Exhibit 10.1
______________________________________________________________________________
AMERICA WEST HOLDINGS CORPORATION
7.5% Convertible Senior Notes Due 2009
SUPPLEMENTAL INDENTURE NO. 1
Dated as of September 27, 2005
______________________________________________________________________________
WILMINGTON TRUST COMPANY
TRUSTEE
______________________________________________________________________________
America West Holdings Corporation
7.5% Convertible Senior Notes Due 2009
SUPPLEMENTAL INDENTURE NO. 1
SUPPLEMENTAL INDENTURE No. 1 (this "Supplemental Indenture No. 1")
dated as of September 27, 2005, among America West Holdings Corporation, a
Delaware corporation (the "Company"), US Airways Group, Inc., a Delaware
corporation ("US Airways Group") and Wilmington Trust Company, a Delaware
banking corporation, as trustee (the "Trustee").
WHEREAS the Company and the Trustee have executed and delivered an
Indenture dated as of January 18, 2002 (the "Original Indenture" and as
supplemented by this Supplemental Indenture No. 1, the "Indenture"), providing
for the issuance and sale by the Company of its 7.5% Convertible Senior Notes
Due 2009 (the "Securities");
WHEREAS pursuant to an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of May 19, 2005, among the Company, US Airways Group and
Barbell Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of US Airways Group ("Merger Sub"), Merger Sub will merge with and into the
Company and the Company will become a wholly owned subsidiary of US Airways
Group (the "Merger");
WHEREAS, the Merger complies with the provisions of Section 6.1 of the
Indenture;
WHEREAS, Sections 7.1 (c) and (d) of the Original Indenture permit the
Company and the Trustee to amend the Indenture without prior notice to or
consent of any Holder of Securities for the purposes providing for conversion
rights of Holders of securities if any reclassification or change of the
Company's Common Stock or any consolidation, merger or sale of all or
substantially all of the Company's assets occurs or provide for the assumption
of the Company's obligations to the Holders of Securities in the case of a
merger, consolidation, conveyance, transfer or lease pursuant to Section 6;
WHEREAS, the parties to this Supplemental Indenture No. 1 desire to
supplement and amend the Original Indenture in certain respects as it applies to
the Securities issued thereunder;
WHEREAS, US Airways Group desires to execute and deliver this
Supplemental Indenture No. 1 in accordance with Article 7 the Original
Indenture, to provide, among other things, that common stock of US Airways Group
shall be deliverable upon conversion of the Securities;
WHEREAS, in accordance with Section 11.11 of the Original Indenture,
immediately following the effectiveness of the Merger, each Security shall be
convertible into 34.375 shares of common stock, par value $0.01 per share, of US
Airways Group for each integral multiple of $1,000 of Principal of such Security
which constitutes the kind and amount of shares of capital stock and other
securities or property or assets (including cash) which such Holder would have
been entitled to receive upon the Merger had such Securities been converted into
Common Stock immediately prior to such Merger;
WHEREAS, US Airways Group desires to unconditionally and irrevocably
guarantee the full and punctual payment of principal of and interest on the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under the Indenture
(including obligations to the Trustee) and the Securities, and the full and
punctual performance within applicable grace periods of all other obligations of
the Company under the Indenture and the Securities (the "US Airways Group
Guarantee");
WHEREAS US Airways Group further desires to unconditionally and
irrevocably guarantee all monetary obligations of America West Airlines, Inc.
under the Guaranty, dated as of January 18, 2002 (the "AWA Guarantee"), of
America West Airlines, Inc., a Delaware corporation ("America West Airlines"),
in favor of the holders of Securities and the Trustee and the full and punctual
performance within applicable grace periods of all other obligations of America
West Airlines under the AWA Guarantee and the Securities (the "Additional US
Airways Group Guarantee", and together with the US Airways Group Guarantee, the
"US Airways Group Guarantees") and to extend to the holders of Securities
certain rights and privileges in connection with the US Airways Group
Guarantees;
WHEREAS the Company, US Airways Group and America West Airlines have
requested that the Trustee execute and deliver this Supplemental Indenture No.
1, and the execution and delivery of this Supplemental Indenture No. 1 have been
duly authorized in all respects; and
NOW THEREFORE, the Company and US Airways Group and the Trustee hereby
agree that the following Sections of this Supplemental Indenture No. 1
supplement the Original Indenture:
SECTION 1. Definitions.
(a) Capitalized terms used herein and not defined herein have
the meanings ascribed to such terms in the Original Indenture.
(b) Article 1, Section 1.1, of the Indenture is hereby
supplemented to amend the following definitions to read in their entirety as
follows:
"Board of Directors" means either the Board of Directors of the Company or
of US Airways Group, as applicable, or any committee thereof empowered to
act for it with respect to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant
Secretary of the Company or US Airways Group, as applicable, to be in full
force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Common Stock" means the common stock, par value $0.01 per share, of US
Airways Group or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary
or involuntary liquidation, dissolution or winding up of US Airways Group
and which are not subject to redemption by US Airways Group; provided that
if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications; further provided that
all references to "Common Stock" in connection with adjustments to
Conversion Price in Section 11.4 shall be deemed to include any class of
common stock of the US Airways Group.
(c) Article 1, Section 1.1, of the Indenture is hereby
supplemented to add the following definition to read in its entirety as follows:
"US Airways Group" means US Airways Group, Inc., a Delaware corporation."
SECTION 2. Amendments to Original Indenture.
(a) Amendments to the Events of Default and Remedies. (A)
Clause (c) of Section 4.1 of Article 4 of the Original Indenture is hereby
amended by redesignating clause (c) as clause (c)(x) and by adding thereto at
the end thereof the following:
"; or (y) US Airways Group fails to perform or observe any other term,
covenant or agreement contained in the Securities or this Indenture and the
default continues for a period of 60 days after written notice of such
failure, requiring the Company to remedy the same, shall have been given to
the Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in aggregate of the Principal amount of the Outstanding
Securities;".
(B) Clause (d) of Section 4.1 of Article 4 of the
Original Indenture is hereby amended by redesigning clause (d) as clause (d)(x)
and by adding thereto at the end thereof the following:
"; or (y) any indebtedness under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the US Airways Group or
under any mortgage, indenture or instrument under which there may be issued
by which they may be secured or evidenced any indebtedness for money
borrowed by the US Airways Group with a principal amount then outstanding
in excess of U.S. $75,000,000, whether such indebtedness now exists or
shall hereafter be created, is not paid at final maturity thereof (either
at its stated maturity or upon acceleration thereof), and such indebtedness
is not discharged, or such acceleration is not rescinded or annulled,
within a period of 60 days after there shall have been given, by registered
or certified mail, to the US Airways Group by the Trustee or the US Airways
Group and the Trustee by the Holders of at least 25% in aggregate Principal
amount of the Outstanding Securities a written notice specifying such
default and requiring the US Airways Group to cause such indebtedness to be
discharged or cause such default to cured or waived or such acceleration to
be rescinded or annulled and stating such notice is a "Notice of Default"
hereunder;"
(C) Clause (e) of Section 4.1 of Article 4 of the
Original Indenture is hereby amended by redesignating clause (e) as clause
(e)(x) and by adding thereto at the end thereof the following:
"; or (y) the US Airways Group Guarantee cease to be in full force and
effect (other than in accordance with its terms) or US Airways Group denies
or disaffirms its obligations thereunder;"
(D) Clause (f) of Section 4.1 of Article 4 of the
Original Indenture is hereby amended by redesignating clause (f) as clause
(f)(x) and by adding thereto at the end thereof the following:
"(y) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of US Airways Group in an involuntary
case or proceeding under any applicable U.S. federal or state bankruptcy,
insolvency, reorganization or other similar law or (ii) a decree or order
adjudging US Airways Group bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of US Airways Group under any applicable U.S.
federal or state law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of US Airways
Group or of any substantial part of its property, or ordering the winding
up or liquidation of their respective affairs, and the continuance of any
such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or"
(E) Clause (g) of Section 4.1 of Article 4 of the
Original Indenture is hereby amended by redesignating clause (g) as clause
(g)(x) and by adding thereto at the end thereof the following:
"; or (y) the commencement by US Airways Group of a voluntary case or
proceeding under any applicable U.S. federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by US
Airways Group to the entry of a decree or order for relief in respect of US
Airways Group in an involuntary case or proceeding under any applicable
U.S. federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against US Airways Group, or the filing by US Airways Group of a
petition or answer or consent seeking reorganization or relief under any
applicable U.S. federal or state law, or the consent by US Airways Group to
the filing of such petition or to the appointment of or the taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of US Airways Group or of any
substantial part of its property, or the making by US Airways Group of an
assignment for the benefit of creditors, or the admission by US Airways
Group in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by US Airways Group expressly in
furtherance of any such action".
(b) Amendments to Article 6. Article 6 of the Indenture is
hereby supplemented and amended to read in its entirely as follows:
"Section 6.1. Company And America West May Consolidate, Etc., Only On
Certain Terms.
None of US Airways Group, the Company nor America West shall
consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person,
and none of US Airways Group, the Company nor America West shall permit any
Person to consolidate with or merge into US Airways Group, the Company or
America West or convey, transfer or lease its properties and assets
substantially as an entirety to US Airways Group, the Company or America
West, unless:
(1) in the event that US Airways Group, the Company
or America West shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any Person, the Person formed by such
consolidation or into which US Airways Group, the Company or America
West is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of US Airways Group, the
Company or America West substantially as an entirety shall be a
corporation, limited liability company, partnership or trust organized
and validly existing under the laws of the United States of America,
any State thereof or the District of Columbia;
(2) in the event that US Airways Group, the Company
or America West shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any Person, and the entity surviving
such transaction or transferee entity is not US Airways Group, the
Company or America West, then such surviving or transferee entity shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of all and any amounts when due
on all the Securities and the performance of every covenant and
obligation of this Indenture and the Securities on the part of the
Company to be performed or observed and shall have provided for
conversion rights provided in Article 11;
(3) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation
of US Airways Group, the Company or America West as a result of such
transaction as having been incurred at the time of such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be
continuing; and
(4) the Company shall have delivered to the Trustee
an Officers' Certificate stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Section 6.2. Successor Person Substituted.
Upon any consolidation or merger by US Airways Group, the Company or
America West with or into any other Person or any conveyance, transfer or
lease of the properties and assets of US Airways Group, the Company or
America West substantially as an entirety to any Person, in accordance with
Section 6.1 hereof, the successor Person formed by such consolidation or
into which US Airways Group, the Company or America West is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, US Airways
Group, the Company or America West under this Indenture with the same
effect as if such successor Person had been named as US Airways Group, the
Company or America West herein. In the event of any such conveyance or
transfer, US Airways Group, the Company or America West (which term shall
for this purpose mean the Person named as US Airways Group in Section 1.1
of this Indenture, the "Company" in the first paragraph of this Indenture
or "America West" in Section 1.1 of this Indenture or any successor Person
which shall theretofore become such in the manner described in Section 6.1
hereof), except in the case of a lease to another Person, the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities and may be dissolved and liquidated."
(c) Amendments, Supplements and Waivers. Clauses (a), (c) and
(d) of Section 7.1 of Article 7 of the Original Indenture are supplemented and
amended to read in their entirety as follows:
"(a) add to the covenants of US Airways Group and the
Company for the benefit of the Holders of Securities;"
"(c) provide for the conversion rights of Holders of
Securities if any reclassification or change of US Airways Group's Common
Stock or any consolidation, merger or sale of all or substantially all of
the Company's or the US Airways Group's assets occurs;"
"(d) provide for the assumption of US Airways Group's
or the Company's obligations to the Holders of Securities in the case of a
merger, consolidation, conveyance, transfer or lease pursuant to Article 6
hereof;"
(d) Conversion of Securities. Article 11 of the Indenture is
amended and restated in its entirety to read as set forth in Annex A hereto.
(e) Amendment of Form of Security. Paragraph 6 of Exhibit A to
the Indenture is hereby amended to the form attached hereto as Annex B.
SECTION 3. Reorganization of the Company. In accordance with Section
11.11 of the Original Indenture, each of the Company and US Airways Group hereby
agrees and acknowledgs that immediately following the effectiveness of the
Merger, each Security shall be convertible into 34.375 shares of common stock,
par value $0.01 per share, of US Airways Group for each integral multiple of
$1,000 of Principal of such Security which constitutes the kind and amount of
shares of capital stock and other securities or property or assets (including
cash) which such Holder would have been entitled to receive upon Merger had such
Securities been converted into Common Stock immediately prior to such Merger;
SECTION 4. Covenant of US Airways Group. US Airways Group hereby
covenants and agrees to undertake and perform such duties as are specifically
set forth in the Indenture to be undertaken by US Airways Group and otherwise
agrees to comply with all covenants applicable to it under the Indenture.
SECTION 5. The US Airways Group Guarantee. (a) US Airways Group
irrevocably and unconditionally guarantees, to each Holder of Securities and to
the Trustee and its successors and assigns, (i) the full and punctual payment of
principal and interest on the Securities when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Original Indenture (including obligations to the Trustee)
and the Securities and (ii) the full and punctual performance within applicable
grace periods of all other obligations of the Company under the Original
Indenture and the Securities. US Airways Group further agrees that its
obligations hereunder shall be unconditional irrespective of the absence or
existence of any action to enforce the same, the recovery of any judgment
against the Company, US Airways Group or America West Airlines (except to the
extent such judgment is paid) or any waiver or amendment of the provisions of
the Indenture or the Securities to the extent that any such action or any
similar action would otherwise constitute a legal or equitable discharge or
defense of a guarantor (except that such waiver or amendment shall be effective
in accordance with its terms.)
(b) US Airways Group further agrees that the US Airways Group
Guarantee constitutes a guarantee of payment, performance and compliance and not
merely of collection.
(c) US Airways Group further agrees to waive presentment to,
demand of payment from and protest to the Company of any of the US Airways Group
Guarantee, the Additional US Airways Group Guarantee and the AWA Guarantee and
also waives diligence, notice of acceptance of the US Airways Group Guarantee,
presentment, demand for payment, notice of protest for nonpayment, the filing of
claims with a court in the event of merger or bankruptcy of the Company or any
successor thereto and any right to require a proceeding first against the
Company, any successor thereto or any other Person. The obligations of US
Airways Group shall not be affected by any failure or policy on the part of the
Trustee to exercise any right or remedy under the Indenture or the Securities of
any series.
(d) The obligation of US Airways Group to make any payment
hereunder may be satisfied by causing the Company to make such payment. If any
Holder of any Security or the Trustee is required by any court or otherwise to
return to the Company, US Airways Group or America West Airlines any amount paid
by any of them to the Trustee or such Holder, the US Airways Group Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
(e) US Airways Group also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder of Securities in enforcing any of their respective rights under the US
Airways Group Guarantee.
(f) Any term or provision of this Supplemental Indenture No. 1
to the contrary notwithstanding, the maximum aggregate amount of the US Airways
Group Guarantee shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Supplemental Indenture No. 1, as it relates to
US Airways Group, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
SECTION 5. Additional US Airways Group Guarantee. (a) US Airways Group
irrevocably and unconditionally guarantees, to each Holder of Securities and to
the Trustee and its successors and assigns the full and punctual payment of all
monetary obligations of America West Airlines under the AWA Guarantee (including
obligations to the Trustee) and (ii) the full and punctual performance within
applicable grace periods of all other obligations of America West Airlines under
the AWA Guarantee. US Airways Group further agrees that its obligations
hereunder shall be unconditional irrespective of the absence or existence of any
action to enforce the same, the recovery of any judgment against the Company, US
Airways Group or America West Airlines (except to the extent such judgment is
paid) or any waiver or amendment of the provisions of the Indenture or the
Securities to the extent that any such action or any similar action would
otherwise constitute a legal or equitable discharge or defense of a guarantor
(except that such waiver or amendment shall be effective in accordance with its
terms.)
(b) US Airways Group further agrees that the Additional US
Airways Group Guarantee constitutes a guarantee of payment, performance and
compliance and not merely of collection.
(c) US Airways Group further agrees to waive presentment to,
demand of payment from and protest to the Company of any of the US Airways Group
Guarantee, the Additional US Airways Group Guarantee and the AWA Guarantee and
also waives diligence, notice of acceptance of the Additional US Airways Group
Guarantee, presentment, demand for payment, notice of protest for nonpayment,
the filing of claims with a court in the event of merger or bankruptcy of the
Company or any successor thereto and any right to require a proceeding first
against the Company, any successor thereto or any other Person. The obligations
of US Airways Group shall not be affected by any failure or policy on the part
of the Trustee to exercise any right or remedy under the Indenture or the
Securities of any series.
(d) The obligation of US Airways Group to make any payment
hereunder may be satisfied by causing the Company or America West Airlines to
make such payment. If any Holder of any Security or the Trustee is required by
any court or otherwise to return to the Company, US Airways Group or America
West Airlines any amount paid by any of them to the Trustee or such Holder, the
Additional US Airways Group Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(e) US Airways Group also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder of Securities in enforcing any of their respective rights under the
Additional US Airways Group Guarantee.
(f) Any term or provision of this Supplemental Indenture No. 1
to the contrary notwithstanding, the maximum aggregate amount of the Additional
US Airways Group Guarantee shall not exceed the maximum amount that can be
hereby guaranteed without rendering this Supplemental Indenture No. 1, as it
relates to US Airways Group, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
SECTION 6. Incorporation of Supplemental Indenture No. 1. This
Supplemental Indenture No. 1 shall be construed as supplemental to the Original
Indenture and shall form a part of it, and the Original Indenture is hereby
incorporated by reference herein and each is hereby ratified, approved and
confirmed.
SECTION 7. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE NO. 1 SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 8. Counterparts. This Supplemental Indenture No. 1 may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but one
instrument.
SECTION 9. Headings. The headings of this Supplemental Indenture No. 1
are for reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 10. Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and US Airways Group, and not by the Trustee,
and the Trustee assumes no responsibility for the correctness thereof. The
Trustee shall have no responsibility whatsoever for or in respect of the
validity or sufficiency of this Supplemental Indenture No. 1.
SECTION 11. Seperability. In case any one or more or the provisions
contained in this Supplemental Indenture No. 1 or in the Securities shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Supplemental Indenture No. 1 or of the Securities, but this Supplemental
Indenture No. 1 and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 1 to be duly executed by their respective authorized officers as
of the date first written above.
AMERICA WEST HOLDINGS CORPORATION
By: /s/ Xxxxx X. Xxxxx XXX
--------------------------------
Name: Xxxxx X. Xxxxx XXX
Title: Senior Vice President
and General Counsel
US AIRWAYS GROUP, INC.
By: /s/ Xxxxx X. Xxxxx XXX
--------------------------------
Name: Xxxxx X. Xxxxx XXX
Title: Senior Vice President
and General Counsel
WILMINGTON TRUST COMPANY, as
Trustee
By: /s/ Xxxxx X. XxXxxx
--------------------------------
Name: Xxxxx X. XxXxxx
Title: Senior Financial Services Officer
Annex A
"Section 11.1. Conversion Right; Expiration Of Conversion Right;
Conversion Price.
(a) Subject to and upon compliance with the provisions of this
Article, at the option of the Holder at any time after January 18, 2005 or
in connection with a redemption pursuant to Sections 10.1(a) or (b) or such
earlier date as the Company shall have provided notice to the Holders by
mail, any Security or any portion of the Principal amount thereof which is
an integral multiple of $1,000 may be converted at the Principal amount
thereof, or of such portion thereof, into duly authorized, fully paid and
nonassessable shares of Common Stock, at the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion.
(b) The conversion right set forth in clause (a) above shall
expire at the close of business on the Stated Maturity. In case a Security
or portion thereof is called for redemption pursuant to Article 10, such
conversion right in respect of such Security or the portion so called,
shall expire at the close of business on the second Business Day preceding
the Redemption Date, unless the Company defaults in making the payment due
upon redemption.
(c) The price at which shares of Common Stock shall be
delivered upon conversion (the "CONVERSION PRICE") shall be initially equal
to $29.09 per share of Common Stock, subject to adjustment, in certain
instances, as provided in Section 11.4.
(d) No payment or adjustment will be made for dividends on, or
other distributions with respect to, any Common Stock except as provided in
this Article 11.
Section 11.2. Exercise of Conversion Right.
(a) To exercise the conversion right with respect to a
Security, a Holder must (1) (i) as to a Global Security, deliver a
completed conversion notice, the form of which is provided in Exhibit C, to
the Depositary stating that the Holder elects to convert such Global
Security or, if less than the entire Principal amount thereof is to be
converted, the portion thereof to be converted, and (ii) as to a Physical
Security, deliver a duly signed completed conversion notice and such
Physical Security duly endorsed or assigned to the Company or in blank, at
the office of any Conversion Agent, and (2) pay any transfer taxes or other
applicable taxes or duties, if required.
(b) To convert interests in a Global Security, a Holder must
deliver to DTC the appropriate instruction form for conversion pursuant to
DTC's conversion program or must deliver instructions in accordance with
Euroclear's or Clearstream's normal operating procedures after application
has been made to make the underlying Common Stock eligible for trading on
Euroclear or Clearstream, as applicable.
(c) To the extent provided in Section 2.1, the Holders of such
converted Securities shall be entitled to receive (and retain) any accrued
Interest on the Principal amount of such surrendered Securities, if any.
(d) Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions, and
at such time the rights of the Holders of such Securities as Holders shall
cease, and the Person or Persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock at such time.
(e) In the case of any Security which is converted in part
only, or a Holder converts less than the Principal amount it owns at such
time, upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Company, a new Security or Securities of authorized denominations in
Principal amount equal to the unconverted portion of the Principal amount
of such Securities.
(f) As promptly as practicable on or after the Conversion
Date, the Company shall cause to be issued and delivered to such Conversion
Agent a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion of such Securities, together with payment in
lieu of any fraction of a share as provided in Section 11.3 hereof. The
Company hereby initially appoints the Trustee as the Conversion Agent.
(g) Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions, and
at such time the rights of the Holders of such Securities as Holders shall
cease, and the Person or Persons entitled to receive the shares of Common
Stock issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock at such time.
Section 11.3. Fractions Of Shares.
No fractional shares of Common Stock shall be issued upon conversion
of any Security or Securities. If more than one Security shall be surrendered
for conversion at one time by the same Holder, the number of full shares of
Common Stock which shall be issued upon conversion thereof shall be computed
on the basis of the Principal amount of the Securities (or specified portions
thereof) so surrendered. Instead of any fractional shares of Common Stock
which would otherwise be issued upon conversion of any Security or Securities
(or specified portions thereof), the Company shall pay a cash adjustment in
respect of such fraction (calculated to the nearest one-100th of a share) in
an amount equal to the same fraction of the Trading Price of the shares of
Common Stock as of the Trading Day preceding the Conversion Date.
Section 11.4. Adjustment Of Conversion Price.
The Conversion Price shall be subject to adjustment, calculated in good
faith by the Company, from time to time as follows:
(a) In case US Airways Group shall hereafter pay a dividend or
make a distribution to all holders of the outstanding Common Stock in
shares of Common Stock, the Conversion Price in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall
be reduced by multiplying such Conversion Price by a fraction:
(1) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the
Conversion Record Date fixed for such determination; and
(2) the denominator of which shall be the sum of such
number of shares and the total number of shares constituting such
dividend or other distribution.
Such reduction shall become effective immediately after the opening of
business on the day following the Conversion Record Date. If any dividend
or distribution of the type described in this Section 11.4(a) is declared
but not so paid or made, the Conversion Price shall again be adjusted to
the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(b) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be proportionately
reduced, and conversely, in case outstanding shares of Common Stock shall
be combined into a smaller number of shares of Common Stock, the Conversion
Price in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as applicable, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(c) In case US Airways Group shall issue rights or warrants
(other than any rights or warrants issued pursuant to a rights plan
(commonly referred to as a "poison pill" plan) referred to in Section
11.4(d)) to all holders of its outstanding shares of Common Stock entitling
them to subscribe for or purchase shares of Common Stock (or securities
convertible into shares of Common Stock) at a price per share (or having a
conversion price per share) less than the Current Market Price on the
Conversion Record Date fixed for the determination of stockholders entitled
to receive such rights or warrants, the Conversion Price shall be adjusted
so that the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date after
such Conversion Record Date by a fraction:
(1) the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the
Conversion Record Date, plus the number of shares which the aggregate
offering price of the total number of shares so offered for
subscription or purchase (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Current
Market Price; and
(2) the denominator of which shall be the number of
shares of Common Stock outstanding on the close of business on the
Conversion Record Date, plus the total number of additional shares of
Common Stock so offered for subscription or purchase (or into which the
convertible securities so offered are convertible).
Such adjustment shall become effective immediately after the opening of
business on the day following the Conversion Record Date fixed for
determination of stockholders entitled to receive such rights or warrants.
To the extent that shares of Common Stock (or securities convertible into
Common Stock) are not delivered pursuant to such rights or warrants, upon
the expiration or termination of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in
effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of the delivery of only the number of
shares of Common Stock (or securities convertible into Common Stock)
actually delivered. In the event that such rights or warrants are not so
issued, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants
had not been fixed. In determining whether any rights or warrants entitle
the holders to subscribe for or purchase Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of such
consideration if other than cash, to be determined by the Board of
Directors.
(d) (i) In case US Airways Group shall, by dividend or
otherwise, declare a distribution to all holders of its Common Stock of
shares of any class of Capital Stock of US Airways Group (other than any
dividends or distributions to which Section 11.4(a) applies) or evidences
of its indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 11.4(c), (2)
dividends or distributions of stock, securities or other property or assets
(including cash) in connection with a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance to
which Section 11.11 applies and (3) dividends and distributions paid
exclusively in cash (such Capital Stock, evidence of its indebtedness,
cash, other assets or securities being distributed hereinafter in this
Section 11.4(d) called the "DISTRIBUTED assets"), then, in each such case,
subject to clause (ii) of this Section 11.4(d), the Conversion Price shall
be reduced so that the same shall be equal to the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on the Conversion Record Date with respect to such distribution
by a fraction:
(1) the numerator of which shall be the Current
Market Price on such date, less the Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive and set
forth in a Board Resolution) on such date of the portion of the
distributed assets so distributed applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the Conversion Record Date); and
(2) the denominator of which shall be such Current
Market Price.
Such reduction shall become effective immediately prior to the opening
of business on the day following the Conversion Record Date. However, in
the event that the then Fair Market Value (as so determined) of the portion
of the distributed assets so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price on the
Conversion Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive
upon conversion of a Security (or any portion thereof) the amount of
distributed assets such Holder would have received had such Holder
converted such Security (or portion thereof) immediately prior to such
Conversion Record Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(ii) If the Board of Directors determines the Fair Market
Value of any distribution for purposes of this Section 11.4(d) by reference
to the actual or when issued trading market for any distributed assets
comprising all or part of such distribution, it must in doing so consider
the prices in such market over the same period (the "REFERENCE PERIOD")
used in computing the Current Market Price to the extent possible, unless
the Board of Directors in a Board Resolution determines in good faith that
determining the Fair Market Value during the Reference Period would not be
in the best interest of the Holders.
(iii) Rights or warrants distributed by US Airways Group to
all holders of Common Stock entitling the holders thereof to subscribe for
or purchase shares of the US Airways Group's Capital Stock (either
initially or under certain circumstances), which rights or warrants, until
the occurrence of a specified event or events specified in such rights or
warrants or related instruments or agreements governing the same (a
"TRIGGER EVENT"):
(1) are deemed to be transferred with such shares of
Common Stock;
(2) are not exercisable; and
(3) are also issued in respect of future issuances of
Common Stock;
shall be deemed not to have been distributed for purposes of this Section
11.4(d) (and no adjustment to the Conversion Price under this Section
11.4(d) will be required) until the occurrence of the earliest Trigger
Event; provided that (1) if such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become
exercisable to purchase different distributed assets, evidences of
indebtedness or other assets or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and the Conversion Record Date with
respect to a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder thereof); and (2)
in the event of any distribution (or deemed distribution) of rights or
warrants, or any Trigger Event or other event (of the type described in the
preceding sentence) with respect thereto, that resulted in an adjustment to
the Conversion Price under this Section 11.4(d):
(1) in the case of any such rights or warrants which
shall all have been redeemed or purchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such
final redemption or purchase to give effect to such distribution or
Trigger Event, as applicable, as though it were a cash distribution,
equal to the per share redemption or purchase price received by a
holder of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or
purchase; and
(2) in the case of such rights or warrants which
shall have expired or been terminated without exercise, the Conversion
Price shall be readjusted as if such rights and warrants had never been
issued.
For purposes of this Section 11.4(d) and Sections 11.4(a), 11.4(b) and
11.4(c), any dividend or distribution to which this Section 11.4(d) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 11.4(b) applies, or rights or
warrants to subscribe for or purchase shares of Common Stock to which
Section 11.4(c) applies (or any combination thereof), shall be deemed
instead to be:
(B) a dividend or distribution of the
evidences of indebtedness, assets, shares of Capital Stock, rights or
warrants, other than such shares of Common Stock, such subdivision or
combination or such rights or warrants to which Sections 11.4(a),
11.4(b) and 11.4(c) apply, respectively (and any Conversion Price
reduction required by this Section 11.4(d) with respect to such
dividend or distribution shall then be made), immediately followed by
(C) a dividend or distribution of such
shares of Common Stock, such subdivision or combination or such rights
or warrants (and any further Conversion Price reduction required by
Sections 11.4(a), 11.4(b) and 11.4(c) with respect to such dividend or
distribution shall then be made), except:
(I) the Conversion Record Date of such
dividend or distribution shall be
substituted as (x) "the date fixed
for the determination of
stockholders entitled to receive
such dividend or other
distribution", "Conversion Record
Date fixed for such determinations"
and "Conversion Record Date" within
the meaning of Section 11.4(a), (y)
"the day upon which such
subdivision becomes effective" and
"the day upon which such
combination becomes effective"
within the meaning of Section
11.4(b), and (z) as "the date fixed
for the determination of
stockholders entitled to receive
such rights or warrants", "the
Conversion Record Date fixed for
the determination of the
stockholders entitled to receive
such rights or warrants" and such
"Conversion Record Date" within the
meaning of Section 11.4(c); and
(II) any shares of Common Stock included
in such dividend or distribution
shall not be deemed "outstanding at
the close of business on the date
fixed for such determination"
within the meaning of Section
11.4(a) and any reduction or
increase in the number of shares of
Common Stock resulting from such
subdivision or combination shall be
disregarded in connection with such
dividend or distribution.
(e) In case US Airways Group shall, by dividend or otherwise,
declare a distribution to all holders of its Common Stock of cash
(excluding any cash that is distributed upon a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance to which Section 11.11 applies or as part of a distribution
referred to in Section 11.4(d)), in an aggregate amount that, combined
together with:
(1) the aggregate amount of any other such
distributions to all holders of Common Stock made exclusively in cash
within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to this
Section 11.4(e) has been made; and
(2) the aggregate of any cash plus the Fair Market
Value (as determined by the Board of Directors, whose determination
shall be conclusive and set forth in a Board Resolution) of
consideration payable in respect of any tender offer by the Company or
any of its Subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of such distribution,
and in respect of which no adjustment pursuant to Section 11.4(f) has
been made;
exceeds 10% of the product of the Current Market Price on the Conversion
Record Date with respect to such distribution multiplied by the number of
shares of Common Stock outstanding on such date, then and in each such
case, immediately after the close of business on such date, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on such Conversion Record Date by a fraction:
(1) the numerator of which shall be equal to the
Current Market Price on the Conversion Record Date less an amount equal
to the quotient of (x) the excess of such combined amount over such 10%
and (y) the number of shares of Common Stock outstanding on the
Conversion Record Date, and
(2) the denominator of which shall be equal to the
Current Market Price on such date.
However, in the event that the then Fair Market Value (as so
determined) of the portion of the securities so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market
Price on the Conversion Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right
to receive upon conversion of a Security (or any portion thereof) the
amount of cash such Holder would have received had such Holder converted
such Security (or portion thereof) immediately prior to such Conversion
Record Date. In the event that such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution had
not been declared.
(f) In case a tender offer made by US Airways Group or any of
its Subsidiaries for all or any portion of the Common Stock shall expire
and such tender offer (as amended upon the expiration thereof) shall
require the payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender offer) of Purchased Shares) of
an aggregate consideration having a Fair Market Value (as determined by the
Board of Directors, whose determination shall be conclusive and set forth
in a Board Resolution) that combined together with:
(1) the aggregate of the cash plus the Fair Market
Value (as determined by the Board of Directors, whose determination
shall be conclusive and set forth in a Board Resolution), as of the
expiration of such tender offer, of consideration payable in respect of
any other tender offers, by the Company or any of its Subsidiaries for
all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to this Section 11.4(f) has been made; and
(2) the aggregate amount of any distributions to all
holders of the Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to Section 11.4(e) has been made,
exceeds 10% of the product of the Current Market Price as of the last time
(the "EXPIRATION TIME") tenders could have been made pursuant to such
tender offer (as it may be amended) multiplied by the number of shares of
Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, the Conversion
Price shall be adjusted so that the same shall equal the price determined
by multiplying the Conversion Price in effect immediately prior to close of
business on the date of the Expiration Time by a fraction:
(1) the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time multiplied by the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time;
and
(2) the denominator shall be the sum of (x) the Fair
Market Value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed
so accepted, up to any such maximum, being referred to as the
"PURCHASED SHARES") and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time.
Such reduction (if any) shall become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event
that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such tender offer had not been made.
(g) For purposes of this Section 11.4, the following terms
shall have the meanings indicated:
(1) "CURRENT MARKET PRICE" shall mean the average of
the daily Trading Prices per share of Common Stock (or such other
security as specified herein) for the ten consecutive Trading Days
immediately prior to the date in question;
provided, however, that if:
(i) the "ex" date (as hereinafter defined)
for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 11.4(a), (b), (c), (d),
(e) or (f) occurs during such ten consecutive Trading Days,
the Trading Price for each Trading Day prior to the "ex" date
for such other event shall be adjusted by multiplying such
Trading Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other
event;
(ii) the "ex" date for any event (other than
the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to
Section 11.4(a), (b), (c), (d), (e) or (f) occurs on or after
the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Trading
Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Trading
Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of
such other event; and
(iii) the "ex" date for the issuance or
distribution requiring such computation is prior to the day in
question, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Trading
Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the Fair
Market Value (as determined by the Board of Directors in a
manner consistent with any determination of such value for
purposes of Section 11.4(d) or (f), whose determination shall
be conclusive and set forth in a Board Resolution) of the
evidences of indebtedness, shares of Capital Stock or assets
being distributed applicable to one share of Common Stock as
of the close of business on the day before such "ex" date.
For purposes of any computation under Section
11.4(f), the Current Market Price of the Common Stock on any
date shall be deemed to be the average of the daily Trading
Prices per share of Common Stock for such day and the two
consecutive Trading Days immediately prior; provided, however,
that if the "ex" date for any event (other than the tender
offer requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 11.4(a), (b), (c),
(d), (e) or (f) occurs on or after the Expiration Time for the
tender or exchange offer requiring such computation and prior
to the day in question, the Trading Price for each Trading Day
on and after the "ex" date for such other event shall be
adjusted by multiplying such Trading Price by the reciprocal
of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event. For purposes
of this paragraph, the term "ex" date, when used:
(I) with respect to any issuance or
distribution, means the first date on which the
Common Stock trades regular way on the relevant
exchange or in the relevant market from which the
Trading Price was obtained without the right to
receive such issuance or distribution;
(II) with respect to any subdivision or
combination of shares of Common Stock, means the
first date on which the shares of Common Stock trade
regular way on such exchange or in such market after
the time at which such subdivision or combination
becomes effective; or
(III) with respect to any tender or exchange
offer, means the first date on which the Common Stock
trades regular way on such exchange or in such market
after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Price are called for pursuant to
this Section 11.4, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 11.4 and to avoid unjust
or inequitable results as determined in good faith by the
Board of Directors.
(2) "FAIR MARKET VALUE" shall mean, if there is a
current market for the asset, debt or transaction in question, the
amount that a willing buyer would pay a willing seller in an arm's
length transaction or, in the absence of a current market for such
asset, debt or transaction, the amount determined in good faith by the
Board of Directors that represents its determination of the fair market
value of the asset.
(3) "CONVERSION RECORD DATE" shall mean, with respect
to any dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination
of cash, securities or other property, the date fixed for determination
of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 11.4(a), (b), (c), (d), (e) or
(f) as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such
for income tax purposes or otherwise.
(h) No adjustment need be made for (i) a transaction referred
to in Sections 11.4 or 11.11 if Holders participate in the transaction
without conversion on a basis and with notice that the Board of Directors
determines in good faith as evidenced in a Board Resolution to be fair and
appropriate in light of the basis and notice on which holders of shares of
Common Stock participate in the transaction; (ii) the issuance and
distribution of rights to purchase shares of Common Stock pursuant to (A) a
US Airways Group plan for reinvestment of dividends or interest, (B) a
change in the par value or no par value of the shares of Common Stock or
(C) to the extent the Securities become convertible pursuant to this
Article 11 in whole or in part into cash, with respect to such cash after
such cash is distributed to the Holders in satisfaction of such conversion
right.
(i) To the extent permitted by applicable law, the Company
from time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least 20 days and the reduction is
irrevocable during the period and the Board of Directors determines in good
faith that such reduction would be in the best interests of the Holders,
which determination shall be conclusive and set forth in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to the Trustee and the
Conversion Agent and each Holder at the address of such Holder as it
appears in the Register a notice of the reduction at least 15 days prior to
the date the reduced Conversion Price takes effect, and such notice shall
state the reduced Conversion Price and the period during which it will be
in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in such price; provided, however, that any adjustments which by reason of
this Section 11.4(j) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
this Article 11 shall be made by the Company in good faith and shall be
made to the nearest cent or to the nearest one hundredth of a share, as
applicable. No adjustment need be made for a change in the par value or no
par value of the Common Stock.
(k) No adjustment in Conversion Price shall be required if the
Fair Market Value of any assets, debt securities or rights, warrants or
options to purchase the securities of the Company, including but not
limited to Common Stock, in each case applicable to each share of Common
Stock are distributed to the Company's stockholders and such Fair Market
Value either equals or exceeds the Current Market Price or such Current
Market Price exceeds such Fair Market Value by an amount not exceeding
$1.00; provided, however, that any adjustments which by reason of this
Section 11.4(k) are not required to be made shall be distributed upon
conversion of any Security in an amount of assets, securities or rights,
warrants or options comprising the distribution that a Holder would have
received if such Holder had converted such Security immediately prior to
the Conversion Record Date.
(l) In any case in which this Section 11.4 provides that an
adjustment shall become effective immediately after a Conversion Record
Date for an event, the Company may defer until the occurrence of such event
(i) issuing to the Holder of any security converted after such Conversion
Record Date and before the occurrence of such event the additional shares
of Common Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii) paying to such
Holder any amount in cash in lieu of any fraction pursuant to Section 11.3.
(m) For purposes of this Section 11.4, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of US Airways Group but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common
Stock. US Airways will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of US Airways Group.
(n) If the distribution date for the rights provided in US
Airways' rights agreement, if any, occurs prior to the date a Security is
converted, the Holder of such Security who converts such Security after the
distribution date is not entitled to receive the rights that would
otherwise be attached (but for the date of conversion) to the shares of
Common Stock received upon such conversion; provided, however, that an
adjustment shall be made to the Conversion Price pursuant to clause 11.4(b)
as if the rights were being distributed to the common stockholders of the
Company immediately prior to such conversion. If such an adjustment is made
and the rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment shall be made to the Conversion Price,
on an equitable basis, to take account of such event.
(o) In case US Airways Group shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
Capital Stock of a Subsidiary of the Company, then the Conversion Price
shall be reduced so that the same shall be equal to the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on the Conversion Record Date with respect to such distribution
by a fraction:
(1) the numerator of which shall be the Current
Market Price of the shares of Capital Stock of such Subsidiary (as
determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution), measured from the date
of such distribution; and
(2) the denominator of which shall be the Current
Market Price of the Company's Common Stock, measured from the date of
such distribution.
Section 11.5. Notice Of Adjustments Of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided (other
than in the case of an adjustment pursuant to the second paragraph of
Section 11.4(i) for which the notice required by such paragraph has been
provided), the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers' Certificate setting
forth the adjusted Conversion Price and showing in reasonable detail the
facts upon which such adjustment is based. Promptly after delivery of such
Officers' Certificate, the Company shall prepare a notice stating that the
Conversion Price has been adjusted and setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective,
and shall mail such notice to each Holder at the address of such Holder
pursuant to Section 12.2 within 20 days prior to the effective date of such
adjustment.
Section 11.6. Notice Prior To Certain Actions.
In case at any time after the date hereof:
(1) US Airways Group shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash
out of its capital surplus or its consolidated retained earnings;
(2) US Airways Group shall authorize the granting to
the holders of its Common Stock of rights or warrants to subscribe for
or purchase any shares of Capital Stock of any class (or of securities
convertible into shares of Capital Stock of any class) or of any other
rights;
(3) there shall occur any reclassification of the
Common Stock (other than a subdivision or combination of its
outstanding Common Stock, a change in par value, a change from par
value to no par value or a change from no par value to par value), or
any merger, consolidation, statutory share exchange or combination to
which the Company is a party and for which approval of any shareholders
of the Company is required, or the sale, transfer or conveyance of all
or substantially all of the assets of the Company; or
(4) there shall occur the voluntary or involuntary
dissolution, liquidation or winding up of the Company;
the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of securities pursuant to Section 9.2, and shall
cause to be provided to the Trustee and all Holders in accordance with
Section 12.2, at least 20 days (or 10 days in any case specified in clause
(1) or (2) above) prior to the applicable record or effective date
hereinafter specified, a notice stating:
(B) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record is
not to be taken, the date as of which the holders of shares of Common
Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined; or
(C) the date on which such reclassification, merger,
consolidation, statutory share exchange, combination, sale, transfer,
conveyance, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders
of shares of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, merger, consolidation,
statutory share exchange, sale, transfer, dissolution, liquidation or
winding up.
Neither the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings or actions described in clauses
(1) through (4) of this Section 11.6.
Section 11.7. US Airways Group To Reserve Common Stock.
US Airways Group shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock
including treasury shares, for the purpose of effecting the conversion of
the Securities (including PIK Loans), the full number of shares of fully
paid and nonassessable Common Stock then issuable upon the conversion of
all Outstanding Securities (including PIK Loans).
Section 11.8. Common Stock To Be Fully Paid And Nonassessable.
The Company covenants that all Common Stock which may be issued upon
conversion of Securities will upon issue be duly and validly issued, fully
paid and nonassessable, free from preemptive rights and free of any lien or
adverse claim and, except as provided in Section 11.9, the Company will pay
all taxes, liens and charges with respect to the issue thereof.
Section 11.9. Taxes On Conversions.
Except as provided in the next sentence, the Company will pay any and
all taxes (other than taxes on income) and duties that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant to Article 11. A Holder delivering a Security for
conversion shall be liable for and will be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder
of such Security or Securities to be converted, and no such issue or
delivery shall be made unless the Person requesting such issue has paid to
the Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.
Section 11.10. Cancellation Of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee.
Section 11.11. Effect Of Reclassification, Consolidation, Merger Or
Sale.
If any of following events occur:
(1) any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), as a result of which holders
of Common Stock shall be entitled to receive Capital Stock, securities
or other property or assets (including cash) with respect to or in
exchange for such Common Stock;
(2) any merger, consolidation, statutory share
exchange or combination of the Company with another Person as a result
of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to
or in exchange for such Common Stock; or
(3) any sale or conveyance of the properties and
assets of the Company as, or substantially as, an entirety to any other
Person as a result of which holders of Common Stock shall be entitled
to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing Person, as applicable,
shall execute with the Trustee a supplemental indenture (which shall comply
with this Indenture and the TIA as in force at the date of execution of
such supplemental indenture if such supplemental indenture is then required
to so comply) providing that such Security shall be convertible into the
kind and amount of shares of capital stock and other securities or property
or assets (including cash) which such Holder would have been entitled to
receive upon such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance had such
Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did
not exercise its rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided that,
if the kind or amount of securities, cash or other property receivable upon
such merger, consolidation, statutory share exchange, sale or conveyance is
not the same for each share of Common Stock in respect of which such rights
of election shall not have been exercised ("NON-ELECTING SHARE"), then for
the purposes of this Section 11.11 the kind and amount of securities, cash
or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance for each Non-Electing Share shall be
deemed to be the kind and amount so receivable per share by a plurality of
the Non-Electing Shares). Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article 11. If, in the case of any
such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, the stock or other securities
and assets receivable thereupon by a holder of Common Stock includes shares
of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as applicable, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall
also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders as the Board
of Directors shall reasonably consider necessary by reason of the
foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the Register, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.
The above provisions of this Section shall apply to successive or
series of related reclassifications, mergers, consolidations, statutory
share exchanges, combinations, sales and conveyances.
If this Section 11.11 applies to any event or occurrence, Section 11.4
shall not apply.
Section 11.12. Responsibility Of Trustee For Conversion Provisions.
(a) The Trustee, subject to the provisions of Section 5.1, and any
Conversion Agent shall not at any time be under any duty or responsibility
to any Holder of Securities to determine whether any facts exist which may
require any adjustment of the Conversion Price, or with respect to the
nature or intent of any such adjustments when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. Neither the Trustee, subject to the
provisions of Section 5.1, nor any Conversion Agent shall be accountable
with respect to the validity or value (of the kind or amount) of any Common
Stock or of any other securities or property, which may at any time be
issued or delivered upon the conversion of any Security; and it or they do
not make any representation with respect thereto. Neither the Trustee,
subject to the provisions of Section 5.1, nor any Conversion Agent shall be
responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of stock or share certificates or
other securities or property upon the surrender of any Security for the
purpose of conversion; and the Trustee, subject to the provisions of
Section 5.1, and any Conversion Agent shall not be responsible or liable
for any failure of the Company to comply with any of the covenants of the
Company contained in this Article."
Annex B
6. Conversion Right
Subject to and upon compliance with the provisions of the Indenture,
the Holder of Securities is entitled, at such Holder's option at any time after
January 18, 2005 or in connection with a redemption pursuant to Section 10.1(a)
or (b) of the Indenture or such earlier date as the Company shall have provided
notice to the Holders by mail, to convert this Security (or any portion of the
Principal hereof which is $1,000 or an integral multiple thereof), at the
principal amount thereof or of such portion, into duly authorized, fully paid
and nonassessable shares of Common Stock of the Company at the Conversion Price
in effect at the time of conversion.
The conversion right shall expire at the close of business on the
Stated Maturity. If this Security (or a portion thereof) is called for
redemption, such conversion right in respect of such Security (or such portion
thereof) so called, shall expire at the close of business on the second Business
Day preceding the Redemption Date, unless the Company defaults in making the
payment due upon redemption. The Conversion Price shall be equal to $29.09 per
share of Common Stock, which may be adjusted under certain circumstances as
provided in the Indenture.
To exercise the conversion right with respect to a Security, a Holder
must (1) as to a Global Security, deliver a completed conversion notice, the
form of which is provided in Exhibit C to the Indenture, to the Depositary
stating the Holder elects to convert such Security or, if less than the entire
Principal amount thereof is to be converted, the portion thereof to be
converted, (2) as to a Physical Security, deliver a duly signed completed
conversion notice and such Physical Security duly endorsed or assigned to the
Company or in blank, at the office of any Conversion Agent, and (3) pay any
transfer taxes or other applicable taxes or duties, if required. To convert
interests in a Global Security, a Holder must deliver to DTC the appropriate
instruction form for conversion pursuant to DTC's conversion program or must
deliver instructions in accordance with Euroclear's or Clearstream's normal
operating procedures after application has been made to make the underlying
Common Stock eligible for trading on Euroclear or Clearstream, as applicable.
To extent provided in Section 2.1 of the Indenture, the Holders of such
converted Securities shall be entitled to receive (and retain) any accrued
Interest on the Principal of the surrendered Security, if at all.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the shares of Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock at such time.
No fractional shares of Common Stock will be issued upon conversion of
any Securities. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of such Securities, the Company shall pay a
cash adjustment as provided in the Indenture.
Reference is made to the Indenture for other rights and obligations of
the Holders of this Security with respect to their right to convert this
Security or any portion hereof.
