<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 9)*
US Airways Group, Inc.
(Name of Issuer)
Common Stock
(Upon conversion of Series H Cumulative
Convertible Preferred Stock)
(Title of Class of Securities)
911905 10 7
(CUSIP Number)
Marc D. Hamburg
Berkshire Hathaway Inc.
1440 Kiewit Plaza, Omaha, Nebraska 68131
(402) 346-1400
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 15, 1997
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Page 1 of 49 Pages)
<PAGE>
Page 2 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Warren E. Buffett
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
United States citizen
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
358,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
358,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
358,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
10.41%
14 Type of Reporting Person*:
IN
<PAGE>
Page 3 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Berkshire Hathaway Inc.
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Delaware corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
358,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
358,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
358,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
10.41%
14 Type of Reporting Person*:
HC, CO
<PAGE>
Page 4 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
National Indemnity Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC, AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
256,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
256,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
256,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
7.44%
14 Type of Reporting Person*:
IC
<PAGE>
Page 5 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
National Fire and Marine Insurance Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.09%
14 Type of Reporting Person*:
IC
<PAGE>
Page 6 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Redwood Fire and Casualty Insurance Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.09%
14 Type of Reporting Person*:
IC
<PAGE>
Page 7 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Cypress Insurance Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
California corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
2,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
2,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
2,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.06%
14 Type of Reporting Person*:
IC
<PAGE>
Page 8 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Columbia Insurance Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
73,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
73,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
73,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
2.12%
14 Type of Reporting Person*:
IC
<PAGE>
Page 9 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
National Liability & Fire Insurance Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Illinois corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
2,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
2,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
2,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.06%
14 Type of Reporting Person*:
IC
<PAGE>
Page 10 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Blue Chip Stamps
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
California corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.35%
14 Type of Reporting Person*:
CO
<PAGE>
Page 11 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Wesco Financial Corporation
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Delaware corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.35%
14 Type of Reporting Person*:
CO
<PAGE>
Page 12 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Wesco Holdings Midwest, Inc.
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Delaware corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.35%
14 Type of Reporting Person*:
CO
<PAGE>
Page 13 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Wesco-Financial Insurance Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
12,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.35%
14 Type of Reporting Person*:
IC
<PAGE>
Page 14 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Nebraska Furniture Mart, Inc.
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
5,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
5,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
5,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.15%
14 Type of Reporting Person*:
CO
<PAGE>
Page 15 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
The Fechheimer Bros. Company
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Delaware corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
5,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
5,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
5,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.15%
14 Type of Reporting Person*:
CO
<PAGE>
Page 16 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
Oak River Insurance Company
(successor to Kansas Fire and Casualty Company)
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC, AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Nebraska corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.09%
14 Type of Reporting Person*:
IC
<PAGE>
Page 17 of 49
CUSIP No. 911905 10 7
1 Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
National Indemnity Company of Mid America
2 Check the appropriate box if a member of a Group*:
(a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 Source of Funds*:
WC, AF
5 Check box if disclosure of Legal Proceedings
is required pursuant to Items 2(d) or (e) [ ]
6 Citizen or place of organization:
Minnesota corporation
7 Number of shares beneficially owned by each Reporting Person with Sole
Voting Power:
-0-
8 Number of shares beneficially owned by each Reporting Person with Shared
Voting Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
9 Number of shares beneficially owned by each Reporting Person with Sole
Dispositive Power:
-0-
10 Number of shares beneficially owned by each Reporting Person with Shared
Dispositive Power:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
11 Aggregate amount beneficially owned by each Reporting Person:
3,000 shares Series H Senior Cumulative Convertible Preferred Stock
12 Check Box if the aggregate amount in
Row (11) excludes certain shares* [ ]
13 Percent of class represented by amount in Row (11):
.09%
14 Type of Reporting Person*:
IC
<PAGE>
Page 18 of 49
CUSIP No. 911905 10 7
Items 4, 5, 6 and 7 of the Schedule 13D previously filed by the undersigned with
respect to the common stock of US Airways Group, Inc. ("USAir") are hereby
amended to add the following:
Item 4. Purpose of Transaction.
- ------ ----------------------
On August 15, 1997, Berkshire Hathaway Inc. ("Berkshire") and certain of
its affiliates (the "Holders") that directly hold shares of USAir Series A
Cumulative Convertible Preferred Stock (the "Series A Preferred Stock"), entered
into an Agreement for Exchange of Stock (the "Exchange Agreement") with USAir
pursuant to which the Holders exchanged each of their 358,000 shares of Series A
Preferred Stock for 358,000 shares of a new issue of USAir Series H Senior
Cumulative Convertible Preferred Stock ("Series H Preferred Stock"). Berkshire
and the Holders entered into the Exchange Agreement at the request of USAir in
order to facilitate USAir's redemption of another series of its preferred stock
ranking junior to the Series A Preferred Stock. The Exchange Agreement amended
certain provisions of the Stock Purchase Agreement, dated as of August 7, 1989
(the "Stock Purchase Agreement"), between Berkshire and USAir, as described
below. The Certificate of Designation for the new shares of Series H Preferred
has substantially identical terms as the Certificate of Designation for the
Series A Preferred Stock, except as noted below.
The Stock Purchase Agreement previously restricted Berkshire from knowingly
selling any USAir securities to any person or group acting in concert which
would, following such sale, possess over 3% of the voting power of USAir's
outstanding voting securities. The Exchange Agreement has amended this
restriction to instead restrict Berkshire from (a) selling USAir securities
representing more than 3% of the voting power of USAir's outstanding voting
securities at the time of the sale to any one person (or group known by the
undersigned to be acting in concert) or (b) selling any USAir securities to any
one person (or group acting in concert) which (i) at the time of sale has on
file with the Securities and Exchange Commission a Schedule 13D with respect to
USAir voting securities disclosing that such entity (or group) beneficially owns
more than 5% of USAir's voting securities, or (ii) is otherwise known to
Berkshire as the beneficial owner directly or indirectly of more than 5% of
USAir's voting securities.
In the Exchange Agreement, USAir has irrevocably waived its rights and
released Berkshire from its obligations under Section 1(b)(v) of the Stock
Purchase Agreement, which had previously required Berkshire to offer USAir a
right of first refusal before the Holders could sell any USAir securities.
The Exchange Agreement provisions summarized in previous two paragraphs
will facilitate Berkshire's disposition of the USAir securities held by the
Holders. While Berkshire has no plan for the Holders to dispose of any USAir
securities presently, Berkshire continuously reviews its position in USAir
securities, and its opportunities to sell those securities, as part of
Berkshire's ordinary investment activity. At any time, Berkshire may determine
to sell, and may sell, all or part of the Holders' USAir securities, depending
upon price, market conditions, availability of funds, evaluation of alternative
investments and other factors. Such a disposition may take any form, including
but not limited to a sale, transfer, exchange, assignment,
<PAGE>
Page 19 of 49
CUSIP No. 911905 10 7
conveyance or pledge of the Series H Preferred Stock, the USAir common stock
issued or issuable upon conversion of the Series H Preferred Stock, other USAir
securities, and/or other securities or instruments convertible into or
exchangeable for all or part of such USAir securities.
The Certificate of Designation for the Series H Preferred Stock differs
from the Series A Preferred Stock Certificate of Designation in the following
principal respects:
(a) Redemption. USAir may not redeem the Series H Preferred Stock until
----------
March 15, 1998. On and after such date, USAir may redeem all (but not less than
all) of the Series H Preferred Stock for $1,150 per share plus accrued
dividends. Under the Series A Preferred Stock Certificate of Designation, since
August 7, 1991, USAir could redeem all (but not less than all) of the Series A
Preferred Stock for $1,100 per share plus accrued dividends.
(b) Conversion Rate. Each share of Series H Preferred Stock may be
---------------
converted into 26 shares of USAir common stock, determined by dividing 9,239,944
by 358,000 and rounding to the nearest share, subject to certain anti-dilution
adjustments. The aggregate number of USAir common shares into which the Series
H Preferred Stock may be converted is currently 9,308,000 shares. Each share of
Series A Preferred Stock was convertible into approximately 25.8099 shares of
USAir common stock, determined by dividing 9,239,944 by 358,000 without rounding
to the nearest share, subject to certain anti-dilution adjustments. The
aggregate number of USAir common shares into which the Series A Preferred Stock
could have been converted immediately prior to the exchange was 9,239,944
shares.
(c) Voting Rights. The Series A Preferred Stock and Series H Preferred
-------------
Stock each have voting rights equal to the number of shares into which each
series may be converted. Therefore, the undersigned was entitled to 9,239,944
votes under the Series A Certificate of Designation and is currently entitled to
9,308,000 votes under the Series H Certificate of Designation, subject to
certain anti-dilution adjustments.
Item 5. Interest in Securities of the Issuer.
- ------ ------------------------------------
The change in the conversion rate formula for the Series H Preferred Stock
has changed the number of shares of USAir common stock that would be held by the
undersigned upon conversion of the Series H Preferred Stock and the total votes
to which the Series H Preferred Stock is entitled. These changes are detailed
in the table below. Percentages in the following table are based upon the
number of securities outstanding as disclosed in USAir's quarterly report on
Form 10-Q for the quarter ended June 30, 1997. The following table assumes that
all shares of Series H Preferred Stock were converted to USAir common stock and
that no shares of USAir's Series B Cumulative Convertible Preferred Stock have
been so converted.
<PAGE>
Page 20 of 49
CUSIP No. 911905 10 7
<TABLE>
<CAPTION>
Shares of Percentage
Series H Shares of of Common and
Name Preferred Stock Common Stock Voting Stock
- --------------------------- --------------- ------------ --------------
<S> <C> <C> <C>
National Indemnity Co. 250,000 6,500,000 7.27%
Columbia Insurance Co. 73,000 1,898,000 2.12
Cypress Insurance Co. 2,000 52,000 .06
National Liability &
Fire Insurance Co. 2,000 52,000 .06
Wesco-Financial
Insurance Co. 12,000 312,000 .35
The Fechheimer Bros.
Company 5,000 130,000 .15
Redwood Fire & Casualty
Insurance Co. 3,000 78,000 .09
Nebraska Furniture Mart,
Inc. 5,000 130,000 .15
National Indemnity
Company of Mid-America 3,000 78,000 .09
Oak River Insurance Co. 3,000 78,000 .09
------- --------- -----
358,000 9,308,000 10.41%
</TABLE>
Warren E. Buffett, Chairman of the Board of Berkshire, may be deemed to
control Berkshire, which controls each of the Holders identified in the above
table. Both Mr. Buffett and Berkshire thus may be considered to have beneficial
ownership of the entire 358,000 shares of Series H Preferred Stock shown.
Wesco-Financial Insurance Company, Oak River Insurance Company and Redwood Fire
and Casualty Insurance Company, each of which is identified on the cover pages
and previously in Item 2 of this Schedule 13D, are indirect subsidiaries of
Berkshire, which controls each of the intervening companies--Blue Chip Stamps,
Wesco Financial Corporation and Wesco Holdings Midwest, Inc. (in the case of
Wesco-Financial Insurance Company); National Indemnity Company (in the case of
Oak River Insurance Company and National Indemnity Company of Mid-America); and
National Fire and Marine Insurance Company (in the case of Redwood Fire and
Casualty Insurance Company). Each of these intervening companies is identified
on the cover pages of this Schedule 13D and in Item 2 of prior versions of this
Schedule 13D, whether or not it is a record holder of Series H Preferred Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
- ------ ---------------------------------------------------------------------
to Securities of the Issuer.
---------------------------
As described above in Item 4, the Exchange Agreement and the Series H
Certificate of Designation provide for various rights and restrictions with
respect to USAir's securities.
Item 7. Material to be Filed as Exhibits.
- ------ --------------------------------
(a) The Agreement for Exchange of Stock, dated August 15, 1997, by and
between Berkshire Hathaway Inc., both for itself and on behalf of its
affiliates listed on Schedule A to the agreement, and US Airways
Group, Inc. is attached as Exhibit A to this Schedule.
<PAGE>
Page 21 of 49
CUSIP No. 911905 10 7
(b) The Certificate of Designation for the Series H Senior Cumulative
Convertible Preferred Stock of US Airways Group, Inc. is attached as
Exhibit B to this Schedule.
<PAGE>
Page 22 of 49
CUSIP No. 911905 10 7
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of each, the
undersigned hereby certify that the information set forth in this statement is
true, complete and correct.
Dated this 19th day of August, 1997.
/s/ Warren E. Buffett
Warren E. Buffett
BERKSHIRE HATHAWAY INC. NATIONAL INDEMNITY COMPANY
By /s/ Warren E. Buffett By /s/Warren E. Buffett
Warren E. Buffett Warren E. Buffett
Chairman of the Board Chairman of the Board
NATIONAL FIRE AND MARINE COLUMBIA INSURANCE COMPANY
INSURANCE COMPANY
By /s/Warren E. Buffett By /s/Warren E. Buffett
Warren E. Buffett Warren E. Buffett
Chairman of the Board Chairman of the Board
WESCO HOLDINGS MIDWEST THE FECHHEIMER BROTHERS COMPANY
By /s/Warren E. Buffett By /s/Warren E. Buffett
Warren E. Buffett Warren E. Buffett
President Director
NATIONAL LIABILITY & FIRE INSURANCE COMPANY, NEBRASKA FURNITURE MART, INC.,
REDWOOD FIRE AND CASUALTY INSURANCE COMPANY, NATIONAL INDEMNITY COMPANY OF MID-
AMERICA, OAK RIVER INSURANCE COMPANY, CYPRESS INSURANCE COMPANY, WESCO FINANCIAL
CORPORATION, BLUE CHIP STAMPS AND WESCO-FINANCIAL INSURANCE COMPANY
By /s/Warren E. Buffett
Warren E. Buffett
Attorney-in-Fact
<PAGE>
Page 23 of 49
CUSIP No. 911905 10 7
EXHIBIT A
AGREEMENT FOR EXCHANGE OF STOCK
-------------------------------
AGREEMENT FOR EXCHANGE OF STOCK ("Agreement") dated August 15, 1997 by
and between Berkshire Hathaway Inc. ("BHI"), both for itself and on behalf of
the affiliates of BHI listed on Schedule A hereto (each a "Holder" and,
collectively, the "Holders"), and US Airways Group, Inc., a Delaware corporation
(the "Company").
RECITALS:
--------
WHEREAS, the Holders collectively own three-hundred and fifty-eight
thousand (358,000) shares of Series A Cumulative Convertible Preferred Stock
(the "Series A Shares") of the Company convertible into shares of Common Stock
pursuant to the terms contained in the certificate of designation for the Series
A Shares, dated August 7, 1989;
WHEREAS, subject to the terms and conditions set forth herein, the
parties have agreed that each of the Holders shall exchange the Series A Shares
owned by it, as set forth in Schedule A, for shares of a new issue of Series H
Senior Cumulative Convertible Preferred Stock of the Company (the "Series H
Shares") convertible into Common Stock pursuant to the certificate of
designation of the Series H Shares, attached hereto as Exhibit A;
WHEREAS, in exchange for consideration received pursuant to this
Agreement, the Company has agreed to amend the letter agreement dated August 7,
1989 between the Company and BHI (the "Letter Agreement") and waive a provision
of such Letter Agreement, as set forth herein;
WHEREAS, this Agreement is intended to effectuate a non-recognition
exchange of the Series A Shares for the Series H Shares under the Internal
Revenue Code of 1986, as amended; and
WHEREAS, the Company intends to issue a Notice of Redemption for the
$437.50 Series B Cumulative Convertible Preferred Stock of the Company (the
"Series B Shares"), which action is expected to result in the conversion of all
or substantially all of the Series B Shares into shares of common stock, par
value $1.00 per share, of the Company (the "Common Stock"), and the parties
hereto believe that such conversion will be beneficial to the Company and its
shareholders.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements hereinafter set forth, intending to be legally bound
hereby, the parties hereto agree as follows:
1. EXCHANGE OF STOCK, CLOSING, AND RELATED MATTERS.
-----------------------------------------------
1.1 Exchange. Subject to the terms and conditions of this Agreement,
--------
each of the Holders agrees to exchange with the Company all of the Series A
Shares held by it for an equal number of Series H Shares.
1.2 Closing. The exchange referred to in Section 1.1 shall take
-------
place upon execution of this Agreement, at which time and upon receipt of the
certificates for the Series A Shares which shall be submitted to the Company for
cancellation, the Company shall cause the appropriate number of Series H Shares
to be issued to each of the Holders.
<PAGE>
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CUSIP No. 911905 10 7
1.3 Issuance of Series H Shares. Each of the Holders hereby
---------------------------
consents to the creation and issuance of the Series H Shares.
1.4 Company Opinion. Each of the Holders hereby acknowledges (i)
----------------
receipt from the Company of an opinion dated the date hereof substantially in
the form attached as Exhibit B hereto and (ii) receipt from Skadden, Arps,
Slate, Meagher & Flom LLP, special counsel to the Company, of an opinion dated
the date hereof substantially in the form attached as Exhibit C hereto.
1.5 BHI Opinion. The Company hereby acknowledges receipt from
-----------
Munger, Tolles & Olson LLP, special counsel to BHI, of an opinion dated the date
hereof substantially in the form attached as Exhibit D hereto.
2. AMENDMENT OF LETTER AGREEMENT. As consideration for BHI's and each of
-----------------------------
the Holders' consent to enter into this Agreement, the parties hereby agree to
amend the Letter Agreement as follows:
2.1 Section 1(b)(iv) of the Letter Agreement ia hereby deleted and
replaced by the following new Section 1(b)(iv):
(iv) that, except following a "Change in Control" or a "Prospective
Change in Control" (as such terms are defined in the Certificate of
Designation for the Series H Preferred Stock) and except for sales made
into a tender offer or exchange offer for all of the Company's common
stock, Purchaser will not sell any Company securities representing more
than 3% of the general voting power of the Company's Voting Securities
outstanding at the time of the sale to any one entity (or group known by
Purchaser to be acting in concert), and will not sell any Company
securities to any one entity (or group acting in concert) which (i) at the
time of sale has on file with the Securities and Exchange Commission a
Schedule 13D with respect to the Company's Voting Securities disclosing
that such entity (or such group) beneficially owns more than 5% of the
Company's Voting Securities, or (ii) is otherwise known by Purchaser to be
the beneficial owner directly or indirectly of more than 5% of the
Company's Voting Securities; provided, however, that in the event of a
-------- -------
"Change in Control" described in paragraph (b) under the definition of
"Change in Control" in the Certificate of Designation or in the event of
a "Prospective Change in Control" the exception from Purchaser's
obligations under this subparagraph shall only extend to sales into the
tender offer or exchange offer that occasioned the "Change in Control" or
"Prospective Change in Control" or into another tender offer or exchange
offer for all of the Company's common stock; and provided further that
-------- -------
Purchaser will in no event sell any of the Company securities owned by
Purchaser during the pendency of a tender or exchange offer that has not
occasioned a "Change in Control" or "Prospective Change in Control" (as
defined in the Certificate of Designation) unless such tender or exchange
offer shall have subsequently occasioned a "Change in Control" or
"Prospective Change in Control" or such offer shall be for all of the
Company's common stock and in the case of any sales permitted by this
proviso only into such a tender offer or exchange offer; and
2.2 All references to Series A Cumulative Convertible Preferred Stock
are hereby deleted and replaced with references to Series H Senior Cumulative
Convertible Preferred Stock, other than any such references contained in the
first paragraph of Section (1), in Section (2) or in Section (4) of the Letter
Agreement.
<PAGE>
Page 25 of 49
CUSIP No. 911905 10 7
3. WAIVER OF PROVISION IN LETTER AGREEMENT. The Company hereby
----------------------------------------
irrevocably waives its rights and irrevocably releases BHI and the Holders from
their obligations set forth in subsection 1(b)(v) of the Letter Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
---------------------------------------------
The Company hereby represents and warrants to BHI and each of the
Holders that:
4.1 The Company has the requisite corporate power and authority to
execute, deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement.
4.2 The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
4.3 As of the date of this Agreement, the authorized capital stock of
the Company consists of 150,000,000 shares of common stock, $1.00 par value (the
"Common Shares"), 5,000,000 shares of preferred stock, without par value, of
which 358,000 are designated Series A Cumulative Convertible Preferred Stock
(the "Series A Preferred Shares") and 46,000 are designated Series B Cumulative
Convertible Preferred Stock (the "Series B Preferred Stock") and 3,000,000
shares of senior preferred stock, without par value. The Series B Preferred
Stock is represented by Depositary Shares (the "Series B Depositary Preferred
Shares" and, together with the Common Shares and the Series A Preferred Stock,
the "Capital Shares"), each Depositary Share representing 1/100 of a share of
Series B Preferred Stock. As of the date of this Agreement, 80,111,000 Common
Shares, 358,000 Series A Preferred Shares, 42,625 Series B Depositary Preferred
Shares and no shares of the senior preferred stock are issued and outstanding.
All Capital Shares have been duly authorized and validly issued and are fully
paid and nonassessable.
4.4 This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
effecting creditors rights generally and by principles of equity.
4.5 The execution of this Agreement by the Company does not, and the
performance by the Company of its obligations hereunder will not, constitute a
violation of, conflict with or result in a default under any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which the Company is a party or by which the Company is bound or any judgment,
decree or order applicable to the Company.
4.6 Neither the execution and delivery of this Agreement nor the
performance by the Company of its obligations hereunder will violate any
provision of law applicable to the Company or require any consent or approval
of, or filing with or notice to, any public body or authority under any
provision of law applicable to the Company.
4.7 There are no actions, proceedings or investigations pending, or
to the Company' knowledge, threatened against the Company, which would
materially adversely affect the Company's ability to perform its obligations
under this Agreement.
<PAGE>
Page 26 of 49
CUSIP No. 911905 10 7
4.8 The Series H Shares to be delivered to each of the Holders will
be validly issued and outstanding, fully paid and nonassessable, free from pre-
emptive and other similar rights and free and clear of any security interests,
liens, claims, options, proxies, voting agreements, charges or encumbrances of
whatever nature other than the Letter Agreement as amended.
4.9 The Company's Rights Agreement, dated as of June 29, 1989, with
the Chase Manhattan Bank, N.A. expired as of June 29, 1996 and is of no further
effect and no similar rights agreement has been entered into by the Company or
is currently in effect.
4.10 As of the date of this Exchange Agreement, each Series A Share
is convertible into the number of shares of Company Common Stock equal to the
quotient of 9,239,944 divided by 358,000 with fractions to be paid in cash,
pursuant to the terms of and after giving effect to all adjustments required by
the Certificate of Designation governing the Series A Shares. The Company has
delivered all notices to BHI and the Holders required under Section 9 of the
Certificate of Designation governing the Series A Shares.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BHI.
------------------------------------------------
BHI represents, warrants and covenants to the Company as follows:
5.1 BHI has the requisite corporate power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and the
transactions contemplated hereby, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement.
5.2 This Agreement has been duly and validly authorized, executed and
delivered by BHI, and constitutes a valid and binding obligation of BHI,
enforceable against BHI in accordance with its terms, except as enforcement may
be limited by applicable bankruptcy, insolvency or similar laws effecting
creditors rights generally and by principles of equity.
5.3 The execution of this Agreement by BHI does not, and the
performance by BHI of its obligations under this Agreement will not, constitute
a violation of, conflict with or result in a default under any contract,
commitment, agreement, understanding, arrangement or restriction of any kind to
which BHI is a party or by which BHI is bound or any judgment, decree or order
applicable to BHI.
5.4 Neither the execution and delivery of this Agreement nor the
performance by BHI of its obligations under this Agreement will violate any
provision of law applicable to BHI or require any consent or approval of, or
filing with or notice to, any public body or authority under any provision of
law applicable to BHI.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH OF THE HOLDERS.
----------------------------------------------------------------
Each of the Holders represents, warrants and covenants to the Company
as follows:
6.1 It has the requisite corporate power and authority to carry out
the terms and provisions of this Agreement and the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the
performance of this Agree ment and the execution and delivery of this Agreement
by BHI on its behalf.
<PAGE>
Page 27 of 49
CUSIP No. 911905 10 7
6.2 This Agreement has been duly and validly authorized by it, duly
and validly executed and delivered on its behalf by BHI and constitutes a valid
and binding obligation of it, enforceable against it in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy, insolvency
or similar laws effecting creditors rights generally and by principles of
equity.
6.3 It is the beneficial owner of, and has good and valid title with
respect to, the Series A Shares set forth opposite its name on Schedule A
hereto, and there exist no security interests, liens, claims, options, proxies,
voting agreements, charges or encumbrances of whatever nature affecting the
Series A Shares owned by it other than the Letter Agreement as amended.
6.4 The execution of this Agreement by BHI on its behalf does not,
and the performance by it of its obligations under this Agreement will not,
constitute a violation of, conflict with or result in a default under any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which it is a party or by which it is bound or any judgment, decree
or order applicable to it.
6.5 Neither the execution and delivery of this Agreement by BHI on
its behalf nor the performance by it of its obligations under this Agreement
will vio late any provision of law applicable to it or require any consent or
approval of, or filing with or notice to, any public body or authority under any
provision of law applicable to it.
7. MISCELLANEOUS.
-------------
7.1 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties regarding the subject matter hereof, superseding
any and all prior agreements or understandings (provided that this Agreement
does not supersede the Letter Agreement except as set forth in Section 2
hereof), and may not be amend ed or terminated except by an instrument signed by
the parties hereto.
7.2 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware.
7.3 Assignment. This Agreement shall not be assigned by any party
----------
without the prior written consent of the other parties. Nothing in this
Agreement is intended to confer upon any person, other than the parties hereto,
their permitted assigns and successors, any rights or remedies under or by
reason of this Agreement.
7.4 Expenses. The parties shall pay their respective expenses of the
--------
transactions herein contemplated.
7.5 Waiver. No waiver by any party hereto, whether express or
------
implied, of its rights under any part of this Agreement shall constitute a
waiver of such party's rights under such provision at any other time or a waiver
of such party's rights under any provision of this Agreement. No failure by any
party hereto to take any action with respect to any breach of this Agreement or
default by another party hereto shall constitute a waiver of the former party's
right to enforce any provision of this Agreement or to take action with respect
to such breach or default or any subsequent breach or default by such other
party.
7.6 Notices. Any notice or other communication required or permitted
-------
under this Agreement shall be in writing and shall be delivered in person, by
<PAGE>
Page 28 of 49
CUSIP No. 911905 10 7
courier (marked for overnight delivery), by facsimile transmission (with oral
confirmation of receipt) or by certified air mail (postage prepaid, return
receipt requested, if available). Any such notice shall be deemed given (i) if
delivered in person or by facsimile transmission, upon receipt, (ii) if mailed,
five (5) business days after the date of deposit in the mails, and (iii) if sent
by overnight courier marked for overnight delivery, two (2) business days after
the date of delivery to the courier service. All such notices shall be sent to
the facsimile number or address (as the case may be) specified below:
If to the Holders: c/o Berkshire Hathaway Inc.
1440 Kiewit Plaza
Omaha, NE 68171
Attn: Chief Financial Officer
cc: Munger, Tolles & Olson LLP
355 S. Grand Ave.
Los Angeles, CA 90071
Attn: R. Gregory Morgan
If to the Company: US Airways Group, Inc.
Crystal Park Four
2345 Crystal Drive
Arlington, VA 22227
Attn: Executive Vice President-
Corporate Affairs and General Counsel
cc: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Ave.
New York, NY 10022
Attn: Peter Allan Atkins, Esq.
Any party may, by notice given in accordance with this Section to the
other parties designate another address or person or entity for receipt of
notices hereunder.
7.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
<PAGE>
CUSIP No. 911905 10 7 Page 29 of 49
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
US AIRWAYS GROUP, INC.
By: /s/ John W. Harper
------------------------
Name: John W. Harper
Title: Senior Vice President
BERKSHIRE HATHAWAY INC.
By: /s/ Marc D. Hamburg
------------------------
Name: Marc D. Hamburg
Title: Vice President
THE HOLDERS
By: Berkshire Hathaway Inc.
on their behalf
By: /s/ Marc D. Hamburg
------------------------
Name: Marc D. Hamburg
Title: Vice President
<PAGE>
Page 30 of 49
CUSIP No. 911905 10 7
Schedule A
<TABLE>
<CAPTION>
Holder Number of Shares
- ------ ----------------
<S> <C>
Nebraska Furniture Mart, Inc. 5,000
The Fechheimer Brothers Company 5,000
National Indemnity Company 250,000
Columbia Insurance Company 73,000
Redwood Fire & Casualty
Insurance Company 3,000
National Indemnity Company
of Mid America 3,000
Cypress Insurance Company 2,000
Wesco-Financial Insurance Company 12,000
National Liability & Fire
Insurance Company 2,000
Oak River Insurance Company 3,000
--------
TOTAL 358,000
</TABLE>
<PAGE>
Page 31 of 49
CUSIP No. 911905 10 7
EXHIBIT B
CERTIFICATE OF DESIGNATION
of
SERIES H SENIOR CUMULATIVE CONVERTIBLE PREFERRED STOCK
of
US AIRWAYS GROUP, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
US Airways Group, Inc., a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in its Restated Certificate
of Incorporation, as amended, and in accordance with the provisions of Section
151 of the General Corporation Law of the State of Delaware, its Board of
Directors (the "Board of Directors") has adopted the following resolution
creating a series of its Preferred Stock, without par value, designated as
Series H Senior Cumulative Convertible Preferred Stock:
RESOLVED, that a series of the class of authorized Senior Preferred Stock,
without par value, of the Corporation be hereby created, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount.
----------------------
The shares of such series shall be designated as the "Series H Senior
Cumulative Convertible Preferred Stock" (the "Series H Preferred Stock") and the
number of shares initially constituting such series shall be 358,000, which
number may be decreased (but not increased) by the Board of Directors without a
vote of stockholders; provided, however, that such number may not be decreased
-------- -------
below the number of then currently outstanding shares of Series H Preferred
Stock.
Section 2. Dividends and Distributions.
---------------------------
(a) The holders of shares of Series H Preferred Stock, in preference
to the holders of shares of the Common Stock, $1 par value (the "Common Stock"),
of the Corporation and of any other capital stock of the Corporation ranking
junior to the Series H Preferred Stock as to payment of dividends, shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds of the Corporation legally available for the payment of dividends,
cumulative dividends payable in cash at the annual rate of $92.50 per share, and
no more, in equal quarterly payments on March 31, June 30, September 30 and
December 31 (or if any of such days is not a Business Day, the Business Day next
preceding such day) in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date", and any dividend not paid on such date being
referred to herein as "past due"), commencing on the first Quarterly Dividend
Payment Date which is at least 10 days after the date of original issue of the
Series H Preferred Stock; provided, however, that if any applicable dividend
-------- -------
payment or redemption payment is not made
<PAGE>
Page 32 of 49
CUSIP No. 911905 10 7
on a Quarterly Dividend Payment Date or the date set for such redemption,
respectively, thereafter all such dividend payments and redemption payments that
are past due and unpaid shall accrue interest at (A) the higher of (x) an annual
rate of 9 1/4% or (y) an annual rate (determined as of each Quarterly Dividend
Payment Date) equal to 5% plus the "prime rate" as reported in The Wall Street
---------------
Journal (or, if not reported therein, as such rate may be from time to time
- -------
publicly announced by The Chase Manhattan Bank) on the date of publication
closest to the date of determination or (B) such lesser rate as may be the
maximum rate that is permitted by applicable law (in either case compounded
quarterly), with the amount of such interest added to accrued dividend payments
or redemption payments, respectively, until all such dividend payments and
redemption payments shall have been paid in full (or declared and funds
sufficient therefor Set Apart for Payment); and provided, further, that in the
-------- -------
case of a redemption payment required to be made pursuant to Section 5(d)
hereof that is not made on the date set for such redemption the interest accrued
pursuant to clause (y) of the previous proviso shall increase each month by an
annual rate of 100 basis points, up to a maximum of 19%, or such lesser rate as
may be the maximum rate that is permitted by applicable law.
(b) Dividends payable pursuant to paragraph (a) of this Section 2
shall begin to accrue and be cumulative from July 1, 1997. The amount of
dividends so payable shall be determined on the basis of twelve 30-day months
and a 360-day year. Accrued but unpaid dividends shall bear interest as
provided in the last proviso of paragraph (a) of this Section 2. Dividends paid
on the shares of Series H Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series H Preferred Stock entitled to receive payment of
a dividend declared thereon, which record date shall be no more than 60 days nor
less than 10 days prior to the date fixed for the payment thereof.
(c) In case the Corporation shall at any time or from time to time
declare, order, pay or make a dividend or other distribution (including, without
limitation, any distribution of stock or other securities or property or rights
or warrants to subscribe for securities of the Corporation or any of its
Subsidiaries by way of dividend or spinoff or Rights) on its Common Stock, other
than (i) dividends payable in cash in an aggregate amount in any fiscal year
which, when declared, are not expected to exceed the net income of the
Corporation during such year from continuing operations before extraordinary
items, as determined in accordance with generally accepted accounting principles
consistently applied in accordance with past practice, or (ii) any dividend or
distribution of shares of Common Stock, then, and in each such case (a
"Triggering Distribution"), the holders of shares of Series H Preferred Stock
shall be entitled to receive from the Corporation, with respect to each share of
Series H Preferred Stock held, the same dividend or distribution received by a
holder of the number of shares of Common Stock into which such share of Series H
Preferred Stock is convertible on the record date for such dividend or
distribution. Any such dividend or distribution shall be declared, ordered, paid
or made on the Series H Preferred Stock at the same time such dividend or
distribution is declared, ordered, paid or made on the Common Stock.
(d) The holders of shares of Series H Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided in
this Certificate of Designation of Series H Senior Cumulative Convertible
Preferred Stock.
<PAGE>
Page 33 of 49
CUSIP No. 911905 10 7
Section 3. Voting Rights.
-------------
In addition to any voting rights provided elsewhere herein and in the
Corporation's Restated Certificate of Incorporation, as it may be amended or
restated from time to time (the "Certificate of Incorporation"), and any voting
rights provided by law, the holders of shares of Series H Preferred Stock shall
have the following voting rights:
(a) Each share of Series H Preferred Stock shall be entitled to the
number of votes equal to the quotient of 9,239,944 divided by 358,000 (the
"Conversion Amount") rounded to the nearest vote, subject to adjustment in the
manner set forth in paragraph (b) of Section 8. Except as otherwise provided
herein, or by the Certificate of Incorporation, or by law, the shares of Series
H Preferred Stock and the shares of Common Stock (and any other shares of
capital stock of the Corporation at the time entitled thereto) shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
(b) So long as any shares of Series H Preferred Stock shall be
outstanding and unless the consent or approval of a greater number of shares
shall then be required by law, without first obtaining the consent or approval
of the holders of at least two-thirds of the number of then-outstanding shares
of Series H Preferred Stock, voting as a single class, given in person or by
proxy at a meeting at which the holders of such shares shall be entitled to vote
separately as a class, or by written consent, the Corporation shall not: (i)
authorize or create any class or series, or any shares of any class or series,
of stock having any preference or priority as to dividends or upon redemption,
liquidation, dissolution, or winding up over the Series H Preferred Stock, or
redeemable prior to the time that the Series H Preferred Stock may be redeemable
pursuant to Section 5 ("Senior Stock"); (ii) authorize or create any class or
series, or any shares of any class or series, of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series H Preferred Stock or redeemable at or prior to the time that the Series H
Preferred Stock may be redeemable pursuant to Section 5 ("Parity Stock"),
provided, however, that no such vote shall be required with respect to the
- -------- -------
authorization or creation by the Corporation of one or more new series of Senior
Preferred Stock or Preferred Stock that is Parity Stock if (A) the aggregate
purchase price (excluding transaction-related expenses) of all shares of such
series is equal to or greater than the aggregate liquidation preference of all
shares of such series, (B) the aggregate liquidation preference (excluding
accrued but unpaid dividends) of all shares of such series of Preferred Stock
does not exceed $150,000,000, and (C) shares of any such new series shall be
issued only to an employee stock ownership plan, employee stock ownership trust
or other similar arrangement organized and maintained by the Corporation for the
benefit of its employees; (iii) reclassify any shares of stock of the
Corporation into shares of Senior Stock or Parity Stock; (iv) authorize any
security exchangeable for, convertible into, or evidencing the right to purchase
any shares of Senior Stock or Parity Stock: (v) amend, alter or repeal the
Certificate of Incorporation to alter or change the preferences, rights or
powers of the Series H Preferred Stock so as to affect the Series H Preferred
Stock adversely or to increase the authorized number of shares of Series H
Preferred Stock; or (vi) effect the voluntary liquidation, dissolution or
winding up of the Corporation, or the sale, lease, conveyance or exchange of all
or substantially all of the assets, property or business of the Corporation, or
the merger or consolidation of the Corporation with or into any other
corporation; provided, however, that no separate vote of the holders of the
-------- -------
Series H Preferred Stock as a class shall be required in the case of a merger or
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CUSIP No. 911905 10 7
consolidation or a sale, lease, conveyance or exchange of all or substantially
all of the assets, property or business of the Corporation (such transactions
being hereinafter in this proviso referred to as a "reorganization") if (A) the
resulting, surviving or acquiring corporation will have after such
reorganization no stock either authorized or outstanding ranking prior to, or on
a parity with, the Series H Preferred Stock or the stock of the resulting,
surviving or acquiring corporation issued in exchange therefor (except such
stock of the Corporation as may have been authorized or outstanding immediately
preceding such reorganization, or such stock of the resulting, surviving or
acquiring corporation containing substantially the same relative rights and
preferences as the stock of the Corporation for which it may be exchanged
("Exchanged Stock"), which Exchanged Stock was outstanding immediately preceding
such reorganization and at such time ranked prior to, or on a parity with, the
Series H Preferred Stock) and (B) each holder of shares of Series H Preferred
Stock immediately preceding such reorganization will receive in exchange
therefor the same number of shares of stock, with substantially the same
preferences, rights and powers, of the resulting, surviving, or acquiring
corporation or the Corporation is the surviving corporation and the Series H
Preferred Stock remains outstanding without change to its preferences, rights
and powers, provided that nothing in this proviso shall require that such other
stock or Series H Preferred Stock have any rights upon conversion save those
specified in Section 8(b)(iii) hereof.
(c) Whenever (i) dividends payable on shares of the Series H Preferred
Stock pursuant to the terms of paragraphs (a) and (b) of Section 2 shall have
been in arrears and not paid in full at or before thirty (30) days following any
Quarterly Dividend Payment Date (a "Dividend Default"), thereafter and until all
such dividends shall have been paid in full or declared and Set Apart for
Payment, or (ii) the Corporation shall have violated any of the covenants
contained in Section 4 and such violation shall be continuing, or (iii) the
Corporation shall have not redeemed shares of Series H Preferred Stock within
five (5) Business Days of the date such redemption is required by Section 5 (a
"Redemption Default"), thereafter and until such redemption shall have been
performed or all funds necessary therefor Set Apart for Payment, or (iv) the
Corporation shall have not distributed any dividend or other distribution
distributable to the holders of shares of Series H Preferred Stock pursuant to
the terms of paragraph (c) of Section 2 within five (5) Business Days of the
date such distribution is required by paragraph (c) of Section 2 (a
"Distribution Default"), thereafter and until such distribution shall have been
made, the holders of shares of Series H Preferred Stock shall have the right,
notwithstanding anything to the contrary in the Corporation's Certificate of
Incorporation or By-Laws, voting together as a single class, to elect two
directors. Such right of the holders of Series H Preferred Stock to vote for
the election of directors may be exercised at any annual meeting or at any
special meeting called for such purpose as hereinafter provided or at any
adjournment thereof, or by the written consent, delivered to the Secretary of
the Corporation, of the holders of a majority of all outstanding shares of
Series H Preferred Stock as of the record date of such written consent, until
any Dividend Default, Redemp tion Default and Distribution Default shall have
been cured, and any covenant violation shall cease to be continuing, at which
time the term of office of the directors so elected shall terminate
automatically. So long as such right to vote continues (and unless such right
has been exercised by written consent of the holders of a majority of the
outstanding shares of Series H Preferred Stock as hereinabove authorized), the
Secretary of the Corporation may call, and upon the written request of the
holders of record of a majority of the outstanding shares of Series H Preferred
Stock addressed to him at the principal office of the Corporation shall call, a
special meeting of the holders of such shares for the election of such
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CUSIP No. 911905 10 7
directors as provided herein. Such meeting shall be held within 30 days after
delivery of such request to the Secretary, at the place and upon the notice
provided by law and in the By-Laws or in the notice of meeting for the holding
of meetings of stockholders. No such special meeting or adjournment thereof
shall be held on a date less than 30 days before an annual meeting of
stockholders or any special meeting in lieu thereof. If at any such annual or
special meeting or any adjournment thereof the holders of a majority of the
then outstanding shares of Series H Preferred Stock entitled to vote in such
election shall be present or represented by proxy, or if the holders of a
majority of the outstanding shares of Series H Preferred Stock shall have acted
by written consent in lieu of a meeting with respect thereto, then the
authorized number of directors shall be increased by two and the holders of the
Series H Preferred Stock shall be entitled to elect such additional directors.
The absence of a quorum of the holders of any other class or series of capital
stock of the Corporation at any such annual or special meeting shall not affect
the exercise by the holders of the Series H Preferred Stock of such voting
rights. Directors so elected shall serve until the next annual meeting or until
their successors shall be elected and shall qualify, unless the term of office
of the persons so elected as directors shall have terminated under the
circumstances set forth in the second sentence of this paragraph (c). In case
of any vacancy occurring among the directors elected by the holders of the
Series H Preferred Stock as a class, the remaining director who shall have been
so elected may appoint a successor to hold office for the unexpired term of the
director whose place shall be vacant. If both directors so elected by the
holders of Series H Preferred Stock as a class shall cease to serve as directors
before their terms shall expire, the holders of the Series H Preferred Stock
then outstanding and entitled to vote for such directors may, by written consent
as hereinabove provided, or at a special meeting of such holders called as
provided above, elect successors to hold office for the unexpired terms of the
directors whose places shall be vacant. After the holders of Series H Preferred
Stock shall have exercised their right to elect directors pursuant to the terms
of this paragraph (c), the authorized number of directors shall not be increased
or decreased, regardless of the terms of any Junior Stock, or decreased,
regardless of the terms of any other stock of the Corporation, except by a class
vote of the holders of Series H Preferred Stock as provided above. The rights of
the holders of Series H Preferred Stock to elect directors pursuant to the terms
of this paragraph (c) shall not be adversely affected by the voting or other
rights applicable to any other security of the Corporation. Notwithstanding
anything to the contrary in this paragraph (c), the directors elected or
appointed pursuant to this paragraph (c) as a result of a Dividend Default shall
not be elected or appointed until they have been approved by the Corporation,
such approval not to be unreasonably withheld or delayed.
(d) Except as provided in this Certificate of Designation of Series H
Senior Cumulative Convertible Preferred Stock (including, without limitation,
the right to vote with the Common Stock on all matters submitted to a vote of
stockholders of the Corporation as set forth in paragraph (a) of this Section 3)
or in the Certificate of Incorporation, or as required by law, the holders of
shares of Series H Preferred Stock shall have no voting rights and their consent
shall not be required for the taking of any corporate action.
Section 4. Certain Restrictions.
--------------------
(a) Whenever (i) a Dividend Default has occurred, thereafter and until
all accrued and unpaid dividends, whether or not declared, shall have been paid
in full or declared and Set Apart for Payment, or (ii) a Distribution Default
has occurred, thereafter and until all dividends or other distributions dis-
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CUSIP No. 911905 10 7
tributable pursuant to the terms of paragraph (c) of Section 2 shall have been
distributed, or (iii) a Redemption Default has occurred, thereafter and until
all mandatory redemption payments shall have been made or all necessary funds
shall have been Set Apart for Payment, the Corporation shall not, nor shall it
permit any of its Subsidiaries to: (A) declare or pay dividends, or make any
other distributions, on any shares of Common Stock or other capital stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series H Preferred Stock, other than dividends or
distributions payable in Junior Stock or in Rights; (B) declare or pay
dividends, or make any other distributions, on any shares of Parity Stock, other
than dividends or distributions payable in Junior Stock or Rights, except
dividends paid ratably on the Series H Preferred Stock and all Parity Stock on
which dividends are payable or in arrears, in proportion to the total amounts to
which the holders of all such shares are then entitled; (C) redeem or purchase
or otherwise acquire for consideration (other than Junior Stock) any shares of
Junior Stock or Parity Stock (other than, with respect to Parity Stock, ratably
with the Series H Preferred Stock); or (D) purchase or otherwise acquire for
consideration any shares of Series H Preferred Stock; provided, however, that
-------- -------
the Corporation may redeem shares of the Series H Preferred Stock pursuant to
Section 5 hereof and may purchase Series H Preferred Stock offered for sale to
the Corporation.
(b) Notwithstanding the foregoing, nothing herein shall prevent the
Corporation from (i) declaring a dividend or distribution of Rights (subject to
compliance with paragraph (c) of Section 2), or issuing Rights in connection
with the issuance of Junior Stock, Parity Stock or the Series H Preferred Stock
or (ii) redeeming Rights at a price not to exceed $.03 per Right.
(c) The Corporation shall not permit any Subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of capital stock
of the Corporation unless the Corporation could, pursuant to paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Redemption.
----------
(a) On August 7, 1999 (if any shares of Series H Preferred Stock
remain outstanding), the Corporation shall redeem all outstanding shares of
Series H Preferred Stock, by paying therefor in cash $1,000 per share plus all
Accrued Dividends thereon to the date of redemption.
(b) The Corporation shall have no right to redeem any share of Series
H Preferred Stock prior to March 15, 1998.
(c) On and after March 15, 1998, the Corporation shall have the right,
at its sole option and election, to redeem, at any time, all (but not less than
all) of the outstanding shares of Series H Preferred Stock by paying therefor in
cash $1,150 per share plus all Accrued Dividends thereon to the date of
redemption.
(d) In the event there occurs a Change in Control, any holder of
shares of Series H Preferred Stock may require the Corporation to redeem all
(but not less than all) of the shares of Series H Preferred Stock held by such
holder at a price equal to, at the sole option and election of the holder,
either, (i) $1,000 per share, or (ii) an amount per share equal to the Event
Price of the shares of
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CUSIP No. 911905 10 7
Common Stock into which such share of Series H Preferred Stock is then
convertible, plus, in either case, all Accrued Dividends thereon to the date of
redemption.
(e) In the event that the Corporation shall redeem, repurchase,
exchange any security or property for, or otherwise acquire for consideration
any shares of Common Stock (excluding any transaction to which clause (b)(iii)
of Section 8 hereof applies) at a price equal to or greater than the Conversion
Price, then, and in each such case, any holder of shares of Series H Preferred
Stock may require the Corporation, at the sole option and election of the
holder, to redeem a number of shares of such holder's Series H Preferred Stock
which does not exceed the product (rounded, upward or downward, to the nearest
whole share) of (A) the percentage (expressed as a decimal) of the Corporation's
Common Stock outstanding immediately prior to the acquisition that the
Corporation acquired through redemption, repurchase, exchange or otherwise,
multiplied by (B) the total number of shares of Series H Preferred Stock held by
such holder, at a price per share equal to the sum of (X) the product of (1) the
number of shares of the Corporation's Common Stock into which a share of the
Series H Preferred Stock is convertible immediately prior to such redemption,
repurchase, exchange or other acquisition, multiplied by (2) the per share price
(or the Fair Market Value in the event of non-cash consideration) paid for a
share of Common Stock in such redemption, repurchase, exchange or other
acquisition, plus (Y) all Accrued Dividends thereon to the date of redemption.
(f)(i) Notice of any redemption of shares of Series H Preferred Stock
pursuant to paragraphs (a), (b) or (c) of this Section 5 shall be given by
publication in a newspaper of general circulation in the Borough of Manhattan
not less than thirty nor more than sixty days prior to the date fixed for
redemption, if the Series H Preferred Stock is listed on any national securities
exchange or traded in the over-the-counter market; and, in any case, a similar
notice shall be mailed not less than thirty, but not more than sixty, days prior
to such date to each holder of shares of Series H Preferred Stock to be
redeemed, at such holder's address as it appears on the transfer books of the
Corporation. In order to facilitate the redemption of shares of Series H
Preferred Stock, the Board of Directors may fix a record date for the
determination of shares of Series H Preferred Stock to be redeemed, not more
than sixty days or less than thirty days prior to the date fixed for such
redemption.
(ii) Until any record holder of shares of Series H Preferred Stock
shall have notified the Corporation in writing that notices of events which,
pursuant to paragraphs (d) or (e) of this Section 5, give the holder or holders
the right to require the Corporation to redeem any of such shares should be
given by the Corporation in accordance with the terms of subparagraph (iii)
below, notice of an event which, pursuant to paragraphs (d) or (e) of this
Section 5 gives the holder or holders the right to require the Corporation to
redeem any of such shares, shall be given by telex or telecopy to the holders of
the Series H Preferred Stock sufficiently in advance of such event that such
holders can, by similar telexed or telecopied notice in advance of the event,
elect to have such shares of Series H Preferred Stock eligible for redemption
and so held redeemed by the Corporation, and if such an election is made the
Corporation shall redeem the number of shares so specified concurrently with the
event. It is the intent of the Corporation in the circumstances described in
the preceding sentence to provide notice and the opportunity for redemption at
the earliest possible time, so that if it is not possible to provide notice in
advance of a specified event, notice shall be given as soon as possible
thereafter so that the holder or holders, if they elect to redeem, will be
entitled to redeem, and the Corporation will effect redemption of the shares
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CUSIP No. 911905 10 7
specified, as soon as possible thereafter. Any election by a holder to redeem
pursuant to paragraphs (d) and (e) of this Section 5, specifying the number of
shares to be redeemed, must be made in writing (which may be telexed,
telecopied, or otherwise delivered) within the later of (A) fifteen (15)
Business Days following receipt by the holder of the telexed or telecopied
notice required by this subparagraph, or (B) in the event of a tender or
exchange offer, the consummation of such offer, and the redemption date shall be
no later than the day following receipt by the Corporation of such election.
Failure of the Corporation to give any notice required by this subparagraph
(ii), or the formal insufficiency of any such notice, shall not prejudice the
rights of any holders of shares of Series H Preferred Stock to cause the
Corporation to redeem any such shares held by them.
(iii) If any record holder of shares of Series H Preferred Stock
shall have notified the Corporation in writing that notice of redemption
pursuant to paragraphs (d) or (e) of this Section 5 should be given by the
Corporation in accordance with the terms of this subparagraph (iii), rather than
in accordance with the terms of subparagraph (ii) above, then and thereafter, on
the date of an event giving a holder of shares of Series H Preferred Stock the
right, pursuant to paragraphs (d) or (e) of this Section 5, to require the
Corporation to redeem any of such shares, the Corporation shall give notice by
mail to each holder of Series H Preferred Stock, at such holder's address as it
appears on the transfer books of the Corporation, of such event, which notice
shall set forth each holder's right to require the Corporation to redeem any or
all shares of Series H Preferred Stock held by him which are eligible for
redemption pursuant to the terms of paragraphs (d) or (e), the redemption date
(which date shall be twenty (20) days following the date of such mailed notice),
and the procedures to be followed by such holder in exercising his right to
cause such redemption; and, as soon as practical, if the Series H Preferred
Stock is listed on any national securities exchange or traded in the over-the-
counter market, a similar notice shall be given by publication in a newspaper of
general circulation in the Borough of Manhattan. In the event a record holder
of shares of Series H Preferred Stock shall elect to require the Corporation to
redeem any or all such shares of Series H Preferred Stock pursuant to paragraphs
(d) or (e) of this Section 5, such holder shall deliver within twenty (20)
calendar days of the mailing to him of the Corporation's notice described in
this subparagraph (iii), a written notice to the Corporation so stating,
specifying the number of shares to be redeemed pursuant to paragraphs (d) or (e)
of this Section 5. The Corporation shall, in accordance with the terms hereof,
redeem the number of shares so specified on the date fixed for redemption.
Failure of the Corporation to give any notice required by this subparagraph
(iii), or the formal insufficiency of any such notice, shall not prejudice the
rights of any holders of shares of Series H Preferred Stock to cause the
Corporation to redeem any such shares held by them.
(iv) Notice having been given pursuant to paragraph (f) of this
Section 5, from and after the date specified therein as the date of redemption,
unless default shall be made by the Corporation in providing for the payment of
the applicable redemption price, all dividends on the Series H Preferred Stock
thereby called for redemption shall cease to accrue, and from and after the date
of redemption so specified, unless default shall be made by the Corporation as
aforesaid, or from and after the date (prior to the date of redemption so
specified) on which the Corporation shall provide for the payment of the
redemption price by depositing the requisite amount of moneys (and other
property, if applicable) with a bank or trust company doing business in the
Borough of Manhattan, The City of New York, and having a capital and surplus of
at least $50,000,000, provided that the notice of redemption shall state the
--------
intention of the Corporation to deposit such moneys (and other property, if
applicable) on a date in such notice specified, all
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CUSIP No. 911905 10 7
rights of the holders thereof as stockholders of the Corporation, except the
right to receive the applicable redemption price (but without interest) and
except the right to exercise any privileges of conversion, shall cease and
terminate. Any interest allowed on moneys so deposited shall be paid to the
Corporation. Any moneys (and other property, if applicable) so deposited which
shall remain unclaimed by the holders of such Series H Preferred Stock at the
end of six years after the redemption date shall become the property of, and be
paid by such bank or trust company to, the Corporation. If the Corporation
shall default in providing for the redemption price as required pursuant to this
Section 5, interest on such redemption price shall accrue and be added to the
required redemption payments as provided in paragraph (a) of Section 2. Except
for any amounts deposited in payment of Accrued Dividends, in the event that
moneys are deposited pursuant to this paragraph in respect of shares of Series H
Preferred Stock that are converted in accordance with the provisions of Section
8, such moneys shall, upon such conversion revert to the general funds of the
Corporation, and upon demand, such bank or trust company shall pay over to the
Corporation such moneys and shall be relieved of all responsibility to the
holders of such converted shares in respect thereof.
Section 6. Reacquired Shares.
-----------------
Any shares of Series H Preferred Stock converted, redeemed, purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof, and, if necessary to
provide for the lawful redemption or purchase of such shares, the capital
represented by such shares shall be reduced in accordance with the General
Corporation Law of the State of Delaware. All such shares shall upon their
cancellation become authorized but unissued shares of Senior Preferred Stock,
without par value, of the Corporation and may be reissued as part of another
series of Senior Preferred Stock, without par value, of the Corporation subject
to the conditions or restrictions on authorizing or creating any class or
series, or any shares of any class or series, set forth in paragraph (b) of
Section 3.
Section 7. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) If the Corporation shall adopt a plan of liquidation or of
dissolution, or commence a voluntary case under the Federal bankruptcy laws or
any other applicable state or Federal bankruptcy, insolvency or similar law, or
consent to the entry of an order for relief in any involuntary case under any
such law or to the appointment of a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of the Corporation or of any
substantial part of its property, or make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due and on account of such event the Corporation shall liquidate,
dissolve or wind up, or upon any other liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (i) to the holders of shares of
Junior Stock, unless, prior thereto, the holders of shares of Series H Preferred
Stock shall have received $1,000 per share plus all Accrued Dividends thereon to
the date of such payment or (ii) to the holders of shares of Parity Stock,
except distributions made ratably on the Series H Preferred Stock and all such
Parity Stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up of the
Corporation.
(b) Neither the consolidation, merger or other business combination of
the Corporation with or into any other Person or Persons nor the sale, lease,
exchange or conveyance of all or any part of the property, assets or business of
the
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CUSIP No. 911905 10 7
Corporation to a Person or Persons other than the holders of the Corporation's
Junior Stock, shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 7.
Section 8. Conversion.
----------
Each share of Series H Preferred Stock may, at the option of the holder
thereof, be converted into shares of Common Stock, on the terms and conditions
set forth in this Section 8, at any time.
(a) Subject to the provisions for adjustment hereinafter set forth,
each share of Series H Preferred Stock shall be convertible in the manner
hereinafter set forth into the number of fully paid and nonassessable shares of
Common Stock equal to the Conversion Amount rounded to the nearest share.
(b) The number of shares of Common Stock into which each share of
Series H Preferred Stock is convertible, and the number of votes to which the
holder of a share of Series H Preferred Stock is entitled pursuant to paragraph
(a) of Section 3, shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall at any time or from time to time
declare a dividend, or make a distribution, on the outstanding shares of Common
Stock in shares of Common Stock or subdivide or reclassify the outstanding
shares of Common Stock into a greater number of shares or combine or reclassify
the outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then, and in each such case,
(A) the number of shares of Common Stock into which each
share of Series H Preferred Stock is convertible shall be adjusted so that the
holder of each share thereof shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock which the holder of a share of
Series H Preferred Stock would have been entitled to receive after the happening
of any of the events described above had such share been converted immediately
prior to the happening of such event or the record date therefor, whichever is
earlier;
(B) the number of votes to which a holder of a share of Series
H Preferred Stock is entitled pursuant to paragraph (a) of Section 3 shall be
adjusted so that, after the happening of any of the events described above, such
holder shall be entitled to a number of votes equal to (I) the number of votes
to which such holder was entitled pursuant to paragraph (a) of Section 3
immediately prior to such happening multiplied by (II) a fraction, the numerator
of which is the number of shares of Common Stock into which one share of Series
H Preferred Stock was convertible immediately after such happening and the
denominator of which is the number of shares of Common Stock into which one
share of Series H Preferred Stock was convertible immediately prior to such
happening; and
(C) an adjustment made pursuant to this clause (i) shall
become effective (I) in the case of any such dividend or distribution, (1)
immediately after the close of business on the record date for the determination
of holders of shares of Common Stock entitled to receive such dividend or
distribution, for purposes of subclause (A), and (2) immediately after the close
of business on the date of payment of such dividend or distribution, for
purposes of subclause (B), or (II) in the case of any such subdivision,
reclassification or combination, at the close of business on the day upon which
such corporate action becomes effective, for purposes of both subclause (A) and
subclause (B).
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CUSIP No. 911905 10 7
(ii) In case the Corporation shall issue shares of Common Stock
(or rights or warrants or other securities convertible into or exchangeable for
shares of Common Stock) at a price per share (or having an exercise or
conversion price per share) less than the Conversion Price as of the date of
issuance of such shares (or of such rights, warrants or other convertible
securities), other than (X) in a transaction to which paragraph (c) of Section 2
or subparagraph (i) of this paragraph (b) is applicable, (Y) pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation, and the investment of additional option amounts,
in shares of Common Stock, in any such case at a price per share of not less
than 95% of the current market price (determined as provided in such plans) per
share of Common Stock, or pursuant to any employee benefit plan or program of
the Corporation or pursuant to the Rights, or (Z) as consideration for the
acquisition of a business, then, and in each such case,
(A) the number of shares of Common Stock into which each share
of Series H Preferred Stock is convertible shall be adjusted so that the holder
of each share thereof shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying the number of
shares of Common Stock into which such share was convertible on the day
immediately prior to such date of issuance by a fraction, (I) the numerator of
which is the sum of (1) the number of shares of Common Stock outstanding on such
date and (2) the number of additional shares of Common Stock issued (or into
which the convertible securities may convert), and (II) the denominator of which
is the sum of (1) the number of shares of Common Stock outstanding on such date
and (2) the number of shares of Common Stock which the aggregate consideration
receivable by the Corporation for the total number of shares of Common Stock so
issued (or into which the convertible securities may convert) would purchase at
the Conversion Price on such date. For purposes of this subparagraph, the
aggregate consideration receivable by the Corporation in connection with the
issuance of shares of Common Stock or of securities convertible into shares of
Common Stock shall be deemed to be equal to the sum of the net offering price
(after deduction of underwriting discounts or commissions and expenses payable
to third parties) of all such securities plus the minimum aggregate amount, if
any, payable upon conversion of any such convertible securities into shares of
Common Stock;
(B) the number of votes to which a holder of a share of Series
H Preferred Stock is entitled pursuant to paragraph (a) of Section 3 shall be
adjusted so that, after the happening of any of the events described above, such
holder shall be entitled to a number of votes equal to (I) the number of votes
to which such holder was entitled pursuant to paragraph (a) of Section 3
immediately prior to such happening multiplied by (II) a fraction, the numerator
of which is the number of shares of Common Stock into which one share of Series
H Preferred Stock was convertible immediately after such happening and the
denominator of which is the number of shares of Common Stock into which one
share of Series H Preferred Stock was convertible immediately prior to such
happening; and
(C) such adjustment shall become effective immediately after
the date of such issuance for purposes of subclauses (A) and (B).
(iii) In case the Corporation shall be a party to any transaction
(including, without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation or recapitalization
of the Common Stock and excluding any transaction to which clause (i) or (ii) of
this paragraph (b) applies) in which the previously outstanding Common Stock
shall be changed into or, pursuant to the operation of law or the terms of the
transaction to
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CUSIP No. 911905 10 7
which the Corporation is a party, exchanged for different securities of the
Corporation or common stock or other securities of another Corporation or
interests in a noncorporate entity or other property (including cash) or any
combination of any of the foregoing, then, as a condition of the consummation of
such transaction, lawful and adequate provision shall be made so that each
holder of shares of Series H Preferred Stock shall be entitled, upon conversion,
to an amount per share equal to (A) the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which
or for which each share of Common Stock is changed or exchanged times (B) the
number of shares of Common Stock into which a share of Series H Preferred Stock
is convertible immediately prior to the consummation of such transaction.
(c) In case the Corporation shall be a party to a transaction
described in subparagraph (b)(iii) above resulting in the change or exchange of
the Corporation's Common Stock then, from and after the date of announcement of
the pendency of such subparagraph (b)(iii) transaction until the effective date
thereof, each share of Series H Preferred Stock may be converted, at the option
of the holder thereof, into shares of Common Stock on the terms and conditions
set forth in this Section 8, and if so converted during such period, such holder
shall be entitled to receive such consideration in exchange for such holder's
shares of Common Stock as if such holder had been the holder of such shares of
Common Stock as of the record date for such change or exchange of the Common
Stock.
(d) The Board of Directors may increase the number of shares of Common
Stock into which each share of Series H Preferred Stock may be converted, in
addition to the adjustments required by this Section 8, as shall be determined
by it (as evidenced by a resolution of the Board of Directors) to be advisable
in order to avoid or diminish any income deemed, for federal income tax
purposes, to be received by any holder of shares of Common Stock or Series H
Preferred Stock resulting from any events or occurrences giving rise to
adjustments pursuant to this Section 8 or from any other similar event.
(e) The holder of any shares of Series H Preferred Stock may exercise
his right to convert such shares into shares of Common Stock by surrendering for
such purpose to the Corporation, at its principal office or at such other office
or agency maintained by the Corporation for that purpose, a certificate or
certificates representing the shares of Series H Preferred Stock to be converted
accompanied by a written notice stating that such holder elects to convert all
or a specified whole number of such shares in accordance with the provisions of
this Section 8 and specifying the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued. In case
such notice shall specify a name or names other than that of such holder, such
notice shall be ac companied by payment of all transfer taxes payable upon the
issuance of shares of Common Stock in such name or names. Other than such
taxes, the Corporation will pay any and all issue and other taxes (other than
taxes based on income) that may be payable in respect of any issue or delivery
of shares of Common Stock on conversion of Series H Preferred Stock pursuant
hereto. As promptly as practicable, and in any event within three Business Days
after the surrender of such certificate or certificates and the receipt of such
notice relating thereto and, if applicable, payment of all transfer taxes (or
the demonstration to the satisfaction of the Corporation that such taxes have
been paid), the Corporation shall deliver or cause to be delivered (i)
certificates representing the number of validly issued, fully paid and
nonassessable full shares of Common Stock to which the holder of shares of
Series H Preferred Stock so converted shall be entitled and (ii) if less than
the full number of shares of Series H Preferred Stock evidenced by the
surrendered
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CUSIP No. 911905 10 7
certificate or certificates are being converted, a new certificate or
certificates, of like tenor, for the number of shares evidenced by such
surrendered certificate or certificates less the number of shares converted.
Such conversion shall be deemed to have been made at the close of business on
the date of giving of such notice and of such surrender of the certificate or
certificates representing the shares of Series H Preferred Stock to be converted
so that the rights of the holder thereof as to the shares being converted shall
cease except for the right to receive shares of Common Stock and Accrued
Dividends in accordance herewith, and the person entitled to receive the shares
of Common Stock shall be treated for all purposes as having become the record
holder of such shares of Common Stock at such time. The Corporation shall not
be required to convert, and no surrender of shares of Series H Preferred Stock
shall be effective for that purpose, while the transfer books of the Corporation
for the Common Stock are closed for any purpose (but not for any period in
excess of 15 calendar days); but the surrender of shares of Series H Preferred
Stock for conversion during any period while such books are so closed shall
become effective for conversion immediately upon the reopening of such books, as
if the conversion had been made on the date such shares of Series H Preferred
Stock were surrendered, and at the conversion rate in effect at the date of such
surrender.
(f) Shares of Series H Preferred Stock may be converted at any time up
to the close of business on the second Business Day preceding the date fixed for
redemption of such shares pursuant to Section 5 hereof.
(g) Upon conversion of any shares of Series H Preferred Stock, the
holder thereof shall be entitled to receive any Accrued Dividends in respect of
the shares so converted to the date of conversion.
(h) In connection with the conversion of any shares of Series H
Preferred Stock, no fractions of shares of Common Stock shall be issued, but in
lieu thereof the Corporation shall pay a cash adjustment in respect of such
fractional interest in an amount equal to such fractional interest multiplied by
the Current Market Price per share of Common Stock on the day on which such
shares of Series H Preferred Stock are deemed to have been converted.
(i) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for the purpose of affecting
the conversion of the Series H Preferred Stock, such number of shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
then outstanding shares of Series H Preferred Stock. The Corporation shall from
time to time, subject to and in accordance with the General Corporation Law of
the State of Delaware, increase the authorized amount of Common Stock if at any
time the number of authorized shares of Common Stock remaining unissued shall
not be sufficient to permit the conversion at such time of all then outstanding
shares of Series H Preferred Stock.
(j) In computing the adjustment which a holder of Series H Preferred
Stock shall receive pursuant to paragraph (b) of this Section, the fact that
shares of Series H Preferred Stock may not be presently convertible shall be
ignored and such computation shall be made as if such shares were presently
convertible.
(k) Notwithstanding anything else contained herein, if adjustments in
the number of shares of Common Stock into which each share of Series H Preferred
Stock is convertible have caused the Conversion Price to be lower than the par
value, if any, of the Common Stock, upon any conversion of shares of Series H
Preferred Stock the Corporation shall, to the maximum extent it is legally able
to
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CUSIP No. 911905 10 7
do so, issue to the converting holder the shares of Common Stock into which the
shares of Series H Preferred Stock being converted are convertible, and, in
addition, the Corporation shall pay the converting holder an amount in cash
equal to the Current Market Price of the Common Stock multiplied by the number
of shares and fractions thereof of Common Stock which the converting holder
would have been entitled to receive except for the limitation on lawful issuance
described in this paragraph.
Section 9. Reports as to Adjustments.
-------------------------
Whenever the number of shares of Common Stock into which each share of
Series H Preferred Stock is convertible (or the number of votes to which each
share of Series H Preferred Stock is entitled) is adjusted as provided in
Section 8 hereof, the Corporation shall promptly mail to the holders of record
of the outstanding shares of Series H Preferred Stock at their respective
addresses as the same shall appear in the Corporation's stock records a notice
stating that the number of shares of Common Stock into which the shares of
Series H Preferred Stock are convertible has been adjusted and setting forth the
new number of shares of Common Stock (or describing the new stock, securities,
cash or other property) into which each share of Series H Preferred Stock is
convertible (and the new number of votes to which each share of Series H
Preferred Stock is entitled), as a result of such adjustment, a brief statement
of the facts requiring such adjustment and the computation thereof, and when
such adjustment became effective.
Section 10. Certain Covenants.
-----------------
(a) The Corporation shall not, without the prior written consent of
the holders of two-thirds of the outstanding shares of Series H Preferred Stock,
redeem or repurchase or otherwise acquire for consideration, or permit any of
its Subsidiaries to redeem, repurchase or otherwise acquire for consideration,
any shares of Common Stock at a price per share of Common Stock less than the
Conversion Price, unless the Board of Directors of the Corporation determines in
good faith that the shares of Common Stock remaining issued and outstanding upon
consummation of such redemption, repurchase or other acquisition will have an
Aggregate Market Value, immediately following consummation of such transaction,
greater than $1,500,000,000; provided, however, that nothing in this paragraph
-------- -------
shall prohibit the Corporation or any of its Subsidiaries from redeeming,
repurchasing or otherwise acquiring for consideration (i) up to 15,000,000
shares of Common Stock (such number of shares to be subject to adjustment, using
the method described in Section 8(b)(i)(B) hereof, in the event the Common Stock
shall be subdivided or reclassified into a greater number of shares or combined
or reclassified into a smaller number of shares) or (ii) any shares of Common
Stock offered for sale to the Corporation; and provided further that the
-------- -------
provisions of this paragraph (a) shall in no event apply at any time after (A)
the tender into a tender offer or exchange offer that has not occasioned a
Change of Control or Prospective Change of Control of more than one-third (1/3)
of the Series H Preferred Stock or (B) the sale, during a tender offer or
exchange offer that has not occasioned a Change of Control or Prospective Change
of Control, of more than one-third (1/3) of the Series H Preferred Stock or (C)
the sale, during a tender offer or exchange offer that has not occasioned a
Change of Control or Prospective Change of Control, of an amount of the Series H
Preferred Stock that, when added to that amount of the Series H Preferred Stock
tendered into such tender offer or exchange offer, is more than one-third (1/3)
of the Series H Preferred Stock (provided that the exception set forth in this
proviso shall not apply unless the Corporation would have the right, pursuant to
and in accordance with the terms of that certain agreement referred to in the
first proviso to this
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CUSIP No. 911905 10 7
paragraph (a), to purchase the shares of Series H Preferred Stock tendered into
such offer prior to their sale pursuant to such offer or purchase the shares of
Series H Preferred Stock sold during the pendency of such offer prior to their
sale).
(b) INTENTIONALLY OMITTED
(c) The Corporation shall, within three (3) Business Days following
public announcement of a tender or exchange offer by any Person for securities
representing fifty percent (50%) or more of the combined voting power of the
then outstanding Voting Stock of the Corporation, which tender or exchange offer
was not approved by the Board of Directors of the Corporation in advance of such
public announcement, advise the holders of shares of Series H Preferred Stock as
to whether or not the Corporation has sufficient capital and surplus (as
determined in accordance with the terms of the General Corporation Law of the
State of Delaware) to permit the Corporation to redeem the issued and
outstanding shares of Series H Preferred Stock in accordance with the terms of
paragraphs (d) and (e) of Section 5. Such notice shall be given by mail (and,
if the outstanding shares of Series H Preferred Stock are owned by one
corporation, or by one group of corporations under common corporate control, by
telex or telecopy) to each holder of Series H Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation, and, as soon as
practical, if the Series H Preferred Stock is listed on any national securities
exchange or traded in the over-the-counter market, a similar notice shall be
given by publication in a newspaper of general circulation in the Borough of
Manhattan.
(d) Any holder of Series H Preferred Stock may proceed to protect and
enforce its rights and the rights of such holders by any available remedy by
proceeding at law or in equity to protect and enforce any such rights, whether
for the specific enforcement of any provision of this Certificate of Designation
or in aid of the exercise of any power granted herein, or to enforce any other
proper remedy.
Section 11. Definitions.
-----------
For the purposes of the Certificate of Designation of Series H Senior
Cumulative Convertible Preferred Stock which embodies this resolution:
"Accrued Dividends" to a particular date (the "Applicable Date") means (i)
all unpaid dividends payable pursuant to paragraph (a) of Section 2, whether or
not declared, accrued to the Applicable Date, plus (ii) all dividends or
distributions payable pursuant to paragraph (c) of Section 2 for which the
Triggering Distribution was declared, ordered, paid or made on or prior to the
Applicable Date.
"Aggregate Market Value" of the issued and outstanding shares of Common
Stock on any date shall be determined by multiplying the Closing Price on such
date by the number of shares of Common Stock that are issued and outstanding on
such date.
"Average Market Price" per share of Common Stock on any date shall be
deemed to be the weighted average of the Closing Prices per share of Common
Stock on the ten (10) Trading Days immediately preceding such date, determined
by (i) multiplying each Closing Price during such ten (10) day period by the
number of shares of Common Stock traded that day, (ii) adding the product of the
foregoing multiplications, and (iii) dividing the sum by the total number of
shares of Common Stock traded during that ten (10) day period.
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CUSIP No. 911905 10 7
"Business Day" means any day other than a Saturday, Sunday, or a day an
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"Change in Control" shall mean any of the following:
(a) the acquisition by any Person, other than the Corporation, or any
of its Subsidiaries, any employee benefit plan or related trust of the
Corporation or any of its Subsidiaries, or Berkshire Hathaway Inc. or any of its
Subsidiaries or affiliates (as defined in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (an "Acquiring Person"),
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of the combined voting power of the
then outstanding Voting Stock of the Corporation entitled to vote generally in
the election of directors; or
(b) the public announcement of a tender or exchange offer by any
Acquiring Person for fifty percent (50%) or more of the outstanding voting
securities of the Corporation, which was not approved by the Board of Directors
in advance of such public announcement, provided, however, that such
-------- -------
announcement shall not constitute a Change in Control as long as (i) the Board
of Directors of the Corporation opposes such offer in its Schedule 14D-9
statements and (ii) the Corporation has sufficient capital and surplus (as
determined in accordance with the terms of the General Corporation Law of the
State of Delaware) to permit the Corpo ration to redeem the issued and
outstanding shares of Series H Preferred Stock in accordance with the terms of
paragraph (d) of Section 5. A Change in Control shall be deemed to have
occurred at any time a tender or exchange offer, not approved by the Board of
Directors of the Corporation in advance of its public announcement, for fifty
percent (50%) or more of the outstanding voting securities of the Corporation is
pending, if (i) the Board of Directors of the Corporation in its Schedule 14D-9
statements (A) approves or (B) fails to oppose, such tender or exchange offer,
or (ii) the Corporation does not possess sufficient capital and surplus (as
determined in accordance with the terms of the Delaware General Corporation Law)
to permit the Corporation to redeem the issued and outstanding shares of Series
H Preferred Stock in accordance with the terms of paragraph (d) of Section 5, or
(iii) either the chief executive officer or a majority of the Board of Directors
gives notice to the holders of Series H Preferred Stock that consummation of
such tender or exchange offer is likely; or
(c) individuals who, as of August 15, 1997, constitute the Board of
Directors of the Corporation (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided that any individual
becoming a director subsequent to August 15, 1997, whose election, or nomination
for election by the Corporation's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 of Regula tion 14A promulgated under the Exchange
Act) and further excluding any person who is an affiliate or associate (as those
terms are defined in the General Rules and Regulations under the Exchange Act)
of an Acquiring Person having or proposing to acquire beneficial ownership of
10% or more of the continued voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors; or
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CUSIP No. 911905 10 7
(d) the sale or other disposition of all or substantially all the
assets of the Corporation in one transaction or series of related transactions.
"Closing Price" per share of Common Stock on any date shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the last quoted sale price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System ("NASDAQ")
or such other system then in use, or, if on any such date the Common Stock is
not quoted by any such organization, the average of the Closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors. If the Common Stock is not publicly
held or so listed or publicly traded, "Closing Price" shall mean the Fair Market
Value per share as determined in good faith by the Board of Directors of the
Corporation.
"Conversion Price" shall be an amount equal to $1,000 divided by the number
of shares of Common Stock into which one share of Series H Preferred Stock is
convertible at such time (or would be convertible if the Series H Preferred
Stock were then convertible).
"Current Market Price" per share of Common Stock on any date shall be
deemed to be the Closing Price per share of Common Stock on the Trading Day
immediately prior to such date.
"Event Price" shall mean any of the following, as applicable:
(a) the weighted average price per share of Common Stock paid by any
Person (or affiliate or associate (as such terms are defined in Rule 12b-2 under
the Exchange Act) of such Person) whose acquisition of shares of stock of the
Corporation triggered a Change in Control during the sixty (60) day period
preceding the Change in Control, in the event of a Change in Control described
in paragraph (a) of the definition of Change in Control (unless such Change in
Control was occasioned by the purchase of shares of the Corporation's Voting
Stock in a tender offer or exchange offer, in which case the Event Price shall
be determined by reference to subparagraph (b) below); or
(b) the highest price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid, offered to be paid or agreed to be
paid by any Person (or affiliate or associate (as such terms are defined in Rule
12b-2 under the Exchange Act) of such Person) for a share of Common Stock in a
tender or exchange offer in the event of (i) a Change in Control described in
paragraph (a) of the definition of Change in Control occasioned by the purchase
of shares of the Corporation's Voting Stock in a tender offer or exchange offer
or (ii) a Change in Control described in paragraph (b) of the definition of
Change in Control. The fair market value of any non-cash consideration paid,
offered to be paid or agreed to be paid by such Person for such shares shall be
determined in good faith by the Board of Directors of the Corporation; provided,
--------
however, that the fair market value of
- -------
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CUSIP No. 911905 10 7
any such non-cash consideration shall not be deemed to be less than the value
assigned to such consideration by any investment banking firm retained to advise
the Corporation, the Board of Directors, or any committee of its Board of
Directors prior to the consummation of the Change in Control; or
(c) the Average Market Price per share of Common Stock, in the event
of a Change in Control described in paragraphs (c) or (d) of the definition of
Change in Control, computed as of the date of such Change in Control.
"Fair Market Value" means an amount determined in good faith by the Board
of Directors of the Corporation in reliance upon an opinion of a nationally
recognized investment banking firm and certified in a resolution sent to all
holders of shares of Series H Preferred Stock.
"Junior Stock" means any stock of the Corporation ranking junior to the
Series H Preferred Stock with respect to the payment of dividends and the
distribution of assets, whether upon liquidation or otherwise.
"Merger Event" shall mean the approval by the stockholders of the
Corporation of a reorganization, merger or consolidation, in each case, with
respect to which all or substantially all the individuals and entities who were
the respective beneficial owners of the voting securities of the Corporation
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors of the corporation resulting from such reorganization,
merger or consolidation.
"Person" shall mean any person or entity of any nature whatsoever,
specifically including an individual, a firm, a company, a corporation, a
partnership, a trust or other entity. A Person, together with such Person's
Affiliates and Associates (as these terms are defined in Rule 12b-2 under the
Exchange Act), and any Persons acting as a partnership, limited partnership,
joint venture, association, syndicate or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel manner (whether or not pursuant to any express agreement),
for the purpose of acquiring, holding, voting or disposing of securities of the
Corporation with such Person, shall be deemed a single "Person".
"Prospective Change in Control" shall mean the public announcement of a
tender or exchange offer by any person for fifty percent (50%) or more of the
Combined voting power of the then outstanding Voting Stock of the Corporation,
which tender or exchange offer was approved by the Board of Directors of the
Corporation in advance of such public announcement.
"Redemption Threshold" shall be an amount equal to the Conversion Price at
such time multiplied by 125%.
"Rights" shall mean any rights to purchase Junior Stock issued pursuant to
any Rights Agreement.
"Rights Agreement" shall mean any rights agreement that may hereafter be
adopted by the Corporation similar to the Rights Agreement dated as of June 29,
1989 between the Corporation and The Chase Manhattan Bank, N.A., as amended and
restated (the "1989 Rights Agreement"), as it may be amended from time to time
consistent
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CUSIP No. 911905 10 7
with the limitations on amendment of the 1989 Rights Agreement set forth in
Section (4) of that certain letter agreement dated August 7, 1989 pursuant to
which the Corporation's Series A Preferred Stock was initially issued.
"Set Apart for Payment" shall mean the Corporation shall have deposited
with a bank or trust company doing business in the Borough of Manhattan, the
City of New York, and having a capital and surplus of at least $50,000,000, in
trust for the exclusive benefit of the holders of shares of Series H Preferred
Stock, funds sufficient to satisfy the Corporation's payment obligation.
"Subsidiary" of any Person means any corporation or other entity of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Voting Stock" means the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors.
Section 12. Rank.
----
The Series H Preferred Stock shall rank, with respect to voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions
thereof, including, without limitation, with respect to the payment of dividends
and the distribution of assets, whether upon liquidation or otherwise, (i)
equally with respect to all shares of Senior Preferred Stock or Preferred Stock
described in the proviso to subparagraph (b)(ii) of Section 3, (ii) prior to all
shares of the $437.50 Series B Cumulative Convertible Preferred Stock, without
par value, of the Corporation and to all shares of the Common Stock, and (iii)
prior to all shares of any other class or series of Senior Preferred Stock or
Preferred Stock of the Corporation, unless such other class or series by its
terms ranks equally with or senior to the Series H Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation of Series H Senior Cumulative Convertible Preferred Stock to be duly
executed by its Chairman and attested to by its Secretary and has caused its
corporate seal to be affixed hereto, this 15th day of August, 1997.
US AIRWAYS GROUP, INC.
By: /s/ John W. Harper
-------------------------
John W. Harper
Senior Vice President
