<PAGE> 1
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SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
TRANS WORLD AIRLINES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TRANS WORLD AIRLINES, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:_______
(2) Aggregate number of securities to which transaction applies:__________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):____________
(4) Proposed maximum aggregate value of transaction:______________________
(5) Total fee paid:_______________________________________________________
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:_______________________________________________
(2) Form, Schedule or Registration Statement No.:_________________________
(3) Filing Party:_________________________________________________________
(4) Date Filed:___________________________________________________________
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<PAGE> 2
TRANS WORLD AIRLINES, INC.
To our Stockholders:
On behalf of the Board of Directors, it is our pleasure to invite you to
attend the Annual Meeting of Stockholders of Trans World Airlines, Inc. (the
"Company").
As shown in the formal notice enclosed, the meeting will be held at the
Americas Center, 801 Convention Plaza, St. Louis, Missouri 63101, on Tuesday,
May 21, 1996, at 10:00 a.m. local time.
The subjects proposed for action at the meeting are: (i) the election of
five Class III directors, (ii) the approval of amendments to and restatement of
the Company's Second Amended and Restated Certificate of Incorporation, (iii)
the approval of amendments to Article Ninth of the Company's Second Amended and
Restated Certificate of Incorporation, (iv) the ratification of the appointment
of KPMG Peat Marwick LLP as independent accountants for the fiscal year ending
December 31, 1996, and (v) the transaction of such other business as may
properly come before the meeting or any adjournment thereof.
To help us plan for the meeting, please mark the appropriate box on your
proxy card telling us if you will be attending in person.
It is important that your shares be represented at this meeting in order
that the presence of a quorum may be assured. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, YOU ARE URGED TO DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY
CARD IN THE ENVELOPE PROVIDED AND TO DO SO IN ADEQUATE TIME FOR YOUR DIRECTIONS
TO BE RECEIVED AND TABULATED PRIOR TO THE SCHEDULED MEETING.
Sincerely yours,
THOMAS F. MEAGHER
Chairman of the Board
<PAGE> 3
TRANS WORLD AIRLINES, INC.
NOTICE OF MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1996
TO THE STOCKHOLDERS OF
TRANS WORLD AIRLINES, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Trans World Airlines, Inc., a Delaware corporation (the
"Company"), will be held on Tuesday, May 21, 1996, at 10:00 a.m., local time, at
the Americas Center, 801 Convention Plaza, St. Louis, Missouri 63101, for the
purposes of considering and acting upon the following:
(1) the election of five Class III directors of the Company for terms
ending with the 1999 Annual Meeting of Stockholders and until their
successors are elected and qualified;
(2) the approval of amendments to and restatement of the Company's
Second Amended and Restated Certificate of Incorporation;
(3) the approval of amendments to Article Ninth of the Company's
Second Amended and Restated Certificate of Incorporation;
(4) the ratification of the appointment of KPMG Peat Marwick LLP as
independent accountants for the fiscal year ending December 31, 1996; and
(5) the transaction of such other business as may properly come before
the Meeting or any adjournment thereof.
The Board of Directors recommends that you vote, according to your voting
rights, "FOR" the nominees for Class III directorships and further recommends
that Stockholders vote "FOR" agenda items 2, 3, and 4 above.
Abstentions and "broker non-votes" are counted for purposes of determining
the presence or absence of a quorum for the transaction of business.
Only stockholders of record at the close of business on March 27, 1996 will
be entitled to notice of and to vote at the Meeting or any adjournment thereof.
The Meeting may be adjourned from time to time without notice other than by
announcement. A list of stockholders entitled to vote at the Meeting will be
available for inspection by any stockholder for any purpose germane to the
Meeting, during ordinary business hours, during the ten days prior to the
Meeting, at the Company's headquarters located at One City Centre, 515 N. Sixth
Street, St. Louis, Missouri 63101.
By Order of the Board of Directors
KATHLEEN A. SOLED
Corporate Secretary
St. Louis, Missouri
April , 1996
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING, REGARDLESS
OF THE NUMBER OF SHARES YOU HOLD, IN ORDER THAT A QUORUM MAY BE ASSURED. WHETHER
OR NOT YOU PLAN TO BE PRESENT AT THE MEETING IN PERSON, PLEASE COMPLETE, SIGN,
DATE AND MAIL THE ENCLOSED PROXY IN THE ACCOMPANYING RETURN ENVELOPE TO WHICH NO
POSTAGE NEED BE AFFIXED BY THE SENDER IF MAILED WITHIN THE UNITED STATES. IF YOU
RECEIVE MORE THAN ONE PROXY BECAUSE YOUR SHARES ARE REGISTERED IN DIFFERENT
NAMES OR ADDRESSES, EACH SUCH PROXY SHOULD BE SIGNED AND RETURNED TO ASSURE THAT
ALL OF YOUR SHARES WILL BE VOTED. THE PROXY SHOULD BE SIGNED BY ALL REGISTERED
HOLDERS EXACTLY AS THE STOCK IS REGISTERED.
<PAGE> 4
TRANS WORLD AIRLINES, INC.
ONE CITY CENTRE
18TH FLOOR
515 N. SIXTH STREET
ST. LOUIS, MISSOURI 63101
PROXY STATEMENT, DATED APRIL , 1996,
FOR MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1996
INTRODUCTION
VOTE BY PROXY
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Trans World Airlines, Inc. (the
"Company" or "TWA") from the holders of the Company's common stock, $.01 par
value per share (the "Common Stock"), and the Company's preferred stock issued
in three series to TWA union employees, $0.01 par value per share (the "Employee
Preferred Stock"), which are the series of capital stock of the Company entitled
to vote (the Common Stock and the Employee Preferred Stock are sometimes
referred to collectively herein as the "Voting Stock"), for use at the Annual
Meeting of Stockholders to be held on Tuesday, May 21, 1996, at 10:00 a.m.,
local time, and any adjournment or postponement thereof (the "Meeting"), for the
purposes set forth in the accompanying Notice of Meeting and described in detail
herein. This Proxy Statement, together with a form of proxy, is first being
mailed to security holders on or about April , 1996.
All properly executed proxies in the form enclosed received in time for the
Meeting will be voted, according to their voting rights and in accordance with
the instructions contained thereon and, if no choice is specified, proxies will
be voted, according to their voting rights, FOR the election of the five
nominees for Class III directors named herein and for Agenda Items Two, Three
and Four described herein.
Any person giving a proxy pursuant to this Proxy Statement may revoke it at
any time before it is exercised at the Meeting by filing with the Corporate
Secretary of the Company, at the address of the Company stated above, a written
notice of such revocation or a duly executed proxy bearing a later date. In
addition, if a person executing a proxy is present at the Meeting, such person
may, but need not, revoke his or her proxy, by notice of such revocation to the
Secretary of the Meeting, and vote such person's shares in person. Proxies, if
in the form enclosed, duly signed and received in time for voting, and not
revoked before they are voted, will be voted at the Meeting in accordance with
the instructions specified therein.
Certain beneficial holders of Voting Stock will receive proxy materials
pursuant to the federal securities laws, even though, with respect to certain
matters, such beneficial holders do not have the right to vote the shares of
Voting Stock which they hold beneficially and do not have the right to direct
the registered holder of such shares with respect to the manner in which such
shares are to be voted. See "Voting Rights."
COST OF PROXY SOLICITATION
The cost of soliciting proxies will be borne by the Company.
Proxies may be solicited by the Company's directors, officers and regular
employees, without separate remuneration, in person or by telephone, facsimile
transmission, telegram or mail. It is anticipated that banks, brokerage houses
and other custodians, nominees and fiduciaries will forward soliciting material
to beneficial owners of Common Stock and such persons will be reimbursed for
out-of-pocket expenses incurred by them in connection therewith in accordance
with the regulations of the Securities and Exchange Commission (the "SEC") for
sending proxies and proxy materials to the beneficial owners of shares of the
Common Stock.
In connection with the Meeting, the Company has retained D. F. King & Co.
("D.F. King") 77 Water Street, Twentieth Floor, New York, New York 10005, to
assist the Company in the distribution and
<PAGE> 5
solicitation of proxies. D.F. King's services may include the delivery of proxy
materials to brokers, nominees, fiduciaries and other custodians of the Common
Stock for distribution to the beneficial owners of such Common Stock, as well as
the solicitation of proxies from such beneficial owners. The Company has agreed
to pay D.F. King a solicitation fee of $7,500 plus $3.00 per telephone contact
and to reimburse D.F. King for all reasonable out-of-pocket expenses incurred by
it in connection with its activities on behalf of the Company.
The Annual Report of the Company for the year ended December 31, 1995,
including financial statements (the "Annual Report"), is being mailed prior to
or concurrently with this Proxy Statement to all holders of record of Voting
Stock as of March 27, 1996 (the "Record Date"), except for accounts where the
holder has filed a written request to eliminate duplicate reports. In addition,
the Company has provided brokers, dealers, banks, voting trustees and their
nominees, at Company expense, with additional copies of the Annual Report so
that such record holders could supply such material to beneficial owners as of
the Record Date.
OUTSTANDING SHARES AND VOTING RIGHTS
The Common Stock and the Employee Preferred Stock, which are together
referred to as the Voting Stock, are the only two classes of the Company's
securities with general voting rights, with each share of Voting Stock entitled
to vote on each matter properly coming before the Meeting. The Common Stock and
Employee Preferred Stock have separate voting rights with respect to the
election of directors. As of the Record Date, the Company had a total of
36,942,720 shares of Common Stock issued and outstanding and 6,425,118 shares of
Employee Preferred Stock issued and outstanding. Only holders of record as of
the close of business on the Record Date will be entitled to vote at the
Meeting. As of the Record Date, there were 11,410 holders of record of Common
Stock and five (5) holders of record of Employee Preferred Stock.
Pursuant to the terms of trusts established for the benefit of TWA
employees represented by the Air Line Pilots Association, International
("ALPA"), the International Association of Machinists and Aerospace Workers (the
"IAM"), the Independent Federation of Flight Attendants ("IFFA"), as well as
employees of the Company not represented by labor unions, the participants of
such trusts, as beneficial holders of the Voting Stock, do not have the right to
direct the manner in which such shares are voted by the trustees of each trust
with respect to any of the agenda items for the Meeting. Such trusts are the TWA
Air Line Pilots Supplemental Stock Plan (the "ALPA Trust"), the TWA Air Line
Pilots 1995 Employee Stock Ownership Plan (the "ALPA ESOP Trust"), the IAM Trans
World Airlines Employees' Stock Ownership Plan (the "IAM Trust"), the IFFA Trans
World Airlines Employees' Stock Ownership Plan (the "IFFA Trust"), and the Trans
World Airlines, Inc. Employee Stock Ownership Plan (the "Other Employee Trust").
Accordingly, only the trustees of such trusts will receive proxy cards. Although
each beneficial holder of the Voting Stock held by such trusts will receive a
copy of this Proxy Statement and an Annual Report pursuant to rules promulgated
by the SEC, none of such beneficial holders will receive a proxy card since the
trustees, as the record holders, will cast the votes for such shares.
The Employee Preferred Stock is comprised of three series; the ALPA
Preferred Stock, the IAM Preferred Stock and the IFFA Preferred Stock. The
holders of ALPA Preferred Stock are entitled to elect one (1) director to the
Board of Directors of the Company (the "Board of Directors" or the "Board"), the
holders of IAM Preferred Stock are entitled to elect two (2) directors, and the
holders of IFFA Preferred Stock are entitled to elect one (1) director. At the
Company's 1995 annual meeting of stockholders, holders of each series of
Employee Preferred Stock each elected one (1) Class II director for terms
expiring in 1998. Therefore, holders of ALPA Preferred Stock and IFFA Preferred
Stock will not be entitled to vote for the election of any directors at the
Meeting, the holders of the IAM Preferred Stock will be entitled to elect one
(1) Class III director (the "IAM Director"), and the holders of Common Stock
will be entitled to elect the remaining four (4) members of Class III.
Holders of a majority of the outstanding shares of the IAM Preferred Stock,
if present in person or represented by proxy, will constitute a quorum at the
Meeting for the purpose of electing the IAM Director. Likewise, holders of a
majority of the outstanding shares of the Common Stock, if present in person or
represented by proxy, will constitute a quorum at the Meeting for the purpose of
electing the four (4)
2
<PAGE> 6
Class III directors other than the IAM Director. Holders of a majority of the
outstanding shares of Voting Stock, if present in person or represented by
proxy, will constitute a quorum at the Meeting for the purpose of transacting
all other business to be conducted at the Meeting except that the holders of at
least eighty percent (80%) of the outstanding shares of Voting Stock, if present
in person or represented by proxy, will be required to constitute a quorum at
the Meeting for the purpose of amending Article Ninth of the Company's Second
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation"). Abstentions and broker non-votes are counted for the purposes
of determining the presence or absence of a quorum for the transaction of
business. For all other matters other than the right to elect directors, shares
of Employee Preferred Stock are equivalent to shares of Common Stock for voting
purposes. Therefore, the total vote required to approve any matter other than
the election of directors will be the required percentage of Voting Stock.
The IAM Director will be elected by a plurality of the votes of the shares
of the IAM Preferred Stock present in person or represented by proxy and casting
votes, while the remaining four (4) Class III Directors will be elected by a
plurality of the votes of the shares of Common Stock present in person or
represented by proxy and casting votes for the position on the Board which that
nominee represents. Accordingly, abstentions and broker non-votes will have no
effect on the outcome of the election of directors. The amendment and
restatement of the Certificate of Incorporation proposed as Agenda Item Two must
be approved by the affirmative vote of the holders of a majority of the
outstanding shares of Voting Stock entitled to vote thereon present or
represented by proxy at the Meeting and casting votes, whereas the amendment to
Article Ninth of the Certificate of Incorporation proposed as Agenda Item Three
must be approved by the affirmative vote of the holders of at least eighty
percent (80%) of the holders of Voting Stock entitled to vote thereon present or
represented by proxy at the Meeting and casting votes. For such purpose,
abstentions are not counted as shares voting and have no effect. Broker
non-votes are not counted as shares eligible to vote and also have no effect.
The ratification of auditors must be approved by the affirmative vote of the
holders of a majority of the outstanding shares of Voting Stock entitled to vote
thereon present or represented by proxy at the Meeting and casting votes.
Abstentions and broker non-votes will have no effect on ratification of the
selection of auditors.
The Certificate of Incorporation does not contemplate cumulative voting.
Accordingly, holders of a majority of the shares of Common Stock voting in an
election of directors can, if they choose to do so, elect one hundred percent
(100%) of that portion of the class of directors with respect to which such
shares are entitled to vote while holders of the IAM Preferred Stock have the
sole right to elect the IAM Director.
The IAM Trust and the IFFA Trust. Pursuant to the terms of each of the IAM
Trust and the IFFA Trust, for matters calling for the approval of the holders of
the Voting Stock, a plan trustee committee for each trust will instruct Fleet
National Bank, N.A., as trustee for the IAM Trust, and the Plan Trustee
Committee of the Independent Federation of Flight Attendants, as trustee for the
IFFA trust, respectively, on how to vote the Voting Stock held in the applicable
trust. For this purpose, a plan trustee committee may, but is not obligated to,
instruct the plan trustee to vote such Voting Stock in a given manner or to
solicit proxies from each participant or beneficiary designating the manner in
which the shares of Voting Stock allocated to his or her stock account shall be
voted. The plan trustee committee[s] for [each of the IAM Trust and] the IFFA
Trust [have] informed the Company [that they] have elected to instruct the
[respective] plan trustee to vote the Voting Stock.
The plan trustee committee for the IAM Trust is composed of one or more
individuals selected by the IAM. The current members of such committee are
William O'Driscoll and Gary Poos. The plan trust committee for the IFFA Trust is
composed of one or more members selected by IFFA. The current members of such
committee are William M. Hoffman, Barry Schimmel, Sherry Cooper, Rocky Miller,
and Philip Becker.
The ALPA Trust. Under the ALPA Trust, Don R. Jacobs, William F. Kessler
and Scott Schwartz, as co-trustees of the ALPA Trust, have the power to
determine, in their sole and absolute discretion, how to vote the Voting Stock
held in (or entitled to be received by) such trust. The trustees' decision on
the manner of voting the stock held by such trust shall be final and binding on
all employees, pilot retirees, beneficiaries, and any parties covered by such
trust.
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<PAGE> 7
The ALPA ESOP Trust. Pursuant to the terms of the ALPA ESOP Trust, for
matters calling for the approval of the holders of the Voting Stock, a plan ESOP
committee will instruct American Stock Transfer & Trust Co., as trustee for the
ALPA ESOP Trust, on how to vote the Voting Stock held in the trust. For this
purpose, the plan ESOP committee may, but is not obligated to, instruct the plan
trustee to vote such Voting Stock in a given manner or to solicit proxies from
each participant or beneficiary designating the manner in which the shares of
Voting Stock allocated to his or her stock account shall be voted. The plan ESOP
committee has informed the Company that they have elected to instruct the plan
trustee to vote the Voting Stock.
The ESOP committee for the ALPA ESOP Trust is composed of three or more
individuals selected by ALPA. The current members of such committee are Captain
David F. LaRocque, Captain H. O. Van Zandt and William F. Kessler.
The Other Employee Trust. The voting rights of all shares of Voting Stock
held in the Other Employee Trust are exercisable by Boston Safe Deposit and
Trust Company as trustee for such trust in accordance with the provisions of the
plan for such trust. Under the Other Employee Trust, the trustee upon direction
of a designated committee has the power to vote shares of Voting Stock held in
the trust and exercise any other rights or privileges associated with such
Voting Stock in accordance with the terms of the plan for such trust. Such
committee may authorize the trustee to exercise any power without specific
directions or other instructions from such committee with respect to which
direction from such committee is called for in the Other Employee Trust
Agreement. Such committee is composed of Richard P. Magurno, Senior Vice
President and General Counsel of the Company, Robert A. Peiser, Executive Vice
President -- Finance and Chief Financial Officer of the Company, and Charles J.
Thibaudeau, Senior Vice President -- Employee Relations of the Company.
AGENDA ITEM ONE
ELECTION OF CLASS III DIRECTORS
DIRECTORS AND EXECUTIVE OFFICERS
INFORMATION REGARDING DIRECTORS
The number of directors on the Board of Directors currently has been fixed
at fifteen (15). Directors serve until that annual meeting of stockholders at
which their term of office expires. In the case of a vacancy, the Board of
Directors may elect another director as a replacement or leave the vacancy
unfilled. Decisions regarding the election of new directors for the Meeting are
governed by Article Ninth of the Certificate of Incorporation, which provides
that in connection with the first three (3) annual elections of directors
following November 3, 1993, the Board will, at least seventy-five (75) calendar
days prior to the date of the relevant election, request the continuing
directors who were nominated by the same Original Nominating Entity (as defined
in the Certificate of Incorporation) as the director whose term is then expiring
to nominate a person to succeed the retiring Director. If no such directors
remain, the Board will, at least seventy-five (75) calendar days prior to the
date of the relevant election, request nomination of a person from such Original
Nominating Entity. Such nomination shall be accompanied by the signed consent of
the nominee to serve as director of the Company if elected and information about
the nominee as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC had the nominee been nominated, or
intended to be nominated, by the Board. Not more than five (5) business days
after receipt of the nomination, the Board of Directors will advise the
nominating directors or the Original Nominating Entity, as the case may be, if
the nominee is not acceptable. If such notice of unacceptability is given, the
directors or entity making the nomination will provide an additional nominee or
nominees. A notice of unacceptability may be given by the Board of Directors
only after obtaining an opinion of outside counsel stating that the acceptance
of the relevant nominee would be a breach of fiduciary duty of the Board to the
stockholders of the company. If no notice of unacceptability is given, the
nominee shall be deemed to be acceptable to the Board of Directors to fill the
position of the vacating director. If a notice of unacceptability is given, the
Original Nominating Entity
4
<PAGE> 8
or directors, as the case may be, and the Board of Directors will, in good
faith, repeat the foregoing procedures until an acceptable nominee is found.
Vacancies on the Board of Directors created by resignation, removal or
otherwise and occurring prior to the third annual election of directors and as
to directors elected at such annual election shall be filled by a nominee of the
remaining directors who were nominated by the same Original Nominating Entity as
the vacating director. If no such directors remain, the Board of Directors will
request nomination of a person for the vacant directorship from the Original
Nominating Entity which nominated the vacating director. Promptly upon receipt
of such name, the Board will advise the nominating directors or entity, as the
case may be, if the nominee is not acceptable. If such notice of unacceptability
is given, the directors or entity making the nomination will provide an
additional nominee or nominees. A notice of unacceptability may be given by the
Board of Directors only after obtaining an opinion of outside counsel stating
the acceptance of the relevant nominee would be a breach of fiduciary duty of
the Board of Directors to the stockholders of the Company. If no notice of
unacceptability is given, the nominee shall fill the position of the vacating
director. If a notice of unacceptability is given, the Original Nominating
Entity or directors, as the case may be, and the Board of Directors will, in
good faith, repeat the foregoing procedures until an acceptable nominee is
found.
For annual meetings to be held after the Meeting, nominations by
stockholders may be made in accordance with the Amended and Restated By-laws of
the Company (the "By-laws"), which require advance notice be given to the
Company and require that certain information be furnished for stockholder
nominations for directors.
Proxies received from holders of Common Stock and the IAM Preferred Stock
will be voted for the election of the applicable nominees named below as Class
III directors for a term expiring at the 1999 Annual Meeting of Stockholders,
unless authority to do so is withheld. In the event any nominee is unable or
declines to serve as a director at the time of the Meeting, the persons named as
proxies therein will have discretionary authority to vote the proxies for the
election of such person or persons as may be nominated in substitution therefor
by the applicable management of the Company and the IAM. Management knows of no
current circumstances which would render any nominee named herein unable to
accept nomination or election. The only seats on the Board of Directors for
which elections will be held this year are the five (5) Class III directorships.
Biographical information furnished to the Company by each director is set
forth below:
NOMINEES FOR REELECTION AS CLASS III DIRECTORS
Thomas H. Jacobsen, age 56, has been a director of TWA since March 21,
1995. He has been President, Chief Executive Officer and Chairman of the Board
of Mercantile Bancorporation Inc. since 1989. Mr. Jacobsen has been a director
of the Student Loan Marketing Association since November 1987 and a director of
Union Electric Company since April 1990. Mr. Jacobsen was Vice Chairman and
director of Barnett Banks, Inc. from 1984 to 1989.
James A. Lawrence, age 43, has been a director of TWA since November 3,
1993. He has been Chief Operating Officer, Pepsi-Cola Asia/Middle East/Africa
since May 1995. He was President, Pepsi-Cola Asia/ Middle East/Africa from
January 1994 to May 1995. He was Executive Vice President, Pepsi-Cola
International from October 1992 to January 1994. Mr. Lawrence was Chairman of
LEK Consulting from April 1983 to October 1992. Mr. Lawrence has been a director
of Transtechnology Corporation since December 1992, and a director of American
ReInsurance Corporation since January 1994.
Thomas F. Meagher, age 65, has been Chairman of the Board of TWA since
November 14, 1995 and a director of TWA since November 3, 1993. Mr. Meagher has
served as Chairman of the Board and Chief Executive Officer of Howell Tractor &
Equipment Co. since 1980, a director of UNR Industries since 1989, and a
director of Greyhound Lines, Inc. from 1991 to 1994. Mr. Meagher was Chairman
of Continental Air Transport from 1983 until July 1, 1995, and was Chief
Executive Officer of Continental Air Transport from 1983 to 1993. He is a
retired director of Lakeside Bank of Chicago and is a former Chairman of the
Airport Ground Transportation Association.
5
<PAGE> 9
G. Joseph Reddington, age 54, has been a director of TWA since November 3,
1993. He has been Chairman and Chief Executive Officer of The Signature Group
since April 1994. Mr. Reddington has been a director of Loblaw Companies Ltd.
since August 1994. Mr. Reddington was a director of Sears Canada, Inc. from
January 1985 to February 1994. He was President and Chief Executive Officer of
Sears Canada from 1989 to December 1993, and Chief Administrative Officer of
Sears Merchandising Group from December 1988 to December 1989.
William W. Winpisinger, age 71, has been a director of TWA since January
14, 1994. He was International President of the IAM from July 1977 to June 1989,
Resident (Headquarters) Vice President of IAM from February 1972 to June 1977,
Vice President for Transportation membership of the IAM from August 1967 to
January 1972, and Vice President of the AFL-CIO from October 1977 to October
1989.
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF COMMON STOCK VOTE "FOR"
THE REELECTION OF MESSRS. JACOBSEN, LAWRENCE, MEAGHER AND REDDINGTON AND THAT
HOLDERS OF IAM PREFERRED STOCK VOTE "FOR" THE REELECTION OF MR. WINPISINGER AS
CLASS III DIRECTORS.
CONTINUING DIRECTORS
John W. Bachmann, age 57, has been a director of TWA since April 1, 1996.
Mr. Bachmann has been Managing Principal of Edward Jones since January 1980. Mr.
Bachmann serves as Chairman of the St. Louis Regional Commerce and Growth
Association/Civic Progress panel studying airport expansion and modernization in
St. Louis. Mr. Bachmann has served as a member of the U.S. Steering Committee
for the Group of 30 since November 1989. He served as a member of the Board of
Governors of the Chicago Stock Exchange from May 1989 to May 1995. Mr. Bachmann
served as a member of the Regional Firms Advisory Board of the New York Stock
Exchange from March 1991 to March 1993. He also served as Chairman of the
Securities Industry Association from December 1987 until December 1989. Mr.
Bachmann's term of office as a director expires with the Annual Meeting of
Stockholders in 1997.
William F. Compton, age 48, has been a director of TWA since November 3,
1993. A pilot for TWA since September 13, 1968, Mr. Compton was an Executive
Board Member of ALPA from September 1991 to September 11, 1995, Coordinator for
the Company's Productivity Task Force until September 6, 1995, a member of the
TWA Labor Advisory Committee from August 1992 until September 1995 and Master
Chairman of the TWA Master Executive Council ("MEC") from September 1991 to
September 11, 1995. He was Chairman of the TWA MEC Negotiating Committee from
March 1988 to September 1991, a member of the ALPA National Collective
Bargaining Committee from June 1988 to June 1990, and a member of the TWA MEC
Negotiating Committee from June 1986 to March 1988. Mr. Compton's term of office
as a director expires with the Annual Meeting of Stockholders in 1998.
Eugene P. Conese, age 66, has been a director of TWA since November 3,
1993. Mr. Conese has been Chairman of the Board and Chief Executive Officer of
Greenwich Air Services, Inc. ("GAS") since October 1987, and Chairman of the
Board and President of World Air Lease, Inc. since July 1989. He was founder of
The Greenwich Company Ltd. ("GCL") and served as Chairman of the Board and Chief
Executive Officer from August 1980 until December 30, 1995, when GCL was merged
with and into GAS. He also served as Chief Executive Officer and director of
Irvin Industries, Inc. ("II") from October 1975 to October 1979, and President
and member of the Board of Directors of II from September 1970 to September
1975. Mr. Conese's term of office as a director expires with the Annual Meeting
of Stockholders in 1997.
Jeffrey H. Erickson, age 51, has been a director and the President of TWA
since April 5, 1994, Chief Executive Officer of TWA since August 9, 1994, and
was Chief Operating Officer of TWA from April 5, 1994, to August 9, 1994. Mr.
Erickson has been a director of Boatmen's National Bank of St. Louis since
February 1996. Mr. Erickson was President and Chief Executive Officer of Reno
Airlines from 1991 to 1994, President and Chief Operating Officer of Midway
Airlines from 1987 to 1990, Executive Vice President -- Operations of Midway
Airlines from 1986 to 1987, Senior Vice President -- Operations of Aloha
Airlines from 1984 to 1986, Senior Director -- Field Maintenance of Continental
Airlines from 1981 to 1984, and Director of Engineering of Continental Airlines
from 1978 to 1980. Mr. Erickson's term of office as a director expires with
6
<PAGE> 10
the Annual Meeting of Stockholders in 1997. Mr. Erickson serves as an officer of
the Company at the pleasure of the Board of Directors.
Gerald L. Gitner, age 51, has been a director of TWA since November 3,
1993. He has been Chairman of Avalon Group, Ltd. since April 1992, and
Co-Chairman of Global Aircraft Leasing Ltd. since 1990. Mr. Gitner was Vice
Chairman of Tribeca Corporation from February 1991 to December 1991, Chairman of
Tribeca Corporation from December 1991 to March 1992, and President and Chief
Executive Officer, ATASCO USA Inc. from September 1986 to December 1989. Mr.
Gitner was President of Texas Air Corp. from 1985 to 1986, Chairman and Chief
Executive Officer of Pan Am World Services from 1983 to 1985 and Vice Chairman
of Pan Am World Airways Inc. from 1983 to 1985. He was a founder of People
Express Airlines, Inc. and served as its President from 1980 to 1982. Mr. Gitner
has been a trustee of Boston University since 1984. Mr. Gitner's term of office
as a director expires with the Annual Meeting of Stockholders in 1998.
William M. Hoffman, age 48, has been a director of TWA since January 23,
1996. He has been a flight attendant for TWA since March 1970. Mr. Hoffman
became Vice President of IFFA during 1990 and served through September 1995. He
served as a member of the IFFA Executive Board from October 1980 through
September 1995 and became Secretary and Treasurer of IFFA in 1983 and served
through 1990. Mr. Hoffman's term of office as a director expires with the Annual
Meeting of Stockholders in 1998.
Myron Kaplan, age 50 [51 ON 4/17], has been a director of TWA since
November 3, 1993. He has been a partner in the law firm of Kleinberg, Kaplan,
Wolff & Cohen, P.C. since 1972. Mr. Kaplan's term of office as a director
expires with the Annual Meeting of Stockholders in 1998.
Jewel Lafontant-Mankarious, age 73, has been a director of TWA since
October 4, 1994. Ms. Lafontant-Mankarious is a partner in the Chicago law firm
of Holleb & Coff and concentrates her practice in the areas of corporate law,
labor and employment law, and governmental and international relations. She has
been a partner at Holleb & Coff since March 1993. She was Ambassador at
Large -- U.S. Coordinator for Refugee Affairs in the United States State
Department from April 1989 to February 1993, Deputy Solicitor General of the
United States from 1973 to 1975, and the United States Representative to the
United Nations from 1972 to 1973. Ms. Lafontant-Mankarious has also been a
member of the President's Council on Minority Business Enterprise and Vice
Chairman of the U.S. Advisory Commission on International, Educational and
Cultural Affairs. She is a director of MAFCO, Inc. and has served on over 17
major corporate boards over the past 20 years, including Mobil Oil Corporation,
Trans World Airlines, Inc. from July 1975 to September 1985 and The Equitable
Life Assurance Society of the United States. Ms. Lafontant-Mankarious is also a
director of Project HOPE. Ms. Lafontant-Mankarious' term of office as a director
expires with the Annual Meeting of Stockholders in 1997.
William O'Driscoll, age 67, has been a director of TWA since November 3,
1993. Mr. O'Driscoll has been President and Directing General Chairman of IAM
District Lodge 142 since August 1990. Mr. O'Driscoll's term of office as a
director expires with the Annual Meeting of Stockholders in 1998.
Lawrence K. Roos, age 78, has been a director of TWA since November 3,
1993. Mr. Roos has been a director of Laclede Steel Co. since 1984, an advisory
director of Boatmen's Trust Co. since 1983, and is a former President of the
Federal Reserve Bank of St. Louis, and a former St. Louis County executive. Mr.
Roos's term of office as a director expires with the Annual Meeting of
Stockholders in 1997.
EXECUTIVE OFFICERS IN ADDITION TO JEFFREY H. ERICKSON
Mark J. Coleman, age 49, has been the Senior Vice President -- Marketing of
TWA since July 14, 1994. He was Vice President and General Manager of Avis
WisCom International, Ltd. from September 1992 to July 1994, and Senior Vice
President -- Marketing of America West Airlines from December 1981 through
September 1992. Mr. Coleman serves as an officer of the Company at the pleasure
of the Board of Directors.
Richard P. Magurno, age 52, has been Senior Vice President and General
Counsel of TWA since May 2, 1994. Mr. Magurno was a partner at Lord Day & Lord,
Barrett Smith law firm, New York, New York from 1989 until May 1994. From 1970
to 1988, Mr. Magurno served in various legal capacities at Eastern Air Lines,
7
<PAGE> 11
Inc., including Senior Vice President -- Legal Affairs. Mr. Magurno serves as an
officer of the Company at the pleasure of the Board of Directors.
Don Monteath, age 54, has been Senior Vice President -- Operations of TWA
since February 27, 1995. Mr. Monteath served as Senior Vice
President -- Operations for Polar Air Cargo from July 1994 to February 1995.
From January 1981 through February 1994, Mr. Monteath was Senior Vice
President -- Operations for America West Airlines. From 1965 to 1981 Mr.
Monteath held various positions with Continental Airlines. Mr. Monteath serves
as an officer of the Company at the pleasure of the Board of Directors.
Robert A. Peiser, age 47 [48 ON 4/17], has been Executive Vice
President -- Finance and Chief Financial Officer of TWA since August 9, 1994.
Mr. Peiser has been a director of Phar-Mor, Inc. since September 1995. He was
with the management consultant firm of Bahadur, Balan & Kazerski, Ltd. from
November 1992 to August 1994, and held various management positions including
President and Chief Executive Officer with Orange-Co., Inc. from December 1989
to November 1992. Mr. Peiser was Senior Vice President and Chief Financial
Officer of Borman's, Inc. from January 1988 to September 1989, and Senior Vice
President and Chief Financial Officer of ALC Communications, Inc. from July 1986
to January 1988. Mr. Peiser previously served in various management capacities
at TWA from July 1972 to June 1977 and from January 1982 to April 1986,
including Senior Vice President and Chief Financial Officer. Mr. Peiser serves
as an officer of the Company at the pleasure of the Board of Directors.
Charles J. Thibaudeau, age 49, has been Senior Vice President -- Employee
Relations of TWA since January 1993. He was also Vice President -- Employee
Relations of TWA from February 1990 to January 1993 and Staff Vice President --
Employee Relations of TWA from September 1985 to February 1990. Mr. Thibaudeau
serves as an officer of the Company at the pleasure of the Board of Directors.
DIRECTORS' FEES AND COMPENSATION
The Board of Directors may establish the compensation for, and
reimbursement of the expenses of, directors for membership on the Board of
Directors and on committees of the Board of Directors, attendance at meetings of
the Board of Directors or committees of the Board of Directors, and for other
services rendered by directors to the Company or any of its majority-owned
subsidiaries.
Directors of TWA during 1995 who were not also regularly salaried employees
or active union representatives of TWA ("Outside Directors") were entitled to
receive an annual retainer of $20,000, payable quarterly in arrears, prorated
from the later of January 1, 1995, or the date of election. In addition,
committee chairpersons were entitled to receive an annual retainer of $1,500,
prorated from the date of the committee chairperson's appointment. Board members
were also entitled to receive fees of $1,000 for each meeting of the Board
attended, whether in person or by telephone conference call, along with fees of
$500 for attending committee meetings held in conjunction with a Board meeting
and $1,000 for committee meetings not held in conjunction with a Board meeting.
Regularly salaried executive officers of TWA or active union representatives of
TWA who are also Board members did not receive any supplemental compensation for
their services as directors. All directors are reimbursed for expenses incurred
in attending Board and committee meetings.
Directors of TWA, their spouses and eligible dependent children receive
unlimited positive space pass privileges on TWA, with tax reimbursement related
to income imputed from pass usage to be paid in an amount not to exceed $10,000
per year. Imputed income together with cash payments to such directors
aggregated approximately $32,100 for 1995.
The stockholders of TWA approved the Company's 1995 Outside Directors'
Stock Ownership and Stock Option Plan (the "Outside Directors' Plan") at the
Company's 1995 Annual Meeting of Stockholders. The Outside Directors' Plan,
subject to any trading restrictions imposed by applicable securities laws,
requires Outside Directors to purchase one thousand (1,000) shares of Common
Stock (the "Required Shares") upon the date on which an individual elected as an
Outside Director is nominated for election. Outside Directors whose term of
service on the board began before the 1995 Annual Meeting of Stockholders are
additionally entitled to purchase two thousand (2,000) shares of Common Stock
(the "Permissive Shares") pursuant to the Outside Directors' Plan, with no
requirement that such Outside Director continue to hold such shares. The
8
<PAGE> 12
purchase price for both Required Shares and Permissive Shares is (x) $4.1875,
the subscription price of the Company's September 1995 equity rights offering,
if the Outside Director's current term of service on the Board began at or
before the Company's 1995 Annual Meeting of Stockholders and (y) the Fair Market
Value (as defined in the Outside Directors' Plan) of the Common Stock on the
date of purchase for all other Outside Directors. Pursuant to the Directors'
Plan, each Outside Director is permitted to make annual elections, with respect
to some or all of the retainer amounts payable to him or her in consideration
for his or her service on the Board, to (i) receive such retainer in shares of
Common Stock instead of cash; (ii) defer retainer amounts and participate in a
"phantom stock" program; (iii) receive some combination of cash and Common Stock
for all of his or her retainer; or (iv) receive some combination of cash and
Common Stock for some portion of his or her retainer and to defer the remainder.
Outside Directors electing to receive shares of Common Stock in lieu of some or
all of the cash retainer payment to which he or she would otherwise be entitled
would receive a number of shares of Common Stock calculated by dividing the
percentage of his or her retainer such Outside Director elected to receive in
shares of Common Stock times the Outside Director's retainer fee by the Fair
Market Value of the Common Stock on the date such retainer became payable.
Outside Directors electing to defer some or all of the retainer to which he or
she was entitled would be credited, through a "Deferred Retainer Account," with
a number of shares of Common Stock calculated by dividing the percentage of his
or her retainer such Outside Director elected to defer times their retainer by
(x) $4.1875 for retainer amounts payable for 1996 to Outside Directors whose
term of service began at or before the Company's 1995 Annual Meeting of
Stockholders; and (y) the Fair Market Value of the Common Stock on the date on
which the retainer became payable for all other Outside Directors. Upon the
earlier to occur of (i) December 31, 2000, and (ii) the last date of a
participating Outside Director's service on the Board, each participating
Outside Director would be entitled to a payment consisting of cash, Common
Stock, or a combination of the two.
MEETINGS AND COMMITTEES OF THE BOARD
During 1995, the Board of Directors held twelve (12) regular meetings and
five (5) special meetings. All incumbent directors attended at least
seventy-five percent (75%) of the total number of meetings of the Board of
Directors and any committee of the Board of Directors on which they served.
GOVERNANCE OF THE COMPANY
In accordance with applicable Delaware state law, the business of the
Company is managed under the direction of the Board of Directors.
There are currently six standing committees of the Board of Directors.
Under the By-laws and pursuant to the Board's determination, a majority of
members of the Audit, Executive, Compensation and Finance Committee are required
to be Outside Directors. The Board has also determined that union representative
directors shall serve one year terms and rotate from the Compensation to
Executive to Finance Committees. Committee Chairpersons shall serve a minimum of
one year and a maximum of three year terms. Outside Directors serve a minimum of
one year and a maximum of a four year term on any Committee and rotate on a
staggered basis to other Committees. Current committee memberships, the number
of committee meetings held during 1995 and the functions of those committees are
described below.
Executive Committee. The current members of the Executive Committee are
Thomas F. Meagher (chairman), Jeffrey H. Erickson, Gerald L. Gitner, Thomas H.
Jacobsen, Myron Kaplan, William O'Driscoll and G. Joseph Reddington. Such
Executive Committee has and may exercise the powers of the Board of Directors
granted to it by the Board of Directors from time to time, except the power to:
amend the By-laws or the Certificate of Incorporation (except, to the extent
authorized by a resolution of the Whole Board (i.e., the total number of
directors that the Company would have if there were no vacancies on the Board of
Directors), to fix the designation, preferences and other terms of any series of
preferred stock), adopt an agreement of merger or consolidation, authorize the
issuance of stock, declare a dividend or recommend to the stockholders the sale,
lease or exchange of all or substantially all of the Company's property and
assets, a dissolution of the Company, or a revocation of a dissolution, and
except as otherwise provided by the Delaware General
9
<PAGE> 13
Corporation Law. The By-laws had contained certain restrictions concerning the
composition of the Executive Committee and the procedure relative to calling a
meeting of the Executive Committee. The Board voted unanimously on April 18,
1995, to remove these restrictions and amended the By-laws accordingly. During
1995, the Executive Committee met six (6) times.
Audit Committee. The current members of the Audit Committee are Thomas H.
Jacobsen (chairman), Eugene P. Conese, Jewel Lafontant-Mankarious, James A.
Lawrence, Thomas F. Meagher, Lawrence K. Roos and William W. Winpisinger. The
Audit Committee is responsible for (i) the oversight of the Company's internal
control structure, (ii) review of the internal audit department, (iii) selection
of the Company's public accountants, (iv) review of the fees of the Company's
outside public accountants, and (v) oversight of the Company's financial
reporting. During 1995, the Audit Committee met six (6) times.
Compensation Committee. The current members of the Compensation Committee
are Myron Kaplan (chairman), Eugene P. Conese, William M. Hoffman, Jewel
Lafontant-Mankarious, James A. Lawrence and G. Joseph Reddington. The
Compensation Committee reviews executive salaries, administers the bonus,
incentive, compensation and stock option plans of the Company and approves the
salaries and other benefits of the executive officers of the Company. During
1995, the Compensation Committee met three (3) times.
Finance Committee. The current members of the Finance Committee are Gerald
L. Gitner (chairman), William F. Compton, Jeffrey H. Erickson, Myron Kaplan, and
Thomas F. Meagher. The Finance Committee reviews, advises on, and reports to the
Board on, the Company's financial plans and policies and fund requirements,
current and projected capital requirements, short term investment policies,
borrowing and dividend policy, acquisition or disposition of aircraft, purchase
or disposition of non-aircraft assets, the opening of new stations, major route
changes and other similar such actions having financial implications for the
Company. During 1995, the Finance Committee met six (6) times.
Corporate Governance Committee. The current members of the Corporate
Governance Committee are G. Joseph Reddington (chairman), Jeffrey H. Erickson,
Myron Kaplan, Thomas H. Jacobsen, Thomas F. Meagher and William W. Winpisinger.
The Corporate Governance Committee will review Director performance on an annual
basis, search and make recommendations to fill Director vacancies (including
Chairman of the Board) and Chief Executive Officer. The Corporate Governance
Committee was established in March 1996.
Customer Service Committee. The current members of the Customer Service
Committee are Jewel Lafontant-Mankarious (chairperson), Gerald L. Gitner,
William O'Driscoll and Lawrence K. Roos. The Customer Service Committee reviews
the quality of and satisfaction with the Company's product. During 1995, the
Customer Service Committee met seven (7) times.
Compensation Committee Interlocks and Insider Participation. To the best
of TWA's knowledge, there was no instance in 1995 in which an executive officer
of TWA served as a director or member of a compensation committee of another
corporation in a situation where an executive officer of such other corporation
served as a director of TWA.
10
<PAGE> 14
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company for the
periods indicated to (a) the individual serving as the Company's Chief Executive
Officer during 1995 and (b) the four most highly compensated executive officers
(other than the Chief Executive Officer) who earned more than $100,000 during
1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION(1)
--------------------------- SECURITIES
INCENTIVE ALL OTHER UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY(2) COMPENSATION COMPENSATION OPTIONS/SARS
- --------------------------- ---- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Jeffrey H. Erickson................... 1995 $369,694 $250,000(3) $ 14(5) 715,239(6)
(President and Chief Executive 1994 270,398 75,000(4) 31,540(5) --(7)
Officer) 1993 -- -- -- --
Robert A. Peiser...................... 1995 $231,855 $250,000(3) $ 9(5) 357,534(6)
(Executive Vice President -- Finance 1994 91,110 25,000(4) -- --(7)
and Chief Financial Officer) 1993 -- -- --
Richard P. Magurno.................... 1995 $177,360 $250,000(3) $ -- 357,534(6)
(Senior Vice President and General 1994 118,263 -- 10,768(5) --(7)
Counsel) 1993 -- -- -- --
Don Monteath.......................... 1995 $158,378 $ 35,000(4) $ 12,953(5) 178,788(6)
(Senior Vice 1994 -- -- -- --
President -- Operations) 1993 -- -- -- --
Mark J. Coleman....................... 1995 $185,222 $ -- $ 9(5) 178,788(6)
(Senior Vice President -- Marketing) 1994 86,460 -- 4(5) --(7)
1993 -- -- -- --
<FN>
- ---------------
(1) All compensation rounded to whole dollars.
(2) The amounts shown do not include indirect compensation, the value of which
for each executive officer did not exceed the lesser of $50,000 or 10% of
the aggregate compensation for such officer. The amounts shown reflect
income imputed to free or reduced rate air transportation used by executive
officers and eligible members of their families during 1995 for purposes
other than TWA business, plus withholding payments made by TWA on their
behalf to approximate federal and local tax liability on such income. These
payments were made pursuant to a tax reimbursement program established in
1986 for the benefit of active executive officers as well as certain active
key employees.
(3) Represents payments to Messrs. Erickson, Peiser and Magurno pursuant to the
Restructuring Incentive Compensation Plan in connection with the completion
of the '95 Reorganization.
(4) Represents "signing" incentive payments for Messrs. Erickson, Peiser and
Monteath.
(5) Represents (a) moving expenses reimbursed by the Company for Mr. Erickson of
$31,540 and for Mr. Monteath of $12,836, (b) temporary living expenses for
Mr. Magurno of $10,768, and (c) premiums of group life insurance of $14 for
Mr. Erickson, $9 for Mr. Peiser, $117 for Mr. Monteath and $9 for Mr.
Coleman in 1995 and $4 for Mr. Coleman in 1994.
(6) Represents the grant of options to purchase shares of Common Stock under the
Company's 1994 Key Employee Stock Incentive Plan (the "KESIP").
(7) Along with certain other officers of the Company, Messrs. Erickson, Peiser,
Magurno and Coleman were granted 600,000, 200,000, 16,000 and 16,000 stock
appreciation rights ("SARs" or "Units"), respectively, which were
exercisable at times and under circumstances set forth in applicable
agreements. These Units were without value unless the current market price
of the Company's then outstanding common stock exceeded a base value equal
to the current market price at the time the Units were granted. As of
December 31, 1994, the value of these SARs for all such officers was $0. The
Units were terminated on August 23, 1995.
</TABLE>
11
<PAGE> 15
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED RATES
SECURITIES PERCENT OF OF STOCK PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION
OPTIONS GRANTED TO FOR OPTION TERM
GRANTED EMPLOYEES IN EXERCISE EXPIRATION ------------------------
NAME (#)(1) FISCAL YEAR PRICE DATE 5% 10%
- ---- ---------- ------------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey H. Erickson(2)(3)..... 715,239 31.60% $ 4.64 10/25/00 $2,843,093 $ 4,456,565
Robert A. Peiser(3)(4)........ 357,534 15.80% 4.64 10/25/00 1,421,207 2,227,750
Richard P. Magurno(3)(4)...... 357,534 15.80% 4.64 10/25/00 1,421,207 2,227,750
Don Monteath(5)............... 178,788 7.90% 4.64 10/25/00 710,682 1,114,010
Mark J. Coleman(5)............ 178,788 7.90% 4.64 10/25/00 710,682 1,114,010
<FN>
- ---------------
(1) All options granted under the KESIP. Options vest at a rate of 34% upon the
first anniversary of the award date, 33% upon the second anniversary of the
award date, and 33% upon the third anniversary of the award date.
(2) Represents options to purchase shares of Common Stock equal to an aggregate
of 1.667% of the aggregate outstanding Common Stock and Employee Preferred
Stock as of December 16, 1995, subject to certain adjustments.
(3) Represents options granted on December 16, 1994, subject to approval of the
KESIP by the Company's stockholders, and are therefore reported as 1995
grants. At the Company's 1995 Annual Meeting of Stockholders, the KESIP was
approved by the requisite vote of the Stockholders and the referenced
options were deemed to be granted retroactively.
(4) Represents options to purchase shares of Common Stock equal to an aggregate
of 0.8333% of the aggregate outstanding Common Stock and Employee Preferred
Stock as of December 16, 1995, subject to certain adjustments.
(5) Represents options granted on August 21, 1995 to purchase shares of Common
Stock equal to an aggregate of 0.4167% of the aggregate outstanding Common
Stock and Employee Preferred Stock as of December 16, 1995, subject to
certain adjustments.
</TABLE>
CERTAIN EMPLOYMENT AGREEMENTS
TWA is party to a Memorandum of Understanding (the "MOU") with Jeffrey H.
Erickson, dated April 13, 1994, whereby TWA employs Mr. Erickson as President
and Chief Executive Officer. The MOU provides for a base salary of $350,000 and
a signing incentive of $75,000. The MOU provides that in the event of Mr.
Erickson's involuntary termination without cause (as defined in the MOU) he
shall be paid his base salary, at the annualized rate in effect on the date of
termination for a period equal to 12 months following the date of such
termination. Mr. Erickson serves as an officer of the Company at the pleasure of
the Board of Directors.
A letter agreement dated August 30, 1994, was executed by TWA and Robert A.
Peiser. The letter agreement provided for Mr. Peiser to assume the positions of
Executive Vice President -- Finance and Chief Financial Officer, subject to
election by TWA's Board of Directors. Mr. Peiser was so elected. The letter
agreement provides for a base salary of $225,000 and a signing incentive of
$25,000. The term of Mr. Peiser's employment began on August 9, 1994, and is to
be for an indefinite period, subject to TWA's right of termination without cause
(as defined in the letter agreement), with 12 months' severance pay.
A letter agreement dated April 18, 1994, was executed by TWA and Richard P.
Magurno. The agreement provided for Mr. Magurno to assume the position of Senior
Vice President and General Counsel, subject to election by TWA's Board of
Directors. Mr. Magurno was so elected. The letter agreement provides for a base
salary of $175,000. Mr. Magurno serves as an officer of the Company at the
pleasure of the Board of Directors; provided, TWA must give 12 months' prior
written notice to terminate the agreement without cause.
12
<PAGE> 16
A letter agreement dated June 29, 1994, was executed by TWA and Mark J.
Coleman. The letter agreement provided for Mr. Coleman to assume the position of
Senior Vice President -- Marketing, subject to election by TWA's Board of
Directors. Mr. Coleman was so elected. The letter agreement provides for a base
salary of $175,000. The term of Mr. Coleman's employment began on July 14, 1994.
Mr. Coleman serves as an officer of the Company at the pleasure of the Board of
Directors; provided, TWA must give 12 months' prior written notice to terminate
the agreement without cause.
A letter agreement dated January 25, 1995 (amended March 9, 1995) was
executed by TWA and Don Monteath. The letter agreement provided for Mr. Monteath
to assume the position of Senior Vice President -- Operations, subject to
election by TWA's Board of Directors. Mr. Monteath was so elected. The letter
agreement provides for a base salary of $175,000 and a signing incentive of
$35,000. Mr. Monteath's employment began on February 27, 1995 and is to be for
an indefinite period, subject to TWA's right of termination without cause (as
defined in the letter agreement), with 6 months' severance pay. Mr. Monteath
serves as an officer of the Company at the pleasure of the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth, as of March 27, 1996, certain information
concerning ownership of each class of voting securities of the Company by: (i)
each person who is known by the Company to own beneficially more than 5% of the
voting securities of the Company, (ii) each current director individually, (iii)
the chief executive officer and the five other senior executive officers and
(iv) all current directors and executive officers of the Company as a group. The
determinations of "beneficial ownership" of voting securities are based upon
Rule 13d-3 under the Exchange Act of 1934, as amended. Such rule provides that
the securities will be deemed "beneficially owned" where a person has, either
solely or in conjunction with others, the power to vote or to direct the voting
of securities and/or the power to dispose, or to direct the disposition of, the
securities or where a person has the right to acquire any such power within 60
days after the date such "beneficial ownership" is determined. Except as
described below, each of the persons and groups listed below has sole voting and
investment power with respect to the securities shown.
13
<PAGE> 17
PRINCIPAL HOLDERS OF COMMON STOCK
<TABLE>
<CAPTION>
AMOUNT OF PERCENT OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OR IDENTITY OF GROUP OWNERSHIP(1) SHARES(1)
- --------------------------------------------------------- ------------ -----------
<S> <C> <C>
Pension Benefit Guaranty Corporation(2)(3)(4)....................... 4,166,667 11.28%
Fidelity Management and Research Company(5)......................... 4,577,788 12.4 %
Wellington Management Company(6).................................... 2,769,200 7.5 %
John W. Bachmann (7)................................................ 0 *
William F. Compton(8)............................................... 1,781 *
Eugene P. Conese(9)(10)(11)......................................... 7,825 *
Jeffrey H. Erickson(12)............................................. 247,100 *
Gerald L. Gitner(9)(10)............................................. 7,776 *
William M. Hoffman(13)(14).......................................... 39,622 *
Thomas H. Jacobsen(9)(10)........................................... 14,776 *
Myron Kaplan(9)(10)(15)............................................. 7,776 *
Jewel Lafontant-Mankarious (9)(16).................................. 3,000 *
James A. Lawrence (9)(10)........................................... 10,776 *
Thomas F. Meagher (9)(17)(18)....................................... 10,664 *
William O'Driscoll (19)............................................. 171,383 *
G. Joseph Reddington (9)(10)(17).................................... 8,276 *
Lawrence K. Roos(9)(10)(20)......................................... 7,776 *
William W. Winpisinger(9)(17)(21)................................... 5,388 *
Mark J. Coleman(22)................................................. 1,958 *
Richard P. Magurno(23)(24).......................................... 1,195,024 3.2 %
Don Monteath(22).................................................... 996 *
Robert A. Peiser(23)(24)............................................ 1,196,024 3.2 %
Charles J. Thibaudeau(22)(23)....................................... 1,073,462 2.9 %
Total Shares owned by Current Directors and Current Executive
Officers, as a group (19 individuals)(25)......................... 4,011,383 10.7 %
<FN>
- ---------------
* Less than 1%
(1) Includes securities issuable pursuant to options exercisable within 60
days.
(2) The address of the Pension Benefit Guaranty Corporation is 1200 K Street,
NW, Suite 210, Washington, DC 20005.
(3) A Schedule 13G has been filed by Pacholder Associates, Inc. to report
shared voting and dispositive power with respect to these shares. Pacholder
Associates, Inc.'s address is 8044 Montgomery Road, Suite 382, Cincinnati,
Ohio 45236.
(4) A Schedule 13D has been filed on behalf of Pichin Corp., Chelonian Corp.,
Unicorn Associates Corp., ACF Industries, Incorporated, ACF Industries
Holding Corp., Highcrest Investors Corp., Icahn Holding Corporation and
Carl C. Icahn to report shared voting and dispositive power with respect to
these shares. The address of each of these entities is 100 South Bedford
Road, Mount Kisco, New York 10549, with the exception of ACF, whose address
is 3301 Rider Trail South, Earth City, Missouri 63045, and Carl C. Icahn,
whose principal business address is c/o Icahn Associates Corp., 114 West
47th Street, New York, New York 10036.
(5) Schedules 13D have been filed on behalf of FMR Corp. ("FMR") and Fidelity
International Limited to report beneficial ownership, through Fidelity
Management & Research Company, of 3,258,522 shares, through Fidelity
Management Trust Company, of 1,280,766 shares; and ownership by Fidelity
International Limited, of 38,500 shares. FMR is the beneficial owner of
such shares.
</TABLE>
14
<PAGE> 18
(6) A Schedule 13G has been filed by Wellington Management Company to report
shared dispositive power with respect to all of these shares and shared
voting power in connection with 1,514,500 of such shares. The address of
Wellington Management Company is 75 State Street, Boston, Massachusetts
02109.
(7) Mr. Bachmann was appointed to the Board effective April 1, 1996.
(8) Includes approximately 849 shares attributable to Mr. Compton's beneficial
interest in the TWA Air Line Pilots Supplemental Stock Plan. Excludes
shares owned by his wife pursuant to her beneficial interest in the IFFA
Trust and other shares as to which she is the record holder. Mr. Compton
disclaims beneficial ownership of all shares held by his wife. Mr. Compton
is the record holder of 932 shares of Common Stock.
(9) Pursuant to the Outside Directors' Plan each Outside Director may elect to
defer some or all of his or her annual retainer by participating in a
Deferred Retainer Program (as defined in the Outside Directors' Plan)
beginning in 1996. Outside Directors are entitled to receive annual credits
to their Deferred Retainer Accounts equaling the percentage of his or her
retainer to be received in shares of Common Stock times the usual retainer
amount payable to such Outside Director, divided by (i) the $4.1875
Subscription Price of the Company's September 1995 equity rights offering
(the "Subscription Price") for Outside Directors whose term of service on
the Board began at or before the 1995 Annual Meeting of Stockholders, and
(ii) the Fair Market Value of the Common Stock on the date the retainer
becomes payable for Outside Directors whose term of service began after the
1995 Annual Meeting of Stockholders. Upon the earlier to occur of (i)
December 31, 2000 and (ii) the last date of a participating Outside
Director's service on the Board, such Outside Director is entitled to a
payment equal to (i) the total number of shares of Common Stock in the
Outside Director's Deferred Retainer Account, (ii) cash equaling the number
of shares of Common Stock contained in the Deferred Retainer Account times
the Fair Market Value of the Common Stock on the date the retainer becomes
payable or (iii) a combination of (i) and (ii).
(10) Messrs. Conese, Gitner, Jacobsen, Kaplan, Lawrence, Reddington and Roos
each elected to defer all 1996 retainer amounts payable to them in a
Deferred Retainer Account. Constitutes or includes 4,776 shares of Common
Stock issuable to such Outside Director pursuant to the Outside Directors'
Plan in the event of his termination from service on the Board within 60
days, assuming such director elects to receive the entire balance of his
Deferred Retainer Account in shares of Common Stock.
(11) Includes warrants to purchase 49 shares of Common Stock at a price of
$14.40 per share.
(12) Includes an estimated 243,182 shares of Common Stock issuable upon the
exercise of vested options granted to Mr. Erickson pursuant to the KESIP.
(13) The address of Mr. Hoffman is c/o Independent Federation of Flight
Attendants, 720 Olive Street, Suite 1700, St. Louis, Missouri 63101.
(14) Includes 39,310 shares held by Mr. Hoffman as a member of the Plan Trustee
Committee of IFFA, trustee of the IFFA Trust and warrants to purchase seven
(7) shares of Common Stock at a price of $14.40 per share. Also includes
approximately 16 shares held for Mr. Hoffman's benefit as a TWA employee in
the IFFA Trust. Except for the 16 shares described above, Mr. Hoffman
disclaims beneficial ownership of the shares held by the IFFA Trust. Mr.
Hoffman is also the beneficial owner of an undetermined amount of Common
Stock which has not yet been issued or allocated, which is to be
distributed to Mr. Hoffman as a TWA employee as a result of IFFA litigation
against TWA settled in the course of the Company's 1993 reorganization. Mr.
Hoffman is the record holder of 289 shares of Common Stock.
(15) These shares are held by Mr. Kaplan for the benefit of the firm of
Kleinberg, Kaplan, Wolff & Cohen, P.C., of which Mr. Kaplan is a member.
(16) Pursuant to the Outside Directors' Plan, each Outside Director was granted
the right to purchase up to 3,000 shares of Common Stock at the
Subscription Price. Includes 2,000 shares of Common Stock remaining
issuable upon exercise of this right.
15
<PAGE> 19
(17) Pursuant to the Outside Directors' Plan, each Outside Director was granted
the right to purchase up to 3,000 shares of Common Stock at the
Subscription Price. Includes 3,000 shares of Common Stock issuable upon
exercise of this right.
(18) Mr. Meagher elected to defer all 1996 retainer amounts payable to him in a
Deferred Retainer Account. Constitutes 7,164 shares of Common Stock
issuable to Mr. Meagher pursuant to the Outside Directors' Plan in the
event of his termination from service on the Board within 60 days, assuming
Mr. Meagher elects to receive the entire balance of his Deferred Retainer
Account in shares of Common Stock.
(19) These shares are held by Mr. O'Driscoll as a member of the IAM Plan Trust
Committee of the IAM Trust, along with Mr. Gary Poos. Mr. O'Driscoll
disclaims beneficial ownership of the shares held by the IAM Trust.
(20) Includes 3,000 shares held in the name of the Lawrence K. Roos Revocable
Trust.
(21) Mr. Winpisinger elected to defer 50% of 1996 retainer amounts payable to
him in a Deferred Retainer Account. Includes 2,388 shares of Common Stock
issuable to Mr. Winpisinger pursuant to the Outside Directors' Plan in the
event of his termination from service on the Board within 60 days, assuming
Mr. Winpisinger elects to receive the entire balance of his Deferred
Retainer Account in shares of Common Stock.
(22) Does not include unvested options to purchase shares of Common Stock
pursuant to the KESIP.
(23) Also includes approximately 1,958, 2,518 and 1,725 shares attributable to
the respective beneficial interests of Messrs. Magurno, Peiser and
Thibaudeau, in the shares held by the Other Employee Trust. Except for such
shares, Messrs. Magurno, Peiser and Thibaudeau disclaim beneficial
ownership of the shares held by the Other Employee Trust. Messrs. Magurno,
Peiser and Thibaudeau serve as members of the committee having the power to
direct the vote of the shares of Common Stock held in the Other Employee
Trust.
(24) Includes an estimated 121,562 shares of Common Stock issuable upon the
exercise of vested options granted to Messrs. Magurno and Peiser pursuant
to the KESIP.
(25) When combined with shares of Employee Preferred Stock beneficially held by
current directors and current executive officers, as a group, represents a
total of 8,714,736 shares of the Company's voting securities.
PRINCIPAL HOLDERS OF EMPLOYEE PREFERRED STOCK
<TABLE>
<CAPTION>
SERIES OF AMOUNT OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OR EMPLOYEE BENEFICIAL OUTSTANDING
IDENTITY OF GROUP PREFERRED STOCK OWNERSHIP SHARES OF SERIES
- ------------------------------------------- --------------------- --------- ----------------
<S> <C> <C> <C>
TWA Air Line Pilots
Supplemental Stock Plan,
William Kessler, Don R. Jacobs
and Scott Schwartz as trustees(1).......... ALPA Preferred Stock 1,147,843 66.66%(2)
TWA Air Line Pilots 1995 Employee
Stock Ownership Plan, American Stock
Transfer & Trust Company, Trustee(3)....... ALPA Preferred Stock 573,921 33.33%(4)
IAM Trust(5)............................... IAM Preferred Stock 3,821,473 100%(6)
IFFA Trust(7).............................. IFFA Preferred Stock 881,880 100%(8)
William M. Hoffman(9)...................... IFFA Preferred Stock 881,880 100%(10)
William O'Driscoll(11)..................... IAM Preferred Stock 3,821,473 100%(12)
<FN>
- ---------------
(1) The address of the ALPA Trust is c/o Don R. Jacobs, as co-trustee, TWA Air
Line Pilots Supplemental Stock Plan, 3221 McKelvey Road, Suite 200,
Bridgeton, Missouri 63044.
(2) Constitutes 2.65% of the securities entitled to vote on all agenda matters
at meetings of stockholders other than the election of directors.
</TABLE>
16
<PAGE> 20
(3) The address of the TWA Air Line Pilots 1995 Employee Stock Ownership Plan
is c/o American Stock Transfer & Trust Company, as trustee, 40 Wall Street,
46th Floor, New York, New York 10005.
(4) Constitutes 1.32% of the securities entitled to vote on all agenda items at
meetings of stockholders other than the election of directors.
(5) The address of the IAM Trust is c/o Fleet National Bank, N.A., as trustee,
One Federal Street, 31st Floor, Boston, Massachusetts 02211.
(6) When combined with the 171,383 shares of Common Stock held by the IAM
Trust, constitutes 9.21% of the securities entitled to vote on all agenda
matters at meetings of stockholders other than the election of directors.
(7) The address of the IFFA Trust is 720 Olive Street, Suite 1700, St. Louis,
Missouri 63101.
(8) When combined with the 39,310 shares of Common Stock held by the IFFA
Trust, constitutes 2.12% of the securities entitled to vote on all agenda
matters at meetings of stockholders other than the election of directors.
(9) The address of Mr. Hoffman is c/o Independent Federation of Flight
Attendants, 720 Olive Street, Suite 1700, St. Louis, Missouri 63101.
(10) Includes all shares of IFFA Preferred Stock held by the IFFA Trust,
including 288 shares of IFFA Preferred Stock held for Mr. Hoffman's benefit
as a TWA employee in the IFFA. Except as to the 288 shares of IFFA
Preferred Stock described above, Mr. Hoffman disclaims beneficial ownership
of the shares of IFFA Preferred Stock held by the IFFA Trust.
(11) The address of Mr. O'Driscoll is c/o Fleet National Bank, N.A., as trustee,
One Federal Street, 31st Floor, Boston, Massachusetts 02211.
(12) Includes all shares of IAM Preferred Stock held by the IAM Trust. Mr.
O'Driscoll disclaims beneficial ownership of the shares of IAM Preferred
Stock held by the IAM Trust.
COMPENSATION PURSUANT TO PENSION PLANS
Retirement Plans. The TWA Retirement Pension Plan ("TWA Retirement Plan")
applicable to United States salaried employees was non-contributory. The TWA
Retirement Plan was assumed by Pichin Corp. and "frozen" effective January 1,
1993 and, accordingly, participants thereunder will not accrue additional
retirement benefits after such date. Participation in such plan is closed to new
employees. The following tables show the estimated annual retirement benefits
payable at the normal retirement age of 65 to TWA Retirement Plan participants
with the years of service and earnings classifications indicated, assuming
payment in the form of a single life annuity. The first table covers
participants who were hired by TWA prior to January 1, 1985. The payments shown
in such tables are subject to reduction by a percentage of the estimated social
security benefit and by the effect of excluding compensation over $228,860.
17
<PAGE> 21
ESTIMATED ANNUAL RETIREMENT BENEFITS PAYABLE TO
PLAN PARTICIPANTS HIRED ON OR AFTER JANUARY 1, 1985
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000............................ $ 30,938 $ 41,250 $ 51,563 $ 61,875 $ 72,188
150,000............................ 37,125 49,500 61,875 74,250 86,625
175,000............................ 43,313 57,750 72,188 86,625 101,063
200,000............................ 49,500 66,000 82,500 99,000 115,500
225,000............................ 55,688 74,250 92,813 111,375 129,438
250,000............................ 61,875 82,500 103,125 123,750 114,375
275,000............................ 68,063 90,750 113,438 136,125 158,813
300,000............................ 74,250 99,000 123,750 148,500 173,250
325,000............................ 80,438 107,250 134,063 160,875 187,688
350,000............................ 86,625 115,500 144,375 173,250 202,125
375,000............................ 92,813 123,750 154,688 185,625 216,563
400,000............................ 99,000 132,000 165,000 198,000 231,000
425,000............................ 105,188 140,250 175,313 210,375 245,438
450,000............................ 111,375 148,500 185,625 222,750 259,875
475,000............................ 117,563 156,750 195,938 235,125 274,313
500,000............................ 123,750 165,000 206,250 247,500 288,750
</TABLE>
ESTIMATED ANNUAL RETIREMENT BENEFITS PAYABLE TO
PLAN PARTICIPANTS HIRED ON OR AFTER JANUARY 1, 1985
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000............................ $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
150,000............................ 33,750 45,000 56,250 67,500 78,750
175,000............................ 39,375 52,500 65,625 78,750 91,875
200,000............................ 45,000 60,000 75,000 90,000 105,000
225,000............................ 50,625 67,500 84,375 101,250 118,125
250,000............................ 56,250 75,000 93,750 112,500 131,250
275,000............................ 61,875 82,500 103,125 123,750 144,375
300,000............................ 67,500 90,000 112,500 135,000 157,500
325,000............................ 73,125 97,500 121,875 146,250 170,625
350,000............................ 78,750 105,000 131,250 157,500 183,750
375,000............................ 84,375 112,500 140,625 168,750 196,875
400,000............................ 90,000 120,000 150,000 180,000 210,000
425,000............................ 95,625 127,500 159,375 191,250 223,125
450,000............................ 101,250 135,000 168,750 202,500 236,250
475,000............................ 106,875 142,500 178,125 213,750 249,375
500,000............................ 112,500 150,000 187,500 225,000 262,500
</TABLE>
Earnings covered by this plan consist of total compensation before
withholding deductions, excluding overtime, premium pay, special allowances and
contributions to this or any other qualified benefit plan. Effective January 1,
1992, any compensation in excess of $228,860 per year will not be used in
computing a member's retirement benefit under the plan. A member's retirement
income at the normal retirement age, which is 65, is calculated as the greater
of (i) a percentage of final average monthly earnings (not taking into account
earnings after December 31, 1988), less a percentage of estimated social
security benefits, times year of plan service (as defined) or (ii) the accrued
benefit under the plan formula in effect immediately prior to March 1, 1986. The
retirement benefits will be reduced by the amounts of any retirement benefits
received by
18
<PAGE> 22
participants under provisions of TWA's retirement plans applicable to the
various union groups with respect to the same periods of service.
As permitted by the Employee Retirement Income Security Act of 1974, as
amended, the TWA Retirement Plan applicable to salaried employees provides for
the payment out of general funds of TWA of any benefit calculated under
provisions of applicable retirement plan that may be above the annual maximum
benefit limit under the U.S. Internal Revenue Code of 1986, as amended (the
"Code"). The annual limit as of December 31, 1992 was $112,221 at age 65, except
that for those plan members whose accrued benefits exceeded $90,000 prior to
December 31, 1983 the annual limit will be equal to the 1982 accrued benefit.
The TWA Retirement Plan provides that members vest fully in their benefits
upon the completion of five years of service. As of December 31, 1995, Mr.
Thibaudeau was a member of the TWA Retirement Plan and had completed 26 years of
service as a plan participant. The TWA Retirement Plan was frozen effective
December 31, 1992, and as such there have been no additional accruals after such
date.
COMPENSATION COMMITTEE REPORT
In late 1994, the Compensation Committee determined that, due to the
Company's financial condition entering fiscal year 1995, no salary increases or
incentive payments (other than incentive payments to Messrs. Erickson, Peiser
and Magurno under the Restructuring Incentive Compensation Plan described below)
would be granted to executive officers for such year. The Compensation Committee
instead reserved the right to review the compensation paid by the Company to
such executives at year end and to determine if same were appropriate.
In November and December, 1994, the Compensation Committee recommended to
the Board and the Board, in recognition of the long-term value to the Company's
stockholders of a successful restructuring and of the extraordinary efforts
required to accomplish this objective, unanimously adopted a Restructuring
Incentive Compensation Plan (the "Incentive Plan") for certain key executives.
The Incentive Plan conditioned the grant of an aggregate of $750,000 in cash
payments to (i) the completion of the successful financial restructuring of the
Company and (ii) the payment by the Company of all pension payments which had
been deferred from January to June 1995. The Compensation Committee and the
Board believe that the Incentive Plan was in accord with compensation practices
common in corporate financial restructurings and provided appropriate incentives
to the key executives to achieve successfully an unusually complicated
restructuring. Also in November and December, 1994, the Compensation Committee
recommended to the Board and the Board unanimously approved the KESIP for
submittal to the Company's stockholders for adoption. The purpose of the KESIP
is to promote the success and enhance the value of the Company by linking the
personal interests of participants to those of the Company's stockholders and by
providing the participants with an incentive for outstanding performance. The
KESIP was approved by the requisite vote of the Company's stockholders in
November 1995 and provides for the award of incentive and nonqualified stock
options for up to 7% of the Company's Common Stock and Employee Preferred Stock
outstanding as of December 19, 1995.
In February 1996, the Compensation Committee reviewed the compensation paid
by the Company to senior executives during 1995 and determined that such
compensation was appropriate. The Compensation Committee also reviewed the
report of Towers, Perrin, an outside consulting firm, comparing the compensation
paid to the Company's executive officers to industry wide data and to the
compensation paid to the Company's employees generally. Based on that report the
Compensation Committee has determined that no salary increases would be granted
to executive officers for 1996. During 1995 management committed to institute a
Company wide management by objective policy in 1996 to create performance and
revenue commitments. The Compensation Committee has endorsed using the
attainment of objectives under the management by objective policy as a method by
which future executive performance will be measured. The Compensation Committee
intends to review the compensation paid by the Company to executive officers at
the end of 1996 to determine whether executive compensation during 1996 was
appropriate based on attainment of such objectives.
19
<PAGE> 23
Mr. Erickson, President and Chief Executive Officer of the Company, is
compensated in accordance with the terms of the MOU. The MOU provides that Mr.
Erickson's base salary shall be reviewed annually for increase in the discretion
of the Board. The MOU further provides that Mr. Erickson shall receive an
incentive payment, equal to 30% to 50% of his base salary for 1995 provided that
the Company was not in default under any of its publicly issued securities or
other material non-public debt obligations at the end of 1995 or at the date
upon which such payment was to be paid and further provided that the Company had
met or exceeded its operating plan for 1995. Mr. Erickson has had the same base
salary since April 1994. In November and December 1994 the Compensation
Committee established the level of incentive compensation reserved for Mr.
Erickson under the Incentive Plan at $250,000, which compensation was paid
following the completion of the Company's financial restructuring and
fulfillment of the conditions set forth in the Incentive Plan. One factor the
Compensation Committee considered in setting the level of incentive compensation
to be paid to Mr. Erickson under the Incentive Plan was the timing of the
financial restructuring and the impact of same on the Company's ability to meet
or exceed its operating plan in 1995. The terms of the Incentive Plan were
included in the solicitation of votes for the prepackaged bankruptcy approved by
the Company's shareholders and creditors. No additional compensation was paid to
Mr. Erickson pursuant to the MOU for 1995.
Historically, the Company's policy regarding compensation for its executive
officers has been based on consideration of a variety of factors and the
exercise of the collective judgment of the Board of Directors. The Chief
Executive Officer has typically proposed to the Board of Directors the amount
and type of compensation for such officers. Factors considered by the CEO and
the Board of Directors in making recommendations and decisions with regard to
compensation included their subjective perception of an individual officer's
performance, significant milestones achieved by the officer and the Company,
gross margins, the nature of an officer's duties and responsibilities, the
compensation paid to officers of companies competing with the Company (to the
extent known) and a subjective assessment of the compensation the Company's
officers could obtain in the market. While various components of the Company's
performance were considered in setting compensation, other than the 1994
Restructuring Incentive Compensation Plan discussed below, compensation has not
been formally tied to pre-established, fixed objective measures of Company
performance, nor was any objective rank or weight attributed to specific
measures of performance in setting compensation.
In November 1993, the Company established a Compensation Committee to
review and make recommendations to the full Board of Directors with respect to
executive officer compensation and to set the salaries for executive officers.
In 1993, Congress enacted Section 162(m) of the U.S. Internal Revenue Code of
1986, as amended (the "Code"), effective for taxable years commencing 1994. This
legislation generally limits the Company's deduction to $1 million per year per
executive for certain compensation paid to each of its CEO and the four highest
compensated executives other than the CEO named in the applicable proxy
statement (the "covered executives"). The Code and current regulations issued
under the Code contain exclusions from this limitation. In general, the
regulations exclude from this limitation compensation that is calculated based
on "objective" performance criteria (as defined). The regulations do not exclude
from this limitation compensation that is calculated based on achievement of a
range of quantitative and qualitative criteria with full discretion by the
Committee to evaluate performance. The limitations of Section 162(m) were not
applicable to compensation paid by the Company to covered executives during
1995. At such time as the Compensation Committee determines that Section 162(m)
is likely to impact the compensation arrangements of the Company with respect to
covered executives, the Compensation Committee intents to consider the relative
impact thereof on the Company and such executives and to make recommendations to
the Board that it believes optimize the total benefit to the Company and such
executives.
The members of the Compensation Committee of the Board of Directors in
January 1995 were James A. Lawrence, chairman, William F. Compton, Eugene P.
Conese, Myron Kaplan, Esq., G. Joseph Reddington and Lawrence K. Roos. On April
19, 1995, Mr. William O'Driscoll, Mr. Thomas H. Jacobsen and Jewel
Lafontant-Mankarious, Esq. joined the Compensation Committee, replacing Messrs.
Compton and Roos. On March 19, 1996, Mr. Kaplan was named chairman of the
Compensation Committee, Mr. William M. Hoffman replaced Mr. O'Driscoll as a
member of the Compensation Committee and Mr. Jacobsen was reassigned to another
committee.
20
<PAGE> 24
The following individuals were members of the Compensation Committee during
some part of 1995 or are currently on the Compensation Committee:
James A. Lawrence
Eugene P. Conese
Thomas H. Jacobsen
Myron Kaplan, Esq.
G. Joseph Reddington
Lawrence K. Roos
William F. Compton
William O'Driscoll
Jewel Lafontant-Mankarious, Esq.
William M. Hoffman
21
<PAGE> 25
PERFORMANCE GRAPH
The following graph compares the percentage change in the Company's
cumulative total securityholder return on its Common Stock with the cumulative
total return, assuming reinvestment of dividends, of (i) the Standard & Poor's
500 Stock Index and (ii) the Standard & Poor's Airlines Group Index. The initial
price point for the Common Stock was calculated using the opening price of $5.00
per share of Common Stock, traded on an "as issued" basis, on the American Stock
Exchange as furnished to the Company by such exchange. The Common Stock was
first issued on August 23, 1995.
TOTAL SHAREHOLDER RETURN
DOLLARS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD TRANS WORLD
(FISCAL YEAR COVERED) AIRLINES S&P 500 INDEX AIRLINES
<S> <C> <C> <C>
8/23/95 100 100 100
DEC. 95 207.50 111.44 97.76
</TABLE>
22
<PAGE> 26
AGENDA ITEM TWO
AMENDMENT AND RESTATEMENT OF CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved, and recommends that the
stockholders approve, the amendment and restatement of the Certificate of
Incorporation to (a) remove certain now-obsolete references to the Company's
1993 and 1995 reorganizations, (b) remove now-obsolete references to the
Company's retired class of Cumulative Preferred Stock, (c) change the total
authorized shares of capital stock from 300,000,000 to 287,750,000 and the total
authorized shares of preferred stock from 150,000,000 shares consisting of
12,500,000 shares, of Cumulative Preferred Stock and 137,500,000 shares of
Additional Preferred Stock to 137,500,000 shares of preferred stock, and (d)
correct a typographical error contained in the Certificate of Incorporation.
The amendments to the Certificate of Incorporation proposed pursuant to
this Agenda Item Two are summarized below; however, this summary does not
purport to be complete, and is entirely qualified by reference to the full text
of the Certificate of Incorporation included as Appendix A hereto, which has
been marked to show the proposed amendments.
The amendments to the Certificate of Incorporation proposed pursuant to
this Agenda Item Two are as follows:
INTRODUCTORY LANGUAGE. An amendment would be made to reflect that, if the
proposed amendment and restatement are adopted, the Certificate of Incorporation
will be the Third Amended and Restated Certificate of Incorporation of the
Company.
ARTICLE FOURTH. Inapplicable references to the Company's now-retired
Cumulative Preferred Stock would be removed, along with references to Additional
Preferred Stock, and replaced with references to the Company's preferred stock;
and the total authorized shares of capital stock and preferred stock would be
reduced to reflect the retirement of such Cumulative Preferred Stock. The
current breakdown of authorized preferred stock between the Cumulative Preferred
Stock and Additional Preferred Stock would be eliminated, and references to the
"Preferred Stock Designation" relating to the Cumulative Preferred Stock and the
"Additional Preferred Stock Designation" relating to the Additional Preferred
Stock would be stricken.
ARTICLE SIXTH. References to the "Second Amended and Restated Certificate
of Incorporation" would be changed to the "Third Amended and Restated
Certificate of Incorporation."
ARTICLE EIGHTH. Inapplicable references to the Cumulative Preferred Stock
and Additional Preferred Stock would be replaced by references to the Company's
preferred stock, and a reference to the "Second Amended and Restated Certificate
of Incorporation" would be changed to the "Third Amended and Restated
Certificate of Incorporation."
ARTICLE TENTH. A reference to the "Second Amended and Restated Certificate
of Incorporation" would be changed to the "Third Amended and Restated
Certificate of Incorporation."
ARTICLE ELEVENTH. A reference to the "Second Amended and Restated
Certificate of Incorporation" would be changed to the "Third Amended and
Restated Certificate of Incorporation."
ARTICLE TWELFTH. A reference to the "Second Amended and Restated
Certificate of Incorporation" would be changed to the "Third Amended and
Restated Certificate of Incorporation."
ARTICLE THIRTEENTH. This provision currently provides for the affirmative
vote of at least two-thirds of the Voting Stock, voting together as a single
class, to authorize or effect any of the following "action." This provision
would be corrected by changing the word "action" to "actions."
CONCLUDING LANGUAGE. A reference to the "Second Amended and Restated
Certificate of Incorporation" would be changed to the "Third Amended and
Restated Certificate of Incorporation."
The approval of at least a majority of the outstanding shares of the Voting
Stock, voting together as a single class, will be necessary to adopt the
amendments to the Second Amended and Restated Certificate of Incorporation
proposed pursuant to this Agenda Item Two. If the proposed amendment is approved
by the
23
<PAGE> 27
required affirmative vote of the stockholders at the Meeting, it is anticipated
that a Third Amended and Restated Certificate of Incorporation will be filed and
recorded in the appropriate offices of the State of Delaware within ten (10)
days of such approval, at which time the proposed amendments will become
effective. However, pursuant to the resolution recommending submission of the
proposed changes to the Certificate of Incorporation to the stockholders, the
Board of Directors has reserved the right at any time prior to the filing of the
Third Amended and Restated Certificate of Incorporation with the Secretary of
State of the State of Delaware, and notwithstanding authorization of the
proposed amendment by the stockholders of the Company, to abandon such proposed
amendment without further stockholder action.
The Board of Directors recommends that the stockholders approve the further
amendment and restatement of the Certificate of Incorporation as proposed
pursuant to this Agenda Item Two. Accordingly, the following resolution will be
offered at the Meeting:
RESOLVED, that the Second Amended and Restated Certificate of Incorporation
of Trans World Airlines, Inc., as in force and effect on the date hereof, be
further amended and restated as included in Appendix A to the Proxy Statement
dated April , 1996, of Trans World Airlines, Inc. for the Meeting of
Stockholders to be held on May 21, 1996.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENTS TO AND RESTATEMENT OF THE COMPANY'S SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION AS PROPOSED PURSUANT TO THIS AGENDA ITEM TWO.
AGENDA ITEM THREE
AMENDMENT OF ARTICLE NINTH OF CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved, and recommends that the
stockholders approve, the amendment of Article Ninth of the Certificate of
Incorporation as summarized below. This summary does not purport to be complete,
and is entirely qualified by reference to the full text of Article Ninth of the
Certificate of Incorporation included as Appendix B hereto, which has been
marked to show the proposed amendments. If the requisite holders of Voting Stock
approve the amendment of Article Ninth of the Certificate of Incorporation
proposed in this Agenda Item Three, the Certificate of Incorporation will be
amended as follows: (a) in the event Agenda Item Two is also approved by the
requisite holders of Voting Stock, the amendments to Article Ninth proposed in
this Agenda Item Three and included as Appendix B hereto will be included in,
and deemed to be a part of, the further amended and restated Certificate of
Incorporation as described in Agenda Item Two above and Appendix A hereto; and
(b) in the event Agenda Item Two is not approved by the requisite holders of
Voting Stock, the amendments to Article Ninth proposed in this Agenda Item Three
will be filed as provided herein.
The amendments to Article Ninth of the Certificate of Incorporation
proposed pursuant to this Agenda Item Three are as follows:
ARTICLE NINTH.
Section 1. Inapplicable references to the Company's 1993 reorganization
would be stricken, including the listing of the members of the Board of
Directors of the Company appointed pursuant to the confirmation order relating
to such 1993 reorganization. In addition, the current provision that the terms
of service for members of the Board of Directors would be three (3) years for
the second term after the initial term specified in the Confirmation Order, and
one (1) year for each term thereafter would be changed to provide that the terms
of service for members of the Board of Directors would be three (3) years for
terms of office subsequent to the initial term specified in the Confirmation
Order.
Section 2. This section currently describes the nomination of director
candidates by stating that except as otherwise provided in the Certificate of
Incorporation, advance notice of stockholder nominations for the election of
Directors must be given in the manner provided in the By-laws. This section
currently goes on to describe the nomination process for the first three annual
elections of Directors following November 3, 1993,
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including the procedure for filling vacancies on the Board of Directors of the
Company during such period. These provisions, which will become inapplicable
following the Meeting, would be stricken.
Section 3. This section describes newly created directorships and
vacancies and currently provides that it is subject to Section 2 of Article
Ninth and Article III of the By-laws, thereby referring back to the description
of the nomination process for the first three annual elections of Directors
following November 3, 1993. This provision would be stricken as inapplicable.
Section 4. This section describes removal of directors and currently
provides that its provisions are subject to the provisions of Section 2 of
Article Ninth and Article III of the By-laws, thereby referring back to the
description of the nomination process for the first three annual elections of
Directors following November 3, 1993. This provision would be stricken as
inapplicable.
Section 6. This section provides that, notwithstanding anything contained
in the Certificate of Incorporation to the contrary, the affirmative vote of at
least eighty percent (80%) of the Voting Stock of the Company (defined to mean
stock of the Company entitled to vote generally in the election of directors),
voting together as a class, is required to amend or repeal, or adopt any
provision inconsistent with, Article Ninth of the Certificate of Incorporation.
This provision was adopted as part of the Company's 1993 reorganization to
ensure that the provisions of Article Ninth regarding director nominations would
remain in effect for the first three annual elections of Directors following
November 3, 1993. This provision would be stricken as inapplicable.
The approval of at least eighty percent (80%) of the Voting Stock, voting
together as a single class, will be required to adopt the amendment of Article
Ninth of the Certificate of Incorporation proposed pursuant to this Agenda Item
Three. If the proposed amendment is approved by the required affirmative vote of
the stockholders at the Meeting, it is anticipated that the amendment will be
filed and recorded in the appropriate offices of the State of Delaware within
ten (10) days of such approval, at which time the proposed amendment will become
effective. However, pursuant to the resolution recommending submission of the
proposed amendment to Article Ninth of the Certificate of Incorporation to the
stockholders, the Board of Directors has reserved the right at any time prior to
the filing of the amendment with the Secretary of State of the State of
Delaware, and notwithstanding authorization of the proposed amendment by the
stockholders of the Company, to abandon such proposed amendment without further
stockholder action.
The Board of Directors recommends that the stockholders approve the
amendment of Article Ninth of the Certificate of Incorporation as proposed
pursuant to this Agenda Item Three. Accordingly, the following resolutions will
be offered at the Meeting:
RESOLVED, that Article Ninth of the Second Amended and Restated Certificate
of Incorporation of Trans World Airlines, Inc., as in force and effect on the
date hereof, be amended as included in Appendix B to the Proxy Statement dated
April , 1996, of Trans World Airlines, Inc. for the Meeting of Stockholders to
be held on May 21, 1996; and
FURTHER RESOLVED, that in the event of the amendment to and restatement of
the Second Amended and Restated Certificate of Incorporation of Trans World
Airlines, Inc., as in force and effect on the date hereof, as included in
Appendix A to the Proxy Statement dated April , 1996, of Trans World Airlines,
Inc. for the Meeting of Stockholders to be held on May 21, 1996, the amendment
of Article Ninth of such Second Amended and Restated Certificate of
Incorporation shall be included in and deemed to be a part of such further
amended and restated Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT OF ARTICLE NINTH OF THE COMPANY'S SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION AS PROPOSED PURSUANT TO THIS AGENDA ITEM THREE.
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<PAGE> 29
AGENDA ITEM FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP, independent auditors, were the auditors of the
Company during the fiscal year ending December 31, 1995 and also have been
selected by the Board of Directors to serve as auditors for the fiscal year
ending December 31, 1996.
The Board of Directors recommends to the stockholders their ratification of
its selection of KPMG Peat Marwick LLP to audit the accounts of the Company and
its subsidiaries for 1996. Accordingly, the following resolution will be offered
at the Meeting:
RESOLVED, that the appointment by the Board of Directors of KPMG Peat
Marwick LLP, independent auditors, to audit the accounts of the Company and its
subsidiaries for 1996 be, and hereby is, ratified and approved.
In the event the holders of Voting Stock fail to ratify the appointment,
the Board of Directors will consider it a direction to select other auditors for
the subsequent year. Even if the selection is ratified, the Board of Directors,
in its discretion, may direct the appointment of a new independent accounting
firm at any time during the year if the Board feels that such change would be in
the best interests of the Company and its stockholders.
The firm (as principal accountant for the current year and also the most
recently completed fiscal year) will be represented at the Meeting and
representatives will have the opportunity to make a statement, if they so
desire, and also will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 1996.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's officers and directors and persons who own more
than 10% of the Company's Common Stock to file reports of ownership and changes
in the ownership with the SEC and to furnish the Company with copies.
Based upon its review of the copies of such forms received by it or written
representation from certain reporting persons, the Company believes that during
the last fiscal year all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.
AVAILABILITY OF
ANNUAL REPORT TO STOCKHOLDERS AND REPORT ON FORM 10-K
Copies of the Company's Annual Report to Stockholders for the year ended
December 31, 1995, which includes certain financial information about the
Company, are currently being mailed, together with this Proxy Statement to the
Company's stockholders. ADDITIONAL COPIES OF SUCH ANNUAL REPORT ALONG WITH
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1995 AS FILED WITH THE SEC (EXCLUSIVE OF EXHIBITS AND DOCUMENTS
INCORPORATED BY REFERENCE), ARE AVAILABLE TO STOCKHOLDERS WHO MAKE WRITTEN
REQUEST THEREFOR ADDRESSED TO: CORPORATE SECRETARY, ONE CITY CENTRE, 18TH FLOOR,
515 N. SIXTH STREET, ST. LOUIS, MISSOURI 63101. COPIES OF THE ANNUAL REPORT ON
FORM 10-K ARE AVAILABLE WITHOUT CHARGE. COPIES OF EXHIBITS AND BASIC DOCUMENTS
FILED WITH THE ANNUAL REPORT ON FORM 10-K OR REFERENCED THEREIN WILL BE
FURNISHED TO STOCKHOLDERS UPON WRITTEN REQUEST AND PAYMENT OF THE COMPANY'S
EXPENSES IN FURNISHING SUCH DOCUMENTS.
26
<PAGE> 30
OTHER MATTERS
Management does not intend to present to the Meeting any business other
than the items stated in the "Notice of Meeting of Stockholders" and does not
know of any matters to be brought before the Meeting other than those referred
to above. If, however, any other matters properly come before the Meeting, the
persons designated as proxies will vote on each such matter in accordance with
their best judgment.
Whether or not you expect to be at the Meeting in person, please sign, date
and return promptly the enclosed proxy. No postage is necessary if the proxy is
mailed in the United States.
STOCKHOLDER PROPOSALS
If the proxy statement relating to next year's annual meeting is released
to the Company's security holders on the anniversary of the date on which this
Proxy Statement and Form of Proxy are so released, any proposal to be presented
at next year's annual meeting must be received at the principal executive
offices of the Company not later than December 16, 1996. Any such proposals
should be directed to the attention of the Corporate Secretary for consideration
for inclusion in the Company's proxy statement and form of proxy relating to the
next annual meeting. Any such proposals must comply in all respects with the
rules and regulations of the SEC and it is suggested that proponents of any
proposals submit such proposals to the Company sufficiently in advance of the
deadline by Certified Mail-Return Receipt Requested.
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<PAGE> 31
APPENDIX A
THIRD [SECOND] AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TRANS WORLD AIRLINES, INC.
(WHICH FURTHER AMENDS AND RESTATES THE
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
TRANS WORLD AIRLINES, INC.
ORIGINALLY INCORPORATED ON AUGUST 15, 1978 AS
"NEW TWA CORPORATION")
The undersigned, Jeffrey H. Erickson, President and Chief Executive Officer
of Trans World Airlines, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the provisions of the General Corporation Law of
the State of Delaware ("GCL"), does hereby certify on behalf of the Corporation
as follows:
That pursuant to the provisions of Section 245 of the GCL, the
Corporation's Second Amended and Restated Certificate of Incorporation dated
November 16, [August 17] 1995 be amended and restated by deleting the text
therein in its entirety and inserting in lieu thereof the following:
ARTICLE FIRST. The name of the corporation is Trans World Airlines, Inc.
(the "Corporation").
ARTICLE SECOND. The address of the Corporation's registered office in the
State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19801. The name of the Corporation's registered agent at such
address is The Corporation Trust Company.
ARTICLE THIRD. The purpose of the Corporation is to engage in any lawful
act or activity for which corporations may be organized under the GCL, except
that the Corporation shall not in any state, territory, district, possession or
country carry on any business or exercise any powers which a corporation
organized under the laws thereof could not carry on or exercise.
ARTICLE FOURTH. Intentionally left blank.
ARTICLE FIFTH. Section 1. Authorized Capital Stock. The Corporation is
authorized to issue [three] two classes of capital stock. The total number of
shares of capital stock that the Corporation is authorized to issue is two
hundred million eighty seven thousand five hundred (287,500,000) [three hundred
million (300,000,000)] shares, consisting of (i) one hundred fifty million
(150,000,000) shares of common stock with a par value of $.01 per share (the
"Common Stock"), (ii) [twelve million five hundred thousand (12,500,000) shares
of Cumulative Preferred Stock with a par value $.01 per share referred to in the
Certificate of Designation, Preferences and Rights dated November 3, 1993 (the
"Preferred Stock"), and (iii)] one hundred thirty seven million five hundred
thousand (137,500,000) shares of preferred stock with a par value of $.01 per
share (the "[Additional] Preferred Stock"). [The Corporation will not issue
nonvoting capital stock to the extent prohibited by the United States Bankruptcy
Code (the "Bankruptcy Code"), 11 U.S.C. sec. 1123; provided, however, this
sentence (a) will have not further force and effect beyond that required under
such section, (b) will have such force and effect, if any, only for so long as
such section is in effect and applicable to the Corporation, and (c) in all
events may be amended or eliminated in accordance with applicable law as from
time to time in effect.]
Section 2. Intentionally left blank.
Section [2.] 3. Common Stock. Except as may otherwise be provided in the
[Cumulative] Preferred Stock Designation or any other Preferred Stock
Designation (as hereinafter defined), the holders of Common Stock will be
entitled to one vote for each share of Common Stock held of record by such
holder as of the record
Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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<PAGE> 32
date for such meeting (i) on each matter submitted to a vote at a meeting of
stockholders and (ii) for each of the directors to be elected at an annual
meeting of shareholders. Except as may otherwise be provided in the Cumulative
Preferred Stock Designation or any [Additional] Preferred Stock Designations,
(i) the holders of the Common Stock shall be entitled to receive, when, as and
if declared by the Board of Directors of the Corporation (the "Board"), out of
funds legally available therefor, dividends payable in cash, stock or
otherwise, and (ii) upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the remaining net assets of the
Corporation shall be distributed pro rata to the holders of the Common Stock in
accordance with their respective rights and interests.
Section 4.
[Additional Preferred Stock. The Additional Preferred Stock shall be issued
in one or more series. The Board is hereby authorized to issue shares of
Additional Preferred Stock and to fix before issuance the number of shares to be
issued and the designation, relative powers, preferences, and rights and
qualifications, limitations, or restrictions of all shares. The authority of the
Board will include, without limiting the generality of the foregoing, the
determination of any or all of the following: (a) the number of shares and the
designation to distinguish the shares; (b) the voting powers, if any, and
whether such voting powers are full or limited; (c) the redemption provisions,
if any, including the redemption price or prices to be paid; (d) whether
dividends, if any, will be cumulative or noncumulative, the dividend rate, and
the dates and preferences of dividends; (e) the rights upon the voluntary or
involuntary dissolution of, or upon any distribution of the assets of, the
Corporation; (f) the provisions, if any, of a sinking fund; and (g) any other
relative, participating, optional, or other special powers, preferences, rights,
qualifications, limitations, or restrictions thereof; all as may be determined
by the Board and stated in the resolution or resolutions providing for the
issuance or issuances of such Additional Preferred Stock (each such designation
is collectively, the "Additional Preferred Stock Designation").]
Preferred Stock. The Preferred Stock shall be issued in one or more series.
The Board [of Directors of the Corporation (the "Board") are] is hereby
authorized to issue shares of Preferred Stock and to fix before issuance the
number of shares to be issued and the designation, relative powers,
preferences, and rights and qualifications, limitations, or restrictions of all
shares. The authority of the Board will include, without limiting the
generality of the foregoing, the determination of any or all of the following:
(a) the number of shares and the designation to distinguish the shares; (b) the
voting powers, if any, and whether such voting powers are full or limited; (c)
the redemption provisions, if any, including the redemption price or prices to
be paid; (d) whether dividends, if any, will be cumulative or noncumulative,
the dividend rate, and the dates and preferences of dividends; (e) the rights
upon the voluntary or involuntary dissolution of, or upon any distribution of
the assets of, the Corporation; (f) the provisions, if any, of a sinking fund;
and (g) any other relative, participating, optional, or other special powers,
preferences, rights, qualifications, limitations, or restrictions thereof; all
as may be determined by the Board and stated in the resolution or resolutions
providing for the issuance or issuances of such Preferred Stock (each such
designation is collectively, the "Preferred Stock Designation").
ARTICLE SIXTH. The Board may make, amend, and repeal the By-Laws of the
Corporation. Any By-Law made by the Board under the powers conferred hereby may
be amended or repealed by the Board (except as specified in any such By-Law so
made or amended) or by the Corporation's stockholders in the manner provided in
the By-Laws of the Corporation; provided, however, that notwithstanding anything
in the By-Laws to the contrary, no provision of the By-Laws may be adopted,
amended, altered or repealed by the holders of the Company's capital stock other
than by the affirmative vote of the holders of three-fourths or more of the then
outstanding shares of Voting Stock (defined below) voting together as a single
class. The Corporation may in its By-Laws confer powers upon the Board in
addition to the foregoing and in addition to the powers and authorities
expressly conferred upon the Board by applicable law. For the purposes of this
Third [Second] Amended and Restated Certificate of Incorporation, the term
"Voting Stock" means stock of the Corporation of all classes and series
entitled to vote generally in the election of directors and shall not include
any class or series of preferred stock of the Corporation unless the
certificate of designations, preferences and rights for such class or series
shall specifically state that such class or series shall be deemed Voting Stock
for purposes
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of this Article Sixth. Notwithstanding anything contained in this Third
[Second] Amended and Restated Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least three-fourths of the Voting Stock,
voting together as a single class, is required to amend or repeal, or to adopt
any provisions inconsistent with, this Article Sixth.
ARTICLE SEVENTH. The existence of the Corporation shall be perpetual.
ARTICLE EIGHTH. Subject to the rights of holders of Preferred Stock:
(a) any action required or permitted to be taken by the stockholders of
the Corporation must be effected at duly called annual or special
meeting of stockholders of the Corporation and may not be effected
by any consent in writing of such stockholders; and
(b) special meetings of stockholders of the Corporation may be called
only by (i) the Chairman of the Board (the "Chairman"), (ii) the
Corporate Secretary of the Corporation (the "Secretary") within ten
(10) calendar days after receipt of the written request of a
majority of the total number of Directors that the Corporation would
have if there were no vacancies, provided, however, that the total
number of Directors shall be determined without inclusion of
Directors to be named by holders of Preferred Stock [or Additional
Preferred Stock] until such persons have been elected in accordance
with the By-Laws of the Corporation (the "Whole Board"), and (iii)
as provided in Section 2.3(b) of the By-Laws.
At any annual meeting or special meeting of stockholders of the Corporation,
only such business will be conducted or considered as has been brought before
such meeting in the manner provided in the By-Laws of the Corporation.
Notwithstanding anything contained in this Third [Second] Amended and Restated
Certificate of Incorporation to the contrary, the affirmative vote of at least a
majority of the Voting Stock, voting together as a single class, will be
required to amend or repeal, or adopt any provision inconsistent with, this
Article Eighth.
ARTICLE NINTH. Section 1. Number, Election and Terms of Directors. The
Board shall be reconstituted pursuant to the Plan of Reorganization and Section
303 of the GCL. Subject to the rights, if any, of the holders of Preferred Stock
to elect additional Directors under circumstances specified in the Preferred
Stock Designation, the number of Directors of the Corporation shall be fifteen
(15). The Directors, other than those who may be elected by the holders of
Preferred Stock, shall be classified with respect to the time for which they
severally hold office into three (3) classes of five (5) Directors per class,
designated Class I, Class II and Class III. Effective upon November 3, 1993, the
following persons shall be Directors of the Corporation pursuant to the
Confirmation Order and Section 303 of the GCL: in Class I, William R. Howard,
Glenn R. Zander, Robert H. H. Wilson, Eugene Conese, Sr. and Lawrence K. Roos;
in Class II, Gerald Gitner, Myron Kaplan, William O'Driscoll, William Compton
and Victoria Frankovich; in Class III, James A. Lawrence, Thomas Meagher, Joseph
Reddington, Donald Craib and Timothy Connolly. The Directors first appointed to
Class I will hold office for a term expiring at the annual meeting of
stockholders to be held in 1994; the Directors first appointed to Class II will
hold office for a term expiring at the annual meeting of stockholders to be held
in 1995; and the Directors first appointed to Class III will hold office for a
term expiring at the annual meeting of stockholders to be held in 1996. The
members of each such class will hold office until their successors are elected
and qualified. The subsequent terms of service for all Directors will be three
(3) years for the second term and one (1) year for each term thereafter for all
Directors, regardless of their classification. Subject to the rights, if any, of
the holders of Preferred Stock to elect additional Directors under circumstances
specified in the Preferred Stock Designation, Directors may be elected by the
stockholders only at an annual meeting of stockholders. Election of Directors
need not be by written ballot unless requested by the Chairman or by the holders
of a majority of the Voting Stock present in person or represented by proxy at a
meeting of the stockholders at which Directors are to be elected.
Section 2. Nomination of Director Candidates. Except as otherwise
provided herein, advance notice of stockholder nominations for the election of
Directors must be given in the manner provided in the By-Laws of the
Corporation. The reconstituted Board of Directors, as set forth in Section 1 of
this Article Ninth, was nominated as follows: the management of the Corporation
nominated William R. Howard, Glenn R. Zander,
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<PAGE> 34
and Robert H. H. Wilson as Directors in Class I; the Creditors' Committee (as
hereinafter defined) nominated Eugene Conese, Sr. and Lawrence K. Roos as
Directors in Class I, Gerald Gitner and Myron Kaplan as Directors in Class II
and James A. Lawrence, Thomas Meagher, Joseph Reddington and Donald Craib as
Directors in Class III; IAM (as hereinafter defined) nominated William
O'Driscoll as a Director in Class II and Timothy Connolly as a Director in Class
III; ALPA (as hereinafter defined) nominated William Compton as a Director in
Class II; and IFFA nominated Victoria Frankovich as a Director in Class II. In
connection with the first three annual elections of Directors following November
3, 1993, the Board will, at least seventy-five (75) calendar days prior to the
date of the relevant election, request the continuing Directors who were
nominated by the same Original Nominating Entity (as hereinafter defined) as the
Director whose term is then expiring to nominate a person to succeed the
retiring Director. If no such Directors remain, the Board will, at least
seventy-five (75) calendar days prior to the date of the relevant election,
request nomination of a person from such Original Nominating Entity. Such
nomination shall be accompanied by the signed consent of the nominee to serve as
Director of the Corporation if elected and information about the nominee as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board. Not more than five (5)
business days after receipt of the nomination, the Board of Directors will
advise the nominating Directors or the Original Nominating Entity, as the case
may be, if the nominee is not acceptable. If such notice of unacceptability is
given, the Directors or entity making the nomination will provide an additional
nominee or nominees. A notice of unacceptability may be given by the Board of
Directors only after obtaining an opinion of outside counsel stating that the
acceptance of the relevant nominee would be a breach of fiduciary duty of the
Board to the stockholders of the Corporation. If no notice of unacceptability is
given, the nominee shall be deemed to be acceptable to the Board of Directors to
fill the position of the vacating director. If a notice of unacceptability is
given, the Original Nominating Entity or Directors, as the case may be, and the
Board of Directors will, in good faith, repeat the foregoing procedures until an
acceptable nominee is found.
Vacancies on the Board created by resignation, removal or otherwise and
occurring prior to the third annual election of Directors and as to Directors
elected at such third annual election shall be filled by a nominee of the
remaining Directors who were nominated by the same Original Nominating Entity as
the vacating Director. If no such Directors remain, the Board will request
nomination of a person for the vacant directorship from the Original Nominating
Entity which nominated the vacating Director. Promptly upon receipt of such
name, the Board will advise the nominating Director or entity, as the case may
be, if the nominee is not acceptable. If such notice of unacceptability is
given, the Directors or entity making the nomination will provide an additional
nominee or nominees. A notice of unacceptability may be given by the Board only
after obtaining an opinion of outside counsel stating the acceptance of the
relevant nominee would be a breach of fiduciary duty of the Board to the
stockholders of the Corporation. If no notice of unacceptability is given, the
nominee shall fill the position of the vacating Director. If a notice of
unacceptability is given, the Original Nominating Entity or Directors, as the
case may be, and the Board will, in good faith, repeat the foregoing procedures
until an acceptable nominee is found.
The following terms shall have the following meanings:
"ALPA" means the Air Line Pilots Association, International.
"Creditors' Committee" means the Official Unsecured Creditors' Committee of
the Corporation appointed by the Office of the United States Trustee pursuant to
Section 1102 of the Bankruptcy Code in the bankruptcy case captioned In re Trans
World Airlines, Inc. (Case No. 92-115) filed in the United States Bankruptcy
Court for the District of Delaware.
"IAM" means the International Association of Machinists and Aerospace
Workers.
"IFFA" means the Independent Federation of Flight Attendants.
"Original Nominating Entity" means, as applicable, each of the management
of the Corporation, ALPA, IAM, IFFA and the Creditors' Committee until dissolved
and thereafter in lieu thereof, the Voting Trust.
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"Voting Trust" means the voting trust established pursuant to the Plan of
Reorganization for holding shares of Common Stock.
Section 3. Newly Created Directorships and Vacancies. Subject to the
rights, if any, of the holders of Preferred Stock to elect additional Directors
under circumstances specified in the Preferred Stock Designation, and subject to
the provisions of Section 2 of this Article Ninth and Article III of the By-Laws
regarding appointment of successor Directors, any vacancies on the Board
resulting from death, resignation, disqualification, removal or other cause will
be filled solely by the affirmative vote of a majority of the remaining
Directors then in office, even though less than a quorum of the Board, or by a
sole remaining Director. Any Director elected in accordance with the preceding
sentence will hold office for the remainder of the full term of the class of
Directors in which the vacancy occurred and until such Director's successor has
been elected and qualified. No decrease in the number of Directors constituting
the Board may shorten the term of any incumbent Director.
Section 4. Removal. Subject to the rights, if any, of the holders of
Preferred Stock to elect additional Directors under circumstances specified in
the Preferred Stock Designation, and Section 2 of this Article Ninth and Article
III of the By-Laws, any Director may be removed from office by the stockholders
only for cause and only in the manner provided in this Section 4. At any annual
meeting or special meeting of the stockholders, the notice of which states that
the removal of a Director or Directors is among the purposes of the meeting, the
affirmative vote of the holders of at least a majority of the Voting Stock,
voting together as a single class, may remove such Director or Directors for
cause.
Section 5. Meetings of Board. Except as otherwise provided herein, at all
meetings of the Board, a majority of the Whole Board shall be required to
constitute a quorum for the transaction of business. No action may be taken at a
meeting at which a quorum is not present, except to vote to adjourn such meeting
or fill a vacancy on the Board. Except as otherwise provided herein, no action
shall be taken by the Corporation unless such action is authorized by the
affirmative vote of a majority of the Directors in attendance at a meeting at
which a quorum is present.
Section 6. Amendment, Repeal, Etc. Notwithstanding anything contained in
this Amended and Restated Certificate of Incorporation to the contrary, the
affirmative vote of at least eighty percent (80%) of the Voting Stock, voting
together as a single class, is required to amend or repeal, or adopt any
provision inconsistent with, this Article Ninth.
ARTICLE TENTH. To the full extent permitted by the GCL or any applicable
law currently or hereinafter in effect, a Director of the Corporation shall not
be personally liable either to the Corporation or to any stockholder for
monetary damages for breach of fiduciary duty as a Director, except for
liability of a Director (i) for any breach of the Director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions which are not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for an act or omission for which the liability of such Director is
expressly provided under the GCL or (iv) for any transaction from which the
Director derived an improper personal benefit. Neither amendment nor repeal of
this Article Tenth nor the adoption of any provision of this Third [Second]
Amended and Restated Certificate of Incorporation inconsistent with this Article
Tenth shall eliminate or reduce the effect of this Article Tenth in respect of
any matter occurring or any cause of action, suit or claim that, but for this
Article Tenth, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision. This Article Tenth shall not eliminate or
limit the personal liability of a Director for any act or omission occurring
prior to the effective date hereof.
No contact or transaction between the Corporation and one or more of its
directors, officers, or stockholders or between the Corporation or any person
(as used herein "person" means any other corporation, partnership, association,
firm, trust, joint venture, political subdivision, or instrumentality) or other
organization in which one or more of its directors, officers, or stockholders
are directors, officers, or stockholders, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the director or
officer is present at or participates in the meeting of the Board or committee
which authorizes the contract or transaction, or solely because his, her or
their votes are counted for such purpose, if: (i) the material facts as to his,
her or their relationship or interest and as to the contract or transaction are
disclosed or are known to the
A-5
<PAGE> 36
Board or the committee, and the Board or the committee, in good faith,
authorizes the contact or transaction by the affirmative votes of a majority of
the disinterested directors, even though the disinterested directors are less
than a quorum; or (ii) the material facts as to his, her or their relationship
or interest and as to the contact or transaction are disclosed or are known to
the stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders: or (iii) the
contact or transaction is fair as to the Corporation as of the time it is
authorized, approved, or ratified by the Board, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board or of a committee which
authorizes the contract or transaction. Any amendment or repeal of, or adoption
of any provision inconsistent with, this Article Tenth will not adversely affect
any right or protection existing hereunder, or arising out of facts occurring,
prior to such amendment, repeal, or adoption, and no such amendment, repeal, or
adoption will affect the legality, validity, or enforceability of any contact
entered into or right granted prior to the effective date of such amendment,
repeal, or adoption.
ARTICLE ELEVENTH. The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to, or testifies in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative in nature, by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding to
the full extent permitted by law, and the Corporation may adopt By-Laws or enter
into agreements with any such person for the purpose of providing for such
indemnification.
To the extent that a director or officer of the Corporation has been
successful on the merits or otherwise (including without limitation settlement
by nolo contendere) in defense of any action, suit or proceeding referred to in
the immediately preceding paragraph, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection therewith.
Expenses incurred by an officer, director, employee or agent in defending
or testifying in a civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that such director or officer is not entitled to be indemnified by
the Corporation against such expenses as authorized by this Article Eleventh,
and the Corporation may adopt By-Laws or enter into agreements with such persons
for the purpose of providing for such advances.
The indemnification permitted by Article Eleventh shall not be deemed
exclusive of any other rights to which any person may be entitled under any
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in such person's official capacity and as to action in another
capacity while holding an office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such person.
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, employee benefit plan trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under the
provisions of this Article Eleventh or otherwise.
If the GCL is amended to further expand the indemnification permitted to
directors, officers, employees or agents of the Corporation, then the
Corporation shall indemnify such persons to the fullest extent permitted by the
GCL, as so amended.
A-6
<PAGE> 37
Nothing contained in this Third [Second] Amended and Restated Certificate
of Incorporation shall be deemed to reinstate any obligation of the Corporation
to indemnify any person or entity, which was otherwise released under or in
connection with that certain Settlement Agreement, dated as of January 5, 1993
(the "Settlement Agreement") among Trans World Airlines, Inc., Official
Unsecured Creditors' Committee of Trans World Airlines, Inc., Pension Benefit
Guaranty Corporation, International Association of Machinists and Aerospace
Workers, Independent Federation of Flight Attendants, Air Line Pilots
Association, International, Transport Workers Union of America, Carl C. Icahn,
The Icahn Entities (as set forth therein), and Pichin Corp., as the Icahn
Sponsor or which was otherwise expressly released or discharged.
ARTICLE TWELFTH. The Corporation reserves the right to amend, alter,
change or repeal any provision of this Third [Second] Amended and Restated
Certificate of Incorporation in the manner now or hereafter prescribed by
statute or herein and all rights conferred upon stockholders herein are granted
subject to this reservation.
ARTICLE THIRTEENTH. The affirmative vote of at least two-thirds of the
Voting Stock of the Corporation, voting together as a single class, shall be
necessary for the purpose of authorizing or effecting any of the following
actions prior to September 1, 2000: (a) any merger or consolidation of the
Corporation with or into any other entity; (b) any business combination within
the meaning of Section 203 of the Delaware General Corporation Law; (c) any
dissolution or liquidation of the Corporation; and (d) any repurchase,
retirement or redemption of the Corporation's capital stock or other securities,
issued after the effective date of this Article Thirteenth, prior to their
scheduled maturity or expiration except for mandatory redemptions of any
redeemable preferred stock of the Corporation and redemptions out of the
proceeds of any substantially concurrent offering of comparable or junior
securities unless such matter referred to in (a) through (d) shall have been
approved by a vote of at least eighty percent (80%) of the Board of Directors
then in office in which event no vote by the holders of Voting Stock shall be
required except to the extent otherwise required by this Certificate of
Incorporation, by law or as the Board of Directors may recommend by the
affirmative vote of a majority of the Board of Directors then in office. This
Article Thirteenth will terminate on September 1, 2000.
IN WITNESS WHEREOF, Jeffrey H. Erickson, a duly authorized representative
of the Corporation, has signed this Third [Second] Amended and Restated
Certificate of Incorporation on this, the th [16th] day of May, 1996
[November, 1995.]
TRANS WORLD AIRLINES, INC.
By:
------------------------------------
Jeffrey H. Erickson
Its: President and Chief Executive
Officer
ATTEST:
By:
----------------------------------
Kathleen A. Soled
Its: Corporate Secretary
[CORPORATE SEAL]
A-7
<PAGE> 38
<TABLE>
<S> <C> <C>
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS, )
</TABLE>
The undersigned, a Notary Public in and for the aforesaid County and State,
certifies that on this th [16th] day of May, 1996, [November, 1995] Jeffrey H.
Erickson, the President and Officer of Trans World Airlines, Inc. (the
"Corporation") and Kathleen A. Soled, Corporate Secretary of the Corporation,
known to me personally to be such, duly executed the foregoing Certificate
before me and acknowledged said Certificate to be their act and deed made on
behalf of the Corporation, and acknowledged that the facts stated therein are
true. The signatures on the attached Certificate of said President and Chief
Executive Officer and Corporate Secretary of the Corporation are in the
handwriting of said President and Chief Executive Officer and said Corporate
Secretary, respectively, and the seal affixed to the Certificate is the
corporate seal of the Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office this
th [16th] day of May, 1996. [November, 1995.]
------------------------------------------------
Notary Public
(Notarial Seal)
A-8
<PAGE> 39
APPENDIX B
ARTICLE NINTH OF
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
TRANS WORLD AIRLINES, INC.
ARTICLE NINTH. Section 1. Number, Election and Terms of Directors. [The
Board shall be reconstituted pursuant to the Plan of Reorganization and Section
303 of the GCL.] Subject to the rights, if any, of the holders of Preferred
Stock to elect additional Directors under circumstances specified in the
Preferred Stock Designation, the number of Directors of the Corporation shall
be fifteen (15). The Directors, other than those who may be elected by the
holders of Preferred Stock, shall be classified with respect to the time for
which they severally hold office into three (3) classes of five (5) Directors
per class, designated Class I, Class II and Class III. [Effective upon November
3, 1993, the following persons shall be Directors of the Corporation pursuant
to the Confirmation Order and Section 303 of the GCL: in Class I, William R.
Howard, Glenn R. Zander, Robert H. H. Wilson, Eugene Conese, Sr. and Lawrence
K. Roos; in Class II, Gerald Gitner, Myron Kaplan, William O'Driscoll, William
Compton and Victoria Frankovich; in Class III, James A. Lawrence, Thomas
Meagher, Joseph Reddington, Donald Craib and Timothy Connolly.] The Directors
first appointed to Class I will hold office for a term expiring at the annual
meeting of stockholders to be held in 1994; the Directors first appointed to
Class II will hold office for a term expiring at the annual meeting of
stockholders to be held in 1995; and the Directors first appointed to Class III
will hold office for a term expiring at the annual meeting of stockholders to
be held in 1996. The members of each such class will hold office until their
successors are elected and qualified. The subsequent terms of service for all
Directors will be three (3) years. [The subsequent terms of service for all
Directors will be three (3) years for the second term and one (1) year for each
term thereafter for all Directors, regardless of their classification.] Subject
to the rights, if any, of the holders of Preferred Stock to elect additional
Directors under circumstances specified in the Preferred Stock Designation,
Directors may be elected by the stockholders only at an annual meeting of
stockholders. Election of Directors need not be by written ballot unless
requested by the Chairman or by the holders of a majority of the Voting Stock
present in person or represented by proxy at a meeting of the stockholders at
which Directors are to be elected.
Section 2. Nomination of Director Candidates. Except as otherwise provided
herein, advance notice of stockholder nominations for the election of Directors
must be given in the manner provided in the By-Laws of the Corporation. [The
reconstituted Board of Directors, as set forth in Section 1 of this Article
Ninth, was nominated as follows: the management of the Corporation nominated
William R. Howard, Glenn R. Zander, and Robert H. H. Wilson as Directors in
Class I; the Creditors' Committee (as hereinafter defined) nominated Eugene
Conese, Sr. and Lawrence K. Roos as Directors in Class I, Gerald Gitner and
Myron Kaplan as Directors in Class II and James A. Lawrence, Thomas Meagher,
Joseph Reddington and Donald Craib as Directors in Class III; IAM (as
hereinafter defined) nominated William O'Driscoll as a Director in Class II and
Timothy Connolly as a Director in Class III; ALPA (as hereinafter defined)
nominated William Compton as a Director in Class II; and IFFA nominated Victoria
Frankovich as a Director in Class II. In connection with the first three annual
elections of Directors following November 3, 1993, the Board will, at least
seventy five (75) calendar days prior to the date of the relevant election,
request the continuing Directors who were nominated by the same Original
Nominating Entity (as hereinafter defined) as the Director whose term is then
expiring to nominate a person to succeed the retiring Director. If no such
Directors remain, the Board will, at least seventy five (75) calendar days prior
to the date of the relevant election, request nomination of a person from such
Original Nominating Entity. Such nomination shall be accompanied by the signed
consent of the nominee to serve as Director of the Corporation if elected and
information about the nominee as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board. Not more than five (5) business days after receipt of the nomination, the
Board of Directors will advise the nominating Directors or the Original
Nominating Entity, as the case may be, if the nominee is not acceptable. If such
notice of unacceptability is given, the Directors or entity making the
nomination will]
Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
B-1
<PAGE> 40
[provide an additional nominee or nominees. A notice of unacceptability may be
given by the Board of Directors only after obtaining an opinion of outside
counsel stating that the acceptance of the relevant nominee would be a breach of
fiduciary duty of the Board to the stockholders of the Corporation. If no notice
of unacceptability is given, the nominee shall be deemed to be acceptable to the
Board of Directors to fill the position of the vacating director. If a notice of
unacceptability is given, the Original Nominating Entity or Directors, as the
case may be, and the Board of Directors will, in good faith, repeat the
foregoing procedures until an acceptable nominee is found.]
[Vacancies on the Board created by resignation, removal or otherwise and
occurring prior to the third annual election of Directors and as to Directors
elected at such third annual election shall be filled by a nominee of the
remaining directors who were nominated by the same Original Nominating Entity as
the vacating Director. If no such Directors remain, the Board will request
nomination of a person for the vacant directorship from the Original Nominating
Entity which nominated the vacating Director. Promptly upon receipt of such
name, the Board will advise the nominating Director or entity, as the case may
be, if the nominee is not acceptable. If such notice of unacceptability is
given, the Directors or entity making the nomination will provide an additional
nominee or nominees. A notice of unacceptability may be given by the Board only
after obtaining an opinion of outside counsel stating the acceptance of the
relevant nominee would be a breach of fiduciary duty of the Board to the
stockholders of the Corporation. If no notice of unacceptability is given, the
nominee shall fill the position of the vacating Director. If a notice of
unacceptability is given, the Original Nominating Entity or Directors, as the
case may be, and the Board will, in good faith, repeat the foregoing procedures
until an acceptable nominee is found.]
[The following terms shall have the following meanings:]
["ALPA" means the Air Line Pilots Association, International.]
["Creditors' Committee" means the Official Unsecured Creditors' Committee
of the Corporation appointed by the Office of the United States Trustee
pursuant to Section 1102 of the Bankruptcy Code in the bankruptcy case
captioned In re Trans World Airlines, Inc. (Case No. 92-115) filed in the
United States Bankruptcy Court for the District of Delaware.]
["IAM" means the International Association of Machinists and Aerospace
Workers. "IAM" means the International Association of Machinists and Aerospace
Workers.]
["IFFA" means the Independent Federation of Flight Attendants.]
["Original Nominating Entity" means, as applicable, each of the management
of the Corporation, ALPA, IAM, IFFA and the Creditors' Committee until dissolved
and thereafter in lieu thereof, the Voting Trust.]
["Voting Trust" means the voting trust established pursuant to the Plan of
Reorganization for holding shares of Common Stock.]
Section 3. Newly Created Directorships and Vacancies. Subject to the
rights, if any, of the holders of Preferred Stock to elect additional Directors
under circumstances specified in the Preferred Stock Designation, and subject
to the provisions of Article III of the By-Laws regarding appointment of
successor Directors, [and subject to the provisions of Section 2 of this Article
Ninth and Article III of the By-Laws regarding appointment of successor
Directors,] any vacancies on the Board resulting from death, resignation,
disqualification, removal or other cause will be filled solely by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board, or by a sole remaining Director. Any
Director elected in accordance with the preceding sentence will hold office for
the remainder of the full term of the class of Directors in which the vacancy
occurred and until such Director's successor has been elected and qualified. No
decrease in the number of Directors constituting the Board may shorten the term
of any incumbent Director.
Section 4. Removal. Subject to the rights, if any, of the holders of
Preferred Stock to elect additional Directors under circumstances specified in
the Preferred Stock Designation, and Article III of the By-Laws, [and Section 2
of this Article Ninth and Article III of the By-Laws,] any Director may be
removed from office by the stockholders only for cause and only in the manner
provided in this Section 4. At any annual meeting or
B-2
<PAGE> 41
special meeting of the stockholders, the notice of which states that the removal
of a Director or Directors is among the purposes of the meeting, the affirmative
vote of the holders of at least a majority of the Voting Stock, voting together
as a single class, may remove such Director or Directors for cause.
Section 5. Meetings of Board. Except as otherwise provided herein, at all
meetings of the Board, a majority of the Whole Board shall be required to
constitute a quorum for the transaction of business. No action may be taken at a
meeting at which a quorum is not present, except to vote to adjourn such meeting
or fill a vacancy on the Board. Except as otherwise provided herein, no action
shall be taken by the Corporation unless such action is authorized by the
affirmative vote of a majority of the Directors in attendance at a meeting at
which a quorum is present.
[Section 6. Amendment, Repeal, Etc. Notwithstanding anything contained in
this Amended and Restated Certificate of Incorporation to the contrary, the
affirmative vote of at least eighty percent (80%) of the Voting Stock, voting
together as a single class, is required to amend or repeal, or adopt any
provision inconsistent with, this Article Ninth.]
B-3
<PAGE> 42
TRANS WORLD AIRLINES, INC.
FOR SHARES OF IAM PREFERRED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated April
, 1996, and does hereby appoint William O'Driscoll and Myron
Kaplan, and each of them, with full power of substitution as proxies
and attorneys-in-fact on behalf and in the name of the undersigned
to represent the undersigned and to vote all shares of Trans World
Airlines, Inc. IAM Preferred Stock which the undersigned would be
entitled to vote if personally present at the Annual Meeting of
Stockholders of Trans World Airlines, Inc. to be held at the
Americas Center, 801 Convention Plaza, St. Louis, Missouri, 63101,
at 10:00 a.m. local time, on May 21, 1996, and at any adjournment(s)
thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
This Proxy, when properly executed, will be voted in accordance
with the directions given by the undersigned stockholder. If no
direction is made, it will be voted in favor of Proposals 1-4.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 43
<TABLE>
<CAPTION>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
NOMINEES: WILLIAM W. WINPISINGER
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C>
1. PROPOSAL 1: [ ] [ ] 2. PROPOSAL 2: Approval of [ ] [ ] [ ]
Election of Amendment and Restatement of
Class III Second Amended and Restated
Director. Certificate of Incorporation
3. PROPOSAL 3: Approval of [ ] [ ] [ ]
For, except vote withheld from the following nominee(s): Amendment of Article Ninth of
________________________________________________________ Second Amended and Restated
Certificate of Incorporation
4. PROPOSAL 4: Ratification of [ ] [ ] [ ]
KPMG Peat Marwick LLP as
Independent Accountants
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES".
SIGNATURE__________________________________________________________DATE________________
SIGNATURE__________________________________________________________DATE________________
NOTE: Please sign exactly as your name(s) appear hereon, and when signing as attorney, executor,
administrator, trustee or guardian, give your full title as such. If the signatory is a
corporation, sign the full corporation name by a duly authorized officer.
</TABLE>
<PAGE> 44
TRANS WORLD AIRLINES, INC.
FOR SHARES OF ALPA PREFERRED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated April
, 1996, and does hereby appoint William O'Driscoll and Myron
Kaplan, and each of them, with full power of substitution as proxies
and attorneys-in-fact on behalf and in the name of the undersigned
to represent the undersigned and to vote all shares of Trans World
Airlines, Inc. ALPA Preferred Stock which the undersigned would be
entitled to vote if personally present at the Annual Meeting of
Stockholders of Trans World Airlines, Inc. to be held at the
American Center, 801 Convention Plaza, St. Louis, Missouri, 63101,
at 10:00 a.m. local time, on May 21, 1996, and at any adjournment(s)
thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
This Proxy, when properly executed, will be voted in accordance
with the directions given by the undersigned stockholder. If no
direction is made, it will be voted in favor of Proposals 2-4.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 45
<TABLE>
<CAPTION>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR AGAINST ABSTAIN
<C> <C> <C>
1. PROPOSAL 2: Approval of [ ] [ ] [ ]
Amendment and Restatement of
Second Amended and Restated
Certificate of Incorporation
2. PROPOSAL 3: Approval of [ ] [ ] [ ]
Amendment of Article Ninth of
Second Amended and Restated
Certificate of Incorporation
3. PROPOSAL 4: Ratification of [ ] [ ] [ ]
KPMG Peat Marwick LLP as
Independent Accountants
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES".
SIGNATURE__________________________________________________________DATE________________
SIGNATURE__________________________________________________________DATE________________
NOTE: Please sign exactly as your name(s) appear hereon, and when signing as attorney, executor,
administrator, trustee or guardian, give your full title as such. If the signatory is a
corporation, sign the full corporation name by a duly authorized officer.
</TABLE>
<PAGE> 46
TRANS WORLD AIRLINES, INC.
FOR SHARES OF IFFA PREFERRED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated April
, 1996, and does hereby appoint William O'Driscoll and Myron
Kaplan, and each of them, with full power of substitution as proxies
and attorneys-in-fact on behalf and in the name of the undersigned
to represent the undersigned and to vote all shares of Trans World
Airlines, Inc. IFFA Preferred Stock which the undersigned would be
entitled to vote if personally present at the Annual Meeting of
Stockholders of Trans World Airlines, Inc. to be held at the
Americas Center, 801 Convention Plaza, St. Louis, Missouri, 63101,
at 10:00 a.m. local time, on May 21, 1996, and at any adjournment(s)
thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
This Proxy, when properly executed, will be voted in accordance
with the directions given by the undersigned stockholder. If no
direction is made, it will be voted in favor of Proposals 2-4.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 47
<TABLE>
<CAPTION>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR AGAINST ABSTAIN
<C> <C> <C>
1. PROPOSAL 2: Approval of [ ] [ ] [ ]
Amendment and Restatement of
Second Amended and Restated
Certificate of Incorporation
2. PROPOSAL 3: Approval of [ ] [ ] [ ]
Amendment of Article Ninth of
Second Amended and Restated
Certificate of Incorporation
3. PROPOSAL 4: Ratification of [ ] [ ] [ ]
KPMG Peat Marwick LLP as
Independent Accountants
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES".
SIGNATURE__________________________________________________________DATE________________
SIGNATURE__________________________________________________________DATE________________
NOTE: Please sign exactly as your name(s) appear hereon, and when signing as attorney, executor,
administrator, trustee or guardian, give your full title as such. If the signatory is a
corporation, sign the full corporation name by a duly authorized officer.
</TABLE>
<PAGE> 48
TRANS WORLD AIRLINES, INC.
FOR SHARES OF COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated April
, 1996, and does hereby appoint William O'Driscoll and Myron
Kaplan, and each of them, with full power of substitution as proxies
and attorneys-in-fact on behalf and in the name of the undersigned
to represent the undersigned and to vote all shares of Trans World
Airlines, Inc. Common Stock which the undersigned would be entitled
to vote if personally present at the Annual Meeting of Stockholders
of Trans World Airlines, Inc. to be held at the Americas Center, 801
Convention Plaza, St. Louis, Missouri, 63101, at 10:00 a.m. local
time, on May 21, 1996, and at any adjournment(s) thereof.
PLEASE COMPLETE, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
This Proxy, when properly executed, will be voted in accordance
with the directions given by the undersigned stockholder. If no
direction is made, it will be voted in favor of Proposals 1-4.
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE
<PAGE> 49
<TABLE>
<CAPTION>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
NOMINEES: THOMAS H. JACOBSEN
JAMES A. LAWRENCE
THOMAS F. MEAGHER AND
G. JOSEPH REDDINGTON
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C>
1. PROPOSAL 1: [ ] [ ] 2. PROPOSAL 2: Approval of [ ] [ ] [ ]
Election of Amendment and Restatement of
Class III Second Amended and Restated
Director. Certificate of Incorporation
3. PROPOSAL 3: Approval of [ ] [ ] [ ]
For, except vote withheld from the following nominee(s): Amendment of Article Ninth of
________________________________________________________ Second Amended and Restated
Certificate of Incorporation
4. PROPOSAL 4: Ratification of [ ] [ ] [ ]
KPMG Peat Marwick LLP as
Independent Accountants
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES".
SIGNATURE__________________________________________________________DATE________________
SIGNATURE__________________________________________________________DATE________________
NOTE: Please sign exactly as your name(s) appear hereon, and when signing as attorney, executor,
administrator, trustee or guardian, give your full title as such. If the signatory is a
corporation, sign the full corporation name by a duly authorized officer.
</TABLE>
