<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
COMAIR HOLDINGS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE 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 0-11.
(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
COMAIR HOLDINGS, INC.
P.O. Box 75021
Cincinnati, Ohio 45275
606/767-2550
July 3, 1997
Dear Shareholder:
The Annual Meeting of Shareholders will be held at 10:00 a.m., Eastern
Daylight Time, on Tuesday, August 12, 1997 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
2
Comair Holdings, Inc.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 12, 1997
July 3, 1997
To The Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Comair Holdings, Inc., a Kentucky corporation, will be held at the Radisson Inn,
Cincinnati/Northern Kentucky International Airport, Hebron, Kentucky 41048 on
August 12, 1997 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 approve amendments to the 1990 Stock Option Plan.
(3) To ratify the selection of Arthur Andersen LLP as independent public
accountants for fiscal year 1998.
(4) 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, AND SIGN THE ENCLOSED PROXY BALLOT CARD. RETURN IN THE
ENVELOPE PROVIDED 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
3
Comair Holdings, Inc.
P.O. Box 75021
Cincinnati, Ohio 45275
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
August 12, 1997
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 12, 1997, 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 given 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.
Except in the election of directors, the vote required on all matters
to be voted upon is a majority of shares actually voted. Therefore, abstentions
and broker non-votes will have no effect. In voting to elect directors,
shareholders are entitled to cumulate their votes.
The shares entitled to vote at the meeting consist of shares of Common
Stock of the Company. Each share entitles the holder of record to one vote. The
record date for determining the shares entitled to vote at the meeting is June
25, 1997. As of May 21, 1997, there were 44,532,815 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 3, 1997.
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 2000, 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. 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 21, 1997 (a)
----------------
Shares of Common Stock
----------------------
Name, Position with the Company Term Number Percent
or Principal Occupation, and Age Expires of Shares of Class
- -------------------------------- ------- ------------------
<S> <C> <C> <C> <C>
Nominees For Election
David R. Mueller (b) 1997 613,294 1.0%
Chairman of the Board
Chief Executive Officer
Comair Holdings, Inc., 44
David A. Siebenburgen (c) 1997 176,513 *
President
Chief Operating Officer
Comair Holdings, Inc., 49
Raymond A. Mueller (d) 1997 163,540 *
Retired Chairman of the Board
Comair Holdings, Inc., 75
</TABLE>
<PAGE> 6
3
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership as of
May 21, 1997 (a)
----------------
Shares of Common Stock
----------------------
Name, Position with the Company Term Number Percent
or Principal Occupation, and Age Expires of Shares of Class
- -------------------------------- ------- ------------------
<S> <C> <C> <C> <C>
Directors Whose Term of Office Continues
Robert H. Castellini (e) 1998 398,674 *
Chairman and Chief Executive Officer
Castellini Company, 55
Christopher J. Murphy III (f) 1998 32,807 *
President and Chief Executive Officer
1st Source Corporation
1st Source Bank, 51
Gerald L. Wolken (g) 1998 20,757 *
Managing Partner
MLE Enterprises Inc., 61
Peter H. Forster (f) 1999 30,377 *
Chairman of the Board
DPL Inc., 55
John A. Haas (f) 1999 28,690 *
Retired President and Chief Executive Officer
Ball Glass Container Corporation, 60
</TABLE>
<PAGE> 7
4
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership as of
May 21, 1997 (a)
----------------
Shares of Common Stock
----------------------
Name, Age and Number Percent
Position with the Company of Shares of Class
- ------------------------- --------- --------
<S> <C> <C>
Executive Officers Who Are Not Directors
K. Michael Stuart, 45 (h) 93,360 *
Sr. Vice President
Aircraft Operations, COMAIR, Inc.
Charles E. Curran, 50 (i) 49,533 *
Sr. Vice President
Marketing, COMAIR, Inc.
Randy D. Rademacher, 40 (j) 54,616 *
Sr. Vice President Finance
Chief Financial Officer
Comair Holdings, Inc.
All directors and executive officers, including 1,662,161 2.7%
nominees as a group (11 persons) (k)
* Less than 1%
</TABLE>
(a) Unless otherwise indicated, each named person has voting and investment
power over the listed shares and such powers are exercised solely by the
named person or shared with a spouse.
(b) Includes options for 171,758 shares exercisable within 60 days of May 21,
1997, 69 shares held in a Company 401(k) program and 57,268 shares owned by
his children.
(c) Includes options for 74,890 shares exercisable within 60 days of May 21,
1997, and 7,332 shares held in a Company 401(k) program.
(d) Does not include 613,294 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 47,132 shares owned by his wife and options for 25,315 shares
exercisable within 60 days of May 21, 1997.
(e) Includes 171,687 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, 1,260 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, 34,725 shares in a charitable foundation for which he has
retained power to vote and dispose of the shares, plus options for 25,315
shares exercisable within 60 days of May 21, 1997.
<PAGE> 8
5
(f) Includes options of 25,315 shares exercisable within 60 days of May 21,
1997.
(g) Includes options of 20,252 shares exercisable within 60 days of May 21,
1997.
(h) Includes options of 31,172 shares exercisable within 60 days of May 21,
1997, 30,040 shares owned by Mr. Stuart's wife, and 6,842 shares held in a
Company 401(k) program. Mr. Stuart has held his current position since
1986.
(i) Includes options of 11,720 shares exercisable within 60 days of May 21,
1997. Mr. Curran has held his current position since 1985.
(j) Includes options of 41,653 shares exercisable within 60 days of May 21,
1997, and 2,838 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 and Chief Financial Officer since 1990.
(k) Includes options for 478,020 shares which are exercisable within 60 days of
May 21, 1997.
Maurice W. Worth, a director whose term would have expired in 1999,
resigned as a director due to additional responsibilities with his employer,
Delta Air Lines, Inc. The Board has not determined a replacement for Mr. Worth.
Delta Air Lines, Inc. has the right under a 1986 agreement with Comair to
designate a nominee for election to the Company's Board of Directors to replace
Mr. Worth but has not yet exercised that right.
Business Experience
- -------------------
Nominees for Election
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.
<PAGE> 9
6
Directors Whose Term of Office Continues
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
is in the process of developing a portion of 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 and foundations.
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., Titan Holdings, Inc., and several
privately-held corporations.
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.
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 served as Chief Executive Officer of DPL Inc.
from April 1984 until December 1996. He has served as Chairman of the Board
since April 1988. Mr. Forster is also a director of Banc One Corp. and Amcast
Industrial Corp.
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.
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 one action in
writing in fiscal 1997. The Executive Committee, whose members are Messrs.
Raymond Mueller (Chairman) and David Mueller, is authorized to perform
substantially all of the functions of the Board of Directors between meetings of
the Board. It had no meetings in fiscal 1997 but took action nine 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 two times in fiscal 1997. The members are Messrs.
Christopher Murphy (Chairman), Gerald Wolken and Raymond Mueller.
The Compensation Committee administers the Company's Stock Option Plans
and sets compensation levels for all executives. This Committee had three
meetings in fiscal 1997 and took one action in writing. 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 one action in writing in fiscal 1997. 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 354,375 shares of common stock reserved for issuance. Each year
each non-employee director of the Company, on the tenth business day following
the end of the Company's 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.
<PAGE> 11
8
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 $37,100 for fiscal
1997.
STOCK OPTION PLAN AMENDMENTS
The Company's existing Stock Option Plan for employees was approved by
shareholders in 1990. It provides for the granting of incentive and
non-qualified options. When a non-qualified option is exercised, the holder
recognizes ordinary income and the Company is entitled to a deduction for
federal income tax purposes equal to the spread between the market price at the
time of exercise and the exercise price.
Recent changes to federal tax law deny a deduction for compensation in
excess of $1 million dollars paid to the chief executive officer and the four
highest paid officers of the Company. The exercise of non-qualified options in a
particular year by one of these persons could, when added to his other
compensation, cause the income to exceed $1 million dollars. There is an
exception to this limitation for performance-based compensation. The 1990 Stock
Option Plan meets these tests with certain exceptions which are allowed to exist
until the date of the 1997 Annual Shareholders' Meeting.
To preserve the deductibility of compensation in excess of $1 million
that may be realized from the exercise of the non-qualified options under the
1990 Stock Option Plan, it is necessary that Shareholders amend the Plan.
The proposed amendments narrow the range of persons who may serve as
members of the Committee which grants and otherwise administers the Plan to
outside directors as defined by the Internal Revenue Code. An outside director
is a person who is not an officer or employee of the Company or one who performs
significant services for the Company.
The proposed amendments also limit the number of shares with respect to
which options may be granted to any one person in each fiscal year to 200,000.
Previously, the Plan had no limitations.
The proposed amendments also require any further amendment that could
cause the Plan to fail to meet the Internal Revenue tests for this deduction to
be approved by shareholders, and limit the ability of the Directors to make
amendments which could adversely affect incentive options.
The text of these amendments is as follows:
1. Add to Section 3.1 the following as the penultimate sentence:
Members of the Committee must qualify as non-employee directors as
defined by Securities and Exchange Commission Rule 16b-3(b)(3)(i)
and shall also be "outside directors" within the meaning of 162(m)
of the Code.
<PAGE> 12
9
2. Add a new Section 4.2 to read:
The maximum number of shares with respect to which
options may be granted to any employee of the Company during each
fiscal year is 200,000. If an option is canceled, it continues to be
counted against the maximum number of shares for which options may be
granted to an employee. If an option is repriced, the transaction is
treated as a cancellation of the option and a grant of a new option.
3. Add the following subsections to Section 14.1:
C. Cause the Plan or any Option granted under the Plan to
fail to meet the conditions for exclusion of application
of the $1 million deduction limitation imposed by Section
162(m) of the Code; or
D. Cause any Option granted as an Incentive Stock Option to
fail to qualify as an "Incentive Stock Option" as defined
by Section 422 of the Code.
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 goals in these areas.
<PAGE> 13
10
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 1997, the Committee determined
which threshold levels had 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.
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 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 1997 to the accounts of the persons
listed in the Summary Compensation Table below are included in the column headed
"All Other Compensation."
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 1997 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 $417,000 in
fiscal 1996 to $450,000 in fiscal 1997 based on the criteria discussed in (a)
above. After the end of fiscal 1997, 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 $295,110.
<PAGE> 14
11
Federal Law 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 1997 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> 15
12
PERFORMANCE GRAPH
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, 1992.
<TABLE>
<CAPTION>
Value of initial $100 Investment Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97
<S> <C> <C> <C> <C> <C> <C>
Comair Holdings, Inc. $100.00 $204.51 $176.30 $143.47 $438.27 $396.10
NASDAQ Composite Index (U.S. Domestic Only) $100.00 $114.96 $124.09 $138.04 $187.43 $208.49
NASDAQ Transportation Index (U.S. Domestic Only) $100.00 $114.72 $129.49 $122.99 $149.69 $149.33
</TABLE>
<PAGE> 16
13
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table discloses compensation for services rendered by the
Company's Chief Executive Officer and the four other executive officers during
the three fiscal years ended March 31, 1997.
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Securities LTIP All Other
Fiscal Underlying Payouts Compensation
Names and Principal Position Year Salary ($) Bonus ($) Options ($) ($)
- ---------------------------- ----- ---------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
David R. Mueller........................ 1997 $450,000 $296,110 96,253 -- $502,432(1)
Chairman and Chief Executive Officer 1996 $417,000 $280,224 92,700 -- $502,398
1995 $366,000 $176,277 78,750 $ 62,322 $140,872
David A. Siebenburgen.................... 1997 $290,000 $158,485 39,004 -- $362,433(2)
President and Chief Operating Officer 1996 $270,000 $145,152 40,725 -- $362,404
1995 $252,000 $ 96,981 34,200 $ 21,455 $ 87,301
K. Michael Stuart........................ 1997 $190,000 $ 43,890 18,750 -- $162,476(3)
Sr. Vice President, Aircraft Operations 1996 $175,000 $ 58,800 13,950 -- $162,258
1995 $163,000 $ 38,892 11,475 -- $ 48,432
Charles E. Curran III.................... 1997 $190,000 $ 72,884 18,750 -- $221,933(4)
Sr. Vice President, Marketing 1996 $178,000 $ 59,808 14,175 -- $222,239
1995 $167,000 $ 40,182 11,475 -- $ 49,360
Randy D. Rademacher..................... 1997 $178,000 $ 68,281 18,750 $132,468(5)
Sr. Vice President Finance and 1996 $155,000 $ 52,080 12,150 -- $132,258
Chief Financial Officer 1995 $135,000 $ 30,619 31,950 -- $ 40,231
</TABLE>
(1) Comprised of $500,000 of contributions by the Company to its Deferred
Incentive Compensation Plan and $2,432 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 $2,433 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 $2,476 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 $1,933 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 $2,468 of contributions by the Company to the
Comair Savings and Investment Plan.
<PAGE> 17
14
OPTION GRANTS IN FISCAL 1997
The following table provides information on option grants in fiscal 1997 to the
executive officers:
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------
Number of
Securities Percent of Total Potential Realized Value At
Underlying Options Granted Exercise Assumed Annual Rates of Stock
Options to Employees In Price Expiration Price Appreciation for Option Term
Granted Fiscal Year ($/Share) Date 5% 10%
----------- ----------------- ------------ ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
David R. Mueller 96,253 32% $23.708 04/14/06 $1,435,132 $3,636,920
David A. Siebenburgen 39,004 13% $23.708 04/14/06 $ 581,549 $1,473,766
K. Michael Stuart 18,750 6% $23.708 04/14/06 $ 279,563 $ 708,469
Charles E. Curran III 18,750 6% $23.708 04/14/06 $ 279,563 $ 708,469
Randy D. Rademacher 18,750 6% $23.708 04/14/06 $ 279,563 $ 708,469
</TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND FISCAL 1997 YEAR-END OPTION
VALUES
The following table provides information concerning exercises of stock options
during fiscal 1997 by the executive officers. The table also shows the number
and value of unexercised stock options at the end of fiscal 1997.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of
Shares Unexercised Options Unexercised In-The-Money
Acquired on Value At Fiscal 1997 Year-End (#) Options at Fiscal Year-End
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
David R. Mueller 21,137 $427,712 99,675 217,528 $1,161,241 $1,589,183
David A. Siebenburgen 37,364 $763,557 43,819 92,160 $ 509,721 $ 696,344
K. Michael Stuart 0 $ 0 19,509 36,974 $ 249,077 $ 238,239
Charles E. Curran III 18,998 $291,285 0 37,143 $ 0 $ 240,619
Randy D. Rademacher 0 $ 0 31,509 56,549 $ 484,957 $ 485,700
</TABLE>
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. At the close of trading on March 31, 1997, the
price per share of the Company's Common Stock was $21.75.
The Company has an Employment Agreement with David R. Mueller. The base
compensation under the Agreement is currently $500,000 and may be increased by
the Compensation Committee.
The Company also has an Employment Agreement with David A.
Siebenburgen. The base compensation under the Agreement is currently $310,000
and may be increased by the Compensation Committee.
<PAGE> 18
15
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. handles
the Company's reservations and handles flights at some airport locations. Costs
of these various services in fiscal 1997 were approximately $27,142,000.
Accounts payable in the Company's March 31, 1997 financial statements included
approximately $9,835,000 due Delta Air Lines, Inc. for these services.
Trade receivables in the Company's March 31, 1997 financial statements
include amounts due from Delta Air Lines, Inc. for transportation of passengers
and cargo of approximately $7,822,000. Approximately 45% of COMAIR's passengers
in fiscal 1997 connected with Delta Air Lines, Inc.
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 outstanding 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) 21.0%
1030 Delta Blvd.
Hartsfield Atlanta
International Airport
Atlanta, Georgia 30320
</TABLE>
<PAGE> 19
16
<TABLE>
<CAPTION>
<S> <C> <C>
FMR Corp. 5,072,895(2) 11.4%
82 Devonshire Street
Boston, MA 02109
</TABLE>
(1) Based on Form 5 report filed with the Securities and Exchange Commission in
April 1997.
(2) Based on a 13G report filed with the SEC in February 1997.
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 1998. 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 1998. 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 1998 Shareholders' Meeting must submit their proposals to Comair
Holdings, Inc. at its offices on or before March 1, 1998.
OTHER MATTERS
Any other matters considered at the meeting including adjournment will
require the affirmative vote of the majority of shares voted.
<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS: PLEAS MARK
YOUR VOTE AS [X]
INDICATED BY
THIS EXAMPLE
1. To elect the following three persons as
Class B Directors: David R. Mueller, David A. Siebenburgen, 3. To ratify the selection of Arthur Andersen
Raymond A. Mueller LLP as independent certified public
FOR WITHHOLD accountants for fiscal 1998.
all nominees AUTHORITY To withhold authority to vote for
listed to the right to vote for all any individual nominee, write that
(except as marked nominees listed nominee's name in the space below:
to the contrary) to the right FOR AGAINST ABSTAIN
[ ] [ ] ----------------------------------- [ ] [ ] [ ]
2. to approve amendments to the 1990 Stock Authority to transact such other business as may properly
option Plan. come before the meeting or any adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ] 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
proposals 2 and 3.
,1997
---------------------------------------------
--------------------------------------------------
--------------------------------------------------
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.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS.
FOLD AND DETACH HERE
</TABLE>
<PAGE> 21
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 12, 1997, 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.
(Continued on reverse side)
FOLD AND DETACH HERE
