<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
HUDSON GENERAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined.):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid: ____________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ____________
2) Form, Schedule or Registration Statement No.: ____________
3) Filing Party: ____________
4) Date Filed: ____________
<PAGE> 2
LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF
HUDSON GENERAL CORPORATION
Notice is hereby given that the Annual Meeting of Stockholders of Hudson
General Corporation (the "Corporation") will be held at the offices of the
Corporation, 111 Great Neck Road, Great Neck, New York, on November 15, 1996 at
9:30 A.M., local time, for the following purposes:
(1) To elect eight directors to serve in accordance with the by-laws
until the next Annual Meeting of Stockholders and until their
successors are elected and shall duly qualify; and
(2) To consider and act upon such other business as may properly come
before the meeting.
The Board of Directors has fixed the close of business on September 19,
1996 as the record date for the determination of holders of Common Stock
entitled to notice of and to vote at the meeting.
By Order of the Board of Directors,
NOAH E. ROCKOWITZ
Vice President and Secretary
Dated: Great Neck, New York
October 8, 1996
IT IS HOPED THAT YOU CAN PERSONALLY ATTEND THIS MEETING. IF YOU CANNOT
ATTEND, YOU ARE REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED WITHIN THE
UNITED STATES.
<PAGE> 3
HUDSON GENERAL CORPORATION
111 GREAT NECK ROAD
GREAT NECK, NEW YORK 11021
-------------------------
PROXY STATEMENT
-------------------------
This Proxy Statement is furnished to stockholders of Hudson General
Corporation (the "Corporation") in connection with the solicitation of proxies
for the Annual Meeting of Stockholders of the Corporation to be held on November
15, 1996, at the time and place and for the purposes set forth in the
accompanying Notice of Annual Meeting, and at any adjournments or postponements
thereof. A form of proxy for this meeting is enclosed herewith. It is expected
that this Proxy Statement and the enclosed form of proxy will be first mailed to
the stockholders on or about October 8, 1996.
The solicitation of the proxy enclosed with this Proxy Statement is made by
and on behalf of the Board of Directors of the Corporation. The costs of this
solicitation will be paid by the Corporation. Such costs include preparation,
printing and mailing of the Notice of Annual Meeting and form of proxy and this
Proxy Statement. The solicitation will be conducted principally by mail,
although directors, officers and regular employees of the Corporation and its
subsidiaries, without additional compensation, may solicit proxies personally or
by telephone and telegram. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries for proxy material to be sent to
their principals, and the Corporation will reimburse such persons for their
expenses in so doing.
The shares represented by all valid proxies in the enclosed form will be
voted if received in time for the meeting and will be voted in accordance with
the directions, if any, given in the proxy. If no directions are given, the
proxy will be voted FOR the election of all the persons named herein as nominees
for director of the Corporation. A proxy is revocable at any time prior to being
voted by written notice to the Secretary of the Corporation, by submission of
another proxy bearing a later date, or by voting in person at the meeting. The
mere presence at the meeting of a person appointing a proxy does not revoke the
appointment.
The Corporation had outstanding on September 19, 1996, the record date for
the meeting, 1,968,760 shares of Common Stock, each of which is entitled to one
vote on each matter to be voted on at the meeting. The holders of a majority of
the shares entitled to vote at the meeting must be present in person or
represented by proxy in order to constitute a quorum for the transaction of
business at the meeting. Pursuant to the Corporation's by-laws, when a quorum is
present, the affirmative vote of the holders of a majority of the shares
entitled to vote and represented at the meeting is required for the election of
directors. Abstentions and broker non-votes, if any, will be included for
purposes of determining a quorum, and will have the same effect as a vote to
withhold authority in the election of directors.
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<PAGE> 4
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of September 19, 1996 (except as
otherwise indicated in note (c) to the table), the stockholdings of the only
stockholders of the Corporation owning of record or known by the Corporation to
own beneficially more than 5% of the Corporation's Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
-------------------------------
SOLE VOTING SHARED VOTING
AND AND PERCENTAGE OF
NAME AND ADDRESS OF INVESTMENT INVESTMENT OUTSTANDING
BENEFICIAL OWNER POWER POWER SHARES
- ---------------------------------------------------- ----------- ------------- -------------
<S> <C> <C> <C>
Jay B. Langner...................................... 131,258(a) -- 6.6%(a)
111 Great Neck Road
Great Neck, New York 11021
Richard D. Segal.................................... 32,572 98,321(b) 6.6%
707 Westchester Avenue
White Plains, New York 10604
GAMCO Investors, Inc./
Gabelli Funds, Inc./
Gabelli International Limited/
Gabelli International II Limited/
Gabelli Performance Partnership L.P./
Gabelli Asset Management Company International
Advisory Services Ltd./
Mario J. Gabelli(c)............................... 833,143(d) -- 42.3%
One Corporate Center
Rye, New York 10580
</TABLE>
- ---------------
(a) Includes 10,000 shares issuable upon the exercise of presently exercisable
options (see "Options") . The percentage of outstanding shares has been
calculated as though such options had been exercised.
(b) Consists of (i) 27,590 shares owned by a partnership of which Mr. Segal is
the managing partner, (ii) 37,321 shares owned by a partnership of which
Mr. Segal is a co-trustee of certain of the partners thereof, (iii) 23,810
shares owned by members of Mr. Segal's family, as to which he is attorney
in fact, and (iv) 9,600 shares owned by a trust of which he is a
co-trustee. Mr. Segal disclaims beneficial ownership, for purposes of
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, of all
shares discussed in this footnote.
(c) The holdings listed are as set forth in the amendment to the Schedule 13D
filed jointly by GAMCO Investors, Inc./Gabelli Funds, Inc./Gabelli
International Limited/Gabelli International II Limited/Gabelli Performance
Partnership L.P./Gabelli Asset Management Company International Advisory
Services Ltd./Mario J. Gabelli dated September 10, 1996.
(d) Voting power is shared as to 151,300 of these shares. Also, GAMCO
Investors, Inc. does not have authority to vote 65,284 of the shares held
by it.
3
<PAGE> 5
ITEM 1
ELECTION OF DIRECTORS
The by-laws of the Corporation provide for a Board of Directors of not less
than three directors, as may be fixed by resolution of the Board of Directors or
stockholders. The Board of Directors, by resolution, has fixed the number of
directors, effective at the 1996 Annual Meeting of Stockholders, at eight. All
nominees, except Messrs. Pollack and Rubin, currently are directors of the
Corporation. It is the intention of the persons named in the enclosed proxy,
unless otherwise instructed, to vote shares covered by valid proxies in favor of
the election to the Board of Directors of the eight persons named in the
following table. Each director will be elected to serve until the next Annual
Meeting of Stockholders and until his successor is elected and shall duly
qualify. If any nominee at the time of election is unavailable to serve, it is
intended that the persons named in the proxy, or their substitutes, will vote
for an alternative nominee who will be designated by the Board. However, the
Board has no reason to anticipate that any of the designated nominees will not
be candidates.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
POSITION WITH THE CORPORATION, YEAR FIRST
IF ANY, PRINCIPAL OCCUPATION AND BECAME A
NAME OTHER BUSINESS AFFILIATIONS DIRECTOR AGE
- ------------------------ ------------------------------------------------------ ---------- ---
<S> <C> <C> <C>
Milton H. Dresner....... Developer, builder and private investor for more than 1989 70
the past five years. Director of Avatar Holdings,
Inc., Childtime Child Care and InterAction Media Corp.
Jay B. Langner.......... Chairman of the Board of Directors since 1977. Chief 1961 66
Executive Officer of the Corporation since 1989, and
President from 1961 through 1979 and 1989 to September
1996.
Paul R. Pollack......... Executive Vice President and Chief Operating Officer -- 54
of the Corporation since 1990, and President of its
subsidiary, Hudson General LLC, since September 1996.
Senior Vice President of the Corporation from 1984 to
1990.
Edward J. Rosenthal..... Vice Chairman of Cramer Rosenthal McGlynn, Inc., 1976 62
investment managers. Director of Astro Communications
Corp. and Glenayre Technologies Inc.
Michael Rubin........... President of the Corporation since September 1996. -- 49
Executive Vice President and Chief Financial Officer
of the Corporation from 1990 to September 1996, Vice
President-Finance of the Corporation from 1985 to
1990, and Treasurer since 1983.
Hans H. Sammer.......... Consultant. Retired Director, Investment Banking Group 1978 62
of Prudential Securities Incorporated.
Richard D. Segal........ Chairman and Chief Executive Officer of Seavest Inc., 1981 42
a private investment company. Director of Penn Traffic
Co.
Stanley S. Shuman....... A Managing Director and Executive Vice President of 1985 61
Allen & Company Incorporated, investment bankers.
Director of Bayou Steel Corporation, News Corporation
Limited and Tower Air, Inc.
</TABLE>
4
<PAGE> 6
The Board of Directors held eight meetings during the fiscal year ended
June 30, 1996.
The Board has established four standing committees to assist it in the
discharge of its responsibilities, as follows:
The Executive Committee is authorized, during the intervals between Board
meetings, to exercise, to the extent permitted by law, all of the powers of
the Board in the management of the affairs of the Corporation. The
Executive Committee, which consists of Messrs. Langner, Sammer and Segal,
met three times during fiscal 1996.
The Audit Committee consists of Messrs. Dresner, Rosenthal and Sammer, none
of whom is an employee of the Corporation. Its primary responsibilities are
to oversee the Corporation's system of internal accounting controls and the
financial reporting process, review the internal audit function, recommend
the appointment of the Corporation's independent auditors, and review all
audit reports. In this connection, the Audit Committee meets with the
Corporation's independent auditors and management to review the scope of
the annual audit and the policies relating to internal auditing procedures
and controls, and provides general oversight with respect to the accounting
principles employed in the Corporation's financial reporting. The Audit
Committee met six times during fiscal 1996.
The Compensation Committee consists of Messrs. Rosenthal, Sammer, Segal and
Shuman. Its functions include approval of the compensation of employees of
the Corporation whose compensation exceeds a specified amount and
determination of individual awards under the Corporation's Executive
Incentive Program. See "Compensation Committee Report on Executive
Compensation". This Committee met twice during fiscal 1996.
The Stock Option and Appreciation Rights Committee consists of Messrs.
Rosenthal, Sammer, Segal and Shuman. The Committee administers the
Corporation's Stock Option and Stock Appreciation Rights Plans. This
Committee met three times during fiscal 1996.
The Corporation does not have a Nominating Committee.
The Board establishes such other committees as it determines may be needed
to assist it in the discharge of its responsibilities.
During fiscal 1996, all directors attended at least 75% of the aggregate
number of meetings of the Board and committees of which they were members.
COMPENSATION OF DIRECTORS
Directors who are employees of the Corporation receive no additional
compensation for service on the Board of Directors or any committees thereof.
Members of the Board who are not employees of the Corporation receive an annual
fee of $20,000, with the exception of Mr. Sammer, who is Chairman of the Audit,
Compensation and Stock Option and Appreciation Rights Committees and receives an
annual fee of $24,000, and Mr. Shuman, who receives an annual fee of $30,000.
Directors do not receive any amounts in
5
<PAGE> 7
addition to the foregoing for service on committees of the Board. Directors are
entitled to be reimbursed for reasonable expenses incurred by them in connection
with their service on the Board or any committee thereof.
OWNERSHIP OF EQUITY SECURITIES
The following table sets forth information regarding the shares of the
Corporation's Common Stock owned beneficially, directly or indirectly, as of
September 19, 1996, by the directors and nominees for director of the
Corporation, the Corporation's Chief Executive Officer and the four other most
highly compensated executive officers of the Corporation, and all directors and
executive officers as a group. Except as otherwise indicated in the notes to the
table, the persons listed below have sole voting and investment power with
respect to such shares.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OF OUTSTANDING
NAME COMMON STOCK SHARES
- ------------------------------------------------------------------ ------------ -------------
<S> <C> <C>
Milton H. Dresner................................................. 69,000(1) 3.5%
Jay B. Langner.................................................... 131,258(2) 6.6%
Edward J. Rosenthal............................................... 7,200(3) .4%
Hans H. Sammer.................................................... 1,000 .1%
Richard D. Segal.................................................. 130,893(4) 6.6%
Stanley S. Shuman................................................. -- --
Paul R. Pollack................................................... 10,140(2) .5%
Michael Rubin..................................................... 8,430(2) .4%
Raymond J. Rieder................................................. 7,400(2) .4%
Fernando DiBenedetto.............................................. 3,010(2) .2%
Directors and executive officers as a group (12 persons).......... 372,131(2) 18.5%
</TABLE>
- ---------------
(1) These shares are held by a revocable living trust established by Mr. Dresner
of which he is also the trustee.
(2) Includes shares issuable upon the exercise of the stock options held by such
individual(s), all of which are presently exercisable, as follows: Mr.
Langner 10,000; Mr. Pollack 8,200; Mr. Rubin 8,200; Mr. Rieder 7,400; Mr.
DiBenedetto 3,000; and all directors and executive officers as a group
40,600. The percentage of outstanding shares (i) for each individual has
been calculated as though only such options held by the individual had been
exercised, and (ii) for the group has been calculated as though all such
options had been exercised.
(3) Consists of 4,200 shares owned by a partnership of which Mr. Rosenthal is
managing general partner and 3,000 shares owned by a corporation controlled
by Mr. Rosenthal. Mr. Rosenthal has shared voting and investment power with
respect to all such shares.
(4) Includes 98,321 shares as to which Mr. Segal disclaims beneficial ownership.
See "Principal Stockholders".
6
<PAGE> 8
EXECUTIVE COMPENSATION
The following table sets forth, for the Corporation's last three fiscal
years, the compensation of the persons who were at June 30, 1996 the
Corporation's Chief Executive Officer and the four other most highly compensated
executive officers of the Corporation:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
FISCAL YEAR ------------------- ALL OTHER
NAME AND ENDED BONUS COMPENSATION
PRINCIPAL POSITION JUNE 30 SALARY (1) (2)
- ------------------------------------------------- ----------- -------- -------- ---------------
<S> <C> <C> <C> <C>
Jay B. Langner (3)............................... 1996 $450,000 $250,000 $30,000
Chairman, President and 1995 450,000 -- 30,000
Chief Executive Officer 1994 350,000 -- 30,000
Paul R. Pollack.................................. 1996 218,000 300,000 15,118
Executive Vice President 1995 218,000 180,000 17,823
and Chief Operating Officer 1994 210,000 200,000 19,894
Michael Rubin (3)................................ 1996 218,000 300,000 10,769
Executive Vice President, Treasurer 1995 218,000 180,000 12,644
and Chief Financial Officer 1994 210,000 200,000 14,145
Raymond J. Rieder................................ 1996 183,500 225,000 8,841
Senior Vice President and 1995 183,500 140,000 10,392
Chief Marketing Officer 1994 178,500 150,000 9,893
Fernando DiBenedetto (4)......................... 1996 152,500 180,000 8,834
Senior Vice President -- Operations 1995 152,500 120,000 10,408
</TABLE>
- ---------------
(1) Except with respect to Mr. Langner, all amounts shown in this column
represent awards under the Corporation's Executive Incentive Program. Mr.
Langner does not participate in this Program. See "Compensation Committee
Report on Executive Compensation".
(2) All amounts shown in this column were contributed by the Corporation and
allocated to the accounts of the persons named in the table pursuant to the
Corporation's 401(k) Profit Sharing Plan.
(3) Effective September 13, 1996, Mr. Rubin became President of the Corporation.
Mr. Langner continues to serve as Chairman of the Board and Chief Executive
Officer.
(4) Mr. DiBenedetto became an executive officer in July 1994. The table sets
forth his compensation for the Corporation's full 1995 and 1996 fiscal
years.
OPTIONS AND STOCK APPRECIATION RIGHTS
The Corporation's Stock Option and Stock Appreciation Rights Plans expired
in 1991, and therefore no grants of stock options or stock appreciation rights
("SAR's") were made during the fiscal year ended June 30, 1996.
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<PAGE> 9
The following table sets forth information with respect to the executive
officers named in the Summary Compensation Table concerning the exercise of
options and SAR's during the fiscal year ended June 30, 1996, and unexercised
options and SAR's held as of June 30, 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED OPTIONS/SAR'S AT OPTIONS/SAR'S AT
NAME ON EXERCISE(1) VALUE REALIZED FISCAL YEAR-END(2) FISCAL YEAR-END(2)(3)
- -------------------------- --------------- -------------- ------------------ ---------------------
<S> <C> <C> <C> <C>
Jay B. Langner............ -- $-- 10,000 $ 205,850
Paul R. Pollack........... 10,000 168,400 8,200 160,630
Michael Rubin............. 10,000 178,400 8,200 160,630
Raymond J. Rieder......... 10,000 179,650 7,400 145,608
Fernando DiBenedetto...... 5,000 80,204 3,000 56,908
</TABLE>
- ---------------
(1) All exercises by the named individuals were of SAR's for which only cash was
received. The amounts in this column are the number of SAR's that were
exercised.
(2) All options and SAR's held by the named individuals were exercisable at June
30, 1996.
(3) Value is based on the closing market price of the Corporation's Common Stock
on June 28, 1996, which was the last trading day for the American Stock
Exchange in the fiscal year ended June 30, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
reviewing and approving the compensation of employees of the Corporation whose
compensation exceeds a specified level, including all executive officers of the
Corporation. The Compensation Committee is comprised of four directors, none of
whom is an employee of the Corporation. The members of the Compensation
Committee also constitute the full membership of the Stock Option and
Appreciation Rights Committee of the Board of Directors. As discussed below, no
stock options or stock appreciation rights were available to be awarded during
the fiscal year ended June 30, 1996 and, accordingly, this report is submitted
solely by the Compensation Committee.
The goal of the Compensation Committee is to maintain executive
compensation at levels which enable the Corporation to attract and retain highly
qualified executives.
Prior to December 1993 when the Compensation Committee adopted the
Executive Incentive Program discussed below, the annual cash compensation of
executive officers (including Jay B. Langner, the Corporation's Chief Executive
Officer) consisted exclusively of base salary. The sole exception was one
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<PAGE> 10
executive officer employed by the Corporation's Canadian subsidiary who
continues to receive an annual bonus (the "Canadian Officer").
Each of the executive officers (including Mr. Langner) is party to an
employment agreement with the Corporation which permits, but does not require,
increases to base salary, and increases to base salary are considered annually
by the Compensation Committee. The Compensation Committee reviews with Mr.
Langner any proposed salary increases for executive officers other than Mr.
Langner. Salary increases, if any, are generally effective at the start of the
Corporation's fiscal year.
Factors considered by the Compensation Committee in reviewing and approving
the base salary of executive officers (including Mr. Langner) are typically
subjective. The Compensation Committee generally takes into account the
executive's overall performance and contributions to the Corporation, as well as
industry specific and overall economic climates and the profitability of the
Corporation (without reference to any specific performance-related targets),
with no particular weight given to any of such factors. In considering increases
to the base salary of executive officers other than Mr. Langner and the Canadian
Officer for fiscal years ending subsequent to June 30, 1994, the Compensation
Committee has also taken into account the existence of the Executive Incentive
Program (in which Mr. Langner and the Canadian Officer do not participate).
The Compensation Committee does not examine the compensation levels at any
"peer" group of companies in the Corporation's industry group. The Compensation
Committee believes that no such peer group can be identified since almost all
U.S. aviation services companies are either privately owned or are subsidiaries
of much larger corporations having substantial operations in other lines of
business. Thus, neither compensation data of executive officers overseeing the
aviation services operations of those companies, nor the performance data with
respect to such operations, is available to the Compensation Committee.
In setting compensation levels during the past several years, the
Compensation Committee has been particularly mindful of the unpredictability of
the financial condition of the aviation industry, the principal industry to
which the Corporation provides services. As a result, salary increases for the
fiscal year ended June 30, 1995 for executive officers other than Mr. Langner
(whose compensation is discussed below) were designed generally to take into
account the increase in the cost of living, and no increases were granted for
the fiscal years ended June 30, 1994 and June 30, 1996.
Shortly prior to the start of the fiscal year ended June 30, 1994, the
Corporation retained an independent compensation consultant to assist the
Compensation Committee in reviewing the Corporation's compensation policies with
respect to its officers and in identifying measures of performance to be used in
setting their compensation levels. As a result of this review, the Compensation
Committee, in December 1993, adopted the Executive Incentive Program.
The purpose of the Executive Incentive Program is to relate a portion of
executive compensation to corporate performance and thereby motivate executives
to increase the Corporation's profitability. Eight officers of the Corporation
are eligible to participate in the Executive Incentive Program, including all
executive officers named in the Summary Compensation Table except Mr. Langner.
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<PAGE> 11
Under the Executive Incentive Program, a bonus pool is established for each
fiscal year in an amount equal to the excess, if any, of earnings before
interest and taxes of the Corporation's aviation services business over a
specified threshold of return on the Corporation's investment in such business
(the "Bonus Base") multiplied by 15%. The maximum bonus pool for any fiscal year
was originally $1,000,000. In light of the growth of the Corporation and the
increased responsibilities of its executive officers, the maximum bonus pool was
increased to $1,500,000 commencing with the fiscal year ended June 30, 1996. If
the Corporation, on a consolidated basis, is not profitable for a particular
fiscal year, the Board of Directors has the discretion not to pay any bonuses
under the Executive Incentive Program and, instead, to carry over the Bonus Base
to the next fiscal year. If the Bonus Base for any particular fiscal year is
negative, such negative amount must be recouped before there is a bonus pool in
a subsequent fiscal year. In the fiscal year ended June 30, 1996 the Corporation
had record earnings and earnings per share, and the bonus pool was the maximum
permitted under the Executive Incentive Program.
Individual awards under the Executive Incentive Program are determined
subjectively by the Compensation Committee, generally taking into account the
executive's overall performance and contributions to the Corporation.
Mr. Langner's base salary was the same in the fiscal year ended June 30,
1996 as it was in the previous fiscal year, and has been continued at the same
level for the fiscal year ending June 30, 1997. As noted above, Mr. Langner does
not participate in the Executive Incentive Program. In light of (i) Mr.
Langner's major contribution to the successful consummation of the transaction
in which Lufthansa Airport and Ground Services GmbH acquired a 26% interest in
the Corporation's aviation services business, and (ii) the Corporation's
excellent financial performance in the fiscal year ended June 30, 1996, Mr.
Langner was awarded a bonus of $250,000 with respect to such fiscal year.
The Corporation's Stock Option and Stock Appreciation Rights Plans expired
in 1991, and thus no awards could be made from such plans during the fiscal year
ended June 30, 1996. Outstanding stock options and stock appreciation rights
held by the executive officers named in the Summary Compensation Table are set
forth in the table that precedes this report.
Submitted by the Compensation
Committee
Edward J. Rosenthal
Hans H. Sammer
Richard D. Segal
Stanley S. Shuman
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<PAGE> 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Stanley S. Shuman, a director of the Corporation and a member of the
Compensation Committee, is a Managing Director and Executive Vice President of
Allen & Company Incorporated ("Allen & Company"), which has rendered and
continues to render various investment banking services to the Corporation. In
September 1995, the Corporation and Allen & Company reinstated a previous
agreement between them which had expired in January 1994 pursuant to which the
Corporation engaged Allen & Company to render certain investment banking
services. The term of the agreement, as reinstated, extends until March 31,
1997.
In connection with the transaction in which Lufthansa Airport and Ground
Services GmbH ("LAGS") acquired a 26% interest in the Corporation's aviation
services business, Allen & Company was paid a fee for services rendered in
fiscal 1996. If LAGS exercises the option that was granted to it to increase its
interest in the Corporation's aviation services business to a maximum of 49%,
Allen & Company will be entitled to an additional fee.
CERTAIN TRANSACTIONS
During the fiscal year ended June 30, 1996, Michael Rubin, an executive
officer of the Corporation, and another individual were indebted to the joint
venture between the Corporation and Oxford First Corporation for mortgage
financing in connection with the earlier purchase by such individuals of a
parcel in the Kohala Ranch land development project of the joint venture in
Hawaii. The mortgage loan called for interest at the rate of 8% per annum, and
repayment based on a thirty year amortization schedule with a "balloon" payment
of the full remaining balance due at the end of seven years. The maturity date
of this loan was subsequently extended at the same interest rate. The principal
balance of such mortgage loan outstanding at June 30, 1995 was $116,443. During
August 1995, Mr. Rubin paid the full remaining principal balance of such loan.
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<PAGE> 13
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below are a line graph and table comparing the cumulative total
stockholder return on the Corporation's Common Stock with the cumulative total
return of (i) the American Stock Exchange Index ("AMEX Index") and (ii) the
Media General Financial Services Index for Aircraft Manufacturers and Services
(the "Media General Group Index") for the five years commencing June 30, 1991
and ended June 30, 1996. The graph and table assume that $100 was invested on
June 30, 1991, at the closing price, in each of the Corporation's Common Stock,
the AMEX Index and the Media General Group Index, and that all subsequent
dividends were reinvested. This data was furnished by Media General Financial
Services.
<TABLE>
<CAPTION>
Media Gen-
Measurement Period Hudson Gen- eral Group
(Fiscal Year Covered) eral AMEX Index Index
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 64.78 109.95 100.57
1993 59.12 120.21 105.69
1994 77.36 116.04 128.10
1995 105.35 139.63 169.00
1996 185.53 159.88 244.71
</TABLE>
The Media General Group Index includes the Corporation, another company
engaged in aviation services and twenty other companies which are primarily
engaged in the manufacture and/or maintenance of aircraft, aircraft parts,
instruments and engine components.
EMPLOYMENT AGREEMENTS AND SEVERANCE AGREEMENTS
The Corporation has an employment agreement with Mr. Langner (the
"Employment Agreement"), which, as extended, expires on January 31, 2001. Mr.
Langner's annual base salary is $450,000, and the Employment Agreement provides
that such base amount may not be reduced except under certain limited
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circumstances. If Mr. Langner's employment is terminated for any reason except
death, disability or Cause (as defined in the Employment Agreement), or if he
terminates his employment for Good Reason (as defined in the Employment
Agreement), Mr. Langner will receive severance pay in installments at the same
rate as his salary in effect upon his termination for the greater of three years
or the period from the date of termination to January 31, 2001. If termination
is due to Mr. Langner's death, severance payments will be made for twelve
months. Unless Mr. Langner is terminated for Cause, he is also entitled to
continue to participate during the period in which he receives severance
payments in all employee benefit plans for which he was eligible, or to be
provided with substantially similar benefits. If Mr. Langner is terminated and
obtains other employment, his severance pay is subject to mitigation after
twelve months of the severance payment period. In the event of a change in
control of the Corporation (as defined in the Employment Agreement) which occurs
after termination of Mr. Langner's employment by the Corporation other than for
Cause or disability, or by Mr. Langner for Good Reason, and prior to January 31,
2001, Mr. Langner is entitled to receive certain additional amounts under
certain circumstances. If while Mr. Langner is employed there is a change in
control of the Corporation, the Employment Agreement shall terminate, and all
rights and obligations of the Corporation and Mr. Langner with respect to his
employment shall be governed by the terms of his Severance Agreement with the
Corporation, which is described below.
The Corporation has employment agreements (the "Contracts") with Messrs.
Pollack, Rubin, Rieder and DiBenedetto. The Contracts with Messrs. Pollack,
Rubin and Rieder currently extend until December 31, 1998, and the Contract with
Mr. DiBenedetto currently extends until December 31, 1997. The Contracts with
Messrs. Pollack, Rubin and Rieder are subject to extension for additional three
year periods, and the Contract with Mr. DiBenedetto for additional two year
periods, unless on or before the September 30th preceding any then-existing
expiration date, the Corporation notifies the executive that it elects not to so
extend the term. The Contracts provide that the executives shall receive an
annual base salary of not less than their respective salary levels in effect on
the date of the Contracts. If the term of the executive's Contract is not
extended, or if the executive's employment is terminated for any reason except
death, disability or Cause (as defined in the Contracts), or if the executive
terminates his employment for Good Reason (as defined in the Contracts), the
executive will receive severance pay in installments at the same rate as his
salary in effect upon his termination for the greater of twenty-four months
(eighteen months in the case of Mr. DiBenedetto) or the period to the expiration
of his Contract. If termination is due to the executive's death, severance
payments will be made for three months. Unless the executive is terminated for
Cause, he is also entitled to continue to participate during the period in which
he receives severance payments in all employee benefit plans for which he was
eligible, or to be provided with substantially similar benefits. If the
executive is terminated and obtains other employment, his severance pay is
subject to mitigation after twelve months (nine months in the case of Mr.
DiBenedetto). In the event of a change in control of the Corporation (as defined
in the Contracts) after termination of the executive's employment and prior to
the expiration of the Contract, the executive is entitled to receive certain
additional amounts under certain circumstances. If while the executive is
employed there is a change in control of the Corporation, his Contract shall
terminate, and all rights and obligations of the Corporation and the executive
with respect to the executive's employment shall be governed by the terms of his
Severance Agreement with the Corporation described below.
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The Corporation has severance agreements (the "Severance Agreements") with
Messrs. Langner, Pollack, Rubin, Rieder and DiBenedetto pursuant to which
payments will be made to such persons under certain circumstances following a
change in control of the Corporation.
The Severance Agreements provide for a lump sum payment by the Corporation
to each such executive in the event the executive's employment with the
Corporation is terminated other than for death, retirement, disability or Cause
(as defined in the Severance Agreements), or the executive terminates his
employment for Good Reason (as defined in the Severance Agreements), following a
"change in control" of the Corporation (as defined in the Severance Agreements).
Under the Severance Agreements, upon a termination for which a severance
payment is required, an amount will be paid to the executive equal to a
specified multiple of the executive's average Compensation for the five years
prior to termination. "Compensation" is defined to include salary, bonuses and
payments (with certain exceptions) received from the Corporation during a
calendar year or payable with respect to such calendar year but deferred to a
later period.
Upon a termination for which a severance payment is required, the Severance
Agreements also provide for: (i) furnishing the executive for a period of
thirty-six months (twenty-four months in the case of Mr. DiBenedetto) with life,
disability, accident and health insurance benefits substantially similar to
those provided prior to termination (with such benefits permitted to be reduced
to the extent comparable benefits are actually received by the executive during
this period); (ii) a cash payment equal to the excess of the market value on the
date of termination over the option price, multiplied by the number of shares of
stock covered by options granted under the Corporation's Incentive Stock Option
Plan; (iii) a cash payment equal to the excess of the higher of market value on
the date of termination or the highest price paid in connection with the change
in control over the option price, multiplied by the number of shares covered by
any stock option granted under all other stock option plans; (iv) a cash payment
equal to the difference between the market value (as defined in any stock
appreciation rights plan of the Corporation) and the higher of market value on
the date of termination or the highest price paid in connection with the change
in control, multiplied by the number of stock appreciation rights held by the
executive pursuant to any stock appreciation rights plan of the Corporation; and
(v) a payment equal to the present value of the additional retirement benefit
which would have been earned under the Corporation's pension plan or successor
plan thereto if employment had continued until the expiration date of the
Employment Agreement (in the case of Mr. Langner) or of the Contracts of the
other executives. Except in the case of Mr. Langner, any payment or benefit
received or to be received by the executive in connection with a change in
control or the termination of employment will be reduced to the extent that such
payment, together with any other compensation provided by the Corporation, would
not be deductible by the Corporation, or by any other person making such payment
or providing such benefit, pursuant to Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"). With respect to Mr. Langner, under certain
circumstances the Corporation is obligated to pay him an additional amount to
compensate him for the impact of the excise tax imposed by Section 4999 of the
Code.
In conjunction with the 1992 termination of the Corporation's defined
benefit retirement plan and amendment of the Corporation's existing Profit
Sharing Plan (which was renamed the "401(k) Profit Sharing
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Plan"), the Employment Agreement, the Contracts and the Severance Agreements
were amended to provide the executives with the additional benefits to which
they would have been entitled under those plans had such termination and
amendment not occurred.
Based upon the provisions of the Severance Agreements, if the executive
officers having Severance Agreements were to be terminated during the fiscal
year ending June 30, 1997 following a change in control of the Corporation, the
maximum severance payments by the Corporation to them would be approximately
$1,350,000 to Mr. Langner, $1,049,000 to each of Messrs. Pollack and Rubin,
$854,000 to Mr. Rieder, and $465,000 to Mr. DiBenedetto. Such amounts do not
include any potential cash payments in respect of stock options and stock
appreciation rights in the event of a change of control, as described in clauses
(ii), (iii) and (iv) of the second preceding paragraph.
AUDITORS
The auditors of the Corporation's financial statements for the fiscal year
ended June 30, 1996 were KPMG Peat Marwick LLP. No change in this designation is
presently contemplated for the fiscal year ending June 30, 1997. KPMG Peat
Marwick LLP has no financial interest in the Corporation, except in the capacity
of independent public accountants. Representatives of KPMG Peat Marwick LLP are
expected to be present at the meeting, at which time they will be available to
respond to appropriate questions from stockholders and will be given the
opportunity to make a statement if they desire to do so.
GENERAL
ANNUAL REPORT
The Annual Report for the fiscal year ended June 30, 1996 is being mailed
herewith to all stockholders.
NOTICE REQUIREMENTS
The Corporation's by-laws require that there be furnished to the
Corporation written notice with respect to the nomination of a person for
election as a director (other than a person nominated at the direction of the
Board of Directors), as well as the submission of a proposal of business (other
than a proposal submitted at the direction of the Board of Directors), at a
meeting of stockholders. In order for any such nomination or submission to be
proper, the notice must contain certain information concerning the nominating or
proposing stockholder, and the nominee or the proposal, as the case may be, and
in the case of an Annual Meeting be received by the Corporation not less than 60
nor more than 90 days prior to the anniversary date of the immediately preceding
Annual Meeting; provided, however, that in the event that the Annual Meeting is
called for a date that is not within 30 days before or after such anniversary
date, notice by the stockholder to be timely must be received not later than the
close of business on the tenth day following the day on which notice of the date
of the Annual Meeting was mailed or public disclosure of the date of the Annual
Meeting was made, whichever first occurs.
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In addition to the foregoing, in order to be considered for inclusion in
the Corporation's Proxy Statement and form of proxy relating to the Annual
Meeting of Stockholders of the Corporation to be held in 1997, proposals by
stockholders intended to be presented at such Annual Meeting must be received by
the Corporation at the address on Page 2 hereof no later than June 10, 1997.
OTHER MATTERS
The Board does not know of any matters to come before the meeting except
those set forth in the Notice of Annual Meeting, but in the event that other
matters properly come before the meeting, the persons named in the enclosed form
of proxy will vote the shares represented thereby in accordance with their best
judgment on the matter.
By Order of the Board of Directors,
NOAH E. ROCKOWITZ
Vice President and Secretary
October 8, 1996
PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY
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HUDSON GENERAL CORPORATION
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R The undersigned stockholder of HUDSON GENERAL CORPORATION, a Delaware
corporation, hereby appoints JAY B. LANGNER and MICHAEL RUBIN, and each
O of them, attorneys, agents and proxies, with full power of substitution to
each, for and in the name of the undersigned and with all the powers the
X undersigned would possess if personally present, to vote all the shares of
Common Stock of the Corporation which the undersigned is entitled to vote
Y at the Annual Meeting of Stockholders of the Corporation, to be held at
the offices of the Corporation, 111 Great Neck Road, Great Neck, New York,
on November 15, 1996 at 9:30 A.M. and at all adjournments thereof, hereby
revoking any proxy heretofore given. Said proxies are directed to vote as
set forth on the reverse side hereof. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before
the meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF ALL THE DIRECTOR NOMINEES.
____________
(Continued and to be dated and signed on reverse side) |SEE REVERSE |
| SIDE |
|____________|
PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE.
1. ELECTION OF DIRECTORS:
NOMINEES: Milton H. Dresner, Jay B. Langner, Paul R. Pollack, Edward J.
Rosenthal, Michael Rubin, Hans H. Sammer, Richard D. Segal, Stanley S. Shuman
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
- ---------------------------------------
(To withhold authority from any
individual nominee, mark the "FOR"
box above and write that nominee's
name on the line above.)
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEARS HEREON. IF SIGNING AS ATTORNEY,
EXECUTOR, TRUSTEE OR IN OTHER REPRESENTATIVE CAPACITY, SIGN NAME AND INDICATE
TITLE.
RECEIPT IS ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND
ACCOMPANYING PROXY STATEMENT, AND THE ANNUAL REPORT TO STOCKHOLDERS FOR THE
FISCAL YEAR ENDED JUNE 30, 1996.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
SIGNATURE: DATE:
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SIGNATURE: DATE:
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