King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
July 24, 1997
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: International Airline Support Group, Inc. (File No. 0-18352);
Preliminary Proxy Materials for the Annual Meeting of Stockholders
to be Held on September 22, 1997
Ladies and Gentlemen:
On behalf of International Airline Support Group, Inc. (the "Company"), we have
enclosed for filing pursuant to Rule 14a-6 of the Securities Exchange Act of
1934, as amended ("Exchange Act"), the Company's Preliminary Proxy
Statement and form of proxy for use in connection with the Company's
Annual Meeting of Stockholders to be held on September 22, 1997. The Company
has paid, by wire transfer to the EDGAR lockbox account, pursuant to Rule
14a-6 of the Exchange Act, $125 in payment of the filing fee for the proxy
materials. Definitive copies of the Proxy Statement are intended to be
first sent to stockholders on August 19, 1997.
The Preliminary Proxy Statement contemplates stockholder action with respect
to an amendment to the Company's 1996 Long-Term Incentive Compensation and
Share Award Plan to increase the number of shares of the Company's Common
Stock available for option grants pursuant to the Plan. The Plan was
approved by the Company's stockholders at a special meeting held on
September 30, 1996. The form of the Plan appears as Appendix B to the
Company's Proxy Statement/Prospectus dated August 29, 1996, which was
included as part of its Registration Statement on Form
S-4, File No. 333-08065.
If you have any questions regarding the enclosed, please contact the
undersigned at 404/572-4676.
Very truly yours,
/s/ Philip A. Theodore
Philip A. Theodore
PAT:rm
Enclosures
cc: Mr. George Murnane III
Securities and Exchange Commission
July 24, 1997
Page Two
<PAGE>
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
1954 Airport Road
Suite 200
Atlanta, Georgia 30341
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
International Airline Support Group, Inc.
The Annual Meeting of Stockholders of International
Airline Support Group, Inc. (the "Company") will be held at the
offices of the Company at the address listed above, on Monday,
September 22, 1997, at 10:00 a.m., local time, to consider and
vote on:
1. The election of directors.
2. The approval of an amendment to the Company's 1996 Long
Term Incentive and Share Award Plan ("Plan") to
increase from 598,782 to 713,782 the number of shares
available for grant under the Plan.
3. The approval of an amendment to the Company's Amended
and Restated Certificate of Incorporation to make the
provisions of Section 203 of the Delaware General
Corporation Law applicable to the Company.
4. The approval of an amendment to the Company's Amended
and Restated Certificate of Incorporation to provide
for three classes of directors with staggered terms of
up to three years such that approximately one-third of
the Board stands for election each year.
5. The ratification of the appointment of Grant Thornton,
LLP as independent auditors for the fiscal year of the
Company ending on May 31, 1998 ("fiscal 1998").
6. Such other matters as may properly come before the
meeting or any adjournments thereof.
The close of business on August 12, 1997, has been
fixed as the record date for determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof. A list of stockholders
entitled to vote at the Annual Meeting will be maintained during
the ten-day period preceding the meeting at the offices of the
Company in Atlanta, Georgia. Your attention is directed to the
proxy statement accompanying this notice.
By Order of the Board of
Directors,
JAMES M. ISAACSON
Secretary
Atlanta, Georgia
August 19, 1997
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
1954 Airport Road
Suite 200
Atlanta, Georgia 30341
PROXY STATEMENT
______________________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 22, 1997
This Proxy Statement is furnished to the holders of shares
of the $.001 par value per share Common Stock (the "Common
Stock") of International Airline Support Group, Inc. (the
"Company") in connection with the solicitation by the Company's
Board of Directors of proxies for use at the Annual Meeting of
Stockholders to be held at the offices of the Company at the
address listed above, on Monday, September 22, 1997, at 10:00
a.m. local time, and at any adjournments thereof (the "1997
Annual Meeting"). It is anticipated that this Proxy Statement
and accompanying form of proxy will be mailed to stockholders on
or about August 19, 1997.
The cost of this solicitation will be borne by the Company.
In addition to solicitation by mail, certain officers and
employees of the Company, who will receive no compensation for
their services other than their regular salaries, may solicit
proxies in person or by telephone or by written communication.
The Company may also make arrangements with brokerage houses,
custodians, nominees and other fiduciaries to send proxy material
to their principals at the Company's expense. The Company has
retained Corporate Investors Communications, Inc. to aid in
solicitation of proxies at a fee of approximately [$5,000], plus
certain expenses.
VOTING PROCEDURES
Voting Stock
Only holders of record of the Company's Common Stock, as of
the close of business on August 12, 1997 (the "Record Date") will
be entitled to vote at the 1997 Annual Meeting. The Company had
outstanding 2,395,095 shares of Common Stock on the Record Date,
each share being entitled to one vote on each matter submitted to
the stockholders.
Stockholders who do not expect to attend the 1997 Annual
Meeting are urged to execute and return the enclosed proxy card
promptly. Any stockholder signing and returning a proxy may
revoke the same at any time prior to the voting of the proxy by
giving written notice to the Secretary of the Company or by
voting in person at the meeting. All properly executed proxy
cards delivered by stockholders and not revoked will be voted at
the 1997 Annual Meeting in accordance with the directions given.
With respect to the proposal regarding election of directors,
stockholders may (a) vote in favor of all nominees, (b) withhold
their votes as to all nominees, or (c) withhold their votes as to
specific nominees by so indicating in the appropriate space on
the enclosed proxy card. With respect to each other proposal
being submitted to the stockholders for their consideration,
stockholders may (i) vote "FOR" such proposal, (ii) vote
"AGAINST" such proposal, or (iii) abstain from voting on such
proposal. If no specific instructions are given with regard to
the matters to be voted upon, the shares represented by a signed
proxy card will be voted "FOR" the election of all nominees for
director, "FOR" the proposal to amend the 1996 Long Term
Incentive and Share Award Plan (the "Plan") to increase from
598,782 to 713,782 the number of shares available for grant under
the Plan, "FOR" approval of an amendment to the Company's Amended
and Restated Certificate of Incorporation to make the provisions
of Section 203 of the Delaware General Corporation Law applicable
to the Company (the "Section 203 Amendment"), "FOR" approval of
an amendment to the Company's Amended and Restated Certificate of
Incorporation to provide for three classes of directors with
staggered terms of up to three years such that approximately one-
third of the Board stands for election each year (the "Classified
Board Amendment") and "FOR" the appointment of Grant Thornton
L.L.P. as independent accountants. Management knows of no other
matters that may come before the meeting for consideration by the
stockholders. However, if any other matter properly comes before
the meeting, the persons named in the enclosed proxy card as
proxies will vote upon such matters in accordance with their
judgment.
Quorum and Voting Requirements
A quorum at the Annual Meeting will consist of a majority of
the votes entitled to be cast by the holders of all shares of
Common Stock that are outstanding and entitled to vote. A
majority of the votes entitled to be cast by the holders of all
shares of Common Stock that are present at the meeting and
entitled to vote will be necessary to elect the director-nominees
listed herein, to amend the Plan to increase by 115,000 the
number of shares issuable under the Plan, to approve the Section
203 Amendment, to approve the Classified Board Amendment and to
ratify the appointment of Grant Thornton L.L.P. as independent
auditors. Abstentions and proxies relating to "street name"
shares for which brokers have not received voting instruction
from the beneficial owner ("Broker Non-Votes") are counted in
determining whether a quorum is present. With respect to all
matters submitted to the stockholders for their consideration,
other than the election of directors, abstention will be counted
as part of the total number of votes cast on such proposals in
determining whether the proposals have received the requisite
number of favorable votes, whereas Broker Non-Votes will not be
counted as part of the total number of votes cast on such
proposals. Thus abstentions will have the same effect as votes
against any given proposal, whereas Broker Non-Votes will have no
effect in determining whether any given proposal has been
approved by the stockholders. In the election of directors, the
nominees receiving the highest number of votes will be elected.
Therefore, withholding authority to vote for a director nominee
will have no effect.
ELECTION OF DIRECTORS (PROPOSAL NO. 1)
A board of four directors will be elected at the 1997 Annual
Meeting. The Board of Directors has nominated: Alexius A. Dyer
III, Kyle R. Kirkland, E. James Mueller and George Murnane III to
serve as directors until the next annual meeting of stockholders
or until their successors are elected and qualified, or if the
Classified Board Amendment is approved, for the terms specified
therein. Messrs. Dyer, Kirkland, Mueller and Murnane are
currently members of the Board of Directors. Each nominee has
consented to serve on the Board for the applicable term or until
his successor is duly elected and qualified. If any of the
nominees should be unable to serve for any reason (which
management has no reason to anticipate at this time), the Board
of Directors may designate a substitute nominee or nominees (in
which case the persons named as proxies in the enclosed proxy
card will vote all valid proxy cards for the election of such
substitute nominee or nominees), allow the vacancy or vacancies
to remain open until a suitable candidate or candidates are
located, or eliminate the vacancy. The affirmative vote of
holders of a majority of the issued and outstanding shares of
Common Stock having voting power, present in person or by proxy,
of the 1997 Annual Meeting is required to elect the persons
nominated.
Mr. Dyer, the Chairman, President and Chief Executive
Officer of the Company, and Mr. Murnane, the Executive Vice
President and Chief Financial Officer, have each entered into
employment agreements with the Company that provide, among other
things, that Messrs. Dyer and Murnane shall serve as members of
the Board during the terms of their respective Employment
Agreements. See "Executive Compensation -- Employment
Agreements."
The Board of Directors recommends a vote FOR each nominee
for director.
INFORMATION AS TO DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth certain information,
including ownership of the Company's Common Stock, as of August
12, 1997, with respect to: (i) each director; (ii) each
executive officer and (iii) all directors and executive officers
as a group.
<TABLE>
<CAPTION>
NAME AGE POSITION OFFICER OR DIRECTOR
SINCE
<S> <C>
Alexius A. Dyer III (1) 41 Chairman of the Board, President and Chief Executive Officer 1992 96,455 (4) 4.0%
George Murnane III (1) 39 Executive Vice President, Chief Financial Officer and Director 1996 33,433 (4) 1.4%
Kyle R. Kirkland (2)(3) 35 Director 1992 57,207 (4) 2.4%
E. James Mueller (2)(3) 51 Director 1991 99,072 (4) 4.1%
James M. Isaacson 36 Vice President of Finance, Treasurer and Secretary 1997 17,500 (4) *
Officers and Directors as a Group 303,667 12.7%
</TABLE>
___________________
* Less than one percent.
(1) Member of Executive Committee.
(2) Member of Audit Committee.
(3) Member of the Compensation Committee.
(4) Includes the following shares of Common Stock subject to
options exercisable presently or within sixty days:
Mr. Dyer, 89,818; Mr. Murnane, 33,333; Mr. Kirkland, 57,207;
Mr. Mueller, 64,072; and Mr. Isaacson, 17,500.
Alexius A. Dyer III has been the Chief Executive Officer of
the Company and Chairman of the Company's Board of Directors
since February 1995. Mr. Dyer has been a director of the Company
since 1992. Mr. Dyer served as President of the Company from
February 1994 to February 1995. From February 1991 to February
1994, Mr. Dyer served as Executive Vice President of Capital
Markets of the Company. Additionally, during 1991, he served as
the President and director of the Company's subsidiary, Barnstorm
Leasing, Inc., which was merged into the Company in July 1992.
George Murnane III has been Executive Vice President and
Chief Financial Officer of the Company since June 1996 and has
served as a Director since October 3, 1996. From March 1996
through June 1996, Mr. Murnane served as a consultant for the
aviation industry. From October 1995 through February 1996 he
served as Executive Vice President and Chief Operating Officer of
Atlas Air, Inc., an air cargo company. From 1986 to 1995 he was
affiliated with the New York investment banking firm of Merrill
Lynch & Co., most recently as Director in the firm's
Transportation Group. Mr. Murnane was named to the Board of
Directors of CC Air, Inc. in January 1997.
Kyle R. Kirkland has been a director of the Company since
July 1992. Mr. Kirkland has served as the President of Kirkland
Messina, Inc., an investment banking firm, since March 1994.
Mr. Kirkland was employed as Senior Vice President of
Dabney/Resnick, Inc., an investment banking firm now known as
Dabney/Resnick/Imperial, LLC ("D/R"), from June 1991 until
February 1994. D/R acted as the placement agent for certain debt
securities issued by the Company. Mr. Kirkland was employed as an
investment banker with Canyon Partners, Inc. and with Drexel
Burnham Lambert, Inc. from March 1990 through June 1991 and from
July 1988 through March 1990, respectively. Mr. Kirkland is also
a director of Steinway Musical Instruments, Inc. He also serves
on the boards of several privately held businesses.
E. James Mueller has been a director of the Company since
1991. Mr. Mueller has been a principal with J.M. Associates,
Inc., a business development consulting firm, since January 1992.
From June 1978 through December 1991, Mr. Mueller was the Vice
President of Sales/Marketing of Air Cargo Associates, Inc., a
Connecticut airline charter brokerage/sales corporation.
James M. Isaacson has been the Company's Vice President of
Finance and Treasurer since December 1996 and has served as
Secretary since July 1997. From April 1995 to December 1996 he
served as Director of Corporate Finance and Assistant Secretary
for ValuJet Airlines, Inc. From May 1984 through April 1995 he
served in a number of capacities for Delta Air Lines, Inc., where
he most recently served as Manager - Capital Markets & Analysis.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee, Kyle R. Kirkland
and E. James Mueller, have never been employees of the Company.
No interlocks existed and no insiders participated in the
Compensation Committee's deliberations or decisions regarding
salaries for the fiscal year ending May 31, 1997 ("fiscal 1997").
Compensation of Directors
The non-employee members of the Company's Board of Directors
received a $25,000 fee for their service on the Board during
fiscal 1997 pursuant to a Director's Compensation Plan that was
adopted during fiscal 1995. Directors are also reimbursed for
expense incurred in connection with the attendance of Board
meetings.
Committees and Meetings
The Board of Directors of the Company held two meetings
during the year ended May 31, 1997 and acted by written consent
on three occasions during such year. The Audit Committee, which
consists of Messrs. Kirkland and Mueller, held one meeting during
the year ended May 31, 1997. The functions of the Audit
Committee are (i) to recommend the appointment of the Company's
independent accountants, (ii) to meet periodically with the
Company's management and its independent accountants on matters
relating to the annual audit, internal controls, and accounting
principles of the Company, and the Company's financial reporting,
(iii) to review potential conflict of interest situations, where
appropriate, and (iv) to review proposals for major transactions.
The Compensation Committee, which consists of Messrs. Kirkland
and Mueller, did not meet formally during 1997 but acted from
time to time by unanimous written consent. The functions of the
Compensation Committee are (i) to review and approve all
employment and termination of executive officers, (ii) to monitor
compensation of all management staff, (iii) to review and approve
compensation of the Chief Executive Officer and other senior
management, and (iv) to administer the Company's 1996 Long Term
Incentive and Share Award Plan (the "Plan"). During fiscal 1997,
each director attended more than 75% of all meetings of the Board
of Directors and the committees on which he served.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") requires the Company's officers and
directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file
reports of ownership and changes in ownership on Forms 3, 4 and 5
with the Securities and Exchange Commission. Officers, directors
and greater than ten percent stockholders are required by law to
furnish the Company copies of all Forms 3, 4 and 5 they file.
Based solely on the Company's review of the copies of such
forms it has received and representations from certain reporting
persons, the Company believes that its officers, directors and
greater than ten percent beneficial owners complied with all
filing requirements applicable to them with respect to
transactions during 1997.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with
respect to the beneficial ownership of the Company's Common
Stock, as of August 12, 1997, by each person who was known by the
Company to own beneficially more than 5% of the Company's Common
Stock as of such date, based on information available to the
Company. Except as otherwise indicated, each person has sole
voting and dispositive power with respect to the shares
beneficially owned by such person.
<TABLE>
<CAPTION>
Name and Address Shared Beneficially Owned % of Shares Outstanding
- ---------------- ------------------------- -----------------------
<S> <C> <C>
W. Robert Ramsdell (1) 157,178 6.6%
474 Paseo Miramar
Pacific Palisades, California
90272
Cardinal Capital Management, 530,588 22.2%
L.L.C. (2)
Cardinal Recovery Partners, L.P.
One Fawcett Place
Greenwich, Connecticut 06830
Northeast Investors Trust (3) 224,540 9.4%
50 Congress Street, Room 1000
Boston, Massachusetts 02109
Kennedy Capital Management, Inc. 400,000 16.7%
(4)
10829 Olive Blvd.
St. Louis, Missouri 63141
</TABLE>
(1) Based on the Schedule 13D filed by Mr. Ramsdell on October
4, 1996.
(2) Based on the Schedule 13D filed by Cardinal Capital
Management, L.L.C. on October 4, 1996.
(3) Based on the records of the Company's transfer agent on
August 12, 1997.
(4) Based on the Schedule 13G filed by Kennedy Capital
Management, Inc. on July 11, 1997.
EXECUTIVE COMPENSATION
The following sets forth certain information regarding the
aggregate cash compensation paid to or earned by the Company's
Chief Executive Officer during fiscal 1995, 1996 and 1997 and the
Company's Chief Financial Officer during fiscal year 1997 (the
"Named Executives"). No other executive officer of the Company
earned in excess of $100,000 in fiscal 1997.
Summary Compensation Table
<TABLE>
ANNUAL
COMPENSATION LONG-TERM
NAME AND PRINCIPAL COMPENSATION
POSITION YEAR SALARY($) PAID BONUS($) OPTIONS/SARS(#)
<S> <C> <C> <C> <C> <C>
Alexius A. Dyer III
Chairman of the Board,
President andChief
Executive Officer 1997 161,154 125,911 (1) 224,543
1996 135,000 80,000 (1) ---
1995 133,108 --- 107,000 (2)
George Murnane III
Executive Vice President
and Chief Financial Officer 1997 139,615 --- (3) 104,787
</TABLE>
(1) Mr. Dyer's fiscal 1997 bonus has not yet been
determined. The $125,911 listed for fiscal 1997 is
bonus paid in fiscal 1997 but earned with respect to
fiscal 1996 under the terms of his employment
agreement. The $80,000 listed for fiscal 1996 was paid
to him upon execution of his employment agreement. See
"--Employment Agreements."
(2) These options were canceled pursuant to the
restructuring of the Company's indebtedness (the
"Restructuring"), effective on October 3, 1996. The
"Restructuring" is described in the Company's Proxy
Statement/Prospectus dated August 30, 1996 and
contained in the Registration Statement on Form S-4
(Registration No. 333-08065) and in the Company's
Annual Report on Form 10-K for the year ending May 31,
1997.
(3) Mr. Murnane became Executive Vice President and Chief
Financial Officer of the Company on June 17, 1996.
His fiscal 1997 bonus has not been determined but he is
entitled to a minimum bonus of $50,000 for that fiscal
year. See "-- Employment Agreements."
Stock Option Grants and Values
The following table sets forth certain information regarding
option grants to the Named Executives during 1997.
<TABLE>
Individual Grants Potential realizable value
Number of Percentage of at assumed annual rates
securities total options Exercise of stock price
underlying granted to or base appreciation for option
options employees in price term
Name granted (#) fiscal year (%) ($/Sh) Expiration Date 5% ($) 10%($)
<S> <C> <C> <C> <C>
Alexius A. Dyer III 224,543 47 3.00 10/03/06 423,642 1,073,591
George Murnane III 104,787 22 3.00 10/03/06 197,700 501,010
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-
End Option Values Table
The following table sets forth certain information with
respect to option exercises by the Named Executives during fiscal
1997 and the value of options owned by the Named Executives at
May 31, 1997.
<TABLE>
Number of Securities
Underlying Value of Unexercised
Unexercised Options at in-the-Money Options
FY-End(#) at FY-End ($) (1)
Name Shares Acquired on Value Realized ($) Exercisable / Unexercisable Exercisable / Unexercisable
Exercise
(#)
<S> <C> <C> <C> <C>
Alexius A. Dyer III 0 0 89,818 / 134,725 134,729 / 202,088
George Murnane III 0 0 33,333 / 71,454 50,000 / 107,181
</TABLE>
(1) Based on the closing price of the Company's Common Stock on
the AMEX on May 31, 1997 of $4.50 per share.
Employment Agreements
As of October 3, 1996, the Company extended for an
additional five years the employment agreement with Alexius A.
Dyer III, President, Chief Executive Officer and Chairman of the
Company. The employment agreement provides for payment of a base
salary of $175,000 per annum for each year during the remaining
term and annual cost-of-living increases, which base salary may
be increased as the Board deems appropriate. During the term of
the employment agreement and any extension thereof, Mr. Dyer
shall serve as a member of the Board.
Mr. Dyer's employment agreement also provides that he is
entitled to an annual bonus during the stated term in an amount
not less than 5% of the Company's net income before extraordinary
and non-recurring items and income taxes, subject to two
adjustments. First, in computing net income, the Company is
required to exclude any item of revenue (including COD income) or
expense attributable to the Restructuring or to any litigation
commenced by or against the Company. Second, items of revenue
and expense attributable to the sale of aircraft are not
considered extraordinary or non-recurring items.
Pursuant to the employment agreement, if Mr. Dyer is
terminated without cause prior to the end of the term of the
employment agreement, the Company is required to pay to Mr. Dyer
the base salary for the remaining term of the agreement plus an
amount equal to a pro rata portion (based on months employed
during the current fiscal year) of the bonus paid to him during
the previous fiscal year. If Mr. Dyer terminates the employment
agreement following the occurrence of a "Change of Control" (as
defined), the Company is obligated to pay to him an amount equal
to the average annual compensation paid to him during the two
most recent fiscal years by the Company.
As of October 3, 1996, the Company entered into a five-year
employment agreement with George Murnane III, the Executive Vice
President and Chief Financial Officer. The employment agreement
provides for payment of a base salary of $150,000 per annum for
each year during the remaining term and annual cost-of-living
increases, which base salary may be increased as the Board deems
appropriate. During the term of the employment agreement and any
extension thereof, Mr. Murnane shall serve as a member of the
Board.
Mr. Murnane's employment agreement also provides that he is
entitled to an annual bonus during the stated term in an amount
not less than 3% of the Company's net income before extraordinary
and non-recurring items and income taxes, subject to two
adjustments. First, in computing net income, the Company is
required to exclude any item of revenue (including COD income) or
expense attributable to the Restructuring or to any litigation
commenced by or against the Company. Second, items of revenue
and expense attributable to the sale of aircraft are not
considered extraordinary or non-recurring items. Mr. Murnane is
entitled to a minimum bonus for fiscal 1997 of $50,000.
Pursuant to his employment agreement, if Mr. Murnane is
terminated without cause prior to the end of the term of the
employment agreement, the Company is required to pay to
Mr. Murnane the base salary for the remaining term of the
agreement plus an amount equal to a pro rata portion (based on
months employed during the current fiscal year) of the bonus paid
to him during the previous fiscal year. If Mr. Murnane
terminates the employment agreement following the occurrence of a
"Change of Control" (as defined), the Company is obligated to pay
to him an amount equal to the average annual compensation paid to
him during the two most recent fiscal years by the Company.
Certain Transactions
In connection with the Restructuring, Kirkland Messina,
Inc., an investment banking firm of which Mr. Kirkland is a
principal, received a placement agent's fee in connection with
the origination of a credit agreement, which did not exceed 5% of
such firm's consolidated gross revenues during its last fiscal
year. A description of the Restructuring and the credit
agreement may be found in the Company's Proxy
Statement/Prospectus dated August 30, 1996 and contained in the
Registration Statement on Form S-4 (Registration No. 333-08065)
and in the Company's Annual Report on Form 10-K for the year
ending May 31, 1997.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") of the Board of
Directors consists of Messrs. Kirkland and Mueller, two non-
employee members of the Board of Directors. The Committee is
responsible for administering the Plan.
Executive Compensation Policies
Generally, the Company's executive compensation program is
designed to be competitive with that offered by other companies
against which the Company competes for executive resources. At
the same time, the Company links a significant portion of
executive compensation to the achievement of the Company's short
and long-term financial and strategic objectives and to the
performance of the Company's Common Stock. The Company's
executive compensation program consists of three primary
elements: base salary, annual incentive bonus and stock options
or other stock benefits. Base salary is intended to be
competitive in the marketplace. However, although the Committee
considers competitive data, salaries are determined subjectively
by the Committee rather than by reference to any specific target
group of companies. Subject to the terms of any applicable
employment agreement, base salary is reviewed at least annually
and adjusted based on changes in competitive pay levels, the
executive's performance as measured against individual and
Company-wide goals, as well as changes in the executive's role in
the Company. The Committee awards incentive bonuses to the Named
Executives based on the achievement of certain targets and
objectives in a manner consistent the terms of their employment
agreements. The Company does not make annual stock option or
other stock benefit grants to all executives. Rather, the
Committee determines each year which, if any, executives will
receive benefits, based on individual performance and each
executive's existing stock option position.
Executive Officer Compensation
Alexius A. Dyer III, the Company's President, Chief
Executive Officer and Chairman, and George Murnane III, the
Company's Executive Vice President and Chief Financial Officer,
each entered into employment agreements in connection with the
Restructuring on October 3, 1997. See "Management -- Employment
Agreements." The base compensation, incentive bonus and stock
option agreements entered into by the Company with such
individuals were determined by arm's-length negotiations between
the Compensation Committee and certain holders of the Company's
then-outstanding debt securities and such individuals. The
Company did not enter into an employment agreement with James
Isaacson, the Company's Vice President of Finance and Treasurer.
The terms of Mr. Isaacson's employment with the Company were
determined by arm's length negotiations by the Committee and
officers of the Company and such individual. The Compensation
Committee believes that the specific base compensation, incentive
bonus and stock option arrangements were necessary to attract
management of the caliber sought by the Board. Future
adjustments of such arrangements will be made in accordance with
the general principles outlined above.
The Company paid Mr. Dyer a bonus in fiscal 1997 with
respect to performance in fiscal 1996, calculated under the
terms of his employment agreement, but paid no other bonus to any
of its executive officers during fiscal 1997. The Company
awarded stock options to its executive officers during fiscal
1997, either pursuant to their employment agreement or at the
discretion of the Committee, in light of the past and prospective
contributions of, and the need to provide adequate incentive for,
the recipients of such options.
Compensation of the President, Chief Executive Officer and
Chairman
On October 3, 1997, Mr. Dyer entered into a revised
employment agreement with the Company as described above. See
"Management -- Employment Agreements." The terms of the
agreement were reviewed and approved by the Committee. The
employment agreement provides for the payment of an annual bonus
to Mr. Dyer in an amount to be determined by the Compensation
Committee based upon a formula in his employment agreement, which
may, in the discretion of the Committee, be increased based on
the performance of the Company against defined objectives. The
bonus payable to Mr. Dyer in each such fiscal year shall be not
less than an amount equal to five percent (5%) of the Company's
net income before extraordinary and non-recurring items and
income taxes, and before giving effect to any bonuses paid to the
Company's employees, including the bonus to Mr. Dyer, as reported
on the Company's periodic filings with the Securities and
Exchange Commission, subject to the following adjustments: (i)
there shall be excluded from the computation of net income any
item of revenue (including, without limitation, cancellation of
indebtedness income) or expense attributable to the Restructuring
or to any litigation commenced by or against the Company and (ii)
items of revenue and expense attributable to the sale of aircraft
(whether now owned or acquired in the future) shall not be
considered extraordinary or non-recurring items regardless of the
treatment accorded such items under generally accepted accounting
principles or the rules of the Securities and Exchange
Commission. The Committee believes that the bonus provisions of
Mr. Dyer's employment agreement create an appropriate
relationship between Mr. Dyer's level of compensation and the
Company's performance.
This report by the Committee shall not be deemed to be
incorporated by reference by an general statement incorporating
by reference this Proxy Statement into any filing under the
Securities Act of 1933 or the Exchange Act and shall not
otherwise be deemed filed under such Acts.
Respectfully submitted by
The Compensation Committee:
Kyle R. Kirkland
E. James Mueller
PERFORMANCE GRAPH
The following graph sets forth the total return (stock
price plus dividends) on a $100 investment in each of (i) the
Company's Common Stock, (ii) the AMEX Market Value Index and
(iii) a Peer Group, from May 31, 1992 through May 31, 1997. The
Peer Group consists of AAR Corp., Aviall, Inc., Banner Aerospace,
Inc. and UNC Incorporated (price data on Aviall, Inc. is not
available until 1994 and its year-to-year performance does not
affect the performance of the Peer Group until 1995). The total
return set forth with respect to the Company has been adjusted to
give effect to the reverse stock split consummated on October 3,
1993 as part of the Restructuring, which caused 27 shares of the
Company's then-outstanding common stock to be exchanged for one
share of the Company's Common Stock. Following the
Restructuring, the price of the Company's Common Stock closed at
___ per share on October 3, 1996 and closed at ____ per share on
August 12, 1997.
[GRAPHIC]
Data Points as of May 31,
1992 1993 1994 1995 1996 1997
International Airline
Support Group, Inc. 100 98 20 8 5 3
AMEX Market Value Index 100 111 112 125 155 157
Peer Group 100 101 92 69 100 14
APPROVAL OF AMENDMENT TO PLAN (PROPOSAL NO. 2)
By unanimous written consent effective as of July ,
1997, the Compensation Committee recommended to the Board of
Directors, subject to stockholder approval, the amendment of the
Plan in order to increase by 115,000 the number shares of the
Company's Common Stock for which options may be granted. If the
stockholders approve the amendment to the Plan, options to
purchase a total of 713,782 shares of the Company's Common Stock
may be granted under the Plan. The Compensation Committee has
previously granted options to purchase all but 173 of the 598,782
shares presently available for issuance under the Plan. The
Board recommends that the stockholders of the Company approve the
amendment to the Plan. The affirmative vote of the majority of
the shares of the Company's Common Stock outstanding as of August
12, 1997, the record date of the annual meeting, is required for
approval of the amendment to the Plan.
The Board of Directors recommends a vote FOR this
proposal.
Plan Description. The Plan was approved by the
Company's stockholders at a special meeting of the stockholders
held on September 30, 1996. The Plan is intended to provide a
means to attract, retain and motivate selected employees and
directors of the Company. The Plan provides for the grant to
eligible employees of incentive stock options, non-qualified
stock options, stock appreciation rights, restricted shares and
restricted share units, performance shares and performance units,
dividend equivalents and other share-based awards (collectively
"awards"). All employees (approximately 25 persons) and
directors (seven persons) are eligible to participate in the
Plan. The Plan is administered by the Compensation Committee.
The Compensation Committee has the full and final authority to
select employees to whom awards may be granted, to determine the
type of awards to be granted to such employees and to make all
administrative determinations required by the Plan. The
Compensation Committee also will have authority to waive
conditions relating to an award or accelerate vesting of awards.
The Plan provides for certain grants of nonqualified stock
options to directors who are not executive officers of the
Company. Upon adoption of the Plan, an aggregate of 598,782
shares of the Company's Common Stock were reserved for issuance
under the Plan, subject to anti-dilution adjustments in the event
of certain changes in the Company's capital structure.
Stock Options. The Plan authorizes the granting of
both incentive stock options and non-qualified stock options. At
the discretion of the Compensation Committee, awards of options
to employees under the Plan may be granted in tandem with other
types of awards, Incentive stock options granted to employees
under the Plan, and any accompanying share appreciation rights,
must generally expire within 10 years after the date of grant.
The exercise prices of incentive stock options must be equal to
at least 100% of the fair market value of the Common Stock on the
date of grant. The exercise prices of non-qualified stock
options may be more or less than the fair market value of the
Common Stock on the date of grant. Awards under the Stock Option
Plan to employees, except for vested shares, are not transferable
by the holder other than by will or applicable laws of descent or
distribution, except pursuant to a designation filed by an
employee with the Company as to who shall receive the benefits
specified under the Plan upon the death of such employee.
Restricted Stock. The Plan authorizes the Compensation
Committee to grant shares of restricted stock to employees,
subject to the terms and conditions imposed by the Compensation
Committee. These terms may include a restriction period during
which the shares of restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered and during which
such shares may be subject to forfeiture. Except for such
restrictions on transfer and such other restrictions as the
Compensation Committee may impose, the recipient of restricted
stock will have all the rights of a holder of Common Stock as to
such restricted stock including the right to vote the shares and
the right to receive dividends. Except as provided by the
Compensation Committee at the time of grant or otherwise, upon a
termination of employment for any reason during the restriction
period, all shares still subject to restriction will be forfeited
by the employee. The Plan also authorizes the Compensation
Committee to grant restricted share units to an employee, under
which shares of Common Stock or cash will be delivered to the
employee after the expiration of the restriction period.
Share Appreciation Rights. The Plan authorizes the
Compensation Committee to grant share appreciation rights to
employees, subject to the terms and conditions imposed by the
Compensation Committee. Share appreciation rights give an
employee the right to receive the excess of the fair market value
of shares of Common Stock on the date of exercise over the
exercise price of the share appreciation rights, as set by the
Compensation Committee. Terms within the discretion of the
Compensation Committee may include the time of exercise, the form
of consideration payable at exercise, and the method by which
shares of Common Stock will be delivered or deemed to be
delivered to an employee.
Performance Shares and Performance Units. The Plan
also authorizes the Compensation Committee to grant performance
shares or performance units to employees, subject to the terms
and conditions imposed by the Compensation Committee. These
awards provide shares of Common Stock or cash to an employee upon
the satisfaction of certain performance objectives, as determined
by the Compensation Committee. Awards may be fixed or may vary
in accordance with the level of such performance. The
Compensation Committee generally may revise the performance
objectives to reflect the occurrence of significant events which
it expects to have a substantial effect on the performance
objectives. Except as provided by the Compensation Committee at
the time of grant or otherwise, upon a termination of employment
during the performance period, all shares and units relating to
such performance period will be forfeited by the employee.
Dividend Equivalents. The Plan also authorizes the
Compensation Committee to grant dividend equivalents to
employees. These awards may relate to other awards of shares,
rights or units and generally give an employee the right to
receive cash or other property equal to any dividends paid on the
shares of Common Stock underlying such other awards. Such
dividend equivalents may either be paid when accrued or deemed to
have been reinvested in additional shares of Common Stock.
Dividend equivalents (other than freestanding dividend
equivalents) will be subject to all conditions and restrictions
of the underlying awards to which they relate.
In addition to the foregoing types of awards, the Plan
also authorizes the Compensation Committee, subject to
limitations under applicable law, to grant employees any other
awards based on shares of Common Stock, including the award of
unrestricted shares purely as a bonus and not subject to any
conditions. Cash awards, as an element of or supplement to any
other award, are also authorized under the Plan. In all cases,
the Compensation Committee shall determine the terms and
conditions of such awards.
The Plan generally may be amended, altered, suspended,
discontinued or terminated from time to time by the Board of
Directors, except that stockholder approval is required, in
accordance with Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), for any amendment (a) to increase the
number of shares of Common Stock reserved for issuance under the
Plan or (b) to change the class of employees eligible to
participate in the Plan; provided, however, that no such
amendment may impair the rights of any participant without his
consent.
The Plan provides that, if the Compensation Committee
determines that a stock dividend, recapitalization, stock split,
reorganization, merger, consolidation, spin-off, combination, or
similar corporate transaction affects the Common Stock such that
an adjustment is appropriate to prevent dilution or enlargement
of rights of employees participating in the Plan, the
Compensation Committee has discretion to adjust the number and
kind of shares to be issued under the Plan, the number and kind
of shares issuable in respect of outstanding awards and the
exercise price, grant price or purchase price of any award. The
Plan provides that such adjustments with respect to options of
directors who are not executive officers of the Company shall be
made automatically. In addition, the Compensation Committee is
authorized to make adjustments in the terms of awards in
recognition of certain unusual or non-recurring events affecting
the Company and its financial statements.
Federal Income Tax Consequences of Option Grants
The following discussion outlines generally the federal
income tax consequences of option awards under the Plan.
Individual circumstances may vary these results. The federal
income tax law and regulations are frequently amended, and each
participant should rely on his own tax counsel for advice
regarding federal income tax treatment under the Plan.
Non-Qualified Stock Options. The recipient of a non-
qualified stock option under the Plan is not subject to any
federal income tax upon the grant of such option nor does the
grant of the option result in an income tax deduction for the
Company. As a result of the exercise of an option, the recipient
will recognize ordinary income in an amount equal to the excess,
if any, of the fair market value of the shares transferred to the
recipient upon exercise over the exercise price. Such fair
market value generally will be determined on the date the shares
of Common Stock are transferred pursuant to the exercise.
However, if the recipient is subject to Section 16(b) of the
Exchange Act, the date on which the fair market value of the
shares transferred will be determined is delayed until the
earlier of the last day of the six-month period beginning on the
date the "property" is "purchased" or the first day on which a
sale of the "property purchased" will not subject the recipient
to suit under Section 16(b) of the Exchange Act. Alternatively,
if the recipient is subject to Section 16(b) of the Exchange Act
and makes a timely election under Section 83(b) of the Code, such
fair market value will be determined on the date the shares are
transferred pursuant to the exercise without regard to the effect
of Section 16(b) of the Exchange Act. The recipient will
recognize ordinary income in the year in which the fair market
value of the shares transferred is determined. The Company
generally will be entitled to a federal income tax deduction
equal to the amount of ordinary income recognized by the
recipient when such ordinary income is recognized by the
recipient, provided the Company satisfies applicable federal
income tax reporting requirements. The Company's deduction,
however, is subject to a $1,000,000 limitation on the deduction
of certain employee remuneration under Section 162(m) of the
Code, unless an exception for performance-based compensation
under such section applies.
Depending on the period the shares of Common Stock are
held after exercise, the sale or other taxable disposition of
shares acquired through the exercise of a non-qualified stock
option generally will result in a short- or a long-term capital
gain or loss equal to the difference between the amount realized
on such disposition and the fair market value of such shares when
the non-qualified stock option was exercised.
Special rules apply to a recipient who exercises a non-
qualified stock option by paying the exercise price, in whole or
in part, by the transfer of shares of Common Stock to the
Company.
Incentive Stock Options. An employee is not subject to
any federal income tax upon the grant of an incentive stock
option pursuant to the Plan, nor does the grant of an incentive
stock option result in an income tax deduction for the Company.
Further, an employee will not recognize income for federal income
tax purposes and the Company normally will not be entitled to any
federal income tax deduction as a result of the exercise of an
incentive stock option and the related transfer of shares of
Common Stock to the employee. However, the excess of the fair
market value of the shares transferred upon the exercise of the
incentive stock option over the exercise price for such shares
generally will constitute an item of alternative minimum tax
adjustment to the employee for the year in which the option is
exercised. Thus, certain employees may increase their federal
income tax liability as a result of the exercise of an incentive
stock option under the alternative minimum tax rules of the Code.
If the shares of Common Stock transferred pursuant to
the exercise of an incentive stock option are disposed of within
two years from the date the option is granted or within one year
from the date the option is exercised, the employee generally
will recognize ordinary income equal to the lesser of (1) the
gain recognized (i.e., the excess of the amount realized on the
disposition over the exercise price) or (2) the excess of the
fair market value of the shares transferred upon exercise over
the exercise price for such shares. If the employee is subject
to Section 16(b) of the Exchange Act, special rules may apply to
determine the amount of ordinary income recognized upon the
disposition. The balance, if any, of the employee's gain over
the amount treated as ordinary income on disposition generally
will be treated as long- or short-term capital gain depending
upon whether the holding period applicable to long-term capital
assets is satisfied. The Company generally would be entitled to
a federal income tax deduction equal to any ordinary income
recognized by the employee, provided the Company satisfies
applicable federal income tax reporting requirements and subject
to the limitation on the deduction of certain employee
remuneration as mandated by Section 162(m) of the Code, absent an
exception for performance-based compensation under such section.
If the shares of Common Stock transferred upon the
exercise of an incentive stock option are disposed of after the
holding periods have been satisfied, such disposition generally
will result in long-term capital gain or loss treatment with
respect to the difference between the amount realized on the
disposition and the exercise price. The Company will not be
entitled to a federal income tax deduction as a result of a
disposition of such shares after these holding periods have been
satisfied.
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO MAKE SECTION 203 APPLICABLE (PROPOSAL NO. 3)
The Board of Directors has approved a resolution
amending the Company's Amended and Restated Certificate of
Incorporation, subject to stockholder approval, to provide that
Section 203 of Delaware General Corporation Law ("DGCL") shall be
applicable to the Company. Section 203 may have the effect of
delaying, deferring or preventing a change of control of the
Company. In general, Section 203 of the DGCL prohibits a
publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of
three years following the time such stockholder became an
"interested stockholder," unless (a) prior to such time the board
of directors of the corporation approved either the "business
combination" or the transaction which resulted in the stockholder
becoming an "interested stockholder" or (b) upon consummation of
the transaction which resulted in the stockholder becoming an
"interested stockholder," the "interested stockholder" owned at
least 85% of the voting stock of the corporation outstanding at
the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned
by (i) persons who are directors and also officers and (ii) by
employee stock plans, in which employee participants do not have
the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer, or
(c) at or subsequent to such time the "business combination" is
approved by the board of directors and authorized at the annual
or special meeting of stockholders, and not by written consent,
by the affirmative vote of at least 66-2/3 % of the outstanding
voting stock which is not owned by the "interested stockholder."
A "business combination" includes certain mergers, stock or
asset sales and other transactions resulting in a financial
benefit to the "interested stockholder." An "interested
stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of
the corporation's voting stock.
The Company believes that the protections that Section
203 would provide to the Company would be beneficial to the
stockholders because they would enhance the Board of Directors'
capacity to defend against undesirable takeover attempts and, in
the event of the sale of the Company, enhance the Board of
Directors' ability to negotiate a transaction that is in the
stockholders' best interest.
The Board of Directors recommends a vote FOR this
proposal.
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
TO PROVIDE FOR A CLASSIFIED BOARD OF DIRECTORS (PROPOSAL NO. 4)
The Board of Directors has adopted a resolution
recommending an amendment to its Amended and Restated Certificate
of Incorporation, subject to stockholder approval, that provides
for three classes of directors with staggered terms of up to
three years such that approximately one-third of the Board stands
for election each year.
With respect to the classification of the members of
the Company's Board of Directors, the Classified Board Amendment
provides that directors of the first class, which shall initially
consist of two members, shall be elected to hold office for terms
expiring at the next annual meeting of the Company following the
adoption of the Classified Board Amendment; directors of the
second class, which shall initially consist of two members, shall
be elected to hold office for terms expiring at the second
succeeding annual meeting; and directors of the third class,
which shall initially consist of two members, shall be elected to
hold office for terms expiring at the third succeeding annual
meeting. Thereafter, the successors to each class of directors
shall be elected for three-year terms. The Classified Board
Amendment also provides that directors may not be removed except
for cause. Such removal for cause may be effected only by the
resolution of all other Board members, stating such cause, or by
the affirmative vote of the holders of at least 75% of the voting
power of all of the then outstanding shares of Common Stock. No
director so removed may be reinstated so long as the cause for
removal continues to exist. "Cause," shall be limited to
criminal acts and gross negligence. Currently, the Company'
Bylaws provide that members of the Board may be removed without
cause. The Board intends to amend the Bylaws to make them
consistent with the Classified Board Amendment upon approval of
the Classified Board Amendment by the stockholders. The
Classified Board Amendment also provides that, once approved by
the stockholders, it may not be repealed except by the
affirmative vote of 75% of the voting power of all the then
outstanding shares of Common Stock. Adoption of the Classified
Board Amendment requires the affirmative vote of the holders of a
majority of the shares of Common Stock outstanding.
If the Classified Board Amendment is adopted, and if
the Company's stockholders elect to the Board of Directors those
persons nominated by the Board of Directors, Messrs. Dyer and
Murnane will serve as directors of the second class; and Messrs.
Kirkland and Mueller will serve as directors of the third class.
There will be no directors of the first class because there are
presently three vacancies on the Company's Board of Directors.
Staggered terms for members of the Board of Directors
may have the effect of delaying, deferring or preventing a change
of control of the Company since only one-third of the directors
are up for election each year and may not be removed except for
cause. However, the Board of Directors believes that staggered
terms for directors will enhance Board continuity and increase
the Board's capacity to defend against undesirable takeover
attempts and, in the event of the sale of the Company, enhances
the Board of Directors ability to negotiate a transaction that is
in the stockholders' best interest.
The Board of Directors recommends a vote FOR this
proposal.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 5)
The Board of Directors has appointed Grant Thornton
L.L.P. as independent accountants of the Company for fiscal 1998.
Although stockholder ratification is not required, the Board of
Directors has directed that such appointment be submitted to the
stockholders for ratification. The Board considers Grant
Thornton L.L.P. to be well qualified and recommends that the
stockholders vote to ratify that appointment. A representative of
Grant Thornton L.L.P. is not expected to attend the 1997 Annual
Meeting.
The affirmative vote of the holders of a majority of
the shares of Common Stock present in person or represented by
proxy and voting at the 1997 Annual Meeting is required to adopt
the proposal. If the proposal is not adopted, the Board of
Directors may reconsider the appointment.
The Board of Directors recommends a vote FOR this
proposal.
ADDITIONAL INFORMATION
Proposals for 1998 Meeting
Any proposal of stockholders that is intended to be
presented at the Company's 1998 Annual Meeting of Stockholders
must be received at the Company's principal executive offices no
later than April 21, 1998 and must comply with all other
applicable legal requirements in order to be included in the
Company's proxy statement and form of proxy for that meeting.
Annual Report
The Company's 1997 Annual Report on Form 10-K is being
mailed to Stockholders with this Proxy Statement.
Other Matters
The Board of Directors knows of no matter to come
before the Annual Meeting other than as specified herein. If
other business should, however, be properly brought before such
meeting, the persons voting the proxies will vote them in
accordance with their best judgment.
THE STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, AND
RETURN PROMPTLY THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors
ALEXIUS A. DYER III
Chairman of the Board,
President and Chief Executive Officer
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 the Commission Only
(as permitted by Rule 14a-12))
__ Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to 240.14a-11(c) or 140.14a-12
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
-------------------------------------------
(Name of Registrant as Specified in Its Charter)
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
-----------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
_X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item 22(a)(2)
of Schedule 14A.
__ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-(6)(i)(3)
__ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
Title of each class of securities to which transaction applies:
-------------------------------------------------------------
Aggregate number of securities to which transaction applies:
--------------------------------------------------------------
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):
_______________________________________________________________
Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
Total fee paid:
________________________________________________________________
__ 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: July 24, 1997
-------------
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 22, 1997
The undersigned hereby appoints Alexius A. Dyer III and George Murnane III,
and each of them, proxies with full power of substitution and resubstitution,
for and in the name of the undersigned, to vote all shares of International
Airline Support Group, Inc. which the undersigned would be entitled to vote
if personally present at the Annual Meeting of Stockholders to be held at
the offices of the Company, 1954 Airport Road, Suite 200, Atlanta, Georgia
30341, at 10:00a.m., local time, on September 22, 1997, and at any
adjournment thereof, upon the matters described in the accompanying
Notice of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged, and upon any other business that may properly come before the
meeting or any adjournment thereof. Said proxies are directed to vote on the
matters described in the Notice of Annual Meeting and Proxy Statement as
follows, and otherwise in their discretion upon such other business as may
properly come before the meeting or any adjournment thereof.
1. To elect four (4) directors:
Alexius A. Dyer III
Kyle R. Kirkland
E. James Mueller
George Murnane III
___ FOR all nominees ___ WITHHOLD AUTHORITY
(except as marked to vote for all nominees
the contrary below) listed
(Instructions: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list above.)
The Board of Directors recommends a vote FOR the election of the nominees
listed above to serve as directors of International Airline Support
Group, Inc.
2. To approve an amendment to the Company's 1996 Long Term Incentive and
Share Award Plan to increase from 598,782 to 713,782 the number of
shares available for grants under said Plan:
__FOR __AGAINST __ABSTAIN
The Board of Directors recommends a vote FOR the approval of the amendment
of the Company's 1996 Long Term Incentive and Share Award Plan.
3. To approve an amendment to the Company's Amended and Restated Certificate
of Incorporation to make the provisions of Section 203 of the Delaware General
Corporation Law applicable to the Company:
__FOR __AGAINST __ABSTAIN
The Board of Directors recommends a vote FOR the approval of the amendment
to the Company's Amended and Restated Certificate of Incorporation related
to Section 203 of the Delaware General Corporation Law.
4. To approve an amendment to the Company's Amended and Restated Certificate
of Incorporation to provide for three classes of directors with staggered
terms of up to three years such that approximately one-third of the
Board stands for election each year.
__FOR __AGAINST __ABSTAIN
The Board of Directors recommends a vote FOR the approval of the
amendment of the Company's Amended and Restated Certificate of Incorporation
related to classification of the Board of Directors.
5. To ratify the appointment of Grant Thornton, LLP as independent
auditors for 1998.
__FOR __AGAINST __ABSTAIN
The Board of Directors recommends a vote FOR the ratification of the
appointment of Grant Thornton, LLP.
6. In the discretion of the proxies, on any other matter than may properly
come before the meeting or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS INDICATED, THE
PROXY WILL BE VOTED FOR THE PROPOSALS.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING.
IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY.
Please sign exactly as your name or names appear hereon. Where more than
one owner is shown above, each should sign. When signing in a fiduciary or
representative capacity, please give full title. If this proxy is submitted
by a corporation, it should be executed in the full corporate name by a duly
authorized officer. If a partnership, please sign in partnership name by
authorized person.
_______________________________ DATE: ____________________, 1997
Signature of Shareholder
_______________________________
Print Name
_______________________________ DATE: ___________________, 1997
Signature of Shareholder
_______________________________
Print Name
