AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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COACH USA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0496471
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE RIVERWAY -- SUITE 500
HOUSTON, TEXAS 77056
(888) COACH-US
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
RICHARD H. KRISTINIK
CHIEF EXECUTIVE OFFICER
COACH USA, INC.
ONE RIVERWAY--SUITE 500
HOUSTON, TEXAS 77056
(888) COACH-US
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
DAVID P. OELMAN RICHARD C. TILGHMAN, JR.
ANDREWS & KURTH L.L.P. PIPER & MARBURY L.L.P.
600 TRAVIS, SUITE 4200 36 SOUTH CHARLES STREET
HOUSTON, TEXAS 77002 BALTIMORE, MARYLAND 21201
(713) 220-4200 (410) 539-2530
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
As soon as practicable following the effectiveness of this Registration
Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
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REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
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Common Stock, $.01 par value..... $209,587,500 $61,828
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(1) Calculated in accordance with Rule 457(o) under the Securities Act of 1933,
based on the average of the high and low prices of the Common Stock on the
New York Stock Exchange on April 17, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
SUBJECT TO COMPLETION
APRIL 21, 1998
4,000,000 SHARES
[LOGO]
COMMON STOCK
------------------
Of the 4,000,000 shares of Common Stock ("Common Stock") offered hereby,
2,000,000 are being sold by Coach USA, Inc. ("Coach" or the "Company") and
2,000,000 are being sold by certain stockholders of the Company (the "Selling
Stockholders"). See "Principal and Selling Stockholders." The Company will
not receive any of the proceeds from the sale of shares by the Selling
Stockholders. The Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "CUI." On April 20, 1998, the last reported sale
price of the Common Stock was $47.00 per share. See "Price Range of Common
Stock."
------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A SIGNIFICANT DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 7.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PRICE UNDERWRITING PROCEEDS
TO DISCOUNTS AND TO
PUBLIC COMMISSIONS(1) COMPANY(1)
- --------------------------------------------------------------------------------
Per Share... $ $ $
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Total(2).... $ $ $
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PROCEEDS TO
SELLING
STOCKHOLDERS
- ----------------------------------------
Per Share............ $
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Total(2)............. $
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(1) Before deducting estimated expenses of $500,000, all of which will be paid
by the Company.
(2) The Company has granted the Underwriters a 30-day option to purchase up to
600,000 additional shares of Common Stock solely to cover over-allotments,
if any. To the extent that the option is exercised, the Underwriters will
offer the additional shares at the Price to Public shown above. If the
option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."
------------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, subject to the
right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made at the offices
of BT Alex. Brown, Baltimore, Maryland, on or about , 1998.
BT ALEX. BROWN
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NATIONSBANC MONTGOMERY SECURITIES LLC
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"), are incorporated
herein by reference:
(i) the financial statements of Kerrville Bus Company, Inc. contained
in the Company's Current Report on Form 8-K, dated August 8, 1997;
(ii) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997; and
(iii) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A (File No. 1-12939) filed with the
Commission on April 29, 1997 pursuant to Section 12 of the Exchange Act.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this offering of the Offered Shares
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of the documents, including exhibits to such documents incorporated herein by
reference. Requests should be made to: Coach USA, Inc., One Riverway, Suite 500,
Houston, Texas 77056, Attention: Corporate Secretary; telephone 1-888-COACH-US.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including documents incorporated herein by reference,
contains "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended ("Securities Act") and Section 21E of the
Exchange Act. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company, or industry results, to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such risks, uncertainties and other
important factors include, among others: the Company's limited combined
operating history; risks related to the Company's acquisition strategy; capital
availability and risks related to acquisition financing; effects of leverage;
substantial seasonality of the motorcoach business; fuel prices and taxes;
insurance costs and claims; capital requirements; substantial competition; labor
relations; government funded contracts; significant regulation; potential
exposure to environmental liabilities; reliance on key personnel; potential
effect of shares eligible for future sale on the price of Common Stock; and the
anti-takeover effect of certain charter provisions. These forward-looking
statements speak only as of the date of this Prospectus. The Company expressly
disclaims any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE COMMON
STOCK OFFERING AND MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE
OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ
IN CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND THE PRO FORMA FINANCIAL
DATA AND HISTORICAL FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
THE COMPANY
The Company is the largest provider of motorcoach charter, tour and
sightseeing services and one of the largest non-municipal providers of commuter
and transit motorcoach services in the United States. The Company also provides
airport ground transportation, paratransit and other related passenger ground
transportation services. The Company operates in 24 states and Canada and owns
approximately 7,000 motorcoaches, taxicabs, executive sedans and other vehicles
which transported passengers across more than 220 million miles in 1997. The
Company believes that it has one of the most modern fleets in the industry,
having purchased more than half of its vehicles within the last three years. The
charter and tour fleet features luxury, European style motorcoaches with plush
seats, televisions, VCRs and other amenities. The Company's taxicab and
executive sedan services include dispatching and vehicle sales, leasing and
financing for more than 2,500 vehicles owned primarily by independent contractor
drivers.
Coach was founded in September 1995 to create a nationwide provider of
motorcoach and other ground transportation services. Through the end of 1997,
the Company has acquired 48 motorcoach businesses and three taxicab and
executive sedan businesses. Subsequent to year-end and through March 31, 1998,
the Company completed the acquisition of 10 additional motorcoach businesses and
one additional taxicab service business.
The motorcoach industry is highly fragmented, with approximately 5,000
motorcoach operators that collectively generated more than $20 billion in
revenues in 1997. In the United States, the motorcoach industry can be broadly
divided into three types of services: (i) recreation and excursion (charter,
tour and sightseeing); (ii) commuter and transit; and (iii) regularly scheduled
intercity services. The Company operates primarily in the first two categories,
which collectively generated more than $19 billion in revenues in 1997. The
Company believes the taxicab services industry is similarly fragmented and
generated more than $5 billion in revenues in 1997. Coach believes there will be
increasing demand for recreation and excursion services, commuter and transit
motorcoach services and airport related services for a broad range of customers
based on a number of factors, including the growing travel and tourism industry,
privatization and outsourcing by governmental and corporate entities, expanding
metropolitan areas and continued airport congestion.
BUSINESS STRATEGY
The Company's objective is to be the largest provider of regional and local
motorcoach and passenger ground transportation services in the United States.
Management plans to achieve this goal by:
o EXPANDING THROUGH ACQUISITIONS. The Company intends to continue to
pursue an aggressive acquisition strategy to enhance its position
in its current markets and to acquire operations in new markets.
o ACCELERATING INTERNAL GROWTH. The Company believes internal growth
can be accelerated by coordinating its sales and marketing programs
among its operating subsidiaries, pursuing advertising
opportunities, capitalizing on privatization and outsourcing
arrangements and offering a full range of services in each region.
See " -- Recent Developments."
3
<PAGE>
o CAPITALIZING ON ECONOMIES OF SCALE. Since the Company's initial
public offering, its operating costs as a percentage of revenues
have declined by approximately seven percent through cost savings
in such areas as equipment and parts, tires, insurance and
financing. The Company intends to continue to further centralize
administrative functions in order to increase operating
efficiencies. For example, the Company has reduced costs associated
with redundant facilities through the consolidation of operations
in a number of its markets, including Houston, Philadelphia,
Atlantic City and Las Vegas.
RECENT DEVELOPMENTS
ADVERTISING AGREEMENT. In April 1998, the Company entered into an
advertising concession agreement with Transportation Displays Incorporated
("TDI"), an affiliate of Columbia Broadcasting System. Under the agreement,
TDI is responsible for obtaining advertising clients, creating advertising
materials and installing advertisements on vehicles, with the Company receiving
a percentage of the net advertising revenues. The agreement's initial five year
term gives TDI the right to sell, lease and service all advertising space,
displays, signs and other advertising media on the Company's entire fleet. The
Company believes that full and partial "wrapping" of vehicles represents the
greatest advertising opportunity. Vehicle "wrapping" refers to covering a
substantial portion of motorcoaches or vans with advertising.
ACQUISITIONS. In the first quarter of 1998, the Company acquired ten
additional motorcoach businesses and one additional taxicab service business.
Since its initial public offering in May 1996 (the "Initial Public Offering")
and through March 31, 1998, the Company has acquired 58 motorcoach businesses
and four taxicab and executive sedan businesses.
THE OFFERING
<TABLE>
<CAPTION>
<S> <C>
Common Stock offered by the Company............................... 2,000,000 shares
Common Stock offered by the Selling Stockholders.................. 2,000,000 shares
Common Stock to be outstanding after this offering................ 24,763,313 shares(1)
Use of proceeds................................................... Reduction of indebtedness under the
Company's revolving credit facility.
NYSE Symbol....................................................... CUI
</TABLE>
- ------------
(1) Includes (i) 60,000 shares of Common Stock underlying outstanding options,
which will be exercised and sold in this offering and (ii) 612,341 shares of
Common Stock to be issued upon conversion of approximately $21.2 million of
convertible subordinated notes issued in connection with certain
acquisitions (the "Convertible Subordinated Notes"), which shares will
also be sold in this offering. Excludes (i) 3,024,158 shares of Common Stock
issuable upon the exercise of stock options outstanding as of March 31,
1998, of which options to purchase 348,594 shares of Common Stock are
currently exercisable, (ii) 100,000 shares of Common Stock issuable upon the
exercise of warrants outstanding and exercisable as of March 31, 1998 and
(iii) 1,045,835 shares of Common Stock issuable upon the conversion of
approximately $39 million of Convertible Subordinated Notes. See "Risk
Factors -- Potential Effect of Shares Eligible for Future Sale."
4
<PAGE>
SUMMARY PRO FORMA FINANCIAL DATA
Coach acquired, simultaneously with the closing of the Initial Public
Offering, the six founding companies the ("Founding Companies"). During the
remainder of 1996 and through 1997, the Company completed 45 acquisitions, 19 of
which were accounted for as poolings-of-interests (the "Pooled Companies"),
three of which were accounted for as immaterial poolings-of-interests (the
"Immaterial Pooled Companies") and 23 of which were accounted for as purchases
(the "Purchased Companies"). The Pro Forma Statement of Income Data Including
Compensation Differential and Other Adjustments below include historical
financial statement data of the Founding Companies at historical cost, the
Company (including the Pooled Companies) for all periods presented, the
Immaterial Pooled Companies from the beginning of the quarter in which they were
acquired, and the Purchased Companies since the date of their respective
acquisitions. In addition, the data below give effect to (i) certain reductions
in salaries and benefits to the former owners of the Founding Companies and the
Pooled Companies, which were agreed to in connection with the mergers of the
Founding Companies and the acquisition of the Pooled Companies, as well as a
non-recurring, non-cash charge recorded by the Company (collectively, the
"Compensation Differential"); (ii) certain tax adjustments related to the
taxation of certain Founding Companies and Pooled Companies as S Corporations
prior to their acquisition; (iii) the tax impact of the Compensation
Differential in each period; (iv) for 1995 and 1996, the conversion of debt to
equity at one of the Pooled Companies; and (v) the elimination of non-recurring
pooling costs associated with the 1996 and 1997 Pooled Companies. The Pro Forma
for Purchased Companies data below give effect to all items above and to the
acquisitions of the Purchased Companies as if those acquisitions occurred on
January 1, 1996, including the pro forma effect of (i) the Compensation
Differential of the Purchased Companies; (ii) the amortization of goodwill;
(iii) interest expense attributable to Convertible Subordinated Notes issued in
connection with the purchases; (iv) interest expense on the 9 3/8% Senior
Subordinated Notes, due 2007 and related amortization of deferred financing
costs; and (v) income tax adjustments attributable to the above adjustments and
certain preacquisition earnings of the Purchased Companies previously taxed at
rates other than statutory rates.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1993 1994 1995 1996 1997
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
PRO FORMA STATEMENT OF INCOME DATA
INCLUDING COMPENSATION DIFFERENTIAL
AND OTHER ADJUSTMENTS:
Total revenues................... $ 281,872 $ 282,397 $ 316,275 $ 370,781 $ 542,790
Operating expenses............... 226,471 221,839 241,103 281,924 398,945
Gross profit..................... 55,401 60,558 75,172 88,857 143,845
General and administrative
expenses....................... 33,193 37,253 40,527 41,365 62,029
Operating income................. 22,208 23,305 34,645 47,492 81,816
Income before extraordinary
items.......................... 7,108 7,961 13,494 20,461 35,682
Extraordinary items.............. 1,191 -- -- 2,648 (929)
Net income....................... 8,299 7,961 13,494 23,109 34,753
Basic earnings per share:
Income before extraordinary
items..................... 1.13 1.67
Net income.................. 1.27 1.62
Weighted average shares..... 18,152 21,412
Diluted earnings per share:
Income before extraordinary
items..................... 1.12 1.61
Net income.................. 1.26 1.57
Weighted average shares..... 18,543 22,954
PRO FORMA FOR PURCHASED COMPANIES:
Total revenues................... 571,060 615,770
Operating expenses............... 430,978 452,918
Gross profit..................... 140,082 162,852
General and administrative
expenses....................... 71,140 75,641
Operating income................. 68,942 87,211
Income before extraordinary items
(1)............................ 22,679 35,633
</TABLE>
5
<PAGE>
DECEMBER 31, 1997
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ACTUAL AS ADJUSTED(2)
--------- --------------
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital (deficit)........ $ (5,311) $ (5,311)
Total assets..................... 665,870 665,870
Total debt, including current
portion(3)...................... 320,764 230,560
Stockholders' equity............. 160,555 271,924
- ------------
(1) Excludes the effect of this offering, which includes an increase in income
before extraordinary items of approximately $4,351,000, representing the
reduction in interest expense, net of income taxes, incurred on (i) the
portion of the Company's $380 million revolving credit facility (the
"Credit Facility") to be repaid with the net proceeds of this offering and
(ii) $21.2 million of the Convertible Subordinated Notes to be converted
into 612,341 shares of Common Stock and sold in this offering. Weighted
average shares outstanding will be increased by 2,672,341, representing the
2,000,000 shares to be sold by the Company in this offering, the 612,341
shares issued as a result of the conversion of a portion of the Convertible
Subordinated Notes and 60,000 shares attributed to the exercise of options
in connection with this offering. Accordingly, pro forma income per share
before extraordinary items after giving effect to this offering would be
$1.64 per share-basic, and $1.60 per share-diluted, compared to Pro Forma
for Purchased Companies income per share before extraordinary items of $1.64
per share-basic, and $1.57 per share-diluted.
(2) Adjusted to reflect the conversion of $21.2 million of Convertible
Subordinated Notes into 612,341 shares of Common Stock, the issuance of
60,000 shares of Common Stock for $840,000 attributed to the exercise of
options in connection with this offering, the issuance and sale of 2,000,000
shares of Common Stock offered hereby by the Company (at an assumed offering
price of $ 47.00 per share) and application of the estimated net proceeds
therefrom as described in "Use of Proceeds."
(3) Does not include $52.3 million of outstanding Convertible Subordinated Notes
outstanding as of December 31, 1997.
6
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE COMPANY'S COMMON STOCK INVOLVES A SIGNIFICANT DEGREE
OF RISK. PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS,
IN ADDITION TO OTHER INFORMATION INCLUDED IN THIS PROSPECTUS, BEFORE MAKING AN
INVESTMENT IN THE COMMON STOCK.
LIMITED COMBINED OPERATING HISTORY
The Company was founded in September 1995 but conducted no operations and
generated no revenues prior to the closing of the Initial Public Offering. Prior
to their acquisition by the Company, the Founding Companies and all subsequent
acquisitions operated as separate independent entities, and there can be no
assurance that the Company will be able to continue to successfully integrate
the operations of the acquired businesses or institute the necessary
Company-wide systems and procedures to successfully manage the combined
enterprise on a profitable basis. The Company's management team has only worked
together for approximately two years, and there can be no assurance that the
management group will be able to effectively manage acquired operations or
effectively implement the Company's internal growth strategy and acquisition
program over a longer period of time. The historical financial results of the
Company, the Founding Companies and the subsequent acquisitions cover periods
when the Company, the Founding Companies and the subsequent acquisitions were
not under common control or management and, therefore, may not be indicative of
the Company's future financial or operating results. The inability of the
Company to continue to successfully integrate acquired operations would have a
material adverse effect on the Company's business, financial condition and
results of operations and would make it unlikely that the Company's acquisition
program would continue to be successful.
RISKS RELATED TO THE COMPANY'S ACQUISITION STRATEGY
The Company intends to continue to grow primarily through the acquisition
of additional motorcoach and other passenger ground transportation businesses.
Increased competition for acquisition candidates has begun to develop, which may
result in fewer acquisition opportunities available to the Company as well as
higher acquisition prices. There can be no assurance that the Company will be
able to continue to identify, acquire or profitably manage additional businesses
or successfully integrate acquired businesses, if any, into the Company without
substantial costs, delays or other operational or financial problems. Further,
acquisitions involve a number of special risks, including possible adverse
effects on the Company's operating results, diversion of management's attention,
failure to retain key acquired personnel, risks associated with unanticipated
events or liabilities and amortization of acquired intangible assets, some or
all of which could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, there can be no
assurance that businesses acquired in the future will achieve anticipated
revenues and earnings.
CAPITAL AVAILABILITY; RISKS RELATED TO ACQUISITION FINANCING
The Company expects to finance future acquisitions primarily through
borrowings under its Credit Facility or other debt instruments and, to a lesser
extent, by issuing shares of its Common Stock for all or a portion of the
consideration to be paid. The Company's Credit Facility provides for aggregate
credit capacity of $380 million and contains various restrictive covenants which
could limit the Company's ability to borrow. There can be no assurance that the
Company will be able to obtain all of the financing it will need in the future
on terms the Company deems acceptable. In addition, in the event that the Common
Stock does not maintain a sufficient market value, or potential acquisition
candidates are otherwise unwilling to accept Common Stock as part of the
consideration for the sale of their businesses, the Company's ability to issue
Common Stock as acquisition consideration may be limited.
7
<PAGE>
EFFECTS OF LEVERAGE
The Company is highly leveraged. See "Capitalization." The Company's
ability to make scheduled payments of principal of, or to pay the interest on,
or to refinance, its indebtedness or to fund planned capital expenditures or
future acquisitions will depend on its future performance, which, to a certain
extent, is subject to general economic, financial, competitive, legislative,
regulatory and other factors that are beyond its control. There can be no
assurance that the Company's business will generate sufficient cash flow from
operations or that anticipated revenue growth and operating improvements will be
realized or that future borrowings will be available under the Credit Facility
in amounts sufficient to enable the Company to service its indebtedness, make
anticipated capital expenditures or fund future acquisitions. In addition, there
can be no assurance that the Company will be able to effect any refinancing on
commercially reasonable terms or at all.
SUBSTANTIAL SEASONALITY OF THE MOTORCOACH BUSINESS
The motorcoach business is subject to seasonal variations in operations.
During the winter months, operating costs are higher due to the cold weather,
and demand for motorcoach services is lower, particularly because of a decline
in tourism. As a result, the Company's revenues and results of operations are
lower in the first and fourth quarters than in the second and third quarters of
each year.
FUEL PRICES AND TAXES
Fuel is a significant operating expense of the Company. Fuel prices are
subject to sudden increases as a result of variations in supply levels demand.
While the Company attempts to hedge against such fluctuations, any sustained
increase in fuel prices could adversely affect the Company's results of
operations unless it were able to increase prices. From time to time, there are
efforts at the Federal or state level to increase fuel or highway use taxes,
which, if enacted, also could adversely affect the Company's results of
operations.
INSURANCE COSTS; CLAIMS
The Company's cost of maintaining personal injury, property damage and
workers' compensation insurance is significant. The Company could experience
higher insurance premiums as a result of adverse claims experience or general
increases in premiums by insurance carriers for reasons unrelated to the
Company's own claims experience. As an operator of motorcoaches and other
vehicles, the Company is exposed to claims for personal injury or death and
property damage as a result of accidents. The Company is self-insured for the
first $100,000 of losses per incident involving a motorcoach and is self-insured
for the first $250,000 of losses per incident involving a taxicab. If the
Company were to experience a significant increase in the number of claims for
which it is self-insured or claims in excess of its insurance limits, its
results of operations and financial condition would be adversely affected.
CAPITAL REQUIREMENTS
The Company's operations require significant capital in order to maintain a
modern fleet of motorcoaches and to achieve internal growth. The Company has
historically financed the acquisition of new motorcoaches with debt financing. A
new motorcoach costs more than $300,000, and there can be no assurance that
adequate financing will be available in the future on terms favorable to the
Company to enable the Company to efficiently maintain operations and implement
any expansion of service through a larger fleet. In addition, as motorcoaches
age, they require increasing amounts of maintenance and, therefore, are more
expensive to operate. The Company's inability to obtain, or a material delay in
obtaining, the financing necessary to acquire replacement motorcoaches as needed
would have an adverse effect on the Company's results of operations due to
higher operating costs associated with operating an aging fleet.
8
<PAGE>
SUBSTANTIAL COMPETITION
The motorcoach and ground transportation industry is highly competitive,
fragmented and subject to rapid change, particularly with regard to recreational
and excursion services and commuter and transit services. There are other
companies that provide these services, a number of which are as large or larger
than the Company on a regional basis, and many other smaller companies which
focus on local or regional markets. Many of the larger competitors operate in
several of the Company's existing or target markets, and others may choose to
enter those markets in the future. As a result of these factors, the Company may
lose customers or have difficulty in acquiring new customers. In addition, most
commuter and transit contracts are awarded in a competitive bid process, and
there can be no assurance that the Company will be awarded any additional
contracts or that any existing contracts will be renewed.
LABOR RELATIONS
As of December 31, 1997, the Company had approximately 10,600 employees, of
whom approximately 6,700 were motorcoach drivers and approximately 1,500 were
maintenance personnel. Approximately 3,300 of the Company's motorcoach drivers
and maintenance personnel are members of various labor unions. The Company's
inability to negotiate acceptable contracts with its existing union employees as
existing agreements expire could result in strikes by the affected workers and
increased operating costs as a result of higher wages or benefits paid to union
members. If a significant number of non-unionized employees were to seek to
become unionized, the Company could experience a significant disruption of its
operations and higher ongoing labor costs, which could have a material adverse
effect on the Company's business and results of operations.
GOVERNMENT FUNDED CONTRACTS
Payments to the Company under a number of its commuter and transit
contracts are funded through Federal or state subsidy programs, and without
these subsidies, the state or local transit authority may be unwilling to
continue these contracts, which would result in lost revenues to the Company. In
addition, many of the motorcoaches provided at nominal rent to the Company under
these contracts are purchased with funds provided by Federal programs. If
funding for these Federal programs were curtailed, the Company would be required
to operate existing motorcoaches longer than economically practicable or be
forced to acquire replacement equipment.
SIGNIFICANT REGULATION
As a result of the enactment of the ICC Termination Act of 1995, interstate
motorcoach operations previously regulated by the Interstate Commerce Commission
became subject, as of January 1, 1996, to regulatory requirements administered
by the Federal Highway Administration (the "FHWA") and the Surface
Transportation Board (the "STB"), both units of the United States Department
of Transportation. Motorcoach operators subject to FHWA are required to be
registered with the FHWA and to maintain minimum amounts of insurance. The STB
must exempt or approve any consolidation or merger of two or more regulated
interstate motorcoach operators or the acquisition of one such operator by
another and has the authority to consider the antitrust implications of any
proposed acquisition. The STB exempted from regulatory approval requirements
each of the acquisition transactions involving federally-regulated interstate
motorcoach operators entered into by the Company through September 1997 under
the previously used exemption process. In November 1997, at the suggestion of
the STB, the Company shifted from the exemption process to an approval process.
The Company has received approval for acquisition transactions through November
1997. The Company currently has twelve acquisitions awaiting approval by the
STB, and all future acquisitions of other regulated interstate motorcoach
operators must be individually approved by the STB. There can be no assurance
that
9
<PAGE>
the Company will be able to obtain any such approvals or that the STB will not
materially delay any proposed acquisition. Motorcoach operators are also subject
to extensive safety requirements and requirements imposed by environmental laws,
workplace safety and anti-discrimination laws, including the Americans with
Disabilities Act ("ADA"). Safety, environmental and vehicle accessibility
requirements for motorcoach operators have increased in recent years, and this
trend could continue. In March 1998, the U.S. Department of Transportation
proposed additional rules governing compliance by motorcoach operators with the
ADA, which, if adopted, may result in additional costs to the Company. The FHWA
and state regulatory agencies have broad power to suspend, amend or revoke the
Company's operating authorizations for failure to comply with statutory
requirements, including safety and insurance requirements. Many states require
motorcoach operators to obtain authority to operate over certain specified
intrastate routes, and, in some instances, such authority cannot be obtained if
another operator already has obtained authority to operate on that route. As a
result, there may be regulatory constraints on the expansion of the Company's
operations in these states. Furthermore, the Company currently has a competitive
advantage with respect to certain of its existing route authorities as a result
of this regulatory posture. Therefore, if New Jersey or another highly regulated
state in which the Company has operations were to reduce the level of
regulation, the Company's competitive advantage arising from such regulation
could be lost. Similarly, the Company's taxicab service operations are regulated
primarily at the local municipality level. Local taxicab service regulations
focus on the entry of new operators into the marketplace and the aggregate
number of vehicles granted authority to operate, as well as the fares that can
be charged for providing transportation services via taxicabs. These regulations
may limit the Company's ability to expand the size of its taxicab fleet or
prevent fares from increasing in response to rising operating costs.
POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES
The Company's operations are subject to various environmental laws and
regulations, including those dealing with air emissions, water discharges and
the storage, handling and disposal of petroleum and hazardous substances. The
motorcoach and ground transportation services industry may in the future become
subject to stricter regulations. There have been spills and releases of
hazardous substances, including petroleum and petroleum related products, at
several of the Company's operating facilities in the past. As a result of past
and future operations at these facilities, the Company may be required to incur
remediation costs and may be subject to penalties. In addition, although the
Company intends to conduct appropriate environmental due diligence in connection
with future acquisitions, there can be no assurance that the Company will be
able to identify or be indemnified for all potential environmental liabilities
relating to any acquired business.
RELIANCE ON KEY PERSONNEL
The Company's continued success depends on the efforts of its executive
officers and the senior management of the operating subsidiaries. Furthermore,
the Company will likely be dependent on the senior management of any businesses
acquired in the future. If any of these persons becomes unable to continue in
his or her present role, or if the Company is unable to attract and retain other
qualified employees, the Company's business or prospects could be adversely
affected. Although the Company or an operating subsidiary has entered into an
employment agreement with each of the Company's executive officers and key
managers, there can be no assurance that any individual will continue in his or
her present capacity with the Company or operating subsidiary for any particular
period of time.
POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE
The market price of the Common Stock may be adversely affected by the sale,
or availability for sale, of substantial amounts of the Common Stock in the
public market. After giving effect to this offering, the Company expects to have
approximately 24.8 million shares of Common Stock
10
<PAGE>
outstanding. Of these shares, approximately 17.8 million are freely tradeable.
The majority of the remaining 6.9 million shares are eligible for resale
pursuant to Rule 144 and Rule 145 of the Securities Act and are owned by the
Company's officers, directors and former owners of acquired businesses. The
Company, its executive officers, its directors, and the Selling Stockholders,
holding in the aggregate approximately 2.4 million shares of Common Stock
following completion of this offering, have agreed that until 180 days after the
date of this Prospectus, they will not, without the prior written consent of BT
Alex. Brown Incorporated, directly or indirectly offer, sell or otherwise
dispose of any shares of Common Stock, any shares of Common Stock issuable upon
exercise of options, rights or warrants or any securities convertible into
Common Stock. See "Underwriting."
ANTI-TAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS
The Board of Directors of the Company is empowered to issue preferred stock
in one or more series without stockholder action. The existence of this
"blank-check" preferred stock could render more difficult or discourage an
attempt to obtain control of the Company by means of a tender offer, merger,
proxy contest or otherwise. In addition, the Company's Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation") provides for
a classified Board of Directors, which may also have the effect of inhibiting or
delaying a change in control of the Company. Certain provisions of the Delaware
General Corporation Law may also discourage takeover attempts that have not been
approved by the Board of Directors.
11
<PAGE>
BUSINESS
INTRODUCTION
The Company is the largest provider of motorcoach charter, tour and
sightseeing services and one of the largest non-municipal providers of commuter
and transit motorcoach services in the United States. The Company also provides
airport ground transportation, paratransit and other related passenger ground
transportation services. The Company operates in 24 states and Canada and owns
approximately 7,000 motorcoaches, taxicabs, executive sedans and other vehicles
which transported passengers across more than 220 million miles in 1997. The
Company believes that it has one of the most modern fleets in the industry,
having purchased more than half of its vehicles within the last three years. The
charter and tour fleet features luxury, European style motorcoaches with plush
seats, televisions, VCRs and other amenities. The Company's taxicab and
executive sedan services include dispatching and vehicle sales, leasing and
financing for more than 2,500 vehicles owned primarily by independent contractor
drivers.
Coach was founded in September 1995 to create a nationwide provider of
motorcoach and other ground transportation services. Through the end of 1997,
the Company has acquired 48 motorcoach businesses and three taxicab and
executive sedan businesses. Subsequent to year-end and through March 31, 1998,
the Company completed the acquisition of 10 additional motorcoach businesses and
one additional taxicab service business.
The motorcoach industry is highly fragmented, with approximately 5,000
motorcoach operators that collectively generated more than $20 billion in
revenues in 1997. In the United States the motorcoach industry can be broadly
divided into three types of services: (i) recreation and excursion (charter,
tour and sightseeing); (ii) commuter and transit; and (iii) regularly scheduled
intercity services. The Company operates primarily in the first two categories,
which collectively generated more than $19 billion in revenues in 1997. The
Company believes the taxicab services industry is similarly fragmented and
generated more than $5 billion in revenues in 1997. Coach believes there will be
increasing demand for recreation and excursion services, commuter and transit
motorcoach services and airport related services for a broad range of customers
based on a number of factors, including the growing travel and tourism industry,
privatization and outsourcing by governmental and corporate entities, expanding
metropolitan areas and continued airport congestion.
BUSINESS STRATEGY
The Company's objective is to be the largest provider of regional and local
motorcoach and passenger ground transportation services in the United States.
Management plans to achieve this goal by:
EXPANDING THROUGH ACQUISITIONS. The Company intends to continue to pursue
an aggressive acquisition strategy by:
ENTERING NEW GEOGRAPHIC MARKETS. The Company intends to expand into
geographic markets it does not currently serve by acquiring
well-established motorcoach and other passenger ground transportation
service providers that are leaders in their regional markets.
EXPANDING EXISTING MARKETS. The Company also plans to acquire
additional motorcoach and other passenger ground transportation service
providers in many of the markets in which it operates, including
acquisitions that either broaden the range of services provided by the
Company in that market or expand the geographic scope of the Company's
operations in that market, as well as tuck-in acquisitions of smaller
operations. The Company believes that tuck-in acquisitions increase
operating efficiencies without a proportionate increase in administrative
costs and, in some instances, broaden the Company's range of services.
12
<PAGE>
ACCELERATING INTERNAL GROWTH. The Company believes internal growth can be
accelerated by:
COORDINATING SALES AND MARKETING PROGRAMS. The Company has begun to
establish a focused effort to coordinate, when appropriate, sales and
marketing programs among its operating subsidiaries as a means to expand
their recreational and excursion business. The operating subsidiaries will
continue to target travel and tour companies, national and international
travel agencies and convention organizers, as well as organizations such as
AAA, AARP and professional and amateur athletic teams, in order to expand
services to larger users of their services. Over the past two years, the
Company has devoted significant time and effort to develop recognition of
the COACH USA name nationally by uniformly presenting the Company's name
and logo on all newly acquired vehicles. In addition, the Company has
provided transportation services to a number of major sporting events,
including the Super Bowl and Rose Bowl, providing significant national
exposure to the COACH USA name.
PURSUING ADVERTISING OPPORTUNITIES. The Company has recently entered
into an agreement with TDI, under which TDI is responsible for obtaining
advertising clients, creating advertising materials and installing
advertisements on vehicles, with the Company receiving a percentage of net
advertising revenues. The Company intends to pursue this and other
advertising opportunities in the future.
CAPITALIZING ON PRIVATIZATION AND OUTSOURCING. The Company believes
that the trend toward privatization and outsourcing will accelerate, as
more transit authorities, colleges and other institutions, and businesses
such as hotels, casinos, and rental car agencies that operate their own
fleets decide to privatize or outsource non-core operations. In 1997, the
Company entered into a multi-year privatization contract for transit
services with the City of Seattle which is expected to generate up to $32
million in revenues over the five-year life of the contract, and a
multi-year privatization contract for transit services with the City of Los
Angeles which is expected to generate up to $44 million in revenues over
the five-year life of the contract. Also in 1997, the Company entered into
agreements to provide shuttle services to employees of Continental Airlines
at its Newark airport hub and to passengers of Norwegian Cruise Lines in
Miami.
OFFERING A FULL RANGE OF SERVICES IN EACH REGION. The Company intends
to accelerate growth in each of its regions by adding complementary
services, as appropriate, including motorcoach charter, tour and
sightseeing, commuter and transit, airport ground transportation,
paratransit and taxicab services. Many of the acquired companies do not
offer all of such services, and the Company believes they will benefit from
the expertise of affiliated operations.
CAPITALIZING ON ECONOMIES OF SCALE. The Company intends to continue to
capitalize on economies of scale by:
CENTRALIZING ADMINISTRATIVE FUNCTIONS. The Company believes that it
will continue to have greater purchasing power, resulting in further cost
savings in such areas as equipment and parts, tires, insurance and
financing. The Company has begun to realize cost savings through the
consolidation of administrative functions such as employee benefits, safety
and maintenance programs and risk management.
INCREASING OPERATING EFFICIENCIES. The Company has begun to
consolidate certain operations and eliminate redundant facilities and
redeploy equipment through coordination among the various operating
subsidiaries. For example, the Company has consolidated operations in a
number of its markets, including Houston, Philadelphia, Atlantic City and
Las Vegas. The Company believes that there will continue to be
opportunities to eliminate redundant facilities as well as to redeploy
equipment. Additionally, the Company expects to
13
<PAGE>
continue to benefit from cross-marketing and increased equipment
utilization that has occurred among the various operating locations of the
Company.
INDUSTRY OVERVIEW
The motorcoach industry is highly fragmented with approximately 5,000
motorcoach operators which collectively generated more than $20 billion in
revenues in 1997. The motorcoach industry in the United States can be broadly
divided into three types of services: (i) recreation and excursion (charter,
tour and sightseeing); (ii) commuter and transit; and (iii) regularly scheduled
intercity services. The Company operates primarily in the first two categories,
which collectively generated more than $19 billion in revenues in 1997. The
Company believes the taxicab services industry is similarly fragmented and
generated more than $5 billion in revenues in 1997.
The Company believes that there will be increasing demand for recreation
and excursion services, commuter and transit motorcoach services and airport
related services for a broad range of customers based on a number of factors,
including:
GROWING TRAVEL AND TOURISM INDUSTRY. Travel and tourism continues to grow
in North America. Nationwide charter users include such large organizations as
AAA, AARP and convention organizers, whose members are potential users of
motorcoach services. As the population of the United States continues to age,
the Company believes more people will find motorcoach touring an attractive, low
cost alternative to travel by automobile. In addition, the Company has targeted
the increasing number of foreign tourists traveling in the United States who
view motorcoach touring as a desirable method of travel.
PRIVATIZATION. The Company expects state and local governments to
accelerate their efforts to privatize capital intensive operations, such as
commuter and transit services, and ancillary services, such as paratransit
services required under the ADA. The Company believes that this acceleration
will result primarily from a decrease in federal funds available to subsidize
operations and the increasing capital cost of acquiring equipment.
OUTSOURCING. Many hotels, casinos, rental car companies, colleges and
other institutions operate large motorcoach fleets and other high occupancy
vehicles. These entities are increasingly seeking to outsource these non-core
activities as a means to better manage their capital and operating resources and
to improve their profits.
EXPANDING METROPOLITAN AREAS. Metropolitan areas are continuing to expand
geographically and in population. As a result, state and local governments face
increasing automobile traffic congestion, deteriorating infrastructures and a
continuing migration of offices and commuters to suburban locations. These
trends should increase the Company's opportunities to provide motorcoach
commuter and transit services. The Company believes that the fuel and emissions
efficiency, flexibility and low capital cost of motorcoaches and other high
occupancy vehicles will make them increasingly viable alternatives to the high
cost of widening existing roads or establishing or expanding other transit and
commuter systems, such as subways and commuter trains.
INCREASING AIRPORT CONGESTION. The number of passengers served by the
current United States airport system is estimated to increase by as much as 25%
over the next five years. Currently, there is no coordinated effort to provide
seamless transportation between planes and motorcoaches or other modes of ground
transportation, and many passengers continue to use private automobiles for
local or regional travel to and from airports. The Company believes that
motorcoaches, vans and other high occupancy vehicles can alleviate airport
congestion and address the shortage of convenient parking at many airports. In
addition, taxicab and executive sedan services are an integral part of passenger
ground transportation to and from most major airports.
14
<PAGE>
ACQUISITION STRATEGY
The Company believes that there are many attractive acquisition candidates
in the motorcoach and passenger ground transportation services industry because
of the highly fragmented nature of the industry, industry participants' need for
capital and their owners' desire for liquidity. The Company will continue to
pursue an aggressive acquisition program to consolidate and enhance its position
in its current markets and to acquire operations in new markets.
The Company believes that it can continue to successfully implement its
acquisition program due to: (i) its strategy for creating a national company,
which should enhance an acquired company's ability to compete in its local and
regional market through an expansion of offered services, improved equipment
utilization and lower operating costs; (ii) the additional capital available for
new equipment; (iii) the potential for increased profitability as a result of
the Company's centralization of certain administrative functions, greater
purchasing power and economies of scale; (iv) its financial strength and
visibility as a public company; and (v) its decentralized management strategy,
which should, in most cases, enable an acquired company's management to remain
involved in the operation of the company.
SERVICES PROVIDED
The type and level of services provided by the Company vary by market
served. The Company provides motorcoach and high occupancy vehicle (i.e.
shuttles, vans and minibuses) services on both a contracted and per seat basis.
The Company's taxicab and executive sedan service revenues are derived primarily
from services provided to independent contractors that own or lease and operate
vehicles under one of the Company's trade names.
MOTORCOACH SERVICES
The Company's motorcoaches are either owned by the Company or leased under
long-term leases, pursuant to which the Company is responsible for all
maintenance, insurance and upkeep. Certain transit privatization contracts
provide equipment and insurance to the Company.
RECREATION AND EXCURSION
CHARTER AND TOUR. The Company offers both daily and long-term charter and
tour arrangements (as long as 30 days) with various levels of luxury and price.
The Company has arrangements with tour agencies to provide various levels of
service and equipment for agent-sponsored and organized tours. In some
instances, the Company organizes its own tours and markets them on a per
passenger basis.
SIGHTSEEING. Per seat sightseeing services are provided on a scheduled
basis at an advertised or published price. The Company uses a network of hotel
lobby ticket counters, hotel concierges and travel agents to sell the Company's
sightseeing tours.
AIRPORT SERVICE. The Company picks up passengers at airports in various
cities and transports them to and from their hotel, casino, cruise ship or
convention site, using motorcoaches and other high occupancy vehicles. Taxicab
and executive sedan service operations are an integral part of the passenger
ground transportation services to and from the airports as well.
SPECIALIZED DESTINATION ROUTE. The Company provides specialized
destination route services, including daily scheduled service to casinos in
Connecticut, Illinois, New Jersey, Louisiana, Mississippi, Nevada and Colorado.
Tickets are sold through agents and at specified locations.
COMMUTER AND TRANSIT SERVICES
COMMUTER SERVICES. In most of its commuter services, the Company has fixed
routes serviced on a daily basis. Most of these routes are owned (as a result of
having received Federal or state regular route authority) by the individual
operating subsidiaries. Many of the Company's
15
<PAGE>
motorcoaches that are dedicated to commuter service are owned by a state or
municipal transit authority and provided to the Company at nominal rent or given
by such authority to the Company to service a particular route. Contracts with
transit authorities for this service typically have one to three year terms and
are periodically reviewed for rate and fare increases.
PRIVATIZATION TRANSIT CONTRACTS. In privatization transit contracts, the
Company has a contract with a transit authority for fixed routes on a daily
basis, with the schedule established by the transit authority. The Company
operates dedicated equipment owned by the Company or by the transit authority.
Contracts for this service range from three to five years and are periodically
reviewed for rate increases.
OUTSOURCING CONTRACTS. The Company has agreements with various
corporations, institutions and government entities to provide motorcoaches,
drivers and equipment for their employees and customers. The Company contracts
with the customer to provide the schedule of service required by the customer.
PARATRANSIT SERVICES. The Company has contracts with agencies of various
counties that are responsible for coordinating the non-emergency transportation
of medical aid patients. These contracts are generally on a multi-year basis and
require the Company to meet certain performance standards. Taxicab and executive
sedan service operations are an integral part of paratransit services as well.
TAXICAB SERVICES
Most of the Company's taxicabs and executive sedans are owned by
independent contractor drivers, with the remainder being owned by the Company
and leased on a daily or weekly basis to independent contractor drivers. None of
the taxicab drivers are employees of the Company. In addition to the daily or
weekly fee paid by the drivers to the Company for dispatching and other support
services, the Company derives revenues through vehicle sales and financing
services to drivers, maintenance, parts and labor provided to drivers' vehicles
and vehicle mini-billboard advertising.
USE OF PROCEEDS
The net proceeds to the Company from its sale of 2,000,000 shares of Common
Stock in this offering are estimated to be approximately $89.4 million ($116.3
million if the Underwriters' over-allotment option is exercised in full) after
deducting underwriting discounts and commissions and offering expenses (assuming
an offering price of $47.00 per share). The Company intends to use substantially
all of these net proceeds to reduce amounts outstanding under the Credit
Facility. After giving effect to the reduction in amounts outstanding under the
Credit Facility, the Company expects to have approximately $213.0 million of
available borrowing capacity. Indebtedness under the Credit Facility, which
matures in August 1999, had a weighted average interest rate of 6.93% per annum
as of March 31, 1998.
The Company will not receive any of the proceeds from sale of Common Stock
offered by the Selling Stockholders.
16
<PAGE>
CAPITALIZATION
The following table sets forth the current maturities of long-term
obligations and the total capitalization of the Company at December 31, 1997 and
as adjusted to give effect to the sale by the Company of the 2,000,000 shares of
Common Stock offered by it hereby and application of the net proceeds therefrom
(assuming an offering price of $47.00 per share), after deducting underwriting
discounts and commissions and estimated offering expenses.
ACTUAL AS ADJUSTED(1)
----------- --------------
Current maturities of long-term
obligations........................ $ 12,012 $ 12,012
=========== ==============
Long-term obligations:
Credit Facility................. $ 109,723 $ 19,519
Capital lease obligations and
other
senior indebtedness.......... 49,029 49,029
9 3/8% Senior Subordinated
Notes, due 2007.............. 150,000 150,000
Convertible Subordinated
Notes(2)..................... 52,300 31,135
----------- --------------
Total long-term
obligations............. 361,052 249,683
Stockholders' equity:
Preferred Stock: $0.01 par
value, 500,000 shares
authorized; 1 share
outstanding, actual and as
adjusted..................... -- --
Common Stock: $0.01 par value,
100,000,000 shares
authorized; 21,817,918 shares
outstanding, actual and
24,490,259 shares
outstanding, as adjusted..... 218 245
Additional paid-in capital...... 121,534 232,876
Cumulative translation
adjustment................... (479) (479)
Retained earnings............... 39,282 39,282
----------- --------------
Total stockholders'
equity.................. 160,555 271,924
----------- --------------
Total capitalization...... $ 521,607 $521,607
=========== ==============
- ------------
(1) Adjusted to reflect the issuance and sale of 2,000,000 shares of Common
Stock offered by the Company (at an assumed offering price of $47.00 per
share) and the application of the estimated net proceeds as described in
"Use of Proceeds," and the issuance of 60,000 shares of Common Stock for
$840,000 attributed to the exercise of options in connection with this
offering.
(2) In connection with this offering, approximately $21.2 million of these notes
will be converted into 612,341 shares of Common Stock, all of which will be
sold in this offering.
17
<PAGE>
PRICE RANGE OF COMMON STOCK
The Common Stock was traded on the Nasdaq National Market from May 14,
1996, the date of the Initial Public Offering, until May 7, 1997. Since May 8,
1997, the Common Stock has traded on the NYSE. The following table sets forth
the high and low last sale prices for the Common Stock as reported by Nasdaq for
the period from May 14, 1996 through May 7, 1997 and by the NYSE for the period
from May 8, 1997 through April 20, 1998.
HIGH LOW
---- ---------
1996
Second quarter (from May 14).... $22 3/4 $ 17 5/8
Third quarter................... 27 1/2 18
Fourth Quarter.................. 32 25
1997
First quarter................... 34 1/4 28
Second quarter.................. 30 1/4 25 1/4
Third quarter................... 30 5/16 24 15/16
Fourth quarter.................. 35 27
1998
First quarter................... 46 7/16 28 15/16
Second quarter (through April
20, 1998).................... 47 43 7/8
At March 31, 1998, there were approximately 219 stockholders of record of
the Company's Common Stock.
DIVIDEND POLICY
The Company intends to retain all of its earnings, if any, to finance the
expansion of its business and for general corporate purposes, including future
acquisitions, and does not anticipate paying any cash dividends on its Common
Stock for the foreseeable future. In addition, the Company's Credit Facility and
the Company's 9 3/8% Senior Subordinated Notes, due 2007 include, and any
additional lines of credit established in the future may include, restrictions
on the ability of the Company to pay dividends without the consent of the
lender.
18
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information as of April 8, 1998
regarding the beneficial ownership of the Common Stock of the Company by (i)
each person known to beneficially own more than 5% of the outstanding shares of
Common Stock; (ii) each of the Company's directors; (iii) each of the Company's
five most highly compensated executive officers; (iv) all executive officers and
directors as a group; and (v) each of the Selling Stockholders. All persons
listed have an address in care of the Company's principal executive offices and
have sole voting and investment power with respect to their shares unless
otherwise indicated.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE OWNED AFTER
OFFERING NUMBER OF OFFERING
------------------------ SHARES ----------------------
STOCKHOLDER NUMBER PERCENT BEING OFFERED NUMBER PERCENT
- ------------------------------------- ------------ -------- -------------- --------- --------
<S> <C> <C> <C> <C>
Richard H. Kristinik(1).............. 280,100 1.3% 60,000 220,100 *
John Mercadante, Jr.(2).............. 392,425 1.8 117,718 274,707 1.1%
Douglas M. Cerny(3).................. 129,000 * 35,000 94,000 *
Frank P. Gallagher(4)................ 199,810 * 62,550 137,260 *
Lawrence K. King(3).................. 154,000 * 38,500 115,500 *
Gerald Mercadante(5)................. 884,000 4.0 265,200 618,800 2.5
Charles D. Busskohl(6)............... 363,141 1.6 153,054 210,087 *
Steven S. Harter(7).................. 353,095 1.6 33,714 319,381 1.3
William J. Lynch(8).................. 40,468 * -- 40,468 *
Paul M. Verrochi(9).................. 55,000 * -- 55,000 *
T. Rowe Price Associates, Inc.(10)... 1,398,800 6.3 -- 1,398,800 5.6
George Kamins........................ 627,226 2.8 377,226 250,000 1.0
Joseph Chernow....................... 64,787 * 34,787 30,000 *
Fred Kaiser(11)...................... 123,610 * 123,610 -- *
Suzan Kaiser(11)..................... 76,923 * 76,923 -- *
Scott Keller(11)..................... 195,759 * 195,759 -- *
Jesse P. Gaddis(11).................. 102,128 * 102,128 -- *
Capitani-Gerace Group(11)(12)........ 172,873 * 86,437 86,436 *
Schmidt Group(11)(13)................ 54,969 * 27,484 27,485 *
Lisa Gallagher....................... 13,039 * 6,519 6,520 *
Alice Gallagher...................... 116,010 * 50,000 66,010 *
John Gallagher....................... 116,010 * 50,000 66,010 *
Brian R. Worthen..................... 9,791 * 5,791 4,000 *
Greg Worthen......................... 9,791 * 1,600 8,191 *
H. Wayne and Sandra Worthen.......... 65,768 * 25,000 40,768 *
Martin Zilber........................ 51,095 * 35,000 16,095 *
Sigmund Zilber Trusts................ 39,897 * 36,000 3,897 *
All executive officers and directors
as a group (10 persons)............ 2,851,039 12.9% 765,917 2,085,122 8.4%
</TABLE>
- ------------
* Less than 1%
(1) These shares are held by the Kristinik Family Partnership, of which Mr.
Kristinik is a general partner. Includes 80,000 shares which may be
acquired upon the exercise of options exercisable within 60 days of this
offering. Mr. Kristinik has been Chairman of the Board of Directors and
Chief Executive Officer of the Company since March 1996.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
19
<PAGE>
(2) Includes 137,774 shares held by Mr. Mercadante's spouse, as to which shares
Mr. Mercadante disclaims beneficial ownership. Includes 20,000 shares which
may be acquired upon the exercise of options exercisable within 60 days of
this offering. Mr. Mercadante has been a director of the Company since May
1996. Mr. Mercadante served as President and Chief Operating Officer of the
Company from May 1996 to December 5, 1997. Since December 5, 1997, Mr.
Mercadante has served as President of the Company.
(3) Includes 40,000 shares which may be acquired upon the exercise of options
exercisable within 60 days of this offering. Mr. Cerny served as Senior
Vice President, General Counsel and Secretary of the Company from January
1996 to December 5, 1997. Since December 5, 1997, Mr. Cerny has served as
Senior Vice President -- Corporate Development, General Counsel and
Secretary of the Company. Mr. King has served as Senior Vice President,
Chief Financial Officer and a director of the Company since December 1995.
(4) Includes 83,385 shares held by Mr. Gallagher's spouse, as to which shares
Mr. Gallagher disclaims beneficial ownership, of which 28,015 are being
offered hereby, and 13,039 shares held in a trust for the benefit of Mr.
Gallagher's daughter for which Mr. Gallagher is a trustee, of which 6,519
are being offered hereby. Includes 20,000 shares which may be acquired upon
the exercise of options exercisable within 60 days of this offering. Mr.
Gallagher became a director of the Company in May 1996. Mr. Gallagher
served as the Senior Vice President-Corporate Development of the Company
from May 1996 to December 5, 1997. Since December 5, 1997, Mr. Gallagher
has served as Executive Vice President and Chief Operating Officer of the
Company.
(5) Includes 134,243 shares held by Mr. Mercadante's spouse as to which shares
Mr. Mercadante disclaims beneficial ownership, of which 40,273 are being
offered hereby. Mr. Mercadante became a director in, and has served as
Senior Vice President-Northeast Region since May 1996.
(6) These shares are held by two family trusts for which Mr. Busskohl is a
trustee. Mr. Busskohl became a director in May 1996.
(7) 304,381 of these shares are held by Harter Investment Partners, Ltd., of
which Mr. Harter is a general partner. Includes 15,000 shares which may be
issued upon exercise of options and 33,714 shares held by the Victoria
Harter and Phyllis Spisak Educational Trust, of which Mr. Harter's minor
children are beneficiaries, as to which shares Mr. Harter disclaims
beneficial ownership. All shares held by such trust are being offered
hereby. Mr. Harter has been a Director of the Company since September 1995.
(8) Includes 15,000 shares which may be acquired upon exercise of options.
(9) Includes 15,000 shares which may be acquired upon exercise of options and
40,000 shares which may be acquired upon exercise of warrants. Mr. Verrochi
became a director in May 1996.
(10) The address of T. Rowe Price Associates, Inc. ("Price Associates") is P.
O. Box 17218, Baltimore, Maryland 21203. These securities are owned by
various individual and institutional investors which Price Associates
serves as investment adviser with power to direct investments and/or sole
power to vote the securities. For purposes of the reporting requirements of
the Exchange Act, Price Associates is deemed to be a beneficial owner of
such securities; however, Price Associates expressly disclaims that it is,
in fact, the beneficial owner of such securities.
(11) Consists of shares to be received upon conversion of Convertible
Subordinated Notes.
(12) This group consists of members of two families that previously owned
capital stock of a company acquired by Coach in February 1997.
(13) This group consists of members of a family that previously owned capital
stock of a company acquired by Coach in February 1997.
The Company will pay all costs and expenses incurred in connection with the
registration under the Securities Act of the shares being offered by the Selling
Stockholders, including all registration and filing fees, the NYSE listing fee,
printing expenses and fees and disbursements of counsel and accountants for the
Company. The Selling Stockholders will pay underwriting discounts and
commissions applicable to the shares being sold by them.
20
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Underwriters named below (the "Underwriters") have severally agreed to
purchase from the Company and the Selling Stockholders the following respective
number of shares of Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus:
NUMBER OF
NAME SHARES
- ------------------------------------- ----------
BT Alex. Brown Incorporated..........
Donaldson, Lufkin & Jenrette
Securities Corporation.............
NationsBanc Montgomery Securities
LLC................................
----------
Total........................... 4,000,000
==========
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all of the shares of Common Stock offered hereby, if
any of such shares are purchased.
The Company and the Selling Stockholders have been advised that the
Underwriters propose to offer the shares of Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, a concession
not to exceed $ per share to certain other dealers. After commencement of
this offering, the public offering price and other selling terms may be changed
by the Underwriters.
The Company has granted to the Underwriters an option, exercisable not
later than 30 days after the date of this Prospectus, to purchase up to 600,000
additional shares of Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of Common Stock to be purchased by
it shown in the above table bears to 4,000,000, and the Company will be
obligated, pursuant to the option, to sell such shares to the Underwriters. The
Underwriters may exercise such option only to cover over-allotments made in
connection with the sale of Common Stock offered hereby. If purchased, the
Underwriters will offer such additional shares on the same terms as those on
which the 4,000,000 are being offered.
The Underwriting Agreement contains covenants of indemnity and contribution
among the Underwriters, the Company and the Selling Stockholders with respect to
certain liabilities, including liabilities under the Securities Act.
To facilitate this offering of the Common Stock, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the Common Stock. Specifically, the Underwriters may over-allot shares
of the Common Stock in connection with this offering, thereby creating a short
position in the Underwriters' account. Additionally, to cover such over-
allotments or to stabilize the market price of the Common Stock, the
Underwriters may bid for, and purchase, shares of the Common Stock at a level
above that which might otherwise prevail in the open market. The Underwriters
are not required to engage in these activities, and, if commenced, any such
activities may be discontinued at any time. The Underwriters also may reclaim
selling concessions allowed to an Underwriter or dealer, if the Underwriters
repurchase shares distributed by that Underwriter or dealer.
The Company, its executive officers, directors and the Selling
Stockholders, who hold in the aggregate approximately 2.4 million shares of
Common Stock following completion of this offering, have agreed that until 180
days after the date of this Prospectus, they will not, without
21
<PAGE>
the prior written consent of BT Alex. Brown Incorporated, directly or indirectly
offer, sell or otherwise dispose of any shares of Common Stock, any shares of
Common Stock issuable upon exercise of options, rights or warrants or any
securities convertible into Common Stock of the Company, except that the Company
may, without such consent, (i) grant options pursuant to the Company's existing
employee stock option plans, (ii) issue stock upon the exercise of outstanding
options or warrants or upon the conversion of outstanding convertible securities
and (iii) issue Common Stock as consideration for acquisitions.
NationsBank of Texas, N.A. ("NationsBank"), an affiliate of NationsBanc
Montgomery Securities LLC, acts as lead agent and lender under the Credit
Facility, for which it has received customary fees and expenses and may receive
customary fees and expenses for performing such services in the future.
Substantially all of the net proceeds of this offering will be used to repay
lenders under the Credit Facility, including NationsBank. Since the amount to be
repaid to such lenders exceeds 10% of the net proceeds from the sale of the
Common Stock offered hereby, this offering is being made pursuant to the
provisions of Rule 2710(c)(8) of the Conduct Rules of the National Association
of Securities Dealers, Inc.
LEGAL MATTERS
Certain legal matters relating to this offering will be passed upon for the
Company by Douglas M. Cerny, General Counsel to the Company, and Andrews &
Kurth, L.L.P., Houston, Texas, and for the Underwriters by Piper & Marbury
L.L.P., Baltimore, Maryland.
Mr. Cerny owns 89,000 shares of Common Stock and holds options to purchase
125,000 shares of Common Stock, 40,000 of which are exercisable within 60 days
of this offering.
EXPERTS
The audited financial statements of Coach USA, Inc. and subsidiaries
incorporated by reference in this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said report. The audited financial
statements of Kerrville Bus Company, Inc. incorporated in this Prospectus by
reference have been audited by Burnside & Rishebarger PLLC, independent public
accountants, as stated in their report incorporated by reference herein.
AVAILABLE INFORMATION
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments, supplements and exhibits thereto, the
"Registration Statement") under the Securities Act, with respect to the Common
Stock offered by this Prospectus. This Prospectus, which constitutes part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement or the exhibits and schedules thereto. For further
information pertaining to the Common Stock offered by this Prospectus and the
Company, reference is made to the Registration Statement and the exhibits and
schedules thereto. Statements made in this Prospectus as to the contents of any
agreement or other document are not necessarily complete, and in each instance
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference. The Registration Statement, including the exhibits and schedules
thereto, may be inspected, without charge, at the public reference facilities
maintained by the Commission in Washington, D.C. and copies of such material may
be obtained from the Commission upon payment of the prescribed fees.
The Company is subject to the informational requirements of the Exchange
Act and the rules and regulations promulgated thereunder and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Reports, proxy statements and other
22
<PAGE>
information filed by the Company with the Commission may be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549-1004, and at the
following Regional Offices of the Commission: Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material may also be obtained at the prescribed rates from the Public
Reference Section of the Commission at its principal office at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549-1004. The Company's Common Stock
is traded on the NYSE and, as a result, the Company also files reports, proxy
statements and other information with the NYSE, and such reports, proxy
statements and other information are available for inspection at the offices of
the NYSE at 20 Broad Street, New York, New York 10005. The Registration
Statement and other information filed by the Company with the Commission are
also available at the web site of the Commission at http://www.sec.gov.
23
<PAGE>
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
PAGE
----
Incorporation of Certain Documents By
Reference.......................... 2
Special Note Regarding Forward
Looking Statements................. 2
Prospectus Summary................... 3
Risk Factors......................... 7
Business............................. 12
Use of Proceeds...................... 16
Capitalization....................... 17
Price Range of Common Stock.......... 18
Dividend Policy...................... 18
Principal and Selling Stockholders... 19
Underwriting......................... 21
Legal Matters........................ 22
Experts.............................. 22
Available Information................ 22
------------------------
4,000,000 SHARES
[LOGO]
COMMON STOCK
--------------------
PROSPECTUS
--------------------
BT ALEX. BROWN
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NATIONSBANC MONTGOMERY
SECURITIES LLC
, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
All capitalized terms used and not defined in Part II of this Registration
Statement shall have the meanings assigned to them in the Prospectus which forms
a part of this Registration Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with this
offering are as follows:
Securities and Exchange Commission
registration fee................... $ 61,828
NASD fee............................. 21,459
NYSE listing fee..................... 9,100
Printing and engraving expenses...... 50,000
Accounting fees and expenses......... 50,000
Legal fees and expenses.............. 100,000
Miscellaneous........................ 207,613
-----------
Total........................... 500,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-laws provide that the Company shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify all persons whom it may
indemnify pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware permits
a corporation, under specified circumstances, to indemnify its directors,
officers, employees or agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article Seven of the Company's Certificate of Incorporation provides that
the Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the General Corporation Law of the State of Delaware, which makes
directors liable for unlawful dividends or unlawful stock repurchases or
redemptions or (d) for transactions from which directors derive improper
personal benefit.
II-1
<PAGE>
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
<C> <S>
1.1 -- Form of Underwriting Agreement
4.1 -- Form of certificate evidencing ownership of Common Stock of Coach USA (Incorporated by
reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-2704) of
the Company)
5.1 -- Opinion of Douglas M. Cerny
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Burnside & Rishebarger PLLC
23.3 -- Consent of Douglas M. Cerny (contained in Exhibit 5.1)
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and this offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and this offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment of the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 20th day of April,
1998.
COACH USA, INC.
By: /s/ RICHARD H. KRISTINIK
RICHARD H. KRISTINIK
CHAIRMAN OF THE BOARD AND CHIEF
EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard H. Kristinik, Lawrence K. King and
Douglas M. Cerny and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities, to sign, execute and file this
registration statement under the Securities Act and any and all amendments
(including, without limitation, post-effective amendments and any amendment or
amendments or additional registration statements filed pursuant to Rule 462
under the Securities Act increasing the amount of securities for which
registration is being sought) to this registration statement, and to file the
same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, to sign any and all
applications, registration statements, notices or other documents necessary or
advisable to comply with the applicable state security laws, and to file the
same, together with other documents in connection therewith, with the
appropriate state securities authorities, granting unto said attorney-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED ON APRIL 20, 1998.
SIGNATURE TITLE
- --------------------------------------------------------------------------
/s/RICHARD H. KRISTINIK Chairman of the Board and Chief
RICHARD H. KRISTINIK Executive Officer (Principal
Executive Officer)
/s/LAWRENCE K. KING Senior Vice President, Chief
LAWRENCE K. KING Financial Officer and Director
(Principal Financial and Accounting
Officer)
Director
STEVEN S. HARTER
/s/JOHN MERCADANTE, JR. President and Director
JOHN MERCADANTE, JR.
II-3
<PAGE>
SIGNATURES -- (CONTINUED)
Executive Vice President, Chief
FRANK P. GALLAGHER Operating Officer and Director
/s/GERALD MERCADANTE Senior Vice President -- Northeast
GERALD MERCADANTE Region and Director
Director
CHARLES D. BUSSKOHL
/s/WILLIAM J. LYNCH Director
WILLIAM J. LYNCH
/s/PAUL M. VERROCHI Director
PAUL M. VERROCHI
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------------------------ ------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
1.1 -- Form of Underwriting Agreement
4.1 -- Form of certificate evidencing ownership of Common Stock of Coach USA (Incorporated by
reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-2704) of
the Company)
5.1 -- Opinion of Douglas M. Cerny
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Burnside & Rishebarger PLLC
23.3 -- Consent of Douglas M. Cerny (contained in Exhibit 5.1)
</TABLE>
EXHIBIT 1.1
4,000,000 Shares
COACH USA, INC.
Common Stock
UNDERWRITING AGREEMENT
May ___, 1998
BT Alex. Brown Incorporated
Donaldson, Lufkin & Jenrette Securities Corporation
NationsBanc Montgomery Securities LLC
c/o BT Alex. Brown Incorporated
One South Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Coach USA, Inc., a Delaware corporation (the "Company"), and certain
shareholders of the Company named in Schedule II hereto (the "Selling
Shareholders") propose to sell to you (the "Underwriters") an aggregate of
4,000,000 shares of the Company's Common Stock, par value $.01 per share (the
"Firm Shares"), of which 2,000,000 shares will be sold by the Company and
2,000,000 shares will be sold by the Selling Shareholders. The respective
amounts of the Firm Shares to be so purchased by each of the Underwriters are
set forth opposite their names in Schedule I hereto, and the respective amounts
to be sold by the Selling Shareholders are set forth opposite their names in
Schedule II hereto. The Company and the Selling Shareholders are sometimes
herein referred to as the "Sellers." The Company also proposes to sell at the
Underwriters' option an aggregate of up to 600,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
You have advised the Company and the Selling Shareholders (a) that you
are authorized to enter into this Agreement and (b) that you are willing, acting
severally and not jointly, to purchase the numbers of Firm Shares set forth
opposite your respective names in Schedule I, plus your pro rata portion of the
Option Shares if you elect to exercise the over-allotment option in whole or in
part for the accounts of the Underwriters. The Firm Shares and the Option Shares
(to the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
1
<PAGE>
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDERS
(a) The Company represents and warrants to each of the Underwriters
as follows:
(i) A registration statement on Form S-3 (Reg. No. 333-_______)
with respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission. The
Company has complied with the conditions for the use of Form S-3. Copies
of such registration statement, including any amendments thereto, the
preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements
and schedules, as finally amended and revised, have heretofore been
delivered by the Company to you. Such registration statement, together
with any registration statement filed by the Company pursuant to Rule
462(b) under the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, has become effective under the Act and no
post-effective amendment to the Registration Statement has been filed as
of the date of this Agreement. "Prospectus" means (a) the form of
prospectus first filed with the Commission pursuant to Rule 424(b) or
(b) the last preliminary prospectus included in the Registration
Statement filed prior to the time it becomes effective or filed pursuant
to Rule 424(a) under the Act that is delivered by the Company to the
Underwriters for delivery to purchasers of the Shares, together with the
term sheet or abbreviated term sheet filed with the Commission pursuant
to Rule 424(b)(7) under the Act. Each preliminary prospectus included in
the Registration Statement prior to the time it becomes effective is
herein referred to as a "Preliminary Prospectus." Any reference herein
to the Registration Statement, any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference
herein to any Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the termination of
the offering of the Shares by the Underwriters.
(ii) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in
2
<PAGE>
the Registration Statement. Each of the subsidiaries of the Company as
listed in Exhibit 21 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 (collectively, the "Subsidiaries") has been
duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with corporate
power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. The Company has no
subsidiaries, direct or indirect, except the Subsidiaries. The Company
and each of the Subsidiaries are duly qualified to transact business in
all jurisdictions in which the conduct of their respective businesses
requires such qualification, except where the failure to so qualify
would not have a materially adverse effect on the business and
operations of the Company and the Subsidiaries taken as a whole. The
outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable. All of the outstanding shares of capital stock of each
of the Subsidiaries is owned by the Company free and clear of all liens,
encumbrances and equities and claims [ANY SHARES PLEDGED UNDER CREDIT
AGREEMENT?]; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in any
of the Subsidiaries is outstanding.
(iii) The outstanding shares of Common Stock of the Company,
including all Shares to be sold by the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have
been duly authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive
rights of stockholders exist with respect to any of the Shares or the
issue and sale thereof. Neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated by this Agreement
gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common
Stock.
(iv) The information set forth under the caption "Capitalization"
in the Prospectus is true and correct. All of the Shares conform to the
description thereof contained or incorporated by reference in the
Registration Statement. The form of certificates for the Shares conforms
to the corporate law of the jurisdiction of the Company's incorporation.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus and any amendments
or supplements thereto will contain, all statements which are required
to be stated therein by, and will conform to the requirements of the Act
and the Rules and Regulations. The documents incorporated by reference
in the Prospectus, at the time filed with the Commission, conformed in
all respects to the requirements of the Securities
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Exchange Act of 1934 (the "Exchange Act") or the Act, as applicable, and
the Rules and Regulations. The Registration Statement and any amendment
thereto do not contain, and will not contain, any untrue statement of a
material fact and do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue
statement of a material fact and do not omit, and will not omit, to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment
or supplement, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Underwriter,
specifically for use in the preparation thereof.
(vi) The consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules, as set forth or
incorporated by reference in the Registration Statement, present fairly
in all material respects the financial position and the results of
operations and cash flows of the Company and the consolidated
Subsidiaries at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in
accordance with generally accepted principles of accounting,
consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair presentation
of results for such periods have been made. The summary pro forma
financial and statistical data included or incorporated by reference in
the Registration Statement present fairly the information shown therein
and such data has been compiled on a basis consistent with the financial
statements presented therein and the books and records of the Company.
The pro forma financial data of the Company and the Purchased Companies
(the 23 acquired companies which were accounted for as purchases) as set
forth or incorporated by reference in the Registration Statement,
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial information and have been properly compiled on the
pro forma bases described therein, and in the opinion of the Company,
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(vii) Arthur Andersen LLP and Burnside & Rishebarger PLLC who
have certified certain of the financial statements filed with the
Commission as part of, or incorporated by reference in, the Registration
Statement, are independent public accountants as required by the Act and
the Rules and Regulations.
(viii) There is no action, suit, claim or proceeding pending or,
to the knowledge of the Company, threatened against the Company or any
of the Subsidiaries before any
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court or administrative agency or otherwise, which if determined
adversely to the Company or any of the Subsidiaries is reasonably likely
to result in any material adverse change in the earnings, business,
management, properties, assets, rights, operations, condition (financial
or otherwise) or prospects of the Company and the Subsidiaries, taken as
a whole, or to prevent the consummation of the transactions contemplated
hereby except as set forth in the Registration Statement.
(ix) Each of the Company and the Subsidiaries has good and
marketable title to all of its properties and assets reflected in its
financial statements (or as described in the Registration Statement)
hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial
statements (or as described in the Registration Statement) or which are
not material in amount. Each of the Company and the Subsidiaries
occupies its leased properties under valid and binding leases conforming
in all material respects to the description thereof incorporated by
reference in the Registration Statement.
(x) Each of the Company and the Subsidiaries has filed all
Federal, state, local and foreign income tax returns which have been
required to be filed and have paid all taxes indicated by said returns
and all assessments received by it or any of them to the extent that
such taxes have become due and are not being contested in good faith.
All tax liabilities have been adequately provided for in the
consolidated financial statements of the Company.
(xi) Since the respective dates as of which information is given
in the Registration Statement, as it may be amended or supplemented,
there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise), or prospects of the Company and the
Subsidiaries, taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being
entered into by the Company or the Subsidiaries, other than transactions
in the ordinary course of business and changes and transactions
described in the Registration Statement, as it may be amended or
supplemented. Neither the Company nor any of the Subsidiaries has any
material contingent obligations which are not disclosed in the Company's
consolidated financial statements, as applicable, included or
incorporated by reference in the Registration Statement.
(xii) Neither the Company nor any of the Subsidiaries is, or with
the giving of notice or lapse of time or both, will be, in violation of
or in default under its Charter or By-Laws or under any agreement,
lease, contract, indenture or other instrument or obligation to which it
is a party or by which it, or any of its properties, is bound and which
default is of material significance in respect of the condition
(financial or
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otherwise) of the Company and the Subsidiaries, taken as a whole, or the
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the
Subsidiaries, taken as a whole. The execution and delivery of this
Agreement, the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in
a material breach of any of the terms or provisions of, or constitute a
material default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of the Subsidiaries
is a party, or of the Charter or By-Laws of the Company or any of the
Subsidiaries or any order, rule or regulation applicable to the Company
or any of the Subsidiaries of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
(xiii) Each material approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the Commission or the National
Association of Securities Dealers, Inc. (the "NASD")) has been obtained
or made and is in full force and effect.
(xiv) The Company and each of the Subsidiaries hold all material
licenses, certificates and permits from governmental authorities which
are necessary to the conduct of their businesses; and neither the
Company nor any of the Subsidiaries has infringed any patents, patent
rights, trade names, trademarks or copyrights, which infringement is
material to the business of the Company or such Subsidiary. The Company
knows of no material infringement by others of patents, patent rights,
trade names, trademarks or copyrights owned by or licensed to the
Company or any of the Subsidiaries.
(xv) Neither the Company, nor to the Company's best knowledge,
any of its affiliates or any of the Subsidiaries, has taken or may take,
directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares
of Common Stock to facilitate the sale or resale of the Shares.
(xvi) Neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended (the "1940 Act") and the
rules and regulations of the Commission thereunder.
(xvii) The Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
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<PAGE>
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
(xviii) The Company and each of the Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar industries.
(xix) The Company and each of the Subsidiaries are in compliance
in all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company or any of
the Subsidiaries would have any liability; neither the Company nor any
of the Subsidiaries has incurred nor expects to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan," or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company or any of the Subsidiaries would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
(b) Each of the Selling Shareholders severally represents and warrants
to each of the Underwriters and the Company that:
(i) Such Selling Shareholder has and at the Closing Date will
have good and valid title to the Firm Shares to be sold by such Selling
Shareholder, free of any liens, encumbrances, equities and claims, and
full right, power and authority to effect the sale and delivery of such
Firm Shares; and upon the delivery of and payment for such Firm Shares
pursuant to this Agreement, good and valid title thereto, free of any
liens, encumbrances, equities and claims, will be transferred to the
several Underwriters.
(ii) The consummation by such Selling Shareholder of the
transactions herein contemplated and the fulfillment by such Selling
Shareholder of the terms hereof will not result in a material breach of
any of the terms and provisions of, or constitute a material default
under, any indenture, mortgage, deed of trust or other agreement or
instrument to which such Selling Shareholder is a party, or of any
order, rule or regulation applicable to such Selling Shareholder of any
court or of any regulatory body or administrative agency
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<PAGE>
or other governmental body having jurisdiction which breach or default
is material to such Selling Shareholder.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has
constituted, or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock of the
Company.
(iv) No offering, sale, short sale or other disposition of any
Common Stock of the Company, any options or warrants to purchase shares
of Common Stock or any securities convertible into or exchangeable for
shares of Common Stock and no request for registration for the offer or
sale of any of the foregoing will be made for a period of 180 days after
the date of this Agreement, directly or indirectly, by such Selling
Shareholder otherwise than with the prior written consent of BT Alex.
Brown Incorporated.
(v) Such Selling Shareholder has reviewed the Registration
Statement, including the Preliminary Prospectus and the Prospectus
included therein; such Selling Shareholder has no knowledge of any
material adverse information with regard to the current and prospective
operations of the Company and the Subsidiaries which has not been
disclosed in the Prospectus; the information contained in the
Registration Statement with respect to such Selling Shareholder is true
and correct; and to the best of the knowledge and belief of such Selling
Shareholder, the Registration Statement does not contain any
misstatement of a material fact or omits to state any fact which a
prospective purchaser of Shares might reasonably believe to be material;
and such Selling Shareholder is not selling any of the Shares because of
any knowledge which such Selling Shareholder has of any material adverse
information about the business, financial condition or prospects of the
Company other than such information as is set forth in the Registration
Statement.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the
Sellers agree to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $______ per share,
the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance
with Section 9 hereof. The number of Firm Shares to be purchased by each
Underwriter from each Seller shall be as nearly as practicable in the
same proportion to the total number of Firm Shares being sold by each
Seller as the number of Firm Shares being purchased by each Underwriter
bears to the total number of Firm Shares to be sold hereunder. The
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<PAGE>
obligations of the Company and of each of the Selling Shareholders shall
be several and not joint.
(b) Certificates in negotiable form for the total number of the
Firm Shares to be sold hereunder by the Selling Shareholders have been
placed in custody with Douglas M. Cerny as custodian (the "Custodian")
pursuant to the Custodian Agreement executed by each Selling Shareholder
for delivery of all Firm Shares to be sold hereunder by the Selling
Shareholders. Each of the Selling Shareholders specifically agrees that
the Firm Shares represented by the certificates held in custody for the
Selling shareholders under the Custodian Agreement are subject to the
interests of the Underwriters hereunder, that the arrangements made by
the Selling Shareholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Shareholders
hereunder shall not be terminable by any act or deed of the Selling
Shareholders (or by any other person, firm or corporation including the
company, the Custodian or the Underwriters) or by operation of law
(including the death of an individual Selling Shareholder or the
dissolution of a corporate Selling Shareholder) or by the occurrence of
any other event or events, except as set forth in the Custodian
Agreement. If any such event should occur prior to the delivery of the
Underwriters of the Firm Shares hereunder, certificates for the Firm
Shares shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such event has not occurred. The
Custodian is authorized to receive and acknowledge receipt of the
proceeds of sale of the Shares held by it against delivery of such
Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be
made via wire transfer to the Company in the case of the Firm Shares
being sold by the Company and to the order of "Douglas M. Cerny, as
Custodian" in the case of the Firm Shares being sold by the Selling
Shareholders, in each case against delivery of certificates for the Firm
Shares. Such payment and delivery are to be made at the offices of BT
Alex. Brown Incorporated, One South Street, Baltimore, Maryland, at
10:00 a.m., Baltimore time, on the third business day after the date of
this Agreement or at such other place, time and date not later than five
(5) business days thereafter as you and the Company shall agree upon,
such time and date being herein referred to as the "Closing Date." (As
used herein, "business day" means a day on which the New York Stock
Exchange ("NYSE") is open for trading and on which banks in New York are
open for business and are not permitted by law or executive order to be
closed.) The certificates for the Firm Shares will be delivered in such
denominations and in such registrations as the Underwriters request in
writing not later than the second full business day prior to the Closing
Date, and will be made available for inspection by the Underwriters at
least one business day prior to the Closing Date.
(d) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company hereby
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<PAGE>
grants an option to the Underwriters to purchase the Option Shares at
the price per share as set forth in paragraph (a) of this Section 2. The
option granted hereby may be exercised in whole or in part by your
giving written notice to the Company (i) at any time before the Closing
Date or (ii) only once thereafter within 30 days after the date of this
Agreement setting forth the number of Option Shares as to which the
Underwriters are exercising the option, the names and denominations in
which the Option Shares are to be registered and the time and date at
which such certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined
by the Underwriters but shall not be earlier than three (3) nor later
than 10 full business days after the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of
the option is three (3) or more business days before the Closing Date,
the notice of exercise shall set the Closing Date as the Option Closing
Date. The number of Option Shares to be purchased by each Underwriter
shall be in the same proportion to the total number of Option Shares
being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of shares, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the
Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters. You
may cancel such option at any time prior to its expiration by giving
written notice of such cancellation to the Company. To the extent, if
any, that the option is exercised, payment for the Option Shares shall
be made on the Option Closing Date in New York Clearing House funds by
certified or bank cashier's check drawn to the order of the Company
against delivery of certificates therefor at the offices of BT Alex.
Brown Incorporated, One South Street, Baltimore, Maryland.
(e) If on the Closing Date any Selling Shareholder fails to sell
the Firm Shares which such Selling Shareholder has agreed to sell on
such date as set forth in Schedule II hereto, the Company agrees that it
will sell or arrange for the sale of that number of shares of Common
Stock to the Underwriters which represents Firm Shares which such
Selling Shareholder has failed to so sell, as set forth in Schedule II
hereto, or such lesser number as may be requested by the Underwriters.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the Underwriters are to make a public offering of
the Firm Shares as soon as they deem it advisable to do so following execution
of this Agreement. The Firm Shares are to be initially offered to the public at
the public offering price set forth on the cover of the Prospectus. The
Underwriters may from time to time thereafter change the public offering price
and other selling terms. To the extent, if at all, that any Option Shares are
purchased pursuant to Section 2 hereof, the Underwriters will offer them to the
public on the foregoing terms.
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It is further understood that you will act in accordance with a Master
Agreement Among Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
(a) The Company covenants and agrees with the Underwriters that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely
file with the Commission under Rule 424(b) of the Rules and Regulations
a Prospectus in a form approved by the Underwriters containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, (B) not file any amendment to the Registration Statement or
supplement to the Prospectus or document incorporated by reference
therein of which the Underwriters shall not previously have been advised
and furnished with a copy or to which the Underwriters shall have
reasonably objected in writing or which is not in compliance with the
Rules and Regulations and (C) file on a timely basis all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the Prospectus and
prior to the termination of the offering of the Shares by the
Underwriters.
(ii) The Company will advise the Underwriters promptly (A) when
the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the
Commission, (C) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any
additional information, and (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the use of the Prospectus or of the institution of any proceedings for
that purpose. The Company will use its best efforts to prevent the
issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
(iii) The Company will cooperate with the Underwriters in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Underwriters may reasonably have designated in
writing and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a
consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to
continue such qualifications in effect for so long a period as the
Underwriters may reasonably request for distribution of the Shares.
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<PAGE>
(iv) The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any Preliminary
Prospectus as the Underwriters may reasonably request. The Company will
deliver to, or upon the order of, the Underwriters during the period
when delivery of a Prospectus is required under the Act, as many copies
of the Prospectus in final form, or as thereafter amended or
supplemented, as the Underwriters may reasonably request. The Company
will deliver to the Underwriters at or before the Closing Date, three
signed, xeroxed copies of the Registration Statement and all amendments
thereto including all exhibits filed therewith, and will deliver to the
Underwriters such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that
may reasonably be requested), including any documents incorporated by
reference therein, and of all amendments thereto, as the Underwriters
may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations and the Exchange Act and the rules and regulations of the
Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur
as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at any
time to amend or supplement the Prospectus to comply with any law, the
Company promptly will either (i) prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus or (ii) prepare and file with the Commission an appropriate
filing under the Exchange Act which shall be incorporated by reference
in the Prospectus so that the Prospectus as so amended or supplemented
will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration
Statement, an earnings statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement, which
earnings statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 of the Rules and Regulations and will advise you in
writing when such statement has been so made available.
(vii) The Company will, for a period of five (5) years from the
Closing Date, deliver to the Underwriters copies of annual reports and
copies of all other documents, reports and information furnished by the
Company to its stockholders or filed with any securities exchange
pursuant to the requirements of such exchange or with the Commission
pursuant to the Act or the Exchange Act. The Company will deliver to the
Underwriters similar reports with respect to significant subsidiaries,
as that term is defined in the Rules and Regulations, which are not
consolidated in the Company's financial statements.
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<PAGE>
(viii) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible
into or exchangeable or exercisable for shares of Common Stock or
derivative of Common Stock (or agreement for such) will be made for a
period of 180 days after the date of the Prospectus, directly or
indirectly, by the Company otherwise than hereunder or with the prior
written consent of BT Alex. Brown Incorporated, except that the Company
may, without such consent (i) grant options pursuant to the Company's
existing employee stock option plans, (ii) issue Common Stock upon the
exercise of outstanding options or warrants to purchase shares of Common
Stock or the conversion of outstanding securities of the Company
convertible into shares of Common Stock on the date of this Agreement or
(iii) issue Common Stock as consideration for acquisitions.
(ix) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the NYSE.
(x) The Company has caused each executive officer and director
and Selling Shareholder of the Company to furnish to you, on or prior to
the date of this Agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person has
agreed not to offer, sell, sell short or otherwise dispose of any shares
of Common Stock of the Company owned by such person (or as to which such
person has the right to direct the disposition of) or request the
registration for the offer or sale of any of the foregoing for a period
of 180 days after the date of the Prospectus, directly or indirectly,
except with the prior written consent of BT Alex. Brown Incorporated,
provided that the Company may, without such consent, (i) grant options
pursuant to the Company's existing employee stock option plans, (ii)
issue Common Stock upon the exercise of outstanding options or warrants
to purchase shares of Common Stock or the conversion of outstanding
securities of the Company convertible into shares of Common Stock on the
date of this Agreement or (iii) issue Common Stock as consideration for
acquisitions ("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its sale of the
Shares as set forth in the Prospectus.
(xii) The Company shall not invest, or otherwise use, the
proceeds received by the Company from its sale of the Shares in such a
manner as would require the Company or any of the Subsidiaries to
register as an investment company under the 1940 Act.
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(xiii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(xiv) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation
of the price of any securities of the Company.
(b) Each of the Selling Shareholders covenants and agrees with the
Underwriters that:
(i) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other capital stock of the
Company or other securities convertible, exchangeable or exercisable for
Common Stock or derivative of Common Stock owned by the Selling
Shareholder or request the registration for the offer or sale of any of
the foregoing (or as to which the Selling Shareholder has the right to
direct the disposition of) will be made for a period of 180 days after
the date of this Agreement, directly or indirectly, by such Selling
Shareholder except with the prior consent of BT Alex. Brown
Incorporated.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance
Act of 1983 with respect to the transactions herein contemplated, each
of the Selling Shareholders agrees to deliver to you prior to or at the
Closing Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company and the
Selling Shareholders; the cost of printing and delivering to, or as requested
by, the Underwriters copies of the Registration Statement, Preliminary
Prospectuses, the Prospectus, this Agreement; the filing fees of the Commission;
the filing fees and expenses (including disbursements but excluding legal fees
of counsel to the Underwriters) incident to securing any required review by the
NASD of the terms of the sale of the Shares; and the Listing Fee of the NYSE.
The Sellers shall not, however, be required to pay for any of the Underwriters'
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expenses (other than those related to qualification under NASD regulations
except that, if this Agreement shall not be consummated because the conditions
in Section 6 hereof are not satisfied, or because this Agreement is terminated
by the Underwriters pursuant to Section 11 hereof, or by reason of any failure,
refusal or inability on the part of the Company or the Selling Shareholders to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, unless such failure
to satisfy said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the Underwriters
for reasonable out-of-pocket expenses, including fees and disbursements of
counsel, reasonably incurred in connection with investigating, marketing and
proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Company and the Selling Shareholders shall not in
any event be liable to any of the Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Shares
on the Closing Date and the Option Shares, if any, on the Option Closing Date
are subject to the accuracy, as of the Closing Date or the Option Closing Date,
as the case may be, of the representations and warranties of the Company and the
Selling Shareholders contained herein, and to the performance by the Company and
the Selling Shareholders of their covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriters and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company, shall be contemplated by the Commission and no
injunction, restraining order, or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing Date or
the Option Closing Date, as the case may be, which would prevent the issuance of
the Shares.
(b) The Underwriters shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Andrews & Kurth,
L.L.P., counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and stating that it may
be relied upon by counsel to the Underwriters) to the effect that:
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(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own or
lease its properties and conduct its business as described in the
Registration Statement; each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
with corporate power and authority to own or lease its properties
and conduct its business; the Company and each of the
Subsidiaries are duly qualified to transact business in each of
the jurisdictions set forth on a schedule to such opinion; and
the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable; and, to the best of such counsel's
knowledge, the outstanding shares of capital stock of each of the
Subsidiaries are owned by the Company, free and clear of all
liens, encumbrances and equities and claims, and no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations
into any shares of capital stock of or other ownership interests
in any of the Subsidiaries are outstanding.
(ii) The Company has authorized capital stock as set forth
under the caption "Capitalization" in the Prospectus; the
authorized shares of the Company's Preferred Stock and Common
Stock have been duly authorized; the outstanding shares of the
Company's Common Stock (including the Firm Shares to be sold by
the Selling Shareholders) have been duly authorized and validly
issued and are fully paid and non-assessable; all of the Shares
conform to the description thereof contained in the Prospectus;
the certificates for the Shares, assuming they are in the form
filed with the Commission, are in due and proper form; the Firm
Shares and Option Shares to be sold by the Company pursuant to
this Agreement, have been duly authorized and will be validly
issued, fully paid and non-assessable when issued and paid for as
contemplated by this Agreement; and no preemptive rights of
stockholders exist under statute or under agreements known to
such counsel with respect to any of the Shares or the issue or
sale thereof.
(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or exchangeable
into or evidencing the right to purchase or subscribe for any
shares of capital stock of the Company and there are no
outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its
capital stock or any securities convertible or exchangeable into
or evidencing the right to purchase or subscribe for any shares
of such stock; and except as described in the Prospectus, to the
knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived, to
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cause the Company to sell or otherwise issue to them, or to
permit them to underwrite the sale of, any of the Shares or the
right to have any shares of Common Stock or other securities of
the Company included in the Registration Statement or the right,
as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common Stock
or other securities of the Company.
(iv) The Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no
stop order proceedings with respect thereto have been instituted
or are pending or threatened under the Act.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto and document incorporated by
reference therein comply as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable
and the applicable rules and regulations thereunder (except that
such counsel need express no opinion as to the financial
statements, notes thereto and related schedules and other
financial and statistical information included or incorporated by
reference therein or any information furnished by the
Underwriters for use therein). The conditions for the use of Form
S-3, set forth in the General Instructions thereto have been
satisfied.
(vi) Such counsel does not know of any contracts or
documents required to be filed as exhibits to or incorporated by
reference in the Registration Statement or described in the
Registration Statement or the Prospectus which are not so filed,
incorporated by reference or described as required, and the
descriptions of such contracts and documents required to be
described in the Registration Statement or the Prospectus are
correct in all material respects.
(vii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the
Company or any of the Subsidiaries except as set forth in the
Prospectus.
(viii) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do not
and will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, the
Charter or By-Laws of the Company, or, in any respect material to
the Company and the Subsidiaries, taken as a whole, any agreement
or instrument known to such counsel to which the Company or any
of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries may be bound.
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(ix) This Agreement has been duly authorized, executed and
delivered by the Company.
(x) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement and
the consummation of the transactions herein contemplated (other
than as may be required by the NASD as to which such counsel need
express no opinion), except such as have been obtained or made,
specifying the same.
(xi) The Company is not, and will not become, as a result
of the consummation of the transactions contemplated by this
Agreement, and application of the net proceeds therefrom as
described in the Prospectus, required to register as an
investment company under the 1940 Act.
(xii) This Agreement has been duly executed and delivered
by or on behalf of the Selling Shareholders and represent valid
and binding obligations of the Selling Shareholders.
(xiii) Assuming mental capacity to act, each Selling
Shareholder has full legal right, power and authority, and any
approval required by law to sell, assign, transfer and deliver
the portion of the Shares to be sold by such Selling Shareholder.
(xiv) The Custodian Agreement and Power of Attorney has
been duly executed and delivered by each Selling Shareholder.
(xv) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code)
have acquired good and marketable title to the Shares being sold
by each Selling Shareholder on the Closing Date, free and clear
of all claims, liens, encumbrances and security interests
whatsoever.
In rendering such opinion, Andrews & Kurth, L.L.P. may provide
that its opinion is limited to matters governed by the laws of New York
and the General Corporation law of the State of Delaware, and the
Federal securities laws of the United States and may rely on: (i)
regulatory counsel to the Company with respect to matters related to
regulation of motorcoach operations; (ii) on Douglas M. Cerny, Senior
Vice President and General Counsel of the Company, with respect to the
matters set forth in subparagraph (i) of paragraph (b) of this Section
6, to the extent such matters relate to the Subsidiaries; and (iii) on
counsel to one or more of the Selling Shareholders or on Douglas M.
Cerny, Senior Vice President and General Counsel of the Company, with
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respect to matters related to the Selling Shareholders, provided that,
in lieu of such reliance, Andrews & Kurth, L.L.P. may provide separate
opinions of any such counsel so long as such opinions are addressed to
the Underwriters, and further provided, that, in each case, Andrews &
Kurth, L.L.P. shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In addition
to the matters set forth above, the opinion of Andrews & Kurth, L.L.P.
shall also include a statement of belief to the effect that nothing has
come to the attention of such counsel which leads them to believe that
(i) the Registration Statement, at the time it became effective under
the Act (but after giving effect to any modifications incorporated
therein pursuant to Rule 430A under the Act) and, as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and Regulations
and as of the Closing Date or the Option Closing Date, as the case may
be, contained an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements, in the light
of the circumstances under which they are made, not misleading (except
that such counsel need express no view as to financial statements,
schedules or other financial and statistical information included or
incorporated by reference therein). With respect to such statement of
belief, Andrews & Kurth, L.L.P. may state that their belief is based
upon the procedures set forth therein, but is without independent check
and verification.
(c) The Underwriters shall have received from Piper & Marbury
L.L.P., counsel for the Underwriters, an opinion dated the Closing Date
or the Option Closing Date, as the case may be, substantially to the
effect specified in subparagraphs (ii), (iii), (iv), (ix) and (xii) of
Paragraph (b) of this Section 6, and that the Company is a duly
organized and validly existing corporation under the laws of the State
of Delaware. In rendering such opinion, Piper & Marbury L.L.P. may rely
as to the matters relating to the laws of the States other than Maryland
and Delaware on the opinions of counsel referred to in Paragraph (b) of
this Section 6. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that (i) the
Registration Statement, or any amendment thereto, as of the time it
became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act)
as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact, necessary in order to make the
statements, in the light of the circumstances under which they are made,
not misleading (except that such counsel need express no view as to
financial statements,
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schedules and statistical information therein). With respect to such
statement, Piper & Marbury L.L.P. may state that their belief is based
upon the procedures set forth therein, but is without independent check
and verification.
(d) The Underwriters shall have received, on the date hereof, the
Closing Date and the Option Closing Date, as the case may be, letters
dated the date hereof, the Closing Date or the Option Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters,
of Arthur Andersen LLP and Burnside & Rishebarger PLLC confirming that
they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and
stating that, in their opinion, the financial statements and schedules
examined by them and included or incorporated by reference in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations; and containing such other statements and
information as is ordinarily included in accountants' "comfort letters"
to Underwriters with respect to such financial statements and certain
financial and statistical information contained or incorporated by
reference in the Registration Statement and Prospectus.
(e) The Underwriters shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or
certificates of the Company and signed by the Chief Executive Officer
and the Chief Financial Officer of the Company to the effect that, as of
the Closing Date or the Option Closing Date, as the case may be:
(i) The Registration Statement has become effective under
the Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
such purpose have been taken or are, to his knowledge,
contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct in all
material respects as of the Closing Date or the Option Closing
Date, as the case may be;
(iii) All filings required to have been made pursuant to
Rules 424 or 430A under the Act have been made;
(iv) As of the effective date of the Registration
Statement, the statements contained in the Registration Statement
were true and correct in all material respects, and such
Registration Statement and Prospectus did not omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading, and since the
effective date of the Registration Statement, no event has
occurred which should have been set forth in a
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<PAGE>
supplement to or an amendment of the Prospectus which has not been so
set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not
been any material adverse change or any development involving a
prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company or any of the
Subsidiaries or the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company or any of the Subsidiaries, whether or
not arising in the ordinary course of business, except as set
forth in, or contemplated by, the Prospectus or as described in
such certificate.
(f) The Company and the Selling Shareholders shall have furnished
to the Underwriters such further certificates and documents confirming
the representations and warranties, covenants and conditions contained
herein and related matters as the Underwriters may reasonably have
requested.
(g) The Firm Shares and Option Shares, if any, shall have been
approved for designation upon notice of issuance on the NYSE.
(h) The Lockup Agreements described in Section 4(a)(x) shall be
in full force and effect.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Underwriters and to Piper & Marbury
L.L.P., counsel for the Underwriters, in their reasonable judgment.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Underwriters by notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Company, the Selling Shareholders and the
Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at
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the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
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8. INDEMNIFICATION.
(a) The Company and the Selling Shareholders, jointly and
severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
the Act, against any losses, claims, damages or liabilities to which
such Underwriter or any such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each Underwriter
and each such controlling person upon demand for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss,
claim, damage or liability, action or proceeding or in responding to a
subpoena or governmental inquiry related to the offering of the Shares,
whether or not such Underwriter or controlling person is a party to any
action or proceeding; provided, however, that the Company and the
Selling Shareholders will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement, or omission or
alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company
by or through the Underwriters specifically for use in the preparation
thereof. In no event, however, shall the liability of any Selling
Shareholder for indemnification under this Section 8(a) exceed the
lesser of (i) that proportion of the total of such losses, claims,
damages or liabilities indemnified against equal to the proportion that
the Shares being sold by such Selling Shareholders bears to the total
Shares sold hereunder or (ii) the proceeds received by such Selling
Shareholder from the Underwriters in the offering. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and
hold harmless the Company, each of its directors, each of its officers
who has signed the Registration Statement, each of the Selling
Shareholders and each person, if any, who controls the Company or a
Selling Shareholder within the meaning of the Act against any losses,
claims, damages or liabilities to which the Company or any such
director, officer, Selling Shareholder or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto or (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or
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<PAGE>
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer, Selling Shareholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Underwriters
specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available
to any party who shall fail to give notice as provided in this Section
8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of Section
8(a) or (b). In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as
incurred (or within 30 days of presentation) the fees and expenses of
the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them or (iii) the indemnifying
party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
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indemnified parties. Such firm shall be designated in writing by you in
the case of parties indemnified pursuant to Section 8(a) and by the
Company in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
In addition, the indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action or
proceeding of which indemnification may be sought hereunder (whether or
not any indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or (b) above (other than by reason of the exceptions
provided in such paragraphs) in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Shareholders on the one
hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party
shall contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the
Selling Shareholders on the one hand and the Underwriters on the other
in connection with the statements, omissions or breaches of
representations and warranties which resulted in such losses, claims,
damages or liabilities, (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholders on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholders bears to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the
Selling Shareholders on the one hand or the Underwriters on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
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The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to
this Section 8(d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation and (iii) no Selling Shareholder shall be
required to contribute any amount in excess of the lesser of (A) that
proportion of the total of such losses, claims, damages or liabilities
indemnified or contributed against equal to the proportion that the
Shares being sold by such Selling Shareholder bears to the total Shares
sold hereunder or (B) the proceeds received by such Selling Shareholder
from the Underwriters in the offering. The Underwriters' obligations in
this Section 8(d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon him or it by any other
contributing party and consents to the service of such process and
agrees that any other contributing party may join him or it as an
additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 8 and the representations and
warranties of the Company and the Selling Shareholders set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its
directors or officers, any Selling Shareholder or any persons
controlling the Company or any Selling Shareholder, (ii) acceptance of
any Shares and payment therefor hereunder and (iii) any termination of
this Agreement. A successor to any Underwriter, or to the Company, its
directors or
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officers, any Selling Shareholder, or any person controlling the Company
or any Selling Shareholder, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this
Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for any portion of the Shares
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or any
Selling Shareholder), the other Underwriters, shall use their reasonable efforts
to procure within 36 hours thereafter one or more other underwriters to purchase
from the Company such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter failed to purchase. If during such 36 hours the other
Underwriters shall not have procured such other underwriters, or any others, to
purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter, then (a) if the aggregate number of
shares with respect to which such default shall occur does not exceed 10% of the
Firm Shares or Option Shares, as the case may be, covered hereby, the other
Underwriters shall be obligated, severally, in proportion to the respective
numbers of Firm Shares or Option Shares, as the case may be, which they are
obligated to purchase hereunder, to purchase the Firm Shares or Option Shares,
as the case may be, which such defaulting Underwriter failed to purchase or (b)
if the aggregate number of Firm Shares or Option Shares, as the case may be,
with respect to which such default shall occur exceeds 10% of the Firm Shares or
Option Shares, as the case may be, covered hereby, the Company or the other
Underwriters will have the right, by written notice given within the next
36-hour period to the parties to this Agreement, to terminate this Agreement
without liability on the part of the other Underwriters or of the Company except
to the extent provided in Section 8 hereof. In the event of a default by any
Underwriter, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case may be, may be postponed for such period, not exceeding seven
(7) days, as the other Underwriters may determine in order that the required
changes in the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter" includes any
person substituted for a defaulting Underwriter. Any action taken under this
Section 9 shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to BT Alex. Brown
Incorporated, One South Street, Baltimore, Maryland 21202, Attention: Robert P.
Irwin, Managing Director, with a copy to BT Alex. Brown Incorporated, One South
Street, Baltimore, Maryland 21202 Attention: General Counsel; and if to the
Company, the Selling Shareholders or the Custodian; to Coach USA, Inc., One
Riverway, Suite
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500, Houston, Texas 77056-1903, Attention: Richard H. Kristinik,
Chief Executive Officer, with copies to Andrews & Kurth, L.L.P., 4200 Texas
Commerce Tower, Houston, Texas 77002, Attention: David P. Oelman, Esq. and
Douglas M. Cerny, Senior Vice President and General Counsel, Coach USA, Inc.,
One Riverway, Suite 500, Houston, Texas 77056-1903.
11. TERMINATION.
This Agreement may be terminated by you by notice to the Sellers as
follows:
(a) at any time prior to the earlier of (i) the time the Shares
are released by you for sale by notice to the Underwriters or (ii) 11:30
a.m. on the first business day following the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following
has occurred: (i) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material
adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of
the Company and the Subsidiaries taken as a whole or the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, (ii) any outbreak or escalation of hostilities or
declaration of war or national emergency or other national or
international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, escalation, declaration,
emergency, calamity, crisis or change on the financial markets of the
United States would, in your reasonable judgment, make it impracticable
to market the Shares or to enforce contracts for the sale of the Shares,
(iii) suspension of trading in securities generally on the NYSE or the
American Stock Exchange or limitation on prices (other than limitations
on hours or numbers of days of trading) for securities on either such
Exchange, (iv) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely
affects or may materially and adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by
United States or New York State authorities, (vi) the suspension of
trading of the Company's Common Stock by the Commission on the NYSE or
(vii) the taking of any action by any governmental body or agency in
respect of its monetary or fiscal affairs which in your reasonable
opinion has a material adverse effect on the securities markets in the
United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
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12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Selling Shareholders and the Underwriters acknowledge
and agree that the only information furnished or to be furnished by any
Underwriter to the Company for inclusion in any Prospectus or the Registration
Statement consists of the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the Underwriters),
legends required by Item 502(d) of Regulation S-K under the Act and the
information under the caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnity and contribution agreements contained in
this Agreement and the representations and warranties of the Company and the
Selling Shareholders set forth in this Agreement shall remain operative and in
full force and effect, regardless of (i) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, the Company, its
directors or officers, the Selling Shareholders or any persons controlling the
Company or the Selling Shareholders, (ii) acceptance of any Shares and payment
therefor hereunder and (iii) any termination of this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware.
29
<PAGE>
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Shareholders and the Underwriters in accordance with its terms.
Very truly yours,
COACH USA, INC.
By _______________________________
Richard H. Kristinik,
Chief Executive Officer
SELLING SHAREHOLDERS:
By _______________________________
Douglas M. Cerny,
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. BROWN INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
NATIONSBANC MONTGOMERY SECURITIES LLC
By: BT Alex. Brown Incorporated
By ___________________________________
Authorized Officer
30
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
UNDERWRITER TO BE PURCHASED
BT Alex. Brown Incorporated..............................
Donaldson, Lufkin & Jenrette Securities Corporation......
NationsBanc Montgomery Securities LLC.................... -----
-----
Total...................................... 4,000,000
31
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SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
Number of Firm Shares
SELLING SHAREHOLDER TO BE SOLD
--------------------- -----------------------
Total 2,000,000
32
EXHIBIT 5.1
April __, 1998
Board of Directors
Coach USA
One Riverway - Suite 500
Houston, Texas 77056
Gentlemen:
I have acted as general counsel of Coach USA, a Delaware corporation
(the "Company"), in connection with the Company's Registration Statement on Form
S-3 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended (the "Act"), of (i) up to an aggregate of
2,600,000 shares of the Company's common stock, $.01 par value (the "Common
Stock") being offered by the Company and (ii) up to an aggregate of 2,000,000
shares of Common Stock being offered by the selling stockholders (the "Selling
Stockholders") referred to in the Registration Statement. All of the shares of
Common Stock offered by the Company and the Selling Stockholders are
collectively referred to herein as the "Shares." This opinion also relates to
any registration statement of the Company relating to the registration of
additional shares of Common Stock pursuant to Rule 462(b) under the Act.
In connection herewith, I have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as I have deemed necessary as a basis for the opinion hereafter expressed. In
such examination, I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. I have
also relied, to the extent I deem such reliance proper, upon information
supplied by officers and employees of the Company with respect to various
factual matters material to our opinion. I have not independently verified any
factual matter relating to this opinion.
Based on the foregoing and having due regard for such legal
considerations as I deem relevant, I am of the opinion that:
(i) the Shares to be sold by the Company have been duly authorized
and when issued and delivered by the Company against payment
therefor as described in the Registration Statement, the Shares will
be validly issued, fully paid and nonassessable.
(ii) the Shares to be sold by the Selling Stockholders have been
duly authorized and are validly issued, fully paid and
non-assessable.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement. By giving such consent, I do not admit
that I am included within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations thereunder. This opinion
may be incorporated by reference in a registration statement of the Company
relating to the registration of additional shares of Common Stock pursuant to
Rule 462(b) under the Act, in which case the opinion expressed herein will apply
to the additional shares registered thereunder.
Very truly yours,
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 2, 1998,
included in Coach USA, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1997, and to all references to our Firm, included in or made a part
of this registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
April 20, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.
BURNSIDE & RISHEBARGER
PLLC
San Antonio, Texas
April 20, 1998
