<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
WESTERN PACIFIC 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)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
__________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
__________________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
__________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
__________________________________________________________________
(5) Total fee paid:
__________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
__________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
__________________________________________________________________
(3) Filing Party:
__________________________________________________________________
(4) Date Filed:
__________________________________________________________________
<PAGE>
[LETTERHEAD]
May 9, 1997
To Our Stockholders:
It is my pleasure to invite you to the 1997 Annual Meeting of
Stockholders of Western Pacific Airlines, Inc. The meeting will be held on
Thursday, June 19, 1997 at 10:00 a.m., local time, at The Antlers Doubletree
Hotel, Summit Ballrooms II and III, 4 South Cascade Avenue, Colorado Springs,
Colorado. The enclosed Notice of Annual Meeting of Stockholders and Proxy
Statement covers the formal business to be conducted at the meeting, which
includes the election of two Directors and approval of the proposal to amend
the Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock.
It is important that your shares are represented at this meeting,
whether or not you attend the meeting, and regardless of the number of shares
you own. To be sure your shares are represented, please complete, date, sign
and return the enclosed proxy card in the accompanying envelope as soon as
possible. If you attend the meeting and wish to vote in person, your vote at
the meeting will supersede your proxy.
Sincerely,
/s/ Robert A. Peiser
Robert A. Peiser
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
WESTERN PACIFIC AIRLINES, INC.
2864 SOUTH CIRCLE DRIVE, SUITE 1100
COLORADO SPRINGS, COLORADO 80906
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 19, 1997
To the Stockholders of Western Pacific Airlines, Inc.:
The 1997 Annual Meeting of Stockholders of Western Pacific Airlines,
Inc., a Delaware corporation (the "Company"), will be held on Thursday, June
19, 1997 at 10:00 a.m. local time at The Antlers Doubletree Hotel, Summit
Ballrooms II and III, 4 South Cascade Avenue, Colorado Springs, Colorado, for
the following purposes:
1. To elect two persons to the Company's Board of Directors to serve
for a three year term until the year 2000 Annual Meeting of Stockholders or
until their successors are duly elected and qualified;
2. To amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock to 40,000,000.
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 21, 1997
as the record date (the "Record Date") for the Annual Meeting. Only
stockholders of record at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. A list of the
Company's stockholders entitled to vote at the Annual Meeting will be
available for examination during normal business hours at the Company's
headquarters at the address listed above during the ten days prior to the
meeting date.
You are cordially invited to attend the Annual Meeting. Whether or not
you plan to attend the Annual Meeting in person, please complete, date and
sign the accompanying proxy card and return it promptly in the enclosed
return envelope to ensure that your shares are represented and voted in
accordance with your wishes. You may revoke your proxy by following the
procedures set forth in the accompanying Proxy Statement. If you choose, you
may still vote in person at the Annual Meeting even though you previously
submitted your proxy.
By Order of the Board of Directors
/s/ Nina A. Ortega
Nina A. Ortega
SECRETARY
Colorado Springs, Colorado
May 9, 1997
<PAGE>
WESTERN PACIFIC AIRLINES, INC.
2864 SOUTH CIRCLE DRIVE, SUITE 1100
COLORADO SPRINGS, COLORADO 80906
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being furnished
in connection with the solicitation of proxies by and on behalf of the Board
of Directors of Western Pacific Airlines, Inc., a Delaware corporation (the
"Company"), for use at the annual meeting of stockholders (the "Annual
Meeting"). The Annual Meeting will be held on Thursday, June 19, 1997 at
10:00 a.m. local time at The Antlers Doubletree Hotel, Summit Ballrooms II
and III, 4 South Cascade, Colorado Springs, Colorado. The purposes of the
Annual Meeting are set forth in the accompanying Notice of Annual Meeting of
Stockholders. This Proxy Statement and the accompanying proxy card are being
mailed beginning May 19, 1997 to holders of common stock, $.001 par value
("Common Stock") of the Company on April 21, 1997 (the "Record Date"). At
the close of business on the Record Date, there were 13,411,921 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting. The
Company's executive offices are located at 2864 South Circle Drive, Suite
1100, Colorado Springs, Colorado 80906.
VOTING AT THE MEETING
Each holder of record of Common Stock is entitled to cast one vote per
share. The presence, in person or by proxy, of the holders of a majority of
the votes represented by the outstanding shares of Common Stock entitled to
vote at the Annual Meeting is necessary to constitute a quorum for the
conduct of business at the Annual Meeting. Abstentions will be counted as
shares present for purposes of determining whether a quorum is present.
At the Annual Meeting, directors of the Company will be elected by the
affirmative vote of a plurality of the outstanding shares of Common Stock
represented and entitled to be voted, which means the two nominees receiving
the highest vote totals will be elected. Shares as to which authority to
vote on the election of directors has been withheld and broker non-votes(1)
will not be counted as votes cast for nominees and will have no effect on the
outcome of the voting.
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote at the Annual Meeting is required for approval of the
amendment of the Company's Restated Certificate of Incorporation. Shares as
to which authority to vote on the amendment has been withheld will not be
counted as votes cast for the amendment and will have no effect on the
outcome of voting. Broker non-votes will be counted as votes cast against the
proposed amendment.
- -----------------
(1) Broker non-votes are limited proxies submitted by brokers or other
nominees who do not have the required voting authority from beneficial owners.
2
<PAGE>
All shares of Common Stock represented by properly executed proxies
received prior to or at the Annual Meeting and not revoked will be voted in
accordance with the instructions indicated in such proxies. If no such
instructions are indicated, such shares will be voted FOR the election of the
two nominees for director, FOR the amendment of the Restated Articles of
Incorporation, and, in the discretion of the proxy holders, on any other
matter that may properly come before the Annual Meeting. Any stockholder may
revoke his or her proxy at any time prior to its use by filing with the
Secretary of the Company written revocation of his or her proxy, giving a
duly executed proxy bearing a later date or voting in person at the Annual
Meeting. Attendance by a stockholder at the Annual Meeting will not in
itself revoke his or her proxy.
In addition to solicitation by mail, directors, officers and regular
employees of the Company may solicit proxies by telephone or personal
contact, for which such persons will receive no additional compensation.
Banking institutions, brokerage firms, custodians, trustees, nominees and
fiduciaries will be requested to forward solicitation materials to the
beneficial owners of Common Stock held of record by them, and will be
reimbursed for their reasonable forwarding expenses upon their request. All
costs of the solicitation of proxies will be paid by the Company.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Under the Company's Restated Certificate of Incorporation and Bylaws,
the Board of Directors has the authority to determine the size of the Board,
which must not be less than three nor more than 15 members. The Board of
Directors presently consists of seven members. The Company's Restated
Certificate of Incorporation provides for a classified Board of Directors
under which there are three classes of Directors, all of which are as equal
in number as possible. Edward R. Beauvais and Ivan Irwin, Jr. are the Class
III directors serving terms expiring at the Annual Meeting and are the
nominees for election as directors. George E. Leonard and Clayton I. Bennett
are the Class I directors, whose terms expire at the 1998 Annual Meeting, and
Glenn M. Stinchcomb, James R. Wikert and Robert A. Peiser are the Class II
directors, whose terms expire at the 1999 Annual Meeting. The directors
elected at the Annual Meeting will be elected to a three year term and will
hold office until the year 2000 Annual Meeting of Stockholders and until
their successors are duly elected and qualified. Unless authority is
withheld, it is intended that the shares represented by proxies at the Annual
Meeting will be voted in favor of the two nominees named below. Both
nominees have agreed to serve if elected.
If any nominee is not available for election at the time of the Annual
Meeting, the shares of Common Stock represented by proxy at the Annual
Meeting will be voted "for" the election of such other person as the Board of
Directors of the Company may recommend, unless the stockholder executing such
proxy withholds authority to vote for the election of directors.
3
<PAGE>
NOMINEES FOR CLASS III DIRECTORS FOR TERM EXPIRING IN 2000
The following information concerning the nominees for election
as Class III directors has been provided by the respective
nominees.
EDWARD R. BEAUVAIS. Mr. Beauvais, age 60, founded the Company
in 1994 and is Chairman of the Board and a Director. From 1994
until November 1996, Mr. Beauvais was President, Chief Executive
Officer and Chairman of the Company's Board of Directors. Prior to
founding the Company, Mr. Beauvais served as General Manager of
Aviation Consulting Group from 1992 through 1994. From 1981
through 1992, Mr. Beauvais was Chairman and Chief Executive Officer
of America West Airlines ("America West"). America West filed for
Chapter 11 protection in June 1991, and Mr. Beauvais resigned as
Chairman of America West on July 31, 1992. America West emerged
from Chapter 11 in August 1994.
IVAN IRWIN, JR. Mr. Irwin, age 63, was elected to the Board
of Directors of the Company in 1995. Since 1994, Mr. Irwin has
been Vice President of Hunt Petroleum of Texas, Inc. ("HPTI"), a
significant stockholder of the Company, and Vice Chairman and
Executive Vice President of Hunt Petroleum Corporation, the parent
company of HPTI and a corporation primarily engaged in oil and gas
exploration and production. See "Beneficial Ownership of Shares"
and "Certain Transactions Involving the Company." Prior to
assuming his position with HPTI, Mr. Irwin was engaged for over 30
years in the private practice of law in Dallas, Texas, including
from February 1990 through June 1994, when he was a partner in the
Dallas, Texas office of the law firm of Vinson & Elkins, L.L.P.
DIRECTORS CONTINUING IN OFFICE
The following information concerning the directors continuing
in office has been provided by the respective directors.
CLASS II DIRECTORS-TERM EXPIRES IN 1999
Glenn M. Stinchcomb. Mr. Stinchcomb, age 69, was elected to the Board
of Directors of the Company in 1995. From October 1991 until his retirement
in 1996, Mr. Stinchcomb was a director of The Oklahoma Publishing Company
("OPUBCO"), a publishing company. He was Vice President and Treasurer of
OPUBCO from October 1991 to July 1995. Mr. Stinchcomb also serves as a
director of Gaylord Entertainment Company ("GEC"), a diversified
entertainment and communications company. He was Chief Financial Officer and
Treasurer of GEC from 1974 to 1991, and he was Vice President of GEC from
1986 to 1991. Edward L. Gaylord, a significant stockholder of the Company,
is an affiliate of GEC. See "Beneficial Ownership of Shares" and "Certain
Transactions Involving the Company."
4
<PAGE>
JAMES R. WIKERT. Mr. Wikert, age 48, was elected to the Board of
Directors of the Company in 1995. Since 1993, Mr. Wikert has been Chief
Executive Officer of Express One International, Inc. ("Express One"), a cargo
and charter airline, and is the controlling stockholder of Aircorp, Inc., an
enterprise engaged in the ownership, lease and/or sale of commercial and
general aviation aircraft. From 1987 to 1993, Mr. Wikert was the President
of Express One. Mr. Wikert is the son-in-law of a controlling shareholder of
HPTI, a significant stockholder of the Company. See "Beneficial Ownership of
Shares" and "Certain Transactions Involving the Company."
ROBERT A. PEISER. Mr. Peiser, age 49, was elected to the Board of
Directors of the Company in November 1996, when he joined the Company as
President and Chief Executive Officer. Prior to joining the Company, Mr.
Peiser served as Vice Chairman and Chief Executive Officer of FoxMeyer Drug
Company from August 1996 through November 1996. In addition, Mr. Peiser was
Executive Vice President - Finance and Chief Financial Officer of Trans World
Airlines, Inc. ("TWA") from August 1994 through August 1996 following TWA's
emergence from Chapter 11 bankruptcy. Prior to his employment with TWA, Mr.
Peiser was a consultant with BBK, Ltd., a turnaround consulting firm based in
Southfield, Michigan, from November 1992 through July 1994. Prior to his
employment with BBK, Ltd., Mr. Peiser was the President and Chief Executive
Officer of Orange-co, Inc., a citrus processing company based in Bartow,
Florida.
CLASS I DIRECTORS-TERM EXPIRES IN 1998
CLAYTON I. BENNETT. Mr. Bennett, age 37, was elected to the Board of
Directors of the Company in 1995. Since prior to April 1992, he has been the
Real Estate and Investment Manager for The Oklahoma Publishing Company, a
publishing company. Mr. Bennett is the son-in-law of Edward L. Gaylord, a
significant stockholder of the Company. See "Beneficial Ownership of Shares"
and "Certain Transactions Involving the Company."
GEORGE E. LEONARD. Mr. Leonard, age 56, was elected to the Board of
Directors of the Company in November 1996, when he joined the Company as Vice
President - Finance and Chief Financial Officer. Prior to joining the
Company, Mr. Leonard was President and Chief Executive Officer of GEL
Management, Inc., a company engaged in real estate and financial management
and consulting services, for two separate periods, from July 1996 through
October 1996, and from December 1991 through December 1995. From January
1996 through July 1996, Mr. Leonard was Chairman and Chief Executive Officer
of Consumer Guaranty Corporation, an asset restructuring company.
5
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held 11 regular and four special meetings in
1996. Each director attended 75% or more of the total number of meetings of
the board and the committees of which he was a member that were held during
the period for which he has been a director or committee member.
The Company's Board of Directors has established Audit, Compensation and
Nominating Committees. In November 1996, the Board of Directors also
established a Legal Committee, which was dissolved in April 1997. The Audit
Committee is comprised only of outside directors. The Compensation and
Nominating Committees each have two directors who are neither officers nor
employees of the Company. The Legal Committee, when it was in existence,
also had as members two directors who were neither officers nor employees of
the Company. During 1996, the Audit Committee held two meetings and the
Compensation Committee held five meetings, while the Legal and Nominating
Committees did not meet (the Legal Committee having been created in November
1996 and dissolved in April 1997).
The duties of the Audit Committee include recommending to the Board of
Directors the selection of independent public accountants to audit the
financial statements of the Company, reviewing the activities and reports of
the independent public accountants and reporting the results of such review
to the Board of Directors. The Audit Committee also monitors the internal
accounting controls of the Company. The members of the Audit Committee are
Glenn M. Stinchcomb (Chairman) and Ivan Irwin, Jr.
The duties of the Compensation Committee include providing a general
review of the Company's compensation and benefit plans to ensure that they
meet the Company's objectives. The Compensation Committee has the sole
authority to administer and to grant awards under the Company's 1994 Amended
and Restated Stock Option Plan (the "Option Plan") and also acts as
Administrator under the Company's 1995 Amended and Restated Directors' Option
Plan (the "Directors' Plan") and the 1996 Restricted Stock Plan for
Non-Employee Directors (the "Restricted Stock Plan"). In addition, the
Compensation Committee approves the Chief Executive Officer's compensation
and reviews the Chief Executive Officer's recommendations with respect to (i)
the compensation of all other officers of the Company, (ii) the grant of
awards under the Company's then-existing compensation and benefit plans and
(iii) the adoption of major compensation policies and practices. The
Compensation Committee consists of Ivan Irwin, Jr. (Chairman) and Clayton I.
Bennett.
The duties of the Nominating Committee include recommending to the Board
of Directors nominees for election as directors of the Company. Members of
the Nominating Committee are Clayton I. Bennett (Chairman) and James R.
Wikert.
6
<PAGE>
Prior to its dissolution, the duties of the Legal Committee included
recommending and reviewing outside counsel to the Board, reviewing with the
Company's internal counsel and outside counsel all legal affairs affecting
the Company and the Board and seeking the advice of outside counsel from time
to time with respect to the discharge by the Board of its responsibilities to
the Company and its stockholders. Members of the Legal Committee were Ivan
Irwin, Jr. (Chairman) and Glenn M. Stinchcomb.
EXECUTIVE OFFICERS
Set forth below is certain information relating to the current executive
officers of the Company. Each executive officer serves at the pleasure of
the Board of Directors, subject to the employment agreements described below.
Name Age Position
---- --- --------
Robert A. Peiser(1). . . . . . . . 49 President, Chief Executive
Officer and Director
Edward R. Beauvais(1). . . . . . . 60 Chairman of the Board
George E. Leonard(1) . . . . . . . 56 Vice President - Finance, Chief
Financial Officer and Director
Mark Coleman . . . . . . . . . . . 50 Senior Vice President - Marketing
and Planning
Timothy D. Komberec. . . . . . . . 48 Vice President - Flight
Operations
Donald E. Applegarth . . . . . . . 34 Vice President - Information
Systems and Chief Information
Officer
Glenn S. Goldberg. . . . . . . . . 39 Vice President - Human Resources
and Administration
Martin J. Wax. . . . . . . . . . . 43 Vice President - Technical
Operations and Vendor Administration
- -----------------
(1) Biographical information with respect to Messrs. Peiser,
Beauvais and Leonard is provided under the heading "Election
of Directors."
7
<PAGE>
MARK COLEMAN. Mr. Coleman joined the Company as Senior Vice President -
Marketing and Planning in November 1996. From July 1994 until August 1996,
he was Senior Vice President of Marketing for Trans World Airlines, Inc.
("TWA"), working on TWA's restructuring and reorganization following TWA's
emergence from Chapter 11 bankruptcy. From September 1992 through July 1994,
Mr. Coleman was Vice President and General Manager of Avis Wiscom
International, Ltd., a company providing technology services to the travel
industry. From December 1981 through September 1992, Mr. Coleman was Senior
Vice President of America West Airlines, Inc.
TIMOTHY D. KOMBEREC. Mr. Komberec joined the Company as Vice
President-Flight Operations in September 1994. Prior to joining the Company,
Mr. Komberec was employed by Empire Airlines as Director of Operations from
January 1993 through August 1994, and by International Airlines Services as
an Aviation Consultant from September 1991 through December 1992. Prior to
Empire Airlines, Mr. Komberec was Vice President of Flight Operations for NPA
Inc. dba United Express (which merged in October 1990 into WestAir Airlines)
from April 1987 to September 1991. Mr. Komberec is a licensed Airline
Transport Pilot, Commercial Pilot, Flight Instructor and Ground Instructor
with turbojet and rotary ratings and 12,700 hours in flight time as pilot in
command and 2,200 hours as a flight instructor.
DONALD E. APPLEGARTH. Mr. Applegarth has been Vice President-Information
Systems since September 1, 1995. Mr. Applegarth joined the Company as
Manager, Marketing Automation in October 1994 and was promoted to Director of
Market Automation in June 1995. Prior to Joining the Company, he served as
Manager of Systems Services for Morris Air from March 1993 through October
1994, and as Station Manager-Seattle Station for America West Airlines from
November 1983 through February 1993, where he also served as chairman of
America West's system review board with responsibility for review and design
of field station software development. Mr. Applegarth has extensive
experience in client-server architecture and software design, and since June
1992 has owned his own computer systems company.
GLENN S. GOLDBERG. Mr. Goldberg joined the Company as Vice
President-Human Resources and Administration in January 1995. From 1992
until joining the Company, Mr. Goldberg served as Vice President-Human
Resources and Administration for Amvest Corporation, a coal and natural gas
energy company, as Manager of Human Resources Programs for General Electric
Capital Corporation, a finance company, from 1990 to 1992, and as Director of
Human Resources & Administration for Kelly Communications from 1987 to 1990.
From 1981 to 1987 Mr. Goldberg was employed with People Express
Airlines/Continental Airlines in various capacities including Operations and
Facilities Director, Training Director and Employment Manager.
8
<PAGE>
MARTIN J. WAX. Mr. Wax joined the Company in January 1995 and is
currently Vice President-Technical Operations and Vendor Administration.
From August 1995 through February 1997, Mr. Wax was the Company's Vice
President - Purchasing, and from January 1995 through July 1995, he served as
the Company's Director of Purchasing. From August 1994 through December 1994,
he was a consultant to AAR Corporation in connection with the reengineering
of materials programs for the airline industry. From September 1994 to
December 1994 he was a consultant to UltrAir in connection with the
liquidation of airline inventory. Mr. Wax was Director of Vendor
Administration, Traffic and Materials Sales for Continental Airlines from
February 2, 1992 through July 1994.
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth, as of the Record Date, the beneficial
ownership, as defined by regulations of the Securities and Exchange
Commission (the "Commission") of Common Stock held by: (i) each person or
group of persons known to the Company to beneficially own more than five
percent of the outstanding shares of Common Stock; (ii) each director of the
Company and each nominee for director; (iii) each current executive officer
named in the Summary Compensation Table below; (iv) up to two executive
officers who were employed by the Company in 1996 and who, had they remained
employed by the Company at December 31, 1996, would have been included among
the executive officers required to be named in the Summary Compensation
Table; and (v) all executive officers and directors as a group. Except as
noted below, each of the persons listed has sole investment and voting power
with respect to the shares of Common Stock included in the table. The number
of shares and percentage of ownership of Common Stock for each person assumes
that shares of Common Stock issuable upon the exercise of stock options to
such person (exclusive of others) exercisable within sixty days after the
Record Date are outstanding. All information is taken from or based upon
ownership filings made by such persons with the Commission or upon
information provided by such persons.
- -----------------------------------------------------------------------
NAME OF BENEFICIAL OWNER(1) AMOUNT AND NATURE
OF PERCENT OF
BENEFICIAL CLASS
OWNERSHIP
- -----------------------------------------------------------------------
Edward R. Beauvais . . . . . . . . . 1,676,075 (2) 12.5%
- -----------------------------------------------------------------------
Edward L. Gaylord. . . . . . . . . . 2,276,120 (3) 17.0%
- -----------------------------------------------------------------------
GFI Company. . . . . . . . . . . . . 1,798,620 (4) 13.4%
- -----------------------------------------------------------------------
Hunt Petroleum of Texas, Inc.. . . . 1,606,120 (5) 12.0%
- -----------------------------------------------------------------------
James R. Wikert. . . . . . . . . . . 404,342 (6) 3.0%
- -----------------------------------------------------------------------
Robert A. Peiser . . . . . . . . . . 6,000 Less than 1%
- -----------------------------------------------------------------------
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- -----------------------------------------------------------------------
Ivan Irwin, Jr.. . . . . . . . . . . 28,535 (7) Less than 1%
- -----------------------------------------------------------------------
Glenn M. Stinchcomb. . . . . . . . . 29,201 (8) Less than 1%
- -----------------------------------------------------------------------
Clayton I. Bennett . . . . . . . . . 23,201 (9) Less than 1%
- -----------------------------------------------------------------------
Glenn S. Goldberg. . . . . . . . . . 37,570(10) Less than 1%
- -----------------------------------------------------------------------
Martin J. Wax. . . . . . . . . . . . 27,898(11) Less than 1%
- -----------------------------------------------------------------------
Timothy D. Komberec. . . . . . . . . 41,667(12) Less than 1%
- -----------------------------------------------------------------------
Donald E. Applegarth . . . . . . . . 25,750(13) Less than 1%
- -----------------------------------------------------------------------
Thomas DeNardin. . . . . . . . . . . 19,238(14) Less than 1%
- -----------------------------------------------------------------------
Martin J. Dugan, Jr. . . . . . . . . 97,500(15) Less than 1%
- -----------------------------------------------------------------------
George E. Leonard. . . . . . . . . . 1,002 Less than 1%
- -----------------------------------------------------------------------
All executive officers and
directors as a group (11 persons). . 2,301,241(16) 17.2%
- -----------------------------------------------------------------------
- -----------------
(1) The addresses of the more than five percent holders listed in
the table are as follows: Edward R. Beauvais -2864 South
Circle Drive, Suite 1100, Colorado Springs, Colorado 80906;
Edward L. Gaylord-9000 North Broadway, Oklahoma City, Oklahoma
73114; GFI Company ("GFI")-530 Las Vegas Boulevard South, Las
Vegas, Nevada 89101; and Hunt Petroleum of Texas, Inc.-5000
Thanksgiving Tower, Dallas, Texas 75201.
(2) Includes 1,551,075 shares of Common Stock held in the name of
Aviation Holdings Limited Company ("AHLC"). Under the AHLC
Operating Agreement, Mr. Beauvais has management rights and
voting and investment power with respect to all 1,551,075
shares of Common Stock held in the name of AHLC. Mr.
Beauvais' interest in AHLC, which currently represents a 68.3%
interest in all allocations and distributions from AHLC
(equivalent to 1,058,774 shares or 7.9% of the outstanding
Common Stock), is held in the name of Aviation Consulting
Group Limited Partnership, an Arizona limited partnership
("ACGLP") of which Mr. Beauvais is a general partner and Mr.
Beauvais, along with his spouse and children, is a beneficial
owner. Also includes 60,000 shares of Common Stock issuable
upon the exercise of stock options.
(3) Includes 1,225,000 shares of Common Stock owned of record by
GFI and 437,500 shares of Common Stock owned of record by the
Broadmoor Hotel, Inc. Mr. Gaylord, individually and through
certain trusts, may be deemed a controlling person of GFI and
GFI may be deemed a controlling stockholder of the Broadmoor
Hotel, Inc. As a result, Mr. Gaylord may be deemed to be the
beneficial owner of the shares of Common Stock owned of record
by GFI and the Broadmoor Hotel, Inc. Also includes 10,000
shares owned of record by Mr. Gaylord's spouse, and currently
exercisable warrants to purchase 136,120 shares of Common
Stock held by GFI. Mr. Gaylord disclaims beneficial ownership
of shares of Common Stock not owned of record by him.
10
<PAGE>
(4) All of the shares of Common Stock reflected as beneficially
owned by GFI are also reflected as beneficially owned by Mr.
Gaylord. See Note (3) above. Includes 437,500 shares of
Common Stock owned of record by the Broadmoor Hotel, Inc. GFI
may be deemed to be a controlling stockholder of the Broadmoor
Hotel, Inc. As a result, GFI may be deemed to be the
beneficial owner of the shares of Common Stock owned of record
by the Broadmoor Hotel, Inc. Also includes currently
exercisable warrants to purchase 136,120 shares of Common
Stock held by GFI. GFI disclaims beneficial ownership of
shares of Common Stock not owned of record by GFI.
(5) The shares held of record by HPTI may be deemed beneficially
owned by its sole stockholder, Hunt Petroleum Corporation,
which is owned by two trusts with all voting and dispositive
powers exercised by the trustees, Tom Hunt and James L.
Parker, 5000 Thanksgiving Tower, Dallas, Texas 75201. Also
includes currently exercisable warrants to purchase 136,120
shares of Common Stock held by HPTI.
(6) Includes 50,400 shares held in the name of the
Wisenbaker/Wikert 1986 Trusts for the benefit of Mr. Wikert's
four children and 75,000 shares reflected as beneficially
owned by Mr. Wikert and held in the name of the Lyda Hunt-Margaret
Trusts, a testamentary trust for the benefit of Mr.Wikert's
spouse. Mr. Wikert disclaims beneficial ownership of
all 125,000 shares held in the name of such trusts. Also
includes 20,300 shares held of record by Mr. Wikert's
stepsons, 4,600 shares held of record by Mr. Wikert's spouse
and 200 shares held of record by Mr. Wikert's spouse as
custodian for Mr. Wikert's children, as to all of which shares
Mr. Wikert disclaims beneficial ownership. Also includes
17,500 shares of Common Stock issuable upon the exercise of
stock options.
(7) Includes 17,500 shares of Common Stock issuable upon the
exercise of stock options. Also includes 300 shares held by
Mr. Irwin as trustee of three educational trusts for the
benefit of Mr. Irwin's children and grandchildren, as to which
shares Mr. Irwin disclaims beneficial ownership.
(8) Includes 17,500 shares of Common Stock issuable upon the
exercise of stock options. Also includes 1,000 shares held of
record by Mr. Stinchcomb's spouse, as to which shares Mr.
Stinchcomb disclaims beneficial ownership.
(9) Includes 17,500 shares of Common Stock issuable upon the
exercise of stock options. Also includes 5,000 shares held of
record by Mr. Bennett's spouse, as to which shares Mr. Bennett
disclaims beneficial ownership.
(10) Includes 36,000 shares of Common Stock issuable to Mr.
Goldberg upon the exercise of stock options. Does not include
1,843 shares held in the name of AHLC and reflected as
beneficially owned by Mr. Beauvais.
(11) Includes 25,000 shares of Common Stock issuable to Mr. Wax
upon the exercise of stock options. Does not include 1,843
shares held in the name of AHLC and reflected as beneficially
owned by Mr. Beauvais.
(12) Includes 16,667 shares of Common Stock issuable to Mr.
Komberec upon the exercise of stock options.
11
<PAGE>
(13) Includes 25,000 shares of Common Stock issuable to Mr.
Applegarth upon the exercise of stock options. Does not
include 479 shares held in the name of AHLC and reflected as
beneficially owned by Mr. Beauvais.
(14) Mr. DeNardin resigned his position with the Company in
December 1996. Includes 16,668 shares of Common Stock
issuable to Mr. DeNardin upon the exercise of stock options.
Does not include 25,570 shares held in the name of AHLC and
reflected as beneficially owned by Mr. Beauvais.
(15) Mr. Dugan resigned his position with the Company on November
1, 1996. Includes 40,000 shares of Common Stock issuable to
Mr. Dugan upon the exercise of stock options and 500 shares of
Common Stock issuable to Mr. Dugan's spouse upon the exercise
of stock options. Mr. Dugan disclaims beneficial ownership of
shares issuable upon the exercise of stock options held by his
spouse. Does not include 15,934 shares held in the name of
AHLC and reflected as beneficially owned by Mr. Beauvais.
(16) The shares reflected as beneficially owned by all directors
and officers as a group include 1,551,075 shares held by AHLC
and reflected as beneficially owned by Mr. Beauvais, and (ii)
232,667 shares issuable upon the exercise of stock options.
Excludes shares held by Messrs. DeNardin and Dugan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission reports of ownership and changes in
ownership of common stock and other equity securities of the Company.
Officers, directors and greater-than-10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, during the 1996 calendar year, all filing requirements
applicable to its officers, directors and greater-than-10% beneficial owners
were complied with, except that an initial statement of beneficial ownership
(Form 3) was filed late by George E. Leonard and Robert A. Peiser, and
Clayton L. Bennett was late in filing a statement of changes in beneficial
ownership (Form 4).
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
During 1996, each Director of the Company who was not an employee of the
Company or any parent or subsidiary of the Company (each a "Non-Employee
Director") was entitled to receive an annual retainer of $20,000, to be paid
July 1, 1996. In 1996, one half of such annual retainer was paid to each
Non-Employee Director in the form of an award under the Company's 1996
Restricted Stock Plan for Non-Employee Directors of 701 shares of restricted
stock having
12
<PAGE>
an agreed value for this purpose of 100% of the fair market value on the date
of grant, July 1, 1996. Such shares have not been registered under the
Securities Act of 1933, and have been issued with appropriate restrictive
legends. The Company paid the $10,000 cash portion of the 1996 annual
retainer to its Non-Employee Directors at the March 1997 meeting of the
Company's Board of Directors. In 1996, Directors who received the stock
award portion of their annual retainer, and who received in 1997 the cash
portion of their annual 1996 retainer, were Messrs. Bennett, Irwin,
Stinchcomb and Wikert as well as John S. Lancy, who served as a director of
the Company until his resignation in November 1996. All Non-Employee
Directors also receive reimbursement of usual and ordinary expenses incurred
in connection with their service as a director.
During 1995, each of Messrs. Bennett, Irwin, Lancy, Stinchcomb and
Wikert was granted an option, pursuant to the 1995 Directors' Option Plan, to
purchase 25,000 shares of Common Stock at an exercise price equal to the fair
market value of such shares on the date of grant. On the grant date of such
options, July 28, 1995, the exercise price per share was $6.00. Of the
25,000 options granted to each of the aforementioned non-employee directors,
40% (representing 10,000 shares of Common Stock) were exercisable on the date
of grant, 30% (representing 7,500 shares of Common Stock) became exercisable
on July 28, 1996, and the remaining 30% (representing 7,500 shares of Common
Stock) will become exercisable on July 28, 1997. The term of all options
granted under the Directors' Plan is five years, and subject to limited
exceptions for termination as director, disability and death, such options
are exercisable only while the Director remains a director of the Company or
for a period of three months thereafter.
In addition, each Director of the Company receives a positive space pass
which allows him to book positive space travel on Company flights for himself
and a guest traveling with him. In addition, each spouse of a Director and
each dependant child also receives a positive space pass. In addition,
Margaret Hill, a director of Hunt Petroleum Corporation, and her children
Alinda Hill (spouse of James R. Wikert), Lyda Hill and Al Hill, Jr. each
received a positive space pass.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION OF EXECUTIVE OFFICERS
The Summary Compensation Table set forth below provides, for the period
from April 12, 1994 (inception) to December 31, 1996, information concerning
annual and long-term compensation paid or accrued by the Company for the
Company's (i) two Chief Executive Officers who served in 1996, (ii) next four
most highly compensated executive officers who served in 1996, and (iii) two
additional officers who where employed by the Company in 1996 and who, had
they remained employed by the Company at December 31, 1996, would have been
included in the next four most highly paid officers for 1996, in each case
for services rendered in all capacities to the Company.
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------
ANNUAL COMPENSATION(3) LONG-TERM COMPENSATION
- -------------------------------------------------------------------------------
13
<PAGE>
<TABLE>
ALL
NAME AND RESTRICTED SECURITIES OTHER
PRINCIPAL STOCK UNDERLYING COMPENSATION
POSITION YEAR SALARY($) BONUS($) AWARD($) OPTIONS (#) $
- -------- ---- --------- -------- ------- ----------- ------------
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
Robert A. Peiser (1) . . . 1996 $25,000 $300,000(1) $0(1) $300,000(1) $0
President and Chief
Executive Officer
- --------------------------------------------------------------------------------------------
Edward R.Beauvais (2). . . 1996 218,938 0 0 0 28,693(6)
Chairman of the Board,
President and Chief
Executive Officer
- --------------------------------------------------------------------------------------------
1995 175,500 0 0 0 780(6)
- --------------------------------------------------------------------------------------------
1994 93,750 0 90,000(4) 90,000(5) 0
- --------------------------------------------------------------------------------------------
Glenn Goldberg . . . . . . 1996 113,400 0 0 0 4,455(6)
Vice President - Human
Resources and Administration
- --------------------------------------------------------------------------------------------
1995 90,708 0 0 0 1,567(6)
- --------------------------------------------------------------------------------------------
Martin J. Wax. . . . . . . 1996 113,400 0 0 0 3,888(6)
Vice President - Technical
Operations and Vendor
Administration
- --------------------------------------------------------------------------------------------
1995 79,055 0 0 0 1,632(6)
- --------------------------------------------------------------------------------------------
Timothy D. Komberec(2) . . 1996 113,400 0 0 0 3,530(6)
Vice President - Flight
Operations
- --------------------------------------------------------------------------------------------
1995 93,625 0 0 0 3,530(6)
- --------------------------------------------------------------------------------------------
1994 23,333 50,000(4) 0 0 2,752(6)
- --------------------------------------------------------------------------------------------
Donald E. Applegarth . . . 1996 113,400 0 0 0 3,390(6)
Vice President - Information
Systems
- --------------------------------------------------------------------------------------------
1995 65,505 0 0 0 0
- --------------------------------------------------------------------------------------------
Thomas DeNardin(2) . . . . 1996 113,400 0 0 0 3,390(6)
Vice President - Sales and
Marketing
- --------------------------------------------------------------------------------------------
1995 93,625 0 0 0 1,757(6)
- --------------------------------------------------------------------------------------------
1994 23,333 0 50,000(4) 0 0
- --------------------------------------------------------------------------------------------
Martin J. Dugan, Jr. (2) . 1996 95,200 0 0 0 7,434(6)
Vice President - Finance and
Chief Financial Officer
- --------------------------------------------------------------------------------------------
1995 93,625 0 0 0 1,446(6)
- --------------------------------------------------------------------------------------------
1994 23,333 0 60,000(4) 0 0
- --------------------------------------------------------------------------------------------
14
<PAGE>
1994 23,333 0 60,000(4) 0 0
- --------------------------------------------------------------------------------------------
Nolan A. Wiley(2). . . . . 1996 113,400 0 0 0 2,498(6)
Vice President - Maintenance
- --------------------------------------------------------------------------------------------
1995 93,625 0 0 0 1,789(6)
- --------------------------------------------------------------------------------------------
1994 23,333 0 50,000(4) 0 0
- --------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Peiser commenced employment with the Company on November
21, 1996. Mr. Peiser's listed salary includes salary paid
from November 21, 1996 through December 31, 1996. Mr. Peiser
received a signing bonus of $300,000 upon execution of his
employment agreement. For a discussion of the terms of Mr.
Peiser's employment agreement, including stock and stock
option awards, see discussion under "Employment Agreements-
Robert A. Peiser" below.
(2) Mr. Beauvais commenced employment with the Company on April
15, 1994. Mr. Dugan, Mr. DeNardin and Mr. Wiley commenced
employment with the Company on September 1, 1994. Mr.
Komberec commenced employment with the Company on September
12, 1994. Mr. Dugan resigned as an officer of the Company
effective November 1, 1996. In November 1996, Mr. Beauvais
resigned his positions as President and Chief Executive
Officer, retaining his position as Chairman of the Board. Mr.
DeNardin resigned his position in December 1996, and Mr. Wiley
resigned his position in April 1997.
(3) The aggregate amount of any perquisites or other personal
benefits was less than 10% of the total annual salary and
bonus and is not included in the above table.
(4) Reflects a stock bonus award of 45,000 and 30,000 shares of
Common Stock to Mr. Beauvais and Mr. Dugan, respectively, and
25,000 shares of Common Stock to each of Mr. Wiley, Mr.
Komberec and Mr. DeNardin, on September 29, 1994. Such awards
vested upon receipt. The fair market value of such shares at
December 31, 1996 was $315,000, $210,000, $175,000, $175,000
and $175,000, respectively, based on the closing price of the
Common Stock on December 31, 1996 of $7.00.
(5) All such options were granted on September 29, 1994 at an
exercise price of $6.00 per share and vest over a three-year
period with one-third vesting on each of the first, second and
third anniversaries of the date of grant.
(6) Consists of life insurance premiums paid by the Company in the
applicable year for the benefit of the named officer.
EMPLOYMENT AGREEMENTS
ROBERT A. PEISER. Mr. Peiser has an employment agreement with the
Company, dated November 21, 1996, for his employment as President and Chief
Executive Officer at a minimum compensation of $300,000 per annum for a three
year term, with automatic one year extensions thereafter unless terminated by
either party on specified prior written notice. Mr. Peiser also received (1)
a $300,000 signing bonus upon execution of his employment agreement, (2) a
grant of 100,000 shares of the Company's common stock, of which shares 34,000
vest on November 21, 1997, 33,000 vest on November 21, 1998 and 33,000 vest
on November 21, 1999, (3) a grant of 300,000 options under the Company's
Amended and Restated 1994 Stock Option Plan, vesting
15
<PAGE>
at a rate of 100,000 shares per year and exercisable at $7.75 per share, (4)
an allowance of $650 per month in automobile expenses, and reimbursement for
reasonable living expenses during the first twelve months of the employment
agreement, and (5) lifetime positive space passes on the Company's flights
for himself and his eligible dependents. Upon termination of Mr. Peiser's
employment by the Company for cause, as defined in the employment agreement,
Mr. Peiser shall be entitled to all outstanding amounts then due him under
the employment agreement. Upon termination of Mr. Peiser's employment by the
Company without cause, as defined in the employment agreement, Mr. Peiser
shall be entitled to (1) a lump sum payment equal to his base salary for the
longer of the remaining term of the Employment agreement or twelve months,
(2) continuation of certain benefits through the remaining term of the
employment agreement, (3) immediate vesting of all granted but unvested stock
and options and (4) continuation of lifetime positive space passes on the
Company's flights for Mr. Peiser and his eligible dependents.
EDWARD R. BEAUVAIS. Mr. Beauvais has an Amended and Restated Employment
Agreement with the Company, dated November 21, 1996. for his employment as
Chairman of the Board of Directors of the Company at a minimum compensation
of $350,000 per year for a three year term. Mr. Beauvais also receives an
allowance of $550 per month in automobile expenses and reimbursements for
travel, entertainment and mileage expenses incurred in promoting the
Company's business. Upon termination of Mr. Beauvais' Employment Agreement by
the Company for cause, as defined in the Employment Agreement, or voluntarily
by Mr. Beauvais, Mr. Beauvais shall be entitled to all outstanding amounts
and benefits then due him under the Employment Agreement through the date of
termination. Upon termination of Mr. Beauvais' Employment Agreement by the
Company without cause, as defined in the Employment Agreement, Mr. Beauvais
shall be entitled to (1) payment of his base salary through the term of the
Employment Agreement, either as a lump sum or in periodic installments, at
Mr. Beauvais' election, (2) continuation of certain benefits through the term
of the Employment Agreement, (3) at his election, within 60 days of such
termination, immediate vesting and exercise of all granted but unexercised
stock options and (4) a lifetime positive space pass on the Company's flights
for Mr. Beauvais and his spouse.
16
<PAGE>
MARK COLEMAN. Mr. Coleman has a three-year employment agreement with
the Company, dated as of December 9, 1996, for his employment as Senior Vice
President - Marketing and Planning at a minimum compensation of $175,000 per
year for a three year term, with automatic one year extensions thereafter
unless terminated by either party on specified prior written notice. In
addition, Mr. Coleman received (1) a grant of 200,000 options under the
Company's Amended and Restated 1994 Stock Option Plan, vesting at a rate of
67,000 options on December 9, 1997, 67,000 options on December 9, 1998 and
66,000 on December 9, 1999, such options exercisable at $8.25 per share and
(2) an allowance of $550 per month in automobile expenses and reimbursement
of reasonable living expenses from December 9, 1996 through March 31, 1997.
Upon termination of Mr. Coleman's employment agreement by the Company for
cause, as defined in the employment agreement, Mr. Coleman shall be entitled
to all outstanding amounts then due him through the date of termination under
the employment agreement. Upon termination of the employment agreement by
the Company without cause, as defined in the employment agreement, Mr.
Coleman shall be entitled to (1) a lump sum payment equal to his base salary
for the longer of the remaining term of the employment agreement or twelve
months, (2) continuation of certain benefits through the remaining term of
the employment agreement, (3) immediate vesting of all granted but unvested
stock and options.
MARTIN J. DUGAN, JR., THOMAS J. DENARDIN, NOLAN A. WILEY, GLENN S.
GOLDBERG, MARTIN J. WAX, TIMOTHY D. KOMBEREC AND DONALD E. APPLEGARTH. The
Company's employment agreements with Messrs. Dugan, DeNardin and Wiley were
terminated on November 1, 1996, December 19, 1996 and April 11, 1997,
respectively. Pursuant to severance agreements with each of Mr. Dugan, Mr.
DeNardin and Mr. Wiley, the Company is paying to each former executive up to
24 months of his base salary at the time of his resignation, paid over a 24
month period, and providing to each executive continuation of certain
benefits, including insurance coverage, for the same 24 month period. In
addition, each former executive received a one year extension of the exercise
period applicable to all stock options vested as of the date of termination,
and lifetime positive space passes for themselves and their spouses on the
Company's flights. The Company's employment agreements with Messrs. Goldberg,
Wax, Komberec and Applegarth, as well as the terminated contracts with Mr.
Dugan, Mr. DeNardin and Mr. Wiley when they were in effect, provide for a
three-year term and are automatically extended on each anniversary of the
date of the agreement to a new termination date three years from the date of
such anniversary. Each agreement with Mssrs. Goldberg, Wax, Komberec and
Applegarth provides for an annual base salary of $113,400, and entitles each
such executive officer to participate in medical, life and disability
insurance plans established by the Company for its executive officers and
specifies that term life insurance will be maintained at three times the
executive's annual salary. Each such agreement provides for continuation of
salary and benefits payable to the executive officer for the balance of the
term of the agreement in the event the agreement is terminated other than for
cause. If the executive officer is terminated as a result of a long-term
illness or disability, salary and benefits continue for 12 months from the
date of termination. Each such executive officer's agreement also entitles
him to reimbursement of ordinary and necessary business expenses and to an
automobile allowance equal to $550 per month.
17
<PAGE>
EMPLOYEE STOCK OPTIONS
The Company has an Amended and Restated 1994 Stock Option Plan (the
"1994 Plan") pursuant to which stock options may be granted to the Company's
employees. Stock options granted under the 1994 Plan may be either incentive
stock options or nonstatutory stock options. Incentive stock options granted
to employees who own more than ten percent of the voting power of the
Company's stock are granted at 110% of fair market value at the time of
grant, and incentive stock options granted to all other employees are granted
at 100% of fair market value at the time of grant. Nonstatutory stock
options may be granted at 85% of fair market value at the time of grant.
However, to date no stock options have been granted at less than 100% of fair
market value as of the date of grant.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding individual grants
of stock options made during the fiscal year ended December 31, 1996 to the
executive officers named in the summary compensation table.
<TABLE>
- ------------------------------------------------------------------------------------------------------
NUMBER
OF PERCENT OF
SHARES TOTAL OPTIONS POTENTIAL REALIZABLE VALUE AT
UNDERLYING GRANTED TO EXERCISE OR ASSUMED ANNUAL RATES OF
OPTIONS EMPLOYEES IN BASE PRICE PER EXPIRATION STOCK PRICE APPRECIATION FOR
NAME GRANTED (#) FISCAL YEAR SHARE ($) DATE OPTION TERM
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------
Robert A. Peiser 300,000 45% $7.75 11/20/06(1) $366,478 $769,575
- ------------------------------------------------------------------------------------------------------
Mark Coleman 200,000 30% $8.25 12/8/06(2) $260,081 $546,150
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Such options were granted on November 15, 1996 and vest over a three
year period with one-third vesting on each of the first, second and third
anniversaries of the grant date.
(2) Such options were granted on December 3, 1996 and vest over a three year
period, with 67,000 vesting on December 9, 1997, 67,000 vesting on December
9, 1998, and 66,000 vesting on December 9, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information regarding option exercises
during the fiscal year ended December 31, 1996 as well as any unexercised
options held as of December 31, 1996 by each named executive.
18
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-THE-
UNEXERCISED OPTIONS MONEY OPTIONS
AT FISCAL YEAR-END (#) AT FISCAL YEAR-END($)(1)
---------------------- ------------------------
- ---------------------------------------------------------------------------------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Robert A. Peiser -0- -0- -0- 300,000 -0- -0-
- ---------------------------------------------------------------------------------------------------
Edward R. Beauvais -0- -0- 60,000 40,000 60,000 40,000
- ---------------------------------------------------------------------------------------------------
Thomas J. DeNardin 16,666 166,660 16,668 -0- 16,668 -0-
- ---------------------------------------------------------------------------------------------------
Glenn S. Goldberg 14,000 140,000 36,000 25,000 36,000 25,000
- ---------------------------------------------------------------------------------------------------
Mark Coleman -0- -0- -0- 200,000 -0- -0-
- ---------------------------------------------------------------------------------------------------
Martin J. Dugan, Jr. -0- -0- 40,000 -0- 40,000 -0-
- ---------------------------------------------------------------------------------------------------
Martin J. Wax 5,000 50,000 25,000 45,000 25,000 45,000
- ---------------------------------------------------------------------------------------------------
Timothy D. Komberec 16,666 166,660 15,667 16,667 15,667 16,667
- ---------------------------------------------------------------------------------------------------
Donald E. Applegarth 5,000 50,000 25,000 45,000 25,000 45,000
- ---------------------------------------------------------------------------------------------------
Nolan A. Wiley 11,166 184,239 22,167 16,667 22,167 16,667
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Fair market value of each unexercised in-the-money option at December 31,
1996 is based on the positive spread between the exercise price of the
options and $7.00, the closing price of Common Stock on December 31, 1996.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors furnished the
following report with respect to executive compensation for 1996. This
report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement by
reference into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934 (the "Acts"), except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The Compensation Committee of the Board of Directors is responsible for
determining the compensation arrangements for the executive officers of the
Company. It also administers the 1996 Restricted Stock Plan for Non-Employee
Directors, the 1994 Stock Option Plan and the 1995 Directors' Option Plan.
The Company applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy incorporates the
following goals:
19
<PAGE>
1. Provide a competitive level of compensation to attract
and retain talented management.
2. Reward management for corporate performance by linking a
substantial portion of total compensation to the
achievement of measurable performance objectives.
3. Align the interests of management with the shareholders
in order to maximize shareholder value.
The Company has a simple compensation program that consists of cash and
equity based compensation. This program is intended to enable the Company to
attract and retain key employees, enhance stockholder value, motivate
innovation, foster teamwork, and adequately reward employees.
CASH-BASED COMPENSATION
SALARY
The Company sets base salary for employees based upon the philosophy
indicated above. Using these elements, the Compensation Committee, with the
help of outside consultants, compares corresponding amounts paid by other
companies (the "peer group") selected because of the similarity of their
businesses, size and prospects to those of the Company. The committee
believes that these companies accurately reflect the market in which the
Company competes for executive talent. Salary increases granted to the
Company's executive officers during 1996 were based on observed competitive
salary levels within the peer group, taking into account the Company's
performance and financial circumstances.
EQUITY-BASED COMPENSATION
1994 STOCK OPTION PLAN
The Company's 1994 Stock Option Plan (the "1994 Plan") provides
additional incentives to maximize stockholder value. The plan utilizes
vesting periods to encourage key employees to continue in the employ of the
Company. All options granted under the 1994 Plan become exercisable in
one-third increments one year, two years and three years after the date of
grant. The Company grants stock options to a broad-based population of
senior and middle management employees. In determining the size of incentive
awards to individual key employees, the Compensation Committee considers a
number of factors, including:
20
<PAGE>
1. Level of job responsibilities;
2. Past performance;
3. Size and frequency of grants by comparable companies;
4. Salary level;
5. Corporate performance, as measured by various tests
of profitability such as operating income, net
income and earnings per share; and
6. Size of any prior grants.
In 1996, the Company granted Stock Options to two executive officers
(Mr. Peiser and Mr. Coleman) as part of their employment agreements with the
Company. See discussion under "Employment Agreements" above. The
Compensation Committee believes that the grant of these options encourages
officers to remain with the Company in order to realize the options'
underlying economic value. Also, the Compensation Committee feels that it is
appropriate to grant options to newly hired senior officers in order to help
them embrace the Company's goal of increasing shareholder value.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Compensation Committee believes that the base salary, signing bonus
and stock and stock options granted to Mr. Peiser under his employment
agreement as the Company's Chief Executive Officer are appropriate in light
of the Compensation Committee's philosophy as described above, and important
in attracting, motivating and retaining an appropriately qualified Chief
Executive Officer. For a summary of the terms of Mr. Peiser's employment
agreement, see discussion under "Employment Agreements - Robert A. Peiser"
above.
COMPENSATION COMMITTEE
Ivan Irwin, Jr.
Clayton I. Bennett
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Ivan Irwin, Jr.
(Chairman) and Clayton I. Bennett.
On December 18, 1996, the Company borrowed $2.5 million from Hunt
Petroleum of Texas, Inc. ("HPTI"), and on December 20, 1996, the Company
borrowed $2.5 million from GFI Company ("GFI") under terms that anticipated
repayment in thirty days. HPTI and GFI are major stockholders of the
Company. Ivan Irwin, Jr., a Director of the Company, Chairman of the Legal
and Compensation Committees, and a member of the Audit Committee, is Vice
President of HPTI and James R. Wikert, a Director of the Company, is the
son-in-law of a related party to HPTI. Clayton L. Bennett, a Director of the
Company, is the son-in-law of Edward L. Gaylord, a significant stockholder of
21
<PAGE>
the Company and a controlling person of GFI, and Glenn M. Stinchcomb, a
Director of the Company, is also a director of Gaylord Entertainment Company,
a company controlled by Edward L. Gaylord, a controlling person of GFI.
On January 31, 1997, the Company's Board of Directors created Series B
Preferred Stock, $0.001 par value per share (the "Preferred Stock"), and
began a series of transactions which resulted in the sale of 200,000 shares
of such Preferred Stock to HPTI and GFI. On that same date, each of HPTI
and GFI loaned to the Company the principal amount of $10,000,000, which
included the $2,500,000 previously loaned by each of HPTI and GFI to the
Company in December 1996 (the "Loans"), such Loans evidenced by Promissory
Notes. Pursuant to the terms of the Stock Purchase Agreement entered into
among HPTI, GFI and the Company on February 27, 1997, each of HPTI and GFI
purchased 100,000 shares of the Company's Preferred Stock at a purchase price
of $100 per share. The Preferred Stock is subject to certain redemption
rights of the Company and the investors, respectively. Payment of the
purchase price for the Preferred Stock was made by cancellation of the
Promissory Notes. In addition, the Company issued to each of HPTI and GFI
warrants to purchase, subject to certain vesting conditions, an aggregate of
2,650,000 shares of the Company's common stock, $0.001 par value per share,
at a price of $0.01 per share.
22
<PAGE>
PERFORMANCE GRAPH
The performance graph below shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement by
reference into any filing under either the Securities Act of 1933 or the
Securities Exchange Act of 1934 (the "Acts"), except to the extent that the
Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under such Acts.
The graph below compares cumulative total return on the Company's common
stock, for the period since the Company's initial public offering on December
5, 1995, through December 31, 1996, assuming an investment of $100 on
December 5, 1995 in each of (i) the Company's Common Stock; (ii) the NASDAQ
Stock Market Index of U.S. Companies; and (iii) a group of four peer
companies chosen by the Company, consisting of America West Airlines, Reno
Air, Inc., Southwest Airlines Co. and ValuJet Airlines, Inc. (the "Peer
Group").
[CHART]
12/29/95 12/31/96
-------- --------
WPAC 76.14 31.82
NASDAQ 98.71 121.12
Peer Group 89.71 69.92
23
<PAGE>
PROPOSAL TO AMEND THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF COMMON STOCK
(ITEM 2 ON PROXY CARD)
The Company's Restated Certificate of Incorporation currently authorizes
20,000,000 shares of Common Stock. On May 8, 1997, there were 13,527,977
shares of Common Stock outstanding, and another 6,177,702 reserved for
issuance pursuant to outstanding stock options, the Company's Employee Stock
Purchase Plan, unvested stock grants, and outstanding warrants, leaving
294,321 shares of Common Stock available for all other corporate purposes.
The Board of Directors believes it to be highly advisable to increase the
number of authorized shares of Common Stock to 40,000,000. The additional
shares of Common Stock would be capable of being issued for any proper
corporate purpose by the Company's Board of Directors at any time without
further stockholder approval unless otherwise required under applicable law,
the Company's Restated Certificate of Incorporation or Bylaws, or by the
provisions of any listing agreement to which the Company is or may become a
party. The Board of Directors believes it is desirable to increase the number
of authorized shares of Common Stock in order to give the Company flexibility
in considering such matters as raising additional capital, acquisitions and
other corporate purposes.
Effective April 1, 1997, the Company entered into an Information
Technology Services Agreement with Perot Systems Corporation ("Perot"),
pursuant to which Perot will deliver an integrated suite of technology
related services to the Company over a five-year period. On May 6, 1997, the
Company issued to Perot 114,286 shares of Common Stock having an agreed value
of $800,000. By the first anniversary of the effective date, the Company will
issue to Perot a number of shares of Common Stock having a value of $600,000.
By the second anniversary of the effective date, the Company will issue to
Perot a number of shares of Common Stock having a value of $400,000. During
the first six months of the agreement, the Company may elect to issue shares
of its Common Stock to Perot in lieu of cash for up to three months of base
monthly service fees and pass-through expenses, not to exceed $2,000,000 in
the aggregate. In each instance, the number of shares to be issued is to be
determined by dividing the amount of the base monthly service fees by the
average closing bid price for the Company's Common Stock for the five trading
days ending two days prior to the date the shares are to be delivered.
On April 22, 1997, the Company entered into a non-binding
letter of intent (the "Letter of Intent") with a placement agent
regarding a proposed private placement of approximately $10 million
of a new class of convertible preferred stock to be created by the
Company (the "Convertible Preferred Stock"). The Convertible
Preferred Stock is anticipated to carry a preferred dividend
equivalent of 8% and be convertible into shares of the Company's
Common Stock at a conversion price equal to the lesser of 110% of
the closing bid price of the Company's Common Stock at the time of
funding (subject to certain adjustments based on the performance of
the Common Stock) or 90% of the previous average 20 day closing bid
price of the
24
<PAGE>
Company's Common Stock at the time of conversion (subject to certain further
discounts of up to 10% based on the number of months elapsed between the
original issuance of the Convertible Preferred Stock and conversion). It is
anticipated that the proceeds to the Company of any private placement of the
Convertible Preferred Stock would be used for working capital purposes.
On April 25, 1997, the Company entered into a revised Aviation Fuel
Management Agreement (the "Fuel Management Agreement") with Mercury Air
Group, Inc. ("Mercury"), whereby Mercury has agreed to provide certain fuel
supply services to the Company. The Company also executed a promissory note
in favor of Compass Bank in the principal sum of $6,000,000 (the "Compass
Note"). The Compass Note provides that the Company may borrow funds from
Compass Bank in order to pay amounts due and owing under the Fuel Management
Agreement. Payment of all amounts due and owing from the Company to Compass
Bank under the Compass Note is guaranteed by Mercury. In consideration of
Mercury's entering into the Fuel Management Agreement and its agreement to
guarantee the obligations of the Company arising pursuant to the Compass
Note, on April 25, 1997 the Company issued warrants to Mercury to purchase
200,000 shares of the Company's Common Stock (the "Mercury Warrants") at an
exercise price of $6.875 per share (the closing bid price of the Company's
Common Stock as reported on Nasdaq on April 25, 1997). The Mercury Warrants
became exercisable upon issuance and expire on April 25, 2000. With respect
to Mercury Warrants that remain unexercised on July 25, 1998, the Company may
become obligated thereunder to issue additional shares of Common Stock to
Mercury (or make cash payments to Mercury) to the extent that the highest
average trading price of the Company's Common Stock (as reported on Nasdaq
during any 20 consecutive trading days during the three month period ending
July 25, 1998) does not meet at least a 20% target return level, as set forth
in the Mercury Warrants.
Other than the Company's agreements with Perot and Mercury and
commitments under the Letter of Intent, existing stock grants, options and
warrants, the Company has no present agreements or commitments to issue any
additional shares. However, the Company is actively seeking other
arrangements that will allow it to increase its liquidity, enhance its
working capital or achieve other business goals. Such arrangements could
include transactions in which the Company could issue shares of its Common
Stock or other securities convertible into or exchangeable for Common Stock.
The authorization of additional shares of Common Stock will not, by
itself, have any effect on the rights of holders of Common Stock.
Nonetheless, any issuance of additional shares could, among other things,
have a dilutive effect on earnings per share and on the voting rights and
equity of present stockholders. Holders of the Company's outstanding shares
of Common Stock have no preemptive rights to subscribe for or purchase any
stock of the Company and will not have any appraisal rights in connection
with the proposed amendment.
25
<PAGE>
The proposed amendment would amend the first sentence of Article 4 of
the Certificate to read as follows:
"4. CAPITAL STOCK. The total number of shares of all classes
of stock which this Corporation shall have the authority to
issue is forty-three million forty-seven thousand
(43,047,000), of which forty million (40,000,000) shall be
common stock, par value $0.001 per share, and three million
forty-seven thousand (3,047,000) shall be preferred stock, par
value $0.001 per share."
VOTE REQUIRED.
The affirmative vote of a majority of the outstanding shares of Common Stock
entitled to vote at the Annual Meeting is required for approval of the
foregoing proposed amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE AMENDMENT TO
THE RESTATED CERTIFICATE OF INCORPORATION.
CERTAIN TRANSACTIONS INVOLVING THE COMPANY
On May 5, 1995, the Company entered into an Aircraft Lease Agreement
with Aircorp, Inc. ("Aircorp"). Aircorp is owned by James R. Wikert, who was
elected to the Board of Directors of the Company in 1995. Pursuant to the
Lease Agreement, the Company leases a Boeing 737-300 aircraft from Aircorp.
The Company paid Aircorp lease payments totaling $4,800,000 in 1996.
Management believes that the Lease Agreement with Aircorp constitutes an
arms-length transaction at fair market value.
Effective January 1, 1996, the Company entered into a consulting
agreement with AVFORS, Inc., a company owned by John Beauvais, the son of
Edward R. Beauvais, to provide market analysis, forecasting, scheduled
service pattern development, pricing policy analysis, yield management,
economic analysis and related services for the Company. The agreement
provided for payment of consulting fees to AVFORS and John Beauvais in the
amount of $8,750 per month, plus additional fees for services rendered. The
Company paid AVFORS and John Beauvais a total of $176,435 under this
agreement in fiscal 1996. The Company terminated this agreement with AVFORS
in December 1996.
Effective January 1, 1995, the Company entered into a consulting
agreement with InnoVision Incorporated ("InnoVision"). InnoVision is owned,
operated and controlled by Paul Beauvais, the son of Edward R. Beauvais, and
Michael Lancy, brother of John S. Lancy, a former member of the Company's
Board of Directors. Under the agreement, InnoVision provided creative media
and related services, including advertising liaison, promotion and marketing.
Compensation to InnoVision was based upon hourly rates for services performed
by InnoVision personnel, with minimum monthly compensation of $12,500.
InnoVision received an aggregate
26
<PAGE>
of $3,172,393 under the agreement in 1996. The Company terminated this
agreement with InnoVision in December 1996.
In 1996, the Company ordered uniforms and logo merchandise from Looks
Like A Pro, Inc., a company owned by Matthew Beauvais, the son of Edward R.
Beauvais. The Company had no written agreement with Looks Like A Pro, Inc.
Looks Like A Pro, Inc. received a total of $436,400 for merchandise ordered
by the Company in 1996. The Company ceased ordering merchandise from Looks
Like A Pro, Inc. in December 1996.
In June 1996, the Company entered into a short-term lease agreement with
Express One International, Inc. ("Express One") for two Boeing 727-200
aircraft. James R. Wikert, a Director of the Company, is the Chief Executive
Officer of Express One. The lease covered the cost of the aircraft,
in-flight crews, maintenance and insurance. The agreement was terminated on
September 5, 1996. The Company paid Express One lease payments totaling
$2,787,583 in 1996. Management believes that the lease agreement with
Express One constituted an arms-length transaction at fair market value.
Pursuant to an agreement that became effective on April 26, 1996 between
the Company and DC9-41, Inc., a Florida corporation of which James R. Wikert
owns a 50% interest, the Company paid commissions to DC9-41, Inc. in the
amount of $800,000 in connection with the purchase by the Company of a Boeing
737-300 aircraft from Aerovias Venezolanas, S.A. DC9-41, Inc. assisted in
the negotiation of and otherwise accomplished the procurement of the aircraft
for the Company. Management believes that the Agreement with DC9-41, Inc.
constitutes an arms-length transaction at fair market value.
The Company was a party to a consulting agreement with John S. Lancy,
who was the Company's Vice Chairman of the Board until his resignation in
November 21, 1996, pursuant to which Mr. Lancy served as the Company's
outside general counsel. The Company terminated its agreement with Mr.
Lancy on November 11, 1996, and paid Mr. Lancy a lump sum of $348,000 in
connection with such termination. Not including the lump sum termination
payment, the Company paid Mr. Lancy monthly stipends totaling $159,000.00 in
1996. Management believes that the consulting agreement with Mr. Lancy
constituted an arms-length transaction at fair market value.
The law firm in which Mr. Lancy is a partner provided legal services to
the Company until November 1996. The Company paid an aggregate of
$552,573.15 in fees (in addition to monthly stipends totalling $159,000.00)
and $31,258.50 in cost reimbursement to such firm in 1996, which included
$118,658.25 in fees and $2,658.42 in costs paid by Mr. Lancy's firm in 1996
for contract services to the law practice owned by C. Steven Rorke, the
Company's Secretary until February 1997.
See also the discussion of certain transactions under the heading
"Compensation Committee Interlocks and Insider Participation" above.
27
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANT
Arthur Andersen LLP served as independent certified public accountants
of the Company for the fiscal year ended December 31, 1996. A representative
of Arthur Andersen LLP is expected to be present at the Annual Meeting. He
will have an opportunity to make a statement if he so desires, and is
expected to be available to respond to appropriate questions.
The Audit Committee of the Board of Directors has recommended to the
Board of Directors that Arthur Andersen LLP be retained as independent
certified public accountants of the Company for fiscal 1997.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December 31, 1996,
as filed with the Commission has been mailed to stockholders with this Proxy
Statement. The Company will provide, without charge, a copy of the Company's
annual report on Form 10-K for 1996, upon written request directed to: Nina
A. Ortega, Office of the Corporate Secretary, Western Pacific Airlines, Inc.,
2864 South Circle Drive, Suite 1100, Colorado Springs, Colorado 80906.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Stockholders' proposals on matters appropriate for stockholder action at
the Company's 1998 annual meeting of stockholders must be submitted in
writing to the Secretary of the Company at the address of the Company set
forth on the first page of this Proxy Statement no later than January 12,
1998 in order to be considered for inclusion in the Company's 1998 Proxy
Statement and proxy card.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting other than the business identified in
the Notice of Meeting. If other matters properly come before the Annual
Meeting, the proxies will be voted upon such matters in accordance with the
judgment of the persons acting under the proxies.
PLEASE SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED PROXY.
By Order of the Board of Directors
/s/ Nina A. Ortega
Nina A. Ortega
SECRETARY
Colorado Springs, Colorado
May 9, 1997
28
<PAGE>
WESTERN PACIFIC AIRLINES, INC.
2864 SOUTH CIRCLE DRIVE, SUITE 1100
COLORADO SPRINGS, COLORADO 80906
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert A. Peiser and George E. Leonard, and
each of them, with full power of substitution, as attorneys and proxies to
represent the undersigned at the 1997 Annual Meeting of Stockholders of Western
Pacific Airlines, Inc. (the "Company") to be held at The Antlers Doubletree
Hotel, Summit Ballrooms II and III, 4 South Cascade, Colorado Springs, Colorado,
at 10:00 a.m. local time, on Thursday, June 19, 1997, or at any adjournment
thereof, with all power which the undersigned would possess if personally
present, and to vote all shares of stock of the Company which the undersigned
may be entitled to vote at said Meeting as follows:
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY / /
(unless the name of a nominee
is crossed out) / /
Edward R. Beauvais Ivan Irwin, Jr.
2. AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
Approval of the amendment to the Company's Restated Certificate of
Incorporation to increase to 40,000,000 the number of authorized shares of
Common Stock
FOR / / AGAINST / / ABSTAIN / /
3. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING (which the Board of Directors does not know of prior to May 9, 1997)
(continued and to be signed on reverse side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, AND FOR THE AMENDMENT TO
THE RESTATED CERTIFICATE OF INCORPORATION, AND WILL CONFER THE AUTHORITY SET
FORTH IN PARAGRAPH 3.
Receipt is hereby acknowledged of the Notice of the Meeting and Proxy
Statement dated May 9, 1997, as well as a copy of the Company's Annual Report
for the fiscal year ended December 31, 1996.
Dated: _____________ , 1997.
_______________________________
_______________________________
(SIGNATURE OF STOCKHOLDER)
WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE
GIVE TITLE. EACH JOINT OWNER IS
REQUESTED TO SIGN. IF A
CORPORATION OR PARTNERSHIP,
PLEASE SIGN BY AN AUTHORIZED
OFFICER OR PARTNER. PLEASE SIGN
IN THE SAME MANNER AS YOUR
CERTIFICATE(S) IS (ARE)
REGISTERED.
PLEASE COMPLETE, DATE, SIGN AND RETURN this proxy in the envelope provided.
