US Airways 2005 Annual Report Download - page 31

Table of Contents
agreement that prohibits the equity investors' sale of our common stock prior to the date that is six months after September 27, 2005, or March 27, 2006. The
stockholders agreements generally provide that the equity investors will not sell, assign, transfer or pledge our common stock or any securities exercisable for
or convertible into our common stock owned by them, subject to limited exceptions. Approximately 44.0 million shares, or 54% of the outstanding shares of
our common stock, owned by the equity investors will be eligible for resale after the expiration of the lock-up period. In addition, under the terms of the
PBGC settlement under US Airways Group's plan of reorganization, the approximately 4.9 million shares of common stock issued to the PBGC could not be
sold, assigned, transferred or pledged prior to the end of five months after September 27, 2005. This restriction expired on February 27, 2006. Sales of any of
these shares into the market after the expiration of the respective lock-up periods could cause the market price of our common stock to drop significantly,
even if our business is doing well.
Conversion of our convertible notes will dilute the ownership interest of existing stockholders and could adversely affect the market price of our common
stock.
The conversion of some or all of our outstanding convertible notes, including US Airways Group's 7% Senior Convertible Notes due 2020 or America
West Holdings' 7.5% Convertible Senior Notes due 2009, will dilute the ownership interests of existing shareholders. Beginning January 18, 2005, the
7.5% notes became convertible into shares of our common stock, at the option of the holder. Any sales in the public market of the common stock issuable
upon such conversion could adversely affect prevailing market prices of our common stock. In addition, the existence of the notes may encourage short selling
by market participants because the conversion of the notes could depress the price of our common stock.
A small number of stockholders beneficially own a substantial amount of our common stock.
A significant portion of US Airways Group's common stock is beneficially owned by a relatively small number of equity investors. As a result, until these
stockholders sell a substantial portion of their shares, they will have a greater percentage vote in matters that may be presented for a vote to stockholders than
most other stockholders. This may make it more difficult for other stockholders to influence votes on matters that may come before stockholders of
US Airways Group.
Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of US Airways Group will make it difficult
for stockholders to change the composition of our board of directors and may discourage takeover attempts that some of our stockholders might consider
beneficial.
Certain provisions of the amended and restated certificate of incorporation and amended and restated bylaws of US Airways Group may have the effect of
delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of US Airways Group
and its stockholders. These provisions include, among other things, the following:
• a classified board of directors with three-year staggered terms;
• advance notice procedures for stockholder proposals to be considered at stockholders' meetings;
• the ability of US Airways Group's board of directors to fill vacancies on the board;
• a prohibition against stockholders taking action by written consent;
• a prohibition against stockholders calling special meetings of stockholders;
• a requirement for the approval of holders of at least 80% of the voting power of the shares entitled to vote in the election of directors for the
stockholders to amend the second amended and restated bylaws; and
• super-majority voting requirements to modify or amend specified provisions of US Airways Group's amended and restated certificate of incorporation.
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