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:
[X] Preliminary Proxy Statement
[ ] Confidential, For use of Commission only (as permitted by Rule
14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a.12
CCAIR, INC.
(Name of Registrant as Specified In its Chapter)
CCAIR, INC.
(Name of Person(s) Filing Proxy Statement)
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: Common Stock
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(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): Not Applicable
(4) Proposed maximum aggregate value of transaction: Not
Applicable
(5) Total fee paid: Not Applicable
[ ] 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 the filing.
(1) Amount Previously Paid: $0
(2) Form, Schedule or Registration Statement No.: Not Applicable
(3) Filing Party: Not Applicable
(4) Date Filed: Not Applicable
<PAGE>
CCAIR, INC.
- -------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 25, 1998
- ------------------------------------------------------------------------------
Notice is hereby given that the Annual Meeting of Stockholders of
CCAIR, Inc. will be held at the Sheraton Airport Plaza Hotel, 3315 South I-85 at
Billy Graham Parkway, Charlotte, North Carolina on June 25, 1998 at 10:00 a.m.,
for the following purposes:
1. To elect six Directors;
2. To approve the adoption of an Amended and Restated
Certificate of Incorporation;
3. To approve the adoption of a 1998 Stock Incentive Plan;
4. To consider ratification of the selection of Arthur Andersen
LLP as independent auditors for the fiscal year ending
December 31, 1998; and
4. To transact such other business as may properly come before
the Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on May 1, 1998
as the record date for the determination of stockholders entitled to notice of
and to vote at the Meeting. A complete list of the stockholders entitled to vote
at the Meeting will be available at the office of CCAIR, Inc., 4700 Yorkmont
Road, Second Floor, Charlotte, North Carolina, at least ten days prior to the
Meeting.
Your attention is directed to the accompanying Proxy Statement.
By Order of the Board of Directors,
Eric W. Montgomery
Secretary
Charlotte, North Carolina
May 11, 1998
<PAGE>
--------------------------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 25, 1998
-------------------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of CCAIR, Inc. (the "Company") for the
Annual Meeting of Stockholders to be held on June 25, 1998, and at any
adjournment thereof. The address of the Company's principal executive office is
4700 Yorkmont Road, Second Floor, Charlotte, North Carolina 28208. This Proxy
Statement and accompanying form of proxy are expected to be mailed to
stockholders on or about May 11, 1998.
The enclosed proxy is being solicited by the Board of Directors of the
Company. A stockholder who executes the accompanying form of proxy may revoke
his proxy at any time before it is voted by filing with Eric W. Montgomery,
Secretary of the Company, at P. O. Box 19929, Charlotte, North Carolina
28219-0929, a written revocation or a properly executed proxy bearing a later
date, or by attending and voting in person at the Annual Meeting. All shares
represented by valid proxies received pursuant to the solicitation and prior to
the Meeting and not revoked before they are exercised will be voted, and, if a
choice is specified with respect to any matter to be acted upon, the shares will
be voted in accordance with such specifications. If no specification is
indicated, the shares will be voted in accordance with the recommendations of
the Board of Directors.
If a properly executed proxy is returned and the stockholder has
abstained from voting on any matter, the shares represented by the proxy will be
considered present at the Meeting for purposes of determining a quorum and for
calculating the vote, but will not be considered to have been voted in favor of
such matter. If an executed proxy is returned by a broker holding shares in
street name which indicates that the broker does not have discretionary
authority as to certain shares to vote on one or more matters, such shares will
be considered present at the Meeting for purposes of determining a quorum, but
not for purposes of calculating a vote with respect to such matter. With respect
to the election of Directors, the vote required is a majority of the shares
actually voted. As a result, abstentions and broker nonvotes will not affect the
outcome of this matter.
The expense of the solicitation of proxies, including the costs of
preparing and distributing the proxy materials, the handling and tabulation of
proxies received and charges of brokerage houses and other institutions,
nominees or fiduciaries in forwarding such documents to beneficial owners, will
be paid by the Company. In addition to the mailing of proxy materials,
solicitation may be made in person or by telephone or telegraph by Directors,
Officers or regular employees of the Company. Such Directors, Officers and
employees will not receive additional compensation for such services.
At a meeting of the Board of Directors of the Company on February 9,
1998, the directors approved a change in the fiscal year end of the Company from
June 30 to December 31. This Proxy Statement reflects the change in fiscal year
end and the change in the time of year for the Company's Annual Meeting of
Stockholders. Information provided in this Proxy Statement will generally
reflect the calendar year ended December 31, 1997 and the two prior fiscal years
ended June 30, 1997 and June 30, 1996, respectively.
VOTING SECURITIES OUTSTANDING
Only stockholders of record at the close of business as of May 1, 1998,
will be entitled to notice of and to vote at the Annual Meeting of Stockholders.
As of the close of business on May 1, 1998, the Company had 8,365,695
outstanding shares of Common Stock par value $0.01 per share; there are no other
voting securities.
The presence, in person or by proxy, of the holders of a majority of
the shares of Common Stock entitled to vote at the Annual Meeting constitutes a
quorum for the transaction of business.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of May 1, 1998 the following entities were known by the Company as
the beneficial owner of more than five percent of the Common Stock of the
Company:
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS(1)
---------------- -----------------------------------
Barlow Partners, L.P. 688,617(2) 6.9%
65 East 96th Street
Apr. 14A
New York, New York 10128
PAR Investment Partners, L.P. 685,000(3) 6.9%
c/o Par Capital Management, Inc.
One Financial Center
Suite 1600
Boston, Massachusetts 02111
- -----------------------
(1) The percentage of shares of Common Stock is based upon the
outstanding shares (8,365,695) and the shares subject to
rights to acquire shares presently exercisable or exercisable
within sixty days of the date of this Proxy Statement
(1,596,993).
(2) Barlow Partners, L.P. is a Texas limited partnership that has
sole beneficial ownership of 538,617 shares and a presently
exercisable warrant to acquire 150,000 shares of Common Stock.
George Murnane, III, a director and nominee for election as a
director, is the sole general partner of Barlow Partners, L.P.
and Barlow Partners, L.P. reports that Mr. Murnane has
beneficial ownership of all of the shares. See "Security
Ownership of Directors and Executive Officers" for additional
information on the beneficial ownership of Mr. Murnane.
Barlow Partners, L.P., in an amendment filed on April 14, 1998
to its Schedule 13-D, reports that each of the limited
partners of Barlow Partners, L.P. shares beneficial ownership
of a portion of the shares of Common Stock held by Barlow
Partners, L.P. The limited partners are Jonathan G. Ornstein,
Alexius A. Dyer III and James E. Swigart.
Barlow Partners, L.P. states that Jonathan G. Ornstein has
shared power to vote or to direct the vote and to dispose or
to direct the disposition of 370,200 shares as a result of his
limited partnership interest. It is reported that Mr. Ornstein
has shared beneficial ownership of 44,500 shares of Common
Stock held by his wife and minor children. Finally, Mr.
Ornstein has sole beneficial ownership of 62,500 shares of
Common Stock, including 17,500 shares which he has a right to
acquire within 60 days. Mr. Ornstein reports total beneficial
ownership of 477,200 shares, without giving effect to the
warrant to acquire 150,000 shares, or 4.8% of the outstanding
shares and presently exercisable rights to acquire Common
Stock.
Barlow Partners, L.P. states that Alexius A. Dyer III has
shared power to vote or to direct the vote and to dispose or
to direct the disposition of 20,000 shares as a result of his
limited partnership interest. Mr. Dyer reports total
beneficial of 20,000 shares, without giving effect to the
warrant to acquire 150,000 shares or less than 1% of the
outstanding shares and presently exercisable rights to acquire
Common Stock.
Barlow Partners, L.P. states that James E. Swigart has shared
power to vote or to direct the vote and to dispose or to
direct the disposition of 128,417 shares as a result of his
limited partnership interest. It is reported that Mr. Swigart
has sole beneficial ownership of 51,000 shares, including
7,500 shares which he has a right to acquire within 60 days.
Mr. Swigart reports total beneficial ownership of 179,417
shares, without giving effect to the warrant to acquire
150,000 shares, or 1.9% of the outstanding shares and
presently exercisable rights to acquire Common Stock.
(3) PAR Investment Partners, L.P. is a Delaware limited
partnership ("PIP") and its general partner is PAR Group,
L.P., a Delaware limited partnership ("PAR Group"). PAR
Capital Management,
2
<PAGE>
Inc., a Delaware corporation ("PAR Capital") is the sole
general partner of PAR Group. PIP, PAR Group and PAR Capital
jointly report that they have sole beneficial ownership of the
shares.
The presence, in person or by proxy, of the holders of a majority of
the shares of Common Stock entitled to vote at the Annual Meeting constitutes a
quorum for the transaction of business.
ELECTION OF DIRECTORS
Six Directors will be elected at the Annual Meeting to serve for a
one-year term and until their successors have been duly elected and qualified.
Stockholders do not have cumulative voting rights in the election of Directors.
Each shareholder is entitled to one vote for each share held for each Director.
Unless authority is withheld, it is the intention of the persons named
in the enclosed form of proxy to vote FOR the election as Directors of the
persons identified as nominees for Directors in the table below. If the
candidacy of any one or more of such nominees should, for any reason, be
withdrawn, the proxies will be voted FOR such other person or persons, if any,
as may be nominated by the Board of Directors. All nominees have consented to be
named herein as standing for election to the Board of Directors and have
consented to serve if elected.
The following information is furnished with respect to the nominees for
election to the Board of Directors of the Company:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION FOR PAST FIVE YEARS DIRECTOR SINCE
----- ----- ----------------------------------------- --------------
<S> <C> <C> <C>
K. Ray Allen 51 Chief Executive Officer and President, Computer 11/15/94
Intelligence, Incorporated, a computer software
engineering firm (1981 to present); Chief Executive
Officer and President, Burl Software Laboratories,
Incorporated, a computer software development and
marketing firm (1992 to June 1994).
Kenneth W. Gann 59 Chief Executive Officer and President of the Company 11/01/90
(November 1990 to present).
Gordon Linkon 69 Retired (September 1993); Chief Executive Officer 11/15/94
and President, USAir Shuttle, commercial airline, New
York, NY (April 1992 to September 1993); Vice
President USAir Express Division, USAir Group, Inc.,
commercial airline, Arlington, VA (1988 to April 1992).
Eric W. Montgomery 38 Vice President of Finance, Secretary and Treasurer 11/13/97
of the Company (February 1995 to present); Controller,
Hunter Farms, Inc. a division of a regional grocery chain,
(March 1993 to February 1995); Assistant Controller,
Denny's, Inc., a restaurant chain (April 1990 to February 1993.
George Murnane, III(1) 40 Executive Vice President and Chief Financial Officer, 01/24/97
International Airline Support Group, Inc. (June 1996 to
present); aviation consultant (March-June 1996);
Executive Vice President and Chief Operating Officer,
Atlas Air, Inc. (October 1995 to February 1996);
investment banker, Merrill Lynch & Co., investment
banking firm (1986-1995).
Dean E. Painter, Jr.(2) 54 Chairman of the Board and Chief Executive Officer, 08/01/84
CLG, Inc., computer leasing and sales company,
company, Raleigh, NC (1980 to present).
</TABLE>
3
<PAGE>
(1) Mr. Murnane serves as a director of International Airline Support
Group, Inc., a publicly held company listed on the American Stock
Exchange.
(2) Mr. Painter serves as a director of Centura Banks, Inc., a publicly
held company listed on the New York Stock Exchange.
During the calendar year ended December 31, 1997, the Board of
Directors held a total of two (2) regular and special meetings. Each Director
then serving attended 75% or more of the total number of meetings of the Board
and of the committees of the Board on which he served, except for Mr. Gordon
Linkon who was absent for both meetings.
The Board of Directors of the Company has the following standing
Committees: Audit Committee, Nominating Committee, Stock Option Committee and
Compensation Committee. All of the Committees, except for the Audit Committee,
each met once during the calendar year ended December 31, 1997.
The Audit Committee confers with the Company's independent auditors and
reviews the scope of auditing of the Company's books and accounts and the
reports submitted by the auditors. The Committee also reviews, with the
independent auditors and appropriate Company personnel, procedures and methods
employed in connection with the Company's management policies relating to
internal controls. Reports are made by the Committee to the Board from time to
time. The members of the Audit Committee are Messrs. K. Ray Allen and Gordon
Linkon.
The Nominating Committee recommends to the Board the appropriate size
of the Board of Directors and the names of candidates for nomination to the
Board. The Committee will consider qualified candidates recommended by
stockholders. In order for a candidate recommended by a stockholder to be
considered as a nominee at the next Annual Meeting, the name of such candidate,
together with a written description of the candidate's qualifications, must be
received at the Company's principal executive offices on or before November 12,
1998. The members of the Nominating Committee are Messrs. Kenneth W. Gann and
Dean E. Painter, Jr.
The Stock Option Committee has administered the Company's Amended and
Restated Stock Option Plan and will administer the 1998 Stock Incentive Plan, if
adopted. This Committee is composed of Directors who will not be eligible for
discretionary grants under the 1998 Stock Incentive Plan. The Committee will
have full authority, in accordance with the requirements of the 1998 Stock
Incentive Plan, to determine whether to grant various types of stock awards to
eligible recipients and to determine the size, terms and restrictions on stock
awards granted. The members of the Stock Option Committee are Messrs. Gordon
Linkon and George Murnane, III.
The Compensation Committee recommends to the Board appropriate levels
and types of compensation for each Executive Officer or position and Director of
the Company. The Committee will also make recommendations on various employee
benefits or benefit plans considered by the Board of Directors. The members of
the Compensation Committee are Messrs. Dean E. Painter, Jr. and K. Ray Allen.
The members of the Board of Directors do not receive fees in exchange
for their service to the Company. On November 14, 1996, the Board of Directors
adopted a Directors' Compensation Stock Option Plan to compensate directors for
their service as members of the Board of Directors. Each director received a
grant of options to purchase 20,000 shares of the Company's Common Stock
annually. The Directors' Compensation Stock Option Plan has been terminated and
will be replaced by the 1998 Stock Incentive Plan, if adopted. Under the 1998
Stock Incentive Plan, directors will receive options to purchase 20,000 shares
of Common Stock on an annual basis in lieu of directors' fees. See disclosure
under headings "Compensation Committee Interlocks and Insider Participation",
"Certain Relationships and Related Transactions" and "1998 Stock Incentive Plan"
for additional information.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of May 1, 1998, certain information
with respect to the beneficial ownership for each of the Directors of the
Company and of all Directors and Executive Officers as a group, of the
outstanding shares of the Company's Common Stock, which is the only class of
voting securities of the Company. Each of the individuals listed below possesses
sole voting and investment power with respect to the shares listed opposite his
name, unless noted otherwise.
4
<PAGE>
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNERSHIP PERCENT OF CLASS(9)
---- ----------------------- -----------------
Kenneth W. Gann 400,793(1) 4.0%
Dean E. Painter, Jr. 332,000(2) 3.3%
K. Ray Allen 128,750(3) 1.3%
Gordon Linkon 135,000(4) 1.4%
George Murnane, III 711,117(5) 7.1%
Eric W. Montgomery 65,000(6) 0.7%
Peter J. Sistare 65,000(7) 0.7%
All Directors and Executive
Officers as a Group (7 persons) 1,837,660(8) 18.4%
- -----------------
(1) Mr. Gann has the right to acquire 400,243 shares pursuant to
presently exercisable options.
(2) Mr. Painter has the right to acquire 282,000 shares pursuant
to presently exercisable options and warrants.
(3) Mr. Allen has the right to acquire 128,750 shares pursuant to
presently exercisable options and warrants.
(4) Mr. Linkon has the right to acquire 105,000 shares pursuant to
presently exercisable options and warrants.
(5) Mr. Murnane has the right to acquire 42,500 shares pursuant to
presently exercisable options and warrants. Mr. Murnane has
sole voting and dispositive power with respect to the 538,617
shares of the Company's Common Stock and rights to acquire
150,000 shares of Common Stock owned by Barlow Partners, L.P..
See discussion under "Security Ownership of Certain Beneficial
Owners" for additional information.
(6) Mr. Montgomery has the right to acquire 65,000 shares pursuant
to presently exercisable options.
(7) Mr. Sistare has the right to acquire 65,000 shares pursuant to
presently exercisable options.
(8) Includes 1,757,110 shares which Executive Officers and
Directors have the right to acquire pursuant to presently
exercisable options and warrants.
(9) All percentage calculations assume all presently exercisable
stock options and warrants have been exercised.
MANAGEMENT
Executive Officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION AND BACKGROUND
---- --- ------------------------
<S> <C> <C>
Kenneth W. Gann 59 Chief Executive Officer, President and Director of the Company (November
1990 to present).
5
<PAGE>
<CAPTION>
<S> <C>
Eric W. Montgomery 38 Vice President of Finance, Director of the Company, Secretary and Acting Treasurer
of the Company (February, 1995 to present); Controller, Hunter Farms, Inc.,
a division of a regional grocery chain, High Point, NC (March 1993 to
February 1995); Assistant Controller, Denny's, Inc., a restaurant chain,
Spartanburg, SC (April 1990 to February 1993).
Peter J. Sistare 34 Vice President of Flight Operations of the Company (April 1998 to present);
Vice President Operations (March 1994 to present); Vice President of
Maintenance (December 1993 to March 1994); Director of Maintenance of the
Company (December 1990 to December 1993). Mr. Sistare joined the
Company in April 1986 as a mechanic and has served as Manager of Avionics,
Aircraft Instructor, Manager of Maintenance and Acting Director of
Maintenance before assuming his position of Director of Maintenance of the
Company.
</TABLE>
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information concerning
the compensation paid or accrued by the Company on behalf of the Company's Chief
Executive Officer. None of the Company's other executive officers had annual
income in excess of $100,000, the threshold level for reporting under the SEC
rules. Thus, only the Chief Executive Officer is a Named Executive Officer for
purposes of disclosure under the SEC rules.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
=======================
LONG-TERM
COMPENSATION
====================================================================================================================
Annual
Compensation Awards
===================================================================================================================================
Other Annual All Other
Name and Year Salary Bonus Compensation(2) Options(2) Compensation
Principal Position Ended(1) ($) ($) ($) (#) ($)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
12/1997 149,038 --- ----- 28,400(3) 11,513(4),(5)
Kenneth W. Gann
Chief Executive
Officer and
President
-------------------------------------------------------------------------------------------------------------
6/1997 139,181 --- ----- 32,725(3) 11,777(4),(5)
--------------------------------------------------------------------------------------------------------------
6/1996 131,040 --- ----- 33,625(3) 8,655(4),(5)
===================================================================================================================================
</TABLE>
(1) Since the Company changed its fiscal year end from June 30 to December
31, the information in the table relates to the calendar year ended
December 31, 1997 and the prior two fiscal years ended June 30, 1997
and June 30, 1996, respectively.
(2) The Company has not issued Stock Appreciation Rights (SARs). This
column reflects the stock options issued under its Amended and Restated
Stock Option Plan and Directors' Compensation Stock Option Plan.
(3) Mr. Gann received options to purchase 8,400, 12,725 and 19,625 shares
of Common Stock in the calendar year ended December 31, 1997, and in
the fiscal years ended June 30, 1997 and 1996, respectively, as
additional consideration for loans to the Company. Options to purchase
4,850 shares of stock issued in calendar year ended December 31, 1997
were included in the options for fiscal year ended June 30, 1997.
6
<PAGE>
(4) The Company purchased a key man life insurance policy on Mr. Gann in
the face amount of $1 million; 60% of proceeds to Company and 40% to
Mr. Gann's spouse. The amounts included in All Other Compensation
represent that portion of the premium paid by the Company that funds
the death benefit for Mr. Gann's spouse.
(5) Amounts included under All Other Compensation are for premiums for
supplemental life insurance and medical insurance paid by Company.
OPTION GRANTS IN LAST CALENDAR YEAR
The following table sets forth the individual grants of stock options
made to the Named Executive Officer during the calendar year ended December 31,
1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST CALENDAR YEAR
====================================================================================================================================
Potential Realized Value
at Assumed Annual
Individual Rates of Stock Price
Grants Appreciation for
Option Term(2)
- --------------------------------------------------------------------------------------------------
% of Total Exercise
Options Options Granted or Base Expir-
Granted(1) to Employees in Price ation 5% 10%
Name (#) Fiscal Year ($/sh) Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kenneth W. Gann 1,250 1.9% $1.75 01/15/07 $ 1,376 $ 3,486
1,100 1.7% $1.875 03/20/07 $ 1,297 $ 3,287
1,250 1.9% $1.8175 05/14/07 $ 1,429 $ 3,621
1,250 1.9% $1.9375 06/17/07 $ 1,523 $ 3,860
1,250 1.9% $2.75 08/21/07 $ 2,162 $ 5,478
1,175 1.8% $3.50 10/20/07 $ 2,586 $ 6,554
20,000 30.1% $3.00 11/30/07 $ 37,734 $95,624
1,250 1.7% $2.6563 11/25/07 $ 1,879 $ 4,762
====================================================================================================================================
</TABLE>
(1) All options granted are Non-qualified Stock Options granted under the
Company's Amended and Restated Stock Option Plan or under the Company's
Directors' Compensation Stock Option Plan.
(2) These amounts are based on the assumed rates of appreciation as
suggested by the rules of the Securities and Exchange Commission over
the remaining term of the options and do not represent a prediction by
the Company of future stock prices. Actual gains, if any, on stock
option exercises are dependent upon the future performance of the
Company's Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table sets forth the aggregate value of unexercised
options to acquire shares of Common Stock held by the Named Executive Officer on
December 31, 1997 and the value realized upon the exercise of options during the
fiscal year ended December 31, 1997.
7
<PAGE>
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST CALENDAR YEAR
AND CALENDAR YEAR-END OPTION VALUES
===============================================================================================================================
NUMBER OF VALUE OF
UNEXERCISED UNEXERCISED
OPTIONS IN-THE-MONEY
SHARES AT OPTIONS
ACQUIRED DECEMBER 31, 1997 AT DECEMBER 31, 1997(2)
ON VALUE _________________________ _________________________
EXERCISE(1) REALIZED(1)
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth W. Gann -0- -0- 377,943 22,300 $653,378 $387
===============================================================================================================================
</TABLE>
(1) Mr. Gann did not exercise any stock options held by him during the
calendar year ended December 31, 1997.
(2) The value is calculated as the excess of market value of the Common
Stock as of December 31, 1997 over the exercise price, the last trading
day for the 1997 calendar year. On December 31, 1997, the last sales
price for the Company's Common Stock on the NASDAQ Small Cap Market was
$3.00.
COMPENSATION AGREEMENTS
Officers of the Company, except for Mr. Gann, Chief Executive Officer,
serve at the pleasure of the Board of Directors. Mr. Gann has an Employment
Agreement with the Company that is described below in the Report of the
Compensation Committee.
Mr. Dean E. Painter, Jr. and Mr. K. Ray Allen were serving as members
of the Compensation Committee of the Board of Directors of the Company as the
calendar year ended on December 31, 1997, but were not and have not been
officers or employees of the Company or any subsidiaries. Mr. John A. Adams, a
director whose term expired on November 13, 1997, also served as a member of the
Compensation Committee during the calendar year. Mr. Adams was not and has not
been an officer or employee of the Company or any subsidiaries.
The Company has engaged Talon Resources, Inc. over the last six fiscal
years as a consultant on aviation and financial matters, including assistance in
the preparation of the Chapter 11 plan of reorganization for the Company. Talon
Resources has performed airline and financial planning services for the Company.
It billed at an hourly rate, plus travel expenses, that has not increased since
last approved in Bankruptcy Court. Records of hours for work performed are
submitted to the Company's President for approval. John A. Adams, a Director of
the Company, is the President and fifty-percent shareholder of Talon Resources,
Inc. At the inception of the Company's relationship with Talon Resources, Inc.,
John A. Adams was not a Director of the Company. Since the hourly billing rate
of Talon Resources, Inc. did not change while John A. Adams was a Director of
the Company, the Company believes the rate charged by Talon Resources, Inc.
reflects the rate which might have been obtained from a nonaffiliated party. In
the calendar year ended December 31, 1997, Talon Resources, Inc. received
payments in the aggregate amount of $25,162 for services rendered in late 1996
and calendar year 1997.
8
<PAGE>
During the calendar year ended December 31, 1997, Mr. Adams extended
short-term secured lines of credit to the Company as follows:
=============================================================================
DATE DATE WARRANTS
LOANED AMOUNT EXPIRED GRANTED
- ----------------------------------------------------------------------------
01/15/97 150,000 01/31/97 3,750
03/20/97 150,000 04/02/97 3,750
05/15/97 150,000 05/30/97 3,750
06/16/97 150,000 07/08/97 3,750
===========================================================================
The lines of credit were extended to assist the Company with short-term
cash flow. The interest rate was at ten percent (10%) on the lines of credit.
The lines of credit were secured by liens on certain personal property owned by
the Company. As additional consideration, the Company issued warrants to
purchase 2,500 shares of Common Stock at the then current market price for each
$100,000 loaned. If the loan was not repaid at the end of the month in which it
was made, the loan was considered a new loan for purposes of the issuance of
warrants. These warrants were not issued pursuant to a plan under Rule 16b-3.
Given the size of the loans and the time and expense of obtaining outside
credit, the Company did not solicit these funds from unaffiliated parties.
REPORT OF THE COMPENSATION COMMITTEE
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
COMPANY'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT INCORPORATE BY REFERENCE, IN
WHOLE OR IN PART, SUBSEQUENT FILINGS INCLUDING THIS PROXY STATEMENT, THE
FOLLOWING REPORT OF THE BOARD OF DIRECTORS AS WELL AS THE PERFORMANCE GRAPH SET
FORTH ON PAGE 11 HEREOF SHALL NOT BE DEEMED TO BE INCORPORATED INTO ANY SUCH
FILINGS.
The SEC rules addressing disclosure of executive compensation in proxy
statements require a report by a Compensation Committee or similar entity or by
the Board of Directors as a whole concerning compensation policies applicable to
executive officers including the specific relationship of corporate performance
to executive compensation. The focus of this Report is to be the compensation
paid or accrued for the last calendar year.
The compensation policies of the Company for the calendar year ended
December 31, 1997 were established by the Compensation Committee and the Stock
Option Committee of the Board of Directors. The Compensation Committee is
composed of two nonemployee Directors and has oversight responsibility for
executive compensation and executive benefit program of the Company, except for
the Amended and Restated Stock Option Plan (the "Stock Option Plan") which is
administered by the Stock Option Committee. This bifurcation of responsibilities
resulted from the necessity of administration by disinterested Directors under
Rule 16b-3 of the Securities Exchange Act of 1934, as amended.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation policies during the last calendar
year has focused on cash compensation in the form of annual salary and incentive
compensation in the form of stock options. Given the financial circumstances
during that period, the objective was to pay salaries at a level sufficient to
hire and retain executive officers but consistent with the cash flow needs of
the Company. Executive officers were provided opportunity for far greater
compensation by the award of stock options. Directors of the Company were also
compensated through the award of stock options in lieu of Directors' fees or
other benefits.
Mr. Gann's compensation has been composed of two elements: (1) a base
salary, effective in 1997, of $160,000 adjusted for inflation; and (2) the
awards of stock options. Mr. Gann received stock options to purchase 200,000
shares of Common Stock as an inducement to join the Company as its President and
Chief Executive Officer when it was in the first phase of its Chapter 11
Reorganization proceeding. The stock options became exercisable in three roughly
equal annual installments.
9
<PAGE>
Upon the recommendation of the Compensation Committee, the Company
entered into a new employment agreement with Mr. Gann. This employment agreement
provided for a base salary of $145,000 and contained a three-year term,
commencing in February of 1997. The base salary was increased to $160,000 in
November, 1997. The Compensation Committee recommended the new employment
agreement in light of the uncertainties related to the Company's financial
circumstances, as a means to retain the services of Mr. Gann. Other than the
change of the start date for the term of three years, there was no material
difference to the employment agreement then in effect.
In November of 1997, Mr. Gann received grants of options to purchase
20,000 shares of Common Stock at market prices under the Company's Directors'
Compensation Stock Option Plan. Mr. Gann also received grants of options in
connection with loans made to the Company. See discussion under "Certain
Relationships and Related Transactions.
Upon recommendation of the Compensation Committee, the Board of
Directors adopted on November 14, 1996, a Bonus Compensation Plan in order to
provide incentives for the officers to remain with the Company. The Bonus
Compensation Plan provides that two percent (2%) of the net profits of the
Company above a profit target level will be set aside as a bonus pool for the
officers of the Company. The Board of Directors would allocate the bonus pool
among the officers after the completion of the annual audit. No officer would
receive a payment under the Bonus Compensation Plan unless that officer was in
the employ of the Company at the end of the fiscal year in which the allocation
was made. The profit target level for the fiscal year ended June 30, 1997 was
$2.5 million. Since that target level was not met, there is no bonus pool to be
allocated. On account of the change in fiscal year end, no profit level target
was in place for calendar year 1997. A profit target level for calendar year
1998 has yet to be determined by the Board of Directors.
During the last calendar year, Mr. Gann's level of cash compensation
was not directly related to measures of the Company's performance. The cash
compensation was provided in accordance with the employment agreement stated
above. Incentive compensation will be paid in the form of cash bonuses under the
Bonus Compensation Plan and through the issuance of stock options. The
Compensation Committee intended to set the profit target level at high levels
compared to the Company's prior operating results, in order that bonus payments
will be made when the Company's operating results show significant improvement.
The Compensation Committee does not currently have specific policies concerning
the relationship between the Company's performance and the issuance of stock
options, preferring to assess each issuance of stock options in light of the
surrounding facts and circumstances. The issuance to Mr. Gann of options to
purchase 20,000 shares of the Common Stock of the Company during the previous
calendar year was in lieu of directors' fees.
COMPENSATION COMMITTEE
Dean E. Painter, Jr. K. Ray Allen
STOCK OPTION COMMITTEE
Gordon Linkon George Murnane, III
PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative return on the
Company's Common Stock since June 30, 1993 with the cumulative total return in
the CRSP Index for the Nasdaq Stock Market (U.S. companies) and the CRSP Index
for NASDAQ stocks having an SIC Code's of 3700-3799, 4200-4299, 4400-4599 and
4700-4799 U.S and Foreign over the same period. The companies comprising those
SIC Codes are engaged in trucking and transportation. The graph assumes an
initial $100.00 investment on June 30, 1993.
10
<PAGE>
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE RETURNS
PERFORMANCE GRAPH FOR CCAIR, INC.
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
PRODUCED ON 4/15/98 INCLUDING DATA TO 12/31/97
CRSP Total Returns Index 6/30/93 6/30/94 6/30/95 6/30/96 6/30/97 12/31/97
------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
CCAIR, Inc. 100.0 25.4 40.5 27.0 23.0 38.1
NASDAQ Stock Market 100.0 101.0 134.8 173.0 210.4 230.7
(US companies)
NASDAQ Trucking & 100.0 102.4 114.5 126.9 145.6 165.4
Transportation Stocks
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the calendar year ended December 31, 1997, Mr. Gann extended
short-term secured lines of credit to the Company. Their lines of credit were
extended to assist the Company with short-term cash flow. Please refer to the
disclosure under the heading "Compensation Committee Interlocks and Insider
Participation" for a description of the terms of the line of credit. At his
election, Mr. Gann was issued options to acquire shares of the Company's Common
Stock under the Company's Stock Option Plan. See page 9 for a more complete
description. Mr. Gann made loans as follows:
================================================================================
DATE LOANED AMOUNT DATE EXPIRED RELATED RIGHTS GRANTED
================================================================================
11/25/97 $45,000 11/30/97 1,125
10/20/97 47,000 10/31/97 1,175
09/29/97 50,000 09/30/97 -0-(1)
08/21/97 50,000 08/31/97 1,250
06/17/97 50,000 06/30/97 1,250
05/14/97 50,000 05/31/97 1,250
03/20/97 44,000 03/31/97 1,100
01/15/97 50,000 01/31/97 1,250
================================================================================
(1) Mr. Gann waived the grant of options in accordance with this loan.
In July of 1997, the Company engaged Barlow Partners, L.P. to serve as
its representative to negotiate a return agreement with the lessor of its Shorts
360 aircraft (the "Shorts Return Agreement"). If successful, Barlow Partners,
L.P. would receive a warrant to purchase 150,000 shares of Common Stock at an
exercise price of $2.00 per share. On April 21, 1998, a Shorts Return Agreement
was consummated and the warrant was issued to Barlow Partners, L.P. Mr. George
Murnane, a director of the Company, is the sole general partner of Barlow
Partners, L.P. See Note 2 on page 2 for additional information on Barlow
Partners, L.P.
During the calendar year ended December 31, 1997, Mr. Murnane also
extended short-term secured lines of credit to the Company in the amount of
$150,000 on August 26, 1997, and in the amount of $150,000 on October 20,
1997. Mr. Murnane received warrants to purchase 3,750 shares of Common Stock
with an exercise price of $2.875 and 3,750 shares of Common Stock with an
exercise price of $3.50, respectively. See page 9 for a description of this
loan program.
The Company believes that the foregoing transactions were contracted on
terms at least as favorable to the Company as could be obtained from unrelated
third parties.
11
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Officers and Directors and persons who own more than ten percent of
the Company's Common Stock to file reports of ownership or change in ownership
in the Company's Common Stock with the Securities and Exchange Commission. Based
solely on a review of those reports and on information supplied to the Company,
without independent inquiry, all Section 16(a) filing requirements applicable to
its executive Officers, Directors and greater than ten-percent shareholders were
satisfied.
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has approved, and recommends that the
shareholders adopt an Amended and Restated Certificate of Incorporation of the
Company in the form attached as Exhibit A (the "Amended Certificate of
Incorporation"). The proposed Amended Certificate of Incorporation increases the
number of shares of Common Stock which the Company is authorized to issue from
10,000,000 to 30,000,000 shares. In addition, the proposed Amended Certificate
of Incorporation eliminates the ability of the shareholders to take action
without a meeting and the power to act by written consent without a meeting.
The Board of Directors believes that additional shares of Common Stock
should be available for issuance by the Board of Directors from time to time for
proper corporate purposes. As of May 1, 1998, the Company had authorized capital
of 10,000,000 shares of Common Stock, of which 9,962,688 shares were issued and
outstanding or were reserved for issuance under outstanding options or warrants
to purchase Common Stock. Given that the Company has issued or reserved all but
37,312 of its currently authorized shares of Common Stock, the Board of
Directors believes that additional authorized shares are necessary to be
available for issuance from time to time for proper corporate purposes. The
Amended Certificate of Incorporation increases the number of authorized shares
of Common Stock from 10,000,000 to 30,000,000.
The newly authorized shares will be issuable from time to time by
action of the Board of Directors for any proper corporate purpose, without
shareholder approval unless required under the Bylaws or applicable law of
Delaware. These purposes could include payments of indebtedness with shares of
Common Stock, employee stock options, directors' stock options, financings,
payment of stock dividends, subdivision of outstanding shares through stock
splits and corporate acquisitions. Any additional stock issued may dilute the
Common Stock holdings of current Company shareholders.
At the present time, the Company has plans to issue the newly
authorized shares in connection with the Shorts Return Agreement and pursuant to
the Company's 1998 Stock Incentive Plan or in accordance with the Company's
established practice of issuing warrants in exchange for certain short-term
secured lines of credit. The Company has no other immediate plans to issue the
newly authorized shares, however, the Company may issue the shares in corporate
acquisitions or financings related to the Company's efforts to increase its
revenues through additional flying.
In connection with the Shorts Return Agreement, the Company issued a
promissory note in the amount of $9,725,000. This promissory note is due on
August 31, 1998, but the Company may exercise an option before August 31, 1998,
under which the Company will pay $1,675,000 in cash or freely tradeable stock,
return $130,000 in aircraft parts and issue a convertible subordinated note with
an original principal amount of $7,920,000. The convertible subordinated note is
convertible into Common Stock at $7.50 per share. Based upon the closing price
of the Company's Common Stock of $3.625 on April 24, 1998, the Company estimates
that it will use approximately 462,000 shares of Common Stock to exercise its
option and that it will need approximately 2,185,000 shares for the conversion
of the note.
Management is also proposing to its stockholders a new incentive
compensation plan. Under this plan, 1,800,000 shares of Common Stock will be
reserved for issuance for awards to officers, key employees and directors. See
page 14 under heading "1998 Stock Incentive Plan."
In addition to authorizing additional shares of Common Stock, the
Amended Certificate of Incorporation provides that no action required to be
taken at any annual or special meeting of the Shareholders may be taken by
shareholders without meeting, and the power of the shareholders to consent in
writing, without meeting, to the taking of any action is specifically denied.
12
<PAGE>
Presently, the Bylaws of the Company provide that action be taken or
which may be taken at any annual or special meeting of shareholders may be taken
without prior notice and without a vote if a consent in writing setting forth
the action so taken is signed by the holders of stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. The proposed amendment, which the Board of Directors has unanimously
approved, would eliminate the ability of the shareholders to take action without
a meeting of shareholders.
Under Delaware law, when shareholders are to take action at a meeting,
a corporation must give written notice of the meeting to all shareholders
entitled to vote, even when one shareholder or group will have a majority of the
vote to be cast. This prior notice allows minority shareholders to take whatever
action they deem appropriate to protect their interests, including seeking to
persuade majority shareholders to follow a different course, selling their
shares or litigation. If action is taken by majority holders by written consent,
no prior notice is necessary and minority holders may not have any opportunity
to protect their interests. The primary purpose of the amendment is to prevent
shareholder action without prior notice to all shareholders. The proposed
amendment will have the effect of preventing the shareholders of the Company
from taking action at any time other than an annual meeting (or a special
meeting authorized by the Board of Directors or other authorized persons) to
replace directors, amend the Certificate of Incorporation or take any other
action authorized to be taken by shareholders under Delaware law. Such a
provision may have the effect of discouraging potential purchasers from
attempting to acquire control of the Company or, in some cases, may discourage
the accumulation of large blocks of Common Stock.
The Board of Directors has no knowledge of any current unsolicited
effort by any party to accumulate Common Stock of the Company with a view to
gaining control, and the amendment is not being proposed in response to any such
action. The Board of Directors believes that it is important that shareholders
be able to discuss matters which may affect their rights, that the Board and the
shareholders be able to give advance consideration to any such action, and that
it is therefore appropriate for shareholders of a publicly held corporation to
take such action affecting the corporation and its shareholders only at a
meeting.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK WILL
BE NECESSARY FOR THE APPROVAL OF THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL.
1998 STOCK INCENTIVE PLAN
On April 27, 1998, the Board of Directors adopted the 1998 Stock
Incentive Plan (the "1998 Plan") subject to stockholder approval. At the time of
this adoption, the Company had two stock options plans -- the Amended and
Restated Stock Option Plan (the "Stock Option Plan") and the Directors'
Compensation Stock Option Plan (the "Directors' Plan"). Out of the authorized
1,375,000 shares under the Stock Option Plan, at April 24, 1998, options to
purchase 571,832 shares had been exercised, options to purchase 778,243 shares
were granted and outstanding and options to purchase 24,925 shares were
available for issuance. Out of the 300,000 authorized shares under the
Directors' Plan, at April 24, 1998, options to purchase 235,000 were granted and
outstanding, none had been exercised and options to purchase 65,000 shares were
available under the Plan. The Stock Option Plan will terminate by its terms on
February 12, 1999 and the Directors' Plan will terminate by its terms on
November 14, 1999.
In light of the limited number of shares available for the grant of
options and the impending termination of both plans, the Board of Directors
determined, therefore, that the Stock Option Plan and the Directors' Plan shall
be terminated and that a new stock incentive plan be adopted and presented to
shareholders for approval. The 1998 Plan has been developed to provide various
incentive grants in addition to the stock options under the prior plans. The
Company believes that the 1998 Plan will assist the Company in meeting the
competitive demands of attracting and retaining a productive work force. At the
same time, the Company will continue to use incentive compensation as a
significant part of its compensation policies to compensate officers, key
employees and directors.
The maximum number of shares to be issued under the 1998 Plan will be
1,800,000 shares of Common Stock. The exercise price for options granted under
the 1998 Plan is at least equal to 100% of the fair market value of the Common
Stock of the Company on the date of grant. The 1998 Plan permits the granting of
stock options, including incentive stock options ("ISOs") as defined under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
non-qualified stock options ("NQSOs") which do not qualify as ISOs. The
13
<PAGE>
purpose of the 1998 Plan is to reward and provide incentives for executive
officers and key employees of the Company by providing them with an opportunity
to acquire an equity interest in the Company, thereby increasing their personal
interest in its continued success and progress. The purpose of the 1998 Plan is
also to retain the services of executive officers and key employees as well as
to assist in attracting new executive officers and key employees.
The 1998 Plan is administered by the Stock Option Committee, which has
the sole and complete authority to select the employees (including executive
officers) who will receive options under the 1998 Plan. The Stock Option
Committee has the authority to determine the number of stock options to be
granted to eligible individuals, whether the options will be ISOs or NQSOs and
the terms and conditions of the options (which may vary from grantee to
grantee). The Stock Option Committee determines the period for which each stock
option may be exercisable, but in no event may a stock option be exercisable
more than ten years from the date the option becomes vested. The number of
shares available under the Stock Option Plan and the exercise price of the
options granted thereunder are subject to adjustment by the Stock Option
Committee to reflect stock splits, stock dividends, recapitalization, mergers,
or other major corporate actions.
The Stock Option Committee also has the authority under the 1998 Plan
to grant Stock Appreciation Rights ("SARs") to employees. SARs confer on the
holder a right to receive, upon exercise, the excess of the fair market value of
one share on the date of exercise over the grant price of the SAR as specified
by the Committee, which price may not be less than 100% of the fair market value
of one share on the date of grant of the SAR. The grant price, term, methods of
exercise, dates of exercise, methods of settlement and any other terms and
conditions of any SAR are determined by the Committee.
The 1998 Plan also provides for an annual grant of stock options to the
directors of the Company. Each director receives an option to acquire 20,000
shares of the Company's Common Stock on the date of the Company's Annual Meeting
of Shareholders. If a director is first elected to the Board on a date other
than the Annual Meeting of Shareholders, then the number of options granted is
adjusted to reflect the period of service on the Board until the next Annual
Meeting of Shareholders. Options granted to directors are not exercisable for a
period of six months after the date of grant.
The Board of Directors may discontinue, amend, or suspend the 1998 Plan
in a manner consistent with the Stock Incentive Plan's provisions, provided such
changes do not violate the federal or state securities laws.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
ENTITLED TO VOTE AND PRESENT IN PERSON OR BY PROXY AT THE ANNUAL MEETING WILL BE
NECESSARY FOR APPROVAL OF THE 1998 PLAN. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE ABOVE PROPOSAL.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as independent
certified public accountants to examine the Company's financial statements for
the next fiscal year ending December 31, 1998. This selection is being presented
to the stockholders for their ratification at the Annual Meeting. The Board of
Directors recommends a vote FOR ratification of the selection of Arthur Andersen
as independent public accountants.
PROPOSALS OF SECURITY HOLDERS
It is expected that the Company's Annual Meeting in 1999 will be held
on or about May 15, 1999. Stockholders desiring to submit proposals for action
at that meeting will be required to submit them to the Company on or about
November 13, 1998. Any shareholder proposal must also be proper in form and
substance as determined in accordance with the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder.
14
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other matter to be
presented at the Annual Meeting that is not listed in the Notice of Annual
Meeting and discussed above. If other matters are properly brought before the
Annual Meeting,however, the persons named in the accompanying form of proxy will
vote the proxy on such matters in accordance with their best judgment.
By Order of the Board of Directors
May 8, 1998
15
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CCAIR, INC.
CCAIR, Inc., a corporation organized and existing under the laws of the
General Corporation Law of the State of Delaware, hereby certifies as follows:
1. The name of the Corporation is CCAIR, Inc. (the "Corporation"). The
Corporation was originally incorporated under the name Carolina Sunbird
Airlines, Inc., and the original Certificate of Incorporation of the Corporation
was filed with the Secretary of State of the State of Delaware on July 16, 1984,
and has been subsequently amended from time to time (the original Certificate of
Incorporation and all amendments thereto are hereby collectively referred to as
the "Certificate of Incorporation").
2. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Amended and Restated Certificate of Incorporation
restates and integrates and further amends the provisions of the Certificate of
Incorporation.
3. This Amended and Restated Certificate of Incorporation set forth
below was approved by the Corporation's Board of Directors and Stockholders and
was duly adopted in accordance with the provisions of Sections 242 and 245 of
the Delaware General Corporation Law, the stockholders of the Corporation having
approved this Amended and Restated Certificate of Incorporation at a meeting of
stockholders duly held on ___________, 1998 at which a quorum was present.
4. The text of the Certificate of Incorporation is hereby restated and
further amended to read in its entirety as follows:
First. The name of the Corporation is CCAIR, Inc.
Second. The address of its registered office in the State of
Delaware is Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, 19801. The name of
the registered agent at such address is the
Corporation Trust Company.
Third. The nature of the business or purposes to be
conducted or promoted is to engage in any lawful act
or activity for which corporations may be organized
under the General Corporate Law of Delaware.
Fourth. The total number of shares which the Corporation has
authority to issue is Thirty Million (30,000,000)
shares of Common Stock, par value of One Cent ($0.01)
per share, with each stockholder of the Corporation
entitled to one (1) vote for each share of Common
Stock held by such stockholder.
Fifth. The Board of Directors is authorized to make, alter
or repeal the Bylaws of the Corporation. Election of
Directors need not be by written ballot.
Sixth. The name and mailing address of the incorporator is:
L. M. Curtis
100 West Tenth Street
Wilmington, Delaware 19801
Seventh. No action required to be taken or which may be taken
at any annual or special meeting of the stockholders
of the Corporation may be taken by stockholders
without meeting, and the power of stockholders to
consent in writing, without meeting, to the taking of
any action is specifically denied.
16
<PAGE>
Eighth. No Director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages
for breach of his or her fiduciary duty as a
Director, provided that nothing contained in this
Article 8 shall eliminate or limit the liability of a
Director (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which
involves intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the
General Corporation Law of the State of Delaware of
(iv) for any transaction from which the Director
derived an improper personal benefit. Any repeal or
modification of the foregoing provisions of this
article by the stockholders of the Corporation shall
not adversely affect any right or protection of a
Director of the Corporation existing at the time of
such repeal or modification.
Ninth. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights
conferred on stockholders herein are granted subject
to this reservation. Notwithstanding the foregoing,
the provisions set forth in Articles Seventh and
Eighth and this article may not be repealed or
amended in any respect unless such repeal or
amendment is approved by the affirmative vote of the
holders of not less than 66-2/3% of the total voting
power of all outstanding shares of voting stock of
this Corporation.
IN WITNESS WHEREOF, said CCAIR, Inc. has caused this Amended and
Restated Certificate of Incorporation to be signed by Kenneth W. Gann, its
President, and Eric W. Montgomery, its Secretary, this , day of , 1998.
CCAIR, INC.
By:
------------------
Title: President
----------------------
Attest:
- -----------------------------------
Secretary
17
<PAGE>
- ------------------------------------------------------------------------------
APPENDIX
PROXY
(side one)
<TABLE>
<CAPTION>
CCAIR, Inc.
4700 Yorkmont Road, Suite 205
Charlotte, North Carolina 28208
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of CCAIR, Inc. (the "Company") hereby
constitutes and appoints Kenneth W. Gann and Peter J. Sistare, and each of them,
with full power of substitution, attorneys and proxies to appear and vote, as
indicated below, all the shares of Common Stock of the Company held of record by
the undersigned on May 1, 1998 at the Annual Meeting of the Stockholders of the
Company to be held on June 25, 1998 and at any and all adjournments thereof.
<S> <C>
1. PROPOSAL TO ELECT THE SIX NOMINEES LISTED BELOW AS DIRECTORS TO SERVE
FOR A TERM EXPIRING AT THE ANNUAL MEETING FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1998 AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND
QUALIFIED.
____ FOR all nominees listed (except as marked to the contrary below)
____ WITHHOLD AUTHORITY to vote for all nominees listed below
(Instruction: To withhold authority to vote for any individual nominee, strike a line
through the nominee's name in the list below)
NOMINEES: Kenneth W. Gann, Dean E. Painter, Jr., K. Ray Allen, Gordon Linkon,
George Murnane, III and Eric W. Montgomery.
2. PROPOSAL TO ADOPT THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION.
____ FOR ____ AGAINST ____ ABSTAIN
3. PROPOSAL TO ADOPT THE 1998 STOCK INCENTIVE PLAN
____ FOR ____ AGAINST ____ ABSTAIN
4. PROPOSAL TO RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT
AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
____ FOR ____ AGAINST ____ ABSTAIN
</TABLE>
<PAGE>
PROXY
(side two)
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" PROPOSALS 1, 2, 3 AND 4. THE PROXIES ARE AUTHORIZED TO VOTE ON
SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF,
IN THEIR SOLE DISCRETION.
Dated: , 1998
----------------------------------
----------------------------------
----------------------------------
Signature of Stockholder(s)
Please sign exactly as name appears on this proxy. When shares
are held by joint tenants, both should sign. When signing on
behalf of a corporation or aprtnership, or as attorney, agent
or fiduciary, please indicate the capacity in which you are
signing.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE.
