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EXHIBIT 99.8
STANDSTILL AGREEMENT
This Standstill Agreement, dated as of November 15, 2000, among
Continental Airlines, Inc., a Delaware corporation ("Continental"), Northwest
Airlines Holdings Corporation, a Delaware corporation ("NW Holdings"), Northwest
Airlines Corporation, a Delaware corporation ("NW Parent"), and Northwest
Airlines, Inc., a Minnesota corporation ("Northwest").
WHEREAS, Continental, NW Holdings, NW Parent, Northwest and Air
Partners, L.P. have entered into that certain Omnibus Agreement dated as of
November 15, 2000 (the "Omnibus Agreement");
WHEREAS, as provided in the Omnibus Agreement, at the Closing,
Continental will repurchase from NW Holdings, NW Parent, Northwest and their
Affiliates 6,685,279 shares of the Class A Common Stock, and in connection with
the Reclassification, each issued share of Class A Common Stock, including the
remaining shares owned by NW Holdings, NW Parent, Northwest and their
Affiliates, will be reclassified, changed and converted, into 1.32 shares of
Class B Common Stock;
WHEREAS, Continental, NW Holdings, NW Parent and Northwest desire to
establish in this Standstill Agreement certain terms and conditions that will
become effective at the Effective Time concerning the acquisition, disposition
and voting of securities of Continental by NW Holdings, NW Parent, Northwest and
their Affiliates, and related provisions concerning the relationship of NW
Holdings, NW Parent, Northwest and their Affiliates with Continental; and
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WHEREAS, the parties' entering into this Standstill Agreement is a
condition to the parties entering into the Omnibus Agreement.
NOW, THEREFORE, Continental, NW Holdings , NW Parent and Northwest,
intending to be legally bound, hereby agree, from and after the Effective Time
until the termination of this Standstill Agreement in accordance with its terms,
as follows:
SECTION 1
STANDSTILL AND VOTING
Section 1.01. Acquisition of Voting Securities: (a) NW Holdings, NW
Parent and Northwest each covenant and agree that each of them and their
respective Affiliates shall not Beneficially Own any Voting Securities in excess
of the Permitted Percentage.
(b) Except as expressly provided herein, NW Holdings, NW Parent and
Northwest shall not permit any Affiliate of any of them to Beneficially Own any
Voting Securities that, when added to the Voting Securities Beneficially Owned
by NW Holdings, NW Parent and Northwest and their respective Affiliates, shall
exceed the Permitted Percentage.
(c) If at any time any of NW Holdings, NW Parent and Northwest becomes
aware that it and its Affiliates Beneficially Own Voting Securities in excess of
the Permitted Percentage, then NW Parent shall promptly notify Continental, and
NW Holdings, NW Parent and Northwest shall promptly take all actions necessary
to reduce the amount of Voting Securities Beneficially Owned by such Persons to
an amount not greater than the Permitted Percentage.
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Section 1.02. Voting Agreement - Voting Securities. NW Holdings, NW
Parent and Northwest shall cause the Voting Securities Beneficially Owned by
them and their Affiliates (a) to be voted or consented on all matters submitted
to a vote of Continental's stockholders, other than the election of directors,
either (i) in the case of a vote at a stockholders meeting, in the same
proportion as the votes cast by other holders of Voting Securities, and (ii) in
the case of written consents, so that the percentage of Voting Securities
Beneficially Owned by them consented to on any matter equals the percentage of
all other outstanding Voting Securities so consented; provided, that with
respect to any vote on a CO Change of Control, such shares may be voted at the
direction of NW Holdings and (b) in the election of directors, to be voted, at
the option of NW Holdings, either (i) as recommended by the Board of Directors
or (ii) in the same proportion as the votes cast by the other holders of Voting
Securities.
Section 1.03. Further Restrictions on Conduct-Voting Securities. NW
Holdings, NW Parent and Northwest, as applicable, covenant and agree that:
(a) except in connection with the performance of the Alliance Agreement
and the negotiation of the agreements contemplated thereby, and except in
connection with the exercise of rights expressly granted to the holder of the
Series B Preferred Stock by the Certificate of Incorporation, including the
Certificate of Designations for the Series B Preferred Stock, none of NW
Holdings, NW Parent, Northwest or any of their respective Affiliates shall
otherwise act, alone or in concert with others, to seek to affect or influence
the Board of Directors or the control of the management of Continental or the
businesses, operations, affairs, financial matters or policies of
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Continental, including, without limitation, taking any action to seek
representation on the Board of Directors or the board of directors of any
Affiliate of Continental (it being agreed that this paragraph shall not prohibit
NW Holdings and its Subsidiaries, and their respective directors, officers and
employees, from (i) engaging in ordinary course business activities with
Continental and its Subsidiaries or (ii) having nonpublic lawful communications
with directors, officers and employees of Continental regarding ordinary course
business activities, it being understood that such matters shall not include
matters that, under applicable antitrust laws, could not lawfully be discussed
among competitors);
(b) none of NW Holdings, NW Parent, Northwest or any of their
Affiliates shall (i) deposit any Voting Securities Beneficially Owned by any of
them into any voting trust or (ii) subject any such Voting Securities to any
proxy (other than a revocable proxy granted to any director, officer or employee
of NW Holdings, NW Parent or Continental, or any counsel for Northwest, NW
Holdings or NW Parent, or any corporate trust officer or Wilmington Trust
Company or a national trust company, in each case solely for the limited purpose
of voting the Voting Securities as required or permitted by this Standstill
Agreement, the voting direction for which has been given by NW Holdings, NW
Parent or Northwest), agreement, arrangement or understanding (written or
otherwise) with respect to the voting of or consenting with respect to such
Voting Securities or other agreement, arrangement or understanding (written or
otherwise) having similar effect;
(c) none of NW Holdings, NW Parent, Northwest or any of their
respective Affiliates shall initiate or propose any stockholder proposal or
action or make, or in any way participate in or encourage, directly or
indirectly, any "solicitation" of "proxies" (as such terms are defined in
Regulation 14A under the Exchange Act, as in effect on the date hereof) to vote
or provide written consents with respect to, or seek to influence any Person
(other than each other
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with respect to the immediately succeeding clause) with respect to the voting of
or consenting with respect to, any Voting Securities, or become a "participant"
in a "solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act, as in effect on the date hereof) in any election contest with
respect to the election or removal of any director of Continental or in
opposition to the recommendation of the majority of the directors of Continental
with respect to any other matter;
(d) none of NW Holdings, NW Parent, Northwest or any of their
respective Affiliates shall join a partnership, limited partnership, syndicate
or other group, or otherwise act in concert with any other Person (other than
with each other as expressly permitted hereunder with respect to holding, voting
or disposing of Voting Securities) or otherwise become a "person" within the
meaning of Section 13(d)(3) of the Exchange Act (other than among themselves as
expressly permitted hereunder with respect to holding, voting or disposing of
Voting Securities), for the purpose of acquiring, holding, voting or disposing
of Voting Securities;
(e) none of NW Holdings, NW Parent, Northwest or any of their
respective Affiliates shall induce or attempt to induce or give encouragement to
any other Person to initiate, or initiate themselves, any proposal or tender or
exchange offer for Voting Securities or change of control of Continental,
including a CO Change of Control;
(f) none of NW Holdings, NW Parent, Northwest or any of their
respective Affiliates shall request Continental (or any of its directors,
officers, employees or agents), directly or indirectly, to amend or waive any of
the provisions of this Standstill Agreement (except in a manner that shall not
require disclosure publicly or to third parties); and
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(g) none of NW Holdings, NW Parent, Northwest or any of their
respective Affiliates shall take any action inconsistent with the foregoing;
provided that the restrictions set forth above in this Section 1.03 shall not
apply (i) to any vote by NW Holdings or NW Parent with respect to a CO Change of
Control as permitted by Section 1.02 of this Standstill Agreement or (ii) to
Northwest acting as an alliance partner pursuant to the Alliance Agreement.
Section 1.04 Reports. During the term of this Standstill Agreement, NW
Holdings shall deliver to Continental, promptly after any Transfer of Voting
Securities by NW Holdings, NW Parent, Northwest or any of their respective
Affiliates, an accurate written report specifying the amount and class of Voting
Securities so Transferred and the amount of each class of Voting Securities
owned by them after giving effect to such Transfer; provided, however, that such
reporting obligation may be satisfied with respect to any such Transfer that is
reported in a statement on Schedule 13D pursuant to the Exchange Act and the
rules thereunder by delivering promptly to Continental a copy of such Schedule
13D statement. Continental shall be entitled to rely on such reports and
statements on Schedule 13D for all purposes of this Standstill Agreement.
SECTION 2
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties of Continental.
Continental represents and warrants to NW Holdings, NW Parent and Northwest that
(a) Continental is a corporation duly organized, validly existing and in good
standing under the laws of the State of
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Delaware and has the corporate power and authority to enter into this Standstill
Agreement and to carry out its obligations hereunder, (b) the execution and
delivery of this Standstill Agreement by Continental and the consummation by
Continental of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Continental and no other corporate
proceedings on the part of Continental are necessary to authorize this
Standstill Agreement or any of the transactions contemplated hereby, and (c)
this Standstill Agreement has been duly executed and delivered by Continental
and constitutes a valid and binding obligation of Continental, and is
enforceable against Continental in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
in a proceeding at equity or at law).
Section 2.02. Representations and Warranties of NW Holdings. NW
Holdings represents and warrants to Continental that (a) NW Holdings, NW Parent
and Northwest are corporations duly organized, validly existing and in good
standing under the laws of the state of their respective states of incorporation
and each has the power and authority to enter into this Standstill Agreement and
to carry out its respective obligations hereunder, (b) the execution and
delivery of this Standstill Agreement by NW Holdings, NW Parent and Northwest
and the consummation thereby of the transactions contemplated hereby have been
duly authorized by all necessary action on their parts and no other proceedings
on their parts are necessary to authorize this Standstill Agreement or any of
the transactions contemplated hereby, and (c) this Standstill Agreement has been
duly executed and delivered by each of NW Holdings, NW Parent and Northwest and
constitutes a valid and binding obligation of each of them, and is enforceable
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against each of them in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors' rights generally from time to time in
effect and to general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether in a
proceeding at equity or at law).
SECTION 3
MISCELLANEOUS
Section 3.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy) and shall be
given,
if to Continental, to:
Continental Airlines, Inc.
0000 Xxxxx Xxxxxx, Xxxx. XXXXX
Xxxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel and Chief Financial Officer
with a copy to (which shall not constitute notice to Continental):
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx
and
Morris, Nichols, Arsht & Xxxxxxx
0000 X. Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
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if to NW Holdings, to:
Northwest Airlines Holdings Corporation
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Counsel
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx
Fax: (000) 000-0000
if to NW Parent, to:
Northwest Airlines Corporation
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx
Fax: (000) 000-0000
if to Northwest, to:
Northwest Airlines Corporation
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx
Fax: (000) 000-0000
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or such address or telecopy number as such party may hereafter specify for the
purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered personally, telegraphed,
or telecopies, or, if mailed, five business days after the date of the mailing.
Section 3.02. Amendments; No Waivers.
(a) Any provision of this Standstill Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by the parties hereto, or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 3.03. Successors and Assigns. The provisions of this Standstill
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 3.04. Governing Law; Consent to Jurisdiction. (a) This
Standstill Agreement shall be construed in accordance with and governed by the
internal laws of the State of Delaware.
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(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 Standstill
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) 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 form. 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 3.01 shall be deemed
effective service of process on such party.
Section 3.05. Counterparts; Effectiveness. This Standstill Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Standstill Agreement shall become effective when each party
hereto shall have received counterparts thereof signed by the other party
hereto.
Section 3.06. Specific Performance. The parties hereto each acknowledge
and agree, and agree not to assert otherwise in any proceeding, that a breach or
threatened breach of any of the provisions of this Standstill Agreement by a
party will cause irreparable injury to the other parties to this Standstill
Agreement for which remedies at law would be inadequate and, in
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recognition of that fact, agrees that, in the event of a breach or threatened
breach by any of them of the provisions of this Standstill Agreement, in
addition to any remedies at law, the aggrieved party, without posting any bond
and without any showing of irreparable injury, shall be entitled to obtain
equitable relief in the form of specific performance, a temporary restraining
order, a temporary or permanent injunction or any other equitable remedy which
may then be available. The provisions of this Section 3.06 are without prejudice
to any other rights that the parties hereto may have for any breach of this
Standstill Agreement. The parties further agree not to assert in any proceeding
that grounds for any equitable relief are not satisfied.
Section 3.07. Severability. If any term, provision, covenant or
restriction of this Standstill Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Standstill Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, provided that the parties hereto shall negotiate in good faith to
attempt to place the parties in the same position as they would have been in had
such provision not been held to be invalid, void or unenforceable.
Section 3.08. Non-Exclusivity. No action or transaction taken in
accordance with the express provisions of, and as expressly permitted by, any
provision of this Standstill Agreement shall be treated as a breach of any other
provision of this Standstill Agreement, notwithstanding that such action or
transaction shall not have been expressly excepted from such latter provision.
Section 3.09. Effective Time; Termination. This Standstill Agreement
shall become effective at the Effective Time and shall terminate on the earlier
to occur of (a) the
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termination of the Alliance Agreement in accordance with its terms and (b)
Continental publicly announcing that it is seeking, or has entered into an
agreement with, a Person to acquire a majority of the outstanding Voting
Securities, whether by merger, tender offer or otherwise, or to acquire all or
substantially all of Continental's airline assets.
SECTION 4
DEFINITIONS
For purposes of this Standstill Agreement, the following terms shall
have the following meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Standstill Agreement); provided,
that none of the B/C/P Group shall be an Affiliate of NW Parent, NW Holdings or
Northwest for purposes of this Agreement.
"Alliance Agreement" shall mean that certain Master Alliance Agreement
dated as of January 25, 1998 between Northwest Airlines, Inc., an indirect
wholly owned subsidiary of NW Holdings, and Continental, as in effect on the
Closing, as such agreement may be subsequently amended from time to time.
"Associate" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement).
"Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial 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.
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"Board of Directors" shall mean the board of directors of Continental.
"B/C/P Group" means Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxx or Xxxxxxx X. Xxxxx,
III, or any Person with respect to which one or more of them (i) directly or
indirectly controls at least 50.1% of the voting power, (ii) directly or
indirectly controls at least 50.1% of the equity, or (iii) directly or
indirectly controls in a manner substantially similar to the control that the
general partner of Air Partners, L.P., a Texas limited partnership ("Air
Partners"), had over Air Partners pursuant to and as provided in the
"Partnership Agreement" (as defined in the Investment Agreement, dated as of
January 25, 1998, among NW Parent, NW Holdings, Air Partners, the Partners of
Air Partners signatory thereto, Bonderman Family Limited Partnership, 1992 Air,
Inc. and Air Saipan, Inc., as amended), which Persons described in clause (iii)
shall include 1998 CAI Partners, L.P., a Texas limited partnership, under its
partnership agreement and ownership structure in effect on November 20, 1998.
"Class A Common Stock" shall mean shares of Class A Common Stock, par
value $.01 per share, previously authorized by the amended and restated
certificate of incorporation of Continental, which will be reclassified into
Class B Common Stock in the Recapitalization.
"Class B Common Stock" shall mean shares of Class B Common Stock, par
value $0.01 per share, of Continental.
"Closing" shall have the meaning set forth in the Omnibus Agreement.
"CO Change of Control" shall have the meaning ascribed to such term in
the Certificate of Designation for the Series B Preferred Stock.
"Effective Time" shall have the meaning set forth in the Omnibus
Agreement.
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"Exchange Act" shall mean the Securities Exchange Act of 1934.
"Omnibus Agreement" shall mean the Omnibus Agreement dated as of
November 15, 2000 among Continental, NW Holdings, NW Parent, Northwest and Air
Partners, L.P., as such agreement may be subsequently amended from time to time.
"Permitted Percentage" shall mean the percentage of outstanding Voting
Securities represented by the Shares immediately following the Effective Time;
provided, however, that if NW Holdings, NW Parent, Northwest or any of their
Affiliates shall Transfer any of the Shares such that they no longer
Beneficially Own such Shares, the Permitted Percentage shall be reduced to the
percentage of outstanding Voting Securities represented by the Shares
Beneficially Owned by them immediately after such Transfer; and provided
further, that if the Voting Securities Beneficially Owned by NW Holdings, NW
Parent, Northwest and their respective Affiliates exceed the Permitted
Percentage then in effect solely by reason of (i) a decrease in the outstanding
Voting Securities or (ii) the rights issued to NW Holdings, NW Parent, Northwest
and their respective Affiliates under the "Rights Agreement" (as defined in the
Omnibus Agreement) having been distributed or having become exercisable, then
the percentage of the outstanding Voting Securities Beneficially Owned by them
as a result of the occurrence of (i) or (ii) shall become the Permitted
Percentage.
"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.
"Reclassification" shall have the meaning set forth in the Omnibus
Agreement.
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"Series B Preferred Stock" shall mean the Series B Preferred Stock of
Continental issued to Northwest as provided in the Omnibus Agreement.
"Shares" shall mean the shares of Class B Common Stock Beneficially
Owned by NW Holdings, NW Parent, Northwest and their respective Affiliates,
immediately following the Effective Time.
"Subsidiary" shall mean, as to any Person, any Person at least a
majority of the shares of stock or other equity interests of which having
general voting power under ordinary circumstances to elect a majority of the
board of directors (or comparable governing body) thereof (irrespective of
whether or not at the time stock or equity of any other class or classes shall
have or might have voting power by reason of the happening of any contingency)
is, at the time as of which the determination is being made, owned by such
Person, or one or more of its Subsidiaries or by such Person and one or more of
its Subsidiaries.
"13D Group" shall mean any group of Persons acquiring, holding, voting
or disposing of Voting Securities which would be required under Section 13(d) of
the Exchange Act and the rules and regulations thereunder (as in effect, and
based on legal interpretations thereof existing, on the date hereof) to file a
statement on Schedule 13D with the Securities and Exchange Commission as a
"person" within the meaning of Section 13(d)(3) of the Exchange Act if such
group beneficially owned Voting Securities representing more than 5% of any
class of Voting Securities then outstanding.
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"Transfer" shall mean any sale, exchange, transfer, pledge, encumbrance
or other disposition, and "to Transfer" shall mean to sell, exchange, transfer,
pledge, encumber or otherwise dispose of.
"Voting Securities" shall mean at any time shares of any class of
capital stock of Continental that are then entitled to vote generally in the
election of directors including, without limitation, Class B Common Stock.
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IN WITNESS WHEREOF, the parties hereto have caused this Standstill
Agreement to be executed as of the date first referred to above.
NORTHWEST AIRLINES HOLDINGS
CORPORATION
By:
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Executive Vice President, General
Counsel and Secretary
NORTHWEST AIRLINES CORPORATION
By:
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Executive Vice President, General
Counsel and Secretary
NORTHWEST AIRLINES, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxxxxx
Executive Vice President, General
Counsel and Secretary
CONTINENTAL AIRLINES, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President, General
Counsel and Secretary
[SIGNATURE PAGE TO STANDSTILL AGREEMENT]
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