<PAGE>
SCHEDULE 14A INFORMATION
(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 Section 240.14a-11(c) or Section
240.14a-12
COMMISSION FILE NO. 0-23224
GREAT LAKES AVIATION, LTD.
- --------------------------------------------------------------------------------
(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)(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>
GREAT LAKES AVIATION, LTD.
1708 38TH AVENUE WEST
SPENCER, IOWA 51301-9211
------------------------
May 18, 1998
Dear Shareholder of Great Lakes Aviation, Ltd.:
You are cordially invited to attend the Annual Meeting of Shareholders of
Great Lakes Aviation, Ltd., to be held at The Inn Resort Complex, 3301 Lakeshore
Drive, Okoboji, Iowa 51355, on Friday, June 12, 1998, at 10:00 a.m., local time.
At the Annual Meeting you will be asked to vote for the election of four
directors of the Company and to ratify the appointment by the Board of Directors
of KPMG Peat Marwick LLP as the Company's independent auditors for the fiscal
year ending December 31, 1998. The accompanying material contains the Notice of
Annual Meeting, the Proxy Statement which includes information about the matters
to be acted upon at the Annual Meeting, and the related Proxy Card.
I encourage you to attend the Company's Annual Meeting. Whether or not you
are able to attend the Annual Meeting in person, I urge you to sign and date the
enclosed Proxy and return it promptly in the enclosed envelope. If you do attend
the Annual Meeting in person, you may withdraw your Proxy and vote personally on
any matters brought properly before the Annual Meeting.
Very truly yours,
GREAT LAKES AVIATION, LTD.
/S/ DOUGLAS G. VOSS
--------------------------------------
DOUGLAS G. VOSS
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
GREAT LAKES AVIATION, LTD.
1708 38TH AVENUE WEST
SPENCER, IOWA 51301-9211
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, JUNE 12, 1998
---------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Great
Lakes Aviation, Ltd. (the "Company") will be held at The Inn Resort Complex,
3301 Lakeshore Drive, Okoboji, Iowa, 51355, on Friday, June 12, 1998, at 10:00
a.m., local time, for the following purposes, as more fully described in the
accompanying Proxy Statement:
1. To elect four directors, each to serve until the next Annual Meeting of
Shareholders and until their successors are duly elected and qualified;
2. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1998; and
3. In his discretion, the proxy is authorized to vote upon such other
business as may properly come before the Annual Meeting or any
adjournment or postponement thereof.
The transfer books of the Company will not be closed for the Annual Meeting.
Only shareholders of record at the close of business on May 12, 1998, are
entitled to notice of and to vote at the Annual Meeting.
All shareholders are cordially invited and requested to attend the Annual
Meeting in person. Shareholders who are unable to attend in person are requested
to complete, date and sign the enclosed proxy exactly as your name appears
thereon and promptly return it in the envelope provided, which requires no
postage if mailed in the United States. Your proxy is being solicited by the
Board of Directors of the Company. Your attendance at the Annual Meeting,
whether in person or by proxy, is important to ensure a quorum. If you return
your proxy, you still may vote your shares in person by giving written notice
(by subsequent proxy or otherwise) to the Secretary of the Company at any time
prior to your vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ DOUGLAS G. VOSS
--------------------------------------
DOUGLAS G. VOSS
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Spencer, Iowa
May 18, 1998
<PAGE>
GREAT LAKES AVIATION, LTD.
1708 38TH AVENUE WEST
SPENCER, IOWA 51301-9211
------------------------
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 12, 1998
------------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board of Directors" or the "Board") of
Great Lakes Aviation, Ltd. (the "Company"), to be voted at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at The Inn Resort Complex, 3301
Lakeshore Drive, Okoboji, Iowa, 51355, on Friday, June 12, 1998, at 10:00 a.m.,
local time, and at any adjournment or postponement thereof. The Notice of Annual
Meeting, this Proxy Statement and the enclosed proxy are first being mailed to
Shareholders on or about May 18, 1998.
Proxies in the accompanying form are solicited on behalf, and at the
direction, of the Board of Directors of the Company. All shares of the Company's
common stock ("Common Stock") represented by properly executed proxies, unless
such proxies have previously been revoked, will be voted at the Annual Meeting
and, where the manner of voting is specified on the Proxy, will be voted in
accordance with such specifications. Shares of Common Stock represented by
properly executed proxies on which no specification has been made will be voted:
(i) in favor of the election of the nominees for directors listed herein; and
(ii) in favor of the selection of KPMG Peat Marwick LLP as the independent
public accountants of the Company. If any other matters are properly presented
at the Annual Meeting for action, including a question of adjourning the Annual
Meeting from time to time, the person named in the proxies and acting thereunder
will have discretion to vote on such matters in accordance with his best
judgment. If a properly executed Proxy is returned and the shareholder has
abstained from voting on any matter, the shares of Common Stock represented by
such Proxy will be considered present at the Annual Meeting for purposes of
determining a quorum and for purposes of calculating the vote, but will not be
considered to have been voted in favor of such matter. When stock is held in the
name of more than one person, each such person should sign the Proxy. If the
shareholder is a corporation, the Proxy should be signed in the name of such
corporation by an executive or other authorized officer. If signed as attorney,
executor, administrator, trustee, guardian or in any other representative
capacity, the signer's full title should be given and, if not previously
furnished, a certificate or other evidence of appointment should be furnished.
If a properly executed Proxy is returned by a broker holding shares of Common
Stock in street name which indicates that the broker does not have discretionary
authority as to certain of such shares to vote on one or more matters, such
shares will be considered present at the Annual Meeting for purposes of
determining a quorum, but will not be considered to be represented at the Annual
Meeting for purposes of calculating the vote with respect to such matter.
Any shareholder who executes and returns a Proxy may revoke it at any time
before it is voted by giving written notice of revocation to the Secretary of
the Company, by executing a later-dated Proxy relating to the same shares and
delivering it to the Secretary of the Company, or by attending the Annual
Meeting, filing a written notice of revocation and voting in person the shares
to which the Proxy relates.
The Board has fixed the close of business on May 12, 1998 as the Record Date
for determining the holders of outstanding shares of Common Stock entitled to
notice of, and to vote at, the Annual Meeting. As of April 30, 1998, there were
7,590,843 shares of Common Stock issued, outstanding and entitled to
<PAGE>
vote. Each holder of Common Stock is entitled to one vote, exercisable in person
or by Proxy, for each share of Common Stock held of record on the Record Date.
SECURITY OWNERSHIP OF
MANAGEMENT AND OTHERS
The following table contains certain information as of April 30, 1998
regarding the beneficial ownership of the Common Stock by (i) each person known
to the Company to own beneficially five percent or more of the Common Stock,
(ii) each director of the Company, (iii) each executive officer of the Company
and (iv) the directors and executive officers as a group. Any shares which are
subject to an option or a warrant exercisable within 60 days are reflected in
the following table and are deemed to be outstanding for the purpose of
computing the percentage of Common Stock owned by the option or warrant holder
but are not deemed to be outstanding for the purpose of computing the percentage
of Common Stock owned by any other person. Unless otherwise indicated, each
person in the table has sole voting and investment power as to the shares shown.
The business address of each of the following individuals is 1708 38th Avenue
West, Spencer, Iowa 51301-9211.
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND NATURE OF
OF BENEFICIAL OUTSTANDING
OWNERSHIP(1) STOCK
------------------ ------------
<S> <C> <C>
Douglas G. Voss................................................................ 4,775,000(2)(3) 62.9%
Gayle R. Voss.................................................................. 2,350,000(2) (3)
Richard A. Hanson.............................................................. 100 *
Ivan L. Simpson................................................................ 500 *
Vernon A. Mickelson............................................................ 15,000(4) *
All directors and officers as a group (5 persons).............................. 4,790,600 63.1%
</TABLE>
- ------------------------
* Indicates ownership of less than 1% of the outstanding shares of Common
Stock.
(1) The securities "beneficially owned" by a person are determined in accordance
with the definition of "beneficial ownership" set forth in the regulations
of the Securities and Exchange Commission (the "Commission") and
accordingly, may include securities owned by or for, among others, the
spouse, children or certain other relatives of such person as well as other
securities as to which the person has or shares voting or investment power
or has the right to acquire within 60 days. The same shares may be
beneficially owned by more than one person.
(2) Ms. Voss has granted to Mr. Voss an irrevocable proxy to vote all of her
shares of Common Stock (the "Shares") until June 28, 2010. Mr. and Ms. Voss
have also entered into a Shareholder Buy-Sell Agreement (the "Agreement")
with respect to the Shares. The term of the Agreement (the "Term") is until
June 28, 2010 or until such time as Ms. Voss does not own any Shares or the
Company is dissolved or liquidated. Pursuant to the Agreement, Ms. Voss may
not sell any Shares until June 28, 1999, at which time she may sell 470,000
Shares and an additional 235,000 Shares in each year thereafter. Mr. Voss,
however, has been granted a right of first refusal to purchase for the
market price any Shares which Ms. Voss desires to so sell. The Agreement
also provides Mr. Voss the option to purchase any Shares at any time during
the Term for the market price of shares of Common Stock. The Agreement
provides that in any transaction in which Mr. Voss sells greater than 5% of
his shares of Common Stock, Mr. Voss has the right to compel Ms. Voss to
include the Shares held by her in such transaction on the same terms as the
shares of Common Stock of Mr. Voss. In turn, Ms. Voss has the right to have
her Shares included by Mr. Voss in any such transaction on a pro rata basis.
The Agreement also provides Mr. Voss with the right to purchase the Shares
at the market price upon the
2
<PAGE>
death of Ms. Voss and an involuntary disposition of the Shares held by Ms.
Voss. Pursuant to the Agreement, Mr. Voss will vote all shares of Common
Stock beneficially owned by him (including the Shares) for the election of
Ms. Voss to the Board.
(3) Mr. Voss is the beneficial owner of 2,425,000 shares of Common Stock. Ms.
Voss is the record owner of 2,350,000 shares of Common Stock. The shares of
Common Stock owned by Ms. Voss are included in the 4,775,000 shares of
Common Stock reported by Mr. Voss.
(4) Includes 8,000 shares of Common Stock subject to currently exercisable
options.
3
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the compensation
received by the Company's Chief Executive Officer and the other most highly
compensated executive officers of the Company whose salaries exceeded $100,000
for the years ended December 31, 1997, 1996 and 1995. No stock options were
granted to executive officers during the last fiscal year, nor did any of the
executive officers hold any options on December 31, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
-------------------------- UNDERLYING
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY ($) OPTIONS(#)
- ----------------------------------------------------------------- ------------- ----------- -------------
<S> <C> <C> <C>
Douglas G. Voss.................................................. 1997 127,500 --
1996 127,500 --
1995 127,500 --
A. L. Maxson(2).................................................. 1997 85,750 -
Chief Financial Officer 1996 120,000 70,000(1)
1995 120,000 100,000
George A. Rasmusson(3)........................................... 1997 72,305 -
Executive Vice President 1996 105,000 14,000(1)
1995 105,000 20,000
</TABLE>
- ------------------------
(1) Represents options granted in exchange for cancellation of options granted
in previous year.
(2) Mr. Maxson's employment with the Company and his position as a director of
the Company ceased on July 17, 1997.
(3) Mr. Rasmusson's employment with the Company ceased on March 28, 1997.
4
<PAGE>
BOARD REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee determined the compensation arrangements for the
Company's executive officers for 1997 in April 1997. The Compensation
Committee's principal responsibility is to ensure the Company's executive and
director compensation plans are aligned with and promote the Company's business
objectives. In particular, because the operations of the Company have expanded
rapidly in recent years the Compensation Committee is seeking to structure and
implement an executive compensation package which will attract and retain
executives capable of managing these expanded operations and assuring the future
success of the Company.
The Company's executive compensation package in 1997 consisted of two main
components: (i) base salary, and (ii) stock options. The base salary of each of
the executive officers was determined after considering the responsibilities and
performance of the individual officer, the experience of the individual officer
and base salaries for comparable companies. For 1997, base salaries of the
Company's executive officers were below market levels for comparable companies.
Stock option grants under the Company's 1993 Stock Option Plan, which was
approved by the Company's shareholders, are designed to align the long-term
interests of the Company's executives and its shareholders and assist in the
retention of executives. No options were granted to executive officers during
the last fiscal year.
In determining the compensation package for Douglas G. Voss, the Chief
Executive Officer of the Company, the Compensation Committee noted that the
ownership by Mr. Voss of a substantial number of shares of Common Stock uniquely
aligns his long-term interests with the Company's shareholders. In light
thereof, the Compensation Committee has not awarded Mr. Voss any stock options
to date nor has the Compensation Committee otherwise tied Mr. Voss' compensation
to Company performance.
Compensation Committee:
Vernon A. Mickelson
Ivan L. Simpson
5
<PAGE>
COMPANY STOCK PERFORMANCE
Set forth below is a graph prepared by the Center for Research in Security
Prices ("CRSP") comparing the cumulative total shareholder return on shares of
Common Stock since January 20, 1994, the effective date of the Company's initial
public offering, through December 31, 1997, with the cumulative total return on
the CRSP Total Returns Index for The NASDAQ Stock Market (U.S. Companies) and
the CRSP Total Returns Index for NASDAQ Stocks (SIC 4510-4529US) (an index of
peer companies represented by companies engaged in air transportation, and
regional airlines) for the same period. The graph assumes an initial investment
of $100.00 and reinvestment of dividends, if any.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEGEND SYMBOL CRSP TOTAL RETURNS INDEX FOR:
<S> <C> <C> <C>
Great Lakes Nasdaq Stock Market NASDAQ Stocks (SIC4510-4529 US)
Aviation,
Ltd. (US Companies) Air Transportation Services
12/31/92 $85.499 $70.265
1/31/93 $87.933 $68.938
2/28/93 $84.653 $79.945
3/31/93 $87.103 $95.536
4/30/93 $83.386 $100.786
5/31/93 $88.365 $110.246
6/30/93 $88.771 $96.857
7/31/93 $88.877 $95.790
8/31/93 $93.470 $99.075
9/30/93 $96.254 $94.685
10/31/93 $98.417 $99.712
11/30/93 $95.484 $98.906
12/31/93 $98.146 $96.031
1/31/94 $106.122 $101.125 $100.911
2/28/94 $101.020 $100.181 $97.453
3/31/94 $102.041 $94.020 $93.516
4/30/94 $66.327 $92.800 $92.194
5/31/94 $66.327 $93.026 $82.675
6/30/94 $63.265 $89.623 $77.315
7/31/94 $53.061 $91.461 $86.520
8/31/94 $60.204 $97.293 $89.204
9/30/94 $40.816 $97.044 $79.413
10/31/94 $38.776 $98.951 $78.942
11/30/94 $39.796 $95.668 $69.600
12/31/94 $40.816 $95.936 $66.178
1/31/95 $32.653 $96.474 $69.497
2/28/95 $36.735 $101.576 $84.150
3/31/95 $37.755 $104.588 $92.887
4/30/95 $30.612 $107.882 $104.489
5/31/95 $33.673 $110.665 $105.165
6/30/95 $51.020 $119.634 $129.790
7/31/95 $53.061 $128.427 $131.770
8/31/95 $47.959 $131.031 $128.614
9/30/95 $7.959 $134.045 $139.070
10/31/95 $38.776 $133.276 $145.180
11/30/95 $34.694 $136.405 $167.802
12/31/95 $30.612 $135.679 $156.228
1/31/96 $33.163 $136.347 $140.501
2/29/96 $30.612 $141.536 $152.226
3/31/96 $30.612 $142.006 $164.881
4/30/96 $33.673 $153.787 $155.533
5/31/96 $48.980 $160.849 $143.509
6/30/96 $40.816 $153.598 $137.849
7/31/96 $32.653 $139.921 $124.089
8/31/96 $29.082 $147.760 $129.263
9/30/96 $22.449 $159.063 $122.572
10/31/96 $23.469 $157.306 $113.597
11/30/96 $23.469 $167.030 $128.265
12/31/96 $20.408 $166.880 $121.236
1/31/97 $22.449 $178.740 $113.102
2/28/97 $18.367 $168.859 $114.052
3/31/97 $10.204 $157.835 $117.287
4/30/97 $12.245 $162.769 $118.994
5/31/97 $10.204 $181.223 $131.275
6/30/97 $6.122 $186.768 $125.848
7/31/97 $10.077 $206.483 $133.480
8/29/97 $10.204 $206.169 $126.555
9/30/97 $8.163 $218.366 $137.786
10/31/97 $8.163 $207.062 $148.406
11/30/97 $7.143 $208.099 $140.051
12/31/97 $14.286 $204.837 $152.306
Notes:
A. The lines represent monthly
index levels derived from compounded
daily returns that include all
dividends.
B. The indexes are reweighted daily,
using the market capitalization on
the previous trading day.
C. If the monthly interval, based on
the fiscal year-end, is not a
trading
day, the preceding trading day is
used.
D. The index level for all series
was
set to $100.0 on 01/20/94.
</TABLE>
6
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The person named in the accompanying proxy will vote for the election of the
below named nominees, unless authority to vote is withheld. Each of the four
nominees presented for director is currently a member of the Board and was
previously elected by the Company's shareholders, except for Mr. Ivan L. Simpson
who was elected by the Board to fill a vacancy created by an increase in the
number of directors of the Company on August 22, 1997. Directors of the Company
are elected annually to serve until the next Annual Meeting of Shareholders or
until their successors are duly elected and qualified. The Board unanimously
recommends a vote for each of the following nominees. All nominees have agreed
to stand for election at the Annual Meeting. If, prior to the Annual Meeting,
the Board learns that any nominee will be unable to serve by reason of death,
incapacity, or other unexpected occurrence, the proxies which would have
otherwise been voted for such nominee will be voted for a substitute nominee, if
any, elected by the Board.
NOMINEES FOR ELECTION AS DIRECTOR
The following table sets forth certain information regarding the nominees
for election as director of the Company. All of the directors of the Company
elected at the Annual Meeting will serve until their successors are duly elected
and qualified.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------ --- ----------------------------------------------------------------------------------
<S> <C> <C>
Douglas G. Voss......... 43 President, Chief Executive Officer and Director
Vernon A. Mickelson..... 71 Director
Gayle R. Voss........... 38 Director
Ivan L. Simpson......... 47 Director
</TABLE>
The following describes the business, the business experience and background
of the nominees, each of whom currently serves as a director of the Company.
DOUGLAS G. VOSS, age 43, co-founded the Company in 1979 and has served in
the positions of Chief Executive Officer and a director of the Company since the
Company's inception. Mr. Voss became a pilot in 1974 and holds both an Airline
Transport Pilot Certificate and an Airframe and Powerplant Mechanic Certificate.
Mr. Voss is a graduate of Colorado Aero Tech. In 1977 and 1978, Mr. Voss was
employed as a mechanic for a subsidiary of Executive Beechcraft, Inc. Mr. Voss
has also served the Company in a number of operational positions, including
Director of Maintenance and Director of Operations.
VERNON A. MICKELSON, age 71, became a director of the Company in December
1993. For more than the past six years, Mr. Mickelson has been self-employed as
a consultant and has provided services to the Company concerning matters
involving Federal Aviation Administration ("FAA") regulatory compliance and
maintenance quality control. Mr. Mickelson has worked in the aviation industry
since 1949, primarily in the field of aircraft maintenance. From 1973 to 1988,
Mr. Mickelson was employed by the FAA as a supervisor of FAA maintenance and
avionics inspectors operating in the State of Iowa.
GAYLE R. VOSS, age 38, has been a director of the Company since December
1996. Ms. Voss has held various positions with the Company since its inception
including assisting in the management of the Spirit Lake Airport from 1978
through 1992, Station Agent and Station Manager responsible for all airline
reservations from 1982 through 1985, Airline Accounts Receivable and Revenue
Accounting Manager from 1985 through 1989, Airline Executive Office Receptionist
from 1989 through 1996 and Director of Airport Services and Airport Manager from
June 1996 through the present.
IVAN L. SIMPSON, age 47, became a director of the Company in August 1997.
Mr. Simpson co-founded the Company in 1979, and served in various operational
roles through 1987, including: Chief Pilot, Director of Security, and most
recently, Vice President and Director of Operations. He has been employed
7
<PAGE>
as an Airline Transport Pilot for American Airlines since 1987. Mr. Simpson
holds an Airline Transport Pilot Certificate and is Type rated in the Boeing
757/767 aircraft.
THE BOARD AND COMMITTEES
In 1997 the Board held four meetings. Each of the incumbent directors
attended all of the meetings of the Board and each Committee of which he or she
was a member held during 1997.
On April 23, 1997 the Board ratified the members of its Audit Committee and
its Compensation Committees for 1997. The members of each committee during 1997
were Mr. Vernon A. Mickelson and Mr. Ivan L. Simpson.
The Audit Committee is empowered by the Board to review the financial books
and records of the Company in consultation with the Company's accounting and
auditing staff and its independent public accountants and to consider any
questions raised with respect to accounting and auditing policies and
procedures. During 1997, the Audit Committee did not hold any meetings.
The Compensation Committee is authorized by the Board to establish general
levels of compensation for all employees of the Company, to set the annual
salary of each of the executive officers of the Company, to grant options to
employees under the Company's option plans, and to review and approve
compensation and benefit plans of the Company. During 1997, the Compensation
Committee held one meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As stated above, Messrs. Mickelson and Simpson comprised the Compensation
Committee for purposes of setting compensation levels for 1997. No member of the
Compensation Committee was an officer, former officer or employee of the Company
or its subsidiary during the fiscal year ended December 31, 1997. No executive
officer of the Company served as a member of the Compensation Committee or board
of directors of another entity, one of whose executive officers served on the
Company's Compensation Committee or Board during the fiscal year ended December
31, 1997.
COMPENSATION OF DIRECTORS
Directors of the Company who are not employees of the Company participate in
the Company's Director Stock Option Plan, receive $1,000 for each meeting of the
Board or a meeting of a committee of the Board attended (not to exceed $1,000
per day) and are reimbursed for out-of-pocket expenses incurred on behalf of the
Company.
REQUIRED VOTE
Election as a director requires the affirmative vote of the holders of a
majority of the shares represented in person or by proxy and entitled to vote at
the Annual Meeting. The Board of Directors unanimously recommends that
shareholders vote FOR the election of the nominees listed above.
PROPOSAL NO. 2
RATIFICATION OF
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick LLP as independent
public accountants for the Company for the year ending December 31, 1998. A
proposal to ratify that appointment will be presented to Shareholders at the
Annual Meeting. If the Shareholders do not ratify the selection of KPMG Peat
Marwick LLP, another firm of independent public accounts will be selected by the
Board. Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting, will have an opportunity to make
8
<PAGE>
a statement if they desire to do so, and will be available to respond to
appropriate questions from Shareholders in attendance.
On October 17, 1997 Arthur Andersen LLP resigned as the Company's
independent accountant. Except for the qualification with respect to substantial
doubt about the Company's ability to continue as a going concern described in
the Company's consolidated financial statements as of and for the year ended
December 31, 1996, the reports of Arthur Andersen LLP on the financial
statements for the years ended December 31, 1995 and 1996, contained no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. The Company's Board of
Directors (including the members of the Audit Committee) participated in and
approved the decision to change independent accountants. In connection with its
audits for the years ended December 31, 1995, and 1996, and through October 17,
1997, there were no disagreements with Arthur Andersen LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements if not resolved to the satisfaction of
Arthur Andersen LLP would have caused them to make reference thereto in their
report on the financial statements for such years. During the years ended
December 31, 1995, and 1996, and through October 17, 1997, there were no
reportable events (as defined in Regulation S-K Item 304(a)(1)(v)).
Representatives of Arthur Andersen LLP are not expected to be present at the
Annual Meeting.
CERTAIN TRANSACTIONS
Douglas G. Voss is the owner of Iowa Great Lakes Flyers, Inc. ("Flyers"), a
corporation which owns and operates four-passenger and six-passenger aircraft
and Beech 1900 aircraft. From time to time, Flyers leases its four-passenger and
six-passenger aircraft to the Company for use in its charter and freight
operations. In December 1994, the Company and Flyers entered into Aircraft Lease
Agreements pursuant to which the Company is leasing from Flyers two Beech 1900
aircraft. These Aircraft Lease Agreements are on a month-to-month basis and had
lease payments of $27,000 per month per aircraft through July 1, 1995, and
thereafter have had lease payments of $33,000 per month per aircraft. These
Aircraft Lease Agreements provide that the Company perform all required
maintenance. In September 1997, Flyers sold one of the aircraft and subsequently
terminated the lease to the Company on that aircraft. The Company believes that
its leases of aircraft from Flyers are on terms no less favorable to the Company
than would be similar transactions with unaffiliated third parties. Under these
leases, the Company paid to Flyers a total of approximately (i) $129,213 for
charter operations, (ii) $656,902 for freight operations, and (iii) $31,700 for
automobile rental payments during the year ended December 31, 1997. As of April
30, 1998, the Company owed Flyers approximately $966,000. Mr. Voss is also the
owner of M&G Air travel, Inc.("M&G"), a corporation which owns a fleet of rental
cars. In December 1997, M&G purchased two Beech 1900C aircraft and the Company
became guarantor of the debt. In January 1998, the aircraft were leased to the
Company on a month-to-month basis and have lease payments of $22,000 per month
per aircraft. The Company subsequently subleased these aircraft to third parties
at the same lease rate.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Commission and provide the Company
with copies of such reports. Based solely on its review of the copies of such
forms received by it, or written representations from certain reporting persons,
the Company believes that, during the last fiscal year, its directors and
executive officers filed all reports on a timely basis except as follows: (a)
initial reports of ownership, and the grant of 10,000 options, on Form 3 was not
filed on a timely basis by Ivan L. Simpson through inadvertence, but was filed
late with the Securities and Exchange Commission; (b) securities ownership
reports on Form 4 were not filed on a timely basis by Vernon A. Mickelson
9
<PAGE>
through inadvertence, for the purchase of 2,000 shares in July and for a
purchase of 5,000 shares in December. The related Form 4s were filed late with
the Securities and Exchange Commission.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table provides information with respect to the Company's
executive officers. Each such person has been appointed to serve until his or
her successor is duly appointed by the Board or his or her earlier removal or
resignation from office.
<TABLE>
<CAPTION>
NAME AGE TITLE
- ----------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Douglas G. Voss........ 43 Chief Executive Officer, President and Chairman of the Board of
Directors
Richard H. Fontaine.... 57 Senior Vice President Marketing
Richard A. Hanson...... 39 Vice President, Controller
Jeffrey M. Davis....... 35 Vice President Operations
</TABLE>
DOUGLAS G. VOSS -- See "Election of Directors"
RICHARD H. FONTAINE. Mr. Fontaine rejoined Great Lakes in his present
position on September 25, 1995. He previously had held the positions at Great
Lakes of President and Chief Operating Officer from 1991 to 1994 and Executive
Vice president and Chief Operating Officer from 1988 to 1991. In the interim he
was employed by GP Express Airlines ("GP Express") as Executive Vice President
and President. Subsequent to Mr. Fontaine's departure, GP Express entered into
Chapter 11 proceedings under the federal bankruptcy laws. Previously he had been
at Alliance Airlines as Executive Vice President from 1986 to 1988, Simmons
Airlines as Senior Vice President of Planning in 1985 and 1986, Mississippi
Valley Airlines as Vice President from 1982 to 1985 and United Airlines in
various positions from 1967 to 1982.
RICHARD A. HANSON. Mr. Hanson rejoined Great Lakes in his present position
on June 1, 1997. He previously held the positions at Great Lakes of Senior Vice
President -- Finance from 1993 to 1994, and Controller from 1990 to 1993. In the
interim Premium Standard Farms employed him as Corporate Finance Manager.
Previously he had been at First Image Corporation as Regional Manager of Finance
and Administration from 1988 to 1990. Mr. Hanson is a Certified Public
Accountant.
JEFFREY M. DAVIS. Mr. Davis joined Great Lakes in March 1988 as a
commercial pilot. He has served in many positions within the Flight Operations
area of the Company, including Line Pilot, Instructor, Check-Airman, and
Director of Training. He was promoted to his current position in December 1994.
Mr. Davis is the holder of an Airline Transport Pilot Certificate and is
currently a Designated Pilot Examiner for the Federal Aviation Administration.
The officers of the Company are elected annually and serve at the discretion
of the Board of Directors.
VOTING OF PROXIES AND EXPENSES
The Board recommends that an affirmative vote be cast in favor of each of
the proposals listed in the Proxy.
The Board knows of no other matters that may be brought before the Annual
Meeting which require submission to a vote of the Company's shareholders. If any
other matters are properly brought before the Annual Meeting, however, the
person named in the enclosed Proxy or his substitutes will vote in accordance
with their best judgment on such matters.
10
<PAGE>
Expenses incurred in connection with the solicitation of proxies will be
paid by the Company. The Company has retained Norwest Shareowner Services to
assist in the solicitation of proxies, at an estimated cost of $3,100 plus
reimbursement of out-of-pocket expenses. The proxies are being solicited
principally by mail. In addition, directors, officers and regular employees of
the Company may solicit proxies personally or by telephone, for which they will
receive no consideration other than their regular compensation. The Company will
also request brokerage houses, nominees, custodians and fiduciaries to forward
soliciting material to the beneficial owners of shares of Common Stock and will
reimburse such persons for their expenses so incurred.
SHAREHOLDER PROPOSALS
Shareholders wishing to present proposals for action by the Company's
shareholders at the next Annual Meeting of Shareholders must present such
proposals at the principal offices of the Company not later than January 13,
1999. Due to the complexity of the respective rights of the shareholders and the
Company in this area, any shareholder desiring to propose such an action is
advised to consult with his or her legal counsel with respect to such rights. It
is suggested that any such proposals be submitted by certified mail, return
receipt requested.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended December 31, 1997, accompanies this Notice of Annual Meeting, Proxy
Statement and related Proxy Card. No part of the Annual Report to Shareholders
is incorporated herein and no part thereof is to be considered proxy soliciting
material.
FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS
AND THE FINANCIAL STATEMENT SCHEDULES THERETO. THE COMPANY WILL FURNISH TO ANY
SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING THE FORM 10-K, UPON
THE PAYMENT, IN ADVANCE, OF FEES BASED ON THE COMPANY'S REASONABLE EXPENSES IN
FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH REPORT AND/OR EXHIBIT(S)
SHOULD BE DIRECTED TO MR. RICH HANSON AT THE COMPANY'S PRINCIPAL ADDRESS.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Douglas G. Voss
--------------------------------------
Douglas G. Voss
CHAIRMAN OF THE BOARD, PRESIDENT, AND
CHIEF EXECUTIVE OFFICER
Spencer, Iowa
May 18, 1998
11
<PAGE>
GREAT LAKES AVIATION, LTD
1708 38TH AVENUE WEST
SPENCER, IOWA 51301-9211
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and the Proxy Statement, dated May 18, 1998, hereby appoints
Douglas G. Voss as proxy, with full power of substitution, to represent the
undersigned and to vote, as designated below, all shares of Common Stock of
Great Lakes Aviation, Ltd. (the "Company") held of record by the undersigned on
May 12, 1998, at the Annual Meeting of Shareholders to be held at The Inn Resort
Complex, 3301 Lakeshore Drive, Okoboji, Iowa, 51355, on Friday, June 12, 1998,
at 10:00 a.m., local time, and any adjournment thereof.
1. To elect four directors of the Company, each for a term of one year and
until his or her successor shall be elected and duly qualified.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE (TO VOTE FOR ALL NOMINEES LISTED
CONTRARY BELOW) BELOW)
DOUGLAS G. VOSS, VERNON A. MICKELSON, GAYLE R. VOSS, IVAN L. SIMPSON
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
- --------------------------------------------------------------------------------
2. To ratify and approve the appointment of KPMG Peat Marwick LLP as the
Company's independent public accountants for the fiscal year ending December
31, 1998.
3. In his discretion, the proxy is authorized to vote upon such other business
as may properly come before the Annual Meeting or any adjournment thereof.
(CONTINUED ON REVERSE SIDE)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED ON
THE PROXY BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2. ABSTENTIONS WILL BE COUNTED TOWARD THE
EXISTENCE OF A QUORUM.
Please sign exactly as name appears on this Proxy. When shares are held by
joint tenants, both should sign. If signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.
----------------------------------
(Signature)
----------------------------------
(Signature)
Dated: ___________________________
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
