Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant |X| Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| 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 Section 240.14a-11(c) or Section 240.14a-12
TRANS WORLD CORPORATION
(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| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
TRANS WORLD CORPORATION
April 17, 2006
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Trans World Corporation. The meeting will be held in the 12th floor
Conference Room of the Walker Building located at 734 15th Street N.W.,
Washington, DC 20005 on Wednesday, May 17, 2006 at 10:00 a.m., Eastern Daylight
Time. The matters to be considered by stockholders at the Annual Meeting are
described in the accompanying materials.
The Board of Directors of the Company has determined that the matters
to be considered at the Annual Meeting are in the best interests of the Company
and its stockholders. FOR THE REASONS SET FORTH IN THE ATTACHED PROXY STATEMENT,
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE BOARD'S NOMINEES FOR
DIRECTOR AND "FOR" EACH MATTER TO BE CONSIDERED. Directors and officers of the
Company will be present at the Annual Meeting to respond to any questions that
stockholders may have.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of, and interest in, Trans World Corporation are
greatly appreciated.
Sincerely,
/s/ Rami S. Ramadan
- --------------------
Rami S. Ramadan
President, Chief Executive Officer and
Chief Financial Officer
- --------------------------------------------------------------------------------
545 FIFTH AVENUE, SUITE 940, NEW YORK, NEW YORK 10017
TEL: 212.983.3355 FAX: 212.983.8129
TRANS WORLD CORPORATION
545 FIFTH AVENUE, SUITE 940
NEW YORK, NEW YORK 10017
(212) 983-3355
-------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2006
---------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of Trans World Corporation ("TWC" or the "Company") will be held in
the 12th floor Conference Room of the Walker Building located at 734 15th Street
N.W., Washington, D. C. 20005 on May 17, 2006 at 10:00 a.m., Eastern Daylight
Time. At the meeting, the holders of the Company's common stock, par value .001
per share ("Common Stock") will act on the following matters, all of which are
more completely set forth in the accompanying Proxy Statement:
(1) To elect five (5) directors for a one-year term or until their
successors are elected and qualified;
(2) To amend the 2004 Equity Incentive Plan;
(3) To ratify the appointment by the Board of Directors of Rothstein,
Kass & Company, P.C. as the Company's independent, registered
public accountants for the fiscal year ending December 31, 2006;
and,
(4) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof. Except with
respect to the procedural matters incident to the conduct of the
Annual Meeting, management is not aware of any other such
business.
The Board of Directors has fixed April 12, 2006 as the voting record
date for the determination of the holders of the Company's Common Stock,
entitled to notice of and to vote at the Annual Meeting. Only those stockholders
of record as of the close of business on that date will be entitled to vote at
the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Rami S. Ramadan
- --------------------
Rami S. Ramadan
President, Chief Executive Officer and
Chief Financial Officer
April 17, 2006
New York, New York
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. EACH
STOCKHOLDER AND GUEST ATTENDING THE ANNUAL MEETING MAY BE REQUIRED TO PRESENT
VALID PICTURE IDENTIFICATION FOR ADMISSION. CAMERAS, RECORDING DEVICES AND OTHER
ELECTRONIC DEVICES WILL NOT BE PERMITTED AT THE ANNUAL MEETING.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE
NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED. IF
YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY
GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE
EXERCISE THEREOF.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Notice of Annual Meeting of Stockholders...................................................Front
General........................................................................................1
Voting.........................................................................................1
Corporate Governance Principles................................................................2
Board Purpose and Responsibilities...............................................2
Governance Guidelines............................................................3
Ethical Standards................................................................3
Communications with the Board of Directors.......................................4
Information with Respect to Nominees for Director..............................................4
Election of Directors.................................................................4
Nominees..............................................................................5
Board of Directors Meetings and Committees of the Board...............................5
Compensation of Directors.............................................................6
Report of the Audit Committee.........................................................7
Beneficial Ownership of Common Stock by Certain Beneficial Owners and Management...............7
Equity Compensation Plan Information..................................................9
Section 16(a) Beneficial Ownership Reporting Compliance...............................9
Management Compensation.......................................................................10
Summary Compensation Table...........................................................10
Option Grants/Exercises and Values for Fiscal 2005...................................11
Employment Agreement.................................................................12
Certain Transactions..........................................................................13
Proposal to Amend the 2004 Equity Incentive Plan..............................................13
Ratification of Appointment of Independent Registered Public Accountants......................15
Stockholder Proposals.........................................................................16
Annual Reports................................................................................16
Other Matters.................................................................................17
TRANS WORLD CORPORATION
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2006
GENERAL
This Proxy Statement is furnished to holders of common stock, par value
$.001 per share ("Common Stock"), of Trans World Corporation, a Nevada
corporation ("TWC" or the "Company"). Proxies are being solicited on behalf of
the Board of Directors of the Company to be used at the Annual Meeting of
Stockholders ("Annual Meeting") to be held in the 12th floor Conference Room of
the Walker Building located at 734 15th Street N.W., Washington, D. C. 20005 on
May 17, 2006 at 10:00 a.m., Eastern Daylight Time or at any adjournment or
postponement thereof, for the purposes set forth in the Notice of Annual Meeting
of Stockholders. This Proxy Statement is first being mailed to stockholders on
or about April 17, 2006.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, each
proxy received will be voted (i) FOR the nominees for director described herein;
(ii) FOR the amendments to the 2004 Equity Incentive Plan (the "2004 Equity
Plan"); (iii) FOR ratification of the appointment of Rothstein, Kass & Company,
P.C., as the Company's independent registered public accountants for fiscal
2006; and (iv) upon the transaction of such other business as may properly come
before the meeting, in accordance with the best judgment of the proxy holder.
Any holder of shares of the Company's Common Stock who returns a signed proxy
but fails to provide instructions as to the manner in which such shares are to
be voted will be deemed to have voted in favor of the matters set forth in the
preceding sentence. ANY STOCKHOLDER GIVING A PROXY HAS THE POWER TO REVOKE IT AT
ANY TIME BEFORE IT IS EXERCISED BY (I) FILING WITH THE SECRETARY OF THE COMPANY
WRITTEN NOTICE THEREOF (SECRETARY, TRANS WORLD CORPORATION, 545 FIFTH AVENUE,
SUITE 940, NEW YORK, NEW YORK 10017); (II) SUBMITTING A DULY-EXECUTED PROXY
BEARING A LATER DATE; OR (III) APPEARING AT THE ANNUAL MEETING AND GIVING THE
SECRETARY NOTICE OF HIS OR HER INTENTION TO VOTE IN PERSON. Proxies solicited
hereby may be exercised only at the Annual Meeting and any adjournment or
postponement thereof and will not be used for any other meeting.
VOTING
Only holders of record of the Common Stock at the close of business on
April 12, 2006 ("Voting Record Date") will be entitled to vote at the Annual
Meeting. On the Voting Record Date, there were 7,840,869 shares of Common Stock
outstanding and the Company had no other class of equity securities outstanding.
The presence at the Annual Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding Common Stock of the Company entitled to
vote on the matters presented will constitute a quorum for the transaction of
business at the Annual Meeting. Thus, the presence of the holders of Common
Stock representing at least 3,920,436 votes will be required to establish a
quorum. The withdrawal of any stockholder after the Annual Meeting has
commenced, shall have no effect on the existence of a quorum. Each share of
Common Stock is entitled to one vote at the Annual Meeting on all matters
properly presented at the meeting. Directors are elected by a plurality of the
votes cast with a quorum present. The five persons who receive the greatest
number of votes of the holders of shares of Common Stock entitled to vote at the
Annual Meeting will be elected directors of the Company. Abstentions are
considered in determining the presence of a quorum but will not affect the vote
required for the election of directors. The affirmative vote of the holders of
majority of all of the outstanding shares of Common Stock of the Company
entitled to vote at the Annual Meeting is required for the proposal to approve
the amendments to the 2004 Equity Plan and the proposal to ratify the
appointment of the independent registered public accountants. Because of the
votes required, abstentions will have the same effect as a vote against these
proposals. Under rules applicable to broker dealers, all of the proposals for
consideration at the Annual Meeting are considered "discretionary" items upon
which brokerage firms may vote in their discretion on behalf of their clients if
such clients have not furnished voting instructions and for which there will not
be "broker non-votes."
1
On April 12, 2006, directors and executive officers beneficially owned
3,817,861 shares of Common Stock or 47.6% of the total shares of Common Stock
outstanding at such date. It is anticipated that all of such shares will be
voted FOR the election of the nominees of the Company's Board of Directors, FOR
the amendments to the 2004 Equity Plan and FOR the ratification of the selection
of Rothstein, Kass & Co., P.C. as the Company's independent registered public
accountants.
CORPORATE GOVERNANCE PRINCIPLES
Recently the Securities and Exchange Commission ("SEC") and the NASDAQ
promulgated rules to address certain requirements of the Sarbanes-Oxley Act of
2002 dealing with corporate governance. In accordance with those rules, the
Company's Board of Directors and its Audit, Compensation and Nominating
Committees adopted in the first quarter of 2004 governance principles to provide
guidance for the Board and those committees to ensure effective corporate
governance. These governance principles are summarized below. The committee
charters are described in the sections of this proxy statement that discuss the
duties and responsibilities of those committees.
BOARD PURPOSE AND RESPONSIBILITIES
The business of TWC is managed under the direction of its Board of
Directors. The Board represents and acts on behalf of all stockholders and the
Company and is responsible for establishing and helping the Company achieve its
business objectives through oversight, review and counsel. The Board's
responsibilities include, among other things:
o approving and monitoring critical business and financial
strategies;
o assessing major risks facing the Company, and options for their
mitigation;
o approving and monitoring major corporate actions;
o overseeing processes designed to ensure TWC's and TWC's
employees' compliance with applicable laws and regulations and
the Company's Code of Ethics for Executive Officers;
o overseeing processes designed to ensure the accuracy and
completeness of the Company's financial statements;
o monitoring the effectiveness of TWC's internal controls;
o selecting, evaluating, and setting appropriate compensation for
the chief executive officer upon the recommendation of the
Compensation Committee of the Board;
o reviewing the recommendations of management for, and electing,
the Company's executive officers; and,
o overseeing the compensation of the Company's executive officers
elected by the Board.
GOVERNANCE GUIDELINES
Except for Mr. Ramadan, who serves as the Company's president, chief
executive officer and chief financial officer and as a member of the Company's
Board of Directors, the remaining four members of the Company's Board of
Directors consist of independent directors who meet the requirements of rules
promulgated by the SEC and by the NASDAQ.
The Board of Directors has adopted corporate governance guidelines that
set forth certain Board policies including:
o qualifications for employee and non-employee Board members;
o how often the Board will meet, provisions for special meetings
and the expectation of director attendance;
o when a Board member should not participate in Board discussions
or vote on a Board matter;
o restrictions on service on the Boards of other companies;
o the purpose and responsibilities of the Board committees;
o committee membership and leadership;
o the Board's ability to meet with TWC employees without the
presence of executive officers to obtain information;
o the Board's ability to hire such independent advisers, including
attorneys, accountants and other consultants, as it deems
necessary or appropriate to carry out its duties; and,
o stockholder access to the Board.
A copy of the Company's Corporate Governance Guidelines and the Board
Committee Charters Appendix will be furnished to any stockholder upon written
request. Such requests should be sent to: Rami S. Ramadan, President, Chief
Executive Officer and Chief Financial Officer, Trans World Corporation, 545
Fifth Avenue, Suite 940, New York, New York 10017
ETHICAL STANDARDS
The Board of Directors also codified principles and guidelines for the
Company's executive officers. The Code of Ethics for Executive Officers requires
that TWC's executive officers affirmatively agree to:
o engage in honest and ethical conduct;
o avoid conflicts of interest;
o take all reasonable measures to protect the confidentiality of
non-public information about TWC and its customers;
o produce full, accurate, timely and understandable disclosure in
reports filed with the SEC;
o comply with any applicable governmental laws, rules and
regulations; and,
o report any possible violation of the Code to TWC's chief
financial officer.
3
A copy of the Company's Code of Ethics will be furnished to any
stockholder upon written request. Such requests should be sent to: Rami S.
Ramadan, President, Chief Executive Officer and Chief Financial Officer, Trans
World Corporation, 545 Fifth Avenue, Suite 940, New York, New York 10017.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors has established a process for stockholders to
communicate with members of the Board. If you have any concern, question or
complaint regarding TWC or regarding its compliance with any policy or law, or
would otherwise like to contact the Board, you can reach the Company's Board of
Directors by addressing your correspondence to: Attention: Board of Directors,
Trans World Corporation, 545 Fifth Avenue, Suite 940, New York, New York 10017.
Inquiries can be submitted anonymously and confidentially (to the extent
permitted by law).
All inquiries are received and reviewed by the Company's chief
financial officer, who must forward to the Board of Directors all items
received. If appropriate, the chief financial officer will also direct inquiries
most properly addressed by officers of the Company to ensure that the inquiries
are responded to in a timely manner. The Board of Directors, or, if appropriate,
a committee of the Board (such as the Audit Committee if the matter relates to
accounting, auditing or internal controls), will discuss these inquiries
internally and will direct any additional action it determines is necessary or
appropriate. The Board will resolve all Board-appropriate matters and will
direct management as to how and when to respond to the stockholders.
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board shall consist of not
less than three or more than nine members. Currently, the membership of the
Board is set at five and at present consists of five members. The Nominating
Committee of the Board has nominated the five individuals named below to serve
as directors of the Company until the next annual meeting of shareholders or
until their respective successors have been elected and qualified. All of the
nominees are members of the current Board. There are no arrangements or
understandings between the persons named as nominees for director at the Annual
Meeting and any other person pursuant to which such nominee was selected as a
nominee for election as a director at the Annual Meeting. No director or nominee
for director is related to any other director or executive officer of the
Company by blood, marriage or adoption.
The election of each nominee requires the affirmative vote of a
plurality of the shares of Common Stock represented in person or by proxy at the
Annual Meeting. Cumulative voting for directors is not permitted. The Board
recommends a vote FOR the election of each of the nominees listed below. In the
absence of other instructions, the proxies will be voted FOR the election of the
nominees named below. If, prior to the Annual Meeting, the Board should learn
that any nominee will be unable to serve by reason of death, incapacity or other
unexpected occurrence, the proxies that otherwise would have been voted for such
nominee will be voted for such substitute nominee as selected by the Board.
Alternatively, the proxies, at the Board's discretion, may be voted for such
fewer number of nominees as results from such death, incapacity or other
unexpected occurrence. The Board has no reason to believe that any of the
nominees will be unable to serve.
Information concerning the principal position with the Company and
principal occupation of each nominee for director during the past five years is
set forth below.
4
NOMINEES
RAMI S. RAMADAN, 56, has served as CEO/CFO since July 12, 1999 and
President since August 2000. His most recent prior position had been Executive
Vice President of Finance for the Ian Schrager Hotels from November 1997 to July
1999. Prior to that, Mr. Ramadan held senior financial positions with Hyatt
Hotels from January 1994 to November 1997, Euro Disney from October 1990 to
December 1993 and Meridien Hotels from September 1975 to September 1990.
JULIO E. HEURTEMATTE, JR., 70, is a private consultant, specializing in
international projects, trade and investments and has acted in such capacity
since 1989. From 1963 to 1989, Mr. Heurtematte served with the Inter-American
Development Bank in several capacities, most recently as its Deputy Manager for
Project Analysis. He has served as a director of the Company since 1998.
MALCOLM M. B. STERRETT, 63, is a private investor. From 1989 to 1993,
he was a partner at the law firm of Pepper Hamilton & Scheetz, in Washington,
D.C. From 1988 to 1989, he served as General Counsel to the U.S. Department of
Health and Human Services and from 1982 to 1988 he was a Commissioner on the
U.S. Interstate Commerce Commission. Before that, he was Vice President and
General Counsel to the United States Railway Association and served as Staff
Director and Counsel to the U.S. Senate Committee on Commerce, Science and
Transportation. He has served as a director of the Company since 1998.
GEOFFREY B. BAKER, 56, is a private investor. From 1983 to the present,
Mr. Baker has been a member of the private investment firm, Baker & Donaldson.
From 1977 to 1982, he was Legislative Director to former U.S. Senator Lowell P.
Weicker, Jr., and from 1975 to 1977 he served on the Senate Committee on
Commerce as a minority staff member for surface transportation. Mr. Baker has
served as a director of the Company since 1998.
TIMOTHY G. EWING, 45, is a Chartered Financial Analyst, the managing
partner of Ewing & Partners and the manager of Value Partners, Ltd., a private
investment partnership formed in 1989, and of the Endurance Partnerships, formed
in 2001. Mr. Ewing sits on the board of directors of Cherokee, Inc. (NASDAQ:
CHKE) in Van Nuys, CA since 1997, and Harbourton Capital Group (OTC: HBTC) in
McLean, VA since 2000. In addition, he is immediate past chairman and executive
board member of the Dallas Museum of Natural History, and sits on the board of
trustees of The Dallas Opera, and the advisory board of the University of Texas
at Dallas' Holocaust Studies Program. Mr. Ewing has served as a director of the
Company since 2004.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE
ABOVE NOMINEES FOR DIRECTOR.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES OF THE BOARD
The Company's Board of Directors, which is chaired Mr. Sterrett in a
non-executive role, has responsibility for establishing broad corporate policies
and overall performance of TWC and is not involved in the day-to-day operating
details of the Company's business. Members of the Board are kept informed of the
Company's business through various documents and reports provided by the
President and other officers of the Company and by participating in Board and
Board committee meetings. Each director has access to all books, records and
reports of TWC, and members of management are available at all times to answer
any director's questions.
The Board holds biweekly conference calls and meets on an as-needed
basis. In addition to the 2005 Annual Meeting, the Board met twice in person and
acted by consent twice during the Company's fiscal year ended December 31, 2005.
No director of the Company attended fewer than 75% of the total number of
conference call and in-person meetings of the Board or meetings of committees of
the Board during the year ended December 31, 2005.
The Board of Directors of TWC is authorized by its Bylaws to elect
members of its Board to committees of the Board which may be necessary or
appropriate for the conduct of the business of the Company. At December 31,
2005, TWC had the following three committees:
5
AUDIT COMMITTEE. The Audit Committee has the responsibilities set forth
in the Company's Audit Committee Charter. It reviews and approves internal
accounting controls, internal audit operations and activities, the Company's
annual report and audited financial statements, the selection of the Company's
independent auditors, the activities and recommendations of the Company's
independent auditors, material changes in the Company's accounting procedures,
the Company's policies regarding conflicts of interest and such other matters as
may be delegated by the Board. The Audit Committee is composed of Mr. Baker, the
Committee's Chairman, and Messrs. Ewing, Heurtematte and Sterrett, all of whom
are non-employee, "independent" directors, with Mr. Heurtematte serving as the
"audit committee financial expert." The Audit Committee met once in-person and
acted by consent once in 2005. Additionally, the Committee's Chairman conferred
four times via telephone with the committee members regarding audit matters
throughout 2005.
A copy of the Company's Audit Committee Charter will be furnished to
any stockholder upon written request. Such requests should be sent to: Rami S.
Ramadan, President, Chief Executive Officer and Chief Financial Officer, Trans
World Corporation, 545 Fifth Avenue, Suite 940, New York, New York 10017.
COMPENSATION COMMITTEE. The Compensation Committee, whose
responsibilities are enumerated in the Company's Compensation Committee Charter,
sets the compensation for executive officers of the Company and sets the terms
of grants of awards under the Company's 1993 Incentive Stock Option Plan, the
Company's 1998 Stock Option Plan, the 1999 Non-Employee Director Stock Option
Plan (the "1999 Director Plan"), the 2004 Equity Plan, and any other
equity-based compensation plans adopted by the Company. The Compensation
Committee, composed of Mr. Heurtematte, the Committee's Chairman, and Messrs.
Baker, Ewing, and Sterrett, met three times in 2005 and acted by consent once in
2005.
A copy of the Company's Compensation Committee Charter will be
furnished to any stockholder upon written request. Such requests should be sent
to: Rami S. Ramadan, President, Chief Executive Officer and Chief Financial
Officer, Trans World Corporation, 545 Fifth Avenue, Suite 940, New York, New
York 10017.
NOMINATING COMMITTEE. The Nominating Committee reviews, evaluates and
recommends candidates for the Board, oversees and evaluates the Board and
Company's management decisions, selects Board committee chairs and membership,
and performs any other activities as the Committee deems appropriate, or as are
requested by the Board, consistent with the Committee's Charter, the Company's
Bylaws and applicable law. The Nominating Committee, composed of Mr. Ewing, the
Committee's Chairman, and Messrs. Baker, Heurtematte and Sterrett, met once in
2005.
A copy of the Company's Nominating Committee Charter will be furnished
to any stockholder upon written request. Such requests should be sent to: Rami
S. Ramadan, President, Chief Executive Officer and Chief Financial Officer,
Trans World Corporation, 545 Fifth Avenue, Suite 940, New York, New York 10017.
The members of each of the above-described committees are considered by
the Board to be "independent" under the rules promulgated by the SEC and the
NASDAQ National Market.
COMPENSATION OF DIRECTORS
Effective since the quarter ending September 30, 2003, non-employee
directors' compensation includes a cash retainer fee of $6,250 per quarter, per
member. In addition, the non-executive chairman of the Board will receive an
additional $1,250 per quarter, while each chairman of its three Committees will
receive $625 per quarter. All members of the Board are reimbursed for
out-of-pocket expenses in connection with attending Board meetings. Pursuant to
the 1999 Director Plan adopted at the 1999 Annual Meeting and amended by the
Board in July 2000, each non-employee director is provided with an automatic
grant of a non-qualified option to purchase 25 shares of Common Stock on the
date following each fiscal quarter in which the director serves. Each such
option (i) has a 10-year term, (ii) has an exercise price per share equal to
100% of the fair market value of one share of Common Stock on the date of grant,
and (iii) becomes fully exercisable on the date of grant. As of April 17, 2006,
there were 365 shares of Common Stock remaining available for issuance under the
1999 Director Plan reserve.
6
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended (the
"Exchange Act") except to the extent the Company specifically incorporates this
Report by reference therein.
The Audit Committee has reviewed and discussed the audited financial
statements with management. The Audit Committee has discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61 "Communication with Audit Committees," as may be
modified or supplemented. The Audit Committee has received the written
disclosures and the letter from the independent registered public accountants
required by the Independence Standards Board Standard No. 1, as may be modified
or supplemented, and has discussed with the independent accountant, the
independent accountant's independence. Based on the review and discussions
referred to above in this report, the Audit Committee recommended to the Board
of Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2005 for filing
with the Securities and Exchange Commission.
By the Committee:
Geoffrey B. Baker
Timothy G. Ewing
Julio E. Heurtematte, Jr.
Malcolm M.B. Sterrett
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Common Stock as of the Voting Record Date of April 12, 2006,
unless otherwise noted, (a) by each shareholder who is known by the Company to
own beneficially more than 5.0% of the outstanding Common Stock, (b) by each
director who is also a nominee for director, (c) by each executive officer named
in the Summary Compensation Table below and by all executive officers and
directors as a group. Unless otherwise noted, each of the shareholders listed in
the table or included within a group listed in the table possesses sole voting
and investment power with respect to the shares indicated subject to community
property laws where applicable. The business address for each director and
officer of the Company is 545 Fifth Avenue, Suite 940, New York, New York 10017.
Number of Shares of
Common Stock Percentage of
Name of Beneficial Owner Beneficially Owned(1) Ownership(1)
- -------------------------------------------------------------- --------------------- --------------
Value Partners, Ltd. (2) 3,559,388 45.4%
Rami S. Ramadan (3) 183,000 2.3
Julio E. Heurtematte, Jr. (4) 25,171 *
Malcolm M.B. Sterrett (5) 25,171 *
Geoffrey B. Baker (6) 25,131 *
Timothy G. Ewing (7) 3,559,388 45.4
Special Situations Funds (8) 1,323,600 16.9
Wynnefield Small Cap Value Offshore Fund, Ltd (9) 882,353 11.3
SC Fundamental Funds Group (10) 588,235 7.5
All directors and the executive officer as a group (5 persons) (11) 3,817,861 47.6%
- -------------------
* Less than 1%.
7
(1) The percentage of outstanding shares is based on 7,840,869 shares
outstanding as of April 12, 2006 and, for certain individuals, entities and
all directors and executives as a group, the percentage is based on total
outstanding shares plus total shares of Common Stock issuable upon the
exercise of certain options or warrants. Data for certain individuals is
extracted from reports filed with the SEC or from information provided
directly to the Company by such individuals or entities. A person is deemed
to be the beneficial owner of securities that can be acquired by such
person within 60 days from April 12, 2006 upon the exercise of options or
warrants. Each beneficial owner's percentage ownership is determined by
assuming that options or warrants that are held by such person (but not
those held by any other person) are exercisable within 60 days from April
12, 2006 have been exercised.
(2) Value Partners, Ltd. is a Texas limited partnership, managed by Ewing &
Partners, whose business address is 4514 Cole Avenue, Suite 808, Dallas,
Texas 75205.
(3) Consists of 2,500 shares of Common Stock and 180,500 shares subject to
incentive options, granted to Mr. Ramadan on July 12, 1999 and each
subsequent year through 2005, of which 40,500 are vested. (See
"Employment/Severance Agreement.")
(4) Includes 24,029 shares of Common Stock; warrants to purchase 417 shares of
Common Stock at an exercise price of $1.00 per share expiring March 31,
2008; 10 shares of Common Stock subject to non-qualified options granted to
Mr. Heurtematte under the 1998 Plan at the end of each calendar quarter
ended June 30, 1998 through December 31, 1998 and 20 shares of Common Stock
subject to non-qualified options granted under the 1999 Director Plan at
the end of each calendar quarter ended March 31, 1999 through June 30,
2000, and 25 shares of Common Stock subject to non-qualified options
granted under the 1999 Director Plan at the end of each calendar quarter
ended September 30, 2000 through March 31, 2006, all of which were fully
vested on the dates of grant.
(5) Includes 24,029 shares of Common Stock; warrants to purchase 417 shares of
Common Stock at an exercise price of $1.00 per share expiring March 31,
2008; 10 shares of Common Stock subject to non-qualified options granted to
Mr. Sterrett under the 1998 Plan at the end of each calendar quarter ended
June 30, 1998 through December 31, 1998 and 20 shares of Common Stock,
subject to non-qualified options, granted under the 1999 Director Plan at
the end of each calendar quarter ended since March 31, 1999 through June
30, 2000, and 25 shares of Common Stock subject to non-qualified options
granted under the 1999 Director Plan at the end of each calendar quarter
ended September 30, 2000 through March 31, 2006, all of which were fully
vested on the dates of grant.
(6) Includes 24,029 shares of Common Stock; warrants to purchase 417 shares of
Common Stock at an exercise price of $1.00 per share expiring March 31,
2008; 10 shares of Common Stock subject to non-qualified options granted to
Mr. Baker under the 1993 Incentive Stock Option Plan at December 31, 1998,
20 shares of Common Stock, subject to non-qualified options, granted under
the 1999 Director Plan for the calendar quarter ended March 31, 1999 and 20
shares of Common Stock subject to non-qualified options granted under the
1999 Director Plan at the end of each quarter ended since September 31,
1999 through June 30, 2000, and 25 shares of Common Stock subject to
non-qualified options granted under the 1999 Director Plan at the end of
each calendar quarter ended September 30, 2000 through March 31, 2006, all
of which were fully vested on the dates of grant.
(7) Mr. Timothy G. Ewing is the managing partner of Ewing & Partners, which
manages Value Partners, Ltd. His beneficial ownership includes 3,559,388
shares of Common Stock, held by Value Partners, Ltd. (See also Note (2)
above).
(8) AWM Investment Company, Inc., ("AWM") a Delaware corporation, is the
general partner of and investment adviser to the Special Situations Cayman
Fund, L.P. ("SSCF"). MG Advisers, L.L.C., ("MG") a New York limited
liability company, is the general partner of and investment adviser to the
Special Situations Private Equity Fund, L.P. ("SSPEF"). Austin W. Marxe and
David M. Greenhouse are the principal owners of AWM and MG and are
principally responsible for the selection, acquisition and disposition of
the portfolios securities by the investment advisers on behalf of their
Funds. As a result of a private placement of $4.75 million of Company
Common Stock that was completed in late December, 2005 (the "Private
Placement"), SSCF and SSPEF beneficially own 588,300 and 735,300 shares of
Common Stock, respectively. The principal business of Special Situations
Funds is to invest in equity and equity-related securities and other
securities of any kind and nature.
8
(9) As part of its participation in the Private Placement, Wynnefield Small Cap
Value Offshore Fund, Ltd., an investment firm, directly beneficially owns
882,353 shares of the Company's Common Stock.
(10) SC Fundamental Value Funds LP ("SCFVF") and SC Fundamental Value BVI, Ltd
("SCFVBVI"), collectively referred to as SC Fundamental Value Funds Group,
were also participants in the Private Placement. SCFVF is managed by SC
Fundamental LLC, as general partner, and beneficially owns 335,295 shares
of Common Stock, while SCFVBVI is managed by SC BVI Partners, as investment
advisor, and beneficially owns 252,940 shares of Common Stock.
(11) See Notes (3), (4), (5), (6) and (7) above.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth certain information for all equity
compensation plans and individual compensation arrangements (whether with
employees or non-employees, such as directors) in effect as of December 31,
2005.
Number of securities Number of securities remaining
to be issued upon Weighted-average available for future issuance
exercise of exercise price of under equity compensation plans
- ------------------------------- outstanding options outstanding options (excluding securities reflected
Plan Category and rights and rights in the first column)
- ------------------------------- --------------------- ----------------------- --------------------------------
Equity compensation plans (1)
approved by security holders 261,260 $ 3.41 12,823
Equity compensation plans not
approved by security holders 0 $ 0 0
------- -------- ------
Total 261,260 $ 3.41 12,823
======= ======== ======
- ------------------------
(1) Includes outstanding reserves remaining in the 2004 Incentive Equity Plan
and the 1999 Director Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. by certain dates. The Company's
directors and executive officers satisfied these filing requirements for the
fiscal year ended December 31, 2005.
Value Partners currently beneficially owns 3,559,388 shares, or 45.4%,
of the Company's issued and outstanding Common Stock. As of December 31, 2005,
Value Partners also holds 8.2% of the Company's long-term debt. The shares owned
by Value Partners are also attributed to Mr. Timothy G. Ewing, a director of the
Company, since he serves as the managing partner of Ewing & Partners, the
manager of Value Partners.
Except for Value Partners, Special Situations Fund and Wynnefield Small
Cap Value Offshore Fund, Ltd., the Company knows of no other person who owns 10%
or more of the Company's Common Stock. See also "Beneficial Ownership of Common
Stock by Certain Beneficial Owners and Management."
9
MANAGEMENT COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation paid
to or earned by the executive officer of the Company named in the table below
during the fiscal years ending December 31, 2005, 2004 and 2003.
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION | LONG TERM COMPENSATION
- -----------------------------------------------------------------------------|------------------------------------------
OTHER | RESTRICTED STOCK ALL OTHER
COMPENSATION | STOCKS OPTIONS COMPENSATION
|
YEAR SALARY BONUS (2) | (3) (3)
|
Rami S. Ramadan (1) 2005 $400,000 $0 $8,280 | $0 175,000 $0
|
2004 400,000 150,000 8,268 | 0 1,500 0
|
2003 400,000 168,000 5,616 | 0 1,500 0
(1) Mr. Ramadan joined the Company as its CEO and CFO, July 12,
1999. He was elected the Company's President in August 2000. On
July 1, 2005, Mr. Ramadan's employment agreement was renewed and
amended for an additional two and one-half years.
(2) The amounts shown represent the cost of operating and
maintaining a leased automobile provided to Mr. Ramadan by the
Company for each year indicated.
(3) Amounts in year 2003 through 2004 represent the number of
qualified stock options granted each year. These options listed
are exercisable, and the option exercise price per share for
2003 and 2004 was set forth in Mr. Ramadan's 2002 employment
contract. These options are exercisable at a per share price
equal to the fair market value of such share, as determined by
the average of the bid and ask price of such share at the close
of the market on the date of the grant. Commencing with the
renewal of his employment agreement in July 1, 2005 and pursuant
to the Company's 2004 Equity Plan, Mr. Ramadan's equity
compensation plan includes a grant of seven-year options to
purchase an aggregate total of 175,000 shares of the Company's
Common Stock. The exercise price, which began at $2.80 on July
1, 2005, increases by 3% every six months, and will end on
January 1, 2012 at an exercise price of $4.11.
These options will vest cumulatively as follows, if Mr. Ramadan
is, at such time, employed by TWC:
AT NUMBER VESTED CUMULATIVE NUMBER VESTED
---- ------------- ------------------------
July 1, 2005 35,000 35,000
July 1, 2006 35,000 70,000
July 1, 2007 35,000 105,000
July 1, 2008 35,000 140,000
July 1, 2009 35,000 175,000
10
In addition, Mr. Ramadan was granted, pursuant to his renewed employment
agreement and the 2004 Equity Plan, 75,000 shares of restricted Common
Stock that vest cumulatively as follows, beginning with the quarter ended
September 30, 2005:
NUMBER CUMULATIVE VESTED WHEN VESTED
------ ----------------- -----------
25,000 25,000 When the trailing twelve months ("TTM") earnings per share from TWC's
continuing operations for any two (2) consecutive fiscal quarters
("TTMEPS") is equal to or exceeds $0.45 for the fist time.
25,000 50,000 When TTMEPS is equal to or exceeds $0.60 for any two (2) consecutive
fiscal quarters ended for the first time.
25,000 75,000 When TTMEPS is equal to or exceeds $0.75 for any two (2) consecutive
fiscal quarters ended for the first time.
All unvested options and unvested restricted stock granted hereunder
automatically and without any further action on the part of Mr. Ramadan or
any members of the Compensation Committee, terminate upon the effective
date of the termination or expiration of his employment agreement, except
that all unvested options and unvested restricted stock granted,
automatically and without any further action on the part of any person,
vest in Mr. Ramadan upon the closing date of a change of control of the
Company. All such vested options and restricted stock must be surrendered
or otherwise converted into cash or securities of the acquirer or
exercised as required or permitted by the terms and conditions of the
change of control documents. Any extension of the terms of his employment
agreement beyond December 31, 2007 will not result in the extension of any
option or stock grant vesting or exercise periods set forth above. As of
December 31, 2005 no shares of restricted stock had vested.
OPTION GRANTS/EXERCISES AND VALUES FOR FISCAL 2005
The following table summarizes certain information concerning
individual grants of options during fiscal 2005 to the executive officer named
in the Summary Compensation Table above and the potential realizable value of
the options held by such person at December 31, 2005.
OPTIONS GRANTED IN FISCAL 2005
INDIVIDUAL GRANTS
BASE
SHARES OF COMMON % OF TOTAL OPTIONS EXERCISE
STOCK UNDERLYING GRANTED TO EMPLOYEES IN PRICE
OPTIONS GRANTED FISCAL YEAR ($/SH) EXPIRATION DATE
---------------- ----------------------- ----------- ---------------
RAMI S. RAMADAN 175,000 100% $2.80 06/30/12
No options were exercised by the executive officer named in the Summary
Compensation Table during fiscal 2005.
11
The following table summarizes the option values held by the executive
officer named in the Summary Compensation Table as of December 31, 2005.
AGGREGATE OPTION EXERCISES IN FISCAL 2005 AND
FISCAL 2005 YEAR-END OPTION VALUE TABLE
NUMBER OF UNEXERCISED OPTIONS | VALUE OF UNEXERCISED IN THE
AT | MONEY OPTIONS AT
DECEMBER 31, 2005 | DECEMBER 31, 2005
- ------------------------------------------------------------------------------------------------------------------
NO. OF | | |
SHARES | VALUE REALIZED | |
ACQUIRED ON | UPON EXERCISE | |
NAME EXERCISE | | EXERCISABLE UNEXERCISABLE | EXERCISABLE UNEXERCISABLE
| | |
RAMI S. RAMADAN 0 | $0 | 40,500 140,000 | $0 $0
EMPLOYMENT/SEVERANCE AGREEMENT
Effective July 1, 2005, the employment agreement between the Company and Mr.
Ramadan was renewed for a period of two and one-half years pursuant to which Mr.
Ramadan will continue to serve as the Company's CEO, CFO and President at an
annual salary of $400,000. Mr. Ramadan is eligible to participate in the 2004
Equity Plan and any present or future employee benefit plans, including a
proposed profit sharing bonus plan and a proposed deferred compensation plan. He
also will be reimbursed for reasonable travel and out-of-pocket expenses
necessarily incurred in the performance of his duties. As provided by Mr.
Ramadan's new agreement and shown in Footnote 2 to the Summary Compensation
Table above, he received: (i) a grant of seven year options to purchase an
aggregate total of 175,000 shares of the Company's Common Stock in allotments of
35,000 shares per annum as described above in Footnote 3 of the Summary
Compensation Table; and (ii) upon reaching designated earnings per share
targets, 75,000 shares of restricted Common Stock in 25,000 share allotments.
In the event the employment agreement is terminated without cause, as defined in
the agreement, Mr. Ramadan will receive two year's salary, subject to certain
timing limitations. The agreement is also subject to numerous termination
provisions in the event of death, disability, discharge for cause, and material
breach thereof, among others. In addition, upon termination of his agreement,
with the exception of a discharge for cause, generally, the Company will
continue to pay Mr. Ramadan his base salary and his medial insurance benefits
then in effect until the date of the earlier of the commencement of his full
time employment with another employer, or the first anniversary of the
termination date of the employment agreement. Further, the employment agreement
expires on December 31, 2007, provided, however, unless either the Company or
Mr. Ramadan notifies the other of its/his intent not to extend the term on or
prior to September 30, 2007 or on or prior to each September 30th thereafter,
then the term of the agreement will be automatically extended for a period of
one year to the next December 31st.
12
CERTAIN TRANSACTIONS
At December 31, 2005 and 2004, approximately $372,000 and $1.1 million
of the Interest Notes were held by Value Partners, Ltd., an approximate 45%
owner of the Company's issued and outstanding Common Stock as of December 31,
2005. Related interest expense was approximately $60,000 and $114,000 for the
years ended December 31, 2005 and 2004, respectively.
During the year ended December 31, 2005, the Company utilized the
services of an attorney who is the brother of the Company's managing director of
Czech operations. Fees paid to the attorney during 2005 aggregated approximately
$12,000. At December 31, 2005, approximately $1,200 was owed to the attorney for
services rendered through such date.
As of December 31, 2005, Value Partners, of which Mr. Ewing, a director
of the Company, is the managing partner of Ewing & Partners, its general
partner, holds a controlling 45.4% of the Company's issued and outstanding
Common Stock. Further, Value Partners holds 8.2% of the Company's long term
debt.
PROPOSAL TO AMEND THE 2004 EQUITY PLAN
Since 1993, the Company has emphasized the grant of stock options at
exercise prices based on fair market value as a means of providing long-term
compensation to, and encouraging a long-term commitment by, its senior
executives, certain key employees of the Company and its subsidiaries and its
non-employee directors. Most recently these grants have been made pursuant to
the 2004 Equity Plan adopted by the stockholders of the Company at the 2004
Annual Meeting and the 1999 Director Plan adopted by the stockholders of the
Company at the 1999 Annual Meeting. The Company believes that stock options and
other stock compensation have enhanced the Company's ability to meet its
long-term goals and intends to continue to utilize this means of compensation
for its employees and its non-employee directors. In order to continue its
ability to grant incentives and equity compensation to employees and directors,
the Compensation Committee of the Board of Directors of the Company, which
administers both 2004 Equity Plan and the 1999 Director Plan, has determined
that the 2004 Equity Plan should have an additional reserve of shares so that
the Company's policy of issuing forms of equity compensation to its employees as
an incentive for superior work as motivation for higher business achievements
and results and to its non-employee directors by compensating them for their
service to the Company can continue. In addition the Board believes the 2004
Equity Plan will continue to enable it to attract and retain highly qualified
senior executives.
Under the 2004 Equity Plan, there were 251,583 shares available for
grant as well as 10,800 shares that, as of May 5, 2004, were available for
issuance under the Company's 1998 Stock Option Plan (the "Prior Plan"). At
present, 12,383 shares remain available for grant under the 2004 Equity Plan.
Under the 1999 Director Plan, there were 2,500 shares available for grant of
which 365 shares remain available for future grant. Accordingly, the
Compensation Committee has approved two proposed amendments affecting several
sections of the 2004 Equity Plan for stockholder approval at this Annual
Meeting. The first amendment would authorize an increase in the number of shares
reserved for issuance under the 2004 Equity Plan, due to the insufficient number
of shares presently available for awards which the Company expects to make in
future years pursuant to its current compensation practices. The second
amendment would amend the definition of those eligible to participate in the
2004 Equity Plan to include non-employee directors. As a result, no further
grants would be made under the 1999 Director Plan.
The amendments provide that the total number of authorized shares that
may be issued under the provisions of the 2004 Equity Plan be increased by
125,365 shares. This increase would include the 365 shares remaining in the 1999
Director Plan, which have not been awarded to date. Other amendments provide
that non-employee directors of the Company would be eligible to participate in
the 2004 Equity Plan. If these amendments are approved by the stockholders, the
reserve of shares that will be available for the future issuance of stock
options and other awards under the 2004 Equity Plan will increase from 12,383 to
137,748 shares (representing approximately 1.8% of the Company's 7,840,869
outstanding shares of Common Stock). All of these options will be available for
grants to the executive officers and non-employee directors as well as other key
13
employees, except that non-employee directors are eligible to receive only
awards of non-incentive stock options. With the exception of the current and
continuing policy to grant non-employee directors options to purchase 25 shares
of Common Stock of the Company each fiscal quarter, it is not presently
determinable who will receive these option awards since such awards are granted
by the Compensation Committee in its discretion from time to time.
These amendments to the 2004 Equity Plan will not become effective
unless and until they are approved by the stockholders of the Company and the
date of such approval will be its effective date. The provisions of the 2004
Equity Plan to be amended are set forth below and are qualified in their
entirety by reference to the full text of the 2004 Equity Plan, in its present
form and as proposed for amendment, a copy of which may be obtained from the
Company by addressing your request to the Compensation Committee, Trans World
Corporation, 545 Fifth Avenue, Suite 940, New York, New York 10017.
"SECTION 1. Purpose. The purposes of the Trans World Corporation 2004
Equity Incentive Plan are to promote the interests of the Company and
its stockholders by (i) attracting and retaining exceptional executive
personnel and other key employees of the Company and its Affiliates
(ii) motivating such employees by means of performance-related
incentives to achieve long-range performance goals; (iii) enabling such
employees to participate in the long-term growth and financial success
of the Company; and (iv) compensating non-employee directors for their
service to the Company.
****
SECTION 2. Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Non-employee Director" shall mean a director of the Company or of any
Affiliate, who is not also an employee of the Company or of any Affiliate.
"Participant" shall mean any Employee or Non-Employee Director selected
by the Committee to receive an Award under the Plan.
****
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under
the Plan shall not exceed (i) 376,583 plus (ii) 10,800 Shares that, as
of May 5, 2004, were available for issuance under the Company's 1998
Stock Option Plan (the "Prior Plan") or that thereafter become
available for issuance under the Prior Plan in accordance with its
terms as in effect on such date and (iii) 365 Shares that, as of April
12, 2006, were available for issuance under the Company's 1999
Non-Employee Director Stock Option Plan (the "1999 Director Plan") or
that thereafter become available for issuance under the 1999 Director
Plan in accordance with its terms as in effect on such date.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
AMENDMENTS TO THE 2004 EQUITY PLAN.
14
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Board of Directors of the Company, on the recommendation of the
Audit Committee of the Board, has appointed Rothstein, Kass & Co., P.C.,
independent registered public accountants, to perform the audit of the Company's
financial statements for the year ending December 31, 2006, and further directed
that the selection of accountants be submitted for ratification by the
stockholders at the Annual Meeting.
The Company has been advised by Rothstein, Kass & Co., P.C. that
neither that firm nor any of its associates has any relationship with the
Company or its subsidiaries other than the usual relationship that exists
between independent accountants and clients. Rothstein, Kass & Co., P.C.
provided audit and non-audit services to the Company in 2005 and 2004, which are
described below. It is not anticipated that Rothstein, Kass & Co., P.C. will
have a representative at the Annual Meeting.
The following table shows the fees that were billed to the Company by
Rothstein, Kass & Co., P.C. for professional services rendered for the fiscal
years ended December 31, 2005 and December 31, 2004.
FEE CATEGORY 2005 2004
---------------------------------- -------------- -------------
Audit Fees $ 135,000 $ 129,000
Audit-Related Fees 3,000 5,000
Tax Fees 32,000 20,000
-------------- -------------
Total Fees $ 170,000 $ 154,000
AUDIT FEES. This category includes fees for the audit of the
Corporation's annual financial statements, review of financial statements
included in the Corporation's quarterly reports on Form 10-Q and services that
are normally provided by Rothstein, Kass & Co., P.C. in connection with
statutory and regulatory filings or engagements.
AUDIT-RELATED FEES. This category includes fees for assurance and
related services that are reasonably related to the performance of the audit or
review of the Corporation's financial statements and are not included above
under "Audit Fees."
TAX FEES. This category includes fees for tax compliance, tax advice,
and tax planning. These services include tax return preparation, expatriate tax
services and international VAT tax planning.
In the event that stockholders fail to ratify the selection, the Audit
Committee and the Board will reconsider whether or not to retain that firm. Even
if the selection is ratified, the Board, at its discretion, may direct the
appointment of a different independent accounting firm at any time during the
year if it determines that such a change would be in the best interest of the
Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF ROTHSTEIN, KASS & CO., P.C. AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006.
15
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have presented at the 2007
Annual Meeting of Stockholders of the Company and included in the proxy
materials used by the Company in connection with such meeting must be received
at the principal executive office of the Company at 545 Fifth Avenue, Suite 940,
New York, New York 10017, no later than December 19, 2006. If such proposal is
in compliance with all of the requirements of Rule 14a-8 promulgated under the
Exchange Act it will be included in the Proxy Statement and set forth on the
proxy card issued for the 2007 Annual Meeting of Stockholders. It is urged that
any such proposals be sent by certified mail, return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to the Company's Articles of
Incorporation, which provide that business must be properly brought before the
meeting by or the direction of the Board of Directors, or otherwise properly
brought before the meeting by a stockholder. For business to be properly brought
before an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Company. To be timely,
a stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of the Company not less than 60 days prior to the
anniversary date of the mailing of proxy materials by the Company in connection
with the immediately preceding annual meeting of stockholders of the Company. A
stockholder's notice shall set forth as to each matter the stockholder proposes
to bring before an annual meeting such information as is specified in the
Company's Articles of Incorporation. If the proposal is not made in accordance
with the terms of the Articles of Incorporation, such proposal will not be acted
upon at the Annual Meeting. No stockholder proposals were received by the
Company in connection with the 2006 Annual Meeting.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 2005 accompanies this Proxy Statement. Such Annual Report is not
part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB FOR FISCAL 2005 REQUIRED TO BE FILED UNDER THE EXCHANGE ACT. SUCH WRITTEN
REQUESTS SHOULD BE DIRECTED TO SECRETARY, TRANS WORLD CORPORATION, 545 FIFTH
AVENUE, SUITE 940, NEW YORK, NEW YORK 10017. THE FORM 10-KSB IS NOT PART OF THE
PROXY SOLICITATION MATERIALS.
16
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
proxies named therein to vote the proxy with respect to the approval of the
minutes of the last meeting of stockholders, the election of any person as a
Director if the nominee is unable to serve or for good cause will not serve,
matters incident to the conduct of the meeting, and upon such other matters as
may properly come before the Annual Meeting. Management is not aware of any
business that may properly come before the Annual Meeting other than the matters
described above in this Proxy Statement. However, if any other matters should
properly come before the meeting, it is intended that the proxies solicited
hereby will be voted with respect to those other matters in accordance with the
discretion of the persons voting the proxies.
The Company may solicit proxies by mail, advertisement, telephone,
facsimile and personal solicitation. The cost of this solicitation of proxies
will be borne by the Company. The Company will also reimburse banks, brokerage
firms and other custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy solicitation materials to the beneficial
owners of the Company's Common Stock Directors and executive officers of the
Company may solicit proxies personally or by telephone without additional
compensation.
By Order of the Board of Directors
/s/ Rami S. Ramadan
Rami S. Ramadan
President, Chief Executive Officer and
Chief Financial Officer
April 17, 2006
17
TRANS WORLD CORPORATION
April 17, 2006
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Trans World Corporation. The meeting will be held in the 12th floor
Conference Room of the Walker Building located at 734 15th Street N.W.,
Washington, D.C. 20005 on Wednesday, May 17, 2006 at 10:00 a.m., Eastern
Daylight Time. The matters to be considered by stockholders at the Annual
Meeting are described in the accompanying materials.
The Board of Directors of the Company has determined that the matters
to be considered at the Annual Meeting are in the best interests of the Company
and its stockholders. FOR THE REASONS SET FORTH IN THE ATTACHED PROXY STATEMENT,
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE BOARD'S NOMINEES FOR
DIRECTOR AND "FOR" THE AMENDMENTS TO THE 2004 EQUITY INCENTIVE PLAN AND "FOR"
THE RATIFICATION OF ROTHSTEIN, KASS & COMPANY P.C. AS THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS FOR THE COMPANY'S FISCAL YEAR ENDING DECEMBER 31, 2006.
Directors and officers of the Company will be present at the Annual Meeting to
respond to any questions that stockholders may have.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign, and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of, and interest in, Trans World Corporation are
greatly appreciated.
Sincerely,
/s/ Rami S. Ramadan
Rami S. Ramadan
President, Chief Executive Officer and
Chief Financial Officer
\/FOLD AND DETACH HERE AND READ THE REVERSE SIDE\/
- --------------------------------------------------------------------------------
REVOCABLE PROXY
TRANS WORLD CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2006
The undersigned, being a stockholder of Trans World Corporation (the
"Company") as of April 12, 2006, hereby authorizes Rami S. Ramadan or any
successors thereto as proxy with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held in
the 12th floor Conference Room of the Walker Building located at 734 15th Street
N.W., Washington, D.C. 20005 on Wednesday, May 17, 2006 at 10:00 a.m., Eastern
Daylight Time, and at any adjournment of said meeting, and thereat to act with
respect to all votes that the undersigned would be entitled to cast, if then
personally present, as follows:
1. ELECTION OF DIRECTORS / / FOR / / FOR ALL EXCEPT / / WITHHOLD AUTHORITY
Nominees for a one year term: Geoffrey B. Baker, Timothy G. Ewing,
Julio E. Heurtematte, Jr., Rami S. Ramadan, Malcolm M.B. Sterrett
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
UNLESS AUTHORITY TO VOTE FOR ALL OF THE FOREGOING NOMINEES IS WITHHELD, THIS
PROXY WILL BE DEEMED TO CONFER AUTHORITY TO VOTE FOR EACH NOMINEE WHOSE NAME IS
NOT WRITTEN BELOW.
_________________________________________________________________
2. PROPOSAL to amend the 2004 Equity Incentive Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL to ratify the appointment by the Board of Directors of Rothstein,
Kass & Company, P.C. as the Company's independent registered public accountants
for the fiscal year ending December 31, 2006.
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 2006 AND AT
ANY ADJOURNMENT THEREOF.
(THIS PAGE INTENTIONALLY LEFT BLANK)
\/FOLD AND DETACH HERE AND READ THE REVERSE SIDE\/
- --------------------------------------------------------------------------------
REVOCABLE PROXY
TRANS WORLD CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2006
SHARES OF THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF
RETURNED, BUT NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE BOARD OF DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR THE
AMENDMENTS TO THE 2004 EQUITY INCENTIVE PLAN, FOR RATIFICATION OF THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS, AND OTHERWISE AT THE DISCRETION OF
THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED
AT THE ANNUAL MEETING.
Please be sure to sign and date this Proxy in the space below.
Date: _______________________________________, 2006
_________________________________________________
Stockholder signature
_________________________________________________
Co-holder signature, if any.
PLEASE SIGN ABOVE EXACTLY AS YOUR NAME(S) APPEAR(S) ON THIS PROXY. WHEN
SIGNING IN A REPRESENTATIVE CAPACITY, PLEASE GIVE FULL TITLE. WHEN SHARES ARE
HELD JOINTLY, ONLY ONE HOLDER NEEDS TO SIGN.
PLEASE ACT PROMPTLY. SIGN, DATE AND MAIL YOUR PROXY CARD TODAY.
I PLAN TO ATTEND THE ANNUAL MEETING: YES NO
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE
PROVIDED BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________