-----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, SyGDefkf/iBqXPnGiduKeROpdfBYPrusYfIRNs22+NM9tEWy7hY+geiJh9e8bEFv vXldvYtMquRSyK+UjW9jkA== 0001179022-03-000221.txt : 20030825 0001179022-03-000221.hdr.sgml : 20030825 20030825145352 ACCESSION NUMBER: 0001179022-03-000221 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20030825 GROUP MEMBERS: THE EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA GROUP MEMBERS: THE TEACHERS' RETIREMENT SYSTEM OF ALABAMA FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC CENTRAL INDEX KEY: 0001226468 IRS NUMBER: 320039542 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: 135 SOUTH UNION STREET CITY: MONTGOMERY STATE: AL ZIP: 36104 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 SEC ACT: 1934 Act SEC FILE NUMBER: 005-33976 FILM NUMBER: 03864213 BUSINESS ADDRESS: STREET 1: 2345 CRYSTAL DR CITY: ARLINGTON STATE: VA ZIP: 22227 BUSINESS PHONE: 7038725306 SC 13D 1 rsasched13d.htm SCHEDULE 13D Schedule 13D

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

 

US Airways Group, Inc.

(Name of Issuer)

Class A Common Stock, par value $1.00
Class B Common Stock, par value $1.00

(Title of Class of Securities)

911905 50 3
911905 60 2

(CUSIP Numbers)

William Stephens
Retirement Systems of Alabama Holdings LLC
135 South Union Street
Montgomery, Alabama 36104
Telephone (334) 242-5718

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

May 14, 2003

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 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).

(Continued on following pages)

(Page 1 of 16 Pages)

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 2 of 16 pages

 

  1. Name of Reporting Person:
Retirement Systems of Alabama Holdings LLC		 I.R.S. Identification Nos. of above persons (entities only):
32-0039542
  2. Check the Appropriate Box if a Member of a Group (See Instructions):*(1)
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
AF
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Delaware
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
22,669,412 (Class A Common Stock)
  5,000,000 (Class B Common Stock)
8. Shared Voting Power:
   0
9. Sole Dispositive Power:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
10.Shared Dispositive Power:
  0
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
  44.9%  (Class A Common Stock)
  100%   (Class B Common Stock)
  14.Type of Reporting Person (See Instructions):
  IV

 

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 3 of 16 pages

 
  1. Name of Reporting Person:
The Teachers' Retirement System of Alabama		 I.R.S. Identification Nos. of above persons (entities only):
63-0474586
  2. Check the Appropriate Box if a Member of a Group (See Instructions):*(1)
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
OO
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Alabama
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
  0
8. Shared Voting Power:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
9. Sole Dispositive Power:
  0
10.Shared Dispositive Power:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
  44.9%  (Class A Common Stock)
  100%   (Class B Common Stock)
  14.Type of Reporting Person (See Instructions):
  EP

 

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 4 of 16 pages

 
  1. Name of Reporting Person:
The Employees' Retirement System of Alabama		 I.R.S. Identification Nos. of above persons (entities only):
63-0474399
  2. Check the Appropriate Box if a Member of a Group (See Instructions):*(1)
    (a) o  
    (b) x  
  3. SEC Use Only:
  4. Source of Funds (See Instructions):
OO
  5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o
  6. Citizenship or Place of Organization:
Alabama
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7. Sole Voting Power:
  0
8. Shared Voting Power:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
9. Sole Dispositive Power:
  0
10.Shared Dispositive Power:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
  11.Aggregate Amount Beneficially Owned by Each Reporting Person:
  22,669,412 (Class A Common Stock)
    5,000,000 (Class B Common Stock)
  12.Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):
o
  13.Percent of Class Represented by Amount in Row (11):
  44.9%  (Class A Common Stock)
  100%   (Class B Common Stock)
  14.Type of Reporting Person (See Instructions):
  EP

 

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 5 of 16 pages

Introduction.

This statement on Schedule 13D (this "Statement") is filed by Retirement Systems of Alabama Holdings LLC ("RSA"), a limited liability company organized under the laws of the State of Delaware, on behalf of (i) itself, (ii) The Teachers' Retirement System of Alabama, an instrumentality of the State of Alabama ("TRSA") and (iii) The Employees' Retirement System of Alabama, an instrumentality of the State of Alabama ("ERSA") (collectively, the "Reporting Persons" and each a "Reporting Person"), for the purpose of disclosing the acquired beneficial ownership of the Reporting Persons in the Issuer (as defined below) pursuant to (a) an Investment Agreement by and between US Airways Group, Inc. and The Retirement Systems of Alabama, dated as of September 26, 2002, as amended by that certain Amendment No. 1 by and among US Airways Group, Inc., The Retirement Systems of Alabama and RSA, dated as of January 17, 2003, and as further amended by that certain Amendment No. 2 by and among US Airways Group, Inc., The Retirement Systems of Alabama and RSA, dated as of March 30, 2003 (as amended, the "Investment Agreement") and (b) the First Amended and Modified Plan of Reorganization of U.S. Airways Group, Inc. and its Affiliated Debtors and Debtors-in-Possession (the "Plan"), confirmed on March 18, 2003 by the United States Bankruptcy Court for the Eastern District of Virginia (Case No. 02-83984-SSM).

Item 1.   Security and Issuer

The name of the issuer is US Airways Group, Inc. (the "Issuer"). This Statement relates to the Issuer's Class A Common Stock, par value $1.00 per share (the "Class A Common Stock") and Class B Common Stock, par value $1.00 per share (the "Class B Common Stock"). The principal executive offices of the Issuer are located at 2345 Crystal Drive, Arlington, Virginia 22227.

Item 2.   Identity and Background

(a-c, f)

(i)           RSA is a limited liability company organized under the laws of Delaware that was formed for the purpose of purchasing and managing the Class A Common Stock, Class B Common Stock and certain other securities of the Issuer. The address of RSA's principal business and principal office is 135 South Union Street, Montgomery, Alabama 36104.

(ii)          TRSA is an instrumentality of the State of Alabama which is an employee benefit plan that manages trust fund assets for the payment of pension benefits to public employees of the State of Alabama. The address of TRSA's principal business and principal office is 135 South Union Street, Montgomery, Alabama 36104.

(iii)          ERSA is an instrumentality of the State of Alabama which is an employee benefit plan that manages trust fund assets for the payment of pension benefits to public employees of the State of Alabama. The address of ERSA's principal business and principal office is 135 South Union Street, Montgomery, Alabama 36104.

The name, business address, present principal occupation or employment, the name of any organization in which such employment is conducted and the citizenship of each executive officer and director of each of the Reporting Persons is set forth on Schedules I, II and III, respectively, each of which is incorporated herein by reference.

(d-e)         None of the Reporting Persons or, to the best of the knowledge of the Reporting Persons, any of the persons listed on Schedules I, II and III, during the last five years (a) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) has been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, United States federal or state securities laws or finding any violation with respect to such laws.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 6 of 16 pages

Item 3.   Source and Amount of Funds or Other Consideration

The information set forth in Item 6 is hereby incorporated by reference into this Item 3.

The Reporting Persons purchased their shares of Class A Common Stock, 1,380,570 of their Class A-1 Warrants, their Class B Common Stock and certain other securities of the Issuer for an aggregate of $240 million. RSA received the funds for its purchase of such securities from capital contributions by TRSA and ERSA. TRSA and ERSA received the funds they used for such capital contributions from employer and employee contributions and investment earnings thereon. The Reporting Persons received their other 636,249 Class A-1 Warrants in connection with and in partial consideration for the ATSB Loan, as defined and described in Item 6.

Item 4.   Purpose of Transaction

The Reporting Persons acquired their Class A Common Stock, Class A-1 Warrants and Class B Common Stock as described in Item 6. The information set forth in Item 6 hereof is hereby incorporated by reference into this Item 4. The Reporting Persons currently hold such Class A Common Stock, Class A-1 Warrants and Class B Common Stock for investment purposes subject to the next paragraph.

Subject to the agreements and arrangements described in Item 6 hereof, the Reporting Persons may evaluate the Issuer's businesses and prospects, alternative investment opportunities and all other factors deemed relevant in determining whether the Reporting Persons will acquire additional securities of the Issuer or dispose of any securities of the Issuer beneficially owned by the Reporting Persons. At any time, the Reporting Persons may acquire additional securities of the Issuer or sell some or all of the securities of the Issuer beneficially owned by the Reporting Persons, in either case in the open market, in privately negotiated transactions or otherwise. Except as otherwise disclosed herein, no Reporting Person currently has any agreements, beneficially or otherwise, which would be related to or would result in any of the matters described in paragraphs (a) through (j), inclusive, of the instructions to Item 4 of Schedule 13D, occurring; however, as part of the ongoing evaluation of this investment and investment alternatives, any Reporting Person may consider such matters, and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, any Reporting Person may hold discussions with or make formal proposals to management or the Board of Directors of the Issuer, other shareholders of the Issuer or other third parties regarding such matters.

In connection with the consummation of the Plan, the Issuer amended and restated its certificate of incorporation and by-laws. Additionally, the Board of Directors of the Issuer was reconstituted and Dr. David Bronner and William Stephens, employees of TRSA and ERSA, were appointed to the Board of Directors of the Issuer. Pursuant to the Investment Agreement, RSA obtained the right to designate up to eight members of the Board of Directors of the Issuer. Please see Item 6 for a more detailed discussion of RSA's rights in respect of the Board of Directors of the Issuer.

Item 5.   Interest in Securities of the Issuer

(a, b) (i)   Based upon information provided by the Issuer, upon consummation of the Plan, there were 20,652,593 shares of Class A Common Stock outstanding, 13,681,400 Class A-1 Warrants outstanding and 5,000,000 shares of Class B Common Stock outstanding. Each Class A-1 Warrant is currently exercisable into one share of Class A Common Stock at the option of the holder. Accordingly, any holder of Class A-1 Warrants may be deemed to beneficially own an equal number of shares of Class A Common Stock. As of the date hereof, RSA is a direct beneficial owner of 22,669,412 shares of Class A Common Stock, consisting of 20,652,593 outstanding shares of Class A Common Stock and 2,016,819 shares of Class A Common Stock issuable upon exercise of 2,016,819 Class A-1 Warrants, or, in the aggregate, approximately 44.9% of the outstanding shares of Class A Common Stock, assuming the exercise by RSA of all of its Class A-1 Warrants and no exercise by any other person of their Class A-1 Warrants. As of the date hereof, RSA is a direct beneficial owner of 5,000,000 shares of Class B Common Stock, or 100% of the outstanding shares of Class B Common Stock.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 7 of 16 pages

(ii)          TRSA is one of two members of RSA, and has a 66 2/3% interest in RSA. By reason of such relationship, TRSA may be deemed to beneficially own and have shared voting and dispositive power over the Class A Common Stock and Class B Common Stock owned by RSA. TRSA disclaims beneficial ownership of the shares of Class A Common Stock and Class B Common Stock beneficially owned by RSA or ERSA.

(iii)         ERSA is one of two members of RSA, and has a 33 1/3% interest in RSA. By reason of such relationship, ERSA may be deemed to beneficially own and have shared voting and dispositive power over the Class A Common Stock and Class B Common Stock owned by RSA. ERSA disclaims beneficial ownership of the shares of Class A Common Stock and Class B Common Stock beneficially owned by RSA or TRSA.

(iv)         To the best knowledge of the Reporting Persons with respect to the persons named in Schedules I, II and III, none of the persons (i) beneficially owns any shares of Class A Common Stock or Class B Common Stock (other than in his or her capacity as a controlling member, executive officer or director of such entity or (ii) has the right to acquire any Class A Common Stock or Class B Common Stock owned by other parties.

By reason of TRSA's and ERSA's ownership of RSA, TRSA, ERSA and RSA may be deemed to constitute a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). However, RSA, TRSA and ERSA each disclaims the existence of a group.

(c)           Except as set forth in Item 6, no Reporting Person nor, to the best knowledge of the Reporting Persons, no person named in Schedules I, II and III, has effected any transaction during the past 60 days in any shares of Class A Common Stock or Class B Common Stock.

(d)           Except as set forth in this Statement, no person other than the Reporting Persons or the persons named in Schedules I, II and III has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Class A Common Stock and Class B Common Stock beneficially owned by the Reporting Persons.

(e)           Not applicable.

Item 6.   Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

A.     Investment Agreement

In connection with the consummation of the Plan, RSA made an equity investment in the Issuer equal to $240 million. In exchange for the $240 million investment, RSA received 20,652,593 shares of Class A Common Stock, 5,000,000 shares of Class B Common Stock, 75,000 shares of Class B Preferred Stock, 1,380,570 Class A-1 Warrants and 1,380,570 shares of Class A Preferred Stock.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 8 of 16 pages

In accordance with the Plan, the Investment Agreement sets forth certain covenants of the parties thereto with respect to the composition of the Issuer's Board of Directors and the voting of the shares held thereby with respect to the nomination, election and removal of directors. Pursuant to the Plan and the Investment Agreement, as of March 31, 2003, the Issuer's Board of Directors was (a) fixed at fifteen members, each with one year terms, subject to the removal provisions of the Issuer's Bylaws, of which eight (8) members were designated by RSA (each, an "RSA Director"). In the event of the death, disability, resignation or removal of an RSA Director, RSA shall designate a replacement for such director, and the Issuer shall cause such replacement to be elected to the Board. From and after March 31, 2003, the Issuer shall cause the eight RSA Directors to constitute part of the slate of nominees recommended by the Board for election as directors at each annual meeting of the stockholders. Upon (i) the sale of an aggregate of fifty percent (50%) of the number of shares of Class A Common Stock and Class B Common Stock beneficially owned by RSA and its affiliates (which includes TRSA and ERSA), as of March 31, 2003 (the "RSA Closing Shares") and (ii) the realization of RSA and its Affiliates of aggregate net cash proceeds on a cumulative basis of five hundred fifty million dollars ($550,000,000) (the "Triggering Amount") from sales of Class A Common Stock, Class B Common Stock, Class A-1 Warrants, Class A Preferred Shares and Class B Preferred Shares of the Issuer and any repayment of principal under its ATSB Loan participation; provided, that the Triggering Amount shall be increased by any amounts received by the Issuer from RSA in respect of the exercise price of any Class A-1 Warrants ((i) and (ii) taken together, the "Triggering Event"), the number of RSA Directors RSA has a right to designate for election to the Board shall be reduced to seven (7). Notwithstanding the foregoing, following the Triggering Event, the total number of RSA Directors that RSA is entitled to designate for election to the Board shall be reduced to: (i) six (6), if RSA and its Affiliates beneficially own at least 34% but less than 42% of the RSA Closing Shares; (ii) five (5), if RSA and its Affiliates beneficially own at least 26% but less than 34% of the RSA Closing Shares; (iii) four (4), if RSA and its Affiliates beneficially own at least 18% but less than 26% of the RSA Closing Shares; (iv) three (3), if RSA and its Affiliates beneficially own at least 10% but less than 18% of the RSA Closing Shares; (v) two (2) if RSA and its Affiliates beneficially own at least 2.5% but less than 10% of the RSA Closing Shares; and (v) zero (0), if RSA and its Affiliates  beneficially own less than 2.5% of the RSA Closing Shares. Following the Triggering Event, RSA and its Affiliates shall be required to either (i) sell shares of Class A Common Stock and Class B Common Stock on a proportionate basis, as determined by reference to the proportion in which RSA and its Affiliates held shares of Class A Common Stock and shares of Class B Common Stock immediately following the Triggering Event (the "Proportionate Amount") (rounded to the nearest whole number of shares of Class B Common Stock), or (ii) convert the appropriate number of shares of Class B Common Stock into shares of Class A Common Stock simultaneously with a sale of shares of Class A Common Stock, based on the Proportionate Amount. In the event that the number of RSA Directors that RSA is entitled to designate is reduced pursuant to this provision, RSA shall be entitled to designate which RSA Director shall resign from the Board. Such RSA Director shall resign from the Board no later than the thirtieth (30th) day following the day on which RSA's beneficial ownership of RSA's Closing Shares drops below the relevant thresholds set forth above. RSA's rights to designate members of the Board of Directors of the Issuer shall cease, terminate and be of no further force or effect as of September 26, 2007.

Until September 26, 2007, RSA has agreed to vote all of the shares of voting capital stock received in connection with the consummation of the Plan and then owned by it in favor of the all of the directors nominated in accordance with the Investment Agreement, which shall include the chief executive officer of the Issuer, four directors nominated by the various unions of the Issuer and its affiliates, and two directors, neither of whom is an employee or affiliate of the Issuer identified by the chief executive officer of the Issuer, at each annual meeting of the stockholders of the Issuer or at any meeting of the stockholders of the Issuer at which members of the Board of Directors of the Issuer are to be elected or whenever members of the Board of Directors are to be elected by written consent; provided, however, that following the initial election of the Board of Directors of the Issuer, these obligations shall be contingent and conditioned upon the chief executive officer of the Issuer agreeing in writing with RSA and the Issuer to vote his or her shares of capital stock received in connection with the consummation of the Plan in favor of the directors so nominated in accordance with the terms of the Investment Agreement.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 9 of 16 pages

B.      ATSB Loan

As part of its restructuring efforts, the Issuer received approval for a $900 million loan guarantee under the Air Transportation Safety And System Stabilization Act in connection with a proposed $1 billion loan financing (the "ATSB Loan"). The ATSB Loan was funded on March 31, 2003 and consists of a $1 billion term loan facility to US Airways, $900 million of which is guaranteed by the ATSB. RSA funded $75 million of the non-guaranteed portion of the ATSB Loan (the "At-Risk Portion"). In connection with RSA's partial funding of the At-Risk Portion, it received 636,249 additional Class A-1 Warrants. The ATSB Loan is secured by first priority liens on substantially all of the unencumbered present and future assets of the Issuer and certain of its affiliates. The At-Risk Portion of the ATSB Loan bears interest at LIBOR plus 4.0%. The maturity date of the ATSB Loan is October 1, 2009. In addition, the ATSB Loan requires semi-annual amortization payments commencing in October 2006, each such amortization payment to be in the amount of $125 million, with a final scheduled principal payment of $250 million due on the maturity date of the ATSB Loan.

The ATSB Loan is subject to acceleration upon the occurrence of an event of default, after expiration of applicable notice and/or cure periods, under the ATSB Loan. The ATSB Loan contains certain mandatory prepayment events including, among other things, (i) the occurrence of certain asset sales and the issuance of certain debt or equity securities and (ii) the value of the collateral pledged in respect of the ATSB Loan decreasing below specified coverage levels. The definitive documentation relating to the ATSB Loan contains covenants that require the Issuer to satisfy ongoing financial requirements, including debt ratio, fixed charge coverage and liquidity. The ATSB Loan contains covenants that also limit, among other things, the Issuer's ability to pay dividends, make additional corporate investments and acquisitions, enter into mergers and consolidations and modify certain concessions obtained as part of the Plan.

C.     Class A-1 Warrants

RSA purchased 1,380,570 Class A-1 Warrants pursuant to the Investment Agreement and received 636,249 Class A-1 Warrants in accordance with the terms of the ATSB Loan. Each Class A-1 Warrant is exercisable into one share of Class A Common Stock upon tender of the Class A-1 Warrant, a share of Class A Preferred Stock and payment of an exercise price of $7.42 per share of Class A Common Stock. The exercise price may be paid in cash, by delivery of Class B Preferred Stock valued at its redemption value, by certain cashless net exercise provisions or a combination of the foregoing. The terms of the Class A-1 Warrants provide for customary anti-dilution protection, which adjusts the exercise price and number of exercise shares upon certain events that may have a dilutive effect on the Class A-1 Warrants, such as stock splits, securities issuances or mergers. The voting power of the Class A Preferred Stock is also subject to adjustment upon any such anti-dilution adjustment so that the aggregate voting power of the Class A Preferred Stock is equal to the aggregate number of shares of Class A Common Stock into which such Class A-1 Warrants are exercisable.

D.     Registration Rights

On March 31, 2003, the Issuer entered into a Registration Rights Agreement with RSA, which, among other things, provides that the Issuer, at its own expense, agrees to use commercially reasonable efforts (i) to file a shelf registration statement covering all shares of Common Stock issued to RSA in connection with the Plan and all shares of Class A Common Stock issuable to RSA upon exercise of the Class A-1 Warrants or upon conversion of the Class B Common Stock, (ii) to cause such registration statement to be declared effective, and (iii) to keep such registration statement continuously effective until the earlier of the disposition of all Registrable Securities (as defined in the Registration Rights Agreement) and eight (8) years after the registration statement becomes effective; provided, however, that the Issuer will be permitted to suspend the filing or use of a registration statement if, and for so long as, the filing or use of such registration statement would materially and adversely interfere with a material transaction of the Issuer or require the Issuer to disclose material non-public information; provided, further, that such suspension may not exceed 60 consecutive days or 120 days, in the aggregate, during any 12-month period.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 10 of 16 pages

Starting 24 months after March 31, 2003, upon the request of a majority of the holders of the Class A-1 Warrants, the Issuer will be required to use commercially reasonable efforts to prepare and file a registration statement, at its own expense and within 90 days of such request, covering all of the Class A-1 Warrants, all of the Class A Preferred Stock and all shares of Class A Common Stock issuable upon exercise of the Class A-1 Warrants. The Issuer will also be required to use commercially reasonable efforts to cause such registration statement to become effective within 180 days of such request and to list all Class A-1 Warrants on any securities exchange, or on Nasdaq, as the case may be, on which the Class A Common Stock is then listed.

RSA, under certain circumstances, is entitled to include any of its Registrable Securities in any registration statement filed for purposes of an underwritten public offering of the Issuer's securities. Such "piggyback" registration rights are subject to customary exceptions.

E.     ATSB Undertaking

In connection with the execution and delivery of the ATSB Loan, RSA executed an undertaking for the benefit of the ATSB. RSA agreed that until April 1, 2005, it shall not Transfer (as defined in the Undertaking) any of its shares of Class A Common Stock (the "Undertaking Securities"), other than pursuant to or in connection with an Approved Transaction (as defined in the Undertaking). Notwithstanding the foregoing restrictions against Transfer set forth above, RSA may make one or more Transfers of Undertaking Securities, provided that the aggregate number of Undertaking Securities subject to such Transfers shall in no event exceed 6,195,778 shares of Class A Common Stock, which shares represent 30% of the Undertaking Securities and shall be adjusted for stock splits, reverse stock splits and other similar actions.

RSA also agreed that for so long as it holds any shares of Class B Common Stock, it will not, directly or indirectly, in any manner effect or seek, offer or propose to effect, or cause or participate in or in any way assist any other person to effect or seek, offer or propose to effect or participate in (i) any acquisition of all or substantially all of the assets of the Issuer, (ii) any tender or exchange offer, merger or other business combination involving the Issuer, or (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Issuer, in any of the foregoing cases where the transaction provides or would provide for disparate consideration or economic rights between the holders of the Class A Common Stock and the Class B Common Stock. This provision shall terminate in certain circumstances, as more fully described in the Undertaking.

F.     Stockholder Agreement

On August 14, 2003, RSA entered into a Stockholder Agreement (the "Stockholder Agreement") with Aviation Acquisition, L.L.C., Farallon Capital Partners, L.P., Farallon Capital Institutional Partners L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Tinicum Partners, L.P., and OCM Principal Opportunities Fund II, L.P. (collectively, the "Stockholders") in connection with the agreement by the Stockholders to purchase shares of Class A Common Stock from the Issuer. Pursuant to the terms of the Stockholder Agreement, the stockholders have certain rights to participate in a sale of securities of the Issuer by RSA to a third party, subject to the exceptions set forth in the Stockholder Agreement.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 11 of 16 pages

Item 7.   Materials to be Filed as Exhibits

Exhibit No.

 Description

1

Joint Filing Agreement dated August 25, 2003 among Retirement Systems of Alabama Holdings LLC, The Teachers' Retirement System of Alabama, and The Employees' Retirement System of Alabama

2

Investment Agreement, dated as of September 26, 2002, by and between the Retirement Systems of Alabama and US Airways Group, Inc. (incorporated by reference to Exhibit 10.1 of US Airways Group, Inc.'s Quarterly Report on Form 10-Q for the three months ended September 30, 2002)

3

Amendment No. 1 to the Investment Agreement, dated as of January 17, 2003, by and among US Airways Group, Inc. the Retirement Systems of Alabama and Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 10.37 of US Airways Group, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2002)

4

Amendment No. 2 to the Investment Agreement, dated as of March 30, 2003, by and among US Airways Group, Inc., Retirement Systems of Alabama and Retirement Systems of Alabama Holdings LLC

5

Loan Agreement dated March 31, 2003 by and among US Airways, Inc., US Airways Group, Inc., the several lenders from time to time party thereto, Phoenix American Financial Services, Inc., Bank of America, N.A. and the Air Transportation Stabilization Board (incorporated by reference to Exhibit 10.5 of  US Airways, Inc.'s, a wholly-owned subsidiary of US Airways Group, Inc., Quarterly Report on Form 10-Q for the three months ended March 31, 2003)

6

US Airways Group, Inc. Class A-1 Warrant to purchase shares of Class A Common Stock, dated March 31, 2003, issued to Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 4.3 of US Airways Group, Inc.'s Registration Statement on Form 8-A filed on May 14, 2003)

7

US Airways Group, Inc. Class A-1 Warrant to purchase shares of Class A Common Stock, dated March 31, 2003, issued to Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 4.4 of US Airways Group, Inc.'s Registration Statement on Form 8-A filed on May 14, 2003)

8

Registration Rights Agreement made and entered into as of March 31, 2003 by and between US Airways Group, Inc. and Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 10.1 of US Airways Group, Inc.'s Registration Statement on Form 8-A filed on May 14, 2003)

9

Undertaking by US Airways Group, Inc. and the Retirement Systems of Alabama Holdings LLC for the benefit of the Air Transportation Stabilization Board, dated as of March 31, 2003

10

Stockholder Agreement dated as of August 14, 2003 by and among Retirement Systems of Alabama Holdings LLC, Aviation Acquisition, L.L.C., Farallon Capital Partners, L.P., Farallon Capital Institutional Partners L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Tinicum Partners, L.P., and OCM Principal Opportunities Fund II, L.P.
 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 12 of 16 pages

SIGNATURE

After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this Statement is true, complete and correct.

Dated: August 25, 2003

RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC

By:     /s/  David G. Bronner                                             

Name: David G. Bronner
Title:   Manager

THE TEACHERS' RETIREMENT SYSTEM OF ALABAMA

By:     /s/  David G. Bronner                                             

Name: David G. Bronner
Title:   Chief Executive Officer

THE EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA

By:     /s/  David G. Bronner                                             

Name: David G. Bronner
Title:   Chief Executive Officer

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 13 of 16 pages

EXHIBIT INDEX

Exhibit No.

Description

1

Joint Filing Agreement dated August 25, 2003 among Retirement Systems of Alabama Holdings LLC, The Teachers' Retirement System of Alabama, and The Employees' Retirement System of Alabama

2

Investment Agreement, dated as of September 26, 2002, by and between the Retirement Systems of Alabama and US Airways Group, Inc. (incorporated by reference to Exhibit 10.1 of US Airways Group, Inc.'s Quarterly Report on Form 10-Q for the three months ended September 30, 2002)

3

Amendment No. 1 to the Investment Agreement, dated as of January 17, 2003, by and among US Airways Group, Inc. the Retirement Systems of Alabama and Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 10.37 of US Airways Group, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 31, 2002)

4

Amendment No. 2 to the Investment Agreement, dated as of March 30, 2003, by and among US Airways Group, Inc., Retirement Systems of Alabama and Retirement Systems of Alabama Holdings LLC

5

Loan Agreement dated March 31, 2003 by and among US Airways, Inc., US Airways Group, Inc., the several lenders from time to time party thereto, Phoenix American Financial Services, Inc., Bank of America, N.A. and the Air Transportation Stabilization Board (incorporated by reference to Exhibit 10.5 of US Airways, Inc.'s, a wholly-owned subsidiary of US Airways Group, Inc., Quarterly Report on Form 10-Q for the three months ended March 31, 2003)

6

US Airways Group, Inc. Class A-1 Warrant to purchase shares of Class A Common Stock, dated March 31, 2003, issued to Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 4.3 of US Airways Group, Inc.'s Registration Statement on Form 8-A filed on May 14, 2003)

7

US Airways Group, Inc. Class A-1 Warrant to purchase shares of Class A Common Stock, dated March 31, 2003, issued to Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 4.4 of US Airways Group, Inc.'s Registration Statement on Form 8-A filed on May 14, 2003)

8

Registration Rights Agreement made and entered into as of March 31, 2003 by and between US Airways Group, Inc. and Retirement Systems of Alabama Holdings LLC (incorporated by reference to Exhibit 10.1 of US Airways Group, Inc.'s Registration Statement on Form 8-A filed on May 14, 2003)

9

Undertaking by US Airways Group, Inc. and the Retirement Systems of Alabama Holdings LLC for the benefit of the Air Transportation Stabilization Board, dated as of March 31, 2003

10

Stockholder Agreement dated as of August 14, 2003 by and among Retirement Systems of Alabama Holdings LLC, Aviation Acquisition, L.L.C., Farallon Capital Partners, L.P., Farallon Capital Institutional Partners L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Tinicum Partners, L.P., and OCM Principal Opportunities Fund II, L.P.
 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 14 of 16 pages

SCHEDULE I

Executive Officers and Directors of RSA.

Name and Title

Business Address

Principal Occupation or Employment, Name of Organization

Citizenship

Dr. David G. Bronner, Manager

135 South Union Street
Montgomery, Alabama 36104

Chief Executive Officer,
Teachers' Retirement System of Alabama

Chief Executive Officer,
Employees' Retirement System of Alabama

U.S.

William Stephens, Esq.,
Secretary

135 South Union Street
Montgomery, Alabama 36104

General Counsel,
Teachers' Retirement System of Alabama

General Counsel,
Employees' Retirement System of Alabama

U.S.

 

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 15 of 16 pages

SCHEDULE II

Executive Officers and Directors of TRSA.

Name and Title

Business Address

Principal Occupation or Employment, Name of Organization

Citizenship

Dr. David G. Bronner, Chief Executive Officer

135 South Union Street
Montgomery, AL 36104

Chief Executive Officer,
Teachers' Retirement System of Alabama

Executive Officer,
Employees' Retirement System of Alabama

U.S.

Dr. Paul R. Hubbert,
Chairman of the Board of Control

Alabama Education Association
422 Dexter Avenue
Montgomery, AL 36104

Executive Secretary
Alabama Education Association

U.S.

Drayton Nabers, Jr.,
Member of the Board of Control

P.O. Box 302600
Montgomery, AL 36130

Finance Director
State of Alabama

U.S.

Kay Ivey,
Member of the Board of Control

P.O. Box 302510
Montgomery, AL 36130

State Treasurer
State of Alabama

U.S.

Dr. Ed Richardson,
Member of the Board of Control

P.O. Box 302101
Montgomery, AL 36130

State Superintendent of Education
State of Alabama

U.S.

Dr. Susan Williams Brown,
Member of the Board of Control

P.O. Box 4244
Gadsden, AL 35904

Teacher

U.S.

Martha Black Handschumacher,
Member of the Board of Control

1931 Hickory Hill Drive
Arab, AL 35016

Teacher

U.S.

Dr. J. Terry Jenkins,
Member of the Board of Control

Auburn City Schools
P.O. Box 3270
Auburn, AL 36831

Superintendent of Schools
Auburn City Schools

U.S.

Peggy Lamb,
Member of the Board of Control

555 Cave Springs Road
Decatur, AL 35603

Teacher

U.S.

Dr. John Landers,
Member of the Board of Control

P.O. Box 115
Leighton, AL 35646

Principal

U.S.

Sharon Pickett Saxon,
Member of the Board of Control

Fairfield City Board of Education
6405 Avenue D
Fairfield, AL 35064

Teacher

U.S.

Sarah Swindle,
Vice Chairman of the Board of Control

1811 Paulette Drive
Birmingham, AL 35226

Retired

U.S.

Dr. Wayne Teague,
Member of the Board of Control

65 Briarwood Point
Dadeville, AL 36853

Retired

U.S.

Russell J. Twilly,
Member of the Board of Control

P.O. Box 1373
Jasper, AL 35502

Teacher

U.S.

Judy Rigdon,
Member of the Board of Control

2501 Wentworth Drive
Montgomery, AL 36106

Teacher

U.S.

 
CUSIP No. 911905 50 3 (Class A Common Stock)
                   911905 60 2 (Class B Common Stock)

 13D  

 Page 16 of 16 pages

SCHEDULE III

Executive Officers and Directors of ERSA.

Name and Title

Business Address

Principal Occupation or Employment, Name of Organization

Citizenship

Dr. David G. Bronner, Manager

135 South Union Street
Montgomery, AL 36104

Chief Executive Officer,
Teachers' Retirement System of Alabama

Executive Officer,
Employees' Retirement System of Alabama

U.S.

Governor Bob Riley,
Member of the Board of Control

c/o Governor's Office
P.O. Box 302751
Montgomery, AL 36130

Governor
State of Alabama

U.S.

Kay Ivey,
Member of the Board of Control

P.O. Box 302510
Montgomery, AL 36130

State Treasurer
State of Alabama

U.S.

Drayton Nabers, Jr.,
Member of the Board of Control

P.O. Box 302600
Montgomery, AL 36130

Finance Director
State of Alabama

U.S.

Thomas G. Flowers,
Member of the Board of Control

c/o State Personnel Department
P.O. Box 304100
Montgomery, AL 36130

Personnel Director
State of Alabama

U.S.

Mary Lou Foster,
Member of the Board of Control

308 Tecumseh Court
Montgomery, AL 36117

Retired

U.S.

Ann Grant,
Member of the Board of Control

801 Gant Hill Road
Scottsboro, AL 35769

Municipal Employee

U.S.

Rusty Miller,
Member of the Board of Control

863 Driggers Road
Lineville, AL 36266

State Employee

U.S.

Robert Pruit,
Member of the Board of Control

7601 Deer Ridge Court
Montgomery, AL 36117

State Employee

U.S.

Clyde A. Sellers,
Member of the Board of Control

21638 Olan Circle
McCalla, AL 35111

Retired

U.S.

 

 EX-1 3 rsaexhibit1.htm JOINT FILING AGREEMENT Exhibit 1

Exhibit 1

JOINT FILING AGREEMENT

Dated as of August 25, 2003

 

In accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing of Retirement Systems of Alabama Holdings LLC, The Teachers' Retirement System of Alabama and The Employees' Retirement System of Alabama on behalf of each of them a statement on Schedule 13D (including amendments thereto) with respect to shares of Class A Common Stock, par value $1.00 and Class B Common Stock, par value $1.00, of US Airways Group, Inc. and that this Agreement be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 25th day of August, 2003.

 

RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC

By:     /s/  David G. Bronner                                             

Name: David G. Bronner
Title:   Manager

THE TEACHERS' RETIREMENT SYSTEM OF ALABAMA

By:     /s/  David G. Bronner                                             

Name: David G. Bronner
Title:   Chief Executive Officer

THE EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA

By:     /s/  David G. Bronner                                             

Name: David G. Bronner
Title:   Chief Executive Officer
EX-4 4 rsaexhibit4.htm AMDMT. 2 TO INVESTMENT AGREEMENT EXHIBIT 4

EXHIBIT 4

            AMENDMENT NO. 2 ("Amendment"), dated as of March 30, 2003, to the INVESTMENT AGREEMENT dated as of September 26, 2002 by and between The Retirement Systems of Alabama ("RSA") and US Airways Group, Inc., a Delaware corporation (the "Company"), as amended by that certain Amendment NO. 1 dated as of January 17, 2003 by and among RSA, the Company and Retirement Systems of Alabama Holdings LLC ("RSA LLC") (together, the "Agreement"), by and among the Company, RSA, and RSA LLC.

            The Company, RSA and RSA LLC desire to amend the Agreement pursuant to Section 10.06 thereof as hereinafter set forth. All capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Agreement.

            NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.         Amendments to Agreement.  Effective upon the execution and delivery of this Amendment NO. 2, the Agreement is hereby amended as follows:

            a.         Section 5.01(g) of the Agreement shall be amended by changing "ATSB "at-risk" loan participation" to "participation in the ATSB Loan" in the first sentence of such Section 5.01(g).

            b.         Section 5.01(h) of the Agreement shall be deleted in its entirety and replaced with the following:

"(h)      During the term of this Article V, the Investor agrees to vote all of the shares of voting capital stock, including, without limitation, all voting capital stock received upon the exercise, exchange or conversion of any warrants or other convertible securities, in each case received in connection with the consummation of the Plan (including transactions that are a condition thereto) and then owned by it in favor of the directors nominated in accordance with Section 5.01(d) of this Agreement at each annual meeting of the stockholders of the Company or at any meeting of the stockholders of the Company at which members of the Board of Directors of the Company are to be elected or whenever members of the Board of Directors are to be elected by written consent; provided, however, that following the initial election of the Board of Directors of the Company on the Effective Date, the obligations set forth in this Section 5.01(h) shall be contingent and conditioned upon the CEO agreeing in writing with the Investor and the Company to vote his shares of voting capital stock acquired (i) pursuant to the Plan or (ii) pursuant to the terms of any management compensation plan or other incentive plan adopted by the Company, including, without limitation, all voting capital stock received upon the exercise, exchange or conversion of any warrants or other convertible securities acquired (A) pursuant to the Plan or (B) on or after the date hereof pursuant to the terms of any management compensation plan or other incentive plan adopted by the Company, in favor of the directors so nominated in accordance with Section 5.01(d)."

2.          No Other Amendments.  Except as expressly amended, modified and supplemented hereby, the provisions of the Agreement are and will remain in full force and effect and, except as expressly provided herein, nothing in this Amendment will be construed as a waiver of any of the rights or obligations of the parties under the Agreement.

 

 

3.          Governing Law.  To the extent not governed by the Bankruptcy Code, this Amendment shall be governed by, and interpreted in accordance with, the Laws of the State of New York applicable to contracts made and to be performed in that State without reference to its conflict of laws rules.

4.          Descriptive Headings.  Descriptive headings are for convenience only and will not control or affect the meaning or construction of any provisions of this Amendment.

5.          Counterparts.  This Amendment may be executed in any number of identical counterparts, each of which will constitute an original but all of which when taken together will constitute but one instrument.

6.          Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the Company's, RSA's and RSA LLC's successors and assigns.

7.          Severability.  In the event one or more of the provisions of this Amendment should, 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 Amendment, and this Amendment shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

* * * *

-2-

 

            IN WITNESS WHEREOF, the Parties hereto have caused this Amendment No. 2 to the Investment Agreement to be executed and delivered by their duly authorized representatives on the date first above written.
  THE RETIREMENT SYSTEMS OF ALABAMA
   

By: /s/ William T. Stephens
     Name: William T. Stephens
     Title:     Secretary
   
  US AIRWAYS GROUP, INC.
   

By: /s/ Neal S. Cohen
     Name:  Neal S. Cohen
     Title:     Executive Vice President-Finance
                   and Chief Financial Officer
   
  RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC
   

By: /s/ William T. Stephens
     Name: William T. Stephens
     Title:     Secretary

 

 

-3-

 EX-9 5 rsaexhibit9.htm UNDERTAKING EXHIBIT 9

EXHIBIT 9

UNDERTAKING

            This Undertaking (the "Undertaking") is made and entered into as of the 31st day of March 2003 by US Airways Group, Inc., a Delaware corporation (the "Company") and the Retirement Systems of Alabama Holdings LLC ("RSA"), for the benefit of the Air Transportation Stabilization Board (the "ATSB").

RECITALS

            WHEREAS, RSA is the beneficial owner of 20,652,593 shares of the Class A Common Stock, $1.00 par value per share (the "Class A Common"), of the Company (all of such securities beneficially owned by RSA on the date hereof being referred to herein as, the "Undertaking Securities");

            WHEREAS, the ATSB is entering into a Loan Agreement with the Company, U.S. Airways, Inc., a Delaware corporation, the subsidiary guarantors party thereto from time to time, the lenders party thereto from time to time, Phoenix American Financial Services, Inc. as Loan Administrator, and Bank of America, N.A. as Agent, KHFC Administrative Agent and Collateral Agent (the "Loan Agreement"; capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement) and a Guarantee Agreement (the "Guarantee"), each of even date herewith for the benefit of the Company's subsidiary US Airways, Inc.;

            WHEREAS, the Company is issuing to the ATSB that certain Class A-1 Warrant of even date herewith (the "Warrant") to purchase seven million six hundred thirty five thousand (7,635,000) shares (as adjusted pursuant to the terms of the Warrant, the "Warrant Shares") of Class A Common; and

            WHEREAS, the ATSB has required the execution and delivery of this Undertaking as a condition to entering into the Loan Agreement and the Guarantee.

            NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.         REPRESENTATIONS.

            1.1    The Company represents and warrants that:

            (i)      immediately after giving effect to the Consummation of the Plan, the execution, delivery and performance of this Undertaking and the consummation of the transactions contemplated hereby:  (a) have been duly authorized by all necessary corporate action on the part of the Company; (b) do not and will not violate the articles of incorporation or the by-laws of the Company or any law or any governmental rule or regulation applicable to the Company or order, judgment or decree of any court or other agency of government binding on the Company; (c) do not and will not conflict with or constitute a breach of, or (with due notice or lapse of time or both) default under any Contractual Obligation of the Company, except for such conflict, breach or default that could not reasonably be expected to have a Material Adverse Effect; and (d) do not and will not result in the creation or imposition of any Lien upon any of the properties or assets of the Company;

            (ii)     the execution, delivery and performance of this Undertaking and the consummation of the transactions contemplated hereby do not and will not require any registration with, authorization, approval, consent or order, or notice to, or other action to, with or by, any federal, state or other Governmental Authority or regulatory body or any other Person which is required to be obtained or made prior to the date hereof and which has not previously been obtained or made; and

 

 

            (iii)    immediately after giving effect to the Consummation of the Plan, this Undertaking constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting enforcement of rights of creditors generally, including materiality, reasonableness, good faith and fair dealing, and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

            1.2     RSA represents and warrants that:

            (i)       it is the sole legal and beneficial owner (which for purposes of this Undertaking shall have the meaning provided in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of the Undertaking Securities, free and clear of any and all liens, claims, charges, encumbrances, security interests, options, voting agreements (other than as provided in that certain Investment Agreement, dated as of September 26, 2002 by and between the Company and the Retirement Systems of Alabama, as amended by that certain Amendment No. 1, dated as of January 17, 2003 by and among the Retirement Systems of Alabama, RSA and the Company, as amended by that certain Amendment No. 2, dated March 30, 2003, by and among the Retirement Systems of Alabama, RSA and the Company (as amended, the "Investment Agreement")), or other agreements (including agreements restricting Transfer (as hereinafter defined)) of any kind or nature whatsoever, and, except for the Undertaking Securities, RSA does not beneficially own any other shares of Class A Common of the Company (other than the shares of Class A Common issuable upon exercise of 2,016,819 Class A-1 Warrants of the Company and upon conversion of 5,000,000 shares of Class B Common Stock, $1.00 par value per share, of the Company ("Class B Common"));

            (ii)      the execution, delivery and performance of this Undertaking and the consummation of the transactions contemplated hereby: (a) have been duly authorized by all necessary action on the part of RSA; (b) do not violate the constituent documents of RSA or any law or any governmental rule or regulation applicable to RSA or order, judgment or decree of any court or other agency of government binding on RSA; (c) do not conflict with or constitute a breach of, or (with due notice or lapse of time or both) default under any Contractual Obligation of RSA; (d) do not result in the creation or imposition of any Lien upon any of the properties or assets of RSA; and (e) do not require any registration with, authorization, approval, consent or order, or notice to, or other action to, with or by, any federal, state or other Governmental Authority or regulatory body or any other Person which is required to be obtained or made prior to the date hereof and which has not previously been obtained or made; and

            (iii)      this Undertaking constitutes a valid and binding obligation of RSA, enforceable against RSA in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to or affecting enforcement of rights of creditors generally, including materiality, reasonableness, good faith and fair dealing, and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

- 2 -

 

2.         RESTRICTIONS AGAINST TRANSFER.

            Subject to Section 4 hereof, until April 1, 2005, RSA shall not, directly or indirectly, offer, sell, assign, transfer, offer to sell, assign or transfer, contract to sell, assign or transfer, pledge or otherwise encumber, grant any option, right or warrant to purchase, grant any rights with respect to, including, but not limited to, the right to vote, grant any interest in or otherwise dispose of, or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) or in any other way reduce RSA's risk of ownership or investment in any of the Undertaking Securities (any of the foregoing hereinafter referred to as a "Transfer"), other than pursuant to or in connection with a transaction or a series of related transactions (an "Approved Transaction") in which the holders of all outstanding shares of Class A Common (including any shares of Class A Common issuable upon exercise of the outstanding Class A-1 Warrants of the Company) are offered the opportunity to participate with respect to all of their shares of Class A Common in such transaction or series of related transactions and the holders (excluding, however, RSA and its affiliates) of greater than sixty-six and two-thirds percent (66⅔%) of the Company's Class A Common (including any shares of Class A Common issuable upon exercise of the outstanding Class A-1 Warrants of the Company) then outstanding (excluding, however, shares held by RSA and its affiliates) have either (a) voted in favor of such transaction or series of related transactions or (b) tendered their shares of Class A Common for sale in such transaction or series of related transactions. The closing of any transaction or series of related transactions shall be simultaneous for the Undertaking Securities and any shares of Class A Common.

            RSA agrees that the Company may instruct its transfer agent to impose Transfer restrictions on the Undertaking Securities to enforce the provisions of this Undertaking.

3.         AGREEMENT OF THE COMPANY.

            (i)      During the Transfer restriction period set forth in Section 2 hereof, if requested by the ATSB, the Company agrees to take commercially reasonable actions to prohibit any Transfer of the Undertaking Securities by RSA on the Company's stock transfer books which does not comply with the provisions of Sections 2 and 4 hereof.

            (ii)     During the Transfer restriction period set forth in Section 2 hereof, if requested by the ATSB, the Company shall use commercially reasonable efforts to impose Transfer restrictions on the Undertaking Securities to enforce the provisions of this Undertaking. Any such Transfer restriction shall be removed after the termination of the effectiveness of Section 2 hereof.

            (iii)    Until September 26, 2007, the Company agrees to comply with the provisions of Sections 5.01 and 5.02 of the Investment Agreement and to enforce its rights thereunder. The Company shall not agree to any waiver or amendment of said terms which waiver or amendment is in any way favorable to RSA without the prior written consent of the ATSB, which consent shall not be unreasonably withheld or delayed.

4.         EXEMPT TRANSFERS.

            Notwithstanding the foregoing restrictions against Transfer set forth in Section 2 above, RSA may make one or more Transfers of Undertaking Securities, provided that the aggregate number of Undertaking Securities subject to such Transfers shall in no event exceed 6,195,778 shares of Class A Common constituting Undertaking Securities, which represent 30% of the Undertaking Securities and shall be adjusted for stock splits, reverse stock splits and other similar actions.

- 3 -

 

5.         AGREEMENT OF RSA.

            RSA agrees that for so long as it holds any shares of Class B Common, RSA will not, directly or indirectly, in any manner, with respect to the shares of any of the capital stock of the Company over which RSA holds sole or shared power, directly or indirectly, to vote or direct the vote, vote in favor of or consent to (or cause or permit to be voted in favor of or consented to) (i) any acquisition of all or substantially all of the assets of the Company, (ii) any tender or exchange offer, merger or other business combination involving the Company, or (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company, in any of the foregoing cases where the transaction provides or would provide for disparate consideration or economic rights between the holders of the Class A Common and the Class B Common. RSA shall cease to be subject to the restrictions set forth in this Section 5 if the Company effects one or more underwritten public offerings and as a result thereof, RSA's total voting power with respect to all of the shares of the capital stock of the Company with respect to which RSA holds sole or shared power, directly or indirectly, to vote or direct the vote is less than 50% of the aggregate voting power of all of the capital stock of the Company then outstanding entitled generally to vote in the election of directors of the Company. In addition, RSA shall cease to be subject to the restrictions set forth in this Section 5 in the event that the ATSB or any governmental entity or instrumentality which is a successor or assignee of the ATSB (or any trust established for the benefit of the ATSB or any such successor or assignee) ceases to beneficially own (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) any capital stock of the Company or any securities into which the capital stock of the Company is changed or reclassified into or exchanged for as a result of any reclassification, reorganization, merger, consolidation or other transaction.

6.         MISCELLANEOUS.

            6.1       Governing Law.  This Undertaking shall be governed by and construed under the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York, provided that the rights of the ATSB hereunder shall be governed and construed in accordance with Federal law, if and to the extent such Federal law is applicable, and otherwise in accordance with the laws of the State of New York.

            6.2       Amendment and Waiver.  Any provision of this Undertaking may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), or this Undertaking terminated only by the written consent of the parties hereto (and their respective successors and assigns). To the extent that any of the Undertaking Securities are changed or reclassified into, or exchanged for other shares of the Company or any other issuer as a result of any reclassification, reorganization, merger, consolidation or other transaction, RSA shall continue to be subject to the terms and provisions of this Undertaking with respect to such other shares and this Undertaking shall continue in full force and effect.

            6.3      Entire Agreement.  This Undertaking constitutes the entire agreement between the parties relative to the specific subject matter hereof. Any previous agreement among the parties relative to the specific subject matter hereof is superseded by this Undertaking.

            6.4      Successors.  This Undertaking and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon the parties hereto and their respective permitted successors, assigns and legal representatives.

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            6.5      Third Party Beneficiaries.  None of the provisions of this Undertaking is intended to provide any rights or remedies to any person or entity other than the ATSB and its successors, assigns and legal representatives.

            6.6      Notices.  All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the address as set forth on the signature pages hereto or at such other address as such party may designate by ten (10) days advance written notice to the other parties hereto.

            6.7      Severability.  In the event one or more of the provisions of this Undertaking should, 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 Undertaking, and this Undertaking shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

            6.8      Specific Performance.  The parties agree that, to the extent permitted by law, (i) the obligations imposed on them in this Undertaking are special, unique and of an extraordinary character, and that in the event of a breach by any such party, damages would not be an adequate remedy; and (ii) each of the other parties shall be entitled to specific performance and injunctive and other equitable relief in addition to any other remedy to which it may be entitled at law or in equity.

            6.9      Counterparts.  This Undertaking may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

            6.10      Term.  The provisions of Sections 2 and 3 of this Undertaking shall terminate upon the earlier to occur of (i) the effectiveness of an Approved Transaction or (ii) the date that the Company and its subsidiaries shall have fully discharged all of their payment and other obligations pursuant to the Loan Agreement.

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            The foregoing UNDERTAKING is hereby executed as of the date first above written.

U.S. AIRWAYS GROUP, INC.

By:     /s/ Neal S. Cohen            

Name:      Neal S. Cohen            

Title:        Executive Vice President-Finance and Chief Financial Officer

Address: 2345 Crystal Drive
                 Arlington, Virginia 22227

RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC

By: /s/ William T. Stephens      

Name: William T. Stephens      

Title:                                             

Address: 135 South Union Street
                 Montgomery, Alabama 36104

ACKNOWLEDGED TO AND AGREED BY:

AIR TRANSPORTATION STABILIZATION BOARD

By: /s/ Daniel G. Montgomery    

Name: Daniel G. Montgomery    

Title:                                               

Address: 1120 Vermont Avenue, Suite 970
                 Washington, D.C. 20005

With a copy to:
                 United States Department of the Treasury
                 1500 Pennsylvania Avenue, N.W.
                 Washington, D.C. 20220
                 Attn: Deputy Assistant Secretary (Government Financial Policy

[Undertaking Signature Page]

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 EX-10 6 rsaexhibit10.htm STOCKHOLDER AGREEMENT EXHIBIT 10

EXHIBIT 10

EXECUTION COPY

STOCKHOLDER AGREEMENT (this "Agreement") dated as of August 14, 2003, between RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC, a Delaware limited liability company (together with any RSA Permitted Transferees, "RSA"), and the other parties set forth on the signature pages hereto (collectively and together with any transferees thereof, the "Stockholders").

WHEREAS Aviation Acquisition, L.L.C., a Delaware limited liability company ("Aviation"), OCM Principal Opportunities Fund II, L.P., a Delaware limited partnership (together with any transferees thereof, "OCM" and, together with Aviation, the "Purchasers"), and US Airways Group, Inc., a Delaware corporation (the "Company"), propose to enter into an Investment Agreement dated as of the date hereof (as the same may be amended or supplemented, the "Investment Agreement") providing for the acquisition by the Purchasers of up to 5,007,148 shares of class A common stock, par value $1.00 per share (the "Class A Common Stock") of the Company;

WHEREAS upon consummation of the transactions contemplated by the Investment Agreement, Aviation may transfer all or a portion of the Class A Common Stock acquired by it to its limited liability company members party hereto (collectively with Aviation and together with any transferees thereof, the "Farallon Stockholders"); and

WHEREAS, as a condition to the Purchasers' willingness to enter into the Investment Agreement, the Stockholders have requested that RSA enter into this Agreement,

NOW, THEREFORE, the parties hereto agree as set forth below.

ARTICLE I

Definitions

"Affiliate" shall mean, with respect to any party, any person that directly or indirectly, though one or more intermediaries, controls, is controlled by, or is under common control with, such party; provided, however, that for purposes of the definition of RSA Permitted Transferee in Section 3.09(a)(i) of this Agreement, the term "Affiliate" shall not include the Company or any of its subsidiaries.

"Agreement" shall have the meaning set forth in the preamble.

"Aviation" shall have the meaning set forth in the premises.

"Change of Control" shall mean, with respect to the Company, (a) the acquisition, directly or indirectly, at any time by any person or group (within the meaning of Section 13(d)), other than RSA or an RSA Permitted Transferee, of "beneficial ownership" (within the meaning of Section 13(d)) of Securities with voting power in excess of the total voting power of the Securities to be "beneficially owned" by RSA and the RSA Permitted Transferees after giving effect to such acquisition, whether such acquisition results from a Transfer, merger, consolidation, reorganization, recapitalization, sale of assets or similar transaction; (b) if a majority of the board of directors of the Company shall no longer be composed of individuals (i) who were members of such board on the date hereof, (ii) whose election or nomination to such board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of such board, (iii) whose election or nomination to such board was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of such board or (iv) in the case of individuals nominated by RSA in accordance with the Investment Agreement dated as of September 26, 2002, between RSA and the Company, as amended by Amendment No. 1 dated as of January 17, 2003 and Amendment No. 2 dated as of March 30, 2003, who were nominated or proposed by RSA; or (c) a Transfer of Securities (other than to RSA and/or an RSA Permitted Transferee) causing the transferee of such Securities to have the ability (whether through the ownership of voting securities or otherwise) to designate a majority of the Company's directors.

 

"Class A Common Stock" shall have the meaning set forth in the premises.

"Class A Preferred Stock" shall mean the class A preferred stock, par value $0.0001 per share, of the Company.

"Class B Common Stock" shall mean the class B common stock, par value $1.00 per share, of the Company.

"Class B Preferred Stock" shall mean the class B preferred stock, par value $1000 per share, of the Company.

"Company" shall have the meaning set forth in the premises.

"Farallon Stockholders" shall have the meaning set forth in the premises.

"Investment Agreement" shall have the meaning set forth in the premises.

"Market Transfer" shall mean any Transfer of Securities (a) through a public securities market in a "brokers' transaction" or in transactions directly with a "market maker" (each such term within the meaning of Rule 144 promulgated under the Securities Act), (b) with respect to which neither RSA nor any of its Affiliates has entered into any agreement with the purchaser of such Securities regarding such Transfer or solicited or arranged for the solicitation of orders to buy the Securities in anticipation of or in connection with such Transfer, (c) with respect to which neither RSA nor any of its Affiliates has made any payment in connection with the offer or sale of the Securities to any person other than the broker who executes the order to sell the Securities and (d) as of result of which no person or group (within the meaning of Section 13(d)) acquires Securities representing, in the aggregate, an amount equal to or greater than the RSA Threshold. Notwithstanding the foregoing, a Market Transfer shall also include a public offering or distribution pursuant to registered offering under the Securities Act; provided, however, that as a result of such offering or distribution, no person or group (within the meaning of Section 13(d)) acquires Securities representing, in the aggregate, an amount equal to or greater than the RSA Threshold.

"OCM" shall have the meaning set forth in the premises.

"Permitted Transfer" shall have the meaning set forth in Section 3.09(a)(i).

"Proposed Purchaser" shall have the meaning set forth in Section 2.02(a).

"Purchasers" shall have the meaning set forth in the premises.

"RSA" shall have the meaning set forth in the preamble.

"RSA Permitted Transferee" shall have the meaning set forth in Section 3.09(a)(i).

"RSA Threshold" shall have the meaning set forth in Section 2.02(a).

"Section 13(d)" shall mean Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

"Securities" shall have the meaning set forth in Section 2.01(a).

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"Securities Act" shall mean the Securities Act of 1933.

"Stockholders" shall have the meaning set forth in the preamble.

"Tag-Along Notice" shall have the meaning set forth in Section 2.02(c).

"Tag-Along Sale" shall have the meaning set forth in Section 2.02(a).

"Tag-Along Sale Date" shall have the meaning set forth in Section 2.02(b).

"Tag-Along Sale Notice" shall have the meaning set forth in Section 2.02(b).

"Tag-Along Securities" shall mean, with respect to any proposed Transfer (other than a Permitted Transfer) of Class A Common Stock, Class B Common Stock, Class B Preferred Stock or Warrants, the number of shares of Class A Common Stock equal to the product of (a) the total number of shares of Class A Common Stock held by the Stockholders and acquired pursuant to the Investment Agreement and (b) a fraction, the numerator of which is the number of shares of Class A Common Stock, Class B Common Stock, Class B Preferred Stock and Warrants proposed to be sold by RSA and the denominator of which is the aggregate number of outstanding shares of Class A Common Stock of the Company, in each case hereunder determined on a fully diluted basis assuming the conversion of all convertible securities, including the Class B Common Stock, of the Company and exercise or exchange of all options, warrants or other rights to purchase Class A Common Stock of the Company, plus, to the extent the proposed Transfer includes Class B Preferred Stock, the aggregate number of outstanding shares of Class B Preferred Stock.

"Transfer" shall have the meaning set forth in Section 2.01(a).

"Warrants" shall mean the class A-1 warrants of the Company.

ARTICLE II

Restrictions on Transfer; Tag-Along Rights

SECTION 2.01.    Restrictions on Transfer.   (a)  The direct or indirect sale, transfer, offer, assignment, pledge, exchange, mortgage, hypothecation or other disposal (collectively, "Transfer") by RSA of any capital stock of the Company, including any Class A Common Stock, Class B Common Stock, Warrants, Class A Preferred Stock or Class B Preferred Stock, held by RSA (collectively, the "Securities") shall be subject to the conditions specified in this Article II.

(b)      Each certificate representing Securities held by RSA shall be stamped or otherwise imprinted with a legend, and each Security held by RSA in book-entry form through an account at The Depository Trust Company shall contain a notation, substantially in the following form (in addition to any legend required under applicable state or Federal securities laws):

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT, DATED AS OF AUGUST 14, 2003, BY AND AMONG RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC AND CERTAIN OTHER STOCKHOLDERS OF US AIRWAYS GROUP, INC. PARTIES THERETO, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF US AIRWAYS GROUP, INC."

At such time as this Agreement shall no longer be operative or enforceable against RSA (or its successors, transferees or assigns), such legend or notation shall, at the request of RSA, be removed and, if the Securities are held in certificated form, certificates not bearing such legend shall be issued in replacement therefor.

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SECTION 2.02.    Tag-Along Rights.  (a)  If RSA proposes to Transfer (a "Tag-Along Sale") in any transaction or series of related transactions, other than a Market Transfer, Securities representing, in the aggregate, either (i) 25% or more in the aggregate of the outstanding Class A Common Stock (including for this purpose all Class A Common Stock issuable upon exercise of outstanding Warrants) and Class B Common Stock of the Company or (ii) 25% or more of the outstanding voting rights of capital stock of the Company (the "RSA Threshold"), to one or more third parties who are not RSA Permitted Transferees (a "Proposed Purchaser"), then RSA shall notify (in the manner set forth in Section 2.02(b)) the Stockholders and the Company that the Stockholders have the right to sell to the Proposed Purchaser as part of such Transfer the Tag-Along Securities (or such lesser number as the Stockholders may elect pursuant to Section 2.02(c)) at the closing of such Transfer subject to the same terms and conditions, on a pro rata basis, of the proposed Transfer by RSA. The consideration per Tag-Along Security to be received by the Stockholders shall be equal to the higher of (A) the proposed purchase price offered by the Proposed Purchaser for shares of Class A Common Stock and (B) the proposed purchase price offered by the Proposed Purchaser for shares of Class B Common Stock; provided, however, that if the Tag-Along Sale includes a sale by RSA of any shares of Class B Preferred Stock or Warrants, if the purchase price for (x) a share of Class B Preferred Stock exceeds the lower of (1) the liquidation value of such share and (2) the fair market value of such share at the time the Proposed Purchaser made its proposal, or (y) a Warrant exceeds the fair market value of such Warrant at the time the Proposed Purchaser made its proposal, as applicable, such excess shall be shared pro rata with the Stockholders based on the number of Tag-Along Securities Transferred in such Tag-Along Sale. For the avoidance of doubt, the (i) Transfers by RSA Permitted Transferees shall be aggregated with any Transfers by RSA for purposes of determining whether such Transfers equal or exceed the RSA Threshold, (ii) RSA Permitted Transferees shall have the same rights and obligations as RSA under this Agreement and (iii) any transferee of any Stockholder (and any subsequent transferee) shall have the same rights and obligations as the Stockholders under this Agreement.

(b)     RSA shall provide the Stockholders written notice (a "Tag-Along Sale Notice") by delivering such Tag-Along Sale Notice to the Stockholders not less than 15 days prior to the proposed date of consummation of the Tag-Along Sale (the "Tag-Along Sale Date"). Each Tag-Along Sale Notice shall be accompanied by a copy of any agreement relating to the Tag-Along Sale (if available and, if the provision thereof to the Stockholders shall be subject to an obligation of confidentiality, then the Stockholders shall provide in writing such undertaking of confidentiality as shall be reasonably required by RSA and/or the Proposed Purchaser) and, to the extent not set forth in such agreement, shall set forth: (i) the name and address of the Proposed Purchaser in the Tag-Along Sale; (ii) the class and the number of Securities proposed to be Transferred by RSA; (iii) the proposed material terms of such Transfer, including of any oral agreements, the proposed amount and form of consideration to be paid for such Securities expressed on a per Security basis for each class or type of Security included therein and the terms and conditions of payment offered by the Proposed Purchaser; (iv) the anticipated or approximate Tag-Along Sale Date; and (v) if the proposed Tag-Along Sale provides for any non-cash consideration, a description of such non-cash consideration adequate to allow valuation thereof. Upon request, RSA shall provide such additional information directly related to the Transfer of Tag-Along Securities in the Tag-Along Sale, including additional information with respect to the information set forth in clauses (i) through (v), as the Stockholders may reasonably request. RSA shall not enter into any confidentiality agreement in connection with a proposed Tag-Along Sale which would prohibit RSA from complying with this Section 2.02(b).

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(c)     If any of the Stockholders wishes to participate in the Tag-Along Sale then it shall provide written notice (a "Tag-Along Notice") to RSA no less than three business days prior to the Tag-Along Sale Date. The Tag-Along Notice shall set forth the number of Tag-Along Securities that such Stockholder desires to include in the Tag-Along Sale, but in no event shall such number, together with all Tag-Along Securities proposed to be included by all other Stockholders, exceed the maximum number of Tag-Along Securities permitted under the definition of such term. To the extent that the aggregate number of Tag-Along Securities specified in the Tag-Along Notices of all Stockholders exceeds the maximum number of Tag-Along Securities permitted under the definition of such term, the number of Tag-Along Securities of each Stockholder to be included in the Tag-Along Sale shall be determined on a pro rata basis according to the number of Tag-Along Securities proposed to be included in the Tag-Along Sale by each Stockholder. The Tag-Along Notice given by a Stockholder shall constitute such Stockholder's binding agreement to sell the Tag-Along Securities specified in the Tag-Along Notice on the terms and subject to the conditions, on a pro rata basis with RSA, described in the Tag-Along Sale Notice. Anything contained herein to the contrary notwithstanding, no Stockholder shall be required to incur any liability or make any representation or warranty or any covenant or indemnity unless RSA is required to incur substantially the same economic liability on a pro rata (or greater) basis and make substantially the same representation, warranty and indemnity on a pro rata (or greater) basis.

(d)    If the Proposed Purchaser does not, through no fault of any Stockholder, consummate the purchase of all of the Tag-Along Securities offered for sale in accordance with the foregoing terms (or terms more favorable to the Stockholders) and procedures, then RSA shall not consummate the Tag-Along Sale of any of its Securities that equal or exceed the RSA Threshold to the Proposed Purchaser. If a Tag-Along Notice is not received by RSA prior to the three business day period specified above, RSA shall have the right to consummate the Tag-Along Sale without the participation of the Stockholders, but only on terms and conditions which are no more favorable to RSA (and in any event, at no greater a purchase price) than as stated in the Tag-Along Sale Notice and only if such Tag-Along Sale occurs on a date within 90 days of the Tag-Along Sale Date, or 120 days if the sole reason such Tag-Along Sale does not occur within 90 days is due to the failure to obtain regulatory approval. If such Tag-Along Sale does not occur within such 90 day period, or such 120 day period, if applicable, the Securities that were to be subject to such Tag-Along Sale thereafter shall again become subject to all of the conditions contained in Article II of this Agreement.

(e)     Prior to the Tag-Along Sale Date, the participating Stockholder shall deliver its Tag-Along Securities to the Company, or at the Company's request, to its transfer agent, duly endorsed for transfer and all fully executed documents reasonably required in connection with such Tag-Along Sale or, if held in book-entry form through an account at The Depository Trust Company, shall make such other reasonably satisfactory arrangements to allow for the Transfer of such Tag-Along Securities. On the Tag-Along Sale Date, the Company or its transfer agent shall deliver the Tag-Along Securities to be sold in connection with the Tag-Along Sale to the Proposed Purchaser by delivering Tag-Along Securities against delivery of the consideration for the Tag-Along Securities described in the Tag-Along Sale Notice in the amount of the aggregate

purchase price for such Tag-Along Securities, if and to the extent that such purchase price shall, in accordance with the terms of such Tag-Along Sale, be payable at the closing thereof. The Company or its transfer agent shall immediately remit such consideration to the relevant Stockholder. If the Tag-Along Sale does not occur as set forth above, the Company or its transfer agent shall immediately return such Tag-Along Securities to the relevant Stockholder.

(f)     Any election in any instance by a Stockholder not to exercise its right to participate in a Tag-Along Sale under this Section 2.02 shall not constitute a waiver of such right with respect to any other subsequent proposed Transfer of Securities which would trigger such right.

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ARTICLE III

Miscellaneous

SECTION 3.01.     Termination. This Agreement shall be terminated (a) upon termination of the Investment Agreement in accordance with its terms, (b) by the mutual consent of the parties hereto, (c) upon a Change of Control of the Company, provided that the provisions of Article II shall have been complied with in all respects in connection with, the transaction or transactions resulting in such Change of Control, (d) upon the failure of RSA and the RSA Permitted Transferees to own Securities representing in the aggregate the RSA Threshold, (e) with respect to the Farallon Stockholders (and not with respect to OCM), upon the Transfer by the Farallon Stockholders (in the aggregate and measured on a cumulative basis from the date hereof, but excluding Transfers to another Farallon Stockholder that is a party to this Agreement as of the date hereof, any other investment fund managed by, or through an Affiliate of, Farallon Capital Management, L.L.C. or any Affiliate of the foregoing) of 50% or more of the shares of Class A Common Stock acquired by the Farallon Stockholders pursuant to the transactions contemplated by the Investment Agreement or (f) with respect to OCM (and not with respect to the Farallon Stockholders), upon the Transfer by OCM (in the aggregate and measured on a cumulative basis from the date hereof, but excluding Transfers to any other investment fund managed by, or through an Affiliate of, Oaktree Capital Management, LLC or any Affiliate of the foregoing) of 50% or more of the shares of Class A Common Stock acquired by OCM pursuant to the transactions contemplated by the Investment Agreement.

SECTION 3.02.     Amendments.  This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto.

SECTION 3.03.     Notice.  All notices and other communications provided for herein or permitted hereunder shall be made in writing by hand-delivery, courier guaranteeing overnight delivery, certified first-class mail, return receipt requested, or telecopy and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after being deposited with such courier, if made by overnight courier, or (iv) on the date indicated on the notice of receipt, if made by first-class mail, to the parties as follows:

(i)     if to a Farallon Stockholder, to

Farallon Capital Management, L.L.C.
One Maritime Plaza, Suite 1325
San Francisco, CA 94111

Attention:  Mark C. Wehrly, Esq. and
                    William F. Duhamel

with a copy to:

Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019

Attention:  Julie T. Spellman, Esq.

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(ii)     if to OCM, to

OCM Principal Opportunities Fund II, L.P.
c/o Oaktree Capital Management, LLC
333 South Grand Avenue, 28th Floor
Los Angeles, CA 90401

Attention:  Caleb S. Kramer
                    Jordon L. Kruse

with a copy to:

Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, Illinois 60601

Attention:  John A. Weissenbach, Esq.
                    Christopher J. Greeno, Esq.

(iii)     if to RSA, to

Retirement Systems of Alabama Holdings, LLC
135 South Union Street
Montgomery, Alabama 36104

Attention:  Darren Schulz

with a copy to:

Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, NY 10103

Attention:  Duncan N. Darrow, Esq.

SECTION 3.04.    Interpretation.  When a reference is made in this Agreement to Sections, such reference shall be to a Section to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation".

SECTION 3.05.    Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

SECTION 3.06.    Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.
                                                                                                          - - 7 -

 

SECTION 3.07.    Entire Agreement; No Third-Party Beneficiaries.  This Agreement (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer upon any person other than the parties hereto (and their respective successors and assigns permitted hereby) any rights or remedies hereunder.

SECTION 3.08.    Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

SECTION 3.09.    Permitted Transfers; Assignment.  (a) (i)  The restrictions on Transfer provided in Article II shall not be applicable to any Transfer by RSA to one or more of its Affiliates (such transferee shall be referred to herein as an "RSA Permitted Transferee" and any such transfer being referred to as a "Permitted Transfer"), and (ii) neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by RSA without the prior written consent of the Stockholders, such consent not to be unreasonably withheld, except that RSA may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to an RSA Permitted Transferee; provided, however, that in the case of any Permitted Transfer permitted under clause (i) above or any assignment permitted under clause (ii) above, the RSA Permitted Transferee shall have executed and delivered an agreement substantially in the form of Exhibit A attached hereto and provided, further, that in no event shall any such Permitted Transfer or assignment relieve the assignor of any of its obligations under this Agreement.

(b)    Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any Stockholder without the prior written consent of RSA, such consent not to be unreasonably withheld, except that (i) any Farallon Stockholder may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to another Stockholder or to any other investment fund of Farallon Capital Management, L.L.C., or any Affiliate of any of the foregoing and (ii) OCM may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to another Stockholder or to any other investment fund of Oaktree Capital Management, LLC, or any Affiliate of any of the foregoing, provided, that in each case the assignee shall have executed and delivered to RSA an agreement substantially in the form of Exhibit A hereto. Notwithstanding any of the foregoing, neither this Agreement nor any of the rights, interests or obligations under this Agreement of any Stockholder shall be assigned, in whole or in part, by operation of law or otherwise by any Stockholder in connection with a market transfer of Securities by such Stockholder effected in the same manner as contemplated by the definition of Market Transfer.

(c)    Any purported assignment without consent or compliance with the requirements of this Section shall be void. Subject to the preceding provisions of this Section, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

SECTION 3.10.    Enforcement.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any New York state court located in New York County or any Federal court located in New York, New York, this being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any New York state court located in New York County or any Federal court located in New York, New York in the event any dispute arises out of this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement in any court other than a New York state court located in New York County or any Federal court sitting in New York, New York and (d) waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any transaction contemplated hereby.

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IN WITNESS WHEREOF, each party has duly executed this Agreement, all as of the date first written above.

  RETIREMENT SYSTEMS OF ALABAMA HOLDINGS LLC
   

by  /s/ David G. Bronner
        Name: David G. Bronner
       Title: Manager
   
  AVIATION ACQUISITION, L.L.C.

     By FARALLON CAPITAL
     MANAGEMENT, L.L.C., its manager,
   

by /s/ William F. Duhamel
        Name: William F. Duhamel
       Title: Managing Member
   
  FARALLON CAPITAL PARTNERS, L.P.

     By FARALLON PARTNERS, L.L.C.,
     its general partner,
   

     By: /s/ William F. Duhamel
             Name: William F. Duhamel
            Title: Managing Member
   
  FARALLON CAPITAL INSTITUTIONAL PARTNERS, L.P.

     By FARALLON PARTNERS, L.L.C.,
     its general partner,
   

     By: /s/ William F. Duhamel
             Name: William F. Duhamel
            Title: Managing Member

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  FARALLON CAPITAL INSTITUTIONAL PARTNERS II, L.P.

     By FARALLON PARTNERS, L.L.C.,
     its general partner,
   

     By: /s/ William F. Duhamel
            Name: William F. Duhamel
            Title: Managing Member
   
  FARALLON CAPITAL INSTITUTIONAL PARTNERS III, L.P.

     By FARALLON PARTNERS, L.L.C.,
     its general partner,
   

     By: /s/ William F. Duhamel
            Name: William F. Duhamel
            Title: Managing Member
   
  TINICUM PARTNERS, L.P.

     By FARALLON PARTNERS, L.L.C.,
     its general partner,
   

     By: /s/ William F. Duhamel
            Name: William F. Duhamel
            Title: Managing Member

 

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  OCM PRINCIPAL OPPORTUNITIES FUND II, L.P.

     By OAKTREE CAPITAL
     MANAGEMENT, LLC, its general
     partner,
   

     By: /s/ Caleb S. Kramer
           Name: Caleb S. Kramer
           Title: Managing Director
   

     By: /s/ Jordan Kruse
           Name: Jordan Kruse
           Title: Vice President

 

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EXHIBIT A

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

            THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Agreement") is made and entered into as of [Date], by and between [ ], as assignor (the "Assignor"), and [ ], as assignee (the "Assignee").

            Reference is made to the Stockholder Agreement dated as of August 14, 2003 (as from time to time amended, modified or supplemented, the "RSA Stockholder Agreement"), among Retirement Systems of Alabama Holdings LLC, a Delaware limited liability company, and the other parties set forth on the signature pages thereto. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the RSA Stockholder Agreement.

            1.         Effective as of the date of this Agreement, the Assignor hereby assigns to the Assignee and the Assignee hereby assumes from the Assignor the Assignor's rights and obligations under the RSA Stockholder Agreement with respect to the Securities set forth in the table below. From and after the date of this Agreement, the Assignee shall be a party to and be bound by the provisions of the RSA Stockholder Agreement and, with respect to the Securities set forth in the table below, have the rights and obligations of the Assignor thereunder.

            2.         This Agreement 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 contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement.

            3.         THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Assignee's Address for Notices:

                                                               

                                                               

                                                               

 

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Type of Securities

Number of Securities to be
 Transferred
   
   
   
   
   
   
   
   

 

            IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Agreement to be executed and delivered either in person or by its duly authorized agent.

  The terms set forth above are hereby agreed to:

________________, as Assignor
   

By____________________________
Name:
Title:
   
  ________________, as Assignee
   

By____________________________
Name:
Title:
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