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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM 10-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-7815
TRANS WORLD AIRLINES, INC.
(Exact name of registrant as specified in its charter.)
DELAWARE 43-1145889
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization.) Identification Number.)
ONE CITY CENTRE
515 NORTH 6TH STREET
ST. LOUIS, MISSOURI 63101
(Address of principal executive offices, including zip code.)
(314) 589-3000
(Registrant's telephone number, including area code.)
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- - ------------------------------------------- -----------------------------------------
<S> <C>
Common Stock, par value $.01 per share American Stock Exchange
Warrants (expiring August 23, 2002) American Stock Exchange
11 1/2% Senior Secured Notes due 2004 American Stock Exchange
11 3/8% Senior Notes due 2006 American Stock Exchange
11 3/8% Senior Secured Notes due 2003 American Stock Exchange
10 1/4% Senior Secured Notes due 2003 American Stock Exchange
Series A Participating Cumulative Preferred
Stock Purchase Rights American Stock Exchange
</TABLE>
_____________
Securities registered pursuant to Section 12(g) of the Act:
(Title of Class)
8% Cumulative Convertible Exchangeable Preferred Stock, par value $.01
per share
9 1/4% Cumulative Convertible Exchangeable Preferred Stock, par value
$.01 per share
8% Secured Notes due 2001
Warrants (expiring April 1, 2002)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months; and (2) has been
subject to such filing requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. / /
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes /X/ No / /
The aggregate market value of voting stock held by non-
affiliates of the registrant as of February 28, 1999, $356,540,268.
As of February 28, 1999, 58,252,305 shares of the
registrant's Common Stock, par value $0.01 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Definitive Proxy Statement for the Annual Meeting of Stockholders on May
25, 1999 - Part III
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PART I
ITEM 1. BUSINESS
Trans World Airlines Inc. ("TWA" or the "Company") is a Delaware
corporation organized in 1978 and is the successor to the business of
its predecessor corporation, Transcontinental & Western Air, Inc.,
originally formed in 1934. The Company's principal executive offices are
located at One City Centre, 515 N. Sixth Street, St. Louis, Missouri
63101 and its telephone number is (314) 589-3000.
TWA is the eighth largest U.S. air carrier (based on revenue
passenger miles ("RPMs") for the full-year 1998), whose primary business
is transporting passengers, cargo and mail. During 1998, the Company
carried approximately 23.9 million passengers and flew approximately
24.4 billion RPMs. As of December 31, 1998, TWA provided regularly
scheduled jet service to 93 cities in the United States, Mexico, Europe,
the Middle East, Canada and the Caribbean. As of December 31, 1998, the
Company operated a fleet of 185 jet aircraft.
RECENT DEVELOPMENTS
On March 16, 1999, TWA announced that effective at the Annual
Meeting of Shareholders on May 25, 1999, William F. Compton, currently
president and chief operating officer, will become chief executive
officer, retaining the title of president. Gerald L. Gitner, currently
chairman of the board of directors and chief executive officer, will
continue as chairman of the board and will assume the additional role of
chairman of the board's executive committee and will focus on leading
TWA's strategic planning initiatives, including alliance development,
aircraft acquisition and financings. On March 23, 1999, TWA elected
Michael J. Palumbo, formerly Senior Vice President and Chief Financial
Officer, as Executive Vice President and Chief Financial Officer.
NORTH AMERICAN ROUTE STRUCTURE
TWA's North American operations have a hub-and-spoke structure,
with a primarily domestic hub in St. Louis at Lambert International
Airport ("St. Louis") and a domestic-international gateway at New York's
John F. Kennedy International Airport ("JFK"). The North American system
serves 36 states, Puerto Rico, Mexico, Canada and the Caribbean. The JFK
and St. Louis systems are designed to allow TWA to support both its
North American and transatlantic connecting flights. During 1998, TWA's
North American passenger revenues accounted for approximately 88.5% of
its total passenger revenues versus approximately 85.9% during 1997.
TWA is the predominant carrier at St. Louis, with approximately
357 scheduled daily departures as of December 31, 1998 serving 78
cities. In 1998, TWA had approximately a 76% share of airline passenger
enplanements in St. Louis, excluding commuter flights, while the next
largest competitor enplaned approximately 13%.
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TWA serves 27 domestic and international cities from JFK, with
approximately 40 daily departures. JFK is both the Company's and the
industry's largest international gateway from North America. The Company
offers non-stop flights from JFK to seven cities in Europe and the
Middle East as well as 18 destinations in the U.S. and the Caribbean.
TWA coordinates operation of its commuter feed into St. Louis and
JFK with Trans States Airlines, Inc. ("Trans States"). Trans States, an
independently owned regional commuter carrier, currently operates
approximately 155 daily flights into St. Louis and 56 flights into JFK.
Trans States' operations are coordinated to feed TWA's North American
and international flights. Management believes that these commuter
operations are an important source of traffic into the Company's
domestic and international route networks.
INTERNATIONAL ROUTE STRUCTURE
TWA's international operations consist of both nonstop and through
service from JFK and St. Louis to destinations in Europe and the Middle
East. TWA's international operations are concentrated at JFK, where
TWA's system is primarily designed to provide domestic traffic feed for
its transatlantic service. International cities served include:
Barcelona, Cairo, Lisbon, Madrid, Milan, Riyadh, Rome and Tel Aviv from
JFK; Paris from JFK and St. Louis; and London-Gatwick from St. Louis. In
1997, as part of its plans to improve the operating and financial
performance of its international operations, the Company discontinued
service on certain European routes, including JFK to Frankfurt, JFK to
Athens and Boston to Paris, as well as non-stop feed service to JFK from
several domestic cities. In 1998, TWA's international passenger revenues
accounted for approximately 11.5% of total revenues versus approximately
14.1% in 1997.
TWA continues to explore opportunities for entering into marketing
and code-share alliances with foreign carriers. Such alliances allow TWA
to provide its passengers with extended service to foreign destinations
not served directly by TWA, while feeding TWA's North American
operations from these foreign destinations.
TWA and Royal Jordanian Airline have a code-share agreement that
calls for the joint coding of TWA domestic flights between certain U.S.
cities and JFK and of Royal Jordanian Airline's direct flights between
JFK and Amsterdam and cities in the Middle East and Persian Gulf area.
TWA also has a code-share agreement with Royal Air Maroc, Morocco's flag
carrier, pursuant to which Royal Air Maroc sells seats with its code on
TWA flights between JFK and certain U.S. cities and TWA sells seats with
its code on Royal Air Maroc flights between JFK and Casablanca and
certain other African cities.
TWA and Air Ukraine signed a code-share agreement in 1997. TWA
will place its code on Air Ukraine flights between Paris and Kiev,
Ukraine. Air Ukraine will place its code on TWA flights between JFK and
Paris. This service has been temporarily deferred pending the
resolution of minor technological problems and is expected to commence
in mid-1999.
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BUSINESS STRATEGY
TWA operates in a highly competitive, capital-intensive industry
in which small fluctuations in revenue per available seat mile ("RASM")
and cost per available seat mile ("CASM") can significantly affect TWA's
financial results. Its long-term viability depends, therefore, on its
ability to generate revenues, control costs and attract new capital.
Consequently, TWA seeks to improve operational reliability and
productivity, schedule integrity and overall product quality in order to
accomplish these goals. To that end, TWA has implemented and continues
to focus its efforts on the following key initiatives:
* modernizing its fleet;
* reducing costs and improving productivity;
* implementing revenue-enhancing marketing initiatives to
attract higher-yield travelers;
* implementing employee-related initiatives to reinforce TWA's
focus on operational performance; and
* optimizing TWA's route structure.
Since late 1996 when TWA began implementing these initiatives, it
has achieved several important milestones toward its goals, including:
* reducing the average age of its fleet from 19.0 years at
year-end 1996 to 16.2 years as of December 31, 1998;
* upgrading and implementing new services targeted at specific
segments of TWA's customer base;
* increasing operational reliability through improved on-time
performance; and
* increasing the use and efficiency of St. Louis and JFK.
The key elements of TWA's overall ongoing business strategy are outlined
below.
Fleet Upgrade and Simplification
TWA's fleet modernization plans seek to realize operating and
maintenance cost savings and increased productivity by replacing a
number of older, less efficient aircraft with more modern,
technologically advanced, twin-engine, two-pilot aircraft. These
changes are also intended to simplify TWA's fleet structure in order
to decrease overall crew training and aircraft maintenance costs
(although resulting in increased short-term transition crew training
costs). Additional efficiencies should be realized through increased
standardization of aircraft parts, supplies and cabin equipment that
must be inventoried throughout TWA's system. Despite the higher
capital costs associated with owning or leasing new and later model
aircraft, TWA believes that corresponding reductions in operating costs
will offset any increased costs in the long term. Management believes
this initiative will further improve TWA's operating performance while
allowing TWA to achieve Stage 3 compliance with the Airport Noise and
Capacity Act of 1990 (the "Noise Act") by the year 2000.
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Retirements. In the first quarter of 1997, as part of its efforts
-----------
to improve near-term operational reliability, TWA announced plans to
accelerate retirement of the 14 B-747s and the 11 L-1011s remaining in
its fleet as of December 31, 1996. All of the L-1011s were retired in
1997 and the B-747s were retired in February 1998.
During 1998, TWA retired six of its older B-727s, which it
replaced with MD-80s. TWA intends to retire additional B-727s and DC-9s
in 1999 in order to comply with Stage 3 requirements of the Noise Act.
Acquisitions. Since 1996, TWA has entered into agreements with
------------
the manufacturer to acquire a total of 27 B-757 aircraft. As of
December 31, 1998, TWA had taken delivery of 16 B-757 aircraft. Eleven
additional B-757 aircraft are scheduled for delivery in 1999 and 2000.
TWA took delivery of two B-767-300ER aircraft in early 1998. One
B-767-300ER aircraft is scheduled for delivery in 1999.
TWA also took delivery of nine late-model used MD-82s in 1997 and
early 1998.
Since 1996, TWA has entered into agreements with the manufacturer
to acquire a total of 39 new MD-83s. As of December 31, 1998, TWA had
taken delivery of 13 MD-83 aircraft. TWA expects to take delivery of the
remaining 26 MD-83 aircraft in 1999.
TWA expects these fleet replacements will offer improved range and
payload characteristics in state-of-the-art, environmentally friendly
new aircraft that should allow for the schedule frequency required by
the business traveler. Management believes these aircraft are
appropriately sized to the routes served and, by reducing TWA's reliance
on lower-yield feed traffic to fill capacity, have resulted in higher
load factors and improved yields. Further, TWA expects these newer,
twin-engine, two-pilot aircraft to provide efficiencies in fuel, flight
crew and maintenance expenses while reducing long-term pilot training
costs.
TWA announced in December 1998 that it had signed letters of
intent to acquire an additional 125 new aircraft: 50 Boeing 717-200
aircraft for delivery beginning in 2000, 50 Airbus A318 aircraft for
delivery beginning in 2003 and 25 Airbus "A320 Family" aircraft for
delivery beginning in 2005. In addition to these 125 firm orders, TWA
has taken options on an additional 50 Boeing 717s and an additional 75
"A320 Family" aircraft. The letters of intent include financing for all
the firm order aircraft. The terms of the purchase orders and related
financing are subject to further negotiation and the signing of
definitive agreements. These new aircraft would primarily replace
B-727, DC-9 and older MD-80 aircraft currently in TWA's fleet.
As a result of this fleet restructuring, TWA's mix of narrow-body
aircraft and wide-body aircraft shifted from approximately 80%/20% at
year-end 1996 to approximately 91%/9% at December 31, 1998, and the
average number of seats per aircraft declined from 161 to 137 over the
same period. The average age of TWA's fleet decreased from 19.0 years
at year-end 1996 to 16.2 years at December 31, 1998. Based on scheduled
deliveries through 1999, TWA expects the mix of narrow-body to wide-body
aircraft to equal approximately 92%/8% at December 31, 1999. The
average number of seats per aircraft is expected to equal approximately
145.3 over the same period. Finally, the average age of the fleet is
expected to decrease to approximately 11.3
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years by year-end 1999. Because of capital constraints, among other
reasons, however, there can be no assurance that fleet retirements and
new deliveries will occur as expected.
Cost and Efficiency Initiatives
Investment in Technology. Management believes significant
------------------------
opportunities exist for TWA to increase revenues and reduce costs by
investing in available technology that provides TWA and its employees
with the tools and knowledge necessary to operate its business more
effectively and to improve customer service. Late in 1995, TWA purchased
and began installing a sophisticated state-of-the-art yield management
system with the objective of maximizing passenger revenue through
effective control of the proportion of discount ticket sales. TWA
believes it has achieved most of the system's potential but that further
improvements are possible as operating skills improve. Additional
expansion of the system beyond the current segment-based structure to an
origin-and-destination-based structure offers further potential in 1999
and beyond.
In early 1996, TWA introduced an Internet web site, and in the third
quarter of 1997, TWA allowed customers to book flights and purchase
tickets via its web site. In the second quarter of 1996, TWA initiated
electronic ticketing and today it represents 47% of all tickets sold.
TWA expects that distribution cost will be reduced as travelers use on-
line booking vehicles to book flights and purchase electronic tickets.
In addition, TWA is implementing a number of programs to reduce computer
reservation systems booking fees, both internally and from travel
agents. These booking fees are separate transaction fees that are paid
in addition to any travel agent commission.
Effective Cost Controls. TWA's fleet restructuring has allowed
-----------------------
for the reduction of expenses associated with fuel consumption and
flight crew staffing. The transition from older fleet types like the
B-747, L-1011 and B-727 to new MD-83s and B-757s has increased flight crew
training costs in the near term, but these costs have begun to moderate
as a result of fewer fleet types and the elimination of the flight
engineer position in the cockpit (third cockpit crew member). Aircraft
maintenance costs have stabilized as TWA replaces older aircraft with
new aircraft and are expected to decline significantly over time as the
new aircraft become a larger proportion of the existing fleet.
The higher lease costs of the new aircraft have been the major
factor in TWA's increasing operating costs per available seat mile.
Improved employee productivity and below-market labor rates, however,
have enabled TWA to retain a cost structure near the industry average.
Management believes that it is essential to retain a low cost
structure while the airline transitions to the new fleet. At the same
time it recognizes the need to improve wage structures
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to remain competitive within industry labor markets. Therefore, the
focus in contract negotiations with labor groups has been to provide
increased wage scale rates in exchange for productivity improvements and
facility consolidation. The transition to new, more efficient aircraft
will help allow TWA to offset the higher aircraft lease costs while
maintaining a cost structure competitive with the industry.
Marketing Initiatives
TWA is focusing on improving the quality of its air travel product
and the appeal of the TWA brand. TWA believes that its increased focus
on quality, certain new marketing initiatives and the steps taken to
restore operational reliability and schedule integrity in 1997 and 1998
will allow TWA to attract a greater percentage of higher-yield
passengers. Ongoing initiatives include the following:
Facility Improvements. TWA has recently upgraded a series of
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facilities, including a newly opened Ambassadors Club in St. Louis, a
renovated club at LaGuardia, a completely refurbished club in its JFK
terminal and improved new check-in counters and backwalls. TWA is
installing a new electronic passenger and baggage processing system in
St. Louis.
Business Travelers. Based on customer research, TWA has targeted
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business travelers and is therefore tailoring its marketing and
advertising efforts to emphasize TWA's positioning as a full-service,
high-value airline providing branded service products to popular
business destinations throughout the United States. TWA believes that
its convenient flight schedules and connections, as well as its
centrally located hub at St. Louis, are important in providing service
that is attractive to these travelers.
In March 1995, TWA introduced Trans World One, a premium business
class service in its international and certain trans-continental
non-stop markets. This product has recently been enhanced and
relaunched with advertising and promotional support. Trans World One is
available in B-767 aircraft and in selected B-757 aircraft. Overall
service is being improved, including check-in, on-board comfort, food
service and priority baggage return.
TWA increased first class cabin seating in its narrow-body
domestic aircraft beginning in 1997 and is planning a series of airport
and in-flight enhancements. This domestic service was launched in early
1998 as Trans World First. In March 1998, TWA launched TWQ, a specially
designed service for short-haul business markets.
Leisure Travelers. Within the leisure travel market, TWA has
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positioned itself as a high-quality, competitive-fare carrier, and
management believes that TWA's cost structure and attractive route
system are a competitive advantage to it in this market. TWA's Getaway
Program, the original airline tour program, provides packaged tours to
the leisure traveler. TWA has relaunched this program with advertising
support in 1999.
Frequent Fliers. TWA has implemented several new initiatives to
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improve its frequent flier program. A platinum level was introduced in
the third quarter of 1997 to offer TWA's most
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attractive travel benefits for its highest mileage customers. Platinum
level travelers and travelers purchasing first class or full fare coach
tickets are given mileage bonuses equal to the base dollar amount paid
for their tickets, in addition to other existing bonuses. TWA rebranded
its frequent flier program named "Aviators" effective May 1, 1998. TWA
also joined the American Express Membership Rewards Program, allowing
members the opportunity to earn additional miles for amounts charged on
the American Express credit card.
Employee Initiatives
TWA has implemented programs through which it has sought to
institutionalize throughout all levels of its organization the
importance of running an airline with operational reliability and
schedule integrity. These programs provide certain operating and
procedural guidelines for enhancing performance and improving overall
product quality.
In addition, in 1996, TWA introduced Flight Plan 97, which paid
eligible employees a $65 bonus for each month that TWA finished in the
top five in all three performance categories tracked by the Department
of Transportation (the "DOT") (on-time performance, customer complaints
and baggage handling) and a total of $100 if TWA also ranked first in at
least one of these categories. Based on TWA's performance in September
1997, eligible employees earned a bonus under this program, a $100
payment for ranking first in on-time performance, fourth in customer
complaints and fifth in baggage handling. This program was enhanced as
Flight Plan 98 and provided that in any quarter where TWA placed first
in one of the DOT-tracked performance categories for the entire quarter
(and assuming that no bonus was paid to employees during that quarter)
the eligible employees would receive a $100 bonus. Eligible employees
received a $100 bonus for first place in on-time performance for the
fourth quarter 1998. As Flight Plan 99, the program currently provides
that $100 will be paid to eligible employees if TWA achieves an on-time
average of 85% or better and a completion factor of 99% or better for
the months of April through October, and an 80% or better on-time
average with 98% completion factor for the months of November through
March. Employees earned a bonus under the program in February 1999.
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Optimization of Route Structure
TWA has been optimizing its route structure by redeploying assets
to markets in which it believes it has a competitive advantage and
limiting its commitments in other markets.
TWA believes one of its greatest opportunities for improved
operating results will continue to come from focusing resources on its
hub at St. Louis in order to leverage its strong market position. TWA
already dominates operations at St. Louis; in 1998, approximately 76% of
airline passengers boarding from St. Louis, excluding commuter traffic,
boarded TWA flights. In addition, TWA enjoys certain advantages in the
Midwest due to its established route system, strong brand identity and
concentrated presence in that market. Because St. Louis is located in
the center of the country, it is well-suited to function as an
omni-directional hub for both north-south and east-west transcontinental
traffic. Therefore, TWA believes it is better positioned to offer more
schedule frequencies and connecting opportunities to many travelers in
its key Midwestern markets than competing airlines. To capitalize on
these advantages, TWA has consistently increased its number of daily
departures at St. Louis, from 229 in 1993 to approximately 357 as of
December 31, 1998. Since 1995, TWA has added service from its St. Louis
hub to a number of cities including Reno, Nevada; Knoxville, Tennessee;
Shreveport, Louisiana; Steamboat Springs, Colorado; Anchorage, Alaska;
Montego Bay, Jamaica; Toronto, Canada; Mexico City and the Mexican
resort cities of Cancun, Puerto Vallarta and Ixtapa/Zihuatenejo.
TWA's strategy has been to maximize utilization of the JFK
facility by building a gateway there as well as operating flights
designed for domestic service. As a result, TWA has increased service
from JFK to the Caribbean, Florida and to certain other domestic cities
to increase utilization of TWA's JFK facility, particularly during
off-peak time periods, and to provide feed traffic for its international
operations. In addition, TWA restructured its operations at JFK during
1997 by eliminating certain unprofitable international destinations
(such as Frankfurt and Athens), as well as certain low-yield domestic
feed service into JFK. TWA has consolidated its JFK operations into a
single terminal in order to reduce operating costs, increase facility
utilization and improve passenger service. In addition to enhancing
yields and load factors, the substitution of B-757s and B-767s for B-
747s and L-1011s on international routes also has increased operating
efficiencies and on-time performance at JFK, since these smaller
aircraft are better suited to the physical limitations of TWA's
terminal. As a result of these changes, TWA's international scheduled
capacity (as measured by available seat miles) decreased by 20.2% during
1998 from 1997, and represented 16.4% of total scheduled capacity in
1998 as compared to 19.5% in 1997. TWA believes that this decrease in
international operations also will help deseasonalize TWA's business.
TRAVEL AGENCIES
Travel Agent Commissions
Consistent with most other airlines, TWA sells its tickets
directly and through travel agents. During 1998, approximately 76% of
all ticket sales on TWA were sold by travel agents.
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Until October 2, 1997, TWA paid a 10% commission on domestic tickets sold
by independent travel agents without the cap of $50 and $25 per domestic
round-trip and one-way tickets, respectively, which most other major
airlines imposed in 1995, and paid an 11% commission on international
tickets. On October 2, 1997, TWA reduced its commission on domestic and
international tickets to 8% and 10%, respectively, without the cap
imposed by most of the major airlines. On May 11, 1998, TWA began
paying a maximum travel agent commission of $50 per round-trip and $25
for one-way tickets for domestic travel, as does most of the Industry,
and 8% for international travel with no commission cap. In addition,
Internet vendors receive a 5% commission with a maximum payment of $10.
TWA pays a 9% commission for tickets issued outside the United States.
Carriers (including TWA) may also pay additional commissions to travel
agents as incentive for increased volume or other business directed to
the carrier.
Automation of Travel Bookings
More than 90% of all travel agencies in the United States obtain
their airline travel information through access to global distribution
systems (also referred to as computerized reservation systems). These
systems are used by travel agents to make travel reservations including
airline, hotel, train, car and other bookings and allow travel agents to
issue airline tickets and boarding passes. One such system is
Worldspan, which is owned by a partnership in which affiliates of TWA,
Delta Air Lines and Northwest Airlines have interests of approximately
26%, 40% and 34%, respectively. Management believes that its
participation in Worldspan has given it direct access to an efficient
distribution system. Worldspan continues to expand its offering and
coverage, further benefiting TWA.
TWA will continue to increase the methods and efficiency of
distributing its product through a variety of channels and systems,
including increasing use of electronic ticketing and direct booking
through the Internet.
FREQUENT FLYER PROGRAM: "AVIATORS"
TWA initiated its frequent flyer program in May 1981. Frequent
flier programs like TWA's Aviators have been adopted by most major air
carriers and are considered the number one marketing tool for developing
brand loyalty among travelers and accumulating demographic data
pertaining to business fliers.
TWA accounts for its frequent flyer program under the incremental
cost method, whereby travel awards are valued at the incremental cost of
carrying one additional passenger. These costs are accrued when
Aviators participants accumulate sufficient miles to be entitled to
claim award certificates. Incremental costs include passenger food,
beverages and supplies, fuel and liability insurance expenses incurred
on a per passenger basis. No profit or overhead margin is included in
the accrual for incremental costs. TWA does not record a liability for
airline, hotel or car rental award certificates that are to be honored
by other parties because there is no cost to TWA for these awards.
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At December 31, 1998, participants in TWA's frequent flyer program
had accumulated mileage credits for approximately 1,107,768 free awards,
compared with accumulated mileage credits for approximately 938,319 free
awards at December 31, 1997. TWA's customers redeemed free awards
representing approximately 5.4% and 4.5% of TWA's revenue passenger
miles in 1998 and 1997, respectively. Because TWA expects that some
award certificates will never be redeemed, the calculations of the
accrued liability for incremental costs at December 1998 and 1997 were
based on approximately 68.6% and 63.0%, respectively, of the accumulated
credits. The accrued liability at December 31, 1998 was approximately
$16.0 million compared to approximately $19.6 million at December 31,
1997. Mileage for Aviators participants who have accumulated less than
the minimum number of mileage credits necessary to claim a free award is
excluded from the calculation of the accrual.
AIRCRAFT FUEL
TWA uses more than 20 different suppliers to fulfill its worldwide
aircraft fuel requirements. TWA has contracts with some of these
suppliers, the terms of which vary as to price, payment terms,
quantities and duration. TWA also makes incremental purchases of fuel
based on price and availability. To assure adequate supplies of jet
fuel and to provide a measure of control over price, from time to time,
TWA trades fuel, ships fuel, hedges against significant increases in jet
fuel prices and maintains fuel storage facilities to support key
locations. Commencing in September 1998, TWA has entered into future
jet fuel fixed price swaps with respect to a minor portion of its fuel
requirements during 1999 to provide a hedging mechanism against significant
increases in jet fuel prices.
Petroleum product prices, including jet fuel, are primarily driven
by crude oil costs. The market's alternate uses of crude oil to produce
petroleum products other than jet fuel (e.g., heating oil and gasoline)
as well as the adequacy of refining capacity and other supply
constraints affect the price and availability of jet fuel. Changes in
the price or availability of fuel could materially affect the financial
results of TWA.
During 1996, aircraft fuel prices increased significantly;
however, these prices declined moderately during 1997 and significantly
in 1998. The following table details TWA's fuel consumption and costs
for the three years ended December 31, 1998, 1997 and 1996:
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<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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1998 1997 1996
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<S> <C> <C> <C>
Gallons consumed (in millions) 675.8 730.3 838.9
Total cost <F1> (in millions) $344.6 $480.9 $585.2
Average cost per gallon 51 cents 66 cents 70 cents
Percentage of operating expenses 10.4% 14.3% 15.6%
<FN>
_______________
<F1> Excludes into-plane fees.
</TABLE>
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COMPETITION
General
Since the passage of the Airline Deregulation Act of 1978, the
airline industry has been characterized by intense competition,
resulting in consolidation of existing carriers, the formation of
international and domestic alliances and the advent of numerous
low-cost, low-fare new entrants. While DOT authority is required before
any person may operate as an air carrier within or to and from the
United States, the Airline Deregulation Act of 1978 and the
International Air Transportation Competition Act of 1979 substantially
decreased previous governmental restrictions in this area. TWA's
services are subject to varying degrees of competition, depending in
part on whether these services are operated over domestic or
international routes.
Airlines offer discount fares, a wide range of schedules, frequent
flier mileage programs and ground and in-flight services as competitive
tools to attract passengers and increase market share. Intense price
competition has accelerated the efforts of airline managements to reduce
costs and improve productivity in order to withstand greater levels of
discounting. A number of airlines have filed for bankruptcy and/or
ceased operations as a result of this competition. Many of the major
U.S. carriers have announced plans for alliances with other major U.S.
carriers, which could further intensify the competitive environment.
Domestic
In the case of domestic operations, any person who is found to be
fit, willing and able may operate as an air carrier between any two
points in the United States. Existing airlines are able to enter new
routes or suspend existing routes within the United States without
seeking regulatory approval. Because of the relative ease with which
U.S. carriers can enter new domestic markets, TWA's domestic services
are subject to increases or decreases in competition from other air
carriers. In addition, the airline industry faces substantial price
competition as U.S. airlines are free to determine domestic pricing
policies without government regulation. Several carriers have
introduced or announced plans to introduce low-cost, short-haul jet
service, which may result in increased competition to TWA. Changes in
intensity of competition in the deregulated domestic environment cannot
be predicted.
The rapid growth of regional jet airline affiliates represents a
significant competitive challenge for TWA due to its reliance on through-
hub passenger traffic. A small regional jet can now offer direct service
in markets that previously were served only by through-hub service. TWA's
current IAM contracts limit TWA from directly competing with regional
jets in these markets.
International
The level of competition in international markets is normally
governed by the terms of bilateral agreements between the United States
and the foreign countries involved. Many of the bilateral agreements
permit an unlimited number of carriers to operate between the United
States and the foreign country. Competition in some international
markets is limited to a specified number of carriers and flights on a
given route by the terms of the air transport agreements between the
United States and the foreign country. See "Regulatory Matters." While
the DOT retains authority over international fares, which are also
subject to the jurisdiction of the governments of the foreign countries
being served, TWA generally has substantial discretion with respect to
its international pricing policies.
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EMPLOYEES
As of December 31, 1998, TWA had 21,261 full-time employees (based
upon full-time equivalents, which include part-time employees).
1992 Labor Agreements
In its 1992 labor agreements, TWA agreed to pay to employees
represented by the International Association of Machinists and Aerospace
Workers (the "IAM") a cash bonus for the amount by which overtime
incurred by the IAM from September 1992 through August 1995 was reduced
below specified thresholds. This amount was to be offset by the amount
by which medical savings during the period for the same employees did
not meet certain specified levels. TWA and the IAM agreed in 1998 that
the net overtime bonus owed to the IAM is $25.5 million, which amount
TWA previously provided for and reflected as a liability in its
financial statements. The obligation is payable in three equal annual
installments, and TWA made the first payment on October 15, 1998. TWA
had entered into agreements subsequent to the 1992 labor agreements that
provide for an adjustment to existing salary rates of certain labor-
represented employees based on the amount of the cash bonus for overtime
to the employees represented by the IAM as described in this paragraph.
These adjustments equated to a 4.814% increase that management made
effective for all employee groups on September 1, 1998, except for
pilots whose contract provided for separate increases also effective
September 1, 1998 and the officers of TWA who did not receive the
increase. Management intends that the 4.814% salary adjustments will be
part of any percentage increase that would be incorporated in contract
amendments currently being negotiated.
1994 Labor Agreements
TWA entered into three-year labor agreements with the Air Line
Pilots Association ("ALPA"), the IAM and the Independent Federation of
Flight Attendants ("IFFA") in 1994, which amended the then existing
labor agreements with each such union. Among other things, these
amendments (1) eliminated certain raises scheduled to take effect in
1994 and 1995, thereby continuing certain wage and benefit concessions
granted to TWA in its 1992 labor agreements, (2) modified existing work
rules and benefit packages, and (3) eliminated contractual "snapback"
provisions that would have automatically restored wages to
pre-concessionary levels for purposes of future contract negotiations.
The terms of the 1994 IFFA contract remain in effect, although the
flight attendants are now represented by the IAM. In addition, TWA
implemented in 1994 and 1995 a number of similar savings initiatives
with respect to domestic non-union and management employees, primarily
through reducing headcount, altering benefit packages, and eliminating
certain planned restorations of previous wage concessions. In exchange
for the substantial cost savings realizable by TWA as a result of the
1994 labor agreements, TWA agreed to certain concessions described
below.
Wage Increases. As part of the 1994 labor agreements, TWA agreed
--------------
with its unionized employees to a series of semi-annual 1% wage
increases commencing in May 1995 and
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continuing through August 31, 1997. The last such wage increase equaled
3% in the case of employees represented by ALPA and IFFA, and the IAM
employees received a 1% wage increase and a 2% contribution to its
retirement plan on August 31, 1997.
Issuance of Equity Securities. On the effective date of the 1995
-----------------------------
reorganization, TWA issued 6,425,118 shares of three separate series of
employee preferred stock ("Employee Preferred Stock") to trusts
established for its unionized employees. Except for certain rights with
respect to the election of directors and the fact of being held in a
trust, the Employee Preferred Stock has rights substantially identical
to TWA's common stock. TWA also issued an aggregate of 1,026,694 shares
of common stock to a trust established for the benefit of certain of
TWA's other employees. The value of shares issued to TWA's non-union
employees was intended to reflect the estimated value to TWA of the
concessions granted by these employees.
Future Grants. In recognition of the fact that the percentage of
-------------
TWA's stock owned by TWA's employees was substantially reduced in the
1995 reorganization, TWA adopted the Employee Stock Incentive Plan
("ESIP") as part of the 1995 reorganization. The ESIP requires TWA,
from 1997 through 2002, to make grants of additional shares of common
stock and Employee Preferred Stock to certain trusts established for the
benefit of its union and non-union employees if certain conditions are
met. The ESIP requires TWA to make a grant on July 15 of each year if
the average market closing price of the common stock for 30 consecutive
trading days has exceeded a target price for such year set forth in the
ESIP. Each grant is cumulative: if the applicable target price is not
met in the initial grant year, the applicable grant is carried forward
and may be granted in future years (up to July 15, 2002) in which the
average market closing price of the common stock exceeds the target price
before July 15 of that year. The ESIP provides for an increase to these
grants to protect against the dilutive effect of certain stock issuances
by TWA. In addition, a stock purchase trustee of a special purpose trust
to be established has the right under the ESIP through July 15, 2002 to
purchase additional shares of Employee Preferred Stock in amounts up to a
total of 2% of the combined total number of outstanding shares of common
stock and Employee Preferred Stock, at a discount of 20% from the then
current market price. If all of the target prices are met or exceeded
within the time periods specified and if the entire discount stock purchase
option is exercised, the various employee stock trusts will receive a total
of 10% of TWA's outstanding common stock, with the exact amount issued
dependent upon the number of shares outstanding as of the date of each grant
and option exercise.
The ESIP separately provides that following the distribution by TWA of
additional shares of Employee Preferred Stock or common stock in respect of
the 1995 reorganization, TWA would issue an additional number of shares of
Employee Preferred Stock and common stock to permit employees to retain the
same level of ownership initially granted to them based on a formula. Union
representatives and TWA agreed to a one-time distribution in 1997 pursuant
to this provision of the ESIP of a total of 525,856 shares of Employee
Preferred Stock and common stock. As part of that agreement, TWA also
issued an additional 405,750 shares of Employee Preferred Stock and common
stock to the employee trusts. TWA received a credit for this issuance of
shares against its July 15, 1998 grant under the ESIP.
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The first two ESIP target prices were realized on February 17,
1998 and March 4, 1998, respectively, and as a result, TWA issued an
additional 2,377,084 shares (net of the credit of 405,750 shares
discussed in the preceding paragraph) of Employee Preferred Stock on
July 15, 1998 to satisfy the 1997 and 1998 ESIP grant amounts. TWA
recorded non-cash charges of $26.5 million and $1.0 million in the first
and third quarters of 1998, respectively, in connection with this
issuance. If the ESIP's remaining target prices of $13.31, $14.64,
$16.11 and $17.72 are realized for the years 1999 to 2002, respectively,
the minimum aggregate non-cash charge for the years 1999 to 2002 will be
approximately $103.4 million based upon these target prices and the
number of shares of common stock and Employee Preferred Stock
outstanding at December 31, 1998. The non-cash charge for any year,
however, could be substantially higher if the then market price of TWA's
common stock exceeds certain target prices.
Governance. In addition to certain amendments required to effect
----------
the recapitalization of TWA, on the effective date of the 1995
reorganization, TWA further amended its certificate of incorporation and
by-laws to include provisions that allow certain corporate actions
requiring board approval, including mergers, consolidations and sale of
all or substantially all the assets of TWA, to be blocked by a vote of
six (four union-elected directors and two other directors) of TWA's 15
directors, who together constitute a "blocking coalition." Actions
subject to disapproval by the blocking coalition include:
* any sale, transfer or disposition, in a single or series of
transactions, of at least 20% of TWA's assets, except for
transactions in the ordinary course of business, including
aircraft transactions as part of a fleet management plan;
* any merger of TWA into or with, or consolidation of TWA
with, any other entity;
* any business combination within the meaning of Section 203
of the Delaware General Corporation Law;
* any dissolution or liquidation of TWA;
* any filing of a petition for bankruptcy, reorganization or
receivership under any state or federal bankruptcy,
reorganization or insolvency law;
* any repurchase, retirement or redemption of TWA's capital
stock or other securities prior to their scheduled maturity
or expiration, except for redemptions out of the proceeds of
any substantially concurrent offering of comparable or
junior securities and mandatory redemptions of any
redeemable preferred stock of TWA;
* any acquisition of assets, not related to TWA's current
business as an air carrier, in a single transaction or a
series of related transactions exceeding $50 million
adjusted annually by the consumer price index; or
* any sale of TWA's capital stock or securities convertible
into capital stock of TWA to any person if (1)at the time of
issuance or (2)assuming conversion of all outstanding
securities of TWA convertible into capital stock, such
person or entity would beneficially own at least 20% of the
capital stock of TWA.
At all times before September 1, 2000, the Company must obtain the
approval of at least two-thirds of the issued and outstanding Voting
Stock of the Company, voting as a single class and not as separate
classes, for the holders of such Voting Stock to approve certain actions,
unless such matters have been approved by a vote of at least 80% of the
Board of Directors then in office. Actions requiring such approval are
the following:
* any merger of the Company into or with, or consolidation of
the Company with, any other entity;
* any business combination within the meaning of Section 203 of
the Delaware General Corporation Law;
* any dissolution or liquidation of the Company; or
* any repurchase, retirement or redemption of the Company's capital
stock or other equity securities prior to their scheduled maturity
or expiration, except for redemptions out of the proceeds of
any substantially concurrent offering of comparable or junior
securities, and mandatory redemptions of any redeemable preferred
stock of the Company.
15
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1998 ALPA Agreement
The 1994 labor agreements became amendable after August 31, 1997
and negotiations on a new collective bargaining agreement with ALPA
commenced in June 1997. TWA reached agreement with ALPA that became
effective on September 1, 1998.
As part of the new contract with ALPA, TWA agreed to pay increases
over the next four years that will result in wages for TWA's pilots
improving by 2002 to 90% of the industry average as determined by wage
rates in contracts in effect as of August 1998. The contract also
provides for significant work rule improvements for pilots in certain
areas while also granting TWA flexibility and improvements necessary to
enhance its competitive position.
TWA also may issue shares to employees under the terms of its new
contract with ALPA. The new ALPA contract requires TWA to distribute
either one million shares of TWA's common stock or $11 million in cash
to ALPA members, in four equal quarterly payments commencing in 1999.
TWA has the option to make each quarterly payment in shares or in cash.
Other Labor Agreements
TWA reached agreement with the International Brotherhood of
Teamsters on a new collective bargaining agreement in August 1998. The
contract calls for substantial increases in pay and benefits over the
life of the contract improving by 2002 to 90% of the industry average as
determined by wage rates in contracts in effect as of August 1998. TWA
also reached agreement with the Transport Workers Union on a new
collective bargaining agreement in March 1999. Among other benefits,
the contract provides for increases in wages improving by 2003 to 93% of
the industry average as determined by wage rates in contracts in effect
as of March 1999.
Ongoing Negotiations
TWA is currently engaged in negotiations with its flight
attendants and ground employees, which constitute approximately 73% of
TWA's employees as of December 31, 1998, on new collective bargaining
agreements, as the existing agreements became amendable as of August 31,
1997. TWA and the IAM commenced negotiations on new collective
bargaining agreements for the ground employees in February 1997 and for
the flight attendants in July 1997. Under the Railway Labor Act,
workers whose contracts have become amendable are required to continue
to work under the "status quo" (i.e., under the terms of employment
existing before the amendable date) until they exhaust the Railway Labor
Act's procedures. Under the Railway Labor Act, TWA and the IAM must
continue face-to-face bargaining until an agreement is reached or until
at least one of the parties petition the National Mediation Board (NMB)
to appoint a mediator. If the mediator concludes that negotiations are
deadlocked, the mediator must attempt to induce the parties to agree to
arbitrate the dispute. If either party refuses to arbitrate, then the
mediator must notify the parties that the mediator's efforts have failed
and, after a thirty day cooling off period if agreement has not been
reached, the parties may strike or take other direct action. At the
request of the IAM, the NMB appointed a mediator on August 6, 1997 with
respect to ground employees represented by the IAM. On March 27, 1998,
at the request of the IAM, the NMB appointed a mediator with respect to
the flight attendants
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represented by the IAM. Negotiations are continuing under the oversight
of the NMB. TWA expects new agreements with these employees will likely
result in additional increases in wage rates. TWA believes it is essential
that its labor costs remain favorable in comparison to its largest
competitors. TWA will seek to continue to improve employee
productivity as an offset to any wage increases.
REGULATORY MATTERS
Slot Restrictions
TWA's ability to increase its level of operations at certain
domestic cities currently served is affected by the number of slots
available for take-offs and landings. At JFK, LaGuardia, Chicago O'Hare
and Ronald Reagan Washington National airports, which have been
designated "high density airports" by the Federal Aviation
Administration (the "FAA"), there are restrictions on the number of
aircraft that may land and take-off during peak hours. In the future,
these take-off and landing time slot restrictions and other restrictions
on the use of various airports and their facilities may result in
further curtailment of services by, and increased operating costs for,
individual airlines, including TWA, particularly in light of the
increase in the number of airlines operating at these airports.
In 1986, the FAA implemented a final rule relating to allocated
slots at the high density airports. This rule, as since amended,
contains provisions requiring the relinquishment of slots for nonuse and
permits carriers, under certain circumstances, to sell, lease or trade
their slots to other carriers. TWA does not anticipate losing any slots
as a result of these new rules; however, the higher use rates required
by these rules do increase the risk that TWA might lose slots in the
future because of nonuse and decrease TWA's ability to adjust its flight
schedules at the high density airports.
Legislation is currently pending before Congress which would
eliminate the slots at JFK, LaGuardia and O'Hare airports at a date in
the future. TWA's slots at these airports are currently encumbered and
are used as collateral for certain of TWA's debt securities. If such
legislation is enacted with an effective date prior to the maturity of
such debt, TWA could be required to substitute collateral to replace the
affected slots. TWA has stated its opposition to this legislation and,
at this time, TWA cannot predict whether the proposals will be implemented
or its effect on TWA.
Most transatlantic points served by TWA also are slot-controlled.
Control Over International Routes
TWA's international authority is granted by the DOT for indefinite
or fixed-term periods, depending on the route. TWA is authorized to
provide transatlantic service from major cities in the United States to
points in Europe, North Africa, the Middle East and Asia. Some of these
authorized routes are not currently served by TWA. Many of the European
markets served by TWA are "limited entry" markets in which, as a result
of agreements between the United States and foreign governments, TWA has
traditionally competed with a limited number of other carriers. During
the past several years, however, the U.S. government has encouraged
competition in international markets and entered into bilateral
agreements with various foreign governments that provide for expanded
exchanges of routes and traffic rights, reduction of governmental
controls over fares and avoidance of limits on capacity and charter
services. Competition in international markets has increased
dramatically over the past several years as major U.S. carriers have
initiated and/or continued to expand their international operations.
Foreign flag carriers have continued to expand service and the DOT has
indicated its support for further expansion of opportunities of foreign
carriers to serve new points in the United States.
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No assurance can be given that TWA will continue to have the advantage
of all the "limited entry" markets in which it currently operates, that
additional carriers will not be permitted to operate in one or more of
these markets or that TWA in general will not face substantial
unexpected competition. Competition in the international market is
further complicated by the fact that pricing levels on some
transatlantic routes are influenced by subsidies that certain foreign
carriers receive from their governments and by the presence of smaller,
low-cost carriers.
The operations of TWA's international system will require
continued approval by the U.S. government as well as permission or
authorization from the governments of the respective countries served
and compliance with the laws and regulations of those countries. These
authorizations, permits and rights vary considerably in their terms,
particularly as to the imposition of restrictive conditions on U.S.
airlines.
Other Transportation Regulations
Additional laws and regulations have been proposed from time to
time that could significantly increase the cost of airline operations
by, for instance, imposing additional requirements or restrictions on
operations and therefore increasing operating expenses. For example,
several airports have recently sought to increase substantially the
rates charged to airlines, and federal legislation, DOT resolutions and
judicial decisions have restricted the ability of airlines to contest
these increases. The DOT has the authority to regulate competitive
practices, advertising and other consumer protection matters such as
on-time performance, smoking policies, denied boarding, baggage
liability and computerized reservation systems provided to travel
agents. With respect to foreign air transportation, the DOT may approve
agreements between air carriers and grant antitrust immunity to those
agreements. The DOT must also approve the transfer between U.S.
carriers of international route certificates. The U.S. Department of
Justice has the authority to approve mergers and interlocking
relationships between air carriers.
Noise Abatement
The Noise Act provides for a reduction in aircraft noise levels by
commercial aircraft. Under the Noise Act, air carriers were permitted
to elect to comply with the transitional requirements of the Noise Act
at December 31, 1994, either by (1)phasing out, or retrofitting with
noise abatement equipment, certain older aircraft known as Stage 2
aircraft, or (2)phasing in quieter aircraft, known as Stage 3 aircraft.
Air carriers who elected to comply by phasing out or retrofitting Stage 2
aircraft were required to phase out or retrofit at least 25% of a
specified 1990 base level of these aircraft by December 31, 1994 and at
least 50% by December 31, 1996. TWA elected to comply with the
transition requirements of the Noise Act by adopting the Stage 2
aircraft phase-out/retrofit option, which required that 50% of its base
level (December 1990) Stage 2 fleet be phased-out/retrofitted by
December 31, 1996. To comply with the 1996 requirement, TWA
retrofitted, by means of engine hushkits, 30 of its DC-9 aircraft at an
aggregate cost of approximately $55.5 million, most of which was
financed by lessors with repayments being facilitated through increased
rental rates or lease term extensions. TWA has complied with the
transition requirements for December 31, 1998 by having 75% of its fleet
meet
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Stage 3 requirements through the grounding of older Stage 2 aircraft in
combination with the acquisition of Stage 3 aircraft. By December 31,
1999, 100% of the fleet must meet Stage 3 requirements.
TWA's ability to comply with the federal requirements within the
time specified, or with more restrictive local noise restrictions, by
acquiring newer aircraft and by phasing out or retrofitting older
aircraft that are not in compliance with the Stage 3 standards, will
depend upon its ongoing financial condition, its ability to
renegotiate existing leases for these aircraft and its ability to
obtain financing to acquire the requisite number of Stage 3 aircraft
or retrofit kits. TWA is considering "hushkitting" additional
aircraft as well as other alternatives to assure compliance with Stage
3 noise requirements, and has already acquired a number of Stage 3
aircraft while phasing out several Stage 2 aircraft. However, there
can be no assurance that TWA will be able to satisfy all applicable
noise level requirements.
Numerous airports have imposed restrictions such as curfews,
airplane noise levels, mandatory flight paths and runway restrictions,
which limit the ability of TWA and other carriers to increase services
at these airports. Other jurisdictions are considering similar
measures. While TWA has historically had the flexibility to schedule
around these restrictions, there can be no assurance that TWA will
continue to be able to work around these restrictions. The FAA and air
carriers, including TWA, have stated their opposition to such proposals.
At this time, TWA cannot predict what additional restrictions will be
implemented or, if so, the timing or effect on TWA of any such
implementation. The effect on TWA would depend on the extent to which
TWA's aircraft then being used in the affected airports meet the Stage
3 or more stringent local requirements as well as the timing of TWA's
flights.
Labor
The Railway Labor Act governs the labor relations of employers and
employees engaged in the airline industry. Comprehensive provisions are
set forth in the Railway Labor Act establishing the right of airline
employees to organize and bargain collectively along craft or class
lines and imposing a duty on air carriers and their employees to exert
every reasonable effort to make and maintain collective bargaining
agreements. (See "Employees") The Railway Labor Act contains detailed
procedures that must be exhausted before a lawful work stoppage can
occur. Pursuant to the Railway Labor Act, TWA has collective bargaining
agreements with four domestic unions that together represent
approximately 85% of TWA's employees.
Aging Aircraft Maintenance
The FAA issued several Airworthiness Directives ("ADs") in 1990
mandating changes to maintenance programs for older aircraft to ensure
that the oldest portion of the nation's fleet remains airworthy. The
FAA required that these older aircraft undergo extensive structural
modifications before the later of the accumulation of a designated
number of flight cycles or 1994 deadlines established by the various
ADs. Most of TWA's aircraft are currently affected by these aging
aircraft ADs. TWA monitors its fleet of aircraft to ensure safety
levels that meet or exceed those mandated by the FAA.
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Safety
TWA is subject to FAA jurisdiction with respect to aircraft
maintenance and operations, including equipment, dispatch,
communications, training, flight personnel and other matters affecting
air safety. The FAA has the authority to issue new or additional
regulations. To ensure compliance with its regulations, the FAA
requires TWA to obtain operating, airworthiness and other certificates
that are subject to suspensions or revocation for cause. In addition, a
combination of FAA and Occupational Safety and Health Administrative
regulations on both federal and state levels apply to all of TWA's
ground-based operations.
Passenger Facilities Charges
During 1990, Congress enacted legislation to permit airport
authorities, with prior approval from the FAA, to impose passenger
facility charges as a means of funding local airport projects. These
charges, which are intended to be collected by the airlines from their
passengers and remitted to the airports, are limited to $3.00 per
enplanement and to $12.00 per round trip, although Congress is currently
considering allowing airports to raise the passenger facility charges.
As a result of competitive pressure, TWA and other airlines have been
limited in their ability to pass on the cost of the passenger facility
charges to passengers through fare increases.
Environmental
TWA is subject to regulation under major environmental laws
administered by state and federal agencies, including the Clean Air Act,
the Clean Water Act, the Comprehensive Environmental Response
Compensation and Liability Act of 1980 and the Resource Conservation and
Recovery Act ("RCRA"). In some locations there are also county and
sanitary sewer district agencies that regulate TWA. TWA believes that
it is in substantial compliance with applicable environmental regulations.
See, however, "Item 3. Legal Proceedings."
Foreign Ownership of Shares
The Federal Aviation Act of 1958 generally prohibits non-U.S.
citizens from owning more than 25% of the voting interest in U.S. air
carriers, including TWA.
INSURANCE
TWA maintains commercial airline insurance with a major group of
independent insurers that regularly participate in world aviation
insurance markets. TWA's policies include coverage for losses resulting
from the physical destruction of or damage to TWA's owned and leased
aircraft, as well as losses arising from bodily injury, property damage
and personal injury to third parties for which TWA becomes legally
obligated to pay. TWA maintains aircraft third party and airline
general third party liability insurance with a combined single limit of
$1.25 billion per occurrence. Management believes that TWA's commercial
airline insurance policies are generally consistent with those of other
U.S.-domiciled scheduled passenger air carriers operating similar
aircraft over similar routes.
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CORPORATE REORGANIZATIONS
During the early 1990s, the U.S. airline industry, including TWA,
experienced unprecedented losses, which were largely attributable to,
among other things, the Persian Gulf War (which caused a substantial
increase in fuel costs and reduction in travel demand due to concerns
over terrorism), recessions in the United States and Europe and
significant industry-wide fare discounting resulting from another U.S.
airline's attempt to introduce a new pricing structure into the domestic
airline business. In addition, TWA owed significant amounts as a result
of the leveraged acquisition in 1986 of a controlling interest in TWA by
Carl Icahn. The substantial losses sustained by TWA during this period,
coupled with TWA's excessive debt obligations, made it necessary for TWA
to restructure its debt obligations and equity, lower its labor costs
and severely reduce its capital outlays.
On November 3, 1993, TWA emerged from the protection of Chapter 11
of the United States Bankruptcy Code pursuant to a bankruptcy case filed
on January 31, 1992. Notwithstanding the reduction in levels of debt
and obligations achieved through the 1993 reorganization, TWA emerged
from the 1993 reorganization in a highly leveraged position and, despite
progress in increasing revenues and reducing costs, continued to
experience significant operating losses.
On August 23, 1995, TWA emerged from the protection of a second
Chapter 11 proceeding pursuant to a bankruptcy case filed on June 30,
1995. In connection with the 1995 reorganization, TWA:
* exchanged certain of its then outstanding debt securities
for a combination of newly issued preferred stock, common
stock, warrants and rights to purchase common stock and debt
securities,
* converted its then outstanding preferred stock to shares of
common stock, warrants and rights to purchase common stock,
* obtained certain short-term lease payment and conditional
sale indebtedness deferrals amounting to approximately $91
million and other modifications to certain aircraft leases,
* obtained an extension of the term of the approximately $190
million principal amount of the loans from the entities
associated with Mr. Icahn, TWA's former Chairman,
* effected a reverse stock split of its then outstanding
common stock and exchanged these shares for common stock,
* raised approximately $52 million through an equity rights
offering,
* distributed certain warrants to its then current equity
holders and certain creditors, and
* implemented certain amendments to its certificate of
incorporation relating to the recapitalization and various
corporate governance matters.
In connection with and as a precondition to the 1995
reorganization, in August and September of 1994, TWA entered into the
1994 labor agreements, amending existing collective bargaining
agreements, with the IAM, ALPA and IFFA, the three labor unions who then
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represented approximately 84% of TWA's employees. The 1994 labor
agreements provided for an extension of certain previously agreed wage
concessions, modifications to work rules and the deletion of certain
provisions of the then existing labor agreements, including elimination
of so-called "snapbacks," i.e., the automatic restoration of wage
reductions granted in these agreements at the end of their term to
levels that prevailed before the concessionary agreement. During 1994
and 1995, TWA also implemented a number of similar cost saving
initiatives with respect to domestic non-union and management employees,
primarily through reducing head count, altering benefit packages, and
continuing wage reductions that had been scheduled to expire. (See
"Employees")
ITEM 2. PROPERTIES
FLIGHT EQUIPMENT
As of December 31, 1998, TWA operated a fleet of 185 aircraft, of
which 15 were owned by TWA and 170 were leased. The aircraft in TWA's
active operating fleet as of December 31, 1998 are listed below:
<TABLE>
<CAPTION>
SEATS IN
AVERAGE AGE STANDARD
OF AIRCRAFT TWA
TYPE OWNED<F2> LEASED TOTAL<F3> (IN YEARS) CONFIGURATION
- - ---------------- --------- ------ --------- ----------- -------------
<S> <C> <C> <C> <C> <C>
DC-9-10<F1> 2 3 5 32.2 77
DC-9-30/40<F1> - 38 38 28.9 100
DC-9-50 - 12 12 21.9 115
MD-80/82 - 40 40 14.1 140
MD-83 - 25 35 6.4 142
727-200<F1> 4 19 23 21.5 145
757 - 16 16 1.7 180
767-200 9 3 12 15.5 192
767-300 - 4 4 4.0 233
-----------------------------------------------
Total 15 170 185 16.2
===============================================
<FN>
____________
<F1> Excludes the following aircraft that are not in the active fleet:
four B-727-100s, eight B-727-200s, six 747-100s, one 747-200,
seven L-1011s, one DC-9-10 and one DC-9-30.
<F2> TWA has pledged a substantial portion of its owned aircraft to
secure its debt.
<F3> For information concerning compliance of the above-referenced
aircraft with the Noise Act, see "Regulatory Matters -- Noise
Abatement."
</TABLE>
For a discussion of TWA's fleet restructuring plans, see "Business
Strategy -- Fleet Upgrade and Simplification."
22
<PAGE>
<PAGE>
REAL PROPERTY
TWA uses or has rights to use airport and terminal facilities
located in or near the cities it serves under lease agreements or other
arrangements with the governmental authorities exercising control over
these facilities.
At St. Louis, TWA has preferential use rights to 57 gates and 40
ticket counter positions, and ramp, baggage and other supporting ground
facility space. At JFK, although TWA leases Terminals 5 and 6, for a
total of 29 gates, 96 ticket counter positions and ramp, baggage and
other supporting ground facility space, TWA operates out of one
passenger terminal facility (Terminal 5). TWA leases both Terminal 5
and Terminal 6 as a holdover tenant pursuant to expired agreements of a
lease with the Port Authority of New York and New Jersey. These
holdover tenancies are with the consent of the Port Authority pursuant
to a Term Sheet dated August 12, 1993, which extended TWA's right to
occupy Terminals 5 and 6 so long as TWA paid the rent set forth in the
Term Sheet, made certain specified financed improvements to Terminals 5
and 6 and was otherwise in compliance with the expired leases. TWA's
tenancy is currently on a month-to-month basis and no lease has been
signed. TWA has currently subleased approximately half of the gates in
Terminal 6 to other carriers.
TWA's overhaul base is located on approximately 250 acres of
leased property at the Kansas City International Airport, Kansas City,
Missouri. The overhaul base is the principal base where TWA performs
major maintenance and repair services for its aircraft fleet. The
overhaul base is owned by the city of Kansas City, Missouri and leased
to TWA along with other facilities until May 31, 2000. For a
description of certain environmental corrective actions that TWA
anticipates will be required at the overhaul base, see "Item 3. Legal
Proceedings."
TWA leases office space and other facilities in a number of
locations in the United States and abroad. In December 1993, pursuant
to a sale/leaseback transaction with the city of St. Louis, TWA leased a
two-story ground operations building near the St. Louis airport and an
adjacent 165,000 square foot, five-story flight training facility. The
lease of these properties is covered under a month-to-month agreement
that renews automatically so long as TWA is not in default, until its
expiration on December 31, 2005. The lease is subject to early
termination in the event of certain events of default, including
non-payment of rents, cessation of service, failure to maintain
corporate headquarters within the city or County of St. Louis or failure
to maintain a reservations office within the city of St. Louis. TWA's
St. Louis area reservation facility and customer relations department is
located in approximately 48,000 square feet in the city of St. Louis,
Missouri. In June 1996, TWA opened a new reservation facility in
Norfolk, Virginia, comprised of approximately 40,000 square feet and
having 455 work stations. The facility is leased for a 25 year term.
TWA's corporate headquarters are located at One City Centre, 515
N. Sixth Street, St. Louis, Missouri, where TWA has subleased
approximately 56,700 square feet through February 28, 2000.
23
<PAGE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
Icahn Litigation
On June 14, 1995, TWA signed the Extension and Consent Agreement
with Karabu Corp. ("Karabu"), a company controlled by Carl Icahn, to
extend the term of certain financing provided by Karabu (the "Icahn
Loans"). In consideration of, among other things, the extension of the
Icahn Loans, TWA and Karabu entered into a 99-month ticket agreement,
which permitted Karabu to purchase two categories of discounted tickets:
(1)"domestic consolidator tickets," which are subject to a cap of $610
million, based on the full retail price of the tickets ($120 million in
the first 15 months and $70 million per year for the next seven
consecutive years through the term of the ticket agreement), and
(2)"system tickets," which are not subject to any cap throughout the
term of the ticket agreement.
Tickets sold by TWA to Karabu pursuant to the ticket agreement are
priced at levels intended to approximate current competitive discount
fares available in the airline industry. TWA believes that applicable
provisions of the ticket agreement do not allow Karabu to market or sell
system tickets through travel agents or directly to the general public.
Karabu, however, has been marketing system tickets through travel agents
and directly to the general public. TWA has demanded that Karabu cease
doing so, and Karabu has stated that it disagrees with TWA's
interpretation concerning sales through travel agents or directly to the
general public. In December 1995, TWA filed a lawsuit against Karabu,
Mr. Icahn, and certain affiliated companies seeking damages and to
enjoin further violations of the ticket agreement. Mr. Icahn countered
by threatening to file his own lawsuit and to declare a default on the
loans from entities related to Mr. Icahn, which financing was then
secured by certain receivables and flight equipment. Mr. Icahn's
position was based upon a variety of claims related to his
interpretations of the security agreement, as well as, with respect to
certain alleged violations of the ticket agreement by TWA. The parties
negotiated a series of standstill agreements pursuant to which TWA's
original lawsuit was withdrawn, while TWA and Mr. Icahn endeavored to
negotiate a settlement of their differences and respective claims.
On March 20, 1996, TWA filed a petition in the Circuit Court for
St. Louis County, Missouri, commencing a lawsuit against Mr. Icahn,
Karabu and certain other entities affiliated with Mr. Icahn. The TWA
petition alleged that the defendants are violating the ticket agreement
and otherwise tortiously interfering with TWA's business expectancy and
contractual relationships, by among other things, marketing and selling
tickets purchased under the ticket agreement to the general public. The
TWA petition sought a declaratory judgment finding that the defendants
have violated the ticket agreement, and also sought liquidated,
compensatory and punitive damages, in addition to TWA's costs and
attorney's fees. On May 7, 1998 the court denied the TWA petition and
dismissed the defendants' counterclaims. The court concluded that the
defendants could sell discount tickets under the ticket agreement to any
person who actually uses the ticket, including non-business travelers,
and that the defendants had not breached the ticket agreement. No
damages were assessed in respect to either plaintiff's or defendants'
petitions.
The court's ruling could have an adverse effect on revenue, which
could be significant but the impact of which will depend on a number of
factors, including yield, load factors and whether any resulting
incremental sales by the defendants will be to passengers that would not
otherwise have flown on TWA. The defendants moved to amend or modify
the court's
24
<PAGE>
<PAGE>
ruling to include a declaratory judgment that the defendants are
permitted to sell tickets to any person for any purpose, which could
include use by the purchaser's family members or friends. TWA opposed
the motion and requested that the court clarify the ruling to limit
its scope consistent with the reasoning set forth in the decision,
specifically so that the person purchasing the ticket must use the
ticket (with certain enumerated exceptions) and may not purchase a
ticket for any other person. The court denied both motions on June 25,
1998. TWA has appealed the denial of its motion for clarification and
the court's original ruling.
Although TWA intends to press its claims vigorously, it is
possible that Karabu's interpretation of the ticket agreement regarding
system discount ticket sales by the defendants through travel agents or
directly to the general public could be determined, either by a court or
otherwise, to be correct. In such event, unless TWA took appropriate
action to mitigate the effect of these sales, TWA could suffer loss of
revenue and reduced overall passenger yields on a continuing basis during
the term of the ticket agreement.
Other Actions
On July 17, 1996, TWA Flight 800 crashed shortly after departure
from JFK en route to Paris, France. There were no survivors among the
230 passengers and crew members aboard the Boeing 747 aircraft. While
TWA is currently a defendant in a number of lawsuits relating to the
crash, TWA maintains substantial insurance coverage and management
believes that TWA's insurance coverage is more than sufficient to cover
the claims arising from the crash. In addition, TWA has entered into
agreements that limit the amount of TWA's exposure to such claims and
that significantly reduce the amounts charged or reserved under
applicable insurance policies as a result of the crash of Flight 800.
Based on the insurance coverage maintained by TWA and those agreements,
TWA believes that the resolution of these claims will have no material
impact on the financial condition of TWA or its results of operations.
TWA is unable to identify or predict the extent of any adverse effect
on its revenues, yields or results of operations which has resulted or
may result from the public perception of the crash or from any future
findings by the National Transportation Safety Board.
On May 31, 1988, the U.S. Environmental Protection Agency ("EPA")
filed an administrative complaint seeking civil penalties as well as
other relief requiring TWA to take remedial procedures at TWA's overhaul
base in Kansas City, Missouri, alleging violations resulting from TWA's
past hazardous waste disposal and related environmental practices.
Simultaneously, TWA became a party to a consent agreement and a consent
order with the EPA pursuant to which TWA paid a civil penalty of
$100,000 and agreed to implement a schedule of remedial and corrective
actions and to perform environmental audits at TWA's major maintenance
facilities. This consent agreement and consent order were terminated on
July 24, 1998. In September 1989, TWA and the EPA signed an
administrative order of consent, which required TWA to conduct extensive
investigations at or near the overhaul base and to recommend remedial
action alternatives. The two major requirements of the administrative
order of consent, the RCRA Facility Investigation Report and the
Corrective Measures Study, were approved by EPA and the Missouri Department
of Natural Resources ("MDNR") in October of 1995 and August of 1997,
respectively. On August 7, 1998, MDNR and EPA issued a RCRA Part B
post-closure permit ("Permit") for post-closure care of regulated units and
Corrective Measures Implementation ("CMI") activities at the maintenance
base. This Permit continues activities initiated under the consent
agreements. TWA presently
25
<PAGE>
<PAGE>
estimates the cost of the post-closure care and CMI activities to be
approximately $4.7 million, a majority of which represents costs
associated with long-term groundwater monitoring and maintenance of
remedial systems. Although TWA believes adequate reserves have been
provided for all known environmental contingencies, it is possible that
additional reserves might be required in the future that could have a
material adverse effect on the results of operations or financial
condition of TWA. However, TWA believes that the ultimate resolution of
known environmental contingencies should not have a material adverse
effect on the financial position or results of operations based on TWA's
knowledge of similar environmental sites.
In connection with certain wage scale adjustments afforded to
TWA's non-contract employees, employees previously represented by
IFFA asserted and won an arbitration ruling with respect to the
comparability of wage concessions made in 1994 that, if fully sustained,
would require TWA to provide additional compensation to these employees.
The Eighth Circuit Court of Appeals upheld a district court ruling that
affirmed the arbitrator's award. TWA has filed a motion before the
District Court for the Eastern District of Missouri seeking referral of
the matter to the System Board of Adjustment for determination on TWA's
claim that, to the extent it was unsuccessful on the merits, actions
taken by TWA following issuance of the arbitrator's award and in accordance
with the arbitrator's opinion have substantially, if not totally, mitigated
potential damages. Accordingly, the Company has not recorded any liability
for this litigation. The IAM (now collective bargaining agent for employees
formerly represented by IFFA) has filed a motion requesting the district
court to hold TWA in contempt of court and to order TWA to implement the
arbitration award. TWA believes that pending the district court's ruling
on TWA's motion to remand, TWA is not required to implement the arbitration
award and the IAM's motion is without merit. The amount, if any, due under
the award is incapable of being determined pending the district court's
ruling on TWA's motion and, if remanded, the decision of the
System Board of Adjustment.
TWA is also defending a number of other actions that have either
arisen in the ordinary course of business or are insured or the
cumulative effect of which management of TWA does not believe may
reasonably be expected to be materially adverse.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No meeting of security holders was held during the fourth quarter
of 1998.
26
<PAGE>
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
GENERAL
The common stock is listed for trading on the American Stock
Exchange. The following table sets forth the range of high and low
prices for shares of the common stock (as reported in The Wall Street
Journal) for the periods indicated:
<TABLE>
<CAPTION>
PERIOD HIGH LOW
- - ------ ---- ---
<S> <C> <C>
1997
First Quarter $8.437 $5.1875
Second Quarter 10.8125 5.875
Third Quarter 8.75 6.00
Fourth Quarter 12.3125 6.50
1998
First Quarter 15.125 9.25
Second Quarter 12.5 8.125
Third Quarter 11.1875 5.5625
Fourth Quarter 6.625 3.6875
1999
First Quarter (through March 16, 1999) 7.75 4.0625
</TABLE>
Since 1978, the Company has not paid any cash dividends on any of
its common stock. The Company currently plans to retain all earnings to
finance its business and to reduce its leverage rather than paying cash
dividends on the common stock. Payments of any cash dividends in the
future will depend on the financial condition, results of operations and
capital requirements of TWA, as well as other factors deemed relevant by
its Board of Directors, including applicable restrictions in various
agreements relating to indebtedness.
As of February 28, 1999, there were (i) 58,252,305 shares of the
Company's common stock outstanding and 24,786 holders of record of the
common stock, and (ii) 5,946,355 shares of Employee Preferred Stock
issued and outstanding and nine holders of record of the Employee
Preferred Stock.
27
<PAGE>
<PAGE>
SALES OF UNREGISTERED SECURITIES
In April 1998, the Company issued in a private placement $31.8
million principal amount of Mandatory Conversion Equity Notes due 1999
(the "April Equity Notes") to the owners of three used B-767-231 ETOPS
aircraft and six associated engines (the "April Aircraft") and to Lazard
Freres & Co. ("Lazard") as partial consideration for the purchase of the
April Aircraft. Lazard acted as placement agent for the transaction,
which was exempt from the registration requirements of the Securities
Act of 1933, as amended (the "Act") pursuant to Section 4(2) of the Act.
The April Equity Notes were convertible into shares of common stock of
the Company. On July 6, 1998, a registration statement on Form S-3
(Reg. No. 333-56991) with respect to offers and sales of shares of the
restricted common stock to be issued upon conversion of the April Equity
Notes became effective. On July 7, 1998, the April Equity Notes were
converted into 3,290,901 shares of restricted common stock at a price of
95% of the average of the closing price of the common stock on the
American Stock Exchange for the 20 consecutive trading days prior to
conversion, which price equaled $9.663.
In June 1998, the Company issued in a private placement $13.0
million principal amount of the 10 1/4% Mandatory Conversion Equity
Notes due 1999 (the "10 1/4% Equity Notes") to the owners of one used B-
767-231 ETOPS aircraft and two associated engines (collectively, the
"June Aircraft") as partial consideration for the purchase of the June
Aircraft. The transaction was exempt from the registration requirements
of the Act pursuant to Section 4(2) of the Act. The 10 1/4% Equity
Notes were convertible into shares of common stock of the Company. On
July 10, 1998, a registration statement on Form S-3 (Reg. No. 333-58481)
with respect to offers and sales of shares of the restricted common
stock to be issued upon conversion of the 10 1/4% Equity Notes became
effective. On July 13, 1998 the 10 1/4% Equity Notes were converted
into 1,225,719 shares of restricted common stock at the closing price of
the common stock on the American Stock Exchange on the day prior to
conversion, which price equaled $10.6875, plus interest of $7.6875 per
$1,000 face amount of the 10 1/4% Equity Notes.
28
<PAGE>
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data presented below relate to periods in
the years ended December 31, 1998, 1997 and 1996, the four months ended
December 31, 1995, the eight months ended August 31, 1995 and the year
ended December 31, 1994. This data should be read in conjunction with
"Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements.
The consolidated financial data for the above periods was derived from
the audited consolidated financial statements of the Company. Certain
amounts have been reclassified to conform with presentations adopted in
1998.
TWA underwent Chapter 11 reorganization in 1995. As a result of
the 1995 reorganization, TWA has applied fresh start reporting in
accordance with the American Institute of Certified Public Accountants
Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," which resulted in a new
reporting entity for accounting purposes. TWA also adjusted its assets
and liabilities to reflect fair values on the effective date of the 1995
reorganization, which for accounting purposes occurred September 1,
1995. Because of the application of fresh start reporting, TWA's
consolidated financial statements for periods after the 1995
reorganization are not comparable in all respects to the financial
statements for periods before the reorganization. The vertical black
lines in the following tables separate these periods. TWA has not
presented earnings per share of the predecessor company, as it believes
these amounts are not meaningful.
<TABLE>
<CAPTION>
REORGANIZED COMPANY PREDECESSOR COMPANY
--------------------------------------------------------- ----------------------------
YEAR YEAR YEAR FOUR MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, AUGUST 31, DECEMBER 31,
1998 1997 1996 1995 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Operating revenues $3,259,147 $3,327,952 $3,554,407 $1,098,474 $2,218,355 $3,407,702
Operating income
(loss)<F1> (65,159) (29,260) (198,527) 10,446 14,642 (279,494)
Loss before income taxes
and extraordinary
items<F2> (107,169) (89,335) (274,577) (32,268) (338,309) (432,869)
Provision (credit) for
income taxes 243 527 450 1,370 (96) 960
Loss before
extraordinary items (107,412) (89,862) (275,027) (33,638) (338,213) (433,829)
Extraordinary items,
net of income
taxes<F3> (13,069) (20,973) (9,788) 3,500 140,898 (2,005)
Net loss (120,481) (110,835) (284,815) (30,138) (197,315) (435,834)
Ratio of earnings to combined
fixed charges and preferred
stock dividends<F4> - - - - - -
Per share amounts<F5>:
Loss before
extraordinary
items $(2.14) $(1.98) $(6.60) $(1.15)
Net loss (2.35) (2.37) (7.27) (1.05)
</TABLE>
29
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
------------------------------------------------------- -----------
DECEMBER 31,
----------------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents $ 252,408 $ 237,765 $ 181,586 $ 304,340 $ 138,531
Current assets 605,414 632,957 625,745 737,301 603,806
Net working capital (deficiency) (397,425) (303,988) (336,416) (81,913) (1,238,216)
Flight equipment, net 514,298 626,382 472,495 455,434 508,625
Total property and equipment, net 620,030 741,765 614,207 600,066 693,045
Intangible assets, net 1,055,544 1,118,864 1,184,786 1,275,995 921,659
Total assets 2,554,623 2,773,848 2,681,939 2,868,211 2,512,435
Current maturities of long-term debt and
capital leases<F6> 149,403 88,460 134,948 110,401 1,149,739
Long-term debt, less current maturities<F6> 572,372 736,540 608,485 764,031 -
Long-term obligations under capital leases,
less current maturities 163,046 182,922 220,790 259,630 339,895
Shareholders' equity (deficiency)<F7> 185,322 268,284 238,105 302,855 (417,476)
<FN>
_______
<F1> Includes special charges of $42.6 million in 1998, $85.9 million
in 1996, $1.7 million in the eight months ended August 31, 1995
and $138.8 million in 1994. For a discussion of these and other
non-recurring items, see Note 14 to the consolidated financial
statements.
<F2> The eight months ended August 31, 1995 include charges of $242.2
million related to reorganization items.
<F3> The extraordinary items in 1998, 1997 and 1996 are the result of
the early extinguishment of certain debt. The extraordinary item
in the four months ended December 31, 1995 was the result of the
settlement of a debt of a subsidiary, while the extraordinary item
in the eight months ended August 31, 1995 represents the gain on
the discharge of indebtedness pursuant to the consummation of the
1995 reorganization. The extraordinary item in 1994 represents
the charge for a prepayment premium related to the sale and
leaseback of four MD-80 aircraft.
<F4> For purposes of determining the ratio of earnings to combined
fixed charges and preferred stock dividends; "earnings" consist
of earnings before income taxes, extraordinary items and fixed
charges (excluding capitalized interest); "fixed charges" consist
of interest (including capitalized interest) on all debt and that
portion of rental expense management believes to be representative
of interest and "preferred stock dividends" consist of preferred
stock dividend requirements divided by the after-tax effective rate.
Earnings were not sufficient to cover combined fixed charges and
preferred stock dividends as follows (in millions): for the years
ended December 31, 1998, 1997 and 1996, and for the four months
ended December 31, 1995, $152.7, $120.5, $340.1 and $40.1,
respectively.
<F5> No effect has been given to stock options, warrants, convertible
preferred stock or potential issuances of additional employee
preferred stock, as the impact would have been anti-dilutive;
accordingly, basic and diluted per share amounts are the same for
all periods presented.
<F6> Long-term debt in 1994 was reclassified to current maturities as a
result of certain alleged defaults and payment defaults.
<F7> No dividends were paid on TWA's outstanding common stock during
the periods presented above.
</TABLE>
30
<PAGE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements made below relating to plans, conditions,
objectives, and economic performance go beyond historical information
and may provide an indication of future financial condition or results
of operations. To that extent, they are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and each is subject to risks, uncertainties and
assumptions that could cause actual results to differ from those in the
forward-looking statements. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated or projected. In any event, these forward-looking statements
speak only as of their dates, and the Company undertakes no obligation
to update or revise any of them whether as a result of new information,
future events or otherwise.
GENERAL
TWA operates in an intensely competitive environment. The Company
competes with one or more major airlines on most of its routes
(including all routes between major cities). The airline industry has
consolidated as a result of mergers and liquidations and more recently
through alliances, and further consolidation may occur in the future.
This consolidation has, among other things, enabled certain of the
Company's major competitors to expand their international operations and
increase their domestic market presence, thereby strengthening their
overall operations, by transporting passengers connecting with or
otherwise traveling on the alliance carriers. Such alliances could
further intensify the competitive environment.
The rapid growth of regional jet airline affiliates represents a
significant competitive challenge for TWA due to its reliance on
through-hub passenger traffic. A small regional jet can now offer
direct service in markets that previously were served only by through-
hub service. TWA's current IAM contracts limit TWA from directly
competing with regional jets in these markets.
These issues represent a competitive challenge for the Company,
which has higher operating costs than many regional carriers and fewer
financial resources than many of its major competitors. Small
fluctuations in RASM and CASM can significantly affect TWA's financial
results. The Company has experienced significant operating losses on an
annual basis since the early 1990s, except in 1995 when the Company's
combined operating profit was $25.1 million. TWA expects the airline
industry will remain extremely competitive for the foreseeable future.
The Company continues to focus on implementing several strategic
initiatives to improve operational reliability and schedule integrity
and overall product quality in order to attract higher-yield passengers
and enhance overall productivity. Key initiatives currently in progress
include:
* modernizing its fleet;
* focusing on improved productivity;
* implementing a series of revenue-enhancing marketing
initiatives to attract higher-yield business travelers;
* implementing a number of employee-related initiatives to
reinforce the Company's focus on operational performance; and
* optimizing TWA's route structure.
31
<PAGE>
<PAGE>
TWA faces a number of uncertainties that may adversely affect its future
results of operations, including:
* insufficient levels of air passenger traffic resulting from,
among other things, war, threat of war, terrorism or changes
in the economy;
* governmental limitations on the ability of TWA to service
certain airports and/or foreign markets;
* regulatory requirements necessitating additional capital or
operating expenditures;
* pricing and scheduling initiatives by competitors;
* the availability and cost of capital;
* increases in fuel and other operating costs;
* the outcome of certain ongoing labor negotiations; and
* the adverse effects on yield of the continued implementation
of a discount ticket program between TWA and Karabu
Corporation, a company controlled by Carl Icahn, on the
terms currently applied by Karabu. (TWA believes these
terms are inconsistent with, and in violation of, the ticket
agreement governing this program.) (See "Part I, Item 3.
Legal Proceedings.")
TWA is unable to predict the potential affect of any of these
uncertainties upon its future results of operations.
Labor Costs
Wage rates for most of TWA's employees have increased recently as
a result of several events. A new collective bargaining agreement
between TWA and its pilots became effective September 1, 1998. As part
of the new contract, TWA agreed to pay increases over the next four
years that will result in wages for TWA's pilots improving by 2002 to
90% of the industry average as determined by wage rates in contracts in
effect as of August 1998. The contract also provides for significant
work rule improvements for pilots in certain areas while also granting
TWA flexibility and improvements necessary to enhance its competitive
position. Under the contract, TWA also will distribute either one
million shares of TWA's common stock or $11 million in cash to its
pilots, in four equal quarterly payments commencing in 1999. TWA has
the option to make each quarterly payment in shares or in cash.
Pursuant to the labor agreements TWA entered into in 1992, TWA
agreed to pay to employees represented by the IAM a cash bonus for the
amount by which overtime incurred from September 1992 through August
1995 was reduced below specified thresholds. This amount was to be
offset by the failure of medical savings to meet certain specified
levels during the period for the same employees. TWA and the IAM have
agreed that the net overtime bonus owed to the IAM is $25.5 million,
which amount TWA previously provided and reflected as a liability in its
financial statements. The obligation is payable in three equal annual
installments, and TWA made the first payment on October 15, 1998.
TWA also entered into agreements subsequent to the 1992 labor
agreements that provide for an adjustment to existing salary rates of
certain labor-represented employees based on the amount of the cash
bonus for overtime to the employees represented by the IAM as described
in the previous paragraph. These adjustments equated to a 4.814%
increase which management made effective for all employee groups on
September 1, 1998, except for pilots whose contract provided for
separate increases also effective September 1, 1998, and the officers of
TWA who did not receive the increase. Management intends that the
4.814% salary adjustments will be part of any percentage increase that
would be incorporated in contract amendments currently being negotiated.
32
<PAGE>
<PAGE>
There are certain issues relating to agreements with employees,
the resolution of which could result in significant non-cash charges to
future operating results of TWA. Shares granted or purchased at a
discount under the ESIP will generally result in a charge equal to the
fair market value of shares granted and the discount for shares
purchased at the time these shares are earned or purchased. As a result
of the first two target prices being realized on February 17, 1998, and
March 4, 1998, respectively, the Company issued an additional 2,377,084
shares on July 15, 1998, to satisfy the 1997 and 1998 ESIP grant
amounts. In connection with such issuance, TWA recorded an aggregate
non-cash charge in the first quarter of 1998 in the amount of $26.5
million. An aggregate non-cash charge of $1.0 million was recorded in
the third quarter of 1998 to reflect the actual number of shares issued
on July 15, 1998. If the ESIP's remaining target prices for TWA common
stock are realized, the minimum aggregate non-cash charge for the years
1999 to 2002 will be approximately $103.4 million based upon these
target prices and the number of shares of common stock and Employee
Preferred Stock outstanding at December 31, 1998. The non-cash charge
for any year, however, could be substantially higher if the then market
price of the TWA common stock exceeds certain target prices.
In connection with certain wage scale adjustments afforded to non-
contract employees, employees previously represented by IFFA have
asserted and won an arbitration ruling with respect to the comparability
of wage concessions made in 1994 that, if sustained, would require TWA
to provide additional compensation to these employees. The Eighth
Circuit Court of Appeals upheld a district court ruling that affirmed the
arbitrator's award. TWA has filed a motion before the District Court for
the Eastern District of Missouri seeking referral of the matter to the
System Board of Adjustment for determination on TWA's claim that, to the
extent it was unsuccessful on the merits, actions taken by TWA following
issuance of the arbitrator's award and in accordance with the arbitrator's
opinion have substantially, if not totally, mitigated potential damages.
Accordingly, the Company has not recorded any liability for this litigation.
The IAM (now collective bargaining agent for employees formerly represented
by IFFA) has filed a motion requesting the district court to hold TWA in
contempt of court and to order TWA to implement the arbitration award. TWA
believes that pending the district court's ruling on TWA's motion to remand,
TWA is not required to implement the arbitration award and the IAM's motion
is without merit. The amount, if any, due under the award is incapable of
being determined pending the district court's ruling on TWA's motion and,
if remanded, the decision of the System Board of Adjustment.
TWA is currently engaged in negotiations with its flight
attendants and ground employees on new collective bargaining agreements
and expects that the new agreements with these employees will likely
result in additional increases in wage rates. TWA believes it is
essential that its labor costs remain favorable in comparison to its
largest competitors. The Company will seek to continue to improve
employee productivity as an offset to any wage increases and will
continue to explore other ways to control and/or reduce operating
expenses.
There can be no assurance that the Company will be successful in
obtaining such productivity improvements or unit cost reductions. In
the opinion of management, the Company's financial resources are not as
great as those of most of its competitors, and therefore, a substantial
increase in its labor costs as a result of any new labor agreements or
any cessation or disruption of operations due to any strike or work
action could be particularly damaging to the Company.
Seasonality
Due to the greater demand for air travel during the summer months,
airline industry revenues for the third quarter of the year are
generally significantly greater than revenues in the first and fourth
quarters of the year and moderately greater than revenues in the second
quarter of the year. In the last two years, TWA has attempted to reduce
the seasonal nature of its business through an acceleration of its fleet
renewal program, a decrease in international operations, and the
restructuring of its JFK operations, with the result that the difference
between TWA's seasonal average daily peak and trough capacities relating
to available seat miles ("ASMs") has dropped from 20.8% in 1996 and 16.9%
in 1997 to 3.9% in 1998. TWA anticipates that the seasonal variability
of its financial performance
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will be reduced (but not eliminated) as a result of these changes;
however, there can be no assurance that this deseasonalization will
occur.
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TWA's passenger traffic data, for scheduled passengers only, are
shown in the table below for the indicated periods<F1>:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
NORTH AMERICA
Passenger revenues ($ millions) $ 2,562 $ 2,512 $ 2,515
Revenue passenger miles (millions)<F2> 20,132 19,737 19,513
Available seat miles (millions)<F3> 28,796 29,341 30,201
Passenger load factor <F4> 69.9% 67.3% 64.6%
Passenger yield (cents)<F5> 12.72 cents 12.73 cents 12.89 cents
Passenger revenue per available seat mile (cents) <F6> 8.90 cents 8.56 cents 8.33 cents
INTERNATIONAL
Passenger revenues ($ millions) $ 333 $ 412 $ 563
Revenue passenger miles (millions)<F2> 4,290 5,363 7,598
Available seat miles (millions)<F3> 5,657 7,093 10,393
Passenger load factor <F4> 75.8% 75.6% 73.1%
Passenger yield (cents)<F5> 7.77 cents 7.68 cents 7.41 cents
Passenger revenue per available seat mile (cents)<F6> 5.89 cents 5.81 cents 5.42 cents
TOTAL SYSTEM
Passenger revenues ($millions) $ 2,895 $ 2,924 $ 3,078
Revenue passenger miles (millions)<F2> 24,422 25,100 27,111
Available seat miles (millions)<F3> 34,453 36,434 40,594
Passenger load factor <F4> 70.9% 68.9% 66.8%
Passenger yield (cents)<F5> 11.85 cents 11.65 cents 11.35 cents
Passenger revenue per available seat mile (cents)<F6> 8.40 cents 8.03 cents 7.58 cents
Operating cost per available seat mile (cents)<F7> 9.23 cents 8.98 cents 8.76 cents
Average daily utilization per aircraft (hours)<F8> 9.77 9.38 9.63
Aircraft in fleet being operated at end of year 185 185 192
<FN>
<F1> Excludes subsidiary companies.
<F2> The number of scheduled miles flown by revenue passengers.
<F3> The number of seats available for passengers multiplied by the
number of scheduled miles those seats are flown.
<F4> Revenue passenger miles divided by available seat miles.
<F5> Passenger revenue per revenue passenger mile.
<F6> Passenger revenue divided by scheduled available seat miles.
<F7> Operating expenses, excluding special charges, earned stock
compensation, other nonrecurring charges and subsidiaries, divided
by total available seat miles.
<F8> The average block hours flown per day in revenue service per
aircraft.
</TABLE>
RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
COMPARED TO THE FISCAL YEAR ENDED DECEMBER 31, 1997
Total operating revenues of $3,259.1 million for 1998 were $68.9
million or 2.1% less than the total operating revenues of $3,328.0
million for the year ended December 31, 1997. The decrease was
primarily reflected in TWA passenger revenues, which were $28.8 million
less than in 1997; domestic passenger revenue increased year over year
by $49.7 million, however, international passenger revenue decreased by
$78.5 million resulting from the reduction of certain unprofitable
international operations and the planned reduction in capacity as the
Company replaced older L-1011 and B-747 aircraft with new B-757 and
B-767 aircraft on many routes. Revenue from freight and mail also
decreased $24.3 million as a result of the reduction in capacity.
Additionally, revenues from contract work decreased $8.6 million
primarily due to an overall reduction in third party maintenance as the
Company focused its resources on maintenance of its own aircraft.
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As a result of the Company's planned retirement of older widebody
aircraft and elimination of unprofitable services, capacity and traffic
decreased in 1998 as compared to 1997. System-wide capacity, measured
in available seat miles flown in scheduled service, decreased by 5.4% in
1998 as compared to 1997 (reflecting a 1.9% decrease in domestic
available seat miles and a 20.2% decrease in international available
seat miles). This capacity change reflects the continued planned "leveling"
of TWA's seasonal schedules and the reduction in international operations.
Passenger traffic volume, as measured by total revenue passenger miles in
scheduled service, decreased 2.7% in 1998 over 1997. Passenger load factor
for 1998 was 70.9% compared to 68.9% in 1997. TWA's yield per revenue
passenger mile increased to 11.85 cents in 1998 from 11.65 cents in 1997.
Overall, revenues generated as a result of moderate year over year increases
in load factor and yield from 1997 to 1998, while reflecting TWA's emphasis
on improving system yield, were not sufficient to offset the decline in
capacity.
Operating expenses decreased to $3,324.3 million (including $42.6
million in special charges) in 1998, $32.9 million (1.0%) less than the
total operating expenses of $3,357.2 million for the year ended December
31, 1997, representing a net change in the following expense groups:
* Salaries, wages and benefits of $1,198.9 million for 1998
were $25.2 million (2.1%) less than 1997, primarily due to a
decrease in the average number of employees, offset by
increases in wage rates. The average number of employees
declined 6.1% to 21,981 in 1998 as compared to 23,413 in
1997. A reduction of the number of employees occurred in
several areas, particularly those impacted by the reduction
in flying or maintenance of older narrow and widebody
aircraft.
* Earned stock compensation charges of $27.5 million for 1998
versus $4.2 million for 1997 represent the non-cash
compensation charge recorded to reflect the expense
associated with the distribution of shares of stock on
behalf of employees as part of the 1995 reorganization. The
1998 charge is related to incentive shares issued in July
1998 under the ESIP as a result of the achievement of
certain common stock target prices in February and March
1998. The 1997 charge is related to the allocation of
shares to the pilots' employee benefit plan (the "ESOP"),
which became fully allocated in 1997.
* Aircraft fuel and oil expense of $344.6 million for 1998 was
$136.3 million (28.3%) less than expenses of $480.9 million
for 1997. Approximately $100.9 million of the decrease was
due to a reduction in the average cost of fuel from 65.9
cents per gallon in 1997 to 51.0 cents per gallon in 1998.
The remaining $35.4 million decrease was due to the
reduction in gallons consumed (675.8 million gallons in 1998
compared to 730.3 million gallons in 1997) resulting from
the replacement of B-747, L-1011 and B-727 aircraft with
more fuel efficient B-757, B-767 and MD-80 aircraft and the
elimination of certain unprofitable international routes.
* Passenger sales commission expense of $197.9 million for
1998 was $44.2 million (18.3%) less than the expense of
$242.1 million in 1997 primarily due to:
(1) a 23.9% decrease in average domestic commission
rates due to a reduction in domestic base
commission rates in October 1997 and a
commission cap implemented in May 1998;
(2) a 7.8% decrease in domestic commissionable
tickets sold during 1998 versus 1997, resulting
in part from an increase in electronic
ticketing; and
(3) a decrease in commissions on international
passenger revenues, which declined 19.1% as the
Company continued to restructure its
international operations.
* Aircraft maintenance material and repairs expense of $129.7
million for 1998 represented a decrease of $8.7 million
(6.3%) from $138.4 million for 1997. The decrease was
primarily the result of higher levels of maintenance on
narrow-body aircraft during 1997, reduced material usage on
wide-body aircraft and engines in 1998 due to the retirement
of the B-747 and L-1011 fleets, a reduction in unprofitable
contract maintenance work performed on both government and
commercial aircraft and engines, and the effect of adding
new lower maintenance B-757, B-767 and MD-80 aircraft to the
fleet.
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* Depreciation and amortization expense increased $2.6 million
(1.7%) in 1998 to $153.0 million compared to $150.4 million
in 1997. Depreciation of aircraft increased $7.7 million
primarily as a result of the purchase of five B-767 aircraft
previously leased by TWA under operating leases from the end
of 1997 through the first six months of 1998, which was
partially offset by reduced depreciation, amortization and
obsolescence provided for the B-747 and L-1011 fleets, which
were retired.
* Operating lease rentals of $458.3 million for 1998 were
$87.5 million (23.6%) more than the rentals of $370.8
million for 1997. Aircraft lease rentals increased $68.3
million versus 1997 reflecting additional new B-757 and
MD-80 aircraft leases in 1998 which replaced older L-1011
and B-747 wide-body aircraft and B-727 aircraft retired from
the fleet. The remainder of the increase ($19.2 million)
related to a non-recurring charge of $9.0 million for certain
retroactive facilities rentals in addition to increased
space rentals at other airports.
* Passenger food and beverage expense of $89.0 million during
1998 represented an increase of $5.8 million (7.0%) from
$83.2 million during 1997. The increase was related to a
significant increase of 35.8% in first class enplaned
passengers and associated improved menu offerings primarily
in TWA's domestic First Class ("Trans World First") and
international business ("Trans World One") services
partially offset by a slight decline in coach enplaned
passengers of 2.7% and selective menu changes to mitigate
the overall cost impact. Overall, 1998 scheduled boardings
were 2.3% higher than 1997 boardings.
During the fourth quarter of 1998, special charges of $42.6
million were recorded in connection with the elimination of excess
overhead items and the Company's ongoing fleet renewal program. These
charges included $25.0 million related to the planned retirement of
B-727 and non-hushkitted DC-9 fleets and $17.6 million for the ongoing
restructuring of international operations and the closure of the Los
Angeles reservations office, both of which include significant employee
severance costs. See Note 14 to the consolidated financial statements
for a further discussion of these special charges.
All other operating expenses increased $19.6 million (3.0%) to
$682.7 million in 1998 from $663.1 million during the year ended
December 31, 1997. Expenses increased in several categories including
computerized reservation system fees ($11.0 million), Worldspan
transaction fees ($5.6 million), advertising and publicity primarily
associated with the launch of new TWA services including "Trans World
First", "TWQ" and the "Aviators" frequent flier program ($5.9 million),
legal fees and expenses ($7.3 million) and uncollectible accounts ($3.2
million). Offsetting decreases occurred as a result of lower insurance
premiums and uninsured losses ($9.8 million) and expenses related to
TWA's subsidiary, Getaway Vacations, ($5.9 million).
Other charges (credits) were a net charge of $42.0 million for
1998, compared to $60.1 million for 1997. Interest expense increased
$2.9 million in 1998 over 1997 as a result of the addition of new debt
during 1998 and the latter part of 1997. Interest and investment income
increased by $10.4 million in 1998 primarily as a result of higher
levels of invested funds. Dispositions of assets resulted in net gains
of $20.1 million in 1998, compared to $16.0 million in 1997. The net
gains in 1998 primarily included the sale of certain retired, wide-body
aircraft, engines and other surplus equipment while the net gains in
1997 related to the sale of three gates at Newark International Airport
and spare flight equipment. Other charges and credits-net improved by
$6.4 million to a net credit of $29.8 million for 1998 from a net credit
of $23.4 million for 1997. In May 1998, the U.S. Supreme Court refused
to hear an appeal of a decision reversing a 1991 judgment against TWA in
an action brought by Travellers. Accordingly, a cash undertaking
previously posted by TWA of $13.7 million was
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returned to TWA in June 1998 and recorded as a credit in the second
quarter. After deduction of $3.3 million for reimbursement of certain
administrative costs previously incurred by TWA, $10.4 million received
pursuant to this proceeding was applied in July 1998 to reduce the
promissory notes issued to the Pension Benefit Guaranty Corporation
("PBGC Notes") pursuant to a pre-existing agreement. Partially offsetting
this favorable change was a decrease in TWA's equity in the earnings of
Worldspan ($2.2 million) and an increase in provisions for losses
resulting from claims and litigation judgments against TWA ($1.2
million).
The provision for income taxes in 1998 and 1997 related primarily
to foreign taxes. In future periods, the amortization of reorganization
value in excess of amounts allocable to identifiable assets and certain
other non-deductible items will likely result in the Company's effective
tax rate for financial reporting purposes exceeding statutory rates,
notwithstanding the Company's substantial net operating loss
carryforwards. See Note 5 to the Consolidated Financial Statements.
As a result of the above, the operating loss of $65.2 million for
1998 was $35.9 million greater than the operating loss of $29.3 million
for 1997 and the net loss of $120.5 million for 1998 was $9.7 million
greater than the net loss of $110.8 million for 1997. The operating and
net losses for 1998 included special charges for nonrecurring items of
$42.6 million as further described in Note 14 to the Consolidated
Financial Statements. The 1998 net loss also included $13.1 million in
extraordinary charges related to the early extinguishment of debt while
the 1997 net loss included $21.0 million of such charges.
RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
COMPARED TO THE FISCAL YEAR ENDED DECEMBER31,1996
Total operating revenues of $3,328.0 million for 1997 were $226.4
million or 6.4% less than the total operating revenues of $3,554.4
million for the year ended December 31, 1996. The decrease was
primarily reflected in TWA passenger revenues, which were $153.9 million
less than in 1996, resulting from the elimination of certain
unprofitable international destinations and the planned reduction in
capacity as the Company replaced older L-1011 and B-747 aircraft with
new B-757, B-767 and MD-80 aircraft on many routes. Additionally,
revenues from contract work decreased $41.8 million primarily due to the
termination of an unprofitable aircraft maintenance contract with the U.
S. government and overall reduction in other third party maintenance as
the Company focused its resources on maintenance of its own aircraft.
Revenue from freight and mail also decreased $26.3 million as a result
of the reduction in capacity.
As a result of the Company's planned retirement of older widebody
aircraft and elimination of unprofitable services, capacity and traffic
decreased in 1997 as compared to 1996. System-wide capacity, measured
in ASMs, decreased by 10.2% in 1997 as compared to 1996 (reflecting a
2.8% decrease in domestic ASMs and a 31.5% decrease in international
ASMs). Passenger traffic volume, as measured by total RPMs in scheduled
service, decreased 7.4% in 1997 over 1996. Passenger load factor for
1997 was 68.8% compared to 66.8% in 1996. TWA's yield per passenger
mile increased from 11.35 cents in 1996 to 11.65 cents in 1997.
Reflecting the Company's efforts to improve productivity and
reduce operating costs, operating expenses declined to $3,357.2 million
in 1997, $395.7 million (10.5%) lower than the total operating expenses
of $3,752.9 million for the year ended December 31, 1996, representing a
net change in the following expense groups:
* Salaries, wages and benefits of $1,224.1 million for 1997
were $30.2 million (2.4%) less than 1996, primarily due to a
decrease in the average number of employees. The average
number of employees declined 3.5% to 23,413 in 1997 as
compared to 24,254 in 1996. A reduction of the number of
employees occurred in several areas, particularly those
impacted by the reduction in flying or maintenance of older
narrow and widebody aircraft.
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* Earned stock compensation charges of $4.2 million for 1997
and $9.1 million for 1996 represent primarily the non-cash
compensation charge recorded to reflect the expense
associated with the distribution of shares of stock on
behalf of employees as part of the 1995 reorganization. For
a further discussion of future charges related to non-cash
compensation, see Note 8 to the Consolidated Financial
Statements.
* Aircraft fuel and oil expense of $480.9 million for 1997 was
$104.3 million (17.8%) less than expenses of $585.2 million
for the year ended December 31, 1996. The decrease in
expenses was primarily due to decreases in the price of fuel
($28.2 million) and in gallons consumed ($76.1 million).
* Passenger sales commission expense of $242.1 million for
1997 was $26.0 million (9.7%) less than the expense of
$268.1 million in 1996 primarily related to the $153.9
million decrease in TWA passenger revenues. Other factors
contributing to the decrease were a reduction in commission
rates in October 1997 and a decrease in the percentage of
commissionable sales resulting in decreases in commission
expense of $7.1 million and $3.2 million, respectively.
* Aircraft maintenance materials and repairs expense of $138.4
million in 1997 represented a decrease of $69.8 million
(33.5%) from $208.2 million for 1996. The decrease was
primarily the result of higher levels of scheduled
maintenance in 1996, including heavy maintenance, a 3.0%
decrease in flying hours in 1997 versus 1996, addition of
new aircraft and retirement of old aircraft from TWA's
fleet, and a decrease in contract repair work performed by
the Company for other air carriers and third parties. The
average age of TWA's operating fleet decreased from 19.0
years at December 31, 1996 to 16.9 years at December 31,
1997.
* Depreciation and amortization expense decreased $11.4
million from $161.8 million in 1996 to $150.4 million in
1997 primarily represented by decreases in the provision for
obsolescence ($7.0 million), depreciation of aircraft ($3.0
million) and amortization of intangible assets ($1.2
million). The decrease in obsolescence was significantly
related to the retirement of L-1011 and B-747 aircraft
fleets and its replacement with newer aircraft fleets. The
decrease in aircraft depreciation was related to B-727-200,
B-747 and L-1011 fleets becoming fully depreciated partially
offset by increased depreciation on B-757, B-767 and DC9-30
fleets related to new aircraft acquisitions and aircraft
modifications on the DC9-30 aircraft associated with noise
compliance and aging aircraft. The decrease in amortization
of intangible assets was related to the 1996 write-off of
the carrying value of TWA's New York to Athens route
authority as a result of TWA's decision to discontinue
unprofitable service to Athens and the sale of three gates
at Newark International Airport in early 1997.
* Operating lease rentals of $370.8 million for 1997 were
$67.8 million (22.4%) more than the total rentals of $303.0
million for 1996. The increase was primarily due to an
increase in the average number of aircraft under operating
leases from 123 in 1996 to 137 in 1997 and higher lease
rates attributed to the introduction of newer aircraft into
the fleet.
* Passenger food and beverage expense of $83.2 million in 1997
represented a decrease of $26.9 million (24.4%) from $110.1
million for the twelve months of 1996. The decrease was
primarily due to a 29.7% reduction in the number of
passengers boarded on international flights resulting from
the 31.5% reduction in international scheduled ASMs together
with savings derived from changes and improved efficiencies
in food and beverage service.
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During the fourth quarter of 1996, special charges of $85.9
million were recorded in connection with the Company's decision to
modify its international route structure and related aircraft fleet
plan. The charges included a write-off of the carrying value of TWA's
New York-Athens route authority ($26.7 million) and international
employee severance liabilities ($5.5 million) related to the termination
of service to Athens and Frankfurt. The 1996 special charges also
included a reduction in carrying value of TWA's owned L-1011 and B-747
fleets ($32.2 million) and the related inventories ($21.5 million).
These charges were based upon management's estimate of the amounts to be
realized upon the disposition of these assets when removed from service.
Actual amounts could materially differ from such estimates. See Note 14
to the Consolidated Financial Statements for a further discussion of
these special charges.
All other operating expenses decreased $104.1 million (13.6%) to
$663.1 million in 1997 from $767.2 million during the year ended
December 31, 1996. Decreases were noted in the cost of services sold
($19.3 million), cost of services purchased ($23.0 million), advertising
and publicity ($17.8 million), navigation charges ($9.4 million),
landing fees ($6.4 million), subsidiary expenses ($7.4 million),
uncollectible accounts ($5.6 million), taxes-other than income ($5.4
million) and numerous other miscellaneous categories. These decreases
were primarily related to TWA's planned reductions in capacity (10.2%
reduction in system scheduled ASMs) and maintenance performed for third
parties.
Other charges (credits) were a net charge of $60.1 million for
1997 as compared to $76.1 million for 1996. Interest expense decreased
$12.8 million in 1997 over 1996 as a result of the reduction of debt
arising from the 1995 restructuring and additional reductions of debt
during 1997 and 1996. Interest income decreased by $8.8 million in 1997
primarily as a result of lower levels of invested funds. Dispositions
of assets resulted in a net gain of $16.0 million in 1997, compared to a
net loss of $1.1 million in 1996. The net gain in 1997 included $7.4
million from the sale of three gates at Newark International Airport and
$8.6 million from the sale of aircraft, engines and other property.
Other charges and credits-net were unfavorable by $5.2 million in 1997
compared to 1996, primarily due to a $1.2 million decline in foreign
currency translation adjustments, a $1.7 million decrease in vendor
discounts and a $2.5 million credit in 1996 to reflect a litigation
settlement.
The provision for income taxes in 1997 and 1996 related primarily
to foreign taxes. In future periods, the amortization of reorganization
value in excess of amounts allocable to identifiable assets and certain
other non-deductible items will likely result in the Company's effective
tax rate for financial reporting purposes exceeding statutory rates,
notwithstanding the Company's substantial net operating loss
carryforwards. See Note 5 to the Consolidated Financial Statements.
As a result of the above, the operating loss of $29.3 million for
1997 was $169.2 million less than the operating loss of $198.5 million
for 1996. The net loss of $110.8 million for 1997 was $174.0 million
less than the net loss of $284.8 million for 1996. The operating and
net losses for 1996 included special charges for nonrecurring items of
$85.9 million as further described in Note 14 to the Consolidated
Financial Statements. The 1996 net loss also included $9.8 million in
extraordinary charges related to the early extinguishment of debt while
the 1997 net loss included $21.0 million of such charges.
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LIQUIDITY AND CAPITAL RESOURCES
The following is a discussion of the impact of significant factors
affecting TWA's liquidity position and capital resources. These
comments should be read in conjunction with, and are qualified in their
entirety by, the Consolidated Financial Statements and Notes thereto.
Liquidity
The Company's consolidated cash and cash equivalents balance at
December 31, 1998 was $252.4 million, a $14.6 million increase from the
December 31, 1997 balance of $237.8 million. The net increase in cash
and cash equivalents during 1998 was due, in large part, to cash
provided by financing activities of $131.9 million in 1998 versus $112.2
million in 1997. Sources of cash generated by financing activities
included proceeds from the sale of notes of $144.9 million and $261.9
million from the sale and leaseback of certain aircraft and engines in
1998 versus proceeds of $277.7 million from notes and warrants issued,
$17.6 million from the sale and leaseback of certain aircraft and $82.2
million from the sale of preferred stock in 1997. These proceeds were
partially offset by the repayment of long-term debt and capital lease
obligations of $254.0 million in 1998 versus $257.8 million in 1997.
The unfavorable change in cash used by operating activities reflects
an increase in the net loss from 1997 to 1998 of $9.7 million. Additionally,
net discounted sales from tickets sold under the 99 month Karabu ticket
program agreement between the Company and Karabu have been excluded from
cash flows from operating activities as the related amounts were applied
to reduce certain loans to the Company provided by Karabu (the "Icahn
Loans") and the PBGC Notes. During 1998, $148.3 million of these proceeds
was applied to reduce the PBGC Notes. In 1997, the proceeds applied to
reduce the Icahn loans were $53.8 million in addition to $70.3 million
applied to reduce the PBGC Notes. On December 30, 1997, TWA repaid the
outstanding balance of the Icahn Loans out of the proceeds of a receivables
securitization offering by the Company. In December 1998, the PBGC Note
were paid in full primarily with the proceeds from ticket sales.
Accordingly, proceeds from the sales of tickets under the Karabu ticket
agreement are now paid directly to TWA. Accounts payable and accrued
expenses also generated a use of cash in 1998 of $28.8 million primarily
due to the timing of payments of certain obligations compared to providing
cash in 1997 of $42.5 million.
Cash used by investing activities was $34.6 million in 1998
compared to $56.3 million in 1997. Components of this net change
include an increase in capital expenditures (including aircraft pre-
delivery payments) to $92.6 million in 1998 versus $74.0 million in
1997. However, gross proceeds from assets sold during 1998 were
$35.9 million primarily from the sale of retired, wide-body aircraft,
engines and other surplus equipment while 1997 proceeds of $22.7 million
represented $10.0 million for three gates at Newark International
Airport and approximately $12.7 million primarily from the sale of spare
flight equipment, aircraft and engines. Additionally, approximately $17.0
million was provided in 1998 primarily due to the release of cash from
previously restricted deposits and the release of cash collateral
supporting certain letters of credit. Cash provided by financing
activities and cash used in investing activities exclude a total of
$102.5 million principal amount of notes issued by TWA in 1998 as
consideration for the purchase of aircraft. In July 1998, $44.8 million
principal amount of these notes were converted into TWA common stock.
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Capital Resources
TWA generally must satisfy all of its working capital expenditure
requirements from cash provided by operating activities, from external
capital sources or from the sale of assets. However, TWA has pledged a
substantial portion of its assets to secure various issues of
outstanding debt. TWA's financing agreements generally require TWA to
apply the sale proceeds from the sale of any pledged assets to repay the
corresponding debt. If TWA is unable to obtain additional capital, the
Company may not be able to make certain capital expenditures or to
continue to implement certain other aspects of its strategic plan, and
TWA may therefore be unable to achieve the full benefits expected from
the plan.
Commitments
TWA entered into an agreement in February 1996 with Boeing for the
purchase of ten B-757-231 aircraft and related engines, spare parts and
equipment for an aggregate purchase price of approximately $500 million.
As of December 31, 1998, TWA had taken delivery of six aircraft and had
four on firm order. Five of the six aircraft already delivered were
originally manufacturer-financed and one was leased. In separate
transactions in June, July and October 1998, these five manufacturer-
financed aircraft were sold to, and leased back from, an aircraft
lessor. The four remaining aircraft are scheduled to be delivered in
1999 and 2000. The first of these aircraft was delivered in March 1999
and was immediately sold to, and leased back under an operating lease
from an aircraft lessor. TWA has obtained commitments for debt financing
for approximately 80% of the cost of acquiring two of the remaining three
aircraft and commitments for 100% lease financing of the cost of acquiring
the remaining aircraft. In September 1998, TWA entered into an agreement
with Boeing to acquire four additional B-757-231 aircraft to be delivered
during 1999. TWA has obtained commitments for debt financing for
approximately 80% of the cost of acquiring these aircraft. These commitments
are subject to, among other things, material adverse change clauses that make
the availability of this debt and lease financing dependent upon the
financial condition of TWA at the time of delivery.
The Company has entered into an agreement for the operating lease
for one additional B-767-300ER and three additional B-757-200 aircraft.
These aircraft are scheduled to be delivered in 1999, excluding one
B-757-200 that is scheduled for delivery in January 2000.
The Company has granted to a major financial institution the
option to purchase and leaseback to TWA, under substantially the same
terms and conditions as another B-757 aircraft previously leased to TWA
in 1998, four of the eight B-757-231 aircraft to be delivered by Boeing
during 1999.
In 1989, TWA entered into agreements with AVSA, S.A.R.L. ("Airbus")
and Rolls-Royce plc relating to the purchase of ten A330-300 twin-engine
wide-body aircraft and related engines, spare parts and equipment for an
aggregate purchase price of approximately $1.0 billion. The agreements,
as amended, require the delivery of the aircraft in 2001 and 2002 and
provide for the purchase of up to ten additional aircraft. TWA has not
yet made arrangements for the permanent financing of the purchases
subject to the agreements. In the event of cancellation, predelivery
payments of approximately $18 million may be subject to forfeiture.
In 1996, TWA entered into an agreement to acquire from Boeing 15
new MD-83s, to be financed by long-term leases. As of December 31,
1998, TWA had taken delivery of 13 of the MD-83 aircraft and expects to
take delivery of two additional planes in 1999.
In April 1998, TWA entered into an agreement with Boeing to
acquire 24 additional new MD-83 aircraft, with deliveries in 1999. The
Company has obtained commitments for long-term debt and lease financing
for these aircraft.
42
<PAGE>
<PAGE>
In December 1998, TWA announced that it had signed letters of
intent to acquire an additional 125 new aircraft: 50 Boeing 717-200
aircraft for delivery beginning in 2000, 50 Airbus A318 aircraft for
delivery beginning in 2003 and 25 Airbus "A320 Family" aircraft for
delivery beginning in 2005. In addition to these 125 firm orders, TWA
has taken options on an additional 50 Boeing 717s and an additional 75
"A320 Family" aircraft. The letter of intent includes financing for all
of the firm order aircraft. The terms of the purchase orders and the
related financing are subject to further negotiation and the signing of
definitive agreements. These new aircraft would primarily replace B-
727, DC-9 and older MD-80 aircraft currently in TWA's fleet.
TWA elected to comply with the transition requirements of the
Noise Act by adopting the Stage 2 aircraft phase-out/retrofit option,
which requires that 50% of its base level (December 1990) Stage 2 fleet
be phased-out/retrofitted by December 31, 1996. To comply with the 1996
requirement, the Company has retrofitted, by means of engine hush-kits,
30 of its DC-9 aircraft at an aggregate cost of approximately $55.5
million, most of which was financed by lessors with repayments being
facilitated through increased rental rates or lease term extensions.
TWA complied with the transition requirements for December 31, 1998, by
having 75% of its fleet meet Stage 3 requirements through the grounding
of older Stage 2 aircraft in combination with the acquisition of Stage 3
aircraft. By December 31, 1999, 100% of the fleet must meet Stage 3
requirements.
In February 1999, TWA signed letters of intent with an aircraft
lessor to sell and leaseback six Boeing 767-200 aircraft which would
subsequently be returned to the lessor and replaced with three Boeing
767-300 aircraft from the same aircraft lessor. In connection with
this transaction, the Company has made an offer to purchase for cash
up to $28.8 million total principal amount of its outstanding 11 3/8%
Senior Secured Notes due April 15, 2003 and any and all of its outstanding
10 1/4% Senior Secured Notes due June 15, 2003 (collectively, the "Notes").
The offer to purchase is subject to the consummation of the sale by TWA
of the collateral that currently secures the Notes.
The Company had noncancellable operating leases in effect at December
31, 1998 (see Note 4 to the consolidated financial statements).
Certain Other Capital Requirements
TWA generally does not commit to expenditures for facilities and
equipment, other than aircraft, before purchase and, therefore, no such
significant commitments exist at the present time. TWA's ability to
finance these expenditures will depend in part on TWA's financial
condition at the time of the proposed expenditure.
Year 2000
TWA utilizes software and related computer technologies essential
to its operations that use two digits rather than four to specify the
year, which will result in a date recognition problem in the year 2000
and thereafter unless modified. TWA has completed an assessment to
determine the changes needed to make its computer systems, internal
operating systems and equipment year 2000 compliant and is executing a
plan to implement these changes. The Company currently expects that it
will complete the necessary changes and testing for its mission critical
systems in the third quarter of 1999.
TWA estimates that the total cost to complete the remediation of
its information technology systems is approximately $19.3 million, which
is approximately 20% of the Company's total information technology
budget for the project duration period. As of December 31, 1998, the
Company estimates that approximately 45% of the cost to complete the
remediation of its computer systems had been incurred. As of December
31, 1998, approximately 60% of the systems had been remediated. TWA
has substantially completed assessments and begun remediation for the
non-information technology related systems. The Company currently
estimates the remediation costs related to infrastructure and facilities
enhancements necessary to prepare its systems for the year 2000 will
range from $2 million to $4 million, which it plans to fund through
operating cash flows. The costs of the Company's year 2000 project and
the date on which it will be completed are based on management's best
estimates and include assumptions regarding modification plans of third
parties. However, there can be no assurance that these estimates will
be achieved and actual results could differ materially from those
anticipated.
TWA has also reviewed software that was purchased from outside
vendors and has evaluated its reliance on other third parties (e.g. the
FAA, the DOT, airport authorities, data providers and suppliers) to
43
<PAGE>
<PAGE>
determine and minimize the extent to which its operations may be
dependent on these third parties to remediate the year 2000 issues in
their systems. Outside vendors and other third parties have either
provided TWA with year 2000 compliant versions of their products or
informed TWA that all mission critical systems from such parties are in
the process of being remediated. To help insure compliance, TWA is
continuing to set up and perform independent testing with these systems.
Although the Company currently has day-to-day operational contingency
plans, management is in the process of reviewing and modifying these
plans for each mission critical system for possible year 2000-specific
operational requirements. TWA's emphasis in this process is on
passenger safety, and then on business continuity. Further, TWA has
been actively participating in the industry reviews led by the Air
Transport Association and the International Air Transport Association.
TWA's business, operating results and financial condition could be
materially adversely affected by the failure of its systems or those of
other parties to operate properly beyond 1999.
Fuel Hedging
In September 1998, TWA entered into future jet fuel fixed price
swaps with respect to a minor portion of its fuel requirements during
1999 to provide a hedging mechanism against significant increases in jet
fuel prices. See Note 19 to the consolidated financial statements for
further discussion of fuel hedging activities.
Reorganization
During the period from 1992 through 1995, TWA underwent two
separate Chapter 11 bankruptcy reorganizations, the first in 1992-93,
and the second in 1995. In connection with the 1995 reorganization, TWA
applied fresh start reporting in accordance with generally accepted
accounting principles, which resulted in the creation of a new reporting
entity for accounting purposes and TWA's assets and liabilities being
adjusted to reflect fair values on the effective date of the 1995
reorganization.
As a result of the application of fresh start reporting,
substantial values were assigned to routes, gates and slots ($458.4
million) and reorganization value in excess of amounts allocable to
identifiable assets ($839.1 million). TWA has evaluated its future cash
flows and notwithstanding the operating losses experienced since the
1995 reorganization, expects that the carrying value of the intangibles
at December 31, 1998, will be recovered. However, the achievement of
these improved future operating results and cash flows are subject to
considerable uncertainties. In future periods, TWA will evaluate these
intangibles for recoverability based upon estimated future cash flows.
If TWA does not achieve these expectations, it may be required to charge
future operations for impairment of these assets, and these charges
could be material.
Availability of NOLs
TWA estimates that it had, for federal income tax purposes, net
operating loss carryforwards ("NOLs") amounting to approximately $975
million at December 31, 1998. Such NOLs expire in 2008 through 2018 if
not utilized before then to offset taxable income. Section 382 of the
Internal Revenue Code of 1986, as amended, and regulations issued
thereunder impose limitations on the ability of corporations to
use NOLs if the corporation experiences a more than 50% change in
ownership during certain periods. Changes in ownership in future
periods could substantially restrict the Company's ability to utilize
its tax net operating loss carryforwards. The Company believes that no
such ownership change has occurred subsequent to the 1995
reorganization. There can be no assurance, however, that such an
ownership change will not occur in the future. In addition, the NOLs
are subject to examination by the Internal Revenue Service ("IRS") and,
thus, are subject to adjustment or disallowance resulting from any such
IRS examination. For financial
44
<PAGE>
<PAGE>
reporting purposes, the tax benefits related to the utilization of the
tax net operating loss carryforwards generated prior to the 1995
reorganization of approximately $491 million will, to the extent
realized in future periods, have no impact on the Company's operating
results, but instead be applied to reduce reorganization value in excess
of amounts allocable to identifiable assets.
Sale of Equant Shares
TWA is a long-term member of the Societe Internationale de
Telecommunications Aeronautiques ("SITA"), a worldwide provider of
communication services to the aviation industry. In February 1999, SITA
divested a portion of its shares in Equant N.V., a telecommunication
network company, through a secondary offering. As a member of SITA, TWA
indirectly participated in the sale of its holdings in Equant, resulting
in a reported gain and receipt of cash of approximately $21.3 million.
Additionally, Worldspan, an affiliate, also participated in the
divestiture of Equant, resulting in the additional recognition of gain by
TWA of approximately $2.6 million as an equity participant in the
earnings of Worldspan. The above transactions will be included in TWA's
financial results for the first quarter of 1999.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement establishes accounting and reporting
standards for derivative instruments and all hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities at their fair values. Accounting for changes in the fair
value of a derivative depends on its designation and effectiveness. For
derivatives that qualify as effective hedges, the change in fair value
will have no impact on earnings until the hedged item affects earnings.
For derivatives that are not designated as hedging instruments, or for
the ineffective portion of a hedging instrument, the change in fair
value will affect current period earnings. The Company will adopt
Statement No. 133 during its first quarter of fiscal 2000 and does not
presently believe that it will have a significant effect on its results
of operations or cash flows.
45
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<PAGE>
ITEM 7A. MARKET RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
The risk inherent in the Company's market risk sensitive
instruments and positions is the potential loss arising from adverse
changes in those factors. TWA is susceptible to certain risks related
to changes in the cost of jet fuel, changes in interest rates and
foreign currency exchange rate fluctuations. The Company does not
purchase or hold any derivative financial instruments for trading
purposes.
Aircraft Fuel
Airline operators are inherently dependent upon energy to operate
and, therefore, are impacted by changes in jet fuel prices. Jet fuel
and oil consumed in 1998 represented approximately 10.4% of TWA's
operating expenses. TWA endeavors to acquire jet fuel at the lowest
prevailing prices possible.
TWA's earnings are affected by changes in the price and
availability of aircraft fuel. The Company hedges its exposure to jet
fuel price market risk only on a limited basis. The fair value of
outstanding derivative commodity instruments (primarily commodity swap
agreements) related to the Company's jet fuel price market risk both
during 1998 and at December 31, 1998 was immaterial. For further
discussion, see Note 19 to the consolidated financial statements. A one
cent change in the average cost of jet fuel would impact TWA's aircraft
fuel expense by approximately $6.8 million, based upon consumption in
1998.
Interest Rates
Airline operators are also inherently capital intensive, as the
vast majority of assets are aircraft, which are long lived. TWA's
exposure to market risk associated with changes in interest rates
relates primarily to its debt obligations. The Company does not have
significant exposure to changes in cash flows resulting from changes in
interest rates as substantially all its long-term debt carries fixed
rates of interest. The nature of fixed rate obligations does expose the
Company to the risk of changes in the fair value of these instruments.
As disclosed in Note 3 to the consolidated financial statements, the
Company has outstanding debt of $683.9 million, net of unamortized
discounts and including current maturities at December 31, 1998. The
contractual maturities of long term debt and the associated average
interest rates are as follows:
<TABLE>
<CAPTION>
Contractual
Amounts Weighted Average
Maturity Date in Thousands Interest Rate
- - ------------- ------------ ----------------
<S> <C> <C>
1999 $111,538 9.13%
2000 17,367 10.22%
2001 141,355 9.58%
2002 70,024 11.51%
2003 67,761 10.92%
Thereafter 290,000 11.44%
</TABLE>
46
<PAGE>
<PAGE>
Foreign Currency Exchange Rates
Airline operators who fly internationally are exposed to the
effect of foreign exchange rate fluctuations on the U.S. dollar value of
foreign currency-denominated operating revenues and expenses. While
international operations generated 12.8% of TWA's operating revenues in
1998, a substantial portion of these related ticket sales are denominated
in U.S. dollars. Additionally, no single foreign currency is a material
portion of that amount. The Company does not have significant exposure
to fluctuations in these currency rates because of the short-term nature
of maturities of receivables and payables related to these operations.
The Company has not undertaken additional actions to cover this currency
risk and does not engage in any other currency risk management activity.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements, which appears on page F-1
hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
47
<PAGE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item regarding the identification
of the Company's directors and executive officers is incorporated by
reference to information contained under the caption "Directors and
Executive Officers" of the Registrant's Proxy Statement for the Annual
Meeting of Stockholders to be held on May 25, 1999.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference
to information contained under the caption "Executive Compensation" of
the Registrant's Proxy Statement for the Annual Meeting of Stockholders
to be held on May 25, 1999.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this item is incorporated by reference
to information contained under the caption "Security Ownership of
Certain Beneficial Owners and Management" of the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on May 25,
1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference
to information contained under the caption "Security Ownership of
Certain Beneficial Owners and Management" of the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on May 25,
1999.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
Financial Statements and Schedules. See Index to Financial
Statements and Schedules, which appears on page F-1 hereof.
Reports on Form 8-K. No reports on Form 8-K were filed during the
fourth quarter of 1998.
Exhibits. The exhibits listed on the Exhibit Index following the
signature page hereof are filed herewith in response to this Item.
48
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
<CAPTION>
PAGE NO.
--------
<S> <C>
FINANCIAL STATEMENTS:
Independent Auditors' Report F-2
Statements of Consolidated Operations for the Years Ended December 31, 1998,
1997 and 1996 F-3
Consolidated Balance Sheets, December 31, 1998 and 1997 F-4
Statements of Consolidated Cash Flows for the Years Ended December 31, 1998,
1997 and 1996 F-6
Consolidated Statements of Shareholders' Equity (Deficiency) for the Years Ended
December 31, 1998, 1997 and 1996 F-8
Notes to Consolidated Financial Statements F-9
SCHEDULE:
II Valuation and Qualifying Accounts S-1
</TABLE>
SCHEDULES OMITTED
Schedules not filed herewith are omitted because of the absence of
conditions under which they are required or because the information
called for is shown in the financial statements or notes thereto.
F-1
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Trans World Airlines, Inc.:
We have audited the accompanying consolidated balance sheets of
Trans World Airlines, Inc. and subsidiaries as of December 31, 1998 and
1997, and the related statements of consolidated operations, cash flows
and shareholders' equity (deficiency) for each of the years in the
three-year period ended December 31, 1998. In connection with our audits
of the consolidated financial statements, we have also audited the
financial statement schedule for each of the years in the three-year
period ended December 31, 1998. These consolidated financial statements
and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidated financial statements and the financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Trans World Airlines, Inc. and subsidiaries as of December 31, 1998
and 1997, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1998, in
conformity with generally accepted accounting principles. Also in our
opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set
forth therein.
KPMG LLP
Kansas City, Missouri
February 19, 1999
F-2
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
For the Years Ended December 31, 1998, 1997 and 1996
(Amounts in Thousands Except Per Share Amounts)
<CAPTION>
Years Ended December 31,
----------------------------------------------
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Operating revenues:
Passenger $2,895,199 $2,924,042 $3,077,905
Freight and mail 102,424 126,730 153,076
All other 261,524 277,180 323,426
---------- ---------- ----------
Total 3,259,147 3,327,952 3,554,407
---------- ---------- ----------
Operating expenses:
Salaries, wages and benefits 1,198,876 1,224,116 1,254,341
Earned stock compensation (Note 8) 27,544 4,199 9,056
Aircraft fuel and oil 344,603 480,853 585,163
Passenger sales commissions 197,927 242,135 268,131
Aircraft maintenance materials and repairs 129,663 138,353 208,183
Depreciation and amortization 152,997 150,381 161,822
Operating lease rentals 458,338 370,827 302,990
Passenger food and beverages 89,035 83,241 110,092
Special charges (Note 14) 42,632 - 85,915
All other 682,691 663,107 767,241
---------- ---------- ----------
Total 3,324,306 3,357,212 3,752,934
---------- ---------- ----------
Operating loss (65,159) (29,260) (198,527)
---------- ---------- ----------
Other charges (credits):
Interest expense 116,918 114,066 126,822
Interest and investment income (24,975) (14,560) (23,288)
Disposition of assets, gains and losses-net
(Note 15) (20,087) (16,004) 1,135
Other charges and credits - net (Note 16) (29,846) (23,427) (28,619)
---------- ---------- ----------
Total 42,010 60,075 76,050
---------- ---------- ----------
Loss before income taxes and
extraordinary items (107,169) (89,335) (274,577)
Provision for income taxes (Note 5) 243 527 450
---------- ---------- ----------
Loss before extraordinary items (107,412) (89,862) (275,027)
Extraordinary items, net of income taxes
(Note 13) (13,069) (20,973) (9,788)
---------- ---------- ----------
Net loss (120,481) (110,835) (284,815)
Preferred stock dividend requirements 23,454 16,119 36,649
---------- ---------- ----------
Loss applicable to common shares $ (143,935) $ (126,954) $ (321,464)
---------- ---------- ----------
Basic earnings per share amounts:
Loss before extraordinary items and special
dividend requirement $ (2.14) $ (1.98) $ (6.60)
Extraordinary items and special dividend
requirement (.21) (.39) (.67)
---------- ---------- ----------
Net loss $ (2.35) $ (2.37) $ (7.27)
========== ========== ==========
See notes to consolidated financial statements
</TABLE>
F-3
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997
(Amounts in Thousands)
ASSETS
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 252,408 $ 237,765
Receivables, less allowance for doubtful accounts,
$14,459 in 1998 and $9,334 in 1997 (Note 3) 170,492 176,333
Spare parts, materials and supplies, less allowance for
obsolescence, $20,554 in 1998 and $19,176 in 1997 (Note 3) 99,909 96,108
Prepaid expenses and other 82,605 122,751
---------- ----------
Total 605,414 632,957
---------- ----------
Property (Notes 3, 4 and 11):
Property owned:
Flight equipment 414,645 569,063
Prepayments on flight equipment 69,875 15,431
Land, buildings and improvements 68,812 62,854
Other property and equipment 72,108 64,131
---------- ----------
Total property owned 625,440 711,479
Less accumulated depreciation 136,336 114,921
---------- ----------
Property owned-net 489,104 596,558
---------- ----------
Property held under capital leases:
Flight equipment 176,094 166,358
Land, buildings and improvements 49,431 49,443
Other property and equipment 9,093 7,704
---------- ----------
Total property held under capital leases 234,618 223,505
Less accumulated amortization 103,692 78,298
---------- ----------
Property held under capital leases-net 130,926 145,207
---------- ----------
Total property-net 620,030 741,765
---------- ----------
Investments and other assets:
Investments in affiliated companies (Note 2) 124,429 117,293
Investments, receivables and other (Note 4) 149,206 162,969
Routes, gates and slots-net 356,324 377,691
Reorganization value in excess of amounts allocable to identifiable
assets-net 699,220 741,173
---------- ----------
Total 1,329,179 1,399,126
---------- ----------
$2,554,623 $2,773,848
========== ==========
See notes to consolidated financial statements
</TABLE>
F-4
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997
(Amounts in Thousands Except Per Share Amounts)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt (Note 3) $ 111,538 $ 51,392
Current obligations under capital leases (Note 4) 37,865 37,068
Advance ticket sales 211,340 223,197
Accounts payable, principally trade 229,368 250,551
Accounts payable to affiliated companies (Note 2) 7,167 6,261
Accrued expenses:
Employee compensation and vacations earned 159,064 119,572
Contributions to retirement and pension trusts (Note 6) 12,616 13,469
Interest on debt and capital leases 33,156 32,018
Taxes 11,447 14,146
Other accrued expenses 189,278 189,271
---------- ----------
Total accrued expenses 405,561 368,476
---------- ----------
Total 1,002,839 936,945
---------- ----------
Long-term liabilities and deferred credits:
Long-term debt, less current maturities (Note 3) 572,372 736,540
Obligations under capital leases, less current obligations (Note 4) 163,046 182,922
Postretirement benefits other than pensions (Note 6) 496,848 485,787
Noncurrent pension liabilities (Note 6) 24,634 30,011
Other noncurrent liabilities and deferred credits 109,562 133,359
---------- ----------
Total 1,366,462 1,568,619
---------- ----------
Commitments and Contingent Liabilities
(Notes 1, 3, 4, 6, 7, 8, 10, 11, 12 & 14)
Shareholders' equity:
8% cumulative convertible exchangeable preferred stock,
$50 liquidation preference; 3,869 shares issued and outstanding 39 39
9 1/4% cumulative convertible exchangeable preferred stock,
$50 liquidation preference; 1,725 shares issued and outstanding 17 17
Employee preferred stock, $0.01 liquidation preference;
special voting rights; shares issued and outstanding:
1998-6,347; 1997-6,472 63 65
Common stock, $0.01 par value; shares issued and outstanding:
1998-57,768; 1997-51,393 578 514
Additional paid-in capital 730,894 693,437
Accumulated deficit (546,269) (425,788)
---------- ----------
Total 185,322 268,284
---------- ----------
$2,554,623 $2,773,848
========== ==========
See notes to consolidated financial statements
</TABLE>
F-5
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Years Ended December 31, 1998, 1997 and 1996
(Amounts in Thousands)
<CAPTION>
Years Ended December 31,
---------------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(120,481) $(110,835) $(284,815)
Adjustments to reconcile net loss to net cash provided (used)
by operating activities:
Employee earned stock compensation 27,544 4,199 9,056
Depreciation and amortization 152,997 150,381 161,822
Amortization of discount and expenses on debt 12,220 14,461 14,744
Amortization of deferred (gains)/losses on sale and leaseback
of certain aircraft and engines (10,132) (1,612) (60)
Extraordinary loss on extinguishment of debt 13,069 20,973 9,788
Interest paid in common stock - 4,125 11,332
Equity in undistributed earnings of affiliates not
consolidated (7,198) (9,404) (10,017)
Revenue from Icahn ticket program (131,822) (115,991) (71,534)
Net (gains) losses on disposition of assets (20,087) (16,004) 1,135
Non-cash special charges 42,632 - 85,915
Change in operating assets and liabilities:
Decrease (increase) in:
Receivables 1,586 65,336 3,927
Inventories (5,605) 13,496 (4,897)
Prepaid expenses and other current assets 20,054 (9,227) (28,288)
Other assets (9,985) (10,910) 111
Increase (decrease) in:
Accounts payable and accrued expenses (28,845) 42,480 83,840
Advance ticket sales (3,943) (41,301) 19,698
Other noncurrent liabilities and deferred credits (14,645) 71 (7,445)
--------- --------- ---------
Net cash provided (used) (82,641) 238 (5,688)
--------- --------- ---------
Cash flows from investing activities:
Proceeds from sales of property 35,894 22,749 3,234
Capital expenditures, including aircraft pre-delivery deposits (92,634) (74,025) (121,547)
Return of pre-delivery deposits related to leased aircraft 4,749 5,565 -
Net decrease (increase) in investments, receivables and other 17,399 (10,553) 10,941
--------- --------- ---------
Net cash used (34,592) (56,264) (107,372)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from long-term debt issued 144,938 270,608 2,750
Proceeds from warrants issued - 7,076 -
Proceeds from sale and leaseback of certain aircraft and
engines 261,946 17,600 13,800
Repayments on long-term debt and capital lease obligations (254,010) (257,838) (117,203)
Refund due to retirement of 1967 bonds - 5,318 -
Net proceeds from sale of preferred stock - 82,231 186,163
Net proceeds from exercise of equity rights, warrants and
options 2,743 2,686 1,034
Redemption of 12% Preferred Stock - - (81,749)
Cash dividends paid on preferred stock (23,741) (15,476) (14,489)
--------- --------- ---------
Net cash provided (used) 131,876 112,205 (9,694)
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents 14,643 56,179 (122,754)
Cash and cash equivalents at beginning of period 237,765 181,586 304,340
--------- --------- ---------
Cash and cash equivalents at end of period $ 252,408 $ 237,765 $ 181,586
========= ========= =========
See notes to consolidated financial statements
</TABLE>
F-6
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Years Ended December 31, 1998, 1997 and 1996
(Amounts in Thousands)
SUPPLEMENTAL CASH FLOW INFORMATION
<CAPTION>
Years Ended December 31,
--------------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Cash paid during the period for:
Interest $101,002 $ 96,865 $102,311
======== ======== ========
Income taxes $ 21 $ 14 $ 159
======== ======== ========
Information about noncash operating, investing and
financing activities:
Promissory notes issued to finance aircraft acquisitions $103,069 $177,469 $ 10,565
======== ======== ========
Promissory notes issued to finance aircraft predelivery
payments $ 36,970 $ 6,237 $ 19,862
======== ======== ========
Aircraft held for sale reclassified from property to
investments, receivables and other $ 18,931 $ - $ -
======== ======== ========
Property acquired and obligations recorded under new
capital lease transactions $ 17,208 $ 1,138 $ 4,266
======== ======== ========
Common stock issued in lieu of cash dividends on
mandatorily redeemable 12% preferred stock $ - $ - $ 3,255
======== ======== ========
Exchange of long-term debt for common stock:
Debt canceled including accrued interest, net of
unamortized discount $ 44,900 $ 48,835 $ 41,021
Common stock issued, at fair value 44,900 56,028 49,182
-------- -------- --------
Extraordinary loss $ - $ 7,193 $ 8,161
======== ======== ========
</TABLE>
ACCOUNTING POLICY
For purposes of the Statements of Consolidated Cash Flows, TWA
considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
See notes to consolidated financial statements
F-7
<PAGE>
<PAGE>
<TABLE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
For the Years Ended December 31, 1998, 1997 and 1996
(Amounts in Thousands)
<CAPTION>
8% 9 1/4% Employee Additional
Preferred Preferred Preferred Common Paid-In Accumulated
Stock Stock Stock Stock Capital Deficit Total
--------- --------- --------- ------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 $ - $ - $ 53 $351 $332,589 $ (30,138) $ 302,855
Warrants exercised - - - 4 68 - 72
Options exercised - - - 2 1,248 - 1,250
Earned stock compensation - - - - 6,875 - 6,875
Allocation of employee preferred
stock to ALPA ESOP - - 6 - (6) - -
Conversion of employee preferred
stock to common stock - - (2) 2 - - -
Net proceeds from issuance of 8%
preferred stock 39 - - - 186,124 - 186,163
Dividends on 8% preferred stock
paid in cash - - - - (11,349) - (11,349)
Dividends on mandatorily redeemable
12% preferred stock paid in common
stock - - - 3 (3) - -
Dividends on mandatorily redeemable
12% preferred stock paid in cash - - - - (3,140) - (3,140)
Amortization of the excess of
redemption value over carrying
value of mandatorily redeemable
12% preferred stock - - - - (328) - (328)
Excess of cash paid for early
redemption of mandatorily
redeemable 12% preferred
stock over carrying value - - - - (19,992) - (19,992)
Common stock issued in exchange
for 12% notes - - - 45 49,137 - 49,182
Interest on 12% Notes paid in
common stock - - - 11 11,321 - 11,332
Net loss for 1996 - - - - - (284,815) (284,815)
--- --- ---- ---- -------- --------- ---------
Balance, December 31, 1996 39 - 57 418 552,544 (314,953) 238,105
Options exercised - - - 6 3,098 - 3,104
Earned stock compensation - - - - 2,941 - 2,941
Allocation of employee preferred
stock to ALPA ESOP - - 6 - (6) - -
Conversion of employee preferred
stock to common stock - - (6) 6 - - -
Common stock issued in exchange for
12% Reset Notes - - - 77 55,951 - 56,028
Net proceeds from issuance of 9 1/4%
preferred stock - 17 - - 82,214 - 82,231
Dividends on 8% preferred stock paid
in cash - - - - (15,476) - (15,476)
Interest on 12% Reset Notes paid in
common stock - - - 6 4,119 - 4,125
Issuance of warrants with 12% Senior
Secured Notes Due 2002 - - - - 7,076 - 7,076
Issuance of employee fill-up shares - - 8 1 976 - 985
Net loss for 1997 - - - - - (110,835) (110,835)
--- --- ---- ---- -------- --------- ---------
Balance, December 31, 1997 39 17 65 514 693,437 (425,788) 268,284
Options exercised - - - 6 2,930 - 2,936
Earned stock compensation - - 8 3 13,412 - 13,423
Conversion of employee preferred
stock to common stock - - (10) 10 - - -
Dividends on 8% preferred stock paid
in cash - - - - (15,475) - (15,475)
Dividends on 9 1/4% preferred stock
paid in cash - - - - (8,266) - (8,266)
Debt for equity exchange - - - 45 44,855 - 44,900
Exercise of $14.40 warrants - - - - 1 - 1
Net loss for 1998 - - - - - (120,481) (120,481)
--- --- ---- ---- -------- --------- ---------
Balance, December 31, 1998 $39 $17 $ 63 $578 $730,894 $(546,269) $ 185,322
=== === ==== ==== ======== ========= =========
See notes to consolidated financial statements
</TABLE>
F-8
<PAGE>
<PAGE>
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Accounting policies and methods of their application that
significantly affect the determination of financial position, cash
flows, and results of operations are as follows:
(a) Description of Business: Trans World Airlines, Inc. ("TWA" or the
"Company") is the eighth largest U.S. carrier (based on revenue
passenger miles for 1998), whose primary business is transporting
passengers, cargo and mail. TWA's principal domestic routes have
a hub-and spoke structure, with a primarily domestic hub in St.
Louis at Lambert International Airport ("St. Louis") and a
domestic-international gateway at New York's John F. Kennedy
International Airport ("JFK"). TWA's domestic routes also provide
connections with its international service to and from U.S. cities
and certain major cities in Europe and the Middle East (see Note
17).
The airline industry is an intensely competitive environment and
the factors affecting competition are subject to rapid change.
The Company competes with one or more major airlines on most of
its routes (including all routes between major cities). Several
carriers have introduced or have announced plans to introduce
low-cost, short-haul service, which may result in increased
competition to the Company. Additionally, certain of the Company's
major competitors have established or announced plans to establish
alliances with one or more foreign or domestic carriers to expand
their international operations and increase the domestic market
presence. Such alliances could further intensify the competitive
environment.
The rapid growth of regional jet airline affiliates represents a
significant competitive challenge for TWA due to its reliance on
through-hub passenger traffic. A small regional jet can now offer
direct service in markets that previously were served only by
through-hub service. TWA's current IAM contracts limit TWA from
directly competing in these markets with regional jets.
Historically, the airline industry has experienced substantial
volatility in profitability as a result of, among other factors,
general economic conditions, competitive pricing initiatives, the
overall level of capacity operated in the industry and fuel
prices. These issues represent a competitive challenge for the
Company, which has higher operating costs than many regional
carriers and fewer financial resources than many of its major
competitors. TWA expects the airline industry will remain
extremely competitive for the foreseeable future.
(b) Fresh Start Reporting: Financial accounting during a Chapter 11
proceeding is prescribed in "Statement of Position 90-7 of the
American Institute of Certified Public Accountants", titled
"Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7"), which TWA adopted effective June
30, 1995. The emergence from the 1995 Chapter 11 proceeding on
August 23, 1995, resulted in the creation of a new reporting
entity without any accumulated deficit and with the Company's
assets and liabilities restated to their estimated fair values.
Because of the application of fresh start reporting, the financial
statements for periods after reorganization are not comparable in
all respects to the financial statements for periods prior to the
1995 reorganization.
(c) Consolidation: The consolidated financial statements include the
accounts of TWA and its subsidiaries. All significant
inter-company transactions have been eliminated. The results of
Worldspan, L.P. ("Worldspan"), a 26.315% owned affiliate, are
recorded under the equity method and are included in
F-9
<PAGE>
<PAGE>
the Statements of Consolidated Operations in Other Charges
(Credits) (see Note 2).
(d) Property and Depreciation: Owned property and equipment are
depreciated to residual values over their estimated useful service
lives on the straight-line method. Property held under capital
leases is amortized on the straight-line method over its estimated
useful life, limited generally by the lease period. Estimated
remaining useful service lives and residual values are reviewed
periodically for reasonableness and any necessary change is
effected at the beginning of the accounting period in which the
revision is adopted. In connection with the application of fresh
start reporting, no significant changes in the estimated useful
lives of assets have been made.
Estimated useful service lives in effect for the purpose of
computing the provision for depreciation, were:
Flight equipment (aircraft and engines, including related
spares) -- 16 to 30 years, varying by aircraft fleet type
Buildings -- 20 to 50 years
Other equipment -- 3 to 20 years
Leasehold improvements-estimated useful life limited by the
lease period
Maintenance and repairs, including periodic aircraft overhauls,
are expensed in the year incurred; major renewals and betterments
of equipment and facilities are capitalized and depreciated over
the remaining life of the asset.
(e) Intangible Assets: Route authorities are amortized on a straight
line basis over 30 years, gates over the term of the related
leases, and slots over 20 years. Routes, gates and slots consist
of the following amounts at December 31 (in thousands):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Routes $248,100 $248,100
Gates 83,649 83,649
Slots 95,800 95,800
-------- --------
427,549 427,549
Accumulated Amortization 71,225 49,858
-------- --------
$356,324 $377,691
======== ========
</TABLE>
The reorganization value in excess of amounts allocable to
identifiable assets is being amortized over a twenty year period
on the straight-line method. Accumulated amortization at December
31, 1998 and 1997 was $139,844,000 and $97,891,000, respectively.
When facts and circumstances suggest that intangible and other
long-term assets may be impaired, the Company evaluates their
recoverability based upon estimated undiscounted future cash flows
over the remaining estimated useful lives. The amount of
impairment, if any, is measured based on projected discounted
future operating cash flows.
(f) Foreign Exchange: Foreign currency and amounts receivable and
payable in foreign currencies are translated into U.S. dollars at
current exchange rates on the date of the financial statements.
Revenue and expense transactions are translated at average rates
of exchange in a manner that produces approximately the same
dollar amounts that would have resulted had the underlying
transactions been translated into dollars on the dates they
occurred. Exchange gains and losses are included in net income
for the period in which the exchange rate changes.
F-10
<PAGE>
<PAGE>
(g) Inventories: Inventories, valued at standard cost, which
approximates actual average unit cost, consist primarily of
expendable spare parts used for the maintenance and repair of
flight equipment, plus aircraft fuel and other operating supplies.
A provision for obsolescence of spare parts is accrued at annual
rates which will provide an allowance such that the unused
inventory, at the retirement date of the related aircraft fleet,
is reflected at the lower of cost or estimated net realizable
value.
(h) Passenger Revenue Recognition: Passenger ticket sales are
recognized as revenue when the transportation service is rendered.
At the time of sale a current liability for advance ticket sales
is established and subsequently is eliminated either through
carriage of the passenger by TWA, through billing from another
carrier that renders the service, or by refund to the passenger.
Under TWA's frequent flier program named "Aviators", frequent
travelers may accumulate certain defined unit mileage credits
which entitle them to a choice of various awards, including
certain free air transportation on TWA at a future date. When the
free travel award level is achieved by a frequent traveler, a
liability is accrued and TWA's operating expense is charged for
the estimated incremental cost which will be incurred by TWA upon
the future redemption of the free travel awarded.
Pursuant to the 1995 reorganization, TWA issued 600,000 ticket
vouchers, each having a face value of $50, which may be used for a
discount of up to 50% off the cost of a ticket for transportation
on TWA. Concurrently, TWA entered into an agreement, as amended,
to purchase for cash from a third party any ticket vouchers
acquired by the stand-by purchaser. The ticket vouchers were
initially recorded as a liability at their estimated fair value,
approximately $26.2 million. The liability will be relieved in
future periods as vouchers are redeemed for cash or will be
reflected as revenue when the transportation is provided for
tickets purchased with vouchers. Approximately 127,000 and 131,000
vouchers were outstanding at December 31, 1998 and 1997,
respectively.
(i) Interest Capitalized: Interest cost associated with funds expended
for the acquisition of qualifying assets is capitalized. Interest
capitalized was $7.1 million in 1998, $4.8 million in 1997 and
$5.5 million in 1996.
(j) Income Taxes: TWA accounts for income taxes based on Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". This statement requires the use of the liability
method to record the deferred income tax consequences of
differences between the financial reporting and income tax bases
of assets and liabilities.
(k) Postretirement Benefits Other than Pensions: TWA accounts for
postretirement benefits other than pensions based on SFAS No. 106
which requires that the expected cost of providing such benefits
be accrued over the years that the employee renders service, in a
manner similar to the accounting for pension benefits.
(l) Deferred Credits-Aircraft Operating Leases: The present value of
the excess of contractual rents due under aircraft operating
leases over the fair rentals for such aircraft was recorded as
deferred credits as part of the application of fresh start
reporting. The deferred credits will be increased through the
accrual of interest expense and reduced through a reduction in
operating lease rentals over the terms of the respective aircraft
leases. At December 31, 1998 and 1997, the unamortized balances
of the deferred credits were $14.3 million and $23.2 million,
respectively.
F-11
<PAGE>
<PAGE>
(m) Environmental Contingencies: TWA is subject to numerous
environmental laws and regulations and is subject to liabilities
and compliance costs arising from its past and current handling,
processing, recycling, storing and disposing of hazardous
substances and hazardous wastes. It is TWA's policy to accrue
environmental remediation costs when it is probable that a
liability has been incurred and an amount can be reasonably
estimated. As potential environmental liabilities are identified
and assessments and remediation proceed, these accruals are
reviewed periodically and adjusted, if necessary, as additional
information becomes available. The accruals for these liabilities
can significantly change due to factors such as the availability
of additional information on the nature or extent of the
contamination, methods and costs of required remediation and other
actions by governmental agencies. Costs of future expenditures
for environmental remediation obligations are not discounted to
their present value.
(n) Mandatorily Redeemable 12% Preferred Stock: The Mandatorily
Redeemable 12% Preferred Stock issued in connection with the 1995
reorganization was initially recorded at its estimated fair value.
Until its redemption in April 1996, the carrying amount was being
increased by amortization of the difference between the redemption
value and the carrying amount, using the interest method. Such
amounts were recorded as additional preferred stock dividend
requirements. A special dividend requirement of approximately
$20.0 million was recorded in 1996 to reflect the excess of the
early redemption price over the carrying value of the Mandatorily
Redeemable 12% Preferred Stock.
(o) Earnings (Loss) Per Share: Basic earnings per share ("EPS")
excludes dilution and is computed by dividing income available to
common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into
common stock or resulted in the issuance of common stock that then
shared in the earnings of the entity.
In computing the loss applicable to common shares for 1998, 1997
and 1996, the net loss has been increased by dividend requirements
on the 9 1/4% Cumulative Convertible Exchangeable Preferred Stock
from the date of issuance in December 1997, the Mandatorily
Redeemable 12% Preferred Stock (including amortization of the
difference between the carrying amount and the redemption value
and the special dividend requirement related to the early
redemption in 1996) and on the 8% Cumulative Convertible
Exchangeable Preferred Stock from the date of issuance in March
1996. In computing the related net loss per share, the loss
applicable to common shares has been divided by the aggregate
average number of outstanding shares of common stock (54.6 million
in 1998, 47.1 million in 1997 and 38.5 million in 1996) and
Employee Preferred Stock (6.7 million in 1998, 6.4 million in 1997
and 5.7 million in 1996) which, with the exception of certain
special voting rights, is the functional equivalent of common
stock. Diluted EPS has not been presented as the impact of stock
options, warrants, conversion of preferred stock or potential
issuances of additional Employee Preferred Stock would have been
anti-dilutive. For a description of securities which represent
potential common shares and which could materially dilute basic
EPS in the future, see Notes 7, 8, and 9.
(p) Concentration of Credit Risk: TWA does not believe it is subject
to any significant concentration of credit risk. At December 31,
1998, most of the Company's receivables were related to tickets
sold to individual passengers through the use of major credit
cards (39%) or to tickets sold by other airlines (15%) and used by
passengers on TWA. These receivables are short-term, generally
being settled shortly after sale. Bad debt losses, which have
been minimal in the past, have been considered in establishing
allowances for doubtful accounts.
F-12
<PAGE>
<PAGE>
(q) Use of Estimates: Management of the Company has made a number of
estimates and assumptions relating to the reporting of assets and
liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results
could differ from those estimates.
(r) Stock-Based Compensation: TWA applies Accounting Principles Board
("APB") Opinion No. 25 and related interpretations in accounting
for its plans. This opinion allows for stock-based employee
compensation to be recognized based on the intrinsic value.
(s) Presentation: Certain prior period amounts have been reclassified
to conform with current year presentation.
(t) New Accounting Standards: During 1998, the Company adopted SFAS
No. 130, "Reporting Comprehensive Income", SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information", and SFAS
No. 132, "Employers' Disclosure about Pensions and Other
Postretirement Benefits". SFAS No. 130 provides for the reporting
and presentation of comprehensive income and its components. SFAS
No. 131 establishes standards for defining operating segments and
reporting certain information about such segments. SFAS No. 132
revised disclosure requirements relative to pension and other
postretirement benefits. Since these statements only impact how
financial information is disclosed in interim and annual periods,
the adoption of these standards in 1998 did not impact the
Company's financial condition or results of operations. The
Company has no components requiring disclosure in a Statement of
Comprehensive Income, and therefore this statement has not been
presented.
(u) New Accounting Pronouncements: In June 1998, the Financial
Accounting Standards Board issued Statement No. 133, "Accounting
for Derivative Instruments and Hedging Activities". This
statement establishes accounting and reporting standards for
derivative instruments and all hedging activities. It requires
that an entity recognize all derivatives as either assets or
liabilities at their fair values. Accounting for changes in the
fair value of a derivative depends on its designation and
effectiveness. For derivatives that qualify as effective hedges,
the change in fair value will have no impact on earnings until the
hedged item affects earnings. For derivatives that are not
designated as hedging instruments, or for the ineffective portion
of a hedging instrument, the change in fair value will affect
current period earnings. The Company will adopt Statement No. 133
during its first quarter of fiscal 2000 and does not presently
believe that it will have a significant effect on its results of
operations or cash flows.
2. INVESTMENTS:
TWA, through a wholly-owned subsidiary, has a 26.315% partnership
interest in Worldspan (24.999% interest prior to October 2, 1998), a joint
venture among TWA, Delta Airlines, Inc. and Northwest Airlines, Inc.
Worldspan owns, markets and operates a global computer airline passenger
reservation system on behalf of subscriber travel agents and contracting
airlines who pay booking fees to Worldspan for such reservation service.
The partnership provides passenger reservations services, communication
facilities and other computer services which are purchased by TWA on a
recurring basis. The aggregate cost of services purchased from the
partnership was $52.2 million in 1998, $48.9 million in 1997 and $54.6
million in 1996.
TWA accounts for its investment in the partnership on the equity
basis. TWA's share of the combined net earnings of the partnership was
approximately $9.1 million for the year ended December 31,1998, $11.3
million for the year ended December 31, 1997 and $11.9 million for the
year ended December 31, 1996, which is included in Other Charges
(Credits) in TWA's Statements of Consolidated Operations. The excess of
TWA's carrying value for its investment in Worldspan over its share of
the underlying net assets of Worldspan is being
F-13
<PAGE>
<PAGE>
amortized over a period of 20 years. At December 31, 1998 and 1997, the
unamortized balance of this excess amounted to approximately $28.2
million and $30.1 million, respectively.
3. DEBT:
A substantial portion of TWA's assets are subject to liens and
security interests relating to long-term debt and other agreements.
Long-term debt (net of unamortized discounts) outstanding at each
balance sheet date was as follows (amounts in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1998 1997
-------- --------
<S> <C> <C>
9.80% Airline Receivable Asset Backed Notes,
Series 1997-1(a) $100,000 $100,000
12% Senior Secured Notes due 2002(b) 44,427 43,255
11 1/2% Senior Secured Notes due 2004(c) 138,522 138,360
11 3/8% Senior Notes due 2006(d) 150,000 -
8% IAM Backpay Notes(e) 14,936 13,354
PBGC Notes(f) - 141,243
10 1/4% Senior Secured Notes due 2003(g) 14,500 -
11 3/8% Senior Secured Notes due 2003(h) 43,200 -
Various Secured Notes, 4.0% to 12.4%, due 1998-2001(i) 5,378 43,799
Installment Purchase Agreements, 7.75% to 10.44%,
due 1999-2003(j) 103,961 267,198
Predelivery Financing Agreements(k) 35,387 3,166
IRS Deferral Note(l) 2,375 6,333
WORLDSPAN Note(m) 31,224 31,224
-------- --------
Total long-term debt 683,910 787,932
Less current maturities 111,538 51,392
-------- --------
Long-term debt, less current maturities $572,372 $736,540
======== ========
</TABLE>
(a) In December 1997, TWA agreed to sell certain receivables on an
ongoing basis to Constellation Finance LLC ("Constellation"), a
special purpose limited liability company wholly owned by TWA, and
TWA agreed to service the related receivables. Concurrently, the
9.80% Airline Receivable Asset Backed Notes, Series 1997-1 were
issued in December 1997 by Constellation in the principal amount
of $100.0 million. Interest on the 1997-1 Notes is payable
monthly on the 15th day of each month at the rate of 9.80% per
annum. No principal payments are due under the 1997-1 Notes until
January 2001, except under certain circumstances. The terms of
the 1997-1 Notes provide for the maintenance of certain minimum
levels of receivables as defined, or in the event of a deficiency,
the deposit of funds with the trustee in the amount of such
deficiency. At December 31, 1997, $9.7 million was held by the
trustee and is included in the accompanying balance sheet as
prepaid expenses and other current assets. This amount was
returned to the Company by January 9, 1998 at which time the
deficiency was eliminated.
(b) The 12% Senior Secured Notes due 2002 were issued in March 1997 in
the principal amount of $50.0 million. The notes are reflected
net of the unamortized discount of $5.6 million at December 31,
1998 and $6.7 million at December 31, 1997, to reflect an
effective interest rate of approximately 17.5%. Interest is
payable semi-annually on April 1 and October 1. The notes are not
redeemable prior to their maturity on April 1, 2002. The notes
are secured by (i) TWA's beneficial interest in certain take-off
and landing slots at three high-density, capacity-controlled
airports, (ii) certain ground equipment at
F-14
<PAGE>
<PAGE>
certain domestic airports and (iii) all stock of (a) a subsidiary
holding the leasehold interest in a hangar at Los Angeles
International Airport and (b) three subsidiaries holding leasehold
interests in gates and related support space at certain domestic
airports.
(c) The 11 1/2% Senior Secured Notes due 2004 were issued in December
1997 in the principal amount of $140.0 million. The notes are
reflected net of the unamortized discount of $1.5 million at
December 31, 1998 and $1.6 million at December 31, 1997, to
reflect an effective interest rate of approximately 11.7%.
Interest is payable semi-annually in arrears on each June 15 and
December 15, commencing June 15, 1998. The Company purchased $23.1
million of U.S. Government Obligations with a portion of the net
proceeds from the sale of the notes which was deposited in an
escrow account to fund interest payments through June 15, 1999.
The notes are secured by a lien on (i) a pool of aircraft spare
parts, (ii) TWA's beneficial interest in 30 take-off and landing
slots at Ronald Reagan Washington National Airport and (iii)
securities pledged to provide for the first three scheduled
interest payments.
(d) In March 1998, the Company completed a Rule 144A/Regulation S
offering of $150.0 million principal amount of 11 3/8% Senior
Notes due 2006 (the "11 3/8% Notes") resulting in net proceeds to
TWA of approximately $144.9 million (net of discounts, commissions
and estimated expenses). The notes represent senior unsecured
obligations of the Company. The indenture contains certain
covenants which, among other things, may limit (i) the incurrence
of additional indebtedness or issuance of additional preferred
stock, (ii) the payment of dividends on or retirement of capital
stock, (iii) certain investments, (iv) certain transactions with
affiliates, (v) the sale of assets and (vi) certain other
transactions by or through restricted subsidiaries. The Notes pay
interest semi-annually in arrears on March 1 and September 1 at a
rate of 11 3/8% per annum.
(e) The 8% IAM Backpay Notes have a stated principal amount of $22.0
million at December 31, 1998 and 1997. The notes are reflected
net of the unamortized discount of $7.1 million and $8.7 million
at December 31, 1998 and 1997, respectively, which reflects an
effective interest rate of approximately 24.4%. The notes mature
in 2001 and pay interest semi-annually. The notes are secured by
a subordinate lien on TWA's interest in Worldspan, a lien on the
stock of TWA-Hangar 12 Holding Company, Inc., a wholly-owned
subsidiary which leases certain ground equipment located at Hangar
12 at JFK from the Port Authority of New York and New Jersey and
which subleases Hangar 12 to the Company, and liens on one JT8D
engine and one JT9D engine. During December 1996, ownership
of the notes was transferred from the Indenture Trustee to current
and former IAM union members who participated in the 1992 labor
agreement.
(f) The PBGC Notes had a stated unpaid principal balance of $158.7
million at December 31, 1997. The notes were reflected net of
unamortized discounts of $17.4 million at December 31, 1997 which
reflected an effective interest rate of approximately 13.0%.
Interest on the PBGC Notes was payable semi-annually at an average
stated rate of 8.73% per annum. Principal payments were due in
semi-annual installments beginning in 1999 through 2007; however,
prepayments occurred from the election of Karabu to apply the
purchase price for tickets purchased under the Ticket Agreement to
a reduction of the PBGC Notes (see Note 12). Such prepayments
resulted in extraordinary charges related to the early
extinguishment of debt. The Notes were non-recourse notes secured
by first liens on TWA's international routes and TWA's leasehold
interest in the Kansas City maintenance facility and certain
fixtures and equipment. The Notes were retired in December 1998
and the liens were released.
(g) In June 1998, the Company consummated a private placement of $14.5
million aggregate principal amount of 10 1/4% Senior Secured Notes
due 2003 (the "10 1/4% Secured Notes") and $13.0 million principal
amount of 10 1/4% Mandatory Conversion Equity Notes due 1999 (the
"10 1/4% Equity Notes"). The Company did not receive any cash
proceeds from these transactions, but rather delivered the 10 1/4%
Secured Notes and the 10 1/4% Equity Notes in payment for one
B-767-231 ETOPS airframe and two associated engines, which had an
aggregate purchase price of $27.5 million and was previously
leased to the Company. On July 13, 1998, the 10 1/4% Equity Notes
were converted into
F-15
<PAGE>
<PAGE>
1,225,719 shares of common stock. Upon termination of the
operating lease, the Company received $1.5 million relating to a
security deposit previously held by the lessor. The 10 1/4%
Secured Notes pay interest semi-annually in arrears on June 15 and
December 15 at a rate of 10 1/4% per annum. The notes are subject
to mandatory redemption by way of sinking fund payments made in
cash beginning in June 2001 and continuing until June 2002.
(h) In April 1998, the Company consummated a private placement of
$43.2 million aggregate principal amount of 11 3/8% Senior Secured
Notes due 2003 (the "11 3/8% Secured Notes") and $31.8 million
principal amount of Mandatory Conversion Equity Notes due 1999
(the "April Equity Notes"). The Company did not receive any cash
proceeds from these transactions, but rather delivered the 11 3/8%
Secured Notes and the April Equity Notes in payment for three
B-767-231 ETOPS airframes and six associated engines, which had an
aggregate purchase price of $75.0 million and were previously
leased to the Company. On July 7, 1998, the April Equity Notes
were converted into 3,290,901 shares of Common Stock. Upon
termination of the operating leases for the aircraft, the Company
received approximately $6.0 million relating to security and
maintenance deposits previously held by the lessor. The 11 3/8%
Secured Notes pay interest semi-annually in arrears on April 15
and October 15 at a rate of 11 3/8% per annum. The notes are
subject to mandatory redemption by way of sinking fund payments
made in cash beginning in October 2000 and continuing until
October 2002.
(i) Various Secured Notes represent borrowings to finance the purchase
or lease of certain flight equipment and other property.
(j) Installment Purchase Agreements represent borrowings to finance
the purchase of four Boeing 767-231 and one Boeing 767-205
aircraft. The borrowings mature in monthly installments through
2003, and require interest at rates ranging from 7.75% to 10.44%
per annum. At December 31, 1997, the Installment Purchase Agreements
also included borrowings to finance the purchase of four Boeing
757-231 aircraft. Such aircraft were subsequently sold and leased
back to TWA in June and July 1998.
(k) The Predelivery Financing Agreements represent borrowings from the
engine manufacturer to finance prepayments on the purchase of
eight Boeing 757 aircraft and twenty-four MD-83 aircraft. The
borrowings mature upon delivery of the aircraft beginning in March
1999 and continuing through December 1999. Interest is payable
quarterly at a rate of LIBOR plus 3.5%.
(l) The IRS Deferral Note represents unpaid amounts due under the
terms of a settlement reached in 1993 for taxes and interest owed
to the IRS. The note requires payment of interest quarterly at a
rate of 7% per annum and matures in 1999.
(m) The Worldspan Note represents amounts owed to Worldspan, a 26.315%
owned affiliate of TWA, for prior services and advances. The note
pays interest at maturity at a rate of prime plus 1% per annum and
matures in 1999. The note is secured by a pledge of TWA's
partnership interest in Worldspan. TWA is currently in negotiations
with the other partners of Worldspan to extend the maturity date of
the Note although no assurance can be given that such an extension
will be granted.
F-16
<PAGE>
<PAGE>
(n) At December 31, 1998, aggregate principal payments due for
long-term debt for the succeeding five years were as follows:
<TABLE>
<CAPTION>
(AMOUNTS IN
YEAR THOUSANDS)
---- -----------
<S> <C>
1999 $111,538
2000 17,367
2001 141,355
2002 70,024
2003 67,761
</TABLE>
Certain of the Company's long-term debt agreements contain various
covenants which limit, among other things, the incurrence of additional
indebtedness, the payment of dividends on capital stock, certain
investments, transactions with affiliates, incurrence of liens and sale
and leaseback transactions, and sale of assets. The Company was in
compliance with these covenants as of December 31, 1998.
4. LEASES AND RELATED GUARANTEES:
Fifteen (15) of the aircraft in the Company's fleet at December
31, 1998 were leased under capital leases. The remaining lease periods
for these aircraft range from 2.7 to 8.6 years. The Company has options
and/or rights of first refusal to purchase or re-lease most of such
aircraft at market terms upon termination of the lease. The Company has
guaranteed repayment of certain of the debt issued by the owner/lessor
to finance some of the aircraft under capital lease to the Company;
however, the scheduled rental payments will exceed the principal and
interest payments required of the owner/lessor. Aggregate annual
rentals in 1999 will be approximately $36.8 million for the 15 aircraft
held under capital leases.
One hundred sixty-four (164) of the aircraft in TWA's fleet at
December 31, 1998 were leased under operating leases. Other than two
leases on a month-to-month basis, the remaining lease periods range from
one month to 18 years. Upon expiration of the current leases, TWA has
the option to re-lease most of such aircraft for specific terms and/or
rentals with some of the renewal options being subject to fair market
rental rates.
Buildings and facilities leased under capital and operating leases
are primarily for airport terminals and air transportation support
facilities. Leases of equipment, other than flight equipment, include
some of the equipment at airports and maintenance facilities, flight
simulators, computers and other properties.
Pursuant to an agreement between the City of St. Louis and TWA in
November 1993 (the "Asset Purchase Agreement"), the City of St. Louis
waived a $5.3 million pre-petition claim and provided TWA with two
installments of $24.7 million and $40 million pursuant to sale/leaseback
transactions involving certain of TWA's assets located at Lambert-St.
Louis Airport and other property and assets located in St. Louis
including gates, terminal support facilities at the airport, hangar/St.
Louis Ground Operations Center complex, Flight Training Center and
equipment and tenant improvements at these various St. Louis facilities.
Under the Asset Purchase Agreement, TWA leased back the properties
involved under a month-to-month agreement subject to automatic renewal
so long as TWA is not in default thereunder, such agreement having a
term otherwise expiring December 31, 2005. Such term is subject to
early termination in the event of certain events of default, including
non-payment of rents, cessation of service, or failure to relocate and
maintain its corporate headquarters within the City or County of St.
Louis, or relocate and maintain a reservations office within the City of
St. Louis. Under the Asset Purchase Agreement, TWA has the right to use
57 gates and terminal support facilities at Lambert-St. Louis Airport.
The City has certain
F-17
<PAGE>
<PAGE>
rights of redesignation of TWA's gates in the event TWA's flight
activity at St. Louis is reduced below a threshold level of 190 daily
flight departures during any given monthly period. The related leases
are classified as capital leases for financial reporting purposes.
The Company's acquisition of 11 new aircraft during 1982 and 1983,
one Lockheed L-1011 and ten Boeing 767s, created certain tax benefits
that were not of immediate value in the Company's federal income tax
returns and, therefore, such tax benefits were sold to outside parties
under so-called "Safe Harbor Leases" as permitted by IRS regulations.
Pursuant to the sales agreements, the Company is required to indemnify
the several purchasers if the tax benefits cannot be used because of
circumstances within the control of the Company. As of December 31,
1998, the Company's contingent indemnification obligations in connection
with the tax benefit transfers were collateralized by bank letters of
credit aggregating $6.6 million. The Company has pledged $2.6 million
in cash collateral to secure its obligation with respect to four of the
tax benefit transfers and has pledged flight equipment having a net book
value of $22.4 million to secure its obligation with respect to two of
the tax benefit transfers.
At December 31, 1998, future minimum lease payments for capital
leases and future minimum lease payments, net of sublease rentals of
immaterial amounts, for long-term leases, were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
MINIMUM LEASE PAYMENTS
----------------------
CAPITAL OPERATING
LEASES LEASES
-------- ----------
YEAR
----
<S> <C> <C>
1999 $ 54,056 $ 441,944
2000 50,555 404,346
2001 45,370 373,769
2002 31,107 345,869
2003 23,309 337,808
Subsequent 60,406 1,805,051
-------- ----------
Total 264,803 $3,708,787
Less imputed interest 63,892 ==========
--------
Present value of capital leases 200,911
Less current portion 37,865
--------
Obligations under capital leases,
less current portion $163,046
========
</TABLE>
F-18
<PAGE>
<PAGE>
5. INCOME TAXES:
Income tax liabilities at December 31, 1998 and 1997, included in
other noncurrent liabilities, consist of the following (amounts in
millions):
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Current taxes $ - $ -
Deferred taxes:
Federal 10.7 10.7
Other income and franchise taxes .3 .3
----- -----
Total income tax liability $11.0 $11.0
===== =====
</TABLE>
Significant components of the Company's deferred tax assets and
liabilities as of December 31, 1998 and 1997 are as follows (amounts in
millions):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Deferred tax assets:
Postretirement benefits, other than pensions $ 208.6 $ 199.8
Pension obligations - 51.0
Employee compensation and other benefits 38.9 40.0
Capital leases, net 49.0 58.8
Net operating loss carryforwards 385.0 337.7
Property and spare parts, net 48.9 45.0
Other, net 74.9 77.9
------- -------
Total deferred tax assets 805.3 810.2
------- -------
Deferred tax liabilities:
Routes, gates, and slots, net (141.1) (149.2)
Investment in affiliate (49.1) (46.1)
------- -------
Total deferred tax liabilities (190.2) (195.3)
------- -------
Net deferred tax asset before valuation allowance 615.1 614.9
Deferred tax asset valuation allowance (626.1) (625.9)
------- -------
Net deferred tax liability $ (11.0) $ (11.0)
======= =======
</TABLE>
The valuation allowance arises primarily from the amortization of
intangibles, representing taxable temporary differences, the reversal of
which extends beyond the period in which deductible temporary
differences are expected to reverse.
A summary of the provision for income taxes is as follows (amounts
in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Current, primarily foreign $243 $527 $450
Deferred - - -
---- ---- ----
Total provision for income taxes, net $243 $527 $450
==== ==== ====
</TABLE>
F-19
<PAGE>
<PAGE>
Income tax expense for the periods presented below differs from
the amounts which would result from applying the federal statutory tax
rate to pretax income, as follows (amounts in thousands):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Income tax benefit at United States statutory rates $(37,509) $(31,268) $(93,652)
Amortization of reorganization value in excess of
amounts allocable to identifiable assets 14,684 14,684 14,683
Meals and entertainment disallowance 3,524 4,124 4,257
Foreign and state taxes 243 527 450
Net operating loss not benefited and other items 19,301 12,460 74,712
-------- -------- --------
Income tax expense $ 243 $ 527 $ 450
======== ======== ========
</TABLE>
In May 1993, TWA and the Internal Revenue Service reached an
agreement (the "IRS Settlement") to settle both: (i) the IRS's proof of
claim in the 1993 reorganization in the amount of approximately $1.4
billion covering prepetition employment and income taxes of TWA, and
(ii) the audit of TWA's federal income tax returns through 1992.
Pursuant to the IRS Settlement, TWA paid $6 million to the IRS through
the application of funds owed to TWA by certain governmental agencies
and issued a note in the amount of $19 million payable in quarterly
installments over a six year period (see Note 3). As a result
of the IRS Settlement, TWA increased its tax basis in certain of its
assets and will be allowed no benefit of any federal net operating loss
or credit carryforward from 1992 or any prior year. Federal income tax
losses incurred by TWA subsequent to 1992 may not be carried back to
pre-1993 years.
The Company estimates that it has tax net operating loss
carryforwards ("NOLs") amounting to approximately $975 million at
December 31, 1998 expiring in 2008 through 2018 if not utilized before
then to offset taxable income. Section 382 of the Internal Revenue Code
of 1986, as amended, and regulations issued thereunder,
imposed limitations on the ability of corporations to use NOLs if the
corporation experiences a more than 50% change in ownership during
certain periods. Changes in ownership in future periods could
substantially restrict the Company's ability to utilize its tax net
operating loss carryforwards. In addition, the tax net operating loss
carryforwards are subject to examination by the IRS and thus are subject
to adjustment or disallowance resulting from any such IRS examination.
For financial reporting purposes, the tax benefits related to the
utilization of the tax net operating loss carryforwards generated prior
to the 1995 reorganization of approximately $491 million will, to the
extent realized in future periods, have no impact on the Company's
operating results, but instead be applied to reduce reorganization value
in excess of amounts allocable to identifiable assets.
F-20
<PAGE>
<PAGE>
6. PENSION AND OTHER POSTRETIREMENT BENEFITS:
Substantially all of TWA's employees are covered by
noncontributory defined benefit retirement plans that were frozen on
January 1, 1993. While many of TWA's employees continue participation
in these plans, they have not accrued any additional benefits since the
date the plans were frozen. Employees hired after the freeze are not
entitled to participate in these defined benefit retirement plans.
TWA's policy has been to fund the defined benefit plans in amounts
necessary for compliance with the funding standards established by the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The retirement plans for Pilots, Flight Attendants and Dispatchers
provide benefits determined from career average earnings, with Pilots
having minimum benefits after ten years of service. Employees (other
than Passenger Service Employees) represented by the IAM earn retirement
plan benefits of stated amounts for each year of service. The
Retirement Plan for U.S. Noncontract Employees (including Passenger
Service Employees) provides pension benefits that are based on the
employee's compensation during the last five years prior to retirement,
with compensation subsequent to 1988 frozen at the 1988 pay level.
Foreign plans provide benefits that meet or exceed local requirements.
Normal retirement is age 60 for Pilots and Flight Attendants, and
age 65 for nonflight personnel. The age at which employees can receive
supplemental benefits for early retirement varies by labor group, but
ranges from age 45 to age 64.
As noted above, in January 1993, TWA's defined benefit plans
covering domestic employees (the "Pension Plans") were frozen and Pichin
Corporation, a Delaware corporation formed by the Icahn Entities,
assumed sponsorship of the Pension Plans and is now responsible for
management and control of the Pension Plans. Pursuant to an agreement
(the "Comprehensive Settlement Agreement") among the Company, the Icahn
Entities, the Pension Benefit Guarantee Corporation (the "PBGC") and
unions representing TWA employees, TWA retains only specified
obligations and liabilities in respect of the Pension Plans, which
include (i) payment obligations under the PBGC Notes which were retired
in December 1998, and (ii) the obligation to continue to act as the
benefits administrator responsible for, among other things, determining
and administering the payment of Pension Plan benefits (see Note 3).
Pichin Corporation is obligated to make the required minimum
funding payments to each of the Pension Plans, subject to reduction for
any payments made under the PBGC Notes. The PBGC may not terminate the
Pension Plans, except under section 4042(a)(2) of ERISA or at the
request of Pichin Corporation, so long as the Icahn Entities and Pichin
Corporation have complied with all terms of the Comprehensive Settlement
Agreement relating to the PBGC. Upon the occurrence of certain
significant events (as defined) including, but not limited to, a sale of
substantially all of TWA's assets, a merger involving TWA or a
liquidation under Chapter 7 under the Bankruptcy Code, and at the
request of Pichin Corporation, the Pension Plans will be terminated.
After such a termination, the liability of Pichin Corporation and all
members of its controlled group will be limited to an obligation to make
annual payments of $30 million to the PBGC for a period of eight years.
Mr. Icahn has advised TWA that Pichin Corporation is entitled to
terminate the Pension Plans in a non-standard termination at any time
after January 1, 1995.
In addition to providing retirement benefits, TWA provides certain
health care and life insurance benefits for retired employees, their
spouses and qualified dependents. Substantially all employees may become
eligible for these benefits if they reach specific retirement age
criteria while still actively employed by TWA. SFAS No. 106 requires
that the expected cost of providing postretirement benefits other than
pensions be accrued over the years that the employee renders service, in
a manner similar to the accounting for pension benefits.
F-21
<PAGE>
<PAGE>
The following provides a reconciliation of benefit obligations,
plan assets and funded status of the plan, excluding defined benefit
plans covering domestic employees (amounts in thousands):
<TABLE>
<CAPTION>
Other
International Pension Postretirement
Benefits Benefits
------------------------- ------------------------
1998 1997 1998 1997
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year $ 63,302 $ 62,426 $ 533,375 $ 535,631
Service cost-benefits earned during the
period 810 875 10,713 10,650
Interest cost 4,386 4,652 37,163 39,262
Gain from settlement (2,771) - - -
Actuarial (gain)/loss 2,776 (3,236) 40,220 (17,863)
Benefits paid (1,294) (1,415) (35,709) (34,305)
-------- -------- --------- ---------
Benefit obligation at end of year 67,209 63,302 585,762 533,375
-------- -------- --------- ---------
Change in plan assets:
Fair value of plan assets at beginning of year 54,366 50,703 - -
Actual return on plan assets 4,879 4,592 - -
Benefits paid (794) (929) - -
-------- -------- --------- ---------
Fair value of plan assets at end of year 58,451 54,366 - -
-------- -------- --------- ---------
Funded status (8,758) (8,936) (585,762) (533,375)
Unrecognized net actuarial (gain)/loss (15,876) (21,075) 52,103 11,882
Unrecognized prior service cost - - 2,733 3,038
-------- -------- --------- ---------
Accrued benefit cost included in
Consolidated Balance Sheets $(24,634) $(30,011) $(530,926) $(518,455)
======== ======== ========= =========
<CAPTION>
International Pension Other Postretirement
Benefits Benefits
---------------------------------- ----------------------------------
1998 1997 1996 1998 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Weighted-average assumptions:
Discount rate 7.00% 7.25% 7.50% 7.00% 7.25% 7.50%
Actual return on plan assets 9.00% 9.00% 9.00% - - -
Rate of increase in future
compensation levels 3.50% 3.50% 3.50% 4.00% 4.00% 4.00%
</TABLE>
Plan assets are invested in cash equivalents, international
stocks, fixed income securities and real estate. United Kingdom law
requires the reduction of retirement plan assets when such assets exceed
105% of plan liabilities. In 1996, assets in TWA's United Kingdom
Pension Plan exceeded liabilities by approximately $20 million. This
surplus was eliminated by terminating the existing UK Pension Plan and
establishing a new pension plan for UK employees. The surplus assets
were split between TWA and the participants of the UK Plan, with plan
participants receiving their share in enhanced pension benefits, and TWA
receiving, in December 1996, a reversion from the original plan of $9.7
million.
F-22
<PAGE>
<PAGE>
The projected benefit obligation and accumulated benefit
obligation for the pension plan with accumulated benefit obligations in
excess of plan assets were $11.0 million and $6.6 million, respectively,
as of December 31, 1998 and $11.1 million and $6.6 million,
respectively, as of December 31, 1997. The fair value of plan assets
for the pension plan was zero as of December 31, 1998 and 1997.
During 1998, the Company recognized a settlement gain of
approximately $2.7 million related to the foreign defined benefit
retirement plan.
The assumed health care cost trend rate used in measuring the
postretirement benefit obligation was 6.0% in 1998, declining by 1% per
year to an ultimate rate of 5%. If the assumed health care cost trend
rate was increased by 1 percentage point, the postretirement benefit
obligation at December 31, 1998 would be increased by approximately
$40.1 million and 1998 periodic postretirement benefit cost would
increase approximately $4.4 million. If the assumed health care cost
trend rate was decreased by 1 percentage point, the postretirement
benefit obligation at December 31, 1998 would be decreased by
approximately $35.8 million and 1998 periodic postretirement benefit
cost would decrease approximately $3.9 million.
Net periodic pension costs for TWA's foreign defined benefit
retirement plans and other postretirement benefit costs include the
following components (amounts in thousands):
<TABLE>
<CAPTION>
International Pension Other Postretirement
Benefits Benefits
----------------------------- -----------------------------
1998 1997 1996 1998 1997 1996
------- ------- ----- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Components of net periodic benefit cost:
Service cost-benefits earned during
the period $ 806 $ 875 $ 577 $10,713 $10,650 $ 9,922
Interest cost 4,562 4,652 992 37,163 39,262 35,444
Expected return on plan assets (4,878) (4,592) (505) - - -
Amortization of prior service cost (861) (289) (355) 305 305 -
------- ------- ----- ------- ------- -------
Net periodic benefit cost $ (371) $ 646 $ 709 $48,181 $50,217 $45,366
======= ======= ===== ======= ======= =======
</TABLE>
TWA has several defined contribution plans covering most of its
employees. Total pension expense for these plans was $55.8 million,
$55.7 million and $58.0 million for the years ended December 31, 1998,
December 31, 1997 and December 31, 1996, respectively. Such defined
contribution plans include: (a) trust plans established pursuant to
collective bargaining agreements with certain employee groups providing
for defined Company contributions generally determined as a percentage,
ranging from 2% to 11%, of pay; and (b) retirement savings plan for
Noncontract Employees to which the Company contributes amounts equal to
25% of voluntary employee after-tax contributions up to a maximum of 10%
of the employee's pay. Pursuant to the 1992 labor agreements, Company
contributions were suspended for certain defined contribution plans for
the period September 1, 1992 through August 31, 1995. Such suspension
was extended through August 31, 1997. In connection with the
Comprehensive Settlement Agreement, TWA agreed to make contributions to
defined contribution plans aggregating 2% of eligible wages for 1993
through 1995, and 3.3% thereafter. The Company made the 1994
contribution payment on June 20, 1995. Commencing on July 1, 1995, TWA
is required to make such contributions on a monthly basis.
F-23
<PAGE>
<PAGE>
7. CAPITAL STOCK:
The Company has the authority to issue 287.5 million shares of
capital stock, consisting of 150 million shares of common stock and
137.5 million additional shares of preferred stock. On the effective
date of the 1995 reorganization, TWA issued approximately 17.2 million
shares of common stock, 6.4 million shares of Employee Preferred Stock
(including approximately 1.7 million shares which are attributable to
ALPA represented employees, see Note 8), Equity Rights for the purchase
of approximately 13.2 million shares of common stock, warrants for the
purchase of approximately 1.7 million shares of common stock exercisable
over a seven year period at $14.40 per share (the "Seven Year
Warrants"), warrants for the purchase of up to 1.15 million shares of
common stock (for nominal consideration), and $109.0 million aggregate
liquidation value of Mandatorily Redeemable 12% Preferred Stock (the
"12% Preferred Stock"). In addition, each of the 12.5 million shares of
the then existing preferred stock were converted into, and holders
received, 0.1024 shares of common stock, 0.0512 Equity Rights and 0.1180
Seven Year Warrants. Holders of then existing common stock, other than
shares held by trusts for employees, received 0.0213 shares of common
stock, 0.0107 Equity Rights and 0.0246 Seven Year Warrants.
In October 1995, TWA received approximately $55.3 million in gross
proceeds from the exercise of 13,206,247 Equity Rights and issued
13,206,247 shares of common stock. The Company paid a fee of
approximately $3.4 million in September 1995 to certain standby
purchasers of shares covered by the Equity Rights.
TWA subsequently issued 2.07 million additional shares of common
stock to previous holders of TWA's 10% Senior Secured Notes based upon
the trading prices of securities distributed pursuant to the 1995
reorganization.
The Employee Preferred Stock is the functional equivalent of
common stock except for an exclusive right to elect a certain number of
directors to the Board of Directors and its liquidation preference of
$0.01 per share. Employee Preferred Stock does not have redemption
rights. Each share will automatically convert into one share of common
stock upon the withdrawal of such share from the employee stock trust in
which such share is held.
There were 1,742,831 and 1,742,920 Seven Year Warrants outstanding
at December 31, 1998 and 1997, respectively. All warrants to purchase
shares of common stock for nominal consideration had been exercised at
December 31, 1998.
In March 1997, the Company issued 50,000 Redeemable Warrants in
conjunction with the sale of $50.0 million 12% Senior Secured Notes Due
2002. The Warrants are exercisable commencing on the first anniversary
of the date of original issuance through their expiration on April 1,
2002 and entitles the holders thereof to purchase 126.26 shares of
common stock per Warrant at an exercise price of approximately $7.92 per
share.
In December 1997, the Company completed an offering, pursuant to
Rule 144A of the Securities Act of 1933, of 1,725,000 shares of its
9 1/4% Cumulative Convertible Exchangeable Preferred Stock, with a
liquidation preference of $50 per share. Each share of the 9 1/4%
Preferred Stock may be converted at any time at the option of the
holder, unless previously redeemed or exchanged, into shares of the
Company's common stock at a conversion price of $7.90 per share
(equivalent to a conversion rate of approximately 6.329 shares of common
stock for each share of 9 1/4% Preferred Stock), subject to adjustment.
F-24
<PAGE>
<PAGE>
The 9 1/4% Preferred Stock may not be redeemed prior to December
15, 2000. On or after December 15, 2000, the 9 1/4% Preferred Stock may
be redeemed in whole or in part, at the option of the Company, at
specified redemption prices. The 9 1/4% Preferred Stock may be
exchanged, in whole but not in part, at the option of the Company, for
the Company's 9 1/4% Convertible Subordinated Debentures due 2007 on any
dividend payment date beginning on December 15, 1999 at the rate of $50
principal amount of Debentures for each share of 9 1/4% Preferred Stock
outstanding at the time of exchange; provided that all accrued and
unpaid dividends on the 9 1/4% Preferred Stock to the date of exchange
have been paid or set aside for payment and certain other conditions are
met.
The Company filed a registration statement with the Securities and
Exchange Commission to register resales of 9 1/4% Preferred Stock, the
Debentures and the underlying shares of common stock issuable upon
conversion thereof. In addition, the Company must use its reasonable
best efforts to cause a registration statement to be effective until the
earlier of (i) the sale of all securities covered by the registration,
or (ii) two years after the date of original issuance.
In March 1996, the Company completed an offering, pursuant to Rule
144A of the Securities Act, of 3,869,000 shares of its 8% Preferred
Stock, with a liquidation preference of $50 per share. Each share of
the 8% Preferred Stock may be converted at any time, at the option of
the holder, unless previously redeemed or exchanged, into shares of
common stock at a conversion price of $20.269 per share (equivalent to a
conversion rate of approximately 2.467 shares of common stock for each
share of 8% Preferred Stock), subject to adjustment. Pursuant to the
registration rights agreement between the Company and the initial
purchasers of the 8% Preferred Stock, the Company filed a registration
statement to register resales of the 8% Preferred Stock, the Debentures
(as defined below) and the underlying shares of common stock issuable
upon conversion thereof.
The 8% Preferred Stock may not be redeemed prior to March 15,
1999. On or after March 15, 1999, the 8% Preferred Stock may be
redeemed, in whole or in part, at the option of the Company, at
specified redemption prices. The 8% Preferred Stock may be exchanged at
the option of the Company, in whole but not in part, for the Company's
8% Convertible Subordinated Debentures Due 2006 (the "Debentures") on
any dividend payment date beginning March 15, 1998 at the rate of $50
principal amount of Debentures for each share of 8% Preferred Stock
outstanding at the time of exchange; provided that all accrued and
unpaid dividends on the 8% Preferred Stock to the date of exchange,
whether or not earned or declared, have been paid or set aside for
payment and certain other conditions are met.
In December 1995, the Company adopted a Shareholders Rights Plan.
Each holder of common stock or Employee Preferred Stock received a
dividend of one right for each share, entitling the holder to buy one
one-hundredth of a share of a new series of preferred stock at a
purchase price of $47.50 and, thereafter, all common stock and Employee
Preferred Stock issued by the Company has had an equivalent number of
rights attendant to it. The rights may become exercisable only under
certain conditions whereby certain persons (as defined) become the owner
of or commence a tender offer for certain specified percentages of TWA's
voting stock and may be redeemed by TWA at $0.01 per right prior to such
time. In the event the rights become exercisable, holders would be
entitled to receive, without payment of a purchase price, additional
shares of common stock or be entitled to purchase common stock having a
market value of twice the purchase price.
F-25
<PAGE>
<PAGE>
8. EARNED STOCK COMPENSATION:
On the effective date of the 1995 reorganization, TWA issued
approximately 6.4 million shares of Employee Preferred Stock to trusts
established for its unionized employees, including approximately 1.7
million shares attributable to ALPA represented employees (the "ALPA
shares"). Except for certain rights with respect to the election of
directors and the fact that such shares are held in trusts, the Employee
Preferred Stock has rights substantially identical to TWA's common
stock. TWA also issued an aggregate of approximately 1.0 million shares
of common stock to a trust established for the benefit of certain of
TWA's other employees. The ALPA shares were distributed by its trustee
to an employee benefit plan (the "ESOP") in one-third increments
annually beginning August 1995. In 1997 and 1996, operating results
included charges of approximately $3.9 million and $6.9 million,
respectively, representing the value of ALPA shares allocated and ALPA
shares earned, but unallocated, for such periods, based upon the market
price of TWA's common stock. There was no effect on operating results
in 1998.
In recognition of the fact that the percentage of TWA's stock
owned by TWA's employees was substantially reduced in the 1995
reorganization, TWA adopted the Employee Stock Incentive Plan ("ESIP")
as part of the 1995 reorganization. The ESIP requires TWA, from 1997
through 2002, to make grants of additional shares of common stock and
Employee Preferred Stock to certain trusts established for the benefit
of its union and non-union employees if certain conditions are met.
The ESIP requires TWA to make a grant on July 15 of each year if the
average market closing price of the common stock for 30 consecutive
trading days has exceeded a target price for such year set forth in the
ESIP. The target price applicable to the additional shares to be issued
in each year is $11.00 in 1997, $12.10 in 1998, $13.31 in 1999, $14.64 in
2000, $16.11 in 2001 and $17.72 in 2002. Each grant is cumulative and if
the applicable target price is not met in the initial grant year, the
applicable grant is carried forward and may be granted in future years
(up to July 15, 2002) in which the average market closing price of the
common stock exceeds the target price before July 15 of that year. The
first two ESIP target prices of $11.00 and $12.10 were realized on
February 17, 1998 and March 4, 1998, respectively, and as a result, TWA
issued an additional 2,377,084 shares (net of the credit of 405,750 shares
discussed in the following paragraph) of Employee Preferred Stock on July
15, 1998 to satisfy the 1997 and 1998 ESIP grant amounts. TWA recorded
non-cash charges of $26.5 million and $1.0 million in the first and third
quarters of 1998, respectively, in connection with this issuance. The ESIP
provides for an increase in future grants to protect against the dilutive
effect of certain stock issuances by TWA. Based on issuances of common
stock through December 31, 1998, additional common stock and Employee
Preferred Stock will be subject to grant in an amount sufficient to
increase employee ownership by 1.84% in 1999, 1.34% in 2000, 1.34% in
2001 and 1.34% in 2002 based on the combined total number of outstanding
shares of common stock and Employee Preferred Stock as of the applicable
July 15 grant date. If the ESIP's remaining target prices of $13.31,
$14.64, $16.13 and $17.72 are realized for the years 1999 to 2002,
respectively, the minimum aggregate non-cash charge for the years 1999
to 2002 would be approximately $103.4 million based upon these target
prices and the number of shares of common stock and Employee Preferred
Stock outstanding at December 31, 1998. The non-cash charge for any year,
however, could be substantially higher if the then market price of TWA's
common stock exceeds certain target prices. In addition, a stock purchase
trustee of a special purpose trust to be established has the right under
the ESIP through July 15, 2002 to purchase additional shares of Employee
Preferred Stock on behalf of employees in amounts up to a total of 2% of
the combined total number of outstanding shares of common stock and Employee
Preferred Stock, at a discount of 20% from the then current market price.
The ESIP separately provides that following the distribution by TWA
of additional shares of Employee Preferred Stock or common stock after
the effective date of the 1995 reorganization in respect of the 1995
reorganization, TWA would issue an additional number of shares of Employee
Preferred Stock and common stock to permit employees to retain the same
level of ownership initially granted to them based on a formula. Union
representatives and TWA agreed to a one-time distribution in 1997 pursuant
to this provision of the ESIP of a total of 525,856 shares of Employee
Preferred Stock and common stock. As part of that agreement, since
additional ESIP shares were not issued to the employees in July 1997,
TWA issued an additional 405,750 shares of Employee Preferred Stock and
common stock to the employee trusts. TWA received a credit for this
issuance of shares against its July 15, 1998 grant under the ESIP.
F-26
<PAGE>
<PAGE>
9. STOCK OPTION PLANS:
The Company's 1994 Key Employee Stock Incentive Plan (the
"KESIP"), as amended, provides for the award of incentive and
nonqualified stock options for up to 14% of the common stock and
Employee Preferred Stock outstanding as of the start of each fiscal year
(approximately 8.6 million shares at January 1, 1999). Generally,
options granted under the KESIP have a five year life after the final
vesting period and vest at the rate of 34% upon the first anniversary of
the award date, 33% upon the second and 33% upon the third anniversary
of the award date. Unvested shares are subject to forfeiture under
certain circumstances.
A summary of the Company's outstanding stock options as of
December 31, 1998, 1997 and 1996, and changes during the years ended on
those dates is presented below:
<TABLE>
<CAPTION>
1998 1997 1996
------------------------- -------------------------- -------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at the beginning of year 3,342,180 $ 6.39 2,026,384 $5.61 2,228,000 $ 4.68
Granted 547,850 10.79 2,027,155 6.80 453,000 11.65
Exercised (566,196) 4.79 (565,545) 4.66 (191,316) 4.64
Forfeited (293,565) 8.56 (145,814) 7.88 (463,300) 7.43
--------- --------- ---------
Outstanding at end of year 3,030,269 7.28 3,342,180 6.39 2,026,384 5.61
========= ========= =========
Option exercisable at year-end 1,696,704 1,812,020 1,302,700
Weighted average fair value of options
granted during the year $4.92 $3.32 $6.79
</TABLE>
The per share weighted average fair value of options granted
during 1998, 1997, and 1996 were estimated using the Black Scholes
option pricing model assuming risk-free interest rates of 5.09%, 5.97%
and 6.6% in 1998, 1997 and 1996, respectively, an expected volatility
factor of 62.59% in 1998, 67.14% in 1997 and 85.00% in 1996 and an
expected life of three years.
F-27
<PAGE>
<PAGE>
The following table summarizes information about fixed stock options at
December 31, 1998:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------------------------------- ------------------------------------
RANGE NUMBER WEIGHTED-AVERAGE NUMBER
OF OUTSTANDING REMAINING WEIGHTED-AVERAGE EXERCISABLE WEIGHTED-AVERAGE
EXERCISE PRICES AT 12/31/98 CONTRACTUAL LIFE EXERCISE PRICE AT 12/31/98 EXERCISE PRICE
- - --------------- ----------- ------------------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
$ 4.56 to 5.84 1,303,089 2.51 years $ 5.37 1,111,089 $ 5.34
6.22 to 7.78 1,009,400 4.06 years 7.30 459,505 7.28
7.79 to 10.13 207,900 4.72 years 8.47 56,660 8.48
10.16 to 12.38 434,600 4.74 years 11.19 51,150 10.47
12.63 to 18.37 75,280 4.68 years 14.06 18,300 15.65
--------- ---------
$ 4.56 to 18.37 3,030,269 1,696,704
========= =========
</TABLE>
As permitted under SFAS No. 123 "Accounting for Stock-Based
Compensation", the Company applies APB Opinion No. 25 and related
interpretations in accounting for its plans. However, pro forma
disclosures as if the Company adopted the fair value based method of
measurement for stock-based compensation plans under SFAS No. 123 in
1998, 1997 and 1996 are presented below.
Had compensation cost for the Company's grants for stock-based
compensation plans been determined using the fair value method under
SFAS No. 123, the Company's pro forma net loss, and net loss per common
share for 1998, 1997 and 1996 would approximate the amounts below
(amounts in thousands except per share data):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------------- ---------------------------- -------------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- --------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net loss $(120,481) $(124,648) $(110,835) $(114,942) $(284,815) $(285,716)
Net loss per common
share $ (2.35) $ (2.42) $ (2.37) $ (2.45) $ (7.27) $ (7.30)
</TABLE>
The pro forma amounts do not give any effect to options granted
prior to January 1, 1995.
Operating results include charges of $2.2 million for the year
ended December 31, 1996 to reflect the excess of the market price of
TWA's common stock on the date of grant over the exercise price, during
the vesting period including $1.8 million with respect to the
accelerated vesting of certain awards in connection with the severance
of certain officers. There were no such charges in 1997 or 1998.
10. CONTINGENCIES:
On July 17, 1996, TWA Flight 800 crashed shortly after departure
from JFK en route to Paris, France. There were no survivors among the
230 passengers and crew members aboard the Boeing 747 aircraft. While TWA
is currently a defendant in a number of lawsuits relating to the crash,
TWA maintains substantial insurance coverage and management believes that
TWA's insurance coverage is more than sufficient to cover the claims arising
from the crash. In addition, TWA has entered into agreements that limit the
amount of TWA's exposure to such claims and that significantly reduce the
amounts charged or reserved under applicable insurance policies as a result
of the crash of Flight 800. Based on the insurance coverage maintained by TWA
and those agreements, TWA believes that the resolution of these claims will
have no material impact on the financial condition of TWA or its results of
operations.
F-28
<PAGE>
<PAGE>
On October 22, 1991, a judgment in the amount of $12,336,127 was
entered against TWA in an action in the United States District Court for
the Southern District of New York by Travellers International A.G. and
its parent company, Windsor, Inc. In order to obtain a stay of judgment
pending appeal, TWA posted a cash undertaking of $13,693,101. In
connection with the 1993 reorganization, TWA sought to have the matter
ultimately determined by the Bankruptcy Court and claimed that the cash
undertaking constituted a preference payment. In February 1994, the
Bankruptcy Court determined the matter in a manner favorable to TWA.
Following appeals, the Bankruptcy Court's decision was affirmed on
January 20, 1998. The cash undertaking previously posted by TWA was
returned to TWA in June 1998 and is reflected in other income in 1998.
After deduction of $3.3 million for reimbursement of certain administrative
costs previously incurred by TWA, $10.4 million received pursuant to this
proceeding was applied in July 1998 to reduce the Pension Benefit Guaranty
Notes ("PBGC Notes").
TWA is subject to numerous environmental laws and regulations
administered by various state and federal agencies. Although the
Company believes adequate reserves have been provided for all known
environmental contingencies, it is possible that additional reserves
might be required in the future which could have a material effect on
the results of operations or financial condition of the Company.
However, the Company believes that the ultimate resolution of known
environmental contingencies should not have a material adverse effect on
its financial position or results of operations based on the Company's
knowledge of similar environmental sites.
Since May 1991, TWA's employees in Israel have claimed that the
Company should be required to collateralize its contingent payment of
termination indemnities. This matter deals only with collateralization
of a contingent payment obligation. The employees have asserted that
the amount necessary to collateralize the contingent payment of
termination indemnities could be as much as $25 million. The Company
denies any obligation to collateralize and asserts that any obligation
to collateralize any termination indemnity is not a current obligation.
In connection with certain wage scale adjustments afforded to non-
contract employees, employees previously represented by IFFA have
asserted and won an arbitration ruling with respect to the comparability
of wage concessions made in 1994 that, if sustained, would require TWA
to provide additional compensation to these employees. The Eighth
Circuit Court of Appeals upheld a district court ruling that affirmed the
arbitrator's award. TWA has filed a motion before the District Court for
the Eastern District of Missouri seeking referral of the matter to the
System Board of Adjustment for determination on TWA's claim that, to the
extent it was unsuccessful on the merits, actions taken by TWA following
issuance of the arbitrator's award and in accordance with the arbitrator's
opinion have substantially, if not totally, mitigated potential damages.
Accordingly, the Company has not recorded any liability for this litigation.
The IAM (now collective bargaining agent for employees formerly represented
by IFFA) has filed a motion requesting the district court to hold TWA in
contempt of court and to order TWA to implement the arbitration award. TWA
believes that pending the district court's ruling on TWA's motion to remand,
TWA is not required to implement the arbitration award and the IAM's motion
is without merit. The amount, if any, due under the award is incapable of
being determined pending the district court's ruling on TWA's motion and,
if remanded, the decision of the System Board of Adjustment.
The Company is also defending a number of other actions which have
arisen in the ordinary course of business, and are insured or the likely
outcome of which the management of the Company does not believe may
reasonably be expected to be materially adverse to the Company's
financial condition or results of operations.
11. AIRCRAFT COMMITMENTS:
TWA entered into an agreement in February 1996 with Boeing for the
purchase of ten B-757-231 aircraft and related engines, spare parts and
equipment for an aggregate purchase price of approximately $500 million.
As of December 31, 1998, TWA had taken delivery of six aircraft and had
four on firm order. Five of the six aircraft already delivered were
originally manufacturer-financed and one was leased. In separate
F-29
<PAGE>
<PAGE>
transactions in June, July and October 1998, these five manufacturer-
financed aircraft were sold to, and leased back from, an aircraft
lessor. The four remaining aircraft are scheduled to be delivered in
1999 and 2000. The first of these aircraft was delivered in March 1999
and was immediately sold to, and leased back under an operating lease
from an aircraft lessor. TWA has obtained commitments for debt financing
for approximately 80% of the cost of acquiring two of the remaining
three aircraft and commitments for 100% lease financing of the cost
of acquiring the remaining aircraft. In September 1998, TWA entered
into an agreement with Boeing to acquire four additional B-757-231
aircraft to be delivered during 1999. TWA has obtained commitments
for debt financing for approximately 80% of the cost of acquiring these
aircraft. These commitments are subject to, among other things, material
adverse change clauses that make the availability of this debt and lease
financing dependent upon the financial condition of TWA at the time of
delivery.
The Company has entered into an agreement for the operating lease
for one additional B-767-300ER and three additional B-757-200 aircraft.
These aircraft are scheduled to be delivered in 1999, excluding one
B-757-200 that is scheduled for delivery in January 2000.
The Company has granted to a major financial institution the
option to purchase and leaseback to TWA, under substantially the same
terms and conditions as another B-757 aircraft previously leased to TWA
in 1998, four of the eight B-757-231 aircraft to be delivered by Boeing
during 1999.
In 1989, TWA entered into agreements with AVSA, S.A.R.L. ("Airbus") and
Rolls-Royce plc relating to the purchase of ten A330-300 twin-engine
wide-body aircraft and related engines, spare parts and equipment for an
aggregate purchase price of approximately $1.0 billion. The agreements,
as amended, require the delivery of the aircraft in 2001 and 2002 and
provide for the purchase of up to ten additional aircraft. TWA has not
yet made arrangements for the permanent financing of the purchases
subject to the agreements. In the event of cancellation, predelivery
payments of approximately $18 million may be subject to forfeiture.
In 1996, TWA entered into an agreement to acquire from Boeing 15
new MD-83s, to be financed by long-term leases. As of December 31,
1998, TWA had taken delivery of 13 of the MD-83 aircraft and expects to
take delivery of two additional planes in 1999.
In April 1998, TWA entered into an agreement with Boeing to
acquire 24 additional new MD-83 aircraft, with deliveries in 1999. The
Company has obtained commitments for long-term debt and lease financing
for these aircraft.
In December 1998, TWA announced that it had signed letters of
intent to acquire an additional 125 new aircraft: 50 Boeing 717-200
aircraft for delivery beginning in 2000, 50 Airbus A318 aircraft for
delivery beginning in 2003 and 25 Airbus "A320 Family" aircraft for
delivery beginning in 2005. In addition to these 125 firm orders, TWA
has taken options on an additional 50 Boeing 717s and an additional 75
"A320 Family" aircraft. The letter of intent includes financing for all
of the firm order aircraft. The terms of the purchase orders and the
related financing are subject to further negotiation and the signing of
definitive agreements. These new aircraft would primarily replace
B-727, DC-9 and older MD-80 aircraft currently in TWA's fleet.
TWA elected to comply with the transition requirements of the
Airport Noise and Capacity Act of 1990 (the "Noise Act") by adopting the
Stage 2 aircraft phase-out/retrofit option, which requires that 50% of
its base level (December 1990) Stage 2 fleet be phased-out/retrofitted
by December 31, 1996. To comply with the 1996 requirement, the Company
has retrofitted, by means of engine hush-kits, 30 of its DC-9 aircraft
at an aggregate cost of approximately $55.5 million, most of which was
financed by lessors with repayments being facilitated through increased
rental rates or lease term extensions. TWA complied with the transition
requirements for December 31, 1998, by having 75% of its fleet meet
Stage 3 requirements through the grounding of older Stage 2 aircraft in
combination with the acquisition of Stage 3 aircraft. By December 31,
1999, 100% of the fleet must meet Stage 3 requirements.
In February 1999, TWA signed letters of intent with an aircraft lessor
to sell and leaseback six Boeing 767-200 aircraft which would subsequently
be returned to the lessor and replaced with three Boeing 767-300 aircraft
from the same aircraft lessor. In connection with this transaction, the
Company has made an offer to purchase for cash up to $28.8 million total
principal amount of its outstanding 11 3/8% Senior Secured Notes due
April 15, 2003 and any and all of its outstanding 10 1/4% Senior Secured
Notes due June 15, 2003 (collectively, the "Notes"). The offer to purchase
is subject to the consummation of the sale by TWA of the collateral that
currently secures the Notes.
F-30
<PAGE>
<PAGE>
12. FINANCIAL CONDITION AND LIQUIDITY:
TWA emerged from a bankruptcy proceeding in August 1995. In
connection with the 1995 reorganization, TWA applied fresh start
reporting in accordance with generally accepted accounting principles,
which resulted in the creation of a new reporting entity for accounting
purposes and TWA's assets and liabilities being adjusted to reflect fair
values on the effective date of the 1995 reorganization.
Since 1995, TWA has sustained significant net losses, although
these losses have generally decreased each year, excluding special
charges. The Company's long-term viability, as well as its ability to
meet its existing debt and other obligations and future capital needs
and commitments, depends on its ability to achieve and maintain
profitable operations. Consequently, TWA seeks to improve operational
reliability and productivity, schedule integrity and overall product
quality in order to accomplish this goal. To that end, TWA has
implemented and continues to focus its efforts on the following key
initiatives:
* modernizing its fleet;
* focusing on improved productivity;
* implementing a series of revenue-enhancing marketing
initiatives to attract higher-yield business travelers;
* implementing a number of employee-related initiatives to
reinforce TWA's focus on operational performance; and
* optimizing TWA's route structure.
Although TWA began implementing operational changes in late 1996
that are intended to improve TWA's financial results, TWA has incurred
and will incur additional expenses as a result of these changes,
including aircraft rental expenses, and these changes may not make TWA's
future operations profitable. TWA's ability to continue to improve its
financial position and to meet its financial obligations depends upon a
number of uncertainties that may adversely impact its future results of
operations, including:
* insufficient levels of air passenger traffic resulting from,
among other things, war, threat of war, terrorism or changes
in the economy;
* governmental limitations on the ability of TWA to service
certain airports and/or foreign markets;
* regulatory requirements necessitating additional capital
expenditures;
* pricing and scheduling initiatives by competitors;
* the availability and cost of capital;
* increases in fuel and other operating costs;
* the outcome of certain ongoing labor negotiations; and
* the adverse effects on yield of the continued implementation
of a discount ticket program (the "Ticket Agreement")
between TWA and Karabu Corporation, a company controlled by
Carl Icahn ("Karabu"), on terms currently applied by Karabu.
(TWA believes these terms are inconsistent with, and in
violation of, the Ticket Agreement governing this program.)
For the full year ended December 31, 1998, the Company's financial
results reflected operating revenues of $3,259.1 million (a decrease of
$68.9 million from operating revenues of $3,328.0 million for the full
year 1997), an operating loss of $65.2 million which included special
charges of $42.6 million and earned stock compensation charges of $27.5
million (a decrease of $35.9 million over the full year 1997 operating
loss of $29.3 million which included earned stock compensation charges
of $4.2 million), and a net loss of $120.5 million including a non-cash
extraordinary loss of $13.1 million related to the early
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<PAGE>
<PAGE>
extinguishment of debt and special charges of $42.6 million (a decrease
of $9.7 million over a net loss of $110.8 million in 1997 which included
a non-cash extraordinary charge of $21.0 million related to the early
extinguishment of debt).
Overall, revenues generated as a result of moderate year over year
increases in load factor and yield for 1998, while reflecting the
Company's emphasis to improve system yield, were not sufficient to
offset the decline in capacity. System capacity was down significantly
year over year, due in part to the planned replacement of older L-1011
and B-747 aircraft with new B-757, B-767 and MD-80 aircraft on many
routes. This capacity change reflects the continued planned "leveling"
of TWA's seasonal schedules and the elimination of certain unprofitable
international destinations. The Company recognizes the need to
establish a better balance between yield enhancement and total revenue
generation and continues to implement measures to achieve this goal.
TWA's first quarter operating results have historically been
considerably less favorable than other quarters and typically reflect
substantial operating and net losses. Notwithstanding actions taken to
date and planned by management to improve the Company's future operating
results and performance, TWA anticipates reporting operating and net
losses in the first quarter 1999.
The Company's consolidated cash and cash equivalents balance at
December 31, 1998 was $252.4 million, a $14.6 million increase from the
December 31, 1997 balance of $237.8 million. The net increase in cash
and cash equivalents during 1998 was due, in large part, to cash
provided by proceeds from the sale of notes and from the sale and
leaseback of certain aircraft and engines in 1998. These proceeds were
used for the repayment of long-term debt and capital lease obligations
and for working capital and other general corporate purposes.
The 1994 labor agreements became amendable after August 31, 1997
and negotiations on a new collective bargaining agreement with ALPA
commenced in June 1997. TWA reached agreement with ALPA that became
effective on September 1, 1998.
As part of the new contract, TWA agreed to pay increases over the next
four years that will result in wages for TWA's pilots improving by 2002 to
90% of the industry average as determined by wage rates in contracts in
effect as of August 1998. The contract also provides for significant work
rule improvements for pilots while also granting TWA flexibility and
improvements necessary to enhance its competitive position.
TWA also may issue shares to employees under the terms of its new
contract with ALPA. The new ALPA contract requires TWA to distribute
either one million shares of TWA's common stock or $11 million in cash
to ALPA members, in four equal quarterly payments commencing in 1999.
TWA has the option to make each quarterly payment in shares or in cash.
TWA is currently engaged in negotiations with its flight
attendants and ground employees on new collective bargaining agreements
and expects that the new agreements with these employees will likely
result in additional increases in wage rates. TWA believes it is
essential to improve employee productivity as an offset to any wage
increases and will continue to explore other ways to control and/or
reduce operating expenses. It is also essential that its labor costs
remain favorable in comparison to its largest competitors. As the
Company's financial resources are not as great as those of most of its
competitors, any substantial increase in its labor costs as a result of
any new labor agreements or any cessation or disruption of operations
due to any strike or work action could be particularly damaging to the
Company. The outcome of these labor negotiations and the terms of any
contracts cannot be predicted at this time.
On June 14, 1995, TWA entered into a 99-month Ticket Agreement
with Karabu, which permitted Karabu to purchase two categories of
discounted tickets: (1) "domestic consolidator tickets," which are
subject to a cap of $610 million, based on the full retail price of
tickets ($120 million in the first fifteen months and $70 million per
year for seven consecutive years through the term of the agreement), and
(2) "system tickets," which are not subject to any cap throughout the
term of the agreement. Tickets sold by the Company to Karabu pursuant
to the Ticket Agreement are priced at levels intended to approximate
current competitive discount fares available in the airline industry.
TWA believes the applicable provisions of the Ticket Agreement do not
allow Karabu to market or sell system tickets through travel agents or
directly to the public. Karabu, however, has been marketing system
tickets through travel agents and directly to the
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<PAGE>
<PAGE>
general public. TWA has demanded that Karabu cease doing so, and Karabu
has stated that it disagrees with TWA's interpretation concerning sales
through travel agents or directly to the general public.
In December 1995, TWA filed a lawsuit against Karabu, Mr. Icahn,
and certain affiliated companies seeking damages and to enjoin further
violations of the Ticket Agreement. Mr. Icahn countered by threatening
to file his own lawsuit and to declare a default on the loans from
entities related to Mr. Icahn, which financing was then secured by
certain receivables and flight equipment and have since been fully
repaid. Mr. Icahn's position was based upon a variety of claims related
to his interpretations of the security agreement as well as with respect
to certain alleged violations of the Ticket Agreement by TWA. The
parties negotiated a series of standstill agreements pursuant to which
TWA's original lawsuit was withdrawn while TWA and Mr. Icahn endeavored
to negotiate a settlement of their differences and respective claims.
On March 20, 1996, TWA filed a petition in Circuit Court for St. Louis
County, Missouri, commencing a lawsuit against Mr. Icahn, Karabu, and
certain other entities affiliated with Mr. Icahn. The TWA petition
alleged that the defendants are violating the Ticket Agreement and
otherwise tortiously interfering with TWA's business expectancy and
contractual relationships. The TWA petition sought a declaratory
judgment finding that the defendants have violated the Ticket Agreement,
and also sought liquidated, compensatory and punitive damages, in
addition to TWA's costs and attorney's fees. On May 7, 1998, the court
denied the TWA petition and dismissed the defendants' counterclaims.
The court concluded that the defendants could sell discount tickets under
the Ticket Agreement to any person who actually uses the ticket,
including non-business travelers, and that the defendants had not
breached the Ticket Agreement. No damages were assessed in respect to
either plaintiff's or defendants' petitions.
The defendants have moved to amend or modify the court's ruling to
include a declaratory judgement that the defendants are permitted to
sell tickets to any person for any purpose, which could include use by
the purchaser's family members or friends. TWA has opposed this motion
and has requested that the court clarify the ruling to limit its scope
consistent with the reasoning set forth in the decision, specifically so
that the person purchasing the ticket must use the ticket (with certain
enumerated exceptions) and may not purchase a ticket for any other
person. The court denied both motions on June 25, 1998. TWA has
appealed denial of its motion for clarification and the court's original
ruling.
Although TWA intends to press its claims vigorously, it is
possible that Karabu's interpretation of the Ticket Agreement regarding
system discount ticket sales by the defendants through travel agents or
directly to the general public could be determined, either by a court or
otherwise, to be correct. In such event, unless TWA took appropriate
action to mitigate the effect of these sales, TWA could suffer loss of
revenue and reduced overall passenger yields on a continuing basis
during the term of the Ticket Agreement.
Ticket sales under the Ticket Agreement, which commenced in
September 1995, were $274.4 million in 1998, $236.1 million in 1997,
$139.7 million in 1996 and $16.0 million in 1995 at full published
fares. The aggregate net sales, after applicable discounts under the
Ticket Agreement, were $136.1 million in 1998, $129.9 million in 1997,
$76.9 million in 1996 and $8.8 million in 1995. Of these amounts,
$124.6 million, $116.0 million, $71.5 million and $4.4 million are
included as passenger revenues for 1998, 1997, 1996 and the four months
ended December 31, 1995, respectively, as the related transportation had
been provided. Substantially all ticket sales under the Ticket
Agreement to date have been "System Tickets".
Net discounted sales from tickets sold under the Ticket Agreement
with Karabu have been excluded from cash flows from operating activities
because the related amounts were applied to reduce certain loans to TWA
provided by entities controlled by Carl Icahn ("Icahn Loans") and
certain promissory notes payable by TWA to the PBGC. The purchase price
of tickets purchased by Karabu under the Ticket Agreement were required
to either, at Karabu's option and with certain restrictions, be retained
by Karabu and the amount so retained be credited as prepayments against
outstanding balances of Icahn Loans, or be paid over to the
F-33
<PAGE>
<PAGE>
settlement trust established for TWA's account as prepayments on the
PBGC promissory notes. On December 30, 1997, TWA repaid the outstanding
balance of the Icahn Loans out of the proceeds of a receivables
securitization offering by the Company. In December 1998, the PBGC
promissory notes were paid in full with the proceeds from ticket sales.
Accordingly, proceeds from the sales of tickets under the Karabu
Ticket Agreement are now paid directly to TWA.
TWA has assigned substantial value to routes, gates and slots
($458.4 million) and reorganization value in excess of amounts allocable
to identifiable assets ($839.1 million). The amortization of these assets,
while not requiring the use of cash, will significantly affect future
operating results. The Company has evaluated its future cash flows and
notwithstanding the operating loss experienced since the 1995
reorganization, expects that the carrying value of the intangibles at
December 31, 1998 will be recovered. However, the achievement of these
improved future operating results and cash flows are subject to
considerable uncertainties. In future periods, TWA will evaluate these
intangibles for recoverability based upon estimated future cash flows.
If TWA does not achieve these expectations, it may be required to charge
future operations for impairment of these assets, and these charges
could be material.
TWA generally must satisfy all of its capital expenditure
requirements from cash provided by operating activities, from external
capital sources or from the sale of assets. However, TWA has pledged a
substantial portion of its assets to secure various issues of its
outstanding debt. TWA's financing agreements generally require TWA to
apply the proceeds from the sale of any pledged assets to repay the
corresponding debt. If TWA is unable to obtain additional capital, TWA
may not be able to make certain capital expenditures or to continue to
implement certain other aspects of its strategic plan, and TWA may
therefore be unable to achieve the full benefits expected from the plan.
13. EXTRAORDINARY ITEMS:
The Company recorded extraordinary charges of approximately $13.1
million in 1998, $9.9 million in 1997 and $1.6 million in 1996 due to
the early extinguishment of a portion of the PBGC Notes as a result of
Karabu applying approximately $148.3 million in 1998, $70.3 million in
1997 and $6.4 million in 1996 in ticket proceeds as prepayments on the
PBGC Notes.
In 1997 and 1996, the Company consummated a series of privately
negotiated exchanges with a significant holder of the 12% Senior Secured
Reset Notes which resulted in the return to the Company of approximately
$51.8 million, in 1997, and $45.3 million, in 1996, in 12% Senior
Secured Reset Notes and approximately $1.4 million, in 1997, and $1.5
million, in 1996, in accrued interest thereon in exchange for the
issuance of approximately 7.7 million, in 1997, and 4.5 million, in
1996, in shares of the Company's common stock. As a result of the exchange of
the 12% Senior Secured Reset Notes, the Company recorded an
extraordinary non-cash charge of $7.2 million in 1997 and $8.2 million
in 1996 representing the difference between the fair value of the common
stock issued (based upon the trading price of the Company's common stock
on the dates of exchanges) and the carrying value of the 12% Senior
Secured Reset Notes retired.
During December 1997, the Company prepaid the remaining 12% Senior
Secured Reset Notes, incurring an extraordinary non-cash charge of $3.9
million relative to the write off of the unamortized discount on the
Notes.
14. SPECIAL CHARGES AND OTHER NONRECURRING ITEMS:
The 1998 operating loss includes approximately $42.6 million in
special charges associated with the Company's ongoing fleet renewal
program and elimination of excess overhead items.
F-34
<PAGE>
<PAGE>
As part of TWA's continuing strategy to update its existing
aircraft fleet with newer, more modern equipment, management has made
the decision to set down and return a number of older aircraft currently
under lease agreements. In order to comply with the lease return conditions
contained in the respective lease agreements, these aircraft are expected
to require additional costs at lease termination. Accordingly, the Company
recorded a charge of $25.0 million which represents management's best
estimate of these costs. These costs are expected to be paid by the Company
over the next 18 months.
As part of TWA's ongoing restructuring of its international
operations and the closure of the Los Angeles reservations office, the
Company recorded a special charge of approximately $17.6 million
primarily related to employee severance liabilities. These severance
costs are expected to be paid to the respective employees over the next
12 months.
The 1996 operating loss included an aggregate of approximately
$85.9 million in special charges and nonrecurring items, primarily as
follows:
(1) approximately $26.7 million to reflect the write-off
of the carrying value of TWA's New York-Athens route
authority over which TWA elected to discontinue
service,
(2) approximately $53.7 million to reflect the reduction
in carrying value of TWA's owned L-1011 and B-747
aircraft and related spare parts which were retired
from service in 1997 and early 1998, and
(3) approximately $5.5 million for employee severance
liabilities related to the termination of service to
Athens and Frankfurt.
The write-down of owned aircraft and related spare parts in 1996
was based upon management's estimates of the net proceeds to be received
upon the disposition of these assets. At December 31, 1998, the
remaining accrual aggregated approximately $3.0 million which
principally related to the retirement of B-747 aircraft.
15. DISPOSITION OF ASSETS:
Disposition of assets resulted in net gains of $20.1 million and
$16.0 million in 1998 and 1997, respectively, and in a net loss of $1.1
million in 1996.
In 1998, TWA recorded gains of $20.1 million in connection with
the sale of spare flight equipment, aircraft, engines and other
miscellaneous property.
F-35
<PAGE>
<PAGE>
In 1997, TWA recorded gains of $7.4 million in connection with the
sale of three gates at Newark International Airport and $8.6 million in
connection with the sale of spare flight equipment, aircraft, engines
and other miscellaneous property.
In 1996, TWA recorded a gain of approximately $8.0 million in
connection with the hull insurance settlement for the aircraft destroyed
in the Flight 800 incident. The gain was offset by a loss of $8.3
million on the sale of expendable aircraft parts and losses of $0.8
million on other miscellaneous dispositions.
16. OTHER CHARGES AND CREDITS-NET:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------
1998 1997 1996
-------- -------- --------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Provisions for losses resulting from claims and litigation
judgments against TWA $ 1,329 $ 143 $ 235
Foreign currency transaction (gains) losses-net 200 578 (642)
Finance charge income earned on receivables carried by TWA (7,666) (8,112) (8,030)
Credits related to settlement of various contract disputes,
litigation and other matters (13,693) (289) (2,500)
Credits related to vendor discounts applied net of late payment
fees (2,692) (4,810) (7,074)
Equity in earnings of TWA's investment in Worldspan
(Note 2) (9,100) (11,305) (11,919)
Miscellaneous other nonoperating charges (credits)-net 1,776 368 1,311
-------- -------- --------
Total Other Charges and Credits-net $(29,846) $(23,427) $(28,619)
======== ======== ========
</TABLE>
17. SEGMENT REPORTING:
TWA has adopted SFAS 131, Disclosures about Segments of an
Enterprise and Related Information, which establishes standards for
reporting information about operating segments in annual financial
statements. The standard defines an operating segment as a component of
an enterprise for which discrete financial information is available and
is regularly evaluated by the chief operating decision maker. TWA
believes that it operates within only one such segment under the
standard, that of air transportation. However, that segment is analyzed
and reported in two primary geographic areas, Domestic and International
(the Atlantic division as reported to the Department of Transportation).
Information related to revenues generated from operations within those
geographic areas is presented below.
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Operating Revenues (in millions):
Domestic $2,841.5 $2,809.7 $2,835.2
International 417.6 518.3 719.2
-------- -------- --------
Total $3,259.1 $3,328.0 $3,554.4
======== ======== ========
</TABLE>
TWA identifies revenues to each division based on dollars generated
by specific flight segment and the division in which each flight segment
operates. A major portion of the Company's long-lived assets consists
of its flight equipment (aircraft) which are not assigned to a specific
geographic area, but rather are flown across geographic boundaries.
F-36
<PAGE>
<PAGE>
18. DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS:
SFAS No. 107, "Disclosures About Fair Value of Financial
Instruments" requires disclosures with regards to fair values of all
financial instruments, whether recognized or not recognized in the
balance sheet, subject to certain exceptions. Solely for purposes of
complying with this accounting standard, the Company has estimated the
fair value of certain of its financial instruments, as further described
below. Because no market exists for a significant portion of TWA's
financial instruments, fair value estimates provided below are based on
judgments regarding current economic conditions, risk characteristics of
various financial instruments, and other factors. These estimates are
subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates. The
discussion of financial instruments below conforms with the presentation
in the Consolidated Balance Sheets and relates to the amounts at
December 31, 1998 and 1997.
(a) Cash, cash equivalents and receivables: The carrying amounts of
these assets are estimated to approximate fair value due to the
generally short maturities of these instruments.
(b) Other investments and receivables: The carrying amounts of these
assets are estimated to approximate fair value due to the
generally short maturities of the underlying instruments which
are, however, classified as long-term assets because TWA's ability
to access these amounts is generally restricted by contractual
provisions.
(c) Accounts payable and other accrued liabilities: The carrying
amounts of these liabilities are estimated to approximate fair
value due to the generally short maturities of these instruments.
(d) Debt: On December 31, 1998, TWA's publicly traded debt had a
carrying value of $288.5 million and a market value of $192.8
million, while at December 31, 1997, the Company had no publicly
traded debt. The Company believes the fair value of the remaining
debt, which had an aggregate carrying value of approximately
$395.4 million and $787.9 million at December 31, 1998 and 1997,
respectively, was approximately $393.5 million and $800.4 million
on those dates.
In connection with credit card sales, the Company has agreed to
maintain specified levels of deposits or a letter of credit. At
December 31, 1998, a letter of credit of $20.0 million had been issued
for the Company's benefit to provide the required level of deposits.
19. FUEL PRICE RISK MANAGEMENT
TWA enters into fuel swap contracts to protect against significant
increases in jet fuel prices. Under the agreements, the Company receives
or makes payments based on the difference between a fixed price and a
variable price for certain fuel commodities. The changes in market
value of such agreements have a high correlation to the price changes of
the fuel being hedged. Gains and losses on fuel swap agreements are
recognized as a component of fuel expense when the underlying fuel being
hedged is used. Gains and losses on fuel swap agreements would be
recognized immediately were the changes in market value of the
agreements to cease to have a high correlation to the price changes of
the fuel being hedged.
At December 31, 1998, TWA had agreements with broker-dealers to
exchange payments on approximately 26 million gallons of fuel products,
which represents a minor portion of the Company's fuel requirements in
the first six months of 1999. The fair value of the Company's fuel swap
agreements at December 31, 1998, representing the amount the Company
would pay to terminate the agreements, totaled $1.8 million.
F-37
<PAGE>
<PAGE>
20. SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED):
Selected consolidated financial data (unaudited) for each quarter
within 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1998
Operating revenues $765,389 $883,536 $863,158 $747,064
======== ======== ======== ========
Operating income (loss) $(68,707) $ 45,548 $ 23,694 $(65,694)
======== ======== ======== ========
Disposition of assets, gains (losses) - net $ 6,997 $ 11,810 $ 2,100 $ (820)
======== ======== ======== ========
Income (loss) before extraordinary items $(54,140) $ 24,750 $ (923) $(77,099)
======== ======== ======== ========
Extraordinary items $ (1,380) $ (5,256) $ (4,390) $ (2,043)
======== ======== ======== ========
Net income (loss) $(55,520) $ 19,494 $ (5,313) $(79,142)
======== ======== ======== ========
Per share amounts:
Basic:
Earnings (loss) before extraordinary items $ (1.04) $ .33 $ (.11) $ (1.27)
======== ======== ======== ========
Extraordinary items $ (.02) $ (.09) $ (.07) $ (.03)
======== ======== ======== ========
Net income (loss) $ (1.06) $ .24 $ (.18) $ (1.30)
======== ======== ======== ========
Diluted:
Net income (loss) $ (1.06) $ .21 $ (.18) $ (1.30)
======== ======== ======== ========
YEAR ENDED DECEMBER 31, 1997
Operating revenues $762,306 $844,442 $908,381 $812,823
======== ======== ======== ========
Operating income (loss) $(99,486) $ 5,932 $ 63,757 $ 537
======== ======== ======== ========
Disposition of assets, gains (losses) - net $ 9,350 $ 3,030 $ 2,828 $ 796
======== ======== ======== ========
Income (loss) before extraordinary items $(70,032) $(11,995) $ 13,276 $(21,111)
======== ======== ======== ========
Extraordinary items $ (1,532) $ (2,405) $ (6,985) $(10,051)
======== ======== ======== ========
Net income (loss) $(71,564) $(14,400) $ 6,291 $(31,162)
======== ======== ======== ========
Per share amounts:
Basic:
Earnings (loss) before extraordinary items $ (1.51) $ (.31) $ .17 $ (.44)
======== ======== ======== ========
Extraordinary items $ (.03) $ (.05) $ (.13) $ (.18)
======== ======== ======== ========
Net income (loss) $ (1.54) $ (.36) $ .04 $ (.62)
======== ======== ======== ========
Diluted:
Net income (loss) $ (1.54) $ (.36) $ .04 $ (.62)
======== ======== ======== ========
</TABLE>
The results for each period include all adjustments which are, in
the opinion of management, necessary for a fair statement of the results
for the interim periods.
The consolidated financial results on an interim basis are not
necessarily indicative of future financial results on either an interim
or annual basis. TWA's air transportation business is highly seasonal
with the second and third quarters of the calendar year historically
producing substantially better operating results than the first and
fourth quarters.
The results for the fourth quarter of 1998 include special charges
of $42.6 million (see Note 14). Additionally, such results include
a favorable accrual adjustment to salaries, wages and benefits of
approximately $8.0 million as a result of changes in estimates.
F-38
<PAGE>
<PAGE>
<TABLE>
SCHEDULE II
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(AMOUNTS IN THOUSANDS)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- - ------------------------------------------- ------------ ---------- ---------- ----------
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OF COSTS & END OF
DESCRIPTION PERIOD EXPENSES DEDUCTIONS PERIOD
- - ------------------------------------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1998
Reserves deducted from assets to which they apply:
Allowance for doubtful accounts $ 9,334 $ 5,711 $ 586<Fa> $14,459
======= ======= ======= =======
Allowance for obsolescence $19,176 $ 1,804 $ 426 $20,554
======= ======= ======= =======
YEAR ENDED DECEMBER 31, 1997
Reserves deducted from assets to which they apply:
Allowance for doubtful accounts $12,939 $ 2,457 $ 6,062<Fa> $ 9,334
======= ======= ======= =======
Allowance for obsolescence $29,463 $ 1,635 $11,922 $19,176
======= ======= ======= =======
YEAR ENDED DECEMBER 31, 1996
Reserves deducted from assets to which they apply:
Allowance for doubtful accounts $13,517 $ 8,037 $ 8,615<Fa> $12,939
======= ======= ======= =======
Allowance for obsolescence $ 2,201 $28,889 $ 1,627 $29,463
======= ======= ======= =======
<FN>
- - ---------------
<Fa> Accounts written off, less recoveries.
</TABLE>
S-1
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
March 31, 1999 TRANS WORLD AIRLINES, INC.
By: /s/ Gerald L. Gitner
--------------------
Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Gerald L. Gitner Director, Chairman of the Board and March 31, 1999
- - ---------------------------- Chief Executive Officer (Principal
Gerald L. Gitner Executive Officer
/s/ Michael J. Palumbo Executive Vice President and Chief March 31, 1999
- - ---------------------------- Financial Officer (Principal Financial
Michael J. Palumbo Officer and Principal Accounting
Officer)
<F*>/s/ John W. Bachmann Director March 31, 1999
- - ----------------------------
John W. Bachmann
<F*>/s/ William F. Compton Director March 31, 1999
- - ----------------------------
William F. Compton
<F*>/s/ Eugene P. Conese Director March 31, 1999
- - ----------------------------
Eugene P. Conese
Director March 31, 1999
- - ----------------------------
Sherry L. Cooper
<F*>/s/ Edgar M. House Director March 31, 1999
- - ----------------------------
Edgar M. House
<F*>/s/ Thomas H. Jacobsen Director March 31, 1999
- - ----------------------------
Thomas H. Jacobsen
D-1
<PAGE>
<PAGE>
<F*>/s/ Myron Kaplan Director March 31, 1999
- - ----------------------------
Myron Kaplan
<F*>/s/ David M. Kennedy Director March 31, 1999
- - ----------------------------
David M. Kennedy
<F*>/s/ Merrill A. McPeak Director March 31, 1999
- - ----------------------------
Merrill A. McPeak
<F*>/s/ Thomas F. Meagher Director March 31, 1999
- - ----------------------------
Thomas F. Meagher
<F*>/s/ Brent S. Miller Director March 31, 1999
- - ----------------------------
Brent S. Miller
Director March 31, 1999
- - ----------------------------
William O'Driscoll
<F*>/s/ G. Joseph Reddington Director March 31, 1999
- - ----------------------------
G. Joseph Reddington
<F*>/s/ Blanche M. Touhill Director March 31, 1999
- - ----------------------------
Blanch M. Touhill
<FN>
<F*>By: /s/ Kathleen A. Soled
-----------------------
Attorney-in-fact
</TABLE>
D-2
<PAGE>
<PAGE>
EXHIBIT INDEX
<F*>2.1 Joint Plan of Reorganization, dated May 12, 1995 (Appendix B
to the Registrant's Registration Statement on Form S-4,
Registration Number 33-84944, as amended)
<F*>2.2 Modifications to Joint Plan of Reorganization, dated July
14, 1995 and Supplemental Modifications to Joint Plan of
Reorganization dated August 2, 1995 (Exhibit 2.5 to 6/95
10-Q)
<F*>2.3 Findings of Fact, Conclusions of Law and Order Confirming
Modified Joint Plan of Reorganization, dated August 4, 1995,
with Exhibits A-B attached (Exhibit 2.6 to 6/95 10-Q)
<F*>2.4 Final Decree, dated December 28, 1995, related to the 1995
reorganization (Exhibit 2.7 to 12/31/95 Form 10-K)
<F*>3(i) Third Amended and Restated Certificate of Incorporation of
the Registrant (Exhibit 3(i) to the Registrant's
Registration Statement on Form S-4, Registration Number
333-26645)
3(ii) Amended and Restated By-Laws of Trans World Airlines, Inc.,
effective December 8, 1998
<F*>4.1 Voting Trust Agreement, dated November 3, 1993, between TWA
and LaSalle National Trust, N.A. as trustee (Exhibit 4.3 to
9/93 10-Q)
<F*>4.2 IAM Trans World Employees' Stock Ownership Plan and related
Trust Agreement, dated August 31, 1993, between TWA, the IAM
Plan Trustee Committee and the IAM Trustee (Exhibit to 9/93
10-Q)
<F*>4.3 IFFA Trans World Employees' Stock Ownership Plan and related
Trust Agreement, dated August 31, 1993, between TWA, the
IFFA Plan Trustee Committee and the IFFA Trustee (Exhibit
4.5 to 9/93 10-Q)
<F*>4.4 Trans World Airlines, Inc. Employee Stock Ownership Plan,
dated August 31, 1993, First Amendment thereto, dated
October 31, 1993, and related Trust Agreement, dated August
31, 1993, between TWA and the ESOP Trustee (Exhibit 4.6 to
9/93 10-Q)
<F*>4.5 ALPA Stock Trust, dated August 31, 1993, between TWA and the
ALPA Trustee (Exhibit 4.7 to 9/93 10-Q)
<F*>4.6 Stockholders Agreement, dated November 3, 1993, among TWA,
LaSalle National Trust, N.A., as Voting Trustee and the ALPA
Trustee, IAM Trustee, IFFA Trustee and Other Employee
Trustee (each as defined therein), as amended by the
Addendum to Stockholders dated November 3, 1993 (Exhibit 4.8
to 9/93 10-Q)
<F*>4.7 Registration Rights Agreement, dated November 3, 1993,
between TWA and the Initial Significant Holders (Exhibit 4.9
to 9/93 10-Q)
E-1
<PAGE>
<PAGE>
<F*>4.8 Indenture between TWA and Harris Trust and Savings Bank,
dated November 3, 1993 relating to TWA's 8% Senior Secured
Notes Due 2000 (Exhibit 4.11 to 9/93 10-Q)
<F*>4.9 Indenture between TWA and American National Bank and Trust
Company of Chicago, N.A., dated November 3, 1993 relating to
TWA's 8% Secured Notes Due 2001 (Exhibit 4.12 to 9/93 10-Q)
<F*>4.10 The TWA Air Line Pilots 1995 Employee Stock Ownership Plan,
effective as of January 1, 1995 (Exhibit 4.12 to 9/95 10-Q)
<F*>4.11 TWA Air Line Pilots Supplemental Stock Plan, effective
September 1, 1994 (Exhibit 4.13 to 9/95 10-Q)
<F*>4.12 TWA Air Line Pilots Supplemental Stock Plan Trust, effective
August 23, 1995 (Exhibit 4.14 to 9/95 10-Q)
<F*>4.13 TWA Air Line Pilots Supplemental Stock Plan Custodial
Agreement, effective August 23, 1995 (Exhibit 4.15 to 9/95
10-Q)
<F*>4.14 Form of Indenture relating to TWA's 8% Convertible
Subordinated Debentures Due 2006 (Exhibit 4.16 to
Registrant's Registration Statement on Form S-3, No.
333-04977)
<F*>4.15 Indenture dated as of March 31, 1997 between TWA and First
Security Bank, National Association relating to TWA's 12%
Senior Secured Notes due 2002 (Exhibit 4.15 to Registrant's
Registration Statement on Form S-4, No. 333-26645)
<F*>4.16 Form of 12% Senior Secured Note due 2002 (contained in
Indenture filed as Exhibit 4.15)
<F*>4.17 Registration Rights Agreement dated as of March 31, 1997
between the Company and the Initial Purchaser relating to
the 12% Senior Secured Notes due 2002 and the warrants to
purchase 126.26 shares of TWA Common Stock (Exhibit 4.17 to
Registrant's Registration Statement on Form S-4, No.
333-26645)
<F*>4.18 Warrant Agreement dated as of March 31, 1997 between the
Company and American Stock Transfer & Trust Company, as
Warrant Agent, relating to warrants to purchase 126.26
shares of TWA Common Stock (Exhibit 4.18 to Registrant's
Registration Statement on Form S-4, No. 333-26645)
<F*>4.19 Form of Indenture relating to TWA's 9-1/4% Convertible
Subordinated Debentures due 2007 (Exhibit 4.19 to
Registrant's Registration Statement on Form S-3, No.
333-44689)
<F*>4.20 Registration Rights Agreement dated as of December 2, 1997
between the Company and the Initial Purchasers (Exhibit
4.20 to Registrant's Registration Statement on Form S-3, No.
333-44689)
E-2
<PAGE>
<PAGE>
<F*>4.21 Indenture dated as of December 9, 1997 by and between TWA
and First Security Bank, National Association, as Trustee,
relating to TWA's 11-1/2% Senior Secured Notes due 2004
(Exhibit 4.21 to Registrant's Registration Statement on Form
S-4, No. 333-44661)
<F*>4.22 Form of 11-1/2% Senior Secured Note due 2004 (contained in
Indenture filed as Exhibit 4.21)
<F*>4.23 Registration Rights Agreement dated as of December 9, 1997
among the Company and Lazard Freres & Co. LLC and
PaineWebber Incorporated, as initial purchasers, relating to
TWA's 11-1/2% Senior Secured Notes due 2004 (Exhibit 4.23
to Registrant's Registration Statement on Form S-4, No.
333-44661)
<F*>4.24 Sale and Service Agreement dated as of December 30, 1997
between TWA and Constellation Finance LLC, as purchaser,
relating to TWA's receivables (Exhibit 4.24 to Registrant's
Registration Statement on Form S-4, No. 333-44661)
<F*>4.25 Registration Rights Agreement dated as of March 3, 1998
between the Company and the Initial Purchaser (Exhibit 4.25
to Registrant's Registration Statement on Form S-4, No.
333-59405)
<F*>4.26 Indenture dated as of March 3, 1998 by and between TWA and
First Security Bank, National Association, as Trustee,
relating to TWA's 11-3/8% Senior Notes due 2006 (Exhibit 4.26
to Registrant's Registration Statement on Form S-4, No.
333-59405)
<F*>4.27 Aircraft Sale and Note Purchase Agreement dated as of April
9, 1998 among TWA, First Security Bank, National
Association, as Owner Trustee and Seven Sixty Seven Leasing,
Inc. (Exhibit No. 4.27 to Registrant's Registration
Statement on Form S-4, No. 333-59405)
<F*>4.28 Indenture dated as of April 21, 1998 by and between TWA and
First Security Bank, National Association, as Trustee,
relating to TWA's 11-3/8% Senior Secured Notes due 2003
(Exhibit No. 4.28 to Registrant's Registration Statement on
Form S-4, No. 333-59405)
<F*>4.29 Form of 11-3/8% Senior Secured Notes due 2003 (contained as
Exhibit 1 to Rule 144A/Regulation S Appendix to Indenture in
Exhibit 4.28)
<F*>4.30 Registration Rights Agreement dated as of April 21, 1998
between the Company, Lazard Freres & Co. LLC and First
Security Bank, National Association relating to the 11-3/8%
Senior Secured Notes due 2003 (Exhibit 4.31 to Registrant's
Registration Statement on Form S-3, No. 333-56991)
<F*>4.31 Registration Rights Agreement dated as of April 21, 1998
between the Company, Lazard Freres & Co. LLC and First
Security Bank, National Association relating to the
Mandatory Conversion Equity Notes due 1999 (Exhibit 4.32 to
Registrant's Registration Statement on Form S-3, No.
333-56991)
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<PAGE>
<F*>4.32 Indenture dated as of June 16, 1998 by and between TWA and
First Security Bank, National Association, as Trustee,
relating to TWA's 10-1/4% Senior Secured Notes due 2003
<F*>4.33 Form of 10-1/4% Senior Secured Notes due 2003 (contained as
Exhibit 1 to Rule 144A/Regulation S Appendix to Indenture in
Exhibit 4.34)
<F*>4.34 Registration Rights Agreement dated as of June 16, 1998
between the Company, Lazard Freres & Co. LLC and First
Security Bank, National Association relating to the 10-1/4%
Senior Secured Notes due 2003
<F*>4.35 Registration Rights Agreement dated as of June 16, 1998
between the Company, Lazard Freres & Co. LLC and First
Security Bank, National Association relating to the 10-1/4%
Mandatory Conversion Equity Notes due 1999
<F*>10.1.1 Asset Purchase Agreement, dated as of November 4, 1993,
between TWA and St. Louis (Exhibit 10.2 to 9/93 10-Q)
<F*>10.1.2 Equipment Operating Lease Agreement, dated November 4, 1993,
between TWA and St. Louis (Exhibit 10.2 to 9/93 10-Q)
<F*>10.1.3 Cargo Use Amendment, dated November 4, 1993 between TWA and
St. Louis (Exhibit F to the Asset Purchase Agreement)
(Exhibit 10.2 to 9/93 10-Q)
<F*>10.1.4 Use Amendment 1993, dated November 4, 1993, between TWA and
St. Louis (Exhibit E to the Asset Purchase Agreement)
(Exhibit 10.2 to 9/93 10-Q)
<F*>10.2.1 Amendment Number One to the Note Purchase and Security
Agreement, dated October 26, 1993, between TWA and Rolls-
Royce (Exhibit 10.3 to 9/93 10-Q)
<F*>10.2.2 Amendment Number One to the Equipment Purchase Contract,
dated October 26, 1993, between TWA and Rolls-Royce (Exhibit
10.3 to 9/93 10-Q)
<F*>10.3 Amendment Number Two to the AVSA Agreement dated June 1,
1989 between TWA and AVSA, dated August 25, 1993 (Exhibit
10.4 to 9/93 10-Q)
<F*>10.4.1 First Amendment to Aircraft Installment Sale Agreement,
dated November 1, 1993, among TWA, the Vendors, and ITOCHU
with respect to aircraft N605TW (Exhibit 10.5 to 9/93 10-Q)
<F*>10.4.2 First Amendment to Aircraft Installment Sale Agreement,
dated November 1, 1993, among TWA, the Vendors, and ITOCHU
with respect to aircraft N603TW (Exhibit 10.5 to 9/93 10-Q)
<F*>10.4.3 First Amendment to Security Agreement and Chattel Mortgage,
dated November 1, 1993, among TWA, the Vendors, and ITOCHU,
as to ITOCHU Amendment No. 1 (Exhibit 10.5 to 9/93 10-Q)
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<PAGE>
<F*>10.4.4 First Amendment to Security Agreement and Chattel Mortgage,
dated November 1, 1993, among TWA, the Vendors, and ITOCHU,
as to ITOCHU Amendment No. 2 (Exhibit 10.5 to 9/93 10-Q)
<F*>10.5.1 Deferral Agreement and First Amendment to Aircraft
Installment Sale Agreement No. 1, dated November 1, 1993,
among TWA, the Vendors, and ORIX with respect to aircraft
N601TW (Exhibit 10.6 to 9/93 10-Q)
<F*>10.5.2 Deferral Agreement and First Amendment to Aircraft
Installment Sale Agreement, dated November 1, 1993, among
TWA, the Vendors, and ORIX with respect to aircraft N603TW
(Exhibit 10.6 to 9/93 10-Q)
<F*>10.5.3 First Amendment to Security Agreement and Chattel Mortgage,
dated November 1, 1993, among TWA, the Vendors, and ORIX, as
to ORIX Amendment No. 1 (Exhibit 10.6 to 9/93 10-Q)
<F*>10.5.4 First Amendment to Security Agreement and Chattel Mortgage,
dated November 1, 1993, among TWA, the Vendors, and ORIX, as
to ORIX Amendment No. 2 (Exhibit 10.6 to 9/93 10-Q)
<F*>10.6.1 Purchase Agreement, dated October 5, 1993, between TWA and
Pacific AirCorp 747, Inc. with respect to aircraft N93107
and N93108 (Exhibit 10.7 to 9/93 10-Q)
<F*>10.6.2 Lease Agreement 107, dated October 5, 1993, between Pacific
AirCorp 747, Inc. and TWA with respect to aircraft N93107
(Exhibit 10.7 to 9/93 10-Q)
<F*>10.6.3 Lease Agreement 108, dated October 5, 1993, between Pacific
AirCorp 747, Inc. and TWA with respect to aircraft N93108
(Exhibit 10.7 to 9/93 10-Q)
<F*>10.7 Comprehensive Settlement Agreement, dated January 5, 1993
(Exhibit 10(iv)(1) to 12/31/92 10-K)
<F*>10.8 Omnibus Amendment and Supplement to Agreements between TWA
and Karabu Corp. dated as of March 28, 1994 (Exhibit 10.9.1
to Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.9 Form of Indemnification Agreement between TWA and individual
members of the TWA Board of Directors relating to
indemnification of director (Exhibit 10.16 to 6/94 10-Q)
<F*>10.10.1 Purchase Agreement, dated as of December 15, 1993 between
TWA and Pacific AirCorp DC9, Inc. with respect to aircraft
N927L and N928L (Exhibit 10.20.1 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.10.2 Lease Agreement 927, dated as of December 15, 1993, between
Pacific AirCorp DC9, Inc. and TWA with respect to aircraft
N927L (Exhibit 10.20.2 to Registrant's Registration
Statement on Form S-4, No. 33-84944)
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<PAGE>
<F*>10.10.3 Lease Agreement 928, dated as of December 15, 1993, between
Pacific AirCorp DC9, Inc. and TWA with respect to aircraft
N928L (Exhibit 10.20.3 to Registrant's Registration
Statement on Form S-4, No. 33-84944)
<F*>10.11.1 Aircraft Purchase Agreement between TWA and Mitsui & Co.
(U.S.A.), Inc. dated March 31, 1994, with respect to
aircraft N950U (Exhibit 10.21.1 to Registrant's Registration
Statement on Form S-4, No. 33-84944)
<F*>10.11.2 Aircraft Purchase Agreement between TWA and Mitsui & Co.
(U.S.A.), Inc., dated March 31, 1994, with respect to
aircraft N953U (Exhibit 10.21.2 to Registrant's Registration
Statement on Form S-4, No. 33-84944)
<F*>10.11.3 Lease Agreement, dated as of March 31, 1994 between Mitsui &
Co. (U.S.A.), Inc. and TWA with respect to aircraft N950U
and N953U (Exhibit 10.21.3 to Registrant's Registration
Statement on Form S-4, No. 33-84944)
<F*>10.11.4 Aircraft Purchase Agreement between TWA and McDonnell
Douglas Finance Corporation, dated March31, 1994, with
respect to aircraft N951U (Exhibit 10.21.4 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.11.5 Aircraft Purchase Agreement between TWA and McDonnell
Douglas Finance Corporation, dated March 31, 1994, with
respect to aircraft N952U (Exhibit 10.21.5 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.11.6 Lease Agreement, dated as of March 31, 1994 between
McDonnell Douglas Finance Corporation and TWA with respect
to aircraft N951U and N952U (Exhibit 10.21.6 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.12.1 Aircraft Purchase Agreement, dated March 31, 1994, between
McDonnell Douglas Finance Corporation and TWA with respect
to aircraft N306TW (formerly N534AW) (Exhibit 10.22.1 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.12.2 Purchase Money Chattel Mortgage, dated as of March 31, 1994,
by TWA, as Mortgagor, and McDonnell Douglas Finance
Corporation, as Mortgagee, with respect to N306TW (formerly
N534AW) (Exhibit 10.22.2 to Registrant's Registration
Statement on Form S-4, No. 33-84944)
<F*>10.12.3 Chattel Mortgage, dated as of March 31, 1994 by TWA as
Mortgagor, in favor of McDonnell Douglas Finance
Corporation, as Mortgagee, with respect to aircraft N306TW
(formerly N534AW) (Exhibit 10.22.3 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.13 Commuter Air Service Agreement dated July 22, 1992, between
TWA and Trans World Express, Inc. (Exhibit 10.23 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
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<PAGE>
<F*>10.14 Commuter Air Service Agreement dated October 27, 1993,
between TWA and Alpha Air (Exhibit 10.24 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.15 Air Service Agreement dated October 1, 1994, between TWA and
Trans States Airlines, Inc. (Exhibit 10.25 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.16 Consulting Agreement between TWA and Fieldstone, Private
Capital Group, L.P. dated July 11, 1994 (Exhibit 10.26 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.17 Consulting Agreement dated July 15, 1994, between TWA and
Simat, Helliesen & Eichner, Inc. (Exhibit 10.27 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.18.1 Agreement for Purchase and Sale dated as of August 29, 1994,
between TWA and Browsh & Associates, Inc. (Exhibit 10.28.1
to Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.18.2 Agreement for Purchase and Sale dated as of August 29, 1994,
between TWA and Travel Marketing Holding Corporation
(Exhibit 10.28.2 to Registrant's Registration Statement on
Form S-4, No. 33-84944)
<F*>10.19.1 Addendum to Stock Purchase Agreement (identified in 10.29.2)
dated October 31, 1994 (Exhibit 10.29.3 to 9/94 10-Q)
<F*>10.19.2 Addendum to Stock Purchase Agreement (identified in 10.29.2)
dated November 2, 1994 (Exhibit 10.29.4 to 9/94 10-Q)
<F*>10.20.1 Form of Agreement dated as of August 31, 1994, between TWA
and the Air Line Pilots Association, International (Exhibit
10.31.1 to Registrant's Registration Statement on Form S-4,
No. 33-84944)
<F*>10.20.2 Form of Agreement dated as of September 1, 1994, between TWA
and the International Association of Machinists and
Aerospace Workers (Exhibit 10.31.2 to Registrant's
Registration Statement on Form S-4, No. 33-84944)
<F*>10.20.3 Form of Agreement dated as of September 1, 1994, between TWA
and the Independent Federation of Flight Attendants (Exhibit
10.31.3 to Registrant's Registration Statement on Form S-4,
No. 33-84944)
<F*>10.20.4 Form of Agreement dated as of September 1, 1994, between TWA
and the Transport Workers Union of America (Exhibit 10.31.4
to 9/94 10-Q)
<F*>10.21.1 Trust Agreement dated as of August 24, 1994 between and
among TWA, the International Association of Machinists and
Aerospace Workers, the Independent Federation of Flight
Attendants, the Air Line Pilots Association, International,
United States Trust Company of New York (Exhibit 10.32.1 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
E-7
<PAGE>
<PAGE>
<F*>10.21.2 Stock Pledge and Intercreditor Agreement dated as of August
24, 1994 among TWA, TWA Stock Holding Company, Inc. and
United States Trust Company of New York (Exhibit 10.32.2 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.22.1 Key Employee Stock Incentive Plan (Exhibit 10.33.1 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.22.2 Form of Option Agreements for options issued pursuant to the
1994 Key Employee Stock Incentive Plan (Exhibit 10.33.2 to
Registrant's Registration Statement on Form S-4, No.
33-84944)
<F*>10.23 Extension, Refinancing and Consent Agreement between TWA,
Karabu Corp, Pichin Corp, and Carl C. Icahn and the "Icahn
Entities" dated as of June 14, 1995 (Exhibit 10.37 to 9/95
10-Q)
<F*>10.23.1 Karabu Ticket Program Agreement between TWA and Karabu Corp.
dated as of June 14, 1995 (Exhibit 10.37.1 to 12/95 10-K)
<F*>10.24 Trans World Airlines, Inc. Stock Purchase Warrant to
Purchase Shares of Common Stock, dated August 23, 1995
(Exhibit 10.38 to 9/95 10-Q)
<F*>10.25 Stand-By Purchase Agreement dated as of August 8, 1995
between Trans World Airlines, Inc., M.D. Sass Re/Enterprise
Partners L.P., a Delaware limited partnership and M.D. Sass
Re/Enterprise International Ltd. a British Virgin Islands
Company (Exhibit 10.39 to 9/95 10-Q)
<F*>10.26 Voucher Purchase Agreement dated as of October 18, 1995
between TWA and M.D. Sass Re/Enterprise Partners L.P., a
Delaware limited partnership and M.D. Sass Re/Enterprise
International Ltd. a British Virgin Islands Company (Exhibit
10.40 to 9/95 10-Q)
<F*>10.27 Equity Rights Put Agreement dated as of September 15, 1995
between TWA and Elliott Associates L.P., a Delaware limited
partnership (Exhibit 10.41 to 9/95 10-Q)
<F*>10.28 Equity Rights Put Agreement dated as of September 15, 1995
between TWA and Westgate International L.P., a Cayman
Islands limited partnership (Exhibit 10.42 to 9/95 10-Q)
<F*>10.29 Equity Rights Put Agreement dated as of September 15, 1995
between TWA and United Equities (Commodities) Company, a New
York general partnership (Exhibit 10.43 to 9/95 10-Q)
<F*>10.30 Equity Rights Put Agreement dated as of September 15, 1995
between TWA and Grace Brothers, Ltd., an Illinois limited
partnership (Exhibit 10.44 to 9/95 10-Q)
<F*>10.31 Equity Rights Put Agreement dated as of September 15, 1995
between TWA and First Capital Alliance, L.P., an Illinois
limited partnership (Exhibit 10.45 to 9/95 10-Q)
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<PAGE>
<F*>10.32 Equity Rights Put Agreement dated as of September 15, 1995
between TWA and Romulus Holdings Corp. a Delaware
Corporation (Exhibit 10.46 to 9/95 10-Q)
<F*>10.33 Purchase Agreement, dated February 9, 1996 between The
Boeing Company and TWA relating to Boeing Model 757-231
Aircraft (Purchase Agreement Number 1910) (Exhibit 10.48 to
12/31/95 Form 10-K/A)
<F*>10.34 Employee Stock Incentive Program dated as of August 23, 1995
by TWA (Exhibit 10.49 to 12/31/95 Form 10-K)
<F*>10.35 Trans World Airlines, Inc. 1995 Outside Directors' Stock
Ownership and Stock Option Plan (Exhibit 10.51 to
Registrant's Registration Statement on Form S-3, No.
333-04977)
<F*>10.36 Agreement dated as of October 1, 1996 between the Company
and Michael J. Palumbo (Exhibit 10.34 to 12/31/96 Form 10-K)
<F*>10.37 Consulting Agreement between the Company and David M.
Kennedy dated as of June 6, 1997 (Exhibit 10.1 to 6/97 Form
10-Q)
<F*>10.38 Agreement between the Company and Gerald L. Gitner dated as
of February 12, 1997 (Exhibit 10.1 to 9/97 Form 10-Q)
<F*>10.39.1 Pledge and Security Agreement dated as of December 9, 1997
from the Company to First Security Bank, National
Association, as Collateral Agent, in connection with the
11-1/2% Senior Secured Notes due 2004 (Exhibit 10.46.1 to
Registrant's Registration Statement on Form S-4, No.
333-44661)
<F*>10.39.2 Acquired Slot Trust Agreement Declaration of Trust dated as
of December 9, 1997 between the Company and First Security
Bank, National Association, as Slot Trustee, in connection
with the 11-1/2% Senior Secured Notes due 2004 (Exhibit
10.46.2 to Registrant's Registration Statement on Form S-4,
No. 333-44661)
<F*>10.39.3 Master Sub-License Agreement dated as of December 9, 1997
between the Company and First Security Bank, National
Association, in connection with the 11-1/2% Senior Secured
Notes due 2004 (Exhibit 10.46.3 to Registrant's
Registration Statement on Form S-4, No. 333-44661)
<F*>10.39.4 Collateral Pledge and Security Agreement dated as of
December 9, 1997 between the Company and First Security
Bank, National Association, as Trustee, in connection with
the 11-1/2% Senior Secured Notes due 2004 (Exhibit 10.46.4
to Registrant's Registration Statement on Form S-4, No.
333-44661)
<F*>10.40.1 Exchange Agreement dated as of June 10, 1996 between TWA and
Elliott Associates, L.P. as amended (Exhibit 10.1 to
9/20/96 Form 8-K)
<F*>10.40.2 Exchange Agreement dated as of June 10, 1996 between TWA and
Westgate International, L.P., as amended (Exhibit 10.2 to
9/20/96 Form 8-K)
E-9
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<PAGE>
<F*>10.41.1 Form of Letter Agreement between TWA and executive officers
(continuing employment) (Exhibit 10.1 to 3/97 Form 10-Q)
<F*>10.41.2 Form of Letter Agreement between TWA and executive officers
(new hire) (Exhibit 10.2 to 3/97 Form 10-Q)
<F*>10.42 Change in Control Agreement for executive officers (Exhibit
10.49 to 12/31/98 10-K)
<F*>10.43 Termination Agreement between TWA and Roden A. Brandt dated
February 12, 1998 (Exhibit 10.1 to 3/98 Form 10-Q)
10.44 Agreement between TWA and the Air Line Pilots Association,
International effective September 1, 1998
10.45 Agreement between TWA and Flight Dispatch Officers and
Assistant Flight Dispatch Officers effective March 1, 1999
10.46 Agreement between TWA and the International Brotherhood of
Teamsters effective October 26, 1998
10.47 Purchase Agreement between McDonnell Douglas Corporation and
TWA for 24 MD-83 aircraft dated April 13, 1998
11 Statement of Computation of Per Share Earnings
12 Statement of Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
21 Subsidiaries of the Registrant
23.1 Consent of KPMG LLP
24 Powers of Attorney
27 Financial Data Schedule
[FN]
- - --------
<F*> Incorporated by reference
E-10
<PAGE>
Exhibit 3(ii)
AMENDED AND RESTATED BY-LAWS
OF
TRANS WORLD AIRLINES, INC.
ARTICLE I - OFFICES
Section 1.1. Registered Office in Delaware: Registered Agent
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle, and the name of its registered agent at such address is The
Corporation Trust Company. Said registered office and said registered
agent may be changed as provided by the General Corporation Law (as now
or hereafter in effect) of the State of Delaware ("GCL").
Section 1.2. Other Offices
The Corporation may have other offices in or outside the State of
Delaware.
ARTICLE II - STOCKHOLDERS
Section 2.1. Place of Meetings
Meetings of stockholders shall be held in such place in the United
States as the Board of Directors may determine, at the address in said
city or in such other place determined by the Directors. The Board of
Directors may postpone and reschedule any previously scheduled annual or
special meeting of the stockholders.
Section 2.2. Annual Meetings
An annual meeting of stockholders shall be held for the election
of Directors and the transaction of such other business as may properly
come before such meeting on the third Tuesday in April in each year (or,
if that day shall be a legal holiday in the place in which the meeting
is to be held, then on the next following day not such a legal holiday)
at twelve o'clock noon at the place where the meeting is to be held, or
at such other date and time as the Board of Directors may determine.
<PAGE>
<PAGE>
Section 2.3 Special Meetings
(a) Generally
Special meetings of the stockholders may be called only by (i) the
Chairman of the Board, (ii) 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 the
Corporation's existing twelve percent (12%) Preferred Stock (the
"Preferred Stock") issued and distributed pursuant to the amended plan
of reorganization confirmed by the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") in the bankruptcy case
captioned In re Trans World Airlines, Inc. (Case No. 92-115) ("Plan of
--------------------------------
Reorganization") until such persons have been elected in accordance with
these By-Laws (the "Whole Board"), and (iii) as provided in Section
2.3(b) hereof. Any such request by a majority of the Whole Board must be
sent to the Chairman of the Board and the Secretary and must state the
purpose or purposes of the proposed meeting. Special meetings of holders
of the outstanding Preferred Stock, if any, may be called in the manner
and for the purposes provided in the Certificate of Designation,
Preferences and Rights of the Preferred Stock (the "Preferred Stock
Designation").
(b) Request of Stockholders
Upon the receipt by the Corporation of a written request executed
by the holders of not less than thirty-five percent (35%) of the
outstanding Voting Stock (as hereinafter defined) (a "Meeting Request"),
the Board of Directors will (i) call a special meeting of the
stockholders for the purposes specified in the Meeting Request and (ii)
fix a record date for the determination of stockholders entitled to
notice of and to vote at such meeting, which record date will not be
later than sixty (60) calendar days after the date of receipt by the
Corporation of the Meeting Request; provided, however, that no separate
special meeting of stockholders requested pursuant to a Meeting Request
will be required to be convened if (A) the Board of Directors calls an
annual or special meeting of stockholders to be held not later than
ninety (90) calendar days after receipt of such Meeting Request and (B)
the purposes of such annual or special meeting include (among any other
matters properly brought before the meeting) the purposes specified in
such Meeting Request. Notwithstanding any provision of the Company's
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") or these By-Laws to the contrary, this Section 2.3(b)
may not be amended or repealed by the Board of Directors, and no
provision inconsistent therewith may be adopted by the Board of
Directors, without the affirmative vote of the holders of at least a
majority of the Voting Stock, voting together as a single class, present
or represented by proxy and entitled to vote at any annual or special
meeting of stockholders at which such vote is to be taken. The term
"Voting Stock" means stock of the Corporation of any class or 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 of preferred stock shall specifically state that such class or
series shall be deemed "Voting Stock" for purposes of the Certificate of
Incorporation.
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<PAGE>
(c) Date and Time of Special Meeting
Special meetings shall be held at such date and time as shall be
determined by the Board of Directors.
(d) Application of By-Laws
Provisions of the By-Laws relating to meetings of stockholders
(other than provisions thereof relating to meetings of all stockholders)
shall apply to special meetings of the holders of the Corporation's
preferred stock and special meetings of the holders of Common Stock.
Section 2.4. Fixing Date for Determination of Stockholders of Record
The Board of Directors may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for
the purpose of any other lawful action, by fixing, in advance, a record
date, which shall not be more than sixty (60) nor less than ten (10)
days before the date of such meeting, nor more than sixty (60) days
prior to any such action. If in any case the Board of Directors does
not fix such a record date, the record date for such meeting or action
shall be the date determined pursuant to the GCL.
Section 2.5. Notice of Meeting
Whenever stockholders are required or permitted to take any action
at a meeting, a written notice of the meeting shall be given which shall
state the place, date and hour, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called and, if the list
of stockholders required by Section 2.6 hereof is not to be at such
place at least ten (10) days prior to the meeting, the place where said
list will be. Except as otherwise provided by the GCL, the written
notice of any meeting shall be given not less than ten (10) nor more
than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting. If mailed, notice shall be deemed to
be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his or her address as it appears on the
records of the Corporation. An affidavit of the Secretary or an
Assistant Secretary or of the Transfer Agents of the Corporation that
the notice has been given shall be made and filed with the records of
the meeting.
Section 2.6. List of Stockholders Entitled to Vote
The Secretary shall make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number and class of shares
registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten
(10) days prior to the meeting, either at a place within the city where
the meeting is to be held, which place shall be specified in the notice
of the meeting, or if not so specified, at the place where the meeting
is to be
3
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<PAGE>
held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 2.7. Chairman and Secretary at Meetings
At each meeting of stockholders the Chairman of the Board, or in
his or her absence the person designated in writing by the Chairman of
the Board, or, if no person is so designated, then a person designated
by a majority of the Whole Board, shall preside as chairman of the
meeting. The Secretary, or in his or her absence a person designated by
the chairman of the meeting, shall act as secretary of the meeting.
Section 2.8. Quorum
At any meeting of stockholders the holders of record of the
Corporation who are entitled to cast a majority of the votes that can be
cast by stockholders at such meeting (and, with respect to any matter as
to which any stockholders are entitled to vote separately as a class,
the holders of record of a majority of the shares of each such class)
present in person or represented by proxy and entitled to vote at such
meeting, shall constitute a quorum for the transaction of business at
such meeting, except that when the GCL or the Certificate of
Incorporation requires a larger number for the taking of action on any
matter such larger number shall constitute a quorum. In the absence of a
quorum (or a quorum of any such class) at a meeting, the chairman of the
meeting or the stockholders present in person or represented by proxy
and entitled to vote at such meeting, though less than a quorum, may
adjourn the meeting from time to time until a quorum (or a quorum of
such class) is present; provided, however, that the chairman of the
meeting may, in his or her discretion, rule that a motion for such an
adjournment is out of order until all business for which a quorum is
present has been transacted. At any such adjourned meeting at which a
quorum (or a quorum of a class) is present, any business may be
transacted that might have been transacted at the original meeting if a
quorum (or a quorum of such class) had then been present
Section 2.9 Voting
Except as otherwise provided by the GCL, by the Certificate of
Incorporation or by the certificate of designations, preferences and
rights for any class or series of the Corporation's preferred stock,
each stockholder will be entitled at every meeting of the stockholders
to one vote for each share of stock having voting power standing in the
name of such stockholder on the books of the Corporation on the record
date for the meeting and such votes may be cast either in person or by
written proxy. Every proxy must be duly executed and filed with the
Secretary. A stockholder may revoke any proxy that is not irrevocable by
attending the meeting and voting in person or by filing an instrument in
writing revoking the proxy or another duly executed proxy bearing a
later date with the Secretary. The vote upon any question brought
before a meeting of the stockholders may be by voice vote, unless
otherwise required by the Certificate of Incorporation or these By-Laws
or unless the chairman of the meeting or the holders of a majority of
the outstanding shares of all classes of stock entitled to vote thereon
present in person or by proxy at such meeting otherwise determine. Every
vote taken by written ballot will be counted by the inspectors of
election. When a quorum is present at any meeting, the affirmative vote
of the holders of a majority of the stock
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present in person or represented by proxy at the meeting and entitled to
vote on the subject matter which has actually been voted will be the act
of the stockholders, except as otherwise provided in these By-Laws, the
Certificate of Incorporation or the certificate of designations,
preferences and rights for any class or series of the Corporation's
preferred stock.
Section 2.10. Order of Business
(a) Presiding Officer
The chairman of the meeting will call meetings of the stockholders
to order and will act as presiding officer thereof. Unless otherwise
determined by the Board of Directors prior to the meeting, the chairman
of the meeting of the stockholders will also determine the order of
business and have the authority in his or her sole discretion to
regulate the conduct of any such meeting, including without limitation
by imposing restrictions on the persons (other than stockholders of the
Corporation or their duly appointed proxies) who may attend any such
stockholders' meeting, by ascertaining whether any stockholder or his or
her proxy may be excluded from any meeting of the stockholders based
upon any determination by the chairman of the meeting, in his or her
sole discretion, that any such person has unduly disrupted or is likely
to disrupt the proceedings thereat, and by determining the circumstances
in which any person may make a statement or ask questions at any meeting
of the stockholders.
(b) Business Conducted
At an annual meeting of the stockholders, only such business will
be conducted or considered as is properly brought before the meeting. To
be properly brought before an annual meeting, business must be (i)
specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors in accordance with Section
2.5 hereof, (ii) otherwise properly brought before the meeting by the
chairman of the meeting or by or at the direction of a majority of the
Whole Board, or (iii) otherwise properly requested to be brought before
the meeting by a stockholder of the Corporation in accordance with
Section 2.10(c) hereof.
(c) Stockholder's Notice
For business to be properly requested by a stockholder to be
brought before an annual meeting, the stockholder must (i) be a
stockholder of the Corporation of record at the time of the giving of
the notice for such annual meeting provided for in these By-Laws, (ii)
be entitled to vote at such meeting, and (iii) have given timely notice
thereof in writing to the Secretary. To be timely a stockholder's notice
must be delivered to or mailed and received at the principal executive
offices of the Corporation not less than forty-five (45) calendar days
before the date on which the Corporation first mailed its proxy
materials for the prior year's annual meeting of stockholders. If the
date of the annual meeting changes by more than thirty (30) days from
the prior year, then the notice must have been received a reasonable
time before the Corporation mails its proxy materials, but in any event,
not less than twenty-five (25) calendar days prior to such mailing. A
stockholder's notice to the Secretary must be set forth as to each
matter the stockholder proposes to bring before the annual meeting (A) a
description in reasonable detail of
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the business desired to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting, (B) the name
and address, as they appear on the Corporation's books, of the
stockholder proposing such business and the beneficial owner, if any, on
whose behalf the proposal is made, (C) the class and number of shares of
the Corporation that are owned beneficially and of record by the
stockholder proposing such business and by the beneficial owner, if any,
on whose behalf the proposal is made, and (D) any material interest of
such stockholder proposing such business and the beneficial owner, if
any, on whose behalf the proposal is made in such business.
Notwithstanding the foregoing provisions of this Section 2.10(c), a
stockholder must also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder with respect to the matters set forth in this
Section 2.10(c). Nothing in this Section 2.10(c) will be deemed to
affect any rights of stockholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended.
(d) Special Meeting of Stockholders
At a special meeting of stockholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified
in the notice of the meeting (or any supplement thereto) given by or at the
direction of the chairman of the meeting or a majority of the Whole Board
in accordance with Section 2.5 hereof or (ii) otherwise properly brought
before the meeting by the chairman of the meeting or by or at the direction
of a majority of the Whole Board.
(e) Determination of Business Properly Brought
The determination of whether any business sought to be brought
before any annual or special meeting of the stockholders is properly
brought before such meeting in accordance with this Section 2.10 will be
made by the chairman of such meeting. If the chairman of the meeting
determines that any business is not properly brought before such meeting,
he or she will so declare to the meeting and any such business will not be
conducted or considered.
Section 2.11. Adjourned Meetings
A meeting of stockholders may be adjourned to another time or place
as provided herein. Whenever a meeting is adjourned, the determination of
stockholders of record shall apply to any adjournment to the meeting unless
the Board of Directors fixes a new record for the adjourned meeting, in
which event the new record date shall determine the stockholders of record
for the adjourned meeting. Notice of the adjourned meeting need not be
given if the time and place thereof are announced at the meeting at which
the adjournment is taken; provided, however, that if the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each stockholder of record entitled to vote at the adjourned
meeting. At any such adjourned meeting at which a quorum (or a quorum of a
class) is present, any business may be transacted that might have been
transacted at the original meeting if a quorum (or a quorum of such class)
had then been presented.
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Section 2.12 Inspectors of Election
The chairman of the meeting shall appoint as many inspectors of
election as may be required to conduct the vote cast by ballot on any
matter coming before the meeting.
ARTICLE III - DIRECTORS
Section 3.1 Board of Directors
(a) Powers
The business of the Corporation shall be managed by a Board of
Directors, except as may be otherwise provided by the GCL.
(b) Number
The number of Directors that shall constitute the Whole Board of
Directors shall be fifteen (15). Such number shall be automatically
increased by two whenever the holders of Preferred Stock become entitled,
pursuant to the Preferred Stock Designation, to elect two (2) Directors and
such persons have been elected in accordance with the By-Laws and the
number of Directors shall be automatically reduced by two (2) whenever the
right of the holders of Preferred Stock to elect such two (2) Directors
shall cease. Except upon the affirmative vote of the holders of at least a
majority of the Preferred Stock, voting as a single class, no resolution or
amendment may change the number of Directors to be elected by the holders
of Preferred Stock as above stated.
(c) Classes
The Board of Directors shall be divided into Class I, Class II and
Class III, with five (5) Directors in each class, as provided in the
Certificate of Incorporation.
(d) Qualification
Directors need not be stockholders.
(e) Term of Office
Subject to the provisions of Article Ninth of the Certificate of
Incorporation, each Director shall hold office from the day he or she is
elected or chosen until the next annual meeting of all stockholders and
until his or her successor is elected and qualified or until his or her
earlier resignation, death or removal or, in the case of Directors elected
only by the holders of Preferred Stock, until their term of office ends
pursuant to the provisions of the Preferred Stock Designation.
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Section 3.2 Vacancies
Subject to the rights, if any, of any class or series of the
Corporation's preferred stock specified in the certificate of designations,
preferences and rights relating to such class or series to elect additional
Directors, including without limitation, under the circumstances specified
in the Preferred Stock Designation and Section 3.5 hereof, newly created
directorships resulting from any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal, or other
cause will be filled solely by the affirmative vote of sixty percent (60%)
of the remaining Directors then in office, even though less than a quorum
of the Board of Directors, or by a sole remaining Director provided,
however, any such vacancies arising during the first or second term of a
Class I, Class II or Class III Director will be filled by a nominee of the
remaining Directors who were nominated by the same Original Nominating
Entity as the vacating Director in accordance with the procedures set out
in Article Ninth, Section 2 of the Certificate of Incorporation. 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
new directorship was created or the vacancy occurred and until such
Director's successor is elected and qualified. No decrease in the number
of Directors constituting the Board of Directors will shorten the term of
an incumbent Director.
Section 3.3 Resignation
Any Director may resign at any time by giving written notice of such
resignation to the Board of Directors, the Chairman, the President or the
Secretary. Any such resignation shall take effect at the time specified
therein or, if no time be specified, upon receipt thereof by the Board of
Directors or one of the above named Officers and, unless specified therein,
the acceptance of such resignation shall not be necessary to make it
effective. When one or more Directors shall resign from the Board of
Directors, a majority of the Directors then in office, including those who
have tendered resignations with respect to which effectiveness has not
occurred, shall have the power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective and each Director so chosen shall hold office for the term
specified in Section 3.1(e) hereof. Notwithstanding the foregoing prior to
the third annual election of directors, such vacancies shall be filled in
accordance with the terms of Section 3.5(a) hereof.
Section 3.4 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 3.5(a) hereof, any Director may be removed
from office by the stockholders only for cause and only in the manner
provided in the Certificate of Incorporation.
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Section 3.5 Nominations of Directors; Election
(a) Procedures for the First Three Annual Elections
Through the annual election of Directors at the annual meeting of
stockholders to be held in 1996, nominations for Directors whether to fill
a vacancy created by resignation, removal or otherwise, shall be made in
accordance with Article Ninth of the Certificate of Incorporation.
(b) Procedures After the 1996 Annual Election of Directors
(i) Eligibility for Election
Subject to the rights, if any, of any class or series of the
Corporation's preferred stock specified in the certificate
of designations, preferences and rights relating to such
class or series to elect additional Directors, including
without limitation, under the circumstances specified in
the Preferred Stock Designation and Section 3.5(a) hereof,
only persons who are nominated in accordance with the
following procedures will be eligible for election at a
meeting of stockholders as Directors of the Corporation.
(ii) Nominations
Nominations of persons for election as Directors of the Corporation
may be made only at an annual meeting of stockholders (i)
by or at the direction of the Board of Directors, or (ii)
by any stockholder who is a stockholder of record at the
time of giving of notice provided for in this Section 3.5,
who is entitled to vote for the election of Directors at
such meeting, and who complies with the procedures set
forth in this Section 3.5(b). All nominations by
stockholders must be made pursuant to timely notice in
proper written form to the Secretary.
(iii) Stockholder Nominations
To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive
offices of the Corporation not less than forty-five (45) calendar
days before the date on which the Corporation first mailed its proxy
materials for the prior year's annual meeting of stockholders. If
the date of the annual meeting changes by more than thirty (30) days
from the prior year, then the notice must have been received a
reasonable time before the Corporation mails its proxy materials,
but in any event, not less than twenty-five (25) calendar days prior
to such mailing. To be in proper written form, such stockholder's
notice must set forth or include (i) the name and address, as they
appear on the Corporation's books, of the stockholder giving the
notice and of the beneficial owner, if any, on whose behalf the
nomination is made; (ii) a representation that the stockholder
giving the notice is a holder of record of stock of the Corporation
entitled to vote at such annual meeting and intends to appear in
person or by proxy at the annual meeting to nominate the person or
persons specified in the notice; (iii) the class and number of
shares
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of stock of the Corporation owned beneficially and of record by the
stockholder giving the notice and by the beneficial owner, if any,
on whose behalf the nomination is made; (iv) a description of all
arrangements or understandings between or among any of (A) the
stockholder giving the notice, (B) the beneficial owner on whose
behalf the notice is given, (C) each nominee, and (D) any other
person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the stockholder
giving the notice; (v) such other information regarding each nominee
proposed by the stockholder giving the notice 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 of Directors;
and (vi) the signed consent of each nominee to serve as a director
of the Corporation if so elected. At the request of the Board of
Directors, any person nominated by the Board of Directors for
election as a Director must furnish to the Secretary that
information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee. The chairman of the
meeting or stockholders will, if the facts warrant, determine that a
nomination was not made in accordance with the procedures prescribed
by this Section 3.5, and if he or she should so determine, he or she
will so declare to the meeting and the defective nomination will be
disregarded. Notwithstanding the foregoing provisions of this
Section 3.5, a stockholder must also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder with respect to the matters set
forth in this Section 3.5.
Section 3.6 Regular Meetings
Regular meetings of the Board of Directors may be held immediately
after the annual meeting of the stockholders and at such other time and
place either within or without the State of Delaware as may from time to
time be determined by the Board of Directors. Notice of regular meetings of
the Board of Directors need not be given.
Section 3.7. Special Meetings
Special meetings of the Board of Directors may be called by the
Chairman or the President on one (1) day's notice to each Director by whom
such notice is not waived, given either personally or by mail, telephone,
telegram, telex, facsimile, or similar medium of communication, and will be
called by the Chairman or the President in like manner and on like notice
on the written request of five (5) or more Directors. Special meetings of
the Board of Directors may be held at such time and place either within or
without the State of Delaware as is determined by the Board of Directors or
specified in the notice of any such meeting.
Section 3.8. Quorum
At all meetings of the Board of Directors, a majority of the total
number of Directors then in office will constitute a quorum for the
transaction of business. Except for the designation of committees as
hereinafter provided and except for actions required by these By-Laws or
the Certificate of Incorporation to be taken by a majority of the Whole
Board or by eighty percent
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(80%) of the Directors then in office, the act of a majority of the
Directors present at any meeting at which there is a quorum will be the act
of the Board of Directors. If a quorum is not present at any meeting of
the Board of Directors, the Directors present thereat may adjourn the
meeting from time to time to another place, time, or date, without notice
other than announcement at the meeting, until a quorum is present.
Section 3.9. Participation in Meetings by Telephone Conference
Members of the Board of Directors or any committee designated by the
Board of Directors may participate in a meeting of the Board of Directors
or any such committee, as the case may be, by means of telephone conference
or similar means by which all persons participating in the meeting can hear
each other, and such participation in a meeting will constitute presence in
person at the meeting.
Section 3.10. Committees
(a) Generally
The Board of Directors, by resolution passed by a majority of the
Whole Board, will designate executive, audit and compensation committees of
not less than five (5) members of the Board of Directors.
(b) The Executive Committee
The Board of Directors may appoint an Executive Committee from time
to time. The Executive Committee will have the authority to exercise the
power of the Board of Directors in the management and business affairs of
the company except in so far as it may otherwise be limited in the last
sentence of this Subsection 3.10(b).
The Executive Committee will be composed as the Board of Directors
may, from time to time, determine. The Executive Committee will have 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 these By-
Laws or the Certificate of Incorporation (except, to the extent authorized
by a resolution of the Whole Board, to fix the designation, preferences,
and other terms of any class or 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 Corporation's property and
assets, a dissolution of the Corporation, or a revocation of a dissolution,
and except as otherwise provided by the GCL.
(c) The Audit Committee
The Audit Committee will review the professional services to be
provided by the Corporation's independent auditors and the independence of
such auditors from the management of the Corporation. The Audit Committee
will also review the scope of the audits by the Corporation's independent
auditors, the annual financial statements of the Corporation, the
Corporation's system
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of internal accounting controls and such other matters with respect to the
accounting, auditing and financial reporting practice and procedures of the
Corporation as it may find appropriate or as may be brought to its
attention. The Audit Committee will also meet from time to time with
members of the Corporation's internal audit staff.
(d) The Compensation Committee
The Compensation Committee will review executive salaries,
administer the bonus, incentive, compensation and stock option plans of the
Corporation and approve the salaries and other benefits of the executive
officers of the Corporation.
(e) Other Committees
The Board of Directors, by resolution passed by a majority of the
Whole Board, may designate one or more additional committees, each such
committee to consist of one or more Directors and each to have such
lawfully delegable powers and duties as the Board of Directors may confer.
(f) Terms; Appointment
The Executive, Audit and Compensation Committees and each other
committee of the Board of Directors will serve at the pleasure of the Board
of Directors or as may be specified in any resolution from time to time
adopted by the Board of Directors. The Board of Directors may designate one
or more Directors as alternate members of any such committee, who may
replace any absent or disqualified member at any meeting of such committee.
In lieu of such action by the Board of Directors, in the absence or
disqualification of any member of a committee of the Board of Directors,
the members thereof present at any such meeting of such committee and not
disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member.
(g) Powers
Except as otherwise provided in these By-Laws or the GCL, any
committee of the Board of Directors, to the extent provided in the
resolution of the Board of Directors establishing such committee (subject
to the limitations in Section 3.10(b) hereof), will have and may exercise
such other powers and authority of the Board of Directors in the direction
of the management of the business and affairs of the Corporation as the
Board of Directors may from time to time prescribe by resolution. Any such
committee designated by the Board of Directors will have such name as may
be determined from time to time by resolution adopted by the Board of
Directors. Unless otherwise prescribed by the Board of Directors, a
majority of the members of any committee of the Board of Directors will
constitute a quorum for the transaction of business, and the act of a
majority of the members present at a meeting at which there is a quorum
will be the act of such committee. Each committee of the Board of
Directors may prescribe its own rules for calling and holding meetings and
its method of procedure, subject to any rules prescribed by the Board of
Directors, and will keep a written record of all actions taken by it.
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(h) Composition of Committees
A majority of the members of the Executive, Audit and Compensation
Committees, and all of the members of any other committee the primary
responsibilities of which include (i) reviewing the professional services
to be provided by the Corporation's independent auditors and the
independence of such firm from the Corporation's management, reviewing
financial statements with management or independent auditors, and/or
reviewing internal accounting controls, (ii) reviewing and approving
salaries and other compensation, whether cash or non-cash, and benefits of
the Corporation's executive officers, or (iii) subject to the nominations
procedures set forth in the Certificate of Incorporation and these By-Laws,
recommending candidates to the Board of Directors for nomination for
election to the Board of Directors, will be non-employee Directors.
(i) ALPA, IAM and IFFA Representation
A Director elected by the holders of ALPA Preferred Stock, a
Director elected by the holders of IAM Preferred Stock and a Director
elected by the holders of IFFA Preferred Stock (collectively the "Labor
Directors") shall be entitled to sit as voting members of any committee
authorized hereby, including committees existing on the effective date
hereof, which shall consider, review, or authorize the merger,
consolidation, restructuring or business combination of the Corporation
with, or into, any other entity or the sale, transfer or abandonment of
significant assets of the Corporation. The Labor Directors shall serve one
year terms on a rotating basis on the Compensation, Finance and Executive
Committees.
Section 3.11. 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 by Directors to the Corporation or any of its
majority-owned subsidiaries.
Section 3.12 Rules
The Board of Directors may adopt rules and regulations for the
conduct of meetings and the oversight of the management of the affairs of
the Corporation.
ARTICLE IV - OFFICERS
Section 4.1 Officers; Titles, Selection, Term, and Qualification
The Officers of the Corporation shall be a Chief Executive Officer,
who may be designated as Chairman of the Board and/or President, one or
more Vice Chairmen, one or more Vice Presidents (one or more who may be
designated as Senior Vice President(s) or such other
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descriptive title as the Board shall determine), a Treasurer, a Controller,
a Secretary, and such other Officers and Assistant Officers as the Board of
Directors may, from time to time, elect, each of whom shall be elected by
and subject to the control of the Board of Directors. Each Officer shall
hold office from the time he or she is elected or appointed and qualified,
unless he or she shall resign, die, or be removed at an earlier date. Any
number of offices may be held by the same person. Except as may be required
by the GCL, any office may be left vacant from time to time.
Section 4.2 Appointment of Staff and Assistant Officers
The Chief Executive Officer of the Corporation may, except as
provided in Section 4.1 hereof, create and fill any positions, including
the positions of Staff, Regional, and Assistant Vice Presidents, Assistant
Treasurers, and Assistant Controllers, that he or she may deem advisable,
and may delegate that authority in whole or in part to any Officer or
Officers, as permitted by the Certificate of Incorporation and the By-Laws.
Section 4.3. Removal
The Board of Directors may remove any Officer, with or without
cause, at any time, but only by the affirmative vote of a majority of the
Whole Board. All employees shall hold their positions at the discretion of,
and may be removed at any time by, the Committee, Officer, or other person
having the authority to employ them, as well as the Board of Directors.
Section 4.4. Resignation
Any Officer may resign at any time by giving written notice of such
resignation to the Board of Directors, the Chief Executive Officer, or the
Officer to whom he or she reports. Any such resignation shall take effect
at the time specified therein or, if no time be specified, upon receipt
thereof by the Board of Directors or one of the above named Officers and,
unless specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 4.5. Vacancies
Any vacancy in the Office of any Officer, however caused, may be
filled by the Board of Directors or the Executive Committee.
Section 4.6 Chairman of the Board
The Chairman of the Board shall preside at all meetings of the Board
of Directors at which he or she is present and shall have such other powers
and duties as the By-Laws or the Board of Directors may from time to time
prescribe.
Section 4.7 Vice Chairman
Each Vice Chairman shall oversee such of the daily operations of the
Corporation and its subsidiaries and operating divisions as may be assigned
by the Chief Executive Officer, and shall
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have such powers and duties as the By-Laws or the Board of Directors or the
Chief Executive Officer, pursuant to the authority of the Board of
Directors, may from time to time prescribe.
Section 4.8 President
The President shall have such powers and duties as the By-Laws or
the Board of Directors or the Chief Executive Officer, pursuant to the
authority of the Board of Directors, may from time to time prescribe.
Section 4.9 Chief Executive Officer
The Chief Executive Officer shall have general charge of the
business and affairs of the Corporation and shall exercise and perform the
duties incident to the office of Chief Executive Officer of the
Corporation, subject to the direction of the Board of Directors. He or she
shall have such other powers and duties as the By-Laws or the Board of
Directors may from time to time prescribe. During the absence of the Chief
Executive Officer or his or her inability to act, the Officer designated by
the Board of Directors shall exercise the powers of the Chief Executive
Officer, subject to the direction of the Board of Directors.
Section 4.10 Officer Vice Presidents
Each Vice President who is an Officer shall have such powers and
duties as the Board of Directors or the Chief Executive Officer, pursuant
to the authority of the Board of Directors, may from time to time
prescribe.
Section 4.11 Treasurer
The Treasurer shall have the care of all funds and securities of the
Corporation and shall have such other powers and duties as the Board of
Directors or the Chief Executive Officer, pursuant to the authority of the
Board of Directors, may from time to time prescribe.
Section 4.12 Controller
The Controller shall have the supervision of the books of account of
the Corporation and shall have such other powers and duties as the Board of
Directors or the Chief Executive Officer, pursuant to the authority of the
Board of Directors, may from time to time prescribe.
Section 4.13 Secretary
The Secretary shall record all the proceedings of the meetings of
the stockholders, the Board of Directors, and the Executive Committee, and,
unless otherwise directed, of the other committees of the Board of
Directors, in books to be kept for that purpose. He or she shall have such
other powers and duties as the Board of Directors or the Chief Executive
Officer, pursuant to the authority of the Board of Directors, may from time
to time prescribe.
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Section 4.14 Assistant Officers
Assistant Officers shall have such powers and duties as the By-Laws,
the Board of Directors or the Chief Executive Officer, pursuant to the
authority of the Board of Directors, may from time to time prescribe.
Section 4.15. Bond
The Corporation may, but need not, secure the fidelity of any or all
of its Officers, agents, or employees by bond or otherwise.
ARTICLE V - CAPITAL STOCK
Section 5.1 Stock Certificates
The interest of each holder of stock of the Corporation shall be
evidenced by a certificate or certificates in such form as the Board of
Directors may from time to time prescribe. Each certificate shall state the
number and class of shares that it represents. Each certificate shall be
signed by, or in the name of the Corporation by, the Chairman of the Board,
the President or a Vice President and by the Treasurer or the Secretary,
except that where any such certificate is countersigned (1) by a transfer
agent other than the Corporation or its employee, or (2) by a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any Officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon
a certificate, shall have ceased to be such Officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such Officer,
transfer agent or registrar at the date of issue.
Section 5.2 Transfer of Stock
Shares of stock shall be transferable on the books of the
Corporation pursuant to the GCL and such rules and regulations as the Board
of Directors shall from time to time prescribe.
Section 5.3 Transfer Agent; Registrar
The Board of Directors may appoint one or more transfer agents and
one or more registrars for each class of stock it issues and may require
each stock certificate to bear the signature of a transfer agent or a
registrar or both.
Section 5.4. Holders of Record
The Corporation may treat the holder of record of a share of its
stock as the complete owner thereof entitled to receive dividends thereon
and to vote such share and otherwise entitled to all the rights and powers
of a complete owner thereof, notwithstanding notice to the contrary.
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Section 5.5. Fractional Shares
The Corporation may, but shall not be required to, issue
certificates for fractions of a share where necessary to effect authorized
transactions, or the Corporation may pay in cash the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined, or it may issue scrip in registered or bearer
form over the manual or facsimile signature of an officer of the
Corporation or of its agent, exchangeable as therein provided for full
shares, but such scrip shall not entitle the holder to any rights of a
stockholder except as therein provided.
The Board of Directors shall have power and authority to make all
such rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of the
Corporation.
Section 5.6. Lost, Stolen or Destroyed Certificates
The Corporation may issue a new certificate of stock in place of any
certificate, theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the Board of Directors may require the owner of any lost,
stolen or destroyed certificate, or his or her legal representative, to
give the Corporation a bond sufficient to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss, theft
or destruction of any such certificate or the issuance of any such new
certificate.
ARTICLE VI - INDEMNIFICATION PROCEDURES
Section 6.1. Indemnification Procedures
In furtherance of the indemnification permitted by Article Eleventh
of the Certificate of Incorporation, but not in limitation thereof, the
following procedures, presumptions, and remedies will apply with respect to
advancement of expenses and the right to indemnification under the
Certificate of Incorporation. When used herein the term "indemnitee" shall
mean any person who is one of the persons set forth in Article Eleventh of
the Certificate of Incorporation as being entitled to indemnification.
(a) Advances
All reasonable expenses incurred by or on behalf of an indemnitee in
connection with any proceeding will be advanced to the indemnitee by the
Corporation within thirty (30) calendar days after the receipt by the
Corporation of a statement or statements from the indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such proceeding. Such statement or statements will describe
in reasonable detail the expenses incurred by the indemnitee and, if and to
the extent required by the GCL at the time of such advance, will include or
be accompanied by an undertaking by or on behalf of the indemnitee to repay
such amounts advanced as to which it may ultimately be determined that the
indemnitee is not entitled.
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If such an undertaking is required by the GCL at the time of an advance, no
security will be required for such undertaking and such undertaking will be
accepted without reference to the recipient's financial ability to make
repayment
(b) Procedures
To obtain indemnification the indemnitee will submit to the
Secretary of the Corporation a written request, including such
documentation supporting the claim as is reasonably available to the
indemnitee and is reasonably necessary to determine whether and to what
extent the indemnitee is entitled to indemnification (the "Supporting
Documentation"). The determination of the indemnitee's entitlement to
indemnification will be made not less than sixty (60) calendar days after
receipt by the Corporation of the written request for indemnification
together with the Supporting Documentation. The Secretary will promptly
upon receipt of such a request for indemnification advise the Board of
Directors in writing that the indemnitee has requested indemnification. The
indemnitee's entitlement to indemnification hereunder will be determined in
one of the following ways: (i) by a majority vote of the Disinterested
Directors (as hereinafter defined), if they constitute a quorum of the
Board of Directors, or, in the case of an indemnitee that is not a present
or former officer of the Corporation, by any committee of the Board of
Directors or committee of officers or agents of the Corporation designated
for such purpose by a majority of the Whole Board; (ii) by a written
opinion of Independent Counsel (as hereinafter defined) if (1) a Change of
Control (as hereinafter defined) has occurred and the indemnitee so
requests or (2) in the case of an indemnitee that is a present or former
officer of the Corporation, a quorum of the Board of Directors consisting
of Disinterested Directors is not obtainable or, even if obtainable, a
majority of such Disinterested Directors so directs; (iii) by the
stockholders (but only if a majority of the Disinterested Directors, if
they constitute a quorum of the Board of Directors, presents the issue of
entitlement to indemnification to the stockholders for their
determination); or (iv) as provided below. In the event the determination
of entitlement to indemnification is to be made by Independent Counsel
pursuant to clause (ii) above, a majority of the Disinterested Directors
will select the Independent Counsel, but only an Independent Counsel to
which the indemnitee does not reasonably object; provided, however, that if
a Change of Control has occurred, the indemnitee will select such
Independent Counsel, but only an Independent Counsel to which the Board of
Directors does not reasonably object
Except as otherwise expressly provided herein the indemnitee will be
presumed to be entitled to indemnification upon submission of a request for
indemnification together with the Supporting Documentation in accordance
herewith above, and thereafter the Corporation will have the burden of
proof to overcome that presumption in reaching a contrary determination.
In any event, if the person or persons empowered hereunder to determine
entitlement to indemnification has not been appointed or has not made a
determination within sixty (60) calendar days after receipt by the
Corporation of the request therefor together with the Supporting
Documentation, the indemnitee will be deemed to be entitled to
indemnification and the indemnitee will be entitled to such indemnification
unless (i) the indemnitee misrepresented or failed to disclose a material
fact in making the request for indemnification or in the Supporting
Documentation or (ii) such indemnification is prohibited by law. The
termination of any proceeding, or of any claim, issue, or matter therein,
by judgment, order, settlement, or conviction, or upon a plea of nolo
contendere or
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its equivalent, will not, of itself, adversely affect the right of the
indemnitee to indemnification or create a presumption that the indemnitee
did not act in good faith and in a manner which the indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation
or, with respect to any criminal proceeding, that the indemnitee had
reasonable cause to believe that his or her conduct was unlawful.
In the event that a determination is made pursuant hereto that the
indemnitee is not entitled to indemnification (i) the indemnitee will be
entitled to seek an adjudication of his or her entitlement to such
indemnification either, at the indemnitee's sole option, in (x) an
appropriate court of the State of Delaware or any other court of competent
jurisdiction or (y) an arbitration to be conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association; (ii) any
such judicial proceeding or arbitration will be de novo and the indemnitee
will not be prejudiced by reason of such adverse determination; and (iii)
in any such judicial proceeding or arbitration the Corporation will have
the burden of proving that the indemnitee is not entitled to
indemnification.
If a determination is made or deemed to have been made, pursuant
hereto that the indemnitee is entitled to indemnification, the Corporation
will be obligated to pay the amounts constituting such indemnification
within five (5) business days after such determination has been made or
deemed to have been made and will be conclusively bound by such
determination unless (i) the indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification or in
the Supporting Documentation or (ii) such indemnification is prohibited by
law. In the event that advancement of expenses is not timely made pursuant
hereto or payment of indemnification is not made within five (5) business
days after a determination of entitlement to indemnification has been made
or deemed to have been made pursuant hereto, the indemnitee will be
entitled to seek judicial enforcement of the Corporation's obligation to
pay to the indemnitee such advancement of expenses or indemnification.
Notwithstanding the foregoing, the Corporation may bring an action, in an
appropriate court in the State of Delaware or any other court of competent
jurisdiction, contesting the right of the indemnitee to receive
indemnification hereunder due to the occurrence of any event described in
subclause (i) or (ii) of the first sentence of this paragraph (a
"Disqualifying Event"); provided, however, that in any such action the
Corporation will have the burden of proving the occurrence of such
Disqualifying Event.
The Corporation will be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to the provisions hereof that
the procedures and presumptions hereof are not valid, binding, and
enforceable and will stipulate in any such court or before any such
arbitrator that the Corporation is bound by all the provisions hereof.
In the event that the indemnitee, pursuant to the provisions hereof,
seeks a judicial adjudication of, or an award in arbitration to enforce,
his or her rights under, or to recover damages for breach hereunder, the
indemnitee will be entitled to recover from the Corporation, and will be
indemnified by the Corporation against, any expenses actually and
reasonably incurred by the indemnitee if the indemnitee prevails in such
judicial adjudication or arbitration. If it is determined in such judicial
adjudication or arbitration that the indemnitee is entitled to receive part
but not all
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of the indemnification or advancement of expenses sought, the expenses
incurred by the indemnitee in connection with such judicial adjudication or
arbitration will be prorated accordingly.
For purposes of this Article VI:
"Change in Control" means the occurrence of any of the following
events:
(1) The Corporation is merged, consolidated, or
reorganized into or with another corporation or other legal entity, and as
a result of such merger, consolidation, or reorganization less than a
majority of the combined voting power of the then-outstanding securities of
such corporation or entity immediately after such transaction are held in
the aggregate by the holders of the voting stock immediately prior to such
transaction;
(2) The Corporation sells or otherwise transfers all or
substantially all of its assets to another corporation or other legal
entity and, as a result of such sale or transfer, less than a majority of
the combined voting power of the then-outstanding securities of such other
corporation or entity immediately after such sale or transfer is held in
the aggregate by the holders of voting stock immediately prior to such sale
or transfer;
(3) There is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form, or report or item therein), each as
promulgated pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), disclosing that any person (as the term "person. is
used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing thirty-five percent (35%) or more
of the combined voting power of the voting stock; provided, however, that
no person will be deemed a member of a "group" (as that term is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) for purposes of
this Article VI solely by reason of being a party to the Stockholders
Agreement dated as of November 3, 1993 by and among the Corporation and
William F. Compton, Don R. Jacobs and Marcus P. Spiegel, as ALPA Trustees,
Shawmut Bank, as IAM Trustee, Plan Trustee Committee of IFFA, Trans World
Airlines Employees' Stock Ownership Plan, as IFFA Trustee, Glenn R. Zander,
as Other Employee Trustee, and LaSalle National Trust, N.A., as Voting
Trustee; or
(4) The Corporation files a report or proxy statement
with the Securities and Exchange Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or Schedule 14A (or any successor
schedule, form, or report or item therein) that a change in control of the
Corporation has occurred or will occur in the future pursuant to any then-
existing contract or transaction.
Notwithstanding the immediately above clauses (3) and (4), unless otherwise
determined in a specific case by majority vote of the Board of Directors, a
"Change in Control" will not be deemed to have occurred for purposes of
such clauses solely because (x) the Corporation, (y) an entity in which the
Corporation, directly or indirectly, beneficially owns fifty percent (50%)
or more of the
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voting securities (a "Subsidiary"), or (z) any employee stock ownership
plan or any other employee benefit plan of the Corporation or any
Subsidiary either Files of becomes obligated to file a report or a proxy
statement under or in response to Schedule 13D, Schedule 14D-l, Form 8-K,
or Schedule 14A (or any successor schedule, form, or report or item
therein) under the Exchange Act disclosing beneficial ownership by it of
shares of voting stock, whether in excess of thirty-five percent (35%) or
otherwise, or because the Corporation reports that a change in control of
the Corporation has occurred or will occur in the future by reason of such
beneficial ownership.
"Disinterested Director" means a Director who is not or was not a
party to the Proceeding in respect of which indemnification is sought by
the indemnitee.
"Independent Counsel" means a law firm or a member of a law firm
that neither presently is, nor in the past five (5) years has been,
retained to represent (i) the Corporation or the indemnitee in any matter
material to either such party or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" will not include any person who,
under the applicable standards of professional conduct then prevailing
under the law of the State of Delaware, would be precluded from
representing either the Corporation or the indemnitee in an action to
determine the indemnitee's rights hereunder.
The Corporation may purchase and maintain insurance to protect
itself and any indemnitee against any expenses, judgments, fines, and
amounts paid in settlement or incurred by any indemnitee in connection with
any proceeding to the fullest extent permitted by the GCL as then in effect
The Corporation may enter into contracts with any person entitled to
indemnification hereunder or otherwise, and may create a trust fund, grant
a security interest, or use other means (include without limitation a
letter of credit) to ensure the payment of such amounts as may be necessary
to effect indemnification as provided hereunder.
ARTICLE VII - MISCELLANEOUS
Section 7.1. Form of Records
Any records maintained by the Corporation in the regular course of
its business, including its stock ledger, books of account, and minute
books, may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, microphotographs, or any other information storage device;
provided, however, that the records so kept can be converted into clearly
legible written form within a reasonable time. The Corporation shall so
convert any records so kept on the request of any person entitled to
inspect the same.
Section 7.2 Waiver of Notice
Whenever notice is required to be given under any provision of the
GCL, the Certificate of Incorporation or the By-Laws, a written waiver
thereof, signed by a person entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent notice to such
person. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except
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when such person attends a meeting for the express purpose of objecting, at
the beginning of such meeting, to the transaction of any business because
such meeting had not been lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any meeting of the stockholders or
of the Board of Directors or of any committee thereof need be specified in
any written waiver of notice.
Section 7.3 Voting upon Stock
Unless otherwise ordered by the Board of Directors, the Chairman of
the Board, the President, the Secretary, or the Treasurer shall have full
power and authority to attend and vote at any meeting of stockholders of
any corporation in which the Corporation may own stock and to grant proxies
and to give written consents in respect of such stock. The Board of
Directors may from time to time confer like powers on any other person or
persons.
Section 7.4 Collections and Depositories
Checks, drafts, and other instruments for the payment of money to
the Corporation shall be endorsed for collection, either manually or by
facsimile, by such Officer or Officers or other person or persons as may
from time to time be specified by the Board of Directors or in a manner
prescribed by the Board of Directors and shall be deposited in such banks,
trust companies, or other depositories as may be designated from time to
time by the Board of Directors or in a manner prescribed by the Board of
Directors.
Section 7.5 Checks
Checks, drafts or other instruments for the payment of money by the
Corporation shall be signed in such manner, either manually or by
facsimile, by such Officer or Officers or other person or persons as may
from time to time be specified by the Board of Directors or in a manner
prescribed by the Board of Directors.
Section 7.6 Fiscal Year
The fiscal year of the Corporation shall begin on the first day of
January and end on the thirty-first day of December in each year.
Section 7.7 Corporate Seal
The Corporate Seal of the Corporation shall be in such form as the
Board of Directors may from time to time prescribe and the Secretary or the
Treasurer or any Assistant Secretary or Assistant Treasurer may cause it or
a facsimile thereof to be impressed or fixed or in any other manner
reproduced on any instrument that is to be sealed with the Corporate Seal
and may attest the same.
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Section 7.8 Reliance upon Books, Reports, and Records
Each Director, each member of a committee designated by the Board of
Directors, and each officer of the Corporation will, in the performance of
his or her duties, be fully protected in relying in good faith upon the
records of the Corporation and upon such information, opinions, reports, or
statements presented to the Corporation by any of the Corporation's
officers or employees, or committees of the Board of Directors, or by any
other person or entity as to matters the Director, committee member, or
officer believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf
of the Corporation.
Section 7.9 Time Periods
In applying any provision of these By-Laws that requires that an act
be done or not be done a specified number of days prior to an event or that
an act be done during a period of a specified number of days prior to an
event, calendar days will be used unless otherwise specified, the day of
the doing of the act will be excluded, and the day of the event will be
included.
Section 7.10 Certain Defined Terms
Terms used herein with initial capital letters that are not
otherwise defined are used herein as defined in the Certificate of
Incorporation.
Section 7.11 Ratifications
Any transaction, questioned in any law suit on the ground of lack of
authority, defective or irregular execution, adverse interest of director,
officer or stockholder, nondisclosure, miscomputation, or the application
of improper principles or practices of accounting, may be ratified before
or after judgment by the Board of Directors or by the stockholders, and if
so ratified shall have the same force and effect as if the questioned
transaction had been originally duly authorized. Such ratification shall be
binding upon the Corporation and its stockholders and shall constitute a
bar to any claim or execution of any judgment in respect of such questioned
transaction.
Section 7.12 Authority for Certain Corporate Actions
The following actions must be approved by the Board of Directors,
which approval shall not be given over the dissenting vote of (i) the
Directors elected by the holders of ALPA Preferred Stock, IFFA Preferred
Stock and IAM Preferred Stock ("Labor Directors") plus (ii) two Directors
other than the Labor Directors:
(a) any sale, transfer or disposition of, in a single or
series of transactions, twenty percent (20%) or more of the Corporation's
assets, except for transactions in the ordinary course of business
including aircraft transactions as part of a fleet management plan;
(b) any merger or consolidation of the Corporation with
or into another entity;
(c) any business combination within the meaning of
Section 203 of the GCL;
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(d) a dissolution or liquidation of the Corporation;
(e) any filing of a petition for bankruptcy,
reorganization or receivership under any state or federal bankruptcy,
reorganization or insolvency law;
(f) any repurchase, retirement or redemption of the
Corporation's stock, or securities prior to their scheduled maturity or
expiration, except for mandatory redemptions of any redeemable preferred
stock of the Corporation and for redemptions out of proceeds of any
substantially concurrent offering of comparable or junior securities;
(g) any acquisition of assets not related to the
Corporation's current business as an air carrier in a single or series of
related transactions in excess of $50,000,000 adjusted annually by
reference to the Consumer Price Index as published from time to time by the
Bureau of Labor Statistics; or
(h) any sale of the Corporation's capital stock or
securities convertible into capital stock of the Corporation to any person
if (A) at the time of issuance or (B) assuming conversion of all
outstanding convertible securities of the Corporation, such person or
entity would own twenty percent (20%) or more of the outstanding capital
stock of the Corporation.
ARTICLE VIII - AMENDMENT AND SEVERABILITY OF BY-LAWS
Section 8.1. Amendment
(a) To the extent permitted in the Certificate of Incorporation
and the By-Laws, the Board of Directors shall have power to adopt, amend or
repeal By-Laws. To the extent permitted in the Certificate of
Incorporation and the By-Laws, By-Laws adopted by the Board of Directors
may be repealed or changed, and new By-Laws made, by the stockholders, and
the stockholders may prescribe that any By-Law made by them shall not be
altered, amended or repealed by the Board of Directors.
(b) Notwithstanding any provision of the Certificate of
Incorporation or these By-Laws to the contrary, the following provisions of
these By-Laws shall not be amended prior to September 1, 2000 without the
affirmative vote of the Directors elected by the holders of the ALPA
Preferred Stock, IAM Preferred Stock and IFFA Preferred Stock: Section
3.10(i), Section 7.12 and this Section 8.1(b).
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Section 8.2. SEVERABILITY
If any provision or provisions of these By-Laws are held to be
invalid, illegal, or unenforceable for any reason whatsoever: (i) the
validity, legality, and enforceability of the remaining provisions of these
By-Laws (including without limitation all portions of any paragraph of
these By-Laws containing any such provision held to be invalid, illegal, or
unenforceable, that are not themselves invalid, illegal, or unenforceable)
will not in any way be affected or impaired thereby and (ii) to the fullest
extent possible, the provisions of these By-Laws (including without
limitation all portions of any paragraph of those By-Laws containing any
such provision held to be invalid, illegal, or unenforceable, that are not
themselves invalid, illegal, or unenforceable) will be construed so as to
give effect to the intent manifested by the provision held invalid,
illegal, or unenforceable.
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AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN SERVICE OF
TRANS WORLD AIRLINES, INC.
REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
(EFFECTIVE SEPTEMBER 1, 1998)
<PAGE>
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TABLE OF CONTENTS
Section Page
- - ------------------------------------------------------------------------------
1 Recognition and Scope 1
2 General 12
3 Transportation 16
4 Compensation 19
5 Miscellaneous Pay Rules 25
6 Training and Qualifications 28
7 Trip and Training Expenses 39
8 Deadhead Time 43
9 Scheduling Policy 45
10 Scheduling of Pilots 65
11 Hours of Service 78
12 Reserve Schedule Policy 88
13 Moving Expenses 94
14 Vacation 96
15 Sick Leave with Pay 103
16 Physical Standards 105
17 Seniority 108
18 Leaves of Absence 111
19 Vacancies and Displacements 120
20 Furlough and Employment Protection 135
21 Grievance Procedure 139
22 System Board of Adjustment 143
23 Retirement, Trust and Savings Plans 148
24 Group Benefits 158
25 Agency Shop 166
26 Voluntary Dues / Service Charge
Deduction 169
27 Internment, Prisoner, Missing
or Hostage Benefits 171
28 Charter Flights 172
29 Agreement Precedence 173
30 Effective Dates and Duration 174
31 Definitions 175
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TABLE OF CONTENTS
Letters of Agreement Page
- - -------------------------------------------------------------------------------
I Civil Reserve Air Fleet 180
II MAC Flying Letter 184
III Physical Standards 186
IV Exemptions - Agency Shop 187
V AIDS Letter 188
VI International Satellite Agreement 190
VII Professional Standards Letter 195
VIII 1957 Liability Letter 197
IX Training Records Availability During
Liquidation Letter 198
X Crew Meal Availability Letter 199
XI FAA/Medical Reimbursement Policy
Letter of Agreement 200
XII Participative Management Letter,
Dated August 31, 1994 201
XIII Corporate Governance Letter,
Dated July 8, 1998 204
XIV Regional Pilot Base Agreement 209
XV Engineering Watch Letter 216
XVI Trans States Exception Letter 217
XVII Term Sheet - Letter of Agreement 218
XVIII Furlough/Productivity Letter 221
XIX B727 Flight Engineer Letter of
Agreement 222
XX Instructor Letter of Agreement
(INS LOA) 224
XXI Line Instructor Pilots/Line
Standards Pilots (LIP/LSP LOA) 236
XXII Non-Seniority List Simulator
Instructors Letter 242
XXIII Reduced Rate Letter
Dated May 21, 1996 244
XXIV Ratification Letter of Agreement 247
Memorandum, re Availability of Other
Letters of Agreement and Certain MEC
Resolutions 250
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THIS AGREEMENT is made and entered into in accordance with the
provisions of the Railway Labor Act, as amended, by and between TRANS
WORLD AIRLINES, INC. hereinafter known as the "Company" or "TWA" and the
AIR LINE PILOTS in service of TRANS WORLD AIRLINES, INC. as represented
by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL, hereinafter known as
the "Association" or "ALPA". In making this Agreement, the parties
hereto recognize that compliance with the terms of the Agreement and the
development of a spirit of cooperation is essential for mutual benefit
and for the intent and purpose of the Agreement. It is hereby mutually
agreed:
SECTION 1
RECOGNITION AND SCOPE
(A) Recognition
(1) The Air Line Pilots Association, International, has
furnished to the Company proof that a majority of the air
line pilots employed by the Company has designated the
Association to represent them and in their behalf negotiate
and conclude an agreement with the Company as to hours of
labor, wages, and other employment conditions covering the
pilots in the employ of the Company in accordance with the
provisions of the Railway Labor Act, as amended.
(2) Further, the said Association has been duly certified by the
National Mediation Board ("NMB") in Case No. R-3982, dated
March 19, 1968 as the designated and authorized
representative, for the purposes of the Railway Labor Act,
as amended, of those employees of Trans World Airlines,
Inc., known as flight engineers and student flight engineers
undergoing training on a full-time basis.
(B) Scope
(1) Except as provided in Section 1(G) below, all present and
future flying of any form performed by or for the Company or
any Affiliate shall be performed by pilots on the TWA Pilots
System Seniority List in accordance with the terms and
conditions of this Agreement. Such flying shall include
without limitation all revenue flying and non-revenue
flying, whether scheduled or unscheduled, (1) on the
Company's or an Affiliate's aircraft, or (2) under the
Company's or an Affiliate's operational control, or (3) over
the Company's or an Affiliate's present and future routes,
route authorities, and/or extensions thereof, or (4)
subcontracted either to or for any other carrier or entity,
or (5) conducted by any other carrier under the TWA name,
designator code, logo or marks.
(2) Except as agreed in the Letter of Agreement dated July 6,
1998, all individuals who undergo pilot training to perform
the Company's or an Affiliate's flying and all individuals
who train or check pilots to perform the Company's or an
Affiliate's flying, except for ground school classroom
instructors and initial factory-conducted training in newly-
purchased aircraft, shall be pilots on the TWA Pilots System
Seniority List subject to the terms and conditions of the
Agreement.
(3) All present or future flying, pilot training or pilot
services of any form performed for any other carrier by
pilots on the TWA Pilots System Seniority List shall be
performed under terms and conditions that are no less
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Section 1(B)(3), cont.
favorable than the comparable terms and conditions contained
in the Agreement.
(4) Neither the Company nor any Affiliate shall, without the
Association's prior written consent, enter into any sale,
lease, transfer or other disposition of the Company's or an
Affiliate's aircraft, international routes or international
route authority to any person(s) or entity (the "Buyer")
where the Buyer or any air carrier that Controls or is under
the Control of the Buyer uses such aircraft or international
routes to provide or receive passenger feed to or from the
Company pursuant to an agreement or an arrangement with the
Company or an Affiliate other than an industry standard
interline agreement or its substantial equivalent.
(5) Neither the Company nor any Affiliate shall establish any
pilot domicile outside the United States or its territories
without the Association's prior written consent.
(C) Successorship and Parent Companies
(1) The Company and its Affiliates shall require any successor,
assign, assignee, transferee, administrator, executor and/or
trustee of the Company or of a Parent (a "Successor")
resulting from the transfer (in a single transaction or in
multi-step transactions) to the Successor of the ownership
and/or Control of all or substantially all of the equity
securities and/or assets of the Company (a "Successorship
Transaction") to employ the pilots on the TWA Pilots System
Seniority List in accordance with the provisions of the
Agreement and to assume and be bound by the Agreement.
(2) The Company and its Affiliates shall not conclude any
agreement for a Successorship Transaction unless the
Successor agrees in writing, as an irrevocable condition of
the Successorship Transaction, to assume and be bound by the
Agreement, to recognize the Association as the
representative of the Successor's pilots, and to guarantee
that the pilots on the TWA Pilots System Seniority List will
be employed by the Successor in accordance with the
provisions of the Agreement.
(3) The Company shall not conclude, facilitate or permit any
agreement or arrangement that establishes any Parent that
is, Controls or is under the Control of an air carrier
unless the Parent agrees in writing to be bound by Section 1
of the Agreement in the same manner as the Company.
(D) Labor Protective Provisions
(1) Successorship and Merger
In the event of a Successorship Transaction in which the
Successor is an air carrier or any person or entity that
Controls or is under the Control of an air carrier (the
"Merger Partner"), the Company shall require the Merger
Partner to agree, and the Merger Partner shall agree, to
employ the Company's pilots and to integrate the pre-merger
pilot seniority lists of the Company and the Merger Partner
pursuant to Association merger policy if the Merger
Partner's pilots are represented by the Association and
2
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<PAGE>
Section 1(D)(1), cont.
otherwise pursuant to Section 3 and 13 of the Allegheny-
Mohawk Labor Protective Provisions ("LPPs").
(2) Pilot Transfer Rights in Substantial Asset Sales
If the Company or any Affiliate, in a single transaction or
a series of related transactions:
(i) sells, transfers or disposes of assets which
have produced more than twenty percent (20%) of
the gross operating revenue of the Company over
the twelve (12) months preceding the closing of
the asset sale, transfer or disposition; or
(ii) sells, transfers, or disposes of assets or
operations which reduce(s) or reasonably can be
expected to lead to a reduction in the level of
available seat miles ("ASMs") operated by the
Company at the closing of the asset sale,
transfer or disposition by fifteen percent (15%)
or more;
(iii) sells, transfers or disposes of any
international route or route authority; or
(iv) sells, transfers or disposes of ten percent
(10%) or more of the Company's aircraft fleet as
of the closing of the aircraft sale, transfer or
disposition (except as part of a phased
transport aircraft replacement program which is
being diligently pursued in good faith by the
Company, and pursuant to which the Company in
fact replaces such aircraft within 180 days) to
a person or entity or to a group of persons or
entities acting in concert (the "Purchaser")
that is, Controls or is under the Control of an
air carrier or that will operate as, Control or
be under the Control of an air carrier following
its acquisition of the Company assets (any such
transaction or series of transactions that
satisfies (i), (ii), (iii) or (iv) above, a
"Substantial Asset Sale"), then:
(a) The Association, by and through its TWA Master
Executive Council ("MEC") shall determine, in its sole
discretion, whether or not pilots from the TWA Pilots'
System Seniority List (the "Transferring Pilots")
shall transfer to the particular Purchaser(s) pursuant
to the Substantial Asset Sale. The number of
Transferring Pilots shall be determined by calculating
the average pilot staffing on a monthly basis over the
prior twelve (12) months attributable to the
international route or route authority, aircraft
and/or other assets or operations transferred to the
particular Purchaser in connection with the
Substantial Asset Sale. In addition to the above
requirements the Company shall use its reasonable good
faith efforts to have the particular Purchaser offer
employment to the largest practicable number of TWA
pilots as Transferring Pilots under the terms of this
Section 1(D); and
3
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<PAGE>
Section 1(D)(2)(b)
(b) The Transferring Pilots shall be selected on the basis
of TWA system seniority on the TWA Pilots System
Seniority List from those pilots who are qualified to
operate the aircraft, route, or operation related to
the Substantial Asset Sale; provided that for this
purpose a pilot shall be deemed "qualified" if he or
she is qualified without training (other than
recurrent or substantially equivalent training,
proficiency check or training necessary to qualify
pilots on the operating procedures of the Purchaser)
to operate the aircraft transferred to the Purchaser
and/or such other aircraft as are intended to be
operated by the Purchaser in connection with the
assets transferred pursuant to the particular
Substantial Asset Sale; provided further that in the
event the Purchaser intends to operate different type
aircraft than that operated by TWA immediately prior
to such Substantial Asset Sale, a pilot shall be
deemed "qualified" with respect to such different type
aircraft if he or she is able to be trained and
certified to operate such different type aircraft; and
(c) The Company and its Affiliates shall require each
particular Purchaser, and each particular Purchaser
shall agree, (i) to employ the Transferring Pilots,
(ii) to pay the Transferring Pilots at no less than
the lesser of the rates of pay being paid by TWA or
the particular Purchaser for the applicable seniority
level at the time of the transfer; and (iii) to
integrate the Transferring Pilots into the Purchaser's
pilots seniority list pursuant to Association merger
policy if the Purchaser's pilots are represented by
the Association and otherwise pursuant to Sections 3
and 13 of the Allegheny-Mohawk LPPs.
(3) Special Protections in a Carrier Fragmentation
(a) If the Company sells, transfers or disposes of assets
within any twelve (12) month period which, net of
asset purchases or acquisitions during the same twelve
(12) month period, (i) produced fifteen percent (15%)
or more of the ASMs operated by the Company over the
prior twelve (12) months, or (ii) produced fifteen
(15%) percent or more of the Company's pilot staffing
positions over the prior twelve (12) months, or (iii)
produced fifteen percent (15%) or more of the
Company's annual block hours over the prior twelve
(12) months (the closing of any such transaction(s)
which alone or in the aggregate satisfy the aforesaid
percentage being referred to as a "Triggering Event"),
then
(i) no pilot on the Company's seniority list on the
date of the Triggering Event shall be furloughed
during the twelve (12) month period following
the Triggering Event, or shall be furloughed in
anticipation of any Triggering Event or for the
purpose of depriving any pilot of protection
under this paragraph; and
4
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<PAGE>
Section 1(D)(3)(a)(ii)
(ii) during the time period in which any of the
restrictions described in this Section 1(D)(3)
are in effect, the Company will be permitted, at
its discretion, notwithstanding any other
provision of the Agreement, to require a pilot
who would have been furloughed but for the
restrictions described in this Section 1(D)(3)
to utilize his or her accrued unused vacation.
(b) The special protections described in this Section
1(D)(3) are in addition to the pilot transfer and
seniority integration rights established in Section
1(D)(2) above in connection with Substantial Asset
Sales. However, the Substantial Asset Sales governed
by Section 1(D)(2) above shall not be counted in
determining whether the Company has reached a
Triggering Event (and thereby triggered the special
protections) under this Section 1(D)(3) in any twelve
(12) month period.
(c) In addition, the special protections described in this
Section 1(D)(3) shall not apply if the Company can
demonstrate, by clear and convincing evidence, based
on all the information available at the time of the
Triggering Event, that the asset sales, transfers or
dispositions that result in a Triggering Event will
not result, directly or indirectly in the furlough of
Company pilots during the twelve (12) month period
following a sale, transfer or disposition.
(4) General
(a) The Company shall not conclude or enter into any
agreement for any transaction or series of
transactions that constitute a Substantial Asset Sale
or a Merger unless the particular Purchaser or the
Merger Partner, as applicable, agrees in writing to
offer employment and integrate TWA pilots in
accordance with the terms of this Section 1(D) or as
otherwise agreed to by ALPA. The Company will not
engage in a multiple party sale transaction or any
other corporate transaction with the purpose or
knowing effect of avoiding the applicability of this
Section 1(D).
(b) This Section 1(D) shall not apply to (i) any sale
lease-back or any financing transaction in which the
Company continues to use the financed assets in its
operations or (ii) the sale of Trans World Express,
Inc. or any or all of its assets.
(c) The rights and protections provided the Association
and the TWA pilots under this Section 1(D) are in
addition to any other rights and protections contained
in any other agreement involving the Association and
the TWA pilots including other provisions of this
Agreement. In the event of a conflict between Section
1 and any other provision of this Agreement, this
Section 1 shall control.
5
<PAGE>
<PAGE>
Section 1(D)(5)
(5) Acquisition of Airline Assets
In the event (i) the Company acquires international routes
or 20 or more aircraft from another carrier (the "Seller")
and (ii) the Company's acquisition of such routes or
aircraft materially increases the Company's pilot staffing
needs and (iii) the terms of the Company's purchase
agreement with the Seller require the Company to employ
certain of the Seller's pilots with lateral seniority or
seniority integration rights, then a reasonable number of
transferring pilots from the Seller shall be integrated into
the TWA Pilots System Seniority List pursuant to Association
Merger Policy if the Seller's pilots are represented by the
Association and otherwise pursuant to Sections 3 and 13 of
the Allegheny-Mohawk LPPS; provided, however, that no
company pilot shall be furloughed or suffer a reduction in
pay status as a direct or indirect result of such seniority
integration or such acquisition of routes or aircraft.
(E) Bankruptcy
(1) In the event a petition under Chapters 7 or 11 of the
Bankruptcy Code concerning the Company is filed, then:
(a) Neither that Company nor any Affiliate shall file any
application seeking rejection or modification of any
agreement between the Company and the Association
pursuant to 11 U.S.C. Section 1113, including a
request to implement interim changes in the Agreement
pursuant to 11 U.S.C. Section 1113(e).
(b) The Company and its Affiliates stipulate and agree
that this Agreement permits the reorganization of the
Company and assures that all creditors, the debtor and
all affected parties are treated fairly and equitably
in any reorganization within the meaning of 11 U.S.C.
Section 1113. The Company and its Affiliates shall
actively oppose a rejection or modification of the
Agreement or implementation of interim changes to the
Agreement if proposed or supported by any other party.
(2) In the event the Agreement is rejected or modified pursuant
to 11 U.S.C. Section 1113 notwithstanding Section 1(E)(1)
above, then the difference between the rates of pay, rules
and working conditions established in this Agreement and the
post-rejection rates of pay, rules and working conditions
for the Company's pilots shall accrue and be treated as an
expense of administration pursuant to 11 U.S.C. Section
Section 503(B)(1)(A) and 507 and shall be paid as an
administrative priority pursuant to 11 U.S.C. Section
Section 503(b)(1)(A) and 507(a)(1).
(F) Remedies
(1) The Company agrees, and shall require the particular
Purchaser (or Successor or Merger Partner if applicable) to
agree, to resolve all disputes concerning the interpretation
or application of this Section 1 through final and binding
arbitration on an expedited basis directly before the ALPA-
TWA System Board of Adjustment sitting with a neutral
6
<PAGE>
<PAGE>
Section 1(F)(1), cont.
arbitrator. The dispute shall be filed with the Company
within ten (10) days of the interpretation or application of
Section 1 and shall be heard no later than fifteen (15) days
following the submission to the System Board and decided no
later than thirty (30) days after submission (the provisions
of Section 22 herein notwithstanding), unless the parties
agree otherwise in writing; but in no event shall such
arbitration delay the closing of the sale of the transferred
assets. ALPA shall cooperate with the Company and the
Purchaser in order that any dispute which is not decided at
the time of closing will be arbitrated post-closing, with
any determination to be binding on the Purchaser unless the
Company and the Purchaser agree, with the consent of ALPA
(which consent shall not be unreasonably withheld or delayed
by ALPA), that such determination shall be and remain the
sole obligation of the Company; provided that the Purchaser
shall have the right to become a party to and participate in
any such arbitration which could become binding upon such
Purchaser.
(2) The Company and the Association agree that the rights and
obligations contained in Section 1 of this Agreement are
equitable in nature, that there are no adequate remedies at
law for the enforcement of such rights and obligations, and
that the Association and the Company's pilots will be
irreparably injured by any violation of this Section 1. The
parties therefore agree that, in addition to any other
rights and remedies available under law or the Agreement,
this Section 1 shall be enforced by equitable remedies,
including injunctions and specific performance, against the
Company, its Affiliates and others in privity with the
Company.
(3) In addition, the parties agree that the equitable rights and
obligations established in this Section 1 shall remain
enforceable, through equitable relief and otherwise, until
the Agreement is amended pursuant to Section 6 of the
Railway Labor Act notwithstanding (a) any filing concerning
the Company under any chapter of the United States
Bankruptcy Code, (b) any attempted alteration, modification
or rejection of the Agreement pursuant to any provision of
the Bankruptcy Code or otherwise, (c) any attempted sale of
the property of the Company pursuant to any provision of the
Bankruptcy Code or otherwise, or (d) any imposition of an
automatic stay with respect to the Company's property.
(G) Commuter Carriers, Code Sharing and Block Seating
(1) The Company, its subsidiaries and its corporate affiliates
may acquire an ownership interest in commuter carriers and
may operate such commuter carriers under the terms of
separate collective bargaining agreements with the
Association provided that any such commuter carriers comply
with the restrictions contained in Sections 1(G)(2) through
1(G)(5) below.
(2) Except as agreed in the September 5, 1995 Letter of
Agreement pertaining to the use of ATR aircraft by Trans
States Inc., the Company and its Affiliates will not
operate, maintain any ownership interest in, or enter into
any code sharing arrangement with, any
7
<PAGE>
<PAGE>
Section 1(G)(2), cont.
United States air carrier as defined in 49 U.S.C. 40102
(a)(2) that operates any aircraft under the Company's
designator code, name, logo or marks with: (a) a maximum
seating capacity in excess of sixty (60) seats; (b) a
maximum certified gross takeoff weight in excess of 60,000
pounds; (c) a maximum certified cruising speed in excess of
400 miles per hour; or (d) any Jet Aircraft as defined
herein. Any carrier that satisfies all of the restrictions
contained in this Section 1(G)(2) and that utilizes the
Company's or an Affiliate's designator code is hereinafter
referred to as a "TWA Commuter Carrier." For purposes of
this subsection (G), "Jet Aircraft" is defined as any
aircraft that uses a turbine-driven engine without an
external propeller.
(3) Notwithstanding the limitations in Section 1(G)(2) above,
TWA Commuter Carriers may operate up to an aggregate of
fifteen (15) Jet Aircraft with a maximum seating capacity of
fifty (50) seats.
(4) In addition to the fifteen (15) Jet Aircraft referred to in
Section 1(G)(3) above, TWA Commuter Carriers may operate:(i)
one additional Jet Aircraft for each additional three
aircraft operated by TWA above its current fleet size of 184
aircraft until the TWA fleet size reaches 200 aircraft; and
(ii) one additional Jet Aircraft for each additional two
aircraft operated by TWA exceeding 200 TWA fleet aircraft.
The maximum average seating capacity of the Jet Aircraft
operated by TWA Commuter Carriers shall be: fifty (50) seats
while the Company's fleet size is less than 190; fifty four
(54) seats while the Company's fleet size is between 191 and
195; fifty six (56) seats while the Company's fleet size is
between 196 and 200; and sixty (60) seats while the
Company's fleet size exceeds 200. The relationship of the
Company's fleet size to the number of Jet Aircraft that may
be operated by TWA Commuter Carriers and the average seating
capacity of the Jet Aircraft that may be operated by TWA
Commuter Carriers is shown in Section 1(G)(9) below.
(5) In no event will TWA Commuter Carriers operate more than a
maximum aggregate of thirty (30) Jet Aircraft, and in no
event will the certificated seating capacity of any Jet
Aircraft operated by any TWA Commuter Carrier exceed seventy
(70) seats.
(6) As a limited exception to the restrictions contained in
Sections 1(G)(2),(3),(4) and (5) above, the Company may
enter into or maintain code sharing agreements with:
(a) carriers other than United States air carriers (as
defined in 49 U.S.C. 40102 (a)(2)) so long as the
Company can demonstrate by clear and convincing
evidence, that such code sharing arrangements do not
result, directly or indirectly, in the furlough of any
Company pilot or a reduction in pay status for any
Company pilot;
(b) United States air carriers (as defined in 49 U.S.C
40102 (a)(2)) other than TWA Commuter Carriers that
permit such carriers to apply the Company's designator
8
<PAGE>
<PAGE>
Section 1(G)(6)(b), cont.
code to their operations within the United States and
its territories as long as (i) the number of quarterly
block hours operated by such carriers utilizing the
Company's designator code does not exceed four percent
(4.0%) of the total number of block hours operated by
the Company for the same quarter within the United
States and its territories and (ii) the Company can
demonstrate, by clear and convincing evidence, that
such code sharing arrangements do not result, directly
or indirectly, in the furlough of any Company pilot or
a reduction in pay status for any Company pilot;
provided however, the MEC may, in its sole discretion,
increase the total number of block hours available for
such operations to up to 10% of the total number of
block hours operated by the Company for the same
quarter within the United States; and
(c) The number of quarterly block hours specified in
Section 1(G)(6)(b)(i) above may be increased as
follows: if the Company's fleet size increases to 193
aircraft, then the number shall be four and one-half
percent (4.5%); if the Company's Fleet is at least 199
aircraft, then the number shall be five percent
(5.0%). The relationship between the Company's fleet
size and the number of quarterly block hours that may
be operated by such United States air carriers is
shown in Section 1(G)(9) below.
(7) The Company and its Affiliate may only enter into block
seating arrangements (i.e., the advance purchase or
reservation of blocks of seats on other carriers for resale
by the Company) aboard any aircraft operated by any person
or entity other than the Company if and to the extent that
the Company can demonstrate, by clear and convincing
evidence, that any such block seating arrangement does not
result, in the furlough of any Company pilot or a reduction
in pay status for any Company pilots.
(8) The Company will not furlough any pilot on the TWA Pilot
System Seniority List as a result of the acquisition,
expansion over TWA's domestic route system or operation of
any TWA Commuter Carrier.
(9) Summary Chart -- Sections 1(G)(4),(5) and (6)
<TABLE>
<CAPTION>
Company Quarterly Code No. Of Jet Max. Avg.
Aircraft Share Domestic Aircraft Seating
Block Hours That That May Be Capacity Of
May Be Operated By Operated By Jet Aircraft
U.S. Air Carriers TWA Commuter Operated By
Other Than TWA Carriers TWA Commuter
Commuter Carriers Carriers
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
187-189 4.0% 16 50
190-192 4.0% 17 54
193-195 4.5% 18 54
196-198 4.5% 19 56
199-200 5.0% 20 56
201 + 5.0% 21 + 1 for 2 60
thereafter
up to 30
Maximum
</TABLE>
9
<PAGE>
<PAGE>
Section 1(G)(10)
(10) In addition to and apart from the Jet Aircraft carrying only
that TWA Commuter Carrier's and TWA's or Affiliate's
designator code that TWA Commuter Carriers are otherwise
authorized to operate by this Section 1(G), TWA Commuter
Carriers may additionally operate a maximum of three (3) Jet
Aircraft with a capacity of no more than seventy (70) seats
for which that TWA Commuter Carrier has a code-sharing
agreement involving both (a) TWA or an Affiliate and (b) a
third-party code-sharing carrier ("Shared Code-Sharing Jet
Aircraft"). These 3 Shared Code-Sharing Jet Aircraft are not
subject to and will not count towards the maximum average
seating limitations of Section 1(G)(4) and the 30 aircraft
aggregate limitation of Section 1(G)(5). All other
restrictions and limitations imposed by this Section 1(G)
remain in effect for these Shared Code-Sharing Jet Aircraft.
(H) Definitions
The following definitions shall apply to the capitalized terms in
the Section 1 of the Agreement:
(1) Agreement. The term "Agreement" means and includes this
---------
collective bargaining agreement between the Association and
the Company and any and all other agreements between the
Association and the Company.
(2) Control. Person or entity A shall be deemed to "Control"
-------
person or entity B if person or entity A, whether directly
or indirectly,
(a) owns securities that constitute, are exercisable for
or are exchangeable into twenty percent (20%) or more
of (i) entity B's outstanding common stock or (ii)
securities entitled to vote on the election of
directors of entity B, or otherwise owns twenty
percent (20%) or more of entity B; or
(b) maintains the power, right, or authority -- by
contract or otherwise -- to direct, manage or direct
the management of a substantial portion of entity B's
operations, or provides a substantial portion of the
controlling management personnel of entity B; or
(c) maintains the power, right or authority to appoint or
prevent the appointment of a majority of entity B's
Board of Directors or similar governing body; or
(d) maintains the power, right or authority to appoint a
minority of entity B's Board of Directors or similar
governing body, if such minority maintains the power,
right or authority to appoint or remove any of entity
B's executive officers or any committee of entity B's
Board of Directors or similar governing body, to
approve a material part of entity B's business or
operating plans, or debt or equity offerings.
(3) Parent. As used in the Agreement, the term "Parent" refers
------
to any entity that Controls the Company, whether directly or
indirectly through the Control of other Entities that
Control the Company.
10<PAGE>
<PAGE>
Section 1(H)(4)
(4) Affiliate. As used in the Agreement, the term "Affiliate"
---------
refers to (i) any person or entity that Controls the Company
whether directly or indirectly through the Control of other
entities, or (ii) any person or entity that the Company
Controls, whether directly or indirectly through the Control
of other entities, or (iii) any other corporate subsidiary,
parent or division of the Company, or any other Affiliate.
11
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<PAGE>
SECTION 2
GENERAL
(A) Nothing in this Agreement shall be construed to limit or deny any
pilot hereunder any rights or privileges to which he/she may be
entitled under the provisions of the Railway Labor Act, as
amended.
(B) No pilot shall be required to pay for the use of any Company
equipment required by the Company for personnel training. When
circumstances warrant, the Company will replace or reissue
required charts and manuals without charge to the pilot.
(C) No pilot shall be required to pay a fine on any part of equipment
damaged.
(D) The recommendations of the Association shall be considered by the
Company before making any change in the style, color, or materials
of uniforms; such style shall be dignified and professional. For
the purpose of this paragraph, the useful life of the current
uniform is established as two (2) years. If a pilot is required to
change in less than two (2) years of useful life, a pro rata share
of the cost of the uniform will be paid by the Company. If a pilot
is furloughed, he/she shall have the option of retaining his/her
uniform or selling it to the Company, in which case he/she shall
receive a pro rata share of the uniform cost.
(E) Within sixty (60) days of signing this Agreement, the Company will
provide each pilot with a copy, which shall include Letters of
Understanding, Amendments, or Addenda to the Agreement. Copies
shall be provided, in both a Jeppesen-sized booklet and shall be
electronically available on the TWACREW website. Any Amendments to
the Agreement completed subsequently shall be printed in similar
format and distributed by the Company to each pilot for inclusion
in his/her copy of the Agreement within sixty (60) days of signing
of such Amendments. Additionally, it shall be electronically
available.
(F) (1) The Company will furnish pilot paychecks in sealed
envelopes. Each pilot shall be extended the option of having
his/her paychecks mailed to his/her home or another address
of his/her choice, which shall include a bank provided the
Company encounters no more difficulty in effecting mailing
to a bank than it would in mailing the check to the pilot's
Regional Chief Pilot. To facilitate the mailing of a
paycheck to a bank it shall be the responsibility of the
individual pilot to assure that his/her bank will accept the
format of the Company's paycheck for the purpose of deposit
by mail.
Effective January 1, 2000, each pilot shall have the
additional option to have his/her paycheck electronically
deposited in a designated financial institution. If the
pilot elects the electronic direct deposit option, his/her
paycheck stub will be available at his/her domicile or the
pilot may provide a self-addressed stamped envelope of
appropriate size with the domicile administration for the
purpose of mailing his/her paycheck stub.
(2) The amount of the bi-monthly advances will be reviewed and
adjusted (as necessary) at least each calendar quarter based
on the average of projected ALV's for the following three
(3) months. In the event the Company undertakes a
replacement or overhaul of its existing payroll system, the
12
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<PAGE>
SECTION 2(F)(2), cont.
Company shall modify the advance system to provide advances
to individual pilots which are more closely based upon the
pilot's projected monthly earnings.
(3) The Company shall make available via hard copy or electronic
transmittal a copy of each pilot's Flight Time
Record/Earnings Statement at his/her domicile each month.
(G) At an airport where a layover of more than two and one-half (2
1/2) hours but less than ten (10) hours is scheduled, and any
layover at a domicile, an adequate rest area with reasonable
accommodations shall be provided by the Company. For the purpose
of this provision, reasonable accommodations shall require
sufficient reclining chairs and /or lie down facilities. The
Company will consult with a committee appointed by the TWA Pilots
MEC for the purpose of assuring that, where existing floor space
permits, such reclining chairs or lie down facilities are in a
separate, quiet area. This provision shall not apply to through
flights.
When the Association determines that any crew rest area is not in
compliance with this Section, it shall notify the Regional Chief
Pilot of the domicile nearest such facility of the specific
conditions(s) in need of correction. The Company shall promptly
investigate and undertake to correct such conditions or advise the
Association representative bringing such complaint within ten (10)
business days of the specific circumstances that prevent it from
doing so. Thereafter, if the particular condition has not been
corrected to the satisfaction of the Association, the parties
shall meet within ten (10) business days in order to seek a
solution to the problem.
(H) At the request of the Association, the Company will confer with
and consider the recommendations of authorized Association
representatives as to the adequacy of the parking areas and the
quality of security measures at Company lots in which pilots park
their automobiles at domiciles except as provided in Section
10(G)(6). At the pilot's option, the Company shall provide monthly
parking for one (1) vehicle at a TWA domicile, or reimburse the
pilot for parking at any station (receipts required), not to
exceed the amount paid for one (1) vehicle at the STL domicile.
(I) The Company will furnish, on magnetic or electronic media, a list
of the earning codes and a roster of pilots' earnings for the
previous year to the Association prior to February 1st of each
year for the purpose of the Association determining the members'
annual dues.
(J) Neither the Company, its officers or agents, nor the Association,
its officer or agents, or any employee covered by the Agreement,
shall unlawfully discriminate against any employee or member on
account of race, color, religion, national origin, sex, handicap
or because the employee or member is a Vietnam era/disabled
veteran.
(K) Any pilot shall have the right to review his/her personnel file
during normal office hours. No reasonable request(s) by the pilot
for copies of any documents in his/her personnel file will be
refused. The pilot shall be copied on any derogatory information
added to his/her personnel file. The Company and the pilot shall
be responsible for ensuring that no disciplinary or derogatory
13
<PAGE>
<PAGE>
SECTION 2(K), cont.
information as to matters other than operating competency remain
in the pilot's file for a period exceeding three (3) years.
Disciplinary or derogatory records in the pilot's personnel file
which are more than three (3) years but less than five (5) years
old will be transferred and maintained in a separate file
(hereafter the "Pilot Records Act file") from the pilot's
personnel file. "Disciplinary records" means records of Company
actions which were the subject of an investigation under Section
21(A) of this Agreement. The Company and the pilot shall be
responsible for ensuring that no disciplinary or derogatory
records more than five (5) years old and no record of disciplinary
actions which were subsequently overturned are kept in the Pilot
Records Act file. By appointment, documents in the Pilot Records
Act file will be available for inspection and copying by the
active pilot, but shall not be accessible to domicile flight
operations personnel and shall not be used or considered in any
subsequent disciplinary action.
Pilot initiated grievance-related materials developed pursuant to
Section 21(B) shall not be placed in such pilots' personnel file.
All information relevant to the Pilots Records Improvement Act of
1996 shall be expunged not later than five (5) years from the
separation of a pilot from the Company. If any disputes between
the Company and the pilot arises about any inaccuracy, such
dispute shall be subject to binding arbitration at the pilot's
expense.
(L) All notifications to pilots involving a change in base station
assignments, temporary assignments to another domicile,
promotions, demotions, furloughs and leaves of absence shall be
stated in writing.
(M) If a pilot on vacation or leave not exceeding forty-five (45)
days, so requests in writing, the Company will notify the pilot by
certified letter, return receipt requested, if he/she is to be
displaced; provided, that such pilot at time of making such
request gives the Company an address to which such notice is to be
sent. Posting of the certified letter by the Company will be
conclusive evidence that notice has been given.
(N) The wearing of beards or other facial hair, with the exception of
neatly trimmed and maintained sideburns or mustaches is
prohibited.
(O) Each calendar year the Master Chairman of the TWA Pilots Master
Executive Council will be authorized nine thousand (9000) hours of
flight pay loss caused by pilots being on ALPA business, including
mutually beneficial projects/committees; exclusive of schedule
committee members covered under Section (10)(B)(5). Such nine
thousand (9000) hours shall be paid to the designated pilots by
the Company but not billed to the Association.
(P) The MD8/DC9 ice check shall be accomplished by properly trained
and certified TWA personnel other than an operating pilot
crewmember at stations staffed with TWA ramp servicemen and/or TWA
mechanics.
14
<PAGE>
<PAGE>
SECTION 2(Q)
(Q) Each TWA pilot shall be authorized a minimum of one hundred (100)
daily "JX" transactions on home access to the CAMS system. The
Company shall provide a toll free number for domestic telephone
communications with CCS.
(R) A pilot shall receive, upon his/her request, a readable copy of
his/her training records which are maintained in the Company's
Crew Administrative Management System (CAMS). The records to be
provided are those currently accessible by using the following
CAMS transactions:
JXQI REGNUM FCQ
JXQI REGNUM INV EQP STS
JXTL REGNUM EQP STS
Copies of the foregoing CAMS training records shall be provided
along with a cover letter which identifies the records attached to
it and includes a key to the codes used in the records. Each copy
of the training record shall be dated and signed by a duly-
authorized employee of Flight Operations Department to
authenticate it as a true copy of the records maintained by TWA in
CAMS. The Company will place a legal disclaimer containing wording
of its choice on the cover letter and on each page of the copy of
the training record.
(S) Captains shall be granted Ambassador Club privilege cards.
(T) The Company shall provide ALPA airport office space comparable to
that currently utilized by the Association at each domicile where
such airport facilities currently exist.
(U) The Company shall withhold all state income taxes associated with
a pilot's state of legal residence, as filed on his/her federal
W-4 form.
(V) A pilot eligible for vacation under Section 14 shall be entitled
to three (3) calendar days off per calendar year for Urgent
Personal Business. Such days shall be paid and credited in
accordance with Section 14(C) for a bid or reserve pilot and shall
be deducted from the pilot's vacation entitlement for the current
year.
If the pilot's current year vacation entitlement is less than the
Urgent Personal Business debit and/or is exhausted, the pilot's
accrued vacation entitlement will be debited for any resulting
shortfall.
(W) The Company may back date a pilot's written resignation only for
just cause.
15
<PAGE>
<PAGE>
SECTION 3
TRANSPORTATION
(A) Pilots will be afforded free and reduced fare transportation as
established by Company policy on the date of signing of this
Agreement which will not be changed or discontinued during the
term of this Agreement without first giving the Association thirty
(30) days notice of the reason therefore and affording the
Association an opportunity to confer with the Company.
The Company's policy as regards free and reduced fare
transportation for pilots on Medical Leave and for the surviving
spouse of a deceased pilot shall not be more restrictive than
required by federal law.
(B) A pilot retired in accordance with the terms of this Agreement or
government regulation will be afforded free and reduced fare
transportation as established by Company policy on the signing
date of this Agreement; provided that such privileges shall not be
more restrictive than those provided on page 13.13.01 dated
November 20, 1969, in the Company's Management Policy and
Procedure Manual (provided Federal Law Permits).
(C) A pilot shall be afforded ACM privileges upon date of hire in
accordance with the following:
(1) Such ACM privilege shall have a lower priority than other
Company business.
(2) Priority for this ACM will be determined on the basis of the
pilot's seniority number, up to one (1) hour prior to the
scheduled departure time of the flight. Thereafter and until
the flight departs, such ACM priority for any vacant ACM
seat will be determined on a first come, first serve basis.
A TWA pilot exercising his/her ACM privilege must personally
list himself/herself electronically via a CAMS entry at the
airport of departure if earlier than one (1) hour prior to
the scheduled departure time of the flight. Within one (1)
hour of the scheduled departure time of the flight, a TWA
pilot may list either electronically via a CAMS entry at the
airport of departure or on the appropriate ACM sign-in sheet
at the departure gate. However, the TWA pilot using
electronic sign-in shall have priority. The operating
Captain of the flight shall have overall authority with
regard to any question of priority.
(3) In addition to the above, an "operations ACM form" shall be
personally completed by a pilot prior to exercising the ACM
privileges provided in this Section no earlier than two (2)
hours prior to scheduled flight departure. The pilot shall
indicate on such form: name, seniority number, payroll
number, domicile, crew position, flight number and date,
point of departure and destination.
(4) A pilot exercising ACM privileges under this Section shall
ride in the cabin if a seat is available. Further, such
pilot shall not be subject to displacement from the flight
by a similar category ACM at stations en route to the
pilot's originally indicated destination.
(D) The Captain of TWA flights shall have the authority to grant ACM
jumpseat privileges to qualified non-TWA active pilots who are
employed by carriers listed on TWA's FIP/17 list of approved
carriers. A pilot from a carrier on TWA's FIP/17 list exercising
16
<PAGE>
<PAGE>
SECTION 3(D), cont.
his/her ACM privilege must personally list himself/herself on the
appropriate ACM sign-in sheet at the departure gate, noting the
date and time of sign-in. These ACM/jumpseat privileges shall be
available on all TWA route segments including international
flights. Such privileges shall be subject to applicable laws and
regulations. Non-TWA pilots will be subject to all TWA regulations
and procedures governing non-revenue travel. The priority for use
of the jumpseat by non-TWA pilots, as described above, shall be
after TWA and/or non-TWA authorized personnel have been
accommodated.
(E) ACM dress code shall be business-casual attire.
(F) Pilots assigned to training away from their domicile will receive
a round-trip Class B pass for travel to and from the place where
training is conducted.
(G) Employees who voluntarily terminate or retire at age forty-five
(45) with a minimum of fifteen (15) years of service will be
provided with a calendar year complement of six (6) Class 9 adult
trip passes and three (3) Class 9 children trip passes. Employees
who retire will also be entitled to receive unlimited reduced
rates. However, employees who voluntarily terminate will be
entitled to unlimited reduced rates on TWA and will receive
reduced rates on other airlines only to the extent such is
authorized by appropriate interline agreements between the Company
and other airlines.
(H) New hire pilots shall be eligible to receive up to five (5) class
8 round trip passes while completing initial ground school and
simulator training (prior to initial line qualification) for the
purpose of visiting their home while on days off subject to the
following:
(1) The pass(es) may be utilized only by the new hire pilot.
(2) Each class 8 pass is subject to all normal service charges
and applicable surcharges.
(3) The pass(es) shall be issued using the most direct routing
between the location where the new hire pilot is receiving
initial ground school or simulator training and the TWA
airport nearest the pilot's home.
(4) Eligibility for use of any other personal passes (non-
business) by the pilot and/or the pilot's dependents shall
be subject to the six (6) month waiting period.
(I) The Company shall issue Class 3 passes to the following pilots:
- MEC Master Chairman
- MEC Vice Chairman
- MEC Secretary-Treasurer
- MEC Members
- Negotiating Committee
- Executive Director of TWA Pilot's 401/K Directed Account
- Investment Committee - System Board Members and 3 alternates
- System Grievance Chairman
Such class 3 passes shall be used for Association business.
17
<PAGE>
<PAGE>
SECTION 3(J)
(J) The Company shall issue Class 5 passes to the following pilots:
- Governmental Affairs Committee Chairman
- Housing / Crew Facilities Committee
- Pilot Training Board
- ALPA Accident Investigating Committee Chairman
- Central Air Safety Committee Chairman
Such class 5 passes shall be used for Association business.
However, when used for TWA-ALPA business, such passes shall be
first class, space available (FCSA).
(K) The Company shall issue Class 5 passes to ALPA's TWA assigned
Contract Administrators. Such Class 5 passes shall be used for
Association business.
(L) Effective January 1, 2000, a pilot's father-in-law and mother-in-
law shall be afforded access to purchase up to eight (8) I.D. 90
tickets in a year for travel on TWA provided that such pilot's
pass allotment benefit includes eligible dependent children.
18
<PAGE>
<PAGE>
SECTION 4
COMPENSATION
(A) Captains
(1) Composite Pay
Effective as indicated below, a Captain shall receive
composite pay for time credited for pay purposes, as
provided in (F)(1) of this Section, in accordance with the
Captain's total service with the Company as a flight deck
crew member, as follows:
(a) Small Widebody.
<TABLE>
<CAPTION>
Effective:
9/01/98 3/02/99 9/01/99 9/01/00 9/01/01 8/01/02
<S> <C> <C> <C> <C> <C> <C>
2nd Year 94.80 97.59 101.90 110.29 120.67 132.90
3rd Year 95.62 98.43 102.78 111.24 121.71 134.04
4th Year 106.56 109.69 114.54 123.97 135.63 149.38
5th Year 107.48 110.65 115.53 125.05 136.81 150.68
6th Year 108.59 111.78 116.72 126.33 138.22 152.23
7th Year 109.84 113.08 118.07 127.79 139.82 153.99
8th Year 110.75 114.01 119.05 128.85 140.98 155.26
9th Year 111.14 114.41 119.47 129.31 141.47 155.81
10th Year 112.42 115.73 120.84 130.79 143.09 157.60
11th Year 112.70 116.01 121.14 131.11 143.45 157.99
12th Year 112.97 116.30 121.43 131.43 143.80 158.37
13th Year 114.71 118.08 123.30 133.45 146.01 160.81
14th Year 115.64 119.04 124.30 134.53 147.19 162.11
15th Year 116.58 120.01 125.31 135.63 148.39 163.43
</TABLE>
(b) Narrowbody.
<TABLE>
<CAPTION>
Effective:
9/01/98 3/02/99 9/01/99 9/01/00 9/01/01 8/01/02
<S> <C> <C> <C> <C> <C> <C>
2nd Year 88.41 91.13 94.68 100.77 108.79 117.07
3rd Year 89.23 91.97 95.55 101.69 109.79 118.15
4th Year 99.55 102.61 106.61 113.46 122.50 131.82
5th Year 100.49 103.58 107.62 114.53 123.66 133.07
6th Year 101.57 104.68 108.77 115.75 124.97 134.49
7th Year 102.81 105.96 110.10 117.17 126.50 136.13
8th Year 103.73 106.92 111.09 118.22 127.64 137.36
9th Year 104.49 107.70 111.90 119.09 128.57 138.36
10th Year 105.47 108.71 112.95 120.21 129.78 139.66
11th Year 105.79 109.03 113.29 120.56 130.17 140.08
12th Year 106.11 109.37 113.63 120.94 130.57 140.51
13th Year 107.84 111.15 115.48 122.90 132.69 142.79
14th Year 108.78 112.12 116.49 123.97 133.85 144.04
15th Year 109.73 113.10 117.51 125.06 135.02 145.30
</TABLE>
19
<PAGE>
<PAGE>
Section 4(A)(2)
(2) International Override
The override for each hour credited under (F)(1) of this Section
shall be as follows:
September 1, 1998 $6.20
September 1, 1999 6.40
September 1, 2000 6.60
September 1, 2001 6.80
August 1, 2002 7.20
(B) First Officer and Flight Engineer
(1) Pilots with less than one (1) year of service.
(a) Monthly Salary
A pilot who has completed less than one (1) year of
service with the Company as a flight deck crew member
shall receive a monthly salary as specified below and
an hourly rate, if applicable, in accordance with
Section 4(B)(1)(b).
September 1, 1998 to June 30, 2000: $2500.00
July 1, 2000 to March 01, 2002 $2575.00
March 2, 2002 and thereafter: $2675.00
(b) Hourly Rate
(i) Bid Run Holders
Time credited above seventy-five hours (75:00)
(as provided for in (F)(1) of this Section)
shall be paid according to the following hourly
rate:
September 1, 1998 to June 30, 2000: $33.33
July 1, 2000 to March 01, 2002 $34.33
March 2, 2002 and thereafter: $35.67
(ii) Reserve Schedule Holders
A reserve schedule holder with less than one (1)
year of service as a pilot shall be paid the
hourly rate indicated in Section 4(B)(1)(b)(i)
above for time credited in excess of seventy-
five hours (75:00) and any additional flying
performed and/or trips obtained and flown via
OFR.
(2) A First Officer or Flight Engineer who has completed one (1)
year of service with the Company as a flight deck crew
member, shall be paid a percentage of the total pay of a
Captain, as set forth in (A) above:
20
<PAGE>
<PAGE>
Section 4(B)(2), cont.
<TABLE>
Percentage of Captain's Pay
<CAPTION>
Year F/O F/E
---- --- ---
<S> <C> <C>
2nd 50% 50%
3rd 60% 60%
4th 61% 60%
5th 62% 60%
6th 63% 60%
7th 64% 60%
8th 65% 60%
9th 66.5% 60%
10th 67% 60%
11th 67.5% 60%
12th 68% 60%
13th 68.2% 60%
14th 68.3% 60%
15th 68.4% 60%
</TABLE>
(C) Minimum Guarantees
(1) A pilot who has completed one (1) year of service with the
Company as a flight deck crew member, shall receive as a
minimum guarantee for each full bid month of service,
composite pay, at his/her applicable rates of compensation
set forth in this Agreement as follows:
<TABLE>
<CAPTION>
Reserve Schedule Holder
Effective: Bid Run Holder Reserve Officer
---------- -------------- ---------------
<S> <C> <C>
September 1, 1998 72 hours ALV minus 3 hours,
not less than 72 hours
September 1, 1999 73 hours ALV minus 3 hours,
not less than 73 hours
September 1, 2000 74 hours ALV minus 3 hours,
not less than 74 hours
September 1, 2001 75 hours ALV minus 3 hours,
and thereafter not less than 75 hours
</TABLE>
The guarantee of a pilot in International Operations shall
include International Override (A)(2) above, except as
provided in (C)(2) below.
The guarantee for a pilot with less than one (1) year of
service as a flight deck crew member shall be seventy-five
hours (75:00).
(2) In the event a pilot is on both the Domestic and
International Operations during a month, the pilot's
guarantee shall be prorated based on the actual hours
performed on each operation, except that:
21
<PAGE>
<PAGE>
Section 4(C)(2), cont.
(a) All pilots holding equipment reserve shall be on an
international guarantee, if qualified.
(b) A pilot who is involuntarily balanced on the other
operation shall not have his/her guarantee prorated.
(c) A reserve for narrowbody operations shall receive an
international guarantee provided one (1) or more
international flights are flown within the bid period.
This international guarantee shall be compared to
actual services performed and the pilot shall be paid
based upon the greater amount.
(3) When a Captain flies more than one (1) type of equipment
during a bid month as a Captain, his/her monthly guarantee
shall be prorated on the basis of the ratio of hours flown
on each such type of equipment to the total hours flown in a
month as Captain.
(4) In the event a pilot changes categories during a month which
results in the pilot moving from one major pilot status to
another (such as First Officer to Captain), the pilot's
guarantee shall be prorated as in (C)(2) & (C)(3) above.
(5) In the event that the number of hours of a pilot's monthly
minimum guarantee is changed during a bid month, the pilot
shall be considered to have been on the guarantee of the
greater number of hours for the entire month, subject to the
provisions of (C)(1), (C)(2) and(C)(4) of this Section.
(6) The provisions of (C)(3) above shall be applicable in a
comparable manner to any pilot in a bid status other than
that of Captain.
(D) Training Pay
(1) When a pilot with less than one (1) year of service with the
Company as a flight deck crewmember receives any training,
the pilot shall be paid in accordance with Section 4(B)(1)
and credited in accordance with 4(D)(2)-(6).
(2) An initial/upgrade Captain/First Officer who has completed
one (1) year of service with the Company as a flight deck
crew member, starting in ground school and continuing
through completion of initial operating experience or until
the effective date of his/her new category bid (whichever is
later), will receive a guarantee equal to the average line
value and composite pay rate of his/her current category bid
award (i.e. First Officer or Flight Engineer).
(3) For each day of Initial Operating Experience/Evaluations a
pilot shall receive pay and credit the greater of Fixed
Daily Rate (FDR) or services performed as calculated in
accordance with Section 11. Further, a pilot who is line
qualifying while performing as an operating member of the
crew but is on board as an ACM shall receive pay for the
services performed and two hours thirty minutes (2:30)
credit for each day of line qualification.
22
<PAGE>
<PAGE>
Section 4(D)(4)
(4) Notwithstanding the above, for each day of "Continuing
Qualifications Training" (CQT), bid run and reserve pilots
shall receive pay and credit of Fixed Daily Rate. Further,
bid run holders who are assigned CQT training in the instant
month by the Company after the close of bids (which occurs
in the previous month) will receive pay and credit based on
the greater of trips missed or Fixed Daily Rate.
(5) In accordance with Section 6(A)(4), a pilot, except an
initial/upgrade Captain/First Officer, who is benched
between the effective date of his/her new category bid and
the commencement of his/her training necessary to fulfill
such bid, will receive a guarantee equal to the average line
value and pay rate of his/her new category. The guarantee
and pay rate of an initial/upgrade Captain/First Officer who
is benched shall be the same as his/her category immediately
preceding the effective date of his/her initial/upgrade
category bid award.
Alternatively, a pilot who has not commenced the necessary
training prior to the effective date of his/her new category
bid may be utilized by the Company in his/her previous
category. Such pilot, except an initial/upgrade
Captain/First Officer, will receive a guarantee equal to the
average line value and composite pay rate of his/her
previous category or new category, whichever is greater. The
guarantee and composite pay rate of an initial/upgrade
Captain/First Officer who is utilized shall be the same as
his/her category immediately preceding the effective date of
his/her initial/upgrade category bid award.
The provisions of this paragraph (D)(5) shall not apply to a
pilot whose failure to commence training is a result of
his/her unavailability for training (i.e. sick leave, urgent
personal business, absent without pay, military leave). Such
pilot shall be paid in accordance with paragraph (F)(8)
below.
(6) Except as provided above, for each day of training a pilot
shall receive pay and credit of FDR in accordance with
his/her current category bid award.
(E) Vacation Pay.
For each day a pilot is on vacation, he/she shall be paid the FDR
at the hourly rate determined by such pilot's mock category bid
award for a full month vacation, or by his/her actual category bid
award for partial month vacation.
(F) General
(1) The time credited for composite pay purposes shall be that
time credited the pilot under Section 11(A)(7), except that
in making the calculation for this purpose, deadhead time
due under Section 8 shall be included in making the
computation specified in Section 11(B).
(2) Except as provided elsewhere in this Agreement, for purposes
of determining composite pay when a change in calendar date
occurs enroute, only that actual time flown prior to the end
of the bid month in which the flight originated will be
credited for pay purposes for that month. The time for
23
<PAGE>
<PAGE>
Section 4(F)(2), cont.
changing the month shall be that of the zone of the station
of last take off.
(3) The appropriate pay rates contained in this Section will
apply to pilots flying only the equipment defined by
Sections 31(X) and 31(FF).
(4) If the Company places new equipment into operation, other
than as defined by Sections 31(X) and 31(FF), the Company
shall be bound by the relationship of the Company's current
pilot wage scale and the average wage paid by Alaska,
America West, American, Continental, Delta, Northwest,
United and/or US Airways ("OALs") for the new equipment in
effect on the date of service. The new wages will be
commensurate to the Company's current wage scale for the
other equipment on the property. In the event the new
equipment is not flown by the carriers listed, the pay rate
for such equipment will be based on the equipment utilized
by the carriers which is of equivalent weight to the new
equipment.
For example, if the average pay of the OALs is $150 for a
top of the scale Captain on the new equipment and TWA's
current scale is 85% of the OAL's average pay for the other
equipment on the property, the new wage for such pilot will
be $127.50 ($150 x 85%).
In addition, the current rules and working conditions shall
apply to the new equipment.
(5) In the event of a merger between TWA and another carrier,
the rates of pay next to become effective, or the rates of
the merger partner, whichever is greater, will become
effective the day immediately preceding the actual merger.
(6) When a pilot in a category does no flying during a month in
which he/she is entitled to a guarantee, such guarantee rate
will be based on the pilot's current category bid.
Determination of operation, and line or reserve, will be
based on the pilot's mock bid award.
(7) A pilot who is changing categories and who does no flying in
the month in the new category will have his/her guarantee
based on the new bid category on the effective date of such
bid, except as otherwise provided in this agreement
(initial/upgrades).
(8) A pilot who is unavailable for training for his/her new
category bid due to personal reasons (i.e. sick leave,
urgent personal business, absent without pay, military
leave) will be category changed as follows:
(a) A pilot who acquires a higher category bid will be
category changed on the effective date of the bid or
upon commencement of training, whichever is later.
(b) A pilot acquiring a bid in a lower category will be
category changed on the effective date of the bid.
This paragraph will be applied except in those cases
where the bid has been deferred.
24
<PAGE>
<PAGE>
SECTION 5
MISCELLANEOUS PAY RULES
(A) When the least senior pilot is assigned to a temporary vacancy by
the Company as a result of the application of Section 19(F)(1)(a),
the pilot's pay for the month(s) in which he/she is so assigned
shall be the greatest of the following:
(1) If the pilot is a bid run holder, the pilot's monthly bid
award ALV minus two (2) hours, including international
override if applicable; or
(2) If the pilot is a reserve schedule holder, the pilot's
reserve guarantee, including international override if
applicable; or
(3) The amount actually earned for services performed.
Composite pay will be computed at the applicable rate for the
pilot's normal category bid award if the pilot had not been so
assigned.
(B) If the Company does not post the bulletin provided for in Section
19(C), at least seven (7) days prior to the effective date of a
displacement, at least seven (7) days will be allowed for pilots
to bring their displacement preference up to date. For the period
from effective date of displacement until the end of the seven (7)
day bulletining period, the displaced pilot will be considered to
be a reserve schedule holder in the category from which the pilot
was displaced for flight assignment and pay guarantee purposes.
(C) When a pilot serves on a charity, promotional or new Captain solo
flight in a status other than the pilot's normal bid status, at
his/her own request and with the approval of the Company, the
pilot shall receive pay and flight time credit on the basis of the
pilot's normal bid status or the status in which the pilot serves
on the flight, whichever is lesser.
(D) On each scheduled, charter and extra section flight, a pilot will
be assigned to serve as Captain, and a pilot shall be assigned,
when required, to serve as First Officer, or as Flight Engineer.
(E) Management Pilot Flying/Pay Assignments
(1) Pay Assignments: When a qualified pilot is scheduled by the
Company for any flight defined in (D) above and is available
and is not used, and any official or employee of the Company
other than a pilot as defined in Section 31, check pilot
("LIP/LSP") or instructor pilot ("INS"), acts in place of
the pilot who was not used, the pilot's compensation at
regular rates, for such trip shall be credited and paid to
the pilot who was scheduled to have made the flight exactly
as if the pilot had flown the trip or trips (excluding non-
scheduled deadhead pay). A pilot who has not been notified
to report for a pay assignment must remain available for the
flight until sixteen hours (16:00) prior to the scheduled
departure time. When a qualified pilot cannot be scheduled
by the Company for any flight defined in (D) above or is not
available, all such flight pay and credit flown by an
official or other employee of the Company shall be handled
in the following manner:
(2) Pool Time: At the end of each calendar month all unassigned
flight pay and credits shall be totaled in each category.
25
<PAGE>
<PAGE>
Section 5(E)(2), cont.
Beginning with the most senior pilot in a category, such
pilot shall have credited to the pilot's monthly total an
amount of such flight time credit up to but not exceeding
his/her monthly bid award ALV. Any remaining flight pay
credit hours shall be credited in seniority order within the
category until all such credit hours are dissipated. When a
qualified regularly assigned pilot is removed from his/her
flight for route or equipment qualification purposes at
Company request, the above shall apply. Accounting of such
pool time will be provided to the Association at the System
Schedule Committee meeting.
(3) A pilot who has not completed one (1) year of service with
the Company as a flight deck crew member will receive only
flight time credit under the above conditions.
(4) Management pilot flying: Trips may be flown by management
pilots, after first being assigned to a bid run pilot, and
the pay assignment provisions of this Section 5(E) will be
applied. Such flying under this Section shall not be
considered additional flying.
(F) When a pilot is called to jury duty, the Company shall release the
pilot from flight duty for the duration of such jury duty. The
compensation received by the pilot for time on jury duty shall be
the Fixed Daily Rate (FDR). Such pay and credit shall not accrue,
however, so as to cause the pilot to exceed his/her average line
value.
(G) When a pilot is called to the airport for the purpose of acting as
pilot on a flight or flights and that pilot is released from duty
prior to such flight or flights he/she shall receive two (2) hours
composite pay and credit. Except for flights local in nature, when
a pilot is called to the airport for the purpose of acting as a
pilot on a flight and that flight becomes airborne and lands at an
airport other than the departure airport the pilot shall receive
pay and credit at the single duty period daily pay and credit or
the provisions of Section 11, whichever is applicable.
(H) The provisions of (A) and (C) of this Section will not apply to
training or route qualification time.
(I) The Company may schedule pilots to fly flights of a local nature
such as ferry flights at their home domicile or trip turn-around
point immediately prior to or upon completion of a regular
scheduled flight if they have been notified of such flights prior
to departing their previous station. In such cases when
notification is not practical or possible, each pilot shall have
the option to decline such ferry flight. This paragraph shall not
apply when completing interrupted flights, evaluation flights, or
operating experience flights.
(J) "Composite Pay" replaces flight pay and longevity pay for all
purposes under this Agreement.
(K) (1) The following definitions shall apply for purposes of this
5(K).
(a) "Premium Pay" means the pay a pilot receives for the
activities listed in paragraph (2) below. The Premium
pay amount is to be calculated by the given fixed pay
26
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<PAGE>
Section 5(K)(1)(a), cont.
factor as listed in paragraph (2) below, multiplied by
the pilot's category pay rate, multiplied by each hour
of such activity (as determined by the application of
Section 11). (I.e., pay factor X category pay rate X
hours = premium pay).
(b) "Deferred Vacation" means the number of vacation days
rescheduled under Section 14(E)(5).
(2) Premium Pay shall apply as follows:
Activity Pay Factor
---------------------------------------------------
(a) Draft Flights 1.5
(b) Deferred Vacation 1.2
(L) In the calculation of pay for each single training assignment away
from domicile, a pilot shall receive two hours thirty minutes
(2:30) composite pay (no flight time credit) as compensation for
reporting to such assignment. The provisions of this paragraph (L)
shall not include a training assignment in which the pilot departs
from and returns to his/her domicile for training at another
location, unless the pilot is released for rest at such other
location.
27
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<PAGE>
SECTION 6
TRAINING AND QUALIFICATIONS
(A) GENERAL
(1) Training Assignments
(a) A pilot shall be required to enter training and/or
checking to attain, regain or maintain qualifications.
(b) To the extent possible all training, as a result of a
category bid, shall be in system seniority order.
(c) The Company will maintain a program for the training
of Captains, First Officers and Flight Engineers and
will provide such training to pilots who have been
awarded a category bid in accordance with all of the
provisions of Section 19, provided the pilots meet
minimum regulatory qualifications for the training.
The Company may require additional qualifications and
will provide training for such additional
qualifications provided the pilots meet all other
regulatory requirements for such additional
qualifications. At no time will the Company be
required to provide aircraft flight training.
(2) Notification and Logistics
(a) Each pilot who is scheduled for training shall be
notified by the Company, via the pilot's JXCAP and the
TWACREW website, of the beginning and projected
completion of any training and/or checking
requirements. In addition, for informational purposes
only, line familiarization/line qualification
completion dates will be projected.
(b) Except for Continuing Qualification Training (CQT), no
pilot shall be required to attend any training and/or
checking course with less than fourteen (14) calendar
days notice. If a pilot is assigned training with less
than fourteen (14) calendar days notice, he/she will
have the opportunity to decline such training date
without penalty.
(c) The Company will maintain a page FIP/08 in CAMS and a
page on the TWACREW website that details training
logistics, including but not limited to hotels,
transportation, training and program identifiers, and
other mutually agreed upon information that would be
useful to a pilot who will undergo training.
(d) There shall be a written Flight Operations Training
Manual indicating all courses of training which shall
be readily available to pilots at the TWA Training
Center and TWA domiciles.
(e) In the event a pilot's training process is delayed for
reasons other than pilot unavailability, the pilot
shall not be utilized in his/her former category.
(f) The Company will designate the domicile or domiciles
at which training will be accomplished. If a pilot is
unable to train at his/her domicile, the Company will
assign the pilot to a designated domicile. If more
28
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<PAGE>
SECTION 6(A)(2)(F), cont.
than one (1) assignment is to be made for
initial/upgrade line familiarization or Initial
Operating Experience (IOE), choices of assignments to
locations will be offered in order of seniority of
those to be assigned.
(3) Daily Training/Scheduling
(a) The provisions of this Section 6(A)(3) shall apply to
required time in ground school and flight simulators
and all briefing in connection therewith; however, the
calendar day restriction of Section 6(A)(3)(e) shall
not apply to time in flight simulators in connection
with initial/upgrade training and any training course
that requires a rating qualification.
(b) All CQT assignments for monthly bidding purposes only
shall be posted in each pilot's JXCAP in accordance
with Section 9.
(c) A pilot will not be required to attend ground school
or take simulator training in excess of eight (8)
hours per day, not including a one (1) hour meal
break. The total elapsed time between the commencement
and conclusion of such eight (8) hours of training
shall not be scheduled to exceed twelve and one-half
(12 1/2) hours. A pilot shall not be required to
accept actual training duty on more than five (5) days
in any consecutive seven (7) days assigned to
training; provided, however, that the Company may
require a pilot to attend training in excess of five
(5) days in any consecutive seven (7) days in order to
make up for a holiday falling on a normal ground
school day.
(i) A pilot will be considered as assigned to
training on those days during which the pilot is
scheduled/rescheduled and/or actually attends
training, including days of rest within a single
training assignment.
(ii) A pilot shall receive sixteen hours (16:00) free
from all duty after release from training at the
pilot's domicile, or thirty hours (30:00) free
from all duty after release from training at a
point other than the pilot's domicile. Such
pilot may elect to waive all but twelve hours
(12:00) of this requirement for a duty-free
period between simulator and IOE and/or checking
provided the pilot notifies Training Support of
his/her waiver election no later than one (1)
day prior to the last scheduled simulator
period.
(iii) A pilot holding a reserve schedule shall
immediately check his/her schedule via CAMS
entry upon release from training.
(d) Pilots will not be scheduled to take flight simulator
CQT or proficiency checking after the hours of 2400
and before 0500 including any briefing time. The
29
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<PAGE>
SECTION 6(A)(3)(D), cont.
Company may extend after 2400 CQT or proficiency
checking originally scheduled to be completed at or
before 2400.
(e) Two (2) or more pilots shall not be scheduled for or
normally receive more than four hours (4:00) in the
flight simulator in any calendar day.
No individual pilot will be scheduled for a simulator
period to last longer than two hours and thirty
minutes (2:30), except that Line Oriented Flight
Training (LOFT) may be conducted in a flight simulator
provided that the period does not exceed four
hours.(4:00) There shall be a rest period of at least
fifteen minutes between flight simulator periods.
(f) A pilot assigned to flight simulator training shall
receive adequate rest before starting flight simulator
training.
(g) A pilot attending any training shall be shown a copy
of the instructor's and/or check airman's report on
his/her progress/performance, if the pilot so
requests. Each pilot attending training shall be
provided with a ALPA/TWA Training and Standards
Evaluation Form for each phase of training.
(h) Proficiency checks/evaluations in the flight simulator
shall be subject to the following:
(i) No maneuvers will be graded during a proficiency
check or CQT evaluation that are not required
and/or approved by the FAA.
(ii) Adequate time for a pilot to adapt to the
particular flying characteristics of the flight
simulator shall be given before a proficiency
check/evaluation is given in a flight simulator.
(iii) Proficiency checks/evaluations in a flight
simulator shall be given as nearly as possible
as an extension of flight simulator training, if
such training is required, and shall not be
given prior to such training.
(4) Withheld Pending Training (WPT or "Benched")
The Company may bench a pilot for the days within a bid
period between the effective date of his/her new category
bid and the commencement of his/her training necessary to
fulfill such bid. Such pilot, except initial/upgrade
Captains/First Officers, will receive a guarantee equal to
the average line value and pay rate of his/her new category.
The guarantee and pay rate of an initial/upgrade
Captain/First Officer shall be the same as his/her category
immediately preceding the effective date of his/her
initial/upgrade category award.
Alternatively, the Company may utilize a pilot who has not
commenced the necessary training prior to the effective date
of his/her new category bid. Such pilot will be utilized in
30
<PAGE>
<PAGE>
SECTION 6(A)(4), cont.
his/her previous category. In addition, such pilot, except
initial/upgrade Captains/First Officers, will receive a
guarantee equal to the average line value and pay rate of
his/her previous category or new category, whichever is
greater. The guarantee and pay rate of an initial/upgrade
Captain/First Officer shall be the same as his/her category
immediately preceding the effective date of his/her
initial/upgrade category award.
The provisions of this paragraph (4) shall not apply to a
pilot whose failure to commence training is a result of
his/her unavailability for training (i.e. sick leave, urgent
personal business, absent without pay, military leave).
(5) Interruption or Delay of Training
Subject to the Regional Chief Pilot's discretion, a pilot
may request to have his/her scheduled training interrupted
or delayed. Upon the pilot's return to work, the Regional
Chief Pilot may either reinstate the pilot to the
interrupted or delayed curriculum, subject to training
availability, or return the pilot to his/her previously held
category while awaiting reinstatement to the interrupted or
delayed curriculum, subject to seniority and satisfactory
completion of any necessary requalification training.
(6) Withdrawal From Training
A pilot who is attending any training program shall be
afforded the option to withdraw from the training curriculum
and handled in accordance with 6(C). The Pilot Training
Board will be notified of any pilot(s) exercising the
withdrawal from training option.
(7) Training Records Availability
A pilot shall receive, upon his/her request, a readable copy
of his/her training records which are maintained in the
Company's Crew Administrative Management System (CAMS). The
records to be provided are those currently accessible by
using the following CAMS transactions:
JXQI REGNUM FCQ
JXQI REGNUM INV EQP STS
JXTL REGNUM EQP STS
Copies of the foregoing CAMS training records shall be
provided along with a cover letter which identifies the
records attached to it and includes a key to the codes used
in the records. Each copy of the training record shall be
dated and signed by a duly-authorized employee of Flight
Operations Department to authenticate it as a true copy of
the records maintained by TWA in CAMS. The Company will
place a legal disclaimer containing wording of its choice on
the cover letter and on each page of the copy of the
training record.
(8) Notwithstanding the provisions of Section 2(K) the Company
shall safeguard pilot training records. In the event the
Company ceases regularly scheduled air line operations, it
will use its reasonable best efforts to provide each pilot a
31
<PAGE>
<PAGE>
SECTION 6(A)(8), cont.
copy of his/her current training records file as maintained
by the Company pursuant to regulations of the Federal
Aviation Administration, and any other applicable laws or
regulations, within five (5) business days after written
request and authorization submitted by the pilot. Further,
the Company shall provide a copy of a pilot's training file
to any third party or parties within five (5) business days
after written request and authorization submitted by the
pilot. In the event of a Chapter 7 or 11 filing under the
United States Bankruptcy Code, the Company will at all times
use its best efforts to cause these obligations to be
performed.
(9) Supplemental Instrument Procedures Training
Crew members may schedule time on the FRASCA by telephone,
for two-hour blocks based on available open slots, Monday-
Friday, 0830 to 1700 (local time). Scheduled periods for
such use are subject to cancellation by the Company if the
time is needed for unanticipated TWA Training Center
requirements.
The use of the FRASCA in this manner by any pilot is
voluntary, and pilots will not receive pay or credit for
periods of such use. Further, the Company makes no warranty
that the use of this training aid will enhance proficiency,
nor will it be deemed a substitute for any Company required
training. A pilot's use of, or failure to use, the FRASCA
under the provisions of this paragraph will not be an issue
in an arbitration or grievance proceedings concerning the
pilot's proficiency.
(10) An Advanced Qualification Program (AQP), or any similar
alternative training program, that affects extending the
elapsed time between the required simulator check(s) and/or
simulator evaluation(s) shall not be implemented without
mutual agreement between the parties. Such mutual agreement
shall not be arbitrarily withheld.
(11) The type of training and procedures for all training for
Captains, First Officers and Flight Engineers will be
established and changed as required by the Company, except
as provided for in 6(A)(10), above.
(B) INITIAL/UPGRADE TRAINING (Training and checking required to
fulfill a category bid in a new status on an equipment type upon
which the pilot may/may not have a prior qualification.)
(1) Initial/Upgrade Captain IOE/Evaluation
(a) Upon completion of ground and flight simulator
training, a pilot will, if he/she so requests, be
permitted up to thirty (30) days or up to fifty
(50:00) hours of line familiarization prior to the IOE
and check. To facilitate the accomplishment of such
line familiarization, the Company has the discretion
to do the following:
(i) Assign a pilot to bid pairings as outlined
below; or
32
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<PAGE>
SECTION 6(B)(1)(A)(II)
(ii) Assign a pilot to a bid pairing wherein the
Captain and/or First Officer is pay assigned.
During periods of line familiarization and/or required
IOE periods of initial/upgrade training, sufficient
suitable First Officer time from domicile bid pairing
selections may be assigned to a trainee each month as
is necessary to accomplish line familiarization, IOE
and check/evaluation. Such assignments shall not
result in a reduction in the number of bid run holders
at the domicile.
(b) Initial/upgrade Captains shall receive a Progress Line
Evaluation after the first twenty-five hours (25:00)
of IOE. At the completion of the Progress Line
Evaluation, the initial/upgrade Captain will be
afforded one of the following options:
(i) The pilot may be recommended for an Initial
Captain Line Check/Evaluation;
(ii) The pilot may be recommended to continue his/her
IOE;
(iii) The pilot may be recommended for additional
training, and upon satisfactory completion, will
continue the IOE; or
(iv) Subject to the Regional Chief Pilot's
discretion, the pilot may be assigned to receive
up to six (6) months or up to five hundred hours
(500:00) in the First Officer position on the
same initial/upgrade equipment type. At the
completion of this period, the pilot will
commence IOE from the beginning. The five
hundred hour (500:00) option may be recommended
by the Chief Pilot at any time during the
training program prior to commencement of the
Initial Captain Line Check/Evaluation.
(2) Initial/Upgrade First Officer IOE/Evaluation
During the first twenty-five hour (25:00) period of IOE,
Initial/Upgrade First Officers will be handled as outlined
below:
(a) The pilot may be recommended for an initial First
Officer Line Check/Evaluation;
(b) The pilot may be recommended to continue his/her IOE;
or
(c) The pilot may be recommended for additional
Proficiency Training, and upon satisfactory
completion, will continue the IOE.
33
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<PAGE>
SECTION 6(C)
(C) FAILURE TO QUALIFY
(1) General
(a) Nothing herein shall diminish a pilot's right to a
fair and adequate opportunity to complete training and
qualify for a category assignment.
(b) The Company shall immediately notify each member of
the Pilot Training Board when any pilot fails to
successfully complete any course of training. Such
pilot shall be handled in accordance with the
applicable provision of this Section 6(C).
(c) A pilot who is unsuccessful in completing a course of
training (including all required checks) shall be
deemed to have failed to qualify and shall be subject
to the provisions of Section 6(C)(1)(e) below. Such
pilot shall be handled in accordance with Sections
6(C)(2) through (5).
(d) A pilot who withdraws from training under Section
6(A)(6) above shall not be deemed to have failed to
qualify but shall be subject to the provisions of
Section 6(C)(1)(e) below. Such pilot shall be handled
as follows:
(i) All training records shall indicate that the
pilot withdrew from training without prejudice.
(ii) Such pilot shall be returned to his/her category
held prior to entering training, subject to
satisfactory completion of requalification
training and seniority permitting.
(iii) In the event the equipment to which the pilot is
to be returned is no longer available or the
pilot cannot hold such category bid in seniority
order, such pilot may elect a displacement
option under Section 19(G) to a previously held
equipment within his/her present or lower
status. Section 13 shall not apply to a pilot
who elects the displacement option under this
provision.
(iv) A pilot withdrawing from initial/upgrade
training will be subject to Section 6(C)(2)(b).
(v) A pilot withdrawing from transition/differences
training will be subject to Section 6(C)(3)(b).
(e) A pilot who has failed to qualify as provided in
paragraph (c) above and/or who exercised the
withdrawal provision of Section 6(A)(6), the sum of
which totals three (3), shall not be afforded a
further opportunity to qualify in any status on any
equipment and shall be permanently restricted to
his/her current status and equipment, subject to
satisfactory completion of requalification training
and seniority permitting.
34
<PAGE>
<PAGE>
SECTION 6(C)(2)
(2) Failure to Qualify - Initial/Upgrade Training
(a) A pilot who fails to qualify and is not subject to the
provisions of Section 6(C)(1)(e) shall be handled in
accordance with the following:
(i) Such pilot shall be returned to his/her category
held prior to entering training, subject to
satisfactory completion of requalification
training and seniority permitting; or
(ii) In the event the equipment to which the pilot is
to be returned is no longer available or the
pilot cannot hold such category bid in seniority
order, such pilot may elect a displacement
option under Section 19(G) to a previously held
equipment within his/her present or lower
status. Section 13 shall not apply to a pilot
who elects the displacement option under this
provision.
(iii) In addition, an initial/upgrade Captain may
elect to fill a permanent vacancy bid award as a
First Officer on the failed equipment, subject
to satisfactory completion of
qualification/requalification training.
(b) A pilot described in Section 6(C)(2)(a) or Section
6(C)(1)(d) who is not subject to the provisions of
Section 6(C)(1)(e) shall be eligible to bid for any
category requiring initial/upgrade training twelve
(12) months after his/her failure to qualify or
withdrawal, subject to bid vacancies being available
and seniority permitting.
(c) A pilot described in Section 6(C)(2)(b) who is awarded
a bid requiring initial/upgrade training and who again
fails to qualify shall be returned to his/her previous
category, subject to satisfactory completion of
requalification training and seniority permitting. If
this failure causes the third failure to qualify in
accordance with Section 6(C)(1)(e), the Company shall
not be required to afford a further opportunity to
qualify in a higher status on any equipment.
(d) In the event the equipment to which the pilot is to be
returned is no longer available or the pilot cannot
hold such category bid in seniority order, as provided
for in Sections 6(C)(2)(c) above, such pilot shall be
afforded the displacement prerogatives under Section
19(G) to any equipment within his/her present status
or in a lower status, if applicable. Section 13 shall
not apply to a pilot who elects the displacement
option under this provision.
(e) A pilot who fails to requalify in a previous status
and equipment under Sections 6(C)(2)(a), (c) and (d)
or who fails to qualify under Sections 6(C)(2)(a) and
(d) above will be handled under the provisions of
Section 21.
35
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<PAGE>
SECTION 6(C)(3)
(3) Failure to Qualify - Transition/Differences Training
(a) A pilot who fails to qualify and is not subject to the
provisions of Section 6(C)(1)(e) shall be handled in
accordance with the following:
(i) Such pilot shall be returned to his/her category
held prior to entering training, subject to
satisfactory completion of requalification
training and seniority permitting; or
(ii) In the event the equipment to which the pilot is
to be returned is no longer available or the
pilot cannot hold such category bid in seniority
order, such pilot may elect a displacement
option under Section 19(G) to a previously held
equipment within his/her present or lower
status. Section 13 shall not apply to a pilot
who elects the displacement option under this
provision.
(b) A pilot described in Section 6(C)(3)(a) or Section
6(C)(1)(d) who is not subject to the provisions of
Section 6(C)(1)(e) shall be eligible to bid for any
category requiring transition/differences training
twelve (12) months after his/her failure to qualify or
withdrawal, subject to bid vacancies being available
and seniority permitting.
(c) A pilot described in Section 6(C)(3)(b) who is awarded
a bid requiring transition/differences training and
who again fails to qualify shall be returned to
his/her previous category, subject to satisfactory
completion of requalification training and seniority
permitting. If this failure causes the third failure
to qualify in accordance with Section 6(C)(1)(e), the
Company shall not be required to afford a further
opportunity to qualify in a category of the same
status on any equipment.
(d) In the event the equipment to which the pilot is to be
returned is no longer available or the pilot cannot
hold such category bid in seniority order, as provided
for in Section 6(C)(3)(c) above, such pilot shall be
afforded the displacement prerogatives under Section
19(G) to any equipment within his/her present status
or in a lower status, if applicable. Section 13 shall
not apply to a pilot who elects the displacement
option under this provision.
(e) A pilot who fails to requalify in a previous status
and equipment under Sections 6(C)(3)(a), (c) and (d)
or who fails to qualify under Sections 6(C)(3)(a) and
(d) above or who possess no previous TWA status and
equipment qualification shall be handled under the
provisions of Section 21.
36
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<PAGE>
SECTION 6(C)(4)
(4) Failure to Qualify - Requalification Training
(a) A pilot who fails to qualify and is not subject to the
provisions of Section 6(C)(1)(e) shall be handled in
accordance with the following:
(i) Such pilot shall be returned to his/her category
held prior to entering training, subject to
satisfactory completion of requalification
training and seniority permitting; or
(ii) In the event the equipment to which the pilot is
to be returned is no longer available or the
pilot cannot hold such category bid in seniority
order, such pilot may elect a displacement
option under Section 19(G) to a previously held
equipment within his/her present or lower
status. Section 13 shall not apply to a pilot
who elects the displacement option under this
provision.
(b) A pilot described in Section 6(C)(4)(a) above who
fails to requalify in a previous status or equipment
or who possess no previous TWA status and equipment
qualification shall be handled under the provisions of
Section 21.
(5) Failure to Maintain Qualifications
(a) A pilot who fails to maintain qualification in his/her
present category will be allowed to return to his/her
previous category, subject to satisfactory completion
of requalification training and seniority permitting.
In the event the equipment to which the pilot is to be
returned is no longer available or the pilot cannot
hold such category bid in seniority order, such pilot
may elect a displacement option under Section 19(G) to
a previously held status and equipment. Section 13
shall not apply to a pilot who elects the displacement
option under this provision.
(b) A pilot described in Sections 6(C)(5)(a) above who
fails to requalify in his/her previous status and
equipment or who possess no previous TWA status and
equipment qualification will be handled under the
provisions of Section 21.
(D) PILOT TRAINING BOARD
(1) There shall be a Pilot Training Board (herein the "Board")
for the purpose of:
(a) Making recommendations and reviewing matters pertinent
to the training of pilots and pilot training programs.
(b) Discussing the circumstances of pilots in jeopardy of
failing to complete a course of training or of pilots
experiencing difficulty completing IOE. A course of
training is defined as a initial, transition, upgrade
or a special course of extended training.
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<PAGE>
SECTION 6(D)(2)
(2) The Board shall consist of five (5) members, two (2)
selected by the Association. Association members shall be
TWA employees familiar with pilot training. The remaining
members shall be the Director Flight Operations Training,
and the respective Regional Chief Pilots or their designees.
(3) When any pilot is in jeopardy of not completing a course of
training including IOE, or a pilot is exercising the options
under 6(A)(5) and 6(A)(6), the Company shall notify the
entire Pilot Training Board by telephone or the most
expeditious manner available. The Board members shall be
apprised of the circumstances surrounding the pilot's
difficulty so that members of the Board may review the
progress of the pilot. Based on this review Board members
may make recommendations regarding the pilot's difficulty
which are intended to facilitate the pilot's successful
completion of his/her course of training.
Further, when the Company and/or the Association is advised
that a pilot is subject to an action by the DOT/FAA/NTSB
relative to the operation of a TWA aircraft when
training/standards may be an issue, the entire Pilot
Training Board shall be notified by telephone or the most
expeditious manner available. The Board members shall be
apprised of the circumstances surrounding the pilot's
situation so that the Board may recommend appropriate
remedial measures. Such recommendation shall be considered
by the Company.
(4) The Board has no authority to alter or override the
decisions of the Managing Director Flight Operations
Training in matters relative to training, or of the Regional
Chief Pilot in matters relative to IOE.
(5) No decisions of the Board shall limit a pilot's right to
exercise his/her rights under Sections 21 and 22 of the
Working Agreement and further, any recommendation made by
the Board pursuant to three (3) above shall not be admitted
at any grievance hearing convened under these sections of
the Working Agreement.
(6) For the purposes of (D)(1)(a) above, the Board shall meet
whenever it deems necessary to resolve items brought to its
attention, but no less than twice a year on mutually
agreeable dates.
(7) If necessary, the Company agrees to make available to each
member of the Board a current Company pilot training manual.
38
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<PAGE>
SECTION 7
TRIP AND TRAINING EXPENSES
(A) DOMESTIC OPERATIONS
(1) A pilot's expense allowance while engaged in operations,
including training, away from the pilot's domicile shall be
one dollar and eighty cents ($1.80) per hour for each hour
or fraction thereof commencing at the time the pilot is
required to report at his/her domicile and continuing until
the pilot is released at his/her domicile.
(2) No expenses shall be allowed a pilot when the period of time
spent away from the pilot's base station on a flight is less
than four hours (4:00) or where a pilot leaves the pilot's
base station and returns to such base station without a
landing being made at a point other than the pilot's base
station.
(3) At all stations where a pilot is scheduled or actually lays
over, the Company will provide suitable and adequate single
rooms and transportation in accordance with the following:
(a) Crew lodging facilities will be provided in a suitable
hotel/motel of comfort and facilities comparable to
those utilized by the Company for crew layover
purposes as of October 21, 1981. Prior to the
selection or change of a layover hotel/motel by the
Company, the Association shall be given the
opportunity to inspect such facility except where
circumstances beyond the Company's control prevent
such inspection. If the Association desires that the
Company change the location of existing layover
facilities, the Association shall notify the Company
to this effect and will set forth the reasons
therefor. The Company will conduct a prompt
investigation and if appropriate action is necessary,
will correct any deterioration of service or
facilities as reported by the Association
representative(s). Additionally, the Company and the
Association shall review the suitability of hotels and
transportation then in use on a quarterly basis.
(b) A pilot scheduled to layover twenty hours (20:00) or
less (block to block) may be provided hotel
accommodations at the airport of the layover city. On
layovers of over twenty hours (20:00), a pilot shall
be provided hotel accommodations downtown unless the
parties mutually agree to an airport layover hotel.
(c) Transportation to or from hotel accommodations other
than airport hotel(s)/motel(s) will be in suitable
vehicles. When the Company provided transportation at
layover stations is not available within thirty-five
minutes (0:35) after scheduled block-in or actual
block-in of the flight, whichever is later, the crew
may utilize other means of ground transportation to
the layover hotel and shall be reimbursed for such
reasonable and actual transportation expenses on the
regular Company expense account form. The use of
alternate transportation and reimbursement therefore
shall apply when Company provided transportation is
unavailable within fifteen minutes (0:15) of the
scheduled pickup time at the layover hotel.
39
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<PAGE>
SECTION 7(A)(4)
(4) A pilot's expense allowance while assigned to any
temporary duty or assignment away from such pilot's
domicile, shall be two dollars and fifty cents ($2.50)
per hour for each hour or fraction thereof away from
his/her domicile, except that where the Company
provides suitable lodging and transportation, a
reduction to the per hour rate as prescribed in (A)(1)
above may be made.
(a) A reserve pilot will receive the applicable
hourly expense allowance beginning at 0001 of
the first day assigned to such temporary duty
except that the reserve pilot will not receive
expenses during his/her duty free days (at
home), while on sick leave (at home), any time
(after 2400 of that day) when released from such
temporary assignment or any time such pilot is
unavailable to perform the responsibilities of
such assignment.
(b) A pilot holding a bid run will receive the
applicable hourly expense rate beginning at 0001
of the day of the pilot's first actual flight
assignment and continue until midnight (2400) of
either the day such pilot is released from the
temporary assignment or that such pilot is
unavailable to perform the responsibilities of
the assignment. Any expense reimbursement for
such portion of such period shall be subject to
(E)(1) below.
(5) When a pilot is required to report for flight duty at
the pilot's domicile, to an airport in the same
geographical area as, but other than, the airport from
which the pilot's bid run operates, such pilot shall
be furnished transportation by the Company from the
regular airport to such other airport, or be paid
twenty cents ($0.20) per mile plus necessary toll fees
to drive the pilot's personal automobile between such
airports; or when the pilot drives from the pilot's
home to an airport other than the one from which the
pilot's bid run operates, the pilot shall be paid
transportation expenses as indicated above for the
miles in excess of the distance from the pilot's home
to the pilot's regular airport. When a pilot lands at
the pilot's domicile, at an airport in the same
geographical area as, but other than the airport from
which the pilot's bid run operates, the Company shall
provide return transportation to the departure airport
at no out of pocket expense to the pilot. Expenses
hereunder shall be in addition to those provided in
(A)(1) above and compensation provided in Section 8
where such is due. In the event a pilot crew
originates its trip at one airport and terminates at
another airport at its domicile, on a scheduled basis,
said pilot crew will be furnished direct one-way
transportation, or in the alternative, if the Company
shall so elect, will be paid the actual expense of
such transportation one-way between the terminating
and originating airports. For the purpose of this
provision the pilot crew will be treated as a unit.
40
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<PAGE>
SECTION 7(B)
(B) INTERNATIONAL OPERATIONS
(1) When a pilot in International Operations is on a trip away
from his/her domicile on Company business, as in (A)(1)
above, the following shall apply:
(a) At all stations where a pilot is scheduled or actually
lays over, the Company will provide suitable and
adequate lodging and transportation. Additionally, a
pilot's expense allowance while engaged in operations
away from domicile shall be two dollars ($2.00) per
hour for each hour or fraction thereof while away from
domicile.
(b) Crew lodging facilities, as in (B)(1)(a) above will be
selected from a list of first class hotels mutually
agreed upon by the Company and the Association, and
further, any such hotel selected shall be subject to
inspection by the Association representative(s) as to
suitability of accommodations prior to the Company
contracting for such hotel. A copy of such hotel
contract shall be provided to the Association
representative(s). Should either the Company or the
Association desire to change the location of existing
layover facilities, the parties shall consult for the
purpose of reaching agreement on mutually acceptable
facilities unless conditions and circumstances beyond
the Company's control preclude such agreement. Prompt
investigation will be made and appropriate action
taken by the Company to correct any deterioration of
service or facilities as reported by the Association
representative(s). Transportation to or from hotel
accommodations located more than five (5) miles from
the airport will be in vehicles of a type mutually
agreed to by the Company and the Association
representative(s).
(c) When the Company does not provide such facilities as
outlined above, reasonable actual expenses will be
allowed therefor.
(2) A pilot's expense allowance while assigned any temporary
duty or assignment away from such pilot's domicile, shall be
two dollars and fifty cents ($2.50) per hour for each hour
or fraction thereof away from his/her domicile except that
where the Company provides suitable lodging and
transportation, a reduction to the per hour rate as
prescribed in (B)(1) above may be made. If such assignment
is outside the continental limits of the United States, the
provisions of (B)(1) above shall apply except that the per
hour expense rate shall be two dollars ($2.00).
(3) At newly established layover stations, before any
arrangements are made or allowances for lodging,
transportation, meals, laundry, tips, and miscellaneous
expenses are established, the Company will consult with the
pilot representative(s) affected, and will put the
reasonable recommendations of such representative(s) into
effect if at all practicable.
41
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<PAGE>
SECTION 7(C)
(C) DOMICILE TRAINING EXPENSES
(1) A pilot assigned to training at the pilot's domicile
(excluding completion of recurrent training bulletins,
viewing of route qualification films, and attendance at
special domicile meetings) shall receive twelve hours
(12:00) expenses at the hourly rate provided in paragraph
(A)(4) of this Section for each day of such training.
(2) A pilot who bids or is displaced to another domicile and who
is in training in the new domicile to fulfill that bid after
the effective date of the bid award, shall receive training
expenses and hotel accommodations in accordance with (D)
below, until such time as the pilot is released for line
training.
(D) TRAINING EXPENSES AWAY FROM DOMICILE
A pilot's expense allowance while assigned to the Company's
training school (if at a location other than the pilot's domicile)
shall be one dollar and eighty cents ($1.80) per hour or fraction
thereof away from such domicile. The Company shall provide
suitable and adequate single rooms as provided in (A)(3)(a) for a
pilot training away from the pilot's domicile. In addition the
Company shall reimburse each pilot for transportation expenses
from the airport to the hotel and return for each training
assignment. This reimbursement shall not exceed the roundtrip rate
for taxi/limousine that serves these facilities. No such
reimbursement need be made if transportation is furnished by other
means (e.g. a crew lodging facility courtesy car). Any expense
reimbursement for such portion of such period shall be subject to
(E)(1) below.
(E) GENERAL
(1) In addition to the provisions of paragraphs (A) and (B) of
this Section the Company may allow additional expenses
covering any extraordinary conditions.
(2) The hourly expense allowances under this Section are
intended to reimburse pilots for only reasonable actual
expenses.
(3) A pilot shall be allowed to submit Company related (800)
number phone fees on his/her expense report.
42
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<PAGE>
SECTION 8
DEADHEAD TIME
(A) When a pilot, who has completed one (1) year of service with the
Company as a flight deck crew member, deadheads on a flight or
part thereof, to or from protecting a flight, such pilot shall
receive full pay, full credit for each hour of such deadhead time.
Pay will be based on the pay rates of the equipment used on the
flight protected. Deadhead pay rates and credit under this Section
will be prorated where periods of less than an hour are involved.
(B) When deadheading is by surface transportation, it shall be paid as
indicated above on the basis of scheduled flight time between the
points.
(C) Movement between the following airports by surface transportation
for the purpose of taking out a flight or returning from a flight,
will not be considered as deadhead time. Each pilot shall be
compensated for such movement, at the pilot's domicile only, at
$2.50 per hour.
Between Normal Travel Time
------- ------------------
Newark LaGuardia 1:15
Newark Kennedy 1:30
LaGuardia Kennedy :45
Kennedy Islip 1:00
San Francisco San Jose 1:00
San Francisco Oakland 1:00
Los Angeles Ontario 2:15
Los Angeles Long Beach :40
Los Angeles Burbank 1:15
Los Angeles Santa Ana 1:30
The travel time provided in this paragraph (C) shall be considered
as an extension of the trip hours and on-duty provisions of
Section 11.
(D) Prior to initiation of operations from airports other than those
listed in paragraph (C) above, the Company shall consult with the
Association for the purpose of establishing travel times and
transportation arrangements pertinent to such operation.
(E) A pilot scheduled to complete a flight assignment by deadheading
from another station to such pilot's domicile shall be permitted
to proceed directly to a location other than the pilot's domicile
providing that prior to departing such other station, the pilot
shall obtain approval from the appropriate planning authority.
Such approval shall not be arbitrarily withheld. However, when
crew rest is scheduled prior to deadheading return to domicile,
43
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<PAGE>
Section 8(E), cont.
the pilot shall not depart the station before the termination of
such rest period. Class B travel is authorized to any TWA station
provided that such travel is completed on the same day as the
deadhead return to domicile.
When a pilot elects to utilize the provisions of this paragraph,
expenses shall terminate at the block-out time of the flight upon
which the pilot normally would have deadheaded to the pilot's
domicile.
(F) A pilot scheduled to begin a flight assignment by deadheading from
the pilot's domicile to another station to originate a flight,
shall be permitted to proceed directly to the other station to
originate the flight providing that prior to departing for such
other station, the pilot shall obtain approval from the
appropriate scheduling authority and his domicile. Such approval
shall not be arbitrarily withheld. The pilot shall bear the
responsibility of reporting for the originating flight in
sufficient time but in no case less than one hour (1:00) prior to
scheduled departure. A pilot shall be responsible to ensure that
he/she has reviewed all pertinent safety material prior to flight
assignment. Notification of pilot direct reporting will be via the
designated CAMS entry. Class B travel is authorized to any TWA
station provided that such travel is completed on the same day as
the deadhead to begin a flight assignment.
When a pilot elects to utilize the provisions of this paragraph,
expenses shall begin at the block-in time of the flight upon which
the pilot normally would have deadheaded from his/her domicile.
(G) When utilizing the provisions of Sections 8(E) and/or (F), a pilot
shall be deemed to have actually performed the deadhead assignment
as scheduled for the following purposes: 1) Duty time
limitations; 2) Flight time limitations; 3) Flight time pay; and
4) Flight time credit as provided in Sections 8, 10, and 11 of
this Agreement.
44
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<PAGE>
SECTION 9
SCHEDULING POLICY
The scheduling of pilots out of each domicile shall be in accordance
with seniority and category.
Since all situations cannot be covered, any question of interpretation
should be brought to the attention of the Regional Chief Pilot. If such
an interpretation does not satisfy the pilot involved, such pilot shall
nevertheless follow the instructions received from the Regional Chief
Pilot and then may present a summary of the incident to his/her Domicile
Schedule Committee Chairman.
(A) Preparation of Bid Pairings
(1) Prior to consulting with the System Schedule Committee the
Managing Director - Flight Operations shall analyze the
flight assignments and develop them into bid pairings for
posting on a standard form or in electronic form. Such bid
pairings shall include all known flight time assigned to the
domicile and shall be developed in accordance with this
policy.
(2) Whenever a change of flight times, stops, or layover points
occurs, or if flights are added or deleted after the closing
of bid preference bidding, the decision regarding the
posting of new bid pairing preference sheets shall be made
by mutual agreement between the Domicile Schedule Committee
Chairman and the Regional Chief Pilot. Such a decision shall
be based on the extent of such changes and the time of the
month.
(3) Every effort shall be made to design bid pairings in such a
manner that there is an assortment of pairings offering a
variety of pairing characteristics (i.e., length of trip and
departure/arrival time).
(a) Prior to the posting of bid pairings, a pre-run
solutions check shall be accomplished to ensure that
there is a feasible bid run solution. The check shall
take account of all staffing actions and prescheduled
activities known at the time of the run. Pairings
which will not provide a feasible pre-run solution
check in a category shall be redesigned by being
recombined with other flight assignments as necessary
until a feasible pre-run solution check is
accomplished. The Company shall provide a copy of the
pre-run solution to the System Schedule Committee at
the System Schedule Committee meeting.
(b) Additionally, to the extent possible, the Company
shall strive to ensure that the highest level of bid
run satisfaction is achieved by the maximum number of
pilots in each category.
(4) Bid pairings shall be posted in such a manner as to reflect
the flight number(s), dates of operation, and a projection
of credited flight time.
(5) Monthly bid pairings shall be developed which will achieve
bid runs that can be constructed within the mutually agreed
range of Target.
45
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<PAGE>
Section 9(A)(6)
(6) A listing of all pilots who are scheduled for vacation,
known training or leaves of absence shall be posted by
category concurrently with the posting of bid pairings.
(B) Bidding - Information Package and Process
(1) Information permitting, pilots shall have ten (10) days to
indicate their schedule preferences. A domicile flight
assignment summary ("bid package") containing all pairings
of flights to be flown by category to be effective the
following month/bid period shall be available electronically
via Home Access and preferential bid system ("PBS")
stations, on the eighth (8th) of each month and bids shall
close on the eighteenth (18th) of each month. Additionally,
paper bid package(s) will be available in each pilot's
domicile/satellite by the twelfth (12th) of each month.
Changes to the above mentioned dates may only be made by
mutual consent. The bid package will show all domicile bid
pairings grouped by equipment, and the following information
(a-t) shall be included. Also, (a-j) shall be provided in a
summary format.
(a) Flight Number
(b) Equipment-Limo-Deadheading
(c) Departure Time (Domestic-Domicile Local Time;
International-Domicile Local and GMT)
(d) Crew Change Station
(e) Arrival Time
(f) Schedule Stops
(g) Layover Station and Time
(h) Total Scheduled Block-to-Block
(i) Total Trip Hours
(j) Total Round-trip Credit
(k) Crew Meal Segments
(l) Target
(m) Range
(n) The estimated Reserve Staffing for each Category and
the three (3) fixed-days-off (FDO) spreads as defined
in Section 12(D)(2)(b).
(o) A listing of all pilots who are scheduled for
vacations and known training.
(p) Layover Hotel/Limo names and contact telephone numbers
(q) System Default Bid for each category, as developed and
mutually agreed between the Company and the System
Schedule Committee, when updated as necessary. A
46
<PAGE>
<PAGE>
Section 9(B)(1)(q), cont.
reference to a location where the System Default Bid
can be viewed and printed electronically.
(r) A reference to a location where the name and the
payroll number of each pilot who is qualified as a
line check airmen by category can be viewed and
printed electronically.
(s) A reference to a location where the previous month's
bid results, indicating those pilots awarded bid runs
or reserve schedules by Category in seniority order
can be viewed and printed electronically.
(t) Final agreed values ("pad factors") for all legalities
(e.g., 29:15 in 7, etc.).
Bid packages are to be mailed via overnight delivery to
pilots upon request when they are five (5) or more days
late.
(2) The Company will provide pilots with technical support
during the introduction of the preferential bid system to
enable pilots to efficiently and effectively utilize the
monthly preferential bid system. An on-line tutorial program
will be available and updated as required. Further, the
Company shall provide a toll-free technical support line
that will be staffed during the time that bids are open
Monday through Friday from 0830 to 1730 Central Time. At all
other times during the month, a voicemail facility will be
utilized.
(3) (a) Each pilot shall indicate his/her personal default
bid and/or monthly schedule preferences electronically
on the preferential bid system provided at each
domicile/satellite and/or through Home Access.
Additionally, each pilot may indicate his/her personal
default bid through CAMS by utilizing the "JXPREF"
entry.
(b) The preferential bid entry system shall provide:
(i) User-friendly interface features to enable a
pilot to efficiently enter his/her preferences
that will effectuate the processing and awarding
of a bid run or reserve schedule in accordance
with his/her preferences and seniority;
(ii) Help features and bid entry system interface
features to enable the pilot to successfully
enter his/her preferences in the proper format.
The system shall allow each pilot to identify
and prioritize his/her preferences.
(iii) The bidding pilot shall have access to his/her
last month's bid award, input bid preferences
and a way to determine the reasons for awards
and/or denials of awards.
(iv) Reports will be available to the System Schedule
Committee such that the preferential bidding
system's performance and other features can be
47
<PAGE>
<PAGE>
Section 9(B)(3)(b)(iv), cont.
monitored and evaluated.
(4) Each pilot shall indicate bid run or reserve schedule
preferences on the preferential bidding system
provided at each domicile/satellite or through Home
Access. Sufficient choices to receive a bid award
should be indicated.
(5) As a guide for awarding pairing(s) to pilots who are
short on time and for balancing purposes, each pilot
may enter his/her balance preferences by use of the
CAMS free form balance request (JXMVP). Such balancing
preferences shall be input by 0600 Central Time on the
23rd of the month prior to the bid month to be
processed on the 23rd of the month. Pilots who
volunteer for a supplemental bid run will also use
this CAMS transaction and date/time to express their
trip preferences.
(6) Whenever a bid assignment message announces a pilot's
bid or assignment before bid preferences close and the
effective date of the bid is on or before the first
day of the bid period, the pilot shall be permitted to
express his/her bid preferences provided such
expression is made prior to the bid preference closing
date and time.
(7) Whenever it is known that a pilot will return from
leave of absence or temporary assignment during the
bid period that pilot shall be permitted to express
his/her bid preferences provided such expression is
made prior to the bid preference closing date and
time.
(8) A pilot shall bear the responsibility for having
his/her bid preference indicated as provided in
paragraph (B)(3) above during the bidding period.
(9) A pilot may leave a self-addressed stamped envelope of
appropriate size with the Manager-Flight Crew
Administration for the purpose of mailing the bid
package.
(10) Pre-scheduled Activities: (training, vacation,
------------------------
medical/sick leave, etc.).
(a) For the purposes of Training Golden Days (TGDs)
input, an annotation alerting a pilot to
anticipate CQT in the bid month shall be visible
to the pilot in his/her JXCAP not later than the
first day of the month prior to the bid month.
(b) For the purposes of bidding, each pilot's known
activities (except for unpaid leaves of less
than one month) for the next bid month
(including specific dates) shall be input and
made available for viewing by the pilot not
later than the fourteenth (14th) of the month
prior to the bid month and shall not be changed
without the concurrence of the pilot until
twenty-four hours (24:00) after bid runs are
awarded.
(C) Awarding of Bid Pairings
(1) Bid runs shall be developed from the awarded bid pairings in
accordance with seniority and posted on a standard form or
available electronically through the preferential bid system
48
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<PAGE>
Section 9(C)(1), cont.
at each domicile/satellite and Home Access.
(a) Short term (less than one month) leaves without pay
will not be considered in the construction process of
awarded bid runs or reserve schedules.
(b) A pilot whose pre-scheduled activities preclude
him/her being awarded his/her preference for a bid run
or reserve schedule in accordance with seniority may
be assigned a bid run or reserve schedule for the
purposes of completing the run. After the bid run and
reserve schedule awarding process is completed, such
pilots shall be afforded an opportunity to accept the
assigned bid run or reserve schedule or alternatively,
exercise the provisions of Section 9(C)(5).
(c) A pilot whose bid preferences may be equally satisfied
by more than one pairing(s), work and non-working
period(s) may have the determination of which such
equally desired pairing(s), work and non-working
period(s) he/she is awarded by the preferences of the
pilot(s) junior to such pilot, in seniority order, who
have submitted more specific bid preferences in the
same bid category.
(d) A pilot may enter bid preferences containing one or
more conditional or specific reserve schedule criteria
and shall be awarded such reserve schedule, seniority
permitting. If the awarding of such schedule in
accordance with a pilot's seniority would prevent a
successful completion of bid awards, such pilot may be
assigned a bid run or reserve schedule for the
purposes of completing the run. After the bid run and
reserve schedule awarding process is completed, such
pilot shall be afforded an opportunity to accept the
assigned bid run or reserve schedule or alternatively,
exercise the provisions of Section 9(C)(5).
(e) A Reserve Officer shall be temporarily assigned to the
status of his/her qualification and shall be permitted
to bid and be awarded a bid run in the same manner as
if they were permanently assigned to the category.
(f) Except as provided in Section 9(C)(1)(a) above, a
pilot's schedule will be constructed such that he/she
is contractually legal in all respects for all
pairings and/or reserve schedules awarded vis-a-vis
his/her known activities as reflected in CAMS at the
closing of bids.
The Company may exercise the provisions of Section
9(D) during the interval after bids have closed and
before the award results are reflected in CAMS, except
that any such balance award that causes an illegality
in the pilot's next month bid award shall be removed
upon bid run completion. Nothing in this paragraph
shall limit a pilot's right to initiate changes to
his/her schedule at any time. If such pilot initiated
changes create any conflicts or illegalities versus
their PBS award, any illegally awarded trips shall be
removed from the award and the pilot shall be handled
49
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<PAGE>
Section 9(C)(1)(f), cont.
under the initial balance process.
(2) If a pilot fails to bid as provided in 9(B)(3), the pilot
will either be awarded a bid run or reserve schedule,
utilizing the pilot's personal default bid. If the pilot
does not have a personal default bid, the appropriate system
default bid will be used.
(3) A pilot will not be awarded a bid (except for pay purposes
only) on a type of equipment unless the pilot holds the
necessary equipment qualifications, or it is anticipated
that the pilot will complete such qualifications within the
first five (5) days of the bid month being awarded.
(4) A pilot who has completed transition and/or upgrade training
on an equipment type in conjunction with fulfilling a new
category bid will be afforded the opportunity for a
guaranteed bid run award through the PBS, seniority
notwithstanding, in the new category for one (1) month only.
Such guaranteed bid run holder status shall be in accordance
with Section 9(C)(3) above. A pilot who is awarded a bid run
pursuant to this paragraph shall not be subject to
displacement under Section 9(C)(5) below.
(5) A pilot described in Section 9(C)(1)(b) or (d) above or
whenever a pilot bidding, displacing, returning from leave
of absence, training or temporary assignment or changing
categories, arrives at a domicile after the awarded bid
period has started and has not been awarded a bid, the pilot
shall be handled in the following order:
(a) If sufficient open time is available to construct a
line reasonably close to the pilot's monthly ALV, a
pilot shall be scheduled on such open time provided
the pilot's seniority entitles the pilot to such open
time.
(b) If sufficient open time is not available, the pilot
shall assume the line held by the most junior line
holder provided the pilot is senior to the holder of
said bid run in his/her category.
(c) If unable to be handled as in (a) or (b) above,
seniority permitting the pilot shall assume the line
held by the most junior pilot holding a bid run as in
(C)(8) below in his/her category.
(d) If unable to be handled as in (a),(b) or (c) above,
the pilot shall be assigned a reserve schedule.
(e) If a pilot so elects, in lieu of (a),(b) or (c)
preceding, the pilot may be given a reserve schedule.
The Company shall attempt to contact such pilots for
disposition by phone, and if unable then by an entry in the
pilot's JXCAP.
(6) Notwithstanding the balancing of pilots and distribution of
open time provisions contained in Section 9(H) below,
whenever a bid pairing(s) is re-bid or a flight(s) in a bid
run must be substituted because of a schedule change during
50
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<PAGE>
Section 9(C)(6), cont.
a month, the flight(s) for which the pilot is scheduled in
the new period shall replace any flight(s) previously
awarded for that period from earlier bidding, and such new
flight(s) shall be considered to be a part of the pilot's
original projection.
Substitution of flight(s) under the provisions of this
paragraph 9(C)(6) shall be limited to pilots who have lost
flight(s) solely for the reason stated above. Additionally,
the substitution of flight(s) as provided herein shall be
assigned based upon the seniority within the category and
the following priorities:
(a) First, the new flight assignment(s) is substantially
equal in pay and credit and days scheduled to operate
to the original flight assignment;
(b) Second, the new flight assignment(s)is substantially
contained within the days that the original flight
assignment was to operate;
(c) Third, the new flight assignment(s) is substantially
equal in pay and credit to the original flight
assignment.
(7) A pilot will not be awarded a bid run or reserve schedule if
the pilot is expected to be absent from flying during the
entire bid period, i.e., medical, personal leave, vacation,
etc.
(8) Supplemental Bid Runs. The Company shall develop
---------------------
supplemental bid runs to provide for the post bid award
protection of flight assignments that are un-sequenced and
flight assignments that are otherwise vacated by pilots.
If subsequent to the posting of bid run awards, but prior to
the seventh day of the new bid period, a bid run can be
developed for a category which totals the guarantee or more
credited hours, such bid runs shall be awarded in seniority
order to those pilots holding a reserve schedule in that
category who have indicated a preference for a supplemental
bid run subject to Section 12(D)(2)(b). Pilots may indicate
such preference in accordance with the following:
(a) Pilots desiring a supplemental bid run shall indicate
this preference via an appropriate entry in the
Preferential Bidding System. Such pilots shall input
their preferences as to trips via the CAMS free form
balance request (JXMVP) by 0600 Central Time on the
23rd of the month prior to the bid month to be
processed on the 23rd of the month; or
(b) Pilots desiring a supplemental bid run may input their
preferences as to trips via the JXMVP by 0600 Central
Time on the 23rd of the month prior to the bid month
to be processed on the 23rd of the month.
Supplemental bids will be awarded first to pilots who
indicated a preference for such bids via the Preferential
Bidding System. Any additional supplemental bids will then
be awarded to pilots who input their preference as to trips
51
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<PAGE>
Section 9(C)(8), cont.
via the JXMVP. After any such supplemental bid runs are
awarded, any additional open time will be handled in
accordance with Section 9(H).
(9) The above notwithstanding, the Company shall not be required
to award during the normal monthly bid award process First
Officer pairings associated with Line Check Airman bid runs.
Such pairings as provided under this Section 9(C)(9) shall
not exceed the equivalent of thirty (30) First Officer Bid
Runs based on the respective First Officer Category range of
Target. Such open First Officer pairings shall be, to the
extent possible, used for training which, as used herein,
shall be limited to equipment training, requalification
training, upgrade training, and checking. Whenever said bid
runs or a portion thereof cannot be used in training as
described above, the resultant vacant trip(s) shall be
treated as open time and assigned in accordance with Section
9(H). The assigning of pilots to trips open due to such un-
awarded First Officer bid pairings shall not result in any
pay assignment to any pilot. The application of this
provision shall not, for the duration of the Agreement,
result in the creation of an excess of pilots for the
purpose of subsequent system displacement actions.
(10) During the monthly preferential bid process, First Officers
with less than FAR 121.438b experience will not be awarded a
pairing(s) that has been awarded to a Captain who does not
meet the requirements of FAR 121.438b.
(D) Balancing of Pilots
(1) For the purpose of balancing, pilots will be classified as
follows:
(a) Class "A" Balance: Bid run pilots projected under
--------
guarantee, upon completion of initial balancing on a
seniority basis, will be classified as Class "A".
A Class "A" pilot may enter balance preferences at any
time by telephone contact or voicemail with CCS, or
the CAMS free-form balance request (JXMVP).
Initial balancing will normally commence on the
twenty-third (23rd) of the month prior to the bid
month. Notwithstanding the provisions of Section
9(B)(5), a Class "A" pilot may request that his/her
balance preference be added to the JXMVP list at any
time during the month.
Trip Substitution: In addition to the Company or pilot
adding a Class "A" balance trip, a Class "A" pilot may
substitute a conflicting trip in his/her bid line with
a Class "A" balance trip. Such trip substitution is
limited to a Class "A" balance.
(b) Class "M" Balance (Military): In accordance with
Section 18(C)(4)(c), bid run pilots who drop an entire
trip due to military and request to become available
for balance for the number of days of the original
trip over and above the military absence days taken
will be classified as Class "M". (E.g. A five day trip
52
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<PAGE>
Section 9(D)(1)(b), cont.
is dropped for two days of military absence, the pilot
would be available for three days (M3) of flying.).
A Class "M" pilot may enter balance preferences at any
time by telephone contact or voicemail with CCS, or
the CAMS free-form balance request (JXMVP).
Notwithstanding the provisions of Section 9(B)(5), a
Class "M" pilot may request that his/her balance
preference be added to the JXMVP list at any time
during the month.
(c) Class "B" Voluntary Balance: Bid run pilots projected
------------------
under ALV credit hours but over guarantee due to the
following will be classified as Class "B":
- A flight cancellation
- Irregular operation
- When training results in a missed trip(s) that are
greater than the value of the daily rate for such
trip(s).
In addition, pilots projected under guarantee due to
low initial projection, as defined in Section
9(D)(2)(b), will be considered Class "B".
Notwithstanding the provisions of Section 9(B)(5), a
Class "B" pilot may request to be balanced at any time
during the month by telephone contact with Crew
Scheduling, by voicemail or by the CAMS free form
balance request (JXMVP).
Once the value of the Class "B" loss, as stated above,
has been recovered, the pilot will not be considered
for a Class "B" balance.
(2) Additional Balance Rules:
(a) Involuntary Balance: In the event a pilot's projected
flight time credit for the month is less than the
applicable hours of the pilot's guarantee, the Company
may balance such pilot at any time during the month,
subject to (D)(2)(b), below.
(b) A bid run pilot whose initial awarded bid run is
constructed to less than bid run guarantee will not be
subject to balance as provided for in Section 9(D)
unless such pilot indicates his/her request for
balancing by voicemail or by the CAMS free form
balance request (JXMVP).
(c) Pay and Credit Calculations: If any trip commences
(report time) in one (1) calendar month and ends in
the following month, all of a pilot's calculable
flight time pay and credit for the trip shall be paid
and credited in the month earned.
(d) Reserve Replacement Option (RRO): Subject to the
approval of Crew Schedule, a Class "A", "M" or "B"
53
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<PAGE>
Section 9(D)(2)(d), cont.
pilot may remove a reserve pilot from a flight up to
the time the reserve pilot is required to report for
the flight. In addition, a reserve pilot may be
removed from a flight in mid-pairing by Crew Schedule
if the remaining portion of the pairing is assigned to
a Class "A", "M" or "B" pilot or at the Company's sole
discretion to any pilot on the Volunteer Fly List.
(e) Balance Limits: The block-to-block flight time on the
balance trip to be flown shall not, when added to
his/her already accumulated block-to-block flight
hours and projected block-to-block flight hours, total
more than category target plus range, unless the pilot
consents.
(f) Class "A" and "M" balancing may be done by the Company
at any time and will always be run consecutively,
Class "A" then Class "M", on a seniority basis.
(3) Balance Avoidance: Pilots who are subject to balance for any
------------------
reason shall be allowed to request an opportunity to avoid
balancing. Requests to avoid balance action must be
communicated to Crew Scheduling and, if approved, the
pilot's guarantee will be reduced to the current value of
his/her services performed and projected services.
The decision to permit balance avoidance will be subject to
forecast reserve availability and operational considerations
at the time of the request and will be at the sole
discretion of the Company.
Pilots who exercise the balance avoidance option and
subsequently are again subject to balance will be handled in
accordance with Section 9(D)1 and (D)2 above.
(4) When a canceled flight is re-originated or an extra section
or charter is operated in lieu thereof, it will be treated
the same as the pilot's original flight assignment.
(E) Bid Line Improvement Process (BLIP)
(1) To provide more desirable flights for pilots in accordance
with their seniority, the following Bid Line Improvement
Procedure (BLIP) principles shall apply for bid run pilots.
(2) Each bid run pilot shall be offered an opportunity to bid
for any flight whether or not the desired flight(s) is
advertised as open. Such BLIP preference must be input for
each day, separately, and can reflect flight preferences for
any other date of the bid period, subject to the provisions
listed below:
(a) BLIP preferences must be input by the pilot via CAMS
CRT, home access, or voice-mail. Up to three (3)
display screens will be available for all preference
inputs (i.e. BLIP and TAS).
BLIP preferences must indicate the flight number(s)
and date(s) of the flights desired and the flight
number(s) and date(s) of the flight(s) vacated (e.g.
*A256/02DEC R323/03DEC*).
54
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<PAGE>
Section 9(E)(2)(b)
(b) BLIP processing for each month shall commence with the
first BLIP close time three (3) days prior to the
first day of the month and will be in accordance with
the parameters listed below based on local domicile
time:
DAILY BLIP
-------------------------------------------------------------
Domicile Return 1st BLIP 2nd BLIP
to Duty Close Close
Time
-------------------------------------------------------------
JFK D/I 0800 0800 1700
-------------------------------------------------------------
STL D/I 0800 0800 1700
-------------------------------------------------------------
SFO D/I 0700 0700 1600
-------------------------------------------------------------
LAX D/I 0700 0700 1600
-------------------------------------------------------------
(c) A pilot who is in any off-duty status and desires to
return for his/her next scheduled flight must do so no
later than the applicable local domicile time on the
day prior to the next scheduled flight or the flight
will be removed and placed in open time.
(d) BLIP awards will be completed as soon as possible, not
to exceed three hours (3:00) of the BLIP close, local
domicile time. Flight(s) awarded to successful bidders
shall be added to the pilot's monthly schedule (JXCAP)
and the flight(s) vacated will be removed.
Any pilot whose flight(s) is vacated due to a BLIP
Preference Award to another flight(s) will lose all
rights to the vacated flight(s).
(e) Daily BLIP awards will be processed in seniority order
and on a multiple pass system. If the automated CAMS
system is unavailable during the BLIP award process,
the process reverts to a single pass system and the
completion time provisions of paragraph (d) above and
the automated report provision of this paragraph shall
not apply.
An automated report of all BLIP requests showing those
awarded and the reasons for those denied will be
electronically available for all pilots to view for
each BLIP run.
(f) A BLIP transaction will be processed even if it causes
the pilot to exceed ALV.
(g) A pilot on ALPA business will be allowed to exercise
the BLIP provisions of this section in seniority order
for the purpose of ALPA Flight Pay Loss make-up. (Not
applicable to the three (3) members of the System
Schedule Committee reimbursed by the Company under
Section 10(B)(5)).
(h) Subject to Sections 9(E)(2)(j), 9(E)(2)(k) and 9(E)(3)
below, a pilot may BLIP out of any flight(s) within
the new bid month, and a pilot may BLIP from any day
of the new bid period into a flight on the last three
(3) days of the previous bid period.
55
<PAGE>
<PAGE>
Section 9(E)(2)(i)
(i) BLIP requests that impinge on a pilot's golden days
will be awarded and the pilot will forfeit those
golden days impinged upon.
(j) A pilot may BLIP out of a flight(s) that departs or
impinges on a holiday.
Requests to BLIP out of the holidays specifically listed
below will be processed two (2) days and one (1) day
before the scheduled departure date of the pilot's
original flight(s). The award of such BLIP will be at
the Company's discretion, notwithstanding the stated
reserve requirements of paragraph (E)(3). Further, at
all times a pilot may BLIP out of a pairing(s) that
departs or impinges on one of the following holidays
as long as he/she adds a pairing(s) that departs or
impinges on the same holiday.
Thanksgiving Day Christmas Day
December 31
(k) BLIP preferences will be honored if such award does
not generate more than forty-five minutes (0:45) of
make-up guarantee at the completion of each award. A
pilot's guarantee will be automatically subject to the
reduction provisions of Section 9(D)(3), Balance
Avoidance, for the make up guarantee.
(l) BLIP requests for a domestic satellite pairing will be
awarded in accordance with the normal BLIP procedures.
BLIP requests for an international satellite pairing
will be awarded in accordance with Letter VI,
paragraph 18.
(m) BLIP preferences shall not be honored if the award is
in conflict with a required, pre-scheduled activity or
vacation. However, BLIP preferences shall be honored
if the award conflicts with a bid run pilot's days off
or golden days.
(n) Pilots awarded a BLIP assignment have the
responsibility to "OK" that assignment. However, Crew
Schedule shall notify pilots awarded BLIP flight(s)
for the current or following day and those pilots who
have no flight activities scheduled before the BLIP
award flight(s). In the event it is not possible to
contact a pilot who has a BLIP flight(s), a rework
will not be made. Any flight(s) left open in this
manner will be assigned in accordance with Section
9(H).
(o) BLIP preferences requesting to add a trip on the date
of the BLIP process shall be awarded provided the trip
added departs after 1700 (local domicile time) and the
trip removed does not depart on that process day.
(3) BLIP preferences shall be awarded if there are sufficient
reserves to cover all known openings for the duration of the
trip(s). If the vacated trip is within seven (7) days of the
BLIP award, the BLIP preference shall be awarded if there is
one (1) reserve pilot in addition to the sufficient reserve
56
<PAGE>
<PAGE>
Section 9(E)(3), cont.
requirement for the duration of the trip. The Company, in
its discretion, may award a BLIP preference notwithstanding
the stated reserve requirements of this paragraph.
(F) Additional Flying
(1) General
(a) Pilots who notify the Company that they are available
to fly on days they are not otherwise scheduled to fly
may perform additional flying, subject to these
Section 9 (F) provisions.
After the bids are awarded and continuing throughout
the month an eligible pilot may volunteer to fly time
in addition to his/her monthly schedule. No pilot
shall be required to perform additional flying.
(b) Non-bid run pilots are restricted from Green Time,
(9(H)(1)), for all additional flying.
(c) Non-bid run pilots may use TAS and VFL to request
additional flying on days off, reserve golden days off
(RGD) and vacation days. Such flights must depart on a
day off, RGD or vacation day and must be contained
within the pilot's vacation or duty free period,
including all required rest, except as provided in
Section 9(F)(5). Non-bid run pilots may use TAS and
VFL for RGD and vacation flying beginning forty-eight
hours (48:00) prior to the commencement of the RGD or
vacation period for flights departing within the
pilot's RGD or vacation. Non-bid run pilots on days
off may use TAS or VFL for flights departing within
forty-eight hours (48:00).
(2) Trip Add System (TAS)
(a) To provide a structured mechanism for pilots to add
flights to their schedules in accordance with
equalization, the TAS principles shall apply for all
pilots.
(b) Each pilot shall be offered an opportunity to bid for
any flight whether or not the desired flight(s) is
advertised as open. Such TAS preference must be input
for each day, separately, and can reflect flight
preferences for any date(s) of the bid period, subject
to the provisions listed below:
(i) TAS preferences must be input by the pilot via
CAMS CRT, home access, or voice-mail. Up to
three (3) display screens will be available for
all preference inputs (i.e. BLIP and TAS).
TAS preferences must be input by specific
request, by flight number(s) and date(s) of the
flight(s) desired
(e.g. *A256/02DEC**A323/03DEC*).
(ii) TAS processing for each bid month shall commence
with the first TAS close time three (3) days
57
<PAGE>
<PAGE>
Section 9(F)(2)(b)(ii), cont.
prior to the first day of the bid month and
will be in accordance with the parameters listed
below based on local domicile time:
DAILY TAS
-----------------------------------------------------
Domicile 1st TAS Close 2nd TAS Close
-----------------------------------------------------
JFK D/I 0800 1700
-----------------------------------------------------
STL D/I 0800 1700
-----------------------------------------------------
SFO D/I 0700 1600
-----------------------------------------------------
LAX D/I 0700 1600
-----------------------------------------------------
(iii) TAS awards will be completed as soon as
possible, not to exceed three hours (3:00) of
the TAS close hour. Flight(s) awarded to
successful bidders shall be added to the pilot's
monthly schedule (JXCAP).
(iv) TAS preferences shall not be honored if the
award is in conflict with required, pre-
scheduled activity. However, a TAS award shall
be honored if the award conflicts with a pilot's
scheduled vacation or days off.
TAS requests that impinge on a pilot's golden
days will be awarded and the pilot will forfeit
those days impinged upon.
A TAS transaction will be processed even if it
causes the pilot to exceed ALV.
(v) TAS requests for a domestic satellite pairing
will be awarded in accordance with the normal
TAS procedures. TAS requests for an
international satellite pairing will be awarded
in accordance with Letter VI, paragraph 18.
(vi) Pilots awarded a TAS assignment have the
responsibility to "OK" that assignment. However,
Crew Schedule shall notify pilots awarded a TAS
flight for the current or following day and
those pilots who have no flight activities
scheduled before the TAS award flight. In the
event it is not possible to contact a pilot who
has a TAS flight, a rework will not be made. Any
flight(s) left open in this manner will be
assigned in accordance with Section 9(H).
(vii) Out-of-domicile pilots may use TAS for flights
departing within forty-eight hours (48:00) but
shall be considered after in-domicile pilots.
(viii) A pilot who removes a trip during a BLIP
transaction may not add that trip during the
associated TAS process immediately following
such BLIP process.
(c) A pilot on ALPA business will be allowed to exercise
the TAS provisions of this section in equalization
order for the purpose of ALPA Flight Pay Loss make-up.
(Not applicable to the three (3) members of the System
58
<PAGE>
<PAGE>
Section 9(F)(2)(c), cont.
Schedule Committee reimbursed by the Company under
Section 10(B)(5)).
(d) TAS is included in the pilot's schedule and treated as
a part of the pilot's regularly assigned monthly
schedule once the flight assignment is awarded.
(3) Volunteer Fly List (VFL)
(a) In addition to the TAS, the Company will maintain a
list of pilots (Volunteer Fly List or VFL) who have
notified the Company they are available to fly on days
they are not otherwise scheduled to fly. The VFL will
be available for all pilots to view via CAMS and home
access. VFL requests will be awarded in accordance
with equalization.
(b) Pilots on vacation or reserve pilots on days off who
become unavailable (i.e. illness) for scheduled
additional flying will be returned to their previous
scheduled activity.
(c) The Company will offer open flights to pilots on the
VFL in accordance with Section 9(H). Crew scheduling
shall only call a pilot for a VFL trip based upon
his/her requested preferences.
(d) Pilots may accept or reject the offered flight
assignment. Once accepted, the VFL trip will be
included in the pilot's schedule and treated as part
of the pilot's regularly assigned monthly schedule.
Pilots must be legal, qualified and available to
accept the entire assignment without causing a
conflict with a scheduled trip or causing a trip drop
due to illegality, training or reserve duty days
unless such conflict or trip drop is approved by Crew
Scheduling.
(e) VFL preferences shall not be honored if the award is
in conflict with required, pre-scheduled activity.
However, a VFL award shall be honored if the award
conflicts with a pilot's scheduled vacation or days
off.
VFL requests that impinge on a pilot's golden days
will be awarded and the pilot will forfeit those days
impinged upon.
A VFL transaction will be processed even if it causes
the pilot to exceed ALV.
(f) VFL requests for a domestic satellite pairing will be
awarded in accordance with the normal VFL procedures.
VFL shall not apply to international satellite
pairing(s).
(g) Out-of-domicile pilots may use the VFL to request out-
of-domicile flights but shall be considered after in-
domicile pilots.
59
<PAGE>
<PAGE>
Section 9(F)(4)
(4) Equalization: When two (2) or more pilots are requesting
additional flying for the same day, the pilot with the least
amount of additional flying pay hours in the current month
and immediately preceding two (2) bid months will be given
priority for the assignment. If the pilots requesting
additional flying have an equal amount of additional flying
pay hours, the senior pilot will be given priority for the
assignment.
(5) Activity Conflicts
Notwithstanding the provisions of (F)(2) and (F)(3), TAS and
VFL trip awards shall not be prohibited solely because the
requested TAS or VFL trip overlaps between a pilot's RGDs,
DOF or vacation days in the following circumstances,
provided such trip does not result in any conflicts or
illegalities with the pilot's scheduled activities,
including all required rest:
(a) A flight departs on a pilot's RGD and immediately
continues to the pilot's vacation or DOF and the
entire remainder of the flight assignment is contained
within the pilot's vacation period and/or DOF.
(b) A flight departs on a day of a pilot's vacation and
immediately continues to the pilot's RGD and/or DOF
and the entire remainder of the flight assignment is
contained within the pilot's RGD and/or DOF.
(c) A flight departs on a day of a pilot's DOF and
immediately continues to the pilot's vacation and/or
RGD and the entire flight remainder of the flight
assignment is contained within the pilot's vacation
and/or RGD.
(d) A pilot on RGD, DOF or vacation who has a contiguous
period of RGDs, DOFs or vacation may request a flight
that departs on such subsequent set of RGDs, DOF or
vacation provided the entire flight assignment is
contained within the pilot's RGD, DOF or vacation.
(G) Draft
(1) In the event it is necessary to provide protection for the
operation which cannot be provided by a pilot holding a
reserve schedule, the Company may draft the most junior
pilot in the category who is legal, qualified and available.
Any pilot so assigned shall receive premium pay in
accordance with Section 5(K) for each pay hour of such
assignment.
(2) Trip Protection for Draft Pilots
A pilot who has a trip removed at the instant the draft
occurs and as a direct result of the draft shall receive the
greater of draft pay for the trip flown or the scheduled pay
for the trip removed. The pilot shall be advised that the
trip protection comparison will occur after the completion
of the draft trip.
60
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<PAGE>
Section 9(H)
(H) Distribution of Open Time
Open time shall be distributed among pilots in accordance with the
provisions of Section 9 within the classes described above in the
following order:
(1) Green time: Open time that develops after the bids are
----------
awarded and after initial balancing is completed but prior
to forty-eight hours (48:00) of the scheduled departure of
the open flight. Green time is processed and awarded for bid
run pilots only, in the following order:
CLASS "A" balance list
CLASS "M" balance list
CLASS "B" balance list
BLIP
TAS
(2) Yellow time: Open time that is unassigned within forty-eight
------------
hours (48:00) of the scheduled departure of the open flight
but prior to six hours (6:00) of scheduled departure of the
open flight. Yellow time is processed and awarded for bid
run and non-bid run pilot's in the following order:
CLASS "A" balance list
CLASS "M" balance list
CLASS "B" balance list
BLIP
Option Time
TAS
VFL
Reserve Pilot, in order to comply with Section 12(B)(3) (not
counted against Option Time)
Draft
(3) Red time: Open time that remains unassigned within six hours
---------
(6:00) of the scheduled departure of the open flight. Red
time is processed and awarded for bid run and non-bid run
pilots in the following order:
CLASS "A" balance list
CLASS "M" balance list
CLASS "B" balance list
Reserve pilot, at Company option
VFL
61
<PAGE>
<PAGE>
Section 9(H)(3), cont.
Draft
A Class "A", "M" or "B" pilot may accept or reject
assignment to a Red Time flight, at his/her sole discretion.
(4) After an open flight is assigned to a pilot and accepted,
the flight shall be considered as part of the pilot's
regular schedule, subject to Section 9(D)(2)(d) and
12(C)(3).
(I) Trading of Flights
Mutual trading of flights between pilots holding a bid run
shall be permissible, subject to the following provisions:
(1) Each pilot must be legal to protect both the flight for
which the pilot has traded and the pilot's next scheduled
flight.
(2) Such mutual trade shall not create make-up guarantee.
(3) After a trade has been agreed upon and recorded, the flights
so traded shall be considered as the regular flights of the
respective pilots.
(J) OFR - Offering A Trip
(1) Bid run pilots may offer trips into open time (OFR). Until
the offered trip is selected by another pilot or Crew
Schedule, the offering pilot will remain responsible for the
trip. If a bid run pilot, a pilot on vacation, or a non-bid
run pilot during his/her days off selects the offered trip
from open time, the trip will be dropped from the offering
pilot's bid run and placed in the receiving pilot's JXCAP.
The removed trip may not be re-acquired by the offering
pilot. When an OFR trip is in Yellow Time, Crew Schedule may
take the offered trip, subject to Section 9(K)(5). If Crew
Schedule takes the trip, it will be removed from a pilot's
bid run as if it had been transferred to another pilot. Crew
Schedule may use the removed trip for balancing purposes or
may assign it to an available reserve pilot.
A selected trip must not conflict with any existing
assignments and all contractual legalities must be observed.
An OFR trip acquired by a reserve pilot must fall within
vacation, DOF, RGD, or any contiguous combination thereof,
including any reserve pilot required rest. A pilot on
vacation shall be restricted from selecting an OFR trip that
impinges on any holiday listed in Section 9(E)(2)(j). When
the trip is dropped, the projected pay and credit, and the
minimum guarantee of the offering pilot will be reduced by
the amount of the pay and credit hours of the dropped trip.
The projected pay and credit of a receiving bid run pilot
will be increased by the number of pay and credit hours of
the trip received. Pilots with less than one (1) year of
service shall have his/her pay reduced/increased in
accordance with the hourly rate of Section 4(B)(1)(b). The
guarantee of the reserve pilot will not be offset by the pay
and credit of the trip received.
62
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<PAGE>
Section 9(J)(2)
(2) If a bid run pilot has a trip that extends into a month in
which he/she is a reserve pilot, offers and subsequently has
a trip removed in accordance with 9(J)(1) above, the day(s)
on which the removed trip was to operate, in the reserve
month, shall become inviolate duty-free period(s) ("Platinum
Day(s)").
A pilot shall indicate to Crew Schedule, prior to the start
of the inviolate duty-free period(s) ("Platinum Day(s)"),
which of the period(s), if any, he/she prefers to waive and
become available for duty to the Company. Compensation for
such availability on the waived duty-free period(s) shall be
at Fixed Daily Rate.
(3) OFR is not subject to distribution on the basis of seniority
or equalization.
(K) Miscellaneous
(1) Upon return to domicile from a flight or other authorized
absence, a pilot shall okay his/her next schedule flight(s)
or next training schedule, or determine his/her position on
the reserve schedule.
(2) Flight time and credit shall be reported for pay assigned to
a bid run pilot concurrent with the reporting of flight time
and credit for the pilot who actually flew the trip, subject
to the provisions of Section 5(E).
(3) When a pilot is advised that there will be a delayed
departure after he/she reports to the field, the pilot will
remain with the flight for four hours (4:00) International
(two hours (2:00) Domestic) from report time; the pilot may
request relief, but will remain with the flight until the
relief has arrived at the field.
(4) When for any reason a pilot becomes illegal for a future
scheduled pairing, the Company will take no immediate action
to resolve the illegality provided the illegal pairing
departs more than seventy-two hours (72:00). The illegality
will be clearly flagged in JXCAP in a manner visible to the
pilot. The pilot may use the various provision of Section 9
to attempt to rearrange his/her schedule to eliminate the
illegality. If the pilot has not done so by seventy two
hours (72:00) prior to the illegal pairing's scheduled
departure, the Company may resolve the illegality in
accordance with normal scheduling procedures.
Notwithstanding the above, a pilot on an active pairing will
have his/her next pairing removed as a result of a projected
illegality, either FAR or contractual. However, upon
completion of his/her active pairing, the illegality will be
re-evaluated. If the pilot is now legal, such pilot will be
restored to his/her removed pairing.
(5) Option time: Open time and OFR time within forty-eight hours
-----------
(48:00) of departure at the company's option can be assigned
to a reserve using the provisions of Section 12(C), subject
to the following:
In any bid month no more than thirty-five percent (35%) of
the total reserve availability measured in hours can be
63
<PAGE>
<PAGE>
Section 9(K)(5), cont.
assigned to reserves using the option time provisions. This
bank of option time is computed for each category by
multiplying the actual number of reserve days available by
five hours (5:00), multiplied by thirty-five percent (35%).
E.g., if the reserve days available is two hundred fifty
(250), then the Option time for that category is 250 x 5.0 x
35% = 437.5 hours available for the Company to assign at its
sole discretion to reserves within forty-eight hours (48:00)
of open flight departure.
Option time assignments in the first fifteen (15) days of
each bid month will not be available to the company when
more than fifty percent (50%) of total monthly option time
has been assigned.
Once option time is exhausted, all open trips will be
assigned subject to the provisions of Section 9(H).
(6) A pilot will not be scheduled to exceed one hundred (100)
actual block hours in a calendar month in accordance with
FAR's.
A pilot will not be scheduled to exceed one thousand (1000)
actual block hours in a rolling twelve (12) month period. To
ensure that pilots are not limited from flying a normal
schedule (an average of seventy-five hours (75:00)) in
future months, a rolling twelve (12) month calculation will
be done for each twelve (12) month period extending from the
current month plus eleven (11) prior months through the
current month plus eleven (11) future months. The most
restrictive of the twelve (12) rolling totals will be used
to limit current flying if necessary.
Actual block hours will be used for all prior months. Actual
or projected block hours will be used for the current and
next month when specific flight assignments are known, and
seventy-five block hours (75:00) will be assumed for all
future months containing no flight assignments, except that
scheduled vacations will be taken into account pro-rata.
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SECTION 10
SCHEDULING OF PILOTS
(A) General
(1) Consistent with the concepts of participative management, it
is the intent and purpose of this Section to provide for
pilot participation in the development of pilot scheduling
policies and procedures that will promote the most efficient
and economical operation of flights, the best possible
pairing or grouping of flights into bid runs by observing
and, to the extent possible, honoring the collective
preferences of the pilots, the most equitable assignment of
flying time to domiciles, the most reasonable degree of
stability of bids at each domicile, and the intent that
Section 11(B) operate so as to effect favorable working
conditions. Consistent with the above, the general concept
of seniority will be given appropriate recognition. The
assignment of time to domiciles and the pairing or grouping
of runs to effect the purpose of Section 11(B) will not be
done in such a manner as to effect a general deterioration
of working conditions and domicile stability. The Company
and the pilot representatives will consult with regard to
the above as outlined herein, the Company retaining the
right to determine the geographical location of domiciles,
the assignment of flight time to domiciles, and the pairing
or grouping of flights for purposes of bid runs.
(2) The Company may assign both Domestic and International
flights to pilot domiciles. At such combined
Domestic/International domiciles the following shall apply:
(a) In the event that unanticipated problems arise in
connection with the operation of combined domiciles,
representatives of the Company and the Association
will meet at the request of either party to resolve
such problems.
(b) The Company may mix international and domestic flights
within bid runs and within trip pairings when
economically and operationally beneficial.
(c) A pilot may bid domestic and/or international pairings
in the monthly preferential bid system and shall be
awarded such, seniority and qualifications permitting.
If such pilot's seniority enables the pilot to hold an
international bid run pairing(s) or reserve schedule,
the pilot shall be compensated in accordance with
paragraphs 10(A)(2)(d) and (e) below if the pilot is
not qualified for international thirty (30) days after
such bid award.
A bid run pilot who was previously internationally
qualified on the status and equipment of the
international flight pairing(s) so awarded shall be
qualified or pay protected for such pairing(s).
(d) A pilot who holds a reserve schedule which protects an
international operation or combined domestic and
international operation in a 757/767 category shall
receive the international guarantee.
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Section 10(A)(2)(d), cont.
A pilot who bids and is awarded a reserve schedule
protecting a narrowbody category shall receive the
international guarantee when one or more international
flights are performed. Such narrowbody international
guarantee shall be compared to actual services
performed and the pilot shall be paid based upon the
greater amount.
(e) Once awarded a bid run or supplemental bid run
containing a majority of flight credit hours on an
operation, the pilot will be considered a bid holder
on that operation. If no majority is present, the
pilot shall be considered to be on the International
Operation.
(f) A pilot may volunteer for or voluntarily balance on a
trip from one operation to the other within the month,
qualifications permitting. A pilot shall be balanced
on the operation he/she is flying, except that a pilot
who is projected below guarantee may be involuntarily
balanced on the other operation if no other balance
trip is available on his/her operation. (Such balance
shall not result in proration of the pilot's
guarantee.) All such flying shall be paid at the rate
of the operation actually flown. The Company will
provide the appropriate manuals when required.
(g) A pilot whose pairing originates with a deadhead to
protect a flight, and such deadhead flight cancels,
shall be re-protected on the next Company flight
provided:
(i) the flight the pilot is positioning for is
unprotected; and
(ii) the pilot will arrive at the station of the
flight to be protected prior to the scheduled
departure time of the flight being protected.
This paragraph (g) shall also apply to equipment
substitutions of Section 10(D).
(B) System Scheduling Committee (SSC)
(1) A SSC shall be established in accordance with the following
provisions. A Basic SSC, composed of a maximum of three (3)
members, as determined by the Association, shall be
designated to meet for ten (10) months of the year. In
addition, a total SSC, composed of a maximum of seven (7)
members (representative(s) from each domicile and a
chairman) shall meet on a semi-annual basis; March and
September.
(a) The SSC shall meet to consult with the Company
concerning all pilot scheduling problems of the entire
system not covered by the Scheduling Policies. In
addition, the SSC shall consult with the Managing
Director, Flight Operations as to the allocation of
flying time to the various domiciles, the pairing or
grouping of flights into bid runs, the stabilization
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Section 10(B)(1)(a), cont.
of bids at each domicile, domicile staffing and the
PBS level of preference denials.
(b) The SSC may request changes to the pairings and flight
time allocation to the domicile(s), and the Company
may allow such changes; provided, however, that such
action by the Company will not alter the Company's
right as provided in (A)(1) of this Section.
(c) To the extent possible, the Company shall honor the
requests from the SSC for approximate percentages of
pairing lengths offered for bid (i.e. one (1) day, two
(2) day, three (3) day, etc.). The intent is to
provide pairings for bid proportionate to the request
of the SSC; provided however, that such action by the
Company will not alter the Company's right as provided
in Section 10(A)(1) above.
(d) The preferential bidding system may only be
modified/upgraded by mutual consent of the Association
and the Company. Any modifications or changes
including: program upgrades, templates, line
construction parameters (e.g., CBA/FAR pad, stacking
factor, unawarded time allowances, and operation
buffer factors) shall be by mutual agreement. Further,
the Company and the Association will upon the request
of either party meet to consult, review and agree on
system hardware and software improvements which will
promote the most efficient and economical operation of
the pilot monthly preferential bid system.
(2) All changes or amendments to the System Scheduling Policy
shall be mutually agreed to by the Pilots' Negotiating
Committee and the Managing Director, Flight Operations;
however, the Managing Director, Flight Operations may make
temporary changes in the System Scheduling Policy when such
changes are necessary to continue efficient operation of
flights. In such event, the Managing Director, Flight
Operations shall, without delay, consult the Negotiating
Committee for the purpose of resolving a mutually approved
amendment to cover the problems which required the temporary
changes. For the purposes of this paragraph, the System
Scheduling Policy shall contain the definition of pilot
scheduling terms, the Federal Aviation Regulations
interpretations, and the procedures to be followed during
irregular operations not covered by Domicile Scheduling,
paragraph (C) of this Section.
(3) When any of the provisions of the System Scheduling Policy
or procedures are in conflict with any of the provisions of
the Working Agreement, the Working Agreement shall govern.
(4) The Company will notify the SSC whenever a change is planned
in flight schedules which would result in an increase or
decrease in bid requirements at a domicile. The Company will
provide the SSC with a copy of the planned pairings for the
future month no later than three (3) days prior to the
opening of bids. Flight time allocation and re-pairing of
flights as provided in (B)(1) above shall be accomplished in
accordance with the provisions of this paragraph (4).
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Section 10(B)(5)
(5) Pilot members of the SSC (i.e. both the basic and total
committees as provided in Section 10(B)(1) above) shall be
entitled to expenses as provided in Section 7(A)(1), and
shall be entitled to reimbursement for flight pay loss
incurred while attending meetings convened by the Company
for the purpose provided in Section 10(B)(1) above. In
addition, the chairman of the SSC shall be entitled to
expenses if he/she attends the Basic SSC meetings. Such
reimbursement shall be computed by the same method as is
currently used in determining flight pay loss for other
pilots who are off schedule on ALPA business.
(6) For the purpose of monitoring the bid awards process and
consulting with the Company concerning problems associated
with the process, flight time loss and expenses will be
provided for two (2) members for two (2) months following
full implementation of preferential bidding. Thereafter,
flight time loss and expenses will be for one (1) member up
to three (3) times annually. Such reimbursement shall be
computed by the same method as is currently used in
determining flight pay loss for other pilots who are off
schedule on ALPA business.
In addition, the Managing Director-Crew Resources and
Administration or his/her designee and one (1) pilot member
of the SSC shall meet to review the line construction
parameters for the new bid month. Such flight time loss and
expenses will be at the Association's expense. The Managing
Director-Crew Resources and Administration and the chairman
of the SSC shall schedule such review meeting at the SSC
meeting preceding the bid award process.
(7) The Company may construct as many bid runs as it deems
necessary to efficiently operate the airline.
(a) "Monthly Flying Time" means the sum of total daily
flying time in each category multiplied by the number
of days in the calendar month and from the resulting
figure shall be subtracted the total inoperative time
of those flights that do not operate each day of the
month. To this resulting figure will be added all time
scheduled to be credited under the provisions of
Section 11 (i.e. flight time credit under 11(B),
flight pay assignment, vacation time, sick pay,
training credit, deadhead credit, call out pay,
equipment substitution protection credit, jury duty
credit), charter and ferry flights.
(b) "Target" (TGT) means the amount of hours determined by
dividing all monthly flying time for the bid period
for each category by the number of bid run pilots
available for the bid period by each category. All bid
runs shall be constructed within a range of TGT of at
least plus or minus (+/-) four hours (4:00) and no
more than plus or minus (+/-) five hours, (5:00)
provided further that the minimum bid run shall be
seventy-two hours (72:00) and the maximum bid run
shall be eighty-five hours (85:00).
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Section 10(B)(7)(b), cont.
The Company shall calculate TGT, as stated above,
separately for each category.
The allocation of monthly flying time for each
equipment type and the number of estimated reserve
pilots in each category shall be determined at the
sole discretion of the Company. Each month may be
planned and flown with a different monthly TGT from
seventy-six hours (76:00) to eighty-one hours (81:00),
or any fractional part thereof. All bid runs shall be
constructed within a range of TGT for each status and
equipment at each domicile. All monthly flying time
shall be considered in determining TGT.
Additional flying and OFR trip pay and credit
extending from the previous month into the bid month
shall not be considered during the bid award process,
however if such time, when added to the TGT plus range
exceeds FAR limits minus FAR pad factor, that portion
of such time which exceeds FAR limits minus FAR pad
shall be considered in the bid award process.
Target/High Bid Run Exception. The Company may, at its
-----------------------------
discretion, set the Target up to a maximum of eighty-
four hours (84:00) and allow bid runs to be created up
to a maximum of eighty-eight hours (88:00) for three
(3) bid months (not including December) each calendar
year ("Exception"). This Exception may be applied on a
category by category basis. When the Company elects to
utilize this Exception for a category or categories,
all of the other provisions of this Section 10(B)(7)
shall continue to apply.
(c) "Fixed Daily Rate" (FDR) means the number of hours of
pay and credit fixed at a value of two hours thirty
minutes (2:30) (i.e. 75 Hr./30 Days). For bid run
construction purposes, all activities whose credit
depends on a daily rate shall be valued using the FDR.
(d) "Average Line Value" (ALV) means the total credit of
all awarded bid runs, excluding supplemental bid runs,
by category divided by the number of bid runs,
excluding supplemental bid runs, by category. For the
purposes of this paragraph, "total credit" includes
additional flying and OFR trip credit extending from
the previous month into the bid month.
(e) Estimated Reserve Count as published in the bid
package is the forecast number of reserve schedule
holders. During bid processing the actual reserve
count may vary from the Estimated Reserve Count.
(8) The SSC shall receive and review the Company's annual flying
plan (updated quarterly), and vacancy projection, monthly
report on staffing and the calculation of the next month's
target. In addition, the Company shall produce other
information pursuant to a reasonable request by the ALPA
Schedule Chairman at least twenty-one (21) days in advance
of the meeting in the form requested.
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<PAGE>
Section 10(B)(8), cont.
Once the target has been received and reviewed by the SSC,
it may not be changed except by mutual agreement of the
Association and the Company. No change will result in the
reduction of the target and no change will be considered
except in unusual circumstances that could not be reasonably
anticipated.
Every effort will be made to notify the pilots in the
categories whose target(s) have changed and the bids will
remain open for a minimum of seven (7) days following the
effective date of the change. Any time parameters (e.g.,
GDO, RGD and balancing) associated with the original bid
closing dates will be extended consistent with the revised
closing date.
(9) The Company shall maintain a reserve staffing complement
sufficient to perform all reserve duties, to assure that
pilots holding a bid run will fly in accordance with the
established scheduled policies, and seniority is observed in
the bid award process.
The Company may award as many reserve schedules as deemed
necessary in each category to protect the operation.
(C) Domicile Scheduling
(1) A Domicile Scheduling Committee shall be established at each
domicile to consult with the local Regional Chief Pilot
concerning all problems of pilot scheduling that are of
concern only to that domicile.
(a) All changes or amendments to the Domestic,
International or combined Domicile Scheduling Policies
as contained in Section 9 shall be mutually agreed to;
however, the Managing Director, Flight Operations may
make temporary changes in such Scheduling Policies
when such changes are required to continue efficient
operation of flights. In such an event, the Managing
Director, Flight Operations, shall without delay,
consult the Negotiating Committee for the purpose of
resolving a mutually approved amendment to cover the
problems which required the changes. For the purpose
of this paragraph, the Domestic, International and
combined Domicile Scheduling Policies will be limited
to those matters and procedures relating to orderly
methods for scheduling pilot personnel which are not
covered in the working agreement.
(b) For each category at each domicile, bid pairings shall
be posted, bid and awarded in accordance with Section
9(A), 9(B), 9(C), 10(A), 10(B), and 10(C) and the
appropriate Schedule Policy. Whenever such policy
provides for "supplemental bid runs", these shall be
construed to be bid runs. Reserve Schedule holders
will be placed in a domicile/equipment reserve
complement and may be utilized on either operation,
qualifications permitting.
(c) Concurrently with posting and bidding of bid pairings,
as provided in Sections 9 and 10, reserve schedules
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<PAGE>
Section 10(C)(1)(c), cont.
shall be posted and bid. A pilot may bid and be
assigned a bid run or a reserve schedule in his/her
category in accordance with seniority.
(d) Pilot statuses for the purpose of this provision are
Captain, First Officer, and Flight Engineer. Each
pilot in each such category who does not hold a bid
run shall hold a reserve schedule.
(e) Pilots may bid reserve conditional upon being or not
being able to be awarded a bid run or reserve schedule
by such bid preference attributes as: days
working/not-working; top down position on the reserve
list as determined by pilots already awarded reserve;
and any of the conditional attributes in the
Preferential Bidding System.
(f) Bid Pilot Duty-Free Periods ("Golden Days")
(i) A bid run pilot may designate as inviolate up to
three (3) periods of up to forty-eight hours
(48:00) each. These periods must be selected
from the duty free periods contained in the
pilot's awarded or assigned bid run, and may be
selected by such pilot any time prior to the
first BLIP process for the new month. During
such inviolate duty free periods a bid pilot
shall not be required to perform any line flight
duty with the Company which includes report
and/or release time, except that he/she may be
required by the Company to complete a flight
assignment which has become non-routine.
(ii) In the event completion of the flight
assignment encroaches on the designated duty
free days, the pilot may designate another duty
free period to replace the one encroached upon.
If unable to re-designate another duty free
period in the current month because of any
scheduled training, vacation, etc., such re-
designation may be made in the following month.
(iii) A pilot may not be scheduled for CQT, or a
proficiency check, during his/her designated
inviolate duty free periods but may be scheduled
for more lengthy forms of training.
(iv) The pilot may not designate an inviolate period
which includes one of the holidays listed in
Section 9(E)(2)(j).
(v) With Company concurrence the pilot may designate
up to three (3) consecutive forty-eight hour
(48:00) periods as inviolate.
(vi) Notwithstanding paragraph 10(C)(1)(f)(i) above,
the Company may balance a pilot in accordance
with Section 9(D)(1) if golden days have not
been designated.
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Section 10(C)(1)(g)
(g) "Training Golden Days" (TGD). Pilots may indicate sets
of forty-eight hour (48:00) TGD preferences equal to
the amount in Section 10(C)(1)(f)(i) beginning on the
first day of the month prior to the bid month. To the
extent possible, such TGDs shall be observed in
seniority order when pre-scheduling available
recurrent training (e.g., CQT or its equivalent).
Input of TGD's shall close twenty-four hours (24:00)
prior to the opening of bids.
(h) A pilot shall be paid and credited for all flight time
pay and credit in the month so earned, subject to
Section 11(B).
(2) Domestic Scheduling Rules
(a) The original monthly projection for pilots holding a
bid run shall not exceed the range of target as
provided in Section 10(B)(7)(b).
(b) In the event a pilot's projected flight time credit
for the month is less than the applicable hours of the
pilot's guarantee, the Company may balance such pilot
at any time during the month subject to the
application of Section 9(D).
(c) If any trip commences (report time) in one (1)
calendar month and ends in the following calendar
month, all of a pilot's calculable flight time pay and
credit earned for the trip shall be paid and credited
in the month earned, subject to Section 11(B).
(d) The Company may schedule a pilot holding a reserve
schedule to complete his/her last trip of the month,
if at the time of leaving his/her domicile, the
scheduled block to block flight time to be flown on
the trip prior to the end of the month will not, when
added to his/her already accumulated credited hours,
total more than his/her monthly bid award ALV.
Additional flying shall be disregarded in making this
calculation.
(3) International Scheduling Rules
(a) The original monthly projection for pilots holding a
bid run may not be constructed to exceed the range of
target as provided in Section 10(B)(7)(b) except the
range of Target may be exceeded if the projection
consists of a single flight assignment. Single flight
assignment means a flight or series of flights
scheduled to depart from the pilot's domicile and
return to the pilot's domicile. It is the intent that
the exception set forth in this paragraph will be used
only where necessary for efficient scheduling.
When pilots are scheduled to exceed the monthly bid
award ALV on a single flight assignment, all credit
hours scheduled in excess of that ALV shall be paid
and credited at the rate of 1.5 hours for each such
hour, prorated.
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Section 10(C)(3)(b)
(b) The Company may schedule a pilot holding a reserve
schedule to complete his/her last trip of the month,
if at the time of leaving his/her domicile, the
scheduled block-to-block flight time to be flown on
the trip prior to the end of the month will not, when
added to his/her already accumulated block-to-block
hours, total more than his/her monthly bid award ALV.
However, in no event shall such reserve schedule
holder be scheduled out of his/her domicile for flight
duty if he/she has accumulated credited hours equal to
or in excess of his/her monthly bid award ALV.
Additional Flying shall be disregarded in making this
calculation.
(c) If the scheduling of pilots under paragraph (b) above,
results in scheduled hours in excess of the monthly
bid award ALV within a month, all credit hours
scheduled in excess of such ALV shall be paid and
credited at the rate of 1.5 hours for each such hour,
prorated in the month earned.
(d) In the event a pilot's projected flight time credit
for the month is less than the applicable hours of the
pilot's guarantee, the Company may balance such pilot
at any time during the month subject to the
application of Section 9(H).
(e) If any trip commences (report time) in one (1)
calendar month and ends in the following calendar
month, all of a pilot's calculable flight time pay and
credit for the trip shall be paid and credited in the
month earned, subject to Section 11(B).
(D) Equipment Substitution
(1) In the event that a different type of equipment should be
substituted on any scheduled flight assignment, or segment
thereof, of a pilot holding a bid run at the pilot's
domicile on origination, (including a satellite/pilot base),
the pilot may be required to deadhead into position to
protect any segment of the pilot's flight assignment.
In the event an equipment substitution occurs on a segment
to which a pilot is positioning to protect, the pilot shall
receive pay and credit for the scheduled time of such
equipment substituted flight segment, or the flight and duty
time rigs in Section 11, whichever is greater.
A pilot who is scheduled to deadhead on that flight that
he/she is being pay protected due to an equipment
substitution to protect his/her next segment, and such
deadhead flight cancels, such pilot will be re-protected on
the next flight providing that particular flight will allow
the pilot to arrive at the station of the flight to be
protected prior to the scheduled departure time of the
flight being protected.
The pilot shall receive pay and credit for the scheduled
time of such original flight assignment, or the flight and
duty time rigs in Section 11, whichever is greater.
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Section 10(D)(2)
(2) Should an equipment substitution occur as in paragraph (1)
above on a flight or segment thereof, of a non bid run
holder that was scheduled as additional flying or OFR and
the non bid run holder is released, he/she will receive call
out pay/credit only, as defined in Section 5(G). Such
pay/credit will not be offset against the non bid run holder
guarantee. If the non bid run holder is required to deadhead
into position to protect any segment of the flight
assignment, he/she will receive pay and credit for the
scheduled time of such original flight assignment, or the
flight and duty time provisions in Section 11, whichever is
greater. Such pay and credit will not be offset against the
non bid run holder guarantee.
(3) Should an equipment substitution occur at other than the
pilot's domicile, as described in (1) and (2) above, or
while transiting the pilot's domicile, the pilot, or non bid
run holder on additional flying or OFR, shall be scheduled
as an extra crew member in accordance with Section 5 of the
FOPM (System Schedule Policy). Such pilot shall be paid and
credited for the scheduled pay and credit in his/her
original flight assignment or for what he/she actually
flies, whichever is greater. Such pay and credit will not be
offset against the non bid run holder guarantee.
(E) Pairing Restoration
Notwithstanding the provisions of Sections 9(D), 9(E), 9(F) and
9(H), the Company will restore crews affected by cancellation
prior to report at domicile and/or release at domicile, due to
non-routine operations, to the remaining unprotected legs of their
original pairing. Restoration of crews to the re-paired remainder
of their original pairing in the event of a cancellation, as set
forth above, will be subject to the Company's discretion in the
event an emergency is declared by the Company. When the Company
does not restore crews to their pairing(s), as set forth above,
due to an emergency, the Company shall notify the System Schedule
Committee in writing within ten (10) days after the emergency of
the reasons supporting the Company's actions. For the purpose of
this provision an "emergency" is defined as any event, including a
meteorological condition, that disrupts more than seven percent
(7%) of the total daily system flight segments.
(F) Bank
(1) The Company shall establish a "positive/negative bank" for
each pilot with over one (1) year of service as a flight
deck crew member. The bank balance will be limited to no
more than fifty hours (50:00) positive and ten hours (10:00)
negative.
(2) Pay hours accrued in excess of the monthly ALV shall be
eligible for deposit in the bank, subject to the bank limit.
(3) A bid run pilot who completes a month with less than ALV may
elect to borrow or withdraw from his/her bank an amount
necessary to bring his/her pay hours up to ALV, subject to
the bank limit.
(4) Pilots may withdraw any positive balance without regard to
ALV.
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Section 10(F)(5)
(5) A pilot shall notify the Company of his/her election to
deposit, withdraw or borrow pay hours for a designated
month, specifying the number of hours to be deposited or
borrowed. Such notification must occur no later than five
(5) days after the end of the designated month.
(6) A pilot with sufficient bank hours above his/her guarantee
equal to or greater than the time of an OFR trip drop may
charge the OFR to his "bank" as a withdrawal and without
adjustment to monthly guarantee or ALV.
(7) The hourly rate of pay used to compute the dollar amount to
be deposited, withdrawn or borrowed will be the pilot's
guarantee rate for the designated month. Deposit amounts
will be debited to the designated month and credited to the
following month. Borrowed or withdrawn amounts will be
credited to the designated month and debited to the
following month. Credited amounts will not offset a pilot's
guarantee.
(8) When a pilot ceases employment with the Company, any
positive bank balance will be added to the pilot's final
paycheck; any negative balance will be deducted from the
pilot's final paycheck.
(G) Satellite Scheduling
(1) The following are approved satellites and may be associated
for any given month with any present domicile (i.e., JFK,
LAX, STL, SFO):
Satellites
----------------------------------------------------
BOS LAS DFW
EWR SFO DEN
IAD RFD TPA
PHL ONT BUR
SAN LGB OAK
PHX SJC MIA/FLL
The above list may be amended by mutual agreement between
the Association and the Company.
Ninety (90) days prior to any domiciles closing, the Company
will meet with the Association to discuss the inclusion of
the closed domicile under the provisions of this Agreement
for the purpose of minimizing disruption to the pilots
involved. All pilots at a domicile that is closed shall be
allowed an unrestricted displacement option to any domicile.
(2) In addition to the satellites provided in paragraph (1)
above, any present domicile may be a satellite of another
domicile for equipment not flown by the domicile/satellite
as of December 8, 1985.
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Section 10(G)(3)
(3) It is not the intent of this Section 10(G) to dilute
seniority at a present domicile. Any non-stop flight of four
hours (4:00) or more between any satellite and a present
domicile or between two present domiciles shall be flown by
a domicile in accordance with normal flight time allocation
rules. Exceptions may be approved by the System Schedule
Committee.
(4) Satellite pairings operating out of the satellite airport
shall be identified by a separate code and posted for bid in
domicile bid packages. Unawarded pairings that originate and
terminate at a satellite shall be placed into open time and
awarded in accordance with pilot open time preferences. If
sufficient open time is known to exist at a satellite, open
time may be advertised at the satellite.
(5) Satellite pairings shall be awarded to pilots bidding such
pairings either by specific pairing, satellite or generic
satellite preferences in accordance with Section 9(B) and
may be awarded to pilots who have not indicated a preference
to avoid satellite pairings. However, pilots who have
indicated a preference to avoid satellite pairings may be
involuntarily assigned to such pairings and will be handled
in accordance with paragraph (8) below.
In addition to legal rest, a no-activity buffer "satellite
pad" shall be scheduled between any domicile and satellite
pairing and any two pairings of different satellites. Back-
to-back same-satellite pairings shall not have any satellite
pad between those pairings.
These satellite pads shall be mutually agreed between the
Company and the Association.
(6) Pilots awarded satellite pairings shall report directly to
the satellite one hour (1:00) prior to the scheduled
departure time of the satellite flight assignment. A pilot
whose bid award contains a majority of satellite pairings at
one location shall, upon request, be provided a mailbox and
suitable free parking at that satellite. A pilot whose bid
award contains any satellite pairing(s) may contact his/her
Regional Chief Pilot to obtain a parking pass and/or for
instructions on parking arrangements at that satellite which
will be subject to reimbursement. All duty limitations, trip
credit, duty credit and expenses for flights originating and
terminating at the satellite shall be based on satellite
report and release times for pilots awarded satellite
pairings.
(7) Reserve coverage of satellite flights shall be provided by
the domicile reserves, except that the Company may advertise
and award satellite reserve schedules to pilots that bid
such reserve schedules if the operation warrants. The
proportion of satellite reserve schedules to domicile
reserve schedules shall be determined by the Company. For a
pilot awarded a satellite reserve schedule, the roles of the
domiciles and the satellite shall be reversed for the
purpose of the provisions of this Section 10(G).
(8) Domicile reserves, domicile drafted pilots, and domicile
pilots involuntarily balanced on or involuntarily assigned
76
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<PAGE>
Section 10(G)(8), cont.
to open satellite flights shall be provided Class B
transportation (or positive off-line transportation if
appropriate) from the domicile to the satellite if
requested. For all pilots assigned satellite flights under
this paragraph, expenses, trip credit and duty credit
provided in Section 11 of the Working Agreement shall be
based on domicile report and release times. Duty limitations
will be the same as the rescheduled maximums in the Diurnal
Table in Section 11(C) of the Working Agreement for the
originating and terminating duty periods of such flight
assignment. A pilot may elect to report directly to the
satellite under this paragraph and will then have his/her
duty limitations and expenses based on the satellite report
and release times. A pilot so reporting shall be provided
Class B transportation if requested. In addition, for the
co-terminal satellite the pilot shall be provided
transportation from the domicile to the satellite. If a
pilot elects to provide his/her own transportation to the
co-terminal satellite, he/she shall receive an expense
allowance of twenty dollars ($20.00) for each such flight
assignment in addition to the expense of long term parking
at the co-terminal satellite, payment of which shall be made
pursuant to the pilot submission of Form G118.
77
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<PAGE>
SECTION 11
HOURS OF SERVICE
(A) General
(1) A pilot shall devote his/her entire professional flying
service to the Company unless granted a specific exception
by his/her Regional Chief Pilot which shall not be
arbitrarily withheld. To apply for such an exception to
engage in outside aviation employment, the pilot shall
submit a request in writing to his/her Regional Chief Pilot
which shall include:
The name, address and phone number of the outside
employer.
The nature of such employment.
The expected duration of such employment.
A written statement from both the pilot and the
outside employer that such employment shall not
conflict with the pilot's duties and flight time
limitations as a TWA pilot.
Notwithstanding the foregoing, nothing in this Agreement
shall be construed to prevent any pilot from affiliating
with the military services of the United States.
(2) Reasonable effort shall be made to schedule a pilot who
holds a bid run as the result of his/her domicile bid
preference in a manner which will, as nearly as possible,
use all the pilot's allowable monthly hours as provided in
(5) below.
(3) The provisions of this Section are not intended to determine
the number of pilots at a domicile but are intended to apply
after operation of the provisions of Section 10.
(4) No pilot shall be required to keep the Company advised of
his/her whereabouts on the pilot's days off. However, if a
pilot is subject to a Class A balance for any reason, he/she
shall indicate where he/she may be contacted until the Class
A balance is satisfied.
(5) A pilot shall not be scheduled by the Company to exceed
his/her monthly bid award ALV as provided in (7) below
except as provided in Sections 9 and 10 of this Agreement.
(6) If, as a result of a pilot being in training during the
latter portion of a calendar month, he/she accumulates
flight time credit sufficient to exceed his/her maximum
allowable monthly limitations, such excess shall be paid and
credited in the month earned.
(7) For purposes of this provision, and (5) above, credited
flight time shall consist only of:
(a) Flight time credit as provided in Section 11(B).
(b) Flight pay assignment as specified in Section
5(E).
78
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<PAGE>
Section 11(A)(7), cont.
(c) Vacation time as specified in Section 14(C).
(d) Sick pay time as specified in Section 15.
(e) Training credit time as specified in Sections 4(D) and
6(A)(4).
(f) Call-out pay as specified in Section 5(G).
(g) Equipment substitution protection credit as specified
in Section 10(D), as appropriate.
(h) Jury Duty as specified in Section 5(F).
(B) Minimum Credit
(1) When a pilot returns to his/her domicile from a trip, the
pilot will be credited with flight time credit as determined
in the following manner:
(a) The credit for each leg of the trip will be the
greater of actual block-to-block or scheduled block-
to-block time on each leg.
(b) Additional credit resulting from the application of
the provisions of (A)(7) of this Section will be added
to the greater of the actual block-to-block or
scheduled block-to-block time on each leg.
(c) The amounts computed in (a) and (b) above for each on-
duty period shall be totaled and the result compared
with the total averaged credit amount earned under
2(d) below, and the pilot shall be credited with the
greater.
(d) The amount computed in (c) above for each on-duty
period on the trip shall be totaled and the result
compared with the credit earned under (3)(b) below and
the pilot shall be credited for purposes of (A)(5) of
this section with the greater.
(2) Duty Time
(a) "On-Duty Period," for the purposes of this Section
11(B)(2) only, means all the time which passes from
the time a pilot is required to report, or actually
reports, whichever is later for a flight assignment
and shall continue until fifteen minutes (0:15) after
block-in time for Domestic and one hour (1:00) after
block-in time for International at the conclusion of
the flight assignment. If a pilot commences or
completes an on-duty period by deadheading as provided
in (2)(b) below, the on-duty period shall begin at the
block-out or end at the block-in time of the flight.
A pilots "On-Duty Period" shall run continuously until
broken by one of the following:
(i) A scheduled or actual layover period of not less
than nine hours and fifteen minutes (9:15)
(block-in to block-out), or
79
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<PAGE>
Section 11(B)(2)(a), cont.
(ii) For domestic operations, at other than the
pilot's scheduled layover station, an actual FAR
legal rest period (but not less than nine hours
and fifteen minutes (9:15) block-in to block-
out), or
(iii) Release to return to domicile.
(b) All time spent in deadheading, which has been pre-
scheduled in a flight pattern, will be included in a
pilot's on-duty period. All other time spent
deadheading will be included in a pilot's on-duty
period, except this shall not apply to deadheading to
or from a pilot's domicile unless deadheading pursuant
to paragraph 23 of Letter VI.
(c) When a pilot deadheads at Company request from
domicile to protect a flight at another station, the
pilot shall be deemed to be on duty for purposes of
this Section 11(B)(2), upon arrival at that station,
unless he/she is immediately released for a period of
two hours (2:00) rest for each one hour (1:00) of
deadheading with a maximum of ten hours (10:00) block-
in to block-out.
(d) A pilot who operates a flight or flights during an on-
duty period as provided in (2)(a) above, shall receive
flight time credit of:
(i) one hour (1:00) for each two hours (2:00) of
such on-duty time (prorated) between the hours
of 0600-2159 local departure, or any portion
thereof, or
(ii) one hour (1:00) for each one hour forty-five
(1:45) minutes of such on-duty time (prorated)
between the hours of 2200-0559 local departure,
or any portion thereof,
with a minimum of five hours (5:00) for a single duty
period flight assignment or during: 1998 an average of
four hours forty minutes (4:40), 1999 an average of
four hours fifty minutes (4:50), and 2000 an average
of five hours (5:00) per duty period for flights
containing more than one (1) duty period. The total
duty credit for the entire pairing shall be compared
to the total services performed on the pairing and the
pilot shall receive the greater.
(e) Credit due under (d) above shall be computed as an
extension of the final portion of the last leg flown
as an operating crew member at the completion of
his/her "on-duty" period.
(3) Time Away From Domicile
(a) For the purposes of this Section, "Trip Hours" means
all the time which passes from the time a pilot is
required to report, or actually reports, whichever is
later, at the airport of such pilot's domicile prior
80
<PAGE>
<PAGE>
Section 11(B)(3)(a), cont.
to proposed flight departure, until fifteen minutes
(0:15) after block-in time for Domestic and one hour
(1:00) after block-in time for International, after
arrival at the pilot's domicile for a legal rest, free
from all duty with the Company. If a pilot departs
his/her domicile as a deadheading crew member for the
purpose of protecting a flight, trip hours shall
commence at the block-out time of the flight; if a
pilot arrives at domicile as a deadheading crew
member, trip hours shall be considered to end at the
block-in time for the flight. When surface
transportation is involved between the airports listed
in Section 8(C), the appropriate tabulated travel time
will be included in a pilot's trip hours.
(b) For each trip, a pilot shall receive a minimum flight
time credit of one hour (1:00) for each four hours
(4:00) through 1998. Beginning January 1, 1999, one
hour (1:00) for each three hours forty-five minutes
(3:45) and, beginning July 1, 1999 and thereafter, one
hour (1:00) for each three hours thirty minutes (3:30)
trip hours as defined in (a) above, prorated.
(c) Credit due under (b) above shall be computed as an
extension of the final portion of the last leg flown
as an operating crew member.
(d) The provisions of Section 11(B)(2) and (3) above shall
not apply to the following:
(i) Flights local in nature.
(ii) While assigned to duty within the scope of
Section 5(I).
(iii) Flights in which a landing has not been made at
an airport other than the airport of takeoff
except when the flight returns to the airport of
takeoff due to an emergency as defined by
Chapter 9 of the FOPM.
(iv) Excess trip hours resulting from the pilot's
request to deadhead on flights other than those
offered by the Company.
(4) If a strike, work stoppage, picketing by other
employee groups, or personal reasons, results in
additional trip hours for a pilot, such additional
trip hours shall not be included in the computation
outlined in this Section 11.
(5) A pilot who, in the course of his/her duties for the
Company, is held hostage, is interned, is held
captive, or is missing as a result of hostile action
by any person, group of persons, or foreign
government, shall receive flight pay and credit under
(B)(3) above for a period of three hundred forty hours
(340:00) beginning at the block-out time of the flight
segment on which the hostile action occurred, unless
the pilot is released prior to the expiration of three
hundred forty hours (340:00). At the expiration of
such period, the pilot shall come under the provisions
of Section 27.
81
<PAGE>
<PAGE>
Section 11(C)(2)
(C) Flight Time/Duty Time Limitations - Domestic Operations
(1) A pilot may not be scheduled to exceed eight hours (8:00)
duty aloft between required rest periods.
(2) Pilots shall be scheduled for block-in to block-out rest
plus report and release, as shown in the following chart
based on their scheduled duty aloft within any twenty-four
consecutive hours (24:00).
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------
Start Here Column A Column B Column C Column D
- - -----------------------------------------------------------------------------------------------------------------------
Amt. of Duty Normal Scheduled Actual Rest If Scheduled or
Aloft Minimum Rest May Be May Be Reduced Actual is Less
Scheduled Rest: Reduced To: To: Than Amt. in Col.
Within Any 24- A, the Next
Hour Period: Minimum Rest Must
Not be Less Than:
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less Than 8 1 + 9 + :15 1 + 9 1 + 8 + :15 1 + 10 + :15
Hours
- - -----------------------------------------------------------------------------------------------------------------------
At Least 8 1 + 10 + :15 1 + 9 1 + 8 + :15 1 + 11 + :15
Hours but Less
than 9 Hours
- - -----------------------------------------------------------------------------------------------------------------------
9 Hours or 1 + 11 + :15 1 + 9 + :15 1 + 9 + :15 1 + 12 + :15
More
- - -----------------------------------------------------------------------------------------------------------------------
<FN>
Note: If rest is reduced on a schedule basis as in Column B or in actual
operation as in Column C, the next rest period must begin within twenty-
four hours (24:00) of the start of the reduced rest period and cannot be
less than the rest shown in Column D above.
- - -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(3) A pilot's on-duty period (including all deadheading), shall
mean all the time which passes from the time a pilot is
required to report, or actually reports, whichever is later,
for his/her flight assignment and shall continue until
fifteen minutes (0:15) after the block-in time of the last
flight of his/her on-duty period. The fifteen minutes (0:15)
as above shall not apply when completing an on-duty period
by deadheading, but will end at the block-in time of such
deadhead flight. The appropriate maximum on duty limitations
are determined by the diurnal chart below.
82
<PAGE>
<PAGE>
Section 11(C)(3), cont.
[GRAPH]
Report Time - Local Departure Station
A pilot may be scheduled to be on-duty in accordance with
the above chart. The maximum scheduled on-duty period is
thirteen hours (13:00), during the hours of 0600 and 1700.
Between the hours 1700 and 2400 this scheduled on-duty
maximum shall decrease on a minute by minute basis until it
reaches a low of six hours (6:00) scheduled on-duty at 2400.
The six hours (6:00) maximum scheduled on-duty period shall
be maintained between the hours of 2400 and 0400 subject to
the provision outlined below. Beginning at 0400 and
continuing until 0600, the scheduled on-duty maximum shall
increase at the rate of three and one half minutes (3 1/2)
for each minute until the thirteen hours (13:00) scheduled
on-duty maximum is again reached at 0600.
Between the hours of 2130 and 0443, the following exceptions
shall apply to the maximum scheduled on-duty period:
(a) A non stop flight for which a pilot reports during
these hours may be scheduled up to a maximum of eight
hours and thirty minutes (8:30) provided that flight
segment is the only one scheduled during that on-duty
period.
(b) An on-duty period containing two (2) flight segments
for which a pilot reports during these hours may be
extended by two hours (2:00) up to a maximum of eight
hours and thirty minutes (8:30).
(c) An on-duty period containing three (3) flight segments
for which a pilot reports during these hours must be
scheduled in accordance with the chart. The scheduled
on-duty periods as outlined in the above chart and in
paragraphs (a), (b) above and this paragraph (c) are
subject to the extensions listed in paragraphs (i) and
(ii) of this Section 11(C)(3). The rescheduled on-duty
maximums shall be one hour (1:00) more than those
listed above as scheduled on-duty maximums.
83
<PAGE>
<PAGE>
Section 11(C)(3)(c), cont.
The maximum on-duty shall be as follows:
0500 - 1759: 15:00 hrs
1800 - 2059: 14:00 hrs
2100 - 0459: 13:00 hrs
(i) The scheduled on-duty times reflected above may
be extended up to two hours (2:00) in order to
allow for deadhead to domicile at the conclusion
of a flight pairing, (except charter flights are
limited to a maximum of fifteen hours (15:00)
including deadhead). This extension can be
scheduled for deadhead only. A reserve schedule
holder subject to this extension will be allowed
twelve hours and thirty minutes (12:30) free
from duty after arrival at his/her domicile.
(ii) The maximum on-duty times reflected above may be
exceeded at the discretion of the Captain.
(iii) A pilot's on-duty period cannot be broken by an
off-duty period of less than ten hours (10:00),
scheduled block-in to block-out, or less than
nine hours and fifteen minutes (9:15) actual
block-in to block-out. When applicable the co-
terminal times listed in Section 8(C) shall be
added to both the scheduled and the actual off-
duty periods above. A reserve pilot's on-duty
period cannot be broken by an off-duty period at
his/her domicile of less than twelve hours and
thirty minutes (12:30), block-in to block-out,
or more where required by FARs.
(4) No pilot shall be assigned any duty with the Company during
any rest period specified above.
(5) A pilot shall not be scheduled for duty aloft if his/her
total flight time will exceed thirty hours (30:00) in any
seven (7) consecutive day period. The twenty-four hour
(24:00) period free of duty every seven days, as required by
FAR, shall be at the pilot's domicile.
(D) Flight Time/Duty Limitations - International Operations
(1) For the purposes of this Section 11(D), a pilot's on-duty
period (including all deadheading) shall mean all the time
which passes from the time a pilot is required to report, or
actually reports, whichever is later, for a flight
assignment and shall continue until forty-five minutes
(0:45) after block-in time of the last flight of his/her on-
duty period. The forty-five (0:45) minute period as above
shall not apply when completing an on-duty period by
deadheading but will end at the block-in time of such
deadhead flight. The on-duty period as above cannot be
broken by an off-duty period of less than thirteen hours
thirty minutes (13:30) scheduled or less than eleven hours
thirty minutes (11:30) actual block-in to block-out. For the
purposes of this Section 11(D) and Section 11(B) above, the
84
<PAGE>
<PAGE>
Section 11(D)(1), cont.
standard international domicile report time for working
flights (not deadheading flights) shall be one hour and
thirty minutes (1:30) prior to departure.
(2) For purposes of this Section 11(D), a two (2) pilot crew
shall consist of one (1) Captain and one (1) First Officer.
A three (3) pilot crew shall consist of one (1) Captain and
two (2) First Officers. On non-stop flights in excess of
twelve hours (12:00) duty aloft a four(4) pilot crew shall
consist of at least one (1) Captain and any combination of
the remaining three (3) pilots (e.g. one (1) Captain and
three (3) First Officers, two (2) Captains and two (2) First
Officers etc.).
(a) Two pilot crew flight time/duty limitations.
(i) A pilot may be scheduled to a maximum of eight
hours (8:00) duty aloft; twelve hours thirty
minutes (12:30) on-duty on flights which include
an ocean crossing. The maximum duty period for
pilots operating under this paragraph is fifteen
hours (15:00) (extendable to sixteen hours
(16:00) at the Captain's discretion).
(ii) During a single duty period a pilot will not be
scheduled to exceed:
a. Eastbound: More than two (2) operating
segments, or deadhead plus one (1)
operating segment.
b. Westbound: More than two (2) operating
segments plus deadhead to domicile.
(iii) The Company shall endeavor to accomplish the
deadheading of two (2) pilot crews by the most
direct method.
(iv) A pilot shall not be scheduled for duty aloft
for more than eight hours (8:00) during any
twenty-four consecutive hours (24:00), unless
he/she is scheduled for an intervening rest
period at, or before, the termination of eight
scheduled hours (8:00) aloft. Such rest period
shall equal twice the number of hours aloft
since the last preceding rest period, and in no
case shall the rest period be less than thirteen
hours thirty minutes (13:30) scheduled block-in
to block-out nor less than eleven hours thirty
minutes (11:30) actual block-in to block-out. If
a pilot flies over eight hours (8:00), he/she
will receive a minimum of eighteen hours (18:00)
rest actual block-in to block-out.
(b) Three (3) pilot crew flight time/duty limitations.
A pilot may be scheduled in accordance with (i), (ii)
or (iii) below, as applicable, on flights which
include an ocean crossing.
85
<PAGE>
<PAGE>
Section 11(D)(2)(b)(i)
(i) On flights scheduled to be flown nonstop: the
maximum scheduled duty aloft is twelve hours
(12:00) duty aloft; the maximum scheduled on-
duty is fifteen hours (15:00).
(ii) On flights scheduled for one (1) intermediate
stop: the maximum scheduled duty aloft is ten
hours thirty minutes (10:30); the maximum
scheduled on-duty is fifteen hours (15:00).
(iii) On flights scheduled for two (2) intermediate
stops: the maximum scheduled duty aloft is ten
hours (10:00); the maximum scheduled on-duty is
fifteen hours (15:00).
(iv) A pilot's rest period shall equal twice the
number of hours aloft since the last preceding
rest period, and in no case shall the rest
period be less than thirteen hours thirty
minutes (13:30) scheduled (block-in to block-
out) nor less than eleven hours thirty minutes
(11:30) actual (block-in to block-out), and in
no case shall more than sixteen hours (16:00)
scheduled (block-in to block-out) be required.
(c) Four (4) pilot crew flight time/duty limitations
A pilot may be scheduled in excess of twelve hours
(12:00) duty aloft. On such flights the maximum
scheduled on-duty is sixteen hours (16:00) and the
maximum landings is two (2). On flights scheduled for
two (2) landings, there shall be two (2) captains.
A pilot's rest period shall equal twice the number of
hours aloft since the last preceding rest period, and
in no case shall the rest period be less than thirteen
hours thirty minutes (13:30) scheduled (block-in to
block-out) nor less than eleven hours thirty minutes
(11:30) actual (block-in to block-out), and in no case
shall more than sixteen hours (16:00) scheduled
(block-in to block-out) be required.
(d) If the actual flight time for a flight scheduled for
eight hours (8:00) or less exceeds eight hours (8:00)
more than fifty percent (50%) of the time in two (2)
consecutive months, then in the following two (2)
months such flight shall be scheduled with a three (3)
pilot crew in accordance with (b) above and such three
(3) pilot crew shall continue to be assigned to this
flight until the actual flight time for this flight is
eight hours (8:00) or less, more than fifty percent
(50%) of the time in a subsequent consecutive two (2)
month period.
If the actual flight time for a flight scheduled up to
twelve hours (12:00) exceeds twelve hours (12:00) more
than fifty percent (50%) of the time in two (2)
consecutive months, then in the following two (2)
months such flight shall be scheduled with a four (4)
pilot crew in accordance with (c) above and such four
86
<PAGE>
<PAGE>
Section 11(D)(2)(d), cont.
(4) pilot crew shall continue to be assigned to this
flight until the actual flight time for this flight is
twelve hours (12:00) or less, more than fifty percent
(50%) of the time in a subsequent consecutive two (2)
month period.
For purposes of this paragraph (d), two (2)
consecutive months means from the twentieth (20th) of
the first month to the twentieth (20th) of the third
month (i.e. January 20 to March 20).
(3) When a pilot deadheads under this Section 11(D), the
maximum scheduled on-duty times referred to in (a) and
(b) above may be extended for an additional period of
up to two hours (2:00) in order to allow for deadhead
to a flight deck crew member's domicile at the
conclusion of a flight pairing. This extension may be
scheduled for deadhead purposes only, but in no event
shall it be scheduled to exceed sixteen hours (16:00)
on duty. A reserve bid holder subject to this
extension will be allowed a minimum of twelve hours
and thirty minutes (12:30) free from duty after
arrival at his/her domicile. The minimum rest period
preceding a duty period consisting solely of
deadhead/return to domicile shall be eleven hours
(11:00), (block-in to block-out), except when such
deadhead follows on eastbound ocean crossing in which
case such minimum rest shall be thirteen hours and
thirty minutes (13:30) scheduled, eleven hours and
thirty minutes (11:30) actual, (block-in to
block-out).
(4) Pilots required to deadhead eastbound or westbound
across the Atlantic, Pacific, or any portion thereof,
will not be required to act as operating crew members
thereafter without an intervening rest period. This
provision shall not apply to flights in the Caribbean.
(5) No pilot shall be assigned to any duty during any rest
period.
(6) The duties of the First Officers shall be assigned by
the Captain on three (3) and four (4) pilot crews.
Each First Officer shall be qualified to relieve both
operating positions en route.
(7) Operating Flight Crew Seat / Facilities:
(a) For duty periods greater than eight hours (8:00)
and less than twelve hours (12:00) aloft, the
Company shall block the first row, left seat on
the aircraft now designated as Row 1, Seat 1,
non-smoking section in the First Class cabin for
use as the operating flight crew seat.
(b) For duty periods greater than twelve hours
(12:00) aloft, the Company shall provide
adequate sleeping quarters in accordance with
FAR 121.485(a). Such sleeping quarters shall be
as level as practicable during cruise flight and
shall have an approximate surface of 78 x 30
inches. Further, there shall be suitable means
to ensure occupant privacy.
87
<PAGE>
<PAGE>
SECTION 12
RESERVE SCHEDULE POLICY
DOMESTIC and INTERNATIONAL
(A) GENERAL
(1) The Company shall maintain a reserve staffing complement
sufficient to perform all reserve duties and to assure that
pilots holding a bid run will fly in accordance with
established scheduling policies.
Reserve requirements will be met by constructing reserve
schedules. The Company may award as many reserve schedules
as deemed necessary in each category to protect the
operation.
Further, blocks of reserve day availability (RDAs) may be
placed in open time and be assigned in the same manner as
other additional flying. Any pilot that acquires a reserve
block will receive the fixed daily rate (FDR) or services
performed, whichever is greater, for each day of such
reserve duty. Further, any pilot that acquires such RDA will
be considered a Short Call Reserve as outlined in Section
12(B)(3)(a) below for the duration of the assignment.
Volunteer reserve duty and any resulting flying, shall be
paid and credited as additional flying for bid run holders
and reserve pilots.
(2) At domiciles where both domestic and international
operations are flown, the Company may establish an equipment
reserve complement combining domestic and international
operations.
(3) A reserve schedule holder, or a reserve officer, may not be
scheduled to exceed his/her monthly bid award ALV except as
provided in Section 10(C)(2)(d) and 10(C)(3)(b).
(B) RESERVE CONTACT/AVAILABILITY
(1) All reserve schedule holders shall be required to be
available by telephone or pager. A reserve schedule holder
using a pager must respond within fifteen (15) minutes of
being contacted.
(2) Any pilot returning from RGD, vacation or any duty-free
period will be responsible for any reserve assignment given
at the times in Section 12(B)(3)(a)(v).
(3) Reserve schedule holders will be placed on Short Call or
Long Call in accordance with the following:
(a) Short Call
(i) Reserve schedule holders who are not on flight
duty, days off, lost time, or an approved
release from crew schedule are eligible to be
placed on Short Call.
88
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<PAGE>
SECTION 12(B)(3)(A)(II)
(ii) Short Call reserve schedule holders are required
to be within two-hours thirty minutes (2:30) of
their domicile/satellite/pilot base. The two-
hour thirty minute (2:30) contact is measured
from the first attempt by crew schedule to
contact such pilot.
(iii) Reserve schedule holders on Short Call shall not
exceed the lesser of twenty percent (20%) of the
number of reserve schedule holders awarded in
the instant category, or fifty percent (50%) of
the number of reserve schedule holders available
on the instant day both rounded up to the next
whole number, and never less than two (2) if
available.
(iv) A reserve schedule holder with a known activity
assigned that day, or one that will be released
in accordance with Section 12(B)(4) below, shall
not count toward the number on Short Call.
(v) The Short Call assignments shall normally be
available for viewing via CAMS CRT, home access,
voice-mail or telephone contact with CCS after
1200 and 2000 Central Time. Pilots are
responsible to okay this Short Call assignment
by 1300 and 2100, respectively. In addition, any
time a pilot on Short Call is called out for a
flight assignment, CCS shall call the next
reserve schedule holder on the list, who shall
then position himself/herself for Short Call.
(vi) A reserve schedule holder shall leave Short Call
only through flight assignment, training
assignment, any type of duty-free period, or
released by the Company.
(b) Long Call
(i) Reserve schedule holders who are not on flight
duty, days off, lost time or Short Call will be
considered on Long Call.
(ii) Pilots on Long Call will be required to position
for Short Call or a flight assignment within
eight hours (8:00) if contacted between the
hours of 0400-1559, local domicile time, or
within seventeen hours (17:00) if contacted
between the hours of 1600-0359, local domicile
time. These times are measured from the first
attempt by crew schedule to contact such pilot.
(4) Pilots within twelve hours (12:00) of the beginning of
reserve golden days (RGDs), vacation, or any duty-free
period shall be released from the requirement to be within
two-hours and thirty minutes (2:30) of the
domicile/satellite/pilot base at which he/she is based and
the requirement to be available by telephone or pager,
unless such pilot is notified prior to those twelve hours
(12:00) that:
89
<PAGE>
<PAGE>
SECTION 12(B)(4)(A)
(a) he/she is assigned a flight, or
(b) notwithstanding the provisions of paragraph 12(B)(6),
due to reserve availability, the instant pilot's
services are required.
(5) Flight assignments departing prior to 12:00 local domicile
time will normally be assigned prior to 23:00 local of the
previous day.
(6) No attempt shall be made to contact a pilot holding a
reserve schedule unless he/she is needed for a duty
assignment.
(7) If necessary for operational reasons, the Company may assign
additional reserve schedule holders to Short Call, in the
order specified by paragraph (C)(1) below, in excess of the
provisions in paragraph (B)(3)(a)(iii) above. Such
additional reserve schedule holders shall be assigned for
twenty-four hours (24:00), renewable to a maximum of forty-
eight hours (48:00). The end time of such assignments shall
be considered an in-time for the purposes of Section
12(C)(1)(b).
(C) ASSIGNMENT OF OPEN TIME
(1) Flights assigned to reserve schedule holders not on their
days off shall be in the following order:
(a) All reserve schedule holders who have requested flight
assignments, in seniority order, shall be placed on
Short Call. Such requests must be expressed to CCS via
CAMS or voicemail. Pilots shall be able to view the
reserve list in order to identify those pilots who
have indicated a "request" option. The request is
valid for a calendar day, expiring at midnight local
domicile time, and may not be taken out once input. At
the expiration of his/her "request", the reserve
schedule holder will revert to his/her first-in,
first-out position on the reserve list, as determined
by Section 12(C)(1)(b). A reserve schedule holder may
not exercise this option once his/her credit
projection is over his/her guarantee minus ten (10)
hours, exclusive of additional flying and OFR.
(b) Reserve pilots will be assigned on a first-in, first-
out basis. First-in time shall be determined by the
release time of the last duty assignment, or 0001 of
the first day of the month for pilots not out on a
duty assignment at the beginning of the month. The
first-in time for a reserve schedule holder returning
to service from Reserve Golden Days (RGDs), vacation,
any type of duty-free period, or a Short Call
assignment under Section 12(B)(7) shall be the end
time of such event.
If the "in" time above is the same for two or more
pilots, reserve list placement shall be made in
inverse order of seniority.
90
<PAGE>
<PAGE>
SECTION 12(C)(2)
(2) Notwithstanding (C)(1) above, a reserve schedule holder with
less than FAR 121.438b experience will not be assigned a
pairing(s) that has assigned to it another pilot who does
not meet the requirements of FAR 121.438b.
(3) A reserve schedule holder who has been assigned to an open
flight may be removed from such flight to protect any other
flight if no other reserve is available. Further, a reserve
pilot may be removed from an assigned flight in accordance
with Section 9(D)(2)(d).
(4) Subject to Section 12(D)(4), assignment of a reserve to a
flight shall normally consider the ability of the reserve to
complete the flight assignment within the reserve's duty-
days and shall not impinge on the reserve's scheduled duty-
free periods.
(D) RESERVE SCHEDULES/DUTY-FREE PERIODS
(1) Subject to Section 12(E) below, pilots shall receive not
less than the following number of twenty-four hour (24:00)
periods at their domicile (either temporary or permanent)
free from all duty with the Company during each full month
of service as a reserve schedule holder or reserve officer:
Bid month duration : 31 days 30 days
------- -------
Effective 1998 : 14 13
01 January 1999 : 13 13
01 January 2000 : 13 12
01 January 2001 : 12 12
Proration of such duty free-periods under this provision
shall be to the nearest whole period. The foregoing
notwithstanding, the duty-free periods under this provision
shall not be prorated for days lost for ALPA business or
death in family as provided in Section 15(I).
(2) The Company shall award sufficient reserve schedules to
perform all reserve duties in each pilot category. The
number of reserve schedules will be estimated and published
as the estimated reserve count. Upon award, the reserve
schedules will be sequentially numbered. Reserve schedules
shall be awarded in accordance with the following:
(a) Reserve schedules shall be built in seniority order by
the preferential bid system using the pilot's
appropriate bid preference entries as provided for in
Section 9(B).
(b) In addition to the requirements of Section 12(D)(2)(a)
above, the Company shall also publish three (3)
reserve schedules of time (one each) for each pilot
category, which shall include the first, middle, and
the last parts of each month as single, continuous
duty-free periods, in the amounts determined by
paragraph (D)(1) above. Should a change in Federal Air
Regulations affect the provisions of this paragraph,
the parties shall meet and negotiate amendments to
this paragraph. Pilots awarded these reserve schedules
shall not be awarded supplemental bid runs. The
91<PAGE>
<PAGE>
SECTION 12(D)(2)(B), cont.
Company is not required to award these reserve
schedules if not bid.
If a pilot has an activity (other than additional
flying and OFR) already scheduled on a date which
would otherwise be awarded off, the impinged day(s)
off shall instead be awarded as close as possible to
the end of the first spread, the beginning of the last
spread, or to both ends of the middle spread.
(c) Pilots may request up to four (4) blocks of days off.
However, no block may contain less than three (3) days
off unless otherwise requested by the pilot. Each
spread of days off must be separated by at least three
(3) duty days. The duty-free period preferences
expressed by the pilot shall be granted to the extent
possible and shall not contain any black out periods.
(3) A pilot's duty-free period(s) may never be changed
retroactively. Except as provided in Section 12(D)(4) below,
a pilot's duty-free period(s) may be changed prospectively
by mutual agreement between the pilot and the Company.
However, when no other reserve pilot is available for the
flight and the open flight is in Red Time as defined in
Section 9(H), the Company may change such duty-free
period(s) without the pilot's consent. If the open flight is
in Yellow Time, the Volunteer Fly List must first be run.
The Company shall not allow an open flight in Yellow Time to
go unstaffed until Red Time in order to avoid running the
VFL.
(4) In the event a non-routine operation prevents the pilot from
returning to his/her domicile in time to take his/her duty-
free period within the month in which it was scheduled
he/she shall, if he/she holds a reserve schedule the
following month, be granted only those missed days off in
addition to his/her regular scheduled duty-free period(s)
the following month. In the event the pilot is a bid run
holder the following month, he/she shall receive the FDR for
each day, or portion thereof, such pilot is unable to take
his/her duty-free days in the month in which they were
awarded. Such pay shall not be offset against any pay
guarantees.
When operationally necessary to move a reserve's duty-free
periods to protect the operation, the Company will make
every effort to relieve the reserve prior to the
commencement of his/her duty-free period. Duty-free periods
moved under this provision shall be rescheduled on a one-
for-one basis, or the pilot may elect to receive the FDR in
lieu thereof. Such pay and credit shall not be offset
against his/her guarantee.
(5) Reserve "Golden Days" (RGDs). A reserve schedule holder may
designate as "golden" a period of consecutive duty-free
twenty-four (24) hour periods, not to exceed six (6) periods
of the pilot's duty free periods. A pilot may not designate
as an RGD a day listed in Section 9(E)(2)(j). Such RGD
designation may be made via CAMS or direct telephone contact
with CCS not later than forty-eight hours (48:00) prior to
the beginning of the bid month.
92
<PAGE>
<PAGE>
SECTION 12(D)(6)
(6) Trading of Reserve Days Off: Reserve schedule holders may
trade blocks of duty-free periods with other reserve
schedule holders. Such duty-free blocks must be equal
twenty-four (24) hour periods. The minimum number of days
between traded duty-free periods must not be less than three
(3) days. However, where the majority of flight pairings in
a category exceed three (3) days, the Company may require
more than three (3) days between traded duty-free periods.
(E) RESERVE GUARANTEE OPTION (RGO)
A reserve schedule holder's guarantee shall be as set forth in
Section 4(C). At the time of bidding, a reserve schedule holder
may request his/her guarantee be increased by two days at the FDR.
The Company shall have sole discretion to approve such request. If
approved, the pilot's allotted duty-free periods shall be reduced
by two (2). Such reduction may also be requested after the start
of the bid period. The reduction of the specific twenty-four hour
(24:00) periods shall be mutually agreeable between the pilot and
crew schedule. A pilot desiring to exercise the RGO shall so
indicate in his/her monthly bid or via the appropriate CAMS entry.
(F) MISCELLANEOUS
(1) Reserve rest. In addition to the reserve rest requirements
set forth in Section 11(C)(3), the following shall apply: If
a reserve pilot is called to the airport for the purpose of
acting as a pilot on a flight assignment, and is
subsequently removed from the flight assignment for any
reason after report time, that pilot shall receive the
minimum rest stipulated in Section 11(C)(3). Additionally,
the provisions of Section 5(G) shall apply if the pilot is
removed after report.
(2) When notified, the Company shall advise the pilot of the
flight identification and report/release times.
(3) For a reserve schedule holder who has completed one (1) year
of service with the Company as a flight deck crew member,
Section 9(F) additional flying shall not be offset against
his/her guarantee. A reserve schedule holder with less than
one (1) year of service as a flight deck crew member shall
be compensated for Section 9(F) additional flying in
accordance with Section 4(B)(1)(b)(ii) of the Agreement.
93
<PAGE>
<PAGE>
SECTION 13
MOVING EXPENSES
(A) Pilots who are displaced will be considered involuntarily
transferred. Such pilots who are involuntarily transferred within
the United States to a new domicile which is more than 75 miles
from their current domicile shall be afforded the following
relocation benefits. For the purpose of this Section 13, such
relocation benefits shall be associated with the geographic
relocation of the pilot's principal residence in the former
domicile to within a 125 mile radius of the new domicile:
(1) The Company will arrange for and cover the cost of shipment
of up to 15,000 pounds of personal household goods and
personal belongings, including charges for packing and
unpacking, insurance, and, if necessary, storage for a
period not to exceed thirty (30) days at either end of the
move.
(2) Expenses for the moving of up to two (2) vehicles shall be
allowed each pilot at the rate of twenty cents ($0.20) per
mile for the most direct AAA mileage route between the
pilot's former and new domicile. The payment will be the
mileage's set forth in the table below. Employees will be
expected to travel a minimum of 300 miles per day.
MILEAGE'S BETWEEN DOMICILES
Between AND Mileage
------- --- -------
JFK STL 999
JFK LAX 2787
JFK SFO 2923
STL LAX 1837
STL SFO 2113
LAX SFO 384
(3) A one-time lump-sum relocation allowance up to two thousand
five hundred dollars ($2,500.00) will be provided to the
pilot to help defray the costs of temporary living and
incidentals. Receipts are not required. No additional
payments or reimbursements will be provided for hotels,
meals, car rental, telephone calls, taxis or other
incidental relocation expenses except as may be provided
herein. An additional lump-sum relocation allowance up to
two hundred fifty dollars ($250.00) will be provided for the
pilot's spouse to help defray the cost of home finding at
the new domicile. Receipts are not required.
If a pilot voluntarily leaves TWA's employ within twenty-
four (24) months from the date of transfer, the pilot shall
repay TWA the lump-sum relocation allowance(s) he/she
received as follows:
Proportion of
Months of service completed at new allowance(s) to be
domicile prior to voluntary termination repaid to TWA
--------------------------------------- ------------------
Less than three months 100%
Three or four months 95%
Five or six months 90%
Seven or eight months 85%
Nine or ten months 80%
Eleven or twelve months 75%
94
<PAGE>
<PAGE>
Section 13(A)(3), cont.
Thirteen or fourteen months 70%
Fifteen or sixteen months 60%
Seventeen or eighteen months 50%
Nineteen or twenty months 40%
Twenty-one or twenty-two months 25%
Twenty-three or less than twenty-four months 10%
(4) When a pilot so requests, he/she shall be allowed reasonable
travel time after receiving notification of his/her
involuntary transfer until reporting at the new domicile. On
moves within the United States this shall be calculated on a
travel rate of three hundred (300) miles per day. Such
pilot, who has not been given at least two (2) weeks notice,
shall be given three (3) days additional time to the above.
The time allotted in this paragraph shall be given without
prejudice to the monthly guarantee.
(B) When a pilot who was assigned to a domicile because there was no
successful bidder subsequently moves from such domicile because of
displacement under Section 19, moving expenses to the new domicile
shall be allowed in accordance with this Section 13.
(C) Successful bidders to newly established or re-established pilot
domicile(s) will be considered involuntarily transferred for
purposes of this Section 13. Such newly established or re-
established pilot domicile(s) shall be so considered for a period
of not less than nine (9) months from the effective date of the
first bid to such domicile; except this provision shall not apply
to bidders for a vacancy which was created by a pilot leaving such
domicile.
(D) In the event a domicile is permanently closed by the Company, all
pilots in the domicile at the date of closing shall be considered
to have been involuntarily transferred for the purposes of this
Section 13.
(E) Pilots transferred from one domicile within the United States to
another domicile within the United States by any means other than
a displacement will be considered a voluntary transfer and will
bear their own expenses, except that space available
transportation shall be furnished to such pilots and their
families. For the purpose of this Section 13, pilots who exercise
the Displacement Replacement Option will not be considered
involuntarily transferred.
95
<PAGE>
<PAGE>
SECTION 14
VACATION
(A) ELIGIBILITY
No pilot shall be eligible for a vacation until such pilot has
completed one (1) year of service with the Company. However, the
Company may, at its option, schedule a pilot with less service to
take vacation accrued during the previous calendar year prior to
completion of the pilot's first full year of service.
(B) SCHEDULE OF VACATION ENTITLEMENT
Each calendar year a pilot shall be given a vacation, the number
of days of which shall be based upon the number of full months
worked in the preceding calendar year, according to the following
schedules:
Calendar days to be allowed for vacation according to the number
of years of service with the Company completed prior to January 1
of the year vacation is to be taken.
Effective for vacations to be taken in 1998:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Months Worked Less Than 8 through 22 Years and
Prior to 8 Years 21 Years Over
January 1
-------------------------------------------------------------------------------------
<C> <C> <C> <C>
1 1 3 3
-------------------------------------------------------------------------------------
2 2 5 6
-------------------------------------------------------------------------------------
3 3 8 9
-------------------------------------------------------------------------------------
4 5 10 12
-------------------------------------------------------------------------------------
5 6 13 15
-------------------------------------------------------------------------------------
6 7 15 18
-------------------------------------------------------------------------------------
7 9 18 21
-------------------------------------------------------------------------------------
8 10 20 24
-------------------------------------------------------------------------------------
9 11 23 27
-------------------------------------------------------------------------------------
10 12 25 30
-------------------------------------------------------------------------------------
11 13 28 33
-------------------------------------------------------------------------------------
12 15 30 36
-------------------------------------------------------------------------------------
</TABLE>
96
<PAGE>
<PAGE>
SECTION 14(B), cont.
Effective for vacations to be taken in 1999:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Months Worked Less Than 8 through 22 through 26 Years and
Prior to 8 Years 21 Years 25 Years Over
January 1
------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1 1 3 3 4
------------------------------------------------------------------------------------------
2 2 5 6 7
------------------------------------------------------------------------------------------
3 3 8 9 10
------------------------------------------------------------------------------------------
4 5 10 12 13
------------------------------------------------------------------------------------------
5 6 13 15 16
------------------------------------------------------------------------------------------
6 7 15 18 20
------------------------------------------------------------------------------------------
7 9 18 21 23
------------------------------------------------------------------------------------------
8 10 20 24 26
------------------------------------------------------------------------------------------
9 11 23 27 29
------------------------------------------------------------------------------------------
10 12 25 30 33
------------------------------------------------------------------------------------------
11 13 28 33 36
------------------------------------------------------------------------------------------
12 15 30 36 38
------------------------------------------------------------------------------------------
</TABLE>
Effective for vacations to be taken in 2000:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Months Worked Less Than 8 through 22 through 26 Years and
Prior to 8 Years 21 Years 25 Years Over
January 1
------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1 1 3 3 4
------------------------------------------------------------------------------------------
2 2 5 6 8
------------------------------------------------------------------------------------------
3 3 8 9 11
------------------------------------------------------------------------------------------
4 5 10 12 14
------------------------------------------------------------------------------------------
5 6 13 15 17
------------------------------------------------------------------------------------------
6 7 15 18 21
------------------------------------------------------------------------------------------
7 9 18 21 25
------------------------------------------------------------------------------------------
8 10 20 24 28
------------------------------------------------------------------------------------------
9 11 23 27 31
------------------------------------------------------------------------------------------
10 12 25 30 36
------------------------------------------------------------------------------------------
11 13 28 33 38
------------------------------------------------------------------------------------------
12 15 30 36 40
------------------------------------------------------------------------------------------
</TABLE>
97
<PAGE>
<PAGE>
SECTION 14(B), cont.
Effective for vacations to be taken in 2001:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Months Worked Less Than 8 through 22 through 26 Years and
Prior to 8 Years 21 Years 25 Years Over
January 1
------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1 1 3 3 4
------------------------------------------------------------------------------------------
2 2 5 6 8
------------------------------------------------------------------------------------------
3 3 8 9 11
------------------------------------------------------------------------------------------
4 5 10 12 15
------------------------------------------------------------------------------------------
5 6 13 15 18
------------------------------------------------------------------------------------------
6 7 15 18 22
------------------------------------------------------------------------------------------
7 9 18 21 26
------------------------------------------------------------------------------------------
8 10 20 24 29
------------------------------------------------------------------------------------------
9 11 23 27 33
------------------------------------------------------------------------------------------
10 12 25 30 34
------------------------------------------------------------------------------------------
11 13 28 33 38
------------------------------------------------------------------------------------------
12 15 30 36 42
------------------------------------------------------------------------------------------
</TABLE>
Effective for vacations to be taken in 2002 and thereafter:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
Months Worked Less Than 8 through 22 through 26 Years and
Prior to 8 Years 21 Years 25 Years Over
January 1
------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
1 1 3 3 5
------------------------------------------------------------------------------------------
2 2 5 6 8
------------------------------------------------------------------------------------------
3 3 8 9 11
------------------------------------------------------------------------------------------
4 5 10 12 15
------------------------------------------------------------------------------------------
5 6 13 15 18
------------------------------------------------------------------------------------------
6 7 15 18 22
------------------------------------------------------------------------------------------
7 9 18 21 26
------------------------------------------------------------------------------------------
8 10 20 24 29
------------------------------------------------------------------------------------------
9 11 23 27 33
------------------------------------------------------------------------------------------
10 12 25 30 37
------------------------------------------------------------------------------------------
11 13 28 33 40
------------------------------------------------------------------------------------------
12 15 30 36 44
------------------------------------------------------------------------------------------
</TABLE>
For the purpose of this paragraph, a month worked shall be any
month for which an employee accrues at least thirty-five hours
(35:00) pay. When a pilot is placed on vacation as a result of an
extended illness during the same calendar year during which it was
earned, no additional vacation shall be accrued during that
vacation period.
(C) PAY AND CREDIT
For each day a pilot is on vacation, he/she shall be paid the
Fixed Daily Rate (FDR) at the hourly rate determined by such
pilot's mock
98
<PAGE>
<PAGE>
SECTION 14(C), cont.
category bid award for a full month vacation, or by his/her actual
category bid award for partial month vacation.
(D) SENIORITY
At each domicile a pilot shall be awarded a vacation based upon
his/her pilot seniority within the category held on January 1 of
the year the vacation is to be taken. In the event a pilot does
not hold a category on January 1, the last day the pilot held a
category shall be used in lieu of January 1.
(E) LIMITATIONS
(1) Status
For the purposes of this Section, pilot statuses are as
follows: Captain, First Officer, and Flight Engineer.
(2) Selections
Provided that adequate vacation selections exist and have
not been allocated to more senior pilots, a pilot may select
his/her vacation within the following limits:
(a) Each pilot may select a single primary vacation
equivalent to his/her entitlement in paragraph (B) of
this Section, as applicable.
(b) Each pilot entitled to fifteen (15) days or less must
select a single vacation.
(c) Each pilot entitled to thirty (30) days or less, but
more than fifteen (15) days, may split to one (1)
primary selection of fifteen (15) days, and another
split period equal to the remainder of his/her
entitlement.
(d) Each pilot entitled to forty-four (44) days or less,
but more than thirty (30) days may split to one (1)
primary selection of thirty (30) days, or one (1)
primary and one (1) split of fifteen (15) days each
and another split equal to the remainder of the
pilot's entitlement.
(3) Quarters
The vacation year is broken into four (4) calendar quarters
of three (3) consecutive months. Each pilot may be awarded
only one (1) vacation selection in any quarter, except when
selections in all other quarters have been exhausted.
(4) Monthly Allocation
During each of the bid months of June, July and August, at
least six percent (6%) per month of the total vacation days
in each category, but never less than one (1) vacation
period of thirty (30) days duration, or its equivalent
reduced duration, shall be available for award. During each
of the bid months of September, November and December, at
least five percent (5%) per month of the total vacation days
99
<PAGE>
<PAGE>
SECTION 14(E)(4), cont.
in each category, but never less than one (1) vacation
period of thirty (30) days duration, or its equivalent
reduced duration, shall be available for award. A pilot
scheduled for normal retirement during the vacation year
shall have the option of deferring the entire vacation or
any split portion(s) provided the pilot notifies his/her
Regional Chief Pilot on or before August 31.
(5) Involuntary Vacation Rescheduling
All of a pilot's scheduled vacation period(s) for the
succeeding year shall not be cumulative and must be taken
within the calendar year.
(a) Primary Vacation Period
A pilot's primary vacation period may not be changed
without the pilot's consent, except upon thirty (30)
days written notice, unless the Company does not have
sufficient pilots to maintain schedules and in no
event without fifteen (15) days written notice except
with the pilot's consent.
A pilot's primary vacation period may not be changed
solely for reasons of change of the pilot's category.
(b) In the event Company operations require that a pilot's
primary vacation be deferred, the pilot may have the
option to have his/her vacation bought back by the
Company or to take it later in the calendar year (when
a later period is available) or in the succeeding
year.
(i) A pilot whose vacation is bought back or
deferred shall be considered by the Company as
available to fly for the entire vacation period.
(ii) When a later period is available, a pilot who
has elected to take his/her vacation later in
the calendar year shall have priority to such
period over a pilot who has not had a vacation
deferred.
(iii) In the event a pilot is required or chooses to
take deferred vacation in the succeeding year,
the pilot shall bid it in accordance with the
provisions of this Section, time permitting.
(iv) A vacation deferred under this Section 14(E)(5)
shall not be changed without the pilot's consent
unless no other qualified pilot is available in
the domicile to protect the Company's operation
and in any event shall be granted not later than
the year succeeding the year of original
deferment. Such deferred vacation shall not be
changed without fifteen (15) days written
notice. In the event a pilot is awarded more
than one (1) vacation in a succeeding year as
the result of such deferment, the vacation
awarded as the higher preference shall be the
100
<PAGE>
<PAGE>
SECTION 14(E)(5)(B)(IV), cont.
vacation period to which the pilot has the
priority right outlined as above.
(c) Split Vacation Period(s)
A pilot's split vacation period(s) may be changed in
accordance with (a) and (b) above and may also be
changed as a result of a change in the pilot's
category, without written notice and without the
pilot's consent.
(F) BIDDING PROCEDURES
(1) The Company will provide a vacation bid preference form to
each pilot prior to September 20. These bid forms will
indicate the possible choices available in each month, for
the following year.
The bid forms will be so designed to allow the options
described in paragraphs (B), (D) and (E) of this Section.
(2) Each pilot must bid via preference form or electronic
bidding (CAMS, home access, etc.) on or before October 15. A
pilot who has not submitted a vacation preference by this
date will have vacation assigned to him/her by the Company.
(3) The results of the vacation bidding will be posted on or
before November 1.
(4) Mutual trading of equal vacation periods (i.e. any period
that could be bid under paragraph (E)(2) above) will be
permitted within a Category.
(G) TERMINATION AND FURLOUGH
In the event a pilot's service with the Company is terminated, the
pilot shall be paid vacation pay as follows:
(1) If the pilot is furloughed, or if the pilot has completed a
year of service with the Company and resigns with the giving
of two (2) weeks written notice or is discharged, the pilot
shall be paid for all vacation time earned and accrued to
date of furlough, resignation or discharge.
(2) If the pilot resigns and fails to give at least two (2)
weeks written notice of resignation, he/she shall receive no
vacation pay whatsoever.
(3) This entire paragraph (G) shall not apply where the furlough
is occasioned by an Act of God, circumstances over which the
Company has no control, or strikes or other work stoppages
of employees of the Company.
(H) VOLUNTARY VACATION MOVEMENT
A pilot may elect to move his/her vacation days within an awarded
vacation sequence and must be taken consecutively. The pilot must
advise the Company of his/her election no later than thirty (30)
101
<PAGE>
<PAGE>
SECTION 14(H), cont.
days prior to the beginning of the month in which the vacation is
to be taken.
(I) VACATION FLYING
(1) Sixty (60) days prior to the beginning of the bid period in
which a pilot's vacation is scheduled a pilot can notify the
Company that he wants his vacation bought back by the
Company. The Company may, at its option, buy the pilot's
vacation. If the Company decides to buy back the pilot's
vacation, the pilot will be notified of the Company's
acceptance no less than thirty (30) days prior to the
beginning of the bid period and a check will be issued to
the pilot on the next flight pay check of the month
following the scheduled vacation for the full value of
his/her vacation. The pilot is then considered by the
Company as available to fly for the entire vacation period.
The Company may not exercise this provision if there are
pilots on furlough other than pilots exercising a Recall
Bypass Option.
(2) A pilot may elect to fly on his/her vacation without advance
notification to the Company and fly only those trips he/she
elects to fly to the extent that trips are available to
him/her in accordance with Section 9(F).
102
<PAGE>
<PAGE>
SECTION 15
SICK LEAVE WITH PAY
(A) A pilot will be credited, for sick leave purposes, with five (5)
hours of sick leave credit for each month of service with the
Company as a flight crew member up to a maximum accrual of one
thousand (1000) hours.
(B) When sick leave credit is used, the normal re-accrual rate shall
be six (6) hours for each month of service thereafter as a pilot
with the Company until the pilot's sick leave account is restored
to the level prior to the illness. In lieu of the foregoing, when
a pilot is continuously sick for four (4) months or more, such
pilot shall enter into a special re-accrual schedule for each
month of service thereafter as a pilot with the Company until the
pilot's sick leave account is restored to the level prior to the
illness, pursuant to the following schedule:
Sick Leave remaining Reaccrual rate per month
-------------------- ------------------------
Less than 500 Hours 14 Hours
Less than 750 Hours 10 Hours
Less than 1000 Hours 8 Hours
A pilot who has exhausted sick leave credit and is then placed on
medical leave of absence as a result of an extended illness shall,
upon return to active service and completion of requalification,
reaccrue sick leave according to the above special schedule up to
the level prior to the illness.
(C) Sick leave credit shall accrue during any month in which the pilot
accrues at least thirty-five (35) hours pay.
(D) A pilot who holds a bid run will be entitled to sick leave on the
first day he/she is unable to report for scheduled duty. A pilot
who does not hold a bid run will be entitled to sick leave on the
first day that he/she is unavailable for reserve duty; if such
pilot has actually been on duty on a day during which he/she later
is unable to report for duty, the pilot shall not be entitled to
sick leave for that day.
(E) A pilot who holds a bid run shall be paid on the basis of the
scheduled flight pay and credit of the trip or trips missed within
the bid period as a result of actual sickness or injury, and
his/her sick leave account charged accordingly, to the extent that
such pilot has accrued sick leave credit. No pay and credit shall
be awarded so as to cause the pilot's total credited hours for the
month to exceed his/her monthly bid award ALV.
(F) A pilot who holds a reserve schedule shall be paid and credited
sick leave at the fixed daily rate for each day he/she is
unavailable for duty as a result of actual sickness or injury, and
his/her sick leave account charged accordingly, to the extent that
such pilot has accrued sick leave credit. No pay and credit shall
be awarded so as to cause the pilot's total credited hours for the
month to exceed his/her monthly bid award ALV.
(G) A pilot who has not been awarded a bid as a result of actual
sickness or injury will be awarded a mock bid based on his/her
current category. A pilot awarded a mock bid run schedule will
receive pay and credit in accordance with paragraph (E) above. A
pilot awarded a mock reserve schedule will receive pay and credit
in accordance with paragraph (F) above. The pilot's sick leave
account shall be charged accordingly, to the extent that such
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SECTION 15(G), cont.
pilot has accrued sick leave credit.
(H) In the event a pilot misses two (2) or more consecutive trips due
to illness or misses three (3) or more nonconsecutive trips due to
illness in any contiguous three (3) month period, or a reserve
calls off sick three (3) times in any contiguous three (3) month
period, only the domicile Regional Chief Pilot or Assistant Chief
Pilot may contact a pilot in order to request a physician's
certificate to verify such illness(s). Any such request shall be
limited to the illness at issue.
(I) A pilot eligible for sick leave under this Section 15 shall also
be entitled to seven (7) calendar days off per calendar year on
account of death in the pilot's immediate family. Immediate family
shall be limited to a pilot's spouse, children, father, mother,
grandparents, step-father, step-mother, father-in-law, mother-in-
law, sister, brother, step-sister, and step-brother. These days
shall be paid as follows: A Bid Run Pilot shall receive pay and
credit for any trip(s) missed during these seven (7) days based
upon the scheduled flight time(s) including items credited toward
flight time limitations as set forth in Section 11. A Reserve
Pilot shall receive pay and credit according to paragraph (F)
above. There shall be no prorating of reserve days off based on a
pilot's usage of days off in this paragraph.
(J) A pilot's sick leave credit shall be restored for any sick leave
credit utilized within the month under Paragraphs (D), (E), (F),
and (I) above to the extent such pilot accrues flight pay and
credit in excess of his/her ALV.
(K) During absence due to industrial injury, a pilot shall be entitled
to receive from the Company the difference between Workman's
Compensation and the pilot's earnings for the number of days the
pilot is on paid sick leave status with the Company.
(L) A pilot laid off due to a reduction in force shall have the sick
leave accrued prior to furlough credited to him/her in the event
of recall.
(M) Except as provided in paragraph (E) above, the foregoing rules
shall be applied to each bid period separately.
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SECTION 16
PHYSICAL STANDARDS
(A) A pilot shall not be required to submit to any Company physical
examinations in excess of one (1) in any twelve (12) month period
without the pilot's consent unless it is apparent that the pilot's
health or physical condition is seriously impaired, in which case
the pilot's personal physician shall be furnished a copy of the
Company's medical examiner's report when so requested in writing
by the pilot. A pilot who takes a Company physical examination at
a location other than his/her domicile shall be furnished Company
transportation and shall be entitled to expense allowance as set
forth in Section 7(A)(4) of this Agreement.
(1) Any pilot hereunder who fails to pass a Company physical
examination may, at his/her option, have a review of his/her
case in the following manner:
(a) The pilot may employ a qualified medical examiner of
his/her own choosing and at his/her own expense for
the purpose of conducting a physical examination for
the same purpose as the physical examination made by
the medical examiner employed by the Company.
(b) A copy of the findings of the medical examiner chosen
by the employee shall be furnished to the Company, and
in the event that such findings verify the findings of
the medical examiner employed by the Company, no
further review of the case shall be afforded.
(c) In the event that the findings of the medical examiner
chosen by the employee shall disagree with the
findings of the medical examiner employed by the
Company, the Company will, at the written request of
the employee, ask that the two (2) medical examiners
agree upon and appoint a third qualified and
disinterested medical examiner, preferably a
specialist, for the purpose of making a further
physical examination of the employee.
(d) The said disinterested medical examiner shall then
make a further examination of the pilot in question
and the case shall be settled on the basis of said
medical examiner's findings.
(e) The expense of employing the disinterested medical
examiner shall be borne one-half by the pilot and one-
half by the Company. Copies of such medical examiner's
report shall be furnished to the Company and to the
pilot.
(2) Any information obtained by or as a result of a Company
physical examination shall be confidential between the
doctor, the pilot, and those supervisory and administrative
personnel concerned with the pilot's physical condition with
the understanding that medical details will not be divulged
by the doctor without the pilot's consent. The above
notwithstanding, there is no intent to restrict the use of
medical information necessary to arrive at a correct medical
diagnosis, nor to interfere with the processes of this
Section or the Grievance Section of this Agreement, nor to
interfere with or prevent investigations required in legal
processes.
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SECTION 16(A)(3)
(3) The Company shall reimburse a pilot for any FAA/TWA required
medical expenses he/she may incur which is denied by a
Company offered medical plan because it was not "medically
necessary". This shall apply to both the situation where
specific medical testing required by TWA and/or any tests
required by the FAA requisite to the issuance of the
Airman's Medical Certificate.
This shall not apply to the cost of those regular six (6)
month annual FAA physical examinations which are necessary
and required by law to maintain a pilot license(s).
(4) The Company shall not require a pilot to possess an FAA
Medical Certificate, including its waiver policy, in excess
of the certificate required by the FAA for the capacity in
which the pilot is currently serving (i.e., Captain, First
Officer, International First Officer, International Relief
Officer and Flight Engineer).
(5) The Company Medical Department shall advise the Chairman of
the ALPA Aeromedical Committee prior to the implementation
of new tests which are to be administered to all pilots
during the annual Company physical examination.
(6) Notwithstanding the foregoing, a pilot who possesses a first
or second class medical certificate with waivers may be
required to meet operational qualifications as determined by
Flight Operations.
(a) In the application of this paragraph, if Flight
Operations determines that a pilot with a first or
second class medical certificate with waivers does not
meet the Company's operational qualifications, such
pilot will be eligible to receive disability benefits
if not disqualified under the provisions of Article
1.11 of the Retirement Plan for Pilots of Trans World
Airlines, Inc. (otherwise known as the "A" Plan).
(b) In reference to the disqualifications under Article
1.11 of the "A" Plan referring to war, a pilot on
Company business who is disabled as a result of war is
not thereby disqualified from receiving the benefits
referred to in such Plan.
(B) Crew meals, when provided, shall be nutritionally balanced and
shall include at least one (1) low fat meal. At the request of
either party, the Company and the Association shall, within ten
(10) business days, meet and discuss crew meal provisioning for
flights not normally scheduled for passenger meal service.
(C) A pilot on leave under Section 18(B) or (E) may apply for any open
position with TWA, subject to the requisite qualifications. A
pilot shall have a preferential opportunity for the position over
non-employee applicants. Except for Sections 1(C), 1(D), 17(A)(9)
and 17(A)(10), the provisions of this Agreement shall not apply to
a pilot who accepts another position within the Company while on
leave under Section 18(B) or (E).
(D) The Company shall maintain an effective Employee Assistance
Program which shall make available services to pilots and their
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SECTION 16(D), cont.
eligible dependents consistent with the goals of the Joint Policy
Statement on Special Health Services dated August 26, 1976.
Furthermore, a pilot shall have access to an effective Employee
Assistance Program whether or not he/she is in a job jeopardy
situation. Such access, however, shall not abridge, limit or
prejudice in any way the Company's right to assess appropriate
discipline.
(E) Notification for FAA required drug and alcohol testing shall be in
accordance with the policy in the Flight Operations Policy Manual,
except such notification in St. Louis shall be in writing and
delivered in person. No pilot shall be required to wait for such
drug/alcohol test more than one hour (1:00) after the scheduled or
actual block-in of his/her flight, whichever is later.
In the event a pilot is tested "positive" by any alcohol or drug
test, he/she shall be handled in accordance with the Flight
Operations Policy Manual.
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SECTION 17
SENIORITY
(A) GENERAL
(1) Seniority as a pilot shall be based upon the length of
service as a pilot with the Company or with other companies
whose operations have been taken over by the Company prior
to the signing of this Agreement.
(2) Seniority shall begin to accrue from the date a pilot is
first employed by the Company as an airline pilot and shall
continue to accrue during such period of employment except
as otherwise provided in this Agreement. On January 1, 1944,
and henceforth, the date of employment as a pilot shall
establish such pilot's position on the System Seniority
List, and when two (2) or more pilots are employed on the
same date, they shall be placed on such Seniority List
according to their age (i.e., the oldest pilot shall receive
the lowest number).
(3) Seniority shall govern all pilots in case of promotion and
demotion, their retention in case of reduction in force,
their assignment or reassignment due to expansion or
reduction in schedules, their reemployment after release due
to reduction in force, and their choice of vacancies
provided that the pilot's qualifications are sufficient for
the operation to which such pilot is to be assigned. In the
event that a pilot is considered by the Company not to be
sufficiently qualified, the Company shall immediately
furnish such pilot written reasons therefor. This Section
shall apply except as otherwise stipulated in this
Agreement.
(4) Any pilot once having established a seniority date hereunder
shall not lose that date except as provided in this
Agreement.
(5) When a junior pilot is promoted over a senior pilot, by
reason of the failure of the latter to qualify in turn, the
senior pilot shall continue to retain his/her position on
the Pilots? System Seniority List.
(6) Any pilot whose services with the Company are permanently
severed shall forfeit his/her seniority rights.
(7) In the event Trans World Airlines, Inc. purchases or absorbs
another airline, the Pilots' System Seniority List of Trans
World Airlines, Inc., and of the Company being purchased or
absorbed shall, at the time of such purchase or absorption,
be determined by agreement between the representatives of
the respective pilot groups involved.
(8) A pilot transferred to non-flying or supervisory duty shall
retain and continue to accrue seniority, provided that such
pilot maintains at all times a valid airline pilots'
competency certificate or certificates. If such pilot shall
permit his/her specified certificate or certificates to
lapse, he/she shall retain the seniority already accrued to
the time of such lapse and shall have a period of no more
than one (1) year in which to regain such specified
certificate or certificates. If the pilot does regain such
specified certificate or certificates within one (1) year,
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SECTION 17(A)(8), cont.
the pilot's seniority shall recommence to accrue from the
date his/her certificate or certificates are so regained.
(9) When a pilot is transferred to non-flying or supervisory
duty on account of sickness or injury, or becomes sick or
injured while on such non-flying or supervisory duty, the
pilot shall retain and continue to accrue seniority during
such period of sickness or injury whether or not he/she is
able to maintain his/her airline pilot certificate or
certificates required for his/her status, until the pilot is
able to return to flying duty or is found to be unfit for
such duty for a continuous period of five (5) years.
(10) A pilot who returns to active service from a leave,
including but not limited to, leaves of absence pursuant to
Section 18; extended sick leave or from training center,
non-flying or supervisory duty who does not have a category
bid award, shall have a vacancy created for him/her by the
Company in a category in his/her status according to
systemwide seniority and the equipment ranking of Section
19(D)(2)(d). If the pilot does not have the qualifications
normal for his/her seniority, he/she will be afforded the
opportunity to obtain such qualifications at the earliest
reasonable opportunity.
(11) Any dispute arising hereunder concerning the physical
fitness of such pilot shall be settled in accordance with
Section 16.
(B) SENIORITY LIST
(1) January 1 of each year, the Company shall make a seniority
list compiled in accordance with this Section, readily
available to pilots. Such a list shall be known as the
Pilots' System Seniority List and shall contain the names of
all pilots entitled to seniority whether active or inactive
and the date of such assignment of each pilot.
(2) All pilots shall be listed on the Pilots' System Seniority
List and each pilot shall be permitted a period of sixty
(60) days after posting of such list in which to protest in
writing to the Company any omission or incorrect posting
affecting such pilot's seniority.
(3) In the event such pilot does not file a protest with the
Company within such sixty (60) days, he/she shall not
thereafter be entitled to file such protest.
(C) PROBATIONARY PERIOD
(1) Pilots shall be on probation for a period not to exceed one
(1) year from date of the pilot?s first completed simulator
proficiency check; however, such probationary period shall
not exceed fifteen (15) months from date of initial
employment as a pilot with TWA. Probationary pilots
returning from a leave of absence or furlough shall be
required to serve the remaining portion of his/her
probationary period, if any, or three (3) months, whichever
is greater. Nothing in this Agreement shall be construed to
prevent the Company from releasing, furloughing or
reemploying a pilot during this probationary period,
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SECTION 17(C)(1), cont.
regardless of his/her position on the Pilots' System
Seniority List.
(2) Notwithstanding any other provisions of this Agreement, the
Company shall not be required to honor a flight deck crew
member's bid for category vacancies effective prior to the
completion of the pilot's probationary period; however, such
pilot shall be afforded displacement prerogatives under
Section 19.
At initial employment, the pilot shall make an election as
to a category preference and insofar as possible, such
pilot?s request will be honored on a seniority basis,
provided, however, that no pilot upon initial employment
shall fill a category vacancy on a small widebody as defined
in Section 31(FF) unless all pilots on the seniority list
have had an opportunity to bid and be awarded such a vacancy
on the basis of seniority.
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SECTION 18
LEAVES OF ABSENCE
(A) PERSONAL LEAVE
(1) Except for leaves beginning in the bid months of July,
August and December, the Company shall grant up to five
percent (5%) of the pilots in a category a leave of absence
for any period measured in thirty (30) day increments up to
a maximum of five (5) years. For the second and subsequent
personal leave requests, the Company may consider the
requirements of service. When such leaves are granted, the
pilot shall retain and shall continue to accrue seniority
during such period, provided that during such period the
pilot maintains his/her appropriate pilot's certificate or
certificates required for his/her status. If, during any
leave the pilot shall permit his/her appropriate pilot's
certificate or certificates, required for his/her status to
lapse, his/her seniority shall accrue only to the date of
such lapse.
(2) A pilot shall be granted a leave of absence for a period not
to exceed four (4) years to accept a position with the
Association, or to perform any duties relating to Council
Activities, or to accept an executive position with any
agency of the Federal Government, directly connected with
aviation. Notwithstanding the foregoing, a pilot shall be
granted a leave of absence for a period not to exceed eight
(8) years to accept a position as an elected full time
Officer of the Air Line Pilots Association, International.
Such pilot will continue to accrue all seniority and
longevity credit for pay purposes while on such leave of
absence, provided that during such period the pilot
maintains his/her appropriate pilot's certificate or
certificates required for his/her status.
(3) Notwithstanding the above, the Company shall offer leaves of
absence to all pilots prior to furloughing any pilot. Such
leaves shall be granted subject to the following:
(a) A minimum of ninety (90) days per leave, and then in
increments of ninety (90) days up to a maximum of two
(2) years.
(b) For each furlough, leaves shall be granted in a number
equal to the number of pilots to be furloughed, but in
no case shall the Company be required to grant more
than a total of thirty (30) leaves per furlough.
(c) Leaves, in (b) above, shall be offered equally among
Captains, First Officers, and Flight Engineers in
order of seniority within each status.
(d) Pilots desiring a leave of absence under this Section
18(A)(3) must notify the Managing Director of Flight
Operations by telegram within thirty (30) days of the
date a future furlough is announced, however, in no
case shall the Company be required to grant a leave if
the pilot has not requested such leave prior to twenty
(20) days of the effective date of such furlough.
(e) In the event pilots returning from leaves of absence
would cause other pilots to be furloughed, additional
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SECTION 18(A)(3)(E), cont.
leaves of absence shall continue to be offered as in
(a), (b), and (c) above.
(f) Upon the recall of all furloughed pilots, leaves of
absence shall be subject to cancellation, by
increment, in order of inverse seniority and in equal
number in each status.
(g) Pilots on leave of absence under this Section 18(A)(3)
shall be considered to be in active service for the
purpose of administering Section 4(F)(6).
(h) In the event that an announced furlough is averted, a
leave of absence granted under this Section 18(A)(3)
and contingent upon such furlough may be subject to
cancellation.
(i) All pilots granted a leave of absence from the
Company shall file proper addresses with Trans
World Airlines' Flight Operations Department.
Any change in address must be supplied to the
same department immediately.
(4) All pilots shall be eligible for personal leave under the
Family And Medical Leave Act of 1993 (FMLA) after twelve
(12) months of continuous active service with the Company.
Notwithstanding the provisions of the FMLA, the following
shall apply to pilots under the Agreement:
(a) The Company shall not require a pilot to substitute
sick leave or vacation for unpaid leave taken under
the FMLA without the written consent of the pilot.
(b) Pilots shall continue to accrue seniority and
longevity under the Agreement for the period of any
FMLA leave.
(B) MEDICAL LEAVE
When leaves are granted on account of sickness or injury, a pilot
shall retain and continue to accrue seniority whether or not
he/she is able to maintain his/her appropriate pilot's certificate
or certificates required for his/her status, until such pilot is
able to return to duty or is found to be unfit for such duty
except that in no case shall leaves for sickness or injury exceed
a total continuous period of five (5) years, commencing from the
date the pilot first goes on sick leave, or if the pilot has
exhausted sick leave, commencing at the time the pilot is first
disabled. Return to duty after a leave granted under this
paragraph shall be subject to a reasonable qualifying period not
to exceed six (6) months.
(1) During the period a pilot is on leave as provided above, the
Company may require the pilot to submit to a Company
physical examination at least once each twelve (12) months.
When such examination is scheduled by the Company at a
location other than in the immediate area of the pilot's
residence, the Company shall furnish transportation and
reasonable actual expenses for the pilot, and shall make a
reasonable effort to schedule such examination at the
pilot's convenience.
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SECTION 18(B)(2)
(2) A pilot shall be eligible to return to active service
whenever a pilot's leave has not exceeded a period of five
(5) years, as provided above, the pilot shall be eligible
for return to active service with the Company in a flight
deck operating crew position available to him/her,
consistent with the physical standards provided in Section
16(A)(4), subject to the limitations provided in (B)(4) and
(5) below.
To be eligible to return to active service, the pilot's
medical certificate may not contain any operational
limitation which would prevent the pilot from being
routinely scheduled for flight duty, and further such
pilot's medical certificate must be applicable to general
commercial aviation.
(3) In the event a pilot elects not to exercise the displacement
prerogatives provided in Section 19(A)(3), henceforth the
pilot shall not be eligible for return to active service
with the Company unless the pilot possesses a first class
FAA medical certificate.
(4) In the event a pilot elects not to return to active service
with the Company at any time that he/she is able to maintain
a second class FAA medical certificate as described in
Section 16(A)(4), henceforth such pilot shall not be
eligible for return to active service with the Company
unless he/she possesses a first class FAA medical
certificate.
(5) A pilot on medical leave under this Section will be entitled
to remain for a period not to exceed five (5) years in the
Company's Group Insurance program.
(C) MILITARY LEAVE
(1) Upon notice, any pilot shall be granted military absence or
leave, without pay, as provided by effective federal
regulations applying thereto.
(2) Upon return to active flight status, reemployment rights and
benefits shall be governed by and limited to the protection
afforded in the Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended, 38 U.S.C. ?4301
et seq.
(3) A pilot granted an excused absence under this paragraph
(C)(3) for a weekend drill, annual service requirement,
other military requirement, or military leaves of absence
(31 days or more) shall upon request by the Company provide
a copy of his/her orders.
(4) A pilot under (C)(1) whose military absence is for fewer
days than the length of his/her awarded trip shall have
his/her month?s pay guarantee reduced by the number of days
of the original trip multiplied by the daily average, and
shall have the following options:
(a) Split the trip once at the domicile and fly one (1) of
the two (2) portions, provided such splitting
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SECTION 18(C)(4)(A), cont.
generates no additional penalty time/pay beyond the
original trip; or
(b) Drop the entire trip with no further action provided
the pilot's projection is not below guarantee; or
(c) Drop the entire trip, and become available for a Class
"M" balance for the number of days of the original
trip over and above the military absence days taken.
In accordance with Section 9(D)(1)(b), a Class "M"
pilot may enter balance preferences at any time by
telephone contact or voicemail with CCS, or the CAMS
free-form balance request (JXMVP). [E.g. A five day
trip is dropped for two days of military absence, the
pilot would be available for three days (M3) of
flying.]
(D) GENERAL
(1) Any dispute arising hereunder concerning the physical
fitness of the pilot concerned shall be settled in
accordance with Section 16.
(2) A pilot on leave shall not, without prior written permission
of the Company, engage in aviation employment and, in no
case, shall engage in employment which may bring discredit
upon the Company.
(3) Return from leave shall be accomplished as set out in
Section 17(A)(10).
(4) A pilot returning from leave of absence will be paid, during
any necessary requalification period, at the rate
appropriate to the pilot's category at the time he/she
returns to duty with the Company; provided, that a pilot who
returns from a personal leave of absence, as defined above,
in excess of six (6) months duration will be paid at the
current rate for the category he/she held at the time of
commencement of the personal leave.
(5) All pilots granted a leave of absence from the Company shall
file proper addresses with Trans World Airlines' Flight
Operations Department and the Air Line Pilots Association.
Any change in address must be provided to the Company and
the Association.
(6) A pilot on leave under Section 18(B) or (E) may apply for
any open position with TWA, subject to the requisite
qualifications. A pilot shall have a preferential
opportunity for the position over non-employee applicants.
Except for Sections 1(C), 1(D), 17(A)(9) and 17(A)(10), the
provisions of this Agreement shall not apply to a pilot who
accepts another position within the Company while on leave
under Section 18(B) or (E).
(E) MATERNITY
(1) A flight deck crewmember, upon discovery that she is
pregnant, shall promptly notify the Company. Such pregnant
flight deck crewmember who continues to meet the standards
of Section 16(A)(4) will be permitted, but not required, to
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SECTION 18(E)(1), cont.
continue in service as an active flight deck crewmember
through her twenty-fourth (24th) week of pregnancy. A
pregnant pilot who elects to continue in active flight
status must submit to the Company, prior to her next flight,
a written medical release from her physician confirming her
medical fitness to perform as an active flight deck
crewmember for the following six (6) week period.
Thereafter, she must continue to submit a written medical
release from her physician confirming her medical fitness to
perform as an active flight deck crewmember for each
following six (6) week period. Should the pilot elect to
withdraw from active flight status due to her pregnancy
prior to her twenty-fourth (24th) week, she shall
immediately notify the Company.
(2) A flight deck crewmember who has ceased to perform flight
duties pursuant to paragraph (1), above, shall utilize her
accumulated sick leave and, upon exhaustion of her sick
leave, be placed on a medical leave of absence for the
remaining term of her pregnancy and for a period of up to
six (6) weeks following the birth of the child or eight (8)
weeks, if delivery is by cesarean. While the flight deck
crewmember is on paid or unpaid leave, she shall be entitled
to the same terms and conditions of employment as would be
applicable to any other illness or disability.
(3) A flight deck crewmember covered by this paragraph (E) is
expected to return to active flight status within six (6)
weeks following the birth of the child or eight (8) weeks,
if delivery is by cesarean, unless she is unable to return
for reasons due to her health, in which case, the provisions
of the Agreement pertaining to the use of sick leave and the
granting or extending of a medical leave shall be
applicable. A pilot who makes written application prior to
the end of six (6) or eight (8) week period in paragraph (2)
above, shall be granted a personal leave of absence from the
conclusion of their sick leave or medical leave of absence
through the end of the sixth (6th) calendar month following
the month in which the child was born.
(4) Return to active service in a flight deck operating crew
position shall be subject to the provisions of Section 18(B)
and Section 17(A)(10).
(F) PATERNITY ABSENCE
(1) A pilot whose spouse is pregnant shall be granted a maximum
of fifteen (15) days continuous, paternity absence for
normal delivery [twenty-one (21) days, if delivery is by
cesarean], commencing on the date of delivery.
(2) A pilot who adopts a dependent child not currently living in
the pilot's home shall be granted a maximum of fifteen (15)
days continuous, paternity absence, commencing on the date
of adoption.
(3) A pilot whose spouse is pregnant or who is adopting a
dependent child not currently living in his home may elect
to divert his monthly sick leave accrual to a paternity
bank. The pilot may accrue up to forty hours (40:00) in his
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SECTION 18(F)(3), cont.
paternity bank. The sick leave bank and the paternity bank,
when combined, must not exceed one thousand hours (1000:00).
(4) A pilot may utilize his accrued paternity bank and/or earned
and accrued vacation provided that scheduled vacation
periods shall not be cumulative and shall be taken within
the calendar year, or he may be placed in a non-pay status.
Upon exhaustion of his paternity bank and/or vacation, the
pilot shall be placed on unpaid paternity absence for the
remainder of the fifteen (15) day period [twenty-one (21)
day period, if delivery by cesarean].
(5) Requests for this absence and the diversion of sick leave
accruals into a paternity bank must be accompanied by
medical and/or legal documentation. Such documentation must
be provided no later than the date of the requested absence
and/or diversion.
(G) PILOT ALTERNATE MONTH JOB SHARING PROGRAM
The availability of the Pilot Alternate Month Job Sharing Program
(the "Program") shall be announced in conjunction with the
furlough notice required by Section 20(B) and Section 18(A)(3).
In order to help avert a furlough, eligible pilots may voluntarily
elect to participate in job sharing which will consist of a period
during which a pilot will alternate monthly between flying (a
"work-month") and personal time off (a "PTO-month"). Individual
commitments to the job sharing program from participating pilots
will be required for a period of not less than four (4) months.
(1) Eligible Pilots: Pilots in the category which are in excess,
as determined by the Company, to the number of pilots
necessary to meet the staffing requirements for such
category group and who are not junior to a pilot being
actually furloughed.
(2) Participation: A pilot who wishes to participate in job
sharing must submit a Request for Job Sharing Form
indicating that pilot's agreement to participate in the
Program in accordance with the provisions listed herein and
the pilot's preferences (as listed below) regarding which
alternating months he/she wishes to work or have off.
Request for Job Sharing Forms will be kept on file by the
Company. Pilots may update or cancel their request at any
time provided that in order to be effective for any month,
the update or cancellation must be received by the Managing
Director, Crew Resources and Administration, not later than
the close of business on the sixth (6th) day of the month
preceding the month for which the pilot either wishes to
request job sharing or cancel job sharing. (Note: as
indicated below, a pilot may not voluntarily withdraw/cancel
his/her participation in the Program during the first four
(4) months.) To update a request a pilot must submit a new
Request for Job Sharing Form. A request may be canceled by
written notice to the Company.
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SECTION 18(G)(2), cont.
Job sharing alternate month choices are:
(a) Flying during odd numbered months only (i.e. January,
March, etc.) alternating with PTO during even numbered
months (the "odd series").
(b) Flying during even numbered months only (February,
April, etc.) alternating with PTO during odd numbered
months (the "even series").
(c) No preference for an odd series or even series
rotation. The pilot will accept either series as
assigned by the Company.
A pilot may indicate on the Request for Job Sharing
Form his/her preference for odd series only, an even
series only, or a willingness to accept either but
with a preference for one series over the other. If a
pilot indicates odd series only or even series only,
such pilot will be awarded job sharing only if his/her
choice can be granted. If a pilot indicates a
willingness to accept either an odd or even series the
Company will, to the extent possible, comply with the
pilot's request.
(3) Awarding of Job Sharing Slots: The Company will balance the
requests for job sharing taking into account, to the extent
possible, pilots' preferences for an odd or even series. The
Company will award pilots job sharing in seniority order
within a category group for which job sharing is applicable
subject to the Company's ability to evenly balance
participants on odd and even series. For example, if the
only slot(s) available were for an odd series, a more junior
pilot who indicates a willingness to accept an odd series
would be granted job sharing while a more senior pilot who
requested job sharing, only if it could be granted for an
even series, would be denied job sharing.
The Company will determine each month the number of slots
which will be available for job sharing. Those slots shall
be filled first by pilots who are continuing participation
in the program and then by pilots who are requesting to
initiate participation in job sharing. A pilot once awarded
participation in the Program will not be involuntarily
removed from job sharing solely because a more senior pilot
has requested to initiate participation in the program.
(4) Withdrawal from Job Sharing: A pilot may voluntarily
withdraw from job sharing after his/her first four (4)
months of participation (i.e. two (2) work-months and two
(2) PTO-months). If TWA reduces the number of job sharing
slots available in any category, participants will be
removed from job sharing, to the extent possible, in inverse
seniority order subject to the maintenance of a balance
between odd and even series participants. Subject to the
foregoing, a pilot who has been awarded job sharing will
continue in the program until:
(a) Written notice from the pilot that he/she desires to
cancel his/her participation in job sharing. (The
written notice must be received by the Company no
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SECTION 18(G)(4)(A), cont.
later than the close of business on the sixth (6th)
day of the bid month which will be the pilots last
month of participation in job sharing.)
(b) Notice from TWA to the pilot that his/her
participation in job sharing is being terminated. Such
notice may be given if an imbalance occurs among the
participants due to extended illness, resignations,
retirements, other terminations, a reduction in the
number of slots available to job sharing, etc.
Determination of the number of slots available for job
sharing shall be determined solely by the Company.
Notice to the pilot will be given no later than the
twelfth (12th) day of the month immediately preceding
the month for which participation will be terminated.
(c) A pilot entitled to sick leave pay or disability who
becomes ill or sustains an injury during a work-month
and who does not return to schedule prior to midnight
of the last day of that work-month, will be removed
from job sharing and maintained on sick
leave/disability until such pilot returns to active
flight status. When the pilot returns to active flight
status from any such absence, he/she will return to
full time service. Such a pilot may then reapply for
participation in job sharing.
(d) A pilot awarded a vacancy to a new status or domicile
will be removed from job sharing. Such pilot may then
reapply for job sharing based upon his/her new
category.
(e) A pilot who lacks sufficient seniority to continue to
hold a monthly bid (bid run or reserve) on the
equipment for which the pilot was awarded job sharing,
will be removed from job sharing.
(5) Bidding: A pilot participating in job sharing will bid in
the normal manner for his/her work-months. A pilot must be
available for work on the first day of his/her work-months.
(6) Scheduling:
(a) A pilot awarded reserve must be available for contact
on the first day of his/her work-month.
(b) A bid run holder is responsible to contact crew
schedule prior to the start of his/her work-month in
order to "OK" his/her line and be informed of any
balance trips which may have been assigned.
(c) All flight assignments (bid runs, trades, balance
flights, transitions, reserve flight assignments,
etc.) which report during the work-month but end
during the PTO-month will be flown to completion. PTO
will commence the day following the day in which the
last leg (whether working or deadhead) of the pairing
that extended into the PTO-month blocks in. Flights
extending over the end of the month may not be
dropped. All time flown in the PTO-month will be paid
in the PTO-month.
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SECTION 18(G)(6)(D)
(d) A pilot participating in job sharing will continue to
have the ability to submit standing bids and to be
awarded vacancies.
(7) Other Provisions:
(a) A pilot will continue to accrue all seniority and will
retain insurance coverage and his/her normal pass
privileges during his/her PTO-month.
(b) A pilot will accrue vacation and sick leave in
accordance with Sections 14(B) and 15(C).
(c) A pilot who has authorized deductions to be taken from
his/her pay (i.e. for the credit union, savings bonds,
additional federal withholding, etc.), will continue
to have those deductions made as applicable for
his/her work-month. If a deduction is normally made
from an advance check, the deduction would continue to
be made from the advance check(s) issued during the
pilot's work-month. If a deduction is from the flight
check, the deduction will be made from the flight
check applicable to the work-month (e.g. if the work-
month is February, the flight check deduction would be
on the March flight pay check). Deductions will be
made from all flight checks to the extent there is net
pay to cover the deductions. The pilot is responsible
in the PTO-month for any required payments which would
normally be handled through payroll deduction.
(d) A pilot is responsible to ensure that he/she has
reviewed any bulletins and updated revisions to
his/her manual that were issued during the pilot's
PTO-month prior to reporting for his/her first flight
in a work month.
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SECTION 19
VACANCIES AND DISPLACEMENTS
(A) General
(1) All changes in categories of pilots resulting from vacancies
and displacements, and from subsequent vacancies and
displacements resulting therefrom, shall be simultaneously
effected in accordance with procedures established in this
Section.
(2) Except as provided otherwise in this Agreement, this entire
Section 19 shall be subject to Section 17.
(3) Other bidding, displacing, and assignment provisions of this
Section 19 notwithstanding, a pilot who is unable to
maintain the medical certificate required by the FAA to
serve in his/her status, but who does secure a FAA medical
certificate as described in Section 16(A)(4), may be
afforded displacement options, subject to the limitations
prescribed in (4) below. This paragraph (3) shall be subject
to Section 16.
(4) Other provisions of this Agreement notwithstanding, the
bidding, assignment and displacement rights of any flight
deck crew member serving as such with a second or third
class FAA medical certificate shall be as follows:
(a) Displace a less senior pilot in accordance with normal
displacement procedures.
(b) If unable to displace as in (a) above, he/she shall be
subject to Section 18(B), provided, however, that no
provision of Section 15 (sick leave with pay) shall
apply to such pilot. While subject to the provisions
of Section 18(B), the pilot shall have the priority
right to bid and retain a flight engineer category
vacancy available to pilots in preference to any more
senior pilot who meets the physical standard for any
pilot status other than flight engineer.
(c) The pilot shall not be subject to the provisions of
Section 6(B) of the Agreement.
(5) Except as hereinafter provided, all changes in categories of
pilots shall be made from the Standing Bids or FAX Bids of
pilots who file such bids with the Company.
(6) An electronic file of Standing Bids shall be maintained by
the Company and controlled by the TWA Flight Operations
Department. It is the responsibility of each pilot to keep
his/her Standing Bid current with his/her desires. The
standing bid format shall be mutually agreed upon and
considered as being a part of the pilots' Agreement and that
the instructions and prerogatives listed thereon shall be
binding to both parties.
(7) A Standing Bid may be changed only by the pilot and shall
not be canceled by the Company.
(8) Annual Manpower Planning Message: A manpower planning
message will be electronically available in the fourth
quarter of each calendar year. This message will be
informative only and will estimate: (1) the next year's
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Section 19(A)(8), cont.
flying levels; (2) category targets; (3) staffing complement
in each category; (4) seniority projections for individual
categories; and (5) anticipated vacancies.
In the event the annual flying information is unavailable,
this message may be postponed with the concurrence of the
System Schedule Committee Chairman.
(B) FAX Bids
(1) A pilot who does not have a Standing Bid on file expressing
his/her current preferences may send a FAX to the Managing
Director-Crew Resources and Administration. Any such FAX,
whether for the purpose of bidding a vacancy, requesting
assignment, or exercising displacement prerogatives, shall
hereinafter be referred to as such pilot's "FAX Bid". FAX
bids apply exclusively to the current Bid Message and expire
simultaneously with the Bid Message.
(2) A FAX Bid shall specifically describe the pilot's
preferences and shall, where appropriate, refer to the
number of the Company's bulletin announcing a vacancy or
displacement which resulted in such FAX Bid. Said FAX
signature shall include the pilot's current category,
payroll number and system seniority number.
(3) It is the responsibility of a pilot to file a FAX Bid before
the bulletined deadline date of any vacancy or displacement
affecting such pilot if he/she does not have a Standing Bid
on file. Absent a Standing Bid or FAX Bid, the default bid
procedure of Section 19(D)(2) below shall control.
(4) Any pilot's FAX Bid will automatically pre-empt his/her
Standing Bid whether or not such FAX Bid results in a change
in his/her category. Standing Bids may not be filed or
revised by FAX Bid.
(C) Bid, Assignment, and Displacement Bulletins
(1) The Company shall publish bulletins announcing vacancies,
displacements, and assignment of pilots resulting from such
vacancies and displacements. All such bulletins shall be
numbered consecutively during a calendar year, and they
shall be transmitted expeditiously to, and posted without
delay at all domiciles, training centers, all overseas
layover stations and satellites.
(2) A bulletin announcing a vacancy or displacement will state
the effective date, the categories involved, the cause of
the vacancy or displacement, the name and seniority number
of the pilot(s) displaced and the closing date of the bid
message. The closing date shall not be less than seven (7)
days from the date such bulletin is posted.
(3) A bulletin announcing the results of all bidding for, or
assignments to, permanent vacancies, and announcing all
displacements, shall be transmitted within five (5) business
days after the specified deadline and shall refer, where
appropriate, to the bulletin number which announced such
vacancy, displacement, or assignment. Such announcement
bulletin shall be posted as stated in (C)(1) above and will
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Section 19(C)(3), cont.
state the effective date, the categories involved, and the
name and seniority number of the successful bidders, pilots
displaced, or pilots assigned.
(D) Permanent Vacancies
(1) Subject to (A)(1) of this Section, a permanent vacancy in a
category shall exist and shall be bulletined in the manner
specified in Section 19(C)(2) above and filled whenever:
(a) The total monthly flying time and/or need for reserve
duties in any category is altered resulting in an
increased requirement or,
(b) Annual Seniority Realignment Bid: Notwithstanding
(D)(1)(a), vacancies will be bulletined for each
category that had less than three percent (3%) of
total staffing awarded bids throughout the preceding
calendar year. The number of such vacancies to be
bulletined shall be no less than three percent (3%) of
each affected category, rounded to the next highest
number, based on the category staffing levels at the
time of the Annual Seniority Realignment Bid message.
This Realignment Bid shall be bulletined in January
with a future effective date no later than 1 May of
the same year.
(2) Bidding for Permanent Vacancies:
(a) Pilots shall be afforded the right to bid for category
vacancies on a seniority and percentile basis. Subject
to Section 6(C) and Section 19(K), bid awards shall be
in accordance with the seniority percentile
preferences indicated by the pilot.
(b) Pilot bids shall be considered in seniority order and
each pilot's bid shall be determined before
considering the next junior pilot's percentile bid. A
pilot's percentile bids shall be considered in
preference order. The number of pilots already awarded
a bid in the instant pilots desired category plus one
(1) (to account for the instant bidder) shall be
divided by the total number of pilots already holding
bids in the category plus the remaining number of
vacancies published for bid (the "resultant
percentile"). If the resultant percentile is equal to
or less than the pilot's indicated percentile
preference, the pilot shall be awarded the bid. If the
resultant percentile is greater than the pilot's
indicated percentile, the pilot will not be awarded
the bid and each of the pilot's remaining preferences
will then be considered in order until the pilot is
awarded a bid. When a pilot is awarded a category bid
pursuant to a percentile bid, all inferior percentile
preferences are thereafter disregarded. If a pilot
indicates insufficient percentile preferences (the
pilot is too junior to hold any of his/her percentile
bids indicated), then he/she shall be awarded a
category bid in accordance with the Default Bid. All
percentile bids must be in whole numbers (e.g. not
60.7%).
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Section 19(D)(2)(c)
(c) When a pilot is awarded a category bid, that pilot is
not guaranteed that his/her resultant percentile and
seniority on his or her category award will remain
constant over time. After the pilot receives the
category bid award, the resultant percentile is
thereafter disregarded and serves no further purpose.
(d) There shall be equipment ranking from highest to
lowest as follows:
B757/B767/A321
B737/A319/A320
MD8
DC9
B727
At such time that an equipment type other than those
listed above is introduced, the parties shall meet and
agree on the ranking of such equipment within thirty
(30) days of the announced order of such equipment.
(e) If a pilot fails to bid or insufficient choices are
posted on the pilot's standing bid or FAX Bid, the
pilot's bid preference shall be assumed and awarded in
the following order, seniority permitting:
(i) Present category, (i.e. B757/B767 Captain STL).
(ii) Current status and next lower equipment at
his/her domicile (next lower category) in
accordance with the following order, (i.e.
B757/B767/A321 Captain STL to MD8 Captain STL).
(iii) Current status in the equipment order above, in
any domicile.
(iv) The next lower status in the equipment order
above, at his/her domicile.
(v) The next lower status in the equipment order
above, in any domicile.
(f) A pilot shall be trained to effect his/her bid award
to a permanent category in accordance with Section
6(A)(1)(c).
(3) Filling vacant categories
Subject to (a) and (b) below, when a category remains vacant
as a consequence of insufficient bidders after an advertised
bid message, the least senior First Officer on the system
shall be assigned to fill a Captain vacancy in a category
and the least senior Reserve Officer with First Officer
qualifications on the system shall be assigned to fill a
First Officer vacancy in a category and the least senior
Reserve Officer with Flight Engineer qualifications on the
system shall be assigned to fill a vacancy in the Flight
Engineer status in a category.
(a) A pilot aged fifty (50) or older may voluntarily
bypass upgrade training to Captain or First Officer.
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Section 19(D)(3)(a), cont.
Once exercised, such pilot will be restricted to
his/her current status until the age of sixty (60),
and his/her current equipment to age sixty (60) if a
widebody aircraft or for five (5) years if his/her
current equipment is a narrowbody aircraft. Once the
pilot qualifies on a widebody equipment type he/she
shall be restricted until age sixty (60). If the
pilot's current equipment is no longer flown at
his/her domicile, such pilot shall be allowed an
opportunity to qualify on new equipment in his/her
status at his/her domicile.
(b) The Company may, at its option, allow any First
Officer who is forty-five (45) years of age or older
at the time upgrading training is offered, to decline
such training. A Flight Engineer forty-five (45) years
of age or older may decline such upgrading training.
(4) Contingent Captain and Contingent Flight Engineer Vacancies
(a) General
The Company may at its option establish contingent
vacancy bid positions in any Captain or any narrowbody
Flight Engineer category. The Company may assign a
Captain contingent vacancy bid holder as needed to fly
as a Captain or First Officer and the contingent bid
holder so assigned shall continue to receive Captain
pay. The Company may assign a Flight Engineer
contingent vacancy bid holder as needed to fly as a
Flight Engineer or First Officer. Such Flight Engineer
shall be paid as a First Officer when so assigned. All
flight assignments shall be in accordance with Section
12 except when a contingent pilot bids and is awarded
a bid run pursuant to Section 19(D)(4)(e) below.
(b) Definitions
For purposes of this Section 19(D)(4) only:
(i) "Basic status" means the status of the category
bid award associated with a contingent vacancy
(i.e. the basic status associated with a
"Contingent Captain" bid award is Captain; the
basic status associated with a Contingent Flight
Engineer is Flight Engineer).
(ii) "Alternate status" means the status of First
Officer when associated with a contingent pilot
(i.e. the alternate status associated with a
"Contingent Captain" bid award is First Officer;
the alternate status associated with a
Contingent Flight Engineer is First Officer).
(iii) "Status change" means the movement by the
Company of a contingent pilot from the basic
status to the alternate status or from the
alternate status to the basic status.
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Section 19(D)(4)(c)
(c) Pay
(i) Contingent Captains shall receive the Captain's
rate of pay at all times. Section 4(C)(4) of the
Agreement shall not be applicable to Contingent
Captains.
(ii) Contingent Flight Engineers shall receive the
Flight Engineer rate of pay and guarantee except
when assigned to fly as First Officer which
shall be paid at First Officer rate of pay.
Section 4(C)(4) of the Agreement shall be
applicable to Contingent Flight Engineers.
(iii) Section 4(C)(5) shall apply to contingent
Captains and contingent Flight Engineers.
(d) Special Characteristics and Limitations
(i) Contingent vacancies shall be considered
permanent separate categories for purposes of
Section 19 of the Agreement. For all other
purposes, except as stated by this Section
19(D)(4), a contingent shall be considered as a
bid position within the basic status.
(ii) Displacements
Pilots holding any category award may, through
the displacement process, bid and be awarded
contingent vacancies, seniority permitting.
E.g., a 727 Captain (STL/CAP/727) may displace
into a 727 Contingent Captain (JFK/CCP/727)
position. However, a category bid award holder
must affirmatively bid a contingent vacancy to
be awarded it (no pilot will be awarded a
contingent bid as a result of a default bid).
(iii) The Company's discretion to publish contingent
vacancies and award contingent bids is limited
by the number of First Officers in the category.
The following table shall control:
---------------------------------------------------
Number of First Maximum Associated
Officers in the Contingents:
Category:
---------------------------------------------------
Up to fifty (50) Four (4)
---------------------------------------------------
Fifty-one to one Six (6)
hundred fifty (51-150)
---------------------------------------------------
Above one hundred fifty Five percent (5%), capped
(150) at fifteen (15).
---------------------------------------------------
(iv) In no event shall the number of contingents
exceed the number of reserve schedule holders in
the basic status except at the LAX and SFO
domiciles. At LAX and SFO, the following shall
apply:
(aa) When there are thirty-five (35) or more
bid runs in a category at either domicile,
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SECTION 19(D)(4)(D)(IV)(AA), cont.
the above exception shall not apply to
that domicile.
(bb) Pilots temporarily assigned after the bid
closing must be awarded a supplemental bid
run.
(v) The Company is not obligated to publish any
minimum number of contingent vacancies.
(vi) Contingent pilots shall not be counted for the
purposes of target calculations. Subsequent to
the bid award process, contingent pilots shall
be counted as a reserve schedule holder for the
purposes of Sections 9(E)(3) and 10(B)(9).
(e) Monthly bidding
Contingent bid holders shall be reserve pilots
eligible to bid only reserve schedules. Whenever it is
known, prior to monthly bid closing that he/she will
be utilized in the alternate status (First Officer)
for the entire month, he/she shall be able to exercise
his/her full seniority for bidding purposes.
(f) Status Changes
(i) The Company may status change a contingent pilot
not more than four (4) times during any bid
month, not including status changes caused by
additional flying or OFR. Mid-pairing status
changes shall not be permitted. Contingent
pilots may additional fly or OFR only in the
status as of the time the pilot indicates
his/her availability and is awarded additional
flying or OFR. The Company shall not status
change a pilot solely to allow him/her to
request additional flying or OFR.
(ii) The Company shall notify the pilot via telephone
and CAMS (JXCAP) of any changes in his/her
contingent assignment.
(g) Reserve Rules
(i) Segregated reserve lines for Contingent Captains
and Contingent Flight Engineers will be
published for monthly bidding. Duty Free periods
will be awarded in accordance with Section
12(D)(2)(a) and (c).
(ii) There shall be no dual status reserves except at
the SFO and LAX domiciles.
(iii) Contingent Flight Engineers shall be status
changed in accordance with seniority and
availability. Contingent Captains shall be
status changed in inverse order of seniority and
availability unless a more senior Contingent
Captain requests the status change.
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SECTION 19(D)(4)(G)(IV)
(iv) The Company may status change a basic Flight
Engineer prior to status changing a basic
Captain.
(h) Bidding Restrictions
A pilot's bid from any Flight Engineer category to any
Contingent Flight Engineer category shall be
considered an "upward status bid" for purposes of
Section 19(K) of the Agreement. However, a Contingent
Flight Engineer shall not be restricted from bidding
any First Officer category vacancy on the same
equipment as he/she holds in the Contingent Flight
Engineer category.
(i) The Company's obligation to train/maintain currency of
experience.
(i) In the event that a Contingent Flight Engineer
has not been trained to fulfill his bid award in
both the basic and alternate status within
forty-five (45) days after the effective date of
his/her bid, the contingent pilot shall not be
restricted to reserve and may bid his/her full
seniority in the basic status until such time as
the pilot is fully trained.
(ii) In the event that a Contingent Flight Engineer
has not been used in the basic or alternate
status within any ninety (90) day period, the
contingent pilot shall not be restricted to
reserve and may bid his/her full seniority in
the basic status, until requalified.
A Contingent Flight Engineer who must requalify
as a First Officer in any training device shall
be paid as a First Officer for such
requalification training.
(iii) Any pilot who is a successful bidder for a
permanent category vacancy in a different
domicile shall be considered as transferring at
the pilot's request for the purpose of Section
13, and will not be entitled to moving and
relocation expenses. A pilot assigned to a
permanent category domicile vacancy in a
different domicile in accordance with Section
19(D)(3) shall be considered as transferring at
Company request, and the provisions of Section
13 will apply.
(5) Declining A Bid
A pilot shall be afforded the option to decline a bid,
except a displacement bid. Such pilot shall notify his/her
Regional Chief Pilot in writing within ten (10) days after
the bid results are posted of his/her desire to exercise
this provision. When a pilot exercises this provision the
Company will be obligated to fill such vacancy within the
guidelines set forth in Section 19(E)(4) below. A pilot
electing to decline a bid in accordance with this provision
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<PAGE>
SECTION 19(D)(5), cont.
shall remain in his/her present category. Such pilot shall
be eligible to bid for any category twelve (12) months after
declining the bid, subject to bid vacancies being available
and seniority permitting.
(E) FUTURE EFFECTIVE BIDS
(1) Future effective bids shall not be bulletined more than ten
(10) months in advance.
(2) In the event of a change in future effective bid requirement
effective dates, pilots who have been awarded future
effective bids may be advanced or deferred as follows:
(a) Bids will be advanced in accordance with seniority
order of pilots awarded the earliest effective date,
except that the most senior pilot holding any future
effective date bid who expresses a desire to be
advanced to the earliest possible date may do so
provided he/she is qualified or it is practicable for
the Company to qualify such pilot for the earlier
effective date. Advancement of bids shall be subject
to paragraph (2)(c) below.
(b) Bids will be deferred in accordance with inverse
seniority order of pilots awarded bids on the date
immediately preceding the date to which the bids are
being deferred.
(c) A pilot who bids and is awarded a future effective
bid, for a specific date but who is senior enough to
have been awarded an earlier future effective bid,
will not be advanced unless he/she is the most junior
future effective bid holder in the month from which
bids are being advanced.
(d) If either paragraph (2)(a) or (2)(b) above is
utilized, the junior pilot holding a future effective
bid for that category may be deferred or his/her bid
canceled.
(3) Pilot Options in the Event of Bid Cancellation
In the event that a pilot's future effective bid is canceled
by the Company ("the instant pilot") and other future
effective category bids were awarded to pilots subsequent to
the award date of the canceled bid and prior to the date of
cancellation ("subsequent bid"), then the following
provisions shall apply:
(a) The instant pilot shall have the option to remain in
his/her current category, seniority permitting, and
the Section 19(K) restriction of the canceled bid
shall be waived; or
(b) If but for the Section 19(K) restrictions the instant
pilot would have been awarded a subsequent bid
according to his/her standing bid and provided a
junior pilot ("junior pilot") was awarded such bid,
the instant pilot may elect to be placed into such
subsequent bid. Such instant pilot will assume the
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SECTION 19(E)(3)(B), cont.
effective date of the subsequent bid. All Section
19(K) restrictions associated with the subsequent bid
award shall apply. Such instant pilot will not be
entitled to moving expenses under Section 13. No such
junior pilot shall have his/her future effective bid
canceled as a result of an action taken under this
paragraph.
(4) Replacement Future Effective Vacancy
(a) A replacement future effective vacancy may be awarded
when a pilot, who has been awarded a future effective
bid in accordance with this Section 19, utilizes
Section 6(A)(6), and shall be awarded when a pilot
utilizes Section 19(D)(5) of the Agreement to vacate
such future effective bid award.
(b) Eligibility of pilots for a replacement future
effective vacancy shall be determined by utilizing the
standing bids that were on file at the time the
original future effective bid was closed. The award of
the replacement future effective vacancy shall be in
accordance with the applicable provisions of the
Agreement except that the pilot awarded the
replacement future effective vacancy shall have a one
time option to accept or reject the award. The pilot
awarded the replacement future effective vacancy shall
not be subject to any restrictions due solely to
his/her instant election to reject the replacement
future effective vacancy award.
(c) The award of the replacement future effective vacancy
regardless of the pilot's election to accept or reject
such replacement vacancy shall fulfill the Company's
obligation under paragraph (4)(a) above. In the event
the pilot awarded the replacement future effective
vacancy rejects the award, the Company may continue
the process until the replacement future effective
vacancy is filled.
(d) The Company may backfill any subsequent vacancy
created by the award of a replacement future effective
vacancy. A backfill vacancy shall be awarded in the
same manner as the future effective replacement
vacancy and pilots awarded such backfill vacancy shall
be afforded the same rights of refusal.
(e) The System Schedule Committee will be notified of any
pilot(s) awarded replacement future effective or
backfill bids.
(F) TEMPORARY VACANCIES
(1) A temporary vacancy in a category shall exist whenever it is
anticipated that a pilot holding a permanent bid in the
category will be unavailable for flight duty for a period of
ninety (90) days or less, or an increase in requirements
subsequent to the closing of the monthly bid period. In such
event, unless the Company provides sufficient pilots in the
category to protect open time caused by the temporary
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SECTION 19(F)(1), cont.
unavailability of a pilot, it shall be filled as follows for
any period not exceeding ninety (90) days:
(a) The Company may temporarily assign the most senior
pilot(s) (in descending order) in the category at
domicile(s) with excess pilots who has a standing bid
on file, and in the absence of any such pilot(s) then
the least senior pilot(s) in the category at the
domicile(s) with excess pilots shall be temporarily
assigned. Such pilot shall be entitled to expenses
under Section 7(A)(4), and automobile expenses under
Section 13(A) when approved by the Company.
(b) If a temporary vacancy is not filled as in (1) above,
it may be filled pursuant to Section 19(D)(4),
Contingent Vacancies.
(c) In filling a vacancy under (a) above, the availability
of pilots shall be duly considered.
(d) Notwithstanding the ninety (90) days or less
restriction of (1) above, whenever a permanent vacancy
filled by a pilot not possessing Captain
qualifications creates a temporary shortage of pilots
in such permanent status at the domicile, the Company
may alleviate the shortage by filling the vacancy
temporarily in accordance with (1) above during the
period the pilot is upgrading to Captain
qualifications. This provision shall apply even though
such period may be ninety (90) days or longer, but no
pilot shall be temporarily assigned involuntarily for
longer than ninety (90) days if a more junior pilot
who is Captain qualified is then available for such
assignment.
(2) Subject to (1)(a) above, a pilot awarded a bid run or
reserve schedule for a temporary vacancy will remain to
complete such assignment but will not forfeit any bidding
rights.
(3) A pilot temporarily assigned to a category will be used the
same as permanent bid run or reserve schedule holders in
such category at the assigned domicile, and shall be
entitled to the same scheduling rights as other pilots in
his/her assigned category at a domicile.
(4) Reserve pilots may be given single trip assignments which
shall not be considered temporary assignments. Pilots
assigned in accordance with this provision will receive pay
and credit calculated from departure from domicile to return
to domicile.
(G) DISPLACEMENTS OF PILOTS
(1) Subject to Section 19(A)(1) and paragraph (3) below, a pilot
may be displaced from his/her category whenever the total
monthly flying time and/or need for reserve duties in that
category is altered resulting in a decreased requirement.
(2) If a pilot has not indicated a preference for exercise of
his/her displacement prerogative, either by Standing Bid or
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SECTION 19(G)(2), cont.
by Fax Bid, the pilot shall at the deadline date of his/her
displacement automatically be displaced to the default bid
procedure, described in Section 19(D)(2)(e) above.
(3) Subject to paragraph (2) above, a displaced pilot has the
prerogative to displace a pilot in any category, provided
he/she is senior to such pilot.
(4) Once the pilot has indicated his/her displacement
prerogative, the Company shall effect the displacement of
the most junior pilot in the category or, in the
alternative, create a vacancy in that category for the
displacing pilot, provided the pilot is senior to the most
junior pilot in the category.
(5) In the event of displacements within a domicile, any
temporary bid run or reserve schedule holders or assignees
will be displaced before any permanent bid run or reserve
schedule holder.
(6) The domicile to which a pilot is assigned or successfully
bids, upon completion of initial ground school and
transition training, will establish the pilot's first
domicile.
(7) In the event a bid displacement bulletin announces future
displacements in a bid category at a domicile, the least
senior pilot(s) shall be displaced from the category.
(8) Displacement Replacement Option: Whenever displacements are
announced in a category, any pilot in that category senior
to any pilot subject to the displacement message may elect
the displacement replacement option. At any time prior to
the deadline of the displacement, the more senior pilot may
exercise the same rights of displacement as any pilot who
would have been displaced. The pilot exercising the option
does so at the junior pilot's seniority. Pilots who elect
the Displacement Replacement Option are restricted from the
use of the provisions of Section 19(D)(5).
(H) AVERTING VACANCIES AND DISPLACEMENTS
Vacancies and/or displacements may be canceled or averted whenever
changes in requirements become known in advance of the closing
date of an announcement bulletin, as provided in Section 19(C)(3),
provided that such change in requirements will be effective within
a calendar month either side of such closing date.
(I) RESERVE OFFICER ASSIGNMENTS
(1) All reserve officers in excess of the number needed to fill
the requirements of the Company's operations may be assigned
to domiciles as designated by the Company, subject to the
following:
(a) Such assignment will be offered in order of seniority
to sufficiently qualified reserve officers at the
domicile or domiciles where the Company determines
that an excess exists.
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SECTION 19(I)(1)(B)
(b) If an insufficient number of reserve officers at such
domicile or domiciles volunteer for such assignment,
the assignment will be made in inverse order of
seniority from among sufficiently qualified reserve
officers at such domicile or domiciles.
(c) The term "sufficiently qualified" shall refer to a
pilot who has all route and equipment qualifications
except for landing renewal, proficiency check or CQT.
It is understood that assignments under this paragraph
(I) are not for the purpose of filling bid vacancies.
(d) A reserve officer assigned as above will be entitled
to expenses as provided in Section 7 if such
assignment is for ninety (90) days or less; or to
expenses provided in Section 13, if such assignment is
for more than ninety (90) days.
(2) A reserve officer may request transfer to another domicile
reserve officer assignment. If such transfer is approved by
the Company, the expense provisions of paragraph (I)(1)(d)
above will not apply.
(3) All reserve officers must be awarded a category bid to a
status prior to one hundred twenty (120) days from date of
hire as a pilot.
(J) MUTUAL TRADES
The Company shall grant requests for a mutual trade of domicile in
accordance with the procedures and restrictions outlined below.
(1) Mutual trades shall be processed twice a year, once during
the second quarter and once during the fourth quarter of the
year.
(2) The Company shall have the option of when it will allow
trade requests to be submitted, when it will award the
trades and the effective date of any transfers. The Company
shall normally allow a minimum of fifteen (15) days for the
submission of mutual trades requests.
(3) Mutual trade requests will be processed from the Mutual
Trade standing bids (JXSBP) in CAMS.
(4) The Company shall not be required to grant any trade which
may generate training.
(5) Mutual trades shall only be granted between pilots in the
same status and equipment and shall be granted on the basis
of seniority, subject to qualifications and (4) above.
(6) Any trade granted in accordance with this provision is
irrevocable.
(7) No part of Section 13 shall apply to any pilot transferred
under this provision.
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SECTION 19(K)
(K) RESTRICTIONS
(1) A pilot who is awarded a future effective bid that requires
more than three (3) days but less than ten (10) days of
training shall be eligible for a subsequent bid award
effective twelve (12) months after he/she is awarded the
bid.
(2) A pilot who is awarded a future effective bid that requires
ten (10) or more days of training shall be eligible for a
subsequent bid award effective twenty-four (24) months after
he/she is awarded the bid.
(3) A pilot who is awarded a future effective bid as a First
Officer on a small widebody aircraft that requires ten (10)
or more days of training shall be eligible for a subsequent
bid award effective twenty-four (24) months after he/she is
awarded such bid. During this restriction period, the
Company may disallow an upward status bid which would
otherwise be permitted by paragraph (4) below.
(4) A pilot with a current 19(K) restriction shall be eligible
for a bid award to a higher status without restriction;
however, a pilot who is awarded an upward status bid
pursuant to this paragraph shall carry the remainder of
his/her old category restriction to the new status and
equipment.
(5) A pilot who downbids to a lower status that will require
more than ten (10) days of training may be subject to a
thirty-six (36) month restriction from the date of the bid
award. During this restriction period, the Company may
disallow an upward status bid which would otherwise be
permitted by paragraph (4) above. The thirty-six (36) month
restriction specified herein shall not prevent a pilot who
downbids from being awarded an upgraded category vacancy on
the same equipment. The thirty-six (36) month restriction
shall be reduced by twelve (12) months or less, as
applicable, from the effective date such pilot commences
training to fill a category vacancy on the same equipment.
If a pilot downbids to a category vacancy on either the DC9
or the MD8, he/she shall receive the benefit of the reduced
restriction if he/she upgrades on either the DC9 or MD8.
(6) A pilot who bids to the DC9 or to the MD8 and who requires
differences training shall be eligible for a subsequent bid
award effective twelve (12) months after he/she is awarded
the bid.
(7) A pilot who is restricted under this Section 19(K) may bid
for and be awarded a category vacancy in the same status and
equipment to which he/she is currently restricted (e.g. JFK
757/767 CAP to STL 757/767 CAP).
(8) If a pilot is displaced from his/her current category and as
a result incurs initial/transition training, such pilot may
be subject to a displacement training restriction not to
exceed twelve (12) months from the date of the pilot's
displacement award announcement. Such restriction, if
imposed by the Company, shall only restrict a pilot from
being awarded any future category vacancy which requires
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SECTION 19(K)(8), cont.
initial equipment qualification. This paragraph (8) shall
not affect a pilot's right to bid to a higher status as
described in paragraph (4) above.
(9) A pilot shall be eligible to bid and, subject to seniority,
be awarded a category vacancy thirty-six (36) months from
his/her date of hire as a pilot ("new hire pilot"). For the
duration of said restriction, the Company may disallow an
upward status bid otherwise permitted by paragraph (4) above
and the provisions of paragraph 10(c) below shall not apply
to new hire pilots.
(10) General
(a) For the purposes of this Section 19(K), a "day" means
a calendar day which includes only basic aircraft
ground school and simulator training. Time off between
such days of training is not included.
(b) The Company may, at its option, waive the restrictions
of this Section 19(K).
(c) The restrictions of Section 19(K) above shall not
restrict a pilot from receiving a bid award to the
B737 or A319/320/321 equipment types, seniority
permitting, ("restriction waiver") until the staffing
level for the respective equipment in the instant
status reaches seventy-five (75) pilots. (E.g., the
restriction waiver will cease for the Captain
categories on the equipment type when there are
seventy-five (75) Captains on the equipment type.) In
the event there is a twelve (12) consecutive month
period with no deliveries of equipment type, such
19(K) restriction waivers shall also cease. A pilot
receiving a bid award to the B737 or A319/A320/A321
will then be subject to the appropriate 19(K)
restriction.
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SECTION 20
FURLOUGH AND EMPLOYMENT PROTECTION
(A) FURLOUGH AND EMPLOYMENT PROTECTION
(1) Pilots furloughed due to a reduction in force, on return to
duty shall be allowed, for seniority and longevity purposes,
all time accrued prior to such furlough. All such furloughs
shall expire at the end of ten (10) years from the effective
date of such furloughs. Reemployment shall be subject to the
furloughed pilot's passing a satisfactory physical
examination at the time of reemployment, and being in
possession of a valid airman's certificate as defined in
Section 31 of this Agreement. Notwithstanding the above, a
pilot who, at the time of furlough, was operating under less
than a first class FAA Medical Certificate will be allowed
to return to service provided the medical certificate which
he/she possesses at the time of recall is of at least the
same class certificate which he/she held at the time of
furlough and contains no additional waivers or limitations.
(2) Pilots employed as pilots prior to July 1, 1977 shall
continue to accrue seniority and longevity during the period
of furlough. Pilots employed as pilots after July 1, 1977
shall continue to accrue seniority and longevity for all
purposes except for longevity pay. Pilots with less than one
(1) year accrued longevity will continue to accrue longevity
for longevity pay purposes until such time that he/she has
accrued one (1) year of longevity.
(3) After reemployment the pilot shall be required to serve the
unexpired portion of his/her probationary period. All such
re-employed pilots shall be recalled to the domicile from
which he/she furloughed. If the domicile from which the
pilot was furloughed no longer exists, moving expenses will
be paid from such former domicile to the domicile to which
the pilot is recalled in accordance with the provisions of
Section 13 respecting transfers at Company request.
(B) In case of furlough, the Company will notify all pilots to be
furloughed at least thirty (30) days in advance of the effective
date of the furlough; except that the thirty (30) days notice
requirement shall not apply where the furlough is occasioned by
Act of God, circumstances over which the Company has no control,
or strikes or other work stoppages of employees of the Company.
The Company may require such pilots, who will be furloughed, to
perform normal flight duties during the notice period.
(C) (1) All pilots furloughed from the Company shall, at the time of
furlough, file proper addresses with TWA Flight Operations
Department. Any change of address must be supplied to the
same department immediately. Any furloughed pilot failing to
notify the TWA Flight Operations Department within fourteen
(14) days of receipt of recall notice that he/she will
report for duty, or failing to return to duty by the date
stated in the recall notice, which shall not be less than
twenty-one (21) days of notice, will be considered out of
service unless a justifiable reason be presented therefor.
The preceding sentence shall not apply where the furlough is
occasioned by Act of God, circumstances over which the
Company has no control, or strikes or other work stoppages
of employees of the Company, except that upon return to
normal operating conditions all pilots shall return to duty
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SECTION 20(C)(1), cont.
promptly upon receiving notice to do so from the Company.
Any pilot who fails promptly so to return, will be
considered out of service unless a justifiable reason be
presented therefor.
(2) Recall Bypass Option
(a) Furloughed pilots may file a recall bypass option with
the office of the Managing Director-Flight Operations.
This option may be updated at any time prior to the
announcement of recall.
(b) Once a recall program is announced, furloughed pilots
falling within the recall number who do not have a
recall bypass option on file will not be eligible for
bypass.
(c) Furloughed pilots who have a recall bypass option on
file will not be offered recall but will be passed
over. Such pilots withdrawing their recall bypass
option will be offered a recall during the next recall
on the basis of their seniority.
(d) The Company will not be required to recall any pilot
when a recall is not required regardless of the
seniority of the pilot involved.
(e) Seniority will govern the cancellation of the bypass
option.
(f) The bypass option will terminate as soon as the
Company announces the recall of the last furloughed
pilot.
(g) This entire recall bypass does not apply in situations
wherein pilots have been furloughed due to Acts of
God, circumstances over which the Company has no
control, strikes or other work stoppages by employees
of the Company.
(3) Furlough Replacement Option (FRO)
(a) The availability of FRO's will be announced in
conjunction with the Furlough Notice and Section
18(A)(3) leaves. The pilot will have fifteen (15) days
from the announcement to file a request for an FRO
with the Managing Director-Flight Operations. All
those requested will be granted on the basis of
seniority and qualification and staffing requirements
as determined by the Company.
(b) Any pilot awarded an FRO will be afforded all benefits
of this Section (except that the pilot shall not be
permitted to elect the lump sum option) including
furlough pay and furlough benefits based upon the
pilot who would have been furloughed. The Company will
not be exposed to any additional expense in
furloughing a senior pilot than it would have been,
had the junior been furloughed.
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SECTION 20(C)(3)(C)
(c) The number of furloughs announced will be reduced from
the original number by the amount of FRO's awarded in
addition to any leaves granted under Section 18.
(d) Any benefits obtained hereunder will not affect early
or normal retirement either in pay or timeliness.
(e) Pilots taking this option will have the same rights of
recall as the pilot that would have been furloughed
including recall bypass.
(f) If a pilot is operating under an equipment restriction
(Section 19(K)), the pilot shall not be permitted to
exercise a FRO. Additionally, a pilot who has changed
status within the previous twelve (12) months and
required more than refresher training, will not be
eligible for FRO. Any pilot with less than one (1)
year of active service remaining prior to normal
retirement, will not be eligible for FRO.
(D) (1) A pilot who has two (2) or more years of service with the
Company as a flight deck crew member and who is furloughed
shall receive furlough pay calculated at the rate of four
percent (4%) of the total aggregate whole months of active
service with the Company as a flight deck crew member to a
maximum of one hundred twenty (120) months.
(2) The amount of furlough pay due per month shall be the
guarantee due the pilot for the last full month worked.
(3) A pilot eligible for furlough pay shall receive pay starting
at time of furlough, or if in a non-pay status, at the time
he/she is available to return to active pay status and
payments for the amount due shall be at regular pay periods
and continue until all furlough pay credit is used; except
that in no event shall any such pay be due after effective
date of recall by the Company.
(4) A pilot recalled by the Company and who is later furloughed
shall again be entitled to furlough pay calculated on the
pilot's aggregate whole months of active service with the
Company as a flight deck crew member as in paragraph (1)
above.
(5) A pilot will only be eligible for that portion of his/her
monthly furlough pay which exceeds the amount of his/her
monthly salary if such pilot remains in the employ of the
Company in any position.
(6) The provisions of this paragraph (D) will not apply where
the furlough is occasioned by Act of God, circumstances over
which the Company has no control, or strikes or other work
stoppages of employees of the Company, except that the same
shall be applicable, (with the exception of the time at
which furlough pay is first due) as of the cessation of such
strike or other work stoppage of employees of the Company,
to any pilot who is not recalled at the same time the
Company first recalls pilots furloughed as a result of such
strike or work stoppage.
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SECTION 20(D)(6), cont.
Notwithstanding the foregoing, in the event of a liquidation
of the airline or permanent cessation of all commercial
flight operations prior to September 1, 1999, all pilots
furloughed following or in contemplation of such liquidation
or cessation shall be entitled to furlough pay as provided
for in Section 20(D)(1) through (5), above, immediately upon
the effective date of furlough.
(E) In consideration of the Company's program to operate turbo-jet
aircraft with a three-pilot member crew, the Company will not
furlough any pilots No.1 through No.1581 on the TWA Pilots? System
Seniority List of December 28, 1961. The foregoing does not alter
the current status of any pilot previously furloughed, and does
not apply in any case where the Company does not require the
services of a pilot because of Act of God, circumstances over
which the Company has no control, or strikes or other work
stoppages.
(F) Furloughed pilots (not including those whose furlough is
occasioned for any of the reasons stated in paragraph (D)(6)
above), may elect to withdraw their entire retirement benefit in a
lump sum payment pursuant to the provisions of Article 8 of the
TWA Retirement and Trust Annuity Plans for Pilots and Flight
Engineers.
(G) Any pilot furloughed having more than twelve (12) years of
seniority with the Company as a flight deck crew member at the
time of his/her furlough shall have his/her pass and reduced rate
travel privileges on TWA for such pilot, his/her spouse and
eligible dependents, (i.e., such privileges as are in effect on
the date of his/her furlough) extended for a period of one (1)
year from the date of his/her furlough, subject to his/her annual
allotment.
(H) (1) The Company shall provide to pilots furloughed and who have
twelve (12) or more years of service with the Company as a
flight deck crew member group life (basic only) including AD
& D, medical and dental insurance, for a period of one (1)
year from their date of furlough. The Company shall provide
similar insurance coverage to furloughed pilots having less
than twelve (12) years of service with the Company as a
flight deck crew member for a period of ninety (90) days
from their date of furlough.
(2) Coverage as provided in (1) above will be discontinued if
the pilot obtains other insurance coverage as a result of
his/her obtaining other employment.
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SECTION 21
GRIEVANCE PROCEDURE
(A) DISCIPLINE AND DISCHARGE
(1) In no event will a pilot be disciplined or discharged from
the Company without a thorough, impartial, and expeditious
investigation of the alleged cause. The Company will advise
the pilot and an LEC Officer of such investigation prior to
its commencement and further that he/she is entitled to
union representation throughout said investigation. At the
conclusion of the investigation, the Company will notify the
pilot and the LEC Officer, in writing by certified mail, of
any discipline or discharge action contemplated by the
Company. Receipt by the pilot of the notice will be presumed
to be no later than the fifth business day after the date of
mailing. Further, no pilot shall be disciplined or
discharged without a hearing, provided that within ten (10)
business days of receiving the notification in writing as
stipulated above, the pilot or an LEC Officer makes written
request for a hearing to the Regional Chief Pilot at the
pilot's domicile. The date of said request will be the date
of mailing which, if necessary, must be established by the
pilot.
New York: St. Louis:
--------- ----------
TWA Flight Operations Flight Operations
Hanger 12, Room 202 P.O. Box 10236
JFK Int'l Airport Lambert Int'l Airport
Jamaica, N.Y. 11430 St. Louis, MO 63145
Copies of such requests shall also be sent to the Vice
President, Flight Operations Corporate Headquarters.
(2) Should the pilot or an LEC Officer fail to request a hearing
within the prescribed time limits, the Company may
thereafter effect discipline or discharge and shall notify
the pilot by certified mail of such action and the precise
reason(s) for it. In such case the discipline or dismissal
shall be final.
(3) When a hearing, as provided in (1) above, is requested, such
hearing shall be held by a Flight Operations official of the
Company designated by the Company for that purpose or his /
her designee, and shall be held within ten (10) business
days after the Company receives written notification from
the pilot or an LEC Officer requesting such hearing.
(4) Prior to such hearing, the Company shall furnish the pilot
and an LEC Officer a copy of the precise charge or charges
against him/her. Copies of all materials relied upon by the
Company in making the decision to effect discipline or
discharge will be supplied at least three (3) business days
prior to the hearing. Upon written request, the pilot shall
be granted a postponement of the hearing, not in excess of
ten (10) business days, in which to prepare and to secure
the presence of witnesses. Such request for a hearing
postponement shall be made to the Regional Chief Pilot, at
the pilot's domicile. Notwithstanding the provisions of (A)
(6) below, a pilot requesting postponement of the initial
hearing as provided in this paragraph may be removed from
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SECTION 21(A)(4), cont.
the payroll for the duration of such postponement. However,
in the event the grievance is sustained at the initial or
any subsequent hearing, such days shall be restored to the
pilot. Upon written request from the pilot or the
Association, the Company will make available at such hearing
consistent with operational requirements, witnesses who are
employed by it. When witnesses are called, the provisions of
Section 22(Q) shall apply. At such hearing the pilot shall
have the right to be represented by a Company employee of
his/her choice or by his/her duly accredited representative
or legal counsel.
(5) Within ten (10) business days after the close of such
hearing, the Company shall notify the pilot of its decision
in writing and shall furnish the pilot and his/her duly
accredited representatives or legal counsel and an LEC
Officer a copy thereof. Such copies will be sent by
certified mail.
(6) Nothing in this Section shall be construed to prevent the
Company from holding a pilot out of service prior to the
written notification provided for in Paragraph (A)(1), or
during the course of the hearing and decision provided for
in Paragraphs (A)(3) and (5) of this Section. However,
during any such period that a pilot is held out of service
by the Company, he/she shall, if a bid run holder, be paid
trips missed for the initial month or part of a month and
the daily rate applicable to his/her current category bid
award for any subsequent month or part of a month. A
reserve schedule holder shall be paid the reserve daily rate
applicable to his/her current category bid award, not to
exceed the appropriate category ALV (exclusive of previously
completed ETO or Volunteer Flying).
(B) OTHER GRIEVANCES
Any pilot or group of pilots covered by this Agreement who have a
grievance concerning any action of the Company affecting them,
except matters involving discipline or dismissal, shall have such
grievance considered in accordance with the following procedure:
(1) Grievances under this paragraph (B) must be filed within
sixty (60) days after the pilot(s) has, or reasonably would
have had knowledge of the matter giving rise to the
grievance. When a group of pilots has a grievance, they
shall select a representative to act in their behalf.
(2) A written request for discussion setting forth a statement
of the facts out of which such grievance arose, and the
provision or provisions of the Agreement, if any, upon which
the grievance is based shall be filed with the pilot(s)
Regional Chief Pilot with copies to the Vice President -
Flight Operations and ALPA Representation Department, 3221
McKelvey Road, Suite #200, Bridgeton, MO 63044. In order to
allow for adequate preparation by the grievant and/or an
Association representative, the Company, upon timely written
request from an Association representative and proper
release from the grievant, if necessary, shall provide an
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SECTION 21(B)(2), cont.
Association representative information specifically related
to the circumstances of the instant grievance. This
information must not otherwise be available to the grievant
or an Association representative. Furthermore, the Company
shall provide such information to the pilot and/or an
Association representative at least three (3) days prior to
the discussion. If the Company cannot provide the requested
information prior to said three (3) days, the discussion
shall be postponed up to ten (10) business days to allow the
Company to comply with this time limit.
(3) Within ten (10) business days after receipt of the request
for discussion outlined above, the Company will conduct such
discussion, and within ten (10) business days from the
receipt of the previously mentioned request or within six
(6) business days after such discussion was held, whichever
is later, the Regional Chief Pilot shall issue a written
decision concerning the matter to the pilots.
(C) APPEAL
If the decision under paragraph (A)(5) or (B)(3) is
unsatisfactory, appeal by the pilot(s), if made, shall be to the
Trans World Airlines Pilot's System Board of Adjustment as
provided in Section 22, provided such appeal is made within thirty
(30) days from the date of receipt by the pilot(s), or his/her
duly accredited representative or representatives, of the decision
of the Company.
All submissions to these System Boards of Adjustment shall be in
conformity with paragraph (I) of Section 22.
Grievances appealed to the Trans World Airlines Pilot's System
Board of Adjustment under this paragraph, shall immediately be
docketed by the parties for presentation to the next quarterly
session of these System Boards of Adjustment, as such are provided
for in Paragraph (F) of Section 22. However, in no event shall a
case be docketed for hearing before the System Board within thirty
(30) days of the date of appeal in order to allow time for
preparation of cases, etc.
(D) GENERAL
(1) If any decision made by the Company under the provisions of
this Section is not appealed by the pilot affected within
the time limit prescribed herein for such appeal, the
decision of the Company shall become final and binding. Time
limits provided in this Section 21 may be extended by
agreement in writing.
(2) Witnesses and representatives who are employees of the
Company shall receive free positive space coach
transportation over the lines of the Company from the point
of Company duty or the station nearest the person's
residence to the point of discussion or hearing, as the case
may be, and return.
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SECTION 21(D)(3)
(3) Notification in writing required hereunder shall be
accomplished through the use of Certified Mail with Return
Receipts, or other means mutually agreed upon in writing.
(4) Nothing in this Agreement shall extend the right of
investigation and hearing to a pilot during his probationary
period as described in Section 17(C).
(5) If, as a result of any hearing or appeal therefrom as
provided herein, a pilot is exonerated, he/she shall, if
he/she has been held out of service, be reinstated without
loss of seniority and shall be paid for such time lost in an
amount which he/she would have ordinarily earned had he/she
been continued in service during such period.
(6) If, as a result of any hearing or appeal therefrom as
provided herein, the pilot shall be exonerated, the
personnel record shall be cleared of the charges.
(7) When it is mutually agreed that a stenographic report is to
be taken of the investigation and hearing in whole or in
part, the cost will be borne equally by both parties to the
dispute. In the event it is not mutually agreed that a
stenographic report of the proceedings shall be taken, any
written record available taken of such investigation and
hearing made by either of the parties to the dispute shall
be furnished to the other party to the dispute upon request,
provided that the cost of such written record so requested
shall be borne equally by both parties to the dispute.
(8) The hearing or discussion, as the case may be, will be held
at the aggrieved pilot's home domicile, unless otherwise
agreed to by such pilot and the Company.
(9) The Company and the Association shall sponsor a "Bi-Monthly
Grievance Conference" (or "the Conference") for the purpose
of resolving, if possible, grievances. The Conference shall
be held between the tenth (10th) and twentieth (20th) day of
every other month. The place of the conference shall
alternate between a location designated by the Company and
one designated by the Association. Representatives of the
Company, the Association and the grievant, if other than the
Association, may attend. Any grievance may be submitted
for review and potential resolution. There shall be no
written transcript of the Conference; however, each party is
free to maintain written notes. Such review and written
notes shall not be admitted in any proceeding under Sections
21 or 22. Each party shall bear its own costs.
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SECTION 22
SYSTEM BOARD OF ADJUSTMENT
(A) The term "Company" as used in this Section shall be construed to
mean Trans World Airlines. The term "Association" as used in this
Section shall be construed to mean Air Line Pilots Association,
International.
(B) In compliance with Section 204, Title II, of the Railway Labor
Act, as amended, there is hereby established a Pilots' System
Board of Adjustment for the purpose of adjusting and deciding
disputes which may arise under the terms of this Agreement and
which are properly submitted to it. This Board shall be known as
"Trans World Airlines Pilots' System Board of Adjustment". Unless
otherwise indicated herein, the term "Board" shall be construed to
mean the "Trans World Airlines Pilots' System Board of Adjustment"
as defined in paragraph (C)(1) below.
(C) (1) The Trans World Airlines Pilots' System Board of Adjustment
shall consist of five (5) members, two (2) of whom shall be
selected and appointed by the Association and two (2) by the
Company. The fifth member of the Board (neutral referee)
shall be selected from a panel of at least seven (7) neutral
referees which shall be established by mutual agreement
between the Association and the Company within sixty (60)
days from the date of signing of this agreement. If no
agreement can be reached at that time, either the Company or
the Association may petition the National Academy of
Arbitrators or the American Arbitration Association for the
appointment of one (1) or more neutral referees. Once
established, changes may be made in said panel by mutual
agreement of the parties hereto at any time. Additionally,
each party shall have the right to unilaterally strike one
(1) neutral referee from the total group not more than once
every six (6) months. The replacement shall be by mutual
agreement of the parties.
(2) Further, there shall be a special four-member System Board
of Adjustment consisting of the two (2) Association and the
two (2) Company members selected and appointed to the five-
member System Board of Adjustment. By mutual agreement
between the Company and the Association, the four-member
Board shall meet to hear a specific case(s) which has been
properly submitted to the five-member System Board. When
such request is agreed to, this System Board shall meet
within ten (10) working days from the date it received the
request, to consider this case(s).
All provisions of this Section applicable to the five-member
System Board of Adjustment shall also be applicable to the
special four-member System Board of Adjustment. Moreover,
the decisions of this four-member System Board of Adjustment
in all disputes properly referred to it shall be issued by
the Board within five (5) working days after the close of
the hearing, and in the event of a decision of deadlock the
Board shall promptly notify the parties to the case of such
deadlock decision, including the date thereof, and such case
shall be immediately docketed for a hearing at the next
meeting of the five-member System Board of Adjustment.
(3) Further, there shall be a special three-member System Board
of Adjustment consisting of one (1) Association member, one
(1) Company member and a neutral referee selected from the
panel of neutral referees established in paragraph (C)(1) of
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SECTION 22(C)(3), cont.
this Section. By mutual agreement between the Company and
the Association, the three-member System Board shall meet to
hear a specific case(s) which has been properly submitted to
the five-member System Board. When such request is agreed
to, the three-member Board shall meet within sixty (60)
days.
(a) The three-member System Board shall meet at the pilot
domicile where the grievant is based unless another
location is mutually agreed upon by the parties.
(b) The Company and the pilot shall each be permitted one
(1) representative for the presentation of their
respective case before the three-member System Board.
The Company and the pilot/or the pilot's designated
representative shall each be afforded one hour (1:00)
to present their main case and thirty minutes (0:30)
for rebuttal. These time limits may be extended upon
the unanimous agreement of the three-member System
Board. There shall be no stenographic transcript or
post-hearing briefs in cases presented before the
three-member System Board.
(c) Awards of the three-member System Board shall be
issued within five (5) working days after the close of
the hearing. The award shall be no more than two (2)
pages and shall briefly set forth the basis of the
award. Awards of the three-member System Board shall
be on a no precedent, no referral basis.
(D) The two (2) Association members and the two (2) Company members of
the Board shall serve for one (1) year from the date of their
appointment or until their successors have been duly appointed.
The terms of office for these members of the Board shall be
staggered so that only one term expires in each calendar quarter
(a Company member's term expiring in the first quarter, an
Association member's term expiring in the second quarter, and so
forth). Vacancies in the membership of the Board shall be filled
in the same manner as is provided herein for the selection and
appointment of the original members of the Board.
(E) The fifth member of the Board (neutral referee) shall be selected
from the panel of referees provided in (C)(1) above at least
forty-five (45) days prior to the original scheduled date of the
applicable System Board. Lacking mutual agreement, the alternate
strike method shall be used to select a neutral from this panel,
with the Company initiating first rejection after January 1, 1976,
and alternating first rejection thereafter.
(F) Appointments of Association members and Company members of the
Board shall be made by the respective parties within thirty (30)
days from the date of the signing of this Agreement and said
appointees shall meet alternately in the city where the general
offices of the Company and the Association are maintained (unless
a different place of meeting is agreed upon by the Board), within
forty-five (45) days from the date of the signing of this
Agreement, and shall organize and select a Chairman and a Vice
Chairman, both of whom shall be members of the Board. The term of
the office of Chairman and Vice Chairman shall be one (1) year.
Thereafter the Board shall designate one (1) of its members to act
as Chairman and one (1) to act as Vice Chairman for one (1) year
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SECTION 22(F), cont.
terms. Each officer so selected shall serve for one (1) year or
until his/her successor has been duly selected. The office of
Chairman shall be filled and held alternately by an Association
member of the Board and by a Company member of the Board. When an
Association member is Chairman, a Company member shall be Vice
Chairman, and vice versa. The Chairman or, in the absence of the
Chairman, the Vice Chairman, shall preside at meetings of the
Board and at hearings and shall have a vote in connection with all
actions taken by the Board.
After the organizational meeting referred to herein, the System
Board of Adjustment shall thereafter meet in the city where the
general offices of Trans World Airlines, are maintained (unless a
different place of meeting is agreed upon by the Board) during the
second week of January, the second week of April, the second week
of July, and the second week of October each year, provided that
at such times there are cases filed with the Board for
consideration, and shall continue in session until all matters
before it have been considered, unless otherwise mutually agreed
upon. By mutual agreement, the System Board may be rescheduled
once to another date or dates within the current calendar quarter,
but in no event shall it be rescheduled to meet in another
calendar quarter.
(G) The System Board of Adjustment shall have jurisdiction over
disputes between any employee covered by this Agreement and the
Company, growing out of grievances or out of interpretation or
application of any of the terms of this Agreement. The
jurisdiction of the Board shall not extend to proposed changes in
hours of employment, rates of compensation, or working conditions
covered by existing agreements between the parties hereto.
(H) The Board shall consider any dispute properly submitted to it by
the President of the Association or by the Vice President-Flight
Operation of the Company when such dispute has not been previously
settled in accordance with the terms provided for in this
Agreement.
(I) All disputes properly referred to the Board for consideration
shall be addressed to the Chairman with a copy to the Director,
Labor Relations-Flight and a copy to the pilot's Regional Chief
Pilot. Five (5) copies of each petition, including all papers and
exhibits in connection therewith, shall be forwarded to the
Chairman, who shall promptly transmit one (1) copy thereof to each
member of the Board. Each case submitted shall show:
(1) Question or questions at issue.
(2) Statement of facts out of which the dispute arose and the
particular provision or provisions of the Agreement, if any,
alleged to have been violated.
(3) Position of employee or employees.
(4) Position of Company
Either party may submit the dispute and its position to the Board
with a copy to the Company and the date of posting of such copy
will be the significant date for purposes of the thirty (30) day
period provided in Section 21(C) of this Agreement. No matter
shall be considered by the Board which has not first been handled
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<PAGE>
SECTION 22(I), cont.
in accordance with the provisions of Section 21 of this Agreement;
provided that by agreement of the parties, matters may be
submitted directly to the Board.
(J) Upon receipt of notice of the submission of a dispute, the
Chairman, or Vice Chairman, shall docket it for the next regular
meeting of the Board subject to Section 21(C) or, if any two (2)
members of the Board consider the matter of sufficient urgency and
importance, then at such earlier date and at such place as the
Chairman (Vice Chairman) and any two (2) members of the Board
shall agree upon, but not more than fifteen (15) days after such
request for meeting is made by any two (2) said members, and the
Chairman shall give the necessary notices in writing of such
meeting to the Board members and to the parties to the dispute.
Upon receipt of notice of the submission of a dispute involving a
termination of employment pursuant to Section 21(A), the Chairman
or Vice Chairman of the Board shall docket a System Board to
convene and hear such dispute within sixty (60) days from the date
of the first step Section 21(A) denial and that either party may
extend such sixty (60) day period for an additional ninety (90)
days.
(K) Employees covered by this Agreement may be represented at Board
hearings by such person or persons as they may choose and
designate, and the Company may be represented by such person or
persons as it may choose and designate. Evidence may be presented
either orally or in writing or both.
On request of individual members of the Board, the Board may, by a
majority vote, or shall at the request of either the Association
representatives or the Company representatives thereon, summon any
witnesses who are employed by the Company and who may be deemed
necessary by the parties to the dispute, or by either party, or by
the Board itself, or by either group of representatives
constituting the Board.
The number of witnesses summoned at any one time shall not be
greater than the number which can be spared from the operation
without interference with the services of the Company.
(L) A majority vote of all members of the Board shall be competent to
make a decision. The parties to the dispute shall be notified in
writing of the decision of the Board within sixty (60) days of the
close of the hearing before the Board. This sixty (60) days time
limit may be extended by mutual agreement between the parties to
this Agreement in writing.
(M) Decisions of all Boards in all cases properly referable to them
shall be final and binding upon the parties hereto.
(N) Nothing herein shall be construed to limit, restrict or abridge
the rights or privileges accorded either to the employees or to
the employer, or to their duly accredited representatives, under
the provisions of the Railway Labor Act, as amended, and the
failure to decide a dispute under the procedure established herein
shall not, therefore, serve to foreclose any subsequent rights
which such law may afford or which may be established by the
National Mediation Board by orders issued under such law with
respect to disputes which are not decided under the procedure
established herein.
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SECTION 22(O)
(O) The Board shall maintain a complete record of all matters
submitted to it for its consideration and of all findings and
decisions made by it. The foregoing "complete record" does not
necessarily include stenographic transcripts of all testimony of
witnesses who appear before the Board.
(P) Each of the parties hereto will assume the compensation, travel
expense, and other expenses of the Board members selected by it.
The reasonable expenses and compensation of referees appointed in
accordance with paragraph (C) above, will be borne equally by the
parties hereto.
(Q) Each of the parties hereto will assume the compensation, travel
expense, and other expenses of the witnesses called or summoned by
it. Witnesses who are employees of the Company shall receive free
positive space transportation over the lines of the Company from
the point of duty or assignment to the point at which they must
appear as witnesses and return, to the extent permitted by law.
(R) The Chairman and the Vice Chairman, acting jointly shall have the
authority to incur such other expenses as, in their judgment, may
be deemed necessary for the proper conduct of the business of the
Board and such expense shall be borne one-half by each of the
parties hereto. Board members who are employees of the Company
shall be granted necessary leaves of absence for the performance
of their duties as Board members. Board members who are employees
of the Company shall each be furnished a Class 3 Term Pass for
transportation over the lines of the Company for the purpose of
attending meetings of the Board to the extent permitted by law.
(S) It is understood and agreed that each and every Board member shall
be free to discharge his/her duty in an independent manner,
without fear that his/her individual relations with Company or
with the employees may be affected in any manner by any action
taken by him/her in good faith in his/her capacity as a Board
member.
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SECTION 23
RETIREMENT, TRUST AND SAVINGS PLANS
Except as specifically amended hereunder, all provisions of the
following retirement plans (collectively, the "Plans"), as in existence
on September 1, 1994, and related documents, shall remain in full force
and effect: the Retirement Plan for Pilots (the "A-Plan"); the TWA
Pilots Directed Account Plan (the "DAP"); the Section 401(k) Plan for
Pilots (the "401(k) Plan"); and the Excess Employee Benefit Plan for
Pilots. Amendments to the Plans which are required hereunder shall be
effective as of the dates specified, except as prohibited by law and
subject to the approval of the U.S. Treasury Department and other
appropriate governmental agencies, and except as otherwise provided.
(A) THE RETIREMENT PLAN FOR PILOTS OF TRANS WORLD AIRLINES, INC. (the
"A-Plan" or the "Plan")
(1) The A-Plan shall be established and maintained by the
sponsor as a plan "qualified" under Section 401(a) of the
Internal Revenue Code.
(2) Effective as of January 8, 1993 (the "Closing Date"), in
furtherance (and not in limitation) of certain provisions of
that certain Settlement Agreement (the "Settlement
Agreement") dated as of January 5, 1993 among Trans World
Airlines, Inc., the Official Unsecured Creditors' Committee
of Trans World Airlines, Inc., the Pension Benefit Guaranty
Corporation, the International Association of Machinists and
Aerospace Workers, the Independent Federation of Flight
Attendants, the Air Line Pilots Association, International,
the Transport Workers Union of America, Carl C. Icahn, the
Icahn Entities and Pichin Corp., the following shall apply
to the Plan (with the capitalized terms used below being
defined in the Settlement Agreement):
(a) Effective January 8, 1993, Pichin Corp. (also known as
the "Icahn Sponsor") shall assume the Plan, and from
and after such assumption, the following shall be
applicable: The Icahn Sponsor shall be the plan
sponsor, contributing sponsor and plan administrator
of the Plan, and shall have the authority to control
and manage the Plan and its assets, subject to the
assignment of certain specific responsibilities to the
Benefits Administrator, the Retirement Board and/or
Retirement Committee, the Company, and any other
Persons or groups named in the Plan; and subject to
the restrictions on amendments to the Plan set forth
in paragraph (b) below. The Icahn Sponsor, the
Company, and any other Person or groups named in the
Plan with assignments of specific responsibilities
under the Plan may, in a writing acknowledged by the
designee, designate other Persons or groups to carry
out any or all of their responsibilities in connection
with the Plan, pursuant to section 405(c)(1)(B) of
ERISA.
(b) Benefits Administrator. From and after assumption of
the Plan by the Icahn Sponsor, the Company and its
successors and assigns shall have and retain all
rights, powers, discretions, authorities and
responsibilities as the benefits claim administrator
for the Plan (the "Benefits Administrator"), and shall
manage and control the operation and administration of
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SECTION 23(A)(2)(B), cont.
the Plan with respect to the determination and payment
of Plan benefits and disclosure to Participants for
all purposes under Title I of ERISA. Subject to the
assignments stated in the Plan of certain
responsibilities to the Retirement Board (as defined
in the Plan), as provided in this Section and the
Plan:
(i) The Benefits Administrator may, in a writing
acknowledged by the designee, designate other
Persons or groups to carry out any or all of its
responsibilities in connection with the Plan
pursuant to section 405(c)(1)(B) of ERISA.
(ii) The authority of the Benefits Administrator to
operate and administer the Plan includes, but is
not limited to the authority: (A) To make and
enforce rules and regulations necessary or
proper for the benefits administration of the
Plan; (B) To interpret the Plan, including
questions of benefit eligibility, in good faith;
(C) To compute the amount of benefits payable to
any Participant or beneficiary under the Plan in
accordance with the provisions of the Plan, and
to determine to whom such benefits shall be
paid; and (D) To authorize the payment of
benefits under the Plan.
(iii) After the Closing, the Benefits Administrator
shall carry out the duties, powers and
obligations of the plan administrator with
respect to disclosure to Participants under
Title I of ERISA.
(iv) All determinations and other actions taken by
the Benefits Administrator and the Retirement
Board under the Plan and ERISA shall be
conclusive and binding, except that the Icahn
Sponsor shall have the right to bring an action
under ERISA Section 502(a)(3) to seek to enjoin
any act or practice of the Benefits
Administrator or the Retirement Board or any
other Persons and groups named in the Plan or
with responsibilities under the Plan, that
violates the terms of the Plan.
(v) The Benefits Administrator may seek
reimbursement from the Plan for costs, fees and
expenses incurred in carrying out its duties
under the Plan (including the Benefits
Administrator's responsibilities on the
Retirement Board). The Icahn Sponsor shall cause
the Plan to make reimbursement to the Benefits
Administrator for reasonable costs, fees and
expenses to the extent permitted by the terms of
the Plan and the provisions of ERISA.
(vi) Except as required by ERISA, as named
fiduciaries of the Plan, the Benefits
Administrator, the Icahn Sponsor and the
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<PAGE>
SECTION 23(A)(2)(B)(VI), cont.
Retirement Board shall not be liable for the act
or omission of another named fiduciary who is
carrying out the responsibility allocated to
such other named fiduciary.
(vii) The Icahn Sponsor and the Benefits Administrator
shall cooperate in good faith and timely provide
such information to each other as may be
necessary for each to perform its obligations in
respect of the Plan properly.
(viii) The Icahn Sponsor shall cause the Plan to make
benefit payments and take any and all related
actions in accordance with the determinations
and instructions of the Benefits Administrator.
(ix) The Benefits Administrator will provide prompt
notice to the Icahn Sponsor of all
determinations made by the Benefits
Administrator and the Retirement Board and shall
respond to reasonable requests of the Icahn
Sponsor for additional information necessary for
the Icahn Sponsor to perform its
responsibilities under the Plan properly.
(c) Limit on Lump Sum Payments. The Icahn Sponsor will not
by amendment to the Plan or otherwise make available
early retirement lump sum benefits (except those
already provided under the frozen Plan) or other
inducements to Participants who are then active or
temporarily furloughed or striking employees of the
Company without the Company's prior written consent.
The Company may give or withhold such consent in its
discretion and judgment, which shall be based upon a
good faith determination as to whether the action
proposed by the Icahn Sponsor will adversely affect
the Company's operations. The sole remedy of the Icahn
Sponsor in respect of this provision shall be specific
performance or injunctive relief.
(d) Fiduciary Standards. The Plan will be administered and
its assets invested in good faith in compliance with
all applicable fiduciary and prudent investment
standards, including assuring adequate liquidity to
meet all payment obligations of the Plan when due. The
Company and/or the Benefits Administrator shall have
the right to direct the Icahn Sponsor to amend the
Plan to provide for, and use Plan assets to make
unsubsidized lump sum payments to Participants of the
Plan as designated by the Company, subject to the
requirements of applicable law and consistent with the
cash flow needs of the Plan. The Icahn Sponsor shall
provide the Company and the PBGC copies of asset
management and other reports obtained in the ordinary
course by the Icahn Sponsor or the Plan trustees. The
Icahn Sponsor shall also provide, at the expense of
the Company, such other information and data
respecting the Plan as the Company may reasonably
request. The Icahn Sponsor will provide the PBGC with
such information and data respecting the Plan as the
PBGC is entitled to request under applicable law. The
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SECTION 23(A)(2)(D), cont.
Company will promptly provide the Association copies
of the asset management and other reports, data and
information respecting the Plan which the Company
receives from the Icahn Sponsor.
(e) Actuarial Changes. No actuarial change will be made in
respect of the Plan unless the Company and the PBGC
are given prior written notice of such change by the
Icahn Sponsor, accompanied by a certification from the
Plan's enrolled actuary establishing that such change
is justified. Subject to all requirements of
applicable law, the Icahn Sponsor will continue to
retain the Plan's presently enrolled actuary through
December 31, 1995, provided that such actuary does not
materially change its current actuarial assumptions;
and the Icahn Sponsor may continue such actuary beyond
such date. The enrolled actuary shall at all times be
independent and shall not be affiliated with Icahn or
any of the Icahn Entities and shall not be otherwise
employed by Icahn or any of the Icahn Entities. The
Icahn Sponsor shall not take any action to direct the
actuary to make any material change to the current
actuarial assumptions with respect to the Plan.
(f) Plan Amendments. The Plan will be amended by adoption
of the amendments described below, to the extent
permitted by law, to implement the Settlement
Agreement and to implement the additional amendments
previously agreed upon by the Company and the
Association. Among other matters the amendments to
implement the Settlement Agreement will accomplish the
following changes in the Plan:
(i) At least fifteen (15) days before January 8,
1993 (the "Freeze Date"), the Association shall
have consented to, and the Company shall have
adopted, an amendment freezing the Plan to cease
further benefit accrual under the Plan,
effective on the Freeze Date. In accordance with
ERISA Section 204(h), not fewer than 15 days
before the Freeze Date, the Company shall issue
written notice of such amendment, setting forth
the text of the amendment and its effective
date. The Company shall have issued such notice
to: each participant in the Plan, or the person
designated in writing to receive notice on
behalf of the participant; each participant who
is an alternate payee pursuant to a qualified
domestic relations order, or the person
designated in writing to receive notice on
behalf of the alternate payee; and the
Association.
(ii) As of the Closing Date, the Company shall adopt
and the Icahn Sponsor and the Association shall
approve, and the PBGC shall not object to, final
versions of:
a. Four Plan amendments that effectuate
existing agreements between the Company
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SECTION 23(A)(2)(F)(II), cont.
and the Association to amend the Plan or
are required by law, as set forth in
Exhibit Q-1 of the Settlement Agreement;
and
b. Two amendments that relate to annuity
purchases and that effectuate assumption
of the Plan by the Icahn Sponsor with the
Company retaining benefits administration
functions in accordance with the
Settlement Agreement, as set forth in
Exhibit Q-2 of the Settlement Agreement.
As soon as practicable after the Closing Date,
the Company shall execute, the Icahn Sponsor and
the Association shall approve, and the PBGC
shall not object to final versions of two (2)
amendments to the Plan listed in Exhibit Q-3
(i.e. amendment to conform Plan to the Tax
Reform Act of 1986 and amendment to the Plan to
determine the Directed Account Plan offset to be
applied in determining disability benefits
payable under the Plan) that the Company and the
Association agree are necessary to effectuate
existing collective bargaining agreements, to
comply with applicable law, or that the parties
otherwise agree were intended to be effective
before January 1, 1993. After the Closing Date,
additional amendments are permitted as provided
below.
(iii) To the extent permitted by applicable law and
not inconsistent with the transactions
contemplated by the Settlement Documents, the
Plan will be amended to provide that any
Participant who is employed by a purchaser or
other Successor, as a result of a transaction
involving the sale of any of the Company's
assets, shall have a right to elect to take an
unsubsidized monthly early retirement benefit.
The actuarial present value of the unsubsidized
early retirement benefit which may be elected by
such Participant shall be equal to the actuarial
present value of such Participant's benefits at
normal retirement age (using Plan assumptions
regarding interest rate and mortality as stated
in Hewitt Associates' January 1, 1992 actuarial
report on Plan funding).
(iv) After the Closing Date, the Plan may be amended
only by the Icahn Sponsor and only (A) if
required by applicable law or to maintain tax-
qualified status, or (B) to provide for payment
of unsubsidized lump sum benefits to
Participants when such amendment is requested by
the Company and consistent with applicable law
and the Plan's cash flow needs, or (C) to
provide for the payment of unsubsidized lump sum
benefits to Participants, consistent with the
provisions of the Settlement Agreement, or (D)
with the express written consent of the Company
152
<PAGE>
<PAGE>
SECTION 23(A)(2)(F)(IV), cont.
and the PBGC prior to a Non-Standard Termination
of the Plan, to permit the purchase of insurance
company annuities to provide only benefits
guaranteed under Section 4022(a) of ERISA, or
(E) if explicitly permitted by the Settlement
Documents, or (F) if approved by the Association
and the Company, and not objected to by the
PBGC, in the case of any other amendments not
inconsistent with the purposes and provisions of
the Settlement Agreement. The Icahn Sponsor
shall give prompt notice to the Company, the
PBGC and the Association of Plan amendments
after the Closing Date.
(g) Purchase of Annuities. The entity that is the Plan
sponsor as of the date the Settlement Agreement is
fully executed shall on the first Business Day
thereafter cause the Plan to purchase insurance
company annuities for Participants whose retirement
from the Company became effective before October 29,
1992 and who terminated service with the Company
before October 29, 1992 (provided that the number of
retirements effective between September 18, 1992 and
October 29, 1992, including without limitation
retirements of Disability Participants under the next
sentence, shall not exceed 60 participants under the
Plan). In the event that the disability retirement
date of certain Participants ("Disability
Participants") is determined to have been effective
before October 29, 1992, the Plan sponsor at the time
that determination is made shall, as soon as
practicable after receiving notice of such
determination from the Association, cause the Plan to
transfer assets to an insurance company to purchase
insurance company annuities for Disability
Participants who terminated service with the Company
before October 29, 1992, subject, however, to the
limitations applicable under the preceding sentence
with respect to retirements effective between
September 18, 1992 and October 29, 1992.
(h) The Icahn Sponsor may merge the Plan with the other
defined benefit plan covering employees of the Company
upon the occurrence of certain Significant Events,
pursuant to Section 9 of the Settlement Agreement.
(i) The Icahn Sponsor may request that the Plan be
terminated by the PBGC in a Non-Standard Termination
upon the occurrence of a Significant Event, pursuant
to Section 10 and other provisions of the Settlement
Agreement. At any time after the date of termination
up to and including the tenth anniversary of the date
of termination, the Company may request the PBGC to
reinstate and restore to the Company the Plan
terminated in a Non-Standard Termination, pursuant to
Section 13 of the Settlement Agreement.
(j) The Icahn Sponsor shall have the right to terminate
the Plan in a Standard Termination, pursuant to
Section 11 of the Settlement Agreement. The Company
will promptly give the Association a copy of any
153
<PAGE>
<PAGE>
SECTION 23(A)(2)(J), cont.
notice the Company receives from or issues to Icahn or
any of the Icahn Entities and/or Icahn Sponsor with
respect to a termination of the Plan. In the event of
a Standard Termination of the Plan as described in
Section 4041(b) of ERISA, the selection of an insurer
to provide annuities to Participants shall only be
from among insurance companies which (whether or not
applicable law would permit a lower rating) are then
rated at least A or better by at least two (2) of the
following rating services: Moody's Investors Services,
Inc., Standard & Poor's Corporation and Duff and
Phelps; and whose selection in all events complies
with applicable law; provided that if there are not
five (5) insurance companies which are rated at least
A or better by two (2) such rating services, then the
selection of an insurer to provide annuities may be
made from the five (5) top rated insurance companies
so long as the selection is in accordance with the
fiduciary requirements of ERISA.
(3) Supplemental Agreement - Defined Contribution Plan. Pursuant
to Section 15 of the Settlement Agreement: The Company will
enter into an agreement after the Closing and prior to the
confirmation of a final Plan of Reorganization, which will
become effective on the Effective Date as part of its Plan
of Reorganization (the "Supplemental Agreement"), pursuant
to which it will establish or maintain non-abusive defined
contribution plans for the Company employees to which it
will make annual contributions at the end of calendar years
1993, 1994 and 1995 for such employees equal to two percent
(2%) of W-2 earnings in the aggregate. Four (4) separate
non-abusive defined contribution plans will be established,
one (1) for the members of each of the Association, IFFA and
IAM and the fourth (4th)for the Company's other union and
non-union employees as a group. The annual contribution will
be allocated to these four (4) defined contribution plans as
determined by the Unions and by TWA for non-union employees
as a group and need not be pro rata on the basis of W-2
earnings of each group. In any year in which interest on the
Company's debt securities is paid in full in cash, as
permitted in the Agreements in Principle with the Unions,
and provided no Deferral Note is then outstanding, the
Company's aggregate contribution for that year to such
defined contribution plans will be increased from 2% of W-2
wages to 2.67% of W-2 wages. The 2%, or if effective, the
2.67% contribution level will be increased to 3.3% of W-2
wages for calendar year 1996 and for each subsequent year of
the Unions' respective collective bargaining agreements
thereafter, unless and until the collective bargaining
agreements, or the pension provisions thereof, are
renegotiated and amended. Each Union shall determine the
allocation of benefits as to the Company employees
represented by such Union; provided that such allocation
complies with applicable laws and regulations.
(4) The Company shall make payments on the "Settlement Note(s)"
pertinent to the Plan as required by the Settlement
Agreement, and shall make the minimum funding payment due
with respect to the Plan on January 15, 1993.
154
<PAGE>
<PAGE>
SECTION 23(A)(5)
(5) The Plan shall be amended and restated effective as of
January 8, 1993 to reflect all amendments to the Plan
required by the Settlement Agreement.
(6) As the Company, the Association and the Icahn Sponsor were
unable to reach agreement as to the determination of the
benefits of certain Members of the A-Plan, the parties adopt
the following Letter of Agreement:
(a) Prior to March 31, 1993, the Icahn Sponsor will file a
request with the appropriate District Director of the
Internal Revenue Service (the "IRS") for a
determination that none of the amendments to the Plan
adopted through the date of filing of such request
adversely affect the continued qualification of the
Plan. The determination letter request will
specifically include a description of Section 6.4 of
the Plan as in effect prior to its amendment as of
January 1, 1990, and a description of the amendments
made to Section 6.4 of the Plan as of January 1, 1990
and as of the date the Plan is "frozen". The
determination letter request will state that, under
the amendments in question, a Member is entitled to a
minimum retirement benefit equal to 2.5% multiplied by
the Member's years of Continuous Service and highest
Earnings as of the date the Plan is frozen, but that
the Association contends that certain aspects of the
amendments violate section 411(d)(6) of the Code.
(b) The Icahn Sponsor shall provide the Association and
the Company with advance notice of the determination
letter request, and promptly provide thereafter a copy
of such request and all other materials submitted to
the IRS. In addition, each party shall promptly
provide to the others copies of all correspondence or
other documents submitted to the IRS or provided by
the IRS with respect to the determination letter
request. Notwithstanding the foregoing, both the Icahn
Sponsor and the Association may delete from any
correspondence or other document covered by this
Paragraph any confidential information unrelated to
Section 6.4 of the Plan.
(c) The Icahn Sponsor will not object to, and will, if
necessary to the grant thereof, support requests made
by the Association or the Company to file comments or
meet with the IRS in order to set forth or espouse its
position regarding Section 6.4 of the Plan. Each party
shall promptly notify the others of any such request
for conference with the IRS.
(d) Each party will bear its own fees and expenses in
connection with this matter.
(e) If the IRS should decline to make a determination with
respect to the request filed pursuant to paragraph
(a), the parties shall retain all their rights and
remedies to resolve this matter through all
appropriate avenues.
155
<PAGE>
<PAGE>
SECTION 23(A)(6)(F)
(f) The Plan shall be operated and administered in
accordance with the amendment to Section 6.4(B) of the
Plan executed by the Company on or about December 24,
1992 (assuming, for this purpose, that neither 6.10
nor any other provision of the Plan requires any
modification thereof); provided, however, if the IRS
makes a final determination that operation and
administration of the Plan in accordance with such
amendment will adversely affect the tax qualified
status of the Plan, the Plan shall be operated and
administered after such determination and until any
change, modification or reversal of such determination
(by reason of a court decision or otherwise) in a
manner that complies with the IRS' final
determination, and such retroactive corrections as
required by such final determination shall be made.
(g) This Letter of Agreement shall be filed with the
Bankruptcy Court for approval at the same time the
amendments to the Plan contemplated by the Settlement
Agreement are filed with the Bankruptcy Court for
approval. The amendment freezing the Plan is rescinded
if this Letter of Agreement is not executed by the
Icahn Sponsor on or before the Closing (as defined in
the Settlement Agreement).
(B) In the event there is any conflict, concerning any retirement,
trust or savings plan that covers airmen employed by TWA and
represented by ALPA, between this Agreement and the agreement
entitled "Agreement in Principle Between Trans World Airlines,
Inc. and the Air line Pilots in the Service of Trans World
Airlines, Inc. as Represented by the Air Line Pilots Association,
International," executed August 24, 1992 on behalf of the Air Line
Pilots Association, International, Trans World Airlines, Inc., and
the Official Unsecured Creditors' Committee of Trans World
Airlines, Inc. (the "Agreement in Principle"), the Agreement in
Principle shall govern; provided, however, that if there is any
such conflict between the Agreement in Principle and any agreement
between TWA and ALPA which is effective after the effective date
of the applicable provision of the Agreement in Principle, then
the later agreement shall govern.
(C) TWA PILOTS' DIRECTED ACCOUNT PLAN (the "DAP")
(1) The Directed Account Plan shall be established and
maintained by the Company as a plan "qualified" under
Section 401(a) of the Internal Revenue Code.
(2) The Company shall contribute to the Directed Account Plan
11% of each Participant's monthly compensation, plus a
supplemental 3.31072262% of each Participant's monthly
compensation pursuant to Section 23(A)(3) of this Collective
Bargaining Agreement. The Company's contributions shall be
paid to the DAP trustee on the first business day of each
month. If such contributions are not paid on the first
business day of the month, TWA shall pay interest at a
floating rate equal to prime + three percent (3%) per annum
from the date due until the date paid.
(3) The terms of the Directed Account Plan, as agreed upon by
the Company and the Association, are hereby incorporated by
156
<PAGE>
<PAGE>
SECTION 23(C)(3), cont.
reference and made a part of this Collective Bargaining
Agreement.
(4) The Company and the Association reserve the right, at any
time by joint agreement, to amend, in whole or in part, any
or all of the provisions of the Directed Account Plan.
(5) The Company and the Association, by joint agreement, may
terminate the Directed Account Plan.
(D) SECTION 401(K) PLAN FOR PILOTS
(1) The 401(k) Plan shall be established and maintained by the
Company as a plan "qualified" under Section 401(a) of the
Internal Revenue Code.
(2) A Participant in the 401(k) Plan may make salary deferral
contributions of up to eleven percent (11%) of his/her
compensation. Such contributions shall be transmitted by the
Company to the trustee on the first business day of the
month following the end of the calendar month in which such
contributions are withheld from the Participant's
paycheck(s).
(3) The terms of the 401(k) Plan, as agreed upon by the Company
and the Association, are hereby incorporated by reference
and made a part of this Collective Bargaining Agreement.
(4) The Company and the Association reserve the right, at any
time by joint agreement, to amend, in whole or in part, any
and all provisions of the 401(k) Plan.
(5) The Company and the Association, by joint agreement, may
terminate the 401(k) Plan at any time.
(E) EXCESS EMPLOYEE BENEFIT PLAN FOR PILOTS
(1) The Excess Employee Benefit Plan for Pilots, adopted
effective January 1, 1993, shall be maintained by the
Company for the purpose of permitting participants of the
TWA Pilots Directed Account Plan to receive contributions
under the Excess Employee Benefit Plan for Pilots equal to
amounts that would have been contributed under the Directed
Account Plan but for the limitations on contributions
imposed by Section 415 and/or Section 401(a)(17) of the
Internal Revenue Code of 1986, as amended.
(2) The terms of the Excess Employee Benefit Plan for Pilots, as
agreed upon by the Company and the Association, are hereby
incorporated by reference and made a part of this Collective
Bargaining Agreement.
(3) The Company and the Association reserve the right, at any
time by joint agreement, to amend, in whole or in part, any
and all provisions of the Excess Employee Benefit Plan for
Pilots.
(4) The Company and the Association, by joint agreement, may
terminate the Excess Employee Benefit Plan for Pilots at any
time.
157
<PAGE>
<PAGE>
SECTION 24
GROUP BENEFITS
Except as specifically amended hereunder, all provisions of Section 24
of the agreement dated September 1, 1994 and all provisions of the
following group benefits, shall remain in full force and effect:
(A) The Group Medical and Dental Benefit Plan administered by the
Company authorized third party administrator, as described in the
"A World of Benefits From TWA Universal Benefit Plan" Summary Plan
Description dated September, 1997, shall be amended as follows:
(1) The In-Network deductible under the Medical Plan shall be
$200 per family.
(2) Covered Expenses under the Medical Plan shall include in-
hospital expenses incurred for newborn children.
(3) Preventive Health Care Benefits
In-Network, after a $10 office visit co-payment, the Medical
Plan shall pay for routine exams, including Pap smears and
mammograms, not to exceed the following:
Six (6) visits, including immunizations, up to 1 year of
age;
Three (3) visits per calendar year, including immunizations,
from ages 1 to 2 years;
Two (2) visits per calendar year, including immunizations,
from ages 2 to 6 years;
One (1) visit per calendar year age 6 and older.
Out-of-Network, the Medical Plan shall pay fifty percent
(50%) of expenses for routine exams, including Pap smears
and mammograms, after the annual deductible has been
satisfied, not to exceed the above schedule.
(4) Home Health Care Benefits
In-Network, the Medical Plan shall pay ninety percent (90%)
of expenses for up to sixty (60) home health care visits per
calendar year, after $50 of the $200 deductible has been
satisfied. Out-of-Network, the Medical Plan shall pay
seventy percent (70%) of expenses for up to sixty (60) home
health care visits per calendar year, after the full
deductible has been satisfied.
(5) Hospice Care Benefits
The Medical Plan shall pay eighty percent (80%) of hospice
care expenses, incurred in a hospice care facility or at
home, after the $200 annual deductible has been satisfied,
up to a maximum benefit of $10,000 per individual.
(6) Dental Plan Benefits
The Group Dental Plan effective January 1, 1999 includes a
Preferred Provider Organization (PPO) which provides three
(3) levels of comprehensive benefits based upon whether the
service is obtained through the PPO network (In-Network),
outside the PPO network (Out-of-Network), or through a
158
<PAGE>
<PAGE>
Section 24(A)(6), cont.
voluntarily elected Dental Health Maintenance Organization
(DHMO). Employees who live in areas where no PPO network is
available are paid in accordance with the In-Network
benefits. In-Network shall be defined as at least two (2)
general practitioners within a ten (10) mile radius.
Features of the Group Dental Plan are as follows:
<TABLE>
<CAPTION>
IN-NETWORK (PPO)
--------------------------------------------------------------------------------------------------------------
DENTAL SERVICE BENEFITS PAYABLE DEDUCTIBLE MAXIMUM
-------------- ---------------- ---------- -------
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I 100% of network None $3000 per calendar
(Preventive) fees year per member
(Oral Exams) inclusive of Class
(X-rays) I, II, III
--------------------------------------------------------------------------------------------------------------
Class II 90% of network $100 per calendar $3000 per calendar
(Minor fees year per member year per member
Restorative) inclusive of Class inclusive of Class
(Periodontal) II and III I, II, III
(Fillings)
(Root Canals)
--------------------------------------------------------------------------------------------------------------
Class III 60% of network $100 per calendar $3000 per calendar
(Major fees year per member year per member
Restorative) inclusive of Class inclusive of Class
(Crowns) II and III I, II, III
(Bridges)
(Dentures)
--------------------------------------------------------------------------------------------------------------
Class IV 50% of network $100 per member $1500 per member for
(Orthodontics) fees for life life
--------------------------------------------------------------------------------------------------------------
<CAPTION>
OUT-OF-NETWORK (PPO)
--------------------------------------------------------------------------------------------------------------
DENTAL SERVICE BENEFITS PAYABLE DEDUCTIBLE MAXIMUM
-------------- ---------------- ---------- -------
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I 90% of None $3000 per calendar
(Preventive) reasonable and year per member
(Oral Exams) customary inclusive of Class
(X-rays) charges I, II, III
--------------------------------------------------------------------------------------------------------------
Class II 75% of $100 per calendar $3000 per calendar
(Minor reasonable and year per member year per member
Restorative) customary inclusive of inclusive of Class
(Periodontal) charges Class II I, II, III
(Fillings)
(Root Canals)
--------------------------------------------------------------------------------------------------------------
Class III 50% of $100 per calendar $3000 per calendar
(Major reasonable and year per member year per member
Restorative) customary inclusive of inclusive of Class
(Crowns) charges Class III I, II, III
(Bridges)
(Dentures)
--------------------------------------------------------------------------------------------------------------
Class IV 50% of $200 per member $1500 per member for
(Orthodontics) reasonable and for life life
customary
charges
--------------------------------------------------------------------------------------------------------------
159
<PAGE>
<PAGE>
Section 24(A)(6), cont.
<CAPTION>
DENTAL HMO
--------------------------------------------------------------------------------------------------------------
DENTAL SERVICE BENEFITS PAYABLE DEDUCTIBLE MAXIMUM
-------------- ---------------- ---------- -------
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I<F*> 100% of network fees None None
--------------------------------------------------------------------------------------------------------------
Class II<F*> 90% of network fees None None
--------------------------------------------------------------------------------------------------------------
Class III<F*> 80% of network fees None None
--------------------------------------------------------------------------------------------------------------
Class IV<F*> 60% of network fees None None
--------------------------------------------------------------------------------------------------------------
<FN>
<F*>Classes for DHMO same as for PPO
</TABLE>
(7) The "Reasonable and Customary" schedule applied by a Company
authorized third party administrator to covered non-negotiated
medical expenses and to covered dental expenses shall be based
on the ninety-fifth percentile (95%)of the current database.
(8) Acute Care Prescription Drug Program
There shall be no deductible.
(9) Medical Plan Prescription Drug Benefits
The Plan will cover prescription drug expenses for drugs
administered in a hospital facility. Such expenses shall be
paid in accordance with the in-network and out-of-network
Plan benefits applicable to hospital charges. Employees
living outside an INTEQ pharmacy area will be permitted, by
exception through Employee Benefits, to submit their drug
charges through the Medical Plan. Additionally, in the event
the employee must fill a prescription outside the INTEQ
pharmacy area, the employee by exception through Employee
Benefits will be permitted to submit their drug charges
through the Medical Plan. The Plan will pay eighty percent
(80%) of drug charges, after the two hundred dollar
($200.00) annual family deductible has been satisfied, for
such authorized prescriptions filled outside an INTEQ
pharmacy area.
(10) Chiropractic Care Benefits
Chiropractic benefits will be paid at eighty percent (80%)
of reasonable and customary, subject to no deductible,
limited to twenty (20) visits per member per year. These
visits are not subject to medical necessity.
(11) If a pilot on duty in a foreign country requires medical
attention and the Medical Plan is not accepted, the Company
shall guarantee payment for hospitalization and other major
medical expenditures covered under the Medical Plan. Upon
return to the United States, the cost of the treatment shall
be reimbursed to the Company and/or the employee in
accordance with the Medical Plan as if the accident or
illness had occurred in the United States. The Company shall
provide on the insurance card, on an attrition basis, an
internationally accessible telephone number available to
allow foreign medical providers access to such pre-payment
or coverage guarantee.
160
<PAGE>
<PAGE>
Section 24(A)(12)
(12) Retiree Group Medical/Dental/Prescription Drug Coverage
Effective on the signing of this Basic Agreement, any future
pilot and flight engineer retirees will be subject to all
negotiated changes affecting active pilots and flight
engineers.
(13) Retiree Group Medical Coverage
If a pilot/flight engineer retires (normal, early with 10 or
more years of service and a minimum age of fifty (50) years,
postponed, or disability), all medical and dental coverage
will be continued until he/she becomes eligible for Medicare
solely on the basis of age. His/her spouse's coverage will
also be continued until he or she becomes eligible for
Medicare solely on the basis of age. A pilot/flight engineer
who retires (normal, early with 10 or more years of service
and a minimum age of fifty (50) years, postponed, or
disability) will be eligible to purchase medical coverage
for him/herself and spouse under the Post-65 PPO Medical
Plan to supplement Medicare when they become eligible for
Medicare solely on the basis of age.
(14) Right of Reimbursement
If a loss or injury is sustained by an employee or a covered
family member and if such loss or injury is caused by the
act or omission of a third party, health care benefits
provided under the Plan will be paid only on the condition
that the employee or family member (or his/her legally
authorized representative if the Plan member is legally
incapable) shall agree in writing: To pay the insurer or
Plan Sponsor to the extent of such benefits provided, upon
collection of damages with respect to such Plan member
whether by action at law, settlement, or otherwise.
(B) The Group Insurance Benefits underwritten and/or administered by
Connecticut General Life Insurance Company:
- Group Term Life Insurance Policy Number 0223755-01-E
- Disability Income Insurance Policy Number 0223755-23-E
- Accidental Death and Dismemberment Insurance Policy 0223755-10-E
as described in the "TWA Group Benefits - Pilots & Flight
-------------------------------------
Engineers - Disability Income Insurance, Life Insurance, Retiree
----------------------------------------------------------------
Life Insurance and Accidental Death & Dismemberment Insurance"
--------------------------------------------------------------
booklet dated December 1989.
(1) In accordance with the Letter of Agreement between the
Company and the Association, dated July 12, 1991, the
Company provided Accidental Death and Dismemberment
Insurance (AD&D) outlined on pages sixteen (16) and
seventeen (17) of the TWA Group Benefits Booklet dated
December, 1989 shall be modified in order to provide special
coverage for losses resulting from war or acts of war
(declared or undeclared) while traveling on Company business
as follows:
(a) The Limitation regarding any loss resulting from "war
or any act of war" shall be deleted.
161
<PAGE>
<PAGE>
Section 24(B)(1)(b)
(b) The insurance will pay for losses covered in the AD&D
policy in those instances where death or dismemberment
results from events which are covered by, or which
would have been covered by, the "War Risk" insurance
policy in effect for TWA pilots on July 12, 1991.
(c) The AD&D payment under these circumstances is not
subject to the monetary limit for all losses as
outlined in the War Risk Policy.
(d) The following schedule shall be applicable:
Monthly Basic Earnings Principal Sum
---------------------- -------------
Less than $1,200 $120,000
$1,200 but less than $1,600 $135,000
$1,600 but less than $2,000 $145,000
$2,000 but less than $2,400 $150,000
$2,400 but less than $3,000 $160,000
$3,000 and over $170,000
The above schedule replaces, for losses as referenced
in paragraph (b) above, the existing schedule of
principal sums which remains in force for other losses
due to accident as prescribed by the AD&D Plan.
(2) An optional Survivor Income Benefit Plan funded by life
insurance shall be offered to all pilots. Such Survivor
Income Benefit Plan shall provide the same benefits as
provided under the Survivor Income Option under the
Retirement Plan for Pilots of TWA (the "A Plan") except that
such benefits shall not be limited by pre-1993 earnings.
(3) The Disability Income Insurance Benefit shall be equal to
forty percent (40%) of a pilot's Basic Earnings, up to a
maximum of $4500 per month. Such benefit shall not be
reduced by any benefits payable under a compulsory state
disability income plan to which a pilot is required to
contribute. All other provisions of the current Disability
Income Insurance Benefit Plan shall remain in effect.
(4) The Special Disability Income Insurance Benefit shall be
equal to forty percent (40%) of a pilot's Basic Earnings, up
to a maximum amount of $4000 per month. Such benefit shall
not be reduced by any benefits payable under a compulsory
state disability income plan to which a pilot is required to
contribute. All other provisions of the current Special
Disability Income Insurance Benefit Plan shall remain in
effect.
(C) Survivor Medical Benefits administered by a Company authorized
third party administrator as described in the "Survivor Medical
----------------
Group Insurance Plan for Survivors of Pilots and Flight Engineers"
-----------------------------------------------------------------
booklet, Effective April 1, 1982.
The dependent's premium cost for the benefits described in this
plan shall be $45.05 per month per covered person.
162
<PAGE>
<PAGE>
Section 24(D)
(D) Effective January 1, 1999, a new Post-65 PPO Medical Plan,
underwritten by a Company authorized Third Party Administrator
will be made available to TWA retirees. The current 65 Plus
enrollees will be given the option of converting to the new Post-
65 PPO Medical Plan or remaining under the old 65 Plus Plan. All
future retirees will only be eligible for the new Post-65 PPO
Medical Plan.
The Post-65 PPO Medical Plan premiums will be $45.05 per month per
covered person. Provisions of this Post-65 PPO Medical Plan are:
<TABLE>
------------------------------------------------------------------------------------------
Post-65 PPO Medical Plan
<CAPTION>
------------------------------------------------------------------------------------------
In-Network Out-of-Network
------------------------------------------------------------------------------------------
<S> <C> <C>
Annual Deductible $750 per individual $1,000 per individual
$1,500 per family $2,000 per family
------------------------------------------------------------------------------------------
Hospital Coverage 90% 80% after deductible
after deductible and $200 per
confinement
------------------------------------------------------------------------------------------
Coinsurance 90% 80%
Scheduled/Units after deductible after deductible
------------------------------------------------------------------------------------------
Out-of-Pocket Maximum $2,000 per individual $3,000 per individual
$4,000 per family $6,000 per family
------------------------------------------------------------------------------------------
Doctor Office 90% 80%
Visit after deductible after deductible
------------------------------------------------------------------------------------------
Prescription Brand 80% Brand 80%
Generic 90% Generic 90%
Mail Order $20 Mail Order $20
after deductible after deductible
------------------------------------------------------------------------------------------
<S> <C>
Plan Maximum $1,000,000 per insured
------------------------------------------------------------------------------------------
</TABLE>
(E) Pilot Additional Life Program
The existing Pilot VEBA Retiree Life Program and the Voluntary
Additional Life Insurance for Pilots will be replaced by a new
program described below. The key provisions are:
(1) Guaranteed issue upon portability when terminating or
retiring from TWA;
(2) Guaranteed issue up to $100,000 for new enrollees;
(3) Open enrollment period and guaranteed issue for all current
active employees up to their individual current coverage
level;
(4) Guaranteed rates for three years;
(5) Rates shall remain fixed upon portability at retirement; and
(6) Existing members of the Retiree VEBA will be a closed group,
keeping the existing rates and coverages.
163
<PAGE>
<PAGE>
Section 24(E), cont.
<TABLE>
Provisions of Pilot Additional Life Program
- - ----------------------------------------------------------------------------
<S> <C>
EMPLOYEE:
- - ----------------------------------------------------------------------------
BENEFIT FORMULA 1,2,3,4, or 5 times
Basic Annual Earnings
or Flat $150,000
- - ----------------------------------------------------------------------------
<S> <C> <C>
REDUCTION FORMULA Reduces to At Age
---------- ------
65% 70
50% 75
- - ----------------------------------------------------------------------------
<S> <C>
BENEFIT MAXIMUM $500,000
- - ----------------------------------------------------------------------------
BENEFIT MINIMUM $10,000
- - ----------------------------------------------------------------------------
GUARANTEE ISSUE LIMIT $100,000
- - ----------------------------------------------------------------------------
WAIVER OF PREMIUM Included
- - ----------------------------------------------------------------------------
PORTABILITY Included at Termination of
Employment or Retirement
- - ----------------------------------------------------------------------------
CONVERSION Included
- - ----------------------------------------------------------------------------
ACCELERATED BENEFIT 50% of Face Amount Up to
$250,000
============================================================================
DEPENDENT:
- - ----------------------------------------------------------------------------
SPOUSE BENEFIT $5,000 Increments Up to $500,000
- - ----------------------------------------------------------------------------
CHILDREN BENEFIT $2,000 Increments Up to $10,000
- - ----------------------------------------------------------------------------
GUARANTEE ISSUE LIMIT $25,000 for Spouse
- - ----------------------------------------------------------------------------
<CAPTION>
- - ---------------------------------------------------------------------------------------------
Employee Rates Spouse Rates
- - ---------------------------------------------------------------------------------------------
(Monthly Rate / $1000 of Covered Age Rate Age Rate
Payroll) --- ---- --- ----
Volume - #
<S> <C> <C> <C> <C>
< 30 0.08 < 30 0.06
30-34 0.11 30-34 0.08
35-39 0.16 35-39 0.08
40-44 0.22 40-44 0.14
45-49 0.35 45-49 0.37
50-54 0.57 50-54 0.65
55-59 0.92 55-59 1.00
60+ 2.10 60+ 1.50
Child 0.18
Rate
- - ---------------------------------------------------------------------------------------------
RATE GUARANTEE 3 Years
- - ---------------------------------------------------------------------------------------------
PARTICIPATION REQUIREMENTS 50 Lives or 15%
- - ---------------------------------------------------------------------------------------------
</TABLE>
(F) Miscellaneous Accident Insurance underwritten by the Zurich
Insurance Company policy number GTK050113, as described in the
164
<PAGE>
<PAGE>
Section 24(F), cont.
"TWA Benefits, Miscellaneous Accident Insurance Program" booklet,
--------------------------------------------------------
dated January 1, 1994.
(G) Voluntary Personal Accident Insurance underwritten by the Zurich
Insurance Company policy number GTK050112, as described in the
"TWA Benefits, Voluntary Personal Accident Insurance Program"
-------------------------------------------------------------
booklet, dated January 1, 1994.
The pilot's portion of the cost of this Plan shall be twenty-seven
cents ($0.27) per $10,000 per month for single coverage and
thirty-seven cents ($0.37) per $10,000 per month for family
coverage during 1998. Future premiums will be determined by Plan
experience.
The coverage exclusion for any loss caused by, contributed to, or
resulting from war or act of war shall be eliminated.
(H) In the event a Pilot's group benefits claim is denied in whole or
in part by the insurance carrier, the pilot may, in accordance
with his/her rights under the Employee Retirement Income Security
Act of 1974 as amended (ERISA), submit a written request to the
Manager - TWA Employee Benefits for a review of his/her denied
claim. The Manager - TWA Employee Benefits or a designee will
perform a complete review of the claim and will advise the Pilot
of the findings within sixty (60) days after receiving the Pilot's
ERISA review request.
If the findings of the Manager - TWA Employee Benefits are not
satisfactory to the Pilot, the matter may be referred by the
Chairman of the MEC or his designee to the Pilots System Board of
Adjustment pursuant to Section 21 (C) of this Collective
Bargaining Agreement.
165
<PAGE>
<PAGE>
SECTION 25
AGENCY SHOP
(A) SERVICE CHARGE LIABILITY
Each regularly assigned pilot of the Company covered by this
Agreement shall be required, as a condition of employment,
beginning sixty (60) days after the effective date of this
Agreement or sixty (60) days after the completion of his
probationary period, whichever shall last occur (1) to be or
become a member of the Association, or (2) to pay to the
Association a monthly service charge equal to the Association's
regular monthly dues, initiation fee, and periodic assessments,
including MEC assessments, which would be required to be paid by
such pilot if a member; provided that neither membership nor the
payment of a service charge shall be required in respect to any
such pilot (a) for whom membership is not available upon the same
terms and conditions generally applicable to any other member, or
(b) as to whom membership was denied or terminated for any reason
other than failure to tender periodic dues, initiation fees and
assessments uniformly required by the Association or the TWA MEC
as a condition of acquiring or retaining membership. The
Association shall treat members and non members alike in
calculating the amounts due, in establishing the due date of
payments and in determining whether a pilot's account is
delinquent. For the purposes of this Section 25, a regularly
assigned pilot of the Company shall include a Training Pilot
regularly assigned to a domicile but shall not mean pilots
assigned to a Management Position.
(B) DELINQUENCY
If a pilot of the Company who is required by the provisions of
paragraph (A) above to pay the service charge therein specified
becomes at least sixty (60) days delinquent in the payment or
tender of such service charge, the Vice President-
Finance/Treasurer of the Association or the person designated by
him or her (herein "Vice President-Finance") shall notify such
pilot by certified mail, return receipt requested, copy to the
Vice President-Labor Relations of the Company or his/her successor
or designee, that he/she is delinquent in the payment of such
service charge and is subject to discharge as an employee of the
Company. Such notice shall also inform the pilot that he/she must
remit or tender the required payment to the Vice President-Finance
within a period of fifteen (15) days after receipt by him/her of
the notice herein referred to or be discharged. The notice of
delinquency required under this paragraph shall be deemed to be
received by the pilot ("the 25(B) receipt"), whether or not it is
personally received by him, when mailed by the Vice President-
Finance by certified mail, return receipt request, to the pilot's
last known address or to any other address that has been
designated by the pilot. It shall be the duty of every pilot
covered by this Agreement to notify the Association's Membership
Services Department of every change in his home address, or of an
address where the notice required by this paragraph can be sent
and received by the pilot, if the pilot's home address is at any
time unacceptable for this purpose.
(C) CERTIFICATION OF DELINQUENCY
If, upon the expiration of the fifteen (15) day period after the
25(B) receipt, the pilot remains delinquent by reason of failure
to pay or tender the required sum, the Vice President-Finance
shall certify in writing to the Vice President-Labor Relations of
166
<PAGE>
<PAGE>
SECTION 25(C), cont.
the Company or his/her successor or designee, copy to the pilot,
both by certified mail, return receipt requested, that the pilot
has failed to make or tender payment within the allowed period and
is therefore to be discharged. The Vice President-Labor Relations
of the Company or his/her successor or designee, shall thereupon
take proper steps to discharge such pilot from the service of the
Company. Termination shall be effective twenty-one (21) days after
receipt by the Company of the notice provided for herein.
(D) PROTEST PROCEDURE
A protest by a pilot whose discharge is requested by the
Association as a result of an interpretation or application of
Section 25 shall be limited to the following procedure and the
provisions of Sections 21 and 22 of this Agreement shall not
apply:
(1) A pilot who believes that the provisions of Section 25 have
not been properly interpreted or applied, as they pertain to
him/her, may submit his/her request for review in writing
within five (5) days from the date of receipt of notice by
him/her in the form of his/her copy of notice to the Company
with respect to him/her as provided in Paragraph (C). Such
request must be submitted to the Vice President-Labor
Relations of the Company or his/her successor or designee
who will review the protest and render a decision in writing
with respect thereto no later than five (5) days following
the receipt of the request of review.
(2) The Vice President-Labor Relations of the Company or his/her
successor or designee, shall forward his/her decision to the
pilot with a copy to the official of the Association who
shall promptly be designated in writing by the Association
for this purpose. Said decision shall be final and binding
on all interested parties unless appealed as hereinafter
provided. If the decision is not satisfactory to either the
pilot or the Vice President-Finance, either may appeal the
decision by filing a notice of appeal. Such notice shall be
sent to the Company, to the other party and to the National
Mediation Board within ten (10) days of the receipt of the
decision and must contain a request for the National
Mediation Board to provide a list of five (5) neutral
referees. A neutral referee may be agreed upon by the pilot
and the Association within ten (10) days after receipt of
the list of neutral referees.
If the parties cannot agree on a neutral referee, a referee
will be chosen from the panel supplied by the National
Mediation Board. The alternate strike method shall be used
to select a neutral referee with the pilot initiating the
first rejection. Such final selection of a neutral referee
shall be accomplished within ten (10) days after receipt of
the list of neutral referees. If the parties have not
reached agreement by the alternate strike method within the
aforementioned ten (10) day period, the period, the first
name listed on the five (5) name panel provided by the
National Mediation Board shall be designated the neutral
referee.
(3) The decision of the neutral referee shall be requested
within thirty (30) days after the hearing of the appeal
167
<PAGE>
<PAGE>
SECTION 25(D)(3), cont.
unless otherwise agreed by the pilot and the Association and shall
be final and binding on all parties to the dispute. The fees,
charges and other reasonable expenses of such neutral referee
shall be borne equally by the pilot and the Association.
(E) STATUS PENDING APPEAL
During the period in which a protest is being handled under the
provisions of Section 25 and until final decision by the Vice
President-Labor Relations, or his/her successor or designee, or
neutral referee, the pilot shall not be discharged from the
Company or lose any seniority or other rights under the Agreement
solely for the reason of non-compliance with the terms and
provisions of Section 25, provided, however, that the Company
shall not be required to award the pilot a category bid which
requires any training.
(F) DISCHARGE
A pilot discharged by the Company under the provisions of this
Section shall be deemed to have been "discharged for cause" within
the meaning of the terms and provisions of this Section and the
provisions of Sections 21 and 22 of this Agreement shall not
apply.
(G) INDEMNIFICATION
The Association agrees that it shall indemnify the Company and
save the Company harmless from any and all claims, awards or
judgments (including court costs) awarded to an employee or
employees against the Company by virtue of the misinterpretation
or misapplication of any of the terms of Section 25.
(H) DISCHARGE DELAY
Other provisions of Section 25 to the contrary notwithstanding,
the Company shall not be required to terminate the employment of
any pilot until such time as the services of a qualified
replacement are available, provided that in the judgment of the
Company such replacement is currently required for the orderly
continuation of the Company's operation. The determination of
whether a qualified replacement is available shall be the
exclusive responsibility of the Company. The Company may not,
however, retain any pilot in the service under the provisions of
this paragraph for a period of more than four (4) months from the
date of the final decision in the case.
168
<PAGE>
<PAGE>
SECTION 26
VOLUNTARY DUES/SERVICE CHARGE DEDUCTION
(A) The Company shall deduct from the monthly pay of each pilot
employee whose name appears on the TWA Pilots' System Seniority
List and remit to the Air Line Pilots Association membership dues
uniformly levied (not including initiation fees, fines, penalties
or assessments) in accordance with the Constitution and Bylaws of
the Association and as prescribed by the Railway Labor Act, as
amended, a monthly amount equal to the Association's regular and
usual monthly dues, which monthly amount would be required to be
paid by such pilot if a member, provided such pilot voluntarily
executes the agreed-upon form, known as the "Dues Deduction" or
"Dues Check Off" form, which shall be prepared and furnished by
the Air Line Pilots Association, International.
(B) All Dues Deduction or Dues Check Off forms will be submitted
through the VICE PRESIDENT -FINANCE/TREASURER of the AIR LINE
PILOTS ASSOCIATION to "ALPA Membership Services" or the person
designated by him or her (herein "Vice President - Finance") who
will forward the original signed copy to the Manager - Payroll of
the Company, care of Trans World Airlines, Inc., Kansas City
Administrative Center, Kansas City, Missouri 64513.
A properly executed Dues Deduction or Dues Check Off form, filed
with Manager - Payroll before the 15th day of any month will
become effective the 1st of the month following its receipt.
Illegible or improperly executed forms will be returned to the
said Vice President - Finance of the Air Line Pilots Association.
(C) Any notice of revocation as set forth in the Dues Deduction or
Dues Check Off form must be in writing, signed by the pilot, and
delivered by registered mail, addressed to the Manager - Payroll
of the Company, with copy to the Vice President - Finance of the
Air Line Pilots Association. Dues Deduction or Dues Check Off
forms and notices so received by the Company will constitute
notice of the Company on the date received and not when mailed.
(D) The Company will remit to the Air Line Pilots Association a check
in payment of all dues collected each month after the payday on
which deduction was made. These remittances will be subject to
normal accounting practice with respect to adjustments necessary
because of the methods involved in the deduction procedure. The
Company remittance of Association membership due to the
Association will be accompanied by a list of names, payroll
register number, station numbers and amount of deductions of the
pilots for whom deductions have been made in that particular
month, arranged in order of their payroll register numbers.
(E) A pilot who has executed a Dues Deduction or Dues Check Off form
and who resigns or is otherwise terminated from the employ of the
Company shall be deemed to have automatically revoked his/her
assignment and if he/she is recalled or reemployed, further
deductions of Association dues will be made only upon execution
and receipt of a new Dues Deduction or Dues Check Off form.
(F) Except as provided in paragraph (H) below, collection of any back
dues owed at the time of starting deductions for any pilot, and
collection of dues missed because the pilot's earnings were not
sufficient to cover the payment of dues in the specific pay
period, and collection of dues missed because of accidental errors
in the accounting procedures will be the responsibility of the
169
<PAGE>
<PAGE>
SECTION 26(F), cont.
Association and will not be subject to payroll deductions, and the
Company shall not be responsible in any way because of such missed
collections.
(G) Deductions of membership dues shall be made from the 25th of the
month paycheck on the basis of one and ninety-five one hundredths
percent (1.95%) of gross earnings, provided there is a balance in
such paycheck sufficient to cover the amount after all other
deductions authorized by the employee relating to health benefits
or pension benefits or required by law have been satisfied. In the
event of termination of employment, the obligation of the Company
to collect dues shall not extend beyond the month in which the
pilot's last day of work occurs.
(H) For pilots who have executed the Dues Deduction or Dues Check Off
form and effective January 1, 2000, the Company will implement an
audit system that will provide for the collection of any dues owed
subsequent to such execution which cannot be deducted in
accordance with paragraph (G) above due to insufficient funds.
(I) In cases where a deduction is made which duplicates a payment
already made to the Association by a pilot, and where a deduction
is not in conformity with the provisions of the Association
Constitution and Bylaws, refunds to the pilot will be made by the
Association.
(J) Trans World Airlines, shall not be held liable for any claims
which may be made by the pilots by virtue of the wrongful (other
than willful) application or misapplication of any of the terms
herein.
(K) The term "dues" as it is employed in this Section will be deemed
to include service charges assessed in lieu of dues.
170
<PAGE>
<PAGE>
SECTION 27
INTERNMENT, PRISONER
MISSING OR HOSTAGE BENEFITS
(A) Any pilot who, in the course of his/her duties for the Company, is
held hostage, is interned, is held captive, or is missing as a
result of hostile action by any person, group of persons, or
foreign government, shall receive compensation equal to his/her
average pay hours earned for the twelve (12) month period
immediately preceding said action or the pilot's monthly bid award
ALV, whichever is greater, each month subject to the following:
(1) Compensation paid under this paragraph shall begin at
termination of the period described in Section 11(B)(5) and
shall be prorated when less than a full month is involved.
(2) Compensation paid under this paragraph shall be in lieu of
all pay, salary, foreign service allowance, or expense
allowance which might otherwise be payable to the pilot.
(3) Pilots who have not completed one (1) year of service with
the Company as a pilot will receive only their annual salary
prorated.
(4) Payments made pursuant to this Section 27 shall continue
until death is established or until the pilot has been
missing for twenty-four (24) months and the Company has
issued a Certificate stating that such pilot is presumed to
be dead.
The pilot shall maintain and continue to accrue seniority
and longevity during any such period and shall be considered
in the service of the Company in fixing his/her rate of
compensation.
(B) The monthly compensation allowable under this Section shall be:
(1) Credited to the pilot on the books of the Company, and
thereafter held for his/her account without interest; or
(2) Disbursed by the Company to the person or persons designated
by the pilot for that purpose, if the pilot has so requested
the Company in substantially the form prescribed by the
Company for that purpose.
(C) Any amounts credited to the account of a pilot, or paid to a
beneficiary in accordance with the provisions of paragraph (B) of
this Section, shall not be required to be returned by such
beneficiary or the estate of the pilot even though it shall be
established that such payments were made after the death of the
pilot, nor shall such amounts be a charge against the estate of
the pilot; provided that any such beneficiary shall have furnished
the Company with any evidence indicating the death of such pilot
promptly after its receipt.
171
<PAGE>
<PAGE>
SECTION 28
CHARTER FLIGHTS
(A) GENERAL
(1) Charter pairings shall be awarded in accordance with Section 9.
(2) The Company may offer any charter pairing to a pilot who is
specifically requested by the charter purchaser.
(a) The requested pilot shall have the option to accept or
decline the pairing.
(b) If a pilot other than the requested pilot is removed
from a charter pairing as a result of the application
of paragraph 2 above, he/she shall be pay assigned for
such pairing.
(B) CHARTER WORK RULES/PAY AND CREDIT
The following provisions shall be in effect for pure charter
pairings.
(1) A pilot assigned to a charter flight shall be paid and
credited as set forth in Section 11(B).
(2) A charter flight duty period inclusive of any deadhead
positioning segments may be scheduled for fifteen hours
(15:00) for Domestic and International Operations unless a
longer scheduled on-duty period is provided for in Section 11.
(3) A pilot who deadheads in connection with any charter
operation shall be subject to the provisions of Section 8.
(C) "EXTENDED CHARTER" OR "SPECIAL INTEREST" FLIGHTS
(1) An "Extended Charter" or "Special Interest" flight is a
flight chartered by a single chartering agency or interest,
the length and/or nature of which requires or would deem
desirable the continuous assignment of the same pilot and/or
pilots for a total period scheduled to be away from the
domicile in excess of the applicable category monthly bid
award ALV multiplied by four hours (4:00) (ALV x 4 hrs.).
Awarding of such flights shall be handled according to (A)
above.
(2) A pilot assigned to such flight as outlined in (C)(1) above
shall be paid and credited in accordance with Section 11(B).
Such pay and credit generated in excess of his/her monthly
bid award ALV shall be paid in the month earned.
(3) A pilot assigned to an "Extended Charter" or "Special
Interest" flight for a continuous period in excess of thirty
(30) days may, after thirty (30) days, request relief from
such assignment from the Regional Chief Pilot and such
relief will be granted providing notice of at least seventy-
two hours (72:00) is given prior to traversing a TWA
station.
(4) The provisions of (A)(2) shall apply to an "Extended
Charter" or "Special Interest" flight(s).
172
<PAGE>
<PAGE>
SECTION 29
AGREEMENT PRECEDENCE
This Agreement and the attached Letters shall supersede and take
precedence over all Agreements, Supplemental Agreements, Amendments,
Letters of Understanding, Arbitration Awards, and similar related
documents executed between the Company and the Association prior to the
signing of this Agreement, provided that all rights and obligations,
monetary or otherwise, contained therein and which may have accrued
prior to the effective date of this Agreement under said Agreements,
Supplemental Agreements, Amendments, Letters of Understanding,
Arbitration Awards, and similar related documents, for the pilots of the
Company shall remain in effect until satisfied or discharged in
accordance with the terms thereof.
173
<PAGE>
<PAGE>
SECTION 30
EFFECTIVE DATES AND DURATION
Unless otherwise stated in this Agreement, the provisions of this
Agreement shall become effective on September 1, 1998 and the entire
Agreement shall remain in full force and effect through October 1, 2002,
and shall renew itself without change for yearly periods thereafter,
unless written notice of change is served in accordance with Section 6,
Title 1 of the Railway Labor Act, as amended, by either party hereto not
sooner than sixty (60) days but not later than thirty (30) days prior to
October 1, 2002, or, a subsequent anniversary of such date, unless the
parties mutually agree otherwise.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement this
1st day of September, 1998.
TRANS WORLD AIRLINES, INC. AIR LINE PILOTS
ASSOCIATION INTERNATIONAL
/s/ /s/
- - ------------------------------- ----------------------------------
Thomas C. Irwin Joseph A. Chronic
Vice President Chairman, TWA MEC
Flight Operations
/s/
----------------------------------
J. Randolph Babbitt
President
WITNESSES: WITNESSES:
/s/ /s/
- - ------------------------------- ----------------------------------
Terry L. Hayes Douglas J. Gabel
Director Labor Relations Chairman
TWA MEC Negotiating Committee
/s/ /s/
- - ------------------------------- ----------------------------------
D. Annett F. A. Mooney
/s/ /s/
- - ------------------------------- ----------------------------------
H. Hamann G. J. Flor
/s/ /s/
- - ------------------------------- ----------------------------------
B. Miller S. E. Beatty
/s/ /s/
- - ------------------------------- ----------------------------------
J. Murray D. C. Holtzman
/s/
- - -------------------------------
J. Perez
/s/
- - -------------------------------
J. Gibbs
174
<PAGE>
<PAGE>
SECTION 31
DEFINITIONS
As used in this Agreement, except as otherwise provided:
(A) "Active Pay Status" means whenever a pilot is receiving
compensation under any sections of this Agreement, except Section 27.
(B) "Additional Flying" means trips assigned through the Trip Add
System and the Volunteer Fly List.
(C) "Average Line Value" (ALV) means the total credit of all awarded
bid runs, excluding supplemental bid runs, by category divided by
the number of bid runs, excluding supplemental bid runs, by
category. For the purposes of this paragraph, "total credit"
includes additional flying and OFR trip credit extending from the
previous month into the bid month.
(D) "Basic Agreement", "Collective Bargaining Agreement" (CBA) and
"Working Agreement" mean this TWA-ALPA Agreement.
(E) "Bid month" or "month" shall mean the following inclusive periods:
<TABLE>
<S> <C> <C>
January 30 days January 1-30
February 30 days January 31-March 1
(Leap year 31 days)
March 30 days March 2-31
April 30 days April 1-30
May 31 days May 1-31
June 30 days June 1-30
July 31 days July 1-31
August 31 days August 1-31
September 30 days September 1-30
October 30 days October 1-30
November 31 days October 31-November 30
December 31 days December 1-31
</TABLE>
(F) "Bid Run Pilot" means a pilot who is awarded a scheduled sequence
of trips for a monthly bid period.
(G) "Block-to-Block" time shall mean that period of time beginning
when an aircraft first moves from the ramp blocks, for the purpose
of flight, and ending when the aircraft comes to a stop at the
ramp blocks at the next point of landing.
(H) "Calendar Month", consistent with FAR limitations, shall mean the
following inclusive periods:
<TABLE>
<S> <C> <C>
January 31 day January 1-31
February 28 days February 1-28
(Leap year 29 days)
March 31 days March 1-31
April 30 days April 1-30
May 31 days May 1-31
175
<PAGE>
<PAGE>
Section 31(H), cont.
<S> <C> <C>
June 30 days June 1-30
July 31 days July 1-31
August 31 days August 1-31
September 30 days September 1-30
October 31 days October 1-31
November 30 days November 1-30
December 31 days December 1-31
</TABLE>
(I) "Captain" means the pilot who holds a bid as a Captain and is in
command of an aircraft at anytime he/she is aboard such aircraft
for the purpose of commanding a flight, and who is responsible for
all phases of the operation of such aircraft including but not
limited to the safety of the passengers, crew members, cargo and
airplane. All air carrier personnel assigned to a flight are under
the direct control and authority of the Captain and responsible to
him/her. The Captain shall be properly qualified to command such
aircraft and hold a currently effective airman's certificate which
authorizes him/her to serve as a pilot in command. Any
disagreement relating to the foregoing will be handled after the
completion of the flight through the appropriate authority.
(J) "Category" means a domicile, equipment type and status (e.g., STL
MD8 Captain).
(K) "Category Award" and "Category Bid Award" mean the assignment of a
pilot to fill a category vacancy pursuant to Section 19 (e.g. STL
MD8 Captain).
(L) "Domestic operations" means all duty, flying and deadheading
within the contiguous forty-eight (48) states of the United
States, Washington, DC., Alaska and Canada.
(M) "Draft" means the assignment to an open flight of the most junior
pilot in the category who is legal, qualified and available, in
accordance with Scheduling Policy. A pilot who is drafted shall
receive premium pay as set forth in Section 5(K) of this
Agreement.
(N) "Duty Aloft" means the entire period during which a pilot is
assigned as an operating crew member of an airplane crew during
block-to-block time.
(O) "Equalization" means when two (2) or more pilots are requesting
additional flying for the same day, the pilot with the least
amount of additional flying pay hours in the current month and
immediately preceding two (2) bid months will be given priority
for the assignment. If the pilots requesting additional flying
have an equal amount of additional flying, the senior pilot will
be given priority for the assignment.
(P) "First Officer" means a pilot who is second in command on a
flight, or third or fourth in command when designated so by the
Captain on three (3) or four (4) pilot B757/767 international
operations, respectively, whose duties are to assist or relieve
the Captain in the manipulation of the controls and in the
navigation of the aircraft while under way, including take-off and
landing of such aircraft; who is properly qualified to serve as
and holds a currently effective airman's certificate authorizing
176
<PAGE>
<PAGE>
Section 31(P), cont.
him/her to serve as a First Officer; and who holds a bid as a
First Officer or is a Reserve Officer with First Officer
qualifications. For the Company's international operations, on
turbo-jet aircraft only, a First Officer's qualifications shall
include an Airline Transport Pilot certificate and rating on the
type turbo-jet aircraft in which he/she serves as First Officer
except that the rated First Officer requirement shall not apply
when operating aircraft with a maximum gross take-off weight of
200,000 pounds or less on international flights operating to and
from domestic cities and cities in Mexico, the Caribbean and
Central America.
(Q) "Fixed Daily Rate" means the number of hours of pay and credit
fixed at a value of two hours thirty minutes (2:30) (i.e. 75
Hr./30 Days). For bid run construction purposes, all activities
whose credit depends on a daily rate shall be valued using the
FDR.
(R) "Flight Engineer" means an employee who is the occupant of the
third seat on three-pilot turbo-jet crews, who is responsible
while in flight or enroute for the safe and efficient mechanical,
electrical and electronic functioning and the air-worthy condition
of the aircraft, irrespective of the means of propulsion, and its
components (including recognition and correction of their
malfunctioning) and for manipulation of its engineering controls
and all related ground and flight duties as assigned and who is
properly qualified to serve as such and holds such valid and
currently effective certificates as are required by applicable
Federal regulations and a currently effective commercial license
and instrument rating. In addition, Flight Engineer refers to an
employee who has been awarded a bid to fill a domicile vacancy or
a Reserve Officer with Flight Engineer qualifications.
(S) "Guarantee" means:
For pilots who have completed one (1) year of service with the
Company as a flight deck crew member:
<TABLE>
<CAPTION>
Effective: Bid Run Holder Reserve Schedule Holder
---------- -------------- Reserve Officer
---------------
<S> <C> <C>
September 1, 1998 72 hours ALV minus 3 hours,
not less than 72 hours
September 1, 1999 73 hours ALV minus 3 hours,
not less than 73 hours
September 1, 2000 74 hours ALV minus 3 hours,
not less than 74 hours
September 1, 2001 and thereafter 75 hours ALV minus 3 hours,
not less than 75 hours
</TABLE>
The guarantee for a pilot with less than one (1) year of service
as a flight deck crew member shall be seventy-five hours (75:00).
(T) "International operations" means all duty, flying and deadheading
not specifically defined as domestic operations.
(U) "Mile" means a statute mile of 5,280 feet.
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Section 31(V)
(V) "Mock Bid" means a bid awarded in the pilot's current category in
accordance with his/her seniority and used solely for the purposes
of determining the pilot's job (bid/reserve) and operational
indicator (domestic/international).
(W) "Monthly Flying Time" means the sum of total daily flying time in
each category multiplied by the number of days in the calendar
month and from the resulting figure shall be subtracted the total
inoperative time of those flights that do not operate each day of
the month. To this resulting figure will be added all time
scheduled to be credited under the provisions of Section 11 of the
current collective bargaining agreement (i.e. flight time credit
under Section 11(B), flight pay assignment, vacation time, sick
pay, training credit, deadhead credit, call out pay, equipment
substitution protection credit, jury duty credit), charter and
ferry flights.
(X) "Narrowbody" means all models of the following equipment types:
A319, A320, B737, MD8, DC9, B727 and any aircraft type with a
maximum gross weight of 176,000 pounds or less.
(Y) "Offering A Trip" or "OFR" shall mean a mechanism for bid run
pilots to offer trips into open time in accordance with Section 9.
Until the offered trip is selected by another pilot or Crew
Schedule, the offering pilot will remain responsible for the trip.
(Z) "Permanent Transfer" means any transfer or combination of
transfers in excess of ninety (90) days in any one (1) period of
assignment.
(AA) "Pilot" means Captain, First Officer, Flight Engineer, and Reserve
Officer, as herein defined.
(BB) "Rescheduled" as used in Section 11 of this Agreement means a
change in flight assignment after a pilot has reported for duty at
his domicile, layover station, or crew change station.
(CC) "Reserve Officer" means a pilot with First Officer or Flight
Engineer qualifications, who is assigned to serve as a First
Officer or Flight Engineer, but who has not been awarded a bid to
fill a domicile vacancy.
(DD) "Reserve Schedule" means a sequence of alternating periods of
availability for flight duty, and periods free from duty at a
pilot's domicile to which a pilot is assigned as the result of
his/her bid on such pilot's domicile bid preference sheet.
(EE) "Scheduled for Duty Aloft" means the assignment of a pilot on the
basis of the flight time established in the operations schedules,
rather than the actual flight time.
(FF) "Small Widebody" means all models of the following equipment
types: B757, B767, A321 and any aircraft type with a gross weight
greater than 176,000 pounds but less than 500,000 pounds.
(GG) "Status" means a bid status and shall be considered to be in
descending order as follows: Captain, First Officer, and Flight
Engineer.
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Section 31(HH)
(HH) "Target" means the amount of hours determined by dividing all
monthly flying time for the bid period for each category by the
number of bid run pilots available for the bid period by each
category. All bid runs shall be constructed within a range of TGT
of at least plus or minus (+/-) four hours (4:00) and no more than
plus or minus (+/-) five hours (5:00), provided further that the
minimum bid run shall be seventy-two hours (72:00) and the maximum
bid run shall be eighty-five hours (85:00). This definition is
subject to the Exception of Section 10(B)(7)(b).
(II) "Trip Add System" or "TAS" means a structured mechanism for pilots
to add flights to their schedules in accordance with equalization
and the provisions of Section 9.
(JJ) "Vacancy" means a requirement for a pilot in a category.
(KK) "Volunteer Fly List" means a list maintained by the Company of
pilots who notify the Company that they are available to fly on
days they are not otherwise scheduled to fly, in accordance with
the applicable provisions of Section 9.
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<PAGE>
LETTER I
LETTER OF AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN THE SERVICE OF
TRANS WORLD AIRLINES, INC.
AS REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., it successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TRANS WORLD AIRLINES, INC. as represented by the AIR LINE
PILOTS ASSOCIATION, INTERNATIONAL (hereinafter known as the
"Association" or "ALPA").
SECTION 1
It is mutually agreed and understood by and between the parties to this
Letter of Agreement that the provisions hereof shall be applicable only
to the Company's Civil Reserve Air Fleet Operation (CRAF). It is further
agreed and understood that all Sections of the Basic TWA/ALPA Agreement,
as hereinafter defined, except those Sections which are specifically
modified or excepted by this Letter of Agreement shall be applicable to
the Company's "CRAF Operation".
SECTION 2
DEFINITIONS
(A) The word "Agreement" when used in this Letter of Agreement means
the Agreement between Trans World Airlines, Inc., and the Air Line
Pilots in the service of Trans World Airlines, Inc., as
represented by the Air Line Pilots Association, International,
signed July 20, 1977.
(B) The term "CRAF Operation" for the purposes of this Letter of
Agreement means all flight operations conducted in accordance with
the agreement between Trans World Airlines, Inc., and the
Department of Defense covering such operation but shall not
include the Company's certificated service or commercial charter
service or any other Government operation.
SECTION 3
COMPENSATION
Rates of compensation on the Company's "CRAF Operation" shall be those
specified in the Agreement for pilots based on International Operations,
provided that a pilot assigned to such operation shall receive, as a
minimum guarantee, monthly compensation equal to his average earnings
during the two calendar months preceding such month of assignment.
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LETTER I, cont.
SECTION 4
EXPENSES
A pilot assigned to the Company's "CRAF Operation" shall receive trip
and moving expenses in accordance with the Agreement.
SECTION 5
FILLING OF VACANCIES
(A) In anticipation of the emergency nature of the "CRAF Operation",
the Company shall keep on file a currently effective CRAF standing
Preference List. The Company shall advertise such Preference List
by appropriate pilot bulletin at least once each year. A pilot may
submit or withdraw a bid for assignment to the "CRAF Operation" at
any time by sending a telegram/fax to the Staff Vice-President -
Flying; or by maintaining his/her current preferences in the
appropriate section of the electronic Standing Bid Form. When
submitting such a bid a pilot shall specify whether he/she is
bidding for a captain, first officer, or flight engineer vacancy.
The Company will publish a copy of such Preference List each
calendar year for posting at all domiciles, it being understood
that such copies cannot always be completely current.
(B) In the event of implementation of the Company's "CRAF Operation"
during the first sixty (60) days of such operation, vacancies
shall be filled in the following order:
(1) Assignment by status of pilots who have bids on file in
accordance with (A) above as of midnight of the day
preceding official announcement of the implementation of the
Company's "CRAF Operation". To the extent the requirements
of the operation will permit, such assignments shall be made
in order of seniority.
(2) In the event existing CRAF vacancies are not filled in
accordance with (1) above, the Company may assign pilots,
but bid status, in inverse order of seniority to the extent
the requirements of the operation will permit.
(3) In the event the Company is unable to fill CRAF vacancies
with qualified pilots under (1) or (2) above, assignment
will then be made from the standing Preference List in order
of seniority to the extent the requirements of the operation
will permit.
(4) If CRAF vacancies still exist after application of (1), (2),
and (3) above, pilots will then be assigned in inverse order
of seniority to the extent the requirements of the operation
will permit.
(C) Pilots assigned under (B) above will be considered as having been
assigned to temporary duty for the purposes of Section 4 above.
(D) The Company may exclude from assignment of pilots under (B)(1) and
(2) above any pilot who is not fully qualified for the operation.
(E) Not later than sixty (60) days after the implementation of the
Company's "CRAF Operation" all CRAF assignments shall be open for
bid in accordance with Section 19 of the Agreement. Following such
initial sixty (60) day period, pilots shall be assigned to and
displaced from the Company's "CRAF Operation" in accordance with
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LETTER I, cont.
the provisions of Section 19 of the Agreement to the extent the
requirement of such operation will permit.
(F) The parties to this Agreement recognize that some of the pilots in
the employ of TWA have obligations as reserves in the armed forces
of the United States and any assignments made to the Company's
"CRAF Operation" would be subject to such obligations.
SECTION 6
INSURANCE BENEFITS
A pilot assigned to the Company's "CRAF Operation" will be eligible for
continued participation in the applicable Company's Employees' Insurance
Program. In addition thereto a pilot so assigned shall be entitled to
insurance protection as set forth on page 10.72.06 of the Company's
Management Policy and Procedure Manual, paragraph 1, dated October 21,
1965.
SECTION 7
RETIREMENT BENEFITS
A pilot assigned to the Company's "CRAF Operation" will be eligible for
continued participation in the Retirement Plan for Employees of TWA and
the Pilots or Flight Engineers Trust Annuity Plan. Contributions to the
subject plans shall be based on the earnings of a pilot while assigned
to the Company's "CRAF Operation".
SECTION 8
SICKNESS AND INJURY BENEFITS
A pilot assigned to the Company's "CRAF Operation" shall be covered by
Section 15 of the Agreement.
SECTION 9
BENEFIT ASSIGNMENTS
A pilot assigned to the Company's "CRAF Operation" shall be covered by
Section 27 of the Agreement. The Company shall call to the attention of
a pilot assigned to the "CRAF Operation" the options set forth in
paragraph (B) of Section 27 of the Agreement and afford such pilot the
opportunity to select one of such options. An appropriate form will be
made available for this purpose.
SECTION 10
GENERAL
The Company shall provide each pilot in its employ with a copy of this
Letter of Agreement.
182
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<PAGE>
LETTER I, cont.
SECTION 11
DURATION
THIS LETTER OF AGREEMENT shall become effective on December 1, 1966, and
shall remain in full force and effect concurrently with the Agreement
signed September 1, 1994.
IN WITNESS WHEREOF, the parties hereto have signed this Letter of
Agreement this 1st day of September 1994.
FOR TRANS WORLD AIRLINES, INC.
- - ----------------------------------
/s/ Mr. Martin J. Farber
Director, TWA Labor Relations
FOR THE ASSOCIATION
- - ----------------------------------
/s/ Keith A. Bounds
Chairman, TWA MEC Negotiating Committee
FOR THE AIR LINE PILOTS IN THE SERVICE
OF TRANS WORLD AIRLINES, INC.
- - ----------------------------------
/s/ J. Randolph Babbitt, President
183
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<PAGE>
LETTER II
LETTER OF AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN THE SERVICE OF
TRANS WORLD AIRLINES, INC.
AS REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., it successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TRANS WORLD AIRLINES, INC. as represented by the AIR LINE
PILOTS ASSOCIATION, INTERNATIONAL (hereinafter known as the
"Association" or "ALPA").
The Air Line Pilots Association, International and Trans World Airlines,
Inc., in the interest of national defense, hereby agree:
1. That the pilots in the service of Trans World Airlines, Inc., will
continue to perform all duties which are necessary to enable the
Company to operate military flight on which Trans World Airlines
carries exclusively military traffic for the United States
Government, even though such pilots withdraw from commercial
airline service because of unresolved labor disputes of any type,
including disputes arising out of negotiations for a new contract.
2. That pay and other benefits for such pilots who perform duties in
connection with such military flights, pursuant to paragraph 1
hereof, will:
(a) for any period prior to the opening date of the contract
between the parties be governed by the then existing
contract unless modified by agreement of the parties and,
(b) after the opening date of the contract be governed by either
the contract that existed during the said labor dispute or
the contract negotiated, if any, as a settlement of such
dispute, whichever is more beneficial to such pilots.
3. That this is consistent with the long-standing policy and
performance of the Air Line Pilots Association, International.
4. In the event any such pilot is assigned to perform duties in
connection with such military flights, pursuant to the terms of
paragraph 1 hereof, the Vice President of Industrial Relations or
his designee shall supply to the Association a written
certification that such duties are necessary to enable the Company
to operate such military flights.
184
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<PAGE>
LETTER II, cont.
5. This Agreement shall be effective March 2, 1968 and shall continue
in full force concurrent with the basic Working Agreement signed
July 20, 1977.
6. This Agreement shall not apply to any military flights the Company
may operate for any other carrier. Further, this Agreement shall
not apply to military flights the Company may contract for during
the term of a strike other than those military flights contracted
for as a result of a contract renewal or a new contract signed
subsequent to the expiration of a contract.
Signed this 20th day of July 1977.
FOR TRANS WORLD AIRLINES, INC.
/s/ D. J. Crombie
Vice President, Industrial Relations
WITNESS:
/s/ Darrell K. Merrill
FOR THE AIR LINE PILOTS IN THE
SERVICE OF TRANS WORLD AIRLINES, INC.
/s/ J. J. O'Donnell, President
WITNESS:
/s/ Wayne L. Haggard
/s/ R. F. Roberts
/s/ Gerald J. Riani
/s/ Albert J. Mundo
/s/ Thomas J. Kennedy
/s/ John P. Donlan, Jr.
185
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<PAGE>
LETTER III
December 10, 1964
Mr. Wayne L. Haggard
3100 Crest Drive
Manhattan Beach, California
Dear Mr. Haggard:
This will confirm our understanding in connection with the disability
retirement minimum set forth in the TWA-ALPA Agreement signed January 8,
1965.
In the event the Federal Aviation Agency or its successor agency
establishes higher physical standards for a pilot to be certified in the
operation of future types of Company aircraft, failure to meet such new
qualifications shall not entitle a pilot to disability benefits as
provided in the aforementioned Agreement.
If the above accurately reflects our understanding, please obtain the
signature of Mr. Ruby as indicated below and return to this office.
Sincerely,
/s/ Kenneth L. Meinen
/s/ Wayne L. Haggard
186
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<PAGE>
LETTER IV
September 25, 1975
Mr. John P. Donlan
Master Executive Chairman
Air Line Pilots Association
Pan Am Building
200 Park Avenue
New York, New York 10017
Dear Mr. Donlan:
This is to confirm our understanding concerning the application of the
provisions of Section 25 of the recently concluded agreement between
Trans World Airlines, Inc., and the Air Line Pilots Association.
As used in Paragraph (A) of that Section, the term "Management" is
deemed limited to the following:
1. Pilots on the corporate staff.
2. General Managers - Flying.
3. One Manager - Pilots - who acts as Assistant General Manager -
Flying in each domicile.
4. Staff Vice President - Flight Operations Training.
5. Pilot management reporting directly to the Staff Vice President -
Flight Operations Training.
Very truly yours,
---------------------------------
/s/ D. J. Crombie, Vice President
TWA Industrial Relations
187
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<PAGE>
LETTER V
LETTER OF AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN THE SERVICE OF
TRANS WORLD AIRLINES, INC.
AS REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., it successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TRANS WORLD AIRLINES, INC. as represented by the AIR LINE
PILOTS ASSOCIATION, INTERNATIONAL (hereinafter known as the
"Association" or "ALPA").
WHEREAS, the Company wishes to install in its aircraft the Airborne
Integrated Data System (AIDS) an may, at future times, desire to install
other improved systems for the recording and collection of in-flight
data; and
WHEREAS, the parties are in agreement that the improved recording and
collection of data through the constant in-flight monitoring of
equipment will contribute to safety by the early identification of
equipment problems, and also constitute a valuable tool for accident
investigation, and should be supported by all, with appropriate
safeguards against improper use,
NOW, THEREFORE, it is agreed between the parties that the use of AIDS
and other equipment for the recording and collection of in-flight data
by the Company will be in accordance with the following:
1. The pilots in the service of the Company accept the AIDS system
and their duties attendant thereto.
2. AIDS and other similar equipment may be used without limitation to
obtain mechanical information.
3. Such equipment may likewise be used to monitor operational trends,
to evaluate the effectiveness of training, to identify possible
needs for procedural changes and to assist in accident
investigation. Data obtained through AIDS systems which is used to
determine operational trends will not identify specific crew
members associated therewith.
4. Information obtained through the use of AIDS and other equipment
for the recording and collection of in-flight data will not be
used as a basis for disciplinary action nor will data be
introduced by the Company in any grievance
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<PAGE>
LETTER V, cont.
proceedings or System Board of Adjustment proceedings unless the
Association introduces AIDS data.
5. Data obtained through these systems will not be disclosed to third
parties. However, such data will be made available to the pilot
upon his request or to authorized Government agencies for accident
and incident investigation purposes only and only after demand by
such agencies.
6. In order to prevent the use of data for purposes injurious to the
Company or its employees, raw data shall not be retained for
periods longer than required by Federal Agencies, except that bulk
raw data necessary for maintenance and operational purposes may be
retained for periods up to ninety days.
7. Upon request by properly authorized Association representatives
the Company will make available to such representatives AIDS
information relating to accidents and incidents.
8. This Agreement shall apply to the Airborne Integrated Data Systems
(AIDS) and to any other system for the recording and collection of
in-flight data which the Company may install in the future. Prior
to the installation of such other systems or the implementation of
further developments or refinements of the systems referred to in
the previous paragraphs of this Letter of Agreement, the Company
will, with adequate advance notice, confer with the Association as
to the Company's plans and intentions respecting the matter and
take into consideration in formulating its future course of action
the points of view put forth by the association.
IN WITNESS WHEREOF, the parties hereto have signed this Letter of
Agreement this 20th day of July 1977.
FOR TRANS WORLD AIRLINES, INC.
/s/ J. C. Hilly
WITNESS:
/s/ Bruce Sollow
/s/ Phil Poyner
/s/ E. F. O'Reilly
FOR THE AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL
/s/ J. J. O'Donnell
WITNESS:
/s/ Wayne L. Haggard
/s/ H. Neville Fryling
/s/ Robert Murphy
189
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<PAGE>
LETTER VI
November 1, 1989
William F. Compton, Chairman
TWA MEC Negotiating Committee
Air Line Pilots Association
1801 Park 270 Drive
Suite 260, Building II
St. Louis, Missouri 63146-4011
Dear Mr. Compton:
This is to confirm that Trans World Airlines, Inc., and the Air Line
Pilots Association have agreed to the establishment of international
satellite domiciles for narrowbody and widebody aircraft (hereinafter
referred to as international satellites) in accordance with the
provision listed below:
1. The purpose of this agreement is to allow TWA to operate flights
between international cities in the most efficient and economical
manner possible. In addition to the foregoing:
A. The Company may operate flights between international
satellites in the Caribbean and the United States.
B. The Company may operate international satellite flights
between an international city and a domestic city which
involved an oceanic crossing provided there are no more than
four (4) round trips per week.
2. TWA may establish international satellites located in any
international city served by TWA, currently or at any time in the
future.
3. Lines shall consist of international satellite flights only and
shall be published separately in the domicile bid package. The
Company shall determine the domicile(s) to be assigned
international satellite flying. Lines of time shall be assigned to
more than one domicile whenever:
A. There is a total of twelve (12) or more international
satellite lines for an equipment type and;
B. There is more than one international satellite city from
which such equipment type is flown and;
C. Such equipment type is flown by more than one domicile.
A satellite city shall be associated with only one domicile. The
Company will not be required to split lines if the result would be
less than four (4) lines being associated with a domicile.
Examples:
A. Total 727 International satellite lines = 15
Satellites = CDG (3 lines) - FRA (9 lines)
CDG assigned to STL and FRA assigned to JFK
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<PAGE>
LETTER VI, cont.
B. Total 727 International satellite lines = 15
Satellites = CDG (3 lines) - FRA (12 lines)
No Split, all lines assigned to JFK or STL
C. Total 727 International satellite lines = 15 Satellites =
CDG (3 lines) - ATH (3 lines) - FRA (9 lines)CDG and ATH
assigned to STL and FRA assigned to JFK
The monthly ALV may vary between 65 and 85 hours for each
equipment type utilized on the international satellite operations
and such ALV may be determined separately and independently of the
domestic operation and the remainder of the international
operation. Individual lines may be constructed in excess of this
ALV in order to provide efficient sequencing if agreed to by the
parties.
4. Pilots must be qualified and available for a full month (i.e. no
vacation, training other than recurrent, or other lost time) in
order to be awarded a satellite line of time.
5. After international satellite lines have been awarded, pilots
shall be scheduled for any necessary training. Any illegality or
over the end of the month conflict shall be handled in the
following manner:
A. The pilot shall be permitted two days from the notification
of the bid in order to trade himself/herself legal or
correct any conflict.
B. If the pilot is unable to correct the illegality or conflict
via mutual trade, the Company may correct the illegality or
conflict by removing flight activity in the old month and
balance accordingly.
6. Pilots may be involuntarily assigned to international satellite
lines of time in the event of insufficient bidders. In the event
satellite line(s) are not bid, involuntary assignment to such
line(s) shall come from the domicile having the insufficient
bidder(s). Pilots at all domiciles qualified and currently holding
a bid on the equipment utilized on the satellite operation shall
be afforded the opportunity to submit a standing bid for temporary
assignment to the satellite. Such bid preferences shall be
honoredin order of seniority, prior to the involuntary assignment
as a result of insufficient bids at the domicile. Such assignment
will not generate temporary assignment expenses under Section 7
(B)(2).
7. Notwithstanding the provisions of Section 12 (A), reserve staffing
shall not be established for this operation. However, should the
Company decide to establish reserve protection for this operation,
pilots shall be afforded an opportunity to bid such reserve lines
in accordance with seniority.
8. Pilots flying the international satellite operation shall be
entitled to international rates of pay exclusive of navigation
pay. Notwithstanding the foregoing, navigation pay in accordance
with Section 4 (D)(6) shall apply to flight segments which require
the use of specialized navigation equipment (e.g. INS or Omega)
during oceanic operations.
9. First Officers will not be required to possess an equipment rating
for this operation as required in Section 31 for international
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<PAGE>
LETTER VI, cont.
operations except that Section 31 requirements for a rated first
officer shall apply to flights involving an oceanic crossing.
10. Pilots will be provided one positive Class B round trip pass from
his/her domicile to the international satellite for purposes of
reporting to and returning from his/her assignment. Any pilot who
is required to report to his permanent domicile during such period
of assignment to an international satellite will be provided
positive Class B round trip transportation from the satellite to
the permanent domicile.
11. With the exception of the Cairo satellite, hourly expenses as
provided in the Agreement will commence at the departure of the
pilot's positioning TWA flight to the international satellite
provided that flight is scheduled to arrive no sooner than the day
before the departure of his/her first scheduled flight. In the
event there is no TWA flight scheduled to arrive the day before
the pilot's first flight assignment, expenses will commence at the
departure of the last TWA flight which will position the pilot in
the satellite at least one day prior to his/her first satellite
flight. Expenses shall continue until the arrival of the pilot's
return TWA flight to his/her domicile, provided such pilot leaves
the satellite city within 24 hours of his/her last flight. In
Cairo, expenses shall commence 48 hours prior to the pilot's first
satellite flight. Expenses shall continue until the arrival of the
pilot's return TWA flight to his/her domicile, provided such pilot
leaves the satellite city within 24 hours of his/her last flight
assignment unless there is no TWA flight departing within the 24-
hour period, in which case expenses will continue until the
arrival of the first TWA flight departing the satellite. Should
the pilot choose to position himself/herself earlier or return to
his/her domicile later, the pilot shall be considered to be on
his/her own expense. A pilot who so chooses shall have his/her
expenses begin 24 hours before his/her first scheduled assignment
and end 24 hours after his/her last scheduled assignment. No
additional trip expenses shall be paid while flying. A pilot may
remain at the satellite on expenses after completing his/her
monthly flight assignments only if he/she already holds an
international satellite line of time for the next month.
12. Company paid hotel rooms and transportation in accordance with
Section 7 (B)(1) shall be provided for each pilot at the satellite
city in addition to normal layover hotel rooms as required by
flight assignments.
13. Trip and duty hours shall commence and end at the report and
release of each pairing at the international satellite except as
provided in Paragraph 23 of this letter.
14. On duty limits and minimum rest shall be in accordance with
domestic rules, except that flights which include an oceanic
crossing shall have on duty and minimum rest calculated in
accordance with international rules. International FAR's shall
apply to all international satellite operations. The domestic
contractual rules of 30 in 7, 8 in 24, at domicile shall not apply
to international satellite operations. Diurnals shall be based on
local time of the international satellite. A pilot positioning
across the Atlantic will not be required to act as an operating
crew member thereafter without an intervening rest period of 13:30
scheduled, 11:30 actual; however, in the event the positioning
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LETTER VI, cont.
flight operates late, a pilot may at his/her discretion waive an
additional two (2) hours of rest.
15. Any trips open due to illegalities or other reasons shall be
protected by the pilots who hold international satellite lines of
time.
16. Pilots on domestic lines of time shall not be involuntarily
balanced on international satellite flights. However, pilots on
domestic lines of time may request balance or use Section 9
processes to acquire international satellite flights,
qualifications permitting. Pilots on international satellite lines
of time may not use Section 9 processes to acquire domestic
flights but may be balanced on domestic flights if no
international satellite flights are available. (Such balancing
shall not result in the proration of the international satellite
pilot's guarantee.) In all other instances, all pilot guarantees
will be prorated based on services performed.
17. Normal balancing rules shall apply (i.e., under current monthly
guarantee) when balancing a pilot on any international satellite
flight. However, an international satellite pilot shall not be
involuntarily balanced on a domestic flight between his/her
international satellite assigned flights unless his/her projection
is more than 12 hours below his/her guarantee.
18. BLIP's or required balance will be awarded three (3) days in
advance of the operating flight departure for pilots domiciled at
JFK and four (4) days in advance of the operating flight departure
for pilots based at other domiciles.
19. All flying shall be paid at the rate of the operation actually
flown.
20. Except as provided herein, pilots engaged in the international
satellite operation will be afforded the same treatment as all
other pilots assigned to the international operation.
21. The system schedule chairman shall provide normal scheduling input
as to the sequencing of flights. Additionally, pilots on the
international satellite operation shall be allowed to mutually
trade flights provided such trades cause no disruption of the
operation.
22. In recognition of these new concepts and the possible need for
modifications based on operating experience, the Staff Vice-
President of Flying may make temporary changes in the
international satellite operation when such changes are necessary
to continue the efficient operation of flights. In such event, the
Staff Vice-President of Flying shall, without delay, consult the
Negotiating Committee for the purpose of resolving a mutually
approved policy to cover the problems which required the temporary
changes.
23. Bid line pilots drafted (not involuntarily assigned pursuant to
Paragraph 6 above) to cover international satellite flights shall
be provide deadhead transportation between the domicile and the
international satellite and shall have expenses, trip credit and
duty credit as provided in Section 11 of the working agreement
based on domicile report and release times. Further, for purposes
of this provision only, the provisions of Section 11 (B)(2)(d)
193
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<PAGE>
LETTER VI, cont.
shall be applicable to duty periods which consist solely of
deadhead. Application of this paragraphshall not trigger the rated
First Officer requirement contained in Paragraph 9 of this letter.
Very truly yours,
/s/ J. W. Hoar
AGREED AND ACCEPTED
- - -----------------------------
/s/ William F. Compton
194
<PAGE>
<PAGE>
LETTER VII
September 14, 1993
Mr. William F. Compton, Chairman
TWA Master Executive Council
Air Line Pilots Association
3221 McKelvey Road, Suite 200
Bridgeton, Missouri 63044-2551
Dear Bill:
This letter shall confirm our mutual understanding regarding the
procedures which shall govern interaction between the Professional
Standards Committee of the TWA MEC and TWA. Both the Association and the
Company recognize and acknowledge their mutual and separate
responsibilities to promote and insure the highest standards of
professionalism and safety among TWA pilots. Further, it is the mutual
goal of the parties that TWA pilots be treated fairly and equitably.
The MEC Professional Standards Committee has indicated that its goals
are to facilitate resolution of disputes relating to:
1. Conflicts between pilots which affect their professional
interactions.
2. Conflict between a pilot and a member of another employee group.
3. Conduct of a pilot that reflects unfavorably upon the profession.
The Company acknowledges that in order to be effective, the proceedings
of the MEC Professional Standards Committee must be and remain
completely confidential.
Should a professional standards problem come to the attention of the
Company, it may at its sole discretion, refer such dispute to the MEC
Professional Standards Committee. Whenever the Company elects to refer a
dispute to the MEC Professional Standards Committee, the Committee shall
normally have a period of 30 days, or such other period as may be
designated by the Company, during which to attempt to resolve the
problem. During such 30-day (or other) period, the Company agrees to
hold in abeyance any action it may have commenced or contemplate taking
unless further information becomes known which would alter the facts as
understood by the Company at the time it made its referral. At or before
the end of the 30-day (or other) period the MEC Professional Standards
Committee shall make a verbal report to appropriate TWA management
either that "the problem is resolved" or that the "MEC Professional
Standards Committee is unable to be of any further assistance."
In the event that successful resolution of a problem is not attained by
the Committee within the aforementioned 30-day (or other) period, the
Company is then free to take whatever action it deems appropriate and
necessary, which is not inconsistent with the terms of the TWA/ALPA
Working Agreement, to resolve the problem. In cases where the Company
would elect to commence or continue disciplinary proceedings, the delay
caused by the 30-day (or other) period will not be raised by the
Association as a defense nor will the Company assert any failure of the
MEC Professional Standards Committee to arrive at a successful
resolution as supporting its position. The company further agrees that
no MEC Professional Standards Committee member will be asked or required
195
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LETTER VII, cont.
by the Company to bear witness in any disciplinary case that has been
previously referred to the Committee by the Company.
The Company shall, in connection with any case referred by it and if so
requested by the MEC Professional Standards Committee, encourage any
employee involved in a dispute to work with the Committee to attempt to
attain an amicable and equitable resolution to the problem.
The existence of this letter and the procedures delineated above shall
in no way alter or diminish the Company's authority to insure
proficiency and air safety nor shall they abridge or infringe on a
pilot's rights under the TWA/ALPA Working Agreement.
Very truly yours,
/s/
Larry M. Hecker
Senior Vice President
Flight Operations
AGREED AND ACCEPTED:
/s/
- - --------------------------
William F. Compton
196
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<PAGE>
LETTER VIII
LETTER OF AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN THE SERVICE OF
TRANS WORLD AIRLINES, INC.
AS REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION
This Letter of Agreement is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between Trans World Airlines, Inc. (hereinafter referred to as the
"Company"), and the Air Line Pilots in the service of Trans World
Airlines, Inc., as represented by the Air Line Pilots Association,
International (hereinafter referred to as the "Association").
W I T N E S S E T H:
--------------------
WHEREAS, the Company and the Pilots desire to supplement their Pilots'
Employment Agreement, signed February 12 1957.
NOW THEREFORE, it is mutually agreed and understood by and between the
parties to this Letter of Agreement that:
The Company shall assume all liabilities against pilot personnel
resulting from alleged negligence in the manipulation or operation
of TWA aircraft by such pilot personnel. This shall not apply to
any losses, penalties or forfeitures resulting from action of a
government agency; nor shall it apply to any disciplinary action
that may be taken by the Company.
This Letter of Agreement shall be effective as of date of signing and
shall run concurrently with the Basic Pilots' Agreement signed February
12, 1957.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement
this 15th day of April, 1957.
WITNESS: For TRANS WORLD AIRLINES, INC.
WITNESS: For THE AIR LINE PILOTS IN THE
SERVICE OF TRANS WORLD AIRLINES,
INC.
197
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<PAGE>
Letter IX
LETTER OF AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN THE SERVICE OF
TRANS WORLD AIRLINES, INC.
AS REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., it successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TRANS WORLD AIRLINES, INC. as represented by the AIR LINE
PILOTS ASSOCIATION, INTERNATIONAL (hereinafter known as the
"Association" or "ALPA").
WHEREAS, the parties are currently in discussions to develop effective
cost savings through changes in the Collective Bargaining Agreement;
NOW, THEREFORE, the parties have agreed to certain provisions to
safeguard pilot training records as follows:
1. In the event the Company ceases regularly scheduled air line
operations, it will use its reasonable best efforts to provide
each pilot a copy of his/her current training records file as
maintained by the Company pursuant to regulations of the Federal
Aviation Administration, and any other applicable laws or
regulations, within five (5) business days after written request
and authorization submitted by the pilot. Further, the Company
shall provide a copy of a pilot's training file to any third party
or parties within five (5) business days after written request and
authorization submitted by the pilot. In the event of a Chapter 7
or 11 filing under the United States Bankruptcy Code, the Company
will at all times use its best efforts to cause these obligations
to be performed.
2. This Agreement shall become effective upon execution.
FOR TRANS WORLD AIRLINES, INC.
/s/ Rex A. Pitts, Staff Vice President
TWA Flight Operations
FOR THE ASSOCIATION:
/s/ Keith A. Bounds, Chairman
MEC Negotiating Committee
Dated August 29, 1994
198
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<PAGE>
LETTER X
August 28, 1994
Captain Rex A. Pitts
Staff Vice President - Flying
Trans World Airlines, Inc.
JFK International Airport
Flight Operations, Building 95
Jamaica, New York 11430
Dear Captain Pitts:
This letter shall confirm our agreement that the Company shall no longer
be obligated to provide crew meals on flights of less than 2:00 hours
scheduled flight time onto which it is not boarding passenger or cabin
attendant crew meals.
The parties agree that the dollar value of the cost savings associated
with this change shall be $ 131,000.00.
This Agreement is subject to the negotiation of a new cost saving
Collective Bargaining Agreement (CBA) to replace the current CBA, and is
subject to TWA MEC and membership ratification.
Yours truly,
/s/
Keith A. Bounds, Chairman
TWA MEC Negotiating Committee
KAB:dj
FOR TRANS WORLD AIRLINES, INC.
/s/
- - -------------------------------------------
R. A. Pitts, Staff Vice President - Flying
199
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LETTER XI
August 15, 1994
Mr. Martin J. Farber
Director - Labor Relations
Trans World Airlines, Inc.
Building 60, Terminal 4A
JFK International Airport
Jamaica, New York 11430
Dear Marty:
This shall confirm our agreement that the Company shall reimburse a
pilot for any FAA/TWA required medical expense he/she may incur which is
denied by Aetna because it was not "medically necessary".
This agreement shall apply to both the situation where specific medical
testing is required by TWA and/or any tests required by the FAA
requisite to the issuance of the Airman's Medical.
This shall not apply to the cost of those regular six (6) month annual
FAA physical examinations which are necessary and required by law to
maintain a pilot's license(s).
If the above correctly sets forth our agreement, please sign in the
space indicated below.
Sincerely,
/s/
Michael W. Stelzer, Chairman
TWA MEC Grievance Committee
/s/
- - -------------------------------
Martin J. Farber
For the Company
Dated August 31, 1994
200
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<PAGE>
LETTER XII
PARTICIPATIVE MANAGEMENT
------------------------
POLICY STATEMENT
The Company is committed to a radical redesign of its processes,
organization, and culture to deliver the optimal product to the
traveling public. The Company believes that employee participation in
its long range and strategic planning and day-to-day operational
decision making is the foundation of its re-engineering efforts. The
free flow of information in an open decision-making process with
participation by all parties is the cornerstone of Management's
commitment.
The Company is committed to a re-engineering of the management structure
so as to eliminate unnecessary levels of management focusing decision
making authority for all purposes at that level of the organization
where the necessary knowledge resides and where implementation takes
place. To the extent required, the Company will amend its Management
Policies and Procedures Manual to reflect this structure.
A. MANAGEMENT/LABOR ADVISORY TASK FORCE
------------------------------------
The Company believes that the recently created Management/Labor Advisory
Task Force ("Task Force") should become a permanent part of the
corporate structure. Participation on the Task Force by the most senior
officials of both the Company and its three largest unions highlights
the joint commitment to the re-engineering effort and creates a decision
making forum for action.
The Task Force will meet at least once a month and will have the
authority to create similar committees throughout the Company. These
other committees may be department specific, issue specific, or cross
departmental and/or operational lines. All such committees would
ultimately report to the Task Force.
The Task Force will continuously monitor all aspects of the Company
including its structure, policies, procedures, long and short term
business and financial plans, communications strategies, and any and all
other matters involving the Company. The Company will institute
procedures to ensure that the recommendations of the Task Force and the
committees are promptly acted upon.
The Company will pay the flight pay loss and expenses of the ALPA
representatives on the Task Force and all such committees and will
provide the necessary and appropriate insurance coverage for the
performance of the duties of each ALPA representative.
The Task Force Committee structure will become a part of the Company's
Management Policies and Procedures Manual.
B. FILLING OF POSITIONS IN FLIGHT OPERATIONS
-----------------------------------------
The Company will amend its Management Policies and Procedures Manual, to
the extent required, to provide for the timely posting on flight crew
bulletin boards and FIP pages of all open management positions up to and
including the director level within the flight operations department,
including the position of General Manager - Flying (GMF). When such
postings are made, the Company will also inform ALPA and will solicit
comments and recommendations from ALPA on candidates for the open
position(s).
201
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<PAGE>
LETTER XII, cont.
C. PRODUCTIVITY TASK FORCE
-----------------------
The Company will amend its Management Policies and Procedures Manual to
provide for the continuation of the Productivity Task Force as in place
on the date of this Agreement. The Productivity Task Force will have
broad authority to request information and investigate waste and
inefficiencies. Recommendations of the Productivity Task Force will be
promptly reviewed and acted upon by the Company.
D. ACCESS TO INFORMATION
---------------------
The Company will provide to the Chairman of the TWA Master Executive
Council or his representative, a monthly report setting forth
information on the Company. The Company will provide to ALPA's
representatives on the Task Force and its related committees and on the
Productivity Task Force such information as may be required to carry out
their work. To the extent that the nature of such information so
requires, the individual ALPA representatives may be required to sign a
confidentiality agreement.
E. RESOLVING LINES OF AUTHORITY
----------------------------
In the event that there is an overlap or a conflict among two or more
management personnel of the Company regarding actions to be taken to
address issues raised by members of the Task Force Committees, the Chief
Executive Officer or the responsible Senior Vice President of the
department(s) will promptly identify in writing to all parties involved
the appropriate line of authority to resolve the overlap or conflict.
F. PARTICIPATIVE MANAGEMENT EDUCATION
----------------------------------
The Company will provide training, including seminars or other
educational opportunities, for the Company's management relating to
employee participation. All of the Company's management personnel will
be required to attend such training within twelve months. ALPA will
require ALPA representatives serving on the Task Force Committees or
Productivity Task Force to attend such training on a similar basis.
These seminars will be consistent with the Policy Statement and will be
reasonably acceptable to ALPA and the Company. ALPA and the Company will
pay the respective cost of attendance for their representatives.
G. MANAGEMENT CONSULTANT
---------------------
By March 31, 1995, the Company will retain a management consulting firm
to fully review and analyze the Company's management structure. The
members of the Task Force will be entitled to meet regularly with this
firm following its retention and to review it results prior to
implementation.
H. IMPROVING COMMUNICATION
-----------------------
The Company will make a good faith effort to improve communication
within management and between management and the employees. ALPA and the
Company agree to meet and to set goals achieving such improvement,
including staff meetings, road shows, newsletters, surveys and financial
updates. ALPA will make its expertise and resources reasonably available
to assist the Company in improving its communication with employees
represented by ALPA.
202
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<PAGE>
LETTER XII, cont.
I. EMPLOYEE INCENTIVE PROGRAMS
---------------------------
The Company, through the Task Force, agrees to implement incentive
programs which reward employees for suggestions or job performance which
increase the efficiency and productivity of the Company.
J. ENFORCEMENT
-----------
The Company's Management Policies and Procedures Manual will be amended
to prohibit taking any disciplinary or discriminatory action against any
employee because of such employee's participation on any Task Force,
committee or the Productivity Task Force or because of such employee's
suggestions regarding or criticism of the Company's management.
K. NOT EXCLUSIVE
-------------
Sections A - J are not the exclusive means for implementing the Policy
Statement and ALPA and the Company will continue to examine and discuss
other suggestion and concepts consistent with the Policy Statement.
SO AGREED
FOR
TRANS WORLD AIRLINES, INC.: FOR THE ASSOCIATION:
/s/ /s/
- - -------------------------- -----------------------------
Edward Paquette William F. Compton
Dated: 8/28/94 Dated: 8/28/94
------- -------
203
<PAGE>
<PAGE>
LETTER XIII
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns ("the
Company" or "TWA") and the Air Line Pilots in the service of TWA as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL ("the
Association" or "ALPA").
WHEREAS, the Company and the Association agree as follows:
1. The attached Letter XXVII shall be published with the New Basic
Agreement but shall not be construed to create new obligations
except with regard to the amendments to paragraph A.3 and C.1 set
forth below. Further, nothing herein shall be construed to
prejudice any entity or person's claims or defenses relating to
Letter XXVII.
2. Section A, paragraph 3 of Letter XXVII is hereby amended to
provide that the aggregate annual amount of the Company?s
obligation in connection with the payment of legal and financial
advisor expenses associated with the administration of the TWA-
ALPA ESOP Trust and any such expenses associated with the ESIP
will be limited to an amount not to exceed sixty thousand dollars
($60,000) in 1999 and 2000 and limited to an amount not to exceed
thirty thousand dollars ($30,000) in calendar years 2001 and
2002. The parties further agree that TWA will not be responsible
for any legal and financial advisor expenses rendered to ALPA in
connection with any corporate restructuring, corporate business
plan or other corporate matters, except as may be mutually agreed
in writing after July 11, 1998. The parties agree that any
amendments to the ESOP or ESIP or any other Agreements to
effectuate the purposes of this paragraph 2 will be agreed to and
executed by the Association.
3. The by-law amendments required pursuant to Section C of Letter
XXVII have been effectuated and may not be amended prior to
September 1, 2000. The Company will present to its Board of
Directors a resolution authorizing the extension of the date prior
to which the by-law amendments referenced in the preceding
sentence may not be amended to September 1, 2002.
204
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<PAGE>
LETTER XIII, cont.
4. ALPA shall immediately be apprised of and receive a copy of any
changes in the corporate governance rights and protections
provided by the Company to the IAM.
5. ALPA shall be provided thirty (30) business days to review the
changes to IAM's corporate governance rights and protections. If
ALPA determines, in its sole discretion, that (a) IAM has received
improvements to its corporate governance rights and protections
that ALPA does not then enjoy or (b) that any changes to IAM's
rights negatively impact ALPA's absolute or relative corporate
governance rights and obligations, as set forth in Letter of
Agreement XXVII as amended hereby, the parties shall immediately
confer and implement any necessary amendments to this Letter of
Agreement to ensure that: (a) ALPA receives improvements at least
as favorable as those provided to the IAM and/or; (b) ALPA's
absolute or relative corporate governance rights and protections
are restored to a position at least as favorable as those set
forth herein.
6. The Company agrees to secure and make any necessary changes to the
Company's by-laws or other governing documents, as necessary and
appropriate to effectuate the intent of 4 and 5 above.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ---------------------------------- ----------------------------------
Terry Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ---------------------------------- ----------------------------------
James F. Martin, J. A. Chronic, Chairman
Sr. Vice President Human Resources TWA MEC
Dated: July 8, 1998
/s/
----------------------------------
J. Randolph Babbitt,
President
Dated: July 8, 1998
205
<PAGE>
<PAGE>
OLD LETTER XXVII
EXHIBIT 1
A. NEW ALPA SECURITIES
-------------------
1. The Company will authorize and issue common and/or preferred
stock of the Company (the "New ALPA Securities") to a trust
established for the benefit of the employees of the Company
represented by ALPA (the "Trust"). The value of the New ALPA
Securities relative to the other equity securities of the
Company issued as part of the Restructuring shall be
determined through negotiations with ALPA based upon the
relative value of concessions made by creditors in
connection with the Restructuring, and by ALPA in the New
ALPA CBA; provided, however, that, following the
Restructuring, the total Company equity securities issued to
employees will represent not less than twenty-five percent
(25%) of the value and voting rights of the outstanding
equity securities of the Company on a fully diluted basis;
provided further that the New ALPA Securities will represent
not less than 23.05962 percent of the value and voting
rights of the equity securities of the Company issued to
employees in connection with the Restructuring; and provided
further that after the Restructuring, on a fully diluted
basis, the total of common stock and any preferred stock
with ordinary voting rights equivalent to or greater than
the common stock (collectively, "Common Securities") issued
to employees (including all common stock issued to employees
in the Company's Chapter 11 case in 1993 which are not
canceled or replaced in the Restructuring) will represent
not less than thirty percent (30%) of the total Common
Securities of the Company on a fully diluted basis.
2. All terms of the New ALPA Securities, including but not
limited to the election of Directors for the Board of
Directors, voting rights, redemption provisions, liquidation
preferences, dilution protection, covenants, dividend rates,
dividend rights and/or conversion provisions shall be
reasonably acceptable to ALPA. In the event the New ALPA
Securities include preferred stock or a combination of
preferred and common stock, this allocation shall be
consistent among all of the Company's labor groups and
reasonably acceptable to ALPA.
3. The terms of the Trust shall be determined in the discretion
of ALPA (subject to the Company's agreement as to provisions
affecting the Company as to its costs and liabilities). The
trustees of the Trust shall have investment discretion with
respect to the New ALPA Securities and shall have the right
to vote any New ALPA Securities as determined by the terms
of the Trust. The Trust may be a qualified or non-qualified
plan as ALPA may determine in its sole discretion.
Reasonable costs, subject to such restrictions as agreed
to between the Company and ALPA, of organizing and
administering the Trust, as provided in the Trust, will be
paid by the Company, including but not limited to fiduciary
liability insurance, legal costs and taxes. The principal,
interest, dividends and proceeds from the sale, repurchase,
retirement or redemption of securities received by the Trust
shall be allocated and distributed to the beneficiaries as
determined by ALPA.
206
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<PAGE>
B. ALPA BOARD OF DIRECTOR REPRESENTATION
-------------------------------------
1. The New ALPA Securities will include a separate class of
stock or one of a series of separate classes of stock (the
"Labor Stock") issued to the ALPA, IAM and IFFA (the
"Unions"). The Labor Stock, which at the election of each of
ALPA, IAM and IFFA may be either privately or publicly held,
will be entitled to elect, in the aggregate, no fewer than
the greater of (i) four members of TWA's fifteen member
board of directors or (ii) 22.5% of the total number of
directors (the "Labor Directors"). The Labor Directors shall
serve for three year terms and Labor Director vacancies
shall be filled as provided in the designation of the Labor
Stock and any shareholder voting agreement described in
paragraph 2 of this Section. The stock issued to ALPA as
part of the Labor Stock will provide that ALPA will be
entitled to elect sufficient members of the Company's board
of directors ("ALPA Directors") in order to assure that:
a. The ALPA Directors comprise at least 6-2/3% of the
board.
b. The ALPA Directors comprise at least 25% of that part
of the board elected by the Unions.
In the event that the IAM or IFFA does not elect to
participate in the Labor Stock described in this paragraph,
this paragraph may be amended provided the rights of ALPA
are not materially affected.
2. If each of the Unions is issued the same class of stock,
pursuant to paragraph 1 above, the collective bargaining
agreements of the Unions shall require the Unions to enter
into a shareholder voting agreement providing for the ALPA
representation described in paragraph 1.
3. Except as otherwise required in the Company's Restated
Certificate of Incorporation or any designation of rights of
outstanding stock, the filling of vacancies on the Board of
Directors of the Company shall require a vote of 60% of the
remaining members of the Board of Directors.
4. In addition to ALPA's rights to Board committee
representation under the current bylaws, one of the ALPA
Directors shall be entitled to sit as a voting member of any
committee, including an existing committee, considering,
reviewing or authorizing the merger, consolidation,
restructuring or business combination of the Company with,
or into, any other entity or the sale, transfer or
abandonment of significant Company assets.
C. COMPANY BYLAW AMENDMENTS
------------------------
1. The bylaws will be amended to provide that specified
provisions of the bylaws which implement procedures
bargained for by ALPA may not be amended, prior to September
1, 2000, without the affirmative vote of the ALPA
Director(s).
2. The bylaws will be amended to require that the following
actions must be approved by the board which approval cannot
be given over the dissenting vote of all Labor Directors
plus two other directors:
207
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<PAGE>
a. any sale, transfer or disposition of, in a single or
series of transactions, 20% or more of the Company's
assets, except for transactions in the ordinary course
of business including aircraft transactions as part of
a fleet management plan;
b. any merger or consolidation of the Company with or
into any other entity;
c. any business combination within the meaning of section
203 of the Delaware Business Corporation Act;
d. a dissolution or liquidation of the Company;
e. any filing of a petition for bankruptcy,
reorganization or receivership under any state or
federal bankruptcy, reorganization or insolvency law;
f. any repurchase, retirement or redemption of the
Company's stock, or securities prior to their
scheduled maturity or expiration, except for
redemptions out of proceeds of any substantially
concurrent offering of comparable or junior
securities;
g. any acquisition of assets not related to the Company's
current business as an air carrier in a single or
series of related transactions in excess of
$50,000,000 adjusted annually by a CPI index; or
h. any sale of stock or securities convertible into stock
of the Company to any person if (i) at the time of
issuance or (ii) assuming conversion of all
outstanding convertible securities of the Company,
such person or entity would beneficially own 20% or
more of the stock of the Company.
D. CERTIFICATE OF INCORPORATION AMENDMENTS
---------------------------------------
The Restated Certificate of Incorporation of the Company will be
amended, as and if necessary or appropriate, to provide for the
restrictions described above. The Restated Certificate of
Incorporation will be further amended to require an affirmative
vote of (i) 3/4 of the outstanding voting stock to amend the
bylaws of the Company by shareholder action and (ii) 2/3 of the
stock entitled to vote to approve actions described in Section to
C.2.b, c, d, f unless approved by 80% of the board of directors.
These restrictions will terminate on September 1, 2000.
208
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<PAGE>
LETTER XIV
REGIONAL PILOT BASE AGREEMENT
July 7, 1993
Mr. Keith A. Bounds, Chairman
TWA MEC Negotiating Committee
Air Line Pilots Association
1801 Park 270 Drive
Suite 260, Building II
St. Louis, Missouri 63146-4011
Dear Mr. Bounds:
This is to confirm that Trans World Airlines, Inc. (the "Company") and
the Air Line Pilots Association (the "Association") have agreed as
indicated hereinafter, and on a test basis, to procedures governing the
establishment and operation of a Regional Pilot Base ("Base").
(A) ESTABLISHMENT OF A REGIONAL PILOT BASE
1. A Base shall be a defined geographical area mutually agreed
upon between the Company and the Association. (E.g., a West
Coast Regional Pilot Base incorporating the State of
California.)
2. The Company and the Association shall mutually agree upon
one or more airports within a Base (e.g., LAX, SAN, SFO for
a West Coast Regional Pilot Base) for which a line(s) of
time will be published for each month of the Base assignment
period. Such line(s) shall consist of pairings which
originate and terminate at a specific Base airport. (E.g., a
line of time published for LAX will consist solely of
pairings where a pilot will report and be released at LAX.)
3. Letter XIII (Satellites) of the TWA/ALPA Collective
Bargaining Agreement ("CBA") shall not apply to any city
which is within the boundaries of a Base during the period
such Base is in existence.
4. The size of a Base shall be limited to the lesser of the
following:
a. A total of 50 crews based upon Captain formula bid
lines.
E.g., 30 MD8 Capt Formula Bid Lines
20 L10 Capt Formula Bid lines.
b. Sixty percent (60%) of the projected domicile Captain
formula bid lines for an equipment type. That is, the
number of Captain Base Vacancies for an equipment type
(e.g. 727, MD8, DC9, etc.) which are advertised by the
Company for a Base assignment period, may not exceed
sixty percent (60%) of the projected Captain formula
bid lines for that equipment type at a domicile.
E.g., If STL is projected to have 50 Captain formula
bid lines for MD8 equipment during a Base
assignment period, the maximum MD8/Captain Base
Vacancies which could be advertised and awarded
at a Base(s) is 30.
209
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LETTER XIV - REGIONAL PILOT BASE AGREEMENT, cont.
In the event the Company elects to assign an equipment
type to a Base(s) which is operated by more than one
domicile, the 60% limitation described immediately
above shall be applied to the domicile with the least
projected Captain formula bid lines for such equipment
type.
E.g., 727 flying is to be assigned to a Base(s). The
727 is operated by both JFK and STL. If JFK is
projected to have forty (40) Captain formula bid
lines during the Base(s) assignment period and
STL is projected to have eighty (80) Captain
formula bid lines during the Base(s) assignment
period, then the 60% limitation would apply to
JFK resulting in a maximum of twenty-four (24)
727/Captain Base Vacancies for that Base(s)
assignment period.
c. The Base size limitation calculations specified in (a)
and (b) above shall be made immediately prior to the
advertising of Base vacancies in accordance with
paragraph B(2) below. The calculations shall be based
upon the flying projected to remain in effect during
the entire next Base assignment period.
(B) ASSIGNMENT OF PILOTS TO A BASE
1. Vacancies at a Base will be by status and equipment ("Base
Vacancies"). (E.g., L10-F/O or DC9-CAP). Except as provided
for in paragraphs B(3) and B(4) below, pilots may only be
awarded Base Vacancies in their permanent status.
2. Base Vacancies shall be advertised sixty (60) days shall be
awarded in seniority order subject to the following prior to
a Base assignment period.
3. Upon establishment of a Base or upon an increase in Base
Vacancies as described in B(4) below, the Company shall
publish status/equipment vacancies at such Base for the Base
assignment period. The Base Vacancies
a. A pilot who is restricted:
i. From being trained on the equipment for which a
Base Vacancy exists pursuant to the provisions
of Section 6(D)(3)(a),(c),(d) and (f) or the
TWA/OZA Pilot Seniority Integration agreement,
or
ii. Pursuant to Sections 6(B)(16), 6(B)(17) or 6(D)
(9) of the CBA, or who is otherwise ineligible
to serve in the status for which a Base Vacancy
exists, shall not be awarded such Base Vacancy.
b. A pilot awarded a Base Vacancy in accordance with this
paragraph shall, if necessary, also be awarded a
permanent vacancy, causing a related voluntary
transfer (e.g., to JFK or STL) and/or a voluntary
change in status (e.g., to Captain, F/O or F/E), in
order to effectuate the bid award.
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LETTER XIV - REGIONAL PILOT BASE AGREEMENT, cont.
The permanent transfer and/or change in status will be
effective with the Base Vacancy award, or upon completion of
necessary training to assume the Base award. A pilot who
initiates training due to a Base award may be restricted in
accordance with Section 6(E)(1) of the CBA. Paragraphs
B(5)(a) and B(5)(b) below do not apply to the awarding of a
Base Vacancy under this paragraph 3.
4. After establishment of a Base, whenever the number of Base
Vacancies to be advertised for a subsequent Base assignment
period exceed the maximum number of Base Vacancies which
have been filled for any previous Base assignment period,
the additional Base Vacancies (i.e., those greater than the
maximum number which have previously existed at the Base)
shall be available to be bid in accordance with paragraph
B(3) above. These Base Vacancies shall be awarded in
seniority order under paragraphs B(3) and B(5).
Example: A Base is established with 10 vacancies.
For the second Base assignment period a total of 20
vacancies are advertised for the Base. Up to 10 of the
20 Base Vacancies may be awarded, subject to
seniority, to pilots under paragraph B(3).
For the third Base assignment period, there are 35
Base Vacancies advertised. Up to 15 of the 35 Base
Vacancies may be awarded, subject to seniority, to
pilots under paragraph B(3).
For the fourth Base assignment period, the number of
Base Vacancies is reduced to 20. No Base Vacancies
would be available to be awarded under paragraph B(3).
For the fifth Base assignment period, there are 30 Base
Vacancies advertised. No Base Vacancies would be awarded
under paragraph B(3) as the maximum of 35 vacancies for that
Base has not been exceeded.
5. All Base Vacancies not awarded under paragraphs B(3) and
B(4) above, shall be awarded within status from the
domicile(s) where the equipment to be flown at the Base is
operated provided that:
(a) The pilot does not require more than Q02
requalification training on the equipment type
associated with the Base Vacancy, and
(b) The pilot is not restricted under Section 6(E) (1) to
a type of equipment different than the equipment type
associated with the Base Vacancy.
6. Pilots will bid for Base Vacancies specified in B(3), B(4)
and B(5) above on a separate Regional Pilot Base bid sheet.
This bid will remain on file only through the end of the
Base assignment period for which it was filed and will
reflect a pilot's preference for bidding a Base Vacancy
and/or a temporary opening at a Base. (A temporary opening
being one which becomes available subsequent to the awarding
of bids for a Base assignment period.) A pilot will only be
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LETTER XIV - REGIONAL PILOT BASE AGREEMENT, cont.
allowed to rescind his/her temporary Base opening bid
preferences in writing. Such notification must be received
by the Company prior to the pilot being notified of an
assignment to a temporary opening.
7. Base Vacancies shall be three (3) bid months in duration, or
longer by mutual agreement between the Company and the
Association (the "Base assignment period").
8. In the event the number of pilots bidding for Base Vacancies
associated with a status and a type of equipment is less
than the number of Base Vacancies advertised for that status
and equipment, the Company shall not be required to award
Base Vacancies in other statuses associated with the same
equipment type in excess of the number of Base Vacancies
filled by the least bidders. (E.g., the Company advertises
ten (10) Base Vacancies in each status for the L10 but there
are only eight (8) pilots who bid for the L10-F/O Base
Vacancies, the Company would not be required to award more
than eight (8) L10-CAP and eight (8) L10-F/E Base
Vacancies.)
9. Pilots assigned to a Base who attend training conducted
outside the Base shall be considered, for all purposes, as
attending training away from domicile. Base pilots who
attend training conducted at a location within the Base
shall be considered, for all purposes, as attending training
at domicile. (E.g., a pilot holding a line of time out of
SFO, who is assigned to a PC at LGB, would be considered as
attending training at domicile.)
10. A pilot assigned to a Base, who is not awarded a Base
Vacancy for the next Base assignment period, shall return to
his/her permanent domicile. (This will not be considered a
displacement under Section 19 of the CBA.)
11. Pilots at a Base will retain all rights associated with
Section 19(D) and (E) of the CBA, except that the
application of Section 19(D)(3) will be from a pilot's
permanent domicile. Pilots at a base shall not be considered
for filling temporary vacancies pursuant to Section 19(F) of
the CBA.
A pilot holding a Base assignment may bid and be awarded a
permanent domicile vacancy in accordance with Section 19 of
the CBA. When a pilot assigned to a Base holds a future
effective bid which requires training, and such training
becomes available, the pilot may, at his/her option, either
return to his/her permanent domicile for training or remain
at the Base through the end of the Base assignment period. A
pilot displaced under Section 19 will remain at a Base for
the full Base assignment period, except when such pilot
requires training and the last scheduled class commences
prior to the end of the Base assignment period. In such
case, the pilot will return to his/her permanent domicile
prior to commencing training. A pilot being furloughed while
assigned to a Base will be returned to his/her permanent
domicile effective with the date of his/her furlough.
12. A pilot holding a future effective bid that will commence
prior to or during a Base assignment period will not be
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LETTER XIV - REGIONAL PILOT BASE AGREEMENT, cont.
considered for such Base assignment, unless the pilot's
future bid complies with paragraphs B(3), B(4) or B(5).
A pilot awarded a Base Vacancy which requires training which
may subject such pilot to restriction pursuant to Section
(6)(E)(1) of CBA, shall have all future effective bids
canceled.
13. A pilot assigned to a Base who is no longer qualified to
perform the duties of the Base Vacancy which he/she was
awarded, shall be returned to his/her permanent domicile.
(C) AWARDING OF BIDS
1. The Company shall post bid runs for the equipment to be
flown at the Base in accordance with Section 9(A) & (B) of
the CBA.
2. The provisions of Section 10(B)(6)(d) of the CBA shall not
be utilized by the Company within a Base, except by mutual
agreement between the Company and the Association.
3. Bid runs shall be awarded to Base pilots in accordance with
Section 9(C)(1) and 9(C)(2) of the CBA. A pilot may be
awarded a bid run from any airport ("Bid Award Airport")
agreed to pursuant to paragraph A(2) above.
4. A pilot returning to active flying status at a Base after
bids have closed shall be handled in accordance with Section
9(C)(4) of the CBA. If such returning pilot causes a
temporary opening to be canceled, the pilot awarded the
temporary opening shall return to his/her permanent domicile
and will be handled under the same provision.
5. Sections 6(D)(5) and 6(E)(2) of the CBA shall not apply to
Base pilots. The period of time a pilot is assigned to a
Base will not be included for purposes of Section 6(D)(5) to
determine eligibility for equipment training or pay
protection nor will a pilot receive pay protection pursuant
to Section (6)(D)(5) once awarded a Base Vacancy. Pilots
shall again become covered by Sections 6(D)(5) and 6(E)(2)
upon return to their permanent domicile. An assignment to a
Base shall only interrupt a pilot's eligibility for pay
protection and accrual for entitlement for training under
Section 6(D)(5).
6. In the event coverage is required at a Base for one or more
bid periods during a Base assignment period, a temporary
opening(s) may be created. Such temporary opening(s) shall
be filled in seniority order by status/equipment from those
pilots who have indicated a desire for such temporary
opening(s) on his/her Regional Pilot Base bid sheet.
Paragraph B(5) shall apply in awarding such assignment. The
most senior qualified and available (no vacation, lost time,
or training greater than Q02) pilot meeting the foregoing
criteria and requesting a temporary opening, shall be
awarded such temporary opening.
A pilot may be assigned to that opening only prior to the
first day of a bid month from a domicile where the equipment
is flown. A pilot assigned a temporary opening under this
213
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LETTER XIV - REGIONAL PILOT BASE AGREEMENT, cont.
provision shall not be considered to be assigned to a
temporary vacancy under the provision of Section 19(F) of
the CBA.
7. The Company may at its option publish or develop relief
lines at a Base. Should the Company elect to publish relief
line(s), they will be advertised as temporary openings. If
sufficient time exists, the Company may, at its option,
develop additional relief lines from reserves at the Base in
accordance with Section 9(C)(7) of the CBA.
8. Assigned domicile reserve staffing requirements (Section
12(A)(1) of the CBA) shall be based on the combined formula
bid lines of the Base and the assigned domicile for each
equipment type. The staffing and scheduling of reserves at a
Base shall be mutually agreed upon separately for each Base.
(D) BALANCING AND PROTECTION OF OPEN TIME
1. All balancing (voluntary or involuntary) shall be
accomplished using open Base flights unless there are no
open flights within the Base at the time a pilot is balanced
or volunteers for balance.
2. A Base pilot with a balance flight (voluntary or
involuntary) at an assigned domicile may trade such balance
flight for a Base flight which later becomes open, provided
that the result of the trade will not reduce the
pilot'sprojection below guarantee for time flown within a
month. A pilot using this provision will be handled in
accordance with the same procedures of the CBA as apply to a
category A-1 balance.
3. Regional Base pilots involuntarily balanced by the Company,
other than at his/her Bid Award Airport, shall, upon
request, receive Class B transportation over the lines of
the Company, between any Base airport (as agreed to pursuant
to paragraph A(2) above) within his/her region and the
originating city of the balance flight.
4. BLIP may be awarded to those pilots assigned to the Regional
Base, and will be awarded in seniority order for trip(s)
within the Regional Base only.
5. Mutual trade(s) between pilots at a Base will be permitted
provided that such trade(s) do not create more than 45
minutes of make-up guarantee for either pilot.
6. Assigned domicile pilots may not BLIP or balance on a Base
flight.
7. Base pilots who are non-routine will be handled under the
jurisdiction of Operational Planning and in accordance with
the away from domicile schedule policy contained in the
Flight Operations Policy Manual.
(E) GENERAL
1. The Company shall provide Base pilots with mail boxes at
their Bid Award Airport and suitable free parking. Base
pilots will have access to obtain passes.
214
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LETTER XIV - REGIONAL PILOT BASE AGREEMENT, cont.
2. The provisions of Section 13 of the CBA do not apply to
movement to and from a Base.
3. All duty limitations, trip credit, duty credit and expenses
for flights originating and terminating at a Base airport
shall be based on report and release times at such airports.
4. For purposes of Section 8(D) of the CBA, a Base pilot's Bid
Award Airport shall be considered the same as if it were the
pilot's domicile. The provisions of Section 7(A) (5) of the
CBA apply at a Base to the application of Section 8(D) but
do not apply to movement between Base airports (those
airports agreed upon pursuant to paragraph A(2) above)
occasioned by balancing, trading or BLIP.
5. Management flying at a Base will be handled in accordance
with Section 5(G) of the CBA.
6. Pilots will be awarded vacation within his/her permanent
domicile and in accordance with Section 14 of the CBA.
7. Except as specifically referenced above, this letter does
not alter the application of Letters of Agreement XIII and
XXII.
8. When a Base pilot is required by the Company to travel to
his/her domicile for purposes of attending a meeting or
grievance hearing, he/she shall be provided with positive
space coach transportation (Class 5) over TWA routes between
any Base airport (as agreed to pursuant to paragraph A(2)
above) within his/her region and the domicile.
This agreement is entered into as a test which shall run for a minimum
of six (6) months from the implementation of the first Base assignment
period. The test may be terminated by either the Association or the
Company at the conclusion of the six (6) month period or at anytime
thereafter by providing the other party a minimum of ninety (90) days
written notice. Notwithstanding the foregoing, the test may be
terminated at any time by mutual agreement between the Association and
the Company.
If the foregoing correctly reflects our mutual agreement, please sign in
the place provided.
Very truly yours,
/s/
Alan R. English
Director, Labor Relations
AGREED AND ACCEPTED
/s/
Keith A. Bounds
WITNESSED BY:
/s/
Marlyn Moen, Member
Negotiating Committee
/s/
Larry Balliet, Member
Negotiating Committee
cc: L. M. Hecker
W. L. Schecter
215
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<PAGE>
LETTER XV
July 6, 1998
Capt. Douglas J. Gabel, Chairman
TWA MEC Negotiating Committee
Air Line Pilots Association
3221 McKelvey Road
Suite 200
Bridgeton, Missouri 63044
Dear Capt. Gabel:
With regard to your inquiry referencing TWA's Engineering Watch, please
be advised that the logbook will have a placard with a brief description
of all items under MCI Engineering Control.
Very truly yours,
/s/
Terry L. Hayes
Director - Labor Relations
216
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<PAGE>
LETTER XVI - TRANS STATES EXCEPTION LETTER
LETTER OF AGREEMENT
BETWEEN
TRANS WORLD AIRLINES, INC.
AND
THE AIR LINE PILOTS
IN THE SERVICE OF
TRANS WORLD AIRLINES, INC.
AS REPRESENTED BY
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns
(hereinafter "the Company" or "TWA") and the Air Line Pilots in the
service of TWA as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL (hereinafter known as the "Association" or "ALPA").
WHEREAS Section 1(G) of the TWA-ALPA Agreement effective September 1,
1994 ("the Agreement") prohibits TWA from entering into code share
agreements with any United States flag carrier that operates aircraft
with a maximum seating capacity in excess of 60 seats; and
WHEREAS TWA has entered into a code sharing agreement with Trans States
Airlines, Inc. ("TSA"), a United States flag carrier; and
WHEREAS the Association has recently discovered that TSA has operated
three (3) ATR aircraft with a seating capacity in excess of 60 seats
from a date prior to the September 1, 1994 amendments to Section 1; and
WHEREAS TSA continues to operate the same three (3) ATR aircraft
mentioned above; and
WHEREAS TSA's continued operation of the same three (3) ATR aircraft
mentioned above does not qualify for one of the limited exemptions of
Section 1(G)(4) of the Agreement;
NOW, THEREFORE TWA and the Association have agreed upon a limited
further exemption to the provisions of Section 1(G) of the Agreement as
follows:
1. There shall be no violation of the Agreement by the operation by
TSA of three ATR aircraft identified by aircraft number N721TE,
N722TE, and N723TE.
2. This Letter of Agreement ("Letter") is without prejudice to the
Association's rights to strictly enforce any and all of the
provisions of Section 1 of the Agreement at any time, except with
respect to the limited exemption stated herein.
3. This Letter is effective upon execution and shall be retroactive
to September 1, 1994.
SO AGREED.
For the Company: For the Association:
/s/ /s/
Philip Whitcomb William F. Compton, Chairman
Staff Vice President TWA Master Executive Council
Labor Relations Dated: 9/5/95
Dated: 9/5/95 /s/
J. Randolph Babbitt, President
Dated: 9/5/95
217
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<PAGE>
LETTER XVII
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, as of
September 1, 1998, by and between TRANS WORLD AIRLINES, INC., its
successors or assigns (hereinafter known as the "Company" or "TWA") and
the Air Line Pilots in the service of TWA as represented by the AIR LINE
PILOTS ASSOCIATION, INTERNATIONAL (hereinafter known as the
"Association" or "ALPA").
WHEREAS, the Company and ALPA negotiated a Term Sheet (the "Term Sheet")
as part of the July 11, 1998 Tentative Agreement ("the New Basic
Agreement") which has been ratified by both ALPA and the Company; and
WHEREAS the Term Sheet states the Company agrees to pay ALPA, for the
benefit of Air Line Pilots in the service of TWA who are on the
seniority list as of the date the New Basic Agreement is executed and
who are actively employed (not on any type of leave status) during the
calendar quarter preceding a Payment Date (as defined below), either a
cash bonus of two million seven hundred fifty thousand ($2,750,000)
dollars or two hundred fifty thousand (250,000) shares of Common Stock
of the Company for four (4) consecutive calendar quarters beginning in
the second quarter of 1999.
NOW THEREFORE it is hereby agreed as follows:
1. General
A. Payments or distributions made in accordance with this
Letter of Agreement shall not be deemed to be wages for
purposes of benefits, DAP, supplemental or any other
contributions or benefits the Company is obligated to pay or
provide to Air Line Pilots in the service of TWA. All
appropriate amendments shall be made as necessary to
applicable plans concerning such payments or distributions.
B. Payments or distributions shall be made in arrears in four
consecutive quarterly payments with the first such payment
or distribution to be made in the second calendar quarter,
1999 as provided herein.
218
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<PAGE>
LETTER XVII, cont.
C. On an applicable Payment Date (as described below) the
Company may, in its sole discretion, satisfy the obligation
described herein by either (1) issuing, in the aggregate,
two hundred fifty thousand (250,000) shares of Common Stock
of the Company or (2) paying an amount equal to two million
seven hundred fifty thousand ($2,750,000) dollars less
applicable withholding and payroll taxes to Eligible Pilots
as directed by ALPA, provided that in the event the Company
elects to issue stock, no fractional shares will be
distributed.
D. "Eligible Pilots" shall be pilots who are on the TWA Pilots
System Seniority List on September 1, 1998 and who are
actively employed (not on any type of leave status) during
the calendar quarter immediately preceding an applicable
Payment Date. It shall also include pilots who retire or
voluntarily resign during the calendar quarter immediately
preceding an applicable Payment Date; provided that any
pilots who retire or voluntarily resign during any quarter
must have actively worked at least one (1) day during such
quarter.
2. Distribution
A. Within fifteen (15) business days following the end of each
calendar quarter in 1999, the Company will notify the
Association of the form of payment (cash or Common Stock)
the Company will use.
B. Common Stock Option
(1) Common Stock issued pursuant to this agreement shall
be valued at the fair market value on the date of
distribution and shall be subject to all applicable
withholding and taxes at statutory rates.
(2) Common Stock issued pursuant to this agreement shall
be registered on Form S-8 or any comparable form and
listed on the American Stock Exchange (or such other
exchange on which the Company's Common Stock is
registered on such Payment Date).
(3) Within thirty (30) calendar days following receipt of
the Company's notice in paragraph 2.A. above that the
Company will issue its Common Stock, ALPA shall, in
its sole discretion, direct the distribution of the
two hundred fifty thousand (250,000) shares of Common
Stock among the Eligible Pilots. Such distribution
list shall include the name, address, social security
number and number of shares for each Eligible Pilot
and shall be provided to the Company on either
magnetic or electronic media. The Company shall have
the right to review such distribution for purposes of
compliance with this Letter of Agreement. No
fractional shares will be distributed and all such
share amounts shall be rounded to the nearest whole
share.
(4) The Company shall use its best efforts to distribute
the shares of Common Stock to the Eligible Pilots
219
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<PAGE>
LETTER XVII, cont.
within thirty (30) calendar days following receipt of
the Association's distribution list in paragraph
2.B.(3) above (the "Stock Payment Date"). In the
event such Stock Payment Date falls on a weekend or
holiday, the distributions shall be made on the next
business day.
C. Cash Option
(1) Cash payments made pursuant to this agreement shall be
subject to applicable withholding and taxes at
statutory rates.
(2) Within thirty (30) calendar days following receipt of
the Company's notice in paragraph 2.A. above that the
Company will make cash payments, ALPA shall, in its
sole discretion, direct the distribution of the two
million seven hundred fifty thousand dollars
($2,750,000) among the Eligible Pilots. Such
distribution list shall include the name, address,
social security number and payment amount for each
Eligible Pilot and shall be provided to the Company on
either magnetic or electronic media. The Company shall
have the right to review such distribution for
purposes of compliance with this Letter of Agreement.
(3) The Company shall make payment to the Eligible Pilots
within thirty (30) calendar days following receipt of
the Association's distribution list in paragraph
2.C.(2) above (the "Cash Payment Date"). In the event
such Cash Payment Date falls on a weekend or holiday,
payment shall be made on the next business day.
3. This Letter of Agreement is effective September 1, 1998 and shall
expire on the later of May 1, 2000 or sixty (60) days after the
date all distributions under paragraph 2 have been made. This
Letter of Agreement shall not be subject to the status quo
provisions of the Railway Labor Act.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ----------------------------------- ----------------------------------
Terry L. Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ----------------------------------- ----------------------------------
Philip B. Whitcomb J. A. Chronic, Chairman
Vice President TWA MEC
Labor Relations
/s/
----------------------------------
J. Randolph Babbitt,
President
Dated: September 1, 1998
220
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<PAGE>
LETTER XVIII
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns ("the
Company" or "TWA") and the Air Line Pilots in the service of TWA as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL ("the
Association" or "ALPA").
WHEREAS, the Company and the Association have agreed that this Letter of
Agreement shall replace and supersede Letter XI of the 1994 Basic
Agreement, signed by Renee E. Kamm.
THEREFORE, IT IS AGREED AS FOLLOWS:
With regard to the application of Section 20 of the Agreement, the
Company and the Association agree that active pilots on the TWA Pilot
Seniority List as of March 15, 1985, shall not be furloughed except
where said furlough is occasioned by a reduction in the Company's
annualized level of block hours of flying below 469,000 hours, or by any
of the reasons enumerated in Section 20(D)(6) of said Agreement.
Very truly yours,
/s/
Terry L. Hayes
Director, Labor Relations
AGREED AND ACCEPTED
/s/
- - -------------------------------------
By: Douglas J.Gabel - Chairman
TWA MEC Negotiating Committee
Dated: July 11, 1998
221
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<PAGE>
LETTER XIX
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns ("the
Company" or "TWA") and the Air Line Pilots in the service of TWA as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL ("the
Association" or "ALPA").
WHEREAS ALPA and TWA have reached agreement on the terms of a New Basic
Agreement, and
WHEREAS TWA plans to retire its entire B727 fleet within the next
several years; and
WHEREAS the B727 is the only TWA equipment type which requires Flight
Engineers; and
WHEREAS there are currently TWA pilots who can only be employed as B727
Flight Engineers by reason of regulatory requirement or contractual
restriction; and
WHEREAS TWA and ALPA have reached agreement as to the proper procedures
to be employed in the event that TWA no longer maintains the Flight
Engineer status.
NOW THEREFORE it is hereby agreed as follows:
1. In the event that the Company determines that there is an excess
of Flight Engineers the Company shall issue a displacement
bulletin in accordance with Section 19 of the New Basic Agreement.
All excess B727 Flight Engineers who meet regulatory requirements
for Captain or First Officer flying, and are not contractually
restricted from such status, shall be displaced into First Officer
vacancies. All excess B727 Flight Engineers who do not meet
regulatory requirements for Captain or First Officer flying or who
are contractually restricted from such status shall be displaced
into a no-bid status.
2. A pilot displaced into a no-bid status pursuant to paragraph 1.
above shall be notified by the Company within three (3) business
days of the following options:
A. Retirement.
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LETTER XIX, cont.
B. Unpaid personal leave of absence on a month by month
basis for up to five (5) years.
C. Application for any open TWA position pursuant to
Section 18(D)(6) of the New Basic Agreement. (TWA
shall not be obligated to offer employment to any such
applicant).
D. Voluntary resignation.
In the absence of an affirmative election, such pilot shall
be deemed to have elected an upaid personal leave of absence
(b. above).
3. The following shall apply when a pilot chooses the paragraph
2.B. option above:
A. Each such pilot who maintains a Standing Bid shall be
notified by certified mail of any bid award to which
his/her seniority entitles him/her, subject to
regulatory requirements and contractual restrictions,
if any. If the pilot does not accept and report for
such position within thirty (30) days of his/her
receipt, the pilot shall be deemed to have voluntarily
resigned.
B. During the period of such leave of absence, such
pilots' Group Benefit and Pass/Reduced Fare
transportation entitlement, if any, shall be the same
as for any other pilot on personal leave pursuant to
Section 18(A) of the New Basic Agreement.
C. Pilots on leave shall have access to the grievance
procedure pursuant to Section 21(B) of the New Basic
Agreement to enforce the provisions of this Letter of
Agreement.
4. The provisions of paragraphs 1, 2 and 3 of this Letter of
Agreement shall not apply in the event that TWA places into
revenue service an equipment type other than the B727, prior
to the retirement of all TWA B727 aircraft, which requires a
Flight Engineer.
5. Upon execution and ratification of the New Basic Agreement,
this Letter of Agreement shall run in full force and effect
concurrently with the New Basic Agreement.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ---------------------------------- ------------------------------
Terry Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ---------------------------------- ------------------------------
James F. Martin, J. A. Chronic, Chairman
Sr. Vice President Human Resources TWA MEC
/s/
------------------------------
J. Randolph Babbitt,
Dated: July 11, 1998 President
223
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<PAGE>
LETTER XX
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TWA as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL (hereinafter known as the "Association" or "ALPA").
WHEREAS the Company and the Association have negotiated a Letter of
Agreement covering the Company's Training Center Seniority List Check
Airmen/Simulator Instructors (the "INS LOA") to run concurrently with
the Basic Agreement effective September 1, 1998.
NOW, THEREFORE it is hereby agreed as follows:
1. General
A. This Letter of Agreement ("the INS LOA") shall apply to
pilots under the TWA-ALPA Agreement effective September 1,
1998 ("Basic Agreement") who are currently assigned to serve
as TWA's Training Center Seniority List Check
Airmen/Simulator Instructors ("INS pilots") or who become
INS pilots.
B. Pilots interested in selection as an INS pilot must be
willing to commit to twenty-four (24) months in the service
of the training department. Pilots interested in becoming an
INS pilot must present a resume, including a memo of
application supporting their qualifications, to the Managing
Director-Flight Operations Training who will select the INS
pilot instructors.
C. The INS pilot job description includes such duties and
assignments as required by the Managing Director-Flight
Operations Training including simulator flight instruction
for Captains, First Officers, Flight Engineers and new-hire
pilots involving initial, transition, upgrade, proficiency
and/or requalification training, differences training, check
airmen simulator training, fill-in crew member for simulator
training, and certification checks.
Additionally, INS pilots may at his/her option be assigned
such duties as: ground school classroom instruction,
224
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LETTER XX, cont.
contract training, aircraft test flights and
temporary/special assignments.
D. Applicability of the Basic Agreement and Letters of
Agreement
(1) All provisions of Section 1 apply to INS pilots. Other
provisions of the Basic Agreement shall only apply to
INS pilots as expressly set forth in this INS Letter
of Agreement.
(2) Letters of Agreement (LOA) to the Basic Agreement
apply to INS pilots equally as "pilots", according to
the terms of each LOA. When the term status, domicile,
equipment or category is used in an LOA, it shall
apply to an individual INS pilot according to his/her
category bid award.
(3) An INS pilot is a "pilot" for all purposes under
Sections 2, 3, 17(B), 23, 24 and 27 of the Basic
Agreement. Section 2(S) applies to Captain INS pilots
(as defined herein) as "Captains".
(4) Each INS pilot shall retain his/her category bid award
under the Basic Agreement when assigned to a TWA
Training Center however, INS pilots shall not be
counted in a category for purposes of Sections
10(B)(7) and 12(A)(1) of the Basic Agreement. An INS
pilot's category bid award shall be subject at all
times to Sections 19 and 31(I), 31(J), 31(K), 31(P),
and 31(R) of the Basic Agreement.
An INS pilot shall be allowed to bid and qualify in
another category in accordance with seniority and in
conjunction with system bid messages. An INS pilot who
is awarded another category bid award and chooses to
remain an INS pilot shall have his/her category bid
vacancy re-awarded, but shall retain all rights to the
qualification training in seniority order and to the
category bid award. In instances when such
qualification is delayed by the Company, then such
pilot shall be deemed to have attained such
qualification for pay purposes under the Basic
Agreement and will not be returned to service until
qualified to fulfill his/her category bid award.
(5) An INS pilot shall be considered a non-bid run holder
for purposes of obtaining additional flying and OFR
under Section 9 of the Agreement.
(6) Sections 21 and 22 apply to the interpretation and
enforcement of this INS LOA. Section 21(A) applies in
the instance of discipline or discharge from the
Company of an INS pilot. When an INS pilot is removed
from service under Section 21(A), he/she shall
continue to receive the applicable guarantee under
this INS LOA for the remainder of the bid month. For
any subsequent period the INS pilot is withheld from
service, the Company may apply either the applicable
INS guarantee provision or the pay provisions of
Section 21(A).
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LETTER XX, cont.
(7) An INS pilot may be returned by the Company to his/her
category bid award under the Basic Agreement for any
reason. Such action shall not be considered as
discipline and will not be subject to Sections 21(A)
or 21(B) of the Basic Agreement. The INS pilot shall
be advised by the fifth (5th) of the previous month of
such return in order to exercise his/her monthly bid
prerogatives pursuant to Section 9(B) of the Basic
Agreement.
An INS pilot may elect to return to his/her category
bid award under the Basic Agreement after fulfilling
his/her twenty-four (24) month commitment. In such
cases the INS pilot shall give at least one (1)
month's notice.
(8) A pilot who may be utilized as an INS shall be
notified by the fifth (5th) of the previous month of
his/her INS status.
(9) An INS pilot is a "regularly assigned pilot" for
purposes of Section 25 of the Basic Agreement and is
covered by Section 26 of the Basic Agreement.
(10) INS pilots are "employees" within the meaning of
Letter XIII of the Basic Agreement.
E. An INS pilot who fails to qualify or maintain qualification
as an INS pilot shall be returned to his/her category bid
award under the Basic Agreement.
2. Definitions
A. "Aircrew Program Designee" or "APD" means an INS pilot
designated by the Federal Aviation Administration to perform
airman certification checks.
B. "Equipment type" or "equipment" means one of the equipment
types defined by Section 31(X) and 31(FF) of the Basic
Agreement.
C. Flight Training Device ("FTD") means a non-motion simulator
e.g., Flight Management System Trainer ("FMST"), Cockpit
Procedures Trainer ("CPT") and Computer-based Training
("CBT").
D. "Instructor Classification" or "INS Classification" means
the INS pilot's instruction equipment type, instructor
status and training center domicile. For example,
SKT/767/CAP INS pilot (is a Captain INS pilot instructing on
the B757/B767/A321 at the St. Louis Training Center).
E. "Instructor Daily Rate" or "INS Daily Rate" is five hours
(5:00).
F. Instructor status
(1) A "Captain INS pilot" for compensation purposes and as
otherwise stated herein means an INS pilot who is
qualified and holds or is qualified and has held the
status of Captain under the Basic Agreement.
226
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LETTER XX, cont.
(2) A "First Officer INS pilot" for compensation purposes
and as otherwise stated herein means as INS pilot who
is qualified and holds or is qualified and has held
the status of First Officer under the Basic Agreement.
(3) A "Flight Engineer INS pilot" for compensation
purposes and as otherwise stated herein means an INS
pilot who has completed initial operating experience
as a Flight Engineer and holds at least the status of
Flight Engineer under the Basic Agreement.
G. "Monthly Guarantee" is the minimum number of hours to be
paid to INS pilots for each month or part of a month of
service, except when the INS pilot has vacation.
H. "Override" means an additional percentage of compensation
over and above the total monthly pay hours earned, not
including pay hours earned through additional flying and
OFR.
I. "Section 4 pay rate(s)" means the composite hourly pay rate
for INS pilots calculated at the longevity then prevailing
pursuant to Section 4(A) and 4(B)(2) of the Basic Agreement
by status as follows:
Instructor Status Section 4 Status
----------------- ----------------
Captain INS pilot Captain
First Officer INS pilot First Officer
Flight Engineer INS pilot Flight Engineer
J. "Training Center Domicile" means the Training Centers (e.g.
in St. Louis, including Flight Safety International, (SKT)
and JFK International Airport (JFT)).
K. The following terms shall have the same meaning under the
INS LOA as under the Basic Agreement:
"Additional Flying"
"Bid Month" or "month"
"Captain"
"Category", "Category Award" or
"Category Bid Award"
"Domestic"
"First Officer" or "F/O"
"Fixed Daily Rate" ("FDR")
"Flight Engineer" or "F/E"
"International"
"Longevity"
"Narrowbody"
"OFR" (formerly Enhanced Trip Option)
"Pilot"
"Seniority"
"Status"
"Trip Add System" (TAS)
"Volunteer Fly List" ("VFL")
3. Compensation for Base and Extra Workdays
A. The INS pilot shall receive a minimum monthly guarantee
equal to eighty-five hours (85:00).
227
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LETTER XX, cont.
B. INSs shall be paid the appropriate Section 4 composite pay,
subject to paragraph (C)(1) or (D) below.
C. Longevity Years Six and Beyond
(1) The INS pilot instructing in a Captain, First Officer
or Flight Engineer INS category shall receive Section
4 pay rates commensurate with his/her instructor
status and the equipment that he/she is instructing on
at the equipment rates then applicable under Section 4
of the Basic Agreement for the equipment type of
instruction (as set forth below), plus a pay override
of eight percent (8%).
Instructor Status Section 4 Pay Rate
----------------- ------------------
B747 Capt. Small Widebody Capt.
B747 F/O Small Widebody F/O
B747 F/E Narrowbody F/E
L10 Capt. Small Widebody Capt.
L10 F/O Small Widebody F/O
L10 F/E Narrowbody F/E
B757/B767/A321 Capt. Small Widebody Capt
B757/B767/A321 F/O Small Widebody F/O
Narrowbody Capt. Narrowbody Capt.
Narrowbody F/O Narrowbody F/O
B727 F/E Narrowbody F/E
(2) INS Flight Engineer with First Officer Qualification
The INS Flight Engineer pilot who is in pay longevity
years six (6) and beyond, and holds a First Officer
qualification on a TWA aircraft, shall receive First
Officer hourly pay rates commensurate with his/her pay
longevity on the equipment that he/she possesses a
First Officer qualification plus a pay override of
eight percent (8%).
D. Longevity Years 1-5
(1) The INS pilot who is in pay longevity years one (1)
through five (5), inclusive, shall be paid at sixth
(6th) year pay longevity rates on the equipment he/she
is instructing on plus a pay override of eight percent
(8%).
(2) First Officer Qualification
The INS pilot who is in pay longevity years one (1)
through five (5), inclusive, and holds a First Officer
qualification on a TWA aircraft, shall receive sixth
(6th) year First Officer hourly pay on the equipment
that he/she possesses a First Officer qualification
plus a pay override of eight percent (8%).
228
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LETTER XX, cont.
E. An INS pilot shall be compensated for extra work days at the
INS daily rate. Such compensation shall be above the monthly
guarantee.
4. INS Pilot Work Schedule
A. INS pilots will be assigned to an Instructor Classification
and will be provided with a full monthly schedule by the
twenty-fifth (25th) day of the month prior to the bid month.
INS classification monthly assignments will be posted and
promptly supplied to the System Schedule Committee.
The base work days for an INS pilot shall be sixteen (16)
total days in the month less duty free periods, which shall
in no case be fewer than fourteen (14) twenty-four hours
(24:00) duty free periods at their domicile/satellite. The
base work days for an INS pilot designated as APD shall be
fifteen (15) total days in the month less duty free periods,
which shall in no case be fewer than fifteen (15) twenty-
four hours (24:00) duty free periods at their
domicile/satellite. Additionally, one (1) of the base work
days of the INS pilot and the APD shall be used for a
proficiency trip in accordance with paragraph 4(F)(2).
B. The Company will staff sufficient INS pilots to cover all
known Training Center requirements within the normal
allotment of work days under 4(A) above.
C. If a pilot accepts assignment as an INS pilot at any time
other than the beginning of a bid month or is otherwise
unavailable for work as an INS pilot for a full month, the
INS pilot's work days will be prorated based on the number
of days available for scheduling.
D. An INS pilot work day shall consist of one (1) of the
following:
(1) A simulator session not greater in duration than as
identified in Section 6(A)(3)(e) of the Basic
Agreement, exclusive of briefing and debriefing
sessions not to exceed a total of two hour and thirty
minutes (2:30).
(2) Two (2) Flight Training Device(s) (FTD) periods each
consisting of a one hour (1:00) briefing and two hours
(2:00) FTD period separated by a fifteen minute (:15)
break.
(3) A day an INS pilot is assigned to a special
assignment.
(4) A day scheduled for a standards/instructor
meetings(s).
(5) A day in training to become or maintain currency as an
INS pilot (e.g., initial, CQT, ground school,
simulator, or appendix H flying) or training to
fulfill a category bid award pursuant to paragraph
1.D.(4) of this INS LOA.
229
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LETTER XX, cont.
(6) A day of temporary assignment duty including travel to
or from temporary assignment.
(7) Classroom instruction not to exceed six hours (6:00).
(8) Test flight(s) of aircraft. The maximum duty time for
all such flights within one duty period shall not
exceed thirteen hours (13:00) continuous duty without
crew consent.
(9) Three (3) oral exams or two (2) ratings performed by
an APD.
(10) With the INS pilot's concurrence, any combination of
the above listed activities combined in a single work
day so as not to exceed eight hours (8:00).
(11) A day scheduled for an annual or Continuing
Qualification Training line evaluation check and/or
international navigation check.
(12) A day when the only required activity is scheduled
travel to or from a temporary assignment.
E. Additional Schedule Rules
(1) If an INS pilot is scheduled for a work day as defined
in paragraph 4.D. above, and such activity is canceled
or interrupted after the work day commences, the INS
pilot may be reassigned in accordance with paragraph
4.D.(10) above.
(2) Sets of work days will be separated by twenty-four
hour (24:00) duty free periods.
(3) INS pilots will submit their requests for duty free
periods, extra work days and other special days off
for the following month by the twelfth (12th) day of
the current month. Once duty free periods have been
awarded, any change to such duty-free periods will
require the consent of the INS pilot. INS pilot work
schedules will be available in CAMS. An INS pilot may
designate as inviolate ("golden") one block of
consecutive duty-free twenty-four hour (24:00)
periods, not to exceed six (6) periods.
(4) An INS pilot shall not be scheduled for more than five
(5) consecutive work days. When an INS pilot is
scheduled for five (5) work days in a row, he/she
shall not be scheduled for an aircraft test flight on
the fifth day.
(5) An INS pilot shall not be scheduled for more than nine
(9) work days if there is only one (1) intervening
duty-free period between sets of work days.
(6) It is the INS pilot's responsibility to okay his/her
daily schedule with the Training Center Scheduling
Department. If the schedule is subsequently changed it
is the responsibility of the Training Center
Scheduling Department to notify the INS pilot of the
change.
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LETTER XX, cont.
(7) An INS pilot may indicate, along with the request for
duty-free periods as set forth in paragraph E.(3),
his/her availability for extra work day(s) during any
block of duty-free periods or during any scheduled
vacation period.
(a) All extra work day(s) assignments shall be
offered in seniority order within an Instructor
classification except when the Company
determines that student needs dictate otherwise.
(b) An INS pilot awarded an extra work day will be
compensated at the instructor daily rate and
shall be paid above the INS guarantee.
(c) An INS pilot scheduled for such extra work
day(s) will be paid for the extra work day(s)
regardless if actually utilized.
(d) After the INS pilot work schedules are
published, if the need arises for an extra work
day(s), an INS pilot who has indicated his/her
availability will be offered such extra work
day(s) in seniority order. If the requirement
for extra work day(s) still exists thereafter,
such extra work day(s) will be offered to
qualified INS pilot(s) in seniority order.
F. Miscellaneous
(1) Temporary/Special Assignments
(a) The Company may offer INS pilots temporary
assignments or duty away from his/her assigned
training center domicile. For such assignments,
INS pilot lodging facilities shall be at
existing facilities for domestic lodging in
accordance with Section 7(A)(3) of the Basic
Agreement or, where no lodging facility has been
selected or the proximity of the existing
lodging facility is such that utilizing existing
facilities would hamper efficient completion of
the temporary assignment, then the hotel
selected shall be comparable in quality and
comfort to the hotel selected in conformance
with Section 7 of the Basic Agreement.
International lodging facilities shall be in
accordance with Section 7(B) of the Basic
Agreement.
(b) The Company shall provide round-trip class B
transportation to and from such temporary
assignments. In addition, an INS pilot who
accepts a temporary assignment duty shall
receive round trip ACM-13 privileges from and to
the temporary assignment location during his/her
duty free period within the temporary
assignment.
The Company shall provide the INS pilot one (1)
travel day before or after such temporary
231
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LETTER XX, cont.
assignment. If the location and/or work schedule
of the temporary assignment prevents the INS
pilot from both traveling to the assignment on
the first day of scheduled instruction and
returning on the last day of scheduled
instruction, the INS pilot shall be entitled to
two (2) travel days for that single temporary
assignment.
(c) A single INS pilot temporary assignment shall
consist of no more than (including days off
within the assignment but excluding travel
days):
(i) One (1) standard training program or
curriculum (i.e. initial, recurrent,
requalification, transition, upgrade, or
differences training) with one (1) set of
students (although instructors may switch
students for final checkrides), not to
exceed eleven (11) consecutive calendar
days; except that, if loft training is
required as part of the training program,
the temporary assignment shall not exceed
fifteen (15) consecutive calendar days.
(ii) If the temporary assignment is composed of
checkrides/rating rides only, the
temporary assignment shall not exceed
eleven (11) consecutive calendar days.
(d) The Company may offer an INS pilot a special
assignment to operate an aircraft test flight.
The INS pilot may decline the test flight
assignment for personal reasons. Such flights
will comply with all applicable Federal Air
Regulations. If necessary, Class B
transportation will be provided to and from the
test flight activity in accordance with Section
(3) of the Basic Agreement.
(2) INS pilots are required to fly a minimum of one (1)
trip every ninety (90) days ("proficiency trip") on
the equipment on which he/she is instructing to
maintain his/her qualifications and in compliance with
FAR 121, Appendix H. The INS pilot who is instructing
in a category that is different from his/her line
category shall utilize the provisions of Section 5(E)
of the Agreement to acquire such proficiency trip. An
INS pilot may utilize a trip departing any domicile to
accomplish such proficiency trip including during the
INS pilot's vacation period. If necessary Class B
transportation will be provided.
In accordance with paragraph 4.A. above, an INS pilot
and the APD will utilize one of his/her work days for
such proficiency trip. A proficiency trip flown during
the pilot's vacation period will not be considered a
work day and will not be paid above the INS guarantee.
232
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LETTER XX, cont.
Additionally, all such flying under this paragraph
F.(2) shall not be considered additional flying or OFR
unless it is flown in the INS pilot's category bid
award and is assigned in accordance with additional
flying or OFR under the Basic Agreement.
5. Additional Flying/OFR
A. An INS pilot may access open time only in accordance with
the provisions of Section 9(F), (H) and (J) of the Basic
Agreement within his/her category bid award. Such
additional/OFR flying shall only be flown during his/her
scheduled days off or vacation.
B. Additional flying and OFR will be paid at the hourly rate of
pay commensurate with the INS pilot's category bid award and
shall be paid above INS guarantee. INS pilot override and/or
longevity increase in paragraph 3.C. and D. above shall not
be applied to such flying. Except as provided in this Letter
of Agreement, all provisions of the Basic Agreement that
pertain to a category bid pilot shall apply to an INS pilot
when the INS pilot is flying an additional flying or OFR
trip.
C. No INS pilot shall be required to perform additional flying.
Sections 9(F)(4) and 9(K)(6)of the Basic Agreement shall
apply equally to INS pilots as other pilots.
D. An INS pilot may acquire an OFR trip(s). However an INS
pilot may not offer a trip through OFR. A selected trip must
not conflict with any existing assignments and is subject to
Section 11 of the Basic Agreement.
6. Expenses
A. Expenses for additional flying and OFR shall be in
accordance with Section 7(A) and 7(B) of the Basic
Agreement.
B. When assigned to other temporary duty or assignment away
from the INS pilot's Training Center domicile, INS pilots
shall receive reasonable and actual expenses.
7. Seniority and Leaves of Absence
A. INS pilots shall continue to accrue seniority and longevity
under the Basic Agreement.
B. Leaves of absence for INS pilots are permitted only after
the INS pilot returns to service under the Basic Agreement
and pursuant to Section 18 of the Basic Agreement.
C. The furlough of any pilot(s), including an INS pilot(s)
shall be pursuant to Section 20 of the Basic Agreement. An
INS pilot returning to service under the Basic Agreement
from a Training Center domicile shall not be considered
furloughed from such Training Center domicile.
233
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LETTER XX, cont.
8. Vacation and Urgent Personal Business
A. Pay and credit for an INS pilot on vacation shall be at the
fixed daily rate.
B. Vacation eligibility and entitlement shall be in accordance
with Section 14(A) and 14(B) respectively of the Basic
Agreement.
C. Vacation Bidding
INS pilots shall be covered by sections 14(D), 14(E), 14(F),
14(G), 14(H) and 14(I) of the Basic Agreement except for
such purposes, the following shall apply:
(1) The term "INS classification" replaces "category".
(2) The date "September 30 of the current year" replaces
"January 1 of the year the vacation is to be taken".
(3) The term "Training Center domicile" replaces
"domicile".
(4) The term "Managing Director-Flight Operations
Training" replaces "Regional Chief Pilot".
(5) The term "instructor status" replaces "status".
D. An INS pilot may offer to sell back his/her vacation to the
Company pursuant to Section 14(I) of the Basic Agreement
except that the INS pilot shall be paid at the fixed daily
rate.
E. The Urgent Personal Business provisions defined in Section 2
of the Basic Agreement shall be available to INS pilots
except that compensation for such day(s) shall be at the
fixed daily rate.
9. Sick Leave
Sick leave shall be paid, and the INS pilot's Section 15 Sick
Leave bank shall be charged, at the instructor daily rate when the
INS pilot is unable to report for an INS pilot work day as a
result of actual sickness or injury.
10. Agreement Precedence
The INS LOA represents the exclusive pay and work rules applicable
to INS pilots and take precedence over any prior existing letters,
policy statements, memoranda, other writings or unwritten
practices.
11. This INS LOA is subject to MEC/membership ratification/rejection
("ratification").
234
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LETTER XX, cont.
12. Duration
Upon ratification, this INS LOA shall be effective on September 1,
1998 and shall thereafter run in full force and effect
concurrently with the Basic Agreement.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ------------------------------ ------------------------------
Terry L. Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ------------------------------ ------------------------------
Philip B. Whitcomb J. A. Chronic, Chairman
Vice President TWA MEC
Labor Relations
/s/
------------------------------
J. Randolph Babbitt,
President
Dated: July 7, 1998
235
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<PAGE>
LETTER XXI
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TWA as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL (hereinafter known as the "Association" or "ALPA").
WHEREAS the Company and the Association have negotiated a Letter of
Agreement covering the Company's Line Instructor Pilots and Line
Standards Pilots (the "LIP/LSP LOA") to run concurrently with the Basic
Agreement effective September 1, 1998;
NOW THEREFORE the Company and the Association hereby agree as follows:
1. Line Instructor Pilots ("LIP") and Line Standards Pilots ("LSP")
are "pilots" covered by the TWA-ALPA Agreement effective September
1, 1998 (herein "Basic Agreement"). The Basic Agreement shall
apply to the LIP and LSP except as specifically provided herein.
2. This LIP-LSP LOA supersedes and replaces all previous agreements
relating to TWA's Line Check Airmen.
3. LIPs and LSPs, except as provided herein, shall perform line
checks, evaluations and operating experience only in his/her
category bid award. Additionally, LIPs and LSPs who hold Captain
bid awards under the Basic Agreement may line check, evaluate and
perform operating experience with First Officers and First Officer
trainees.
WHEREAS the Company and the Association have agreed upon pay and work
rules for TWA Line Check Airmen/Instructors;
NOW, THEREFORE it is hereby agreed that the following provisions shall
apply to LIPs:
1. Compensation for Base and Extra Workdays
A. The LIP shall receive a minimum monthly guarantee equal to
eighty-five hours (85:00)in his/her category, plus a pay
override of eight percent (8%).
236
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<PAGE>
LETTER XXI, cont.
B. LIPs shall be paid the appropriate Section 4 composite pay,
including international override if applicable, and subject
to paragraph (1)(C) below.
C. Longevity Years 1-5
(1) The LIP who is in pay longevity years one (1) through
five (5), inclusive, shall be paid at sixth (6th) year
pay longevity rates on the equipment he/she is
instructing on plus a pay override of eight percent
(8%).
(2) First Officer Qualification
The LIP who is in pay longevity years one (1) through
five (5), inclusive, and holds a First Officer
qualification on a TWA aircraft, shall receive sixth
(6th) year First Officer composite pay on the
equipment that he/she possesses a First Officer
qualification plus a pay override of eight percent
(8%).
D. When the LIP is required to occupy the ACM seat while line
checking or evaluating a pilot(s)/flight engineer(s), the
LIP shall receive full pay and credit for all flight
activity.
E. Any non-flying activities performed by a LIP on a day in
addition to the base work hours as provided in paragraph
(3)(A) below shall be considered an extra work day and paid
above guarantee at five hours (5:00) per day in accordance
with paragraph (1)(B) above.
F. Any flying activities performed by a LIP while performing
operating experience and/or line checking or evaluating a
pilot/flight engineer in addition to the base work hours as
provided in paragraph (3)(A) below shall be paid above
guarantee in accordance with paragraph (1)(B) above.
G. Pilots in training to become a LIP shall receive five hours
(5:00) pay and credit per day for each day of non-flying
activities commensurate with his/her pay longevity for
his/her current category bid award. Such activity shall not
be subject to the eight percent (8%) override.
2. First Officer Bidding and Qualifications for LIP Flight Engineers.
A LIP Flight Engineer shall be allowed to qualify as a First
Officer on a TWA aircraft in accordance with seniority and in
conjunction with system bid messages. A LIP Flight Engineer who is
awarded a First Officer category bid award, and chooses to remain
a LIP Flight Engineer, shall have his/her First Officer category
bid award re-awarded, but shall retain all rights to the First
Officer training in seniority order and the bid award. In
instances when such qualification(s) is delayed by the Company,
then such pilot shall be deemed to have attained First Officer
qualification for pay purposes in paragraph (1)(B) or (1)(C)
above, whichever is greater.
237
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<PAGE>
LETTER XXI, cont.
3. LIP Work Schedule
A. The work month of a LIP shall equal his/her initial bid run
projection. With the approval of the Regional Chief Pilot,
the LIP may exceed the average line value (ALV) for his/her
category when performing operating experience and/or line
checking and evaluating activities.
B. Except as provided in paragraph (4)(A) below and
notwithstanding Section 9(D) of the Basic Agreement, if a
LIP monthly projection falls below his/her category
guarantee, he/she may be required to perform LIP duties up
to the base credit hours of his/her initial bid run
projection.
C. A LIP work day may include attending a required Standards
Meeting. Such activity will be compensated at five hours
(5:00) pay and credit.
4. Additional Schedule Rules
A. The LIP may be restricted from using BLIP and/or offering a
trip into open time (OFR) when a pilot/flight engineer is
scheduled to receive operating experience with the LIP or to
be line checked or evaluated by the LIP. When the LIP trip
offered into OFR is dropped, the projected pay and credit,
and the minimum guarantee of the offering pilot will be
reduced by the amount of the pay and credit hours of the
dropped trip. The LIP shall not be subject to balance as a
result of such dropped trip.
B. With the approval of the Regional Chief Pilot, a LIP may
remain "on LIP status" for a period of six (6) months
without interruption.
5. Additional/OFR Flying
A. The LIP may access OFR and additional flying through the
Trip Add System (TAS) and/or the Volunteer Fly List (VFL) in
accordance with Section 9 of the Basic Agreement.
B. Additional flying, through TAS and/or VFL, and trips
obtained through OFR shall offset the eighty-five hour
(85:00) guarantee. The LIP will receive the eight percent
(8%) pay override above the eighty-five (85) hour guarantee
only when the following events occur:
(1) The LIP is performing operating experience and/or line
checking or evaluating a pilot/flight engineer; and
(2) The LIP has performed actual services equivalent to
eighty-five (85) hours.
6. The LIP shall be considered a "bid run pilot" for all other
purposes under the Basic Agreement and shall be considered a
"regularly assigned pilot" for purposes of Section 25 of the Basic
Agreement.
238
<PAGE>
<PAGE>
LETTER XXI, cont.
WHEREAS the Company and the Association have agreed upon pay and work
rules for TWA Line Standards Pilots;
NOW, THEREFORE it is hereby agreed that the following provisions shall
apply to LSPs:
1. Compensation for Base and Extra Workdays
A. The LSP shall receive a minimum monthly guarantee equal to
eighty-five hours (85:00) in his/her category, plus eight
percent (8%) pay override.
B. LSPs shall be paid the appropriate Section 4 composite pay,
including international override if applicable, and subject
to paragraph (1)(C) below.
C. Longevity Years 1-5
(1) The LSP who is in pay longevity years one (1) through
five (5), inclusive, shall be paid at sixth (6th) year
pay longevity rates on the equipment he/she is
instructing on plus a pay override of eight percent
(8%).
(2) First Officer Qualification
The LSP who is in pay longevity years one (1) through
five (5), inclusive, and holds a First Officer
qualification on a TWA aircraft, shall receive sixth
(6th) year First Officer composite pay on the
equipment that he/she possesses a First Officer
qualification plus a pay override of eight percent
(8%).
D. Any non-flying activities performed by a LSP on a day in
addition to the base work hours as provided in paragraph
(3)(A) below shall be an extra work day and paid above
guarantee at five hours (5:00) per day in accordance with
paragraph (1)(B) above.
E. Any flying activities performed by a LSP while performing
operating experience and/or line checking or evaluating a
pilot/flight engineer in addition to the base work hours as
provided in paragraph (3)(A) below shall be paid above
guarantee in accordance with paragraph (1)(B) above.
F. Pilots in training to become a LSP shall receive five hours
(5:00) pay and credit per day commensurate with his/her pay
longevity for his/her current category bid award. Such
activity shall not be subject to the eight percent (8%)
override.
G. When the LSP is required to occupy an ACM seat while line
checking or evaluating a pilot/flight engineer, the LSP
shall receive full pay and credit for all flight activity.
H. The activities in paragraph(s) (4)(A) and (5) below shall
not be restricted by the base month and shall be paid above
the LSP guarantee.
239
<PAGE>
<PAGE>
LETTER XXI, cont.
2. First Officer Bidding and Qualifications for LSP Flight Engineers.
A LSP Flight Engineer shall be allowed to qualify as a First
Officer on a TWA aircraft in accordance with seniority and in
conjunction with system bid messages. A LSP Flight Engineer who is
awarded a First Officer category bid award, and chooses to remain
a LSP Flight Engineer, shall have his/her First Officer category
bid award re-awarded, but shall retain all rights to the First
Officer training in seniority order and the bid award. In
instances when such qualification is delayed by the Company, then
such pilot shall be deemed to have attained First Officer
qualification for pay purposes in paragraph (1)(B) above.
3. LSP Work Schedule
A. The work month of the LSP shall equal ALV plus or minus five
hours (5:00). With the approval of the Regional Chief Pilot,
the LSP may exceed ALV when performing operating experience
and/or line checking activities.
B. A LSP work day may include attending a required Standards
Meeting. Such activity will be compensated at five hours
(5:00) pay and credit.
4. Additional Schedule Rules
A. The LSP may, with the approval of the Regional Chief Pilot
or the Assistant Regional Chief Pilot, utilize the
provisions of Section 5(E)(1) of the Basic Agreement.
B. The LSP will be restricted from using BLIP.
C. The LSP may access additional flying and OFR in accordance
with Section 9 of the Agreement.
D. With the approval of the Regional Chief Pilot, a LSP may
remain "on LSP status" for a period of six (6) months
without interruption.
5. Additional Compensation Rules
Additional flying and OFR shall offset the eighty-five hour
(85:00) guarantee. The LSP will receive the eight percent (8%) pay
override above the eighty-five hour (85:00) guarantee only when
the following events occur:
A. The LSP is performing operating experience and/or line
checking or evaluating a pilot/flight engineer; and
B. The LSP has performed actual services equivalent to eighty-
five hours (85:00).
6. Sick Leave
The definition of "instructor daily rate" of the Training Center
Check Airmen/Simulator Instructors Letter of Agreement shall apply
to this provision. Sick leave shall be paid, and the LSP Section
15 Sick Leave bank shall be charged, at the instructor daily rate
not to exceed eighty-five hours (85:00) when the LSP is unable to
240
<PAGE>
<PAGE>
LETTER XXI, cont.
report for a LSP work day as a result of actual sickness or
injury.
7. A LSP shall be considered a "non-bid run pilot" and not a "bid run
pilot" for all purposes under the Agreement. Additionally, LSP
shall be considered a "regularly assigned pilot" for purposes of
Section 25 of the Agreement.
Ratification and Duration
1. This LIP/LSP Letter of Agreement is subject to MEC and/or
membership ratification/rejection ("ratification").
2. Upon ratification, this LIP/LSP Letter of Agreement shall be
effective September 1, 1998 and shall thereafter run in full
force and effect concurrently with the Basic Agreement.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ------------------------------- --------------------------------
Terry L. Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ------------------------------- --------------------------------
Philip B. Whitcomb J. A. Chronic, Chairman
Vice President TWA MEC
Labor Relations
/s/
--------------------------------
J. Randolph Babbitt,
President
Dated: July 7, 1998
241
<PAGE>
<PAGE>
LETTER XXII
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TWA as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL (hereinafter known as the "Association" or "ALPA").
WHEREAS the Company and the Association have negotiated a Letter of
Agreement covering the Company's Training Center Seniority List Check
Airmen/Simulator Instructors (the "INS LOA").
NOW, THEREFORE it is hereby agreed as follows:
A. General
1. Upon ratification of the new CBA, the Company may employ not
more than twenty (20) non-seniority list simulator
instructors. Effective one (1) day prior to the amendable
date of the new CBA, the Company may employ a total of
thirty (30) non-seniority list simulator instructors.
2. Non-seniority list simulator instructors shall not perform
any flight duty as a crew member and shall not train pilots
in Company aircraft.
3. Non-seniority list simulator instructors must be trained by
and for TWA. However, non-seniority list simulator
instructors will not line check or evaluate TWA pilots.
4. All non-seniority list simulator instructors, including
former TWA pilots, shall be deemed management employees and
shall not be subject to the provisions of the Basic
Agreement or the INS LOA.
5. In the event TWA furloughs one or more pilots from the
System Seniority List, non-seniority list instructors shall
be restricted from simulator instruction for the duration of
the furlough.
242
<PAGE>
<PAGE>
LETTER XXII, cont.
B. Qualifications
1. Non-seniority list simulator instructors must possess the
minimum requirements set forth by the Federal Air
Regulations and the Company.
2. Non-seniority list simulator instructors must be rated or
rateable on the equipment to be utilized.
C. Former TWA employees who possess the requisite qualifications
shall have a preferential opportunity for an interview over non-
TWA applicants.
D. The Company shall not employ an outside contract training
Company/organization.
E. Upon execution, this Letter of Agreement shall run in full force
and effect concurrently with the Basic Agreement effective
September 1, 1998.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ---------------------------------- -------------------------------
Terry Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ---------------------------------- -------------------------------
James F. Martin, J. A. Chronic, Chairman
Sr. Vice President Human Resources TWA MEC
/s/
-------------------------------
J. Randolph Babbitt,
President
Dated: July 6, 1998
243
<PAGE>
<PAGE>
LETTER XXIII
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provision of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns
(hereinafter known as the "Company" or "TWA") and the Air Line Pilots in
the service of TWA as represented by the AIR LINE PILOTS ASSOCIATION,
INTERNATIONAL (hereinafter known as the "Association" or "ALPA").
WHEREAS TWA, ALPA, IAM (International Association of Machinists), IFFA
(Independent Federation of Flight Attendants), and TWU (Transport
Workers Union of America) have agreed upon certain changes to the TWA
free and reduced rate transportation policy as a resolution of a TWA-IAM
System Board of Adjustment arbitration;
NOW THEREFORE it is hereby agreed as follows:
1. The terms of the attached TWA Policy (herein "TWA Policy") are
hereby incorporated as an amendment to the TWA-ALPA Agreement
effective September 1, 1994 (herein "the Agreement").
2. Upon the implementation of the TWA Policy, which will become
effective on September 1, 1996, the Letter of Agreement dated
August 31, 1994 (Exhibit #64) relating to TWA free and reduced
rate transportation shall be null and void and without continued
force or effect.
3. This Letter of Agreement is effective upon execution and shall
remain in full force and effect concurrently with the Agreement.
SO AGREED:
For the Company: For the Association:
/s/ /s/
- - ----------------------------- ----------------------------------
Philip B. Whitcomb, D.R. Jacobs
Staff Vice President Chairman
Labor Relations TWA MEC
/s/
----------------------------------
J. Randolph Babbitt,
Dated: May 21, 1996 President
244
<PAGE>
<PAGE>
LETTER XXIII(A)
TWA FREE AND REDUCED RATE
TRANSPORTATION POLICY
All rules and regulations governing the administration of free and
reduced rate transportation including those cited in this section,
continue in full force and effect. They will be strictly enforced and
adhered to, and violators may be subject to revocation of pass
privileges or immediate dismissal.
1. Vacation Pass Policy
--------------------
A) Increase allotment from one (1) to four (4) Vacation Passes
per calendar year for active employees and eligible family
members provided the employee has completed one full year of
service prior to January 1st and has earned not less than
one-half (1/2) of the full year vacation allotment
commensurate for his/her job classification and seniority.
Employees with less than this requirement will continue to
receive one (1) Vacation Pass per calendar year for employee
and eligible family members. The yearly allotment of
Vacation Passes must be exhausted within that calendar year.
B) Applicable coach and first class service charges will be
assessed for all Vacation Passes. Employees with more than
fifteen (15) years of service do not pay coach charges.
C) Vacation Passes will NOT be valid for reissue unless
employee has earned only one (1) vacation pass in the
calendar year. In this instance, only totally unused passes
may be reissued.
D) Refunds are allowed on totally unused round-trip or one-way
coupons including a totally unused one-way coupon. No
refund will be made on charges of partially used passes when
the coach charge for sector used equals that of the charge
paid.
E) Request for Vacation Pass(es) shall include all eligible
family members for efficiency in administrative handling.
F) All other rules and regulations regarding Vacation Passes
shall remain unchanged.
2. Commuter Passes
---------------
A) Active employees with less than fifteen (15) years of
service may request Class 7 service charge trip passes to be
used for travel from the employee's home (nearest airport
served by TWA) to employees domicile (for flight crew
employees) or work station (for ground employees) for
reporting to/from work ONLY.
245
<PAGE>
<PAGE>
B) CLASS 7 SERVICE CHARGE TRIP PASSES WILL ONLY BE ISSUED BY
THE EMPLOYEE'S REGULAR PASS ISSUING OFFICE UPON REQUEST AND
WILL REQUIRE TEN (10) BUSINESS DAYS FOR PROCESSING. PASSES
WILL BE ISSUED ON FORM 800 ONLY.
PAYROLL DEDUCTION FORM 807 MAY NOT BE USED.
C) Once the form 800 has been issued, city pair routings may
not be changed.
D) The employee's home will be defined as the address reflected
on official Company records (Form A-74).
E) Applicable coach charges will be collected by the Pass
Issuing Office. Employees may elect to payroll deduct coach
charges using Form 800, or by using a personal check. First
Class charges my be paid only by payroll deduction using
Form T-4229.
F) Family members are not eligible for class 7 service charge
trip passes.
3. ACM/XCAP Authority - Active Eligible Employees
----------------------------------------------
A) Current procedures for travel pursuant to the ACM/XCAP
authority will continue for the actual cockpit or cabin crew
seat(s) as governed by the Flight Operations Policy Manual
and In-Flight Services Manual.
B) Active eligible employees are defined as active pilots,
flight attendants, and flight dispatch officers in the
service of Trans World Airlines, Inc.
C) Alternatively, active eligible employees may elect to list
as "XCREW" using the current PARS standby listing
procedures. Only active eligible employees qualify for this
type of travel - this does not extend to eligible family
members. Active eligible employees traveling as "XCREWs"
will be boarded last after all other standby passengers
including EEE and OALs.
D) Active eligible employees who list and verify as "XCREW" are
not permitted to list using any other standby code. In
addition, those active eligible employees who sign-up for
the ACM/XCAP seat(s) in accordance with 3(A) above, will not
be eligible to list for the XCREW classification.
E) Boarding of active eligible employees within the XCREW
classification will be based solely on Company seniority.
No other boarding priority will apply to employees in this
classification.
F) Employees of other airlines will not be eligible to
participate in this program.
G) Active eligible employees traveling under XCREW will be
boarded in coach class only. First Class travel is not
permitted under any circumstances.
H) XCREW travel is service charge free in coach class and
active eligible employees will be required to complete form
0-3322 prior to boarding aircraft.
246
<PAGE>
<PAGE>
LETTER XXIV
LETTER OF AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
THE AIR LINE PILOTS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
THE AIR LINE PILOTS ASSOCIATION
INTERNATIONAL
THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between TRANS WORLD AIRLINES, INC., its successors or assigns (herein
the "Company" or "TWA") and the Air Line Pilots in the service of TWA as
represented by the AIR LINE PILOTS ASSOCIATION, INTERNATIONAL (herein
the "Association" or "ALPA").
WHEREAS the Company and the Association have agreed to certain
amendments to Sections 1-31 and the Letters of Agreement to the Basic
Agreement effective September 1, 1994 (said new agreements are referred
to herein alternatively as "the Basic Agreement effective September 1,
1998" or "the New Basic Agreement"); and
WHEREAS the Company and the Association have agreed to certain
amendments to the Training Center Check Airmen and Simulator Instructors
Letter of Agreement (herein "the INS LOA"); and
WHEREAS the Company and the Association have agreed to certain
amendments to the Letter of Agreement covering the Company's Line
Instructor Pilots and Line Standards Pilots (herein "the LIP/LSP LOA");
and
WHEREAS all amended provisions and new agreements ("tentative
agreements") are attached hereto; and
WHEREAS the Company and the Association have agreed to certain
provisions regarding the implementation of the above mentioned
agreements; and
WHEREAS the above mentioned agreements are subject to the Association's
ratification procedures;
NOW THEREFORE the parties hereby agree as follows:
Ratification
------------
1. The Basic Agreement effective September 1, 1998, the INS
LOA, the LIP/LSP LOA and paragraphs 2-11 of this Letter of
Agreement are together subject to ratification/rejection by
the TWA Master Executive Council and/or the TWA ALPA
membership (herein "ratification", if approved). In the
event that these tentative agreements are rejected by ALPA,
each party reserves its rights to withdraw and/or amend the
247
<PAGE>
<PAGE>
LETTER XXIV, cont.
proposals tentatively agreed to and attached to this Letter
of Agreement.
Preferential Bidding
--------------------
2. Sections 9, 10, 11, 12 and 28 of the New Basic Agreement
shall permanently replace such respective provisions of
Exhibit 2 to the Permanent Implementation Letter of
Agreement (herein "the PI LOA"). All other provisions of the
PI LOA shall remain in full force and effect concurrently
with the New Basic Agreement.
Workrule Implementation
-----------------------
3. Pilots restricted from bid awards by the terms of Section
6(D), 6(E) and 6(G) of the Basic Agreement effective
September 1, 1994 (herein "the 1994 Basic Agreement") shall
continue to be governed by the terms of such provisions
after the date of ratification of the New Basic Agreement.
The restrictions of Section 6(C) and 19(K) of the New Basic
Agreement shall be applied prospectively.
New Narrowbody Aircraft
-----------------------
4. Section 4(D)(7) of the 1994 Basic Agreement shall be deemed
to have been satisfied with regard to the introduction of
the A319/320/321 and B737 equipment types.
5. Upon introduction, the A319/A320/A321 and all models of the
B737 shall be considered separate equipment types for
purposes of permanent vacancy and monthly bidding under
Sections 19 and 9, respectively, of the New Basic Agreement.
Letters of Agreement and Publication of the New Basic Agreement
---------------------------------------------------------------
6. The Letter of Agreement of December 18, 1985 between J. W.
Hoar for TWA and Captain Angelo Marchione for ALPA (Letter
X) and Letter XIV to the 1994 Basic Agreement shall be of no
further force or effect after August 31, 1998.
7. Letter IV to the 1994 Basic Agreement shall be of no further
force or effect after August 31, 1998.
8. The following agreements published with the 1994 Basic
Agreement shall be of no further force or effect after
August 31, 1998:
Letter V (International Relief Officer)
Letter VIII (Domestic Satellite Agreement)
Letter XII (Flex Cap/Furlough Protection Letter)
Letter XV (Triple EEE Program)
Letter XVI (Passes for Furloughed Pilots)
Letter XVIII (B727 Simulator Use Letter)
Letter XXIII (B747 IRO Crew Rest Letter)
Letter XXIV (B767 Crew Rest Letter)
Letter XXV (Agreement in Principle, dated August 31,
1994)
Progression Agreement
757 Cabin Door Training Pay
Relief Line Reserve Inversals
248
<PAGE>
<PAGE>
LETTER XXIV
9. The INS LOA, the LIP/LSP LOA, the Letter of Agreement of May
26, 1996 relating to the TWA Free and Reduced Rate
Transportation Policy, the Amended Letter XI, the Amended
Letter XXVII and the other remaining Letters (not mentioned
by paragraphs 7., 8., and 9. above) to the 1994 Basic
Agreement shall be published with the New Basic Agreement.
Other new letters and Letters of Agreement may also be
published by mutual agreement pursuant to paragraph 10.
below.
10. The parties shall meet within thirty (30) days after
ratification to make final preparations for publication of
the New Basic Agreement.
11. Upon ratification, this Letter of Agreement shall run in
full force and effect concurrently with the New Basic
Agreement.
SO AGREED.
For the Company: For the Association:
/s/ /s/
- - ----------------------------- ----------------------------------
Terry L. Hayes, Director Douglas J. Gabel, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ /s/
- - ----------------------------- ----------------------------------
Philip B. Whitcomb J. A. Chronic, Chairman
Vice President TWA MEC
Labor Relations
/s/
----------------------------------
J. Randolph Babbitt,
President
Dated July 11, 1998
249
<PAGE>
<PAGE>
[LOGO]
MEMORANDUM
AIR LINE PILOTS ASSOCIATION
TWA PILOTS' MASTER EXECUTIVE COUNCIL
- - -----------------------------------------------------------------------
DATE: September 1, 1998
TO: ALL TWA PILOTS
FROM: REPRESENTATION DEPARTMENT
SUBJECT: Availability of other Letters of Agreement and Certain MEC
Resolutions
- - -----------------------------------------------------------------------
There have been occasions in the past when pilots have questioned if all
the "Letters of Agreement" are printed with the Collective Bargaining
Agreement.
With this new Agreement, we have selected the Letters of Agreement which
we believe are relevant and useful for pilots to have available on a day
to day basis. There are, however, several hundred Letters of Agreement
on file at the TWA MEC office dating back to the 1950's. Some have only
limited application or have been superceded by subsequent agreements.
It has been our practice that any and all Letters of Agreement are
available to pilots for review at the offices of the TWA MEC. Also, the
MEC Resolution(s) governing the distribution of stock and/or cash
payments pursuant to Letter XVII is available for review.
You may obtain them by writing and requesting the specific document(s)
you need. Please address your correspondence to:
TWA MEC REPRESENTATION OFFICE
500 NORTHWEST PLAZA - SUITE 1200
ST. ANN, MO 63074-2226
TEL: 314-770-8500
FAX: 314-770-8597
250
<PAGE>
<PAGE>
TWA PILOTS' COLLECTIVE BARGAINING AGREEMENT INDEX
A Section Page
------- ----
Accident Insurance 24(G) 165
Acute Care Drug Plan 24(A)(8) 160
Accrual, Sick Leave 15(A)(B) 103
ACM, Domestic 3(C) 16
International 3(D) 16
ACM Dress Code 3(E) 17
Active Pay Status, defined 31(A) 175
Activity Conflicts 9(F)(5) 60
Additional flying, defined 31(B) 175
Affiliate, defined 1(H)(4) 11
Agency Shop, Appeals 25(D) 167
Delinquency 25(B) 166
Agreement, Copies 2(E) 12
Basic, defined 31(D) 175
Dates and Duration 30 174
Precedence 29 173
Airborne Integrated Data System (AIDS) LOA V 188
Airport Office 2(T) 15
ALPA Business 2(O) 14
ALPA Flight Pay Loss Make-Up 9(F)(2)(c) 58
ALPA Securities LOA XIII 206
Alternate Month Job Sharing Program 18(G) 116
Ambassador Club 2(S) 15
Annual Manpower Planning Message 19(A)(8) 120
Annual Seniority Realignment Bid 19(D)(1) 122
Appeal to System Board 21(C) 141
Assignment, 19(C) 121
Guarantee 5(A) 25
Reserve officer 19(I) 131
Temporary 19(F) 129
ATR Aircraft LOA XVI 217
Automated Report 9(E)(2)(e) 55
Average Line Value, defined 31(C) 175
Averting vacancies and displacements 19(H) 131
Awarding of Permanent Vacancies 19(D) 122
B
B-727 Flight Engineer LOA XIX 222
Balance Avoidance 9(D)(3) 54
Balancing, 9(D) 52
Class A, B, M 9(D) 52
Green, Yellow, and Red Time 9(H) 61
Involuntary and Voluntary 9(D) 52
Bank, Positive/Negative 10(F) 74
Beard, Prohibited 2(N) 14
Benched Pilots 6(A)(4) 30
Bid Package, 9(B) 46
Monthly Awards 9(C) 48
Bid Run Pilot, defined 31(F) 175
Bids Monthly
Awards 9(C) 48
Bids Permanent 19 120
Age Fifty Bypass Option 19(D)(3)(a) 123
Age Forty-five Bypass Option 19(D)(3)(b) 124
251
<PAGE>
<PAGE>
Contingent Pilots 19(D)(4) 124
Equipment/Category 19(A) 120
Failure to 19(D)(2)(e) 123
FAX 19(B) 121
Future Effective 19(E) 128
Probationary Pilot 17(C)(2) 110
Requirements 19(D)(2) 122
Return from Leaves, Training or
Temp Assignments 17(A)(10) 109
Status Change 19(A) 120
Time Limits 19(C) 121
Vacancies 19(D) 122
Bid Line Improvement Process, (BLIP) 9(E) 54
Close Hours 9(E)(2)(b) 55
Begin/End of Month 9(E)(2)(h) 55
Flights over Holidays 9(E)(2)(j) 56
Inputting Requests 9(E)(2) 54
MUG restriction 9(E)(2)(k) 56
Reserve Availability 9(E)(3) 56
Bid Run Preparation 9(A) 45
Bi-monthly Grievance
Conference 21(C)(9) 142
Block Seating 1(G) 7
Block to Block, defined 31(G) 175
Board of Director Representation LOA XIII 204
Bypass, Recall 20(C) 135
C
Calendar Month, defined 31(H) 175
Call Out Pay 5(G) 26
Captain, defined 31(I) 176
Familiarization 6(B)(1) 32
Line Initial/Upgrade Training 6(B) 32
Carrier Fragmentation 1(D)(3) 4
Cash Bonus LOA XVII 218
Cash Option LOA XVII 220
Category Award, defined 31(K) 176
Category, defined 31(J) 176
Bidding for Vacancies 19(D) 122
Change when on Sick/UPB/AWP/MIL 4(F)(8) 24
Cause 21(A)(1) 139
Class B Travel 8(E) 43
Classes for Balancing, 9(D) 52
Class "A" 9(D)(1)(a) 52
Class "B" 9(D)(1)(c) 53
Class "M" 9(D)(1)(b) 52
Class 3 Passes 3(I) 17
Class 5 Passes 3(J),(K) 18
Charter Flights 28 172
Charts and Manuals 2(B) 12
Code-Sharing/Block Seat Protection 1(G) 7
Combined Domiciles 10(A) 65
Common Stock Option LOA XVII 219
Commuter Carriers Flying TWA routes 1(G) 7
Commuter Passes LOA XXIII 245
Company Physical,
Examinations 16 105
Medical Leave 18(B) 112
Compensation 4 19
252
<PAGE>
<PAGE>
Composite Pay 4(A)(1) 19
Composite Pay Tables Appendix
Contact:
for Balancing 9(D)(1) 52
for BLIP notification 9(E)(2)(n) 56
for Reserve Pilots 12(B) 88
for Trip Add System (TAS) 9(F)(2)(b) 57
Contingent Pilots 19(D)(4) 124
Currency of Experience 19(D)(4)(i) 127
Dual Status Coverage LAX 19(D)(4)(g) 126
Dual Status Coverage SFO 19(D)(4)(g) 126
Number of 19(D)(4)(d) 125
Reserve Rules 19(D)(4)(g) 126
Special Characteristics and
Limitations 19(D)(4)(d) 125
Continuing Qualification Training
Pay (CQT) 4(D)(4) 23
Control, defined 1(H)(2) 10
Co-Terminals
Expenses 7(A)(5) 40
List 8(C) 43
Times 8(D) 43
Credited Flight Time 11(A)(7) 78
Crew Calls, International 7(E)(3) 42
Crew Administration Management
System (CAMS) 2(R) 15
Crew Meals 16(B) 106
Flights of Less than 2:00 Hrs LOA X 199
Segments 9(B)(1) 46
Crew Rest Areas 2(G) 13
Crew Seats B-767 11(D)(7) 87
D
Daily Minimum Flight Time Credit 11(B) 80
Day, Training 19(K)(10)(a) 134
Days Off, Reserves 12(D) 91
Duty Free Periods 12(D) 91
Golden Days 12(D)(5) 92
Deadhead, 8(A) 43
Across the Atlantic and Pacific 11(D)(4) 87
Completion of Trip 8(E) 43
Pay and Credit 8(A) 43
Time 8(A) 43
To Domicile 8(E) 43
Home for commuters 8(E) 43
Death in Family (DIF) 15(I) 104
Declining a Bid 19(D)(5) 127
Definitions 31 175
Delayed Departure 9(K)(3) 63
Dental Benefits Plan 24(A) 158
Derogatory Information 2(K) 13
Designator Code 1(B)(1) 1
Direct Electronic Deposit 2(F) 12
Directed Account Plan (DAP) 23(C) 156
Disability, Insurance 24(B) 161
Discharge/Discipline 21(A) 139
Cause 21(A)(1) 139
Hearing 21(A)(3) 139
Holding a Pilot Out of Service 21(A)(6) 140
253
<PAGE>
<PAGE>
Investigation 21(A) 139
LEC Officer 21(A)(1) 139
Materials Relied Upon by Company 21(A)(4) 139
Precise Charges 21(A)(4) 139
Request for Hearing 21(A)(1) 139
Regional Chief Pilot 21(A)(4) 139
Discrimination 2(J) 13
Displacement, 19(G) 130
Bulletins 19(C)(3) 121
Bulletins not Posted 5(B) 25
Replacement Option (DRO) 19(G)(8) 131
Notice of 19(C) 121
of F/O by Student Captain 9(C)(4)&(9) 50
of Pilots 19(G) 130
Prerogatives 19(G)(3) 131
Preferences 19(G)(2) 130
Distribution of Open Time 9(H) 61
Diurnal, Ground Time Limitations 11(C) 82
Hourly Limitations 11(C)(3) 82
Doctor's Certificate 15(H) 104
Domestic Operations, defined 31(L) 176
Domicile, Combined 10(A)(2) 65
Schedule Committee 10(C)(1)(a) 70
Training Expenses 7(C) 42
Draft, defined 31(M) 176
Premium Pay 5(K)(2) 27
Trip Protection 9(G)(2) 60
Dues Deductions 26 169
Duty,
Aloft defined 31(N) 176
During Rest 11(C)(4) 84
Period Break 11(C) 82
Period International 11(D) 84
Period Limitations 11(C)&(D) 82
Duty Rigs, Domestic 11(B)(2)&(3) 79
International 11(B)(2)&(3) 79
Charters 28(B) 172
E
Emergency 11(B)(3)(d) 81
Employee Assistance Program 16(D) 106
Employment Conditions 1(A)(1) 1
Engineering Watch LOA XV 216
Equalization
Additional Flying 9(F)(4) 60
Defined 31(O) 176
Equipment Ranking 19(D)(2)(d) 123
Equipment
Bidding Restrictions 19(K) 132
Substitution 10(D) 73
Estimated Reserve Count 10(B)(7)(e) 69
Excess Employee Benefit Plan 23(E) 157
Expenses
800 number phone fees 7(E)(3) 42
Moving 13 94
Training in Domicile 7(C) 42
Training Away from Domicile 7(D) 42
Reimbursements 7(E) 42
Extended Charter 28(C) 172
254
<PAGE>
<PAGE>
Extra Section 5(D) 25
F
FAA Physical Examinations LOA XI 200
Factory Conducted Training 1(B)(2) 1
Failure
to Bid 9(C)(2) 50
to Maintain Current Standing Bid 19(B)(1) 121
to Maintain Qualifications 6(C)(5) 37
to Qualify Initial/Upgrade Training 6(C)(2) 35
to Qualify 6(C) 34
to Qualify, Requalification 6(C)(4) 37
to Qualify, Transition/Differences 6(C)(3) 36
Familiarization, Student Captain 6(B)(1) 32
Family and Medical Leave Act 18(A)(4) 112
FAR 121.438(b) Experience 9(C)(10) 52
Ferry Flights 5(I) 26
File, Personnel 2(K) 13
Fines 2(C) 12
Fixed Daily Rate (FDR), defined 31(Q) 177
First Officer, defined 31(P) 176
Bid Lines Withheld for Training 9(C)(9) 52
Displaced by Student Captain 9(C)(4) 50
Flight Assignments, Reserve 12(C) 90
Flight Engineer, defined 31(R) 177
Flight, Local in Nature 11(B)(3)(d) 81
Flight Pay Loss Allocation 2(O) 14
Flight Time, Credit Minimum 11(B) 79
Duty Time Ratio 11(B)(2) 79
Limitations 11(C) 82
Limits, Monthly ALV 11(A)(5) 78
Limits, FAR 11(C)(5) 84
Flight Time Record/Earnings Statement 2(F)(2) 13
401(k) Plan 23(D) 157
Furlough, Employment
Protection 20 135
Notice 20(B) 135
Insurance 20(H) 138
Pass and Reduced Rate Travel 20(G) 138
Pay 20(D) 137
Personal Leave 18(A)(3) 111
Recall Bypass Option 20(C)(2) 136
Replacement Option 20(C)(3) 136
Sick Leave Bank 15(L) 104
Strikes or Other Work Stopages 20(C)(1) 135
Withdrawing Retirement Benefits 20(F) 138
Future Effective Bids 19(E) 128
G
Golden Days Off
for Bid Run Pilots 10(C)(1)(f) 71
for Reserve Pilots 12(D)(5) 92
Black-out Periods 12(D)(5) 92
Grievance, Appeals 21(C) 141
Discussion 21(B)(2) 140
Filings 21(C) 141
Group of Pilots 21(B)(1) 140
Hearing 21(A) 139
255
<PAGE>
<PAGE>
Procedures 21 139
Regional Chief Pilot 21(A)(2) 140
Statement of Facts 21(B)(2) 140
Witnesses 21 139
Guarantee, defined 31(S) 177
Guarantees 4(C) 21
Guarantee Proration Status
Change 4(C)(4) 22
H
Hearing, Initial 21 139
Hostage, Captive, Missing,
Benefits 27 171
Hotel Accommodations, Domestic 7(A) 39
International 7(B) 41
Transportation, To or From 7(A) 39
Hours of Labor 1(A)(1) 1
Hours of Service 11 78
I
IAM's Corporate Governance LOA XIII 205
I.D. 90 Tickets 3(L) 18
Ice Check, MD8/DC9 2(P) 14
Industrial Injury 15(K) 104
Initial Operating Experience (IOE) 6(B) 32
Pay 4(D)(3) 22
Insufficient Bidders 19(D)(3) 123
Insurance, 24 158
Accident Insurance 24(G) 165
Acute Care Drug Plan 24(A)(8) 160
Claim is Denied Procedure 24(H) 165
CRAF Operation LOA I 182
Dental Plan 24(A)(6) 158
Furloughed Pilots 20(H)(1) 138
Furlough Continuance 20(H)(2) 138
Group Medical/Dental Benefit Plan 24(A)(6) 158
Job Sharing Program 18(G)(7) 119
Life Insurance 24(B) 161
Retiree Medical Benefits 24(A)(13) 161
Survivor Continuance 24(C) 162
Instructor Pilots LOA XX 224
International
Expenses 7(B) 41
Operations, defined 31(T) 177
Pairings 10(A)(2) 65
Internment, Benefits 27 171
Inviolate Days 10(C) 71
J
Job Sharing Program 18(G) 116
Awarding 18(G)(3) 117
Bulletins and Updated Revisions 18(G)(7) 119
Jury Duty 5(F) 26
Just Cause 2(W) 15
256
<PAGE>
<PAGE>
K
L
Last Trip Requirements, Limitations 10(C) 72
Layover, Hotels 7 39
Rest Areas 2(G) 13
Leaves of Absence, 18 111
Cancellation 18(A)(3)(h) 112
Family and Medical Leave Act 18(A)(4) 112
Personal 18(A) 111
Maternity 18(E) 114
Medical 18(B) 112
Military 18(C) 113
Paternity 18(F) 115
Returning from Leave 17(A)(10) 109
Letters of Agreement, Availability of MEMO 250
Life Insurance, Additional 24(E) 163
Line Familiarization 6(B) 32
Line Instructor Pilots (LIP) LOA XXII 236
Line Standard Pilots (LSP) LOA XXII 236
Long Call 12(B)(3)(b) 89
M
Management,
Employees LOA XXII 242
Flying 5(E) 25
Pay Assignments 5(E)(1) 25
Pool Time 5(E)(2) 25
Management/Labor Advisory Task Force LOA XII 201
Managing Director/Crew Resources 10(B)(5) 68
Maternity Leave 18(E) 114
Medical Benefit Plan 24(A) 158
Medical
Certificate Class Required 16(A)(4) 106
Examinations 16(A) 105
Future Aircraft Which Requires
Higher Standards LOA III 186
Leave 18(B) 112
Limitations 18(B)(2) 113
Loss of, Displacement Options 19(A)(3) 120
Required Exam, FAA Reimbursement 16(A)(3) 106
Medicare Supplemental
Insurance 24(D) 163
Merger Partner 1(D)(1) 2
Merger, Pay Increases 4(F)(5) 24
Mile defined 31(U) 177
Mileage 13(A)(2) 94
Military Leave of Absence 18(C) 113
Minimum, Flight Time Credit 11(B)(1) 79
Guarantees 4(C) 21
Pay, Single Duty Period 11(B)(2) 82
Rest - Domestic 11(C) 84
Rest - International 11(D) 25
Miscellaneous Pay Rules 5 25
Mock Bid, defined 31(V) 178
Guarantee 4(F)(6) 24
257
<PAGE>
<PAGE>
Monthly Flight Time, defined 31(W) 178
Moving Expenses 13 94
Multiple Pass System 9(E)(2)(e) 55
Mutual Flight Trades 9(I) 62
N
Narrowbody, defined 31(X) 178
National Mediation Board 1(A)(2) 1
Negligence Liability LOA VIII 197
New Equipment into Operation 4(F)(4) 24
No Flying for Entire Bid Period 4(F)(6) 24
Non-Bid Run Pilots 9(F)(1)(b) 57
Non-Revenue Flying 1(B)(1) 1
Non-Seniority List Instructors LOA XXII 242
Notification
of Displacement 19(C) 121
of Training Assignment 6(A)(2) 28
of Furlough 20(B) 135
of Recall 20(C) 135
O
Offering a Trip (OFR) 9(J) 62
Offering a Trip, defined 31(Y) 178
Okaying Flight Assignments 9(E)(2)(n) 56
On-Duty
Limitations 11(C) 82
One-for-4 11(B)(3)(b) 81
One-for-3:45 11(B)(3)(b) 81
One-for-3:30 11(B)(3)(b) 81
One-for-2 11(B)(2)(d) 80
One-for-1:45 11(B)(2)(d) 80
Open Time, Reserve Assignments 12(C) 90
Classifications,
defined 9(D) 52
Green, Yellow, Red Time 9(H) 61
Operation Preferences 10(A)(2) 65
Option Time 9(K)(5) 63
Options, Bid Cancellation 19(E)(3) 128
Outside Aviation Employement 11(A)(1) 78
P
Pairing Restoration 10(E) 74
Parent, defined 1(H)(3) 10
Passes for Medical and
Surviving Spouse 3(A) 16
Parking
Allowance 2(H) 13
Areas 2(H) 13
Paternity Leave 18(F) 115
Pay, General 4 19
Bi-monthly Advances 2(F)(2) 12
Assignments 5(E) 25
Paychecks 2(F) 12
in Case of Merger 4(F)(5) 24
Positive/Negative Bank Transactions 10(F) 74
258
<PAGE>
<PAGE>
Percentile Bids 19(D)(2)(b) 122
Permanent Transfer, defined 31(Z) 178
Permanent Vacancies, 19(D) 122
Filling of 19(C) 121
Posting of 19(C) 121
Prerogatives when Displaced 19(G) 130
Personal Business, Time
Off (UPB) 2(V) 15
Personal Default Bid 9(B)(3) 47
Personal Leave of Absence 18(A) 111
Personnel File Examination 2(K) 13
Physical Standards 16 105
Pilot Alternate Month Job Sharing
Program 18(G) 116
Pilot, defined 31(AA) 178
Pilot Records Improvement Act 2(K) 13
Pilot Training Board ALPA/TWA 6(D) 37
Pilot Transfer Rights in Asset Sales 1(D)(2) 3
Physical, Company 16(A) 105
Pool Time 5(E)(2) 25
Positive/Negative Bank 10(F) 74
Pre-Scheduled Activities 9(B)(10) 48
Preferential Bidding System 9 45
Line Construction Parameters 10(B)(1)(d) 67
Monitoring Bid Award 10(B)(6) 68
Permanent Implementation LOA XXIV 248
Program Upgrades 10(B)(1)(d) 67
Software Improvements 10(B)(1)(d) 67
System Hardware 10(B)(1)(d) 67
Templates 10(B)(1)(d) 67
Pregnancy 18(E) 114
Premium Pay 5(K) 26
Preparation of Bid Runs 9(A) 45
Professional Standards Committee LOA VII 195
Proficiency Check 6(A)(3)(h) 30
Proration of Guarantee 4(C) 21
Q
Qualify, Failure to 6(C) 34
R
Railway Labor Act 1(A) 1
Railway Labor Act Rights 2 12
Re-protected 10(A)(2)(g) 66
Recall Bypass Option 20(C)(2) 136
Recognition and Scope 1 1
Regional Jets 1(G) 7
Reporting Pay 5(G) 26
Representation Department 21(B) 140
Resignation 2(W) 15
Requalification Training 6(C)(4) 37
Rescheduled, defined 31(BB) 178
Reserve, Assignments 12(C) 90
Blocks of Reserve Day Availability 12(A) 88
Bid Requirements 10(B)(9) 70
Combined Operations 10(A)(2) 65
Contact, Telephone 12(B) 88
259
<PAGE>
<PAGE>
Duty Free Periods 12(D) 91
First In, First Out 12(C)(1)(b) 90
Golden Days Off 12(D)(5) 92
Guarantee Option (RGO) 12(E) 93
Long Call 12(B)(3)(b) 89
Rest requirements 11(C)(3) 82
Rest after call-out 12(F)(1) 93
Short Call 12(B)(3)(a) 88
Trading of Reserve Days Off 12(D)(3) 92
Reserve Officer, defined 31(CC) 178
Assignments 19(I) 131
Reserve Removed from Flight, by RRO 12(C)(3) 91
Reserve Replacement Option (RRO) 9(D)(2)(d) 53
Reserve Schedule, defined 31(DD) 178
Rest, After Training 6(A)(3)(c)(ii) 29
Reserve Rest 12(F)(1) 93
Rest Areas 2(G) 13
Restrictions on Bidding 19(K) 133
Retiree Insurance 24(A)(13) 161
Retirement Plan (A Plan) 23(A) 148
Return to Duty after Bid Awards 9(E)(2)(c) 55
Revenue Flying 1(B)(1) 1
Rolling Twelve Months 9(K)(6) 64
Roster of Earnings 2(I) 13
S
Satellite Scheduling 10(G) 75
Schedule Change and/or
Substitution of Flight 9(C)(6) 50
Schedule Committee 10(B) 66
Schedule over Actual Pay 11(B)(1)(a) 79
Scheduled for Duty Aloft, defined 31(EE) 178
Scheduling of Pilots 10 65
Scheduling Policies 9 45
Scope 1(B) 1
Seniority 17 108
Accrual 17(A) 108
Seniority Adjustment (3%) 19(D)(1)(b) 122
Service Charges, Collective
Bargaining 26 169
Services Performed 5(A) 25
Shared Code-Sharing Jet Aircraft 1(G)(10) 10
Short Call 12(B)(3)(a) 88
Sick Leave, Accrual 15(C) 103
Death in Family (DIF) 15(I) 104
Limitations 15(B) 103
Make-Up 15(J) 104
Pay, FDR 15(F) 103
Pay, Trips Missed 15(E) 103
Simulator Instructors LOA XX 224
Simulator Proficiency Checks 6(A)(3)(d) 29
Single Duty Period Minimum 11(B)(2) 79
Single Trip Assignment 19(F)(4) 130
Small Widebody, defined 31(FF) 178
Special Interest Flights 28(C) 172
Standing Bids 19(B)(1) 121
Cancellation of 19(A)(7) 120
State Income Taxes 2(U) 15
Status Change, Voluntary 5(C) 25
260
<PAGE>
<PAGE>
Status, defined 31(GG) 178
Student Captain Line Familiarization 6(B)(1)(a) 32
Student Captain/First Officer Pay 4(D)(2) 22
Substitution of Flights 9(C)(6) 51
Sufficiently Qualified, defined 19(I)(1)(c) 132
Supplemental Bid Runs 9(C)(8) 51
Supplemental Life Insurance 24(E) 163
Surface Transportation,
Deadheading 8(B) 43
Survivors Insurance 24(C) 162
System Board of Adjustment 22 143
Appointments 22(F) 144
Decisions 22(M) 146
Free Positive Space Transportation 22(Q) 147
3-Member Board 22(C)(3) 143
4-Member Board 22(C)(2) 143
5-Member Board 22(C)(1) 143
Jurisdiction 22(G) 145
Members 22(D) 144
Time Limits 22(J) 146
System Default Bid 9(B)(1)(q) 46
System Schedule Committee 10(B) 66
System Seniority List 17(B) 109
Protests 17(B)(2)&(3) 109
T
Target, defined 31(HH) 179
Target/High Bid Run Exception 10(B)(7)(b) 69
Temporary Assignment Guarantee 5(A) 25
Temporary Duty Expenses 7(A)(4) 40
Temporary Vacancies 19(F) 129
Thirty in Seven (30 in 7) 11(C)(5) 84
Time to Bid 9(B) 46
Trades, Mutual 9(I) 62
Trading of Flights 9(I) 62
Trading of Reserve Days Off 12(D)(6) 93
Training Board, Pilot
ALPA/TWA 6(D) 37
Training Expenses, In Domicile 7(C) 42
Out of Domicile 7(D) 42
Training, and Qualifications 6 28
Advanced Qualification Program (AQP) 6(A)(10) 32
Benched (WPT) 6(A)(4) 30
Checking 6(A)(1) 28
Class B Passes 3(F) 17
Continuing Qualifications 6(A)(3)(b) 29
Daily Training/Scheduling (Rest) 6(A)(3) 29
Declining 6(A)(2)(b) 28
Domicile 6(A)(2)(f) 28
Failure to Complete Course of 6(C) 34
Fair and Adequate Opportunity 6(C)(1)(a) 34
FRASCA 6(A)(9) 32
Initial/Upgrade 6(B) 32
Interruption 6(A)(5) 31
Passes 3(F) 17
Pay 4(D) 22
Progress Line Check 6(B)(1)(b) 33
Records 2(R) 15
Regulatory Qualifications 6(A)(1)(c) 28
261
<PAGE>
<PAGE>
Regulatory Requirements 6(A)(1)(c) 28
Requalification/Failure 6(C)(4) 37
Seniority Order 6(A)(1)(b) 28
Standards Evaluation Form 6(A)(3)(g) 30
Supplemental Instrument Procedures 6(A)(9) 32
Withdrawal from Training 6(A)(6) 31
Withholding F/O Line for Training 9(C)(9) 52
Transfer Rights in Asset Sales 1(D)(2) 3
Transportation, 3 16
Surface Deadhead 8(B) 43
Travel Time, Pay 5(L) 27
Triggering Event 1(D)(3)(a) 4
Trip Add System (TAS) 9(F)(2) 57
Trip and Training Expenses 7 39
Trip Hour Credit 11(B) 79
Trip Okay 9(E)(2)(n) 56
TWA-ALPA ESOP Trust LOA XIII 204
U
Uniform Changes 2(D) 12
Uniform Services Employment and
Re-Employment Rights Act 18(C) 113
Urgent Personal Business (UPB) 2(V) 15
V
Vacancies and Displacements, 19 120
Bulletins 19(C) 121
Vacated Trips 9(E)(3) 56
Vacations, 14 96
Awarding of by Category 14(D) 99
Bids 14(F) 101
Deferred 14(E)(5)(b) 100
Deferred, Premium Pay 5(K) 27
Entitlement 14(B) 96
Movement of Primary/Secondary Awards 14(E) 100
Pass Policy LOA XXIII 245
Pay 4(E) 23
Split Vacation Period 14(E)(5)(c) 101
Vacation Additional Flying 9(F) 57
Vacation Buy-Back 14(I) 102
Voicemail 9(B)(2) 47
Voluntary Balance 9(C)(1)(c) 53
Voluntary Change of Status 5(C) 25
Voluntary Dues and Service Charge Ded. 26 169
Volunteer Fly List 9(F)(3) 59
W
Wages 1(A)(1) 1
Weekend Drills, Military 18(C)(3) 113
Weekly Flight Time Limitations 11(C)(5) 84
Written Orders to Pilots 2(L) 14
XYZ
262
<PAGE>
<PAGE>
<TABLE>
COMPOSITE PAY HOURLY RATES
<CAPTION>
EFFEC-
TIVE
STATUS DATE YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAP 9/1/98 SWB 94.80 95.62 106.56 107.48 108.59 109.84 110.75 111.14 112.42 112.70 112.97 114.71 115.64 116.58
NB 88.41 89.23 99.55 100.49 101.57 102.81 103.73 104.49 105.47 105.79 106.11 107.84 108.78 109.73
3/2/99 SWB 97.59 98.43 109.69 110.65 111.78 113.08 114.01 114.41 115.73 116.01 116.30 118.08 119.04 120.01
NB 91.13 91.97 102.61 103.58 104.68 105.96 106.92 107.70 108.71 109.03 109.37 111.15 112.12 113.10
9/1/99 SWB 101.90 102.78 114.54 115.53 116.72 118.07 119.05 119.47 120.84 121.14 121.43 123.30 124.30 125.31
NB 94.68 95.55 106.61 107.62 108.77 110.10 111.09 111.90 112.95 113.29 113.63 115.48 116.49 117.51
9/1/00 SWB 110.29 111.24 123.97 125.05 126.33 127.79 128.85 129.31 130.79 131.11 131.43 133.45 134.53 135.63
NB 100.77 101.69 113.46 114.53 115.75 117.17 118.22 119.09 120.21 120.56 120.94 122.90 123.97 125.06
9/1/01 SWB 120.67 121.71 135.63 136.81 138.22 139.82 140.98 141.47 143.09 143.45 143.80 146.01 147.19 148.39
NB 108.79 109.79 122.50 123.66 124.97 126.50 127.64 128.57 129.78 130.17 130.57 132.69 133.85 135.02
8/1/02 SWB 132.90 134.04 149.38 150.68 152.23 153.99 155.26 155.81 157.60 157.99 158.37 160.81 162.11 163.43
NB 117.07 118.15 131.82 133.07 134.49 136.13 137.36 138.36 139.66 140.08 140.51 142.79 144.04 145.30
<FN>
SWB = Small Widebody
NB = Narrowbody
</TABLE>
263
<PAGE>
<PAGE>
<TABLE>
COMPOSITE PAY HOURLY RATES
<CAPTION>
EFFEC-
TIVE
STATUS DATE YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
F/O 9/1/98 SWB 47.40 57.37 65.00 66.64 68.41 70.30 71.99 73.91 75.32 76.07 76.82 78.23 78.98 79.74
NB 44.21 53.54 60.73 62.30 63.99 65.80 67.42 69.49 70.66 71.41 72.15 73.55 74.30 75.06
3/2/99 SWB 48.80 59.06 66.91 68.60 70.42 72.37 74.11 76.08 77.54 78.31 79.08 80.53 81.30 82.09
NB 45.57 55.18 62.59 64.22 65.95 67.81 69.50 71.62 72.84 73.60 74.37 75.80 76.58 77.36
9/1/99 SWB 50.95 61.67 69.87 71.63 73.53 75.56 77.38 79.45 80.96 81.77 82.57 84.09 84.90 85.71
NB 47.34 57.33 65.03 66.72 68.53 70.46 72.21 74.41 75.68 76.47 77.27 78.76 79.56 80.38
9/1/00 SWB 55.15 66.74 75.62 77.53 79.59 81.79 83.75 85.99 87.63 88.50 89.37 91.01 91.88 92.77
NB 50.39 61.01 69.21 71.01 72.92 74.99 76.84 79.19 80.54 81.38 82.24 83.82 84.67 85.54
9/1/01 SWB 60.34 73.03 82.73 84.82 87.08 89.48 91.64 94.08 95.87 96.83 97.78 99.58 100.53 101.50
NB 54.40 65.87 74.73 76.67 78.73 80.96 82.97 85.50 86.95 87.86 88.79 90.49 91.42 92.35
8/1/02 SWB 66.45 80.42 91.12 93.42 95.90 98.55 100.92 103.61 105.59 106.64 107.69 109.67 110.72 111.79
NB 58.54 70.89 80.41 82.50 84.73 87.12 89.28 92.01 93.57 94.55 95.55 97.38 98.38 99.39
<FN>
SWB = Small Widebody
NB = Narrowbody
</TABLE>
264
<PAGE>
<PAGE>
<TABLE>
COMPOSITE PAY HOURLY RATES
<CAPTION>
EFFEC-
TIVE
STATUS DATE YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
F/E 9/1/98 NB 44.21 53.54 59.73 60.29 60.94 61.69 62.24 62.69 63.28 63.47 63.67 64.70 65.27 65.84
3/2/99 NB 45.57 55.18 61.57 62.15 62.81 63.58 64.15 64.62 65.23 65.42 65.62 66.69 67.27 67.86
9/1/99 NB 47.34 57.33 63.97 64.57 65.26 66.06 66.65 67.14 67.77 67.97 68.18 69.29 69.89 70.51
9/1/00 NB 50.39 61.01 68.08 68.72 69.45 70.30 70.93 71.45 72.13 72.34 72.56 73.74 74.38 75.04
9/1/01 NB 54.40 65.87 73.50 74.20 74.98 75.90 76.58 77.14 77.87 78.10 78.34 79.61 80.31 81.01
8/1/02 NB 58.54 70.89 79.09 79.84 80.69 81.68 82.42 83.02 83.80 84.05 84.31 85.67 86.42 87.18
<FN>
NB = Narrowbody
</TABLE>
265
<PAGE>
Exhibit 10.45
TABLE OF CONTENTS
- - -------------------------------------------------------------------------
Section Title Page
1 Recognition and Scope 1
2 Definitions 3
3 Compensation 4
4 Hours of Work, Holiday and Vacations 6
5 Qualification Flights 9
6 Expenses 10
7 Sick Leave 11
8 Probationary Period 13
9 Leave of Absence 14
10 Seniority 16
11 Filling of Vacancies 18
12 Furlough pay 21
13 Job Security and Severance 23
14 Investigation and Discipline 25
15 System Board of Adjustment 27
16 General 30
17 Union Security 36
18 Duration of Agreement 41
Letters of Agreement 1 - 19 42
Participative Management 77
=========================================================================
<PAGE>
<PAGE>
AGREEMENT
between
TRANS WORLD AIRLINES, INC.
and
FLIGHT DISPATCH OFFICERS AND
ASSISTANT FLIGHT DISPATCH OFFICERS
in the employ of
TRANS WORLD AIRLINES, INC.
as represented by
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
This Agreement is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended by and
between TRANS WORLD AIRLINES, INC., hereinafter known as the "Company",
and the FLIGHT DISPATCH OFFICERS AND ASSISTANT FLIGHT DISPATCH OFFICERS
in the service of TRANS WORLD AIRLINES, INC., who are represented by the
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, hereinafter known as the
"Union".
SECTION 1
RECOGNITION AND SCOPE
(A) Recognition
The Union is recognized by the Company, in accordance with
Certification Case R-3653 by the National Mediation Board
dated February 7, 1964, as sole and exclusive bargaining
agent with respect to rates of pay, rules and working
conditions of Flight Dispatch Officers In the employ of the
Company working within the United States and its territorial
possessions, and those who may be temporarily transferred by
the Company to foreign stations.
(B) Scope
(1) Flight Dispatch Officers are TWA employees who hold
a currently effective FAA Aircraft Dispatcher Certificate.
Flight Dispatch Officers plan for the safe and efficient
operation of each TWA flight. Each Flight Dispatch Officer
is directly responsible for the operation of a number of
flights assigned to his/her control. Each individual flight
is issued a Dispatch Release by the controlling Flight
Dispatch Officer. The Dispatch Release specifies conditions
under which a flight is required to operate such as fuel
required, alternate airports, and any aircraft restriction.
Before a Dispatch Release is issued, the Flight Dispatch
Officer must determine the suitability of weather, traffic
and field conditions, airways, facilities and any other
factor that could affect the flight. After a flight departs,
the Flight Dispatch Officer must monitor its, progress and,
together with the Captain, "manage" the flight until arrival
at destination.
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3/1/99 Page 1
<PAGE>
<PAGE>
(2) In the performance of the above, the Flight
Dispatch Officer will give full consideration to economic
factors and operating cost and release the flight in the
most economical profile that insures a safe and reliable
operation.
(3) It is understood and agreed that this Agreement
covers the performance of the Dispatch function as described
above and the furnishing of the Dispatch facility by the
Company. The provisions of this Agreement shall be binding
upon any successor or merged company or companies, or any
successor in the control of the Company, unless and until
changed in accordance with the provisions of the Railway
Labor Act. In the event of a proposed change in the method
of performance of the Dispatch function or facility, the
Union and the Company will meet to negotiate proper
provisions for the protection of the position and seniority
of employees covered herein.
(C) In the event of any sale of routes that would result in a
layoff of Flight Dispatch Officers, provided this Agreement is in
effect, the Company will use good faith reasonable efforts to
obtain employment for such Flight Dispatch Officers with the
acquiring airline and, to the extent practicable, reflecting TWA
seniority.
=========================================================================
3/1/99 Page 2
<PAGE>
<PAGE>
SECTION 2
DEFINITIONS
(A) The term "Flight Dispatch Officer," as used herein shall
mean an employee who holds a currently effective Aircraft
Dispatcher's Certificate issued by the Federal Aviation
Administration, Department of Transportation, United States of
America, and who is regularly assigned by the Company to be in
charge of , and while on duty to be responsible for, the conduct
of dispatch operations in his/her area, as described by the
Federal Aviation Regulations and the Company's Flight Operations
Policy Manual, as they may be hereafter amended with regard to the
safety and efficiency of flight operations.
(B) The term "Assistant Flight Dispatch Officer," as used
herein, shall mean an employee who holds a currently effective
Aircraft Dispatcher's Certificate issued by the Federal Aviation
Administration, Department of Transportation, United States of
America, who is assigned by the Company as an Assistant, and who
works under the immediate supervision of a Flight Dispatch Officer
while on duty. All Assistant Flight Dispatch Officers shall be
required to obtain an Aircraft Dispatcher's Certificate
within sixty (60) days after meeting the minimum experience
requirements for certification set forth in the Federal Aviation
Regulations. In case the above is not complied with, the subject
employee may be released without regard to seniority.
(C) The term "Relief Flight Dispatch Officer," as used
herein, shall mean a Flight Dispatch Officer who holds a permanent
position at the domicile and who is required at his/her domicile
to work other than the normal work schedule on a pre-planned basis
in order to provide qualified relief for Flight Dispatch Officers
for vacation, qualification trips and training, and any other
abnormality as agreed to by the union on a non-precedent setting
case by case basis. The Company will maintain a Relief Flight
Dispatch Officer at locations where it is expedient to do so. The
position shall be subject to annual local bidding procedures.
(D) The term "temporary vacancy," as used herein, shall mean
a Flight Dispatch Officer vacancy that is expected to last for
less than six (6) months. All other vacancies shall be considered
permanent except as provided in Section 11(A)(3).
(E) The term "special assignment," as used herein, shall mean
the assignment of Flight Dispatch Officer to duties in lieu of
regular Flight Dispatch Officer activities, but such assignment
must be directly related to the dispatch function.
(F) Wherever the term "Flight Dispatch Officer" appears in
this Agreement, the provisions of the paragraph in which it
appears shall apply to Flight Dispatch Officers, Relief Flight
Officers, and Assistant Flight Dispatch Officers, unless otherwise
stated.
(G) The term "work cycle," as used herein, shall mean the
basic rotation of work days and regular days off established for
the annual work period, prior to overlay of such factors as
vacations, qualification flights, training, relief schedules, etc.
(H) The term "work schedule'" as used herein, shall mean the
specific assignment of individual employees by calendar months to
a work cycle adjusted for such factors as vacations,
qualification, training relief schedules, etc.
=========================================================================
3/1/99 Page 3
<PAGE>
<PAGE>
SECTION 3
COMPENSATION
(A) Except as otherwise provided herein, hourly rates of pay
under the TWA-TWU Agreement shall remain, for the entire term of
this agreement as shown as follows:
FLIGHT DISPATCH OFFICER
<TABLE>
<CAPTION>
Effective 3/01/99 3/01/01 3/01/03
<S> <C> <C> <C>
1st Year $ 2,612 $ 2,708 $ 2,824
2nd Year $ 2,866 $ 2,979 $ 3,105
3rd Year $ 3,180 $ 3,207 $ 3,344
4th Year $ 3,439 $ 3,614 $ 3,768
5th Year $ 3,641 $ 3,825 $ 3,988
6th Year $ 3,838 $ 4,032 $ 4,203
7th Year $ 4,039 $ 4,244 $ 4,424
8th Year $ 4,732 $ 4,986 $ 5,199
9th Year $ 4,886 $ 5,102 $ 5,318
10th Year $ 5,015 $ 5,241 $ 5,462
11th Year $ 5,074 $ 5,308 $ 5,532
12th Year $ 5,153 $ 5,399 $ 5,627
</TABLE>
The formula to be used in calculating the hourly rate of pay for a
Flight Dispatch Officer is:
Monthly Salary/162.0 (Monthly Salary divided by the annualized
average number of work hours per month).
All overtime pay will be based on the hourly rate of pay.
ASSISTANT FLIGHT DISPATCH OFFICERS
An employee who is an Assistant Flight Dispatch Officer shall be
paid in accordance with his/her seniority at the rate of 74% of
the above Flight Dispatch Officer pay scale.
(B) LICENSE PREMIUM
Effective March 1, 1999, Dispatcher Officers who hold an FAA
Aircraft Dispatcher's License shall be paid monthly license
premiums in accordance with the following schedule:
MARCH 1, 1999 $ 75.00
MARCH 1, 2000 $ 100.00
MARCH 1, 2002 $ 150.00
(C) Whenever an employee who has previously held the position of
Flight Dispatch Officer is given training at Company request
preparatory for upgrading, he/she shall receive his/her Flight
Dispatch Officer's compensation for the training period involved.
Any changes in licensing, training or qualification requirements
by local, State, Federal or Company regulations will obligate the
Company to provide any training or qualification to effected
employees covered under this Agreement. In any such case the
Company shall provide reasonable actual expenses, if applicable,
=========================================================================
3/1/99 Page 4
<PAGE>
<PAGE>
and employees shall not be scheduled for such training or
qualification in excess of normal utilization on their work
cycle.
(D) Employees hereunder who are based Alaska or outside the
continental United States shall receive, in addition to other
compensation provided for herein, Cost of Living Differential,
Overseas Service Increment, and Educational Allowance as set out
in the Company's manuals. Employees thereunder shall not receive
less foreign service benefits than other ground personnel at the
station.
=========================================================================
3/1/99 Page 5
<PAGE>
<PAGE>
SECTION 4
HOURS OF WORK, HOLIDAY AND VACATIONS
(A) The basic work cycle and schedule for all employees covered under
this Agreement shall be six (6) days of work, three (3) days off,
six (6) days of work, three (3) days off: six (6) days of work:
three (3) days off, with the following exceptions:
(1) Those employees holding bids or assignments as Relief Flight
Dispatch Officers, or on temporary assignment, shall be
scheduled as closely as possible to the 6-3 6-3 6-3 pattern,
but may be scheduled otherwise if there exists no other
alternate due to staffing requirements, provided that no
relief or temporary Flight Dispatch Officer shall be
scheduled for more than six (6) days of work without an
intervening day off and that no shift is scheduled with less
than a prior rest period of at least ten (10) hours.
(2) No Relief or Temporary Flight Dispatch Officer shall be
scheduled more than twenty-two (22) out of thirty (30)
calendar days.
The work cycle shall be determined at least sixty (60) days
in advance of each calendar year to allow for Relief and
vacation bidding. A specific work schedule of one calendar
year to be made between local Union Representatives and
Management shall be posted at least fifteen (15) days in
advance of each calendar month provided, however, that the
latter portion of the calendar year is for informational
purposes only.
It is understood that a work schedule containing any change
in a Flight Dispatch Officer day(s) off from what would
occur under the annual work cycle will not incur any
obligation by the Company under Section 4(B), provided it is
posted as described above. The starting time of work shifts
is recognized as a consideration of the work schedule and
will be governed by the needs of the services at each
location provided, however, that no shift shall either
commence or end between the hours of 0100 and 0500. Flight
Dispatch Officers and Assistant Flight Dispatch Officers
will be credited with one-half (1/2) hour shift overlap for
each shift worked.
Notwithstanding the above, it is understood that the Flight
Dispatchers work schedule and days off may be changed during
a given month to permit attendance at training courses,
operational meetings or to provide technical assistance,
provided that such changes are made with at least fourteen
(14) days notice, and will not reduce the overall number of
days off in a given month unless overtime is paid for any
reduction in days off.
(B) It is Understood that no overtime shall be compensated for except
when a Flight Dispatch Officer is called to duty by the Company on
his scheduled days off or as set forth in paragraph (C) of this
Section. Overtime shall be compensated as follows and settlement
shall be made on a monthly basis:
(1) When an employee works on one of his/her scheduled days off,
he/she shall be compensated at the rate of one and one-half
(1-1/2) times the straight time rate for such days.
(2) When an employee has already worked one (1) of the days of
his/her scheduled days off and is called to duty and works
during his/her next consecutive scheduled day(s) off,
=========================================================================
3/1/99 Page 6
<PAGE>
<PAGE>
he/she shall be compensated at the rate of two (2) times the
straight time rate for such days(s).
(C) The Company may at it's option fill all or part of any open shift
with supervisory personnel or choose to leave any shift(s)
uncovered and distribute the workload, before filling all or part
of such open shift(s) by using overtime, regardless of the reason
such shift was open and regardless of the start time of such
shift.
(D) Flight Dispatch Officers attending Company meetings, court or
legal proceedings, or required training held at a time other than
their regularly assigned work period shall receive overtime
compensation for such attendance at the straight time rate, but
not less than the equivalent of four (4) hours at straight time
rates. This provision will not apply when such attendance is in
lieu of any assigned work period.
(E) For employees based in the United States, the following holidays
shall be recognized as holidays for employees covered by this
Agreement: New Year's Day, Washington's Birthday, Good Friday,
Memorial Day, Independence Day, Floating Holiday, Labor Day,
Thanksgiving Day, Christmas Day, and the Employee's Birthday. If
Federal Law designates a date other than the calendar date of one
of the above listed holidays for observance of the holiday, the
date designated by law shall be considered the holiday.
(1) In the event an Employee's Birthday falls on February 29,
March 1 shall be observed. If an Employee's Birthday falls
on another of the holidays specified above, his/her next
following work day shall be considered the holiday.
(2) An employee required to work on any of the holidays
enumerated in this paragraph shall be compensated at the
rate of double time and one-half of his / her normal rate of
pay. In lieu of receiving compensation at the rate of double
time and one-half, the employee may elect to receive an
additional day off at his/her regular straight time rate.
This election must be made at the time vacations are bid.
This election shall be limited to five (5) holidays per
calendar year.
(3) If any of the above holidays falls on an employee's first
regularly scheduled day off, the immediately preceding work
day, if actually worked, shall be considered as the holiday
and the employee shall be compensated for such day at the
rate of double time. If any of the above holidays fall on
an employee's second or third regularly scheduled day off,
the immediately succeeding work day, if actually worked
shall be considered as the holiday and the employee shall be
compensated for such day at the rate of double time.
(4) If any of the above holidays occur during an employee's
vacation, sick leave, or other excused absence, the employee
shall be compensated for the holiday at his/her regular
straight time rate, and such day shall not be deducted from
his/her vacation or sick leave allowance.
(5) An employee who is scheduled to work on a holiday and who
fails to report for work where such absence is not excused,
shall receive no pay for such holiday.
(F) Benefits for employees hereunder regarding transportation and
expenses shall be as set forth in the Company's Management Policy
and Procedure Manual, except where such benefits are specifically
covered by the terms of the Agreement.
Excused absences will be granted in accordance with the Policy as
found on pages 10.76.01 dated July 1, 1998 and 10.76.02 dated
October 3, 1994, in the Company's Management Policy and Procedure
Manual, except where such benefits are specifically covered by the
terms of this Agreement.
=========================================================================
3/1/99 Page 7
<PAGE>
<PAGE>
(G) Vacations
(1) Employees hereunder shall become entitled to and receive
vacation allowances in accordance with the following:
<TABLE>
<CAPTION>
Number of Less 5 yrs 10 yrs 17 yrs 25 yrs 30 yrs.
months than thru thru thru thru thru
worked 5 yrs 9 yrs 16 yrs 24 yrs 29 yrs over
<S> <C> <C> <C> <C> <C> <C>
1 1 2 2 3 4 5
2 2 3 4 5 6 7
3 3 4 6 7 8 10
4 4 6 8 10 12 14
5 4 6 8 10 12 16
6 5 8 10 13 16 20
7 6 9 12 15 18 22
8 7 11 14 18 22 26
9 8 12 16 20 24 29
10 9 14 18 23 28 33
11 9 14 18 23 28 33
12 10 15 20 25 30 35
</TABLE>
(2) At the time vacations are bid, employees may defer five
(5) days of his/her vacation entitlement to be utilized as
single vacation days ("DAT"). Such days must be utilized
within the calendar year. Requests to utilize DAT days must
be made fifteen (15) days in advance of the required
publication/posting date of the monthly work schedule. DAT
awards will be subject to operational requirements.
=========================================================================
3/1/99 Page 8
<PAGE>
<PAGE>
SECTION 5
QUALIFICATION FLIGHTS
(A) Flight Dispatch Officers shall complete all qualification/
familiarization flights, as may be required by Federal Aviation
and Company Regulations. Flight Dispatcher Officers shall be
compensated at his/her regular straight time rate for only one
(1) day if such flight(s) is scheduled by the Company on his/her
day(s) off. Flight Dispatch Officers required to complete such
qualification/familiarization flights that includes an ocean
crossing shall be compensated at his/her regular straight time
rate for up to two (2) days if such flight(s) is scheduled by the
Company on his/her days off.
(B) During the first five (5) years of employment as a Flight Dispatch
Officer such Flight Dispatch Officer may be required to take up to
three (3) qualification/familiarization trips each year. Such
qualification/familiarization flights shall be taken over a
portion of the TWA domestic/international route system as selected
by the Director-Flight Dispatch. Flight Dispatch Officers shall
be compensated for such qualification/familiarization flights in
accordance with paragraph (A) above.
(C) These trips will afford the Flight Dispatch Officer an opportunity
to become familiar with TWA's route system and airports as well as
obtain cockpit exposure to enhance his/her overall operating
knowledge and performance.
(D) The Company will pay reasonable and customary expenses for hotels
and meals where required for all Company-authorized
qualification/familiarization trips.
(E) After completing qualification/familiarization flights, Flight
Dispatch Officers shall have a reasonable rest period before
reporting for duty.
=========================================================================
3/1/99 Page 9
<PAGE>
<PAGE>
SECTION 6
EXPENSES
(A) Employees hereunder who are required to travel or who are
transferred at the Company's request will be allowed expenses in
accordance with Company policy.
(B) Employees hereunder transferring as a result of the exercise of
seniority will be allowed expenses in accordance with Company
policy governing transfer under such condition, except that such
employees will pay their own expenses which are incurred within
the continental United States. However, successful bidders at
newly established or re-established domiciles and employees
transferring from closed domiciles will be considered as
transferred at Company request.
(C) Regardless of the above, Flight Dispatch officers transferring
through the operation of Section 13, or assigned under the
provisions of Section 11, shall be allowed expenses in accordance
with Section 6(A) above.
(D) Flight Dispatch Officers displacing under the provisions of
Section 11(F) shall be allowed expenses in accordance with Section
6(A) above.
(E) On any transfer involving a geographical change in location,
employees hereunder and their immediate families will be furnished
transportation in accordance with Company regulations.
(F) U.S. domiciled employees hereunder who are assigned to a relief
or temporary assignment at another U.S. station will receive
actual reasonable expenses. The Company will furnish upon
request, and without charge to vacation pass allotment, to the
members of such employee's immediate family, transportation in
accordance with Company policy for one round trip from domicile to
temporary location during the period of the assignment, whenever
such assignment is expected to, or actually does, exceed thirty
(30) days.
=========================================================================
3/1/99 Page 10
<PAGE>
<PAGE>
SECTION 7
SICK LEAVESICK LEAVE
(A) (1) Employees hereunder will be granted pay during sick leave in
accordance with the policy is found on Pages 10.74.01 and
10.74.02 dated October 1, 1998 and 10.74.03 dated April 6,
1993, in the Company's Management Policy and Procedure
Manual subject to Sections 9(B),(D),(F), and (G) of this
Agreement. Where such Company regulations are inconsistent
with any of the following provisions of the Section, the
provisions herein shall govern. Sick leave allowance will
accrue at the rate of one and one-sixth (1-1/6) work days
for each month of compensated service and may accumulate to
a maximum of one hundred twenty (120) days.
(2) A Flight Dispatch Officer eligible for sick leave pursuant
to Section 7(A)(1) above and who is paid sick leave
allowance for an extended sickness shall, upon his/her
return to duty, have any sick leave allowance for which
he/she was paid due to such extended sickness restored at
the rate of five (5) work days for each month of compensated
service after his/her return to duty. For the purposes of
this Section 7(A)(2) only, an "extended sickness" is a
period of absence from duty due to sickness or injury, for
which sick leave is payable, of thirty (30) or more
consecutive calendar days commencing with the first day for
which sick leave is paid.
(B) When it is necessary for an employee who has completed six (6)
months of continuous service to be absent form work because of
occupational injury, he/she may be granted sick leave with pay for
such absence to the extent that he/she has sick leave allowance
accrued at time of sickness. In the event he receives Workmen's
Compensation because of such absence, any sick leave pay due for
such absence will be deducted by the amount of such Workmen's
Compensation received. In such an event, when he/she returns to
work, he/she shall have his/her sick leave credit used in
connection with such injury restored to the extent that the amount
of the compensation offsets the amount of the sick leave pay
granted.
(C) (1) A Flight Dispatch Officer eligible for sick leave under this
Agreement shall be entitled to four (4) work days off per
calendar year on account of death in his/her immediate
family.
Days off under this paragraph shall be deducted from a
Flight Dispatch Officer's sick leave credit for the calendar
year in which such day is taken.
When more than one (1) death occurs during the same calendar
year, an employee may not draw upon his/her benefits for the
succeeding year or years, but may draw upon up to four (4)
days of his/her vacation in the current year. In the event
an employee has already taken his/her vacation in the
current year, such days shall be deducted from the
employee's vacation to be taken in the following year.
(2) A Flight Dispatch Officer shall also be entitled to three
(3) work days per calendar year on account of serious
illness in his/her immediate family, such days to be
deducted from the employee's vacation for that year. In the
event an employee has already taken his/her vacation, such
days shall be deducted from the employee's vacation to be
taken in the following year.
(3) Immediate family is defined as spouse, child, parent,
parent-in-law, foster parent, grandparent, grandchild,
brother, sister, brother-in-law, sister-in-law, or ward.
(D) Any Flight Dispatch Officer who becomes sick or injured as a
result of having been outside the United States on Company
business, due to causes related to his/her occupation or to living
and
=========================================================================
3/1/99 Page 11
<PAGE>
<PAGE>
health conditions peculiar to the countries in which he/she
performed services, shall have his/her necessary hospital,
medical, and doctor expenses paid by the Company. If the sickness
or injury necessitates treatment or convalescence in the United
States, such Flight Dispatch Officer shall be returned by the
Company to the United States. This provision shall apply to
recurrences of the same sickness or injury so long as the Flight
Dispatch Officer shall remain an employee of the Company. For the
purpose of this provision, final determination of whether or not
the sickness or injury is due to causes related to the countries
in which he/she performed services and whether or not the sickness
or injury necessitates treatment or convalescence in the United
States, shall be made by the Company's Medical Section.
(E) The Company shall provide to each employee hereunder an accounting
of his/her accrued sick leave within thirty (30) days of the date
of this contract.
=========================================================================
3/1/99 Page 12
<PAGE>
<PAGE>
SECTION 8
PROBATIONARY PERIOD
(A) An Assistant Flight Dispatch Officer or a Flight Dispatch Officer
who has not served as an Assistant Flight Dispatch Officer, will
be regarded as a probationary employee for the first twelve (12)
months after entering the position. In the event an employee
serves in both positions during the first twelve (12) months, the
total probationary period shall not exceed twelve (12) months for
such combined services.
Nothing in this Agreement shall be construed to prevent the
Company from releasing, furloughing, or re-employing or refusing
to re-employ an employee covered by this Agreement during the
probationary period, regardless of his/her position on the
seniority list, and the Company shall have the right to discharge,
discipline or lay off any such employee during the probationary
period without cause and without a hearing.
Time-off duty for reasons of sickness, leave of absence, excused
absence, furlough, or discipline will not be credited toward a
probationary period.
(B) If an employee is appointed to a Flight Dispatch Officer's
position after completion of the twelve (12) month probationary
period, he/she will be subject to a qualification period of twelve
(12) months after entering the position. Prior to completion of
such qualification period, the Union may provide the Company with
its recommendations concerning such employee's qualifications,
which will be considered by the Company. Determination of the
employee's qualifications will remain with the Company. Section
14 of this Agreement shall apply to employees covered by this
paragraph.
=========================================================================
3/1/99 Page 13
<PAGE>
<PAGE>
SECTION 9
LEAVE OF ABSENCE
(A) When requirements of the service will permit, an employee hereunder
may be granted a leave of absence for a period not in excess
of ninety (90) days. When such leaves of absence are granted, the
employee shall retain and shall continue to accrue seniority
during such ninety (90) day period. Such leave or leaves of
absence may by extended upon such terms and conditions as the
Company may prescribe in special circumstances and when approved
in writing by the Company, provided that seniority shall not
accrue during such extended leaves.
(B) After an employee hereunder has used all of his/her sick leave
credit under Section 7, subject to the conditions of Section 7(C),
he/she may be placed on a leave of absence, effective the last day
of his/her sick leave, and as long as the Company carries him on
such leave, he/she shall continue to accrue seniority to a maximum
of five (5) years. At the expiration of the five (5) year
continuous period, the employee may be terminated if he/she has
not returned to work. Return to duty shall be as set out in
(G) hereunder and shall be subject to the condition that all
governmental certificates or licenses required for the position
are currently valid. An employee on sick leave or medical leave
of absence may be periodically required to submit to a physical
examination during such leave and prior to return to duty.
In the case of leaves under this Section occasioned by pregnancy,
an employee will be granted a maternity leave of absence upon
proper application accompanied by a physician's statement that she
is unable to perform her work because of her pregnancy. Such
maternity leaves shall include a recovery period of six (6) weeks
(42 calendar days) for a normal delivery. If such maternity leave
of absence exceeds 42 days beyond delivery date, the employee must
furnish a physician's statement that such extension is necessary.
(C) Military leaves of absence for service in the armed forces of the
United States shall be handled at the inception and termination as
to seniority and right to reinstatement in accordance with
applicable law. Return to duty after such leave of absence shall
be subject to a reasonable qualifying period not to exceed six (6)
months.
(D) An employee on leave of absence shall not engage in military)
granted hereunder will be taken with the condition that the
governmental certificates or licenses required for the position
will be maintained current; otherwise, seniority will accrue only
to date that the certificates or licenses expire.
(E) Leaves of absence (other than injury, illness, or military)
granted hereunder will be taken with the condition that the
governmental certificates or licenses required for the position
will be maintained current; otherwise, seniority will accrue only
to date that the certificates or licenses expire.
(F) All leaves of absence shall be without pay, and during leaves,
credit for length of service will not be given for any purpose
except seniority list, as set out in (A) and (B) of this Section.
(G) Immediately after the expiration of a leave of absence (other than
a military leave), an employee hereunder will return to work as
set out below. Failure to do so will be reason for termination of
employment.
(1) If the position has not been permanently filled by the
Company, the returning employee will return to such
position. (See Section 11 (A)(3).)
(2) If the position has been permanently filled by the Company:
(a) Such employee shall bid on any existing vacancy.
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(b) If unable to get a position under (a), he/she may
elect to displace as set forth in Section 11(F) if
this agreement.
(H) Immediately after the expiration of a military leave of absence,
an employee hereunder will return to the domicile he/she had at
the time the leave started, seniority permitting. If seniority
does not permit, he/she shall displace as set out in Section 11
(F) of this Agreement.
(I) An employee hereunder will be granted a leave of absence to a
maximum of three (3) years for full-time employment with the
Union. One (1) employee covered by this Agreement may be on such
a leave of absence at one time. Request for such leave must be in
writing by such employee thirty (30) days prior to the desired
beginning of such leave. During such leave, he/she shall retain
and accrue seniority and pay longevity credit. Such leaves may be
renewed or extended by mutual agreement between the Company and
the Union. At the conclusion of the leave, the employee shall
return to his former status and domicile, seniority permitting.
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SECTION 10
SENIORITY
(A) Seniority shall govern all employees hereunder in case of
promotion and demotion, their retention in case of reduction of
force, their assignment or reassignment due to expansion or
reduction in force, and choice of vacancies, provided that the
employee's qualifications are sufficient. In the event a senior
Flight Dispatch Officer is not considered sufficiently qualified
by the Company, the Company shall furnish to the Flight Dispatch
Officer, upon application within (10) days, written reasons
therefor. Any requirements for initial, differences, or recurrent
training as required by the FAR's or Company regulations shall not
apply to "qualifications" as used in this paragraph. This Section
shall apply unless otherwise excepted by some other provision in
this Agreement.
(B) All employees having seniority under this Agreement shall be shown
on the seniority list and where two or more employees have the
same seniority their respective places on the seniority list shall
be determined by total length of service with the Company and if
that is not determinative, listing shall be by age, the eldest
listed first.
(C) Seniority shall begin to accrue from the date of appointment to a
position covered by this agreement. Seniority shall continue to
accrue only for the period that the employee is on pay status with
the Company or a position directly associated with the dispatching
function, except as provided in Sections 9,11, and 13.
(D) The Seniority List shall be issued by the Company, shall be
arranged in numerical order of seniority, and shall be known as
the Trans World Airlines, Inc., Flight Dispatch Officers and
Assistant Flight Dispatch Officers Seniority List.
(E) A copy of the Seniority List shall be posted by the Company at
each location where Flight Dispatch Officers or Assistant Flight
Dispatch Officers are based. Posting shall be made on January 1
and July 1 of each year. Each employee hereunder shall have a
period of thirty (30) days after the posting of the Seniority List
in which to advise the Company in writing of any inaccuracies
occurring since the last posting which affect his seniority. No
protest will be considered after such thirty (30) day period, and
the list shall thereafter, for all purposes, be considered final.
For any employee who is on an excused absence, leave of absence,
sick leave, vacation, or furlough, the thirty (30) day period
shall commence on the date the Company sends a copy of the list by
registered mail to his last known address or the date he/she
returns to duty, whichever is earlier. The Company will
investigate all reported inaccuracies and make such adjustments as
may be in order. Any adjustment or failure to make an adjustment,
with which an employee may be dissatisfied, may be handled as a
grievance under Section 14 hereof.
(F) Any employee named in the Seniority List, once having established
a seniority ranking thereunder, shall not lose that ranking except
as provided for in this Agreement.
(G) When an employee covered by this Agreement is transferred to
another position with the Company and such new position is
directly associated with the dispatching function, he/she shall
retain and continue to accrue seniority hereunder.
As pertains to this Agreement, the following positions (to include
the position under any other job title as long as the function is
essentially the same), and any others that may be mutually agreed
upon, shall be considered as being directly associated with the
dispatching function: Managing Director - Flight Operations,
Director -Flight Dispatch and Area Manager - Flight Dispatch.
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(H) When an employee covered by this Agreement is or has been
transferred to another position with the Company which is not
directly associated with the dispatching function, he/she shall
cease accruing seniority and shall be placed on the inactive
seniority list for a period of time equal to his/her accrued
seniority as of date of transfer except as provided in Section 13.
At the end of this time he shall be removed from the inactive list
and forfeit all seniority accrued. In event of reassignment as a
Flight Dispatch Officer or Assistant Flight Dispatch Officer or to
a position directly associated with the dispatching function,
while still on the inactive list, seniority shall commence to
reaccrue from date of such assignment, provided that at the time
of such assignment he/she possesses a valid FAA Dispatcher's
Certificate.
(I) An employee named in the Seniority List who resigns from the
service of the Company or is discharged for cause, or is on
furlough status for over five (5) years, shall forfeit all
seniority accrued. If an employee who has been laid off due to
reduction in force is offered the opportunity to return to the
service of the Company on a temporary basis, he/she shall have the
prerogative to accept or reject the offer without forfeiting
his/her accrued seniority with the Company. However, if he/she is
recalled to work on a full-time basis in the classification he/she
held prior to going on furlough and does not accept the offer
within seven (7) days after he receives it or does not return to
work within thirty (30) days after receipt, the Company may
consider him/her as having resigned from the service.
(J) Regardless of anything contained elsewhere in this Agreement to
the contrary, an employee who does not already have accrued
seniority under this Agreement, will not receive credit or
seniority for any purpose, except for Company service and pay
purposes, for any continuous period of assignment as a temporary
Assistant Flight Dispatch Officer which is contemplated at time
assignment is made to be for six (6) months or less. In the event
such an assignment should exceed six (6) months, seniority will
accrue from the first date on such assignment.
(K) If a Flight Dispatch Officer having seniority hereunder is
appointed as a supervisor to a position directly associated with
the dispatching function, as outlined in paragraph (G) above,
he/she may at any time thereafter exercise his/her seniority to
return to Flight Dispatch Officer status by displacing the least
senior Flight Dispatch Officer or as set forth in Section 11(F) of
this Agreement.
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SECTION 11
FILLING OF VACANCIES
(A) (1) When a Flight Dispatch Officer vacancy or Assistant Flight
Dispatcher Officer vacancy occurs which is expected to last
more than six (6) months, it shall be filled as follows:
(a) Through bidding by an active employee qualified as a
Flight Dispatch Officer covered by this Agreement
including the Managing Director - Flight Operations,
Director - Flight Dispatch and Area Managers - Flight
Dispatch or,
(b) In the absence of sufficient bids pursuant to (a)
above, the Company will assign the senior qualified
Assistant Dispatch Officer or,
(c) In the event all vacancies are not filled pursuant to
(a) and (b) above, any remaining vacancies shall be
subject to bid by all other persons whose names appear
on the seniority list.
(d) Vacancies in the Assistant Flight Dispatch Officer
category which are expected to last six (6) months or
more shall be filled first by bids from Assistant
Flight Dispatch Officers covered by this Agreement.
If insufficient bids are received to fill all such
vacancies, bids will be accepted from employees on a
Company-wide basis.
(2) The most senior person bidding under paragraphs (a) and (c)
shall be assigned to the vacancy when it is the opinion of
the Company that he/she is deemed adequately qualified. The
foregoing provisions are subject to Section 11 (D), (H) and
(K).
(3) A temporary position anticipated to last six (6) months or
less shall be designated as a permanent vacancy if it
actually exceeds six (6) months and it will be bid as a
permanent vacancy; except that if after a temporary position
has been activated, it is expected that it will exist for
over six (6) months, the Company and the Section Chairman of
the Union may mutually agree to extend it as a temporary
position rather than bidding it as a permanent vacancy. The
foregoing not withstanding, vacancies created by illness of
the employee shall be considered temporary for a period of
two (2) years.
(B) Permanent vacancies will be announced within thirty (30) days
after they are determined and shall be advertised by the Company
by posting notices at all stations where Flight Dispatch Officers
are based at least ten (10) days prior to a deadline date after
which bids will not be considered. Within seven (7) days after
bids are closed, all Flight Dispatch Officers will be notified of
the results by bulletins posted at stations where bids were
advertised.
(C) Successful bidders for a vacancy requiring change of domicile
shall be allowed a reasonable time for familiarization and route
qualification.
(D) Any employee holding seniority hereunder who wishes to transfer to
a position covered by this Agreement from a position not directly
associated with the dispatching function must bid on any existing
vacancy (subject to Section 10 (K)).
(E) When employees are to be displaced, furloughed, laid off, placed
"off duty without pay status," or released from the Company for
any reason of curtailment of personnel, such reduction in force
shall be in inverse order of seniority among the classification,
Flight Dispatch Officers or Assistant Flight Dispatch Officers,
subject to Section 13 of this Agreement. Each employee hereunder
who
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is to be furloughed shall be given fourteen (14) days prior
notice of such furlough; except that this notice requirement shall
not apply where the furlough is occasioned by Acts of God,
circumstances over which the Company has no control, or strikes or
other work stoppages.
Copies of furlough notices to Flight Dispatch Officers under this
paragraph will also be provided to Assistant Flight Dispatch
Officers.
In the event that part or all of the employees covered under this
Agreement are laid off due to Acts of God, circumstances over
which the Company has no control, strikes or other work stoppages,
all employees so affected will receive layoff pay and return-to-
duty pay according to the percentage of the respective pay
periods, regardless of days worked, scheduled days off or other
work cycle consideration. The dates of shutdown or layoff will
determine the proportion of normal pay where such dates fall
within the pertinent pay period. Conversely, the date of startup
or commencement of return to normal operations will determine the
proportion of normal pay for the pertinent period.
In conformance with the fourteen (14) days notice of furlough
stated above, such notices to affected Flight Dispatch Officers or
Assistant Flight Dispatch Officers with further publication to all
junior employees who may be affected shall constitute the required
notice to all those directly and possibly indirectly affected.
(F) When a Flight Dispatch Officer is furloughed or displaced at
his/her station, he will be assigned to fill a vacancy for which
there is no successful bidder. In case there is no such vacancy,
he will be permitted to displace the least senior employee in his
classification on the system who is then employed in a permanent
position covered by this Agreement, or, if unable to do the
because of his seniority ranking, he may displace the least senior
Assistant Flight Dispatcher Officer at the furloughed or displaced
employee's location or the least senior Assistant Flight Dispatch
Officer in the United States. In case he elects to displace as
above because there is no vacancy, he will be given a period of
time not less than ten (10) days after notification of his
displacement in which to so notify the Company. Provisions of
Section 10 relating to return from furlough shall apply. In the
event more than one (1) Flight Dispatch Officer is furloughed or
displaced at the same time, and they elect to displace as above
because there are no vacancies, displacement rights shall be
exercised in order of seniority. An employee on furlough shall
retain and accrue seniority for a maximum of five (5) years.
The provision (F) shall not apply in any case where the Company
does not require the services of employee for a temporary period
because of an Acts of God, circumstances over which the Company
has no control, or strikes or other work stoppages. The temporary
period shall not exceed fourteen (14) days unless an extension
thereof is mutually agreed by the Company and the Union.
(G) If an employee is assigned to fill a temporary vacancy or special
assignment, he/she shall be permitted to return to his/her former
domicile at termination of such temporary vacancy or special
assignment, and if unable to do so because of insufficient
seniority, he/she shall exercise his/her rights as set out under
(F) above. Temporary vacancies will be filled by appointment by
the Company of a person deemed qualified. When such temporary
assignments are made, the applicable expense provisions in Section
6 shall apply for the entire period.
(H) Nothing contained in this Agreement shall be construed to prevent
the Company from placing the least senior qualified employee
hereunder on special assignment.
(I) When an employee is transferred to a new domicile, either by
bidding or displacing, he/she will be advised as to the expected
date of his/her release form his/her then current domicile for the
purpose of making the physical move to his/her new domicile. In
any event the Company will do all possible to effect such release
within three (3) months of the effective transfer date.
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(J) Flight Dispatch Officers bidding on an advertised vacancy may
withdraw their bid at any time prior to the date the bids close.
Withdrawals must be made by telegram or cable addressed to the
Company official signing the bid bulletin and such with
withdrawals must be received prior to the time and date the bids
close. Once a successful bidder is determined, he must accept the
bid unless excused from doing so where the Company determines that
there is proof of extraordinary hardship.
(K) If a displacing Flight Dispatch Officer leaves the coverage of
this Agreement, or elects to remain at his/her domicile only as
provided for in (L) below, prior to the displaced Flight Dispatch
Officer's physically departing from the domicile from which he/she
has just been displaced, the latter shall be given (10) days in
which to elect by telegram either to accept the displacement or
remain in his/her position the same as if the displacing Flight
Dispatch Officer had not elected to displace. If no election is
made within such ten (10) day period, it will be assumed that the
Flight Dispatch Officer has elected to remain in his position.
(L) If a Flight Dispatch Officer previously declared excess at his/her
domicile has not physically departed from the domicile, and such
excess is retracted by the Company for any reason, the excess
Flight Dispatch Officer shall be given ten (10) days in which to
elect by telegram to either accept his/her displacement or remain
in his position the same as if no excess existed.
(M) Prior to permanent transfer involving geographical change in
location, reasonable time off shall be allowed for the purpose of
adjusting personal affairs in connection with such transfer.
(N) It is agreed that Flight Dispatch Officers within the New York
domicile may be assigned to either domestic or international
duties, or both, in accordance with the Company's requirements.
(O) Supervisory Flight Dispatch personnel may perform the flight
dispatching function for the purpose of maintaining closer
familiarization. A Flight Dispatch Officer shall not incur a loss
of pay as a result of this procedure.
(P) The Company will furnish at least six (6) months advance notice of
any consolidation or relocation of the Dispatch function to any
employee hereunder who may thereby be affected.
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SECTION 12
FURLOUGH PAY
(A) An employee hereunder who is furloughed shall receive furlough pay
as provided in paragraph (C) of this Section, subject to the
limitations and conditions set forth herein. Normally, the
allowance will commence at time of layoff; however, it will be
deferred for four (4) months when (a) the layoff is due to
seasonal schedule reduction, (b) the layoff is non-seasonal but in
the Company's judgment such layoff will be under four (4) months
duration. Recall for a period of less the forty-five (45) days
shall not break the duration of the four (4) month layoff.
(B) An employee will not be eligible for or receive furlough pay if
any or the following conditions exists:
(1) He/she has not completed at least two (2) years with the
Company on pay status.
(2) He/she remains in the employ of the Company in any position.
(3) He/she fails to exercise his seniority which would enable
him/her to remain in the employ of the Company, except where
such exercise of seniority would require moving to a new
location or require him/her to displace into a lower
classification under this Agreement.
(4) He/she has been furloughed as a result of an Act of God, a
war emergency, revocation of the Company's operation
certificate or certificates, or grounding of a substantial
number of Company aircraft for safety reasons.
(5) He/she is dismissed for cause, resigns, or retires.
(6) There is a temporary cessation of work because of a strike
or picketing.
(7) There is a temporary cessation of work because of
circumstances beyond the Company's control.
(8) The furlough is anticipated to be and actually lasts less
than four (4) months.
(C) The amount of furlough pay due under this section shall be based
on the length of actual straight time compensated service with the
Company under this Agreement, and shall be computed on the basis
of the employee's regular straight time rate at time of furlough.
An employee shall accrue furlough pay credits at the rate of two
(2) weeks of credit for each full year of compensated service to a
maximum accrual of sixteen (16) weeks of credit.
In the event of a reduction in force, a furlough may be bid and,
if bid, shall be awarded to the senior Flight Dispatch Officer so
bidding. Any senior Flight Dispatch Officer thus furloughed shall
be entitled to furlough benefits appropriate to his seniority in
accordance with this Section 12 (C).
(D) Furlough pay shall commence in accordance with paragraph (A) above
and payments for the amount due shall be at regular pay periods
and continue until all furlough pay credit is used; except that in
no event shall any furlough pay be due after effective date of
recall by the Company to any job in the classification from which
the employee was furloughed or voluntary return to a lower
classification under this Agreement or to a position not covered
by this Agreement.
(E) The furlough allowance provided herein shall be in addition to any
or all other benefits provided under this Agreement, except those
provided in Section 13, which are exclusive of this Section.
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SECTION 13
JOB SECURITY AND SEVERANCE
(A) (1) Except in an instance specifically provided for to the
contrary in this Agreement or any Letters of Agreement
executed concurrently therewith, the Company reserves the
exclusive right to determine the staffing requirements of
domiciles.
(2) An employee affected by a reduction in force or abolishment
of positions as a result of an excess of personnel in the
system, will be handled in accordance with the provisions of
this Section.
(B) In the event a domicile has surplus Flight Dispatch Officers or is
closed and vacancies exist or are created in another domicile,
such vacancies shall be subject to seniority bidding in the
following order:
(1) Active Flight Dispatch Officers covered by this
Agreement including the Director - Flight Dispatch and Area
Managers - Flight Dispatch;
(2) Any such vacancies still remaining open will be filled
by the assignment of Flight Dispatch Officers from the
domicile having the excess, in inverse order of seniority;
(3) In the event all the vacancies are not filled pursuant to
(1) and (2) above, the Company will assign in order of
seniority qualified Assistant Flight Dispatch Officers;
(4) In the event all the vacancies are not filled pursuant to
(1), (2) and (3) above, any remaining vacancies shall be
subject to bid by all the other persons whose names appear
on the seniority list.
(C) After the application of (B) above, any remaining excess dispatch
personnel shall be entitled to a severance allowance in accordance
with the following provision:
(1) Acceptance of such severance allowance shall constitute a
termination of the employer-employee relationship.
(2) The severance allowance hereunder shall be in the amount:
Years of Compensated Service
Under This Agreement Severance
5 Years 5 Months Pay
6 Years 6 Months Pay
7 Years 7 Months Pay
8 Years 8 Months Pay
9 Years 9 Months Pay
10 Years 10 Months Pay
11 Years 12 Months Pay
12 Years or More 14 Months Pay
(3) Severance shall be at the employee's rate of pay effective
the date he/she is declared excess.
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(4) Excess personnel shall have the option of placing their
severance benefits up for bid. In the event that more than
one (1) severance allowance is involved, bids for such
severance will be awarded on a strict seniority basis.
However, a successful bidder for a severance allowance
originally due another shall not receive, as his/her
severance allowance, an amount greater than that to which
the originally excess employee was entitled.
(5) Severance allowance shall be payable in bi-weekly installments.
(D) In the event that an excess Flight Dispatch Officer or Assistant
Flight Dispatch Officer, otherwise entitled to a severance
allowance in (C) above, desires to remain in the employ of the
Company, the Company will provide him/her with alternate
employment in a job outside the coverage of this Agreement, making
a best effort to provide a job and a location as suitable as
possible, The following rules shall apply to persons accepting
such alternate employment.
(1) They shall be carried on the active seniority list and
continue to accrue seniority.
(2) The rate of pay in the alternate employment shall not be
less than the employee's most recent base rate as a Flight
Dispatch Officer.
(3) Alternate employment shall be guaranteed by the Company for
a period of five years.
(4) The acceptance of alternate employment shall not preclude a
person receiving a severance allowance should he later
decide to leave such employment and resign from the Company;
however, in such case, the severance allowance to which
he/she would originally have been entitled under (C) above,
will be reduced on a straight line basis over the period of
guaranteed employment.
(5) An employee accepting alternate employment will be subject
to discharge for cause; however, his failure to perform to a
desired degree of proficiency shall not constitute just
cause for such action.
(E) The benefits afforded by this Section shall not apply to an
employee who:
(1) retires;
(2) resigns;
(3) is discharged for cause (such employee shall have access to
Section 14), or
(4) is laid off in a temporary force reduction occasioned by an
Act of God, fire, strike, grounding of a substantial number
of the Company's aircraft, work stoppages by employees of
the Company and other conditions over which the Company has
no control;
(5) elects to accept benefits pursuant to Section 12 of this
Agreement.
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SECTION 14
INVESTIGATION AND DISCIPLINE
(A) Investigation and Hearing
(1) An employee or group of employees who believe that any
provision of this Agreement affecting them has not been
properly applied or against whom the Company has preferred
charges or taken disciplinary action, may submit a request
for an investigation and hearing to the Managing Director -
Flight Operations.
(2) Such a request must be filed within thirty (30) days of the
date that the grievant has knowledge, actual or
constructive, of the facts upon which the grievance is
based, provided that prior to the filing of a grievance the
employee must either in person or through his designated
representative discuss the matter with his/her immediate
supervisor or his/her designated representative. The
requirement of discussing the matter with supervision prior
to filing a grievance does not apply in cases of discipline
or discharge.
(3) At the direction of the Managing Director - Flight Operations
an investigation and hearing as provided in paragraph (A)(1)
above shall be held with in ten (10) days after receipt of a
request. The grievant may request the hearing officer to
render a written decision without holding a formal hearing.
A formal hearing may nevertheless be conducted if, in the
opinion of the hearing officer, such procedure is warranted.
(4) Within ten (10) days after the close of such investigation
and hearing, the hearing officer shall announce his/her
decision in writing and shall furnish the grievant and his
duly accredited representative with a copy thereof.
(B) Appeal
(1) If the decision of the hearing officer is not acceptable to
the employee, the grievance and the decision thereon may be
appealed to the System Board of Adjustment in accordance
with the provisions of Section 15, provided that appeal must
be submitted within thirty (30) days after receipt of the
decision.
(2) If, as a result of any hearing or appeal therefrom as
provided herein, an employee is exonerated, such employee
shall, if he/she has been held out of service, be
reinstalled without loss of seniority and shall be paid for
such time lost in an amount which the employee would have
ordinarily earned had he/she been continued in service
during such period less any amounts received by way of
unemployment compensation or outside earnings.
(C) General
(1) An employee hereunder, who has satisfactorily completed
his/her probationary period, shall not be disciplined or
discharged without notification in writing stating the
precise charge or charges upon which the action is based nor
will an employee be discharged without a hearing between the
employee, his designated Union representative, and a
designated hearing officer. Suspension from the service of
the Company pending a hearing, which shall be prompt, shall
not be deemed a violation of this rule. This provision
shall not affect the employee's right to a timely use of the
grievance procedures as outlined above.
(2) The procedure provided herein shall not be extended to
probationary employees during their probationary period with
the Company as an employee hereunder.
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(3) If any decision made by the Company under the provisions of
this section is not appealed in the manner and within the
time limits prescribed herein for such appeals, the decision
of the Company shall become final and binding.
(4) All hearings and investigations will be conducted during
regular day shift working hours insofar as possible and
grieving employees and/or their representative shall not
suffer loss of pay while attending such hearings and
investigations.
(5) Subject to space being available, witnesses and representatives
who are employees of the Company shall receive free transportation
over the lines of the Company from the point of duty to the point
of hearing and return.
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SECTION 15
SYSTEM BOARD OF ADJUSTMENT
(A) In compliance with Section 204, Title II, of the Railway Labor
Act, as amended, there is hereby established a System Board of
Adjustment for the purpose of adjusting and deciding disputes
which may arise under the terms of this Agreement and which are
properly submitted to it.
(B) The Board shall consist of two (2) members, one (1) of whom shall
be selected by the Union and one (1) by the Company, and such
appointees shall be known as "Adjustment Board Members."
(C) The two (2) members shall serve for one year from the date of
their appointment or until their successors have been duly
appointed. Vacancies in the membership of the Board shall be filed
in the same manner as is provided herein for the selection and
appointment of the original members of the Board.
(D) The Board shall have jurisdiction over disputes between the
Company and any employee or group of employees covered by this
Agreement, growing out of the interpretation or application of any
of the terms of such Agreement. The jurisdiction of the Board
shall not extent to proposed changes in hours of employment, rates
of compensation, or working conditions covered by existing
agreements between the parties hereto.
(E) The Board shall consider any dispute properly submitted to it by
the President of Local 540 or by the Vice President - Flight
Operations of the Company when such dispute has not been
previously settled in accordance with the terms provided for in
this Agreement.
(F) Appointments of members of the Board shall be made by the
respective parties within thirty (30) days from the date of the
signing of this Agreement, and said appointees shall meet within
forty-five (45) days from the date of the signing of this
Agreement to organize and shall select a Chairman and a Vice-
Chairman. The term of office of Chairman and Vice-Chairman shall
be one (1) year. Thereafter, the Board shall designate one of its
members to act as Chairman and one to act as Vice-Chairman for one
(1) year terms. Each officer so selected shall serve for one (1)
year or until his successor has been duly selected.
The office of Chairman shall be filled and held alternately by a
Union member and a Company member of the Board. When a Union is
Chairman, a Company member shall be Vice Chairman, and vice-versa.
The Chairman or in his absence the Vice-Chairman, shall preside at
meetings of the Board and at hearings and shall have a vote in
connection with all actions taken by the Board.
After the organization meeting referred to herein, the Board shall
thereafter meet at TWA Headquarters (unless a different place of
meeting is agreed upon by the Board) during the first week in
August and the first week in February of each year, provided that
at such times there are cases filed with the Board for
consideration, and shall continue in session until all matters
before it have been considered, unless otherwise mutually agreed
upon.
(G) All disputes properly referred to the Board for consideration
shall be addressed to the Chairman. Five (5) copies of each
petition, including all papers and exhibits in connection
therewith, shall be forwarded to the Chairman, who shall promptly
transmit one (1) copy thereof to the other member of the Board,
and a copy to the Vice President - Labor Relations and one copy to
the Director - Flight Dispatch. Each case submitted shall show:
1. Question or questions at issue. 2. Statement of facts.
3. Position of employee or employees. 4. Position of Company.
When possible, joint submission should be made, but if the parties
are unable to agree upon a joint submission, then either party may
submit the dispute and its position to the Board. No matter shall
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3/1/99 Page 26
<PAGE>
<PAGE>
be considered by the Board which has not first been handled in
accordance with Section 14 of this Agreement.
When a dispute is submitted by one party only, such party shall at
the time the petition is sent to the Chairman, send a copy of such
petition to the other party by registered mail, return receipt
requested, The date of posting shall be the significant date for
purposes of the thirty (30) day period provided in Section 14 (B)
or this Agreement.
(H) Upon receipt of notice of the submission of a dispute, the
Chairman shall set a date for hearing, which shall be at the time
of the next regular meeting of the Board, or, if one (1) member
of the Board considers the matter of sufficient urgency and
importance, then at such earlier date and at such place as the
Chairman and Vice - Chairman shall agree upon, but not more than
fifteen (15) days after such request for meeting is made by one
(1) of said members, and the Chairman shall give the necessary
notices of such meeting in writing to the other Board member and
to the parties to the dispute.
Anything to the contrary herein notwithstanding, presentation of a
grievance to the two (2) man System Board of Adjustment may be
waived, provided both members of the Board mutually agree. In
such event, it shall be assumed for the purposes of this Section
that the two (2) man System Board deadlocked in the issue
presented as of the date the submission of the dispute is received
by the Board. All other provisions of this Section shall apply to
such dispute.
(I) Employees covered by this Agreement may be represented at Board
hearings by such person or persons as they may choose and
designate, and the Company may be represented by such person or
persons as it may choose and designate. Evidence may be presented
either orally or in writing or both. On request of individual
members of the Board, the Board may, by a majority vote, or shall,
at the request of either the Union representatives or the Company
representatives thereon, summon any witnesses who are employed by
the Company and who may be deemed necessary by the parties to the
dispute or by either party, or by the Board itself, or by either
group of representatives constituting the Board.
The number of witnesses summoned at any one time shall not be
greater than the number which can be spared from the operation
without interference with the services of the Company.
(J) A majority vote of all members of the Board shall be competent to
make a decision.
(K) Decisions of the Board in all cases properly referable to it shall
be final and binding upon the parties hereto.
(L) In the event of a deadlock in the case of any dispute properly
before it, it shall be the duty of the Board to endeavor to agree,
within ten (10) days from the date of such deadlock, upon a
procedure for breaking such deadlock. A majority vote of all
members of the Board shall be competent to reach such agreement,
and the action of the Board operating under such procedure shall
be final and binding upon the parties hereto.
If after the expiration of the said ten (10) days, the deadlock is
not broken or such case is not otherwise disposed of, either party
may notify the other in writing that the services of a referee are
desired. Within ten (10) days after such notification, the
members of the Board will select a referee within forty-eight (48)
hours, or failing to agree upon such referee, he shall be
appointed by the National Mediation Board.
Within thirty (30) days after the selection of the referee as
provided above, the Board and the referee shall consider and
review the prior record in the case, and may call such additional
witnesses and receive such additional evidence as the Board may
deem necessary. Either party may make written request to the
Board for the privilege of presenting additional witnesses or
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3/1/99 Page 27<PAGE>
<PAGE>
documentary evidence, and the Board, with the referee, may, in
their discretion, permit such presentations. The decision of the
Board shall be rendered within ten (10) days after the close of
the hearing, and majority vote of the members of the Board,
including the referee, shall be necessary to reach such decision,
which shall be final and binding upon the parties hereto.
The Board and the referee shall have jurisdiction only over
disputes growing out of the interpretation and application of the
terms of this Agreement, and shall have no power to add or to
subtract form the terms of this Agreement.
The expenses and reasonable compensation of the referee selected
as provided herein shall be borne equally by the parties hereto.
The time limits specified in this paragraph (L) may be extended by
mutual agreement of the parties to this Agreement.
(M) Nothing herein shall be construed to limit, restrict, or abridge
the rights or privileges accorded either to the employees or to
the employer, or to their duly accredited representatives, under
the provisions of the Railway Labor Act, as amended, and the
failure to decide a dispute under the procedures established
herein shall not, therefore, serve to foreclose any subsequent
rights which such law may afford or which may be established by
the National Mediation Board by orders issued under such law with
respect to disputes which are not decided under the procedures
established herein.
(N) The Board shall maintain a complete record of all matters
submitted to it for its consideration and of all findings and
decisions made by it.
(O) Each of the parties hereto will assume the compensation, travel
expense, and other expenses of the Board members selected by it.
(P) Each of the parties hereto will assume the compensation, travel
expense, and other expenses of the witnesses called or summoned by
it. So far as space is available, witnesses who are employees of
the Company shall receive free transportation over the lines of
the Company from the point of duty or assignment to the point at
which they must appear as witnesses and return, to the extent
permitted by law.
(Q) The Chairman and the Vice-Chairman, acting jointly, shall have the
authority to incur such other expenses as, in their judgment, may
be deemed necessary for the proper conduct of the business of the
Board, and such expense shall be borne one-half by each of the
parties hereto. Board members who are employees of the Company
shall be granted necessary leaves of absence for the performance
of their duties as Board members. So far as space is available,
Board members who are Company employees shall be furnished free
transportation over the lines of the Company for the purpose of
attending meetings of the Board, to the extent permitted by law.
It is understood and agreed that each and every Board member shall
be free to discharge his/her duties in an independent manner,
without fear that his/her individual relations with the Company or
with the employees may be affected in any manner by any action
taken by him/her in good faith in his/her capacity as a Board
member.
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3/1/99 Page 28
<PAGE>
<PAGE>
SECTION 16
GENERAL
(A) The Company shall provide each Flight Dispatch Officer with a
bound, printed copy of this Agreement.
(B) All orders to and requests from a Flight Dispatch Officer or
Assistant Flight Dispatch Officer involving transfers, promotions,
demotions, layoff, re-employment, leaves of absence, or anything
affecting his/her pay or status, shall be in writing.
(C) No work stoppages, strikes or slow-downs shall be engaged in by
employees or engaged in or authorized by the Union, and there
shall be no lockouts by the Company until the procedures for
setting disputes involving employees covered by this Agreement as
provided by the Railway Labor Act have been exhausted.
(D) All matters not covered by this Agreement shall remain exclusively
and without limitation within the prerogatives of management.
(E) Should any part hereof or any provisions herein contained be
rendered invalid by reason of any existing or subsequently enacted
legislation or act of any authorized agency of government or by
any decree of a court of competent jurisdiction, such invalidation
of such part or portion of this Agreement shall not invalidate the
remaining portions thereof, and they shall remain in full force
and effect. Upon the request of either party hereto, subsequent to
any such invalidation, invalidated portions of this Agreement
shall thereupon be renegotiated, and when agreed upon, shall be
inserted in lieu of the invalidated portions.
(F) A designated Union member who is an employee of the Company shall
be permitted to attend any formal investigation of a TWA aircraft
incident in which a Flight Dispatch Officer might be involved. It
shall be understood that the Company will not assume any direct or
indirect expense obligation related to such attendance, except
where attendance is specifically requested by the Company or
required by the FAA or CAB.
(G) The Group Medical and Dental Benefit Plan administered by the
Company authorized third party administrator, as described in the
"A World of Benefits From TWA Universal Benefit Plan" Summary Plan
Description dated September, 1997, shall be amended as follows:
(1) The In-Network deductible under the Medical Plan shall be
$200 per family.
(2) Covered Expenses under the Medical Plan shall include in-
hospital expenses incurred for newborn children.
(3) Preventive Health Care Benefits
In-Network, after a $10 office visit co-payment, the Medical
Plan shall pay for routine exams, including Pap smears and
mammograms, not to exceed the following:
Six (6) visits, including immunizations, up to 1 year of
age;
Three (3) visits per calendar year, including immunizations,
from ages 1 to 2 years;
Two (2) visits per calendar year, including immunizations,
from ages 2 to 6 years;
One (1) visit per calendar year age 6 and older.
Out-of-Network, the Medical Plan shall pay fifty percent
(50%) of expenses for routine exams, including Pap smears
and mammograms, after the annual deductible has been
satisfied, not to exceed the above schedule.
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3/1/99 Page 29
<PAGE>
<PAGE>
(4) Home Health Care Benefits
In-Network, the Medical Plan shall pay ninety percent (90%)
of expenses for up to sixty (60) home health care visits per
calendar year, after $50 of the $200 deductible has been
satisfied. Out-of-Network, the Medical Plan shall pay
seventy percent (70%) of expenses for up to sixty (60) home
health care visits per calendar year, after the full
deductible has been satisfied.
(5) Hospice Care Benefits
The Medical Plan shall pay eighty percent (80%) of hospice care
expenses, incurred in a hospice care facility or at home, after
the $200 annual deductible has been satisfied, up to a maximum
benefit of $10,000 per individual.
(6) Dental Plan Benefits
The Group Dental Plan effective May 1, 1999 includes a Preferred
Provider Organization (PPO) which provides three (3) levels of
comprehensive benefits based upon whether the service is obtained
through the PPO network (In-Network), outside the PPO network
(Out-of-Network), or through a voluntarily elected Dental Health
Maintenance Organization (DHMO). Employees who live in areas where
no PPO network is available are paid in accordance with the In-
Network benefits. In-Network shall be defined as at least two (2)
general practitioners within a ten (10) mile radius. Features of
the Group Dental Plan are as follows:
<TABLE>
IN-NETWORK (PPO)
- - ------------------------------------------------------------------------------------------------------------------
<CAPTION>
DENTAL SERVICE BENEFITS PAYABLE DEDUCTIBLE MAXIMUM
-------------- ---------------- ---------- -------
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(Class I (Preventive) 100% of network fees None $3000 per calendar year per
(Oral Exams) member inclusive of
(X-rays) Class I, II, III
- - ------------------------------------------------------------------------------------------------------------------
Class II 90% of network fees $100 per calendar year $3000 per calendar year per
(Minor Restorative) per member inclusive of member inclusive of
(Periodontal) (Fillings) Class II and III Class I, II, III
(Root Canals)
- - ------------------------------------------------------------------------------------------------------------------
Class III 60% of network fees $100 per calendar year $3000 per calendar year per
(Major Restorative) per member inclusive of member inclusive of
(Crowns) Class II and III Class I, II, III
(Bridges)
(Dentures)
- - ------------------------------------------------------------------------------------------------------------------
Class IV (Orthodontics) 50% of network fees $100 per member for life $1500 per member for life
- - ------------------------------------------------------------------------------------------------------------------
<CAPTION>
OUT-OF-NETWORK (PPO)
- - ------------------------------------------------------------------------------------------------------------------
DENTAL SERVICE BENEFITS PAYABLE DEDUCTIBLE MAXIMUM
-------------- ---------------- ---------- -------
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I (Preventive) 90% of reasonable and None $3000 per calendar year per
(Oral Exams) (X-rays) customary charges member inclusive of
Class I, II, III
- - ------------------------------------------------------------------------------------------------------------------
Class II 75% of reasonable and $100 per calendar year $3000 per calendar year per
(Minor Restorative) customary charges per member inclusive of member inclusive of
(Periodontal) (Fillings) Class II Class I, II, III
(Root Canals)
- - ------------------------------------------------------------------------------------------------------------------
Class III 50% of reasonable and $100 per calendar year $3000 per calendar year per
(Major Restorative) customary charges per member inclusive of member inclusive of
(Crowns) (Bridges) Class III Class I, II, III
(Dentures)
- - ------------------------------------------------------------------------------------------------------------------
Class IV (Orthodontics) 50% of reasonable and $200 per member for life $1500 per member
customary charges for life
- - ------------------------------------------------------------------------------------------------------------------
=========================================================================
3/1/99 Page 30
<PAGE>
<PAGE>
<CAPTION>
DENTAL HMO
- - ------------------------------------------------------------------------------------------------------------------
DENTAL SERVICE BENEFITS PAYABLE DEDUCTIBLE MAXIMUM
-------------- ---------------- ---------- -------
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class I<F*> 100% of network fees None None
- - ------------------------------------------------------------------------------------------------------------------
Class II<F*> 90% of network fees None None
- - ------------------------------------------------------------------------------------------------------------------
Class III<F*> 80% of network fees None None
- - ------------------------------------------------------------------------------------------------------------------
Class IV<F*> 60% of network fees None None
- - ------------------------------------------------------------------------------------------------------------------
<FN>
<F*>Classes for DHMO same as for PPO
</TABLE>
(7) The "Reasonable and Customary" schedule applied by a Company
authorized third party administrator to covered non-negotiated
medical expenses and to covered dental expenses shall be based on
the ninety-fifth percentile (95%)of the current database.
(8) Acute Care Prescription Drug Program
There shall be no deductible.
(9) Medical Plan Prescription Drug Benefits
The Plan will cover prescription drug expenses for drugs
administered in a hospital facility. Such expenses shall be paid
in accordance with the in-network and out-of-network Plan benefits
applicable to hospital charges. Employees living outside an INTEQ
pharmacy area will be permitted, by exception through Employee
Benefits, to submit their drug charges through the Medical Plan.
Additionally, in the event the employee must fill a prescription
outside the INTEQ pharmacy area, the employee by exception through
Employee Benefits will be permitted to submit their drug charges
through the Medical Plan. The Plan will pay eighty percent (80%)
of drug charges, after the two hundred dollar ($200.00) annual
family deductible has been satisfied, for such authorized
prescriptions filled outside an INTEQ pharmacy area.
=========================================================================
3/1/99 Page 31
<PAGE>
<PAGE>
(10) Chiropractic Care Benefits
Chiropractic benefits will be paid at eighty percent (80%) of
reasonable and customary, subject to no deductible, limited to
twenty (20) visits per member per year. These visits are not
subject to medical necessity.
(11) Continuing Medical / Dental Insurance
In the event of an active employee's death, the Company's Group
Medical and Dental Insurance coverage will be continued by the
Company for a period not to exceed twenty-four (24) calendar
months following the employee's death to the surviving spouse as
long as he/she does not remarry, and to qualified surviving
children who continue to meet the group insurance definition of
eligible dependent.
(12) Retiree Group Medical/Dental/Prescription Drug Coverage
Effective on the signing of this Basic Agreement, any flight
dispatch officers and assistant flight dispatch officers retirees
will be subject to all negotiated changes affecting active flight
dispatch officers and assistant flight dispatch officers.
(13) Right of Reimbursement
If a loss or injury is sustained by an employee or a covered
family member and if such loss or injury is caused by the act or
omission of a third party, health care benefits provided under the
Plan will be paid only on the condition that the employee or
family member (or his/her legally authorized representative if the
Plan member is legally incapable) shall agree in writing: To pay
the insurer or Plan Sponsor to the extent of such benefits
provided, upon collection of damages with respect to such Plan
member whether by action at law, settlement, or otherwise.
(H) An employee covered by this Agreement who is required to travel on
Company business or is engaged in a flight as an additional crew
member shall be covered by a standard aviation accident insurance
policy in accordance with the policy as found on pages 10.30.02
dated January 2, 1997 at subsection D(2) in the Company's Management
Policy and Procedure Manual, with a death benefit of $50,000.
(I) The Company shall provide and make available at each station where
Flight Dispatch Officers are based a bulletin board for the
Union's use. The material posted on such bulletin board shall be
limited to official Union business.
(J) (1) Employees covered by this Agreement will be granted the same
transportation privileges on the Company's system as may be
established by Company regulations for all comparable personnel.
Free and reduced fare transportation as established by Company
policy on the date of signing of this Agreement will not be
substantially changed or discontinued during the term of this
Agreement without first advising the Union of the reason therefor
and affording the Union an opportunity to confer with the Company.
(2) A Class 3 positive pass or its equivalent shall be granted
to the Section Chairman for use on Union business, subject
to applicable Federal regulations.
(3) Employees severed under the terms of this Agreement who
desire to seek employment elsewhere will, upon application,
be granted on one occasion, free one-way non-positive air
transportation on the Company's planes to any point on the
system within the continental limits of the United States,
to the extent permitted by law.
(4) Employees who at the time of retirement are covered by this
Agreement shall receive pass privileges in accordance with
the policy and regulations specified in the Company's Man-
=========================================================================
3/1/99 Page 32
<PAGE>
<PAGE>
agement Policy and Procedure Manual on pages 13.07.07 and
13.07.08 dated February 3, 1997 and 13.07.09 dated September
1, 1997, Federal law permitting.
(K) In accordance with applicable law, there shall be no discrimination
against employees covered by this Agreement because of race, color,
creed, national origin, religion, sex, age, handicap or disability,
or veteran status (including Vietnam era veteran and special disabled
veteran status).
(L) At the completion of one (1) year of service a Flight Dispatch
Officer shall have a percentage of his/her gross wages paid by
the Company into the Trust Plan for Flight Dispatch Officers and
Meteorologists of Trans World Airlines, Inc. (sometimes known as
the "B Plan") in accordance with the following schedule:
Years of Service Percentage Paid By Company
Year 2 2%
Year 3 3%
Year 4 3%
Year 5 and thereafter 5%
Plan participants shall be afforded the option of contributing a
further fixed amount of his/her gross wages not in excess of ten
(10) percent for such gross wages. The "B Plan" is and shall be
as described in the Plan Document for that plan.
(M) The Retirement Plan for Flight Dispatch Officers and Meteorologists
of Trans World Airlines, Inc. (sometimes known as the "A Plan")
is and shall be frozen in accordance with the Settlement Agreement
dated January 5, 1993 among Trans World Airlines, Inc., the
Official Unsecured Creditors' Committee of Trans World Airlines,
Inc., the Pension Benefit Guaranty Corporation, the International
Association of Machinists and Aerospace Workers, the Independent
Federation of Flight Attendants, the Air Line Pilots Association,
International, the Transport Workers Union of America, Carl C.
Icahn, the Icahn Entities and Pitchin Corp., and the Icahn Sponsor.
(N) The Section Chairman or any other elected union officer performing
official TWA business shall be granted time off from work to a
maximum of 96 hours per calendar year.
(O) Effective January 1, 2000, each employee shall have the option to
have his/her paycheck electronically deposited in a designated
financial institution. If the employee elects the electronic
direct deposit option, his/her paycheck stub will be available at
the Flight Dispatch Office.
(P) A TWA Flight Dispatch Officer or Assistant Flight Dispatch Officer
exercising his/her ACM privilege must personally list
himself/herself electronically via a CAMS entry at the airport of
departure if earlier than one (1) hour prior to the scheduled
departure time of the flight. Within one (1) hour of the scheduled
departure time of the flight, a TWA Flight Dispatch Officer or
Assistant Flight Dispatch Officer may list either electronically
via a CAMS entry at the airport of departure or on the appropriate
ACM sign-in sheet at the departure gate. However, the TWA Flight
Dispatch Officer or Assistant Flight Dispatch Officer using
electronic sign-in shall have priority.
=========================================================================
3/1/99 Page 33
<PAGE>
<PAGE>
SECTION 17
UNION SECURITY
(A) Each employee now or hereafter employed in any classification
covered by this Agreement shall, as a condition of continued
employment in such work, within sixty (60) days following the
beginning of such employment or the effective date of this
Section, whichever is later, become a member of, and thereafter
maintain membership in good standing (as herein defined) in the
Union, except as provided otherwise herein. Such condition shall
not apply with respect to any employee to whom such membership is
not available upon the same terms and conditions as are generally
applicable to any other member of his/her classification, or with
respect to any employee to whom membership is denied or terminated
for any reason other than the failure of the employee to tender he
dues uniformly required of other members of his/her classification
as a condition of acquiring or retaining membership.
The condition of payment shall be met if the amount due is
tendered to the Treasurer of the Union in person or is mailed to
him/her within the prescribed time limits.
For the purpose of this Section, "membership in good standing in
the Union" shall consist of the payment by the employee, not later
than the last day of the second following calendar month, of dues
for each calendar month, initiation fees and assessments (not
including fines and penalties), which are uniformly required of
is/her classification as a condition of acquiring or retaining
membership.
The employee may have his/her monthly membership dues deducted
from his/her earnings as provided in paragraph (N) of this
Section, or he/she may pay his/her membership dues directly to the
Union. Initiation fees must be paid directly to the Union.
(B) Any employee who has not held membership in good standing with the
Union at any time on or after the date of signing of this Agreement,
and who was in the employ of the Company previous to such date
shall not be required, as a condition of continued employment,
to become a member of the Union as set out in (A) above. However,
any such employee who, subsequent to the effective date of this
Section and during the term of this Agreement, joins the Union,
must thereafter maintain his/her membership in the Union as
provided in (A) above.
(C) Notwithstanding any other provisions contained in this Agreement,
if any person is transferred or promoted to a position in which
he/she is not covered by this Agreement, the provisions of (A)
above shall be inoperative as to such employee. This paragraph
(C) shall not apply to an employee who is transferred or promoted
on a "Temporary" or "Acting" basis.
(D) When any person holding seniority under this Agreement returns to
a position covered by this Agreement from lay-off, leave of
absence, military leave, or a position in which he/she was not
covered by this Agreement, the appropriate provisions of this
Section shall, at time of return, apply in the same manner as if
he/she had been actively employed in such position on the
effective date of this Section.
(E) When an employee becomes delinquent by not meeting the
requirements of (A) above for "membership in good standing in the
Union," the following procedure shall be observed.
(1) The Treasurer of the Union shall notify the employee by
registered letter, return receipt requested, copy to the
Company's Vice President - Labor Relations, that the employee
is delinquent in the payment of dues as specified herein
and accordingly is subject to discharge as an employee of
the Company. Such letter shall also notify the employee
that he/she make the required payments within fifteen (15)
calendar days of the date of mailing of the notice or be
subject to discharge under the terms of this Agreement. If
the notice above is not
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3/1/99 Page 34
<PAGE>
<PAGE>
received by the employee or is delayed in reaching such
employee as the result of the employee's failure to keep
both the Company and the Union informed as to his correct
mailing address, no extension in the time limit specified in
the original notice is required.
(2) Upon the expiration of the fifteen (15) day period following
the mailing of the notice in subsection (1) above, if the
employee still remains delinquent the Treasurer of the Union
may certify in writing to the Company's Vice President -
Labor Relations that the employee has failed to make the
required payment within the fifteen (15) day grace period
and is, therefore, to be discharged.
(3) Within fifteen (15) days after receipt by the Company of the
Union's certified notice in subsection (2) above that the
employee is to be discharged, the Company shall discharge
the employee from its services for his failure to pay or to
tender dues as required under this Section.
(F) If the employee discharged or to be discharged under this Section
contends that he/she is not properly subject to discharge under
the terms of this Section he/she may protest such action to the
Trans World Airlines Flight Dispatch Officer's System Board of
Adjustment provided that such protest in writing is mailed to the
Board within (10) days after the date the employee is notified of
such action. This protest shall be submitted in duplicate to the
Chairman of the System Board of Adjustment, with one copy to be
mailed in Care of the Vice President - Labor Relations, TWA at
such address as he/she may from time to time designate, and the
other copy to be mailed in care of the Treasurer of the Union. The
letter to the Chairman of the Board and both copies shall be sent
by registered mail, return receipt requested. In the event no
protest is so filed within the above time limits, the action will
be considered as proper and will be final and binding upon all
parties concerned. Within ten (10) days of receipt of such a
protest, the System Board of Adjustment will meet and consider the
dispute. A representative of the Company, a representative of the
Union, and the employee affected will be allowed to present to the
Board all evidence and argument pertinent to the issue. Prior to
the expiration of the work day following such Board meeting, the
Board will issue either a majority decision or a notice of
deadlock. If a majority decision is issued, it will be final and
binding upon all parties concerned. If a deadlock is reached, and
if at the time of the deadlock the Board cannot agree upon a
neutral to sit with the Board to decide the dispute, the Board
will immediately request the National Mediation Board to appoint a
neutral, and the Board will meet with him/her at the earliest
opportunity and decide the dispute. At the meeting the Board,
sitting with a neutral, a representative of the Company, a
representative of the Union, and the employee affected will be
allowed to present to the Board all evidence and arguments
pertinent to the issue. A majority decision of the Board,
including the neutral, will be issued within five (5) days after
such meeting and will be final and binding upon all parties
concerned. The expenses and reasonable compensation of the neutral
selected as provided herein shall be borne equally by the parties
to this Agreement.
The provisions of Section 14 shall not apply to disputes arising
under this Section, and the provisions of this Agreement
establishing a System Board of Adjustment shall apply to such
disputes except as they are superseded by the above provisions
relating to procedure for handling disputes.
The effective date of an employee's discharge under this Section
will be held in abeyance during the time that a dispute is
unsettled as to whether or not the individual is properly employed
under the provisions of the Section. If a decision is made that
the employee should be discharged, the discharge shall be effected
the day following the issuance of the decision. In the event a
reduction in force occurs during such time as an employee's status
is being protested under the provisions of this Section, such
employees will considered as having seniority under this Agreement
for purposes of effecting the reduction.
(G) Time limits specified in this Section may be extended in
individual cases only, and then only by written agreement between
the Company and the Union.
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3/1/99 Page 35
<PAGE>
<PAGE>
(H) An employee discharged under the provisions of this Section shall
be deemed to have been "discharged for just cause" within the
meaning of the terms of this Agreement.
(I) All letters and notices provided for by this Section shall be sent
by registered mail, return receipt requested. Such letters and
notices or copies sent to the Union shall be addressed to the
Treasurer of the Union at such address as he/she may from time to
time designate. Such letters and notices or copies sent to the
Company shall be addressed to the Company's Vice President - Labor
Relations at such address as he/she may from time to time
designate.
(J) Nothing in this Section shall require the Company to terminate the
employment of any employee until the services of a qualified
replacement are available except that the provisions of this
paragraph will not permit the Company to retain an employee in
its employment in excess of ninety (90) calendar days from the
date of the Union's notice given pursuant to the paragraph (E),
subsection (3) of this Section.
(K) When an employee is discharged or resigns, he/she will be
considered as a new employee for purposes of the Section if he/she
returns, at a later date, to pay status under this Agreement.
(L) Both the Union and the Company, or either of them, shall have the
right at any time, to notify individual employees directly of any
provisions of this Agreement.
(M) When new employees are hired or transferred into classifications
covered by this Agreement the Company will furnish monthly to the
Union the names, classification, point of employment and payroll
register number of such new employees. The Company will furnish
to the Union the names, present and previous classification, point
of employment and payroll register number of all employees who may
transfer out of classifications covered by this Agreement; in
addition, the Company will furnish to the Union the names,
location, payroll register number and status of employees covered
by this Agreement who terminate their payroll status for any
reason, such listing will be furnished monthly.
DUES CHECK - OFF
(N) During the life of this Agreement the Company will deduct from the
pay of each member of the Union and remit to the Union monthly
membership dues uniformly levied in accordance with the Railway
Labor Act, as amended, and the constitution and bylaws of the
Union, provided such member of the Union voluntarily executes the
agreed form, which is hereinafter included in this Agreement to be
known as "check-off form," which shall be prepared and furnished
by the Union. The Company will not be required to deduct monthly
membership dues from the pay of employees covered by this
Agreement unless (1) the Company has received a check-off form and
has not received a notice of revocation thereof, and (2) the dues
for the employee conform to the applicable dues for employees of
the classification at his/her point of the system.
ASSIGNMENT AND AUTHORIZATION
FOR CHECK-OFF UNION DUES
TO TRANS WORLD AIRLINES, INC.
I, , hereby assign to the Transport Workers
Union of America, AFL-CIO, Union dues from any wages earned
or to be earned by me as your employee and authorize and
direct you to deduct the sum of $ each month, which
are the monthly membership dues (or such monthly membership
dues as may hereinafter be established by the Union as dues
for employees in my present or future classification under
the Agreement upon notification to the Company by the
Treasurer of the Union) from one pay check per month and to
remit same to the Treasurer of the Union. This assignment
and authorization may be revoked by
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<PAGE>
<PAGE>
me in writing after the expiration of one (1) year from this
date, or upon the termination date of the applicable
collective bargaining agreement between Trans World
Airlines, Inc., and the Union in effect at the time this is
signed, whichever occurs sooner. This authorization and
direction is made subject to the provisions of the Railway
Labor Act, as amended, and in accordance with existing
Agreement between the Union and the Company.
Employee Register No.
Job Classification
Department Location
Date
Signature of Employee
Street Address
City and State
(O) When a member of the Union properly executes such check-off form,
the Treasurer of the Union shall forward the original signed copy
to the Manager - Payroll, Kansas City Administrative Center,
Kansas City, Missouri, 64195. A check-off form must be completed
in a legible manner or it will be returned to the Treasurer of the
Union for correction. Any notice of revocation as provided for in
this Section or the Railway Labor Act, as amended, must be in
writing, signed by the employee and two copies delivered by
registered or certified mail, addressed to the Treasurer of the
Union. Dues deductions will be continued until one (1) copy of
such notice of revocation is received by the Manager - Payroll,
Kansas City Administrative Center, Kansas City, Missouri 64195,
from the Treasurer of the Union. Check-off forms and notices
received by the Manager - Payroll will be stamp-dated on the date
received and will constitute notice to the Company on the date
received and not when mailed.
(P) When a check-off form, as specified herein, is received by the
Manager - Payroll fifteen (15) days or more before the issuing
date of the first bi-weekly paycheck of the month, deductions will
commence with such paycheck and continue thereafter until revoked
or canceled as provided in this Section. The Company will remit
to the Union a check in payment of all dues collected as soon
after the pay day on which deductions were made, as practicable
and within thirty (30) days. The Company remittance of Union
membership dues to the office of the Treasurer of the Union will
be accompanied by two (2) copies of a list for each location which
includes (1) names, (2) employee register numbers, (3) location
numbers, and (4) individual amounts deducted.
(Q) An employee who has executed a check-off form and who has been (1)
transferred or promoted to a job not covered by this Agreement,
(excluding transfers or promotions on a "Temporary" or "Acting"
basis), (2) who has taken a leave of absence without pay, (3) who
quits or resigns from the Company, (4) who is laid off, or is (5)
otherwise terminated from the employ of the Company, shall be
deemed to have automatically revoked his/her assignment as of the
date of such action and if he/she (1) transfers back or returns to
a job covered by this Agreement, (2) returns from leave of
absence, (3) is rehired, (4) is recalled or (5) re-employed,
further deductions of Union dues will be made only upon execution
and receipt of another check-off form.
(R) Collection of initiation fees, as well as any back dues owed at
the time of starting deductions for an employee, collection of
dues missed because the employee's earnings were not sufficient to
cover the payment of dues for a particular pay period, and
collection of dues missed because of accidental errors in the
accounting procedure, will be the responsibility of the Union and
will not be the subject of payroll deduction. It will be the
Union's responsibility to verify apparent errors with the
individual Union member before the representative contacts the
Company's Manager - Payroll.
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<PAGE>
<PAGE>
(S) Deductions of membership dues shall be made from one (1) paycheck
each month provided there is a balance in the paycheck sufficient
to cover the amount after all other deductions authorized by the
employee or required by law have been justified. In the event of
termination of employment, there shall be no obligation of the
Company to collect dues until all such other deductions (including
money claims of the Company and the Credit Union) have been made,
and such obligation to collect dues shall not extend beyond the
pay period which the employee's last day of work occurs.
(T) This Section shall be in force only so long as the Union continues
as the recognized representative of the employees under this
Agreement.
(U) The Union shall indemnify and save the Company harmless against
all forms of liability that shall arise out of or by reason of
action taken by the Company, which action was requested by the
Union under the provisions of this Section.
It is agreed that the Company will promptly notify the Union of
all claims of liability made against the Company pursuant to such
actions taken by the Company and the Company will make every
reasonable effort to defend itself against such liability.
(V) As used herein, the word "Union" means Local 540, and "Treasurer
of the Union" means Treasurer of Local 540 where applicable.
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<PAGE>
<PAGE>
SECTION 18
DURATION OF AGREEMENT
This Agreement, made pursuant to direct negotiations, shall supersede
and take precedence over all Agreements, Supplemental Agreements,
Amendments, Letters of Understanding and similar related documents
executed between the Company and the Union prior to the signing of this
Agreement, with the exception that the various Letters of Agreement and
Understanding reprinted herein shall continue in full force and effect.
This Agreement shall become effective on March 1, 1999 and shall remain
in full force and effect through December 31, 2003, and thereafter from
shall be subject to change as provided by Section 6 of the Railway Labor
Act, as amended.
TRANS WORLD AIRLINES, INC.
By: _______________________________
THE TRANSPORT WORKERS
UNION OF AMERICA, AFL-CIO
By: _______________________________
Michael Bakalo
International Vice President
Director-Air Transport Division
Local 540, Transport Workers Union
of America, AFL-CIO
By: _______________________________
Paul Supko
President
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 1
The Flight Dispatch Officers and Assistant Flight Dispatch Officers,
Transport Workers Union of America, AFL-CIO, and Trans World Airlines,
Inc., hereby agree:
1. That Flight Dispatch Officer and Assistant Flight Dispatch
Officer personnel will continue to perform those functions which
normally fall within their classification with regards to flights
which are solely military in nature and their cargo composed
entirely of military commodities or personnel where the carriage
of the traffic on such flights is certified by the United States
Department of Defense as in accordance with the national interest
even though Flight Dispatch Officer and Assistant Flight Dispatch
Officer personnel withdraw from commercial service because of
unresolved labor disputes of any type, including disputes arising
out of negotiations for a new contract.
2. That pay and other benefits for Flight Dispatch Officer and
Assistant Flight Dispatch Officer personnel assigned to perform
their duties in connection with such military flights, pursuant to
paragraph 1, hereof, will:
(a) for any period prior to the opening date of the
contract between the parties be governed by the then
existing contract unless modified by agreement of the
parties, and
(b) after the opening date of the contract be governed by
either the contract that existed at or prior to the
said labor dispute or the contract negotiated as a
settlement of such dispute, whichever is more
beneficial to the Flight Dispatch Officer and
Assistant Flight Dispatch Officer personnel.
3. That this is consistent with the long standing policy and
performance of the Flight Dispatch Officer and Assistant Flight
Dispatch Officer personnel of the Transport Workers Union of
America, AFL-CIO.
4. In the event any Flight Dispatch Officer or Assistant Flight
Dispatch Officer is assigned to perform duties in connection with
a military flight pursuant to the terms of paragraph 1 hereof, the
Flight Dispatch Officers and Assistant Flight Dispatch Officers,
Transport Workers Union of America, AFL-CIO, will be given a
certification by the Vice President - Industrial Relations or
his/her designed that such flight will be exclusively for military
purposes.
5. That to the extent necessary to effectuate its purpose, this
understanding constitutes an amendment and modification of the
collective bargaining agreement between the parties hereto and,
notwithstanding any other provisions of the said collective
bargaining agreement, this agreement shall continue indefinitely
but may be revoked by either of the parties hereto upon two (2)
years prior notice. However, if after the certification provided
in paragraphs 1 and 4 the Company should willfully combine
military and non-military traffic during the period of any strike,
the Union will terminate this supplemental agreement forthwith.
Proof of such violation shall be established by the collective
bargaining agreement, but such procedure shall be accelerated to
provide for a hearing and final decision within twenty-four (24)
hours after the grievance is submitted. Should it be impossible
to
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<PAGE>
<PAGE>
achieve a final decision within such twenty-four (24) hour
period, such period shall be extended to the extent necessary.
Signed this 21st day of July, 1970.
For TRANS WORLD AIRLINES, INC.
/s/David J. Crombie
Vice President - Industrial Relations
WITNESS:
/s/ J.C. Hilly
/s/ T.R. Poole
For FLIGHT DISPATCH OFFICERS
and ASSISTANT FLIGHT DISPATCH
OFFICERS in the service of
TRANS WORLD AIRLINES, Inc.,
as represented by the TRANSPORT
WORKERS UNION OF
AMERICA, AFL-CIO.
/s/ James F. Horst
International Executive Vice
President
WITNESS:
/s/ Patrick J. McGahan
/s/ Howard J. Swift
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 2
Between
TRANS WORLD AIRLINES, INC.
and
FLIGHT DISPATCH OFFICERS AND
ASSISTANT FLIGHT DISPATCH OFFICERS
in the employ of
TRANS WORLD AIRLINES, INC.
as represented by
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
THIS LETTER OF AGREEMENT is make and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended, by and
between Trans World Airlines, Inc., hereinafter known as the "Company"
and the Flight Dispatch Officers and Assistant Flight Dispatch Officers
in the employ of Trans World Airlines, Inc., as represented by the
Transport Workers Union of America, AFL-CIO, hereinafter known as the
"Union."
NOW THEREFORE, it is mutually agreed and understood by the between the
parties to this Letter Agreement that:
1. The Company may assign any Flight Dispatch Officer (not Assistant
Flight Dispatch Officer) listed on the active TWA-TWU Seniority
List, except those listed under 10(G) of the current Agreement, to
the management position of Manager - Passenger Services, without
regard to Flight Dispatch Officer seniority, and still utilize his
services in flight dispatching functions as necessary. No Flight
Dispatch Officer shall be required to accept such and assignment.
Such an shall be made at the sole discretion of the Company. It
is understood that the assignments shall be limited to the
locations outside of the continental United States. It is
understood that in the event the dispatching function subsequently
is totally eliminated at a station, and the individual is offered,
and accepts the opportunity to remain as a Manager - Passenger
Services, the provisions of the Letter of Agreement shall no
longer apply to the individual or the position so long as the
dispatching function is not required.
2. Assignments made under paragraph 1 above shall be subject to the
following conditions:
(a) Expenses and employee benefits will be in accordance
with MP&P provisions as applied to the position of
Manager - Passenger Services but shall be no less than
those specified in the effective TWA-TWU Agreement.
(b) A Flight Dispatch Officer so assigned shall retain and
continue to accrue seniority as in Section 10(G) of
the effective TWA-TWU Agreement.
(c) An employee so assigned shall have the displacement
rights listed in Section 10(K) of the effective TWA-
TWU Agreement, except that the one (1) year limitation
therein shall be waived in the event his assignment is
terminated by the Company. For purposes of applying
this paragraph, is shall be understood that "last
previous domicile" shall mean the last location where
he held a permanent position as a Flight Dispatch
Officer prior to his initial appointment under this
Letter of Agreement.
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<PAGE>
<PAGE>
(d) An employee while so assigned shall not be subject to
seniority displacement or furlough under the terms of
the effective TWA-TWU Agreement, unless he becomes the
least senior man on the system. In the latter event,
his/her displacement shall be effected as follows:
The Company shall determine if an assignment under
this Letter of Agreement is still desired. If such
assignment is desired, the replacement shall be
effected through assignment of an employee under the
provisions of this Letter of Agreement.
(e) An employee so assigned shall come under the terms of
Section 11(A) and of the effective TWA-TWU Agreement.
(f) An employee while so assigned shall come under the
terms of the effective TWA-TWU Agreement only to the
extent specifically stated herein.
3. An assignment made under paragraph 1 above of any employee holding
a bid at the location of the assignment shall not result in the
creation of a vacancy unless the Company determines that additional
Flight Dispatch covering is required in which event the terms of
the Agreement shall apply.
4. An assignment made under paragraph 1 above shall not result in the
displacement of a Flight Dispatch Officer holding a bid at the
location of such assignment.
5. Vacation and other relief for this assignment may be provided
by another Flight Dispatch Officer in accordance with relief
arrangements as appropriate to the location.
This Letter of Agreement shall become effective as of date of signing
and shall remain in full force and effect concurrently with the basic
agreement between the Company and the Union, signed July 21, 1970.
IN WITNESS WHEREOF, the parties have signed this Letter of Agreement
this 21st day of July l, 1970.
For TRANS WORLD AIRLINES, INC.
/s/ David J. Crombie
Vice President - Industrial Relations
WITNESS:
/s/ J.C. Hilly
/s/ T.R. Poole
For TRANSPORT WORKERS UNION
OF AMERICA, AFL-CIO
/s/ James F. Horst
International Executive Vice
President
WITNESS:
/s/ Howard J. Swift
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 3
TRANS WORLD AIRLINES, INC.
July 21, 1970
Mr. Howard J. Swift
200 Lexington Avenue, Apt, 5A
Oyster Bay, New York 11771
Dear Mr. Swift:
This will record our understanding and agreement concerning the
interpretation of Section 10(H) of the Basic Working Agreement signed
July 21, 1970.
In the event a Flight Dispatch Officer covered by the Working Agreement
is accepted for assignment with an associated airline (e.g., Ethiopian
and Saudi Arabian Airlines) he/she must at the time he/she accepts such
employment elect one of the following:
(a) Accept the re-employment rights granted by the
Management Policy and Procedure Manual to TWA
employees assigned to associated airlines in effect at
the date of his election.
(b) Or in lieu thereof to be covered by Section 10(H) of
the Working Agreement and be placed on the inactive
seniority list according to the conditions of such
paragraph. Such election is to be irrevocable and in
writing and made at the time that he/she is accepted
for such assignment.
In the event an employee elects to be covered by paragraph (b) above, it
hereby is mutually understood and agreed that as to such employees only,
Section 10, paragraph (H) of the Agreement shall be interpreted to cover
employees accepting assignment with associated airlines whether or not
such assignment is directly associated with the dispatch function.
It is further understood and agreed that the provisions of this letter
shall become effective as of the date of its signing and shall apply
only to those employees accepting such assignment subsequent to the said
date of signing.
So that we may have a record of our mutual agreement, if you concur with
the above, would you please sign below and return the original to my
office.
Very truly yours,
/s/ W.E. Malarkey
W.E. Malarkey
Staff Vice President - Labor Relations
AGREED AND ACCEPTED:
/s/ Howard J. Swift
Section Chairman
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 4
Mr. Eugene F. Downey
President, Local 540
Transport Workers Union
142 Mineola Avenue
Roslyn Heights, New York 11577
Dear Mr. Downey:
This will confirm our understanding during the recently concluded
negotiations regarding the application of Section 13 to those employees
of the FDO seniority list as of this date who are not entitled to a
severance allowance and further who, as a result, are not eligible for
alternate employment.
The Company agrees to extend, on a exception basis, the provisions of
Section 13 to the below-named individuals:
T.M. Amato K.F. Finn
J. Delany T.P. Monegan
P.J. Emmert J.F. Venturi
F.G. Ferry A.M. Weatherby
The severance allowance applicable to these individuals will be one (1)
month's pay for each year of completed service under the Agreement until
they have individually attained eligibility for severance allowance
under the provisions of Section 13(C)(2).
If this is in accord with our understanding, please sign in the space
provided.
Very truly yours,
/s/ J.C. Hilly
AGREED AND ACCEPTED:
/s/ Eugene F. Downey
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 5
September 23, 1977
Mr. E.M. Mitchell
Air Transport Division Director
International Vice President
Transport Workers Union of America
1980 Broadway
New York, New York 10023
RE: Flight Dispatch Officers
and Meteorologists
Dear Mr. Mitchell:
This will confirm our understanding reached during negotiations to amend
the Group Insurance Plan for the subject employees.
Specifically, the Plan will be a amended so as to provide the same
benefits and benefit levels as for ground Management Employees of TWA as
set forth in the Group Insurance Plan Booklet for Management Employees
and as improved from time to time.
Further, the Pension Supplement provision of the Long Term Disability
which was specifically excluded under the Amendment dated December 8,
1975 and my letter dated May 13, 1976 to Mr. E.F. Downey is hereby
included in such Disability Plan. However, the Pension Supplement will
be effective only for those employees who go on LTD on or after October
1, 1977.
This sick leave allowance, although mentioned in the Group Insurance
Plan Booklet for Management Employees, is not considered to be an
insured benefit. The sick leave allowance for Dispatch Officers and
Meteorologists is governed by the provisions of the appropriate working
agreements as amended.
Except as otherwise provided herein as it relates to the Pension
Supplement, the benefits in this Letter of Agreement became effective
January 1, 1976 with the exception of the Long Term Disability which
became effective on December 3, 1975.
This letter shall cancel and supersede my letter of May 13, 1976 to Mr.
E.F. Downey.
If this accords with our understanding, please sign in the space
provided.
Very truly yours,
/s/ J.C. Hilly
J.C. Hilly
Vice President Labor Relations
AGREED AND ACCEPTED
/s/ E.M. Mitchell
E.M. Mitchell
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 6
October 10, 1994
Mr. Paul Supko
President, Local 540
Transport Workers Union
2033 Deer Park Avenue
Deer Park, New York 11279
Dear Mr. Supko:
This letter supersedes the Letter of Agreement on the same subject dated
February 21, 1984.
This shall confirm our understanding regarding the application of Letter
of Agreement No. 5 and Section 4 (F) of the Flight Dispatch Officers
Agreement. Specifically, the Group Insurance Plan for Flight Dispatch
Officers shall be amended so as to provide the same benefits and benefit
levels as are provided for Ground Management Employees of TWA, as may be
improved or reduced by the Company.
Sincerely,
William L. Schecter
Vice President, Labor Relations
AGREED AND ACCEPTED:
Paul Supko
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 7
September 1, 1992
Mr. Paul Supko, President
Local 540
Transport Workers Union of America
2033 Deer Park Avenue
Deer Park, New York 11729
Dear Mr. Supko:
This shall confirm our agreement that Flight Dispatch Officers subject
to random testing as required by the Department of Transportation or
other governmental agency shall, to the extent practical, be scheduled
for such testing on Company time. To the extent this is not practical,
they shall receive one (1) hour of straight time pay as compensation for
such testing.
If the foregoing correctly reflects your understanding of our agreement,
please sign where indicated below.
Very truly yours,
Alan R. English
Director, Labor Relations
AGREED AND ACCEPTED:
______________________________
By: Paul Supko
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 8
September 1, 1992
Mr. Paul Supko, President
Local 540
Transport Workers Union of America
2033 Deer Park Avenue
Deer Park, New York 11729
Dear Mr. Supko:
This shall confirm our agreement that a Flight Dispatch Officer may
elect to take his/her Birthday Holiday on any day within the same
calendar year, provided that; 1) the Flight Dispatch Officer notifies
management and the person(s) preparing the monthly work schedule in
advance of the date the work schedule for the month during which the
Flight Dispatch Officer wishes to take his/her Birthday Holiday schedule
is required to be posted and, 2) that there is sufficient Relief
Dispatcher time available to cover the requested day.
If the foregoing correctly reflects your understanding of our agreement,
please sign where indicated below.
Very truly yours,
Alan R. English
Director, Labor Relations
AGREED AND ACCEPTED:
______________________________
By: Paul Supko
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 9
September 1, 1992
Mr. Paul Supko, President
Local 540
Transport Workers Union of America
2033 Deer Park Avenue
Deer Park, New York 11729
Dear Mr. Supko:
This letter supersedes the Letter of Agreement on the same subject dated
November 16, 1990.
Trans World Airlines, Inc. (TWA, The Company)and the Transport Workers
Union of America (TWU) hereby agree to amend the TWA/TWU contract to
provide for a recall bypass option, as described below, for Flight
Dispatch Officers and Assistant Flight Dispatch Officers on furlough
status. Whenever the term "Flight Dispatch Officer" is used hereunder,
it is understood to mean Flight Dispatch Officer or Assistant Flight
Dispatch Officer.
1. Flight Dispatch Officers on furlough status may file a
recall bypass option. This option may be updated at any
time prior to the announcement of recall to the Flight
Dispatch Officer.
2. Whenever a recall is announced, furloughed Flight Dispatch
Officers falling within the recall number, who do not have a
recall bypass option on file, will not be eligible for
bypass.
3. Furloughed Flight Dispatch Officers falling within the
recall number, who have a recall bypass option on file, will
not be offered recall but will be passed over and the next
most senior Flight Dispatch Officer, without a recall bypass
option on file, shall be offered recall.
4. Flight Dispatch Officers, who withdraw their recall bypass
option, shall be offered a recall during the next recall on
the basis of their seniority.
5. The Company shall not, under any circumstances, be required
to recall any Flight Dispatch Officers, when a recall is not
required, regardless of the seniority of the Flight Dispatch
Officer involved.
6. All recall bypass options shall terminate as soon as the
Company offers recall to the last furloughed Flight Dispatch
Officer, i.e. the most junior Flight Dispatch Officer on
furlough status.
7. Upon termination of all recall bypass options as described
in 6 above, Flight Dispatch Officers on furlough status
previously having a recall bypass, shall be recalled, as
required, in inverse seniority order.
8. Any Flight Dispatch Officer utilizing a recall bypass option
shall be subject to all provisions of the TWA/TWU contract
applicable to Flight Dispatch Officers on furlough status
including, but not limited to, the provisions contained
within Section 10(I) concerning the forfeiture of accrued
seniority, if a Flight Dispatch Officer remains on furlough
status over five (5) years.
9. Any Flight Dispatch Officer returning from recall bypass
will return to the cycle that has been vacated until the
next dispatch bid.
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<PAGE>
<PAGE>
If the above correctly sets forth our agreement, please execute both
copies of this letter and return one fully executed copy to the
undersigned.
Very truly yours,
Alan R. English
Director, Labor Relations
AGREED AND ACCEPTED:
___________________________
By: Paul Supko
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<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 10
September 26, 1994
Mr. William L. Schecter
Vice President Labor Relations
Trans World Airlines, Inc.
John F. Kennedy International Airport
Terminal A
Jamaica, New York 11430
RE: FLIGHT DISPATCH OFFICERS SENIORITY
Dear Mr. Schecter:
This shall confirm our understanding that the following section was
overlooked by both the Union and Company during the Contract
Negotiations in 1992. During the TWA/Ozark merger in 1986, a Memorandum
of Understanding was signed amending Section 10(C) of the contract.
Accordingly, Section 10(C) of the TWA-TWU Agreement shall be amended to
read as follows:
Seniority shall begin to accrue from the date of appointment to a
position covered by this Agreement. Seniority shall continue to accrue
only for the period that the employee is on pay status with the Company
or a position directly associated with the dispatching function, except
as provided in Sections 9, 11, and 13.
This letter shall cancel and supersede Section 10 (C) as printed in the
contract signed September 1, 1992.
Sincerely,
Paul Supko
President TWU Local 540
AGREED AND ACCEPTED
By: Mr. William L. Schecter
Vice President, Labor Relations
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<PAGE>
LETTER OF AGREEMENT NO. 11
October 10, 1994
Mr. Paul Supko, President
Local 540
Transport Workers Union of America
2033 Deer Park Avenue
Deer Park, New York 11729
Dear Mr. Supko:
After TWA shall have "staffed according to the needs of the service",
there shall be a reduction in TWA's overtime cost. Such reduction shall
be accomplished through the modification of local agreements, to provide
that overtime will be utilized only on an "as needed" basis.
Very truly yours,
William L. Schecter
Vice President, Labor Relations
AGREED AND ACCEPTED
By: Paul Supko
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<PAGE>
LETTER OF AGREEMENT NO. 12
October 10, 1994
Mr. William L. Schecter
Vice President Labor Relations
Trans World Airlines, Inc.
John F. Kennedy International Airport
Terminal A
Jamaica, New York 11430
Dear Mr. Schecter:
This letter shall confirm our agreement that all letters of discipline
shall become void two years following their date of issuance, unless
mutual agreement is reached to remove any such letter from a Flight
Dispatch Officer's file at an earlier date.
If the foregoing accurately states the terms of our agreement, please
sign this letter where indicated.
Sincerely,
Paul Supko
President TWU Local 540
AGREED AND ACCEPTED
By: Mr. William L. Schecter
Vice President, Labor Relations
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LETTER OF AGREEMENT NO. 13
October 11, 1994
Mr. William L. Schecter
Vice President Labor Relations
Trans World Airlines, Inc.
John F. Kennedy International Airport
Terminal A
Jamaica, New York 11430
Dear Mr. Schecter:
This letter shall confirm our agreement that the Company shall enter
into reciprocal agreements with other airlines, by which the Flight
Dispatch Officers of such other airlines, will be afforded ACM 17
authority on TWA contingent upon such other airlines granting ACM
authority to TWA's Flight Dispatch Officers on comparable terms and
conditions.
If the foregoing accurately states the terms of our agreement, please
sign this letter where indicated.
Sincerely,
Paul Supko
President TWU Local 540
AGREED AND ACCEPTED
By: Mr. William L. Schecter
Vice President, Labor Relations
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LETTER OF AGREEMENT NO. 14
October 6, 1994
Mr. Paul Supko, President
Local 540
Transport Workers Union
of America
2033 Deer Park Avenue
Deer Park, New York 11729
Re: ESOP Stock
Dear Mr. Supko:
This letter will confirm our agreement concerning the allocation of
additional shares of TWA stock to participants of the Trans World
Airlines, Inc. Employee Stock Ownership Plan who are represented by the
Transport Workers Union.
The allocation of the 1,255,343 shares of stock in the ESOP was
performed on the basis of the relative value of each participant's pay
concession during the first year (approximately September 1, 1992
through approximately August 31, 1993) of the three-year concession
period under the Agreements in Principle with the unions.
Because the pay concession of TWU-represented employees was only 8% of
earnings during the applicable period while the pay concession of other
participants in the ESOP was 15%, it is agreed that the accounts of TWU-
represented employees will be credited with the number of additional
shares necessary to bring them to parity with the other participants.
Such additional shares will be allocated following September 1, 1995
from stock then available in the ESOP based on forfeitures which will
have occurred since the original allocation. Such additional allocation
shall occur prior to any other allocation of forfeited shares.
If the foregoing accurately states the terms of our agreement, please
sign this letter where indicated.
Very truly yours,
William L. Schecter
Agreed and accepted:
___________________________
Paul Supko
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LETTER OF AGREEMENT NO. 15
between
TRANS WORLD AIRLINES, INC.
and
FLIGHT DISPATCH OFFICERS AND
ASSISTANT FLIGHT DISPATCH OFFICERS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
CHECK DISPATCH OFFICER
This will confirm our agreement concerning the Check Dispatch Officer
position(s).
1. The Company shall maintain sole discretion in determining the
requirement for and assignment of Check Dispatch Officer(s),
including but not limited to the duration of such requirement and
assignment.
2. The Check Dispatch Officer position(s) shall be a covered
position(s) under the TWA-TWU Collective Bargaining Agreement,
signed March 1, 1999 ("CBA").
3. A bid shall be posted to notify all Flight Dispatch Officers of
such position(s).
4. Although all Flight Dispatch Officers shall be eligible to bid for
the Check Dispatch Officer position(s), assignment shall be made
at the sole discretion of the Company, without regard to Flight
Dispatch seniority and other provisions of the CBA.
5. In addition to regular Flight Dispatch Officer duties, the Check
Dispatch Officer(s) shall perform duties related to the evaluation
of Flight Dispatch Officers and Assistant Flight Dispatch
Officers.
6. Each month a Check Dispatch Officer shall receive an override of
one hundred dollars ($100.00) in addition to his/her regular rate
of pay.
7. This Letter of Agreement shall become effective as of the date of
signing and shall remain in full force and effect concurrently
with the CBA, and is subject to Section 6 of the Railway Labor
Act.
If the foregoing correctly reflects your understanding of our agreement,
please sign where indicated below.
AGREED AND ACCEPTED:
/s/ /s/
_________________________________ ____________________________
By: Michael Bakalo Terry L. Hayes
Vice President International Director, Labor Relations
Transport Workers Union
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LETTER OF AGREEMENT NO. 16
between
TRANS WORLD AIRLINES, INC.
and
FLIGHT DISPATCH OFFICERS AND
ASSISTANT FLIGHT DISPATCH OFFICERS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
TMU / DISPATCH COORDINATOR
This will confirm our agreement concerning the TMU / Dispatch
Coordinator position(s).
1. The Company shall maintain sole discretion in determining the
requirement for and assignment of TMU / Dispatch Coordinator(s),
including but not limited to the duration of such requirement and
assignment.
2. The TMU / Dispatch Coordinator position shall be a covered
position under the TWA-TWU Collective Bargaining Agreement,
effective March 1, 1999 ("CBA").
3. A bid shall be posted to notify all Flight Dispatch Officers of
the TMU / Dispatch Coordinator position(s).
4. Although all Flight Dispatch Officers shall be eligible to bid for
the TMU / Dispatch Coordinator position(s), assignment shall be
made at the sole discretion of the Company, without regard to
Flight Dispatch seniority and other provisions of the CBA.
5. If a Flight Dispatch Officer is selected for the TMU / Dispatch
Coordinator position(s), he/she shall retain and continue to
accrue seniority in accordance with Section 10(G) of the CBA.
6. The TMU / Dispatch Coordinator shall perform duties related to the
dispatch function, including but not limited to establishing
procedures and monitoring the operation as directed by the Company
and in accordance with the Flight Operations Policy Manual (FOPM),
Chapter 8, Section I, paragraph C.
6. Each month the TMU / Dispatch Coordinator shall receive an
override of one hundred dollars ($100.00) in addition to his/her
regular rate of pay.
7. This Letter of Agreement shall become effective as of the date of
signing and shall remain in full force and effect concurrently
with the CBA, and is subject to Section 6 of the Railway Labor
Act.
If the foregoing correctly reflects your understanding of our agreement,
please sign where indicated below.
AGREED AND ACCEPTED:
/s/ /s/
_________________________________ ____________________________
By: Michael Bakalo Terry L. Hayes
Vice President International Director, Labor Relations
Transport Workers Union
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<PAGE>
LETTER OF AGREEMENT NO. 17
between
TRANS WORLD AIRLINES, INC.
and
FLIGHT DISPATCH OFFICERS AND
ASSISTANT FLIGHT DISPATCH OFFICERS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
TRAINING DISPATCH OFFICER
This will confirm our agreement concerning the Training Dispatch Officer
position(s).
1. The Company shall maintain sole discretion in determining the
requirement for and assignment of Training Dispatch Officer(s),
including but not limited to the duration of such requirement and
assignment.
2. The Company shall maintain sole discretion in determining whether
the Training Dispatch Officer position is a management position or
a covered position under the TWA-TWU Collective Bargaining
Agreement, effective March 1, 1999 ("CBA").
3. A bid shall be posted to notify all Flight Dispatch Officers of
the Training Dispatch Officer position(s).
4. Although all Flight Dispatch Officers shall be eligible to bid for
the Training Dispatch Officer position(s), assignment shall be
made at the sole discretion of the Company, without regard to
Flight Dispatch seniority and other provisions of the CBA.
5. If a Flight Dispatch Officer is selected for the Training Dispatch
Officer position(s), he/she shall retain and continue to accrue
seniority in accordance with Section 10(G) of the CBA.
6. The Training Dispatch Officer shall perform duties related to the
training of Flight Dispatch Officers and Assistant Flight Dispatch
Officers as directed by the Company.
7. Each month the Training Dispatch Officer shall receive an override
of one hundred twenty-five dollars ($125.00) in addition to
his/her regular rate of pay.
8. This Letter of Agreement shall become effective as of the date of
signing and shall remain in full force and effect concurrently
with the CBA, and is subject to Section 6 of the Railway Labor
Act.
If the foregoing correctly reflects your understanding of our agreement,
please sign where indicated below.
AGREED AND ACCEPTED:
/s/ /s/
____________________________ _________________________________
By: Michael Bakalo Terry L. Hayes
Vice President International Director, Labor Relations
Transport Workers Union
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LETTER OF AGREEMENT NO. 18
TRANS WORLD AIRLINES, INC.
RELOCATION BENEFITS
FOR
FLIGHT DISPATCH OFFICERS
AND
ASSISTANT FLIGHT DISPATCH OFFICERS
IN CONNECTION WITH THE GEOGRAPHIC
RELOCATION
OF THE
STL FLIGHT DISPATCH OFFICE
Effective March 1, 1999
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TRANS WORLD AIRLINES, INC.
GEOGRAPHIC RELOCATION OF THE FLIGHT DISPATCH OFFICE
TABLE OF CONTENTS
-----------------
Eligibility and Approval 1
Arranging for the Move 2
Authorization to Receive Relocation Benefits:
Letter of Commitment 2
Expense Reimbursements/Payments 3
Lump-Sum Relocation Allowance 3
Passes 3
Home Purchase Closing Cost Reimbursement 4
Home Rental Brokers' Fees Reimbursement 5
Lease Cancellation Reimbursement 5
Shipment of Household Goods 5
Home Sale Assistance 6
Duplicate Carrying Costs 7
Home Management Assistance In Lieu of Home Sale Assistance 7
Automobile Shipment 7
Mileage Allowance 8
Income Tax Reporting 8
Appendix "A"
Letter of Commitment
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TRANS WORLD AIRLINES, INC.
GEOGRAPHIC RELOCATION OF THE FLIGHT DISPATCH OFFICE
THIS POLICY APPLIES TO RELOCATION WITHIN THE UNITED STATES,
----------------------------------------------------------
The provisions of this policy will expire twelve (12) months following
the actual geographic relocation of the entire STL Flight Dispatch
Office or twelve (12) months following the actual geographic relocation
of the individual transferee to the new location, whichever is earlier.
ELIGIBILITY AND APPROVAL
- - ------------------------
When authorized by appropriate levels of management, the provisions of
this policy are available to Flight Dispatch Officers and Assistant
Flight Dispatch Officers whose job location is being geographically
relocated more than 75 miles distant from STL International Airport.
The provisions of this Relocation Package shall only apply to Flight
Dispatch Officers and Assistant Flight Dispatch Officers;
1. who are permanent residents of the St. Louis Metro area as the
official notification by the Company to the Union of its intent to
relocate the Flight Dispatch Office;
AND
2. who have elected to relocate his/her primary household from its
present location to within 75 miles of the new Flight Dispatch
Office location.
Flight Dispatch Officers and Assistant Flight Dispatch Officers who
elect furlough in lieu of relocation will not be entitled to the
provisions of this Relocation Package.
The provisions of this Flight Dispatch Officer and Assistant Flight
Dispatch Officer relocation policy are designed to help offset some of
the out-of-pocket expenses associated with the geographic relocation of
the transferee's principal residence. Transferees are eligible for
these provisions for twelve months from the date of job transfer, unless
-----------------------------------------------
otherwise indicated in the following material. Relocation benefits will
not be extended beyond 12 months from the effective date of the
employee's job transfer.
For purposes of this policy, "transfer" refers to the geographic change
of the Flight Dispatch Officer's or the Assistant Flight Dispatch
Officer's STL Flight Dispatch Office job location; "relocation" refers
to the transferee's personal move to the new Flight Dispatch Office
location.
Transferees are urged to review the attached benefits carefully to be
fully informed of actual covered expenses. If further assistance or
clarification is required, please contact TWA's relocation staff in
Kansas City as follows:
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 1
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TWA RELOCATION STAFF CONTACTS
-----------------------------
Telephone: 816-464-6412
Teletype: MKCICTW
FAX: 816-464-6162
Dispatch Address: Director - Compensation
Level 5, KCAC
U.S. Mail Address: Director - Compensation
Trans World Airlines, Inc.
P.O. Box 20007
11500 Ambassador Drive
Kansas City, Missouri 64195
ARRANGING FOR THE MOVE
- - ----------------------
The employee and his/her supervisor will arrange the
administrative details of the employee's relocation. The cost of
the move will be charged to the employee's Cost Center at the New
Location.
AUTHORIZATION TO RECEIVE RELOCATION BENEFITS: LETTER OF COMMITMENT
- - ------------------------------------------------------------------
A Letter of Commitment signed by the employee, the authorizing
departmental officer (Corporate officer, organizational level "C"
or higher) and the Director Labor Relations is required to permit
a transferring employee to receive benefits covered by this
policy. The Letter of Commitment provides that TWA may recover
all or a percentage of relocation expenses in the event the
employee decides voluntarily to leave TWA or voluntarily remove
himself/herself from the Flight Dispatch Officer or the Assistant
Flight Dispatch Officer position within eighteen months of his/her
relocation. A sample Letter of Commitment is included at the end
of this package.
The Letter of Commitment must be fully completed, signed and
approved. It may then be forwarded to the Director -
Compensation, Level 5, KCAC. NONE OF THE PROVISIONS OF THE
RELOCATION POLICY MAY BE USED, AND NO EXPENSES CAN BE APPROVED,
UNLESS A PROPERLY APPROVED LETTER OF COMMITMENT HAS BEEN FILED
WITH THE DIRECTOR - COMPENSATION.
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 2
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EXPENSE REIMBURSEMENTS / PAYMENTS
- - ---------------------------------
Employees for whom an approved Letter of Commitment is on file may
report covered relocation expenses on Form G-118 Expense Report.
Except for lump sum allowances, substantiating receipts are
required. Each expense report must be approved/signed by the
supervisor(s) in accordance with limits of authority contained in
Section 01.34 of the MP&P manual. Completed, approved expense
reports should be sent for final approval to TWA's Director -
Compensation, Level 5, KCAC, MKC.
Expenses are to be charged to the employee's cost center, new
location, and MANAGEMENT ACCOUNT 575. Final approval for expenses
associated with the relocation of Flight Dispatch Officers and
Assistant Flight Dispatch Officers lie with the Compensation
Section of the Employee Relations Department. The Director -
Compensation will send all approved expense reports to Accounts
Payable for payment.
LUMP-SUM RELOCATION ALLOWANCE
- - -----------------------------
Employee
--------
Each transferring employee will be provided with a lump-sum
allowance of $2,500. This allowance is designed to help defray
the costs of any temporary living and incidental expenses
associated with the job transfer and residence relocation.
Transferees do not have to account for this money, and it may be
------
used for any purpose. However, no additional payments or
-------------------------
reimbursements will be provided for hotels, meals, car rental,
-------------------------------
telephone calls, taxis, or other relocation expenses except as
specifically covered in other sections of this policy.
Transferees may apply for their lump-sum relocation allowance by
completing Form G-118 Expense Report and having it approved within
normal limits of authority. The approved expense report is to be
processed as described earlier under "Expense
Reimbursements/Payments."
Spouse
------
An additional lump-sum allowance of $250 will be provided to help
defray the costs of home finding at the new location by the
transferee's spouse. This allowance may be obtained in the same
manner as described above for the employee's lump-sum allowance,
and may in fact be added to Form G-118 Expense Report covering the
employee's allowance.
PASSES
- - ------
The transferee and spouse may each receive up to three (3) Class 6
service-charge-free round-trip passes to locate housing at the new
job location. In addition, the transferee, spouse and eligible
dependents may each receive a one-way Class 6 service-charge-free
pass to establish residence at the new location. Trips are
subject to the approval of the transferee's immediate supervisor,
and passes should be issued by the transferee's local pass issuing
office.
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 3
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<PAGE>
HOME PURCHASE CLOSING COST REIMBURSEMENT
- - ----------------------------------------
Transferees who owned and occupied a home in their former
location, and who choose to purchase a home within a 75-mile
radius of their new job location, will be reimbursed for specific
necessary expenses, in amounts that are customary for the area,
that are incurred in connection with the purchase of a home. The
maximum total amount that will be reimbursed under this provision
is 5% of the purchase price of the home but not more than $15,000.
Items that are eligible for reimbursement are:
Attorney's fees.
Document stamps.
Document preparation fees.
Recording and transfer fees.
Sale discount points and/or loan origination fees(s) up
to 3% of amount of mortgage.
Title search and title insurance.
Appraisal.
Credit Report.
Property survey (up to 5 acres).
Radon inspection.
Mechanical inspection.
Flood letter, where required.
The following list covers some of the items that are specifically
EXCLUDED from reimbursement:
EXCLUDED: Taxes.
EXCLUDED: Insurance.
EXCLUDED: Interest..
EXCLUDED: Loan application fee(s).
EXCLUDED: Underwriting Fee.
EXCLUDED: Notary fees.
EXCLUDED: Escrow fees; tax service fees.
EXCLUDED: Federal Express, express mail or delivery fees.
EXCLUDED: Power of Attorney fee or charges.
EXCLUDED: Utilities.
EXCLUDED: Inspections other than mechanical and radon
inspections.
EXCLUDED: Property survey in excess of one home.
EXCLUDED: Property survey in excess of 5 acres.
EXCLUDED: Expenses associated with second or subsequent
mortgage loans.
EXCLUDED: Expenses associated with non-conventional
financing.
EXCLUDED: Expenses associated with purchase of commercial
property.
EXCLUDED: Expenses associated with purchase of income
property.
Exclusion of certain expenses from reimbursement is not intended
as a judgment of those expenses. Rather, the reimbursement policy
simply reflects TWA's intent to assist employees with some of the
most common types of costs incurred in a typical relocation.
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 4
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<PAGE>
Employees may receive advance payment of their estimated
reimbursable home purchase closing costs by submitting an
appropriately approved Form A-70 Requisition for Check or Cash no
earlier than ten days prior to the closing date. The payment may
be made locally. To avoid salary deduction, Form G-118 Expense
Report, accompanied by a copy of the HUD statement and any other
necessary documentation and receipts, must be submitted
immediately following the home closing. The completed and
approved expense report should be processed as described earlier
under "Expense Reimbursements/Payments."
HOME RENTAL BROKERS' FEES REIMBURSEMENT
- - ---------------------------------------
For transferees who rent rather than buy a primary residence
within a 75-mile radius of their new job location, TWA will
reimburse the actual fees charged by the real estate broker up to
the standard amount for such fees in the area. The transferee may
apply for reimbursement by processing Form G-118 Expense Report as
described earlier under "Expense Reimbursements/Payments."
LEASE CANCELLATION REIMBURSEMENT
- - --------------------------------
Transferees whose current primary residence is a rental dwelling
may not be able to cancel their lease without financial penalty.
In such cases, TWA will reimburse lease settlement charges up to
three months' rent. Supporting receipts and documentation must
accompany the expense report. The transferee may apply for
reimbursement by processing Form G-118 Expense Report as described
earlier under "Expense Reimbursements/Payments."
SHIPMENT OF HOUSEHOLD GOODS
- - ---------------------------
Although transferees are offered van line service, those who
choose to move their own households rather than use the van line
selected by TWA will be reimbursed for the cost of van or truck
rental, fuel and tolls. No reimbursement will be made for costs
of labor, insurance, packing or enroute expenses.
For those transferees who choose to use van line service, TWA will
arrange for and cover the cost of shipment of up to 15,000 pounds
of personal household goods and personal belongings, including
charges for packing and unpacking, shipping, insurance and, if
necessary, up to 30 days' storage. The van line will require
payment in cash, money order, or certified check for any charges
not authorized by TWA, such as excess weight or storage charges
beyond 30 days.
Arrangements will be handled by TWA's Materials Management section
at MCI, telephone 816-891-4167, longline code MCIFDTW. Materials
Management will select a moving company. The moving company
selected by Materials Management will contact the transferee to
arrange for a meeting in the home, at which time they will
estimate the weight of the shipment and establish move date(s).
Transferees may initiate their household goods shipment by direct
entry from a PARS terminal into the DRS (Direct Reference System)
as follows:
GM/MNT/MHS/59/18 .... lst page GM/MNT/MHS/59/32 .... 2nd page
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 5
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<PAGE>
<PAGE>
All blanks must be filled in, including transferee's full name and
payroll register number, and the teletype code of the approving
authority (organizational level "C" or higher) who approved the
transferee's Letter of Commitment.
NOTE:
- - -----
* Transporting and care of pets is the employee's
responsibility.
* Even though van lines do their best to meet both pickup and
delivery dates, they will not always pick up the goods on
the requested date, particularly during their peak season.
The employee should allow some time for delay with regard to
the date the property must be vacated.
* TWA will authorize normal appliance service at origin only.
(Normal appliance service includes preparation for shipment
of water bed, clothes washer and dryer, and automatic ice-
maker in refrigerator.)
* TWA does not pay for the disassembly, reassembly, or setting
up of outdoor items such as playhouses, slides, swing set,
collapsible swimming pools, etc. Neither does TWA pay for
indoor items such as hobby equipment, home workshops,
photographic darkrooms, radio shacks, etc.
Further instructions and precautions for effecting a household
shipment are attached as Appendix A.
HOME SALE ASSISTANCE
- - --------------------
To assist the transferee with the cost of selling his/her primary
residence at the former location, after the sale closing, TWA will
reimburse for the following reasonable and actual closing costs
not to exceed 10% of the sale price of the home, to a maximum of
$50,000:
* Sales commission or broker's fee paid to authorized real
estate agency.
NOTE: As an alternative to reimbursement of sales
commission or broker's fee paid to an authorized real
estate agency, the transferee who chooses to sell
his/her home without using the services of a Realtor
will be given a lump sum allowance in an amount equal
to 5% of the sale price of the home.
* Seller's attorney's fees.
* Mortgage prepayment penalty.
In addition, TWA will reimburse up to $2,000 for incentives
provided at the discretion of the seller to encourage home sale
(e.g., bonus to selling agent, home owner's warranty for the
buyer, participation in buyer's closing costs, home improvement).
The transferee may apply for this reimbursement by processing Form
G-118 Expense Report as described earlier under "Expense
Reimbursements/Payments." Supporting receipts and documentation,
--------------------------------------
including the standard HUD statement, must accompany the expense
----------------------------------------------------------------
report.
------
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 6
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<PAGE>
DUPLICATE CARRYING COSTS
- - ------------------------
Transferees who are actively attempting to sell their home through
a Realtor may be reimbursed for the following expenses, as
applicable, of maintaining the lesser of either their former or
new residence to a maximum of $1,000 per month for the first three
(3) months following job transfer, to a maximum of $750 per month
for the next three (3) months, and to a maximum of $500 per month
for the next six (6) months following job transfer:
* First mortgage interest (not principal).
* Real estate taxes.
* Hazard/homeowners insurance on property.
* Utilities.
* Rent.
Carrying cost reimbursement will not begin until the transferee
has purchased or leased (on a long term basis) residence property
at the new location. Reimbursement may be obtained by submitting
Form G-118 Expense Report with appropriate documentation for both
former and new residences including receipts, copy of agreement
with listing broker, and a lease or closing statement on the new
residence. The approved expense report may be processed as
described earlier under "Expense Reimbursements/Payments."
HOME MANAGEMENT ASSISTANCE IN LIEU OF HOME SALE ASSISTANCE
- - ----------------------------------------------------------
Transferees who own their primary residence in their current
location and who plan to move their primary residence to their new
location but choose not to sell their current home may elect home
management assistance in lieu of home sale assistance.
Compensation will be three annual payments of $1,500 each.
To obtain payment, an expense report containing departmental
approval within normal limits of authority must be submitted
annually to TWA's Director - Compensation, Level 5, KCAC. The
second annual payment request may be submitted on the first
anniversary of the first payment, and the third annual payment
request may be submitted on the second anniversary of the first
payment. Documentation supporting continued ownership (e.g.,
current tax receipt) must be submitted with the expense report.
AUTOMOBILE EXPENSES
- - -------------------
One automobile may be shipped or driven to the new location at
TWA's expense, as described below. No shipment or expense
allowance is provided for a second car.
Automobile Shipment
-------------------
On moves exceeding 1,200 miles, the transferee may arrange
to have his/her car shipped via a TWA over-the-road truck on
a space available basis. Delivery normally occurs within
two to three weeks. To arrange car shipment, the new
supervisor must send a teletype message to MCIFDTW
(Materials Management at MCI, telephone 816-891-4167) giving
the following information:
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 7
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<PAGE>
<PAGE>
* Employee's name, payroll number, current address, and office
and residence telephone numbers (including area codes).
* Location and address to which the employee is transferring.
* Year, make, color and license plate number of car to be
shipped.
* EXACT DATE when car will be at the TWA facility for
shipment.
Mileage Allowance
-----------------
On moves under 1,200 miles or if the transferee elects to
drive the car instead of shipping, mileage allowance
reimbursement shall be at the rate of $.20 per mile for the
most direct AAA mileage route between the transferee's
former and new job cities. Form G-118 Expense Report may be
processed as described earlier under "Expense
Reimbursements/Payments." The AAA mileage should be
indicated under item #30 on the Expense Report.
INCOME TAX REPORTING
- - --------------------
Under Federal, State and some local income tax laws, certain
relocation allowances and expense reimbursements received by
transferring employees are considered earned income and must be
reported to taxing authorities by TWA. Amounts paid to or for a
transferee for these items will be reported on Form W-2 or other
tax form as required. Transferees are encouraged to contact their
own tax consultants since some expenses in these categories may be
deductible from income for tax purposes. Transferees are
encouraged to retain receipts for expenses they may incur in
connection with their relocation to assure they are able to take
maximum advantage of any allowable deductibles. Transferees may
also wish to obtain and review IRS publication 521 which describes
Federal tax law applicable to relocation expenses.
TWA FLIGHT DISPATCH OFFICER AND ASSISTANT FLIGHT DISPATCH OFFICER
RELOCATION POLICY
..... PAGE 8
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<PAGE>
<PAGE>
APPENDIX A
----------
Shipment of Household Goods
---------------------------
Instructions and Precautions
----------------------------
1. VAN LINES
---------
The Interstate Commerce Commission requires van lines to provide
each customer with a pamphlet entitled "Summary of Information for
Shippers of Household Goods" which explains the customer's
responsibilities and the van line's liabilities. The pamphlet
should be carefully read before the move. A customer's failure to
----
comply with responsibilities and duties outlined therein could
jeopardize his/her rights to recover damages resulting from
mishandling by the carrier.
2. INSURANCE
---------
The household shipment is released to the van line at $.60 per
pound per article. TWA will not pay for any additional insurance
shown on the bill of lading. TWA insurance automatically
supplements the van line's insurance up to $50,000.
The van line will insure the entire shipment, to the described
limit, with the following exceptions:
a. Accounts, bills, deeds, evidence of debt. currency,
letters of credit, passports, railroad or other
tickets, money, notes, securities, bullion, precious
stones, philatelic or numismatic property. (Note that
TWA does not insure shipment of these items.)
b. Automobiles, motorcycles, boats over 16 feet in
length, animals. (Note that TWA neither pays for
shipment of nor insures shipment of these items.)
You may, at your own expense, insure the items described in a. and
b. above under a separate 'marine floater' type of policy.
3. PACKING AND LOADING
-------------------
Van lines charge separately for the packing of containers, the
packing of the goods at origination, and the unpacking of the
goods at destination. TWA will pay these charges. Transferees
may, however, wish to unpack their own goods. To prevent
overcharging, the quantity and size of containers unpacked by the
customer must be indicated on the van line bill of lading.
The van driver uses an inventory sheet to list each piece of
furniture, each appliance and each container by type and size in
cubic feet. Overseeing of the inventory sheet may be the most
-------------------------------------------------
important precaution of the entire move. The driver will usually
---------------------------------------
enter code letters indicating the condition of the furniture and
appliances; i.e., marred, scratched, gouged, rubbed, cracked,
soiled, torn, etc. The customer must challenge any false or
exaggerated description. If the driver will not change it, the
customer must note his/her protest on the inventory sheet. The
customer must also assure that the quantity of containers packed
matches the quantity listed on the inventory sheet. All copies of
the inventory sheet should be signed by the customer and the
driver.
APPENDIX A .................................... PAGE 1
=========================================================================
3/1/99 Page 70
<PAGE>
<PAGE>
APPENDIX A
----------
Shipment of Household Goods
---------------------------
Instructions and Precautions
----------------------------
The customer must tell the van line representative the date
delivery is desired at destination, and make sure the date is
---------------------
inserted on the bill of lading. If the goods cannot be delivered
------------------------------
by the date specified, the van line is required to notify the
customer, so the customer must advise the representative of
his/her local contact. If extra expenses are incurred because of
late delivery, retain receipts and forward them to the van line
destination agent. Standard reimbursement is reasonable lodging
and 50% of meal expenses.
The customer should carry any valuables personally. Appraisals
should be made of any antique furniture, paintings, or oriental
rugs going into the van. The shipper will need this appraisal as
evidence if a claim is filed.
4. UNPACKING AND UNLOADING
-----------------------
One person should count the containers coming off the van, and
another should check furniture and other items for damage. If the
customer unpacks any or all of the goods, write on the bill of
lading the quantity and size of the containers to be unpacked,
with the notation "SUBJECT TO FURTHER INSPECTION FOR CONCEALED
LOSS OR DAMAGE." If damage is found during the unpacking process,
leave the damaged item in the container and contact the van line
representative immediately.
5. LOSS AND DAMAGE
---------------
The customer should not sign the inventory sheet or bill of lading
until any loss or damage has been noted or the notation "SUBJECT
TO FURTHER INSPECTION FOR CONCEALED LOSS OR DAMAGE" has been
written on the bill of lading. The customer's failure to describe
loss or damage on the inventory sheet or bill of lading could
relieve the van line of liability for loss or damage subsequently
discovered.
6. CLAIMS AND CARRIER LIABILITY
----------------------------
The customer must file any claim for loss or damage in writing
with the van line within nine months after delivery. Van line
tariffs typically require that the carrier be immediately notified
of all claims for concealed and/or external damage and be given
reasonable opportunity to inspect alleged external damage or
concealed damage in original package. Further, typically the
carrier's liability shall not exceed the cost of repairing or
replacing the property lost or damaged with materials of like kind
and quality not exceeding the actual cash value of the property at
the time and place of loss, with due allowance for depreciation or
deterioration howsoever caused; and the carrier shall not be
liable for loss or damage occurring after the property has been
delivered to or receipted for by the consignee or shipper, or the
authorized agent of either.
APPENDIX A ...................................... PAGE 2
=========================================================================
3/1/99 Page 71
<PAGE>
<PAGE>
LETTER OF COMMITMENT
--------------------
To: Director - Compensation
Trans World Airlines, Inc.
P.O. Box 20007
Kansas City, Missouri 64195
Subject: Relocation Commitment
---------------------
This will confirm that I am a transferee from the STL Flight Dispatch
Office to the ______________________________________________________
and that I am eligible for relocation provisions as specified in the TWA
Flight Dispatch Officer and Assistant Flight Dispatch Officer Relocation
Policy.
I understand that all costs incurred by TWA in connection with my
relocation are reimbursable to TWA if I voluntarily leave TWA's employ
or if I voluntarily remove myself from the Flight Dispatch Officer or
the Assistant Flight Dispatch Officer position less than eighteen (18)
months from the date of my job transfer. If I voluntarily leave TWA's
employ or a TWA Flight Dispatch Officer or the Assistant Flight Dispatch
Officer position within that eighteen month period, I will repay TWA for
the costs of my relocation as follows:
Proportion of
Months of service completed at new location relocation costs
prior to voluntary termination or to be repaid to
voluntary demotion TWA
------------------------------------------- -----------------
Less than three months 100%
Three or four months 83%
Five or six months 72%
Seven or eight months 61%
Nine or ten months 50%
Eleven or twelve months 39%
Thirteen or fourteen months 27%
Fifteen or sixteen months 16%
Seventeen or less than eighteen months 5%
LETTER OF COMMITMENT.................................... PAGE 1
(Continued)
=========================================================================
3/1/99 Page 72
<PAGE>
<PAGE>
TWA is authorized to withhold part or all of any amounts which may be
due to TWA, as described above, from any salary, expense or other
payments that may otherwise be due to me upon my voluntary separation
from TWA or my voluntary removal from the Flight Dispatch Officer or the
Assistant Flight Dispatch Officer position.
Name:____________________________________
Current Primary Residence (Please print)
(Former Location):
Signature:_______________________
______________________________
(No. and Street) Title:___________________________
Transfer Effective:______________
______________________________
(City and County) Payroll Register Number:_________
New Location:
______________________________
(State and Zip Code)
Immediate Supervisor's Name:___________________
Department Head Approval: _______________________________________________
Corporate Officer (Level C) or higher Print Name
_______________________________________________
Signature
_______________________________________________
Title
Approved: _______________________________________________
Director Labor Relations
=========================================================================
3/1/99 Page 73
<PAGE>
<PAGE>
LETTER OF AGREEMENT NO. 19
between
TRANS WORLD AIRLINES, INC.
and
FLIGHT DISPATCH OFFICERS AND
ASSISTANT FLIGHT DISPATCH OFFICERS
in the service of
TRANS WORLD AIRLINES, INC.
as represented by
TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
PREPARATION OF WORK SCHEDULES
This will confirm our agreement concerning the preparation of work
schedules.
The preparation of Flight Dispatch Officer work schedules and vacation
bid awards shall be handled by Flight Dispatch Officer Bargaining Unit
personnel. Such work shall be accomplished on Company time. Policies
and procedures pertaining to the work schedules, staffing levels,
vacation bids and awards remain the sole prerogative of management. The
work schedule and vacation bids as developed by the Bargaining Unit
personnel shall be presented to management for approval at least three
(3) days in advance of the required publication/posting date.
If the foregoing correctly reflects your understanding of agreement,
please sign where indicated below.
AGREED AND ACCEPTED:
/s/ /s/
____________________________ _________________________________
By: Michael Bakalo Terry L. Hayes
Vice President International Director, Labor Relations
Transport Workers Union
=========================================================================
3/1/99 Page 74
<PAGE>
<PAGE>
PARTICIPATIVE MANAGEMENT
------------------------
The Company is committed to a radical redesign of its processes,
organization, and culture to deliver the optimal product to the
traveling public. The Company believes that employee participation in
its long range and strategic planning and day-to-day operational
decision making is the foundation of its re-engineering efforts. The
free flow of information in an open decision-making process with
participation by all parties is the cornerstone of Management's
commitment.
The Company is committed to a re-engineering of the management structure
so as to eliminate unnecessary levels of management focusing decision
making authority for all purposes at that level of the organization
where the necessary knowledge resides and where implementation takes
place. To the extent required, the Company will amend its Management
Policies and Procedures Manual to reflect this structure.
A. FILLING OF POSITIONS IN FLIGHT OPERATIONS
The Company will amend its Management Policies and Procedures
Manual, to the extent required, to provide for the timely posting
on office bulletin boards of all open positions up to and
including the Director level within Flight Dispatch, including the
General Manager-Flight Operations. When such postings are made,
the Company will also inform the TWU and will solicit comments and
recommendations from the TWU on candidates for the open
position(s).
B. PRODUCTIVITY TASK FORCE
The Company will amend its Management Policies and Procedures
Manual to provide for the continuation of the Productivity Task
Force as in place on the date of this Agreement. The Productivity
Task Force will have broad authority to request information and
investigate waste and inefficiencies. Recommendations of the
Productivity Task Force will be promptly reviewed and acted upon
by the Company.
C. PARTICIPATIVE MANAGEMENT EDUCATION
The Company will provide training, including seminars or other
educational opportunities, for the Company's management relating
to employee participation. All of the Company's management
personnel will be required to attend such training within twelve
months. TWU will require TWU representatives serving on the Task
Force Committees or Productivity Task Force to attend such
training on a similar basis. These seminars will be consistent
with the Policy Statement and will be reasonably acceptable to the
TWU and the Company. TWU and the Company will pay the respective
cost of attendance for their representatives.
D. MANAGEMENT CONSULTANT
By March 31, 1995, the Company will retain a management consulting
firm to fully review and analyze the Company's management
structure. The members of the Task Force will be entitled to meet
regularly with this firm following its retention and to review its
results prior to implementation.
=========================================================================
3/1/99 Page 75
<PAGE>
<PAGE>
E. EMPLOYEE INCENTIVE PROGRAMS
The Company, through the Task Force, agrees to implement incentive
programs which reward employees for suggestions or job performance
which increase the efficiency and productivity of the Company.
F. ENFORCEMENT
The Company's Management Policies and Procedures Manual will be
amended to prohibit taking any disciplinary or discriminatory
action against any employee because of such employee's
participation on any Task Force, Committee or the Productivity
Task Force or because of such employee's suggestions regarding or
criticism of the Company's management.
=========================================================================
3/1/99 Page 76
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
- - ------- ----
I Purpose of Agreement 2
II Scope of Agreement 2
III Status of Agreement 3
IV Union Security 3
V License and Exams 4
VI Safety and Training 6
VII Equipment 8
VIII Personal Time Off / Sick Leave Reporting 9
IX Leave of Absence 9
X Vacations 12
XI Holidays 15
XII Funeral Leave 17
XIII Free Transportation 17
XIV Work Stoppage, Strikes, Picketing and
Lockouts 17
XV Representation and Grievance Procedure 17
XVI Board of Adjustment 20
XVII Discipline and Discharge 23
XVIII Seniority 24
XIX Jury Duty 27
XX Savings Clause 27
XXI Health & Welfare Benefits 27
XXII Pensions 28
XXIII Paid-for Time 29
XXIV Duration 30
Schedule A - Wages 31
Letter of Agreement 32
Health and Welfare and Pension Rates 34
<PAGE>
<PAGE>
THIS AGREEMENT Is made and entered into this day of
1998 in accordance with accordance the provisions of Title II of the
Railway Labor Act, as amended by "Company," and the INTERNATIONAL
BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF
AMERICA LOCAL NO. 41, hereinafter referred to as the "Union," and
representing all employees of the Company employed as over-the-road
truck drivers and hostlers as certified by the National Mediation Board
on December 13, 1951.
ARTICLE I
Purpose Of Agreement
(a) The purpose of this Agreement is, in the mutual interest
of the company and the employees, to provide for the
operation of the services of the company under methods
which will further, to the fullest extent possible, the
safety of air transportation, the efficiency of operation,
and the continuation of employment under reasonable
working conditions. It is recognized by this Agreement to
be the duty of the Company and the employees to cooperate
fully, both individually and collectively, for these
purposes.
(b) No employee covered by this Agreement will be interfered
with, restrained, coerced, or discriminated against by the
Company, its officers or agents, because of membership in
or lawful activity on behalf of the Union, nor shall
either the Company, its Officers, or agents, or the Union,
its officers, or agents, discriminate against any employee
or member on account of race, color, creed, national
origin, sex, religion, handicap, age, or disability. This
paragraph (b) reaffirms the long standing mutual practice
of both of the parties to this Agreement.
(c) It is understood that wherever in this Agreement employees
or jobs are referred to in the masculine gender, it shall
be recognized as referring to both male and female
employees.
ARTICLE II
Scope
(a) All work the Company performs that is generally recognized
as over-the-road truck driving shall be within the
jurisdiction of the international Brotherhood of
Teamsters, Chauffeurs, Warehousemen and Helpers of
America, and is covered by this Agreement.
2
<PAGE>
<PAGE>
(b) This Agreement shall not apply to any over-the-road truck
driving operation to be performed, wholly or in part,
outside the Continental United States.
(c) Employees covered by this Agreement shall be governed by
all reasonable rules, regulations, and orders previously
or hereafter issued by the Company which are not in
conflict with the terms and conditions of this Agreement
and which have been made available to the affected
employees prior to becoming effective. Nothing in these
rules and regulations and/or this Agreement shall be
construed to limit or deny to any employee herein covered
an rights or privileges to which he may be entitled under
the provisions of the Railway Labor Act, as amended, or to
deny him recourse to any action he might have pursuant to
any other applicable Federal statute.
ARTICLE III
Status of Agreement
This Agreement constitutes the total agreement between the Company and
the Union affecting the class and craft of employees covered herein.
The Union specifically recognizes and agrees that no past, current or
future practice shall be construed or argued to in any way bind the
Company or restrict any of its rights under this Agreement. This
Agreement expressly supersedes any prior collective bargaining
agreements, amendments, Agreements in Principal, and letters of
agreement between the Company and the Union.
ARTICLE IV
Union Security
(a) The Employer recognizes and acknowledges that the Union is
the exclusive representative of all employees in the
classification of work covered by this Agreement for the
purposes of the Railway Labor Act, as amended, as
certified by the National Mediation Board on December 13,
1951.
(b) All present employees who are members of the Union on the
effective date of this Agreement shall remain members of
the Union in good standing as a condition of employment.
All present employees who are not members of the Union and
all employees who are hired hereafter shall become and
remain members in good standing of the Union as a
condition of employment on or after the 31st day
following the beginning of their employment or on and
after the 31st day following the effective date of this
Agreement, whichever is the later.
3<PAGE>
<PAGE>
(c) When the Employer needs additional men, it shall notify
and give the Union equal opportunity with all other
sources to provide suitable applicants, but the Employer
shall not be required to hire those referred by the Union.
ARTICLE V
Licenses and Examination
(a) All employees shall be required to comply with all
applicable federal and state licensing and examination
requirements.
(b) In the event an employee receives a traffic citation for a
moving violation which would contribute to a suspension or
revocation, or suffers a suspension or revocation of his
right to drive the Employer's equipment for any reason,
he must promptly notify the Company in writing. Failure
to so notify the Company will subject the employee to
disciplinary action up to and including discharge. If
such license suspension or revocation comes as a result of
the employee complying with the Company's instruction
which results in a succession of size and weight
penalties, or because he complied with the Company's
instruction to drive Company equipment which is in
violation of D.O.T. regulations relating to equipment, or
because the Company's equipment did not have either a
speedometer or a tachometer in proper working order, and
if the employee has notified the Company of the citation
for such violation as above mentioned, the Company shall
provide employment for such suspension for the entire
period thereof.
(c) It shall be the Company's right to determine the physical
and mental requirements of any job covered by this
Agreement. Further, the Company shall have the right to
determine whether an individual employee's physical and
mental conditions meet the physical and mental requirement
of is job. Employees entering the service of the Company
shall be required to undergo a physical examination. All
regular and probationary employees shall be required to
undergo annual physical examinations. However, if the
Company determines such is necessary, an employee may be
required to undergo more frequent physical or mental
examinations to determine whether the employee continues
to be qualified to perform his job.
(1) The costs incurred for such examinations shall be
borne by the Company.
(2) The Company shall notify each employee by letter
dated on or about the employees birthday that the
employee is required to undergo an annual D.O.T.
physical examination and shall further inform the
employees as to the identity and location of the
medical examiner. It shall be the employee's
responsibility to make the necessary appointment and
to undergo such physical within fourteen days
following his birthday.
(a) The employee shall not be required or
permitted to schedule such physical
examination during his working hours.
4
<PAGE>
<PAGE>
(b) The Company shall pay the employee, at this
regular hourly rate, only for time spent at
the place of examination in excess of two
hours.
(3) At any time the Company suspects that an employee may not
be physically or mentally qualified to perform his job or
that an employee jeopardizes the safety of the Company's
operations, the employee may be required to undergo a
physical or mental examination to determine his fitness
for duty.
(a) Such examination shall be scheduled by the Company
and shall take place within two working days from
the time that the decision is made by the Company to
require such an examination, and the employee shall
be promptly notified of the time and location of the
examination.
(b) The employee shall be paid at his regular hourly
rate for all time incurred at the place of the
examination.
(c) If, as a result of the Company's having required the
employee to undergo such an examination, the
employee is held out of service and after such
examination the Company determines that the employee
was physically and mentally capable of performing
his duties and did not jeopardize the safety of the
Company's operations at the time he was held out,
the Company shall be responsible for any wages the
employee would have earned during the period in
which he was held out of service.
(4) If the Company's doctor's findings as to the employee's
physical or mental condition are contested by the
employee's doctor, then the dispute as to the employee's
physical or mental condition and fitness for duty shall be
submitted for resolution to an impartial third party
medical doctor. The decision of the impartial third party
doctor as to the employee's physical and/or mental
condition and fitness for duty shall be final. The
Company shall then determine, based upon the findings of
the impartial third party doctor, whether the employee
meets the requirements of his job. If it is determined at
this time or subsequently through the grievance procedure
that the Company has improperly held the employee out of
service, the employee shall be entitled to back wages for
such period as he was not permitted to work and was
physically and mentally able to do so.
5
<PAGE>
<PAGE>
(5) The physical or mental examinations referred to above
shall take place in the Kansas City Metropolitan Area
unless the Company and the employee agree otherwise
ARTICLE VI
Safety and Training
(a) The Company agrees to maintain safe, sanitary and
healthful conditions and to provide proper first aid and
safety equipment on all trucks.
(1) No employee will be required to engage in any
activity involving known dangerous conditions of
work or danger to person or property or in violation
of any applicable statute or court order, or in
knowing violation of a government regulation
relating to safety of person or equipment. The term
"dangerous conditions of work" shall not relate to
the type of cargo which is hauled or handled.
(2) Employees shall not be required to operate any
equipment on the public streets or highways that is
not in a safe operating condition, including but not
limited to equipment which is acknowledged to be
overweight or which is not equipped with the safety
appliances prescribed by law, except as is provided
in paragraph (b) below.
(a) It shall not be a violation of this Agreement
if an employee refuses to operate equipment he
reasonably believes to be in an unsafe
operating condition or not properly equipped
with the safety appliances condition unless
such refusal is later determined to have been
unjustified.
(b) All equipment which is refused because it is
believed to be in an unsafe prescribed by law
shall be appropriately tagged so that it
cannot be used by any other driver on the
public streets or highways, but for transfer
to the local maintenance station, until the
reason for the refusal has been corrected or
the refusal has been determined to be
unwarranted.
6
<PAGE>
<PAGE>
(b) All employees are required to abide by all safety
requirements imposed by the Company and the Company's
equipment leasing agent. Further, all employees are
require to comply with all applicable federal, state and
local statutes, ordinances and regulations affecting the
operation of motor vehicles, safety and health.
(1) Any employee directed by the Company to
perform his job in a manner which would
violate this paragraph shall not be subject to
discipline for complying with such directive.
(2) Employee are required to utilize the seat
belts and safety harnesses provided at all
times while their vehicle is in motion.
(c) Any employee involved in an incident or accident which
results in damage to the Company equipment or other
property shall immediately, where possible, report to a
dispatcher or supervisor on duty at the home terminal and
also where applicable to the local supervisor on duty upon
the employees arrival at the next Company station.
(1) When directed by the Company, the employee
shall complete all forms provided by the
Company regarding the incident or accident and
shall provide all information known to the
employee that may be requested.
(2) Employees shall be responsible for the
completion of any accident, injury or damage
report required of driver of a motor vehicle
by any state or local authority as a result of
an incident or accident involving Company
vehicles or equipment and further shall be
responsible for informing the Company that
such a report was required and completed.
Where possible the employee shall request a
copy of such report be mailed to the Company.
(3) Where an employee has been involved in an
incident or accident resulting in damage to
persons or property, he shall at that time
make all reasonable attempts to ascertain as
much information regarding such incident or
accident as possible as directed by the work
rules and policies of the Company.
(d) Drivers shall immediately following the end of a trip
complete a vehicle condition report as provided by the
Company. A copy of such report shall be given to the
Company, and a copy shall remain in the vehicle for
inspection by the next driver operating such unit.
7
<PAGE>
<PAGE>
(e) Each employee shall complete training regarding the
operation of the Company's equipment as may be required by
the Company or the Company's equipment leasing agent,
prior to the operation by that employee of such equipment.
Refusal by an employee to complete either first-time
training or recurrent training regarding the operation of
the Company's equipment as he may from time to time be
directed to undergo shall result in that employee being
suspended from duty until such time as he has successfully
completed such training.
ARTICLE VII
Equipment
(a) The Company shall provide equipment in compliance with the
current U.S. D.O.T. Federal Motor Carrier Safety
Regulations.
(1) All equipment shall be marked for height.
(2) No employee shall be required to drive a tractor
designed with the cab under the trailer.
(3) The suspension system and shock absorbers of the
vehicle shall be provided and maintained as
recommended by the manufacturer of the equipment.
(4) Any violation of the above, including maintenance of
existing equipment shall not be cause for refusal of
that equipment unless the refusal is based upon an
equipment defect directly and reasonably related to
safety.
(b) In the event of equipment failure which either renders the
vehicle inoperable or jeopardizes the continued safety of
the operation, the driver shall immediately notify the
dispatcher or supervisor on duty at the home terminal, and
further shall immediately notify the Company's equipment
leasing agent of such equipment failure, who each shall
instruct the employees as to the procedures to be followed
with regard to the cargo being hauled and the repair of
the equipment.
(c) The mechanical failure of the heating or air conditioning
equipment shall not be the basis for an employees refusal
to continue a trip. In the event of a mechanical failure
of the heating or air conditioning equipment, the driver
shall notify the Company and the Company's equipment
leasing agent of such failure. It shall be the Company's
right to determine whether the trip is to continue. This
determination is to be made based upon economic
considerations, existing climatic conditions, driver
comfort and safety of the continued operation of the
equipment. The foregoing provision shall not abrogate the
employee's rights under Article VI(a)(2)(a) of the
Agreement.
8
<PAGE>
<PAGE>
ARTICLE VIII
Personal Time Off / Sick Leave Reporting
(a) Employees shall be granted five (5) personal days off
without pay to be taken each contract year. Employees
hired during any contract year will receive 1 day of
personal time off without pay for each 3 months of service
and thereafter granted 5 days in any subsequent contract
year. All requests for personal time off must be
submitted with a minimum of twelve (12) hours advance
notice and must be approved by the Company. No carryover
of personal time off to a subsequent contract year will be
permitted.
(b) It is the responsibility of any employee who is unable to
work because of sickness or injury to immediately report
such inability to work and the reason therefore to the
dispatcher or supervisor on duty at the home station, and
further to continue to apprise the Company of his
condition and any changes which might affect his return to
work.
(c) The employees covered by this Agreement, and the Union,
recognize an obligation to be truthful and honest and to
prevent unnecessary absences and other abuses of sick
leave.
ARTICLE IX
Leaves of Absence
(a) An employee hereunder shall, upon proper written
application and approval from both the Company and the
union, be granted a leave of absence in writing for a
period not in excess of ninety (90) days.
(1) An employee granted a leave of absence shall retain
and continue to accrue seniority.
(2) Leaves of absence may be extended for additional
ninety (90) day periods upon further written
application to and permission from both the Company
and the Union, except as provided below.
(3) Notwithstanding the ninety (go) day limitation
stated above, Where special circumstances dictate
that such is reasonable and necessary, a leave of
absence may be extended for longer periods. It
shall be the employee's responsibility to request
extensions, where required, of his leave of absence
in writing to the Company and the Union.
(4) An employee returning from an authorized leave of
absence, other than a medical leave of absence, must
give notice of return in writing to the Company and
to the Union at least ten days prior to his
anticipated date of return.
(5) All employees returning from an authorized leave of
absence shall be placed on the board until such time
as the next bid occurs.
9
<PAGE>
<PAGE>
(6) Personal leaves of absence for reasons other than as
set forth in paragraphs (b), (c), and (d) below
shall be granted only when the requirements of
service permit.
(b) All employees requesting a medical leave of absence due to
personal illness or injury, or industrial injury, shall
make application for such upon forms to be provided by the
Company. This application must be accompanied by a
physician's statement regarding the employee's condition,
and shall be submitted as soon as is practically possible
after the need for such medical leave of absence arises.
(1) In no case shall a medical leave of absence be
extended to exceed three (3) years.
(2) Twenty-five (25) days prior to the expiration of a
medical leave of absence or any extension of such
leave, the Company will send a written notice to the
employee advising him that he must give notice of
intent to return per paragraph (a)(4) above or
request an extension of such leave per paragraph
(a)(3) above.
(3) Any employee requesting to return to work from a
medical leave of absence or who is requesting a
medical leave of absence or an extension of a
medical leave of absence may be required to provide
a physicians report setting forth a complete and
detailed statement as to the employees physical or
mental condition, including a diagnosis and
prognosis of such condition.
(a) The Company shall have the right to determine
whether the employee's physical or mental
condition meets the requirements of his job.
(b) The Company may require such an employee to
undergo an independent medical examination by
a qualified physician selected by the company.
(c) In the event the employees doctor and the
Company's doctor disagree as to the employees
physical or mental condition, then the dispute
as to the employees physical or mental
condition shall be submitted to an impartial
third party medical doctor in accordance with
the provisions of Article V(c)(4).
(d) An employee' who is denied a medical leave of
absence by the Company and either fails within
seven (7) days to, in writing, request a third
party doctor's examination pursuant to Article
V(c)(4), or who is denied a third party doctor's
examination due to a lack of a dispute regarding
his physical or mental condition, or who is
examined by the third party doctor pursuant to
Article V(C)(4) and based upon that doctor's
findings as to the employee's physical or mental
condition is determined by the Company to be able
to perform his job duties, and who then refuses
to report to work shall be terminated.
(c) Employees accepting full-time employment with the International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers
of America or its Local No. 41, as an officer, a financial
secretary or business agent shall be granted an indefinite leave of
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absence by the Company for the period so employed as
long as this Union remains the exclusive bargaining
agency of the employees covered by this Agreement.
(d) An employee elected to a state or national public
office in which the duties of that office require a
leave of absence from the employment of the Company
shall be granted such a leave of absence for the
term of that elective office, but not to exceed the
duration of this Agreement.
(e) Nothing herein shall impair any rights that an
employee may have under federal statute or
regulation arising as a result of his employment
with the Company having been voluntarily or
involuntarily interrupted by active military duty,
by reserve training activities, or by reporting for
examinations to determine his fitness for military
service. An employee on a leave of absence from the
Company due to a military obligation shall be
required to make application for return to work
within ninety (90) days following his discharge or
release from such military obligation or shall
forfeit all seniority rights and his name will be
stricken from the seniority roster. In case of
temporary or partial disability which makes it
impossible for the employee to return to work within
ninety (90) days after his discharge or release from
military duty, special arrangements will be made by
the Company and the Union for a proper extension of
time.
(f) Excepting as provided in paragraphs (c), (d), and
(e) above, an employee while on leave of absence
engaging in gainful employment either for himself or
another without prior written permission from both
the Company and the Union shall forfeit his
seniority rights and his name will be stricken from
the seniority roster.
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ARTICLE X
Vacation
(a) Employees shall be eligible for annual paid vacations in
accordance with the number of days of vacation leave earned and
accrued in the prior calendar year as set forth below:
<TABLE>
<CAPTION>
Months of Active
Service Prior Years Of Active Service
to January 1 Completed Prior to January 1
------------ ----------------------------
Less 20 and
Than 2 2-10 10-15 15-20 Over
------ ---- ----- ----- ----
<S> <C> <C> <C> <C> <C>
1 0 1 1 2 2
2 1 2 3 4 5
3 1 3 4 6 7
4 2 4 6 8 10
5 2 5 7 10 12
6 3 6 9 12 15
7 3 7 10 14 17
8 4 8 12 16 20
9 4 9 13 18 22
10 5 10 15 20 25
11 5 11 16 22 27
12 6 12 18 24 30
</TABLE>
12
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<PAGE>
<TABLE>
For Those Employees Hired After April 1, 1998
---------------------------------------------
<CAPTION>
Months of Active
Service Prior Years of Active Service
to January 1 Completed Prior to January 1
------------ ----------------------------
Less 16 and
Than 2 2-10 10-15 Over
------ ---- ----- ----
<S> <C> <C> <C> <C>
1 0 1 2 2
2 0 2 3 4
3 1 3 4 6
4 1 4 6 8
5 2 4 6 8
6 2 5 8 10
7 3 6 9 12
8 3 7 11 14
9 4 8 12 16
10 4 9 14 18
11 5 9 14 18
12 5 10 15 20
</TABLE>
(1) Active service shall not include the time that an employee
is laid off from the service of the Company or on a leave
of absence excluding a military leave.
(2) An employee who has been in the active service of the
Company for fifteen (15) days in a month shall, for the
purposes of accruing vacation leave, be considered to have
worked in the service of the Company for the entire month.
(3) An employee must have completed at least sick (6) months
of active service with the Company before he will be
eligible to use vacation days earned and accrued from the
prior year.
(4) An employee recalled from layoff or returning from a leave
of absence will accrue vacation leave from the date of
return to service in accordance with paragraph (a) above,
which vacation leave may be taken in the next calendar
year.
(5) Notwithstanding anything to the contrary above, an
employee who works less than sixty percent (60%) of the
total working days in a calendar year shall neither earn
nor accrue vacation leave days in that year.
(6) Vacation leave is not cumulative and must be taken during
the calendar year following the calendar year in which the
vacation leave was earned or it is forfeited unless an
employee has received a written request from the Company
to forego his vacation during that year.
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(b) For the purposes of this article, six (6) days accrued
vacation leave shall constitute one (1) week's vacation.
On or before November 1, a list or calendar indicating the
periods open for vacation bidding and the number of
employees who will be allowed to bid and take each such
period shall be posted on the drivers' bulletin board in
Kansas City.
(1) Vacation selection shall be by seniority.
(2) The November 1 posting will advise employees that
they will be contacted for vacation selection
between November 5 and November 20. Employees must
be prepared to make their vacation selection when
contacted. Reasonable provisions shall be made by
the Company to secure the selections of employees
who will be absent or on vacation from November 1 to
November 20. Vacation selection lists shall be
posted by December 10.
(3) The vacation week for which an employee shall be
off the board shall be seven (7) days, and the
employee's accrued vacation leave bank shall be
reduced by six (6) days for this vacation period.
(a) Employees shall select their vacation period in
seven (7) day continuous blocks, providing the
employee has a minimum of six (6) days accrued
vacation leave. An employee with less than six
(6) days accrued vacation leave shall take all
such vacation days in one consecutive block.
(b) An employee who does not elect to make a vacation
selection which exhausts his accrued vacation leave
bank will be allowed to utilize the remainder of his
accrued vacation leave days by seniority as the needs
of service permit, throughout the calendar year. Such
vacation leave shall be utilized in six (6) or more
consecutive day blocks, unless the employee has less
than six (6) days accrued vacation leave which shall
be taken in one consecutive block.
(c) Vacation pay shall be computed by dividing the
employee's earning for the prior calendar year by fifty-
two (52) to determine compensation for one week's (six (6)
days) vacation pay. Vacation pay for less than a one week
(six (6) day) period shall be computed by dividing the
employee's one-week vacation pay by six (6) to determine
the employee's daily vacation rate of pay and multiplying
by the number of vacation days to be taken.
(1) In the case of an employee who has been out of work
because of proven illness or injury resulting in
inability to work for a cumulative period of time of
twenty-eight (28) days or more, such employee's one
week vacation pay shall be calculated by dividing
the employee's annual earnings for the prior
calendar year by fifty-two (52), less the number of
weeks of proven illness as outlined herein.
However, periods of injury or illness of less than
seven (7) days duration shall not count towards the
twenty-eight (28) days threshold set forth above.
(2) An employee, upon giving reasonable notice of not
less than two weeks to the Company shall be given
his vacation pay prior to commencing his vacation.
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(3) An employee with fifteen (15) years or more active
service with the Company prior to January 1 shall
have the option of receiving vacation leave
compensation and working in lieu of taking his
fourth and/or fifth (where applicable) week(s) of
vacation leave. An employee who so elects to
receive vacation leave compensation and work in lieu
of taking his fourth and/or fifth week(s) of
vacation must, in order to receive such
compensation, notify the Company in writing at least
two (2) weeks in advance of the regular payday on
which he wants to receive the vacation leave pay
that he has made such an election, provided,
however, that in no case shall an employee who
elects to receive vacation leave compensation in
lieu of taking his fourth an/or fifth week(s) of
vacation be paid such compensation prior to the time
at which he is paid for his first vacation
selection. The employee's accrued vacation leave
shall be reduced by the number of vacation leave
days for which the employee receives compensation.
(4) In case of the death of an employee, any vacation
pay allowance due him shall be paid to the executor
or administrator of his estate, or his legal heir.
(5) An employee who is discharged, resigns or is laid
off, shall be paid for the unused vacation leave
accrued and due him based upon the number of months
worked in the preceding year, in accordance with
paragraph (a) above.
(6) With regard to the vacation leave accrued for those
months worked in the current calendar year, an
employee who is separated, including layoff, from
the service of the Company, shall be paid for such
vacation leave accrued unless he is discharged or
resigns without giving at least two (2) calendar
weeks written notice to the Company.
(d) For those employees hired after April 1, 1998, the number
six (6) is changed to five (5) wherever it appears in
paragraphs (b) and (c) in this Article.
ARTICLE XI
Holidays
(a) Employees eligible for holiday pay shall observe the
following holidays regardless of the day of the week on
which such holiday falls: New Year's Day, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day, Christmas,
the Employee's Birthday, and a personal holiday.
Employees hired after April 1, 1998 will not be eligible
for the personal holiday.
(1) Holiday pay shall consist of eight (8) hours pay at
the straight time rate of pay.
(2) Employees required to work on a holiday shall, in
addition to any monies the employee may earn on such
holiday, be paid twelve (12) hours pay at the
straight time rate of pay.
(b) (1) In order to qualify for holiday pay, an employee
must, if requested, work the day immediately
preceding and immediately following the holiday
unless the
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employee has exhausted his available hours of work
or is unable to work on account of proven illness,
or such absence is mutually agreed to by the
employee and the Company prior to the holiday.
(2) An employee who has not completed his probationary
period is not eligible for holiday pay for holidays
falling within such probationary period.
(3) If a holiday falls within an employee's regularly
scheduled vacation period he shall receive pay for
such holiday in addition to his vacation pay. An
employee shall not be eligible to work a holiday
falling within his vacation period.
(4) Employees are entitled to holiday pay if the holiday
falls within the first thirty (30) days of absence
due to illness or non-occupational injury, or within
the first six (6) months of absence due to
occupational injury, or during periods of
permissible absence for union business.
(5) An employee shall not be eligible for holiday pay
for any holiday unless he is on the active payroll
on the day in which the holiday falls.
(c) In the event an employee's birthday falls on February
29th, the employee shall observe March 1st as his birthday
holiday. If an employees birthday falls on another of
the holiday specified in paragraph (a) above, the next
following day shall be considered as such other holiday
for that employee.
(d) The date of an employee's personal holiday will be
established by the employee submitting a written request
to the dispatcher at least seven (7) days prior to the
date the employee desires to designate as his personal
holiday.
(1) In the event two or more employees properly request
the same date to be designated as their personal
holiday, the employee(s) with the most seniority
will be granted the day as their personal holiday as
the needs of service permit.
(2) On the day granted as the employee's personal
holiday, he shall be taken off the board unless the
needs of service require the employee to work that
day.
(3) If the employee is subsequently required to work on
the day that he requested and was granted as his
personal holiday, the employee shall have the option
to take holiday pay as provided in paragraph (a)(2)
above in addition to the monies he earns for working
that day, or he may choose to postpone his personal
holiday to another day.
(4) The employee must take his personal holiday in the
current calendar year, or it is waived.
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ARTICLE XXX
Funeral Leave
In the event of a death in an employees family (father, mother, wife,
husband, brother, sister, son or daughter), the employee shall be
entitled to eight (a) hours pay at the straight time rate of pay for up
to three (3) days to attend the funeral.
ARTICLE XIII
Free Transportation
Employees covered by this Agreement will be afforded free and reduced
fare transportation as established by Company policy and stated in the
Company's Management Policy and Procedure Manual, which from time to
time may be amended by the company at its discretion.
ARTICLE XIII
Work Stoppage, Strikes, Picketing and Lockouts
The Company will not lock out any employee covered hereby and the union
will not authorize or take part in any work stoppage, or picketing of
Company premises during the life of this Agreement until the procedures
for settling disputes involving employees covered by this Agreement and
as provided by the Railway Labor Act have been exhausted. The company
reserves the right to discipline, including discharge any employee
taking part or involved in any violation of this provision of the
Agreement.
ARTICLE XV
(a) Representation
(1) the Company recognizes the right of the Union to designate
stewards and alternates form the Company's seniority list.
The authority of the stewards and alternates so designated
shall be limited to and shall not exceed the following
duties and activities:
(a) The investigation and presentation of complaints,
disputes and grievances below the Step 2 level in
accordance with the provisions of this Agreement;
(b) The transmission of such messages and information
which shall originate with and are authorized by the
local Union or its officers, provided such messages
and information.
(1) have been reduced to writing; or,
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(2) if not reduced to waiting are of a routine
nature and do not involve work stoppages,
slowdowns, refusal to handle good, or any
other interference with the employer's
business.
(c) Settling grievances or disputes not involving
changes in policy or the intent and purposes of this
agreement.
(2) The steward, or alternate when acting in the place of the
steward, shall be allowed reasonable access and
availability to all work areas and documents not of a
confidential nature reasonably necessary to investigate,
process and present complaints, disputes and grievances
and in conducting his business shall do so in a proper,
efficient and expedient manner. In so doing he will
contact appropriate management personnel.
(3) The Union will be further represented by the local Union's
designated Business Agent for dealing with regional or
general officials of the Company. The Business Agent
shall, after first notifying the Company official in
charge, be permitted to enter the facilities of the
Company for the purpose of representing employees covered
by this Agreement. The Union shall, at all times, keep
the Company advised through written notice of any change
of authorized representative.
(b) Procedure
The Company and the Union will make every effort to keep
to a minimum the actual time spent in disposing of
grievances, disputes and complaints. The procedure for
presentation and adjustment of disputes, complaints, or
grievances that may arise between the Company and the
Union with reference to interpretation or application of
any provision of this Agreement shall be:
(1) Step 1
Any employee having a complaint or grievance in
connection with the terms of employment, application
of this Agreement, or working condition, will first
discuss the matter with his immediate supervisor.
If unable to secure satisfactory adjustment in this
manner, the employee may present his complaint or
grievance in writing to the steward who in turn
will, if in his opinion the complaint is justified,
present the written grievance to the Company's
designated representative. Subject to operational
requirement, a hearing, where necessary, shall be
convened for the purpose of rendering a decision in
the matter. A decision in writing shall be rendered
not later than seven (7) days following the
Company's receipt of the written grievance.
(2) Step 2
(a) If the decision in Step 1 is not satisfactory,
the union's Business Agent may refer the
matter to the Company's designated Staff Vice
President , or his designee. The notice of
intent to appeal the matter to Step 2 must be
made in writing within fourteen (14) days
after the Step 1 decision.
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Within forty-five (45) days after the Step 2
appeal date, the Staff Vice President or his
designee will meet with the Union's Business
Agent and endeavor to reach a settlement of
the issues involved in the matter appealed.
If unable to resolve the issues, the Company
shall issue a written decision setting forth
its position on the issue(s). In no event is
such written decision to be issued later than
seven (7) days.
(b) If the decision in Step 2 is not satisfactory
to the Union, the matter may be referred by
the Union's Business Agent to the Board of
Adjustment.
(c) Individual grievances must be filed promptly
after the cause giving rise to the grievance is evident,
and no individual grievance will be valid if not filed
within thirty (30) days of the date the employee knew or
could reasonably be expected to have known of the
grievance.
(d) It is understood that either or both the local
Union President or his authorized representative and the
Director of Labor Relations, Ground or his authorized
representative may intervene and participate in the
handling of a grievance or dispute at any level of the
grievance procedure.
(e) Notwithstanding anything to the contrary above, the parties
may by mutual agreement extend the time limits set forth herein.
The Company and the Union will make every effort to keep
to a minimum the actual time spent in disposing of
grievances,, disputes and complaints. The procedure for
presentation an adjustment of disputes, complaints, or
grievances that may arise between the company and the
Union with reference to interpretation or application of
any provision of this Agreement shall be:
ARTICLE XVI
Board Of Adjustment
(a) In compliance with Section 204, Title II, Of the Railway
Labor Act, as amended, there is hereby established a
System Board of Adjustment for the purpose of adjusting
and deciding disputes or grievances which may arise under
the terms of this Agreement and which are properly
submitted to it after exhausting the procedures for
settling disputes, as set forth under Article XV. Such
Board shall be known as the Trans World Airlines, Inc.
Over-the-Road Truck Drivers Board of Adjustment.
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(1) The Board of Adjustment shall consist of three (3)
members: one (1) appointed by the Company; one (1)
appointed by the Union; and a neutral arbitrator to
be appointed by the National Mediation Board at the
joint request of the parties. The Company and the
Union shall keep each other apprised of their
respective current appointees to the Board.
(2) There shall be a Secretary to the Board who shall be
responsible for the administration of the Board of
Adjustment, including but not limited to written
notices to the Board members and to the parties to
the dispute in connection with the scheduling of
Board matters, and communications with the National
Mediation Board regarding the appointment of neutral
arbitrators. The appointment of the individual to
act as Secretary to the Board shall alternate
January 1st of each year between the Company and the
Union with the Union appointing such individual in
even years and the Company appointing such
individual in odd years.
(a) The neutral arbitrator shall be designated as
chairman of the Board of Adjustment and shall
preside at meetings and hearings of the Board.
It shall be the responsibility of the Chairman
to guide the Parties in the Presentation of
testimony, exhibits, and arguments at hearings
to the end that a fair, prompt and orderly
hearing of the dispute is afforded.
(b) If either party objects to the neutral
arbitrator appointed by the National Mediation
Board, then the Secretary shall request that
the National Mediation Board submit a list of
five (5) arbitrators. The parties shall,
commencing in alternate turns from case to
case alternately strike a name from the list
and the remaining name shall be the neutral
arbitrator for the case. The compensation,
travel expenses and other expenses of the
neutral arbitrator in carrying out his duties
as chairman shall be borne equally by the
company and the Union.
(b) The Board shall have Jurisdiction over disputes between
any employee covered by this Agreement and the Company
growing out of grievances, interpretation or application
of any of the terms of this Agreement and the discipline
or discharge of employees who have completed their
probationary period. The jurisdiction of the Board shall
not extend to proposed changes in hours of employment,
basic rates of compensation, or working conditions covered
by this Agreement or any amendment hereto.
(1) The Board shall consider any dispute properly
submitted to it by the President of the Union or his
authorized representative, or by the Company's
designated Staff Vice President or his authorized
representative, when such dispute has not been
previously settled in accordance with the terms
provided for in this Agreement, provided that the
Notice of Dispute is filed with the Company and the
Union members of the Board, with copy to the Company
or Union as may be appropriate, within forty-five
(45) days after the decision in the last step of the
grievance procedure. The date of the Notice shall
determine the order for considering cases, excepting
discharge, unless the parties mutually agree
otherwise.
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(2) Unless the Company and the Union agree upon a
combination of cases to be presented to an
arbitrator, each case presented to the Board shall
be treated as a separate case, except those
grievances involving more than one (1) employee or
incident concerning an alleged violation with
similar facts and circumstances shall be treated as
one case.
(c) The Board shall meet in Kansas City, Missouri, unless a
different place of meeting is agreed upon by the Company
and the Union.
In the event either of the parties is of the opinion that
a Board of Adjustment hearing should be held at a site
other than Kansas City, such party will notify the other
party and if both parties agree, the Board hearing will be
conducted at the site agreed upon. Should the parties
fail so to agree, then the party desiring the change of
site shall put the determination of the site to the
arbitrator selected to hear the case, setting forth that
party's reasons, in writing, for requesting the change
with a copy to the other party who will be afforded an
opportunity to oppose such change, setting forth his
reasons in writing. The arbitrator's decision as to such
site shall be final.
(d) Procedure
(1) The Notice of Dispute referred to the Board shall be
addressed in writing by the grieving party to the
Company member and the Union member jointly and
shall include:
(a) The question or questions at issue
(b) Statement of facts
(c) Position of appealing party
(d) Position of other party
A copy of a Notice of Dispute shall be served upon
the other party and the Secretary to the Board.
(2) Unless otherwise agreed, within fourteen (14) days
following receipt of a Notice of Dispute, the
Secretary to the Board shall in writing, accompanied
by a copy of the Notice of Dispute, request that the
National Mediation Board appoint a neutral
arbitrator to sit with the Board as Chairman to hear
and resolve the dispute, and shall advise the
parties when such appointment has been made. A copy
of the Notice of Dispute shall be forwarded by the
Secretary to the Board to the Neutral Referee who
has been appointed to serve in the matter. All
subsequent documents filed with the Board shall be
addressed and sent to all three members, with copy
to the other party or parties.
(3) The Secretary to the Board shall confer with the
parties and Board members to set a mutually
convenient date for the hearing- The Company and
Union shall make every effort to schedule cases as
soon as possible following notification that a
neutral arbitrator has been appointed to hear a
particular grievance.
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(4) The hearing shall consist of the presentation of
oral testimony and exhibits with the Party having
the burden of proof presenting its evidence first,
and each party having the opportunity to rebut the
other's evidence. The parties shall have the option
of presenting closing oral arguments, written
briefs, including reply briefs, or both. However,
if neither party nor the chairman desire a hearing,
such hearing shall be waived.
(a) Employees covered by this Agreement shall be
represented at the Board of Adjustment by the Union
Business Agent. The Company shall be represented at
the Board. of Adjustment by the designee of the
appropriate Staff Vice President for Materials
Management. Each shall have the authority to settle
grievances prior to the rendering of a decision by
the Board of Adjustment and such settlement shall be
binding on all parties.
(b) Immediately following the conclusion of the
presentation of all evidence and oral arguments, the
Board shall convene in Executive Session, unless it
mutually agrees otherwise. The neutral arbitrator
shall within fourteen (14) days thereafter, or
fourteen (14) days following the receipt of all
written briefs in the matter, whichever is later,
issue a draft written award to the Board members.
If either Board member requests that a further
Executive Session be held, such shall take place at
the earliest convenient time. Such Executive
Session may occur by telephone conference. After
the conclusion of this Executive Session, if held,
or if within fourteen (14) days following receipt of
the neutral arbitrator draft award, neither the
Company nor Union Board member requests an Executive
Session to discuss the draft award, (excepting
changes mutually agreeable to the parties of a minor
nature) the neutral arbitrator shall reissue his
draft award as a final award representing the
majority decision of the Board. The decision of the
majority of the Board in all cases properly referred
to it shall be final and binding upon the parties.
(5) Each of the parties will assume the compensation,
travel expense and other expenses of the Board
member selected by it and the witnesses called or
summoned by it. Witnesses who are employees of the
Company shall receive positive free transportation
over the lines of the Company from the point of
assignment to the point at which they must appear as
witnesses and return, to the extent permitted by
law.
(6) The company and the Union members, acting jointly,
shall have the authority to incur such other
expenses as in their judgment may be deemed
necessary for the proper conduct of the business of
the Board, and such expenses shall be borne one-half
by each of the parties hereto. Board members who
are employees of the Company shall be granted
necessary leave of absence for the performance of
their duties as Board members. Board members and
the Union Business Agent shall be furnished positive
free transportation over the lines of the Company
for the purpose of attending meetings of the Board,
to the extent permitted by law.
(7) It is understood and agreed that each and every Board
member shall be free to discharge his duty in an
independent manner, without fear that his individual
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relations with the Company or with the Union may be
affected in any manner by any action taken by him in
good faith in his capacity as a Board member.
(e) The time limits set forth in this Article may be extended
by mutual agreement of the Company and the Union.
(f) Nothing herein shall be construed to limit, restrict, or
abridge the rights or privileges accorded either to the
employees or to the Company or to their duly accredited
representatives, under the provisions of the Railway Labor
Act, as amended.
ARTICLE XVII
Discipline and Discharge
(a) The Union recognizes the right of the Company and its
supervisors to manage and supervise the work force of
employees, individually or collectively in the normal
course of work. In assessing discipline, the Company will
consider the gravity of the offense, seniority and the
work record of the employee involved.
(b) In meetings for the purpose of investigation of any matter
which may eventuate in the application of discipline or
discharge, an employee will be entitled to Union
representation, if he so desires.
(c) No employee who has been in the service of the Company
ninety (90) days or more shall be discharged without
having first been afforded the opportunity of a hearing in
the presence of a duly authorized Union representative
before a designated representative of the Company other
than the one bringing the complaint against the employee.
(1) An employee who has been charged with an offense
which may result in his discharge shall be notified
in writing, with a copy to his union representative,
of the precise charge or charges preferred against
him, together with the date, time and location of
the discharge hearing. When an employee has been
suspended pending the discharge hearing, the Company
shall notify such employee and/or his Union
representative in writing as to the foregoing within
three (3) days from the date of his suspension. The
discharge hearing shall take place no later than
seven (7) days following the date of the aforestated
notification, unless the parties agree otherwise.
(2) Prior to the discharge hearing, the employee and his
Union representative shall be given a reasonable
opportunity to secure the presence of necessary
witnesses.
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(3) The discharge hearing officer shall write and mail
his decision regarding the employees discharge or
lesser discipline no later than five (5) days after
the close of the discharge hearing.
(4) If the decision of the discharge hearing officer is
not satisfactory, then appeal may be made in
accordance with the procedures described in Article
XV(b)(2). Step 2.
------
(d) If an employee is suspended while away from his home
terminal, he shall be provided transportation to return to
his home terminal.
(e) The company will not discriminate against any witness
called to testify or who otherwise offers evidence at any
hearing or investigation under this Article.
ARTICLE XVIII
Seniority
(a) Seniority rights for employees shall prevail. Seniority
shall be defined as the length of time that an employee is
in the service of the Company, active or inactive, in a
position covered by this Agreement.
(b) An individual who has not been in the active employ of the
Company in a position covered by this Agreement for more
than ninety (90) consecutive days will be considered a
probationary employee. There shall be no responsibility
on the part of the company or the Union for re-employment
of probationary employees if they are laid off or
discharged during this period. An employee separated for
any reason from the employ of the Company during his
ninety (90) day probationary period shall be considered to
have accrued no seniority. If he is retained after his
probationary period, the employee's name shall be placed
on the seniority list as of his date of hire.
(c) An employee who leaves the classification of work covered
by this Agreement but remains in the employ of the Company
in some other capacity shall retain but no longer accrue
seniority under this Agreement. In the event such an
employee returns to the classification covered by this
Agreement he shall displace only the least senior
employee, seniority permitting, and shall assume that
employee's position until the next bid occurs. Such a
displacement shall not in and of itself cause a bid to
occur.
(d) An employee shall lose his seniority and his name will be
removed from the Company seniority roster if:
(1) He quits or resigns.
24
<PAGE>
<PAGE>
(2) He is discharged for just cause.
(3) He fails to respond to an offer of recall from the
Company, in writing or by telegram, within seven (7)
days after the date of the notice offering to re-
employ him after a layoff, unless satisfactory
reason is given, or if having notified the Company
in writing or by telegram that he will accept
recall, he does not in fact return to work on the
date assigned.
(4) He engages in gainful employment while on leave of
absence in violation of Article IX(f).
(5) He fails to return to work at the end of an
authorized leave of absence, unless satisfactory
reason is given.
(6) While on the Board, he is unavailable for work as
required by the dispatch procedures on three
occasions within a six month period, unless
satisfactory reason is given, provided, however,
that should the employee show a satisfactory reason
for his unavailability for work, the Company shall
not be precluded from disciplining the employee for
an attendance deficiency if such exists.
(7) He has been on layoff letter from the Company for
more than three (3) years. However, any employee
who works a total of twenty (20) cumulative days
within any twelve (12) month period from his date of
layoff shall be entitled to an additional three (3)
year layoff period from the last day he works.
(8) An employee who loses his seniority pursuant to
paragraphs (3), (4), (5), (6), or (7) above will be
notified by certified mail, copy to the local Union
representative, of the specific paragraph under
which such action was taken. The employee may
within thirty (30) days from the date of such
notice, by certified mail to the appropriate manager
for Materials Management, copy to his local Union
representative, request a hearing regarding his
termination. Such hearing will be held no later
than ten (10) days after receipt of the employee's
request, and a written decision either sustaining
the employee's discharge or reinstating his
seniority will be issued within seven (7) days after
the close of the hearing, unless the Company and the
Union agree to extend these time limits. If the
aforementioned decision is not satisfactory, then
appeal may be made in accordance with the procedure
prescribed in Article XV, Step 2.
(e) Reduction and Increase in Working Force
(1) All reductions in force shall be effected in the
inverse order of seniority, and shall be confirmed
in writing.
25
<PAGE>
<PAGE>
(2) Restoration of forces shall be effected by seniority
based upon the current seniority roster. However,
if, as a result of an employee's failure to timely
respond to a recall notice, as required above, the
Company recalls another employee in his place who
has less seniority, and the originally recalled
employee is not terminated, then the Company shall
have no obligation to displace the subsequently
recalled employee to the benefit of the first
recalled employee.
(f) Any employee returning from the military service shall be
entitled to full seniority exercise and the employee
displaced will be the least senior employee.
(g) Seniority lists, corrected on December 1 and June 1, shall
be prepared by the Company, and furnished to the Business
Agent for the Union, and shall be posted on bulletin
boards by January 1 and July 1 each year. Errors of
omission and typographical errors will be corrected
currently with a copy furnished the Business Agent.
(1) All seniority lists shall be open to protest for a period
of fifteen (15) days from date of posting, but if the
seniority date on a list is not protested within the
prescribed time limit after the initial appearance of a
name on a list, such date shall stand as correct and
official on all subsequent lists. Any employee on leave,
on special assignment, in laid-off status, on vacation, or
on sick or injured absence at the time of posting shall
have a period of fifteen (15) days from the date of his
return to service to file a protest. The Company shall
thereafter post any revisions in the list, and any
adjustment or failure to make an adjustment with which an
employee or the Union may be dissatisfied shall be handled
as a grievance in accordance with the provisions of
Article XV upon request of the party filing the protest or
an employee affected by any adjustment made. The filing
of the grievance must be made within seven (7) days after
the posting of the revisions, and any employee on leave,
on special assignment, in a laid-off status, on vacation,
or on sick or injured absence at the time of posting such
revisions shall have a period of seven (7) days from the
date of his return to service to file such grievance.
(2) Regardless of other provisions of this Agreement to the
contrary, when the Company and the Union mutually agree
that a seniority list should be changed to comply with the
provisions of this Agreement, or when it has been
established through the grievance procedure that a list
should be changed, such change will be posted currently.
It is understood that any resulting adjustment in the list
shall not create any liability to the Company or the
Union.
ARTICLE XIX
Jury Duty
An employee unavailable for work as a result of serving as a juror or
having been subpoenaed to serve as a trial witness shall receive pay
equivalent to that which he would have received had he been available
for work, less any fee he received for such service. The employee shall
notify the
26
<PAGE>
<PAGE>
Company as soon as is practicable that he has been called for jury duty
or subpoenaed as a trial witness, and the dates thereof, and further
shall notify the Company immediately when he has been released from such
obligation.
ARTICLE XX
Savings Clause
Should any part or provision of this Agreement be rendered invalid by
reason of any existing or subsequently enacted legislation, such
invalidation of any part or provision of this Agreement shall not
invalidate the remaining portions thereof, and they shall remain in full
force and effect.
ARTICLE XXI
Health and Welfare Benefits
Effective April 1, 1998, contributions , as set forth on page 35 must be
made to the Central States, Southeast and Southwest Areas Health and
Welfare Fund, or other applicable fund, for each week in which a regular
employee works or is compensated at least two (2) days or tours of duty
in the contribution week. For regular employees who work or are
compensated one (1) day or tour of duty in the contribution week, the
contribution rate will be $34.00. This provision shall only apply to
regular employees covered by this Agreement who have been on the payroll
thirty (30) days or more.
If an employee is absent because of illness or off-the-job injury and
notifies the Employer of such absence, the Employer shall continue to
make the required full weekly contributions for a period of four (4)
weeks beginning with the first week after contributions for active
employment cease.
If an employee is injured on the Job, the Employer shall continue to pay
the required full weekly contributions until such employee returns to
work; however, such contributions shall not be for a period of more than
twelve (12) months beginning with the first week after contributions
for active employment cease.
If an employee is granted a leave of absence, the Employer shall collect
from said employee, prior to the leave of absence being effective,
sufficient monies to pay the required full weekly contributions into the
Health and Welfare Fund during the period of absence.
The Employer shall pay the full weekly health and welfare contribution
for any active employee on the seniority list who is available for work
the entire contribution week.
Disputes or questions of interpretation concerning requirement to
make contributions on behalf of particular employees or classifications
of employees shall be submitted directly to the Conference Joint Area
Committee by either the Employer, the Local Union, or the Trustees. In
the event of such referral, the Employer shall not be deemed to be
delinquent, while the matter is being
27
<PAGE>
<PAGE>
considered, but if the Conference Joint Area Committee, by majority
vote, determines that contributions are required, the Employer shall pay
to the Trust Fund the amounts due together with any other charges
uniformly applicable to past due contributions. The Conference Joint
Area Committee may also determine whether the Employer's claim was bona
fide.
ARTICLE XXII
Pensions
Effective April 1, 1998, the Employer shall contribute as set forth on
page 35 to the Central States, Southeast and Southwest Areas Pension
Fund for each regular employee covered by this Agreement who has been on
the payroll thirty (30) days or more.
If an employee is absent because of illness or off-the-job injury and
notifies the Employer of such absences the Employer shall, beginning
with the first week after contributions for active employment cease,
continue to make the required contributions for a period of four (4)
weeks.
If an employee is injured on the job, the Employer shall, beginning with
the first week after contributions for active employment cease, continue
to pay the required contributions until such employee returns to work;
however, such contributions shall not be paid for a period of more than
twelve (12) months.
If an employee is granted a leave of absence, the Employer shall collect
from said employee, prior to the leave of absence being effective,
sufficient monies to pay the required contributions into the Pension
Fund during the period of absence.
The payment of the pension contribution for days available only applies
to active employees on the seniority list who are available for work the
entire contribution week.
Disputes or questions of interpretation concerning the requirement to
make contributions on behalf of particular employees or classifications
of employees shall be submitted directly to the Conference Joint Area
Committee by either the Employer, the Local Union, or the Trustees. in
the event of such referral, the Employer shall not be deemed to be
delinquent while the matter is being considered, but if the Conference
Joint Area Committee, by majority votes determines that contributions
are required, the Employer shall pay to the Trust Fund the amounts due
together with any other charges uniformly applicable to past due
contributions. The Conference Joint Area committee may also determine
whether the Employer's claim was bona fide.
28
<PAGE>
<PAGE>
ARTICLE XXIII
Paid-for-Time
(a) Drivers can be released at an outside station and lay over
one time per trip. After being released, first 12 hours
will be without pay, 8 hours with pay, 10 hours without
pay, 8 hours with pay, 10 hours without pay. At this
point all time will be paid until departure from station.
A minimum guarantee of 2 hours will be paid on layovers.
(b) Breakdown delays: Drivers on breakdown delay will be paid
for the first 8 hours, with the next 16 hours free. All
time spent with equipment is to be paid; this is in
addition to the first 8 hours paid.
(c) Impassable highways and delays due to inclement weather or
other Acts of God: First 8 hours will be paid, next 16
hours free. Time spent with equipment will be paid; this
is in addition to the first 8 hours paid.
(d) Meal allowance on layovers will be $7.50 each time drivers
are held beyond the 17 hours of first layover and after
the next 10 hours on a subsequent layover. When on
layover on Sunday and holidays, there will be a meal
allowance of $7.50 every five hours except for the third
meal in that 24 hour period, which will be a $9.00 meal
allowance. No more than 3 meals will be reimbursed during
any 24 hour period.
ARTICLE XXIV
Duration
This agreement shall become effective on the date of signing except as
provided herein, and shall continue in full force and effect until April
1, 2003, and thereafter unless written notice of intended change is
served in accordance with Section 6, Title 1, of the railway Labor Act,
as amended, by either party hereto two (2) months, sixty (60) days,
prior to April 1, 2003 and/or any thirty (30) day period after April 1,
2003.
Signed this __________________day of __________________________ 1998.
FOR TRANS WORLD AIRLINES, INC. FOR INTERNATIONAL BROTHERHOOD
OF TEAMSTERS, LOCAL Union #4.1
______________________________ ______________________________
______________________________ _______________________________
______________________________ _______________________________
______________________________ _______________________________
29
<PAGE>
<PAGE>
<TABLE>
SCHEDULE "A" - WAGES
(Hired Prior to 4/1/98)
Mileage and Hourly Rate of Pay
<CAPTION>
Mileage Rate 10/1/98 1/1/99 4/1/99 4/1/00 4/1/01 4/1/02
<S> <C> <C> <C> <C> <C> <C>
Single Man .36 .38 38.5 .39 39.5 .40
Double Man .20 .21 21.5 .22 22.5 .23
Hourly Rate $14.00 -- -- $14.30 $14.55 $14.85
<CAPTION>
SCHEDULE "B" WAGES
(Hired After 4/1/98)
<S> <C> <C> <C> <C> <C> <C>
Single Man .33 .35 36.5 .37 37.5 .38
Double Man .17 .18 18.5 .19 19.5 .20
Hourly Rate $14.00 -- -- $14.30 $14.55 $14.85
<CAPTION>
NEW HIRES
(Hired After 4/1/98)
<S> <C> <C> <C> <C> <C> <C>
Single Man .28 -- .29 .30 .31 .32
Double Man .14 -- 14.5 .15 .16 .17
Hourly Rate $11.00 -- $11.15 -- -- --
<CAPTION>
HOSTLER CLASSIFICATION
<S> <C> <C> <C> <C> <C> <C>
$14.75 -- -- $15.-- $15.35 $15.65
</TABLE>
New hire employees shall be paid at the applicable new hire wage rate
for a period of six months of continuous employment with the Company.
After completion of this six month period, employees will be paid at
the applicable "B" wage rate. After completion of 30 months of
employment at the "B" wage rate, employees will be paid at the
applicable "A" wage rate.
All wage rates are effective October 1, 1998.
$800 per employee signing bonus.
30
<PAGE>
<PAGE>
July 27, 1997
Mr. C. B. "Doc" Conder
Business Agent
Teamsters Local 41
4501 Van Brunt Extension
Kansas City, MO 64130
RE: Single Man Trip - Lodging
Dear Mr. Conder:
This is to clarify the parties agreement concerning layovers for drivers
operating a single-man trip. As committed during our negotiations for a
new collective bargaining agreement, in addition to any other expenses
that the Company is required to pay, the Company will pay the reasonable
and actual costs of lodging for a driver required to incur such an
expense. The Company reserves the right to assign the hotel/motel to be
utilized, and all affected drivers are required to use their best
efforts to obtain the most economical satisfactory lodging when no such
assignment has been made.
Very truly yours,
/s/ James R. Cato
James R. Cato
Director
Labor Relations, Ground
Agreed and Accepted
/a/ C. B. Conder
C. B. Conder
August 11, 1987
31
<PAGE>
<PAGE>
April 1, 1998
Mr. Ron Stephens
Business Agent
Teamsters Local Union No. 41
6501 Van Brunt Boulevard
Kansas City, MO 64130
RE: 1998 TWA-IBT Negotiations
Dear Mr. Stephens:
This will confirm our agreement reached during the 1998 negotiations
regarding to having a Hostler on Duty at all times during the regular
work week. It has been agreed that when the Hostler (Bid position) is
used as an over-the-road driver during the regular work week a
replacement Hostler not required unless the work requirements of the
operation require a replacement Hostler. These requirements will be
determined by the Company and shall exclude loading of the pm shuttle.
Very Truly Yours,
Philip Whitcomb
VP Labor Relations
Agreed and Accepted:
___________________________
Ron Stephens
32
<PAGE>
<PAGE>
CENTRAL STATES
HEALTH AND WELFARE AND PENSION RATES
Health and Welfare
4/1/1998 159.70 per week
4/1/1999 159.70 per week
4/1/2000 167.70 per week
4/1/2001 175.70 per week
5/1/2002 applicable rate
Pension
4/1/1998 124.00 per week
4/1/1999 136.00 per week
4/1/2000 150.00 per week
4/1/2001 158.00 per week
4/1/2002 160.00 per week
33
<PAGE>
2-23-98
PURCHASE AGREEMENT
BETWEEN
MCDONNELL DOUGLAS CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
THE BOEING COMPANY
AND
TRANS WORLD AIRLINES, INC.
A00480-B
<PAGE>
<PAGE>
2-23-98 A00480-B
TABLE OF CONTENTS
Date of Contract and Contracting Parties 1-1
Article 1 - DEFINITIONS 1-1
Article 2 - SUBJECT MATTER OF SALE 2-1
Article 3 - PRICE 3-1
Article 4 - PAYMENT 4-1
Article 5 - DETAIL SPECIFICATION CHANGES 5-1
Article 6 - DELIVERY 6-1
Article 7 - EXCUSABLE DELAY 7-1
Article 8 - BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-1
Article 9 - TAXES, CUSTOMS, DUTIES AND LICENSES 9-1
Article 10 - FEDERAL AVIATION ADMINISTRATION APPROVAL 10-1
Article 11 - PATENT, TRADEMARK, TRADE SECRET AND
COPYRIGHT INDEMNITY 11-1
Article 12 - AIRCRAFT SUPPORT SERVICES AND WARRANTY 12-1
Article 13 - ASSIGNMENT AND TRANSFER 13-1
Article 14 - NOTICES AND REQUESTS 14-1
Article 15 - APPLICABLE LAW, VARIANCES AND WAIVER 15-1
Article 16 - NONDISCLOSURE 16-1
Signature Page 17-1
EXHIBIT A - DETAIL SPECIFICATION
EXHIBIT A1 - SPECIFICATION CHANGES NOTICES
EXHIBIT B - CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
EXHIBIT C - AIRCRAFT SUPPORT SERVICES
EXHIBIT D - PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY
EXHIBIT E - NEW ENGINE AND NEW PARTS WARRANTY
INDEX ii
<PAGE>
<PAGE>
2-23-98 A00480-B
PURCHASE AGREEMENT
THIS AGREEMENT NO. A00480-B, dated __________________, is made by and
between MCDONNELL DOUGLAS CORPORATION, a wholly owned subsidiary of THE
BOEING COMPANY (Seller), having an office in the City of Long Beach,
State of California, and TRANS WORLD AIRLINES, INC. (Buyer), having its
principal place of business in the City of St. Louis, State of Missouri.
In consideration of the mutual covenants herein, Buyer and Seller agree
as follows:
ARTICLE 1 - DEFINITIONS
For all purposes of this Agreement the following terms shall have the
following meanings (such definitions to be equally applicable to both
singular and plural forms of the terms defined):
<TABLE>
<CAPTION>
TERM MEANING
- - ---- -------
<C> <S>
AGREEMENT This Purchase Agreement including any agreements
made a part of the Purchase Agreement and the
Exhibits (each of which is incorporated in this
Purchase Agreement by this reference) and
amendments hereto.
AIRCRAFT One or more of the aircraft purchased hereunder,
the quantity and description of which are
contained in Article 2.
AOG Aircraft On Ground - The highest priority
- - -
designation to process a requirement for a Spare
Part or maintenance action. Indicates that an
Aircraft is unable to continue or be returned to
revenue service until the appropriate action is
taken.
ATA Air Transport Association of America.
- - -
BFE Buyer Furnished Equipment - Equipment identified
- - -
in the Detail Specification to be furnished by
the Buyer to the Seller.
CAGE The Commercial and Government Entity
- - -
CERTIFICATE OF As to any Aircraft, a certificate substantially
TECHNICAL in the form of Exhibit B.
ACCEPTANCE
AND DELIVERY
COVERED Any airframe component or landing gear component
COMPONENT specified in Exhibit C, Part I, paragraph C.5.
DEFINITIONS 1-1<PAGE>
<PAGE>
2-23-98 A00480-B
TERM MEANING
- - ---- -------
DETAIL The document which defines the configuration of
SPECIFICATION the Aircraft, consisting of the Detail
Specification (Exhibit A hereto) identified in
Article 2, as it may be amended from time to
time by SCNs.
DOCUMENTS Manuals, documents, Programs, data or
instructional material provided pursuant to this
Agreement or otherwise, in any form or medium.
ENGINES Two Pratt and Whitney JT8D turbofan engines.
FAA The United States Federal Aviation
- -
Administration. This term includes the Federal
-
Aviation Administrator and any successor U.S.
Federal authority.
FAILURE For purposes of Exhibit C, Part I,
paragraph C.1. any breakage of or defect in a
Covered Component.
FAR The United States Federal Aviation Regulations.
- - -
FLIGHT CREW A Flight Crew will consist of one Captain and
one First Officer.
FSCM The Federal Supplier Code for Manufacturers
- - - -
INITIAL Spare parts ordered for the support of the
PROVISIONING initial twelve months of operation after
ORDERS delivery of first Aircraft as specified in
Part III of Exhibit C.
INTEREST The charge for use, including delay in receipt,
of money computed (on a quarterly basis) at
prime (the per annum rate announced from time to
time by Chase Manhattan Bank at its principal
office in New York, New York as its prime
commercial lending rate) plus one percent, but
in no event greater than the rate permitted
under California law.
INTERFACE Any technical problem in the operation of the
PROBLEM Aircraft or any system or assembly thereof due
to malfunction or failure of any accessory,
equipment, or part, the cause of which after due
and reasonable investigation, is not readily
identifiable as to its source.
POLICY The Service Life Policy set forth in Exhibit C,
Part I, paragraph C.
PRODUCT An Aircraft structure, system, article, product,
accessory, equipment or part whether installed
on the Aircraft or purchased or provided as a
spare or replacement part if made to Seller's
proprietary design.
DEFINITIONS 1-2<PAGE>
<PAGE>
2-23-98 A00480-B
TERM MEANING
- - ---- -------
PROGRAM Any computer software or program in any form or
media provided by Seller, including whole or
partial copies of machine-readable instructions,
a collection of machine-readable data, such as a
data base, and documentation, descriptions,
instructions or listings related to such
instructions or data.
SCN A Specification Change Notice is the document
- - -
used to change or modify the Detail
Specification.
SELLER PART An Aircraft article, product, accessory,
equipment or part made to Seller's proprietary
design.
SELLER'S A plant or facility designated by Seller.
FACILITY
SELLER'S Manager, Warranty Administration
WARRANTY McDonnell Douglas Corporation
ADMINISTRATOR 3855 Lakewood Boulevard
Long Beach, California 90846-0001
SERVICE Any service related to the subject matter hereof
whether provided under this Agreement or
otherwise.
SPARE PART Seller Part and Vendor Part.
VENDOR A manufacturer or supplier of a Vendor Part,
service or document.
VENDOR PART An Aircraft article, product, accessory,
equipment or part not made to Seller's
proprietary design. Engines, BFE and BDE are
specifically excluded from this definition of
Vendor Parts.
DEFINITIONS 1-3<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 2 - SUBJECT MATTER OF SALE
A. Seller shall manufacture, sell and deliver to Buyer, and Buyer
shall purchase from Seller, under the terms and subject to the
conditions set forth in this Agreement, twenty-four (24) MD-83
aircraft conforming to the Detail Specification which consists of
DSDS 8000G dated March 31, 1992 as amended by the SCNs set forth
in the Exhibit A's hereto and as may be further modified in
accordance with the provisions of Article 5.
B. During the manufacture of the Aircraft by Seller, Buyer shall be
required to provide information concerning the configuration of
the Aircraft, including, but not limited to, interior arrangement,
special features, and the selection of materials and colors.
Seller shall advise Buyer at least 30 days in advance of the dates
when such information is required and Buyer shall provide such
information by the dates (as they may change from time to time due
to production requirements) so specified. In the event Buyer
fails to perform in accordance with the dates provided by Seller,
Seller shall have the right to determine the configuration of the
Aircraft with respect to the information not provided by Buyer.
Prior to determining the configuration, Seller shall act in good
faith with Buyer to develop a course of action which will permit
later designation if practical.
C. In the event of any conflict or inconsistency between any
provisions of this Agreement (excluding Exhibit A and A1 hereto)
and the Detail Specification, the provisions of this Agreement
shall apply.
SUBJECT MATTER OF SALE 2-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 3 - PRICE
A. The Base Price of each respective Aircraft is composed of the
Airframe Base Price, plus the Exhibit A's Base Price, plus the
Engine Base Price in the amounts set forth below.
Aircraft Airframe Exh. A Engine Base
No. Base Price Base Price Base Price Price
1-24 $ <F*> $ <F*> $ <F*> $ <F*>
B. The Base Price of the Aircraft shall be increased or decreased by
the amounts specified in any additional SCNs not included in the
Base Price and executed in accordance with Article 5 or as
otherwise provided in this Agreement.
C. If, prior to Aircraft delivery, the Engine manufacturer changes
the Engine Base Price or if the Engine escalation formula is
modified and results in change over the current escalation formula
(as set forth in Exhibit D hereto), the Price shall be adjusted by
the amount of the change.
D. The Price of the Aircraft shall be the Base Price, first modified
or adjusted in accordance with paragraphs B. and C. above, and
then adjusted according to the provisions in Exhibit D.
<FN>
<F*> Confidential Information omitted and filed separately with the
Commission.
PRICE 3-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 4 - PAYMENT
A. As the basis for determining the amount of progress payments due
each Aircraft shall have an Advance Payment Price as follows:
DELIVERY MONTH/YEAR ADVANCE PAYMENT PRICE
------------------- ---------------------
5/99 $<F*>
6/99 $<F*>
7/99 $<F*>
8/99 $<F*>
9/99 $<F*>
10/99 $<F*>
11/99 $<F*>
12/99 $<F*>
B. The Advance Payment Price of the Aircraft shall be increased or
decreased by Seller by the amounts specified by SCNs executed in
accordance with Article 5.
C. Buyer shall make progress payments for each Aircraft in the amount
of thirty-five percent of the Advance Payment Price. As an
initial progress payment, Buyer shall pay Seller five percent of
the Advance Payment Price of each Aircraft concurrently with the
execution of this Agreement less any payment(s) previously paid
for the Aircraft. On the first day of each of the following
number of full months prior to the scheduled month of delivery, as
set forth in Article 6, Buyer shall pay Seller additional progress
payments on each Aircraft. These payments shall equal the
following indicated percentage of the Advance Payment Price of
each Aircraft.
<FN>
<F*> Confidential Information omitted and filed separately with the
Commission.
PAYMENT 4-1
<PAGE>
<PAGE>
2-23-98 A00480-B
MONTHS PRIOR TO PERCENTAGE OF
SCHEDULED MONTH OF DELIVERY ADVANCE PAYMENT PRICE
--------------------------- ---------------------
24 <F*> %
21 <F*> %
18 <F*> %
15 <F*> %
12 <F*> %
9 <F*> %
D. Buyer shall pay Seller the balance of the Price of each Aircraft
at the time of its delivery.
E. Any sums payable under this Agreement which have not been paid as
part of the Price of the Aircraft shall be due and payable within
thirty days after Seller's invoice date.
F. If Buyer fails to make any of the payments at the times and in the
amounts required under this Agreement, Buyer shall pay Seller
Interest on the payment from the due date until the payment is
received by Seller. This shall be in addition to any other rights
or remedies available to Seller.
G. All payments shall be made in United States of America currency,
in immediately available funds, at a depository in the United
States of America to be designated by Seller. Buyer shall comply
with applicable monetary and exchange control regulations in order
to permit Buyer to make all payments in accordance with this
Agreement. Buyer shall provide Seller with a notice of each
payment by facsimile on the day funds are transferred indicating
the amount of funds transferred, the depository from which the
funds are transferred, the depository to which the funds are
deposited, and the means of funds transfer. Such notices of
payment should be addressed to Seller at facsimile number
(562) 593-7682, Attention: Senior Manager - Accounts Receivable
or to such other person or such other address as Seller shall
designate in writing.
H. Buyer shall not by virtue of anything contained in this Agreement
(including, without limitation, any partial payments or progress
payments or any designation or identification by Seller of
particular aircraft as Aircraft) acquire a special property or
insurable interest in any Aircraft prior to delivery of and
payment for such Aircraft by Buyer.
<FN>
<F*> Confidential Information omitted and filed separately with the
Commission.
PAYMENT 4-2
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 5 - DETAIL SPECIFICATION CHANGES
A. The Detail Specification may be changed by agreement of the
parties through mutual execution of an SCN.
B. The Detail Specification may be changed by Seller without Buyer's
consent to incorporate development changes. Development changes
shall be provided at no charge and not (i) increase the Price,
(ii) delay delivery, (iii) adversely affect the performance of the
Aircraft as set forth in the Detail Specification,
(iv) significantly affect maintainability of the Aircraft or
(v) change the interchangeability requirements of the Detail
Specification. Development changes shall not be made as to items
of BFE or BDE. Seller shall notify Buyer of all development
changes affecting the Detail Specification by furnishing SCNs.
DETAIL SPECIFICATION CHANGES 5-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 6 - DELIVERY
A. INSPECTION AND DEMONSTRATION
----------------------------
1. The manufacture of the Aircraft by Seller and all materials
and parts procured by Seller for this purpose may be
inspected by Buyer's representatives during normal business
hours at Seller's Facility. If access to any part of
Seller's Facility where manufacture is in progress or
materials or parts are stored is restricted by governmental
authorities or regulations, Seller shall be allowed a
reasonable time to make the items available for inspection
elsewhere. All inspections by Buyer's representative shall
be made in accordance with Seller's security policies and in
such a way that the manufacturing process is not hindered or
delayed. Seller shall furnish, without charge, office space
at Seller's Facility for a reasonable number of Buyer's
representatives. Buyer shall notify Seller of the number of
representatives requiring office space at least thirty days
prior to date of arrival.
2. Performance data based on ground and flight tests on one or
more of the early aircraft of the type purchased by Buyer
shall be the basis for engineering calculations and
interpretations to show the Aircraft's compliance with the
Detail Specification. The results of such engineering
calculations and interpretations shall be made available to
Buyer upon request.
3. If flight tests are necessary because of Buyer requested
special features incorporated in the Aircraft, Seller may
use one or more of the Aircraft for such flight tests and
Buyer will accept delivery of such Aircraft without any
reduction in the Price on account of resulting wear and
tear. Buyer agrees that any delay resulting from such
testing shall be considered an Excusable Delay.
4. Seller may, in addition, conduct flight tests on Buyer's
Aircraft with Buyer's prior consent, which consent shall not
be unreasonably withheld, and Buyer will accept delivery of
such Aircraft without any reduction in the Price on account
of resulting wear and tear, provided that such flight tests
do not cause such Aircraft to be delivered late to Buyer or
adversely affect Aircraft performance.
5. Seller shall perform its standard production ground
functional and flight test on the Aircraft and the results
of such test shall be provided to Buyer. Buyer's
representatives do not participate in or observe these
flight tests.
6. Buyer's representatives, at any time prior to tender for
technical acceptance of an Aircraft (as described in this
Article 6), may request correction of parts or materials
which (i) are not in accordance with the Detail
Specification or Seller's standard engineering and quality
manuals or (ii) have material or workmanship which, if the
Aircraft were delivered and were within the applicable
warranty period, would entitle Buyer to warranty correction
under paragraph A. of Part I of Exhibit C. Buyer shall
promptly notify Seller after it discovers any such
nonconformance. Seller shall correct or replace (unless
otherwise agreed between Buyer and Seller) all such parts,
materials or workmanship which are promptly brought to its
attention and mutually determined to be nonconforming.
DELIVERY 6-1
<PAGE>
<PAGE>
2-23-98 A00480-B
B. TECHNICAL ACCEPTANCE
--------------------
1. The Aircraft shall be tendered to Buyer for technical
acceptance after it has been assembled, completed and tested
by Seller, but no earlier than ten days prior to the first
day of the scheduled month of delivery. Seller will use its
best reasonable efforts to give Buyer at least 60 days
notice of the date on which Seller estimates that the
Aircraft will be tendered for technical acceptance and
delivery. Seller will use its best reasonable efforts to
give Buyer at least 45 days notice of the estimated delivery
date of the Aircraft.
2. At Buyer's request, a technical acceptance procedure,
including ground functional and flight test, shall be
performed on the Aircraft jointly by Buyer and Seller as
necessary to show compliance with the Detail Specifications
and shall be conducted in accordance with Seller's standard
procedures. Up to five representatives of Buyer may
participate in this acceptance procedure. Seller shall not
be required to provide special instrumentation for this
acceptance procedure. Seller shall have complete control of
all flights and shall bear all costs and expenses incident
thereto. Buyer agrees to complete all inspections and
testing authorized or permitted under this paragraph before
the end of the fifth business day after Seller has tendered
the Aircraft to Buyer. If during the five business day
technical acceptance period Buyer determines and Seller
agrees that there is noncompliance with the Detail
Specification, the five business day period shall be
suspended until (i) Seller corrects the noncompliance or
(ii) the condition is resolved to the satisfaction of Buyer
and Seller. During the suspension period, Buyer shall
continue its inspection of areas of the Aircraft unaffected
by Seller's efforts to correct the noncompliance. Upon
completion of (i) or (ii) above, Buyer shall have the
remainder of the period to complete its technical
acceptance. Buyer shall technically accept the Aircraft if
it meets the requirements of the Detail Specification.
3. Immediately upon completion of the inspection and testing
noted above, indicating that the Aircraft meets the
requirements of the Detail Specifications, Buyer shall
indicate its technical acceptance of an Aircraft by
execution of Section A of a Certificate of Technical
Acceptance and Delivery for the Aircraft. Technical
acceptance of the Aircraft by Buyer shall not impair the
warranties set forth in Part I of Exhibit C.
4. In the event Buyer fails to complete its technical
acceptance due to the fault of the Buyer within the five
business day period, the Aircraft shall be deemed to have
been technically accepted by Buyer at the end of the five
business day period after tender as if Buyer had expressly
indicated its technical acceptance as noted above.
C. DELIVERY
--------
1. On the first business day after technical acceptance
pursuant to paragraph B.3. or B.4. above, but no earlier
than the date of issuance of an FAA Certificate of
Airworthiness for the Aircraft, Buyer shall accept delivery
of the Aircraft by endorsement of Section B of a Certificate
of Technical Acceptance and Delivery
DELIVERY 6-2
<PAGE>
<PAGE>
2-23-98 A00480-B
for such Aircraft. Delivery shall be made at an airport in
California or Arizona designated by Seller or at an
alternate location as mutually agreed in writing. If, at
Buyer's request, delivery is made at an alternate location,
Buyer shall reimburse Seller for any increased costs
incurred by Seller as a result thereof. The scheduled
months of delivery of the Aircraft are as follows:
SCHEDULED MONTH OF DELIVERY AIRCRAFT QUANTITY
--------------------------- -----------------
May 1999 3
June 1999 3
July 1999 3
August 1999 3
September 1999 3
October 1999 3
November 1999 3
December 1999 3
2. If Buyer fails to accept delivery of an Aircraft as required
in paragraph C.1. above, Buyer shall reimburse Seller for
all losses, costs and expenses (including, without
limitation, taxes, Interest and reasonable amounts for
transportation, storage, insurance, preservation,
preparation and protection) sustained by Seller after such
date. Seller's acceptance of such payments shall not
constitute a waiver of its rights to pursue its remedies for
default or to pursue any other rights it may have at law or
otherwise.
3. Upon delivery of and payment for an Aircraft, title to the
Aircraft shall pass from Seller to Buyer. Seller shall
furnish to Buyer a full warranty bill of sale and other
appropriate documents of title as Buyer may reasonably
request.
D. RISK ALLOCATION
---------------
SELLER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BUYER, ITS OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES (i)
FROM AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND
EXPENSES FOR ALL INJURIES TO AND DEATHS OF PERSONS, EXCEPTING
INJURIES TO AND DEATH OF BUYER'S REPRESENTATIVES PARTICIPATING IN
ANY SUCH INSPECTIONS, TESTS OR FLIGHTS OF ANY AIRCRAFT PRIOR TO
ITS DELIVERY AND (ii) FOR LOSS OF OR DAMAGE TO PROPERTY OF THIRD
PARTIES (EXCLUDING EMPLOYEES OF BUYER OR PARTIES CLAIMING THROUGH
OR BY REASON OF THE DEATH OF ANY SUCH EMPLOYEE), WHETHER OR NOT
CAUSED BY BUYER'S NEGLIGENCE, ARISING OUT OF OR IN CONNECTION WITH
ANY AIRCRAFT DURING ANY INSPECTION, TEST OR FLIGHT THEREOF PRIOR
TO DELIVERY. BUYER HEREBY RELEASES AND AGREES TO
DELIVERY 6-3
<PAGE>
<PAGE>
2-23-98 A00480-B
DEFEND, INDEMNIFY AND HOLD HARMLESS SELLER, ITS AFFILIATES
(INCLUDING THE BOEING COMPANY) AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES RESULTING FROM
INJURIES TO OR DEATHS OF BUYER'S SAID REPRESENTATIVES
PARTICIPATING IN SAID INSPECTIONS, TESTS OR FLIGHTS, WHETHER OR
NOT CAUSED BY SELLER'S OR SUCH INDEMNITEE'S NEGLIGENCE. IN THE
EVENT ANY CLAIM IS MADE OR SUIT IS BROUGHT AGAINST EITHER PARTY,
THE LIABILITY FOR WHICH HAS BEEN ASSUMED HEREIN BY THE OTHER
PARTY, THE PARTY AGAINST WHOM CLAIM IS MADE SHALL PROMPTLY NOTIFY
THE OTHER PARTY AND THE LATTER SHALL HAVE THE RIGHT TO ASSUME AND
CONDUCT THE DEFENSE THEREOF OR TO EFFECT ANY SETTLEMENT WHICH IT,
IN ITS OPINION, DEEMS PROPER.
DELIVERY 6-4
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 7 - EXCUSABLE DELAY
A. EXCUSABILITY
------------
1. Seller shall not be held responsible for nor be deemed to be
in default of this Agreement because of delays in delivery
of an Aircraft, Product or Document or delay in the
performance of a Service or any other act to be performed by
Seller under this Agreement (in addition to any such delays
otherwise permitted herein) due to causes such as an act of
God or the public enemy; civil war, insurrection or riot;
war; natural disaster, fire, flood, explosion, earthquake or
serious accident; epidemic or quarantine restriction; any
act of government, government priority, allocation
regulation or an order affecting material, labor, equipment,
facilities or completed aircraft; strike, labor trouble
causing cessation, slowdown or interruption of work;
inability after due and timely diligence to seasonably
procure material, accessories, equipment or parts or to
obtain qualified labor; delay in transportation or, without
limitation by enumeration of the foregoing, any other cause
beyond the reasonable control of or not occasioned by the
fault or negligence of Seller.
2. Seller will use its best reasonable efforts to promptly
notify Buyer of any delay or anticipated delay in delivery
of an Aircraft.
B. LOSS, DESTRUCTION AND DAMAGE
----------------------------
1. If prior to delivery an Aircraft is lost, destroyed or
damaged beyond repair, or damaged to the extent that it can
be repaired by replacement parts to a new condition but
cannot be delivered in accordance with the delivery schedule
set forth in this Agreement, the time reasonably required by
Seller to furnish a replacement for such Aircraft or to
accomplish repairs to such Aircraft, is deemed an Excusable
Delay.
2. If an Aircraft is lost, destroyed or damaged beyond repair,
Seller shall promptly notify Buyer. As soon as possible
Seller shall notify Buyer of the earliest date that a
replacement aircraft can reasonably be delivered, consistent
with Seller's other contractual commitments and production
capabilities. Unless Buyer notifies Seller within one month
after notice of the replacement aircraft delivery date that
Buyer desires a replacement aircraft, this Agreement shall
be terminated as to any such Aircraft and the rights of the
parties shall be determined in accordance with paragraph D.
below. If Buyer timely notifies Seller that it wants a
replacement aircraft, the parties shall amend this Agreement
to establish its scheduled month of delivery.
Notwithstanding the foregoing, nothing herein shall obligate
Seller to deliver a replacement aircraft if manufacture
thereof would require the reactivation of the production
line for the model or series of aircraft purchased
hereunder. The Base Price of the replacement aircraft shall
be the same as that for the lost, destroyed or damaged
beyond repair Aircraft, except such Base Price shall be
adjusted in accordance with Article 3 hereof.
EXCUSABLE DELAY 7-1
<PAGE>
<PAGE>
2-23-98 A00480-B
C. INDEFINITE EXCUSABLE DELAYS
---------------------------
1. If Seller concludes, based on a continual appraisal of the
available facts, that the extent of any delay in delivery of
any Aircraft by reason of an Excusable Delay will exceed
twelve months beyond the scheduled month of delivery, then
Seller shall promptly notify Buyer concerning such delay and
submit to Buyer a revised scheduled month of delivery.
Either party may, by notice to the other party given within
one month from receipt by Buyer of such notice from Seller,
elect then to terminate this Agreement as to such delayed
Aircraft and the rights of the parties shall be determined
in accordance with paragraph D. below.
2. If this Agreement is not terminated as to an Aircraft
pursuant to paragraph C.1. above, and if during the period
of delay Seller concludes, based on its appraisal of the
available facts, that the extent of delay in delivery of any
Aircraft by reason of an Excusable Delay will exceed six
months beyond the revised scheduled month of delivery
specified in the notice provided pursuant to paragraph C.1.
above, Seller shall promptly notify Buyer concerning such
additional delay and submit to Buyer a revised scheduled
month of delivery. Either party may, by notice to the other
given within one month from receipt by Buyer of such notice
from Seller, elect then to terminate this Agreement as to
such delayed Aircraft and the rights of the parties shall be
determined in accordance with paragraph D. below.
D. In the event of termination under paragraphs B. or C. above,
Seller shall repay to Buyer, without interest, the amount of the
progress payments. Such termination shall discharge all
obligations and liabilities of the parties with respect to such
Aircraft and all undelivered Products, Services, Documents or
other articles or items related to that Aircraft.
EXCUSABLE DELAY 7-2
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 8 - BUYER FURNISHED OR DESIGNATED EQUIPMENT
A. BUYER FURNISHED EQUIPMENT
-------------------------
1. Buyer shall furnish the BFE to Seller and Seller shall make
appropriate provisions for the installation of and shall
install such BFE. Seller shall advise Buyer at least 30
days in advance of the dates (as they may change from time
to time due to production requirements) Seller needs BFE and
its respective data. Buyer shall meet Seller's required
schedule for receipt of such BFE and its respective data.
The BFE data shall include a written detailed description of
the dimensions and weight of such BFE and information
necessary for its proper storage, installation, servicing,
maintenance and operation. The BFE data shall not be
subsequently revised unless agreed to by Seller and, if
revised, Buyer shall be subject to adjustments in Price and
delivery.
2. Buyer authorizes Seller to contact and work with Buyer's BFE
suppliers for purposes of general engineering coordination,
expediting shipments, adjusting schedules, performing
quality control and inspection functions, and securing
required BFE data. Such efforts by Seller are for the
purpose of assisting Buyer and its suppliers in meeting BFE
commitments and shall not relieve Buyer from Buyer's
obligations set forth in this Article 8. Buyer shall make
appropriate arrangements with its suppliers for Seller to
contact and work with such suppliers as described above. At
Seller's request, Buyer shall provide technical advisors to
assist Seller in the installation, calibration, repair or
replacement, if defective, of any BFE.
3. Prior to Seller providing any Documents to BFE suppliers, a
proprietary information agreement must be in place between
Seller and the BFE supplier.
B. BUYER DESIGNATED EQUIPMENT
--------------------------
1. Alternatively, upon concurrence by Seller and subject to a
handling charge equal to fifteen percent of the price of the
BFE, Seller shall purchase on behalf of Buyer items of BFE
as BDE. Seller shall, in accordance with its standard
procurement practices, use its diligent efforts to obtain
BDE at the lowest reasonable cost to Buyer.
2. Without waiving Buyer's BFE data obligations defined in
paragraph A. above, Seller shall on behalf of Buyer use its
diligent efforts to obtain from the BDE suppliers, by the
date required, BFE data to support the BDE. At Seller's
request, Buyer shall provide technical advisors to assist
Seller in the installation, calibration, repair or
replacement, if defective, of any BDE.
C. Seller shall have no obligation to include in its provisioning
data for Buyer's Aircraft information covering the repair or
replacement of BFE or BDE items unless Buyer provides such data to
Seller in accordance with Seller's requirements. However, if
Seller has such information in its existing provisioning data
files and Seller has a right to disclose that information to
Buyer, such information will be included in Buyer's Aircraft
provisioning data at no additional cost to Buyer.
BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-1
<PAGE>
<PAGE>
2-23-98 A00480-B
D. PRICE AND PAYMENT
-----------------
1. Buyer agrees to sell and Seller agrees to purchase each item
of BFE concurrently with its delivery to Seller. A
reasonable shipset price for the BFE shall be established by
Buyer. Buyer and Seller agree that the Price of an Aircraft
will be increased by the amount of said shipset price and
such amount shall be included on Seller's invoice at time of
Aircraft delivery. Seller's payment for the purchase of
each shipset of BFE from Buyer shall be made at the time of
delivery of the Aircraft in which the BFE is installed.
2. Buyer and Seller agree that the Price of each Aircraft will
be increased by the price of the BDE installed thereon plus
the handling charge and such amount shall be included on
Seller's invoice at time of Aircraft delivery. If Seller
purchases any BDE subject to a price escalation or price
adjustment feature, the Price of each Aircraft will be
changed to reflect such price escalation or price
adjustments.
E. Buyer warrants that the BFE or BDE shall comply with all
applicable FARs and U.S. Food and Drug Administration (FDA)
sanitation requirements for installation and use in the Aircraft
at the time of delivery. Buyer shall be responsible for supplying
any data and adjusting, calibrating, retesting or updating such
BFE or BDE and data to the extent necessary to obtain applicable
FAA and FDA approval and shall bear the resulting expenses.
Without waiving Buyer's obligation, Seller shall, as an
accommodation to Buyer, obtain the Certificate of Sanitary
Construction on behalf of Buyer.
F. Any delay in an act to be performed by Seller caused by Buyer's
failure to (i) deliver, or have delivered, BFE, (ii) ensure
satisfactory operation of the BFE or BDE, (iii) furnish or obtain
applicable BFE data, (iv) perform any adjusting, calibrating,
retesting or updating of BFE or BDE or (v) furnish or obtain any
FAA or FDA approvals in compliance with the provisions of this
Article 8, shall be deemed an Excusable Delay. The Price of the
Aircraft shall be increased by the amount of Seller's additional
costs attributable to any such delay or failure by Buyer,
including without limitation, Interest on the unpaid balance of
such Price, storage, taxes, insurance and the costs of out of
sequence installations. In such event, Seller shall act in good
faith with Buyer to develop a course of action which will
facilitate delivery of the affected aircraft at the earliest
possible date. However, if Seller and Buyer are unable to so
develop a mutually satisfactory course of action, in the event of
such a delay and without waiving any other rights and remedies
Seller may have, Seller may (i) elect to deliver the Aircraft
without the installation of the unapproved, delayed or
nonconforming BFE or BDE and Seller shall thereupon be relieved of
all obligations to install such BFE or BDE or (ii) purchase the
same or substantially equivalent equipment from any other source
and install and invoice Buyer for such purchase and equitably
adjust the Price of the Aircraft and any other affected provisions
of the Agreement to reflect such purchase and associated
retesting, adjustment and calibration.
G. SUPPORT
-------
1. To properly maintain Seller's production flow and to
preserve Seller's delivery commitments, Seller reserves the
right, if necessary, due to equipment shortages
BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-2
<PAGE>
<PAGE>
2-23-98 A00480-B
or failures, to interchange new items of BFE or BDE acquired
from or for Buyer with new items of the same part numbers
acquired from or for other customers of Seller, as long as
such action does not affect the scheduled month of delivery
of Buyer's aircraft. Used BFE acquired from Buyer or from
other customers of Seller will not be interchanged.
2. For specific BFE or BDE which will, in Seller's opinion, be
critical to Aircraft functional tests and or flights, and
whenever other than new equipment is furnished to fulfill
BFE requirements, Buyer shall, upon Seller's request, place
in Seller's possession additional units of spare BFE to
preclude untimely delays which can be caused by the failure
of the BFE or BDE.
3. BFE shall be free and clear of all liens, encumbrances,
pledges, security interests or rights of others and any used
BFE shall be in good operating condition and meet Seller's
requirements for installation on the Aircraft.
4. Upon any spare BFE or interchanged BFE being incorporated or
installed on an Aircraft, without further act, (i) title to
the removed BFE shall vest in Buyer, free and clear of all
rights of Seller (ii) title to the installed BFE shall vest
in Seller and (iii) the installed BFE shall become subject
to the Agreement and be deemed to be part of that Aircraft
for all purposes to the same extent as the BFE originally
supplied for, incorporated or installed in or on the
Aircraft. Prior to incorporation of the spare BFE or
interchanged BFE into an Aircraft, title and risk of loss to
any spare BFE or interchanged BFE shall remain in Buyer.
5. Any BFE or BDE delivered to Seller and not installed in an
Aircraft shall be redelivered to Buyer by Seller at Buyer's
expense and in accordance with Buyer's instructions upon or
after delivery of the last Aircraft in as good a condition
as when delivered to Seller, reasonable wear and tear
excepted.
H. If either party shall terminate this Agreement as to an Aircraft
pursuant to Article 7, Seller shall, within thirty days of the
date of the termination notice, advise Buyer of the items of BFE
delivered to Seller prior to the date of termination notice, that
Seller will continue to purchase and which items of BFE that
Seller will return to Buyer. In the event Seller elects to return
BFE, then Seller shall ship the BFE to Buyer within thirty days of
such election and upon shipment, title to such BFE shall pass to
Buyer. At the same time Seller makes its election with regard to
BFE delivered to Seller prior to the notice of termination, Seller
shall have the right to purchase other items of BFE that Buyer has
placed on order and which have not been delivered to Seller. The
price paid for BFE by Seller shall be the invoice prices paid by
Buyer.
BUYER FURNISHED OR DESIGNATED EQUIPMENT 8-3
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 9 - TAXES, CUSTOMS, AND DUTIES
A. TAXES
-----
In addition to the purchase price of the Aircraft, Buyer shall pay to
Seller (for the purpose of this Article 9, Seller shall also include The
Boeing Company or any wholly-owned subsidiary of either The Boeing
Company or the McDonnell Douglas Corporation), upon demand, any sales or
use taxes required to be paid by Seller as a result of any sale, use (by
Buyer after valid tender of delivery), delivery, storage (after valid
tender of delivery), or transfer under this Agreement of the Aircraft,
Product, BFE, Spare Part, Service, or Document; provided, however, that
Buyer shall have no liability for any penalties or interest with respect
to any such taxes, or for any tax which may be levied upon any payment
to Seller by Buyer for the purpose of paying such tax, arising out of
Seller's fault or negligence. If claim is made against Seller for such
taxes, Seller shall promptly notify Buyer. If seasonably requested by
Buyer in writing, Seller shall, at Buyer's expense, take such action as
Buyer may reasonably direct with respect to such asserted liability and
shall not pay such tax except under protest, if protest is necessary.
If payment is made, Seller shall, at Buyer's expense, take such action
as Buyer may reasonably direct to recover such payment and shall, if
requested, permit Buyer in Seller's name to file claim or commence an
action to recover such payment. Provided that delivery is at an airport
in California or Arizona designated by Seller or at an alternate
location as mutually agreed in writing, Buyer shall not be liable for
any sales or use taxes pursuant to the provisions of this Article 9 for
which it has not been invoiced within one (1) year from the date of
delivery, storage or transfer of any Aircraft, Product, BFE, Spare Part,
Service, or Document to which such sales or use taxes apply.
B. CUSTOMS DUTIES
--------------
In addition to the purchase price of the Aircraft, Buyer shall pay to
Seller on demand the amount of any United States custom duties required
to be paid by Seller with respect to the importation of any items of BFE
or any other Product of foreign manufacture installed in the Aircraft at
Buyer's request. Seller shall use its best efforts to assist Buyer in
obtaining a refund of such customs duties upon exportation of the
Aircraft from the United States or in securing temporary free
importation of such items under bond, to the extent permitted by law.
Buyer shall reimburse Seller for any expenses and hold Seller harmless
from any penalties incurred by or imposed upon Seller as a result of any
action taken under this Article 9.2.
C. INDEMNITY
---------
The indemnity provided in this Article 9 shall not extend to any taxes
imposed or assessed on Seller or any other person as a result of any
financing transaction that Seller, or any affiliate of Seller, enters
into with respect to the Aircraft, Product, BFE, Service or Document.
TAXES, CUSTOMS, AND DUTIES 9-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 10 - FEDERAL AVIATION ADMINISTRATION APPROVAL
A. Each Aircraft shall at the time of delivery meet the FAA
requirements for airworthiness certification and be so certified
under all the conditions set forth in the Detail Specification.
It is further understood and agreed that, except as required by
the Detail Specification, each Aircraft need not meet FAA
requirements for specific operation on Buyer's routes.
B. Subject to the provisions of Article 8 hereof, if any change,
modification or addition to any Aircraft is required prior to
delivery pursuant to any United States law or governmental
regulation or interpretation thereof by a United States
governmental agency in order to continue the effectiveness of the
Type Certificate or meet the FAA requirements for airworthiness
certification of the Aircraft as above provided, such change,
addition or modification shall be made in the undelivered Aircraft
affected. Seller shall bear the cost of complying with FAA
airworthiness certification requirements which are required to be
incorporated in the Aircraft prior to its delivery. Any delay in
delivery of an Aircraft by reason of such change, addition or
modification shall be deemed an Excusable Delay and the scheduled
month of delivery of such Aircraft shall be adjusted to the extent
of such delay. Any such change, addition or modification
effective after Aircraft delivery shall be the sole responsibility
of Buyer.
FEDERAL AVIATION ADMINISTRATION APPROVAL 10-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 11 - PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY
A. DUTY TO DEFEND
--------------
Seller will hold Buyer harmless and indemnify Buyer from any
claim, suit or action which may be made or brought against Buyer,
its directors, officers, agents, successors or assigns for alleged
infringement or misappropriation of any United States patent,
trademark, copyright or trade secret, or any foreign patent,
arising out of the purchase, possession, use or lease, of a
Product (a Claim), provided that:
1. Buyer gives Seller prompt notice (within ten days after
service of any such suit or action or 30 days after receipt
of any such claim) of any Claim and promptly furnishes to
Seller copies of all papers served upon or received by Buyer
relating to such Claim; and,
2. Buyer cooperates fully with Seller in the defense, including
giving to Seller all data, documents and information within
Buyer's possession or knowledge that is material to the
defense; and
3. from the time of design of such Product and until
infringement claims are resolved, the country in which such
Claim is made and the flag country of the applicable
Aircraft are parties to the Chicago Convention on
International Civil Aviation of December 7, 1944 or the
International Convention for the Protection of Industrial
Property.
B. INDEMNIFICATION
---------------
Seller will pay all damages and costs awarded by a court as a
result of a Claim, together with all interest accruing after entry
of judgment or after the making of any settlement. Except for any
damages, costs, expenses and loss of profit resulting from loss of
use, Seller will reimburse Buyer for all reasonable expenses
incurred by Buyer at Seller's written request or with Seller's
written approval as the result of such Claim, provided that Buyer
has complied with the conditions of this Article 11 with respect
to notice and cooperation. Seller shall have the option at any
time to conduct negotiation with the party making the Claim and be
entitled to assume, conduct or control the defense of such suit.
C. LOSS OF USE
-----------
If a Product is found pursuant to paragraph 11.A.1. above, to
infringe any patent, trademark or copyright or to misappropriate
any trade secret and Buyer is enjoined from using it, Seller will,
at its option and at its expense, either:
1. procure for Buyer the right to use it free of any liability
for infringement;
2. replace it with a non-infringing substitute which otherwise
complies with this Agreement and the applicable order; or
PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY 11-1
<PAGE>
<PAGE>
2-23-98 A00480-B
3. alternatively, if C1 and C2 are not feasible, repurchase the
infringing Product from Buyer.
D. The provisions of this Article 11 (i) applies solely to Seller
Parts, (ii) regarding trademarks, copyrights and trade secrets
apply to and are solely for the benefit of the first purchaser of
the Aircraft (and to the first operator in the event the Aircraft
are leased to the first operator) and (iii) are Buyer's sole and
exclusive remedy with respect to a Claim.
PATENT, TRADEMARK, TRADE SECRET AND COPYRIGHT INDEMNITY 11-2
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 12 - AIRCRAFT SUPPORT SERVICES AND WARRANTY
A. WARRANTY AND SERVICE LIFE POLICY
--------------------------------
Seller's Warranty and Service Life Policy are set forth in
Exhibit C, Part I.
B. TRAINING AND TECHNICAL SERVICES
-------------------------------
Seller shall provide training and technical services, including
instructional materials, in accordance with Exhibit C, Part II.
C. SPARE PARTS
-----------
Seller agrees to sell and Buyer agrees to purchase Products in
accordance with Exhibit C, Part III.
D. DOCUMENTS
---------
Seller shall provide Buyer with Documents in accordance with
Exhibit C, Part IV.
AIRCRAFT SUPPORT SERVICES AND BUYER'S WARRANTY 12-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 13 - ASSIGNMENT AND TRANSFER
A. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of both parties. It shall not be
assigned in whole or in part by either party without the prior
written consent of the other party. It may, however, be assigned
without prejudice to the rights of the other party hereto against
the assignor, insofar as it relates to any undelivered Aircraft,
without such consent, by either party through merger,
consolidation or reorganization; provided, however, that the
assignee shall, at the time of assignment without such consent, be
solvent and have a tangible net worth and a ratio of tangible net
worth to total debt and liabilities which are not less than that
of the assignor after giving effect to such merger, consolidation
or reorganization.
B. Buyer hereby agrees that Seller may at any time assign its right
to receive money and, without Buyer's further consent, assign this
Agreement, in whole or in part, to The Boeing Company or any
affiliate of The Boeing Company. The assignment shall contain
such assignee's commitment to perform and be responsible for any
and all of Seller's obligations under this Agreement.
C. Buyer represents that it is purchasing the Aircraft for use and
not for resale. However, if Buyer resells, leases or otherwise
transfers the Aircraft after delivery, it shall obtain from such
purchaser, lessee or transferee an agreement to be bound by and
comply with all relevant provisions of this Agreement (including,
without limitation, the provisions contained in Exhibit C and this
Article 13) and upon obtaining such agreement, a copy of which
shall promptly be delivered by Buyer to Seller, Buyer shall have
the right to assign to said purchaser, lessee or transferee all
the rights conferred upon Buyer under this Agreement (including
Exhibit C) with respect to the Aircraft resold, leased or
otherwise transferred.
D. At Buyer's request and expense, Seller shall take any action
reasonably required for the purpose of causing any Aircraft to be
subjected, at or after delivery, to an equipment trust, chattel
mortgage, conditional sale, lien, assignment, or other arrangement
for the financing by Buyer of the purchase of such Aircraft. No
such action, however, shall subject Seller to any liability to
which it would not otherwise be subject or modify in any respect
Seller's contract rights or require Seller to divest itself of
title to or possession of such Aircraft until delivery of and
payment for such Aircraft has been made as provided in this
Agreement.
ASSIGNMENT AND TRANSFER 13-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 14 - NOTICES AND REQUESTS
A. Except as otherwise expressly provided in this Agreement, all
notices and requests required or authorized hereunder shall be
given in writing. Notices and requests shall be submitted to the
addressee noted below by personal delivery, electronic
transmission with confirmation of receipt or any other customary
means of communication. The date upon which any such notice or
request is received by the addressee shall be deemed to be the
effective date of such notice or request. Seller shall be
addressed at 3855 Lakewood Boulevard, Long Beach, California
90846-0001, Attention: Contracts Department and Buyer shall be
addressed at 515 N. Sixth Street, St. Louis, Mo. 63101, Attention:
Vice President and Deputy General Counsel, or to such other person
or such other address as the party to receive the notice or
request shall designate.
NOTICES AND REQUESTS 14-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 15 - APPLICABLE LAW, VARIANCES AND WAIVER
A. This Agreement constitutes the final agreement between the parties
and supersedes all previous negotiations, representations and
agreements between the parties with respect to the subject matter
hereof. It is the intent of the parties to establish this
document as the complete and exclusive statement of the terms of
the final agreement between the parties. This Agreement may be
amended only as provided in Article 5 or by an instrument in
writing of even or subsequent date, executed by duly authorized
representatives of the parties. Any other purported amendment or
modification will be null and void.
B. THIS AGREEMENT WILL BE INTERPRETED UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF WASHINGTON, U.S.A, EXCEPT THAT WASHINGTON'S CHOICE
OF LAW RULES SHALL NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE
LAW OF ANOTHER JURISDICTION.
C. The failure of either party to enforce at any time any of the
provisions of this Agreement or to require at any time performance
by the other party of any of the provisions of this Agreement
shall in no way be construed to be a present or future waiver of
such provisions. The express waiver (whether one or more times)
by either party of any provision, condition or requirement of this
Agreement shall not constitute a waiver of any future obligation
to comply with such provision, condition or requirement.
APPLICABLE LAW, VARIANCES AND WAIVER 15-1
<PAGE>
<PAGE>
2-23-98 A00480-B
ARTICLE 16 - NONDISCLOSURE
A. This Agreement contains information which is confidential and
proprietary to Seller and relates to Seller's research,
development, trade secrets, products, pricing and business affairs
(collectively, Confidential Information). Buyer shall protect the
Confidential Information with the same degree of care it exercises
to protect the confidentiality of its own confidential and
proprietary information and to prevent unauthorized disclosure,
use or publication thereof; provided, however, that Buyer may
disclose Confidential Information to its lenders and where
required by applicable law, the order of any court or governmental
agency, or the rules of any applicable securities exchange. Where
disclosure of Confidential Information is required pursuant to
applicable law and the rules of any applicable securities exchange
or pursuant to the direction of any governmental authority, Buyer
agrees to notify Seller in writing of any such disclosure Buyer
intends to make as far in advance of the date Buyer makes or is
required to make the disclosure as is practicable and Buyer shall
use its reasonable efforts to obtain assurances that confidential
treatment will be accorded to the information required to be
disclosed. Except as permitted herein, Buyer shall not disclose
the terms of this Agreement to any other party. The obligation to
treat information as Confidential Information shall not apply to
any information which is publicly available, independently
developed by Buyer or obtained rightfully from third parties
without a duty to keep confidential.
B. Buyer shall not discuss or reveal this Agreement, any proprietary
or competitively sensitive information provided in connection with
the transactions contemplated by this Agreement, or Confidential
Information, in whole or in part, with anyone other than (i) its
employees who require knowledge of such terms and conditions in
the ordinary course and scope of their employment; and
(ii) agents, consultants and advisors (including legal counsel,
accountants and management consultants) whose assigned duties
reasonably require that such disclosure be made or (iii) as
provided in paragraph A. of this Article 16. In the event any
disclosure is made to the parties identified in the preceding
clause (ii), Buyer further agrees to inform the recipients of the
confidential nature of the information and of their obligation to
treat such information confidentially pursuant to this Agreement
and to attach to the first page of such disclosed materials the
following legend:
THIS DOCUMENT CONTAINS TRADE SECRETS AND COMMERCIAL,
FINANCIAL AND PROPRIETARY INFORMATION WHICH IS PRIVILEGED
AND CONFIDENTIAL TO MCDONNELL DOUGLAS CORPORATION AND WHICH
MAY NOT BE DISCLOSED TO ANY PERSON, GOVERNMENTAL AGENCY,
COMPANY, CORPORATION OR OTHER PARTY EXCEPT AS SUCH
DISCLOSURE IS REQUIRED BY LAW.
NONDISCLOSURE 16-1
<PAGE>
<PAGE>
2-23-98 A00480-B
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written by their officers or agents
thereunto duly authorized.
TRANS WORLD AIRLINES, INC.
Signature_________________________________
Printed Name______________________________
Title_____________________________________
Witness:
Signature_________________________________
Printed Name______________________________
Title_____________________________________
MCDONNELL DOUGLAS CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
THE BOEING COMPANY
Signature_________________________________
Printed Name______________________________
Title_____________________________________
Witness:
Signature_________________________________
Printed Name______________________________
Title_____________________________________
SIGNATURE PAGE 17-1
<PAGE>
<PAGE>
2-23-98 A00480-B
EXHIBIT A - DETAIL SPECIFICATION
<PAGE>
<PAGE>
2-23-98 A00480-B
AIRCRAFT CONFIGURATION
relating to
MODEL MD-83 AIRCRAFT
The Detail Specification is DS8000G dated March 31, 1992 as
amended by the SCN's in the Exhibit A's attached hereto, including the
effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight
(OEW). The Aircraft Base Price reflects and includes all effects of such
SCN's, except such Aircraft Base Price does not include the price
effects of any Buyer Furnished Equipment or Seller Purchased Equipment.
<PAGE>
<PAGE>
</TABLE>
<TABLE>
Exhibit A-1
-----------
<CAPTION>
SCN NUMBER AIRCRAFT
SCN DATE SCN TITLE NUMBER
-------- --------- ------
<C> <S> <C>
7815B FINISH PER SPECIFICATION F-109-1.7 1 AND
04/30/92 (MD-80 BASELINE) SUBSEQUENT
7886A INSTALLATION OF A BUYER 1 AND
02/05/91 FURNISHED TRAFFIC ALERT SUBSEQUENT
COLLISION AVOIDANCE SYSTEM
COMPUTER AND ANTENNAS
UTILIZING EXISTING PARTIAL
PROVISIONS
8268B SELECTION OF WINDSHEAR ALERT 1 AND
09/18/96 AND GUIDANCE SYSTEM PROGRAM SUBSEQUENT
OPTION
8282 EDITORIAL CHANGE TO DS 8000G TO 1 AND
08/13/92 RELOCATE THE EVM INDICATOR SUBSEQUENT
SPACE PROVISIONS FROM THE
FIRST OFFICERS INSTRUMENT
PANEL TO THE CAPTAIN'S
INSTRUMENT PANEL
8283 REVISION TO THE FUEL QUANTITY 1 AND
09/21/92 INDICATING SYSTEM SUBSEQUENT
8299 INSTALLATION OF AN ASSIST STRAP 1 AND
11/18/92 ADJACENT TO THE FORWARD SUBSEQUENT
GALLEY SERVICE DOOR
8320 EDITORIAL CHANGES TO DS 8000G 1 AND
09/15/93 SUBSEQUENT
8340 REVISION TO BUYER-FURNISHED 1 AND
06/06/94 ATC TRANSPONDER PART NUMBER SUBSEQUENT
8366 EDITORIAL REVISION TO DS 8000G 1 AND
01/23/95 WEIGHT DATA (CHAPTER 13) SUBSEQUENT
<PAGE>
<PAGE>
8369 REVISION TO THE DETAIL 1 AND
03/13/95 SPECIFICATION TO PROVIDE SUBSEQUENT
UPDATE TO THE BUYER-FURNISHED
EQUIPMENT LISTING (DS 8000)
8372 DELETION OF THE LIQUID RAIN 1 AND
04/06/95 REPELLANT SYSTEM (MD-80) SUBSEQUENT
8374 REVISION TO BUYER-FURNISHED 1 AND
04/27/95 FLASHLIGHT PART NUMBER SUBSEQUENT
8383 INSTALLATION OF COMPOSITE VORTILLONS 1 AND
06/21/95 IN LIEU OF THOSE SUBSEQUENT
SPECIFIED
8401 INSTALLATION OF AN ADDITIONAL 1 AND
02/19/96 TRUST REVERSER DETENT SUBSEQUENT
8422 INCORPORATION OF FINISH 1 AND
12/12/96 SPECIFICATION F-109-71.2 FOR SUBSEQUENT
TRANS WORLD AIRLINES
8436 ELECTRONIC FLIGHT INSTRUMENT 1 AND
08/27/96 SYSTEM (EFIS) SELECTABLE SUBSEQUENT
PROGRAM OPTION LISTING
</TABLE>
<PAGE>
<PAGE>
<TABLE>
EXHIBIT A-2
-----------
<CAPTION>
SCN NUMBER AIRCRAFT
SCN DATE SCN TITLE NUMBER
-------- --------- ------
<C> <S> <C>
609N INSTALLATION OF DRIPLESS DIP 1 AND
04/18/79 STICKS GRADUATED IN POUNDS IN SUBSEQUENT
LIEU OF INCHES (6.7 LB/GAL)
1221F INSTALLATION OF SPARE WIRES 1 AND
12/03/80 (CATEGORY I, II AND IV) SUBSEQUENT
1272E REVISION OF ENGINE START AND 1 AND
01/29/83 IGNITION TO PROVIDE A GROUND SUBSEQUENT
START SAFETY FEATURE (DUAL 20
JOULE IGNITION)
3285H ADDITION OF POLYURETHANE FINISH 1 AND
08/27/79 TO LOWER FUSELAGE (COLOR TO BE SUBSEQUENT
DETERMINED)
4631H REMOVAL OF RADOME EROSION 1 AND
08/13/85 PROTECTION BOOT AND SUBSEQUENT
APPLICATION OF EROSION -
RESISTANT COATING (CHEMGLAZE
M431/M201)
5086A INSTALLATION OF REMOTE ENGINE 1 AND
08/22/79 STARTER CONTROL MECHANISM SUBSEQUENT
5505 INSTALLATION OF A HEATER AT THE 1 AND
02/16/79 POTABLE WATER TANK OVERFLOW SUBSEQUENT
DRAIN PORT
6217 INSTALLATION OF WING TIP 1 AND
09/16/82 MOUNTED LOGO LIGHTS UTILIZING SUBSEQUENT
EXISTING PARTIAL PROVISIONS
6702 COPPER ELECTRICAL GENERATOR 1 AND
07/12/83 FEEDER CABLES AND APU STARTER SUBSEQUENT
CABLE
6742 INSTALLATION OF A FLIGHT 1 AND
09/12/83 COMPARTMENT DOOR KEY SUBSEQUENT
<PAGE>
<PAGE>
6873E INSTALLATION OF AIR CRUISERS 1 AND
09/14/87 EVACUATION SLIDES QUALIFIED TO SUBSEQUENT
TSO C69A WITH AUTOMATIC
INFLATION IN LIEU OF MANUAL
INFLATION ON CABIN DOORS (MD-80)
6951 INSTALLATION OF SELF- 1 AND
09/20/84 ILLUMINATED TAILCONE SUBSEQUENT
EVACUATION SLIDE IN LIEU OF
EXISTING SLIDE RETAINING
ILLUMINATION EXTERNAL TO SLIDE
7303L INSTALLATION OF A BUYER- 1 AND
11/21/96 FURNISHED COLLINS WEATHER SUBSEQUENT
RADAR RECEIVER/TRANSMITTER
AND ANTENNA IN LIEU OF THAT
SPECIFIED
7317 FILLING CAVITIES OF PASSENGER 1 AND
09/30/87 SEAT TRACKS LOCATED UNDER SUBSEQUENT
GALLEYS WITH GREASE FOR
CORROSION PROTECTION
7345B INSTALLATION OF BUYER- 1 AND
10/28/94 FURNISHED SOLID STATE FLIGHT SUBSEQUENT
COMPARTMENT VOICE RECORDER IN
LIEU OF THAT SPECIFIED
8100B APPLICATION OF CROWN METRO 1 AND
02/12/92 EXTERIOR PAINT IN LIEU OF THAT SUBSEQUENT
SPECIFIED
8198 INSTALLATION OF AN APU WHICH 1 AND
10/25/91 INCORPORATES SELECTED GARRETT SUBSEQUENT
SERVICE BULLETINS IN LIEU OF
THAT SPECIFIED
8328 APPLICATION OF AEROGLAZE M1433 1 AND
11/18/93 EROSION RESISTANT COATING ON SUBSEQUENT
THE RADOME IN LIEU OF THAT
SPECIFIED
8373 INCREASED COVERAGE FOR 1 AND
04/24/95 EXTERIOR GRAY POLYURETHANE SUBSEQUENT
FINISH ON WINGS AND HORIZONTAL
STABILIZER
<PAGE>
<PAGE>
8382 INSTALLATION OF BUYER- 1 AND
06/15/95 FURNISHED AMERICAN FLAG DECALS SUBSEQUENT
ON THE VERTICAL STABILIZER (TWA)
8398 INSTALLATION OF PARTIAL 1 AND
01/10/96 PROVISIONS FOR DUAL GLOBAL SUBSEQUENT
NAVIGATION SYSTEM ANTENNAS
8410 CATEGORY CHANGE FROM BUYER- 1 AND
04/15/97 FURNISHED EQUIPMENT (BFE) TO SUBSEQUENT
SELLER-FURNISHED EQUIPMENT
(SFE)
8423 INSTALLATION OF A BUYER- 1 AND
10/24/96 FURNISHED COLLINS SERIES 900 SUBSEQUENT
DUAL HF SYSTEM UTILIZING
EXISTING COMPLETE PROVISIONS
8425 INSTALLATION OF BFE COLLINS 1 AND
07/10/96 SERIES 900 ATC TRANSPONDERS SUBSEQUENT
IN LIEU OF THAT SPECIFIED
8426 INSTALLATION OF A BFE DIGITAL 1 AND
07/10/96 FLIGHT DATA ACQUISITION UNIT IN SUBSEQUENT
LIEU OF THAT SPECIFIED
8427 INSTALLATION OF BUYER- 1 AND
07/10/96 FURNISHED COLLINS SERIES 900 DME SUBSEQUENT
INTERROGATOR UNITS PART
NUMBER 822-0329-001, IN LIEU OF
THOSE SPECIFIED
8428 INSTALLATION OF A BUYER- 1 AND
07/10/96 FURNISHED ALLIEDSIGNAL SOLID SUBSEQUENT
STATE FLIGHT DATA RECORDER,
PART NUMBER 980-4700-001, IN LIEU
OF THAT SPECIFIED
8429 INSTALLATION OF A BFE 1 AND
11/07/96 ALLIEDSIGNAL ACARS SYSTEM WITH SUBSEQUENT
ARINC 740 PRINTER
8430 INSTALLATION OF TWO BFE COLLINS 1 AND
01/10/97 SERIES 900 ADF SYSTEMS IN LIEU OF SUBSEQUENT
THAT SPECIFIED
<PAGE>
<PAGE>
8432 INSTALLATION OF A BFE COLLINS 1 AND
12/03/96 TCAS SYSTEM SUBSEQUENT
8435 INSTALLATION OF A -926 FLIGHT 1 AND
08/19/96 MANAGEMENT COMPUTER IN LIEU SUBSEQUENT
OF THAT SPECIFIED
</TABLE>
<PAGE>
<PAGE>
<TABLE>
EXHIBIT A-3
-----------
<CAPTION>
SCN NUMBER AIRCRAFT
SCN DATE SCN TITLE NUMBER
-------- --------- ------
<C> <S> <C>
TW-0142A INSTALLATION OF A 142 1 AND
04/25/97 PASSENGER MIXED CLASS SUBSEQUENT
(20 FIRST CLASS AND 122
ECONOMY) INTERIOR
ARRANGEMENT
51H INSTALLATION OF LIQUID 1 AND
10/17/80 SOAP DISPENSERS IN SUBSEQUENT
LAVATORIES IN LIEU OF
BAR SOAP DISPENSERS
5425D INSTALLATION OF A 1 AND
12/04/96 DIAPER CHANGING SHELF SUBSEQUENT
IN THE AFT RIGHT
LAVATORY
5830D REVISION OF DFGC 1 AND
02/15/91 WIRING TO PROVIDE SUBSEQUENT
AUTOLAND WITH ONE
RADIO ALTIMETER
INOPERATIVE
5913 REMOVAL OF 1 AND
03/31/81 MCDONNELL DOUGLAS SUBSEQUENT
CORPORATION LEGENDS
AND/OR LOGOS FROM
AIRCRAFT EXTERIOR
5986B REVISION OF ALTITUDE 1 AND
06/06/83 ALERT TO ENABLE AURAL SUBSEQUENT
WARNING AT 750 FOOT
ARMING POINT
6512B ADDITION OF AUTOLAND 1 AND
08/26/80 ROLLOUT GUIDANCE SUBSEQUENT
<PAGE>
<PAGE>
7301B INSTALLATION OF 1 AND
12/05/96 PARTIAL PROVISIONS FOR SUBSEQUENT
THE INSTALLATION OF A
SECOND ADVANCED
FLIGHT MANAGEMENT
COMPUTER
7771Q SELECTION OF BUYER- 1 AND
02/26/97 FURNISHED EQUIPMENT SUBSEQUENT
8386 INSTALLATION OF 1 AND
08/24/95 NUMBER ONE WINDOW SUBSEQUENT
PLUGS (LH AND RH)
8393 REVISION TO BUYER- 1 AND
06/27/96 FURNISHED FLIGHT DATA SUBSEQUENT
AND VOICE RECORDER
SYSTEMS
8408 INSTALLATION OF A 144- 1 AND
05/09/97 PASSENGER MIXED-CLASS SUBSEQUENT
INTERIOR ARRANGEMENT
8413 REMOVAL OF THE 1 AND
05/24/96 ADDITIONAL THRUST SUBSEQUENT
REVERSER DETENT
(DELETES THE EFFECTS OF
STANDARD SCN 8401)
8417 REVISION TO THE 1 AND
10/16/96 VSI/RA/TA COLLINS SUBSEQUENT
INDICATOR BFE
SELECTION
8418 DELETION OF THE RAM 1 AND
06/07/96 AIR INLET ANTI-ICING SUBSEQUENT
SYSTEM
8424 INSTALLATION OF A 1 AND
02/18/97 BUYER-FURNISHED VHF SUBSEQUENT
COMMUNICATION
SYSTEM COLLINS SERIES
900 IN LIEU OF THAT
SPECIFIED AND
INSTALLATION OF A
THIRD VHF
<PAGE>
<PAGE>
8437 INSTALLATION OF 1 AND
09/24/96 GOODRICH EVACUATION SUBSEQUENT
SLIDES WITH AUTOMATIC
INFLATION IN LIEU OF AIR
CRUISERS SPECIFIED
8438 REVISION OF ELECTRONIC 1 AND
109/01/96 FLIGHT INSTRUMENT SUBSEQUENT
SYSTEM PROGRAM
WIRING TO PROVIDE AN
ADDITIONAL DISPLAY
8442 INSTALLATION OF THREE 1 AND
12/09/96 COLLINS VHF SUBSEQUENT
TRANSCEIVERS PART
NUMBER 822-1047-002
(WITH 8.33 KHZ SPACING
CAPABILITY) IN LIEU OF
THAT SPECIFIED
8444 INSTALLATION OF BUYER- 1 AND
05/09/97 FURNISHED PORTABLE SUBSEQUENT
HALON FIRE
EXTINGUISHERS, FIRST
AID KITS AND
MEGAPHONES IN LIEU OF
THE SELLER-FURNISHED
EQUIPMENT SPECIFIED
8445 INSTALLATION OF BFE 1 AND
05/09/97 MAGAZINE RACK AND BFE SUBSEQUENT
LIFE VEST POUCH
8448 INSTALLATION OF A 1 AND
03/24/97 SELLER-FURNISHED SUBSEQUENT
ALLIEDSIGNAL SOLID
STATE FLIGHT DATA
RECORDER, PART
NUMBER 980-4700-034, IN
LIEU OF THAT SPECIFIED
8449 INSTALLATION OF 1 AND
02/12/97 PARTIAL PROVISIONS FOR SUBSEQUENT
MULTI-MODE RECEIVERS
(MMR) SYSTEM
<PAGE>
<PAGE>
8454 INSTALLATION OF BUYER- 1 AND
03/13/97 FURNISHED CREW SUBSEQUENT
PORTABLE OXYGEN
CYLINDER AND CREW
OXYGEN MASK IN LIEU OF
THE SELLER-FURNISHED
EQUIPMENT SPECIFIED
8460 INSTALLATION OF A 1 AND
04/17/97 CLASS DIVIDER WITH SUBSEQUENT
OUTBOARD SUPPORT
LEGS MOUNTED AT
X=PLUS OR MINUS 54.50 IN
LIEU OF THAT SPECIFIED
8463 REVISION TO WINDSHEAR 1 AND
05/22/97 ALERT AND GUIDANCE SUBSEQUENT
SYSTEM PROGRAM PIN
WIRING TO PROVIDE
ALTERNATE WINDSHEAR
VOICE WARNING
8465 INSTALLATION OF 1 AND
06/25/97 COLLINS DME SUBSEQUENT
INTERROGATOR
822-0329-020 IN LIEU OF
822-0329-001
</TABLE>
<PAGE>
<PAGE>
2-23-98 Exhibit B
A00480-B
EXHIBIT B - CERTIFICATE OF
TECHNICAL ACCEPTANCE AND DELIVERY
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY B-1
<PAGE>
<PAGE>
2-23-98 Exhibit B
A00480-B
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
Buyer: TRANS WORLD AIRLINES, INC.
Seller: MCDONNELL DOUGLAS CORPORATION
Purchase Agreement Number: A00480-B, dated
-----------------
AIRCRAFT IDENTIFICATION
- - -----------------------
Model:
Buyer's Aircraft Number:
Nationality and Registration Number:
Factory Serial Number:
Fuselage Number:
SECTION A - TECHNICAL ACCEPTANCE
--------------------------------
Trans World Airlines, Inc. hereby technically accepts the Aircraft and
agrees that the Aircraft has been manufactured in accordance with and
conforms to the requirements of Purchase Agreement No. A00480-B, as
amended.
TRANS WORLD AIRLINES, INC.
Signature
--------------------------------
Printed Name
-----------------------------
Title
------------------------------------
Date
-------------------------------------
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY B-2
<PAGE>
<PAGE>
2-23-98 Exhibit B
A00480-B
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY
Buyer: TRANS WORLD AIRLINES, INC.
Seller: MCDONNELL DOUGLAS CORPORATION
Purchase Agreement Number: A00480-B, dated
-----------------
AIRCRAFT IDENTIFICATION
- - -----------------------
Model: MD-83
Buyer's Aircraft Number:
Nationality and Registration Number:
Factory Serial Number:
Fuselage Number:
SECTION B - DELIVERY
--------------------
Trans World Airlines, Inc. hereby accepts delivery of the Aircraft at
the time and place noted below and hereby waives all remedies as to the
condition of the Aircraft, including the remedy of revocation of
acceptance, which might otherwise arise by operation of law, excepting
only those remedies provided for in Exhibit C, Part I of Purchase
Agreement No. A00480-B. Trans World Airlines, Inc. certifies the
Aircraft will be used by Trans World Airlines, Inc. as a certified or
licensed carrier of persons or property in interstate or foreign
commerce.
TRANS WORLD AIRLINES, INC.
Signature
--------------------------------
Printed Name
-----------------------------
Title
------------------------------------
Date
-------------------------------------
CERTIFICATE OF TECHNICAL ACCEPTANCE AND DELIVERY B-3
<PAGE>
<PAGE>
2-23-98 A00480-B
EXHIBIT C - AIRCRAFT SUPPORT SERVICES
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
TABLE OF CONTENTS
PART I - WARRANTY AND SERVICE LIFE POLICY I-1
A. Seller's Warranty I-1
B. Warranties From Other Manufacturers I-4
C. Service Life Policy I-6
D. Normal Usage I-11
E. Duplicate Protection Plan Remedies I-11
F. General I-11
PART II - TRAINING AND SERVICES II-1
A. Flight Training Program II-1
B. Maintenance and Technical Training Program II-3
C. Field Service II-8
D. Factory Service II-8
E. Maintenance Planning Assistance II-9
F. Additional Services II-10
G. Transportation and Per Diem Reimbursement II-10
H. General II-10
PART III - SPARE PARTS III-1
A. Applicability III-1
B. Term III-1
C. Buyer's Orders III-1
D. Communications III-1
E. Status Information III-1
F. Prices III-1
G. Shipment III-2
H. Payment III-2
I. Purchase of Seller's Parts III-3
J. Vendor Parts III-4
K. Provisioning III-4
L. General III-5
PART IV - AIRCRAFT MANUALS AND DOCUMENTS IV-1
A. Documents Provided IV-1
B. ATA Specifications IV-1
C. Shipment IV-1
D. Revision Service IV-1
E. List of Documents IV-2
F. Additional Copies IV-19
G. Limitation On Use of Documents IV-19
H. Warranty IV-19
AIRCRAFT SUPPORT SERVICES INDEX ii
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
PART I - WARRANTY AND SERVICE LIFE POLICY
This Part I contains the terms and conditions applicable to the warranty
and service life policy.
A. SELLER'S WARRANTY
-----------------
1. Coverage. Seller warrants that Products, at the time of
--------
delivery by Seller, shall be free from:
a. defects in material and workmanship;
b. defects caused by Seller's installation of any article
not manufactured by Seller in a manner not in
accordance with the reasonable instructions of the
manufacturer;
c. defects arising from failure to conform to the Detail
Specification, except as to portions thereof stated to
be estimates or approximations or stated to be design
objectives; and
d. defects inherent in the design, in view of the state
of the art as of the date of such design, including
defects arising from Seller's selection of materials
or process of manufacture.
2. Term. This warranty applies only to defects described in
----
paragraph 1. above which become apparent to Buyer within
thirty-six months after delivery of each Product.
3. Repair or Replacement. Seller's liability under this
---------------------
warranty for defects described in paragraphs 1.a.,
1.b. and 1.c. above is limited, at Seller's election, to the
repair or replacement at Seller's expense (with a similar
item free from the defect in question) of any defective
Product.
4. Correction of Design Defects. Seller's liability under this
----------------------------
warranty for defects described in paragraph 1.d. above is
limited to correction at Seller's expense of all such
defects. If such design defects become apparent and Buyer
gives Seller due and timely notice within the applicable
period set forth in paragraphs 11.f. and 11.g. of this
Part I A. and Seller is obligated to correct such defect,
Seller shall also make such correction in any Product which
has not been delivered to Buyer. Seller, however, shall not
be responsible nor deemed to be in default on account of any
delays in performance caused by any such corrections. Also,
rather than accept a delay in delivery, Buyer may elect to
accept delivery and subsequently file a claim for a warranty
correction as though the defect had become apparent
immediately after delivery.
5. Timely Corrections. Seller, or Buyer with the approval of
------------------
Seller, shall make the repairs, replacements or corrections
with reasonable care and dispatch in order that the Product
involved is not out of service longer than necessary.
WARRANTY AND SERVICE LIFE POLICY I-1
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
6. Seller's Approval. Within two weeks following receipt of
-----------------
Buyer's notice of a defect accompanied by Buyer's request
for permission to make a repair or correction, Seller shall
notify Buyer of its approval or disapproval of the request.
If Seller fails to give timely notice, the request shall be
deemed approved. Approval under this paragraph shall not
constitute a determination as to the existence of a defect,
as described in paragraph 1. above.
7. Coverage. For defects described in paragraph 1. above,
--------
removal and repair of the defective Product and its
reinstallation shall be at Seller's expense. When temporary
or interim repairs, replacements and corrections are
accomplished by Buyer and not proposed or requested by
Seller, Seller's liability to Buyer for removal and repair
shall not exceed the cost of furnishing a permanent repair,
replacement or correction.
8. Reimbursement.
-------------
a. Labor. For defects described in paragraph 1. above,
-----
Seller shall establish a reasonable estimate for the
labor hours required for removal and reinstallation
and, if performed by Buyer, repair or correction of
the defective Product and will reimburse Buyer for the
estimated hours or for Buyer's actual labor hours,
whichever is less. Buyer's warranty labor rate shall
be based upon Buyer's direct labor rate per man-hour
plus a burden rate of fifty percent, subject to annual
review and adjustment as mutually agreed. The amount
of Buyer's warranty labor rate shall not exceed the
Douglas Products Division's manufacturing direct labor
rate plus a burden rate of one-hundred percent.
b. Material. Seller shall reimburse Buyer for parts
--------
required to effect the repair. The price paid for
parts by Seller shall be the invoice prices paid by
Buyer.
9. Claims Information. All warranty claims must be submitted
------------------
in writing to Seller's Warranty Administrator at Long Beach,
California and shall include the following:
a. the identity of the Product involved, including
Seller's part number, serial number, CAGE Code,
nomenclature and the quantity claimed to be defective;
b. the identity of the Aircraft and ATA location from
which each Product was removed;
c. the date the claimed defect became apparent to Buyer;
d. the total flight hours or cycles accrued on each
Product at the time the claimed defect became apparent
to Buyer;
e. description of the claimed defect and circumstances;
f. the date any repair or modification was completed;
WARRANTY AND SERVICE LIFE POLICY I-2
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
g. an itemized account of any direct labor hours expended
in performing the repair or modification;
h. an itemized account of any direct materials
incorporated in any repair or modification; and
i. with respect to any spare parts purchased from Seller,
identification by Buyer's purchase order number and
date.
10. Audit, Notification and Transportation. All warranty claims
--------------------------------------
shall be subject to audit by Seller. Seller shall notify
Buyer of Seller's disposition of each claim. If a warranty
claim is rejected, Seller will provide an explanation for
the rejection including any supporting data/documentation
reasonably requested by Buyer. For defects described in
paragraph 1. above, Seller shall pay all costs of
transportation of the defective Product returned to and from
the point on Buyer's airline route closest to Seller's
Facility in Long Beach, California.
11. Limitations. Seller shall have no obligation or liability
-----------
under this warranty if:
a. the Aircraft was not operated or maintained in
accordance with the AIRCRAFT MANUALS AND DOCUMENTS
furnished Buyer pursuant to Part IV hereof unless
Buyer furnishes reasonable evidence that such
operation or maintenance was not a cause of the
defect;
b. the Aircraft was not operated under normal airline use
unless Buyer furnishes reasonable evidence that such
operation was not a cause of the defect;
c. Buyer does not submit reasonable proof to Seller
within 2 months after the defect becomes apparent that
the defect is due to a matter covered within this
warranty. Seller shall use reasonable efforts to
approve or disapprove in writing Buyer's warranty
claim within 2 months of receipt.
d. Buyer does not return the defective Product to
Seller's Facility, unless otherwise approved by
Seller, within two months following such defect
becoming apparent;
e. Buyer does not report the defect in writing to
Seller's Warranty Administrator and submit reasonable
proof to Seller that the defect is due to a matter
covered within this warranty within two months after
the defect becomes apparent; or
f. Buyer does not submit its claim for reimbursement
within one year of the defect becoming apparent to
Buyer or within a reasonable time period as mutually
agreed between Buyer and Seller's Warranty
Administrator.
12. Document Warranty. Seller warrants that at the time of
-----------------
delivery by Seller all Documents shall be free from errors.
Seller's liability under this warranty is limited to
replacement of the Document with a similar Document or page
thereof free from
WARRANTY AND SERVICE LIFE POLICY I-3
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
the error in question at no charge for up to Twenty-Four
months after delivery of the Document.
B. WARRANTIES FROM OTHER MANUFACTURERS
-----------------------------------
1. Warranties From Other Manufacturers. Seller has made or
-----------------------------------
shall make reasonable efforts to obtain favorable warranties
enforceable by Buyer from Vendors, with respect to Vendor
Parts purchased by Seller and installed in the Aircraft at
the time of delivery. Seller shall furnish copies of Vendor
commitments to Buyer (see Product Support Supplier
Agreements Manual, Exhibit C, Part IV - AIRCRAFT MANUALS AND
DOCUMENTS).
2. Vendor Backstop. For those Vendor Parts installed on the
---------------
Aircraft or purchased through Seller, in the event of a
default by a Vendor in the performance of any material
obligation under any applicable warranty obtained by Seller
from such Vendor pursuant to paragraph 1. above, or in the
event of a disclaimer of responsibility by such Vendor for
any defect constituting a breach of such warranty and upon
seasonable notice thereof to Seller, Seller will furnish the
equivalent warranty terms as those provided by the
defaulting Vendor.
3. Seller's Interface Commitment. At Buyer's request to
-----------------------------
Seller's Warranty Administrator, Seller shall, without
charge, conduct an investigation and analysis of any
Interface Problem to determine, if possible, the cause of
the Interface Problem and to recommend feasible corrective
action. Buyer shall furnish to Seller all data and
information in Buyer's possession relevant to the Interface
Problem and shall cooperate with Seller in the conduct of
its investigation and such tests as may be required.
Seller, at the conclusion of its investigation, shall advise
Buyer in writing of Seller's opinion as to the cause of the
Interface Problem and Seller's recommended corrective
action.
If Seller determines that the interface problem stems from a
Seller part, the cause of the Interface Problem shall be
treated as a defect in the design of such part pursuant to
Exhibit C, Part I, Paragraph A of the Agreement. Warranty
claims submitted by Buyer pursuant to Exhibit C, Part I,
Paragraph A of the Agreement shall be processed in
accordance with and subject to all of the terms and
conditions thereof.
If Seller concludes that the cause of the Interface Problem
is attributable to a Vendor Part, Seller shall assist Buyer
in delineating claims which Buyer may assert against the
Vendor, Seller will also take reasonable actions permitted
by its contacts with such Vendor, in an effort to obtain a
correction of the Interface Problem which is satisfactory to
Buyer.
If Seller determines that the Interface Problem is in part
due to a Seller Part and a Vendor Part, Seller shall at the
request of Buyer, attempt to correct the Interface Problem
through the cooperative efforts of both Seller and the
Vendor.
WARRANTY AND SERVICE LIFE POLICY I-4
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
4. Engine Warranty. Seller has obtained from United
---------------
Technologies Corporation, Pratt & Whitney Group, Large
Commercial Engines (United) the right to extend to Buyer the
provisions of United's sales warranty, attached hereto as
Exhibit E. Buyer agrees that the warranty applicable to
Engines installed at the time of delivery in the aircraft to
be furnished under this Agreement shall be the United sales
warranty; provided that Buyer may, by notice given to United
prior to delivery of the Aircraft under this Agreement,
elect to substitute for such sales warranty any
corresponding warranty included either in a General Terms
Agreement currently effective between the Buyer and United
or in a contract for the sale by United to the Buyer of
Engines intended for use in direct support of the Aircraft
to be furnished under this Agreement. Buyer agrees that any
such warranty shall be deemed to have been provided directly
by United to Buyer. Buyer shall look to United and not
Seller with respect to any such warranty and Seller has no
obligation under such warranty and does not act as guarantor
of United's warranty. In consideration of such extension,
Buyer hereby releases and discharges United from any and all
liabilities and obligations whatsoever arising out of the
purchase or use of said installed Engines, except as
expressly assumed by United in such warranty.
C. SERVICE LIFE POLICY
-------------------
The Policy shall apply if fleetwide or repetitive Failures occur
in any Covered Component.
1. Term. Should a Failure occur in any Covered Component
----
within one-hundred forty-four months after delivery, Seller
shall, at the price provided below and as promptly as
practicable, either (i) design and furnish a correction for
such failed Covered Component and provide any parts required
for such correction (exclusive of standard parts) or (ii)
furnish a replacement Covered Component.
2. Price. Any part or Covered Component which Seller is
-----
required to furnish under this Policy shall be priced in
accordance with the following formula:
P = CT
--
N
where:
P = Price to Buyer;
C = Seller's then current Seller Part sales price;
T = the total time to the nearest month during which the
Covered Component has been used; and
N = 144 months.
WARRANTY AND SERVICE LIFE POLICY I-5
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
3. Conditions and Limitations. The following general
--------------------------
conditions and limitations shall apply to the Policy:
a. The transportation cost for the return, if practicable
and requested by Seller, of any failed Covered
Component necessary for redesigning studies shall be
borne by Seller to and from the point on Buyer's
airline route closest to Seller's Facility in Long
Beach, California.
b. Any required disassembly and reassembly of the
Aircraft or landing gear, removal of the failed
Covered Component and reassembly and installation of
the corrected or replacement Covered Component, shall
be at Buyer's expense.
c. Seller's obligations under the Policy are conditioned
upon the submission of reasonable proof to Seller that
the Failure is covered by the Policy.
d. Buyer must report a Failure in writing to Seller's
Warranty Administrator within two months after any
Failure becomes evident, whether or not said Failure
can reasonably be expected to occur in any other
aircraft. Omission to give this required notice shall
excuse Seller from all obligations with respect to
such Failure.
e. The provisions of paragraph 11.a., 11.b. and, 11.c. of
paragraph A. of Part I entitled Seller's Warranty, are
incorporated by this reference and shall condition
Seller's obligations under the Policy with respect to
any Covered Component.
f. Seller's obligations under the Policy shall not apply
to any Aircraft or Covered Component which has not
been correctly modified in accordance with Seller's
service bulletin specifications or instructions
furnished by Seller to Buyer prior to receipt by
Seller from Buyer of any notice of an occurrence which
constitutes, or which at a later date is shown to
constitute, a Failure in a Covered Component unless
Buyer furnishes reasonable evidence that such Failure
was not caused by Buyer's failure to so modify the
Aircraft or Covered Component.
g. The Policy shall not apply for a Failure if Seller
determines that the Failure may not reasonably be
expected to occur on a fleetwide or repetitive basis.
4. Coverage. This Policy is neither a warranty, performance
--------
guarantee nor an agreement to modify the Aircraft or Covered
Component to conform to new developments in airframe and
landing gear design and manufacturing art. Seller's
obligation is to make only those corrections to the Covered
Components or furnish replacements as provided in the
Policy.
5. Covered Components. The following specific airframe
------------------
components and landing gear components are subject to the
provisions of the Policy:
WARRANTY AND SERVICE LIFE POLICY I-6
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
a. Airframe Components
(1) Pylons
(a) Front engine mount yoke
(b) Spars (including spar caps, webs and
stiffeners)
(c) Front engine mount to pylon attach fitting
(d) Aft engine mount to pylon attach fitting
(e) Upper and lower skin and stiffeners
between spars
(f) Pylon to fuselage attach angles and
fittings
(2) Wings
(a) Front and rear spars (including spar caps,
webs and stiffeners)
(b) Upper and lower stringers and skin between
spars
(c) Landing gear bulkhead and landing gear
attach fitting
(d) Bulkhead at side of fuselage, including
trapezoidal panel
(e) Flap ribs in the wing
(f) Wing to fuselage attach tee
(g) Wing flap attach fittings
(3) Fuselage
Frames, plating, longerons and pressure
bulkheads, but excluding all non-load carrying
access doors.
(4) Empennage
(a) Vertical stabilizer spars and skin between
spars
(b) Aft fuselage vertical stabilizer
carry-through structure
(c) Horizontal stabilizer spars, integral skin
and stringers between spars, and pivot
fittings
b. Landing Gear Components
(1) Main Gear
(a) Cylinder
(b) Piston/axle
(c) Side brace (upper and lower)
(d) Fixed side brace
(e) Orifice support tube
(f) Torque links
WARRANTY AND SERVICE LIFE POLICY I-7
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
(2) Nose Gear
(a) Housing
(b) Piston
(c) Axle
(d) Orifice support tube
(e) Cylinder
(f) Torque links
(g) Cross tube
(h) Drag links (upper and lower)
NOTE: The Policy does not cover any bearings, bushings, attaching
hardware such as bolts, washers, clamps, brackets, or
actuating or latching mechanisms, or gaskets, O-rings, or
seals used in or on the Covered Components.
D. NORMAL USAGE
------------
Normal wear and tear and the need for regular maintenance shall
not constitute a defect or failure pursuant to Part I hereof.
E. DUPLICATE PROTECTION PLAN REMEDIES
----------------------------------
It is agreed that Seller shall not be obligated to provide to
Buyer any remedy which is a duplicate of any other remedy which
has been provided to Buyer under Part I hereof.
F. DISCLAIMER AND RELEASE, EXCLUSION OF LIABILITIES
------------------------------------------------
1. THE WARRANTY AND SERVICE LIFE POLICY PROVIDED IN THIS
EXHIBIT C, PART I AND THE OBLIGATIONS AND LIABILITIES OF
SELLER UNDER SAID WARRANTY AND SERVICE LIFE POLICY ARE
EXCLUSIVE AND IN LIEU OF, AND BUYER HEREBY WAIVES ALL OTHER
REMEDIES, WARRANTIES, GUARANTEES OR LIABILITIES, EXPRESS OR
IMPLIED, WITH RESPECT TO EACH AIRCRAFT, ARTICLE, PRODUCT,
ACCESSORY, EQUIPMENT, SPARE PART, SERVICE, MANUAL, DOCUMENT,
DATA,OR OTHER THING DELIVERED UNDER THIS AGREEMENT AND
RELATED DOCUMENTS, ARISING BY LAW OR OTHERWISE (INCLUDING,
WITHOUT LIMITATION, ANY OBLIGATION OR LIABILITY ARISING FROM
NEGLIGENCE OR TORT OR WITH RESPECT TO FITNESS,
MERCHANTABILITY, LOSS OF OR DAMAGE TO THE AIRCRAFT.
2. SELLER WILL HAVE NO OBLIGATION OR LIABILITY, WHETHER ARISING
IN CONTRACT (INCLUDING WARRANTY), TORT, WHETHER OR NOT
ARISING FROM THE NEGLIGENCE OF SELLER, OR OTHERWISE , FOR
THE LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER
INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO EACH
AIRCRAFT, ARTICLE, PRODUCT, ACCESSORY, EQUIPMENT, SPARE
PART, SERVICE, MANUAL, DOCUMENT, DATA OR OTHER THING
DELIVERED UNDER THIS AGREEMENT AND RELATED DOCUMENTS.
WARRANTY AND SERVICE LIFE POLICY I-8
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
3. BUYER AND SELLER STATE AND AGREE THAT THIS PART I OF
EXHIBIT C, INCLUDING BUT NOT LIMITED TO PARAGRAPH 1. ABOVE,
HAS BEEN THE SUBJECT OF DISCUSSION AND NEGOTIATION AND IS
FULLY UNDERSTOOD BY THE PARTIES AND THAT THE PRICE OF THE
AIRCRAFT AND THE OTHER MUTUAL AGREEMENTS OF THE PARTIES SET
FORTH IN THIS AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF
THE PROVISIONS CONTAINED IN THIS PARAGRAPH, PARAGRAPH 1.
ABOVE AND THE OTHER PROVISIONS OF THIS PART I OF EXHIBIT C.
4. For the purpose of this paragraph F, "Seller" is defined as
the Boeing Company, its divisions, subsidiaries, affiliates,
the assigns of each, and their respective directors,
officers, employees and agents.
WARRANTY AND SERVICE LIFE POLICY I-9
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
PART II - TRAINING AND SERVICES
This Part II contains the terms and conditions applicable to the
training of Buyer's flight and maintenance personnel. The training
program shall consist of services and support, presented in the American
English language, designed to familiarize, train and assist Buyer's
personnel with the introduction of the Aircraft. Unless otherwise
stated, the program shall be conducted at Seller's Facility. Any other
location or additional training based on Buyer's special requirements
will be subject to mutually agreeable terms and conditions including
price, schedule, location and scope of training required.
A. FLIGHT TRAINING PROGRAM
-----------------------
1. General. Seller reserves the right to rotate instructors
-------
every four weeks when training is conducted away from
Seller's Facility. Instructor services, when utilized away
from Seller's Facility, are counted in full days (eight
hours equals one full day) on a portal to portal basis.
Buyer's personnel shall be qualified and have experience in
Commercial Transport Class (Group II) Turbo Jet Aircraft as
defined in FAR Part 121.400.
2. Training Conference. Buyer and Seller shall schedule a
-------------------
flight training conference at Seller's Facility no less than
twelve months prior to delivery of the first Aircraft. This
conference will establish a training plan and schedule
including the elements in this paragraph A. and will
establish any additional training or special requirements
beyond the scope of this paragraph A. The terms and
conditions applicable to such additional training or special
requirements will be the subject of a separate agreement.
3. Classroom Training. Seller shall conduct the following
------------------
classroom instruction:
a. Flight Crew Ground Training Course - Provide
customized FAA approved operational courses, up to
fifteen days in duration, for six of Buyer's Flight
Crews. This course shall consist of classroom
instruction supplemented by the use of ground training
devices. The course objective is to train Buyer's
personnel to be proficient to operate the Aircraft
systems and to advance to the flight training phase of
paragraph A.4. This course will normally be conducted
during the four month period prior to delivery of the
first Aircraft. Seller shall furnish to each of
Buyer's personnel participating in this course one
copy of the Flight Crew Operating Manual (without
revision service).
b. Flight Crew Ground Training Instructor Course - This
course of up to nineteen business days duration, for
up to four of Buyer's ground training personnel,
consists of the Flight Crew Ground Training Course
plus additional in-depth Aircraft Systems information.
c. Flight Attendant Course - A familiarization course of
up to three days duration shall be conducted for up to
twenty of Buyer's flight attendant personnel. This
course shall present general information on the
Aircraft and detailed information on the operation of
the cabin equipment and emergency
TRAINING AND SERVICES II-1
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
equipment. Seller shall furnish for each participant
in this course one copy of the Flight Attendant Manual
(without revision service). Five instructor days plus
travel time shall be available to assist Buyer's
personnel at Buyer's facility to conduct hands-on
training on the first delivered Aircraft.
d. Flight Dispatcher Course - A course of up to five days
duration shall be conducted for up to ten of Buyer's
flight dispatcher personnel. The course consists of
classroom instruction covering general aircraft
familiarization plus detailed coverage of aircraft
performance, flight planning, weight and balance
calculation and the Master Minimum Equipment List.
Seller shall furnish for each participant in this
course one copy of the Flight Crew Operating Manual
(without revision service).
e. Course Material - If utilized in the course, Seller
shall furnish one set of the following materials
(without revision service) used to conduct the Flight
Crew Ground Training Course, Flight Attendant Course
and Flight Dispatcher Course as applicable:
(1) 35mm slides
(2) Instructional narrative or instruction guides
(3) Overhead projection transparencies
(4) Video tapes
(5) Audio cassette tapes
(6) Computer based courseware in the Seller's format
(7) Cockpit panel prints (two sets unmounted)
f. Customization of Courses - The Flight Crew Ground
Training Course, Flight Crew Ground Training
Instructor Course, Flight Attendant Course and the
Flight Dispatcher Course will be designed to
reasonably reflect the configuration of the Aircraft
and Seller's standard operating procedures.
4. Flight Crew Flight Training. Seller will train Buyer's
---------------------------
Flight Crews with a flight training syllabus which meets the
performance standards of the FAA pilot type rating. Any
additional training beyond the level established by the
syllabus to achieve the desired proficiency will be subject
to mutually agreeable terms and conditions. Seller shall
provide qualified instructors to conduct the flight training
program for a total of one-hundred-thirty calendar days.
These days may be utilized in a combination of the following
types of flight training support:
a. Flight Crew Simulator Training - Seller shall use
reasonable efforts to schedule time in a FAA approved
flight simulator for the training outlined in Seller's
flight training syllabus. Costs of simulator rental
shall be borne by Buyer.
b. Aircraft Ferry - Upon request, Seller shall provide
qualified flight personnel to assist Buyer in ferrying
Aircraft to Buyer's main base.
TRAINING AND SERVICES II-2
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
c. Flight Crew Aircraft Training - If required, Seller
shall conduct a program of aircraft flight training
utilizing Buyer's Aircraft at a mutually agreed
location commencing with the delivery of the first
Aircraft. Seller's responsibility is limited to
instructor service only.
d. Line Training - Upon request, Seller shall provide
flight personnel to assist the Buyer in achieving
initial operating experience. Processing of any
special licenses permits or other documentation
required for the Seller's flight personnel to provide
this service shall be the responsibility of the Buyer.
5. Time Limit. Seller's obligation to provide flight training
----------
shall cease twelve months following delivery of the first
Aircraft.
6. Revisits. Subject to separate contractual negotiation,
--------
operational assistance will be provided on a periodic basis
in the form of revisits by Seller's flight operations
personnel.
7. Recurrent Flight Crew Training. Subject to separate
------------------------------
contractual negotiation, Seller will provide a FAA approved
program of flight crew recurrent training customized in
content and frequency to meet the recurrent training
requirements of Buyer's flight crews.
B. MAINTENANCE AND TECHNICAL TRAINING PROGRAM
1. General. The maintenance training program shall consist of
-------
factory and field training, including training aids and
materials.
2. Training Conference. Buyer and Seller shall schedule a
-------------------
maintenance training conference at Seller's Facility, on a
mutually agreed to date, approximately twelve months prior
to first Aircraft delivery. This conference will establish
a maintenance training plan including the scheduling and
content of all elements in this paragraph B. The scope and
depth of the individual courses defined in the plan will be
based on Seller's standard course syllabi.
3. Seller's Instructor Time. Seller shall provide instructor
------------------------
time, for a combination of factory and field training up to
thirty-four man-weeks.
4. Factory Training. The following factory training will be
----------------
furnished at Seller's Facility:
a. Executive General Familiarization Course - This course
is in general accordance with ATA Specification 104,
Level I and is designed for Buyer's management, or
other support personnel, who are generally familiar
with modern jet aircraft. A brief overview of the
airframe, powerplant, electrical and avionic related
systems shall be presented.
b. General Familiarization Course - This course is in
general accordance with ATA Specification 104, Level I
and is designed for Buyer's management, or
TRAINING AND SERVICES II-3
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
other support personnel, familiar with modern jet
aircraft. It includes a brief overview of the
airframe, powerplant, electrical and avionic related
systems. Additionally, it may provide limited
information of technical data, specifications, special
tools, test equipment, maintenance practices, safety
precautions and procedures peculiar or unique to the
Aircraft.
c. Ramp and Transit Maintenance Course - This course is
in general accordance with ATA Specification 104,
Level II and is designed as basic systems training for
Buyer's management, planning, technical publications
and maintenance personnel who are licensed, certified
or otherwise approved, with experience in
through-flight activities and servicing practices. In
addition to the information contained in the General
Familiarization Course, task oriented information will
be provided concerning identification and location of
systems and components, system operation, control and
indication, minor troubleshooting, normal ground
handling and systems servicing.
d. Airframe and Powerplant Line and Base Maintenance
Course - This course is in general accordance with ATA
Specification 104, Level III and is designed as
advanced systems training for Buyer's line and hangar
maintenance personnel, instructors, technical
specialists, quality assurance inspectors and
engineers. The course material is principally
mechanical, with electrical information presented for
overall system comprehension. Personnel attending
this course must have the knowledge and experience
required to hold current licenses under International
Civil Aviation Organization (ICAO) standards.
Additional task oriented emphasis is placed on
detailed system description and operation, in-depth
troubleshooting, component identification and
location, removal and installation techniques, limited
adjustment and rigging and test procedures.
e. Electrical and Avionics Line and Base Maintenance
Course - This course is designed as advanced systems
training for line and hangar maintenance personnel,
instructors, technical specialists, quality assurance
inspectors and engineers. The course material is
principally electrical and avionics, with mechanical
information presented for overall system
comprehension, and is in general accordance with ATA
Specification 104, Level III. Personnel attending
this course must have the knowledge and experience
required to hold current licenses under International
Civil Aviation Organization (ICAO) standards.
Additional task oriented emphasis is placed on
detailed system description and operation, in-depth
troubleshooting, component identification and
location, removal and installation techniques, limited
adjustment and rigging and test procedures.
f. Specialized Courses - Specialized courses are designed
as task oriented specialized training for Buyer's base
and heavy maintenance personnel, instructors,
technical specialists, quality assurance inspectors
and engineers, and is in general accordance with ATA
Specification 104, Level IV. Buyer's personnel
attending these courses, as defined by subject matter,
must have considerable field experience. Courses will
review pertinent material and
TRAINING AND SERVICES II-4
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
present detailed specific instruction on
troubleshooting, repair, adjustment, rigging and test
procedures. Emphasis is placed on use of maintenance
and repair manuals, wiring diagrams, schematics,
engineering data and process and material standards,
where applicable. Prerequisites for students
attending specialized course will be coordinated by
the Buyer and Seller's maintenance training personnel.
5. Field Training. Seller shall provide the services of a
--------------
field instructor team, consisting of no more than four
instructors, at Buyer's designated base(s) of operation.
The field instructors will provide assistance as mutually
agreed upon to Buyer's maintenance and training personnel,
including classroom and on-the-job training, consultation
and monitoring assistance, and engine shop Quick Engine
Change (QEC) build-up assistance for one engine change.
Seller reserves the right to rotate instructors as required.
The field training shall not exceed a total of nineteen
instructor weeks. The field training weeks available to
Buyer shall be a portion of, and not in addition to,
Seller's instructor time set forth above. Field training is
in general accordance with ATA Specification 104, Levels I
through IV.
6. Vendor Training. Seller will use reasonable efforts, if
---------------
requested by Buyer, to obtain an agreement with its Vendors
to make maintenance training available as required, in
general accordance with ATA Specification 104, Level V.
7. Training Aids and Materials. If utilized in the course,
---------------------------
Seller shall furnish copies of the following training aids
and materials used to conduct Seller's standard training
courses which are in general accordance with ATA
Specification 104, Levels I through III, to assist Buyer in
establishing a maintenance training program at Buyer's
training facility. Revision service shall be provided for
only those materials described in paragraphs 7.a.(1),
7.a.(2) and 7.b. below. Revision service shall be provided
for one year after delivery of the first Aircraft.
a. Audio Visual Aids
(1) Overhead Projection Transparencies - One each of
all appropriate 81/2" x 11" transparencies (in
teaching sequence) used in Seller's baseline
training courses will be provided.
(2) 35mm Slides - One each of the appropriate slides
(in teaching sequence) and a reproducible half
tone master as used in Seller's baseline
training program shall be furnished.
(3) Video Tapes - One copy each of all applicable
color sound video tapes specially designed,
developed and utilized in support of the
baseline training courses will be provided.
(4) Wall Charts (black line) - One set of all wall
charts used in the factory training program will
be provided. These charts will depict cockpit
and instrument panel configuration and
arrangement.
TRAINING AND SERVICES II-5
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
b. Student Manuals - Buyer's personnel attending factory
training courses shall receive corresponding paper
copies of appropriate media with respective narrative.
c. Component and Equipment Location List - Buyer's
personnel attending Seller's standard courses shall
receive one copy of the Component and Equipment
Location List.
d. Study Guides - up to twenty five copies of the system
description and operation section of the Maintenance
Manual, or equivalent information, for Buyer's
Aircraft will be provided.
e. Course Completion Records - Each student attending a
Level II or higher course shall be measured to
demonstrate competence and if qualified shall be
provided a course completion certificate. Seller
shall furnish Buyer with appropriate student records.
8. Time Limit. Seller shall not be obligated to provide
----------
maintenance training after twelve months following delivery
of the first Aircraft.
C. FIELD SERVICE
-------------
1. Seller shall assign one service representative to Buyer's
main base of operation or other location as mutually agreed.
Such assignment shall commence approximately one month prior
to the scheduled delivery of the first Aircraft and shall
continue for one year after delivery of the last Aircraft.
2. Buyer shall furnish, at no charge to Seller, suitable office
facilities and furnishings, secretarial services, and
equipment and conveniently located to Buyer's maintenance
facilities for accommodation of such field service
representative.
D. FACTORY SERVICE
---------------
Seller agrees to maintain the capability to respond to Buyer's
technical inquiries, to conduct investigations concerning
repetitive maintenance problems and the issuance of findings and
recommended action. This service shall be provided for as long as
ten of the aircraft of the type purchased hereunder remain in
regularly scheduled commercial air transport service. Any
investigations which Seller deems to be extensive and requires
more than routine effort by Seller's personnel shall be the
subject of separate contractual negotiations.
E. MAINTENANCE PLANNING ASSISTANCE
-------------------------------
1. Maintenance Requirements. Seller shall provide technical
------------------------
assistance for Buyer's use in planning Aircraft maintenance
requirements.
2. Maintenance Engineering Data. Seller shall provide
----------------------------
maintenance engineering data as set forth in Part IV of this
Exhibit C.
TRAINING AND SERVICES II-6
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
3. Ground Support Equipment Planning. Seller shall recommend
---------------------------------
ground support equipment necessary for operation of the
Aircraft and shall provide a summary of ground support
equipment suitable for use in maintenance and servicing.
4. Maintenance Engineering Operations Review. Seller shall, at
-----------------------------------------
Buyer's request, conduct a maintenance engineering
operations review at Buyer's facility which consists of
assistance to analyze Buyer's then current maintenance and
engineering operational requirements, reliability and
maintenance specifications, maintenance cost and reliability
accounting practices. The object of such review is to
improve the interactions of operations, engineering,
maintenance and logistics for improved operational
effectiveness. Seller will provide the findings and
recommendations in a report to Buyer. This service will be
available until three years after delivery of the last
Aircraft.
5. Maintenance Reliability Program Progression. Buyer agrees
-------------------------------------------
to provide Seller in-service maintenance data for the
Aircraft. Seller shall analyze the data together with
airline industry experience in order to provide updates to
Seller's Recommended On-Aircraft Maintenance Planning (OAMP)
Report. Buyer and Seller shall agree on standards and
frequency for communication of such data.
F. ADDITIONAL SERVICES
-------------------
Seller shall provide additional services which may include
training, special investigations and maintenance and repair of the
Aircraft, subject to mutually agreeable terms and conditions.
G. TRANSPORTATION AND PER DIEM REIMBURSEMENT
-----------------------------------------
1. With respect to all services and support provided by Seller
away from Seller's Facility specified in this Part II, Buyer
shall reimburse Seller for confirmed round trip air
transportation (Business or First Class, as available, on
international flights) for Seller's personnel.
2. Buyer shall reimburse Seller, at Seller's then current rate
of per diem, for each day Seller's personnel are away from
Seller's Facility for all services and support provided in
this Part II. Per diem is not applicable to Seller's field
service representatives at Buyer's main base of operation or
other location assigned and mutually agreed to pursuant to
paragraph C. of this Part II.
H. RISK ALLOCATION AND INSURANCE
-----------------------------
1. Buyer agrees the quality and reliability of Seller's
services provided under this Part II will be based upon the
quality and reliability of the relevant data and information
received from Buyer.
2. BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND
HOLD HARMLESS SELLER, ITS AFFILIATES (INCLUDING THE BOEING
COMPANY AND AFFILIATES OF THE BOEING COMPANY), THEIR
TRAINING AND SERVICES II-7
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
SUBSIDIARIES AND VENDORS, AND THE EMPLOYEES, DIRECTORS,
OFFICERS, AGENTS AND SUBCONTRACTORS OF EACH OF THEM, FROM
AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, COSTS
AND EXPENSES FOR ALL INJURIES TO OR DEATH OF ANY AND ALL
PERSONS (INCLUDING BUYER'S OFFICERS, AGENTS AND EMPLOYEES
UTILIZING SUCH SERVICES AND SUPPORT BUT EXCLUDING EMPLOYEES
OF SELLER) AND FOR LOSS OF OR DAMAGE TO PROPERTY, INCLUDING
THE AIRCRAFT AND LOSS OF USE THEREOF, ARISING DIRECTLY OR
INDIRECTLY OUT OF OR IN CONNECTION WITH ALL TRAINING,
SERVICES AND SUPPORT PROVIDED UNDER OR IN CONNECTION WITH
THIS AGREEMENT, WHETHER OR NOT CAUSED BY THE NEGLIGENCE OF
SELLER, ITS SUBSIDIARIES OR VENDORS, OR THE EMPLOYEES,
DIRECTORS, OFFICERS, AGENTS OR SUBCONTRACTORS OF ANY OF
THEM. IN PROVIDING SUCH SERVICES AND SUPPORT, SELLER, ITS
AFFILIATES (INCLUDING THE BOEING COMPANY AND AFFILIATES OF
THE BOEING COMPANY), THEIR SUBSIDIARIES AND VENDORS AND
THEIR REPRESENTATIVES ARE DEEMED TO BE ACTING IN AN ADVISORY
CAPACITY ONLY AND AT NO TIME SHALL THEY BE DEEMED TO ACT AS
EMPLOYEES OR AGENTS OF BUYER EITHER DIRECTLY OR INDIRECTLY.
3. Buyer agrees to name Seller, its employees, subsidiaries and
affiliates (including The Boeing Company and affiliates of
The Boeing Company) and their assigns as an additional
insured under Buyer's aviation liability insurance policies
with respect to Buyer's obligations set forth in
paragraph 2. above. In addition, Buyer shall cause the
insurance carriers under Buyer's hull insurance policies to
waive all rights of subrogation against Seller to the extent
of Buyer's obligations set forth in paragraph 2. above.
4. One hundred twenty days prior to the scheduled month of
delivery of Buyer's Aircraft, Buyer shall provide Seller
certificates of insurance evidencing (i) Seller being named
as an additional insured, (ii) limits of liability coverage
of $ <F*> ; (iii) subrogation has been waived and
(iv) the term of the insurance. Buyer's insurance shall be
primary and not contributory with any insurance maintained
by Seller. The certificates of insurance shall be kept
current.
[FN]
<F*> Confidential Information omitted and filed separately with the
Commission.
TRAINING AND SERVICES II-8
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
PART III - SPARE PARTS
This Part III contains the terms and conditions applicable to the sale
of Spare Parts.
A. APPLICABILITY
-------------
The terms and conditions of this Part III apply to all orders for
Spare Parts placed by Buyer with Seller by any method of order
placement (including but not limited to SITA, ARINC, Seller's
Customer On-Line Order Processing (CO-OP) System, Internet,
commercial telex, telephone or other telecommunication system or
hard copy purchase order). Any terms or conditions in Buyer's
purchase orders shall not apply.
B. TERM
----
As long as at least ten aircraft of the type purchased hereunder
are operated in scheduled commercial air transport service, Seller
shall maintain, or have maintained, a reasonable stock of Seller
Parts.
C. BUYER'S ORDERS
--------------
Buyer agrees that orders for Spare Parts placed with Seller shall
conform to the requirements and procedures contained in ATA
Specification 200 and Specification 2000.
D. COMMUNICATIONS
--------------
Seller shall make available its on-line order processing system
through SITA, ARINC or direct communication lines which provide
immediate response to inquiries for stock availability, pricing
information and purchase order status. The cost for direct
communication lines shall be borne by Buyer. For AOG and critical
orders automatic messages will be transmitted giving shipping data
such as bill of lading, flight, routing, size and weight of
shipments.
E. STATUS INFORMATION
------------------
Seller agrees that information about purchase order status and
actions related to the shipment of Spare Parts shall be generally
consistent with the provisions of the World Airline and Suppliers
Guide and the applicable portions of ATA Specification 200 and
Specification 2000.
F. PRICES
------
Prices shall be published in the procurement data defined in ATA
Specification 200, Chapter 3 or Specification 2000, Chapter 2.
Seller shall also issue a price catalog for certain Seller Parts
which shall be extracted from this procurement data. Seller shall
hold published prices firm for twelve month intervals and shall
provide at least ninety days notice prior to increasing a
published price. Seller reserves the right to correct errors in
said catalog. Also, Seller shall use reasonable efforts to
require its
SPARE PARTS III-1
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
major Vendors to maintain any published price for their Vendor
Parts for at least twelve month intervals with at least
ninety days notice prior to changing a published price. If Buyer
orders Vendor Parts from Seller, Seller's Vendor Parts prices for
Initial Provisioning Orders shall be the airline acquisition price
plus fifteen percent. Seller's Vendor Parts prices for
replenishment orders shall be the airline acquisition price plus
twenty percent.
G. SHIPMENT
--------
Delivery of Spare Parts ordered from Seller will be F.O.B. point
of shipment. Seller assumes no liability for loss of or damage to
any Spare Part during shipment. Seller agrees that shipment of
Spare Parts to Buyer shall be made as follows:
1. Packaging. Seller shall generally comply with ATA
---------
Specification 300, Revision 17.
2. AOG Orders. Seller shall use reasonable efforts to ship AOG
----------
orders within four hours of receipt of order. If a Spare
Part must be removed from a production aircraft or procured
from another source by Seller, a firm shipping schedule or
status will be transmitted within four hours after receipt
of Buyer's order. Buyer's affected aircraft factory serial
number is required on AOG orders.
3. Critical Orders. Seller shall use reasonable efforts to
---------------
ship critical orders within twenty-four hours of order
receipt.
4. Expedite Orders. Seller shall use reasonable efforts to
---------------
ship expedite orders within seven days of order receipt.
5. Initial Provisioning Orders. Seller shall use reasonable
---------------------------
efforts to ship initial provisioning orders placed with
Seller prior to delivery of the first Aircraft or as
mutually agreed.
6. Other Orders. Seller Parts normally carried in Seller's
------------
inventory shall be shipped approximately ten days after
Seller's receipt of Buyer's order. Shipment of non-stock
Seller Parts shall be in accordance with quoted lead-times
or lead-times published in the current price catalog,
procurement data, or provisioning data. Spare Vendor parts
shall be delivered per the Vendor's quoted lead-time plus
Seller's internal processing time.
H. PAYMENT
-------
Payment terms shall be net thirty days of invoice date. In the
absence of an established open account or an order exceeding the
credit limit established by Seller, Seller may require full or
partial payment prior to shipment of Spare Parts. If Buyer fails
to make any of the payments within the stipulated time period,
Buyer shall pay Interest on the payment from the date due until
payment is received. The payment of Interest shall be in addition
to any other rights or remedies available to Seller.
SPARE PARTS III-2
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
I. PURCHASE OF SELLER'S PARTS
--------------------------
1. In consideration of Seller's obligations to provide Seller
Parts for as long as at least ten aircraft of the type
purchased hereunder are operated in scheduled commercial air
transport service, Buyer agrees to purchase Seller Parts
only from (i) Seller, (ii) Seller's authorized licensees,
(iii) designated sources identified in Seller's spare parts
catalog or (iv) from airline operators of the same type
aircraft purchased herein which parts were originally
purchased from Seller. Buyer may purchase Seller Parts from
other sources, redesign Seller Parts or have them
redesigned, manufacture Seller Parts or have Seller Parts
manufactured only under the following conditions:
a. when less than ten aircraft of the type purchased
hereunder are operated in scheduled commercial air
transport service;
b. any time Seller fails to fulfill its obligations under
paragraph B.;
c. any time Seller Parts are needed to effect emergency
repairs on the Aircraft, provided that Buyer, after
consulting with Seller, in good faith determines that
Seller is unable to comply within a reasonable time to
resolve the emergency;
d. if Buyer has notified Seller in writing that any
Seller Part is defective or unsatisfactory in use and
if within a reasonable period Seller has not provided
a satisfactory resolution or made a redesigned Seller
Part available;
2. Any parts redesigned or manufactured by or for Buyer under
paragraph I. of this Part III shall be identified and
distinguished from Sellers Parts by distinctive and
permanent markings on all said parts, in conformance with
FAA regulations, to confirm that said parts are the product
of Buyer and not Seller. Buyer shall at all times comply
with the FAA regulations, or the foreign equivalent thereof
in each country in which the Buyer operates its Aircraft, as
the said regulations apply to the purchase, manufacture,
redesign, and use of such parts.
3. Buyer's right to purchase, redesign or manufacture Seller
Parts under the preceding conditions shall not be construed
as a granting of a license by Seller, shall not obligate
Seller to the payment of any license, royalty or obligation
and shall not be construed to affect the rights of third
parties.
4. If Buyer redesigns or has redesigned any Seller Parts
pursuant to the foregoing conditions, Buyer, if Buyer has
the right, shall make available to Seller any such
redesigned Seller Parts or drawings. Also, if Seller
requests, Buyer shall negotiate with Seller, within
sixty days after such redesigned Seller Parts or drawings
are available to Seller, for the exclusive manufacturing
rights of the redesigned Seller Parts. If no agreement is
made for such rights within the sixty days, Buyer or its
licensees may manufacture, use and sell (provided it is in
compliance with all regulatory requirements) such redesigned
Seller Parts and Seller shall have the nonexclusive right of
manufacture, use and sale of the redesigned Seller Parts,
except as may be covered by patents or by the laws of the
country where the
SPARE PARTS III-3
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
redesigned Seller Parts have been manufactured. Seller
shall have the nonexclusive right of manufacture, use and
sale of the redesigned Seller Parts if Buyer can grant such
rights. Seller shall not be obligated to pay any royalty or
license fee to Buyer for the nonexclusive right.
J. VENDOR PARTS
------------
Buyer is responsible for complying with the requirements of
Buyer's regulatory authority. Seller, as holder of the type
certificate and production certificate for the Aircraft, has
regulatory approval to sell aircraft replacement parts for the
Aircraft directly to Buyer; however, Seller's Vendors may not have
such approval. While Seller is not obligated to maintain a stock
of Vendor parts, Seller may have certain Vendor Parts in stock for
Buyer's purchase.If a Vendor has not obtained regulatory approval
for a Vendor Part, then Buyer should purchase such part from
Seller.
K. PROVISIONING
------------
1. If requested by Buyer, preprovisioning and provisioning
conferences shall be convened at Seller's Facility on dates
mutually agreed to by Buyer's and Seller's provisioning
personnel in order to:
a. acquaint Buyer with Seller's provisioning system and
available data;
b. plan the provisioning program;
c. establish Buyer's data familiarization and training
requirements; and
d. assist Buyer in the Spare Parts selection process.
2. Initial provisioning spares support shall be provided by
Seller as follows:
a. Seller shall provide the initial issue of provisioning
files required by ATA Specification 200, Revision 24,
Chapters 1 and 2 or Specification 2000, Chapter 1,
Revision 1, (as amended by MDC Document K0064) no
later than nine months prior to the scheduled delivery
of the first Aircraft. Revisions to these
provisioning data shall be issued by Seller every
forty-five days until ninety days after delivery of
the last Aircraft.
b. For provisioning under Specification 2000, Chapter 1,
Revision 1, Seller shall provide all S, T, or V and
ancillary or supplementary files U, W, X, Y and Z.
For provisioning under Chapters 1 and 2 of ATA
Specification 200, Seller shall provide only K, F, B
and D files.
c. The Illustrated Parts Catalog (IPC) designed to
support provisioning shall be issued with provisioning
data files and revised at forty-five day intervals up
to ninety days after delivery of the last Aircraft.
SPARE PARTS III-4
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
d. The Illustrated Parts List designed to support
provisioning shall be issued concurrently with Buyer's
submittal of the T file defined in Chapter 1,
Revision 1 of Specification 2000.
L. GENERAL
1. Quotations. Price and delivery quotations for Seller's
----------
noncatalog listed Seller Parts shall be held firm for
ninety days, except where otherwise noted on the quote
provided for such items as surplus material.
2. Lease of Seller Parts. Seller agrees to lease on an interim
---------------------
basis certain insurance type Seller Parts under Seller's
then current standard terms and conditions.
3. Warranty. Seller Parts purchased or furnished under this
--------
Agreement shall be covered by the warranty provisions and
the terms and conditions set forth in Part I of this
Exhibit C.
4. Seller Services. Buyer agrees that the quality and
---------------
reliability of Seller Services provided under this Part III
shall be based upon the quality and reliability of the data
and information received from Buyer.
5. Additional Terms and Conditions. Buyer agrees that those
-------------------------------
terms and conditions of this Agreement applicable to the
sale of Spare Parts shall be effective during the term of
this Part III.
SPARE PARTS III-5
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
PART IV - AIRCRAFT MANUALS AND DOCUMENTS
This Part IV contains the terms and conditions applicable to furnishing
the Documents.
DOCUMENTS PROVIDED
- - ------------------
Seller (hereinafter in this Part IV to Exhibit C "MDC") shall
furnish the Documents described in Part IV, paragraph E. Unless
otherwise specified herein, such Documents shall be furnished in
the quantities specified by MDC at no additional cost to Buyer.
Additional copies of the Documents shall be made available at
MDC's then current published prices. Such Documents are intended
to provide pertinent information only on items manufactured
according to MDC's proprietary design. Such Documents shall be
prepared in the American English language and in those units of
measure specified in the Detail Specification and as may otherwise
be required to reflect the Aircraft instrumentation.
ATA SPECIFICATIONS
- - ------------------
Unless otherwise noted, all Documents specified in this Part IV
are prepared in general accordance with ATA Specification 100,
Revision 18, or later as MDC may adopt. All other Documents shall
be provided to MDC's existing commercial practices.
SHIPMENT
- - --------
All Documents provided under this Part IV shall be shipped surface
F.O.B. shipping point to Buyer's designated point in the
continental United States of America.
REVISION SERVICE
- - ----------------
Where revision service has been identified as applicable to a
Document in paragraph E. of this Part IV, such revision service
shall be provided for six months following delivery of the last
Aircraft, unless otherwise indicated in paragraph E. Subsequent
revision service may be purchased at the then current prices
specified in the Services and Support Catalog.
LIST OF DOCUMENTS
- - -----------------
The following identifies Documents to be provided in support of
the Aircraft. The explanation of the table is as follows:
Aircraft Manuals and Documents IV-1
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
COLUMN HEADING EXPLANATION OF CODE
- - -------------- -------------------
1 DOCUMENT Title of Document provided.
2 CONFIG Configuration:
A = Contains data common to all DC-9 and MD-80
aircraft.
B = Contains data tailored to specific MD-80 aircraft
model, series or engine type.
C = Contains data configured to Buyer's Aircraft.
D = Contains data common to MD-80 aircraft.
E = Contains data common to all DC-9, MD-80, MD-90,
and MD-95 aircraft.
3 MEDIUM Buyer has selected one of the following optional media
specified in the table.
1 = Paper
2 = Microfilm Diazo
3 = Microfilm Silver Negative
4 = Aperture Cards
5 = Magnetic Media
6 = EDP Printout
[FN]
<F*> = See REMARKS Column
4 REV Revision:
Y = Scheduled Revision Service Applies
N = Revision Service Not Applicable
S = Revised as Required by MDC
[FN]
<F*> = See REMARKS Column
5 QTY Quantity:
(Number) = Quantity per this Agreement
(Number) PER = Quantity per Aircraft
[FN]
<F*> = See REMARKS Column
6 DEL Delivery:
ASAP = As Soon As Possible following the Agreement
- - -
execution but not later than first Aircraft
delivery.
ATD = At Time of Delivery of first Aircraft.
- - -
ASAV = As Soon As Available
- - -
PTD = Prior To Delivery
- - -
[FN]
<F*> = See REMARKS Column
Aircraft Manuals and Documents IV-2
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
COLUMN HEADING EXPLANATION OF CODE
- - -------------- -------------------
7 ATA ATA Specification:
Y = Document is per ATA Specification as described in
paragraph B. of this Part IV.
N = Document is not to ATA Specification.
Aircraft Manuals and Documents IV-3
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A. MAINTENANCE ENGINEERING DATA
- - ---------------------------------------------------------------------------------------------------------------------
1. Access Door Diagrams & D 1 S 3 PTD N
Data Sheets
- - ---------------------------------------------------------------------------------------------------------------------
2. Aircraft Recovery Manual D 1 S 3 PTD N
- - ---------------------------------------------------------------------------------------------------------------------
3. Component Description D 1 S 3 PTD N
& Location List
- - ---------------------------------------------------------------------------------------------------------------------
4. FAA Maintenance D 1 S 3 PTD N
Review Board Report
- - ---------------------------------------------------------------------------------------------------------------------
5. Maintenance Check D 1 S 1 PTD N
Manual (Work Cards)
- - ---------------------------------------------------------------------------------------------------------------------
6. Maintenance Facility D 1 S 3 PTD N
And Equipment Planning
Manual
- - ---------------------------------------------------------------------------------------------------------------------
7. On-Aircraft Maintenance D 1 S 3 PTD N
Planning Report (OAMP)
- - ---------------------------------------------------------------------------------------------------------------------
8. Special Tool & D 4 S 1 ASAV N
Equipment Drawings
(MDC)
- - ---------------------------------------------------------------------------------------------------------------------
9. Support Equipment Summary E 1 S 3 PTD N
- - ---------------------------------------------------------------------------------------------------------------------
B. TECHNICAL PUBLICATIONS DATA
- - ---------------------------------------------------------------------------------------------------------------------
1. Flight Crew Operating C 1 Y 3 <F*> N See Notes
Manual (FCOM) 1 & 2
- - ---------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-4
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2. Maintenance Manual C 1, 3 Y 1 PTD Y Medium 1 shall be
provided on one-sided
paper without holes.
See Notes 2 & 3.
- - ----------------------------------------------------------------------------------------------------------------------------------
3. Product Support Supplier --- 1 S 3 PTD N
Directory
- - ----------------------------------------------------------------------------------------------------------------------------------
4. Product Support Supplier A 1 S 3 PTD N Summarizes MDC's
Agreements Manual Agreements with
Suppliers
- - ----------------------------------------------------------------------------------------------------------------------------------
5. Schematic Manual C 1 Y 30 ASAV N See Note 2
- - ----------------------------------------------------------------------------------------------------------------------------------
6. MDC C 1 Y 1 PTD Y See Notes 2 & 7
Overhaul/Component
Maintenance Manuals
- - ----------------------------------------------------------------------------------------------------------------------------------
7. Vendor C 1 <F*> 1 PTD Y See Note 4
Overhaul/Component
Maintenance Manuals
- - ----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-5
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8. Wiring Diagram Manual C 1 Y 18 ASA Y Quantity of 1 shall be
provided on one-sided
V paper (11 x 16) without
holes. See Notes 2 &
5.
- - -----------------------------------------------------------------------------------------------------------------------------------
9. Tool & Equipment (T&E) A 2 Y 3 PTD Y See Note 2
Lists
- - -----------------------------------------------------------------------------------------------------------------------------------
10. Nondestructive Testing --- <F*> <F*> <F*> <F*> --- Included in Structural
Manual Repair Manual
- - -----------------------------------------------------------------------------------------------------------------------------------
11. Nondestructive Testing A 1,3 S <F*> PTD N Quantity of 4 in Medium
Standard Practice Manual 1. Quantify of 1 in
Medium 3.
- - -----------------------------------------------------------------------------------------------------------------------------------
12. Power Plant Buildup C 1 Y 9 PTD Y See Note 2
Manual
- - -----------------------------------------------------------------------------------------------------------------------------------
13. Structural Repair Manual A 1 Y 2 PTD Y Quantity of 1 shall be
provided on one-sided
paper without holes.
See Note 2.
- - -----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-6
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
14. Service Bulletins (SB) A 1 Y 2 PTD Y See Notes 2 & 12
- - -----------------------------------------------------------------------------------------------------------------------------------
15. Service Bulletin Record A 1 S 2 ATD Y
Book
- - -----------------------------------------------------------------------------------------------------------------------------------
16. Illustrated Parts Catalog C 3 Y 1 PTD Y See Notes 2 & 8
(IPC)
- - -----------------------------------------------------------------------------------------------------------------------------------
17. Airline Data Report A 1 S 3 PTD N See Note 9
- - -----------------------------------------------------------------------------------------------------------------------------------
C. ENGINEERING DATA
- - -----------------------------------------------------------------------------------------------------------------------------------
1. Aircraft Characteristics D 1 S 1 ATD N
For Airport Planning
- - -----------------------------------------------------------------------------------------------------------------------------------
2. Design Handbook A 2 S 1 ATD N
- - -----------------------------------------------------------------------------------------------------------------------------------
3. Douglas Material A 2 S <F*> ATD N MDC shall continue to
Specifications (DMS) provide revision
Manual service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
- - -----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-7
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
4. Douglas Process A 1 S <F*> ATD N MDC shall continue to
Material (DPM) Index provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
- - -----------------------------------------------------------------------------------------------------------------------------------
5. Douglas Process A 2 S <F*> ATD N MDC shall continue to
Standards (DPS) Manual provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
- - -----------------------------------------------------------------------------------------------------------------------------------
6. Drafting Manual A 2 S 1 ATD N
- - -----------------------------------------------------------------------------------------------------------------------------------
7. Drawing Section List C 1 S 3 ATD N
- - -----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-8
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
8. Engineering Drawings C 4 S 1 ATD N
(To Section List Level
Only)
- - -----------------------------------------------------------------------------------------------------------------------------------
9. FAA Approved Airplane C 1 S 1 + 1 PER ATD N See Note 10
Flight Manual (AFM)
- - -----------------------------------------------------------------------------------------------------------------------------------
10. Flying Qualities Report D 1 S 1 ASAV N
- - -----------------------------------------------------------------------------------------------------------------------------------
11. Lamm Schematics C 1 N 10 PER ASAV N
- - -----------------------------------------------------------------------------------------------------------------------------------
12. Minimum Equipment List A 1 Y 5 PTD N
(MEL) Procedures
Manual
- - -----------------------------------------------------------------------------------------------------------------------------------
13. On-Board Wiring C 1 N 1 PER ATD N See Note 11
Diagram Book
- - -----------------------------------------------------------------------------------------------------------------------------------
14. Approved Equivalent A 2 S 1 PTD N MDC shall continue to
Parts List (AEPL) provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
- - -----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-9
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
15. Master Minimum A 1 Y 5 ASAV N MDC shall continue to
Equipment List (MMEL) provide revision
service, as noted in
column 4, until
delivery of the last
Aircraft. No
additional manuals
will be provided.
- - -----------------------------------------------------------------------------------------------------------------------------------
16. Wire Lists & Hookup C 1 S 1<F*> PTD Y Quantity of 1 to be
Charts provided for Buyer's
Aircraft No. 1. An
additional quantity of
1 shall be provided for
Buyer's Aircraft No. 2.
Both copies shall be
provided on paper
without holes.
- - -----------------------------------------------------------------------------------------------------------------------------------
Aircraft Manuals and Documents IV-10
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
DOCUMENT CONFIG MEDIUM REV QTY DEL ATA REMARKS
- - -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
17. Douglas Standards A 2 S 1 ATD N
Manual (DSM)
- - -----------------------------------------------------------------------------------------------------------------------------------
18. Master Component List D 1 S 1 ASAV N See Note 13
(MCL)
- - -----------------------------------------------------------------------------------------------------------------------------------
19. Flight Planning & Cruise B 1 S 1 ASAV N See Note 14
Control Manual (FPCCM)
- - -----------------------------------------------------------------------------------------------------------------------------------
20. Weight & Balance C 1 S 2 ATD N See Note 15
Manual, Chapter 1
- - -----------------------------------------------------------------------------------------------------------------------------------
21. Weight & Balance C 1 N 1 PER <F*> N See Note 15
Manual, Chapter 2
- - -----------------------------------------------------------------------------------------------------------------------------------
22. Weight & Balance C 1 N 1 PER <F*> N See Note 15
Manual, Chapters 1 & 2,
On-Board Copy
- - -----------------------------------------------------------------------------------------------------------------------------------
23. Weight Compliance C 1 N 3 PER <F*> N See Note 15
Report
- - -----------------------------------------------------------------------------------------------------------------------------------
24. Performance Handbook B 1 S 1 ATD N See Note 6
(PH)
- - -----------------------------------------------------------------------------------------------------------------------------------
D. OTHER DATA
- - -----------------------------------------------------------------------------------------------------------------------------------
1. Flight Training Data --- <F*> <F*> <F*> <F*> --- See Part II A.
- - -----------------------------------------------------------------------------------------------------------------------------------
2. Maintenance Training --- <F*> <F*> <F*> <F*> --- See Part II B.
Data
- - -----------------------------------------------------------------------------------------------------------------------------------
3. Provisioning Data --- <F*> <F*> <F*> <F*> --- See Part III
- - -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Aircraft Manuals and Documents IV-11
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
NOTES:
1. Flight Crew Operating Manual (FCOM)
-----------------------------------
a. Initial issue of the FCOM will be six months prior to the
scheduled month of delivery of the first Aircraft.
b. Provided revision service is being supplied under the terms
of this Agreement, or by subsequent purchase order, MDC will
incorporate in its FCOM all applicable MDC originated
Service Bulletins in a regular revision following formal
notification by Buyer that such bulletins will be
accomplished on Buyer's Aircraft. The manuals will then
contain both original and revised configurations until Buyer
advises MDC in writing within two years of Service Bulletin
issue date that one configuration should be completely
removed.
c. Upon receipt of typed draft text in the style of the manual,
MDC will incorporate Buyer originated changes into the FCOM
at a reasonable charge. Illustrations should be of
sufficiently high quality to be electronically scanned. Any
page that is incorporated into MDC's FCOM as a result of a
Buyer-originated change will bear the name of Buyer or
current Aircraft operator. This will indicate that certain
data contained on such pages originated with the Buyer and
that MDC is not responsible for the technical accuracy of
such data. Buyer originated changes incorporated by MDC
shall be considered in all future revisions affecting the
FCOM.
d. Data contained within the FCOM will be tailored to reflect
Buyer's Aircraft configuration, and will be prepared in
accordance with MDC's FCOM concept.
2. Revision Service
----------------
a. Provided revision service is being supplied under the terms
of this Agreement, or by subsequent Purchase Order, MDC will
incorporate in its Illustrated Parts Catalog (IPC),
Maintenance Manual, Overhaul/Component Maintenance Manual,
Structural Repair Manual and Wiring Diagram Manuals all
applicable MDC originated Service Bulletins in a regular
revision following formal notification by Buyer that such
bulletins will be accomplished on Buyer's Aircraft. The
manuals will then contain both original and revised
configurations until Buyer advises MDC in writing within two
years of Service Bulletin issue date that one configuration
should be completely removed.
b. Upon receipt of typed draft text in the style of the
existing manual, MDC will incorporate Buyer originated
modifications in all manuals, except the IPC, at a
reasonable charge. Requests for Buyer originated
modification to the IPC should be addressed to the data
subcontractor. Illustrations should be of sufficiently high
quality to be electronically scanned. MDC cannot take raw
data and write
Aircraft Manuals and Documents IV-12
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
maintenance practices, overhaul information or structural
repair information, or develop illustrations, including
wiring diagrams. Any page that is incorporated into MDC's
manuals as a result of a Buyer-originated change will bear
the name of the originating airline. This will indicate
that certain data contained on such pages originated with
the Buyer and that MDC is not responsible for the technical
accuracy of such data. Buyer originated changes
incorporated by MDC shall be considered in all future
revisions affecting the applicable publications.
3. Maintenance Manual. Includes engine manufacturer's
------------------
information. Chapters 22, 34 and 70 through 80 will be
prepared in general accordance with ATA Specification 100,
Revision 18. The remaining Chapters, although written in
general accordance with Revision 8, will be formatted in
general accordance with Revision 18.
4. Vendor Overhaul/Component Maintenance Manuals. MDC shall
---------------------------------------------
use reasonable efforts to assure that initial copies and
subsequent revision service of Vendor's Overhaul/Component
Maintenance Manuals and parts lists pertaining to repairable
or recoverable components and equipment are supplied to the
Buyer by such Vendors at no cost. Manuals will be in
general accordance with ATA Specification 100, Revision 14,
only if peculiar to the aircraft of the type leased
hereunder. Existing manuals shall be provided wherever
possible and will be in general accordance with ATA
Specification 100, Revision 8, or later as MDC may adopt.
Initial manuals and subsequent revisions and any Service
Bulletins will be distributed by the Vendor directly to the
Buyer.
5. Wiring Diagram Manual. Shall be customized to the Aircraft
---------------------
and will be in general accordance with ATA
Specification 100, Revision 14.
6. Performance Handbook (PH). Additional performance
-------------------------
information for airline performance Engineers; provides
thrust curves, aerodynamic performance curves, etc. This
handbook shall be made available one year after
certification on first aircraft series or engine type.
7. MDC Overhaul/Component Maintenance Manuals. Shall consist
------------------------------------------
of (i) existing copies of DC-9 Overhaul Manual produced to
ATA Specification 100, Revision 8, to the extent applicable
to the Aircraft and (ii) Component Maintenance Manuals
peculiar to the type of aircraft leased hereunder produced
in general accordance with ATA Specification 100,
Revision 14 or later as MDC may adopt.
8. Illustrated Parts Catalog (IPC). The IPC is a customized
-------------------------------
Document intended for use in the identification and
requisition of replaceable aircraft parts and units. The
IPC is a companion Document to the Maintenance Manual and
contains all parts information for which maintenance
practices coverage has been provided. The IPC shall be
prepared in general accordance with ATA Specification 100,
Revision 8, or later as MDC may adopt.
Aircraft Manuals and Documents IV-13
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
9. Airline Data Report. This report shall include a listing of
-------------------
all repairable or recoverable manufactured items grouped by
part number and grouped alphabetically by Vendor name.
10. FAA Approved Airplane Flight Manual. Revisions applicable
-----------------------------------
to the Aircraft shall be provided as soon as practicable
after FAA approval for as long as Lessor owns or operates
the Aircraft.
11. On-Board Wiring Diagram Book. Contains radio and electrical
----------------------------
wiring diagrams only. This book is to be used for interim
reference only until the Wiring Diagram Manual reflects the
delivery configuration of the Aircraft.
12. Service Bulletins (SB). One Aperture Card of the Service
----------------------
Drawing will be provided in lieu of printed illustrations at
MDC's option.
13. Master Component List (MCL). This Document is an automated
---------------------------
list of line replaceable units (LRU) that have reliability,
maintenance, or cost significance.
14. Flight Planning & Cruise Control Manual (FPCCM). Tables on
-----------------------------------------------
magnetic media are available upon request.
15. Weight & Balance Manuals
------------------------
a. Weight & Balance Manual, Chapter 1, is provided at the
time of the first Aircraft delivery only.
b. Weight & Balance Manual, Chapter 2, is provided for
each Aircraft at time of delivery.
c. Weight & Balance Manual, Chapters 1 & 2, On-Board
copy, is provided for each Aircraft at time of
delivery.
d. Weight Compliance Report is provided for each Aircraft
at time of delivery and compares the actual weight to
the weight developed from the Detail Specification.
ADDITIONAL COPIES
- - -----------------
Additional replacement copies of the Documents shall be made
available at MDC's then current published prices.
LIMITATION ON USE OF DOCUMENTS
- - ------------------------------
1. Buyer agrees that, except with MDC's prior written consent
or except as required by law or as otherwise permitted
herein, none of the Documents provided or copies or
duplicates thereof or the Detail Specification or copies
thereof, shall be transferred or permitted out of Buyer's
possession or the contents thereof divulged to any other
person, firm or corporation by Buyer or used by Buyer or
furnished by
Aircraft Manuals and Documents IV-14
<PAGE>
<PAGE>
2-23-98 Exhibit C
A00480-B
Buyer for the design or manufacture of any aircraft or spare
parts or training aids, except when manufacture or redesign
is permitted under the provisions of Part III of this
Exhibit C and then only to the extent and for the purposes
expressly permitted therein.
2. Buyer agrees that any Documents provided by MDC in the form
of Programs shall be subject to the following additional
restrictions on use:
a. Buyer shall have a non-exclusive, non-transferable
license to use a single copy of any Program provided
by MDC.
b. Buyer agrees that it will not without the express
written consent of MDC:
(1) sub-license, assign or attempt to transfer its
license for any Program,
(2) copy any Program other than to create a single
copy of the Program for archival or backup
purposes,
(3) distribute or permit access to any Program to
any third party, or
(4) reverse assemble, reverse compile, or otherwise
translate any Program for any purpose.
WARRANTY
- - --------
The warranty for Documents provided hereunder is set forth in
Part I of this Exhibit C.
Aircraft Manuals and Documents IV-15
<PAGE>
<PAGE>
2-23-98 A00480-B
EXHIBIT D - PRICE ADJUSTMENTS
FOR FLUCTUATIONS IN THE ECONOMY
<PAGE>
<PAGE>
2-23-98 Exhibit D
A00480-B
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY
The Base Price of each Aircraft, after any price adjustments made in
accordance with paragraphs B. and C. of Article 3, shall be subject to
the following escalation provisions in order to determine the Price:
A. PRICE
-----
The Price shall be determined according to the following formula:
P = AFn + En + SCNn
where:
P = Price
AFn = Final Adjusted Airframe Price
En = Final Adjusted Engine Price
SCNn = Final Adjusted Exhibit A's Price
B. FINAL ADJUSTED AIRFRAME PRICE
-----------------------------
1. The Airframe Base Price included in the Base Price contains
no allowance for inflation subsequent to the period of
November 1993 through March 1994. Accordingly, the Airframe
Base Price shall be adjusted to determine the Final Adjusted
Airframe Price, which in no event shall be less than the
Airframe Base Price set forth in paragraph A. of Article 3,
by use of the formula in paragraph 2. below which is based
on fluctuations in the following labor and material price
indexes which are published by the United States of America
- Department of Labor, Bureau of Labor Statistics:
a. Labor or ECI Index - "Employment Cost Index
(compensation) workers in aerospace manufacturing by
occupation and industry group" - Aircraft
manufacturing, SIC Code 3721 (June 1989 = 100), as
released by the Bureau of Labor Statistics, U.S.
Department of Labor on a quarterly basis for the
months of March, June, September and December. The
released Employment Cost Index value for the month of
March will also be used for the months of January and
February; the value for June will also be used for
April and May; the value for September will also be
used for July and August; and the value for December
will also be used for October and November.
b. Material or IC Index - Producer price indexes and
percent changes for commodity groupings and individual
items - Industrial commodities (1982 = 100).
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-1
<PAGE>
<PAGE>
2-23-98 Exhibit D
A00480-B
2. The formula for the airframe is as follows:
ECIn ICn
AFn = AFb [ .75 (-----) + .25 (-----) ]
125.8 118.7
where:
AFn = The Final Adjusted Airframe Price.
AFb = The Airframe Base Price.
ECIn = The average of the ECI Index values for the
fourth through the eighth month (as described
in 1.a. above) prior to the scheduled month of
delivery computed to one decimal place
(Note: 1.05 rounds to 1.1).
125.8 = The average of the ECI Index values for
November 1993 though March 1994 (as described
in 1.a. above).
ICn = The average of the IC Index values for the
fourth through the eighth month prior to the
scheduled month of delivery computed to one
decimal place (Note: 1.05 rounds to 1.1).
118.7 = The average of the IC Index values for
November 1993 through March 1994
3. Airframe Rounding Rules are as follows:
Unless otherwise specified, computations shall be made to
four decimal places (Note: 1.00005 rounds to 1.0001). After
final computation, AFn shall be rounded to the nearest whole
number (Note: 0.5 rounds to 1).
4. The most recent ECI and IC Index values released by the
Bureau of Labor Statistics and made available to Seller for
the applicable months shall be used to determine the ECIn
and ICn values used in the calculation of the Final Adjusted
Airframe Price. However, the index denominators of 125.8
and 118.7 shall not be revised. The Price of the Aircraft
shall not be adjusted after delivery except as defined in
paragraph B.5. below.
5. In the event any of the index values required to calculate
ECIn and ICn have not been released by the Bureau of Labor
Statistics and made available to Seller, Seller shall use
the published value for the nearest preceding quarter for
the ECIn or the nearest preceding month for the ICn for the
purposes of calculating the Final Adjusted Airframe Price
until such values are subsequently published or made
available to Seller. Seller shall submit either a
supplemental invoice or refund the amounts due Buyer as
appropriate to reflect any increase or decrease in the Final
Adjusted Airframe Price for the Aircraft from that
determined at the time of delivery of such Aircraft.
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-2
<PAGE>
<PAGE>
2-23-98 Exhibit D
A00480-B
6. If the Department of Labor revises the methodology (in
contrast to benchmark adjustments and any other corrections
of previously released values) or discontinues any of the
indexes referred to in this Exhibit, the parties shall
select a substitute for the revised or discontinued index.
The substitute index shall lead in application to the same
adjustment result, insofar as possible, as would have been
achieved by continuing to use the original index as it may
have fluctuated had it not been revised or discontinued.
Appropriate revision of the formula shall be made to
accomplish this result.
7. To implement paragraph B.6. above, either party may notify
the other that a change in the indexes within the meaning of
this Exhibit is anticipated or has taken place. Seller
shall then propose substitute indexes and formula revision.
Within ninety days from such notification or from receipt of
data covering the last month of publication of the unchanged
index series, whichever is later, the parties shall agree on
substitute indexes and formula revision. If the parties
cannot so agree, they shall select an arbitrator to decide
the substitute index required to carry out the intent of
paragraph B.6. above, and the decision of the arbitrator
shall be binding. If, however, the parties cannot agree on
an arbitrator, an arbitrator shall be selected in accordance
with the Commercial Arbitration Rules of the American
Arbitration Association. Adjustment of the Price under this
Exhibit and payment of invoices computed from the adjusted
Price, shall continue following any change in the indexes
throughout any period of negotiation or arbitration. The
indexes and formula used when the unchanged indexes are not
available shall be those proposed by Seller, but said
payments shall be on a temporary basis and shall be
corrected. Any required refunds or additional payments
shall be made within thirty days following agreement between
the parties or an arbitration decision.
C. FINAL ADJUSTED ENGINE PRICE (En)
--------------------------------
1. The Engine Base Price contained in the Base Price of the
Aircraft after any adjustment made in accordance with
paragraphs B. and C. of Article 3, shall be adjusted in
accordance with the escalation formula contained in
paragraph 2. below to obtain the Final Adjusted Engine
Price. The Final Adjusted Engine Price, which in no event
shall be less than the Engine Base Price (Eb) set forth in
paragraph A. of Article 3, is derived in accordance with the
formula set forth below which is based on fluctuations in
the following labor, material and energy price indexes which
are published by the United States of America Department of
Labor, Bureau of Labor Statistics:
a. Labor or HE Index - Average hours and earnings of
production or nonsupervisory workers on private
nonfarm payrolls by detailed industry, Industry:
Durable goods, Transportation equipment, Aircraft and
parts - Aircraft engines and engine parts, SIC
Code 3724 - Average hourly earnings.
b. Material or M&MP Index - Producer price indexes and
percent changes for commodity groupings and individual
items - Metals and metal products, Code 10
(1982 = 100).
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-3
<PAGE>
<PAGE>
2-23-98 Exhibit D
A00480-B
c. Energy or ER Index - Producer price indexes and
percent changes for commodity groupings and individual
items - Fuels and related products and power, Code 5
(1982 = 100).
2. The formula for the Engines is as follows:
En = (Eb + F) (.60 HE + .30 M&MP + .10 ER)
where:
En = Final Adjusted Engine Price included in the
Price.
Eb = Engine Base Price set forth in paragraph A. of
Article 3.
F = 0.005 (N) (Eb).
N = The calendar year of scheduled Engine delivery
minus 1994. The calendar year of scheduled
Engine delivery shall be deemed to be the second
month prior to the scheduled month of Aircraft
delivery.
HE = The HE Index (SIC Code 3724) value for the
sixth month prior to the scheduled month of
Aircraft delivery divided by $17.13 (which
represents the base month of December 1993),
rounded to the nearest ten thousandth
(Note: 1.00005 rounds to 1.0001).
M&MP = The M&MP Index value for the sixth month prior
to the scheduled month of Aircraft delivery
divided by 120.2 (which represents the base
month of December 1993 as stated in terms of
1982 = 100), and rounded to the nearest ten
thousandth (Note: 1.00005 rounds to 1.0001).
ER = The ER Index value for the sixth month prior to
the scheduled month of Aircraft delivery divided
by 74.7 (which represents the base month of
December 1993 as stated in terms of 1982 = 100)
and rounded to the nearest ten thousandth
(Note: 1.00005 rounds to 1.0001).
3. Engine Rounding Rules are as follows:
a. The sum of the values of HE and M&MP and ER multiplied
by .60, .30 and .10 respectively shall be rounded to
the nearest ten thousandth (Note: 1.00005 rounds
to 1.0001).
b. The escalation factor shall be rounded to the nearest
ten thousandth (Note: 1.00005 rounds to 1.0001).
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-4
<PAGE>
<PAGE>
2-23-98 Exhibit D
A00480-B
c. After final computation En shall be rounded to the
nearest whole number (Note: 1.5 rounds to 2).
4. If the Department of Labor, by footnote, appendix or by any
other method, discontinues or revises any of the data
referred to above (not benchmark adjustments) or revises the
methodology for obtaining them, the Engine manufacturer
shall select a substitute for the revised or discontinued
data, such substitute to lead in application to the same
adjustment result, insofar as possible, as would have been
achieved by continuing the use of the original data had it
not been revised or discontinued.
5. In the event escalation provisions are made nonenforceable
or otherwise rendered null and void by any agency of the
Government of the United States of America, the parties
agree, to the extent that they may lawfully do so, to adjust
equitably the Engine Base Price of the Engine to reflect an
allowance for increases in labor, material and energy costs
occurring since January 1, 1994 to the sixth month preceding
the scheduled month of Aircraft delivery.
6. Seller reserves the right to make appropriate changes to
this paragraph C., if prior to Aircraft delivery the Engine
manufacturer changes its escalation provisions applicable to
the Engine Base Price of any Aircraft.
D. FINAL ADJUSTED EXHIBIT A'S PRICE
--------------------------------
The Exhibit A's Base Price included in the Base Price contains no
allowance for inflation subsequent to the period of November 1993
through March 1994. Accordingly, the Exhibit A's Base Price shall
be adjusted to determine the Final Adjusted Exhibit A's Price,
which in no event shall be less than the Exhibit A's Base Price
set forth in paragraph A. of Article 3, by use of the same formula
used to escalate the Airframe Base Price in paragraph 2 of Part B.
E. If the scheduled delivery of one or more of the Aircraft is
delayed by an Excusable Delay, the adjustments in this Exhibit
shall be based on the actual delivery month for any delayed
Aircraft.
PRICE ADJUSTMENTS FOR FLUCTUATIONS IN THE ECONOMY D-5
<PAGE>
<PAGE>
2-23-98 A00480-B
EXHIBIT E - NEW ENGINE AND NEW PARTS WARRANTY
<PAGE>
<PAGE>
2-23-98 Exhibit E
A00480-B
NEW ENGINE AND NEW PARTS WARRANTY
A. DEFECTIVE GOODS
---------------
United Technologies Corporation, Pratt & Whitney Group Large,
Commercial Engines (United) warrants to Buyer that at the time of
delivery the goods sold by United hereunder (Engines and Engine
Parts therefor) will be free from defects in material and
manufacture and will conform substantially to United's applicable
specification. United's liability and Buyer's remedy under this
warranty are limited to the repair or replacement, at United's
election, of goods or parts thereof returned to United which are
shown to United's reasonable satisfaction to have been defective;
provided that written notice of the defect shall have been given
by Buyer to United within ninety days after the first operation or
use of the goods (or if the goods are installed in new aircraft,
within ninety days after acceptance of such aircraft by its first
operator) but in no event later than one year after the date of
delivery of such goods by United. Transportation charges for the
return of defective goods to United and their reshipment to Buyer
and the risk of loss thereof will be borne by United only if
returned in accordance with written shipping instructions from
United.
B. TITLE
-----
United warrants to Buyer that it will convey good title to the
goods sold hereunder. United's liability and Buyer's remedy under
this warranty are limited to the removal of any title defect or,
at the election of United, to the replacement of the goods or
parts thereof which are defective in title; provided, however,
that the rights and remedies of the parties with respect to patent
infringement shall be limited to the provisions of paragraph C.
below.
C. PATENT INFRINGEMENT
-------------------
1. United shall conduct, at its own expense, the entire defense
of any claim, suit or action alleging that, without further
combination, the use or resale by Buyer or any subsequent
purchaser or user of the goods delivered hereunder directly
infringes any United States patent, but only on the
conditions that:
a. United receives prompt written notice of such claim,
suit or action and full opportunity and authority to
assume the sole defense thereof, including settlement
and appeals, and all information available to Buyer
and defendant for such defense;
b. said goods are made according to a specification or
design furnished by United or, if a process patent is
involved, the process performed by the goods is
recommended in writing by United; and
c. the claim, suit or action is brought against Buyer or
one expressly indemnified by Buyer.
NEW ENGINE AND NEW PARTS WARRANTY E-1
<PAGE>
<PAGE>
2-23-98 Exhibit E
A00480-B
2. Provided all of the foregoing conditions have been met,
United shall, at its own expense, either settle said claim,
suit or action or shall pay all damages and costs awarded by
the court therein and, if the use or resale of such goods is
finally enjoined, United shall, at United's option:
a. procure for defendant the right to use or resell the
goods;
b. replace them with equivalent noninfringing goods;
c. modify them so that they become noninfringing but
equivalent; or
d. remove them and refund the purchase price (less a
reasonable allowance for use, damage and
obsolescence).
3. If a claim, suit or action is based on a design or
specification furnished by Buyer or on the performance of a
process not recommended in writing by United, or on the use
or sale of the goods delivered hereunder in combination with
other goods not delivered to Buyer by United, Buyer shall
indemnify and save United harmless therefrom.
D. ENGINE AND PARTS SERVICE POLICY
-------------------------------
United warrants to Buyer that it will extend to Buyer, with
respect to aircraft engines sold to Buyer whether installed as new
equipment in Aircraft by Seller and delivered to Buyer or
delivered directly by United to Buyer, allowances and adjustments
in accordance with the applicable Engine and Parts Service Policy
offered by United on the date of United's receipt of the order
therefor. United's liability and Buyer's remedy under this
warranty are limited to the allowances and adjustments and are
subject to the general conditions stipulated in the applicable
Engine and Parts Service Policy; provided, however, that no change
in or retraction of such Policy shall apply to Engines delivered
or to be delivered by United under orders received by United prior
to United's announcement of any such change or retraction.
E. EXCLUSIVE WARRANTIES AND REMEDIES
---------------------------------
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED
IN LIEU OF: (i) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE; AND (ii) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN CONTRACT OR TORT,
WHETHER OR NOT ARISING FROM UNITED'S NEGLIGENCE, ACTUAL OR
IMPUTED. THE REMEDIES OF BUYER SHALL BE LIMITED TO THOSE PROVIDED
HEREIN TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES INCLUDING,
WITHOUT LIMITATION, INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO
AGREEMENT VARYING OR EXTENDING THE FOREGOING WARRANTIES, REMEDIES
OR THIS LIMITATION WILL BE BINDING UPON UNITED UNLESS IN WRITING,
SIGNED BY A DULY AUTHORIZED OFFICER OF UNITED.
NEW ENGINE AND NEW PARTS WARRANTY E-2
<PAGE>
<PAGE>
2-23-98 Exhibit E
A00480-B
F. WARRANTY PASS ON
----------------
United shall, upon the written request of the Buyer, consider an
extension of Warranty coverage to Engines, Modules and Parts sold
by Buyer to another operator to the extent only, however, that
such coverage exists at the time of such sale and subject to the
provisions of the Warranty.
NEW ENGINE AND NEW PARTS WARRANTY E-3
<PAGE>
<PAGE>
6-1162-RCN-1262
Trans World Airlines, Inc.
One City Centre
515 North Sixth Street
St. Louis, Missouri 63101
Subject: Business Considerations
Reference: Agreement No. A00480-B (The Purchase Agreement) between
MCDONNELL DOUGLAS CORPORATION a wholly owned subsidiary of
THE BOEING COMPANY (Seller) and TRANS WORLD AIRLINES,
INC.(Buyer) relating to Model MD-83 aircraft (the
Aircraft)
This letter amends the Purchase Agreement. All terms used but not
defined in this Letter Agreement shall have the same meaning as in the
Purchase Agreement.
1. <F*>
2. <F*>
3. <F*>
4. <F*>
5. <F*>
6. <F*>
7. <F*>
8. <F*>
[FN]
<F*> Confidential Information omitted and filed separately with the
Commission.
<PAGE>
<PAGE>
6-1162-RCN-1262
Page 2
9. <F*>
10. <F*>
11. Setoff Rights Against Amounts Paid Under Other Buyer Agreements.
---------------------------------------------------------------
Buyer agrees that in the event that Buyer defaults in any of its
obligations hereunder, Seller may apply all or any of the advance
payments paid by Buyer to Seller's affiliate under the 757 purchase
agreement no. 1910 to cure any such default hereunder. Additionally, to
the extent that Buyer and Seller or any of Seller's affiliates enter
into any future purchase agreement for Boeing or MDC aircraft, advance
payments made thereunder shall be available and may be applied by Seller
or Seller's affiliate to cure any Buyer default hereunder.
12. Previously Provided Training.
----------------------------
Buyer acknowledges that the training discussed in Part II of
Exhibit C has been previously provided to Buyer.
13. Previously Provided Documents.
-----------------------------
Buyer acknowledges that the documents designated in Part IV of
Exhibit C as "at time of delivery of the first aircraft" have been
previously provided to Buyer.
[FN]
<F*> Confidential Information omitted and filed separately with the
Commission.
<PAGE>
<PAGE>
6-1162-RCN-1262
Page 3
14. Confidentiality.
---------------
Buyer and Seller agree that the terms of Article 16 of the
Purchase Agreement shall apply to this Letter Agreement.
Sincerely,
MCDONNELL DOUGLAS CORPORATION,
a wholly owned subsidiary of
THE BOEING COMPANY
BY _____________________________
ITS ____________________________
ACCEPTED AND AGREED TO THIS
DATE: _____________, 1998
TRANS WORLD AIRLINES, INC.
BY _____________________________
ITS ____________________________
<PAGE>
<PAGE>
6-1162-RCN-1263
Trans World Airlines, Inc.
One City Centre
515 North Sixth Street
St. Louis, Missouri 63101
Subject: Application of Progress Payments
Reference: Agreement No. A00480-B (The Purchase Agreement) between
MCDONNELL DOUGLAS CORPORATION a wholly owned subsidiary
of THE BOEING COMPANY (Seller) and TRANS WORLD
AIRLINES, INC.(Buyer) relating to Model MD-83 aircraft
(the Aircraft)
[Applies to entire body of letter]. <F*>
Sincerely,
MCDONNELL DOUGLAS CORPORATION,
a wholly owned subsidiary of
THE BOEING COMPANY
BY _______________________________
ITS ______________________________
ACCEPTED AND AGREED TO THIS
DATE: _____________, 1998
TRANS WORLD AIRLINES, INC.
BY ________________________________
ITS _______________________________
[FN]
<F*> Confidential Information omitted and filed separately with the
Commission.
<PAGE>
<PAGE>
6-1162-RCN-1266
Trans World Airlines, Inc.
One City Centre
515 North Sixth Street
St. Louis, Missouri 63101
Subject: <F*>
Reference: Agreement No. A00480-B (The Purchase Agreement) between
MCDONNELL DOUGLAS CORPORATION a wholly owned subsidiary
of THE BOEING COMPANY (Seller) and TRANS WORLD
AIRLINES, INC.(Buyer) relating to Model MD-83 aircraft
(the Aircraft)
[Applies to entire body of letter]. <F*>
Sincerely,
MCDONNELL DOUGLAS CORPORATION,
a wholly owned subsidiary of
THE BOEING COMPANY
BY ________________________
ITS _______________________
ACCEPTED AND AGREED TO THIS
DATE: _____________, 1998
TRANS WORLD AIRLINES, INC.
BY ________________________
ITS _______________________
[FN]
<F*> Confidential Information omitted and filed separately with the
Commission.
<PAGE>
<TABLE>
EXHIBIT 11
TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
Twelve Months Ended
December 31,
----------------------------------
ADJUSTMENTS TO NET INCOME (LOSS): 1998 1997
---------- ----------
<S> <C> <C>
Loss before extraordinary items $(107,412) $ (89,862)
Preferred stock dividend requirements (23,454) (16,119)
---------- ----------
Loss before extraordinary items applicable to
common stock for basic earnings per share calculation (130,866) (105,981)
Extraordinary items (13,069) (20,973)
---------- ----------
Net loss applicable to common stock for basic
earnings per share calculation $(143,935) $(126,954)
========== ==========
Net loss applicable to common stock for
diluted earnings per share calculation $(143,935) $(126,954)
========== ==========
ADJUSTMENTS TO OUTSTANDING SHARES:
Basic earnings per share:
Average number of shares of common stock <F1><F2> 61,319 53,477
========== ==========
Total average number of common and common equivalent
shares used for diluted earnings per share calculation 61,319 53,477
========== ==========
PER SHARE AMOUNTS:
Loss before extraordinary items
Basic $ (2.14) $ (1.98)
Diluted <F3> $ (2.14) $ (1.98)
Net loss
Basic $ (2.35) $ (2.37)
Diluted <F3> $ (2.35) $ (2.37)
<FN>
- - ---------
(1) Includes 6,795 shares for the twelve months ended December 31, 1998
and 6,397 shares for the twelve months ended December 31, 1997, of
Employee Preferred Stock which, except for a liquidation preference
of $.01 per share and the right to elect a certain number of
directors to the Board of Directors, is the functional equivalent of
common stock.
(2) Pursuant to an employee stock incentive plan (ESIP or the Plan), the
Company is required to distribute additional shares of common stock
and Employee Preferred Stock as a result of the distribution of
additional shares following the effective date of the 1995
reorganization. The Company distributed 931,604 additional shares
in July 1997 and 2,377,084 additional shares in July 1998 under this
provision. Additionally, the ESIP provides that, continuing through
2002, employees may significantly increase their ownership, through
grants or purchases, as set forth in the Plan. The earnings (loss)
per share computations do not give any effect to future potential
issuances of these shares.
(3) As the effects of including the incremental shares associated with
options and warrants and the assumed conversion of the 8% and the
9-1/4% Preferred Stock are antidilutive, such have not been included
in the computation of diluted earnings per share.
</TABLE>
<PAGE>
<TABLE>
Exhibit 12
TRANS WORLD AIRLINES, INC.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Amounts in Thousands Except Ratio)
<CAPTION>
Reorganized Company Predecessor Company
---------------------------------------------------- --------------------------
Four Months Eight Months
Year Ended Year Ended Year Ended Ended Ended Year Ended
December 31, December 31, December 31, December 31, August 31, December 31,
1998 1997 1996 1995 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Loss from operations before
income taxes $ (107,169) $ (89,335) $ (274,577) $ (32,268) $ (338,309) $ (432,869)
Add:
Interest on indebtedness 116,918 114,066 126,822 45,917 123,247 195,352
Portion of rents representative
of the interest factor 152,779 123,609 100,997 32,131 60,849 87,122
------------ ------------ ------------ ------------ ------------ ------------
Income as adjusted $ 162,528 $ 148,340 $ (46,758) $ 45,780 $ (154,213) $ (150,395)
------------ ------------ ------------ ------------ ------------ ------------
Fixed Charges:
Interest on indebtedness $ 116,918 $ 114,066 $ 126,822 $ 45,917 $ 123,247 $ 195,352
Capitalized interest 7,085 4,784 5,463 -- -- 2,133
Portion of rents representative
of the interest factor 152,779 123,609 100,997 32,131 60,849 87,122
------------ ------------ ------------ ------------ ------------ ------------
Fixed charges $ 276,782 $ 242,459 $ 233,282 $ 78,048 $ 184,096 $ 284,607
------------ ------------ ------------ ------------ ------------ ------------
Preferred Stock Dividends:
Preferred stock dividend requirements $ 23,454 $ 16,119 $ 36,649 $ 4,754 $ 11,554 $ 15,000
Tax adjustment 14,995 10,306 23,431 3,039 7,387 9,590
------------ ------------ ------------ ------------ ------------ ------------
Preferred stock dividends $ 38,449 $ 26,425 $ 60,080 $ 7,793 $ 18,941 $ 24,590
------------ ------------ ------------ ------------ ------------ ------------
Combined fixed charges and
preferred stock dividends $ 315,231 $ 268,884 $ 293,362 $ 85,841 $ 203,037 $ 309,197
------------ ------------ ------------ ------------ ------------ ------------
Ratio of earnings to combined fixed charges
and preferred stock dividends 0.52 0.55 (0.16) 0.53 (0.76) (0.49)
------------ ------------ ------------ ------------ ------------ ------------
Deficiency $ 152,703 $ 120,544 $ 340,120 $ 40,061 $ 357,250 $ 459,592
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF TRANS WORLD AIRLINES, INC.
------------------------------------------
1. Ambassador Fuel Corporation
2. ConFin Inc.
3. Constellation Finance LLC <F1>
4. Getaway Management Services, Inc.
5. International Airport Services
6. International Aviation Security (UK)
7. International Aviation Security Gesellschaft
8. International Aviation Security Italia S.r.l.
9. International Aviation Security Ltd.
10. International Aviation Security N.V
11. International Aviation Security, Inc.
12. LAX Holding Company, Inc.
13. Mega Advertising, Inc.
14. Northwest 112th Street Corp.
15. Ozark Group, Inc.
16. Royal Ambassador Insurance Company
17. The Getaway Group (UK), Inc
18. The TWA Ambassadors Club, Inc.
19. Trans World Computer Services, Inc.
20. Trans World Express, Inc.
21. Trans World Pars, Inc. <F2>
22. Transcontinental & Western Air, Inc.
23. TWA Aviation, Inc.
24. TWA de Mexico S.A. de C.V.
25. TWA Employee Services, Inc.
26. TWA Getaway Vacations, Inc
27. TWA Group, Inc.
28. TWA Nippon, Inc.
29. TWA Standards & Controls, Inc.
30. TWA Stock Holding Company, Inc.
31. TWA-D.C. Gate Company, Inc.
32. TWA-Hangar 12 Holding Company, Inc.
33. TWA-LAX Gate Company, Inc.
34. TWA-Logan Gate Company, Inc.
35. TWA-NY/NJ Gate Company, Inc.
36. TWA-Omnibus Gate Company, Inc.
37. TWA-San Francisco Gate Company, Inc.
[FN]
- - -------------------------
<F1> Pursuant to Partnership Agreement ConFin is managing partner of
this entity. TWA is the limited partner.
<F2>Holds 25% of Worldspan
<PAGE>
Exhibit 23.1
AUDITORS' CONSENT
-----------------
The Board of Directors
Trans World Airlines, Inc.:
We consent to incorporation by reference in the registration statements
(No. 333-01561, 333-05163, 333-04787, 333-12739, 333-32441 and
333-39739) on Forms S-8 and in the registration statements (No.
333-04977, 333-26639 and 333-44689) on Forms S-3 of Trans World
Airlines, Inc. of our report dated February 19, 1999, relating to the
consolidated balance sheets of Trans World Airlines, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the related
statements of consolidated operations, cash flows and shareholders'
equity (deficiency) for each of the years in the three-year period ended
December 31, 1998, and all related schedules, which report appears in
the December 31, 1998 annual report on Form 10-K of Trans World
Airlines, Inc.
KPMG LLP
Kansas City, Missouri
February 19, 1999
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, John W. Bachmann, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ John W. Bachmann
---------------------
John W. Bachmann
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, William F. Compton, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ William F. Compton
----------------------
William F. Compton
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Eugene P. Conese, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Eugene P. Conese
--------------------
Eugene P. Conese
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Edgar M. House, a Director
of TRANS WORLD AIRLINES, INC., a Delaware corporation, do constitute and
appoint Gerald L. Gitner, Kathleen A. Soled and Michael J. Palumbo, and
each of them, my true and lawful attorneys-in-fact, with full power of
substitution and resubstitution, for me and in my name, on my behalf and
in my stead, in any and all capacities, to sign, pursuant to the
requirements of the Securities Exchange Act of 1934, the Annual Report
on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year ended
December 31, 1998, and to file such Annual Report on Form 10-K with the
Securities and Exchange Commission, together with all exhibits thereto
and other documents in connection therewith, and to sign on my behalf
and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Edgar M. House
-------------------
Edgar M. House
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Thomas H. Jacobsen, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Thomas H. Jacobsen
----------------------
Thomas H. Jacobsen
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Myron Kaplan, a Director
of TRANS WORLD AIRLINES, INC., a Delaware corporation, do constitute and
appoint Gerald L. Gitner, Kathleen A. Soled and Michael J. Palumbo, and
each of them, my true and lawful attorneys-in-fact, with full power of
substitution and resubstitution, for me and in my name, on my behalf and
in my stead, in any and all capacities, to sign, pursuant to the
requirements of the Securities Exchange Act of 1934, the Annual Report
on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year ended
December 31, 1998, and to file such Annual Report on Form 10-K with the
Securities and Exchange Commission, together with all exhibits thereto
and other documents in connection therewith, and to sign on my behalf
and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Myron Kaplan
-----------------
Myron Kaplan
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, David M. Kennedy, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ David M. Kennedy
---------------------
David M. Kennedy
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Merrill A. McPeak, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Merrill A. McPeak
---------------------
Merrill A. McPeak
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Thomas F. Meagher, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Thomas F. Meagher
---------------------
Thomas F. Meagher
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, G. Joseph Reddington, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ G. Joseph Reddington
------------------------
G. Joseph Reddington
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Blanche M. Touhill, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Blanche M. Touhill
----------------------
Blanche M. Touhill
<PAGE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that I, Brent S. Miller, a
Director of TRANS WORLD AIRLINES, INC., a Delaware corporation, do
constitute and appoint Gerald L. Gitner, Kathleen A. Soled and Michael
J. Palumbo, and each of them, my true and lawful attorneys-in-fact, with
full power of substitution and resubstitution, for me and in my name, on
my behalf and in my stead, in any and all capacities, to sign, pursuant
to the requirements of the Securities Exchange Act of 1934, the Annual
Report on Form 10-K for TRANS WORLD AIRLINES, INC. for the fiscal year
ended December 31, 1998, and to file such Annual Report on Form 10-K
with the Securities and Exchange Commission, together with all exhibits
thereto and other documents in connection therewith, and to sign on my
behalf and in my stead, in any and all capacities, any amendments and
supplements to said Annual Report on Form 10-K, incorporating such
changes as any of the said attorneys-in-fact deems appropriate, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
or her substitute or substitutes, may do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of
March, 1999.
/s/ Brent S. Miller
-------------------
Brent S. Miller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONDENSED CONSOLIDATED FINANCIAL STATMENTS OF TRANS
WORLD AIRLINES, INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 252,408
<SECURITIES> 0
<RECEIVABLES> 184,951
<ALLOWANCES> 14,459
<INVENTORY> 99,909
<CURRENT-ASSETS> 605,414
<PP&E> 860,058
<DEPRECIATION> 240,028
<TOTAL-ASSETS> 2,554,623
<CURRENT-LIABILITIES> 1,002,839
<BONDS> 735,418
<COMMON> 578
0
119
<OTHER-SE> 184,625
<TOTAL-LIABILITY-AND-EQUITY> 2,554,623
<SALES> 0
<TOTAL-REVENUES> 3,259,147
<CGS> 0
<TOTAL-COSTS> 3,324,306
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,711
<INTEREST-EXPENSE> 116,918
<INCOME-PRETAX> (107,169)
<INCOME-TAX> 243
<INCOME-CONTINUING> (107,412)
<DISCONTINUED> 0
<EXTRAORDINARY> 13,069
<CHANGES> 0
<NET-INCOME> (120,481)
<EPS-PRIMARY> (2.35)
<EPS-DILUTED> (2.35)
</TABLE>
