As filed with the Securities and Exchange Commission on February 13, 1998
Registration Number 333-____________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form S-3
Registration Statement Under the Securities Act of 1933
CCAIR, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 56-1428192
(State or other jurisdiction or incorporation or organization) (I.R.S. Employer Identification Number)
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P. O. Box 19929
Charlotte, North Carolina 28219-0929
(Address of principal executive offices)
Kenneth W. Gann, President
CCAIR, Inc.
P. O. Box 19929
Charlotte, North Carolina 28219-0929
(704) 359-8990
(Name, address and telephone number, including area code, of agent for service)
Copy to:
W. Scott Cooper, Esquire
Rayburn, Moon & Smith, P.A.
227 W. Trade Street, Suite 1200
Charlotte, NC 28202
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE 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 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, please check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
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If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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Calculation of Registration Fee
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to Offering Price Aggregate Amount of
To be Registered Be Registered Per Share Offering Price Registration Fee
- ---------------- ------------- --------- -------------- ----------------
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Common Stock (par value
$.01 per shares) 545,000 shares $ 3.1875 (1) $1,737,187.50 $ 512.47
- ---------------
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(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the bid and asked prices of the Company's Common Stock
as of February 11, 1998, as reported on the Nasdaq SmallCap Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED FEBRUARY 13, 1998
PROSPECTUS
CCAIR, INC.
545,000 Shares of Common Stock
This Prospectus relates to an aggregate of 545,000 shares (the "Shares") of
Common Stock, par value $.01 per share (the "Common Stock"), of CCAIR, Inc., a
Delaware corporation (the "Company"), being sold by certain shareholders of the
Company (the "Selling Shareholders"). See "Selling Shareholders." The Company
will not receive any proceeds from the sale of the Shares by the Selling
Shareholders.
The Company has registered the Shares under the Securities Act of 1933, as
amended (the "Securities Act"), for sale by the Selling Shareholders. The
Selling Shareholders have advised the Company that they may from time to time
sell all or part of the Shares in one or more transactions (which may involve
block transactions) in the over-the-counter market, on the Nasdaq SmallCap
Market (or any exchange on which the Shares may then be listed), in negotiated
transactions, through the writing of options on the Shares (whether such options
are listed on an options exchange or otherwise), or a combination of such
methods of sale, at market prices prevailing at the time of such sales or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders or purchasers of the Shares for whom
they may act as agent (which compensation may be in excess of customary
commissions). The Selling Shareholders may also pledge the Shares as collateral
for margin accounts or loans and the Shares could be resold pursuant to the
terms of such accounts or loans. In connection with such sales, the Selling
Shareholders and any participating brokers and dealers may be deemed to be
"underwriters" as defined in the Securities Act. Neither the Company nor the
Selling Shareholders can presently estimate the amount of commissions or
discounts, if any, that will be paid by the Selling Shareholders on account of
their sale of the Shares from time to time. The Company will pay all expenses,
estimated to be approximately $____________, in connection with this offering,
other than underwriting and brokerage commissions, discounts, fees and counsel
fees and expenses incurred by the Selling Shareholders.
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The Company's Common Stock is listed on the Nasdaq SmallCap Market under the
symbol ("CCAR"). On February 11, 1998, the last reported sale price for
the Common stock was $3.1875 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 13, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Atlanta Regional Office of the Commission at
3475 Lenox Road, N.E., Suite 1000, Atlanta, Georgia 30326-7232. Copies of such
materials may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Copies of each document may also be obtained through the Commission's
Internet address at http://www.sec.gov. The Common Stock of the Company is
quoted on the Nasdaq SmallCap Market. Reports, proxy statements and other
information concerning the Company may also be inspected at the offices of the
Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form S-3
(the "Registration Statement") under the Securities Act with respect to the
Shares offered hereby. This Prospectus, which is a part of the Registration
Statement, does not contain all the information set forth in, or annexed as
exhibits to, the Registration Statement, certain portions of which have been
omitted pursuant to rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is made to the
Registration Statement, including the exhibits thereto. Copies of the
Registration Statement, including the exhibits, may be obtained from the Public
Reference Section of the Commission at the aforementioned address upon payment
of the fee prescribed by the Commission. Copies of each document may also be
obtained through the Commission's internet address at http://www.sec.gov. The
summaries contained in this Prospectus of additional information included in the
Registration Statement or any exhibit thereto are qualified in their entirety by
reference to such information or exhibit.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents which have been filed by the Company with the Commission
pursuant to the Exchange Act or the Securities Act are incorporated by reference
in this Prospectus:
(i) The Company's Annual Report on Form 10-K for the year ended
June 30, 1997, as filed with the Commission on September 29,
1997;
(ii) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997, as filed with the Commission on
November 14, 1997;
(iii) The Company's Definitive Proxy Statement on Schedule 14A, as
filed with the Commission on October 3, 1997; and
(iv) The Company's Registration Statement on Form 8-A dated June
26, 1989, as filed with the Commission on June 27, 1989.
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In addition, all documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Shares offered hereby shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of such documents.
Any information contained herein or in a document incorporated by reference
herein shall be deemed to be modified or replaced for purposes of this
Prospectus to the extent that information contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or replaces such information. Any such information so modified or
replaced shall not be deemed, except as so modified or replaced, to constitute a
part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of any such person, a copy of any and all of
the above documents (not including exhibits to any of such documents unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Such requests should be addressed to the
Secretary, CCAIR, Inc., P. O. Box 19929, Charlotte, North Carolina 28219-0929.
THE COMPANY
CCAIR, Inc. (the "Company") is a Charlotte, North Carolina based regional air
carrier providing regularly scheduled passenger service to 21 cities in Georgia,
Kentucky, Ohio, North Carolina, South Carolina, Virginia, and West Virginia,
primarily from a hub at the Charlotte/Douglas International Airport. The Company
currently operates a fleet of 21 turboprop passenger aircraft with approximately
1,199 weekly scheduled departures over a route system covering approximately
205,000 miles. The Company was incorporated under Delaware law in July 1984
under the name Sunbird Airlines 1984, Inc., for the purpose of purchasing
substantially all of the assets of Sunbird Airlines, Inc. The Company changed
its name to CCAIR, Inc., in January 1986. The mailing address and telephone
number of the Company are:
CCAIR, Inc.
P. O. Box 19929
Charlotte, NC 28219-0929
(704) 359-8990
The Company's business has principally involved providing service for business
travelers from small- and medium-sized communities in its market area to
connecting flights of major carriers, principally US Airways, Inc. ("US
Airways"), at a hub operation of US Airways at the Charlotte/Douglas
International Airport. In addition, the Company operates a small number of
flights into Raleigh, North Carolina. In order to market the Company's services,
the Company has an agreement with US Airways that permits the Company to operate
under the name "US Airways Express" and to charge their joint passengers on a
combined basis with US Airways. (See discussion under "Risk Factors Relationship
With US Airways" below). The Company believes
3
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that its use of US Airways' "US" flight designator code continues to be the most
significant factor contributing to its ability to compete for passengers and to
its historical growth.
RISK FACTORS
The shares offered hereby involve a high degree of risk. Prospective investors
should carefully consider, among other things, the following factors before a
decision is made to purchase any shares.
Relationship with US Airways. Substantially all of the Company's passenger
revenue is generated by passengers who are connecting with US Airways flights
and is determined under an Agreement for the sharing of joint passenger fares
and division of revenue with US Airways (the "Agreement"). The Agreement expires
on October 31, 1998. The Agreement provides that it may be terminated upon 180
days prior written notice for any reason by either US Airways or the Company or
upon ten (10) days prior written notice by US Airways under certain conditions,
including if: (i) the Company fails to maintain at least a minimum required
operating schedule; (ii) during any one month the Company's flight completion
percentage is less than 96% due to cancellations attributable to maintenance or
operational deficiencies within the Company's control; (iii) the Company fails
to comply with the trademark licensing provisions of the Agreement; (iv) the
Company becomes insolvent; or (v) there is a change of control or ownership of
51% or more of the Company's Common Stock without the consent of US Airways.
The Agreement does not prevent US Airways from serving markets that the Company
currently serves. If US Airways chose to serve a substantial number of routes
presently served by the Company or chose to replace Company flights with its own
flights or flights of its wholly owned regional carriers, there would be a
material adverse effect on the Company's business and the Company may have to
terminate its passenger operations as these presently exist. Although there is
no assurance that US Airways will not take any such actions or that the
Agreement will not be terminated or amended prior to the expiration date, the
Company believes that the Agreement is beneficial to both the Company and US
Airways and that there are significant incentives for the continuation of the
Agreement.
The Company and US Airways have begun negotiations for an extension of the
Agreement. The principal focus of these negotiations has been the locations that
the Company would service under the extended Agreement and the aircraft that the
Company would use to provide the service. As described below, the Company has
embarked on a program to change the composition of its fleet of aircraft. The
Company believes that its relationship with US Airways is good and that the
Agreement will be extended for a minimum of five (5) years. However, the
extension of the Agreement is within the discretion of US Airways. The Company
can offer no assurances that an extension of the Agreement will ultimately be
obtained.
Because of the Company's relationship with US Airways, the Company's business
also could be adversely affected by events that adversely affect US Airways or
by changes in business strategies of US Airways. For example, if US Airways were
adversely affected by work stoppages or other labor difficulties, the Company's
connecting passenger traffic from US Airways would be reduced and the Company's
ability to provide service to passengers desiring US Airways connecting flights
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likewise would be adversely affected. If US Airways were to decide to curtail
growth at its Charlotte hub or reduce its operations in Charlotte, the Company's
operations and prospects for continued growth would be adversely affected. The
Company is not aware of any such developments.
Nature of the Airline Industry. The commercial airline industry in the United
States has undergone major structural changes since it was deregulated by
Congress in the latter part of 1978. In the ensuing period, there has been
substantial consolidation and integration of both major and regional carriers,
including the acquisition or association of most regional carriers by or with
major carriers. Such consolidation and integration, together with automated
computer reservation systems, "hub and spoke" route systems and marketing
programs such as frequent flyer programs have substantially influenced
competitive conditions. The Company believes that it has properly positioned
itself to benefit from these structural realities. However, any event which
causes a material change in the Company's ability to benefit from these factors,
such as termination or modification of its relationship with US Airways could
cause these forces to work against the Company and have a material adverse
effect on its results.
As is characteristic of the airline industry, the Company is subject to a high
degree of financial and operating leverage. Due to high fixed costs, the
expenses of each flight do not vary proportionately with the number of
passengers carried, but the revenues generated from a particular flight are
directly related to the number of passengers carried. Accordingly, while a
decrease in the number of passengers carried would cause a corresponding
decrease in revenue if not offset by higher fares, it may result in a
disproportionately greater decrease in profits.
The airline industry is also sensitive to cyclical downturns in the general
economy. Because a substantial portion of airline travel, both personal and to
lesser extent business, is discretionary, the industry has historically tended
to experience weaker financial results during economic downturns. The operating
and financial results of the Company may be negatively impacted by any downturn
in national or regional economic conditions.
The cost of fuel is a major component of operating expense for all airlines. In
the last two fiscal years, the Company experienced significant increases in fuel
expense as the price of fuel rose from 67.1 cents per gallon to 93.8 cents per
gallon. While the price per gallon has dropped to approximately 71 cents per
gallon, there can be no assurance that increases in fuel costs will not be
substantial, or that supplies will remain plentiful. Substantial increases in
the cost of fuel, or a reduction in fuel supplies, can have an adverse effect on
the Company's income and growth prospects if increases are not passed on to its
passengers through higher fares, or adequate fuel cannot be acquired to support
operations.
In addition, pilot turnover has become a significant issue among regional
carriers as major carriers have satisfied their expanding demand for experienced
commercial pilots by hiring increasing numbers of regional pilots. To date,
pilot turnover has not been a major problem for the Company since the Company
has been able to hire and train sufficient numbers of new pilots to maintain its
operations. However, no assurance can be given that pilot turnover will not
become a major problem in the future, particularly as major carriers expand and
require significant additional pilots. Similarly, there can be no assurance that
sufficient numbers of new pilots will be available to support any future growth
even if pilot turnover does not become a major problem for the Company.
5
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New Aircraft Types; Change in Fleet Plan. On July 1, 1997, the Company's
passenger aircraft fleet consisted of seven (7) Shorts 360 aircraft, fourteen
(14) Jetstream 31 aircraft and four (4) de Havilland Dash 8 aircraft. In
anticipation of an extension of the Agreement with US Airways and as a means to
reduce operating expense, the Company has explored replacement aircraft for its
fleet. The Shorts 360 aircraft will not be compatible with the anticipated
service requirements under an extended Agreement and maintenance expense for
these aircraft has dramatically increased due to age and the availability of
parts. The Jetstream 31 aircraft had limitations that were causing the
profitability of those aircraft to be restricted. The Company has reached a
tentative agreement with the lessor for the Shorts 360 aircraft whereby the
Company will be returning the aircraft to the lessor in exchange for a
convertible subordinated debenture in the amount of approximately $8 million.
The Company has also entered into a memorandum of understanding with the lessor
for the Jetstream 31 aircraft whereby the Company will exchange its fleet of 14
Jetstream 31 aircraft for 20 newer and more powerful Jetstream 32 aircraft. The
Company believes that these acquisitions will reduce operating expense and
improve performance measures, such as on-time departures and arrivals, denied
boardings and cancellations.
To achieve these reductions and improvements, however, the Company will record a
charge to operating expense for the lease terminations of approximately $6.2
million and will write off between $5 and $10 million of parts assemblies,
capital overhauls and leasehold improvements. While the Company is confident
that these steps will lead to improved operating results, there can be no
assurance that improved operating results will materialize or that the Agreement
will be extended as a result by US Airways. The effects of the foregoing will
adversely affect the Company's operating results and balance sheet in the period
the transactions are consummated and may result in a reduction of the market
price for the Company's common stock.
Liquidity. The Company's ability to meet its liquidity requirements is dependent
upon its ability to obtain sufficient cash flow from operations. At September
30, 1997, the Company had cash and cash equivalents of $328,000. In addition to
the normal operating expenses incurred in scheduled airline operations, the
Company anticipates incurring expenditures related to the return of the Shorts
and Jetstream aircraft. The return conditions entail performing certain engine
overhauls and other major component overhaul and repair per the original leases.
These expenditures are currently estimated to be less than $1 million in the
aggregate.
The key element to the operating results of the Company is the level of the
yield per revenue per passenger mile. While recent yields have met Company
projections, the yield could be affected by fare discounting beyond the control
of the Company. If operating cash flows, the Company's $4,000,000 line of credit
with an affiliate of British Aerospace and the proceeds of $1,498,750 from the
sale of Common Stock under the Purchase Agreement (defined below) are
insufficient to meet obligations, the Company has these financing sources
available: short-term loans from officers and directors; extending terms and
trade creditors; and restructuring aircraft lease payments.
Competition. The principal competition for the Company is the air service
provided by major and other regional air carriers operating from hub airports in
Atlanta, Cincinnati, and Raleigh/Durham. From these hub airports, Delta Air
Lines ("Delta"), Midway Airlines ("Midway") and their affiliates offer service
to some destinations also served by US Airways through its hub operations at the
Charlotte/Douglas International Airport. The Company competes with Delta and
Midway
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and with regional air carriers that have joint marketing agreements with them
for passengers traveling to destinations served through hub airports. The
principal customers for these services are business travelers and competition is
based upon scheduling and flight connections, reliability and, to a lesser
extent, pricing. The Company constantly reviews its scheduling and the frequency
of its flights to reduce the layover time experienced in connecting with a US
Airways flight, in order to minimize the length of the combined trip and to
compete with similar service offered by Delta or Midway.
Reliance on Key Employee. The Company's operations are dependent upon the
services of its President, Mr. Kenneth W. Gann. The loss of Mr. Gann's services
could have a material adverse effect on the Company. The Company maintains a
$600,000 key-man life insurance policy on Mr. Gann, the proceeds of which are
payable to the Company. Mr. Gann serves the Company under a three-year renewable
employment agreement.
Dilution. The consummation of the offering made hereby will not result in
substantial dilution of existing shareholders of the Company. However, the
Company is not able to predict the effect, if any, this offering will have on
the market price for the Company's Common Stock.
Risks Associated With Forward-Looking Statements. This Prospectus contains
certain forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934 and the
Company intends that such forward-looking statements be subject to the safe
harbors for such statements under such sections. The forward-looking statements
herein are based on current expectations that involve a number of risks and
uncertainties. Such forward-looking statements are based on numerous
assumptions, including, but not limited to, the assumptions that the Agreement
will be extended, the introduction of new aircraft to the fleet will yield
improved operating results and a reduction in costs per available seat mile, and
the Company will obtain markets under an extended Agreement that will provide
opportunities for profitable operations.
The foregoing assumptions are based on judgments with respect to, among other
things, future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond the Company's control. Accordingly, although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any such assumption could prove to be inaccurate and therefore
there can be no assurance that the results contemplated in forward-looking
statements will be realized. The forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ materially from
those set forth in or implied by the forward-looking statements, including, but
not limited to, the risk of increases in the cost of fuel or the lack of
availability of fuel, the Company's inability to introduce new aircraft,
downturn in general economic conditions and in the operating condition of US
Airways in particular and the unavailability of pilots and other personnel
necessary for current or expanded operations.
No Dividends. The Company has not paid any dividends on its Common Stock and
does not intend to pay dividends in the foreseeable future.
NASDAQ Listing; "Penny Stock" Rules. Although the Common Stock is listed on the
Nasdaq SmallCap Market, there can be no assurance that such listing will be
maintained. If the Company's Common Stock is delisted for failure to meet the
Nasdaq listing maintenance requirements, the
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Common Stock would be subject to the rules promulgated under the Securities
Exchange Act of 1934 relating to "penny stocks" which apply to non-Nasdaq
Companies whose stock trades at less than $5 per share or whose tangible net
worth is less than $2,000,000. These rules require brokers who sell securities
subject to such rules to persons other than established customers and
"accredited investors" to complete certain documentation, make suitability
inquiries of investors and provide investors with certain information concerning
the risks of trading in the security. These rules may restrict the ability of
brokers to sell the Company's Common Stock and may affect the ability of
purchasers in this offering to sell such Common Stock in the secondary market.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the Shares
being offered by the Selling Shareholders hereunder. Expenses expected to be
incurred by the Company in connection with this offering are estimated at
approximately $_________________.
SELLING SHAREHOLDERS
The Shares covered by this Prospectus were acquired from the Company in a
private offering pursuant to a Common Stock Purchase Agreement (the "Purchase
Agreement") for an aggregate purchase price of $1,498,750 ($2.75 per share). The
offer and sale by the Company of the Common Stock to the Selling Shareholders
pursuant to the Purchase Agreement was made pursuant to an exemption from the
registration requirements of the Securities Act provided by Section 4(2)
thereof. The Purchase Agreement contains representations and warranties as to
each Selling Shareholder's status as an "accredited investor" as such term is
defined in Rule 501 promulgated under the Securities Act. In addition, the
Company agreed to reimburse certain legal expenses incurred by the Selling
Shareholders in connection with the sale of the Shares by the Company pursuant
to the Purchase Agreement in the amount of $9,500.
Pursuant to the Purchase Agreement, each Selling Shareholder has represented
that he, she or it acquired the Shares for its own account as principal, for
investment purposes only, and not with a present view to, or for, the resale
distribution thereof, in whole or in part, within the meaning of the Securities
Act. The Company agreed, in the Purchase Agreement, to prepare and file a
registration statement and to bear all expenses in connection with the offering,
other than selling commissions, underwriting fees and stock transfer taxes
applicable to the Shares and all fees and disbursements of counsel for any
Selling Shareholder. Accordingly, in order to permit the Selling Shareholders to
sell the Shares when each deems appropriate, the Company has filed with the
Commission a Registration Statement on Form S-3, of which this Prospectus forms
a part, with respect to the resale of the Shares from time to time as described
herein and has agreed to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration Statement
effective for a period of five (5) years or until all Shares offered hereby have
been sold pursuant thereto.
Prior to the acquisition of the Shares, only two of the Selling Shareholders had
a material relationship with the Company. Par Investment Partners, L.P., through
open market purchases, acquired 460,000 shares of Common Stock of the Company,
representing approximately 5.9% of
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the then outstanding shares of Common Stock, prior to the acquisition of the
Shares. After the acquisition of the Shares, Par Investment Partners, L.P.,
through open market purchases, acquired an additional 125,000 shares of Common
Stock of the Company. Jonathan G. Ornstein is a limited partner in Barlow
Partners, L.P., a Texas limited partnership, that owned approximately 6.6% of
the outstanding shares of Common Stock of the Company prior to the issuance of
the Shares. Barlow Partners, L.P., has served as a financial advisor and
consultant to the Company in connection with the replacement of the Shorts 360
aircraft. Upon consummation of the return of the Shorts 360 aircraft, Barlow
Partners, L.P., will be issued warrants to acquire 150,000 shares of Common
Stock. Mr. Ornstein made a short-term loan in the amount of $350,000 to the
Company in November 1997, and received warrants to purchase 8,750 shares of
Common Stock.
The following table sets forth the names of the Selling Shareholders, the number
of shares of Common Stock owned beneficially by the Selling Shareholders as of
January 9, 1998 and the number of shares which may be offered by each of them
pursuant to this Prospectus. This information is based upon information provided
by the Selling Shareholders. There are currently no agreements, arrangements or
understandings with respect to the sale of any of the Shares by the Selling
Shareholders. The Shares are being registered to permit public secondary trading
of the Shares, and the Selling Shareholders may offer the Shares for resale from
time to time.
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Number of
Shares Beneficially Owned Shares Shares Beneficially Owned
Prior to Offering Offered Hereby After The Offering(1)
Name of -------- -------- -------------- ---------------------
Selling Shareholder Shares Percentage(2) Shares Percentage(2)
- ------------------- ------ ------------- ------ -------------
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Robert Priddy 187,014 2.2% 100,000 87,014 1.0%
Bonderman Family
Limited Partnership 200,000 2.4% 200,000 0 --
Hakatak Enterprises, Inc.
Nominee(3) 223,750 2.7% 100,000 123,750 1.5%
Par Investment Partners, L.P. 685,000 8.2% 100,000 585,000 7.0%
Jonathan G. Ornstein(4) 434,200 5.2% 45,000 389,200 4.7%
---------- ------ -------- ---------- -----
Total 1,729,964 20.7% 545,000 1,184,964 14.2%
========= ===== ======= ========= ====
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</TABLE>
(1) Assumes all Shares registered hereby are sold. Since the Selling
Shareholders may sell all, some or none of their Shares, no actual estimate
can be made of the aggregate number of Shares that each Selling Shareholder
will own upon completion of the offering to which this Prospectus relates.
(2) The total number of shares of common stock outstanding on December 31, 1997
was 8,335,695.
(3) Hakatak Enterprises, Inc., Nominee is the nominee name for shares held by
(a) HP Partners, L.P., a California limited partnership, the general
partner of which is Hakatak Enterprises, Inc., and (b) Tamir Hacker and
Terri Hacker. The shares shown are beneficially owned by Tamir Hacker and
Terri Hacker.
9
<PAGE>
(4) Included are 370,000 shares owned of record by Barlow Partners, L.P., a
Texas limited partnership, that Mr. Ornstein may be deemed to own
beneficially on the basis of certain provisions in the partnership
agreement for Barlow Partners, L.P.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they may from time to
time sell all or part of the Shares in one or more transactions (which may
involve block transactions) in the over-the-counter market, on the Nasdaq
SmallCap Market (or any exchange on which the Shares may then be listed), in
negotiated transactions, through the writing of options on the Shares (whether
such options are listed on an options exchange or otherwise), or a combination
of such methods of sale, at market prices prevailing at the time of such sales
or at negotiated prices. The Selling Shareholders may effect such transactions
by selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders or purchasers of the Shares for whom
they may act as agent (which compensation may be in excess of customary
commissions). The Selling Shareholders may also pledge the Shares as collateral
for margin accounts or loans and the Shares could be resold pursuant to the
terms of such accounts or loans. In connection with such sales, the Selling
Shareholders and any participating brokers and dealers may be deemed to be
"underwriters" as defined in the Securities Act. Neither the Company nor the
Selling Shareholders can presently estimate the amount of commissions or
discounts, if any, that will be paid by the Selling Shareholders on account of
their sale of the Shares from time to time. In addition to sales under the
Registration Statement, Shares may be sold by the Selling Shareholders through
an applicable exemption from registration, including, without limitation,
pursuant to Rule 144 under the Securities Act.
Under the securities laws of certain states, the Shares may be sold in such
states only through registered or licensed brokers or dealers. In addition, in
certain states the Shares may not be sold unless the Shares have been registered
or qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.
The Selling Shareholders and other persons participating in the distribution of
the Shares offered hereby are subject to the applicable requirements of
Regulation M promulgated under the Exchange Act in connection with the sale of
the Shares.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby has been passed upon
for the Company by Rayburn, Moon & Smith, P.A., Charlotte, North Carolina.
EXPERTS
The financial statements incorporated by reference in this prospectus and
registration statement have been audited by Arthur Andersen LLP, independent
public accountants and are incorporated
10
<PAGE>
herein by reference, in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
11
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, BY ANY PERSON IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
Available Information .................................................... 2
Incorporation of Certain Information by Reference ........................ 2
The Company .............................................................. 3
Risk Factors ............................................................. 4
Use of Proceeds .......................................................... 8
Selling Shareholders ..................................................... 8
Plan of Distribution ..................................................... 9
Legal Matters ............................................................ 10
Experts .................................................................. 10
545,000 SHARES
CCAIR, INC.
COMMON STOCK
----------------------------------------------
PROSPECTUS
----------------------------------------------
February 13, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with this offering are as follows:
AMOUNT
Registration Fee ..............................................$12.74
Nasdaq Listing Fee .............................................5,450
Legal fees and expenses ............................................*
Accounting fees and expenses .......................................*
Miscellaneous ......................................................*
Total ..................................................... $
*To be supplied.
ITEM 15..INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under provisions of Delaware law and the Company's Bylaws, directors, officers
and controlling persons of the Company may be entitled to indemnification by the
Company against liabilities arising out of any suit or proceeding, whether
civil, criminal, administrative or investigative, including a suit or proceeding
under the Securities Act of 1933, to which they were a party by reason of
serving as a director, officer, employee or agent of the Company. Such
provisions require the Company to indemnify any such person against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding upon a determination, by a majority vote of a quorum of the
Board of Directors consisting of directors who were not parties to such action,
suit or proceeding, or by independent legal counsel in a written opinion, or by
the stockholders of the Company, that such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Absent such determination,
the Company may, by a vote of the disinterested directors or the stockholders
and to the extent permitted by applicable law, indemnify any such person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such suit or proceeding.
ITEM 16. EXHIBITS
The following exhibits are included as a part of this Registration Statement:
II-1
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4.1 Form of Common Stock Purchase Agreement
5.1 Opinion of Rayburn, Moon & Smith, P.A.
23.1 Consent of Rayburn, Moon & Smith, P.A. (contained in Exhibit 5.1)
23.2 Consent of Arthur Anderson LLP
24.1 Reference is made to the Signatures section of this Registration
Statement for the Power of Attorney contained therein
ITEM 17. UNDERTAKINGS
(a) 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.
(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;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the shares offered therein, and the offering
of such shares 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 shares being registered which remain unsold at the termination of the
offering.
II-2
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the shares offered therein, and the offering of such shares at that
time shall be deemed to be the initial bona fide offering thereof.
(c) 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 shares being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Charlotte, North Carolina, as of February 13, 1998.
CCAIR, Inc.
By: /s/ Kenneth W. Gann
-------------------------------
Kenneth W. Gann
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
hereby constitutes and appoints Kenneth W. Gann and Eric W. Montgomery true and
lawful attorneys-in-fact, each acting alone, with full powers of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities to sign any or all amendments, including any post-effective
amendments, to this registration statement, and to file the same, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorneys-in-fact or their substitutes, each acting alone, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated as of February 13, 1998.
/s/ Kenneth W. Gann
- -----------------------------------------------------
Kenneth W. Gann, Chief Executive Officer,
President and Director (Principal Executive Officer)
/s/ Eric W. Montgomery
- -----------------------------------------------------
Eric W. Montgomery, Vice President,
Secretary, Treasurer and Controller and Director
(Principal Accounting Officer)
/s/ George Murnane, III
- -----------------------------------------------------
George Murnane, III, Director
/s/ Dean E. Painter, Jr.
- -----------------------------------------------------
Dean E. Painter, Jr., Director
/s/ Gordon Linkon
- -----------------------------------------------------
Gordon Linkon, Director
/s/ K. Ray Allen
- -----------------------------------------------------
K. Ray Allen, Director
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
4.1 Form of Common Stock Purchase Agreement
5.1 Opinion of Rayburn, Moon & Smith, P.A.
23.2 Consent of Arthur Andersen LLP
CCAIR, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of December 3, 1997, by
and between CCAIR, Inc., a Delaware corporation (the "Company"), and the
individual or entitles listed on Exhibit 1 attached hereto and incorporated
herein by reference (collectively the "Investors" or, individually, the
"Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE.
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, Investors agree to purchase at the Closing, and
the Company agrees to sell and issue to Investors at the Closing, against cash
payment, five hundred forty-five thousand (545,000) shares (the "Shares") of the
common stock, par value $0.01 per share, of the Company (the "Common Stock"), in
such amount as set forth beside the name of each Investor on Exhibit 1. The
purchase price for the Shares shall be calculated at a per share price equal to
$2.75 per share (the "Purchase Price").
1.2 CLOSING. The purchase and sale of the Shares shall take place at
the offices of Company, at eleven o'clock a.m. on December 3, 1997, or at such
other time and place as the Company and the Investors mutually agree upon (which
time and place are designated the "Closing"). At the Closing, subject to Section
9.7 hereof, each Investor shall deliver to the Company immediately collectable
funds in the respective amount of the Purchase Price determined by multiplying
the Purchase Price per Share by the number of Shares set forth beside the name
of each Investor on Exhibit 1. The Company will deliver a certificate
representing the Shares to each Investor at the respective address set forth on
Exhibit 1 within two (2) business days of the date of Closing.
1.3 USE OF PROCEEDS. The Company agrees to use the net proceeds from
the sale of the Shares for the repayment of outstanding obligations, for the
reduction of trade debt and for working capital purposes.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on Exhibit 2, the Company hereby represents and
warrants to the Investors that:
2.1 INCORPORATION. The Company and each of the Subsidiaries (as defined
in paragraph 2.3) is a corporation duly organized and validly existing, is in
good standing under the laws of the state or other place of its incorporation,
has all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted, and the
1
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Company and each of the Subsidiaries is qualified as a foreign corporation in
each jurisdiction where the failure so to qualify would have a material adverse
effect on its business or operations.
2.2 CAPITALIZATION. The authorized capital of the Company consists of
ten million (10,000,000) shares of Common Stock, of which at Closing not more
than nine million nine hundred ninety-five thousand, six hundred thirteen
(9,995,613) shares will be issued and outstanding or reserved for issuance under
options, warrants or benefit plans.
2.3 SUBSIDIARIES. Except as set forth on Exhibit 2 attached hereto, the
Company does not presently control, directly or indirectly, any other
corporation, association or business entity. The entities listed on Exhibit 2
are referred to herein as the "Subsidiaries." Each of the Subsidiaries is wholly
owned by the Company and has no operations.
2.4 AUTHORIZATION. All corporate action on the part of the Company, its
officers and directors necessary for the authorization, execution, delivery and
performance of all obligations of the Company under this Agreement and for the
authorization, issuance and delivery of the Shares being sold hereunder has been
or shall be taken prior to the Closing, and this Agreement, when executed and
delivered, shall constitute a valid and legally binding obligation of the
Company. Issuance of the Shares is not subject to preemptive rights or other
preferential rights of any present or future stockholders in the Company.
2.5 VALIDITY OF SECURITIES. The Shares to be purchased and sold
pursuant to this Agreement, when issued, sold and delivered in accordance with
its terms for the consideration expressed herein, shall be duly and validly
issued.
2.6 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
of any provisions of its Articles of Incorporation, its Bylaws, any material
mortgage, indenture, lease, agreement or other instrument to which it is a
party, or of any provision of any federal or state judgment, writ, decree,
order, statute, rule or governmental regulation applicable to the Company. The
execution, delivery and performance of this Agreement will not result in any
such violation or be in conflict with or constitute a default under any such
provision.
2.7 LITIGATION. There are no actions, proceedings or investigations
pending, or to the knowledge of the Company threatened, which question the
validity of this Agreement or which might result, either individually or in the
aggregate, in any material adverse change in the assets, conditions, affairs or
prospects of the Company, nor, to the knowledge of the Company, has there
occurred any event or does there exist any condition which might properly be the
basis therefor.
2.8 FINANCIAL STATEMENTS. The Company has previously furnished a copy
of the Company's annual report on Form 10-K for the fiscal year ended June 30,
1997, containing audited financial statements as at June 30, 1997 and for the
three years then ended. All such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a basis
consistent with prior periods, fairly present the financial condition
2
<PAGE>
of the Company as of dates thereof, and the results of operations of the Company
for the periods indicated.
2.9 ABSENCE OF CERTAIN CHANGES. Except as set forth on Exhibit 2
attached to this Agreement, since June 30, 1997, whether or not in the ordinary
course of business, there has not occurred or arisen (a) any material adverse
change in the financial condition, operations, business or prospects of the
Company, or (b) any event, condition or state of facts of any character which
materially or adversely affects, or may materially or adversely affect, the
financial condition, operations, business or prospects of the Company.
2.10 TAX RETURNS AND REPORTS. All federal income tax and state
franchise tax returns and tax reports required to be filed by the Company have
been filed with the appropriate governmental agencies in all jurisdictions in
which such returns or reports are required to be filed. All such returns and
reports constitute complete and accurate representations, in all material
respects, of the tax liabilities of the Company. All federal income tax and
state franchise and other taxes (including interest and penalties) due from the
Company have been fully paid or adequately provided for on the books and
financial statements of the Company. The Company has not entered into any
agreements with federal and state taxing authorities extending the statute of
limitations with respect to the assessment of federal and state taxes for any
period.
2.11 EXCHANGE ACT REPORTS. The Company has timely filed with the
Securities and Exchange Commission (the "Commission") all reports required to be
filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and such reports complied in all material respects with the requirements
of the Exchange Act and were complete and accurate in all material respects at
the time of filing and do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF INVESTORS. Each Investor,
severally and not jointly, represents and warrants to the Company as follows:
3.1 AUTHORIZATION. When executed and delivered by such Investor, this
Agreement will constitute the valid and legally binding obligation of such
Investor.
3.2 ACCREDITED INVESTOR. Such Investor is an "accredited investor" as
that term is defined in Rule 501 promulgated under the Securities Act of 1933,
as amended (the "Act").
4. SECURITIES ACT OF 1933.
4.1 INVESTMENT REPRESENTATION.
(a) This Agreement is made with each Investor in reliance upon its
representations to the Company, which by its acceptance hereof each Investor
hereby confirms, that the Shares to
3
<PAGE>
be received will be acquired for investment for an indefinite period for its own
account and not with a view to the sale or distribution of any part thereof, and
that it has no present intention of selling or otherwise distributing the same,
but subject, nevertheless, to each Investor's rights under Section 7 hereof and
to any requirement of law that the disposition of its property shall at all
times be within its control. By executing this Agreement, each Investor further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell or transfer to such person any of the
Shares.
(b) Each Investor understands that the Shares are not and may never be
registered under the Act on the ground that the sale provided for in this
Agreement and the issuance of Shares is exempt pursuant to Section 4(2) of the
Act and Rule 506 of Regulation D thereunder, and that the Company's reliance on
such exemption is predicated on its representations set forth herein; provided,
however, that nothing provided in this Section 4.1(b) shall in any way limit
such Investor's rights under Section 7 hereof or any other specific provision of
this Agreement.
(c) Each Investor agrees that in no event will it make a disposition of
any of the Shares, unless the Shares shall have been registered under the Act,
or unless and until (i) it shall have notified the Company with a statement of
the circumstances surrounding the proposed disposition and (ii) it shall have
furnished the Company with an opinion of counsel reasonably satisfactory to the
Company to the effect that (A) such disposition will not require registration
under the Act, and (B) that appropriate action necessary for compliance with the
Act has been taken. Notwithstanding the foregoing, each Investor that is an
entity qualifying as an accredited investor under Rule 501(a)(8) may distribute
any of the Shares to the owners of its equity.
(d) Each Investor that is an entity represents that it was not formed
or organized for the purposes of making an investment in the Shares in
accordance with this Agreement.
(e) Each Investor represents that it has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, has the ability to bear the economic risks of its
investment and has been furnished with, and has had access to, such information
as would be made available in the form of a registration statement together with
such additional information as is necessary to verify the accuracy of the
information supplied and to have all questions which have been asked by such
Investor answered by the Company.
(f) Each Investor understands that if a registration statement covering
the Shares under the Act is not in effect when it desires to sell any of the
Shares, it may be required to hold such Shares for an indeterminate period. Each
Investor also acknowledges that it understands that any sale of the Shares which
might be made by it in reliance upon Rule 144 under the Act may be made only in
accordance with the terms and conditions of that Rule.
4.2 LEGENDS. All certificates for the Shares shall bear substantially
the following legend:
4
<PAGE>
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED BY THE
ISSUEE FOR INVESTMENT PURPOSES. SAID SHARES MAY NOT BE SOLD OR
TRANSFERRED UNLESS (A) THEY HAVE BEEN REGISTERED UNDER SAID ACT, OR (B)
THE COMPANY IS PRESENTED WITH EITHER A WRITTEN OPINION SATISFACTORY TO
THE COMPANY OR A `NO-ACTION' OR INTERPRETIVE LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE OR TRANSFER.
5. CONDITIONS TO INVESTORS' OBLIGATIONS AT CLOSING.
The obligations of the Investors under paragraphs 1.1 and 1.2 of this
Agreement are subject to the fulfillment at or before the Closing of each of the
following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in paragraph 2 hereof, subject to the disclosures contained in Exhibit
2, shall be true on and as of the Closing with the same effect as though said
representations and warranties had been made on and as of the Closing.
5.2 PERFORMANCE. The Company shall have performed and complied with all
agreements and conditions contained herein required to be performed or complied
with by it on or before the Closing.
5.3 STATE SECURITIES LAWS. The Company will have complied with all
requirements under all applicable state securities laws with respect to the
offer and sale of the Shares.
5.4 OPINION OF COUNSEL. There shall have been delivered to counsel for
the Investors an opinion of Rayburn, Moon & Smith, P.A., counsel for the
Company, to the effect that (i) the Company is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware,
(ii) this Agreement has been duly authorized, executed, and delivered by the
Company and constitutes a valid and enforceable obligation of the Company in
accordance with its terms, (iii) the Shares have been duly authorized, issued
and delivered and are fully paid and nonassessable and validly outstanding and
(iv) based in part upon the representations of Investors the offer, sale, and
delivery of the Shares under the circumstances contemplated by this Agreement
constitutes an exempt transaction under the Act.
5.5 COUNSEL FEES. The legal fees and expenses of Winstead Sechrest &
Minick P.C. incurred by Investors shall have been paid in accordance with
Section 9.7 of this Agreement.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
5
<PAGE>
The obligations of the Company under paragraphs 1.1 and 1.2 of this
Agreement are subject to the fulfillment at or before the Closing of each of the
following conditions:
6.1 WARRANTIES TRUE ON THE CLOSING DATE. The representations and
warranties of the Investors contained in paragraphs 3 and 4 hereof shall be true
on and as of the Closing with the same effect as though said representations and
warranties had been made on and as of the Closing.
6.2 RECEIPT OF FUNDS. Subject to Section 9.7 hereof, the Company shall
have received the applicable portion of the funds representing the Purchase
Price from each Investor.
7. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
7.1 DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. At any time after the date
hereof and prior to October 31, 2007, Investor or any transferee of Investor
then holding Shares constituting one percent or more of the outstanding Common
Stock may make a written request ("Demand Notice") for registration under the
Act (a "Demand Registration") of all or part of their respective Shares, subject
to the conditions of this Agreement. Each Demand Notice will specify the number
of Shares proposed to be sold and will also specify the intended method of
disposition thereof. Within ten days after receipt of each Demand Notice, the
Company will give written notice of the Company's receipt of such Demand Notice
to all other holders of Shares (the "Holders") at least 20, but not more than
60, days before the anticipated filing date of a registration statement as
required by this paragraph, and such Holders will be given the opportunity to
participate in such Demand Registration and each Holder electing to participate
shall be deemed a Demanding Holder (as hereinafter defined) for purposes of this
Agreement. Subject to paragraph 7.1(d) hereof, the Company will include in such
Demand Registration all Shares with respect to which the Company has received
written requests for inclusion therein within fifteen days after the delivery to
the applicable Holders of the Company's notice. Each such Holder's request also
will specify the number of Shares to be registered and, subject to paragraph
7.1(f) hereof, the intended method of disposition thereof. Demand Registration
shall be on such appropriate registration form of the Commission as the Company
shall determine.
(b) LIMITATION ON DEMAND REGISTRATION. The Company shall not
be obligated to effect more than three Demand Registrations under this paragraph
7.1.
(c) EFFECTIVE REGISTRATION. Under receipt of a Demand Notice,
the Company will (i) promptly prepare and file a registration statement covering
the Shares requested to be included in such Demand Registration (subject to
paragraph 7.1(e) below) and (ii) cause each Demand Registration to become
effective under the Act and thereafter to keep it effective under the Act for a
period of 120 days. A registration will not count as a Demand Registration (i)
unless a registration statement with respect thereto has become effective
(unless the Holders whose Shares are included in such Demand Registration
("Selling Demand Holders") withdraw
6
<PAGE>
their request for the Demand Registration, in which case such demand shall count
as a Demand Registration unless the Selling Demand Holders agree to pay all
Registration Expenses (as hereinafter defined)), (ii) if after it has become
effective, such registration is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason not attributable to the Selling Demand Holders and has not
thereafter become effective, or (iii) if the conditions to closing specified in
the underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived, other than by reason of a failure on
the part of the Selling Demand Holders. Except as set forth above, the Company
will pay all Registration Expenses in connection with any Demand Registration,
whether or not it becomes effective.
(d) NO THIRD-PARTY PIGGY-BACK ON DEMAND REGISTRATIONS. Neither
the Company nor any of its respective security holders may include securities of
the Company in any Demand Registration without the prior written consent of the
Demanding Holder (as hereinafter defined) or, if more than one Demanding Holder,
the Majority Demanding Holder (as hereinafter defined), and the Company shall
not enter into any agreement providing any such right to any of its security
holders.
(e) PRIORITY ON DEMAND REGISTRATIONS. In the event the
offering of Shares pursuant to a Demand Registration shall be in the form of an
underwritten offering pursuant to subsection (f) below, if the managing
Underwriter or Underwriters of such offering advise the Company and the Selling
Demand Holders in writing that, in their good faith judgment, the number of
Shares and any other securities requested to be included in such offering is
sufficiently large to materially and adversely affect the success of such
offering (a "Material Adverse Effect"), the Company shall include in such
registration (i) first, the number of Shares requested to be included in such
registration by the Selling Demand Holders and (ii) second, the aggregate number
of securities which in the good faith judgment of such managing Underwriter or
Underwriters can be sold without any such Material Adverse Effect which have
been requested to be included by the Company and, subject to subsection (d)
above, all other holders of securities of the Company permitted to include their
securities in such Demand Registration (allocated among such persons as they may
so determine).
(f) MANNER OF OFFERING; SELECTION OF UNDERWRITERS. If the
Holder(s) requesting a Demand Registration ("Demanding Holder(s)") so requests
(or if more than one Demanding Holder, if the Demanding Holders owning a
majority of the Shares requested to be included in the Demand Regulation by the
Demanding Holders (the "Majority Demanding Holders") so request), the offering
of Shares pursuant to a Demand Registration shall be in the form of an
underwritten offering, and all Holders electing to participate in such Demand
Registration shall be bound by such determination. If a Demand Registration is
in the form of an underwritten offering, the Majority Demanding Holders shall
select the managing Underwriter or Underwriters to be used in connection with
the offering; provided, however, that such Underwriter or Underwriters must be
reasonably satisfactory to the Company.
7.2 SHELF REGISTRATION.
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(a) SHELF REGISTRATION. Within ten (10) business days after
the date hereof, the Company will file a "shelf" registration of the Shares
pursuant to Rule 415 (or any successor thereto) under the Act ("Shelf
Registration"). The Company will cause such Shelf Registration to become
effective under the Act within forty-five (45) days after filing and thereafter
shall keep it effective under the Act for a period of five (5) years or such
shorter period that will terminate when all Shares covered by such Registration
Statement have been sold pursuant to such Registration Statement. The Company's
obligation to keep the Shelf Registration effective is subject to the receipt by
the Company from the Investors of information relating to the Shares necessary
to update the Shelf Registration upon written request of the Company. The Shelf
Registration shall be on such appropriate registration form of the Commission as
the Company shall determine. The Company will pay all Registration Expenses in
connection with the Shelf Registration.
(b) LIMITATION ON SHELF REGISTRATION. Subject to the
provisions of paragraph 7.5, the Company shall not be obligated to effect more
than one Shelf Registration under this paragraph 7.2.
7.3 PIGGYBACK RIGHTS. If at any time after the date hereof, and prior
to October 31, 2007, the Company proposes to register under the Act any of its
equity securities or debt with equity features, it will give written notice to
the Investors of its intention to do so no less than thirty (30) days prior to
filing such registration statement. On the written request of Investors given
within fifteen (15) days after receipt of any such notice, the Company will
cause the Shares for which the registration thereof has been requested to be
included in such registration statement proposed to be filed by the Company (a
"Piggy-back Registration").
7.4 EXPENSES. With respect to any Shares in a registration statement
pursuant to this paragraph 7, the Company shall bear the following fees, costs,
and expenses: all registration, filing and NASD fees, fees required by NASDAQ or
any exchange on which the Common Stock is then traded, printing expenses, fees
and disbursements of counsel and accountants for the Company, fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if the offering is underwritten), all internal expenses, the premiums and other
costs of policies of insurance against liability arising out of the public
offering and legal fees and disbursements and other expenses of complying with
state securities laws of any jurisdictions in which the securities to be offered
are to be registered or qualified (collectively "Registration Expenses"). Fees
and disbursements of special counsel and accountants for the Investors,
underwriting discounts and commissions, transfer taxes for Investors, and any
other expenses relating to the sale of securities by the Investors not expressly
included above shall be borne by the Investors.
7.5 CONCURRENT REGISTRATIONS. In the event that a Demand Registration
is requested pursuant to paragraph 7.1 at a time when there is an effective
Shelf Registration with respect to Shares requested to be included in such
Demand Registration, the Company shall have the right, immediately prior to the
filing of such Demand Registration, to deregister from the Shelf
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Registration the Shares remaining unsold under the Shelf Registration which are
requested to be included in such Demand Registration (and if all of the Shares
remaining unsold under the Shelf Registration are requested to be included in
such Demand Registration, to terminate the effectiveness of the Shelf
Registration); provided however, that upon completion of the offering of the
Shares pursuant to such Demand Registration the Company shall, upon the request
of Investors holding a majority of the Shares that (i) are then subject to the
provisions of this Section 7, (ii) were formerly a part of the Shelf
Registration, and (iii) were not sold pursuant to the Demand Registration,
reregister in a Shelf Registration any unsold Shares which were previously
covered by the Shelf Registration.
7.6 SHARES NO LONGER SUBJECT TO AGREEMENT. Notwithstanding any other
provision of this Agreement, Shares sold by an Investor under an effective
registration statement or pursuant to Rule 144 shall no longer be considered
"Shares" for purposes of this paragraph 7 and the holders of such Shares shall
not be considered "Holders" for purposes of this paragraph 7.
8. ADDITIONAL COVENANTS.
8.1 FORM S-3/FORM S-2 AVAILABILITY. The Company covenants and agrees
that it will timely file all reports required to be filed by it under the Act
and the Exchange Act, and it will take such other action as may be necessary and
within its control, to cause the Company to remain eligible to register the
Common Stock on Form S-3 or Form S-2 (or any successor form that may be adopted
by the Commission).
8.2 ABILITY TO EFFECT REGISTRATION. The Company covenants that it will
not take any action or engage in any transaction that reasonably could be
expected to adversely affect the ability of the Company to perform its
obligations under this Agreement, including without limitation the ability of
the Company to comply with the provisions of Articles 3 and 11 of Regulation S-X
that may be required to be complied with in connection with preparing and having
declared effective by the Commission any registration statement pursuant to a
Demand Registration, a Shelf Registration or a Piggy-back Registration.
8.3 RULE 144. The Company covenants and agrees that: (i) at all times
while it is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act it will use its best efforts to comply with the current public
information requirements of Rule 144(c)(1) under the Act; and (ii) it will
furnish Investors upon request with all information about the Company required
for the preparation and filing of Form 144.
9. MISCELLANEOUS.
9.1 AGREEMENT IS ENTIRE CONTRACT. Except as specifically referenced
herein, this Agreement constitutes the entire contract between the parties
hereto concerning the subject matter hereof and no party shall be liable or
bound to the other in any manner by any warranties, representations or covenants
except as specifically set forth herein. Any previous agreement among the
parties related to the transactions described herein is superseded hereby. The
terms
9
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and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties hereto. Nothing in
this Agreement, express or implied, is intended to confer upon any party, other
than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided herein.
9.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the state of North Carolina.
9.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.4 TITLE AND SUBTITLES. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience and are not to be considered in construing
this Agreement.
9.5 NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail,
addressed to a party at its address hereinafter shown below its signature or at
such other address as such party may designate by ten (10) days advance written
notice to the other party.
9.6 FINDER'S FEE. Each party hereto represents that it is not, and will
not be, obligated for any finder's fee or commission payable in cash in
connection with this transaction. Each Investor hereby agrees to indemnify and
to hold harmless the Company from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which such Investor
or any of its employees or representatives is responsible.
The Company agrees to indemnify and hold harmless each Investor from
any liability for any commission and compensation in the nature of a finder's
fee (and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
9.7 LEGAL FEES AND EXPENSES. The Company shall pay its own legal fees
and expenses. Fees and expenses in the amount of $9,500.00 shall be paid
directly to Winstead Sechrest & Minick P.C. by Jonathan G. Ornstein by wire
transfer at closing, and such amount shall be credited to the Purchase Price for
Shares being acquired by Mr. Ornstein.
9.8 SURVIVAL OF WARRANTIES. The warranties and representations of the
Company contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing hereunder.
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9.9 AMENDMENT OF AGREEMENT. Except as expressly provided herein, any
provision of this Agreement may be amended or waived by each Investor by a
written instrument signed by the Company and by each Investor.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first written above.
CCAIR, INC.
BY: /s/
----------------------------------------
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INVESTOR:
/s/
------------------------------------
ROBERT PRIDDY
12
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INVESTOR:
BONDERMAN FAMILY LIMITED
PARTNERSHIP
BY: /s/
-----------------------------------------
David Bonderman, General Partner
13
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INVESTOR:
HAKATAK ENTERPRISES, INC.,
NOMINEE
BY: /s/
-----------------------------------------
Tamir Hacker
14
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INVESTOR:
PAR INVESTMENT PARTNERS, L.P.
BY: PAR GROUP, L.P.
GENERAL PARTNER
BY: PAR CAPITAL MANAGEMENT, INC.
GENERAL PARTNER
BY: /s/
----------------------------------------
PAUL A. REEDER, III, PRESIDENT
15
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INVESTOR:
/s/
-----------------------------------
JONATHAN G. ORNSTEIN
16
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EXHIBIT 1
Name and Address of Investor Number of Shares
Robert Priddy 100,000
3435 Kingsboro Rd. #1601
Atlanta, GA 30326
Bonderman Family Limited Partnership 200,000
Texas Pacific Group
Suite 2420
201 Main Street
Fort Worth, Texas 76102
Attn: David Bonderman
Hakatak Enterprises, Inc., Nominee 100,000
P. O. Box 1623
Pacific Palisades, CA 90272
Par Investment Partners, L.P. 100,000
One Financial Center
Boston, Massachusetts 02111-2621
Jonathan G. Ornstein 45,000
Virgin Express -------
Building 116
Melsbroek Airport
1820 Melsbroek
Belgium
Total 545,000
=======
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EXHIBIT 2
2.3 SUBSIDIARIES. The Company owns two subsidiaries - Piedmont
Commuter, Inc. and Piedmont Charter, Inc. Each subsidiary is a Delaware
corporation that has no operations.
2.9 ABSENCE OF CERTAIN CHANGES. The Company has negotiated a proposed
return agreement with Short Brothers (USA), Inc. for the return of its Shorts
360 aircraft. The Company is currently engaged in the negotiation for the
acquisition of certain Jetstream aircraft with British Aerospace and its
affiliates, in addition to and replacement of certain Jetstream 31 aircraft now
under lease by the Company.
18
EXHIBIT 5.1
February 13, 1998
CCAIR, Inc.
4700 Yorkmont Road
Second Floor
Charlotte, North Carolina 28208
Re: CCAIR, Inc. Common Stock, par value $0.01 per share
Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 (the "Registration Statement"), which CCAIR, Inc. (the "Company") intends to
file with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of 545,000 shares of
Common Stock par value $0.01 per share (the "Shares"). The Registration
Statement relates to the registration of the Shares, which may be sold from time
to time by certain selling shareholders as identified in the Registration
Statement. All shares to be sold by the selling stockholders are issued and
outstanding. We are familiar with the proceedings taken and to be taken in
connection with the authorization, issuance and sale of the Shares.
Additionally, we have examined such questions of law and fact as we have
considered necessary or appropriate for purposes of this opinion.
Based upon the foregoing and the proceedings to be taken by the Company
as referred to above, we are of the opinion that the Shares have been duly
authorized, and are validly issued, fully paid and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters" of the prospectus included therein.
Very truly yours,
Rayburn, Moon & Smith, P.A.
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EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated September 19, 1997, on the Company's 1997
financial statements and schedules included in the Company's Annual Report on
Form 10-K for the year ended June 30, 1997, into this Registration Statement on
Form S-3.
Arthur Andersen LLP
Charlotte, North Carolina
December 22, 1997
