<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
WORLD AIRWAYS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14a.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
[WORLD AIRWAY LOGO]
-----------------------------------
1996
------------------------------------
ANNUAL
-------------------------------------
MEETING
--------------------------------------
<PAGE>
April 18, 1996
DEAR STOCKHOLDER:
We cordially invite you to attend your Company's Annual Meeting of
Stockholders to be held on Wednesday, May 22, 1996. Enclosed are a proxy
statement and a form of proxy. Please note that the meeting will commence at
9:30 a.m. at the Company's headquarters located at 13873 Park Center Road, Suite
490, Herndon, Virginia 22071.
At this meeting we will ask the Stockholders (i) to elect three Class I
Directors to serve until the 1999 Annual Meeting, and (ii) to ratify the
selection of KPMG Peat Marwick LLP as World Airways' independent public
accountants for the year ending December 31, 1996.
We value your participation by voting your shares on matters that come
before the meeting. Please follow the instructions on the enclosed proxy to
ensure representation of your shares at the meeting.
Sincerely,
CHARLES W. POLLARD
President and Chief Executive Officer
<PAGE>
WORLD AIRWAYS, INC.
The Hallmark Building
13873 Park Center Road
Herndon, Virginia 22071
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1996
TO THE STOCKHOLDER ADDRESSED:
World Airways, Inc. will hold its Annual Meeting of Stockholders at 9:30
a.m. at the Company's Headquarters located at 13873 Park Center Road, Suite 490,
Herndon, Virginia, on May 22, 1996, for the following purposes:
1. To elect three Class I Directors to serve until the 1999 Annual
Meeting of Stockholders, and until their successors have been
duly elected and qualified;
2. To ratify the selection of KPMG Peat Marwick LLP as independent
certified public accountants for the Company for the year ending
December 31, 1996; and
3. To act upon such other matters as may properly come before the
meeting.
The record date for the determination of stockholders entitled to vote at
the meeting is March 25, 1996, and only stockholders of record at the close of
business on that date will be entitled to vote at this meeting and any
adjournment thereof.
Whether or not you plan to attend the stockholders' meeting, please follow
the instructions on the enclosed proxy to ensure representation of your shares
at the meeting. You may revoke your proxy at any time prior to the time it is
voted.
Herndon, Virginia By Order of the Board of Directors,
April 18, 1996
VANCE FORT
Executive Vice President
<PAGE>
WORLD AIRWAYS, INC.
The Hallmark Building
13873 Park Center Road
Herndon, Virginia 22071
PROXY STATEMENT
This proxy statement is furnished to stockholders in connection with the
solicitation of proxies by the Board of Directors of World Airways, Inc. ("World
Airways" or the "Company") for use at the Annual Meeting of Stockholders to be
held on Wednesday, May 22, 1996, and any adjournment thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders and
described in detail herein. The meeting will be held at 9:30 a.m. at the
Company's headquarters located at 13873 Park Center Road, Suite 400, Herndon,
Virginia.
All properly executed proxies will be voted in accordance with the
instructions contained thereon, and if no choice is specified, the proxies will
be voted for the election of all Class I Directors named elsewhere in this proxy
statement and in favor of the appointment of KPMG Peat Marwick LLP as
independent auditors. Any proxy may be revoked by the stockholder at any time
before it is exercised by giving written notice to that effect to the Secretary
of the Company or by signing a later-dated proxy. Stockholders who attend the
meeting may revoke any proxy previously granted and vote in person.
This proxy statement and the accompanying proxy are being mailed to the
stockholders on or about April 18, 1996.
PURPOSE OF MEETING
At the meeting, the Board of Directors will ask stockholders to (1) elect
three Class I Directors to serve until the 1999 Annual Meeting of Stockholders,
and until their successors are duly elected and qualified, and (2) ratify the
selection of KPMG Peat Marwick LLP as independent certified public accountants
for the Company for the year ending December 31, 1996. In addition, the
stockholders will act upon such other matters as may properly come before the
meeting.
VOTING
GENERAL
- -------
Only holders of record of the Company's Common Stock, par value $.001 per
share ("Common Stock"), at the close of business on March 25, 1996, will be
entitled to vote at the meeting. On March 25, 1996, 12,000,064 shares of Common
Stock were outstanding and entitled to vote. Each share of Common Stock is
entitled to one vote.
Shares of Common Stock represented by proxies received in the accompanying
form that are properly executed and returned to the Company will be voted at the
Annual Meeting of Stockholders in accordance with the stockholders' instructions
contained in such proxies. Where no such instructions are given, proxy holders
will vote such shares in accordance with the recommendations of the Board of
Directors. The proxy holders will also vote such shares at their discretion
with respect to such other matters as may properly come before the meeting.
<PAGE>
A quorum at the Annual Meeting will consist of the presence, in person or
by proxy, of at least a majority of the shares of Common Stock outstanding on
the record date and entitled to vote at the Annual Meeting. Each stockholder
may cast one vote per share owned by such stockholder for each of three nominees
for Class I Director. The three nominees receiving the greatest number of votes
will be elected. In calculating the vote, broker non-votes will be disregarded
and will have no effect on the outcome of the vote. The affirmative vote of a
majority of shares voting at the meeting is required to ratify the selection of
KPMG Peat Marwick LLP. In determining whether KPMG Peat Marwick LLP has
received the requisite number of affirmative votes, abstentions and broker non-
votes will be counted and will have the same effect as a vote against KPMG Peat
Marwick LLP. The Company does not know of any matters to be acted upon at the
meeting other than the two items described in this Proxy Statement. Any
stockholder has the power to revoke a proxy at any time before it is voted.
THE COMPANY
World Airways is a leading provider of long-range passenger and cargo air
transportation, serving customers in four distinct markets: (i) major
international air carriers; (ii) the U.S. Government; (iii) international tour
operators in the leisure passenger market; and (iv) small package shippers and
freight forwarders. In addition, World Airways provides non-stop scheduled air
transportation between New York's John F. Kennedy, Jr. International Airport and
Tel Aviv, Israel's Ben Gurion International Airport.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN PERSONS
PRINCIPAL STOCKHOLDERS
- ----------------------
The following are the only persons known to the Company who are
beneficial owners of more than five percent of Common Stock as of December 31,
1995 (except as otherwise noted). With respect to the information set forth
below, the Company has relied upon Schedule 13D or Schedule 13G filings and
information received from the persons listed.
<TABLE>
<CAPTION>
Name of Beneficial Address of Amount and Nature of Percent
Owner Beneficial Owner Beneficial Ownership/1/ of Class/1/
- ------------------------------- ---------------------- ----------------------- ------------
<S> <C> <C> <C>
WorldCorp, Inc. 13873 Park Center Road 7,110,064/2/ 59.3%
Suite 490
Herndon, VA 22071
Malaysian Helicopter Services 25th Floor 1,990,000/3/ 16.6%
International Limited Wing On Center
1111 Connaught Road
Central Hong Kong
</TABLE>
- -------------------------
Footnotes
/1/ Beneficial ownership as reported in the table has been determined in
accordance with Securities and Exchange Commission ("SEC") regulations and
includes shares of Common Stock which may be acquired within 60 days of
December 31, 1995, upon the exercise of outstanding stock options. In
accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (the
"Exchange Act"), shares of Common Stock issuable upon the exercise of such
options are deemed outstanding for purposes of computing the percentage of
Common Stock owned by the beneficial owner thereof listed in the table, but
are not deemed outstanding for purposes of computing the percentage of
outstanding Common Stock owned by any other stockholder. Except as otherwise
stated below, the named persons have sole voting and investment power with
regard to the shares shown as owned by such person. Calculation of the
Percent of Class is based on 12,000,064 shares of Common Stock outstanding
as of December 31, 1995.
/2/ Beneficial ownership as reported in Schedule 13D dated October 23, 1995,
filed by WorldCorp, Inc.
/3/ Beneficial ownership reported in Schedule 13D dated October 12, 1995,
filed by Malaysian Helicopter Services International Limited.
3
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
- ------------------------------------------------------
The following table sets forth information concerning the beneficial
ownership of World Airways' Common Stock ("WA C.S.") and the common stock of
WorldCorp, Inc., a Delaware corporation ("WorldCorp"), and the beneficial owner
of 59.3% of the Common Stock of the Company ("WC C.S.") as of March 31, 1996,
for (a) each director and nominee for director; (b) each executive officer; and
(c) directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of Title of Percent of
Name of Beneficial Owner Beneficial Ownership/1/ Class Class/1/
- -------------------------- ----------------------- ---------- -------------
<S> <C> <C> <C>
T. Coleman Andrews, III 10,000/2/ WA C.S. *
557,992/3/ WC C.S. 3.3
Charles W. Pollard 108,000/4/ WA C.S. *
150,022/5/ WC C.S. *
Vance Fort 43,750/6/ WA C.S. *
2,768/7/ WC C.S. *
Henk J. Guitjens 25,000/8/ WA C.S. *
1,472/9/ WC C.S. *
Ahmad M. Khatib 80,000/10/ WA C.S. *
219,332/11/ WC C.S. 1.3
Michael E. Savage 40,000/12/ WA C.S. *
382/13/ WC C.S. *
A. Scott Andrews 10,000/14/ WA C.S. *
112,334/15/ WC C.S. *
Dato' Wan Malek Ibrahim --- --- ---
Russell L. Ray, Jr. 15,000/16/ WA C.S. *
Peter M. Sontag 30,000/17/ WA C.S. *
Lim Kheng Yew --- --- ---
Directors and Executive
Officers as a Group
(eleven persons) 361,750 WA C.S. 3.0
1,044,302 WC C.S. 6.4
</TABLE>
* Individual is the beneficial owner of less than one percent (1%) of World
Airway's or WorldCorp's outstanding Common Stock.
4
<PAGE>
- -------------------------
Footnotes
/1/ Beneficial ownership as reported in the table has been determined in
accordance with SEC regulations and includes shares of Common Stock and
WorldCorp common stock which may be acquired within 60 days after March 31,
1996, upon the exercise of outstanding stock options and warrants. In
accordance with Rule 13d-3 of the Exchange Act, shares of Common Stock of
either company issuable upon the exercise of such options and warrants are
deemed outstanding for purposes of computing the percentage of Common Stock
of each Company owned by the beneficial owner thereof listed in the table,
but are not deemed outstanding for purposes of computing the percentage of
outstanding Common Stock of such company owned by any other stockholder.
Except as otherwise stated below, the named persons have sole voting and
dispositive power with regard to the shares shown as owned by such person.
The latest information available for the WorldCorp Employee Savings and
Stock Ownership Plan ("ESSOP") is as of the end of the plan year, December
31, 1995. Calculation of the Percent of Class is based on 12,000,064 shares
of Common Stock outstanding as of March 31, 1996; calculation of the
Percent of Class of WorldCorp common stock is based on 16,395,388 shares of
WorldCorp Common Stock outstanding as of March 31, 1996.
/2/ Consists of (i) 535,000 shares of WorldCorp common stock issuable to Mr.
Coleman Andrews upon the exercise of stock options granted under the
WorldCorp 1988 Stock Option Plan and (ii) 18,853 shares of WorldCorp common
stock allocated to Mr. Andrews under the WorldCorp ESSOP and (iii) 4,139
shares of WorldCorp common stock owned directly by Mr. Andrews.
/3/ Consists of 10,000 shares of Common Stock owned directly by Mr. Andrews.
/4/ Consists of 100,000 shares of Common Stock issuable to Mr. Pollard upon the
exercise of options granted under the 1995 Option Plan and 8,000 shares of
Common Stock owned directly by Mr. Pollard.
/5/ Consists of (i) 130,000 shares of WorldCorp common stock issuable to Mr.
Pollard upon the exercise of warrants, (ii) 19,022 shares of WorldCorp
common stock allocated to Mr. Pollard under the WorldCorp ESSOP and (iii)
1,000 shares of WorldCorp common stock owned through an individual
retirement account.
/6/ Consists of 43,750 shares of Common Stock issuable to Mr. Fort upon the
exercise of options granted under the 1995 Option Plan.
/7/ Consists of 2,768 shares of WorldCorp common stock allocated to Mr. Fort
under the WorldCorp ESSOP.
/8/ Consists of 25,000 shares of Common Stock issuable to Mr. Guitjens upon the
exercise of options granted under the 1995 Option Plan.
/9/ Consists of 1,472 shares of WorldCorp common stock allocated to Mr.
Guitjens under the WorldCorp ESSOP.
5
<PAGE>
/10/ Consists of 30,000 shares of Common Stock issuable to Mr. Khatib upon the
exercise of options granted under the 1995 Option Plan and 50,000 shares of
Common Stock which may be acquired from WorldCorp pursuant to an option
granted to Mr. Khatib by WorldCorp in May 1995.
/11/ Consists of (i) 214,400 shares of WorldCorp common stock issuable to Mr.
Khatib upon the exercise of options granted under the WorldCorp 1988 Stock
Option Plan and (ii) 4,932 shares of WorldCorp common stock allocated to
Mr. Khatib under the WorldCorp ESSOP.
/12/ Consists of 40,000 shares of Common Stock issuable to Mr. Savage upon the
exercise of options granted under the 1995 Option Plan.
/13/ Consists of 382 shares of WorldCorp common stock allocated to Mr. Savage
under the WorldCorp ESSOP.
/14/ Consists of 10,000 shares of Common Stock issuable to Mr. Scott Andrews
upon the exercise of options granted under the 1995 Option Plan.
/15/ Consists of (i) 102,334 shares of WorldCorp common stock issuable to Mr.
Scott Andrews upon the exercise of options granted under the WorldCorp 1988
Stock Option Plan and (ii) 10,000 shares of WorldCorp common stock owned
directly by Mr. Andrews.
/16/ Consists of 10,000 shares of Common Stock issuable to Mr. Ray upon the
exercise of options granted under the 1995 Option Plan and 5,000 shares of
Common Stock owned directly by Mr. Ray.
/17/ Consists of 10,000 shares of Common Stock issuable to Mr. Sontag upon the
exercise of options granted under the 1995 Option Plan and 20,000 shares of
Common Stock owned directly by Mr. Sontag.
Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
directors and executive officers, and persons who own more than 10% of its
Common Stock, to file with the SEC initial reports of ownership of the Company's
equity securities and to file subsequent reports when there are changes in such
ownership. To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company, all Section 16(a) filing requirements
applicable to its greater than 10% beneficial owners, directors and executive
officers were complied with in 1995.
6
<PAGE>
BOARD OF DIRECTORS
The Board of Directors of the Company is responsible for establishing
broad corporate policies and for the overall performance of the Company. The
Board held a total of four meetings during the year ended December 31, 1995;
each director attended each meeting. To manage the complex nature of the
Company's business effectively, the Board of Directors has delegated certain
authority to committees of the Board, all of which were formed in July, 1995.
The Board has authorized its Executive Committee to exercise all of
its power and authority when the full Board is unable to meet, except for
certain fundamental responsibilities, such as the declaration of dividends, that
are reserved for the Board. The members of the Executive Committee are T.
Coleman Andrews, III, Charles W. Pollard, and Dato' Wan Malek Ibrahim. The
Executive Committee did not meet during 1995.
The Audit Committee recommends to the Board of Directors the auditing
firm to be selected each year as independent auditors of the Company's financial
statements and to perform services related to the completion of such audit. The
Audit Committee also has responsibility for (i) reviewing the scope and results
of the audit with the independent auditors, (ii) reviewing the Company's
financial condition and results of operations with management and the
independent auditors, (iii) considering the adequacy of the internal accounting
and control procedures of the Company, and (iv) reviewing any non-audit services
and special engagements to be performed by the independent auditors. The Audit
Committee also reviews, at least once each year, the terms of all material
transactions and arrangements between the Company and its affiliates. The
current members of the Audit Committee, none of whom is an employee of the
Company, are A. Scott Andrews (Chairman), Russell L. Ray, Jr. and Peter M.
Sontag. Mr. A. Scott Andrews is the brother of T. Coleman Andrews, III, the
Company's Chairman and Chief Executive Officer. The Audit Committee met one
time in 1995 and one time in March, 1996.
The Board has also assigned certain responsibilities relating to
employee compensation to the Compensation Committee. The principal duties of
the Compensation Committee are to review key employee compensation policies,
plans, and programs; to monitor performance and compensation of officers of the
Company and other key employees; to prepare recommendations and periodic reports
to the Board concerning such matters; and to administer the Company's management
incentive compensation plans, including its stock option plan. In 1995, the
members of the Compensation Committee, none of whom is an employee of the
Company, were Peter M. Sontag (Chairman), Russell L. Ray, Jr., and A. Scott
Andrews. The Compensation Committee met one time in 1995 and one time in March
1996.
Directors who are not also executive officers of the Company or of an
affiliate of the Company ("Non-Affiliate Directors") of the Company receive
$25,000 annually for serving on the Board of the Company, which amount is paid
quarterly in advance. Directors of the Company receive no compensation for
attendance at Board committee meetings. Non-Affiliate Directors are reimbursed
for usual and ordinary expenses of meeting attendance. The Company has adopted
the Non-Employee Directors' Stock Option Plan (the "Directors' Plan"), pursuant
to which each new Non-Affiliate Director will be offered options to purchase
10,000 shares of Common Stock upon election or appointment to the Board of
Directors of the Company. On the third anniversary of the initial award, each
such Director will be offered an option to purchase an additional 5,000 shares
of Common Stock. Options granted under the Directors' Plan become exercisable
in equal monthly installments during the 36 months following the award, as long
as the person remains a Director of the Company. The exercise price of all such
options will be the average closing price of the Common Stock during the 30
trading days immediately preceding the date of grant. Up to 250,000 shares of
Common Stock may be issued under the Directors' Plan, subject to certain
adjustments.
7
<PAGE>
On May 31, 1995, the Company granted to three Non-Affiliate Directors
30,000 options to purchase 30,000 shares of Common Stock under the World Airways
Stock Option Plan (the "1995 Plan"), all of which options expire on May 30,
2003. The Company granted to Russell L. Ray, Jr. 10,000 options, of which 7,083
became exercisable on the date of grant and the remaining 2,917 become
exercisable in seven equal monthly installments of 417 options following the
date of grant. The first 5,000 options to vest have an exercise price of $10.00
per share and the second 5,000 options to vest have an exercise price of $10.50
per share. The Company granted to Peter M. Sontag 10,000 options, of which
6,667 became exercisable on the date of grant and the remaining 3,333 become
exercisable in eight equal monthly installments of 417 options following the
date of grant. The first 5,000 options to vest have an exercise price of $11.00
per share and the second 5,000 options to vest have an exercise price of $11.55
per share. The Company granted to A. Scott Andrews 10,000 options, of which
5,000 became exercisable on the date of grant and the remaining 5,000 become
exercisable in 12 equal monthly installments of 417 options following the date
of grant. These options have an exercise price of $11.00 per share. All future
grants of options to Non-Affiliate Directors will be made under the Directors'
Plan.
8
<PAGE>
ITEM NO. 1 - ELECTION OF DIRECTORS
Class I Directors will be elected to serve until the 1999 Annual
Meeting and until their successors are duly elected and qualified. Class II
Directors serve until the Company's 1997 Annual Meeting, and Class III directors
serve until the Company's 1998 Annual Meeting. Unless directed to do otherwise,
the proxy holders intend to vote all shares for which they hold proxies for the
nominees set forth below. Although it is not contemplated that any nominee will
decline or be unable to serve, if either occurs prior to the Annual Meeting, the
Board will select a substitute nominee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE WITH AUTHORITY FOR THE PROXY HOLDERS TO
VOTE FOR THE NOMINEES NAMED BELOW OR THEIR SUBSTITUTES AS SET FORTH HEREIN.
NOMINEES FOR ELECTION AS CLASS I DIRECTORS
TERMS OF OFFICE EXPIRING AT THE 1999 ANNUAL MEETING
Past Five Years' Principal Occupation(s) and
Name and Age Other Directorships
- ------------- --------------------------------------------
Dato' Wan Malek Ibrahim, 48 Dato' Wan Malek Ibrahim has served as a
Director of the Company since February 1994.
Mr. Malek is Managing Director and a member of
the Board of Directors of Malaysian Airlines.
He is a Director of MHS and Polypulp Paper
Industries Berhad (Polypulp), an industrial
paper manufacturer. Pursuant to the
Shareholders Agreement, WorldCorp is obligated
to vote its shares to elect two directors
nominated by MHS. Mr. Malek is one of such
nominees designated by MHS.
Ahmad M. Khatib, 46 Mr. Khatib has served as Chief Operating
Officer since April, 1996. Prior to this date he
was Director and Executive Vice President--
Operations of the Company since February 1994.
Mr. Khatib served as Senior Vice President, in
different capacities, since June 1988. He joined
the Company in May 1972 as a passenger service
agent. During his more than 20 years with the
Company, he has held numerous management
positions in the areas of sales, planning and
services as well as in aircraft leasing and
related agreements, becoming Vice President of
Marketing and Customer Services in 1987.
9
<PAGE>
A. Scott Andrews, 37 Mr. Andrews has served as a Director of the
Company since June 1992. He was a founder and
has served as Managing Director of Winston
Partners, a private in vestment firm, since May
1994. He served as Chief Financial Officer of
the Company and WorldCorp from May 1992 until
May 1994. He joined WorldCorp as Treasurer in
August 1987 and was elected Vice President--
Finance and Treasurer of WorldCorp in April
1988. From August 1985 to February 1987, he was
Vice President, Finance of Presidential Airways,
a passenger airline. From September 1980 to
August 1985, he was associated with J.P. Morgan
& Co., a banking firm, most recently as
Assistant Vice President. He is the brother of
T. Coleman Andrews, III.
INCUMBENT MEMBERS OF THE BOARD OF DIRECTORS
CLASS II DIRECTORS - TERMS OF OFFICE EXPIRING AT THE 1997 ANNUAL MEETING
Past Five Years' Principal Occupation(s) and
Name and Age Other Directorships
- ------------ --------------------------------------------
Charles W. Pollard, 38 Mr. Pollard was appointed Chief Executive
Officer of the Company in March, 1996,
succeeding Mr. T. Coleman Andrews, III, who
remains the Company's Chairman of the Board. Mr.
Pollard has served as a Director of the Company
since September 1989 and as President of the
Company since June 1992. He served as General
Counsel and Secretary of WorldCorp from October
1987 until October 1990, and Vice President,
Administration and Legal Affairs of WorldCorp
from October 1990 until June 1992. From August
1983 to October 1987, he practiced law in the
corporate department of the law firm of Skadden,
Arps, Slate, Meagher & Flom, Washington, D.C.
Russell L. Ray, Jr., 60 Mr. Ray has served as a Director of the Company
since July 1993. Mr. Ray is senior advisor to
Winston Partners, a private investment firm and
also is an aviation consultant and is the U.S.
advisor to Airport Group International, a
company engaged in airport development and
management. From 1992 to 1993, Mr. Ray served as
Executive Vice President of British Aerospace,
Inc. From 1991 to 1992, Mr. Ray served as
President and Chief Executive Officer of Pan
American World Airways. From 1988 to 1991, he
served as Vice President and General Manager of
Commercial Marketing of McDonnell Douglas
Corporation and from 1985 to 1988, he served as
President and Chief Operating Officer of Pacific
Southwest Airlines.
Lim Kheng Yew, 44 Lim Kheng Yew, 44 Lim Kheng Yew has served as
a Director of the Company since February 1994.
Mr. Lim has served as Managing Director and
Chief Executive Officer of Malaysian
Helicopter Services Berhad since February 1996.
He is a Director of MHS, TRI and Polypulp.
Pursuant to the Shareholders Agreement,
WorldCorp is obligated to vote its shares to
elect two directors nominated by MHS. Mr. Lim
is one of such nominees designated by MHS.
10
<PAGE>
INCUMBENT MEMBERS OF THE BOARD OF DIRECTORS
CLASS III DIRECTORS - TERMS OF OFFICE EXPIRING AT THE 1998 ANNUAL MEETING
Name and Age Past Five Years' Principal Occupation(s) and
Other Directorships
- ------------ ------------------------------------------------
T. Coleman Andrews, III, 41 Mr. Andrews has served as Chairman of the Board
and Chief Executive Officer of the Company since
September 1986. In March, 1996, the Board
appointed Charles W. Pollard as Chief Executive
Officer of the Company. Mr. Andrews remains the
Chairman of the Board of Directors of the
Company. He is a Director, the Chief Executive
Officer and the President of WorldCorp, and has
served as a Director and as Chairman of the
Executive Committee of US Order, Inc. since
1990. US Order is a company that provides
products and services for two markets: home
banking and smart telephones. WorldCorp owns
approximately 60% of US Order. From 1978 through
1986, he was affiliated with Bain & Company,
Inc., an international strategy consulting firm.
At Bain, he was elected partner in 1982 and was
a founding general partner in 1984 of The Bain
Capital Fund, a private venture capital
partnership. Prior to his experience with Bain,
Mr. Andrews served in several appointed
positions in the White House for the Ford
Administration. He is the brother of A. Scott
Andrews.
Peter M. Sontag, 52 Mr. Sontag has served as a Director of the
Company since February 1994. Mr. Sontag
currently is Partner, Chairman and Chief
Executive Officer of Travelogue a Travel
Management Company. Mr. Sontag served as
President of OAG Travel Services, a travel
services related company and a subsidiary of
Reed Travel Group from July 1995 to March 1996.
From January 1995 to July 1995, Mr. Sontag
served as Chairman and Chief Executive Officer
of Sontag & Associates, Inc., a company
providing advice and counsel to entities
interested in worldwide travel and travel-
related growth. From 1986 to 1994, Mr. Sontag
served as Chairman and Chief Executive Officer
of USTravel, a travel company he founded in
1986.
11
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION REPORT
In 1995, the Compensation Committee of the Company was composed of three
independent, non-employee directors, Messrs. Sontag (Chairman), Andrews and Ray.
The Committee administers the Company's executive incentive plans, reviews its
compensation plans, programs, and policies, monitors the performance and
compensation of executive officers and other key employees, and makes
appropriate recommendations and reports to the Board concerning matters of
executive compensation.
Compensation Philosophy
- -----------------------
The Company's compensation philosophy is to provide total compensation at a
level necessary to attract, motivate, develop, and retain outstanding employees.
The fundamental philosophy of the Company's executive compensation program is to
relate the executive's total compensation closely to superior individual,
departmental and corporate performance, and through this performance to
shareholder value. The Company's philosophy discourages automatic annual salary
increases and favors variable incentive compensation tied to measurable results.
The Compensation Committee's executive compensation program consists of
three main components: (1) base salary; (2) the 1995 Management Incentive
Compensation Plan (the "Incentive Plan"); and (3) incentive stock options under
the Company's 1995 Stock Option Plan (the "Option Plan"), all of which are
structured to encourage the achievement of superior results over time and to
link executive officer and shareholder interests. In addition, the Company
occasionally awards bonuses for extraordinary individual performance. The
decision to award bonuses for extraordinary individual performance is made by
the Compensation Committee upon the recommendation of the Company's President.
Except for Mr. Coleman Andrews, the Compensation Committee determines the
compensation for the Named Executive Officers of the Company. Mr. Andrews, who
serves as President and Chief Executive Officer of WorldCorp and Chairman of the
Board of the Company, is compensated directly by WorldCorp. A portion of his
annual salary, however, is allocated to the Company, which amount is set forth
in the Summary Compensation Tables herein. In May, 1995, the Board of Directors
of the Company approved the Option Plan, which is described in detail herein.
Prior to the establishment of the Option Plan, certain executives of the Company
were eligible to receive awards of options to purchase common stock of WorldCorp
pursuant to the WorldCorp 1988 Amended and Restated Stock Option Plan. Mr.
Andrews' and Mr. Pollard's compensation is set forth in written employment
agreements, the terms of which are discussed in detail herein.
Components of Compensation
- --------------------------
(1) Base Salary
Base salaries for new management employees are determined initially by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for management
talent.
12
<PAGE>
Through 1994, the Company had a merit-based system for determining base
salary increases for its executive officers. Annual base salary increases would
be awarded to executives based upon the performance ratings they received in
their annual performance review. Effective 1995, the Incentive Plan discussed
below replaced entirely the system of annual merit increases for officers and
managers of the Company.
Although the Incentive Plan replaced the system of annual merit increases,
the base salaries of executives may still be adjusted from time to time if the
Compensation Committee determines (after reference to market data) that an
executive's base salary is not competitive with the marketplace, or if there is
a substantial change in the duties and responsibilities of the executive.
The full Board of Directors is responsible for setting the base salary of
the Company's President and Chief Executive Officer taking into account the
recommendations of the Compensation Committee. Mr. Pollard recuses himself from
these deliberations and decisions. The Compensation Committee is responsible
for setting the base salaries of the other named executive officers, based upon
the recommendations of the Company's President.
(2) 1995 Management Incentive Plan
The Company's Incentive Plan makes eligible for semi-annual incentive cash
bonus awards all Company employees at the management level or above who are not
covered by sales commissions, or similar agreements, or by collective bargaining
agreements. The Incentive Plan has the following major objectives: 1) focus
management attention on a limited number of measurable objectives that drive
company performance; 2) reward and encourage individual results and excellence;
3) encourage contribution to team results; and 4) encourage all managers to look
beyond individual and team performance towards the achievement of company
results. All performance objectives (individual, departmental and company) are
established in writing at the beginning of each year. The most important annual
objective is for the Company to achieve its planned net income target that was
set at the beginning of each year. The net income target is part of the
Company's annual revenue and expense plan which is approved by the Company's
Board of Directors.
Target Awards
-------------
The Incentive Plan is a quantitative matrix consisting of three critical
components. First, it sets a target award (expressed as a percentage of base
salary) for each level of management. The target award is the level of
incentive compensation to be paid when individual performance requirements are
consistently met, departmental performance requirements are consistently met,
and Company results meet the Company's internal plan objectives. The target
bonus level for the Company's President is 40% of base salary; for Vice
Presidents and Department Heads, 30% of base salary; for director level
employees, 20% of base salary and for managers, 10% of base salary.
Weighting
---------
Second, the Incentive Plan weighs individual results, departmental results
and company results differently for each level of management. Senior managers'
incentives are more heavily weighted towards department and Company performance;
other managers' incentives are more heavily weighted towards individual and
department performance. Under this approach, managers may receive awards for
strong individual or department performance even when Company results are below
plan. However, all managers nevertheless retain a significant stake in Company
results. Under the Incentive Plan, President/CEO awards are determined solely
by Company net income performance compared to the Company's annual financial
plan. Company results are based upon whether the Company meets or exceeds
certain net income targets expressed in the Company's annual internal revenue
and expense plan.
13
<PAGE>
Adjustments
-----------
Third, the Incentive Plan adjusts the award up or down based on an
appraisal of individual results, department results and Company results. These
mechanics are expressed in a simple formula. Managers are encouraged to use the
formula to learn the range of potential incentive awards for different levels of
individual, department and Company performance.
The intent of the Incentive Plan is to provide greater compensation
"upside" to high performing managers than the 4-6% increase provided in the 1994
merit pay plan. In 1995, managers did not receive annual salary adjustments
under the merit pay plan (although the merit pay plan continues to cover non-
management personnel). However, department heads have limited budget authority
to adjust a manager's salary if two conditions are met: first, the manager's
base salary is below midpoint of the applicable salary range; and second,
adjustment is required to address a substantial salary inequity.
Incentive awards were determined twice during 1995. Mr. Pollard received a
total of $45,000 for his performance in 1995 and Messrs. Khatib, Fort and Savage
received total 1995 bonuses of $45,000, $38,250 and $30,375, respectively, under
the Incentive Plan. Year-end bonuses (the second incentive award) were approved
by the Board of Directors in March, 1996. In March, 1996, the Compensation
Committee recommended and the Board approved, increasing Mr. Khatib's salary
from $165,000 to $200,000 and Mr. Fort's salary from $155,000 to $170,000.
(3) Incentive Stock Options
On May 24, 1995, the Company's stockholders approved the Option Plan that
took effect May 31, 1995. Members of the Company's Board of Directors, employees
and consultants to the Company or its affiliates are eligible to participate in
the 1995 Option Plan. The Company has reserved 1,100,000 shares of Common Stock
for issuance upon the exercise of options granted to participants under the 1995
Option Plan. As of December 31, 1995, the Company had awarded options to
purchase 1,070,083 shares of Common Stock, which are exercisable at prices
ranging from $10.00 to $11.55 per share. Of such options, 318,905 were
exercisable as of December 31, 1995.
The Option Plan is designed to help the Company attract and retain key
management level employees, and to reward the Company's employees for results
that contribute to strong earnings performance and improved share values. The
number of options granted in the case of Company executives is set by the Board
of Directors based upon a range of factors, including scope of responsibilities,
internal equity and external competitiveness. The number of stock options
granted to non-executives is determined by a formula based on annual salary and
the share price on the date of the grant.
Accelerated vesting of options is one element of the Option Plan designed
to align the interests of the Company's employees with those of the Company's
stockholders. In the case of Company executives, 20% of options granted vest on
the later of the grant date or completion of the first full year of employment,
while vesting of the balance of the options is based on performance of the
Company's stock. An additional 25% of the options vests for each 25%
improvement in the Company's share value (compounded). Vesting for participants
below the Vice President level is designed to encourage retention of employees,
and occurs in equal monthly installments over three years following the grant
date. No option is exercisable more than 10 years following the grant date.
14
<PAGE>
The Option Plan permits the grant of both incentive stock options and
nonqualified stock options. The Option Plan is administered by the Compensation
Committee, which has the authority to select individuals to participate in the
Option Plan and to determine the terms of all options awards made under the
Option Plan.
The exercise price for options awarded under the Option Plan may not be
less than 85% of the fair market value (as defined) of the Common Stock at the
time of grant, except that incentive stock options may not be less than the fair
market value of the Common Stock. Participants may pay the exercise price in
cash or shares of Common Stock already held by the participant.
Compensation of the Chairman and of the President and Chief Executive Officer
- -----------------------------------------------------------------------------
Mr. T. Coleman Andrews, III served as Chairman of the Board and Chief
Executive Officer of the Company in 1995. On March 5, 1996, Mr. Pollard was
appointed Chief Executive Officer of the Company. Mr. Andrews remains the
Company's Chairman of the Board of Directors.
MR. CHARLES W. POLLARD
- ----------------------
The Company has entered into an employment agreement with Charles W.
Pollard, dated as of January 1, 1995, providing that Mr. Pollard will serve as
Director and President of the Company until December 31, 1997, unless terminated
earlier or extended. Mr. Pollard was appointed Chief Executive Officer of the
Company in March, 1996 succeeding Mr. T. Coleman Andrews, III who remains
Chairman of the Board of Directors. Mr. Pollard is entitled to a base salary of
$225,000 per year and bonuses under the Company's Incentive Plan, the right to
participate in all bonus and incentive compensation plans or arrangements made
available to other Company officers and directors and certain other benefits,
including a $2 million life insurance policy and non-qualified retirement
benefits that guarantee a retirement income of at least $50,000 per year
commencing at age 60, subject to vesting. Mr. Pollard is entitled to receive
performance stock options in accordance with the Option Plan. The agreement
terminates upon Mr. Pollard's death. The Company may terminate the agreement
upon disability which continues for a period of 12 months, or for cause (as
defined) upon the affirmative vote of the majority of the Board of Directors.
If the Board terminates Mr. Pollard's employment without cause, Mr. Pollard is
entitled to receive the remainder of the base salary and certain other
compensation due under the agreement and all options granted to Mr. Pollard but
unexercisable under the 1995 Plan will become immediately exercisable. The
nonqualified retirement benefits also will fully vest. Mr. Pollard may terminate
the agreement upon 30 days notice under certain circumstances, including a
substantial alteration of his responsibilities, a relocation of the Company's
executive offices outside of the Washington, D.C. area or a change of control of
the Company. Under the terms of the employment agreement, a change of control
includes (i) any person, other than WorldCorp, becoming the beneficial owner of
more than 50% of the then outstanding securities of the Company or WorldCorp,
(ii) certain changes involving a majority of the Board of Directors of the
Company or WorldCorp, (iii) certain mergers or acquisitions of the Company or
WorldCorp with any other corporations and (iv) the liquidation or sale of all or
substantially all of the Company's or WorldCorp's assets. Upon such termination
by Mr. Pollard, he is entitled to receive the greater of the remainder of his
base salary or six months salary and certain other compensation due under the
agreement and all options granted but unvested under the 1995 Plan shall become
immediately exercisable. If, on December 31, 1996, Mr. Pollard and the Company
have not executed a new employment agreement, and neither party has given
written notice to the other that they intend to allow the agreement to expire at
the end of its term on December 31, 1997, then Mr. Pollard's employment
agreement will be automatically extended through June 30, 1998, with all
economic provisions extended on a pro rata basis.
15
<PAGE>
As part of his employment agreement, Mr. Pollard has agreed that he will
hold a specified minimum number of shares of Common Stock and/or WorldCorp
common stock during the term of the agreement. Mr. Pollard is
required to hold 11,750 shares of Common Stock and/or WorldCorp common stock
upon the earlier of April 1, 1995 or his exercise of 176,250 options. Mr.
Pollard is required to hold 17,625 shares of Common Stock and/or WorldCorp
common stock upon the earlier of April 1, 1996 or his exercise of 235,000
options. Mr. Pollard is required to hold 23,500 shares of Common Stock and/or
WorldCorp common stock upon the earlier of April 1, 1997 or his exercise of
293,750 options. In connection with the execution of a stock option agreement
with the Company referred to below, Mr. Pollard agreed to cancel options to
purchase 100,000 shares of WorldCorp common stock at an exercise price of $9.64
per share.
Pursuant to a stock option agreement between the Company and Mr. Pollard
dated January 1, 1995, Mr. Pollard has been awarded options to purchase up to
250,000 shares of Common Stock at an exercise price of $11.00 per share. The
options for 100,000 shares are immediately exercisable. The options for the
remaining 150,000 shares will become exercisable on September 30, 2002; however,
the exercise date will be accelerated with respect to increments of 25,000
shares if certain targets are achieved regarding the Company's stock price.
Pursuant to this provision, Mr. Pollard will be entitled to exercise options to
purchase 25,000 shares of Common Stock, at the $11.00 exercise price, each time
that the Common Stock trades at a price that is an increase of 25% over the
preceding eligibility level for 20 trading days. Thus, Mr. Pollard will first
be entitled to exercise options for 25,000 shares if the Common Stock trades at
or above $13.75 for 20 consecutive trading days. The same entitlement would
arise for five additional blocks of 25,000 options, at the exercise price of
$11.00 per share, if the Common Stock trades at or above $17.19, $21.49, $26.86,
$33.57, and $41.96, for 20 trading days each (each of these trading prices is
25% above the price of the Common Stock at the earlier tier). In the event that
Mr. Pollard is no longer employed in that capacity or other specified
capacities by the Company, options that have not become exercisable by such
time will not thereafter become exercisable. Options exercisable at such time
will remain exercisable for one year.
T. COLEMAN ANDREWS, III
- -----------------------
WorldCorp and T. Coleman Andrews, III, entered into an employment agreement
and a stock option agreement on August 19, 1994. The principal terms of the
employment agreement are as follows: (i) Mr. Andrews will receive a minimum
salary of $350,000 from WorldCorp per year beginning on the date of the executed
contract, a portion of which is allocated to the Company: (ii) the term of the
agreement expires on December 31, 1997, subject to a renewal and extension
provision described below; (iii) Mr. Andrews is eligible to receive bonuses
pursuant to WorldCorp's Management Incentive Compensation Plan; (iv) Mr. Andrews
received a grant of options to purchase 800,000 shares of WorldCorp common
stock; (v) Mr. Andrews has agreed to hold a substantial number of shares of
WorldCorp common stock; and (vi) WorldCorp will maintain a $5 million life
insurance policy, the proceeds of which, in the event of Mr. Andrews' death, is
payable to Mr. Andrews' estate.
If, as of December 31, 1996, Mr. Andrews and WorldCorp have not executed a
new employment agreement, or neither party has given written notice to the other
that they intend to allow this agreement to expire at the end of its term on
December 31, 1997, then and in that event Mr. Andrews' employment agreement will
be automatically extended through June 30, 1998, with all economic provisions
extended on a pro rata basis.
16
<PAGE>
Mr. Andrews may terminate his employment in the event (i) WorldCorp
relocates its headquarters outside of the Washington, D.C. area, (ii) his duties
are diminished in a manner materially altering his responsibilities, (iii) the
board of directors of WorldCorp determines that WorldCorp should be liquidated
or dissolved during the term of the employment agreement or (iv) there is a
change in control of WorldCorp. Under the terms of the employment agreement, a
change in control includes (i) any person, other than WorldCorp, becoming the
beneficial owner of more than 50% of the then outstanding securities of
WorldCorp, (ii) certain changes involving a majority of the Board of
Directors of WorldCorp, (iii) certain mergers or acquisitions of WorldCorp with
any other corporations and (iv) the liquidation or sale of substantially all of
WorldCorp's assets. In the event Mr. Andrews exercises this termination right,
or, in the event WorldCorp terminates Mr. Andrews' employment with the Company
other than for cause (as defined in the employment agreement), WorldCorp is
obligated to pay Mr. Andrews the undiscounted remainder of his base salary then
in effect, any deferred salary and/or bonus compensation payable, and all
granted but unexercisable stock options under Mr. Andrews' stock option
agreement shall become immediately exercisable for a period of one year
following the date of termination. WorldCorp may terminate the agreement for
cause or if Mr. Andrews becomes disabled for a period of 12 months.
Mr. Andrews serves as Director, President and Chief Executive Officer of
WorldCorp and also as Chairman of the Board of the Company. He also served as
the Company's Chief Executive Officer in 1995. Although WorldCorp compensates
Mr. Andrews directly, a portion of his annual salary is allocated to the
Company. For fiscal year 1995 the Company was allocated $200,000 of Mr. Andrews'
annual salary by WorldCorp pursuant to a services agreement between WorldCorp
and the Company. Pursuant to the terms of the WorldCorp Management Incentive
Compensation Plan, the WorldCorp Compensation Committee recommended, and the
full WorldCorp Board approved, the award of a $225,000 incentive bonus to Mr.
Andrews for his achievements in 1995. The bonus was paid to Mr. Andrews in
March, 1996.
The Compensation Committee
--------------------------
Peter M. Sontag (Chairman)
A. Scott Andrews
Russell L. Ray, Jr.
17
<PAGE>
STOCK PERFORMANCE GRAPH*
The Company conducted an initial public offering on October 5, 1995.
The following graph and chart compare the performance of the Common Stock since
such date to the Russell 2000 Index, the Dow Jones Airlines Index, and the Dow
Jones Air Freight/Couriers Index. Both the graph and the chart assume that the
value of the investment in the Company's common stock and each index was $100 at
October 5, 1995, and that all dividends were reinvested.
[PERFORMANCE CHART APPEARS HERE]
- ---------------------------
* The Dow Jones Airlines Index and Dow Jones Air Freight/Couriers Index
(collectively, the "Dow Jones Indices") have been used as industry peer group
indices because the Company has a limited number of competitors and because such
peer group data is unavailable from the primary competitors of the Company with
respect to its air transportation services business (these competitors,
consisting of other chartered airline services, being either foreign-owned or
only recently publicly traded). Although the Company has used the Dow Jones
Indices as peer group indices, differences between the companies which comprise
these indices and the Company reduce the comparability of stock price
performance and other performance indicators. The Dow Jones Airlines Index
consists of the major, scheduled, domestic airline carriers whereas World
Airways is a smaller airline carrier with limited scheduled service. The Dow
Jones Air Freight/Couriers Index consists of large freight/courier companies
such as Federal Express which have freight and courier operations significantly
larger than World Airways' cargo operations.
<PAGE>
PERFORMANCE GRAPH INDEX
DEC. 1989 TO DEC. 1995
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
5-Oct-95 Oct-95 Nov-95 Dec-95
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
World Airways Inc./1/ $100 $ 96 $ 89 $ 90
- -------------------------------------------------------------------------------
Russell 2000/2/ $100 $ 96 $100 $102
- -------------------------------------------------------------------------------
Dow Jones Airlines Index $100 $ 94 $111 $104
- -------------------------------------------------------------------------------
Dow Jones Air Freight/
Couriers Index $100 $100 $ 97 $ 97
- -------------------------------------------------------------------------------
</TABLE>
/1)/ The fiscal year of World Airways Inc. ends on December 31. The total
return of World Airways Inc. is based upon the company's initial public
offering price of $12.50.
/2)/ Note: The total return for the Russell 2000 commences September 30, 1995.
19
<PAGE>
EXECUTIVE COMPENSATION
T. Coleman Andrews, III, who serves as President and Chief Executive
Officer of WorldCorp and Chairman of the Board of the Company, is compensated
directly by WorldCorp. A portion of his annual salary, however, is allocated to
the Company, which amount is set forth in the Summary Compensation Table below.
In May 1995, the Board of Directors of the Company approved the Option Plan,
which is described in detail below. Prior to the establishment of the Option
Plan, executives of the Company were eligible to receive awards of options to
purchase common stock of WorldCorp pursuant to the WorldCorp 1988 Amended and
Restated Stock Option Plan.
The following table sets forth information concerning the compensation
received for services rendered to the Company during the years ended December
31, 1993, 1994 and 1995 by the Chief Executive Officer of the Company and the
four other most highly compensated executive officers who received at least
$100,000 in compensation in 1995 (the Named Executive Officers).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
--------------------------------------
Awards
-------------
Securities
Underlying All Other
Options/ Compen
Name and Principal Year Salary Bonus SARs/1/ sation/2/
Position ($) ($) (#) ($)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
T. Coleman Andrews, III/3/ 1995 200,000 70,000 --- 11,015/5/
Chairman of the Board 1994 200,000 --- ---/4/ 13,037
1993 174,991 --- --- 13,201
Charles W. Pollard 1995 230,365 45,000/6/ 250,000/7/ 10,124/8/
President and 1994 176,539 --- --- 12,895
Chief Executive Officer 1993 172,316 --- --- 13,579
Ahmad M. Khatib 1995 165,000 45,000/9/ 150,000/10/ 33,349/11/
Chief Operating Officer 1994 165,000 50,000 --- 6,885
1993 125,000 --- --- 5,567
Vance Fort 1995 154,992 38,250/12/ 125,000/13/ 3,383/14/
Executive Vice President 1994 143,175 --- --- 5,803
1993 127,020 --- --- 2,904
Michael E. Savage 1995 135,000 30,375/15/ 120,000/16/ 2,315/17/
Vice President and 1994 67,500 50,000/18/ --- 145
Chief Financial Officer 1993 --- --- --- ---
</TABLE>
20
<PAGE>
____________________
Footnotes
/1/ In May 1995, the Board of Directors of the Company approved the Option
Plan. The option grants made pursuant to the Option Plan are set forth
below for Messrs. Pollard, Khatib, Fort and Savage. Prior to the
establishment of the Option Plan certain executives of the Company were
eligible to receive awards of options to purchase common stock of WorldCorp
pursuant to the WorldCorp 1988 Amended and Restated Stock Option Plan. All
awards in this table for Mr. Andrews include options to acquire common
stock of WorldCorp.
/2/ Amount consists of the value of WorldCorp contributions to WorldCorp's
Employee Savings and Stock Ownership Plan ("ESSOP"), which contributions
are made by WorldCorp in shares of WorldCorp common stock and are valued
using closing prices for the year in which the contributions are made, and
the group term life insurance paid on behalf of the employee by the
Company.
/3/ Mr. Andrews, who serves as President and Chief Executive Officer of
WorldCorp and Chairman of the Board of the Company, is compensated directly
by WorldCorp. Mr. Andrews also served as the Company's Chief Executive
Officer in 1995. The figures in the table reflect only that portion of Mr.
Andrews' annual salary and bonuses for 1993-1995 that have been allocated
to the Company.
/4/ Mr. Andrews was granted options to purchase 800,000 shares of WorldCorp
common stock pursuant to the terms of his WorldCorp employment agreement
dated August 19, 1994.
/5/ Consists of $612 in group term life insurance paid on behalf of Mr. Andrews
and $10,403 in WorldCorp contributions to Mr. Andrews' ESSOP account.
/6/ Under the Incentive Plan, President/CEO awards are determined solely by
Company net income performance compared to the Company's annual financial
plan. Consists of a mid-year bonus of $36,000 and a year-end bonus of
$9,000 awarded to Mr. Pollard under the Company's Incentive Plan for his
performance in 1995.
/7/ Consists of options to purchase 250,000 shares of Common Stock granted to
Mr. Pollard under the Option Plan.
/8/ Consists of $884 in group term life insurance paid on behalf of Mr. Pollard
and $9,240 in WorldCorp contributions to Mr. Pollard's ESSOP account.
/9/ Consists of a mid-year bonus of $29,700 and a year-end bonus of $15,300
awarded to Mr. Khatib under the Company's Incentive Plan for his
performance in 1995.
/10/ Consists of options to purchase 150,000 shares of Common Stock granted to
Mr. Khatib under the Option Plan.
/11/ Consists of (i) $30,319 paid to Mr. Khatib as an international service
allowance; (ii) $974 in group term life insurance paid on behalf of Mr.
Khatib; and (iii) $2,056 in WorldCorp contributions to Mr. Khatib's ESSOP
account.
/12/ Consists of a mid-year bonus of $18,599 and a year-end bonus of $19,651
awarded to Mr. Fort under the Company's Incentive Plan for his performance
in 1995.
/13/ Consists of options to purchase 125,000 shares of Common Stock granted to
Mr. Fort under the Option Plan.
/14/ Consists of $1,254 in group term life insurance paid on behalf of Mr. Fort
and $2,129 in WorldCorp contributions to Mr. Fort's ESSOP account.
21
<PAGE>
/15/ Consists of a mid-year bonus of $16,200 and a year-end bonus of $14,175
awarded to Mr. Savage under the Incentive Plan for Mr. Savage's
performance in 1995.
/16/ Consists of options to purchase 120,000 shares of Common Stock
under the Option Plan.
/17/ Consists of $290 in group term life insurance paid on Mr. Savage's
behalf and $2,025 in WorldCorp contributions to Mr. Savage's ESSOP
account.
/18/ Represents incentive compensation to which Mr. Savage was entitled under
the employment offer extended to him to commence employment at the
Company in June 1994.
The following table lists option grants to the Company's Named Executive
Officers in 1995. In addition, in accordance with the rules of the Commission,
the tables also set forth hypothetical gains that would exist for the respective
options based on assumed rates of annual compounded growth in the stock price of
0%, 5% and 10% from the date the options were granted over the full option term.
WorldCorp did not grant any stock options in 1995.
COMPANY OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
for Options Terms
PERCENT OF -------------------------
TOTAL
NUMBER OF OPTIONS/SARS
SECURITIES GRANTED TO
UNDERLYING COMPANY EXERCISE
NAME OPTION/SARS EMPLOYEES IN PRICE EXPIRATION
- ------ GRANTED(#) FISCAL YEAR ($) DATE 0% 5% 10%
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
T. Coleman Andrews, III --- --- --- --- --- --- ---
Charles W. Pollard 250,000 23.4% $11.00 12/31/2004 $0 $1,729,460 $4,382,792
Ahmad M. Khatib 150,000 14.0 11.00 05/30/2003 0 787,801 1,886,922
Vance Fort 125,000 11.7 11.00 05/30/2003 0 656,501 1,572,435
Michael E. Savage 120,000 11.2 11.00 05/30/2003 0 630,241 1,509,537
- --------------------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
The following table sets forth the number of shares covered by both
exercisable and unexercisable stock options. Also reported are the values for
"in-the-money" options.
AGGREGATED OPTION EXERCISES IN 1995
AND YEAR-END OPTION VALUES
WITH RESPECT TO COMPANY COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT DECEMBER 31, 1995(#) DECEMBER 31, 1995($)(1)
SHARES ACQUIRED VALUE
ON EXERCISE REALIZED
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
T. Coleman Andrews, III --- --- --- --- --- ---
Charles W. Pollard --- --- 100,000 150,000 25,000 37,500
Ahmad M. Khatib --- --- 30,000 120,000 7,500 30,000
Vance Fort --- --- 43,750 81,250 10,937 20,312
Michael E. Savage --- --- 40,000 80,000 10,000 20,000
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ Calculated as of December 29, 1995 using the Nasdaq National Market
closing price on such date of $11.25 per share.
23
<PAGE>
AGGREGATED OPTION EXERCISES IN 1995
AND YEAR-END OPTION VALUES
WITH RESPECT TO WORLDCORP STOCK
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT FY-END
SHARES FY-END (#) ($)/1/
ACQUIRED VALUE
ON REALIZED (EXERCISABLE/ (EXERCISABLE/
NAMES EXERCISE $ UNEXERCISABLE) UNEXERCISABLE)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
T. Coleman Andrews, III 65,000 528,400 535,000/200,000 2,942,500/1,100,000
Charles W. Pollard/2/ 80,000 526,000 150,000/0 672,500/0
Ahmad M. Khatib 0 0 214,400/0 938,000/0
Vance Fort 25,000 127,500 0/0 0/0
Michael E. Savage 0 0 0/0 0/0
- -----------------------------------------------------------------------------------------
</TABLE>
/1/ The calculations in this table are based upon a December 29, 1995 closing
price of $10.00 per share of WorldCorp common stock on the New York Stock
Exchange.
/2/ Mr. Pollard was granted (i) warrants to purchase 130,000 shares of
WorldCorp common stock in 1989 and (ii) options to purchase 200,000 shares
of WorldCorp common stock between 1988 and 1992. At year end 1995, warrants
to purchase 130,000 shares of WorldCorp common stock and options to purchase
20,000 shares of WorldCorp common stock were exercisable. In connection with
Mr. Pollard's employment agreement with the Company, dated as of January 1,
1995, the parties agreed that 100,000 of Mr. Pollard's 200,000 options, with
an exercise price of $9.64 per share, would be canceled upon the grant to
Mr. Pollard pursuant to the Option Plan of options to purchase 250,000 share
of WorldCorp common stock.
24
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CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
Employment Agreements
- ---------------------
The Company has entered into an employment agreement with Mr. Pollard.
Additionally, WorldCorp has entered into an employment agreement with Mr.
T. Coleman Andrews, III. The terms and conditions of each agreement are more
fully discussed under "Executive Compensation -- Compensation Report."
Named Executive Officers
- ------------------------
In March, 1996, the Board of Directors authorized Mr. Pollard to work with
the Compensation Committee's Chairman to develop employment agreements for
officers who report directly to Mr. Pollard. The agreements are to contain terms
substantially consistent with Mr. Pollard's own employment agreement. The final
employment agreements are subject to the approval of the Board of Directors.
WorldCorp Stock Options - Change in Control Provisions
- ------------------------------------------------------
WorldCorp has issued stock options to certain of the Company's Named
Executive Officers. Certain of the options issued to executive officers under
the Company's 1988 Stock Option Plan prior to May 13, 1992, provided that upon
a Change of Control (as defined) the executive officer's option shall become
immediately exercisable as of the date of the Change of Control for up to
double the number of shares of Common Stock for which the option is otherwise
exercisable as of the date of the Change of Control (not to exceed the total
number of Option Shares, as defined). Other options issued to executive
officers under the 1988 Stock Option Plan prior to May 13, 1992, provided that
in the event of termination of the executive officer's employment by the
Company without Cause (as defined) or by the executive officer for Good Reason
(as defined) within two years after a Change of Control (as defined) the
executive officer's stock options shall become fully vested and exercisable.
In 1992, WorldCorp amended and restated its 1988 Stock Option Plan.
WorldCorp's stockholders approved the amended and restated 1988 Stock Option
Plan on May 13, 1992. Options issued to executive officers under the 1988
WorldCorp Stock Option Plan as amended and restated provide that in the event
of termination of the executive officer's employment by the Company without
Cause (as defined) or by the executive officer for Good Reason (as defined)
within two years after a Change of Control (as defined) the executive
officer's stock options shall become fully vested and exercisable.
25
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CERTAIN TRANSACTIONS
The Company operated as a wholly owned subsidiary of WorldCorp from June
1987 until February 1994 and has operated since February 1994 as a majority
owned subsidiary of WorldCorp. The Company completed an initial public offering
of its Common Stock in October, 1995. Approximately 24% of the Company's
outstanding Common Stock is owned by public investors. WorldCorp owns 59.3% of
the Company's outstanding Common Stock. The remaining 16.6% is owned by MHS
Berhad, a Malaysian aviation company. Mr. T. Coleman Andrews, III, the Chairman
of the Board of the Company, serves as President, Chief Executive Officer and a
Director of WorldCorp.
WorldCorp and the Company historically have utilized a single corporate
staff for administrative services, thus permitting the Company to utilize
WorldCorp management personnel as needed. Effective January 1, 1995,
substantially all of WorldCorp's management personnel became employees of the
Company and since such date, the Company has provided certain administrative
services to WorldCorp. WorldCorp and the Company have entered into a services
agreement pursuant to which the Company and WorldCorp will continue to
provide services to each other at negotiated rates, which the Company
believes are comparable to those that could be obtained on an arms-length
basis. In June 1995, the Company borrowed $1.8 million from WorldCorp
pursuant to a demand promissory note with an interest rate of 13.875%. In
July 1995, this note was repaid to WorldCorp.
WorldCorp is subject to an indenture that may have the effect of
preventing the Company from incurring additional debt. Under this indenture, the
Company is restricted from incurring any debt unless, after giving effect to
such new debt, (i) the ratio of senior debt to subordinated debt of WorldCorp
and certain subsidiaries does not exceed 1.0 and the aggregate principal amount
of such outstanding senior debt does not exceed $75 million, (ii) the ratio of
total debt to total capitalization of WorldCorp and certain subsidiaries is less
than 66 2/3% or (iii) the pro forma fixed charge coverage ratio of WorldCorp and
certain subsidiaries for the period consisting of the four fiscal quarters
immediately preceding such debt incurrence is greater than 1.5 (as such terms
are defined in such indenture). Additionally, this and another WorldCorp
indenture could, under certain circumstances, restrict the Company's ability to
pay dividends to all shareholders. Under an indenture terminating in 2004,
WorldCorp has agreed to cause the Company not to pay dividends upon the
occurrence of any events of default by WorldCorp under such indenture. Further,
under the indenture terminating in 1997, WorldCorp has agreed to cause the
companies not to pay dividends unless WorldCorp has a positive adjusted net
worth (as defined therein). As of March 11, 1996, WorldCorp's adjusted net worth
was negative and under the indenture terminating in 1997 WorldCorp is,
therefore, obligated to cause World Airways not to pay dividends.
Pursuant to the MHS Stock Purchase Agreement, the Company and WorldCorp
sold 24.9% of the outstanding shares of Common Stock to MHS for $27.4 million
(or $11.00 per share) in February 1994. In August 1994, MHS acquired 32% of the
Common Stock, and assumed management control, of Malaysian Airlines, one of the
Company's largest customers. Effective December 31, 1994, WorldCorp agreed to
pay MHS $8.5 million pursuant to a promissory note due December 31, 1995 which
is secured by approximately 500,000 shares of Common Stock owned by WorldCorp
(or $17.00 per share) in exchange for (i) 5% of the outstanding shares of Common
Stock which was held by MHS, and (ii) the execution of a series of multi-year
contracts between the Company and Malaysian Airlines. WorldCorp repaid the $8.5
million note in full on December 31, 1995. Of the $8.5 million consideration
paid by WorldCorp to MHS, $3.0 million is attributable to certain contract
enhancements received by the Company as a result of such multi-year contracts
with Malaysian Airlines. Such $3.0 million amount is included in the Company's
balance sheets in Other Assets and Deferred Charges and in Contributed Capital.
In connection with the MHS Stock Purchase Agreement, the Company and MHS
executed a stock registration rights agreement, dated October 30, 1993 (the
"Stock Registration Rights Agreement") and the Company, MHS and WorldCorp
executed a Shareholders Agreement (the "Shareholders Agreement"). Under the
Stock Registration Rights Agreement, if at any time after October 30, 1996, the
Company registers its Common Stock
26
<PAGE>
under the Securities Act, MHS has the right to demand the registration of its
shares of Common Stock. Under the Shareholders Agreement, MHS agreed not to
transfer, sell or pledge any of its shares of Common Stock prior to February 28,
1997 without the prior written consent of WorldCorp. Also, if without the prior
written consent of MHS: (1) the Company sells all or substantially all of its
business; or (2) the Company fundamentally changes its line of business, then
MHS has the option to (a) sell or transfer all or a portion of its shares to a
third party prior to February 28, 1997; and/or (b) require WorldCorp to purchase
all or part of MHS' shares at fair market value. Fair market value is defined to
be not less than the aggregate of the costs borne by MHS in acquiring and
holding its shares of Common Stock. The Shareholders Agreement also provides
that if WorldCorp's ownership interest in the Company falls below 51% of the
outstanding shares of Common Stock, then MHS may either sell its shares to a
third party or require WorldCorp to sell a pro rata number of shares held by MHS
to the party purchasing WorldCorp's shares. The Shareholders Agreement also
grants MHS a right of first refusal to purchase shares of Common Stock issued by
the Company or sold by WorldCorp and to purchase additional shares of Common
Stock to maintain its ownership percentage in the Company which rights were
waived by MHS in connection with the Company's initial public offering. In
addition, the Shareholders Agreement provides that (i) WorldCorp will vote its
shares of Common Stock to elect the number of directors nominated by MHS that
represent MHS' proportionate interest in the Company (not less than two
directors), (ii) the Company will declare and distribute all dividends properly
payable, subject to the requirements of law and general overall financial
prudence, and (iii) the Board of Directors will hold Board meetings only if a
director nominated by MHS is present and will not approve a sale of
substantially all of the business of the Company, transactions not in the
ordinary course of the air transportation business in excess of $500,000, the
winding up of the business, the appointment of outside auditors, or the
appointment of committees of the Board of Directors or the delegation of
authority to such committees, without the consent of MHS, or the directors
nominated by MHS. WorldCorp-nominated directors must abstain from voting on
certain transactions in which WorldCorp or its affiliates have a beneficial
interest. One of the Company's directors, Dato' Wan Malek Ibrahim, serves as
Managing Director of Malaysian Airlines and is a director of MHS. Another
director, Lim Kheng Yew, serves as Managing Director and CEO of MHS. The
Shareholders Agreement terminates if either WorldCorp's or MHS' ownership
interest falls below 5% of the outstanding capital stock of the Company.
The Company presently has two multi-year basic contracts with Malaysian
Airlines. The first agreement with Malaysian Airlines is to provide freighter
and passenger aircraft. The Company has an additional significant contract with
Malaysian Airlines under which it flies Malaysian Muslim pilgrims to Saudi
Arabia for the annual Hadj religious pilgrimage. During 1995, the Company
generated revenues of $100.9 million from Malaysian Airlines under these
agreements. The Company leases four DC10-30 aircraft from Malaysian Airlines
under leases that expire in August 1997, December 1998 and two leases that
expire in March 1999. The Company paid rent, maintenance reserves and operating
deposits for two of these aircraft in 1995.
27
<PAGE>
ITEM NO. 2 -- RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP served as independent certified public
accountants for the Company in 1994 and is expected to be represented at the
Annual Meeting. A representative of KPMG Peat Marwick LLP will have an
opportunity to make a statement if the representative so desires and will be
available to respond to appropriate questions.
As of this date, the Board of Directors desires to have KPMG Peat Marwick
LLP continue as accountants for the Company for the year ending December 31,
1996. Accordingly, the Company is presenting a resolution to the meeting to
ratify the appointment by the Board of Directors. If the stockholders do not
approve the proposal, the Board of Directors will reconsider its action with
respect to the appointment of accountants. Approval of the resolution, however,
will in no way limit the Board's authority to terminate or otherwise change the
engagement of KPMG Peat Marwick LLP during the year ending December 31, 1996.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1997 Annual Meeting
of Stockholders must be received by the Company's Secretary no later than
December 1, 1996, to be included in the Company's 1997 proxy materials.
Proposals intended for inclusion in next year's proxy statement should be
sent to the Secretary of the Company at World Airways, Inc., The Hallmark
Building, 13873 Park Center Road, Herndon, Virginia 22071.
OTHER MATTERS TO COME BEFORE THE MEETING
In addition to the matters described above, there will be an address by
the Chief Executive Officer and a general discussion period during which
stockholders will have an opportunity to ask questions about the business.
The Company does not intend to bring any other matter before the meeting
and does not know of any other matter which is proposed to be brought before the
meeting. However, should any other matter properly come before the meeting, the
persons named in the enclosed proxy will have discretionary authority to vote
all proxies in accordance with their judgment on such matter.
ANNUAL REPORT
A copy of the Annual Report is being mailed to each stockholder entitled
to vote at the Annual Meeting of Stockholders. A copy of the Company's Form 10-K
is available at no charge to all stockholders. For a copy write to: Michael E.
Savage, Vice President and Chief Financial Officer, World Airways, Inc., The
Hallmark Building, 13873 Park Center Road, Herndon, Virginia 22071.
28
<PAGE>
OTHER INFORMATION
This solicitation of proxies is made by the Board of Directors, and the
Company will bear the costs of solicitation. In addition to solicitation by
mail, proxies may also be solicited by directors, officers, and employees of the
Company, who will not receive additional compensation for such solicitation.
Brokerage firms and other custodians, nominees and fiduciaries will be
reimbursed by the Company for their reasonable expenses incurred in sending
proxy material to beneficial owners of the Common Stock. The address of World
Airways' principal executive offices is The Hallmark Building, 13873 Park Center
Road, Herndon, Virginia 22071, and its telephone number is (703) 834-9200. The
above notice and proxy statement are sent by order of the Board of Directors.
Dated: April 18, 1996
By Order of the Board of Directors,
VANCE FORT
Executive Vice President
29
<PAGE>
- --------------------------------------------------------------------------------
DETACH HERE
WORLD AIRWAYS, INC.
THIS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 22, 1996
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned hereby appoints CHARLES W. POLLARD, T. COLEMAN ANDREWS,
O III, and VANCE PORT, and each of them, the proxy or proxies of the
X undersigned, with full power of substitution, to vote all shares of Common
Y Stock, par value $.001 per share, of World Airways, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held at the Company's headquarters in
Herdon, Virginia on May 22, 1996, at 9:30 A.M., and at any adjournments or
postponements thereof, with the same force and effect as the undersigned
might or could do if personally present thereat.
UNLESS A CONTRARY INSTRUCTION IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF DIRECTORS AS DESCRIBED IN THE ACCOMPANYING PROXY
STATEMENT AND IN FAVOR OF THE PROPOSAL TO RATIFY THE SELECTION OF THE
INDEPENDENT PUBLIC ACCOUNTANTS FOR 1996. THIS PROXY WILL ALSO BE VOTED AT THE
DISCRETION OF THE PROXY HOLDERS ON SUCH MATTERS OTHER THAN THE TWO SPECIFIC
ITEMS AS MAY COME BEFORE THE MEETING.
A majority of such proxies or their substitutes as shall be present and
acting at the meeting, or if only one be present and acting then that one,
shall have and may exercise all of the powers of all of said proxies
hereunder.
PLEASE MARK, DATE AND SIGN ON THE REVERSE SIDE ---------------
AND RETURN PROMPTLY SEE REVERSE
SIDE
---------------
<PAGE>
DETACH HERE
[X] Please mark
votes as in
this example.
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR" authority in Item 1 and "FOR" Item 2.
1. AUTHORITY TO VOTE FOR THE FOLLOWING NOMINEES AS DESCRIBED IN THE ACCOMPANYING
PROXY STATEMENT:
NOMINEES: Dato Wan Malek Ibrahim, Ahmad M. Khatib, A. Scott Andrews
FOR WITHHELD
[ ] [ ]
- ---------------------------------------
(INSTRUCTION: To withhold authority to
vote for one individual nominee, write
such name in the space provided above)
2. PROPOSAL TO RATIFY THE SELECTION OF FOR AGAINST ABSTAIN
KPMG PEAT MARWICK LLP as independent [ ] [ ] [ ]
public accountants for the Company
for the fiscal year ending December 31,
1996.
MARK HERE
FOR ADDRESS [ ]
CHANGE AND
NOTE AT LEFT
PLEASE MARK DATE, SIGN AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized person. If a
partnership, please sign in full partnership name by authorized person.
