Filed pursuant to Rule 424(b)(3)
Registration No. 333-55144
Prospectus Supplement No. 7 to
Prospectus dated March 19, 2001
5,000,000 TIDES SM
Continental Airlines Finance Trust II
6% Convertible Preferred Securities,
Term Income Deferrable Equity Securities (TIDES)SM*
(liquidation amount $50 per each of the TIDES)
guaranteed by, and convertible into Class B common stock of,
Continental Airlines, Inc.
---------------------------------
The selling holders identified in this prospectus supplement and the
accompanying prospectus may offer, from time to time:
o 6% Convertible Preferred Securities, Term Income Deferrable Equity
Securities (TIDES)SM, or TIDES SM of Continental Airlines Finance Trust II
o 6% Convertible Junior Subordinated Debentures due 2030 of Continental
Airlines, Inc.
o shares of Class B common stock of Continental Airlines, Inc.
Continental Airlines Finance Trust II is a Delaware business trust. The
TIDES represent undivided beneficial ownership interests in the assets of
Continental Airlines Finance Trust II.
The selling holders may sell these securities from time to time
directly to purchasers or through agents, underwriters or dealers. We will not
receive any proceeds from the sale of these securities.
*The terms Term Income Deferrable Equity Securities (TIDES)SM and TIDES
SM are registered service marks of Credit Suisse First Boston Corporation.
---------------------------------
You should carefully consider matters discussed under the caption "Risk
Factors" in the accompanying prospectus beginning on page 7.
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities commission nor has
the Securities and Exchange Commission or any state securities commission passed
upon the accuracy or adequacy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
SELLING HOLDERS
The section in the accompanying prospectus entitled "Selling Holders"
is hereby supplemented to include the following information:
The TIDES were originally issued by the trust and sold by Credit Suisse
First Boston Corporation and UBS Warburg LLC in a transaction exempt from the
registration requirements of the Securities Act, to persons reasonably believed
by such initial purchasers to be "qualified institutional buyers" (as defined in
Rule 144A under the Securities Act). The holders named below and their
transferees, pledgees, donees or successors, which we refer to as the selling
holders, may from time to time offer and sell pursuant to this prospectus
supplement any or all of the TIDES, and any common stock issued upon conversion
of the TIDES.
The following table sets forth information, as of September 5, 2001,
with respect to the selling holders of the TIDES not listed in the accompanying
prospectus and the respective number of TIDES beneficially owned by each selling
holder that the selling holder may offer using this prospectus supplement.
Principal Amount of
TIDES Beneficially Number of Shares of Number of Shares of Common
Owned and Offered by Common Stock Owned Stock Offered
this Prospectus Prior to the Offering by this Prospectus
Selling Holder (1)(2) Supplement (3) Supplement (3)(4)
- ----------------------------------- --------------------- --------------------- --------------------------
Fidelity Financial Trust: Fidelity
Convertible Securities Fund...... 100,000(5) 83,333(5) 83,333
Fidelity Devonshire Trust: Fidelity
Equity Income Fund............... 237,600(5) 198,000(5) 198,000
Fidelity Puritan Trust: Fidelity
Puritan Fund..................... 142,900(5) 119,083(5) 119,083
Variable Insurance Products Fund:
Equity-Income Portfolio.......... 111,200(5) 92,666(5) 92,666
GLG Market Neutral Fund............. 370,000 308,333 308,333
-------- -------- --------
Total.......................... 961,700 801,415 801,415
======== ======== ========
- ------------------
(1) May include transferees, pledgees, donees or successors of or from a
previously named holder.
(2) No holders not named in the accompanying prospectus or any prospectus
supplement thereto, including this prospectus supplement, may offer TIDES
or common stock pursuant to the registration statement of which this
prospectus supplement forms a part until such holder is included as a
selling holder in a supplement to the accompanying prospectus.
(3) Comprises the shares of common stock into which the TIDES held by such
selling holder are convertible at the initial conversion price. The
conversion price and the number of shares of common stock issuable upon
conversion of the TIDES are subject to adjustment under certain
circumstances. Accordingly, the number of shares of common stock issuable
upon conversion of the TIDES may increase or decrease from time to time.
Fractional shares will not be issued upon conversion of the TIDES; rather,
cash will be paid in lieu of fractional shares, if any.
(4) Assumes the offering of such shares by such selling holder pursuant to the
registration statement of which this prospectus supplement forms a part.
(5) Beneficial ownership information is as of July 18, 2001.
None of the selling holders has, or within the past three years has
had, any position, office or other material relationship with the trust or us or
any of its or our predecessors or affiliates.
Because the selling holders may, pursuant to this prospectus supplement
or the accompanying prospectus, offer all or some portion of the TIDES or common
stock they presently hold, no estimate can be given as to the amount of the
TIDES or shares of common stock that will be held by the selling holders upon
termination of any such sales. In addition, some or all of the selling holders
identified above or in the accompanying prospectus may have sold, transferred or
otherwise disposed of all or a portion of their TIDES or common stock since the
date on which they provided the information regarding their TIDES or common
stock, in transactions exempt from the registration requirements of the
Securities Act.
Only selling holders identified above or in the accompanying prospectus
who beneficially own the TIDES or common stock set forth opposite each such
selling holder's name in the foregoing table on or after the effective date of
the registration statement of which this prospectus supplement forms a part may
sell such TIDES or common stock pursuant to the registration statement. We may
from time to time include additional selling holders in further supplements to
the accompanying prospectus.
We will pay the expenses of registering the TIDES and common stock
being offered by this prospectus supplement and the accompanying prospectus.
PLAN OF DISTRIBUTION
With respect to those TIDES and common stock being offered by Fidelity
Financial Trust: Fidelity Convertible Securities Fund, Fidelity Devonshire
Trust: Fidelity Equity-Income Fund, Fidelity Puritan Trust: Fidelity Puritan
Fund and Variable Insurance Products Fund: Equity-Income Portfolio only, the
section in the accompanying prospectus entitled "Plan of Distribution" is hereby
amended in its entirety to read as follows:
The offered securities may be sold from time to time to purchasers
directly by the selling holders or their pledgees, donees, transferees, or any
of their successors in interest selling shares received from a named selling
holder as a gift partnership distribution or other non-sale-related transfer
after the date of this prospectus (all of whom may be selling holders).
Alternatively, the selling holders may from time to time offer the offered
securities to or through underwriters, broker/dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling holders or the purchasers of such offered securities for whom
they may act as agents. The selling holders and any underwriters, broker/dealers
or agents that participate in the distribution of offered securities may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
profit on the sale of such securities by them and any underwriter, broker/dealer
or agent may be deemed to be underwriting discounts and commissions under the
Securities Act.
The offered securities may be sold by the selling holders from time to
time, in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, at varying prices determined at the time of sale or at
negotiated prices. Such prices will be determined by the selling holders. The
sale of the offered securities may be effected any or a combination of the
following transactions (which may involve crosses or block transactions): (1)
transactions on any national securities exchange or quotation service on which
the offered securities may be listed or quoted at the time of sale, (2)
transactions in the over-the-counter market, (3) otherwise than on such
exchanges or in the over-the-counter market (including in privately negotiated
transactions), (4) transactions involving purchases by a broker or dealer as
principal and resale by the broker or dealer for its own account pursuant to
this prospectus, (5) ordinary brokerage transactions and transactions in which
the broker solicits purchases, (6) short sales, (7) through the writing of
options, or (8) through the distribution of the securities by any selling holder
to its partners, members or stockholders.
The selling holders may engage brokers and dealers, and any brokers or
dealers may arrange for other brokers or dealers to participate in effecting
sales of the securities. These brokers, dealers or underwriters may act as
principals or as an agent of a selling holder. Broker-dealers may agree with a
selling holder to sell a specified number of the offered securities at a
stipulated price per security. If the broker-dealer is unable to sell offered
securities acting as agent for a selling holder, it may purchase as principal
any unsold securities at the stipulated price. Broker-dealers who acquire
offered securities as principals may thereafter resell the securities from time
to time in transactions on any national securities exchange or quotation service
on which the offered securities may be listed or quoted at the time of sale, at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. Broker-dealers may use
block transactions amid sales to and through broker-dealers, including
transactions of the nature described above. The selling holders may also sell
the offered securities in accordance with Rule 144 under the Securities Act
rather than pursuant to this prospectus, regardless of whether the securities
are covered by this prospectus.
From time to time, one or more of the selling holders may pledge,
hypothecate or grant a security interest in some or all of the offered
securities owned by them. The pledgees, secured parties or persons to whom the
offered securities have been hypothecated will, upon foreclosure in the event of
default, be deemed to be selling holders. The number of a selling holder's
securities offered under this prospectus will decrease as and when it takes such
actions. The plan of distribution for that selling holder's offered securities
will otherwise remain unchanged.
A selling holder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the
securities in the course of hedging the positions they assume with that selling
holder, including, without limitation, in connection with distributions of the
securities by those broker-dealers. A selling holder may enter into option or
other transactions with broker-dealers that involve the delivery of the offered
securities to the broker-dealers, who may then resell or otherwise transfer
those securities. A selling holder may also loan or pledge the offered
securities to a broker-dealer and the broker-dealer may sell the securities so
loaned or upon a default may sell or otherwise transfer the pledged securities.
At the time a particular offering of the offered securities is made, if
required, a prospectus supplement will be distributed which will set forth the
names of the selling holders, the aggregate amount and type of offered
securities being offered, and, to the extent required, the terms of the
offering, including the name or names of any underwriters, broker/dealers or
agents, any discounts, commissions and other terms constituting compensation
from the selling holders and any discounts, commissions or concessions allowed
or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the offered securities will be offered or sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the offered securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the offered securities may be limited in its
ability to engage in market activities with respect to such securities. In
addition and without limiting the foregoing, each selling holder will be subject
to applicable provisions of the Exchange Act and the rules and regulations
thereunder, which provisions may limit the timing of purchases and sales of any
of the offered securities by the selling holders. All of the foregoing may
affect the marketability of the offered securities.
Pursuant to the registration agreement, we will pay all expenses of the
registration of the offered securities, including, without limitation, SEC
filing fees and expenses of compliance with state securities or "blue sky" laws.
The selling holders will pay any underwriting discounts and selling commissions.
The selling holders will be indemnified by us and the trust, jointly and
severally, against certain civil liabilities, including certain liabilities
under the Securities Act, or will be entitled to contribution in connection
therewith. We and the trust will be indemnified by the selling holders severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
Pursuant to the registration agreement, we are required to use our best
efforts to keep the registration statement, of which this prospectus is a part,
continuously effective for a period of two years from its effective date or such
shorter period that will terminate upon the earlier of the date on which the
offered securities shall have been sold pursuant to the registration statement
or the date on which the offered securities are permitted to be freely sold or
distributed to the public pursuant to any exemption from the registration
requirements of the Securities Act (including in reliance on Rule 144(k) but
excluding in reliance on Rule 144A under the Securities Act). Notwithstanding
these obligations, we may, under certain circumstances, postpone or suspend the
filing or the effectiveness of the registration statement (or any amendments or
supplements thereto) or the sale of offered securities under the registration
statement.
---------------------------------
The date of this prospectus supplement is September 5, 2001.