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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
Commission File Number 0-23642
NORTHWEST AIRLINES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-4205287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2700 LONE OAK PARKWAY, EAGAN, MINNESOTA 55121
(Address of principal executive offices)
(Zip Code)
(612) 726-2111
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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At September 30, 1997, there were 94,796,153 shares of the registrant's Class A
Common Stock and 1,506,099 shares of the registrant's Class B Common Stock
outstanding.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Northwest Airlines Corporation
Dated: November 14, 1997 By: /s/ Rolf S. Andresen
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Rolf S. Andresen
Vice President - Finance and
Chief Accounting Officer
EXHIBIT INDEX
Exhibit No. Description
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4.1 Amendment to Rights Agreement between Northwest Airlines
Corporation and Norwest Bank Minnesota, N.A., as Rights
Agent dated as of September 29, 1997.
10.1 A319-100 Purchase Agreement between AVSA, S.A.R.L. and
Northwest Airlines Inc. dated as of September 19, 1997.
(The Company has applied to the Commission for confidential
treatment of certain portions of this exhibit.)
10.2 Common Stock Repurchase Agreement between Northwest Airlines
Corporation and Koninklijke Luchtvaart Maatschappij N.V.
dated September 29, 1997.
10.3 Preferred Stock Repurchase Agreement between Northwest
Airlines Corporation and Koninklijke Luchtvaart Maatschappij
N.V. dated September 29, 1997.
10.4 BTNY Preferred Stock Repurchase Agreement between Northwest
Airlines Corporation and Bankers Trust New York Corporation
dated September 29, 1997.
10.5 Blum Preferred Stock Repurchase Agreement between Northwest
Airlines Corporation and Richard C. Blum & Associates - NWA
Partners, L.P. dated September 29, 1997.
10.6 Standstill Agreement between Koninklijke Luchtvaart
Maatschappij N.V. and Northwest Airlines Corporation. dated
September 29, 1997.
10.7 Amendment to Second Amended and Restated Investor
Stockholders' Agreement dated September 29, 1997.
11.1 Computation of Primary Earnings Per Common Share.
11.2 Computation of Fully Diluted Earnings per Common Share.
12.1 Computation of Ratio of Earnings to Fixed Charges.
12.2 Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Requirements.
27.1 Financial Data Schedule.
14
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Exhibit 10.2
COMMON STOCK REPURCHASE AGREEMENT dated as of September 29, 1997
between NORTHWEST AIRLINES CORPORATION, a Delaware corporation ("NWA CORP."),
and KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V., a Netherlands corporation ("KLM").
W I T N E S S E T H :
WHEREAS, on the date hereof, KLM owns 21,684,099 shares (the "CURRENT
SHARES") of NWA Corp.'s Class A Common Stock, par value $.01 per share (the
"CLASS A COMMON STOCK", and together with NWA Corp.'s Class B Common Stock, par
value $.01 per share (the "CLASS B COMMON STOCK"), the "COMMON STOCK"), and in
accordance with the provisions set forth in the Amendment to the Stockholders'
Agreement (as hereinafter defined) will exercise its right to purchase, pursuant
to Section 17 of the Stockholders' Agreement (as hereinafter defined), 3,293,775
additional shares of Class A Common Stock, which will increase to 24,977,874 the
aggregate number of shares of Common Stock owned by KLM; and
WHEREAS, upon the terms and subject to the conditions set forth
herein, KLM wishes to sell to NWA Corp., and NWA Corp. wishes to purchase from
KLM, all 24,977,874 of such Shares according to the schedule set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. Terms not otherwise defined herein shall have the
following meanings:
"AFFILIATE" when used with respect to another Person, means any Person
who is, whether directly or indirectly, through one or more intermediaries,
controlling, controlled by or under common control with such Person.
"AGREEMENT" means this Common Stock Repurchase Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"ALLIANCE IMPLEMENTATION AGREEMENT" means a definitive agreement with
respect to commercial cooperation that is entered into by KLM and Northwest
Airlines, Inc. at the Initial Closing.
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Exhibit 10.3
PREFERRED STOCK REPURCHASE AGREEMENT dated as of September 29, 1997
between NORTHWEST AIRLINES CORPORATION, a Delaware corporation ("NWA CORP."),
and KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V., a Netherlands corporation ("KLM").
W I T N E S S E T H :
WHEREAS, on the date hereof, KLM owns (i) 1,308.8 shares of NWA
Corp.'s Series A Preferred Stock, par value $.01 per share (the "SERIES A
PREFERRED STOCK"), (ii) 436.2 shares of NWA Corp.'s Series B Preferred Stock,
par value $.01 per share (the "SERIES B PREFERRED STOCK"), and (iii) 21,684,099
shares of NWA Corp.'s Class A Common Stock, par value $.01 per share (the "CLASS
A COMMON STOCK", and together with NWA Corp.'s Class B Common Stock, par value
$.01 per share (the "CLASS B COMMON STOCK"), the "COMMON STOCK");
WHEREAS, concurrently with the Initial Closing Date (as defined in the
Common Stock Agreement (as hereinafter defined)), in accordance with the
provisions set forth in the Amendment to the Stockholders' Agreement (as
hereinafter defined), KLM will exercise its right to purchase, and will
purchase, pursuant to Section 17 of the Stockholders' Agreement (as hereinafter
defined), 3,293,775 additional shares of Class A Common Stock in exchange for
818.0003 shares of Series A Preferred Stock and 272.6251 shares of Series B
Preferred Stock, following which purchase KLM will own 490.7997 shares of Series
A Preferred Stock (the "SERIES A PREFERRED SHARES") and 163.5749 shares of
Series B Preferred Stock (the "SERIES B PREFERRED SHARES", together with the
Series A Preferred Shares, the "PREFERRED SHARES"); and
WHEREAS, upon the terms and subject to the conditions set forth
herein, KLM wishes to sell to NWA Corp., and NWA Corp. wishes to purchase from
KLM the Preferred Shares on the Initial Closing Date;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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Exhibit 10.4
BTNY PREFERRED STOCK REPURCHASE AGREEMENT dated as of September 29,
1997 between NORTHWEST AIRLINES CORPORATION, a Delaware corporation ("NWA
CORP."), and BANKERS TRUST NEW YORK CORPORATION, a New York corporation
("BTNY").
W I T N E S S E T H :
WHEREAS, on the date hereof, BTNY owns 999 shares of NWA Corp.'s Class
A Common Stock, par value $.01 per share (the "CLASS A COMMON STOCK"), and
2,635,020 shares of NWA Corp.'s Class B Common Stock, par value $.01 per share
(the "CLASS B COMMON STOCK");
WHEREAS, concurrently with the Initial Closing Date (as defined in the
Common Stock Agreement (as hereinafter defined)), in accordance with the
provisions set forth in the Amendment to the Stockholders' Agreement (as
hereinafter defined), Koninklijke Luchtvaart Maatschappij N.V., a Netherlands
corporation ("KLM"), will exercise its right to purchase, and will purchase,
pursuant to Section 17 of the Stockholders' Agreement (as hereinafter defined)
(x) from Richard C. Blum & Associates - NWA Partners, L.P. ("BLUM"), 658,755
shares of Class A Common Stock in exchange for 163.6001 shares of Series A
Preferred Stock and 54.5250 shares of NWA Corp.'s Series B Preferred Stock, par
value $.01 per share (the "SERIES B PREFERRED STOCK"), and (y) from BTNY,
2,635,020 shares of Class B Common Stock in exchange for 654.4002 shares of
Series A Preferred Stock and 218.1001 shares of Series B Preferred Stock,
following which purchase BTNY will own (i) 999 shares of Class A Common Stock,
(ii) 654.4002 shares of Series A Preferred Stock (the "SERIES A PREFERRED
SHARES") and (iii) 218.1001 shares of Series B Preferred Stock (the "SERIES B
PREFERRED SHARES", together with the Series A Preferred Shares, the "PREFERRED
SHARES"); and
WHEREAS, upon the terms and subject to the conditions set forth
herein, BTNY wishes to sell to NWA Corp., and NWA Corp. wishes to purchase from
BTNY, the Preferred Shares on the Initial Closing Date;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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Exhibit 10.5
BLUM PREFERRED STOCK REPURCHASE AGREEMENT dated as of September 29,
1997 between NORTHWEST AIRLINES CORPORATION, a Delaware corporation ("NWA
CORP."), and RICHARD C. BLUM & ASSOCIATES - NWA PARTNERS, L.P., a California
limited partnership ("BLUM").
W I T N E S S E T H :
WHEREAS, on the date hereof, Blum owns 5,396,643 shares of NWA Corp.'s
Class A Common Stock, par value $.01 per share (the "CLASS A COMMON STOCK"), and
1,727 shares of NWA Corp.'s Series B Preferred Stock, par value $.01 per share
(the "SERIES B PREFERRED STOCK");
WHEREAS, concurrently with the Initial Closing Date (as defined in the
Common Stock Agreement (as hereinafter defined)), in accordance with the
provisions set forth in the Amendment to the Stockholders' Agreement (as
hereinafter defined), Koninklijke Luchtvaart Maatschappij N.V., a Netherlands
corporation ("KLM"), will exercise its right to purchase, and will purchase,
pursuant to Section 17 of the Stockholders' Agreement (as hereinafter defined)
(x) from Blum, 658,755 shares of Class A Common Stock in exchange for 163.6001
shares of NWA Corp.'s Series A Preferred Stock, par value $.01 per share (the
"SERIES A PREFERRED STOCK"), and 54.5250 shares of Series B Preferred Stock and
(y) from Bankers Trust New York Corporation ("BTNY"), 2,635,020 shares of Class
B Common Stock, par value $.01 per share (the "CLASS B COMMON STOCK"), in
exchange for 654.4002 shares of Series A Preferred Stock and 218.1001 shares of
Series B Preferred Stock, following which purchase Blum will own (i) 4,737,888
shares of Class A Common Stock, (ii) 163.6001 shares of Series A Preferred Stock
(the "SERIES A PREFERRED SHARES") and (iii) 1,781.5250 shares of Series B
Preferred Stock (the "SERIES B PREFERRED SHARES", together with the Series A
Preferred Shares, the "PREFERRED SHARES"); and
WHEREAS, upon the terms and subject to the conditions set forth
herein, Blum wishes to sell to NWA Corp., and NWA Corp. wishes to purchase from
Blum, the Preferred Shares on the Initial Closing Date;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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Exhibit 10.6
STANDSTILL AGREEMENT
STANDSTILL AGREEMENT, dated as of September 29, 1997 (this
"AGREEMENT"), between KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V., a Netherlands
corporation ("KLM"), and NORTHWEST AIRLINES CORPORATION, a Delaware corporation
("NWA CORP.").
W I T N E S S E T H :
WHEREAS, on the date hereof, KLM owns 21,684,099 shares of NWA Corp.'s
Class A Common Stock, par value $.01 per share (the "CLASS A COMMON STOCK", and
together with NWA Corp.'s Class B Common Stock, par value $.01 per share (the
"CLASS B COMMON STOCK"), the "NWA CORP. COMMON STOCK"), and in accordance with
the provisions set forth in the Amendment to the Stockholders' Agreement (as
hereinafter defined) will exercise its right to purchase, pursuant to Section 17
of the Stockholders' Agreement (as hereinafter defined), 3,293,775 additional
shares of Class A Common Stock, which will increase to 24,977,874 the aggregate
number of shares of NWA Corp. Common Stock owned by KLM (referred to as KLM's
"EXISTING STAKE");
WHEREAS, upon the terms and subject to the conditions set forth in the
Common Stock Repurchase Agreement, dated as of September 29, 1997 (the "COMMON
STOCK AGREEMENT"), between KLM and NWA Corp., KLM has agreed to sell to NWA
Corp., and NWA Corp. has agreed to purchase from KLM, all 24,977,874 of such
shares comprising the Existing Stake according to the schedule set forth
therein, which, subject to the terms and conditions contained therein, provides
for the purchase and sale of (i) 6,800,000 shares of NWA Corp. Common Stock on
the Initial Closing Date (as defined in the Common Stock Agreement), (ii)
4,900,000 shares of NWA Corp. Common Stock on or about September 29, 1998, (iii)
3,222,539 shares of NWA Corp. on or about September 29, 1999, and (iv)
10,055,335 shares of NWA Corp. Common Stock on or about September 29, 2000;
WHEREAS, upon the terms and subject to the conditions set forth in the
Alliance Implementation Agreement, dated as of September 29, 1997 (the "ALLIANCE
IMPLEMENTATION AGREEMENT"), between KLM and Northwest Airlines, Inc., a
subsidiary of NWA Corp., KLM and Northwest Airlines, Inc. have agreed on the
terms on which their global alliance will be expanded and extended; and
WHEREAS, KLM and NWA Corp. are entering into this Agreement to
establish certain arrangements with respect to the shares of NWA Corp. Common
Stock owned by KLM following the Initial Closing Date, as well as restrictions
on certain activities in respect of each other's capital stock, corporate
governance and other related corporate matters;
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Exhibit 10.7
AMENDMENT TO SECOND AMENDED AND
RESTATED INVESTOR STOCKHOLDERS' AGREEMENT
AMENDMENT, dated as of September 29, 1997 (this "AMENDMENT"), to the
Second Amended and Restated Investor Stockholders' Agreement, dated as of
December 23, 1993 (as such agreement has been amended, supplemented or otherwise
modified from time to time prior to the date hereof, the "STOCKHOLDERS'
AGREEMENT"), by and among Alfred A. Checchi, the A Trust created pursuant to a
trust agreement dated May 23, 1984 with Gary L. Wilson as trustee, the K Trust
created pursuant to a trust agreement dated May 23, 1984 with Gary L. Wilson as
trustee, the Trust created pursuant to a trust agreement dated September 1, 1985
with Gary L. Wilson as trustee (each such trust collectively known as the
"CHECCHI FAMILY TRUSTS"; the Checchi Family Trusts and Alfred A. Checchi
together known as the "CHECCHI FAMILY"); Gary L. Wilson, Derek M. Wilson,
Christopher D. Wilson (together the "WILSON FAMILY"); Frederic V. Malek,
Frederic W. Malek, Michelle A. Malek (together the "MALEK FAMILY"); the Wilson-
Thornhill Foundation created under Trust Agreement dated December 24, 1994;
Bankers Trust New York Corporation ("BTNY"); Koninklijke Luchtvaart Maatschappij
N.V. ("KLM"); Richard C. Blum & Associates - NWA Partners, L.P., formerly known
as Wings Associates, L.P. ("BLUM" and together with each of the foregoing
parties, the "INVESTOR STOCKHOLDERS"); and Northwest Airlines Corporation, a
Delaware corporation (the "COMPANY").
W I T N E S S E T H:
WHEREAS, under Section 17 of the Stockholders' Agreement, KLM was
granted an option to purchase shares of Common Stock (the "KLM OPTION") from
each of Blum, BTNY, the Checchi Family, the Malek Family, Bright Star
Investments Limited and its affiliate Paracor Finance Inc., the permitted
transferees of Wings Acquisition Investor Limited (collectively, "BRIGHT STAR"),
and the Wilson Family, upon the terms and subject to the conditions set forth
therein;
WHEREAS, KLM has previously exercised the KLM Option granted to KLM by
Bright Star in connection with purchasing Bright Star's shares of Common Stock;
WHEREAS, in connection with entering into the Common Stock Repurchase
Agreement, dated as of September 29, 1997 (the "COMMON STOCK AGREEMENT"),
between KLM and the Company, the parties hereto desire (x) to accelerate the
date of the KLM exercise date for the KLM Option granted to KLM by each of Blum
and BTNY under Section 17 of the Stockholders' Agreement and (y) to cancel the
KLM Option granted to KLM by each of the Checchi Family, the Wilson Family and
the Malek Family under Section 17 of the Stockholders' Agreement;
