<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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
[x] Definitive Proxy Statement (as Permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
KITTY HAWK, 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:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
KITTY HAWK, INC.
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of Kitty Hawk, Inc. on Friday, May 30, 1997, at 10:00 a.m., local time. The
meeting will be held at the executive offices of the Company at 1515 West 20th
Street, Dallas/Fort Worth International Airport, Texas 75261.
At the meeting, you will be asked to consider and elect three directors to
serve until the 2000 Annual Meeting of Stockholders. Your Board of Directors has
unanimously nominated these persons for election as directors. You are also
being asked to ratify the appointment of Ernst & Young LLP as the Company's
independent public accountants for fiscal year 1997. Information about the
business of the meeting is set forth in the accompanying proxy statement, which
you are urged to read carefully. During the meeting, I will review with you the
affairs and progress of the Company during and since 1996. Officers of the
Company will be present to respond to questions from stockholders.
The Board of Directors appreciates and encourages stockholder participation
in the Company's affairs. Whether or not you plan to attend the meeting, please
sign, date and return the enclosed proxy promptly in the envelope provided. Your
shares will then be represented at the meeting. If you attend the meeting, you
may, at your discretion, withdraw the proxy and vote in person.
On behalf of the Board of Directors, thank you for your cooperation and
continued support.
Sincerely,
/s/ M. TOM CHRISTOPHER
M. TOM CHRISTOPHER
Chairman and Chief Executive Officer
April 16, 1997
<PAGE> 3
KITTY HAWK, INC.
1515 West 20th Street
Dallas/Fort Worth International Airport, Texas 75261
Telephone (972) 456-2200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 1997
The Annual Meeting of Stockholders of Kitty Hawk, Inc., a Delaware
corporation (the "Company"), will be held at the executive offices of the
Company at 1515 West 20th Street, Dallas/Fort Worth International Airport, Texas
75261, on Friday, May 30, 1997 at 10:00 a.m., local time, for the following
purposes:
(1) To elect three persons to serve as Class III directors until the 2000
Annual Meeting of Stockholders and until their successors are duly
elected and qualified;
(2) To ratify the appointment of Ernst & Young LLP as independent public
accountants of the Company for fiscal year 1997; and
(3) To transact such other business as may properly come before the meeting
or any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 4, 1997, as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting or any adjournment(s) thereof. Only stockholders of
record at the close of business on April 4, 1997 are entitled to notice of, and
to vote at, such meeting. A complete list of stockholders entitled to vote at
the meeting will be available for examination at 1515 West 20th Street,
Dallas/Fort Worth International Airport, Texas 75261, for ten days prior to and
during the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE ENCOURAGED
TO FILL OUT, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. PROXIES
FORWARDED BY OR FOR BROKERS OR FIDUCIARIES SHOULD BE RETURNED AS REQUESTED BY
THEM.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ RICHARD R. WADSWORTH
RICHARD R. WADSWORTH
Senior Vice President -- Finance,
Chief Financial Officer and
Secretary
Dallas/Fort Worth International Airport, Texas
April 16, 1997
<PAGE> 4
KITTY HAWK, INC.
1515 West 20th Street
Dallas/Fort Worth International Airport, Texas 75261
Telephone (972) 456-2200
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 1997
SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Kitty Hawk, Inc. (the "Company") for use at
the Annual Meeting of Stockholders of the Company to be held on May 30, 1997
(the "Annual Meeting") and at any and all adjournments thereof. The approximate
date on which this Proxy Statement and accompanying proxy card are first being
sent or given to stockholders is April 16, 1997.
Shares represented by each proxy, if properly executed and returned to the
Company prior to the Annual Meeting, will be voted as directed, but if not
otherwise specified, will be voted for the election of the three Class III
directors and to ratify the appointment of Ernst & Young LLP as independent
public accountants, all as recommended by the Board of Directors. A stockholder
executing the proxy may revoke it at any time before it is voted by giving
written notice to the Secretary of the Company, by subsequently executing and
delivering a proxy or by voting in person at the Annual Meeting (although
attending the Annual Meeting without executing a ballot or executing a
subsequent proxy will not constitute revocation of a proxy).
OUTSTANDING VOTING SECURITIES OF THE COMPANY
On April 4, 1997, the record date for determining stockholders entitled to
vote at the Annual Meeting, there were outstanding 10,451,807 shares of Common
Stock, par value $.01 per share ("Common Stock"). Each share of Common Stock is
entitled to one vote for each director to be elected and upon all other matters
to be brought to a vote by the stockholders at the Annual Meeting. The
affirmative vote of a plurality of the shares of Common Stock present or
represented at the Annual Meeting is required to elect the Class III directors,
and the affirmative vote of a majority of the shares of Common Stock present or
represented at the Annual Meeting is required to ratify the appointment of Ernst
& Young LLP.
With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on the proposal to ratify the
appointment of the independent public accountants and will be counted as present
for such purpose, but will have the effect of a negative vote on that proposal
because that proposal requires the affirmative vote of holder of a majority of
shares present in person or by proxy and entitled to vote. Brokers who hold
shares in street name for customers may vote on certain items when they have not
received instructions from beneficial owners. Brokers that do not receive
instruction may vote on the election of directors and the proposal to ratify the
appointment of the independent public accountants. Under applicable Delaware
law, a broker non-vote will have no effect on the outcome of the election of
directors or the proposal to ratify the appointment of the auditors.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 4, 1997 certain information with
regard to the beneficial ownership of the Common Stock by (i) all persons known
by the Company to be the beneficial owner of more than 5% of the outstanding
Common Stock, (ii) each director and nominee for director of the Company, (iii)
each executive officer of the Company, and (iv) all directors and executive
officers of the Company as a group. Unless otherwise indicated, all shares shown
in the table below are held with sole voting and investment power by the person
or entity indicated.
<TABLE>
<CAPTION>
SHARES OWNED
BENEFICIALLY
--------------------
NAME NUMBER PERCENT
---- --------- -------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
M. Tom Christopher (1).................................... 6,673,436 63.8%
Tilmon J. Reeves (1)...................................... 234,424 2.2%
Richard R. Wadsworth (1).................................. 92,140 (2)
DIRECTORS:
Ted J. Coonfield (1)...................................... 600 (2)
James R. Craig (1)........................................ 0 (2)
Robert F. Grammer (1)..................................... 2,000 (2)
Lewis S. White (1)........................................ 0 (2)
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (7
PERSONS).................................................. 7,002,600 67.0%
RCM Capital Management, L.L.C. (3).......................... 616,900 5.9%
Four Embarcadero Center, Suite 2900
San Francisco, California 94111
</TABLE>
- ---------------
(1) The address for this stockholder is 1515 West 20th Street, Dallas/Fort Worth
International Airport, Texas 75261.
(2) Less than 1%.
(3) Based upon a Schedule 13G filed with the Securities and Exchange Commission
by such beneficial owner on February 6, 1997. RCM Capital Management, L.L.C.
("RCM Capital"), an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, holds sole dispositive power with respect
to all such shares and sole voting power with respect to 525,900 of such
shares. RCM Limited, L.P. ("RCM Limited") is the managing agent of RCM
Capital and has beneficial ownership of such shares only to the extent it
may be deemed to beneficially own such shares. RCM General Corporation is
the general partner of RCM Limited and has beneficial ownership of such
shares only to the extent it may be deemed to beneficially own such shares.
RCM Capital is a wholly owned subsidiary of Dresdner Bank AG ("Dresdner"),
an international banking organization headquartered in Frankfurt, Germany.
Dresdner has beneficial ownership of such shares only to the extent it may
be deemed to beneficially own such shares.
CHANGE IN FISCAL YEAR END
On December 4, 1996, the Company changed its fiscal year end from August 31
to December 31. References herein to the four months ended December 31, 1996
refer to the transition period between the end of fiscal year 1996 and the
beginning of fiscal year 1997. References herein to fiscal years prior to fiscal
year 1997 refer to the fiscal year ending on August 31 of the year indicated.
Fiscal years subsequent to fiscal year 1996 will end on December 31 of the year
indicated.
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<PAGE> 6
PROPOSAL I
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation divides the Board of Directors
into three classes. The term of office of the Class III directors expires at the
Annual Meeting. The Class I directors will serve until the 1998 Annual Meeting
of Stockholders, and the Class II directors will serve until the 1999 Annual
Meeting of Stockholders.
It is intended that the names of the nominees listed below will be placed
in nomination and that the persons named in the proxy will vote for their
election. All nominees listed below are currently members of the Board of
Directors. Each nominee has consented to being named in this Proxy Statement and
to serve if elected. If any nominee becomes unavailable for any reason, the
shares represented by the proxies will be voted for such person, if any, as may
be designated by the Board of Directors. However, management has no reason to
believe that any nominee will be unavailable.
NOMINEES
CLASS III -- TERM TO EXPIRE IN 2000
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION
---- --- ----------------
<S> <C> <C>
M. Tom Christopher........................ 50 Chairman of the Board of Directors and Chief
Executive Officer
James R. Craig............................ 58 Director
Robert F. Grammer......................... 61 Director
</TABLE>
DIRECTORS CONTINUING IN OFFICE
CLASS I -- TERM TO EXPIRE IN 1998
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION
---- --- ----------------
<S> <C> <C>
Tilmon J. Reeves.......................... 57 President, Chief Operating Officer and
Director
Ted J. Coonfield.......................... 48 Director
</TABLE>
CLASS II -- TERM TO EXPIRE IN 1999
<TABLE>
<CAPTION>
NAME AGE CURRENT POSITION
---- --- ----------------
<S> <C> <C>
Richard R. Wadsworth...................... 50 Senior Vice President -- Finance, Chief
Financial Officer, Secretary and Director
Lewis S. White............................ 57 Director
</TABLE>
Set forth below is a description of the background of each of the directors
of the Company.
M. TOM CHRISTOPHER has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since its inception in 1985. Prior to
assuming these positions, he formed and managed Kitty Hawk Charters, Inc. He has
over 20 years of experience in the air freight industry, including serving as an
account manager for Burlington Northern Airfreight from 1976 to 1978.
TILMON J. REEVES has served as President and Chief Operating Officer of the
Company since May 1993 and has over 30 years of aviation experience. Prior to
assuming his current positions, he served as Vice President of the Company's air
freight carrier from March 1992 to May 1993. Prior to joining the Company, Mr.
Reeves served as Vice President (Sales) of Express One International, Inc. from
April 1991 to March 1992. Mr. Reeves became a director in October 1994.
RICHARD R. WADSWORTH has served as Senior Vice President -- Finance since
October 1992, Chief Financial Officer since September 1994, and Secretary since
October 1994. Prior to his current role, he
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<PAGE> 7
served in a consulting capacity to the Company in the preparation of various
bids for the Company's contract air freight service from December 1991 to
September 1992. Mr. Wadsworth became a director in October 1994.
TED J. COONFIELD became a director of the Company in October 1994. Since
April 1996, Mr. Coonfield has been a consultant with Performance Consulting
Group, a firm specializing in change management consulting primarily in the
banking and insurance industry. From January 1993 to April 1996, Mr. Coonfield
was a consultant with the Richard-Rogers Group, a consulting firm specializing
in total quality issues, where he primarily engaged in consulting for firms in
the transportation industry. From 1990 to December 1992, Mr. Coonfield was the
Special Assistant to the Director of the Department of Human Resources for the
State of Oregon. Since 1985, Mr. Coonfield has been the President of Oregon Wine
Designs, Inc., a wine production and marketing firm.
JAMES R. CRAIG became a director of the Company in October 1994. Mr. Craig
is an attorney who has served of counsel to Burke, Wright & Keiffer, P.C. since
1990. Prior to his affiliation with Burke, Wright & Keiffer, P.C., Mr. Craig was
in private law practice in Dallas since 1971, and in 1989 served as President of
Whitehall Development Company, a real estate development firm, of which he is
now a director.
ROBERT F. GRAMMER became a director of the Company in October 1994. From
1986 to October 1993, Mr. Grammer was Chairman, President and owner of R.G.
Aviation, a provider of aircraft-related services. Mr. Grammer retired from this
position in October of 1993 to manage his personal investments.
LEWIS S. WHITE became a director of the Company in October 1994. Since
1988, Mr. White has been President of L. S. White & Co., a firm engaged in
business planning, corporate finance, acquisitions, and in business start-ups,
turnarounds and restructurings. Prior to 1988, he held senior management
positions with Paramount Communications Inc. and Union Carbide Corporation. Mr.
White is also a director of Whitehall Corporation, a company principally
involved in aircraft maintenance.
The affirmative vote of a plurality of the shares of Common Stock present
in person or represented by proxy at the Annual Meeting is required to elect the
nominees for director named above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
FOR DIRECTOR NAMED ABOVE.
MEETINGS OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board of
Directors. The Board meets to review significant developments affecting the
Company and to act on matters requiring Board approval. It also holds special
meetings when an important matter requires Board action between scheduled
meetings. The Board of Directors met two times during fiscal year 1996 and two
times during the four months ended December 31, 1996. During fiscal year 1996
and the four months ended December 31, 1996, each member of the Board
participated in at least 75% of all Board and applicable committee meetings held
during the period.
The Board of Directors has established audit and compensation committees to
devote attention to specific subjects and to assist it in the discharge of its
responsibilities. The functions of those committees, their current members and
the number of meetings held during fiscal year 1996 and the four months ended
December 31, 1996 are described below. The Board of Directors does not have a
standing nominating committee.
Audit Committee. The Board of Directors has a standing Audit Committee
which provides the opportunity for direct communications between the independent
public accountants and the Board. The Audit Committee meets with the certified
public accountants periodically to review their effectiveness during the annual
audit program and to discuss the Company's internal control policies and
procedures. The members of the Audit Committee are Messrs. Christopher, Grammer
and White. The Audit Committee met one time during fiscal year 1996. The Audit
Committee did not meet during the four months ended December 31, 1996.
Compensation Committee. The Board of Directors also has a standing
Compensation Committee (the "Compensation Committee") that provides
recommendations to the Board of Directors regarding salaries and
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<PAGE> 8
other compensation of executive officers of the Company. Prior to the Company's
October 1996 initial public offering (the "Offering"), there was no Compensation
Committee. Rather, Mr. Christopher performed the functions of the Compensation
Committee. Subsequent to the Offering and prior to November 6, 1996, Messrs.
Grammer, Craig and Coonfield comprised the Compensation Committee. Subsequent to
November 6, 1996, Messrs. Coonfield and White comprised the Compensation
Committee. The Compensation Committee met one time during the four months ended
December 31, 1996.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Act"), requires the Company's directors, executive officers and beneficial
owners of more than 10% of the Common Stock to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Based solely upon its review of the copies of such forms received by it
and its knowledge that no Form 5s were required from reporting persons, the
Company believes that, except as disclosed below, all such reports were
submitted on a timely basis during fiscal year 1996 and the four months ended
December 31, 1996. In April 1997, Messrs. Coonfield and Grammer, directors of
the Company, each amended his Form 3 on file with the Commission to add one
transaction.
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and long-term
compensation for services in all capacities to the Company for fiscal years
1994, 1995, and 1996 and during the four months ended December 31, 1996, with
respect to those persons who were during fiscal year 1996 and the four months
ended December 31, 1996 (i) the Chief Executive Officer and (ii) the other two
executive officers of the Company (collectively, with the Chief Executive
Officer, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
--------------------------------------------- SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
---------------------------- ------ -------- -------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
M. Tom Christopher 1994 $120,000 $512,000 -- -- $ 25,022(1)
Chairman of the Board of 1995 120,000 898,731 -- -- 352,163(2)
Directors and Chief 1996 190,000 719,419 -- -- 376,844(3)
Executive Officer 1996(4) 80,000 -- -- -- 81,250(5)
Tilmon J. Reeves 1994 101,000 225,000 -- -- 2,982(6)
President and Chief 1995 125,000 108,335 -- 245,708(7) 2,310(6)
Operating Officer 1996 125,000 85,000 $3,726,182(8) 390,707 2,375(6)
1996(4) 41,667 15,000 -- -- --
Richard R. Wadsworth 1994 110,000 96,000 -- -- 1,675(6)
Senior Vice President -- 1995 110,000 70,000 -- 92,140(7) 2,262(6)
Finance, Chief Financial 1996 110,000 70,000 1,464,572(8) 153,567 2,375(6)
Officer, and Secretary 1996(4) 36,664 15,000 -- -- 583(6)
</TABLE>
- ---------------
(1) Consists of (i) matching contributions of $2,975 to the Company's 401(k)
Savings Plan for Mr. Christopher and (ii) life insurance premiums of $22,047
paid on Mr. Christopher's behalf. Does not include any contingent payments
to Mr. Christopher under the Settlement (defined under "Compensation
Committee Interlocks and Insider Participation in Compensation Decisions"
below) made subsequent to fiscal year 1994. See "Compensation Committee
Interlocks and Insider Participation in Compensation Decisions."
(2) Consists of (i) contingent payments in the amount of $325,000 received by
Mr. Christopher under the Settlement during fiscal year 1995, (ii) life
insurance premiums of $25,500 paid on Mr. Christopher's
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<PAGE> 9
behalf, and (iii) matching contributions of $1,663 to the Company's 401(k)
Savings Plan for Mr. Christopher.
(3) Consists of (i) contingent payments in the amount of $325,000 received by
Mr. Christopher under the Settlement during fiscal year 1996, (ii) life
insurance premiums of $48,397 paid on Mr. Christopher's behalf, and (iii)
matching contributions of $3,447 to the Company's 401(k) Savings Plan for
Mr. Christopher.
(4) Represents the four months ended December 31, 1996.
(5) Consists of contingent payments received by Mr. Christopher under the
Settlement during the four months ended December 31, 1996.
(6) Consists of matching contributions to the Company's 401(k) Savings Plan.
(7) The option covering these shares was rescinded on June 12, 1996.
(8) Represents the difference between the exercise price and the fair market
value of the Common Stock underlying the stock options on June 26, 1996, the
date of exercise, of the stock options granted in fiscal year 1996. See
"Executive Compensation -- Stock Option Exercises."
Stock Options
The following table sets forth certain information concerning options
granted in fiscal year 1996 to the Company's Named Executive Officers. Messrs.
Reeves and Wadsworth fully exercised these options on June 26, 1996. The Company
did not grant any options to the Company's Named Executive Officers in the four
months ended December 31, 1996. No options for the purchase of Common Stock were
outstanding during the four months ended December 31, 1996 and none are
currently outstanding. The Company has no outstanding stock appreciation rights
and granted no stock appreciation rights during fiscal year 1996 or the four
months ended December 31, 1996.
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR FAIR VALUE
OPTIONS EMPLOYEES IN BASE PRICE ON DATE OF
NAME GRANTED FISCAL YEAR ($/SH) GRANT ($/SH) EXPIRATION DATE
---- ---------- ------------ ----------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
Tilmon J. Reeves........................ 390,707 71.8% 0$.01 7.$45 December 31, 2004
Richard R. Wadsworth.................... 153,567 28.2% 0.01 8.63 June 12, 2005
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
TERM
------------------------------------
NAME 5% ($) 10% ($) 0% ($)
---- ---------- ---------- ----------
<S> <C> <C> <C>
Tilmon J. Reeves........................ $4,511,648 $6,859,530 $2,910,665
Richard R. Wadsworth.................... 2,054,414 3,123,413 1,325,732
</TABLE>
Stock Option Exercises
The following table sets forth certain information concerning options
exercised in fiscal year 1996 by certain of the Company's Named Executive
Officers. Messrs. Reeves and Wadsworth fully exercised these options on June 26,
1996.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
NAME SHARES ACQUIRED ON EXERCISE VALUE REALIZED ($)
---- --------------------------- ------------------
<S> <C> <C>
Tilmon J. Reeves........................ 390,707(1) $3,726,182
Richard R. Wadsworth.................... 153,567(2) 1,464,572
</TABLE>
- ---------------
(1) The Company withheld 156,283 of these shares in satisfaction of its
withholding obligations with respect to the exercise of these options.
(2) The Company withheld 61,427 of these shares in satisfaction of its
withholding obligations with respect to the exercise of these options.
6
<PAGE> 10
Employment Contracts
Mr. Christopher has an employment agreement with the Company that provides
for an initial annual base salary of at least $125,000 and bonuses determined by
the Compensation Committee pursuant to the Company's Annual Incentive
Compensation Plan and otherwise. Mr. Christopher's employment agreement contains
(i) a confidentiality provision that prohibits disclosure of the Company's
proprietary information and (ii) a covenant not to compete that provides upon
Mr. Christopher's termination of employment with the Company for any reason, Mr.
Christopher shall not engage, directly or indirectly, in the air logistics,
charter brokerage, on-demand, or scheduled carriage business under an FAA Part
121 or Part 135 certificate for five years following such termination. The
employment agreement may be terminated by either party with or without cause. If
the employment agreement is terminated by the Company without a material breach
by Mr. Christopher, he is entitled to six months of compensation at his
then-current salary.
Messrs. Reeves and Wadsworth have employment agreements with the Company
that provide for an initial annual base salary of at least $115,000 and
$110,000, respectively, and annual bonuses determined by the Compensation
Committee pursuant to the Company's Annual Incentive Compensation Plan and
otherwise. These employment agreements provide that Mr. Reeves and Mr. Wadsworth
are prohibited from engaging in the air logistics, charter brokerage, on-demand,
or scheduled carriage business under an FAA Part 121 or Part 135 certificate for
three and two years, respectively, following termination of employment. These
employment agreements also contain a confidentiality provision that prohibits
disclosure of the Company's proprietary information. These employment agreements
may be terminated by either party thereto with or without cause. Mr. Reeves'
employment agreement provides that if he is terminated by the Company without
material breach by Mr. Reeves, he shall be entitled to 100% of his then-current
salary in the year following termination and 50% of such annual compensation in
both the second and third year following termination. Mr. Wadsworth's employment
agreement provides that if he is terminated by the Company without material
breach by Mr. Wadsworth, he shall be entitled to 100% of his then-current salary
in the year following termination and 50% of such annual compensation in the
second and third year following termination.
Compensation of Directors
Pursuant to the Company's Bylaws, the members of the Board of Directors may
be compensated in a manner and at a rate determined from time to time by the
Board of Directors. Directors who are employees of the Company do not receive
additional compensation for service as a director. Under the Company's Omnibus
Securities Plan, directors who are not employees of the Company may receive
shares of Common Stock in an amount equal to their net annual retainer (which is
currently $10,000).
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed of independent directors who are not
employees of the Company and who qualify as disinterested persons for purposes
of Section 16(b) under the Act. Since the Offering, the Compensation Committee
has been, and continues to be, responsible for (i) overseeing and recommending
to the Board of Directors compensation for the Named Executive Officers starting
with fiscal year 1997 and (ii) administering the Kitty Hawk, Inc. Amended and
Restated Omnibus Securities Plan and the Kitty Hawk, Inc. Amended and Restated
Annual Incentive Compensation Plan. In addition, the Compensation Committee is
responsible for reviewing and recommending to the Board of Directors policies
and programs for the development of management personnel and management
structure and organization. Prior to the Offering, Mr. Christopher determined
executive officer compensation.
Compensation Philosophy
The Compensation Committee believes that compensation for the Company's
employees, including the Named Executive Officers, must be in amounts sufficient
to attract, retain and motivate employees, while at the same time maintaining a
reasonable relationship to the Company's financial performance. Moreover, the
Compensation Committee believes that compensation decisions should foster career
opportunities for, and aid
7
<PAGE> 11
the development of, employees and encourage and reward employees who put the
Company's interests ahead of their own.
The Company's compensation philosophy is based on the following general
principles:
- Achieve "above market" compensation levels for employees through bonuses
(based on individual and Company performance).
- Encourage employees' investment in Common Stock to align employees' and
stockholders' interests in maximizing value.
- Set bonuses, as a percentage of total compensation, to reflect an
employee's level of responsibility and contribution to the Company's
financial performance.
Compensation of the Chairman of the Board and Chief Executive Officer and the
Other Executive Officers
Prior to the Offering, the Company entered into employment agreements with
Messrs. Christopher, Reeves, and Wadsworth. These employment agreements
establish the base salaries of Messrs. Christopher, Reeves, and Wadsworth and
provide for bonuses determined by the Compensation Committee. See "Executive
Compensation -- Employment Contracts."
Fiscal year 1996 bonuses for Messrs. Christopher, Reeves, and Wadsworth
were determined prior to the Offering by Messrs. Christopher and Reeves based on
subjective factors. For the four months ended December 31, 1996, bonuses for
Messrs. Reeves and Wadsworth were determined by Messrs. Christopher and Reeves
based on subjective factors.
In fiscal year 1996, the Board of Directors approved grants of stock
options to Messrs. Reeves and Wadsworth. In determining the number of shares to
grant under these stock options, the Board of Directors took into account the
Company's performance, employee morale, customer satisfaction, the Company's
desire to retain Messrs. Reeves and Wadsworth, and previous compensation
negotiations with Messrs. Reeves and Wadsworth. No specific weights were
assigned to any of these factors.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits the tax deduction of a
public company to $1,000,000 for compensation paid to its chief executive
officer or any of its four other highest paid officers. The Company has not
adopted a policy with respect to executive compensation in excess of $1,000,000
a year.
Ted J. Coonfield
Lewis S. White
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
Prior to the Offering, Mr. Christopher determined executive officer
compensation. Subsequent to the Offering and prior to November 6, 1996, Messrs.
Grammer, Craig and Coonfield comprised the Compensation Committee. Subsequent to
November 6, 1996, Messrs. Coonfield and White comprised the Compensation
Committee. None of the foregoing individuals serving on the Compensation
Committee are or have been officers or employees of the Company or its
subsidiaries.
Mr. Craig, a director of the Company, is of counsel to Burke, Wright &
Keiffer, P.C., counsel to the Company. During fiscal year 1996 and the four
months ended December 31, 1996, the Company paid an aggregate of approximately
$506,000 to Burke, Wright & Keiffer, P.C. for legal services rendered.
In August 1996, the Company acquired an undivided one-third interest in two
Falcon 20 jet aircraft with two co-owners (the "Co-Owners") who are unaffiliated
with the Company and who each hold a one-third interest in such aircraft. An
interim acquisition note in the amount of $1,700,000, covering the purchase
price
8
<PAGE> 12
and necessary maintenance, was executed by Mr. Christopher and one of the
Co-Owners. In November 1996, the Company and the Co-Owners each acquired an
undivided one-third interest in two additional Falcon 20 jet aircraft using the
proceeds of a new five-year, $4.3 million term loan that also repaid the interim
loan on the first two aircraft.
During fiscal year 1996 and the four months ended December 31, 1996, Mr.
Grammer, a director of the Company, subleased the Company's present facility
(the "Facility") at Dallas/Fort Worth International Airport to the Company.
During such period, the Company paid an aggregate of approximately $339,000 to
Mr. Grammer in lease payments. In February 1997, the Company purchased the lease
to the Facility from Mr. Grammer for approximately $1.76 million.
The Company believes that the terms of each transaction discussed above
were as favorable to the Company as would have been obtainable from unaffiliated
parties under similar circumstances.
Under the terms of a litigation settlement (the "Settlement") among several
unaffiliated third parties and the Company in fiscal year 1995, Mr. Christopher
received rights to certain contingent future payments. During fiscal year 1996
and the four months ended December 31, 1996, Mr. Christopher received aggregate
payments of $406,250 pursuant to the Settlement.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common
Stock over the period commencing October 10, 1996 (the first day after the
effective date of the Offering) and ending December 31, 1996, with the Nasdaq
Market Value Index and the Media General Air Freight Industry Group Index. Each
index assumes $100 invested at the close of trading on October 10, 1996 and
reinvestment of dividends. The Company believes that the information provided
has only limited relevance due to the very short period of time during which the
Company has been public.
<TABLE>
<CAPTION>
Media General Air
Measurement Period Freight Industry Nasdaq Market
(Fiscal Year Covered) Kitty Hawk, Inc. Group Value Index
<S> <C> <C> <C>
10/10/96 100.00 100.00 100.00
10/31/96 81.48 100.11 98.85
11/30/96 88.89 110.76 104.99
12/31/96 74.07 112.21 104.75
</TABLE>
<TABLE>
<CAPTION>
10/10/96 10/31/96 11/30/96 12/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Kitty Hawk, Inc......................... $100.00 $ 81.48 $ 88.89 $ 74.07
Media General Air Freight Industry
Group................................. 100.00 100.11 110.76 112.21
Nasdaq Market Value Index............... 100.00 98.85 104.99 104.75
</TABLE>
9
<PAGE> 13
PROPOSAL II
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Ernst & Young LLP as the independent public accountants of the Company
for fiscal year 1997, subject to stockholder ratification. Representatives of
Ernst & Young LLP are expected to be present at the Annual Meeting with the
opportunity to make a statement if they so desire and to be available to respond
to appropriate questions.
The affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the Annual Meeting and entitled to vote is
required to ratify the appointment of Ernst & Young LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF ERNST & YOUNG LLP.
STOCKHOLDER PROPOSALS
Pursuant to the rules of the Commission, in order for stockholder proposals
to receive consideration for inclusion in the Company's Proxy Statement for the
1998 Annual Meeting of Stockholders, such proposals must be received by the
Company at its principal executive offices no later than December 17, 1997. Such
proposals should be directed to Kitty Hawk, Inc., 1515 West 20th Street,
Dallas/Fort Worth International Airport, Texas 75261, Attention: Chief Executive
Officer.
GENERAL
The 1996 Annual Report to Stockholders, which includes the Company's
Transition Report on Form 10-K/A, has been mailed to the stockholders with this
mailing. The Annual Report does not form any part of the material for the
solicitation of proxies.
The expense of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, directors, officers and employees of the
Company may solicit proxies personally or by telephone or telegram. The Company
may request brokers, dealers or other nominees to send proxy materials to and
obtain proxies from their principals and the Company may reimburse such persons
for their reasonable expenses.
OTHER BUSINESS
Management knows of no other matter that will come before the Annual
Meeting. However, if other matters do come before the Annual Meeting, the proxy
holders will vote in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ M. TOM CHRISTOPHER
M. TOM CHRISTOPHER
Chairman and Chief Executive Officer
April 16, 1997
10
<PAGE> 14
APPENDIX
REVOCABLE PROXY
KITTY HAWK, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) M. Tom Christopher and Richard R.
Wadsworth, or either of them, with full power of substitution and
resubstitution, as proxies of the undersigned, with all the powers that the
undersigned would possess if personally present, to cast all votes that the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
Kitty Hawk, Inc. (the "Company") to be held on May 30, 1997, at the executive
offices of the Company at 1515 West 20th Street, Dallas/Fort Worth
International Airport, Texas 75261 at 10:00 a.m., local time, and any and all
adjournments, continuations and postponements thereof (the "Annual Meeting"),
including (without limiting the generality of the foregoing) to vote and act as
follows on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL
NOMINEES FOR DIRECTOR AND FOR THE RATIFICATION OF ERNST & YOUNG LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL YEAR 1997. THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS
GIVEN, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS PRESENTED.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
-----------
SEE REVERSE
SIDE
-----------
-- FOLD AND DETACH HERE --
<PAGE> 15
PLEASE MARK [X]
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
1. ELECTION OF THREE CLASS III DIRECTORS.
[ ] FOR all nominees listed to the right (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed to the right
Nominees: M. Tom Christopher, James R. Craig and Robert F. Grammer
--------------------------------------------------------------------------
In the event the undersigned wishes to withhold authority to vote for any
particular nominee listed above, please so indicate by clearly writing the
name of any such nominee on the line above.
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
2. RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR FISCAL YEAR 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY FORM PROMPTLY USING THE
ENCLOSED SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING IN THE
UNITED STATES.
Please sign exactly as your name appears on your stock certificate. If shares
are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such.
If shares are held of record by a corporation, please sign in full corporate
name by president or other authorized officer. If shares are held of record by
a partnership, please sign in full partnership name by an authorized signatory.
Signature Signature Date
------------------------- ------------------------- ------
-- FOLD AND DETACH HERE --
Dear Stockholder(s):
Enclosed you will find material relative to the Company's 1997 Annual Meeting
of Stockholders. The Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting, as summarized on the attached
proxy card.
Whether or not you expect to attend the Annual Meeting, please complete and
return promptly the attached proxy card in the accompanying envelope, which
requires no postage if mailed in the United States. As a Stockholder, please
remember that your vote is important to us. We look forward to hearing from you.
KITTY HAWK, INC.
