<PAGE> 1
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 [X]
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-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COMMANDER AIRCRAFT COMPANY
- --------------------------------------------------------------------------------
(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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
COMMANDER AIRCRAFT COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 1997
The 1997 Annual Meeting of the Shareholders of Commander Aircraft Company,
a Virginia corporation (the "Company"), will be held on Friday, June 6, 1997 at
3:00 p.m. local time at The Watergate Hotel, 2650 Virginia Avenue, N.W.,
Washington, D.C. for the following purposes:
1. To elect a Board of three Directors.
2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
These items are more fully described in the Proxy Statement accompanying
this Notice.
Only shareholders of record at the close of business on April 28, 1997 are
entitled to notice of and to vote at the meeting.
A majority of the Company's outstanding shares must be represented at the
meeting (in person or by proxy) to transact business. To assure proper
representation at the meeting, please mark, sign, and date the enclosed proxy
and mail it promptly in the enclosed self-addressed envelope. Your proxy will
not be used if you revoke such proxy either before or at the meeting.
Stephen R. Buren
Chief Financial Officer
Dated: April 14, 1997
- --------------------------------------------------------------------------------
IF YOU ARE UNABLE TO BE PERSONALLY PRESENT, PLEASE SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. YOUR VOTE IS IMPORTANT.
- --------------------------------------------------------------------------------
<PAGE> 3
COMMANDER AIRCRAFT COMPANY
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
The enclosed proxy is solicited on behalf of the Board of Directors of
Commander Aircraft Company (the "Company") for use at the Annual Meeting of
Shareholders to be held Friday, June 6, 1997 at 3:00 p.m. local time, or any
adjournment or postponement thereof. The Annual Meeting will be held at The
Watergate Hotel, 2650 Virginia Avenue, N.W., Washington, D.C. The Company's
principal offices are located at 7200 Northwest 63rd Street, Hangar Eight, Wiley
Post Airport, Bethany, Oklahoma 73008, and its telephone number is (405)
495-8080. These proxy solicitation materials will be mailed to shareholders on
or about May 1, 1997.
Shareholders of record at the close of business on April 28, 1997 are
entitled to notice of, and to vote at, the Annual Meeting. On April 14, 1997,
6,920,548 shares of the Company's common stock were issued and outstanding. Each
share of common stock outstanding on the record date is entitled to one vote.
VOTES REQUIRED FOR APPROVAL
The three nominees for director receiving a plurality of the votes cast at
the meeting in person or by proxy shall be elected.
All other matters will be approved if the votes cast at the meeting in
person or by proxy favoring the action exceed the votes cast opposing the
action. Abstentions and broker non-votes will not be treated as votes cast and
therefore will have no effect on the outcome of the other matters to be voted on
at the Annual Meeting.
Any person may revoke a proxy at any time before its use by delivering to
the Company a written revocation or a duly executed proxy bearing a later date
or by attending the meeting and voting in person.
The cost of this solicitation will be borne by the Company. These costs
represent amounts normally expended for a solicitation for an election of
directors. The Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to such beneficial owners. Proxies may also be solicited
by certain of the Company's directors, officers and regular employees, without
additional compensation, personally, by telephone or otherwise.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of shareholders which are intended to be presented by such
shareholders at the Company's 1998 Annual Meeting must be received by the
Company no later than January 5, 1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 14, 1997 certain information
with respect to the beneficial ownership of the Company's common stock by (i)
any person (including any "group" within the meaning of Rule 13d-5 of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")) known by
the Company to be the beneficial owner of more than 5% of the Company's voting
securities, (ii) each director
<PAGE> 4
and each nominee for director to the Company, (iii) each of the executive
officers named in the Summary Compensation Table appearing herein, and (iv) all
executive officers and directors as a group.
<TABLE>
<CAPTION>
NUMBER PERCENT
NAME OF SHARES OF TOTAL
- ------------------------------------------------------------------------- --------- --------
<S> <C> <C>
Special Situations Investment Holdings, Ltd.............................. 4,559,868 65.9%
c/o KuwAm Corporation
2600 Virginia Avenue, N.W.
Washington, D.C. 20037 (1)
Special Situations Investment Holdings, L.P. II.......................... 373,000 5.4%
c/o KuwAm Corporation
2600 Virginia Avenue, N.W.
Washington, D.C. 20037 (1)
KuwAm Corporation........................................................ 174,000 2.5%
2600 Virginia Avenue, N.W.
Washington, D.C. 20037 (1)
Mishal Yousef Saud Al Sabah (2)(4)....................................... 406,328 5.9%
Wirt D. Walker, III (3)(4)............................................... 321,924 4.7%
N. Gene Criss (4)........................................................ 53,433 *
Stephen R. Buren (4)..................................................... 13,767 *
Dean N. Thomas (4)....................................................... 13,333 *
All Officers and Directors as a Group (5 persons) (5).................... 808,785 11.7%
</TABLE>
- ---------------
* Less than one percent
(1) Special Situation Investment Holdings, Ltd. ("SSIH"), Special Situation
Investment Holdings, L.P. II ("SSIH II") and KuwAm Corporation are members
of a "group" within the meaning of Rule 13d-5 under the Securities and
Exchange Act of 1934, as amended (the "KuwAm Group"). KuwAm Corporation, a
Washington, D.C. based private investment firm, is the general partner of
SSIH, the Company's majority shareholder, and SSIH II. The shareholders of
KuwAm include Wirt D. Walker, III, the Chairman and a director of the
Company, and Mishal Yousef Al Sabah, a director of the Company. Mr. Walker
is also the Managing Director of KuwAm. The KuwAm Group consists of the
following members having the following holdings: SSIH, 4,559,868 shares;
SSIH II, 373,000 shares; KuwAm, 174,000 shares; Mr. Walker, 278,590 shares;
a trust for Mr. Walker's son, of which Mr. Walker is trustee, 10,000 shares;
Mr. Al Sabah, 366,328 shares; Fifth Floor Company for General Trading &
Contracting ("Fifth Floor Company"), 161,000 shares. Each member of the
KuwAm Group disclaims beneficial ownership of shares owned by the other
group members, except that Mr. Walker has sole voting and dispositive power
with respect to the shares owned by him and by SSIH, SSIH II, KuwAm and the
trust for his son, and Mr. Al Sabah has sole voting and dispositive power
with respect to the shares owned by him and Fifth Floor Company.
(2) Includes 161,000 shares owned by Fifth Floor Company of which Mr. Al Sabah
is a principal. Does not include shares that Mr. Al Sabah may be deemed to
own beneficially by virtue of his membership in the KuwAm Group.
(3) Includes 10,000 shares owned by a trust for Mr. Walker's son, of which Mr.
Walker is the trustee. Mr. Walker also has sole voting and dispositive power
with respect to shares owned by SSIH, SSIH II and KuwAm. Does not include
shares Mr. Walker may be deemed to own beneficially by virtue of his
membership in the KuwAm Group.
(4) Includes shares issuable upon exercise of currently exercisable options, as
follows: Mr. Al Sabah, 40,000 shares; Mr. Walker, 33,334 shares; Mr. Criss,
53,333 shares; Mr. Buren 6,667 shares; and Mr. Thomas, 13,333 shares.
(5) At April 14, 1997, executive officers and directors of the Company as a
group (5 persons) held options to purchase an aggregate of 418,333 shares of
common stock, representing approximately 76% of outstanding options at that
date. The numbers set forth in this table include an aggregate of 146,667
shares currently exercisable within 60 days of such date.
2
<PAGE> 5
ELECTION OF DIRECTORS
NOMINEES
A board of three directors is to be elected at the Annual Meeting. Unless
marked to the contrary, all properly signed and returned proxies will be voted
for the election of management's three nominees named below, all of whom are
presently directors of the Company. If any nominee is unable or, for good cause,
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee designated by the present Board of Directors to
fill the vacancy. The Company is not aware of any nominee who will be unable or
will decline to serve as a director. The term of office of each person elected
as a director will continue until the next Annual Meeting of Shareholders or
until a successor has been elected and qualified.
The following sets forth certain information regarding each of the nominees
for election as director:
Wirt D. Walker, III, age 51, has served as a director of the Company
from September 1989 to February 1991, and as Chairman of the Board of
Directors since May 1991. Mr. Walker served as the Company's Chief
Executive Officer from May 1991 to August 1991 and from December 1992 to
May 1995. Since 1982, Mr. Walker has served as a director and the Managing
Director of KuwAm Corporation, a private investment firm. He is the
Chairman of Advanced Laser Graphics, Inc. and Securacom, Incorporated.
N. Gene Criss, age 54, has served as President and Chief Executive
Officer since May 1995. Mr. Criss served as President and Chief Operating
Officer from December 1994 to May 1995, as Executive Vice President and
Chief Operating Officer from November 1992 to December 1994 and as a
director since August 1993. He served as Vice President, Manufacturing at
American General Aircraft Company, a manufacturer of light single engine
general aviation aircraft from July 1992 to November 1992. Prior to July
1992, Mr. Criss held a variety of positions of increasing responsibility
during a twenty-two year career at Piper Aircraft Corporation, including
service as Director of Materials and Manufacturing Support from 1982 to
June 1992. During his tenure with Piper Aircraft Corporation, Mr. Criss was
responsible for corporate scheduling, production and material control,
inventory control and engineering administration.
Mishal Yousef Saud Al Sabah, 36, is a private investor who has been
involved in a broad range of investment activities in the United States and
overseas for the past eighteen years. Mr. Al Sabah has been a director of
the Company since 1991. He has served as the Chairman of the Board of
Directors of KuwAm Corporation since 1982 and is a director of Advanced
Laser Graphics, Inc., and Securacom, Incorporated.
DIRECTOR COMPENSATION
Directors are paid an annual fee of $20,000, payable in equal quarterly
installments, for services as a director. Such fees are prorated when a director
does not serve for a full year. Directors receive no additional compensation for
committee participation or attendance at committee meetings, other than
reimbursement of travel and lodging expenses.
The 1993 Stock Option Plan provides for the automatic annual grant of a
stock option to purchase 20,000 shares of common stock to each eligible
non-employee and employee director of the Company; non-employee directors will
automatically receive a nonstatutory stock option and employee directors will
automatically receive an incentive stock option. The 1996 annual automatic
options were granted to each of the three directors on December 20, 1996.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of four meetings during the fiscal year
ended December 31, 1996. The Board has two committees: the Audit Committee and
the Compensation Committee.
3
<PAGE> 6
The Audit Committee, comprised of Messrs. Walker and Al Sabah, recommends
the selection of the Company's independent accountants and approves the scope of
the audit to be conducted. The Committee is primarily responsible for reviewing
and evaluating the Company's accounting practices and its systems of internal
accounting controls. The Audit Committee held one meeting during fiscal 1996.
The Compensation Committee recommends the amount and type of compensation
to be paid to the Company's executive officers, reviews the performance of the
Company's key employees, and administers and determines distributions under the
Company's Profit Sharing Plan. The Compensation Committee will also determine
the number of shares, if any, to be granted each employee under such plan and
the terms of such grants. The Compensation Committee held two meetings during
1996.
No director attended fewer than 75% of all meetings of the Board of
Directors held during fiscal 1996 or of all meetings of any committee upon which
such director served during fiscal 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Mr. Walker and Mr. Al Sabah;
neither are employees of the Company. They are not eligible to participate in
the Company's Profit Sharing Plan. Both receive compensation for services as a
director (See "Director Compensation"). Mr. Walker served as Chief Executive
Officer of the Company from December 1992 to May 1995. Messrs. Walker and Al
Sabah are directors and shareholders of KuwAm Corporation, the corporate general
partner of SSIH, the majority shareholder of the Company.
OTHER OFFICERS
Stephen R. Buren, age 53, has served as Chief Financial Officer of the
Company since May 1991 and as Vice President and Treasurer of the Company since
1990. He was Vice President, Finance and Treasurer of Mycro-Tek, Inc. from 1987
to 1990, and was Vice President, Finance of Health Technologies, Inc. from 1986
to 1987. From 1974 to 1986 he held division and corporate controllership
positions at Cessna Aircraft Company.
Dean N. Thomas, age 42, has served as Senior Vice President -- Sales and
Marketing since January 1995. He was President of Strategic Marketing Resources,
a marketing consulting firm, from 1990 to 1994, and held various positions at
Piper Aircraft Corporation from 1981 to 1990, including Director of Marketing
and Director of Product Development.
4
<PAGE> 7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows certain information concerning the compensation
of each of the Company's executive officers for services rendered in all
capacities to the Company for the fiscal years ended 1996, 1995, and 1994.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
SECURITIES
UNDERLYING
ANNUAL COMPENSATION OPTIONS ALL OTHER
------------------- AWARDED COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (IN SHARES) (1)
- --------------------------------------------- ---- -------- ------- ----------- ------------
<S> <C> <C> <C> <C> <C>
N. Gene Criss................................ 1996 $114,590 -- 60,000 $ 20,000
President, Chief Executive 1995 $116,390 -- 60,000 $ 10,000
Officer and Director (2) 1994 $117,943 -- 20,000 $ 10,000
Stephen R. Buren............................. 1996 $ 72,170 -- 25,000 --
Vice President, Chief Financial Officer
and 1995 $ 72,085 -- 10,000 --
Treasurer 1994 $ 62,886 -- -- --
Dean N. Thomas............................... 1996 $ 52,102 $12,200 10,000 --
Senior Vice President -- Sales and
Marketing 1995 $ 49,000 $ 4,397 20,000 --
1994 -- -- -- --
Wirt D. Walker, III.......................... 1996 -- -- 20,000 $ 20,000
Chairman (3) 1995 -- -- 20,000 $ 10,000
1994 -- -- 20,000 $ 10,000
Herbert B. Franck (4)........................ 1996 -- -- -- --
1995 -- -- -- --
1994 $138,371 -- -- $ 12,792
</TABLE>
- ---------------
(1) Amounts paid as director fees unless otherwise indicated.
(2) Mr. Criss joined the Company in November 1992 and became a director in
August 1993. His annual salary is $125,000.
(3) Mr. Walker served as Chief Executive Officer of the Company from December
1992 to May 1995.
(4) Mr. Franck served as President of the Company from October 1993 to October
1994 and as a director from December 1993 to October 1994. His annual base
salary was $135,000. Other compensation in 1994 includes $8,333 of director
fees and $4,459 paid for a life insurance premium.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table shows the number of shares of common stock acquired by
the executive officers upon the exercise of stock options during fiscal 1996,
the new value realized at exercise, the number of shares of common stock
represented by outstanding stock options held by each executive officer as of
December 31,
5
<PAGE> 8
1996 and the value of such options based on the closing price of the Company's
common stock on December 31, 1996, which was $2.00 per share.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
NUMBER OF VALUE OPTIONS AT FY END (#) (1) AT FY END ($) (2)
SHARES ACQUIRED REALIZED ($) ------------------------- -------------------------
NAME ON EXERCISE (#) (3) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------- --------------- --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Wirt D. Walker, III... -- -- 33,334/ 39,999 $ 0/0
N. Gene Criss......... -- -- 53,333/106,667 $ 0/0
Stephen R. Buren...... -- -- 3,333/ 31,667 $ 0/0
Dean N. Thomas........ -- -- 6,666/ 23,334 $ 0/0
</TABLE>
- ---------------
(1) Represents the total number of shares subject to stock options held by each
executive officer. These options were granted at various dates during fiscal
years 1993 through 1996 and are exercisable on various dates beginning in
1994 and expiring in 2001.
(2) Represents the difference between the exercise price and $2.00, which was
the December 31, 1996 closing price. Stock option exercise prices range from
$2.25 to $5.25, therefore no options were in-the-money at December 31, 1996.
(3) Aggregate market value of the shares covered by the option at the date of
exercise, less the aggregate exercise price. No options were exercised in
1996.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
composed of Wirt D. Walker, III and Mishal Yousef Saud Al Sabah. Both are
independent outside directors. The Committee is charged with the responsibility
for reviewing the performance and approving the compensation of key executives
and for establishing general compensation policies and standards for reviewing
management performance. The Committee also reviews both corporate and key
executive performance in light of established criteria and goals and approves
individual key executive compensation.
COMPENSATION PHILOSOPHY
The executive compensation policy of the Company is to provide competitive
levels of compensation that advance the Company's annual and long-term
performance objectives, reward corporate performance, and assist the Company in
attracting, retaining and motivating highly qualified executives. The framework
for the Committee's executive compensation programs is to establish base
salaries which are competitive with similar sized companies and to create
incentives for excellent performance by providing executives with the
opportunity to earn additional remuneration linked to the Company's
profitability. The incentive plan goals are designed to improve the
effectiveness and enhance the efficiency of Company operations and to create
value for the stockholders. It is also the Company's policy to encourage share
ownership by executive officers and non-employee directors through the grant of
stock options.
COMPONENTS OF COMPENSATION
The compensation package of the Company's executive officers consists of
base annual salary, participation in the Company's Profit Sharing Plan and stock
option grants.
At executive levels, base salaries are reviewed but not necessarily
increased annually. Base salaries are fixed at levels slightly below competitive
amounts paid to individuals with comparable qualifications, experience and
responsibilities engaged in similar businesses as the Company, based on the
experience of the Committee members, directors and employees of the Company
within the aviation industry.
The Company has adopted a Profit Sharing Plan which is intended to advance
the interests of the Company by providing eligible employees with annual
incentive to increase the productivity of the Company. Unless the Board of
Directors determines otherwise prior to the end of a fiscal year, the Profit
Sharing Plan provides for payment to selected employees of an aggregate of 10%
of the consolidated pre-tax profits of the
6
<PAGE> 9
\
Company for the fiscal year. The Compensation Committee administers the Profit
Sharing Plan and selects the employees who will receive profit sharing awards.
Profit sharing awards are based upon an employee's salary, level of
responsibility and attainment of performance goals and objectives. Profit
sharing awards are paid as soon as practicable following the end of the fiscal
year.
The Company uses stock options both to reward past performance and to
motivate future performance, especially long-term performance. The Committee
believes that through the use of stock options, executive interests are directly
tied to enhancing shareholder value. Stock options are granted at fair market
value as of the date of grant and generally have a term of three to five years.
The options vest 33% per year, beginning on the first anniversary date of the
grant. The stock options provide value to the recipients only when the market
price of the Company's common stock increases above the option grant price and
only as the shares vest and become exercisable.
Section 162(m) of the Internal Revenue Code, which provides for a
$1,000,000 limit on the deductibility of compensation, presently is not
applicable to the Company. The Committee will review this policy with respect to
Section 162(m) when and if the section is applicable in the future.
In accordance with the Company's compensation philosophy, the Board of
Directors approved an increase in the base salary of Mr. Thomas during 1996.
OPTION GRANTS IN LAST FISCAL YEAR
The Committee approved the following stock option grants for the executive
officers during fiscal year 1996.
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE VALUE
NUMBER OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION --------------------------
NAME GRANTED (1) FISCAL YEAR PRICE DATE 5% 10%
- ----------------------- ----------- ------------ -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Wirt D. Walker, III.... 20,000 11% $2.250 12/20/01 $ 12,433 $ 27,473
N. Gene Criss.......... 40,000 21% $4.500 8/30/99 $ 28,373 $ 59,590
20,000 11% $2.250 12/20/01 $ 12,433 $ 27,473
----------- -----
60,000 32%
Stephen R. Buren....... 25,000 13% $4.500 8/30/99 $ 17,733 $ 37,238
Dean N. Thomas......... 10,000 5% $4.500 8/30/99 $ 7,093 $ 14,895
</TABLE>
- ---------------
(1) Each option is non-transferable; vests as to 33% of the shares covered by
such option over three years, commencing on the first anniversary of the
date of issuance; is canceled prior to vesting in the event the holder
either resigns from the Company or is terminated for justifiable cause; and
is void after the date listed under the heading "Expiration Date." The
exercise price of the stock subject to options was equal to the market value
on the date of the grant. The number of shares issuable upon exercise of
each option is subject to adjustment subsequent to any stock dividend,
split-up, recapitalization or certain other transactions.
During 1996, Messrs. Walker, Al Sabah and Criss, directors of the Company,
were granted an option to purchase 20,000 shares of common stock pursuant to
the 1993 Stock Option Plan.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and holders of more than ten percent of the
Company's common stock to file reports of ownership and reports of changes in
ownership of common stock and other equity securities of the Company. The
Company believes that during the fiscal year ended December 31, 1996, its
officers, directors and holders of more than 10% of the Company's common stock
complied with all Section 16(a) filing requirements.
7
<PAGE> 10
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Committee makes decisions regarding the compensation of the Chief
Executive Officer using the same philosophy set forth above. The Committee's
approach in setting Mr. Criss' base compensation, as with that of the Company's
other executives, is to be competitive with other companies within the industry,
taking into consideration company size, operating conditions and compensation
philosophy and performance. Mr. Criss' base salary was not increased during
fiscal 1996. Mr. Criss' fiscal 1996 incentive compensation was earned under the
same performance criteria that were described previously in this report. He was
granted options to purchase a total of 60,000 shares of the Company's common
stock during fiscal 1996, of which 20,000 shares represents the automatic grant
to directors.
COMPENSATION COMMITTEE
Wirt D. Walker, III
Mishal Yousef Saud Al Sabah
8
<PAGE> 11
PERFORMANCE GRAPH
The Securities and Exchange Commission requires that the Corporation
includes in this Proxy Statement a line-graph presentation comparing cumulative,
five year shareholder returns on an indexed basis with (i) a broad equity market
index and (ii) either an industry index or peer group. An initial public
offering of the Company's stock occurred on April 19, 1993. The following graph
compares the percentage change in the cumulative total return of the Nasdaq
Stock Market -- US Index and the Standard & Poor's Aerospace/Defense Industry
Index for a period of 44 months. Total return for the purpose of this graph
assumes reinvestment of all dividends, if any. The stock price information shown
on the graph is not necessarily indicative of future price performance.
COMPARISON OF 44 MONTH CUMULATIVE TOTAL RETURN*
AMONG COMMANDER AIRCRAFT COMPANY, THE NASDAQ STOCK MARKET -- US INDEX
AND THE S&P AEROSPACE/DEFENSE INDEX
Commander NASDAQ S&P
Aircraft Stock Aerospace/
Company Market--US Defense
4/19/93 100 100 100
12/93 61 113 127
12/94 51 110 137
12/95 38 156 227
12/96 21 192 303
* $100 invested on 4/19/93 in stock or on 3/31/93 in index -- including
reinvestment of dividends. Fiscal year ending December 31.
9
<PAGE> 12
CERTAIN TRANSACTIONS
During 1996, the Company sold, on open account, approximately $88,000 in
spare parts and no new aircraft to Commander International, a Commander
Authorized Sales and Service Representative located in Dubai that is owned by
Mishal Yousef Al Sabah, a director of the Company. All sales were at prices
comparable to sales to unrelated parties. In 1996, the Company received cash
payments totaling $2,047,000 (of which $384,126 represents payment of interest).
The $5,000,000 line of credit was extended until June 30, 1997 and bears
interest at 1% over the Morgan Guaranty of New York prime rate (9.25% at
December 31, 1996), with interest paid quarterly in arrears. Through April 2,
1997, the Company received additional payments of principal and interest
totaling $325,000. The outstanding balance under this line of credit was
$2,395,758 at April 2, 1997.
During 1995, the Company sold eight new aircraft to Commander
International. Such sales were at prices comparable to unrelated third parties.
The Company received cash payments totaling $1,390,000 in 1995 and extended
financing of approximately $3,045,000 under the above referenced line of credit.
On January 6, 1997, the Board of Directors of the Company accepted an offer
by the majority stockholder and its affiliates to exchange $2,000,000 of 10%
notes payable for 200,000 shares of newly issued common stock effective February
1, 1997. The repayment of accrued interest outstanding at December 31, 1996 and
February 1, 1997 was waived. The maturity date of the remaining $900,000 notes
payable was extended to December 31, 1997 with interest payable June 30, 1997
and December 31, 1997. Accrued interest paid to Special Situation Investment
Holdings, Ltd., Special Situation Investment Holdings, L.P. II and KuwAm
Corporation totaled $248,977 for 1996.
INDEPENDENT AUDITORS
The Board of Directors has approved a resolution retaining Grant Thornton
LLP as its independent auditors for fiscal 1997.
A representative of Grant Thornton LLP will be present at the Annual
Meeting and will have an opportunity at the meeting to make a statement if he
desires to do so and will be available to respond to appropriate questions.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
Stephen R. Buren
Chief Financial Officer
Dated: April 14, 1997
10
<PAGE> 13
COMMANDER AIRCRAFT COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 6, 1997
The undersigned, having received the Annual Report to the
Stockholders and the accompanying Notice of Annual Meeting of Stockholders and
Proxy Statement dated April 14, 1997 hereby appoints Wirt D. Walker, III,
Stephen R. Buren and each of them, proxies with full power of authorization, and
hereby authorizes them to represent and vote the shares of Common Stock of
COMMANDER AIRCRAFT COMPANY (the "Company") which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders of
the Company to be held on June 6, 1997 at 3:00 p.m. local time, and any
adjournment thereof, and especially to vote
<TABLE>
<S> <C>
1. PROPOSAL ONE -- ELECTION OF DIRECTORS WITHHOLD AUTHORITY
FOR all nominees listed below _ to vote for all nominees listed below _
Wirt D. Walker, III, N. Gene Criss, Mishal Yousef Saud Al Sabah
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.
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2. IN THEIR DISCRETION THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
ON REVERSE SIDE
In the ballot provided for that purpose, if you specify a choice as
the action to be taken this proxy will be voted in accordance with such choice.
If you do not specify a choice, it will be voted FOR Proposal One as described
in the Proxy Statement.
Any proxy or proxies previously given for the meeting are revoked.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
Dated:__________________________________, 1997
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(Signature)
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(Signature if held jointly)
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should
sign. When signing as attorney, executor,
administrator, trustee or guardian please give
full title of each. If a corporation, please sign
in full corporate name by president or other
authorized office. If a partnership, please sign
in partnership name by authorized person.
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