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Exhibit 10.1
STOCKHOLDERS' AGREEMENT
Among
GALILEO INTERNATIONAL, INC.
certain of its
STOCKHOLDERS
and certain
RELATED PARTIES OF SUCH STOCKHOLDERS
Dated as of _______________, 1997
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TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms........................................................................... 1
1.02. Other Defined Terms............................................................................. 4
ARTICLE II
BOARD REPRESENTATION; COMMITTEES
2.01. Size of the Board............................................................................... 6
2.02. Nomination of Directors......................................................................... 6
2.03. Vacancies....................................................................................... 7
2.04. Removal......................................................................................... 9
2.05. Classification of Directors..................................................................... 9
2.06. Committee....................................................................................... 10
2.07. Air Vendor Consultation Group................................................................... 10
ARTICLE III
RESTRICTIONS ON TRANSFER
3.01. General Restriction............................................................................. 11
3.02. Legends......................................................................................... 11
3.03. Restrictions on Certain Transfers of Shares..................................................... 12
3.04. Right of First Refusal.......................................................................... 12
3.05. Affiliate Transferees to Execute Agreement...................................................... 14
3.06. Sale to a Third Party........................................................................... 14
3.07. Restrictions on Certain Transfers of Shares of Preferred Stock.................................. 15
3.08. Improper Sale................................................................................... 15
3.09. Limitation on Dispositions...................................................................... 16
ARTICLE IV
CERTAIN AGREEMENTS
4.01. Certain Agreements.............................................................................. 17
4.02. No Solicitation................................................................................. 18
4.03. Issuances of Shares of Capital Stock............................................................ 18
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Section Page
ARTICLE V
MISCELLANEOUS
5.01. Further Action.................................................................................. 18
5.02. Representations................................................................................. 18
5.03. Specific Performance............................................................................ 18
5.04. Amendments and Waivers.......................................................................... 19
5.05. Notices......................................................................................... 19
5.06. Benefit; Successors and Assigns................................................................. 24
5.07. Arbitration..................................................................................... 24
5.08. Changes to Non-Competition Agreement............................................................ 26
5.09. Termination..................................................................................... 27
5.10. Miscellaneous................................................................................... 27
5.11. Tax Treatment................................................................................... 27
5.12. Tax Opinion..................................................................................... 27
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STOCKHOLDERS' AGREEMENT, dated as of ___________, 1997, among
GALILEO INTERNATIONAL, INC., a Delaware corporation (the "Company"), each of the
stockholders of the Company listed on Schedule A hereto and, with respect to
Articles IV and V only, each of the Persons listed on Schedule B hereto.
WHEREAS, the Original Owners (as defined below) immediately
prior to the consummation of the IPO (as defined below) collectively own 100% of
the shares of common stock, par value $0.01 per share, of the Company (the
"Common Stock");
WHEREAS, upon the consummation of the IPO, the Original Owners
will collectively own shares of Common Stock representing at least [__]% of the
outstanding shares of Common Stock;
WHEREAS, certain Original Owners own shares of Special Voting
Preferred Stock, par value $0.01 per share, of the Company, in Series A through
G (the "Preferred Stock"), which series of Preferred Stock are entitled to elect
a certain number of Original Owner Directors on the terms and conditions set
forth in the Restated Certificate of Incorporation (as such terms are defined
below);
WHEREAS, the parties hereto desire to set forth in writing
their understanding and agreement for the voting of shares of Common Stock held
by the Original Owners on certain matters, and for certain other courses of
conduct; and
WHEREAS, it is a condition precedent to the consummation of
the IPO that the parties enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person, other than the Company or any subsidiary of the Company, that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person. Without
limiting the foregoing, the parties acknowledge that the respective Persons
listed on Schedule B hereto are Affiliates of the respective Persons they are
identified as having a controlling interest in on Schedule A hereto.
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"Affiliated Person" means, with respect to any specified
Person, such Person's Affiliates, such Person's officers, directors and
employees, and the officers, directors and employees of such Affiliates.
"Agreement" or "this Agreement" means this Stockholders'
Agreement, dated as of _____, 1997, among the Company and each of the other
parties signatory hereto, and all amendments hereto made in accordance with the
provisions of Section 5.04.
"beneficial owner" or "beneficially own" has the meaning given
such term in Rule 13d-3 under the Exchange Act.
"Board" means the Board of Directors of the Company.
"Commission" means the Securities and Exchange Commission, and
any successor commission or agency having similar powers.
"control" (including the terms "controlled by" and "under
common control with"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Director" means a director of the Company
"Distributor" means a Person which has entered into, or enters
into, a Distributor Agreement with the Company.
"Distributor Agreement" means any distributor agreement
entered into between the Company and any Person.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Interest" means (i) with respect to an Original Owner that
owned, prior to the IPO, more than 2% of the Partnership's outstanding general
partnership interests, 1% or more of the outstanding shares of Common Stock, and
(ii) with respect to an Original Owner that owned, prior to the IPO, 2% or less
of the Partnership's outstanding general partnership interests, the number of
shares of Common Stock owned by such Original Owner on the closing of the IPO,
provided that such amount is at least 0.005% of the Common Stock outstanding
immediately following the IPO; provided, however, that if, at any time after the
IPO, the Company issues additional shares of Common Stock and, as a result of
such
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issuance, the number of shares of Common Stock owned by an Original Owner falls
below the percentage interest required by clause (i) or clause (ii) above, such
issuance shall be excluded from the determination of the Interest of such
Original Owner.
"IPO" means the underwritten initial public offering of shares
of Common Stock of the Company pursuant to an effective Registration Statement
on Form S-1 (File No.
333-27495) under the Securities Act.
"Merger" means the transaction or transactions whereby Galileo
International Partnership, a Delaware partnership, has merged with and into a
wholly-owned limited liability company subsidiary of the Company.
"Nonaffiliated Person" means, with respect to any specified
Person, any Person other than an Affiliated Person.
"Non-Competition Agreement" means a non-competition agreement
with the Company in the form attached hereto as Exhibit A, as such agreement may
be amended from time to time in accordance with its terms and pursuant to
Section 5.08 of this Agreement.
"Original Owners" means (i) the stockholders listed on
Schedule A hereto, (ii) any Affiliate of an Original Owner that is deemed to be
an Original Owner pursuant to Section 3.05 and (iii) any Permitted Preferred
Stock Transferee that is deemed to be an Original Owner pursuant to Section
3.06.
"Original Owner Director" means any Director elected pursuant
to the Restated Certificate of Incorporation by an Original Owner that owns one
or more shares of Preferred Stock.
"Parent Entities" means the Persons listed on Schedule B
hereto.
"Person" means any individual, partnership, firm, corporation,
association, trust, estate, unincorporated organization or other entity, as well
as any syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act.
"Pro Rata Number" means, with respect to a First Refusal
Original Owner or Prospective Buyer, as the case may be, a number of Shares
equal to the product of (a) the number of the Offered Shares and (b) a fraction
the numerator of which shall be the total number of the Shares owned
(immediately prior to the Sale of the Offered Shares) by such First Refusal
Original Owner or Prospective Buyer, as the case may be, and the denominator of
which shall be the total number of the Shares owned (immediately prior to the
Sale of the Offered Shares) by the First Refusal Original Owners and Prospective
Buyer.
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"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of ________ __, 1997 (as the same may be amended from time
to time), among the Company and each of the stockholders of the Company listed
on Schedule A hereto.
"Restated Certificate of Incorporation" means the Restated
Certificate of Incorporation of the Company, as amended from time to time.
"Restricted Shares" means all Shares other than (a) Shares
that have been registered under a registration statement pursuant to the
Securities Act, (b) Shares with respect to which a Sale has been made in
reliance on and in accordance with Rule 144 or (c) Shares with respect to which
the holder thereof shall have delivered to the Company either (i) an opinion, in
form and substance satisfactory to the Company, of counsel, who shall be
satisfactory to the Company, or (ii) a "no action" letter from the staff of the
Commission, to the effect that subsequent transfers of such Shares may be
effected without registration under the Securities Act.
"Sale" means any sale, assignment, transfer, distribution or
other disposition of Shares or of shares of Preferred Stock, as applicable, or
of a participation therein, whether voluntarily or by operation of law.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
"Share" means any share of Common Stock (i) beneficially owned
by an Original Owner immediately after the consummation of the IPO (excluding
any shares of Common Stock acquired in the IPO), (ii) acquired by an Original
Owner from any other Original Owner in accordance with Section 3.04, (iii)
acquired by a Prospective Affiliate Transferee in accordance with Section 3.05;
(iv) acquired by a Permitted Preferred Stock Transferee in accordance with the
first sentence of Section 3.06, or as contemplated by clause (y) of Section
3.07, or held by a Permitted Preferred Stock Transferee at the time of the
transfer to such Person of Shares in accordance with clause (x) of Section 3.07,
provided that, to the extent the shares of Common Stock held by such Permitted
Preferred Stock Transferee at the time of such transfer, when added to the
Shares transferred to such Person in accordance with clause (x) of Section 3.07,
represent more than 5% of the then outstanding shares of Common Stock, then only
such number of shares of Common Stock held by such Person at the time of such
transfer which, when added to the Shares transferred to such Person in
accordance with clause (x) of Section 3.07, represent 5% of the then outstanding
shares of Common Stock shall constitute "Shares"; (v) acquired by an Original
Owner that owns one or more shares of Preferred Stock for the purpose of
preserving its ability to elect one or more Original Owner Directors pursuant to
the terms of Section 4.3(d) of the Restated Certificate of Incorporation; (vi)
issued by way of a stock split of the Common Stock; or (vii) issued as (or
issuable upon the conversion or exercise of any warrant, rights, option or other
convertible security which is issued as) a dividend or other
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distribution with respect to, or in exchange for, or in replacement of, the
Common Stock referred to in clauses (i) through (vi) above.
"Third Party" means, with respect to any Original Owner, any
non-Affiliated Person (other than the Company or another Original Owner or any
Affiliate thereof), and "Third Parties" shall have a correlative meaning.
"Voting Securities" means, at any time, shares of any class
of capital stock of the Company that are then entitled to vote generally in the
election of Directors (other than shares of Preferred Stock); provided that for
purposes of this definition any securities which at such time are convertible or
exchangeable into or exercisable for shares of Common Stock shall be deemed to
have been so converted, exchanged or exercised.
SECTION 1.02. Other Defined Terms. The following terms shall
have the meanings defined for such terms in the sections set forth below:
Term Section
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Acquiring Owner 4.01(b)
Aer Lingus Schedule B
Air Canada Schedule B
Air Vendor Consultation Group 2.07
Alitalia Schedule B
Arbitration Request 5.07
Arbitrator 5.07
Association 5.07
Austrian Airlines Schedule B
Award 5.07(v)
British Airways Schedule B
Code 2.06(c)
Commencement Date 5.07(i)
Common Stock Recitals
Company Preamble
Coporga Schedule A
Covia Schedule A
Dispute Notice 5.07
DSI Schedule A
elector 5.07
First Refusal Original Owners 3.04
First Refusal Price 3.04
Independent Director 2.02(iii)
Investment Bank 4.01(b)
KLM Schedule B
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Management Directors 2.02(ii)
Notice of Exercise 3.04(b)
Notice of Intention 3.04(a)
Offer 4.01(b)
Offered Shares 3.04(a)
Olympic Schedule B
Olynet Schedule A
Option Period 3.04(b)
Partnership 5.11
Permitted Preferred Stock Transferee 3.07
Petitioner 5.07
Proposal 4.01(b)
Prospective Affiliate Transferee 3.05
Prospective Buyer 3.04(a)
Racom Schedule A
Replacement Original Owner Director 2.03(a)
Resnet Schedule A
Respondent 5.07
Response 5.07(ii)
Retford Schedule A
Roscor Schedule A
Selling Original Owner 3.04
Significant Transaction 2.01
Statement 5.07
SwissAir Schedule B
TAP Schedule B
Third Party Transferee 3.06
TIS Schedule A
Travidata Schedule A
United Schedule B
USAM Schedule A
USAW Schedule B
ARTICLE II
BOARD REPRESENTATION; COMMITTEES
SECTION 2.01. Size of the Board. The Company shall take such
actions as are necessary, and each of the Original Owners shall vote its Shares
and shall take such other actions as are necessary, to cause the Board at all
times from and after the consummation of the IPO until the tenth anniversary of
the date hereof to consist of 13 members unless the
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Company and the Original Owners then party to this Agreement who hold shares of
one or more series of Preferred Stock entitled to elect directors to the Board
pursuant to the terms of the Restated Certificate of Incorporation unanimously
agree otherwise; provided, however, that in connection with a Significant
Transaction, the size of the Board may be increased by majority vote of the
whole Board to the extent such increase in the size of the Board is proportional
(rounded to the nearest whole number) to the increase in the number of shares of
Common Stock outstanding as a result of the issuance of shares of Common Stock
in connection with such Significant Transaction. For purposes of this Agreement,
a "Significant Transaction" means an acquisition, merger, or issuance of
securities to a single Person or group of Persons (other than an underwriter or
group of underwriters) in which shares of Common Stock constituting at least a
percentage of the then outstanding shares of Common Stock (on a fully diluted
basis) equal to the number expressed as a percentage obtained by dividing one by
the then number of Board seats are issued; provided that, in no event will any
transaction involving the issuance of shares constituting less than 5% of the
then outstanding shares of Common Stock (on a fully diluted basis) constitute a
Significant Transaction.
SECTION 2.02. Nomination of Directors. The Company shall take
such actions as are necessary, and each of the Original Owners shall vote its
Shares and shall take, and shall cause any Director elected by it pursuant to
the terms of any series of Preferred Stock held by it to take, such other
actions as are necessary, to cause the Board, at all times from and after the
consummation of the IPO until the tenth anniversary of the date hereof, to
include the following Directors elected or nominated as follows:
(i) Original Owner Directors. Each Original Owner owning
Shares and shares of one or more series of Preferred Stock shall be
entitled to elect such number of individuals to serve as Original Owner
Directors as such series of Preferred Stock shall be entitled to elect
pursuant to the Restated Certificate of Incorporation.
(ii) Management Directors. The Chief Executive Officer, the
Chief Operating Officer and the Chief Financial Officer of the Company
shall be nominated by the Board to be elected as Directors (the
"Management Directors"); provided, however, that until the Company
shall have a Chief Operating Officer, the General Counsel of the
Company shall be nominated to be elected as a Management Director. The
initial Chief Executive Officer shall serve as the Chairman of the
Board. Thereafter, the Board will determine which Director will be the
Chairman of the Board.
(iii) Independent Directors. Three individuals shall be
nominated by the Board to be elected as Directors, each of whom shall
be an "independent director", as such term is used in Rule 303 of the
Rules of the New York Stock Exchange as in existence on the date hereof
or as amended from time to time thereafter (an "Independent Director").
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(iv) Replacement Original Owner Directors. In the event that
the share of any series of Preferred Stock is redeemed by the Company,
the vacancy resulting from such event shall be filled by the Board with
an Independent Director, as more fully set forth in Section 2.03.
SECTION 2.03. Vacancies. (a) In the event an Original Owner
that owns shares of one or more series of Preferred Stock ceases to own Shares
constituting the applicable percentage of the outstanding Common Stock entitling
the series of Preferred Stock held by such Original Owner to elect any one or
more Original Owner Directors, or the share of such series of Preferred Stock is
redeemed for any other reason pursuant to Section 4.3(f) of the Restated
Certificate of Incorporation, then the Original Owner Director who was
previously elected by the holder of such series of Preferred Stock shall be
deemed to have resigned effective immediately upon the occurrence of such event,
and such Original Owner and the Company shall take all actions necessary to give
effect to such resignation; provided, however, that if an Original Owner's share
or shares of Preferred Stock has or have been redeemed pursuant to Section
4.3(f)(3) of the Restated Certificate of Incorporation due to the fact that such
Original Owner has given the Company notice of its intention to terminate its
Non-Competition Agreement, then the Company shall provide to such Original Owner
during the period between the date on which such share or shares of Preferred
Stock is or are redeemed and the date on which such Original Owner's
Non-Competition Agreement terminates the same financial information as the
Company provides to the Board, except to the extent the Independent Directors
determine that it would be inappropriate for such Original Owner to receive any
particular portion of such financial information in light of the fact that such
Original Owner has delivered to the Company a notice of its intention to
terminate its Non-Competition Agreement. Any vacancy resulting from any such
resignation shall be filled with an Independent Director chosen by a majority of
the whole Board (such individual, a "Replacement Original Owner Director");
provided that if any such vacancy results from the transfer by such Original
Owner of Shares and the share of any series of Preferred Stock to (i) a
Permitted Preferred Stock Transferee and the holder of such series of Preferred
Stock continues to be entitled to elect an individual to the Board pursuant to
the Restated Certificate of Incorporation, or (ii) another Original Owner as a
result of which the holder of the share of such series of Preferred Stock
continues to be entitled to elect an individual to the Board pursuant to the
Restated Certificate of Incorporation, any such vacancy shall be filled in
accordance with the relevant provisions of the Restated Certificate of
Incorporation; and provided further that no Original Owner may transfer the
share of a series of Preferred Stock other than in accordance with this
Agreement and the Restated Certificate of Incorporation.
(b) In the event a vacancy on the Board occurs as a result of
the death, disability, resignation, removal or otherwise of a Director (other
than the resignation of an Original Owner Director as set forth in Section
2.03(a)), such vacancy shall be filled as follows:
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(i) In the event such vacancy results from the death,
disability, resignation, removal or otherwise of an
Independent Director, such vacancy shall be filled
with another Independent Director chosen by a
majority of the whole Board.
(ii) In the event such vacancy results from the death,
disability, resignation, removal or otherwise of a
Management Director, such vacancy shall be filled by
the Board with the successor Chief Executive Officer,
Chief Financial Officer or Chief Operating Officer
(or General Counsel in the absence of such Chief
Operating Officer), as the case may be, or any other
officer acting in such capacity at the direction of
the Board or the Chief Executive Officer.
(iii) In the event such vacancy results from the death,
disability, resignation, removal or otherwise of an
Original Owner Director, such vacancy shall be filled
by the Original Owner that holds the share of the
series of Preferred Stock that was entitled to elect
the Original Owner Director so ceasing to be a
Director in accordance with the provisions of the
Restated Certificate of Incorporation.
(iv) In the event such vacancy results from the death,
disability, resignation, removal or otherwise of a
Replacement Original Owner Director, such vacancy
shall be filled with an Independent Director chosen
by a majority of the whole Board.
(c) The Directors chosen under subsections (a) and (b) of this
Section 2.03 shall hold office until the next election of the class for which
such Directors were chosen and until their successors shall have been elected
and qualified.
SECTION 2.04. Removal. As provided in the Restated Certificate
of Incorporation, any Original Owner that holds the share of a series of
Preferred Stock may, at any time in its sole discretion, remove the Original
Owner Director elected by such series of Preferred Stock, and elect another
individual to serve in the stead of such removed Original Owner Director;
provided that such removal and election be pursuant to a written notice to the
Company complying with Section 5.05 and identifying the individual to serve in
the stead of such removed Director. The Company shall promptly inform the other
Original Owners of such removal and election. The vacancy resulting from such
removal shall be filled in accordance with Section 2.03(b)(iii).
SECTION 2.05. Classification of Directors. The Company shall
take such actions as are necessary, and each of the Original Owners shall vote
its Shares, elect its Original Owner Directors and take such other actions as
are necessary, to cause the classes
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of Directors to consist of the following Management Directors, Original Owner
Directors and Independent Directors:
(a) The Directors whose terms will expire at the first annual
meeting of the stockholders of the Company following the consummation
of the IPO shall consist of the General Counsel of the Company, one
Original Owner Director elected by Covia, one Original Owner Director
elected in accordance with Section 2.05(d) by an Original Owner whose
Parent Entity is based in Europe, and one Independent Director;
(b) The Directors whose terms will expire at the second annual
meeting of the stockholders of the Company following the consummation
of the IPO shall consist of the Chief Financial Officer of the Company,
one Original Owner Director elected by Covia, one Original Owner
Director elected in accordance with Section 2.05(d) by an Original
Owner whose Parent Entity is based in Europe, and one Independent
Director;
(c) The Directors whose terms will expire at the third annual
meeting of the stockholders of the Company following the consummation
of the IPO shall consist of the Chief Executive Officer of the Company,
one Original Owner Director elected by Covia, one Original Owner
Director elected by USAM, one Original Owner Director elected in
accordance with Section 2.05(d) by an Original Owner whose Parent
Entity is based in Europe, and one Independent Director;
(d) The Original Owners that hold the shares of any series of
Preferred Stock and whose Parent Entities are based in Europe shall
determine among themselves which of them shall be entitled to elect an
Original Owner Director to each of the classes described in Sections
2.05(a), (b) and (c).
SECTION 2.06. Committees. (a) The Company and each of the
Original Owners shall take such actions as are necessary to cause the Board at
all times to designate annually the following committees of the Board:
(i) A Nominating Committee, which shall review, report and
make recommendations to the Board on the following matters: other than
with respect to Original Owner Directors, and consistent with the terms
of this Agreement, nominees for Directors, selection criteria for
Directors, and removal of Directors if deemed appropriate; evaluation
and performance of the Board and individual Directors; and such other
matters as the Board may from time to time prescribe.
(ii) An Audit Committee, which shall review, report and make
recommendations to the Board on the following matters: the selection of
independent auditors; the fees to be paid to such auditors; the
adequacy of the audit and
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accounting procedures of the Company; and such other matters as the
Board may from time to time prescribe.
(iii) A Compensation Committee, which shall review, report and
make recommendations to the Board on the following matters: the
management remuneration policies of the Company, including salary rates
and fringe benefits of appointed officers; other remuneration plans
such as incentive compensation, deferred compensation and stock option
plans; directors' compensation and benefits; and such other matters as
the Board may from time to time prescribe.
(b) The Nominating Committee shall include (i) at least one
Original Owner Director elected by an Original Owner whose Parent Entity is
based in Europe and (ii) at least one Original Owner Director elected by an
Original Owner whose Parent Entity is based in North America. In addition, the
Nominating Committee shall include at least one Management Director and one
Independent Director. The initial Chief Executive Officer of the Company shall
be the initial Management Director on the Nominating Committee.
(c) The Compensation Committee shall include (i) at least one
Original Owner Director elected by an Original Owner whose Parent Entity is
based in Europe and (ii) at least one Original Owner Director elected by an
Original Owner whose Parent Entity is based in North America. In addition, the
Compensation Committee shall include at least one Independent Director and one
Management Director (and the initial Chief Executive Officer shall be the
initial Management Director on the Compensation Committee). Notwithstanding the
foregoing, the membership of the Compensation Committee shall be adjusted to the
extent necessary so that (i) it is comprised of two or more "non-employee
directors" within the meaning of Rule 16b-3(b)(3)(i) promulgated under the
Exchange Act and (ii) it is comprised of two or more "outside directors" within
the meaning of Treas. Reg. Section 1.162-27(e)(3) promulgated under Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), except to
the extent that the Company may continue to rely on the transition relief
provided pursuant to the Treas. Reg. Section 1.162-27(f) promulgated under
Section 162(m) of the Code.
SECTION 2.07. Air Vendor Consultation Group. As promptly as
practicable after the date hereof, the Company shall establish an air vendor
consultation group (the "Air Vendor Consultation Group"). The airline Affiliate
or airline Affiliates of each Distributor shall be entitled to appoint one
representative in the aggregate, and the airline Affiliate or airline Affiliates
of each Original Owner that does not have an Affiliate that is a Distributor
shall be entitled to appoint one representative in the aggregate, to the Air
Vendor Consultation Group, provided that no such airline Affiliate shall be
represented on the Air Vendor Consultation Group if the Original Owner
(including, without limitation, any Person that shall have become an Original
Owner pursuant to Section 3.05) of which it is an Affiliate no longer holds an
Interest in the Company. The Air Vendor Consultation Group
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shall meet from time to time with the Company's management to discuss
distribution-related issues in accordance with appropriate guidelines (including
applicable law).
ARTICLE III
RESTRICTIONS ON TRANSFER
SECTION 3.01. General Restriction. No Original Owner shall,
directly or indirectly, make or solicit any Sale with respect to any Share, or
any share of Preferred Stock, except in compliance with the Securities Act and
this Agreement.
SECTION 3.02. Legends. (a) The Company shall affix to each
certificate evidencing Shares or shares of Preferred Stock a legend in
substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO
REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON
THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS MADE IN
CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH ACT DOES NOT APPLY."
(b) In the event that any Shares shall cease to be Restricted
Shares, the Company shall, upon the written request of the holder thereof, issue
to such holder a new certificate evidencing such Shares without the legend
required by Section 3.02(a) endorsed thereon; provided; however, that such
holder shall furnish the Company or its transfer agent such certificates, legal
opinions or other information as the Company or its transfer agent may
reasonably require to confirm that the legend is not required on such
certificate.
(c) The Company shall affix to each certificate evidencing
Shares or shares of Preferred Stock a legend in substantially the following
form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A
STOCKHOLDERS' AGREEMENT, DATED AS OF ____________, 1997, AS IT
MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO
REGISTRATION OF TRANSFER OF SUCH SECURITIES
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WILL BE MADE ON THE BOOKS OF THE ISSUER UNLESS AND
UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH."
(d) In the event that any Shares or any shares of Preferred
Stock shall cease to be subject to the restrictions on transfer set forth in
this Agreement and in the Restated Certificate of Incorporation, the Company
shall, upon the written request of the holder thereof, issue to such holder a
new certificate evidencing such Shares or such shares of Preferred Stock, as the
case may be, without the legend required by Section 3.02(c).
SECTION 3.03. Restrictions on Certain Transfers of Shares. No
Original Owner shall, directly or indirectly, make or solicit any Sale of any
Share beneficially owned by it other than (a) any Sale to a Third Party or Third
Parties (including in connection with a Sale effected through an offering made
pursuant to the Registration Rights Agreement), (b) any Sale to one of its
Affiliates that is made in compliance with the procedures, and subject to the
limitations, set forth in Section 3.05 and (c) any Sale to another Original
Owner or any of its Affiliates that is made in compliance with the procedures,
and subject to the limitations, set forth in Section 3.04. Notwithstanding the
foregoing, except as otherwise expressly provided in this Agreement, all Sales
permitted by the foregoing clauses (a) through (c) shall be subject to, and
shall not be made other than in compliance with, the provisions of Sections 3.01
and 3.09.
SECTION 3.04. Right of First Refusal. (a) If, at any time, any
Original Owner (the "Selling Original Owner") shall have agreed with another
Original Owner or an Affiliate thereof (a "Prospective Buyer") to sell or
otherwise transfer, whether directly or indirectly, in a bona fide transaction,
any or all of the Shares (the "Offered Shares") held by such Selling Original
Owner (other than pursuant to an Offer (as defined in Section 4.01(b)) or a
public offering effected in accordance with the Registration Rights Agreement or
otherwise) to the Prospective Buyer, such Selling Original Owner shall deliver a
written notice of its intention to sell the Offered Shares (a "Notice of
Intention"), to each of the other Original Owners (other than the Prospective
Buyer) (the "First Refusal Original Owners"), as well as to the Company and the
Prospective Buyer, setting forth such Selling Original Owner's intention to make
such Sale (which shall be for cash only), the number of Offered Shares, the cash
price at which such Selling Original Owner proposes to sell the Offered Shares
to the Prospective Buyer (the "First Refusal Price"), and the other material
terms of the Prospective Buyer's offer. A Notice of Intention, once given, shall
be irrevocable. The Notice of Intention shall be dated the date it is delivered
by the Selling Original Owner to the First Refusal Original Owners and the
Company.
(b) Upon receipt of the Notice of Intention, each First
Refusal Original Owner and the Prospective Buyer shall have the right to
purchase at the First Refusal Price, and otherwise on the same terms set forth
in the Notice of Intention, such number of Offered Shares up to the Pro Rata
Number for such Original Owner or Prospective Buyer; provided, however, that any
of such Persons may indicate in its Notice of Exercise (as defined below)
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that it wishes to purchase more than its Pro Rata Number. The right of the First
Refusal Original Owners and the Prospective Buyer to purchase Offered Shares
pursuant to this Section 3.04(b) shall be exercisable by written notice to the
Selling Original Owner (the "Notice of Exercise"), which notice shall state the
maximum number of Offered Shares such Person is willing to buy, with copies to
each of the other First Refusal Original Owners, the Prospective Buyer and the
Company, within 30 days from the date of the Notice of Intention (the "Option
Period"). The right of any First Refusal Original Owner pursuant to this Section
3.04(b) shall terminate if it is not exercised within 30 days of the date of the
Notice of Intention. A Notice of Exercise, once given, shall be irrevocable.
(c) Upon receipt of the Notices of Exercise, the Selling
Original Owner shall promptly calculate the number of Offered Shares which the
Prospective Buyer and each First Refusal Original Owner is entitled to purchase
hereunder. If the Notices of Exercise indicate that the Prospective Buyer and
each First Refusal Original Owner wishes to purchase at least its Pro Rata
Number of Offered Shares, the First Refusal Original Owners and the Prospective
Buyer shall each be allocated a number of Offered Shares equal to its respective
Pro Rata Number. If the Notices of Exercise indicate that the Prospective Buyer
or one or more First Refusal Original Owners do not wish to purchase their Pro
Rata Number of Offered Shares, the Prospective Buyer and the First Refusal
Original Owners who have indicated in their respective Notices of Exercise that
they wish to purchase more than their Pro Rata Number of Offered Shares shall
each be given an opportunity to acquire a number of the Offered Shares that are
not so taken up equal to the Pro Rata Number (which shall be calculated, for
purposes of the foregoing allocation only, by taking into account only the
Shares of the Prospective Buyer and the First Refusal Original Owners who shall
have indicated that they wish to purchase more than their Pro Rata Number of
Offered Shares), and the foregoing procedure shall be repeated until all of the
Offered Shares have been taken up; provided, however, that (i) no such First
Refusal Original Owner shall be obligated to purchase more Offered Shares than
such First Refusal Original Owner shall have indicated it is willing to purchase
in its Notice of Exercise, and (ii) in the event that fewer than all of the
Offered Shares have been taken up within 20 days from the date of delivery of
the last Notice of Exercise received by the Selling Original Owner, the Selling
Original Owner shall not be obligated to sell any of the Offered Shares pursuant
to this Section 3.04.
(d) Subject to clause (ii) of the proviso to Section 3.04(c),
the Selling Original Owner shall sell the Offered Shares to such First Refusal
Original Owners and the Prospective Buyer within 45 days from the date of
delivery of the last Notice of Exercise received by the Selling Original Owner.
(e) Notwithstanding the provisions of Sections 3.04(b) and
(c), the Prospective Buyer shall have the right, upon written notice to the
Selling Original Owner (with copies to each of the First Refusal Original Owners
and the Company) within 10 days from the date of the Notice of Intention, to
elect not to purchase any of the Offered Shares pursuant to the procedures set
forth in Sections 3.04(b) and (c). If the Selling Original
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Owner does not sell any of the Offered Shares to the First Refusal Original
Owners pursuant to this Section 3.04, then the Selling Original Owner may sell
the Offered Shares to the Prospective Buyer within 45 days from the date of
delivery of the last Notice of Exercise at a price no lower than the First
Refusal Price and on terms no more favorable to the Prospective Buyer than those
set forth in the Notice of Intention.
(f) Upon the consummation of any purchase and Sale pursuant to
this Section 3.04, the Selling Original Owner shall deliver certificates
evidencing the Offered Shares sold duly endorsed, or accompanied by written
instruments of transfer, in form and substance satisfactory to the purchaser
thereof, duly executed by the Selling Original Owner, free and clear of any
encumbrance, against delivery of the purchase price for such shares payable in
immediately available funds by wire transfer. The Selling Original Owner shall
be responsible for and pay any stamp taxes or other similar conveyance fees
incurred as a result of the Sale of the Offered Shares.
SECTION 3.05. Affiliate Transferees to Execute Agreement. Each
Original Owner agrees that it will not, directly or indirectly, make any Sale of
any Shares held by such Original Owner to any of its Affiliates, unless, prior
to the consummation of any such Sale, the Affiliate to whom such Sale is
proposed to be made (a "Prospective Affiliate Transferee") (i) executes and
delivers to the Company a counterpart of this Agreement as it may have been
amended as of such time and (ii) represents and warrants in writing to the
Company that such Agreement has been duly authorized, executed and delivered by
such Prospective Affiliate Transferee and is a legal, valid and binding
obligation of such Prospective Affiliate Transferee enforceable against it in
accordance with its terms. Upon the execution and delivery by such Prospective
Affiliate Transferee of the documents referred to in the preceding sentence,
such Prospective Affiliate Transferee shall be deemed an "Original Owner" for
the purposes of this Agreement, and shall have the rights and be subject to the
obligations of an Original Owner hereunder with respect to the Shares held by
such Prospective Affiliate Transferee. Notwithstanding anything to the contrary
set forth herein, if any Shares are transferred from an Original Owner to one of
its Affiliates as a result of a merger between an Original Owner and an
Affiliate of such Original Owner, and pursuant to such merger such Affiliate
assumes such Original Owner's obligations under this Agreement (whether by
operation of law or otherwise), such Affiliate shall not be required to comply
with the provisions of clauses (i) and (ii) of this Section 3.05.
SECTION 3.06. Sale to a Third Party. If a Sale of Shares is
made in connection with a simultaneous Sale of shares of Preferred Stock to a
Permitted Preferred Stock Transferee that complies with all of the requirements
set forth in Section 3.07, such Shares shall be deemed "Shares" and such
Permitted Preferred Stock Transferee shall be deemed an "Original Owner" for all
purposes of this Agreement. If a Sale of Shares is made to a Third Party (a
"Third Party Transferee") that is not a Permitted Preferred Stock Transferee
that complies with all of the requirements set forth in Section 3.07, such
Shares shall immediately cease to be the subject of this Agreement and such
Third Party Transferee
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will not become an Original Owner for purposes of this Agreement. If a Sale of
Shares results in the selling Original Owner ceasing to own any Shares, such
selling Original Owner shall cease to be an Original Owner for purposes of this
Agreement.
SECTION 3.07. Restrictions on Certain Transfers of Shares of
Preferred Stock. (a) No Original Owner shall, directly or indirectly, make or
solicit any sale of any share of Preferred Stock beneficially owned by it unless
such Sale is in connection with a simultaneous Sale of Shares to (i) another
Original Owner, (ii) one of such Original Owner's Affiliates, or (iii) a Third
Party (each of (i), (ii) and (iii), a "Permitted Preferred Stock Transferee"),
and in each such case, (A) such Permitted Preferred Stock Transferee would,
after giving effect to such transfer, hold Shares representing at least 5% of
the then outstanding shares of Common Stock, provided, that if the Original
Owner transferring such shares of Preferred Stock holds Shares representing less
than 5% of the then outstanding shares of Common Stock but the series of
Preferred Stock held by such Original Owner continues to be entitled to elect a
Director due to the operation of Sections 4.3(d)(2), (3), (4) or (5) of the
Restated Certificate of Incorporation, then the foregoing clause (A) shall be
deemed to be satisfied if (x) such Permitted Preferred Stock Transferee would,
after giving effect to such transfer, hold shares of Common Stock representing
at least 5% of the then outstanding shares of Common Stock, or (y) such
Permitted Preferred Stock Transferee shall have purchased additional shares of
Common Stock in the public market or otherwise in order to increase its holdings
of shares of Common Stock to at least 5% within 90 days after such transfer (and
unless and until such Permitted Preferred Stock Transferee shall have increased
its holdings of shares of Common Stock to at least 5% within such 90 day period,
it shall not be entitled to elect any Directors to the Board pursuant to the
terms of the Preferred Stock that is or are proposed to be transferred to it),
and (B) if the Permitted Preferred Stock Transferee is not already a party to
this Agreement and a Non-Competition Agreement, such Permitted Preferred Stock
Transferee executes and delivers to the Company (x) a counterpart of this
Agreement, together with (y) a Non-Competition Agreement, and represents and
warrants in writing to the Company that such agreements have been duly
authorized, executed and delivered by such Permitted Preferred Stock Transferee
and are legal, valid and binding obligations of such Permitted Preferred Stock
Transferee enforceable against it in accordance with their respective terms.
(b) In no event shall any fraction of a share of Preferred
Stock, or any partial interest therein, be transferred to any other Person.
SECTION 3.08. Improper Sale. Any attempt not in compliance
with this Agreement to make any Sale of any Shares or any shares of Preferred
Stock shall be null and void and the Company shall not give any effect in the
Company's stock records to such attempted Sale.
SECTION 3.09. Limitation on Dispositions. As of the date
hereof and again as of the date of the IPO, and except (i) with respect to the
number of Shares in the
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secondary offering listed opposite the name of such Parent Entity or the Parent
Entity with respect to such stockholder in the column "Number of Shares of
Common Stock Being Offered" in the section entitled "Principal and Selling
Stockholders" in the Form S-1 filed in connection with the IPO, or (ii) for
transfers permitted by Section 351(c) of the Code, each of the stockholders
listed in Schedule A represents that it, and each of the Parent Entities
represents that its respective Affiliate listed in Schedule A, (x) has not
entered into any binding commitment, obligation or contract to sell, transfer or
dispose of Shares or shares of Preferred Stock received by such stockholder in
connection with the formation of the Company, (y) has no plan, arrangement or
understanding with any Nonaffiliated Person (including, but not limited to,
investment banks or brokers), and is not under any economic compulsion, to sell,
transfer or dispose of Shares or shares of Preferred Stock received by such
stockholder in connection with the formation of the Company to any Person and
(z) has no plan, arrangement or understanding, and is not under any economic
compulsion, to sell, transfer or dispose of Shares or shares of Preferred Stock
received by such stockholder in connection with the formation of the Company to
any Affiliated Person. Notwithstanding any other provision of this Agreement,
except with respect to the number of Shares in the secondary offering listed
opposite the name of such Parent Entity or the Parent Entity with respect to
such stockholder in the column "Number of Shares of Common Stock Being Offered"
in the section entitled "Principal and Selling Stockholders" in the Form S-1
filed in connection with the IPO, each of the stockholders listed in Schedule A,
and each of the Parent Entities agrees that its respective Affiliate listed in
Schedule A, will not sell, transfer or dispose of any of the Shares or shares of
Preferred Stock received by such stockholder in connection with the formation of
the Company prior to the expiration of six months following the IPO unless such
stockholder and its respective Parent Entity has delivered a written opinion of
a nationally recognized U.S. tax counsel to the Company, which opinion provides
that such sale, transfer or disposition will not cause the formation of the
Company to fail to qualify under Section 351 of the Code. In connection with the
rendering by such counsel of such opinion, the Company will provide to such
counsel such information in the Company's possession, and will make reasonable
efforts to obtain such relevant information, as counsel may reasonably request.
The Company shall provide a copy of any opinion received by it pursuant to the
second preceding sentence or pursuant to Section 5.12 hereof to each Parent
Entity and nothing herein shall be construed to prohibit any Parent Entity from
submitting a copy of any such opinion to the United States Internal Revenue
Service or to any state or local taxing authority in the course of an
examination or audit of such Parent Entity or any Affiliate thereof.
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ARTICLE IV
CERTAIN AGREEMENTS
SECTION 4.01. Certain Agreements. (a) Except as expressly
contemplated by this Agreement, each of the Parent Entities and the Original
Owners and their respective Affiliates shall not:
(i) acquire, offer to acquire, or agree to acquire, directly
or indirectly, by purchase or otherwise, (x) any Voting Securities that
would increase or would have the effect of increasing such Parent
Entity's or Original Owner's (A) level of beneficial ownership in the
Company to more than 50% of the then outstanding Voting Securities or
(B) voting power to more than 50% of the voting power of the then
outstanding Voting Securities, or (y) any direct or indirect rights to
acquire any Voting Securities that would increase or would have the
effect of increasing such Parent Entity's or Original Owner's (A) level
of beneficial ownership in the Company to more than 50% of the then
outstanding Voting Securities or (B) voting power to more than 50% of
the voting power of the then outstanding Voting Securities if such
rights were exercised.
(ii) make any public announcement with respect to, or submit a
proposal for, any transaction involving a Parent Entity, Original Owner
or of any Affiliate thereof that would increase or would have the
effect of increasing such Parent Entity's or Original Owner's (A) level
of beneficial ownership in the Company to more than 50% of the then
outstanding Voting Securities or (B) voting power to more than 50% of
the voting power of the then outstanding Voting Securities;
(iii) form, join or in any way participate in a "group" as
such term is defined for purposes of Section 13(d)(3) of the Securities
Exchange Act, in connection with any of the foregoing; or
(iv) request the Company, directly or indirectly, to amend or
waive any provision of this Section 4.01(a).
(b) Notwithstanding the provisions of Section 4.01(a), a
Parent Entity, Original Owner or any Affiliate thereof, acting individually or
acting in concert as a "group" as such term is defined for purposes of Section
13(d)(3) of the Securities Exchange Act (an "Acquiring Owner"), may offer to
acquire all of the outstanding Voting Securities (the "Offer"); provided,
however, that (i) (A) the Acquiring Owner submits a written proposal (the
"Proposal") to the Independent Directors setting forth a brief description of
the Offer, the price and other material terms of such Offer and any other
information that the Independent Directors may request and (B) the price and
other material terms of the Offer are approved by the Independent Directors or
(ii) in the event that the Independent Directors
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cannot reach agreement with the Acquiring Owner with respect to the price of the
Offer within 45 days following the receipt of the Proposal, a nationally
recognized investment banking firm selected by the Independent Directors, after
consultation with the Acquiring Owner, independent of the Company and the
Acquiring Owner and knowledgeable with respect to the business of the Company
(the "Investment Bank") will determine a price that is fair from a financial
point of view to the stockholders of the Company (other than the Acquiring
Owner). The fees, costs and expenses of the Investment Bank shall be borne by
the Acquiring Owner. The Independent Directors shall notify the Acquiring Owner
within 2 business days of the delivery of such determination by the Investment
Bank. Notwithstanding anything to the contrary in this Section 4.01, the
Independent Directors shall not be obligated to consider any Offer made by an
Acquiring Owner unless such Offer is a bona fide offer for all of the Voting
Securities of the Company.
SECTION 4.02. No Solicitation. Except as expressly
contemplated by this Agreement, none of the Parent Entities, Original Owners or
any of their respective Affiliates shall make, or in any way participate,
directly or indirectly in, nor shall they form, join or in any way participate
in a "group", as such term is defined for purposes of Section 13(d)(3) of the
Securities Exchange Act, in connection with, any "solicitation" of "proxies" to
vote (as such terms are used in the rules of the Commission) in opposition to
any proxy solicitation being conducted by the Company; provided, however, that
the foregoing shall not prohibit any communication not amounting to a
solicitation of proxies.
SECTION 4.03. Issuances of Shares of Capital Stock. The
Company shall not, at any time during the term of this Agreement, issue any
shares of capital stock unless such issuance is approved by a majority of the
whole Board.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Further Action. Each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
SECTION 5.02. Representations. Each of the parties hereto
represents that this Agreement has been duly authorized, executed and delivered
by such party and
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constitutes a legal, valid and binding obligation of such party, enforceable
against it in accordance with the terms of this Agreement.
SECTION 5.03. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or in equity.
SECTION 5.04. Amendments and Waivers. Any term in this
Agreement may be amended or waived upon the written consent of the holders of
more than 66 2/3% of the Shares then held by the Original Owners; provided,
however, that (i) any amendment or waiver that adversely affects any Parent
Entity or Original Owner shall require the consent in writing of such Parent
Entity or Original Owner (whether or not such amendment or waiver affects any
one or more of the other Original Owners), (ii) any amendment to the provisions
of Article II shall require the consent in writing of the Company and the
Original Owners then party to this Agreement that hold series of Preferred Stock
that are entitled to elect one or more directors to the Board pursuant to the
terms of the Preferred Stock, and (iii) any amendment to any of the provisions
of Section 4.01 or 4.02 shall require the consent in writing of each of the
parties hereto, including the Company. Except where consent is required pursuant
to this Section 5.04, each of the Parent Entities and the Original Owners shall
be bound by any amendment or waiver authorized by this Section 5.04. Each party
hereto, including the Company, agrees that it shall not take or cause to be
taken any action to adopt, amend or repeal any provision of the Restated
Certificate of Incorporation or the Restated By-laws of the Company so as to
make them inconsistent in any manner with this Agreement or the Registration
Rights Agreement.
SECTION 5.05. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by cable, by telecopy, by telegram, by
telex or by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 5.05):
(a) if to United or Covia:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
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with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(b) if to USAW or USAM:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(c) if to Air Canada or Resnet:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
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(d) if to British Airways or DSI:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(e) if to SwissAir or Roscor:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(f) if to KLM or TIS:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
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with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(g) if to Aer Lingus or Retford:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(h) if to Alitalia or Racom:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
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(i) if to Austrian Airlines or Travidata:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(j) if to Olympic or Olynet:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(k) if to TAP or Coporga:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
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with a copy to:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
(l) if to the Company:
-------------------------------
-------------------------------
-------------------------------
Telecopy:
---------------------
Attention:
---------------------
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 212-848-7179
Attention: Xxxxx X'Xxxxx, Esq.
SECTION 5.06. Benefit; Successors and Assigns. Except as
otherwise provided herein, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns; provided however that this Agreement shall not inure to the
benefit of any Prospective Affiliate Transferee unless such Prospective
Affiliate Transferee shall have complied with the terms of Section 3.05 in all
respects; provided, further, that this Agreement shall not inure to the benefit
of any Permitted Preferred Stock Transferee unless such Permitted Preferred
Stock Transferee shall have complied with the terms of Section 3.07 in all
respects; and provided further that this Agreement shall not inure with respect
to additional Shares acquired by a Prospective Buyer unless such Prospective
Buyer and Selling Original Owner shall have complied with Section 3.04 in all
respects. Nothing in this Agreement either express or implied is intended to
confer on any person, other than the parties hereto and their respective
successors and permitted assigns, any rights, remedies or obligations under or
by reason of this Agreement.
SECTION 5.07. Arbitration. Subject to the final sentence of
this Section 5.07, any dispute arising between or among the parties hereto or
any of them involving the subject matters covered by this Agreement shall be
submitted to arbitration under this Section 5.07. Any party asserting a breach
of this Agreement by any other party or parties shall
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notify all other parties of such alleged breach (a "Dispute Notice") and the
parties shall attempt to resolve such dispute amicably and if they shall fail to
resolve it within thirty (30) days of the date of the Dispute Notice, any party
may notify the other parties that it wishes to commence an arbitration
proceeding under this Section 5.07 (an "Arbitration Request"). In any
arbitration proceeding the party or parties commencing the arbitration (alone or
together, if more than one, the "Petitioner") shall include in the Arbitration
Request (a) a statement of the facts constituting the alleged breach or dispute,
(b) a written statement of position ("Statement") regarding the dispute and (c)
the name of an individual designated by it to appoint an Arbitrator (an
"elector"). The Statement shall state the facts and arguments in support of the
position taken by the party submitting such Statement and shall detail that
party's proposed solution and relief sought (if any). Copies of any Arbitration
Request shall be furnished at the same time to the other parties hereto. The
party or parties with whom the Petitioner has its dispute (alone or together, if
more than one, the "Respondent") shall within fifteen (15) business days after
the date of the Arbitration Request designate a second elector by notice to the
Petitioner (copies of which shall be furnished to the other parties), but if it
or they shall fail to do so within such period the Petitioner may designate an
elector on Respondent's behalf. The electors chosen by the Petitioner and the
Respondent shall attempt to agree upon an arbitrator (the "Arbitrator"), but if
they are unable to do so within twenty (20) business days after the designation
of the second elector, then either elector thereafter may apply to the American
Arbitration Association (the "Association") for the selection of the Arbitrator
in accordance with the Commercial Arbitration Rules of such Association. The
Arbitrator so selected shall have full power to decide any dispute referred to
in this Section 5.07. The arbitration proceedings shall be conducted in the
English language, and the place of arbitration and the making of the Award (as
defined below) shall be the City of New York. The UNCITRAL rules of commercial
arbitration shall apply to any arbitration commenced pursuant to this Section
5.07, as modified by the following procedure:
(i) Within ten (10) business days of the selection of the
Arbitrator (the "Commencement Date"), the Respondent shall deliver its
Statement regarding the dispute to the Arbitrator and to the
Petitioner.
(ii) Within twenty (20) business days from the Commencement
Date, each of the Petitioner and Respondent shall deliver to the
Arbitrator and to the other party, a response ("Response") to the other
party's Statement setting forth opposing facts and arguments and
limited in length to ten (10) typed, single spaced pages (excluding any
evidentiary exhibits included therein).
(iii) Within thirty (30) business days from the Commencement
Date, each of the Petitioner and the Respondent may deliver to the
Arbitrator and to the other party, a reply to the Response limited to
setting forth facts and arguments in rebuttal to the Statement and
Response of the other party and limited in length to five (5) typed,
single spaced pages (excluding any evidentiary exhibits included
therein).
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(iv) Within forty (40) business days from the Commencement
Date, each of the Petitioner and Respondent shall present an oral
summation of its position to the Arbitrator in the presence of the
other party in accordance with such rules of procedure including,
without limitation, length of presentation and right of
cross-examination, as the Arbitrator shall determine in writing and
deliver to the parties not less than five (5) business days prior to
such hearing; provided, however, that such hearing shall not exceed
eight (8) hours in total and may not be adjourned except for
extraordinary circumstances beyond the control of the parties.
(v) The Arbitrator shall either issue his decision and award
("Award") or request a further meeting of the parties within fifteen
(15) days of the hearing.
(vi) Any such further meeting of the parties shall take place
within fifteen (15) business days of the request therefor and shall be
conducted as determined by the Arbitrator. The Arbitrator shall issue
his Award no later than fifteen (15) days after any such further
meeting of the parties.
(vii) The Award shall be in writing and shall be limited to a
decision either completely in favor of Petitioner's request for relief
or completely in favor of Respondent's request for relief. The Award
shall be final and binding upon the parties hereto and judgment may be
entered thereon in any court of competent jurisdiction and the costs
and expenses of such arbitration shall be borne by the party losing
such arbitration.
This Section 5.07 shall in no way affect the right of any
party to seek such interim relief, and only such relief, as may be required to
maintain the status quo in aid of the arbitration in any court of competent
jurisdiction.
SECTION 5.08. Changes to Non-Competition Agreement. The
Company shall not amend the provisions of any Non-Competition Agreement unless
such amendment is offered to each of the other Persons that are then parties to
a Non-Competition Agreement with the Company. The Company shall not enter into a
non-competition agreement after the date hereof that differs in any material
respect from the terms of the form attached hereto as Exhibit A (as such form
may be amended in accordance with this Section 5.08) unless (i) the terms of
such proposed non-competition agreement are offered to each of the other Persons
that are then parties to a Non-Competition Agreement with the Company, or (ii)
such action is approved by at least four Original Owners; provided, however,
that for purposes of this clause (ii), the approval of an Original Owner and any
Affiliate of such Original Owner shall be deemed to constitute the approval of
only one Original Owner.
SECTION 5.09. Termination. Except for this Article V, this
Agreement shall terminate and be of no further force and effect, automatically
and without any required actions of the parties hereto, on the tenth anniversary
of the date hereof.
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SECTION 5.10. Miscellaneous. This Agreement, the Registration
Rights Agreement and the Restated Certificate of Incorporation of the Company
set forth the entire agreement and understanding among the parties hereto, and
supersede all prior agreements and understandings, relating to the subject
matter hereof. All representations and warranties contained herein shall survive
the execution and delivery of this Agreement, regardless of any investigation
made by any party hereto or on such party's behalf. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one instrument.
SECTION 5.11. Tax Treatment. For U.S. federal, state and local
income tax purposes, the parties agree to treat the Merger and consummation of
the IPO as a transfer described in Section 351(a) of the Code. For U.S. federal,
state and local income tax purposes, the parties agree to report the formation
of the Company in a manner that is consistent with such treatment described in
the previous sentence and shall not take any position or action contrary thereto
unless required to do so by applicable tax laws pursuant to a final
determination under Section 1313(a) of the Code (or a similar provision of state
or local laws, as the case may be).
SECTION 5.12. Tax Opinion. Prior to the consummation of the
IPO, the Company shall have received a written opinion of a nationally
recognized U.S. tax counsel substantially to the effect that, based on
appropriate representations and assumptions, the Merger and consummation of the
IPO will constitute a transfer described in Section 351(a) of the Code, and as
such will not result in the recognition of gain or loss by the partners or the
Company.
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IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed as of the date first above written above by their
respective officers thereunto duly authorized.
GALILEO INTERNATIONAL, INC.
By _________________________________
Name:
Title:
UNITED AIR LINES, INC.
By _________________________________
Name:
Title:
COVIA CORPORATION
By _________________________________
Name:
Title:
US AIRWAYS, INC.
By _________________________________
Name:
Title:
USAM CORPORATION
By _________________________________
Name:
Title:
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AIR CANADA
By _________________________________
Name:
Title:
RESNET HOLDINGS, INC.
By _________________________________
Name:
Title:
BRITISH AIRWAYS PLC
By _________________________________
Name:
Title:
DISTRIBUTION SYSTEM, INC.
By _________________________________
Name:
Title:
SWISSAIR TRANSPORT
COMPANY LTD.
By _________________________________
Name:
Title:
34
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ROSCOR A.G.
By _________________________________
Name:
Title:
KONINKLIJKE LUCHTVAART
MAATSCHAPPIJ N.V.
KLM ROYAL DUTCH AIRLINES
By _________________________________
Name:
Title:
TRAVEL INDUSTRY SYSTEMS B.V.
By _________________________________
Name:
Title:
AER LINGUS PLC
By _________________________________
Name:
Title:
RETFORD LIMITED
By _________________________________
Name:
Title:
35
32
ALITALIA-LINEE AEREE
ITALIANE S.P.A.
By _________________________________
Name:
Title:
RACOM TELEDATA S&A
By _________________________________
Name:
Title:
AUSTRIAN AIRLINES
OESTERREICHISCHE
LUFTVERKEHRS
AKTIENGESELLSCHAFT
By _________________________________
Name:
Title:
TRAVIDATA INC.
By _________________________________
Name:
Title:
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OLYMPIC AIRWAYS S.A.
By _________________________________
Name:
Title:
OLYNET, INC
By _________________________________
Name:
Title:
TRANSPORTES AEREOS
PORTUGUESES S.A.
By _________________________________
Name:
Title:
COPORGA, INC
By _________________________________
Name:
Title:
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34
SCHEDULE A
Covia Corp., a Delaware corporation and a wholly owned subsidiary of United
("Covia").
USAM Corp., a Delaware corporation and a wholly owned subsidiary of USAir
("USAM").
Resnet Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of
Air Canada ("Resnet").
Distribution Systems Inc., a Delaware corporation and an indirect wholly owned
subsidiary of British Airways ("DSI").
Roscor A.G., a corporation organized under the laws of Switzerland and a wholly
owned subsidiary of SwissAir ("Roscor").
Travel Industry Systems B.V., a corporation organized under the laws of the
Netherlands and a wholly owned subsidiary of KLM ("TIS").
Retford Limited, a corporation organized under the laws of Ireland and a wholly
owned subsidiary of Aer Lingus ("Retford").
Racom Teledata S&A, a corporation organized under the laws of Italy and a
majority owned subsidiary of Alitalia ("Racom").
Travidata Inc., a New York corporation and a wholly owned subsidiary of Austrian
Airlines ("Travidata").
Olynet Inc., a Delaware corporation and wholly owned subsidiary of Olympic
("Olynet").
Coporga, Inc., a Delaware corporation and wholly owned subsidiary of TAP
("Coporga").
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SCHEDULE B
United Air Lines, Inc., a Delaware corporation ("United").
US Airways, Inc., a Delaware corporation ("USAW").
Air Canada, a corporation organized under the laws of Alberta ("Air Canada").
British Airways PLC, a corporation organized under the laws of England and Wales
("British Airways").
Swissair Swiss Air Transport Company Ltd., a corporation organized under the
laws of Switzerland ("SwissAir").
KLM Royal Dutch Airlines, a corporation organized under the laws of the
Netherlands ("KLM").
Aer Lingus PLC, a corporation organized under the laws of Ireland ("Aer
Lingus").
Alitalia-Linee Aeree Italiane S.p.A., a corporation organized under the laws of
Italy ("Alitalia").
Austrian Airlines Oesterreichische Luftverkehrs Aktiengesellschaft, a
corporation organized under the laws of Austria ("Austrian Airlines").
Olympic Airways S.A., a corporation organized under the laws of Greece
("Olympic").
Transportes Aereos Portugueses S.A., a corporation organized under the laws of
Portugal ("TAP").
