<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
AirTran Holdings, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
AirTran Holdings, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
AIRTRAN HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of AirTran Holdings, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of AirTran
Holdings, Inc. (the "Company") will be held at the Georgia International
Convention Center, 1902 Sullivan Road, College Park, Georgia 30337 on Thursday,
May 20, 1999 at 11:00 a.m. Eastern Daylight Savings Time, for the following
purposes:
(1) To elect Directors for the ensuing year; and
(2) To transact such other business as may properly come before the
meeting.
Holders of the Common Stock of record at the close of business on April 1,
1999, will be entitled to notice of and to vote at the meeting.
Whether or not you expect to be present in person at the meeting, please
sign and date the accompanying proxy and return it promptly in the enclosed
postage paid reply envelope. This will assist us in preparing for the meeting.
By Order of the Board of Directors
Leslie C. Head
Secretary
April 13, 1999
Orlando, Florida
<PAGE>
AIRTRAN HOLDINGS, INC.
9955 AirTran Boulevard
Orlando, Florida 32827
(407) 261-5600
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of AirTran Holdings, Inc., a Nevada
corporation (the "Company") to be voted at the Annual Meeting of the
Stockholders of the Company to be held on May 20, 1999, and any adjournment or
adjournments thereof, for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. The Annual Meeting of Stockholders will be held
at the Georgia International Convention Center, 1902 Sullivan Road, College
Park, Georgia 30337, on Thursday, May 20, 1999, at 11:00 a.m. Eastern Daylight
Savings Time. This proxy statement and accompanying form of proxy were first
sent or given to Stockholders on or about April 13, 1999. The Company's Annual
Report for the year ended December 31, 1998, is being sent, concurrently
herewith, to each Stockholder of record.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At the Company's annual meeting, Stockholders will act upon the matters
outlined in the accompanying notice of meeting, including the election of
Directors. In addition, the Company's management will report on the performance
of the Company during the 1998 year and respond to questions from Stockholders.
Who is entitled to vote?
Only Stockholders of record at the close of business on the record date,
April 1, 1999, are entitled to receive notice of the annual meeting and to vote
the shares of Common Stock that they held on that date at the meeting, or any
postponement or adjournment of the meeting. Each outstanding share entitles its
holder to cast one vote on each matter to be voted upon.
Who can attend the meeting?
All Stockholders as of the record date, or their duly appointed proxies,
may attend the meeting. Seating, however, may be limited. Admission to the
meeting will be on a first-come, first-served basis. Each Stockholder may be
asked to present valid picture identification, such as a driver's license or
passport. Cameras, recording devices and other electronic devices will not be
permitted at the meeting.
Please note that if you hold your shares in "street name" (that is,
through a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the record date.
<PAGE>
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding on the record date will
constitute a quorum, permitting the meeting to conduct its business. As of the
record date, 64,926,864 shares of Common Stock of the Company were outstanding.
Proxies received but marked as abstentions and broker non-votes will be included
in the calculations of the number of shares considered to be present at the
meeting.
How do I vote?
If you complete and properly sign the accompanying proxy card and return
it to the Company, it will be voted as you direct. If you are a registered
stockholder and attend the meeting, you may deliver your completed proxy card in
person. "Street name" Stockholders who wish to vote at the meeting will need to
obtain a proxy form from the institution that holds their shares.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy, you may change your vote
at any time before the proxy is exercised by filing with the Secretary of the
Company either a notice of revocation or a duly executed proxy bearing a later
date. The powers of the proxy holders will be suspended if you attend the
meeting in person and so request, although attendance at the meeting will not by
itself revoke a previously granted proxy.
What are the Board's recommendations?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendations of the Board of Directors. The Board recommends a vote FOR
election of the nominated slate of Directors.
With respect to any other matter that properly comes before the meeting,
the proxy holders will vote as recommended by the Board of Directors or, if no
recommendation is given, in their own discretion.
What vote is required to approve each item?
Election of Directors. The affirmative vote of a plurality of the votes
cast at the meeting is required for the election of Directors. A properly
executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of one
or more Directors will not be voted with respect to the Director or Directors
indicated, although it will be counted for purposes of determining whether there
is a quorum.
Other Items. For each other item, the affirmative vote of the holders of
a majority of the shares represented in person or by proxy and entitled to vote
on the item will be required for approval. The Company's management knows of no
matter to be brought before the meeting other than those mentioned herein. If,
however, any other matters properly come before the meeting, it is intended that
the proxies will be voted in accordance with the judgment of the person or
persons voting such proxies.
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<PAGE>
How will proxies be solicited?
Proxies will be solicited by mail. Proxies may also be solicited by
officers and regular employees of the Company personally or by telephone or
facsimile, but such persons will not be specifically compensated for such
services. Banks, brokers, nominees and other custodians and fiduciaries will be
reimbursed for their reasonable out-of-pocket expenses in forwarding soliciting
material to their principals, the beneficial owners of Common Stock of the
Company. The expense of preparing, assembling, printing, mailing and soliciting
proxies will be borne by the Company.
STOCK OWNERSHIP
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth, as of February 28, 1999 (unless otherwise
indicated in the footnotes), certain information with respect to the Company's
Common Stock owned beneficially by each Director, by each Nominee for election
as a Director, by all Executive Officers and Directors as a group and by each
person known by the Company to be a beneficial owner of more than 5% of the
outstanding Common Stock of the Company. Except as noted in the footnotes, each
of the persons listed has sole investment and voting power with respect to the
shares of Common Stock included in the table.
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Ownership (2)
- ---------------------------------------------- ---------------------- ----------------
<S> <C> <C>
Lewis H. Jordan (3).......................... 4,260,235 6.3%
Robert L. Priddy (4).......................... 3,645,000 5.6%
Robert D. Swenson (5)......................... 673,562 1.0%
Don L. Chapman (6)............................ 85,000 *
John K. Ellingboe (7)......................... 35,287 *
Joseph B. Leonard............................ --- ---
All Executive Officers and Directors as a
group (10 persons) (2)(3)(4)(5)(6)(7)(8)... 8,862,884 12.9%
</TABLE>
- ------------------
* Less than 1%
(1) Information with respect to beneficial ownership is based upon information
furnished by each owner.
(2) The percent of outstanding Common Stock owned is determined by assuming that
in each case the person only, or group only, exercised his or its rights to
purchase all shares of Common Stock underlying presently exercisable stock
options.
(3) Includes options to purchase 3,045,000 shares of Common Stock which are
presently exercisable and also includes 50,000 shares owned by a trust under
which Mr. Jordan is a beneficiary. Mr. Jordan's address is 610 Wingspread,
Peachtree City, Georgia 30269.
(4) Includes options to purchase 645,000 shares of Common Stock which are
presently exercisable. Mr. Priddy's address is 9410 Laguna Niguel Drive,
#104, Las Vegas, Nevada 89134.
(5) Includes options to purchase 326,667 shares which are presently exercisable.
Includes 83,220 shares of Common Stock held by Mr. Swenson's wife and 73,720
shares of Common Stock Mr. Swenson holds as custodian for his minor
children.
(6) Includes 69,000 shares of Common Stock owned by a corporation in which Mr.
Chapman is an officer and sole stockholder and options to purchase 15,000
shares of Common Stock which are presently exercisable.
(7) Includes options to purchase 13,667 shares which are presently exercisable.
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<PAGE>
(8) In addition to outstanding shares of Common Stock owned by Executive
Officers not named in the table, also included are options to purchase
89,000, 50,000 and 22,500 shares of Common Stock by Thomas Kalil, Jeffrey
MacKinney and Robert Zoller, respectively, which are presently exercisable.
ELECTION OF DIRECTORS
The entire Board of Directors of the Company is to be elected for a term of
one year and until their successors are elected and qualified. The Company's
By-laws provide that there shall be not less than three, nor more than nine,
Directors. The Board of Directors has determined that six Directors be elected
for the ensuing year. The following persons have been nominated for election to
the Board of Directors (all of whom are currently Directors): Don L. Chapman,
John K. Ellingboe, Lewis H. Jordan, Joseph B. Leonard, Robert L. Priddy and
Robert D. Swenson. It is the intention of the persons named in the accompanying
proxy form to vote for the election of all nominees. If for any reason any such
nominee is not a candidate when the election occurs, which event is not
anticipated, it is the intention of the persons named in the accompanying proxy
form to vote for the remaining nominees named and to vote in accordance with
their best judgment if any substitute nominees are named.
Identification of Directors and Executive Officers
The following table contains the name, age and position with the Company of
each Executive Officer and Director of the Company. Their respective
backgrounds are described following the table.
<TABLE>
<CAPTION>
Age Position
--- --------
<S> <C> <C>
Joseph B. Leonard 55 Chairman of the Board, President, Chief Executive Officer and Director
Robert L. Fornaro 46 President of Operating Subsidiary
Stephen J. Kolski 58 Senior Vice President - Operations of Operating Subsidiary
Marilyn L. Rogers 51 Senior Vice President - Customer Service of Operating Subsidiary
Richard A. Schroeter 52 Senior Vice President - Finance and Chief Financial Officer
Robert W. Zoller, Jr. 52 Senior Vice President - Maintenance of Operating Subsidiary
Don L. Chapman 59 Director
John K. Ellingboe 48 Director
Lewis H. Jordan 54 Director
Robert L. Priddy 52 Director
Robert D. Swenson 44 Director
</TABLE>
Joseph B. Leonard joined the Company in January 1999 as Chairman of the
Board, President and Chief Executive Officer. From 1993 to 1998, Mr. Leonard
served in various executive capacities for AlliedSignal, Inc. and its Aerospace
division, last serving as the President and Chief Executive Officer of
Marketing, Sales and Service of AlliedSignal Aerospace and Senior Vice President
of AlliedSignal, Inc. during 1998. From 1991 to 1993, Mr. Leonard served as
Executive Vice President of Northwest Airlines. Prior to that, Mr. Leonard
served in various executive positions for Eastern Airlines from 1984 to 1990, as
Assistant Vice President, Aircraft Maintenance for American Airlines from 1982
to 1984 and in various maintenance and quality control positions for Northwest
Airlines from 1969 to 1982. Mr. Leonard was elected to the Board of Directors
pursuant to the terms of his Employment Agreement with the Company.
-4-
<PAGE>
Robert L. Fornaro joined the Company in March 1999 as the President of its
operating subsidiary. From February 1998 until March 1999, he served as a
consultant in the airline industry. From 1992 to February 1998, Mr. Fornaro
served as Senior Vice President - Planning for US Airways. Prior to that, he
served as Senior Vice President - Marketing Planning at Northwest Airlines from
1988 to 1992.
Stephen J. Kolski joined the Company in March 1999 as Senior Vice President
- - Operations of its operating subsidiary. From 1995 until March 1999, he served
as a consultant in the aerospace industry. From 1993 to 1995, he served as a
Director, President and Chief Operating Officer of ATX, Inc. From 1990 to
1993, Mr.Kolski served as President and Chief Operating Officer of Continental
Express. From 1966 to 1990, Mr. Kolski held various management positions with
responsibilities over flight operations, aircraft maintenance and collective
bargaining negotiations for National Airlines (1966 to 1980), New York Air which
he founded (1980 to 1987) and Eastern Airlines (1987 to 1990).
Marilyn L. Rogers joined the Company in March 1999 as Senior Vice President
- - Customer Service of its operating subsidiary. From 1991 to March 1999, Ms.
Rogers worked for Northwest Airlines in various management positions, serving as
Vice President - Customer Service - Ground Operations for the Central U.S.
Region from 1995 to 1999. Prior to that, Ms. Rogers served in various
capacities for Eastern Airlines from 1972 to 1991, her last position being as
director of customer service.
Richard A. Schroeter joined the Company in May 1998 as Senior Vice
President - Finance and Chief Financial Officer. Mr. Schroeter was self-
employed as an airline consultant from May 1997 to May 1998. From September
1993 until May 1997, Mr. Schroeter served as President of Northwest Aircraft, an
affiliate of Northwest Airlines. Prior to that, he served as Vice President and
Controller and Vice President and Treasurer of Continental Airlines from 1989 to
1993 and as Vice President and Treasurer of Eastern Airlines from 1987 to 1989.
Robert W. Zoller, Jr. has been employed by the Company's operating
subsidiary since December 1995 as Vice President - Technical Operations and Vice
President - Maintenance and has served as Senior Vice President - Maintenance
and Engineering since May 1998. From February 1991 to December 1995, Mr. Zoller
was employed by American Airlines as Vice President - Operations of AMR Eagle,
Inc.
Don L. Chapman has served as a Director of the Company since 1994. Since
December 1998, Mr. Chapman has served as President of S&S Tug, a ground support
equipment manufacturer. He served as Chief Executive Officer of that company's
predecessor, Tug Manufacturing Company, since he acquired that company in 1977.
He also served as Chief Executive Officer of Opti World, Inc., an optical
superstore chain, from 1983 (when he founded that Company) until 1995. From
July 1991 to November 1992, he served as Chairman of Winkler Products, a plastic
cutlery manufacturer. He also serves as a director of Rare Hospitality (since
1992).
John K. Ellingboe was elected as a Director of the Company in November 1997
pursuant to the terms of the Merger Agreement between the Company and Airways
Corporation ("Airways"). He served as a director of Airways from April 1995
until November 1997 when Airways merged into the Company and a director of
AirTran Airways from June 1994 until November 1997. Mr. Ellingboe served as a
director of Mesaba Holdings, Inc. from September 1990 to September 1995. Since
January 1998, Mr. Ellingboe has served as President, Mergers and Acquisitions of
NJK Holding Corporation, a private investment company, and since June 1996, Mr.
Ellingboe has also been Chief Executive Officer of PMSA
-5-
<PAGE>
Management Group, LLC, a management consulting firm. From October 1993 to May
1996, he was Senior Vice President, Business Development, General Counsel and
Secretary of Fingerhut Companies, Inc. From May 1990 to October 1993, he was
Vice President, General Counsel and Secretary of Fingerhut Companies, Inc. Prior
to 1990, he was an attorney in private practice.
Lewis H. Jordan is the founder and principal officer of Wingspread
Enterprises, an investment and consulting firm. Mr. Jordan has served as a
Director of the Company since June 1993. Mr. Jordan also served as President
and Chief Operating Officer of the Company from June 1993 until November 1997.
As of November 1996, he resigned his position as President and Chief Operating
Officer of the Company's operating subsidiary. He served as President and Chief
Operating Officer and as a director of Continental Airlines from August 1991 to
March 1993 and served as Executive Vice President of that company from 1986 to
August 1991. From 1985 to 1986, he served as President and Chief Operating
Officer of Flying Tigers, an air cargo carrier, and was previously employed by
Flying Tigers as Executive Vice President and Chief Operating Officer from 1984
to 1985, as Senior Vice President - Operations from 1980 to 1982 and as Vice
President - Maintenance and Engineering from 1979 to 1980. From 1982 to 1984,
he served as Executive Vice President and Chief Operating Officer of Air Treads,
Inc., an aviation tire retreading, wheel and brake company. From 1962 to 1979,
he held various positions with Southern Airways, his last position being
Assistant Vice President in charge of technical operations. He also serves as a
Director of Rare Hospitality (since 1998).
Robert L. Priddy is an investor and a founder of RMC Capital, LLC, an
investment company. Mr. Priddy was employed as the Chairman of the Board and
Chief Executive Officer of the Company from its inception until November 1997.
He has served as a Director of the Company since he participated in its founding
in July 1992. As of November 1996, he resigned his position as Chairman of the
Board and Chief Executive Officer of the Company's operating subsidiary. Prior
to his involvement with the Company, Mr. Priddy founded Florida Gulf Airlines as
a subsidiary of Mesa Airlines, for which he served as president from December
1991 to April 1993. From July 1991 to January 1993, he also served as a
director of Mesa Airlines, Inc. From January 1988 to November 1991, he served
as President and Chief Executive Officer of Air Midwest, Inc., a regional
airline headquartered in Wichita, Kansas, for which he also served as a director
from November 1987 to November 1991. From 1979 to 1987, he served as Vice
President and Chief Financial Officer of Atlantic Southeast Airlines, Inc.
("ASA"), a regional airline headquartered in Atlanta, Georgia, for which he also
served as a director from 1981 to 1987. He was one of three founding
shareholders of ASA. From 1966 to 1979, he worked for Southern Airways in
various capacities, his last responsibilities being manager of scheduling,
pricing and market analysis. He also serves as a director of Accumed
International, a medical equipment company, since 1997 and of Datalink Systems
Corporation, a wireless communications technology company, since 1998.
Robert D. Swenson was elected as Chairman of the Board of the Company in
November 1997 pursuant to the terms of the merger agreement with Airways and
served in such position until January 1999 when Mr. Leonard joined the Company.
Mr. Swenson continues to serve as a Director of the Company. He served as
Chairman of the Board and Chief Executive Officer of Airways from April 1995
until November 1997 when Airways merged into the Company and he served as
Chairman of the Board of AirTran Airways from June 1994 until November 1997.
From June 1994 to January 1995, Mr. Swenson was President of AirTran Airways.
Mr. Swenson served as 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 September 1995. Mr.
-6-
<PAGE>
Swenson also served as President of Mesaba's predecessor from 1978 until March
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.
The merger agreement between Airways Corporation and the Company provided
for the Company to select four members of the Board and for Airways to select
three members of the Board. Five of the current members of the Board (Messrs.
Chapman, Ellingboe, Jordan, Priddy and Swenson) were selected by the respective
companies in accordance with the terms of the merger agreement.
Committees of the Board of Directors
The Company has a standing Audit Committee and Compensation Committee. The
Audit Committee consists of Don L. Chapman, Robert L. Priddy and John K.
Ellingboe. The Audit Committee met two times during the 1998 fiscal year. The
Audit Committee is empowered to: (i) recommend the appointment or removal of
the Company's auditors; (ii) review and recommend approval of the scope and
results of the independent audit of the Company; (iii) review audit fees; and
(iv) review changes in accounting policies that have a significant effect on the
Company's financial reports.
The Compensation Committee consists of Robert D. Swenson and John K.
Ellingboe. Lewis H. Jordan serves as a non-voting member of this committee.
Although the Compensation Committee did not meet separately from the entire
Board during 1998, it took action by unanimous consent of its members. The
Compensation Committee is empowered to: (i) approve compensation levels for
each Executive Officer who also serves as a member of the Board of Directors and
for any other officer or employee of the Company whose annual base salary is in
excess of $100,000; (ii) approve all incentive payments to each Executive
Officer who also serves as a member of the Board of Directors; and (iii)
undertake administration, upon specific direction of the Board of Directors, of
employee benefit plans.
Meetings of the Board of Directors
The Board of Directors met ten times during the Company's 1998 fiscal year
and took action on other occasions by unanimous consent. Each incumbent
Director attended at least 75% of the total of all Board and Committee meetings
he was entitled to attend during the 1998 year.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's Directors and
Executive Officers, and persons who own more than 10% of the Company's equity
securities, to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission. Such persons are
required by the Exchange Act to furnish the Company with copies of all Section
16(a) forms they file.
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<PAGE>
Based solely on its review of the copies of such forms received by it with
respect to transactions during 1998, or written representations from certain
reporting persons, the Company believes that all filing requirements applicable
to its Directors, Executive Officers and persons who own more than 10% of the
Company's equity securities have been complied with except that the initial
beneficial ownership report of Robert W. Zoller, Jr. was filed less than 10
days late.
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31, 1996,
December 31, 1997, and December 31, 1998, the cash compensation paid by the
Company, as well as certain other compensation paid or accrued for such year,
for the Company's Chief Executive Officer and those other Executive Officers
with compensation in excess of $100,000 during 1998. Such table also indicates
all capacities in which they served.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------------------- ------------
Other All
Name and Annual other
Principal Compen- Options Compen-
Position Year Salary ($) Bonus ($) sation($) (#) sation ($)
- ------------- --- --------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
D. Joseph Corr, President and 1998 299,241 0 0 None 0
Chief Executive Officer (1) 1997 253,151 0 0 600,000(2) 0
1996 31,644 0 0 450,000 0
Thomas Kalil 1998 189,519 0 0 None 0
Senior Vice President (3) 1997 129,643 0 0 150,000 0
1996 105,480 0 0 None 0
Jeffrey L. MacKinney 1998 129,671 0 0 None 0
Senior Vice President (4) 1997 9,973 0 0 150,000 0
Robert W. Zoller, Jr. 1998 117,474 0 0 None 0
Senior Vice President 1997 70,345 0 0 45,000 0
and Vice President 1996 70,882 0 0 2,500 0
Richard A. Schroeter (5) 1998 97,231 0 20,000 150,000 0
</TABLE>
- --------------------
(1) Mr. Corr commenced employment with the Company in October 1996, and
therefore, the compensation shown for him for 1996 is for the period from
his employment commencement date to December 31, 1996. Prior to November
1997, Mr. Corr served as President of the Company's operating subsidiary.
Mr. Corr's employment with the Company terminated in January 1999.
(2) Includes the repricing of the 450,000 options granted in 1996.
(3) As of March 1999, Mr. Kalil semi-retired and no longer serves as an
Executive Officer of the Company.
(4) Mr. MacKinney commenced employment with the Company in November 1997, and
therefore, the compensation shown for him for 1997 is for the period from
November 1997 through December 1997. Mr. MacKinney's employment with the
Company terminated in March 1999.
-8-
<PAGE>
(5) Mr. Schroeter commenced employment with the Company in May 1998, and
therefore, the salary shown for him is for the period from May 1998 through
December 1998. In addition, Mr. Schroeter received a signing bonus
reflected as other compensation above.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Robert D. Swenson and John K.
Ellingboe, neither of whom are officers or employees of the Company.
Employment Agreements
Joseph B. Leonard. The Company's employment agreement with Mr. Leonard
provides for a three year term expiring on December 31, 2001, and severance pay
of $500,000 in the event Mr. Leonard's employment is terminated by the Company
without cause. Mr. Leonard's base salary under the employment agreement is
$350,000 per year and he may earn a bonus of up to 150% of his base salary each
year based on the profitability of the Company during the year. In connection
with the execution of the employment agreement, Mr. Leonard was paid a $100,000
signing bonus and was granted 1,500,000 options vesting over a three year
period. Under the agreement, Mr. Leonard is also entitled to reimbursement of
certain moving expenses.
Robert L. Priddy. The Company's consulting agreement with Mr. Priddy
provides for a compensation of $100,000 per year for the first five years of the
agreement and $20,000 per year for the last two years. Mr. Priddy is to provide
consulting services to the Company during the seven-year term of his consulting
agreement expiring in 2004.
Lewis H. Jordan. The Company's consulting agreement with Mr. Jordan
provides for a compensation of $100,000 per year for the first five years of the
agreement and $20,000 per year for the last two years. Mr. Jordan is to provide
consulting services to the Company during the seven-year term of his consulting
agreement expiring in 2004.
D. Joseph Corr. The Company's employment agreement with Mr. Corr provided
for a three year term expiring in 1999. Mr. Corr's base salary was $300,000 per
year. Pursuant to an agreement with the Company, Mr. Corr was paid $300,000 of
severance pay upon his departure from the Company in January 1999.
Richard A. Schroeter. Under an agreement with the Company, Mr. Schroeter
will be entitled to one year's base salary upon his termination of employment
by the Company without cause.
Option Grants in Last Fiscal Year
The table below sets forth information regarding all stock options granted
in the 1998 fiscal year under the Company's Stock Option Plans to those
Executive Officers of the Company named in the Compensation Table above.
-9-
<PAGE>
<TABLE>
<CAPTION>
% of
Total Market
Number of Options Price
Securities Granted to or Fair Potential Realized Value at
Underlying Employees Value Assumed Annual Rates of
Options in Fiscal Exercise on Date Expiration Stock Price Appreciation
Granted Year Price of Grant Date 5% 10%
------- ---- -------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
D. Joseph Corr None
Thomas Kalil None
Jeffrey L. MacKinney None
Robert W. Zoller, Jr. None
Richard A. Schroeter 150,000 63.8% $8.125 $8.125 5/11/08 $766,465 $1,942,373
</TABLE>
- ----------------------------
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and therefore
are not intended to forecast possible future appreciation, if any, of the
price of the Company's stock.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table shows aggregate exercises of options during 1998 and
the values of options held as of December 31, 1998 by those Executive Officers
of the Company named in the Compensation Table above.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-The-Money Options
December 31, 1998 (#) December 31, 1998 (1)
Shares Acquired Value Exercisable (E)/ Exercisable (E)/
Name on Exercise (#) Realized Unexercisable (U) Unexercisable (U)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
D. Joseph Corr - - 350,000 E None
D. Joseph Corr - - 250,000 U None
Thomas Kalil - - 89,000 E None
Thomas Kalil - - 116,000 U None
Jeffrey L. MacKinney - - 50,000 E None
Jeffrey L. MacKinney - - 100,000 U None
Robert W. Zoller, Jr. - - 22,000 E None
Robert W. Zoller, Jr. - - 35,500 U None
Richard A. Schroeter - - 150,000 U None
</TABLE>
- --------------------
(1) Amounts shown are based upon the closing sale price for the Company's Common
Stock on December 31, 1998, which was $2.625 per share.
Director Compensation
The Company's outside Directors (Messrs. Chapman, Ellingboe, Jordan,
Priddy and Swenson) receive a retainer of $5,000 per quarter plus meeting fees
of $1,000 per meeting of the Board of Directors or Committee attended in person
and $500 per meeting of the Board of Directors or Committee attended by phone in
addition to reimbursement of their expenses in attending meetings of the Board
of Directors. In addition, each outside Director is to receive options to
purchase 5,000 shares of Common Stock upon the date of the Company's annual
stockholders' meeting at the then current stock price, with vesting over three
years of service for the Company.
-10-
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's Executive Officers is determined by the
Compensation Committee of the Board of Directors on an annual basis. The
Compensation Committee considers all elements of compensation in making its
determinations. With respect to those Executive Officers who do not serve on
the Company's Board of Directors, the Compensation Committee also considers the
recommendations of the Company's President. The principal elements of
compensation for the Company's Executive Officers are base salary, cash bonuses
and stock incentives and stock options.
Base Salary. The base salary of the Company's President and Chief
Executive Officer during 1998 (D. Joseph Corr) was initially established under
his employment agreement which was signed in 1996. The employment agreement
established a base salary of $250,000 per year. The entire Board of Directors
determined to increase Mr. Corr's base salary to $300,000 for 1998. The initial
base salary of $350,000 for the Company's newly elected Chairman of the Board,
President and Chief Executive Officer (Joseph B. Leonard) was established
pursuant to negotiations of his employment agreement which was signed in January
1999.
Cash Bonuses. The Company has adopted an Executive Incentive
Compensation Plan for 1999 under which Mr. Leonard and other management
employees will be entitled to a bonus in 1999 based on the Company's
profitability (calculated based on a return on equity) in excess of a base rate
equal to the treasury bill rate. Due to the Company's lack of profitability
during 1998, no incentive bonuses were paid to the Company's Executive Officers
for the year.
Stock Options. The Company intends to rely heavily on stock options to
provide incentive compensation to its Executive Officers and other key employees
and to align their interests with those of the Company's Stockholders. In that
regard, stock options were granted to the Company's newly hired Chairman of the
Board, President and Chief Executive Officer in January 1999 (options to
purchase 1,500,000 shares) and to the Company's newly hired Chief Financial
Officer in May 1998 (options to purchase 150,000 shares). All of these options
are exercisable at fair market value. All of these options will vest over three
years. The vesting schedule is designed to encourage employment with the
Company throughout the vesting period.
Submitted by
COMPENSATION COMMITTEE
John K. Ellingboe Robert D. Swenson
The foregoing report should not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
-11-
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following stock price performance graph compares the Company's
performance to the CRSP Total Return Index for The NASDAQ Stock Market (US) and
the Standard & Poors Airlines Index. The stock price performance graph assumes
an investment of $100 in the Company and the two indexes, respectively, on June
28, 1994, and further assumes the reinvestment of all dividends. The Standard &
Poors Airlines Index includes AMR Corporation, Delta Air Lines, USAir Group and
Southwest Airlines. Stock price performance, presented for the period from June
28, 1994 (the date upon which the Common Stock of the Company was first traded)
through December 31, 1998 is not necessarily indicative of future results. The
June 28, 1994 stock price used for the Company's stock is the initial public
offering price.
<TABLE>
<CAPTION>
6/28/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
AirTran Holdings, Inc. $100.00 $170.00 $792.00 $206.00 $128.00 $84.00
Standard & Poors Airlines Index $100.00 $84.08 $122.79 $134.61 $226.57 $219.19
NASDAQ Stock Market Index (US) $100.00 $107.71 $152.34 $187.33 $229.82 $323.07
</TABLE>
The stock price performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
-12-
<PAGE>
CERTAIN TRANSACTIONS
During 1998, the Company purchased ground support equipment from Tug
Manufacturing Corporation ("Tug") in which Don L. Chapman is an officer and 100%
stockholder. The amount of ground support equipment purchased by the Company
from Tug was approximately $306,000 during 1998. The business of Tug was sold
in December 1998 to S&S Tug of which Mr. Chapman remains an executive officer.
The Company intends to continue purchasing such equipment from S&S Tug so long
as S&S Tug's equipment meets the Company's quality, price and time of delivery
requirements. The Company began to purchase equipment from Tug prior to Mr.
Chapman being elected to the Company's Board of Directors and management
believes that its purchases from Tug have been at competitive prices and terms.
In January 1999, the Company entered into a Loan Agreement with Lewis H.
Jordan, Robert L. Priddy and the two other founders of the Company under which
the four founders have agreed to loan an aggregate of $1,000,000 to the Company
on or before April 15, 1999, upon the Company's request after satisfaction of
certain conditions related to the proposed settlement of the pending securities
class action lawsuit against the Company and various individual defendants,
including the founders. Any amounts loaned under this Agreement will bear
interest at 10% per annum and will be due in August 1999. If not paid when due,
the promissory note will be convertible into Common Stock at the stock's then
current market value.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the ensuing fiscal year. Ernst & Young LLP has served
as the Company's independent auditors since its inception. Representatives of
Ernst & Young LLP are expected to be present at the Annual Meeting with the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions.
OTHER MATTERS
Stockholders' Proposals for Annual Meeting to be held in 2000
The Company plans to hold its 2000 Annual Meeting of Stockholders during
the month of May. Any proposal of a Stockholder intended to be presented at
said Annual Meeting of Stockholders must be received by the Company for
inclusion in the proxy statement and form of proxy for that meeting no later
than December 15, 1999.
Action on Other Matters at the Annual Meeting
At this time, the Company does not know of any other matters to be
presented for action at the Annual Meeting other than those mentioned in the
Notice of Annual Meeting of Stockholders and referred to in this proxy
statement. If any other matter comes before the meeting, it is intended that
the proxies will be voted in respect thereof in accordance with the judgment of
the persons voting the proxies.
-13-
<PAGE>
STOCKHOLDERS ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED
PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES. YOUR COOPERATION WILL BE APPRECIATED. YOUR PROXY WILL BE VOTED,
WITH RESPECT TO THE MATTERS IDENTIFIED THEREON, IN ACCORDANCE WITH ANY
SPECIFICATIONS ON THE PROXY.
BY ORDER OF THE BOARD OF DIRECTORS,
Leslie C. Head
Secretary
-14-
<PAGE>
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 20, 1999
AIRTRAN HOLDINGS, INC.
The undersigned hereby appoints Joseph B. Leonard and Leslie C. Head, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of common stock held of record on April 1, 1999, at the Annual Meeting
of the Stockholders to be held on May 20, 1999 at 11:00 A.M. at the Georgia
International Convention Center, 1902 Sullivan Road, College Park, Georgia
30337, or any adjournment thereof.
1. Election of Directors
FOR ALL NOMINEES listed WITHHOLD AUTHORITY
below (except as marked to to vote for all
the contrary below). [_] nominees listed
below. [_]
(INSTRUCTION: To withhold authority to vote for any individual nominee strike
a line through the nominee's name in the list below.)
<TABLE>
<S> <C> <C>
Don L. Chapman John K. Ellingboe Lewis H. Jordan
Joseph B. Leonard Robert L. Priddy Robert D. Swenson
</TABLE>
2. In their discretion, the Proxies are authorized to vote upon such other
business as may come before the meeting or adjournment thereof.
THIS PROXY, DULY EXECUTED, WILL BE VOTED AS SPECIFIED. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
<PAGE>
AIRTRAN HOLDINGS, INC.
PROXY
The undersigned hereby acknowledges receipt of the Proxy Statement and Notice
of Annual Meeting to be held May 20, 1999.
Dated: __________, 1999
(SEAL)
(SEAL)
(Please sign exactly
as your name appears
hereon. If stock is
registered in more
than one name, each
holder should sign.
When signing as an
attorney,
administrator,
executor, guardian or
trustee, please add
your title as such. If
executed by a
corporation, the proxy
should be signed by a
duly authorized
officer).
PLEASE SIGN, DATE AND
PROMPTLY RETURN THIS
PROXY IN THE ENCLOSED
ENVELOPE. NO POSTAGE
IS REQUIRED IF MAILED
IN THE UNITED STATES.
I PLAN TO ATTEND _________
