<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
FLIGHT INTERNATIONAL GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(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
September 15, 1997
Dear Shareholder:
You are cordially invited to attend the Company's Annual Meeting of
Shareholders to be held on Tuesday, October 21, 1997, at 11:00 A.M., local time,
at the Company's offices at Newport News/Williamsburg International Airport,
Newport News, Virginia.
As set forth in the formal Notice of Meeting and in the accompanying
Proxy Statement, we are asking you to elect directors and to ratify the
appointment of BDO Seidman as the independent auditors of the Company.
The Board of Directors has approved the proposals and believes they are
in the best interests of all of the Company's shareholders. We urge you to read
the accompanying Proxy Statement carefully. At the Meeting, the Board of
Directors will also report on the affairs of the Company, including its second
full fiscal year of operations since its emergence from bankruptcy on December
27, 1994. After the formal part of the meeting we will have a discussion period
for questions and comments of general interest to shareholders.
We look forward to greeting personally those shareholders who are able
to attend the meeting; however, whether or not you plan to attend the meeting,
it is important that your shares be represented. Accordingly, you are requested
to sign, date and mail the enclosed proxy, at your earliest convenience, in the
envelope provided.
Thank you for your cooperation.
Very truly yours,
David E. Sandlin
Chairman of the Board
<PAGE> 3
THE FLIGHT INTERNATIONAL GROUP, INC.
NEWPORT NEWS/WILLIAMSBURG INTERNATIONAL AIRPORT
NEWPORT NEWS, VIRGINIA 23602
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of The Flight International Group,
Inc. (the "Company") will be held at the Company's offices at Newport
News/Williamsburg International Airport, Newport News, Virginia, on Tuesday,
October 21, 1997 at 11:00 a.m., or at any adjournment of the meeting, to
consider and vote upon the following matters, as explained more fully in the
accompanying Proxy Statement:
1. To elect the Board of Directors.
2. To ratify the selection of BDO Seidman, independent certified public
accountants, as the Company's independent auditors for the year ending
April 30, 1998.
3. To transact any other business that properly comes before the meeting
or any adjournments or postponements of the meeting.
Only shareholders of record at the close of business on September 10,
1997 are entitled to notice of and to vote at the Annual Meeting. Shareholders
who are unable to attend the Annual Meeting are requested to complete, date and
return the enclosed form of proxy promptly in the envelope provided.
Shareholders who attend the annual meeting may revoke their proxy and
vote their shares in person.
Ann P. Campbell
Secretary
Newport News, Virginia, U.S.A.
September 15, 1997
<PAGE> 4
THE FLIGHT INTERNATIONAL GROUP, INC.
NEWPORT NEWS/WILLIAMSBURG INTERNATIONAL AIRPORT
NEWPORT NEWS, VIRGINIA 23602
PROXY STATEMENT
GENERAL INFORMATION
PROXY SOLICITATION
This Proxy Statement is mailed to holders ("Shareholders") of shares of
the New Common Stock, par value $.01 per share ("Common Stock") of The Flight
International Group, Inc., a Georgia corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Shareholders to be held on October 21, 1997, at
11:00 A.M. local time, at Newport News/Williamsburg International Airport,
Newport News, Virginia, and at any adjournments of the meeting (the "Annual
Meeting").
At the Annual Meeting the Shareholders will vote upon: (1) the election
of six directors; and (2) the ratification of the selection of BDO Seidman,
independent certified public accountants, as the Company's independent auditors
for the year ending April 30, 1998. Management currently is not aware of any
other matters which will come before the Annual Meeting. If any other matters
properly come before the Annual Meeting, the persons designated as proxies
intend to vote in accordance with their judgment on such matters.
Proxies for use at the Annual Meeting are being solicited by the Board
of Directors of the Company. These proxy materials are first being mailed to
Shareholders on or about September 15, 1997. Proxies will be solicited primarily
by mail. Certain officers, directors, employees and agents of the Company, none
of whom will receive additional compensation for such efforts, may solicit
proxies by telephone, facsimile, electronic mail or other personal contact. The
Company will bear the cost of soliciting proxies, including postage, printing
and handling, and will reimburse the reasonable expenses of brokerage firms and
others for forwarding material to beneficial owners of shares of Common Stock.
Proposals of Shareholders intended to be presented at the Company's
1998 Annual Meeting must be received at the Company's offices at Newport
News/Williamsburg International Airport, Newport News, VA 23602, Attention: Ann
P. Campbell, Corporate Secretary, no later than July 1, 1998, to be considered
for inclusion in the proxy statement and form of proxy for that meeting.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting and a return envelope for
the proxy are
<PAGE> 5
enclosed. Shares represented by duly executed proxies will be voted in
accordance with Shareholders' instructions. If you sign the proxy, but do not
fill in a vote, your shares will be voted in accordance with the Directors'
recommendations. Any proxy may be revoked by a shareholder prior to its exercise
upon written notice to the Secretary of the Company, or by a Shareholder voting
in person at the Annual Meeting.
RECORD DATE AND VOTING RIGHTS
Shareholders of record at the close of business on September 10, 1997
(the "Record Date") are entitled to notice of and to vote at the Annual Meeting
and any adjournment(s) thereof. On the Record Date, the Company had outstanding
and entitled to vote at the Annual Meeting 1,013,976 shares of Common Stock.
Shareholders as of the Record Date will be entitled to one vote for each share
held, with no shares having cumulative voting rights. The holders of a majority
of the outstanding shares of Common Stock, present in person or by proxy and
entitled to vote, will constitute a quorum at the Annual Meeting. Shares of
Common Stock are counted for quorum purposes if they are represented for any
purpose at the Annual Meeting other than solely to object to holding the Annual
Meeting or transacting business at the Annual Meeting. Assuming a quorum is
present, for the election of directors a plurality of the shares voting must
vote in the affirmative. The approval of any other matter coming before the
Annual Meeting (including Proposal 2) requires that a majority of the shares
voting must vote in the affirmative. Abstentions and broker non-votes are
neither counted for purposes of determining the number of affirmative votes
required for approval of proposals nor voted for or against matters presented
for Shareholder consideration. Consequently, so long as a quorum is present,
abstentions and broker non-votes have no effect on the outcome of any vote.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of August 15, 1997,
regarding the beneficial ownership of the Company's Common Stock of (i) each
person known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock, (ii) each director of the Company, and (iii) all
directors and officers of the Company as a group. Except as otherwise specified,
the named beneficial owner has sole voting and investment power.
- 2 -
<PAGE> 6
<TABLE>
<CAPTION>
Name and Amount and
Address of Nature of
Beneficial Beneficial
Owner Ownership Percent of Class
- ----- --------- ----------------
<S> <C> <C>
David E. Sandlin 205,000 20.22%
c/o The Flight International Group, Inc.
Newport News/Williamsburg
International Airport
Newport News, Virginia 23602
Wayne M. Richmon 55,000 5.42%
c/o The Flight International Group, Inc.
Newport News/Williamsburg
International Airport
Newport News, Virginia 23602
David Sharp 1 *
c/o The Flight International Group, Inc.
Newport News/Williamsburg
International Airport
Newport News, Virginia 23602
Gary D. Reinhart - 0 - ---
c/o The Flight International Group, Inc.
Newport News/Williamsburg
International Airport
Newport News, Virginia 23602
Ann P. Campbell - 0 - ---
c/o The Flight International Group, Inc.
Newport News/Williamsburg
International Airport
Newport News, Virginia 23602
C. Lofton Fouts, Jr. - 0 - ---
6690 Knollwood Circle
Douglasville, GA 30135
John R. Bone 145,000 14.30%
P.O. Box 217, 3 East Broad St.
Newman, GA 30263
</TABLE>
- 3 -
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C> <C>
James N. Lingan - 0 - ---
2011 Crystal Drive, Suite 300
Arlington, VA 22202
Vice Admiral Richard M. Dunleavy (Ret.) - 0 - ---
2220 Sandpiper Road
Virginia Beach, VA 23456
Flight Partners Limited., L.P. ("FPP") 60,000 5.92%
c/o Lincolnshire Management, Inc.
780 Third Avenue
New York, NY 10017
Attention: Mr. William F. Wolffer, Jr.
Michigan National Bank 103,985 10.26%(1)
2777 Inkster Road
Mail Code 10-60
Farmington Hills, MI 48334-5326
Attention: Otto Wilhelm, Vice President
SouthTrust Bank of Alabama, N.A. 105,435 10.40%(1)
112 N. 20th Street, 3rd Floor
Birmingham, AL 35203
Attention: Mr. Lee Brown, Senior V.P.
First Tennessee National Bank Assn. 54,073 5.33%(1)
Box 84
Memphis, TN 38101
Attention: Gary Rick, Vice President
LeasePlan USA, Inc. 61,341 6.05%(1)
180 Interstate North Parkway, Suite 400
Atlanta, GA 30339
Attention: John Stasiowski, Vice President
ALL DIRECTORS AND
EXECUTIVE OFFICERS
AS A GROUP (8 individuals) 405,001 39.94%
------- ------
</TABLE>
* Represents less than a one percent interest.
- 4 -
<PAGE> 8
(1) Pursuant to the Company's Amended Plan of Reorganization approved with the
U.S. Bankruptcy Court (the "Plan"), 510,000 shares of New Common Stock were
issued to unsecured creditors and certain other claimants of the Chapter 11
Entities, including these shareholders. The Company disputed, however, claims to
approximately 200,000 of such shares to certain creditors. As of the date of
filing of this Annual Report, as indicated above, the Company has resolved all
such disputed claims, subject to final paperwork in one case.
PROPOSAL NUMBER 1
ELECTION OF SIX DIRECTORS
Six directors (constituting the entire Board of Directors) are to be
elected at the Annual Meeting. Unless otherwise specified, the enclosed proxy
will be voted in favor of the persons named below to serve until the next annual
meeting of shareholders and until their successors have been duly elected and
qualified. If any of these nominees becomes unavailable for any reason, or if a
vacancy should occur before the election, the shares represented by the proxy
will be voted for the person, if any, who is designated by the Board of
Directors to replace the nominee or to fill the vacancy on the Board. All
nominees have consented to be named and have indicated their intent to serve if
elected. The Board of Directors has no reason to believe that any of the
nominees will be unable to serve or that any vacancy on the Board of Directors
will occur.
The nominees, their ages, the year in which each became a director and
their positions with the Company are as follows:
<TABLE>
<CAPTION>
Name Age Date of Election Position
- ---- --- ---------------- --------
<S> <C> <C> <C>
David E. Sandlin 53 March 30, 1994 Chairman, President,
Director
Wayne M. Richmon 40 February 13, 1995 Executive Vice
President, Treasurer,
Chief Financial
Officer, Director
C. Lofton Fouts, Jr. 65 February 13, 1995 Director
John R. Bone 46 February 13, 1995 Director
James N. Lingan 49 May 24, 1995 Director
Vice Admiral Richard M. Dunleavy (Ret.) 64 May 24, 1995 Director
</TABLE>
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<PAGE> 9
Each nominee's business experience during the past five years is
described below:
David E. Sandlin. Mr. Sandlin has been Chairman, President and a
Director of the Company and its subsidiaries since March 30, 1994, and was
formerly President of Flight International's Sales and Leasing Division. Mr.
Sandlin has been involved in aircraft marketing and management since 1978. He
has worked in various capacities for Cessna and Dassault and has extensive
experience with Learjets. In 1990 he founded DESCO Aviation Consultants
International ("DESCO") and is an officer, director and 50% shareholder of
Maritime Sales & Leasing, Inc. ("Maritime"), a major lessor of turbine aircraft.
Maritime has leased a total of 16 aircraft to FII. Mr. Sandlin also is a one-
third owner of The Aviation Company ("TAC"), which has leased one aircraft to
the Company. With relation to three particular Learjets owned by the Company, an
arrangement was made in May 1996 whereby Maritime would purchase the aircraft
from the Company, lease them back to the Company and pay off Michigan National
Bank (the entity that financed the aircraft). See Item 12, "Certain
Relationships and Related Transactions."
Wayne M. Richmon. Mr. Richmon, Executive Vice President, Treasurer,
Chief Financial Officer and Director, joined the Company in 1992, and is
responsible for finance, corporate administration, human resources, management
information services and contract administration. Prior to joining the Company,
he served previously as Chief Financial Officer for American Systems Engineering
Company and held management positions at two national "big six" accounting
firms, specializing in government contract and consulting services. Mr. Richmon
is a CPA registered in the State of Virginia.
C. Lofton Fouts, Jr. Mr. Fouts, Director, has been involved in the
aviation industry for 29 years. He wrote the original Piper Flite Center
training syllabus, the first standardized flight program used nationwide in the
general aviation industry. In 1988, Mr. Fouts formed Lofton Fouts & Associates,
Inc., a general aviation consulting business specializing in sales, acquisitions
and mergers of fixed base operations and related aviation businesses.
John R. Bone. Mr. Bone, Director, is President of Global Jet, a
corporate aircraft sales and brokerage firm, and is an officer, director and 50%
shareholder of Maritime. Mr. Bone studied aeronautical engineering at Northrup
University. He is an A&P mechanic, has worked as Chief Pilot for major U.S.
companies and currently is a pilot with a major United States airline. Global
Jet, with Mr. Bone, has been instrumental in developing the fleet of Learjets
for Phoenix Air Group, a competitor of FII. See Item 12, "Certain Relationships
and Related Transactions."
James N. Lingan. Mr. Lingan, Director, is a principal with KPMG Peat
Marwick LLP in Washington, D.C. Mr. Lingan supervises a staff which provides
consulting and advisory services to Department of Defense weapons acquisitions
programs. Mr. Lingan has served more than 10 years in the United States Navy and
is a Captain in the Navy Reserve.
Vice Admiral Richard M. Dunleavy (Ret.). Admiral Dunleavy, Director,
was formerly
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<PAGE> 10
Assistant Chief of Naval Operations (Air Warfare). Admiral Dunleavy joined the
Staff of the Chief of Naval Operations in 1976. From 1978 to 1979 he was
Commanding Officer of the USS Ponchatoula and assumed command of the USS Coral
Sea in 1979. In 1981 he was selected as Commander of U.S. Naval Forces in the
Philippines and later became Commander, Carrier Group FOUR/Commander Striking
Force Atlantic. From 1986 to 1989 he was Commander, Naval Air Force, U.S.
Atlantic Fleet. Admiral Dunleavy's military awards include a Distinguished
Service Medal, three Legions of Merit, eight Air Medals and four Navy
Commendation Medals.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company believes that all required Forms 3 and 4 were furnished to
the registrant during the fiscal year ended April 30, 1997.
BOARD OF DIRECTORS MEETINGS
During the fiscal year ended April 30, 1997, there were three meetings
of the Company's Board of Directors. Mr. Bone did not attend two of these
meetings.
The Board of Directors does not have standing audit, nominating or
compensation committees. Approval of the annual audit is completed by management
and the Board of Directors. Nominations are made by the Board of Directors as a
whole. Any Shareholder interested in nominating a director should see
"Submission of Shareholder Proposals" below. The Board of Directors as a whole
determines the compensation of the Company's executive officers.
EXECUTIVE COMPENSATION
The following table reflects the aggregate cash compensation, including bonuses
and deferred compensation, for services in all capacities to the Company during
the fiscal years ended April 30, 1997, 1996 and 1995 for the Chief Executive
Officer of the Company. No other executive officer of the Company had aggregate
remuneration exceeding $100,000.
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Other
Annual Other
Name,Principal Position Year Salary Comp. Compensation
- ----------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
David E. Sandlin(4) 1997 $110,000(1) (2) $13,700(3)
Chairman, President 1996 $100,000(1) (2) $ 962
1995 $ 89,612(1) (2) $ 308
</TABLE>
- --------------
(1) Pursuant to an Employment Agreement, dated as of January 3, 1995, by
and between the Company and David E. Sandlin, as amended to date (the
"Sandlin Agreement"), Mr. Sandlin
- 7 -
<PAGE> 11
received a salary at an annual rate of $100,000 from the effective date
of such agreement through the end of the fiscal year ended April 30,
1996 and $110,000 during the fiscal year ended April 30, 1997. See
"Employment Agreements," below.
(2) The Sandlin Agreement and Mr. Sandlin's employment arrangement prior to
entering into the Sandlin Agreement provides for certain perquisites,
including an apartment in Newport News, Virginia, travel costs to and
from his home in Atlanta, Georgia and an automobile in Newport News.
The aggregate cost of these items for the fiscal year ended April 30,
1997 was $25,280; for the fiscal year ended April 30, 1996, $25,081;
and for the fiscal year ended April 30, 1995, $22,466.
(3) Mr. Sandlin was issued 10,000 shares of Common Stock in January 1997 as
compensation. The valuation of such shares is an estimate by the
Company. There is no current active trading market in the Company's
securities. See "Employment Agreements," below.
(4) Mr. Sandlin is an officer, director and 50% shareholder of Maritime.
Maritime has leased a total of 16 aircraft to FII. Mr. Sandlin is also
a one-third owner of TAC, which has leased one aircraft to the Company.
With relation to three particular Learjets owned by the Company, an
arrangement was made in May 1996 whereby Maritime would purchase the
aircraft from the Company, lease them back to the Company and pay off
Michigan National Bank (the entity that financed the aircraft). The
Company does not believe that any of the foregoing constituted
compensation to Mr. Sandlin, but makes this disclosure for the sake of
completeness. See "Item 12 - Certain Relationships and Related
Transactions."
THE FLIGHT INTERNATIONAL GROUP, INC. 401(K) PLAN
The Flight International Group, Inc. 401(k) Plan (the "401(k) Plan") is
a defined contribution plan sponsored by the Company. The 401(k) Plan covers all
eligible employees of the Company. Employees become eligible to participate upon
completing one year of service in a job classification not subject to a
collective bargaining agreement. One year of service is defined as any
consecutive 12 month period in which the employee works 1,000 hours.
Participants may elect to have 1% to 15% of their compensation
contributed to the 401(k) Plan, up to the maximum allowed by law. Contributions
to the 401(k) Plan are matched by the Company at the rate of 30% of the first 5%
of employees' contributions. The Board of Directors has approved, effective
August 1, 1997, an increase in the matching to the rate of 40% of the first 5%
of employees' contributions. All employee contributions, rollover contributions
and earnings thereon are 100% vested. Company contributions vest at a rate of
20% per year. The participant may designate his contribution and employer
matching contributions to be invested in any combination of eight funds
maintained by the Trustee. After a participant dies or retires, the participant
or his beneficiary is entitled to receive the entire vested balance of his
account. The Company reserves the right to amend or terminate the 401(k) Plan at
any time. If the 401(k) Plan is terminated, each participant is then vested with
the amount in his account. The Company
- 8 -
<PAGE> 12
contributed $31,921 and $14,470 to the 401(k) Plan in fiscal years 1997 and
1996, respectively.
The 401(k) Plan has applied for, but not yet received, a determination
letter exempting it from Federal income taxes.
DIRECTORS' COMPENSATION
Directors who are not members of management or affiliates thereof
receive $1,000 for each Board meeting attended, plus out-of-pocket expenses
incurred in connection with such attendance. Members of management and
affiliates thereof who are directors do not receive separate compensation
therefor.
EMPLOYMENT AGREEMENTS
The Sandlin Agreement
The Sandlin Agreement continues for a term which expires December 31,
2001, provided that the Sandlin Agreement is renewed automatically from year to
year thereafter unless either party gives notice of termination. Mr. Sandlin's
base salary was previously $100,000 per year (subject to increases by the Board
of Directors taking into consideration certain factors specified therein). On
September 17, 1996, the Board of Directors approved the extension of the Sandlin
Agreement through December 31, 2001, as well as a raise in Mr. Sandlin's base
salary to $110,000, with 10% annual base salary increases. The Board also
approved issuing to Mr. Sandlin, as compensation, 10,000 shares of Common Stock,
which were issued in January 1997.
Mr. Sandlin is reimbursed for all necessary and reasonable expenses
incurred in performing under the Sandlin Agreement and certain other expenses
specified therein (including without limitation for the cost of an apartment and
automobile for his use in Newport News, Virginia and his travel expenses to and
from his home in Atlanta, Georgia and Newport News). He is also entitled to
participate in any benefit programs which the Company may establish.
The Company may terminate the Sandlin Agreement for "cause" (as defined
therein), in the event of the death or disability of Mr. Sandlin or at any time
after delivery to Mr. Sandlin of a written notice of termination. Mr. Sandlin
may terminate the Sandlin Agreement on sixty (60) days written notice for, among
other things, a reduction in his base salary below that in existence upon
signing (or other material breach by the Company), the relocation of the
Company's offices and the assignment of duties inconsistent with his position or
material adverse alteration in the nature or status of his responsibilities or
conditions of employment (including without limitation material reductions in
vacation or material increase in overnight travel obligations not reasonably
required).
In the event that the Sandlin Agreement is terminated by the Company
for cause or in the event of death or disability, or in the event Mr. Sandlin
terminates the Sandlin Agreement other than in connection with a change in
control, Mr. Sandlin receives his salary, expense reimbursements and
- 9 -
<PAGE> 13
other benefits through the date of termination, in addition to any applicable
insurance benefits.
In the event of a termination by the Company not for cause, death or
disability, or in the event Mr. Sandlin terminates the Sandlin Agreement in
connection with a change in control, Mr. Sandlin receives the amounts described
above plus a lump sum severance payment equal to the sum total of all base
salary due to him for the remainder of his agreement, at the rate in effect at
the time notice of termination is given. In this circumstance, the Company, for
one year after termination, also will provide Mr. Sandlin with life and health
insurance benefits substantially similar to those he was receiving immediately
prior to the notice of termination. A change in control is deemed to have
occurred in the event of a sale of the Company or merger of the Company with
another business pursuant to which any person or entity other than certain
specified entities (these are Maritime, Global Jet, Phoenix Air Group and DESCO,
Aviation Consultants) become beneficial owners of capital stock of the Company.
The Sandlin Agreement prohibits Mr. Sandlin, during the term of the
Sandlin Agreement and for one year thereafter, from serving as an employee,
owner, partner, agent, director, officer, consultant or shareholder (except
ownership of 5% or less of most public companies) of a business which is
materially in competition with the business of the Company, but this provision
can be modified by formal resolution of at least 75% of the Board of Directors
(excluding Mr. Sandlin). The Company agrees to indemnify Mr. Sandlin against
reasonable expenses, liabilities and losses incurred or suffered by him in
connection with his service to the Company.
Employment Agreement with Wayne M. Richmon
The Company also has entered into an Employment Agreement with Wayne M.
Richmon, its Executive Vice President, Treasurer and Chief Financial Officer,
dated as of January 3, 1995 (the "Richmon Agreement"). The Richmon Agreement
continues for a term which expires December 31, 1997, provided that the Richmon
Agreement is renewed automatically from year to year thereafter unless either
party gives notice of termination. Mr. Richmon's base salary was previously
$80,000 per year (subject to increases by the Board of Directors taking into
consideration certain factors specified therein). On September 17, 1996, the
Board of Directors approved the extension of the Richmon Agreement through
December 31, 1997, as well as a raise in Mr. Richmon's base salary to $88,000.
In the event of automatic renewal, Mr. Richmon's base salary will increase 10%
per annum. The Board also approved issuing to Mr. Richmon, as compensation,
5,000 shares of Common Stock, which were issued in January 1997.
Mr. Richmon is reimbursed for all necessary and reasonable expenses
incurred in performing under the Richmon Agreement and certain other expenses
specified therein. He is also entitled to participate in any benefit programs
which the Company may establish.
The Company may terminate the Richmon Agreement for "cause" (as defined
therein), in the event of the death or disability of Mr. Richmon or at any time
after delivery to Mr. Richmon of a written notice of termination. Mr. Richmon
may terminate the Richmon Agreement on sixty (60)
- 10 -
<PAGE> 14
days written notice for, among other things, a reduction in his base salary
below $88,000 (or other material breach by the Company), the relocation of the
Company's offices and the assignment of duties inconsistent with his position or
material adverse alteration in the nature or status of his responsibilities or
conditions of employment.
In the event that the Richmon Agreement is terminated by the Company
for cause or in the event of death or disability, or in the event Mr. Richmon
terminates the Richmon Agreement other than in connection with a change in
control, Mr. Richmon receives his salary, expense reimbursements and other
benefits through the date of termination, in addition to any applicable
insurance benefits.
In the event of a termination by the Company not for cause, death or
disability, or in the event Mr. Richmon terminates the Richmon Agreement in
connection with a change in control, Mr. Richmon receives the amounts described
above plus a lump sum severance payment equal to 100% of his annual base salary
at the rate in effect at the time notice of termination is given. In this
circumstance, the Company, for one year after termination, also will provide Mr.
Richmon with life and health insurance benefits substantially similar to those
he was receiving immediately prior to the notice of termination. A change in
control is deemed to have occurred in the event of a sale of the Company or
merger of the Company with another business pursuant to which any person or
entity becomes beneficial owner of capital stock of the Company.
The Richmon Agreement prohibits Mr. Richmon, during the term of the
Richmon Agreement and for one year thereafter, from serving as an employee,
owner, partner, agent, director, officer, consultant or shareholder (except
ownership of 5% or less of most public companies) of a business which is
materially in competition with the business of the Company. The Company agrees
to indemnify Mr. Richmon against reasonable expenses, liabilities and losses
incurred or suffered by him in connection with his service to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Sandlin is an officer, director and 50% shareholder of Maritime, a
major lessor of turbine aircraft. Maritime has leased a total of 16 aircraft to
FII at a total cost to FII of $2,300,000 through October 1999. The Company
believes the financial and other arrangements between FII and Maritime are
reasonable and fair and similar to arrangements which would have been made in an
arm's length transaction between FII and an unaffiliated third party. The
Company does not believe that Mr. Sandlin's relationship with Maritime
materially interferes with his ability to fully perform his obligations to the
Company as a director, officer and employee.
Mr. Sandlin is also a one-third owner of TAC, which has leased one Casa
235 aircraft to the Company. In anticipation of a project to send Casa 235
aircraft to Bahrain, the Company sought to lease a plane from TAC. In
expectation of this lease, TAC purchased the aircraft intended for the lease.
Thereafter, this project was eliminated due to DOD budget cutting. However, the
aircraft has been leased to the Company. As of April 30, 1997, the Company had
not found a full time use for
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<PAGE> 15
the aircraft and this situation had been causing harm to its cash flow. On April
30, 1996, the lease was modified from $60,000 per month to $500 per hour flown.
This substantially reduced the cost of carrying this aircraft, although certain
other significant expenses, such as insurance and other maintenance, continue.
The Company believes, however, that the financial and other arrangements between
FII and TAC are reasonable and fair and similar to arrangements which would have
been made in an arm's length transaction between FII and an unaffiliated third
party.
In an effort to alleviate the Company's cash flow problems, the
following plan involving three Company owned Learjets which were financed by
Michigan National Bank ("MNB") was approved by the Company's Board of Directors
in March 1996. The Company's monthly payment to MNB on the aircraft was $47,000.
The plan provided that Maritime purchase the aircraft, repay all indebtedness to
MNB, and then lease the aircraft back to the Company at a monthly rate of
$53,000. The proceeds from the sale were distributed as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Sale Price of Aircraft $2,900,000
Payoff of MNB Debt (1,850,000)
-----------
Proceeds to the Company $1,050,000
</TABLE>
In addition, an engine also financed by MNB (worth approximately
$400,000) was retained by the Company. The plan relieved the Company of its
indebtedness to MNB, allowed it to receive an additional $1,050,000 and pay only
$6,000 per month more for the lease than it was paying to service the debt.
Mr. Bone is an officer, director and 50% shareholder of Maritime. In
addition, Mr. Bone is the sole shareholder, director and officer of Global Jet
("Global Jet"), which, with Mr. Bone, has been instrumental in developing the
fleet of Learjets for Phoenix Air Group, a competitor of FII. The Company does
not believe that Mr. Bone's relationships with Maritime and Global Jet
materially interfere with Mr. Bone's ability to fully perform his obligations to
the Company as a director.
The Board of Directors of the Company currently requires approval or
ratification by the Board of all related party transactions.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE "FOR"
THE ELECTION OF ALL SIX NOMINEES FOR DIRECTOR.
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<PAGE> 16
PROPOSAL NUMBER 2
ELECTION OF AUDITORS
The Shareholders will be asked to ratify the appointment of the firm of
BDO Seidman, independent certified public accountants, as auditors of the
Company for the fiscal year ended April 30, 1998. A representative of BDO
Seidman will be present at the Annual Meeting, have an opportunity to make a
statement if he so desires, and be available to respond to appropriate questions
from Shareholders.
THE BOARD OF DIRECTORS OF THE COMPANY DEEMS PROPOSAL NUMBER 2 TO BE IN
THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS A VOTE
"FOR" ITS APPROVAL.
The Board of Directors is not aware that any matters other than those
set forth herein will come before the Annual Meeting. Should any matters
requiring the vote of the Shareholders arise, it is intended that shares
represented by proxies will be voted in respect thereof in accordance with the
direction of the person or persons holding the proxy.
SUBMISSION OF PROPOSALS OF SHAREHOLDERS
Proposals of Shareholders intended to be presented at the Company's
1997 Annual Meeting of Shareholders must be received at the Company's offices at
Newport News/Williamsburg Airport, Newport News, Virginia 23602, Attention: Ann
P. Campbell, Corporate Secretary, no later than July 1, 1998, to be considered
for inclusion in the proxy statement and form of proxy for that meeting.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended April 30,
1997, including audited financial statements, is enclosed with this proxy
statement, but is not a part of the proxy solicitation material. The exhibits to
the Form 10-KSB of the Company for the fiscal year ended April 30, 1997, as
amended to date, which the Annual Report includes, are not included with this
proxy statement; however, the Company is willing to supply copies of such
exhibits (to the extent not accepted for confidential treatment) upon written
request to the Company.
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<PAGE> 17
THE FLIGHT INTERNATIONAL GROUP, INC.
Newport News/Williamsburg International Airport
Newport News, Virginia 23602
--------------------
PROXY
--------------------
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE FLIGHT INTERNATIONAL GROUP,
INC.'S BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
OCTOBER 21, 1997 FOR SHAREHOLDERS OF RECORD SEPTEMBER 10, 1997
The undersigned, being a holder of shares of New Common Stock, par vale $.01 per
share, of The Flight International Group, Inc., a Georgia corporation (the
"Company"), hereby designates David E. Sandlin, Wayne M. Richmon or Ann P.
Campbell his proxy, with full power of substitution in the premises, to vote at
an annual meeting of shareholders of the Company to be held at the Company's
offices at Newport News/Williamsburg International Airport, Newport News,
Virginia 23602, on October 21, 1997, at 11:00 a.m., or at any adjournment
thereof, as follows:
1. ELECTION OF DIRECTORS: Nominees: David E. Sandlin, Wayne M. Richmon, C.
Lofton Fouts, John R. Bone, James N. Lingan and Vice Admiral Richard M.
Dunleavy
______ VOTE FOR all nominees listed above, except vote withheld from the
following nominees (if any):
______ VOTE WITHHELD from all nominees listed.
2. RATIFY THE APPOINTMENT OF BDO SEIDMAN AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDED APRIL 30, 1998.
______ VOTE FOR ______ VOTE AGAINST ______ ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). THE FAILURE TO FILL IN THE CHOICES INDICATED
ABOVE WILL AUTHORIZE THE PROXIES TO VOTE FOR THE PROPOSALS TO BE BROUGHT BEFORE
THE MEETING.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
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<PAGE> 18
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign full
corporate name by president or other authorized officer. If a partnership or
other entity, please sign in entity name by authorized person. It is understood
that this proxy may be revoked at any time insofar as it has not been exercised
and that the shares may be voted in person if the undersigned attends the
meeting.
NUMBER OF SHARES:____________________________
DATED:_______________________________________
_____________________________________________
SIGNATURE OF STOCKHOLDER
_____________________________________________
SIGNATURE IF HELD JOINTLY
PLEASE ENTER YOUR SOCIAL SECURITY NUMBER OR
FEDERAL EMPLOYER
IDENTIFICATION NUMBER HERE:
SOCIAL SECURITY OR FEI NO.___________________
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
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