<PAGE> 1
================================================================================
SCHEDULE 14A
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Comair Holdings, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Comair Holdings, Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on 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: (1)
-----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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
COMAIR HOLDINGS, INC.
P.O. Box 75021
Cincinnati, Ohio 45275
606/767-2550
July 1, 1996
Dear Shareholder:
The Annual Meeting of Shareholders will be held at 10:00 a.m., Eastern
Daylight Time, on Tuesday, August 6, 1996 at the Radisson Inn,
Cincinnati/Northern Kentucky International Airport, Hebron, Kentucky 41048. The
formal Notice of Annual Meeting of Shareholders and Proxy Statement are
attached. I hope that you will be able to attend and participate in the
meeting, at which time I will have the opportunity to review the business and
operations of Comair Holdings, Inc. Company officers and directors will also be
available to discuss our business with you.
The matters to be acted upon by our shareholders are set forth in the
Notice of Annual Meeting of Shareholders. It is important that your shares be
represented and voted at the meeting. Accordingly, after reading the attached
Proxy Statement, please sign, date and return the enclosed proxy card. Your
vote is important regardless of the number of shares you own.
Sincerely yours,
David R. Mueller
Chairman of the Board
Chief Executive Officer
<PAGE> 3
Comair Holdings, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 6, 1996
July 1, 1996
To The Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Comair Holdings, Inc., a Kentucky corporation (the "Company"), will be held at
the Radisson Inn, Cincinnati/Northern Kentucky International Airport, Hebron,
Kentucky 41048 on August 6, 1996 at 10:00 a.m., Eastern Daylight Time, for the
following purposes:
(1) To elect three Class B directors to serve for a term of three years.
(2) To ratify the selection of Arthur Andersen LLP as independent public
accountants for fiscal year 1997.
(3) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
By Order of the Board of Directors
David R. Mueller
Chairman of the Board
Chief Executive Officer
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE
FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY
REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ENCLOSED PROXY STATEMENT.
<PAGE> 4
Comair Holdings, Inc.
P.O. Box 75021
Cincinnati, Ohio 45275
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
August 6, 1996
The accompanying proxy is solicited by the Board of Directors of
Comair Holdings, Inc. (the "Company") to be voted at the Annual Meeting of
Shareholders to be held August 6, 1996, and any adjournment or adjournments
thereof. The Company will pay the cost of soliciting proxies. When such proxy
is properly executed and returned, the shares it represents will be voted at
the meeting as directed. If no specification is indicated, the shares will be
voted as recommended by the Board of Directors. Any shareholder giving a proxy
has the power to revoke it prior to its exercise by notice of revocation to the
Company in writing, by voting in person at the Annual Meeting, or by execution
of a proxy bearing a later date.
With respect to the election of directors, and ratification of
accountants, the vote required is a majority of shares actually voted.
Therefore, abstentions and broker non-votes will have no effect.
The shares entitled to vote at the meeting consist of shares of Common
Stock of the Company, with each share entitling the holder of record to one
vote. The record date for determining the shares entitled to vote at the
meeting is June 19, 1996. As of May 31, 1996, there were 44,442,386 outstanding
shares of Common Stock. This Proxy Statement and the accompanying form of proxy
are first being sent to the shareholders on or about July 1, 1996.
ELECTION OF DIRECTORS
Nominees and Directors.
At the Annual Meeting, unless a contrary direction is indicated, a
properly executed proxy card will be voted for the election of nominees named
below as directors of the Company for terms continuing until the Annual Meeting
of Shareholders in 1999, or until their successors have been elected. If any of
the nominees are unable or unwilling to serve as a director, the proxies will
be voted for the election of such person as shall be designated by the persons
named in the proxy. The Company has no reason to believe that any nominee to
the Board of Directors will be unable to serve as a director if elected.
<PAGE> 5
-2-
In voting to elect directors, shareholders are entitled to cumulate
their votes. Shareholders are entitled to cast the number of votes equal to the
number of directors to be elected multiplied by the number of shares held and
to distribute such votes among as many candidates as the shareholder sees fit.
The proxy being solicited by the Board of Directors includes the right to vote
cumulatively on the election of directors. The Board of Directors does not
intend to exercise such authority unless it is invoked by another shareholder.
Any shareholder invoking cumulative voting must be present in person or
represented by a proxy other than the proxy being solicited by the Board of
Directors.
The three nominees receiving the highest number of votes cast for the
positions to be filled will be elected.
Set forth below is certain information about the Company's nominees to
the Board of Directors, the directors whose term of office continues and
executive officers who are not directors.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP AS OF
MAY 31, 1996 (A)
----------------
SHARES OF COMMON STOCK
----------------------
NAME, POSITION WITH THE COMPANY TERM NUMBER PERCENT
OR PRINCIPAL OCCUPATION, AND AGE EXPIRES OF SHARES OF CLASS
- -------------------------------- ------- --------- --------
Nominees For Election
<S> <C> <C> <C>
Maurice W. Worth (b) 1996 4,800 *
Executive Vice President
Customer Service
Delta Air Lines, Inc., 55
Peter H. Forster (c) 1996 25,315 *
Chairman and Chief Executive Officer
DPL Inc., 54
John A. Haas (c) 1996 23,627 *
Retired President and Chief Executive Officer
Ball Glass Container Corporation, 59
</TABLE>
<PAGE> 6
-3-
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP AS OF
MAY 31, 1996 (A)
----------------
SHARES OF COMMON STOCK
----------------------
NAME, POSITION WITH THE COMPANY TERM NUMBER PERCENT
OR PRINCIPAL OCCUPATION, AND AGE EXPIRES OF SHARES OF CLASS
- -------------------------------- ------- --------- --------
Directors Whose Term of Office Continues
<S> <C> <C> <C>
David R. Mueller (d) 1997 656,337 1.2%
Chairman of the Board
Chief Executive Officer
Comair Holdings, Inc., 43
David A. Siebenburgen (e) 1997 166,416 *
President
Chief Operating Officer
Comair Holdings, Inc., 48
Raymond A. Mueller (f) 1997 167,477 *
Retired Chairman of the Board
Comair Holdings, Inc., 74
Robert H. Castellini (g) 1998 368,607 *
Chairman and Chief Executive Officer
Castellini Company, 54
Christopher J. Murphy III (c) 1998 27,745 *
President and Chief Executive Officer
1st Source Corporation
1st Source Bank, 50
Gerald L. Wolken (h) 1998 15,695 *
Managing Partner
MLE Enterprises Inc., 60
</TABLE>
<PAGE> 7
-4-
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP AS OF
MAY 31, 1996 (A)
----------------
SHARES OF COMMON STOCK
----------------------
NAME, AGE AND NUMBER PERCENT
POSITION WITH THE COMPANY OF SHARES OF CLASS
- ------------------------- --------- --------
Executive Officers Who Are Not Directors
<S> <C> <C>
K. Michael Stuart, 44 (i) 74,701 *
Sr. Vice President
Aircraft Operations, COMAIR, Inc.
Charles E. Curran, 49 (j) 58,530 *
Sr. Vice President
Marketing, COMAIR, Inc.
Randy D. Rademacher, 39 (k) 43,639 *
Sr. Vice President Finance
Chief Financial Officer
Comair Holdings, Inc.
All directors and executive officers, including 1,632,889 2.8%
nominees as a group (12 persons) (l)
</TABLE>
* Less than 1%
(a) Unless otherwise indicated, each named person has voting and
investment power over the listed shares and such voting and investment
power is exercised solely by the named person or shared with a spouse.
(b) Delta Air Lines, Inc., for which Mr. Worth serves as Executive Vice
President, Customer Service is the owner of 9,365,625 shares that are
not attributed to Mr. Worth.
(c) Includes options of 20,252 shares exercisable within 60 days of May
31, 1996.
(d) Includes options for 119,800 shares exercisable within 60 days of May
31, 1996, 69 shares held in a Company 401(k) program and 77,268 shares
which he holds as custodian for his minor children.
(e) Includes options for 80,723 shares exercisable within 60 days of May
31, 1996, and 7,265 shares held in a Company 401(k) program.
(f) Does not include 656,337 shares held by David R. Mueller and his
children or shares held by Raymond A. Mueller's other emancipated
children and grandchildren as to which he disclaims beneficial
ownership, but does include 51,132 shares owned by his wife and
options for 20,252 shares exercisable within 60 days of May 31, 1996.
(g) Includes 159,188 shares owned by a partnership controlled by Mr.
Castellini's wife in a fiduciary capacity, 16,875 shares which are a
part of a corporate profit sharing plan of which Mr. Castellini is a
participant, 1,254 shares which are held in IRA accounts for Mr.
Castellini and his wife, 101,250 shares which are held in a trust for
the benefit of his children, 19,875 shares gifted to a charitable
foundation for which he has retained power to vote and dispose of the
shares, plus options for 20,252 shares exercisable within 60 days of
May 31, 1996.
<PAGE> 8
-5-
(h) Includes options of 15,189 shares exercisable within 60 days of May
31, 1996.
(i) Includes options of 19,353 shares exercisable within 60 days of May
31, 1996 and 30,041 shares owned by Mr. Stuart's wife. Mr. Stuart has
held his current position since 1986.
(j) Includes options of 18,762 shares exercisable within 60 days of May
31, 1996. Mr. Curran has held his current position since 1985.
(k) Includes options of 31,391 shares exercisable within 60 days of May
31, 1996, and 2,123 shares held in a Company 401(k) program. Mr.
Rademacher was named Sr. Vice President Finance in 1993. He previously
held the title of Vice President of Finance since 1989 and Chief
Financial Officer since 1990.
(l) Includes options for 386,478 shares which are exercisable within 60
days of May 31, 1996.
- -------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's Common Stock, to file with the Securities and Exchange
Commission ("SEC") initial reports of ownership and reports of changes in
ownership of Company Common Stock. Executive officers, directors and greater
than ten-percent shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during fiscal 1996 all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than ten-percent
shareholders were complied with.
BUSINESS EXPERIENCE
Nominees for Election.
Maurice W. Worth was elected a director in 1993, pursuant to a Stock
Purchase Agreement which gives Delta Air Lines, Inc. the right to designate a
nominee for election to the Comair Holdings, Inc. Board of Directors. Mr. Worth
has been employed by Delta Air Lines, Inc. in various positions since 1960 and
currently holds the title of Executive Vice President - Customer Service.
Peter H. Forster was elected as a director of the Company in 1988. Mr.
Forster has been affiliated with the Dayton Power and Light Company, an
electric and natural gas utility company headquartered in Dayton, Ohio, in
various capacities since 1973. Mr. Forster has served as Chief Executive
Officer of DPL Inc. since April 1984 and Chairman of the Board since April
1988. Mr. Forster is also a director of Banc One Corp. and Amcast Industrial
Corp.
<PAGE> 9
-6-
John A. Haas was Group Vice President Ball Corporation, from 1993
through 1995. Previously he was President and Chief Executive officer, Ball
Glass Container Corporation, since 1994 and President, Ball Metal Container and
Specialty Products Group, a manufacturer of metal and glass packaging products,
and Chairman of the Board, President and Chief Executive Officer since 1988 of
Heekin Can, Inc., a Cincinnati, Ohio-based manufacturer, which was acquired by
Ball Corporation. Mr. Haas has served as a director of the Company since 1990.
Directors Whose Term of Office Continues.
David R. Mueller is a founder of the Company and has served as a
director since its inception. He served as Chief Operating Officer from its
inception until May 1986. Mr. Mueller was President from May 1981 until October
1990. He has served as Chief Executive Officer since September 1983. He was
elected Chairman of the Board and has held that position since June 1990.
David A. Siebenburgen served as Executive Vice President and Chief
Operating Officer of the Company from May 1986 to October 1990. Mr.
Siebenburgen was named President in October 1990 and has been a director of the
Company since 1988.
Raymond A. Mueller is a founder of the Company and served as Chairman
of the Board until his retirement in June 1990. Mr. Mueller has served as a
director since the Company's inception. He was President from its inception
through May 1981 when he was named Chairman of the Board and Chief Executive
Officer, and served as Chief Executive Officer until September 1983 and
Chairman of the Board until June 1990.
Robert H. Castellini, Chairman and Chief Executive Officer of
Castellini Company, a Cincinnati, Ohio-based food distribution, food processing
and transportation services company, has been with Castellini Company for more
than five years. He is the Chairman of the Riverfront Development Company,
which controls and is in the process of developing the Cincinnati riverfront.
Mr. Castellini has served as a director of the Company since 1989. Mr.
Castellini is also on the Board of Directors of PNC Bank, Ohio, N.A., and
numerous privately-held Cincinnati corporations.
Christopher J. Murphy III has been President, Chief Executive Officer
and director of 1st Source Corporation and its subsidiary 1st Source Bank, a
South Bend, Indiana-based financial institution, for more than five years. Mr.
Murphy has served as a director of the Company since 1989. Mr. Murphy is also a
director of Quality Dining, Inc. and Titan Holdings, Inc.
Gerald L. Wolken has been Managing Partner of MLE Enterprises Inc., a
management consulting firm located in Ft. Myers, Florida since 1990. Mr. Wolken
has served as a director of the Company since 1989.
Raymond A. Mueller and David R. Mueller are father and son. None of
the other directors or executive officers are related. All the Company's
executive officers devote substantially all their time to the Company.
<PAGE> 10
-7-
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors met on six occasions and took no actions in writing
in fiscal 1996. The Executive Committee, whose members are Messrs. Raymond
Mueller (Chairman), Maurice Worth and David Mueller, is entitled through
authorization by the Board of Directors and by Kentucky law to perform
substantially all of the functions of the Board of Directors between meetings
of the Board. It had no meetings in fiscal 1996 but took action thirty-eight
times in writing.
The Audit Committee recommends the employment of independent auditors,
monitors relationships between the Company's personnel and the auditors,
reviews the quality of internal controls, reviews the scope of the independent
auditor's work and performs other functions assigned to it by the Board of
Directors. The Audit Committee met three times in fiscal 1996. The members are
Messrs. Christopher Murphy (Chairman), Gerald Wolken and Robert Castellini.
The Compensation Committee administers the Company's Stock Option
Plans and sets compensation levels for all executives. This Committee had three
meetings and took action two times in writing in fiscal 1996. The members are
Messrs. Peter Forster (Chairman), Robert Castellini and John Haas.
The Finance Committee reviews the investment, dividend and overall
capital structure policies of the Company. This Committee had two meetings and
took action two times in writing in fiscal 1996. The members are Messrs. David
Mueller (Chairman), David Siebenburgen and Christopher Murphy.
The Board of Directors has elected not to appoint a Nominating
Committee.
COMPENSATION OF DIRECTORS
Comair's outside directors receive $18,000 per year, as well as $1,500
per year for each committee of which they are a member. Committee Chairmen
receive an additional $1,500 annually.
In 1992 the Company established a stock option plan for non-employee
directors with 248,063 shares of common stock reserved for issuance. Each year
each non-employee director of the Company, at the close of business on the
tenth business day following the end of Comair Holdings' Inc. fiscal year,
receives an option to purchase 5,063 shares of common stock at a purchase price
equal to the last sale price on that day. These options become exercisable six
months after the date of grant and expire ten years after the date of grant.
The Company has a lifetime Consulting Agreement with Raymond A.
Mueller which became effective upon his retirement from the Company in June
1990. Mr. Mueller's consulting compensation is $150,000 per year. Mr. Mueller
also received transportation services and insurance amounting to $28,000 for
fiscal 1996.
<PAGE> 11
-8-
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation for the Company's executive officers in the preceding
fiscal year was established by the Compensation Committee of the Board of
Directors. The Company's executive compensation programs have been designed to
link the level of compensation paid to senior executives with the current and
long-term level of Company performance and each executive's contribution to
that performance. These programs place a significant portion of the executive's
cash compensation at risk. As a result of the Company's overall compensation
philosophy, approximately 20% to 50% of an executive's total annual cash
compensation opportunity depends on the achievement of corporate and individual
performance goals. The amount of compensation at risk increases with the
executive's responsibilities. These programs are composed of three basic
elements, each designed to reward different aspects of each executive's
performance.
(a) Base Salary
Base salary levels and salary increases are determined by an
evaluation of the Company's performance and each individual's performance and
contribution. Furthermore, the Committee considers the recommendations of
periodic reviews by independent consultants and compensation which could be
attained for comparable positions elsewhere.
(b) Annual Performance-Based Incentives
Annual incentive opportunities establish an effective link between
current compensation and current performance to ensure that executives focus on
objectives that help to increase shareholder value. Performance is defined in
terms of financial, operating and management development goals for which each
executive is responsible, in addition to overall Company financial goals.
All performance goals, which include pre-tax profits, quality of
passenger service measurements, various unit revenue and cost objectives and
operating goals such as flight completion and on-time percentage, are set by
the Committee. These goals are set each year based on an operating plan the
Committee believes to be challenging in the then current operating environment.
The actual results must meet certain thresholds before any annual incentive
awards are paid. In making its awards for fiscal 1996, the Committee determined
that the threshold levels had all been met and then awarded specific bonuses
based on its analysis of the achievement of performance goals as established by
the Committee.
(c) Long-Term Incentives
The Company's officers, directors (other than members of the
Committee) and employees are entitled to participate in its 1990 Stock Option
Plan. The Option Plan is intended to provide a long-term incentive for future
performance that aligns the officers' and employees' interests with the
shareholders. The Committee evaluates the duties of officers, directors and
employees and their present and potential contributions to the Company and such
other factors as it deems relevant in determining key persons to whom options
will be granted and the number of shares covered by such grants. The number of
shares granted to each participant in fiscal 1996 was determined by taking a
percentage of salary set by the Committee and dividing that amount by the fair
market value per share on the date of grant.
<PAGE> 12
-9-
Prior to fiscal 1996, the Chief Executive Officer and the Chief
Operating Officer could earn additional cash bonuses based on certain financial
results of the Company measured over a three-year period. Revenue, net income,
earnings per share and return on equity were compared to previously determined
targets set by the Committee. The bonus amount was calculated based on the
achievement of these targets, subject to minimum thresholds, which must have
been met before any amounts were paid. This cash compensation portion of the
Company's long-term incentive program has been phased out, with the final award
based on the three-year period ending in fiscal 1995.
The Deferred Incentive Compensation Plan ("the Plan"), effective for
fiscal 1995, is a non-qualified plan that is intended to provide supplemental
income for certain key employees of the Company selected by the Committee.
Under the Plan, the Committee can allocate as deferred compensation a
percentage of pre-tax profits for certain key employees of the Company.
Contributions for fiscal 1996 to the accounts of the persons listed in the
Summary Compensation Table below are included in the column headed "All Other
Compensation."
The Chief Executive Officer's salary was increased from $366,000 in
fiscal 1995 to $417,000 in fiscal 1996 based on the criteria discussed in (a)
above. After the end of fiscal 1996, the Committee, based on the achievement of
certain financial and operating goals as described in (b) above, approved an
annual performance-based incentive award for Mr. Mueller of $280,224.
The executive officers may participate in the Comair Savings and
Investment Plan, a 401(k) Plan, which is available to all Comair employees on
the same basis. Contributions for fiscal 1996 to the accounts of the persons
listed in the Summary Compensation Table below are included in the column
headed "All Other Compensation."
"The Omnibus Budget Reconciliation Act of 1993" provides that
compensation in excess of $1,000,000 per year paid to the chief executive
officer of a public company as well as the other executive officers listed in
the compensation table will no longer be deductible unless the compensation is
"performance-based" and the material terms of the compensation and the
performance base are approved by shareholders. This law was not applicable to
fiscal 1996 compensation, as the compensation levels did not exceed the
$1,000,000 level. The Committee may, in designing compensation packages in
future years, take actions designed to preserve the deductibility of such
compensation so long as such actions do not interfere with the provision of
proper compensation and incentive based pay for the Company's Chief Executive
and other executive officers.
COMPENSATION COMMITTEE
Peter H. Forster, Chairman
Robert H. Castellini
John A. Haas
<PAGE> 13
-10-
The following table compares total shareholder returns for the Company
over the last five years to the Nasdaq Transportation and the Nasdaq Composite
Indices, assuming a $100 investment made on March 31, 1991.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG COMAIR HOLDINGS, INC., THE NASDAQ COMPOSITE INDEX
AND NASDAQ TRANSPORTATION INDEX
<TABLE>
<CAPTION>
Measurement
Period Comair *NASDAQ *NASDAQ
(Fiscal Year Holdings Composite Transportation
Covered) Inc. Index Index
- ------------ -------- --------- --------------
<S> <C> <C> <C>
Measurement
3/31/91 $100 $100 $100
3/31/92 149 127 132
3/31/93 305 147 151
3/31/94 263 158 170
3/31/95 214 176 162
3/31/96 653 239 197
</TABLE>
* U.S. Domestic Only
<PAGE> 14
-11-
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table discloses compensation for services rendered by the
Company's Chief Executive Officer and the four other executive officers during
the three fiscal years ended March 31, 1996.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------
SECURITIES LTIP ALL OTHER
FISCAL UNDERLYING PAYOUTS COMPENSATION
NAMES AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS ($) ($)
- ---------------------------- ------ ---------- --------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
David R. Mueller......................... 1996 $417,000 $280,224 92,700 -- $502,398 (1)
Chairman and Chief Executive Officer 1995 $366,000 $176,277 78,750 $ 62,322 $140,872
1994 $342,000 $207,252 49,500 $ 80,657 $ 2,407
David A. Siebenburgen.................... 1996 $270,000 $145,152 40,725 -- $362,404 (2)
President and Chief Operating Officer 1995 $252,000 $ 96,981 34,200 $ 21,455 $ 87,301
1994 $235,000 $113,928 22,050 $ 27,711 $ 2,639
K. Michael Stuart........................ 1996 $175,000 $ 58,800 13,950 -- $162,258 (3)
Sr. Vice President, Aircraft Operations 1995 $163,000 $ 38,892 11,475 -- $ 48,432
1994 $155,000 $ 45,183 8,100 -- $ 2,658
Charles E. Curran III.................... 1996 $178,000 $ 59,808 14,175 -- $222,239 (4)
Sr. Vice President, Marketing 1995 $167,000 $ 40,182 11,475 -- $ 49,360
1994 $155,000 $ 45,376 8,100 -- $ 2,805
Randy D. Rademacher...................... 1996 $155,000 $ 52,080 12,150 -- $132,258 (5)
Sr. Vice President Finance and 1995 $135,000 $ 30,619 31,950 -- $ 40,231
Chief Financial Officer 1994 $113,000 $ 33,900 5,850 -- $ 2,101
</TABLE>
(1) Comprised of $500,000 of contributions by the Company to its Deferred
Incentive Compensation Plan and $2,398 of contributions by the Company to
the Comair Savings and Investment Plan.
(2) Comprised of $360,000 of contributions by the Company to its Deferred
Incentive Compensation Plan and $2,404 of contributions by the Company to
the Comair Savings and Investment Plan.
(3) Comprised of $160,000 of contributions by the Company to its Deferred
Incentive Compensation Plan and $2,258 of contributions by the Company to
the Comair Savings and Investment Plan.
(4) Comprised of $220,000 of contributions by the Company to its Deferred
Incentive Compensation Plan and $2,239 of contributions by the Company to
the Comair Savings and Investment Plan.
(5) Comprised of $130,000 of contributions by the Company to its Deferred
Incentive Compensation Plan and $2,258 of contributions by the Company to
the Comair Savings and Investment Plan.
<PAGE> 15
-12-
OPTION GRANTS IN THE 1996 FISCAL YEAR
The following table provides information on option grants in fiscal 1996 to the
executive officers:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF TOTAL POTENTIAL REALIZED VALUE AT
UNDERLYING OPTIONS GRANTED EXERCISE ASSUMED ANNUAL RATES OF STOCK
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION PRICE APPRECIATION FOR OPTION TERM
GRANTED (1) FISCAL YEAR ($/SHARE) DATE 5% 10%
----------- ----------------- ------------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
David R. Mueller 92,700 39% $7.667 04/14/05 $446,999 $1,132,887
David A. Siebenburgen 40,725 17% $7.667 04/14/05 $196,376 $ 497,700
K. Michael Stuart 13,950 6% $7.667 04/14/05 $ 67,267 $ 170,483
Charles E. Curran III 14,175 6% $7.667 04/14/05 $ 68,352 $ 173,232
Randy D. Rademacher 12,150 5% $7.667 04/14/05 $ 58,587 $ 148,485
</TABLE>
(1) These options become exercisable at the rate of 25% of each option per year
commencing one year after the date of grant.
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND FISCAL 1996
YEAR-END OPTION VALUES
The following table provides information concerning exercises of stock options
during fiscal 1996 by the executive officers. The table also shows the number
and value of unexercised stock options at the end of fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF
SHARES UNEXERCISED OPTIONS UNEXERCISED IN-THE-MONEY
ACQUIRED ON VALUE AT FISCAL 1996 YEAR-END (#) OPTIONS AT FISCAL YEAR-END
NAME EXERCISE(#) REALIZED($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE(2) UNEXERCISABLE(2)
---- ----------- --------------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David R. Mueller 68,162 $ 756,938 47,476 194,611 $589,580 $2,866,266
David A. Siebenburgen 141,296 $1,949,772 47,598 86,741 $760,888 $1,282,732
K. Michael Stuart 75,927 $1,049,430 10,971 26,762 $158,388 $ 382,509
Charles E. Curran III 66,986 $ 885,300 7,156 30,235 $ 86,994 $ 446,947
Randy D. Rademacher 18,630 $ 274,739 22,364 46,944 $391,293 $ 677,782
</TABLE>
(1) The dollar values shown are calculated by determining the difference
between the fair market value of the Company's Common Stock at the exercise
date and the exercise price of the options.
(2) The dollar values shown are calculated by determining the difference
between the fair market value of the Company's Common Stock at fiscal
year-end and the exercise price of the options. At the close of trading
on March 31, 1996, the price per share of the Company's Common Stock
was $23.17.
The Company has an Employment Agreement with David R. Mueller. The
base compensation under the Agreement is currently $450,000 and may be
increased at the discretion of the Compensation Committee of the Board of
Directors.
The Company also has an Employment Agreement with David A.
Siebenburgen. The base compensation under the Agreement is currently $290,000
and may be increased at the discretion of the Compensation Committee of the
Board of Directors.
<PAGE> 16
-13-
The Employment Agreements for Messrs. David Mueller and David
Siebenburgen are each for a term of three years, with the term automatically
extending each year unless one of the parties to the Agreement gives notice not
to extend the term. The Agreements also provide that if an Agreement is
terminated by the Company or a change in control of the Company occurs, the
Company is required to make a lump-sum payment equal to two years compensation
for Mr. Siebenburgen and three years compensation for Mr. Mueller. The
Agreements also provide that if Messrs. Mueller or Siebenburgen are terminated
following a change in control of the Company, the covenant not to compete
applicable to the terminated employee shall be null and void.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Delta Air Lines, Inc. owns approximately 21% of the Company's common
stock. COMAIR is a designated "Delta Connection" carrier, operating all flights
under the DL code. Under a marketing agreement, COMAIR is able to offer
passengers joint fares, coordinated schedules for timely connections and Delta
frequent flyer mileage. In return for set fees, Delta Air Lines, Inc. also
handles the Company's reservations and flights at some airport locations. Costs
of these various services in fiscal 1996 were approximately $20,790,000.
Accounts payable in the Company's March 31, 1996 financial statements included
approximately $7,056,000 due Delta Air Lines, Inc. for these services.
Trade receivables in the Company's March 31, 1996 financial statements
include amounts due from Delta Air Lines, Inc. for transportation of passengers
and cargo of approximately $9,002,000. Approximately 45% of COMAIR's passengers
in fiscal 1996 connected with Delta Air Lines, Inc.
Maurice Worth, a director of Comair Holdings, Inc., is employed by
Delta Air Lines, Inc. and currently holds the title of Executive Vice President
- - Customer Service.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth the names of all persons who are known by
the Company to be the beneficial owners (as defined in the rules of the
Securities and Exchange Commission) of more than 5% of the shares of Common
Stock of the Company:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF CLASS
- ------------------ --------- --------
<S> <C> <C>
Delta Air Lines, Inc. 9,365,625(1) 21.1%
1030 Delta Blvd
Hartsfield Atlanta
International Airport
Atlanta, Georgia 30320
Nicholas Applegate 5,073,640(2) 11.4%
600 West Broadway, 29th Floor
San Diego, CA 92101
</TABLE>
<PAGE> 17
-14-
<TABLE>
<S> <C> <C>
FMR Corp. 3,249,658(3) 7.3%
82 Devonshire Street
Boston, MA 02109
</TABLE>
(1) Based on Form 5 report filed with the Securities and Exchange Commission in
April 1996 and adjusted for the May 17, 1996, 3-for-2 stock split.
(2) Based on a 13G report filed with the SEC in January 1996 and adjusted for
the May 17, 1996, 3-for-2 stock split.
(3) Based on a 13G report filed with the SEC in April 1996 and adjusted for the
May 17, 1996, 3-for-2 stock split.
RATIFICATION OF ACCOUNTANTS
Arthur Andersen LLP has served as the Company's independent public
accountants since shortly before its 1981 initial public offering. The Board
has reaffirmed that selection for fiscal year 1997. Although not required by
law, the Board is seeking shareholder ratification of its selection. An
affirmative vote of a majority of shares represented at the meeting is required
for ratification. If ratification is not obtained, the Board intends to
continue the employment of Arthur Andersen LLP at least through fiscal 1997.
Representatives of Arthur Andersen LLP are expected to be present at the
meeting and have the opportunity to comment and respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Shareholders desiring to have proposals included in the Proxy
Statement for the 1997 Shareholders' Meeting must submit their proposals to
Comair Holdings, Inc. at its offices on or before March 1, 1997.
OTHER MATTERS
Any other matters considered at the meeting including adjournment will
require the affirmative vote of the majority of shares voted.
<PAGE> 18
COMAIR HOLDINGS, INC.
Proxy For Annual Meeting
The undersigned hereby appoints RAYMOND A. MUELLER and DAVID R.
MUELLER, or either of them, proxies of the undersigned each with the power of
substitution, to vote cumulatively or otherwise all shares of Common Stock
which the undersigned would be entitled to vote at the Annual Meeting of
Shareholders of Comair Holdings, Inc. to be held August 6, 1996, at 10:00 a.m.
(Eastern Daylight Time) at the Radisson Inn, Cincinnati/Northern Kentucky
International Airport, Hebron, Kentucky and at any adjournment of such Meeting
as specified on the reverse side on the matters described in the Company's
Proxy Statement and in their discretion with respect to such other business as
may properly come before the Meeting or any adjournment thereof.
<PAGE> 19
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING
PROPOSALS:
1. To elect the following three persons as Class B directors:
Maurice W. Worth, Peter H. Forster, John A. Haas.
For all WITHHOLD To withhold authority to vote
nominees AUTHORITY for any individual nominee,
listed to the to vote for write that nominee's name in the
right (except all nominees space below:
as marked to listed to
the contrary) the right
o o --------------------------------
2. To ratify the selection of Arthur Andersen LLP as independent
certified public accountants for fiscal 1997.
FOR AGAINST ABSTAIN
o o o
Authority to transact such other business as may properly come before the
meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR THE LISTED NOMINEES AND FOR PROPOSAL 2.
................................... 1996
........................................
........................................
Important: Please sign exactly as name
appears hereon indicating, where proper,
official position or representative
capacity. In the case of joint holders,
all should sign.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
