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EXHIBIT 10.2
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STOCKHOLDERS' AGREEMENT
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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
ARTICLE III
RESTRICTIONS ON TRANSFER
3.01. General Restriction............................................................................. 12
3.02. Legends......................................................................................... 12
3.03. Restrictions on Certain Transfers of Shares..................................................... 13
3.04. Right of First Refusal.......................................................................... 13
3.05. Affiliate Transferees to Execute Agreement...................................................... 15
3.06. Sale to a Third Party........................................................................... 15
3.07. Restrictions on Certain Transfers of Shares of Preferred Stock.................................. 15
3.08. Improper Sale................................................................................... 16
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............................................................ 19
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Section Page
ARTICLE V
MISCELLANEOUS
5.01. Further Action.................................................................................. 19
5.02. Representations................................................................................. 19
5.03. Specific Performance............................................................................ 19
5.04. Amendments and Waivers.......................................................................... 19
5.05. Notices......................................................................................... 20
5.06. Benefit; Successors and Assigns................................................................. 25
5.07. Arbitration..................................................................................... 25
5.08. Changes to Non-Competition Agreement............................................................ 27
5.09. Termination..................................................................................... 27
5.10. Miscellaneous................................................................................... 27
5.11. Tax Treatment................................................................................... 27
5.12. Tax Opinion..................................................................................... 28
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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.
"Affiliated Person" means, with respect to any specified Person, such
Person, such Person's Affiliates, such Person's officers, directors and
employees and the officers, directors and employees of such Affiliates.
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"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
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
"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-___) 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 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
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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.
"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.
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"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 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
Alitalia Schedule B
Arbitration Request 5.07
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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
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
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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 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:
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(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").
(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
of Preferred Stock has 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 of Preferred Stock is 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
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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:
(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.
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(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 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
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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 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
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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.
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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 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
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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) 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
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(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 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.
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(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 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
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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 Shares 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
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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 with
any 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 Affiliated Person. Notwithstanding any other
provision of this Agreement except with respect to Shares 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 each of the other Parent Entities,
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.
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.
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(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 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
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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 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 662/3% 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
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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:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(b) if to USAW or USAM:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
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with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(c) if to Air Canada or Resnet:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(d) if to British Airways or DSI:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
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(e) if to SwissAir or Roscor:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(f) if to KLM or TIS:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(g) if to Aer Lingus or Retford:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
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with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(h) if to Alitalia or Racom:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(i) if to Austrian Airlines or Travidata:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
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(j) if to Olympic or Olynet:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(k) if to TAP or Coporga:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
with a copy to:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
(l) if to the Company:
___________________________________
___________________________________
___________________________________
Telecopy:__________________________
Attention:_________________________
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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 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
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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).
(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
crossexamination, 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.
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(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 a majority of the whole Board, which majority
includes the affirmative vote of at least four Original Owner Directors (or, if
there are fewer than four Original Owner Directors at the time such vote is
taken, at least such number of Original Owner Directors as equals one less than
all such Original Owner Directors).
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.
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 formation of the Company as
a nonrecognition transfer by the partners of the Galileo International
Partnership (the "Partnership") of their
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respective partnership interests in the Partnership in exchange for shares of
Common Stock and Preferred Stock under Section 351 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.
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:
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US AIRWAYS, INC.
By _________________________________
Name:
Title:
USAM CORPORATION
By _________________________________
Name:
Title:
AIR CANADA
By _________________________________
Name:
Title:
RESNET HOLDINGS, INC.
By _________________________________
Name:
Title:
BRITISH AIRWAYS PLC
By _________________________________
Name:
Title:
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30
DISTRIBUTION SYSTEM, INC.
By _________________________________
Name:
Title:
SWISSAIR TRANSPORT
COMPANY LTD.
By _________________________________
Name:
Title:
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:
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AER LINGUS PLC
By _________________________________
Name:
Title:
RETFORD LIMITED
By _________________________________
Name:
Title:
ALITALIA-LINEE AEREE
ITALIANE S.P.A.
By _________________________________
Name:
Title:
RACOM TELEDATA S&A
By _________________________________
Name:
Title:
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32
AUSTRIAN AIRLINES
OESTERREICHISCHE
LUFTVERKEHRS
AKTIENGESELLSCHAFT
By _________________________________
Name:
Title:
TRAVIDATA INC.
By _________________________________
Name:
Title:
OLYMPIC AIRWAYS S.A.
By _________________________________
Name:
Title:
OLYNET, INC
By _________________________________
Name:
Title:
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33
TRANSPORTES AEREOS
PORTUGUESES S.A.
By _________________________________
Name:
Title:
COPORGA, INC
By _________________________________
Name:
Title:
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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").
