<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
AMERICA WEST 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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> 2
AMERICA WEST AIRLINES[tm]
April 2, 1996
To Our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you to
attend the Annual Meeting of Stockholders of America West Airlines, Inc. to be
held at the Columbus Art Museum located at 480 East Broad Street in Columbus,
Ohio, on May 23, 1996, at 10:00 a.m. (Eastern Daylight Time). A Notice of the
Meeting, Proxy Statement and form of proxy are enclosed with this letter.
We hope that you will be able to attend the annual meeting. If you cannot
be present, please execute and return the proxy card in the enclosed envelope so
that your shares will be represented. If your shares are not registered in your
own name and you would like to attend the meeting, please ask the broker, trust,
bank or other nominee which holds the shares to provide you with evidence of
your share ownership. We look forward to seeing you at the meeting.
Sincerely,
/s/ WILLIAM A. FRANKE
William A. Franke
Chairman of the Board and
Chief Executive Officer
4000 E. Sky Harbor Blvd.
Phoenix, Az 85034
<PAGE> 3
AMERICA WEST AIRLINES[tm]
4000 EAST SKY HARBOR BOULEVARD
PHOENIX, ARIZONA 85034
------------------------
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 1996
------------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of
America West
Airlines, Inc. (the "Company") will be held at the Columbus Art Museum located
at 480 East Broad Street in Columbus, Ohio, on May 23, 1996, at 10:00 a.m.
(Eastern Daylight Time) for the following purposes:
1. To elect 14 directors, each to hold office for a term of one year;
and
2. To transact any other business as may properly come before the
meeting or any adjournment thereof.
The holders of record of the Company's common stock at the close of
business on March 25, 1996 are entitled to notice of and to vote at the meeting
with respect to all proposals. We urge you to sign and date the enclosed proxy
and return it promptly by mail in the enclosed envelope, whether or not you plan
to attend the meeting in person. No postage is required if mailed in the United
States. If you do attend the meeting in person, you may withdraw your proxy and
vote personally on all matters brought before the meeting.
By Order of the Board of Directors
/s/ PATRICIA PENWELL
_____________________________
Patricia Penwell
Secretary
Phoenix, Arizona
April 2, 1996
<PAGE> 4
AMERICA WEST AIRLINES, INC.
4000 EAST SKY HARBOR BOULEVARD
PHOENIX, ARIZONA 85034
------------------------
PROXY STATEMENT
------------------------
MEETING OF STOCKHOLDERS
TO BE HELD MAY 23, 1996
------------------------
This statement is furnished in connection with the solicitation of proxies
by the Board of Directors of
America West Airlines, Inc. (the "Company" or "America West"), for use at the
Annual Meeting of Stockholders of the Company or any adjournment thereof (the
"Meeting") to be held at the Columbus Art Museum located at 480 East Broad
Street in Columbus, Ohio, on May 23, 1996, at 10:00 a.m. (Eastern Daylight
Time), for the purposes set forth in the notice attached hereto. This Proxy
Statement and the accompanying proxy are being mailed to stockholders on or
about April 5, 1996.
THE PROXY
Stockholders submitting proxies may revoke them at any time before they are
voted by notifying the Secretary of the Company in writing of such revocation or
by execution of a subsequent proxy sent to Patricia Penwell, Secretary, America
West Airlines, Inc., 4000 East Sky Harbor Boulevard, Phoenix, Arizona 85034, or
by attending the Meeting in person and giving notice of revocation to the
inspector of election at the Meeting. Any such revocation, or subsequent proxy,
must be received prior to the commencement of voting at the Meeting to be
effective. A proxy will be voted in the manner specified on the proxy, or if no
manner is specified, it will be voted in favor of the proposals set forth in the
notice attached hereto.
The Company will bear the costs of this solicitation. The Company has
retained Hill & Knowlton to assist in the solicitation of proxies for a fee
estimated at $7,500, plus reimbursement of out-of-pocket expenses. In addition
to the solicitation of proxies by mail, proxies may also be solicited by
telephone, telegram and personal interview by employees and directors of the
Company, none of whom will receive additional compensation therefor. The Company
has also requested brokers or nominees who held common stock in street name on
the record date to forward proxy soliciting material to the beneficial owners of
such stock at the Company's expense.
RECORD DATE AND VOTING SECURITIES
The Board of Directors has fixed the close of business on March 25, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting. At the close of business on the record date, the Company
had outstanding and entitled to vote 1,200,000 shares of its Class A common
stock, par value $.01 per share ("Class A Common Stock"), and 44,494,973 shares
of its Class B common stock, par value $.01 per share ("Class B Common Stock"
and, together with the Class A Common Stock, the "Common Stock"). The shares of
Common Stock are the Company's only outstanding voting securities.
Subject to certain limitations on voting by non-U.S. citizens, each share
of Class A Common Stock held of record is entitled to fifty votes per share and
each share of Class B Common Stock held of record is entitled to one vote per
share. Holders of Class A Common Stock and Class B Common Stock vote together as
a single class for all matters submitted to a vote of the stockholders. The
presence, in person or by proxy, of the holders of a majority of the aggregate
voting power of the outstanding Common Stock entitled to vote at the Meeting
will constitute a quorum for the transaction of business at the Meeting. The
election of directors will require a plurality of the votes cast at the Meeting.
Abstentions will not be included in the tally of votes cast and, therefore, will
not affect the outcome of the election of directors. Broker non-votes are not
included in the tally of shares present for voting purposes and, therefore, will
not affect the outcome of the election of
<PAGE> 5
directors. In establishing the presence of a quorum, abstentions and broker
non-votes will be included in the determination of the number of shares
represented at the Meeting.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of March 1, 1996 the beneficial ownership
of the outstanding Common Stock of the Company by each person who is known to
the Company to own beneficially more than 5% of the outstanding Common Stock of
America West, each executive officer and director of America West and all
executive officers and directors of America West as a group.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS A AND B
BENEFICIALLY OWNED BENEFICIALLY OWNED COMBINED
------------------------ ------------------------- VOTING POWER
BENEFICIAL OWNER(1) NUMBER PERCENTAGE NUMBER PERCENTAGE PERCENTAGE
- --------------------------------- --------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
TPG Partners, L.P. ("TPG")(2).... 941,431 78.5% 3,857,882(3) 8.3% 47.9%(3)
201 Main Street
Suite 2420
Fort Worth, Texas 76102
Continental Airlines, Inc
("Continental")(4)............. 158,569 13.2% 1,120,000(5) 2.5% 8.6%(5)
2929 Allen Parkway
Houston, Texas 77019
Mesa Airlines, Inc.
("Mesa")....................... 100,000 8.3% 1,000,269(6) 2.2% 5.7%(6)
2525 30th Street
Farmington, New Mexico 87401
FMR Corp. ("Fidelity")........... -- -- 4,445,438(7) 9.9% 4.2%(7)
82 Devonshire Street
Boston, Massachusetts 02109
Wellington Management Company.... -- -- 5,036,835(8) 11.3% 4.8%(8)
75 State Street
Boston, Massachusetts 02109
The Equitable Companies
Incorporated................... -- -- 3,118,340(9) 7.0% 3.0%(9)
787 Seventh Avenue
New York, New York 10019
Lehman Brothers Holdings Inc.
("Lehman")..................... -- -- 2,844,768(10) 6.4% 2.7%(10)
200 Vesey Street
American Express Tower
World Financial Center
New York, New York 10285-1800
William A. Franke................ -- -- 779,334(11) 1.7% *
A. Maurice Myers(12)............. -- -- -- * *
Thomas F. Derieg................. -- -- --(13) -- --
John R. Garel.................... -- -- 28,333(13) * *
Stephen L. Johnson............... -- -- 10,000(13) * *
W. Douglas Parker................ -- -- 28,333(13) * *
Michael A. Vescuso............... -- -- 8,334(13) * *
Michael R. Carreon............... -- -- 2,000(13) * *
C. A. Howlett.................... -- -- 10,000(13) * *
Larry Pool....................... -- -- -- * *
Martin J. Whalen(14)............. -- -- 30,000 -- --
Julia Chang Bloch................ -- -- 6,000(15) * *
Stephen F. Bollenbach............ -- -- 6,000(15) * *
Frederick W. Bradley, Jr. ....... -- -- 6,000(15) * *
James G. Coulter(16)............. 1,100,000 91.7% 4,983,882(15) 10.6% 56.0%
John F. Fraser................... -- -- 6,000(15) * *
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS A AND B
BENEFICIALLY OWNED BENEFICIALLY OWNED COMBINED
------------------------ ------------------------- VOTING POWER
BENEFICIAL OWNER(1) NUMBER PERCENTAGE NUMBER PERCENTAGE PERCENTAGE
- --------------------------------- --------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
John L. Goolsby.................. -- -- 7,500(15) * *
Richard C. Kraemer............... -- -- 6,000(15) * *
John R. Power, Jr. .............. -- -- 6,000(15) * *
Larry L. Risley(17).............. 100,000 8.3% 1,006,269(15) 2.3% 5.7%
Frank B. Ryan.................... -- -- 6,000(15) * *
Richard P. Schifter(18).......... 941,431 78.5% 3,863,882(15) 8.3% 47.9%
John F. Tierney(19).............. -- -- 1,390,615(15) * *
Raymond S. Troubh................ -- -- 8,500(15) * *
All executive officers and
directors as a group
(23 persons)................... 1,200,000 100.0% 6,954,815(20) 14.3% 61.6%
</TABLE>
- ---------------
* Less than 1%.
(1) Information with respect to each beneficial owner of 5% or more of a class
of the Company's Common Stock is based solely on Schedules 13D or 13G filed
by such beneficial owners with the Securities and Exchange Commission.
Pursuant to a stockholders agreement between TPG, Continental, Mesa and GPA
Group plc, shares held by any of such entities could be considered
beneficially owned by the other entities. The information below reflects
securities directly held by such entities.
(2) TPG is a Delaware limited partnership whose general partner is TPG GenPar,
L.P., a Delaware limited partnership ("TPG GenPar"). The general partner of
TPG GenPar is TPG Advisors, Inc., a Delaware corporation ("TPG Advisors").
The executive officers and directors of TPG Advisors are: David Bonderman
(director and president), James G. Coulter (director and vice president),
William Price (director and vice president), James O'Brien (vice president,
treasurer and secretary), Richard P. Schifter (vice president) and Richard
A. Ekleberry (vice president). Includes 78,644 shares of Class A Common
Stock and 162,555 shares of Class B Common Stock owned by TPG Parallel I,
L.P., a Delaware limited partnership ("TPG Parallel"), and 82,314 shares of
Class A Common Stock and 170,142 shares of Class B Common Stock owned by
Air Partners II, L.P., a Texas limited partnership ("Air Partners II"). The
general partner of each of TPG Parallel and Air Partners II is TPG GenPar.
No other persons control TPG, TPG GenPar, TPG Advisors, TPG Parallel or Air
Partners II.
(3) Includes 1,584,706, 159,682 and 167,135 (totaling 1,911,523) shares of
Class B Common Stock that may be acquired upon the exercise of Warrants by
TPG, TPG Parallel and Air Partners II, respectively. Excludes 6,000 shares
of Class B Common Stock underlying stock options held by Mr. Schifter and
6,000 shares of Class B Common Stock underlying stock options held by Mr.
Coulter.
(4) Mr. Bonderman is also director and chairman of the board of directors of
Continental and Mr. Price is a director of Continental. Mr. Bonderman, Mr.
Coulter and Mr. Price, through their control positions in Air Partners,
L.P., a special purpose partnership formed in 1992 to participate in the
funding of the reorganization of Continental and a significant shareholder
in Continental, may be deemed to own beneficially a significant percentage
of Continental's common stock.
(5) Includes 802,860 shares of Class B Common Stock that may be acquired upon
the exercise of Warrants by Continental. Excludes 6,000 shares of Class B
Common Stock underlying stock options held by Mr. Coulter.
(6) Includes 799,767 shares of Class B Common Stock that may be acquired upon
the exercise of Warrants by Mesa and 2,129 shares of Class B Common Stock
owned by Regional Aircraft Services, Inc., an indirect wholly owned
subsidiary of Mesa. Excludes 6,000 shares of Class B Common Stock
underlying stock options held by Mr. Risley.
(7) As of March 11, 1996, includes 518,893 shares of Class B Common Stock that
may be acquired upon the exercise of Warrants. The Class B Common Stock and
Warrants are owned directly by various funds and accounts advised by
Fidelity Management & Research Company ("FMRC") or Fidelity Management
Trust Company ("FTMC"). FMRC, a wholly owned subsidiary of FMR Corp., is an
investment advisor which is registered under Section 203 of the Investment
Advisors Act of 1940 and
3
<PAGE> 7
which provides investment advisory services to more than 30 investment
companies which are registered under Section 8 of the Investment Company
Act of 1940 and serves as investment advisor to certain other funds which
are generally offered to limited groups of investors. FMTC, a wholly owned
subsidiary of FMR Corp., and a bank as defined in Section 3(a)(6) of the
Exchange Act, serves as trustee or managing agent for various private
investment accounts, primarily employee benefit plans and serves as
investment advisor to certain other funds which are generally offered to
limited groups of investors.
(8) Includes shares owned by numerous investment advisory clients of Wellington
Management Company ("Wellington"). Wellington, in its capacity as
investment adviser, may be deemed to beneficially own such shares.
(9) Includes 947,400 shares held by The Equitable Life Assurance Society of the
United States, 2,160,940 shares held by Alliance Capital Management L.P.
(9,240 of such shares may be acquired upon exercise of purchase rights) and
10,000 shares held by Donaldson, Lufkin & Jenrette Securities Corporation.
(10) Includes 293,242 shares of Class B Common Stock that may be acquired upon
the exercise of Warrants by Lehman Brothers Holdings Inc.
(11) Includes 505,000 shares of Class B Common Stock that may be acquired upon
exercise of stock options. Excludes 150,000 shares underlying stock options
that are not exercisable within 60 days of the date hereof.
(12) Mr. Myers left the Company in December 1995.
(13) Excludes (i) 111,667 shares underlying stock options held by each of
Messrs. Derieg, Garel, Parker and Vescuso, (ii) 115,000 shares underlying
stock options held by Mr. Johnson, (iii) 45,000 shares underlying stock
options held by each of Messrs. Howlett and Pool and (iv) 44,000 shares
underlying stock options held by Mr. Carreon. Such options are not
exercisable within 60 days from the date hereof.
(14) Mr. Whalen retired from the Company in December 1995.
(15) Includes 6,000 shares of Class B Common Stock that may be acquired upon
exercise of stock options.
(16) Includes shares of Class A Common Stock and Class B Common Stock
beneficially owned by TPG, TPG Parallel, Air Partners II and Continental.
In connection with Mr. Coulter's positions described in footnotes (2) and
(4) above, Mr. Coulter may be deemed to own beneficially such shares. Mr.
Coulter disclaims beneficial ownership of such shares.
(17) Includes shares of Class A Common Stock and Class B Common Stock
beneficially owned by Mesa. Through his position as chairman and chief
executive officer of Mesa, Mr. Risley may be deemed to own beneficially
such shares. Mr. Risley disclaims beneficial ownership of such shares.
(18) Includes shares of Class A Common Stock and Class B Common Stock
beneficially owned by TPG, TPG Parallel and Air Partners II. In connection
with Mr. Schifter's position described in footnote (2) above, Mr. Schifter
may be deemed to own beneficially such shares. Mr. Schifter disclaims
beneficial ownership of such shares.
(19) Includes shares of Class B Common Stock that may be acquired upon exercise
of Warrants by GPA Group plc ("GPA"). Through his position at GPA, Mr.
Tierney may be deemed to own beneficially such shares. Mr. Tierney
disclaims beneficial ownership of such shares.
(20) Includes 4,214,593 shares of Class B Common Stock that may be acquired upon
exercise of Warrants and stock options.
4
<PAGE> 8
GENERAL INFORMATION
ROLE OF THE BOARD OF DIRECTORS
The Board of Directors has responsibility for establishing broad policies
of the Company and for the overall performance of the Company. Members of the
Board are kept informed of the Company's business by various reports and
documents given to them on a regular basis, as well as by operating, financial
and other reports made at meetings of the Board of Directors and its committees.
The Board is comprised of 14 directors. Certain of the Company's principal
stockholders are parties to a Stockholders' Agreement relating to the
composition of the Company's Board of Directors. See "Stockholders' Agreement"
below.
The Board held 13 meetings during 1995. Each director of the current Board
attended at least 75% of the meetings of such Board and the committees on which
such director serves except Ms. Julia Chang Bloch.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has three standing committees: a Compensation/Human Resources
Committee (the "Compensation Committee"), an Audit Committee and an Executive
Committee. The Company does not maintain a standing nominating committee.
The Compensation Committee, comprised of Messrs. Kraemer (Chair),
Bollenbach, Bradley and Schifter, reviews all aspects of compensation and
promotion of officers of the Company and any matters relating to employee
benefit plans. In 1995, the Compensation Committee met 10 times.
The Audit Committee, comprised of Messrs. Goolsby (Chair), Risley, Ryan and
Troubh, recommends to the Board of Directors selection of the Company's
independent auditors, reviews the financial statements of the Company and
considers such other matters relating to the internal and external audits of the
financial affairs of the Company as may be necessary. In 1995, the Audit
Committee met five times.
The Executive Committee, comprised of Messrs. Franke (Chair), Bradley,
Coulter and Power, has all of the powers of the Board of Directors in the
management of the affairs and business of the Company subject to certain
limitations. The Executive Committee met five times in 1995.
DIRECTOR COMPENSATION
Each director who is not an officer or employee of the Company receives an
annual retainer of $15,000 plus $1,000 for each Board or committee meeting
attended. Directors are also entitled to certain air travel benefits. Pursuant
to the America West Airlines, Inc. 1994 Incentive Equity Plan (the "Incentive
Plan"), each new non-employee director will automatically receive on the date of
initial election an option to purchase 3,000 shares of Class B Common Stock. In
addition, each non-employee director will be automatically granted an option to
purchase 3,000 shares of Class B Common Stock on the day after each annual
stockholders' meeting. Options granted to non-employee directors have an
exercise price equal to the fair market value of Class B Common Stock on the
date of grant.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information for the years ended December 31,
1995, 1994 and 1993 with respect to compensation for services to America West
paid to (i) the chief executive officer, (ii) the four highest paid executive
officers (other than the chief executive officer), (iii) certain other executive
officers of the Company who joined the Company during 1995 and (iv) two former
officers of the Company.
5
<PAGE> 9
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------------
AWARDS
ANNUAL COMPENSATION -----------------------
------------------------------------------ RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
COMPENSATION AWARD(S) OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION(1) YEAR SALARY($) BONUS($) ($)(2) ($) SARS(#) ($)
- ------------------------------------------ ----- --------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
William A. Franke......................... 1995 300,000 -- -- 235,089(3) 300,000 9,255(4)
Chairman of the Board and 1994 450,000 -- 5,625 96,250(3) 355,000 1,224,375
Chief Executive Officer 1993 450,000 -- -- -- -- --
A. Maurice Myers.......................... 1995 400,000 -- -- -- -- 30,318(5)
President and Chief 1994 376,442 -- 104,688 -- 200,000 427,727
Operating Officer
Thomas F. Derieg.......................... 1995 205,000 136,920 -- -- 30,000 22,102(6)
Senior Vice President -- Operations 1994 100,000 -- -- -- 85,000 74,036
John R. Garel............................. 1995 141,670 97,639 -- -- 115,000 139,923(7)
Senior Vice President -- Marketing and
Sales
Stephen L. Johnson........................ 1995 131,333 73,515 -- -- 100,000 35,400(8)
Senior Vice President -- Legal Affairs
W. Douglas Parker......................... 1995 108,625 73,964 -- -- 115,000 59,166(9)
Senior Vice President and
Chief Financial Officer
Michael A. Vescuso........................ 1995 188,750 136,000 -- -- 30,000 10,980(10)
Senior Vice President -- Human Resources 1994 22,211 -- -- -- 85,000 11,184
Martin J. Whalen.......................... 1995 175,000 114,100 -- -- 30,000 6,412(11)
Senior Vice President -- 1994 142,464 -- 2,406 -- 85,000 190,883
Corporate Affairs and Secretary 1993 134,400 -- 4,368 -- -- 3,873
Michael R. Carreon........................ 1995 92,000 30,912 -- -- 6,000 19,540(12)
Vice President and Controller 1994 4,895 -- -- -- 6,000 10,000
C. A. Howlett............................. 1995 124,591 65,130 -- -- 45,000 --
Vice President -- Public Affairs
Larry Pool................................ 1995 151,875 82,665 -- -- 15,000 40,132(12)
Vice President -- Technical Services 1994 53,365 -- -- -- 30,000 --
</TABLE>
- ---------------
(1) Mr. Myers and Mr. Whalen left the Company in December 1995. Messrs. Derieg,
Vescuso and Pool joined the Company during 1994. Messrs. Garel, Johnson,
Nichols, Parker and Howlett joined the Company during 1995. Salary amounts
reflect payments for the portion of the year the executive officer was
employed by the Company. Bonuses granted to officers who joined the Company
after March 31, 1995 were prorated for the portion of the year employed by
the Company.
(2) For 1995, none of the listed officers received perquisites or other
personal benefits in an aggregate amount in excess of the lesser of $50,000
or 10% of their respective annual salaries.
(3) Reflects restricted grants pursuant to the Incentive Plan of 11,000 shares
in December 1994 and 30,334 shares in January 1995. The aggregate market
value of restricted stock holdings at December 31, 1995 was $702,678.
(4) Reflects premium paid by Company for life insurance for Mr. Franke of
$9,255.
(5) Includes premium paid by Company for life insurance for Mr. Myers of
$25,698 and matching contributions made by the Company under its 401(k)
plan of $4,620.
(6) Includes premium paid by Company for life insurance for Mr. Derieg of
$18,707 a payment of $495 to provide 401(k) plan equivalent benefits for
the period prior to Mr. Derieg's plan eligibility and matching
contributions made by the Company under its 401(k) plan of $2,900.
(7) Includes a payment of $50,000 to Mr. Garel upon his joining the Company to
compensate for benefits foregone in connection with his resigning from his
prior employer, reimbursement for moving expenses of $73,900 and a payment
of $16,023 to provide 401(k) plan equivalent benefits for the period prior
to Mr. Garel's plan eligibility.
(8) Amount reflects reimbursement for moving expenses.
(9) Includes a payment of $45,000 to Mr. Parker to compensate for benefits
foregone in connection with his resigning from his prior employer and a
payment of $14,166 to provide 401(k) plan equivalent benefits for the
period prior to Mr. Parker's plan eligibility.
(10) Includes a payment of $9,480 to provide 401(k) plan equivalent benefits for
the period prior to Mr. Vescuso's plan eligibility and matching
contributions made by the Company under its 401(k) plan of $1,500.
(11) Includes premium paid by Company for life insurance for Mr. Whalen of
$1,792 and matching contributions made by the Company under its 401(k) plan
of $4,620.
(12) Reflects reimbursement for moving expenses.
6
<PAGE> 10
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS EXERCISE OR
OPTIONS GRANTED TO BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED(#)(1) EMPLOYEES IN 1995 ($/SH) DATE PRESENT VALUE(2)
- ------------------------------ ------------- ----------------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
William A. Franke............. 150,000 11.1% 12.875 8/30/05 628,500
150,000 11.1% 16.500 11/9/05 805,500
A. Maurice Myers.............. -- -- -- -- --
Thomas F. Derieg.............. 30,000 2.2% 12.875 8/30/05 148,800
John R. Garel................. 85,000 6.3% 8.750 3/15/05 286,450
30,000 2.2% 12.875 8/30/05 148,800
Stephen L. Johnson............ 30,000 2.2% 8.750 1/30/05 101,100
15,000 1.1% 12.875 8/30/05 74,400
55,000 4.1% 18.000 12/19/05 381,150
W. Douglas Parker............. 85,000 6.3% 9.625 5/24/05 314,500
30,000 2.2% 12.875 8/30/05 148,800
Michael A. Vescuso............ 30,000 2.2% 12.875 8/30/05 148,800
Martin J. Whalen.............. 30,000 2.2% 12.875 8/30/05 148,800
Michael R. Carreon............ 6,000 0.4% 12.875 8/30/05 29,760
C. A. Howlett................. 30,000 2.2% 8.750 1/05/05 101,100
15,000 1.1% 12.875 8/30/05 74,400
Larry Pool.................... 15,000 1.1% 12.875 8/30/05 74,400
</TABLE>
- ---------------
(1) Mr. Franke's options were granted pursuant to his employment agreement and
under the Incentive Plan. Such options were exercisable upon grant. Option
grants in 1995 to all other employees vest pro rata over a three year period
commencing on the first anniversary of the date of grant.
(2) The value has been calculated using a variation of the Black-Scholes stock
option valuation methodology. The applied model assumed a stock price
volatility of 37.0%, a risk-free rate of return of 6.5% and no dividends.
Options have an exercise period of ten years; however, the estimated
effective option life for each person other than Mr. Franke is approximately
four years from the date of grant. For Mr. Franke's options, the estimated
effective option life is the remaining term of his employment agreement.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR END 1995 OPTION VALUES
-----------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES YEAR END 1995(#) AT YEAR END($)(1)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William A. Franke...... -- -- 505,000 150,000 3,547,500 75,000
A. Maurice Myers(2).... 65,000 595,125 135,000 -- 1,113,750 --
Thomas F. Derieg....... 28,334 258,410 -- 86,666 -- 591,245
John R. Garel.......... -- -- -- 115,000 -- 825,000
Stephen L. Johnson..... -- -- -- 100,000 -- 284,375
W. Douglas Parker...... -- -- -- 115,000 -- 750,625
Michael A. Vescuso..... 20,000 187,500 8,334 86,666 68,756 591,245
Martin J. Whalen(2).... 28,333 279,788 86,667 -- 591,253 --
Michael R. Carreon..... -- -- 2,000 10,000 16,500 57,750
C. A. Howlett.......... -- -- -- 45,000 -- 309,375
Larry Pool............. 10,000 93,750 -- 35,000 -- 226,875
</TABLE>
- ---------------
(1) Based on the excess of the closing sales price of the Class B Common Stock
on the New York Stock Exchange on December 29, 1995 ($17.00 per share).
(2) Mr. Myers exercised all of his remaining options in 1996.
7
<PAGE> 11
PERFORMANCE GRAPHS
Proxy disclosure rules promulgated by the Securities and Exchange
Commission require inclusion of a line graph presentation comparing cumulative
five-year stockholder returns on an indexed basis with the S&P 500 Index and
either a nationally recognized industry standard or an index of peer companies
selected by the Company. Since the Class B Common Stock has been traded since
August 26, 1994, a five-year presentation is not possible. Under these
circumstances, the Company is required instead to present such information for
the period since such shares were issued. The following performance graph
compares the Company's cumulative total stockholder return on its Class B Common
Stock with the cumulative total return of the S&P 500 Index and the S&P Airlines
Index since August 26, 1994, the date on which the Company's Class B Common
Stock began trading on the New York Stock Exchange.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN*
<TABLE>
<CAPTION>
AMERICA WEST
MEASUREMENT PERIOD AIRLINES, S&P AIRLINES S&P 500
(FISCAL YEAR COVERED) INC. INDEX** INDEX**
- --------------------- ------------ ------------ -------
<S> <C> <C> <C>
8/26/94 100.00 100.00 100.00
9/30/94 87.60 87.40 97.70
12/31/94 52.90 83.50 96.90
3/31/95 57.00 99.50 105.70
6/30/95 80.20 122.00 115.00
9/29/95 102.50 120.00 123.40
12/29/95 112.40 121.90 130.00
</TABLE>
* Assumes $100 invested on August 26, 1994 in each of the Class B Common Stock
of the Company, the S&P Airlines Index and the S&P 500 Index.
** Prepared by Standard & Poor's Composite, a division of McGraw Hill.
8
<PAGE> 12
COMPENSATION COMMITTEE REPORT
The Company's compensation program for all executives, including the
executive officers named in the Summary Compensation Table set forth above, is
administered by the Compensation Committee. The Compensation Committee currently
consists of four members, none of whom is a current or former employee or
officer of the Company and one of whom is affiliated with TPG which, as
indicated under "Principal Stockholders" above, is a principal stockholder of
the Company.
Set forth below is a report submitted by the current Compensation Committee
addressing the Company's executive compensation program.
General
The Company's executive compensation program consists of (i) an annual
compensation plan, the principal elements of which are base salaries and annual
incentive bonuses and (ii) the America West Airlines, Inc. 1994 Incentive Equity
Plan (the "Incentive Plan"), a long-term compensation plan under which
executives and other key salaried employees may be awarded stock-based
compensation, including stock options, stock appreciation rights, restricted
stock, phantom shares, performance units and cash tax rights.
The Company's executive compensation program was developed with the
assistance of an independent, nationally-recognized consulting firm over a
period of several months ended after the Company's emergence from bankruptcy on
August 25, 1994. The development process encompassed both executive and
broad-based employee compensation programs and included a review of competitive
marketplace compensation data for key U.S. airlines. Long-term and short-term
compensation data for other public companies of comparable size to the Company
(as measured by revenues) were also examined. Consideration was also given to
relevant circumstances peculiar to the Company, including the Company's
compensation programs during the pendency of its bankruptcy proceeding.
The Compensation Committee meets regularly throughout the year to review
general compensation issues and determines the compensation of all officers and
other key salaried employees of the Company. At least once a year, the
Compensation Committee conducts a comprehensive review of the Company's
compensation program, including (i) an internal report evaluating executive
compensation to ensure consistency and program effectiveness, including the
relationship of executive pay to performance and (ii) a comprehensive report
from an independent consultant (retained by the Compensation Committee) relating
to the competitiveness of executive compensation at the Company relative to
other major airlines and other selected public companies of comparable size.
Overall Compensation Philosophy and Objectives
The principal objectives of the Company's executive compensation program
are (i) to motivate executives to achieve the Company's strategic, operating and
financial goals, (ii) to provide alignment between employee and shareholder
interests through stock-based compensation and annual performance bonuses, (iii)
to attract and retain high quality employees and (iv) to provide a compensation
package that appropriately recognizes both individual and corporate
contributions. The program is designed to be competitive with other major U.S.
airlines while also reflecting the Company's size and to place more emphasis on
variable pay than on fixed base salaries over time.
Base Salary
The Compensation Committee reviews base salaries annually. Annual
adjustments are based on several factors, including general levels of market
salary increases, the employee's job classification and the Company's financial
results. Base salaries are also dependent on the Compensation Committee's
subjective evaluation of the performance of the individual employee over time.
Thus, employees with higher levels of performance sustained over time generally
will be paid correspondingly higher base salaries.
The Company's strategy with respect to base salaries for its key salaried
employees is designed, generally, to (i) avoid dramatic changes to base salaries
other than to adjust base salaries over time to reflect market
9
<PAGE> 13
movements and individual performance and (ii) reduce the emphasis on fixed
compensation by positioning base salaries below industry levels. The Company
obtains market salary data for such purposes. The data is collected with respect
to companies of comparable size to the Company in general industry and the
airline industry using nationally recognized compensation surveys as well as
data from proxy statements for the airlines included in the S&P Airlines Index
prepared by Standard & Poor's Composite, a division of McGraw Hill, and from
proxy statements for certain other select carriers.
Effective as of December 1, 1994, the Company entered into an employment
agreement with William A. Franke, Chairman of the Board and Chief Executive
Officer, establishing his base salary for 1995 at $300,000, a decrease of
$150,000 from 1994. Mr. Franke requested this reduction in exchange for certain
restricted stock grants provided for in his employment agreement. Effective
January 1, 1996, the Company entered into a new employment agreement with Mr.
Franke (which replaces as of such date his prior employment agreement). The
agreement provides for an annual base salary of $500,000 during Mr. Franke's
service as Chairman of the Board and Chief Executive Officer. See "Employment
Agreement."
The job classification increases that became effective January 1, 1995
included base salaries for other Company executive officers at a level intended
to approximate 90% of the average salaries for comparable positions at other
major U.S. airlines.
Annual Incentive Compensation
The Company's incentive compensation plan, or annual incentive bonus plan,
is the program by which executives and other key salaried employees can earn
additional cash compensation. The amount of each bonus is determined by the
Compensation Committee at the end of each year and is based principally on the
Company's financial performance for the year and on individual performance. The
Compensation Committee administers the incentive compensation plan, recommends
to the Board of Directors the aggregate amount of annual incentive compensation
and approves individual awards. In evaluating an individual's performance, the
Compensation Committee may rely on the recommendation of the Chief Executive
Officer, whose recommendation will be based on his own subjective evaluation of
such individual's performance. The Board of Directors approves the aggregate
amount of the incentive compensation awards to all participants.
The objectives of the Company's annual incentive compensation plan are to
motivate and reward the accomplishment of corporate and individual annual
objectives, reinforce a strong performance orientation with differentiation and
variability in individual awards based on contributions to business results, and
enhance rewards for meeting and exceeding corporate and personal objectives. The
Company's financial performance must be at or above certain threshold levels
(determined annually by the Compensation Committee), including a specified
amount of earnings before interest, taxes, depreciation and amortization, before
any bonus is awarded under the Company's annual incentive compensation plan.
Mr. Franke does not participate in the Company's annual incentive
compensation plan. Instead, as described elsewhere in this report, his
compensation package places greater emphasis on long-term equity incentives such
as restricted stock grants and stock options.
Stock-Based Compensation
In 1995, stock-based awards were granted to numerous salaried employees and
to non-employee directors. Such awards consist solely of (i) non-qualified stock
options granted to executives (including Mr. Franke) and other key salaried
employees for an aggregate of 1.4 million shares of Class B Common Stock and
(ii) non-qualified stock options granted to 13 non-employee directors for an
aggregate of 42,000 shares of Class B Common Stock. Each option previously
granted to an employee (other than Mr. Franke) (a) is exercisable as to
one-third of the shares covered thereby on each anniversary of the date of
grant, so that such option is exercisable in full three years after the date of
grant, (b) may not be exercised after the tenth anniversary of the date of grant
or the earlier termination of the option and (c) will become fully exercisable
in the event of the optionee's termination of employment by reason of death,
disability or retirement or in the event of a "change in control." This approach
is designed to provide an incentive to create stockholder value over time, since
the full benefit of the stock option cannot be realized unless stock
appreciation occurs over a
10
<PAGE> 14
number of years. The options granted to non-employee directors may be exercised
six months after the date of grant. Mr. Franke's options were granted to him in
connection with his employment agreement. Of the 655,000 options granted to Mr.
Franke as of December 31, 1995, 505,000 are currently exercisable.
The primary purpose of stock-based awards made under the Incentive Plan is
to compensate the recipients in a way that provides a long-term incentive for
future performance, thus linking the interests of the recipients with the
long-term interests of the stockholders of the Company. In addition, in order to
further align the interests of management with the stockholders of America West
and to encourage accumulation and retention of Common Stock by America West
executive officers, the Company recently adopted stock ownership guidelines
providing for ownership of Common Stock at the following multiples of annual
salary: Chairman/Chief Executive Officer, five times; President/Chief Operating
Officer, three times; Senior Vice Presidents, 1.5 times; and Vice Presidents,
0.75 times. For purposes of the guidelines, stock ownership is defined as
ownership of Class B Common Stock at the current market price, grants of
restricted stock (regardless of vesting status) valued at current market price
and vested stock options valued at 50% of the exercise price. Each executive has
three years to achieve the applicable ownership guideline. The guidelines are
subject to periodic review by the Compensation Committee and the Board of
Directors.
Stock Options. Stock options are an integral part of the Company's
executive compensation program. The Compensation Committee believes that stock
options are an important and appropriate incentive to employees to meet the
Company's long-term goals. By working to increase the Company's stock value, one
of the Company's performance goals is met, and the executives and employees are
likewise compensated through option value. The Compensation Committee determines
the number of options to be granted to an individual based upon a variety of
factors, including (i) the individual's job classification level, (ii) an
evaluation of the individual's performance, (iii) the longevity in office of the
individual, (iv) an evaluation of the individual's retention value to the
Company and (v) the results of the various compensation surveys described above.
No mathematical weighting formulae will be applied with respect to any of these
factors, although the individual's job classification level will normally be a
primary factor.
The Incentive Plan permits the Compensation Committee, in awarding a stock
option to an employee, to specify (i) the number of shares covered by such
option, (ii) within certain parameters, the manner in which the exercise price
shall be payable to the Company, (iii) the required period or periods of
continuous service with the Company and the corporate performance objectives (if
any) to be achieved before the option can be exercised in whole or in part, (iv)
whether such option will be an incentive stock option or a non-qualified stock
option or a combination thereof and (v) the period (not to exceed 10 years from
the grant date) during which the option may be exercised. With respect to all
options granted under the Incentive Plan, the precise number of shares is
determined partly on a subjective basis. All stock options granted under the
Incentive Plan are exercisable at or above fair market value on the date of
grant and will generally vest over a number of years, dependent on continued
employment. Each grant is made based on the optionee's overall employment
package, without reference to previous stock option grants.
Pursuant to Mr. Franke's employment agreement Mr. Franke has received
options to purchase 655,000 shares of Class B Common Stock in accordance with
the Incentive Plan. In approving these options, the Compensation Committee
considered a variety of factors, including (i) Mr. Franke's job classification
level, (ii) a subjective evaluation of Mr. Franke's performance, including the
substantial turnaround of the Company's operating results since the commencement
of Mr. Franke's employment with the Company in September 1992, (iii) Mr.
Franke's level of responsibility within the Company, (iv) a review of
compensation for similarly situated individuals both in the airline industry and
in companies of similar size (based on revenues), (v) a subjective evaluation of
Mr. Franke's ability to lead the Company in formulating and implementing its
long-term business plan, (vi) a subjective evaluation of Mr. Franke's standing
within the Company, in the communities served by the Company and with the
Company's investors and suppliers and (vii) a subjective evaluation of Mr.
Franke's ability to enhance the Company's stock value and his overall retention
value to the Company. In addition, the Compensation Committee also took into
account that, under the terms of his employment agreement, Mr. Franke does not
receive any annual bonuses or other annual incentive compensation.
11
<PAGE> 15
Restricted Stock. Restricted stock awards are grants of shares of Class B
Common Stock which carry full stockholder privileges, including the right to
vote and, subject to limitations (if any) established by the Compensation
Committee, the right to receive dividends. No restricted stock awards have been
made by the Compensation Committee except to Mr. Franke in accordance with the
terms of his employment agreement.
Other Benefits
The Company has certain broad-based employee benefit plans in which all
employees, including the executives, participate, such as life and health
insurance plans and a 401(k) plan. Also, officers of the Company are provided
director/officer liability insurance coverage. The incremental cost to the
Company of such benefits provided under these plans is not material to the
Company. Benefits under these plans are not directly or indirectly tied to
Company or individual performance.
The foregoing report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
Respectfully submitted,
COMPENSATION/HUMAN RESOURCES COMMITTEE
Richard C. Kraemer, Chairman
Stephen F. Bollenbach
Frederick W. Bradley, Jr.
Richard P. Schifter
12
<PAGE> 16
EMPLOYMENT AGREEMENT
Effective as of January 1, 1996, the Company entered into an employment
agreement with William A. Franke (which replaces as of such date Mr. Franke's
prior employment agreement). The agreement provides that Mr. Franke will serve
as the Chairman of the Board and Chief Executive Officer of the Company until
the earlier of December 31, 1998 or his successor as Chief Executive Officer
assumes the responsibilities of such office ("Phase I") and will serve solely as
Chairman of the Board of the Company for the period from the end of Phase I to
December 31, 1998 ("Phase II"). Under the agreement, Mr. Franke is to receive an
annual cash base salary in the amount of (a) $500,000 during Phase I and (b)
$100,000 during Phase II, which amounts may be increased at the discretion of
the Board of Directors. The agreement provides for a restricted stock grant of
108,000 shares of Class B Common Stock on January 1, 1996, subject to partial
forfeiture if the agreement is terminated for certain reasons. If requested by
Mr. Franke, the Company has agreed to loan to Mr. Franke up to $860,000 on a
nonrecourse basis for payment of taxes in connection with such stock grant,
secured by a pledge of a portion of such stock. In addition, the agreement
provides that the vesting of options previously granted to Mr. Franke under his
prior employment agreement (to purchase 250,000 shares of Class B Common Stock
in the aggregate) is accelerated, and such options are immediately exercisable.
The agreement provides for an additional grant of options to purchase 150,000
shares of Class B Common Stock, vesting over three years, at an exercise price
of $16.50 per share (the fair market value on the date of grant). The vesting of
such options accelerates upon a "change of control" (as defined in the
agreement) of the Company or in the event Mr. Franke's employment is terminated
by reason of death or disability. The agreement also provides for (i) a $2
million term life insurance policy for the benefit of beneficiaries designated
by Mr. Franke, (ii) certain travel privileges, (iii) approximately $50,000 per
year as an administrative expense allowance, (iv) certain registration rights in
the event the Company registers a sale of its equity securities and (v) a
severance payment ($1.5 million during Phase I and $1 million during Phase II)
payable to Mr. Franke if the agreement is terminated for certain reasons. The
agreement contains provisions relating to confidentiality of Company information
and a non-competition clause covering a period of 18 months after termination of
the agreement.
In 1994 and 1995, the Company loaned Mr. Franke $470,282 and $203,136,
respectively, for the purpose of enabling him to pay income taxes attributable
to certain grants of Class B Common Stock made to Mr. Franke in 1994. In January
1996, the Company loaned Mr. Franke an additional $40,000 in connection with
such grants. The loans are each payable in two equal installments on September
26, 2000 and September 26, 2001. The 1994 loan bears interest (payable
semi-annually) at the rate of 8% per annum (11% per annum after maturity) and
the 1995 and 1996 loans bear interest at the rate of 6.02% per annum (10% per
annum after maturity). The loans are secured by a portion of the shares granted
to Mr. Franke, but are otherwise non-recourse to Mr. Franke.
STOCKHOLDERS' AGREEMENT
On August 25, 1994 (the "Effective Date"), the Company, AmWest, GPA Group
plc, a prepetition creditor ("GPA"), and certain designated stockholder
representatives entered into an agreement (the "Stockholders' Agreement") with
respect to certain matters involving the Company. Upon the dissolution of
AmWest, which occurred immediately following the Effective Date, the provisions
of the Stockholders' Agreement with respect to AmWest became binding upon TPG
Partners, L.P., TPG Parallel I, L.P. and Air Partners II, L.P. (collectively the
"TPG Entities"), Continental and Mesa. As used below, "AmWest" means the TPG
Entities, Continental and Mesa in their capacities as successors-in-interest to
AmWest under the Stockholders' Agreement.
The Stockholders' Agreement provides that, for a period lasting until the
first annual meeting after August 25, 1997 (the "Voting Period"), America West's
Board of Directors will be comprised of up to 15 members consisting of (i) nine
members designated by AmWest; (ii) one member designated by GPA for as long as
GPA retains at least 2% of the voting equity securities of the Company (assuming
the exercise of all warrants); and (iii) five independent directors (the
"Independent Directors") initially including (a) three directors designated by
the official committee of the unsecured creditors, (b) one member designated by
the official committee of the equity security holders and (c) one director
designated by the pre-Reorganization
13
<PAGE> 17
Board of Directors from among the executive officers of the Company. The
Stockholders' Agreement provides that during the Voting Period, AmWest and GPA
will vote all shares of Common Stock owned by them in favor of the reelection of
the initially designated Independent Directors for as long as such Independent
Directors continue to serve.
In addition, AmWest and GPA agreed that (i) AmWest will vote in favor of
GPA's nominee to the Company's Board of Directors, and (ii) GPA will vote in
favor of AmWest's nine nominees to the Company's Board of Directors for so long
as (a) AmWest owns at least 5% of the voting equity securities of the Company
and (b) GPA owns at least 2% of the voting equity securities of the Company.
The Stockholders' Agreement also provides that no director nominated by
AmWest will be an employee or officer of Continental. All directors who are
selected by or who are directors of Continental or Mesa and all directors who
are employees or officers of Mesa are required by the Stockholders' Agreement to
recuse themselves from voting on or receiving information on any matters
involving negotiations or direct competition between their respective companies
and America West.
In addition, the Stockholders' Agreement provides that until the first
annual meeting after August 25, 1997, the approval of certain transactions in
which AmWest or its affiliates may participate will require the affirmative vote
of the holders of a majority of the voting power of the outstanding shares of
each class of common stock of the Company entitled to vote, voting as a single
class and excluding any shares owned by AmWest or any of its affiliates (but not
excluding any shares owned by Mesa). Transactions to which such restriction
applies include any merger or consolidation of the Company with or into AmWest
or any of its affiliates, any sale or other disposition of all or a substantial
part of the assets of the Company to AmWest or any of its affiliates and certain
other transactions with or involving the Company in which AmWest or any of its
affiliates would acquire an increased percentage ownership of voting equity
securities in the Company. The stockholder voting requirements specified above
will not apply to a proposed action approved by (i) the Board of Directors and
(ii) at least three Independent Directors, unless otherwise required by
applicable law. The Company does not believe these restrictions will have any
adverse effects on the stockholders of the Company.
Under the terms of the Stockholders' Agreement, neither AmWest nor any
affiliate of AmWest may sell or otherwise transfer any Common Stock (other than
to an affiliate of the transferor) if, after giving effect thereto and any
related transaction, the total number of shares of Class B Common Stock
beneficially owned by the transferor is less than twice the total number of
shares of Class A Common Stock beneficially owned by the transferor, except in
certain circumstances (which include a transfer or disposition of all shares of
Common Stock owned by such person, subject to other applicable provisions of the
Stockholders' Agreement).
In addition, the Stockholders' Agreement provides that, for a period
lasting until the first annual meeting after August 25, 1997, without the prior
written consent of the Company given pursuant to a resolution adopted by the
affirmative vote of not less than 75% of all directors of the Company, AmWest
shall not sell, in a single transaction or related series of transactions,
shares of Common Stock representing 51% or more of the combined voting power of
shares of Common Stock then outstanding other than (i) pursuant to or in
connection with a tender or exchange offer for all shares of Common Stock and
for the benefit of all others of Class B Common Stock on a pro rata basis at the
same price per share and on the same economic terms, (ii) to any affiliate of
AmWest or any affiliate of AmWest's partners, (iii) pursuant to a bankruptcy or
insolvency proceeding, (iv) pursuant to judicial order, legal process, execution
or attachment or (v) in a public offering in any other transaction where the
purchase price per share is equal to or less than the then-current market price
per share.
CERTAIN TRANSACTIONS
The Company has certain alliance agreements with Continental and Mesa. With
Continental, the Company agreed, among other things, to implement certain code
sharing arrangements, coordinate certain flight schedules to maximize
connections between the two airlines, share ticket counter space, link in part
their frequent flyer programs and coordinate ground handling operations. With
Mesa, America West has entered into code sharing agreements that establish Mesa
as a feeder carrier for the Company at its hubs in Phoenix
14
<PAGE> 18
and Columbus. The agreements are designed to enhance significantly the Company's
growth in revenue passenger miles and operating results. Continental and Mesa
are principal stockholders of the Company. See "Principal Stockholders."
Pursuant to a code sharing agreement with Mesa entered into in December
1992 (which was prior to Mesa becoming a significant stockholder), the Company
assesses a per passenger charge for facilities, reservations and other services
from Mesa for enplanements on the Mesa system. Such payments by Mesa to the
Company totalled approximately $2.9 million for 1995. The Company entered into
several agreements in 1994 and 1995 with Continental relating to code-sharing
arrangements and ground handling operations. The Company paid Continental
approximately $14 million and received approximately $11 million from
Continental in 1995 for such services.
In connection with the Company's reorganization in 1994, Fidelity and
Lehman acquired $113 million and $10 million, respectively, of the Company's
11 1/4% Senior Unsecured Notes due 2001 (the "11 1/4 Notes"). In August 1995,
the Company repurchased $48 million principal amount of the 11 1/4% Notes and
exchanged the remaining $75 million principal amount of such notes for $75
million principal amount of 10 3/4% Senior Unsecured Notes due 2005. In
connection with such transaction, Fidelity was paid a fee equal to 3 5/8% of the
principal amount of the new notes ($2,718,750). Fidelity and Lehman are
principal stockholders of the Company. See "Principal Stockholders."
In connection with the Company's reorganization in 1994, in exchange for
certain concessions principally arising from cancelation of the right of GPA to
lease to America West 10 Airbus A320 aircraft at specified rates, GPA received
(i) 900,000 shares of Class B Common Stock; (ii) 1,384,615 Warrants to purchase
shares of Class B Common Stock at an exercise price of $12.74 per share; (iii) a
cash payment of approximately $30.5 million; and (iv) the rights to require the
Company to lease up to eight aircraft of the types operated by the Company,
which rights must be exercised by June 30, 1999. In addition, pursuant to the
Stockholders' Agreement, GPA has the right to designate one director of America
West for so long as GPA owns at least 2% of the voting securities of America
West. GPA's current designee is John F. Tierney.
The Company has entered into various aircraft acquisitions and leasing
arrangements with GPA at terms comparable to those obtained from third parties
for similar transactions. The Company currently leases 17 aircraft from GPA; the
rental payments for such leases amounted to $65.7 million for 1995. As of
December 31, 1995, the Company was obligated to pay approximately $1.0 billion
under these leases which expire at various times throughout the year 2013.
William A. Franke, Chairman of the Board and Chief Executive Officer of the
Company, is a Director and Chairman of the Board of Airplanes Limited and a
Controlling Trustee and Chairman of Airplanes U.S. Trust. Such entities were
formed to acquire indirectly certain aircraft from GPA, three of which are
leased indirectly to the Company.
The Company has made certain loans to William A. Franke, the Chairman of
the Board and Chief Executive Officer of the Company. See "Employment
Agreement."
COMPENSATION COMMITTEE INTERLOCKS
In 1995, the members of the Company's Compensation Committee were Messrs.
Kraemer, Bollenbach, Bradley and Schifter. Mr. Schifter is a vice president of
TPG Advisors, which is the general partner of TPG GenPar, the general partner of
TPG. TPG received Class A Common Stock and Class B Common Stock and warrants to
purchase Class B Common Stock in exchange for its investment in America West
pursuant to the Reorganization. See "Stockholders' Agreement." Mr. Schifter
serves of counsel to the law firm of Arnold & Porter, where he was a partner
until July 1994. America West from time to time engages Arnold & Porter for
certain legal services, none of which are performed by Mr. Schifter.
SECURITIES TRANSACTION REPORTING
To the Company's knowledge, based solely on the Company's review of the
copies of such reports received by the Company, the Company believes that during
the fiscal year ended December 31, 1995, all
15
<PAGE> 19
required reports relating to ownership of the Company's securities applicable to
its officers, directors and greater than 10% beneficial owners were properly
filed with the Securities and Exchange Commission, except each of Messrs.
Derieg, Whalen and Vescuso did not timely file a report relating to a grant of
options to purchase 30,000 shares of Class B Common Stock under the Incentive
Plan. The reports were amended promptly.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP were the Company's independent accountants for 1995.
Each of the Audit Committee and the Board of Directors has approved the
selection of KPMG Peat Marwick LLP to audit the Company's financial statements
for 1996. KPMG Peat Marwick LLP will have a representative at the Meeting who
will have the opportunity to make a statement, if the representative desires to
do so, and will be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
To be considered at the Company's 1997 Annual Meeting of Stockholders, a
stockholder proposal must be received in proper form at the Company's principal
executive office not less than 60 nor more than 90 days prior to the date of
such Annual Meeting and must otherwise comply with the requirements of the
Company's bylaws. To be considered for inclusion in the Company's Proxy
Statement relating to the 1997 Annual Meeting of Stockholders, a stockholder
proposal must be received in proper form at the Company's principal executive
office no later than December 4, 1996, and must otherwise comply with the
requirements of Rule 14a-8 under the Exchange Act.
ANNUAL REPORT AND INFORMATION FOR STOCKHOLDERS
The annual report to stockholders, including financial statements,
accompanies this Proxy Statement but does not constitute a part of the proxy
soliciting materials. THE COMPANY WILL FURNISH A COPY WITHOUT CHARGE OF ITS
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995, INCLUDING
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULE BUT WITHOUT EXHIBITS,
TO EACH PERSON WHOSE VOTE IS SOLICITED BY THIS PROXY STATEMENT, UPON WRITTEN
REQUEST TO PATRICIA PENWELL, SECRETARY, AMERICA WEST AIRLINES, INC., 4000 EAST
SKY HARBOR BOULEVARD, PHOENIX, ARIZONA 85034. Upon request and payment of the
Company's reasonable expense of furnishing the exhibit requested, the Company
will furnish any exhibit to the Form 10-K to any person whose vote is solicited
by this Proxy Statement.
OTHER MATTERS
It is not anticipated that there will be presented to the Meeting any
business other than election of directors. If any other matters requiring the
vote of the stockholders arise, including the question of adjourning the meeting
and other matters not known reasonably in advance by the Company, the persons
appointed as proxies in the accompanying proxy will vote on such matters
according to their best judgment.
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<PAGE> 20
PROPOSAL:
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS URGES YOU TO VOTE FOR THE NOMINEES FOR THE BOARD OF
DIRECTORS DESCRIBED BELOW. PROXIES WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY
OTHERWISE IN THEIR PROXIES, SUBJECT TO THE CONDITION THAT IF ANY OF THE NAMED
NOMINEES SHOULD BE UNABLE TO SERVE, DISCRETIONARY AUTHORITY IS RESERVED TO VOTE
FOR A SUBSTITUTE. NOMINEES FOR DIRECTOR WILL BE ELECTED BY PLURALITY OF THE
VOTES CAST AT THE MEETING.
It is proposed that 14 directors be elected, each to hold office for a term
of one year and until his or her successor shall have been elected and
qualified. Each of the following nominees is a director of the Company at the
present time. The Company's Restated Certificate of Incorporation and By-laws
provide that the Board of Directors shall consist of up to 15 members, which
number may be increased or decreased by a resolution duly adopted by the Board
of Directors. Pursuant to the terms of the Stockholders' Agreement among the
Company and certain of its principal stockholders, the Board of Directors is to
be comprised of up to 15 members, consisting of nine members designated by TPG,
Continental and Mesa (the "AmWest Affiliates"), one member designated by GPA and
five independent directors. See "Stockholders' Agreement." Currently, the Board
of Directors includes only 14 seats. However, the AmWest Affiliates have the
right under the Stockholders' Agreement to designate one additional board member
and, upon the exercise of such right, the size of the Board of Directors would
increase to 15. The Company has been informed that the AmWest Affiliates have no
present intention to exercise their right to designate such member of the Board
of Directors.
WILLIAM A. FRANKE -- AGE 58. Chairman of the Board and Chief Executive
Officer -- (Executive Committee). Mr. Franke was named Chairman of the Board of
Directors in September 1992. On December 31, 1993, Mr. Franke was also elected
to serve as the Company's Chief Executive Officer. In addition to his
responsibilities at America West, Mr. Franke serves as president of Franke &
Company, Inc., a financial services company he has owned since May 1987. From
November 1989 until June 1990, Mr. Franke served as the Chairman of Circle K
Corporation's executive committee with the responsibility for Circle K
Corporation's restructuring. In May 1990, the Circle K Corporation filed a
voluntary petition to reorganize under Chapter 11 of the United States
Bankruptcy Code. From June 1990 until August 1993, Mr. Franke served as the
chairman of a special committee of directors overseeing the reorganization of
the Circle K Corporation. From 1990 until 1993, Mr. Franke also served in
various other capacities at Circle K Corporation. Mr. Franke was also involved
in the restructuring of the Valley National Bank of Arizona (now Bank One of
Arizona). Mr. Franke serves as a director of Phelps Dodge Corp., Central
Newspapers Inc. and the Air Transport Association of America. Mr. Franke serves
as a Director and Chairman of the Board of Airplanes Limited and a Controlling
Trustee and Chairman of Airplanes U.S. Trust, entities formed to acquire
indirectly certain aircraft from GPA.
JULIA CHANG BLOCH -- AGE 54. Ms. Bloch has been a member of America West's
Board of Directors since August 26, 1994. She is the group executive vice
president, corporate relations of Bank of America Corporation and has held such
position since June 1993. Ms. Bloch served as the U.S. Ambassador to Nepal from
September 1989 through May 1993. Ms. Bloch is a board member of the American
Himalaya Foundation and serves as a trustee of the Asian Art Museum and the Asia
Society.
STEPHEN F. BOLLENBACH -- AGE 53. (Compensation Committee). Mr. Bollenbach
has been a member of America West's Board of Directors since August 26, 1994. He
has been chief executive officer and a director of Hilton Hotels Corporation
since February 1996. He served as senior executive vice president and chief
financial officer of The Walt Disney Company from May 1995 to February 1996.
Prior to May 1995, he was president and chief executive officer of Host Marriott
Corp. He served as executive vice president and chief financial officer of The
Marriott Corporation from 1992 until 1993. Mr. Bollenbach served as chief
financial officer for the Trump Organization from 1990 to 1992.
FREDERICK W. BRADLEY, JR. -- AGE 69. (Compensation Committee, Executive
Committee). Mr. Bradley has been a member of America West's Board of Directors
since September 1992. Prior to such time, Mr. Bradley was a senior advisor with
Simat, Helliesen & Eichner, Inc. Mr. Bradley formerly was a
17
<PAGE> 21
senior vice president of Citibank/Citicorp's Global Airline and Aerospace
business. Mr. Bradley joined Citibank/Citicorp in 1958. In addition, Mr. Bradley
is a member of the board of directors of Shuttle, Inc. (USAir Shuttle), Banner
Aerospace and the Institute of Air Transport, Paris, France. Mr. Bradley also is
chairman of the board of directors of Aircraft Lease Portfolio Securitization
92-1 Ltd. and Aircraft Lease Portfolio Securitization 94-1 Ltd.
JAMES G. COULTER -- AGE 36. (Executive Committee). Mr. Coulter has been a
member of America West's Board of Directors since August 26, 1994. Since 1992,
Mr. Coulter has been a managing director of Texas Pacific Group, an investment
firm. From 1986 to August 1992, Mr. Coulter was vice president of Keystone, Inc.
(formerly Robert M. Bass Group, Inc.), a private investment firm based in Fort
Worth, Texas. Mr. Coulter also serves as a director of American Savings Bank and
Allied Waste Industries, Inc.
JOHN F. FRASER -- AGE 65. Mr. Fraser has been a member of America West's
Board of Directors since August 26, 1994. He is vice chairman of Russel Metals,
Inc., a metals distribution and processing company that was formed when Federal
Industries Ltd. and FedMet, Inc. were joined together in May 1995. Mr. Fraser
served as chairman of Federal Industries Ltd. from May 1992 to May 1995; as
chairman and chief executive officer from March 1991 to May 1992; and as
president and chief executive officer from May 1978 to March 1991. Mr. Fraser is
a director of Air Canada, Bank of Montreal, Centra Gas Manitoba Inc., Coca-Cola
Beverages Limited, Inter-City Products Corporation, Shell Canada Limited and The
Thomson Corporation.
JOHN L. GOOLSBY -- AGE 54. (Audit Committee). Mr. Goolsby has been a
member of America West's Board of Directors since August 26, 1994. He has been
the president and a director of The Hughes Corporation and The Howard Hughes
Corporation (formerly named the Summa Corporation), the principal operating
companies of the Howard Hughes Estate, since 1988, and has been the chief
executive officer of those companies since 1990. In addition, Mr. Goolsby serves
as a director of Nevada Power Company and Bank of America Nevada. He also serves
as a trustee of The Donald W. Reynolds Foundation.
RICHARD C. KRAEMER -- AGE 52. (Compensation Committee). Mr. Kraemer has
been a member of America West's Board of Directors since September 1992. Until
March 1996, he served as a director and as president, chief executive officer
and chief operating officer of UDC Homes, Inc., a Phoenix-based homebuilding
company which he joined in 1975. UDC Homes, Inc. filed for protection under
Chapter 11 of the U.S. Bankruptcy Code in May 1995. The plan for the
reorganization of UDC Homes, Inc. was confirmed by the bankruptcy court on
October 3, 1995 and consummated on November 16, 1995.
JOHN R. POWER, JR. -- AGE 40. (Executive Committee). Mr. Power has been a
member of America West's Board of Directors since August 26, 1994. He is
president of The Patrician Corporation, an investment company. Prior to joining
The Patrician Corporation, Mr. Power served as senior manager at Continental
Bank. Mr. Power also serves as a director of NRS Services and a subsidiary of
the J.I. Case Corporation.
LARRY L. RISLEY -- AGE 51. (Audit Committee). Mr. Risley has been a member
of America West's Board of Directors since August 26, 1994. He has been the
chief executive officer and chairman of the board of directors of Mesa since the
founding of the company in 1983. From 1979 to 1982, Mr. Risley was president of
Mesa Aviation Services, Inc.
FRANK B. RYAN -- AGE 59. (Audit Committee). Dr. Ryan has been a member of
America West's Board of Directors since March 17, 1995. Since August 1990, Dr.
Ryan has been a professor of mathematics and of computational and applied
mathematics, and was formerly the vice president of external affairs of Rice
University. From 1988 to 1990, Dr. Ryan served as president and chief executive
officer of Contex Electronics, Inc., an electronic component manufacturing
company. Dr. Ryan serves on the board of directors of Danielson Holding
Corporation and Sequoia Systems, Inc. and as a governor advisor to Rice
University.
RICHARD P. SCHIFTER -- AGE 43. (Compensation Committee). Mr. Schifter has
been a member of America West's Board of Directors since August 26, 1994. He has
been a managing director of Texas Pacific Group, an investment firm, since July
1994. Mr. Schifter serves of counsel to the Washington D.C.
18
<PAGE> 22
based law firm of Arnold & Porter, where he was an associate from 1979 to 1986
and a partner from 1986 to July 1994.
JOHN F. TIERNEY -- AGE 50. Mr. Tierney has served as a member of America
West's Board of Directors since December 1993. Mr. Tierney is the assistant
chief executive and finance director of GPA Group plc, an Irish aircraft leasing
concern, and has served GPA in such capacity since 1993. From 1981 to 1993, he
served as chief financial officer of GPA.
RAYMOND S. TROUBH -- AGE 69. (Audit Committee). Mr. Troubh has been a
member of America West's Board of Directors since August 26, 1994. He is a
financial consultant and currently serves on the board of directors of ADT
Limited, Applied Power Inc., ARIAD Pharmaceuticals, Inc., Becton, Dickinson and
Company, Benson Eyecare Corporation, Diamond Offshore Drilling, Inc., Foundation
Health Corporation, General American Investors Company, Manville Corporation,
Olsten Corporation, Petrie Stores Corporation, Riverwood International
Corporation, Time Warner Inc., Triarc Companies, Inc. and WHX Corporation.
19
<PAGE> 23
AMERICA WEST AIRLINES[tm]
<PAGE> 24
[Front of Card]
PROXY
AMERICA WEST AIRLINES, INC.
ANNUAL MEETING OF STOCKHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF AMERICA WEST AIRLINES, INC.
The undersigned hereby appoints William A. Franke and W. Douglas Parker and
each of them as proxies with full power of substitution, to vote all shares of
Class A Common Stock and Class B Common Stock of America West Airlines, Inc.
that the undersigned is entitled to vote at the Annual Meeting of Stockholders
thereof to be held on May 23, 1996, or at any adjournment thereof, as follows:
Any executed proxy which does not designate a vote shall be deemed to grant
authority for any item not designated.
- --------------------------------------------------------------------------------
[Back of Card]
Please mark your vote as indicated in this example. / X /
1. ELECTION OF DIRECTORS / / FOR all nominees listed below
/ / WITHHOLD AUTHORITY for all nominees listed below
William A. Franke, Julia Chang Bloch, Stephen F. Bollenbach, Frederick W.
Bradley, Jr., James G. Coulter, John F. Fraser, John L. Goolsby, Richard C.
Kraemer, John R. Power, Jr., Larry L. Risley, Frank B. Ryan, Richard P.
Schifter, John F. Tierney and Raymond S. Troubh.
INSTRUCTION: to withhold authority to vote for any individual nominee, write
that nominee's name in the space provided here.
-------------------------------
Please check the following box if you plan to attend the Annual Meeting of
Stockholders in person. / /
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE DIRECTED, WILL
BE VOTED "FOR ALL NOMINEES" AND IN ACCORDANCE WITH THE DISCRETION OF THE PERSON
VOTING THE PROXY WITH RESPECT TO ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE
MEETING.
YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO A VOTE THEREON.
Dated: , 1996
----------------------------
- ----------------------------------------
Signature
Please sign exactly as name appears on this card. Joint owners should each sign.
Executors, administrators, trustees, etc., should give their full titles.
PLEASE COMPLETE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED ENVELOPE.
