-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VSUYt9xIsxuf7nuIx7GbwLY75IEloYEm1MO8MnyHrL4FZJRlra9qUU2oRn7K9VLL L1MfSzxXwl/oSEq0RL40yw== 0000891836-97-000248.txt : 19970521 0000891836-97-000248.hdr.sgml : 19970521 ACCESSION NUMBER: 0000891836-97-000248 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970520 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: US AIRWAYS GROUP INC CENTRAL INDEX KEY: 0000701345 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 541194634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-33976 FILM NUMBER: 97612117 BUSINESS ADDRESS: STREET 1: 2345 CRYSTAL DR CITY: ARLINGTON STATE: VA ZIP: 22227 BUSINESS PHONE: 7034185306 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BRITISH AIRWAYS PLC CENTRAL INDEX KEY: 0000809023 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: SPEEDBIRD HOUSE HEATHROW AIRPORT CITY: HOUNSLOW ENGLAND TW6 STATE: X0 SC 13D/A 1 13D/A AMENDMENT NO. 4 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 4)* US Airways Group, Inc. (Name of Issuer) Common Stock, par value $1.00 per share (Upon Conversion of Series F Cumulative Convertible Senior Preferred Stock, Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock) (Title of Class of Securities) 911905 10 7 (CUSIP Number) Paul Jasinski Benjamin F. Stapleton British Airways Plc Sullivan & Cromwell 75-20 Astoria Boulevard 125 Broad Street Jackson Heights, New York 11370 New York, New York 10004 (718) 397-4250 (212) 558-3740 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 19, 1997 (Date of Event which Requires Filing of this Statement) If a filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ------------------------ CUSIP NO. 911905 10 7 - ------------------------ - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON BritAir Acquisition Corp. Inc. IRS Identification No. 521578385 - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC, AF - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 30,000 shares of Series F Cumulative SHARES Convertible Senior Preferred Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock ------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY -0- EACH ------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON 30,000 shares of Series F Cumulative WITH Convertible Senior Preferred Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock ------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 30,000 shares of Series F Cumulative Convertible Senior Preferred Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.0% of Common Stock (assuming conversion of Series F Cumulative Convertible Senior Preferred Stock, Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and Series T-2 Cumulative Convertible Exchangeable Series Preferred Stock) - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON British Airways Plc IRS Identification No. 131546240 - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION England and Wales - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 30,000 shares of Series F Cumulative SHARES Convertible Senior Preferred Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock (all of the foregoing indirectly through Britair Acquisition Corp. Inc.) ------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY -0- EACH ------------------------------------------- REPORTING 9. SOLE DISPOSITIVE POWER PERSON 30,000 shares of Series F Cumulative WITH Convertible Senior Preferred Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock (all of the foregoing indirectly through Britair Acquisition Corp. Inc.) ------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 30,000 shares of Series F Cumulative Convertible Senior Preferred Stock, 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock (all of the foregoing indirectly through Britair Acquisition Corp. Inc.) - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 23.0% of Common Stock (assuming conversion of Series F Cumulative Convertible Senior Preferred Stock, Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock and Series T-2 Cumulative Convertible Exchangeable Series Preferred Stock) - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- Item 1. Security and Issuer This Statement relates to the common stock, par value $1.00 per share, of US Airways Group, Inc. ("US Airways"), Crystal Park Four, 2345 Crystal Drive, Arlington, Virginia 22227 (the "Common Stock"), which is issuable upon conversion of the Series F Cumulative Convertible Senior Preferred Stock, no par value (the "Series F Preferred Stock"), the Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock, no par value (the "Series T-1 Preferred Stock") and the Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock (the "Series T-2 Preferred Stock"). Item 4. Purpose of Transaction On May 19, 1997, US Airways sent a letter (attached hereto as Exhibit 1) to BA giving notice of its exercise ("Notice of Exercise") of a right of first offer to repurchase from BA 9,919.8 shares of the Series T-2 Preferred Stock. On May 19, 1997, pursuant to a Stock Purchase Agreement (the "Stock Purchase Agreement") by and among US Airways, BA, and BritAir Acquisition Corp. Inc. ("BritAir") (attached hereto as Exhibit 2), US Airways agreed to repurchase all 152.1 of the outstanding shares of the Series T-1 Preferred Stock and 1,940.6 shares of the Series F Preferred Stock. The purchase price for the Series T-1 and T-2 Preferred Stock is equivalent to $26.50 for each share of Common Stock into which such Preferred Stock is convertible and the purchase price for the Series F Preferred Stock is equivalent to $24.63 for each share of Common Stock into which such Preferred Stock is convertible. The terms of the purchased shares require US Airways to retire such shares. BA has agreed to convert its remaining 28,059.4 shares of the Series F Preferred Stock into Common Stock on or prior to June 3, 1997. Item 5. Interest in Securities of the Issuer (a) BritAir, a wholly owned subsidiary of BA, directly owns 30,000 shares of the Series F Preferred Stock, 152.1 shares of the Series T-1 Preferred Stock and 9,919.8 shares of the Series T-2 Preferred Stock. Subject to restrictions on foreign ownership of U.S. airlines, the 30,000 shares of the Series F Preferred Stock held by BritAir are convertible into 15,458,851 shares of Common Stock, the 152.1 shares of the Series T-1 Preferred Stock are convertible into 74,195 shares of Common Stock and the 9,919.8 shares of the Series T-2 Preferred stock are convertible into 3,757,500 shares of Common Stock. Collectively, the total of such shares of Common Stock is equal to approximately 23.0%* of the total number of shares of Common Stock of US Airways outstanding (assuming conversion of the Series F, T-1 and T-2 Preferred Stock). (b) BritAir has the sole power to vote, or to direct the vote, and the sole power to dispose of, or to direct the disposition of, the shares of Series F Preferred Stock, the Series T-1 Preferred Stock and the Series T-2 Preferred Stock owned by it. (c) Not applicable. (d) No person other than BritAir has and, prior to the consummation of the purchases by US Airways contemplated by the Exercise Notice and the Stock Purchase Agreement, will have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of the Series F Preferred Stock, the Series T-1 Preferred Stock or the Series T-2 Preferred Stock beneficially owned by BritAir. (e) Not applicable. Item 7. Material to be filed as Exhibits 1. Letter, dated May 19, 1997, from Lawrence M. Nagin to BA. - -------- * Based on the number of shares of common stock of US Airways outstanding as of March 24, 1997 as disclosed in US Airways' Proxy Statement relating to its Annual Meeting of Stockholders for 1997 (filed on March 31, 1997). 2. Stock Purchase Agreement, dated May 19, 1997, by and among US Airways, BA, and BritAir. SIGNATURES Each of the undersigned certifies that after reasonable inquiry and to the best of its knowledge and belief, the information set forth in this Statement is true, complete and correct. BRITISH AIRWAYS PLC By /s/ R.D.A. Galbraith R.D.A. Galbraith BRITAIR ACQUISITION CORP. INC. By /s/ Paul Jasinski Paul Jasinski Dated: May 19, 1997 EXHIBIT INDEX Page on which Exhibit appears Ex-99.1. 1. Letter, dated May 19, 1997, from Lawrence M. Nagin to BA. Ex-99.2. 2. Stock Purchase Agreement, dated May 19, 1997, by and among US Airways, BA, and BritAir. EX-99.1 2 LETTER, DATED MAY 19, 1997 FROM LAWRENCE M. NAGIN BRITISH AIRWAYS - -------------------------------------------------------------------------------- USAir Lawrence M. Nagin Executive Vice President - Corporate Affairs and General Counsel 2345 Crystal Drive Arlington, VA 22227 Telephone: 703-418-5210 Fax: 703-418-5252 May 19, 1997 British Airways Plc Speedbird House Heathrow Airport (London) Hounslow TW6 2JA England Attention: Legal Director Dear Sir or Madam: Reference is made to your letter dated March 14, 1997 giving us notice, pursuant to Section 7.2 of the Investment Agreement between USAir Group, Inc. (the "Company") and British Airways Plc ("BA"), dated as of January 21, 1993, as amended (the "Investment Agreement"), that BritAir Acquisition Corp. Inc. ("BritAir") intends to sell 9,919.8 shares of Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock (the "Offered Shares") of the Company at $10,037.88 per share (the "Offer Price"). This letter constitutes notice, pursuant to Section 7.2 of the Investment Agreement, that the Company elects to purchase the Offered Shares at the Offer Price. Such purchase shall take place on May 29, 1997 or such earlier date as we shall mutually agree. Please contact Peter Atkins at Skadden, Arps to discuss the mechanics for closing. Very truly yours, US Airways Group, Inc. By: /s/ Lawrence M. Nagin Lawrence M. Nagin Executive Vice President - Corporate Affairs and General Counsel cc: Benjamin F. Stapleton Sullivan & Cromwell Peter Allan Atkins Skadden, Arps, Slate, Meagher & Flom LLP EX-99.2 3 STOCK PURCHASE AGREEMENT, DATED MAY 19, 1997 STOCK PURCHASE AGREEMENT Stock Purchase Agreement (this "Agreement") made and entered into this 19th day of May, 1997, by and among US Airways Group, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Company"), British Airways Plc, a public limited company organized and existing under the laws of England and Wales ("BA"), and BritAir Acquisition Corp. Inc., a corporation organized and existing under the laws of the State of Delaware and a wholly owned subsidiary of BA (the "Seller"). W I T N E S S E T H : WHEREAS, the Seller owns 30,000 shares of Series F Cumulative Convertible Senior Preferred Stock ("Series F Preferred Stock"), 152.1 shares of Series T-1 Cumulative Convertible Exchangeable Senior Preferred Stock ("Series T-1 Preferred Stock", and together with Series F Preferred Stock, the "Preferred Stock") of the Company; and WHEREAS, the Company desires to purchase from Seller, and the Seller is willing to sell to the Company 1940.636 shares of Series F Preferred Stock and all 152.1 shares of the Series T-1 Preferred Stock owned by the Seller (collectively, the "Preferred Shares"); WHEREAS, in view of Seller's agreement to sell the Preferred Shares to the Company, the Company agrees to waive certain of its rights under the Investment Agreement made and entered into January 21, 1993, by and between the Company and BA, as amended (the "Investment Agreement"); WHEREAS, pursuant to Section 7.2 of the Investment Agreement, BA has delivered a notice to the Company stating BA's intention to sell Series T-2 Cumulative Convertible Exchangeable Senior Preferred Stock (the "Series T-2 Preferred Stock"), and on the date hereof the Company is delivering a notice to BA, a copy of which is attached hereto as Annex A, stating that the Company intends to exercise its right of first offer with respect to such Series T-2 Preferred Stock, such purchase to be consummated on May 29, 1997 or such earlier date as the parties hereto shall mutually agree; NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter contained, the parties hereto do hereby agree as follows: 1. Representations, Warranties and Agreements of the Seller. The Seller represents and warrants to the Company that: (a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and BA is a public limited company duly organized and validly existing under the laws of England and Wales. The Seller has the corporate power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Preferred Shares in accordance herewith. (b) Neither the execution nor the delivery of this Agreement nor the sale of the Preferred Shares nor the Seller's or BA's performance of any of their respective covenants and agreements hereunder will, directly or indirectly,(i) contravene, conflict with, or result in a violation of the certificate of incorporation or bylaws of the Seller or the Memorandum and Articles of Association of BA or any resolution adopted by the Board of Directors of the Seller or BA; (ii) contravene, conflict with, or result in a violation of any federal, state, local, foreign, international, or administrative rule, law, ordinance, regulation, statute, (iii) contravene, conflict with, or result in a violation or breach of, or give any person the right to exercise any remedy under, or accelerate the maturity or performance of, or cancel, terminate or modify any contract to which the Seller or BA is a party or by which the Seller or BA may be bound or (iv) give any person the right to prevent, delay, or otherwise interfere with any of the transactions contemplated hereby. (c) Immediately prior to the Closing (as defined below), the Seller will have good and valid title to the Preferred Shares, free and clear of all liens, encumbrances, equities or claims (other than pursuant to the Investment Agreement and this Agreement); and, upon delivery of the Preferred Shares and payment therefor pursuant hereto, good and valid title to the Preferred Shares, free and clear of all liens, encumbrances, equities or claims will pass to the Company. (d) All sales by Seller or BA of the shares of common stock, par value $1.00 per share, of the Company (the "Common Stock") into which the shares of the Series F Preferred Stock that are not being sold and purchased hereunder (the "Remaining Series F Shares") are convertible (the "Common Shares"), shall be made pursuant to an exemption from the registration requirements of the Securities Act of 1933 or pursuant to an effective registration statement under such act. 2. Representations and Warranties of the Company. The Company represents and warrants to the Seller and BA that: (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the corporate power and authority to enter into this Agreement and to purchase the Preferred Shares in accordance herewith. (b) Neither the execution nor the delivery of this Agreement nor the purchase of the Preferred Shares nor the Company's performance of its covenants and agreements hereunder will, directly or indirectly,(i)contravene, conflict with, or result in a violation of the certificate of incorporation or bylaws of the Company or any resolution adopted by the Board of Directors of the Company; (ii) contravene, conflict with, or result in a violation of any federal, state, local, foreign, international, or administrative rule, law, ordinance, regulation, statute, or treaty, including, without limitation, the provisions of the General Corporation Law of the State of Delaware relating to the repurchase or redemption of stock, (iii) contravene, conflict with, or result in a violation or breach of, or give any person the right to exercise any remedy under, or accelerate the maturity or performance of, or cancel, terminate or modify any contract to which the Company is a party or by which the Company may be bound or (iv) give any person the right to prevent, delay, or otherwise interfere with any of the transactions contemplated hereby. (c) (i) The issued and outstanding capital stock of the Company consisted of, as of April 30, 1997, 65,274,768 shares of Common Stock, 358,000 shares of Series A Cumulative Convertible Preferred Stock, 42,625.5 shares of the Series B Cumulative Convertible Preferred Stock, and consists of, as of the date hereof, 30,000 shares of the Series F Preferred Stock, 152.1 shares of the Series T-1 Preferred Stock, and 9,919.8 shares of the Series T-2 Preferred Stock; (ii) as of the date hereof, 1940.636 shares of the Series F Preferred Stock, 152.1 shares of the Series T-1 Preferred Stock and 9,919.8 shares of the Series T-2 Preferred Stock represent, upon conversion, 1,000,000, 74,195 and 3,757,500 shares of Common Stock, respectively; (iii) as of the date hereof, each Conversion Price (as such term is defined in each of the Certificates of Designation of the Preferred Stock) used to calculate the conversions in (ii) above fully and accurately reflects any adjustments to such Conversion Price required pursuant to Section 8 of the respective Certificates of Designation of the Preferred Stock. 3. Purchase and Sale of Preferred Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Seller agrees to sell to the Company, and the Company agrees to purchase from the Seller, the Preferred Shares for the aggregate of the respective purchase prices (the "Aggregate Purchase Price") set forth by series below: Total Number Price Purchase Series of Shares per Share Price Series F Preferred Stock 1940.636 $12,693.708145 $24,633,867.00 Series T-1 Preferred Stock 152.1 12,926.80802 1,966,168.50 Aggregate Purchase Price $26,600,035.50 (b) Certificates evidencing the Preferred Shares will be made available for inspection by the Company at 3:00 p.m., New York time, on the business day prior to, or two business days prior to, the Closing Date (as defined below), at a meeting at the offices of Sullivan & Cromwell referred to in Section 3(c) hereof (such meeting, the "Pre-Closing"). A representative of the Company or of such office or agency maintained for the purpose of effecting conversions of the Series F Preferred Stock (the Company or such office or agency, the "Transfer Agent") shall attend the Pre-Closing for the purpose of preparing, and exchanging Seller's certificate for the Series F Preferred Stock for, two certificates, the first representing the shares of the Series F Preferred Stock to be sold to the Company pursuant to this Agreement and the second representing the Remaining Series F Shares. (c) Certificates evidencing the Preferred Shares, together with appropriate instruments for the transfer thereof to the Company, shall be delivered by the Seller to the Company against payment by the Company of the Aggregate Purchase Price therefor by wire transfer of immediately available funds to the account of the Seller at a bank to be identified to the Company at least one day prior to the Closing. Such delivery shall take place at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, or at such other location as the Seller and the Company may agree to in writing. The time and date of payment and delivery shall be 9:30 a.m., New York time, on May 22, 1997, or such other time and date as the Seller and the Company may agree to in writing. The parties hereby agree that the consummation of the Company's purchase of the Series T-2 Preferred Stock pursuant to the Company's right of first offer pursuant to Section 7.2 of the Investment Agreement shall occur on the Closing Date at the same time and place set for the Closing. The exchange of the Preferred Shares for the Aggregate Purchase Price therefor is herein referred to as the "Closing". The date on which such Closing occurs is herein referred to as the "Closing Date". 4. Covenants of the Company. The Company covenants to, and agrees with, BA and the Seller that: (a) Following delivery to the Company by Sullivan & Cromwell, counsel to BA and the Seller, of their opinion (the "Legal Opinion"), dated the date of such delivery, in substantially the form attached as Annex 4(a) hereto, upon request in writing from the Seller that the Remaining Series F Shares be converted into shares of the Common Stock, the Company shall, or shall cause the Transfer Agent to, ensure (i) that such conversion is effected within one Business Day (as used in this Agreement the term "Business Day" shall mean any day on which the New York Stock Exchange is open for business) after the surrender to the Company of the certificate representing the Remaining Series F Shares and (ii) that, subject to paragraph (b) below, the certificate in Seller's name representing the Common Shares be prepared bearing only a legend (the "Contractual Restrictions Legend") to the effect that the securities represented by such certificate are subject to restrictions on transfer pursuant to the terms of the Investment Agreement, and any sale or disposition thereof must be made in compliance with applicable provisions of such Investment Agreement, including without limitation those described in Article VII and Article VIII thereof. Such certificate shall be delivered to the Seller at the offices of Sullivan & Cromwell referred to in Section 3(c) not later than 3:00 p.m. New York time on such first Business Day following request therefor. The certificate representing the Remaining Series F Shares described in Section 3(b) hereof shall bear only the Contractual Restrictions Legend if the Legal Opinion shall have been delivered to the Company at least one Business Day prior to the Pre-Closing and the Seller shall request that the certificate be so prepared. (b) At such time as the Seller and, if applicable, BA shall enter into an underwriting agreement (an "Underwriting Agreement") with one or more underwriters (the "Underwriters") containing a covenant from the Underwriter in substantially the form attached as Annex 4(c) hereto, within one Business Day of a request by the Seller therefor, the Company shall, or shall cause the Transfer Agent to, remove the Contractual Restrictions Legend from the certificate representing the Common Shares or issue a new certificate that does not bear the Contractual Restrictions Legend, in either case, with the effect that the resulting certificate for the Common Shares shall no longer be legended. (c) The sale of the Common Shares pursuant to an Underwriting Agreement shall be an "underwritten public offering" constituting a "Permitted Offering" as such terms are, respectively, used and defined in Section 7.1(b)(i) of the Investment Agreement. If Seller sells the Common Shares in an underwritten public offering pursuant to an Underwriting Agreement, entered into by Seller and one or more of the underwriters set forth on Annex 7(a)(i) hereto containing covenants from the Underwriters in the form attached as Annex 4(c) hereto, then with respect to such sale to such Underwriters and with respect to the initial resale of the Common Shares by such Underwriters the Company hereby waives BA's and Seller's obligation under Section 7.1(b)(i) of the Investment Agreement to sell the Common Shares in the United States and to use best efforts to prevent sales to any person that would become, as the result of such offering, the beneficial owner of more than 5% of the outstanding Common Stock. (d) The Company shall, prior to the Closing Date, supplementally list, subject to notice of issuance, the Common Shares on the New York Stock Exchange. The Company shall, or shall cause its Transfer Agent, to immediately file notice of issuance to effect such listing upon the surrender to the Company of the certificate representing the Remaining Series F Shares for exchange into the Common Shares. (e) Except as set forth in this subparagraph (e), the Seller's registration rights set forth in Article VIII of the Investment Agreement shall not be affected by the parties' entry into this Agreement and shall remain in effect. The Company shall not withdraw the Registration Statement on Form S-1 (the "Form S-1") relating to the Preferred Stock prior to the "Termination Date": provided, however, that the Company shall take such actions as it deems necessary to cause the Securities and Exchange Commission not to declare the Form S-1 effective prior to June 16, 1997. Upon written notice from the Seller to the Company delivered on or after June 16, 1997 stating that, while registration is not necessary under the Securities Act of 1933, an effective registration statement relating to the Common Shares would facilitate the marketing of such shares, the Company shall use reasonable efforts to (a) amend as promptly as practicable the Form S-1 to provide for the sale by the Seller of the Common Shares and (b) cause such amended Form S-1 to be declared effective under the Securities Act of 1933 as promptly as practicable. As used in this subparagraph (e), the "Termination Date" shall be the earlier of (i) the first date following the issuance of the Common Shares on which BA and the Seller hold in the aggregate not more than 1,000,000 Common Shares and (ii) the date on which the Company is no longer required to keep the Form S-1, whether or not amended, effective under Section 8.1(b)(ix) of the Investment Agreement. (f) The record date for the May 30, 1997 dividend on the Preferred Shares, the Remaining Series F Shares and the 9,919.8 shares of Series T-2 Preferred Stock owned as of the date hereof by the Seller shall be May 20, 1997. The Seller shall be entitled to receive the dividend on all such shares, in respect of the dividend payment period ending May 30, 1997. (g) Prior to consummation of the sale by the Seller of the Common Shares, the Company shall not redeem any shares of the Remaining Series F Shares or any of the Common Shares into which such shares are converted. 5. Covenants of BA and the Seller. BA and the Seller covenant to, and agree with, the Company that: (a) On or prior to June 3, 1997, the Seller shall surrender to the Company a certificate evidencing the Remaining Series F Shares and deliver a written request to the Company to convert the Remaining Series F Shares into Common Shares, as described in Sections 4(a) and 4(b) hereof. (b) The Seller and BA hereby acknowledge that none of (x) the execution and delivery by the Company of this Agreement with the form of Legal Opinion attached hereto, (y) the acceptance by the Company of the final, executed Legal Opinion or (z) the removal of the restrictive legend from the certificate representing the Remaining Series F Shares or the Common Shares, shall be deemed to evidence the Company's agreement or acknowledgment that the matters set forth in the Legal Opinion are accurate or complete. (d) BA shall cause the Seller to comply with the Seller's covenants and other agreements under this Agreement. 6. Waivers of the Company. The Company hereby waives the right of first offer set forth in Section 7.2 of the Investment Agreement with respect to the Common Shares. 7. Conditions to Closing of the Company. The obligation of the Company to accept and pay for the Preferred Shares is subject to the following conditions: (a) The representations and warranties of the Seller contained herein shall be true and correct when made and as of the Closing Date. (b) The Seller shall have performed and complied with all agreements on its part to be performed or complied with prior to or on the Closing Date pursuant hereto. 8. Conditions to Closing of the Seller. The obligation of the Seller to deliver the Shares is subject to the following conditions: (a) The representations and warranties of the Company contained herein shall be true and correct when made and as of the Closing Date. (b) The Company shall have performed and complied with all agreements on its part to be performed or complied with prior to or on the Closing Date pursuant hereto. (c) The Company shall have supplementally listed the Common Shares, subject to notice of issuance, on the New York Stock Exchange. 9. Expenses. The Seller agrees with the Company that the Seller will pay or cause to be paid (i) the fees, disbursements and expenses of counsel to the Seller in connection with the transactions contemplated by this Agreement and (ii) all other expenses (including taxes) incurred by or imposed on the Seller incident to the sale and delivery of the Preferred Shares and the Common Shares. The Company will pay (i) all fees and expenses in connection with supplementally listing the Common Shares on the NYSE (ii) all of its own costs and expenses, including the fees, disbursements and expenses of its counsel and (iii) all other expenses (including taxes) incurred by or imposed on the Company incident to the purchase of the Preferred Shares by it. 10. Specific Performance. The parties hereto each acknowledge that in view of the uniqueness of the subject matter hereof, they would not have an adequate remedy at law for money damages in the event that this Agreement were not performed in accordance with its terms, and therefore agree that the parties shall be entitled to specific enforcement of the terms hereof in addition to any other remedy to which the parties hereto may be entitled at law or in equity. 11. Survival of Agreements, Etc. All representations, warranties, covenants and agreements made herein or in connection with the transactions contemplated hereby shall survive the execution and delivery of this Agreement and the Closing of the purchase and sale of the Preferred Shares. 12. Non-Assignability and Successors. This Agreement and the rights and obligations hereunder may not be assigned or otherwise transferred by either party. This Agreement shall be binding upon, and inure solely to the benefit of, the Company, BA and the Seller, and their respective successors and permitted assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. 13. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof. 14. Amendments. This Agreement cannot be modified, amended or terminated except by an instrument in writing signed by the Company, BA and the Seller; provided, however, that any provision of this Agreement may be waived only by the party to be charged with the waiver but only by a duly executed writing. 15. Time of Essence. Time shall be of the essence in this Agreement. 16. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles. 17. Notices. All notices and other communications hereunder shall be in writing and shall be sent by facsimile with a hard copy to follow by overnight courier as follows: If to the Seller: BritAir Acquisition Corp. Inc. 1105 North Market Street Suite 1300 P.O. Box 8985 Wilmington, DE 19899 Attention: Paul Jasinski Telephone: (718) 397-4250 Fax: (718) 397-4268 with copies to British Airways Plc Speedbird House Heathrow Airport (London) Hounslow TW6 2JA England Attention: Legal Director Telephone: 011-44-181-562-5880 Fax: 011-44-181-562-5621 and Sullivan & Cromwell 125 Broad Street New York, New York 10004 Attention: Benjamin F. Stapleton Telephone: (212) 558-4000 Fax: (212) 558-3588 If to the Company: US Airways Group, Inc. Crystal Park Four 2345 Crystal Drive Arlington, Virginia 22227 Attention: General Counsel Telephone: (703) 418-5210 Fax: (703) 418-5208 with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue New York, New York 10022 Attention: Peter Allan Atkins Telephone: (212) 735-3000 Fax: (212) 735-2000 18. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Company, on the one hand, and BA and the Seller, on the other hand, provides the waiver by the Company of certain of its rights under the Investment Agreement to the extent provided herein and supersedes all prior agreements and understandings relating to the subject matter hereof, except the Investment Agreement. 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same instrument. 20. Consent to Jurisdiction; Service of Process. (a) The parties to this Agreement hereby irrevocably submit to the exclusive jurisdiction of any Federal or State court located in New York, New York over any suit, action or proceeding arising out of or relating to this Agreement. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such court. The parties agree that, to the fullest extent permitted by applicable law, a final and non-appealable judgment in any such suit, action, or proceeding brought in such court shall be conclusive and binding upon the parties. (b) Each party hereby consents to process being served in any suit, action or proceeding of the nature referred to in subsection (a) above by the sending of a copy thereof in accordance with the provisions of Section 17 of this Agreement. Nothing in this Section 20 shall affect the right of any party to serve process in any manner permitted by law. IN WITNESS WHEREOF, the Company, BA and the Seller have executed this Agreement as of the day and year first above written. US AIRWAYS GROUP, INC. By: ________________________________ Name: Title: BRITISH AIRWAYS PLC By: ________________________________ Name: Title: BRITAIR ACQUISITION CORP. INC. By: ________________________________ Name: Title: Annex 4(c) The Underwriter has been informed by the Seller that compliance with Section 7.1(b)(i) of the Investment Agreement requires that the Common Shares shall be sold in an underwritten public offering, primarily in the United States, and that in order to satisfy that requirement BA and the Seller are relying on the Underwriter to comply, and the Underwriter agrees that it will comply, in connection with the resale by the Underwriter of the Common Shares, with the following requirements: (a) The Common Shares shall be offered to the public in a manner consistent with the procedures that have been employed by the Underwriter in an underwritten public offering of common stock; (b) The Underwriter shall not sell more than 4,000,000 Common Shares to any person; and (c) Not more than an aggregate of 3,000,000 Common Shares shall be offered or sold by the Underwriter outside the United States and such offers and sales are made only to foreign institutional investors set forth on Annex 3(c) hereto (which Annex 3(c) will be agreed prior to execution of the Underwriting Agreement by Lazard Freres & Co. LLC & Gleacher NatWest, Inc.) Annex 7(a)(i) List of Underwriters Credit Suisse First Boston Corporation Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated Morgan Stanley & Co. Incorporated Lehman Brothers Inc. Donaldson, Lufkin & Jenrette Securities Corporation -----END PRIVACY-ENHANCED MESSAGE-----