<PAGE>
<PAGE>
Section 240.14a-101 Schedule 14A.
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
KELLSTROM INDUSTRIES, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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>
<PAGE>
KELLSTROM INDUSTRIES, INC.
14000 N.W. 4TH STREET
SUNRISE, FLORIDA 33325
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held on August 28, 1997 at 10:00 A.M., local time, at the
executive offices of the Company, located at 14000 N.W. 4th Street, Sunrise,
Florida 33325.
The formal Notice of Meeting and the accompanying Proxy Statement set forth
proposals for your consideration this year. You are being asked to elect two
directors and to ratify the reappointment of KPMG Peat Marwick LLP as the
independent certified public accountants of the Company.
At the meeting, the Board of Directors will also report on the affairs of
the Company, and a discussion period will be provided for questions and comments
of general interest to stockholders.
We look forward to greeting personally those of you who are able to be
present at the meeting. However, whether or not you are able to be with us at
the meeting, it is important that your shares be represented. Accordingly, you
are requested to sign, date and mail, at your earliest convenience, the enclosed
proxy in the envelope provided for your use.
Thank you for your cooperation.
Very truly yours,
/s/ ZIVI R. NEDIVI
ZIVI R. NEDIVI
Chief Executive Officer and President
July 28, 1997
<PAGE>
<PAGE>
KELLSTROM INDUSTRIES, INC.
14000 N.W. 4TH STREET
SUNRISE, FLORIDA 33325
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
AUGUST 28, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of KELLSTROM
INDUSTRIES, INC. (the 'Company') will be held on August 28, 1997 at 10:00 A.M.,
local time, at the executive offices of the Company, located at 14000 N.W. 4th
Street, Sunrise, Florida 33325 for the following purposes:
(1) To elect two directors to serve for the two ensuing years.
(2) To consider and act upon a proposal to ratify the reappointment of
KPMG Peat Marwick LLP as the Company's independent certified public
accountants for the fiscal year ending December 31, 1997.
(3) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on July 11, 1997 will
be entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. HOWEVER, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON,
EACH STOCKHOLDER IS URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY
AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. No postage is required if the
proxy is mailed in the United States. Stockholders who attend the Annual Meeting
may revoke their proxy and vote their shares in person.
By order of the Board of Directors,
/s/ ANTHONY MOTISI
ANTHONY MOTISI
Secretary
July 28, 1997
<PAGE>
<PAGE>
KELLSTROM INDUSTRIES, INC.
14000 N.W. 4TH STREET
SUNRISE, FLORIDA 33325
---------------------------------------
PROXY STATEMENT
---------------------------------------
GENERAL INFORMATION
GENERAL
This Proxy Statement (first mailed to stockholders on or about July 28,
1997) is furnished to the holders of Common Stock, par value $.001 per share
(the 'Common Stock'), of Kellstrom Industries, Inc. (the 'Company') in
connection with the solicitation by the Board of Directors of the Company of
proxies for use at the Annual Meeting of Stockholders (the 'Annual Meeting'), or
at any adjournment thereof, pursuant to the accompanying Notice of Annual
Meeting of Stockholders. The Annual Meeting will be held on August 28, 1997, at
10:00 A.M., local time, at the executive offices of the Company at 14000 N.W.
4th Street, Sunrise, Florida 33325.
It is proposed that at the Annual Meeting: (i) two directors will be
elected, and (ii) the reappointment of KPMG Peat Marwick LLP as the independent
certified public accountants of the Company for the fiscal year ending December
31, 1997 will be ratified.
Management currently is not aware of any other matters which will come
before the Annual Meeting. If any other matters properly come before the Annual
Meeting, the persons designated as proxies intend to vote in accordance with
their best judgment on such matters.
Proxies for use at the Annual Meeting are being solicited by the Board of
Directors of the Company. Proxies will be solicited chiefly by mail; however,
certain officers, directors, employees and agents of the Company, none of whom
will receive additional compensation therefor, may solicit proxies by telephone,
telegram or other personal contact. The Company will bear the cost of the
solicitation of the proxies, including postage, printing and handling, and will
reimburse the reasonable expenses of brokerage firms and others for forwarding
material to beneficial owners of shares of Common Stock.
REVOCABILITY AND VOTING OF PROXY
A form of proxy for use at the Annual Meeting and a return envelope for the
proxy are enclosed. Unless otherwise indicated on the form of proxy, shares of
Common Stock represented by any proxy in the enclosed form, assuming the proxy
is properly executed and received by the Company prior to the Annual Meeting,
will be voted with respect to the following items on the agenda: (i) the
election of each of the nominees for director as shown on the form of proxy, and
(ii) the reappointment of KPMG Peat Marwick LLP as the independent certified
public accountants of the Company.
Stockholders may revoke the authority granted by their execution of a proxy
at any time prior to the effective exercise of the powers conferred by that
proxy, by filing with the Secretary of the Company a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person
at the meeting. Shares of Common Stock represented by executed and unrevoked
proxies will be voted in accordance with the instructions specified in such
proxies. If no specifications are given, the proxies intend to vote the shares
represented thereby 'for' the election of each of the nominees for director as
shown on the form of proxy, 'for' the ratification of the reappointment of KPMG
Peat Marwick LLP as the independent certified public accountants of the Company,
and in accordance with their best judgment on any other matters which may
properly come before the meeting.
RECORD DATE AND VOTING RIGHTS
On July 11, 1997, there were 7,852,081 shares of Common Stock outstanding,
each of which is entitled to one vote upon each of the matters to be presented
at the Annual Meeting. Only stockholders
<PAGE>
<PAGE>
of record at the close of business on July 11, 1997 are entitled to notice of
and to vote at the Annual Meeting or any adjournment thereof. The holders of a
majority of the outstanding shares of Common Stock, present in person or by
proxy and entitled to vote, will constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum, but will not be counted with respect to the
specific matter being voted upon. 'Broker non-votes' are shares held by brokers
or nominees which are present in person or represented by proxy, but which are
not voted on a particular matter because instructions have not been received
from the beneficial owner.
The affirmative vote of the holders of a plurality of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is required for the election of directors. The affirmative vote
of the holders of a majority of the shares of Common Stock present in person or
represented by proxy and entitled to vote at the Annual Meeting is required for
the ratification of the reappointment of KPMG Peat Marwick LLP.
BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of July 11, 1997
regarding the beneficial ownership of the Company's Common Stock by (i) each
stockholder known to the Company to beneficially own more than five percent (5%)
of such Common Stock, (ii) each director and certain executive officers and
(iii) all directors and officers as a group:
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF BENEFICIALLY
PRINCIPAL STOCKHOLDERS SHARES OWNED(%)
- ---------------------------------------------------------------------------------------- --------- ------------
<S> <C> <C>
Yoav Stern(1)........................................................................... 186,250 2.37
Zivi R. Nedivi(1)(2).................................................................... 217,651 2.77
David Jan Mitchell...................................................................... 75,137 .96
Thomas McMillen......................................................................... 3,600 .05
John S. Gleason(3)...................................................................... 34,500 .44
Paul F. Steele.......................................................................... 6,600 .08
Anthony Motisi(4)....................................................................... 7,500 .10
Michael W. Wallace...................................................................... 1,900 .02
Estate of Joram D. Rosenfeld(1)(5) ..................................................... 107,500 1.37
c/o Exodus
360 East 88th Street, #41B
New York, NY 10128
Delaware Management Company, Inc.(6) ................................................... 413,900 5.27
2005 Market Street
Philadelphia, PA 19103
Jeffrey Schwarz(7) ..................................................................... 435,858 5.55
660 Madison Avenue
20th Floor
New York, NY 10021
Karen Finerman(7) ...................................................................... 435,858 5.55
660 Madison Avenue
20th Floor
New York, NY 10021
All officers and directors as a group (10 persons)(8)................................... 529,538 6.74
</TABLE>
- ------------
(1) Each of Messrs. Yoav Stern ('Stern') and Zivi R. Nedivi ('Nedivi') and the
Estate of Joram D. Rosenfeld may be deemed to be a member of a group for the
purposes of Section 13(d) under the Securities Exchange Act of 1934, as
amended, by virtue of a stockholders' agreement entered into by Messrs.
Stern, Nedivi and Joram D. Rosenfeld on August 24, 1995, as amended. Each
party thereto agreed not to sell, encumber or otherwise dispose of the stock
of the Company beneficially owned by him except in accordance with the terms
of said agreement. As members of a group, each
(footnotes continued on next page)
2
<PAGE>
<PAGE>
(footnotes continued from previous page)
may be deemed to share the voting power with respect to the shares owned by
all three, or 511,401 shares, which represents 6.82% of the shares
outstanding. In addition, Messrs. Nedivi and Stern have agreed in principle,
to contribute 181,818 shares and 156,250 shares of Common Stock of the
Company, respectively, to Helix Capital II, L.L.C., a merchant banking firm
(together with related companies, 'Helix'), in which Nedivi and Stern have
controlling interests.
(2) Includes 16,333 shares issuable upon the exercise of options to purchase
Common Stock, which options are exercisable within 60 days.
(3) Includes 10,000 shares issuable upon the exercise of options to purchase
Common Stock, which options are exercisable within 60 days and 10,000 shares
issuable upon the exercise of warrants which are currently exercisable.
(4) Includes 4,500 shares issuable upon the exercise of options to purchase
Common Stock, which options are exercisable within 60 days.
(5) Mr. Rosenfeld, a former Co-Chairman and director of the Company, died on
February 19, 1997.
(6) According to a Schedule 13G filed February 12, 1997 by Delaware Management
Company, Inc. ('Management') and Delaware Management Holdings. Inc.
('Holdings'). Management is an investment advisor, the parent company of
which is Holdings.
(7) Following is information included in a Schedule 13D filed jointly on June
30, 1995, as amended on January 11, 1996 and January 21, 1997 by Jeffrey
Schwarz, Karen Finerman, Bedford Falls Investors, L.P. ('Bedford'),
Metropolitan Capital Advisors, L.P. ('Metropolitan L.P.'), Metropolitan
Capital Advisors, Inc. ('Metropolitan, Inc.'), Metropolitan Capital Partners
II, L.P. ('Metropolitan Partners') and KJ Advisors, Inc. ('KJ'):
Metropolitan Inc. is the sole general partner of Metropolitan L.P., which is
in turn the sole general partner of Bedford. KJ is the sole general partner
of Metropolitan Partners. Bedford is the beneficial owner of 353,840 shares
of Common Stock, 50,625 of which may be acquired upon exercise of currently
exercisable warrants; Metropolitan L.P. is the beneficial owner of the
shares of Common Stock owned by Bedford, as general partner of Bedford, and
has purchased currently exercisable warrants to purchase 4,375 shares of
Common Stock. Metropolitan Inc. beneficially owns 358,215 shares of Common
Stock as general partner of Metropolitan L.P. KJ beneficially owns 38,018
shares of Common Stock, of which 4,375 shares may be acquired upon the
exercise of currently exercisable warrants, as general partner of
Metropolitan Partners, which beneficially owns such shares. Jeffrey Schwarz
may be deemed the beneficial owner of 396,233 shares of Common Stock as a
result of his being a director, executive officer and stockholder of each of
Metropolitan, Inc. and KJ. Mr. Schwarz may also be deemed the beneficial
owner of an additional 39,625 shares of Common Stock by virtue of his
position as a director, executive officer and stockholder of a corporation
which, through an affiliate, may be deemed to have beneficial ownership of
securities held by a foreign investment entity. Accordingly, Mr. Schwarz may
be deemed to be the beneficial owner of a total of 435,858 shares of Common
Stock, 70,000 of which may be acquired upon exercise of currently
exercisable warrants. Jeffrey Schwarz does not beneficially own any shares
of Common Stock other than through such positions. Karen Finerman may be
deemed the beneficial owner of 435,858 shares of Common Stock as a result of
her being a director, executive officer and/or stockholder of each of the
entities described in the Schedule 13D, as amended, which directly or
indirectly serve as general partners, or investment advisors to the owners
of Common Stock. Karen Finerman does not beneficially own any shares of
Common Stock other than through such positions.
(8) 35,333 shares are issuable upon the exercise of options to purchase Common
Stock, which options are exercisable within 60 days and 10,000 shares are
issuable upon the exercise of warrants which are currently exercisable.
3
<PAGE>
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board is divided into two classes, each of which serves for a term of
two years, with only one class of directors being elected in each year. The term
of office of the first class of directors, presently consisting of David Jan
Mitchell and Thomas McMillen, will expire at the Annual Meeting, and the term of
office of the other class of directors, presently consisting of John S. Gleason,
Zivi R. Nedivi and Yoav Stern, will expire at the next succeeding annual meeting
of stockholders. In each case, a director will hold office until the next annual
meeting of stockholders at which his class of directors is to be elected.
Unless otherwise specified, the enclosed proxy will be voted in favor of
Messrs. Mitchell and McMillen (each of whom is currently a director of the
Company) to serve until the second succeeding annual meeting of stockholders and
until their respective successors shall have been duly elected and qualified. If
either of these nominees becomes unavailable for any reason, or if a vacancy
should occur before the election, the shares represented by the proxy will be
voted for the person, if any, who is designated by the Board of Directors to
replace the nominee or to fill the vacancy on the Board. Both nominees have
consented to be named and have indicated their intent to serve if elected. The
Board of Directors has no reason to believe that either of the nominees will be
unable to serve or that any vacancy on the Board of Directors will occur.
The following information is furnished with respect to each of the nominees
for election as a director and each member of the Board of Directors whose term
of office will continue after the Annual Meeting:
<TABLE>
<CAPTION>
YEAR FIRST
CLASS OF BECAME
NOMINEE DIRECTOR AGE DIRECTOR PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
- --------------------------- -------- --- ---------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas McMillen............ I 44 1996 Thomas McMillen has served as a director since October
1996. Mr. McMillen served three consecutive terms in the
U.S. House of Representatives from the Fourth
Congressional District of Maryland (1987 to 1993), and is
currently Chairman and CEO of Complete Wellness Centers,
Inc., a physician practice management company, since
November 1994. He served as Chief Administrative Officer
of CliniCorp., Inc., an owner and operator of
chiropractic clinics, from November 1993 to March 1994.
While in Congress, Mr. McMillen served on the
Transportation, Aviation & Materials Subcommittee of the
Science, Space & Technology Committee, as well as on the
Energy and Commerce Committee. Mr. McMillen serves on the
Boards of Directors of a number of public companies,
including Commodore Applied Technologies, Inc., North
Atlantic Acquisition Corp. I and UC Television Network
Company. He is a member of the Board of Visitors of the
University of Maryland School of Public Affairs and is
National Chairman of the University of Maryland
President's Club. He is an Advisory Council Member of the
Paul Nitze School of Advanced International Studies of
the Johns Hopkins University and is a member of the Board
of Directors of the International Visitors Center. He
also serves on the Democratic National Committee's
Business Council. Since 1993, Mr. McMillen has, at the
request of President Clinton, co-chaired the President's
Council on Physical Fitness and Sports. Mr. McMillen
received a B.S., Phi Beta Kappa, in Chemistry in 1974
from the University of Maryland and was also a Rhodes
Scholar.
David Jan Mitchell......... I 35 1993 Since January 1991, Mr. Mitchell has been the President of
Mitchell & Company, a New York-based merchant banking
company he founded. Mitchell & Company is engaged in
venture capital
</TABLE>
4
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
CLASS OF BECAME
NOMINEE DIRECTOR AGE DIRECTOR PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
- --------------------------- -------- --- ---------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
investments and financing. Since August 1994, Mr.
Mitchell has served as a director of Holmes Protection
Group, a publicly traded security alarm system company,
and since March 1995 has served as a director of Bogen
International, Inc. ('Bogen'). Mr. Mitchell serves as a
director of several private companies, including
Madah-Com Inc., an Israeli-based company involved in
sound transmission and First Home, a company that markets
houses developed for first time homeowners. Mr. Mitchell
also serves as President of AmeriCash LLC, a national
network of automated teller machines in non-bank
locations.
Yoav Stern................. II 43 1993 Yoav Stern is the Chairman of the Board and a director of
the Company. Mr. Stern is a principal of Helix. From the
Company's inception until June 22, 1995, Mr. Stern was
the Co-Chief Executive Officer and Co-President of the
Company. Mr. Stern has been a director of the Company
since its inception. Mr. Stern was a Co-CEO of European
Gateway Acquisition Corporation ('EGAC') since March
1995. EGAC acquired Bogen Communications, Inc. and
changed its name to Bogen in August 1995. Bogen's shares
are traded on the American Stock Exchange. Since that
time, Mr. Stern has served as a director and member of
the executive committee of Bogen. From February 1994 to
April 1995, Mr. Stern served as a director of Random
Access, Inc., a public company traded on the Nasdaq
National Market, which is engaged in the information
technology business. From January 1993 to September 1993,
Mr. Stern was President and a director of WordStar
International, Inc. ('WordStar'), which is engaged in
research and development and worldwide marketing and
distribution of software for business and consumer
applications. Mr. Stern structured the business
combination of WordStar with two other public companies,
after which WordStar changed its name to SoftKey
International, Inc. ('SoftKey'). SoftKey is traded on the
Nasdaq National Market. Mr. Stern is currently a director
of, and a consultant to, SoftKey. From March 1990 to
December 1992, Mr. Stern was Vice President of Business
Development of Elron Electronic Industries Ltd.
('Elron'), a multinational high-technology public holding
company based in Israel. Elron's aggregate revenues,
generated through its affiliated companies, exceeded $1.2
billion in 1996. Elron is engaged in operating and
investing in companies in the technology-led industry,
including medical diagnostic imaging, advanced defense
electronics, data communication, manufacturing
automation, semiconductor and software products, and
sophisticated productivity tools. Elron is traded on both
the Nasdaq National Market and Tel Aviv Stock Exchange.
From August 1988 to February 1990, Mr. Stern was director
of Business Development at Keter Plastics Ltd., a private
company engaged in the manufacturer of injection molded
plastic products. From December 1988 to February 1990, he
was the President, Chief Executive Officer and a director
of Lipski Ltd., an Israel company traded on the Tel Aviv
Stock
</TABLE>
5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
CLASS OF BECAME
NOMINEE DIRECTOR AGE DIRECTOR PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
- --------------------------- -------- --- ---------- -----------------------------------------------------------
<S> <C> <C> <C> <C>
Exchange, which is engaged in the development, production
and marketing of injection molded plastic products. From
January 1985 to June 1988, he was founder, President and
Chief Executive Officer of Co/Rent Computer Rentals, a
private company based in Canada, active in the rental of
microcomputers. From February 1973 to December 1983, Mr.
Stern served in the Israeli Air Force as a fighter pilot,
avionic systems officer, commander of Operational
Training Unit and a Deputy Squadron Commander. Mr. Stern
earned a Practical Engineering Diploma in advance
mechanics and automation from ORT Technological College,
Israel, graduated from the Israel Air Force Academy and
earned a B.S. degree in Mathematics and Computer Science
from Tel Aviv University.
Zivi R. Nedivi............. II 39 1995 Zivi R. Nedivi has been the Chief Executive Officer and a
director of the Company since June 22, 1995. Mr. Nedivi
was the founder, President and Chief Executive Officer of
Kellstrom Industries, Inc., an indirectly wholly-owned
subsidiary of Rada Electronic Industries Ltd. ('Rada'),
from its establishment in 1990 until June 1995. From
September 1994 until June 1995. Mr. Nedivi also served as
Corporate Vice President of Rada, a public company traded
on the Nasdaq National Market which is engaged in the
business of avionics for the commercial and military
aviation industries. From October 1984 to September 1990,
Mr. Nedivi was co-founder and General Manager of Maakav
Ltd., a private aviation management company based in
Israel. Maakav represented certain American companies in
Israel, including companies active in the distribution of
aircraft parts. From February 1986 until October 1990 Mr.
Nedivi was also co-founder and director of NBC Aviation
Inc., a private company based in Texas active in the sale
of commercial jet engines and related components. A
graduate of the Israel Air Force Academy, Mr. Nedivi
served in the Israel Air Force as an F-15 fighter pilot
for seven years and held the rank of Major. He also
served as a Human Engineering Consultant to Israel
Aircraft Industries Ltd. on the Lavi fighter aircraft
program.
John S. Gleason............ II 47 1997 John S. Gleason joined the Company in July 1995 as its
Chief Financial Officer and was appointed Treasurer in
August 1995 and Executive Vice President in January 1997.
From January 1986 until July 1995, Mr. Gleason served as
the Vice President of Finance of International Aircraft
Support L.P. ('IASI'), a seller of new and used aircraft
engine parts. Mr. Gleason was also responsible for
buying, selling and leasing IASI's commercial jet engines
on a worldwide basis, as well as the procurement of jet
engine inventory consignment arrangements. Mr. Gleason is
a Florida and California Certified Public Accountant and
earned a B.S. degree in accounting from Florida Atlantic
University in 1971.
</TABLE>
6
<PAGE>
<PAGE>
BOARD OF DIRECTORS
Meetings of the Board. The Board holds meetings when necessary and
otherwise acts by unanimous written consent. Before each Board or Committee
meeting, directors are furnished with an agenda and background materials
relating to matters to be discussed. During 1996, there were five (5) Board
meetings. In addition, the Board took action by unanimous written consent on
five (5) occasions during 1996. All current directors attended more than 75% of
the meetings of the Board and of committees of the Board on which they served.
Joram D. Rosenfeld was absent from four (4) meetings due to illness. John S.
Gleason was appointed on July 17, 1997 to fill the vacancy in Class II of the
Board resulting from Joram D. Rosenfeld's death.
The Executive Committee and the Audit Committee are the standing committees
of the Board of Directors, and may meet concurrently with the Board of
Directors' meetings.
Executive Committee. The Executive Committee has the responsibility,
between meetings of the Board of Directors of the Company, to advise and aid the
officers of the Company in all matters concerning the management of the business
and, while the Board is not in session, has the power and authority of the Board
to the fullest extent permitted under law. The Executive Committee met once in
1996. The members of the Committee are Yoav Stern and Zivi R. Nedivi.
Audit Committee. The Audit Committee is responsible for providing
assistance to the Board of Directors in fulfilling its responsibilities relating
to corporate accounting and reporting practices and to maintain a direct line of
communication between the directors and the independent accountants. It reviews
the Company's system of internal audits, selects independent auditors, reviews
the scope and results of the independent audit process and evaluates the
adequacy of the Company's internal accounting procedures. The Audit Committee
met once in 1996. The members of this Committee are Thomas McMillen, David Jan
Mitchell and Yoav Stern.
VOTE REQUIRED
The affirmative vote of the holders of a plurality of the shares of Common
Stock present in person or represented by proxy and entitled to vote at the
Annual Meeting is required for the election of the directors.
THE BOARD OF DIRECTORS DEEMS THE ELECTION AS DIRECTORS OF THE TWO NOMINEES
LISTED ABOVE TO BE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE 'FOR' THE ELECTION OF EACH OF THESE NOMINEES.
7
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation for services rendered to
the Company by the Chief Executive Officer and the Company's three most highly
compensated executive officers who earned compensation in excess of $100,000 in
1996 (the 'Named Executives'). No other executive officer earned compensation in
excess of $100,000 in 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------------------ ----------
- --------------------------------------------------------------------------- RESTRICTED SECURITIES
SALARY OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($)(1) BONUS($) COMPENSATION($)(2) AWARD(S)($) OPTIONS(#) PAYOUTS($) COMPENSATION($)
- ---------------------------- ---- ------- -------- ------------------ ----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Zivi R. Nedivi(3) .......... 1995 97,500 183,809 14,849 0 49,000 0 0
Chief Executive Officer 1996 180,000 218,047 0 0 100,000 0 9,446(4)
and President
John S. Gleason ............ 1995 68,750 58,061 1,213 0 30,000 0 0
Chief Financial Officer, 1996 150,000 60,557 10,819 0 50,000 0 1,224(5)
Executive Vice President
and Treasurer
Paul F. Steele ............. 1995 56,875 55,446 11,234 0 13,500 0 0
Vice President 1996 130,000 60,557 0 0 25,000 0 48,183(6)
Anthony Motisi ............. 1995 40,625 55,466 4,507 0 13,500 0 0
Vice President and 1996 78,000 48,466 0 0 25,000 0 4,562(7)
Secretary
</TABLE>
- ------------
(1) 1995 figures are salaries paid by the Company commencing on June 23, 1995
until December 31, 1995.
(2) Consisting of the use of a company vehicle and a premium allowance paid to a
nonqualified corporate benefit program on behalf of each executive.
(3) Mr. Nedivi owns an interest in Helix Capital Services, L.L.C ('Helix
Services'). Helix Services has entered into an engagement letter with the
Company under which it receives a retainer and is entitled to certain
transaction fees under certain circumstances. Mr. Nedivi receives no portion
of the retainer payments to Helix Services, but it is anticipated that he
will receive a portion of any transaction fees received by Helix Services
from the Company. See 'Certain Relationships and Related Transactions'.
(4) Consisting of a $8,095 life insurance premium and a $1,351 holiday bonus.
(5) Consisting of a holiday bonus.
(6) Consisting of a loan of $35,436 to the employee that was forgiven, a $11,448
life insurance premium and a $1,299 holiday bonus.
(7) Consisting of a $3,360 life insurance premium and a $1,202 holiday bonus.
8
<PAGE>
<PAGE>
The following table sets forth information concerning options granted in
the last fiscal year to the Named Executives.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------------------------------------
(C)
(B) % OF TOTAL OPTIONS (D)
NUMBER OF SECURITIES GRANTED TO EXERCISE OR
(A) UNDERLYING OPTIONS EMPLOYEES IN BASE PRICE (E)
NAME GRANTED(#) FISCAL YEAR ($/SH) EXPIRATION DATE
- ------------------------------------- --------------------- ------------------ ----------- ---------------
<S> <C> <C> <C> <C>
Zivi R. Nedivi....................... 100,000 43.9 7.63 September 2006
John S. Gleason...................... 50,000 21.9 7.63 September 2006
Paul F. Steele....................... 25,000 11 7.63 September 2006
Anthony Motisi....................... 25,000 11 7.63 September 2006
</TABLE>
The following table sets forth information concerning the value of
unexercised stock options at the end of the 1996 fiscal year for the Named
Executives:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
(D) (E)
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
(B) (C) UNEXERCISED OPTIONS OPTIONS AT
(A) SHARES ACQUIRED VALUE AT FY-END (#) FY-END ($)(1)
NAME ON EXERCISE (#) REALIZED ($) EXERCISE/UNEXERCISABLE EXERCISE/UNEXERCISABLE
- ------------------------------------------ --------------- ------------ ---------------------- ----------------------
<S> <C> <C> <C> <C>
Zivi R. Nedivi............................ 0 0 16,333/132,667 55,124/185,251
John S. Gleason........................... 0 0 10,000/ 70,000 33,750/105,000
Paul F. Steele............................ 0 0 4,500/ 34,000 15,188/ 49,125
Anthony Motisi............................ 0 0 4,500/ 34,000 15,188/ 49,125
</TABLE>
The Company had no long-term incentive plan awards granted as of December
31, 1996.
- ------------
(1) The value for an 'in-the-money' option represents the difference between the
exercise price of the option and the closing price of the Common Stock on
the Nasdaq SmallCap Market on December 31, 1996.
COMPENSATION OF DIRECTORS
During 1996, the Company paid entities controlled by each of Yoav Stern and
Joram D. Rosenfeld, an aggregate of $90,000 each, for services rendered by
Messrs. Stern and Rosenfeld as Co-Chairmen of the Company's Board of Directors.
The Company's Chief Executive Officer receives no additional cash
compensation for service as a Director. All Directors are reimbursed for
out-of-pocket expenses incurred in attending Board meetings. During 1996, (a)
Messrs. Stern and McMillen were granted options to purchase 100,000 and 30,000
shares of Common Stock, respectively, under the Company's 1996 Stock Option Plan
at an exercise price of $7 5/8; and (b) Mr. Mitchell was granted options to
purchase 2,250 shares of Common Stock under the Company's 1995 Stock Option Plan
at an exercise price of $7 5/8. See '1995 Stock Option Plan' and '1996 Stock
Option Plan,' below.
EMPLOYMENT AGREEMENTS
The Company entered into a seven-year management agreement, effective
January 1, 1997, with East Shore Ventures, Inc. (the 'Manager'), of which Mr.
Nedivi is President and sole shareholder. The agreement provides for an annual
base fee of $240,000 and a bonus payable on the following terms: (i) if the
Company achieves a target net income level which may be adjusted each year by
the board (the 'Target'), then the Manager will receive a bonus of $240,000;
(ii) if the actual net income for the Company in any year exceeds the Target for
such year, the Manager's bonus will increase by a
9
<PAGE>
<PAGE>
corresponding percentage, provided that the bonus may not exceed $360,000; and
(iii) if the actual net income for the Company in any year is less than the
Target for such year, the Manager's bonus will decrease by twice the
corresponding percentage (so that if the actual net income for the Company is
50% or less of the Target, there will be no bonus paid). In addition, the
management agreement provides that the manager will be paid severance of four
months of the base fee if the Manager's services are terminated without cause,
provided that upon a change of control Mr. Nedivi will be paid severance equal
to twelve months of its base fee. A change of control is defined in the contract
as (i) any transaction which results in the stockholders of the Company
immediately before the transaction ceasing to own at least 51% of the voting
stock or of the entity which results from the transaction, (ii) a merger,
consolidation or other transaction where the Company is not the surviving entity
or (iii) a disposition of all or substantially all of the assets of the Company.
Under the terms of the management agreement, the Company maintains a life
insurance policy on the life of Mr. Nedivi in the amount of $4 million, which is
transferable without consideration to Mr. Nedivi after January 1, 1999. The
management agreement may be terminated by mutual agreement between the Company
and the Manager, or by either party upon sixty (60) days written notice.
The Company entered into a five-year employment contract with Mr. Gleason,
effective as of May 18, 1995 which was amended on February 14, 1997. The amended
contract provides for an annual base salary of $190,000 and a bonus payable on
the following terms: (i) if the Company achieves a target net income level which
may be adjusted each year by the Board (the 'Gleason Target'), then Mr. Gleason
will receive a bonus of $90,000; (ii) if the actual net income for the Company
in any year exceeds the Gleason Target for such year, Mr. Gleason's bonus will
increase by a corresponding percentage, provided that the bonus may not exceed
$135,000; and (iii) if the actual net income for the Company in any year is less
than the Gleason Target for such year. Mr. Gleason's bonus will decrease by
twice the corresponding percentage (so that if the actual net income for the
Company is 50% or less of the Gleason Target, there will be no bonus paid). In
addition, the amended employment agreement provides for the grant of options
(outside of the Company's 1996 Stock Option Plan) to purchase 100,000 shares of
the Company's Common Stock subject to the approval of the Board of Directors.
The employment agreement provides that Mr. Gleason will be paid severance of
four months of his base salary if employment is terminated without cause, and
that upon a change of control (as previously defined) Mr. Gleason will be paid
severance equal to twelve months of his base salary. Moreover, the amended
agreement provides that the Company will maintain a life insurance policy on the
life of Mr. Gleason in the amount of $2 million which is transferable without
consideration to Mr. Gleason after January 1, 1999. The agreement may be
terminated by mutual agreement between the Company and Mr. Gleason, or by either
party upon sixty (60) days written notice.
The Company entered into a five-year employment contract with Mr. Steele,
effective as of January 1, 1996, providing for an annual base salary of
$130,000. Effective January 1, 1997, Mr. Steele's annual base salary increased
to $160,000. The agreement also provides for a bonus payable on the following
terms: (i) if the Company achieves a target net income level which may be
adjusted each year by the Board (the 'Steele Target'), then Mr. Steele will
receive a bonus of $50,000; (ii) if the actual net income for the Company in any
year exceeds the Steele Target for such year, Mr. Steele's bonus will increase
by a corresponding percentage, provided that the bonus may not exceed $75,000;
and (iii) if the actual net income for the Company in any year is less than the
Steele Target for such year, Mr. Steele's bonus will decrease by twice the
corresponding percentage (so that if the actual net income for the Company is
50% or less of the Steele Target, there will be no bonus paid). If Mr. Steele's
employment is terminated without cause, the employment agreement provides that
Mr. Steele will be paid (i) to the extent not already paid, his salary through
the date of such termination, (ii) a cash lump sum for any vacation days accrued
but unused as of the date of termination and (iii) an amount equal to six months
of Mr. Steele's base salary, provided that if termination is due to a change of
control (as previously defined), Mr. Steele will be paid an amount equal to
eight months of his base salary. The agreement may be terminated by mutual
agreement between the Company and Mr. Steele, or by either party upon sixty (60)
days written notice.
The Company entered into an amended and restated five-year employment
contract with Mr. Motisi on January 30, 1996, providing for annual base salary
of $75,000. Effective January 1, 1997, Mr. Motisi's annual base salary increased
to $100,000. The agreement also provides for a bonus payable on
10
<PAGE>
<PAGE>
the following terms: (i) if the Company achieves a target net income level which
may be adjusted each year by the Board (the 'Motisi Target'), then Mr. Motisi
will receive a bonus of $40,000; (ii) if the actual net income for the Company
in any year exceeds the Motisi Target for such year, Mr. Motisi's bonus will
increase by a corresponding percentage, provided that the bonus may not exceed
$60,000; and (iii) if the actual net income for the Company in any year is less
than the Motisi Target for such year, Mr. Motisi's bonus will decrease by twice
the corresponding percentage (so that if the actual net income for the Company
is 50% or less of the Motisi Target, there will be no bonus paid). If Mr.
Motisi's employment is terminated without cause, the employment agreement
provides that Mr. Motisi will be paid (i) to the extent not already paid, his
salary through the date of such termination, (ii) a cash lump sum for any
vacation days accrued but unused as of the date of termination and (iii) an
amount equal to six months of Mr. Motisi's base salary, provided that if
termination is due to a change of control (as previously defined), Mr. Motisi
will be paid an amount equal to eight months of Mr. Motisi's base salary. The
agreement may be terminated by mutual agreement between the Company and Mr.
Motisi, or by either party upon sixty (60) days written notice.
1995 STOCK OPTION PLAN
On May 10, 1995, the Board adopted the 1995 Stock Option Plan, and on June
22, 1995, the Company's stockholders approved the 1995 Stock Option Plan. The
purpose of the 1995 Stock Option Plan is to advance the interests of the Company
by providing an additional incentive to attract and retain qualified and
competent key employees, officers, directors and independent contractors for the
Company and its subsidiaries. The 1995 Stock Option Plan provides for the
granting of options to purchase or acquire, in the aggregate, up to 250,000
shares of Common Stock, with no individual to be granted options to purchase
more than 100,000 shares of Common Stock during the ten year period from April
1994 through the tenth anniversary thereof. Options granted pursuant to the 1995
Stock Option Plan may be either incentive stock options ('ISOs') or
non-qualified stock options ('NQSOs'). Shares of the Common Stock subject to
options may be from shares held in the Company's treasury or from authorized and
unissued shares.
The 1995 Stock Option Plan is administered by either the Board, the
Compensation Committee of the Board or another committee, if any, appointed by
the Board (references in this discussion to the 'Committee' include the Board,
the Compensation Committee or another committee appointed by the Board to the
extent any of the foregoing administers the 1995 Stock Option Plan unless the
context otherwise requires). If the 1995 Stock Option Plan is administered by a
Committee (other than the Board or the Compensation Committee), such Committee
will consist of at least two persons, each of whom is a 'disinterested person'
within the meaning of Section 16(b) of the Exchange Act of 1934, as amended (the
'Exchange Act'), and if the Board so determines, an 'outside director' within
the meaning of Section 162(m) of the Internal Revenue Code. The authority of the
Committee will include, among other things, determining the persons to whom
options are granted, the period of exercisability, the designation of options as
ISOs or NQSOs and the other terms and provisions thereof.
Options may be granted only to key employees, officers, directors and
independent contractors of the Company or any subsidiary corporation of the
Company, whether now existing or subsequently formed or acquired, provided,
however, that ISOs may only be granted to key employees.
The exercise price for each share subject to an option will not be less
than the fair market value of the Common Stock on the date the option is
granted. However, the exercise price per share of an ISO granted to any employee
who, on the date of the grant, possesses more than 10% of the total combined
voting power of all classes of stock of the Company (or of any subsidiary or
parent corporation), will not be less than 110% of the fair market value of the
shares of Common Stock on the date the ISO is granted.
1996 STOCK OPTION PLAN
The 1996 Stock Option Plan was adopted by the Board on July 10, 1996 and
approved by the Company's Stockholders on August 28, 1996. The 1996 Stock Option
Plan is administered by the Board of Directors of the Company. The Board of
Directors determines, among other things, the recipients of grants, whether a
grant will consist of ISOs, NQSOs or stock appreciation rights ('SARs') (in
tandem
11
<PAGE>
<PAGE>
with an option or free-standing) or a combination thereof, and the number of
shares to be subject to such options. ISOs may be granted only to officers and
key employees of the Company and its subsidiaries. Nonqualified stock options
and SARs may be granted to such officers and employees as well as to agents and
directors of and consultants to the Company, whether or not otherwise employees
of the Company.
The Plan provides for the granting of ISOs to purchase the Company's Common
Stock at not less than the fair market value on the date of the option grant and
the granting of nonqualified options and SARs with any exercise price. SARs
granted in tandem with an option have the same exercise price as the related
option. The total number of shares with respect to which options and SARs may be
granted under the Plan is currently 1,100,000. The Plan contains certain
limitations applicable only to ISOs granted thereunder. To the extent that the
aggregate fair market value, as of the date of grant, of the shares to which
ISOs become exercisable for the first time by an optionee during the calendar
year exceeds $100,000, the option will be treated as a nonqualified option. In
addition, if an optionee owns more than 10% of the total voting power of all
classes of the Company's stock at the time the individual is granted an ISO, the
option price per share cannot be less than 110% of the fair market value per
share and the term of the ISO cannot exceed five years. No option or SAR may be
granted under the Plan after July 9, 2006, and no option or SAR may be
outstanding for more than ten years after its grant.
Upon the exercise of an option, the holder must make payment of the full
exercise price. Such payment may be made in cash, check or, under certain
circumstances, in shares of any class of the Company's Common Stock, or any
combination thereof. SARs, which give the holder the privilege of surrendering
such rights for the appreciation in the Common Stock between the time of the
grant and the surrender, may be settled, in the discretion of the Board or
committee, as the case may be, in cash, Common Stock, or in any combination
thereof. The exercise of an SAR granted in tandem with an option cancels the
option to which it relates with respect to the same number of shares as to which
the SAR was exercised. The exercise of an option cancels any related SAR with
respect to the same number of shares as to which the option was exercised.
Generally, options and SARs may be exercised while the recipient is performing
services for the Company and within three months after termination of such
services.
The Plan may be terminated at any time by the Board of Directors, which may
also amend the Plan, except that without stockholder approval, it may not
increase the number of shares subject to the Plan or change the class of persons
eligible to receive options under the Plan.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The Securities Exchange Act requires the Company's executive officers,
directors and beneficial owners of more than 10% of a class of the Company's
stock to file reports of ownership and changes in ownership with the Securities
and Exchange Commission (the 'Commission') and Nasdaq. Based solely upon a
review of Forms 3, 4 and 5, and amendments thereto, furnished to the Company
during its most recent fiscal year, there were individuals subject to compliance
reporting requirements under the Exchange Act who failed to file on a timely
basis. Zivi R. Nedivi, John S. Gleason, Paul F. Steele, David Jan Mitchell, Yoav
Stern and Anthony Motisi failed to file on a timely basis a Form 5, each
reporting one exempt transaction during fiscal year 1996. Donald Reynolds, Fred
von Husen, Ian McDonald and Thomas McMillen each failed to file on a timely
basis a Form 3. Mr. Mitchell failed to file on a timely basis a Form 4 reporting
one transaction.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 24, 1995, the Company entered into an agreement with Mr. Nedivi
pursuant to which Mr. Nedivi purchased 181,818 shares of Common Stock at a
purchase price of $1,000,000.
During 1996, the Company paid Yoav Stern and Joram D. Rosenfeld, and in
each case entities controlled by them, an aggregate of $90,000 each, for
services rendered by Yoav Stern and Joram D. Rosenfeld as Co-Chairman of the
Company's Board of Directors.
The Company has engaged Helix Capital Services, L.L.C. ('Helix Services'),
controlled by Messrs. Stern and Nedivi to act as the Company's exclusive
financial advisor with respect to merger and
12
<PAGE>
<PAGE>
acquisition transactions and as principal financial adviser with respect to
other transactions for an initial term of eighteen months. Under the terms of
the agreement, Helix Services receives a monthly retainer of $25,000 and a
success fee to be determined by the Company on a per transaction basis, that is
not lower than 2% of the aggregate consideration paid in connection with the
applicable transaction. In addition, the terms of the engagement letter provide
for an insurance policy in the amount of $3 million on the life of Mr. Stern
which is transferable without consideration to Mr. Stern after two years.
Payments under the engagement letter are in lieu of fees payable to Mr. Stern as
Chairman of the Board. It is expected that most of the retainer will be paid by
Helix Services to Mr. Stern. As a result of ownership interests held by Messrs.
Stern and Nedivi in Helix Services, it is anticipated that a substantial portion
of the transaction fees, if any, paid by the Company to Helix Services will, in
turn, be distributed to Messrs. Stern and Nedivi.
On January 15, 1997, the Company through a wholly owned subsidiary
completed the acquisition of substantially all the assets and certain
liabilities of International Aircraft Support, L.P. ('IASI'). The acquisition of
IASI was partly financed from the proceeds of a $6,000,000 subordinated bridge
loan ('Bridge Loan') according to an agreement as of January 9, 1997 by and
among the Company, Bedford, Metropolitan L.P., Metropolitan Capital Advisors
International Limited, Diversified Strategies Fund L.P., and Scoggin Capital
Management L.P. (the 'Lenders'). As of April 15, 1997 the outstanding principal
and interest of the Bridge Loan was fully paid to the Lenders by paying the
total sum of $6,118,595 and issuing to Metropolitan a warrant to purchase 10,625
shares of Common Stock, at an exercise price of $10.00 per share.
On February 25, 1997 The Board of Directors of the Company approved loans
in the aggregate amount of $530,000, to certain officers and directors of the
Company for the purposes of purchasing shares of Common Stock. The loans will be
unsecured and payable over four years for employees or five years for directors
at an interest rate based on the 'Applicable Federal Rate' at the time of the
loan (6.1% per annum at February 25, 1997). Interest will be paid annually by
officers and will accrue and be paid at maturity by directors. The loans will
provide for mandatory prepayment if the officer or director sells any shares of
the Company's Common Stock. As of February 25, 1997, the Board has approved
loans to the following individuals:
<TABLE>
<CAPTION>
AMOUNT OUTSTANDING
AS OF
NAME PRINCIPAL AMOUNT JULY 24, 1997
- --------------------------------------------------------------- ---------------- ------------------
<S> <C> <C>
Zivi R. Nedivi................................................. $150,000 $150,000
Yoav Stern..................................................... 150,000 150,000
John Gleason................................................... 50,000 50,000
Ian McDonald(1)................................................ 50,000 0
Thomas McMillen(2)............................................. 50,000 0
David Jan Mitchell............................................. 50,000 0
Anthony Motisi................................................. 15,000 12,415
Fred von Husen................................................. 15,000 0
---------------- ------------------
$530,000 $362,415
---------------- ------------------
---------------- ------------------
</TABLE>
- ------------
(1) In April 1997, Ian McDonald terminated his employment with the Company.
(2) Mr. McMillen borrowed $50,000 from the Company under the loan program (the
'McMillen Loan') and repaid the McMillen Loan on July 18, 1997 from the
proceeds of a new loan in the amount of $50,000 from Barnett Bank, N.A. (the
'Bank Loan'). As an inducement to Barnett Bank, N.A. to extend the loan to
Mr. McMillen, the Company agreed to guarantee the Bank Loan pursuant to a
guaranty agreement (the 'Guaranty') dated July 18, 1997. Mr. McMillen has
entered into a letter agreement with the Company pursuant to which he is
obligated to (i) reimburse the Company for any amounts the Company is
required to pay to Barnett Bank, N.A. under the Guaranty; (ii) prepay the
Bank Loan from the net proceeds received by Mr. McMillen if he sells any
shares of the Company's Common Stock; and (iii) pay to the Company on March
14, 1998 all interest accrued on the McMillen Loan from the date thereof
through July 18, 1997. The Company also paid $2,175 of bank fees in
connection with the Bank Loan.
13
<PAGE>
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The stockholders will be asked to ratify the appointment of KPMG Peat
Marwick LLP as the independent certified public accountants of the Company for
the fiscal year ending December 31, 1997. KPMG Peat Marwick LLP audited the
financial statements of the Company for the fiscal year ended December 31, 1996.
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he or she
desires to do so and is expected to be available to respond to appropriate
questions from stockholders.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE 'FOR' APPROVAL THEREOF.
STOCKHOLDER PROPOSALS
All stockholder proposals which are intended to be presented at the Annual
Meeting of Stockholders of the Company to be held in 1998 must be received by
the Company no later than March 15, 1998 for inclusion in the Board of
Directors' proxy statement and form of proxy relating to that meeting.
OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
Annual Meeting. However, if any other business properly comes before the Annual
Meeting, it is the intention of the persons named in the enclosed proxy to vote
on such matters in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
Annual Meeting, please sign the proxy and return it in the enclosed envelope.
By order of the Board of Directors,
/s/ ANTHONY MOTISI
ANTHONY MOTISI
Secretary
Dated: July 28, 1997
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB WILL BE SENT WITHOUT
CHARGE TO ANY STOCKHOLDER REQUESTING IT IN WRITING FROM: KELLSTROM INDUSTRIES,
INC., ATTENTION: MICHAEL W. WALLACE; 14000 N.W. 4TH STREET, SUNRISE, FLORIDA
33325.
14
<PAGE>
<PAGE>
KELLSTROM INDUSTRIES, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 28, 1997
Zivi R. Nedivi and John Gleason, and each of them, as the true and lawful
attorneys, agents and proxies of the undersigned, with full power of
substitution, are hereby authorized to represent and to vote all shares of
Common Stock of Kellstrom Industries, Inc. (the 'Company') held of record by the
undersigned on July 11, 1997, at the Annual Meeting of Stockholders to be held
at 10:00 a.m. on Thursday, August 28, 1997, at the executive offices of the
Company, located at 14000 N.W. 4th Street, Sunrise, Florida 33325 and any
adjournment thereof. Any and all proxies heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR PROPOSAL
NOS. 1 AND 2.
1. Proposal No. 1 -- Election of Directors -- Nominees are: Thomas McMillen
and David Jan Mitchell
<TABLE>
<S> <C>
[ ] FOR all listed nominees (except do not vote for the [ ] WITHHOLD AUTHORITY to vote for the listed nominees.
nominee(s) whose name(s) appear(s) below):
</TABLE>
_____________________________________________________________________________
2. Proposal No. 2 -- The appointment of KPMG Peat Marwick LLP as the
independent certified public accountants of the Company for the fiscal
year ending December 31, 1997.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
<PAGE>
<PAGE>
Discretionary authority is hereby granted with respect to such other matters
as may properly come before the meeting.
IMPORTANT: PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT OWNER SHALL
SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD GIVE FULL TITLE AS SUCH.
IF SIGNOR IS A CORPORATION, PLEASE GIVE FULL CORPORATE NAME BY DULY AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
Dated: _________________ , 1997
_______________________________
Signature
_______________________________
Signature if held jointly
THE ABOVE-SIGNED ACKNOWLEDGES
RECEIPT OF THE NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS AND THE
PROXY STATEMENT FURNISHED
THEREWITH.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
