligated to provide complete aviation management services, including
flight scheduling, aircraft utilization management, provision of pilots, repair
and maintenance, fueling, catering and bookkeeping and accounting. Since June
30, 1995, however, the Company is obligated to provide only fueling, catering
and bookkeeping and accounting services under the Management Agreement. In
connection therewith, HM Industries reimburses the Company for actual costs of
performing these services, less $125,000 per annum through June 30, 1994.
Commencing July 1, 1994, there is no deduction in the reimbursement amount. The
term of the Management Agreement is ten years, subject to HM Industries' right
to terminate upon 60 days' notice. During the fiscal year ended September 30,
1995, HM Industries reimbursed the sum of $6,417,000 to the Company under the
terms of the Management Agreement. At September 30, 1995, reimbursements
receivable from HM Industries was $141,000.
The Company has 1,000 shares of Series C Convertible Preferred Stock and
2,000 shares of Series D Preferred Stock outstanding as a result of a financing
transaction effected in December 1992. James G. Niven owns 200 shares and J.O.
Hambro Nominees Ltd. owns 100 shares of the Series C Convertible Preferred
Stock, and HM Holdings owns all 2,000 shares of the Series D Preferred Stock.
(See "Principal Stockholders and Security Ownership of Management"). The
Series C Convertible Preferred Stock (i) pays a semi-annual dividend payable
out of the assets of the Company legally available therefor at the rate of $30
per share, (ii) is convertible at any time at the option of each of the
purchasers of the Series C Convertible Preferred Stock into an aggregate of
677,779 shares of Common Stock, (iii) has voting rights as if such shares had
been converted into Common Stock, (iv) is convertible at the Company's option
after ten years, and (v) has no mandatory or optional redemption rights. The
Company had dividends of $60,000 related to the Series C Convertible Preferred
Stock during fiscal 1995. The Series D Preferred Stock (i) pays a quarterly
cumulative dividend out of the assets of the Company legally available therefor
at a rate equal to the average interest rate per annum borne by the Loans
outstanding under the Credit Agreement with HM Holdings, (ii) is non-
convertible, (iii) has no voting rights, and (iv) has no mandatory or optional
redemption rights. The Company had dividends of approximately $154,000 related
to the Series D Preferred Stock during fiscal 1995.
See " - Employment Contracts" for information on the employment agreement
entered into with Christopher Tennant.
Pursuant to an oral agreement, the Company rents office space in London
from Lynton International Limited ("Lynton International"), a company organized
under the laws of England which is wholly-owned by Christopher Tennant, the
Company's President, Chief Executive Officer and a Director. For the year
ended September 30, 1995, rental expense for this space was $48,000.
At September 30, 1994, the Company had a note payable of $67,000 due to a
company owned by Thomas E. Sopwith, a stockholder of the Company. (See
"Principal Stockholders and Security Ownership of Management"). This note
bears interest at Sterling LIBOR plus 2% and is payable on demand. This note
was paid by the Company in fiscal 1995.
INDEBTEDNESS OF MANAGEMENT
At September 30, 1989, Lynton International was indebted to the Company in
the amount of $123,521. Such indebtedness was incurred as a result of certain
business expenses being paid by the Company prior to September 30, 1989 on
behalf of Lynton International. During fiscal 1990, such amount was increased
due to costs incurred by the Company on behalf of Lynton International for
automobile rental and other charges and reduced partially by rent charges for
the Company's office space in London. (See " - Transactions with Management
and Others"). At September 30, 1995, Lynton International was indebted to the
Company in the amount of $191,308 which was approximately the highest amount
outstanding during the fiscal year ended September 30, 1995. Such indebtedness
does not have a due date and is non-interest bearing. Christopher Tennant, the
Company's President, Chief Executive Officer and a Director, is the sole
stockholder of Lynton International. There is no relationship between Lynton
International and the Company other than as described herein.
MATERIAL PROCEEDINGS
There are no material proceedings to which any director, officer or
affiliate of the Company, any owner of record or beneficially of more than five
percent of any class of voting securities of the Company, or any associate of
any such director, officer, affiliate of the Company, or security holder is a
party adverse to the Company or any if its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.
ADDITIONAL INFORMATION
During the fiscal year ended September 30, 1995, the Board of Directors
held two formal meetings. In addition, the Board of Directors took action by
unanimous written consent and met informally on other occasions during the
period. The Audit Committee of the Board of Directors, formed in February
1994, consisting of Messrs. Hambro, Toms and Alexander held one formal meeting
during the last fiscal year. The Committee is primarily responsible for
reviewing the services performed by the Company's independent public
accountants and internal audit department and evaluating the Company's
accounting principles and its system of internal accounting controls. The
Compensation Committee of the Board of Directors, formed in February 1994,
consisting of Messrs. Niven, Hambro and Alexander held one formal meeting
during the last fiscal year. The Compensation Committee is primarily
responsible for reviewing compensation of executive officers and other key
employees and overseeing the granting of stock options. No director, excepting
Richard Hambro and Nicholas R.H. Toms, attended fewer than 75% of all meetings
of the Board of Directors and the Committees, if any, upon which such director
then served during the 1995 fiscal year.
SELECTION OF AUDITORS
The Board of Directors has appointed Ernst & Young LLP, independent
certified public accountants, as the Company's independent auditors for the
fiscal year ending September 30, 1996, subject to ratification by the Company's
stockholders. Said firm and its predecessor firm has acted as auditors for the
Company since 1988. It is expected that a representative of Ernst & Young LLP
will be present at the Annual Meeting, with the opportunity to make a statement
if he or she desires to do so, and will be available to respond to appropriate
questions. The Board of Directors recommends that the stockholders ratify the
selection of Ernst & Young LLP as the Company's independent auditors by voting
for this proposal.
STOCKHOLDERS' PROPOSALS
Any stockholder who wishes to present a proposal for action at the next
Annual Meeting of Stockholders and who wishes to have it set forth in the proxy
statement and identified in the form of proxy prepared by management must
notify management of the Company so that such notice is received by management
at its principal executive offices at 9 Airport Road, Morristown Municipal
Airport, Morristown, New Jersey, 07960 by October 5, 1996 and is in such form
as is required under the rules and regulations promulgated by the Securities
and Exchange Commission.
MISCELLANEOUS
The Board of Directors knows of no other business to be presented at the
Annual Meeting but if other matters properly do come before the meeting, it is
intended that the persons named in the accompanying proxy will vote the shares
for which they hold proxies in accordance with their judgment.
The Company's Annual Report for the fiscal year ended September 30, 1995
is being delivered to the Company's stockholders with this Proxy Statement.
The Annual Report is not to be considered part of the soliciting material.
By Order of The Board of Directors
Dated: February 2, 1996 Manus O'Donnell,
Secretary
<PAGE>
APPENDIX
FORM OF PROXY CARD
PROXY
LYNTON GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 6, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Christopher Tennant and Manus O'Donnell,
and each of them, with power of substitution as proxies for the undersigned to
act and vote at the Annual Meeting of Stockholders of Lynton Group, Inc. (the
"Company") to be held on March 6, 1996, at 2:00 p.m., local time, at the
principal executive offices of the Company, 9 Airport Road, Morristown
Municipal Airport, Morristown, New Jersey 07960, and any adjournments thereof
for the following purposes:
1. Election of Directors - Nominees are: Christopher Tennant, James
G. Niven, Richard Hambro, Nicholas R.H. Toms and George H. Hempstead, III.
[ ] FOR all listed nominees (except do not vote for the nominee(s)
whose name(s) I have written below)
[ ] WITHHOLD AUTHORITY to vote for the listed nominees.
2. Proposal to ratify the selection of Ernst & Young LLP as the
Company's auditors for the fiscal year ending September 30, 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE
VOTED FOR PROPOSALS 1 and 2.
Signatures of Stockholder(s)
Dated:
NOTE: Please sign exactly as name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please set forth your
full title.
