With effect from February 26, 2024, Jetblue Airways Corporation’s board of directors has decided to designate Steven Miller and Jesse Lynn as observers to the board. The Icahn Designees shall be allowed to attend and reasonably participate in all Board meetings, but not vote, subject to the Company’s authority to restrict access to specific materials and meetings under the terms of the Agreement.
Furthermore, the Board has decided to increase the number of directors on the Board from 11 to 13 as soon as possible after the Company’s 2024 Annual Meeting of Stockholders, creating two vacancies in total. The Icahn Designees will be appointed to these positions as directors of the Company, and their terms will end at the Company’s 2025 Annual Meeting of Stockholders or earlier if they are removed, die, resign, or become disqualified. The Icahn Group has committed, as part of the appointment, to refrain from holding a proxy fight or inviting proxies for any purpose pertaining to the 2024 Annual Meeting, including director elections.
According to The Nasdaq Stock Market LLC’s listing criteria, Mr. Lynn and Mr. Miller are both eligible to serve as independent directors, which is why they were appointed as observers to the board. The Icahn Designees will be entitled to the same compensation as the Company’s other non-employee directors, effective from the date of their appointment as observers to the Board. This compensation is outlined in the Company’s definitive proxy statement for its 2023 Annual Meeting of Shareholders on Schedule 14A, which was filed with the U.S. Securities and Exchange Commission on April 5, 2023.
The Agreement establishes a procedure for the Icahn Group to choose a replacement director or observer who is approved by the Board to be appointed to the Board or to serve as an observer for the balance of the term of such an Icahn Designee in the event that they are unable or for some other reason cease to serve on the Board or as an observer.
In the event that the Icahn Group collectively loses its beneficial ownership of at least 20,356,619 shares of the Company’s common stock, par value of $0.01 per share (subject to adjustment in certain circumstances as outlined in the Agreement), one Icahn Designee (or replacement designee, if applicable) will immediately resign from the Board and any committee of the Board that they are then a member of. The Icahn Group will promptly resign from the Board and any committee on the Board that each Icahn Designee or replacement designee, as applicable, is sitting on if the Icahn Group collectively ceases to beneficially own at least 10,178,309 shares of Common Stock, which number of shares is subject to adjustment in certain circumstances as described in the Agreement. The Icahn Group shall not be entitled to substitute any Icahn Designee in any instance. Furthermore, the Company generally agrees that, for the duration of the applicable term of the Agreement, the Board’s consideration and voting regarding the appointment and employment of the Company’s Chief Executive Officer and Chief Financial Officer, mergers and acquisitions of material assets, dispositions of material assets, and similar extraordinary transactions, will only occur at the full Board level or in committees where an Icahn Designee is a member or observer.
Other standard voting, standstill, and non-disparagement clauses are also included in the agreement. The Icahn Group’s standstill restrictions will remain in place until the later of thirty days before the deadline for stockholders to nominate candidates for the annual meeting following the 2024 Annual Meeting and thirty days after that date, at which point no Icahn Designee will be on the Board and the Icahn Group will no longer be able to designate a replacement, barring an uncured breach of the Agreement by the Company.
Furthermore, the Company shall not adopt a rights plan that would increase the cost to a potential acquirer by triggering a threshold below 15% of the then-outstanding amount of Common Stock through the issuance of new rights, Common Stock, or preferred shares, unless said plan exempts the Icahn Group up to a 15% beneficial ownership as long as the Icahn Group collectively beneficially owns 16,963,849 shares of Common Stock. Except for specific provisions that survive termination in accordance with the terms of the Agreement, the Agreement will terminate at the conclusion of the Standstill Period and have no further force or effect.
The form of the confidentiality agreement, which the Company and the Icahn Group entered into in accordance with the Agreement, is included as Exhibit C to the Agreement and is incorporated herein by reference.
The agreement’s description provided above is not intended to be comprehensive and is qualified in its totality by referring to the agreement’s full text, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.
