<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------
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. _____)
[X] Filed by the Registrant
[ ] Filed by a party other than the Registrant
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11C or Rule 14a-12
AIRPORT SYSTEMS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Steven F. Carman, Attorney for the Registrant
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(I)(1), or
14a-6(I)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(I)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and
0-11.
(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 0-11:1
_______________________________________________________________________
- ------------------------------
Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________
[ ] 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 number.
_______________________________________________________________________
(3) Filing party:
_______________________________________________________________________
(4) Date filed:
_______________________________________________________________________
<PAGE> 3
AIRPORT SYSTEMS INTERNATIONAL, INC.
11300 WEST 89TH STREET
OVERLAND PARK, KANSAS 66214
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 16, 1997
Notice is hereby given that the Annual Meeting of the Stockholders of
Airport Systems International, Inc. (the "Company"), will be held at The
Doubletree Hotel at Corporate Woods, 10100 College Boulevard, Overland Park,
Kansas on Tuesday, September 16, 1997, commencing at 2:00 p.m. Kansas City time,
to consider and act upon the following matters and such other business as may
properly come before the meeting or any adjournment thereof:
1. The election of two (2) Class I directors to serve
for a term of three years expiring in 2000; and
2. The ratification of the Board of Directors'
appointment of Ernst & Young as independent public
accountants.
Holders of record of the outstanding Common Stock of the Company at the
close of business on July 25, 1997, are entitled to vote at the meeting or any
adjournment thereof.
By Order of the Board of Directors,
THOMAS C. CARGIN
Secretary
Overland Park, Kansas
August 2, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES. YOUR SHARES CANNOT BE
VOTED UNLESS YOU SIGN AND RETURN A PROXY OR VOTE BY BALLOT AT THE MEETING.
<PAGE> 4
AIRPORT SYSTEMS INTERNATIONAL, INC.
11300 WEST 89TH STREET
OVERLAND PARK, KANSAS 66214
PROXY STATEMENT
GENERAL INFORMATION
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy is being solicited on behalf of the Board of
Directors of Airport Systems International, Inc. (the "Company") for use at the
Annual Meeting of the Stockholders to be held on September 16, 1997 (the
"Meeting"), or at any adjournment thereof. Any proxy given does not affect the
right to vote in person at the Meeting and may be revoked at any time before it
is exercised by notifying Thomas C. Cargin, Secretary, by mail, telegram or
facsimile, or by appearing at the Meeting in person and casting a ballot. This
Proxy Statement and the proxy were first mailed to stockholders on or about
August 2, 1997.
All expenses of solicitation will be borne by the Company. In addition
to solicitations by mail, regular employees and Directors of the Company may
solicit proxies in person or by telephone. The Company does not expect to pay
any compensation for the solicitation of proxies.
VOTING PROCEDURES
Shares represented by a properly signed proxy received pursuant to this
solicitation will be voted in accordance with instructions thereon. If the proxy
is properly signed and returned and no instructions are given on the proxy with
respect to the matters to be acted upon, the shares represented by the proxy
will be voted at the Meeting for the election, as directors of the Company, of
the nominees hereinafter named and for the ratification of the appointment of
Ernst & Young as independent public accountants of the Company. If any of the
nominees should unexpectedly become unavailable for election for any reason, the
shares represented by the proxy will be voted for such substituted nominee or
nominees as the Board of Directors may name. Each of the nominees hereinafter
named has indicated his willingness to serve if elected, and it is not
anticipated that either of them will become unavailable for election.
The proxy confers discretionary authority, with respect to the voting
of the shares represented thereby, on any other business that may properly come
before the Meeting. The Board of Directors is not aware that any such other
business, other than as set forth in this Proxy Statement and except for matters
incident to the conduct of the Meeting, is to be presented for action at the
Meeting and does not itself intend to present any such other business; however,
if any such other business does come before the Meeting, shares represented by
proxies properly signed and returned pursuant to this solicitation will be voted
as directed by the Board of Directors.
The two nominees for Director receiving the greatest number of votes at
the Meeting will be elected as Directors. Any shares not voted (whether by
abstention, broker non-vote, or otherwise) have no impact in the election of
directors except to the extent the failure to vote for an individual results in
another individual receiving a larger proportion of the total votes. The
ratification of the appointment of independent public accountants requires the
affirmative vote of a majority of shares present in person or represented by
proxy, and entitled to vote on the matter. For purposes of determining the
outcome of the vote on this matter, an instruction to "abstain" from voting on a
proposal will be treated as shares present and entitled to vote, and will have
the same effect as a vote against a proposal. "Broker non-votes," which occur
when brokers are prohibited from exercising discretionary voting authority for
beneficial owners who have not provided voting instructions, are not counted for
the purpose of determining the number of shares
1
<PAGE> 5
present in person or represented by proxy on a voting matter and will have no
effect on the outcome of the vote on the ratification of appointment of
accountants.
Only holders of Common Stock of the Company of record as of the close
of business on July 25, 1997, are entitled to vote at the Meeting. At the close
of business on that date, 2,230,500 shares of Common Stock were outstanding.
Holders of Common Stock are entitled to one (1) vote per share standing in their
names on the record date. Shares cannot be voted at the Meeting unless the owner
is present in person or represented by proxy.
2
<PAGE> 6
SECURITY OWNERSHIP
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of shares of the Company's Common Stock at May 16, 1997, by
(i) the stockholders known by the Company to own beneficially more than 5% of
the Common Stock, (ii) each director of the Company who owns beneficially any
Common Stock, (iii) each executive officer named in the "Summary Compensation
Table," and (iv) all directors and executive officers of the Company as a group.
Unless otherwise indicated, the Company believes that each stockholder listed
below has sole voting and investment power with respect to the Common Stock
indicated as beneficially owned by them.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name and Address Beneficially Owned(1) Class
- ---------------- --------------------- ----------
<S> <C> <C>
Gilder, Gagnon, Howe & Co. ...................................852,045(2) 38.2
1775 Broadway
New York, NY 10019
FMR Corporation...............................................223,100(3) 10.0
82 Devonshire Street
Boston, MA 02109-3614
Keith S. Cowan................................................141,643(4) 6.0
Airport Systems International, Inc.
11300 West 89th Street
Overland Park, KS 66214
Thomas C. Blackburn...........................................107,865(5) 4.8
Kansas Venture Capital, Inc.
6700 Antioch, Suite 460
Overland Park, KS 66204
Robert D. Taylor...............................................39,300 1.8
Taylor Financial
1313 North Webb Rd., Suite 260
Wichita, KS 67206
Thomas C. Cargin...............................................46,645(6) 2.1
Airport Systems International, Inc.
11300 West 89th Street
Overland Park, KS 66214
Michael M. Warner..............................................25,000(7) 1.1
Airport Systems International, Inc.
11300 West 89th Street
Overland Park, KS 66214
John R. Wharton................................................42,995(8) 1.9
Airport Systems International, Inc.
11300 West 89th Street
Overland Park, KS 66214
John C. Roos...................................................43,393(9) 1.9
Airport Systems International, Inc.
11300 West 89th Street
Overland Park, KS 66214
All directors and executive officers as a.....................461,841(11) 18.5
group (8 persons)
</TABLE>
- ------------------------
* Less than one percent.
3
<PAGE> 7
(1) Pursuant to the rules of the Securities and Exchange Commission
("SEC"), shares of Common Stock of the Company which an individual or a
group has a right to acquire within 60 days pursuant to the exercise of
options or warrants are deemed to be outstanding for the purpose of
computing the percentage of ownership of such individual or group, but
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table.
(2) According to a letter to the Company dated July 22, 1997, Gilder,
Gagnon, Howe & Co., a broker-dealer registered under Section 15 of the
Securities Exchange Act of 1934, reported beneficial ownership as to
852,045 shares of Common Stock of the Company held as of December 31,
1996. The aforesaid letter also reported that as of December 31, 1996,
619,870 of such shares were held in customer accounts over which one or
another of its partners or employees may have discretion to purchase or
dispose of such securities, but over which Gilder, Gagnon, Howe & Co.
does not have discretion, 223,150 of such shares were held in accounts
owned by its partners and by its partners' families in accounts
controlled by partners, 5,650 of such shares were held in the account
of its firm profit sharing plan which is controlled by certain of its
partners, and 3,375 of such shares were held in the name of various
employees of Gilder, Gagnon, Howe & Co. Gilder, Gagnon, Howe & Co.
disclaims beneficial ownership as to all such shares.
(3) According to Schedule 13G sent to the Company, FMR Corporation, in its
capacity as an investment advisor, reported beneficial ownership as to
223,100 shares of Common Stock of the Company held as of December 31,
1996, and reported that it had shared voting power with respect to
223,100 of such shares and shared dispositive power over 223,100 of
such shares.
(4) Includes presently exercisable options to purchase 127,750 shares of
Common Stock of the Company.
(5) These shares of Common Stock of the Company are owned by Kansas Venture
Capital, Inc., of which Mr. Blackburn is the Vice President and as such
may be deemed to be a beneficial owner of these shares. Mr. Blackburn
disclaims such beneficial ownership.
(6) Includes presently exercisable options to purchase 31,500 shares of
Common Stock of the Company.
(7) Includes presently exercisable options to purchase 25,000 shares of
Common Stock of the Company.
(8) Includes presently exercisable options to purchase 31,500 shares of
Common Stock of the Company.
(9) Includes presently exercisable options to purchase 31,500 shares of
Common Stock of the Company.
(10) Includes presently exercisable options to purchase 262,250 shares of
Common Stock of the Company held by executive officers and directors as
a group.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To the Company's knowledge, based solely on review of copies of reports
filed with the Securities and Exchange Commission and written representations
that no other reports were required during 1996, all Section 16(a) filing
requirements applicable to the officers, directors and beneficial owners of more
than 10 percent of the Company's equity securities were compiled with on a
timely basis.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Stockholder proposals to be considered for inclusion in the Proxy
Statement and considered at the 1998 Annual Meeting of Stockholders must be
received by the Company no later than April 10, 1998. Any such proposals should
be directed to the Secretary of the Company at 11300 West 89th Street, Overland
Park, Kansas 66214.
4
<PAGE> 8
I. ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes,
with the term of office of each class ending in successive years. The terms of
the Directors of Class I expire with this Meeting. Each of the two nominees for
Class I, if elected, will serve three years until the 2000 Annual Meeting of
Stockholders and until a successor has been elected and qualified. The current
Directors of Classes II and III will continue in office until the 1998 and 1999
Annual Meetings, respectively.
NOMINEES FOR DIRECTORS
The following information is given with respect to the nominees for
election.
Class I - Nominees to Serve Three Years Until 2000 Annual Meeting
THOMAS C. BLACKBURN, age 37, has served as a Director of the Company since its
organization in May 1991, and served as its Secretary until March 1993. Mr.
Blackburn has served as a Vice President of Kansas Venture Capital, Inc.
("KVCI"), a licensed small business investment company, since November 1988.
KVCI is a private SBIC organized to finance growth-oriented Kansas businesses.
Mr. Blackburn has over thirteen years experience in the investment industry in a
variety of capacities. He is a member of the Company's Stock Option Committee.
THOMAS C. CARGIN, age 42, has served as Vice President - Finance and
Administration of the Company since December 1991, as its Secretary since March
1993, and as a Director of the Company since October 1993. Prior to joining the
Company, Mr. Cargin was a partner in the accounting firm of Ifft & Barber since
1989 and prior to that was an employee of DYMON, Inc., a specialty chemical
manufacturer located in Kansas City, Kansas, since 1983, last serving as Vice
President of Finance and Chief Financial Officer. Mr. Cargin is a Certified
Public Accountant with over nineteen years of public accounting and private
industry accounting experience. He is also a licensed pilot holding an
instrument rating.
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
The following information is given with respect to the Directors of
Classes II and III, who will continue to serve as Directors of the Company until
the 1998 and 1999 Annual Meetings of Stockholders, respectively.
Class II - Serving until 1998 Annual Meeting
MICHAEL J. MEYER, age 41, has served as a Director of the Company since its
organization in May 1991, as its Chairman until March 7, 1995, and as its
President through September 1991. Mr. Meyer is Co-Manager of Holden Capital
Advisors, LLC, a private equity merchant banking firm engaged in financing
growth-oriented private companies and acquisitions, which he co-founded in
August 1996. Prior to that he was a Senior Vice President with George K. Baum &
Company, an investment banking firm from February, 1995. For more than five
years prior to that, Mr. Meyer was a Principal in the general partner of Allsop
Venture Partners III L.P., a private equity fund. Mr. Meyer is also Chairman of
the Board and a member of the Executive Committee of Kansas Venture Capital,
Inc. He has over 15 years of experience in financing and managing growth
companies and is a Certified Public Accountant. Mr. Meyer is a member of the
Company's Audit Committee.
WALTER H. STOWELL, JR., age 60, has served as Chairman of the Board since March
7, 1995 and a Director of the Company since May 18, 1994. Mr. Stowell retired
from Raytheon Company on April 1, 1994, after being an employee of Raytheon
since 1960 in a variety of positions, last serving as a Senior Vice President
and General Manager of the Equipment Division. Raytheon Company is a
diversified, multi-industry, technology-based company, whose equipment division
develops and builds military and commercial radars, air traffic control systems,
satellite terminals, communications equipment, computers and missile fire
control systems. He is a member of the Company's Compensation and Stock Option
Committees.
5
<PAGE> 9
Class III - Serving Until 1999 Annual Meeting
KEITH S. COWAN, age 43, has served as President and a Director of the Company
since September 1991, and as Chief Executive Officer of the Company since August
1993. Prior to joining the Company, Mr. Cowan was an employee of the Teledyne
Controls Division of Teledyne, Inc. for more than five years, last serving as
Vice President, Airport and Instrumentation Products. Mr. Cowan has over
twenty-three years of system engineering, project management, and corporate
experience in the development, manufacturing, and sale of electronic systems.
ROBERT D. TAYLOR, age 50, has served as a Director of the Company since
September 1994. Mr. Taylor is President of Taylor Financial, a consulting and
investment firm and Chairman of Westchester Health Systems Group, an operator of
assisted living facilities. Mr. Taylor also serves as a Director on the Boards
of Commercial Federal Bank of Omaha, Nebraska, and Sirloin Stockade
International, Inc. From 1991 to 1995, Mr. Taylor was Chairman and Chief
Executive Officer of Railroad Financial Corporation. Mr. Taylor also serves as a
Director of the Business School Advisory Board at the University of Kansas and
is a Trustee of the Sedgwick County Zoo in Wichita, Kansas. Mr. Taylor serves on
the Company's Compensation and Audit Committees.
COMMITTEES AND DIRECTOR MEETINGS
The Board of Directors has established an Audit Committee, a
Compensation Committee, and a Stock Option Committee. The entire Board of
Directors acts as the nominating committee responsible for selecting candidates
for election as Directors. Stockholders wishing to submit the name of a
candidate for the Board of Directors should submit the recommendation, along
with biographical information, to the Secretary of the Company. The Audit
Committee's responsibilities include recommending to the Board of Directors the
public accounting firm to be engaged to audit the Company and reviewing with the
independent accountants the plan for, and results of, the auditing engagement
and the Company's internal accounting controls. The Audit Committee, which held
two formal meetings, is comprised of a majority of outside directors and its
current members consist of Messrs. Taylor and Meyer. The Compensation Committee,
which met once during the last fiscal year, is comprised of Messrs. Taylor and
Stowell, and has been given the responsibility of setting and administering the
policies which govern the annual compensation of the Company's executive
officers, as well as the Company's benefit plans other than the Stock Option
Plan. The Company's Stock Option Plan is administered by a committee of two
independent directors who may not receive options under the Stock Option Plan.
Messrs. Stowell and Blackburn currently comprise the Stock Option Committee,
which held one meeting during the last fiscal year.
The Board of Directors held 6 special and regularly scheduled meetings
during the fiscal year ended April 30, 1997. During such fiscal year, each
director attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings held by all
Committees of the Board of Directors on which the Director served during the
last fiscal year.
DIRECTOR COMPENSATION
Each Director who is not a salaried employee of the Company is paid a
fee of $3,000 for each regularly scheduled Board meeting attended up to a
maximum of $12,000 per year, plus $500 for each meeting of a committee of the
Board attended. Effective March 1, 1997, the Board approved the payment of
$1,000 for each special board meeting attended. No Director who is an employee
of the Company will receive compensation for services rendered as a Director.
EXECUTIVE COMPENSATION
The following table sets forth information concerning cash and non-cash
compensation paid to or accrued for the benefit of each of the Company's Chief
Executive Officer and certain other executive officers of the Company
6
<PAGE> 10
("Named Executive Officers") for all services rendered in all capacities to the
Company for the fiscal periods ended April 30, 1997, 1996 and 1995. No other
current executive officer of the Company received compensation in excess of
$100,000 for the last fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
Shares
Annual Compensation Underlying
Name and ---------------------------------------- Options All Other
Principal Position Year Salary Bonus Other (#) Compensation(1)
- ------------------ ---- ------ ----- ----- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Keith S. Cowan 1997 $155,000 $ 57,000 $ 1,900(2) $ --- $1,538
President and CEO 1996 139,000 --- 831 --- 1,390
1995 139,000 --- 809 --- 1,390
Thomas C. Cargin 1997 $100,000 $27,000 $ --- $ --- $1,031
Vice President - Administration, 1996 95,000 --- --- --- 520
Secretary 1995 95,000 --- --- --- 658
Michael M. Warner 1997 $118,800 $ --- $20,000(3) $ --- $1,181
Vice President- 1996 110,000 --- --- --- 254
Business Development 1995 25,385 --- --- 35,000 ---
John R. Wharton 1997 $ 96,234 $25,557 $ --- $ --- $ 962
Vice President-Sales 1996 93,131 15,557 --- --- 931
1995 92,500 --- --- --- 676
John C. Roos 1997 $103,692 $24,000 $ --- $ --- $1,035
Vice President - Engineering 1996 100,000 --- --- --- 532
1995 100,228 --- --- --- 308
</TABLE>
- -------------------------
(1) Consists of Company matching contributions made on behalf of Named
Executive Officers under the Company's 401(k) Savings Plan.
(2) Consists of monthly dues paid on a Company-owned membership at a golf
and country club of which Mr. Cowan presently is the Company's
designated member.
(3) Consists of consideration paid to Mr. Warner for his efforts in
securing orders for the Company in 1997 and execution of a Covenant Not
To Compete Agreement.
7
<PAGE> 11
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth, for each of the Named Executive
Officers in the Summary Compensation Table above, the fiscal year-end number and
value of unexercised options. No options were exercised by the Named Executive
Officers during the fiscal year ended April 30, 1997.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at April 30, 1997 at April 30, 1997(1)
--------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Keith S. Cowan....................................... 127,750 --- $671,613 $ ---
Thomas C. Cargin..................................... 31,500 --- 140,514 ---
Michael M. Warner.................................... 25,000 10,000 9,375 3,750
John R. Wharton...................................... 31,500 --- 140,514 ---
John C. Roos......................................... 31,500 --- 140,514 ---
</TABLE>
(1) The value of unexercised in-the-money options is the difference between
the exercise price of the options and the fair market value of the
Company's Common Stock at April 30, 1996 ($6.375 per share).
EMPLOYMENT ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company entered into a written employment agreement effective June
22, 1993, with Keith S. Cowan. The agreement provides for Mr. Cowan to be
employed by the Company for a minimum period of three years following its
effective date. The Company recently extended the minimum employment period in
Mr. Cowan's employment agreement to November 30, 1998. All other on the same
terms and conditions remained the same.
As compensation for services rendered to the Company, the agreement
provides for Mr. Cowan to receive (i) a base annual salary of $165,850 which may
be adjusted above such base amount from time to time by action of the Board of
Directors, and (ii) a performance-based bonus, the amount of which is determined
by reference to such criteria as may be established by the Board of Directors.
The Company also entered into a substantially similar written
employment agreement effective October 11, 1993, with Thomas C. Cargin. The
agreement provides for Mr. Cargin to be employed by the Company for a minimum
period of three years following its effective date. The Company recently
extended the minimum employment period in Mr. Cargin's employment agreement to
November 30, 1998. All other terms and conditions remained the same.
As compensation for services rendered to the Company, the agreement
provides for Mr. Cargin to receive (i) a base salary of $105,000 which may be
adjusted above such base amount from time to time by action of the Board of
Directors, and (ii) a performance-based bonus, the amount of which is determined
by reference to such criteria as may be established by the Board of Directors.
Each of Mr. Cowan's and Mr. Cargin's employment may be terminated by
the Company for cause (as defined in the agreements) or without cause. If Mr.
Cowan's or Mr. Cargin's employment is terminated for cause or if either resigns,
any unearned salary and bonus rights will cease on the date of such termination
or resignation. If the Company terminates Mr. Cowan or Mr. Cargin without cause,
all compensation payments will continue through the remainder of the agreement
term of the relevant agreement, or 12 months, whichever is greater. Pursuant to
the agreements, Mr. Cowan and Mr. Cargin have agreed to refrain from (i)
disclosing the Company's confidential information and (ii) for a one-year period
following termination of employment engaging, directly or indirectly, in any
ground-based navigation aids business which competes with the Company.
8
<PAGE> 12
On March 20, 1997, the Company entered into an agreement (the
"Agreement") with Michael W. Warner. In consideration of Mr. Warner's efforts to
procure a significant contract and Mr. Warner's covenant not to compete against
the Company for a period of two years after his resignation or termination, the
Company paid Mr. Warner a cash payment of $20,000 and extended a loan of $80,000
to Mr. Warner in the form of a promissory note (the "Promissory Note"). The
Promissory Note is to be paid in full on or before March 20, 2001 and carries
interest at an annual percentage rate of 6.375%. In exchange for Mr. Warner's
continued employment, the Company agreed to forgive the Promissory Note in
equivalent one-fourth amounts over each of the next four years ($20,000 per
year). As set forth in the Promissory Note and the Agreement, the Company also
agreed to forgive the Promissory Note entirely in the event of Mr. Warner's
death or if Mr. Warner is terminated without cause following a change in control
of the Company.
II. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed Ernst & Young as
independent public accountants to audit and certify the Company's financial
statements for the fiscal year ending April 30, 1998, subject to ratification
and approval by the stockholders at the Meeting.
Ernst & Young has examined the financial statements of the Company
since its organization in 1991. Representatives of Ernst & Young are expected to
be present at the Meeting, will be given the opportunity to make a statement if
they desire to do so, and are expected to be available to respond to appropriate
questions. The affirmative vote of a majority of the shares present and entitled
to vote at the Meeting is required for the approval of this proposal to ratify
the appointment. If the stockholders do not ratify the appointment of Ernst &
Young, the selection of independent public accountants will be reconsidered by
the Board of Directors.
The Board of Directors recommends that the stockholders vote FOR the
approval of the appointment.
By Order of the Board of Directors,
THOMAS C. CARGIN
Secretary
9
<PAGE> 13
Appendix A
PROXY AIRPORT SYSTEMS INTERNATIONAL, INC.
11300 WEST 89TH STREET, OVERLAND PARK, KS 66214
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS ON SEPTEMBER 16, 1997
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
The undersigned hereby appoints Keith S. Cowan and Thomas C. Cargin, and each
of them, or their designees, each with full power of substitution, as lawful
proxies to represent and vote all of the shares of Common Stock which the
undersigned is entitled to vote at the annual meeting of the stockholders of
the Company to be held on Tuesday, September 16, 1997, commencing at 2:00 p.m.
Kansas City time on that day, and at any adjournment or adjournments thereof,
as fully and with the same effect as the undersigned might or could do if
personally present, with respect to the following matters and, in their
discretion upon any other matters which may properly come before the meeting:
1. Election of two(2) Class I directors to serve for a term of three years
ending in 2000. The nominees are: Thomas C. Blackburn and Thomas C. Cargin.
<TABLE>
<S> <C> <C>
[ ] FOR all nominees listed. [ ] WITHHOLD AUTHORITY to vote for all nominees listed. [ ] FOR all nominees EXCEPT nominee
written in space below.
</TABLE>
---------------------------------------
2. Ratification of the appointment of Ernst & Young as independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued, and to be signed on reverse side)
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2.
Either of said proxies present and acting at said meeting or any adjournment
or adjournments thereof shall have and may exercise all of the powers of all of
said proxies. The undersigned hereby ratifies and confirms all that said
proxies, or either of them or their substitutes, may lawfully do or cause to be
done by virtue hereof, and acknowledges receipt of the notice of said meeting
and the Proxy Statement accompanying it.
Dated ______________________________, 1997
__________________________________________
__________________________________________
Please insert date of signing. Sign exactly
as name appears at left. If signing as
attorney, administrator, executor, trustee,
or guardian, give full title as such.
