SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)*
US Airways Group, Inc.
(Name of Issuer)
Common Stock, par value $1.00 per share
(Upon Conversion of Series F Cumulative Convertible Senior
Preferred Stock, Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and Series T-2
Cumulative Convertible Exchangeable Senior Preferred Stock)
(Title of Class of Securities)
911905 10 7
(CUSIP Number)
Paul Jasinski Benjamin F. Stapleton
British Airways Plc Sullivan & Cromwell
75-20 Astoria Boulevard 125 Broad Street
Jackson Heights, New York 11370 New York, New York 10004
(718) 397-4250 (212) 558-3740
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 19, 1997
(Date of Event which Requires Filing of this Statement)
If a 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 [ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*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.
<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>
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CUSIP NO. 911905 10 7
- ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BritAir Acquisition Corp. Inc.
IRS Identification No. 521578385
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC, AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 30,000 shares of Series F Cumulative
SHARES Convertible Senior Preferred Stock, 152.1
shares of Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and
9,919.8 shares of Series T-2 Cumulative
Convertible Exchangeable Senior Preferred
Stock
-------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 30,000 shares of Series F Cumulative
WITH Convertible Senior Preferred Stock, 152.1
shares of Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and
9,919.8 shares of Series T-2 Cumulative
Convertible Exchangeable Senior Preferred
Stock
<PAGE>
-------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
30,000 shares of Series F Cumulative Convertible Senior
Preferred Stock, 152.1 shares of Series T-1 Cumulative
Convertible Exchangeable Senior Preferred Stock and
9,919.8 shares of Series T-2 Cumulative Convertible
Exchangeable Senior Preferred Stock
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.0% of Common Stock (assuming conversion of Series F Cumulative
Convertible Senior Preferred Stock, Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and Series T-2 Cumulative
Convertible Exchangeable Series Preferred Stock)
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14. TYPE OF REPORTING PERSON
CO
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<PAGE>
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
British Airways Plc
IRS Identification No. 131546240
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
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7. SOLE VOTING POWER
NUMBER OF 30,000 shares of Series F Cumulative
SHARES Convertible Senior Preferred Stock, 152.1
shares of Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and
9,919.8 shares of Series T-2 Cumulative
Convertible Exchangeable Senior Preferred
Stock (all of the foregoing indirectly
through Britair Acquisition Corp. Inc.)
-------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY -0-
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 30,000 shares of Series F Cumulative
WITH Convertible Senior Preferred Stock, 152.1
shares of Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and
9,919.8 shares of Series T-2 Cumulative
Convertible Exchangeable Senior Preferred
Stock (all of the foregoing indirectly
through Britair Acquisition Corp. Inc.)
-------------------------------------------
10. SHARED DISPOSITIVE POWER
-0-
<PAGE>
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
30,000 shares of Series F Cumulative Convertible Senior Preferred
Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable
Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative
Convertible Exchangeable Senior Preferred Stock (all of the foregoing
indirectly through Britair Acquisition Corp. Inc.)
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.0% of Common Stock (assuming conversion of Series F Cumulative
Convertible Senior Preferred Stock, Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock and Series T-2 Cumulative
Convertible Exchangeable Series Preferred Stock)
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14. TYPE OF REPORTING PERSON
CO
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Item 1. Security and Issuer
This Statement relates to the common stock, par value $1.00 per share,
of US Airways Group, Inc. ("US Airways"), Crystal Park Four, 2345 Crystal Drive,
Arlington, Virginia 22227 (the "Common Stock"), which is issuable upon
conversion of the Series F Cumulative Convertible Senior Preferred Stock, no par
value (the "Series F Preferred Stock"), the Series T-1 Cumulative Convertible
Exchangeable Senior Preferred Stock, no par value (the "Series T-1 Preferred
Stock") and the Series T-2 Cumulative Convertible Exchangeable Senior Preferred
Stock (the "Series T-2 Preferred Stock").
<PAGE>
Item 4. Purpose of Transaction
On May 19, 1997, US Airways sent a letter (attached hereto as Exhibit
1) to BA giving notice of its exercise ("Notice of Exercise") of a right of
first offer to repurchase from BA 9,919.8 shares of the Series T-2 Preferred
Stock. On May 19, 1997, pursuant to a Stock Purchase Agreement (the "Stock
Purchase Agreement") by and among US Airways, BA, and BritAir Acquisition Corp.
Inc. ("BritAir") (attached hereto as Exhibit 2), US Airways agreed to repurchase
all 152.1 of the outstanding shares of the Series T-1 Preferred Stock and
1,940.6 shares of the Series F Preferred Stock. The purchase price for the
Series T-1 and T-2 Preferred Stock is equivalent to $26.50 for each share of
Common Stock into which such Preferred Stock is convertible and the purchase
price for the Series F Preferred Stock is equivalent to $24.63 for each share of
Common Stock into which such Preferred Stock is convertible. The terms of the
purchased shares require US Airways to retire such shares. BA has agreed to
convert its remaining 28,059.4 shares of the Series F Preferred Stock into
Common Stock on or prior to June 3, 1997.
Item 5. Interest in Securities of the Issuer
(a) BritAir, a wholly owned subsidiary of BA, directly owns 30,000
shares of the Series F Preferred Stock, 152.1 shares of the Series T-1 Preferred
Stock and 9,919.8 shares of the Series T-2 Preferred Stock. Subject to
restrictions on foreign ownership of U.S. airlines, the 30,000 shares of the
Series F Preferred Stock held by BritAir are convertible into 15,458,851 shares
of Common Stock, the 152.1 shares of the Series T-1 Preferred Stock
<PAGE>
are convertible into 74,195 shares of Common Stock and the 9,919.8 shares of the
Series T-2 Preferred stock are convertible into 3,757,500 shares of Common
Stock. Collectively, the total of such shares of Common Stock is equal to
approximately 23.0%* of the total number of shares of Common Stock of US
Airways outstanding (assuming conversion of the Series F, T-1 and T-2 Preferred
Stock).
(b) BritAir has the sole power to vote, or to direct the vote, and the
sole power to dispose of, or to direct the disposition of, the shares of Series
F Preferred Stock, the Series T-1 Preferred Stock and the Series T-2 Preferred
Stock owned by it.
(c) Not applicable.
(d) No person other than BritAir has and, prior to the consummation of
the purchases by US Airways contemplated by the Exercise Notice and the Stock
Purchase Agreement, will have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares of the
Series F Preferred Stock, the Series T-1 Preferred Stock or the Series T-2
Preferred Stock beneficially owned by BritAir.
(e) Not applicable.
Item 7. Material to be filed as Exhibits
1. Letter, dated May 19, 1997, from Lawrence M. Nagin to BA.
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* Based on the number of shares of common stock of US Airways outstanding as of
March 24, 1997 as disclosed in US Airways' Proxy Statement relating to its
Annual Meeting of Stockholders for 1997 (filed on March 31, 1997).
<PAGE>
2. Stock Purchase Agreement, dated May 19, 1997, by and among US
Airways, BA, and BritAir.
<PAGE>
SIGNATURES
Each of the undersigned certifies that after reasonable inquiry and to
the best of its knowledge and belief, the information set forth in this
Statement is true, complete and correct.
BRITISH AIRWAYS PLC
By /s/ R.D.A. Galbraith
R.D.A. Galbraith
BRITAIR ACQUISITION CORP. INC.
By /s/ Paul Jasinski
Paul Jasinski
Dated: May 19, 1997
<PAGE>
EXHIBIT INDEX
Page on which
Exhibit appears
Ex-99.1. 1. Letter, dated May 19, 1997, from Lawrence M.
Nagin to BA.
Ex-99.2. 2. Stock Purchase Agreement, dated May 19, 1997,
by and among US Airways, BA, and BritAir.
BRITISH AIRWAYS
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USAir
Lawrence M. Nagin
Executive Vice President - Corporate Affairs
and General Counsel
2345 Crystal Drive
Arlington, VA 22227
Telephone: 703-418-5210
Fax: 703-418-5252
May 19, 1997
British Airways Plc
Speedbird House
Heathrow Airport (London)
Hounslow TW6 2JA
England
Attention: Legal Director
Dear Sir or Madam:
Reference is made to your letter dated March 14, 1997 giving us notice,
pursuant to Section 7.2 of the Investment Agreement between USAir Group, Inc.
(the "Company") and British Airways Plc ("BA"), dated as of January 21, 1993, as
amended (the "Investment Agreement"), that BritAir Acquisition Corp. Inc.
("BritAir") intends to sell 9,919.8 shares of Series T-2 Cumulative Convertible
Exchangeable Senior Preferred Stock (the "Offered Shares") of the Company at
$10,037.88 per share (the "Offer Price").
This letter constitutes notice, pursuant to Section 7.2 of the
Investment Agreement, that the Company elects to purchase the Offered Shares at
the Offer Price. Such purchase shall take place on May 29, 1997 or such earlier
date as we shall mutually agree.
<PAGE>
Please contact Peter Atkins at Skadden, Arps to discuss the mechanics
for closing.
Very truly yours,
US Airways Group, Inc.
By: /s/ Lawrence M. Nagin
Lawrence M. Nagin
Executive Vice President -
Corporate Affairs and
General Counsel
cc: Benjamin F. Stapleton
Sullivan & Cromwell
Peter Allan Atkins
Skadden, Arps, Slate, Meagher & Flom LLP
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement (this "Agreement") made and entered into this
19th day of May, 1997, by and among US Airways Group, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
British Airways Plc, a public limited company organized and existing under the
laws of England and Wales ("BA"), and BritAir Acquisition Corp. Inc., a
corporation organized and existing under the laws of the State of Delaware and a
wholly owned subsidiary of BA (the "Seller").
W I T N E S S E T H :
WHEREAS, the Seller owns 30,000 shares of Series F Cumulative
Convertible Senior Preferred Stock ("Series F Preferred Stock"), 152.1 shares of
Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock ("Series
T-1 Preferred Stock", and together with Series F Preferred Stock, the "Preferred
Stock") of the Company; and
WHEREAS, the Company desires to purchase from Seller, and the Seller is
willing to sell to the Company 1940.636 shares of Series F Preferred Stock and
all 152.1 shares of the Series T-1 Preferred Stock owned by the Seller
(collectively, the "Preferred Shares");
WHEREAS, in view of Seller's agreement to sell the Preferred Shares to
the Company, the Company agrees to waive certain of its rights under the
Investment Agreement made and entered into January 21, 1993, by and between the
Company and BA, as amended (the "Investment Agreement");
WHEREAS, pursuant to Section 7.2 of the Investment Agreement, BA has
delivered a notice to the Company stating BA's intention to sell Series T-2
Cumulative Convertible Exchangeable Senior Preferred Stock (the "Series T-2
Preferred Stock"), and on the date hereof the Company is delivering a notice to
BA, a copy of which is attached hereto as Annex A, stating that the Company
intends to exercise its right of first offer with respect to such Series T-2
Preferred Stock, such purchase to be consummated on May 29, 1997 or such earlier
date as the parties hereto shall mutually agree;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereto do hereby agree as follows:
<PAGE>
1. Representations, Warranties and Agreements of the Seller. The Seller
represents and warrants to the Company that:
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and BA is a public
limited company duly organized and validly existing under the laws of
England and Wales. The Seller has the corporate power and authority to enter
into this Agreement and to sell, assign, transfer and deliver the Preferred
Shares in accordance herewith.
(b) Neither the execution nor the delivery of this Agreement nor the
sale of the Preferred Shares nor the Seller's or BA's performance of any of
their respective covenants and agreements hereunder will, directly or
indirectly,(i) contravene, conflict with, or result in a violation of the
certificate of incorporation or bylaws of the Seller or the Memorandum and
Articles of Association of BA or any resolution adopted by the Board of
Directors of the Seller or BA; (ii) contravene, conflict with, or result in
a violation of any federal, state, local, foreign, international, or
administrative rule, law, ordinance, regulation, statute, (iii) contravene,
conflict with, or result in a violation or breach of, or give any person the
right to exercise any remedy under, or accelerate the maturity or
performance of, or cancel, terminate or modify any contract to which the
Seller or BA is a party or by which the Seller or BA may be bound or (iv)
give any person the right to prevent, delay, or otherwise interfere with any
of the transactions contemplated hereby.
(c) Immediately prior to the Closing (as defined below), the Seller
will have good and valid title to the Preferred Shares, free and clear of
all liens, encumbrances, equities or claims (other than pursuant to the
Investment Agreement and this Agreement); and, upon delivery of the
Preferred Shares and payment therefor pursuant hereto, good and valid title
to the Preferred Shares, free and clear of all liens, encumbrances, equities
or claims will pass to the Company.
(d) All sales by Seller or BA of the shares of common stock, par value
$1.00 per share, of the Company (the "Common Stock") into which the shares
of the Series F Preferred Stock that are not being sold and purchased
hereunder (the "Remaining Series F Shares")
<PAGE>
are convertible (the "Common Shares"), shall be made pursuant to an
exemption from the registration requirements of the Securities Act of 1933
or pursuant to an effective registration statement under such act.
2. Representations and Warranties of the Company. The Company
represents and warrants to the Seller and BA that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Company has
the corporate power and authority to enter into this Agreement and to
purchase the Preferred Shares in accordance herewith.
(b) Neither the execution nor the delivery of this Agreement nor the
purchase of the Preferred Shares nor the Company's performance of its
covenants and agreements hereunder will, directly or
indirectly,(i)contravene, conflict with, or result in a violation of the
certificate of incorporation or bylaws of the Company or any resolution
adopted by the Board of Directors of the Company; (ii) contravene, conflict
with, or result in a violation of any federal, state, local, foreign,
international, or administrative rule, law, ordinance, regulation, statute,
or treaty, including, without limitation, the provisions of the General
Corporation Law of the State of Delaware relating to the repurchase or
redemption of stock, (iii) contravene, conflict with, or result in a
violation or breach of, or give any person the right to exercise any remedy
under, or accelerate the maturity or performance of, or cancel, terminate or
modify any contract to which the Company is a party or by which the Company
may be bound or (iv) give any person the right to prevent, delay, or
otherwise interfere with any of the transactions contemplated hereby.
(c) (i) The issued and outstanding capital stock of the Company
consisted of, as of April 30, 1997, 65,274,768 shares of Common Stock,
358,000 shares of Series A Cumulative Convertible Preferred Stock, 42,625.5
shares of the Series B Cumulative Convertible Preferred Stock, and consists
of, as of the date hereof, 30,000 shares of the Series F Preferred Stock,
152.1 shares of the Series T-1 Preferred Stock, and 9,919.8 shares of the
Series T-2 Preferred Stock; (ii) as of the date hereof, 1940.636 shares of
the Series F Preferred Stock, 152.1 shares of the Series T-1 Preferred Stock
and 9,919.8 shares of the Series T-2 Preferred Stock represent, upon
conversion, 1,000,000,
<PAGE>
74,195 and 3,757,500 shares of Common Stock, respectively; (iii) as of
the date hereof, each Conversion Price (as such term is defined in each of
the Certificates of Designation of the Preferred Stock) used to calculate
the conversions in (ii) above fully and accurately reflects any adjustments
to such Conversion Price required pursuant to Section 8 of the respective
Certificates of Designation of the Preferred Stock.
3. Purchase and Sale of Preferred Shares.
(a) Subject to the terms and conditions set forth in this Agreement,
the Seller agrees to sell to the Company, and the Company agrees to purchase
from the Seller, the Preferred Shares for the aggregate of the respective
purchase prices (the "Aggregate Purchase Price") set forth by series below:
Total
Number Price Purchase
Series of Shares per Share Price
Series F Preferred Stock 1940.636 $12,693.708145 $24,633,867.00
Series T-1 Preferred Stock 152.1 12,926.80802 1,966,168.50
Aggregate Purchase Price $26,600,035.50
(b) Certificates evidencing the Preferred Shares will be made available
for inspection by the Company at 3:00 p.m., New York time, on the business
day prior to, or two business days prior to, the Closing Date (as defined
below), at a meeting at the offices of Sullivan & Cromwell referred to in
Section 3(c) hereof (such meeting, the "Pre-Closing"). A representative of
the Company or of such office or agency maintained for the purpose of
effecting conversions of the Series F Preferred Stock (the Company or such
office or agency, the "Transfer Agent") shall attend the Pre-Closing for the
purpose of preparing, and exchanging Seller's certificate for the Series F
Preferred Stock for, two certificates, the first representing the shares of
the Series F Preferred Stock to be sold to the Company pursuant to this
Agreement and the second representing the Remaining Series F Shares.
<PAGE>
(c) Certificates evidencing the Preferred Shares, together with
appropriate instruments for the transfer thereof to the Company, shall be
delivered by the Seller to the Company against payment by the Company of the
Aggregate Purchase Price therefor by wire transfer of immediately available
funds to the account of the Seller at a bank to be identified to the Company
at least one day prior to the Closing. Such delivery shall take place at the
offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004,
or at such other location as the Seller and the Company may agree to in
writing. The time and date of payment and delivery shall be 9:30 a.m., New
York time, on May 22, 1997, or such other time and date as the Seller and
the Company may agree to in writing. The parties hereby agree that the
consummation of the Company's purchase of the Series T-2 Preferred Stock
pursuant to the Company's right of first offer pursuant to Section 7.2 of
the Investment Agreement shall occur on the Closing Date at the same time
and place set for the Closing. The exchange of the Preferred Shares for the
Aggregate Purchase Price therefor is herein referred to as the "Closing".
The date on which such Closing occurs is herein referred to as the "Closing
Date".
4. Covenants of the Company. The Company
covenants to, and agrees with, BA and the Seller that:
(a) Following delivery to the Company by Sullivan & Cromwell, counsel
to BA and the Seller, of their opinion (the "Legal Opinion"), dated the date
of such delivery, in substantially the form attached as Annex 4(a) hereto,
upon request in writing from the Seller that the Remaining Series F Shares
be converted into shares of the Common Stock, the Company shall, or shall
cause the Transfer Agent to, ensure (i) that such conversion is effected
within one Business Day (as used in this Agreement the term "Business Day"
shall mean any day on which the New York Stock Exchange is open for
business) after the surrender to the Company of the certificate representing
the Remaining Series F Shares and (ii) that, subject to paragraph (b) below,
the certificate in Seller's name representing the Common Shares be prepared
bearing only a legend (the "Contractual Restrictions Legend") to the effect
that the securities represented by such certificate are subject to
restrictions on transfer pursuant to the terms of the Investment Agreement,
and any sale or disposition thereof must be made in compliance with
applicable provisions of such Investment Agreement, including without
limitation those described in
<PAGE>
Article VII and Article VIII thereof. Such certificate shall be
delivered to the Seller at the offices of Sullivan & Cromwell referred to in
Section 3(c) not later than 3:00 p.m. New York time on such first Business
Day following request therefor. The certificate representing the Remaining
Series F Shares described in Section 3(b) hereof shall bear only the
Contractual Restrictions Legend if the Legal Opinion shall have been
delivered to the Company at least one Business Day prior to the Pre-Closing
and the Seller shall request that the certificate be so prepared.
(b) At such time as the Seller and, if applicable, BA shall enter into
an underwriting agreement (an "Underwriting Agreement") with one or more
underwriters (the "Underwriters") containing a covenant from the Underwriter
in substantially the form attached as Annex 4(c) hereto, within one Business
Day of a request by the Seller therefor, the Company shall, or shall cause
the Transfer Agent to, remove the Contractual Restrictions Legend from the
certificate representing the Common Shares or issue a new certificate that
does not bear the Contractual Restrictions Legend, in either case, with the
effect that the resulting certificate for the Common Shares shall no longer
be legended.
(c) The sale of the Common Shares pursuant to an Underwriting Agreement
shall be an "underwritten public offering" constituting a "Permitted
Offering" as such terms are, respectively, used and defined in Section
7.1(b)(i) of the Investment Agreement. If Seller sells the Common Shares in
an underwritten public offering pursuant to an Underwriting Agreement,
entered into by Seller and one or more of the underwriters set forth on
Annex 7(a)(i) hereto containing covenants from the Underwriters in the form
attached as Annex 4(c) hereto, then with respect to such sale to such
Underwriters and with respect to the initial resale of the Common Shares by
such Underwriters the Company hereby waives BA's and Seller's obligation
under Section 7.1(b)(i) of the Investment Agreement to sell the Common
Shares in the United States and to use best efforts to prevent sales to any
person that would become, as the result of such offering, the beneficial
owner of more than 5% of the outstanding Common Stock.
(d) The Company shall, prior to the Closing Date, supplementally list,
subject to notice of issuance, the Common Shares on the New York Stock
Exchange. The Company shall, or shall cause its Transfer Agent, to
<PAGE>
immediately file notice of issuance to effect such listing upon the
surrender to the Company of the certificate representing the Remaining
Series F Shares for exchange into the Common Shares.
(e) Except as set forth in this subparagraph (e), the Seller's
registration rights set forth in Article VIII of the Investment Agreement
shall not be affected by the parties' entry into this Agreement and shall
remain in effect. The Company shall not withdraw the Registration Statement
on Form S-1 (the "Form S-1") relating to the Preferred Stock prior to the
"Termination Date": provided, however, that the Company shall take such
actions as it deems necessary to cause the Securities and Exchange
Commission not to declare the Form S-1 effective prior to June 16, 1997.
Upon written notice from the Seller to the Company delivered on or after
June 16, 1997 stating that, while registration is not necessary under the
Securities Act of 1933, an effective registration statement relating to the
Common Shares would facilitate the marketing of such shares, the Company
shall use reasonable efforts to (a) amend as promptly as practicable the
Form S-1 to provide for the sale by the Seller of the Common Shares and (b)
cause such amended Form S-1 to be declared effective under the Securities
Act of 1933 as promptly as practicable. As used in this subparagraph (e),
the "Termination Date" shall be the earlier of (i) the first date following
the issuance of the Common Shares on which BA and the Seller hold in the
aggregate not more than 1,000,000 Common Shares and (ii) the date on which
the Company is no longer required to keep the Form S-1, whether or not
amended, effective under Section 8.1(b)(ix) of the Investment Agreement.
(f) The record date for the May 30, 1997 dividend on the Preferred
Shares, the Remaining Series F Shares and the 9,919.8 shares of Series T-2
Preferred Stock owned as of the date hereof by the Seller shall be May 20,
1997. The Seller shall be entitled to receive the dividend on all such
shares, in respect of the dividend payment period ending May 30, 1997.
(g) Prior to consummation of the sale by the Seller of the Common
Shares, the Company shall not redeem any shares of the Remaining Series F
Shares or any of the Common Shares into which such shares are converted.
<PAGE>
5. Covenants of BA and the Seller. BA and the Seller covenant to, and
agree with, the Company that:
(a) On or prior to June 3, 1997, the Seller shall surrender to the
Company a certificate evidencing the Remaining Series F Shares and deliver a
written request to the Company to convert the Remaining Series F Shares into
Common Shares, as described in Sections 4(a) and 4(b) hereof.
(b) The Seller and BA hereby acknowledge that none of (x) the execution
and delivery by the Company of this Agreement with the form of Legal Opinion
attached hereto, (y) the acceptance by the Company of the final, executed
Legal Opinion or (z) the removal of the restrictive legend from the
certificate representing the Remaining Series F Shares or the Common Shares,
shall be deemed to evidence the Company's agreement or acknowledgment that
the matters set forth in the Legal Opinion are accurate or complete.
(d) BA shall cause the Seller to comply with the Seller's covenants and
other agreements under this Agreement.
6. Waivers of the Company. The Company hereby waives the right of first
offer set forth in Section 7.2 of the Investment Agreement with respect to
the Common Shares.
7. Conditions to Closing of the Company. The obligation of the Company
to accept and pay for the Preferred Shares is subject to the following
conditions:
(a) The representations and warranties of the Seller contained herein
shall be true and correct when made and as of the Closing Date.
(b) The Seller shall have performed and complied with all agreements on
its part to be performed or complied with prior to or on the Closing Date
pursuant hereto.
8. Conditions to Closing of the Seller. The obligation of the Seller to
deliver the Shares is subject to the following conditions:
(a) The representations and warranties of the Company contained herein
shall be true and correct when made and as of the Closing Date.
<PAGE>
(b) The Company shall have performed and complied with all agreements
on its part to be performed or complied with prior to or on the Closing Date
pursuant hereto.
(c) The Company shall have supplementally listed the Common Shares,
subject to notice of issuance, on the New York Stock Exchange.
9. Expenses. The Seller agrees with the Company that the Seller will
pay or cause to be paid (i) the fees, disbursements and expenses of counsel to
the Seller in connection with the transactions contemplated by this Agreement
and (ii) all other expenses (including taxes) incurred by or imposed on the
Seller incident to the sale and delivery of the Preferred Shares and the Common
Shares. The Company will pay (i) all fees and expenses in connection with
supplementally listing the Common Shares on the NYSE (ii) all of its own costs
and expenses, including the fees, disbursements and expenses of its counsel and
(iii) all other expenses (including taxes) incurred by or imposed on the Company
incident to the purchase of the Preferred Shares by it.
10. Specific Performance. The parties hereto each acknowledge that in
view of the uniqueness of the subject matter hereof, they would not have an
adequate remedy at law for money damages in the event that this Agreement were
not performed in accordance with its terms, and therefore agree that the parties
shall be entitled to specific enforcement of the terms hereof in addition to any
other remedy to which the parties hereto may be entitled at law or in equity.
11. Survival of Agreements, Etc. All representations, warranties,
covenants and agreements made herein or in connection with the transactions
contemplated hereby shall survive the execution and delivery of this Agreement
and the Closing of the purchase and sale of the Preferred Shares.
12. Non-Assignability and Successors. This Agreement and the rights and
obligations hereunder may not be assigned or otherwise transferred by either
party. This Agreement shall be binding upon, and inure solely to the benefit of,
the Company, BA and the Seller, and their respective successors and permitted
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.
<PAGE>
13. Headings. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
14. Amendments. This Agreement cannot be modified, amended or
terminated except by an instrument in writing signed by the Company, BA and the
Seller; provided, however, that any provision of this Agreement may be waived
only by the party to be charged with the waiver but only by a duly executed
writing.
15. Time of Essence. Time shall be of the essence in this Agreement.
16. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to conflicts
of laws principles.
17. Notices. All notices and other communications hereunder shall be
in writing and shall be sent by facsimile with a hard copy to follow by
overnight courier as follows:
If to the Seller:
BritAir Acquisition Corp. Inc.
1105 North Market Street
Suite 1300
P.O. Box 8985
Wilmington, DE 19899
Attention: Paul Jasinski
Telephone: (718) 397-4250
Fax: (718) 397-4268
with copies to
British Airways Plc
Speedbird House
Heathrow Airport (London)
Hounslow TW6 2JA
England
Attention: Legal Director
Telephone: 011-44-181-562-5880
Fax: 011-44-181-562-5621
and
<PAGE>
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Benjamin F. Stapleton
Telephone: (212) 558-4000
Fax: (212) 558-3588
If to the Company:
US Airways Group, Inc.
Crystal Park Four
2345 Crystal Drive
Arlington, Virginia 22227
Attention: General Counsel
Telephone: (703) 418-5210
Fax: (703) 418-5208
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Peter Allan Atkins
Telephone: (212) 735-3000
Fax: (212) 735-2000
18. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the Company, on the one hand, and BA and the Seller, on
the other hand, provides the waiver by the Company of certain of its rights
under the Investment Agreement to the extent provided herein and supersedes all
prior agreements and understandings relating to the subject matter hereof,
except the Investment Agreement.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
20. Consent to Jurisdiction; Service of Process. (a) The parties to
this Agreement hereby irrevocably submit to the exclusive jurisdiction of any
Federal or State court located in New York, New York over any suit, action or
proceeding arising out of or relating to this Agreement. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such suit, action or proceeding brought in such court. The parties agree that,
to the fullest extent permitted by applicable law, a final and non-appealable
judgment in any
<PAGE>
such suit, action, or proceeding brought in such court shall be conclusive and
binding upon the parties.
(b) Each party hereby consents to process being served in any suit,
action or proceeding of the nature referred to in subsection (a) above by
the sending of a copy thereof in accordance with the provisions of Section
17 of this Agreement. Nothing in this Section 20 shall affect the right of
any party to serve process in any manner permitted by law.
<PAGE>
IN WITNESS WHEREOF, the Company, BA and the Seller have executed this
Agreement as of the day and year first above written.
US AIRWAYS GROUP, INC.
By: ________________________________
Name:
Title:
BRITISH AIRWAYS PLC
By: ________________________________
Name:
Title:
BRITAIR ACQUISITION CORP. INC.
By: ________________________________
Name:
Title:
<PAGE>
Annex 4(c)
The Underwriter has been informed by the Seller that compliance with
Section 7.1(b)(i) of the Investment Agreement requires that the Common Shares
shall be sold in an underwritten public offering, primarily in the United
States, and that in order to satisfy that requirement BA and the Seller are
relying on the Underwriter to comply, and the Underwriter agrees that it will
comply, in connection with the resale by the Underwriter of the Common Shares,
with the following requirements:
(a) The Common Shares shall be offered to the public in a manner consistent
with the procedures that have been employed by the Underwriter in an
underwritten public offering of common stock;
(b) The Underwriter shall not sell more than 4,000,000 Common Shares to any
person; and
(c) Not more than an aggregate of 3,000,000 Common Shares shall be offered
or sold by the Underwriter outside the United States and such offers and
sales are made only to foreign institutional investors set forth on Annex
3(c) hereto (which Annex 3(c) will be agreed prior to execution of the
Underwriting Agreement by Lazard Freres & Co. LLC & Gleacher NatWest, Inc.)
<PAGE>
Annex 7(a)(i)
List of Underwriters
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
