Exhibit 99.6
SECOND AMENDMENT
TO THE
GOVERNANCE AGREEMENT
This Second Amendment to the Governance Agreement
dated as of November 20, 1998, is by and among Continental
Airlines, Inc., a Delaware corporation (the "Company"), Newbridge
Parent Corporation, a Delaware corporation (the "Stockholder"),
and Northwest Airlines Corporation, a Delaware corporation that
is the holder of all of the outstanding stock of the Stockholder
(the "Parent").
WHEREAS, the Company, the Stockholder and the Parent
have entered into that certain Governance Agreement dated as of
January 25, 1998, as amended by the First Amendment dated as of
March 2, 1998 (the "Governance Agreement"), pursuant to which,
among other things, (i) the Parent and the Stockholder have
agreed to deposit immediately following the Closing the Voting
Securities Beneficially Owned by them or any of their Affiliates
into a voting trust (the "Voting Trust") to be established by
them with an independent voting trustee that will provide that
such Voting Securities will be voted as specified in the
Governance Agreement and (ii) the Company has agreed to cause a
person designated by the Stockholder to be elected to the
Company's board of directors immediately following the Closing;
WHEREAS, the Parent has been in discussions with the
United States Department of Justice ("DOJ") regarding the terms
of the Investment Agreement, and the Parent and the Company have
been in discussions with DOJ regarding the terms of the Alliance
Agreement and the Governance Agreement (the Investment Agreement,
the Alliance Agreement and the
Governance Agreement together, the "Agreements") in connection
with DOJ's antitrust review of the transactions contemplated by
the Investment Agreement;
WHEREAS, the Parent and the Company believe that the
transactions contemplated by the Agreements are procompetitive
and beneficial to consumers;
WHEREAS, DOJ has expressed concerns about the effect
on competition of certain terms of the Agreements;
WHEREAS, the Parent and the Stockholder believe that
certain changes to the Governance Agreement with respect to the
provisions described above are desirable to obviate the concerns
of DOJ;
WHEREAS, the Parent and the Stockholder have requested
that the Company agree to amend such provisions of the Governance
Agreement to obviate the concerns of DOJ; and
WHEREAS, the Company is willing to agree to these
amendments to facilitate the prompt closing of the transactions
contemplated by the Investment Agreement and the subsequent
realization by the Company and its stockholders of the expected
benefits of the Alliance Agreement.
NOW THEREFORE, the Company, the Stockholder and the
Parent, intending to be legally bound, hereby agree as follows:
1. Capitalized terms not otherwise defined herein
shall have their respective meanings set forth in the Governance
Agreement.
2. All references in Sections 1 through 9 of the
Governance Agreement to the "Investment Agreement" are hereby
modified to refer to the Investment Agreement as amended
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by Amendment No. 1 thereto dated February 27, 1998 and Amendment
No. 2 dated as of November 20, 1998.
3. Section 1.02 of the Governance Agreement is
amended by renumbering clause (vi) as clause (vii) and adding a
new clause (vi) with the following text: "Transfers of Voting
Securities to the B/C/P Group."
4. The following definition shall be added to Section
9 (which, pursuant to Section 7 hereof, is to be renumbered as
Section 8) after the definition of "Associate": "'B/C/P Group'"
shall mean 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 has over Air Partners pursuant to and as provided in
the "Partnership Agreement" (as defined in the Investment
Agreement), 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 the
date hereof."
5. The definition of "Beneficially Own" and
"Beneficial Ownership" is hereby amended by adding the following
at the end thereof: "; for the avoidance of doubt, securities
with respect to which the Stockholder or the Parent has been
granted a proxy pursuant to the Investment Agreement shall be
deemed to be beneficially owned by the Stockholder or the
Parent."
6. Section 1.03 of the Governance Agreement is amended
and restated to read in its entirety as set forth below:
Section 1.03. Voting Trust. Immediately
following the Closing, the Stockholder and
the Parent shall cause AP to deposit the
Shares, and the Stockholder and the Parent
shall deposit any other shares of Voting
Securities Beneficially Owned by either of
them or any of their Affiliates, into a
voting trust (the "Voting Trust") to be
established pursuant to a voting trust
agreement (the
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"Voting Trust Agreement") with an
independent voting trustee in a form
reasonably satisfactory to Parent and the
Company and which shall include the
following provisions for the voting of the
shares of Voting Securities deposited
therein: until the Standstill Termination
Date, all such shares shall (a) be voted or
consented on all matters submitted to a vote
of the Company's stockholders, other than
the election of directors, either (i) in the
case of votes at a stockholders meeting, in
the same proportion as the votes cast by
other holders of Voting Securities, or (ii)
in the case of consents, so that the
percentage of Stockholder Voting Power
consented to on any matter equals the
percentage of all other outstanding Voting
Securities so consented; provided, that with
respect to (x) any vote on a merger,
reorganization, share exchange,
consolidation, business combination,
recapitalization, liquidation, dissolution
or similar transaction involving the
Company, any sale of all or substantially
all of the Company's assets or any issuance
of Voting Securities that would represent in
excess of 20% of the Voting Power prior to
such issuance, including any of the
foregoing involving the Stockholder or the
Parent, or (y) any amendment to the
Company's amended and restated certificate
of incorporation or by-laws that would
materially and adversely affect the
Stockholder (including through its effect on
the Alliance Agreement and the rights of the
Voting Securities Beneficially Owned by the
Stockholder), such shares may be voted as
directed by the Stockholder and (b) in the
election of directors, for the election of
the Independent Directors nominated by the
Board of Directors of the Company determined
by a Majority Vote; provided, that with
respect to any election of directors in
respect of which any Person other than the
Company is soliciting proxies, the
Stockholder and the Parent shall cause all
such shares to be voted, at the option of
the Stockholder, 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. The
Voting Trust Agreement shall also provide
that the Voting Trust shall not issue voting
trust certificates or any interest in the
Voting Trust to a Person other than the
Stockholder or any of its Affiliates.
7. Section 1.04 of the Governance Agreement is amended
by (a) deleting from clause (a) thereof the words "by virtue of
the Stockholder's representation on the Board of Directors of the
Company, if any," (b) replacing the language in the parenthetical
expression at the end of clause (a) thereof with the words "it
being agreed that this paragraph shall not prohibit the Parent
and its Subsidiaries, and their respective directors, officers
and employees, from
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engaging in ordinary course business activities with the Company
or having periodic discussions with directors, officers and
employees of the Company regarding the Company's business, it
being understood that such matters shall not include matters
that, under applicable antitrust laws, could not be discussed
among competitors" and (c) replacing the language in clause (ii)
of the proviso at the end of Section 1.04 in its entirety with
the words "[intentionally omitted]".
8. Section 2.01 of the Governance Agreement is amended
and restated to read in its entirety as set forth below:
Section 2.01. Composition of Board of Directors.
(a) The individuals listed on Exhibit 2.01 hereto
shall, for purposes of this Agreement, constitute the
Independent Directors immediately after the
consummation of the Stock Purchase (the "Closing").
(b) Following the Closing, and until the
Standstill Termination Date, the Company, the Parent,
the Stockholder and their respective Affiliates shall
take all such actions as are required under applicable
law to cause Independent Directors to constitute at
all times at least a majority of the Board of
Directors. At each annual meeting of stockholders of
the Company following the Closing, or at any time that
a vacancy in a seat previously occupied by an
Independent Director on the Board of Directors is to
be filled, the identity of the Independent Director or
Directors to stand for election to the Board of
Directors or to fill the vacancy, as the case may be,
shall be determined by a Majority Vote.
(c) Without the prior written consent of the
Parent, the Company shall not amend, alter or repeal
its amended and restated certificate of incorporation
or by-laws so as to eliminate or diminish the ability
of stockholders of the Company to act by written
consent or Section 1.10 of the Company's by-laws.
9. Section 7 of the Governance Agreement
("Post-Standstill Termination Date Board Composition") is
deleted, Section 8, Section 8.01, and Section 9 are renumbered as
Section 7, Section 7.01 and Section 8 respectively, references in
the Governance Agreement to Section 8, Section 8.01 and Section 9
shall be modified accordingly, the phrase "except the
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obligations of the Stockholder and the Parent pursuant to Section
7" is deleted from Section 6.07(c) and the phrase "(other than
their obligations pursuant to Section 7)" is deleted from Section
8.01(c) (renumbered as Section 7.01(c)) the two times it appears.
10. The phrase "no less than 15% of the Voting
Securities" in the last sentence of Section 8.01(c) of the
Governance Agreement shall be changed to "Voting Securities
representing no less than 15% of the Total Voting Power".
11. The Company hereby represents and warrants to the
Parent and the Stockholder that this Second Amendment to the
Governance Agreement has been approved by a Majority Vote.
12. This Second Amendment 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.
13. Except as expressly modified by this Second
Amendment to the Governance Agreement, all of the terms,
conditions and provisions of the Governance Agreement shall
remain unchanged and in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused
this Second Amendment to the Governance Agreement to be executed
as of the date first referred to above.
Northwest Airlines Corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxx
Executive Vice President,
General Counsel and Secretary
Newbridge Parent Corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President, Secretary and
Assistant Treasurer
Continental Airlines, Inc.
By:/s/ Xxxxxxx X. Xxxxxx
----------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President,
General Counsel and Secretary
[Signature Page to Second Amendment]
