Ata Holdings Corp – ‘PREM14A’ for 9/5/01

On:  Friday, 6/29/01, at 5:27pm ET   ·   For:  9/5/01   ·   Accession #:  950117-1-500670   ·   File #:  0-21642   ·   Correction:  This Filing was Corrected by the SEC on 7/11/01. ®

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Preliminary Proxy Solicitation Material — Merger or Acquisition   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Amtran, Inc Preliminary Proxy Statement              140    741K 

Document Table of Contents

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________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION
(RULE 14A-101)

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:                                                      

[x] Preliminary Proxy Statement                                         

[ ] Confidential, for Use of the Commission Only (as permitted by Rule  
14a-6(e)(2))                                                            

[ ] Definitive Proxy Statement                                          

[ ] Definitive Additional Materials                                     

[ ] Soliciting Material Under Rule 14a-12                               

    AMTRAN, 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):                              

[ ] No fee required.                                                    

   [x] 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: 

Common stock, without par value.                            

(2) Aggregate number of securities to which transaction applies:    

          3,191,665 shares of common stock comprising the issued and outstanding
    shares of common stock held by Amtran shareholders other than J.
George Mikelsons as of June 26, 2001.                       

(3) Per unit price or other underlying value of transaction computed
     pursuant to Exchange Act Rule 0-11 (set forth amount on which the
filing fee is calculated and state how it was determined):  

       The amount on which the filing fee was determined by adding (a) the
       product of (i) 3,191,665 shares of common stock and (ii) the merger
        consideration of $23.00 in cash per share, (b) $6,679,002 payable to
        holders of options to purchase shares of common stock outstanding as
        of June 19, 2001 in exchange for cancelation of those options at the
          time of the merger, and (c) $2,201,675, which represents the aggregate
        principal amount of an unsecured note to be delivered in payment for
        shares of Series B preferred stock (assuming the repurchase of 5% of
such shares) at the time of the merger (together, the 'Total
 Consideration'). The payment of the filing fee, calculated in
         accordance with Regulation 240.0-11 under the Securities Exchange Act
        of 1934, as amended, equals one-fiftieth of one percent of the Total
Consideration.                                              

(4) Proposed maximum aggregate value of transaction:                

$82,288,972                                                 

(5) Total fee paid:                                                 

$16,458                                                     

[ ] 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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PRELIMINARY COPY -- SUBJECT TO COMPLETION 

[LOGO]

AMTRAN, INC.                                                                    
7337 West Washington Street                                                     
Indianapolis, Indiana 46231                                                     

                   July [  ], 2001

Dear Shareholder:                                                               

This Notice of Adjourned Annual Meeting and amended and restated proxy  
statement dated July [  ], 2001 is being distributed to you in connection with  
the adjourned annual meeting which will be reconvened at [  ] a.m. on [  ], 2001
and replaces entirely the previously mailed Notice of Annual Meeting of         
Shareholders and proxy statement dated April 16, 2001, for our annual meeting of
shareholders on Tuesday, May 29, 2001. The May 29, 2001 meeting was convened as 
planned and adjourned to a later date, which has been set by the board of       
directors as stated above.                                                      

    As described in the attached proxy statement, at the annual meeting you will
be asked to consider and vote upon the merger of INDUS Acquisition Company      
('INDUS'), an Indiana corporation owned by J. George Mikelsons ('Mikelsons'),   
with and into Amtran, Inc., pursuant to a plan of merger, attached as Exhibit A 
to the Agreement and Plan of Merger dated as of June 18, 2001. The merger       
agreement is attached as Annex A to the accompanying proxy statement. Upon      
consummation of the merger, each outstanding share of our common stock, without 
par value, other than shares owned by us, Mikelsons, INDUS or any affiliate of  
Mikelsons who is not deemed to be an affiliate of Mikelsons by reason of their  
position as an officer or director of Amtran, the 'Mikelsons Affiliates', will  
be converted into the right to receive $23 in cash, without interest, upon valid
surrender of the certificate formerly representing that share. In connection    
with the merger, holders of shares of our common stock and Series B preferred   
stock, without par value, voting as separate classes, will be asked to approve  
a proposal to amend and restate Article XII of our Articles of Incorporation to 
modify the terms of Amtran's Series B preferred stock (the 'ILFC Amendment')    
pursuant to the Purchase and Voting Agreement dated as of May 16, 2001 (the     
'ILFC Agreement'), between International Lease Finance Corporation ('ILFC') and 
us. The ILFC Agreement is attached as Annex B to the accompanying proxy         
statement. Approval of the ILFC Amendment is a condition to the merger.         

YOUR BOARD OF DIRECTORS, ACTING ON THE RECOMMENDATION OF THE SPECIAL    
COMMITTEE (AS DEFINED BELOW) OF AMTRAN, HAS DETERMINED THAT THE TERMS OF THE    
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF AMTRAN AND FAIR TO THE HOLDERS  
OF SHARES OF OUR COMMON STOCK OTHER THAN MIKELSONS AND HIS AFFILIATES. THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE 'FOR' APPROVAL OF THE MERGER, 
THE PLAN OF MERGER, THE MERGER AGREEMENT AND THE ILFC AMENDMENT.                

  Among the factors considered by the special independent director committee
(the 'Special Committee') in evaluating the merger was the opinion dated        
June 18, 2001, of Dresdner Kleinwort Wasserstein, Inc. ('DrKW'), the financial  
advisor to the Special Committee, which states that as of such date, the cash   
consideration to be received by the holders of shares of our common stock other 
than Mikelsons and his affiliates pursuant to the merger is fair to such        
shareholders from a financial point of view. The written opinion of DrKW is     
attached as Annex C to the accompanying proxy statement, and you should read it 
carefully and in its entirety.                                                  

Completion of the merger is subject to certain conditions, including    
approval of the merger, the plan of merger and the merger agreement by the      
affirmative vote of the holders of a majority of the outstanding shares of our  
common stock entitled to vote at the annual meeting, including the affirmative  
vote of the holders of a majority of the outstanding shares voting thereon not  
owned by INDUS, Mikelsons or his affiliates (other than the Mikelsons           
Affiliates) and the approval                                                    

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of the ILFC Amendment by the affirmative vote of the holders of a majority of   
the outstanding shares of our common stock and our Series B preferred stock,    
voting as separate classes.                                                     

    Your board of directors has specified July [  ], 2001 as the new record date
for the purposes of determining the shareholders who are entitled to receive    
notice of and to vote at the Annual Meeting. IN ORDER TO VOTE BY PROXY AT THE   
ANNUAL MEETING, YOU MUST USE THE ENCLOSED YELLOW PROXY CARD TO VOTE AT THE      
ANNUAL MEETING EVEN IF YOU PREVIOUSLY SUBMITTED A BLUE PROXY CARD FOR THE ANNUAL
MEETING SCHEDULED FOR MAY 29, 2001. PLEASE DISREGARD ANY BLUE PROXY CARDS WE    
HAVE PREVIOUSLY SENT YOU. As of June 28, 2001, Mikelsons was the record owner of
8,271,200 shares of common stock (or approximately 72% of the outstanding shares
of our common stock on that date). In addition, other directors and executive   
officers of Amtran beneficially owned 1,299,457 shares of common stock          
consisting of 84,762 shares of common stock (or less than 1% of the outstanding 
shares on that date) and presently exercisable options to purchase 1,214,689    
shares of common stock. To our knowledge, these directors and officers intend to
vote their 84,762 shares of common stock in favor of all items presented at the 
annual meeting.                                                                 

    You will also be asked to vote upon the election of a board of directors for
the ensuing year and until their successors are elected and qualified and upon  
the ratification of Ernst & Young, LLP as independent accountants for the fiscal
year ending December 31, 2001.                                                  

On the following pages, you will find a Notice of the Adjourned Annual  
Meeting and a proxy statement, which provide you with detailed information      
concerning the merger and other matters to be voted upon. We urge you to read   
these materials carefully and request that you promptly complete and return the 
enclosed YELLOW proxy card. If you attend the annual meeting, you may vote in   
person even if you have previously returned your proxy card. Your vote is       
important regardless of the number of shares of our common stock you own.       

              Sincerely,

                                      Board of Directors of Amtran, Inc.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES         
COMMISSION HAS: APPROVED OR DISAPPROVED OF THE MERGER; PASSED UPON THE MERITS OR
FAIRNESS OF THE MERGER; OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE          
DISCLOSURE IN THE ACCOMPANYING AMENDED AND RESTATED PROXY STATEMENT. ANY        
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.                           

THIS AMENDED AND RESTATED PROXY STATEMENT IS DATED JULY [  ], 2001, AND IS BEING
FIRST MAILED TO AMTRAN SHAREHOLDERS ON OR ABOUT JULY [  ], 2001.                

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[Logo]

AMTRAN, INC.                                                                    
7337 West Washington Street                                                     
Indianapolis, Indiana 46231                                                     

NOTICE OF ADJOURNED ANNUAL MEETING OF SHAREHOLDERS

To Holders of shares of common stock and                                        
Series B preferred stock of Amtran, Inc.:                                       

 NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of AMTRAN,
INC., an Indiana corporation, that was adjourned on May 29, 2001, will be       
reconvened and held at our headquarters at 7337 West Washington Street,         
Indianapolis, Indiana, on [  ], 2001, at [    ] a.m., local time), for the      
following purposes:                                                             

  1. To consider and vote upon a proposal to approve the merger, the
Agreement and Plan of Merger dated as of June 18, 2001, between INDUS   
   Acquisition Company ('INDUS'), an Indiana corporation, and Amtran, the plan
of merger attached to the merger agreement, the other transactions      
 contemplated by the merger agreement and the amendment and restatement of
    Article XII of our Articles of Incorporation (the 'ILFC Amendment') pursuant
to the Purchase and Voting Agreement dated as of May 16, 2001, between  
Amtran and International Lease Finance Corporation ('ILFC'). The merger 
    agreement provides, among other things, that in accordance with the relevant
   provisions of the Indiana Business Corporation Law (the 'IBCL'), INDUS will
   be merged with and into Amtran. Following the effective time of the merger,
 Amtran will continue as the surviving corporation. Each share of Amtran's
    common stock, without par value, other than shares owned by Amtran or one of
    its subsidiaries, INDUS, Mikelsons, or any affiliate of Mikelsons who is not
deemed to be an affiliate of Mikelsons by reason of being an officer or 
    director of Amtran will be converted automatically into the right to receive
$23 in cash, without interest, upon valid surrender of the certificate  
   formerly representing that share. Both holders of shares of Amtran's common
 stock and Series B preferred stock, without par value, voting as separate
   classes, are entitled to vote on the ILFC Amendment, which would change the
terms of the Series B preferred stock, all of which is held by ILFC.    
Approval of the ILFC Amendment is a condition to the consummation of the
merger under the merger agreement.                                      

      2. To elect six directors: J. George Mikelsons, John P. Tague, Kenneth
  K. Wolff, James W. Hlavacek, Robert A. Abel and Andrejs P. Stipnieks, each
to serve until the next annual meeting of shareholders.                 

     3. To ratify Ernst & Young, LLP as independent accountants for Amtran
for the fiscal year ending December 31, 2001.                           

  4. To transact such other business as may properly come before the
annual meeting or any adjournments thereof.                             

  The board of directors has specified July [ ], 2001 as the new record date
for the purpose of determining the shareholders who are entitled to receive     
notice of and to vote at the annual meeting. Only holders of record of shares of
our common stock and Series B preferred stock at the close of business on that  
date will be entitled to notice of and to vote at the annual meeting or any     
adjournments thereof.                                                           

Shareholders will not be entitled to dissenters' rights under the IBCL. 

                                       By order of the Board of Directors,

                 BRIAN T. HUNT
             Secretary

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AMENDED AND RESTATED PROXY STATEMENT
SUMMARY TERM SHEET

    This summary term sheet highlights the material terms of the proposed merger
and the related transactions described in this proxy statement but may not      
contain all information that is important to you. We encourage you to read this 
entire document carefully and the documents which are referred to in this       
document. All references in this proxy statement to the 'annual meeting' mean   
the adjourned annual meeting to be held as described in this proxy statement.   

THE PARTIES 

AMTRAN                                                                          

Amtran, Inc., an Indiana corporation, owns American Trans Air, Inc., an 
Indiana corporation which we will refer to as ATA, the tenth largest passenger  
airline in the United States (based on passenger revenue miles) and a leading   
provider of airline services in selected markets. ATA is also the largest       
commercial charter airline in the United States and the largest provider of     
passenger airline services to the United States military, in each case based on 
2000 revenues. For the year ended December 31, 2000, the revenues of ATA        
consisted of 58.3% scheduled service, 19.1% commercial charter service and 14.6%
military charter service, with the balance derived from related services. Amtran
anticipates increasing its emphasis on scheduled service in the future. See 'The
Parties' (page ).                                                               

INDUS                                                                           

 INDUS Acquisition Company, an Indiana corporation, was organized to merge
with us and has not conducted any unrelated activities since its organization   
and will cease to exist after the merger. INDUS is wholly owned by J. George    
Mikelsons, Amtran's founder and majority shareholder. See 'The Parties'         
(page ).                                                                        

MIKELSONS                                                                       

  Mikelsons is the founder and majority shareholder of Amtran. His principal
occupation is as the Chairman of Amtran. He is also the sole shareholder of     
INDUS, the sole member of the board of directors of INDUS and the sole officer  
(Chairman and President) of INDUS. See 'The Parties' (page ) and 'Election of   
Directors -- Nominees' (page ).                                                 

THE ANNUAL MEETING

DATE, PLACE AND TIME                                                            

    The annual meeting will be reconvened at [    ] a.m., local time, on [    ],
2001, at our headquarters, at 7337 West Washington Street, Indianapolis,        
Indiana. See 'The Annual Meeting' (page ).                                      

PURPOSE OF THE ANNUAL MEETING                                                   

At the annual meeting, you will be asked to:                            

 approve the merger between INDUS and us, the plan of merger, the merger
    agreement and the amendment and restatement of Article XII of our Articles
     of Incorporation, which modifies the terms of our Series B preferred stock,
 pursuant to the Purchase and Voting Agreement dated as of May 16, 2001,
   between us and International Lease Finance Corporation ('ILFC'), which we
will refer to as the ILFC amendment;                                  

     vote for the election of directors of Amtran to serve until the next annual
meeting of shareholders; and                                          

  ratify Ernst & Young, LLP as independent accountants for the fiscal year
ending December 31, 2001.                                             

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See 'The Annual Meeting' (page ).                                       

Approval of the ILFC amendment by holders of shares of our common stock and     
Series B preferred stock, voting as separate classes, is a condition to the     
merger.                                                                         

RECORD DATE                                                                     

   Your board of directors has fixed the close of business on July [  ], 2001,
as the new record date for the determination of holders of shares of our common 
stock and Series B preferred stock entitled to notice of the annual meeting and 
entitled to vote at the annual meeting. On the record date, there were [  ]     
shares of our common stock and 300 shares of Series B preferred stock           
outstanding and entitled to vote at the annual meeting. See 'The Annual Meeting'
(page ).                                                                        

VOTE REQUIRED                                                                   

Under the Indiana Business Corporation Law or the merger agreement, the 
following votes are required to approve the matters submitted to the annual     
meeting:                                                                        

APPROVAL OF THE MERGER AND RELATED MATTERS                                      

     the affirmative vote of the holders of a majority of the outstanding shares
   of our common stock entitled to vote at the annual meeting to approve the
  merger, the plan of merger, the merger agreement and the ILFC amendment;
   failures to vote and abstentions will count as votes against these items;

  the holders of a majority of the shares of our common stock not owned by
   INDUS, Mikelsons or any affiliate who is not deemed to be an affiliate of
     Mikelsons by reason of being an officer or director of Amtran voting at the
annual meeting approving the merger, the plan of merger and the merger
   agreement; in this proxy statement we use the term Mikelsons affiliate to
 mean any affiliate of Mikelsons who is not deemed to be an affiliate of
    Mikelsons by reason of being an officer or director of Amtran; failures to
vote and abstentions will have no effect on whether this approval is  
obtained; and                                                         

     the affirmative vote of the holders of a majority of the outstanding shares
     of our Series B preferred stock, voting as a separate class, to approve the
     ILFC amendment; a failure to vote or an abstention by ILFC (the sole holder
 of our Series B preferred stock) would count as a vote against the ILFC
amendment; ILFC has agreed to vote all its shares in favor of the ILFC
amendment and has granted an irrevocable proxy to Kenneth K. Wolff and
   James W. Hlavacek to vote its shares of our Series B preferred stock with
respect to the ILFC amendment.                                        

ELECTION OF DIRECTORS                                                           

     a plurality of the votes cast by holders of shares of common stock entitled
  to vote to elect new directors to serve until the next annual meeting of
   shareholders; failures to vote and abstentions will have no effect on the
    election of directors; Mikelsons, as the owner of approximately 72% of the
outstanding shares of our common stock, has sufficient voting power to
ensure the election of the nominees for director.                     

RATIFICATION OF ERNST & YOUNG                                                   

more votes are cast in favor than are cast against the ratification of
  Ernst & Young, LLP as independent accountants for the fiscal year ending
    December 31, 2001; failures to vote and abstentions will have no effect on
     the ratification of Ernst & Young; Mikelsons, as the owner of approximately
  72% of the outstanding shares of our common stock, has sufficient voting
power to ensure the ratification of Ernst & Young.                    

See 'The Annual Meeting -- Voting Rights; Vote Required' (page ).       

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PROXIES                                                                         

    A new form of proxy card for your use at the annual meeting accompanies this
proxy statement. IN ORDER TO VOTE BY PROXY AT THE ANNUAL MEETING, YOU MUST USE  
THE YELLOW PROXY CARD ENCLOSED WITH THIS PROXY STATEMENT EVEN IF YOU PREVIOUSLY 
SUBMITTED A BLUE PROXY CARD. Please do not use the blue proxy card we sent to   
you previously. All properly executed YELLOW proxy cards that are received prior
to or at the annual meeting and not revoked will be voted at the annual meeting 
in the manner specified. Whether or not you plan to attend in person, you are   
requested to vote, sign, date and promptly return the enclosed YELLOW proxy card
in the envelope provided.                                                       

You may revoke your proxy at any time before it is voted by:            

delivering a written notice of revocation of proxy prior to the annual
 meeting to Brian T. Hunt, Secretary, Amtran, Inc., 7337 West Washington
Street, Indianapolis, Indiana 46231;                                  

   delivering to us a duly executed proxy card bearing a later date prior to
the annual meeting; or                                                

attending the annual meeting and voting in person.                    

If you own your shares of our common stock in 'street name', you should 
follow your broker's instructions concerning how to change your vote.           

SPECIAL FACTORS 

PURPOSE AND STRUCTURE OF THE MERGER                                             

 The purpose of the merger is for Mikelsons to own all the common stock of
Amtran immediately following completion of the merger (other than shares of our 
common stock which may be issued in the future upon exercises of stock options  
or the conversion of shares of our Series B preferred stock). As further        
described in 'Special Factors -- Purpose and Structure of the Merger', Amtran   
and Mikelsons believe that taking Amtran private at this time will allow        
management to focus on the implementation of long-term strategic initiatives.   
Amtran, INDUS and Mikelsons structured this transaction as a cash merger between
Amtran and INDUS in order to achieve this result in a single transaction. See   
'Special Factors -- Purpose and Structure of the Merger' (page ).               

RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS             

   On June 18, 2001, a special independent director committee, consisting of a
member of your board of directors who is not an employee of Amtran or otherwise 
an affiliate of Mikelsons or INDUS, determined that the terms of the merger are 
fair to and in the best interests of Amtran and fair to the holders of shares of
our common stock (other than Mikelsons and his affiliates).                     

    Your board of directors, based on, among other things, the recommendation of
the special committee, unanimously approved the merger, the merger agreement,   
the ILFC agreement and the ILFC amendment and adopted the plan of merger,       
determined that the terms of the merger are fair to and in the best interests of
Amtran and fair to the holders of shares of our common stock (other than        
Mikelsons and his affiliates) and recommended that holders of shares of our     
common stock (including a majority of shares voting at the annual meeting not   
owned by INDUS, Mikelsons or Mikelsons affiliates) approve the merger, the plan 
of merger, the merger agreement and the ILFC amendment. See 'Special            
Factors -- Recommendations of the Special Committee and the Board of Directors' 
(page ).                                                                        

FAIRNESS OF THE MERGER                                                          

 For the reasons set forth in 'Special Factors -- Fairness of the Merger',
the special committee and your board of directors concluded that the terms of   
the merger are fair to and in the best interests of Amtran and fair to the      
holders of shares of our common stock (other than Mikelsons and his affiliates).
See 'Special Factors -- Fairness of the Merger' (page ).                        

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OPINION OF FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE                           

    This summary is not a complete description of the analysis performed by DrKW
and is qualified by reference to the written opinion of DrKW set forth in       
Annex C to this proxy statement.                                                

DrKW, which served as financial advisor to the special committee, has   
delivered a written opinion, dated June 18, 2001, to the special committee that,
as of the date of the opinion and subject to the matters, assumptions and       
limitations set forth in the opinion, the $23 per share cash consideration to be
received by the holders of shares of Amtran common stock other than Mikelsons   
and his affiliates, pursuant to the merger, was fair to such holders from a     
financial point of view.                                                        

    THE FULL TEXT OF THE WRITTEN OPINION OF DRKW DATED JUNE 18, 2001, WHICH SETS
FORTH ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEW        
UNDERTAKEN IN CONNECTION WITH THE OPINION, IS ATTACHED AS ANNEX C TO THIS PROXY 
STATEMENT. THE OPINION OF DRKW, DOES NOT CONSTITUTE A RECOMMENDATION AS TO HOW  
YOU SHOULD VOTE WITH RESPECT TO THE MERGER, THE PLAN OF MERGER AND THE MERGER   
AGREEMENT. YOU SHOULD READ THE OPINION IN ITS ENTIRETY. See 'Special            
Factors -- Opinion of Financial Advisor to the Special Committee' (page ).      

CERTAIN PROJECTED FINANCIAL INFORMATION                                         

    Amtran provided Mikelsons and his advisors and the special committee and its
advisors with certain projected financial information for Amtran for the period 
from 2001 through 2005. See 'Special Factors -- Projections' (page ).           

POSITION OF MIKELSONS AND INDUS REGARDING FAIRNESS OF THE MERGER                

  For the reasons set forth in 'Special Factors -- Position of Mikelsons and
INDUS Regarding Fairness of the Merger', Mikelsons and INDUS believe that the   
terms of the merger are fair to the holders of shares of our common stock (other
than Mikelsons and his affiliates). See 'Special Factors -- Position of         
Mikelsons and INDUS Regarding Fairness of the Merger' (page ).                  

PLANS FOR AMTRAN AFTER THE MERGER                                               

Mikelsons presently intends to continue to own all the common stock of  
Amtran after the merger (other than shares of our common stock which may be     
issued in the future upon exercises of stock options or the conversion of shares
of our Series B preferred stock) and for Amtran to continue to operate as a     
holding company for its operating subsidiaries. See 'Special Factors -- Plans   
for Amtran after the Merger' (page ).                                           

CERTAIN EFFECTS OF THE MERGER                                                   

   Upon consummation of the merger, each share of our common stock (other than
shares owned by us, INDUS, Mikelsons or Mikelsons affiliates) will be canceled  
and converted into the right to receive $23 in cash, without interest. Each     
share of the common stock of INDUS, all of which are owned by Mikelsons, will be
converted in the merger into a share of the common stock of Amtran, as the      
surviving corporation. As a result, Mikelsons will own all the common stock of  
Amtran immediately after the merger. Holders of shares of our common stock      
(other than Mikelsons) will cease to have an ownership interest in Amtran upon  
completion of the merger. Shareholders other than Mikelsons will no longer      
benefit from any increases in our value or bear the risks of any decreases      
in our value. At the time the merger is completed, shares of our common stock   
will be removed from quotation on the Nasdaq Stock Market and will be removed   
from registration under the Securities Exchange Act of 1934, as amended. We     
refer to the Securities Exchange Act of 1934, as amended, as the Exchange Act   
in this proxy statement. See 'Special Factors -- Certain Effects of the Merger' 
(page ).                                                                        

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SOURCE AND AMOUNT OF FUNDS                                                      

The total amount of funds we require to consummate the merger, cash out 
stock options and to pay related fees and expenses is approximately $87 million.
Receipt of financing sufficient to cover these expenses is a condition to the   
merger. Amtran and ATA have entered into a commitment letter dated June 18, 2001
with Citicorp USA, Inc. and Salomon Smith Barney Inc. with respect to a $175    
million secured credit facility, subject to the conditions specified therein.   
Bank One, NA has committed to accept a participation of $87.5 million in the    
syndication of this credit facility and to act as administrative agent under    
this credit facility. A senior unsecured note issued by Amtran with an aggregate
principal amount of approximately $2.2 million will be issued to ILFC to        
repurchase a portion of their shares of Series B preferred stock (assuming we   
elect to repurchase the minimum 5% of those shares required by the ILFC         
Agreement). See 'Special Factors -- Source and Amount of Funds' (page ).        

INTERESTS OF CERTAIN PERSONS IN THE MERGER                                      

    Certain of our directors and executive officers have interests in the merger
which may differ from the interests of holders of Amtran common stock generally.
In particular:                                                                  

 on June 18, 2001, Mikelsons and INDUS entered into a stock subscription
     agreement, pursuant to which Mikelsons will subscribe for and purchase, and
INDUS will issue to Mikelsons, 8,271,200 shares of the common stock,  
without par value, of INDUS, in consideration of the contribution by  
 Mikelsons to INDUS of the 8,271,200 shares of our common stock owned by
him, subject to the conditions specified therein. See 'Special        
Factors -- Interests of Certain Persons in the Merger -- Mikelsons and
INDUS Ownership of Common Stock' (page ).                             

as of June 28, 2001, our executive officers and directors (other than 
Mikelsons) beneficially owned an aggregate of 1,299,457 shares of our 
   common stock consisting of 84,762 shares of common stock (or less than 1%
   of the outstanding shares on that date) and presently exercisable options
    to purchase 1,214,689 shares of common stock. To our knowledge, all of our
executive officers and directors intend to vote their 84,762 shares of
 common stock in favor of all items presented at the annual meeting. See
     'Special Factors -- Interests of Certain Persons in the Merger -- Ownership
of Common Stock by Our Officers and Directors' (page ).               

the restriction period for each restricted share, whether vested or   
unvested, granted under any of our stock plans will expire immediately
prior to the closing of the merger, unless it expired sooner under the
terms of the stock plan. See 'Special Factors -- Interests of Certain 
Persons in the Merger -- Treatment of Restricted Stock' (page ).      

     all unvested stock options issued to our officers and certain stock options
     issued to non-officers automatically vested upon the approval of the merger
by your board of directors.                                           

the compensation committee of your board of directors will adopt a    
   resolution providing that all stock options (other than those held by the
 19 officers whose options will remain outstanding following the merger)
     that are outstanding immediately prior to the closing of the merger will be
     canceled in exchange for a cash payment equal to the excess, if any, of $23
     over the exercise price of those options multiplied by the number of shares
of our common stock covered by those options, and that all outstanding
 stock options with an exercise price in excess of $23 per share will be
   canceled without any cash payment. In the aggregate, our employees (other
    than the 19 officers described in the following paragraph) hold options to
    purchase 585,278 shares of our common stock with an average exercise price
   of $11.59 per share. See 'Special Factors -- Interests of Certain Persons
in the Merger -- Treatment of Stock Options' (page ).                 

  we have agreed in the merger agreement to enter into option modification
   agreements with 19 of our officers providing that these officers will not
 exercise their options prior to the merger and that their stock options
     will remain outstanding following the merger. Under these agreements, these
 officers will agree to not exercise their options except during certain
  limited exercise periods, and then only if certain additional conditions
are satisfied. The first                                              

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  exercise period is scheduled to begin in June 2002. These officers would
also have the right, exercisable during limited periods for five years
following an option exercise, to sell the shares of our common stock  
     received upon that option exercise to us at a price per share determined by
an independent appraiser. See 'Special Factors -- Interests of Certain
Persons in the Merger -- Treatment of Stock Options' (page ).         

     under the merger agreement, we, as the surviving corporation in the merger,
  have agreed to honor all of our obligations to indemnify our current and
    former directors and officers for acts or omissions occurring prior to the
  effective time of the merger whether pursuant to our charter, bylaws, in
individual indemnity agreements or otherwise. In addition, we, as the 
     surviving corporation in the merger, have agreed to maintain directors' and
 officers' liability insurance on behalf of those directors and officers
that are currently covered by our existing directors' and officers'   
liability insurance policies for a period of six years. See 'Special  
     Factors -- Interests of Certain Persons in the Merger -- Indemnification of
Officers and Directors' (page ).                                      

     ILFC has agreed to vote its shares of our Series B preferred stock in favor
 of the ILFC amendment and to modifications to the terms of the Series B
preferred stock making it convertible into shares of our common stock 
 following the merger, and we have agreed to purchase between 5% and 10%
  (with Amtran to determine the amount to be purchased) of their shares of
 Series B preferred stock at a price reflecting the merger consideration
paid to holders of shares of our common stock. We currently expect to 
     purchase 5% of the outstanding shares of Series B preferred stock. The ILFC
  amendment also modifies the redemption and termination of convertibility
 provisions to include a premium equal to the spread between $23 and the
    conversion price and increases the dividend rate on the Series B preferred
    stock upon the completion of the merger. See 'Special Factors -- Interests
of Certain Persons in the Merger -- Proposed ILFC Amendment' (page ). 

     as part of our purchase and voting agreement with ILFC, we have also agreed
    to lease an additional Boeing 737-800 aircraft from ILFC beginning in 2004
   and to pay ILFC an annual fleet consulting fee of $100,000 for four years
  following completion of the merger. See 'Special Factors -- Interests of
Certain Persons in the Merger -- Proposed ILFC Amendment' (page ).    

     under the terms of the plan of merger and the merger agreement, our current
directors (other than William P. Rogers, Jr., who is not standing for 
    re-election at the annual meeting) and officers will also be the directors
and officers of the surviving corporation. See 'Special               
Factors -- Interests of Certain Persons in the Merger -- Interests of 
Certain Directors' (page ).                                           

   Robert A. Abel, the sole member of the special committee, is a partner in
   Blue & Co., LLC, an accounting firm which has provided tax and accounting
     services to us and Mikelsons in 2000. William P. Rogers, Jr., a director of
Amtran, is a partner in Cravath, Swaine & Moore, which is acting as   
Mikelsons' legal advisor in this transaction and has provided legal   
services to us regularly and will continue to do so. See 'Special     
Factors -- Interests of Certain Persons in the Merger -- Interests of 
Certain Directors' (page ).                                           

at Mikelsons' request, Amtran engaged Salomon Smith Barney to act as  
financial advisor to Mikelsons and INDUS. In connection with this     
    engagement, Amtran entered into an indemnity letter agreement with Salomon
   Smith Barney. See 'Special Factors -- Interests of Certain Persons in the
Merger -- Amtran's Engagement of Salomon Smith Barney' (page ).       

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

 If the merger is consummated, the exchange of shares of common stock by a
holder for the merger consideration will be a taxable transaction under the     
Internal Revenue Code of 1986, as amended. The merger will not be a taxable     
transaction for Amtran, INDUS or Mikelsons for United States federal income tax 
purposes. Because of the complexities of the tax laws, you are advised to       
consult your own tax advisors concerning the applicable federal, state, local,  
foreign and                                                                     

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other tax consequences resulting from the merger. See 'Special                  
Factors -- Certain Federal Income Tax Consequences' (page ).                    

SHAREHOLDER LITIGATION RELATING TO THE MERGER                                   

We, along with our directors, have been named in three putative class   
actions, two filed in the state courts of Indiana and one in federal district   
court in Indiana. The plaintiffs in these lawsuits allege that we and our       
directors have breached and are breaching their fiduciary duties to the public  
shareholders of Amtran common stock. These plaintiffs seek, among other things, 
declaratory and injunctive relief. We have entered into a memorandum of         
understanding with each of the plaintiffs, subject to certain conditions,       
including court approval, providing for the settlement of the lawsuits described
above. See 'Special Factors -- Shareholder Litigation Relating to the Merger'   
(page ).                                                                        

METHOD OF ACCOUNTING                                                            

The merger will be accounted for as a purchase of INDUS by Amtran. See  
'Special Factors -- Method of Accounting' (page ).                              

REGULATORY AND OTHER APPROVALS                                                  

The only U.S. federal or state regulatory requirements applicable to the
merger and the ILFC amendment are the giving of notice of the merger to the U.S.
Department of Transportation and the filing of articles of merger and articles  
of amendment with the Secretary of State of Indiana. See 'Special               
Factors -- Regulatory and Other Approvals' (page ).                             

THE MERGER AGREEMENT

THE MERGER                                                                      

   Under the merger agreement, INDUS will be merged with and into Amtran, with
Amtran as the surviving corporation. As a result of the merger, Mikelsons will  
own all the outstanding shares of our common stock and each share of our common 
stock outstanding at the time the merger is complied, other than shares held by 
us and our subsidiaries, INDUS, Mikelsons or Mikelsons affiliates, will be      
converted automatically into the right to receive $23 per share in cash, without
interest. See 'The Merger Agreement -- The Merger' (page ).                     

SURRENDER OF CERTIFICATES                                                       

    We, as the surviving corporation in the merger, will deposit with the paying
agent, National City Bank, an amount of cash sufficient to pay our former       
shareholders $23 per share of our common stock upon valid surrenders of share   
certificates. After completion of the merger, National City Bank will send to   
each shareholder of record at the time of the merger a letter of transmittal and
detailed instructions specifying the procedures for surrendering share          
certificates. YOU SHOULD NOT SEND YOUR SHARE CERTIFICATES TO AMTRAN. YOU SHOULD 
NOT SEND SHARE CERTIFICATES TO NATIONAL CITY BANK UNTIL YOU RECEIVE A LETTER OF 
TRANSMITTAL. Upon the valid surrender of a share certificate, National City Bank
will issue to the surrendering holder a check representing an amount of cash    
equal to $23 per share of our common stock formerly represented by the share    
certificates surrendered to National City Bank. See 'The Merger                 
Agreement -- Payment for Shares; Procedures for Surrender of Certificates'      
(page ).                                                                        

CONDITIONS TO THE MERGER                                                        

Consummation of the merger is subject to the following conditions:      

  approval of the merger, the plan of merger, the merger agreement and the
   ILFC amendment by the holders of a majority of the shares of common stock
outstanding and entitled to vote at the annual meeting;               

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    approval of the merger, the plan of merger and the merger agreement by the
   holders of a majority of the outstanding shares of common stock voting at
   the annual meeting not owned by INDUS, Mikelsons or Mikelsons affiliates;

   approval of the ILFC amendment by the holders of a majority of the shares
    of Series B preferred stock outstanding and entitled to vote at the annual
meeting;                                                              

that there is no temporary restraining order, preliminary or permanent
    injunction or other order issued by any court of competent jurisdiction or
 other legal restraint or prohibition preventing the consummation of the
  merger; prior to asserting this condition the parties must have used all
  reasonable best efforts to prevent the entry of that injunction or other
  order and to appeal as promptly as possible any such injunction or other
order that may be entered;                                            

   the absence of any pending suit, action or proceeding by any governmental
    entity, which has a substantial likelihood of success, (i) challenging the
acquisition by INDUS or Mikelsons of any shares of our common stock,  
     seeking to restrain or prohibit the consummation of the merger or any other
  transaction contemplated under the merger agreement or seeking to obtain
  from us, INDUS or Mikelsons any damages that are material in relation to
   Amtran and its subsidiaries taken as a whole, (ii) seeking to prohibit or
  limit the ownership or operation by us or any of our subsidiaries of any
  material portion of our business or assets or to compel us or any of our
 subsidiaries to dispose of or hold separate any material portion of our
business or assets as a result of the merger or any other transaction 
   contemplated under the merger agreement, (iii) seeking to impose material
 limitations on the ability of INDUS or Mikelsons to acquire or hold, or
exercise full rights of ownership of, any shares of our common stock, 
     including the right to vote their shares of our common stock on all matters
properly presented to our shareholders or (iv) seeking to prohibit    
     Mikelsons from effectively controlling in any material respect the business
or operations of Amtran and its subsidiaries;                         

     the absence of any event since the date of the merger agreement which would
   have a material adverse effect on Amtran and its subsidiaries, taken as a
whole;                                                                

ATA receiving the financing contemplated by the commitment letter on  
substantially the terms and conditions contemplated by the commitment 
letter;                                                               

   the correctness of all representations and warranties of Amtran and INDUS
    which are qualified as to materiality (and the correctness in all material
  respects of representations and warranties of Amtran and INDUS which are
     not qualified as to materiality) as of the date of the merger agreement and
the date of the closing of the merger; and                            

  the compliance in all material respects with their obligations under the
merger agreement by Amtran and INDUS.                                 

See 'The Merger Agreement -- Conditions to the Closing of the Merger'   
(page ).                                                                        

TERMINATION                                                                     

The merger agreement may be terminated, among other things:             

     by either party if the merger is not completed by October 31, 2001, and the
    party seeking to terminate is not in material breach (excluding any breach
by us without the consent of the special committee);                  

by either party, for a breach of representations and warranties or the
failure to perform in all material respects by the other party, which 
breach is not or cannot be cured within 30 days after notice by the   
non-breaching party (excluding certain breaches by Amtran which are   
    inconsistent with or contrary to the direction of the special committee or
taken at the direction of Mikelsons or Miklesons affiliates);         

by INDUS, if the special committee or the Amtran board of directors   
withdraws or modifies, or proposes to withdraw or modify, its         
recommendation; or                                                    

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by either party, if the required shareholder approval is not obtained.

Amtran may only teminate the merger agreement at the direction of the   
special committee.                                                              

See 'The Merger Agreement -- Termination' (page ).                      

DISSENTERS' RIGHTS                                                              

Under Indiana law, because shares of our common stock are quoted on the 
Nasdaq Stock Market, shareholders are not entitled to dissenters' rights in     
connection with the merger. See 'Dissenters' Rights' (page ).                   

RECENT MARKET PRICE INFORMATION 

  Shares of our common stock are quoted on the Nasdaq Stock Market under the
ticker symbol 'AMTR'. On May 16, 2001, the last trading day before the public   
announcement of the delivery of Mikelsons' proposal to the board of directors,  
the reported closing price for shares of our common stock was $12.60 per share. 
On June 18, 2001, the last trading day before the public announcement of the    
execution of the merger agreement, the reported closing price for shares of our 
common stock was $18.09 per share. On June 28, 2001, the last trading day prior 
to the date of this proxy statement, the reported closing price for shares of   
our common stock was $21.92 per share. See 'Market Price and Dividend           
Information' (page ).                                                           

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AMENDED AND RESTATED PROXY STATEMENT

TABLE OF CONTENTS 

                                                                [Download Table]
                                                                 
AMENDED AND RESTATED PROXY STATEMENT SUMMARY TERM SHEET.....    i
    The Parties.............................................    i
    The Annual Meeting......................................    i
    Special Factors.........................................  iii
    The Merger Agreement....................................  vii
    Recent Market Price Information.........................   ix
QUESTIONS AND ANSWERS ABOUT THE MERGER......................    1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING                  
  INFORMATION...............................................    3
THE ANNUAL MEETING..........................................    4
    Date, Place and Time....................................    4
    Purpose of the Annual Meeting...........................    4
    Record Date; Quorum.....................................    4
    Voting Rights; Vote Required............................    4
    Proxies.................................................    5
    Solicitation of Proxies.................................    5
SPECIAL FACTORS.............................................    6
    Background of the Merger................................    6
    Purpose and Structure of the Merger.....................   14
    The Special Committee...................................   15
    Recommendations of the Special Committee and Board of        
     Directors..............................................   15
    Fairness of the Merger..................................   16
    Opinion of Financial Advisor to the Special Committee...   20
    Position of Mikelsons and INDUS Regarding Fairness of        
     the Merger.............................................   28
    Projections.............................................   30
    Plans for Amtran after the Merger.......................   32
    Certain Effects of the Merger...........................   33
    Source and Amount of Funds..............................   34
    Certain Federal Income Tax Consequences.................   35
    Shareholder Litigation Relating to the Merger...........   35
    Method of Accounting....................................   36
    Regulatory and Other Approvals..........................   36
    Interests of Certain Persons in the Merger..............   36
THE PARTIES.................................................   39
    Amtran..................................................   39
    INDUS...................................................   40
    Mikelsons...............................................   40
THE MERGER AGREEMENT........................................   41
    The Merger..............................................   41
    What You Will Receive in the Merger.....................   41
    Effective Time of the Merger............................   41
    Payment for Shares; Procedures for Surrender of              
     Certificates...........................................   42
    Treatment of Stock Options..............................   42
    Representations and Warranties..........................   43
    Interim Operations Pending Completion of the Merger.....   44
    Withdrawal or Modification of Recommendation............   45
    Expenses................................................   45
    Additional Covenants....................................   45
    Conditions to the Closing of the Merger.................   45
    Termination.............................................   47
    Amendment; Waiver.......................................   48

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                                                                [Download Table]
                                                                 
    Provisions for Unaffiliated Security Holders............   48
DISSENTERS' RIGHTS..........................................   48
SUMMARY FINANCIAL DATA......................................   49
MARKET PRICE AND DIVIDEND INFORMATION.......................   50
PRIOR STOCK PURCHASES BY AMTRAN.............................   50
ESTIMATED FEES AND EXPENSES OF THE MERGER...................   50
ELECTION OF DIRECTORS.......................................   51
    General.................................................   51
    Nominees................................................   51
    Information Concerning the Board of Directors...........   52
    Compensation of Directors...............................   53
    Section 16(a) Beneficial Ownership Reporting                 
     Compliance.............................................   53
    Certain Relationships and Related Party Transactions in      
     2000...................................................   53
EXECUTIVE COMPENSATION AND STOCK OPTIONS....................   54
    Report of Compensation Committee on Executive                
     Compensation...........................................   54
    Summary of Cash and Certain Other Compensation..........   56
RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT                 
  ACCOUNTANTS...............................................   60
    General.................................................   60
    Audit Fees..............................................   60
    Financial Information Systems Design and Implementation      
     Fees...................................................   60
    Other Fees..............................................   60
    Other Matters...........................................   60
    Report of the Audit Committee...........................   60
STOCK OWNERSHIP.............................................   62
    Security Ownership of Certain Beneficial Owners and          
     Management.............................................   62
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING...............   62
OTHER MATTERS...............................................   63
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............   63
WHERE YOU CAN FIND MORE INFORMATION.........................   63
Annex A.....................................................     
    Agreement and Plan of Merger............................  A-1
Annex B.....................................................  B-1
    ILFC Agreement..........................................     
Annex C.....................................................  C-1
    Form of Opinion of Dresdner Kleinwort Wasserstein,           
     Inc....................................................     
Annex D.....................................................  D-1
    Audit Committee Charter.................................     

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following questions and answers are intended to address briefly some
commonly asked questions regarding the merger. These questions and answers may  
not address all questions that may be important to you as an Amtran shareholder.
Please refer to the more detailed information contained elsewhere in this proxy 
statement, the appendices to this proxy statement and the documents referred to 
or incorporated by reference in this proxy statement.                           

Q: WHAT IS THE PROPOSED TRANSACTION?                                            

A: J. George Mikelsons, founder, Chairman and 72% shareholder of Amtran, is     
proposing to acquire all the common stock of Amtran that he does not      
currently own through a merger between INDUS and Amtran. If the merger is 
   completed, you will be entitled to receive $23 in cash, without interest, for
 each share of our common stock that you own on the date of the merger. As a
result of the merger, Mikelsons will become the sole common shareholder of
 Amtran. As of June 28, 2001, Mikelsons owned 8,271,200 shares of our common
 stock, which represented approximately 72% of the outstanding shares of our
common stock on that date.                                                

Q: WHAT IS MY BOARD OF DIRECTORS' VIEW REGARDING THE MERGER?                    

A: Your board of directors, acting on the recommendation of a special           
independent director committee of your board of directors, has determined 
  that the terms of the merger are fair to and in the best interests of Amtran
 and fair to the holders of shares of our common stock (other than Mikelsons
  and his affiliates). Your board of directors unanimously recommends that you
   vote for approval of the merger, the plan of merger, the merger agreement and
the ILFC amendment.                                                       

Q: WHY ARE THE SPECIAL COMMITTEE AND MY BOARD OF DIRECTORS RECOMMENDING THE     
MERGER, THE PLAN OF MERGER, THE MERGER AGREEMENT AND THE ILFC AMENDMENT?  

A: The special committee and board of directors believe that the merger is fair 
 to and in the best interests of Amtran and fair to the holders of shares of
our common stock (other than Mikelsons and his affiliates). The special   
   committee received an opinion from Dresdner Kleinwort Wasserstein, Inc. that,
   as of June 18, 2001, based on and subject to the limitations set forth in its
opinion, the $23 in cash per share to be received by holders of shares of 
Amtran common stock (other than Mikelsons and his affiliates) was fair to 
   those holders from a financial point of view. The special committee's reasons
for recommending the merger to your board of directors and your board of  
directors' reasons for recommending approval of the merger, the plan of   
merger, the merger agreement and the ILFC amendment are contained on pages
through of this proxy statement.                                          

Q: IF THE MERGER IS COMPLETED, WHAT WILL I RECEIVE FOR MY SHARES OF AMTRAN      
COMMON STOCK?                                                             

A: You will receive $23 in cash, without interest, for each share of our common 
 stock you own at the time of the merger, upon valid surrender of your share
certificates.                                                             

Q: WHEN IS THE MERGER EXPECTED TO BE COMPLETED?                                 

A: Assuming that ATA is able to obtain the financing to pay the merger          
   consideration and the other conditions to the merger are met at that time, we
expect to close the transaction in the third quarter of 2001.             

Q: FOLLOWING THE TRANSACTION, WILL AMTRAN CONTINUE AS A PUBLIC COMPANY?         

A: No. After the merger takes place, Mikelsons will own all the common stock of 
   Amtran. Shares of our common stock will no longer be eligible to be quoted on
the Nasdaq Stock Market; however, Amtran will continue to make certain    
filings with the Securities and Exchange Commission as required under its 
indentures. Holders of our Series A1 preferred stock, Boeing Capital      
  Corporation, and Series B preferred stock, ILFC, will continue to hold their
 interests in Amtran. In addition, Amtran and its subsidiaries will continue
to have certain classes of debt securities that are publicly held.        

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Q. WHAT DO I NEED TO DO NOW?                                                    

A. After carefully reading and considering the information contained in this    
proxy statement, please vote your shares of Amtran common stock as soon as
   possible. You may vote your shares (1) by returning the enclosed YELLOW proxy
 card or (2) by voting in person at the annual meeting of shareholders. Even
if you previously submitted a blue proxy card, you will need to submit the
enclosed YELLOW proxy card to vote by proxy at the annual meeting.        

Q. WHAT SHOULD I DO WITH THE BLUE PROXY CARD YOU SENT ME PREVIOUSLY?            

A. Please discard the blue proxy card we sent you previously. You may not use   
blue proxy cards to vote at the annual meeting.                           

Q. IF MY SHARES OF AMTRAN COMMON STOCK ARE HELD FOR ME BY MY BROKER, WILL MY    
BROKER VOTE THOSE SHARES FOR ME?                                          

A. Your broker will vote your shares only if you provide instructions to your   
broker on how to vote. You should instruct your broker on how to vote your
Amtran shares, using the instructions provided by your broker.            

Q. CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY PROXY CARD?                      

A. Yes. You can change your vote at any time before your proxy is voted at the  
annual meeting. You may revoke your proxy by notifying the Secretary of   
 Amtran in writing or by submitting a new YELLOW proxy card, in either case,
  dated after the date of the proxy being revoked. In addition, you may revoke
your proxy by attending the annual meeting and voting in person. However, 
simply attending the annual meeting without voting will not revoke your   
 proxy. If you have instructed a broker to vote your shares, you must follow
the instructions received from your broker to change your vote.           

Q. DO I NEED TO ATTEND THE ANNUAL MEETING IN PERSON?                            

A. No. It is not necessary for you to attend the annual meeting in order to vote
your Amtran shares.                                                       

Q. SHOULD I SEND IN MY AMTRAN SHARE CERTIFICATES NOW?                           

A. No. After the merger is completed, National City Bank will send you written  
instructions for exchanging your Amtran share certificates for the merger 
 consideration, which will include procedures for the electronic delivery of
shares.                                                                   

Q. WILL I OWE TAXES AS A RESULT OF THE MERGER?                                  

A. The merger will be a taxable transaction for holders of shares of Amtran     
   common stock. As a result, the cash you receive in the merger for your shares
of Amtran common stock will be subject to United States federal income tax
 and also may be taxed under applicable state, local, and other tax laws. In
general, you will recognize gain or loss equal to the difference between  
(1) the amount of cash you receive and (2) the tax basis of your shares of
Amtran common stock. Refer to the section entitled 'Special               
Factors -- Certain Federal Income Tax Consequences' on pages and of this  
proxy statement for a more detailed explanation of the tax consequences of
the merger. You should consult your tax advisor on how specific tax       
consequences of the merger apply to you.                                  

Q. WHAT OTHER MATTERS WILL BE VOTED ON AT THE ANNUAL MEETING?                   

A. You also will be asked to vote on the election of six directors and the      
  ratification of Ernst & Young, LLP as independent accountants for the fiscal
year ending December 31, 2001.                                            

Q. WHERE CAN I FIND MORE INFORMATION ABOUT AMTRAN?                              

A. Amtran files periodic reports and other information with the Securities and  
   Exchange Commission. You may read and copy this information at the Securities
and Exchange Commission's public reference facilities. Please call the    
Securities and Exchange Commission at 1-800-SEC-0330 for information about
   these facilities. This information is also available at the offices of Nasdaq
   and at the Internet site maintained by the Securities and Exchange Commission
at http://www.sec.gov. For a more detailed description of the information 
available, please see page of this proxy statement.                       

Q. WHO CAN HELP ANSWER MY QUESTIONS?                                            

A. If you have questions about the merger after reading this proxy statement or 
need assistance in voting your shares, you should contact our proxy       
solicitor, [    ] at [    ].                                              

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CAUTIONARY STATEMENT CONCERNING 
FORWARD-LOOKING INFORMATION 

 This proxy statement, including through the incorporation by reference of
certain documents filed, and other statements made, from time to time by Amtran 
and INDUS, or their respective affiliates or representatives, contains certain  
'forward-looking statements' within the meaning of the Private Securities       
Litigation Reform Act of 1995. These statements are based on Amtran management's
current expectations and are naturally subject to uncertainty and changes in    
circumstances. Actual results may vary materially from the expectations         
contained herein. The forward-looking statements contained herein include       
statements about the proposed transaction. The following factors, among others, 
could cause actual results to differ materially from those described herein: the
inability to obtain financing to pay the proposed transaction consideration; the
costs related to the proposed transaction; litigation challenging the proposed  
transaction; and other economic, business, competitive and/or regulatory factors
affecting Amtran's businesses generally. More detailed information about those  
factors is set forth in filings made by Amtran with the Securities and Exchange 
Commission (the 'SEC'). Amtran and INDUS are not under any obligation to (and   
expressly disclaim any such obligation to) update or alter their forward-       
looking statements whether as a result of new information, future events or     
otherwise.                                                                      

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THE ANNUAL MEETING

DATE, PLACE AND TIME                                                            

   The annual meeting of shareholders of Amtran which was previously adjourned
on May 29, 2001, is scheduled to be reconvened as follows:                      

    July [ ], 2001
7337 West Washington Street 
Indianapolis, Indiana 
[    ] a.m., local time 

PURPOSE OF THE ANNUAL MEETING                                                   

At the annual meeting our shareholders will consider and vote on the    
following matters:                                                              

      the merger between INDUS and Amtran, the plan of merger, attached as
     Exhibit A to the merger agreement, the Agreement and Plan of Merger
       dated as of June 18, 2001 between INDUS Acquisition Company ('INDUS')
   and Amtran and an amendment and restatement of Article XII of our
    Articles of Incorporation to modify the terms of Amtran's Series B
   preferred stock (the 'ILFC Amendment') held by ILFC pursuant to a
       Purchase and Voting Agreement dated as of May 16, 2001 between Amtran
and ILFC (the 'ILFC Agreement');                              

         the election of six directors to the Amtran board of directors to serve
until the next annual meeting; and                            

       the ratification of Ernst & Young, LLP as independent accountants for
    the fiscal year ending December 31, 2001 and to transact any other
    business that is properly brought before the annual meeting or any
adjournment thereof.                                          

RECORD DATE; QUORUM                                                             

  Your board of directors has set the close of business on July [ ], 2001 as
the new record date (the 'Record Date') for determining shareholders entitled to
notice of and to vote at the annual meeting. The presence, in person or by      
proxy, of a majority of the outstanding shares of our common stock at the annual
meeting is required to constitute a quorum for transaction of business at the   
annual meeting. At the close of business on the Record Date, there were [INSERT 
NUMBER] shares of our common stock outstanding (inclusive of [INSERT NUMBER]    
treasury shares), held by approximately [INSERT NUMBER] holders of record and   
there were 300 shares of our Series B preferred stock outstanding held by ILFC, 
the sole holder of record.                                                      

VOTING RIGHTS; VOTE REQUIRED                                                    

Holders of shares of our common stock are entitled to one vote for each 
share of our common stock that they owned on the Record Date.                   

Under the Indiana Business Corporation Law (the 'IBCL') or the merger   
agreement, the following votes will be required to approve matters submitted to 
the annual meeting:                                                             

Approval of the merger and related matters                                      

      the affirmative vote of the holders of a majority of the outstanding
      shares of our common stock entitled to vote at the annual meeting to
      approve the merger, the plan of merger, the merger agreement and the
      ILFC Amendment; failures to vote and abstentions will count as votes
against these items;                                          

       the holders of a majority of the shares of our common stock not owned
  by INDUS, Mikelsons or Mikelsons affiliates voting at the annual
 meeting approving the merger, the plan of merger and the merger
    agreement; failures to vote and abstentions will have no effect on
whether this approval is obtained; and                        

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      the affirmative vote of the holders of a majority of the outstanding
        shares of our Series B preferred stock, voting as a separate class, to
        approve the ILFC Amendment; a failure to vote or an abstention by ILFC
       (as the sole holder of our Series B preferred stock) would count as a
      vote against the ILFC Amendment; ILFC has agreed to vote in favor of
       the ILFC Amendment and has granted an irrevocable proxy to Kenneth K.
      Wolff and James W. Hlavacek to vote its shares of Series B preferred
stock with respect to the ILFC Amendment.                     

Election of directors                                                           

    a plurality of the votes cast by holders of shares of common stock
        entitled to vote at the annual meeting to elect new directors to serve
     until the next annual meeting of shareholders; failures to vote and
abstentions will have no effect on the election of directors; 
        Mikelsons, as the owner of approximately 72% of the outstanding shares
         of our common stock, has sufficient voting power to ensure the election
of the six nominees for director.                             

Ratification of Ernst & Young                                                   

        more votes are cast in favor than are cast against the ratification of
   Ernst & Young, LLP as independent accountants for the fiscal year
         ending December 31, 2001; failures to vote and abstentions will have no
         effect on the ratification of Ernst & Young; Mikelsons, as the owner of
      approximately 72% of the outstanding shares of our common stock, has
      sufficient voting power to ensure the ratification of Ernst & Young.

PROXIES                                                                         

    A new form of proxy card for your use at the annual meeting accompanies this
proxy statement. In order to vote by proxy at the annual meeting, you must use  
the YELLOW proxy card enclosed with this proxy statement, even if you previously
submitted a blue proxy card. Please discard any blue proxy card we sent you     
previously. You may not use blue proxy cards to vote at the annual meeting. All 
properly executed YELLOW proxy cards that are received prior to or at the annual
meeting and not revoked will be voted at the annual meeting in the manner       
specified. Whether or not you plan to attend in person, you are requested to    
vote, sign, date and promptly return the enclosed proxy card in the envelope    
provided.                                                                       

You may revoke your proxy at any time before it is voted by:            

        delivering a written notice of revocation of proxy prior to the annual
         meeting to Brian T. Hunt, Secretary, Amtran, Inc., 7337 West Washington
Street, Indianapolis, Indiana 46231;                          

         delivering to us a duly executed YELLOW proxy card bearing a later date
prior to the annual meeting; or                               

attending the annual meeting and voting in person.            

   However, simply attending the annual meeting without voting will not revoke
your proxy.                                                                     

If you own your shares of our common stock in 'street name', you should 
follow your broker's instructions concerning how to change your vote.           

    YOU SHOULD NOT SEND ANY SHARE CERTIFICATES WITH YOUR PROXY CARD. A LETTER OF
TRANSMITTAL WITH INSTRUCTIONS FOR THE SURRENDER OF YOUR SHARE CERTIFICATES WILL 
BE MAILED TO YOU AS SOON AS PRACTICABLE AFTER COMPLETION OF THE MERGER.         

SOLICITATION OF PROXIES                                                         

We will bear the cost of the solicitation of proxies. In addition to    
solicitation by mail, our directors, officers and employees may solicit proxies 
from shareholders by telephone, facsimile, telegram or in person. Arrangements  
will also be made with brokerage houses and other custodians, nominees and      
fiduciaries for the forwarding of solicitation material to the beneficial owners
of shares of our common stock held of record by these persons, and we will      
reimburse these custodians, nominees and fiduciaries for their reasonable       
out-of-pocket expenses upon request. We have retained [    ] to coordinate the  
solicitation of proxies for a fee of $[     ].                                  

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SPECIAL FACTORS 

BACKGROUND OF THE MERGER                                                        

  Amtran offered shares of its common stock to the public in 1993 at a price
of $16 per share. From time to time since its public offering, Mikelsons and    
Amtran have considered possible strategic alternatives to remaining a public    
company with Mikelsons as the majority shareholder.                             

During 1998, Amtran engaged Salomon Smith Barney to assist Amtran in a  
review of its strategic alternatives. As part of this process, a number of      
members of the airline industry were contacted with respect to their interest in
a possible strategic transaction with Amtran. This process led another airline  
company (the 'industry buyer') to initiate discussions beginning in December    
1998 with respect to a possible acquisition of Amtran. Those discussions        
continued intermittently through the first three fiscal quarters of 1999. In    
April 1999, Amtran and the industry buyer entered into a confidentiality        
agreement (including a 2-year standstill) and the industry buyer, together with 
its financial advisors, engaged in a due diligence review of Amtran throughout  
the summer of 1999. The discussions with the industry buyer involved a possible 
acquisition of Amtran for stock or a mix of cash and stock. In the third quarter
of 1999, the industry buyer withdrew from discussions as a result of the decline
in airline industry conditions, as well as a decline in the financial prospects 
of the industry buyer and Amtran and the trading prices of the industry buyer's 
common stock.                                                                   

 While the discussions with the industry buyer were taking place and after
obtaining the consent of the Amtran board of directors, John P. Tague, President
and Chief Executive Officer and a director of Amtran, Kenneth K. Wolff,         
Executive Vice President and Chief Financial Officer and a director of Amtran,  
and James W. Hlavacek, Executive Vice President and Chief Operating Officer and 
a director of Amtran, engaged a second financial advisor to identify potential  
financial sponsors to participate with management in a leveraged buy-out of     
Amtran. As a result of this process, Amtran senior management began preliminary 
discussions with a private equity fund (the 'financial buyer') in the spring of 
1999. On May 28, 1999, Amtran entered into a confidentiality agreement          
(including a 2-year standstill) with the financial buyer. During the second and 
third quarters of 1999, the financial buyer made several indicative proposals,  
each of which was subject to numerous conditions, for leveraged recapitalization
transactions involving Amtran. In the fall of 1999, discussions between Amtran  
and the financial buyer ended.                                                  

 After discussions with the financial buyer commenced, the Amtran board of
directors formed a special committee (composed of Robert A. Abel) to consider   
possible strategic alternatives available to Amtran, including possible         
transactions with the industry buyer and the financial buyer.                   

In February 2000, discussions with the financial buyer restarted when a 
representative of the financial buyer contacted Mr. Tague. Thereafter, members  
of Amtran senior management worked with the financial buyer to prepare a revised
leveraged recapitalization proposal. In March 2000, the financial buyer         
submitted an indicative proposal for a leveraged recapitalization in which all  
holders of shares of Amtran common stock would receive $25 per share in cash for
96% of their shares and would retain 4% of their shares of common stock as a    
continuing interest in Amtran. This indicative proposal was subject to numerous 
substantive conditions, including satisfactory completion of a due diligence    
review of Amtran's business. Over the next several months, Amtran senior        
management, representatives of Salomon Smith Barney and Cravath, Swaine & Moore 
engaged in extensive discussions with representatives of the financial buyer    
regarding the terms and structure of this proposal.                             

 In response to the proposal from the financial buyer, at the direction of
Mikelsons, a representative of Salomon Smith Barney contacted several other     
airlines regarding their possible interest in a transaction with Amtran.        
Discussions with the industry buyer were reinitiated during this period but were
terminated shortly thereafter. On May 27, 2000, Mikelsons discussed a possible  
transaction with Amtran with executives of another airline. None of these       
inquiries resulted in proposals.                                                

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On May 30, 2000, Amtran entered into an exclusivity agreement with the  
financial buyer providing for a one-month exclusivity period, subject to        
extension by the parties. During the exclusivity period, the financial buyer    
engaged in extensive due diligence on Amtran and met regularly with members of  
Amtran senior management. In July 2000, representatives of the financial buyer  
and Amtran senior management presented the March 2000 proposal to the credit    
rating agencies. In response to concerns raised by the rating agencies, the     
financial buyer made a revised indicative proposal, subject to a number of      
substantive conditions, in which all holders of shares of Amtran common stock   
would have received $21 per share in cash and $3 in principal amount of         
subordinated notes for 96% of their shares of Amtran common stock and would have
retained 4% of their shares of Amtran common stock. After negotiations regarding
this proposal, the financial buyer further revised its indicative proposal to   
$21 per share in cash and preferred stock with a liquidation amount of $3 per   
share for 96% of the outstanding shares of Amtran common stock. After           
considering this revised proposal from the financial buyer, in September 2000,  
Mikelsons informed the financial buyer that he was not interested in            
participating in the proposed recapitalization transaction. Following this      
decision, Amtran and the special committee ended discussions with the financial 
buyer.                                                                          

After the negotiations with the financial buyer ended, Amtran increased 
market repurchases of shares of Amtran common stock. Beginning in late December 
2000, Messrs. Mikelsons and Tague discussed the possibility of a transaction in 
which Amtran would be taken private. On January 8, 2001, Mr. Tague contacted a  
representative of Salomon Smith Barney to request a meeting to discuss a        
possible transaction to take Amtran private. On January 12, 2001, Messrs.       
Mikelsons, Tague and Wolff met with representatives of Salomon Smith Barney and 
Citicorp USA, Inc. to discuss whether such a transaction would be feasible given
industry conditions. During the several weeks following this meeting, Messrs.   
Mikelsons, Tague and Wolff communicated with representatives of Salomon Smith   
Barney and Citicorp regarding the possible structure and financing of this type 
of transaction. Due to the possibility of a going-private transaction, Amtran   
senior management suspended stock repurchases on January 8, 2001.               

On January 25, 2001, William P. Rogers, Jr., a partner at Cravath, and a
director of Amtran, was contacted by senior officers of Amtran regarding a      
possible going private transaction. Representatives of Salomon Smith Barney and 
Cravath (including Mr. Rogers) also discussed with Messrs. Tague and Wolff the  
possible structures and the timing of such a transaction. On January 26, 2001,  
Mr. Rogers contacted Benjamin Stapleton of Sullivan & Cromwell ('S&C'), who had 
represented the previously formed special committee, to inform him that another 
special committee might be needed.                                              

   During the following month, Messrs. Mikelsons, Tague and Wolff participated
in a number of conference calls and meetings with Mr. Rogers and other attorneys
at Cravath regarding possible structures for a transaction, the limitations on  
restricted payments contained in Amtran's indentures and the impact of the      
proposed transaction on the outstanding shares of Series B preferred stock,     
which are convertible into shares of common stock, held by ILFC. Messrs. Tague  
and Wolff also discussed with Mr. Rogers and other attorneys at Cravath the     
effect of the proposed transaction on Amtran's stock options and discussed      
possible structures in which stock options held by Amtran's senior officers     
could remain outstanding instead of being cashed out. During the same period,   
members of Amtran's strategic planning department discussed with representatives
of Salomon Smith Barney and Citicorp a draft of a 5-year business plan that     
Amtran's senior officers had produced and the financial model underlying that   
plan. During February and early March, 2001, Messrs. Tague and Wolff began      
negotiations (via telephone conference and in person) with Salomon Smith Barney 
and Citicorp regarding the financing terms for a possible transaction.          

 In early February 2001, Mr. Wolff contacted another financial institution
(the 'alternative financial advisor') about providing financing and advisory    
services with respect to the possible transaction. On several occasions during  
March 2001, the alternative financial advisor discussed the financing and       
structure of the possible transaction with representatives of Cravath (including
Mr. Rogers) and Amtran senior management. Representatives of the alternative    
financial advisor also discussed possible financing terms with Mr. Wolff and    
representatives of Cravath (including                                           

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Mr. Rogers) throughout March and April 2001. Mikelsons also continued to pursue 
negotiations with representatives of Salomon Smith Barney and Citicorp regarding
the terms and conditions of a commitment letter.                                

   Beginning in the last week of March 2001, a representative of the financial
buyer placed telephone calls to Messrs. Mikelsons and Tague and representatives 
of Salomon Smith Barney. On April 2, 2001, a representative of the financial    
buyer sent a letter to Mikelsons, with a copy to Salomon Smith Barney,          
expressing continued interest in a transaction involving Amtran. This letter was
discussed at a meeting on April 3, 2001, among Messrs. Tague and Wolff and      
representatives of Salomon Smith Barney and Cravath (including Mr. Rogers).     
Negotiations over the terms of Salomon Smith Barney and Citicorp's commitment   
letter also continued throughout this week.                                     

 On April 5, 2001, at the request of Mikelsons, representatives of Salomon
Smith Barney contacted a representative of the financial buyer to respond to the
April 2 letter. In this conversation, the representative of the financial buyer 
stated that it remained interested in a transaction with Amtran but was         
prevented from making a proposal by the standstill provision contained in the   
confidentiality agreement which it had previously entered into with Amtran. The 
representative of the financial buyer stated that he had heard rumors that      
Mikelsons was considering a possible transaction to take Amtran private and that
the financial buyer would be interested in participating as a minority partner  
in such a transaction.                                                          

    On April 6, 2001, following telephone conversations among Messrs. Mikelsons,
Tague and Rogers and representatives of Salomon Smith Barney, Mr. Tague and     
representatives of Salomon Smith Barney then placed a telephone call to         
representatives of the financial buyer. At the request of Mikelsons, a          
representative of Salomon Smith Barney informed the financial buyer that        
Mikelsons was not interested in selling his stake in Amtran to the financial    
buyer or participating in a transaction with the financial buyer, but that      
Amtran would waive the standstill provision to permit the financial buyer to    
communicate an offer to the Amtran board of directors if it wished to do so. In 
response, a representative of the financial buyer indicated that it would be    
interested in making such a proposal and requested updated non-public           
information with respect to Amtran. This request was rejected. On April 11,     
2001, the financial buyer sent a letter to Messrs. Mikelsons and Tague and a    
representative of Salomon Smith Barney proposing to purchase all the outstanding
shares of Amtran common stock for $20 per share in cash, subject to satisfactory
completion of additional due diligence; the letter stated that the financial    
buyer might be prepared to offer a price in excess of $20 per share based on the
results of a due diligence update. The financial buyer also indicated that it   
would be interested in participating, in a minority role, in a transaction in   
which Amtran was taken private.                                                 

  In early April 2001, Mr. Rogers discussed with Mr. Abel the possibility of
Mikelsons proposing to take Amtran private and the need to constitute another   
special committee to consider any proposal that Mikelsons might make. Mr. Abel  
indicated that he would be willing to serve in that capacity again. Mr. Abel    
subsequently retained S&C to act as independent legal advisor to the special    
committee. Messrs. Abel and Stapleton discussed the process of retaining a      
financial advisor for the special committee and several investment banks were   
contacted. By unanimous written consent dated April 18, 2001, the Amtran board  
of directors formed a special committee composed of Mr. Abel.                   

During the week beginning April 16, 2001, Mr. Abel, together with       
representatives of S&C, received presentations from three investment banks being
considered to represent the special committee, including DrKW.                  

During that same week, Messrs. Tague and Wolff, with the assistance of  
representatives of Salomon Smith Barney and Cravath (including Mr. Rogers),     
prepared a draft term sheet to be presented to ILFC regarding the proposed      
modification of the terms of their shares of Amtran Series B preferred stock.   
Mr. Wolff sent this term sheet to ILFC, following the execution of a            
confidentiality agreement by ILFC on April 24, 2001.                            

   In mid-April 2001, Messrs. Tague and Wolff met with representatives of Bank
One, NA to discuss Bank One's interest in participating in the financing of a   
possible transaction.                                                           

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On April 24, 2001, a representative of the financial buyer placed a     
telephone call to Mr. Tague. After discussing this telephone call with          
Mr. Rogers, Mr. Tague returned the telephone call to the representative of the  
financial buyer, and informed the representative of the financial buyer that    
Mikelsons was not interested in participating in a transaction with the         
financial buyer.                                                                

 Between April 24, 2001 and May 3, 2001, Messrs. Tague and Wolff, together
with representatives of Cravath, further negotiated the draft commitment letter 
from Salomon Smith Barney and Citicorp and the draft commitment letter from the 
alternative financial advisor commitment letter. On May 3, 2001, Salomon Smith  
Barney and Citicorp delivered a final form of commitment letter to Amtran.      
Discussions with the alternative financial advisor ceased at this time.         

On April 26, 2001, a representative of ILFC called Mr. Wolff regarding  
ILFC's views on the proposed modifications to the terms of the Series B         
preferred stock and delivered a term sheet containing those views on April 30.  
Messrs. Tague and Wolff reviewed ILFC's proposal with representatives of Salomon
Smith Barney and Cravath (including Mr. Rogers) on May 2, 2001.                 

On April 27, 2001, Mr. Rogers called Mr. Stapleton to inform him that an
agreement in principle had been reached with Salomon Smith Barney and Citicorp  
with respect to the financing of a possible transaction and to discuss the      
possible timing of a proposal by Mikelsons.                                     

   On May 3, 2001, Messrs. Mikelsons, Tague and Wolff met with representatives
of William M. Mercer and Cravath (including Mr. Rogers) to provide advice to    
Mikelsons on compensation issues, including the proposal for senior officers to 
roll their options forward.                                                     

   Later on May 3, Messrs. Mikelsons, Tague and Wolff met with representatives
of Salomon Smith Barney, Citicorp and Cravath (including Mr. Rogers) to review  
ILFC's proposed terms and to discuss the overall timing of a possible           
transaction. On May 4, 2001, following these discussions, Mr. Wolff sent revised
term sheets to representatives of ILFC. On May 7, 2001, Messrs. Tague and Wolff,
together with a representative of Salomon Smith Barney, met with representatives
of ILFC to negotiate the terms of the modifications to the Series B preferred   
stock. On May 9, 2001, representatives of Cravath sent draft agreements to      
representatives of ILFC.                                                        

On May 8, 2001, the special committee decided to retain DrKW as its     
financial advisor based on DrKW's experience in representing special committees,
the fact that DrKW had not worked with Amtran in the past and DrKW's fee        
structure.                                                                      

On May 11, 2001, Mr. Wolff and Charles Fuller, Director of Strategic    
Planning of Amtran, met with representatives of General Electric Capital        
Aviation Services, one of Amtran's main sources of aircraft financing, and      
disclosed that Mikelsons was considering taking Amtran private. At this meeting,
General Electric Capital Aviation Services entered into a confidentiality       
agreement with respect to this information. On May 14, 2001, Messrs. Wolff and  
Fuller held a similar meeting over dinner with representatives of Boeing Capital
Corporation. At this meeting, Boeing Capital Corporation entered into a         
confidentiality agreement with respect to this information.                     

In addition, on May 14, representatives of S&C sent Mr. Rogers a due    
diligence request prepared by DrKW.                                             

On May 15, 2001, following consultation with his financial and legal    
advisors, Mikelsons determined to submit a proposal to take Amtran private at   
$21 per share in cash.                                                          

  On May 15, 2001, representatives of Cravath and counsel for ILFC finalized
the agreements modifying the terms of the Series B preferred stock. These       
agreements were executed and delivered by the parties on the afternoon of       
May 16, 2001.                                                                   

Following the close of the stock markets on May 16, copies of Mikelsons'
letter proposing to take Amtran private for $21 per share in cash and the       
Salomon Smith Barney and Citicorp commitment letter were sent to the members of 
the Amtran board of directors and S&C. Later that afternoon, the Amtran board of
directors met telephonically to review Mikelsons' proposal and related matters. 
Among the matters considered at this meeting was a request by Mikelsons that    
Amtran enter into an engagement letter with Salomon Smith Barney on his behalf. 

After discussing these matters, the members of the Amtran board of      
directors, other than Messrs. Mikelsons and Rogers, who each abstained, voted to
refer Mikelsons' proposal and related                                           

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matters to the special committee for consideration and to authorize Amtran to   
enter into an engagement letter with Salomon Smith Barney. That evening Amtran  
issued a press release announcing receipt of Mikelsons' proposal and that the   
Amtran board of directors had referred that proposal to the special committee.  
Mr. Tague also executed the engagement letter with Salomon Smith Barney on      
behalf of Amtran that evening.                                                  

On May 17, 2001, Messrs. Tague and Wolff and representatives of Salomon 
Smith Barney and Cravath (including Mr. Rogers) had a conference call with      
representatives of S&C and DrKW regarding the process that the special committee
was planning to undertake (including due diligence to be conducted by DrKW and  
S&C). Representatives of Cravath also sent DrKW due diligence materials provided
to Cravath by Amtran. These due diligence materials were supplemented by        
additional materials on May 18 (including the 5-year plans prepared by Amtran   
management dated April 19, 2001 and May 16, 2001).                              

    Also, on May 17, Amtran and the seven members of its board of directors were
named as defendants in two putative class action lawsuits filed in the Marion   
County Court in Indianapolis. Amtran was served with copies of these complaints 
by certified mail on May 21, 2001.                                              

  On May 21, 2001, representatives of S&C visited a data room at the offices
of Cravath containing due diligence materials provided by Amtran and were       
provided with copies of the data room materials which they requested.           

On May 22, 2001, representatives of Cravath sent a draft form of merger 
agreement to representatives of S&C.                                            

 On May 23, 2001, DrKW provided Mr. Rogers with a list of topics which the
special committee and DrKW would be interested in discussing with Mikelsons. In 
the morning of May 24, 2001, representatives of Cravath (including Mr. Rogers)  
discussed with Mikelsons the questions posed by DrKW. Also present on this      
telephone call were Messrs. Tague and Wolff and representatives of Salomon Smith
Barney.                                                                         

  In the evening of May 24, Messrs. Tague, Wolff, Rogers and Abel attended a
dinner meeting with representatives of DrKW, S&C and Salomon Smith Barney in    
Chicago, Illinois. At dinner, Messrs. Tague and Wolff discussed recent airline  
industry trends, Amtran's business and prospects and the specific business      
segments in which Amtran operates (namely, scheduled service, commercial charter
and military charter).                                                          

  In the morning of May 25, the meeting reconvened at Salomon Smith Barney's
Chicago offices. During these meetings, Messrs. Tague and Wolff reviewed at     
length the 5-year plans prepared by Amtran management. In particular, these     
discussions covered the risks inherent in Amtran's shift away from commercial   
and military charter service and toward increased scheduled service, Amtran's   
transition from an older fleet to one of the youngest fleets in the airline     
industry (including the risks posed by that transition and the temporary        
reduction in maintenance costs resulting from that transition) and the risks    
posed by the labor situation in the airline industry generally and high fuel    
costs. At this meeting, representatives of DrKW requested that Amtran management
include additional cases in its 5-year plan reflecting various scenarios        
(including increased competition and continued high fuel prices). At this       
meeting, Mr. Abel and representatives of DrKW and S&C asked questions of Amtran 
management.                                                                     

Later in the morning, Mikelsons joined the meeting. DrKW asked Mikelsons
questions covering the topics outlined in the questions provided to Mr. Rogers  
on May 23, focusing in particular on the negotiations in 1999 and 2000 with the 
financial buyer as well as the other strategic processes since 1998. They also  
discussed with Mikelsons his reasons for wanting to take Amtran private at this 
time. As part of that discussion, Mikelsons stated that he was not interested in
selling his shares to a third party. There was also further discussion between  
Mr. Rogers and representatives of DrKW and S&C regarding the structure of the   
transaction. At the conclusion of the meeting, the group also discussed the     
April 11, 2001 proposal received from the financial buyer and Mr. Mikelsons'    
reasons for not pursuing it. The advisors to the special committee then advised 
Mr. Mikelsons and the members of Amtran management that they wished to contact  
the financial buyer to discuss the proposal and asked whether Mikelsons or      
Amtran's                                                                        

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management would object to the advisors doing so. Mikelsons and Amtran's        
management indicated that they had no objection.                                

After the Chicago meetings concluded, Amtran management arranged to have
delivered to DrKW additional due diligence materials regarding matters discussed
in those meetings and for DrKW to visit Amtran's Chicago and Indianapolis       
operations.                                                                     

   On May 29, 2001, representatives of DrKW and S&C contacted a representative
of the financial buyer to discuss the April 11, 2001 proposal. The financial    
buyer confirmed that it was willing to acquire all of the outstanding shares of 
Amtran common stock for $20 per share and that, if it was provided with updated 
non-public information regarding Amtran, it might be prepared to offer more than
$20 per share. The representatives of DrKW and S&C then informed the financial  
buyer that they understood Mikelsons was not interested in selling his interest 
in Amtran and that they had no authority to offer Amtran for sale. The          
representative of the financial buyer informed the special committee's advisors 
that it could be interested in acquiring the minority shareholders' interest in 
Amtran at the same price, using the proposed financing that Mr. Mikelsons had   
arranged, and then participating in a minority role with what the financial     
buyer characterized as 'customary minority protections', which the              
representative of the financial buyer characterized as 'extensive' and          
'complicated'. The representatives of DrKW and S&C then inquired whether the    
financial buyer would be interested in simply acquiring the minority interest   
and holding it without any special minority protections. The representative of  
the financial buyer indicated that it would not be interested in a minority     
position in Amtran without appropriate minority rights and power sharing        
arrangements.                                                                   

Once this telephone call was completed, representatives of DrKW and S&C 
contacted representatives of Salomon Smith Barney to discuss the financial      
buyer's continuing interest in Amtran. During this conversation, a              
representative of DrKW indicated that DrKW's preliminary valuation work and the 
prior proposals from the financial buyer was leading DrKW to conclude that an   
appropriate price was above $21 per share in cash. That afternoon,              
representatives of Salomon Smith Barney and Mr. Rogers had several conversations
with Messrs. Tague and Wolff regarding this conversation. Mr. Wolff also spoke  
with representatives of Salomon Smith Barney and Cravath regarding an error     
which was found in the model used in the preparation of the May 16, 2001 5-year 
plan.                                                                           

Also, on May 29, 2001, the annual meeting of Amtran shareholders was    
adjourned.                                                                      

On May 30, 2001, representatives of DrKW met with additional members of 
Amtran management, and performed due diligence on additional aspects of Amtran's
operations in Chicago and Indianapolis with representatives of Salomon Smith    
Barney and Cravath present.                                                     

  Later on May 30, Messrs. Tague and Wolff met with representatives of DrKW,
Salomon Smith Barney and Cravath and began discussing the 5-year plans produced 
by Amtran management, the error in the model which had been identified the day  
before and the new scenarios requested by DrKW. That afternoon, a representative
of DrKW repeated to Messrs. Tague and Wolff and representatives of Salomon Smith
Barney and Cravath that DrKW's view was that an appropriate price for Amtran was
above $21 per share. On May 31, 2001, Amtran provided representatives of DrKW   
with copies of the corrected 5-year base plan and supplemental 5-year plans     
covering the alternative scenarios requested to be prepared by DrKW.            

Amtran and the seven members of its board of directors were named as    
defendants in a third putative class action lawsuit, which was filed in federal 
district court in Indianapolis on May 30, 2001. Amtran and all the members of   
the board of directors were served with copies of this complaint by certified   
mail at Amtran's offices on June 6, 2001.                                       

  On May 31, 2001, representatives of S&C sent a mark-up of the draft merger
agreement to representatives of Cravath. In the afternoon of June 1, 2001,      
representatives of Cravath (including Mr. Rogers) and S&C negotiated the        
non-financial terms of the draft merger agreement.                              

    In the morning of June 1, 2001, representatives of DrKW conducted additional
due diligence via conference call with additional members of Amtran management. 
Representatives of S&C, Salomon Smith Barney and Cravath also listened to this  
conference call.                                                                

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  On June 1 and June 2, 2001, at the direction of Mikelsons, representatives
of Salomon Smith Barney had several conversations with representatives of DrKW  
regarding Mikelsons' offer, the need for adjustments to the discounted cash flow
analysis to reflect the temporary decline in maintenance costs resulting from   
the transition to a new fleet, the prior offers received by Amtran from the     
financial buyer and changes in Amtran's financial prospects since those offers  
were made, the use of comparable company and precedent transaction analyses, the
limitations imposed by the restricted payments clauses in Amtran's indentures,  
the accuracy of Amtran management's prior projections and budgets and the       
decline in Amtran's cash flow between 2004 and 2005 contained in the 5-year     
plan. Representatives of Salomon Smith Barney and DrKW continued to discuss     
these topics on an ongoing basis over the following two-week period.            

During the period from May 16 to June 5, 2001, Mr. Abel had frequent    
telephonic conversations with representatives of DrKW, S&C and Sommer & Barnard,
Indiana counsel to the special committee, to discuss the status of the financial
and legal due diligence process.                                                

 In the morning of June 5, 2001, the special committee met at the New York
offices of S&C with representatives of S&C, DrKW and Sommer & Barnard. A        
representative of Sommer & Barnard reviewed the special committee's legal duties
under Indiana law. Representatives of DrKW reviewed with the special committee  
the results of their financial and business due diligence and analysis of       
Amtran. At the conclusion of the meeting, the special committee decided to      
continue to negotiate in order to attain a price per share above the $21 per    
share initial offer and that DrKW should advise Salomon Smith Barney that Mr.   
Mikelsons would need to offer $26 per share in order for the special committee  
to recommend his proposal.                                                      

    In the morning of June 5, 2001, Cravath provided S&C with a revised draft of
the merger agreement, reflecting certain of the changes requested by S&C in the 
negotiation on June 1. In the afternoon of June 5, representatives of Salomon   
Smith Barney, Cravath (including Mr. Rogers), DrKW, S&C and Sommer & Barnard    
met. At this meeting, representatives of DrKW made a presentation regarding     
their preliminary valuation work on Amtran based on the 5-year plan and         
alternative scenarios prepared by Amtran management. As part of this            
presentation, representatives of DrKW questioned the fact that the 5-year plan  
prepared by Amtran showed a decline in cash flow between 2004 and 2005. There   
was also discussion of DrKW's conversations with the financial buyer and the    
relevance of the financial buyer's offers in 2000 to a determination of the     
value of Amtran in June 2001.                                                   

 In response to this presentation, representatives of Salomon Smith Barney
questioned certain portions of DrKW's financial analysis, including, in         
particular, DrKW's reliance on its discounted cash flow analysis and DrKW's     
stated belief that it was unable to draw any conclusions from its comparable    
company analysis. After listening to these responses, a representative of DrKW  
stated that he believed that the special committee's preliminary view was that  
it would likely be able to recommend a price of $26 per share. However, he      
invited Salomon Smith Barney to discuss further the financial analysis presented
at the meeting and to make available additional information regarding Amtran to 
the extent useful in refining the financial analysis. The relevance and         
valuation of the offers by the financial buyer was also discussed at this       
meeting.                                                                        

Beginning in the morning of June 6, 2001 and continuing through June 8, 
2001, representatives of DrKW and Salomon Smith Barney had a number of telephone
calls regarding the valuation work done by DrKW through that time. The topics   
discussed included DrKW's valuation analysis based on comparable companies, the 
appropriate methodology for determining the enterprise value of Amtran, the     
reasons underlying the decline in cash flow between 2004 and 2005 in Amtran's   
5-year plan, the relative weightings of the 5-year plan scenarios and the       
variances between Amtran's forecasts and actual historical results.             

   On June 11, 2001, representatives of Salomon Smith Barney and Cravath had a
conference call with Mr. Wolff regarding the variances over the last three years
in Amtran's forcasts versus its actual historical results. Thereafter,          
representatives of Salomon Smith Barney provided representatives of DrKW with a 
comparison of Amtran management's budgets (prepared two                         

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months prior to the beginning of each year) with actual performance in 1998,    
1999 and 2000 based on the information provided to DrKW by Amtran's management. 
Representatives of Salomon Smith Barney thereafter had several telephone        
conversations with representatives of DrKW regarding DrKW's discounted cash flow
analysis of Amtran.                                                             

Also on June 11, representatives of S&C and Cravath had additional      
negotiations on the draft merger agreement. A revised draft of the merger       
agreement was distributed to representatives of S&C on June 12.                 

  In the morning of June 12, 2001, representatives of DrKW and S&C contacted
representatives of Cravath to indicate that the special committee had determined
that it would not recommend Mikelsons' offer of $21 per share. They also        
indicated that the special committee's views on valuation had not changed since 
the June 5 presentation. Following receipt of this determination, Messrs.       
Mikelsons, Tague and Wolff participated in a conference call with               
representatives of Salomon Smith Barney and Cravath (including Mr. Rogers).     
Mikelsons indicated that he was not prepared to increase his offer at that time 
and expressed his view that industry conditions had deteriorated since he made  
his proposal on May 16, 2001, and were continuing to deteriorate. Also, on      
June 12, representatives of Salomon Smith Barney provided to representatives of 
DrKW a comparison between Amtran's forecasts in July 2000 and the current 5-year
plan.                                                                           

  In the morning of June 13, 2001, at Mikelsons' request, representatives of
Salomon Smith Barney sent information regarding the recent performance of Amtran
and the airline industry generally to representatives of DrKW and, later that   
day, discussed the information via a conference call with representatives of    
DrKW, Messrs. Tague and Wolff and representatives of Cravath and S&C. During    
this conference call, a representative of DrKW reiterated his view that the     
special committee would not conclude an offer of $21 per share was fair. There  
was also discussion of the limitations on restricted payments contained in      
Amtran's indentures. Messrs. Wolff and Tague undertook to provide to            
representatives of Salomon Smith Barney and DrKW with an updated calculation of 
those limitations by the end of that day.                                       

    After this conference call, there was, at the request of a representative of
DrKW, a telephone call between representatives of DrKW and Salomon Smith Barney 
on which a representative of DrKW indicated that he believed, based on the      
updated valuation work done since the June 5 meeting, that the special committee
might be willing to consider an offer of $24 per share in cash. During this     
telephone call, a representative of Salomon Smith Barney indicated that he      
believed Mikelsons might be willing to increase his offer by $1 to $2 per share.

  In the late afternoon of June 13, Amtran provided a calculation of amounts
available under the restricted payments limitation to representatives of Salomon
Smith Barney and Cravath. On June 13, representatives of S&C and Cravath also   
held further negotiations on the non-financial terms of the merger agreement.   

During the day on June 14, 2001, Amtran provided calculations of the    
restricted payment limitation to Mikelsons and representatives of Salomon Smith 
Barney and Cravath. In the afternoon of June 14, Messrs. Mikelsons, Tague and   
Wolff had a telephone conference call with representatives of Salomon Smith     
Barney and Cravath (including Mr. Rogers) to discuss the calculations prepared  
by Amtran. At the conclusion of this telephone call, representatives of Salomon 
Smith Barney were instructed by Mikelsons to attempt to come to an understanding
with DrKW on price. Following this discussion, the calculations of the          
restricted payments limitation were provided to representatives of DrKW and     
representatives of Salomon Smith Barney contacted representatives of DrKW to    
discuss the calculations.                                                       

Also on June 14, representatives of Cravath continued negotiations with 
representatives of S&C with respect to the non-financial terms of the merger    
agreement and distributed a further revised draft of the merger agreement to    
representatives of S&C.                                                         

    In the morning of June 15, 2001, representatives of Salomon Smith Barney and
DrKW had a number of telephone conversations to discuss the calculation of the  
restricted payments limitation. These representatives also discussed the proper 
valuation methodology for the September 2000 offer by the financial buyer.      

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In the early afternoon of June 15, 2001, at Mikelsons' request,         
representatives of Salomon Smith Barney contacted representatives of DrKW by    
telephone to indicate that Mikelsons was willing to offer a price of $22.50 per 
share in cash. In the afternoon of June 15, 2001, the special committee held a  
telephonic meeting with representatives of S&C and DrKW, at which time DrKW     
advised the special committee that Mikelsons had raised his offer price from    
$21.00 to $22.50. DrKW discussed this new offer with the special committee in   
light of the revised restricted payments calculations provided to the special   
committee. These calculations indicated that Amtran might risk being unable to  
make restricted payments under its indentures if the offer price were at or     
above $23.00 per share. The special committee instructed DrKW to counter        
Mikelsons' revised proposal with a proposal of $23.50 per share. Following the  
special committee meeting, representatives of DrKW contacted representatives of 
Salomon Smith Barney to respond to Mikelsons' proposal of $22.50 per share with 
a proposed price of $23.50 per share in cash. After speaking with Mikelsons,    
representatives of Salomon Smith Barney contacted representatives of DrKW to    
indicate that Mikelsons had directed them to indicate that he was willing to    
offer $23 per share in cash. Upon receipt of this offer, the representatives of 
DrKW indicated that they thought, subject to completion of negotiations on the  
draft merger agreement, that they would be prepared to favorably recommend that 
offer to the special committee.                                                 

    In the evening of June 15, representatives of Cravath and S&C negotiated the
remaining open issues on the draft merger agreement. In the early morning of    
June 16, representatives of Cravath distributed a substantially final draft of  
the merger agreement to representatives of S&C. There were two further          
discussions between representatives of S&C and Cravath on June 16 and June 17   
regarding additional minor changes to the agreed form of merger agreement.      

Throughout the period from June 11 through the evening of June 17,      
representatives of Cravath negotiated with the attorneys representing the       
plaintiffs in the two lawsuits brought in Indiana state court challenging the   
proposed transaction about the terms on which those lawsuits could be settled.  
In the morning of June 18, 2001, a memorandum of understanding regarding the    
settlement of these lawsuits, and the lawsuit brought in federal court, with the
attorneys for the plaintiffs was finalized.                                     

Following the closing of the stock markets on June 18, 2001, the special
committee met. On the afternoon of June 18, 2001, the special committee held a  
telephonic meeting with representatives of S&C, representatives of DrKW and a   
representative of Sommer & Barnard to discuss the $23 per share proposal by     
Mikelsons. After reviewing DrKW's financial analysis, DrKW advised the special  
committee that subject to certain assumptions and limitations which were        
described to the special committee, in its opinion, the $23 per share cash      
consideration to be received by the holders of shares of Amtran's common stock  
(other than Mikelsons and his affiliates) was fair to such shareholders from a  
financial point of view. S&C then reviewed the terms of the proposed merger     
agreement with the special committee. The special committee then resolved to    
recommend the revised proposal to the board of directors of Amtran.             

Upon the conclusion of the special committee meeting, the full board of 
directors of Amtran met to receive the special committee's recommendation and to
consider taking action on Mikelsons' revised proposal and related matters. After
receiving the favorable recommendation of the special committee and reviewing   
the terms of the merger agreement and related documents (including the          
commitment letters for the financing arrangements and the ILFC agreement) and   
the proposed terms of the settlement of the shareholder litigation, the board of
directors of Amtran unanimously voted to approve the merger proposed by         
Mikelsons and related matters. Immediately after this board meeting, the merger 
agreement was executed and delivered, and Amtran issued a press release         
announcing that an agreement had been reached with Mikelsons and INDUS. Amtran  
and ATA also executed and delivered the commitment letters for the financing    
arrangements during the evening of June 18.                                     

PURPOSE AND STRUCTURE OF THE MERGER                                             

 The purpose of the merger is for Mikelsons to own all the common stock of
Amtran immediately following completion of the merger. In the future, certain of
our officers may acquire                                                        

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shares of our common stock through exercises of stock options which remain      
outstanding following the merger (as described under ' -- Interests of Certain  
Persons in the Merger') and under any stock options that we may grant in the    
future. ILFC may also acquire shares of our common stock in the future through  
the conversion of all or a portion of its shares of our Series B preferred stock
into shares of our common stock.                                                

   Amtran, INDUS and Mikelsons believe that taking Amtran private at this time
will allow management to focus on the implementation of long-term strategic     
goals. In particular, Amtran, INDUS and Mikelsons believe that Amtran's         
management should be focusing primarily on implementing Amtran's refleeting     
initiative and the concurrent expansion of Amtran's operations at Midway Airport
in Chicago, Illinois. Amtran, INDUS and Mikelsons believe that these two        
initiatives could result in substantial benefits if they are successfully       
implemented. However, Amtran, INDUS and Mikelsons recognize that the            
implementation of these initiatives involves substantial execution risk, of     
which numerous factors that will determine the success of the initiatives are   
beyond the control of Amtran and its management, and believe that it will be    
several years before the success of these initiatives can be determined. Because
of this substantial uncertainty and time horizon, Amtran, INDUS and Mikelsons   
believe that the public equity markets are unlikely to reflect the potential    
benefits of these initiatives at any time in the near future.                   

    Amtran, INDUS and Mikelsons also believe that Amtran is bearing the costs of
being a publicly traded company without enjoying the full benefits usually      
associated with being publicly traded. Although Amtran will be required under   
its indentures to continue to file periodic reports with the SEC, Amtran's      
management estimates that ceasing to have publicly traded equity will reduce its
costs by approximately $125,000 per year through a reduction in costs relating  
to investor relations, management resources devoted to equity conferences and   
equity research analysts and costs relating to the quotation of its common stock
on the Nasdaq Stock Market. In addition, Amtran, INDUS and Mikelsons believe    
that Amtran's stock has historically traded at a discount to its peers based in 
part on its limited public float and limited equity analyst coverage.           

THE SPECIAL COMMITTEE                                                           

 The Amtran board of directors appointed a special committee consisting of
Robert A. Abel to evaluate the proposed merger. All of the Amtran shares held by
Mr. Abel will be cashed out in the same manner as those held by the Amtran      
shareholders whose shares are being converted into cash. Mr. Abel will receive  
separate compensation for his service on the special committee. In addition, Mr.
Abel will continue as a director of Amtran after the merger and also will be    
entitled to certain indemnification rights and to directors' and officers'      
liability insurance that will be continued by Amtran following the merger as    
described below under ' -- Interests of Certain Persons in the Merger'. Each    
member of the Amtran board of directors and the special committee believes that 
the foregoing arrangements do not affect the special committee's independence or
impartiality.                                                                   

RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND BOARD OF DIRECTORS                 

On June 18, 2001, the special committee, consisting of a member of your 
board of directors who is not an employee of Amtran or otherwise an affiliate of
Mikelsons or INDUS, determined that the terms of the merger agreement and the   
merger are fair to and in the best interests of Amtran and fair to the holders  
of its common stock (other than Mikelsons and his affiliates) and recommended   
that your board of directors adopt the plan of merger and approve the merger,   
the merger agreement and the other transactions contemplated thereby. In making 
this recommendation, the special committee also considered the ILFC Agreement   
and the ILFC Amendment, the Commitment Letter (as defined below) and the        
proposed option modification agreements between Amtran and 19 of its officers.  

At a meeting on June 18, 2001, your board of directors, based on, among 
other things, the recommendation of the special committee, unanimously adopted  
resolutions:                                                                    

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     approving the merger agreement, the merger, the ILFC Agreement and the ILFC
Amendment;                                                            

determining that the terms of the merger are fair to and in the best  
    interests of Amtran and fair to its shareholders, other than Mikelsons and
his affiliates;                                                       

recommending that holders of shares of our common stock, including a  
majority of shares voting at the annual meeting not owned by INDUS,   
   Mikelsons or Mikelsons affiliates, approve the merger, the plan of merger
and the merger agreement; and                                         

adopting the plan of merger.                                          

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE 'FOR' APPROVAL OF THE  
MERGER, THE PLAN OF MERGER AND THE MERGER AGREEMENT.                            

FAIRNESS OF THE MERGER                                                          

On June 18, 2001, the special committee recommended that the board of   
directors approve the merger, the merger agreement and the other transactions   
contemplated thereby and adopt the plan of merger. On June 18, 2001, the board  
of directors, by unanimous vote of all directors present and voting, based upon,
among other things, the recommendation and approval of the special committee,   
adopted the plan of merger, approved the merger, the merger agreement and the   
ILFC Amendment and determined that the merger is fair to and in the best        
interests of Amtran and fair to the holders of its shares of common stock (other
than Mikelsons and his affiliates) and recommended that the shareholders of     
Amtran approve the merger, the plan of merger, the merger agreement and the     
ILFC Amendment.                                                                 

Special Committee                                                               

In reaching its determinations referred to above, the special committee 
considered the following factors, each of which, in the view of the special     
committee, supported such determinations:                                       

(i)   the opinion of DrKW that, based upon and subject to the various   
       assumptions and limitations set forth therein, as of June 18, 2001,
      the $23.00 per share to be received by holders of shares of Amtran
      common shares other than Mikelsons and his affiliates (the 'Public
    Shareholders') pursuant to the merger agreement was fair to such
          Public Shareholders from a financial point of view, and the report and
       analyses presented to the special committee in connection therewith
        (See ' -- Opinion of Financial Advisor to the Special Committee'); a
          copy of DrKW's opinion is attached hereto as Annex C. Shareholders are
     urged to read this opinion in its entirety. The special committee
adopted the analysis and conclusions of DrKW;               

  (ii)  the course of the negotiations between the special committee and its
         representatives and INDUS and its representatives, including (a) that
        the negotiations resulted in an increase in the merger consideration
   to be received by holders of shares of common stock (other than
          Mikelsons and his affiliates) from $21.00 to $23.00 per share, (b) the
          special committee's belief that $23.00 per share was the highest price
      which could be obtained from INDUS and (c) the special committee's
    belief that further negotiations with INDUS could cause INDUS to
       abandon the merger, with the resulting significant possibility that
          the market price for the shares could fall substantially below $23.00;

   (iii)  the terms and conditions of the merger agreement, including (a) that
   the recommendation of the special committee may be withdrawn,
         modified or amended to the extent the special committee believes it
         necessary to do so in the exercise of its fiduciary duties; (b) the
      requirement that the merger not be consummated unless at least a
     majority of the shares voted by the Public Shareholders vote to
           approve the merger, (c) the condition that Amtran and INDUS use their
       reasonable best efforts to obtain the financing to pay the merger
          consideration; and (d) the limited nature of other conditions to the
merger;                                                   

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  (iv)  that the commitment letter that Amtran and ATA had obtained provided
          for the availability of financing to consummate the merger, subject to
the terms and conditions in such commitment letter;         

(v)  the historical market prices and recent trading activity of Amtran 
   common stock, including that the merger price of $23.00 per share
     represents (x) a premium of approximately 82.5% over the $12.60 per
        share closing price on May 16, 2001, the last trading day prior to the
     announcement of Mikelsons' proposal; (y) a premium of approximately
  139% over the $9.63 per share closing price 60 days prior to the
         announcement of Mikelsons' proposal; and (z) a premium of approximately
         39.4% over the $16.50 closing price 1 year prior to the announcement of
Mikelsons' proposal.                                          

   (vi)  the fact that the merger price of $23.00 per share was at or near the
          maximum level which Amtran could pay and remain in compliance with the
restricted payments covenants of its indentures;            

(vii) the possibility that, because of (x) a possible downturn in the   
        airline industry generally, (y) risks arising from Amtran's business
  on a going-forward basis, including risks related to the rapid
   integration of new aircraft and the subsequent disposition of a
       portion of its current fleet, and the fact that no past airline had
         successfully moved from the charter to scheduled service business, or
        (z) a decline in the trading price of the shares or the stock market
       in general, the consideration the Public Shareholders would receive
     pursuant to the merger would be more advantageous than the future
    trading price or the consideration the Public Shareholders could
obtain in a future transaction;                             

(viii) the fact that Amtran common stock has historically traded at a   
       discount to the stocks of other domestic airlines due to Amtran's
limited public float; and                                 

   (ix)  the fact that Mikelsons, as sole shareholder of INDUS, has sufficient
         stock ownership to control a disposition of Amtran and that Mikelsons
          indicated that he was not interested in selling control of Amtran to a
        third party or taking on a significant minority partner and that the
   special committee and DrKW were not authorized to, and did not,
          solicit third-party indications of interest for the acquisition of all
or any part of Amtran or its assets.                        

The special committee also considered the following adverse factors     
associated with the merger:                                                     

 (i)  DrKW's analyses based on some of the projections provided to DrKW by
Amtran's management had produced implied per share valuations 
substantially in excess of $23 per share;                     

   (ii) that because Mikelsons had publicly stated his intention to oppose any
      alternative transaction with a third party, public shareholders were
        not afforded an opportunity to participate in any control premium that
        might have been generated by the sale of the entire company to a third
party;                                                        

   (iii) that the merger will be a taxable transaction for Amtran shareholders
whose shares are being converted into cash in the merger;   

   (iv) that the cash merger structure of the transaction would take longer to
        complete than a transaction involving a cash tender offer by INDUS for
     the shares of the Public Shareholders followed by a merger of INDUS
with and into Amtran; and                                     

(v) that the Public Shareholders of Amtran would have no ongoing equity 
        participation in the surviving corporation following the merger, meaning
   that the Public Shareholders would cease to participate in Amtran's
        future earnings or growth, if any, or to benefit from increases, if any,
in the value of their common stock in Amtran.                   

  In view of the variety of factors considered by the special committee, the
special committee did not find it practicable to, and did not, quantify or      
otherwise attempt to assign specific or relative weights to the factors it      
considered in reaching its determination. In its evaluation of the merger, the  
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factors identified by Instruction 2 to Item 1014 of Regulation S-K, promulgated 
under the Exchange Act as factors that are important in determining the fairness
of a going-private transaction to unaffiliated security holders. The special    
committee evaluated the $23 per share offer merger consideration against recent 
and historic market prices for the shares of Amtran common stock. The special   
committee also considered the opinion of DrKW that, based upon and subject to   
the various assumptions and limitations set forth therein, as of June 18, 2001, 
the $23 per share to be received by the Public Shareholders pursuant to the     
merger was fair to such Public Shareholders from a financial point of view, and 
the report and analyses presented to the special committee in connection        
therewith. The special committee and its advisors did not analyze the net book  
value or going concern value of Amtran in connection with their fairness        
analysis because they believed that such analyses were not relevant to companies
in the airline industry and that the results of such analyses would necessarily 
be very low and not indicative of the value of Amtran. The special committee    
also did not consider the liquidation value of Amtran in its evaluation because 
Mikelsons indicated that he was not interested in selling control of Amtran to a
third party or engaging in a transaction to break-up or liquidate Amtran.       

The special committee considered the advantages and disadvantages of the
only apparently available alternative to the acquisition of the public          
shareholder interest in Amtran by Mikelsons, which was Amtran continuing as a   
publicly held company with Mikelsons maintaining his 72% equity interest in     
Amtran. In the view of the special committee, the principal advantage of Amtran 
continuing as a publicly traded company was that it would allow the Public      
Shareholders to continue to participate in any growth in the value of Amtran    
equity. The disadvantages of Amtran continuing as a publicly traded company that
were considered by the special committee included the exposure to the risks and 
uncertainties attendant to continuing as a publicly traded company in light of  
risks to Amtran's business from rising fuel prices, rising labor costs, the     
rapid integration of new aircraft and the subsequent disposition of a portion of
its current fleet, and the fact that no past airline had successfully moved from
a charter service business to a predominantly scheduled service business. In    
addition, the special committee considered the fact that Amtran common stock has
historically traded at a discount to the stocks of other domestic airlines due  
to Amtran's limited public float and the fact that Amtran has a controlling     
shareholder. The special committee concluded that under all of the relevant     
circumstances, and in light of the $23 per share price in cash, the             
disadvantages of Amtran continuing as a publicly traded company significantly   
outweighed the advantages, and accordingly that alternative was rejected.       

  After consulting with its financial and legal advisors with respect to the
merger, including, without limitation, the factors discussed above, the special 
committee concluded that the merger was advisable, fair and in the best         
interests of Amtran and fair to the holders of shares of Amtran common stock    
(other than Mikelsons and his affiliates).                                      

  At the June 18, 2001 meeting of the Amtran board of directors, the special
committee, with its legal advisors participating, reported to the other members 
of the Amtran board of directors on its review of the merger agreement and the  
factors taken into account by the special committee in reaching its             
determination that the proposed merger is advisable, fair to and in the best    
interests of Amtran and fair to the holders of shares of Amtran's common stock  
(other than Mikelsons and his affiliates).                                      

Board of Directors                                                              

In reaching its determinations referred to above, the board of directors
considered the following factors, each of which, in the view of the board of    
directors, supported its determinations:                                        

the conclusions and recommendation of the special committee;          

the factors referred to above as having been taken into account by the
  special committee, including the receipt by the special committee of the
opinion of DrKW that, based upon and subject to the assumptions and   
limitations stated in the opinion, as of the date of the opinion, the 
   consideration to be received by the holders of shares of our common stock

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 (other than Mikelsons and his affiliates) in the merger is fair to such
    holders from a financial point of view, and the analyses presented by DrKW
   to the special committee, which the board of directors hereby adopts; and

 the fact that the terms and conditions of the merger agreement were the
result of arm's-length negotiations between the special committee and 
Mikelsons and their respective advisors.                              

   The members of your board of directors, including the member of the special
committee, evaluated the merger in light of their knowledge of the business,    
financial condition and prospects of Amtran, and considered the advice of       
financial and legal advisors.                                                   

Your board of directors, including the member of the special committee, 
believes that the merger is procedurally fair because, among other things:      

 the special committee consisted of a director who is not an employee of
Amtran or otherwise an affiliate of Mikelsons and who was appointed to
  represent the interests of the public holders of shares of Amtran common
stock;                                                                

the special committee retained and was advised by S&C, its independent
legal counsel;                                                        

 the special committee retained and was advised by Sommer & Barnard, its
independent Indiana legal counsel;                                    

 the special committee retained and was advised by DrKW, its independent
financial advisor, to assist it in evaluating Mikelsons' proposal;    

 the nature of the deliberations pursuant to which the special committee
evaluated the merger and alternative of rejecting Mikelsons' proposal;

     the per share price to be paid to public holders of shares of Amtran common
stock resulted from active arm's-length bargaining between the special
     committee and its financial advisor, on the one hand, and Mikelsons and his
financial advisor, on the other hand; and                             

the merger is structured to require the approval of the holders of a  
     majority of the shares of Amtran common stock voting at the annual meeting,
other than shares held by INDUS, Mikelsons and Mikelsons affiliates,  
    notwithstanding the fact that under the IBCL the vote of a majority of the
outstanding shares of Amtran common stock is sufficient to approve the
merger.                                                               

    In reaching its determination, the board of directors also took into account
the adverse factors considered by the special committee.                        

   In view of the variety of factors considered by the board of directors, the
board of directors did not find it practicable to, and did not, quantify or     
otherwise attempt to assign specific or relative weights to the factors it      
considered in reaching its determination. In its evaluation of the merger, the  
merger agreement and the plan of merger, the board of directors considered those
factors identified by Instruction 2 to Item 1014 of Regulation S-K, promulgated 
under the Exchange Act as factors that are important in determining the fairness
of a going-private transaction to unaffiliated security holders. The board of   
directors evaluated the $23 per share offer merger consideration against recent 
and historic market prices for the share of Amtran common stock. The board of   
directors also took account of the opinion of DrKW to the special committee     
that, based upon and subject to the various assumptions and limitations set     
forth therein, as of June 18, 2001, the $23 per share to be received by the     
Public Shareholders pursuant to the merger was fair to such Public Shareholders 
from a financial point of view, and the report and analyses presented to the    
special committee in connection therewith. The board of directors did not       
analyze the net book value or going concern value of Amtran in connection with  
their fairness analysis because they believed that such analyses were not       
relevant to companies in the airline industry and that the results of such      
analyses would necessarily be very low and not indicative of the value of       
Amtran. The board of directors also did not consider the liquidation value of   
Amtran in its evaluation because Mikelsons indicated that he was not interested 
in engaging in a transaction to break-up or liquidate Amtran.                   

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 The board of directors considered the advantages and disadvantages of the
only apparently available alternative to the acquisition of the public          
shareholder interest in Amtran by Mikelsons, which was Amtran continuing as a   
publicly held company with Mikelsons maintaining his 72% equity interest in     
Amtran. In the view of the board of directors, the principal advantage of Amtran
continuing as a publicly traded company was that it would allow the Public      
Shareholders to continue to participate in any growth in the value of Amtran    
equity. The disadvantages of Amtran continuing as a publicly traded company that
were considered by the board of directors included the exposure to the risks and
uncertainties attendant to continuing as a publicly traded company in light of  
risks to Amtran's business from rising fuel prices, rising labor costs, the     
rapid integration of new aircraft and the subsequent disposition of a portion of
its current fleet, and the fact that no past airline had successfully moved from
a charter service business to a predominantly scheduled service business. In    
addition, the board of directors considered the fact that Amtran common stock   
has historically traded at a discount to the stocks of other domestic airlines  
due to Amtran's limited public float and the fact that Amtran has a controlling 
shareholder. The board of directors concluded that under all of the relevant    
circumstances, and in light of the $23 per share price in cash, the             
disadvantages of Amtran continuing as a publicly traded company significantly   
outweighed the advantages, and accordingly that alternative was rejected.       

    The foregoing discussion of the information and factors considered and given
weight by the special committee and the board of directors is not intended to be
exhaustive but is believed to include all material factors considered by the    
special committee and your board of directors.                                  

    ON JUNE 18, 2001, YOUR BOARD OF DIRECTORS, BASED ON, AMONG OTHER THINGS, THE
RECOMMENDATION OF THE SPECIAL COMMITTEE, UNANIMOUSLY APPROVED THE MERGER, THE   
MERGER AGREEMENT, THE ILFC AGREEMENT AND THE ILFC AMENDMENT AND ADOPTED THE PLAN
OF MERGER. ON JUNE 18, 2001, THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS   
(A) DETERMINED THAT THE TERMS OF THE MERGER ARE FAIR TO AND IN THE BEST         
INTERESTS OF AMTRAN AND FAIR TO ITS SHAREHOLDERS (OTHER THAN INDUS AND          
MIKELSONS) AND (B) RECOMMENDED THAT HOLDERS OF SHARES OF OUR COMMON STOCK       
(INCLUDING A MAJORITY OF SHARES VOTING AT THE ANNUAL MEETING NOT OWNED BY INDUS,
MIKELSONS OR MIKELSONS AFFILIATES APPROVE THE MERGER, THE PLAN OF MERGER AND THE
MERGER AGREEMENT.                                                               

OPINION OF FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE                           

The special committee retained DrKW to act as its financial advisor in  
connection with the merger. DrKW has delivered a written opinion to the special 
committee, dated June 18, 2001, to the effect that, based on and subject to the 
various assumptions and limitations set forth therein, as of the date thereof,  
the $23.00 per share cash consideration to be received by the Public            
Shareholders (as defined therein) pursuant to the merger was fair to such Public
Shareholders from a financial point of view. DrKW was engaged and acted solely  
as an advisor to the special committee and not as an advisor to or agent of any 
other person, including Amtran. DrKW's opinion is for the benefit and use of the
special committee in its consideration of the merger and may not be used for any
other purpose.                                                                  

THE FULL TEXT OF THE WRITTEN OPINION OF DRKW, DATED JUNE 18, 2001, WHICH
SETS FORTH AMONG OTHER THINGS THE OPINIONS EXPRESSED, THE ASSUMPTIONS MADE,     
PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITATIONS OF THE REVIEW UNDERTAKEN
IN CONNECTION WITH THE OPINION, IS ATTACHED HERETO AS ANNEX C AND SHAREHOLDERS  
ARE URGED TO READ IT IN ITS ENTIRETY. DRKW'S OPINION DOES NOT CONSTITUTE A      
RECOMMENDATION TO ANY SHAREHOLDER AS TO HOW SUCH HOLDER SHOULD VOTE OR OTHERWISE
ACT IN RESPECT OF THE MERGER AGREEMENT OR THE OTHER TRANSACTIONS CONTEMPLATED   
THEREBY AND SHOULD NOT BE RELIED UPON BY ANY SHAREHOLDER IN RESPECT OF SUCH     
MATTERS. THE SUMMARY OF THE OPINION OF DRKW SET FORTH HEREIN, WHICH SETS FORTH  
ALL THE MATERIAL ANALYSES PERFORMED BY DRKW, IS QUALIFIED IN ITS ENTIRETY BY    
REFERENCE TO THE FULL TEXT OF THE OPINION ATTACHED HERETO AS ANNEX C.           

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In connection with rendering its opinion, DrKW, among other things, (i) 
reviewed a draft of the merger agreement, (ii) reviewed and analyzed certain    
publicly available business and financial information relating to Amtran for    
recent years and interim periods to date, as well as certain internal financial 
and operating information, including financial forecasts, analyses and          
projections prepared by or on behalf of Amtran and provided to DrKW for purposes
of its analysis, (iii) met with management of Amtran to review and discuss such 
information and, among other matters, Amtran's business, operations, assets,    
financial condition and future prospects, (iv) reviewed and considered certain  
financial and stock market data relating to Amtran, and compared that data with 
similar data for certain other companies, the securities of which are publicly  
traded, that DrKW believed may be relevant or comparable in certain respects to 
Amtran or one or more of its businesses or assets, (v) reviewed and considered  
the financial terms of certain recent acquisitions and business combination     
transactions in the airline industry specifically, and in other industries      
generally, that DrKW believed to be reasonably comparable to the merger or      
otherwise relevant to its inquiry and (vi) performed such other financial       
studies, analyses, and investigations and reviewed such other information as    
DrKW considered appropriate.                                                    

   In its review and analysis and in formulating its opinion, DrKW assumed and
relied upon the accuracy and completeness of all of the historical financial and
other information provided to or discussed with it or publicly available, and   
DrKW did not assume any responsibility for independent verification of any of   
such information. DrKW also assumed and relied upon the reasonableness and      
accuracy of the financial projections, forecasts and analyses provided to it,   
and DrKW assumed that such projections, forecasts and analyses were reasonably  
prepared in good faith and on bases reflecting the best currently available     
judgments and estimates of Amtran management. DrKW expressed no opinion with    
respect to such projections, forecasts and analyses or the assumptions upon     
which they are based. The Amtran board of directors reviewed the historical     
financial information, and the financial projections, forecasts and analyses    
provided to DrKW and found DrKW's reliance on such materials to be reasonable.  
In addition, DrKW did not review any of the books and records of Amtran, or     
assume any responsibility for conducting a physical inspection of the properties
or facilities of Amtran, or for making or obtaining an independent valuation or 
appraisal of the assets or liabilities of Amtran, and no such independent       
valuation or appraisal was provided to DrKW. DrKW also assumed that the         
transactions described in the merger agreement would be consummated without     
waiver or modification of any of the material terms or conditions contained     
therein by any party thereto. DrKW's opinion was necessarily based on economic  
and market conditions and other circumstances as they existed and could be      
evaluated by it as of the date of such opinion.                                 

In the context of its engagement, DrKW was not authorized to and did not
solicit third party indications of interest in acquiring all or any part of     
Amtran or its assets, or pursue any alternative transactions which may be       
available to Amtran. DrKW expressed no opinion with respect to the values which 
may have been obtained for Amtran in a sale to a third party following an       
auction process.                                                                

 The following is a summary of the report presented by DrKW to the special
committee in connection with the delivery of its opinion on June 18, 2001. A    
copy of the report presented by DrKW to the special committee on June 18, 2001  
has been filed as an Exhibit to the Schedule 13E-3 filed with the SEC by Amtran.
The summary set forth below does not purport to be a complete description of    
DrKW's report. The financial analyses summarized below include information      
presented in tabular format. In order to understand the financial analyses      
fully, the tables must be read together with the text of each summary.          

  DISCOUNTED CASH FLOW ANALYSIS. DrKW performed discounted cash flow ('DCF')
analyses of Amtran based on a base case and five alternative financial forecasts
provided to DrKW by the management of Amtran. The base case considered by DrKW  
(the 'Base Case') was predicated on the forecasts for 2001 through 2005 that    
were developed by Amtran management in May 2001. The Base Case assumed that     
Amtran would succeed in implementing its business plan through 2005, including  
most importantly that Amtran would be able to modernize its fleet successfully  
by adding 49 new aircraft and replacing a number of older aircraft while growing
its scheduled service                                                           

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business. DrKW also considered five alternative cases that Amtran management    
prepared at DrKW's request: (i) a maintenance adjustment case (the 'Maintenance 
Case') which adjusted the Base Case to account for, on a straight line basis,   
certain deferred maintenance expenses related to newly acquired aircraft which  
Amtran projects that it would be required to pay for in the period from 2001    
through 2010, (ii) a fuel adjustment case (the 'Fuel Adjustment Case') which    
adjusted the Base Case to reflect an assumption that jet fuel costs would remain
at the 2001 level of $0.989 per gallon instead of declining to $0.891 per gallon
by 2003, (iii) an increased competition case (the 'Enhanced Competition Case')  
which adjusted the Base Case to reflect an assumption that competition with its 
direct competitors in Midway Airport would cause fares to fall by 5% in those   
markets where Amtran and those competitors directly compete, other than Los     
Angeles, where fares were assumed to decline by 10%, (iv) a recession case (the 
'Recession Case') which adjusted the Base Case to reflect an assumption that the
average revenue per seat mile for Amtran scheduled service business would remain
at the year 2000 level of 7.44 cents rather than increasing at a compounded     
growth rate of 2.0% and (v) a downside case (the 'Downside Case') which adjusted
the Base Case to reflect the simultaneous occurrence of the Recession Case, the 
Enhanced Competition Case and the Fuel Adjustment Case.                         

In performing the DCF analyses, DrKW, using the forecasts as described  
above, discounted Amtran's unlevered free cash flows, which is net income before
interest, taxes and losses incurred on the sale of aircraft (tax-effected), plus
depreciation and amortization, plus cash proceeds from the sale of aircraft,    
less increases in working capital, less capital expenditures over the specified 
forecast period using a range of risk adjusted discount rates between 11.0% and 
13.0%. The sum of the present values of such free cash flows for Amtran was then
added to the present value of the terminal value of Amtran's EBITDA for 2005    
computed using a forward multiple range of EBITDA of 4.0x to 5.5x. Based on this
analysis, DrKW calculated the following implied price per share ranges. The Base
Case resulted in an implied per share DCF value range from (i) $22.13 to $25.08 
using an EBITDA multiple of 4.0x; (ii) $25.06 to $28.26 using an EBITDA multiple
of 4.5x; (iii) $27.99 to $31.43 using an EBITDA multiple of 5.0x; and           
(iv) $30.92 to $34.60 using an EBITDA multiple of 5.5x. The Maintenance Case    
resulted in an implied per share DCF value range from (i) $17.71 to $20.60 using
an EBITDA multiple of 4.0x; (ii) $20.60 to $23.51 using an EBITDA multiple of   
4.5x; (iii) $23.28 to $26.42 using an EBITDA multiple of 5.0x; and (iv) $25.96  
to $29.33 using an EBITDA multiple of 5.5x. The Fuel Adjustment Case resulted in
an implied per share DCF value range from (i) $11.81 to $14.35 using an EBITDA  
multiple of 4.0x; (ii) $14.26 to $17.01 using an EBITDA multiple of 4.5x;       
(iii) $16.71 to $19.66 using an EBITDA multiple of 5.0x; and (iv) $19.17 to     
$22.06 using an EBITDA multiple of 5.5x. The Enhanced Competition Case resulted 
in an implied per share DCF value range from (i) $15.17 to $17.95 using an      
EBITDA multiple of 4.0x; (ii) $17.88 to $20.76 using an EBITDA multiple of 4.5x;
(iii) $20.49 to $23.39 using an EBITDA multiple of 5.0x; and (iv) $22.92 to     
$26.02 using an EBITDA multiple of 5.5x. The Recession Case and the Downside    
Case both resulted in negative discounted cash flow ranges at each of the       
discount rates.                                                                 

In reviewing the DCF analyses for the purposes of its determination of  
fairness, DrKW took into consideration the fact that certain analyses for the   
Base Case, Maintenance Case and Enhanced Competition Case resulted in implied   
per share DCF value ranges greater than $23.00 per share of Amtran common stock.
As discussed below, DrKW believes that its analyses must be considered as a     
whole and that selecting portions of its analyses, without considering the      
analyses taken as a whole, would create an incomplete view of the process       
underlying the analyses performed in reaching its opinion. In addition, DrKW    
considered the results of all such analyses and did not assign relative weights 
to any of the analyses, so that the ranges of valuations resulting from any     
particular analysis described above should not be taken to be DrKW's view of the
actual value of Amtran.                                                         

 COMPARABLE COMPANIES TRADING ANALYSIS. DrKW reviewed and compared certain
financial information of Amtran to corresponding financial information for the  
following six publicly traded major domestic airlines (the 'Major Domestic      
Airlines'):                                                                     

American Airlines, Inc.                                               

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Continental Airlines, Inc.                                            

Delta Air Lines, Inc.                                                 

Northwest Airlines Corporation                                        

Southwest Airlines Co.                                                

UAL Corporation                                                       

  DrKW also reviewed and compared certain financial information of Amtran to
corresponding financial information for the following four publicly traded      
regional and discount domestic airlines (the 'Regional and Discount Domestic    
Airlines):                                                                      

AirTran Holdings, Inc.                                                

Alaska Air Group, Inc.                                                

America West Holdings Corporation                                     

Frontier Airlines, Inc.                                               

DrKW calculated and compared various financial multiples and ratios. The
multiples and ratios were calculated using the closing price for the common     
stock of Amtran and each of the selected companies on June 15, 2001 and were    
based on the most recent publicly available information. The estimated year 2001
and 2002 financial results for Amtran were from the Base Case described above in
' -- Discounted Cash Flow Analysis'. DrKW calculated the following multiples:   

market equity value as a multiple of net income for (i) the latest 12 
months, (ii) estimated year 2001 and (iii) estimated year 2002;       

market equity value as a multiple of book value for (i) the latest 12 
months, (ii) estimated year 2001 and (iii) estimated year 2002;       

adjusted market value, which is market value plus debt less cash, as a
  multiple of sales for (i) the latest 12 months, (ii) estimated year 2001
and (iii) estimated year 2002;                                        

 adjusted market value as a multiple of earnings before interest, taxes,
     depreciation and amortization ('EBITDA') for (i) the latest 12 months, (ii)
estimated year 2001 and (iii) estimated year 2002;                    

adjusted market value as a multiple of EBITDA, as adjusted for engine 
   overhaul costs for (i) the latest 12 months, (ii) estimated year 2001 and
(iii) estimated year 2002;                                            

lease-adjusted market value (defined as adjusted market value plus the
capitalized value of aircraft leases) as a multiple of earnings before
     interest, taxes, depreciation and amortization and rent ('EBITDAR') for (i)
 the latest 12 months, (ii) estimated year 2001 and (iii) estimated year
2002;                                                                 

   adjusted market value as a multiple of earnings before interest and taxes
('EBIT') for (i) the latest 12 months, (ii) estimated year 2001 and   
  (iii) estimated year 2002; Such analyses for the Major Domestic Airlines
are summarized below:                                                 

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                                                        [Enlarge/Download Table]

                                                          MAJOR DOMESTIC AIRLINES       
                                                    ------------------------------------
               PERCENTAGE/MULTIPLE                    RANGE      MEDIAN   MEAN    AMTRAN
               -------------------                    -----      ------   ----    ------
                                                                                        
Market equity value as a multiple of net income                                         
  for the latest 12 months........................  7.3x-20.5x     8.4x    4.0x      NM 
Market equity value as a multiple of Book value                                         
  for the latest 12 Months........................  0.8x-20.4x     1.6x    4.8x    1.8x 
Adjusted market value as a Multiple of sales for                                        
  the latest 12 Months............................   0.5x-2.3x     0.6x    0.8x    0.5x 
Adjusted market value as a Multiple of EBITDA for                                       
  the latest 12 months............................   4.2x-9.9x     4.9x    6.2x    5.2x 
Adjusted market value as a Multiple of Adjusted                                         
  EBITDA for the latest 12 months.................   4.2x-8.8x     4.8x    5.7x    8.8x 
Lease-Adjusted market value as a Multiple of                                            
  EBITDAR for the Latest 12 months................   5.1x-9.7x     6.0x    6.7x    6.2x 
Adjusted market value as a Multiple of EBIT for                                         
  the latest 12 months............................  8.2x-12.6x     9.0x    9.6x      NM 
Market equity value as a multiple of Estimated net                                      
  income for 2001.................................  6.6x-18.5x    15.7x   13.6x      NM 
Market equity value as a multiple of Estimated                                          
  book value for 2001.............................  0.8x-22.1x     1.3x    4.9x    1.8x 
Adjusted market value as a Multiple of estimated                                        
  sales for 2001..................................   0.5x-2.2x     0.5x    0.8x    0.5x 
Adjusted market value as a Multiple of estimated                                        
  EBITDA for 2001.................................  4.8x-10.5x     6.9x    7.2x    4.1x 
Adjusted market value as a Multiple of estimated                                        
  Adjusted EBITDA for 2001........................  4.8x-10.5x     5.8x    6.7x    7.1x 
Lease-Adjusted market value as a Multiple of                                            
  estimated EBITDAR For 2001......................   5.7x-9.6x     7.1x    7.4x    4.5x 
Adjusted market value as a Multiple of estimated                                        
  EBIT for 2001...................................  7.7x-30.8x    13.3x   17.2x   21.8x 
Market equity value as a multiple of Estimated net                                      
  income for 2002.................................  6.5x-32.4x     9.6x   13.5x      NM 
Market equity value as a multiple of Estimated                                          
  book value for 2002.............................   0.7x-6.2x     1.1x    2.1x    1.9x 
Adjusted market value as a Multiple of estimated                                        
  sales for 2002..................................   0.5x-1.9x     0.5x    0.7x    0.4x 
Adjusted market value as a Multiple of estimated                                        
  EBITDA for 2002.................................   4.2x-7.2x     4.7x    5.2x    3.6x 
Adjusted market value as a Multiple of estimated                                        
  Adjusted EBITDA for 2002........................   4.2x-6.5x     4.5x    4.9x    4.8x 
Lease-Adjusted market value as a Multiple of                                            
  estimated EBITDAR for 2002......................   4.8x-7.2x     5.5x    5.9x    3.1x 
Adjusted market value as a Multiple of estimated                                        
  EBIT for 2002...................................  7.7x-22.6x     8.8x   10.9x   13.7x 

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    Such analyses for the Regional and Discount Domestic Airlines are summarized
below:                                                                          

                                                        [Enlarge/Download Table]

                                                    REGIONAL AND DISCOUNT DOMESTIC AIRLINES 
                                                    ----------------------------------------
               PERCENTAGE/MULTIPLE                     RANGE      MEDIAN     MEAN    AMTRAN 
               -------------------                     -----      ------     ----    ------ 
                                                                                            
Market equity value as a multiple of Net income                                             
  for the latest 12 Months........................  6.3x-16.4x      11.4x   11.4x        NM 
Market equity value as a multiple of Book value                                             
  for the latest 12 Months........................  0.5x-36.2x       1.6x   10.0x      1.8x 
Adjusted market value as a Multiple of sales for                                            
  the latest 12 Months............................   0.2x-1.7x       0.5x    0.7x      0.5x 
Adjusted market value as a Multiple of EBITDA for                                           
  the latest 12 months............................  2.7x-11.5x       9.1x    8.1x      5.2x 
Adjusted market value as a Multiple of Adjusted                                             
  EBITDA for the latest 12 months.................   2.7x-9.5x       6.1x    6.1x      8.8x 
Lease-Adjusted market value as a Multiple of                                                
  EBITDAR for the Latest 12 months................   2.7x-9.3x       8.6x    7.3x      6.2x 
Adjusted market value as a Multiple of EBIT for                                             
  the latest 12 months............................  2.9x-12.7x       7.8x    7.8x        NM 
Market equity value as a multiple of Estimated net                                          
  income for 2001.................................  6.3x-11.0x      11.0x   12.5x        NM 
Market equity value as a multiple of Estimated                                              
  book value for 2001.............................   0.5x-8.4x       1.3x    2.9x      1.8x 
Adjusted market value as a Multiple of estimated                                            
  sales for 2001..................................   0.2x-1.4x       0.5x    0.6x      0.5x 
Adjusted market value as a Multiple of estimated                                            
  EBITDA for 2001.................................   2.7x-8.6x       5.5x    5.6x      4.1x 
Adjusted market value as a Multiple of estimated                                            
  Adjusted EBITDA for 2001........................   2.7x-7.5x       5.1x    5.1x      7.1x 
Lease-Adjusted market value as a Multiple of                                                
  estimated EBITDAR For 2001......................   2.7x-8.7x       6.7x    6.2x      4.5x 
Adjusted market value as a Multiple of estimated                                            
  EBIT for 2001...................................  2.9x-12.8x       9.7x    8.5x     21.8x 
Market equity value as a multiple of Estimated net                                          
  income for 2002.................................  5.8x-11.7x       8.6x    8.7x        NM 
Market equity value as a multiple of Estimated                                              
  book value for 2002.............................   0.4x-4.2x       1.1x    1.7x      1.9x 
Adjusted market value as a Multiple of estimated                                            
  sales for 2002..................................   0.2x-1.2x       0.4x    0.5x      0.4x 
Adjusted market value as a Multiple of estimated                                            
  EBITDA for 2002.................................   2.6x-6.1x       3.5x    3.9x      3.6x 
Adjusted market value as a Multiple of estimated                                            
  Adjusted EBITDA for 2002........................   2.8x-6.1x       4.4x    4.4x      4.8x 
Lease-Adjusted market value as a Multiple of                                                
  estimated EBITDAR for 2002......................   1.5x-6.1x       5.6x    4.7x      3.1x 
Adjusted market value as a Multiple of estimated                                            
  EBIT for 2002...................................   2.6x-9.2x       6.8x    6.3x     13.7x 

 DrKW used these comparable company multiples, excluding certain multiples
which DrKW determined were not meaningful, to calculate implied values for the  
shares based on the medians of multiples derived from such transactions. The    
analysis produced an implied per share price, based on the mean of the Major    
Domestic Airlines' multiples, of, (i) for the latest twelve months, $16.41 based
on book value, $24.79 based on sales, $16.19 based on EBITDA, and $14.64 based  
on EBITDAR, (ii) for the estimated year 2001, $13.70 based on book value, $25.22
based on sales, $54.59 based on EBITDA, $8.25 based on Adjusted EBITDA and      
$70.98 based on EBITDAR, and (iii) for the estimated year 2002, $11.25 based on 
book value, $35.24 based on sales, $33.88 based on EBITDA, $14.71 based on      
Adjusted EBITDA and $91.90 based on EBITDAR. The analysis also produced an      
implied per share price, based on the mean of the Regional and Discount Domestic
Airlines' multiples, of, (i) for the latest twelve months, $16.68 based on book 
value, $15.55 based on sales, $59.66 based on EBITDA, $1.63 based on Adjusted   
EBITDA and                                                                      

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$57.50 based on EBITDAR, (ii) for the estimated year 2001, $13.41 based on book 
value, $15.96 based on sales, $36.99 based on EBITDA, $2.67 based on Adjusted   
EBITDA and $62.16 based on EBITDAR, and (iii) for the estimated year 2002,      
$10.56 based on book value, $18.21 based on sales, $16.04 based on EBITDA,      
$13.59 based on Adjusted EBITDA and $94.69 based on EBITDAR.                    

  In reviewing the comparable companies trading analysis for the purposes of
its determination of fairness, DrKW took into consideration the fact that       
certain of the analyses produced implied per share values greater than $23.00   
per share. DrKW believes that the wide range of implied share values resulting  
from the comparable companies trading analysis are the result of differences in 
fleet composition, fleet size, leverage, competitive factors and cost structures
among different airlines. As discussed below, DrKW believes that its analyses   
must be considered as a whole and that selecting portions of its analyses,      
without considering the analyses taken as a whole, would create an incomplete   
view of the process underlying the analyses performed in reaching its opinion.  
In addition, DrKW considered the results of all such analyses and did not assign
relative weights to any of the analyses, so that the ranges of valuations       
resulting from any particular analysis described above should not be taken to be
DrKW's view of the actual value of Amtran.                                      

   COMPARABLE TRANSACTIONS ANALYSIS. DrKW reviewed transactions in the airline
industry from March 20, 1997 until March 9, 2001. For each transaction, DrKW    
calculated the multiple of the adjusted purchase price, which is the purchase   
price attributable to the equity interest of the target company plus the target 
company's debt less cash, paid in each transaction as a multiple of the target's
(i) latest 12 months' sales, (ii) latest 12 months' EBITDA and (iii) latest 12  
months' EBIT, and the purchase price attributable to the equity interest of the 
target company to the target's (iv) latest 12 months' net income, and (v) book  
value.                                                                          

  The analysis of these transactions, excluding certain multiples which DrKW
determined were not meaningful, yielded a range of multiples of adjusted        
purchase price to (i) latest 12 months' sales of 0.1x to 3.0x, (ii) latest 12   
months' EBITDA of 2.5x to 22.9x, and (iii) latest 12 months' EBIT of 3.3x to    
12.9x, and a range of multiples of purchase price to (iv) latest 12 months' net 
income of 3.3x to 33.0x, and (v) book value of 0.6x to 4.1x. DrKW used these    
comparable transaction multiples to calculate implied values for the shares     
based on the ranges of multiples derived from such transactions. The per share  
value implied by this analysis ranged from $20.73 to $46.08.                    

 In reviewing the comparable transactions analysis for the purposes of its
determination of fairness, DrKW took into consideration the fact that certain of
the analyses produced implied per share values greater than $23.00 per share. As
discussed below, DrKW believes that its analyses must be considered as a whole  
and that selecting portions of its analyses, without considering the analyses   
taken as a whole, would create an incomplete view of the process underlying the 
analyses performed in reaching its opinion. In addition, DrKW considered the    
results of all such analyses and did not assign relative weights to any of the  
analyses, so that the ranges of valuations resulting from any particular        
analysis described above should not be taken to be DrKW's view of the actual    
value of Amtran.                                                                

   PRESENT VALUE OF HYPOTHETICAL FUTURE STOCK PRICE ANALYSIS. DrKW performed a
present value of hypothetical future stock price analysis using the Base Case   
and the Maintenance Case in order to derive an implied equity value reference   
range for Amtran. The future stock price range was determined by applying a P/E 
multiple range of 8.0x-12.0x. These P/E multiples were chosen because they were 
within the range of historic P/E trading multiples for the shares of Amtran and 
the comparable companies. This hypothetical future stock price was then         
discounted at a levered cost of equity ranging from 15%-20%. The per share value
implied by this analysis for the Base Case ranged from $17.07 to $39.02. The per
share value implied by this analysis for the Maintenance Case ranged from $9.51 
to $31.26.                                                                      

LEVERAGED RECAPITALIZATION ANALYSIS. DrKW also performed an analysis of 
Amtran's ability to finance, by incurring additional debt, the repurchase of    
approximately 3.1 million shares, representing the shares held by the Public    
Shareholders, and the cash out of options at various repurchase prices. This    
analysis implied that Amtran could reasonably incur additional debt to          

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finance the purchase of approximately 3.1 million shares and cash out certain   
options at a purchase price of $23.00 per share as contemplated by the terms of 
the merger. However, DrKW's opinion did not address the solvency of Amtran      
following consummation of the merger, or at any time, nor did DrKW address      
issues regarding fraudulent conveyance or fraudulent transfer, and DrKW has been
advised that Amtran has arranged to receive an opinion with respect to all of   
such matters from Houlihan, Lokey, Howard and Zukin.                            

   STOCK PRICE AND PREMIUM ANALYSIS. DrKW reviewed 32 acquisition transactions
by majority shareholders of publicly held minority interests with values ranging
from $73 million to $2.7 billion to derive a range of premiums paid over the    
public trading prices per share one day, one week and four weeks prior to the   
announcement of such transactions since January 1, 1997. In connection          
therewith, DrKW noted, among other things, that (i) the reasons for, and        
circumstances surrounding, each of the transactions analyzed were diverse,      
(ii) the characteristics of the companies and parties involved were not         
necessarily comparable to those of Amtran and INDUS and (iii) premiums fluctuate
based on perceived growth, synergies, strategic value, the type of consideration
utilized in the transaction, information in the securities markets and other    
factors.                                                                        

 The foregoing analyses indicated that the medians of premiums paid in the
transactions over the public per share trading prices one day, 30 days, 60 days 
and 90 days prior to the announcement of such transactions were 24.5%, 31.5%,   
28.2% and 26.5%, respectively, resulting in implied per share values of $15.69, 
$12.66, $15.06 and $18.02, respectively. The $23.00 price represents a premium  
of 82.5% over the closing price per share on May 16, 2001, the last trading day 
prior to the announcement of Mikelson's initial proposal to acquire all shares  
not owned by him at $21.00 per share, and premiums over the closing price of the
shares 30 days, 60 days and 90 days prior to such date of 139.0%, 95.7% and     
61.4%, respectively. The $23.00 price also represents a premium of 39.4% over   
the $16.50 closing price of the shares 1 year prior to the announcement date, a 
time when the shares of airline stocks in general were trading at higher levels 
than they are currently trading.                                                

CERTAIN GENERAL MATTERS. No company or transaction used in the foregoing
analyses was substantially comparable to Amtran or the merger. In addition,     
those analyses and the discounted cash flow analyses are based and are heavily  
dependent upon, among other factors, assumptions as to future performance and   
other factors, and are therefore subject to the limitations described in DrKW's 
opinion. Accordingly, an analysis of the results of the foregoing is not        
entirely mathematical; rather, it involves complex considerations and judgments 
concerning differences in financial and operating characteristics of the        
companies and other factors that could affect the acquisition value or the      
public trading value of the companies to which they are being compared and      
Amtran.                                                                         

   A fairness analysis is a complex process and is not necessarily susceptible
to a partial analysis or summary description. DrKW believes that its analyses   
must be considered as a whole and that selecting portions of its analyses,      
without considering the analyses taken as a whole, would create an incomplete   
view of the process underlying the analyses performed in reaching its opinion.  
In addition, DrKW considered the results of all such analyses and did not assign
relative weights to any of the analyses, so that the ranges of valuations       
resulting from any particular analysis described above should not be taken to be
DrKW's view of the actual value of Amtran.                                      

  In performing its analyses, DrKW made numerous assumptions with respect to
industry performance, general business and economic conditions and other        
matters, many of which are beyond the control of Amtran. The analyses performed 
by DrKW are not necessarily indicative of actual values, which may be           
significantly more or less favorable than suggested by such analyses. Such      
analyses were prepared solely as part of DrKW. The analyses do not purport to be
appraisals or to reflect the prices at which a company might actually be sold.  

    The special committee retained DrKW based upon its experience and expertise.
DrKW is an internationally recognized investment banking and advisory firm.     
DrKW, as part of its investment banking business, is continuously engaged in the
valuation of businesses and securities in connection with mergers and           
acquisitions, negotiated underwritings, competitive biddings, secondary         
distributions of listed and unlisted securities, private placements and         
valuations for corporate and                                                    

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other purposes. In the course of its market-making and other trading activities,
DrKW and its affiliates may, from time to time, have a long or short position   
in, and may buy and sell, securities of Amtran.                                 

DRKW ENGAGEMENT AGREEMENT. Pursuant to the terms of a letter agreement, 
dated May 8, 2001, between DrKW and Amtran (the 'DrKW Letter Agreement'), the   
special committee retained DrKW to serve as its financial advisor with respect  
to any transaction considered by the special committee pursuant to which        
Mikelsons or any affiliate acquires all of the outstanding capital stock of     
Amtran held by the Public Shareholders (the 'Proposal'). The DrKW Letter        
Agreement provides that Amtran will pay DrKW $100,000 upon the execution of the 
DrKW Letter Agreement and $800,000 at such time as DrKW rendered an opinion to  
the special committee with respect to the adequacy or fairness from a financial 
point of view of the consideration to be paid pursuant to the proposal, or at   
such time as DrKW advises the special committee that it is unable to render such
an opinion. In addition, pursuant to the terms of an indemnification agreement, 
dated May 8, 2001, Amtran is obligated to indemnify DrKW (and its affiliates,   
their respective directors, officers, agents, employees and controlling persons)
against certain liabilities arising out of or in connection with DrKW's         
engagement, including liabilities under the federal securities laws.            

    This summary is not a complete description of the analysis performed by DrKW
and is qualified by reference to the written opinion of DrKW set forth in       
Annex C to this proxy statement and to DrKW's report to the special committee   
included as Exhibit (c)(2) to the Schedule 13E-3 filed with the SEC on June 29, 
2001, by Amtran, INDUS and Mikelsons, of which this proxy statement constitutes 
a part. A copy of DrKW's report to the special committee will be made available 
for inspection and copying at our principal executive offices during our regular
business hours by any interested holder of shares of our common stock or        
representative of any such holder (who has been so designated in writing). We   
will also furnish by mail a copy of DrKW's report to the special committee to   
any interested holder of shares of our common stock or representative of any    
such holder (who has been so designated in writing) upon written request and at 
the expense of the requesting holder of shares of our common stock.             

POSITION OF MIKELSONS AND INDUS REGARDING FAIRNESS OF THE MERGER                

Mikelsons and INDUS believe that the terms of the merger are fair to the
holders of shares of our common stock (other than Mikelsons and his affiliates).
Mikelsons and INDUS base their belief on the following factors, each of which,  
in their view, supported that conclusion:                                       

the conclusions and recommendation of the special committee;          

the factors referred to above as having been taken into account by the
  special committee and the board of directors, including that the special
committee received an opinion from DrKW that, as of the date of that  
  opinion and subject to the assumptions and limitations discussed in that
   opinion, the consideration of $23 in cash per share of common stock to be
     received by the holders of shares of our common stock (other than Mikelsons
    and his affiliates) in the merger is fair to such holders from a financial
point of view, which Mikelsons and INDUS hereby adopt;                

    the merger price represents a premium of (a) 82.5% to the closing price of
Amtran common stock on May 16, 2001, the last trading day prior to    
 announcement of Mikelsons' proposal, (b) 122.4% to the closing price of
   Amtran common stock on May 9, 2001, one week prior to the announcement of
  Mikelsons' proposal and (c) 130.9% to the closing price of Amtran common
     stock on April 16, 2001, four weeks prior to the announcement of Mikelsons'
  proposal, which, in each case, exceeds the median premiums paid in other
   minority buy-out transactions; as contained in DrKW's presentation to the
special committee, the median premiums paid in other minority buy-out 
  transactions are: (a) 26% for one day prior to announcement, (b) 29% for
one week prior to announcement and (c) 31% for four weeks prior to    
announcement;                                                         

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    the difficulty of forecasting Amtran's performance over a 5-year period in
    light of the degree of variability and uncertainty inherent in the airline
industry;                                                             

     $23 per share exceeds the average price per share paid by Amtran for shares
     of its common stock during the past two years and, in particular, the price
   per share paid by Amtran in purchases of shares of its common stock since
the third quarter of 1999; see 'Prior Stock Purchases by Amtran' for  
information concerning prior stock purchases by Amtran; and           

     declines in revenues and operating performance of Amtran and other domestic
airlines during the first two fiscal quarters of 2001.                

In reaching their determinations that the merger is fair, Mikelsons and 
INDUS also recognized and considered the adverse factors considered by the      
special committee.                                                              

    In view of the variety of factors considered by Mikelsons and INDUS, neither
Mikelsons nor INDUS found it practicable to, and did not, quantify or otherwise 
attempt to assign specific or relative weights to the factors considered in     
reaching their determinations. In their evaluation of the merger, the merger    
agreement and the plan of merger, Mikelsons and INDUS considered those factors  
identified by Instruction 2 to Item 1014 of Regulation S-K, promulgated under   
the Exchange Act as factors that are important in determining the fairness of a 
going-private transaction to unaffiliated security holders. Mikelsons and INDUS 
evaluated the $23 per share merger consideration against recent and historic    
market prices for the shares of Amtran common stock. Mikelsons and INDUS also   
took account of the opinion of DrKW to the special committee that, based upon   
and subject to the various assumptions and limitations set forth therein, as of 
June 18, 2001, the $23 per share to be received by the Public Shareholders      
pursuant to the merger was fair to such Public Shareholders from a financial    
point of view, and the report and analyses presented to the special committee in
connection therewith. Mikelsons and INDUS did not analyze the net book value or 
going concern value of Amtran in connection with their fairness analysis.       
Neither Mikelsons nor INDUS considered the liquidation value of Amtran in their 
evaluation of fairness because Mikelsons indicated that he was not interested in
engaging in a transaction to break-up or liquidate Amtran.                      

Mikelsons and INDUS considered the advantages and disadvantages of the  
alternative to the acquisition of the public shareholder interest in Amtran by  
Mikelsons, which was Amtran continuing as a publicly held company with Mikelsons
maintaining his 72% equity interest in Amtran. In the view of Mikelsons and     
INDUS, the principal advantage of Amtran continuing as a publicly traded company
was that it would allow public shareholders to continue to participate in any   
growth in the value of Amtran equity. The disadvantages to public shareholders  
of Amtran continuing as a publicly traded company that were considered by       
Mikelsons and INDUS included the exposure to the risks and uncertainties        
attendant to continuing as a publicly traded company in light of risks to       
Amtran's business from rising fuel prices, rising labor costs, the rapid        
integration of new aircraft and the subsequent disposition of a portion of its  
current fleet, and the fact that no past airline had successfully moved from a  
charter service business to a predominantly scheduled service business. In      
addition, Mikelsons and INDUS considered the fact that Amtran common stock has  
historically traded at a discount to the stocks of other domestic airlines due  
to Amtran's limited public float and the fact that Amtran has a controlling     
shareholder.                                                                    

    After consulting with their financial and legal advisors with respect to the
merger, including, without limitation, the factors discussed above, Mikelsons   
and INDUS concluded that the merger was fair to the holders of shares of Amtran 
common stock (other than Mikelsons and his affiliates).                         

Although Salomon Smith Barney provided financial advisory services to   
Mikelsons in connection with the merger including assisting in negotiations with
DrKW, Salomon Smith Barney was not requested to, and did not, evaluate or render
an opinion as to the fairness, from a financial point of view, of the           
consideration per share to be paid in the merger.                               

Mikelsons and INDUS believe that the merger is procedurally fair to the 
holders of shares of Amtran common stock (other than Mikelsons and his          
affiliates) for the reasons set forth above under ' -- Fairness of the          
Merger -- Board of Directors', which Mikelsons and INDUS hereby adopt.          

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  This discussion of the information and factors considered and given weight
by Mikelsons and INDUS is not intended to be exhaustive but is believed to      
include all material factors considered by Mikelsons and INDUS.                 

PROJECTIONS                                                                     

May 2001 Projections                                                            

Amtran management produces 5-year plans as part of its ongoing strategic
planning process. These 5-year plans are periodically updated by Amtran's       
management. On May 18, 2001, Amtran management provided a version of this 5-year
plan dated May 16, 2001, to DrKW, the special committee, Salomon Smith Barney,  
Citicorp and Bank One, NA. Prior drafts and versions of this plan were supplied 
to the same parties.                                                            

 On May 25, 2001, representatives of DrKW requested that Amtran management
prepare additional 5-year plans containing various scenarios different from     
those contained in management's base case. During the preparation of those      
alternative cases on May 29, 2001, Amtran management discovered a calculation   
error in the model used in the preparation of the May 16 plan. Copies of this   
plan, which is identical to the May 16 plan other than changes resulting from of
the correction of the calculation error, were made available to Salomon Smith   
Barney, Citicorp, DrKW and the special committee on May 31, 2001. The base case 
contained in the May 31 plan contained the following estimates of Amtran's      
future (i) operating revenues, (ii) earnings before interest, taxes,            
depreciation, amortization and rents, (iii) earnings before interest, taxes,    
depreciation and amortization and (iv) net income:                              

                                                        [Enlarge/Download Table]

                                            PROJECTED  PROJECTED     PROJECTED   PROJECTED  PROJECTED
                                              2001        2002         2003        2004       2005   
                                              ----        ----         ----        ----       ----   
                                                             (DOLLARS IN MILLIONS)                   
                                                                                                     
Operating revenues......................... $1,385.0    $1,666.7     $1,941.7    $2,107.1   $2,182.8 
Earnings before interest, taxes,                                                                     
  depreciation, amortization and rents.....    297.3       424.5        525.8       533.0      491.0 
Earnings before interest, taxes,                                                                     
  depreciation and amortization............ $  165.2       197.3        243.0       226.5      168.1 
Net income (loss)..........................      3.6         2.4         44.0        65.6       46.8 

   On May 31, 2001, Amtran management also provided copies of the 5-year plans
reflecting the various scenarios to Salomon Smith Barney, DrKW and the special  
committee. The alternative scenarios presented by Amtran management included:   

Maintenance adjustment. This plan reflects the normalization of the     
maintenance expenses throughout the period covered to reflect the fact that     
maintenance costs will be abnormally low during the period from 2002 to 2005 due
to the rapid transition to a younger fleet. The maintenance adjusted plan       
contains the following estimates of Amtran's future (i) operating revenues,     
(ii) earnings before interest, taxes, depreciation, amortization and rents,     
(iii) earnings before interest, taxes, depreciation and amortization and        
(iv) net income:                                                                

                                                        [Enlarge/Download Table]

                                            PROJECTED  PROJECTED     PROJECTED  PROJECTED  PROJECTED
                                              2001        2002         2003       2004       2005   
                                              ----        ----         ----       ----       ----   
                                                       (DOLLARS IN MILLIONS)                        
                                                                                                    
Operating revenues......................... $1,385.0    $1,666.7     $1,941.7   $2,107.1   $2,182.8 
Earnings before interest, taxes,                                                                    
  depreciation, amortization and rents.....    294.3       405.4        498.7      513.4      479.0 
Earnings before interest, taxes,                                                                    
  depreciation and amortization............    162.1       172.2        215.9      207.0      156.0 
Net income (loss)..........................      1.2        (9.6)        27.1       53.4       39.3 

    Fuel adjustment: This plan assumes that fuel costs remain at constant levels
throughout the five-year period covered (rather than the assumption that fuel   
costs will decline during that period which is the assumption contained in the  
base case). The fuel adjusted plan contains the following estimates of Amtran's 
future (i) operating revenues, (ii) earnings before interest, taxes,            

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depreciation, amortization and rents, (iii) earnings before interest, taxes,    
depreciation and amortization and (iv) net income:                              

                                                        [Enlarge/Download Table]

                                            PROJECTED  PROJECTED     PROJECTED  PROJECTED  PROJECTED
                                              2001        2002         2003       2004       2005   
                                              ----        ----         ----       ----       ----   
                                                       (DOLLARS IN MILLIONS)                        
                                                                                                    
Operating revenues......................... $1,385.0    $1,666.7     $1,941.7   $2,107.1   $2,182.8 
Earnings before interest, taxes,                                                                    
  depreciation, amortization and rents.....    297.3       396.9        490.3      495.2      451.5 
Earnings before interest, taxes,                                                                    
  depreciation and amortization............    165.2       163.7        207.4      188.8      128.6 
Net income (loss)..........................      3.6       (15.0)        21.8       41.9       22.0 

Enhanced competition adjustment: This plan assumes that in response to  
Amtran's expansion at Midway Airport and refleeting, Amtran's competitors       
increase their level of direct competition with Amtran (as reflected by         
reductions in Amtran's revenues on routes on which it competes directly with its
largest competitors at Midway). The enhanced competition scenario contains the  
following estimates of Amtran's future (i) revenues, (ii) earnings before       
interest, taxes, depreciation, amortization and rents, (iii) earnings before    
interest, taxes, depreciation and amortization and (iv) net income:             

                                                        [Enlarge/Download Table]

                                            PROJECTED  PROJECTED     PROJECTED  PROJECTED  PROJECTED
                                              2001        2002         2003       2004       2005   
                                              ----        ----         ----       ----       ----   
                                                       (DOLLARS IN MILLIONS)                        
                                                                                                    
Operating revenues......................... $1,385.0    $1,642.1     $1,916.5   $2,080.8   $2,155.4 
Earnings before interest, taxes,                                                                    
  depreciation, amortization and rents.....    297.3       401.7        501.9      507.2      463.6 
Earnings before interest, taxes,                                                                    
  depreciation and amortization............    165.2       168.5        219.1      200.8      140.7 
Net income.................................      3.6       (12.0)        29.1       49.5       29.6 

    Recession adjustment: This plan assumes that there is a recession during the
5-year period (as reflected by reductions in Amtran's revenues generally). The  
recession adjusted plan contains the following estimates of Amtran's future     
(i) operating revenues, (ii) earnings before interest, taxes, depreciation,     
amortization and rents, (iii) earnings before interest, taxes, depreciation and 
amortization and (iv) net income:                                               

                                                        [Enlarge/Download Table]

                                            PROJECTED  PROJECTED     PROJECTED   PROJECTED  PROJECTED
                                              2001        2002         2003        2004       2005   
                                              ----        ----         ----        ----       ----   
                                                             (DOLLARS IN MILLIONS)                   
                                                                                                     
Operating revenues......................... $1,346.4    $1,602.0     $1,857.9    $2,011.0   $2,081.3 
Earnings before interest, taxes,                                                                     
  depreciation, amortization and rents.....    258.4       358.4        439.5       431.3      381.2 
Earnings before interest, taxes,                                                                     
  depreciation and amortization............    126.2       125.1        156.7       124.9       58.3 
Net income.................................    (19.8)      (39.1)       (10.1)        1.8      (22.0)

Downside case: This plan reflects the impact of all of the adjustments  
contained in the fuel adjusted case, the enhanced competition adjusted case and 
the recession case. The downside case contains the following estimates of       
Amtran's future (i) operating revenues, (ii) earnings before interest, taxes,   
depreciation, amortization, and rents, (iii) earnings before interest, taxes,   
depreciation and amortization and (iv) net income:                              

                                                        [Enlarge/Download Table]

                                            PROJECTED  PROJECTED     PROJECTED   PROJECTED  PROJECTED
                                              2001        2002         2003        2004       2005   
                                              ----        ----         ----        ----       ----   
                                                             (DOLLARS IN MILLIONS)                   
                                                                                                     
Operating revenues......................... $1,346.4    $1,578.9     $1,834.4    $1,986.3   $2,055.7 
Earnings before interest, taxes,                                                                     
  depreciation, amortization and rents.....    258.4       309.8        381.7       369.7      316.2 
Earnings before interest, taxes,                                                                     
  depreciation and amortization............    126.2        76.6         98.9        63.3       (6.8)
Net income                                     (19.8)      (69.6)       (46.3)      (36.8)     (62.8)

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   Certain information concerning the projections. Amtran does not as a matter
of course make public its projections as to future performance or earnings. The 
projections referred to above were not prepared with a view to public           
disclosure, and are included in this proxy statement because such information   
was not otherwise publicly available and was provided to Mikelsons, Salomon     
Smith Barney, Citicorp, Bank One, NA, the alternative financial advisor, DrKW   
and the special committee. The projections were not prepared with a view to     
compliance with published guidelines of the SEC, the guidelines established by  
the American Institute of Certified Public Accountants regarding projections or 
forecasts, or generally accepted accounting principles. Neither the independent 
auditors of Amtran, nor any other independent accountants, have compiled,       
examined or performed any procedures with respect to the projections. The       
projections were not prepared with the approval of the Amtran board of directors
or the special committee.                                                       

  The projections are forward-looking statements that are subject to certain
risks and uncertainties and should be read with caution. See 'Cautionary        
Statement Concerning Forward-Looking Information' on page of this proxy         
statement. The projections are subjective in many respects and thus susceptible 
to interpretation and periodic revision based on actual experience and recent   
developments. While presented with numeric specificity, the projections reflect 
numerous assumptions made by Amtran's management with respect to its refleeting 
initiative, the expansion of its operations at Midway Airport, fuel prices,     
industry performance and competition, general business, economic, market and    
financial conditions and other matters, including assumed interest rates and    
effective tax rates consistent with historical levels for Amtran, all of which  
are difficult to predict, many of which are beyond Amtran's control.            
Accordingly, it is highly likely that Amtran's actual performance will vary from
the assumptions made in preparing the projections and that the variations will  
be both substantial and material to the forecasted results. As a result, actual 
results may be materially greater or less than those contained in the           
projections.                                                                    

   For these reasons, the inclusion of the projections in this document should
not be regarded as an indication that Amtran, any recipient of the projections  
or their respective affiliates or representatives, considered or consider the   
projections to be a reliable prediction of future events, and the projections   
should not be relied upon as such. Neither INDUS nor Mikelsons nor any of their 
respective affiliates or representatives has made, or makes, any representation 
to any person regarding the information contained in the projections. Except to 
the extent required under the federal securities laws, Amtran does not intend to
make publicly available any update or other revisions to the projections to     
reflect circumstances existing after the date of the preparation of the         
projections or the occurrence of future events even in the event that any or all
of the assumptions are shown to be in error.                                    

PLANS FOR AMTRAN AFTER THE MERGER                                               

Mikelsons presently intends to continue to own all the common stock of  
Amtran after the merger (other than shares of our common stock which may be     
issued in the future upon exercises of stock options or the conversion of       
shares of Series B preferred stock) and for Amtran to continue to operate       
as a holding company for its operating subsidiaries.                            

    Except as otherwise described in this proxy statement, none of Amtran, INDUS
and Mikelsons has any current plans or proposals or negotiations which relate to
or would result in:                                                             

   other than the merger pursuant to the merger agreement, any extraordinary
transaction, such as a merger, reorganization or liquidation involving
Amtran or its subsidiaries;                                           

    any purchase, sale or transfer of a material amount of assets of Amtran or
its subsidiaries;                                                     

   any change in the management of Amtran or any change in any material term
of the employment contract of any executive officer; or               

     any other material change in the corporate structure or business of Amtran.

  Nevertheless, Amtran may initiate from time to time reviews of its assets,
corporate structure, capitalization, operations, properties, management and     
personnel to determine what changes, if any,                                    

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would be desirable following the merger. Amtran expressly reserves the right to 
make any changes that it deems necessary or appropriate in light of its review  
or in light of future developments.                                             

CERTAIN EFFECTS OF THE MERGER                                                   

 As a result of the merger, Mikelsons will own all the common stock of the
surviving corporation (other than shares of our common stock which may be issued
in the future upon exercises of stock options or the conversion of Series B     
preferred stock). The outstanding preferred stock of Amtran, which consists of  
the Series A1 preferred stock, without par value, and the Series B preferred    
stock, will remain outstanding. As of June 28, 2001, there were 500 shares of   
Series A1 preferred stock, all held by Boeing Capital Corporation and 300 shares
of Series B preferred stock, all held by ILFC. Following the merger, holders of 
shares of Amtran common stock other than Mikelsons, officers of Amtran (who may 
acquire shares of our common stock in the future upon the exercise of stock     
options) and ILFC (who may acquire shares of our common stock in the future     
upon conversion of shares of Series B preferred stock) will no longer benefit   
from any increases in the value of the surviving corporation and will no longer 
bear the risk of any decreases in the value of the surviving corporation. In    
addition, following the merger, the interest of Mikelsons in the net book value 
of the surviving corporation and net income or loss will increase to 100% from  
a current level of approximately 72%. Following the merger, in dollar terms,    
Mikelsons' interest in Amtran's book value as of the end of the quarter ended   
March 31, 2001 will increase to $119.6 million from $86.9 million and his       
interest in Amtran's 2000 fiscal year net loss will increase to $15.7 million   
from $10.9 million.                                                             

   As a result of the merger, all outstanding options to acquire shares of our
common stock other than those held by 19 officers of Amtran will be canceled.   
All unvested stock options issued to our officers and certain stock options     
issued to non-officers automatically vested upon the approval of the merger by  
your board of directors. The compensation committee of your board of directors  
will adopt a resolution providing that all stock options (other than those held 
by the 19 officers whose options will remain outstanding following the merger   
that are outstanding immediately prior to the closing of the merger will be     
canceled in exchange for a cash payment equal to the excess, if any, of $23 over
the exercise price of those options multiplied by the number of shares of our   
common stock covered by those options, and that all outstanding stock options   
with an exercise price in excess of $23 per share will be canceled without any  
cash payment. In the aggregate, our employees other than the 19 officers        
described in the following paragraph) hold options to purchase 585,278 shares   
of Amtran common stock with an average exercise price of $11.59 per share.      

We have agreed in the merger agreement to enter into option modification
agreements with 19 of our officers providing that these officers will not       
exercise their options prior to the merger and that their stock options will    
remain outstanding following the merger. In the aggregate, these 19 officers    
hold options to purchase 1,749,464 shares of Amtran common stock with an average
exercise price of $11.31. The terms of the modifications to the stock options   
of these 19 Amtran officers are fully described in this proxy statement under   
the heading ' -- Interests of Certain Persons in the Merger'.                   

   Following the merger, Mikelsons, the remaining optionholders and ILFC (upon
conversion of their shares of Series B preferred stock) will benefit from any   
increases in the value of Amtran and also bear the risk of any decreases in the 
value of Amtran.                                                                

  Shares of our common stock will cease to be authorized to be quoted on the
Nasdaq following the merger and will, therefore, be removed from quotation on   
the Nasdaq. The common stock is currently registered under Section 12(g) of the 
Exchange Act. Registration under the Exchange Act may be terminated upon        
application of Amtran to the SEC if such securities are not listed on a national
securities exchange or quoted on Nasdaq and there are fewer than 300 record     
holders of such securities. Termination of registration of our common stock     
under the Exchange Act would mean certain provisions of the Exchange Act, such  
as the short-swing trading provisions of Section 16(b), the requirement to file 
periodic reports, the requirement of furnishing a proxy statement in connection 
with shareholders' meetings pursuant to Section 14(a) and the requirements of   
Rule 13e-3 under the Exchange Act with respect to 'going private' transactions, 
would no longer be applicable to Amtran. In addition, 'affiliates' of Amtran and
persons holding                                                                 

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'restricted securities' of Amtran might as a result be deprived of the ability  
to dispose of such securities pursuant to Rule 144 promulgated under the        
Securities Act of 1933, as amended. It is the present intention of Mikelsons to 
seek to cause Amtran to make an application for the termination of the          
registration of our common stock under the Exchange Act as soon as practicable  
after the effective time of the merger.                                         

SOURCE AND AMOUNT OF FUNDS                                                      

The total amount of funds required to pay the merger consideration, make
cash payments for canceled options and pay related fees and expenses is         
approximately $87 million. The fees and expenses expected to be incurred in     
connection with the merger are described in greater detail in 'Estimated Fees   
and Expenses of the Merger'. In addition, we will purchase between 5 and 10% of 
ILFC's shares of Series B preferred stock pursuant to the ILFC Agreement in     
exchange for a note due January 15, 2002 with an annual interest rate of 7.38%. 
Assuming that we purchase 5% of ILFC's shares of Series B preferred stock, the  
aggregate principal amount of this note will be approximately $2.2 million.     

ATA has received a letter dated June 18, 2001 (the 'Commitment Letter'),
from Salomon Smith Barney and Citicorp with respect to a $175 million 3-year    
reducing revolving credit facility ('Secured Credit Facility'). In this letter, 
Citicorp committed to provide the Secured Credit Facility, subject to terms and 
conditions set forth therein, including Citicorp's right to syndicate the       
Secured Credit Facility. On June 18, 2001, Bank One, NA agreed to commit $87.5  
million of the $175 million Secured Credit Facility, act as administrative agent
and take an active role, through its affiliate, Banc One Capital Markets, Inc., 
in the syndication of the Secured Credit Facility. Salomon Smith Barney and     
Citicorp are affiliates of each other.                                          

  The Secured Credit Facility will be used to finance the acquisition of all
the outstanding public shares of our common stock other than those owned by     
Mikelsons and INDUS, to pay related transaction fees and expenses, to purchase  
rotables and to provide for the ongoing working capital needs and general       
corporate purposes of Amtran and its subsidiaries. The amount available for the 
acquisition of shares of our common stock shall not exceed $82.0 million in the 
aggregate.                                                                      

   The commitment under the Commitment Letter is conditioned upon, among other
things, (i) Citicorp not discovering or otherwise becoming aware of information 
about Amtran that Citicorp reasonably believes to be materially inconsistent    
with its understanding as of June 18 of Amtran and its business, (ii) the       
preparation, execution and delivery of mutually acceptable loan documentation,  
(iii) the absence of (a) any material adverse change in the business, condition 
(financial or otherwise), operations or properties of Amtran and its            
subsidiaries, taken as a whole, since December 31, 2000 and (b) any change in   
market conditions that would impair the syndication of the Secured Credit       
Facility, (iv) the accuracy and completeness in all materials respects of       
Amtran's representations and warranties in the Commitment Letter and of all     
information furnished by Amtran to Citicorp and Salomon Smith Barney and        
(v) the payment in full of all fees, expenses and other amounts payable under   
the Commitment Letter.                                                          

The execution of the Secured Credit Facility is conditioned upon, among 
other things, customary conditions for facilities of this nature, including     
(i) the preparation, execution and delivery of mutually acceptable loan         
documentation, (ii) creation and perfection of liens granted over the collateral
for the Secured Credit Facility, (iii) the roll-over of equity options being    
acceptable to Salomon Smith Barney, (iv) the completion of legal due diligence  
in connection with the transactions, and due diligence with respect to the      
collateral, (v) legal opinions from special New York counsel for each of ATA and
Amtran and a solvency opinion from an independent solvency evaluator            
satisfactory to Salomon Smith Barney, (vi) the absence of a material adverse    
change since December 31, 2000 in the business, financial condition or results  
of operations of Amtran and its subsidiaries, taken as a whole, (vii) evidence  
that as of the closing date the funded lease-adjusted debt of Amtran and its    
subsidiaries is no more than $955 million, (viii) evidence that as of closing   
date, Amtran's minimum cash (or cash equivalents) on hand is no less than $85   
million, and (ix) payment of accrued fees and expenses. Each advance under the  
Secured Credit Facility is conditioned upon, among other things, the            
non-occurrence and non-continuation of any                                      

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unmatured event of default, the representations and warranties contained in the 
loan agreement for the Secured Credit Facility being true and correct in all    
material respects with the same effect as though such representations and       
warranties had been made on the date of each advance, except to the extent such 
representation and warranty relates to an earlier date (in which case on and as 
of such earlier date) and compliance with the borrowing base.                   

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

   The following discussion describes certain United States federal income tax
consequences of the merger. The discussion is based upon the Internal Revenue   
Code of 1986, as amended (the 'Code'), existing and proposed treasury           
regulations, rulings, administrative pronouncements and judicial decisions,     
changes to which could materially affect the tax consequences described in this 
proxy statement and could be made on a retroactive basis. This discussion does  
not address all aspects of federal income taxation that may be important to you 
based on your particular circumstances and does not address any aspect of state,
local or foreign tax laws. This summary assumes that shares of our common stock 
are held as capital assets (generally, assets held for investment) at the time  
of the merger and may not apply to holders who acquired shares of common stock  
pursuant to the exercise of employee stock options or other compensation        
arrangements with Amtran, holders that are subject to special tax treatment,    
holders that hold shares of our common stock as part of a 'straddle', 'hedge',  
or 'conversion transaction', holders the functional currency of which is not the
U.S. dollar or holders that are nonresident alien individuals or foreign        
corporations, partnerships, trusts or estates. Holders that may be subject to   
special tax treatment include broker-dealers, persons liable for alternative    
minimum tax, traders that elect to use a marked-to-market method of accounting  
for their securities holdings, insurance companies, tax-exempt organizations,   
retirement plans, financial institutions and regulated investment companies.    

 Consequences to Holders of Common Stock. A holder of shares of our common
stock will recognize gain or loss equal to the difference between the amount of 
cash received in the merger and the holder's adjusted tax basis in the shares of
common stock surrendered. Such gain or loss will generally be capital gain or   
loss and will be long-term capital gain or loss if at the effective time of the 
merger the holder has a holding period for the common stock of more than one    
year.                                                                           

  Backup Withholding and Information Reporting. Payments of cash to a holder
surrendering shares of our common stock will be subject to information reporting
and 'backup' withholding on the cash payable to the holder, unless the holder   
furnishes its social security or other taxpayer identification number and meets 
certain other conditions. Corporations generally are exempt from backup         
withholding. Any amounts withheld from payments to a holder under the backup    
withholding rules generally will be allowed as a credit against the holder's    
United States federal income tax liability, which may entitle such holder to a  
refund provided the required information is furnished to the Internal Revenue   
Service.                                                                        

The preceding discussion does not purport to be a complete analysis or  
discussion of all potential tax effects relevant to the merger. Thus,           
shareholders are urged to consult their own tax advisors as to the specific tax 
consequences to them of the merger, including tax return reporting requirements,
the applicability and effect of federal, state, local, foreign and other        
applicable tax laws and the effect of any proposed changes in the tax laws. The 
merger will not result in any United States federal income tax consequences for 
Amtran, Mikelsons or INDUS.                                                     

SHAREHOLDER LITIGATION RELATING TO THE MERGER                                   

Commencing on May 17, 2001, we, along with several of our officers and  
directors have been named as defendants in two putative class actions filed in  
the Superior Court of the State of Indiana in and for the County of Marion. The 
plaintiffs allege that Mikelsons and the individual defendants have breached and
are breaching their fiduciary duties to the public shareholders of Amtran common
stock. The plaintiffs seek, among other things, declaratory and injunctive      
relief, including: directing the individual defendants to exercise their duty of
care by giving consideration                                                    

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to any proposed business combination that would maximize Amtran's shareholder   
value; directing the individual defendants to adequately ensure that no         
conflicts of interest exist between the individual defendants and their         
fiduciary obligation to maximize shareholder value or, if such conflicts exist, 
to ensure that all conflicts are resolved in the best interests of Amtran's     
public shareholders and awarding plaintiffs the costs and disbursements of the  
action, including reasonable attorneys' and experts' fees.                      

    We, along with several of our officers and directors have also been named as
defendants in one putative class action filed in U.S. District Court in the     
Southern District of Indiana, Indianapolis Division, based on a diversity claim.
The plaintiffs allege, among other things, that Mikelsons and each of the       
individual defendants have violated the fiduciary duties they owe to the        
shareholders of Amtran. The plaintiffs seek judgment, among other things, as    
follows: declaring that defendants have breached their fiduciary duties to the  
public shareholders of Amtran and aided and abetted such breaches; enjoining the
proposed sale to Mr. Mikelsons and, if the proposed sale is consummated,        
rescinding it; awarding plaintiff and the class compensatory and/or rescissory  
damages as allowed by law; and awarding interest, attorney's fees, expert fees  
and other costs, in an amount to be determined.                                 

We have entered into a Memorandum of Understanding with each of the     
plaintiffs (the 'Memorandum'), subject to the conditions therein and to court   
approval, providing for the settlement of the lawsuits described above. We,     
along with the named officers and directors, vigorously deny any liability      
whatsoever in connection with the claims asserted in the actions. We, along with
the named officers and directors, entered into the Memorandum because it will   
halt the substantial expense, inconvenience and distraction of continued        
litigation of the plaintiffs' claims, and put to rest any and all the           
plaintiffs' claims relating to the merger. The parties to the Memorandum, among 
other things, agreed to move for the federal court's approval of the voluntary  
dismissal of the federal court action, as it is duplicative of the state court  
actions, to attempt, in good faith, to agree upon and execute as soon as        
practicable an appropriate stipulation of settlement, dismissing on the merits  
and with prejudice all claims asserted in the complaints filed in the state     
court actions, and to obtain final state court approval of the settlement, and  
the release and dismissal of the state court actions with prejudice. The        
plaintiffs have reserved the right to withdraw from the terms of the Memorandum 
and proposed settlement in the event that confirmatory discovery reveals        
information indicating that the settlement is not fair and reasonable. Pursuant 
to the Memorandum, Amtran has agreed to pay an aggregate of $285,000 in         
attorneys' fees, a portion of which has been requested by Amtran to be paid     
under its directors' and officers' liability insurance policy.                  

METHOD OF ACCOUNTING                                                            

   The merger will be accounted for under the purchase method of accounting as
a purchase of INDUS by Amtran. The merger will not result in a change in the    
recorded basis of the assets held by Amtran immediately prior to the merger.    

REGULATORY AND OTHER APPROVALS                                                  

The only U.S. federal or state regulatory requirements applicable to the
merger and the ILFC amendment are the giving of notice of the merger to the U.S.
Department of Transportation and the filing of articles of merger and articles  
of amendment with the Secretary of State of Indiana.                            

INTERESTS OF CERTAIN PERSONS IN THE MERGER                                      

Mikelsons and INDUS Ownership of Common Stock                                   

 As of June 28, 2001, Mikelsons owned 8,271,200 shares of our common stock
(or approximately 72% of the outstanding shares of our common stock on that     
date). Mikelsons acquired his shares in Amtran in 1984, in exchange for his     
contribution of, among other things, all the outstanding shares of the common   
stock of ATA. On June 18, 2001, Mikelsons and INDUS                             

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entered into a stock subscription agreement (the 'Stock Subscription            
Agreement'), pursuant to which Mikelsons will subscribe for and purchase, and   
INDUS will issue to Mikelsons, 8,271,200 shares of the common stock, without par
value, of INDUS, in consideration of the contribution by Mikelsons to INDUS of  
the 8,271,200 shares of our common stock owned by him, subject to certain       
conditions. Satisfaction of the shareholder approval condition to the merger is 
a condition to the transactions contemplated by the Stock Subscription          
Agreement. Upon completion of the merger, each issued and outstanding share of  
common stock of INDUS shall be converted into and become one fully paid and     
nonassessable share of common stock, without par value, of Amtran, the surviving
corporation.                                                                    

Ownership of Common Stock by Our Officers and Directors                         

As of June 28, 2001, our executive officers and directors (other than   
Mikelsons) beneficially owned an aggregate of 1,299,457 shares of our common    
stock consisting of 84,762 shares of our common stock (or less than 1% of the   
outstanding shares on that date) and presently exercisable options to purchase  
1,214,689 shares of our common stock (or approximately 11% of the outstanding   
shares). To our knowledge, all of our executive officers and directors intend to
vote their 84,762 shares of our common stock in favor of the merger.            

Treatment of Restricted Stock                                                   

Under the merger agreement, the restriction period for each restricted  
share, whether vested or unvested, granted under any of our stock plans shall be
deemed to expire immediately prior to the closing of the merger, unless it      
expired sooner in accordance with the restriction period set forth under the    
terms of the stock plan, in which case, the restriction period shall expire in  
accordance with the terms of the applicable stock plan.                         

Treatment of Stock Options                                                      

   All unvested stock options issued to our officers and certain stock options
issued to non-officers automatically vested upon the approval of the merger by  
your board of directors. The compensation committee of your board of directors  
will adopt a resolution providing that all stock options (other than those held 
by the 19 officers whose options will remain outstanding following the merger as
described below) that remain outstanding immediately prior to the closing of the
merger will be canceled in exchange for a cash payment equal to the excess, if  
any, of $23 over the exercise price of those options multiplied by the number of
shares of our common stock covered by those options, and that all outstanding   
stock options with an exercise price in excess of $23 per share will be canceled
without any cash payment.                                                       

We have agreed in the merger agreement to enter into option modification
agreements with 19 of our officers providing that these officers will not       
exercise their options prior to the merger and that their stock options will    
remain outstanding following the merger. Under these agreements, these officers 
have agreed, among other things, to the modification of the terms of their      
options as follows:                                                             

    not to exercise their options prior to (a) completion of the merger or (b)
termination of the merger agreement in accordance with its terms;     

that their options will remain outstanding following the merger and be
    exercisable during annual 60-day exercise periods which begin on June 1 of
each year;                                                            

     have the right to put shares acquired upon exercise of their options during
     an annual 60-day put period beginning 6 months after their exercise date in
each year for five years beginning December 15, 2002; and             

 the price per share at which officers will have the right to put shares
will be determined by an annual valuation of Amtran by a third-party  
appraiser selected by the Amtran board of directors.                  

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   The exercise prices of each of these options will remain the same following
the completion of the merger. These officers will not be permitted to exercise  
their options unless certain conditions are met. The average exercise price of  
the these options is $11.31. These agreements also set forth procedures for the 
treatment of these officers' options and shares upon resignation, termination of
employment and death. These modifications were made, in part, to provide        
liquidity for these officers' options and shares so long as we are a private    
company. If our common stock ever becomes publicly traded again, these exercise 
limitations and put rights would expire. In the aggregate, these 19 officers    
hold options covering 1,749,464 shares of common stock.                         

Indemnification of Officers and Directors                                       

The surviving corporation shall honor all of Amtran's obligations to    
indemnify (including any obligations to advance funds for expenses) the current 
or former directors and officers of Amtran for acts or omissions by such        
directors or officers occurring prior to the effective time of the merger to the
extent that the obligations exist as of the date of the merger agreement,       
whether pursuant to Amtran's charter, bylaws, individual indemnity agreements or
otherwise. Such obligations shall survive the merger and shall continue in full 
force and effect in accordance with their terms.                                

   The merger agreement further requires that, for a period of six years after
completion of the merger, the surviving corporation will maintain in effect the 
current policies of directors' and officers' liability insurance on behalf of   
our directors and officers that are currently covered by our existing directors'
and officers' liability insurance maintained by Amtran or policies of at least  
the same coverage, with respect to claims arising from or related to facts or   
events which occurred at or before the effective time of the merger, except that
the surviving corporation is not required to pay annual premium payments in     
excess of 150% of the annual premiums paid as of the date of the merger         
agreement.                                                                      

Proposed ILFC Amendment                                                         

 The discussion in this proxy statement of the principal terms of the ILFC
Amendment, which is attached as Exhibit A to the ILFC Agreement, and the ILFC   
Agreement is qualified in its entirety by reference to the ILFC Agreement, a    
copy of which is attached as Annex B to this proxy statement, and which is      
incorporated in this proxy statement by reference. The following description    
summarizes the material provisions of the ILFC Agreement. We urge you to read   
the ILFC Agreement and the ILFC Amendment carefully.                            

ILFC currently owns all 300 outstanding shares of our Series B preferred
stock, the original terms of which are set forth in the Purchase and Investor   
Rights Agreement dated as of September 19, 2000, between ILFC and us, which is  
filed as an exhibit to our annual report on Form 10-K/A for the fiscal year     
ended December 31, 2000. On May 16, 2001, we entered into the ILFC Agreement    
with ILFC to modify the terms of the Series B preferred stock in connection with
the merger. Under the ILFC Agreement, we have agreed to amend and restate       
Article XII of our articles of incorporation as set forth in the ILFC Amendment 
immediately before the merger becomes effective to modify the terms of the      
Series B preferred stock to reflect the fact that following the merger, Amtran  
will be a private company. As a result of the ILFC Amendment, ILFC's shares of  
Series B preferred stock will become convertible at the conversion price of     
$15.67 into shares of the common stock of the surviving corporation (rather than
being convertible into the right to receive $23 per share of common at the      
conversion price of $15.67). Therefore, ILFC will, to the extent that it elects 
to convert its shares of Series B preferred stock into shares of common stock of
the surviving corporation: (a) continue to benefit from increases in the value  
of Amtran and (b) bear the risks of decreases in the value of Amtran.           

   As part of the agreement, ILFC agreed not to convert its existing shares of
Series B preferred stock into common shares prior to the merger and to vote its 
shares of Series B preferred stock in favor of the ILFC Amendment. We have      
agreed to repurchase between 5 and 10% (with the                                

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amount to be determined by Amtran) of ILFC's shares of Series B preferred stock 
at a price reflecting merger consideration paid to holders of shares of our     
common stock. Under the ILFC Agreement, the conversion price of the Series B    
preferred stock into the common stock remains unchanged. However, upon          
redemption or termination of conversion rights, ILFC will receive an additional 
premium equal to the difference between $23 and the conversion price, as it may 
be adjusted from time to time. The dividend rate on the Series B preferred stock
will also increase upon the completion of the merger from an annual rate of 5.0%
of the liquidation amount to 5.66% per annum on the date the merger is          
completed. On the fourth anniversary of the completion date of the merger, the  
dividend rate will increase to 6.5% per annum, provided that from and after the 
date that a public offering is consummated, the dividend rate will return to    
5.0% per annum.                                                                 

The ILFC Agreement also provides that we will lease an additional Boeing
737-800 aircraft from ILFC beginning in 2004 upon completion of the merger. We  
will also pay ILFC an annual fleet consulting fee of $100,000, for a period of 4
years, in exchange for ILFC's assistance in the management of our               
buyer-furnished-equipment and advise us with respect to fleet retirement and    
other fleet management issues.                                                  

 Approval of the ILFC Amendment is a condition to the merger agreement and
merger. The ILFC Amendment, which is subject to the approval of the holders of  
Series B preferred stock, was approved by your board of directors on June 18,   
2001. ILFC, as the sole holder of shares of our Series B preferred stock, has   
agreed to vote in favor of the ILFC Amendment and has granted an irrevocable    
proxy to Kenneth K. Wolff and James W. Hlavacek to vote its shares of our       
Series B preferred stock with regard to the ILFC Amendment.                     

Interests of Certain Directors                                                  

Under the terms of the plan of merger and the merger agreement, the     
directors and officers of Amtran at the time of the merger will be the directors
and officers of the surviving corporation. Therefore, all directors elected at  
the annual meeting will continue as directors of the surviving corporation      
following the merger.                                                           

Mr. Abel, Chairman of the compensation committee, is a partner in the   
accounting firm of Blue & Co., LLC, which has provided tax and accounting       
services to Amtran and Mikelsons since 1973. In 2000, Blue & Co. received       
$28,310 in fees for services rendered to Amtran and $20,835 in fees for services
rendered to Mikelsons. In the aggregate, these fees are less than 1% of Blue &  
Co.'s revenues for 2000.                                                        

    Mr. Rogers, Chairman of the audit committee, is a partner in the law firm of
Cravath, Swaine & Moore, which has regularly provided legal services to Amtran  
in connection with securities offerings since its initial public offering in    
1993 and will continue to represent Amtran in those offerings on a continuing   
basis, including prior to the completion of the merger.                         

Amtran's Engagement of Salomon Smith Barney                                     

At Mikelsons' request, Amtran engaged Salomon Smith Barney to act as    
financial advisor to Mikelsons and INDUS. Under the engagement letter between   
Amtran and Salomon Smith Barney, Amtran will be obligated to pay an advisory fee
and expenses to Salomon Smith Barney only upon completion of the merger. In     
connection with this engagement, Amtran entered into an indemnity letter        
agreement with Salomon Smith Barney. Amtran is obligated to indemnify Salomon   
Smith Barney in connection with its engagement as financial advisor regardless  
of whether the merger is completed.                                             

THE PARTIES 

AMTRAN                                                                          

   We are a corporation formed under the laws of the State of Indiana. We were
incorporated in 1984 as a holding company for ATA. We own ATA, the tenth largest
passenger airline in the                                                        

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United States (based on passenger revenue miles) and a leading provider of      
scheduled airline services in selected markets. We, through our subsidiaries,   
are also the largest commercial charter airline in the United States and the    
largest provider of passenger airline services to the U.S. military, in each    
case based on 2000 revenues. For the year ended December 31, 2000, the revenues 
of ATA consisted of 58.3% scheduled service, 19.1% commercial charter service   
and 14.6% military charter service, with the balance derived from related       
services. We anticipate increasing our emphasis on scheduled service in the     
future.                                                                         

Amtran has not, and to Amtran's knowledge, none of its directors or     
executive officers have been, during the last five years, been convicted in a   
criminal proceeding (excluding traffic violations or similar misdemeanors) or   
been a party to a civil proceeding of a judicial or administrative body of      
competent jurisdiction and as a result of which they were or are subject to a   
judgment, decree or final order enjoining future violations of, or prohibiting  
or mandating activities subject to, Federal or state securities laws or finding 
any violation with respect to such laws.                                        

    Willie G. McKnight, Jr., has been the Executive Vice President for Marketing
and Sales of Amtran since January 2000. Prior to that time he was a Vice        
President with A.T. Kearney, management consultants. Mr. McKnight's principal   
business address is Amtran's executive offices. Mr. McKnight is a citizen of the
United States of America.                                                       

 William P. Rogers, Jr., is a director of Amtran and a partner of Cravath,
Swaine & Moore. Mr. Rogers' principal business address is Worldwide Plaza, 825  
Eighth Avenue, New York, New York 10019. The telephone number at this office is 
(212) 474-1000. Mr. Rogers is a citizen of the United States of America.        

Information concerning Mikelsons' background is set forth below under   
' -- Mikelsons'. Information concerning the background of the other directors   
and executive officers of Amtran is set forth below under 'Election of          
Directors -- Nominees'.                                                         

    Our principal executive offices are located at: 7337 West Washington Street,
Indianapolis, Indiana 46231. Our telephone number at those offices is (317)     
247-4000.                                                                       

INDUS                                                                           

INDUS, a corporation formed under the laws of the State of Indiana on   
June 15, 2001, is wholly owned by Mikelsons. On June 18, 2001, Mikelsons and    
INDUS entered into a Stock Subscription Agreement, pursuant to which Mikelsons  
will subscribe for and purchase, and INDUS will issue to Mikelsons, 8,271,200   
shares of the common stock, without par value, of INDUS, in consideration of the
contribution by Mikelsons to INDUS of the 8,271,200 shares of our common stock  
owned by him, subject to certain conditions. Upon completion of the merger, each
issued and outstanding share of capital stock of INDUS will be converted into   
and become one fully paid and nonassessable share of common stock, without par  
value, of Amtran, the surviving corporation. INDUS was organized to merge with  
us in the merger and has not conducted any unrelated activities since its       
organization. INDUS will cease to exist after the merger.                       

INDUS has not, during the last five years, been convicted in a criminal 
proceeding (excluding traffic violations or similar misdemeanors) or been a     
party to a civil proceeding of a judicial or administrative body of competent   
jurisdiction and as a result of which they were or are subject to a judgment,   
decree or final order enjoining future violations of, or prohibiting or         
mandating activities subject to, Federal or state securities laws or finding any
violation with respect to such laws.                                            

   The principal executive office of INDUS is located at: 7337 West Washington
Street, Indianapolis, Indiana 46231. INDUS' telephone number at those offices is
(317) 247-4000.                                                                 

MIKELSONS                                                                       

  Mikelsons is the founder and majority shareholder of Amtran. His principal
occupation is as the Chairman of Amtran. Mikelsons is also the sole shareholder 
of INDUS, the sole member of the board of directors of INDUS and the sole       
officer (Chairman and President) of INDUS.                                      

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Mikelsons is a citizen of the United States of America. For more information    
regarding Mikelsons' business experience and background, see 'Election of       
Directors -- Nominees' (page ).                                                 

   Mikelsons has not, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or been a     
party to a civil proceeding of a judicial or administrative body of competent   
jurisdiction and as a result of which they were or are subject to a judgment,   
decree or final order enjoining future violations of, or prohibiting or         
mandating activities subject to, Federal or state securities laws or finding any
violation with respect to such laws.                                            

Mikelsons' principal business address is 7337 West Washington Street,   
Indianapolis, Indiana 46231. His telephone number is (317) 240-7000.            

THE MERGER AGREEMENT

    The discussion in this proxy statement of the merger and the principal terms
of the merger agreement is qualified in its entirety by reference to the merger 
agreement, a copy of which is attached as Annex A to this proxy statement, and  
which is incorporated in this proxy statement by reference. The following       
description summarizes the material provisions of the merger agreement. We urge 
you to read the merger agreement carefully because it is the legal document that
governs the merger.                                                             

THE MERGER                                                                      

The merger agreement provides that, on the terms and subject to the     
conditions set forth in the merger agreement, INDUS will be merged with and into
Amtran in accordance with the applicable provisions of the IBCL. Following the  
merger, the separate corporate existence of INDUS will cease, and Amtran will   
continue as the surviving corporation. INDUS may assign its rights and          
obligations under the merger agreement to any company directly or indirectly    
wholly owned by Mikelsons.                                                      

WHAT YOU WILL RECEIVE IN THE MERGER                                             

    When the merger is completed, by virtue of the merger and without any action
on the part of the holder of any shares of our capital stock, or any shares of  
common stock of INDUS:                                                          

       (i) each share of our common stock owned by Amtran, Mikelsons, INDUS or
    any other affiliate of Mikelsons (other than persons deemed to be affiliates
    of Mikelsons by reason of their positions as officers or directors of Amtran
(the 'Excluded Affiliates')) will no longer be outstanding and will be  
  canceled and retired and no consideration will be delivered or deliverable
in exchange for those shares;                                           

    (ii) each share of our common stock owned by one of our subsidiaries
will be converted into one fully paid and nonassessable share of common 
stock, without par value, of Amtran as the surviving corporation in the 
merger;                                                                 

      (iii) each issued and outstanding share of capital stock of INDUS will
 be converted into one fully paid and nonassessable share of common stock,
 without par value, of Amtran, as the surviving corporation in the merger;

      (iv) each issued and outstanding share of our common stock, other than
    the shares described under (i), (ii) and (iii) above, will be converted into
the right to receive, upon valid surrender of a share certificate which 
   formerly represented that share of our common stock, $23 per share in cash,
without interest; and                                                   

      (v) each issued and outstanding share of our Series A1 preferred stock
   and our Series B preferred stock will remain outstanding as preferred stock
of Amtran, as the surviving corporation.                                

EFFECTIVE TIME OF THE MERGER                                                    

The merger will become effective on the date on which articles of merger
(including a plan of merger approved by holders of shares of our common stock)  
are duly filed with the office of the                                           

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Secretary of State of the State of Indiana, or a later date as agreed to by     
INDUS and Amtran in those articles of merger.                                   

PAYMENT FOR SHARES; PROCEDURES FOR SURRENDER OF CERTIFICATES                    

  Before the merger is completed, INDUS will appoint a bank or trust company
to act as paying agent for the payment of the merger consideration. Promptly    
following completion of the merger, we will deposit with the paying agent funds 
necessary to pay the merger consideration.                                      

  After the completion of the merger, the paying agent will mail a letter of
transmittal, which will include instructions for the delivery of certificates   
formerly representing shares of our common stock to the paying agent, to all    
record holders of shares of our common stock as of the time of the completion of
the merger. The letter of transmittal will also describe the procedures for     
electronic delivery of share certificates. Holders of shares of our common stock
at the time of the merger should use this letter of transmittal to send         
certificates formerly representing shares of our common stock to the paying     
agent. After surrendering certificates formerly representing shares of our      
common stock to the paying agent for cancelation, together with a properly      
completed letter of transmittal, holders of those surrendered certificates will 
be entitled to receive a cash payment from us in an amount equal to the number  
of shares formerly represented by the surrendered certificates multiplied by the
merger consideration of $23. Each surrendered certificate will be canceled.     

PLEASE DO NOT SEND ANY AMTRAN SHARE CERTIFICATES WITH YOUR YELLOW PROXY 
CARD. YOU WILL RECEIVE A LETTER OF TRANSMITTAL TO SURRENDER YOUR SHARE          
CERTIFICATES.                                                                   

  If a transfer of ownership of shares of our common stock is not registered
in our stock transfer books, payment of merger consideration of $23 per share   
may be made to a person other than the person in whose name the surrendered     
certificate is registered if                                                    

    the share certificate is properly endorsed or otherwise in proper form for
transfer, and                                                         

  the person requesting payment pays any transfer or other taxes resulting
from the payment of merger consideration to a person other than the   
  registered holder of that certificate or establishes to our satisfaction
that any such taxes have been paid or are not applicable.             

All cash paid upon the surrender of certificates formerly representing  
shares of our common stock in accordance with the merger agreement will be      
deemed to have been paid in full satisfaction of all rights pertaining to the   
shares of our common stock so surrendered. After the completion of the merger,  
no transfers of shares of our common stock that were outstanding at the time of 
the merger will be made on our stock transfer books.                            

  If your Amtran share certificates have been lost, stolen or destroyed, you
will be entitled to obtain payment only by signing an affidavit to that effect  
and, to the extent required by us posting a bond in an amount sufficient to     
protect us against claims by any other party related to your share certificates.

TREATMENT OF STOCK OPTIONS                                                      

Except for stock options held by our officers who enter into option     
modification agreements purchase common stock of the surviving corporation in   
the merger (described above under 'Special Factors -- Interests of Certain      
Persons in the Merger -- Treatment of Stock Options'), (a) each option to       
purchase shares of our common stock outstanding immediately prior to the        
completion of the merger, whether vested or unvested, will be converted into the
right to receive the excess, if any, of $23 over the exercise price per share of
the stock option multiplied by the number of shares of our common stock subject 
to the stock option, (b) all other rights to purchase shares of our common      
stock, whether vested or unvested, will be converted into the right to receive  
an amount of cash equal to the number of shares of common stock subject to the  
stock right outstanding immediately prior to the completion of the merger       
multiplied by $23 and (c) all options with an exercise price in excess of $23   
per share will be canceled by action of our board                               

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of directors or the compensation committee of our board. All amounts payable are
subject to applicable withholding taxes.                                        

REPRESENTATIONS AND WARRANTIES                                                  

    We have made various representations and warranties in the merger agreement,
with respect to Amtran and its subsidiaries, which are customary in transactions
of this type, including, among others, representations as to                    

due organization and existence,                                       

capital structure,                                                    

  corporate authorization of the merger, the merger agreement, the plan of
    merger, the ILFC Agreement and the ILFC Amendment, the execution, delivery
   and enforceability of the merger agreement and the ILFC Agreement and the
recommendations of the board of directors and the special committee,  

the classes of our stock entitled to vote on the merger, the plan of  
merger, the merger agreement and the ILFC Amendment,                  

the absence of any violation of, or conflict with, organizational     
    documents, contracts and judgments, orders, laws and regulations resulting
from the merger agreement, the ILFC Agreement and the transactions    
contemplated by those agreements, other than in the case of contracts,
     judgments, orders, laws and regulations, violations or conflicts which have
 not had and could not reasonably be expected to have a material adverse
    effect on Amtran and its subsidiaries, taken as a whole, or our ability to
perform our obligations under the merger agreement,                   

   the consents we are required to obtain and the filings we are required to
  make in connection with the merger agreement, the ILFC Agreement and the
transactions contemplated by those agreements,                        

the accuracy of our public filings with the SEC since January 1, 1999,
including the financial statements contained in those filings, and the
absence of undisclosed liabilities,                                   

the absence of undisclosed broker's fees and                          

the fairness opinion delivered to the special committee.              

INDUS has made various representations and warranties in the merger     
agreement, which are customary in transactions of this type, including, among   
others, representations as to                                                   

due organization and existence,                                       

  the absence of operations by it other than in connection with the merger
agreement and matters related thereto,                                

capital structure,                                                    

     corporate authorization of the merger, the merger agreement and the plan of
merger and the execution, delivery and enforceability of the merger   
agreement,                                                            

the absence of any violation of, or conflict with, organizational     
    documents, contracts and judgments, orders, laws and regulations resulting
from the merger agreement, the ILFC Agreement and the transactions    
contemplated by those agreements other than in the case of contracts, 
     judgments, orders, laws and regulations, violations or conflicts which have
 not had and could not reasonably be expected to have a material adverse
    effect on INDUS or its ability to perform its obligations under the merger
agreement,                                                            

 the consents it is required to obtain and the filings it is required to
  make in connection with the merger agreement, the ILFC Agreement and the
transactions contemplated by those agreements,                        

the absence of undisclosed broker's fees and                          

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   the financing to be obtained by ATA, our principal subsidiary, to pay the
merger consideration.                                                 

INTERIM OPERATIONS PENDING COMPLETION OF THE MERGER                             

Except for matters expressly permitted or contemplated by the merger    
agreement or the ILFC Agreement, we have agreed that from the date of the merger
agreement until the completion of the merger, we will, and will cause each of   
our subsidiaries to                                                             

    conduct business in the usual, regular and ordinary course consistent with
past practice, and                                                    

use all reasonable efforts to preserve intact our respective current  
business organizations, keep available the services of our respective 
   current officers and employees and keep our respective relationships with
    customers, suppliers, licensors, licensees, distributors and others having
     business dealings with us to the end that our goodwill and ongoing business
are unimpaired at the effective time of the merger.                   

In addition, except for matters expressly contemplated by the merger    
agreement or the ILFC Agreement, from the date of the merger agreement until the
completion of the merger, we will not, and will not permit any of our           
subsidiaries to, do any of the following without the prior written consent of   
the special committee and INDUS                                                 

     declare, set aside or pay any dividends on, or make any other distributions
in respect of, any capital stock or other equity interests, other than
dividends and distributions by our wholly owned subsidiaries to us and
  regular cash dividends with respect to shares of our Series A1 preferred
stock and Series B preferred stock, split, combine or reclassify any  
    capital stock or other equity interests or issue or authorize the issuance
  of any other securities in respect of, in lieu of or in substitution for
  shares of capital stock or other equity interests or purchase, redeem or
     otherwise acquire any shares of capital stock of or any other securities of
 Amtran or any of our subsidiaries or any rights, warrants or options to
acquire any such shares or other securities,                          

     except for (x) the issuance of shares of our common stock upon the exercise
   of outstanding options granted under the stock options outstanding on the
    date of the merger agreement, (y) the grant of up to an additional 100,000
    stock options to acquire shares of our common stock under the stock option
    plans identified in the merger agreement and (z) the issuance of shares of
    our common stock upon the exercise of those new options in accordance with
their terms, issue, deliver, sell or grant:                           

 (i)  any shares of capital stock or other equity interests,

        (ii) any bonds, debentures, notes or other indebtedness having the
        right to vote, or convertible into, or exchangeable for,
            securities having the right to vote, on matters on which the
               holders of shares of our common stock have the right to vote or
other voting securities,                        

        (iii) any securities convertible into, or exchangeable for, or any
               options, warrants or rights to acquire, any of the securities
                 described under (ii) above, voting securities or convertible or
exchangeable securities or                    

          (iv) any 'phantom' stock, 'phantom' stock rights, stock appreciation
rights or stock-based performance units,        

amend our respective articles of incorporation, bylaws or other       
organizational documents or                                           

    authorize any of, or commit or agree to take any of, the actions described
above.                                                                

We and INDUS have agreed not to take any action that would, or could    
reasonably be expected to, result in a breach of representations and warranties 
or any condition to the merger not being satisfied. INDUS has also agreed not to
take any action that could reasonably be expected to result in any condition    
contained in the Commitment Letter not being satisfied and to notify us if at   
any time there is a reasonable likelihood the financing contemplated by the     
Commitment Letter will not be available.                                        

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WITHDRAWAL OR MODIFICATION OF RECOMMENDATION                                    

   In the merger agreement, we have agreed that neither our board of directors
nor the special committee will withdraw or modify, or publicly propose to       
withdraw or modify, in a manner adverse to INDUS, its favorable recommendation  
of the merger, the plan of merger, the merger agreement and the ILFC Amendment  
unless it determines in good faith, after consulting with and based on the      
advice of outside legal counsel, that its favorable recommendation would be     
inconsistent with its fiduciary duties to the holders of shares of our common   
stock (other than Mikelsons and INDUS) under applicable law.                    

EXPENSES                                                                        

  All fees and expenses incurred in connection with the merger agreement and
the transactions contemplated by it will be paid by us, other than any fees and 
expenses incurred as a result of a material breach of the merger agreement by   
INDUS.                                                                          

ADDITIONAL COVENANTS                                                            

We and INDUS have also agreed as follows:                               

    to use our reasonable best efforts to cause the shareholders meeting to be
    held as promptly as practicable following the date of the merger agreement
    and to hold the shareholders meeting even if our board of directors or the
special committee withdraws or modifies its recommendation;           

    to use our respective reasonable best efforts to consummate the merger and
 the other transactions contemplated by the merger agreement, including,
    among other things, obtaining the financing contemplated in the Commitment
Letter;                                                               

we have agreed to afford INDUS and its representatives reasonable and 
prompt access to our information, assets and personnel and to make    
     available to it on a timely basis a copy of each material document received
by us pursuant to the requirements of domestic or foreign laws and all
other information concerning our business, properties and personnel,  
subject to confidentiality or legal restrictions;                     

to give each other prompt notice of any of our representations or     
warranties becoming materially untrue or inaccurate;                  

     to consult with each other before issuing any press release or other public
statements relating to the merger;                                    

   to give INDUS the opportunity to participate in the defense or settlement
 of any litigation with respect to the merger and the other transactions
contemplated by the merger agreement and the ILFC Agreement; and      

to cause the proxy statement and the Schedule 13E-3 to comply with    
applicable Exchange Act requirements.                                 

  In addition, INDUS has agreed to cause Mikelsons and his affiliates (other
than us, our subsidiaries and the Excluded Affiliates) to comply with our       
obligations under the merger agreement.                                         

CONDITIONS TO THE CLOSING OF THE MERGER                                         

    Our obligation and the obligation of INDUS to complete the merger is subject
to the satisfaction or waiver of the following conditions on or prior to the    
closing date of the merger                                                      

    a majority of the outstanding shares of our common stock voting to approve
the merger, the plan of merger, the merger agreement and the ILFC     
Amendment,                                                            

  a majority of the shares of our common stock voted at the annual meeting
(other than shares owned by Mikelsons, INDUS or any other affiliate of
Mikelsons (other than the Excluded Affiliates)) voting to approve the 
merger, the plan of merger and the merger agreement,                  

     a majority of the outstanding shares of our Series B preferred stock voting
to approve the ILFC Amendment,                                        

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no temporary restraining order, preliminary or permanent injunction or
  other order issued by any court of competent jurisdiction preventing the
  consummation of the merger or the other transactions contemplated by the
    merger agreement is in effect. Each of the parties to the merger agreement
   has agreed to use its reasonable best efforts to prevent the entry of any
  such injunction or other order and to appeal as promptly as possible any
such judgment that may be entered and                                 

   the absence of any pending suit, action or proceeding by any governmental
entity, in each case that has a substantial likelihood of success,    
    (i) challenging the acquisition by INDUS or Mikelsons of any shares of our
common stock, seeking to restrain or prohibit the consummation of the 
    merger or any other transaction contemplated under the merger agreement or
     seeking to obtain from us, INDUS or Mikelsons any damages that are material
   in relation to Amtran and its subsidiaries taken as a whole, (ii) seeking
to prohibit or limit the ownership or operation by us or any of our   
     subsidiaries of any material portion of our business or assets or to compel
   us or any of our subsidiaries to dispose of or hold separate any material
portion of our business or assets or to compel us or any of our       
 subsidiaries to dispose of or hold separate any material portion of our
business or assets as a result of the merger or any other transaction 
   contemplated under the merger agreement, (iii) seeking to impose material
 limitations on the ability of INDUS or Mikelsons to acquire or hold, or
exercise full rights of ownership of, any shares of our common stock, 
     including the right to vote their shares of our common stock on all matters
properly presented to our shareholders or (iv) seeking to prohibit    
     Mikelsons from effectively controlling in any material respect the business
or operations of Amtran and its subsidiaries.                         

 In addition, the obligation of INDUS to complete the merger is subject to
the satisfaction or waiver of the following conditions on or prior to the       
closing date of the merger                                                      

   our representations and warranties in the merger agreement being true and
  correct in all material respects, and our representations and warranties
 which are qualified as to materiality being true and correct, as of the
     date of the merger agreement and the date on which the merger closes (other
  than representations and warranties which expressly relate to an earlier
date, in which case our representations and warranties being true and 
 correct as of such date) and the receipt by INDUS of a certificate of a
duly authorized officer of Amtran certifying the truthfulness of our  
representations and warranties,                                       

our compliance in all material respects with our obligations under the
merger agreement and the receipt by INDUS of a certificate of a duly  
authorized officer of Amtran certifying our compliance,               

  the ILFC Agreement being in full force and effect and ILFC has performed
its obligations under that agreement in all material respects,        

   since the date of the merger agreement, no event has occurred which had a
material adverse effect on us, and our subsidiaries, taken as a whole,
other than any event which is the direct result of:                   

          (i)  any action or negligent or willful failure to take an action by
INDUS,                                          

          (ii) any action or negligent or willful failure to take an action by
             us which is contrary to, or materially inconsistent with, the
     recommendation or direction of the special committee,

  (iii) any action with respect to which the recommendation or
                 direction of the special committee is required under the merger
     agreement which is taken by us without the required
recommendation or direction or                

     (iv) any action or failure to take an action by us taken at the
               direction of Mikelsons or any of his affiliates (other than our
subsidiaries and the Excluded Affiliates), and  

ATA receiving the financing contemplated by the Commitment Letter on  
substantially the terms specified therein or on such other terms or   
involving such other financing sources as                             

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are acceptable to ATA; provided that this condition shall be deemed   
satisfied if the failure to obtain that financing is the result of any
action or failure to take an action by us or ATA at the direction of  
Mikelsons or his affiliates (other than the Excluded Affiliates).     

In addition, our obligation to complete the merger is subject to the    
satisfaction or waiver of the following conditions on or prior to the closing   
date of the merger:                                                             

   the representations and warranties of INDUS in the merger agreement being
true and correct in all material respects, and its representations and
     warranties which are qualified as to materiality being true and correct, as
     of the date of the merger agreement and the date on which the merger closes
 (other than representations and warranties which expressly relate to an
   earlier date, in which case its representations and warranties being true
    and correct as of such date) and the receipt by us of a certificate of the
   President of INDUS certifying the truthfulness of its representations and
warranties,                                                           

     compliance in all material respects by INDUS with its obligations under the
     merger agreement and the receipt by us of a certificate of the President of
INDUS certifying its compliance and                                   

  if ATA is required under the terms of its financing to obtain a solvency
    letter from a third-party appraiser, the delivery by ATA of a copy of that
     solvency letter to our board of directors, with the special committee as an
additional addressee.                                                 

TERMINATION                                                                     

 The merger agreement may be terminated at any time prior to the effective
time of the merger:                                                             

    by mutual written consent of INDUS and Amtran (as agreed to by the special
committee);                                                           

by either INDUS or Amtran (acting at the direction of the special     
committee)                                                            

           (i)  if the merger has not been completed by October 31, 2001, unless
                the merger has not been completed as a result of a breach of the
             merger agreement by the party seeking to terminate the merger
                agreement (excluding any breach by us without the consent of the
special committee),                             

          (ii) if any governmental entity issues an order, decree or ruling or
            takes any other action permanently enjoining, restraining or
               otherwise prohibiting the merger and such order, decree, ruling
            or other action shall have become final and nonappealable or

           (iii) if the approval of shareholders described under ' -- Conditions
      to the Closing of the Merger' above is not obtained;

by INDUS if any representation or warranty made by us in the merger   
   agreement is not true and correct in all material respects, or any of our
   representations and warranties in the merger agreement which is qualified
 as to materiality is not true and correct, as of the date of the merger
agreement and the date on which the merger closes (other than         
   representations and warranties which expressly relate to an earlier date,
   in which case the representations or warranties were not true and correct
   as of such date) or we have failed to perform in any material respect any
   of our obligations contained in the merger agreement, which breach cannot
     be or has not been cured by us within 30 days of notice to us of the breach
    (provided that INDUS is not then in material breach of any representation,
warranty or covenant contained in the merger agreement); excluding,   
 however, breaches and failures to perform by us relating to matters for
  which the consent or recommendation of the special committee is required
under the merger agreement and (i) which is contrary to or materially 
    inconsistent with the recommendation or direction of the special committee
 or (ii) for which the required recommendation or direction has not been
obtained;                                                             

by us (acting at the direction of the special committee) if any       
 representation or warranty made by INDUS in the merger agreement is not
  true and correct in all material respects, or any of its representations
and warranties in the merger agreement which is qualified as to       

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     materiality is not true and correct, as of the date of the merger agreement
 and the date on which the merger closes (other than representations and
 warranties which expressly relate to an earlier date, in which case the
     representations or warranties were not true and correct as of such date) or
 it has failed to perform in any material respect any of its obligations
   contained in the merger agreement, which breach cannot be or has not been
    cured by it within 30 days of notice to it of the breach (provided that we
     are not then in material breach of any representation, warranty or covenant
contained in the merger agreement); and                               

   by INDUS, if our board of directors or the special committee withdraws or
   modifies, or publicly proposes to withdraw or modify, in a manner adverse
    to INDUS, their respective approvals or recommendations of the merger, the
plan of merger, the merger agreement and the ILFC Amendment.          

    In the event of a termination, except as specifically provided in the merger
agreement, the merger agreement will become void and will have no effect,       
without any liability or obligation on our part or on the part of INDUS, except 
to the extent that the termination results from the material breach by a party  
of any representation, warranty or covenant contained in the merger agreement.  

AMENDMENT; WAIVER                                                               

The merger agreement may be amended by the parties, but only with the   
approval of the special committee, at any time before or after receipt of the   
approval of the plan of merger by our shareholders; provided that an amendment  
may not be made after the approval of the plan of merger by our shareholders    
without the further approval of our shareholders, if such amendment requires    
further shareholders' approval under applicable law.                            

At any time prior to completion of the merger, we and INDUS may         

     extend the time for the performance of any of the obligations or other acts
of the other parties,                                                 

   waive any inaccuracies in the representations and warranties contained in
  the merger agreement or in any document delivered pursuant to the merger
agreement and                                                         

 subject to the requirements of applicable law and the provisions of the
preceding paragraph, waive compliance with any of the agreements or   
conditions contained in the merger agreement.                         

Any extension or waiver by us will require the approval of the special          
committee.                                                                      

PROVISIONS FOR UNAFFILIATED SECURITY HOLDERS                                    

   The merger agreement does not grant unaffiliated security holders access to
the corporate files of Amtran or INDUS or the right to obtain counsel or        
appraisal services at the expense of Amtran, Mikelsons or INDUS.                

DISSENTERS' RIGHTS

 Section 23-1-44-8(b) of the IBCL provides that shareholders of an Indiana
corporation are not entitled to dissenters' rights in connection with a         
transaction where, on the record date used in determining the shareholders of   
the corporation entitled to receive notice of and vote to approve that          
transaction, the class of shares held by those holders were:                    

registered on a United States securities exchange registered under the
Exchange Act or                                                       

  traded on the National Association of Securities Dealers, Inc. Automated
   Quotations System Over-the-Counter Markets -- National Market Issues or a
similar market.                                                       

    On July [  ], 2001, the record date for determining the holders of shares of
common stock entitled to receive notice of, and vote on the merger agreement at,
the annual meeting, shares of our common stock were traded on the Nasdaq Stock  
Market.                                                                         

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SUMMARY FINANCIAL DATA

The following table sets forth summary historical consolidated financial
data for Amtran. The financial information for Amtran as of and for each of the 
two fiscal years ended December 31, 1999 and December 31, 2000 has been derived 
from, and should be read in conjunction with, the audited financial statements  
of Amtran (including the notes thereto) for such periods contained in Amtran's  
Annual Reports on Form 10-K for the years ended December 31, 1999 and December  
31, 2000, respectively. The financial information as of and for the three months
ended March 31, 2000 and March 31, 2001 has been derived from, and should be    
read in conjunction with, the unaudited financial statements of Amtran          
(including the notes thereto) for such periods contained in Amtran's Quarterly  
Reports on Form 10-Q for the quarters ended March 31, 2000 and March 31, 2001,  
respectively. These documents are incorporated by reference into this proxy     
statement. See 'Where You Can Find More Information'.                           

                                                        [Enlarge/Download Table]

                                          YEAR ENDED DECEMBER 31,    THREE MONTHS ENDED MARCH 31, 
                                         -------------------------   ---------------------------- 
                                            2000          1999          2001             2000     
                                            ----          ----          ----             ----     
                                                                     (UNAUDITED)      (UNAUDITED) 
                                              (Dollars in thousands, except per share data)       
                                                                                                  
STATEMENT OF OPERATIONS DATA:                                                                     
Operating revenues...................... $ 1,291,553   $ 1,122,366   $   347,485      $   321,366 
Income (loss) from continuing                                                                     
  operations............................     (15,324)       47,342        (4,384)          (1,954)
Preferred dividends.....................         375       --                375          --      
Net income (loss) available to common                                                             
  shareholders..........................     (15,699)       47,342        (4,759)          (1,954)
Basic earnings (loss) per common                                                                  
  share.................................       (1.31)         3.86         (0.42)           (0.16)
Diluted earnings (loss) per common                                                                
  share................................. $     (1.31)  $      3.51   $     (0.42)     $     (0.16)

BALANCE SHEET DATA:                                                                               
Current assets.......................... $   260,208   $   231,894   $   247,273      $   238,700 
Noncurrent assets.......................     772,222       583,387       856,862          603,275 
Current liabilities.....................     346,687       242,000       421,123          264,173 
Noncurrent liabilities..................     481,089       421,905       483,357          431,921 
Redeemable preferred stock..............      80,000       --             80,000          --      
Total shareholders' equity.............. $   124,654   $   151,376   $   119,655      $   145,881 

STATISTICAL DATA:                                                                                 
Average common shares outstanding.......  11,956,532    12,269,474    11,379,667       12,089,652 
Book value per common share(1).......... $     10.43   $     12.34   $     10.51      $     12.07 
Ratio of earnings to fixed charges(2)...         n/a          2.65           n/a              n/a 
Deficiency of earnings to cover fixed                                                             
  charges(2)............................ $   (23,485)          n/a   $   (11,175)     $    (3,908)

---------                                                                       

(1) 'Book value per common share' represents total shareholders' equity divided 
by average common shares outstanding.                                   

(2) 'Ratio of earnings to fixed charges' represents earnings divided by fixed   
  charges as defined in the following paragraph. The 'deficiency of earnings
   to cover fixed charges' represents the amount of fixed charges in excess of
earnings.                                                               

For purposes of these computations, 'earnings' consist of income (loss) 
  before income taxes, plus fixed charges, adjusted to exclude the amount of
any interest capitalized during the period. 'Fixed charges' include the 
    total of: (a) interest, whether expensed or capitalized; (b) amortization of
   debt expense relating to any indebtedness, whether expensed or capitalized;
and (c) such portion of rental expense as can be demonstrated to be     
representative of the interest factor.                                  

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MARKET PRICE AND DIVIDEND INFORMATION 

  Shares of our common stock are quoted on the Nasdaq Stock Market under the
ticker symbol 'AMTR'. The following table sets forth the high and low sale      
prices through the Nasdaq Stock Market for the periods indicated.               

                                                                [Download Table]

                                                               HIGH     LOW  
                                                               ----     ---  
                                                                             
1999                                                                         
    First Quarter...........................................  $28.13   $18.50
    Second Quarter..........................................   25.00    17.25
    Third Quarter...........................................   27.50    18.50
    Fourth Quarter..........................................   22.00    16.50

2000                                                                         
    First Quarter...........................................   19.50    13.63
    Second Quarter..........................................   18.44     8.63
    Third Quarter...........................................   13.88    10.00
    Fourth Quarter..........................................   15.00     9.00

2001                                                                         
    First Quarter...........................................   14.75     9.44
    Second Quarter (through June 28, 2001)..................   22.20     9.00

   Amtran has not paid dividends on shares of its common stock in the past two
years.                                                                          

PRIOR STOCK PURCHASES BY AMTRAN 

 The following table, sets forth information, by fiscal quarter, regarding
purchases by us of shares of our common stock since the second quarter of 1999. 

                                                        [Enlarge/Download Table]

                                                                                       AVERAGE 
                                                                                       PURCHASE
                      PERIOD                        NO. OF SHARES      PRICE RANGE      PRICE  
                      ------                        -------------      -----------      -----  
                                                                                               
2nd Quarter 1999...................................    150,000      $19.375 - $24.00   $22.3275
3rd Quarter 1999...................................    174,500     $18.875 - $20.6875    $20.25
4th Quarter 1999...................................     93,500     $16.8309 - $20.875    $18.41
1st Quarter 2000...................................    222,500      $15.375 - $19.25     $17.47
2nd Quarter 2000...................................        803           $17.47          $17.47
3rd Quarter 2000...................................      9,000       $10.31 - $10.50     $10.42
4th Quarter 2000...................................    852,000      $10.15 - $14.875     $11.82
1st Quarter 2001(1)................................     13,500           $14.50          $14.50
2nd Quarter 2001 (through June 28, 2001)...........     --                 --             --   

---------                                                                       

(1) Amtran purchased 10,000 shares of its common stock on January 2, 2001 at a
   price of $14.50 per share and 3,500 shares of its common stock on January
8, 2001 at a price of $14.50 per share.                               

ESTIMATED FEES AND EXPENSES OF THE MERGER 

   The fees and expenses estimated to be incurred by Amtran in connection with
the merger (including Mikelsons' expenses which would be paid upon completion of
the merger) are as follows:                                                     

                                                                [Download Table]
                                                                           
Financial advisory and arrangement fees.....................  $2.65 million
Financing fees and expenses.................................  $3.50 million
Legal, accounting, filing and printing fees and expenses....  $1.75 million
Miscellaneous and other expenses............................  $0.10 million
---------------------------------------------------------------------------
    Total...................................................  $8.00 million

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ELECTION OF DIRECTORS 

GENERAL                                                                         

  Nominees for re-election this year are J. George Mikelsons, John P. Tague,
Kenneth K. Wolff, James W. Hlavacek, Robert A. Abel and Andrejs P. Stipnieks.   
William P. Rogers, Jr., who served as a director of Amtran last year, will not  
be standing for re-election this year, as he will be relocating to London,      
England in August 2001. All directors are elected to serve one-year terms. Each 
of these nominees has consented to being named in the proxy statement and has   
agreed to serve if elected.                                                     

  Our bylaws provide that the nominees for director receiving a plurality of
the votes cast at the Annual Meeting, up to the number of directors to be       
elected at the Annual Meeting, will be elected. Your Board recommends a vote    
'FOR' these nominees. Abstentions and broker non-votes are not included in the  
tabulation of votes cast and, therefore, do not have the effect of votes in     
opposition to a nominee.                                                        

NOMINEES                                                                        

J. GEORGE MIKELSONS                                          Director since 1993
J. George Mikelsons, age 64, is the founder, Chairman of the Board and, prior to
Amtran's initial public offering in May 1993, was the sole shareholder of       
Amtran. Mr. Mikelsons founded ATA and Ambassadair Travel Club, Inc. in 1973. Mr.
Mikelsons currently serves on several boards of directors, including The        
Indianapolis Zoo; the Indianapolis Convention and Visitors Association, where he
is a member of the Executive Committee; and IWC Resources Corporation (formerly 
the Indianapolis Water Company). Mr. Mikelsons has been an airline Captain since
1966 and remains current on several jet aircraft.                               

                                                                Director 1993-95
JOHN P. TAGUE                                         Director July 1997-present
John P. Tague, age 39, was named President and Chief Executive Officer of Amtran
in July 1997. He previously served as Amtran's President and Chief Operating    
Officer from October 1993 before resigning to form his own aviation consulting  
company in 1995. Prior to his tenure as Amtran's President and Chief Operating  
Officer, he was Executive Vice President from June 1993 to October 1993. Prior  
to that time, he was Senior Vice President, Marketing and Sales, of Amtran. From
May 1991 to November 1991, he was Vice President of Marketing and Sales for     
Amtran. Mr. Tague was employed at Midway Airlines from 1985 to 1991. Prior to   
joining Midway Airlines in 1985, Mr. Tague was a transportation consultant and  
held various positions at a regional airline. Mr. Tague serves on the board of  
directors of the Air Transport Association. Mr. Tague's principal business      
address is Amtran's executive offices. Mr. Tague is a citizen of the United     
States of America.                                                              

JAMES W. HLAVACEK                                            Director since 1993
James W. Hlavacek, age 64, was appointed Chief Operating Officer of Amtran in   
1995. He continues to serve as Executive Vice President of Amtran and President 
of ATA Training Corporation. From 1986 to 1989, he was Amtran's Vice President  
of Operations. Mr. Hlavacek has been a commercial airline pilot for 35 years and
has held the rank of Captain for over 30 years. He was ATA's Chief Pilot from   
1985 to 1986. Mr. Hlavacek is the Chairman of the board of directors of the     
National Air Carrier Association. Mr. Hlavacek is a graduate of the University  
of Illinois. Mr. Hlavacek's principal business address is Amtran's executive    
offices. Mr. Hlavacek is a citizen of the United States of America.             

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KENNETH K. WOLFF                                             Director since 1993
Kenneth K. Wolff, age 55, was appointed Executive Vice President and the Chief  
Financial Officer of Amtran in 1991. From 1990 to 1991, he was Amtran's Senior  
Vice President and Chief Financial Officer. From 1989 to 1990, he was President 
and Chief Executive Officer of First of America Bank -- Indianapolis. From 1988 
to 1989, he was President and Chief Operating Officer of this bank. Prior to his
appointment as President of that bank, he held various positions at the bank    
since 1968. Mr. Wolff is a graduate of Purdue University and also holds a       
Masters in Business Administration from Indiana University and was a member of  
the faculty there for five years. Mr. Wolff's principal business address is     
Amtran's executive offices. Mr. Wolff is a citizen of the United States of      
America.                                                                        

ROBERT A. ABEL                                               Director since 1993
Robert A. Abel, age 48, is a director in the public accounting firm of Blue &   
Co., LLC. Mr. Abel is a magna cum laude graduate of Indiana State University    
with a B.S. Degree in Accounting. He is a certified public accountant with over 
20 years of public accounting experience in the areas of auditing and corporate 
tax. He has been involved with aviation accounting and finance since 1976. Blue 
& Co., LLC provides tax and accounting services to Amtran in connection with    
selected matters. Mr. Abel is also a director of Meridian Investment Advisors,  
Inc., a registered investment company. Mr. Abel's principal business address is 
1460 N. Meridian Street, Carmel, Indiana, 46032. Mr. Abel is a citizen of the   
United States of America.                                                       

ANDREJS P. STIPNIEKS                                         Director since 1993
Andrejs P. Stipnieks, age 60, is an international aviation consultant. He       
graduated from the University of Adelaide, South Australia, and is a Barrister  
and Solicitor of the Supreme Courts of South Australia, the Australian Capital  
Territory and of the High Court of Australia. Until 1998, Mr. Stipnieks was a   
Senior Government Solicitor in the Australian Attorney General's Department,    
specializing in aviation and surface transport law and practice. He has         
represented Australia on the Legal Committee of the International Civil Aviation
Organization at Montreal. Mr. Stipnieks' principal business address is 6933     
Andre Drive, Indianapolis, Indiana, 46278. Mr. Stipnieks is a citizen of        
Australia.                                                                      

Information Concerning the Board of Directors                                   

 During 2000, the board of directors held four (4) meetings. All directors
attended each board meeting and each meeting of those committees on which he    
served. As described below, the board of directors has audit and compensation   
committees.                                                                     

                                                        [Enlarge/Download Table]

       NAME OF                                                                           
      COMMITTEE                                                                  MEETINGS
     AND MEMBERS                          FUNCTIONS OF COMMITTEE                 IN 2000 
     -----------                          ----------------------                 ------- 
                                                                                         
AUDIT                  meets with the independent accountants of Amtran             2    
William P. Rogers, Jr. reviews the audit plan for Amtran                                 
Robert A. Abel         reviews the annual audit of Amtran with the independent           
Kenneth K. Wolff(1)     accountants                                                      
Andrejs P.             recommends whether the independent accountants should be          
Stipnieks(1)            continued as auditors for Amtran                                 
                       reviews Amtran's internal controls                                

COMPENSATION           establishes compensation policies and compensation for       2    
Robert A. Abel          Amtran's officers                                                
Andrejs P. Stipnieks                                                                     

---------                                                                       

(1) To insure timely compliance with the new Nasdaq rules governing audit     
 committee composition, the board accepted the resignation of Kenneth K.
    Wolff from the audit committee on February 27, 2001, and appointed Andrejs
P. Stipnieks to the committee.                                        

------------------- 

  The audit committee is governed by a written charter approved by the board
of directors. A copy of this charter is included in Annex D. Mr. Rogers, Mr.    
Abel and Mr. Stipnieks of the audit                                             

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committee are 'independent directors' as defined by Rule 4200(a)(14) of the     
National Association of Securities Dealers' listing standards, as applicable and
as may be modified. Additional information about the audit committee is set     
forth in the 'Report of the Audit Committee' included in this proxy statement.  
We do not have a standing nominating committee.                                 

Compensation of Directors                                                       

We do not pay directors who are also officers of Amtran additional      
compensation for their service as directors. In 2000, non-employee directors    
received the following:                                                         

An annual retainer of $18,000 for serving on the Board                

An annual fee of $2,500 for serving as Chairman of a committee        

A fee of $2,000 for each board of directors meeting attended in person

     A fee of $1,000 for each committee meeting attended in person. (Amtran also
    pays its non-employee directors if they participate in board and committee
meetings by telephone.)                                               

     Options to purchase shares of Amtran's common stock pursuant to the Amtran,
   Inc. Stock Option Plan for Non-Employee Directors (a one-time grant of an
  option to purchase 2,000 shares following his election or appointment to
     the board of directors, and for as long as he remains an Eligible Director,
an annual grant of an option to purchase 500 shares on the 30th day   
following each annual meeting of shareholders.)                       

Section 16(a) Beneficial Ownership Reporting Compliance                         

Section 16(a) of the Exchange Act requires our directors and executive  
officers and persons who own more than ten percent of Amtran's shares to file   
with the SEC and Nasdaq reports on their ownership of shares of Amtran          
(so-called 16(a) forms). Except as set forth below, we believe, based solely on 
our review of copies of such reports, that our directors and officers complied  
with all such filing requirements.                                              

On January 24, 2000, Willie G. McKnight, Jr. became the Executive Vice  
President for Marketing and Sales of Amtran. The Form 3 filed with the SEC      
reporting this event, which was required to be filed by February 3, 2000, was   
filed late on February 22, 2000.                                                

During February 2000, John Tague sold shares of Amtran common stock in 4
transactions. The Form 4 filed with the SEC reporting these events, which was   
required to be filed by March 10, 2000, was filed late on April 18, 2000.       

In 2000, Messrs. Tague, Wolff, Hlavacek, McKnight, Abel, Rogers and     
Stipnieks each voluntarily reported the receipt of option grants on Form 4s     
which, in each case, were filed with the SEC after the due date for the         
reporting of such transactions on Form 4 but prior to the due date for reporting
these exempt transactions on Form 5. Accordingly, Amtran does not regard these  
filings on Form 4 as late.                                                      

Certain Relationships and Related Party Transactions in 2000                    

Mr. Mikelsons is the sole owner of Betaco, Inc., a Delaware corporation 
('Betaco'). Betaco currently owns two airplanes (a Cessna Citation II and a Lear
Jet) and three helicopters (a Bell 206B Jet Ranger III, an Aerospatiale 355F2   
Twin Star and a Bell 206L-3 LongRanger). The two airplanes and the Twin Star and
Jet Ranger III helicopters are leased or subleased to ATA. The LongRanger       
helicopter is leased to American Trans Air ExecuJet, Inc. ('ExecuJet'). We      
believe that the current terms of the leases and subleases with Betaco for this 
equipment are no less favorable to us than those that could be obtained from    
third parties.                                                                  

    The sublease for the Cessna Citation currently requires a monthly payment of
$37,500. The sublease for the Lear Jet requires a monthly payment of $42,000.   
The lease for the JetRanger III currently requires a monthly payment of $7,000. 
The sublease for the Aerospatiale 355F2 Twin Star requires a monthly payment of 
$22,500, and the lease for the LongRanger requires a monthly payment of $11,200.

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  Betaco and Mr. Hlavacek own 100% of the interest in Delta Aviation LLC, an
Indiana limited liability corporation. Delta Aviation owns a Beech A36 Bonanza  
aircraft. The aircraft is leased to ExecuJet and subleased to ATA for $75.00 per
flight hour. No minimum monthly payment is required.                            

    Mr. Rogers, Chairman of the audit committee, is a partner in the law firm of
Cravath, Swaine & Moore, which provided legal services to Amtran in 2000. Mr.   
Abel, Chairman of the compensation committee, is a partner in the accounting    
firm of Blue & Co., LLC, which provided tax and accounting services to Amtran in
2000.                                                                           

  As part of our compensation package to Willie McKnight, our executive Vice
President, Marketing and Sales, on January 24, 2000, we provided Mr. McKnight   
with an interest-free loan of $230,000. The loan is evidenced by a Demand       
Promissory Note signed by Mr. McKnight. However, 50% of the loan was forgiven on
January 24, 2001, and the remainder of the principal balance shall be forgiven  
if Mr. McKnight is still employed by us on January 24, 2002. As of June 18,     
2001, Mr. Mikelsons has outstanding indebtedness to Amtran with an aggregate    
principal balance of $378,406. Amtran does not charge Mikelsons interest on this
indebtedness. In addition, we loaned Mr. Tague $175,000 on February 1, 2001. The
loan is evidenced by a Promissory Note, bears interest at an annual rate of 8%  
and must be repaid by no later than January 31, 2002.                           

EXECUTIVE COMPENSATION AND STOCK OPTIONS

Report of Compensation Committee on Executive Compensation                      

WHAT IS OUR COMPENSATION PHILOSOPHY?                                            

 The objectives of our executive compensation programs are to: (i) attract
and retain talented and experienced executives with compensation that is        
competitive with other U.S. airlines of a size comparable to ATA, (ii) reward   
outstanding performance and provide incentives based on individual and corporate
performance, and (iii) use restricted stock and stock options to align the      
interests of management with those of the shareholders.                         

    The compensation committee is responsible for administering our compensation
policies and programs, including its officer incentive compensation programs.   
The compensation committee currently consists of two independent non-employee   
directors, Robert A. Abel and Andrejs P. Stipnieks. Mr. Abel, Chairman of the   
compensation committee, is a director in the accounting firm of Blue & Co., LLC.
Mr. Abel's firm provided tax and accounting service to us in 2000.              

    As discussed below, the elements of compensation used by us include salaries
and short-term and long-term incentive programs, including the award of cash    
bonuses and stock options.                                                      

HOW DO WE DETERMINE BASE PAY?                                                   

   The base pay for Mr. Mikelsons and Mr. Tague reflects Amtran's objective to
maintain salary levels that are competitive with those offered by U.S. airlines 
of a size comparable to ATA for comparable positions, taking into consideration 
a number of factors, as described below.                                        

MR. MIKELSONS' 2000 BASE PAY                                                    

   In establishing a base salary for Mr. Mikelsons, the compensation committee
considered:                                                                     

a compensation analysis prepared by an independent consultant.        

the fact that Mr. Mikelsons would not participate in any equity-based 
    incentive compensation plan or incentive cash bonus of Amtran and the fact
that no increase in base salary over 1997 was being proposed.         

his age, experience and responsibilities.                             

   Each of these listed factors was evaluated by the compensation committee on
a subjective basis, and no particular weighting was given to any particular     
factor. The compensation committee also sought to maintain the same relative    
relationship between the salary levels of different officers                    

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as exists for comparable positions at other U.S. airlines. After considering the
above factors, the compensation committee approved a base salary for the        
Chairman for 2000 of $688,194. Based on a compensation analysis available to the
compensation committee, such base salary is higher than the base salaries paid  
by other airlines to executives holding comparable positions but, given the     
absence of any stock-based compensation or incentive cash bonus, total          
compensation was between the median and the 75th percentile of total annual cash
compensation paid by the other airlines included in the analysis.               

MR. TAGUE'S 2000 BASE PAY                                                       

In establishing a base salary for Mr. Tague, the compensation committee 
considered:                                                                     

a compensation analysis prepared by an independent consultant.        

his age, experience and responsibilities.                             

   Each of these listed factors was evaluated by the compensation committee on
a subjective basis, and no particular weighting was given to any particular     
factor. The compensation committee also sought to maintain the same relative    
relationship between the salary levels of different officers as exists for      
comparable positions at other U.S. airlines. After considering the above        
factors, the compensation committee approved an annual base salary for 2000 for 
Mr. Tague of $525,000. Based on a compensation analysis available to the        
compensation committee, such base salary is between the median and the 75th     
percentile of the base salary paid by most other airlines to executives holding 
comparable positions. Mr. Tague's total compensation, including bonus and long- 
term incentive compensation, is below the median of the annual compensation paid
by the other airlines included in the analysis.                                 

HOW ARE ANNUAL BONUSES DETERMINED?                                              

   Annual bonuses are paid in cash in the year following performance, based on
achievement of predetermined corporate goals. As in prior years, Mr. Mikelsons  
was not eligible for a bonus payment in 2000. Because we did not achieve our    
corporate goals in 2000, Mr. Tague did not receive a bonus for 2000.            

                          Compensation Committee
                            Robert A. Abel, Chairman
                        Andrejs P. Stipnieks

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Summary of Cash and Certain Other Compensation                                  

SUMMARY COMPENSATION TABLE

This table shows the compensation paid or accrued to the Chairman of the
Board, President and three executive officers for services rendered during the  
last three fiscal years.                                                        

                                                        [Enlarge/Download Table]

                                                                 LONG-TERM                    
                                                                COMPENSATION                  
                                                                ------------                  
                                       ANNUAL COMPENSATION       SECURITIES                   
             NAME AND              ---------------------------   UNDERLYING       ALL OTHER   
        PRINCIPAL POSITION         YEAR   SALARY($)   BONUS($)  OPTIONS (#)    COMPENSATION($)
        ------------------         ----   ---------   --------  -----------    ---------------
                                                                                              
J. George Mikelsons, ............. 2000    688,194       None        None           3,535(1)  
  Chairman of the Board            1999    688,194       None        None           4,320(2)  
                                   1998    688,194       None        None           3,840(3)  
John P. Tague, ................... 2000    525,000       None      75,000(4)        5,250(1)  
  President and Chief              1999    519,231    460,000      75,000(5)        4,320(2)  
  Executive Officer                1998    496,153    800,000      75,000(6)        2,308(3)  
James W. Hlavacek ................ 2000    350,000       None      50,000(7)        3,506(1)  
  Executive Vice President and     1999    337,500    224,250      50,000(8)        4,320(2)  
  Chief Operating Officer          1998    323,942    390,000      50,000(9)        3,840(3)  
Kenneth K. Wolff ................. 2000    350,000       None      50,000(7)        3,393(1)  
  Executive Vice President and     1999    337,500    224,250      50,000(8)        4,320(2)  
  Chief Financial Officer          1998    323,942    390,000      50,000(9)        3,840(3)  
Willie G. McKnight(10) ........... 2000    323,077    210,000     100,000(11)        None     
  Executive Vice President,                                                                   
  Marketing and Sales                                                                         

---------                                                                       

(1) Represents the amount of our matching contribution to our 401(k) Plan in  
2000.                                                                 

(2) Represents the amount of our matching contribution to our 401(k) Plan in  
1999.                                                                 

(3) Represents the amount of our matching contribution to our 401(k) Plan in  
1998.                                                                 

(4) Pursuant to the 2000 Incentive Stock Plan for Key Employees of Amtran,    
  Inc., the grant of options to Mr. Tague to purchase 75,000 shares of our
  stock were scheduled to become exercisable as to the following aggregate
number of shares on and after each of the following dates: January 28,
   2001 -- 25,000 shares; January 28, 2002 -- 25,000 shares; and January 28,
  2003 -- 25,000 shares. These options became exercisable upon the board's
approval of the merger.                                               

(5) Pursuant to the 1996 Incentive Stock Plan for Key Employees of Amtran,    
  Inc., the grant of options to Mr. Tague to purchase 75,000 shares of our
  stock were scheduled to become exercisable as to the following aggregate
number of shares on and after each of the following dates: January 5, 
 2000 -- 25,000 shares; January 5, 2001 -- 25,000 shares; and January 5,
  2002 -- 25,000 shares. These options became exercisable upon the board's
approval of the merger.                                               

(6) Pursuant to the 1996 Incentive Stock Plan for Key Employees of Amtran,    
  Inc., the grant of options to Mr. Tague to purchase 75,000 shares of our
  stock were scheduled to become exercisable as to the following aggregate
number of shares on and after each of the following dates: January 10,
   1999 -- 25,000 shares; January 10, 2000 -- 25,000 shares; and January 10,
  2001 -- 25,000 shares. These options became exercisable upon the board's
approval of the merger.                                               

(7) Pursuant to the 2000 Incentive Stock Plan for Key Employees of Amtran,    
     Inc., the grant of options to Messrs. Hlavacek and Wolff to purchase 50,000
 shares each of our stock were scheduled to become exercisable as to the
 following aggregate number of shares on and after each of the following
dates: January 28, 2001 -- 16,667 shares; January 28, 2002 -- 16,667  
shares; and January 28, 2003 -- 16,666 shares. These options became   
exercisable upon the board's approval of the merger.                  

(8) Pursuant to the 1996 Incentive Stock Plan for Key Employees of Amtran,    
     Inc., the grant of options to Messrs. Hlavacek and Wolff to purchase 50,000
 shares each of our stock were scheduled to become exercisable as to the
following aggregate number of shares on and after                     
                                              (footnotes continued on next page)

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(footnotes continued from previous page)                                        
   each of the following dates: January 5, 2000 -- 16,667 shares; January 5,
    2001 -- 16,667 shares; and January 5, 2002 -- 16,666 shares. These options
became exercisable upon the board's approval of the merger.           

(9) Pursuant to the 1996 Incentive Stock Plan for Key Employees of Amtran,    
     Inc., the grant of options to Messrs. Hlavacek and Wolff to purchase 50,000
 shares each of our stock were scheduled to become exercisable as to the
 following aggregate number of shares on and after each of the following
dates: January 10, 1999 -- 16,667 shares; January 10, 2000 -- 16,667  
shares; and January 10, 2001 -- 16,666 shares. These options became   
exercisable upon the board's approval of the merger.                  

(10) Mr. McKnight was hired on January 24, 2000.                                

(11) Pursuant to the 2000 Incentive Stock Plan for Key Employees of Amtran,     
    Inc., the grant of options to Mr. McKnight to purchase 100,000 shares each
of our stock were scheduled to become exercisable as to the following 
aggregate number of shares on and after each of the following dates:  
   February 4, 2001 -- 33,334 shares; February 4, 2002 -- 33,333 shares; and
  February 4, 2003 -- 33,334 shares. These options became exercisable upon
the board's approval of the merger.                                   

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OPTION GRANTS TABLE 

  This table shows the option grants in 2000 to the individuals named in the
Summary Compensation Table.                                                     

                                                        [Enlarge/Download Table]

                                                                                 POTENTIAL REALIZABLE 
                               INDIVIDUAL GRANTS                                   VALUE AT ASSUMED   
                         -----------------------------                              ANNUAL RATES OF   
                         NUMBER OF        % OF TOTAL                                     STOCK        
                         SECURITIES        OPTIONS                                PRICE APPRECIATION  
                         UNDERLYING        GRANTED       EXERCISE                 FOR OPTION TERM(1)  
                          OPTIONS        TO EMPLOYEES   PRICE/SHARE  EXPIRATION  ---------------------
          NAME            GRANTED       IN FISCAL YEAR      ($)         DATE       5%($)      10%($)  
          ----            -------       --------------      ---         ----       -----      ------  
                                                                                                      
J. George Mikelsons.....    -0-           -0-              --           --          --          --    
John P. Tague...........     75,000(2)       12%           15.75     1/28/2010     742,882   1,882,608
James W. Hlavacek.......     50,000(3)        8%           15.75     1/28/2010     495,255   1,255,072
Kenneth K. Wolff........     50,000(3)        8%           15.75     1/28/2010     495,255   1,255,072
Willie G. McKnight......    100,000(4)       16%           16.06      2/4/2010   1,010,162   2,559,949

---------                                                                       

(1) The values are the result of calculations at the 5% and 10% rates set by the
    SEC. Our per-share stock price would be $25.66 and $40.85 if increased by 5%
    and 10%, respectively, compounded annually over a ten-year option term on an
   exercise price of $15.75. The per-share price would be $26.16 and $41.66 if
  increased by 5% and 10%, respectively, compounded annually over a ten-year
option term on an exercise price of $16.06.                             

(2) See Footnote 4 to Summary Compensation Table on vesting of Options.         

(3) See Footnote 7 to Summary Compensation Table on vesting of Options.         

(4) See Footnote 11 to Summary Compensation Table on vesting of Options.        

OPTION EXERCISES AND
YEAR-END OPTION VALUES

This table shows the number and value of stock options (exercised and   
unexercised) for the named individuals during 2000.                             

                                                        [Enlarge/Download Table]

                                                                                         VALUE OF     
                                                                                        UNEXERCISED   
                                                          NUMBER OF SECURITIES         IN-THE-MONEY   
                                SHARES                   UNDERLYING UNEXERCISED      OPTIONS AT FISCAL
                               ACQUIRED     VALUE      OPTIONS AT FISCAL YEAR-END        YEAR-END     
                              ON EXERCISE  REALIZED    --------------------------    EXERCISABLE (E)/ 
            NAME                  (#)        ($)     EXERCISABLE      UNEXERCISABLE  UNEXERCISABLE (U)
            ----                  ---        ---     -----------      -------------  -----------------
                                                                                                      
J. George Mikelsons..........   -0-          -0-        -0-              -0-              -0-         

John P. Tague................   10,000      79,375     300,758           150,000        $1,735,987(E) 
                                                                                           162,500(U) 
James W. Hlavacek............   -0-          -0-       209,432           100,000           815,750(E) 
                                                                                           108,329(U) 
Kenneth K. Wolff.............   -0-          -0-       238,000           100,000           962,281(E) 
                                                                                           108,329(U) 
Willie G. McKnight...........   -0-          -0-        -0-              100,000        -0-(E)        
                                                                                        -0-(U)        

PENSION PLANS                                                                   

We have no pension plans.                                               

401(k) PLAN                                                                     

  Under the American Trans Air, Inc. Employees' Retirement Savings Plan (the
'401(k) Plan'), adopted on October 1, 1985, eligible employees could elect to   
defer up to 15% of their salary into                                            

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the 401(k) Plan, not to exceed statutory limits. Generally, all employees       
meeting a minimum-hours requirement are eligible to participate in the 401(k)   
Plan. We have the discretion to make matching contributions to the 401(k) Plan  
on behalf of participants who have made salary reduction contributions under the
Plan. In 2000, we contributed $.50 for each dollar contributed to the Plan by   
eligible participants, up to 6% of their compensation. An employee stock        
ownership feature was added to the 401(k) Plan in May 1993; however, this       
feature will be eliminated upon completion of the merger. The ATA Employee Stock
Ownership Plan ('ESOP') has been a mechanism for us to award shares of our stock
for years in which profits have occurred. Addition of this benefit has permitted
eligible employees to become shareholders of Amtran and share in its potential  
future growth and profitability. Generally, the eligibility requirements for the
ESOP have been identical to those of the 401(k) Plan, except an employee may    
have been eligible for an ESOP contribution of Company stock even if the        
employee did not elect pre-tax 401(k) Plan contributions.                       

 In those years in which we have experienced profits and chosen to make an
ESOP contribution, the 401(k) Plan accounts of eligible employees have been     
credited with full and/or fractional shares of Company stock. Shares were       
allocated based on compensation. In 2000, no shares of Amtran stock were        
allocated to 401(k) Plan participant accounts.                                  

Stock Performance Graph                                                         

This performance graph compares the 2000 total shareholder return on    
Amtran's common stock with the Nasdaq Stock Market-U.S. Index and Amtran's peer 
group. The peer group selected by Amtran consists of the following companies:   
Alaska Air Group, Inc., America West Holdings Corporation, AMR Corp. (American  
Airlines), Amtran, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., HAL,
Inc. (Hawaiian Airlines), Northwest Airlines, Inc., Southwest Airlines Co., US  
Airways Group, Inc. and UAL Corp. (United Airlines).                            

COMPARISON OF 5-YEAR CUMULATIVE 
TOTAL RETURN AMONG AMTRAN,
NASDAQ MARKET-U.S. INDEX AND A PEER GROUP 

[Performance Graph]     

Year                     Amtran, Inc.  Peer Group     NASDAQ            
----                     ------------  ----------     ------            
         (Dollars)
1995......................  100           100           100             
1996......................   55           107           123             
1997......................   62           168           151             
1998......................  213           148           213             
1999......................  152           151           395             
2000......................  114           167           238             

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RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS

General                                                                         

   Ernst & Young, LLP has been our independent public accountants for the past
eight years. The audit committee and the board believe that Ernst & Young's     
long-term knowledge of Amtran is invaluable. Representatives of Ernst & Young   
have direct access to members of the audit committee and regularly attend their 
meetings. Representatives of Ernst & Young will attend the annual meeting to    
answer any shareholder questions and to make a statement if they desire to do   
so.                                                                             

Audit Fees                                                                      

The aggregate fees billed by Ernst & Young for professional services    
rendered for the audit of Amtran's annual financial statements for the year     
ended December 31, 2000, and the reviews of the financial statements included in
Amtran's quarterly reports on Form 10-Q during the year 2000 were $273,500.     

Financial Information Systems Design and Implementation Fees                    

   Ernst & Young performed no services for Amtran in 2000 related to financial
information systems design and implementation.                                  

Other Fees                                                                      

    The aggregate fees billed by Ernst & Young for services they rendered in the
year 2000 other than services included under the heading 'Audit Fees' were      
$282,790.                                                                       

   In 2000, the audit committee: (1) reviewed all services provided by Ernst &
Young to insure that they were within the scope previously approved by the      
Committee; and (2) concluded that the non-audit services performed by Ernst &   
Young for Amtran and its subsidiaries did not impair its independence as        
Amtran's accountants. The Report of the Audit Committee contained in this proxy 
statement contains additional information on Ernst & Young's services for       
Amtran.                                                                         

  We need a majority of the votes cast in person or by proxy and entitled to
vote at the annual meeting in order to ratify Ernst & Young LLP as independent  
accountants for 2001. The audit committee and the board of directors recommend a
vote 'FOR' Ernst & Young, LLP as independent accountants for 2001.              

    Abstentions and broker non-votes are not included in the tabulation of votes
cast and, therefore, do not have the effect of votes in opposition to the       
ratification of Ernest & Young as auditors.                                     

Other Matters                                                                   

 The Board of Directors does not anticipate that any other matters will be
properly brought before the Annual Meeting. However, if any other matters are   
properly brought before the Annual Meeting, the persons named on the enclosed   
proxy card will have discretionary authority to vote on those matters according 
to their best judgment.                                                         

Report of the Audit Committee                                                   

 The audit committee has reviewed and discussed Amtran's audited financial
statements for the fiscal year 2000 with management and has received the written
disclosures and the letter from Ernst & Young, LLP, Amtran's independent        
auditors, required by Independence Standards Board Standard No. 1 (Independent  
Discussions with Audit Committee). The audit committee has also discussed with  
Ernst & Young LLP Amtran's audited financial statements for the fiscal year     
2000, including, among other things, the quality of Amtran's accounting         
principles, the methodologies and accounting principles applied to significant  
transactions, the underlying processes and estimates used                       

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by management in its financial statements and the basis for the auditor's       
conclusions regarding the reasonableness of those estimates, and the auditor's  
independence, as well as the other matters required by Statement on Auditing    
Standards No. 61 of the Auditing Standards Board of the American Institute of   
Certified Public Accountants.                                                   

  Based on the review and discussions referred to above, the audit committee
recommended inclusion of the audited financial statements in Amtran's annual    
report on Form 10-K to the board of directors.                                  

                   Audit Committee
                                    William P. Rogers, Jr., Chairman
                  Robert A. Abel
                        Andrejs P. Stipnieks

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STOCK OWNERSHIP 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                  

 The following table sets forth certain information as of the date of this
proxy statement with respect to the beneficial ownership of the outstanding     
shares of our common stock by (i) all persons owning of record, or beneficially 
to our knowledge, more than five percent of the outstanding shares, (ii) each   
director and executive officer of Amtran, individually, and (iii) all directors 
and officers of Amtran as a group. Unless otherwise indicated, the mailing      
address of each of the persons shown is c/o Amtran, Inc., 7337 West Washington  
Street, Indianapolis, Indiana 46231.                                            

                                                        [Enlarge/Download Table]

             NAME AND ADDRESS OF              NUMBER OF SHARES   RIGHT TO         PERCENT OF     
              INDIVIDUAL/GROUP                    OWNED(1)      ACQUIRE(2)  OUTSTANDING SHARES(3)
              ----------------                    --------      ----------  ---------------------
                                                                                                 
J. George Mikelsons..........................    8,271,200(4)            0            72         
John P. Tague................................       10,000         450,758            --         
James W. Hlavacek............................       52,568         309,431            --         
Kenneth K. Wolff.............................       11,700         338,000            --         
Robert A. Abel...............................        4,000           5,500            --         
William P. Rogers, Jr........................        5,000           5,500                       
Andrejs P. Stipnieks.........................        1,500           5,500            --         
Willie G. McKnight...........................            0         100,000            --         
INDUS Acquisition Company                                                                        
  7337 West Washington Street                                                                    
  Indianapolis, Indiana 46231................    8,271,200(4)            0            72         
Dimensional Fund Advisors Inc.                                                                   
  1299 Ocean Avenue, 11th Floor                                                                  
  Santa Monica, CA 90401.....................    1,041,500(5)            0             9         
All directors and executive officers as a                                                        
  group(6) (excluding J. George Mikelsons)...       84,768       1,214,689            11         

---------                                                                       

(1) Includes shares for which the named person has shared voting and investment 
power with a spouse.                                                    

(2) Shares that can be acquired through presently exercisable stock options.    

(3) If more than 1%.                                                            

(4) These shares of our common stock are owned of record by Mikelsons as of the 
   date of this proxy statement. INDUS and Mikelsons have entered into a Stock
Subscription Agreement providing for the acquisition of these shares by 
 INDUS. Therefore, INDUS may be deemed to be the beneficial owner of these
shares.                                                                 

(5) Dimensional Fund Advisors Inc. ('Dimensional'), an investment advisor       
registered under Section 203 of the Investment Advisors Act of 1940,    
 furnishes investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment manager to 
    certain other investment vehicles, including commingled group trusts. (These
  investment companies and investment vehicles are the 'Portfolios'.) In its
role as investment advisor and investment manager, Dimensional possesses
both voting and investment power over the securities of Amtran that are 
 owned by the Portfolios. Such securities are owned by the Portfolios, and
Dimensional disclaims beneficial ownership of such securities.          

(6) Group consists of seven persons (Messrs. Tague, Hlavacek, Wolff, Abel,      
Rogers, Stipnieks and McKnight).                                        

SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING 

 Upon the consummation of the merger, all of the outstanding shares of our
common stock will be held and voted by Mikelsons. As a result, we will not      
solicit proxies in connection with the next annual meeting of shareholders. If  
the merger is not consummated, then, according to the                           

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rules of the SEC, all proposals of shareholders to be presented at the annual   
meeting would be required to be received by the Secretary of Amtran a reasonable
time before we begin to print and mail our proxy materials. These proposals     
would also need to comply with the rules of the SEC governing the form and      
content of proposals in order to be included in our proxy statement and form of 
proxy.                                                                          

  Shareholder proposals and related notices should be sent to Brian T. Hunt,
Secretary, 7337 West Washington Street, Indianapolis, Indiana 46231.            

OTHER MATTERS 

    We know of no other business to be presented at the annual meeting. If other
matters do properly come before the annual meeting, or any adjournment or       
postponement thereof, it is the intention of the persons named in the proxy to  
vote on such matters according to their best judgment unless the authority to do
so is withheld in such proxy.                                                   

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

    The following documents previously filed by us (File No. 000-21642) with the
Commission are incorporated by reference in this proxy statement:               

     our Annual Report on Form 10-K for the fiscal year ended December 31, 2000,
previously filed with the SEC on March 16, 2001;                      

     our Amended Annual Report on Form 10-K/A for the fiscal year ended December
31, 2000, previously filed with the SEC on May 23, 2001;              

our Quarterly Report on Form 10-Q for quarter ended March 31, 2001,   
previously filed with the SEC on May 15, 2001; and                    

   our Current Reports on Form 8-K, previously filed with the SEC on May 17,
2001 and May 25, 2001.                                                

    All documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date hereof and prior to the date of the
annual meeting shall be deemed to be incorporated by reference herein and shall 
be a part hereof from the date of filing of such documents. Any statements      
contained in a document incorporated by reference herein or contained in this   
proxy statement shall be deemed to be modified or superseded for purposes hereof
to the extent that a statement contained herein (or in any other subsequently   
filed document which also is incorporated by reference herein) modified or      
superseded such statement. Any statement so modified or superseded shall not be 
deemed to constitute a part hereof except as so modified or superseded.         

This proxy statement incorporates documents by reference that are not   
presented in or delivered with this proxy statement. These documents are        
available upon request from Brian T. Hunt, Secretary, Amtran, Inc., 7337 West   
Washington Street, Indianapolis, Indiana 46231. In order to ensure timely       
delivery, any request should be made by [    ], 2001.                           

WHERE YOU CAN FIND MORE INFORMATION 

 We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or other
information we file at the Public Reference Section of the SEC located at       
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the following  
regional offices of the SEC: 7 World Trade Center, 13th Floor, Suite 1300, New  
York, New York 10004; and Suite 1400, Citicorp Center, 500 West Madison Street, 
Chicago, Illinois 60661. You may obtain copies of all or any portion of the     
material by mail from the Public Reference Section of the SEC at 450 Fifth      
Street, N.W., Washington, D.C. 20549 at prescribed rates. Please call the SEC at
(800) SEC-0330 for further information on the public reference rooms. Our       
filings are also available to the public at the web site maintained by the SEC  
at http://www.sec.gov.                                                          

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                                                                  CONFORMED COPY

                                                                         ANNEX A
________________________________________________________________________________

AGREEMENT AND PLAN OF MERGER

DATED AS OF JUNE 18, 2001 

BETWEEN 

INDUS ACQUISITION COMPANY 

AND 

AMTRAN, INC.

________________________________________________________________________________

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TABLE OF CONTENTS 

                                                                [Download Table]

                                    ARTICLE I                                   
                                   THE MERGER                                   
                                                                                
SECTION 1.01.  The Merger..................................................  A-1
SECTION 1.02.  Closing.....................................................  A-1
SECTION 1.03.  Effective Time..............................................  A-1
SECTION 1.04.  Effects.....................................................  A-2
SECTION 1.05.  Articles of Incorporation and Bylaws........................  A-2
SECTION 1.06.  Directors...................................................  A-2
SECTION 1.07.  Officers....................................................  A-2

                                   ARTICLE II                                   
          EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;          
                            EXCHANGE OF CERTIFICATES                            

SECTION 2.01.  Effect on Capital Stock.....................................  A-2
SECTION 2.02.  Exchange of Certificates....................................  A-2

                                   ARTICLE III                                  
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY                 

SECTION 3.01.  Organization, Standing and Power............................  A-4
SECTION 3.02.  Capital Structure...........................................  A-4
SECTION 3.03.  Authority; Execution and Delivery; Enforceability...........  A-5
SECTION 3.04.  No Conflicts; Consents......................................  A-5
SECTION 3.05.  SEC Documents; Undisclosed Liabilities......................  A-6
SECTION 3.06.  Brokers; Schedule of Fees and Expenses......................  A-7
SECTION 3.07.  Opinion of Financial Advisor................................  A-7

                                   ARTICLE IV                                   
                      REPRESENTATIONS AND WARRANTIES OF SUB                     

SECTION 4.01.  Organization, Standing and Power............................  A-7
SECTION 4.02.  Sub.........................................................  A-7
SECTION 4.03.  Authority; Execution and Delivery; Enforceability...........  A-7
SECTION 4.04.  No Conflicts; Consents......................................  A-7
SECTION 4.05.  Brokers.....................................................  A-8
SECTION 4.06.  Financing...................................................  A-8

                                    ARTICLE V                                   
                    COVENANTS RELATING TO CONDUCT OF BUSINESS                   

SECTION 5.01.  Conduct of Business.........................................  A-8

                                   ARTICLE VI                                   
                              ADDITIONAL AGREEMENTS                             
SECTION 6.01.  Preparation of Proxy Statement; Shareholders Meeting........  A-9
SECTION 6.02.  Access to Information; Confidentiality...................... A-10
SECTION 6.03.  Reasonable Best Efforts; Notification....................... A-10
SECTION 6.04.  Stock Options............................................... A-11
SECTION 6.05.  Indemnification............................................. A-12
SECTION 6.06.  Fees and Expenses........................................... A-12
SECTION 6.07.  Public Announcements........................................ A-12
SECTION 6.08.  Transfer Taxes.............................................. A-12
SECTION 6.09.  Shareholder Litigation...................................... A-12
SECTION 6.10.  Information Supplied........................................ A-12

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                                                                [Download Table]

                                                                            PAGE
                                                                            ----
                                                                                
                                   ARTICLE VII                                  
                              CONDITIONS PRECEDENT                              

SECTION 7.01.  Conditions to Each Party's Obligation to Effect the              
                 Merger.................................................... A-13
SECTION 7.02.  Conditions to Obligations of Sub............................ A-14
SECTION 7.03.  Conditions to Obligations of the Company.................... A-14

                                  ARTICLE VIII                                  
                        TERMINATION, AMENDMENT AND WAIVER                       

SECTION 8.01.  Termination................................................. A-15
SECTION 8.02.  Effect of Termination....................................... A-16
SECTION 8.03.  Amendment................................................... A-16
SECTION 8.04.  Extension; Waiver........................................... A-16
SECTION 8.05.  Procedure for Termination, Amendment, Extension or Waiver... A-16

                                   ARTICLE IX                                   
                               GENERAL PROVISIONS                               

SECTION 9.01.  Nonsurvival of Representations and Warranties............... A-16
SECTION 9.02.  Notices..................................................... A-16
SECTION 9.03.  Definitions................................................. A-17
SECTION 9.04.  Interpretation.............................................. A-17
SECTION 9.05.  Severability................................................ A-17
SECTION 9.06.  Counterparts................................................ A-18
SECTION 9.07.  Entire Agreement; No Third-Party Beneficiaries.............. A-18
SECTION 9.08.  Governing Law............................................... A-18
SECTION 9.09.  Assignment.................................................. A-18
SECTION 9.10.  Enforcement................................................. A-18
SECTION 9.11.  Obligations of JGM.......................................... A-18

EXHIBIT A -- Plan of Merger                                                     

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     AGREEMENT AND PLAN OF MERGER dated as of June 18, 2001, between INDUS
 ACQUISITION COMPANY, an Indiana corporation ('SUB'), and AMTRAN, INC., an
Indiana corporation (the 'COMPANY').                                    

  WHEREAS, as of the date hereof, J. George Mikelsons ('JGM') owns 8,271,200
shares of the common stock, without par value, of the Company (the 'COMPANY     
COMMON STOCK');                                                                 

WHEREAS the respective Boards of Directors of Sub and the Company have  
approved the merger (the 'MERGER') of Sub into the Company, on the terms and    
subject to the conditions set forth in this Agreement, whereby (a) each issued  
share of Company Common Stock not owned by JGM, Sub or the Company, shall be    
converted into the right to receive from the Surviving Corporation $23.00 in    
cash, without interest, and (b) each issued share of Series A1 Preferred Stock, 
without par value, of the Company (the 'SERIES A1 PREFERRED STOCK') and Series B
Preferred Stock, without par value, of the Company (the 'SERIES B PREFERRED     
STOCK' and, together with the Series A1 Preferred Stock, the 'COMPANY PREFERRED 
STOCK', and the Company Preferred Stock, together with the Company Common Stock,
the 'COMPANY CAPITAL STOCK'), shall remain outstanding;                         

  WHEREAS the Company has entered into a Purchase and Voting Agreement dated
as of May 16, 2001 (the 'ILFC AGREEMENT' and, together with this Agreement, the 
'TRANSACTION AGREEMENTS'), with International Lease Finance Corporation, a      
California corporation ('ILFC'), and which was approved by the Board of         
Directors of the Company (the 'COMPANY BOARD') on the date hereof pursuant to   
which (i) the Company will amend Article XII (the 'ILFC AMENDMENT') of the      
Company Charter (as defined in Section 3.02), subject to receipt of the         
requisite shareholder approval, immediately prior to the Effective Time (as     
defined in Section 1.03) to modify certain terms of the Series B Preferred Stock
to reflect the fact that following the Merger the Company will be private, (ii) 
ILFC has agreed to vote its shares of Series B Preferred Stock in favor of the  
ILFC Amendment and (iii) the Company has agreed to repurchase between 5 and 10% 
of ILFC's shares of Series B Preferred Stock, with the amount to be repurchased 
to be determined by the Company; and                                            

WHEREAS Sub and the Company desire to make certain representations,     
warranties, covenants and agreements in connection with the Merger and also to  
prescribe various conditions to the Merger.                                     

NOW, THEREFORE, the parties hereto agree as follows:                    

ARTICLE I 
THE MERGER

SECTION 1.01. The Merger. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Indiana Business Corporation
Law (the 'IBCL'), Sub shall be merged with and into the Company at the Effective
Time (as defined in Section 1.03). At the Effective Time, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving    
corporation (the 'SURVIVING CORPORATION').                                      

   SECTION 1.02. Closing. The closing (the 'CLOSING') of the Merger shall take
place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York,   
New York 10019 at 10:00 a.m. on the second business day following the           
satisfaction (or, to the extent permitted by Law (as defined in Section         
3.04(a)), waiver by all parties) of the conditions set forth in Section 7.01,   
or, if on such day any condition set forth in Section 7.02 or 7.03 has not been 
satisfied (or, to the extent permitted by Law, waived by the party or parties   
entitled to the benefits thereof), as soon as practicable after all the         
conditions set forth in Article VII have been satisfied (or, to the extent      
permitted by Law, waived by the parties entitled to the benefits thereof), or at
such other place, time and date as shall be agreed in writing between Sub and   
the Company. The date on which the Closing occurs is referred to in this        
Agreement as the 'CLOSING DATE'.                                                

SECTION 1.03. Effective Time. Prior to the Closing, the Company shall   
prepare, and on the Closing Date or as soon as practicable thereafter the       
Company shall file with the office of the Secretary of State of the State of    
Indiana, articles of merger, including the plan of merger contained in          
Exhibit A (the 'PLAN OF MERGER'), or other appropriate documents (in any such   
case, the 'ARTICLES OF MERGER') executed in accordance with the relevant        
provisions of the IBCL and shall make all other filings or                      

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recordings required under the IBCL. The Merger shall become effective at such   
time as the Articles of Merger are duly filed with such Secretary of State, or  
at such other time as Sub and the Company shall agree and specify in the        
Articles of Merger (the time the Merger becomes effective being the 'EFFECTIVE  
TIME').                                                                         

SECTION 1.04. Effects. The Merger shall have the effects set forth in   
Section 40-6 of the IBCL.                                                       

SECTION 1.05. Articles of Incorporation and Bylaws. (a) The Articles of 
Incorporation of the Company as in effect immediately prior to Effective Time,  
as amended by the ILFC Amendment, shall be the Articles of Incorporation of the 
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable Law.                                                              

(b) The Bylaws of the Company as in effect immediately prior to the     
Effective Time shall be the Bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable Law.                    

  SECTION 1.06. Directors. The directors of the Company immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, until   
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.                             

    SECTION 1.07. Officers. The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, until the    
earlier of their resignation or removal or until their respective successors are
duly elected or appointed and qualified, as the case may be.                    

ARTICLE II
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES

  SECTION 2.01. Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of    
Company Capital Stock or any shares of capital stock of Sub:                    

      (a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and      
nonassessable share of common stock, without par value, of the Surviving
Corporation.                                                            

      (b) Cancelation of Treasury, JGM-Owned and Sub-Owned Stock. Each share
   of Company Common Stock that is owned by the Company, JGM, Sub or any other
   affiliate of JGM (other than any person who is deemed to be an affiliate of
JGM by reason of such person's position as an officer or director of the
Company (collectively, the 'EXCLUDED AFFILIATES')) shall no longer be   
   outstanding and shall automatically be canceled and retired and shall cease
    to exist, and no consideration shall be delivered or deliverable in exchange
    therefor. Each share of Company Common Stock that is owned by any subsidiary
of the Company shall automatically be converted into one fully paid and 
nonassessable share of common stock, without par value, of the Surviving
Corporation.                                                            

(c) Conversion of Company Capital Stock. (1) Subject to         
Section 2.01(b), each issued share of Company Common Stock shall be     
    converted into the right to receive from the Surviving Corporation $23.00 in
cash, without interest.                                                 

(2) Each issued share of Company Preferred Stock shall remain   
outstanding.                                                            

    (3) The cash payable upon the conversion of shares of Company Common
 Stock pursuant to this Section 2.01(c) is referred to collectively as the
 'MERGER CONSIDERATION'. At the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be  
canceled and retired and shall cease to exist, and each holder of a     
certificate that immediately prior to the Effective Time represented any
  such shares of Company Common Stock (each, a 'CERTIFICATE') shall cease to
have any rights with respect thereto, except the right to receive Merger
Consideration upon surrender of a Certificate in accordance with        
Section 2.02, without interest.                                         

SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to the  
Effective Time, Sub shall designate a bank or trust company to act as paying    
agent (the 'PAYING AGENT') for the payment of the                               

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Merger Consideration upon surrender of Certificates. Promptly following the     
Effective Time, the Surviving Corporation shall provide to the Paying Agent cash
in an amount sufficient to pay for the shares of Company Common Stock converted 
into the right to receive cash pursuant to Section 2.01(c) (such cash being     
hereinafter referred to as the 'EXCHANGE FUND'). All of the fees and expenses of
the Paying Agent shall be borne by the Surviving Corporation.                   

(b) Exchange Procedure. The Surviving Corporation shall cause the Paying
Agent to mail promptly after the Effective Time (but, in any event, within five 
days after the Effective Time) to each holder of record of Certificates, (i) a  
form of letter of transmittal (which shall specify that delivery shall be       
effected, and risk of loss and title to Certificates shall pass, only upon      
delivery of Certificates to the Paying Agent and shall be in such form and have 
such other provisions as the Surviving Corporation may reasonably specify) and  
(ii) instructions for use in effecting the surrender of Certificates in exchange
for Merger Consideration. Upon surrender of a Certificate for cancelation to the
Paying Agent, together with such letter of transmittal, duly completed and      
validly executed, and such other documents as may reasonably be required by the 
Paying Agent, the holder of such Certificate shall be entitled to receive in    
exchange therefor the amount of cash into which the shares of Company Common    
Stock theretofore represented by such Certificate shall have been converted     
pursuant to Section 2.01(c), and the Certificate so surrendered shall forthwith 
be canceled; the Surviving Corporation shall enter into a paying agency         
agreement with the Paying Agent which provides that the Paying Agent shall      
promptly following any such surrender of Certificates (but, in any event, within
three business days after the Paying Agent receives such Certificates) dispatch 
by mail payment of such amount to such holder. In the event of a transfer of    
ownership of Company Common Stock that is not registered in the transfer records
of the Company, payment may be made to a person other than the person in whose  
name the Certificate so surrendered is registered, if such Certificate shall be 
properly endorsed or otherwise be in proper form for transfer and the person    
requesting such payment shall pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of such Certificate 
or establish to the satisfaction of the Surviving Corporation that such tax has 
been paid or is not applicable. Until surrendered as contemplated by this       
Section 2.02, each Certificate shall be deemed at any time after the Effective  
Time to represent only the right to receive upon such surrender the amount of   
cash, without interest, into which the shares of Company Common Stock           
theretofore represented by such Certificate have been converted pursuant to     
Section 2.01(c). No interest shall be paid or shall accrue on the cash payable  
upon surrender of any Certificate.                                              

(c) No Further Ownership Rights in Company Common Stock. The Merger     
Consideration paid upon surrender of a Certificate in accordance with the terms 
of this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock formerly represented by 
such Certificate, and after the Effective Time there shall be no further        
registration of transfers on the stock transfer books of the Surviving          
Corporation of shares of Company Common Stock that were outstanding immediately 
prior to the Effective Time. If, after the Effective Time, any Certificates are 
presented to the Surviving Corporation or the Paying Agent for any reason, they 
shall be canceled and exchanged for the amount of cash into which the shares of 
Company Common Stock theretofore represented by such Certificates shall have    
been converted as provided in this Article II.                                  

(d) No Liability. None of Sub, the Company or the Paying Agent shall be 
liable to any person in respect of any cash from the Exchange Fund that is      
required under applicable Law to be delivered to a public official pursuant to  
any applicable abandoned property, escheat or similar Law.                      

   (e) Investment of Exchange Fund. The Surviving Corporation shall direct the
Paying Agent to invest any cash included in the Exchange Fund, as directed by   
the Surviving Corporation, on a daily basis. Any interest and other income      
resulting from such investments shall be paid to the Surviving Corporation.     

(f) Withholding Rights. The Surviving Corporation shall be entitled to  
deduct and withhold, as required by applicable Law, any applicable taxes from   
the consideration otherwise payable to any holder of Company Common Stock       
pursuant to this Agreement.                                                     

(g) Lost, Stolen or Destroyed Certificates. In the event any Certificate
shall have been lost, stolen or destroyed, the holder of such lost, stolen or   
destroyed Certificate shall execute an affidavit of that fact upon request. The 
holder of any such lost, stolen or destroyed Certificate shall also deliver a   
reasonable                                                                      

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indemnity against any claim that may be made against the Surviving Corporation  
or the Paying Agent with respect to the Certificate alleged to have been lost,  
stolen or destroyed. The affidavit and any indemnity which may be required      
hereunder shall be delivered to the Paying Agent, who shall be responsible for  
making payment for such lost, stolen or destroyed Certificate pursuant to the   
terms hereof.                                                                   

(h) Adjustment to Prevent Dilution. In the event that following the date
hereof and prior to the Effective Time the Company changes the number of shares 
of Company Common Stock or securities convertible or exchangeable into or       
exercisable for shares of Company Common Stock, as the case may be, issued and  
outstanding by way of a reclassification, stock split (including a reverse stock
split), stock dividend or distribution, recapitalization, subdivision or other  
similar transaction, the amount of Merger Consideration payable with respect to 
a share of Company Common Stock shall be adjusted appropriately to provide to   
holders of shares of Company Common Stock the same economic effect contemplated 
by this Agreement prior to such change.                                         

ARTICLE III 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

The Company represents and warrants to Sub as follows:                  

    SECTION 3.01. Organization, Standing and Power. Each of the Company and each
of its subsidiaries (the 'COMPANY SUBSIDIARIES') is duly organized and validly  
existing under the laws of the jurisdiction in which it is organized and has    
full corporate power and authority and possesses all governmental franchises,   
licenses, permits, authorizations and approvals necessary to enable it to own,  
lease or otherwise hold its properties and assets and to conduct its businesses 
as presently conducted, other than such franchises, licenses, permits,          
authorizations and approvals the lack of which, individually or in the          
aggregate, has not had and could not reasonably be expected to have (i) a       
material adverse effect on the business, assets, financial condition or results 
of operations of the Company and the Company Subsidiaries, taken as a whole;    
provided, however, that any such effect resulting from (x) changes in United    
States or global economic or financial market conditions or (y) changes in      
United States generally accepted accounting principles, shall not be considered 
a Company Material Adverse Effect or (ii) a material adverse effect on the      
ability of the Company to perform its obligations under this Agreement,         
including the consummation of Merger and the other Transactions (a 'COMPANY     
MATERIAL ADVERSE EFFECT'). The Company and each Company Subsidiary is duly      
qualified to do business in each jurisdiction where the nature of its business  
or their ownership or leasing of its properties make such qualification         
necessary or the failure so to qualify has had or could reasonably be expected  
to have a Company Material Adverse Effect.                                      

    SECTION 3.02. Capital Structure. The authorized capital stock of the Company
consists of 30,000,000 shares of Company Common Stock, 10,000,000 shares of     
preferred stock, without par value, of which 500 shares have been designated as 
Series A1 Preferred Stock and 300 shares have been designated as Series B       
Preferred Stock. At the close of business on June 14, 2001, (i) 11,438,059      
shares of Company Common Stock (including 2,500 shares of Company Common Stock  
issued as shares of restricted stock under the Company Stock Plans (as defined  
in Section 6.04)), 500 shares of Series A1 Preferred Stock and 300 shares of    
Series B Preferred Stock were issued and outstanding, (ii) 1,710,658 shares of  
Company Common Stock were held by the Company in its treasury and               
(iii) 2,880,251 shares of Company Common Stock were subject to outstanding      
Company Employee Stock Options (as defined in Section 6.04) and 6,950,000 shares
of Company Common Stock were originally reserved for issuance pursuant to the   
Company Stock Plans. Except as set forth above and except for 1,914,486 shares  
of Company Common Stock reserved for issuance upon conversion of the outstanding
shares of Series B Preferred Stock, at the close of business on June 14, 2001,  
no shares of capital stock or other voting securities of the Company were       
issued, reserved for issuance or outstanding. All outstanding shares of Company 
Capital Stock are, and all such shares that may be issued prior to the Effective
Time will be when issued, duly authorized, validly issued, fully paid and       
nonassessable and not subject to or issued in violation of any purchase option, 
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the IBCL, the Articles of Incorporation of 
the Company, as amended to the date of this Agreement (the 'COMPANY CHARTER'),  
the bylaws of the Company, as                                                   

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amended to the date of this Agreement (the 'COMPANY BYLAWS'), or any Contract   
(as defined in Section 3.04) to which the Company is a party or otherwise bound.
There are not any bonds, debentures, notes or other indebtedness of the Company 
having the right to vote (or convertible into, or exchangeable for, securities  
having the right to vote) on any matters on which holders of Company Capital    
Stock may vote ('VOTING COMPANY DEBT'). Except as set forth above and as        
provided in this Agreement, as of the date of this Agreement, there are not any 
options, warrants, rights, convertible or exchangeable securities, 'phantom'    
stock rights, stock appreciation rights, stock-based performance units,         
commitments, Contracts, arrangements or undertakings of any kind to which the   
Company or any Company Subsidiary is a party or by which any of them is bound   
(i) obligating the Company or any Company Subsidiary to issue, deliver or sell, 
or cause to be issued, delivered or sold, additional shares of capital stock or 
other equity interests in, or any security convertible or exercisable for or    
exchangeable into any capital stock of or other equity interest in, the Company 
or of any Company Subsidiary or any Voting Company Debt, (ii) obligating the    
Company or any Company Subsidiary to issue, grant, extend or enter into any such
option, warrant, call, right, security, commitment, Contract, arrangement or    
undertaking or (iii) that give any person the right to receive any economic     
benefit or right similar to or derived from the economic benefits and rights    
accruing to holders of Company Capital Stock. As of the date of this Agreement, 
there are not any outstanding contractual obligations of the Company or any     
Company Subsidiary to repurchase, redeem or otherwise acquire any shares of     
capital stock of the Company or any Company Subsidiary (other than the ILFC     
Agreement and this Agreement).                                                  

SECTION 3.03. Authority; Execution and Delivery; Enforceability. (a) The
Company has all requisite corporate power and authority to execute and deliver  
this Agreement and to consummate the Merger and the other transactions          
contemplated by the Transaction Agreements (the 'TRANSACTIONS'). The execution  
and delivery by the Company of the Transaction Agreements and the consummation  
by the Company of the Transactions have been duly authorized by all necessary   
corporate action on the part of the Company, subject to the approval of the Plan
of Merger, this Agreement, the Merger and the ILFC Amendment by the holders of  
the requisite number of outstanding shares of Company Common Stock and the      
approval of the ILFC Amendment by the holders of a majority of the outstanding  
shares of Series B Preferred Stock. The Company has duly executed and delivered 
each Transaction Agreement, and each Transaction Agreement constitutes its      
legal, valid and binding obligation, enforceable against it in accordance with  
its terms.                                                                      

(b) The Company Board, at a meeting duly called and held, acting on the 
recommendation of a special committee of the Company Board (the 'SPECIAL        
COMMITTEE'), duly and unanimously adopted resolutions (i) approving this        
Agreement, the Merger, the ILFC Agreement, the ILFC Amendment and the other     
Transactions, (ii) determining that the terms of the Merger and the other       
Transactions are fair to and in the best interests of the Company and the       
holders of shares of the Company Common Stock (other than Sub and JGM), (iii)   
recommending that the Company's shareholders approve the Plan of Merger, this   
Agreement, the Merger and the ILFC Amendment and (iv) adopting the Plan of      
Merger. On June 15, 2001, the Company Board unanimously adopted a resolution    
approving the acquisition by Sub of beneficial ownership of 8,271,200 shares of 
Company Common Stock. Such resolutions are sufficient to render inapplicable to 
JGM, Sub, this Agreement, the Merger and the other Transactions the restrictions
on business combinations contained in Section 43-18 of the IBCL. To the         
Company's knowledge, no other state takeover statute or similar statute or      
regulation applies or purports to apply to the Company with respect to this     
Agreement, the Merger or any other Transaction.                                 

 (c) The only class or series of Company Capital Stock that is entitled to
vote to approve the Plan of Merger, this Agreement and the Merger is the Company
Common Stock. The affirmative vote of a majority of the outstanding shares of   
the Company Common Stock and a majority of the outstanding shares of Series B   
Preferred Stock, voting as separate classes, is necessary to approve the ILFC   
Amendment.                                                                      

    SECTION 3.04. No Conflicts; Consents. (a) Except as set forth in the letter,
dated as of the date of this Agreement, from the Company to Sub (the 'COMPANY   
DISCLOSURE LETTER'), the execution and delivery by the Company of each          
Transaction Agreement do not, and the consummation of the Merger and the other  
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or                                                                        

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result in any violation of or default (with or without notice or lapse of time, 
or both) under, or give rise to a right of termination, cancelation or          
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any pledges, liens, charges, mortgages, encumbrances and     
security interests of any kind or nature whatsoever (collectively, 'LIENS') upon
any of the properties or assets of the Company or any Company Subsidiary under, 
any provision of (i) the Company Charter, the Company Bylaws or the comparable  
charter or organizational documents of any Company Subsidiary, (ii) any         
contract, lease, license, indenture, note, bond, agreement, permit, concession, 
franchise or other instrument (a 'CONTRACT') to which the Company or any Company
Subsidiary is a party or by which any of their respective properties or assets  
is bound or (iii) subject to the filings and other matters referred to in       
Section 3.04(b), any judgment, order or decree ('JUDGMENT') or statute, law     
(including common law), ordinance, rule or regulation ('LAW') applicable to the 
Company or any Company Subsidiary or their respective properties or assets,     
other than, in the case of clauses (ii) and (iii) above, any such items that,   
individually or in the aggregate, have not had and could not reasonably be      
expected to have a Company Material Adverse Effect.                             

 (b) No consent, approval, license, permit, order, authorization or waiver
('CONSENT') of, or registration, declaration or filing with, or permit from, any
Federal, state, local or foreign government or any court of competent           
jurisdiction, administrative agency or commission or other governmental         
authority or instrumentality, domestic or foreign (a 'GOVERNMENTAL ENTITY') is  
required to be obtained or made by or with respect to the Company or any Company
Subsidiary in connection with the execution, delivery and performance of any    
Transaction Agreement or the consummation of the Merger and the other           
Transactions, other than (i) the filing with the Securities and Exchange        
Commission (the 'SEC') of a Transaction Statement on Schedule 13E-3 (as amended 
from time to time, the 'SCHEDULE 13E-3'), (B) a proxy statement relating to the 
approval of the Plan of Merger, this Agreement, the Merger and the ILFC         
Amendment by the holders of shares of Company Common Stock (as amended from time
to time, the 'PROXY STATEMENT') and (C) such reports under Sections 13 and 16 of
the Securities Exchange Act of 1934, as amended (the 'EXCHANGE ACT'), as may be 
required in connection with any Transaction Agreement, the Merger and the other 
Transactions, (ii) the filing of the Articles of Merger and the ILFC Amendment  
with the office of the Secretary of State of the State of Indiana and           
appropriate documents with the relevant authorities of the other jurisdictions  
in which the Company is qualified to do business, (iii) any filings required    
under the rules and regulations of the Department of Transportation (the 'DOT'),
(iv) compliance with and such filings as may be required under applicable       
environmental Laws, (v) such filings as may be required in connection with the  
taxes described in Section 6.08, (vi) filings under any applicable state        
takeover Law and (vii) such other items that, individually or in the aggregate, 
have not had and could not reasonably be expected to have a Company Material    
Adverse Effect.                                                                 

   SECTION 3.05. SEC Documents; Undisclosed Liabilities. The Company has filed
all reports, schedules, forms, statements and other documents required to be    
filed by the Company with the SEC since January 1, 1999 (the 'COMPANY SEC       
DOCUMENTS'). As of its respective date, each Company SEC Document complied as to
form in all material respects with the requirements of the Exchange Act or the  
Securities Act of 1933, as amended (the 'SECURITIES ACT'), as the case may be,  
and the rules and regulations of the SEC promulgated thereunder applicable to   
such Company SEC Document, and did not contain any untrue statement of a        
material fact or omit to state a material fact required to be stated therein or 
necessary in order to make the statements therein, in the light of the          
circumstances under which they were made, not misleading. The consolidated      
financial statements of the Company included in the Company SEC Documents comply
as to form in all material respects with applicable accounting requirements and 
the published rules and regulations of the SEC with respect thereto, have been  
prepared in accordance with generally accepted accounting principles ('GAAP')   
(except, in the case of unaudited statements, as permitted by Form 10-Q of the  
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial   
position of the Company and its consolidated subsidiaries as of the dates       
thereof and the consolidated results of their operations and cash flows for the 
periods then ended (subject, in the case of unaudited statements, to normal     
year-end audit adjustments). Except as set forth in the Company SEC Documents   
filed and publicly available prior to the date hereof (the 'FILED COMPANY SEC   
DOCUMENTS'), neither the Company nor any Company Subsidiary has any liabilities 
or obligations of                                                               

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any nature (whether accrued, absolute, contingent or otherwise) required by GAAP
to be set forth on a consolidated balance sheet of the Company and its          
consolidated subsidiaries or in the notes thereto and that, individually or in  
the aggregate, could reasonably be expected to have a Company Material Adverse  
Effect.                                                                         

   SECTION 3.06. Brokers; Schedule of Fees and Expenses. No broker, investment
banker, financial advisor or other person, other than Dresdner Kleinwort        
Wasserstein, Inc., the fees of which will be paid by the Company, is entitled,  
prior to the Effective Time, to any broker's, finder's, financial advisor's or  
other similar fee or commission in connection with the Merger and the other     
Transactions based upon arrangements made by or on behalf of the Company. At the
Effective Time, Salomon Smith Barney Inc. will become entitled to receive fees  
and expense reimbursement in connection with the Merger in consideration of its 
activities on behalf of JGM and Sub. The Company has furnished to Sub a true and
complete copy of all agreements between the Company and Dresdner Kleinwort      
Wasserstein, Inc., relating to the Merger and the other Transactions.           

SECTION 3.07. Opinion of Financial Advisor. The Special Committee has   
received the opinion of Dresdner Kleinwort Wasserstein, Inc., dated the date of 
this Agreement, to the effect that, as of such date, the consideration to be    
received in the Merger by the holders of Company Common Stock (other than Sub   
and JGM) is fair from a financial point of view, a signed copy of which opinion 
has been delivered to Sub.                                                      

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUB 

Sub represents and warrants to the Company as follows:                  

 SECTION 4.01. Organization, Standing and Power. Sub is duly organized and
validly existing under the laws of the jurisdiction in which it is organized and
has full corporate power and authority to conduct its businesses as presently   
conducted.                                                                      

SECTION 4.02. Sub. (a) Since the date of its incorporation, Sub has not 
carried on any business or conducted any operations other than the execution of 
this Agreement, the performance of its obligations hereunder and matters        
ancillary thereto.                                                              

(b) The authorized capital stock of Sub consists of 30,000,000 shares of
common stock, without par value ('SUB COMMON STOCK'). JGM, pursuant to a        
Subscription Agreement dated the date hereof, subscribed for 100 shares of Sub  
Common Stock. On the date hereof, JGM and Sub entered into an additional        
Subscription Agreement dated the date hereof, pursuant to which JGM will        
contribute his 8,271,200 shares of Company Common Stock to Sub in exchange for  
8,271,200 shares of Sub Common Stock upon the satisfaction of the condition set 
forth in Section 7.01(a).                                                       

    SECTION 4.03. Authority; Execution and Delivery; Enforceability. Sub has all
requisite corporate power and authority to execute and deliver each Transaction 
Agreement to which it is a party and to consummate the Merger and the other     
Transactions. The execution and delivery by Sub of each Transaction Agreement to
which it is a party and the consummation by it of the Transactions to which it  
is a party have been duly authorized by all necessary corporate action on the   
part of Sub. JGM, as the sole shareholder of Sub, has approved the Plan of      
Merger and the Merger. Sub has duly executed and delivered each Transaction     
Agreement to which it is a party, and each such Transaction Agreement           
constitutes a legal, valid and binding obligation, enforceable against it in    
accordance with its terms.                                                      

   SECTION 4.04. No Conflicts; Consents. (a) The execution and delivery by Sub
of each Transaction Agreement to which it is a party do not, and consummation of
the Merger and the other Transactions to which it is a party and compliance with
the terms hereof and thereof will not, conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or give 
rise to a right of termination, cancelation or acceleration of any obligation or
to loss of a material benefit under, or result in the creation of any Liens upon
any of the properties or assets of Sub under, any provision of (i) its articles 
of incorporation or bylaws, (ii) any Contract to which Sub is a party or by     
which any of its properties or assets is bound or (iii) subject to the filings  
and other matters referred to in Section 4.04(b), any Judgment or Law applicable
to Sub or its properties or assets, other than, in the                          

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case of clauses (ii) and (iii) above, any such items that, individually or in   
the aggregate, have not had and could not reasonably be expected to have (i) a  
material adverse effect on the business, assets, financial condition or results 
of operations of Sub or (ii) a material adverse effect on the ability of Sub to 
perform its obligations under this Agreement, including the consummation of the 
Merger and the other Transactions to which it is a party (a 'SUB MATERIAL       
ADVERSE EFFECT').                                                               

(b) No Consent of, or registration, declaration or filing with, any     
Governmental Entity is required to be obtained or made by or with respect to JGM
or Sub in connection with the execution, delivery and performance of any        
Transaction Agreement to which it is a party or the consummation of the         
Transactions, other than (i) the filing with the SEC of (A) the Schedule 13E-3  
and (B) such reports under Sections 13 and 16 of the Exchange Act, as may be    
required in connection with this Agreement, the Merger and the other            
Transactions, (ii) the filing of the Articles of Merger with the office of the  
Secretary of State of the State of Indiana, (iii) any filings required under the
rules and regulations of the DOT, (iv) compliance with and such filings as may  
be required under applicable environmental Laws, (v) such filings as may be     
required in connection with the taxes described in Section 6.08 and             
(vi) filings under any applicable state takeover Law.                           

  SECTION 4.05. Brokers. Other than as set forth in Section 3.06, no broker,
investment banker, financial advisor or other person is entitled to any         
broker's, finder's, financial advisor's or other similar fee or commission in   
connection with the Merger and the other Transactions based upon arrangements   
made by or on behalf of Sub.                                                    

 SECTION 4.06. Financing. American Trans Air, Inc., an Indiana corporation
('ATA'), has received a commitment letter dated June 18, 2001 (the 'COMMITMENT  
LETTER'), from Salomon Smith Barney Inc. and Citicorp USA, Inc. (the 'LENDERS') 
relating to the commitment of the Lenders to provide the financing required to  
consummate the Merger and the other Transactions and to pay related fees and    
expenses. The financing required to consummate the Merger and the other         
Transactions and to pay related fees and expenses is collectively referred to in
this Agreement as the 'FINANCING'. A complete and correct copy of the Commitment
Letter has been provided to the Special Committee. As of the date of this       
Agreement, Sub has no reason to believe that (i) any of the conditions to the   
financing contemplated by the Commitment Letter will not be satisfied, (ii) the 
funds for the financing contemplated by the Commitment Letter will not be       
available on a timely basis for the Merger and the other Transactions or (iii)  
the financing contemplated by the Commitment Letter will not be sufficient to   
consummate the Merger and the other Transactions and to pay related fees and    
expenses.                                                                       

ARTICLE V 
COVENANTS RELATING TO CONDUCT OF BUSINESS 

  SECTION 5.01. Conduct of Business. (a) Conduct of Business by the Company.
Except for matters set forth in the Company Disclosure Letter or otherwise      
expressly permitted by this Agreement or the ILFC Agreement, from the date of   
this Agreement to the Effective Time the Company shall, and shall cause each    
Company Subsidiary to, conduct its business in the usual, regular and ordinary  
course in substantially the same manner as previously conducted or proposed to  
be conducted and use all reasonable efforts to preserve intact its current      
business organization, keep available the services of its current officers and  
employees and keep its relationships with customers, suppliers, licensors,      
licensees, distributors and others having business dealings with them to the end
that its goodwill and ongoing business shall be unimpaired at the Effective     
Time. In addition, and without limiting the generality of the foregoing, except 
for matters set forth in the Company Disclosure Letter or otherwise expressly   
permitted or contemplated by this Agreement or the ILFC Agreement, from the date
of this Agreement to the Effective Time, the Company shall not, and shall not   
permit any Company Subsidiary to, do any of the following without the prior     
written consent of Sub and the Special Committee:                               

     (i) (A) declare, set aside or pay any dividends on, or make any other
   distributions in respect of, any of its capital stock, other than dividends
and distributions by a direct or indirect wholly owned subsidiary of the
Company to its parent and regular dividends on the shares of Series A1  
Preferred Stock and Series B Preferred Stock, (B) split, combine or     
 reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in                    

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substitution for shares of its capital stock, or (C) purchase, redeem or
   otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary or any other securities thereof or any rights, warrants or   
options to acquire any such shares or other securities;                 

       (ii) issue, deliver, sell or grant (A) any shares of its capital stock,
  (B) any Voting Company Debt or other voting securities, (C) any securities
   convertible into or exchangeable for, or any options, warrants or rights to
acquire, any such shares, Voting Company Debt, voting securities or     
    convertible or exchangeable securities or (D) any 'phantom' stock, 'phantom'
 stock rights, stock appreciation rights or stock-based performance units,
other than (1) the issuance of Company Common Stock upon the exercise of
    Company Employee Stock Options outstanding on the date of this Agreement and
in accordance with their present terms and (2) the issuance of up to an 
 additional 100,000 Company Employee Stock Options pursuant to the Company
Stock Plans in accordance with their present terms and the issuance of  
Company Common Stock upon the exercise of such Company Employee Stock   
Options;                                                                

     (iii) amend its articles of incorporation, bylaws or other comparable
charter or organizational documents; or                                 

       (iv) authorize any of, or commit or agree to take any of, the foregoing
actions.                                                                

(b) Other Actions. Neither the Company (without the direction of Special
Committee) nor Sub shall, or shall permit any of their respective subsidiaries  
to, take any action that would, or that could reasonably be expected to, result 
in (i) any of the representations and warranties of such party set forth in this
Agreement that is qualified as to materiality becoming untrue, (ii) any of such 
representations and warranties that is not so qualified becoming untrue in any  
material respect or (iii) any condition to the Merger set forth in Article VII, 
not being satisfied. Sub shall not take any action that could reasonably be     
expected to result in any condition to the financing contemplated by the        
Commitment Letter not being satisfied. Sub shall promptly notify the Company if 
at any time there is a reasonable likelihood that the financing contemplated by 
the Commitment Letter will not be available.                                    

ARTICLE VI
ADDITIONAL AGREEMENTS 

    SECTION 6.01. Preparation of Proxy Statement; Shareholders Meeting. (a) Each
of the Company, Sub and JGM shall as soon as practicable following the date     
hereof prepare and file with the SEC the Schedule 13E-3 and the Company shall as
soon as practicable following the date hereof prepare and file with the SEC the 
Proxy Statement in preliminary form, and each of the Company and Sub shall use  
its reasonable efforts to respond as promptly as practicable to any comments of 
the SEC with respect thereto. Each of the Company, Sub and JGM shall notify the 
others promptly of the receipt of any comments from the SEC or its staff and of 
any request by the SEC or its staff for amendments or supplements to the        
Schedule 13E-3 and the Proxy Statement or for additional information and shall  
supply the others with copies of all correspondence between it or him, as the   
case may be, or any of its or his, as the case may be, representatives, on the  
one hand, and the SEC or its staff, on the other hand, with respect to the      
Schedule 13E-3 and the Proxy Statement, as applicable. If at any time prior to  
receipt of the Company Shareholder Approval there shall occur any event that    
should be set forth in an amendment or supplement to the Proxy Statement, the   
Company shall promptly prepare and mail to its shareholders such an amendment or
supplement. The Company shall not mail any Proxy Statement, or any amendment or 
supplement thereto, to which Sub reasonably objects. The Company shall use its  
reasonable best efforts to cause the Proxy Statement to be mailed to the        
Company's shareholders as promptly as practicable after filing with the SEC.    

    (b) The Company shall as soon as practicable following the date hereof, duly
call, give notice of, convene and hold a meeting of its shareholders (the       
'COMPANY SHAREHOLDERS MEETING') for the purpose of seeking the approval by the  
holders of Company Common Stock of the Plan of Merger, this Agreement, the      
Merger and the ILFC Amendment. For the avoidance of doubt, (i) the Company may  
satisfy its obligations under this Section 6.01(b) by presenting the Plan of    
Merger, this Agreement, the Merger and the ILFC Amendment to the requisite      
holders of shares of Company Capital Stock at an annual meeting which was       
previously adjourned and (ii) the Company may present such matters as a         

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single proposal or as proposals which are conditioned on each other. The Proxy  
Statement shall include a description of the recommendations referred to in     
Section 3.03(b), and neither the Company Board nor any committee thereof shall  
withdraw or modify, or propose to withdraw or modify such recommendations or    
related approval; provided, however, that the Company Board or the Special      
Committee may determine not to make such recommendations or to withdraw or      
modify such recommendations if the Special Committee determines in good faith,  
after consulting with and based on the advice of outside legal counsel, that    
such recommendations would be inconsistent with its fiduciary duties to the     
holders of shares of Company Common Stock (other than Sub and JGM) under        
applicable law. Without limiting the generality of the foregoing, the Company   
agrees that its obligations pursuant to the first sentence of this Section      
6.01(b) shall not be affected by the withdrawal or modification by either the   
Company Board or the Special Committee of its approval or recommendation of the 
Plan of Merger, this Agreement, the Merger or the ILFC Amendment.               

  (c) Sub shall cause all shares of Company Common Stock owned by it and all
of its affiliates (other than the Company, the Company Subsidiaries and the     
Excluded Affiliates) to be voted in favor of the approval of the Plan of Merger,
this Agreement, the Merger and the ILFC Amendment.                              

    SECTION 6.02. Access to Information; Confidentiality. The Company shall, and
shall cause each of its subsidiaries to, afford to Sub, and to Sub's officers,  
employees, accountants, counsel, financial advisors and other representatives,  
reasonable access during normal business hours during the period prior to the   
Effective Time to all their respective properties, books, contracts,            
commitments, personnel and records and, during such period, the Company shall,  
and shall cause each of its subsidiaries to, furnish promptly to Sub (a) a copy 
of each report, schedule, registration statement and other document filed by it 
during such period pursuant to the requirements of Federal or state securities  
laws and (b) all other information concerning its business, properties and      
personnel as Sub may reasonably request.                                        

   SECTION 6.03. Reasonable Best Efforts; Notification. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties shall
use its reasonable best efforts to take, or cause to be taken, all actions, and 
to do, or cause to be done, and to assist and cooperate with the other parties  
in doing, all things necessary, proper or advisable to consummate and make      
effective, in the most expeditious manner practicable, the Merger and the other 
Transactions, including (i) the obtaining of all necessary actions or           
nonactions, waivers, consents and approvals from Governmental Entities and the  
making of all necessary registrations and filings (including filings with       
Governmental Entities, if any) and the taking of all reasonable steps as may be 
necessary to obtain an approval or waiver from, or to avoid an action or        
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary     
consents, approvals or waivers from third parties, (iii) the defending of any   
lawsuits or other legal proceedings, whether judicial or administrative,        
challenging this Agreement, the Merger or the consummation of the Transactions, 
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed, (iv) the execution and  
delivery of any additional instruments necessary to consummate the Transactions 
and to fully carry out the purposes of each Transaction Agreement and (v) to    
arrange for the financing contemplated by the Commitment Letter to be provided  
on substantially the terms and conditions specified in the Commitment Letter. In
connection with and without limiting the foregoing, the Company and the Company 
Board shall (i) take all action necessary to ensure that no state takeover      
statute or similar statute or regulation is or becomes applicable to the Merger 
or any other Transaction or any Transaction Agreement, (ii) if any state        
takeover statute or similar statute or regulation becomes applicable to any     
Transaction Agreement, take all action necessary to ensure that the Merger and  
the other Transactions may be consummated as promptly as practicable on the     
terms contemplated by each Transaction Agreement and otherwise to minimize the  
effect of such statute or regulation on the Merger and the other Transactions   
and (iii) cooperate with the arrangements for obtaining the Financing. Nothing  
in this Agreement shall be deemed to require any party to waive any substantial 
rights or agree to any substantial limitation on its operations or to dispose of
any significant asset or collection of assets.                                  

  (b) The Company shall give prompt notice to Sub, and Sub shall give prompt
notice to the Company, of (i) any representation or warranty made by it         
contained in any Transaction Agreement to which it is a party that is qualified 
as to materiality becoming untrue or inaccurate in any respect or any such      
representation or warranty that is not so qualified becoming untrue or          
inaccurate in any material                                                      

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respect or (ii) the failure by it to comply with or satisfy in any material     
respect any covenant, condition or agreement to be complied with or satisfied by
it under any Transaction Agreement; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the    
parties or the conditions to the obligations of the parties under each          
Transaction Agreement.                                                          

  SECTION 6.04. Stock Options. (a) As soon as practicable following the date
of this Agreement, the Company Board (or, if appropriate, any committee thereof 
with responsibility for the administration of the Company Stock Plans) shall    
adopt such resolutions or take such other actions as are required (with respect 
to the adjustment of the terms of all outstanding Company Employee Stock Options
heretofore granted under any Company Stock Plan) to provide that each Company   
Employee Stock Option, other than Company Employee Stock options held by the    
persons listed on Schedule 6.04(a) of the Company Disclosure Letter (the        
'ROLLOVER INDIVIDUALS'), whether vested or unvested, outstanding at the         
Effective Time shall be converted into the right to receive from the Surviving  
Corporation an amount equal to (i) the excess, if any, of (x) the Merger        
Consideration over (y) the exercise price per share of Company Common Stock     
subject to such Company Employee Stock Option, multiplied by (ii) the number of 
shares of Company Common Stock for which such Company Employee Stock Option     
shall not theretofore have been exercised.                                      

    (b) As soon as practicable following the date of this Agreement, the Company
Board (or, if appropriate, any committee thereof with responsibility for the    
administration of the Company Stock Plans) shall adopt such resolutions or take 
such other actions as are required (with respect to the adjustment of the terms 
of all outstanding Company Restricted Shares heretofore granted under any       
Company Stock Plan) to provide that the Restriction Period with respect to each 
Company Restricted Share, whether vested or unvested, shall be deemed to expire 
immediately prior to the Effective Time, unless any such Restriction Period     
would otherwise expire sooner in accordance with the terms of the applicable    
Company Stock Plan, in which case, such Restriction Period shall expire in      
accordance with the terms of the applicable Company Stock Plan.                 

 (c) All amounts payable pursuant to this Section 6.04 shall be subject to
any required withholding of taxes required by applicable Law and shall be paid  
without interest. The Company shall use its reasonable best efforts to obtain   
the consent of all holders of Company Employee Stock Options as shall be        
necessary to effectuate the foregoing. Notwithstanding anything to the contrary 
contained in this Agreement, payment as to a particular holder shall, at Sub's  
request, be withheld in respect of any Company Employee Stock Option until all  
necessary consents are obtained from such holder.                               

 (d) The Company Stock Plans shall terminate as of the Effective Time, and
the provisions in any other benefit plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest in respect of any     
capital stock of the Company shall be deleted as of the Effective Time, and the 
Company shall ensure that following the Effective Time, except for the Rollover 
Individuals, no holder of a Company Employee Stock Option or any participant in 
any Company Stock Plan shall have any right thereunder to acquire any capital   
stock of the Company or the Surviving Corporation.                              

 (e) The Company shall enter into option modification agreements as of the
Effective Time with each of the Rollover Individuals in the form attached hereto
as Exhibit B. As soon as practicable after the date of this Agreement, the      
Company Board (or, if appropriate, a committee thereof with responsibility for  
the administration of the Company Stock Plans) shall adopt resolutions or take  
such other actions as are necessary in connection with such option modification 
agreements.                                                                     

   (f) The Company shall ensure that (i) as of the date of this Agreement, all
payroll deductions under the Company's Employee Stock Purchase Plan (the 'ESPP')
shall cease; and (ii) all payroll deductions under the ESPP which related to any
offering periods which have not terminated prior to the date of this Agreement  
shall be returned to the employees who made such deductions, without interest or
other benefit, as soon as practicable after the date of this Agreement.         

(g) In this Agreement:                                                  

    'COMPANY EMPLOYEE STOCK OPTION' means any option to purchase Company
Common Stock granted under any Company Stock Plan.                      

       'COMPANY RESTRICTED SHARE' means any share of restricted Company Common
Stock granted under any Company Stock Plan.                             

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 'COMPANY STOCK PLANS' means the 1993 Incentive Stock Plan for Key
    Employees of the Company and its Subsidiaries, the 1996 Incentive Stock Plan
 for Key Employees of the Company and its Subsidiaries, the 2000 Incentive
   Stock Plan for Key Employees of the Company and its Subsidiaries, the Stock
Option Plan for Non-Employee Directors and the ESPP.                    

      'RESTRICTION PERIOD' means the period during which restrictions are in
effect under the applicable Company Stock Plan with respect to a Company
Restricted Share.                                                       

  SECTION 6.05. Indemnification. (a) The Surviving Corporation shall, to the
fullest extent permitted by Law, honor all the Company's obligations to         
indemnify (including any obligations to advance funds for expenses) the current 
or former directors or officers of the Company for acts or omissions by such    
directors and officers occurring prior to the Effective Time to the extent that 
such obligations of the Company exist on the date of this Agreement, whether    
pursuant to the Company Charter, the Company Bylaws, individual indemnity       
agreements or otherwise, and such obligations shall survive the Merger and shall
continue in full force and effect in accordance with the terms of the Company   
Charter, the Company Bylaws and such individual indemnity agreements from the   
Effective Time until the expiration of the applicable statute of limitations    
with respect to any claims against such directors or officers arising out of    
such acts or omissions.                                                         

(b) For a period of six years after the Effective Time, the Surviving   
Corporation shall maintain in effect the current policies of directors' and     
officers' liability insurance maintained by the Company (provided that the      
Surviving Corporation may substitute therefor policies with reputable and       
financially sound carriers of at least the same coverage and amounts containing 
terms and conditions which are no less advantageous) with respect to claims     
arising from or related to facts or events which occurred at or before the      
Effective Time; provided, however, that the Surviving Corporation shall not be  
obligated to make annual premium payments for such insurance to the extent such 
premiums exceed 150% of the annual premiums paid as of the date hereof by the   
Company for such insurance (such 150% amount, the 'MAXIMUM PREMIUM'). If such   
insurance coverage cannot be obtained at all, or can only be obtained at an     
annual premium in excess of the Maximum Premium, the Surviving Corporation shall
maintain the most advantageous policies of directors' and officers' insurance   
obtainable for an annual premium equal to the Maximum Premium.                  

SECTION 6.06. Fees and Expenses. All fees and expenses incurred in      
connection with the Merger and the other Transactions shall be paid by the      
Company other than any such fees or expenses incurred as a result of a material 
breach of this Agreement by Sub.                                                

  SECTION 6.07. Public Announcements. Sub and the Company shall consult with
each other before issuing, and provide each other the opportunity to review and 
comment upon, any press release or other public statements with respect to the  
Merger and the other Transactions and shall not issue any such press release or 
make any such public statement prior to such consultation, except as may be     
required by applicable Law, court process or by obligations pursuant to any     
listing agreement with any national securities exchange.                        

SECTION 6.08. Transfer Taxes. All stock transfer, real estate transfer, 
documentary, stamp, recording and other similar taxes (including interest,      
penalties and additions to any such taxes) ('TRANSFER TAXES') incurred in       
connection with the Transactions shall be paid by the Surviving Corporation, and
the Company shall cooperate with Sub in preparing, executing and filing any tax 
returns with respect to such Transfer Taxes.                                    

SECTION 6.09. Shareholder Litigation. The Company shall give Sub the    
opportunity to participate in the defense or settlement of any shareholder      
litigation against the Company and its directors relating to any Transaction;   
provided, however, that no such settlement shall be agreed to without Sub'      
consent, which consent shall not unreasonably be withheld.                      

  SECTION 6.10. Information Supplied. The Company, the Special Committee and
Sub will cause each of (i) the Proxy Statement and any amendment or supplement  
thereto and (ii) the Schedule 13E-3 and any amendment or supplement thereto,    
when filed, to comply as to form in all material respects with the applicable   
requirements of the Exchange Act. Each of the Company, the Special Committee and
Sub agrees that none of the information supplied by it for inclusion in the     
Proxy Statement or any amendment or supplement thereto or in the Schedule 13E-3 
or any amendment or supplement thereto                                          

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will, at the time the Proxy Statement or any amendment or supplement thereto is 
first mailed to Company's shareholders and at the time of the Company           
Shareholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein, 
in the light of the circumstances under which they were made, not misleading. If
at any time prior to the date of the Company Shareholders Meeting any           
information relating to the Company, the Special Committee or Sub or their      
respective officers or directors is discovered by the Company, the Special      
Committee or Sub which should be set forth in an amendment or supplement to the 
Proxy Statement or the Schedule 13E-3, as the case may be, so that such document
would not contain any untrue statement of a material fact or omit to state any  
material fact necessary in order to make the statements made therein, in the    
light of the circumstances under which they were made, not misleading, the party
discovering such information shall promptly notify each other party and, to the 
extent required by applicable Law, an appropriate amendment or supplement       
describing such information shall be filed promptly with the SEC and, to the    
extent required by applicable Law, disseminated to the Company's shareholders.  

ARTICLE VII 
CONDITIONS PRECEDENT

 SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the  
satisfaction or waiver on or prior to the Closing Date of the following         
conditions:                                                                     

      (a) Company Shareholder Approval. A majority of the outstanding shares
    of Company Common Stock shall have voted to approve the Plan of Merger, this
    Agreement, the Merger and the ILFC Amendment and a majority of the shares of
 Company Common Stock voted at the Company Shareholder Meeting (other than
shares owned by JGM, Sub or any other affiliate of JGM (other than the  
   Excluded Affiliates)) shall have been voted in favor of the approval of the
   Plan of Merger, this Agreement and the Merger. Holders of a majority of the
   outstanding shares of Series B Preferred Stock shall have voted in favor of
the approval of the ILFC Amendment.                                     

 (b) No Injunctions or Restraints. No temporary restraining order,
 preliminary or permanent injunction or other order issued by any court of
 competent jurisdiction or other legal restraint or prohibition preventing
  the consummation of the Merger shall be in effect; provided, however, that
 prior to asserting this condition each of the parties shall have used all
    reasonable best efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as possible any such injunction or other
order that may be entered.                                              

    (c) No Governmental Litigation. There shall not be pending any suit,
action or proceeding by any Governmental Entity, in each case that has a
    substantial likelihood of success, (i) challenging the acquisition by Sub or
JGM of any Company Common Stock, seeking to restrain or prohibit the    
consummation of the Merger or any other Transaction or seeking to obtain
 from the Company, Sub or JGM any damages that are material in relation to
   the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit
or limit the ownership or operation by the Company or any Company       
Subsidiaries of any material portion of the business or assets of the   
  Company or to compel the Company or any Company Subsidiaries to dispose of
or hold separate any material portion of the business or assets of the  
    Company as a result of the Merger or any other Transaction, (iii) seeking to
    impose material limitations on the ability of Sub or JGM to acquire or hold,
    or exercise full rights of ownership of, any shares of Company Common Stock,
   including the right to vote the Company Common Stock purchased by it on all
matters properly presented to the shareholders of the Company or        
 (iv) seeking to prohibit JGM from effectively controlling in any material
respect the business or operations of the Company and the Company       
Subsidiaries.                                                           

 SECTION 7.02. Conditions to Obligations of Sub. The obligations of Sub to
effect the Merger are further subject to the following conditions:              

      (a) Representations and Warranties. The representations and warranties
   of the Company in this Agreement that are qualified as to materiality shall
   be true and correct and those not so qualified shall be true and correct in
all material respects, as of the date of this Agreement and as of the   

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  Closing Date as though made on the Closing Date, except to the extent such
    representations and warranties expressly relate to an earlier date (in which
  case such representations and warranties qualified as to materiality shall
    be true and correct, and those not so qualified shall be true and correct in
all material respects, on and as of such earlier date). Sub shall have  
   received a certificate signed on behalf of the Company by a duly authorized
officer of the Company to such effect.                                  

     (b) Performance of Obligations of the Company. The Company shall have
   performed in all material respects all obligations required to be performed
 by it under this Agreement at or prior to the Closing Date, and Sub shall
have received a certificate signed on behalf of the Company by a duly   
authorized officer of the Company to such effect.                       

        (c) ILFC Agreement. The ILFC Agreement shall be in full force and effect
and ILFC shall have performed in all material respects all obligations  
required to be performed by it under the ILFC Agreement prior to the    
Effective Time.                                                         

     (d) Material Adverse Effect. There shall have been no event since the
date of this Agreement which has had a Company Material Adverse Effect; 
excluding, however, any such event which is the direct result of (i) any
    action or negligent or willful failure to take an action on the part of Sub,
(ii) any action or negligent or willful failure to take an action on the
  part of the Company which is contrary to, or materially inconsistent with,
  the recommendation or direction, as case may be, of the Special Committee,
  (iii) any action with respect to which the recommendation or direction, as
the case may be, of the Special Committee is required hereunder which is
  taken by the Company without such recommendation or direction, as the case
  may be, or (iv) any action or failure to take an action on the part of the
  Company taken at the direction of JGM or any of his affiliates (other than
the Company Subsidiaries and the Excluded Affiliates).                  

        (e) Financing. The financing contemplated by the Commitment Letter shall
 have been provided on substantially the terms and conditions specified in
the Commitment Letter or on such other terms and conditions or involving
such other financing sources, as are acceptable to ATA and are not      
   materially more onerous in the aggregate to ATA than those specified in the
 Commitment Letter; provided, however, that this condition shall be deemed
  satisfied if the failure of this condition is due to any action or failure
  to take an action on the part of the Company or ATA taken at the direction
   of JGM or any of his affiliates (other than the Company Subsidiaries (other
than ATA) and the Excluded Affiliates).                                 

 SECTION 7.03. Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger is further subject to the following conditions:

      (a) Representations and Warranties. The representations and warranties
   of Sub in this Agreement that are qualified as to materiality shall be true
and correct and those not so qualified shall be true and correct in all 
 material respects, as of the date of this Agreement and as of the Closing
Date as though made on the Closing Date, except to the extent such      
    representations and warranties expressly relate to an earlier date (in which
  case such representations and warranties qualified as to materiality shall
    be true and correct, and those not so qualified shall be true and correct in
 all material respects, on and as of such earlier date). The Company shall
   have received a certificate signed on behalf of Sub by the President of Sub
to such effect.                                                         

      (b) Performance of Obligations of Sub. Sub shall have performed in all
   material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and the Company shall have   
  received a certificate signed on behalf of the Company by the President of
Sub to such effect.                                                     

    (c) Solvency Letter. If ATA is required pursuant to the Financing to
  engage an appraiser (the 'APPRAISER') to deliver to the Lenders a solvency
  letter or certificate (the 'SOLVENCY LETTER'), ATA shall have delivered or
caused the Appraiser to deliver a copy of the Solvency Letter to the    
Company's Board of Directors.                                           

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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER 

SECTION 8.01. Termination. This Agreement may be terminated at any time 
prior to the Effective Time, whether before or after satisfaction of the        
condition set forth in Section 7.01(a):                                         

       (a) by mutual written consent of Sub and the Company Board on behalf of
the Company (as agreed to by the Special Committee);                    

        (b) by either Sub or the Company (acting at the direction of the Special
Committee):                                                             

        (i) if the Merger is not consummated on or before October 31, 2001
      (the 'OUTSIDE DATE'), unless the failure to consummate the Merger is the
    result of a breach of this Agreement by the party seeking to terminate
      this Agreement (it being understood that any breach of this Agreement by
the Company without the consent of the Special Committee shall not
     constitute a breach for purposes of this Section 8.01(b)(i)); provided,
   however, that the passage of such period shall be tolled for any part
  thereof during which any party shall be subject to a nonfinal order,
      decree, ruling or action restraining, enjoining or otherwise prohibiting
the consummation of the Merger; or                                

          (ii) if any Governmental Entity issues an order, decree or ruling or
    takes any other action permanently enjoining, restraining or otherwise
   prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable.                        

       (c) by Sub, if the Company breaches or fails to perform in any material
respect any of its representations, warranties or covenants contained in
 this Agreement, which breach or failure to perform (i) would give rise to
the failure of a condition set forth in Section 7.02(a) or 7.02(b), and 
(ii) cannot be or has not been cured within 30 days after the giving of 
   written notice to the Company of such breach (provided that Sub is not then
   in material breach of any representation, warranty or covenant contained in
  this Agreement); excluding, however, any such breach or failure to perform
by the Company that involves a matter for which the consent or          
recommendation, as the case may be, of the Special Committee is required
   hereunder for which (i) such breach or failure to perform by the Company is
contrary to, or materially inconsistent with, the recommendation or     
direction, as the case may be, of the Special Committee or (ii) such    
recommendation or direction, as the case may be, has not been obtained. 

      (d) by the Company (acting at the direction of the Special Committee),
if Sub breaches or fails to perform in any material respect any of its  
   representations, warranties or covenants contained in this Agreement, which
breach or failure to perform (i) would give rise to the failure of a    
    condition set forth in Section 7.03(a) or 7.03(b), and (ii) cannot be or has
  not been cured within 30 days after the giving of written notice to Sub of
    such breach (provided that the Company is not then in material breach of any
representation, warranty or covenant contained in this Agreement).      

      (e) by Sub, if the Company Board or the Special Committee withdraws or
    modifies, or publicly proposes to withdraw or modify, in a manner adverse to
 Sub its approval or recommendation of the Plan of Merger, this Agreement,
the Merger or the ILFC Amendment or fails to recommend to the Company's 
  shareholders that they vote to approve the Plan of Merger, this Agreement,
the Merger and the ILFC Amendment.                                      

        (f) by either Sub or the Company (acting at the direction of the Special
Committee), if at the Company Shareholders Meeting a majority of the    
   outstanding shares of Company Common Stock shall not have voted in favor of
   the Plan of Merger, this Agreement, the Merger and the ILFC Amendment and a
majority of the shares of Company Common Stock voted at the Company     
Shareholder Meeting (other than shares owned by JGM, Sub or any other   
   affiliate of JGM (other than the Excluded Affiliates)) shall not have voted
  in favor of approval of the Plan of Merger, this Agreement and the Merger.

SECTION 8.02. Effect of Termination. In the event of termination of this
Agreement by either the Company or Sub as provided in Section 8.01, this        
Agreement shall forthwith become void and have no effect, without any liability 
or obligation on the part of Sub or the Company, other than Section 3.06,       
Section 4.05, Section 6.07, this Section 8.02 and Article IX, which provisions  
shall survive such                                                              

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termination, and except to the extent that such termination results from the    
material breach by a party of any representation, warranty or covenant set forth
in this Agreement.                                                              

    SECTION 8.03. Amendment. This Agreement may be amended by the parties at any
time before or after receipt of the approval of the Company's shareholders at   
the Company Shareholder Meeting; provided, however, that any amendment pursuant 
to this Section 8.03 shall require the approval of the Special Committee;       
provided further, however, that after receipt of such approval, there shall be  
made no amendment that by Law requires further approval by the shareholders of  
the Company without the further approval of such shareholders. This Agreement   
may not be amended except by an instrument in writing signed on behalf of each  
of the parties.                                                                 

 SECTION 8.04. Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the           
obligations or other acts of the other parties, (b) waive any inaccuracies in   
the representations and warranties contained in this Agreement or in any        
document delivered pursuant to this Agreement or (c) subject to the proviso of  
Section 8.03, waive compliance with any of the agreements or conditions         
contained in this Agreement; provided, however, that any extension or waiver by 
the Company pursuant to this Section 8.04 shall require the approval of the     
Special Committee. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on   
behalf of such party. The failure of any party to this Agreement to assert any  
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.                                                                    

  SECTION 8.05. Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Agreement pursuant to Section 8.01, an amendment of this    
Agreement pursuant to Section 8.03 or an extension or waiver pursuant to        
Section 8.04 shall, in order to be effective, require (i) in the case of Sub,   
action by its Board of Directors, and (ii) in the case of the Company, the      
direction or approval of the Special Committee, as applicable, or, in either    
case, to the extent permitted by law, its duly authorized designee.             

ARTICLE IX
GENERAL PROVISIONS

SECTION 9.01. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered 
pursuant to this Agreement shall survive the Effective Time. This Section 9.01  
shall not limit any covenant or agreement of the parties which by its terms     
contemplates performance after the Effective Time.                              

SECTION 9.02. Notices. All notices, requests, claims, demands and other 
communications under this Agreement shall be in writing and shall be deemed     
given upon receipt by the parties at the following addresses (or at such other  
address for a party as shall be specified by like notice):                      

(a) if to Sub, to                                                       

INDUS Acquisition Company                                           
7337 West Washington Street                                         
Indianapolis, IN 46251                                              
Facsimile: (317) 240-7091                                           
Attention: J. George Mikelsons                                      

with a copy to:                                                 

Cravath, Swaine & Moore                                             
Worldwide Plaza                                                     
825 Eighth Avenue                                                   
New York, NY 10019                                                  
Facsimile: (212) 474-3700                                           
Attention: William P. Rogers, Jr., Esq.                             

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(b) if to the Company, to                                       

Amtran, Inc.                                                
7337 West Washington Street                                 
Indianapolis, Indiana 46231                                 
Facsimile: (317) 240-7211                                   
Attention: John P. Tague                                    

and                                                     

Blue and Co. LLC                                            
11460 N. Meridian Street                                    
Carmel, IN 46032                                            
Facsimile: (317) 573-2458                                   
Attention: Robert A. Abel                                   

with a copy to:                                         

Sullivan & Cromwell                                         
125 Broad Street                                            
New York, NY 10004                                          
Facsimile: (212) 558-3588                                   
Attention: Benjamin F. Stapleton, Esq.                      
John Evangelakos, Esq.                  

SECTION 9.03. Definitions. For purposes of this Agreement:              

An 'AFFILIATE' of any person means another person that directly or      
indirectly, through one or more intermediaries, controls, is controlled by, or  
is under common control with, such first person.                                

 A 'PERSON' means any individual, firm, corporation, partnership, company,
limited liability company, trust, joint venture, association, Governmental      
Entity or other entity.                                                         

  A 'SUBSIDIARY' of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is  
sufficient to elect at least a majority of its Board of Directors or other      
governing body (or, if there are no such voting interests, 50% or more of the   
equity interests of which) is owned directly or indirectly by such first person.

   SECTION 9.04. Interpretation. When a reference is made in this Agreement to
a Section or Schedule, such reference shall be to a Section of, or a Schedule   
to, this Agreement unless otherwise indicated. The table of contents and        
headings contained in this Agreement are for reference purposes only and shall  
not affect in any way the meaning or interpretation of this Agreement. Whenever 
the words 'INCLUDE', 'INCLUDES' or 'INCLUDING' are used in this Agreement, they 
shall be deemed to be followed by the words 'WITHOUT LIMITATION'. The words     
'HEREOF', 'HEREIN' and 'HEREUNDER' and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular    
provision of this Agreement. The term 'OR' is not exclusive. The definitions    
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms. Any agreement or instrument defined or referred to herein  
or in any agreement or instrument that is referred to herein means such         
agreement or instrument as from time to time amended, modified or supplemented. 
References to a person are also to its permitted successors and assigns.        

    SECTION 9.05. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule or Law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of   
the transactions contemplated hereby is not affected in any manner materially   
adverse to any party. Upon such determination that any term or other provision  
is invalid, illegal or incapable of being enforced, the parties hereto shall    
negotiate in good faith to modify this Agreement so as to effect the original   
intent of the parties as closely as possible in an acceptable manner to the end 
that transactions contemplated hereby are fulfilled to the extent possible.     

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 SECTION 9.06. Counterparts. This Agreement may be executed in one or more
separate counterparts, all of which shall be considered one and the same        
agreement and shall become effective when one or more counterparts have been    
signed by each of the parties and delivered to the other parties.               

SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This      
Agreement, taken together with the Company Disclosure Letter, (a) constitute the
entire agreement, and supersede all prior agreements and understandings, both   
written and oral, among the parties with respect to the Transactions and        
(b) except for the provisions of Article II and Section 6.05, are not intended  
to confer upon any person other than the parties any rights or remedies.        

SECTION 9.08. Governing Law. This Agreement shall be governed by, and   
construed in accordance with, the laws of the State of New York, regardless of  
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof, except to the extent the IBCL is mandatorily applicable to the    
Merger.                                                                         

SECTION 9.09. Assignment. Neither this Agreement nor any of the rights, 
interests or obligations under this Agreement shall be assigned, in whole or in 
part, by operation of law or otherwise by any of the parties without the prior  
written consent of the other parties, except that Sub may assign, in its sole   
discretion, any or all of its rights, interests and obligations under this      
Agreement to any company directly or indirectly wholly owned by JGM, but no such
assignment shall relieve the assigning party of any of its obligations under    
this Agreement. Any purported assignment without such consent shall be void.    
Subject to the preceding sentences, this Agreement will be binding upon, inure  
to the benefit of, and be enforceable by, the parties and their respective      
successors and assigns.                                                         

  SECTION 9.10. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not        
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or    
injunctions to prevent breaches of this Agreement and to enforce specifically   
the terms and provisions of this Agreement, this being in addition to any other 
remedy to which they are entitled at law or in equity.                          

SECTION 9.11. Obligations of JGM. Sub agrees to cause JGM and any of his
affiliates (other than the Company, the Company Subsidiaries and the Excluded   
Affiliates) to comply with their respective obligations under this Agreement,   
including their respective obligations under Section 6.01.                      

  IN WITNESS WHEREOF, Sub and the Company have duly executed this Agreement,
all as of the date first written above.                                         

                              INDUS ACQUISITION COMPANY,

                              by /s/ J. GEORGE MIKELSONS
                                             ...................................
                                 NAME: J. GEORGE MIKELSONS
                                      TITLE:  CHAIRMAN AND PRESIDENT

                 AMTRAN, INC.,

                        by /s/ JOHN P. TAGUE
                                             ...................................
                           NAME: JOHN P. TAGUE
                                       TITLE:  CHIEF EXECUTIVE OFFICER

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                                                                       EXHIBIT A

PLAN OF MERGER

    Amtran, Inc., an Indiana corporation (the 'COMPANY') or, as of the Effective
Time (as defined in Section 1 below), the 'SURVIVING CORPORATION'), and INDUS   
Acquisition Company, an Indiana corporation ('SUB'), hereby adopt the following 
Plan of Merger for purposes of Section 40-1 of the Indiana Business Corporation 
Law (the 'IBCL'):                                                               

1. Articles of Merger. In accordance with the requirements of the IBCL, 
Articles of Merger shall be prepared, executed and submitted for filing with the
office of the Secretary of State of the State of Indiana as soon as practicable 
following the closing of the Merger (as defined in Section 2 below). The date of
such filing is referred to as the 'EFFECTIVE TIME'.                             

    2. Merger; Articles; Bylaws. At the Effective Time, (i) Sub shall merge with
and into the Company (the 'MERGER') and as a result thereof, the separate       
existence of Sub shall cease, (ii) the Articles of Incorporation of the Company,
as in effect immediately prior to the Effective Time, shall constitute the      
Articles of Incorporation of the Surviving Corporation (the 'ARTICLES') and     
(iii) the Bylaws of the Company, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation (the 'BYLAWS').          

3. Effects of the Merger. At the Effective Time: (a) title to all real  
estate and other property owned by Sub and the Company shall be vested in the   
Surviving Corporation without reversion or impairment; (b) the Surviving        
Corporation shall have all liabilities of Sub and the Company; (c) a proceeding 
pending against Sub or the Company may be continued as if the Merger did not    
occur or the Surviving Corporation may be substituted in the proceeding for Sub;
and (d) the shares of capital stock of Sub and shares of common stock, without  
par value, of the Company ('COMPANY COMMON STOCK') shall be converted as        
provided in Section 6 hereof.                                                   

4. Directors. The directors of the Company immediately prior to the     
Effective Time shall be the directors of the Surviving Corporation, until the   
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.                                 

   5. Officers. The officers of the Company immediately prior to the Effective
Time shall be the officers of the Surviving Corporation, until the earlier of   
their resignation or removal or until their respective successors are duly      
elected or appointed and qualified, as the case may be.                         

   6. Effect on the Capital Stock of the Constituent Corporations; Exchange of
Certificates. The following provisions of this Plan of Merger shall govern the  
manner and basis of converting the shares of Company Common Stock and shares of 
capital stock of Sub into shares, obligations, or other securities of the       
Surviving Corporation.                                                          

    6.1. Effect on Capital Stock. At the Effective Time, by virtue of the Merger
and without any action on the part of the holder of any shares of capital stock 
of the Company or any shares of capital stock of Sub:                           

      (a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and      
nonassessable share of common stock, without par value, of the Surviving
Corporation.                                                            

      (b) Cancelation of Treasury, JGM-Owned and Sub-Owned Stock. Each share
 of Company Common Stock that is owned by the Company, J. George Mikelsons
('JGM'), Sub or any other affiliate of JGM (other than any person who is
  deemed to be an affiliate of JGM by reason of such person's position as an
    officer or director of the Company) shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and no  
  consideration shall be delivered or deliverable in exchange therefor. Each
    share of Company Common Stock that is owned by any subsidiary of the Company
    shall automatically be converted into one fully paid and nonassessable share
of common stock, without par value, of the Surviving Corporation.       

       (c) Conversion of Company Capital Stock. (1) Subject to Section 6.1(b),
   each issued share of Company Common Stock shall be converted into the right
   to receive from the Surviving Corporation $23.00 in cash, without interest.

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    (2) Each issued share of Preferred Stock of the Company shall remain
outstanding.                                                            

    (3) The cash payable upon the conversion of shares of Company Common
Stock pursuant to this Section 6.1(c) is referred to collectively as the
 'MERGER CONSIDERATION'. At the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be  
canceled and retired and shall cease to exist, and each holder of a     
certificate that immediately prior to the Effective Time represented any
  such shares of Company Common Stock (each, a 'CERTIFICATE') shall cease to
have any rights with respect thereto, except the right to receive Merger
Consideration upon surrender of a Certificate in accordance with        
Section 6.2, without interest.                                          

SECTION 6.2. Exchange of Certificates.                          

    (a) Paying Agent. Prior to the Effective Time, Sub shall designate a
 bank or trust company to act as paying agent (the 'PAYING AGENT') for the
    payment of the Merger Consideration upon surrender of Certificates. Promptly
    following the Effective Time, the Surviving Corporation shall provide to the
  Paying Agent cash in an amount sufficient to pay for the shares of Company
Common Stock converted into the right to receive cash pursuant to       
Section 6.1(c) (such cash being hereinafter referred to as the 'EXCHANGE
  FUND'). All of the fees and expenses of the Paying Agent shall be borne by
the Surviving Corporation.                                              

        (b) Exchange Procedure. The Surviving Corporation shall cause the Paying
  Agent to mail promptly after the Effective Time (but, in any event, within
five days after the Effective Time) to each holder of record of         
   Certificates, (i) a form of letter of transmittal (which shall specify that
    delivery shall be effected, and risk of loss and title to Certificates shall
    pass, only upon delivery of Certificates to the Paying Agent and shall be in
 such form and have such other provisions as the Surviving Corporation may
    reasonably specify) and (ii) instructions for use in effecting the surrender
 of Certificates in exchange for Merger Consideration. Upon surrender of a
  Certificate for cancelation to the Paying Agent, together with such letter
of transmittal, duly completed and validly executed, and such other     
  documents as may reasonably be required by the Paying Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor the  
amount of cash into which the shares of Company Common Stock theretofore
represented by such Certificate shall have been converted pursuant to   
Section 6.1(c) and the Certificate so surrendered shall forthwith be    
canceled; the Surviving Corporation shall enter into a paying agency    
  agreement with the Paying Agent which provides that the Paying Agent shall
 promptly following any such surrender of Certificates (but, in any event,
within three business days after the Paying Agent receives such         
    Certificates) dispatch by mail payment of such amount to such holder. In the
event of a transfer of ownership of Company Common Stock that is not    
   registered in the transfer records of the Company, payment may be made to a
    person other than the person in whose name the Certificate so surrendered is
  registered, if such Certificate shall be properly endorsed or otherwise be
    in proper form for transfer and the person requesting such payment shall pay
 any transfer or other taxes required by reason of the payment to a person
other than the registered holder of such Certificate or establish to the
   satisfaction of the Surviving Corporation that such tax has been paid or is
   not applicable. Until surrendered as contemplated by this Section 6.2, each
Certificate shall be deemed at any time after the Effective Time to     
   represent only the right to receive upon such surrender the amount of cash,
   without interest, into which the shares of Company Common Stock theretofore
represented by such Certificate have been converted pursuant to         
Section 6.1(c). No interest shall be paid or shall accrue on the cash   
payable upon surrender of any Certificate.                              

   (c) No Further Ownership Rights in Company Common Stock. The Merger
 Consideration paid upon surrender of a Certificate in accordance with the
terms of this Plan of Merger shall be deemed to have been paid in full  
   satisfaction of all rights pertaining to the shares of Company Common Stock
    formerly represented by such Certificate, and after the Effective Time there
    shall be no further registration of transfers on the stock transfer books of
the Surviving Corporation of shares of Company Common Stock that were   
    outstanding immediately prior to the Effective Time. If, after the Effective
Time, any Certificates are presented to the Surviving Corporation or the
 Paying Agent for any reason, they shall be canceled and exchanged for the
amount of cash into which the shares of Company Common Stock theretofore
 represented by such Certificates shall have been converted as provided in
this Plan of Merger.                                                    

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       (d) No Liability. None of Sub, the Company or the Paying Agent shall be
  liable to any person in respect of any cash from the Exchange Fund that is
   required under applicable Law to be delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.           

       (e) Investment of Exchange Fund. The Surviving Corporation shall direct
the Paying Agent to invest any cash included in the Exchange Fund, as   
 directed by the Surviving Corporation, on a daily basis. Any interest and
   other income resulting from such investments shall be paid to the Surviving
Corporation.                                                            

      (f) Withholding Rights. The Surviving Corporation shall be entitled to
deduct and withhold, as required by applicable Law, any applicable taxes
from the consideration otherwise payable to any holder of Company Common
Stock pursuant to this Agreement.                                       

        (g) Lost, Stolen or Destroyed Certificates. In the event any Certificate
  shall have been lost, stolen or destroyed, the holder of such lost, stolen
or destroyed Certificate shall execute an affidavit of that fact upon   
   request. The holder of any such lost, stolen or destroyed Certificate shall
also deliver a reasonable indemnity against any claim that may be made  
 against the Surviving Corporation or the Paying Agent with respect to the
 Certificate alleged to have been lost, stolen or destroyed. The affidavit
   and any indemnity which may be required hereunder shall be delivered to the
Paying Agent, who shall be responsible for making payment for such lost,
stolen or destroyed Certificate pursuant to the terms hereof.           

        (h) Adjustment to Prevent Dilution. In the event that following the date
hereof and prior to the Effective Time the Company changes the number of
shares of Company Common Stock or securities convertible or exchangeable
   into or exercisable for shares of Company Common Stock, as the case may be,
   issued and outstanding by way of a reclassification, stock split (including
 a reverse stock split), stock dividend or distribution, recapitalization,
subdivision, or other similar transaction, the amount of Merger         
   Consideration payable with respect to a share of Company Common Stock shall
be adjusted appropriately to provide holders of shares of Company Common
   Stock the same economic effect contemplated by this Plan of Merger prior to
such change.                                                            

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                                                                       EXHIBIT B

                                                                   June   , 2001

Re: Amendment of Stock Option Terms 

Dear [Name of Officer]:                                                         

  As you know, INDUS Acquisition Company ('SUB') and Amtran, Inc. ('AMTRAN')
have entered into an Agreement and Plan of Merger dated as of June 18, 2001 (the
'MERGER AGREEMENT'), pursuant to which Sub will be merged into Amtran (the      
'MERGER'). Under the Merger Agreement, Amtran has agreed to enter into option   
modification agreements by the time the Merger becomes effective with certain   
officers with respect to their options to purchase shares of Amtran common stock
(the 'OFFICER OPTIONS') remaining outstanding following the consummation of the 
Merger. The purpose of this letter agreement is to amend your option agreements 
to set forth the terms on which your Officer Options would remain outstanding   
following the consummation of the Merger. Except as provided in Section 2       
hereof, this agreement will become effective only upon completion of a          
transaction that is approved by the Board of Directors and the shareholders of  
Amtran involving the acquisition, directly or indirectly, by Mikelsons of the   
outstanding shares of Amtran common stock he does not currently own (a          
'TRANSACTION').                                                                 

Amtran and you each agree as follows:                                   

1. The terms of each of your outstanding and unexercised Officer Options
granted pursuant to the 1993 Incentive Stock Plan for Key Employees of Amtran   
and its Subsidiaries, the 1996 Incentive Stock Plan for Key Employees of Amtran 
and its Subsidiaries and/or the 2000 Incentive Stock Plan for Key Employees of  
Amtran and its Subsidiaries (collectively, the 'OPTION PLANS') and the stock    
option agreements thereunder, which Officer Options are set forth on Schedule 1 
hereto, shall be modified effective as of the consummation of a Transaction as  
set forth in the 'DESCRIPTION OF OPTION ROLLOVER PROPOSAL' attached as Annex A  
('ANNEX A').                                                                    

   2. Effective as of the date hereof, you agree, notwithstanding the terms of
the Option Plans and the agreements thereunder, not to exercise your Officer    
Options from the date hereof until the earlier to occur of: (i) the consummation
of a Transaction or (ii) the termination of the Merger Agreement in accordance  
with its terms.                                                                 

   3. By entering into this Agreement, you agree and acknowledge that you have
received and read the tax disclosure contained in Annex A. You acknowledge that 
you have had the opportunity to consult with your own tax advisor as to the     
specific tax consequences of the proposed modifications to your Officer Options.

4. By entering into this Agreement, you acknowledge that the issuance of
shares of Amtran common stock received upon exercise of such options will be a  
private placement which will not be registered under the Securities Act and that
such shares will be 'RESTRICTED SECURITIES' as defined in Rule 144 under the    
Securities Act of 1933, as amended.                                             

  5. Amtran is permitted to cause any wholly owned subsidiary to perform, in
whole or in part, any of Amtran's obligations under this Agreement, including,  
without limitation, those set forth on Annex A, provided that any such action by
Amtran shall not release it from its obligations hereunder.                     

  6. The interpretation, performance and enforcement of this agreement shall
be governed by the laws of the state of Indiana without regard to principles of 
conflicts of law.                                                               

  7. This agreement may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.                                                            

Except as specifically provided herein, the terms and conditions of your
Officer Options as set forth in the Option Plans and stock option agreements    
thereunder will continue to apply and remain in full                            

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force and effect. You acknowledge that your agreement to the terms and          
conditions of this letter agreement is an inducement to Mikelsons' willingness  
to consummate a Transaction.                                                    

                     Very truly yours,

                 AMTRAN, INC.,

                                          By:  .................................
               NAME:
                TITLE:

Agreed and Accepted:                                                            

.....................................                                         
[Name of Officer]                                           

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                                                                      SCHEDULE 1

[NAME OF OFFICER] 

                                                        [Enlarge/Download Table]

                                               NON-                                    
   DATE OF        PLAN UNDER      INCENTIVE  QUALIFIED                                 
STOCK OPTION  WHICH STOCK OPTION    STOCK      STOCK                                   
    GRANT        WAS GRANTED       OPTIONS    OPTIONS   EXERCISE PRICE  EXPIRATION DATE
    -----        -----------       -------    -------   --------------  ---------------
                                                                                       

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                                                                         ANNEX A

AMTRAN, INC.
DESCRIPTION OF OPTION ROLLOVER

BACKGROUND                                                                      

    As the Company announced on May 16, 2001, J. George Mikelsons has proposed
  taking the Company private in a transaction in which all the outstanding
     shares would be exchanged for a cash payment. On June 18, 2001, the Company
entered into a merger agreement with respect to that proposal.        

    Approval of the proposed transaction by the Board of Directors resulted in
the acceleration of vesting of all outstanding stock options held by  
officers (i.e., all options held by officers have become immediately  
exercisable).                                                         

    Under the proposal, all in-the-money options held by non-officers would be
     cashed out at the closing of the proposed transaction. All out-of-the-money
     options held by non-officers would be canceled without payment, in exchange
   for the acceleration of vesting of options that would not otherwise vest.

OVERVIEW OF THE PROPOSAL TO OFFICERS                                            

     The merger agreement for the proposed transaction provides that the Company
will enter into option modification agreements with the members of the
officer group under which they would agree to continue to hold their  
options with certain modifications as described below.                

Officers would agree to defer exercise of their options. In 2002 and  
    thereafter, options would be exercisable not less frequently than annually
until the expiration of options in accordance with their terms (i.e., 
maturity dates would not be extended).                                

   In order to provide liquidity so long as the Company is private, officers
    would have the right to put shares acquired upon exercise of their options
   annually for three put periods following exercise. These put rights would
  expire if the Company's common stock ever becomes publicly traded again.

  Except for the modifications described in this summary, the terms of the
   existing option agreements with respect to the officer group would not be
modified.                                                             

Exhibit A to this summary contains certain timetables illustrating the
exercise and put mechanics.                                           

EXERCISE MECHANICS                                                              

     The terms of the options held by officers would be modified to provide that
    options are only exercisable during a 60-day period each year beginning on
June 1. The first regularly scheduled exercise period would start on  
June 1, 2002. In no event would an option be permitted to be exercised
beyond its existing expiration date.                                  

Exercises of options during an exercise period would be subject to two
conditions on the date of exercise:                                   

 -- the Company must have the ability under the terms of its
      outstanding debt (including the Company's existing indentures, the
     secured credit facility to be entered into in connection with the
        proposed transaction and future indentures and credit facilities) to
        make the corresponding put payment (discussed below) on the exercise
date; and                                                   

         -- after making the corresponding put payments, the Company must be
          able to satisfy a minimum cash test of either (x) $125 million in cash
          and cash equivalents or (y) $200 million in cash, cash equivalents and
availability under the new secured credit facility.         

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   If on any day during an exercise period some but not all option exercises
    would be permitted under these two conditions, then officers exercising on
     that day would be permitted to exercise only in part (allocated among those
exercising pro rata (based on the number of options requested to be   
exercised)).                                                          

The Company would loan on a full-recourse basis at a market rate of   
 interest to current officers the exercise price of their options (other
  than incentive stock options, or 'ISOS') and withholding taxes resulting
  from option exercises. These loans would be required to be repaid at the
   time the shares received upon exercise are put or, if earlier, at the end
of the third put period following the exercise date. Interest would be
   payable annually on these loans either in the form of cash or in the form
of an additional note.                                                

    Holders of ISOs would not automatically be entitled to receive such a loan
    but could apply for a loan from the Company to the extent that such a loan
     would not disqualify the ISOs. The terms of this loan would differ from the
    terms of the loans made available to holders of nonqualified stock options
to the extent necessary to comply with the IRS rules relating to ISOs.

PUT RIGHT                                                                       

    In order to provide liquidity to optionholders once the Company is private
    (since there would be no public market for the Company's shares), officers
 would have the right to put their shares to the Company during a 60-day
 period beginning on December 15 of each year; provided, that no officer
will be permitted to put his or her shares to the Company prior to the
expiration of 6 months following the date on which such shares were   
    acquired pursuant to the exercise of an option. The first put period would
start on December 15, 2002.                                           

In order for the Company to obtain favorable accounting treatment with
   respect to the put right, officers would be required to hold their shares
   for a minimum of 6 months following the date of option exercise. For this
   reason, put notices would become effective no earlier than 6 months after
    the end of the immediately preceding exercise period. An exception is made
to this requirement in the case of the death of an officer.           

Officers would have the right to put shares at a price per share to be
  determined by an independent third-party appraiser shortly prior to each
   year's exercise period. The valuation methodology for the put right would
  be the same method used for valuations under the preferred stock held by
   ILFC. Until the first valuation is completed (presently anticipated to be
   in the first quarter of 2002), the put price would be the price per share
paid in the proposed transaction.                                     

    If a holder exercises his or her options but decides not to put his or her
    shares until a put period that occurs after a new valuation, the put price
   would be the new valuation price, which could be higher or lower than the
price per share paid in the proposed transaction.                     

A put would become effective 30 days after the officer delivers a put 
notice.                                                               

    Except as described below, the put right with respect to particular shares
  would expire at the end of the fifth put period after the date of option
exercise with respect to such shares.                                 

TREATMENT OF OPTIONS AND SHARES UPON RETIREMENT OR DISABILITY                   

 The options held by an officer who retires at or after age 60 or leaves
     employment because of a Disability (as defined in the existing option plans
    and agreements) would be exercisable through the end of the first exercise
     period ending after the date of retirement or Disability, unless the option
 would otherwise expire sooner under its existing terms. For example, an
    officer who retires in January of a year with unexercised options would be
    required to exercise his or her options on or before July 30 of that year.

  To the extent that a regularly scheduled exercise period would not occur
    prior to expiration of an option, the retired or Disabled officer would be
permitted to deliver an exercise notice during a special individual   
 exercise period beginning 5 days prior to the date on which that option
would expire and ending on the date the option would expire (i.e., the
     former officer would be permitted to exercise during the last five days the
option is outstanding). An exercise notice                            

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  would become effective immediately unless the conditions to exercise set
forth under 'EXERCISE MECHANICS' would not be satisfied on the date of
   delivery, in which case the exercise notice would become effective on the
     first date on which those conditions would be satisfied. The exercise price
would be paid on the date an exercise notice becomes effective.       

     A former officer would have the put rights described above, except that the
     former officer's put rights would expire at the end of the first put period
    after the date of exercise during which the former officer is permitted to
put his or her shares.                                                

The Company would have a call (which would become exercisable upon the
     expiration of the former officer's put rights) over the officer's shares at
the then-current valuation price.                                     

     The Company would make a loan available to former officers after retirement
   or termination of employment for Disability to the extent set forth above
under the heading 'EXERCISE MECHANICS'.                               

TREATMENT OF OPTIONS AND SHARES UPON RESIGNATION OR TERMINATION OF EMPLOYMENT   

    The options held by an officer who voluntarily leaves the Company prior to
age 60 (other than due to death or Disability), is terminated by the  
     Company at any time other than for Cause (as defined in the existing option
    plans and agreements) or becomes a part-time employee would continue to be
exercisable during exercise periods in accordance with their existing 
terms.                                                                

  To the extent that a regularly scheduled exercise period would not occur
     during such 90-day period, the former officer would be permitted to deliver
    an exercise notice during a special individual exercise period beginning 5
    days prior to the date on which the options would expire and ending on the
    last day of the 90-day period (i.e., the former officer would be permitted
to exercise during the last five days the option is outstanding). An  
     exercise notice would become effective immediately unless the conditions to
     exercise set forth under 'EXERCISE MECHANICS' would not be satisfied on the
    date of delivery, in which case the exercise notice would become effective
on the first date on which those conditions would be satisfied.       

  A former officer would be required to wait a minimum of six months after
    the date of exercise before being permitted to put shares received on that
     exercise. As a result, a former officer could be required to wait until the
   put period in the year following option exercise before being able to put
  shares. For example, an officer who leaves on July 1, 2002 would only be
     able to exercise his or her options from September 23-28, 2002. This former
 officer would not be permitted to deliver a put notice until at least 5
months after the date of exercise (i.e., not earlier than February 23,
 2003) which is after the end of the period for delivery of put notices.
     Therefore, the officer would not be permitted to deliver a put notice until
November 15, 2003.                                                    

  This put right would expire at the end of the first put period following
   termination of employment during which the former officer is permitted to
put his or her shares.                                                

     The options and put rights of any officer who is terminated for Cause would
terminate immediately upon termination.                               

The Company would offer loans to former officers who resign or are    
  terminated other than for Cause on terms consistent with those set forth
  above under the heading 'EXERCISE MECHANICS', except that in the case of
    former officers that resign, the maximum amount of the loan will equal the
 exercise price of the options being exercised (i.e., it would not cover
taxes).                                                               

  The Company would have a call right (which would become exercisable upon
   the former officer's termination of full-time employment) over the former
officer's shares at the then-current valuation price and the officer's
options at a price equal to the spread.                               

TREATMENT OF OPTIONS AND SHARES UPON DEATH                                      

    Upon the death of an officer, the officer's estate would have the right to
   immediately exercise all the officer's options subject to satisfaction of
   the conditions to exercise set forth above under 'EXERCISE MECHANICS'. As
provided in the existing option plans and agreements, the estate of a 
former officer who dies after termination of employment would have the
exercise period                                                       

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specified with respect to such termination (e.g., 90 days to exercise 
following termination other than for Cause).                          

     Upon the death of an officer or a former officer, the estate would have the
     right to put the officer's shares immediately at the then-current valuation
    price. This put right would expire on the first anniversary of the date of
 death. A put notice in the case of the death of an officer would become
 effective 5 business days after the date the notice is delivered by the
officer's estate.                                                     

   The Company would have an immediately exercisable call over the officer's
   shares at the then-current valuation price and the officer's options at a
price equal to the spread.                                            

FUTURE PUBLIC OFFERING OF THE COMPANY                                           

 If there is ever a future public offering of common stock, the exercise
     limitations and put rights would expire immediately prior to its completion
(because there would then be a public market for the shares of the    
Company's stock).                                                     

CERTAIN TAX CONSIDERATIONS                                                      

The following is a general summary of the material federal income tax   
consequences to optionholders under current law. This summary deals with the    
general tax principles that apply and is provided only for general information. 
Some kinds of taxes, such as foreign, state and local income taxes, are not     
discussed. Tax laws are complex and subject to change and may vary depending on 
individual circumstances and from locality to locality. This summary does not   
discuss all aspects of income taxation that may be relevant to an optionholder  
in light of his or her personal investment circumstances. This summarized tax   
information is not tax advice.                                                  

 OPTIONHOLDERS ARE ADVISED TO CONSULT THEIR OWN ADVISOR AS TO THE SPECIFIC
TAX CONSEQUENCES OF THE PROPOSED MODIFICATIONS.                                 

INCENTIVE STOCK OPTIONS:                                                        

The grant or exercise of an option which is an ISO does not result in 
    taxable income to the optionholder or a deduction to the Company. However,
   the excess of the fair market value on the date of exercise of the shares
acquired over the option exercise price will generally be included in 
   alternative minimum taxable income. Whether an optionholder is subject to
  the alternative minimum tax will depend on such the optionholder's other
taxable income.                                                       

   If an optionholder does not dispose of shares acquired pursuant to an ISO
     before the later of two years from the date of grant of such option and one
   year after the date of exercise of an ISO, any gain or loss realized on a
subsequent disposition of such shares will be treated as a long-term  
capital gain or loss. If, however, an optionholder disposes of shares 
acquired pursuant to an ISO before the expiration of the one-year and 
     two-year periods described above (a 'DISQUALIFYING DISPOSITION'), an amount
   equal to the excess of the fair market value of the shares at the time of
  the option's exercise (or the proceeds of the disposition, if less) over
the option price will, in the year of disposition, be taxable to the  
optionholder as ordinary income and deductible by the Company. If the 
shares are disposed of at a loss, the loss will be a capital loss.    

An optionholder's basis for capital gains purposes in shares acquired 
     pursuant the exercise of an ISO will be the amount paid by the optionholder
upon exercise of the option. However, in the event of a disqualifying 
disposition, the optionholder's basis in the shares is increased by an
    amount equal to the amount taxable to the optionholder as ordinary income.

NONQUALIFIED STOCK OPTIONS:                                                     

Upon exercise of an option which does not qualify as an ISO (a        
 'NONQUALIFIED STOCK OPTION'), an amount equal to the excess of the fair
    market value of the shares acquired on the date of exercise of such option
   over the option exercise price is taxable to the optionholder as ordinary
income (which would be subject to withholding) and deductible to the  
Company. The optionholder's                                           

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     basis for capital gains purposes in the shares acquired is equal to the sum
  of the exercise price and the amount taxable as ordinary income. Gain or
loss on a subsequent disposition of shares acquired pursuant to a     
     nonqualified stock option will be treated as capital gain or loss, and will
  be long-term capital gain or loss if such shares were held for more than
one year after the date of exercise.                                  

EXERCISE OF OPTIONS WITH PREVIOUSLY ACQUIRED SHARES:                            

    If an optionholder uses previously acquired shares to pay all or a portion
   of the option price on the exercise of an option (whether or not an ISO),
     no gain or loss would be recognized with respect to the previously acquired
   shares. The shares received upon exercise of the option, to the extent of
    the number of previously acquired shares exchanged therefor, will have the
   same basis and holding period for capital gain purposes as the previously
acquired shares.                                                      

If the option is a nonqualified stock option, the additional shares   
     received have a basis equal to the sum of the cash paid on exercise and the
     ordinary income taxable to the optionholder as a result of the exercise. If
    the option is an ISO, the additional shares have a basis equal to the cash
paid on exercise (plus, if the one-year and two-year periods discussed
   above have not been met with respect to shares acquired upon the previous
exercise of an ISO, the amount includable in income.)                 

    The use of shares previously acquired by exercising an ISO in satisfaction
    of all or part of the exercise price for another option (whether or not an
 ISO) is a disposition of the previously acquired shares for purposes of
  determining whether it is a disqualifying disposition (i.e., whether the
holding periods described above have been complied with). All shares  
 acquired upon the exercise of an ISO, including the previously acquired
    shares, are considered to have been acquired upon the date of exercise for
purposes of these holding periods.                                    

PROPOSED MODIFICATIONS:                                                         

 Although not free from doubt, the provision of the put rights described
     above should not cause options intended to qualify as ISOs to fail to be so
   qualified. If the IRS were to conclude that the options no longer qualify
as ISOs, the options would be subject to the treatment applicable to  
nonqualified stock options.                                           

If the aggregate fair market value of the shares underlying ISOs      
 (determined as of the date of grant) that are exercisable for the first
 time during any calendar year exceeds $100,000, options covering shares
   equal to that excess will be treated as nonqualified stock options. Thus,
 the acceleration of vesting and exercisability upon the approval of the
    proposed transaction may cause some options that currently qualify as ISOs
to be treated as nonqualified stock options.                          

The deductibility of interest paid under the employee loan would be   
determined based on the facts and circumstances of the particular     
optionholder. OPTIONHOLDERS SHOULD CONSULT THEIR OWN ADVISOR AS TO THE
 SPECIFIC RULES GOVERNING THE DEDUCTIBILITY OF THIS INTEREST IN LIGHT OF
THEIR OWN PARTICULAR TAX SITUATION.                                   

   Cancelation of options in exchange for a cash payment would result in the
  optionholder's realization of ordinary income (which would be subject to
withholding) in an amount equal to the cash payment received.         

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                                                                       EXHIBIT A

ILLUSTRATIVE TIMELINES

                                                        [Enlarge/Download Table]
                                                                                              
STANDARD YEAR                                                                                 

Valuation completed and published                March 15-April 15                            
Exercise period                                  June 1-July 30                               
Period for the delivery of put notices           November 15-February 14                      
Period during which notices become effective                                                  
  (30 days after delivery)                       December 15-March 3                          

DEATH                                                                                         

Estate gets immediately exercisable put          Date of death                                
Put becomes effective                            5 business days after delivery of notice     
Right to deliver a put notice expires            First anniversary of date of death           

RETIREMENT OR DISABILITY                                                                      

Exercise period                                  June 1-July 30                               
Period for delivery of put notices               November 15-February 14                      
Period during which notices become effective                                                  
  (30 days after delivery)                       December 15-March 3                          
Right to deliver a put notice expires            February 15                                  

RESIGNATION OR TERMINATION OTHER THAN FOR CAUSE                                               

Exercise period ends                             No later than 90 days after resignation of   
                                                   termination                                
Period for delivery of put notice starts         First day in a put period that is at least 5 
                                                   months after the exercise date             
Period for delivery of put notices ends          Last day of first put period in which a put  
                                                   notice may be delivered                    
Right to deliver a put notice expires            Day after the last day of first put period in
                                                   which a put notice may be delivered        

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                                                                         ANNEX B

                                                                  CONFORMED COPY

PURCHASE AND VOTING AGREEMENT dated as of May 16, 2001, between AMTRAN, 
INC., an Indiana corporation (the 'COMPANY'), and INTERNATIONAL LEASE FINANCE   
CORPORATION, a California corporation ('ILFC').                                 

   WHEREAS, in connection with a possible merger (the 'MERGER') of the Company
with a corporation owned, directly or indirectly, by J. George Mikelsons        
pursuant to which shares of the common stock, without par value, of the Company 
('COMMON STOCK'), other than shares of Common Stock owned, directly or          
indirectly, by J. George Mikelsons, would be converted into the right to receive
cash at a price per share of Common Stock (the 'TRANSACTION PRICE') to be       
specified in an Agreement and Plan of Merger which may be entered into by the   
Company with respect to the Merger (the 'MERGER AGREEMENT'), the Company and    
ILFC wish to set forth the terms and conditions relating to (i) certain         
modifications to the terms of the shares of Series B Preferred Stock, without   
par value, of the Company ('SERIES B PREFERRED STOCK') to be effected           
immediately prior to the Merger, (ii) the Company's agreement to purchase, and  
ILFC's agreement to sell, shares of Series B Preferred Stock concurrently with  
consummation of the Merger and (iii) certain other matters with respect to the  
continuing business relationship between the Company and ILFC; and              

   WHEREAS ILFC owns 300 shares of Series B Preferred Stock (together with any
other shares of capital stock of the Company acquired by ILFC after the date    
hereof and during the term of this Agreement, being collectively referred to    
herein as the 'SUBJECT SHARES').                                                

NOW, THEREFORE, the parties hereto agree as follows:                    

 SECTION 1. Representations and Warranties of ILFC. ILFC hereby represents
and warrants to the Company as of the date hereof as follows:                   

(a) Authority; Execution and Delivery; Enforceability. ILFC has all     
requisite corporate power and authority to execute this Agreement and to        
consummate the transactions contemplated hereby. The execution and delivery by  
ILFC of this Agreement and consummation of the transactions contemplated hereby 
have been duly authorized by all necessary corporate action on the part of ILFC.
ILFC has duly executed and delivered this Agreement, and this Agreement         
constitutes the legal, valid and binding obligation of ILFC, enforceable against
ILFC in accordance with its terms. The execution and delivery by ILFC of this   
Agreement do not, and the consummation of the transactions contemplated hereby  
and compliance with the terms hereof will not, conflict with, or result in any  
violation of, or default (with or without notice or lapse of time, or both)     
under, or give rise to a right of termination, cancelation or acceleration of   
any obligation or to loss of a material benefit under, or result in the creation
of any Lien (as defined below) upon any of the properties or assets of ILFC     
under, any provision of any contract to which ILFC is a party or by which any   
properties or assets of ILFC are bound or, subject to the filings and other     
matters referred to in the next sentence, any provision of any judgment or law  
applicable to ILFC or the properties or assets of ILFC. No consent of, or       
registration, declaration or filing with, any governmental entity is required to
be obtained or made by or with respect to ILFC in connection with the execution,
delivery and performance of this Agreement or the consummation of the           
transactions contemplated hereby, other than (i) the filing with the office of  
the Secretary of State of the State of Indiana of Articles of Amendment to the  
Articles of Incorporation of the Company (the 'AMENDMENT'), substantially in the
form of Exhibit A and (ii) such reports under Sections 13(d) and 16 of the      
Securities Exchange Act of 1934, as amended (the 'EXCHANGE ACT'), as may be     
required in connection with this Agreement and the transactions contemplated    
hereby.                                                                         

  (b) The Subject Shares. ILFC is the record and beneficial owner of and has
good and marketable title to, the Subject Shares, free and clear of any pledges,
liens, charges, mortgages, encumbrances and security interests of any kind or   
nature whatsoever (collectively, 'LIENS'). ILFC has the sole right to vote the  
Subject Shares, and none of the Subject Shares is subject to any voting trust or
other agreement, arrangement or restriction with respect to the voting of the   
Subject Shares, other than the Purchase and Investor Rights Agreement dated as  
of September 19, 2000, between the Company and ILFC (the 'EXISTING AGREEMENT')  
and as contemplated by this Agreement.                                          

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    SECTION 2. Representations and Warranties of the Company. The Company hereby
represents and warrants to ILFC as of the date hereof as follows:               

  (a) Authority; Execution and Delivery; Enforceability. The Company has all
requisite corporate power and authority to execute this Agreement and to        
consummate the transactions contemplated hereby. The execution and delivery by  
the Company of this Agreement and consummation of the transactions contemplated 
hereby have been duly authorized by all necessary corporate action on the part  
of the Company, except for Board Approval (as defined below) and receipt of the 
Amendment Shareholder Approval (as defined in Section 3(a)). The Company has    
duly executed and delivered this Agreement, and this Agreement constitutes the  
legal, valid and binding obligation of the Company, enforceable against the     
Company in accordance with its terms. The execution and delivery by the Company 
of this Agreement do not, and the consummation of the transactions contemplated 
hereby and compliance with the terms hereof will not, conflict with, or result  
in any violation of, or default (with or without notice or lapse of time, or    
both) under, or give rise to a right of termination, cancelation or acceleration
of any obligation or to loss of a material benefit under, or result in the      
creation of any Lien upon any of the properties or assets of the Company under, 
any provision of any contract to which the Company is a party or by which any   
properties or assets of the Company are bound or, subject to the filings and    
other matters referred to in the next sentence, any provision of any judgment or
law applicable to the Company or the properties or assets of the Company. No    
consent of, or registration, declaration or filing with, any governmental entity
is required to be obtained or made by or with respect to the Company in         
connection with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, other than (i) the filing 
with the office of Secretary of State of the State of Indiana of the Amendment, 
(ii) such reports under the Exchange Act as may be required in connection with  
this Agreement and the transactions contemplated hereby and (iii) such other    
consents, registrations, declarations and filings as may be required in         
connection with the Merger.                                                     

  (b) Resolutions. This Agreement is subject to the approval of the Board of
Directors of the Company (the 'BOARD APPROVAL'). At such time as the Board      
Approval is obtained, the Board of Directors of the Company will also adopt     
resolutions recommending that the holders of the outstanding shares of Common   
Stock and the holders of the outstanding shares of Series B Preferred Stock vote
to approve the Amendment (the 'BOARD RECOMMENDATION').                          

SECTION 3. Covenants of ILFC. ILFC covenants and agrees as follows:     

    (a) (1) At any meeting of the shareholders of the Company called to seek the
approval of the Amendment by the requisite number of shareholders of the Company
entitled to vote thereon (the 'AMENDMENT SHAREHOLDER APPROVAL') or in any other 
circumstances upon which a vote, consent or other approval (including by written
consent) with respect to the Amendment is sought, ILFC shall, including by      
executing an irrevocable written consent if requested by the Company, vote (or  
cause to be voted) the Subject Shares in favor of granting the Amendment        
Shareholder Approval.                                                           

    (2) Irrevocable Proxy. ILFC hereby irrevocably grants to, and appoints, each
of the Company, Kenneth K. Wolff and James W. Hlavacek, or any of them, and any 
individual designated in writing by any of them, and each of them individually, 
as ILFC's proxy and attorney-in-fact (with full power of substitution), for and 
in the name, place and stead of ILFC, to vote the Subject Shares, or grant a    
consent or approval in respect of the Subject Shares in a manner consistent with
this Section 3. ILFC understands and acknowledges that the Company will enter   
into the Merger Agreement in reliance upon ILFC's execution and delivery of this
Agreement. ILFC hereby affirms that the irrevocable proxy set forth in this     
Section 3(a)(2) is given in connection with the agreement of the Company to     
purchase the Purchase Shares (as defined in Section 5(a)) pursuant to this      
Agreement. ILFC hereby further affirms that this irrevocable proxy is coupled   
with an interest and may under no circumstances be revoked. ILFC hereby ratifies
and confirms all that such irrevocable proxy may lawfully do or cause to be done
by virtue hereof. Such irrevocable proxy is executed and intended to be         
irrevocable in accordance with Section 30-3 of the Indiana Business Corporation 
Law. The irrevocable proxy granted hereunder shall automatically terminate upon 
the termination of this Section 3.                                              

 (b) Other than this Agreement, ILFC shall not (i) sell, transfer, pledge,
assign or otherwise dispose of (including by gift) (collectively, 'TRANSFER'),  
or enter into any contract, option or other arrangement                         

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(including any profit sharing arrangement) with respect to the Transfer of, any 
Subject Shares to any person other than pursuant to this Agreement, (ii) enter  
into any voting arrangement, whether by proxy, voting agreement or otherwise,   
with respect to any Subject Shares and shall not commit or agree to take any of 
the foregoing actions or (iii) convert any Subject Shares into shares of Common 
Stock.                                                                          

    (c) ILFC shall use all reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the   
Company in doing, all things necessary, proper or advisable to consummate and   
make effective, in the most expeditious manner practicable, the transactions    
contemplated by this Agreement. ILFC shall not issue any press release or make  
any other public statement with respect to this Agreement without the prior     
consent of the Company, except as may be required by applicable law.            

  SECTION 4. Certain Covenants of the Company. (a) Subject to receipt of the
Amendment Shareholder Approval and the satisfaction or waiver of all conditions 
to the Merger on or prior to the closing date of the Merger, the Company agrees 
to file with the office of the Secretary of State of the State of Indiana,      
immediately prior to the effective time of the Merger, the Amendment.           

  (b) The Company agrees that the Merger Agreement shall provide that shares
of Series B Preferred Stock shall remain outstanding at the effective time of   
the Merger, subject to the purchase of shares of Series B Preferred Stock       
provided for in Section 5 hereof.                                               

(c) The Company agrees that it shall include in the proxy statement and 
related materials prepared by the Company in connection with the Merger all     
information required to be therein with respect to the Amendment, including the 
Board Recommendation, and that it shall submit the Amendment to a vote of the   
holders of the outstanding shares of the Common Stock and the holders of the    
outstanding shares of Series B Preferred Stock, voting as separate classes, at  
the meeting of shareholders at which the Merger and the Merger Agreement are to 
be voted upon.                                                                  

  SECTION 5. Purchase of Shares. (a) ILFC shall sell, transfer and assign to
the Company, and the Company shall purchase from ILFC, such number of shares of 
Series B Preferred Stock as the Company shall designate to ILFC in writing not  
less than 2 days prior to the date on which such shares are to be purchased by  
the Company, which number of shares shall be not less than 5% nor more than 10% 
of the shares of Series B Preferred Stock owned by ILFC (such shares being      
hereinafter referred to as the 'PURCHASE SHARES'), at the ILFC Purchase Closing 
(as defined below) for aggregate consideration consisting of a senior unsecured 
note of the Company due January 15, 2002 (the 'ILFC NOTE'), in an aggregate     
principal amount equal to the ILFC Purchase Price (as defined below) and bearing
interest on such aggregate principal amount at a rate equal to 7.38% per annum. 
The 'ILFC PURCHASE PRICE' shall equal the product of (i) the number of shares of
Common Stock into which the Purchase Shares would be convertible at the         
Conversion Price in effect at the time of the ILFC Purchase Closing (as         
determined in accordance with the Amendment but disregarding Section 6(c)       
thereof) and (ii) the Transaction Spread (as defined in the Amendment).         

  (b) The closing of the purchase of the Purchase Shares (the 'ILFC PURCHASE
CLOSING') shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York 10019 concurrently with the closing of the Merger. At
the ILFC Purchase Closing, ILFC shall deliver to the Company a certificate      
representing the Purchase Shares and Amtran shall deliver to ILFC the ILFC Note.

  (c) The obligations of each party with respect to the purchase and sale of
the Purchase Shares shall be subject to receipt of the Amendment Shareholder    
Approval and to the satisfaction or waiver of all conditions to the Merger on or
prior to the date of the ILFC Purchase Closing.                                 

  SECTION 6. Termination. Other than the provisions of Section 7 (which will
terminate in accordance with the terms thereof), this Agreement shall terminate 
on the earlier of (i) the effective time of the Merger and (ii) October 31, 2001
or such later date on which the Merger Agreement is terminated.                 

   SECTION 7. Additional Matters. (a) The Company agrees that, at the time the
Merger and the transactions contemplated by this Agreement are consummated, it  
will enter into a lease agreement with ILFC with respect to a Boeing 737-800    
aircraft substantially in the form attached as Exhibit B hereto.                

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    (b) The Company agrees that, if the Merger and the transactions contemplated
by this Agreement are consummated, it will pay to ILFC an annual fleet          
consulting fee of $100,000, payable in advance, for a period of 4 years         
commencing on the date on which the Merger is consummated. In exchange for such 
fee, ILFC will assist the Company in the management of its                      
buyer-furnished-equipment and advise the Company with respect to fleet          
retirement and other fleet management issues.                                   

 (c) The parties hereby waive the application of Section 5 of the Existing
Agreement to the purchase of shares of Series B Preferred Stock contemplated by 
Section 5. The parties agree that except as provided in the preceding sentence, 
the Existing Agreement shall remain in full force and effect and shall not be   
amended or superseded by this Agreement.                                        

(d) Each of the Company and ILFC shall, from time to time, execute and  
deliver, or cause to be executed and delivered, such additional or further      
consents, documents and other instruments as the other party may reasonably     
request for the purpose of effectively carrying out the transactions            
contemplated by this Agreement.                                                 

SECTION 8. General Provisions.                                          

    (a) Amendments. This Agreement may not be amended except by an instrument in
writing signed by each of the parties hereto.                                   

(b) Notice. All notices and other communications hereunder shall be in  
writing and shall be deemed given if delivered in accordance with Section 9 of  
the Existing Agreement.                                                         

   (c) Interpretation. When a reference is made in this Agreement to Sections,
such reference shall be to a Section to this Agreement unless otherwise         
indicated. The headings contained in this Agreement are for reference purposes  
only and shall not affect in any way the meaning or interpretation of this      
Agreement. Wherever the words 'include', 'includes' or 'including' are used in  
this Agreement, they shall be deemed to be followed by the words 'without       
limitation'.                                                                    

(d) Severability. If any term or other provision of this Agreement is   
invalid, illegal or incapable of being enforced by any rule or law, or public   
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of   
the transactions contemplated hereby is not affected in any manner materially   
adverse to any party. Upon such determination that any term or other provision  
is invalid, illegal or incapable of being enforced, the parties hereto shall    
negotiate in good faith to modify this Agreement so as to effect the original   
intent of the parties as closely as possible in an acceptable manner to the end 
that transactions contemplated hereby are fulfilled to the extent possible.     

(e) Counterparts. This Agreement may be executed in one or more         
counterparts, all of which shall be considered one and the same agreement and   
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.                                 

  (f) Entire Agreement; No Third-Party Beneficiaries. This Agreement and the
Existing Agreement constitutes the entire agreement and supersedes all prior    
agreements and understandings, both written and oral, among the parties with    
respect to the subject matter hereof. This Agreement is not intended to confer  
upon any person other than the parties hereto any rights or remedies hereunder. 

(g) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York regardless of the laws that  
might otherwise govern under applicable principles of conflicts of law thereof, 
except to extent the Indiana Business Corporation Law is mandatorily applicable 
to the irrevocable proxy granted herein.                                        

  (h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by     
operation of law or otherwise, by the Company without the prior written consent 
of ILFC or by ILFC without the prior written consent of the Company, and any    
purported assignment without such consent shall be void. Subject to the         
preceding sentences, this Agreement will be binding upon, inure to the benefit  
of, and be enforceable by, the parties and their respective successors and      
assigns.                                                                        

 (i) Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in    
accordance with their specific terms or were otherwise breached. It is          
accordingly agreed that the parties shall be entitled to an injunction or       

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injunctions to prevent breaches of this Agreement and to enforce specifically   
the terms and provisions of this Agreement in any New York state court or any   
Federal court located in the State of New York, this being in addition to any   
other remedy to which they are entitled at law or in equity. In addition, each  
of the parties hereto (i) consents to submit itself to the personal jurisdiction
of any New York state court or any Federal court located in the State of New    
York in the event any dispute arises out of this Agreement or any transaction   
contemplated by this Agreement, (ii) agrees that it will not attempt to deny or 
defeat such personal jurisdiction by motion or other request for leave from any 
such court, (iii) agrees that it will not bring any action relating to this     
Agreement or any Transaction contemplated by this Agreement in any court other  
than a New York state court or any Federal court sitting in the State of New    
York and (iv) waives any right to trial by jury with respect to any claim or    
proceeding related to or arising out of this Agreement or any transaction       
contemplated hereby.                                                            

  IN WITNESS WHEREOF, each party has duly executed this Agreement, all as of
the date first written above.                                                   

             AMTRAN, INC.,

                       by /s/ KENNETH K. WOLFF
                                              ................................
                                     NAME:  KENNETH K. WOLFF
                                       TITLE: EXEC. VP AND CHIEF
                                             FINANCIAL OFFICER

                                        INTERNATIONAL LEASE FINANCE CORPORATION,

                   by /s/ ALAN H. LUND
                                              ................................
                                 NAME:  ALAN H. LUND
                                            TITLE: CHIEF FINANCIAL OFFICER

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                                                                       EXHIBIT A

ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
AMTRAN, INC.

DATE OF INCORPORATION: OCTOBER 23, 1984 

AMTRAN, INC. (hereinafter referred to as the 'CORPORATION'), an Indiana 
corporation existing pursuant to the provisions of the Indiana Business         
Corporation Law, as amended (hereinafter referred to as the 'ACT'), desiring to 
give notice of corporate action effectuating amendment of its Articles of       
Incorporation, as previously restated (the 'ARTICLES OF INCORPORATION'),        
certifies the following facts:                                                  

ARTICLE I 
THE AMENDMENT 

  1. Name. The name of the Corporation following this amendment continues to
be Amtran, Inc.                                                                 

2. Amendment and Restatement of Article XII. Upon effectiveness of these
Articles of Amendment, Article XII of the Corporation's Articles of             
Incorporation shall be amended and restated in its entirety to read exactly as  
follows:                                                                        

ARTICLE XII 
DESIGNATIONS, RIGHTS AND PREFERENCES OF SERIES B PREFERRED STOCK

  The designations, rights, preferences, limitations and restrictions of the
shares of Preferred Stock, without par value, to be designated as 'Series B     
Preferred Stock' (in addition to those set forth elsewhere in the Corporation's 
Articles of Incorporation) are hereby fixed as follows:                         

   1. Number of Shares. The number of shares of Series B Preferred Stock shall
initially be 300 shares, which number from time to time may be increased or     
decreased (but not decreased below the number of shares of the series then      
outstanding) in accordance with the provisions of the Act, subject to the rights
of holders of the Series B Preferred Stock under Section 8 hereof. Shares of    
Series B Preferred Stock redeemed or purchased by the Corporation, or converted 
into Common Stock of the Corporation in accordance with the provisions hereof,  
shall be canceled and shall revert to authorized but unissued shares of         
Preferred Stock undesignated as to series.                                      

2. Definitions and Construction. As used in this Article XII,           

 (a) 'BUSINESS DAY' means each day that is not a Saturday, Sunday or other
day on which banking institutions in the City of New York are authorized or     
required by law or executive order to be closed;                                

 (b) 'COMMON STOCK' means the common stock of the Corporation, without par
value;                                                                          

 (c) 'HEREIN', 'HEREOF', 'HEREUNDER' and other like words mean or refer to
this Article XII;                                                               

  (d) 'JUNIOR STOCK' means the Common Stock and any other class or series of
stock of the Corporation hereafter authorized (other than the Series A1         
Preferred Stock), the terms of which do not expressly provide that such class or
series ranks senior to or on a parity with the Series B Preferred Stock as to   
dividend distributions and distributions upon the liquidation, winding up or    
dissolution of the Corporation;                                                 

    (e) 'OUTSTANDING', when used with reference to shares of stock, means issued
shares, excluding shares held by the Corporation or a subsidiary;               

(f) 'PARITY STOCK' means the Series A1 Preferred Stock and any class or 
series of stock of the Corporation authorized, the terms of which expressly     
provide that such class or series will rank on a parity with the Series B       
Preferred Stock as to dividend distributions and distributions upon the         
liquidation, winding up or dissolution of the Corporation;                      

(g) 'PERSON' means any corporation, partnership, trust, organization,   
association or other entity or individual;                                      

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    (h) 'PUBLIC OFFERING' means an offering of shares of Common Stock registered
under the Securities Act of 1933, as amended, by the Corporation or one or more 
of its shareholders of at least 15% of the then-outstanding shares of Common    
Stock following which offering shares of Common Stock are listed on any national
securities exchange or authorized for quotation on the Nasdaq National Market   
(or any successor market thereto).                                              

   (i) 'SERIES A PREFERRED STOCK' means, collectively, all series of preferred
stock designated as Series A1, Series A2, Series A3 or any other series         
designated by the words 'Series A' in which the A is immediately followed by any
number;                                                                         

(j) 'TRANSACTION' means a transaction effected through a merger of a    
corporation owned, directly or indirectly, by J. George Mikelsons in which the  
shares of Common Stock (other than shares of Common Stock owned, directly or    
indirectly, by J. George Mikelsons) are converted into the right to receive     
cash.                                                                           

   (k) 'TRANSACTION PRICE' means the amount of cash receivable pursuant to the
Transaction by a holder of one share of Common Stock at the time the Transaction
becomes effective.                                                              

 (l) 'TRANSACTION SPREAD' means the difference between (1) the Transaction
Price and (2) the Conversion Price (as defined in Section 6(d)) in effect on the
Transaction Effective Date (as defined in Section 3). The Transaction Spread    
shall be appropriately adjusted to reflect any stock splits, combinations or    
recapitalizations.                                                              

(m) headings are for convenience of reference only and shall not define,
limit or affect any of the provisions hereof; and                               

(n) references to Sections are to Sections of this Article XII.         

  3. Dividends. The holders of Series B Preferred Stock shall be entitled to
receive, when and if declared by the Board of Directors, but only out of funds  
legally available therefor, cumulative cash dividends at the annual rate of 5.0%
of the Liquidation Amount (as defined below) (the 'DIVIDEND RATE') per share,   
and no more, payable quarterly in equal amounts of 1.25% of the Liquidation     
Amount on the 15th day of December, March, June and September, respectively, in 
each year (or if any such date is not a business day, on the next succeeding    
business day) commencing on December 15, 2000, with respect to the quarterly    
dividend period (or portion thereof) ending on the day preceding such respective
dividend payment date, to holders of record on the respective date, not more    
than 60 nor less than ten days preceding such dividend payment date, fixed for  
such purpose by the Board of Directors in advance of payment of each particular 
dividend. The Dividend Rate shall increase to 5.66% per annum effective on the  
date the Transaction is consummated (the 'TRANSACTION EFFECTIVE DATE') and shall
further increase to 6.5% per annum on the date which is the fourth anniversary  
of the Transaction Effective Date; provided, however, that from and after the   
date on which a Public Offering is consummated the Dividend Rate shall be 5.0%  
per annum. If the Corporation fails to pay any quarterly dividend and such      
failure is not cured within ten days of the date on which the dividend was      
payable, whether or not the funds are legally available therefor, the Dividend  
Rate shall increase as follows: (i) if the Corporation has issued on or prior to
December 31, 2000, any series of Series A Preferred Stock, the Dividend Rate    
shall increase to the highest rate of interest per annum payable on any such    
series of Series A Preferred Stock issued and outstanding on such date, and     
(ii) if the Corporation has not issued on or before December 31, 2000, any      
series of Series A Preferred Stock, the Dividend Rate shall increase to 9.8% per
annum. Following the payment of all accrued and unpaid dividends that have      
become due and payable, the Dividend Rate will revert to the Dividend Rate that 
otherwise would have been in effect on such date. Dividends shall accrue daily  
and shall be payable on the Series B Preferred Stock for any period shorter than
a full quarterly period shall be computed on the basis of a 360-day year        
consisting of twelve 30-day months. Dividends on shares of Series B Preferred   
Stock shall be cumulative from the last dividend payment date, or if no         
dividends have been paid on the outstanding shares of Series B Preferred Stock, 
from the date of issuance, whether or not the Corporation has the funds legally 
available therefor. Accumulations of dividends on outstanding shares of         
Series B Preferred Stock shall bear interest at the rate of 9.5% per annum.     

 So long as any shares of Series B Preferred Stock remain outstanding, the
Corporation may not pay or declare any dividend, nor make any distribution on   
any Junior Stock, other than a dividend payable                                 

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solely in Junior Stock, and shall not purchase, redeem or otherwise acquire for 
consideration, directly or indirectly (other than as a result of a              
reclassification of Junior Stock into Junior Stock, or the exchange or          
conversion of one share of Junior Stock for or into another share of Junior     
Stock, and other than through the use of the proceeds of a substantially        
contemporaneous sale of other shares of Junior Stock), unless (i) all accrued   
and unpaid dividends (including any interest thereon) on all outstanding shares 
of Series B Preferred Stock have been paid in full and the full dividend thereon
for the then current quarterly dividend period shall have been paid or declared 
and set apart for payment and (ii) all prior redemption requirements with       
respect to Series B Preferred Stock shall have been complied with. When         
dividends are not paid in full upon the Series B Preferred Stock and any Parity 
Stock, all dividends declared upon shares of Series B Preferred Stock and all   
Parity Stock shall be declared pro rata so that the amount of dividends declared
per share on the Series B Preferred Stock and all such Parity Stock shall in all
cases bear to each other the same ratio that accrued dividends per share on the 
shares of Series B Preferred Stock and all such Parity Stock bear to each other.
Subject to the foregoing, and not otherwise, such dividends (payable in cash,   
stock or otherwise) as may be determined by the Board of Directors may be       
declared and paid on any Junior Stock from time to time out of any funds legally
available therefor, and the Series B Preferred Stock shall not be entitled to   
participate therein.                                                            

4. Liquidation Rights.                                                  

(a) In the event of any liquidation, dissolution or winding up of the   
Corporation, whether voluntary or involuntary (any such event being a           
'LIQUIDATION TRANSACTION') the Series B Preferred Stock shall rank prior to any 
shares of Junior Stock, so that in the event of any Liquidation Transaction,    
whether voluntary or involuntary, the holders of Series B Preferred Stock shall 
be entitled to receive out of the assets of the Corporation available for       
distribution to its stockholders, whether from capital, surplus or earnings,    
before any distribution is made to holders of Junior Stock, an amount per share 
equal to $100,000 per share (the 'LIQUIDATION AMOUNT') for each outstanding     
share of Series B Preferred Stock, plus an amount equal to all accrued and      
unpaid dividends (including any interest thereon) (such sum being referred to as
the 'LIQUIDATION PREFERENCE' for the Series B Preferred Stock).                 

   (b) If, upon any Liquidation Transaction, the assets of the Corporation, or
proceeds thereof, shall be insufficient to pay the full Liquidation Preference  
to all holders of the Series B Preferred Stock, then such assets, or the        
proceeds thereof, shall be divided and distributed pro rata among the holders of
the Series B Preferred Stock and the holders of any Parity Stock in accordance  
with the aggregate respective liquidation preferences of the Series B Preferred 
Stock and all such Parity Stock.                                                

 (c) After payment shall have been made in full to all holders of Series B
Preferred Stock, as provided in this Section 4, the holders of the Junior Stock 
shall, subject to the respective terms and provisions applying thereto, be      
entitled to receive any and all assets remaining to be paid or distributed, and 
the holders of the shares of Series B Preferred Stock shall not be entitled to  
share therein.                                                                  

5. Redemption and Repurchase.                                           

(a) Change of Control.                                                  

(i) Optional Redemption by the Corporation. If, on or before the third  
anniversary of the initial issuance of the Series B Preferred Stock, any person 
(other than J. George Mikelsons or any person or entity controlled by him)      
acquires or enters into an agreement with the Corporation to acquire capital    
stock of the Corporation representing a majority of the voting power represented
by all outstanding capital stock of the Corporation (such event being referred  
to as a 'CHANGE OF CONTROL'), the Corporation may redeem for cash, in whole at  
any time, all shares of Series B Preferred Stock at the time outstanding, upon  
notice given as hereinafter specified within 30 days following a Change of      
Control, at a redemption price per share equal to the sum of (i) the Liquidation
Amount, (ii) all accrued and unpaid dividends (including any interest thereon)  
to the date of redemption, (iii) a premium equal to 9.5% per annum of the       
Liquidation Amount calculated from the date of issuance of the shares of        
Series B Preferred Stock to the date of redemption and (iv) an additional       
premium equal to the product of (x) the number of shares into which the         
outstanding shares of Series B Preferred Stock are convertible at the Conversion
Price in effect on the date of such repurchase and (y) the Transaction Spread.  

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(ii) Mandatory Repurchase at the Option of the Holder. If a Change of   
Control occurs on or before the third anniversary of the initial issuance of the
Series B Preferred Stock, all but not less than all of the holders of Series B  
Preferred Stock may require the Corporation to repurchase for cash, in whole at 
any time, all shares of Series B Preferred Stock at the time outstanding, upon  
notice given as hereinafter specified within 45 days following a Change of      
Control, at a purchase price ('REPURCHASE PRICE') per share equal to the sum of 
(i) the Liquidation Amount, (ii) all accrued and unpaid dividends (including any
interest thereon) to the date of repurchase, (iii) a premium equal to the       
difference between (x) the amount obtained when the highest dividend rate per   
annum payable on any series of Series A Preferred Stock issued and outstanding  
on the date of repurchase is multiplied by the Liquidation Amount calculated    
from the date of issuance of the shares of Series B Preferred Stock to the date 
of repurchase and (y) 5% per annum of the Liquidation Amount calculated from the
date of issuance of the shares of Series B Preferred Stock to the date of       
repurchase and (iv) an additional premium equal to the product of (x) the number
of shares into which the outstanding shares of Series B Preferred Stock are     
convertible at the Conversion Price in effect on the date of such repurchase and
(y) the Transaction Spread. A notice of mandatory repurchase under this Section 
5(a)(ii) (a 'REPURCHASE NOTICE') may be given to the Corporation at any time    
within the 45 days following a Change of Control, by all but not less than all  
of the holders of Series B Preferred Stock. To be valid, a Repurchase Notice    
must (i) specify a date of repurchase (the 'REPURCHASE DATE') that is a business
day not earlier than 45 days following the date of receipt by the Corporation of
the Repurchase Notice, (ii) be signed by all registered holders of Series B     
Preferred Stock and (iii) be delivered to the Corporation at its corporate      
headquarters to the attention of its Corporate Secretary by first class mail,   
overnight courier or by hand. Once given, a Repurchase Notice will be           
irrevocable. On and after the Repurchase Date, the sole right of the holders of 
Series B Preferred Stock shall be to receive the Repurchase Price without       
interest against delivery of certificates representing Series B Preferred Stock.

 (b) Optional Redemption. On or after the third anniversary of the initial
issuance of the Series B Preferred Stock, the Corporation may redeem for cash,  
in whole at any time, or in part from time to time, the shares of Series B      
Preferred Stock at the time outstanding, upon notice given as hereinafter       
specified, at the redemption price in effect at the redemption date as provided 
in this Section 5. If redeemed during the 12-month period commencing on the     
anniversary date of the initial issuance of Series B Preferred Stock in the     
years set forth below the redemption price shall be the Liquidation Amount plus 
all accrued and unpaid dividends (including any interest thereon) to the date of
redemption plus (i) a premium (expressed as a percentage of the Liquidation     
Amount) as follows:                                                             

                                                                [Download Table]

                                                                   
2003........................................................  3.60%
2004........................................................  3.30%
2005........................................................  3.00%
2006........................................................  2.70%
2007........................................................  2.40%
2008........................................................  2.10%
2009........................................................  1.80%
2010........................................................  1.50%
2011........................................................  1.20%
2012........................................................   .90%
2013........................................................   .60%
2014........................................................   .30%
2015 and thereafter no redemption premium, and                     

   (ii) an additional premium equal to the product of (x) the number of shares
into which the outstanding shares of Series B Preferred Stock to be redeemed are
convertible at the Conversion Price in effect on the date of such optional      
redemption date and (y) the Transaction Spread.                                 

(c) Mandatory Redemption. The Corporation shall redeem any outstanding  
shares of Series B Preferred Stock on the anniversary of the initial issuance of
the Series B Preferred Stock in 2015 for an amount in cash equal to the         
Liquidation Amount plus all accrued and unpaid dividends (including any interest
thereon).                                                                       

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(d) Notice of Redemption. So long as the Series B Preferred Stock is not
registered under the Securities Act of 1933, as amended (the 'SECURITIES ACT'), 
notice of every redemption of Series B Preferred Stock shall be mailed by first 
class mail, postage prepaid, addressed to the holders of record of the shares to
be redeemed at their respective last addresses as they appear on the books of   
the Corporation. If the Corporation registers the outstanding shares of         
Series B Preferred Stock under the Securities Act, then such notice shall be    
made by mail as described in the preceding sentence and, the Corporation shall  
also publish any notice of redemption by means of the Dow Jones News Service or 
such other similar news wire service or newspaper. Such mailing and any such    
publication shall be at least ten days and not more than 45 days prior to the   
date fixed for redemption. Any notice that is mailed or published, as the case  
may be, in the manner herein provided shall be conclusively presumed to have    
been duly given, whether or not the shareholder receives such notice.           
Furthermore, the validity of the proceedings for the redemption of any shares of
Series B Preferred Stock of any shareholder shall not be affected by any defect 
in any notice given to any other shareholder. Such notice shall set forth       

(A) the time and date for the redemption;                               

(B) the number of shares to be redeemed and if less than all shares of  
Series B Preferred Stock held by a holder are to be redeemed, the number of such
holder's shares to be redeemed;                                                 

(C) the redemption price;                                               

(D) the place or places where certificates for the shares are to be     
surrendered for redemption;                                                     

   (E) that dividends on the shares to be redeemed will cease to accrue on the
redemption date (unless the Corporation shall default in redeeming the shares on
the redemption date); and                                                       

 (F) that the right to convert such shares shall terminate at the close of
business on the redemption date.                                                

(e) Redemptions in Part. In case of any redemption of only a part of the
shares of Series B Preferred Stock at the time outstanding, the redemption may  
be pro rata, by lot or by any other method as may be determined by the Board of 
Directors in its sole discretion to be equitable as set forth in a certificate  
of the Secretary or Assistant Secretary of the Corporation filed with the       
transfer agent or agents for the Series B Preferred Stock. The Board of         
Directors shall have full power and authority, subject to the provisions herein 
contained, to prescribe the terms and conditions upon which Series B Preferred  
Stock shall be redeemed from time to time.                                      

(f) Effect of Redemption. If notice of redemption shall have been duly  
given, and if on or before the redemption date specified therein all funds      
necessary for such redemptions shall have been set aside by the Corporation,    
separate and apart from its other funds, in trust for the pro rata benefit of   
the holders of the shares called for redemption, so as to be and continue to be 
available therefor, then, notwithstanding that any certificate for shares so    
called for redemption shall not have been surrendered for cancelation, on and   
after such redemption date, all shares so called for redemption shall no longer 
be deemed outstanding and all rights with respect to such shares shall forthwith
on such redemption date cease and terminate, except only the right of the       
holders thereof to receive the amount payable on redemption thereof, without    
interest. Any funds so deposited and unclaimed at the end of two years from such
redemption date shall, to the extent permitted by law, be released or repaid to 
the Corporation, after which time the holders of the shares so called for       
redemption shall look only to the Corporation for payment thereof. A holder of  
shares of Series B Preferred Stock called for redemption shall be entitled to   
convert such shares in accordance with the provisions of Section 6 up until the 
close of business on the redemption date.                                       

 Any funds so deposited or set aside by the Corporation which shall not be
required for such redemption because of the exercise of any right of conversion 
set forth in Section 6 below subsequent to the date of such deposit shall be    
released or repaid to the Corporation forthwith.                                

6. Conversion. The holders of the Series B Preferred Stock shall have   
conversion rights as follows:                                                   

(a) Right to Convert. On the terms and subject to the conditions of this
Section 6, the holder of a share of Series B Preferred Stock shall have the     
right, at its option, at any time to convert such share into that number of     
shares of fully paid and non-assessable Common Stock (calculated as to each     

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conversion to the nearest 1/100th of a share) obtained by dividing the          
Liquidation Amount, by the Conversion Price (as defined in Section 6(d)) and by 
surrender of such share pursuant to Section 6(b). The shares of Common Stock    
issuable upon such conversion are hereinafter referred to as the 'CONVERSION    
SHARES'. No payment or adjustment shall be made upon any conversion on account  
of any dividends accrued on the shares of Series B Preferred Stock surrendered  
for conversion or on account of any dividends on the Common Stock issued upon   
conversion for which the record date is on or prior to the conversion date.     

   Holders of shares of Series B Preferred Stock at the close of business on a
record date for any payment of declared dividends shall be entitled to receive  
the dividend payable on such shares on the corresponding dividend payment date  
notwithstanding the optional conversion of such shares following such record    
date and prior to the corresponding dividend payment date.                      

 (b) Conversion Procedures. In order to exercise the conversion privilege,
the holder of any shares of the Series B Preferred Stock shall surrender the    
certificate representing such shares at the principal office of the Corporation,
with a written notice stating that such holder elects to convert all or a       
specified whole number of such shares pursuant to this Section 6 and specifying 
the name or names in which such holder wishes the certificate or certificates   
for Conversion Shares to be issued. Unless the Conversion Shares are to be      
issued in the same name as the name in which such shares of Series B Preferred  
Stock are registered, the certificate representing the shares surrendered for   
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the holder or its duly authorized attorney.
As promptly as practicable after such surrender of a certificate for shares of  
the Series B Preferred Stock to be converted, and in any event within five      
business days thereafter, the Corporation shall issue and deliver at such office
to such holder, or on such holder's written order, (i) a certificate or         
certificates for the applicable number of full Conversion Shares, (ii) if less  
than the full number of shares of Series B Preferred Stock evidenced by the     
surrendered certificate is being converted, a new certificate, of like tenor,   
for the number of shares of Series B Preferred Stock evidenced by such          
surrendered certificate less the number of shares being converted and (iii) the 
cash payment in settlement of any fractional Conversion Share as provided in    
Section 6(c). Upon conversion of any shares of Series B Preferred Stock, the    
holder thereof shall be entitled to receive an amount equal to all declared and 
unpaid dividends on such shares.                                                

   In the case of the exercise of the conversion privilege under Section 6(a),
each conversion shall be deemed to have been effected immediately after the     
close of business on the date on which the certificate for shares of Series B   
Preferred Stock to be converted is surrendered and such notice is received by   
the Corporation as aforesaid, and the person or persons in whose name or names  
any certificate or certificates for Conversion Shares are issuable shall be     
deemed to have become the holder or holders of record of such Conversion Shares 
at such time on such date and such conversion shall be at the applicable        
Conversion Price in effect at such time on such date, unless the stock transfer 
books of the Corporation are closed on that date, in which event such person or 
persons shall be deemed to have become such holder or holders of record at the  
close of business on the next day on which such stock transfer books are open   
(provided that if such books shall remain closed for five days, such fifth day  
shall be the date any such person shall become such a holder), but such         
conversion shall be at the Conversion Price in effect on the date on which such 
certificate was surrendered and such notice was received. Upon delivery, all    
Conversion Shares shall be duly authorized, validly issued, fully paid, non-    
assessable, free of all liens and charges and not subject to any preemptive or  
subscription rights.                                                            

(c) Settlement of Fractional Conversion Shares. No fractional Conversion
Shares or scrip representing fractions of Conversion Shares shall be issued upon
conversion of shares of the Series B Preferred Stock. Instead of any fractional 
Conversion Share otherwise deliverable, the Corporation shall pay to the holder 
of the converted shares an amount in cash equal to the Current Market Price (as 
defined below) or, if shares of Common Stock are not authorized for quotation on
the Nasdaq National Market System (the 'NASDAQ') and no Current Market Price can
be determined on such date pursuant to the methods specified in Section 6(e),   
the Valuation Price (as defined in Section 9) of such fractional Conversion     
Share on the date of conversion. If more than one share is surrendered for      
conversion at one time by the same holder, the number of full Conversion Shares 
shall be computed on the basis of the aggregate number of shares so surrendered.
The 'CURRENT MARKET PRICE' per share of                                         

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Common Stock on any day is the average of the high and low sales prices of the  
Corporation's Common Stock on the NASDAQ for the 10 consecutive trading days    
preceding such day rounded up to the nearest whole cent. A 'TRADING DAY' is a   
day on which the principal national securities exchange on which the Common     
Stock is listed or admitted to trading is open for the transaction of business  
or, if the Common Stock is not then listed or admitted to trading on any        
national securities exchange, any day other than Saturday, Sunday or a federal  
holiday.                                                                        

   (d) The 'CONVERSION PRICE' shall be $15.67 and may be adjusted from time to
time pursuant to this Section 6(d). The Conversion Price shall be adjusted from 
time to time as follows:                                                        

   (i) If, after the date of initial issuance of the Series B Preferred Stock,
the Corporation (A) pays a dividend or makes a distribution on the Common Stock 
in shares of Common Stock, (B) subdivides or combines its outstanding shares of 
Common Stock into a greater or smaller number of shares or (C) issues by        
reclassification of the Common Stock any shares of capital stock of the         
Corporation, the Conversion Price in effect immediately prior to such action    
shall be adjusted so that the holder of any share of Series B Preferred Stock   
thereafter surrendered for conversion shall be entitled to receive, at the time 
of such conversion, the number of shares of Common Stock or other capital stock 
of the Corporation that it would have owned or been entitled to receive         
immediately following such action had such share been converted immediately     
prior to such action or the record date therefor, whichever is earlier. Such    
adjustment shall become effective immediately after the record date, in the case
of a dividend or distribution, or immediately after the effective date, in the  
case of a subdivision, combination or reclassification.                         

    (ii) If, after the date of initial issuance of the Series B Preferred Stock,
the Corporation issues any Additional Shares (as defined below) for a           
consideration per share below (x) the closing price as of 4:30 pm on the        
principal market on which the Common Stock is traded on the trading day         
immediately prior to the date on which the Corporation shall have agreed to such
issuance or (y) if shares of Common Stock are not traded on any national        
securities exchange or authorized for quotation on the Nasdaq Stock Market, the 
Valuation Price on the trading day immediately prior to the date on which the   
Corporation shall have agreed to such issuance (with the price determined under 
clause (x) or (y), as applicable, being referred to as the 'CLOSING PRICE'),    
then in each case the Conversion Price shall be adjusted by multiplying the     
Conversion Price in effect immediately prior to such issuance by a fraction,    

    (A) the numerator of which shall be the number of shares of Common Stock and
Share Equivalents (as defined below) outstanding immediately prior to the       
issuance of such Additional Shares plus the number of shares of Common Stock    
that the aggregate consideration for such Additional Shares would purchase at a 
consideration per share equal to such Closing Price, and                        

  (B) the denominator of which shall be the number of shares of Common Stock
and Share Equivalents outstanding immediately prior to the issuance of such     
Additional Shares plus the number of Additional Shares so issued.               

Such adjustment for the Series B Preferred Stock shall become effective         
immediately after the issuance of such Additional Shares.                       

    'ADDITIONAL SHARES' shall mean any shares of Common Stock of the Corporation
issued by the Corporation after the date of issuance of the Series B Preferred  
Stock excluding Permitted Issuances. 'SHARE EQUIVALENTS' shall mean the Common  
Stock deliverable upon conversion or exercise of all outstanding Series B       
Preferred Stock, convertible securities, options, warrants and rights of the    
Corporation as of the date such computation is made and as of the time such     
computation is effective as specified herein.                                   

'PERMITTED ISSUANCES' shall mean:                                       

  (A) any stock options which have been granted and remain unexercised as of
the date of issuance of the Series B Preferred Stock, which shall include any   
such stock options the terms of which have been modified in connection with the 
Transaction;                                                                    

(B) stock options granted and shares issued to employees, directors and 
consultants after the issuance of the Series B Preferred Stock in the aggregate 
amount of 500,000 shares (which number shall be appropriately adjusted to       
reflect any stock splits, combinations or recapitalizations) of Common          

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Stock per annum (commencing with the year 2000) pursuant to the Corporation's   
stock plans, provided that if the aggregate number of stock options granted per 
annum pursuant to the Corporation's stock plans is less than 500,000, 'Permitted
Issuances' shall include that number of stock options equal to the difference   
between 500,000 and the actual number of stock options granted per annum        
pursuant to the Corporation's stock plans, which stock options of Common Stock  
may be granted in subsequent years;                                             

(C) additional options granted and shares issued in an amount equal to  
options granted and shares issued pursuant to the foregoing clauses (A) and (B) 
to the extent such shares are returned to the Corporation's stock plans upon the
lapse of unexercised stock options or the repurchase (at original purchase      
price) of unvested shares;                                                      

(D) any shares issued upon exercise of options granted pursuant to the  
foregoing clauses (A)-(C) including as a result of the operation of anti        
dilution adjustments provided for therein;                                      

(E) any shares issued pursuant to employee stock purchase, savings or   
ownership plans, including all shares issued to a trust formed in respect       
thereof;                                                                        

(F) any shares issued upon conversion of the Series B Preferred Stock   
(including adjustments to the conversion ratio), any stock options granted and  
shares issued upon the exercise thereof approved by the holders of a majority of
the Series B Preferred Stock, and any shares issued to the holders of the Series
B Preferred Stock in connection with any contractual rights related to such     
approved shares or options; and                                                 

 (G) any shares issued pursuant to the exercise, conversion or exchange of
other securities.                                                               

   (iii) If after the date of initial issuance of the Series B Preferred Stock
the Corporation issues any warrants, options or other rights entitling the      
holders thereof to subscribe for or purchase either any Additional Shares or    
evidences of debt, shares of capital stock or other securities that are         
convertible into or exchangeable for, with or without payment of additional     
consideration, Additional Shares (such warrants, options or other rights being  
called 'RIGHTS' and such convertible or exchangeable evidences of debt, shares  
of capital stock or other securities being called 'CONVERTIBLE SECURITIES'), and
the consideration per share for which Additional Shares may at any time         
thereafter be issuable pursuant to such Rights or Convertible Securities (when  
added to the consideration per share of Common Stock, if any, received for such 
Rights or Convertible Securities) is less than the Conversion Price then in     
effect, the Conversion Price shall be adjusted as provided in Section 6(d)(ii)  
on the basis that,                                                              

 (A) the maximum number of Additional Shares issuable pursuant to all such
Rights or necessary to effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued, and                             

 (B) the aggregate consideration (plus the consideration, if any, received
for such Rights and Convertible Securities) for such maximum number of          
Additional Shares shall be deemed to be the consideration received and          
receivable by the Corporation for the issuance of such Additional Shares        
pursuant to such Rights or Convertible Securities.                              

No adjustment of the Conversion Price shall be made under this Section  
6(d)(iii) upon (x) the issuance of any Convertible Securities issued pursuant to
the exercise of any Rights, to the extent that such adjustment was previously   
made upon the issuance of such Rights pursuant to Section 6(d)(iii) or (y) the  
granting of any stock options that qualify as Permitted Issuances under clause  
(B) or (C) of the definition thereof.                                           

   (iv) For purposes of Section 6(d)(iii), the relevant Conversion Price shall
be the Conversion Price in effect immediately prior to the earlier of (A) the   
record date for the holders of Common Stock entitled to receive the Rights or   
Convertible Securities and (B) the initial issuance of the Rights or Convertible
Securities, and the adjustment provided for in either such Section shall become 
effective immediately after the earlier of the times specified in clauses (A)   
and (B).                                                                        

(v) No adjustment of the Conversion Price shall be made under Section   
6(d)(ii) upon the issuance of any Additional Shares pursuant to the exercise of 
any Rights or any conversion or exchange rights pursuant to any Convertible     
Securities, if such adjustment was previously made in connection with the       
issuance of such Rights or Convertible Securities (or in connection with the    
issuance of any Rights therefor) pursuant to Section 6(d)(iii).                 

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   (vi) If any Rights or Convertible Securities (or any portions thereof) that
gave rise to an adjustment pursuant to Section 6(d)(iii) expire or terminate    
without the exercise thereof and/or if by reason of the provisions of such      
Rights or Convertible Securities there has been any increase, with the passage  
of time or otherwise, in the consideration payable upon the exercise thereof,   
the Conversion Price shall be readjusted (but to no greater extent than         
originally adjusted) on the basis of,                                           

    (A) eliminating from the computation Additional Shares corresponding to such
expired or terminated Rights or conversion or exchange rights,                  

(B) treating the Additional Shares, if any, actually issued or issuable 
pursuant to the previous exercise of such Rights or conversion or exchange      
rights as having been issued for the consideration actually received and        
receivable therefor, and                                                        

 (C) treating any such Rights or conversion or exchange rights that remain
outstanding as being subject to exercise on the basis of the consideration      
payable upon the exercise or conversion thereof as is in effect at such time,   

provided, however, that any consideration actually received by the Corporation  
in connection with the issuance of such Rights shall form part of the           
readjustment computation even though such Rights expired without being          
exercised. The Conversion Price shall be adjusted as provided in Section        
6(d)(ii) and any applicable provisions of Section 6(d)(iii) as a result of any  
increase in the number of Additional Shares issuable, or any decrease in the    
consideration payable upon any issuance of Additional Shares, pursuant to any   
anti dilution provisions of any Rights or Convertible Securities.               

(vii) (A) If any Additional Shares, Convertible Securities or Rights are
issued for cash, the consideration received therefor shall be deemed to be the  
amount of cash received.                                                        

  (B) If any Additional Shares, Convertible Securities or Rights are offered
by the Corporation for subscription, the consideration received therefor shall  
be deemed to be the subscription price.                                         

  (C) If any Additional Shares, Convertible Securities or Rights are sold to
underwriters or dealers for public offering without a subscription offering, the
consideration received therefor shall be deemed to be the public offering price.

    (D) In any case covered by Section 6(d)(vii) (A), (B) or (C), in determining
the amount of any consideration received by the Corporation in whole or in part 
other than in cash, the amount of such consideration shall be deemed to be the  
fair market value of such consideration as determined in good faith by the Board
of Directors, and evidence of such determination shall be filed with the minutes
of the Corporation. If Additional Shares are issued as part of a unit with      
Rights, the consideration received for the Rights shall be deemed to be the     
portion of the consideration received for such unit determined in good faith at 
the time of issuance by the Board of Directors, and evidence of such            
determination shall be filed with the minutes of the Corporation. If the Board  
of Directors does not make any such determination, the consideration received   
for the Rights shall be deemed to be zero. In either event, the consideration   
received for the Additional Shares shall be deemed to be the consideration      
received for such unit less the consideration deemed to have been received for  
the Rights.                                                                     

(E) In any case covered by Section 6(d)(vii) (A), (B), (C) or (D), in   
determining the amount of consideration received by the Corporation, (I) any    
amounts received or receivable for accrued interest or accrued dividends shall  
be excluded and (II) any compensation, underwriting commissions or concessions  
or expenses paid or incurred in connection therewith shall not be deducted.     

(F) In any case covered by Section 6(d)(vii) (A), (B), (C) or (D), there
shall be added to the consideration received by the Corporation at the time of  
issuance or sale (I) the minimum aggregate amount of additional consideration   
payable to the Corporation upon the exercise of Rights that relate to           
Convertible Securities and (II) the minimum aggregate amount of consideration   
payable upon the conversion or exchange thereof.                                

    (G) If any Additional Shares, Convertible Securities or Rights are issued in
connection with any merger, consolidation or other reorganization in which the  
Corporation is the surviving corporation, the amount of consideration received  
therefor shall be deemed to be the fair market value, as determined in good     
faith by the Board, of such portion of the assets and business of the           
non-surviving person or persons as the Board of Directors determines in good    
faith to be attributable to such Additional Shares,                             

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Convertible Securities or Rights, and evidence of such determination shall be   
filed with the minutes of the Corporation.                                      

(viii) If the Corporation effects any merger, consolidation or other    
reorganization to which the Corporation is a party (other than (x) a merger or  
consolidation in which the Company is the surviving or continuing corporation   
and in which each share of Common Stock outstanding immediately prior to the    
merger or consolidation remains unchanged in all material respects and (y) the  
Transaction), any sale or conveyance to another person of all or substantially  
all the assets of the Corporation or any statutory exchange of securities with  
another person (including any exchange effected in connection with a merger of a
third person into the Corporation), then effective provision shall be made in   
such transaction so that the holder of each share of Series B Preferred Stock   
then outstanding shall have the right thereafter to convert such share into the 
kind and amount of consideration receivable pursuant to such transaction by a   
holder of the number of shares of Common Stock into which such share of Series B
Preferred Stock might have been converted immediately prior to such transaction,
assuming such holder of Common Stock failed to exercise its rights of election, 
if any, as to the kind or amount of consideration receivable upon such          
transaction (provided that if the kind or amount of consideration receivable    
pursuant to such transaction is not the same for each share of Common Stock in  
respect of which such rights of election shall not have been exercised          
('NON-ELECTING SHARE'), then, for purposes of this Section 6(d)(viii), the kind 
and amount of consideration receivable pursuant to such transaction for each    
non-electing share shall be deemed to be the kind and amount so receivable per  
share by a plurality of the non-electing shares). Thereafter, the holders of    
shares of Series B Preferred Stock shall be entitled to appropriate adjustments 
with respect to their conversion rights to the end that the provisions set forth
in this Section 6 shall correspondingly be made applicable, as nearly as may    
reasonably be, to any consideration thereafter deliverable on conversion of     
shares of the Series B Preferred Stock. Notwithstanding the foregoing, this     
Section 6(d)(viii) shall not apply with regard to the Series B Preferred Stock  
to an event which is treated as a liquidation, dissolution or winding-up of the 
Corporation with respect to such series pursuant to Section 4.                  

   (ix) If the Corporation distributes generally to holders of its outstanding
shares of Common Stock, evidences of its debt, securities or other assets       
(excluding any cash dividends if the annualized per share amount thereof does   
not exceed 9.0% of the Current Market Price or, if shares of Common Stock are   
not traded on the NASDAQ and no Current Market Price can be determined on such  
date pursuant to the methods specified in Section 6(e), the Valuation Price as  
of the trading day immediately preceding the date of declaration of such        
dividend and excluding any dividends or distributions payable in Rights or      
Convertible Securities for which adjustment is otherwise made pursuant to this  
Section 6(d)), the Conversion Price shall be adjusted by multiplying such       
Conversion Price in effect immediately prior to the record date for the dividend
or distribution by a fraction of which (x) the numerator shall be the Current   
Market Price or, if shares of Common Stock are not traded on the NASDAQ and no  
Current Market Price can be determined on such date pursuant to the methods     
specified in Section 6(e), the Valuation Price on such record date less the then
fair market value, as determined in good faith by the Board, of the portion of  
the evidences of debt, securities or other assets so distributed or applicable  
to the holder of one share of Common Stock and (y) the denominator shall be the 
Current Market Price or, if shares of Common Stock are not traded on the NASDAQ 
and no Current Market Price can be determined on such date pursuant to the      
methods specified in Section 6(e), the Valuation Price on such record date. Such
adjustment shall become effective immediately after the record date for such    
dividend or distribution.                                                       

(x) No adjustment in the Conversion Price shall be required to be made  
unless it would require an increase or decrease of at least one cent, but any   
adjustments not made because of this Section 6(d)(x) shall be carried forward   
and taken into account in any subsequent adjustment otherwise required. All     
calculations under this Section 6(d) shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be. All adjustments with respect to 
a transaction or event shall apply to subsequent such transactions and events.  
Anything in this Section 6(d) to the contrary notwithstanding, the Board of     
Directors shall be entitled (but shall not be obligated) to make such           
irrevocable reduction in the Conversion Price, in addition to the adjustments   
required by this Section 6(d), as in its discretion it shall determine to be    
advisable in order to avoid or diminish any income deemed to be received for    
United States Federal income tax purposes by any holder of shares of Common     
Stock or Series B                                                               

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Preferred Stock resulting from any event or occurrence giving rise to an        
adjustment pursuant to this Section 6(d) or from any similar event or           
occurrence, and evidence of the Board of Director's determination of such       
adjustment shall be filed with the minutes of the Corporation.                  

(xi) Whenever the Conversion Price is adjusted pursuant to this Section 
6(d),                                                                           

   (A) the Corporation shall promptly file with the minutes of the Corporation
a certificate of the Corporation's chief accounting officer setting forth such  
Conversion Price (and any change in the kind or amount of consideration to be   
received by the holders of shares of the Series B Preferred Stock upon          
conversion) after such adjustment and setting forth a brief statement of the    
facts requiring such adjustment and the manner of computing the same, and       

  (B) a notice stating that such Conversion Price has been adjusted, stating
the effective date of such adjustment and enclosing such certificate shall      
forthwith be mailed by the Corporation to the holders of shares of the Series B 
Preferred Stock at their addresses as shown on the stock books of the           
corporation.                                                                    

 (xii) If as a result of any adjustment pursuant to this Section 6(d), the
holder of any share of Series B Preferred Stock surrendered for conversion      
becomes entitled to receive any consideration other than Common Stock,          

  (A) the Conversion Price with respect to such other consideration shall be
subject to adjustment from time to time in a manner and on terms as nearly      
equivalent as practicable to the provisions with respect to Common Stock        
contained in this Section 6(d), and                                             

  (B) in the case such consideration shall consist of shares of Common Stock
and some other kind of consideration or of two or more kinds of consideration,  
the Board shall determine in good faith the fair allocation of the adjusted     
Conversion Price between or among such types of consideration, and evidence of  
such determination shall be filed with the minutes of the corporation.          

  (e) Alternate Sources for Common Stock Share Prices. If for any reason the
Common Stock is no longer reported on NASDAQ or a national securities exchange  
then the high and low price of a share of Common Stock on the relevant day for  
purposes of calculating the Current Market Price shall be determined on the     
basis of the last reported sale price, regular way, of the Common Stock as      
reported on the composite tape, or similar reporting system, for issues listed  
or admitted to trading on the principal national securities exchange on which   
the Common Stock is then listed or admitted to trading or, if there is no such  
reported sale on the day in question, on the basis of the average of the high   
and low bid and asked quotations as so reported or, if the Common Stock is not  
then listed or admitted to trading on any national securities exchange or on    
NASDAQ, on the basis of the average of the high bid and low asked quotations on 
the day in question in the over-the-counter market as reported by the National  
Association of Securities Dealers Automated Quotation System, or, if not so     
quoted, as reported by National Quotation Bureau, Incorporated, or a similar    
organization.                                                                   

    (f) Specified Events. For purposes of this Section 6(f), a 'SPECIFIED EVENT'
shall occur if (i) the Corporation authorizes the granting to the holders of the
Common Stock of any Rights or of any other rights, (ii) there is any capital    
stock reorganization or reclassification of the Common Stock (other than (x) a  
subdivision or combination of the outstanding Common Stock and other than a     
change in the par value of the Common Stock and (y) the Transaction), or any    
merger, consolidation or other reorganization to which the Corporation is a     
party, or any statutory exchange of securities with another person and for which
approval of any stockholders of the Corporation is required, or any sale or     
transfer of all or substantially all the assets of the Corporation or           
(iii) there is a voluntary liquidation, dissolution or winding up of the        
Corporation. If a Specified Event occurs, the Corporation shall cause to be     
filed with the minutes of the Corporation, and shall cause to be mailed to the  
holders of shares of the Series B Preferred Stock at their addresses as shown on
the stock books of the Corporation, at least 10 days prior to the applicable    
date specified below, a notice stating,                                         

(A) the date on which a record is to be taken for the purpose of any    
distribution or Rights relating to such Specified Event or, if a record is not  
to be taken, the date as of which the holders of Common Stock of record to be   
entitled to such distribution or Rights are to be determined, or                

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  (B) the date on which the reorganization, reclassification, consolidation,
merger, statutory exchange, sale, transfer, dissolution, liquidation or         
winding-up relating to such Specified Event is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or other    
property deliverable upon such Specified Event.                                 

   (g) Reservation of Common Stock. The Corporation shall at all times reserve
and keep available, free from preemptive and subscription rights, out of its    
authorized but unissued shares of Common Stock, for the purpose of effecting    
conversions of the Series B Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series B     
Preferred Stock not theretofore converted. For this purpose, the number of      
shares of Common Stock deliverable upon the conversion of all outstanding shares
of Series B Preferred Stock shall be computed as if at the time of computation  
all such outstanding shares were held by a single holder.                       

 (h) Listing. With respect to any securities required to be delivered upon
conversion of the Series B Preferred Stock, the Corporation shall use all       
commercially reasonable efforts to list or have approved for quotation such     
securities prior to such delivery upon each securities exchange or automated    
quotation system, if any, on which any securities of such class are already     
listed or approved for quotation.                                               

   (i) Taxes. The Corporation shall pay all documentary stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of securities on  
conversion of the Series B Preferred Stock; provided, however, that (i) the     
Corporation shall not be required to pay any tax payable in respect of any      
transfer involved in the issue or delivery of securities in a name other than   
that of the holder of the shares of Series B Preferred Stock, to be converted   
and (ii) no such issue or delivery shall be made unless and until such holder   
has paid to the Corporation the amount of any such tax or has established, to   
the satisfaction of the Corporation, that such tax has been paid or provided    
for.                                                                            

   (j) Termination of Conversion Rights. (i) (A) If shares of Common Stock are
traded on the NASDAQ or a Current Market Price can be determined pursuant to the
methods specified in Section 6(e) and if within any period of 30 consecutive    
trading days for a period of at least 20 trading days (which 20 days must       
include the last day of the 30 consecutive trading day period), the average of  
the high and low sales prices of the Corporation's Common Stock on the principal
market on which such shares trade for such 20 trading days rounded up to the    
nearest whole cent (the 'AVERAGE DAILY TRADING PRICE') exceeds 120% of the      
Conversion Price then in effect or (B) if shares of Common Stock are not traded 
on the NASDAQ and no Current Market Price can be determined on such date        
pursuant to the methods specified in Section 6(e), the Valuation Price exceeds  
105% of the Transaction Price, at its option and in its sole discretion upon    
notice given as set forth below, the Corporation may terminate the conversion   
rights set forth in this Section 6; provided, however, that the Corporation     
shall not be permitted to exercise its right to terminate the conversion rights 
of the Series B Preferred Stock for a period of 12 months following the         
Transaction Effective Date. Beginning on the 10th day following receipt from the
Corporation of the notice setting forth its intention to terminate the          
conversion rights and ending on the 45th day after receipt thereof, the         
Corporation shall be required to redeem any shares of Series B Preferred Stock  
at a redemption price equal to (i) if shares of Common Stock are traded on the  
NASDAQ or a Current Market Price on such date can be determined pursuant to the 
methods specified in Section 6(e), (x) if prior to the third anniversary of the 
initial issuance of the Series B Preferred Stock, the Liquidation Amount plus   
all accrued and unpaid dividends or (y) if on or after the third anniversary of 
the initial issuance of the Series B Preferred Stock, the Redemption Price then 
in effect as set forth in Section 5(b), or (ii) if shares of Common Stock are   
not traded on the NASDAQ and no Current Market Price can be determined on such  
date pursuant to the methods specified in Section 6(e), the Liquidation Amount  
plus the product of (A) the difference between (x) the Valuation Price and      
(y) the Conversion Price and (B) the number of shares of Common Stock that would
have been issuable upon conversion of the outstanding shares of Series B        
Preferred Stock, of any holder that so requests, which request must be received 
by the Corporation on or prior to the 45th day after such holder receives the   
notice of the conversion termination. In order to exercise this right, such     
holder must submit its request to the Corporation in the manner set forth in the
notice of conversion termination, the certificates for the shares to be so      
redeemed and the number of shares to be                                         

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redeemed if less than the number represented by the certificate and the name in 
which to issue any such shares not so redeemed, if different from the holder.   
Following the 45th day after the holders receive the conversion termination     
notice, the conversion rights for all outstanding shares of Series B Preferred  
Stock shall terminate with no further action by the Corporation. For purposes of
this paragraph, a holder shall be deemed to have received notice, if such notice
is sent by facsimile to a facsimile number provided by such party for such      
purpose, on the day it is so sent. If sent by first class mail, postage prepaid,
addressed to such holder at the last address for such holder that appears on the
books of the Corporation, notice shall be deemed to have been received on the   
third business day after such notice has been mailed. If notice is also required
to be published as set forth in paragraph (ii) below, notice shall be deemed to 
have been received on the day that it is so published.                          

(ii) So long as the Series B Preferred Stock is not registered under the
Securities Act, notice of the termination of conversion rights shall be mailed  
by first class mail, postage prepaid, addressed to the holders of record of the 
Series B Preferred Stock at their respective last addresses as they appear on   
the books of the Corporation and may be provided by facsimile to any number     
provided by the holder for that purpose. If the Corporation registers the       
outstanding shares of Series B Preferred Stock under the Securities Act, then   
such notice shall be given by mail as described in the preceding sentence and   
the Corporation shall also publish any such notice as set forth in Section 5(c) 
hereof. The notice shall set forth:                                             

  (A) the Average Daily Trading Price for the 20 trading days in question or
the applicable Valuation Price, as applicable, the dates for which such amounts 
are presented, the Conversion Price then in effect for each such time period and
the percentage by which the Current Market Price, if applicable, exceeds such   
Conversion Price;                                                               

(B) the redemption price then in effect;                                

(C) the place or places where certificates for the shares are to be     
surrendered for redemption; and                                                 

   (D) that dividends on the shares to be redeemed will cease to accrue on the
date the holder delivers any shares to the Corporation for redemption (unless   
the Corporation shall default in redeeming the shares on the redemption date).  

  7. Status of Shares. Upon any redemption, repurchase, conversion, exchange
or other acquisition by the Corporation of shares of Series B Preferred Stock,  
the shares of Series B Preferred Stock, so redeemed, repurchased, converted,    
exchanged or acquired shall be retired and canceled and shall not be available  
for reissuance.                                                                 

   8. Voting Rights. (a) The holders of shares of the Series B Preferred Stock
shall not have the right to vote on or consent to any matter as shareholders of 
the Corporation, except as required by applicable law or as otherwise provided  
below. All matters on which the holders of the Series B Preferred Stock have the
right to vote may be approved at an annual or special meeting by holders of the 
minimum number of shares of Series B Preferred Stock that would be required to  
approve a matter if all shares were present and voting at a meeting called to   
consider such matter or may be approved by one or more written consents signed  
by all of the holders of shares of Series B Preferred Stock.                    

   (b) The consent of holders of at least a majority of the outstanding shares
of Series B Preferred Stock (voting separately as a class but excluding from any
calculation any shares of Series B Preferred Stock held by the Corporation or   
any subsidiary thereof) shall be necessary to amend, alter or repeal any of the 
provisions of this Article XII of the Articles of Incorporation of the          
Corporation which would adversely affect the powers, preferences or rights of   
the holders of shares of Series B Preferred Stock then outstanding.             

   (c) If at any time the equivalent of six quarterly dividends payable on the
outstanding shares of Series B Preferred Stock are accrued and unpaid, whether  
or not consecutive and whether or not declared, the holders of all outstanding  
shares of Series B Preferred Stock, voting as a single class, together with the 
holders entitled to vote of each series of Series A Preferred Stock and the     
holders entitled to vote of all other series of Preferred Stock of the          
Corporation that rank pari passu with or senior to the Series B Preferred Stock 
and have similar voting rights, shall be entitled to elect at the next annual   
meeting of shareholders of the Corporation 25% of the directors to the          
Corporation's Board of Directors, but no less than two directors (or such       
greater number as shall be provided in any                                      

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other series of Preferred Stock that shall at the time be entitled to vote with 
the Series B Preferred Stock to elect directors). The proportion of the total   
vote of all holders of Preferred Stock entitled to vote for such directors      
attributable to the holders of the Series B Preferred Stock shall be based on   
the percentage the aggregate Liquidation Amount for all outstanding shares of   
Series B Preferred Stock bears to the aggregate liquidation amounts of all other
shares of Preferred Stock entitled to vote. Such directors shall serve until all
accumulated and unpaid dividends have been paid or declared and funds sufficient
for their payment have been set aside therefor.                                 

(d) For the avoidance of doubt, except as otherwise set forth in this   
Section 8 or as required by law, the holders of the Series B Preferred Stock    
shall not have the right to vote or consent with respect to (i) the increase or 
decrease in the amount of authorized capital stock of any class or series, other
than increases or decreases in Series B Preferred Stock (to the extent specified
elsewhere herein), (ii) the authorization, creation (by way of reclassification 
or otherwise) or issuance by the Board of Directors of any series of Preferred  
Stock, other than any series that will rank senior to the Series B Preferred    
Stock as to dividend distributions and distributions upon the liquidation,      
winding up or dissolution of the Corporation or any obligation or security      
convertible into or exercisable for or exchangeable into or evidencing a right  
to purchase, shares of any series of Preferred Stock or the issuance by the     
Board of Directors of any previously authorized class of capital stock of the   
Corporation, or (iii) any merger, acquisition, disposition or share exchange    
involving the Corporation where no shareholder vote is otherwise required or    
pursuant to which the holders of the Series B Preferred Stock receive cash at   
least equal to the Liquidation Amount.                                          

(e) The consent of the holders of at least a majority of the outstanding
shares of Series B Preferred Stock (voting separately as a class, but excluding 
from any calculation any shares of Series B Preferred Stock held by the         
Corporation or any subsidiary thereof) shall be necessary to increase the       
authorized number of shares of Series B Preferred Stock and to authorize, create
or issue any series of Preferred Stock that will rank senior to the Series B    
Preferred Stock as to dividend distributions, and distributions upon the        
liquidation, winding up or dissolution of the Corporation.                      

    9. Valuation Procedures. (a) From time to time as a majority of the Board of
Directors of the Corporation shall determine, in good faith, which determination
shall be set forth in written resolutions, and in any event, not less than once 
a year, the Corporation shall select in good faith and engage, at its own       
expense, an independent, nationally recognized appraiser, investment bank,      
accounting firm or consulting firm (the 'APPRAISER') to undertake a valuation of
the Corporation as of the date of the most recently ended fiscal quarter (a     
'VALUATION'). The Corporation shall permit the Appraiser, upon reasonable       
request, access to its properties and facilities to allow the Appraiser the     
opportunity to make an inspection thereof. The Corporation shall make available 
to the Appraiser all such financial information, documents and records of the   
Corporation as the Appraiser may reasonably request for the purpose of          
conducting a Valuation. The Corporation shall request that the Appraiser use its
reasonable efforts to complete a Valuation within 30 days following the date on 
which it was engaged to undertake such Valuation. The Corporation shall also    
instruct the Appraiser that it is to produce a report setting forth in          
reasonable detail a Valuation and the methodology by which the Appraiser arrived
at such Valuation. The Corporation shall provide a copy of such report to each  
holder of shares of Series B Preferred Stock.                                   

 (b) The Corporation shall instruct the Appraiser to take into account the
following factors, among others, in arriving at a Valuation:                    

   (i) a Valuation shall be a valuation of the Corporation as an entirety and,
unless the Corporation shall have informed the Appraiser of plans to the        
contrary, shall assume that the Corporation will continue to operate as a going 
concern for the foreseeable future;                                             

 (ii) the Appraiser shall consider the most recent budgets and projections
prepared by the Company's management;                                           

  (iii) a Valuation shall not reflect any discount for minority interests or
disparate voting rights among classes of the Corporation's Capital Stock; and   

(iv) the Appraiser shall consider, to the extent it deems appropriate,  
market valuations of comparable airlines.                                       

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  (c) The Appraiser shall derive a price per share of Common Stock from each
Valuation, which shall be based on the number of shares of Common Stock         
outstanding on the date of such Valuation. Such price per share, as in effect   
from time to time, is referred to herein as the 'VALUATION PRICE'.              

    (d) Notwithstanding the foregoing, the Company shall be required to obtain a
Valuation as of the date its most recently ended fiscal quarter for purposes of 
determining the Valuation Price applicable to Sections 6(d)(ii), 6(d)(ix) and   
6(j) hereof.                                                                    

ARTICLE II

The foregoing amendment was adopted on [                ], 2001.        

ARTICLE III 
MANNER OF ADOPTION AND VOTE 

As of [                ], 2001,(1) there were [       ] shares of Common
Stock, without par value, outstanding entitled to cast [      ] votes and       
[      ] such votes were represented at the meeting at which the foregoing      
amendment was voted upon. Holders of shares of Common Stock cast [      ] votes 
in favor of the foregoing amendment and [      ] votes against the foregoing    
amendment.                                                                      

   As of [                ], 2001, there were 300 shares of Series B Preferred
Stock, without par value, outstanding entitled to cast 300 votes and 300 such   
votes were represented at the meeting at which the foregoing amendment was voted
upon. Holders of shares of Series B Preferred Stock cast 300 votes in favor of  
the foregoing amendment and 0 votes against the foregoing amendment.            

ARTICLE IV
COMPLIANCE WITH LEGAL REQUIREMENTS

The manner of the adoption of the Articles of Amendment and the vote by 
which they were adopted constitute full legal compliance with the provisions of 
the Act, the Articles of Incorporation, and the Bylaws of the Corporation.      

    IN WITNESS WHEREOF, the undersigned Corporation has caused these Articles of
Amendment to be signed and verified by a duly authorized officer, acting for and
on behalf of such Corporation; and the undersigned verifies subject to the      
penalties of perjury that the facts contained herein are true this [  ]th day of
[                ], 2001.                                                       

                 AMTRAN, INC.,

      BY
                                              ..................................

               NAME:
                TITLE:

---------                                                                       
(1) The date of the Special Meeting.                                            

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                                                                         ANNEX C

FORM OF OPINION OF DRESDNER KLEINWORT WASSERSTEIN, INC. 

                                                              [          ], 2001

The Special Committee of the Board of Directors                                 
Amtran, Inc.                                                                    
7337 West Washington Street                                                     
Indianapolis, Indiana 46231                                                     

The Special Committee:                                                          

You have asked us to advise you with respect to the fairness, from a    
financial point of view, to the shareholders of Amtran, Inc. (the 'Company')    
other than J. George Mikelsons and his affiliates (J. George Mikelsons and such 
affiliates are referred to herein as 'JGM' and such shareholders other than JGM 
are collectively referred to herein as the 'Public Shareholders') of the        
consideration to be received by such Public Shareholders pursuant to the terms  
of the Agreement and Plan of Merger, dated as of June 18, 2001 (the 'Merger     
Agreement'), by and between the Company and INDUS Acquisition Company ('Sub').  
The Merger Agreement provides for, among other things, the merger of Sub with   
and into the Company (the 'Merger') pursuant to which each outstanding share of 
common stock, without par value (the 'Shares'), of the Company held by the      
Public Shareholders (other than any such shares owned by the Company, Sub or any
other affiliate of JGM other than persons who are deemed to be affiliates of    
Mikelsons by reason of their position as an officer or director of Amtran) will 
be converted into the right to receive $23.00 per Share, net to the seller in   
cash. The terms and conditions of the Merger are set forth in more detail in the
Merger Agreement.                                                               

 In connection with rendering our opinion, we have reviewed a draft of the
Merger Agreement, and for purposes hereof, we have assumed that the final form  
of the Merger Agreement will not differ in any material respect from the draft  
provided to us. We have also reviewed and analyzed certain publicly available   
business and financial information relating to the Company for recent years and 
interim periods to date, as well as certain internal financial and operating    
information, including financial forecasts, analyses and projections prepared by
or on behalf of the Company and provided to us for purposes of our analysis, and
we have met with management of the Company to review and discuss such           
information and, among other matters, the Company's business, operations,       
assets, financial condition and future prospects.                               

We have reviewed and considered certain financial and stock market data 
relating to the Company, and we have compared that data with similar data for   
certain other companies, the securities of which are publicly traded, that we   
believe may be relevant or comparable in certain respects to the Company or one 
or more of its businesses or assets, and we have reviewed and considered the    
financial terms of certain recent acquisitions and business combination         
transactions in the airline industry specifically, and in other industries      
generally, that we believe to be reasonably comparable to the Merger or         
otherwise relevant to our inquiry. We have also performed such other financial  
studies, analyses, and investigations and reviewed such other information as we 
considered appropriate for purposes of this opinion.                            

  In our review and analysis and in formulating our opinion, we have assumed
and relied upon the accuracy and completeness of all of the historical financial
and other information provided to or discussed with us or publicly available,   
and we have not assumed any responsibility for independent verification of any  
of such information. We have also assumed and relied upon the reasonableness and
accuracy of the financial projections, forecasts and analyses provided to us,   
and we have assumed that such projections, forecasts and analyses were          
reasonably prepared in good faith and on bases reflecting the best currently    
available judgments and estimates of the Company's management. We express no    
opinion with respect to such projections, forecasts and analyses or the         
assumptions upon which they are based. In addition, we have not reviewed any of 
the books and records of the Company, or assumed any responsibility for         
conducting a physical inspection of the                                         

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properties or facilities of the Company, or for making or obtaining an          
independent valuation or appraisal of the assets or liabilities of the Company, 
and no such independent valuation or appraisal was provided to us. We also have 
assumed that the transactions described in the Merger Agreement will be         
consummated without waiver or modification of any of the material terms or      
conditions contained therein by any party thereto. Our opinion is necessarily   
based on economic and market conditions and other circumstances as they exist   
and can be evaluated by us as of the date hereof.                               

   JGM owns a majority of the outstanding Shares, and you have advised us that
representatives of JGM have informed you, and we have assumed for purposes      
hereof, that JGM is not prepared to consider offers for or to sell its Shares.  
Accordingly, in the context of our engagement, we were not authorized to and did
not solicit third party indications of interest in acquiring all or any part of 
the Company or its assets, or pursued any alternative transactions which may be 
available to the Company. We express no opinion with respect to the values which
may have been obtained for the Company in a sale to a third party following an  
auction process.                                                                

   We are acting as financial advisor to the Special Committee of the Board of
Directors of the Company (the 'Special Committee') in connection with the       
proposed Merger and will receive a fee for rendering this opinion.              

  In the ordinary course of our business, we may actively trade the debt and
equity securities of the Company for our own account and for the accounts of    
customers and, accordingly, may at any time hold a long or short position in    
such securities in accordance with our normal compliance procedures.            

 Our opinion addresses only the fairness from a financial point of view to
the shareholders of the $23.00 per Share cash consideration to be received by   
the Public Shareholders pursuant to the Merger, and we do not express any views 
on any other terms of the Merger. Specifically, our opinion does not address the
Company's underlying business decision to effect the transactions contemplated  
by the Merger Agreement. In addition, our opinion does not address the solvency 
of the Company following consummation of the Merger, or at any time, nor do we  
address issues regarding fraudulent conveyance or fraudulent transfer, and you  
have advised us that the Company has arranged to receive an opinion with respect
to all of such matters from Houlihan, Lokey, Howard and Zukin.                  

   It is understood that this letter is for the benefit and use of the Special
Committee in its consideration of the Merger, and except for its inclusion in   
its entirety, and its description, in any proxy statement required to be        
circulated to shareholders of the Company relating to the Merger, may not be    
used for any other purpose or reproduced, disseminated, quoted or referred to at
any time, in any manner or for any purpose without our prior written consent.   
This opinion does not constitute a recommendation to any shareholder or as to   
how such holder should vote with respect to the Merger, and should not be relied
upon by any shareholder as such.                                                

  Based upon and subject to the foregoing, including the various assumptions
and limitations set forth herein, it is our opinion that as of the date hereof, 
the $23.00 per Share cash consideration to be received by the Public            
Shareholders pursuant to the Merger is fair to such Public Shareholders from a  
financial point of view.                                                        

                     Very truly yours,

                                        DRESDNER KLEINWORT WASSERSTEIN, INC.

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                                                                         ANNEX D

AUDIT COMMITTEE CHARTER 

APPROVED -- 5/9/2000

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MISSION STATEMENT:                                                              

The Amtran, Inc. Audit Committee will assist the Board of Directors in  
fulfilling its corporate oversight responsibilities. To fulfill this mission,   
the Audit Committee will review the Amtran, Inc. financial reporting process,   
the system of internal controls, the internal and external audit process and    
Amtran, Inc.'s process for monitoring compliance with laws and regulations as   
well as compliance with the company's corporate code of ethics. In performing   
its duties, the committee will maintain effective working relationships with the
Board of Directors, management, the internal auditors and external auditors. In 
order for individual Audit Committee members to effectively perform his or her  
role, each Audit Committee member will obtain an understanding of               
responsibilities of Audit Committee membership as well as a functional          
understanding of Amtran, Inc.'s business, operations, and risks.                

COMMITTEE ORGANIZATION:                                                         

Audit Committee members shall meet the requirements of the NASD. On and 
after the effective date of new rules regarding audit committees, the Audit     
Committee shall be comprised of three or more directors as determined by the    
Board each of whom shall be independent directors as defined by the NASD. All   
members of the Committee shall have a basic understanding of finance and        
accounting and be able to read and understand fundamental financial statements, 
and at least one member of the Committee shall have accounting or related       
financial management expertise.                                                 

Audit Committee members shall be appointed by the Board. If an Audit    
Committee Chair is not designated or present, the members of the Committee may  
designate a Chair by majority vote of the Committee membership.                 

 The Committee shall meet at least two times annually, or as circumstances
dictate. The Audit Committee Chair shall prepare and/or approve an agenda in    
advance of each meeting. The Committee should meet privately in executive       
session at least annually with management, the director of the Internal Auditing
Department, the independent auditors, and as a committee to discuss any matters 
that the Committee or each of these groups believe should be discussed. In      
addition, the Committee, or at least its Chair, should communicate with         
management and the independent auditors quarterly to review the Company's       
financial statements and significant findings based upon the auditors limited   
review procedures.                                                              

ROLES AND RESPONSIBILITIES:                                                     

INTERNAL CONTROL:                                                               

   Evaluate whether Amtran, Inc. management is setting the appropriate 'tone
at the top' by communicating the importance of internal control and   
   ensuring that all individuals possess an understanding of their roles and
responsibilities;                                                     

    Focus on the extent to which the internal and external auditors review key
and critical computer systems and applications, the security of such  
    systems and applications and the contingency plan for processing financial
and operational information in the event of a systems breakdown;      

   Gain an understanding of whether internal control recommendations made by
  the internal and external auditors have been implemented by Amtran, Inc.
management; and                                                       

 Ensure that the internal and external auditors keep the Audit Committee
   informed as to any known occurrences of fraud, illegal acts, deficiencies
     in internal control, and other matters that may impact the discharge of the
Committee's responsibilities.                                         

FINANCIAL REPORTING:                                                            

General                                                                         

Review significant accounting and reporting issues, including recent  
    professional and regulatory pronouncements, and understand their impact on
Amtran, Inc.'s financial statements;                                  

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  Ask Amtran, Inc. management and the internal and external auditors about
     significant risks and exposures effecting the financial reporting processes
and the plans to minimize such risks.                                 

Annual Financial Statements                                                     

Review the annual financial statements of Amtran, Inc. and determine  
whether they are complete and consistent with the information known to
Committee members, and assess whether the financial statements reflect
appropriate accounting principles;                                    

 Pay particular attention to complex and/or unusual transactions such as
restructuring charges and derivative disclosures;                     

   Focus on judgmental areas such as those involving valuation of assets and
   liabilities, including, for example, the accounting for and disclosure of
obsolete or slow moving inventory; loan losses; warranty, product, and
 environmental liability; litigation reserves; and other commitments and
contingencies;                                                        

   Meet with Amtran, Inc. management and the external auditors to review the
financial statements and results of the audit;                        

    Consider management's handling of proposed audit adjustments identified by
the external auditors;                                                

     Review the MD&A and other sections of the Amtran, Inc. annual report before
     its release and consider whether the information is adequate and consistent
    with the Audit Committee's knowledge about the company and its operations;
and                                                                   

Interim Financial Statements                                                    

  Be briefed on how management develops and summarizes quarterly financial
    information, the extent of internal audit involvement, the extent to which
   the external auditors review quarterly financial information, and whether
that review is performed on a pre- or post-issuance basis;            

    Meet with management and, if a pre-issuance review was completed, with the
external auditors, either telephonically or in person, to review the  
   interim financial statements and the results of the review. (This type of
meeting may be done by the Audit Committee Chairperson or the entire  
committee);                                                           

In order to gain insights into the fairness of the interim financial  
 statements and disclosures, obtain explanations from management and the
internal and external auditors on whether:                            

Actual financial results for the quarter or interim period varied   
significantly from budgeted or projected results;                   

  Changes in financial ratios and relationships in the interim financial
   statements are consistent with changes in Amtran, Inc.'s operations and
financial practices;                                                

    Generally accepted accounting principles have been consistently applied;

There are any actual or proposed changes in accounting or financial 
reporting practices;                                                

There are any significant or unusual events or transactions;        

A financial and operating controls are functioning effectively;     

  The company has complied with the terms of loan agreements or security
indentures; and                                                     

The interim financial statements contain adequate and appropriate   
disclosures.                                                        

   Ensure that the external auditors communicate certain required matters to
the committee.                                                        

COMPLIANCE WITH LAWS AND REGULATIONS:                                           

     Review the effectiveness of Amtran, Inc.'s system for monitoring compliance
     with laws and regulations and the results of management's investigation and
follow-up (including disciplinary actions) on any fraudulent acts or  
accounting irregularities;                                            

D-3 

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Periodically obtain updates from management, general counsel, and tax 
director regarding compliance issues;                                 

     Be satisfied that all regulatory compliance matters have been considered in
the preparation of the financial statements; and                      

    Review the findings of any examinations by regulatory agencies such as the
Securities and Exchange Commission.                                   

COMPLIANCE WITH AMTRAN, INC.'S CORPORATE CODE OF ETHICS:                        

Ensure that a code of ethics is formalized in writing and that all    
employees are aware of its existence;                                 

     Evaluate whether management is setting the appropriate 'tone at the top' by
   communicating the importance of the code of ethics and the guidelines for
acceptable business practices;                                        

  Review Amtran, Inc.'s program for monitoring compliance with the code of
ethics; and                                                           

Periodically obtaining updates from management and the general counsel
regarding compliance matters.                                         

INTERNAL AUDIT:                                                                 

    Review the internal audit plans, activities and objectives of the internal
audit function;                                                       

Review the qualifications of personnel performing internal audit work 
at/for Amtran, Inc.; and                                              

 Review the effectiveness of the internal audit process in terms of risk
monitoring, internal control review and evaluation and enhancement of 
organizational effectiveness.                                         

EXTERNAL AUDIT:                                                                 

Review the external auditors' proposed scope and approach;            

Review the performance of the external auditors and recommend to the  
Amtran, Inc. board of directors the appointment or discharge of the   
external auditors; and                                                

   Review and confirm the independence of the external auditors by reviewing
the non-audit services provided and the auditors' assertion of their  
independence in accordance with professional standards.               

OTHER RESPONSIBILITIES:                                                         

Meet with the internal auditors, external auditors, and Amtran, Inc.  
   management in separate executive sessions to discuss any matters that the
Committee or these groups believe should be discussed privately;      

   Ensure that significant findings and recommendations made by the internal
and external auditors are received and discussed on a timely basis;   

Review with Amtran, Inc.'s counsel any legal matters that could have a
significant impact on the company's financial statements;             

Review the policies and procedures in effect for considering officers'
expenses and perquisites;                                             

  If necessary, institute special investigations and, if appropriate, hire
special counsel or experts to assist;                                 

 Perform other oversight functions as requested by the full Amtran, Inc.
Board; and                                                            

     Review and update the Audit Committee Charter, provide oversight and update
   recommendations regarding the internal audit charter and receive approval
of periodic changes from the full Amtran, Inc. Board.                 

D-4 

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REPORTING RESPONSIBILITIES:                                                     

Regularly update the Amtran, Inc. Board of Directors regarding Audit  
Committee activities and make appropriate recommendations.            

  Annually prepare a report to shareholders, as required by the Securities
and Exchange Commission, to be included in Amtran Inc.'s annual proxy 
statement.                                                            

D-5 

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  APPENDIX I
      Preliminary Copy -- Form of Proxy Card

PROXY                                                                           

      AMTRAN, INC.
      7337 WEST WASHINGTON STREET, INDIANAPOLIS, INDIANA 46231

     THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
      ADJOURNED ANNUAL MEETING, [   ], 2001.

   The undersigned hereby appoints Kenneth K. Wolff and James W. Hlavacek,
      with power of substitution in each, proxies of the undersigned, to vote at
  the Annual Meeting of Shareholders of Amtran, Inc. (the 'Corporation')
which was previously adjourned on May 29, 2001, and which will be   
reconvened on the [ ]th day of [     ] 2001, and at any and all     
     postponements or adjournments of said meeting, all of the shares of stock
     of the Corporation which the undersigned may be entitled to vote with all
  the powers the undersigned would possess, if then and there personally
   present, and especially (but without limiting the general authority and
power hereby given) to vote.                                        

     THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSALS 1,
2 AND 3.                                                            

    1. Approval of (i) the Agreement and Plan of Merger dated as of June 18,
      2001, between INDUS Acquisition Company and the Corporation, (ii) the Plan
  of Merger attached thereto as Exhibit A, (iii) the consummation of the
     merger and the other transactions contemplated by said agreement and said
   Plan of Merger and (iv) the amendment and restatement of Article XII of
the Corporation's Articles of Incorporation.                        

     [ ] FOR       [ ] AGAINST       [ ] ABSTAIN

      --------------------------------------------------------------------------

                                                        [Enlarge/Download Table]
                                                                                                 
2. Election of Directors                                                                         
   [ ] FOR all nominees listed below                        [ ] WITHHOLD AUTHORITY               
   (except as marked to the contrary below)                 to vote for all nominees listed below

   J. George Mikelsons, John P. Tague, Kenneth K. Wolff, James W. Hlavacek,                      
   Robert A. Abel and Andrejs P. Stipnieks                                                       

   INSTRUCTION: (TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
             WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)

      --------------------------------------------------------------------------

  3. Appointment of Ernst & Young, LLP as the Corporation's Auditors for
2001.                                                               

     [ ] FOR       [ ] AGAINST       [ ] ABSTAIN

  The undersigned hereby acknowledges receipt of the Notice of Adjourned
    Annual Meeting of Shareholders and Amended and Restated Proxy Statement.

                               (Continued, and to be signed on the other side)

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      AMTRAN, INC.
     (Continued from the other side)

This proxy may be revoked at any time prior to said meeting, and the
undersigned reserves the right to attend such meeting and vote said 
proxies in person.                                                  

   The undersigned hereby revokes any proxy or proxies heretofore given to
vote upon or act with respect to such shares and hereby ratifies and
confirms all that said proxies, their substitutes or any of them may
lawfully do by virtue hereof.                                       

     UNLESS OTHERWISE SPECIFIED, THE SHARES REPRESENTED BY THIS PROXY SHALL BE
  VOTED FOR PROPOSALS 1, 2 AND 3. THIS PROXY WILL BE VOTED IN ACCORDANCE
      WITH THE INSTRUCTIONS OF THE PROXIES NAMED ABOVE WITH RESPECT TO ANY OTHER
    MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING AND ANY POSTPONEMENTS
OR ADJOURNMENTS THEREOF.                                            

                                                    Dated................., 2001

                                                    ............................
                                 Signature

                                                    ............................
                                                 Signature if held jointly

                                              Please sign this proxy
                                                    exactly as your name appears
                                                    hereon. If the stock is held
                                                  in the name of two or more
                                                  persons, each should sign.
                                                  Executors, administrators,
                                            trustees, guardians,
                                               attorneys and corporate
                                                offices should add their
                                                 titles. If a corporation,
                                                   sign in full corporate name
                                             by president or other
                                                authorized officer. If a
                                            partnership, sign in
                                           partnership name by
                                          authorized person.

PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PREM14A’ Filing		Date		First		Last			Other Filings
		11/15/03		108
		2/23/03		108
		2/4/03		72					8-K
		1/28/03		71
		12/15/02		52		107
		7/1/02		108
		6/1/02		106
		2/4/02		72
		1/31/02		69					8-K
		1/28/02		71
		1/24/02		69
		1/15/02		49		114
		1/5/02		71		72
		12/31/01		3		20			10-K
		10/31/01		12		114
For Period End:		9/5/01
Corrected on:		7/11/01
Filed on:		6/29/01		43					SC 13E3
		6/28/01		3		65
		6/26/01		1					3
		6/19/01		1					8-K,  DEFA14A
		6/18/01		2		139			3,  4,  8-K,  DEFA14A
		6/15/01		28		86
		6/14/01		28		85			DEFA14A
		6/13/01		28
		6/12/01		28
		6/11/01		27
		6/8/01		27
		6/6/01		26		27
		6/5/01		27
		6/2/01		27
		6/1/01		26
		5/31/01		26		45
		5/30/01		26
		5/29/01		2		139			DEF 14A
		5/25/01		45		78			8-K
		5/24/01		25
		5/23/01		25		78			10-K/A,  DEFA14A
		5/22/01		25
		5/21/01		25
		5/18/01		45
		5/17/01		25		78			8-K,  DEFA14A
		5/16/01		2		112			8-K
		5/15/01		24		78			10-Q
		5/14/01		24
		5/11/01		24
		5/9/01		24		43
		5/8/01		24		43
		5/7/01		24
		5/4/01		24
		5/3/01		24
		5/2/01		24
		4/27/01		24
		4/26/01		24
		4/24/01		23		24			DEF 14A
		4/19/01		25
		4/18/01		23
		4/16/01		2		43
		4/11/01		23		26
		4/6/01		23
		4/5/01		23
		4/3/01		23
		4/2/01		23					10-K
		3/31/01		48		78			10-Q
		3/16/01		78					8-K
		3/9/01		41
		2/27/01		67
		2/4/01		72
		2/1/01		69
		1/28/01		71
		1/26/01		22
		1/25/01		22
		1/24/01		69
		1/12/01		22
		1/10/01		71		72
		1/8/01		22		65
		1/5/01		71		72
		1/2/01		65
		12/31/00		5		118			10-K,  10-K/A
		12/15/00		118
		9/19/00		53		112
		5/30/00		22
		5/27/00		21
		4/18/00		68
		3/31/00		64					10-Q
		3/10/00		68
		2/22/00		68
		2/3/00		68					SC 13G
		1/24/00		68		72
		1/10/00		71		72
		1/5/00		71		72
		12/31/99		64					10-K
		5/28/99		21
		1/10/99		71		72
		1/1/99		58		87
		3/20/97		41
		1/1/97		42
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