Amendment to General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D/A Amendment to General Statement of Beneficial 20 76K
Ownership
2: EX-6 Opinion re: Discount on Capital Shares 20 60K
3: EX-7 Opinion re: Liquidation Preference 7 22K
4: EX-8 Opinion re: Tax Matters 21 49K
5: EX-9 Voting Trust Agreement 37 66K
6: EX-10 Material Contract 1 7K
EX-9 — Voting Trust Agreement
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Exhibit 9
Execution Copy
NORTHWEST AIRLINES/AIR PARTNERS VOTING TRUST AGREEMENT
This Northwest Airlines/Air Partners Voting Trust Agreement (this
"Agreement") dated as of the 20th day of November, 1998, by and among (i)
Continental Airlines, Inc., a Delaware corporation ("Continental" or the
"Company"), (ii) Northwest Airlines Corporation, a Delaware corporation
(formerly Newbridge Parent Corporation, "NPC"), and Northwest Airlines Holdings
Corporation, a Delaware corporation (formerly Northwest Airlines Corporation,
"NWA"), (iii) Air Partners, L.P., a Texas limited partnership ("Air Partners"
and, together with NPC and NWA, the "Stockholders" and each, a "Stockholder"),
and (iv) Wilmington Trust Company, a Delaware banking corporation.
W I T N E S S E T H:
WHEREAS, pursuant to the Investment Agreement dated as of January 25,
1998, among NWA, NPC, Air Partners, the partners of Air Partners that are
signatories to the Investment Agreement, Bonderman Family Limited Partnership,
1992 Air, Inc. and Air Saipan, Inc., as amended by Amendment No. 1 thereto dated
as of February 27, 1998 and as further amended by Amendment No. 2 thereto dated
as of the date hereof (the "Investment Agreement"), NWA and NPC have acquired
Beneficial Ownership of 8,535,868 shares (the "AP Shares") of the Company's
Class A Common Stock, par value $.01 per share (the "Class A Common Stock"); and
WHEREAS, NPC and NWA Beneficially Own an additional 979,000 shares of
Class A Common Stock (the "Additional Shares") pursuant to the Barlow Agreement;
and
WHEREAS, the Governance Agreement dated as of January 25, 1998, among
the Company, NWA and NPC, as amended by the First Amendment thereto dated as of
March 2, 1998 and the Second Amendment thereto dated as of the date hereof (such
agreement, as so amended, the "Governance Agreement"), requires NWA and NPC to
cause Air Partners to deposit the shares of Class A Common Stock of which NWA
and NPC have acquired beneficial ownership pursuant to the Investment Agreement
(except for such 853,644 shares with respect to which NWA and NPC or their
designees have been granted a proxy pursuant to the Investment Agreement) in a
voting trust;
WHEREAS, the Governance Agreement also requires NWA and NPC to deposit
any other Voting Securities Beneficially Owned by either of them or any of their
Affiliates (except for such 853,644 shares with respect to which NWA and NPC or
their designees have been granted a proxy pursuant to the Investment Agreement)
into the same voting trust;
WHEREAS, the parties hereto desire to establish the voting trust
contemplated in the Governance Agreement and to
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deposit into such trust the AP Shares and the Additional Shares; and
WHEREAS, each Stockholder has advised the Trustee that it intends to
file all required disclosure information and other filings as required by
applicable securities law and regulations relating to its respective beneficial
ownership of the Shares, including but not limited to the Securities Act of 1933
and the Exchange Act of 1934.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and using capitalized terms to have their respective
meanings set forth in Section 14 hereof, the parties hereto agree as follows:
Section 1. Creation of Voting Trust. Subject to the terms and
conditions hereof, there is hereby created and established a voting trust in
respect of the Shares to be known as the "Northwest Airlines/Air Partners Voting
Trust." The Trustee hereby accepts the trust created hereby and agrees to serve
as trustee hereunder. The Trustee promptly shall file an executed copy of this
Agreement at the registered office of the Company in the State of Delaware,
which copy shall be open to the inspection of any stockholder of the Company, or
any beneficiary of the Trust, daily during business hours, as provided in
Section 218 of the Delaware General Corporation Law.
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Section 2. Deposit of Shares. (a) Subject to the provisions of Section
2(b) hereof, each of Air Partners, NWA and NPC shall, simultaneously with the
consummation on the date hereof of the transactions contemplated by the
Investment Agreement and the Barlow Agreement, transfer and deliver to the
Trustee, to be held by it pursuant to the provisions of this Agreement, the
certificate or certificates representing all of the Shares Beneficially Owned by
the Stockholders (except that for purposes of the foregoing, any shares
Beneficially Owned by the Stockholders solely as a result of any proxy granted
to them pursuant to the Investment Agreement shall not be required to be so
deposited), duly endorsed in blank or to the Trustee, or accompanied by proper
instruments of assignment and transfer duly executed in blank or to the Trustee.
After the filing of a copy of this Agreement in the registered office of the
Company in the State of Delaware as provided in Section 1 hereof, each
certificate representing Shares so transferred to the Trustee shall be
surrendered to the Company and cancelled, and new certificates therefor shall be
issued to, and in the name of, the Trustee. Such certificates shall state that
they have been issued pursuant to this Agreement and that fact shall be noted in
the stock ledger of the Company as required by Section 218 of the Delaware
General Corporation Law. The shareholdings of each
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of the Stockholders of Company Common Stock as of the date hereof are set forth
in Schedule I attached hereto.
(b) All certificates for Shares at any time delivered to the Trustee
hereunder shall be held by the Trustee under and pursuant to the terms and
conditions of this Agreement. The Trustee shall not have the authority to, and
shall not, sell, transfer, assign, pledge, hypothecate, or otherwise dispose of
or encumber the Shares or any rights therein or thereto, except to the extent
otherwise specifically provided in this Agreement. The Trustee shall have no
beneficial interest in or discretionary authority with respect to the Shares,
its interest being limited solely to that necessary to carry out its obligations
under this Agreement.
(c) The Trustee, in exchange for the certificate or certificates so
deposited hereunder, will cause to be issued and delivered to each Stockholder a
voting trust certificate or certificates issued hereunder substantially in the
form attached hereto as Exhibit A (the "Voting Trust Certificates") for the
appropriate number of Shares. The Trustee, under such rules and regulations as
it in its discretion may prescribe with respect to indemnity or otherwise, may
provide for the issuance and delivery of new Voting Trust Certificates in lieu
of lost, stolen or destroyed Voting Trust Certificates or in exchange for
mutilated Voting Trust Certificates.
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(d) Except as would be permitted by Section 1.02(iii) of the
Governance Agreement with respect to the Shares, as provided in Section 3.05 of
the Governance Agreement, until the Standstill Termination Date, the Voting
Trust Certificates shall not be sold, assigned, transferred, pledged,
hypothecated, given away or in any other manner disposed of or encumbered,
whether voluntarily, involuntarily or by operation of law, and the Trustee shall
not register any such transfer. Each Voting Trust Certificate issued pursuant to
this Agreement shall have the following legend noted conspicuously upon its face
or reverse side:
"This Voting Trust Certificate is subject to restrictions on sale,
assignment, transfer, pledge, hypothecation, gift or other disposition,
as set forth in the Voting Trust Agreement referred to below."
(e) The Trustee shall not issue Voting Trust Certificates, or any
interest in the Trust, to any Person other than NWA, NPC, Air Partners, or any
of their Depositing Affiliates.
(f) The Stockholders each hereby covenant and agree promptly to
deposit into the Trust any Voting Securities acquired by any of them after the
date hereof. The Trustee shall issue to each depositing Stockholder a Voting
Trust Certificate in respect of such securities as provided in Section 2(a)
hereof.
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(g) The Stockholders each hereby covenant and agree to cause their
controlled Affiliates, and to use their best efforts to cause each other
Affiliate, to deposit into the Trust any Voting Securities acquired by such
Affiliate after the date hereof and to execute a supplement to this Agreement
evidencing each such Affiliate's agreement to be bound by, and subject to the
terms of, this Agreement. Upon delivery of such supplement to the Company and
the Trustee, and the deposit of Voting Securities, the Trustee shall issue
Voting Trust Certificates in respect of such securities to the Depositing
Affiliate as provided in Section 2(a) hereof.
(h) Each Stockholder hereby represents, warrants and covenants to the
Trustee, with respect to Voting Securities it owns, that (i) it has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement, (ii) it is and, except as permitted by the Governance
Agreement, shall be during the term of this Agreement the sole legal and
beneficial owner of the Voting Securities, and (iii) it has not sold, assigned,
pledged, created a lien or security interest in, or otherwise transferred any
interest in, the Voting Securities to any other person or entity (with the
exception of the transfers contemplated by this Agreement), and (iv) the
transfers of Voting Securities from each Stockholder to the Trustee and from the
Trustee to the Stockholders
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contemplated by this Trust Agreement do not require registration under
applicable federal or state securities laws.
Section 3. Voting. The Stockholders hereby direct the Trustee to vote
the Shares as follows:
(a) Except as provided in (c) below, until the Standstill Termination
Date, the Trustee shall vote (or submit its written consent with respect to) the
Shares on all matters submitted to a vote of the Company's stockholders other
than an election of directors, whether at a meeting of stockholders or by
written consent, either (i) in the case of a vote taken at a stockholders
meeting, in the same proportion as the votes cast by other holders of Voting
Securities or (ii) in the case of action taken by written consent, so that the
percentage of Stockholder Voting Power consented to on a matter equals the
percentage of all other outstanding Voting Securities so consented.
(b) Except as provided in (d) below, until the Standstill Termination
Date, in any election of directors, the Trustee shall vote the Shares for the
election of the Independent Directors nominated by the Board of Directors by a
Majority Vote, and, unless otherwise directed by NPC, for the election of the
other persons nominated by the Board of Directors.
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(c) Until the Standstill Termination Date, with respect to any vote or
consent of the Company's stockholders (i) on a merger, reorganization, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company, any sale of all or
substantially all of the Company's assets or any issuance of Voting Securities
that would represent in excess of 20% of the Voting Power prior to such
issuance, including any of the foregoing involving NPC or NWA or (ii) on any
amendment to the Company's amended and restated certificate of incorporation or
its bylaws that would materially and adversely affect NPC (including through its
effect on the Alliance Agreement and the rights of the Voting Securities
Beneficially Owned by NPC), the Shares shall be voted by the Trustee as directed
by NPC and, in the absence of such direction, shall not be voted.
(d) (i) Until the Standstill Termination Date, with respect to any
election of directors in respect of which any Person other than the Company is
soliciting proxies, the Trustee shall vote the Shares, at the election of NPC,
either (A) as recommended by the Board of Directors or (B) in the same
proportion as the votes cast by the other holders of Voting Securities.
(ii) Upon learning that a Person other than the Company is soliciting
proxies in any election of directors,
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the Company shall promptly notify the Trustee and NPC. Not later than five
(5) Business Days prior to the date of the stockholders meeting at which
the proxies solicited by such other person are to be voted, NPC shall
notify the Trustee and the Company of its election under Section 3(d)(i).
If no election is timely made by NPC, the Trustee shall vote the Shares in
the same proportion as the votes cast by the other holders of Voting
Securities. NPC may instruct the Trustee to change the vote cast at any
time before the close of business two (2) days before a stockholders
meeting by giving notice to the Trustee and the Company.
(e) In the event the Trustee is required under this Voting Trust
Agreement to vote the Shares in the same proportion as the votes cast by other
holders of Voting Securities, the Trustee may discharge its obligation so to
vote the Shares by delivering to the Company a proxy or written consent (as the
case may be) providing that the Shares are to be so voted, in which event the
Trustee shall have no duty to ascertain the actual votes cast by other holders
of Voting Securities.
Section 4. Dividends and Distributions. (a) The parties hereto agree
that, unless otherwise directed by Air Partners, NWA, NPC or a Depositing
Affiliate, the Company shall pay all dividends or other distributions (other
than dividends or distributions paid in Voting Securities or the dividend of
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the Rights) in respect of the Shares directly to Air Partners, NWA, NPC or the
Depositing Affiliate, as the case may be. The Trustee shall have no liability
with regard to the payment of such dividends or other distributions.
Notwithstanding the foregoing, if the Trustee receives payments of dividends or
other distributions (other than dividends or distributions paid in Voting
Securities and the dividend of the Rights) in respect of the Shares, it shall
promptly distribute such dividends or distributions to Air Partners, NWA, NPC or
the Depositing Affiliate, as applicable, promptly after the receipt of such
dividends or other distributions.
(b) In the event the Trustee receives any Voting Securities by means
of a dividend or other distribution in respect of the Shares (including the
Rights), the Trustee shall hold such securities subject to this Agreement and
such securities shall become subject to all of the terms and conditions of this
Agreement to the same extent as if they were Shares deposited with the Trustee
pursuant to Section 2(a) hereof. The Trustee shall issue Voting Trust
Certificates in respect of such securities to Air Partners, NWA, NPC or the
Depositing Affiliate, as applicable, in accordance with Section 2(c) hereof.
(c) In the event of a merger to which the Company is a party, the sale
of all or substantially all of the
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assets of the Company, the dissolution or total or partial liquidation of the
Company, or the sale of any or all of the Shares, the Trustee shall receive the
money, securities, rights or property which are distributed or are distributable
in respect of the Shares, or which are received in exchange for the Shares, and,
after paying (or reserving for payment thereof) any expenses incurred pursuant
to this Agreement, shall promptly distribute such money, securities, rights or
property to Air Partners, NWA, NPC and any Depositing Affiliate, as applicable.
(d) If, at any time during the term of this Agreement, the Trustee
shall receive or collect any money or other property (other than Voting
Securities or the Rights but including stock in subsidiaries or Affiliates of
the Company) through distribution by the Company to its stockholders, other than
as set forth in paragraph (a), (b) or (c) of this Section 4, the Trustee shall
promptly distribute such money or other property to Air Partners, NWA, NPC and
any Depositing Affiliate, as applicable.
(e) Upon the receipt by the Trustee of a "Right Certificate" (as
defined in the Rights Agreement) following the "Distribution Date" (as defined
in the Rights Agreement), the Trustee shall promptly distribute such certificate
to Air Partners, NWA, NPC and any Depositing Affiliate, as applicable.
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Section 5. The Trustee. (a) Subject to the provisions of this
Agreement, the Trustee shall manage the voting trust created hereby.
(b) The Trustee shall be entitled to receive compensation for services
as trustee hereunder as set forth in the fee schedule previously provided to the
parties hereto. As between NPC and the Company, fifty percent of such
compensation shall be paid by NPC and fifty percent shall be paid by the
Company; provided that their obligation to the Trustee to pay such compensation
shall be joint and several.
(c) The Trustee is expressly authorized to incur and pay all
reasonable, properly documented charges and other expenses that the Trustee
deems necessary and proper in the performance of the Trustee's duties under this
Agreement. NPC and the Company, as between themselves, shall each be responsible
to reimburse the Trustee for one-half of such expenses; provided that their
obligation to the Trustee to reimburse such charges and expenses shall be joint
and several. NPC and the Company, as between themselves, shall each be
responsible to indemnify the Trustee for one-half of any and all claims, costs
of defense of claims (including reasonable attorney's fees and disbursements),
expenses and liability incurred by the Trustee in connection with the
performance of the Trustee's duties under this Agreement, except those incurred
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as a result of the Trustee's gross negligence, wilful misconduct or other
malfeasance; provided that NPC's and the Company's obligation to the Trustee to
pay such amounts shall be joint and several. This Section 5(c) shall survive the
termination of this Agreement.
(d) In acting hereunder, the Trustee shall have only such duties as
are specified herein and no implied duties shall be read into this Agreement,
and the Trustee shall not be liable for any act done, or omitted to be done, by
it in the absence of its gross negligence or willful misconduct. The Trustee
shall be free from liability to Air Partners, NWA, NPC and any Depositing
Affiliate in acting or relying upon any writing, notice, certificate or document
believed by the Trustee in good faith after reasonable inquiry to be genuine and
to have been signed by an authorized officer of the Company, NPC, NWA or any
Depositing Affiliate, as the case may be, or with respect to Air Partners, an
authorized officer of the general partner of Air Partners, including, without
limitation, any certificate or document from the Company regarding the Fully
Diluted Voting Power, the identity of the Independent Directors, the Beneficial
Ownership of Voting Securities of NPC and its Affiliates, the Stockholder Voting
Power, the Total Voting Power, the Voting Securities and whether a particular
vote of the Company's stockholders is with respect to a matter described in
Section
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3(c). In making such inquiry, the Trustee shall be entitled to rely upon
certificates of incumbency provided by the entity providing such certificates
executed by a person authorized to do so on behalf of such entity. The Company
shall send a copy of any such writing, notice, certificate or document to NPC
concurrently with sending it to the Trustee. The Trustee may consult with legal
counsel, who shall have no business, financial, or other relationship with Air
Partners, NWA, NPC, a Depositing Affiliate or the Company, or any of their
respective Affiliates, and any action under this Agreement taken or suffered in
good faith by the Trustee in accordance with the advice of the Trustee's counsel
shall be conclusive on the parties to this Agreement absent manifest error,
gross negligence, wilful misconduct or other malfeasance and the Trustee shall
not be the subject of any claim by or liability to Air Partners, NPC, NWA or any
Depositing Affiliate, or their successors and assigns except for any claim or
liability resulting from its gross negligence, wilful misconduct or other
malfeasance. This Section 5(d) shall survive the termination of this Agreement.
(e) (i) The Trustee may resign by giving 30 days' advance written
notice of resignation to the Company and NPC provided that at the end of the 30
day period, a successor Trustee has been appointed by NPC and approved by the
Company by
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Majority Vote in accordance with Section 5(f) hereof. NPC shall not unreasonably
delay the appointment of, and the Company shall not unreasonably delay the
approval of, a successor Trustee.
(ii) NPC may remove the Trustee at any time upon 90 days' notice to
the Trustee and the Company if at the end of the 90 day period, a successor
Trustee has been appointed and approved in accordance with Section 5(f)
hereof.
(f) In the event of resignation or removal of the Trustee pursuant to
Section 5(e), the Trustee shall be succeeded by a successor Trustee chosen by
NPC and approved by the Company by the Majority Vote. In connection therewith,
the Trustee shall, simultaneously with the execution by the successor Trustee of
a counterpart of this Agreement, transfer and deliver (or cause to be
transferred and delivered) to the successor Trustee the Shares that are held in
the name of the Trustee immediately prior to such execution. The successor
Trustee shall file an executed copy of this Agreement, as amended, at the
registered office of the Company in the State of Delaware, which copy shall be
open to the inspection of any stockholder of the Company, or any beneficiary of
the Trust, daily during business hours, as provided in Section 218 of the
Delaware General Corporation Law, and thereafter the successor Trustee shall
become the Trustee for all purposes of this Agreement, and shall succeed to all
of the rights and
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obligations of the Trustee hereunder. Each certificate representing Shares so
transferred to the successor Trustee shall be surrendered and canceled, and new
certificates therefor shall be issued in the name of the successor Trustee. Such
certificates shall state that they have been issued pursuant to this Agreement,
as amended, and that fact shall be noted in the stock ledger of the Company, as
required by Section 218 of the Delaware General Corporation Law. In the event a
successor Trustee shall be appointed after a record date has passed with respect
to any vote of the stockholders of the Company and prior to the stockholders
meeting or the taking of action by written consent relating to such record date,
the Trustee as of such record date shall vote the Shares and/or execute a
written consent or proxy with respect thereto in accordance with the
instructions of the successor Trustee in accordance with the terms of this
Agreement.
(g) The Stockholders and the Company each hereby acknowledge that the
Trustee has had, presently may have and may in the future have other business
relationships with any one or more of the Stockholders and the Company that are
unrelated to its duties and obligations under this Agreement, and hereby waive
and release the Trustee from any conflict of interest which such relationship
may create; provided, that in the event such conflict of interest results in or
arises in connection
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with litigation between any such Stockholder and the Company or any other
Stockholder, the Stockholder or the Company shall have the right immediately to
remove the Trustee within ten (10) business days following notice of such
conflict to them from the Trustee or notice of such conflict from either of them
to the Trustee (the "Conflict Notice"). Notwithstanding an election by the
Stockholder or Company to remove the Trustee as provided in the previous
sentence, the foregoing waiver and release shall apply to any actions taken by
the Trustee or which the Trustee refrains from taking in accordance with
instructions authorized under this Trust Agreement during the period between
delivery of such Conflict Notice and the Trustee's removal.
(h) The Trustee represents that it is acquiring the Shares only in its
capacity as trustee to hold in trust and not with a view to distribution.
(i) In the event the Trustee receives conflicting instructions under
this Trust Agreement, the Trustee shall be fully protected in refraining from
acting until such conflict is resolved to the satisfaction of the Trustee except
that if such conflict arises by virtue of the receipt of later dated
instructions from the same party, the Trustee shall follow the later dated
instructions in accordance with this Agreement. The Trustee shall be obligated
to contact promptly the party giving the conflicting instructions to ascertain
the nature of
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any conflict, and in the event such conflict cannot be resolved, the Trustee
shall have the right to institute a bill of interpleader in any court referred
to in Section 11(b) of this Agreement to determine the rights and obligations of
the parties, and the parties shall pay all costs, expenses and disbursements in
connection therewith, including reasonable attorneys' fees.
Section 6. Term; Termination. (a) Except to the extent earlier
terminated with respect to all or a portion of the Shares in accordance with
Section 6(d), the Trust shall be effective as of the date hereof, and this
Agreement and the Trust shall remain in full force and effect until the
Standstill Termination Date. This Agreement and the Trust may be terminated at
any time with the consent in writing of the Company and NPC; provided that, the
consent of the Company shall have been given with the Majority Vote.
(b) Upon termination of this Agreement in accordance with Section 6(a)
with respect to all the Shares or in accordance with Section 6(d) with respect
to all or a portion of the Shares, and following delivery to the Trustee of each
Stockholder's Voting Trust Certificate, and payment in full of all fees and
expenses of the Trustee then outstanding, the Trustee shall promptly deliver to
Air Partners, NWA, NPC, and each Depositing Affiliate, as applicable, the
certificates
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representing the Shares deposited in the Trust with respect to which this
Agreement shall have been terminated, duly endorsed for transfer by the Trustee,
or with duly executed stock powers attached, and shall take all such other
actions as are appropriate to cause the transfer of such Shares deposited in the
Trust, together with all other property relating to or allocable to such Shares
and held by the Trustee for the benefit of Air Partners, NWA, NPC and any
Depositing Affiliate, as applicable, pursuant to this Agreement, to Air
Partners, NWA, NPC or such Depositing Affiliate, as the case may be. Upon
delivery of the certificates in accordance with the foregoing, except as
provided in Section 6(c) below, the Trustee shall be released from any further
obligation or duty under this Agreement.
(c) In connection with any action submitted to a vote of the Company's
stockholders, whether at a meeting of stockholders or by written consent,
following the termination of this Agreement but prior to the delivery to Air
Partners, NWA, NPC or any Depositing Affiliate of the certificates representing
the Shares deposited in the Trust, and having a record date prior to such
delivery, the Trustee shall vote the Shares as directed in writing by Air
Partners, NWA, NPC or such Depositing Affiliate, as the case may be, in respect
of the Shares
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beneficially owned by them, and in the absence of any such direction, the
Trustee shall not vote such Shares.
(d) In the event that prior to the Standstill Termination Date NWA,
NPC, Air Partners or any Depositing Affiliate is permitted to transfer any of
the Shares in accordance with and pursuant to clauses (i), (ii), (v) and (vi) of
Section 1.02 of the Governance Agreement, this Agreement shall immediately
terminate and be of no further force and effect with respect to such Shares.
Section 7. Benefit and Binding Effect; Assignment. This Agreement and
all covenants herein contained shall be binding upon and shall inure to the
benefit of each of the parties hereto and their respective heirs, executors,
administrators and personal representatives and their successors and assigns;
provided, however, that, except for assignments by NPC, NWA or Air Partners to a
controlled Affiliate of NPC as permitted by Section 1.02(iii) of the Governance
Agreement, this Agreement shall not be assigned by any party hereto without the
prior written consent of the Trustee, the Company and NPC, which consent, in the
case of the Company, shall have been given with the Majority Vote.
Section 8. Notices. All notices, elections, requests, demands or other
communications provided for herein
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shall be made in writing, including by facsimile, and shall be deemed to have
been duly given:
If to NWA, NPC or Air Partners, to:
Northwest Airlines Corporation
5101 Northwest Drive
St. Paul, Minnesota 55111
Attention: General Counsel
Fax: (612) 726-7123
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: Robert L. Friedman, Esq.
Fax: (212) 455-2502
If to the Company, to:
Continental Airlines, Inc.
Dept. HQS-EO
Continental Tower
1600 Smith Street
Houston, Texas 77002
Fax: (713) 324-2687
Attention: General Counsel
With a copy to:
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street
P.O. Box 1347
Wilmington, Delaware 19899-1347
Fax: (302) 658-3989
Attention: A. Gilchrist Sparks, III, Esquire
If to the Trustee, to:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Fax: (302) 651-8882
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or such other address or fax number as such party may hereafter specify for such
purpose by notice to the other parties hereto.
Section 9. Amendments. This Agreement and the Voting Trust
Certificates issued hereunder may be amended upon the consent in writing of (a)
the Company (with the Majority Vote) and (b) NPC acting on behalf of all of the
holders of Voting Trust Certificates then issued and outstanding under this
Agreement.
Section 10. Enforceability. In the event that any part of this
Agreement shall be held to be invalid or unenforceable, the remaining parts
thereof shall nevertheless continue to be valid and enforceable as though the
invalid portions were not a part hereof.
Section 11. Governing Law; Consent to Jurisdiction.
(a) This Agreement shall be construed in accordance with and governed
by the internal laws of the State of Delaware.
(b) Any suit, action or proceeding seeking to enforce any provision
of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any
federal court located in the State of Delaware or any Delaware state court,
and each of the parties hereby consents to the exclusive jurisdiction of
such courts (and of the appropriate appellate courts therefrom)
23
in any such suit, action or proceeding and irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
which is being brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 8 shall
be deemed effective service of process on such party.
Section 12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same instrument.
Section 13. Expenses. In the event that the Trustee pays (or reserves
for payment thereof) any expenses incurred pursuant to this Agreement out of any
moneys received by it in accordance with Section 4(c) or otherwise deducts from
any amounts payable to NPC, NWA, Air Partners or any Depositing Affiliate any
expenses incurred by the Trustee, the Company shall promptly reimburse NPC, NWA,
Air Partners or such
24
Depositing Affiliate, as the case may be, in an amount equal to 50% of such
expenses so paid or deducted.
Section 14. Definitions; Interpretation. (a) For purposes of this
Agreement, the following terms shall have the following meanings:
"Additional Shares" shall have the meaning set forth in the second
recital hereto.
"Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement).
"Air Partners" shall mean Air Partners, L.P., a Texas limited
partnership.
"Alliance Agreement" shall mean the Master Alliance Agreement dated as
of January 25, 1998 by and between Continental and Northwest Airlines, Inc., an
indirect wholly owned subsidiary of NWA.
"AP Shares" shall have the meaning set forth in the first recital
hereto.
"Barlow Agreement" shall mean the Purchase Agreement dated as of
March 2, 1998, among NPC, NWA, Barlow Investors III, LLC, a California limited
liability company, and the guarantors signatory thereto.
"Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial
25
ownership" of such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without limiting the foregoing, any
Voting Securities owned by the Trust shall be deemed to be Beneficially Owned by
the Stockholders.
"Board of Directors" shall mean the board of directors of the Company.
"Business Day" shall mean any day other than a Saturday, Sunday or
legal holiday.
"Class A Common Stock" shall have the meaning set forth in the first
recital hereto.
"Class B Common Stock" shall mean the Class B Common Stock, par value
$.01 per share, of the Company.
"Closing" shall mean the closing of the transactions provided for in
the Investment Agreement.
"Conflict Notice" shall have the meaning set forth in Section 5(g) of
this Agreement.
"Continental" or "Company" shall mean Continental Airlines, Inc., a
Delaware corporation.
"Depositing Affiliate" shall mean any Affiliate of Air Partners, NPC
or NWA that has deposited Voting Securities with the Trustee, and become bound
by, and subject to the terms of, this Agreement, as provided in Section 2(g) of
this Agreement,
26
and any controlled Affiliate of Air Partners, NPC or NWA to which any of the
Shares are transferred in accordance with Section 1.02(iii) of the Governance
Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Fully Diluted Voting Power" of any Person with reference to the
Company shall be calculated by dividing (i) the sum of (A) ten times the
aggregate number of shares of Company Class A Common Stock Beneficially Owned by
such Person (assuming exercise of any outstanding securities held by such Person
that are convertible into or exercisable or exchangeable for shares of Company
Class A Common Stock) and (B) the number of shares of Company Class B Common
Stock Beneficially Owned by such Person (assuming exercise of any outstanding
securities held by such Person that are convertible into or exercisable or
exchangeable for shares of Company Class B Common Stock) by (ii) the sum of (A)
ten times the aggregate number of outstanding shares of Company Class A Common
Stock (assuming the exercise of all outstanding securities convertible into or
exercisable or exchangeable for shares of Company Class A Common Stock) and (B)
the aggregate number of outstanding shares of Company Class B Common Stock
(assuming the exercise of all outstanding securities convertible into or
exercisable or exchangeable for shares of Company Class B Common Stock).
27
"Governance Agreement" shall have the meaning set forth in the third
recital hereto.
"Independent Director" shall mean (i) any person listed on Exhibit
2.01 of the Governance Agreement, (ii) any other person selected as an
Independent Director in accordance with Section 2.01(b) of the Governance
Agreement and (iii) any other person, who is elected to the Board of Directors
in an election of directors in respect of which any Person other than the
Company is soliciting proxies; provided that any such other person so selected
shall be independent of and otherwise unaffiliated with NWA, NPC, Air Partners
or the Company (other than as an Independent Director), and shall not be an
officer or an employee, consultant or advisor (financial, legal or other) of NWA
or the Company or any of their respective Affiliates, or any person who shall
have served in any such capacity within the three-year period immediately
preceding the date such determination is made.
"Investment Agreement" shall have the meaning set forth in the first
recital hereto.
"Majority Vote" shall mean the affirmative vote of a majority of the
Board of Directors, including the affirmative vote of a majority of the
Independent Directors.
"NPC" shall mean Newbridge Parent Corporation, a Delaware corporation.
28
"NWA" shall mean Northwest Airlines Corporation, a Delaware
corporation.
"Person" shall mean any individual, partnership (limited or general),
joint venture, limited liability company, corporation, trust, business trust,
unincorporated organization, government or department or agency of a government.
"Rights" shall mean the rights issued pursuant to the Rights
Agreement.
"Rights Agreement shall mean the Rights Agreement dated as of
November 20, 1998, between the Company and Harris Trust and Savings Bank, as
rights agent.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Shares" shall mean the AP Shares, the Additional Shares and any other
Voting Securities required to be deposited in the Trust in accordance with the
terms hereof.
"Standstill Termination Date" shall mean the earlier of (i) the sixth
anniversary of the Closing and (ii) the date on which NPC and its Affiliates
cease to Beneficially Own Voting Securities representing at least 10% of the
Fully Diluted Voting Power, unless the Governance Agreement shall have otherwise
terminated, in which event the Standstill Termination Date shall mean the date
of such termination.
29
"Stockholder Voting Power" at any time shall mean the aggregate voting
power in the general election of directors of all Voting Securities then
Beneficially Owned by NPC and its Affiliates.
"Stockholders" shall mean Air Partners, NWA and NPC.
"Total Voting Power" at any time shall mean the total combined voting
power in the general election of directors of all the Voting Securities then
outstanding.
"Trust" shall mean the Northwest Airlines/Air Partners Voting Trust
created by this Voting Trust Agreement.
"Trustee" shall mean initially Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as trustee, and
any successor trustee thereto appointed and approved in accordance with Section
5(f) hereof.
"Voting Securities" shall mean at any time shares of any class of
capital stock of the Company, which are then entitled to vote generally in the
election of directors including, without limitation, the Class A Common Stock
and the Class B Common Stock.
"Voting Trust Certificates" shall have the meaning set forth in
Section 2(c) hereof.
(b) The definitions herein shall apply equally to both the singular
and plural forms of the terms defined.
30
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms.
[The remainder of this page intentionally left blank]
31
IN WITNESS WHEREOF, the parties hereto have caused this Voting Trust
Agreement to be duly executed as of the date first above written.
CONTINENTAL AIRLINES, INC.
By: /s/ Jeffery A. Smisek
-----------------------
Jeffery A. Smisek
Executive Vice President,
General Counsel and Secretary
AIR PARTNERS, L.P.
By: Northwest Airlines
Corporation, as general
partner
By: /s/ Douglas M. Steenland
-------------------------
Douglas M. Steenland
Executive Vice President,
General Counsel and Secretary
NORTHWEST AIRLINES HOLDINGS
CORPORATION
By: /s/ Douglas M. Steenland
-------------------------
Douglas M. Steenland
Executive Vice President,
General Counsel and Secretary
[Signature Page to Voting Trust Agreement]
32
NORTHWEST AIRLINES CORPORATION
By: /s/ Douglas M. Steenland
-------------------------
Douglas M. Steenland
Executive Vice President,
General Counsel and Secretary
WILMINGTON TRUST COMPANY
By: /s/ W. Chris Sponenberg
-------------------------
W. Chris Sponenberg
Assistant Vice President
[Signature Page to Voting Trust Agreement]
33
Schedule I
[Download Table]
Air Partners 7,678,522* shares of
Class A Common Stock
Northwest Airlines Corporation 982,702 shares of
Class A Common Stock
---------------
* Does not include 853,644 shares of which NPC has acquired Beneficial
Ownership pursuant to a proxy granted in the Investment Agreement.
Exhibit A
NORTHWEST AIRLINES/AIR PARTNERS VOTING TRUST CERTIFICATE
THIS VOTING TRUST CERTIFICATE IS SUBJECT
TO RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER,
PLEDGE, HYPOTHECATION, GIFT OR OTHER DISPOSITION
AS SET FORTH IN THE VOTING TRUST AGREEMENT
REFERRED TO BELOW
No. __________ ________ Shares of
[Class A] [Class B] Common Stock
Continental Airlines, Inc.
Incorporated under the Laws of the State of Delaware.
THIS IS TO CERTIFY THAT, subject to the provisions hereof and of the
Northwest Airlines/Air Partners Voting Trust Agreement dated as of the 20th day
of November, 1998 (the "Voting Trust Agreement") among Continental Airlines,
Inc., a Delaware corporation (the "Company"), Air Partners, L.P., a Texas
limited partnership, Newbridge Parent Corporation, a Delaware corporation,
Northwest Airlines Corporation, a Delaware corporation, and Wilmington Trust
Company (the "Trustee"), not in its individual capacity but solely as Trustee,
on the surrender hereof, properly endorsed, ____________________ (the
"Depositing Stockholder") will be entitled to receive on the Standstill
Termination Date (as defined in the Voting Trust Agreement) a certificate or
certificates, expressed to be fully paid and non-assessable, for __________
shares of [Class A] [Class B] Common Stock, represented by this Certificate, of
the Company, or its successor, and in the meantime, subject to the provisions of
the Voting Trust Agreement, is entitled to receive payments equal and of like
character to the dividends, if any, received by the Trustee, if any, upon the
number of shares of [Class A] [Class B] Common Stock held by the Trustee for the
Depositing Stockholder, less such charges and expenses as are authorized by the
Voting Trust Agreement to be deducted therefrom and less any income or other
taxes required by law to be deducted therefrom.
Until actual delivery of the stock certificates called for hereby
following the termination of the Voting Trust Agreement, the Trustee, upon the
terms and subject to the
provisions stated in the Voting Trust Agreement, shall possess and shall be
entitled to exercise all rights and powers of the owners of such [Class A]
[Class B] Common Stock to vote for every purpose and to consent to any and all
corporate acts of the Company; it being expressly stipulated that except as
expressly provided in the Voting Trust Agreement, no right to vote such [Class
A] [Class B] Common Stock and no right to consent in respect of such [Class A]
[Class B] Common Stock is created or passes to any holder hereof by or under
this Certificate or by or under any agreement express or implied.
This Certificate is issued under and pursuant to, and the rights of
each successive holder hereof are subject to and limited by, the terms and
provisions of a certain Voting Trust Agreement, one copy of which is on file at
the principal office of the Company at Continental Tower, 1600 Smith Street,
Houston, Texas 77002, and one copy of which is on file in the registered office
of the Company in the State of Delaware. Each holder of this Certificate by the
acceptance hereof assents and agrees to be bound by all the provisions of the
Voting Trust Agreement.
This Certificate shall not be sold, assigned, transferred, pledged,
hypothecated, given away or in any other manner disposed of or encumbered,
whether voluntarily, involuntarily or by operation of law, except as may be
permitted pursuant to the terms of the Voting Trust Agreement, subject to such
regulations as may be established by the Trustee for that purpose, upon
surrender hereof at the office of the Trustee, properly endorsed for transfer,
and the Trustees may treat the holder of record hereof as the owner of this
Certificate for all purposes. Every transferee of this Certificate shall by the
acceptance hereof become a party to the Voting Trust Agreement with like force
and effect as though an original party thereto and shall be included within the
meaning of the term "Depositing Stockholders" wherever used therein.
As a condition of making or permitting any transfer or delivery of
stock certificates or Voting Trust Certificates, the Trustee may require the
payment of a sum sufficient to pay or reimburse it for any stamp tax or other
governmental charge in connection therewith, or any other charges applicable to
such transfer or delivery.
The Voting Trust Agreement and this Certificate may be amended at any
time and from time to time in the manner provided in the Voting Trust Agreement.
The Voting Trust Agreement and
2
the trust created thereunder shall remain in full force and effect until the
Standstill Termination Date.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
signed on its behalf by one of its number.
Dated: ______________________
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By:_________________________
Name:
Title:
3
Dates Referenced Herein and Documents Incorporated by Reference
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