KING AND SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
TELEPHONE: 404/572-4600
FACSIMILE: 404/572-5100
DIRECT DIAL: EMAIL: DIRECT FAX:
404/572-4677 [email protected] 404/572-5135
September 2, 1999
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: PROXY STATEMENT FOR 1999 ANNUAL MEETING OF INTERNATIONAL AIRLINE SUPPORT
------------------------------------------------------------------------
GROUP, INC.
------------
Ladies and Gentlemen:
On behalf of International Airline Support Group, Inc., a Delaware
corporation (the "Company"), we attach hereto for filing electronically pursuant
to Rule 14a-6(a) under the Securities Exchange Act of 1934 the Preliminary Proxy
Statement for the 1999 Annual Meeting of Shareholders.
Please call the undersigned at (404) 572-4677 with any questions concerning
the attached materials.
Sincerely,
/s/ Lisa A. Read
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
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 240.14a-12
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
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 _______, ________, 1999, at 10:00 a.m., local time, to
consider and vote on:
1. The election of two (2) directors to serve until the 2002 Annual Meeting
of Stockholders.
2. The approval of amendments to the Company's Restated and Amended
Certificate of Incorporation and Amended and Restated Bylaws to provide for a
Board of Directors of not less than one nor more than 15 directors, as may be
determined by the Board of Directors from time to time.
3. The approval of an amendment to the Company's 1996 Long Term Incentive
and Share Award Plan ("Plan") to increase by 109,000 the number of shares
available for grant under the Plan.
4. The ratification of the appointment of Grant Thornton LLP as independent
auditors for the fiscal year of the Company ending on May 31, 2000 ("fiscal
2000").
5. Such other matters as may properly come before the meeting or any
adjournments thereof.
The close of business on August 10, 1999, 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,
/s/ James M. Isaacson
JAMES M. ISAACSON
Secretary
Atlanta, Georgia ________, 1999
<PAGE>
- 16 -
INTERNATIONAL AIRLINE SUPPORT GROUP, INC.
1954 AIRPORT ROAD
SUITE 200
ATLANTA, GEORGIA 30341
PROXY STATEMENT
______________________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON __________, 1999
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 (the "Board") 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 _______, ________, 1999, at 10:00 a.m. local time, and at any
adjournments thereof (the "1999 Annual Meeting"). This Proxy Statement and
accompanying form of proxy are first being sent to stockholders on or about
__________, 1999.
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. The Company will pay such firm a fee of
approximately $3,000 and will reimburse it for certain expenses.
VOTING PROCEDURES
VOTING STOCK
Only holders of record of the Company's Common Stock as of the close of
business on August 10, 1999 (the "Record Date") will be entitled to vote at the
1999 Annual Meeting. The Company had outstanding 2,187,198 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 1999 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 1999 Annual Meeting in
accordance with the directions given. With respect to each 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 Messrs. McElwee and Mueller as Class II Directors
to serve a three-year term that will expire at the annual meeting of
stockholders in 2002, "FOR" the proposal to amend the Company's Restated and
Amended Certificate of Incorporation and Amended and Restated Bylaws to provide
for a Board of Directors of not less than one nor more than 15 directors, as may
be determined by the Board of Directors from time to time, "FOR" the proposal to
amend the 1996 Long Term Incentive and Share Award Plan (the "Plan") to increase
by 109,000 the number of shares available for grant under the Plan and "FOR"
ratification of the appointment of Grant Thornton LLP as independent accountants
for the Company's 2000 fiscal year. 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 approve each proposal, other than Proposal
No. 2. Pursuant to the Company's Restated and Amended Certificate of
Incorporation, approval of Proposal No. 2 requires the affirmative vote of at
least 75% of the issued and outstanding shares of Common Stock. Abstentions and
proxies relating to "street name" shares for which brokers have not received
voting instructions from the beneficial owner ("Broker Non-Votes") are counted
in determining whether a quorum is present. With respect to the proposals which
require the affirmative vote of majority of the votes entitled to be cast,
abstentions 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. Because Proposal No. 2 requires the affirmative vote of at
least 75% of the issued and outstanding shares of Common Stock, both abstentions
and Broker Non-Votes will have the same effect as a negative vote in determining
whether Proposal No. 2 has been approved by the stockholders.
ELECTION OF DIRECTORS (PROPOSAL NO. 1)
Under the Restated and Amended Certificate of Incorporation (the
"Certificate") and the Amended and Restated Bylaws (the "Bylaws) of the Company,
the number of directors of the Company is fixed at seven members; and the number
of directors constituting the Board shall not be changed without the affirmative
vote of at least 75% of the issued and outstanding shares of the Common Stock.
The directors of the Company are elected at the annual meeting of stockholders.
The Certificate and the Bylaws of the Company provide for a Board of Directors
divided into three classes, as nearly equal in size as possible, having
staggered terms of three years. As a result, approximately one-third of the
Board will be elected each year. Pursuant to the Certificate and the Bylaws,
the Board has nominated the persons set forth below as Class II directors to
serve a three-year term that will expire at the annual meeting of stockholders
in 2002.
F. DIXON MCELWEE, JR.
E. JAMES MUELLER
Management of the Company and the Board recommend the election of Mr. F.
Dixon McElwee, Jr. and Mr. E. James Mueller for the office of Class II director
to hold office for a three-year term and until their successors are duly elected
and qualified. In addition to the two nominees, there are two other directors
continuing to serve on the Board, Messrs. Dyer and Murnane, whose terms expire
in 2000. There are currently three vacancies on the Board. The Company has not
nominated anyone to fill such vacancies. Proposal No. 2, which the Company's
stockholders are being asked to consider at the 1999 Annual Meeting, would, if
approved, permit the Board to fix the number of directors comprising the Board
at any number from one to 15. If Proposal No. 2 is adopted, the Board intends
to fix the number of directors comprising the Board at four.
The Board has no reason to believe that either of the nominees for the
office of director will be unavailable for election as director. However, if at
the time of the Annual Meeting either of the nominees should be unable or
decline to serve, the persons named in the enclosed proxy card will vote as
recommended by the Board to elect substitute nominees or vote to allow the
vacancy created thereby to remain open until filled by the Board, as recommended
by the Board. In no event, however, can a proxy be voted to elect more than
five directors, if Proposal No. 2 is not approved, or two directors, if Proposal
No. 2 is approved.
The Board of Directors recommends a vote FOR this proposal.
INFORMATION AS TO DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information, including ownership of
the Company's Common Stock, as of August 10, 1999, with respect to: (i) each
continuing director; (ii) each executive officer and (iii) all continuing
directors and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
OFFICER OR COMMON
NAME AGE POSITION DIRECTOR SINCE STOCK OWNED PERCENTAGE
---- --- -------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Alexius A. Dyer III 43 Chairman of the Board,
President and Chief
Executive Officer 1992 329,608(3) 14.1%
George Murnane III 41 Executive Vice President,
Chief Operating Officer
and Director 1996 128,869(3) 5.7%
E. James Mueller(1)(2) 53 Director 1991 104,072(3) 4.6%
James M. Isaacson 38 Chief Financial Officer 1997 35,373(3) 1.6%
---------------------
Officers and Continuing Directors as a Group 597,922 23.9%
</TABLE>
_____________________________
(1) Member of Audit Committee.
(2) Member of the Compensation Committee.
(3) Includes the following shares of Common Stock subject to options
exercisable presently or within sixty days: Mr. Dyer, 154,043; Mr. Murnane,
61,260; Mr. Mueller, 64,072; and Mr. Isaacson, 33,173.
Continuing Directors and Executive Officers
- -----------------------------------------------
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 and President
of the Company since February 1994. Mr. Dyer has been a director of the Company
since 1992. From February 1991 to February 1994, Mr. Dyer served as Executive
Vice President 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 the Chief Operating Officer of the Company
since March 1999, Executive Vice President of the Company since June 1996 and
has served as a director of the Company since October 1996. From June 1996 to
March 1999, he served as Chief Financial Officer of the Company. From March
1996 through June 1996, Mr. Murnane served as a consultant for companies in 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 a Director in
the firm's Transportation Group. Mr. Murnane was named to the Board of
Directors of Mesa Air Group, Inc. ("Mesa"), a commuter airline, in June 1999.
Mr. Murnane is the President of Barlow Management, Inc., the general partner of
Barlow Partners II, L.P., a shareholder of Mesa. Prior to joining Mesa's Board
of Directors, Mr. Murnane served since January 1997 as a Director of CCAIR,
Inc., a commuter airline acquired by Mesa in June 1999.
JAMES M. ISAACSON has served as the Company's Chief Financial Officer since
May 1999, the Company's Treasurer since December 1996 and Secretary of the
Company 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.
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. The Company has entered into a
commission agreement with J.M. Associates, Inc., pursuant to which J.M.
Associates, Inc. is compensated for originating transactions for the Company.
Mr. Mueller, who currently serves as a member of the Company's Board of
Directors in Class II, has been re-nominated for election as a Class II Director
for a term expiring at the Annual Meeting of the Company to be held in 2002.
Nominee for Director
- ----------------------
F. DIXON MCELWEE, JR., age 52, has been the Senior Vice President of
Frozen Food Express Industries, Inc., a motor carrier specializing in the
transportation of perishable commodities, since September 1998. From May 1995
until July 1998, Mr. McElwee was Executive Vice President and Chief Financial
Officer of Cameron-Ashley Building Products. Prior to May 1995, Mr. McElwee was
a principal of Meridian Capital, an investment banking firm. Mr. McElwee has
been nominated for election as a Class II Director for a term expiring at the
Annual Meeting of the Company to be held in 2002.
COMMITTEES OF THE BOARD AND COMPENSATION COMMITTEE INTERLOCKS
The Compensation Committee of the Board of Directors reviews all aspects of
compensation of executive officers of the Company and makes recommendations on
such matters to the full Board of Directors. No executive officer of the
Company serves as a member of the Board of Directors or compensation committee
of any entity which has one or more executive officers serving as a member of
the Company's Board of Directors.
The Audit Committee makes recommendations to the Board concerning the
selection of outside auditors, reviews the financial statements of the Company
and considers such other matters in relation to the internal and external audit
of the financial affairs of the Company as may be necessary or appropriate in
order to facilitate accurate and timely financial reporting. The Audit
Committee also reviews proposals for major transactions.
The Company does not maintain a standing nominating committee or other
committee performing similar functions.
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 1999 pursuant to a
Director's Compensation Plan that was adopted during fiscal 1995. Directors are
also reimbursed for expenses incurred in connection with the attendance of Board
meetings.
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 fiscal 1999.
CERTAIN TRANSACTIONS WITH DIRECTORS AND THEIR AFFILIATES
In December 1995, the Company entered into a commission agreement with J.M.
Associates, Inc., a business development consulting firm of which Mr. Mueller is
a principal. The commission agreement is non-exclusive and provides that J.M.
Associates will receive commissions of between 3% and 4% of lease revenues or
the purchase or sale price of completed parts acquisitions or sales with parties
introduced to the Company by J.M. Associates. In fiscal 1999, the Company paid
Mr. Mueller $96,108 for services rendered to the Company under this agreement
and in connection with Mr. Mueller's participation in the Company's outside
consulting activities.
The Company believes the terms of such transactions were no less favorable
than could be obtained from unaffiliated third parties. Any future transactions
between the Company and its officers or directors are subject to approval by a
majority of the disinterested directors of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock, as of August 10, 1999, by
each person who was known by the Company to own beneficially more than 5% of the
Company's outstanding 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.
NAME AND ADDRESS SHARES BENEFICIALLY OWNED % OF SHARES
---------------- ------------------------- -----------
OUTSTANDING
-----------
Heartland Advisors, Inc.(1)
790 North Milwaukee Street
Milwaukee, Wisconsin 53202 332,200 15.2%
Alexius A. Dyer III
1954 Airport Road, Suite 200
Atlanta, Georgia 30341 175,565 8.0%
W. Robert Ramsdell(2)
474 Paseo Miramar
Pacific Palisades,
California 90272 162,633 7.4%
(1) Based on the Schedule 13G/A filed on May 10, 1999.
(2) Based on the Schedule 13D filed on October 19, 1998.
<PAGE>
EXECUTIVE COMPENSATION
The following sets forth certain information regarding the aggregate cash
compensation paid to the Company's Chief Executive Officer and the Company's
Chief Operating Officer during fiscal 1997, 1998 and 1999 (the "Named
Executives"). Compensation information is not required for any other executive
officer of the Company pursuant to the rules of the Securities and Exchange
Commission.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG -TERM
COMPENSATION COMPENSATION
-----------------------------------
AWARDS PAYOUTS
-----------------------------------
NAME AND PAID
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#) LTIP PAYOUTS ($)
------------------ ---- -------- -------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Alexius A. Dyer III 1999 180,000 288,709 41,000 336,815(1)
Chairman of the Board, 1998 176,346 470,158 38,000 336,815(1)
President and Chief 1997 161,154 125,911 224,543 --
Executive Officer
George Murnane III 1999 154,000 173,225 15,000 157,158(1)
Executive Vice President 1998 151,077 237,164 15,000 157,158(1)
and Chief Operating
Officer 1997 139,615 -- 104,787 --
</TABLE>
(1) Represents amounts awarded to Messrs. Dyer and Murnane subject to the
condition that the net proceeds be used to pay the exercise price of options to
purchase shares of the Company's Common Stock. The amount paid in fiscal 1998
was awarded in fiscal 1997 ; the amount paid in fiscal 1999 was awarded in
fiscal 1998. Messrs. Dyer and Murnane purchased 56,371 and 28,185 shares of the
Company's Common Stock, respectively, with the net proceeds of such awards in
fiscal 1999 and 59,448 and 29,624 shares of the Company's Common Stock,
respectively, with the net proceeds of such awards in fiscal 1998.
STOCK OPTION GRANTS AND VALUES
The following table sets forth certain information regarding option grants
to the Named Executives during fiscal 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENTAGE OF AT ASSUMED ANNUAL
SECURITIES TOTAL OPTIONS EXERCISE RATES OF STOCK PRICE
UNDERLYING GRANTED TO OR BASE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM
NAME GRANTED (#) FISCAL YEAR (%) ($/SH) DATE 5% ($) 10% ($)
- ------------------- ------------ --------------- ----- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Alexius A. Dyer III 41,000 32 3.31 12/03/08 85,412 216,450
George Murnane III 15,000 12 3.31 12/03/08 31,248 79,189
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES TABLE
The following table sets forth certain information with respect to option
exercises by the Named Executives during fiscal 1999 and the value of options
owned by the Named Executives at May 31, 1999.
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FY-END(#) AT FY_END (#)(1)
<S> <C> <C> <C> <C>
EXERCISEABLE / EXERCISEABLE /
NAME EXERCISE (#) VALUE REALIZED ($) UNEXERCISEABLE UNEXERCISABLE
- ---- ------------- ------------------ ---------------- ----------------
Alexius A. Dyer III 56,371 76,090 120,362 / 67,362 192,064 / 75,782
George Murnane III 28,185 40,516 45,542 / 31,436 55,885 / 35,366
</TABLE>
(1) Based on the closing price of the Company's Common Stock on the American
Stock Exchange on May 31, 1999 of $4.125 per share.
<PAGE>
OPTION REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES MARKET PRICE ORIGINAL OPTION
UNDERLYING OF STOCK AT EXERCISE PRICE TERM REMAINING
OPTION TIME OF AT TIME OF NEW AT DATE OF
NAME DATE REPRICED REPRICING REPRICING EXERCISE PRICE REPRICING
- ---- ---- -------- --------- --------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Alexius A. Dyer III 12/03/98 22,180 3.3125 4.50 3.3125 8.5 years
George Murnane III 12/03/98 15,000 3.3125 4.50 3.3125 8.5 years
</TABLE>
On December 3, 1998, the Company's Board of Directors approved the
repricing of certain stock options outstanding under the Company's existing
stock option plans (the "Stock Option Repricing"). The Stock Option Repricing
was consummated on December 3, 1998 based on the market value of the Company's
Common Stock on such date. 131,173 outstanding stock options were repriced to
$3.31. Pursuant to the Stock Option Repricing, Messrs. Dyer and Murnane had
options repriced from $4.50 to $3.31 with 22,180 and 15,000 shares of Common
Stock underlying such options, respectively.
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 $180,000 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 or expense attributable 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 in the employment agreement),
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
Operating Officer. The employment agreement provides for payment of a base
salary of $154,000 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 or expense attributable 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 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 in the employment agreement),
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.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") of the Board of Directors
consists of Mr. Mueller, a non-employee member of the Board of Directors, and
Mr. Kyle Kirkland, a non-employee member of the Board of Directors who is not
standing for re-election. 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 with 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 Operating Officer, each entered into employment agreements in connection
with the restructuring of the Company's capital structure on October 3, 1996.
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 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 and Mr. Murnane a bonus in fiscal 1999 with
respect to performance in fiscal 1998, calculated under the terms of their
respective employment agreement. The Company awarded stock options to its
executive officers during fiscal 1999, 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.
The Board of Directors is also permitted to award discretionary cash
bonuses to senior executives of the Company who are designated as "Senior
Executives" by the Board of Directors. The Board of Directors is given the
discretion to make bonuses subject to conditions and to establish forfeiture
conditions, in each case as the Board deems appropriate. In fiscal 1998, the
Board awarded cash bonuses to Messrs. Dyer and Murnane in the amounts of
$336,815 and $157,158, respectively, which were paid in fiscal 1999. The awards
were made subject to the condition that the recipient use the proceeds of the
award, net of any withholding, to pay the exercise price of options to purchase
shares of the Company's Common Stock previously awarded to the recipient.
Messrs. Dyer and Murnane used the net proceeds of the awards to exercise options
to purchase 56,371 and 28,185 shares of the Company's Common Stock,
respectively. The Committee believes that the awards made to Messrs. Dyer and
Murnane, subject to the conditions imposed, were an appropriate and efficient
means of compensating them for their efforts on behalf of the Company while
increasing their incentive to remain in the Company's employ and to enhance
their incentive to exert their best efforts to cause the value of the Company's
Common Stock to increase.
STOCK OPTION REPRICING
On December 3, 1998, the Company's Board of Directors authorized the
repricing of certain stock options under the Company's existing stock option
plans. The Stock Option Repricing was consummated on December 3, 1998 based on
the market value of the Company's Common Stock on such date. Pursuant to the
Stock Option Repricing, Messrs. Dyer and Murnane had options repriced from $4.50
to $3.31 with 22,180 and 15,000 shares of Common Stock underlying such options,
respectively. Stock options are a component of the Company's compensation
program. Option grants reflect the Company's policy of encouraging long-term
performance and promoting retention of key employees. Stock options also keep
the interests of the employees in line with the stockholders' interests in the
performance of the Company's Common Stock. The Compensation Committee believes
that stock options having exercise prices substantially higher than the current
market value of the underlying common stock provide a disincentive to employees
and may impair the Company's ability to retain key employees. Retaining key
employees is essential to the Company's future success, and therefore, enhances
the value of the stockholders' investment in the Company.
COMPENSATION OF THE PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN
The compensation of Mr. Dyer was determined, as noted above, based on the
terms of his employment agreement, which was negotiated at arm's-length. The
cash bonus awarded him was based on the Committee's desire to compensate Mr.
Dyer for his efforts on behalf of the Company during fiscal 1999 in a manner
that would increase his incentive to remain in the Company's employ and to
enhance his incentive to exert his best efforts to cause the value of the
Company's Common Stock to increase.
This report by the Committee shall not be deemed to be incorporated by
reference by a 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
<PAGE>
PERFORMANCE GRAPH
[GRAPHIC OMITED]
[GRAPHIC OMITED]
The following graph sets forth the total return on a $100 investment in each of
(i) the Company's Common Stock, (ii) the AMEX Major Market Index and (iii) a
Peer Group, from May 31, 1994 through May 31, 1999. The Peer Group consists of
AAR Corp., Aviall, Inc., AVTEAM, Inc., Aviation Distributors, Inc., and Banner
Aerospace, Inc. (price data on AVTEAM, Inc. and Aviation Distributors, Inc. is
not available until 1997 and their year-to-year performance does not affect the
performance of the Peer Group until 1998). The total return set forth with
respect to the Company has been adjusted to give effect to the Company's
1-for-27 reverse stock split consummated on October 3, 1996. The first reported
sale of the Company's Common Stock following the reverse stock split occurred on
October 18, 1996 at $4.50 per share. The Company's Common Stock closed at
$4.125 per share on May 31, 1999.
YLF PEER GROUP AMEX
------- --------- -------
May 31, 1994 100 100 100
May 31, 1995 29 78 122
May 31, 1996 19 106 154
May 31, 1997 13 140 200
May 31, 1998 23 182 243
May 28, 1999 12 147 287
<PAGE>
APPROVAL OF AMENDMENTS TO CERTIFICATE OF INCORPORATION AND BYLAWS
(PROPOSAL NO. 2)
On August 27, 1999, the Board of Directors approved amendments to the
Company's Certificate of Incorporation and Bylaws to provide for a Board of
Directors of not less than one nor more than 15 directors, as may be determined
by the Board of Directors from time to time.
Article VI of the Certificate of Incorporation currently provides that the
Board of Directors shall consist of seven members, but the number may be
increased or decreased as provided for in the Bylaws; provided, however, that
the number of the full Board of Directors shall not be changed without the
affirmative vote of at least 75% of the issued and outstanding shares of Common
Stock.
The Bylaws of the Company currently provide that the number of directors
constituting the entire Board of Directors shall not be less than one nor more
than 15, and the exact number shall be fixed from time to time by the Board of
Directors; provided, however that the number of directors constituting the
entire Board shall be seven until otherwise changed by the Board of Directors
and with the affirmative vote of 75% of the issued and outstanding shares of
Common Stock. The Bylaws also provide that no decrease in the number of
directors shall shorten the term of any director at the time in office.
If the Stockholders vote to approve the amendment to the Certificate of
Incorporation of the Company, Article VI would be amended to read in its
entirety as follows:
"The Board of Directors of the Corporation shall consist of not less than
one (1) nor more than fifteen (15) as shall be determined by the Board of
Directors from time to time; provided, that no decrease in the number of
directors shall cause the termination of service of a director before the end of
the term for which he or she was last elected."
If the Stockholders vote to approve the amendment to the Bylaws of the
Company, the Section of the Bylaws which is entitled "Composition of the Board"
shall be amended to read in its entirety as follows:
"The number of directors constituting the entire Board of Directors shall
be fixed by resolution of the Board of Directors from time to time in accordance
with the Amended and Restated Certificate of Incorporation of the Corporation;
provided, that no decrease in the number of directors shall cause the
termination of service of a director before the end of the term for which he or
she was last elected. Directors need not be residents of the State of Delaware
or stockholders of the Corporation."
The Board of Directors believes that it is in the best interests of the
Company and its stockholders not to fix the size of the Board of Directors in
the Restated and Amended Certificate of Incorporation or Amended and Restated
Bylaws. The version of Article VI currently in effect which fixes the number of
directors at seven was adopted in 1996, in connection with certain other
provisions of the Amended and Restated Certificate of Incorporation and Bylaws,
to prevent a stockholder or group of stockholders from acquiring control of the
Board of Directors without the concurrence of 75% of all stockholders. However,
the Board now believes that it is important to have the flexibility to determine
what number of directors is most appropriate from time to time. Furthermore,
the Board believes that the Company does not require the services of seven
directors. If Proposal No. 2 is adopted, the Board intends to fix the number of
directors comprising the Board at four.
The Board of Directors recommends a vote FOR this proposal.
APPROVAL OF AMENDMENT TO PLAN (PROPOSAL NO. 3)
By unanimous written consent effective as of August 2, 1999, the Board of
Directors, subject to stockholder approval, amended the Plan in order to
increase by 109,000 the number of 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 967,782 shares of the Company's Common Stock may
be granted under the Plan. The Compensation Committee has previously granted
options to purchase all of the 858,782 shares presently available for issuance
under the Plan. As of August 12, 1999 there were 593,154 unexercised options.
The Board recommends that the stockholders of the Company approve the amendment
of the Plan. The affirmative vote of the majority of the issued and outstanding
shares of the Company's Common Stock present in person or represented by proxies
at the 1999 Annual Meeting is required for approval of the amendment of 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 28 persons) and
non-employee directors (two 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. The Company's stockholders approved at the fiscal 1997
Annual Meeting an amendment to the Plan to increase by 115,000 the number of
shares of the Company's Common Stock subject to the Plan. In fiscal 1998, the
Plan was amended again by a vote of stockholder to increase by 128,000 the
number of shares of the Company's Common Stock subject to the Plan. During
fiscal 1999, an additional 12,000 options were issued pursuant to the Plan.
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 price 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 authorities the
Compensation Committee, subject to limitations under applicable law, to grant
employees any other award 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 the 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.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS (PROPOSAL NO. 4)
The Board of Directors has appointed Grant Thornton LLP as independent
accountants of the Company for fiscal 2000. 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 LLP to be well qualified and recommends that the stockholders vote to
ratify that appointment. A representative of Grant Thornton LLP is not expected
to attend the 1999 Annual Meeting.
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock present in person or represented by proxy at
the 1999 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 2000 MEETING
Any proposal of stockholders that is intended to be presented at the
Company's 2000 Annual Meeting of Stockholders must be received at the Company's
principal executive offices no later than April 14, 2000 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 1999 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
/s/ Alexius A. Dyer III
Alexius A. Dyer III
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
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 ______________, 1999
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
10:00 a.m., local time, on _____________, 1999, 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 Messrs. McElwee and Mueller as Class II Directors to serve a
three-year term that will expire at the annual meeting of stockholders in 2002:
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF MESSRS. MCELWEE AND
MUELLER AS CLASS II DIRECTORS.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH
THE NOMINEE'S NAME ABOVE.
2. To approve amendments to the Company's Restated and Amended Certificate
of Incorporation and Amended and Restated Bylaws to provide for a Board of
Directors of not less than one nor more than 15 directors, as may be determined
by the Board of Directors from time to time:
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENTS TO THE
COMPANY'S RESTATED AND AMENDED CERTIFICATE OF INCORPORATION AND AMENDED AND
RESTATED BYLAWS.
3. To approve an amendment to the Company's 1996 Long Term Incentive and
Share Award Plan ("Plan") to increase by 109,000 the number of shares available
for grant under the Plan:
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT TO
THE PLAN.
4. To ratify the appointment of Grant Thornton LLP as independent auditors
for fiscal 2000:
FOR AGAINST ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF GRANT THORNTON LLP.
5. In the discretion of the proxies, on any other matter that may properly
come before the meeting or any adjournment thereof.
<PAGE>
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 APPEARS 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: , 1999
Signature of Shareholder
Print Name
Date: , 1999
Signature of Shareholder
Print Name
