<PAGE> 1
PROSPECTUS
$100,000,000
UNION TANK CAR COMPANY
6.60% EQUIPMENT TRUST CERTIFICATES (SERIES 24)
DUE FEBRUARY 15, 2009
Interest on the Certificates is payable on February 15 and August 15 of each
year, commencing August 15, 1994. The Certificates will amortize as to
principal, and principal is payable on February 15 of each year, commencing
February 15, 1995. The Certificates are not redeemable prior to maturity.
The Certificates will trade in the Same-Day Funds Settlement System of The
Depository Trust Company ("DTC"), and secondary market trading activity in the
Certificates will therefore be required by DTC to settle in immediately
available funds.
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.
<TABLE>
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Certificate.......................... 100.00% .625% 99.375%
Total.................................... $100,000,000 $625,000 $99,375,000
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from March 2, 1994.
(2) Before deducting expenses payable by the Company estimated to be $230,000.
The Certificates are offered by the Underwriter subject to prior sale, when, as
and if accepted by the Underwriter and subject to approval of certain legal
matters by Mayer, Brown & Platt, counsel for the Underwriter. It is expected
that delivery of the Certificates in book-entry form will be made through the
facilities of The Depository Trust Company on or before March 2, 1994 against
payment therefor in immediately available funds.
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SALOMON BROTHERS INC
- --------------------------------------------------------------------------------
The date of this Prospectus is February 24, 1994.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
AVAILABLE INFORMATION
Union Tank Car Company (with its wholly-owned subsidiaries herein
collectively referred to, unless the context otherwise requires, as the
"Company") has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") with respect to the Certificates under the Securities Act of 1933,
as amended (the "Act"). This Prospectus, which forms a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the
Certificates and the Company, reference is made to the Registration Statement.
Any statement contained herein concerning the provisions of any document is not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission.
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 Commission. Information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and New York Regional Office, 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, as amended (the "1992 Annual Report"), and its Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1993, June 30, 1993 and September 30,
1993, all as filed with the Commission pursuant to the Exchange Act, are
incorporated herein by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Certificates shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein 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 written or oral request of such person, a copy
(without exhibits) of any or all documents incorporated by reference in this
Prospectus. Requests for such copies should be directed to the General Counsel
and Secretary, Union Tank Car Company, 225 West Washington Street, Chicago,
Illinois 60606, telephone (312) 372-9500.
2
<PAGE> 3
THE COMPANY
The Company is principally engaged in the leasing of railway tank cars and
other rail cars to United States, Canadian and Mexican manufacturers and other
shippers of chemical products, including liquid fertilizers, petroleum products,
including liquified petroleum gas, food products and bulk plastics. The Company
owns and operates one of the largest fleets of privately-owned railway tank cars
in the world.
The Company, which was incorporated in Delaware in 1980 and is the
successor to a business which was incorporated in New Jersey in 1891 and
reincorporated in Delaware in 1968, is a wholly-owned subsidiary of Marmon
Industrial Corporation, an indirect wholly-owned subsidiary of Marmon Holdings,
Inc. Substantially all the stock of Marmon Holdings, Inc. is owned, directly or
indirectly, by trusts for the benefit of certain members of the Pritzker family.
As used herein, "Pritzker family" refers to the lineal descendants of Nicholas
J. Pritzker, deceased.
The Company's principal executive offices are located at 225 West
Washington Street, Chicago, Illinois 60606, and its telephone number is (312)
372-9500.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Certificates will be
used to provide long-term financing for the addition of rail cars with an
aggregate cost of approximately $133,333,333 to the Company's fleet. These rail
cars were initially financed by the issuance of commercial paper and with cash
provided by operating activities.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at September 30, 1993 and as adjusted to give effect to the issuance of
the Certificates.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1993
---------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BORROWED DEBT:
Commercial paper (average yield 3.28%) (net of $188 discount).... $ 70,312(1) $ 70,312
Equipment obligations, payable periodically through 2008 at
6.50%-15.55% (average rate 10.00% at September 30, 1993)...... 747,447 847,447
Senior notes, 9.75% due in 1997.................................. 143,000 143,000
Other long-term borrowings (average rate 12.04%)................. 31,191 31,191
----------- -----------
Total borrowed debt(2)........................................ 991,950 1,091,950
STOCKHOLDER'S EQUITY:
Common stock, no par value; 1,000 shares authorized and issued... 106,689 106,689
Additional capital............................................... 4,652 4,652
Retained earnings................................................ 369,518 369,518
----------- -----------
Total stockholder's equity.................................... 480,859 480,859
----------- -----------
Total capitalization........................................ $ 1,472,809 $ 1,572,809
----------- -----------
----------- -----------
</TABLE>
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(1) $55.8 million at January 31, 1994.
(2) The Company also has available a credit facility which provides up to an
aggregate of $150 million as a liquidity back-up for the Company's
commercial paper program and (to the extent not so used) for general
corporate purposes. No amounts are currently outstanding under this
facility. All borrowings under this facility are guaranteed by Marmon
Industrial Corporation; however, Marmon Industrial Corporation does not
guarantee payment of the Company's commercial paper obligations.
3
<PAGE> 4
SELECTED FINANCIAL INFORMATION
The selected financial information set forth below as of December 31, 1988
through 1992 and for the years then ended, with the exception of the operating
fleet data, has been derived from the Company's audited financial statements
contained in the Company's Annual Reports on Form 10-K. The audited financial
statements contained in the 1992 Annual Report, together with the reports of the
Company's independent auditors, are incorporated herein by reference. See
"Incorporation of Certain Documents by Reference." The selected financial data
set forth below as of September 30, 1993 and 1992 and for the nine months then
ended, with the exception of the ratios of earnings to fixed charges and the
operating fleet data, were extracted from the Company's unaudited financial
statements contained in the Company's Quarterly Reports on Form 10-Q for the
quarters ended September 30, 1992 and September 30, 1993, the latter of which is
incorporated herein by reference. Interim results are not necessarily indicative
of the results for the full year. The selected financial information should be
read in conjunction with such financial statements and related notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the 1992 Annual Report and in the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1993.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
Services and net sales(1)............ $ 373,518 $ 484,495 $ 608,168 $ 473,004 $ 453,133 $ 467,993 $ 443,110
Other income......................... 13,860 17,279 30,514 45,876 52,792 45,026 44,515
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues....................... 387,378 501,774 638,682 518,880 505,925 513,019 487,625
Cost of services and sales........... 208,505 319,531 398,478 267,806 250,531 250,548 248,488
General and administrative........... 40,566 38,838 53,609 52,560 55,117 61,034 49,548
Interest expense..................... 72,693 80,197 105,417 117,263 115,584 100,119 98,476
Income before income taxes,
extraordinary loss and cumulative
effect of a change in accounting
principle.......................... 65,614 63,208 81,178 81,251 84,693 101,318 91,113
Income before extraordinary loss and
cumulative effect of a change in
accounting principle............... 33,959 38,333 48,382 45,024 40,072 62,351 54,377
Extraordinary loss(2)................ -- -- -- -- (15,292) -- --
Income before cumulative effect of a
change in accounting principle..... 33,959 38,333 48,382 45,024 24,780 62,351 54,377
Cumulative effect of a change in
accounting principle(3)............ 80,000 -- -- -- (2,640) -- --
Net income........................... 113,959 38,333 48,382 45,024 22,140 62,351 54,377
BALANCE SHEET(4)
Total assets......................... 2,084,877 2,140,420 2,063,267 2,253,760 2,195,171 1,958,406 1,871,567
Borrowed debt........................ 991,950 1,003,364 942,907 1,131,558 1,107,746 906,647 858,639
Stockholder's equity................. 480,859 442,851 445,900 430,518 416,494 410,354 391,003
OTHER
Ratio of earnings to fixed
charges(5)......................... 1.89 1.78 1.76 1.69 1.73 2.00 1.92
OPERATING FLEET(4)
Tank cars............................ 50,549 49,385 49,580 48,837 47,998 48,288 47,541
Other railway cars................... 13,428 14,495 13,633 14,334 13,694 13,378 13,217
</TABLE>
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(1) In May 1992, the Company entered into several sale-leaseback transactions
pursuant to which it sold (at approximately book value) approximately 2,100
rail cars. As a result of these transactions, the Company recorded sales
revenue of $124.9 million, which accounts for the unusually high sales and
cost of sales figures in 1992 as compared to other periods.
(2) Extraordinary loss resulted from the early extinguishment of debt and is net
of $9,183 of income tax benefit.
4
<PAGE> 5
(3) The $80 million cumulative effect of a change in accounting principle for
the nine months ended September 30, 1993 results from the Company's adoption
of Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes." As more fully discussed in the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1993, effective January 1,
1993, the Company prospectively adopted the provisions of this new
accounting standard and, accordingly, changed to the asset and liability
approach of accounting for income taxes. The cumulative effect of this
change in accounting principle is an $80 million non-cash credit to
earnings, which represents the new, lower net deferred income tax liability
calculated under the new accounting method as compared to the net liability
recorded under the former income tax accounting method. Adoption of the new
accounting method had no impact on pre-tax income and has not and will not
impact cash flows related to income taxes.
The $2.6 million cumulative effect of a change in accounting principle (net
of $1.4 million tax benefit) for the year ended December 31, 1990 represents
a charge to earnings for the adoption of SFAS No. 106, "Employers'
Accounting for Postretirement Benefits."
(4) As of the end of the period.
(5) The ratio of earnings to fixed charges represents the number of times that
interest expense, amortization of debt discount and the interest component
of rent expense were covered by income before income taxes and such
interest, amortization and the interest component of rentals. In addition to
fluctuations in the ratio of earnings to fixed charges resulting from
changes in the Company's operations, the ratio of earnings to fixed charges
for the periods after 1989 was reduced because of, and will continue to be
affected by, the incurrence of additional interest expense relating to the
Company's commercial paper program.
DESCRIPTION OF THE CERTIFICATES
The Certificates offered hereby are to be issued under and pursuant to the
provisions of an Equipment Trust Agreement (the "Agreement") to be dated as of
February 15, 1994 between The First National Bank of Chicago, as trustee (the
"Trustee"), and the Company, creating Union Tank Car Company Equipment Trust
(Series 24) (the "Trust"). The statements under this caption are a summary only
and do not purport to be complete. The summary makes use of terms defined in,
and is qualified in its entirety by reference to all of the provisions of, the
Certificates and the Agreement, the form of which are filed as exhibits to the
Registration Statement. Citations to the relevant section of the Agreement
appear below in parenthesis.
GENERAL
The Certificates will be limited to $100,000,000 aggregate principal amount
(all of which are being offered hereby) and will be issued by the Trustee
against the deposit with the Trustee of a like amount of Deposited Cash. Each of
the Certificates will represent an interest equal to its principal amount in the
Trust. There will be endorsed upon the Certificates prior to their issuance the
Company's unconditional guaranty of the prompt payment when due of the principal
of and interest on the Certificates. (Sections 2.01, 2.02, 7.01)
The Certificates will be issued in fully registered form only, in
denominations of $1,000 or any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of Certificates, but
the Trustee will require payment of a sum sufficient to reimburse it for any tax
or other governmental charges that may be imposed in connection therewith.
(Sections 2.02, 2.03, 2.06)
The Certificates will be registered in the name of Cede & Co. ("Cede"), as
the nominee of The Depository Trust Company ("DTC"). No person acquiring an
interest in the Certificates (a "Certificate Owner") will be entitled to receive
a certificate representing such person's interest in the Certificates, except as
set forth below under "--Registered Certificates." Unless and until Registered
Certificates are issued under the limited circumstances described herein, all
references to actions by holders shall refer to actions taken by DTC upon
instructions from DTC Participants (as defined below), and all references herein
to payments of principal or interest, notices, reports and statements to holders
shall refer, as the case may be, to payments, notices, reports and statements to
DTC or Cede, as the registered holder of the Certificates, or to DTC
Participants for distribution to Certificate Owners in accordance with DTC
procedures. (Sections 2.03, 3.01)
5
<PAGE> 6
The Agreement does not contain any financial or operating covenants or any
"event risk" provisions specifically designed to afford Certificate Owners
protection in the event of a highly leveraged transaction which may or may not
result in a change of control of the Company. However, the Certificate Owners
have the indirect benefit of, among other things, title to the Trust Equipment
as well as the Company's full and unconditional guarantee of the payment as and
when due of the principal of and interest on the Certificates.
BOOK-ENTRY REGISTRATION
DTC has advised the Company that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to Section
17A of the Exchange Act. DTC was created to hold securities for its participants
("DTC Participants") and to facilitate the clearance and settlement of
securities transactions between DTC Participants through electronic
book-entries, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers (including
Salomon Brothers Inc), banks, trust companies and clearing corporations.
Indirect access to the DTC system also is available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a DTC Participant either directly or indirectly ("Indirect
Participants").
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Certificates may do so only through DTC Participants and Indirect
Participants. In addition, Certificate Owners will receive all payments of
principal and interest from the Trustee through DTC Participants or Indirect
Participants, as the case may be. Under a book-entry format, Certificate Owners
may experience some delay in their receipt of payments, as such payments will be
forwarded by the Trustee to Cede, as nominee for DTC. DTC will forward such
payments to DTC Participants, which thereafter will forward them to Indirect
Participants or Certificate Owners, as the case may be, in accordance with
customary industry practices. The forwarding of such distributions to the
Certificate Owners will be the responsibility of such DTC Participants. The only
"holder," as such term is defined in the Agreement, will be Cede, as nominee of
DTC. Certificate Owners will not be recognized by the Trustee as holders, and
Certificate Owners will be permitted to exercise the rights of holders only
indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Certificates among DTC Participants on whose behalf it acts with respect to the
Certificates and to receive and transmit payments of principal of and interest
on the Certificates. DTC Participants and Indirect Participants with which
Certificate Owners have accounts with respect to the Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificate Owners. Accordingly, although Certificate
Owners will not possess Certificates, the Rules provide a mechanism by which
Certificate Owners will receive payments and will be able to transfer their
interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants or Certificate Owners, as the case may be, the
ability of a Certificate Owner to pledge Certificates to persons or entities
that do not participate in the DTC system, or to otherwise act with respect to
such Certificates, may be limited due to the lack of a physical certificate for
such Certificates.
DTC has advised the Company that it will take any action permitted to be
taken by a holder under the Agreement only at the direction of one or more DTC
Participants to whose accounts with DTC the Certificates are credited, which DTC
Participants represent the percentage interest of the Trust necessary to provide
such direction under the Agreement. Additionally, DTC may take conflicting
actions with respect to an undivided interest held by a DTC Participant to the
extent that it is directed to do so by such DTC Participant as a result of
instructions from various Certificate Owners.
6
<PAGE> 7
Neither the Company nor the Trustee will have any liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Certificates held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
REGISTERED CERTIFICATES
The Certificates will be issued in fully registered, certificated form
("Registered Certificates") to Certificate Owners or their nominees, rather than
to DTC or its nominee, only if (i) the Company advises the Trustee in writing
that DTC (or a successor thereto) is no longer willing or able to discharge
properly its responsibilities as depository with respect to the Certificates and
the Trustee or the Company is unable to locate a qualified successor, (ii) the
Company, at its option, elects to terminate the book-entry system through DTC
(or a successor thereto) or (iii) after the occurrence of an Event of Default
(as hereinafter defined), Certificate Owners representing an aggregate
percentage interest in the Trust of not less than a majority advise the Trustee
through DTC in writing that the continuation of a book-entry system through DTC
(or a successor thereto) is no longer in the Certificate Owners' best interest.
(Section 3.01)
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will be required to notify all Certificate Owners through
DTC Participants of the availability of Registered Certificates. Upon surrender
by DTC of the certificates representing the Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Certificates as
Registered Certificates to Certificate Owners or their nominees. (Section 3.01)
Payment of principal of and interest on the Certificates will thereafter be
made by the Trustee directly to holders of Registered Certificates in accordance
with the procedures set forth in the Agreement. Such payments will be made by
check mailed to the address of such holder as it appears on the register
maintained by the Trustee. The final payment on any Certificate, however, will
be made only upon presentation and surrender of such Certificate at the office
or agency specified in the notice of final payment to holders of Certificates.
(Section 2.02)
Registered Certificates will be freely transferable and exchangeable at the
office of the Trustee upon compliance with the requirements set forth in the
Agreement. No service charge will be imposed for any registration of transfer or
exchange, but payment of a sum sufficient to cover any tax or other governmental
charge will be required. (Section 2.06)
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Certificates will be required to be made in immediately
available funds. All payments of principal of and interest on the Certificates
made by the Company will be in immediately available funds and will be paid to
DTC in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. Secondary trading in
securities such as the Certificates is generally settled in immediately
available funds. The Certificates will trade in DTC's Same-Day Funds Settlement
System, and secondary market trading activity in the Certificates will therefore
be required by DTC to settle in immediately available funds.
PAYMENT OF PRINCIPAL AND INTEREST
The Certificates will amortize as to principal, and principal in the amount
of $6,666,000 ($6,676,000 in 2009) is payable on February 15 of each year,
commencing February 15, 1995. Interest will accrue on the Certificates at the
rate specified on the cover page of this Prospectus from the date of issuance,
payable semiannually on February 15 and August 15 in each year, commencing
August 15, 1994, to the holders of record of the Certificates as of the Business
Day preceding such payment date. (Section 2.02)
7
<PAGE> 8
GUARANTEE
The Company will fully and unconditionally guarantee the prompt payment
when due of the principal of and interest on the Certificates.
REDEMPTION
The Certificates are not redeemable prior to maturity.
SECURITY FOR CERTIFICATES
The Agreement will provide for the sale to the Trustee of railway tank cars
and other rail cars of the types used in the Company's business having an
aggregate Cost of not less than $133,333,333 (133 1/3% of the principal amount
of Certificates). (Section 4.01) None of the Equipment to be initially subject
to the Trust will have been in use prior to April 1, 1993. For the purpose of
determining the Cost of any unit of Equipment built by the Company or any of its
affiliates, so-called "car builder's cost" (which includes direct cost of labor
and material and overhead, but excludes any manufacturing profit) will be used;
otherwise the actual cost to the Company will be used. (Sections 1.01, 4.01,
4.04) Of the Equipment which the Company initially proposes to subject to the
Trust, all of the tank cars have been built by the Company or by a wholly-owned
subsidiary of the Company, and substantially all of the other rail cars have
been built by other manufacturers.
When and as any of the Trust Equipment shall be delivered to the Trustee,
the Trustee will pay to the Company out of Deposited Cash an amount which will
not exceed 75% of the aggregate Cost (without deduction for depreciation) of
such Trust Equipment, and the balance of the Cost will be paid by the Trustee
from advance rentals paid by the Company to the Trustee. (Sections 4.02, 4.03)
Until so paid out, Deposited Cash and other funds held by the Trustee pending
delivery to it of Trust Equipment may be invested, at the risk of the Company,
in direct obligations of the United States, in certain obligations guaranteed by
the United States, in certificates of deposit or time deposits, in certain money
market or common trust funds or in prime commercial paper. (Sections 1.01, 9.05)
The Agreement will contain provisions requiring the Company to cause the
Agreement and each supplement thereto, promptly after the execution and delivery
of the Agreement and each such supplement, to be recorded with the Interstate
Commerce Commission and the Registrar General of Canada. In addition, the
Company will be required to take similar actions in all other jurisdictions
required by law or reasonably requested by the Trustee for the purposes of
proper protection of the Trustee's title to the Trust Equipment and the rights
of the Certificate Owners; provided, however, that the Company shall not be
required so to record in any jurisdiction if (1) in the opinion of the Company
such recording would be unduly burdensome, and (2) after giving effect to such
failure to record, the Company has taken all action required by law to protect
the title of the Trustee to Trust Equipment subject to the Trust having a Value
(defined as the greater of (a) the fair market value of such Trust Equipment and
(b) the cost thereof less 1/20th of such cost for each year the Trust Equipment
has been in use) of not less than 90% of the Value of all such Trust Equipment.
(Section 7.03)
The Agreement will provide for the lease to the Company of all the Trust
Equipment for a period commencing March 2, 1994 and ending February 15, 2009.
The rent and other amounts payable by the Company will be sufficient to pay when
due the principal of and interest on the Certificates, as well as all the
expenses of the Trust and certain other charges. After all payments which are
required to be made pursuant to the Agreement by the Company shall have been
fully made, such payments shall be treated as purchase money as the full
purchase price of the Trust Equipment, and title to all such Trust Equipment
shall vest in the Company. (Sections 5.01, 5.04, 5.05) The Agreement will also
provide for the use of the Trust Equipment in the Company's business, including
the sublease thereof to others subject to the terms and conditions of the
Agreement. (Section 5.09)
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<PAGE> 9
MAINTENANCE, RELEASE AND SUBSTITUTION OF EQUIPMENT
The Company will be required to maintain and keep the Trust Equipment in
good order and proper repair unless and until it becomes worn out, unsuitable
for use, lost or destroyed (a "Casualty Occurrence"). The Agreement will provide
that, whenever Trust Equipment having a Value of $750,000 or 1% of the principal
amount of Certificates then outstanding, whichever is less, shall have suffered
a Casualty Occurrence, the Company shall either deposit with the Trustee an
amount in cash equal to the Value of such Trust Equipment as of the date of the
Casualty Occurrence or convey to the Trustee units of Equipment with a Value not
less than the Value of the units suffering such Casualty Occurrence as of the
date of the Casualty Occurrence. (Section 5.06)
The Agreement will provide that if the aggregate Cost of the Trust
Equipment initially delivered by the Company to the Trustee shall exceed
133 1/3% of the principal amount of Certificates issued pursuant to the
Agreement, then the Trustee, upon request of the Company shall release Trust
Equipment from the Trust having an aggregate Cost of not more than the amount of
such excess. (Section 4.04)
The Agreement will provide for the release by the Trustee of any Trust
Equipment upon request of the Company and upon (a) the conveyance to the Trustee
of other Equipment (irrespective of when first put into use) of a Value not less
than the Value of the Trust Equipment to be released or (b) the payment to the
Trustee of cash in an amount not less than the Value of the Trust Equipment to
be released. Any cash so deposited (and any cash deposited as provided in the
second preceding paragraph) will be paid over by the Trustee to the Company
against the conveyance to the Trustee of additional Equipment having a Value not
less than the amount of cash to be paid over. (Sections 5.06, 5.08)
INFORMATION CONCERNING THE TRUSTEE
The First National Bank of Chicago ("First Chicago") will be the Trustee.
First Chicago serves as trustee under various equipment trust certificates
and other secured obligations of the Company. In addition, First Chicago is a
participant in a $150 million credit facility which has been extended to Marmon
Industrial Corporation and the Company as a liquidity back-up for the Company's
commercial paper program. No amounts are currently outstanding under this
facility. First Chicago also provides customary banking services, including
commercial credit facilities and standby letters of credit, to the Company and
certain of its affiliates.
EVENTS OF DEFAULT AND PROVISIONS RELATING THERETO
Events of Default will be defined in the Agreement as being: default for
more than 10 Business Days in the payment of any rental payable under the
Agreement; any unauthorized transfer of the Company's rights under the
Agreement, continuing as provided therein; any unauthorized transfer, sublease
or parting with the possession of any of the Trust Equipment, continuing as
provided therein; any failure or refusal to perform any other covenant in the
Agreement for the shorter of (i) 60 days after the Trustee shall have demanded
in writing such performance and (ii) 30 days after the Company has knowledge of
any such failure; certain events of bankruptcy; or the termination of the lease
provided for in the Agreement by operation of law or by the Trustee in the event
of any unauthorized assignment or transfer of the Company's rights under the
Agreement or any unauthorized transfer or sublease of any of the Trust
Equipment. (Section 6.01) The appointment of a receiver or trustee in bankruptcy
or reorganization for the Company or for its property will be deemed to be an
unauthorized assignment if, prior to the exercise of the remedies of the Trustee
under the Agreement, such receiver or trustee shall not be discharged or duly
assume the Company's obligations under the Agreement. (Section 6.01) The
Agreement will provide that the Trustee shall, promptly after the occurrence of
any Event of Default known to it, give to holders notice of the occurrence
thereof. However, unless such default is the failure to make payments in respect
of the principal of or interest on any of the Certificates, the Trustee shall be
protected in withholding such notice if and so long as
9
<PAGE> 10
the Trustee in good faith determines that the withholding of such notice is in
the interest of the holders. (Section 6.07)
In the event of the bankruptcy or reorganization of the Company, the right
of the Trustee to repossess or dispose of Trust Equipment would be subject to
the provisions of the Bankruptcy Code of 1978, as amended, applicable to
industrial companies generally, and not those provisions applicable to
railroads, particularly Section 1168 thereof.
Upon the happening of an Event of Default, the Trustee or the holders of
more than 50% in aggregate principal amount of the outstanding Certificates may
declare the principal of the Certificates and all accrued interest thereon to be
due and payable. Subject to certain conditions, however, any such declaration
may be rescinded by the holders of a majority in principal amount of the
outstanding Certificates upon payment by the Company of all sums then due
otherwise than by acceleration. Prior to such declaration, the holders of more
than 50% in principal amount of the outstanding Certificates may waive any past
Event of Default, except an Event of Default in the payment of rentals due in
respect of the principal of or interest on the Certificates. (Sections 6.02,
6.04)
The right of any holder to institute action for any remedy under the
Agreement (except his right to enforce payment of the principal of and interest
on his Certificate when due if such enforcement will not impair the Trustee's
title to the Trust Equipment) will be subject to certain conditions precedent,
including a written request by the holders of more than 50% in principal amount
of the outstanding Certificates to the Trustee to take action, and an offer to
the Trustee of reasonable indemnification against liabilities incurred by it in
so doing. (Sections 6.08, 6.09)
The Agreement will require the annual filing by the Company with the
Trustee of a certificate as to the absence of default and as to compliance with
the terms of the Agreement. (Section 5.08)
UNDERWRITING
Under the terms of and subject to the conditions contained in an
Underwriting Agreement dated the date hereof, Salomon Brothers Inc (the
"Underwriter") has agreed to purchase the entire $100,000,000 principal amount
of Certificates offered hereby.
The Underwriting Agreement provides that the obligation of the Underwriter
to pay for and accept delivery of the Certificates is subject to, among other
things, the approval of certain legal matters by its counsel and certain other
conditions. The Underwriter is obligated to take and pay for all of the
Certificates if any are taken.
The Underwriter proposes to offer the Certificates to the public initially
at the public offering price set forth on the cover of this Prospectus and may
offer a portion of the Certificates to certain dealers at such price less a
concession not in excess of .375%. The Underwriter may allow, and such dealers
may reallow, concessions not in excess of .25% to certain other dealers. After
the initial public offering, the public offering price and such concessions may
be changed.
The Company has agreed to indemnify the Underwriter and the Underwriter has
agreed to indemnify the Company against certain liabilities, including
liabilities under the Act.
The Company does not intend to apply for listing of the Certificates on a
national securities exchange, but has been advised by the Underwriter that the
Underwriter presently intends to make a market in the Certificates, as permitted
by applicable laws and regulations. The Underwriter is not obligated, however,
to make a market in the Certificates and any such market making may be
discontinued at any time at the sole discretion of the Underwriter. Accordingly,
no assurance can be given as to the liquidity of, or trading markets for, the
Certificates.
LEGAL OPINIONS
The validity of the Certificates is being passed upon for the Company by
Neal Gerber & Eisenberg, Chicago, Illinois, and for the Underwriter by Mayer,
Brown & Platt, New York, New York.
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<PAGE> 11
EXPERTS
The consolidated financial statements and the related schedules of the
Company included in its 1992 Annual Report at December 31, 1992 and for each of
the two years in the period then ended, have been audited by Ernst & Young,
independent auditors, and for the year ended December 31, 1990, have been
audited by Arthur Andersen & Co., independent auditors, as set forth in their
respective reports thereon which are incorporated herein by reference. The
reports on such consolidated financial statements and related schedules are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
11
<PAGE> 12
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE COMPANY OR BY THE UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION 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 ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 3
Capitalization......................... 3
Selected Financial Information......... 4
Description of the Certificates........ 5
Underwriting........................... 10
Legal Opinions......................... 10
Experts................................ 11
</TABLE>
$100,000,000
UNION TANK CAR COMPANY
6.60% EQUIPMENT TRUST
CERTIFICATES (SERIES 24)
DUE FEBRUARY 15, 2009
- ----------------------------------------------------
SALOMON BROTHERS INC
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PROSPECTUS
DATED FEBRUARY 24, 1994
