Exhibit 4.1
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 the 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.
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. "EligiblePilots" 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
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/ Xxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
------------------ --------------------
Xxxxx X. Xxxxx, Director Xxxxxxx X. Xxxxx, Chairman
Labor Relations TWA MEC Negotiating Committee
/s/ Xxxxxx X. Xxxxxxxx /s/ X. X. Chronic
---------------------- -----------------
Xxxxxx X. Xxxxxxxx X. X. Chronic, Chairman
Vice President TWA MEC
Labor Relations
/s/ J. Xxxxxxxx Xxxxxxx
-----------------------
J. Xxxxxxxx Xxxxxxx,
President
Dated: September 1, 1998
