<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-K/A
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED EFFECTIVE OCTOBER 7, 1996)
FOR THE FISCAL YEAR ENDED MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM
---------------------------
COMMISSION FILE NO: 0-26432
AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 59-3315474
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
6280 HAZELTINE NATIONAL DRIVE
ORLANDO, FLORIDA 32822
(Address of principal executive offices, including zip code)
(407) 859-1579
(Registrant's phone number, including area code)
-------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- ------------------------------------ -----------------------------------------
COMMON STOCK , $.01 PAR VALUE N/A
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [X]
THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT, COMPUTED BY REFERENCE TO THE LAST REPORTED PRICE AT WHICH THE
STOCK WAS SOLD ON JUNE 17, 1997, WAS $46,318,643. FOR PURPOSES OF THE ABOVE
STATEMENT ONLY, ALL DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ARE
ASSUMED TO BE AFFILIATES.
THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, $.01 PAR VALUE,
OUTSTANDING AS OF JUNE 17, 1997, WAS 9,067,937.
==============================================================================
<PAGE> 2
AIRWAYS CORPORATION
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED MARCH 31, 1997
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- --------------------------------- ----------- -------------------------------------------------------------------
<S> <C> <C>
Robert D. Swenson 43 Chairman of the Board, President and Chief Executive
Officer of the Company and AirTran
John K. Ellingboe 46 Director of the Company and AirTran
Roger T. Munt 48 Director of the Company and AirTran
Alan R. Stephen 50 Director of the Company and AirTran
Mark B. Rinder 40 Vice President, Finance and Chief Financial Officer of
the Company and AirTran
Lawrence H. Brinker 47 Chief Counsel and Company Secretary of the Company
and AirTran
Cathy Hoag 40 Vice President, Sales and Marketing of AirTran
Gustavo A. Carbonell 32 Vice President, Planning and Scheduling of AirTran
Klaus Goersch 31 Vice President, Operations of AirTran
Carl L. Millican 39 Vice President, Maintenance of AirTran
</TABLE>
Robert D. Swenson, a Class III Director, has served as Chairman of the Board and
Chief Executive Officer of the Company since 1995 and as Chairman of the Board
of AirTran since 1994. From 1994 to January 1995, Mr. Swenson was President of
AirTran. On July 10, 1996, the Board of Directors of the Company and AirTran
re-appointed him to the office of President of the Company and President and
Chief Executive Officer of AirTran. Mr. Swenson served as a director, President
and Chief Executive Officer of Mesaba Holdings, Inc. and its subsidiary, Mesaba
Aviation, Inc. from 1981 to 1995 and was Chairman of the Board of Mesaba
Holdings, Inc. and Mesaba Aviation, Inc. from 1986 to 1995. Mr. Swenson also
served as President of Mesaba's predecessor from 1978 until 1981. Mr. Swenson
holds an Airline Transport Pilot certificate with flight instructor privileges
and is type rated in the Fokker F-27 aircraft. Mr. Swenson was a member of the
Board of Directors of the Regional Airline Association from 1985 through 1988
and served as Treasurer of the Association during 1987 and 1988. He was elected
to serve as Vice Chairman of the Board of Directors of the Association for 1992
and was elected Chairman for 1993.
John K. Ellingboe, a Class I Director, has served as a director of the Company
since 1995 and a director of AirTran since 1994. Mr. Ellingboe served as a
director of Mesaba Holdings, Inc. from 1990 to 1995. Since June 1996, Mr.
Ellingboe has been Chief Executive Officer of PMSA Management Group, LLC, a
management consulting firm. From 1993 to May 1996, he was Senior Vice
President, Business Development, General Counsel and Secretary of Fingerhut
Companies, Inc. From 1990 to 1993, he was
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Vice President, General Counsel and Secretary of Fingerhut Companies, Inc.
Prior to 1990, he was an attorney in private practice.
Roger T. Munt, a Class II Director, has served as a director of the Company
since 1995 and a director of AirTran since 1994. Mr. Munt served as a director
of Mesaba Holdings, Inc. from 1984 to 1995. Mr. Munt served as Executive Vice
President and Chief Operating Officer of IGM, Inc. from 1994 to 1996 and was
President of Munt & Associates from 1992 to 1994. He served as General Manager
of Helijet U.S., Inc. from 1990 to 1992. He was Vice President of Marketing and
Strategic Planning of Dee Howard Co. from 1988 to 1990, and served as the
Senior Vice President of Marketing for Fairchild Aircraft Corporation, an
aircraft manufacturer, from 1984 to 1988.
Alan R. Stephen, a Class III Director, has served as a director of the Company
since 1995 and a director of AirTran since 1994. Mr. Stephen served as a
director of Mesaba Holdings, Inc. from 1987 to 1995. Mr. Stephen has been
President of Twin Otter International, Ltd. since 1987. From 1978 to 1987, Mr.
Stephen was Executive Vice President of the Regional Airline Association in
Washington, D.C.
Mark B. Rinder has been the Vice President, Finance and Chief Financial Officer
of the Company and AirTran since February 1996. From 1993 through 1995, Mr.
Rinder was Vice President, Finance of Caterair International Corporation, and
from 1991 to 1993 was Vice President, Business Development for Europe and North
America for that company. From 1989 to 1991, Mr. Rinder served Marriott
Corporation and Caterair International Corp. as their Controller for European
operations.
Lawrence H. Brinker has been the Chief Counsel and Company Secretary of the
Company and AirTran since March 1997. Prior to that, he was Counsel to the
Washington, D.C. law firm of Patton Boggs, L.L.P. Mr. Brinker has also been an
Aviation Safety Inspector with the Federal Aviation Administration, Director of
Operations for Mountain Air Cargo, Counsel to the Commander in Chief, United
States Special Operations Command and an instructor pilot with the United States
Air Force.
Cathy Hoag has been Vice President of Sales and Marketing of AirTran since
February 1996. From 1990 to 1996, Ms. Hoag served as Director of Advertising for
The Hertz Corporation and, prior to that, she served in several other
marketing-related positions with The Hertz Corporation.
Gustavo A. Carbonell has served as Vice President of Planning and Scheduling of
AirTran since March 1995. From 1992 to 1994, he served as Director of Planning
and Scheduling for Mesa Air Group. Prior thereto, he was a Manager of Market
Planning and Analysis for Southwest Airlines.
Klaus Goersch has been Vice President of Operations of AirTran since September
1996. From 1989 to 1996, he served as Director of Training for Mesaba Airlines.
From 1986 to 1989 he served as a pilot for Comair, GP Express Airlines
and NMP.
Carl L. Millican has been Vice President of Maintenance and Engineering of
AirTran since December 1996. Prior thereto, he served in several positions
including Director of Technical Services, Director of Maintenance and Director
of Quality Control at Mesaba Airlines from 1986 to 1996. He also served as
Maintenance Chief Supervisor at Pilgrim Airlines from 1980 to 1985.
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<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION
The following compensation table sets forth, for the fiscal year ended March
31, 1997 ("1997"), the cash and certain other compensation paid by the Company
to its Chief Executive Officer and the Company's other executive officers
whose compensation for 1997 exceeded $100,000 (collectively, the "Named
Executive Officers"). No other executive officer earned an annual salary and
bonus in excess of $100,000 during such year.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------------ -------------------
Other Annual Shares Underlying
Name and Principal Position Year Salary Bonus Compensation Options
- ------------------------------------- ------ ----- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Robert D. Swenson 1997 $161,088 $ -- $ 78,100(1) 75,000
Chairman and Chief 1996 30,771 -- -- 250,000
Executive Officer of the
Company, Chairman of AirTran
John F. Horn(2) 1997 42,283 -- 115,975(2) --
President of the Company 1996 140,005 1,855 81 100,000
and President and Chief
Executive Officer of AirTran
Mark B. Rinder 1997 116,800 -- -- 10,000
Vice President, Finance and
Chief Financial Officer of
the Company and AirTran
Cathy Hoag 1997 110,284 -- -- 10,000
Vice President, Sales and
Marketing of AirTran
</TABLE>
- --------------------------
(1) Includes relocation costs for the Swensons ($40,000), rental of the
Swensons' home in Orlando, Florida ($ 19,600) and the cost of
transporting the Swenson family twice annually to their principal
home in Anchorage, Alaska ($ 12,000).
(2) Mr. Horn retired on July 10, 1996 and the other annual compensation
includes compensation paid in connection with the post-employment
period.
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows all grants of options to the Named Executive Officers
of the Company in 1997. The options were granted under the Company's 1995 Stock
Option Plan. Pursuant to SEC rules,
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the table also shows the value of the options granted at the end of the option
terms (six years) if the stock price were to appreciate annually by 5% and 10%,
respectively, from the date the options were granted. There is no assurance
that the stock price will appreciate at the rates shown in the table.
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------- Potential Realizable Value
Percent at Assumed Annual Rates of
Number of of Total Options Stock Price Appreciation
Securities Granted to for Option Term
Underlying Employees in Exercise or Expiration -------------------------
Options Granted the Fiscal Year Base Price DATE 5% 10%
--------------- --------------- ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Swenson 75,000 23% $ 5.25 7/25/02 $527,663 $697,552
Mark B. Rinder 5,000 2% 5.25 7/25/02 35,178 46,503
Mark B. Rinder 5,000 2% 3.00 12/22/02 20,101 26,573
Cathy Hoag 5,000 2% 5.25 7/25/02 35,178 46,503
Cathy Hoag 5,000 2% 3.00 12/22/02 20,101 26,573
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The following table provides information as to options exercised by each of the
Named Executive Officers of the Company during 1997 and the value of options
held by such officers at year end.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercisable
Shares Underlying Unexercised In-the-Money Options
Acquired Options at 3/31/97 3/31/97
on Value --------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert D. Swenson - - 325,000 - $759,375 $ -
Mark B. Rinder - - 30,000 5,000 1,875 13,125
Cathy Hoag - - 30,000 5,000 1,875 13,125
</TABLE>
- -------------------
(1) The closing sale price of the Common Stock on March 31, 1997 (the last
trading day of the Company's fiscal year) as reported by NASDAQ was
$5.625 per share. Value is calculated by multiplying (a) the difference
between $5.625 and the option exercise price by (b) the number of shares
of Common Stock underlying the option.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive a fee of $1,500 per
quarter and are reimbursed for out-of-pocket expenses incurred in performing
their duties as directors. Under the 1995 Director Stock Option Plan, an option
to purchase 4,000 shares of common stock is automatically granted to each
non-employee director on April 25 of each year priced at 100% of the fair
market value of the Company's common stock on the date of grant. John K.
Ellingboe, Roger T. Munt and Allan R. Stephen
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<PAGE> 6
were each granted options to purchase 4,000 shares of common stock on April 25,
1996. The options have a term of six years and became exercisable on the first
anniversary of the date of grant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of July 1, 1997, the number of shares of
Common Stock of the Company which were owned beneficially by (i) each person
who is known by the Company to own beneficially more than 5% of its Common
Stock, (ii) each director and nominee for director, (iii) the Named Executive
Officers (as defined in "Executive Compensation") and (iv) all directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percentage of
Beneficial Owner(1) Beneficial Ownership(2)(3)(4) Outstanding Shares(2)
- ----------------------- ----------------------------- ---------------------
<S> <C> <C>
Carl R. Pohlad 1,379,310 15.33%
Pohlad Companies
3800 Dean Bosworth Plaza
60 South Street
Minneapolis, MN 55402
Lowell T. Swenson
1020 Centennial Drive 462,748(6) 5.10%
Thief River Falls, MN 56701
Robert D. Swenson 707,895(7) 7.54%
Alan R. Stephen 42,000 (5)
John K. Ellingboe 29,620 (5)
Roger T. Munt 10,000 (5)
Mark B. Rinder 31,000 (5)
Cathy Hoag 30,000 (5)
All directors and executive
officers as a group (11 persons) 890,515 9.37%
</TABLE>
(1) Unless otherwise indicated, the address of each beneficial owner is
Airways Corporation, 6280 Hazeltine National Drive, Orlando, Florida
32822.
(2) A person is deemed to be the beneficial owner of securities that can
be acquired by such person within 60 days from the date hereof upon
exercise of options and warrants. Each beneficial owner's percentage
ownership is determined by assuming that options and warrants that are
held by such person (but not those held by any other person) and that
are exercisable within 60 days from the date hereof have been
exercised.
(3) Includes shares which may be acquired within the next 60 days in the
following amounts by exercise of stock options: R. D. Swenson --
325,000; A. Stephen -- 8,000; J. Ellingboe -- 8,000; R. Munt -- 8,000;
M. Rinder -- 30,000; C. Hoag -- 30,000; and all directors and
executive officers as a group -- 444,000.
(4) The shares shown do not include the following shares of common stock
which are subject to stock options that are not exercisable within the
next 60 days: A. Stephen -- 4,000; J. Ellingboe -- 4,000; R Munt --
4,000; M. Rinder -- 5,000; C. Hoag -- 5,000; and all directors and
executive officers as a group --97,000.
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(5) Ownership is less than one percent (1%) of total shares outstanding.
(6) Includes 100,000 shares of Common Stock for which Mr. Swenson shares
voting power with his wife.
(7) Includes (i) 83,220 shares of Common Stock held by Mr. Swenson's wife
and (ii) 69,720 shares of Common Stock Mr. Swenson holds as custodian
for his minor children.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1996, AirTran entered into an agreement with MarketLink, Inc., a
Minnesota corporation, pursuant to which MarketLink was retained to provide an
automated telephone system for AirTran, inclusive of hardware, software and
associated accessories. The agreement calls for monthly payments to MarketLink
of $4,400 for services provided under the agreement for a term of 36 months
and $95.00 per hour plus out-of-pocket costs for all development,
programming, testing and installation provided by MarketLink for applications
requested by AirTran for purposes other than specified in the agreement. During
1997, the Company paid MarketLink $4,400. John F. Horn, an executive officer
and director of the Company and AirTran during the year ended March 31, 1996,
was the Chairman of the Board of MarketLink from January 1993 until May 1996.
MarketLink is a publicly traded company of which Mr. Horn is a 5.7% beneficial
owner. The transaction with MarketLink was reviewed and approved by all members
of the Board, except Mr. Horn, who abstained from voting.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AIRWAYS CORPORATION
REGISTRANT
By: /S/ Mark B. Rinder
-------------------------------
Mark B. Rinder
Vice President, Finance and
Chief Financial Officer
Date: July 31, 1997
8
