SCHEDULE 14A
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 (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
Vanguard Airlines, 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)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
__________________________________________________________
2) Aggregate number of securities to which transaction
applies:
__________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
__________________________________________________________
4) Proposed maximum aggregate value of transaction:
__________________________________________________________
[ ] 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>
VANGUARD AIRLINES, INC.
30 N.W. Rome Circle, Terminal B
Kansas City International Airport
Kansas City, Missouri 64153
________________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On March 3, 1997
________________________________
NOTICE IS HEREBY GIVEN that a Special Meeting of
Stockholders of Vanguard Airlines, Inc., a Delaware corporation
(the "Company"), will be held on Monday, March 3, 1997, at 10:00
a.m., Central Daylight Time, at 7000 Squibb Road, 3rd Floor,
Mission, Kansas 66202, and thereafter as it may from time to time
be adjourned (the "Special Meeting"), for the following purposes:
1. To approve an amendment to the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of the Company's capital stock from
16,000,000 shares to 51,000,000 shares and to increase the
number of authorized shares of the Company's common stock,
par value $.001 per share (the "Common Stock"), from
15,000,000 shares to 50,000,000 shares; and
2. To consider and act upon any other matters which
may properly come before the Special Meeting of Stockholders
or any adjournment thereof.
The foregoing matters are more fully described in the
accompanying Proxy Statement.
In accordance with the provisions of the Bylaws of the
Company, the Board of Directors has fixed the close of business
on February 10, 1997, as the record date for the determination of
the holders shares of Common Stock of the Company, entitled to
notice of, and to vote at, the Special Meeting of Stockholders
and any adjournment thereof.
You are cordially invited to attend the Special
Meeting. IF THERE IS A POSSIBILITY THAT YOU MAY BE UNABLE TO
ATTEND, PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING PROXY
PROMPTLY SO THAT YOUR SHARES MAY BE REPRESENTED AT THE SPECIAL
MEETING. A return envelope is enclosed for your convenience. If
you are able to attend the meeting and wish to vote your shares
in person, your proxy will not be used.
BY ORDER OF THE BOARD OF DIRECTORS,
Brian S. Gillman
Vice President, General
Counsel and Secretary
Kansas City, Missouri
February 18, 1997
<PAGE>
VANGUARD AIRLINES, INC.
30 N.W. Rome Circle, Terminal B
Kansas City International Airport
Kansas City, Missouri 64153
____________________________
PROXY STATEMENT
____________________________
SPECIAL MEETING
OF STOCKHOLDERS
MARCH 3, 1997
____________________________
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Vanguard
Airlines, Inc., a Delaware corporation (the "Company"), for use
at a Special Meeting of Stockholders to be held on Monday, March
3, 1997, commencing at 10:00 a.m., Central Standard Time, at 7000
Squibb Road, Third Floor, Mission, Kansas 66202, and all
adjournments and postponements thereof (the "Special Meeting").
The Company anticipates mailing this Proxy Statement, the
accompanying form of proxy and the Notice of Special Meeting of
Stockholders to the holders of record of outstanding shares of
Common Stock, par value $.001 per share, of the Company (the
"Common Stock") as of February 10, 1997, on or about February
18, 1997.
Only the holders of record of shares of Common Stock as of
the close of business on February 10, 1997 (the "Record Date")
are entitled to vote on the matters to be presented at the
meeting, either in person or by proxy. Holders of shares of
Common Stock are entitled to one vote per share outstanding in
their names on the Record Date with respect to such matters. At
the close of business on the Record Date, there were outstanding
and entitled to vote a total of 9,984,952 shares of Common Stock,
constituting all of the outstanding voting securities of the
Company.
You are requested to complete, date and sign the
accompanying form of proxy and return it promptly in the enclosed
postage prepaid envelope. Such proxy may be revoked at any time
prior to its exercise by written notice of revocation delivered
to the Secretary of the Company. Attendance at the Special
Meeting will not in and of itself constitute a revocation of a
proxy, but your proxy will not be used if you attend the Special
Meeting and prefer to vote in person. The persons designated as
proxies were selected by the Board of Directors and are officers
or directors of the Company. Proxies duly executed and received
in time for the Special Meeting will be voted in accordance with
stockholders' instructions. If no instructions are indicated,
such shares will be voted as follows:
1. To approve an amendment to the Company's
Restated Certificate of Incorporation to increase the
number of authorized shares of the Company's capital
stock from 16,000,000 shares to 51,000,000 shares and
to increase the number of authorized shares of the
Company's Common Stock from 15,000,000 shares to
50,000,000 shares.
2. In the discretion of the proxy holder as to
any other matter coming before the Special Meeting.
<PAGE>
SOLICITATION OF PROXIES
The solicitation of proxies for the Special Meeting is being
made by the Company's Board of Directors. The Company will bear
all costs of such solicitation, including the cost of preparing
and mailing this Proxy Statement and the enclosed form of proxy.
After the initial mailing of this Proxy Statement, proxies may be
solicited in person or by telephone or telegraph by directors and
officers of the Company who will not receive compensation for
their soliciting activities. Brokerage houses and other nominees
will solicit proxies or authorizations from beneficial owners and
will be reimbursed for their reasonable expenses of forwarding
proxy materials to beneficial owners. The Company will bear all
of the costs of the solicitation.
QUORUM REQUIREMENTS
The presence in person or by proxy of stockholders holding a
majority of the outstanding shares of Common Stock is required
for a quorum to transact business at the Special Meeting, but if
a quorum should not be present, the Special Meeting may be
adjourned from time to time until a quorum is obtained. Shares of
Common Stock represented by a proxy that directs that the shares
be voted to abstain or to withhold a vote on any matter will be
counted in determining whether a quorum is present.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The table below sets forth certain information, as of
January 31, 1997 (unless otherwise indicated below), with respect
to the beneficial ownership of the issued and outstanding shares
of Common Stock by (i) each person known to the Board of
Directors to own beneficially 5% or more of the aggregate shares
of Common Stock outstanding, (ii) each director, (iii) the most
highly compensated executive officers of the Company as to whom
the total salary and bonuses for the fiscal year ended
December 31, 1996 exceeded $100,000, and (iv) the executive
officers and directors of the Company as a group. All
information with respect to beneficial ownership has been
furnished by the respective directors, officers or 5% or more
shareholders, as the case may be.
Amount and Nature Percent of
Name and Address of of Beneficial Shares
Beneficial Owner Ownership/1/ Outstanding/2/
Entities affiliated with Hambrecht
& Quist Group /3/ 4/ 8,144,603 60.8
William R. Hambrecht /3//5/ 8,239,603 61.5
John P. Tague /6/ 258,203 2.5
Kenneth J. Wagnon /7/ 1,616,604 14.9
Daniel M. Carney /8/ 994,688 9.5
Robert J. McAdoo /9/ 413,935 4.1
Ronald L. McClellan /10/ 87,500 *
Richard D. Pearson /11/ 25,000 *
Edmund H. Shea, Jr. /12/ 90,000 *
Robert J. Spane /13/ 25,000 *
All current directors and
executive officers as a
group (9 persons) /14/ 794,156 7.9
* Represents beneficial ownership of less than 1% of the
Common Stock of the Company.
/1/ Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission, which
generally attribute beneficial ownership of securities to
persons who possess sole or shared voting power and/or
investment power with respect to those securities. The
persons or entities named in this table have sole voting and
investment power with respect to all shares shown as
beneficially owned by them, except as noted below. The
amount of shares reflected in the table includes options and
warrants that are exercisable into shares of Common Stock
within 60 days of January 31, 1997.
/2/ Percentage ownership calculations are based on 9,984,952
shares of Common Stock outstanding.
<PAGE>
/3/ According to the Form 4s filed with the Securities and
Exchange Commission by the entities affiliated with
Hambrecht & Quist Group (the "H&Q Entities") and William R.
Hambrecht, the business address for each of the H&Q Entities
and William R. Hambrecht is the office of Hambrecht & Quist
LLC, One Bush Street, San Francisco, California, 94104.
/4/ According to the Form 4s, the H&Q Entities beneficially
owned 8,144,603 shares of Common Stock, which includes
3,408,354 shares of Common Stock issuable upon the exercise
of outstanding warrants.
/5/ According to Mr. Hambrecht's Form 4 he beneficially owns
9,699,046 shares of Common Stock, which includes 8,144,603
shares of Common Stock beneficially owned by the H&Q
Entities and 95,000 shares of common owned directly. Mr.
Hambrecht is Chairman of the Board of Hambrecht & Quist
Group and may be deemed to beneficially own the shares
beneficially owned by the H&Q Entities. Mr. Hambrecht
disclaims beneficial ownership of shares of Common Stock
held by the H&Q Entities, except as to the extent of his
pecuniary interest therein.
/6/ Includes 258,203 shares issuable pursuant to the exercise of
stock options issued to The Pointe Group, L.L.C., an
aviation and transportation consulting firm. Mr. Tague is a
principal of The Pointe Group, L.L.C. The option vests at
the rate of 1/8th of the shares subject to the option on
November 1, 1996. Only vested portion of the option is
currently exercisable. Mr. Tague's business address is
30 N.W. Rome Circle, Mezzanine Level, Kansas City
International Airport, Kansas City, Missouri 64153.
/7/ Includes 896,261 shares of Common Stock issuable upon the
exercise of outstanding warrants. Mr. Wagnon's business
address is 300 North Main, Suite 200, Wichita, Kansas 67202.
/8/ Includes 33,332 shares held by Danberry Associates, Ltd.
Mr. Carney owns forty percent of the outstanding stock of
Danberry Associates, Ltd. and may be deemed to beneficially
own such shares. Mr. Carney disclaims beneficial ownership
of such shares except to the extent of his pecuniary
interest in Danberry Associates, Ltd. Also includes 529,655
shares of Common Stock issuable pursuant to the exercise of
outstanding warrants. The business address for Mr. Carney
is 8100 East 22nd Street, North, Building 1900, Wichita,
Kansas 67226.
/9/ Includes 67,500 shares issuable pursuant to the exercise of
stock options and 4,476 shares of Common Stock issuable
upon the exercise of outstanding warrants. Mr. McAdoo's
address is 5050 W. 87th Street, Prairie Village, Kansas
66206.
/10/ Includes 2,500 shares issuable pursuant to the exercise of
stock options. Mr. McClellan's business address is 30 N.W.
Rome Circle, Mezzanine Level, Kansas City International
Airport, Kansas City, Missouri 64153.
/11/ Mr. Pearson's address is 12213 Sagamore Road, Leawood,
Kansas 66209.
/12/ Mr. Shea is a trustee of E&M R.P. Trust, which owns 35,000
shares. Mr. Shea is also the general partner of Siam
Partners II, a California limited partnership ("Siam"),
which owns 30,000 shares. Mr. Shea disclaims beneficial
ownership of the shares held by Siam, except to the extent
of his interest in Siam. Mr. Shea's business address is 655
Brea Canyon Road, Walnut, California, 91789.
/13/ Includes 25,000 shares of Common Stock issuable pursuant to
the exercise of stock options. Mr. Spane's address is 748
H. Avenue, Coronado, CA 92178.
/14/ Also includes an aggregate of 99,218 shares of Common Stock
that may be acquired upon the exercise of options granted
by the Company.
<PAGE>
APPROVAL OF PROPOSED AMENDMENT TO
THE RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED CAPITAL
GENERAL
On January 29, 1997, the Board of Directors unanimously
adopted a resolution setting forth a proposed amendment to the
Company's Restated Certificate of Incorporation. The proposed
amendment would increase the total number of authorized shares of
the Company's capital stock from 16,000,000 shares to 51,000,000
shares and increase the number of authorized shares of the
Company's Common Stock from 15,000,000 shares to 50,000,000
shares.
The text of the proposed amendment to the Restated
Certificate of Incorporation is set forth in Exhibit A hereto.
If the proposed amendment is adopted by the stockholders, the
Company will cause a Certificate of Amendment consistent with the
text of the amendment set forth in Exhibit A to be filed with the
office of the Delaware Secretary of State as promptly as
practicable after the Special Meeting. The description of the
proposed amendment contained herein is qualified in its entirety
by reference to Exhibit A.
DESCRIPTION OF THE AMENDMENT
The Company's Restated Certificate of Incorporation, as
currently in effect, provides that the Company is authorized to
issue 16,000,000 shares of capital stock, consisting of
15,000,000 shares of Common Stock, and 1,000,000 shares of
Preferred Stock, $.001 par value per share (the "Preferred
Stock"). On January 29, 1997, the Board of Directors authorized
an amendment to the Restated Certificate of Incorporation to
increase the authorized shares of the Company's capital stock
from 16,000,000 shares to 51,000,000 shares and increase the
number of authorized shares of the Company's Common Stock from
15,000,000 shares to 50,000,000 shares. The stockholders are
being asked to approve such amendment to the Restated Certificate
of Incorporation at the Special Meeting.
The Company currently has 16,000,000 authorized shares of
capital stock. As of January 31, 1997, 9,984,952 shares of
Common Stock and no shares of Preferred Stock were issued and
outstanding, of which 4,219 shares of Common Stock and no shares
of Preferred Stock were being held in treasury. In addition, as
of January 31, 1997, 1,257,271 shares of Common Stock were
reserved for future grant or issuance upon the exercise of
outstanding options under the Company's employee benefit plans.
In addition to the options reserved under the Company's employee
benefit plans, there are 1,165,623 options and 9,025,116
warrants, exercisable into shares of Common Stock.
PURPOSES AND EFFECTS OF THE PROPOSED AMENDMENT
Purposes and Effects. The principal purpose of the proposed
amendment to the Restated Certificate of Incorporation is to
authorize additional shares of Common Stock, which will be
available in the event that holders of outstanding warrants wish
to exercise such warrants or the Board of Directors determines
that it is necessary or appropriate to permit future stock
dividends or stock splits, to adopt or amend employee benefit
plans, to raise additional capital through the sale of
securities, to acquire another company or its business or assets,
or to establish a strategic relationship with a corporate
partner. With the additional authorized capital stock, the Board
of Directors anticipates the issuance of additional equity
securities in a private placement transaction. If the
amendment is approved by the stockholders, the Board of Directors
does not intend to solicit further stockholder approval prior to
the issuance of any additional shares of Common Stock, except as
may be required by applicable law.
The increase in authorized Common Stock will not have any
immediate effect on the rights of existing stockholders. To the
extent that the additional authorized shares are issued in the
future, the existing stockholders' percentage equity ownership
will decrease and, depending on the price at which shares are
issued, could have the effect of diluting the earnings <PAGE> per share
and book value per share of outstanding shares of Common Stock.
The holders of Common Stock have no preemptive rights. The
increase in the authorized number of shares of Common Stock and
the subsequent issuance of such shares could have the effect of
delaying or preventing a change in control of the Company without
further action by the stockholders by diluting the stock
ownership or voting rights of a person seeking to obtain control
of the Company.
Required Vote. The affirmative vote of the holders of a
majority of the shares of Common Stock entitled to vote at the
Special Meeting is required for approval of the proposed
amendment to the Restated Certificate of Incorporation of the
Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED CAPITAL STOCK.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of
the Company's equity securities, to file with the Securities and
Exchange Commission and the Nasdaq Stock Market initial reports
of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Executive officers,
directors and holders of ten percent or more of the Company's
equity securities are required by Securities and Exchange
Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file.
Based solely on a review of the copies of such reports
furnished to the Company and written representations that no
other reports were required, the Company believes that during the
fiscal year ended December 31, 1996, all Section 16(a) filing
requirements applicable to its executive officers, directors and
holders of ten percent or more of the Company's equity securities
were complied with, except that the statements of initial
statement of beneficial ownership of securities on Form 3 were
filed late by William A. Garrett and Robert J. Spane.
BY ORDER OF THE BOARD OF DIRECTORS,
Brian S. Gillman
Vice President, General
Counsel and Secretary
Kansas City, Missouri
February 18, 1997
<PAGE>
EXHIBIT A
VANGUARD AIRLINES, INC.
PROPOSED AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
(Increase in Authorized Capital)
RESOLVED, that the Restated Certificate of Incorporation of
Vanguard Airlines, Inc., a Delaware corporation (the
"Corporation"), be amended by deleting the Article IV, Section
(a) in its entirety and inserting in lieu thereof the following
new Article IV Section (a):
4. (a) The total number of shares of all classes of stock
which the Corporation shall have the authority to issue is fifty
one million (51,000,000), of which (i) fifty million (50,000,000)
shares, of the par value of $.001 per share, shall be denominated
"Common Stock," and (ii) one million (1,000,000) shares of the
par value of $.001 per share shall be denominated "Preferred Stock."
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