Registration No. 333 -[ ]
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 2000
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
US AIRWAYS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 53-0218143
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
2345 CRYSTAL DRIVE, ARLINGTON, VIRGINIA 22227
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(703) 872-7000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
THOMAS A. MUTRYN
SENIOR VICE PRESIDENT--FINANCE AND CHIEF FINANCIAL OFFICER
US AIRWAYS, INC.
2345 CRYSTAL DRIVE
ARLINGTON, VIRGINIA 22227
(703) 872-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
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<S> <C> <C>
LAWRENCE M. NAGIN SETH E. JACOBSON
EXECUTIVE VICE PRESIDENT--CORPORATE AFFAIRS SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
AND GENERAL COUNSEL 333 W. WACKER DR.
US AIRWAYS, INC. CHICAGO, ILLINOIS 60606
2345 CRYSTAL DRIVE (312) 407-0700
ARLINGTON, VIRGINIA 22227
(703) 872-7000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434 under the Securities Act, please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Each Class Amount to be Aggregate Price Aggregate Amount of
of Securities to be Registered Registered(1) Per Unit(1) Offering Price(2) Registration Fee(3)
<S> <C> <C> <C> <C>
Pass Through Certificates -- -- $1,200,000,000(4) $214,463(5)
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(1) Omitted pursuant to Rule 457(o) under the Securities Act of 1933.
(2) Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(o).
(3) Pursuant to Rule 457(o), the registration fee has been calculated
on the basis of the maximum aggregate offering price of the
securities listed.
(4) Of the $1,200,000,000 of securities being registered hereunder,
pursuant to Rule 429(b) under the Securities Act of 1933, an
aggregate of $387,640,000 of securities are being carried forward
from the registrant's prior registration statement on Form S-3 (SEC
File No. 333-79825).
(5) In connection with the prior registration statement, registration
fees of approximately $107,764 previously were paid with respect to
the $387,640,000 of securities being carried forward herewith.
</TABLE>
Pursuant to Rule 429 under the Securities Act of 1933, the
prospectus set forth herein also relates to securities registered pursuant
to the prior registration statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT WILL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT WILL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
$1,200,000,000
US AIRWAYS, INC.
PASS THROUGH CERTIFICATES
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This prospectus relates to pass through certificates that will be
issued by one or more trusts. We will form each trust and a national or
state bank or trust company will act as trustee. The trustee will hold all
property owned by a trust in trust for the benefit of holders of pass
through certificates issued by that trust. Each pass through certificate
issued by a trust will represent a beneficial interest in all property held
by that trust. We will describe the specific terms of any offering of pass
through certificates in a prospectus supplement to this prospectus. You
should read this prospectus and the applicable prospectus supplement
carefully before you invest.
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This prospectus may not be used to consummate sales of pass through
certificates unless accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation
to the contrary is a criminal offense.
The date of this prospectus is [ ], 2000.
TABLE OF CONTENTS
Forward Looking Statements............................................ 1
Summary............................................................... 2
US Airways............................................................ 6
Ratio of Earnings to Fixed Charges.................................... 7
Use of Proceeds....................................................... 8
Description of the Certificates....................................... 8
Description of the Secured Promissory Notes........................... 22
U.S. Income Tax Matters............................................... 27
ERISA Considerations.................................................. 30
Plan of Distribution.................................................. 30
Selling Certificateholders............................................ 31
Legal Opinions........................................................ 32
Experts............................................................... 32
Where You Can Find More Information................................... 33
Incorporation of Certain Documents by Reference....................... 34
FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement delivered with this
prospectus and the information incorporated by reference include
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. We prepare forward-looking statements using
estimates of future revenues, expenses, activity levels and economic and
market conditions, many of which are outside of our control. These
forward-looking statements involve risks, uncertainties and other factors
that may cause our actual results to differ materially from the results we
discuss in the forward-looking statements. These risks, uncertainties and
other factors include, but are not limited to:
o economic conditions;
o labor costs;
o financing costs;
o aviation fuel costs;
o the anticipated merger of our parent company, US Airways
Group, Inc., and a subsidiary of UAL Corporation;
o competitive pressures on pricing--particularly from
low-cost, low-fare competitors;
o weather conditions;
o governmental legislation;
o consumer perceptions of our products;
o demand for air transportation in the markets in which we
operate;
o other operational matters discussed in this prospectus; and
o other risks and uncertainties described from time to time in
reports we periodically file with the SEC.
The preparation of forward-looking statements also involves other
factors and assumptions not identified above. If the assumptions used to
prepare the forward-looking statements prove incorrect, the actual results
may differ materially from the results discussed.
SUMMARY
THE OFFERING
This prospectus and each supplement to this prospectus describe US
Airways' offering of pass through certificates to help finance or refinance
aircraft that we own or lease. For convenience, throughout this prospectus,
the words we, us, ours or similar words refer to US Airways.
The remainder of this prospectus and the related prospectus
supplement will describe the offering of the pass through certificates in
more detail. We will begin by describing the pass through certificates and
the pass through trusts that issue the pass through certificates. We will
also describe the various agreements relating to the certificates. This
prospectus then describes the secured promissory notes that the pass
through trusts will acquire and, in the case of promissory notes secured by
aircraft leased to us, the owner trusts that issue those secured promissory
notes.
CERTIFICATES
We may offer and sell pass through certificates from time to time
by this prospectus. For convenience, we may:
o refer to "pass through certificates" as "certificates;" and
o refer to the holder of a "pass through certificate" as a
"certificateholder."
Pass through certificates are securities that evidence an
ownership interest in a pass through trust. The holders of the certificates
issued by a pass through trust will be the beneficiaries of that trust. A
certificateholder's beneficial interest in a pass through trust will be a
pro rata interest in the property of that trust equal to the ratio of the
value of all of the certificates owned by the holder to the value of all of
the certificates issued by that trust. Each certificate will represent a
beneficial interest only in the property of the pass through trust that
issued the certificate. A certificate will not represent an interest in, or
rights to, the property of any pass through trust other than the pass
through trust that issued the certificate.
Multiple series of certificates may be issued. If more than one
series of certificates is issued, each series of certificates will be
issued by a separate pass through trust. The economic terms of any series
of certificates will be described in the prospectus supplement relating to
that series of certificates.
The prospectus supplement relating to a series of certificates
will be delivered with this prospectus. The prospectus supplement will
describe, among other things, the property that will be held by each pass
through trust. This property will include promissory notes secured by
aircraft we own or lease. Payments of principal and interest on the secured
promissory notes owned by a pass through trust will be passed through to
holders of certificates issued by that trust in accordance with the terms
of the pass through trust agreement pursuant to which the trust was formed.
If certificates of any series are entitled to the benefits of a
liquidity facility, insurance policy, an instrument to hedge interest rate
risk, or other form of credit enhancement, the prospectus supplement
relating to that series will describe the terms of the liquidity facility,
the insurance policy, interest rate swap or other hedging instrument, or
other form of credit enhancement.
A liquidity facility is a revolving credit agreement, letter of
credit, bank guarantee or other instrument or agreement that will increase
the likelihood that the certificateholders will receive timely payments of
interest in respect of the certificates. While a liquidity facility is
designed to increase the likelihood of the timely payment of interest, it
is not a guarantee of the timely or ultimate payment of principal.
An insurance policy may be structured to guarantee both the
payment of interest and principal in whole or in part on the final maturity
date or earlier.
If certificates of any series bear floating rate interest, the
prospectus supplement relating to that series will describe the terms of
any applicable interest rate swap or other hedging instrument that may be
used in the transaction. An interest rate swap or other hedging instrument
may be structured to convert floating rate interest into fixed rate
interest or to provide other protection against interest rate volatility.
We may offer and sell up to $1,200,000,000 of aggregate initial
offering price of certificates pursuant to this prospectus and related
prospectus supplements. The initial offering price may be denominated in
United States dollars or foreign currencies based on the applicable
exchange rate at the time of sale.
PASS THROUGH TRUSTS
We will form a separate pass through trust to issue each series of
certificates. A national or state bank or trust company will act as trustee
for each pass through trust. Each pass through trust will be governed by a
trust instrument that creates the trust and sets forth the powers of the
trustee and the rights of the beneficiaries. The trust instrument for each
pass through trust will consist of a basic pass through trust agreement and
a supplement to the basic pass through trust agreement between us and the
pass through trustee.
Unless otherwise stated in a prospectus supplement, State Street
Bank and Trust Company of Connecticut, National Association will be the
trustee of each pass through trust. The performance and obligations of
State Street Bank and Trust Company of Connecticut, N.A., under the pass
through trust agreement will be guaranteed by its parent, State Street Bank
and Trust Company.
Each pass through trust will pass through to holders of its
certificates payments that it receives on the property that it owns. The
property of each pass through trust may consist of:
o secured promissory notes of one or more series; and
o other property described in the applicable prospectus
supplement.
SECURED PROMISSORY NOTES
The secured promissory notes owned by a pass through trust may
consist of any combination of:
o promissory notes issued by an owner trust and secured by an
aircraft owned by that trust and leased to us; and
o promissory notes issued by us and secured by an aircraft
owned by us.
We refer to promissory notes secured by an aircraft leased to us
as "leased aircraft notes" and to promissory notes secured by aircraft
owned by us as "owned aircraft notes."
Leased Aircraft Notes. Except as specified in a prospectus
supplement, leased aircraft notes will be issued by a bank, trust company,
financial institution or other entity solely in its capacity as owner
trustee in a leveraged lease transaction. In a leveraged lease transaction,
one or more persons will form an owner trust to acquire an aircraft. The
owner trust will then lease the aircraft to us. In the leasing industry,
the person that is the beneficiary of the owner trust is referred to as an
owner participant. The owner participant will contribute a portion of the
purchase price of the aircraft to the owner trust. The transaction is
called a "leveraged" lease because the remainder of the owner trust's
purchase price of the aircraft is financed through the issuance of
indebtedness in the form of leased aircraft notes. Leased aircraft notes
may also be issued to refinance an aircraft previously financed in a
leveraged lease transaction or otherwise.
Leased aircraft notes relating to each leased aircraft will be
issued pursuant to a separate indenture and security agreement between the
owner trustee and a bank, trust company, financial institution or other
entity, as loan trustee. The loan trustee under a leased aircraft indenture
will act as a trustee for the holders of the leased aircraft notes issued
under that leased aircraft indenture.
In a leveraged lease transaction, we will pay or advance rent and
other amounts to the owner trustee in its capacity as lessor under the
lease. The owner trustee will use the payments and certain other amounts
received by it to make payments of principal and interest on the leased
aircraft notes. The owner trustee also will assign its rights to receive
basic rent and certain other payments to the loan trustee as security for
its obligations to pay principal of, premium, if any, and interest on the
secured promissory notes. Payments or advances made under a lease and
related agreements will at all times be sufficient to make scheduled
payments of principal of, and interest on, the leased aircraft notes issued
to finance the aircraft subject to that lease.
We will not have any obligation to pay principal of, or interest
on, the leased aircraft notes. Holders of leased aircraft notes will not
have recourse against us for the payment of principal of, or interest on,
the leased aircraft notes.
Owned Aircraft Notes. We may finance or refinance aircraft that we
own through the issuance of owned aircraft notes. We will issue owned
aircraft notes relating to each owned aircraft under a separate indenture
and security agreement. Each separate indenture and security agreement
relating to owned aircraft notes will be between us and a bank, trust
company, financial institution or other entity, as loan trustee. We will
refer to the indenture and security agreement entered into in connection
with the issuance of owned aircraft notes as an owned aircraft indenture.
The loan trustee under an owned aircraft indenture will act as a trustee
for the holders of the owned aircraft notes issued under that owned
aircraft indenture.
Holders of owned aircraft notes will have recourse against us for
payment of principal of, and interest on, the owned aircraft notes. Because
we often refer to owned aircraft indentures and leased aircraft indentures
together, we sometimes refer to them collectively as the indentures.
DELAYED FINANCING
If any portion of the proceeds of an offering of a series of
certificates is not used to purchase secured promissory notes on the date
the certificates are issued, those proceeds will be temporarily invested in
other property such as short-term securities, invested with a depositary,
or held in an escrow arrangement pending the purchase of secured promissory
notes. These arrangements and this additional property will be described in
the prospectus supplement.
CASH FLOW STRUCTURE
Set forth below is a diagram illustrating the cash flows relating
to the certificates. This diagram assumes that the pass through trustees
enter into an intercreditor agreement, but does not include the effect of
any liquidity facility or similar credit enhancements, any interest rate
swap or other hedging instrument, any prefunding arrangements, or any
insurance policy, each of which will be described in the prospectus
supplement if they are applicable.
[Diagram omitted, which shows that we will pay to the loan trustee
for leased aircraft and owned aircraft (a) the lease rental payments, which
are assigned by the owner trustee, on leased aircraft and (b) the mortgage
payments on owned aircraft. From those lease rental payments and mortgage
payments, the loan trustee will make secured promissory note payments on
the series A, the series B and the series C secured promissory notes with
respect to all aircraft to the subordination agent. Excess rental payments
will be paid by the loan trustee to the lessors for leased aircraft. From
those secured promissory note payments, the subordination agent will pay
principal, premium, if any, and interest to the pass through trustee for
the class A trust, the pass through trustee for the class B trust and the
pass through trustee for the class C trust, which in turn will pass this
principal, premium, if any, and interest through to the holders of class A
certificates, the holders of class B certificates and the holders of class
C certificates, respectively.]
TRANSACTION STRUCTURE FOR LEASED AIRCRAFT
Set forth below is a diagram illustrating cash flows that we
expect to occur on the closing date for a leveraged lease financing. We
anticipate that separate transactions similar to the transaction
illustrated in the diagram will occur for each leased aircraft financed
with the proceeds of the offering of the certificates. The structure
illustrated below may change, in which case a revised diagram will be
included in the prospectus supplement.
[Diagram omitted, which shows leased aircraft notes will be issued
by an owner trustee in a leveraged lease transaction. The diagram shows
that we will sell the leased aircraft to an owner trust that will, in turn,
lease the aircraft back to us. The owner participant is the beneficial
owner of the owner trust and contributes a portion of the purchase price of
the aircraft. The owner trust will enter into an indenture with the loan
trustee providing for a security interest in the leased aircraft, the
assignment of the lease and the issuance of secured promissory notes to
finance the remaining portion of the purchase price of the aircraft. The
owner trustee will sell the series A, series B and series C secured
promissory notes to the class A, class B and class C pass through trusts,
respectively. The class A, class B and class C pass through trusts will
sell certificates to series A, series B and series C certificateholders,
respectively, for cash. The proceeds from the sale of the certificates will
be passed through from the class A, class B and class C pass through trusts
to the loan trustee who in turn will forward the proceeds to the owner
trust as payment for the secured promissory notes.]
TRANSACTION STRUCTURE FOR OWNED AIRCRAFT
Set forth below is a diagram illustrating cash flows that we
expect to occur on the closing date for an owned aircraft financing. We
anticipate that separate transactions similar to the transaction
illustrated in the diagram will occur for each owned aircraft financed with
the proceeds of the offering of the certificates. The structure illustrated
below may change, in which case a revised diagram will be included in the
prospectus supplement.
[Diagram omitted, which shows that we may finance or refinance
aircraft that we own through the issuance of owned aircraft notes. The
diagram also shows that we will enter into an indenture with the loan
trustee providing for a security interest in the owned aircraft and the
issuance of secured promissory notes. We will sell the series A, series B
and series C secured promissory notes to the class A, class B and class C
pass through trusts, respectively. The class A, class B and class C pass
through trusts will sell certificates to class A, class B and class C
certificateholders, respectively, for cash. The proceeds from the sale of
the certificates will be passed through from the class A, class B and class
C pass through trusts to the loan trustee who will in turn forward the
proceeds to us as payment for the secured promissory notes. ]
ADDITIONAL INFORMATION
We will describe the specific terms of each series of certificates
that we may offer and sell from time to time in a prospectus supplement.
US AIRWAYS
We are a certificated air carrier engaged primarily in the
business of transporting passengers, property and mail. We are the
principal operating subsidiary of our parent, US Airways Group, Inc.,
accounting for approximately 88% of our parent's consolidated operating
revenues for 1999.
We carried approximately 56 million passengers in 1999 and
currently rank as the sixth largest domestic air carrier, as ranked by
total revenue passenger miles, based on our review and analysis of our and
other airlines' press releases. Eight air carriers that operate under the
trade name "US Airways Express" code share with us. Under a code share
arrangement, one carrier places its designator code and sells tickets on
flights of another carrier. Our combined system served 205 destinations
worldwide as of June 2000. As of June 30, 2000, we had approximately 42,650
full-time equivalent employees.
Merger
US Airways Group has entered into an Agreement and Plan of Merger
with UAL Corporation, United Airlines' parent corporation, and Yellow
Jacket Acquisition Corp., a wholly-owned subsidiary of UAL which has been
formed for the purpose of this merger, pursuant to which the merger
subsidiary will be merged into US Airways Group. As a result, US Airways
Group would be the surviving corporation and would become a wholly-owned
subsidiary of UAL, and we would continue to be a wholly-owned subsidiary of
US Airways Group. Under this structure, UAL would not be obligated to
assume any of our obligations under the leases, participation agreements,
indentures, pass through trust agreements, or any other obligations which
we have with respect to the certificates or the secured promissory notes.
Consummation of the merger is subject to various conditions set
forth in the Agreement and Plan of Merger, including, but not limited to,
the receipt of regulatory approvals and approval by the stockholders of US
Airways Group. US Airways Group has scheduled a special meeting of its
stockholders for October 12, 2000 to vote on the merger agreement with UAL
Corporation. At this time, we cannot predict the outcome of the regulatory
and other approvals necessary for the consummation of the merger, nor can
we predict what effect, if any, the merger might have on us, our
operations, or our relationships with our major vendors. On August 24,
2000, American Airlines gave us notice of its intent to terminate our joint
marketing relationship agreement, effective as of August 23, 2001.
If the merger between our parent and a subsidiary of UAL
Corporation is consummated, the combined company may be required to divest
some of its routes and slots for competitive reasons. To address the
potential competitive issues, US Airways Group and UAL Corporation have entered
into a Memorandum of Understanding with Robert Johnson, under which Mr.
Johnson would buy certain assets from us and create a new airline to be
called "DC Air" to operate out of Reagan National Airport. We would retain
the routes formerly operated by US Airways Shuttle and the assets necessary
to fly to our hubs at Pittsburgh, Charlotte and Philadelphia. Mr. Johnson
is the founder, chairman and chief executive officer of BET Holdings II,
Inc. and is a member of the Board of Directors of both us and our parent.
US Airways is a Delaware corporation, with its executive office
located at 2345 Crystal Drive, Arlington, Virginia 22227. Our telephone
number is (703) 872-7000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed
charges for US Airways and its subsidiary for the periods indicated:
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SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
2000 1999 1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C> <C> <C>
US Airways................................. * 3.7 1.9 2.7 2.2 1.3 1.1
</TABLE>
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* For the six months ended June 30, 2000, US Airways' earnings were
not sufficient to cover its fixed charges. Additional earnings of
$36 million would have been required to achieve a ratio of
earnings to fixed charges of 1.0.
For purposes of calculating the ratio of earnings to fixed
charges, earnings consist of pretax income, fixed charges, capitalized
interest and amortization of previously capitalized interest. Fixed charges
consist of interest expense, amortization of debt issue expense and the
portion of rental expense representative of interest expense.
USE OF PROCEEDS
Except as set forth in the applicable prospectus supplement, each
pass through trustee will use the proceeds from the sale of certificates
issued by its pass through trust to purchase one or more secured promissory
notes.
If an owner trustee issues the secured promissory notes, the owner
trustee will use the proceeds of the sale of the secured promissory notes
to finance a portion of the purchase price of an aircraft or to refinance
indebtedness or equity interests previously issued in respect of an
aircraft. When the owner trustee purchases an aircraft, it will lease the
aircraft to us.
If we issue the secured promissory notes, we will use the proceeds
from the sale of the secured promissory notes to finance the purchase of an
aircraft which we will own or to refinance indebtedness or equity interests
previously issued in respect of an aircraft.
If a pass through trustee does not use all of the proceeds of any
offering of certificates to purchase secured promissory notes on the date
those certificates are issued, the proceeds of the offering not used to
purchase secured promissory notes will be held for the benefit of the
certificateholders under arrangements that we will describe in the
applicable prospectus supplement. If the pass through trustee does not use
a portion of the proceeds to purchase secured promissory notes by the time
specified in the applicable prospectus supplement, it will return the
unused portion of the proceeds to the certificateholders.
In addition, we may offer certificates subject to delayed aircraft
financing arrangements. For example, we may cause the proceeds from the
sale of certificates to be invested with a depositary or cause the proceeds
to be held in an escrow arrangement until they are used to purchase secured
promissory notes. In these circumstances, we will describe in the
applicable prospectus supplement how the proceeds of the certificates will
be held or applied during any delayed aircraft financing period, including
any depositary or escrow arrangement.
DESCRIPTION OF THE CERTIFICATES
The following description is a summary of the terms of the
certificates that we expect will be common to all series of certificates.
We will describe the financial terms and other specific terms of any series
of certificates in a prospectus supplement. Since the terms of a specific
series of certificates may differ from the general information provided
below, you should rely on the information in the prospectus supplement
instead of the information in this prospectus if the information in the
prospectus supplement is different from the information below. To the
extent that any provision in any prospectus supplement is inconsistent with
any provision in this summary, the provision of the prospectus supplement
will control.
Because the following description is a summary, it does not
describe every aspect of the certificates, and it is subject to and
qualified in its entirety by reference to all the provisions of the pass
through trust agreement and the applicable supplements to the pass through
trust agreement. For convenience, we will refer to the pass through trust
agreement among the pass through trustee and us as the "Basic Agreement,"
and to the Basic Agreement as supplemented by the applicable supplements as
the pass through trust agreement. The form of Basic Agreement has been
filed as an exhibit to the registration statement of which this prospectus
is a part. The supplement to the Basic Agreement relating to each series of
certificates and the forms of the other agreements described in this
prospectus and the applicable prospectus supplement will be filed as
exhibits to a post-effective amendment to the registration statement of
which this prospectus is a part, a Current Report on Form 8-K, a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, as applicable, filed
by us with the SEC.
GENERAL
Except as amended by a supplement to the Basic Agreement, the
terms of the Basic Agreement generally will apply to all of the pass
through trusts that we form to issue certificates by this prospectus. We
will create a separate pass through trust for each series of certificates
by entering into a separate supplement to the Basic Agreement. Each
supplement to the Basic Agreement will contain the additional terms
governing the specific pass through trust to which it relates and, to the
extent inconsistent with the Basic Agreement, will supersede the Basic
Agreement.
Certificates will be issued pursuant to the pass through trust
agreement. Unless otherwise stated in the applicable prospectus supplement,
each pass through certificate will be issued in minimum denominations of
$1,000 or a multiple of $1,000.
Each certificate will represent a fractional undivided interest in
the property of the pass through trust that issued the pass through
certificate. Except as otherwise provided in a supplement to the Basic
Agreement, all payments and distributions made on or with respect to a pass
through certificate will be made only from the property owned by the pass
through trust that issued the pass through certificate. The certificates
will not represent an interest in or obligation of US Airways, the pass
through trustee, any of the owner trustees or loan trustees, in their
individual capacities, or any owner participant. Except as otherwise
provided in a supplement to the Basic Agreement, each holder of a pass
through certificate will be deemed to agree to look solely to the income
and proceeds from the property of the pass through trust as provided in the
pass through trust agreement.
The property of each pass through trust for which a series of
certificates will be issued will include:
o the secured promissory notes held in the pass through trust;
o all monies at any time paid on or with respect to secured
promissory notes held by the pass through trust;
o all monies due and to become due under the secured
promissory notes held by the pass through trust;
o if so specified in the relevant prospectus supplement,
rights under any escrow arrangement to withdraw the proceeds
from escrow either to purchase secured promissory notes or
to return unused proceeds to the holders of that series of
certificates;
o funds from time to time deposited with the pass through
trustee in accounts relating to that pass through trust; and
o if so specified in the relevant prospectus supplement,
rights under intercreditor agreements relating to cross-
subordination arrangements and monies receivable under a
liquidity facility, insurance policy, interest rate swap or
other hedging instrument, or other form of credit
enhancement.
As described in more detail below, the rights of a pass through
trust to receive monies due or to become due under secured promissory notes
held by that pass through trust may be subject to the effect of any
cross-subordination provisions contained in an intercreditor agreement
described in the prospectus supplement for a series of certificates.
An intercreditor agreement refers to an agreement among the pass
through trusts and, if applicable, a liquidity provider under a liquidity
facility, the issuer of a insurance policy, the provider of an interest
rate swap or other hedging instrument, and the issuer of any other
instrument providing credit enhancement, as creditors of the issuers of the
secured promissory notes owned by the pass through trusts. An intercreditor
agreement will set forth the terms and conditions upon which payments made
on or in respect of the secured promissory notes and payments made under
any liquidity facility, insurance policy, interest rate swap or other
hedging instrument, or other instrument of credit enhancement will be
received, shared and distributed among the several pass through trusts, the
liquidity provider, the issuer of the insurance policy, the entity that
provides the interest rate swap or other hedging instrument, and the issuer
of any other instrument of credit enhancement. In addition, the
intercreditor agreement will set forth agreements among the pass through
trusts, the liquidity provider, the issuer of the insurance policy, the
provider of the interest rate swap or other hedging instrument, and the
issuer of any other instrument of credit enhancement relating to the
exercise of remedies under the secured promissory notes and the indentures.
Cross-subordination refers to a concept where payments on a junior
class of secured promissory notes issued under one indenture are
distributed to a pass through trust that holds a senior class of promissory
notes issued under a different indenture. The effect of this distribution
mechanism is that holders of a junior class of promissory notes issued
under one indenture may not actually receive payments made on or with
respect to that junior class of promissory notes until the holders of
senior classes of promissory notes issued under other indentures have
received all scheduled payments on their notes. However, the subordination
provisions may permit payments to junior certificateholders after a default
on the secured promissory notes even if the more senior certificateholders
have not been repaid in full.
Secured promissory notes owned by a pass through trust may be
leased aircraft notes, owned aircraft notes or a combination of leased
aircraft notes and owned aircraft notes.
Leased aircraft notes will be issued in connection with the
leveraged lease of an aircraft to us. Except as set forth in the applicable
prospectus supplement, each leased aircraft will be leased to us under a
lease between us, as lessee, and an owner trustee, as lessor. Each owner
trustee will issue leased aircraft notes on a non-recourse basis under a
separate leased aircraft indenture between it and the applicable loan
trustee. The owner trustee will use the proceeds of the sale of the leased
aircraft notes to finance or refinance a portion of the purchase price paid
or to be paid by the owner trustee for the applicable leased aircraft. The
owner trustee will obtain the remainder of the funding for the leased
aircraft from an equity contribution from the owner participant that is the
beneficiary of the owner trust and, to the extent set forth in the
applicable prospectus supplement, additional debt secured by the applicable
leased aircraft or other sources. A leased aircraft also may be subject to
other financing arrangements. Generally, neither the owner trustee nor the
owner participant will be personally liable for any principal or interest
payable under any leased aircraft indenture or any leased aircraft notes.
In some cases, an owner participant may be required to make payments to an
owner trustee that are to be used by the owner trustee to pay principal of,
and interest on, the secured promissory notes. If an owner participant is
required to make payments to be used by an owner trustee to pay principal
of, and interest on, the secured promissory notes and the owner participant
fails to make the payment, we will be required to provide the owner trustee
with funds sufficient to make the payment. We will make payments or
advances under a lease and the related documents sufficient to pay when due
all scheduled principal and interest payments on the leased aircraft notes
issued to finance the aircraft subject to that lease.
We will issue owned aircraft notes under separate owned aircraft
indentures. We will issue owned aircraft notes in connection with the
financing or refinancing of an aircraft that we own. Owned aircraft notes
will be obligations that have recourse to us and the related aircraft. Any
owned aircraft may secure additional debt or be subject to other financing
arrangements.
An indenture may provide for the issuance of multiple series of
secured promissory notes. If an indenture provides for multiple series of
secured promissory notes, it may also provide for differing priority of
payments among the different series. We will refer to all secured
promissory notes issued under an indenture that are entitled to the same
priority of payment as a "class." Secured promissory notes issued under an
indenture may be held in more than one pass through trust, and one pass
through trust may hold secured promissory notes issued under more than one
indenture. Unless otherwise provided in a prospectus supplement, only
secured promissory notes of a single class may be held in the same pass
through trust.
Except as set forth in the prospectus supplement for any series of
certificates, interest payments on the secured promissory notes held by a
pass through trust will be passed through to the registered holders of
certificates of that pass through trust at the annual rate shown on the
cover page of the prospectus supplement for the certificates issued by that
pass through trust. The certificateholders' right to receive payments made
in respect of the secured promissory notes is subject to the effect of any
cross-subordination provisions described in the prospectus supplement for a
series of certificates.
We refer you to the prospectus supplement that accompanies this
prospectus for a description of the specific series of certificates being
offered by this prospectus and the applicable prospectus supplement,
including:
o the specific designation, title and amount of the
certificates;
o the initial public offering price, amounts and interest rate
(fixed or floating) payable on and distribution dates for
the certificates;
o the currency or currencies (including currency units) in
which the certificates may be denominated;
o the specific form of the certificates, including whether or
not the certificates are to be issued in accordance with a
book-entry system;
o a description of the secured promissory notes to be
purchased by the pass through trust issuing that series of
certificates, including (a) the period or periods within
which, the price or prices at which, and the terms and
conditions upon which the secured promissory notes may or
must be redeemed or defeased in whole or in part, by us or
an owner trustee, (b) whether the secured promissory notes
will bear interest at a fixed or floating rate, (c) the
payment priority of the secured promissory notes in relation
to any other secured promissory notes issued with respect to
the related aircraft, (d) whether the secured promissory
notes are sold at a discount below the stated principal
amount, and (e) any intercreditor or other rights or
limitations between or among the holders of secured
promissory notes of different priorities issued with respect
to the same aircraft;
o a description of the aircraft to be financed with the
proceeds of the issuance of the secured promissory notes;
o a description of the note purchase agreement setting forth
the terms and conditions upon which that pass through trust
will purchase secured promissory notes;
o a description of the indentures under which the secured
promissory notes to be purchased by that pass through trust
will be issued;
o a description of the events of default, the remedies
exercisable upon the occurrence of such events of default
and any limitations on the exercise of such remedies under
the indentures pursuant to which the secured promissory
notes to be purchased by that pass through trust will be
issued;
o if the certificates or secured promissory notes bear
floating rate interest, a description of any interest rate
swap or other hedging instrument that may be extended into;
o if the certificates relate to leased aircraft, a description
of the leases to be entered into by the owner trustees and
us, including (a) the names of the owner trustees that will
own the leased aircraft and lease the leased aircraft to us
and (b) a description of the events of default under the
leases and the remedies exercisable upon an event of
default;
o if the certificates relate to leased aircraft, a description
of the provisions of the leased aircraft indentures
governing (a) the rights of the related owner trustee and/or
owner participant to cure our failure to pay rent under the
leases and (b) any limitations on the exercise of remedies
with respect to the leased aircraft notes;
o if the certificates relate to leased aircraft, a description
of the participation agreements that will set forth the
terms and conditions upon which the owner participant, the
owner trustee, the pass through trustees, the loan trustee
and we agree to enter into a leveraged lease transaction;
o if the certificates relate to an owned aircraft, a
description of the participation agreements that will set
forth the terms and conditions upon which the applicable
pass through trustees, the loan trustee and we agree to
enter into a financing transaction for the owned aircraft;
o a description of the limitations, if any, on amendments to
leases, indentures, pass through trust agreements,
participation agreements and other material agreements
entered into in connection with the issuance of secured
promissory notes;
o a description of any cross-default provisions in the
indentures;
o a description of any agreement among the holders of secured
promissory notes, any liquidity providers, any issuer of a
insurance policy, any entity that provides an interest rate
swap or other hedging instrument and any other person
issuing an instrument of credit enhancement covering the
receipt and distribution of monies with respect to the
secured promissory notes and the enforcement of remedies
under the indentures, including a description of any
applicable intercreditor and cross-subordination
arrangements;
o a description of any cross-collateralization provisions in
the indentures;
o a description of any liquidity facility, insurance policy,
interest rate swap or other hedging instrument, or other
credit enhancement relating to the certificates;
o if the certificates relate to aircraft that have not yet
been delivered or financed, a description of any deposit or
escrow agreement or other arrangement providing for the
deposit and investment of funds pending the purchase of
secured promissory notes and the financing of an owned
aircraft or leased aircraft;
o the names of the underwriters, dealers or agents, if any,
through or to which we will sell the certificates, the
compensation, if any, of underwriters, dealers or agents and
the net proceeds from the offering of the certificates;
o the material United States federal income tax considerations
applicable to the certificates; and
o any other special terms pertaining to the certificates.
The concept of cross-default mentioned above refers to a situation
where a default under one indenture or lease automatically triggers a
default under other indentures or leases. We currently do not expect any
indentures or leases to contain cross-default provisions. The concept of
cross-collateralization mentioned above refers to the situation where an
aircraft mortgaged to secure obligations incurred under one indenture also
serves as collateral for obligations under one or more other indentures. If
the indentures that are cross-collateralized relate to aircraft that we
lease, the lease assigned to a loan trustee to secure obligations under one
indenture may also serve as collateral under one or more other indentures.
We currently do not expect any indentures to be cross-collateralized.
If any certificates are denominated in one or more foreign
currencies or currency units, the restrictions, certain United States
federal income tax considerations, specific terms and other information
with respect to the certificates and the foreign currency or currency units
will be set forth in the applicable prospectus supplement.
PAYMENTS AND DISTRIBUTIONS
We will make rental and other payments and advances for a leased
aircraft under the lease and other documents relating to that leased
aircraft. In order to secure its obligations to pay the principal of, and
interest on, the leased aircraft notes issued to finance or refinance a
portion of the purchase price of a leased aircraft, the applicable owner
trustee will assign the scheduled rental payments under the lease and may
assign certain other payments or advances under other related documents to
the applicable loan trustee. As is customary in the leveraged leasing
industry, indemnities, insurance and similar payments due under a lease and
other documents may be excluded from any assignment. Pursuant to the terms
of the applicable indenture, the loan trustee will, on behalf of the
applicable owner trustee, apply the proceeds of the payments and advances
assigned to the loan trustee to make the corresponding scheduled payments
of principal of, and interest on, the leased aircraft notes issued under
that indenture. The loan trustee will distribute payments of principal of,
and interest on, the leased aircraft notes to the pass through trustee for
each pass through trust that holds those leased aircraft notes. After the
loan trustee has made all scheduled payments of principal of, and interest
on, the leased aircraft notes issued under the applicable indenture, the
loan trustee will, except under certain circumstances, pay the remaining
balance, if any, to the owner trustee for the benefit of the owner
participant. Distribution of payments by a loan trustee to a pass through
trustee may be affected by the terms of an intercreditor agreement.
We will make scheduled payments of principal of, and interest on,
the unpaid amount of the owned aircraft notes to the loan trustee under the
indenture pursuant to which those owned aircraft notes were issued. The
loan trustee will distribute payments of principal of, and interest on, the
owned aircraft notes to the pass through trustee for each pass through
trust that holds those owned aircraft notes.
Each certificateholder will be entitled to receive a pro rata
share of any distribution in respect of payments of principal of, and
interest on, the secured promissory notes held in the pass through trust
that issued its certificate. A pass through trustee's right to receive
payments distributed by a loan trustee may be affected by the terms of an
intercreditor agreement. The terms of any intercreditor agreement and any
cross-subordination will be in the prospectus supplement relating to a
series of certificates.
Each pass through trust will receive scheduled payments of
principal of, and interest on, the secured promissory notes held by it and
will, in turn, distribute those scheduled payments to its
certificateholders on the regular distribution dates and in the currencies
specified in the prospectus supplement relating to its certificates.
However, a pass through trust may not be able to distribute scheduled
payments of principal and interest to its certificateholders as scheduled
in the prospectus supplement if the secured promissory notes held by the
pass through trust are in default or if payments are diverted to other pass
through trusts in accordance with an intercreditor agreement. In addition
to distributions of scheduled payments of principal and interest on regular
distribution dates, if the applicable series of certificates is entitled to
the benefits of a liquidity facility, insurance policy, interest rate swap
on other hedging instrument, or other form of credit enhancement, the pass
through trustee will also distribute on a regular distribution date
payments received as a result of a drawing or other payments made under a
liquidity facility, insurance policy, interest rate swap or other hedging
instrument, or other form of credit enhancement. The prospectus supplement
relating to the certificates will describe the terms of any liquidity
facility, insurance policy, interest rate swap or other hedging instrument,
or other form of credit enhancement.
A pass through trustee may from time to time receive payments of
principal of, and interest on, secured promissory notes on dates other than
scheduled payment dates. These special payments may occur if the secured
promissory notes owned by the pass through trust are sold or redeemed
early, or if a scheduled payment is paid more than five days late. Each
pass through trustee will distribute special payments to its
certificateholders on dates determined as described in the applicable
prospectus supplement. In the event a special payment is received by a pass
through trustee, the pass through trustee will mail a notice to its
certificateholders of record stating the anticipated distribution date for
the payment. Scheduled payments that are not more than five days late will
be treated as regular payments and paid to certificateholders of record on
the regular distribution dates.
If any regular distribution date or special distribution date is
not a business day, distributions scheduled to be made on that date may be
made on the next succeeding business day without additional interest.
POOL FACTORS
Unless otherwise described in the applicable prospectus
supplement, the "pool balance" for each pass through trust or for the
certificates issued by any pass through trust indicates, as of any date,
the portion of the original aggregate face amount of the certificates
issued by that pass through trust that has not been distributed to
certificateholders. The pool balance for each pass through trust as of any
distribution date will be computed after giving effect to any distribution
to certificateholders to be made on that date.
Unless otherwise described in the applicable prospectus
supplement, the "pool factor" for a pass through trust as of any
distribution date for that trust is the quotient (rounded to the seventh
decimal place) computed by dividing (a) the pool balance by (b) the
aggregate original face amount of the certificates issued by that pass
through trust. The pool factor for a pass through trust as of any
distribution date will be computed after giving effect to the payment of
principal, if any, on the secured promissory notes or other property of
that pass through trust and distribution to certificateholders of the
payment of principal to be made on that date. The pool factor for a pass
through trust initially will be 1.0000000. The pool factor for a pass
through trust will decline as described in this prospectus and the related
prospectus supplement to reflect reductions in the pool balance of that
pass through trust. As of any distribution date for a pass through trust,
each certificateholder will have a pro rata share of the pool balance of
that pass through trust equal to the product obtained by multiplying the
original denomination of the holder's pass through certificate by the pool
factor for the pass through trust that issued that pass through
certificate.
Each pass through trust will have a separate pool factor. We
expect the pool factor for each pass through trust to decline in proportion
to the scheduled repayments of principal on the secured promissory notes
held by that pass through trust. However, the pool factor for a pass
through trust will not decline in proportion to scheduled repayments of
principal if there is an early redemption or purchase of secured promissory
notes held by a pass through trust or if a default occurs in the repayment
of secured promissory notes held by a pass through trust. In the event of a
redemption, purchase or default, the pool factor and the pool balance of
each pass through trust affected by the redemption, purchase or default
will be recomputed.
REPORTS TO CERTIFICATEHOLDERS
The pass through trustee will include with each distribution to
certificateholders a statement setting forth the following information:
o the amount of the distribution allocable to principal and
the amount allocable to premium, if any;
o the amount of the distribution allocable to interest;
o the pool balance and the pool factor for the pass through
trust after giving effect to the distribution; and
o any additional or different information as may be described
in the applicable prospectus supplement.
As long as the certificates are registered in the name of DTC or
its nominee, on the record date prior to each distribution to
certificateholders, the pass through trustee will request from DTC a
securities position listing containing the names of all DTC participants
reflected on DTC's books as holding interests in the certificates on that
record date. On each distribution date, the applicable pass through trustee
will mail to each DTC participant holding certificates the statement
described above and will make available additional copies as requested by
the DTC participants for forwarding to certificateholders.
After the end of each calendar year, each pass through trustee
will prepare for each person that was a holder of one or more of its pass
through certificates at any time during the preceding calendar year a
report containing the sum of the amount of distributions allocable to
principal, premium and interest with respect to that pass through trust for
the preceding calendar year or, in the event the person was a holder of a
pass through certificate during only a portion of the preceding calendar
year, for the applicable portion of the preceding calendar year. In
addition, each pass through trustee will prepare for each person that was a
holder of one or more of its pass through certificates at any time during
the preceding calendar year any other items that are readily available to
the pass through trustee and which a certificateholder reasonably requests
as necessary for the purpose of preparing its federal income tax returns.
The reports and other items described in this section will be prepared on
the basis of information supplied to the pass through trustee by DTC
participants and will be delivered by the pass through trustee to DTC
participants to be available for forwarding by DTC participants to
certificateholders in the manner described above.
If the certificates are issued in the form of physical
certificates, the pass through trustee of that pass through trust will
prepare and deliver the information described above to each record holder
of a pass through certificate issued by that pass through trust as the name
and period of ownership of the holder appears on the records of the
registrar of the certificates.
VOTING OF SECURED PROMISSORY NOTES
A pass through trustee has the right to vote and give consents and
waivers with respect to the secured promissory notes held by that pass
through trust. However, the pass through trustee's right to vote and give
consents or waivers may be restricted or may be exercisable by another
person in accordance with the terms of an intercreditor agreement, as
described in the applicable prospectus supplement. The pass through trust
agreement will set forth:
o the circumstances in which a pass through trustee may direct
any action or cast any vote with respect to the secured
promissory notes held in its pass through trust at its own
discretion;
o the circumstances in which a pass through trustee will seek
instructions from its certificateholders; and
o if applicable, the percentage of certificateholders required
to direct the pass through trustee to take action.
If the holders of certificates are entitled to the benefits of a
liquidity facility, and the liquidity facility is used to make any payments
to certificateholders, the provider of the liquidity facility may be
entitled to exercise rights to vote or give consents and waivers with
respect to the secured promissory notes held by the pass through trust that
issued the certificates, as described in the applicable prospectus
supplement. If the holders of certificates are entitled to the benefits of
a insurance policy or other form of credit enhancement, the issuer of such
policy or other form of credit enhancement may be entitled to exercise
rights to vote or give consents and waivers with respect to the secured
promissory notes held by the pass through trust that issued the
certificates, as described in the applicable prospectus supplement. If the
holders of certificates are entitled to the benefits of an interest rate
swap or other hedging instrument, the counterparty to such swap or other
hedging instrument may be entitled to exercise rights to vote or give
consents and waivers with respect to the secured promissory notes held by
the pass through trust that issued the certificates, as described in the
applicable prospectus supplement.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The prospectus supplement will describe the events of default that
can occur under the pass through trust agreement and under the indentures
relating to the secured promissory notes held by the related pass through
trust.
Defaults under a leased aircraft indenture will include events of
default under the lease that is assigned as security under that leased
aircraft indenture. The owner trustee and the owner participant may have
rights to cure the defaults under a leased aircraft indenture that result
from a default under the lease. The applicable prospectus supplement will
describe these cure rights. Unless otherwise provided in a prospectus
supplement, with respect to any certificates entitled to the benefits of a
liquidity facility, insurance policy, interest rate swap or other hedging
instrument, or other instrument of credit enhancement, a drawing or other
payment made under that liquidity facility, insurance policy, interest rate
swap or other hedging instrument, or other instrument of credit enhancement
for the purpose of making a payment of interest as a result of our failure
to have made a corresponding payment under the lease will not cure a
default related to our failure to make the payment.
Unless otherwise provided in a prospectus supplement, all of the
secured promissory notes issued under the same indenture will relate to a
specific aircraft and there will be no cross-collateralization or
cross-default provisions in the indentures. This means that events
resulting in a default under a particular indenture will not necessarily
result in a default under any other indenture. If a default occurs in fewer
than all of the indentures, payments of principal of, and interest on, the
secured promissory notes issued under indentures with respect to which a
default has not occurred will continue to be made as originally scheduled.
The pass through trustees, as holders of the secured promissory
notes, may enter into an intercreditor agreement that may have the
practical effect of subordinating a junior class of secured promissory
notes issued under one indenture to senior classes of secured promissory
notes under other indentures. This concept, referred to as
cross-subordination, is described above under "Description of the
Certificates--General" and, if applicable, will be described in the
applicable prospectus supplement.
If the secured promissory notes outstanding under an indenture are
held by more than one pass through trust, then the ability of the holders
of certificates issued by any one pass through trust to cause the loan
trustee to take actions under an indenture may be limited. In particular, a
pass through trustee's ability to direct a loan trustee to take action
under an indenture will depend, in part, on the proportion of (a) the
aggregate principal amount of the secured promissory notes outstanding
under the indenture that are held in that pass through trust to (b) the
aggregate principal amount of all secured promissory notes outstanding
under the indenture. This means that a pass through trustee may not have
the ability to direct a loan trustee to accelerate secured promissory notes
or exercise remedies under an indenture without the concurrence of the
other pass through trustees. In addition, the ability of a pass through
trustee to exercise remedies under an indenture may be limited by the terms
of an intercreditor agreement.
If the secured promissory notes outstanding under an indenture are
held by more than one pass through trust, then each pass through trust will
hold secured promissory notes with different terms than the secured
promissory notes held in the other pass through trusts. In these
circumstances, the holders of certificates issued by different pass through
trusts may have divergent or conflicting interests. As long as the same
institution acts as the pass through trustee of each pass through trust, in
the absence of instructions from the holders of certificates issued by each
pass through trust, the pass through trustee could for the same reason be
faced with a potential conflict of interest upon a default under an
indenture. If the pass through trustee is faced with a conflict of interest
because that pass through trustee acts as pass through trustee for multiple
trusts, the pass through trustee faced with the conflict will resign as
trustee of one or all the pass through trusts, and one or more successor
pass through trustees will be appointed in accordance with the terms of
each pass through trust agreement.
The prospectus supplement for a series of certificates will
describe whether and under what circumstances a pass through trustee may or
will sell all or part of the secured promissory notes held in the pass
through trust. A pass through trustee's right to sell secured promissory
notes may be restricted or may be exercisable by another person, if the
applicable series of certificates are subject to any intercreditor,
subordination or similar arrangements. If the certificates of any series
are subject to any intercreditor, subordination or similar arrangement, the
proceeds from the sale of the related secured promissory notes will be
distributed as contemplated by those arrangements. To the extent received
by any pass through trustee, proceeds from the sale of secured promissory
notes will be treated as special payments, deposited in a special payments
accounts and distributed to the certificateholders of the pass through
trust on a special distribution date.
The market for secured promissory notes in default may be very
limited, and neither we nor the pass through trustee can assure you that
they could be sold for a reasonable price. In addition, as long as the same
institution acts as pass through trustee of multiple pass through trusts,
it may be faced with a conflict in deciding which secured promissory notes
to sell to available buyers. If the pass through trustee sells any secured
promissory notes with respect to which a default under an indenture exists
for less than their outstanding principal amount, the certificateholders of
that pass through trust will receive a smaller amount of principal
distributions than anticipated and will not have any claim for the
shortfall against us, any owner trustee, any owner participant or any pass
through trustee. Neither a pass through trustee nor the holders of
certificates will be able to take any action with respect to any secured
promissory notes unless a default has occurred under the indenture relating
to those secured promissory notes.
Following a default under an indenture, all payments received by a
pass through trustee or with respect to secured promissory notes issued
under the indenture, other than scheduled payments received on or within
five days of the date the scheduled payments are due, will be treated as
special payments and deposited in a special payments account. All amounts
deposited in the special payments account will be distributed to the
certificateholders on a special distribution date. The rights of any pass
through trustee to receive payments made on or with respect to any secured
promissory note following a default under any indenture may be limited by
intercreditor, subordination or similar arrangements.
Any funds held in the special payments account for a pass through
trust will, to the extent practicable, be invested and reinvested by the
pass through trustee in permitted short-term investments pending the
distribution of those funds on a special distribution date. Permitted
investments will be specified in the related prospectus supplement.
The Basic Agreement provides that the pass through trustee of each
pass through trust will give to the certificateholders of that pass through
trust notice of all uncured or unwaived defaults known to it with respect
to that pass through trust. The Basic Agreement requires each pass through
trustee to provide the notice of default within 90 days after the
occurrence of the default. However, except in the case of default in the
payment of principal, premium, if any, or interest on any of the secured
promissory notes held in a pass through trust, the pass through trustee
will be protected in withholding a notice of default if it in good faith
determines that withholding the notice is in the interest of the
certificateholders. The term "default" as used in this paragraph means only
the occurrence of a default under an indenture with respect to secured
promissory notes held in a pass through trust as described above, except
that in determining whether any default under an indenture has occurred,
any related grace period or notice will be disregarded.
The Basic Agreement requires the pass through trustee to act with
a specified standard of care while a default is continuing under an
indenture. In addition, the Basic Agreement contains a provision entitling
the pass through trustee to be offered reasonable security or
indemnification by the certificateholders of the pass through trust before
proceeding to exercise any right or power under the Basic Agreement at the
request of those certificateholders.
The prospectus supplement for a series of certificates will
specify the percentage of certificateholders entitled to waive, or to
instruct the pass through trustee to waive, any past default with respect
to the related pass through trust. The prospectus supplement for a series
of certificates also will specify the percentage of certificateholders
entitled to waive, or to instruct the pass through trustee or the loan
trustee to waive, any past default, or rescind or annul any direction given
under any indenture.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
We will be prohibited from consolidating with or merging into any
other corporation or transferring substantially all of our assets as an
entirety to any other entity unless:
o the surviving successor corporation or transferee is validly
existing under the laws of the United States or any state of
the United States or the District of Columbia;
o the surviving successor corporation or transferee holds an
air carrier operating certificate issued pursuant to Chapter
447 of Title 49, United States Code for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of
cargo, if, and so long as, such status is a condition of
entitlement to the benefits of Section 1110 of the
Bankruptcy Code;
o the surviving successor corporation or transferee expressly
assumes all of our obligations contained in the Basic
Agreement and any supplement to the Basic Agreement, the
note purchase agreement, any indentures, any participation
agreements and, with respect to aircraft leased by us, the
applicable leases; and
o we have delivered a certificate and an opinion or opinions
of counsel indicating that the transaction, in effect,
complies with these conditions.
MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting us and the pass
through trustee of each pass through trust to enter into a supplement to
the pass through trust agreement, without the consent of the holders of any
of the certificates issued by a pass through trust in order to do the
following, among others:
o to provide for the formation of a pass through trust and the
issuance of a series of certificates and to set forth the
terms of the certificates;
o to evidence the succession of another corporation or entity
to us and the assumption by that corporation or entity of
our obligations under the pass through trust agreement;
o to add to our covenants for the benefit of holders of
certificates, or to surrender any right or power in the pass
through trust agreement conferred upon us;
o to cure any ambiguity or correct or supplement any defective
or inconsistent provision of the pass through trust
agreement, so long as those changes will not materially
adversely affect the interests of the holders of the
certificates, or to cure any ambiguity or correct any
mistake or, to give effect to or provide for replacement
liquidity facilities, if applicable, to the certificates;
o to comply with any requirement of the SEC, any applicable
law, rules or regulations of any exchange or quotation
system on which any certificates may be listed or of any
regulatory body;
o to modify, eliminate or add to the provisions of the pass
through trust agreement to the extent necessary to continue
the qualification of the pass through trust agreement under
the Trust Indenture Act of 1939, and to add to the pass
through trust agreement other provisions as may be expressly
permitted by the Trust Indenture Act excluding, however, the
provisions referred to in section 316(a)(2) of the Trust
Indenture Act as in effect at the date of the Basic
Agreement or any corresponding provision in any similar
Federal statute enacted after that date;
o to provide for a successor pass through trustee or to add to
or change any provision of the pass through trust agreement
as necessary to facilitate the administration of the pass
through trusts created under the pass through trust
agreement by more than one pass through trustee;
o to provide certain information to the pass through trustee
as required in the pass through trust agreement;
o to add to or change the pass through trust agreement to
facilitate the issuance of any certificates in bearer form
or to facilitate or provide for the issuance of any
certificates in global form in addition to or in place of
certificates in certificated form;
o to provide for the delivery of certificates or any
supplement to the Basic Agreement in or by means of any
computerized, electronic or other medium, including computer
diskette; and
o to make any other amendments or modifications to the Basic
Agreement so long as those amendments or modifications apply
only to certificates of a series issued after the date of
the amendment or modification.
No supplement to the pass through trust agreement may be made that
will adversely affect the status of any pass through trust as a grantor
trust for United States federal income tax purposes without the consent of
the certificateholders.
The Basic Agreement also contains provisions permitting us and the
pass through trustee of each pass through trust, with the consent of a
majority in interest of the certificateholders of the pass through trust
and, with respect to any aircraft leased by us, with the consent of the
applicable owner trustee, which cannot be unreasonably withheld, to execute
a supplement to the pass through trust agreements adding any provisions to
or changing or eliminating any of the provisions of the Basic Agreement, to
the extent relating to that pass through trust, and the applicable pass
through trust supplement, or modifying the rights of the
certificateholders, except that no supplement may, without the consent of
each affected certificateholder:
o reduce in any manner the amount of, or delay the timing of,
any receipt by the pass through trustee of payments on the
secured promissory notes held in the pass through trust or
distributions in respect of any pass through certificate
issued by the pass through trust, or change the date or
place of any payment in respect of any pass through
certificate, or make distributions payable in currency other
than that provided for in the certificates, or impair the
right of any certificateholder to institute suit for the
enforcement of any payment when due;
o permit the disposition of any secured promissory note held
in the pass through trust, except as provided in the pass
through trust agreement, or otherwise deprive any
certificateholder of the benefit of the ownership of the
applicable secured promissory notes;
o reduce the percentage of the aggregate fractional undivided
interests of the pass through trust provided for in the
applicable supplement to the Basic Agreement that is
required in order to obtain the consent of the holders for
that supplement or for any waiver provided for in the Basic
Agreement or the supplement;
o modify any of the provisions relating to the rights of the
certificateholders in respect of the waiver of events of
default or receipt of payment except to increase any such
percentage or to provide that certain other provisions of
the Basic Agreement and any applicable supplement cannot be
waived or modified without the consent of all applicable
certificateholders; or
o alter the priority of distributions described in any
applicable intercreditor agreement, in a manner materially
adverse to the interests of the certificateholders of the
pass through trust.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The prospectus supplement will specify the pass through trustee's
obligations in the event that a pass through trustee, as the holder of any
secured promissory notes held in a pass through trust, receives a request
for its consent to any amendment, modification or waiver under the
indenture under which the secured promissory notes were issued, under the
lease relating to the aircraft leased by us that was financed with the
proceeds of the secured promissory notes, under any liquidity facility,
insurance policy, interest rate swap or other hedging instrument, or other
instrument of credit enhancement or under other documents relating to the
secured promissory notes.
CROSS-SUBORDINATION ISSUES
The secured promissory notes issued under an indenture may be held
in more than one pass through trust, and one pass through trust may hold
secured promissory notes issued under more than one indenture. Unless
otherwise provided in a prospectus supplement, only secured promissory
notes of the same class may be held in the same pass through trust. In this
event, payments made on account of a junior class of certificates issued
under a prospectus supplement may, under circumstances described in the
prospectus supplement, be subordinated to the prior payment of all amounts
owing to certificateholders of a pass through trust that holds a senior
class of secured promissory notes issued under any indenture. The
prospectus supplement related to an issuance of certificates will describe
any cross-subordination provisions and any related terms, including the
percentage of certificateholders under any pass through trust that is
permitted to:
o grant waivers of defaults under any indenture under which
secured promissory notes held by that pass through trust
were issued;
o consent to the amendment or modification of any indenture
under which secured promissory notes held by that pass
through trust were issued; or
o direct the exercise of remedial actions under any indenture
under which secured promissory notes held by that pass
through trust were issued.
TERMINATION OF THE PASS THROUGH TRUSTS
The obligations of the parties to each pass through trust
agreement will terminate upon the distribution to certificateholders of
that pass through trust of all amounts required to be distributed to them
under the pass through trust agreement. The pass through trustee will send
to each certificateholder of record of the pass through trust notice of the
termination of that pass through trust, the amount of the proposed final
payment and the proposed date for the distribution of the final payment for
that pass through trust. The final distribution to any certificateholder
will be made only upon surrender of the certificateholder's certificates at
the office or agency of the pass through trustee, paying agent or transfer
agent, as specified in the notice of termination.
DELAYED PURCHASE OF SECURED PROMISSORY NOTES
If all of the proceeds from the sale of the certificates are not
used on the date the certificates are issued to purchase the secured
promissory notes contemplated to be held in the pass through trust that
issued those certificates, the secured promissory notes may be purchased by
the pass through trustee at any time on or prior to the date specified in
the applicable prospectus supplement. In this event, the portion of the
proceeds from the sale of the certificates that are not used to purchase
secured promissory notes on the date the certificates are issued will be
held under an arrangement described in the applicable prospectus supplement
pending the purchase of the secured promissory notes. The arrangements with
respect to the payment of interest on funds held pending purchase of
secured promissory notes will also be described in the applicable
prospectus supplement. If any proceeds are not subsequently used to
purchase secured promissory notes by the final date for purchase of secured
promissory notes specified in the applicable prospectus supplement, the
proceeds will be returned to the holders of the certificates.
LIQUIDITY FACILITY, INSURANCE POLICY, SWAP OR HEDGING INSTRUMENT, AND OTHER
CREDIT ENHANCEMENTS
A prospectus supplement may provide that one or more payments of
interest to be paid with respect to the certificates of one or more series
will be supported by a liquidity facility issued by an institution
identified in the related prospectus supplement. The provider of a
liquidity facility for the holders of a series of certificates may have a
claim on property of the pass through trust senior to the claims of the
holders of the certificates of that series as described in the related
prospectus supplement. The prospectus supplement will also specify the
circumstances under which a liquidity provider will be entitled to direct
the exercise of remedies under any indenture.
A prospectus supplement may provide for an interest rate swap or
other hedging instrument to be entered into with respect to any
certificates or secured promissory notes that bear floating rate interest.
The entity that provides an interest rate swap or other hedging instrument
for the holders of a series of certificates may have a claim on property of
the pass through trust senior to the claims of the holders of the
certificates of that series as described in the related prospectus
supplement. The prospectus supplement will also specify the circumstances
under which an entity that provides an interest rate swap or other hedging
instrument will be entitled to direct the exercise of remedies under any
indenture and will describe the relevant U.S. federal income tax
consequences, if any, to the certificateholders.
A prospectus supplement may provide that one or more payments of
interest to be paid with respect to the certificates of one or more series
will be supported by a insurance policy issued by an institution identified
in the related prospectus supplement. The provider of a insurance policy
for the holders of a series of certificates may have a claim on property of
the pass through trust senior to the claims of the holders of the
certificates of that series as described in the related prospectus
supplement. The prospectus supplement will also specify the circumstances
under which an entity that provides a insurance policy will be entitled to
direct the exercise of remedies under any indenture.
The prospectus supplement will also describe any other credit
enhancements, if any, that may apply to the certificates.
THE PASS THROUGH TRUSTEE
Unless otherwise provided in the prospectus supplement for any
series of certificates, the pass through trustee for each series of
certificates will be State Street Bank and Trust Company of Connecticut,
National Association. With certain exceptions as to itself in its
individual capacity, the pass through trustee makes no representations as
to the validity or sufficiency of the Basic Agreement, the pass through
trust supplements, the certificates, the secured promissory notes, the
indentures, the leases or other related documents. The pass through trustee
will not be liable with respect to any series of certificates for any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the holders of a majority in face amount of outstanding
certificates of that series issued under the Basic Agreement. Subject to
those provisions, the pass through trustee will be under no obligation to
exercise any of its rights or powers under the Basic Agreement at the
request of any holders of certificates issued under the Basic Agreement
unless they have offered to the pass through trustee indemnity satisfactory
to it. The Basic Agreement provides that the pass through trustee in its
individual or any other capacity may acquire and hold certificates issued
under the Basic Agreement and may, in accordance with the Basic Agreement,
otherwise deal with us and, with respect to the aircraft leased by us, any
owner trustee with the same rights it would have if it were not the pass
through trustee.
The pass through trustee may resign with respect to any or all of
the pass through trusts at any time, in which event we will be obligated to
appoint a successor pass through trustee. If the pass through trustee
ceases to be eligible to continue as pass through trustee with respect to a
pass through trust or becomes incapable of acting as pass through trustee
or becomes insolvent, we may remove that pass through trustee, or any
certificateholder of the applicable pass through trust for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the pass
through trustee and the appointment of a successor pass through trustee.
Any resignation or removal of the pass through trustee with respect to a
pass through trust and appointment of a successor pass through trustee for
the pass through trust does not become effective until acceptance of the
appointment by the successor pass through trustee. Under these resignation
and successor pass through trustee provisions, it is possible that a
different pass through trustee could be appointed to act as the successor
pass through trustee with respect to each pass through trust. All
references in this prospectus to the pass through trustee should be read to
take into account the possibility that the pass through trusts could have
different successor pass through trustees in the event of a resignation or
removal.
The Basic Agreement provides that we will pay the pass through
trustee's fees and expenses and indemnify the pass through trustee against
certain liabilities.
BOOK-ENTRY REGISTRATION
General
Unless otherwise specified in the applicable prospectus
supplement, the certificates will be subject to the procedures and
provisions described below.
Upon issuance, each series of certificates will be represented by
one or more fully registered global certificates. This means that one
physical certificate or a number of physical certificates representing all
of the certificates will be registered with the Depository Trust Company
("DTC"). Each global certificate will be deposited with, or on behalf of,
DTC and registered in the name of Cede & Co. ("Cede"), the nominee of DTC.
Certificateholders will not be entitled to receive a physical certificate
representing an interest in its certificates, except as set forth below
under "--Physical Certificates". Unless and until physical certificates are
issued under the limited circumstances described below, all references in
this prospectus and any prospectus supplement to actions by
certificateholders will refer to actions taken by DTC upon instructions
from DTC participants, and all references to distributions, notices,
reports and statements to certificateholders will refer, as the case may
be, to distributions, notices, reports and statements to DTC or Cede, as
the registered holder of the certificates, or to DTC participants for
distribution to certificateholders in accordance with DTC procedures.
DTC has advised us that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and "clearing agency" registered pursuant to
Section 17A of the Securities Exchange Act of 1934.
Under the New York Uniform Commercial Code, a "clearing
corporation" is defined as:
o a person that is registered as a "clearing agency" under the
federal securities laws;
o a federal reserve bank; or
o any other person that provides clearance or settlement
services with respect to financial assets that would require
it to register as a clearing agency under the federal
securities laws but for an exclusion or exemption from the
registration requirement, if its activities as a clearing
corporation, including promulgation of rules, are subject to
regulation by a federal or state governmental authority.
A "clearing agency" is an organization established for the
execution of trades by transferring funds, assigning deliveries and
guaranteeing the performance of the obligations of parties to trades.
DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities transactions between
DTC participants through electronic book-entry changes in the accounts of
DTC participants. The ability to execute transactions through book-entry
changes in accounts eliminates the need for transfer of physical
certificates. DTC participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of DTC participants and by the New
York Stock Exchange, the American Stock Exchange, and the National
Association of Securities Dealers. Banks, brokers, dealers, trust companies
and other entities that clear through or maintain a custodial relationship
with a DTC participant either directly or indirectly have indirect access
to the DTC system.
Under the rules, regulations and procedures creating and affecting
DTC and its operations, DTC is required to make book-entry transfers of the
certificates among DTC participants on whose behalf it acts with respect to
the certificates and to receive and transmit distributions of principal,
premium, if any, and interest with respect to the certificates. DTC
participants and indirect DTC participants with which certificateholders
have accounts similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective customers.
Certificateholders that are not DTC participants or indirect DTC
participants but desire to purchase, sell or otherwise transfer ownership
of, or other interests in, the certificates may do so only through DTC
participants and indirect DTC participants. In addition, certificateholders
will receive all distributions of principal, premium, if any, and interest
from the pass through trustee through DTC participants or indirect DTC
participants, as the case may be. Under a book-entry format,
certificateholders may experience some delay in their receipt of payments
because payments with respect to the certificates will be forwarded by the
pass through trustee to Cede, as nominee for DTC. We expect DTC to forward
payments in same-day funds to each DTC participant who is credited with
ownership of the certificates in an amount proportionate to the principal
amount of that DTC participant's holdings of beneficial interests in the
certificates, as shown on the records of DTC or its nominee. We also expect
that DTC participants will forward payments to indirect DTC participants or
certificateholders, as the case may be, in accordance with standing
instructions and customary industry practices. DTC participants will be
responsible for forwarding distributions to certificateholders.
Accordingly, although certificateholders will not possess physical
certificates, DTC's rules provide a mechanism by which certificateholders
will receive payments on the certificates and will be able to transfer
their interests.
Unless and until physical certificates are issued under the
limited circumstances described below, the only physical certificateholder
will be Cede, as nominee of DTC. Certificateholders will not be recognized
by the pass through trustee as registered owners of certificates under the
pass through trust agreement. Certificateholders will be permitted to
exercise the rights under the pass through trust agreement only indirectly
through DTC and DTC participants. DTC has advised us that it will take any
action permitted to be taken by a certificateholder under the pass through
trust agreement only at the direction of one or more DTC participants to
whose accounts with DTC the certificates are credited. Additionally, DTC
has advised us that in the event any action requires approval by
certificateholders of a certain percentage of the beneficial interests in a
pass through trust, DTC will take such action only at the direction of and
on behalf of DTC participants whose holdings include undivided interests
that satisfy any such percentage. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are
taken on behalf of DTC participants whose holdings include those undivided
interests. DTC will convey notices and other communications to DTC
participants, and DTC participants will convey notices and other
communications to indirect DTC participants and to certificateholders in
accordance with arrangements among them. Arrangements among DTC and its
direct and indirect participants are subject to any statutory or regulatory
requirements as may be in effect from time to time. DTC's rules applicable
to itself and DTC participants are on file with the SEC.
A certificateholder's ability to pledge the certificates to
persons or entities that do not participate in the DTC system, or otherwise
to act with respect to such certificates may be limited due to the lack of
a physical certificate to evidence ownership of the certificates and
because DTC can only act on behalf of DTC participants, who in turn act on
behalf of indirect DTC participants.
Neither we nor the pass through trustees will have any liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in the certificates held by Cede, as nominee
for DTC, for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests or for the performance by DTC, any DTC
participant or any indirect DTC participant of their respective obligations
under the rules and procedures governing their obligations.
The applicable prospectus supplement will specify any additional
book-entry registration procedures applicable to certificates denominated
in a currency other than United States dollars.
The information contained in this prospectus concerning DTC and
its book entry system has been obtained from sources we believe to be
reliable, but we take no responsibility for the accuracy thereof.
Same-Day Settlement and Payment
As long as the certificates are registered in the name of DTC or
its nominee, we will make all payments under any lease or any owned
aircraft indenture in immediately available funds. The pass through
trustees will pass through to DTC all payments received from us, including
the final distribution of principal with respect to the certificates of any
pass through trust in immediately available funds.
Any certificates registered in the name of DTC or its nominee will
trade in DTC's Same-Day Funds Settlement System until maturity. DTC will
require secondary market trading activity in the certificates to settle in
immediately available funds. We cannot give any assurance as to the effect,
if any, of settlement in same-day funds on trading activity in the
certificates.
Physical Certificates
Physical certificates will be issued in paper form to
certificateholders or their nominees, rather than to DTC or its nominee,
only if:
o we advise a pass through trustee in writing that DTC is no
longer willing or able to discharge properly its
responsibilities as depository with respect to the
certificates and we or the pass through trustee is unable to
locate a qualified successor;
o we elect to terminate the book-entry system through DTC; or
o after the occurrence of certain events of default or other
events specified in the related prospectus supplement,
certificateholders owning at least a majority in interest in
a pass through trust advise the applicable pass through
trustee, us and DTC through DTC participants that the
continuation of a book-entry system through DTC participants
is no longer in the certificateholders' best interest.
If physical certificates are to be issued by a pass through trust,
the applicable pass through trustee will notify all certificateholders
through DTC of the availability of physical certificates. Upon surrender by
DTC of certificates representing the global physical certificates and
receipt of instructions for re-registration, the pass through trustee will
reissue the certificates as physical certificates to certificateholders.
After physical certificates are issued, the pass through trustee
or a paying agent will make distributions of principal, premium, if any,
and interest with respect to certificates directly to holders in whose
names the physical certificates were registered at the close of business on
the applicable record date. Except for the final payment to be made with
respect to a certificate, the pass through trustee or a paying agent will
make distributions by check mailed to the addresses of the registered
holders as they appear on the register maintained by the pass through
trustee. The pass through trustee or a paying agent will make the final
payment with respect to any pass through certificate only upon presentation
and surrender of the applicable pass through certificate at the office or
agency specified in the notice of final distribution to certificateholders.
Physical certificates will be freely transferable and exchangeable
at the office of the pass through trustee upon compliance with the
requirements set forth in the pass through trust agreement. Neither the
pass through trustee nor any transfer or exchange agent will impose a
service charge for any registration of transfer or exchange. However, the
pass through trustee or transfer or exchange agent will require payment of
a sum sufficient to cover any tax or other governmental charge.
DESCRIPTION OF THE SECURED PROMISSORY NOTES
The statements made under this caption are summaries of terms that
we expect will be common to all secured promissory notes. Where no
distinction is made between the leased aircraft notes and the owned
aircraft notes or between their respective indentures, the statements refer
to all secured promissory notes and all indentures. Most of the financial
and other specific terms of any series of secured promissory notes will be
described in a prospectus supplement to be attached to this prospectus.
Since the terms of the secured promissory notes may differ from the general
information provided below, you should rely on the information in the
prospectus supplement instead of the information in this prospectus if the
information in the prospectus supplement is different from the information
below.
The following information is a summary and does not describe every
aspect of the secured promissory notes. The summary is subject to all the
provisions of the applicable secured promissory notes, indentures, leases,
note purchase agreements, pass through trust agreements, participation
agreements, intercreditor and subordination agreements, liquidity
facilities and other agreements and arrangements relating to any series of
secured promissory notes.
Additional provisions with respect to the secured promissory notes
and the associated aircraft financing transactions will be described in the
applicable prospectus supplement. To the extent that any provision in any
prospectus supplement is inconsistent with any provisions in this summary,
the provision of the prospectus supplement will control.
GENERAL
The secured promissory notes will be issued under indentures.
Promissory notes secured by an aircraft that is leased to us will be
non-recourse and will be issued under an indenture between an owner trustee
and a loan trustee. Promissory notes secured by an aircraft that we own
will be our full recourse obligations and will be issued under an indenture
between a loan trustee and us.
The leased aircraft notes will be non-recourse obligations of the
applicable owner trustee. All of the leased aircraft notes issued under the
same indenture will relate to and will be secured by one or more specific
aircraft leased to us. Unless otherwise specified in the applicable
prospectus supplement, leased aircraft notes will not be secured by any
other aircraft.
We will be the issuer of owned aircraft notes. The owned aircraft
notes will be our direct recourse obligations. All of the owned aircraft
notes issued under the same indenture will relate to, and will be secured
by, one or more specific aircraft that we own. Unless otherwise specified
in the applicable prospectus supplement, the owned aircraft notes will not
be secured by any other aircraft.
If specified in a prospectus supplement, we will have the right
(a) to arrange a sale and leaseback of one or more aircraft that we own
referred to in the prospectus supplement and the assumption, on a
non-recourse basis, of the related owned aircraft notes by an owner trustee
or (b) to substitute other aircraft, cash or U.S. government securities or
a combination thereof in place of the aircraft that we own securing the
related owned aircraft notes. The terms and conditions of any sale and
leaseback or aircraft substitution will be described in the applicable
prospectus supplement. In addition, if specified in a prospectus
supplement, we may also structure a financing for an aircraft, using a
structure other than a U.S. leveraged lease or mortgage, such as a "cross-
border" lease, a synthetic lease or other special structure, or as a
combination of a lease or mortgage and a synthetic lease, cross-border
lease or other special structure.
If specified in a prospectus supplement, one of our affiliates
may act as an owner participant in a leveraged lease transaction. If one of
our affiliates acts as owner participant, it may transfer its interest in
the owner trust to a third party at any time during the term of the lease.
In connection with that transfer, the lease and other documents may be
amended and the secured promissory notes issued under the applicable
indenture may be amended or refinanced.
PRINCIPAL AND INTEREST PAYMENTS
The secured promissory notes will bear interest at the rates
(which may be fixed or floating) set forth in the applicable indenture or
may be issued at a discount. We expect that the rates set forth in the
applicable indenture for each series of secured promissory notes will be
the same rate as the annual rate for the certificates issued by the pass
through trust that purchases that series of secured promissory notes.
Interest on the secured promissory notes will be payable by the issuer of
those secured promissory notes on each day that is a regular distribution
date for the certificates issued by the pass through trust that purchases
those secured promissory notes.
The issuer of any series of secured promissory notes will repay
principal in accordance with the schedule set forth in the applicable
prospectus supplement. The principal amortization schedule for each
individual aircraft financing will vary to reflect the economic terms of
the individual financing.
If any date scheduled for any payment of principal, premium, if
any, or interest with respect to a secured promissory note is not a
business day, the payment will be made on the next succeeding business day
without any additional interest, unless otherwise provided in the
applicable prospectus supplement.
REDEMPTION
The applicable prospectus supplement will describe the
circumstances under which the secured promissory notes may be redeemed or
purchased prior to their stated maturity date, in whole or in part. In
addition, the prospectus supplement will describe the premium, if any,
applicable upon redemptions or purchases and other terms applying to the
redemptions or purchases of the secured promissory notes.
SECURITY
The leased aircraft notes will be secured by:
o an assignment by the related owner trustee to the related
loan trustee of that owner trustee's rights, except for
certain rights described below, under the lease or leases or
other agreements with respect to the related aircraft leased
by us, including the right to receive scheduled payments of
rent under the applicable lease; and
o a mortgage granted to the related loan trustee in the
aircraft financed by the issue of those leased aircraft
notes, subject to our rights under the lease or leases
relating to that aircraft and other property rights, if any,
described in the applicable prospectus supplement.
With respect to the leased aircraft, the assignment by the related
owner trustee to the related loan trustee of its rights under the related
lease will exclude, among other things:
o rights of the owner trustee and the related owner
participant to indemnification by us for certain matters;
o insurance proceeds payable to the owner trustee in its
individual capacity and to the owner participant under
liability insurance that we maintain pursuant to the lease
or that the owner trustee or the owner participant
maintains;
o insurance proceeds payable to the owner trustee or to the
owner participant under certain casualty insurance
maintained by the owner trustee or the owner participant as
permitted by the lease; and
o any rights of the owner participant or the owner trustee to
enforce payment of the foregoing amounts and their
respective rights to the proceeds of the foregoing
indemnification and insurance.
In addition, the assignment will be limited to provide that,
unless and until a default occurs and is continuing under an indenture with
respect to a leased aircraft, the related loan trustee may exercise only
limited rights of the related owner trustee under the related lease.
All of the leases will be net leases. Under a net lease, we are
obligated, among other things and at our expense, to cause each aircraft
leased by us to be duly registered, to pay all costs of operating the
aircraft and to maintain, service, repair and overhaul, or cause to be
maintained, serviced, repaired and overhauled, the aircraft.
Unless otherwise specified in the applicable prospectus
supplement, the secured promissory notes will not be cross-collateralized
and consequently the secured promissory notes issued in respect of any one
aircraft will not be secured by any other aircraft or, in the case of
leased aircraft notes, the lease related to any other aircraft.
The owned aircraft notes will be secured by a mortgage granted to
the related loan trustee of all of our right, title and interest in and to
the applicable aircraft that we own. Under the terms of each owned aircraft
indenture, we will be obligated, among other things and at our expense, to
cause each owned aircraft to be duly registered, to pay all costs of
operating the aircraft and to maintain, service, repair and overhaul, or
cause to be maintained, serviced, repaired or overhaul, the aircraft.
The prospectus supplement will describe the required insurance
coverage with respect to the aircraft financed with the proceeds from the
pass through certificates issued.
Except in certain circumstances, we will keep each aircraft
registered under the Transportation Code. In addition, we will record the
indentures, the leases and other documents necessary for a valid conveyance
of an interest in the aircraft under the Transportation Code. Each
indenture will be effective to create a valid security interest in the
aircraft that is subject to that indenture. When that indenture and other
appropriate documents are filed with the FAA in accordance with the
Transportation Code and Uniform Commercial Code financing statements are
filed in all appropriate jurisdictions, the loan trustee will have a
perfected security interest in the related aircraft whenever it is located
in the United States or any of its territories and possessions.
The Convention on the International Recognition of Rights in
Aircraft (the "Convention") provides that this security interest will also
be recognized, with certain limited exceptions, in those jurisdictions that
have ratified or adhere to the Convention. We will have the right, subject
to certain conditions, at our own expense to register each aircraft in
countries other than the United States. Each aircraft may also be operated
by us or under lease, sublease or interchange arrangements in countries
that are not parties to the Convention. The extent to which the related
loan trustee's security interest would be recognized in an aircraft located
in a country that is not a party to the Convention, and the extent to which
such security interest would be recognized in a jurisdiction adhering to
the Convention if the aircraft is registered in a jurisdiction not a party
to the Convention, is uncertain. Moreover, in the case of a default under
an indenture, the ability of the related loan trustee to realize upon its
security interest in an aircraft could be adversely affected as a legal or
practical matter if such aircraft is registered or located outside of the
United States.
The loan trustee will invest and reinvest funds, if any, held by
it from time to time under an indenture. The loan trustee will, at our
direction, invest and reinvest funds, in certain investments described in
the applicable indenture. We will not be entitled to direct the loan
trustee to invest and reinvest funds with respect to a leased aircraft, in
the case of a default under the applicable lease or, with respect to an
owned aircraft, in the case of a default under the applicable indenture. We
will pay the net amount of any loss resulting from these investments.
Section 1110 of the U.S. Bankruptcy Code provides in relevant part
that, unless certain events occur after the commencement of a Chapter 11
case, the right of a secured party with a security interest in "equipment"
(as defined in Section 1110 of the U.S. Bankruptcy Code), or of a lessor or
conditional vendor of such equipment, to take possession of such equipment
in compliance with the provisions of a security agreement, lease, or
conditional sale contract, and to enforce any of its other rights or
remedies under such security agreement, lease, or conditional sale
contract, to sell, lease or otherwise retain or dispose of such equipment,
is not limited or otherwise affected after 60 days after the order for
relief under Chapter 11 of the U.S. Bankruptcy Code by any other provision
of the U.S. Bankruptcy Code or by any power of the bankruptcy court.
Section 1110 of the U.S. Bankruptcy Code provides that the right
to take possession and to enforce other rights and remedies to sell, lease
or otherwise dispose of an aircraft shall be subject to the automatic stay
of Section 362 of the U.S. Bankruptcy Code if (A) before the date that is
60 days after the date of the order for relief under Chapter 11 of the U.S.
Bankruptcy Code, the trustee, subject to the approval of the court, agrees
to perform all obligations of the debtor under such security agreement,
lease or conditional sale contract and (B) any default (other than a
default that is a breach of a provision relating to the financial
condition, bankruptcy, insolvency or reorganization of the debtor) under
such security agreement, lease or conditional sale contract (x) is cured
before the date that is 60 days from the date of such order in the case of
a default that occurs before the date of the order of relief, (y) is cured
before the later of the date that is 30 days after the date of such default
or the date that is 60 days from the date of the order for relief in the
case of a default that occurs after the date of the order for relief and
before the date that is 60 days from the date of such order for relief, or
(z) is cured in compliance with the terms of the security agreement, lease
or conditional sale agreement in the case of a default that occurs on or
after the expiration of 60 days from the date of the order of relief.
"Equipment" is defined in Section 1110 of the U.S. Bankruptcy Code, in
part, as "an aircraft, aircraft engine, propeller, appliance, or spare part
(as defined in Section 40102 of Title 49) that is subject to a security
interest granted by, leased to, or conditionally sold to a debtor that at
the time such transaction is entered into holds an air carrier operating
certificate issued pursuant to Chapter 447 of Title 49 for aircraft capable
of carrying 10 or more individuals or 6,000 pounds or more of cargo."
Unless otherwise specified in the applicable prospectus
supplement, it will be a condition to the pass through trustee's obligation
to purchase secured promissory notes with respect to each aircraft that our
outside counsel provide its opinion to the pass through trustee that the
loan trustee will be entitled to the benefits of Section 1110 with respect
to the airframe and engines comprising such owned aircraft. This Section
1110 opinion will not address the possible replacement of an aircraft after
an "Event of Loss", as defined in the applicable indenture, in the future.
RANKING OF SECURED PROMISSORY NOTES
Some of the secured promissory notes related to one or more
aircraft may be subordinated and junior in right of payment to other
secured promissory notes related to the same aircraft. The terms of any
subordination will be described in the related prospectus supplement.
PAYMENTS UNDER LEASES AND LIMITATION OF LIABILITY
We will lease each leased aircraft from an owner trustee for a
term commencing on the delivery date of the aircraft to the owner trustee
and expiring no earlier than the latest maturity date of the related leased
aircraft notes, unless previously terminated as permitted by the terms of
the related lease. We will make basic rent and other payments under each
lease and the related documents to an owner trustee, as lessor. The owner
trustee will assign all payments of basic rent and certain other payments
to the related loan trustee. The loan trustee will, on behalf of the owner
trustee, apply the funds assigned to it under the related indenture to pay
scheduled principal of, premium, if any, and interest due from such owner
trustee on the leased aircraft notes issued under the related indenture.
The balance of any basic rent or other assigned amount under each lease and
related documents, after payment of amounts due on the leased aircraft
notes issued under the related indenture, will be paid over to the
applicable owner trustee. In certain cases, the basic rent and other
payments under a lease may be adjusted, but each lease will provide that
under no circumstances will total payments by us be less than the scheduled
payments on the related leased aircraft notes. In some cases, an owner
participant may be required to make payments to an owner trustee that are
to be used by the owner trustee to pay principal of, and interest on, the
secured promissory notes. If an owner participant is required to make
payments to be used by an owner trustee to pay principal of, and interest
on, the secured promissory notes and the owner participant fails to make
the payment, we will be required to provide the owner trustee with funds
sufficient to make the payment. Our obligations to pay rent and to cause
other payments to be made under each lease and related documents will be
general unsecured obligations.
Except in circumstances in which we purchase a leased aircraft and
assume the related leased aircraft notes, the leased aircraft notes will
not be our obligations. None of the owner trustees, the owner participants
or the loan trustees will be personally liable to any holder of leased
aircraft notes for amounts payable under the leased aircraft notes. Except
as provided in the indentures relating to the leased aircraft notes, no
owner trustee or loan trustee will be liable or incur any liability under
the indentures. Except when we have assumed any leased aircraft notes and
except when an owner participant provides funds to be used by an owner
trustee to pay principal of, or interest on, the secured promissory notes,
all amounts payable under any leased aircraft notes will be made only from:
o the assets subject to the lien of the applicable indenture
with respect to the aircraft or the income and proceeds
received by the related loan trustee from that aircraft
(including assigned rent payable by us under the related
lease); or
o payments made in connection with optional redemptions or
purchases by the related owner trustee or the related owner
participant.
If an owner participant is required to make payments to be used by an owner
trustee to pay principal of, and interest on, the secured promissory notes
and the owner participant fails to make the payment, we will be required to
provide the owner trustee with funds sufficient to make the payment.
Except as otherwise provided in the applicable indenture, no owner
trustee will be personally liable for any amount payable or for any
statements, representations, warranties, agreements or obligations under
any indenture or under any leased aircraft notes except for its own willful
misconduct or gross negligence. In general, none of the owner participants
will have any duty or responsibility under the leased aircraft indentures
or under the leased aircraft notes.
Our obligations under each owned aircraft indenture and under the
owned aircraft notes will be secured obligations.
DEFEASANCE OF THE INDENTURES AND THE SECURED PROMISSORY NOTES IN CERTAIN
CIRCUMSTANCES
Unless otherwise specified in the applicable prospectus
supplement, an indenture may provide that the obligations of the related
loan trustee, the related owner trustee or us, as the case may be, under
that indenture will be deemed to have been discharged and paid in full on
the 91st day after the date that money or certain United States government
securities, in an aggregate amount sufficient to pay when due (including as
a consequence of redemption in respect of which notice is given on or prior
to the date of such deposit) principal, premium and interest with respect
to all secured promissory notes issued under that indenture, are
irrevocably deposited with the related loan trustee. The discharge may
occur only if, among other things, there has been published by the IRS a
ruling or regulation to the effect that holders of the secured promissory
notes will not recognize income, gain or loss for federal income tax
purposes as a result of the deposit, defeasance and discharge and will be
subject to federal income tax on the same amount and in the same manner and
at the same time as would have been the case if the deposit, defeasance and
discharge had not occurred. Certain obligations, including the obligations
to register the transfer or exchange of secured promissory notes, to
replace stolen, lost, destroyed or mutilated secured promissory notes and
to maintain paying agencies and hold money for payment in trust may not be
defeased.
Upon defeasance of the secured promissory notes, or upon payment
in full of the principal of, premium, if any, and interest on all secured
promissory notes issued under any indenture on the applicable maturity
date, or upon deposit with the applicable loan trustee of sufficient money
no earlier than one year prior to the date of such maturity, the holders of
the secured promissory notes will have no beneficial interest in or other
rights with respect to the related aircraft or other assets subject to this
lien of the indenture and the lien will terminate.
ASSUMPTION OF OBLIGATIONS BY US AIRWAYS
Unless otherwise specified in the applicable prospectus
supplement, upon our purchase of any leased aircraft prior to the end of
the applicable term, we may assume on a full recourse basis all of the
obligations of the owner trustee, other than its obligations in its
individual capacity, under the indenture and the leased aircraft notes
relating to that lease. If we assume leased aircraft notes, provisions
relating to maintenance, possession and use of the related aircraft, liens
and insurance will be incorporated into the indenture. If we assume leased
aircraft notes in connection with our purchase of a leased aircraft, leased
aircraft notes issued under the indenture will not be redeemed and will
continue to be secured by the aircraft. We may not assume leased aircraft
notes unless, among other things, we have provided an opinion of counsel to
the effect that:
o the loan trustee will be entitled to the benefits of Section
1110 of the U.S. Bankruptcy Code, except that the opinion
need only be given if, immediately prior to the assumption,
the owner trustee would have been entitled to the benefits
of Section 1110; and
o holders of the secured promissory notes being assumed will
not recognize income, gain or loss for federal income tax
purposes as a result of the assumption and will be subject
to federal income tax on the same amount and in the same
manner and at the same time as would have been the case if
the assumption had not occurred.
ADDITIONAL NOTES
We will describe in a prospectus supplement any circumstances and
conditions under which we or the owner trustee may finance modifications,
alterations, additions, improvements to, or replacement parts for, an
aircraft through the issuance and sale of additional secured promissory
notes. A supplement to the applicable indenture will establish the terms,
conditions and designations of any additional secured promissory notes.
INTERCREDITOR ISSUES
Secured promissory notes may be issued in different classes, which
means that the secured promissory notes may have different payment
priorities even though they are issued by the same borrower, relate to the
same aircraft and are issued under the same indenture. If multiple classes
of secured promissory notes are issued, the related prospectus supplement
will describe the priority of distributions among the secured promissory
notes, the ability of any class to exercise and/or enforce any or all
remedies with respect to the related aircraft, and, if the secured
promissory notes are leased aircraft notes, the related lease, and other
intercreditor terms and provisions.
OWNER PARTICIPANT; REVISIONS TO AGREEMENTS
If specified in the applicable prospectus supplement, at the time
certificates are issued, we may still be seeking owner participants to
invest in certain leveraged lease transactions for the aircraft. The
prospective owner participants may request revisions to the forms of
participation agreement, lease, trust agreement and indenture so that the
terms of the agreements applicable to these aircraft may differ from the
description of the agreements contained in the applicable prospectus
supplement.
The terms of those agreements, however, will be required to:
o contain certain mandatory document terms; or
o not vary certain mandatory economic terms.
In addition, we will be obligated:
o to certify to the pass through trustee that the
modifications will not materially and adversely affect the
certificateholders; and
o if the forms of documents are modified in any material
respect that is adverse to the certificateholders, to obtain
written confirmation from each rating agency that the use of
modified versions of such agreements will not result in a
withdrawal, suspension or downgrading of the rating of any
class of certificates.
U.S. INCOME TAX MATTERS
GENERAL
The following summary describes the material U.S. federal income
tax consequences to certificateholders of the purchase, ownership and
disposition of the certificates offered by this prospectus and in the
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to US
Airways, is accurate in all material respects with respect to the matters
discussed in this prospectus. Except as otherwise specified, the summary is
addressed to the initial beneficial owners of certificates that are
citizens or residents of the United States, corporations, partnerships or
other entities created or organized in or under the laws of the United
States or any state therein, or estates, the income of which is subject to
U.S. federal income taxation regardless of its source, or trusts if a court
within the U.S. is able to exercise primary jurisdiction over the
administration of the trust and one or more U.S. persons have the authority
to control all substantial decisions of the trust that will hold the
certificates as capital assets. This summary does not address the tax
treatment of U.S. certificateholders that may be subject to special tax
rules, for example, banks or insurance companies, nor does it address the
tax treatment of U.S. certificateholders that do not acquire certificates
at the initial offering price as part of the initial offering. This summary
is not a comprehensive description of all of the tax considerations that
may be relevant to a decision to purchase certificates. It does not
describe any tax consequences arising under the laws of any state, locality
or taxing jurisdiction other than the United States.
The summary is based on laws, regulations, rulings and decisions
in effect on the date of this prospectus. Changes to existing law could
have a retroactive effect and could alter the tax consequences discussed
below. No rulings have been sought from the IRS with respect to the federal
income tax consequences, discussed below, and no assurances can be given
that the IRS will not take contrary positions. The pass through trusts are
not indemnified for any federal income taxes that may be imposed upon them,
and the imposition of those taxes on a pass through trust could result in a
reduction in the amounts available for distribution to the
certificateholders of that pass through trust. Prospective investors should
consult their own tax advisors with respect to the federal, state, local
and foreign tax consequences to them of the purchase, ownership and
disposition of the certificates.
TAX TREATMENT OF THE PASS THROUGH TRUSTS AND CERTIFICATEHOLDERS
Each pass through trust will not itself be subject to U.S. federal
income taxation. Each U.S. certificateholder will be required to report on
its federal income tax return its pro rata share of the entire income from
the secured promissory notes and any other property held in the related
pass through trust, in accordance with the U.S. certificateholder's method
of accounting. Accordingly, each U.S. certificateholder's share of interest
paid on the secured promissory notes will be taxable as ordinary income, as
it is paid or accrued, and a U.S. certificateholder's share of any premium
paid on redemption of a secured promissory note will be treated as capital
gain. If the proceeds from the sale of certificates are invested with a
depositary or held pursuant to an escrow arrangement prior to the purchase
of secured promissory notes by a pass through trust, each U.S.
certificateholder's share of interest paid on the resulting deposits will
be taxable as ordinary income as it is paid or accrued in accordance with
the holder's method of accounting for U.S. federal income tax purposes. In
addition, the deposits may be subject to the original issue discount rules,
with the result that a U.S. certificateholder may be required to include
any original issue discount in income from a deposit using the accrual
method of accounting regardless of its normal method. If certificates
issued by a pass through trust are supported by a liquidity facility,
insurance policy, or other instrument of credit enhancement, any amounts
received by the pass through trust under the liquidity facility, insurance
policy, or other instrument of credit enhancement for unpaid interest will
be treated for U.S. federal income tax purposes as having the same
characteristics as the payments they replace.
Each U.S. certificateholder will be entitled to deduct, consistent
with its method of accounting, its pro rata share of fees and expenses paid
or incurred by the corresponding pass through trust as provided in Section
162 or 212 of the Internal Revenue Code of 1986, as amended, referred to as
the Code. Certain fees and expenses, including fees paid to the pass
through trustee and the provider of the liquidity facility, insurance
policy, or other instrument of credit enhancement, if applicable, will be
paid by parties other than the certificateholders. These fees and expenses
could be treated as constructively received by the pass through trust, in
which event a U.S. certificateholder could be required to include in income
and entitled to deduct its pro rata share of the fees and expenses. If a
U.S. certificateholder is an individual, estate or trust, the deduction for
the certificateholder's share of fees or expenses will be allowed only to
the extent that all of the certificateholder's miscellaneous itemized
deductions, including the certificateholder's share of fees and expenses,
exceed 2% of the certificateholder's adjusted gross income. In addition, in
the case of U.S. certificateholders who are individuals, certain otherwise
allowable itemized deductions will be subject generally to additional
limitations on itemized deductions under applicable provisions of the Code.
EFFECT OF SUBORDINATION ON CERTIFICATEHOLDERS OF SUBORDINATED TRUSTS
In the event that any pass through trust is subordinated in right
of payment to any other pass through trust and the subordinated trust
receives less than the full amount of the interest, principal or premium
paid with respect to the secured promissory notes held by it because of the
subordination of the pass through trust, the certificateholders of the
subordinated trust would probably be treated for federal income tax
purposes as if they had (a) received as distributions their full share of
principal, interest, or premium, (b) paid over to a preferred class of
certificateholders an amount equal to their share of the amount of the
shortfall, and (c) retained the right to reimbursement of the amount of the
shortfall to the extent of future amounts payable to the certificateholders
of the subordinated trust on account of the shortfall.
Under this analysis, (a) subordinated certificateholders incurring
a shortfall would be required to include as current income any interest or
other income of the subordinated trust that was a component of the
shortfall, even though such amount was in fact paid to a preferred class of
certificateholders, (b) a loss would only be allowed to subordinated
certificateholders when their right to receive reimbursement of the
shortfall becomes worthless (i.e., when it becomes clear that funds will
not be available from any source to reimburse the shortfall), and (c)
reimbursement of the shortfall prior to a claim of worthlessness would not
be taxable income to certificateholders because the amount reimbursed would
have been included in income. These results should not significantly affect
the inclusion of income for certificateholders on the accrual method of
accounting, but could accelerate inclusion of income to certificateholders
on the cash method of accounting by, in effect, placing them on the accrual
method.
ORIGINAL ISSUE DISCOUNT
The secured promissory notes may be issued with original issue
discount. The prospectus supplement will state whether any secured
promissory notes to be held by the related pass through trust will be
issued with original issue discount. Generally, a holder of a debt
instrument issued with original issue discount that is not negligible must
include such original issue discount in income for federal income tax
purposes as it accrues, in advance of the receipt of the cash attributable
to this income, under a method that takes into account the compounding of
interest.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a certificate, a
U.S. certificateholder generally will recognize capital gain or loss equal
to the difference between the amount realized on the sale or exchange
(other than any amount attributable to accrued but unpaid interest that the
U.S. certificateholder has not included in gross income previously which
will be taxable as ordinary income) and the U.S. certificateholder's
adjusted tax basis in the secured promissory notes and other property held
by the corresponding pass through trust and any deposits. Any gain or loss
will be long-term capital gain or loss to the extent attributable to
property held by the pass through trust for more than one year. In the case
of individuals, estates, and trusts, the maximum U.S. federal income tax
rate on long-term capital gains generally is 20%.
FOREIGN CERTIFICATEHOLDERS
Under present U.S. federal income tax law, assuming certain
certification requirements are satisfied (which include identification of
the beneficial owner of a certificate), and subject to the discussion of
backup withholding below:
o interest paid (including any original issue discount) on a
certificate to, or on behalf of, any beneficial owner of a
certificate that is not a U.S. person will not be subject to
U.S. federal income tax or withholding tax provided that (a)
the non-U.S. certificateholder does not actually or
constructively own 10% or more of the total combined voting
power of all classes of our stock or the stock of an owner
participant, (b) the non-U.S. certificateholder is not (A) a
bank receiving interest pursuant to a loan agreement entered
into in the ordinary course of its trade or business, or (B)
a controlled foreign corporation for U.S. tax purposes that
is related to an owner participant or us, and (c) the
interest payments are not effectively connected with the
non-U.S. certificateholder's conduct of a U.S. trade or
business; and
o a non-U.S. certificateholder will not be subject to U.S.
federal income tax on any capital gain realized on the sale,
exchange or other disposition of a certificate, unless (a)
the non-U.S. certificateholder is an individual who is
present in the United States for 183 days or more during the
taxable year of the sale or exchange and certain other
requirements are met or (b) the gain is effectively
connected with the non-U.S. certificateholder's conduct of a
U.S. trade or business.
The certification referred to above may be made on an IRS Form W-8
BEN (or any successor form prescribed by the IRS) or substantially similar
substitute form.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to
certain payments within the United States of principal, interest, original
issue discount and premium on the certificates, and to payments of the
proceeds of certain sales of certificates made to U.S. certificateholders
other than certain exempt recipients (such as corporations). A 31% backup
withholding tax may apply to the payments if the holder fails or has failed
to provide an accurate taxpayer identification number or otherwise
establish an exemption or fails to report in full interest income. With
respect to non-U.S. certificateholders, payments made on a certificate and
proceeds from the sale of a certificate owned by a non-U.S.
certificateholder will generally not be subject to information reporting
requirements or the backup withholding tax if the non-U.S.
certificateholder provides the required certification of its non-U.S.
status or otherwise establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules will be allowed as a refund or credit
against the certificateholder's U.S. federal income tax liability, if any,
provided the required information is furnished to the IRS.
The Treasury Department recently issued final regulations
governing backup withholding and information reporting requirements. The
regulations do not significantly alter the substantive withholding and
information reporting requirements discussed above; they unify current
certification procedures and forms and clarify reliance standards. The
regulations will generally become effective for payments made after
December 31, 2000.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable prospectus
supplement, the certificates may, subject to certain legal restrictions, be
purchased and held by an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, referred to as ERISA, or
an individual retirement account or an employee benefit plan subject to
section 4975 of the Code. A fiduciary of an employee benefit plan must
determine that the purchase and holding of a certificate is consistent with
its fiduciary duties under ERISA and does not result in a non-exempt
prohibited transaction as defined in section 406 of ERISA or section 4975
of the Code. Employee benefit plans which are governmental plans, as
defined in section 3(32) of ERISA, and certain church plans, as defined in
section 3(33) of ERISA, are not subject to Title I of ERISA or section 4975
of the Code. The certificates may, subject to certain legal restrictions,
be purchased and held by such plans.
PLAN OF DISTRIBUTION
Certificates may be sold to one or more underwriters for public
offering and sale by them to investors or other persons directly or through
one or more dealers or agents. Any underwriter, dealer or agent involved in
the offer and sale of the certificates will be named in an applicable
prospectus supplement.
The certificates may be sold from time to time in one or more
transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices based on the prevailing
market prices or at negotiated prices. Dealer trading may take place in
certain of the certificates, including certificates not listed on any
securities exchange. We do not intend to apply for listing of the
certificates on a national securities exchange. We also may, from time to
time, authorize underwriters acting as our agents to offer and sell the
certificates upon the terms and conditions as will be set forth in any
prospectus supplement. In connection with the sale of certificates,
underwriters may be deemed to have received compensation from us in the
form of underwriting discounts or commissions and may also receive
commissions from purchasers of certificates for whom they may act as agent.
Underwriters may sell certificates to or through dealers, and dealers may
receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions (which may be changed from time to
time) from the purchasers for whom they may act as agent.
If a dealer is used directly by us in the sale of certificates in
respect of which this prospectus is delivered, the certificates will be
sold to the dealer, as principal. The dealer may then resell the
certificates to the public at varying prices to be determined by the dealer
at the time of resale. Any dealer used directly by us and the terms of any
sale to that dealer will be set forth in the related prospectus supplement.
Certificates may be offered and sold through agents designated by
us from time to time. Any agent involved in the offer or sale of the
certificates in respect of which this prospectus is delivered will be named
in, and any commissions payable by us to that agent will be set forth in,
the applicable prospectus supplement. Unless otherwise indicated in the
applicable prospectus supplement, that agent will be acting on a best
efforts basis for the period of its appointment.
We may directly solicit offers to purchase certificates and sales
under those offerings may be made by us directly to institutional investors
or others who may be deemed to be underwriters within the meaning of the
Securities Act of 1933 with respect to any resale of the certificates. We
will describe the terms of these sales will be described in the prospectus
supplement. Except as set forth in the applicable prospectus supplement,
none of our directors, officers or employees will solicit or receive a
commission in connection with our direct sales of the certificates,
although those persons may respond to inquiries by potential purchasers and
perform ministerial and clerical work in connection with any direct sales.
Any underwriting compensation that we pay to underwriters, dealers
or agents in connection with the offering of certificates, and any
discounts, concessions or commissions that underwriters allow to
participating dealers, will be set forth in an applicable prospectus
supplement. Underwriters, dealers and agents participating in the
distribution of the certificates may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them
on resale of the certificates may be deemed to be underwriting discounts
and commissions under the Securities Act. We may indemnify underwriters,
dealers and agents against certain civil liabilities, including liabilities
under the Securities Act. We may reimburse underwriters, dealers and agents
for expenses incurred in connection with the offer or sale of certificates.
Underwriters, dealers and agents may engage in transactions with,
or perform services for, us, our parent and our subsidiaries and affiliates
in the ordinary course of business.
If so indicated in an applicable prospectus supplement and subject
to existing market conditions, we will authorize dealers acting as our
agents to solicit offers by certain institutions to purchase certificates
at the public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery
on the date or dates stated in that prospectus supplement. Each contract
will be for an amount not less than, and the aggregate principal amount of
certificates sold pursuant to contracts will be equal to, the respective
amounts stated in that prospectus supplement. Institutions with whom
contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and other institutions, in all
cases be subject to our approval. Contracts will not be subject to any
conditions except that the purchase by an institution of the certificates
covered by its contracts will not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which that
institution is subject. A commission indicated in the applicable prospectus
supplement will be granted to underwriters and agents soliciting purchases
of certificates pursuant to contracts accepted by us. Agents and
underwriters will have no responsibility in respect of the delivery or
performance of contracts.
If any underwriter is utilized in the sale of any certificates,
the applicable prospectus supplement will contain a statement as to the
intention, if any, of the underwriter at the date of the prospectus
supplement to make a market in the certificates. No assurances can be given
that there will be a market for the certificates.
The place and time of delivery for the certificates in respect of
which this prospectus is delivered will be set forth in the applicable
prospectus supplement.
SELLING CERTIFICATEHOLDERS
Certificates issued pursuant to this prospectus may be reoffered
pursuant to this prospectus by the holders of certificates, from time to
time, in transactions on the open market, in negotiated transactions,
through the writing of options on the certificates or through a combination
of these methods of sale, at negotiated prices, fixed prices that may be
changed, market prices prevailing at the time of sale or prices relating to
the prevailing market prices. The selling certificateholders may effect
these transactions by selling the certificates to or through
broker-dealers, and the broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling
certificateholders, the purchasers of certificates for whom the
broker-dealer may act as agent or to whom they may sell as principal or
both. We will not receive any part of the proceeds from the resale by the
selling certificateholders of any certificates pursuant to this prospectus.
Unless otherwise provided in the applicable prospectus supplement, we will
bear all expenses, other than selling discounts and commissions and fees
and expenses of the selling certificateholders, in connection with the
registration of the certificates being reoffered by the selling
certificateholders.
The identity of the selling certificateholders, the number of
certificates sold by the selling certificateholders and the price per
certificate will be determined at the time of the consummation of the
particular transaction. Specific information regarding the transaction, the
identity of the selling certificateholders and the number of certificates
to be resold may be provided at the time of the applicable transaction by
means of a supplement or a post-effective amendment to this prospectus, as
applicable.
The selling certificateholders and any broker-dealers who act in
connection with the sale of those certificates may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act,
and any commissions received by them and profit on any resale of those
certificates as principal may be deemed to be underwriting discounts and
commissions under the Securities Act. We intend to make available public
information concerning our self in compliance with the Securities Act and
the related regulations and, accordingly, Rule 144 or Rule 145 under the
Securities Act may be available for use by holders of certificates to
effect transfers of those securities, subject to compliance with the
remaining provisions of those rules.
LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus
supplement, Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates
will render an opinion with respect to the validity of the securities being
offered by this prospectus. Unless otherwise indicated in the applicable
prospectus supplement, Skadden, Arps, Slate, Meagher & Flom LLP and its
affiliates will rely on the opinion of counsel for the pass through trustee
as to certain matters relating to the authorization, execution and delivery
of the certificates by, and the valid and binding effect on, the pass
through trustee.
EXPERTS
The consolidated financial statements of US Airways, Inc. and its
subsidiary as of December 31, 1999 and 1998, and for each of the years in
the three-year period ended December 31, 1999 that are included in US
Airways' Annual Report on Form 10-K for the year ended December 31, 1999,
have been incorporated by reference in the registration statement in
reliance upon the report of KPMG LLP, independent certified public
accountants and upon the authority of KPMG LLP as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC under the Securities Exchange Act of
1934. You may read and copy this information at the following locations of
the SEC:
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Judiciary Plaza, Seven World Trade Center, Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street, Suite 1400
Washington, D.C. 20549 New York, NY 10048 Chicago, IL 60661
</TABLE>
You may also obtain copies of this information by mail from the
Public Reference Room of the SEC, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the SEC at (800) SEC-0330.
The SEC also maintains an internet world wide web site that
contains reports, proxy statements and other information about issuers,
like us, who file electronically with the SEC. The address of that site is
http://www.sec.gov.
You may also inspect reports, proxy statements and other
information about us at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
We have filed with the SEC a registration statement on Form S-3
that registers the securities we are offering. The registration statement,
including the attached exhibits and schedules, contains additional relevant
information about us and the securities offered. The rules and regulations
of the SEC allow us to omit certain information included in the
registration statement from this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference information into
this prospectus. This means that we can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is considered to be part of this
prospectus, except for any information that is superseded by information
that is included directly in this document.
This prospectus includes by reference the documents listed below
that we previously have filed with the SEC and that are not included in or
delivered with this document. They contain important information about our
company and its financial condition.
FILING PERIOD
Annual Report on Form 10-K Year ended December 31, 1999
Quarterly Report on Form 10-Q Quarters ended June 30, 2000 and
March 31, 2000
Current Reports on Form 8-K Filed January 13, 2000
Filed January 19, 2000
Filed February 11, 2000
Filed February 24, 2000
Filed February 29, 2000
Filed March 15, 2000
Filed March 24, 2000
Filed April 11, 2000
Filed April 19, 2000
Filed May 2, 2000
Filed May 9, 2000
Filed May 30, 2000
Filed June 20, 2000
Filed June 20, 2000
Filed July 11, 2000
Filed July 19, 2000
Filed July 26, 2000
Filed August 10, 2000
Filed August 17, 2000
Filed September 12, 2000
We incorporate by reference additional documents that we may file
with the SEC between the date of this prospectus and the date of the
closing of each offering. These documents include periodic reports, such as
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as well as proxy statements.
You may obtain any of these documents from us without charge,
excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit to this prospectus.
You may obtain documents incorporated by reference in this prospectus by
requesting them in writing or by telephone from us at the following
address:
Secretary
US Airways, Inc.
2345 Crystal Drive
Arlington, Virginia 22227
(703) 872-7000.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering, other
than underwriting discounts and commissions, are:
Securities and Exchange Commission registration filing fee.......$ 214,463*
Printing and engraving expenses.................................. 600,000**
Pass through trustee fees and expenses........................... 60,000**
Accounting fees and expenses..................................... 225,000**
Rating Agency fees............................................... 750,000**
Legal fees and expenses.......................................... 750,000**
-----------
Total.......................................................$2,599,463
==========
-----------
* Plus $107,764 in unused fees carried over from our previous filing
** Estimates
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
US Airways' Restated Certificate of Incorporation and By-laws
provide that US Airways, will indemnify its directors, officers and
employees, and will have the power to indemnify its other agents, to the
full extent permitted by the General Corporation Law of the State of
Delaware (the "GCL"), as amended from time to time (but, in the case of any
such amendment, only to the extent that such amendment permitted US
Airways, to provide on June 29, 1989). As of the date of the prospectus,
Section 145 of the GCL, forming a part of this registration statement,
provides as follows:
(a) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that the person is
or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees) actually
and reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of
a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation only
as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made, with respect to a person who is
a director or officer at the time of such determination, (1) by a majority
vote of the directors who are not parties to such action, suit or
proceeding, even though less than a quorum, or (2) by a committee or such
directors designated by majority vote of such directors, even though less
than a quorum, or (3) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other subsections of this section will not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.
(h) For purposes of this section, references to the corporation
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, will stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to other enterprises
shall include employee benefit plans; references to fines shall include any
excise taxes assessed on a person with respect to any employee benefit
plan; and references to serving at the request of the corporation shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner not opposed to the best interests of the
corporation as referred to in this section.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive
jurisdiction to hear and determine all actions for advancement of expenses
or indemnification brought under this section or under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise.
The Court of Chancery may summarily determine a corporation's obligation to
advance expenses (including attorneys' fees).
US Airways maintains directors' and officers' liability insurance.
ITEM 16. EXHIBITS
Reference is made to the Exhibit Index which immediately precedes
the exhibits filed with this registration statement, which is incorporated
herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
Calculation of Registration Fee table in the effective
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that the undertakings made in paragraphs (i)
and (ii) above do not apply if the information required by those
paragraphs to be included in a post-effective amendment is
contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to
Section 13 or Section 15 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") that are incorporated by reference
in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 each such post-effective amendment will be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement will be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time will be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee
to act under subsection (a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Arlington, State of Virginia, on
October 4, 2000.
US AIRWAYS, INC.
By: /s/ RAKESH GANGWAL
------------------------------------
Rakesh Gangwal, Director, President and
Chief Executive Officer (Principal
Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated, on October 4, 2000.
By: /s/ RAKESH GANGWAL
------------------------------------
Rakesh Gangwal, Director, President
and Chief Executive Officer (Principal
Executive Officer)
By: /s/ THOMAS A. MUTRYN
------------------------------------
Thomas A. Mutryn
Senior Vice President--Finance and Chief
Financial Officer (Principal Financial Officer)
By: /s/ ANITA P. BEIER
-----------------------------------
Anita P. Beier
Vice President and Controller
(Principal Accounting Officer)
By: /s/ STEPHEN M. WOLF
------------------------------
Stephen M. Wolf,
Director and Chairman
By: *
------------------------------
Mathias J. DeVito, Director
By: *
------------------------------
Peter M. George, Director
By: *
------------------------------
Robert L. Johnson, Director
By: *
------------------------------
Robert LeBuhn, Director
By: *
------------------------------
John G. Medlin, Jr., Director
By: *
-------------------------------
Hanne M. Merriman, Director
By: *
-------------------------------
Thomas H. O'Brien, Director
By: *
-------------------------------
Hilda Ochoa-Brillembourg, Director
By: *
-------------------------------
Richard B. Priory, Director
By: *
-------------------------------
Raymond W. Smith, Director
BY: /s/ THOMAS A. MUTRYN
-------------------------------
Thomas A. Mutryn, Attorney-In-fact
* Signed pursuant to power of attorney filed herewith.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
4.1 Pass Through Trust Agreement
4.2 Form of Pass Through Certificate (included as part of
Exhibit 4.1)
5 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
12 Statements re: computations of ratios
23.1 Consent of KPMG LLP
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in its opinion filed as Exhibit 5)
23.3 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
24 Powers of Attorney
25 Form T-1 Statement of Eligibility of Trustee under the
Trust Indenture Act of 1939
