FlightSafety International
[Logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
FlightSafety International, Inc., a New York corporation (the 'Company'), will
be held at the offices of the Company, Marine Air Terminal, La Guardia
Airport, Flushing, New York 11371, on Wednesday, April 24, 1996, at 4:00 P.M.,
New York City time (with any adjournment or postponement thereof, the
'Meeting'), for the following purposes:
1. To elect a Board of six Directors, each to serve until the next
Annual Meeting and until his successor shall have been duly elected and
qualified;
2. To ratify and approve the appointment by the Board of Directors of
Price Waterhouse LLP as independent accountants for the Company for the
year ending December 31, 1996; and
3. To transact such other business as may properly come before the
Meeting.
The Board of Directors has fixed the close of business on March 11, 1996
as the record date for the determination of shareholders entitled to notice of
and to vote at the Meeting.
You are cordially invited to attend the Meeting in person and vote. Even
if you plan to attend the Meeting in person, you are urged to complete, sign
and date the enclosed proxy card and to return it promptly in the prepaid
return envelope provided. If you attend the Meeting in person, you may then
withdraw your proxy and vote in person if you so desire.
By Order of the Board of Directors,
PETER P. MULLEN
Secretary
Flushing, New York
March 22, 1996
FLIGHTSAFETY INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of FlightSafety International, Inc., a New
York corporation (the 'Company'), to be used at the Annual Meeting of
Shareholders of the Company which is scheduled to be held at the principal
executive offices of the Company, Marine Air Terminal, La Guardia Airport,
Flushing, New York 11371, on Wednesday, April 24, 1996, at 4:00 P.M., New York
City time, and any adjournment or postponement thereof (the 'Meeting'). This
proxy statement, the accompanying notice and the enclosed proxy card are first
being mailed to shareholders on or about March 22, 1996.
The Board of Directors does not intend to bring any matter before the
Meeting except as specifically indicated in the notice, nor does the Board of
Directors know of any matters which anyone else proposes to present for action
at the Meeting. If any other matters properly come before the Meeting,
however, the persons named in the enclosed proxy, or their duly constituted
substitutes acting at the Meeting, will be authorized to vote or otherwise act
thereon in accordance with their judgment on such matters.
Shares represented by properly executed proxies received by the Company in
time for the Meeting will be voted in accordance with the instructions given
therein. If no instructions are specified in a proxy, the shares represented
by that proxy will be voted 'For' the election of all six nominees for the
Board of Directors and 'For' the ratification and approval of Price Waterhouse
LLP as independent accountants for the Company for the year ending December
31, 1996.
A shareholder giving a proxy may revoke such proxy at any time before it
is exercised by giving written notice to the Company (bearing a date later
than the proxy) or by executing a subsequent proxy relating to the same
shares, and by filing with or hand delivering to the Secretary, at the offices
of the Company, such written notice or subsequent proxy at or before the
taking of the vote at the Meeting. In addition, any shareholder attending the
Meeting may vote in person whether or not such shareholder has previously
filed a proxy, although attendance at the Meeting will not in and of itself
constitute a revocation of a proxy.
The accompanying form of proxy is being solicited on behalf of the Board
of Directors of the Company. The expenses of solicitation of proxies for the
Meeting will be paid by the Company. In addition to the mailing of the proxy
materials, such solicitation may be made in person or by telephone by
directors, officers and employees of the Company, who will receive no
additional compensation therefor. Upon request, the Company will reimburse
brokers, dealers, banks and trustees, or their nominees, for reasonable
expenses incurred by them in forwarding solicitation materials to beneficial
owners of shares of the Company's Common Stock.
The Board of Directors has fixed the close of business on March 11, 1996
as the record date for the Meeting. Accordingly, only shareholders of record
of the Company's Common Stock at the close of business on such date will be
entitled to notice of and to vote at the Meeting. On that date, there were
issued and outstanding 30,662,772 shares of the Company's Common Stock.
The presence, in person or by proxy, of the holders of one-third of the
total number of issued and outstanding shares of the Company's Common Stock
entitled to vote at the Meeting will constitute a quorum. Shareholders
granting a proxy to vote on one issue but abstaining as to the other issue
will be counted for the purpose of determining a quorum. On all matters voted
upon at the Meeting, the holders of shares of the Company's Common Stock vote
together as a single class, with each record holder entitled to one vote per
share.
ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated six candidates to be
elected at the Meeting. Each nominee is currently serving as a director of the
Company. The directors elected at the Meeting will hold office until the next
annual meeting of shareholders and until their successors have been duly
elected and qualified.
Directors shall be elected by a plurality of votes cast in the election of
directors. Under applicable New York law, in tabulating the vote, broker
non-votes will be disregarded and will have no effect on the outcome of the
vote. Unless a contrary instruction is indicated, a properly executed and
returned proxy will be voted 'For' the election of Messrs. George B. Beitzel,
Edward E. Hood, Jr., Charles R. Longsworth, John A. Morgan, Albert L. Ueltschi
and Bruce N. Whitman.
Each nominee has consented to being named in the proxy statement and to
serve if elected. If, prior to the Meeting, any nominee should become
unavailable to serve, the shares of the Company's Common Stock represented by
a properly executed and returned proxy will be voted for a substitute nominee
designated by the Board of Directors, unless the Board should determine to
reduce the number of directors pursuant to the Company's By-laws.
The table below sets forth certain information concerning the nominees for
election as directors at the Meeting, including such nominee's positions with
the Company and principal occupation, a brief account of such nominee's
business experience during the last five years, certain other directorships
currently held by such nominee, such nominee's age and the year such nominee
was first elected a director of the Company.
<TABLE>
Year First
Positions with the Company, Principal Elected
Occupation and Other Directorships Age Director
-------------------------------------------- ------- ---------
<C> <C> <C>
George B. Beitzel ......
Retired (March 1987); prior thereto, Senior 67 1974
Vice President and Director, International
Business Machines Corporation, an
information handling systems, equipment
and services company. Mr. Beitzel is
Chairman of the Colonial Williamsburg
Foundation and a director of Bankers Trust
Company, Caliber System, Inc., Computer
Task Group, Inc., Phillips Petroleum
Company, Rohm and Haas Company, and Xillix
Technologies Corp. Mr. Beitzel is also
Chairman Emeritus of Amherst College.
Edward E. Hood, Jr. ......
Retired (February 1993); prior thereto, Vice 65 1991
Chairman, Executive Officer and Director,
General Electric Company, a diversified
technology, manufacturing and services
company. Mr. Hood is a director of
Lockheed Martin Corp., Gerber Scientific,
Inc. and Lincoln Electric Company and is
also Chairman Emeritus of the Board of
Trustees of Rensselaer Polytechnic
Institute and a Trustee of North Carolina
State University.
Charles R. Longsworth.....
Chairman Emeritus, Colonial Williamsburg 66 1985
Foundation, museum, education, hotel and
restaurant services. Mr. Longsworth is a
director of Public Radio International,
Caliber System, Inc., Crestar Financial
Corporation, Houghton Mifflin Company,
Inc., Saul Centers, Inc. and Virginia
Eastern Shore Corporation and is also
Chairman of the Board of Trustees of
Amherst College.
John A. Morgan............
Partner, Morgan Lewis Githens & Ahn, 65 1961
investment bankers. Mr. Morgan is a
director of Masco Corporation, Masco
Industries, Inc., McDermott International,
Inc. and Tri Mas Corporation.
Albert L. Ueltschi........
Chairman of the Board of Directors and 78 1951
President of the Company.
Bruce N. Whitman..........
Executive Vice President of the Company. 62 1962
</TABLE>
2
Committees, Meetings and Compensation of the Board of Directors
The Board of Directors held two special and four regular meetings during
1995. Each director attended at least 75 percent of the aggregate number of
meetings of the Board and Committees of the Board of which he was a member,
except for Mr. Longsworth.
The Company's Board of Directors has a standing Audit Committee, Executive
Committee, Nominating Committee, Compensation Committee and Employee Stock
Purchase Plan Committee. The Audit Committee is composed of Messrs. Morgan
(Chairman), Beitzel, Hood and Longsworth and recommends to the Board of
Directors the accounting firm to be appointed as independent accountants for
the Company; reviews with the Company's management and independent accountants
the Company's annual operating results; and reviews with the Company's
independent accountants the scope and results of the audit and the adequacy of
the Company's internal accounting procedures and systems. The Audit Committee
met twice during 1995.
The Executive Committee is composed of Messrs. Ueltschi (Chairman),
Beitzel, Morgan and Whitman, and is authorized to exercise all of the powers
and authority of the Board except those powers reserved to the Board of
Directors by law, the Company's Certificate of Incorporation or By-laws, or by
resolution of the Board of Directors. The Executive Committee did not meet
during 1995.
The Nominating Committee consists of Messrs. Ueltschi (Chairman), Beitzel,
Morgan and Whitman, and considers and makes recommendations to the Board of
Directors of the names of persons to be nominated for election as directors by
the shareholders of the Company, and also those to be elected by the Board to
fill vacancies that may arise between annual meetings of the shareholders of
the Company. The Nominating Committee will consider nominees recommended by
the Company's shareholders. Any such recommendations should be mailed to the
Nominating Committee, at the Company's address, and should include the name,
address and a statement of qualifications of each nominee as well as the
signed consent of such person to serve if nominated and elected. The
Nominating Committee did not meet during 1995.
The Compensation Committee consists of Messrs. Beitzel (Chairman), Hood
and Morgan and considers and makes recommendations to the Board of Directors
on matters relating to the cash compensation of employees of the Company,
including, with respect to executive officers, salaries and bonuses. The
Compensation Committee also administers the Company's 1979 Stock Option Plan,
1982 Incentive Stock Option Plan, 1984 Restricted Stock Compensation Plan and
1992 Stock Option Plan. The Compensation Committee met three times during
1995.
Members of the Board of Directors, who are not employees of the Company,
currently receive an annual retainer of $22,000 and are paid $500 per Board or
Committee meeting attended (other than Committee meetings held on the same day
as a Board meeting). Such directors are reimbursed for expenses they incur in
attending such meetings. Members of the Board of Directors who are employees
of the Company do not receive additional compensation for serving in such
capacity. The Company also maintains a deferred compensation plan for outside
directors, which enables a director to defer payment of his fees in cash and
stock equivalent units until he leaves the Board.
The Company maintains a retirement plan for its non-employee directors
pursuant to which directors of the Company who are not employees of the
Company and who retire as a director of the Company are entitled to receive
the semi-annual payments described below after reaching age 70 (or earlier if
their retirement as a director of the Company is due to disability). Any
director of the Company who serves as an employee of the Company is eligible
to participate in the plan upon such director's retirement as an employee of
the Company, provided that such director remains a director of the Company
following such retirement. Directors are paid semi-annual amounts under the
plan equal to one-half of the last annual retainer fee paid to such director
for such director's last active year as a director of the Company and receive
such payments for the same number of years that such director served as a
director of the Company or ten years, whichever is shorter. If a director dies
before retiring or before receiving all scheduled retirement payments, such
payments are paid to such director's spouse, but only if such spouse survives
such director and, commencing upon the death of such director, continue until
all retirement payments which would otherwise have been paid to such director
have been paid or until such spouse's death, whichever occurs first.
3
The Company maintains directors and officers liability insurance which
insures directors and officers of the Company and its subsidiaries against
certain liabilities incurred by them while serving in such capacities, and
reimburses the Company for certain indemnification payments made by the
Company to directors and officers of the Company and its subsidiaries. This
policy extends through August 15, 1996 at a premium of $106,800 per year. No
claims have been made under this policy.
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth on the following table is furnished as of March
11, 1996 with respect to any person (including any 'group' as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the 'Exchange Act')), who is known to the Company to be the beneficial owner
of more than 5% of the Company's Common Stock, as to those shares beneficially
owned by each of the Company's directors, each of the Company's executive
officers named in the Summary Compensation Table (see page 8) and all
directors and executive officers of the Company as a group.
Number of Shares
Beneficially Percent of
Owned Outstanding
as of March 11, Common Stock
Name of Beneficial Owner 1996 as of March 11, 1996
- --------------------------------------- ---------------- -------------------
<C> <C>
Directors
Albert L. Ueltschi(1).............. 9,612,483(2) 31.3%
George B. Beitzel.................. 3,292(3) *
Edward E. Hood, Jr. ............... 1,000 *
Charles R. Longsworth.............. 1,025 *
John A. Morgan..................... 118,885 *
Bruce N. Whitman(4)................ 267,436(5) *
Executive Officers
Kenneth W. Motschwiller............ 27,301(5)(6) *
James S. Waugh..................... 32,386(5) *
Dennis Gulasy...................... 35,131(5)(7)
Directors and Executive Officers as a
group (11 persons)................. 10,160,711(5) 33.1%
FMR Corp.(8)........................... 3,267,000(8) 10.6%
Putnam Investments, Inc.(9).......... . 2,474,046(9) 8.1%
- ---------
* Indicates beneficial ownership of less than 1% of the shares of Common
Stock outstanding on such date.
(1) The address for Mr. Ueltschi is Marine Air Terminal, La Guardia Airport,
Flushing, NY 11371. Mr. Ueltschi is also the President of the Company.
(2) Includes 9,611,983 shares held pursuant to a revocable trust for which Mr.
Ueltschi is the sole beneficiary during his lifetime and 500 shares held
pursuant to a partnership. Does not include approximately 1,451,000 shares
beneficially owned by various members of Mr. Ueltschi's family, in respect
of which Mr. Ueltschi disclaims beneficial ownership.
(3) Does not include 275 shares beneficially owned by Mr. Beitzel's spouse, in
respect of which Mr. Beitzel disclaims beneficial ownership.
(4) Mr. Whitman is also Executive Vice President of the Company.
(5) Includes shares which the executive officer has the right to acquire
within 60 days through the exercise of stock options granted under the
Company's stock option plans. These amounts are as follows: Mr. Whitman,
21,794 shares; Mr. Motschwiller, 20,523 shares; Mr. Waugh, 21,125 shares;
Mr. Gulasy, 23,349 shares; and all directors and executive officers as a
group, 97,129 shares.
(6) Includes 1,234 shares held by Mr. Motschwiller as custodian for his minor
children.
(7) Does not include 1,182 shares beneficially owned by Mr. Gulasy's spouse,
in respect of which Mr. Gulasy disclaims beneficial ownership.
(8) FMR Corp.'s address is: 82 Devonshire Street, Boston, MA 02109. FMR Corp.
is a holding company and its subsidiary, Fidelity Management & Research
Company, has certain investment managers who are considered beneficial
owners of the Company's common stock, which stock was acquired for
investment purposes by such investment managers for certain of their
advisory clients. This
4
represents the number of shares owned as of December 31, 1995 as indicated
in a Schedule 13G filed by FMR with the SEC on January 10, 1996. FMR has
sole power to vote or to direct the vote for 211,200 shares and has sole
power to dispose or direct the disposition of all the shares.
(9) Putnam Investment, Inc.'s address is: One Post Office Square, Boston, MA
02109. Putnam Investment, Inc. is a wholly-owned subsidiary of Marsh and
McLennan. Putnam Investment, Inc.'s subsidiaries, Putnam Investment
Management, Inc. and The Putnam Advisory Company, Inc., have certain
investment managers who are considered beneficial owners of the Company's
common stock, which stock was acquired for investment purposes by such
investment managers for certain of their advisory clients. This represents
the number of shares owned as of December 31, 1995 as indicated in a
Schedule 13G filed by Putnam Investment, Inc. with the Securities and
Exchange Commission (SEC) on January 15, 1996. Putnam has shared power to
vote or to direct the vote for 30,753 shares and has shared power to
dispose or to direct the disposition of all the shares.
</TABLE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
Each executive officer of the Company serves at the pleasure of the
Company's Board of Directors, and, subject to removal, holds office until the
regular meeting of the Board of Directors which follows the annual meeting of
shareholders and until his successor has been appointed and qualified.
The following table sets forth certain information with respect to the
executive officers of the Company.
Years
Position
With
Name Age Position Held Company
- ------------------------- -------- ------------------- -----------
<C> <C> <C>
Albert L. Ueltschi........ 78 President and
Chairman of the Board 45 years
Bruce N. Whitman.......... 62 Executive Vice President 34 years
Elmer G. Gleske........... 65 Vice President --
Government Affairs 19 years
Dennis Gulasy(1).......... 53 Vice President --
Simulation Systems 4 years
Kenneth W. Motschwiller(2) 39 Vice President --
Treasurer 5 years
James S. Waugh............ 48 Vice President --
Marketing 16 years
Mario D'Angelo(3)......... 43 Controller 5 years
- ---------
(1) Mr. Gulasy was elected Vice President -- Simulation Systems of the Company
on September 17, 1992. Mr. Gulasy has also been General Manager of the
Company's Simulation Systems Division since 1985. Prior thereto, Mr.
Gulasy held various positions with the Company.
(2) Prior to becoming Vice President -- Treasurer, Mr. Motschwiller was
Controller of the Company from December 1983 until July 1991.
(3) Prior to becoming Controller, Mr. D'Angelo was Assistant Controller of the
Company from September 1988 until July 1991. Prior thereto, Mr. D'Angelo
held various positions with the Company.
</TABLE>
EXECUTIVE COMPENSATION
Report of the Compensation Committee on Executive Compensation
Overall Compensation Policy. The Compensation Committee of the Board of
Directors has three members, all of whom are non-employee directors. Each
member of the Committee is a 'disinterested director' within the meaning of
Rule 16b-3 under the Exchange Act. As noted earlier in this proxy statement,
the Committee is responsible for considering matters relating to the annual
cash compensation for the Company's executive officers (including the named
executive officers) and administering the Company's stock-based employee
benefit plans.
The Company's executive compensation program has been designed to (i)
provide compensation comparable to that offered by other companies of similar
size (which are in the geographic area of the Company's headquarters and the
Standard and Poor's Specialized Services Index, which is used in the
5
stock performance graph presented below), thereby allowing the Company to
attract and retain highly qualified executives, (ii) motivate these executives
to achieve the goals inherent in the Company's business strategy, (iii) align
the interests of these executives with the long-term interests of the
Company's shareholders through stock-based employee benefit plans, (iv)
provide a compensation package that recognizes individual contributions as
well as overall Company performance and (v) be cost effective. A basic tenet
of the compensation philosophy of the program is that a substantial portion of
each executive officer's annual compensation relates to and must be contingent
upon the performance of the Company, as well as the individual contributions
of such executive. The Committee believes that the cash compensation of the
executive officers, consisting of their annual base salary and annual bonus,
are below the median ranges of such items paid by companies of comparable size
in the Company's geographic area and with other companies in the Standard and
Poor's Specialized Services Index.
The key elements of the Company's executive compensation program are base
salary, annual bonus, stock option grants and restricted stock awards. Mr.
Ueltschi, the President of the Company, does not participate in the Company's
stock option and restricted stock programs. The Committee's policies with
respect to each of these elements, including the bases for the compensation
awarded to Mr. Ueltschi, are discussed below. While the elements of
compensation described below are considered separately, the Committee takes
into account the full compensation package provided by the Company to the
individual executive.
Base Salaries. Executive officer base salaries are reviewed annually by
the Compensation Committee in order to consider any adjustments for the
upcoming year. Annual salary adjustments are determined by evaluating the
competitive marketplace, changes in the cost of living, the Company's current
and historical performance (taking into account changes in the Company's
business and economic conditions affecting the Company), the executive's
contributions and any change in the executive's responsibilities. Mr. Ueltschi
evaluates the performance of the other executive officers of the Company and
recommends appropriate adjustments for the Compensation Committee's
consideration.
Within this framework, in making its recommendations to the Board for 1995
annual salary adjustments, the Compensation Committee decided that there would
be no salary increase for any of the executive officers of the Company for
1995 because the executive officers had received significant increases in
their annual salaries in 1994.
Annual Bonus. Annual bonus awards in respect of any year are considered by
the Compensation Committee in the following March in conjunction with their
review of the Company's audited financial statements for the prior year. Bonus
awards are normally paid in two increments; two-thirds payable upon award and
one-third payable on the first business day of the year following the award,
subject to the condition that the executive officer be employed by the Company
at the time of payment unless such employment is terminated as a result of the
death of such officer.
Annual bonus awards are determined as a percentage (the 'Performance
Percentage') of the applicable bonus base of the executive officer's annual
salary (the 'Bonus Base'). Bonus Bases have historically ranged between 25
percent to 60 percent. In determining the Bonus Base for a particular
executive officer, the Compensation Committee considers, among other things,
the length of employment, current responsibilities, individual contributions
and past bonus history for such executive. In determining the applicable
Performance Percentage, the Compensation Committee considers the Company's
overall performance for the year, including the earnings for the year and for
prior years (taking into account general economic conditions and the
performance of relevant sectors of the economy). In order to foster a team
approach among senior management, the Performance Percentage normally does not
vary greatly as between individual executive officers. Performance Percentages
usually range from 75 percent to 150 percent.
In making its determinations of annual bonus awards in respect of 1995,
the Compensation Committee focused on, among other things, the Company's 13
percent increase in training revenues and a 15 percent increase in net income
per share in 1995 as compared to 1994. The Compensation Committee also
reviewed the total cash compensation of the executive officers in view of a
third-party consultant survey prepared during 1995 of comparable companies and
determined that the Company's executive officers' total cash compensation was
below the median ranges of comparable companies' cash
6
compensation levels. The Bonus Bases were increased for each executive officer
due to the above factors. The Performance Percentages were essentially the
same for each executive officer in order to foster a team approach. Mr.
Ueltschi's 1995 annual bonus was higher than in 1994 due to the factors
indicated earlier, primarily his relative compensation as indicated in the
survey.
Stock Option Grants and Restricted Stock Awards. The objective in granting
stock options and restricted stock is to create an incentive for grantees with
respect to future performance of the Company, rather than to reward them for
past contributions. The stock awards are designed to align the long-term
interests of the Company's executive officers with those of its shareholders
by creating a direct link between executive compensation and shareholder
return and by enabling such executives to develop and maintain a significant,
long-term stock ownership position in the Company's Common Stock.
Under the Company's 1992 Stock Option Plan, stock options to purchase
95,760 shares were granted in December 1995 to key employees of the Company
(including certain named executive officers). Such options were granted with
an exercise price equal to the closing market price of the Company's Common
Stock on the date of grant, become exercisable in 20 percent increments on the
first five anniversaries of the date of grant and expire 10 years after the
date of grant.
The Compensation Committee, in considering award levels, granted to
certain named executive officers, options to purchase a number of shares of
the Company's Common Stock, based on the closing market price of the Company's
Common Stock on the date of grant, equal to twice such executive officer's
1995 base salary except for Mr. Gulasy, where his base salary was utilized.
This formula was utilized to increasingly link executive officers' total
compensation to a greater extent to shareholder return. The number of options
previously awarded to the executive officers also was considered.
Under the Company's 1984 Restricted Stock Plan, restricted shares were
awarded in July 1995 to key employees of the Company (including the named
executive officers). Shares of restricted stock generally vest upon normal
retirement, death or total disability. Recipients of restricted stock awards
are entitled to receive dividends on such shares as of the date of the award.
The Compensation Committee, in recommending to the Board the 1995 restricted
stock awards for executive officers, recommended that each of the executive
officers participating in the restricted stock program be awarded a number of
shares of restricted stock equal in value, based on the closing market price
of the Company's Common Stock on the date of grant, to 10 percent of such
executive's 1995 base salary, which is the percentage that has been used for
all employees in this program since 1986.
Due to his significant stock ownership in the Company, Mr. Ueltschi does
not participate in any of the Company's stock-based employee benefit programs.
Although federal income tax laws limit the deductibility of executive
officer compensation if the compensation is above certain levels, the
Compensation Committee believes that these laws will not impact the Company's
tax deduction in 1995.
Compensation Committee
George B. Beitzel, Chairman
Edward E. Hood, Jr.
John A. Morgan
7
<TABLE>
<CAPTION>
Summary Compensation Table
The following table sets forth the cash and non-cash compensation for each
of the last three fiscal years awarded to or earned by the chief executive
officer of the Company and the four other most highly compensated executive
officers of the Company at the end of 1995.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Awards
Compensation ------------------- All Other
---------------- Compen-
Base Restricted Stock ation($)
Year Salary Bonus Stock($) Options
(1) (2) (3) (#) (4)
---- --------- --------- -------- ------ --------
<C> <C> <C> <C> <C> <C>
Albert L. Ueltschi(5)
President and Chair- 1995 $ 250,000 $ 200,000 -- -- $ 1,738
man of the Board 1994 $ 250,000 $ 150,000 -- -- $ 1,584
1993 $ 220,000 $ 118,800 -- -- $ 2,257
Bruce N. Whitman
Executive Vice 1995 $ 210,000 $ 147,000 $ 21,000 8,260 $ 10,920
President and 1994 $ 210,000 $ 126,000 $ 21,000 10,910 $ 9,277
Director 1993 $ 190,000 $ 102,600 $ 19,000 11,240 $ 11,614
Kenneth W. Motschwiller
Vice President -- 1995 $ 130,000 $ 110,500 $ 13,000 5,110 $ 2,066
Treasurer 1994 $ 130,000 $ 101,400 $ 13,000 6,750 $ 2,120
1993 $ 103,000 $ 68,000 $ 10,300 6,090 $ 2,507
James S. Waugh
Vice President -- 1995 $ 130,000 $ 110,500 $ 13,000 5,110 $ 3,676
Marketing 1994 $ 130,000 $ 78,000 $ 13,000 6,750 $ 3,771
1993 $ 108,000 $ 58,300 $ 10,800 6,390 $ 4,729
Dennis Gulasy
Vice President -- 1995 $ 135,000 $ 72,900 $ 13,500 2,650 $ 3,023
Simulation 1994 $ 135,000 $ 48,600 $ 13,500 -- $ 2,925
Systems 1993 $ 110,000 $ 72,600 $ 11,000 6,520 $ 3,493
- ---------
(1) The amounts shown in this column include amounts deferred pursuant to the
Company's 401(k) plan. There are no Company funds contributed to this
plan.
(2) Annual bonus includes amounts awarded in March of the following year. Such
bonuses are normally paid two-thirds upon award and, subject to certain
conditions, one-third on the first business day of the following year.
(3) The amounts shown in this column represent the market value of the
restricted stock awarded and were calculated by multiplying the closing
market price of the Company's Common Stock on the date of award by the
number of shares awarded. Shares of restricted stock generally vest upon
normal retirement, death or total disability. Recipients of restricted
stock awards are entitled to receive dividends on such shares as of the
date of the award. As of December 31, 1995, the number and value of the
aggregate restricted stock holdings of each of the named executive
officers was as follows: Mr. Ueltschi, 0 shares; Mr. Whitman, 7,992 shares
($324,700); Mr. Motschwiller, 3,644 shares ($148,000); Mr. Waugh, 4,765
shares ($193,600) and Mr. Gulasy, 3,987 shares ($162,000).
(4) The amounts shown in this column represent (i) above-market interest in
excess of 120 percent of the applicable federal long-term rate which was
credited to the executive officer's 1986 deferred income account which
amounts for 1995 were: Mr. Ueltschi, $1,519; Mr. Whitman, $10,701; Mr.
Motschwiller, $1,847; Mr. Waugh, $3,457; and Mr. Gulasy, $2,804; and (ii)
the dollar value of group term life insurance premiums of $219 paid by the
Company for each of the named executive officers. Subject to certain
eligibility requirements, the Company's group term life insurance is
available to all employees of the Company.
(5) Mr. Ueltschi does not participate in the Company's restricted stock or
stock option programs.
</TABLE>
8
<TABLE>
<CAPTION>
Stock Option Grants Table
The following tables summarize stock options granted during 1995 to the
named executive officers of the Company.
Stock Option Grants In 1995
Potential Realizable
Value at Assumed
Annual Rates of Stock
Percentage of Price Appreciation
Total Options for Option-Term
Stock Granted to Exercise Expir- Compounded Annually
Executive Options All Employees Price ation -------------------
Officer Granted in 1995 ($/Share) Date 5% 10%
(1) (2) (3)
- --------- ------- ------------- --------- -------- --------------------
<C> <C> <C> <C> <C> <C>
Bruce N. Whitman...
8,260 8.6% $ 50.88 12/13/05 $ 264,300 $ 669,700
Kenneth W.
Motschwiller.......
5,110 5.3% $ 50.88 12/13/05 $ 163,500 $ 414,300
James S. Waugh.....
5,110 5.3% $ 50.88 12/13/05 $ 163,500 $ 414,300
Dennis Gulasy......
2,650 2.8% $ 50.88 12/13/05 $ 84,800 $ 214,900
- ---------
(1) Mr. Ueltschi does not participate in the Company's stock option programs.
(2) The options become exercisable to purchase shares of the Company's Common
Stock at the fair market value of such stock on the date of grant in 20
percent increments on the first five anniversaries of the date of the
grant and expire ten years from date of grant.
(3) The Company granted stock options for an aggregate of 95,760 shares to its
employees in 1995.
</TABLE>
<TABLE>
<CAPTION>
Stock Option Exercises and Year-End Value Table
The following table summarizes the exercise of stock options by the named
executive officers and the value of stock options held by such executives as
of the end of 1995.
AGGREGATED STOCK OPTION EXERCISES IN 1995 AND
VALUE OF STOCK OPTIONS AT END OF 1995
# of Unexercised Value of Unexercised
Options at End of In-the-Money Options
1995 at End of Fiscal 1995
Acquired ------------------ ---------------------
Executive On Value Exerci- Unexer- Exerci- Unexer-
Officer(1) Exercise Realized sable cisable sable cisable
- --------------- -------- -------- ------- ------- ------- -------
<C> <C> <C> <C> <C> <C>
Bruce N. Whitman...
- 0 - $ - 0 - 21,794 26,315 $ 190,600 $ 230,200
Kenneth W.
Motschwiller.......
- 0 - $ - 0 - 20,523 15,797 $ 376,200 $ 134,000
James S. Waugh.....
- 0 - $ - 0 - 21,125 15,806 $ 456,200 $ 136,000
Dennis Gulasy......
- 0 - $ - 0 - 23,349 8,250 $ 503,000 $ 75,200
- ---------
(1) Mr. Ueltschi does not participate in the Company's stock option programs.
(2) Value based on closing market price of the Company's Common Stock at
December 31, 1995, minus the exercise price, multiplied by the applicable
number of options.
</TABLE>
Pension Plan
The Company maintains a defined benefit pension plan (the 'Pension Plan')
which covers substantially all of its employees and those of its North
American subsidiaries, excluding employees of the Company's subsidiary,
FlightSafety Services Corporation (who participate in such subsidiary's
defined contribution plan). Full-time employees are eligible to participate in
the Pension Plan on the December 31st or June 30th coincident with or next
following such employee's 21st birthday and the completion of one year of
service. The normal retirement benefit provided by the Pension Plan is (i) the
benefit accrued by the participant to December 30, 1989, plus .75% of average
monthly compensation, excluding overtime, multiplied by the participant's
total number of credited years of service up to 35 less
9
credited service prior to December 31, 1989, plus (ii) .75% of such average
monthly compensation in excess of a specified level of compensation tied to
social security benefits multiplied by the participant's total number of years
of credited service up to 35 less credited service prior to December 31, 1989.
When an employee has completed five years of service with the Company or has
attained age 55, the employee becomes 100% vested under the Pension Plan.
Normal retirement age under the Pension Plan is 65 and five years of
participation, although early retirement benefits are available. For the named
executive officers, the projected annual benefits under the Pension Plan,
assuming (i) retirement at normal retirement age or deferred retirement and
(ii) current salary levels, are as follows: Mr. Ueltschi, $67,300; Mr.
Whitman, $43,900; Mr. Motschwiller, $59,200; Mr. Waugh, $54,000 and Mr.
Gulasy, $39,900.
Severance Agreements. On December 2, 1994, the Compensation Committee of
the Board of Directors authorized the entering into severance agreements with
each individual named in the Summary Compensation Table (each such person
being an executive officer) except for Mr. Ueltschi. The Company believes that
these severance agreements are in the best interest of the shareholders in
order to insure that, in case of a change in control event, the Company will
have continuity of management and independent judgment will be exercised by
the executives to maximize shareholder value. The severance agreements
continue through December 31, 1996 and are automatically extended in one-year
increments unless the Company has given prior notice of termination to the
executive.
In the event, that following a 'Change in Control', employment is
terminated by the executive officer for 'Good Reason' or the employee is
involuntarily terminated by the Company other than for 'Cause' (as those terms
are defined in the severance agreements), the severance agreements generally
provide for: (a) a lump sum cash payment equal to the sum of three times (i)
the annual base salary and (ii) the amount of bonus compensation for the year
preceding the year in which the date of termination occurs; (b) a cash payment
for each outstanding option equal to the amount of the higher of the closing
price for shares of the Company's Common Stock or the price actually paid in
connection with any Change in Control over the per share exercise price of
each such option held by the executive officer (whether or not then fully
exercisable), times the number of shares covered by each such option; (c) a
lapse of restrictions on all shares of restricted stock; and (d) life,
disability, and health insurance benefits for a period of 36 months. Benefits
under the severance agreements are limited to the extent they would result in
the disallowance of a deduction to the Company under the Parachute payment
provisions of Section 280G of the Internal Revenue Code.
10
Five-Year Stock Performance Graph
The annual changes for the five-year period shown in the following graph
are based on the assumption that $100 had been invested in the Company's
Common Stock and each index on December 31, 1990, and that all dividends were
reinvested. The total cumulative dollar return shown on the graph represents
the value (to the nearest dollar) that such investments would have had on
December 31, 1995.
The stock performance graph in the proxy statement uses the following
indexes, return values and coordinates:
[GRAPH]
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company, on the recommendation of the Audit
Committee, has appointed Price Waterhouse LLP ('Price Waterhouse') as
independent accountants for the Company for the year ending December 31, 1996,
subject to ratification by the shareholders of the Company. Price Waterhouse
has served as independent accountants for the Company since 1955. The Board of
Directors believes that the retention of the services of Price Waterhouse is
in the best interests of the Company's shareholders and recommends that
shareholders approve their appointment. Representatives of Price Waterhouse
are expected to attend the Meeting and will have an opportunity to make a
statement, if they desire to do so, and to respond to questions from the
Company's shareholders.
A majority of the votes cast at the Meeting is required to ratify the
appointment of Price Waterhouse as independent accountants for the Company for
the year ending December 31, 1996. Under applicable New York law, in
determining whether this proposal has received the requisite number of
affirmative votes, abstentions and broker non-votes will be disregarded and
will have no effect on the outcome of the vote. Unless a contrary instruction
is indicated, a properly executed and returned proxy will be voted FOR the
ratification and approval of Price Waterhouse as independent accountants for
the Company for the year ending December 31, 1996.
11
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires that the Company's officers and
directors, and persons who own more than 10 percent of the Company's Common
Stock, file reports of ownership and changes in ownership on Forms 3, 4 and 5
with the SEC and The New York Stock Exchange, Inc. Officers, directors and
greater than 10 percent shareholders are also required by rules of the SEC to
furnish the Company with copies of all Forms 3, 4 and 5 which they file.
Based solely on the Company's review of the copies of such reports it has
received, and written representations from certain reporting persons that they
were not required to file a Form 5 for 1995, the Company believes that all
officers, directors and greater than 10% shareholders complied with all filing
requirements applicable to them with respect to transactions in the Company's
Common Stock during 1995.
SHAREHOLDER PROPOSALS
Under the rules of the SEC, proposals which shareholders of the Company
intend to present at next year's annual meeting of shareholders must be
received, in order to be considered at such meeting, by the Secretary of the
Company, at the Company's principal executive offices located at Marine Air
Terminal, La Guardia Airport, Flushing, New York 11371, no later than the
close of business on November 30, 1996. Shareholder proposals received after
that date will not be included in the Company's proxy statement or form of
proxy prepared in connection with such meeting.
ADDITIONAL INFORMATION
The Company's 1995 Annual Report to Shareholders, which contains financial
statements for the year ended December 31, 1995 and other information
concerning the operations of the Company, is enclosed with this proxy
statement, but is not to be regarded as proxy soliciting materials.
Upon written request, the Company will provide, without charge to each
shareholder of the Company, a copy of the Company's Annual Report on Form 10-K
for its prior fiscal year, as filed with the SEC. Address all such requests
to: Treasurer, FlightSafety International, Inc., Marine Air Terminal, La
Guardia Airport, Flushing, New York 11371.
By Order of the Board of Directors,
PETER P. MULLEN
Secretary
Flushing, New York
March 22, 1996
12
PROXY
FLIGHTSAFETY INTERNATIONAL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 1996 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints ALBERT L. UELTSCHI and PETER P. MULLEN as
Proxies, each with power to appoint his substitute, and hereby authorizes
them, or either one of them, to represent and to vote, as designated on the
reverse, all of the shares of Common Stock, par value $.10 per share, of
FlightSafety International, Inc., held of record by the undersigned on March
11, 1996, at the Annual Meeting of Shareholders on April 24, 1996 and any
adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2 and 3.
1. ELECTION OF DIRECTORS PLEASE MARK VOTES
FLIGHTSAFETY INTERNATIONAL, INC.
George B. Beitzel, Edward E. Hood, Jr., Charles R. Longsworth,
John A. Morgan, Albert L. Ueltschi and Bruce N. Whitman
INSTRUCTIONS:
To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
Withhold
Authority
For All To Vote For
Nominees All Nominees
___________ ___________ _____________________ _________________
___________ ___________ _____________________ _________________
(Continued and to be SIGNED on other side)
2. Ratification and approval of the appointment of Price Waterhouse as
independent accountants for the Company for the year ending December 31, 1996.
For Against Abstain
_______ _______ ______
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment or
postponement thereof.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
P
R Dated:_____________________________________________________,1996
O
X Signature:_______________________________________________________
Y Signature, if held jointly:___________________________________________
Note: Please sign exactly as your name appears herein. When shares are
held by joint tenants both should sign. When signing as an attorney,
executor, administrator, trustee, or guardian, please give your full
title as such. If a corporation, please sign in full corporate name
by President or other authorized officer. If a partnership, please
sign in partnership name by authorized person.
