CONFORMED COPY
AMENDED AND RESTATED STANDSTILL AGREEMENT
AMENDED AND RESTATED STANDSTILL AGREEMENT, dated as of May 1, 1998
(this "AGREEMENT"), between KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V., a
Netherlands corporation ("KLM"), and NORTHWEST AIRLINES CORPORATION, a Delaware
corporation.
W I T N E S S E T H :
WHEREAS, NWA Corp. and KLM are parties to a Standstill Agreement,
dated as of September 29, 1997 (the "STANDSTILL AGREEMENT"), executed in
connection with the Common Stock Repurchase Agreement, dated as of September 29,
1997, between NWA Corp. (as defined below) and KLM, as amended (the "ORIGINAL
COMMON STOCK AGREEMENT");
WHEREAS, NWA Corp. and KLM have entered into an Accelerated Common Stock
Repurchase Agreement, dated as of the date hereof, (the "ACCELERATED REPURCHASE
AGREEMENT") in order to accelerate the repurchase from KLM of the remaining
18,177,874 Shares (as defined in the Accelerated Repurchase Agreement) to be
repurchased pursuant to the Original Common Stock Agreement;
WHEREAS, as an inducement to the willingness of KLM to agree to the terms
of the Accelerated Repurchase Agreement, NWA Corp. and KLM have also entered
into the Northwest Airlines Corporation Common Stock Option Agreement (the
"OPTION AGREEMENT"), dated as of the Closing Date (as defined in the Accelerated
Repurchase Agreement);
WHEREAS, NWA Corp. and KLM desire to amend and restate the Standstill
Agreement in connection with the Accelerated Purchase Agreement and the Option
Agreement;
NOW THEREFORE, the parties hereto agree to amend and restate the Standstill
Agreement so that it reads in its entirety as follows:
Section 1. DEFINED TERMS. Unless otherwise defined herein:
"AFFILIATE" of a Person has the meaning ascribed to such term in the
Common Stock Agreement.
"AMENDMENT TO THE STOCKHOLDERS' AGREEMENT" means the agreement in the
form of Exhibit A to the Common Stock Agreement which amends the
Stockholders' Agreement and provides for (i) the acceleration of the
vesting of the KLM Option (as defined in the Stockholders' Agreement) in
respect of shares of Class A Common Stock subject to such option that are
held by Xxxxxxx X. Xxxx Associates -- NWA Partners L.P. and Bankers Trust
New York Corporation, and the exercise by KLM of such KLM Option with
respect to such shares and the purchase of such shares
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concurrently with the Initial Closing Date (as defined in the Common
Stock Agreement), (ii) the termination of the KLM Option with respect to
the other Option Stockholders and the termination of the Put Option (as
each such term is defined in the Stockholders' Agreement) with respect
to all of the Option Stockholders and (iii) immediately following the
consummation of the transactions contemplated by the Common Stock
Agreement on the Initial Closing Date, the termination of all of KLM's
other rights and obligations under the Stockholders' Agreement.
"BENEFICIAL OWNERSHIP" by a Person of any securities includes
ownership by any Person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares (i)
voting power which includes the power to vote, or to direct the voting of,
such security; and/or (ii) investment power which includes the power to
dispose, or to direct the disposition of, such security; and shall
otherwise be interpreted in accordance with the term "beneficial ownership"
as defined in Rule 13d-3 adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
as in effect on the date hereof, and in addition, "beneficial ownership"
shall include securities which such Person has the right to acquire
(irrespective of whether such right is exercisable immediately or only
after the passage of time, including the passage of time in excess of 60
days) pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or options, or
otherwise. For purposes of this Agreement, a Person shall be deemed to
beneficially own any securities beneficially owned by its Affiliates or any
Group of which such Person or any such Affiliate is a member.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in
Amsterdam, The Netherlands, in New York, New York or in Minneapolis,
Minnesota.
"COMMON STOCK AGREEMENT" means the Original Common Stock Agreement, as
amended by the Accelerated Repurchase Agreement and as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"DOLLARS" and "$" mean lawful currency of the United States of
America.
"GROUP" means two or more persons acting as a partnership, limited
partnership, syndicate or other group for the purpose of acquiring,
holding, voting or disposing of securities.
"KLM COMBINED VOTING POWER" at any measurement date shall mean the
total number of votes which could have been cast in a vote at a meeting of
the stockholders of, as applicable, KLM, a KLM Holding Company (as defined
below) or a KLM Partner (as defined below) (or any successor of any of
them) by person or by proxy at such meeting.
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"KLM VOTING SECURITIES" shall mean, collectively, (i) KLM's Common
Shares, par value 5 NLG per share, (ii) any other securities entitled, or
that may be entitled, to vote on matters submitted to stockholders for a
vote at a stockholders' meeting of KLM, or any such securities of a holding
company formed by KLM which holds more than 50% of the KLM Combined Voting
Power (a "KLM HOLDING COMPANY"), (iii) any common shares, ordinary shares
or other comparable securities entitled to vote on matters submitted to a
general vote of shareholders of a Person that has entered into a
partnership, joint venture or similar arrangement with KLM pursuant to
which the stockholders of KLM and such Person enjoy substantially
equivalent economic rights as a result of twinning, equalization or other
sharing arrangements between KLM and such Person (a "KLM PARTNER"), and
(iv) any other securities, warrants or options or rights of any nature
(whether or not issued by KLM) that are convertible into, exchangeable for,
or exercisable for the purchase of, or otherwise give the holder thereof
any rights in respect of (whether or not the right to convert, exercise or
exchange is subject to the passage of time, contingencies or contractual
restrictions or any combination thereof), any security described in clauses
(i) through (iii) of this definition; PROVIDED, that rights issued pursuant
to any stockholder rights plan shall not be deemed to be KLM Voting
Securities.
"MANAGEMENT BOARD OF KLM" means the management board of KLM or
equivalent governing body of a KLM Holding Company or a KLM Partner or any
successor of any of them.
"MERGER" means the merger, pursuant to Section 251(g) of the Delaware
General Corporation Law of Newbridge Merger Corporation, a Delaware
corporation and wholly owned subsidiary of Newbridge Parent Corporation,
with and into NWA Corp. in accordance with the terms of the Agreement and
Plan of Merger, dated as of January 25, 1998, among NWA Corp., Newbridge
Parent Corporation and Newbridge Merger Corporation, as a result of which
NWA Corp. will become a wholly owned subsidiary of Newbridge Parent
Corporation.
"NWA CORP." means (i) prior to the Merger, Northwest Airlines
Corporation, a Delaware corporation and (ii) following the Merger,
Newbridge Parent Corporation, a Delaware corporation, which shall change
its name to Northwest Airlines Corporation concurrently with the Merger,
and any holding company subsequently formed by NWA Corp. which holds more
than 50% of the NWA Corp. Combined Voting Power.
"NWA CORP. BOARD OF DIRECTORS" shall mean the board of directors of
NWA Corp. or any successor (including any holding company surviving the
Merger) or Northwest Airlines, Inc.
"NWA CORP. COMBINED VOTING POWER" at any measurement date shall mean
the total number of votes which could have been cast in an election of
members of the NWA Corp. Board of Directors had a meeting of the
stockholders of NWA Corp. (or its successors) been duly held based upon a
record date as of the measurement date if
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all NWA Corp. Voting Securities then outstanding and entitled to vote at
such meeting were present and voted to the fullest extent possible at
such meeting.
"NWA CORP. VOTING SECURITIES" shall mean, collectively, (i) the Common
Stock (as defined in the Accelerated Repurchase Agreement), (ii) any other
securities entitled, or that may be entitled, to vote generally for the
election of members of the NWA Corp. Board of Directors, and (iii) any
other securities, warrants or options or rights of any nature (whether or
not issued by NWA Corp.) that are convertible into, exchangeable for, or
exercisable for the purchase of, or otherwise give the holder thereof any
rights in respect of (whether or not the right to convert, exercise or
exchange is subject to the passage of time, contingencies or contractual
restrictions or any combination thereof), any security described in clause
(i) or (ii) of this definition; PROVIDED, that rights issued pursuant to
any stockholder rights plan shall not be deemed to be NWA Corp. Voting
Securities.
"PERSON" means any individual, corporation, partnership, trust or
other entity of any nature whatsoever.
"REORGANIZATION TRANSACTION" means (i) any merger, consolidation,
recapitalization, liquidation or other business combination transaction
involving NWA Corp., Northwest Airlines, Inc. or KLM or a KLM Holding
Company or a KLM Partner (or any successors (including, in the case of NWA
Corp., any holding company surviving the Merger) to any of such entities),
(ii) any tender offer or exchange offer for any securities of NWA Corp.,
Northwest Airlines, Inc. or KLM, a KLM Holding Company or a KLM Partner (or
any successors (including, in the case of NWA Corp., any holding company
surviving the Merger) to any of such entities) or (iii) any sale or other
disposition of assets of NWA Corp., Northwest Airlines, Inc. or KLM or a
KLM Holding Company or a KLM Partner (or any successors to any of such
entities) in a single transaction or in a series of related transactions in
each of the foregoing cases constituting individually or in the aggregate
10% or more of the assets of NWA Corp., Northwest Airlines, Inc. or KLM or
a KLM Holding Company or a KLM Partner, as applicable, or 10% or more of
the then outstanding NWA Corp. Voting Securities or KLM Voting Securities,
as applicable, of NWA Corp. or KLM or securities entitled, or that may be
entitled, to vote at a meeting of stockholders of a KLM Holding Company or
a KLM Partner (or any successors to any of such entities), as applicable.
"STANDSTILL PERIOD" shall mean the period commencing on the Initial
Closing Date and continuing until the later of (i) the tenth anniversary of
the Initial Closing Date, and (ii) the termination of the Alliance
Implementation Agreement (PROVIDED, that, if the Alliance Implementation
Agreement is terminated by NWA Corp. in accordance with the provisions set
forth in Section 7.1(e)(ii) of the Common Stock Agreement, then the
operative date for this clause (ii) will be the date on which KLM no longer
beneficially owns any NWA Corp. Voting Securities including any NWA Corp.
Voting Securities acquired or to be acquired by KLM pursuant to Section 1.1
or 1.2 of the Option Agreement).
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"STOCKHOLDERS' AGREEMENT" means the Second Amended and Restated
Investor Stockholders' Agreement dated as of December 23, 1993, as amended,
supplemented or otherwise modified from time to time, among NWA Corp., KLM
and certain other stockholders of NWA Corp. parties thereto, as in effect
on the date hereof.
"SUPERVISORY BOARD OF KLM" means the supervisory board of KLM or
equivalent governing body of a KLM Holding Company or a KLM Partner or any
successor of any of them.
"UMBRELLA AGREEMENTS" means, collectively, (i) the Commercial
Cooperation and Integration Agreement dated September 9, 1992, (ii) the
Worldwide Pricing and Inventory Control Agreement dated January 15, 1993,
(iii) the Worldwide Sales and Travel Agency Compensation Agreement dated
January 15, 1993, (iv) the Worldwide Strategic Planning and Scheduling
Agreement dated January 15, 1993, (v) the Alliance Implementation
Agreement, and (vi) all other written agreements entered into by KLM and
Northwest Airlines, Inc. relating to the commercial cooperation between
them which relate to the preceding agreements.
"WORKS COUNCIL OF KLM" means the works council of KLM or equivalent
body of a KLM Holding Company or a KLM Partner or any successor of any of
them.
Section 2. COVENANTS WITH RESPECT TO NWA CORP. VOTING SECURITIES AND
OTHER MATTERS.
2.1 ACQUISITION OF NWA CORP. VOTING SECURITIES AND MATERIAL ASSETS.
Except as specifically provided in the Common Stock Agreement or pursuant to an
Option (as defined in the Option Agreement), during the Standstill Period KLM
will not, and will cause each of its Affiliates not to, directly or indirectly,
acquire, offer to acquire, agree to acquire, become the beneficial owner of or
obtain any rights in respect of any NWA Corp. Voting Securities or, except as
provided for in the Umbrella Agreements, any material assets owned directly or
indirectly by NWA Corp. or any successor or any Affiliate thereof, whether by
purchase or otherwise, or take any action in furtherance thereof.
2.2 PROXY SOLICITATIONS, ETC. During the Standstill Period KLM will
not, and will cause each of its Affiliates not to, directly or indirectly,
solicit proxies, assist any other Person in any way, directly or indirectly, in
the solicitation of proxies, or otherwise become a "participant" in a
"solicitation," or assist any "participant" in a "solicitation" (as such terms
are defined in Rule 14a-1 of Regulation 14A under the Exchange Act as in effect
on the date of this Agreement) in opposition to the recommendation or proposal
of the NWA Corp. Board of Directors, or submit any proposal for the vote of
stockholders of NWA Corp., or recommend or request or induce or attempt to
induce any other Person to take any such actions, or seek to advise, encourage
or influence any other Person with respect to the voting of NWA Corp. Voting
Securities. In furtherance of KLM's obligations pursuant to this Section 2.2,
during the Standstill Period KLM shall, and shall cause its Affiliates to, at
any annual or special meeting of stockholders at which members of the NWA Corp.
Board of Directors are to be elected or in connection with a solicitation of
consents through which
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members of the NWA Corp. Board of Directors are to be selected, to vote (or
give a written consent or proxy with respect to) all NWA Corp. Voting
Securities beneficially owned by them in favor of the election to the NWA
Corp. Board of Directors of the persons recommended by the NWA Corp. Board of
Directors.
2.3 NO VOTING TRUSTS, POOLING AGREEMENTS, OR FORMATION OF "GROUPS".
During the Standstill Period KLM will not, and will cause each of its Affiliates
not to, directly or indirectly, join in or in any other way participate in a
partnership, pooling agreement, syndicate, voting trust or other Group with
respect to NWA Corp. Voting Securities, or enter into any agreement or
arrangement or otherwise act in concert with any other Person, for the purpose
of acquiring, holding, voting or disposing of NWA Corp. Voting Securities.
2.4 LIMITATIONS ON PROPOSALS. During the Standstill Period KLM will
not, and will cause each of its Affiliates not to, directly or indirectly,
initiate, propose or otherwise solicit stockholders for the approval of one or
more stockholder proposals with respect to NWA Corp. or any successor thereof or
any Affiliate thereof or induce or attempt to induce any other Person to
initiate any stockholder proposal or seek election to or seek to place a
representative on the NWA Corp. Board of Directors or equivalent governing body
of any successor thereof or any Affiliate thereof (except to the extent
expressly invited to do so by the NWA Corp. Board of Directors) or seek removal
of any member of the NWA Corp. Board of Directors or equivalent governing body
of any successor thereof or any Affiliate thereof (other than any such member
who may have been previously designated by KLM).
2.5 LIMITATION ON VARIOUS OTHER ACTIONS. During the Standstill
Period, KLM will not, and will cause each of its Affiliates not to, take any
action, alone or in concert with any other Person, (a) to seek to effect a
change in control of NWA Corp. or any successor thereof or any Affiliate
thereof, (b) to seek to effect a Reorganization Transaction with respect to NWA
Corp. or any successor thereof or any Affiliate thereof, (c) except as provided
for in the Umbrella Agreements, to seek to effect any control or influence over
the management of NWA Corp. or any successor thereof or any Affiliate thereof,
the NWA Corp. Board of Directors or the policies of NWA Corp. or any successor
thereof or any Affiliate thereof, (d) to advise, assist or encourage or finance
(or assist or arrange financing to or for) any other Person in connection with
any of the matters restricted by, or to otherwise seek to circumvent the
limitations of the provisions of, Section 2 of this Agreement (any such action
described in clause (a), (b), (c) or (d), a "NWA TRANSACTION PROPOSAL"), (e) to
present to NWA Corp. or any stockholders thereof or any third party any proposal
that can reasonably be expected to result in a NWA Transaction Proposal or in an
increase in the NWA Corp. Combined Voting Power of NWA Corp. Voting Securities
beneficially owned in the aggregate by KLM and its Affiliates, (f) to publicly
suggest or announce its willingness or desire to engage in a transaction or
group of transactions or have another Person engage in a transaction or group of
transactions that could reasonably be expected to result in a NWA Transaction
Proposal or in an increase in the NWA Corp. Combined Voting Power of NWA Corp.
Voting Securities beneficially owned in the aggregate by KLM and its Affiliates,
(g) to initiate, request, induce, encourage or attempt to induce or give
encouragement to any other Person to initiate, or otherwise provide assistance
to any Person who has made or is contemplating making, any proposal that can
reasonably be expected to result in a NWA
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Transaction Proposal or in an increase in the NWA Corp. Combined Voting Power
of NWA Corp. Voting Securities beneficially owned in the aggregate by KLM and
its Affiliates, or (h) to request a waiver, modification or amendment of any
of the provisions of Section 2 of this Agreement; PROVIDED, HOWEVER, that
this subclause (h) shall not apply to any Private KLM Waiver Request conveyed
during the pendency of any unsolicited Business Combination Proposal made
(either publicly or in a communication to the NWA Corp. Board of Directors)
by any Person that is engaged in the commercial airline business or Group
that is engaged in the commercial airline business or Group that includes a
Person engaged in the commercial airline business (other than KLM and its
Affiliates).
For purposes of this Section 2: (i) a "Business Combination Proposal"
means (x) a tender or exchange offer or other bona fide offer to acquire
directly or indirectly any voting securities of NWA Corp. under circumstances
such that, immediately after such acquisition, such Person or Group would
beneficially own voting securities with an aggregate voting power representing
more than 50% of the total voting power of NWA Corp., or (y) a proposal or offer
for a merger, amalgamation or other business combination directly or indirectly
involving NWA Corp. that would result in a change in control of NWA Corp., or a
proposal or offer to acquire directly or indirectly all or substantially all the
assets of NWA Corp.; (ii) a "KLM Business Combination Proposal" means a (A)
Business Combination Proposal made by KLM, (B) a Business Combination Proposal
made by a Group in which KLM is a participant or (C) the formation by KLM of a
Group for the purpose of making a Business Combination Proposal; PROVIDED,
HOWEVER, in each case, in the event of a Business Combination Proposal described
in clause (x) or (y) above, a Business Combination Proposal shall not constitute
a KLM Business Combination Proposal unless consummation of such Business
Combination Proposal would result in KLM (or the Group in which it is a
participant, if applicable) beneficially owning voting securities with an
aggregate voting power representing more than 50% of the total voting power of
NWA Corp.; and (iii) a "Private KLM Waiver Request" means a request conveyed by
the President of KLM to the Chief Executive Officer of NWA Corp. for a waiver of
the provisions of Section 2 of this Agreement solely to permit KLM to submit a
KLM Business Combination Proposal to the Chief Executive Officer of NWA Corp. in
competition with such unsolicited Business Combination Proposal, provided that
neither the fact that such request has been made by KLM, the fact that KLM has
submitted or will be submitting a KLM Business Combination Proposal or any of
the terms of such KLM Business Combination Proposal are publicly disclosed,
directly or indirectly, by or on behalf of KLM or any of its Affiliates.
2.6 VOTING. During the Standstill Period KLM shall, and shall
cause its Affiliates to, be present, in person or represented by proxy, at
all meetings of stockholders of NWA Corp. so that all NWA Voting Securities
beneficially owned by KLM shall be counted for the purpose of determining the
presence of a quorum at such meetings. Except as otherwise provided in
Section 2.2, in connection with any matters presented to stockholders of NWA
Corp. or any successor corporation or any Affiliate thereof, KLM shall be
permitted to vote (or give a written consent or proxy with respect to) all
NWA Corp. Voting Securities beneficially owned by KLM in its sole discretion.
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2.7 CERTAIN PERMITTED TRANSACTIONS AND COMMUNICATIONS. For clarity,
this Agreement, among other things, does not prohibit (i) the acquisition or
holding in the ordinary course of business by any employee benefit plan whose
trustees, investment managers or similar advisors are unaffiliated with KLM or
its Affiliates of securities or rights referred to in Section 2.1, (ii) the
consummation of any transaction contemplated pursuant to the Common Stock
Agreement, including the exercise by KLM on the Initial Closing Date of the
option to purchase shares pursuant to Section 17 of the Stockholders' Agreement,
any purchase of shares contemplated by the Common Stock Agreement or the Option
Agreement and any conversion of Class A Common Stock to Class B Common Stock or
Class B Common Stock to Class A Common Stock as provided for in such agreements,
or (iii) officers and employees of KLM or its Affiliates from communicating with
officers and employees of NWA Corp. or its Affiliates on matters related to or
governed by the Umbrella Agreements, or KLM or its Affiliates from communicating
with the Chairman of the NWA Corp. Board of Directors or the Chief Executive
Officer of NWA Corp., so long as such communication is conveyed in strict
confidence, does not require public disclosure by KLM or, in the reasonable
opinion of KLM's counsel, by NWA Corp., and is not intended to elicit, and, in
the reasonable opinion of KLM's counsel, does not require the issuance of, a
public response by NWA Corp.
2.8 EXCEPTIONS TO APPLICABILITY OF CERTAIN COVENANTS. Notwithstanding
the foregoing, in the event (i) (x) any Person that is engaged in the commercial
airline business or Group that is engaged in the commercial airline business or
Group that includes a Person engaged in the commercial airline business (other
than KLM and its Affiliates), either publicly or in a communication to the NWA
Corp. Board of Directors, makes on an unsolicited basis a Business Combination
Proposal, (y) the NWA Corp. Board of Directors adopts a resolution recommending
acceptance of such Business Combination Proposal, and (z) such resolution
remains in effect, or (ii) the NWA Corp. Board of Directors shall publicly
announce that it has decided to sell NWA Corp. or Northwest Airlines, Inc. and
will consider proposals for the acquisition of NWA Corp. or Northwest Airlines,
Inc. or has otherwise publicly stated that NWA Corp. or Northwest Airlines, Inc.
is for sale, then the provisions of Sections 2.1 through 2.5, in the case of
clause (i), shall not apply to any KLM Business Combination Proposal commenced
during the pendency of such Business Combination Proposal and, in the case of
clause (ii), shall not apply until the NWA Corp. Board of Directors shall
publicly announce that it has rescinded its decision to sell NWA Corp. or
Northwest Airlines, Inc.; PROVIDED, that in determining whether to adopt any
resolution described in clause (i)(y) of this paragraph that includes approval
of a "break-up" fee, "lock-up" option or other similar arrangement, and in
determining whether to adopt any resolution waiving, rescinding or otherwise
declaring inapplicable the provisions of the Rights Agreement of NWA Corp. dated
as of November 16, 1995, as amended, as it may relate to such Business
Combination Proposal, the NWA Corp. Board of Directors shall give due
consideration to the likelihood that in light of the strategic alliance between
KLM and NWA Corp. as contemplated by the Alliance Implementation Agreement, KLM
may desire to make a competitive KLM Business Combination Proposal.
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Section 3. COVENANTS WITH RESPECT TO THE KLM VOTING SECURITIES AND
OTHER MATTERS.
3.1 ACQUISITION OF KLM VOTING SECURITIES OR MATERIAL ASSETS. Except
as specifically provided in the Common Stock Agreement, during the Standstill
Period NWA Corp. will not, and will cause each of its Affiliates not to,
directly or indirectly, acquire, offer to acquire, agree to acquire, become the
beneficial owner of or obtain any rights in respect of any KLM Voting Securities
or, except as provided for in the Umbrella Agreements, any material assets owned
directly or indirectly by KLM or any successor or any Affiliate thereof, whether
by purchase or otherwise, or take any action in furtherance thereof.
3.2 PROXY SOLICITATIONS, ETC. During the Standstill Period NWA Corp.
will not, and will cause each of its Affiliates not to, directly or indirectly,
solicit proxies, assist any other Person in any way, directly or indirectly, in
the solicitation of proxies, or otherwise become a "participant" in a
"solicitation," or assist any "participant" in a "solicitation" (as such terms
are defined in Rule 14a-1 of Regulation 14A under the Exchange Act as in effect
on the date of this Agreement) in opposition to the recommendation or proposal
of the Supervisory Board of KLM or the Management Board of KLM or equivalent
governing body of a KLM Holding Company or a KLM Partner or any successor
thereof or any Affiliate thereof, or submit any proposal for the vote of
stockholders of KLM, a KLM Holding Company or a KLM Partner, or recommend or
request or induce or attempt to induce any other Person to take any such
actions, or seek to advise, encourage or influence any other Person with respect
to the voting of KLM Voting Securities.
3.3 NO VOTING TRUSTS, POOLING AGREEMENTS, OR FORMATION OF "GROUPS".
During the Standstill Period NWA Corp. will not, and will cause each of its
Affiliates not to, directly or indirectly, join in or in any other way
participate in a partnership, pooling agreement, syndicate, voting trust or
other Group with respect to KLM Voting Securities, or enter into any agreement
or arrangement or otherwise act in concert with any other Person, for the
purpose of acquiring, holding, voting or disposing of KLM Voting Securities.
3.4 LIMITATIONS ON PROPOSALS. During the Standstill Period NWA Corp.
will not, and will cause each of its Affiliates not to, directly or indirectly,
make or cause to be made any proposal for a Reorganization Transaction with
respect to KLM, a KLM Holding Company or a KLM Partner or any successor thereof
or any Affiliate thereof or initiate, propose or otherwise solicit stockholders
for the approval of one or more stockholder proposals with respect to KLM, a KLM
Holding Company or a KLM Partner or any successor thereof or any Affiliate
thereof or induce or attempt to induce any other Person to initiate any
stockholder proposal or seek election to or seek to place a representative on
the Supervisory Board of KLM, Management Board of KLM or equivalent governing
body of a KLM Holding Company or a KLM Partner or any successor thereof or any
Affiliate thereof (except to the extent expressly invited to do so by the
Supervisory Board of KLM) or oppose such a proposal of KLM's Management Board or
the Supervisory Board of KLM or seek removal of any member of the Supervisory
Board of KLM or equivalent governing body of a KLM Holding Company or a KLM
Partner or any successor thereof or any Affiliate thereof (other than any such
member who may have been previously designated by NWA Corp.).
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3.5 LIMITATION ON VARIOUS OTHER ACTIONS. During the Standstill
Period, NWA Corp. will not, and will cause each of its Affiliates not to, take
any action, alone or in concert with any other Person, (a) to seek to effect a
change in control of KLM or a KLM Holding Company or a KLM Partner or any
successor thereof or any Affiliate thereof, (b) to seek to effect a
Reorganization Transaction with respect to KLM or a KLM Holding Company or a KLM
Partner or any successor thereof or any Affiliate thereof, (c) except as
provided for in the Umbrella Agreements, to seek to effect any control or
influence over the management of KLM, a KLM Holding Company or a KLM Partner, or
any successor thereof or any Affiliate thereof, the Supervisory Board of KLM or
the Works Council of KLM or the policies of KLM, a KLM Holding Company or a KLM
Partner or any successor thereof or any Affiliate thereof, (d) to advise, assist
or encourage or finance (or assist or arrange financing to or for) any other
Person in connection with any of the matters restricted by, or to otherwise seek
to circumvent the limitations of the provisions of, Section 3 of this Agreement
(any such action described in clause (a), (b), (c) or (d), a "KLM TRANSACTION
PROPOSAL"), (e) to present to KLM or a KLM Holding Company or a KLM Partner or
any successor thereof or any Affiliate thereof, its stockholders or any third
party any proposal that can reasonably be expected to result in a KLM
Transaction Proposal or in an increase in the KLM Combined Voting Power of KLM
Voting Securities beneficially owned in the aggregate by NWA Corp. and its
Affiliates, (f) to publicly suggest or announce its willingness or desire to
engage in a transaction or group of transactions or have another Person engage
in a transaction or group of transactions that could reasonably be expected to
result in a KLM Transaction Proposal or in an increase in the KLM Combined
Voting Power of KLM Voting Securities beneficially owned in the aggregate by NWA
Corp. and its Affiliates, (g) to initiate, request, induce, encourage or attempt
to induce or give encouragement to any other Person to initiate, or otherwise
provide assistance to any Person who has made or is contemplating making, any
proposal that can reasonably be expected to result in a KLM Transaction Proposal
or in an increase in the KLM Combined Voting Power of KLM Voting Securities
beneficially owned in the aggregate by NWA Corp. and its Affiliates, or (h) to
request a waiver, modification or amendment of any of the provisions of Section
3 of this Agreement; PROVIDED, HOWEVER, that this subclause (h) shall not apply
to any Private NWA Corp. Waiver Request conveyed during the pendency of any
unsolicited Business Combination Proposal made (either publicly or in a
communication to the Supervisory Board of KLM) by any Person that is engaged in
the commercial airline business or Group that is engaged in the commercial
airline business or Group that includes a Person engaged in the commercial
airline business (other than NWA Corp. and its Affiliates). NWA Corp.
represents and warrants that as of the date hereof it owns no KLM Voting
Securities and its KLM Combined Voting Power is zero.
For purposes of this Section 3: (i) a "Business Combination Proposal"
means (x) a tender or exchange offer or other bona fide offer to acquire
directly or indirectly any voting securities of KLM under circumstances such
that, immediately after such acquisition, such Person or Group would
beneficially own voting securities with an aggregate voting power representing
more than 50% of the total voting power of KLM, or (y) a proposal or offer for a
merger, amalgamation or other business combination directly or indirectly
involving KLM that would result in a change in control of KLM, or a proposal or
offer to acquire directly or indirectly all or substantially all the assets of
KLM; (ii) a "NWA Corp. Business Combination Proposal" means a (A) Business
Combination Proposal made by NWA
11
Corp., (B) a Business Combination Proposal made by a Group in which NWA Corp.
is a participant or (C) the formation by NWA Corp. of a Group for the purpose
of making a Business Combination Proposal; PROVIDED, HOWEVER, in each case,
in the event of a Business Combination Proposal described in clause (x) or
(y) above, a Business Combination Proposal shall not constitute a NWA Corp.
Business Combination Proposal unless consummation of such Business
Combination Proposal would result in NWA Corp. (or the Group in which it is a
participant, if applicable) beneficially owning voting securities with an
aggregate voting power representing more than 50% of the total voting power
of KLM; and (iii) a "Private NWA Corp. Waiver Request" means a request
conveyed by the Chief Executive Officer of NWA Corp. to the President of KLM
for a waiver of the provisions of Section 3 of this Agreement solely to
permit NWA Corp. to submit a NWA Corp. Business Combination Proposal to the
President of KLM in competition with such unsolicited Business Combination
Proposal; provided, that neither the fact that such request has been made by
NWA Corp., the fact that NWA Corp. has submitted or will be submitting a NWA
Corp. Business Combination Proposal or any of the terms of such NWA Corp.
Business Combination Proposal are publicly disclosed, directly or indirectly,
by or on behalf of NWA Corp. or any of its Affiliates.
3.6 CERTAIN PERMITTED TRANSACTIONS AND COMMUNICATIONS. For clarity,
this Agreement, among other things, does not prohibit (i) the acquisition or
holding in the ordinary course of business by any employee benefit plan whose
trustees, investment managers or similar advisors are unaffiliated with NWA
Corp. or its Affiliates of securities or rights referred to in Section 3.1 or
(ii) officers and employees of NWA Corp. or its Affiliates from communicating
with officers and employees of KLM or its Affiliates on matters related to or
governed by the Umbrella Agreements, or NWA Corp. or its Affiliates from
communicating with the Chairman of the Supervisory Board of KLM or the President
of KLM, so long as such communication is conveyed in strict confidence, does not
require public disclosure by NWA Corp. or, in the reasonable opinion of NWA
Corp.'s counsel, by KLM and is not intended to elicit, and, in the reasonable
opinion of NWA Corp.'s counsel, does not require the issuance of, a public
response by KLM.
3.7 EXCEPTIONS TO APPLICABILITY OF CERTAIN COVENANTS. Notwithstanding
the foregoing, in the event (i) (x) any Person that is engaged in the commercial
airline business or Group that includes a Person engaged in the commercial
airline business (other than NWA Corp. and its Affiliates), either publicly or
in a communication to KLM, makes on an unsolicited basis a Business Combination
Proposal, (y) the Supervisory Board of KLM or the Management Board of KLM has
adopted a resolution recommending acceptance of such Business Combination
Proposal, and (z) such resolution remains in effect, or (ii) the Supervisory
Board of KLM or the Management Board of KLM shall announce that it has decided
to sell KLM and will consider proposals for the acquisition of KLM or has
otherwise publicly stated that KLM is for sale, then the provisions of Sections
3.1 through 3.5, in the case of clause (i), shall not apply to any NWA Corp.
Business Combination Proposal commenced during the pendency of such Business
Combination Proposal and, in the case of clause (ii), shall not apply until the
Supervisory Board of KLM or the Management Board of KLM shall publicly announce
that it has rescinded its decision to sell KLM; PROVIDED, that in determining
whether to adopt any resolution described in clause (i)(y) of this paragraph
that
12
includes approval of a "break-up" fee, "lock-up" option or other similar
arrangement, the Supervisory Board of KLM shall give due consideration to the
possibility that in light of the strategic alliance between NWA Corp. and KLM
as contemplated by the Alliance Implementation Agreement, NWA Corp. may
desire to make a competitive NWA Corp. Business Combination Proposal.
3.8 INTERPRETATION. The covenants in this Section 3 shall be
interpreted in the light of law and regulations applicable in The Netherlands
from time to time. In particular, terms used in this Section 3 (including,
without limitation, "participant", "solicitation" and terms used in the
definition of "Reorganization Transaction", as defined in Section 1 and as such
term is used in this Section 3) shall have the meanings ascribed to the same or
similar terms as defined under any then applicable law and regulations in effect
in The Netherlands, and shall be interpreted in the light of any such law and
regulations.
Section 4. TERM OF AGREEMENT. Unless this Agreement specifically
provides for earlier termination with respect to any particular right or
obligation, this Agreement shall terminate on the last day of the Standstill
Period; PROVIDED, that, if KLM exercises the Default Option (as defined in the
Option Agreement), KLM shall have the right to terminate this Agreement by
delivering written notice of such termination to NWA Corp. (and the Standstill
Period shall expire for all purposes of this Agreement upon the delivery of such
notice).
Section 5. REMEDIES. KLM and NWA Corp. acknowledge and agree that
(i) the provisions of this Agreement are reasonable and necessary to protect the
proper and legitimate interests of the parties hereto, and (ii) the parties
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to preliminary and permanent injunctive relief to prevent breaches of
the provisions of this Agreement by the other party without the necessity of
proving actual damages or of posting any bond, and to enforce specifically the
terms and provisions hereof and thereof, which rights shall be cumulative and in
addition to any other remedy to which the parties may be entitled hereunder or
at law or equity.
Section 6. GENERAL PROVISIONS.
6.1 EXECUTION IN COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become a binding agreement when one or more counterparts
have been signed by each party and delivered to the other parties.
6.2 NOTICES. All notices, requests, demands or other communications
provided herein shall be made in writing and shall be deemed to have been duly
given if delivered as follows:
13
If to NWA Corp.:
0000 Xxxx Xxx Xxxxxxx
Xxxxx, Xxxxxxxxx 00000
Attention: Senior Vice President, General Counsel
and Secretary
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to KLM:
Xxxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxxxx X.X.
Xxxxxxxxxxxxxx 00
1192 G P Amstelveen
The Netherlands
Attention: Senior Vice President and General
Counsel
Fax: 000-0000-000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as either party shall have specified by notice in
writing to the other party. All such notices, requests, demands and
communications shall be deemed to have been received on (i) the date of delivery
if sent by messenger, (ii) on the Business Day following the Business Day on
which delivered to a recognized courier service if sent by overnight courier or
(iii) on the date received, if sent by fax.
6.3 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
ENTERED INTO AND TO BE PERFORMED IN NEW YORK AND WITHOUT REGARD TO THE
APPLICATION OF PRINCIPLES OF CONFLICT OF LAWS.
14
6.4 TITLES AND HEADINGS. Titles and headings to Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
6.5 SUCCESSORS AND ASSIGNS. This Agreement shall not be assignable by
KLM without the prior written consent of NWA Corp. or by NWA Corp. without the
prior written consent of KLM. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors in
interest and assigns (including, in the case of NWA Corp., any holding company
surviving the Merger).
6.6 ENTIRE AGREEMENT; NO ORAL WAIVER; CONSTRUCTION. This Agreement,
the Common Stock Agreement, the Preferred Stock Repurchase Agreement, dated as
of September 29, 1997, between KLM and NWA Corp., the Amendment to the
Stockholders' Agreement, the Accelerated Repurchase Agreement, the Option
Agreement and the certificates and other documents contemplated hereby and
thereby constitute the entire agreement among the parties pertaining to the
subject matter hereof and supersede all prior and contemporaneous agreements,
understandings and representations, whether oral or written, of the parties in
connection therewith. No covenant or condition or representation not expressed
in this Agreement shall affect or be effective to interpret, change or restrict
this Agreement. No prior drafts of this Agreement and no words or phrases from
any such prior drafts shall be admissible into evidence in any action, suit or
other proceeding involving this Agreement or the transactions contemplated
hereby. This Agreement may not be changed or terminated orally, nor shall any
change, termination or attempted waiver of any of the provisions of this
Agreement be binding on any party unless in writing signed by the parties
hereto. No modification, waiver, termination, rescission, discharge or
cancellation of this Agreement and no waiver of any provision of or default
under this Agreement shall affect the right of any party thereafter to enforce
any other provision or to exercise any right or remedy in the event of any other
default, whether or not similar. This Agreement has been negotiated by KLM and
NWA Corp. and their respective legal counsel, and legal or equitable principles
that might require the construction of this Agreement against the party drafting
this Agreement will not apply in any construction or interpretation of this
Agreement.
6.7 SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect.
6.8 NO THIRD-PARTY RIGHTS. Nothing in this Agreement, expressed or
implied, shall or is intended to confer upon any Person other than the parties
hereto or their respective successors or assigns, any rights or remedies of any
nature or kind whatsoever under or by reason of this Agreement.
6.9 SUBMISSION TO JURISDICTION. Each of the parties hereto hereby
irrevocably unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to or arising from this Agreement, or for recognition
and enforcement of any judgment
15
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the United States of America sitting in the Southern District
of New York;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to its
address set forth in Section 6.2; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other appropriate jurisdiction.
6.10 FURTHER ASSURANCES. From time to time, at the reasonable request
of the other party hereto and without further consideration, each party hereto
shall execute and deliver such additional documents and take all such further
action as may be necessary or desirable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement.
IN WITNESS WHEREOF, the parties have executed, delivered and entered
into this Agreement as of the day and year first above written.
NORTHWEST AIRLINES CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
General Counsel and Secretary
KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V.
By: /s/ X. X. Xxxxxxxxxxx
------------------------------------------
Name: X. X. Xxxxxxxxxxx
Title: Director Corporate Finance
