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 12, 1997
To the Stockholders:
The Annual Meeting of Stockholders (the "Annual Meeting") of Lynton Group,
Inc. (the "Company") will be held on March 12, 1997, 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; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The close of business on February 6, 1997 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,
PAUL BOYD,
Secretary
Morristown, New Jersey
February 14, 1997
LYNTON GROUP, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 12, 1997
_____________________________
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 12, 1997, 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 February 6, 1997 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 6,394,872 shares of Common Stock, par value
$.30 per share (the "Common Stock") which are the only outstanding voting
securities of the Company. On all matters, each share of Common Stock is
entitled to one vote.
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 14, 1997.
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 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. 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 February 6, 1997, (i) the number of
shares of Common 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 shares 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.
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
Consulta Special Funds Limited 1,898,788(1) 29.7%
Paul R. Dupee, Jr. 1,348,485(2) 21.1%
Task (USA) Inc. 1,026,936(3) 16.1%
Brae Group, Inc. 410,776(4) 6.4%
Christopher Tennant 231,132(5) 3.6%
James G. Niven 434,944(6) 6.8%
Richard Hambro 278,723(7) 4.4%
Nigel D. Pilkington 1,899,288(8) 29.7%
Nicholas R.H. Toms 22,680(9) *
Ian J. Borrowdale 63,214(10) 1.0%
Louis Marx, Jr. 410,776(11) 6.4%
All Executive Officers
and Directors as a Group
(consisting of 7 persons) 4,278,466(12) 66.5%
* Less than 1%
(1) The address for Consulta Special Funds Limited is St. Julian's
Avenue, Guernsey, Channel Islands.
(2) The address for Paul R. Dupee, Jr. is 10 Wilton Row, London, England.
(3) The address for Task (USA) Inc. is 30 Rockefeller Plaza, New York,
New York.
(4) The address for Brae Group, Inc. is 1101 Richmond Avenue, Houston, Texas.
(5) 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.
(6) Includes 423,276 shares held by Mr. Niven, 5,000 shares owned by a
foundation for which Mr. Niven serves as a trustee and a director and
6,668 shares which Mr. Niven has the right to acquire within 60 days
pursuant to the exercise of stock options. The address for Mr. Niven is
1334 York Avenue, New York, New York.
(7) 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. Mr. Hambro disclaims
beneficial ownership of the shares held by BMB-H. Also, includes 205,388
shares held by J.O. Hambro Nominees Limited and 6,668 shares which Mr.
Hambro has the right to acquire within 60 days pursuant to the exercise of
stock options.
(8) Includes 500 shares held by the wife of Mr. Pilkington and 1,898,788
shares held by Consulta Special Funds Limited ("Consulta"). Mr.
Pilkington is a director of Consulta and may be deemed to have beneficial
ownership of such shares. Mr. Pilkington disclaims beneficial ownership
of the shares held by Consulta except to the extent of his pecuniary
interest therein. The address for Mr. Pilkington is 20 St. James's
Street, London, England.
(9) Includes 16,012 shares held by Nicholas R.H. Toms and 6,668 shares which
Mr. Toms has the right to acquire within 60 days pursuant to the exercise
of stock options. Mr. Toms is not standing for re-election to the Board
of Directors.
(10) 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.
(11) Consists of 410,776 shares held by Brae Group, Inc. ("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. The address for
Mr. Marx is 667 Madison Avenue, New York, New York.
(12) Includes 36,671 shares which present officers and directors have the right
to acquire within 60 days pursuant to the exercise of stock options.
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.
PRESENT POSITION HAS SERVED AS
NAME AGE AND OFFICES DIRECTOR SINCE
Christopher Tennant 46 President, Chief 1985
Executive Officer
and Director
Richard Hambro 51 Chairman of the 1989
Board and Director
James G. Niven 51 Director 1989
Paul R. Dupee, Jr. 53 Director 1996
Nigel D. Pilkington 45 Director 1996
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.
RICHARD HAMBRO has been a Director of the Company since May 1989. He was
Chairman of the Board from May 1989 to February 1994, Co-Chairman from February
1994 to January 1997, and again he has been Chairman since January 1997. Since
1988, Mr. Hambro has been an Executive Director of J.O. Hambro & Company
Limited, a London based investment banking firm. From 1978 to 1986, he was a
Director of Hambros Bank in London. Mr. Hambro has also served as a Director
and Chairman of Lynton Group Limited since 1982. He also presently serves as a
director of various other closely held companies and non-U.S. public companies.
JAMES G. NIVEN has been a Director of the Company since May 1989. From
February 1994 to January 1997, he was also Co-Chairman of the Board. Since
1982, he has been a general partner of Pioneer Associates Company, a venture
capital investment company. He is currently a Senior Vice President of
Sotheby's. Mr. Niven is a director of Noel Group, Inc., The Prospect Group,
Inc., Lincoln Snacks Company, Tatham Offshore, Inc., HealthPlan Services, 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.
PAUL R. DUPEE, JR. has been a Director of the Company since April 1996.
From September 1993 to November 1996, Mr. Dupee was Vice-Chairman of the Board
of Directors and a Director of Celtics, Inc., the corporate general partner of
Boston Celtics Limited Partnership ("BCLP") which owns and operates the Boston
Celtics professional basketball team of the National Basketball Association.
Mr. Dupee also served as a Director of BCLP from 1990 to 1996. Mr. Dupee was
Chairman of the Board of London Investment Trust, PLC, a large
international futures and options brokering and clearinghouse from 1987 to
January 1988. Mr. Dupee was President of Providence Capitol, Ltd. from 1982
until its liquidation in December 1986. Prior thereto, he was associated
with Gulf & Western Industries, Inc., most recently as a Vice President and
President of its Providence Capitol Division. Since 1986, Mr. Dupee has been
a private investor.
NIGEL D. PILKINGTON has been a director of the Company since December
1996. Since 1991, Mr. Pilkington has been an executive director of Consulta
Limited, an investment management organization. Prior thereto and from 1983 to
1991, he was with CS First Boston Group ("CSFB"), initially as a manager of the
equity division in London and then as managing director of the European equity
sales and trading of CSFB in London. Mr. Pilkington is also a non-executive
director of Blakeney Management Limited, Oryx Fund Limited and Oryx (India)
Fund Limited.
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.
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.
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, 1996, 1995 and 1994, of those
persons who were, at September 30, 1996 (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):
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
AWARDS
NAME AND PRINCIPAL FISCAL OPTIONS
POSITION YEAR SALARY BONUS (SHARES)
Christopher Tennant 1996 $144,000(1) $50,000(2) 0
President and Chief 1995 $144,000(1) $0 0
Executive Officer 1994 $150,976(1) $0 0
Ian J. Borrowdale 1996 $143,784 $0 0
Vice President 1995 $127,227 $0 0
of International 1994 $135,000 $0 0
Operations and
Chief Operating
Officer
Manus O'Donnell(3) 1996 $145,858 $0 0
1995 $ 65,986 $0 20,000
Robert F. Hagan(4) 1995 $124,498 $0 0
1994 $119,000 $0 0
______________________
(1) In addition, Lynton International Limited ("Lynton International"), a
company wholly-owned by Mr. Tennant, was paid $46,000, $48,000 and $64,000
during fiscal 1996, 1995 and 1994, respectively, for office space in
London rented to the Company. In addition, at September 30, 1995 the
Company had a non-interest bearing receivable from Lynton International in
the amount of $191,308. This amount was written off in fiscal 1996
pursuant to a resolution of the Board of Directors. (See " - Transactions
with Management and Others").
(2) Represents a cash bonus earned for fiscal 1996, $25,000 of which was paid
in December 1996. The balance has not been paid to date.
(3) Mr. O'Donnell, who is no longer affiliated with the Company, served as
Vice President of Finance, Chief Financial Officer, Secretary and
Treasurer from May 1995 through December 1996.
(4) Mr. Hagan, who is no longer affiliated with the Company, served as
Secretary, Treasurer and Chief Financial Officer from May 1989 through May
1995 and in other capacities through September 1995.
STOCK OPTIONS GRANTED AND EXERCISED IN FISCAL 1996;
FISCAL YEAR-END VALUES
During the fiscal year ended September 30, 1996, the Company did not grant
any stock options or stock appreciation rights to any of the named executive
officers of the Company. In addition, none of the named executive officers
exercised during fiscal 1996 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, 1996, the last day of fiscal 1996. According to the records of the
National Quotation Bureau, Inc., there have been no available bid and ask
prices for the Company's Common Stock subsequent to October 20, 1995. On such
date, the closing bid price of the Company's Common Stock was 1/8 per share
and, therefore, none of the outstanding options to purchase Common Stock was
"in the money" on September 30, 1996.
NAME EXERCISABLE UNEXERCISABLE
Christopher Tennant -0- -0-
Ian J. Borrowdale 16,667 -0-
Manus O'Donnell -0- 20,000
COMPENSATION OF DIRECTORS
Since inception, no director has received any cash compensation for his
services as such. In the past, directors have been and will continue to be
reimbursed for reasonable expenses incurred on behalf of the Company.
Since May 1993, Anglo Investors Corp., a company owned by James G. Niven
(a director of the Company), has been retained to provide consulting services
to the Company. Such company was paid the sum of $25,000 for such services
during fiscal 1996.
See " - Stock Option Plan" for information on Formula Options granted to
certain members of the Board in fiscal 1996.
EMPLOYMENT CONTRACTS
Christopher Tennant, President and Chief Executive Officer of the Company,
is employed pursuant to an employment agreement expiring March 31, 1998 at an
annual base salary of $180,000 plus annual cost-of-living adjustments. The
term of the agreement may be extended for an additional three years under
certain conditions relating to a merger or change of control of the Company.
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 Richard Hambro, Paul R. Dupee, Jr. and Nigel D.
Pilkington.
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 and the grant of stock options under
certain conditions.
Christopher Tennant became Chief Executive Officer of the Company in 1989.
His compensation for the fiscal year ended September 30, 1996 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.
During fiscal 1996, the Company entered into a new employment agreement
with Christopher Tennant, effective as of October 1, 1996. As provided
therein, Mr. Tennant will be paid an annual base salary of $180,000. This
agreement replaced an employment agreement with Mr. Tennant which expired
September 30, 1996 which also provided for an annual base salary of $180,000.
Due to the Company's performance in recent years, the Committee determined not
to increase Mr. Tennant's base salary at that time.
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, 1997.
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
Richard Hambro
Paul R. Dupee, Jr.
Nigel D. Pilkington
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In February 1994, the Board of Directors formed a Compensation Committee,
the current members of which are Richard Hambro, Paul R. Dupee, Jr. and Nigel
D. Pilkington. Mr. Hambro served thereon throughout the fiscal year ended
September 30, 1996 while Mr. Dupee and Mr. Pilkington were appointed to the
Compensation Committee in April 1996 and December 1996, respectively. James G.
Niven, a director of the Company, also served on the Compensation Committee
throughout fiscal 1996. Prior to March 1996, Mark A. Alexander who is no
longer a director of the Company also served on the Compensation Committee.
From February 1994 to January 1997, Mr. Hambro and Mr. Niven were Co-Chairman
of the Board of Directors. Since January 1997, Mr. Hambro and been sole
Chairman. Mr. Hambro and Mr. Niven received no compensation during fiscal 1996
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, 1996,
Anglo Investors Corp. was paid $25,000 for such services. Prior to February
1994, Mr. Hambro also served as Chairman of the Board from May 1989 to February
1994. Messrs. Dupee and Pilkington are non-officer directors and are not
employees or former or current officers of the Company or any of its
subsidiaries. Mr. Alexander who did not stand for re-election to the Board of
Directors at the 1996 Annual Meeting of Stockholders, was also a non-officer
director and is not an employee or former or current officer of the Company or
any of its subsidiaries.
See " - Transactions with Management and Others" for information on the
conversion of the Company's Series C Convertible Preferred Stock into shares of
Common Stock, in which each of Mr. Hambro and Mr. Niven has an interest. Also,
see " - Transactions with Management and Others" for information on the
conversion of the Company's 10% Senior Subordinated Convertible Debentures
into shares of Common Stock by Paul R. Dupee, Jr. and Consulta Special Funds
Limited.
During the fiscal year ended September 30, 1996, 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 Peer Group Index.*
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG LYNTON GROUP, INC., NASDAQ MARKET INDEX AND PEER 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, 1991 to
September 30, 1996. The graph compares the value of $100 invested on
October 1, 1991 in the Company's Common Stock, the NASDAQ Market Index and
a Peer 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, 1991 to September 30, 1996. The chart below reflects the
data points used for the graph.
<TABLE>
<CAPTION>
Value at Lynton Group Peer Group NASDAQ Market
September 30, Common Stock Index Index
<S> <C> <C> <C>
1991 $100.00 $100.00 $100.00
1992 100.00 86.35 98.34
1993 71.42 101.49 127.89
1994 16.67 117.00 135.34
1995 7.15 173.68 164.32
1996 7.15 243.23 191.84
</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. In fiscal
1996, Formula Options were awarded to James G. Niven, Richard Hambro and
Nicholas R.H. Toms.
As of September 30, 1996, options to acquire 46,669 shares of Common Stock
have been granted under the 1993 Plan and 203,331 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, 1996, contributions made under such savings plans by
the Company were (i) $6,173, $5,423 and $2,600 for Messrs. Tennant,
Borrowdale and O'Donnell, respectively; and (ii) $14,196 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,
1996, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with except that
Paul R. Dupee, Jr. filed one report late relating to one transaction. 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 Centre").
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 Centre
(the "Lynton Jet Centre Term Loan") and provided a $4,200,000 revolving credit
facility to Lynton Jet Centre (the "Revolving Credit Loans" and, together with
the Company Term Loan and the Lynton Jet Centre Term Loan, collectively the
"Loans"). In August 1994, the Revolving Credit Loan was reduced from
$4,200,000 to $3,200,000.
In June 1994, the Company Term Loan was repaid in full together with all
principal payments on the Lynton Jet Centre Term Loan except for the final
payment in the principal amount of $2,905,923 which would be due on September
30, 1997. The Credit Agreement also provided that the Revolving Credit Loans
of $3,200,000 would also be due on September 30, 1997. In October 1994, HM
Holdings agreed to an additional $500,000 Revolving Credit Loan. As a result,
prior to the completion of the Debt Discharge Transaction (as described below),
the principal amount owing to HM Holdings under the Loans was $6,605,923.
On November 8, 1996, a Debt Discharge Agreement (the "Debt Discharge
Agreement") was entered into by and among Hanson North America, Inc. ("Hanson
North America"), Millennium America Inc. (formerly named Hanson America Inc.)
("Millennium America"), and the Company, Lynton Jet Centre and Lynton
Properties, Inc. (a wholly-owned subsidiary of Lynton Jet Centre). Prior
thereto, Hanson North America had succeeded to HM Holdings as lender under the
Credit Agreement and had acquired certain assets of HM Holdings including the
equity securities described below. Pursuant to the Debt Discharge Agreement
and on November 13, 1996, Hanson North America was paid the sum of $3,500,000,
and in consideration thereof (plus other consideration described below), (i)
cancelled the Loans and discharged all obligations under the Credit Agreement
except for certain indemnification obligations stated therein to survive
termination of the Loans, (ii) surrendered to the Company 848,455 shares of
Common Stock of the Company, (iii) surrendered Warrants to purchase an
aggregate of 247,513 shares of Common Stock of the Company, and (iv)
surrendered 2,000 shares of Series D Preferred Stock of the Company (the "Debt
Discharge Transaction"). The foregoing shares and Warrants represented Hanson
North America's entire equity interest in the Company. As provided in the Debt
Discharge Agreement, the foregoing transactions were deemed to have occurred as
of September 30, 1996. No dividends on the Series D Preferred Stock were paid
in fiscal 1996.
In connection with the Debt Discharge Transaction, Hanson North America
also released all security and liens under the Credit Agreement, including its
First Leasehold Mortgage (the "Leasehold Mortgage") and Assignment of Rents on
the Jet Centre facility operated by Lynton Jet Centre at the Morristown
Municipal Airport, Morristown, New Jersey. In addition, Millennium America,
which previously guaranteed certain obligations of Lynton Jet Centre which were
also secured by the First Leasehold Mortgage, terminated and released its
interests in the Leasehold Mortgage.
Under the terms of an Agreement of Lease entered into in August 1990, as
amended in July 1994 (the "Lease"), Lynton Jet Centre has been leasing to HM
Industries, Inc. ("HM Industries"), an affiliate of HM Holdings, office and
hanger space at the Jet Centre facility in Morristown, New Jersey. Prior to
July 1, 1994, the annual rent under the Lease was $325,000. Commencing July
1, 1994, the annual rent was reduced to $250,000.
In connection with the Debt Discharge Transaction, and on November 8,
1996, Lynton Jet Centre entered into a Second Amendment to the Lease and
Partial Assignment and Assumption of the Lease (the "Second Amendment") with
Hanson North America (which prior thereto had merged with HM Industries with
Hanson North America being the surviving entity) and Millennium America
Holdings, Inc. ("Millennium Holdings"). Under the terms of the Second
Amendment, Hanson North America assigned to Millennium Holdings an undivided
one-half interest in and to the Lease. The Second Amendment provides that the
term of the Lease shall end on November 7, 2001 and that no rent is or shall be
due for the remainder of the term. The Second Amendment also provides that if
at any time during the term of the Lease, space sufficient to accommodate an
additional aircraft shall become available at the Jet Centre facility for
rental, Hanson North America and Millennium Holdings shall have the right of
first refusal with respect to such available space to lease such space for a
period of five years at a predetermined annual rate. The Second Amendment also
provides for liquidating damages payable by Lynton Jet Centre in the event of
the termination of the Lease other than by reason of default by Hanson North
America and/or Millennium Holdings.
In conjunction with the Second Amendment, Lynton Jet Centre, Hanson North
America and Millennium Holdings entered into a Jet Fuel Agreement on November
8, 1996 whereby Lynton Jet Centre agreed to sell jet fuel to Hanson North
America and Millennium Holdings at the Jet Centre facility at a predetermined
price for so long as aircraft of Hanson North America and Millennium Holdings
is based at the Jet Centre facility.
The four holders of all of the outstanding shares of Series C Convertible
Preferred Stock (the "Series C Preferred Stock") were offered by the Company
and agreed (effective retroactively to September 30, 1996) to convert all of
the Series C Preferred Stock into an aggregate of 2,053,876 shares of Common
Stock. Two of such holders are James G. Niven, a director of the Company, and
J. O. Hambro Nominees Limited, which may be deemed to be controlled by Richard
Hambro, Chairman and a director of the Company. No dividends on the Series C
Preferred Stock were paid in fiscal 1996.
In addition, subsequent to the completion of the Debt Discharge
Transaction, the holders of the 10% Senior Subordinated Convertible Debentures
due December 31, 1998 (the "Debentures") of the Company were given the
opportunity until January 10, 1997 to convert the Debentures into shares of
Common Stock of the Company at a reduced conversion price of $.33 per share.
Prior to completion of the Debt Discharge Transaction, there were Debentures in
the principal amount of $1,960,000 outstanding. Two holders of the Debentures
(Paul R. Dupee, Jr. and Consulta Special Funds Limited) agreed to convert the
Debentures held by them (in the principal amount of $1,065,000) into 3,227,273
shares of Common Stock (effective retroactively to September 30, 1996). Paul
R. Dupee, Jr. is a director of the Company. The shares held by Consulta
Special Funds Limited may be deemed to be beneficially owned by Nigel D.
Pilkington, also a director of the Company. (See "Principal Stockholders and
Security Ownership of Management").
Under a Management Agreement with HM Industries entered into in August
1990, as amended (the "Management Agreement"), Lynton Jet Centre 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. From June 30, 1995 until
September 30, 1996, however, the Company was 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. During the fiscal year ended September 30, 1996, HM Industries
reimbursed the sum of $3,985,000 to the Company under the terms of the
Management Agreement. At September 30, 1995, reimbursements receivable from HM
Industries was $141,000. No amount was due from HM Industries at September 30,
1996.
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, 1996, rental expense for this space was $46,000.
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. Such indebtedness did not have a due date
and was non-interest bearing. This amount was written off in fiscal 1996
pursuant to a resolution of the Board of Directors of the Company. 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, 1996, the Board of Directors
held three 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, presently consisting of Messrs. Hambro, Dupee and Pilkington 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,
presently consisting of Messrs. Hambro, Dupee and Pilkington 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 incumbent director,
excepting James G. Niven 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 1996 fiscal year.
INDEPENDENT AUDITORS
Grant Thornton LLP served an independent certified public accountants for
the Company for the fiscal year ended September 30, 1996 and has been selected
to continue in this capacity for the current fiscal year. The Board of
Directors in its discretion may direct the appointment of a different
independent accounting firm at any time during the fiscal year if the Board
determines that such a change would be in the best interests of the Company and
its stockholders. It is expected that a representative of Grant Thornton 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.
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 17, 1997 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, 1996
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
Paul Boyd,
Secretary
Dated: February 14, 1997
<PAGE>
APPENDIX
FORM OF PROXY CARD
PROXY
LYNTON GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS
MARCH 12, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Christopher Tennant and Paul Boyd, 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 12, 1997, 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: Christopher Tennant, Richard
Hambro, James G. Niven, Paul R. Dupee, Jr. and Nigel D. Pilkington.
[ ] FOR
[ ] FOR ALL EXCEPT
[ ] WITHHOLD
INSTRUCTION: To withhold your vote for any nominee(s), mark "For
All Except" and write that nominee's name on the line below.
2. 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 PROPOSAL 1.
Signatures of Stockholder(s)
Date:
NOTE: Please sign your name exactly as it appears on this Proxy.
Jointly held shares require only one signature. If you are signing this
Proxy as an attorney, administrator, agent, corporation, officer, executor,
trustee or guardian, etc., please add your full title to your signature.
IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND RETURN
ALL CARDS IN THE ACCOMPANYING ENVELOPE.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY TODAY
