America West Shareholders to Vote on Merger

PHOENIX (AP) -- Shareholders of America West Holdings Corp., the parent of Arizona-based America West Airlines, will vote on whether to approve the company's merger with bankrupt US Airways Group Inc.

The deal awaits approval from both America West shareholders and a court overseeing US Airways' bankruptcy case.

US Airways has been operating under Chapter 11 since last fall, and the merger with America West is the centerpiece of its reorganization plan.

Last week, the airline's unsecured creditors, a key party in the case, gave the thumbs-up. Some employee groups have raised objections.

The scheduling of America West's shareholder vote on Sept. 13 was revealed in a Securities Exchange Commission filing Monday.

Even though America West is considered the stronger of the two companies, the US Airways name will survive and be used when the nation's seventh- and eighth-largest carriers combine to create the No. 6 airline.

The goal of the combined company is to stitch together two geographically distinct airlines into one designed to better compete with lower-cost rivals.

America West stockholders will receive shares in the new US Airways Group for their America West stock. The exchange rate will be 0.4125 shares of the new company for each share of America West stock.

The filing said the combined airline's stock symbol will be LCC - which stands for low-cost carrier - on the New York Stock Exchange.

Another disclosure was that Doug Parker, the chief executive of America West who will hold the same position at the combined airline, will receive an array of stock benefits.

In exchange, he agreed to waive a ''change of control'' clause in his contract that would have provided a big severance payout if he voluntarily left within two years of the merger.

The company had said it was considering the move as a way to ensure that Parker stays but didn't provide details until now.

He was recently granted options to purchase 500,000 shares of America West stock at $8.65 per share. Those will convert to new US Airways stock when the merger is completed. They vest over time beginning on the second anniversary of the merger.

Shares of America West rose 1 cent to $8 in morning trading on the New York Stock Exchange.

Copyright 2005 Associated Press