DEF: flyExclusive Seeks Shareholder Approval for Equity Plan Boost

flyExclusive, Inc. is calling its stockholders to a virtual annual meeting on December 30, 2025, to vote on director elections, significant increases in equity incentive and employee stock purchase plan shares, and auditor ratification.

Summary

• The Annual Meeting of Stockholders will be held virtually on Tuesday, December 30, 2025, at 10:00 a.m. Eastern Time.
• Stockholders will vote on the election of seven directors: Gary Fegel, Michael S. Fox, Frank B. Holding Jr., Gregg S. Hymowitz, Peter B. Hopper, Thomas James Segrave Jr., and Thomas James Segrave, Sr.
• A proposal seeks approval to amend the 2023 Equity Incentive Plan, increasing the number of shares reserved from 6,000,000 to 15,000,000.
• Another proposal requests approval to amend the Employee Stock Purchase Plan, increasing the number of shares reserved from 1,500,000 to 2,500,000.
• Stockholders will also vote to ratify the appointment of Elliott Davis PLLC as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The Board of Directors unanimously recommends a vote 'FOR' all proposals.
• As of November 17, 2025, 20,757,668 shares of Class A common stock and 59,930,000 shares of Class B common stock were outstanding and entitled to vote.
• The closing price of the Company's Class A Common Stock on the NYSE American on November 17, 2025, was $3.21.
• No shares remained available for future grant under the 2023 Equity Incentive Plan as of November 17, 2025, and 1,200,000 executive options will be terminated if the amendment is not approved.
• Total fees billed by Elliott Davis PLLC were $1,985,000 in 2024 and $2,000,000 in 2023, comprising audit and tax services.

Sentiment

Score: 5

Explanation: The filing presents a mix of standard corporate governance proposals and strategic moves. While efforts to incentivize employees and improve market liquidity are positive, the significant potential for shareholder dilution from expanded equity plans, the 'controlled company' status, and the extensive related-party transactions introduce notable concerns and complexities, leading to a neutral to slightly cautious sentiment.

Positives

• The Board unanimously recommends approval for all proposals, indicating strong internal alignment on strategic and governance matters.
• The proposed increase in shares for the 2023 Equity Incentive Plan and Employee Stock Purchase Plan aims to attract, motivate, and retain high-caliber talent, aligning employee interests with stockholders.
• The company believes that inclusion on the Russell 2000 Index, facilitated by the early lock-up waiver, will enhance stock liquidity and support future capital raising efforts.
• The Audit and Risk Committee has affirmed the independence of Elliott Davis PLLC as the independent registered public accounting firm.
• All current directors maintained strong attendance, participating in at least 75% of Board and committee meetings during the fiscal year ended December 31, 2024.

Negatives

• The proposed increase in shares for the 2023 Equity Incentive Plan (from 6,000,000 to 15,000,000) and the Employee Stock Purchase Plan (from 1,500,000 to 2,500,000) represents significant potential dilution for existing shareholders.
• The termination of 1,200,000 executive options if the 2023 Equity Incentive Plan amendment is not approved highlights a reliance on this approval for executive compensation and retention.
• The company's status as a 'controlled company' allows it to opt out of certain NYSE American corporate governance requirements, such as having a majority independent board and fully independent compensation and nominating committees, which may raise concerns about independent oversight.
• The Tax Receivable Agreement obligates the company to pay 85% of certain tax savings to existing equityholders, with a risk of making payments in advance of actual tax benefit realization or payments exceeding actual savings, without reimbursement for overpayments.
• The early waiver of the three-year lock-up period for the Sponsor's shares and warrants, effective July 25, 2025, could lead to increased selling pressure on the Class A common stock.

Risks

• Significant potential dilution of existing shareholder value due to the proposed increase in shares reserved for the 2023 Equity Incentive Plan (150% increase) and the Employee Stock Purchase Plan (66.7% increase).
• Failure to approve the 2023 Equity Incentive Plan amendment could result in the termination of 1,200,000 executive options, potentially impairing the company's ability to attract and retain qualified executive talent.
• The Tax Receivable Agreement (TRA) carries a risk of the company being required to make payments to existing equityholders that are greater than or less than actual tax savings, and potentially making payments years in advance of actual tax benefit realization, with no reimbursement for excess payments.
• Operating as a 'controlled company' and relying on exemptions from NYSE American corporate governance standards may lead to perceptions of weaker independent oversight and potential conflicts of interest.
• The early waiver of the lock-up period for a significant shareholder (Sponsor) could introduce increased selling pressure and volatility in the company's stock price.
• Extensive related party transactions, including leases, loans, and aircraft sales with entities controlled by management or directors, could present ongoing conflicts of interest, despite audit committee approval.

Future Outlook

The company aims to enhance its ability to attract and retain high-caliber employees and service providers by significantly increasing the shares available under its equity incentive and employee stock purchase plans. It anticipates that inclusion on the Russell 2000 Index will boost stock liquidity and facilitate future capital raising efforts, including access to its at-the-market sales program. Additionally, executive officers Matthew Lesmeister, Bradley G. Garner, and Michael Guina are slated to receive further stock option grants in September 2025 and 2026, subject to Board approval, and are eligible for a long-term incentive plan.

Management Comments

• We believe that the effective use of long-term equity incentives is essential to attract, motivate, and retain employees and other service providers, to further align participants interests with those of our stockholders, and to provide participants incentive compensation opportunities that are competitive with those offered by other companies in the same industry and locations as ours.
• Without approval of the 2023 Plan Amendment, the Board believes that the Company's ability to attract and retain qualified directors, employees and service provides will be impaired.
• The ESPP Amendment will allow the Company to continue to provide stock ownership opportunity to employees in an advantageous manner, thereby motivating, attracting and retaining talented employees and creating stockholder value.
• We believe that inclusion on the Russell 2000 Index will provide greater volume and liquidity for the Class A common stock, which benefits are expected to benefit the Company's capital raising efforts, including its access to its at-the-market sales program.
• The Company also believes that the benefits of the lock-up have largely been achieved as is evidenced by EG Sponsor LLC and its affiliates continued significant investment in and lending to the Company during 2024 and 2025, which activity indicates EG Sponsor LLC's continued interest in and support of the Company.

Industry Context

The company operates within the competitive aviation industry, specifically private jet charter and related services. The emphasis on expanding equity incentive and employee stock purchase plans reflects a common industry strategy to attract and retain skilled personnel in a talent-driven sector. The pursuit of Russell 2000 Index inclusion underscores the importance of market visibility and liquidity for growth-oriented companies in this capital-intensive industry.

Management Changes

Corporate Governance

Related Party Transactions

• LGMV and its subsidiaries (96% owned by Thomas James Segrave Jr., 4% by trusts for his children) engaged in significant dealings: $1,542,000 in fuel purchases in 2024 ($2,027,000 in 2023); $720,000 annually for headquarters and two hangar leases; $249,600 in 2024 ($205,000 in 2023) for Hangar 3 lease; $540,000 annually for Hangar 4 lease; $30,000 annually for a house lease; $189,704 in 2024 ($173,838 in 2023) for automobile leases; and the company is a guarantor for term notes of Sea Jay, LLC ($11.9M) and Kinston Jet Center, LLC ($5.28M and $1.8M).
• In 2023, flyExclusive sold 5 trainer aircraft to Crystal Coast Training, LLC (a wholly owned subsidiary of LGMV) for $2,481,840 and subsequently rented them back for $67,000.
• Juliette Lima Bravo, LLC (Thomas Segrave, Jr.'s mother owns ~33%) received $105,000 in 2024 ($441,300 in 2023) for aircraft lease payments; the aircraft was sold on April 2, 2024.
• DH Aviation, LLC (50% owned by director Peter Hopper until September 25, 2023) received $199,375 in aircraft lease payments in 2023 (Mr. Hopper elected flight hour credits); LGM repurchased the 50% interest for $1,650,000.
• PHBL, LLC (50% owned by director Peter Hopper) received $414,996 annually in 2024 and 2023 for aircraft lease payments.
• EG Sponsor LLC (an affiliate of directors Gregg S. Hymowitz and Gary Fegel) was involved in numerous promissory notes with the company, all repaid by December 31, 2024. On March 21, 2025, a $3,946,935 promissory note was converted into 4,227 shares of Series B Preferred Stock and warrants for 1,268,100 shares of Class A Common Stock. The Sponsor also purchased 4,333,333 private placement warrants for $6,500,000.
• EnTrust Emerald (Cayman) LP (an affiliate of directors Gregg S. Hymowitz and Gary Fegel) purchased $25 million in Series A Non-Convertible Redeemable Preferred Stock and a warrant in March 2024, and $20.4 million in Series B Convertible Preferred Stock and warrants in August 2024.
• BTIG, LLC (underwriter) had its fee agreement amended on December 27, 2023, to receive $500,000 cash and 300,000 shares of Class A common stock, instead of $7.9 million cash, and was owed a $1.5 million 'Success Fee'.

Stakeholder Impact

• Shareholders face potential dilution from the significant increase in shares reserved for equity incentive and employee stock purchase plans, but may benefit from enhanced liquidity if the company achieves Russell 2000 Index inclusion.
• Employees and executive officers stand to benefit from expanded equity compensation opportunities, which are intended to improve retention and motivation.
• The 'controlled company' status and extensive related-party transactions may raise concerns among minority shareholders regarding potential conflicts of interest and the independence of governance.
• Creditors are impacted by the company's ongoing capital raising activities, including secured notes and preferred stock issuances, which affect the company's capital structure and debt obligations.
• The company's focus on talent retention and market liquidity indirectly supports long-term stability, which could benefit customers and suppliers.

Next Steps

• Stockholders will vote on the proposed amendments to the 2023 Equity Incentive Plan and Employee Stock Purchase Plan at the Annual Meeting on December 30, 2025.
• If approved, 1,200,000 executive options that were provisionally granted will be validated, and future grants of 800,000 stock options each are planned for Matthew Lesmeister, Bradley G. Garner, and Michael Guina on September 26, 2025, and September 26, 2026, subject to Board approval.
• The Board is expected to approve a Long-Term Incentive Plan (LTIP) for executive officers, under which they are eligible to receive up to $250,000 annually.
• Preliminary voting results will be announced at the Annual Meeting, with final results reported in a Current Report on Form 8-K within four business days.
• The Audit and Risk Committee will consider stockholder feedback regarding the ratification of Elliott Davis PLLC for future auditor appointments.
• The Series B Preferred Stock will convert on the earlier of December 31, 2025, or the closing of a subsequent capital raise of at least $25,000,000.
• The company is actively seeking to have its Class A common stock listed on the Russell 2000 Index.

Key Dates

Recommendation

The company is actively pursuing strategies to incentivize employees and enhance market liquidity, which are generally positive. However, the substantial potential for dilution from the proposed increase in equity compensation share pools, the implications of its 'controlled company' status on governance, and the extensive related-party transactions introduce significant uncertainties and potential conflicts of interest. While recent capital raises provide funding, the terms of the Tax Receivable Agreement and preferred stock issuances warrant careful monitoring. A 'hold' recommendation is appropriate to observe how these factors evolve and their ultimate impact on the company's financial performance and shareholder value.

Keywords

flyExclusive, FLYX, proxy statement, annual meeting, equity incentive plan, employee stock purchase plan, director election, corporate governance, executive compensation, related party transactions, stock options, dilution, Russell 2000 Index, SEC filing