<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 033-59323
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 23, 1995)
$250,000,000
[Logo] Union Pacific Corporation
6.70% NOTES DUE 2006
------------------------
Interest payable June 1 and December 1
------------------------
THE NOTES WILL MATURE ON DECEMBER 1, 2006, AND WILL NOT BE REDEEMABLE PRIOR TO
MATURITY. THE NOTES WILL NOT BE SUBJECT TO ANY SINKING FUND. THE NOTES WILL
BE REPRESENTED BY ONE OR MORE GLOBAL SECURITIES REGISTERED IN THE NAME
OF THE NOMINEE OF THE DEPOSITORY TRUST COMPANY ("DTC"). INTERESTS IN
SUCH GLOBAL SECURITIES WILL BE SHOWN ON, AND TRANSFER THEREOF
WILL BE EFFECTED ONLY THROUGH RECORDS MAINTAINED BY, DTC AND
ITS PARTICIPANTS. EXCEPT AS DESCRIBED HEREIN, NOTES IN
DEFINITIVE FORM WILL NOT BE ISSUED. SEE "DESCRIPTION
OF THE NOTES" HEREIN.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
PRICE 99.927% AND ACCRUED INTEREST
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
------------ ------------- -------------
<S> <C> <C> <C>
Per Note................................... 99.927% 0.650% 99.277%
Total...................................... $249,817,500 $1,625,000 $248,192,500
</TABLE>
- ------------
(1) Plus accrued interest from December 1, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting" herein.
(3) Before deducting estimated expenses of $200,000 payable by the Company.
------------------------
The Notes are offered, subject to prior sale, when, as and if accepted by
the several Underwriters and subject to approval of certain legal matters by
Cravath, Swaine & Moore, counsel for the Underwriters. It is expected that
delivery of the Notes will be made on or about December 6, 1996, through the
book-entry facilities of The Depository Trust Company, against payment therefor
in immediately available funds.
------------------------
MORGAN STANLEY & CO.
Incorporated
LEHMAN BROTHERS
J.P. MORGAN & CO.
December 3, 1996
<PAGE> 2
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, ANY SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY THE NOTES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Recent Developments..................................................................... S-3
Use of Proceeds......................................................................... S-3
Capitalization.......................................................................... S-4
Description of the Notes................................................................ S-5
Underwriting............................................................................ S-6
Notice to Canadian Residents............................................................ S-7
PROSPECTUS
Available Information................................................................... 2
Incorporation of Certain Documents by Reference......................................... 2
The Company............................................................................. 3
Use of Proceeds......................................................................... 4
Description of Debt Securities.......................................................... 4
Description of Preferred Stock.......................................................... 12
Description of Common Stock............................................................. 15
Description of Securities Warrants...................................................... 16
Plan of Distribution.................................................................... 17
Legal Opinions.......................................................................... 18
Experts................................................................................. 18
</TABLE>
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE> 3
RECENT DEVELOPMENTS
SP TRANSACTION
On September 11, 1996, pursuant to the Amended and Restated Agreement and
Plan of Merger (the "Merger Agreement"), dated as of July 12, 1996, by and among
Union Pacific Corporation (the "Company"), Union Pacific Railroad Company
("UPRR"), Southern Pacific Rail Corporation ("SP"), UP Holding Company, Inc.
("Holding") and Union Pacific Merger Co., SP was merged with and into Holding
(the "Merger") with Holding as the surviving corporation. Immediately following
the Merger, the name of the surviving corporation was changed to "Southern
Pacific Rail Corporation." As a result of the Merger, each share of SP common
stock, par value $.001 per share (the "SP Shares"), was converted into the right
to receive, in accordance with the elections filed by the stockholders of SP,
(a) $25.00 per SP Share in cash, without interest thereon, (b) .4065 shares of
the Company's common stock, par value $2.50 per share ("UPC Common Stock"), for
each SP Share, or (c) a combination thereof, subject to proration, all as more
fully set forth in the Merger Agreement. The Company's acquisition of 100%
ownership of SP included (i) a first-step cash tender offer in September 1995
for approximately 25% of SP's then outstanding common stock at a cost of
approximately $976 million and (ii) the issuance of approximately 38.1 million
shares of UPC Common Stock along with a cash payment of $586 million in exchange
for the remaining SP Shares at the consummation of the Merger. The Company
intends to integrate SP's rail operations with the rail operations of the
Company.
RESOURCES SPIN-OFF
On September 12, 1996, the Company's Board of Directors declared a special
dividend consisting of 206 million shares of the common stock (the "Resources
Common Stock") of Union Pacific Resources Group Inc. ("Resources"), representing
the Company's entire interest in Resources, to the holders of the Company's
common stock on a tax-free, pro-rata basis (the "Spin-Off"). The Spin-Off was
completed on October 15, 1996 to holders of record of the Company's common stock
on September 26, 1996 (the "Record Date"), including holders of UPC Common Stock
issued in the SP Merger. As a result of the Spin-Off, each of the Company's
shareholders received .846946 of a share of Resources Common Stock for each
share of the Company's common stock held by such shareholder on the Record Date.
The Spin-Off represented the second step of the Company's plan, announced in
July 1995, to exit its natural resources business, including all the oil, gas
and minerals operations owned by the Company. The first step of the plan was an
initial public offering (the "IPO") by Resources of 42,500,000 shares
(approximately 17%) of Resources Common Stock at an initial offering price of
$21 per share. The IPO was completed on October 17, 1995.
USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby will be used by
the Company for general corporate purposes, including repayment of commercial
paper or borrowings under the Company's credit facilities.
S-3
<PAGE> 4
CAPITALIZATION
The Company's actual and pro forma capitalization as of September 30, 1996
are set forth in the table below. Column I reflects the actual capitalization as
of September 30, 1996, including completion of the SP transaction, which
occurred on September 11, 1996, Column II reflects the Spin-Off of Resources to
the Company's stockholders, which occurred on October 15, 1996 and Column III
reflects the Spin-Off, the issuance of the Notes offered hereby and the issuance
on October 22, 1996 of the Company's 7 1/4% Notes Due 2008 in the amount of
$250,000,000 (collectively, these two issuances are referred to as the "Note
Issuances"). The transactions included in the balance sheet data under the Pro
Forma Financial Information columns are reflected as if such transactions had
occurred on September 30, 1996.
The actual ratio of earnings to fixed charges set forth in Column I below
has been computed using historical Company financial information for the nine
months ended September 30, 1996 as contained in the Company's accounting records
as of such date. The pro forma ratio of earnings to fixed charges set forth in
Column II has been computed using the aforementioned historical Company
financial information adjusted for the effects of the Spin-Off of Resources as
if such transaction had occurred on January 1, 1996. The pro forma ratio of
earnings to fixed charges set forth in Column III adjusts Column II's pro forma
ratio of earnings to fixed charges to give effect to the Note Issuances as if
such issuances had occurred on January 1, 1996. The pro forma ratios of earnings
to fixed charges are presented for informational purposes only and do not
purport to be indicative of the results of operations that would have resulted
had the Spin-Off of Resources occurred on January 1, 1996.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
------------------------------------------------------
PRO FORMA FINANCIAL INFORMATION
------------------------------------
COLUMN III(B)
COLUMN I COLUMN II(A) -------------
------------- ------------------ SPIN-OFF AND
UNION PACIFIC UNION PACIFIC/ NOTE
HISTORICAL RESOURCES SPIN-OFF ISSUANCES
------------- ------------------ -------------
(Unaudited)
(Dollars in Millions)
<S> <C> <C> <C>
Debt Due Within One Year...................................... $ 333 $ 333 $ 333
------- ------- -------
Long-Term Debt:
Notes offered hereby...................................... -- -- 250
Commercial paper and bank notes........................... 1,416 766 270
Notes, debentures and other............................... 4,534 4,534 4,784
Equipment obligations..................................... 910 910 910
Mortgage bonds............................................ 196 196 196
Tax-exempt financings..................................... 169 169 169
Capitalized leases........................................ 1,118 1,118 1,118
Unamortized premium....................................... 31 31 27
------- ------- -------
Total Long-Term Debt................................. $ 8,374 $ 7,724 $ 7,724
======= ======= =======
Common Stockholders' Equity:
Common stock.............................................. $ 679 $ 679 $ 679
Paid-in capital........................................... 3,900 3,900 3,900
Retained earnings......................................... 5,138 5,138 5,138
Treasury stock............................................ (1,692) (1,692) (1,692)
------- ------- -------
Total Common Stockholders' Equity.................... $ 8,025 $ 8,025 $ 8,025
------- ------- -------
Total Capitalization.......................................... $16,732 $ 16,082 $16,082
======= ======= =======
Ratio of Earnings to Fixed Charges (c)........................ 2.7 2.8 2.7
======= ======= =======
</TABLE>
- ---------------
(a) Resources Spin-Off pro forma adjustments reflect a $650 million reduction in
the Company's long-term debt resulting from the repayment of Resources' $650
million note to the Company, which occurred on October 16, 1996.
(b) Reflects the Note Issuances.
(c) "Earnings" represent income from continuing operations, less equity in
undistributed earnings of unconsolidated affiliates, plus Fixed Charges and
taxes based on income. "Fixed Charges" represent interest charges,
amortization of debt discount and expense, and an estimated amount
representing the interest factor for rents.
As of the date of this Prospectus Supplement, the Company had credit
facilities with various United States and foreign banks totaling $2.8 billion,
which were available to support commercial paper borrowings and for other
purposes. As of such date, outstanding borrowings under the credit facilities
totalled $375 million and the Company had outstanding $805 million in commercial
paper.
S-4
<PAGE> 5
DESCRIPTION OF THE NOTES
GENERAL
The Notes offered hereby will be limited to $250,000,000 aggregate
principal amount, will mature on December 1, 2006, and will bear interest at the
applicable rate per annum stated on the cover page of this Prospectus
Supplement. Interest on each Note will be payable semiannually on June 1 and
December 1 of each year, commencing June 1, 1997, to the person in whose name
the Note is registered, subject to certain exceptions as provided in the
Indenture, at the close of business on the May 15 or November 15 (each a "Record
Date"), as the case may be, immediately preceding such June 1 or December 1.
REDEMPTION
The Notes are not redeemable prior to maturity.
SINKING FUND
There is no provision for a sinking fund for the Notes.
DEFEASANCE
Under certain circumstances, the Company will be deemed to have discharged
the entire indebtedness on all of the outstanding Notes by defeasance. See
"Description of Debt Securities -- Defeasance of the Indenture and Debt
Securities" in the accompanying Prospectus for a description of the terms of any
such defeasance and the tax consequences thereof.
BOOK-ENTRY SYSTEM
The Notes will initially be represented by one or more global securities
(each a "Global Security") deposited with DTC and registered in the name of a
nominee of DTC, except as set forth below. The settlement of transactions with
respect to each Global Security will be facilitated through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the physical movement of Note certificates. The Notes will be available for
purchase in denominations of $1,000 and integral multiples thereof in book-entry
form only. Unless and until certificated Notes are issued under the limited
circumstances described below, no beneficial owner of a Note shall be entitled
to receive a definitive certificate representing a Note. So long as DTC or any
successor depositary (the "Depositary") or its nominee is the registered owner
of a Global Security, the Depositary or such nominee, as the case may be, will
be considered to be the sole owner or holder of the Notes represented thereby
for all purposes of the Indenture. Unless and until it is exchanged in whole or
in part for the Notes represented thereby, a Global Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor depositary or any
nominee of such successor.
So long as Notes are represented by a Global Security, all payments of
principal and interest with respect thereto will be made to the Depositary or
its nominee (or a successor), as the case may be, as the sole registered owner
of the Global Security representing such Notes.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a Global Security representing
Notes, will credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such Global
Security as shown on the records of the Depositary or such nominee.
If DTC is at any time unwilling, unable or ineligible to continue as
depositary for a Global Security and a successor depositary is not appointed by
the Company within 90 days, the Company will issue certificated Notes in
definitive form in exchange for such Global Security. In addition, the Company
may at any time determine not to have the Notes represented by a Global
Security, and, in such event, will issue certificated Notes in definitive form
in exchange for such Global Security. In either instance, an owner of a
beneficial
S-5
<PAGE> 6
interest in a Global Security will be entitled to physical delivery of
certificated Notes in definitive form equal in principal amount to such
beneficial interest in such Global Security and to have such certificated Notes
registered in its name. Certificated Notes so issued in definitive form will be
issued in denominations of $1,000 and integral multiples thereof and will be
issued in registered form only, without coupons.
See "Description of Debt Securities" in the accompanying Prospectus for
additional information concerning the Debt Securities, the Indenture and the
book-entry system.
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement dated December 3, 1996 (the "Underwriting Agreement"), among the
Company, Morgan Stanley & Co. Incorporated, Lehman Brothers Inc. and J.P. Morgan
Securities Inc. (the "Underwriters"), the Company has agreed to sell to the
Underwriters, and each of the Underwriters has severally but not jointly agreed
to purchase from the Company, the principal amount of the Notes as set forth
opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
----------------
<S> <C>
Morgan Stanley & Co. Incorporated...................... $ 83,334,000
Lehman Brothers Inc. .................................. 83,333,000
J.P. Morgan Securities Inc. ........................... 83,333,000
----------------
Total........................................ $250,000,000
===============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the Notes if any are purchased.
The Company has been advised by the Underwriters that they propose to offer
the Notes to the public initially at the offering price set forth on the cover
page of this Prospectus Supplement and to certain dealers at such price less a
concession of 0.40% of the principal amount of the Notes; that the Underwriters
and such dealers may allow a discount of 0.25% of the principal amount of the
Notes on sales to other dealers; and that after the initial public offering, the
public offering price and concession and discount to dealers may be changed by
the Underwriters.
The Notes are new issues of securities with no established trading market.
The Underwriters have advised the Company that they intend to act as market
makers for the Notes. However, the Underwriters are not obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including civil liabilities under the Securities Act of
1933, as amended, or to contribute to payments which the Underwriters may be
required to make in respect thereof.
Certain of the Underwriters or their affiliates engage in transactions with
and perform services, including commercial banking services, for the Company and
certain of its affiliates in the ordinary course of business.
S-6
<PAGE> 7
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Notes in Canada is being made only on a private
placement basis exempt from the requirement that the Company prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of Notes are effected. Accordingly, any resale of the Notes in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers who are Canadian residents are advised to seek legal advice prior to
any resale of the Notes.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Notes in Canada who receives a purchase confirmation will
be deemed to represent to the Company and the dealer from whom such purchase
confirmation is received that (i) such purchaser is entitled under applicable
provincial securities laws to purchase such Notes without the benefit of a
prospectus qualified under such securities laws, (ii) where required by law,
that such purchaser is purchasing as principal and not as agent, and (iii) such
purchaser has reviewed the text above under "Resale Restrictions".
RIGHTS OF ACTION AND ENFORCEMENT
The Notes being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.
All of the Company's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Ontario purchasers to effect service of process within Canada upon the
Company or such persons. All or a substantial portion of the assets of the
Company and such persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against the Company or such persons in
Canada or to enforce a judgment obtained in Canadian courts against the Company
or such persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Notes to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any Notes acquired
by such purchaser pursuant to this offering. Such report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR #95/17, a
copy of which may be obtained from the Company. Only one such report must be
filed in respect of Notes acquired on the same date and under the same
prospectus exemption.
S-7
<PAGE> 8
[LOGO] Unio Pacific Corporation
$1,000,000,000
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
SECURITIES WARRANTS
---------------------
Union Pacific Corporation (the "Company") may issue from time to time,
together or separately (i) its debt securities (the "Debt Securities"), which
may be either senior ("Senior Securities") or subordinated ("Subordinated
Securities") and which may be convertible into or exchangeable for shares of
common stock, par value $2.50, of the Company (the "Common Stock"), shares of
preferred stock, no par value, of the Company (the "Preferred Stock"), or other
Debt Securities; (ii) warrants to purchase Debt Securities (the "Debt
Warrants"); (iii) Preferred Stock, which may be convertible into or exchangeable
for shares of Common Stock or shares of Preferred Stock or Debt Securities; (iv)
warrants to purchase shares of Preferred Stock (the "Preferred Stock Warrants")
and (v) Common Stock issuable upon the conversion or exchange of Debt Securities
or Preferred Stock offered hereunder, to the extent such Debt Securities or
Preferred Stock are, by their terms, convertible into or exchangeable for shares
of Common Stock, in amounts, at prices and on terms to be determined by market
conditions at the time of offering. The Debt Warrants and Preferred Stock
Warrants are collectively referred to herein as the "Securities Warrants" and
the Debt Securities, Preferred Stock, Common Stock and Securities Warrants are
collectively referred to herein as the "Offered Securities".
The Offered Securities may be issued in one or more series or issuances and
will be limited to $1,000,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt Securities
are issued for one or more foreign currencies or currency units). The Offered
Securities may be sold for U.S. dollars, or any foreign currency or currencies
or currency units, and the principal of, any premium on, and any interest on,
the Debt Securities may be payable in U.S. dollars, or any foreign currency or
currencies or currency units.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where applicable, (i) in
the case of Debt Securities, the specific designation, aggregate principal
amount, authorized denomination, initial offering price, maturity, premium (if
any), interest rate (which may be fixed or floating), time of and method of
calculating the payment of interest, if any, the currency in which principal,
premium, if any, and interest, if any, are payable, any redemption or sinking
fund terms, any terms for the conversion into or exchange for shares of Common
Stock or Preferred Stock or other Debt Securities, terms of subordination of
Subordinated Securities, and other specific terms; (ii) in the case of Preferred
Stock, the specific designation, any dividend, liquidation, redemption, sinking
fund, voting or other rights, time of payment of dividends, any terms for the
conversion into or exchange for shares of Common Stock or shares of Preferred
Stock or Debt Securities, the initial offering price and other specific terms;
and (iii) in the case of Securities Warrants, the duration, initial offering
price, exercise price and detachability thereof. The Prospectus Supplement will
also contain information, where applicable, about certain United States Federal
income tax considerations relating to, and any listing on a securities exchange
of, the Offered Securities covered by the Prospectus Supplement.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The Offered Securities will be sold directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of such
methods. If any agents of the Company or any dealers or underwriters are
involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable agent's commission, dealer's purchase price or underwriter's
discount will be set forth in or may be calculated from the Prospectus
Supplement. The net proceeds to the Company from such sale will be the purchase
price less such commission in the case of an agent, the purchase price in the
case of a dealer, or the public offering price less such discount in the case of
an underwriter and less, in each case, other attributable issuance expenses. See
"Plan of Distribution".
THE DATE OF THIS PROSPECTUS IS JUNE 23, 1995.
<PAGE> 9
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission") relating to its business, financial position,
results of operations and other matters. Such reports and other information can
be inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at certain of its Regional Offices, located at Northwest Atrium Center
(Suite 1400), 500 West Madison Street, Chicago, Illinois 60661, and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
prescribed rates. Such material can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, its Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995, its Current Reports on Form 8-K
dated March 21, 1995, April 20, 1995 and April 26, 1995, all of which have been
previously filed with the Commission under File No. 1-6075, and the description
of capital stock (including Common Stock) of the Company that is contained in
the registration statement filed under the Exchange Act under file No. 1-6075,
including all amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Offered Securities offered hereby shall be
deemed incorporated herein by reference, and such documents shall be deemed to
be a part hereof from the date of filing such documents. Any statement contained
herein, in a document incorporated or deemed to be incorporated by reference
herein, or in the accompanying Prospectus Supplement, shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in the accompanying Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the above documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written or oral requests should be directed to:
Union Pacific Corporation, Eighth and Eaton Avenues, Bethlehem, Pennsylvania
18018, Attention: Secretary (telephone 610-861-3200).
2
<PAGE> 10
THE COMPANY
The Company operates, through subsidiaries, in the areas of rail
transportation (Union Pacific Railroad Company, Missouri Pacific Railroad
Company and Chicago and North Western Transportation Company ("CNW")
(collectively, the "Railroad")), oil, gas and mining (Union Pacific Resources
Company ("Resources")) and trucking (Overnite Transportation Company
("Overnite")). With the exception of CNW which is over 99% owned by the Company,
each of the foregoing subsidiaries is indirectly wholly-owned by the Company.
Substantially all of the Company's operations are in the United States.
The Railroad is the largest railroad in the United States in terms of track
miles, with nearly 23,000 route miles linking Pacific Coast and Gulf Coast ports
with the Midwest. The Railroad maintains coordinated schedules with other
carriers for the handling of freight throughout the United States, Canada and
Mexico. The Railroad handles exported and imported freight throughout the
system, principally through the Gulf Coast and Pacific Coast ports and across
the Texas-Mexico border. Major categories of freight hauled by the Railroad are
automotive, chemicals, energy (coal), food/consumer/government, grains and grain
products, intermodal and metals/minerals/forest.
Resources is an independent oil and gas company engaged in exploration for
and production of natural gas, crude oil and associated products. Substantially
all of its exploration and production programs are concentrated in the Austin
Chalk trend and Carthage area in central and eastern Texas and Louisiana; the
Ozona area in western Texas; the Union Pacific Land Grant in Colorado, Wyoming
and Utah; the Gulf of Mexico; and Canada. Resources is also responsible for the
Company's interests in coal and trona development which are located primarily in
the Rocky Mountain region.
Overnite, a major interstate trucking company, serves all 50 states and
portions of Canada and Mexico through 174 service centers (located primarily in
eastern, southeastern and central United States and on the Pacific Coast) and
through agency partnerships with several small, high-quality carriers serving
areas not directly covered by Overnite. As one of the largest trucking companies
in the United States, Overnite offers a comprehensive array of services,
specializing in less-than-truckload shipments, and transports a variety of
products, including machinery, tobacco, textiles, plastics, electronics and
paper products.
The Company's executive offices are located at Eighth and Eaton Avenues,
Bethlehem, Pennsylvania 18018, and its telephone number is (610) 861-3200.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- ---------------------------------------------- ------------
1990 1991(a) 1992 1993 1994 1995
- ----- ------- -------- ----- ----- ------------
<S> <C> <C> <C> <C> <C>
3.3 1.3 3.7 4.2 4.5 3.6
</TABLE>
- ---------------
(a) In the third quarter of 1991, the Company announced a major restructuring
program, including an $870 million ($575 million after-tax) special charge.
Excluding the special charge, the Company's ratio of earnings to fixed
charges for the year ended December 31, 1991 would have been 3.3.
The ratio of earnings to fixed charges has been computed on a total
enterprise basis. Earnings represent income from continuing operations before
the cumulative effect of accounting changes less equity in undistributed
earnings of unconsolidated affiliates, plus income taxes and fixed charges.
Fixed charges represent interest, amortization of debt discount and expense, and
the estimated interest portion of rental charges.
3
<PAGE> 11
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net proceeds
from the sale of the Offered Securities offered hereby will be used for general
corporate purposes, including repayment of borrowings, working capital, capital
expenditures, stock repurchase programs and acquisitions. Additional information
on the use of net proceeds from the sale of the Offered Securities offered
hereby is set forth in the Prospectus Supplement relating to such Offered
Securities.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities summarizes
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which such general provisions may apply to any series
of Debt Securities will be described in the Prospectus Supplement relating to
such series.
The Debt Securities are to be issued under one or more Indentures
(collectively, the "Indenture") between the Company and Chemical Bank, as
trustee or such other trustee as shall be named in a Prospectus Supplement (the
"Trustee"). The following statements are subject to the detailed provisions of
the Indenture, a form of which is filed as an exhibit to the Registration
Statement. Wherever any particular provisions of the Indenture or terms defined
therein are referred to, such provisions and terms are incorporated by reference
as a part of the statements made herein and such statements are qualified in
their entirety by such references. References to particular sections of the
Indenture are noted below. Defined terms used herein but not defined herein
shall have the meanings ascribed to them in the Indenture.
GENERAL
The Debt Securities may be either Senior Securities or Subordinated
Securities and will be unsecured, unless the Company shall be required to secure
the Debt Securities as described below under "Covenants--Limitation on Liens."
The Indenture does not limit the amount of Debt Securities which may be issued
thereunder and Debt Securities may be issued thereunder up to the aggregate
principal amount which may be authorized from time to time by the Company.
(Section 301) Debt Securities will be issued from time to time and offered on
terms determined by market conditions at the time of sale.
The Senior Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. The Subordinated
Securities will be unsecured and will be subordinated and junior to all "Senior
Indebtedness" (which for this purpose includes any Senior Securities) to the
extent set forth in the applicable supplemental Indenture and the Prospectus
Supplement relating to such series.
The Debt Securities may be issued in one or more series with the same or
various maturities at par, at a premium or at a discount. Any Debt Securities
bearing no interest or interest at a rate which at the time of issuance is below
market rates will be sold at a discount (which may be substantial) from their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such substantially discounted Debt Securities
will be described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered hereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued; (iii)
the date or dates on which the Debt Securities will mature; (iv) the rate or
rates (which may be fixed or floating) per annum at which the Debt Securities
will bear interest, if any, or the method of determining such rate or rates; (v)
the date or dates on which any such interest will be payable, the date or dates
on which payment of any such interest will commence and the Regular Record Dates
for such Interest Payment Dates; (vi) whether such Debt Securities are Senior
Securities or Subordinated Securities; (vii) the terms of any mandatory or
optional redemption (including any provisions for any sinking, purchase or other
analogous fund) or repayment option; (viii) the currency, currencies or currency
units for which the Debt Securities may be purchased and the currency,
currencies or currency units in which the principal thereof, any premium
4
<PAGE> 12
thereon and any interest thereon may be payable; (ix) if the currency,
currencies or currency units for which the Debt Securities may be purchased or
in which the principal thereof, any premium thereon and any interest thereon may
be payable is at the election of the Company or the purchaser, the manner in
which such election may be made; (x) if the amount of payments on the Debt
Securities is determined with reference to an index based on one or more
currencies or currency units, changes in the price of one or more securities or
changes in the price of one or more commodities, the manner in which such
amounts may be determined; (xi) the extent to which any of the Debt Securities
will be issuable in temporary or permanent global form, or the manner in which
any interest payable on a temporary or permanent Global Security will be paid;
(xii) the terms and conditions upon which conversion or exchange of the Debt
Securities into or for Common Stock, Preferred Stock or other Debt Securities
will be effected, including the conversion price or exchange ratio, the
conversion or exchange period and any other conversion or exchange provisions;
(xiii) information with respect to book-entry procedures, if any; (xiv) a
discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations with respect to the Debt Securities;
and (xv) any other specific terms of the Debt Securities not inconsistent with
the Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or any
interest on any series of Debt Securities is payable in one or more foreign
currencies or foreign currency units, the restrictions, elections, Federal
income tax consequences, specific terms and other information with respect to
such issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal of,
any premium on, and any interest on the Debt Securities will be payable, and the
Debt Securities will be transferable, at the Corporate Trust Office of the
Trustee in New York, New York, provided that payment of interest, if any, may be
made at the option of the Company by check mailed on or before the payment date,
first class mail, to the address of the person entitled thereto as it appears on
the registry books of the Company or its agent.
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. (Sections 301 and 302) No service
charge will be made for any transfer or exchange of any Debt Securities, but the
Company may, except in certain specified cases not involving any transfer,
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Section 305)
GLOBAL SECURITIES
The Debt Securities of a series may be issued, in whole or in part, in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("participants") or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
5
<PAGE> 13
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing such Debt Securities.
Payments of principal of, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the Trustee for such Debt Securities, any
Paying Agent, nor the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name". Such payments will be
the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, the Trustee
and the Depositary for such Global Security, receive individual Debt Securities
of such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and integral
multiples thereof.
SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the Company,
and will constitute Senior Indebtedness (in each case as defined in the
applicable supplemental Indenture) ranking on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
6
<PAGE> 14
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Company. The obligations of the Company pursuant to the Subordinated Securities
will be subordinate in right of payment to the extent set forth in the Indenture
and the applicable supplemental Indenture to all Senior Indebtedness (including
all Senior Securities) (in each case as defined in the applicable supplemental
Indenture). Except to the extent otherwise set forth in a Prospectus Supplement,
the Indenture does not contain any restriction on the amount of Senior
Indebtedness which the Company may incur.
The terms of the subordination of a series of Subordinated Securities,
together with the definition of Senior Indebtedness related thereto, will be as
set forth in the applicable supplemental Indenture and the Prospectus Supplement
relating to such series.
The Subordinated Securities will not be subordinated to indebtedness of the
Company which is not Senior Indebtedness, and the creditors of the Company who
do not hold Senior Indebtedness will not benefit from the subordination
provisions described herein. In the event of the bankruptcy or insolvency of the
Company before or after maturity of the Subordinated Securities, such other
creditors would rank pari passu with holders of the Subordinated Securities,
subject, however, to the broad equity powers of the Federal bankruptcy court
pursuant to which such court may, among other things, reclassify the claims of
any series of Subordinated Securities into a class of claims having a different
relative priority with respect to the claims of such other creditors or any
other claims against the Company.
CERTAIN DEFINITIONS
Certain terms defined in Section 101 of the Indenture are summarized below.
"Debt" means indebtedness for money borrowed.
"Domestic Subsidiary" means a Subsidiary incorporated or conducting its
principal operations within the United States or any State thereof or off the
coast of the United States within an area over which the United States or any
State thereof has jurisdiction.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
"Principal Property" means (i) any property owned or leased by the Company
or any Subsidiary, or any interest of the Company or any Subsidiary in property,
located within the United States (including offshore property leased from any
governmental body), which is considered by the Company to be capable of
producing oil or gas or minerals in commercial quantities and (ii) any refinery,
smelter or processing or manufacturing plant owned or leased by the Company or
any Subsidiary and located within the United States, except (A) facilities
related thereto employed in transportation, distribution or marketing or (B) any
such plant or portion thereof which in the opinion of the Company's Board of
Directors is not a principal plant in relation to the activities of the Company
and its Restricted Subsidiaries as a whole.
"Restricted Subsidiary" means any Subsidiary which owns or leases (as
lessor or lessee) a Principal Property, but such term does not include Union
Pacific Railroad Company or any other Subsidiary which is principally a common
carrier by rail or truck or any Subsidiary the principal business of which is
leasing machinery, equipment, vehicles or other properties none of which is a
Principal Property, or financing accounts receivable, or engaging in ownership
and development of any real property which is not a Principal Property.
"Subsidiary", when used with respect to the Company, means any corporation
of which a majority of the outstanding voting stock is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or both.
7
<PAGE> 15
COVENANTS
The Indenture contains the covenants summarized below, which will be
applicable (unless waived or amended) so long as any of the Debt Securities are
outstanding, unless stated otherwise in the Prospectus Supplement.
Limitation on Liens. (a) The Company will not, nor will it permit any
Subsidiary to, create, assume, incur or suffer to exist any Mortgage upon any
stock or indebtedness of any Domestic Subsidiary, whether owned on the date of
the Indenture or thereafter acquired, to secure any Debt of the Company or any
other person (other than the Debt Securities), without in any such case making
effective provision whereby all the outstanding Debt Securities shall be
directly secured equally and ratably with such Debt. There will be excluded from
this restriction any Mortgage upon stock or indebtedness of a corporation
existing at the time such corporation becomes a Domestic Subsidiary or at the
time stock or indebtedness of a Domestic Subsidiary is acquired and any
extension, renewal or replacement of any such Mortgage.
(b) The Company will not, nor will it permit any Restricted Subsidiary to,
create, assume, incur or suffer to exist any Mortgage upon any Principal
Property, whether owned or leased on the date of the Indenture, or thereafter
acquired, to secure any Debt of the Company or any other person (other than the
Debt Securities), without in any such case making effective provision whereby
all the outstanding Debt Securities shall be directly secured equally and
ratably with such Debt.
There will be excluded from the restriction referred to in the next
preceding paragraph (i) any Mortgage upon property owned or leased by a
corporation existing at the time such corporation becomes a Restricted
Subsidiary, (ii) any Mortgage upon property existing at the time of the
acquisition thereof or to secure payment of any part of the purchase price
thereof or any Debt incurred to finance the purchase thereof, (iii) any Mortgage
upon property to secure any part of the cost of exploration, drilling,
development, construction, alteration, repair or improvement of such property,
or Debt incurred to finance such cost, (iv) any Mortgage securing Debt of a
Restricted Subsidiary owing to the Company or to another Restricted Subsidiary,
(v) any Mortgage existing on the date of the Indenture, and (vi) any extension,
renewal or replacement, in whole or in part, of any Mortgage referred to in the
foregoing clauses (i) through (v); provided however, that the principal amount
of Debt secured thereby shall not exceed the principal amount of Debt so secured
at the time of such extension, renewal or replacement; and provided further,
that such Mortgage shall be limited to all or such part of the property which
secured the Mortgage so extended, renewed or replaced. Notwithstanding the
foregoing, the Company may, and may permit any Restricted Subsidiary to, create,
assume, incur or suffer to exist any Mortgage upon any Principal Property which
is not excepted by clauses (i) through (vi) above without equally and ratably
securing the Debt Securities, provided that the aggregate amount of all Debt
then outstanding secured by such Mortgage and all similar Mortgages does not
exceed 10% of the total consolidated stockholders' equity (including preferred
stock) of the Company as shown on the audited consolidated balance sheet
contained in the latest annual report to stockholders of the Company.
For the purpose of the restriction referred to in the second preceding
paragraph, no Mortgage to secure any Debt will be deemed created by (i) the sale
or other transfer of (A) any oil or gas or minerals in place for a period of
time until, or in an amount such that, the purchaser will realize therefrom a
specified amount of money (however determined) or a specified amount of such oil
or gas or minerals, or (B) any other interest commonly referred to as a
"production payment", and (ii) any Mortgage in favor of the United States (or
any State thereof), or any other country, or any political subdivision of any of
the foregoing, to secure partial, progress, advance or other payments pursuant
to any contract or statute, or any Mortgage upon property intended to be used
primarily for the purpose of or in connection with air or water pollution
control. (Section 1006)
Limitation on Transfers of Principal Properties to Unrestricted
Subsidiaries. The Company will not, nor will it permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any Principal Property to
any Subsidiary which is not a Restricted Subsidiary other than for cash or other
consideration which, in the opinion of the Company's Board of Directors,
constitutes fair value for such Principal Property. (Section 1007)
8
<PAGE> 16
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Indenture provides that the Company may not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any person, unless (i) the successor corporation
shall be a corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia, and shall expressly
assume by a supplemental indenture the due and punctual payment of the principal
of, any premium on, and any interest on, all the outstanding Debt Securities and
the performance of every covenant in the Indenture on the part of the Company to
be performed or observed; (ii) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and such supplemental indenture
comply with the foregoing provisions relating to such transaction. (Section 801)
In case of any such consolidation, merger, conveyance or transfer, such
successor corporation will succeed to and be substituted for the Company as
obligor on the Debt Securities, with the same effect as if it had been named in
the Indenture as the Company. (Section 802) Other than the restrictions on
Mortgages described above, the Indenture and the Debt Securities do not contain
any covenants or other provisions designed to protect holders of Debt Securities
in the event of a highly leveraged transaction involving the Company or any
Subsidiary.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or any premium
on the Debt Securities of such series at maturity; (c) default in payment of any
sinking or purchase fund or analogous obligation, if any, on the Debt Securities
of such series; (d) default by the Company in the performance of any other
covenant or warranty contained in the Indenture for the benefit of such series
which shall not have been remedied for a period of 90 days after notice is given
as specified in the Indenture; and (e) certain events of bankruptcy, insolvency
and reorganization of the Company. (Section 501)
A default under other indebtedness of the Company will not be a default
under the Indenture and a default under one series of Debt Securities will not
necessarily be a default under another series. Any additions, deletions or other
changes to the Events of Default which will be applicable to a series of Debt
Securities will be described in the Prospectus Supplement relating to such
series of Debt Securities.
The Indenture provides that (i) if an Event of Default described in clause
(a), (b), (c) or (d) above (if the Event of Default under clause (d) is with
respect to less than all series of Debt Securities then outstanding) shall have
occurred and be continuing with respect to any series, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding (each such series acting as a
separate class) may declare the principal (or, in the case of Original Issue
Discount Securities, the portion thereof specified in the terms thereof) of all
outstanding Debt Securities of such series and the interest accrued thereon, if
any, to be due and payable immediately and (ii) if an Event of Default described
in clause (d) or (e) above (if the Event of Default under clause (d) is with
respect to all series of Debt Securities then outstanding) shall have occurred
and be continuing, either the Trustee or the holders of at least 25% in
aggregate principal amount of all Debt Securities then outstanding (treated as
one class) may declare the principal (or, in the case of Original Issue Discount
Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding and the interest accrued thereon, if any, to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal of,
any premium on, or any interest on, such Debt Securities and in compliance with
certain covenants) may be waived by the holders of a majority in aggregate
principal amount of the Debt Securities of such series then outstanding.
(Sections 502 and 513)
Under the Indenture the Trustee must give to the holders of each series of
Debt Securities notice of all uncured defaults known to it with respect to such
series within 90 days after such a default occurs (the term default to include
the events specified above without notice or grace periods); provided that,
except in the case
9
<PAGE> 17
of default in the payment of principal of, any premium on, or any interest on,
any of the Debt Securities, or default in the payment of any sinking or purchase
fund installment or analogous obligations, the Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interests of the holders of the Debt Securities of such
series. (Section 602)
No holder of any Debt Securities of any series may institute any action
under the Indenture unless (a) such holder shall have given the Trustee written
notice of a continuing Event of Default with respect to such series, (b) the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding shall have requested the Trustee to
institute proceedings in respect of such Event of Default, (c) such holder or
holders shall have offered the Trustee such reasonable indemnity as the Trustee
may require, (d) the Trustee shall have failed to institute an action for 60
days thereafter and (e) no inconsistent direction shall have been given to the
Trustee during such 60-day period by the holders of a majority in aggregate
principal amount of Debt Securities of such series. (Section 507)
The holders of a majority in aggregate principal amount of the Debt
Securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to such series of Debt
Securities. (Section 512) The Indenture provides that, in case an Event of
Default shall occur and be continuing, the Trustee, in exercising its rights and
powers under the Indenture, will be required to use the degree of care of a
prudent man in the conduct of his own affairs. (Section 601) The Indenture
further provides that the Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties under the Indenture unless it has reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is reasonably assured to it. (Section 601)
The Company must furnish to the Trustee within 120 days after the end of
each fiscal year a statement signed by one of certain officers of the Company to
the effect that a review of the activities of the Company during such year and
of its performance under the Indenture and the terms of the Debt Securities has
been made, and, to the best of the knowledge of the signatories based on such
review, the Company has complied with all conditions and covenants of the
Indenture or, if the Company is in default, specifying such default. (Section
1004)
If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for the purposes of determining whether the
holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the Trustee by an Officers' Certificate) as of the date the
taking of such action by the holders of such requisite principal amount is
evidenced to the Trustee as provided in the Indenture. (Section 104)
If any Debt Securities are Original Issue Discount Securities, then for the
purposes of determining whether the holders of the requisite principal amount of
Debt Securities have taken any action herein described, the principal amount of
such Debt Securities shall be deemed to be the portion of such principal amount
that would be due and payable at the time of the taking of such action upon a
declaration of acceleration of maturity thereof. (Section 101)
MODIFICATION OF THE INDENTURE
The Company and the Trustee may, without the consent of the holders of the
Debt Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes; (i) to evidence the succession of
another corporation to the Company, and the assumption by such successor of the
Company's obligations under the Indenture and the Debt Securities of any series;
(ii) to add covenants of the Company, or surrender any rights of the Company,
for the benefit of the holders of Debt Securities of any or all series; (iii) to
cure any ambiguity, omission, defect or inconsistency in such Indenture; (iv) to
establish the form or terms of any series of Debt Securities, including any
Subordinated Securities; (v) to evidence and provide for the acceptance of any
successor Trustee with respect to one or more series of Debt Securities or to
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facilitate the administration of the trusts thereunder by one or more trustees
in accordance with such Indenture; and (vi) to provide any additional Events of
Default (Section 901).
With certain exceptions, the Indenture or the rights of the holders of the
Debt Securities may be modified by the Company and the Trustee with the consent
of the holders of a majority in aggregate principal amount of the Debt
Securities of each series affected by such modification then outstanding, but no
such modification may be made without the consent of the holder of each
outstanding Debt Security affected thereby which would (i) change the maturity
of any payment of principal of, or any premium on, or any installment of
interest on any Debt Security, or reduce the principal amount thereof or the
interest or any premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any place of payment
where, or the coin or currency in which, any Debt Security or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof (or, in the
case of redemption or repayment, on or after the redemption date or the
repayment date, as the case may be), or (ii) reduce the percentage in principal
amount of the outstanding Debt Securities of any series, the consent of whose
holders is required for any such modification, or the consent of whose holders
is required for any waiver of compliance with certain provisions of the
Indenture or certain defaults thereunder and their consequences provided for in
the Indenture, or (iii) modify any of the provisions of certain Sections of the
Indenture, including the provisions summarized in this paragraph, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of each
outstanding Debt Security affected thereby. (Section 902)
DEFEASANCE OF THE INDENTURE AND DEBT SECURITIES
If the terms of any series of Debt Securities so provide, the Company will
be deemed to have paid and discharged the entire indebtedness on all the
outstanding Debt Securities of such series by (a) depositing with the Trustee
(i) as trust funds in trust an amount sufficient to pay and discharge the entire
indebtedness on all Debt Securities of such series for principal, premium and
interest or (ii) as obligations in trust such amount of direct obligations of,
or obligations the principal of and interest on which are fully guaranteed by,
the government which issued the currency in which the Debt Securities are
denominated as will, together with the income to accrue thereon without
consideration of any reinvestment thereof, be sufficient to pay and discharge
the entire indebtedness on all such Debt Securities for principal, premium and
interest and (b) satisfying certain other conditions precedent specified in the
Indenture. (Section 403) In the event of any such defeasance, holders of such
Debt Securities would be able to look only to such trust fund for payment of
principal of, any premium on, and any interest on their Debt Securities.
Such defeasance is likely to be treated as a taxable exchange by holders of
the relevant Debt Securities for an issue consisting of either obligations of
the trust or a direct interest in the cash and securities held in the trust,
with the result that such holders would be required for tax purposes to
recognize gain or loss as if such obligations or the cash or securities
deposited, as the case may be, had actually been received by them in exchange
for their Debt Securities. In addition, if the holders are treated as the owners
of their proportionate share of the cash or securities held in trust, such
holders would then be required to include in their income for tax purposes any
income, gain or loss attributable thereto even though no cash was actually
received. Thus, such holders might be required to recognize income for tax
purposes in different amounts and at different times than would be recognized in
the absence of defeasance. Prospective investors are urged to consult their own
tax advisors as to the specific consequences of defeasance.
CONCERNING THE TRUSTEE
Chemical Bank conducts normal banking relationships with the Company and
certain of its subsidiaries and, in addition, is a participant in various
financial agreements of the Company. Chemical Bank acts as trustee under certain
equipment trust agreements of the Company's railroad subsidiaries and trustee
under various indentures in respect of certain securities of the Company and its
subsidiaries.
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DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Revised Articles of
Incorporation, and the certificate of amendment relating to each series of the
Preferred Stock (the "Certificate of Amendment") which will be filed as an
exhibit to or incorporated by reference in the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such series of
the Preferred Stock.
The Company's Revised Articles of Incorporation authorize the issuance of
20,000,000 shares of Preferred Stock, without par value. No shares of Preferred
Stock are currently outstanding, and no shares are reserved for issuance. The
Company's Board of Directors is authorized to issue Preferred Stock in one or
more series from time to time, with such designations, preferences and relative
participating, optional or other special rights and qualifications, limitations
and restrictions thereof, as may be provided in resolutions adopted by the Board
of Directors. All shares of any one series of Preferred Stock shall be identical
in all respects, except that shares of any one series issued at different times
may differ as to the dates from which dividends thereon may be cumulative. All
series shall rank equally and shall provide for other terms as described in the
applicable Prospectus Supplement.
Preferred Stock of a particular series shall have the dividend,
liquidation, redemption, conversion and voting rights set forth below unless
otherwise provided in the Prospectus Supplement relating to such series.
Reference is made to the Prospectus Supplement relating to a particular series
of Preferred Stock for specific terms, including: (i) the distinctive serial
designation and the number of shares constituting such series; (ii) the dividend
rate or rates, the payment date or dates for dividends and the participating or
other special rights, if any, with respect to dividends; (iii) any redemption,
sinking fund or other analogous provisions applicable to such Preferred Stock;
(iv) the amount or amounts payable upon the shares of Preferred Stock in the
event of voluntary or involuntary liquidation, dissolution or winding up of the
Company prior to any payment or distribution of the assets of the Company to the
holders of any class or classes of stock which are junior in rank to the
Preferred Stock; (v) any terms for the conversion into or exchange for shares of
Common Stock, shares of Preferred Stock or Debt Securities and (vi) any other
specific terms of the Preferred Stock not inconsistent with the Company's
Revised Articles of Incorporation and any applicable Certificate of Amendment.
The term "class or classes of stock which are junior in rank to the Preferred
Stock" means the Common Stock and any other class or classes of stock of the
Company hereafter authorized which shall rank junior to the Preferred Stock as
to dividends or upon liquidation.
DIVIDENDS
Holders of Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds of the Company legally available
therefor, cash dividends payable on such dates in March, June, September and
December of each year and at such rates per share per annum as set forth in the
applicable Prospectus Supplement. The Prospectus Supplement will also indicate
the applicable record dates regarding the payment of dividends. The holders of
Preferred Stock shall be entitled to such cash dividends before any dividends on
any class or classes of stock junior in rank to Preferred Stock shall be
declared or paid or set apart for payment. Whenever dividends shall not have
been so paid or declared or set apart for payment upon all shares of each series
of Preferred Stock, such dividends shall be cumulative and shall be paid, or
declared and set apart for payment, before any dividends can be declared or paid
on any class or classes of stock of the Company junior in rank to the Preferred
Stock. Any such accumulations of dividends on Preferred Stock shall not bear
interest. The foregoing shall not apply to dividends payable in shares of any
class or classes of stock junior in rank to the Preferred Stock.
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<PAGE> 20
CONVERTIBILITY
No series of Preferred Stock will be convertible into, or exchangeable for,
shares of Common Stock, shares of Preferred Stock or any other class or classes
of stock of the Company or Debt Securities except as set forth in the related
Prospectus Supplement.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking, retirement or other analogous fund except as set forth in the related
Prospectus Supplement.
LIQUIDATION RIGHTS
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of any series of Preferred Stock will be entitled to
receive payment of or to have set aside for payment the liquidation amount per
share, if any, specified in the related Prospectus Supplement, in each case
together with any applicable accrued and unpaid dividends, before any
distribution to holders Common Stock. A voluntary sale, lease, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the Company's property or assets to, or a consolidation
or merger of the Company with, one or more corporations shall not be deemed to
be a liquidation, dissolution or winding up of the Company for purposes of this
paragraph.
VOTING RIGHTS
Except as provided below, holders of Preferred Stock shall be entitled to
one vote for each share held and shall vote together with the holders of Common
Stock as one class for the election of directors and upon all other matters
which may be voted upon by stockholders of the Company. Holders of Preferred
Stock shall possess cumulative voting rights in the election of directors. See
"Description of Common Stock -- Voting Rights" for a discussion of such
cumulative voting rights.
If dividends on the Preferred Stock shall be in arrears in an aggregate
amount at least equal to six quarterly dividends, then the holders of all series
of Preferred Stock, voting separately as one class, shall be entitled, at the
next annual meeting of the stockholders of the Company or at a special meeting
held in place thereof, or at a special meeting of the holders of the Preferred
Stock called as provided below, to elect two directors of the Company. While the
holders of Preferred Stock are so entitled to elect two directors of the
Company, they shall not be entitled to participate with the Common Stock in the
election of any other directors. Whenever all arrearages in dividends on the
Preferred Stock shall have been paid and dividends thereon for the current
quarterly period shall have been paid or declared and a sum sufficient for the
payment thereof set aside, then the right of the holders of the Preferred Stock
to elect two directors shall cease, provided that such voting rights shall again
vest in the case of any similar future arrearages in dividends.
At any time after the right to vote for two directors shall have so vested
in the Preferred Stock, the Secretary of the Company may, and upon the written
request of the holders of record of 10% or more of the shares of Preferred Stock
then outstanding, shall, call a special meeting of the holders of the Preferred
Stock for the election of the directors to be elected by them, to be held within
30 days after such call and at the place and upon the notice provided by law and
in the Company's bylaws for the holding of meetings of stockholders. The
Secretary shall not be required to call such meeting in the case of any such
request received less than 90 days before the date fixed for any annual meeting
of stockholders of the Company. If any such special meeting shall not be called
by the Secretary within 30 days after receipt of any such request, then the
holders of record of 10% or more of the shares of Preferred Stock then
outstanding may designate in writing one of their number to call such meeting,
and the person so designated may call such meeting to be held at the place and
upon the notice provided above, and for that purpose shall have access to the
stock ledger of the Company. No such special meeting and no adjournment thereof
shall be held on a date later than 30 days before the annual meeting of the
stockholders of the Company or a special meeting held in place thereof next
succeeding the time when the holders of the Preferred Stock become entitled to
elect directors as provided above.
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<PAGE> 21
If any meeting of the Company's stockholders shall be held while holders of
Preferred Stock are entitled to elect two directors as provided above, and if
the holders of at least a majority of the shares of Preferred Stock then
outstanding shall be present or represented by proxy at such meeting or any
adjournment thereof, then, by vote of the holders of at least a majority of the
shares of Preferred Stock present or so represented at such meeting, the then
authorized number of directors of the Company shall be increased by two and at
such meeting the holders of the Preferred Stock shall be entitled to elect the
additional directors so provided for, but no such additional director so elected
shall hold office beyond the annual meeting of the stockholders or a special
meeting held in place thereof next succeeding the time when the holders of the
Preferred Stock become entitled to elect two directors as provided above.
Whenever the holders of the Preferred Stock shall be divested of special voting
power as provided above, the terms of office of all persons elected as directors
by the holders of the Preferred Stock as a class shall forthwith terminate, and
the authorized number of directors of the Company shall be reduced accordingly.
The affirmative vote or consent of 66-2/3% of all shares of Preferred Stock
outstanding shall be required before the Company may (i) create any other class
or classes of stock prior in rank to the Preferred Stock, either as to dividends
or upon liquidation, or increase the number of authorized shares of such class
of stock, or (ii) amend, alter or repeal any provisions of the Company's Revised
Articles of Incorporation or any resolution adopted by the Board of Directors
providing for the issuance of any series of Preferred Stock so as to adversely
affect the preferences, rights or powers of the Preferred Stock. The affirmative
vote or consent of at least a majority of the shares of Preferred Stock at the
time outstanding shall be required for the Company to (i) increase the
authorized number of shares of Preferred Stock, (ii) create or increase the
authorized number of shares of any other class of stock ranking on a parity with
the Preferred Stock either as to dividends or upon liquidation, or (iii) sell,
lease or convey all or substantially all of the property or business of the
Company, or voluntarily liquidate, dissolve or wind up the Company, or merge or
consolidate the Company with any other corporation unless the resulting or
surviving corporation will have after such merger or consolidation no stock
either authorized or outstanding (except such stock of the corporation as may
have been authorized or outstanding immediately preceding such merger or
consolidation, or such stock of the resulting or surviving corporation as may be
issued in exchange therefor) prior in rank either as to dividends or upon
liquidation to the Preferred Stock or the stock of the resulting or surviving
corporation issued in exchange therefor. No consent of the holders of Preferred
Stock shall be required in connection with any mortgaging or other hypothecation
by the Company of all or any part of its property or business.
CERTAIN TRANSACTIONS
The Company's Revised Articles of Incorporation provide that certain
transactions between the Company and a beneficial owner of more than 10% of the
Company's voting stock (which includes Preferred Stock) must either (1) be
approved by a majority of the Company's voting stock other than that held by
such beneficial owner, (2) satisfy certain minimum price and procedural
criteria, or (3) be approved by a majority of the Company's directors who are
not related to such beneficial owner. The transactions covered by these
provisions include mergers, consolidations, sales or dispositions of assets,
adoption of a plan of liquidation or dissolution, or other transactions
increasing the proportionate share of such 10% beneficial owner.
MISCELLANEOUS
The Preferred Stock offered hereby has no preemptive rights, is not liable
for further assessments or calls and will be fully paid and nonassessable upon
issuance. Shares of Preferred Stock which have been issued and reacquired in any
manner by the Company shall resume the status of authorized and unissued shares
of Preferred Stock and shall be available for subsequent issuance. There are no
restrictions on repurchase or redemption of the Preferred Stock while there is
any arrearage in dividends or sinking fund installments except as may be set
forth in the related Prospectus Supplement.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for each series of Preferred Stock will be
described in the related Prospectus Supplement.
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DESCRIPTION OF COMMON STOCK
The following summary does not purport to be complete and is subject in all
respects to the applicable provisions of the Revised Business Corporation Law of
the State of Utah and the Company's Revised Articles of Incorporation. The
Company is presently authorized to issue 500,000,000 shares of Common Stock, par
value $2.50 per share. At April 25, 1995, an aggregate of 205,284,153 shares of
Common Stock were outstanding.
DIVIDENDS
Subject to the rights of holders of any Preferred Stock which may be
issued, the holders of Common Stock are entitled to receive dividends when, as
and if declared by the Board of Directors out of any funds legally available
therefor. The Company may not pay dividends on Common Stock (other than
dividends payable in Common Stock or any other class or classes of stock junior
in rank to the Preferred Stock as to dividends or upon liquidation) unless all
dividends accrued on outstanding Preferred Stock have been paid or declared and
set apart for payment.
VOTING RIGHTS
Except in the election of directors, holders of Common Stock are entitled
to one vote for each share held. Holders of Common Stock possess cumulative
voting rights in the election of directors. Accordingly, in the election of
directors each holder may accumulate his or her votes by giving one candidate as
many votes as shall equal the number of directors then being elected multiplied
by the number of his or her shares, or by distributing such votes on the same
principle among any number of such candidates. The Board of Directors is divided
into three classes with each class elected for successive three-year terms.
Except as provided in the related Prospectus Supplement, any series of Preferred
Stock will be entitled, with certain exceptions, to vote together with the
holders of Common Stock as one class. See "Description of Preferred
Stock -- Voting Rights."
LIQUIDATION RIGHTS
Any Preferred Stock would be senior to the Common Stock as to distributions
upon liquidation, dissolution or winding up of the Company. After distribution
in full of the preferential amounts to be distributed to holders of Preferred
Stock, holders of Common Stock will be entitled to receive all remaining assets
of the Company available for distribution to stockholders in the event of
voluntary or involuntary liquidation.
CERTAIN TRANSACTIONS
The Company's Revised Articles of Incorporation provide for certain voting
rights for the holders of the Company's voting stock (including Common Stock) in
the case of certain transactions between the Company and a beneficial owner of
more than 10% of the Company's voting stock. See "Description of Preferred Stock
- -- Certain Transactions."
MISCELLANEOUS
The Common Stock is not redeemable, has no preemptive or conversion rights
and is not liable for further assessments or calls. All shares of Common Stock
offered hereby will be fully paid and nonassessable.
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York will be the transfer agent and
registrar for the Common Stock until May 22, 1995, and thereafter Harris Trust &
Savings Bank will be such transfer agent and registrar. The Common Stock is
listed on the New York Stock Exchange.
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DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Preferred Stock. Securities Warrants may be issued independently
or together with any Debt Securities or shares of Preferred Stock offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities or shares of Preferred Stock. The Securities Warrants are to be
issued under Warrant Agreements to be entered into between the Company and
Chemical Bank, as Warrant Agent, or such other bank or trust company as is named
in the Prospectus Supplement relating to the particular issue of Securities
Warrants (the "Warrant Agent"). The Warrant Agent will act solely as an agent of
the Company in connection with the Securities Warrants and will not assume any
obligation or relationship of agency or trust for or with any holders of
Securities Warrants or beneficial owners of Securities Warrants. The following
summaries of certain provisions of the form of Warrant Agreement and Securities
Warrants do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the applicable Warrant
Agreement and the Securities Warrants.
GENERAL
If Securities Warrants are offered, the Prospectus Supplement will describe
the terms of the Securities Warrants, including the following: (i) the offering
price; (ii) the currency, currencies or currency units for which Securities
Warrants may be purchased; (iii) the designation, aggregate principal amount,
currency, currencies or currency units and terms of the Debt Securities
purchasable upon exercise of the Warrants and the price at which such Debt
Securities may be purchased upon such exercise; (iv) the designation, number of
shares and terms of the series of Preferred Stock purchasable upon exercise of
the Securities Warrants to purchase Preferred Stock and the price at which such
shares of Preferred Stock may be purchased upon such exercise; (v) if
applicable, the designation and terms of the Debt Securities or Preferred Stock
with which the Securities Warrants are issued and the number of Securities
Warrants issued with each such Debt Security or share of Preferred Stock; (vi)
if applicable, the date on and after which the Securities Warrants and the
related Debt Securities or Preferred Stock will be separately transferable;
(vii) the date on which the right to exercise the Securities Warrants shall
commence and the date (the "Expiration Date") on which such right shall expire;
(viii) whether the Securities Warrants will be issued in registered or bearer
form; (ix) a discussion of certain Federal income tax, accounting and other
special considerations, procedures and limitations relating to the Securities
Warrants; and (x) any other terms of the Securities Warrants.
Securities Warrants may be exchanged for new Securities Warrants of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the Prospectus Supplement.
Before the exercise of their Securities Warrants, holders of Securities Warrants
will not have any of the rights of holders of the Debt Securities or shares of
Preferred Stock purchasable upon such exercise, including the right to receive
payments of principal of, any premium on, or any interest on, the Debt
Securities purchasable upon such exercise or to enforce the covenants in the
Indenture or to receive payments of dividends, if any, on the Preferred Stock
purchasable upon such exercise or to exercise any applicable right to vote.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder to purchase such principal
amount of Debt Securities or such number of shares of Preferred Stock at such
exercise price as shall in each case be set forth in, or calculable from, the
Prospectus Supplement relating to the Securities Warrant. Securities Warrants
may be exercised at such times as are set forth in the Prospectus Supplement
relating to such Securities Warrants. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement relating thereto, Securities Warrants may be
exercised by delivery to the Warrant Agent of the certificate evidencing such
Securities Warrants properly completed and duly executed and of payment as
provided in the Prospectus Supplement of the amount required to purchase the
Debt Securities or shares of
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<PAGE> 24
Preferred Stock purchasable upon such exercise. The exercise price will be the
price applicable on the date of payment in full, as set forth in the Prospectus
Supplement relating to the Securities Warrants. Upon receipt of such payment and
the certificate representing the Securities Warrants to be exercised properly
completed and duly executed at the corporate trust office of the Warrant Agent
or any other office indicated in the Prospectus Supplement, the Company will, as
soon as practicable, issue and deliver the Debt Securities or shares of
Preferred Stock purchasable upon such exercise. If fewer than all of the
Securities Warrants represented by such certificate are exercised, a new
certificate will be issued for the remaining amount of Securities Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities offered hereby (i) through
underwriters or dealers; (ii) through agents; (iii) directly to purchasers; or
(iv) through a combination of any such methods of sale. Any such underwriter,
dealer or agent may be deemed to be an underwriter within the meaning of the
Securities Act. The Prospectus Supplement relating to the Offered Securities
will set forth their offering terms, including the name or names of any
underwriters, dealers or agents, the purchase price of the Offered Securities
and the proceeds to the Company from such sale, any underwriting discounts,
commissions and other items constituting compensation to underwriters, dealers
or agents, any initial public offering price, any discounts or concessions
allowed or reallowed or paid by underwriters or dealers to other dealers, and
any securities exchanges on which the Offered Securities may be listed.
If underwriters or dealers are used in the sale, the Offered Securities
will be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Offered Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Offered Securities
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid by underwriters or dealers to other
dealers may be changed from time to time.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or agents to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to any conditions set forth in the
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
by the Company to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will be described in an applicable
Prospectus Supplement. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for the Company in the ordinary
course of business.
Each series of Offered Securities other than Common Stock will be a new
issue of securities with no established trading market. Any underwriters to whom
Offered Securities are sold by the Company for public offering and sale may make
a market in such Offered Securities, but such underwriters will not be obligated
to
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<PAGE> 25
do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any Offered
Securities.
LEGAL OPINIONS
The validity of the Offered Securities will be passed upon for the Company
by Richard J. Ressler, Esquire, Assistant General Counsel of the Company, and
for the underwriters, dealers or agents, if any, by Cravath, Swaine & Moore,
Worldwide Plaza, 825 Eighth Avenue, New York, N.Y. 10019, unless otherwise
specified in the Prospectus Supplement. Mr. Ressler owns 5,141 shares of Common
Stock, including retention and restricted shares granted under the Company's
1993 Stock Option and Retention Stock Plan and 1990 Retention Stock Plan, and
holds options to purchase 47,350 additional shares of the Common Stock. Cravath,
Swaine & Moore has provided legal services from time to time to the Company and
its affiliates.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
as of December 31, 1994 and 1993 and for each of the years in the three-year
period ended December 31, 1994, incorporated in this Prospectus by reference
from Company's Annual Report on Form 10-K for the year ended December 31, 1994,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
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