OVERNITE CORP, S-1/A, 1998-07-13

OVERNITE CORP
S-1/A, 1998-07-13
TRUCKING (NO LOCAL)

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1998

REGISTRATION NO. 333-53169

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

---------------

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

---------------
OVERNITE CORPORATION
(Exact name of Registrant as specified in its charter)

VIRGINIA 6719 APPLIED FOR
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code) Identification Number)
incorporation or
organization)
1000 SEMMES AVENUE
P.O. BOX 1216
RICHMOND, VIRGINIA 23218
(804) 231-8000
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)

---------------
MR. PATRICK D. HANLEY
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
1000 SEMMES AVENUE
P.O. BOX 1216
RICHMOND, VIRGINIA 23218
(804) 231-8000
(Name, address, including zip code and telephone number, including area code,
of agent for service)

---------------

Copies to:

DAVID M. CARTER, ESQ. WILLIAM P. ROGERS, JR., ESQ.
HUNTON & WILLIAMS CRAVATH, SWAINE & MOORE
RIVERFRONT PLAZA, EAST TOWER 825 EIGHTH AVENUE
951 EAST BYRD STREET NEW YORK, NEW YORK 10019
RICHMOND, VIRGINIA 23219 (212) 474-1270
(804) 788-8200

---------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]

---------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

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<PAGE>

EXPLANATORY NOTE

This registration statement contains two forms of prospectus: one to be used
in connection with a United States and Canadian offering of the registrant's
Common Stock (the "U.S. Prospectus") and one to be used in connection with a
concurrent international offering of the Common Stock (the "International
Prospectus" and, together with the U.S. Prospectus, the "Prospectuses"). The
International Prospectus will be identical to the U.S. Prospectus except that
it will have a different front cover page. The U.S. Prospectus included herein
is followed by the front cover page to be used in the International
Prospectus. The front cover page for the International Prospectus included
herein has been labeled "Alternate Cover Page for International Prospectus."

If required pursuant to Rule 424(b) of the General Rules and Regulations
under the Securities Act of 1933, as amended, ten copies of each of the
Prospectuses in the forms in which they are used will be filed with the
Securities and Exchange Commission.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

PROSPECTUS (Subject to Completion)

Issued July 13, 1998
33,600,000 Shares
[LOGO OF OVERNITE CORPORATION](R)
COMMON STOCK
-----------

OF THE 33,600,000 SHARES OF COMMON STOCK OFFERED HEREBY, 26,880,000 SHARES ARE
BEING OFFERED INITIALLY IN THE UNITED STATES AND CANADA BY THE U.S.
UNDERWRITERS AND 6,720,000 SHARES ARE BEING OFFERED INITIALLY OUTSIDE THE
UNITED STATES AND CANADA BY THE INTERNATIONAL UNDERWRITERS. SEE
"UNDERWRITERS." ALL OF THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING
SOLD BY THE COMPANY. THE NET PROCEEDS FROM THE OFFERING WILL BE USED BY THE
COMPANY (I) TOGETHER WITH BORROWINGS UNDER A BANK CREDIT FACILITY, TO
PURCHASE INDIRECTLY FROM UNION PACIFIC CORPORATION ("UPC") ALL OF THE
OUTSTANDING SHARES OF COMMON STOCK OF OVERNITE TRANSPORTATION COMPANY AND
(II) TO THE EXTENT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS EXERCISED,
TO REPAY A PORTION OF THE INDEBTEDNESS UNDER SUCH FACILITY. PRIOR TO THE
OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK OF THE
COMPANY. IT IS CURRENTLY ESTIMATED THAT THE INITIAL PUBLIC OFFERING
PRICE PER SHARE WILL BE BETWEEN $12 AND $14. SEE "UNDERWRITERS" FOR
A DISCUSSION OF THE FACTORS TO BE CONSIDERED IN DETERMINING THE
INITIAL PUBLIC OFFERING PRICE.
-----------

THE COMMON STOCK HAS BEEN APPROVED FOR QUOTATION ON THE NASDAQ NATIONAL MARKET
SYSTEM UNDER THE SYMBOL "OVNT."
-----------

SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-----------

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.
-----------
PRICE $ A SHARE
-----------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
-------- -------------- -----------
<S> <C> <C> <C>
Per Share................................... $ $ $
Total (3)................................... $ $ $
</TABLE>
- -----
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.

(2) Before deducting certain expenses payable by the Company estimated at
$1,570,000. Certain other expenses of the Offering will be paid by UPC.

(3) The Company has granted the U.S. Underwriters an option, exercisable within
30 days of the date hereof, to purchase up to an aggregate of 3,360,000
additional shares of Common Stock at the price to public less underwriting
discounts and commissions for the purpose of covering over-allotments, if
any. If the U.S. Underwriters exercise such option in full, the total price
to public, underwriting discounts and commissions and proceeds to the
Company will be $ , $ and $ , respectively. See "Underwriters."
-----------

The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriters named herein and subject to approval of certain legal matters
by Cravath, Swaine & Moore, counsel for the Underwriters. It is expected that
delivery of the Shares will be made on or about August , 1998 at the office of
Morgan Stanley & Co. Incorporated, New York, N.Y., against payment therefor in
immediately available funds.
-----------

MORGAN STANLEY DEAN WITTER
CREDIT SUISSE FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
Securities Corporation
MERRILL LYNCH & CO.
, 1998
<PAGE>

[Map of Company's system including locations of service centers]
<PAGE>

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE COMMON STOCK OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------

UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
----------------

For investors outside the United States: No action has been or will be taken
in any jurisdiction by the Company or by any Underwriter that would permit a
public offering of the Common Stock or possession or distribution of this
Prospectus in any jurisdiction where action for that purpose is required,
other than in the United States. Persons into whose possession this Prospectus
comes are required by the Company and the Underwriters to inform themselves
about and to observe any restrictions as to the offering of the Common Stock
and the distribution of this Prospectus.
----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 4
Risk Factors............................................................. 12
Use of Proceeds.......................................................... 16
Dividend Policy.......................................................... 16
Capitalization........................................................... 17
Selected Historical and Pro Forma Consolidated Financial Data............ 18
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 20
Business................................................................. 29
Management............................................................... 41
The Acquisition.......................................................... 50
Agreements with Union Pacific Corporation................................ 50
Description of Capital Stock............................................. 53
Shares Eligible for Future Sale.......................................... 55
Bank Credit Facility..................................................... 55
Underwriters............................................................. 57
Certain Federal Tax Consequences......................................... 60
Legal Matters............................................................ 62
Experts.................................................................. 62
Additional Information................................................... 62
Index to Consolidated Financial Statements............................... F-1
</TABLE>
----------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SHORT-COVERING
TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITERS."

3
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors," and the historical and pro forma
financial statements appearing elsewhere in this Prospectus. For purposes of
this Prospectus, unless the context otherwise requires, all references herein
to the "Company" (i) when used in relation to any period prior to the
completion of the Offering, mean Overnite Transportation Company ("OTC"), its
direct parent company, Overnite Holding, Inc. ("OHI"), and its subsidiaries,
and (ii) when used in relation to any period after the completion of the
Offering, mean Overnite Corporation and its subsidiaries, including OHI and
OTC. Unless the context otherwise requires, the information in this Prospectus
assumes that the Underwriters do not exercise their over-allotment option. See
"Underwriters."

THE COMPANY

The Company is a leading provider of less-than-truckload ("LTL")
transportation, offering a full spectrum of regional, inter-regional and long-
haul services nationwide. Management believes that the Company's operating
flexibility and favorable cost structure enhance its ability to effectively
compete in the LTL industry by providing its customers with high-quality
service on a cost-efficient basis. Over 90% of the Company's revenues are
derived from its LTL business, with the remainder derived from truckload
services and value-added services which complement the core LTL business. The
Company's workforce of approximately 12,500 employees is predominantly non-
union. The Company achieved a significant turnaround from 1996 to 1997, with
net income (before goodwill amortization) of $23.8 million in 1997 compared to
a net loss (before goodwill amortization) of $23.4 million in 1996, and an
operating ratio (the ratio of operating expenses before goodwill amortization
to total revenues) of 96.8% in 1997 compared to 105.0% in 1996.

The LTL industry has been consolidating over the last few years, and recent
increases in the demand for LTL services have resulted in tightening capacity
and increasing freight rates. The LTL industry is composed of three segments:
regional, inter-regional and long-haul. The regional segment covers lanes
shorter than 500 miles that generally involve next-day and two-day service, and
is primarily served by a large number of non-union regional and niche carriers.
The inter-regional segment, where lanes are generally between 500 and 1,200
miles, is primarily served by large regional carriers and national unionized
carriers. The long-haul segment, where lanes are generally over 1,200 miles, is
served primarily by the national unionized carriers. The Company estimates that
the 25 largest LTL carriers generated approximately $17 billion in revenues and
constituted at least 80% of the LTL market in 1997.

The Company had operating revenues of $946.0 million in 1997 and is the sixth
largest provider of LTL services in the United States, serving all three
segments of the LTL industry. Approximately 31% of the Company's LTL revenues
were derived from the regional segment, 43% were derived from the inter-
regional segment and 26% were derived from the long-haul segment during the
first six months of 1998. The Company competes principally with national
unionized carriers and regional carriers. The Company's flexible work rules and
lower cost structure allow it to compete effectively with the national
unionized carriers which rely in part on rail service and are bound by
restrictive work rules which result in longer transit times and higher costs.
Through its national network of 166 service centers, the Company covers more
territory than most of its regional competitors. The Company believes that this
combination of strengths will enable it to achieve profitable growth in all
three LTL segments.

TURNAROUND

The Company was founded in 1935, became a public company in 1957 and was
acquired by Union Pacific Corporation ("UPC") in 1986. After the acquisition,
the Company initiated a program of geographic expansion and focused on
marketing its services to large, national accounts. This rapid expansion,
coupled with the sudden growth in the Company's long-haul and inter-regional
traffic resulting from the 1994 nationwide strike against unionized LTLs,
strained the Company's ability to provide reliable service and resulted in a
lack of focus on its traditional regional and inter-regional strengths. In
addition, the Company did not rationalize its pricing to accommodate the change
in traffic mix, leading to substantial profit and yield erosion. These factors
contributed

4
<PAGE>

to net losses (before goodwill amortization) of $4.2 million and $23.4 million
in 1995 and 1996, respectively. As its service levels and profitability
declined, the Company's relations with its employees deteriorated. Since 1994,
the Company has received petitions at 65 Company locations to organize under
the International Brotherhood of Teamsters, AFL-CIO (the "Teamsters Union").
The Company believes that employee relations have improved significantly since
the turnaround began, as evidenced by Company victories in seven out of eight
union elections held since July 1997. As of the date of this Prospectus, 22 of
the Company's 166 service centers are represented by the Teamsters Union,
accounting for approximately 14% of the Company's workforce (approximately 17%
of the non-management workforce). The Company is currently engaged in
negotiations with the Teamsters Union at these service centers, but has not
entered into any collective bargaining agreements.

On July 9, 1998, the Teamsters Union announced that Teamster leaders
authorized a nationwide strike to occur at the Company if the Teamsters do not
succeed in reaching a contract with the Company. Prior to such announcement,
certain Company employees staged one-day work stoppages at four Teamster-
represented service centers. Each of the service centers remained open during
the day with Company drivers continuing to make pickups and deliveries. The
Company expects that additional Teamster-organized work stoppages or other job
actions may be staged throughout the Offering period. The Company cannot
predict the nature, scope or duration of such activities or the effect such
activities may have on the Company's business or financial condition. On July
10, 1998, the Company offered the Teamsters Union an opportunity for a system-
wide election. The proposal is subject to acceptance by the Teamsters Union and
the approval of the NLRB. Under the Company's proposal, if the Company were to
win such election the Teamsters Union would no longer represent any Overnite
employees. If the Company were to lose such election the Teamsters Union would
gain the right to represent all eligible road, city, dock and maintenance
employees. Management is confident that the Company would win such election. In
1995, the Company made a similar election offer through the National Labor
Relations Board (the "NLRB") which was not accepted by the Teamsters Union. See
"Risk Factors--Disputes with Labor Organizations."

The Company's service and operational turnaround began in April 1996, when
UPC appointed Leo Suggs, a well-regarded, 40-year trucking veteran, as Chairman
and Chief Executive Officer. Mr. Suggs assembled a new management team
throughout the organization, from senior managers to service center managers,
by selectively hiring and promoting experienced individuals. The new management
team developed a plan to restore the Company's reputation for service and
reliability and to return the Company to profitability. Management streamlined
the Company's operations, closing 14 service centers and reducing its workforce
by approximately 15% in 1996. The Company also reviewed the profitability of
its major accounts and sought significant rate increases from customers
representing approximately 20% of its revenue base. As a result of management's
turnaround initiatives and employee commitment, the Company's financial
performance improved dramatically between 1996 and 1997. These gains have
continued in 1998, as the Company's operating ratio improved from 97.8% in the
first six months of 1997 to 95.0% in the first six months of 1998.

BUSINESS STRATEGY

In restoring high-quality service and returning the Company to profitability
over the past two years, the Company's new management team implemented the
measures discussed above and focused on four critical on-going areas of the
business: service quality, cost control, yield improvement and profitable
revenue growth. Management believes that working with its employees to pursue
these four success factors will reinforce the gains already achieved in the
turnaround, improve financial performance, create a more positive work
environment for employees and enhance the Company's ability to continue to
reward its employees with a competitive wage and benefits package.

5
<PAGE>

management to facilitate the timely resolution of operational problems and
to discuss service improvement opportunities. The Company has also
established a Customer Advisory Council to enable management to meet
periodically with customers regarding service quality levels, potential new
services and new ideas for improving operations. In the first quarter of
1997, the Company shortened scheduled transit times on approximately half
of its lanes without affecting its high level of on-time deliveries. The
Company has also increased training for employees to reduce service
problems. These efforts have contributed to (i) an improvement in on-time
performance from 91.9% in 1996 to 95.9% in 1997 and (ii) a 25.4%
improvement in exception frequency (the ratio of shipments delivered with
shortages or damages to the total shipment handlings) from 1.77% in 1996 to
1.32% in 1997.

. Improve Cost Controls. The Company has established numerous cost control
initiatives since 1996, implementing financial discipline and
accountability throughout all levels of management. These measures include
(i) identification of operational improvement opportunities through the
Daily Service Review, (ii) the creation of service center profit and loss
statements, which encourage each service center and district manager to
manage based on profitability, in addition to more traditional operating
measures, (iii) a weekly financial review process for senior management to
allow for timely corrections to financial or operational problems and (iv)
a weekly analysis of general and administrative expense levels for each
location. In addition, management has initiated a multi-year "cost of
quality" process to identify cost reduction opportunities in target
business functions, such as billing accuracy, claims prevention and network
operations. Management anticipates that these cost control initiatives,
coupled with the "cost of quality" process, will result in significant cost
savings and other productivity improvements.

. Continue Yield Improvement. The Company introduced several programs to
improve its pricing discipline, including rationalizing prices on its
largest, low-margin accounts (representing approximately 20% of its revenue
base), improving freight mix and increasing prices on certain lanes to
reflect market rates and cost of operations. A pricing committee,
comprising representatives from a cross-section of senior management, was
established to review all pricing decisions for large customers. In
addition, the Company implemented a contract performance review system to
analyze account profitability after the award of a contract to ensure that
shipment levels and service requirements are consistent with bid
assumptions. These initiatives have contributed to a 12.7% increase in
average revenue per hundredweight, from $9.97 in 1996 to $11.24 in 1997.

. Achieve Profitable Revenue Growth. The Company has enhanced its existing
sales force, instituted sales goals, targeted high-margin accounts and
implemented a profitability-based sales incentive program to achieve
profitable revenue growth. The Company upgraded the quality of its sales
force through selective hiring and increased training. The Company improved
the compensation program for its sales employees by creating a sales
incentive plan based on revenues and profitability that enables sales
employees to earn quarterly incentives of up to 41% of base salary on an
annual basis. In addition, sales representatives are required to formulate
daily, weekly, monthly and annual sales plans which are reviewed with
district and senior management on a weekly basis. The Company enhanced its
existing sales force with a new department (Inside Sales) focused on high-
margin, small accounts. These initiatives have contributed to an increase
in revenues of 15.1% from $451.3 million in the first six months of 1997 to
$519.3 million in the first six months of 1998. At the same time, the
Company has increased net income (before goodwill amortization) from $8.3
million in the first six months of 1997 to $19.8 million in the first six
months of 1998.

6
<PAGE>

service quality, cost control, safety, yield improvement and profitable
revenue growth. Management regularly meets with all employees to discuss
these factors and listen to ideas for achieving these objectives. To
fortify employee commitment to the Company's financial success, the Company
plans to grant all employees stock options for shares of Common Stock,
contingent on completion of the Offering, and to maintain an employee stock
purchase plan that will permit employees to invest directly in the Company.

Management's emphasis on the critical success factors discussed above has
reestablished the traditional Overnite culture by focusing on meeting or
exceeding service commitments while offering competitive pricing and
maintaining an efficient cost structure. Management believes that the return
to the traditional Overnite culture and continued focus on these critical
areas will enable the Company to sustain its competitive advantage and
successfully pursue its growth strategy.

GROWTH STRATEGY

With a new management team in place and the cultural change and turnaround
well underway, the Company has implemented a strategic planning process to
develop its growth strategy. This process includes an in-depth analysis of
both market and competitor trends affecting the Company. From this analysis,
management believes that the Company has significant growth opportunities,
particularly in the inter-regional and long-haul LTL markets, through further
penetration of existing markets, expansion into new markets and development of
new services. In addition, the Company intends to maintain its strong presence
in the regional markets. Furthermore, the Company is well-positioned to
implement its growth strategy through its efficient cost structure, operating
flexibility, breadth of geographic coverage and economies of scale. The
Company's strategy is to pursue disciplined growth through the following:

. Expand Inter-Regional Traffic. The inter-regional LTL segment accounted
for approximately 43% of the Company's total LTL revenues in the first six
months of 1998. Management believes that inter-regional traffic represents
a significant growth opportunity for the Company, particularly in the
eastern half of the United States where the Company benefits from strong
brand name recognition and extensive geographic coverage. A substantial
portion of inter-regional traffic is served by the national, unionized LTL
carriers. The Company believes that it offers better service quality and
shorter transit times on more lanes than these carriers, at competitive
prices. The Company also believes that it has a competitive advantage over
the regional carriers, some of whom are also targeting this traffic,
because it is already operating an expansive network that extends beyond
the boundaries of most regional and niche carriers. To capitalize on its
strengths, the Company plans to focus marketing efforts on inter-regional
services to new and existing customers.

. Continue to Penetrate Long-Haul Markets. The long-haul LTL business is
served primarily by four unionized nationwide carriers. Long-haul services
accounted for approximately 26% of the Company's total LTL revenues in the
first six months of 1998 and has grown as a percentage of total LTL
revenues over the past year. The Company plans to increase its share of the
long-haul market by continuing to offer faster transit times and more
reliable service at competitive prices. The Company currently provides
nationwide long-haul service that includes all major metropolitan areas. In
order to increase its share of the long-haul market, the Company intends to
further expand its coverage in the western United States.

. Continue to Grow Regional Business. The regional market represented
approximately 31% of the Company's LTL revenues in the first six months of
1998. Traditionally, the Company was the largest regional carrier in the
southeastern United States. This position enabled the Company to
successfully expand regional coverage and develop inter-regional traffic.
The Company's ability to offer inter-regional and long-haul services in
addition to its high-quality regional services provides it with the
competitive advantage of being able to offer a full range of services to
its regional customers. With its restored high-quality service product, the
Company intends to leverage its brand name recognition and long-standing
customer relationships to grow its regional business.

7
<PAGE>

. Increase Sales to Local Accounts. Locally managed accounts produce higher
margins for the Company than national accounts and provide the Company with
incremental revenues and a more diversified customer base. Local accounts
represented approximately 44% of the Company's total tonnage shipped in the
first six months of 1998. The Company plans to increase local account
revenues through sales promotions, continued expansion of the newly-
developed Inside Sales department and implementation of programs that
emphasize the development of driver-customer relationships and encourage
driver-generated sales leads. Furthermore, management has designed the
Company's profitability-based sales incentive program to motivate the sales
force to emphasize high-margin, local accounts.

. Develop and Promote New Value-Added Services. In the past year, the Company
has introduced and expanded ancillary high-margin businesses, such as
guaranteed and expedited services, cross-border, trade show, and assembly
and distribution, that leverage the Company's existing infrastructure. These
ancillary services offer the Company a significant growth opportunity given
the size and growth potential of each of these market segments. For 1997,
these services together represented approximately 3% of total operating
revenues. The Company estimates that the market for guaranteed and expedited
LTL services represents about $1-2 billion in annual revenues, the Canadian
and Mexican cross-border LTL market represents about $2 billion in annual
revenues, and the trade show market represents about $500 million in annual
revenues. The Company intends to continue to capitalize on these profitable
market opportunities and develop additional customer-specific transportation
solutions to suit the growing needs of its current customers and complement
its core offerings to attract new customers.

The Company's headquarters are located at 1000 Semmes Avenue, P.O. Box 1216,
Richmond, Virginia 23218. Its telephone number is (804) 231-8000.

BACKGROUND TO THE OFFERING

Prior to the Offering, the business of the Company has been conducted by OTC,
an indirect subsidiary of UPC. On May 20, 1998, UPC announced that it intended
to effect a sale of its entire interest in OTC through an initial public
offering. Overnite Corporation was incorporated to issue and sell shares of
Common Stock pursuant to the Offering and to purchase from UPC (the
"Acquisition") all of the issued and outstanding shares of capital stock (the
"OHI Stock") of OHI, a wholly-owned subsidiary of UPC and the parent company of
OTC.

The Company and UPC will make elections under Section 338(h)(10) of the
Internal Revenue Code of 1986, as amended (the "Section 338 Elections"), so
that the Company's acquisition of the OHI Stock will be treated, for federal
income tax purposes, as a purchase of all of OHI's and OTC's assets. As a
result, for federal income tax purposes, the basis of the assets of OHI and OTC
acquired by the Company will be adjusted in accordance with applicable Treasury
regulations to reflect the price paid by the Company for the OHI Stock, plus
the liabilities of OHI deemed assumed for federal income tax purposes at the
time of the Acquisition. As a result of the Section 338 Elections, the Company
will be able to claim depreciation or amortization deductions for substantially
all of the purchase price (including goodwill) for Federal income tax purposes.
See "Unaudited Pro Forma Consolidated Financial Statements."

The Company will use the proceeds of the Offering, estimated to be
approximately $414 million net of underwriting discounts, together with a $105
million borrowing under a new bank credit facility (the "Bank Credit
Facility"), to complete the Acquisition. The purchase price for the Acquisition
will be determined through discussions and negotiations among UPC, the Company
and the Underwriters and, inasmuch as it will be based on the offering price of
the shares of Common Stock of the Company being sold in the Offering, will
reflect the factors considered in determining such offering price. If the
Underwriters' over-allotment option is exercised, the net proceeds therefrom
will be used by the Company to reduce indebtedness under the Bank Credit
Facility. See "Underwriters."

The existing management of OTC will operate the Company after the Offering
and the Acquisition.

8
<PAGE>

THE OFFERING

The closings of the Offering of 26,880,000 shares of Common Stock of the
Company in the United States and Canada (the "U.S. Offering") and the Offering
of 6,720,000 shares of Common Stock outside of the United States and Canada
(the "International Offering" and collectively, the "Offering"), are each
conditioned upon the concurrent closing of the other.

Common Stock offered (1)........ 33,600,000 shares

U.S. Offering............... 26,880,000 shares

International Offering...... 6,720,000 shares

Total Common Stock to be
outstanding after the Offering
(2)............................ 33,600,000 shares

Use of proceeds by the
Company......................... Assuming the Underwriters do not exercise
their over-allotment option, the entire net
proceeds of the Offering will be paid by the
Company to UPC as partial consideration for
the Acquisition. The net proceeds received by
the Company from any exercise of the
Underwriters' over-allotment option will be
used to reduce indebtedness under the Bank
Credit Facility. See "Use of Proceeds."

Nasdaq National Market trading
symbol.................... "OVNT"
- --------

(1) Excludes up to 3,360,000 shares which may be sold if the over-allotment
option granted by the Company to the Underwriters is exercised. See
"Underwriting."

(2) Excludes 3.7 million shares under the Company's Stock Compensation Plan
that are either reserved for issuance pursuant to options that will be
outstanding immediately after the Offering or issued as retention shares
that remain subject to forfeiture that will be outstanding immediately
after the Offering.

9
<PAGE>

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------------------------------------------- -------------------------------
PRO FORMA(1) PRO FORMA(1)
1993(2) 1994 1995 1996 1997 1997 1997 1998 1998
-------- ---------- --------- --------- -------- ------------ -------- -------- ------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Operating revenue...... $939,199 $1,037,236 $ 975,963 $ 960,998 $945,968 $945,968 $451,329 $519,316 $519,316
Operating expenses:
Salaries, wages and
benefits............. 550,882 597,324 625,573 622,569 572,381 573,542 280,245 313,040 313,621
Supplies and
expenses............. 110,222 115,960 125,936 130,565 109,922 109,922 52,094 57,303 57,303
Operating taxes....... 41,258 48,251 49,085 46,027 41,091 41,091 21,059 22,010 22,010
Claims and insurance.. 26,198 38,613 30,359 33,921 30,291 30,291 14,422 15,836 15,836
Rents and purchased
transportation....... 61,380 88,859 83,274 91,380 75,632 75,632 32,354 42,472 42,472
Communications and
utilities............ 16,017 18,618 19,057 19,488 17,497 17,497 9,144 9,054 9,054
Depreciation.......... 34,574 40,355 44,932 45,418 42,516 42,516 21,107 22,821 22,821
Amortization of
goodwill (1)......... 23,000 23,000 19,500 19,500 19,500 4,351 9,750 9,750 2,176
Other expenses........ 6,811 9,433 17,407 19,596 26,826 31,915 11,125 10,884 13,428
-------- ---------- --------- --------- -------- ---------- -------- -------- ----------
Total operating
expenses............. 870,342 980,413 1,015,123 1,028,464 935,656 926,757 451,300 503,170 498,721
-------- ---------- --------- --------- -------- ---------- -------- -------- ----------
Operating income
(loss)................ 68,857 56,823 (39,160) (67,466) 10,312 19,211 29 16,146 20,595
Intercompany interest
income................ 14,046 8,101 9,399 9,268 11,378 -- 5,069 6,067 --
Interest expense....... 755 1,342 1,822 1,532 1,774 8,849 667 727 4,265
Other income
(expense)............. (92) 1,188 (325) 3,116 2 2 (331) 463 463
-------- ---------- --------- --------- -------- ---------- -------- -------- ----------
Income (loss) before
income taxes.......... 82,056 64,770 (31,908) (56,614) 19,918 10,364 4,100 21,949 16,793
Income tax (benefit)... 41,089 30,367 (8,163) (13,723) 15,609 4,859 5,570 11,866 6,351
-------- ---------- --------- --------- -------- ---------- -------- -------- ----------
Net income (loss)(3)... $ 40,967 $ 34,403 $ (23,745) $ (42,891) $ 4,309 $ 5,505 $ (1,470) $ 10,083 $ 10,442
======== ========== ========= ========= ======== ========== ======== ======== ==========
Pro forma income
per share (3)
Basic................. $ .16 $ .31
Diluted............... .16 .31
Pro forma weighted
average number of
shares outstanding
Basic................. 33,600,000 33,600,000
Common stock
equivalents.......... 82,680 82,680
Diluted............... 33,682,680 33,682,680
</TABLE>

<TABLE>
<CAPTION>
AS OF
JUNE 30, 1998
----------------------
ACTUAL PRO FORMA(1)
--------- ------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Current assets............................. $ 344,881 $166,644
Properties-net............................. 453,986 478,986
Goodwill-net............................... 551,663 174,025
Total assets............................... 1,383,153 823,364
Current liabilities........................ 149,826 149,826
Debt due after one year.................... 3,898 108,898
Common stockholders' equity................ 1,112,084 412,295
</TABLE>
- --------
(1) See note 1 to the selected historical and pro forma financial information
and the unaudited pro forma financial statements included herein.
(2) Net income for 1993 excludes the effect of a $79 million after-tax charge
for the cumulative effects of adjustments related to changes in accounting
principles for the recognition of liabilities of other postretirement
benefits and deferred taxes and revenue recognition.

(3) If the Underwriters' over-allotment option is exercised in full, (i) pro
forma net income for 1997 and the six months ended June 30, 1998 would be
$7,199,789 and $11,289,395, respectively, and (ii) pro forma basic net
income per share for 1997 and the six months ended June 30, 1998 would be
$.20 and $.31, respectively (assuming, in each case, that the net proceeds
to the Company from the exercise of the over-allotment option equal $41.4
million).

10
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------- ------------------
1993 1994 1995 1996 1997 1997 1998
------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
For the period:
Operating ratio (1)..... 90.2% 92.3% 102.0% 105.0% 96.8% 97.8% 95.0%
Gross weight hauled (2)
Less-than-truckload.... 8,553 9,115 8,860 8,580 7,682 3,705 4,023
Truckload.............. 1,466 1,335 1,223 872 538 265 226
------- ------- ------- ------- ------- -------- --------
Total.................. 10,019 10,450 10,083 9,452 8,220 3,970 4,249
Shipments (000's)
Less-than-truckload.... 8,146 8,535 8,279 8,184 7,482 3,534 3,939
Truckload.............. 60 58 53 39 24 12 11
------- ------- ------- ------- ------- -------- --------
Total.................. 8,206 8,593 8,332 8,223 7,506 3,546 3,950
Average length of haul
(miles) (3)............ 684 725 712 739 732 722 764
Linehaul load factor
(pounds) (4)........... 12,544 12,328 11,777 12,375 12,625 12,008 12,648
Average revenue per hun-
dredweight............. $9.28 $9.82 $9.55 $9.97 $11.24 $11.10 $11.94
At end of period:
Average age of equipment
(years):
Tractors............... 6.8 6.5 6.8 7.0 7.1 N/A 6.8
Trailers............... 8.0 7.0 7.2 7.7 8.7 N/A 8.8
Tractors owned or
leased................. 5,254 5,364 5,414 5,023 4,799 N/A 4,834
Trailers owned or
leased................. 17,105 18,858 19,809 19,479 19,439 N/A 19,611
Service centers......... 166 173 175 161 164 N/A 166
</TABLE>
- --------
(1) The ratio of operating expenses (before goodwill amortization) to operating
revenues.
(2) In millions of pounds.
(3) LTL only (weighted by cubic feet).
(4) Average weight per 28-foot-long trailer.

11
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. Prospective purchasers of the Common Stock should carefully
consider the following risk factors in addition to the other information
contained in this Prospectus in evaluating an investment in the shares of
Common Stock offered hereby.

RECENT LOSSES

Although the Company reported net income (before goodwill amortization) of
$23.8 million in 1997 and $19.8 million for the first six months of 1998, the
Company experienced net losses (before goodwill amortization) of $4.2 million
and $23.4 million in 1995 and 1996, respectively. There can be no assurance
that the Company will be able to generate net income on a quarterly or annual
basis in the future.

THREAT OF COMPETITION

The LTL trucking industry is highly competitive, and the Company competes
against other carriers on the basis of service quality and reliability, as
well as price. The Company competes with regional and national LTL and
truckload carriers, and, to a lesser extent, with package carriers and
railroads, some of which have greater financial and other resources or lower
operating costs than the Company. In addition, in any particular market, other
carriers often have greater economies of scale and lane density that enhance
their ability to compete on the basis of service quality or price.
Deregulation in the industry has resulted in ease of entry and increased
competition. Intense competition has from time to time resulted in aggressive
price discounting and narrow margins. Although the Company believes it is
positioned well to compete in the industry in the future, there can be no
assurance that the Company will be successful in its attempts to meet the
competitive demands of the industry. Failure to do so would have a material
adverse effect on its business or financial condition.

DISPUTES WITH LABOR ORGANIZATIONS

In general, non-union carriers in the LTL trucking industry have significant
advantages over unionized carriers, including less restrictive work rules and
lower labor costs, particularly with respect to benefit plan costs. There can
be no assurance that the Company will be able to maintain its current cost
advantage over certain of its competitors, particularly if the portion of the
Company's work force that is represented by a union increases significantly.
Such a change could cause the Company to alter its collective bargaining
practices, increase its costs and change its operating methods. In addition,
while the Company has not experienced any significant work stoppages by its
employees, the existence of union organizing activities and unresolved
collective bargaining negotiations at certain of the Company's facilities
means that there can be no assurance that the Company will not experience work
stoppages in the future. Any such significant work stoppage, or the threat
thereof, could, in turn, adversely affect the Company's operations. The
Company has adopted contingency plans should a work stoppage occur. However,
depending upon the scope, duration and severity of any such stoppage and the
effectiveness of the Company's contingency plans, the effect could be
material.

Teamsters Union representatives have publicly stated their intention of
increasing the Union's organizing and bargaining efforts during the Offering.
On July 9, 1998, the Teamsters Union announced that Teamster leaders
authorized a nationwide strike to occur at the Company if the Teamsters do not
succeed in reaching a contract with the Company. Prior to such announcement,
certain employees at the Company's Atlanta service center staged a one-day
work stoppage on June 22, 1998 and certain employees at the Company's
Cincinnati, Kansas City and Memphis service centers staged one-day work
stoppages on June 29, 1998. Each of these Teamster-represented service centers
remained open during the day with Company drivers continuing to make pickups
and deliveries. The Company expects that additional Teamster-organized work
stoppages or other job actions may be staged throughout the Offering period.
The Company cannot predict the nature, scope or duration of such activities or
the effect such activities may have on the Company's business or financial
condition. In particular, the Company cannot predict the effect that such
activities, or the threat thereof, will

12
<PAGE>

have on the Company's customer base. On July 10, 1998, the Company offered the
Teamsters Union an opportunity for a system-wide election. The proposal is
subject to acceptance by the Teamsters Union and the approval of the NLRB.
Under the Company's proposal, if the Company were to win such election the
Teamsters Union would no longer represent any Overnite employees. If the
Company were to lose such election the Teamsters would gain the right to
represent all eligible road, city, dock and maintenance employees. Management
is confident that the Company would win such election. In 1995, the Company
made a similar offer through the NLRB which was not accepted by the Teamsters
Union.

The Teamsters Union has made efforts to represent employees at certain of
the Company's 166 service centers, particularly over the last several years.
Since 1994, the Company has received 88 petitions for union elections at 65
service centers. To date, approximately 1,800 employees at 22 service centers,
including hub service centers in Kansas City, Kansas, and Memphis, Tennessee,
representing approximately 14% of all employees (approximately 17% of non-
management employees), are represented by the Teamsters Union. Elections
affecting approximately 400 additional employees at four additional service
centers, representing approximately 3% of the Company's employees
(approximately 4% of non-management employees), are unresolved. There are no
elections currently scheduled. To date, the Company has not entered into any
collective bargaining agreements with the Teamsters Union; however, the
Company is engaged in collective bargaining negotiations over union contract
demands at the 22 represented locations, two of which (the Kansas City hub and
Memphis hub) are among the five largest Company service centers.

At 15 additional service centers (only 13 of which are currently operating),
the NLRB General Counsel and the Teamsters Union are disputing the outcome of
union elections won by the Company and are seeking NLRB orders that the
Company must bargain with the union despite the election outcomes. On April
10, 1998, an administrative law judge at the NLRB issued a recommended order
(the "ALJ Order") that, among other things, would require the Company to
bargain with the union upon request at four of these service centers. The
Company plans to appeal this decision to the full NLRB, and, if necessary, to
a U.S. Court of Appeals. The complaints for bargaining orders at 11 remaining
service centers (only nine of which are currently operating) are still before
NLRB administrative law judges. Employees at the four service centers subject
to the ALJ Order, together with those at the 11 other service centers where
bargaining orders are being sought, account for approximately 8% of the
Company's nationwide work force (approximately 9% of the non-management work
force).

There are no assurances that more employees will not vote for unionization.
In that circumstance, one possibility would be for the Company to alter its
posture in collective bargaining, increase its costs and change its operating
methods, which in turn could have a materially adverse effect on the Company's
operating results. Another possibility is for the Teamsters Union to change
its contract demands in a way that would permit the Company to agree without
significantly increasing costs and operating structures. A third possibility
is a strike that, if sufficiently widespread, lengthy and severe, could have a
materially adverse effect on the Company. See "Business--Employees."

INFLUENCE OF ECONOMY

The Company is affected directly by the state of the overall economy as well
as by the regional economies of the eastern half of the United States, where
its principal operations are located, and over which the Company has no
control. Any significant decline in tonnages shipped as a result of an
economic slowdown could increase competitive pressures and adversely affect
the Company.

EFFECTS OF SEASONAL CHANGES

The LTL trucking industry is affected by seasonal fluctuations, which affect
tonnage to be transported. Freight shipments, operating costs and earnings are
also affected adversely by inclement weather conditions. Decreased shipping
demand and weather conditions usually result in lower profitability in the
first and fourth quarters of each year. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Seasonality and
Quarterly Results of Operations."

13
<PAGE>

DEPENDENCE ON FUEL

In 1997, fuel (excluding fuel taxes) represented approximately 3% of total
operating costs. As of June 30, 1998, the Company had hedged approximately 42%
of its forecasted fuel consumption for the remainder of 1998. For this portion
of its fuel expense, the Company will not be materially affected (positively
or negatively) by changes in fuel prices. However, for the remaining 58% of
its forecasted fuel consumption for the remainder of 1998, and for any other
period, to the extent not hedged, fuel costs will change with market prices.
When fuel costs exceed the Company's planned levels, the Company seeks to
charge a portion of the higher cost to its customers as a fuel surcharge. If
fuel prices increase and the Company is unable to pass this cost to its
customers, the additional expense will have an adverse effect on Company's
business and financial condition. See "Business--Fuel."

RELIANCE ON DRIVERS

Competition for qualified drivers is intense within the transportation
industry, and periodically the trucking industry has suffered from a shortage
of qualified drivers. Management believes that this problem has primarily
affected the truckload carriers. Since its March 1995 wage increase, the
Company has not experienced problems hiring a sufficient number of drivers.
However, there can be no assurance the Company will not experience a shortage
of qualified drivers, which could result in temporary underutilization of
revenue equipment, difficulty in meeting shippers' demands and increased
compensation levels, and which could have a material adverse effect on the
Company's business, financial condition or growth. See "Business--Drivers."

REQUIREMENTS FOR CAPITAL

The Company's business requires substantial ongoing capital investments,
particularly for new tractors and trailers. In 1998, the Company expects that
capital expenditures will total approximately $58.2 million, including $26.1
million spent during the first six months. To date, the Company has been a
wholly-owned subsidiary of UPC and not an independent entity. Accordingly, a
portion of the Company's capital expenditures have been financed by advances
from UPC or facilitated by credit support from UPC. Following the Offering,
however, capital expenditures will be limited to the resources of the Company
and its ability to obtain debt or equity financing. In connection with the
Offering, the Company has entered into a commitment letter for the Bank Credit
Facility, which will provide $200 million of revolving credit for five years.
See "Bank Credit Facility." The Company intends to use primarily cash flow
from operations to fund its capital expenditure program. In the future, if the
Company were unable to generate sufficient cash flow from operations, borrow
sufficient funds, enter into acceptable leases or debt financing arrangements,
or sell additional equity, it would be forced to limit its growth and might be
required to operate its fleet with older equipment, which could have a
material adverse effect on the Company's business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

DEPENDENCE ON KEY MANAGERS

The success of the Company's business is dependent upon the ability of the
Company's Chief Executive Officer, Leo Suggs, and its other senior executive
officers to continue to implement the restructuring of the Company's
operations that began in 1996. The loss of services of any of these key
personnel could have a material adverse effect on the business. The Company
does not have employment or non-competition contracts with, nor does it intend
to maintain key man life insurance on, any of its executive officers.

RELIANCE ON PURCHASED TRANSPORTATION

The Company uses purchased transportation, primarily intermodal rail and
contract linehaul, to handle chronic lane imbalances. The Company will move
trailer loads in one direction using purchased rail intermodal or contract
carriage in situations when scheduling a Company driver to move the load would
result in the driver returning with empty trailers. The Company will also, on
occasion, augment its linehaul capacity during certain peak periods through
the use of purchased transportation. As customers demand shorter transit
times, the number of cost-effective intermodal options which conform to
customer requirements may be reduced. A reduction in the availability of
purchased transportation may mean the Company could provide certain customer
services only

14
<PAGE>

at increased cost, which could have an adverse affect on the Company's
business. See "Business--Company Operations--Network Operations."

ABSENCE OF RECENT HISTORY AS A STAND-ALONE COMPANY

Since 1986, the Company has been a wholly-owned subsidiary of UPC. Although
the Company has operated as a separate business, distinct from UPC's other
activities, the Company has relied on UPC for certain support functions, as
well as financial support. No recent financial or operating history of the
Company as an independent entity is available for investors to evaluate. As
described in the pro forma financial statements included herein, the Company
currently estimates that it will incur approximately $6.5 million per year of
incremental operating expenses as a result of being a stand-alone public
company and will no longer receive intercompany interest from UPC. The stand-
alone costs are estimates, and actual incremental expenses could be higher.
The Company expects to borrow under the Bank Credit Facility in connection
with the Acquisition, and may make further borrowings thereunder from time to
time after the Acquisition to finance working capital and capital
expenditures. Accordingly, the Company will have additional leverage and will
incur additional interest expense following the Offering which could affect
its financial and operating flexibility. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources" and the pro forma consolidated financial statements
included elsewhere herein.

ABSENCE OF PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for any securities of
the Company and there can be no assurance that any active public market for
the Common Stock will develop. The Common Stock has been approved for
quotation on the Nasdaq National Market System. The offering price per share
of the Common Stock will be determined in negotiations among the Company, UPC
and representatives of the Underwriters and may not be indicative of the
market price after the Offering. See "Underwriters."

DIVIDEND POLICY

The Company currently intends to retain its future earnings for general
corporate purposes, including working capital and capital expenditures. Any
payment of cash dividends in the future will be at the discretion of the
Company's Board of Directors and will depend upon the Company's results of
operations, earnings, capital requirements, contractual restrictions and other
factors deemed relevant by the Company's Board.

CONSEQUENCES OF ANTI-TAKEOVER PROVISIONS

The Company's Articles of Incorporation and Bylaws contain certain
provisions which may discourage or make more difficult any attempt by a person
or group to obtain control of the Company, including provisions authorizing
the issuance of preferred stock without shareholder approval, requiring
staggered three-year terms for directors, and providing that directors may be
removed only for cause. In addition, certain provisions of Virginia law could
delay or make more difficult a merger, tender offer or proxy contest involving
the Company, including limitations on "affiliated transactions" with an
"interested shareholder". The Company has opted out of limits on "control
share acquisitions" provided under Virginia law, but could opt in to such
provisions in the future without a shareholder vote. See "Description of
Capital Stock--Virginia Corporate Law, Articles of Incorporation and Bylaws
Provisions."

POSSIBLE ADVERSE EFFECT OF GOVERNMENT POLICY AND REGULATIONS

Transportation. The LTL trucking industry is subject to regulation by
various federal and state agencies, including the U.S. Department of
Transportation. These regulatory authorities have broad powers, and the
trucking industry is subject to regulatory and legislative changes (including
as to limits on vehicle weights and size) that can affect the economics of the
industry by requiring changes in operating practices or influencing the demand
for, and the costs of providing, services to shippers. See "Business--
Regulation."

Environmental. The Company's trucking operations are subject to stringent
environmental laws and regulations, including laws and regulations dealing
with the transportation, storage, presence, use, disposal and

15
<PAGE>

handling of hazardous materials, discharge of storm water, facility and
vehicle emissions into the atmosphere and underground storage tanks.
Approximately 7% of the shipments transported by the Company in 1997 were
classified as hazardous under applicable federal or state regulations. Such
shipments give rise to potential costs for spills or other incidents, although
the Company has not incurred material liability for such incidents to date,
and to the need to manage the Company's freight handling operations to avoid
carrying incompatible cargo, such as foodstuffs and certain hazardous
materials. In some situations involving the release or disposal of hazardous
materials the Company could be liable for cleanup costs or be subject to
fines, even if the contamination resulted from conduct of the Company that was
lawful at the time or from improper conduct of persons engaged by the Company
to dispose of hazardous materials. Costs associated with such cleanup and with
compliance with environmental laws could be substantial and could have a
material adverse effect on the Company's business, financial condition or
results of operations. See "Business--Environmental Regulation" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Environmental Matters."

EXTENT OF YEAR 2000 PROBLEM

Sophisticated information systems are vital to the Company's profitability
and growth. The "Year 2000 Problem" refers to the risk that computer hardware
and software may be unable to recognize and properly execute date-sensitive
functions involving dates after December 31, 1999. Computer hardware or
software that does not properly recognize such information could generate
erroneous data or cause a system to fail. In 1995, the Company began modifying
its computer systems to process transactions involving the year 2000 and
beyond. Costs to convert these systems, estimated to total $7 million, are
expensed as incurred. To date, approximately 70% of the Company's mainframe
applications have been converted and the Company plans to complete the
conversion of the entire mainframe environment by year-end 1998. Vendor-
purchased PC and client server packages will be upgraded to year 2000 releases
by year-end 1998. In addition, the Company is requesting certification letters
from all major suppliers to ensure the ability of those vendors to provide
products that are year 2000 compliant during the millennium changeover. All
work is planned to be completed no later than the second quarter of 1999.

There can be no assurance that the Company will identify the extent of its
entire Year 2000 Problem, or that its suppliers will do so, in advance of the
new millennium, or that the Company or its suppliers will successfully remedy
all the problems that are discovered. A failure in whole or in part of the
Company's or the Company's suppliers' computer systems could have a material
adverse effect on the business or financial condition of the Company.

USE OF PROCEEDS

Assuming the Underwriters do not exercise their over-allotment option, the
proceeds to the Company from the issuance of the Common Stock pursuant to the
Offering are estimated to be approximately $414 million net of underwriting
discounts. All such net proceeds received by the Company, together with a $105
million borrowing under the Bank Credit Facility, will be used to purchase all
the outstanding OHI Stock from UPC. See "Certain Transactions." In addition,
the Company will be required to pay certain of the expenses of the Offering,
which are estimated at $1,570,000.

If the Underwriters' over-allotment option is exercised in full, the
proceeds to the Company from the sale of the 3,360,000 shares covered by such
option are estimated to be approximately $41.4 million net of underwriting
discounts. These net proceeds will be used to reduce indebtedness under the
Bank Credit Facility that was incurred immediately prior to the Acquisition to
finance a portion of the cost of the Acquisition. See "The Acquisition."

DIVIDEND POLICY

16
<PAGE>

CAPITALIZATION

The following table sets forth the short-term debt and capitalization of the
Company at June 30, 1998 and such short-term debt and capitalization on a pro
forma basis after giving effect to (i) the Offering (assuming net proceeds to
the Company of $414 million) and (ii) the Acquisition. The entire net proceeds
to the Company from the Offering (before payment of expenses and without
giving effect to any exercise of the Underwriters' over-allotment option),
together with a $105 million borrowing under the Bank Credit Facility, will be
used to purchase the OHI Stock from UPC. This table should be read in
conjunction with the consolidated financial statements and the notes thereto
and the unaudited pro forma consolidated financial information of the Company
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1998
------------------
ACTUAL PRO FORMA
-------- ---------
(IN MILLIONS)
<S> <C> <C>
Short-term debt (including current portion of long-term
debt).................................................. $ 2.9 $ 2.9
======== ======
Long-term debt:
Bank facility (1)(2).................................. -- 105.0
Other long-term debt.................................. 3.9 3.9
-------- ------
Total long-term debt................................ 3.9 108.9
Stockholders' equity:
UPC investment........................................ 1,112.1 --
Common stock (par value $.01; authorized 150,000,000;
issued and outstanding 33,600,000 pro forma)......... -- .3
Additional paid-in capital............................ -- 412.0
-------- ------
Total capitalization.............................. $1,116.0 $521.2
======== ======
</TABLE>
- --------

(1) At the closing of the Offering, the Company will have a $200 million
revolving Bank Credit Facility. An initial $105 million borrowing
thereunder will be used to finance a portion of the purchase price for the
Acquisition. The remaining borrowing capacity will be available for
working capital, capital expenditures and other corporate purposes. See
"Bank Credit Facility."
(2) If the Underwriters' over-allotment option is exercised, the net proceeds
to the Company therefrom will be used to reduce indebtedness under the
Bank Credit Facility.

17
<PAGE>

SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

The selected historical consolidated statement of income data for each of
the three years in the period ended December 31, 1997 and historical
consolidated balance sheet data as of December 31, 1996 and 1997 are derived
from the consolidated financial statements of the Company, which have been
audited by Deloitte & Touche LLP, independent auditors. The selected
historical consolidated financial data set forth below should be read in
conjunction with the consolidated financial statements and notes thereto of
the Company included elsewhere in this Prospectus, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and other
financial data included herein. The selected historical consolidated statement
of income data for the years ended December 31, 1993 and 1994 and the six
months ended June 30, 1997 and 1998 and historical balance sheet data as of
December 31, 1993, 1994 and 1995 and June 30, 1998 are derived from the
unaudited condensed consolidated financial statements of the Company. In the
opinion of the Company, such unaudited condensed consolidated financial
statements include all adjustments (consisting of only normal recurring
adjustments) necessary for a fair presentation of the information set forth
therein. The results of operations for the six months ended June 30, 1998 are
not necessarily indicative of results that may be expected for the full year.
The selected pro forma consolidated financial data are derived from the
unaudited pro forma consolidated financial statements of the Company included
elsewhere in this Prospectus. The selected pro forma consolidated financial
data give effect to the Offering and the Acquisition as if they had been
consummated at the beginning of each period presented with respect to the pro
forma statement of income data and as of the date presented with respect to
the pro forma statement of financial condition. The selected pro forma
consolidated financial data may not be indicative of results that would have
actually occurred if the Offering and the Acquisition had been effected on the
dates indicated or the results that may be obtained in the future. The
selected pro forma consolidated financial data should be read in conjunction
with the consolidated financial statements and notes thereto of the Company,
and the unaudited pro forma consolidated financial statements of the Company
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------------------------------ -------------------------------------------
PRO FORMA(1) PRO FORMA(1)
1993(2) 1994 1995 1996 1997 1997 1997 1998 1998
-------- ---------- ---------- ---------- -------- ------------ -------- -------- ------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
INCOME DATA:
Operating
revenue......... $939,199 $1,037,236 $ 975,963 $ 960,998 $945,968 $945,968 $451,329 $519,316 $519,316
Operating
expenses:
Salaries, wages
and benefits... 550,882 597,324 625,573 622,569 572,381 573,542 280,245 313,040 313,621
Supplies and
expenses....... 110,222 115,960 125,936 130,565 109,922 109,922 52,094 57,303 57,303
Operating
taxes.......... 41,258 48,251 49,085 46,027 41,091 41,091 21,059 22,010 22,010
Claims and
insurance...... 26,198 38,613 30,359 33,921 30,291 30,291 14,422 15,836 15,836
Rents and
purchased
transportation.. 61,380 88,859 83,274 91,380 75,632 75,632 32,354 42,472 42,472
Communications
and utilities.. 16,017 18,618 19,057 19,488 17,497 17,497 9,144 9,054 9,054
Depreciation.... 34,574 40,355 44,932 45,418 42,516 42,516 21,107 22,821 22,821
Amortization of
goodwill (1)... 23,000 23,000 19,500 19,500 19,500 4,351 9,750 9,750 2,176
Other expenses.. 6,811 9,433 17,407 19,596 26,826 31,915 11,125 10,884 13,428
-------- ---------- ---------- ---------- -------- ---------- -------- -------- ----------
Total operating
expenses....... 870,342 980,413 1,015,123 1,028,464 935,656 926,757 451,300 503,170 498,721
-------- ---------- ---------- ---------- -------- ---------- -------- -------- ----------
Operating income
(loss).......... 68,857 56,823 (39,160) (67,466) 10,312 19,211 29 16,146 20,595
Intercompany
interest
income.......... 14,046 8,101 9,399 9,268 11,378 -- 5,069 6,067 --
Interest
expense......... 755 1,342 1,822 1,532 1,774 8,849 667 727 4,265
Other income
(expense)....... (92) 1,188 (325) 3,116 2 2 (331) 463 463
-------- ---------- ---------- ---------- -------- ---------- -------- -------- ----------
Income (loss)
before income
taxes........... 82,056 64,770 (31,908) (56,614) 19,918 10,364 4,100 21,949 16,793
Income tax
(benefit)....... 41,089 30,367 (8,163) (13,723) 15,609 4,859 5,570 11,866 6,351
-------- ---------- ---------- ---------- -------- ---------- -------- -------- ----------
Net income
(loss)(3)....... $ 40,967 $ 34,403 $ (23,745) $ (42,891) $ 4,309 $ 5,505 $ (1,470) $ 10,083 $ 10,442
======== ========== ========== ========== ======== ========== ======== ======== ==========
Pro forma income
per share (3)
Basic........... $ .16 $ .31
Diluted......... $ .16 $ .31
Pro forma
weighted average
number of shares
outstanding
Basic........... 33,600,000 33,600,000
Common stock
equivalents.... 82,680 82,680
Diluted......... 33,682,680 33,682,680
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
AS OF
YEAR ENDED DECEMBER 31, JUNE 30, 1998
------------------------------------------------------ -------------------
PRO
1993 1994 1995 1996 1997 ACTUAL FORMA(1)
---------- ---------- ---------- ---------- ---------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets.......... $ 287,498 $ 303,082 $ 283,784 $ 304,120 $ 330,404 $ 344,881 $166,644
Properties-net.......... 455,986 503,779 506,269 464,404 452,990 453,986 478,986
Goodwill-net............ 765,309 742,929 600,413 580,913 561,413 551,663 174,025
Total assets............ 1,510,750 1,550,845 1,435,033 1,389,980 1,380,239 1,383,153 823,364
Current liabilities..... 136,220 150,071 129,774 154,459 159,801 149,826 149,826
Debt due after one
year................... -- 14,123 11,328 8,363 5,224 3,898 108,898
Common stockholders' eq-
uity................... 1,214,726 1,220,329 1,180,583 1,121,692 1,110,001 1,112,084 412,295
</TABLE>

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------- ----------------
1993 1994 1995 1996 1997 1997 1998
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
For the period:
Operating ratio (4)..... 90.2% 92.3% 102.0% 105.0% 96.8% 97.8% 95.0%
Gross weight hauled
(millions of pounds):
Less-than-truckload.... 8,553 9,115 8,860 8,580 7,682 3,705 4,023
Truckload.............. 1,466 1,335 1,223 872 538 265 226
------- ------- ------- ------- ------- ------- -------
Total.................. 10,019 10,450 10,083 9,452 8,220 3,970 4,249
Shipments (000's):
Less-than-truckload.... 8,146 8,535 8,279 8,184 7,482 3,534 3,939
Truckload.............. 60 58 53 39 24 12 11
------- ------- ------- ------- ------- ------- -------
Total.................. 8,206 8,593 8,332 8,223 7,506 3,546 3,950
Average length of haul
(miles) (5)............ 684 725 712 739 732 722 764
Linehaul load factor
(pounds) (6)........... 12,544 12,328 11,777 12,375 12,693 12,008 12,648
Average revenue per hun-
dredweight............. $9.28 $9.82 $9.55 $9.97 $11.24 $11.10 $11.94
At end of period:
Average age of equipment
(years):
Tractors............... 6.8 6.5 6.8 7.0 7.1 N/A 6.8
Trailers............... 8.0 7.0 7.2 7.7 8.7 N/A 8.8
Tractors owned or
leased................. 5,254 5,364 5,414 5,023 4,799 N/A 4,834
Trailers owned or
leased................. 17,105 18,858 19,809 19,479 19,439 N/A 19,611
Service centers......... 166 173 175 161 164 N/A 166
</TABLE>
- --------

(1) The unaudited pro forma data give effect to the Offering and the
Acquisition. As described in the notes to the pro forma consolidated
financial statements included herein, (i) the Acquisition will result in a
new basis of accounting which will result in the assets and liabilities
being recorded at fair value, all historical goodwill associated with
UPC's acquisition of the Company being eliminated and new goodwill being
recorded to reflect the excess of the purchase price over the fair value
of the assets acquired, (ii) immediately prior to the Acquisition, the
Company will borrow $105 million under the Bank Credit Facility to pay a
portion of the purchase price, (iii) the Company will forgive $148 million
of intercompany debt owed by UPC and (iv) following the Acquisition, the
Company will incur operating expenses and interest expense in excess of
the amounts reflected in the historical financial statements and will no
longer receive intercompany interest from UPC. If the Underwriters' over-
allotment option is exercised, the net proceeds will be used to reduce the
indebtedness under the Bank Credit Facility.
(2) Net income for 1993 excludes the effect of a $79 million after-tax charge
for the cumulative effects of adjustments related to changes in accounting
principles for the recognition of liabilities of other postretirement
benefits and deferred taxes and revenue recognition.

19
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following discussion and analysis should be read in conjunction with the
historical consolidated financial statements of the Company and the notes
thereto. In addition, as described under "Pro Forma Consolidated Financial
Statements," significant changes will occur in the funding and operations of
the Company following the Offering. As a result, the historical consolidated
financial statements may not be indicative of the financial position and the
results of operations that the Company would have attained if it had been an
independent stand-alone company during the periods presented or which may
occur in the future. The Company currently amortizes goodwill associated with
UPC's purchase of the Company in 1986 in the amount of $19.5 million per year.
This goodwill will be eliminated following the Offering and new goodwill will
be recorded equal to the excess of the purchase price over the fair value of
the assets acquired. Following the Acquisition, the Company will no longer
receive interest income from UPC and expects to incur certain costs in
connection with its status as a stand-alone public company that will exceed
the costs that are currently charged to the Company by UPC and reflected in
the historical consolidated financial statements. The Company's current
estimate of the amount of these additional expenses is reflected in the pro
forma consolidated financial statements included herein. The Company expects
to incur indebtedness under the Bank Credit Facility in connection with the
Acquisition and, as necessary, to finance working capital and capital
expenditures after the Offering. The estimated interest expense associated
with the initial borrowing under the Bank Credit Facility is reflected in the
pro forma financial statements.

HISTORICAL REVENUES AND OPERATING COSTS

Operating revenue varies depending upon the amount of volume hauled and
price per hundredweight charged to customers. Beginning in 1996, as the
Company initiated its turnaround, quarterly gross volume began declining from
a level of 2.6 billion pounds and reached a low point of 1.9 billion pounds in
the first quarter of 1997. These declines reflected reduced volume, following
significant price increases targeted at certain low-margin customers.
Quarterly volume has increased to 2.1 billion pounds in the second quarter of
1998.

Revenue per hundredweight varies based upon commodities shipped as well as
the distance goods are transported. Average revenue per hundredweight, which
was $9.65 for the first quarter of 1996, has increased in seven of the nine
following quarters reaching $12.01 for the second quarter of 1998. The recent
increase in tonnage and overall growth in revenue per hundredweight was
primarily the result of improved service quality and stronger pricing
discipline, as well as the continued strength of the U.S. economy.

Salaries, wages and benefits expense is the primary component of operating
costs, representing approximately 60% of operating revenue. While a majority
of these costs vary with tonnage levels, portions of these costs, such as
sales and marketing and general and administrative expenses are relatively
fixed. Other major expenses include fuel, maintenance and purchased
transportation, which generally vary based upon the number of shipments and
miles traveled as well as demand for Company services.

Throughout 1997 and the first six months of 1998, the Company benefited from
several strategic initiatives implemented in 1996 to better compete in the
current trucking industry environment. The development of these initiatives
was a direct result of the Company's adoption of a new business strategy
emphasizing service quality, cost control, yield improvement and profitable
revenue growth. Actions taken by the Company included service center
consolidations, centralization of the network management process, work force
reductions and pricing initiatives targeting the Company's lowest margin
customers. As a result, the Company generated net income (before goodwill
amortization) of $23.8 million in 1997, compared to a net loss (before
goodwill amortization) of $23.4 million in 1996. The Company recorded net
income of $4.3 million in 1997 compared with a net loss of $42.9 million in
1996.

20
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth certain statement of income data expressed as
a percentage of operating revenue:

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
------------------- ------------
1995 1996 1997 1997 1998
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Operating revenue.......................... 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Salaries, wages and benefits.............. 64.1 64.8 60.5 62.1 60.3
Supplies and expenses..................... 12.9 13.6 11.6 11.5 11.0
Operating taxes........................... 5.0 4.8 4.3 4.7 4.2
Claims and insurance...................... 3.1 3.5 3.2 3.2 3.1
Rents and purchased transportation........ 8.5 9.5 8.0 7.2 8.2
Communications and utilities.............. 2.0 2.0 1.8 2.0 1.7
Depreciation.............................. 4.6 4.7 4.5 4.7 4.4
Amortization of goodwill.................. 2.0 2.0 2.1 2.1 1.9
Other expenses............................ 1.8 2.1 2.9 2.5 2.1
----- ----- ----- ----- -----
Total operating expenses............... 104.0 107.0 98.9 100.0 96.9
----- ----- ----- ----- -----
Operating income (loss).................... (4.0) (7.0) 1.1 0.0 3.1
Intercompany interest income............... 1.0 1.0 1.2 1.1 1.2
Interest expense........................... 0.2 0.2 0.2 0.1 0.1
Other income............................... 0.0 0.3 0.0 (0.1) 0.1
----- ----- ----- ----- -----
Income (loss) before income taxes.......... (3.2) (5.9) 2.1 0.9 4.3
Income taxes (benefit)..................... (0.8) (1.4) 1.7 1.2 2.3
----- ----- ----- ----- -----
Net income (loss).......................... (2.4) (4.5) 0.4 (0.3) 2.0
===== ===== ===== ===== =====
Operating ratio (before goodwill amortiza-
tion)..................................... 102.0% 105.0% 96.8% 97.8% 95.0%
</TABLE>

Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997
(unaudited)

Operating Revenue. Operating revenue increased 15.1% to $519.3 million for
the six months ended June 30, 1998, from $451.3 million for the comparable
period in 1997. This improvement was primarily the result of increased volume
($36.0 million), particularly in the long-haul segment, as well as yield
enhancements ($32.0 million), including a 5.4% general rate increase that was
implemented on January 4, 1998. An increased average yield of $11.94 per
hundredweight was attained in the six months ended June 30, 1998, as compared
to $11.10 per hundredweight for the comparable period in 1997.

Operating Expenses. Salaries, wages and benefits increased 11.7% to $313.0
million for the six months ended June 30, 1998, from $280.2 million for the
comparable period in 1997. As a percentage of operating revenue, salaries,
wages and benefits decreased to 60.3% for the six months ended June 30, 1998,
from 62.1% for the comparable period in 1997. The increase in salaries and
wages was due to the increase in volume ($15.7 million), as well as a 3.1%
wage increase for all freight handling employees effective January 1, 1998 and
all other employees as of April 5 ($8.0 million). Increased benefit costs in
1998 ($9.2 million) were due to benefit enhancements and higher payroll-
related taxes. The increase in payroll costs was also attributable to $0.9
million in severance costs incurred in June 1998 as a result of efforts to
streamline operations and to decentralize billing functions. The
decentralization initiative is expected to result in additional one-time costs
in the third quarter of less than $1.0 million. These increases were partially
offset by productivity improvements and the increased use of purchased
services.

Supplies and expenses, which consist primarily of fuel, maintenance and
operating supplies, increased 10.0% to $57.3 million for the six months ended
June 30, 1998, from $52.1 million for the comparable period in 1997. As a
percentage of operating revenues, supplies and expenses decreased to 11.0% for
the six months ended June 30, 1998, from 11.5% for the comparable period in
1997. The increase in freight volume was primarily

21
<PAGE>

responsible for the increase in cost ($5.9 million), which was partially
offset by favorable fuel prices and improved fuel efficiency from a newer
fleet ($2.9 million). The increase in absolute cost was also due to increases
in the use of temporary services in the billing operation and contract
programmers ($1.8 million) to handle increased billing volume and continued
work on the Year 2000 project. These costs are likely to subside as billing is
decentralized and the Year 2000 project nears completion.

Operating taxes increased 4.5% to $22.0 million for the six months ended
June 30, 1998, from $21.1 million for the comparable period in 1997. As a
percentage of operating revenue, operating taxes decreased to 4.2% for the six
months ended June 30, 1998, from 4.7% for the comparable period in 1997. The
cost increase was due primarily to the higher quantity of fuel purchased ($0.8
million).

Claims and insurance increased 9.8% to $15.8 million for the six months
ended June 30, 1998, from $14.4 million for the comparable period, which is
consistent with higher freight volumes. As a percentage of operating revenue,
claims and insurance expense decreased to 3.1% for the six months ended June
30, 1998 from 3.2% for the comparable period in 1997, primarily due to the
reduced number of claims paid as a result of improved freight handling.

Rents and purchased transportation increased 31.1% to $42.5 million for the
six months ended June 30, 1998, from $32.4 million for the comparable period
in 1997. As a percentage of operating revenue, rents and purchased
transportation increased to 8.2% for the six months ended June 30, 1998, from
7.2% for the comparable period in 1997. The increase included additional
contract and rail miles due to the volume increase ($1.2 million). Substitute
linehaul miles were increased further in order to meet service standards and
to reduce imbalance on the linehaul system ($6.9 million). In addition, more
local purchased transportation was utilized to remain current with the higher
than anticipated volumes ($1.5 million).

Depreciation increased 8.1% to $22.8 million for the six months ended June
30, 1998, from $21.1 million for the comparable period in 1997. As a
percentage of operating revenue, depreciation decreased to 4.4% for the six
months ended June 30, 1998, from 4.7% for the comparable period in 1997. The
increase was a result of the $57.1 million of investments made in building
improvements and revenue equipment enhancements during the last two quarters
of 1997 and the first half of 1998.

Other expense of $10.9 million for the six months ended June 30, 1998,
consisting primarily of legal expense and bad debt expense, decreased $0.2
million from the amount reported for the comparable period in 1997. As a
percentage of operating revenue, other expense decreased to 2.1% for the six
months ended June 30, 1998 from 2.5% for the comparable period in 1997.

Operating Income. Operating income increased by $16.1 million to $16.1
million for the six months ended June 30, 1998, from the $29 thousand reported
for the comparable period in 1997. This improvement was primarily due to the
increased volumes and yield ($68.0 million), which was offset by increased
expenses ($51.9 million).

Intercompany Interest Income. Intercompany interest income increased 19.7%
to $6.1 million for the six months ended June 30, 1998, from $5.1 million for
the comparable period in 1997. This increase was due to higher intercompany
balances from favorable cash flow from improved earnings.

1997 Compared to 1996

Operating Revenue. Operating revenue decreased 1.6% to $946.0 million in
1997, from $961.0 million in 1996. The decrease was primarily due to a 13%
decrease in tonnage hauled ($105.7 million). This volume decrease was a result
of pricing initiatives begun in mid-1996. Partially offsetting the decrease in
tonnage, an increased average yield of $11.24 per hundredweight was attained
in 1997, as compared to $9.97 in 1996 ($90.7 million). The improvement in
yield was attributable to contract renegotiation with national customers, as
well as a general rate increase of 5.9% implemented at the beginning of 1997.

22
<PAGE>

Operating Expenses. Salaries, wages and benefits decreased 8.1% to $572.4
million in 1997 from $622.6 million in 1996. As a percentage of operating
revenue, salaries, wages and benefits decreased to 60.5% in 1997, from 64.8%
in 1996. This improvement was a result of reduced volume ($64.9 million) and
improved productivity ($5.6 million), and was slightly offset by a 3.1% wage
increase ($17.3 million) and the shift from purchased services to Company
wages ($3.1 million).

Supplies and expenses decreased 15.8% to $109.9 million in 1997, from $130.6
million in 1996. As a percentage of operating revenue, supplies and expenses
decreased to 11.6% in 1997, from 13.6% in 1996. This reduction was due to
reduced volume ($16.8 million), favorable fuel prices ($2.5 million), and
reduced outside vehicle maintenance expense ($1.3 million).

Operating taxes decreased 10.7% to $41.1 million in 1997 from $46.0 million
in 1996. As a percentage of operating revenue, operating taxes decreased to
4.3% in 1997, from 4.8% in 1996. This change was a result of lower consumption
of fuel ($4.1 million), as well as reduced expenses related to a smaller fleet
and a lower number of facilities ($0.8 million).

Claims and insurance decreased 10.6% to $30.3 million in 1997, from $33.9
million in 1996. As a percentage of operating revenue, claims and insurance
decreased to 3.2% in 1997 from 3.5% in 1996. This improvement was due
primarily to the implementation of several claims prevention programs,
resulting in reduced claims expense.

Rents and purchased transportation decreased 17.2% to $75.6 million in 1997,
from $91.4 million in 1996. As a percentage of operating revenue, rents and
purchased transportation decreased to 8.0% in 1997, from 9.5% in 1996. The
reduction was primarily a result of decreased volume ($11.9 million). In
addition, savings were realized from an initiative to have more freight
handled by Company employees as opposed to outside vendors, partially offset
by the shift from rail to more expensive contract linehaul in order to
maintain high levels of service ($3.9 million).

Communications and utilities decreased 10.2% to $17.5 million in 1997, from
$19.5 million in 1996. As a percentage of operating revenue, communications
and utilities decreased to 1.8% in 1997 from 2.0% in 1996. This absolute
dollar reduction reflects the lower number of facilities ($0.7 million),
decreased shipment volume and controlled spending in communications
(aggregating $1.3 million).

Depreciation decreased 6.4% to $42.5 million in 1997, from $45.4 million in
1996. As a percentage of operating revenue, depreciation decreased to 4.5% in
1997, from 4.7% in 1996. This decrease was a result of fewer facilities and a
reduced fleet size.

Other expenses increased 36.9% to $26.8 million in 1997, from $19.6 million
in 1996. As a percentage of operating revenue, other expense increased to 2.8%
in 1997, from 2.0% in 1996. This increase was primarily due to an increase in
legal ($3.2 million) and bad debt expense ($2.1 million).

Operating Income. Operating income increased $77.8 million to $10.3 million
in 1997, from an operating loss of $67.5 million in 1996. The improvement was
primarily attributable to the decrease in revenue ($15.8 million) being offset
by a much higher decrease in operating expenses ($92.8 million), as described
above.

Intercompany Interest Income. Intercompany interest income increased 22.8%
to $11.4 million in 1997, from $9.3 million in 1996. The increase was due to
higher intercompany balances resulting from favorable cash flow from improved
earnings.

1996 Compared to 1995

Operating Revenue. Operating revenue decreased 1.5% to $961.0 million in
1996, from $976.0 million in 1995. During the second quarter 1996, a pricing
initiative was implemented, targeting the Company's largest low-margin
accounts, representing approximately 20% of revenues. Significant price
increases were sought from

23
<PAGE>

all of these customers, and as a result most of the volume was lost when
customers did not agree to the increases. The resulting revenue decrease was
due to the lost tonnage from these customers ($38.0 million), partially offset
by improvements in yield ($18.3 million), as well as the assessment of a fuel
surcharge beginning in June of 1996 ($4.7 million).

Operating Expenses. Salaries, wages and benefits decreased 0.5% to $622.6
million in 1996 from $625.6 million in 1995. As a percentage of operating
revenue, salaries, wages and benefits increased to 64.8% in 1996, from 64.1%
in 1995. The decrease in absolute cost was a result of a reduction in
headcount primarily due to lower volumes and reductions in the general and
administrative work force during the second and fourth quarters ($31.3
million), offset by a general wage increase of 3.3% and other wage adjustments
($24.6 million), and severance pay ($3.7 million).

Supplies and expenses increased 3.7% to $130.6 million in 1996, from $125.9
million in 1995. As a percentage of operating revenue, supplies and expenses
increased to 13.6% in 1996, from 12.9% in 1995. The increase was primarily a
result of a 36% increase in fuel price per gallon ($7.4 million), and was
offset by reduced miles driven, as well as the implementation of cost control
measures for general and operating supplies expense ($2.7 million).

Operating taxes decreased 6.2% to $46.0 million in 1996 from $49.1 million
in 1995. The decrease was consistent with the reduction in volume. As a
percentage of operating revenue, operating taxes decreased to 4.8% in 1996
from 5.0% in 1995.

Claims and insurance increased 11.7% to $33.9 million in 1996, from $30.4
million in 1995. As a percentage of operating revenue, claims and insurance
increased to 3.5% in 1996, from 3.1% in 1995. This increase was due to service
deterioration.

Rents and purchased transportation increased 9.7% to $91.4 million in 1996,
from $83.3 million in 1995. As a percentage of operating revenue, rents and
purchased transportation increased to 9.5% in 1996, from 8.5% in 1995. The
increase was primarily due to a higher usage of substitute linehaul (contract
and rail) in an effort to balance freight flows ($4.1 million). In addition,
local purchased transportation expense increased by approximately $2.2
million, and building and equipment rental expense increased by approximately
$1.5 million.

Communications and utilities increased 2.3% to $19.5 million in 1996 from
$19.1 million in 1995. As a percentage of operating revenue, communications
and utilities was 2.0% for both 1996 and 1995. The cost increase was primarily
due to harsh weather conditions in the first quarter of 1996, which resulted
in higher utilities expense ($0.3 million).

Depreciation increased 1.1% to $45.4 million in 1996, from $44.9 million in
1995. As a percentage of operating revenue, depreciation increased to 4.7% in
1996 from 4.6% in 1995. This increase was a result of the $24.5 million of
capital expenditures made during the second half of 1995 and 1996.

Other expense increased 12.6% to $19.6 million in 1996, from $17.4 million
in 1995. The increase was due to higher professional services expense ($2.1
million). As a percentage of operating revenue, other expense increased to
2.0% in 1996 from 1.8% in 1995.

Operating Income. Operating loss increased $28.3 million to $67.5 million
in 1996 from the $39.2 million loss reported in 1995. As a percentage of
operating revenue, operating loss increased to 7.0% in 1996, from 4.0% in
1995. The higher loss was due to reduced revenue ($15.0 million) and increased
expense ($13.3 million), as described above.

Other Income. Other income increased by $3.4 million to $3.1 million in
1996, from a loss of $0.3 million in 1995. This increase was primarily due to
the sale of properties resulting from the consolidation of facilities during
1996.

24
<PAGE>

SEASONALITY AND QUARTERLY RESULTS OF OPERATIONS

In the LTL trucking industry, revenues generally follow a seasonal pattern
as customers reduce shipments during and after the winter holiday season.
Also, highway transportation can be adversely affected depending upon the
severity of the weather in various sections of the country during the winter
months. The Company's
operating expenses have historically been higher in winter months.
Accordingly, the Company's results of operations may fluctuate to reflect such
seasonality. Since 1996, these seasonal factors have been somewhat offset by
the effects of the turnaround.

The following table summarizes certain quarterly financial and other data
for the Company for 1996, 1997 and the first two quarters of 1998:

<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1996 1996 1996 1996 1997 1997 1997 1997 1998 1998
--------- -------- --------- -------- ---------- --------- ---------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA (MILLIONS):
Operating revenue $255.1 $256.6 $234.2 $215.1 $214.1 $237.3 $249.6 $245.0 $257.4 $261.9
Operating expenses:
Salaries, wages
and benefits..... 168.7 163.6 152.1 138.2 135.6 144.7 149.0 143.1 154.4 158.7
Supplies and
expenses......... 35.8 35.4 30.6 28.7 25.7 26.4 27.4 30.4 28.4 28.9
Operating taxes... 13.0 12.4 10.7 9.9 10.7 10.4 9.8 10.2 11.0 10.9
Claims and insur-
ance............. 7.8 8.8 9.0 8.3 7.0 7.4 8.0 7.9 8.1 7.7
Rents and
purchased
transportation... 27.5 28.2 19.2 16.6 14.4 17.9 20.2 23.0 21.5 21.0
Communication and
utilities........ 5.4 4.7 4.8 4.7 4.8 4.3 4.1 4.2 4.5 4.6
Depreciation...... 11.4 11.4 11.7 10.9 10.5 10.6 10.6 10.9 11.2 11.7
Amortization of
goodwill......... 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9
Other expenses.... 5.3 4.7 4.5 4.9 5.2 5.9 6.8 9.0 5.2 5.6
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total operating
expenses........ 279.8 274.1 247.5 227.1 218.8 232.5 240.8 243.6 249.2 254.0
Operating income
(loss)............ (24.7) (17.5) (13.3) (12.0) (4.7) 4.8 8.8 1.4 8.2 7.9
Intercompany inter-
est income........ 1.8 2.1 2.5 2.9 2.4 2.6 3.1 3.3 3.0 3.1
Interest expense... .4 .4 .4 .3 .3 .3 .6 .5 .4 .4
Other income (ex-
pense)............ -- -- .2 2.9 -- (.4) .2 .1 .2 .3
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income (loss)
before income
taxes............. (23.3) (15.8) (11.0) (6.5) (2.6) 6.7 11.5 4.3 11.0 10.9
Income taxes (bene-
fits)............. (6.9) (4.0) (2.2) (.5) 1.0 4.5 6.4 3.7 6.2 5.6
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income (loss).. $(16.4) $(11.8) $ (8.8) $ (6.0) $ (3.6) $ 2.2 $ 5.1 $ .6 $ 4.8 $ 5.3
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
SELECTED OPERATING
DATA:
Operating ratio
(excluding good-
will)............. 107.8% 104.9% 103.6% 103.3% 99.9% 95.9% 94.5% 97.4% 94.9% 95.1%
Gross weight hauled
(billions of
pounds)........... 2.6 2.6 2.3 2.0 1.9 2.1 2.1 2.1 2.1 2.1
Shipments (mil-
lions)............ 2.2 2.2 2.0 1.8 1.7 1.9 2.1 1.9 2.0 2.0
Average revenue per
hundredweight..... $9.65 $9.73 $10.16 $10.49 $11.11 $11.09 $11.39 $11.35 $11.87 $12.01
Average length of
haul (miles)(1)... 745 746 729 732 719 724 735 747 764 763
Linehaul load
factor (thousands
of pounds)(2)..... 12.0 12.0 12.4 13.1 12.7 12.6 12.6 12.6 12.7 12.9
</TABLE>
- -------
(1) LTL only (weighted by cubic feet).
(2) Average weight per 28-foot-long trailer.

LIQUIDITY AND CAPITAL RESOURCES

Net cash from operations was $42.6 million, $71.4 million and $27.0 million
in 1996, 1997 and the six months ended June 30, 1998, respectively. Net cash
from operations is attributable primarily to changes in net income (loss) and
working capital items. In June 1998, the Company made a $10 million payment to
the employee retirement plan. As a result, the plan is fully funded on both an
accumulated benefit obligation and a projected benefit obligation basis.

The Company's business requires substantial ongoing capital investments,
particularly for new tractors and trailers. Capital expenditures totaled
approximately $10.5 million, $40.4 million, and $26.1 million during 1996,
1997 and the six months ended June 30, 1998, respectively, as set forth below:

25
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER
31, SIX
----------- MONTHS ENDED
1996 1997 JUNE 30, 1998
----- ----- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenue equipment.................................. $ 4.9 $24.3 $13.3
Land and buildings................................. .6 10.2 7.2
Other equipment.................................... 5.0 5.9 5.6
----- ----- -----
Total capital expenditures....................... $10.5 $40.4 $26.1
===== ===== =====
</TABLE>

The Company has budgeted capital expenditures of $58.2 million for 1998,
including $32.1 million for the last six months of the year, and currently
expects 1999 capital expenditures to be approximately $60.0 million. The
Company's 1998 capital budget includes $12.4 million to purchase new tractors
and $2.2 million for new trailers in the last six months of 1998. In addition,
the Company plans to spend approximately $9.9 million on real estate projects
in the last six months of 1998, including facilities in Dallas, Texas;
Memphis, Tennessee; Nashville, Tennessee; Tyler, Texas; and Fontana,
California. The Company also plans to purchase $7.7 million of other
equipment, primarily computer-related products, lift trucks and scales, during
the last six months of 1998. The Company expects that on an annual basis
capital expenditures in 1998 and 1999 will be funded by cash flow from
operations.

The Company's capital expenditures have been funded primarily through cash
provided by operations and to a lesser extent by the proceeds of sales of used
equipment and real estate. The Company generated cash proceeds from the sales
of used tractors of $1.1 million, $3.0 million and $0.4 million in 1996, 1997
and the six months ended June 30, 1998, respectively. The Company also
generated cash proceeds from the sale of land and buildings of $7.9 million,
$7.0 million, and $2.6 million in 1996, 1997 and the six months ended June 30,
1998, respectively. Cash proceeds from the sale of other assets were $1.0
million and $0.5 million in 1996 and 1997, respectively. There were no
material cash proceeds from the sale of other assets in the six months ended
June 30, 1998.

Net cash used in financing activities was approximately $50.1 million, $43.0
million and $2.1 million in 1996, 1997 and the six months ended June 30, 1998,
respectively. The Company paid cash dividends to UPC of $16.0 million, $16.0
million and $8.0 million in 1996, 1997 and the six months ended June 30, 1998,
respectively. The Company repaid $2.8 million, $3.0 million and $1.5 million
of debt in 1996, 1997 and the first six months of 1998, respectively,
consisting entirely of capitalized lease obligations. The Company paid net
cash advances to UPC of $26.9 million in 1996 and $30.6 million in 1997, and
received net cash advances from UPC of $7.9 million in the first six months of
1998. At June 30, 1998, long-term debt totaled $3.9 million, maturing through
2000, and obligations relating to operating leases totaled $20.3 million
through 2010.

Following the Offering, the Company intends to retain its future earnings
for general corporate purposes, including working capital and capital
improvements. Any payment of cash dividends in the future will be at the
discretion of the Company's Board of Directors and will depend upon the
Company's results of operations, earnings, capital requirements, contractual
restrictions and other factors deemed relevant by the Company's Board.

In connection with the Offering, the Company and Crestar Bank ("Crestar")
have entered into a commitment letter (the "Commitment Letter") for a bank
revolving credit facility (the "Bank Credit Facility") that will provide up to
$200 million of available credit. An initial borrowing of $105 million under
the Bank Credit Facility will be used to pay a portion of the consideration
for the Acquisition. Thereafter, the Company expects to utilize the Bank
Credit Facility primarily for (i) periodic borrowings for working capital and
capital expenditures and (ii) to support trade letters of credit. The Bank
Credit Facility will terminate on the fifth anniversary of its closing, at
which time the principal and accrued interest of all outstanding borrowings
will be due.

26
<PAGE>

The Bank Credit Facility will contain various financial and other covenants,
including covenants requiring the Company to maintain certain financial
ratios. The Bank Credit Facility will also contain various events of default,
including a cross default to other outstanding indebtedness. The closing of
the Bank Credit Facility will be conditioned on, among other things, the
completion of the Offering. The Company expects that cash flow from operations
will be sufficient to pay anticipated interest expense on borrowings under the
Bank Credit Facility. The Company does not believe that compliance with the
covenants contained in the Bank Credit Facility will have a material impact on
the Company's liquidity or results of operations. See "Bank Credit Facility."

ENVIRONMENTAL MATTERS

The Company generates and transports hazardous and nonhazardous materials in
its current and former operations, and is subject to federal, state and local
environmental laws and regulations. A liability of approximately $1 million
has been accrued for future costs at all sites where the Company's obligation
is probable and where such costs can be reasonably estimated. The Company
believes that it has adequately accrued for its ultimate share of costs at
sites where it is alleged to be subject to joint and several liability. Future
environmental obligations are not expected to have a material impact on the
results of operations or financial condition of the Company.

The Company or its current or former operating subsidiaries have been
notified by the U.S. Environmental Protection Agency that it or they are a
potentially responsible person under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or other federal or state
environmental statutes at 11 hazardous waste sites. Under CERCLA, the Company
may be jointly and severally liable for all site remediation and expenses.
After investigating the nature and costs of potential response actions at
these sites and its own involvement, alone and in relation to the involvement
of other named potentially responsible parties, in waste disposal or waste
generation at such sites, the Company has resolved its liability through de
minimis settlements or believes that its obligations with respect to all such
sites not subject to settlement will involve immaterial monetary liability,
though there can be no assurances in this regard. Furthermore, management
believes it is in material compliance with all laws applicable to its
operations and is not aware of any situation or condition that it believes is
likely to have a material adverse effect on the Company's business, financial
condition or results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," which is effective for all periods in 1998. The Company
has adopted the provisions of SFAS No. 130 effective January 1, 1998. The
components of comprehensive income include, among other things, changes in the
market value of futures contracts which qualify for hedge accounting and any
net loss recognized as an additional pension liability but not yet recognized
as net periodic pension cost. Adoption of SFAS No. 130 had no impact on the
financial statements for the six months ended June 30, 1998.

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information," that will be effective in 1998.
Management is currently analyzing the effects of this statement and does not
believe the effects will be material.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits." The Company has elected to
adopt the provisions of SFAS No. 132 in its 1997 financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" that will be effective in 2000. Management
has not yet determined the effect, if any, SFAS No. 133 will have on the
Company's financial statements, but expects the effect to be minimal.

27
<PAGE>

YEAR 2000 COSTS

In 1995, the Company began modifying its computer systems to process
transactions involving the year 2000 and beyond. Costs to convert these
systems, estimated to total $7 million, are expensed as incurred. To date,
approximately 70% of the Company's mainframe applications have been converted,
and the Company plans to complete the conversion of the entire mainframe
environment by year-end 1998. Vendor-purchased PC and client server packages
will be upgraded to year 2000 releases by year-end 1998. In addition, the
Company is requesting certification letters from all major suppliers to ensure
the ability of those vendors to provide products that are year 2000 compliant
during the millennium changeover. All work is planned to be completed no later
than the second quarter of 1999.

The Company believes its systems will be successfully and timely modified.
However, failure on the part of the Company or third parties with whom the
Company does business to successfully and timely modify applicable systems
could materially affect the Company's operations and financial results.

28
<PAGE>

BUSINESS

The Company is a leading provider of LTL transportation, offering a full
spectrum of regional, inter-regional and long-haul services nationwide.
Management believes that the Company's operating flexibility and favorable
cost structure enhance its ability to effectively compete in the LTL industry
by providing its customers with high-quality service on a cost-efficient
basis. Over 90% of the Company's revenues are derived from its LTL business,
with the remainder derived from truckload services and value-added services
which complement the core LTL business. The Company's workforce of
approximately 12,500 employees is predominantly non-union. The Company
achieved a significant turnaround from 1996 to 1997, with net income (before
goodwill amortization) of $23.8 million in 1997 compared to a net loss (before
goodwill amortization) of $23.4 million in 1996, and an operating ratio (the
ratio of operating expenses before goodwill amortization to total revenues) of
96.8% in 1997 compared to 105.0% in 1996.

The Company had operating revenues of $946.0 million in 1997 and is the
sixth largest provider of LTL services in the United States, serving all three
segments of the LTL industry. Approximately 31% of the Company's LTL revenues
were derived from the regional segment, 43% were derived from the inter-
regional segment and 26% were derived from the long-haul segment during the
first six months of 1998. The Company competes principally with national
unionized carriers and regional carriers. The Company's flexible work rules
and lower cost structure allow it to compete effectively with the national
unionized carriers which rely in part on rail service and are bound by
restrictive work rules which result in longer transit times and higher costs.
Through its national network of 166 service centers, the Company covers more
territory than most of its regional competitors. The Company believes that
this combination of strengths will enable it to achieve profitable growth in
all three LTL segments.

TURNAROUND

The Company was founded in 1935, became a public company in 1957 and was
acquired by UPC in 1986. After the acquisition, the Company initiated a
program of geographic expansion and focused on marketing its services to
large, national accounts. This rapid expansion, coupled with the sudden growth
in the Company's long-haul and inter-regional traffic resulting from the 1994
nationwide strike against unionized LTLs, strained the Company's ability to
provide reliable service and resulted in a lack of focus on its traditional
regional and inter-regional strengths. In addition, the Company did not
rationalize its pricing to accommodate the change in traffic mix, leading to
substantial profit and yield erosion. These factors contributed to net losses
(before goodwill amortization) of $4.2 million and $23.4 million in 1995 and
1996, respectively. As its service levels and profitability declined, the
Company's relations with its employees deteriorated. Since 1994, the Company
has received petitions at 65 Company locations to organize under the Teamsters
Union. The Company believes that employee relations have improved
significantly since the turnaround began, as evidenced by Company victories in
seven out of eight union elections held since July 1997. As of the date of
this Prospectus, 22 of the Company's 166 service centers are represented by
the Teamsters Union, accounting for approximately 14% of the Company's
workforce (approximately 17% of the non-management workforce). The Company is
currently engaged in negotiations with the Teamsters Union at these service
centers, but has not entered into any collective bargaining agreements.

29
<PAGE>

proposal, if the Company were to win such election the Teamsters Union would
no longer represent any Overnite employees. If the Company were to lose such
election the Teamsters Union would gain the right to represent all eligible
road, city, dock and maintenance employees. Management is confident that the
Company would win such election. In 1995, the Company made a similar election
offer through the NLRB which was not accepted by the Teamsters Union. See
"Risk Factors--Disputes with Labor Organizations."

The Company's service and operational turnaround began in April 1996, when
UPC appointed Leo Suggs, a well-regarded, 40-year trucking veteran, as
Chairman and Chief Executive Officer. Mr. Suggs assembled a new management
team throughout the organization, from senior managers to service center
managers, by selectively hiring and promoting experienced individuals. The new
management team developed a plan to restore the Company's reputation for
service and reliability and to return the Company to profitability. Management
streamlined the Company's operations, closing 14 service centers and reducing
its workforce by approximately 15% in 1996. The Company also reviewed the
profitability of its major accounts and sought significant rate increases from
customers representing approximately 20% of its revenue base. As a result of
management's turnaround initiatives and employee commitment, the Company's
financial performance improved dramatically between 1996 and 1997. These gains
have continued in 1998, as the Company's operating ratio improved from 97.8%
in the first six months of 1997 to 95.0% in the first six months of 1998.

BUSINESS STRATEGY

. Provide Quality Service. Since 1996, management has sought to foster a
consistent service culture and institute accountability for service quality
throughout the organization. The Company has reduced transit times and
continues to focus on on-time delivery of damage-free shipments to
customers. The Company has instituted the Daily Service Review with senior,
district and service center management to facilitate the timely resolution
of operational problems and service improvement opportunities. The Company
has also established a Customer Advisory Council to enable management to
meet periodically with customers regarding service quality levels,
potential new services and to discuss new ideas for improving operations.
In the first quarter of 1997, the Company shortened scheduled transit times
on approximately half of its lanes without affecting its high level of on-
time deliveries. The Company has also increased training for employees to
reduce service problems. These efforts have contributed to (i) an
improvement in on-time performance from 91.9% in 1996 to 95.9% in 1997 and
(ii) a 25.4% improvement in exception frequency (the ratio of shipments
delivered with shortages or damages to the total shipment handlings) from
1.77% in 1996 to 1.32% in 1997.

. Improve Cost Controls. The Company has established numerous cost control
initiatives since 1996, implementing financial discipline and
accountability throughout all levels of management. These measures include:
(i) identification of operational improvement opportunities through the
Daily Service Review, (ii) the creation of service center profit and loss
statements, which encourage each service center and district manager to
manage based on profitability in addition to more traditional operating
measures, (iii) a weekly financial review process for senior management to
allow for timely corrections to financial or operational problems and (iv)
a weekly analysis of general and administrative expense levels for each
location. In addition, management has initiated a multi-year "cost of
quality" process to identify cost reduction opportunities in target
business functions, such as billing accuracy, claims prevention and network
operations. Management anticipates that these cost control initiatives,
coupled with the "cost of quality" process, will result in significant cost
savings and other productivity improvements.

30
<PAGE>

. Continue Yield Improvement. The Company introduced several programs to
improve its pricing discipline, including rationalizing prices on its
largest, low-margin accounts (representing approximately 20% of its revenue
base), improving freight mix and increasing pricing on certain lanes to
reflect market rates and cost of operations. A pricing committee,
comprising representatives from a cross-section of senior management, was
established to review all pricing decisions for large customers. In
addition, the Company implemented a contract performance review system to
analyze account profitability after the award of a contract to ensure that
shipment levels and service requirements are consistent with bid
assumptions. These initiatives have contributed to a 12.7% increase in
average revenue per hundredweight, from $9.97 in 1996 to $11.24 in 1997.

. Maintain Positive Work Environment. Management believes that employee
satisfaction and commitment to the Company's strategies described above are
critical to its success. Management intends for all employees to benefit
from the Company's success through improved wages, benefits and job
security. To date, the Company has implemented and enhanced incentive plans
that reward employees for focusing on service quality, cost control,
safety, yield improvement and profitable revenue growth. Management
regularly meets with all employees to discuss these factors and listen to
ideas for achieving these objectives. To fortify employee commitment to the
Company's financial success, the Company plans to grant all employees stock
options for shares of Common Stock, contingent on completion of the
Offering, and to maintain an employee stock purchase plan that will permit
employees to invest directly in the Company.

GROWTH STRATEGY

31
<PAGE>

. Expand Inter-Regional Traffic. The inter-regional LTL segment currently
accounts for approximately 43% of the Company's total LTL revenues in the
first six months of 1998. Management believes that inter-regional traffic
represents a significant growth opportunity for the Company, particularly
in the eastern half of the United States, where the Company benefits from
strong brand name recognition and extensive geographic coverage. A
substantial portion of inter-regional traffic is served by the national,
unionized LTL carriers. The Company believes that it offers better service
quality and shorter transit times on more lanes than these carriers, at
competitive prices. The Company also believes that it has a competitive
advantage over the regional carriers, some of whom are also targeting this
traffic, because it is already operating an expansive network that extends
beyond the boundaries of most regional and niche carriers. To capitalize on
its strengths, the Company plans to focus marketing efforts on inter-
regional services to new and existing customers.

. Continue to Grow Regional Business. The regional market represented
approximately 31% of the Company's LTL revenues in the first six months of
1998. Traditionally, the Company was the largest regional carrier in the
southeastern United States. This position enabled the Company to
successfully expand regional coverage and develop inter-regional traffic.
The Company's ability to offer inter-regional and long-haul services in
addition to its high quality regional services provides it with the
competitive advantage of being able to offer a full range of services to
its regional customers. With its restored high-quality service product, the
Company intends to leverage its brand name recognition and long-standing
customer relationships to grow its regional business.

. Develop and Promote New Value-Added Services. In the past year, the Company
has introduced and expanded ancillary high-margin businesses, such as
guaranteed and expedited services, cross-border, trade show, and assembly
and distribution, that leverage the Company's existing infrastructure.
These ancillary services offer the Company a significant growth opportunity
given the size and growth potential of each of these market segments. For
1997, these services together represented approximately 3% of total
operating revenues. The Company estimates that the guaranteed and expedited
LTL services represents about $1-2 billion in annual revenues, Canadian and
Mexican cross-border LTL market represents about $2 billion in annual
revenues, and the trade show market represents about $500 million in annual
revenues. The Company intends to continue to capitalize on these profitable
market opportunities and develop additional customer-specific
transportation solutions to suit the growing needs of its current customers
and complement its core offerings to attract new customers.

32
<PAGE>

INDUSTRY OVERVIEW

The for-hire trucking industry is typically divided into two segments, LTL
and truckload. The size of the domestic truckload segment, which has
historically hauled shipments over 20,000 pounds, is estimated to be over $30
billion dollars in annual revenues. The size of the LTL industry, which
typically hauls shipments that are less than 20,000 pounds, is estimated to be
between $18 and $22 billion in annual revenues. The Company's primary business
is LTL transportation. LTL carriers, including the Company, also haul some
truckload shipments to add revenue or increase equipment utilization,
especially in back-haul lanes. Over the last decade truckload carriers, and to
a lesser extent the overnight package carriers, have entered the traditional
LTL markets by altering the size limits of the shipments they haul. The
Company believes that this competition, absent some extraordinary change in
the pricing environment or operating methodologies, has reached its natural
limits and the LTL industry will continue to grow with the U.S. economy.

In general, customers are looking for consistent, high-quality, on-time
performance and reduced transit times at a lower cost. Additionally, customers
want more information about their shipments throughout the shipment cycle. In
this environment, carriers that can distinguish themselves through quality of
service, information services and scope of offerings, have demonstrated the
ability to grow in size and market share and should advance at the expense of
other carriers.

The LTL Industry

The LTL industry has been consolidating over the last few years, and recent
increases in the demand for LTL services have resulted in tightening capacity
and increasing freight rates. The LTL industry is composed of three segments:
regional, inter-regional and long-haul. The regional segment covers lanes
shorter than 500 miles that generally involve next-day and two-day service,
and is primarily served by a large number of non-union regional and niche
carriers. The inter-regional segment, where lanes are generally between 500
and 1,200 miles, is primarily served by large regional carriers and national
unionized carriers. The long-haul segment, where lanes are generally over
1,200 miles, is served primarily by the national carriers. The Company
estimates that the 25 largest LTL carriers generated approximately $17 billion
in revenues and constituted at least 80% of the LTL market in 1997.

SERVICES

LTL Services. The Company offers a full range of regional, inter-regional
and long-haul LTL services in all 50 states, and portions of Canada, Mexico,
Puerto Rico and Guam. Approximately 31% of the Company's LTL revenues in the
first six months of 1998 were derived from the regional segment, 43% from the
inter-regional segment and 26% from the long-haul segment. The Company
provides LTL services through its network of 166 service centers and 35
agents. The Company's LTL business is concentrated in the eastern half of
United States, where the Company provides service to all of the primary and
secondary markets through its own service centers and benefits from greater
brand name recognition. The Company also provides long-haul service to the
west coast through 14 service centers and interline partners in the western
United States. The Company has recently expanded to provide direct coverage to
approximately 95% of the population of Texas and offers extensive LTL service
between the United States and Canada through its service center in Montreal
and agency relationships covering the rest of Canada. In 1997, LTL service
represented over 90% of total operating revenues. The Company transports a
variety of products, including chemicals, fabricated metal products, textiles,
machinery, electronics and paper products.

33
<PAGE>

The Company manages the time critical nature of its services through a focus
on on-time departures and disciplined operations. The Company's network is a
hybrid of the "direct-load" network used by regional carriers and the "hub-
and-spoke" network typically associated with long-haul carriers. The Company
maximizes its network efficiency through "direct loading" where it has the
density to do so, and using consolidation points on lanes lacking the
necessary density. While the Company has six main breakbulk centers, over 40
of its service centers handle some "through freight" to help balance the
number of loads moving on a lane, optimize the number of loads generated,
reduce circuity and lessen the dependence on its largest hubs. The Company
employs a combination of single drivers (one driver in the tractor) performing
round trips and long runs (involving a layover at another service center) and
sleeper teams (two drivers in a tractor) to move loads between service
centers. Many of its drivers unload and load their trailer as part of the
planned work schedule. The flexibility of having drivers work on the dock
helps the Company manage its labor cost according to the volume of business.

LTL-Related Services. The Company has developed certain high-margin
specialized services that are targeted to specific market niches that leverage
the strengths of the Company's existing distribution network. For 1997, these
services together represented approximately 3% of total operating revenues.

Guaranteed Transportation Solutions. The Company offers guaranteed and
expedited delivery service for time-critical LTL shipments with commitments
sometimes as much as three days faster than the Company's standard transit
time. In providing this service, the Company primarily uses its own
resources, but in certain cases makes specialized arrangements with
airfreight carriers and commercial airlines to extend the reach or shorten
the transit time to meet the customer's requirements.

Cross-border Services. The Company offers specialized services for
customers transporting freight across the Canadian and Mexican borders. The
Company provides single carrier responsibility for cross-border shipments,
eliminating the need to deal with a second carrier in the destination
country. The Company also handles customs documentation for the shippers
and provides an advance customs clearance process that allows shipments to
be cleared immediately upon arrival at the border.

Trade Show Services. This service, which the Company began to offer in
1997, focuses on the time- sensitive market for exhibit transportation. The
Company estimates that the trade show transportation market is
approximately $500 million in annual revenues, with profit margins superior
to those of ordinary LTL traffic.

Assembly and Distribution. Using its extensive service center network and
hub service centers, the Company offers assembly and distribution services.
The Company performs assembly services by picking up LTL shipments for a
customer across multi-state areas, transporting them to a regional hub and
consolidating them into a full truckload for inter-regional or long haul
transport. The Company performs distribution services by receiving the
truckload at a regional hub and separating it into LTL shipments which are
transported by the Company to designated customers throughout a multi-state
area.

Truckload Services. The Company's truckload service provides for the
transportation of freight by the truckload (using trailers 28 feet in length)
from a single customer. The Company provides truckload services primarily as
an ancillary service to its LTL national and local accounts, using its LTL
staff and network. In addition, the Company's Streamline Volume Services group
works with dispatchers to identify back haul lanes and markets truckload
services to major shippers to secure freight for returning trucks. Truckload
traffic, excluding the Special Services Division (described below), accounted
for 6% of the Company's tonnage and 3% of the Company's operating revenues in
1997.

Special Services Division. The Company's Special Services Division offers
premium-service dedicated full truckload transportation to selected markets
where on-time reliability is a critical requirement. The Company targets this
service to customers that employ "just-in-time" manufacturing and others, such
as automobile manufacturers, that employ time-sensitive inventory management
systems. The Company positions itself as a provider of premium service at
compensatory rates rather than competing solely on the basis of price.
Currently,

34
<PAGE>

the majority of this division's business involves transport of intermodal rail
containers and regional dry-van transportation for the auto industry. In 1997,
the Special Services Division represented approximately 2% of total operating
revenues.

SALES AND MARKETING

The Company's sales force of approximately 400 employees is organized into
three segments. Approximately 20 national account managers develop
relationships with large customers that have multiple shipping locations and
centralized decision making. Approximately 340 local account managers are
responsible for generating sales through locally-managed accounts within a
territory covered by one of the Company's service centers. Approximately 40
Inside Sales associates establish and maintain their own customer base of
small accounts and can develop leads for the local account managers. All sales
professionals participate in incentive compensation plans based on revenues
and profitability that offer the opportunity to earn quarterly incentives of
up to 41% of base salary on an annual basis. From time to time, the Company
will solicit direct city driver involvement in the sales effort through
promotional contests with potential for significant awards for participating
drivers.

The Company uses its shipment costing systems to direct the efforts of its
sales and marketing team. The system assigns an activity cost to every
shipment which can then be summarized by customer, by origin-destination lane,
by service center or by commodity. For any segment of the business, the
Company can analyze profitability, contribution to fixed cost, cost relative
to other similar segments and price relative to similar segments. By looking
at these measures, the sales team is able to target accounts that need to be
renegotiated and identify, and thereby focus on, customers and commodities
which have the greatest profit potential.

SERVICE CENTERS

The Company operates 166 service centers totaling 8,430 loading doors. The
20 largest service centers, in terms of the number of loading doors, are
listed below.

<TABLE>
<CAPTION>
SERVICE CENTER DOORS OWNED/LEASED
-------------- ----- ------------
<S> <C> <C>
Gaffney, SC............................................... 264 Owned
Harrisburg, PA............................................ 187 Owned
Kansas City, KS........................................... 162 Owned
Lexington, KY............................................. 147 Owned
Memphis, TN............................................... 147 Owned
Atlanta, GA............................................... 138 Owned
Minneapolis, MN........................................... 135 Owned
Los Angeles, CA........................................... 125 Owned
Greensboro, NC............................................ 124 Owned
Richmond, VA.............................................. 124 Owned
Baltimore, MD............................................. 122 Owned
South Holland, IL......................................... 121 Leased
Charlotte, NC............................................. 119 Owned
Columbus, OH.............................................. 115 Owned
Chicago, IL............................................... 110 Owned
Detroit, MI............................................... 107 Owned
Richfield, OH............................................. 107 Owned
Raleigh-Durham, NC........................................ 103 Owned
Greenville, SC............................................ 98 Owned
Louisville, KY............................................ 92 Owned
-----
Total of Top 20........................................... 2,647
107 others owned.......................................... 4,743
39 others leased.......................................... 1,040
-----
Total................................................... 8,430
</TABLE>

35
<PAGE>

FLEET

As of December 31, 1997, the Company operated a fleet of 4,876 tractors,
19,439 trailers and 1,616 forklifts. The number, type and age of the tractors
and trailers are summarized below.

<TABLE>
<CAPTION>
TRACTORS TRAILERS
-------------------------------------- -------------------
ROAD AND LOCAL STRAIGHT 28-
AGE DAY CABS SLEEPERS TRUCKS TOTAL FOOT VANS TOTAL
- --- -------------- -------- -------- ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
0-3 years........... 600 132 1 733 1,208 462 1,670
4-6 years........... 1,417 140 -- 1,557 5,988 806 6,794
7-12 years.......... 1,983 198 74 2,255 4,953 1,418 6,371
Over 12 years....... 329 -- 2 331 1,588 3,016 4,604
----- --- --- ----- ------ ----- ------
Total............. 4,329 470 77 4,876 13,737 5,702 19,439
===== === === ===== ====== ===== ======
</TABLE>

FLEET MAINTENANCE SERVICES

The Company maintains its fleet through 70 shops strategically co-located
with service centers throughout its network. Typically, smaller shops perform
repairs and preventive maintenance and larger shops have the ability to do
complete engine rebuilds and body work for tractors and trailers. In addition,
the Company operates a tire shop for recapping tires. In 1997, the tire shop
recapped over 42,000 tires, more than twice the number of new tires purchased.
The Company produces recapped tires for approximately 40% of the cost of
buying recaps. The Company also operates five "mobile shop" vans that perform
preventive maintenance checks and minor repairs. In total, the fleet services
department employs over 650 mechanics and 150 administrative, clerical and
management personnel. The Company augments its fleet maintenance capability
through purchased services that amount to just over 8% of its total fleet
maintenance expenditures.

INFORMATION TECHNOLOGY

Sophisticated information systems are vital to the Company's profitability
and growth. The Company's mainframe system provides comprehensive data
collection for critical information, including all freight and equipment
movement events, sales calls and activity, billing and rating information and
customer activity information. The Company has built a data warehouse to
evaluate every material component of a shipment's cost. The data warehouse
serves as an information repository used extensively throughout the Company to
control costs, improve operational efficiency and enhance revenue yield. The
information provides decision support for evaluating business indicators, such
as the profitability of a specific customer or the operational efficiency of a
service center.

The Company uses optical document scanning technology to enhance customer
service and billing procedures. As a result, customer service representatives
can, for example, view images of scanned bills of lading and delivery receipts
at their work stations and, if requested, fax a copy of a document to a
customer. The Company has an advanced dispatching system to assist in the
monitoring of driver/trailer schedules and adherence to business operating
plans. Typically, central dispatchers match "extra" loads to available
tractors and drivers located within a geographic region, and the system
enhances the dispatcher's ability to manage loads and drivers from multiple
service centers, thereby improving coordination between dispatchers.

The Company continues to enhance its means of providing communication
abilities via electronic data interchange ("EDI"). The Company supplies
customers with a comprehensive PC software package to help facilitate their
ability to track shipments, create bills of lading and submit claims using EDI
standards. Mainframe-to-mainframe connectivity is also available to certain
customers.

FUEL

For 1997, fuel (excluding fuel taxes) represented approximately 3% of total
operating costs. As of June 30, 1998, the Company had hedged approximately 42%
of its forecasted fuel consumption for the remainder of 1998.

36
<PAGE>

For this portion of its fuel expense, the Company will not be materially
affected (positively or negatively) by changes in fuel prices. However, for
the remaining 58% of forecasted fuel consumption for the remainder of 1998 and
for any other period, to the extent not hedged, fuel costs will change with
market prices. When fuel costs exceed the Company's planned levels, the
Company seeks to charge a portion of the higher cost to its customers through
a fuel surcharge.

COMPETITION

The LTL industry is highly competitive, and the Company competes against
other carriers on the basis of service quality and reliability, as well as
price. The Company competes with regional and national motor carriers, and to
a lesser extent, with package carriers and railroads, some of which have
greater financial and other resources or lower operating costs than the
Company. The Company estimates that the 25 largest LTL carriers generated
approximately $17 billion in revenues and constituted at least 80% of the LTL
market in 1997. The regional market is primarily served by regional, non-union
carriers. The long-haul market is primarily served by national, unionized
carriers. Regional carriers and national carriers provide inter-regional LTL
service. The Company is a full service provider, offering regional, inter-
regional and long-haul service to its customers. The Company does not believe
that any one carrier is dominant in any of the segments of the LTL industry.
The Company believes that it generally competes favorably with most other
carriers on the basis of service quality, reliability and price. The Company
also believes that its size and lane density are advantages when competing
against smaller carriers in the regional and inter-regional markets and
disadvantages when competing against the large national carriers in the long
haul and in certain cases in inter-regional markets. Additionally, certain
smaller niche carriers have greater lane density in certain regional markets
which may give them a competitive advantage in service quality and price in
those markets.

INSURANCE AND SAFETY

LTL trucking companies, including the Company, face multiple claims for
personal injury and property damage relating to accidents, cargo damage and
workers compensation. The Company currently maintains insurance covering these
risks, in amounts and subject to deductibles which it believes are adequate
for its business.

UPC administers an insurance program for workers compensation and public
liability claims for its corporate entities. Under the insurance program UPC
has provided, where required by law or contract, the necessary indemnities,
insurance guarantees, or letters of credit for the performance of the
Company's obligations. UPC has indemnified certain states and insurance
companies against the failure of the Company to pay workers compensation and
public liability claims. In some cases, these indemnities are supported by
letters of credit under which UPC is liable to the issuing bank. Following the
Offering, there will be an increase in the Company's financial guaranty and
indemnification requirements and a related increase in its expenses incurred
in maintaining related letters of credit and surety bonds, an estimate of
which is included in the pro forma consolidated financial statements included
elsewhere in this Prospectus. In addition, failure by the Company to remain in
compliance with the financial covenants and other terms in its Bank Credit
Facility would likely prevent the Company from maintaining the letters of
credit and surety bonds necessary to maintain the insurance agreements, which
could adversely affect the Company's business or financial condition.

EMPLOYEES

The Company has over 12,500 employees, over 9,800 of whom are drivers, dock
workers, fleet mechanics and sales professionals. The Company believes labor
relations as a whole are good and improving, as evidenced by Company victories
in seven out of eight union elections held since July 1997. There are no
elections currently scheduled. On July 10, 1998, the Company offered the
Teamsters Union an opportunity for a system-wide election. The proposal is
subject to acceptance by the Teamsters Union and the approval of the NLRB.
Under the Company's proposal, if the Company were to win such election the
Teamsters Union would no longer represent any Overnite employees. If the
Company were to lose such election the Teamsters Union would gain the right to
represent all eligible road, city, dock and maintenance employees. Management
is confident that the Company would win such election. In 1995, the Company
made a similar election offer through the NLRB which

37
<PAGE>

was not accepted by the Teamsters Union. The Teamsters Union has made efforts
to represent employees at certain of the Company's 166 service centers,
particularly over the last several years. Since 1994, the Company has received
88 petitions for union elections at 65 service centers. To date, approximately
1,800 employees at 22 service centers, including hub service centers in Kansas
City, Kansas and Memphis, Tennessee, representing approximately 14% of all
employees (approximately 17% of non-management employees), are represented by
the Teamsters Union. Elections affecting approximately 400 additional
employees at four additional service centers, representing approximately 3% of
the Company's employees (approximately 4% of non-management employees), are
unresolved. The Company has not to date entered into any collective bargaining
agreements with the Teamsters Union. The Company is engaged in collective
bargaining negotiations over union contract demands at the 22 represented
locations, two of which (the Kansas City hub and Memphis hub) are among the
five largest Company service centers.

Successful operations have enabled the Company to improve equipment,
facilities, wages, benefits, job security and job satisfaction. There are no
assurances, however, that more employees will not vote for unionization in the
future. In that circumstance, one possibility would be for the Company to
alter its posture in collective bargaining, increase its costs and change its
operating methods, which in turn could have a materially adverse effect on the
Company's operating results. Another possibility is for the Teamsters Union to
change its contract demands in a way that would permit the Company to agree
without significantly increasing costs and operating structures. A third
possibility is a strike that, if sufficiently widespread, lengthy and severe,
could have a materially adverse effect on the Company.

In 1995, the NLRB General Counsel issued a series of complaints before the
NLRB contending that the Company had engaged in unfair labor practices that
affected the outcome of employee elections regarding union representation. The
Teamsters disputed the outcome of the union elections at 18 service centers
and sought an order that the Company bargain with the union at these locations
despite the employees' vote against union representation. The Teamsters Union
also sought implementation of a wage increase which had been awarded to non-
union employees in March 1995 but withheld from employees at four other union-
represented service centers pending negotiations with the union. In July 1995,
the Company and the NLRB General Counsel settled certain of these claims, by
requiring the Company to post notices promising not to engage in certain
alleged unfair labor practices. Further, at the four service centers where
employee elections in favor of union representation had been certified by the
NLRB, the Company agreed to implement the wage increase which had been
implemented previously at non-union service centers. The settlement explicitly
did not admit the commission of any unfair labor practices. It did not
resolve, however, whether the Company could be ordered to bargain with the
union at a number of service centers where the union had lost elections. On
April 10, 1998, an administrative law judge at the NLRB found in favor of the
Teamsters Union and the NLRB General Counsel with respect to certain of the
remaining allegations, issuing the ALJ Order that, among other things, would
require the Company to bargain with the Teamsters Union upon request at four
additional service centers, representing 2.7% of employees (3.1% of non-
management employees): Louisville, Kentucky; Lawrenceville, Georgia; Norfolk,
Virginia; and Bridgeton, Missouri. Consolidated into the cases decided by the
ALJ was a complaint claiming that a wage and benefit increase withheld from
Teamster-represented employees in 1996, because the union would not negotiate
the Company's productivity improvement flexibilities on which the increase was
contingent, should have been granted to those employees. The ALJ Order
sustained that claim and recommended that the Company be ordered to make
payments that would amount to approximately $2 million of back pay. The
Company plans to appeal this decision to the full NLRB, and, if necessary, to
a U.S. Court of Appeals. Complaints for bargaining orders at 11 remaining
service centers are still before NLRB administrative law judges. Employees at
the four service centers that are subject to the ALJ Order, together with
those at the 11 other service centers where bargaining orders are being sought
(only nine of which are operating), account for approximately 8% of the
Company's nationwide work force (approximately 9% of non-management
employees).

38
<PAGE>

significantly. In addition, while the Company has not experienced any
significant work stoppages by its employees, the existence of union organizing
activities and unresolved collective bargaining negotiations at certain of the
Company's facilities means that there can be no assurance that the Company
will not experience work stoppages in the future. Any such significant work
stoppage would, in turn, adversely affect the Company's operations. The
Company has adopted contingency plans should a work stoppage occur. However,
depending upon the scope, duration and severity of any such stoppage and the
effectiveness of the Company's contingency plans, the effect could be
material.

Teamsters Union representatives have publicly stated their intention of
increasing the Union's organizing and bargaining efforts during the Offering.
On July 9, 1998, the Teamsters Union announced that Teamster leaders
authorized a nationwide strike to occur at the Company if the Teamsters do not
succeed in reaching a contract with the Company. Prior to such announcement,
certain employees at the Company's Atlanta service center staged a one-day
work stoppage on June 22, 1998 and certain employees of the Company's
Cincinnati, Kansas City and Memphis service centers staged one-day work
stoppages on June 27, 1998. Each of these Teamster-represented service centers
remained open during the day with Company drivers continuing to make pickups
and deliveries. The Company expects that additional Teamster-organized work
stoppages or other job actions may be staged throughout the Offering. The
Company cannot predict the nature, scope or duration of such activities or the
effect such activities may have on the Company's business or financial
condition. In particular, the Company cannot predict the effect that such
activities, or the threat thereof, will have on the Company's customer base.

DRIVERS

The Company currently utilizes approximately 2,500 road drivers and 3,000
city drivers. City drivers generally perform pickups and deliveries in a
designated zone within a service center's coverage area. Road drivers operate
between service centers on predetermined routes established to meet the
Company's service standards. In addition, the Company has approximately 500
other employees qualified to perform driver functions. All drivers employed by
the Company are selected in accordance with specific Company guidelines
relating primarily to safety records and driving experience. Drivers, as well
as dockmen and mechanics, are required to pass drug tests at the beginning of
employment, periodically thereafter and for cause.

REGULATION

The trucking industry has been substantially deregulated by the enactment of
the Motor Carrier Act of 1980, the Trucking Industry Regulatory Reform Act of
1994, the Federal Aviation Administration Authorization Act of 1994 and the
ICC Termination Act of 1995. Rates and services are now largely free of
regulatory controls. However, interstate motor carriers remain subject to
certain regulatory controls imposed by agencies within the Department of
Transportation, such as the Federal Highway Administration and the Surface
Transportation Board. Interstate motor carrier operations are subject to
safety requirements prescribed by the Department of Transportation. Such
matters as weight and dimension of equipment are also subject to federal and
state regulations.

The Federal Aviation Administration Authorization Act of 1994 essentially
deregulated intrastate transportation by motor carriers, prohibiting
individual states from regulating entry, pricing, or service levels. However,
the states retained the right to require compliance with safety and insurance
requirements.

ENVIRONMENTAL REGULATION

The Company is subject to federal, state and local environmental laws and
regulations including among other things laws and regulations dealing with the
transportation, storage, presence, use, disposal and handling of hazardous
materials, discharge of storm water, facility and vehicle emissions into the
atmosphere and underground storage tanks. The Company believes that it is in
substantial compliance with all such environmental laws and regulations.

39
<PAGE>

The Company stores some of the fuel for use in its trucks in 155 underground
storage tanks located in 35 states. The Company has completed a capital
program to upgrade these tanks to comply with current regulations.

The Company's drivers and dock workers are trained in the handling and
transportation of hazardous materials, and drivers are required to have a
hazardous materials endorsement on their driver licenses. Approximately 7% of
the shipments transported by the Company in 1997 were classified as hazardous.
If the Company were to be involved in a spill or other accident involving
hazardous materials, if such materials were found to have contaminated the
Company's equipment or facilities, or if the Company were found to be in
violation of applicable laws and regulations, the Company could be responsible
for clean-up costs, property damage and fines or other penalties, any of which
could have a materially adverse effect on the Company. Shipping hazardous
materials also has the potential to affect freight handling logistics, due to
Department of Transportation and other requirements limiting the types of
materials that can be shipped as part of the same cargo load with certain
hazardous materials.

The Company has been notified by the U.S. Environmental Protection Agency
that it is a potentially responsible person under the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA") or other
federal or state environmental statutes at 11 hazardous waste sites. Under
CERCLA, the Company may be jointly and severally liable for all site
investigation and remediation costs and expenses. After investigating the
nature and costs of potential response actions at these sites and its own
involvement, alone and in relation to the involvement of other named
potentially responsible parties, in waste disposal or waste generation at such
sites, the Company has resolved its liability through de minimis settlements
or believes that its obligations with respect to all such sites not subject to
settlement will involve immaterial monetary liability, though there can be no
assurances in this regard.

LITIGATION

The Company is subject to various litigation in the personal injury,
property damage, freight claim, employment and labor law areas. The Teamsters
Union historically has filed numerous charges alleging violations of the
National Labor Relations Act, which the Company contests and defends. If all
or a substantial portion of this labor law litigation were decided adversely
to the Company, it could have a materially adverse effect on the Company's
operating results. See "--Employees."

Various other legal actions, the majority of which arise in the normal
course of business are pending. None of these other legal actions is expected
to have a material adverse effect on the Company's financial condition.

40
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is information concerning the current executive officers and
directors of the Company. The Company currently has four directors, all of
whom are employees of the Company. Within 90 days following the Offering, the
Company will appoint two additional directors, neither of whom will be
employees of the Company, UPC or their respective affiliates. Within 180 days
following the Offering, the Company plans to appoint two additional directors,
neither of whom will be employees of the Company, UPC or their respective
affiliates. These two additional outside directors will replace two inside
directors, other than Mr. Suggs.

The names and ages of each of the Company's current executive officers and
directors are listed below, followed by a description of their employment
history and current directorships of publicly traded companies.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Leo H. Suggs......... 58 Chairman of the Board of Directors, Chief Executive
Officer and President
Patrick D. Hanley.... 53 Senior Vice President and Chief Financial Officer
and Director
Gordon S. Mackenzie.. 53 Senior Vice President--Operations and Director
John W. Fain......... 44 Senior Vice President--Marketing and Sales and
Director
J. Paul Heaton....... 60 Senior Vice President--Operations Strategy
Mark B. Goodwin...... 49 Vice President and General Counsel
</TABLE>

Leo H. Suggs. Mr. Suggs, who was appointed Chairman and Chief Executive
Officer of the Company in April 1996, has 40 years of experience in the
trucking industry. Before joining the Company, he was President and Chief
Executive Officer of Preston Trucking Company Inc., an LTL carrier, from 1993
to 1996. Prior to that, Mr. Suggs served in various executive positions with
Yellow Corporation, Preston Trucking Company, Inc., and Ryder PIE.

Patrick D. Hanley. Mr. Hanley was appointed as Senior Vice President and
Chief Financial Officer of the Company in June 1996. Before joining the
Company, Mr. Hanley served in a variety of finance positions at UPC and its
subsidiaries, beginning in 1983. He was Vice President of Finance of Union
Pacific Resources Group, Inc. from 1990 to 1996. He previously held various
management positions with Ford Motor Company beginning in 1971.

Gordon S. Mackenzie. Mr. Mackenzie was appointed Senior Vice President--
Operations for the Company in July 1996. Prior to that, Mr. Mackenzie served
as Senior Vice President--Marketing and Sales for the Company from April 1996
to July 1996. Prior to joining the Company in 1996, he served as Senior Vice
President and Chief Operating Officer of Preston Trucking Company, Inc. from
1993 to 1996. Prior to that, Mr. Mackenzie served in various executive
positions with Standard Trucking, Ryder PIE and Transcon Lines.

John W. Fain. Mr. Fain was appointed Senior Vice President--Sales and
Marketing in 1996. From 1995 to 1996 he served as Senior Vice President--
Operations, and from 1992 to 1995 as Vice President--Southeast Region. Mr.
Fain joined the Company as General Counsel in 1982.

J. Paul Heaton. Mr. Heaton was appointed Senior Vice President--Operations
Strategy in 1995. From 1989 to 1995 he served as Senior Vice President--
Operations. Prior to that, he held various positions with the Company.

Mark B. Goodwin. Mr. Goodwin was appointed Vice President and General
Counsel of the Company in 1992. Prior to that, he served as principal labor
counsel to Union Pacific Railroad Company from 1983 to 1992, and prior to
that, as a lawyer with Steptoe & Johnson in Washington, D.C.

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

Within 90 days following the Offering, an Audit Committee will be formed and
will consist of at least two directors, none of whom will be employees of the
Company or the Company's subsidiaries. The Audit

41
<PAGE>

Committee will meet regularly with the Company's financial management,
internal auditors and independent certified public accountants to review the
work of each. The independent certified public accountants and the internal
auditors will meet regularly with the Audit Committee, without the Company's
financial management present, to discuss the results of their examination and
their opinions on the adequacy of the internal controls and the quality of the
financial reporting. The Committee also will review the scope of audits. The
Committee will recommend to the Board of Directors each year the firm of
independent certified public accountant to audit the books and accounts of the
Company and its consolidated subsidiaries.

COMPENSATION COMMITTEE

Within 90 days following the Offering, a Compensation Committee will be
formed and consist of at least two directors, none of whom will be employees
of the Company or the Company's subsidiaries. The Committee will make
recommendations to the Board of Directors as to the salaries and other
benefits of all senior executive officers. The Committee will administer the
Company's Executive and Management Incentive, Stock Compensation, Employee
Stock Option and Employee Stock Purchase Plans and determine the amounts of,
and the individuals to whom, incentive, stock and stock-related awards shall
be made thereunder. The Compensation Committee also will review the
performance of the Chief Executive Officer and President, review the
evaluations of the Company's senior management conducted by the Chief
Executive Officer and President and oversee his development of plans for the
succession of senior management personnel.

GOVERNANCE COMMITTEE

After the Offering, the Board of Directors will designate a Governance
Committee that will consist of at least two directors, a majority of whom will
not be employees of the Company or the Company's subsidiaries. The Governance
Committee will be responsible for matters related to service on the Board of
Directors and associated issues of corporate governance. The Governance
Committee from time to time will evaluate the size, composition and
performance of the Board of Directors. Prior to each meeting of shareholders
of the Company, the Governance Committee will review the qualifications of
individuals for consideration as director candidates and shall recommend to
the Board of Directors, for its consideration, the names of individuals for
election. The Governance Committee also will recommend to the Board of
Directors those directors to be selected for membership on the various Board
committees and, from time to time, will conduct studies and make
recommendations to the Board of Directors regarding compensation for
directors.

EXECUTIVE COMMITTEE

After the Offering, an Executive Committee will be formed. To the extent
permitted by Virginia law, the Executive Committee will have all the powers of
the Board, when the Board is not in session, to direct and manage, in the
Company's best interest, all of the business and affairs of the Company in all
cases in which specific directions have not been given by the Board.

ELECTION AND COMPENSATION OF DIRECTORS

The Board of Directors of the Company is divided into three classes.
Directors of the first class will hold office until the annual meeting of
shareholders to be held in 1999; directors of the second class will hold
office until the annual meeting of shareholders to be held in 2000; and
directors of the third class, which will include Mr. Suggs, will hold office
until the annual meeting of shareholders to be held in 2001. Thereafter, each
director will be elected for a term of three years.

After the Offering, all directors not employed by the Company will receive a
retainer of $16,000 per year, payable 50% in cash and 50% in Company Common
Stock. Directors who are employees of the Company will not receive retainers.
In addition, directors will receive $1,000 for each Board meeting attended and
$500 for each Board Committee meeting attended. Directors will be reimbursed
for travel expenses incurred in conjunction with attendance at Board and Board
Committee meetings.

42
<PAGE>

COMPENSATION OF EXECUTIVES

The following table summarizes the compensation paid by the Company or UPC
to the Company's Chief Executive Officer and the next four most highly
compensated executive officers of the Company, in their capacities as officers
of OTC, for 1997.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------- ----------------------------------
RESTRICTED
NAME AND OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION SALARY BONUS COMPENSATION AWARDS(C) SARS COMPENSATION
------------------ -------- ------ ------------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Leo H. Suggs............ $307,500 $ 0 $252,442(a) $ 0 $ 0 $15,085(d)
Chairman of the Board
of Directors and Chief
Executive Officer
Patrick D. Hanley....... 221,400 90,000 (b) 0 0 10,165(e)
Senior Vice President
and Chief Financial
Officer
Gordon S. Mackenzie..... 205,000 81,500 (b) 0 0 6,990(f)
Senior Vice President--
Operations
John W. Fain............ 169,200 81,500 (b) 0 0 6,415(g)
Senior Vice President--
Marketing and Sales
J. Paul Heaton.......... 169,900 45,000 (b) 0 0 13,189(h)
Senior Vice President--
Operations Strategy
</TABLE>
- --------

(a) Amount includes $226,825 paid to Mr. Suggs in connection with his
relocation to Richmond, Virginia and the resulting loss on the sale of his
home.
(b) Personal benefits in amounts below reporting thresholds have been omitted.

(c) The following UPC restricted stock holdings as of December 31, 1997 are
subject to forfeiture if the holder terminates his employment with the
Company within three years of the date of grant of the restricted stock
award: Mr. Suggs, 4,462 shares with a value of $279,433; Mr. Hanley, 4,500
shares with a value of $281,813; Mr. Fain, 11,600 shares with a value of
$726,450. Dividends are accumulated but will not be paid on Mr. Suggs'
4,462 shares and 7,436 of Mr. Fain's shares until the restrictions expire.
Dividends are currently payable on all other such shares. Following the
end of fiscal year 1997, Mr. Suggs received restricted stock awards
aggregating 7,276 shares and Mr. Hanley received restricted stock awards
totaling 1,650 shares.

Certain other restricted stock holdings were awarded under the UPC Long-Term
Performance Plan (the "UPC LTPP"). These holdings were awarded in three
installments that are subject to UPC stock price targets of $72, $82 and $92
per share, respectively. Dividends are not payable on restricted shares
awarded under the UPC LTPP until the UPC stock targets are met. The stock
price levels must be sustained for 20 consecutive days prior to November 20,
2000 and the holder generally must remain employed with the Company through
November 20, 2000 in order to receive the shares. UPC's closing stock price
on December 31, 1997 was $62.625 per share and on July 10, 1998 was $43.0625
per share. Aggregate restricted stock holdings under the UPC LTPP and the
value thereof as of December 31, 1997 are as follows: Mr. Suggs, 31,500
shares, $1,972,688; Mr. Hanley, 25,200 shares, $1,578,150; Mr. Mackenzie,
25,200 shares, $1,578,150; Mr. Fain, 25,200 shares, $1,578,150; Mr. Heaton,
9,450 shares, $591,806. Upon consummation of the Offering, certain of these
restricted stock holdings will be forfeited and replaced by restricted stock
of the Company. See"--Treatment of Existing Grants of UPC Options and
Retention Shares."

(d) Amount includes $10,360 in executive life insurance premiums and $4,725 in
matching contributions to the Company's thrift plans.
(e) Amount includes $3,763 in executive life insurance premiums and $6,402 in
matching contributions to the Company's thrift plans.
(f) Amount includes $3,836 in executive life insurance premiums and $3,154 in
matching contributions to the Company's thrift plans.
(g) Amount includes $1,533 in executive life insurance premiums and $4,882 in
matching contributions to the Company's thrift plans.
(h) Amount includes $8,070 in executive life insurance premiums and $5,119 in
matching contributions to the Company's thrift plans.

43
<PAGE>

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES

The following table presents information concerning UPC options that were
acquired by the Company's Chief Executive Officer and the next four most
highly compensated executive officers of the Company while such persons were
employed by the Company and that were exercised during 1997 and 1997 fiscal
year end numbers and values for such options.

<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS/SARS AT FY END OPTIONS/SARS AT FY END
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leo H. Suggs............ 0 $ 0 29,778 90,000 $ 490,593 $551,250
Patrick D. Hanley....... 0 0 0 72,000 0 441,000
Gordon S. Mackenzie..... 0 0 0 72,000 0 441,000
John W. Fain............ 4,760 184,141 49,547 72,000 1,207,140 441,000
J. Paul Heaton.......... 18,145 632,468 72,681 27,000 2,068,203 165,375
</TABLE>

COMPENSATION PURSUANT TO COMPANY PLANS

Set forth below is information with respect to certain benefit plans of the
Company to be effective on and after the date of the Offering pursuant to
which cash and noncash compensation is proposed to be paid or distributed in
the future to the executive officers of the Company:

COMPANY EXECUTIVE AND MANAGEMENT INCENTIVE PLANS

The Company plans to adopt an Executive Incentive Plan ("EIP") and a
Management Incentive Plan ("MIP") as programs designed to tie executive pay
specifically to Company performance. Certain senior executives will be
eligible to participate in the EIP and certain other key employees will be
eligible to participate in the MIP. The EIP and the MIP will be administered
by the Compensation Committee of the Board of Directors. The Committee will
select those employees who will participate in the EIP and the MIP for a
particular year and will determine the incentive award, if any, payable to
each participant for a particular year.

The aggregate incentive payments under the EIP and the MIP for any year
cannot exceed the amount credited to the Incentive Reserve Account at the end
of that year. The maximum amount that may be credited to the Incentive Reserve
Account will be based on a formula to be contained in the EIP and the MIP when
adopted. The Company's independent certified public accountants will
determine, and report to the Committee, the amount that may be credited to the
Incentive Reserve Account each year in accordance with the formula. Amounts
that are credited to the Incentive Reserve Account that are not awarded in a
particular year may be awarded in later years.

Participants in the EIP may defer receipt of all or part of their awards
under the plan. Deferrals are credited with gains, and charged with losses, as
if such amounts were invested in the same funds that are offered as investment
options under the Company's thrift plans.

STOCK COMPENSATION PLAN

The Company intends to adopt a Stock Compensation Plan. The Stock
Compensation Plan is intended to serve as a long-term compensation plan for
executives, certain key managers and other contributing employees. The Company
believes that the Stock Compensation Plan will assist it in recruiting and
retaining employees with ability and initiative and will help those employees
associate their interests with those of the Company and its shareholders.

The Compensation Committee of the Board will administer the Stock
Compensation Plan. The Compensation Committee may delegate its authority to
administer the Stock Compensation Plan to one or more officers of the Company;
provided, however, that the Compensation Committee may not delegate its

44
<PAGE>

responsibility with respect to individuals who are subject to Section 16 of
the Exchange Act. As used in this summary, the term "Administrator" means the
Compensation Committee and any delegate.

Any employee of the Company or a related entity who, in the sole discretion
of the Administrator, has contributed or can be expected to contribute to the
profits or growth of the Company or a related entity may be selected to
participate in the Stock Compensation Plan. Any such employee may be awarded
options, stock appreciation rights ("SARs"), stock awards, performance shares,
or a combination of such awards.

Options granted under the Stock Compensation Plan may be incentive stock
options or nonqualified stock options. Except for options issued on conversion
of certain UPC options as described below, the option price cannot be less
than the shares' fair market value on the date of grant. The option price may
be paid in cash, in a cash equivalent acceptable to the Administrator, with
shares of Common Stock or with a combination of cash and Common Stock. Options
may be exercised in whole or in part at such times and subject to such
conditions as may be prescribed by the Administrator; provided, however, that
the option cannot be exercised more than ten years after its grant.

Participants in the Stock Compensation Plan also may be granted SARs. SARs
entitle the participant to receive the lesser of (a) the excess, if any, of
the fair market value of the Company's Common Stock on the date of exercise
over the Initial Value or (b) the Initial Value. The Initial Value is
determined by the Administrator on the date of grant but cannot be less than
the fair market value of a share of Company Common Stock on that date. The
amount payable upon the exercise of an SAR may be paid in cash, Company Common
Stock or a combination of the two. SARs may be granted in tandem with options
or independently of options. SARs may be exercised in whole or in part at such
times and subject to such conditions as may be prescribed by the
Administrator; provided, however, that an SAR cannot be exercised more than
ten years after its grant.

Participants in the Stock Compensation Plan may be awarded shares of Company
Common Stock. A participant's rights in the stock award may be nontransferable
or forfeitable or both for a period of time or subject to such conditions as
may be prescribed by the Administrator. These conditions may include, for
example, a requirement that the participant continue employment for a
specified period, i.e., a retention stock award, or that the Company, related
entity or the participant achieve stated objectives. If the shares are not
immediately vested and transferable, the period of restriction will be at
least three years; provided, however, that the period may be one year if the
transferability, vesting or both is subject to the satisfaction of performance
objectives.

The Stock Compensation Plan also authorizes the award of performance shares
to participants. A performance share award entitles the participant to receive
a payment equal to the fair market value of a specified number of shares of
Company Common Stock if certain performance objectives or other conditions
prescribed by the Administrator are satisfied. The performance period will be
at least three years; provided, however, that the period may be one year if
the performance shares will be earned upon the achievement of stated
performance objectives. To the extent that the performance shares are earned,
the obligation may be settled in cash, Company Common Stock or a combination
of the two.

The Stock Compensation Plan provides that each outstanding option and SAR
will become fully exercisable, each outstanding stock award will become vested
and transferable and outstanding performance shares will be earned in the
event of a change in control (as defined in the Stock Compensation Plan) or
upon certain tender offers and exchange offers for the Company Common Stock.
If a participant becomes subject to the excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") on account of a change
in control, the Stock Compensation Plan provides that benefits thereunder will
be reduced to avoid that result if such reduction would allow the participant
to receive a greater net after-tax benefit.

A maximum of 3.75 million shares of Company Common Stock may be issued under
the Stock Compensation Plan, including options and retention stock awards
issued on conversion of certain UPC options

45
<PAGE>

and retention awards as described below. A maximum of 1.25 million shares of
Company common stock may be issued under the Stock Compensation Plan as stock
awards and in settlement of performance share awards. The share limitations
will be adjusted as the Compensation Committee deems appropriate in the event
of a stock dividend, stock split, combination, reclassification or other
similar events.

No option, SAR, stock award or performance shares may be granted under the
Stock Compensation Plan after August 1, 2008. The Board may sooner terminate
the Stock Compensation Plan without further action by shareholders. The Board
also may amend the Stock Compensation Plan except that no amendment will be
effective without shareholder approval if the amendment (a) increases the
aggregate number of shares of Company Common Stock that may be issued under
the Stock Compensation Plan (other than an adjustment described in the
preceding paragraph) or (b) changes the class of individuals who are eligible
to participate in the Stock Compensation Plan.

The Company currently anticipates that Mr. Suggs will be entitled to grants
of 9,852 and 14,778 retention shares, subject to attainment of certain
earnings targets for 1998 and 1999, respectively, to be set by the Board of
the Company.

To fortify employee commitment to the financial success of the Company, and
contingent upon the completion of the Offering, the Company intends to award
options to purchase shares to all employees. Each person who is classified as
a full-time or part-time employee of the Company, OTC or OHI on the effective
date of the Offering will be granted a nonqualified option under the Stock
Compensation Plan. Options granted to full-time employees will cover 200
shares of the Company's Common Stock and options granted to part-time
employees will cover 100 shares of the Company's Common Stock. The option
price per share will equal the initial public offering price of the Company's
Common Stock (the "IPO Price"). The options will become exercisable in two
equal installments on August 1, 1999 and August 1, 2000, except that
exercisability will be accelerated in the event of the optionee's death,
disability or retirement or in the event of a change in control (as defined in
the Stock Compensation Plan) or certain tenders or exchanges offer for the
Company's Common Stock. The options will expire on July 31, 2008. If the
optionee terminates employment for any reason other than death, disability or
retirement, the option may be exercised, to the extent that it is exercisable
at termination, for up to 90 days following termination. If the optionee's
employment ends on account of death, disability or retirement, the option may
be exercised during the five-year period following termination or until July
31, 2008, whichever is shorter. Each person who is classified as a full-time
or part-time employee of the Company, OTC or OHI on August 1, 1999, and who
does not hold an option granted on the effective date of the Offering will be
granted a nonqualified option under the Stock Compensation Plan for 100 and 50
shares of the Company's Common Stock, respectively. The options will become
exercisable on August 1, 2000 and will be subject to the same terms and
conditions as the original option grants. The Company's grant of options under
the Stock Compensation Plan to employees who are represented by the Teamsters
Union is subject to bargaining with Teamsters Union representatives.

EMPLOYEE STOCK PURCHASE PLAN

Under the Company's Employee Stock Purchase Plan (the "Purchase Plan"), all
employees of the Company have been able to subscribe annually for up to 200
shares of UPC common stock at a discount from the prevailing market price as
described below. For 1998, 1,705 employees have subscribed for a total of
53,811 shares of UPC common stock. In connection with the Offering and subject
to employee cancellation rights described below, the employee subscriptions
will be equitably converted into subscriptions for an equivalent value of
Company Common Stock at an equivalent discount per share. Under the Purchase
Plan, employees will continue to have the right to cancel their subscriptions
on or before October 9, 1998 and receive all funds deposited, with interest at
the rate of 5 3/4% per year.

The Purchase Plan, as equitably adjusted, permits employees to elect to
participate in the Purchase Plan before the commencement of a subscription
period that is determined each year by the Board of Directors. Each

46
<PAGE>

employee may subscribe for a limited number of shares of Common Stock and pay
for such Common Stock with cash or may designate an amount to be withheld from
his or her paycheck. Such withheld amounts will be applied to the purchase of
shares of the Company's Common Stock on the last day of the subscription
period. The price of the shares purchased under the Purchase Plan will be 95%
of the closing price per share of the Company's Common Stock on the Nasdaq
National Market (the "Fair Market Value") on the last date available to
subscribe to the Purchase Plan for the applicable year.

If a participating employee ceases to be an employee of the Company before
the last date on which the employee may cancel his or her subscription and
withdraw from the Purchase Plan, for any reason other than death or
retirement, his or her subscription will be automatically canceled. All funds
deposited by such employee will be returned, with interest at the rate of 5
3/4% per year.

The Company plans to continue the Purchase Plan for Company Common Stock
following the completion of the Offering. The Compensation Committee of the
Board of Directors will administer the Purchase Plan. The Board of Directors
may amend or terminate the Purchase Plan. The Purchase Plan is intended to
comply with the requirements of Section 423 of the Code. Availability of the
Purchase Plan, as adjusted, to employees at the Company's facilities that are
represented by the Teamsters Union is subject to bargaining with the Teamsters
Union.

PENSION PLAN

Pensions for employees of the Company are provided through the Retirement
Plan for Employees of Overnite Transportation Company and Subsidiaries (the
"Basic Plan") and, with respect to certain employees of the Company, the
Company's Supplemental Executive Retirement Plan (the "Supplemental Plan").

The Basic Plan is a noncontributory, funded plan. The amount of the annual
pension benefit from all sources is based upon average annual compensation for
the five consecutive calendar years that produce the highest average ("final
average earnings"), and number of years of credited service (capped at 30
years of credited service). Regular compensation for this purpose is W-2
income plus deferrals under Sections 401(k) and 125 of the Code, less the
amount of executive life insurance premiums and income from option exercises.
For the named executive officers, regular compensation for 1997 equals the
amounts included in the salary column of the summary compensation table above
and $226,825 of Other Annual Compensation for Mr. Suggs disclosed in such
table. The amounts listed in the bonus column of the summary compensation
table were paid in 1998 and will be included in regular compensation for 1998.

The Supplemental Plan is a noncontributory, unfunded plan that provides,
unlike the Basic Plan, for the grant of up to five years of deemed additional
service and/or deemed age to employees, for the inclusion of earnings in
excess of the limits contained in the Code and deferred incentive compensation
in the calculation of final average earnings and for any benefit in excess of
the limitations provided for under the Code.

The estimated annual benefits payable under the Basic Plan and Supplemental
Plan at normal retirement age 65 based upon final average earnings and years
of credited service are illustrated in the following table.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
--------------------------------------------
FINAL AVERAGE EARNINGS 15 20 25 30 35
- ---------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000........................... $ 32,344 $ 43,125 $ 53,906 $ 64,688 $ 64,688
150,000........................... 38,813 51,750 64,688 77,625 77,625
175,000........................... 45,281 60,375 75,469 90,563 90,563
200,000........................... 51,750 69,000 86,250 103,500 103,500
225,000........................... 58,219 77,625 97,031 116,438 116,438
250,000........................... 64,688 86,250 107,813 129,375 129,375
300,000........................... 77,625 103,500 129,375 155,250 155,250
400,000........................... 103,500 138,000 172,500 207,000 207,000
500,000........................... 129,375 172,500 215,625 258,750 258,750
</TABLE>

47
<PAGE>

The benefits in the foregoing Pension Plan Table would be paid in the form
of a life annuity or another actuarially equivalent form and are not subject
to any deduction for Social Security benefits.

The credited years of service for each of the five individuals named in the
Summary Compensation Table under both the Basic Plan and the Supplemental Plan
are as follows: Mr. Suggs 2, Mr. Fain 16, Mr. Hanley 15, Mr. Heaton 35 (capped
at 30), and Mr. Mackenzie 2. The Company and Mr. Suggs have agreed that if Mr.
Suggs remains employed with the Company until April 15, 1999, he will receive
seven additional years of credited service.

THRIFT PLANS

The Company maintains two thrift plans (the "Basic 401(k) Plans") that are
qualified under the Code for the benefit of its eligible hourly and salaried
employees. Under the Basic 401(k) Plans, participants may elect to defer
between 1% and 10% of their compensation, up to a maximum of $10,000 per year.
The Company currently matches 50% of all amounts deferred by a participant, up
to a deferral of 6% of a participant's compensation. Based on the Company's
financial performance, these matching contributions can increase to 75% or
100% of amounts deferred by participants up to a deferral of 6% of a
participant's compensation. The Company's matching contributions allocated to
each participant vest in increments over the third to fifth years of service.
All contributions under the Basic 401(k) Plans are currently invested,
pursuant to participant-directed elections, in mutual funds and institutional
commingled funds managed by The Vanguard Group of Investment Companies.

The Company also maintains a supplemental 401(k) plan for certain employees
(the "Supplemental 401(k) Plan"). The Supplemental 401(k) Plan is an unfunded,
nonqualified plan that provides benefits to participants in the Basic 401(k)
Plan for salaried employees in excess of those permitted under the Basic
401(k) Plan because of limitations set forth in the Code. The Supplemental
401(k) Plan otherwise mirrors the terms of the Basic 401(k) Plan.

TREATMENT OF EXISTING GRANTS OF UPC OPTIONS AND RETENTION SHARES

The Company and UPC have agreed that, upon consummation of the Offering, all
UPC options (other than certain options described below) held by employees of
the Company will remain outstanding options on UPC stock and will vest (if
unvested) contingent on continued employment with the Company, in accordance
with their current vesting schedule. Subject to vesting and without extending
the exercise period of 10 years from the date of grant, Company employees who
hold such options will have up to five years from the date of the Acquisition
to exercise such options. Any of these options that are Incentive Stock
Options ("ISOs") will automatically become nonqualified options. Any UPC
retention shares, except those associated with UPC's Long Term Performance
Program (the "UPC LTPP"), will remain shares of UPC common stock and vest
immediately upon completion of the Offering.

UPC options granted in connection with the UPC LTPP were awarded in three
installments, with different vesting requirements for each installment.
Options in the first installment ("Installment One") vested in January 1998.
Installment One options will remain options on UPC shares, subject to a
maximum exercise period of five years from the date of the Acquisition. Two
thirds of the retention shares granted in the UPC LTPP will remain UPC shares
subject to existing vesting requirements of continuous employment with the
Company until November 20, 2000 and achieving certain UPC stock price targets.
Options in the second installment ("Installment Two") and the third
installment ("Installment Three"), which would have vested in January of 1999
and 2000, respectively, and the remaining one third of the retention shares
will be forfeited as part of the UPC LTPP, but participants will be
immediately eligible for participation in the Company's Stock Compensation
Plan as described below.

The Company will grant options on shares of Common Stock (the "New Options")
and retention shares of Common Stock (the "New Retention Shares") under the
Company's Stock Compensation Plan in lieu of the

48
<PAGE>

forfeited Installment Two and Installment Three UPC options and the forfeited
one third of the retention shares. The option price for the New Options (the
"New Option Price") will be calculated by multiplying the IPO Price by a
fraction, the numerator of which is the forfeited UPC option price (the "UPC
Option Price") and the denominator of which is the price of UPC common stock
as of the date of commencement of the Offering (the "UPC Calculation Price"),
provided that the New Option Price will not be more than the IPO Price.

Each New Option will entitle the holder to purchase the number of shares of
Company Common Stock determined in accordance with the following formula:

Number (UPC Calculation Price - UPC Option Price)
of = Number of forfeited X -----------------------------------------
New UPC Options (IPO Price - New Option Price)
Options

</TABLE>

In the event the New Option Price is the IPO Price, the number of New Options
will be determined by multiplying the number of forfeited UPC Options by the
ratio of the UPC Calculation Price to the IPO Price.

Subject to continued employment with the Company, the New Options will vest
incrementally over a three-year period. Three installments of New Retention
Shares, totalling 17.5% of the holder's New Option awards, will be awarded by
the Company in lieu of the forfeited UPC retention shares. New Retention
Shares in the first installment, equal to 7.5% of the New Option awards, will
vest three years after the Offering subject to the holder's continuous
employment with the Company (with certain exceptions). New Retention Shares in
the second and third installments, each equal to 5% of the New Option awards,
will also vest three years after the Offering subject to the holder's
continuous employment with the Company (with certain exceptions), provided the
Company's Common Stock price equals or exceeds 125% and 160% of the IPO Price,
respectively, for 20 consecutive days on or before the date falling four years
after the completion of the Offering.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table indicates the number of shares of Common Stock of the
Company that will be owned beneficially upon consummation of the Offering and
the number of shares of common stock of UPC owned beneficially as of June 30,
1998 by each director and executive officer of the Company. Prior to the
Offering, no director or executive officer beneficially owned any other equity
securities of the Company or UPC. Each of the executive officers of the
Company has consented to the substitution of certain options to purchase
shares of UPC common stock and UPC retention shares beneficially owned prior
to the Offering for options to purchase shares of Common Stock and Company
retention stock, respectively, after the Offering. See "--Treatment of
Existing Grants of UPC Options and Retention Shares." Assuming all such
substitutions, the percentage of outstanding Common Stock that will be
beneficially owned after the Offering by directors and executive officers as a
group will be less than 1% of the outstanding Common Stock. Unless otherwise
noted, each individual has sole voting and investment power.

<TABLE>
<CAPTION>
SHARES OF
COMPANY COMMON SHARES OF UPC COMMON STOCK
STOCK TO BE OWNED BENEFICIALLY
OWNED AS OF JUNE 30,
NAME BENEFICIALLY(1) 1998
---- --------------- --------------------------
<S> <C> <C>
Leo H. Suggs.................. 34,781 103,016
Patrick D. Hanley............. 27,825 78,144
Gordon S. Mackenzie........... 27,825 49,400
John W. Fain.................. 27,825 117,561
J. Paul Heaton................ 10,434 110,094
All directors and executive
officers as a group.......... 133,907 563,420
</TABLE>
- --------

(1) Represents Company Retention Shares to be granted pursuant to the
Company's Stock Compensation Plan upon completion of the Offering at an
assumed conversion ratio of 3.3125 to 1. See "--Compensation Pursuant to
Company Plans--Treatment of Existing Grants of UPC Options and Retention
Shares."

49
<PAGE>

THE ACQUISITION

Prior to the Offering, the business of the Company has been conducted by
OTC, an indirect subsidiary of UPC. On May 20, 1998, UPC announced that it
intended to sell its entire interest in OTC through an initial public
offering. Overnite Corporation was incorporated to issue and sell shares of
Common Stock pursuant to the Offering and to consummate the Acquisition. Upon
consummation of the Offering and the Acquisition, OTC will become an indirect
wholly owned subsidiary of the Company.

The Company and UPC will make elections under Section 338(h)(10) of the
Code, so that the Company's acquisition of the OHI Stock will be treated, for
federal income tax purposes, as a purchase of all of OHI's and OTC's assets.
As a result, for federal income tax purposes, the basis of the assets of OHI
and OTC acquired by the Company will be adjusted in accordance with applicable
Treasury regulations to reflect the price paid by the Company for the OHI
Stock, plus the liabilities of OHI deemed assumed for federal income tax
purposes at the time of the Acquisition. As a result of the Section 338
Elections, the Company will be able to claim depreciation or amortization
deductions for substantially all of the purchase price (including goodwill)
for federal income tax purposes. See "Unaudited Pro Forma Consolidated
Financial Statements."

The Company will use the estimated net proceeds of the Offering of $414
million, together with a $105 million borrowing under the Bank Credit
Facility, to complete the Acquisition. The purchase price for the OHI Stock
will be determined through discussions and negotiations among UPC, the Company
and the Underwriters and, inasmuch as it will be based on the offering price
of the shares of Common Stock of the Company being sold in the Offering, will
reflect the factors considered in determining such offering price. If the
Underwriters' over-allotment option is exercised, the net proceeds therefrom
will be used to reduce indebtedness under the Bank Credit Facility. See
"Underwriters."

The existing management of OTC will operate the Company after the Offering
and the Acquisition.

AGREEMENTS WITH UNION PACIFIC CORPORATION

In connection with the Offering, the Company, OHI, OTC and UPC are entering
into a number of agreements. These include (1) the Stock Purchase and
Indemnification Agreement, pursuant to which (a) the Company will purchase all
of the shares of OHI Stock from UPC, and (b) the Company, OHI and OTC, on the
one hand, and UPC, on the other, will agree to indemnify each other and the
respective subsidiaries, directors, officers, employees, agents and
representatives thereof for certain costs and liabilities relating to the
Offering, the Acquisition and their respective businesses and operations; (2)
the Services Agreement, which will provide for the continued provision of
certain corporate and administrative services by UPC to the Company; (3) the
Tax Allocation Agreement, which will provide for the payment of taxes for
periods during which the Company and UPC are included in the same consolidated
group for Federal income tax purposes or the same consolidated, combined or
unitary returns for state tax purposes, the allocation of responsibility for
the filing of tax returns and certain other related matters; (4) the Pension
Plan Agreement, which will provide for the transfer of the Company's pension
plan assets from a master trust established by UPC to a separate trust to be
established by the Company; and (5) Computer and Information Technology
Agreements pursuant to which UPC will provide the Company with certain
computer and telecommunications services.

STOCK PURCHASE AND INDEMNIFICATION AGREEMENT

The Company, OHI, OTC and UPC are entering into a Stock Purchase and
Indemnification Agreement. Under this Agreement, the Company will consummate
the Acquisition by purchasing all of the outstanding shares of OHI Stock for
an estimated aggregate purchase price of $519 million immediately following
the Offering. In addition, the Company, OHI and OTC, on the one hand, and UPC,
on the other (the "Indemnifying Party"), will indemnify the other and the
respective subsidiaries, directors, officers, employees, agents and

50
<PAGE>

representatives thereof (the "Indemnified Party") for certain costs or
liabilities relating to, resulting from or arising out of (1) Federal or state
securities laws which are incurred by the Indemnified Party as a result of the
Offering, including costs and liabilities arising out of certain
misrepresentations in or omissions from the Registration Statement or
Prospectus but, in the case where UPC is the Indemnifying Party, only to the
extent that such costs and liabilities arise out of misrepresentations or
omissions relating to the businesses or operations of UPC or its subsidiaries
other than the Company, (2) the Offering and the Acquisition, (3) the
businesses, operations or assets conducted or owned or formerly conducted or
owned by the Indemnifying Party and its subsidiaries and (4) the failure by
the Indemnifying Party to comply with the Indemnification Agreement or any
other agreements executed in connection with the Offering.

The Stock Purchase and Indemnification Agreement also provides that the
Company and OTC will use reasonable efforts to obtain the release of UPC, or
their substitution for UPC, on all guarantees, surety and performance bonds,
letters of credit and other arrangements pursuant to which UPC guarantees or
secures any Company, OHI or OTC liability, and will indemnify UPC for any
liabilities incurred under such guarantees, bonds, letters of credit and other
agreements, or costs incurred for the maintenance of such guarantees, bonds,
letters of credit and other agreements to the extent UPC is not released
thereunder. So long as UPC's guaranty of OTC's obligations under a leveraged
lease financing of certain trucks remains in effect, the Company, OHI and OTC
have agreed either (1) to maintain certain financial covenants which are the
same as those applicable to the Bank Credit Agreement or (2) to deposit
Collateral (as defined in the agreement) with UPC with a value equal to UPC's
estimated maximum exposure under such guaranty.

The Stock Purchase and Indemnification Agreement requires the Company, OHI
and OTC to indemnify UPC for any liabilities (and related costs) relating to
benefits under, or resulting from administration of, the Company's or OTC's
employee benefit plans and relating to the participation of its employees or
former employees in such plans of UPC. A comparable indemnification runs to
the Company, OHI and OTC from UPC for any liabilities (and related costs)
attributable to UPC's administration of its employee benefit plans and
relating to the participation of its employees or former employees.

SERVICES AGREEMENT

The Company and UPC are entering into a Services Agreement pursuant to which
UPC will continue to provide certain corporate and administrative services to
the Company, OHI and OTC. These services will include financial reporting,
auditing, employee benefits administration, insurance and governmental
relations. Charges for the services provided by UPC through third parties will
be based on the actual costs incurred. Charges for all other services will be
based on fees negotiated by the parties, which fees shall include a reasonable
allocation of direct and indirect costs (including, without limitation,
employee salaries, benefits and other costs) and be subject to good faith
renegotiation each month if necessary. The Services Agreement may be
terminated (1) at any time as to any service or part thereof by the Company on
30 days' notice, and (2) as to any or all services by UPC after certain
specified time periods following the Offering on 30 days' notice.

TAX ALLOCATION AGREEMENT

The Company, OHI, OTC and UPC are entering into a Tax Allocation Agreement
to provide for (1) the allocation and payment of taxes for periods during
which the Company's subsidiaries and UPC (or its affiliates other than the
Company and its subsidiaries) are included in the same consolidated group for
Federal income tax purposes or the same consolidated, combined, or unitary
returns for state tax purposes, (2) the allocation of responsibility for the
filing of tax returns, (3) the conduct of tax audits and the handling of tax
controversies, (4) UPC's provision of certain tax services and (5) various
related matters. For periods during which the Company's subsidiaries are
included in UPC's consolidated Federal income tax returns or state
consolidated, combined, or unitary tax returns (which periods are expected to
end upon the closing of the Offering), the Company will be

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<PAGE>

required to pay to or entitled to receive from UPC its allocable portion of
the consolidated Federal income and state tax liability, benefit or credits.
The Company will be responsible for foreign and separate return state and
local tax liabilities for itself and for its subsidiaries for all periods.

PENSION PLAN AGREEMENT

The Company and UPC are entering into a Pension Plan Agreement to provide
for the separation of the assets of the Company's Basic Plan from a master
trust established by UPC. Under the Pension Plan Agreement, the Company is
required to establish a separate trust for the Basic Plan, and UPC is required
to cause the trustee of the master trust to transfer the Basic Plan's
allocable portion of the master trust's assets to the new trust.

COMPUTER AND INFORMATION TECHNOLOGY AGREEMENTS

The Company and UPC are entering into Computer and Information Technology
Agreements with respect to the following services: Development Staff, Resource
Sharing Applications, Data Center Processing, Telecommunications and
Miscellaneous Services. Pursuant to these Agreements, UPC or its affiliates
will continue to provide, or cause third party contractors to provide, to the
Company (i) development staff and programming services in connection with the
Company's mainframe and distributed applications, key development projects,
Year 2000 compliance and other ad hoc projects identified by the Company, (ii)
resource sharing applications in connection with certain research and
development projects, and the Company's human resources/payroll and general
accounting systems, (iii) data center processing services on a dedicated
mainframe in support of the Company's business applications, including
applications services, decision support services and disaster recovery
support, (iv) voice and data networking services and related support services,
including 800 and long distance telephone services and frame relay services
for all Company service centers, and (v) other miscellaneous services
including EDI, AutoFax, video conferencing, AVR and electronic mail
environments. The foregoing services will be provided for initial terms at
rates negotiated by the parties, and such terms may be extended at the option
of the Company.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The Company is authorized to issue 150,000,000 shares of Common Stock, par
value $0.01 per share, and 25,000,000 shares of Preferred Stock, par value
$10.00 per share.

COMMON STOCK

Prior to the Offering, there were 100 shares of Common Stock issued and
outstanding. Immediately following the Offering there will be 33,600,000
shares of Common Stock outstanding (assuming no exercise of the Underwriters'
over-allotment option and no exercise of outstanding options).

The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the shareholders. Holders of
Common Stock do not have cumulative voting rights in the election of directors
and do not have preemptive rights. Holders of the Common Stock are entitled to
receive dividends, when and if declared by the Board, out of funds legally
available therefor. Subject to any preferential liquidation rights of holders
of Preferred Stock, upon any liquidation, dissolution or winding-up of the
Company, the holders of Common Stock are entitled to share ratably in all
assets of the Company remaining after payments in full of all liabilities of
the Company.

All of the Common Stock offered hereby, when issued, will be fully paid and
nonassessable.

PREFERRED STOCK

The Board of Directors is empowered by the Company's Articles of
Incorporation to designate and issue from time to time one or more series of
Preferred Stock without shareholder approval. The Board of Directors may fix
and determine the preferences, limitations and relative rights of each series
of Preferred Stock so issued. Because the Board of Directors has the power to
establish the preferences and rights of each series of Preferred Stock, it may
afford the holders of any series of Preferred Stock preferences and rights,
voting or otherwise, senior to the rights of holders of Common Stock. The
issuance of Preferred Stock could have the effect of delaying or preventing a
change in control of the Company. The Board of Directors has no present plans
to issue any shares of Preferred Stock.

VIRGINIA CORPORATE LAW, ARTICLES OF INCORPORATION AND BYLAW PROVISIONS

VIRGINIA STOCK CORPORATION ACT

Shareholders' rights and related matters are governed by the Virginia Stock
Corporation Act ("VSCA"), the Company's Articles of Incorporation and its
Bylaws. Certain provisions of the VSCA, Articles of Incorporation and Bylaws
of the Company, which are summarized below, may discourage or make more
difficult any attempt by a person or group to obtain control of the Company.
See "Risk Factors--Consequences of Anti-Takeover Provisions."

The VSCA contains certain anti-takeover provisions regarding affiliated
transactions, control share acquisitions and the adoption of shareholder
rights plans. In general, the VSCA's affiliated transactions provisions
prevent a Virginia corporation from engaging in an "affiliated transaction"
(as defined) with an "interested shareholder" (generally defined as a person
owning more than 10% of any class of voting securities of the corporation)
unless approved by a majority of the "disinterested directors" (as defined)
and the holders of at least two-thirds of the outstanding voting stock not
owned by the interested shareholder, subject to certain exceptions.

Under the control share acquisitions provisions of the VSCA, shares acquired
in a "control share acquisition" (defined generally as transactions that
increase the voting strength of the person acquiring such shares above certain
thresholds in director elections) generally have no voting rights unless
granted by a majority of the outstanding voting stock not owned by such
acquiring person. If such voting rights are granted and the

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<PAGE>

acquiring person controls 50% or more of the voting power, all shareholders,
other than the acquiring person, are entitled to receive "fair value" (as
defined) for their shares. If such voting rights are not granted, the
corporation may, if authorized by its articles of incorporation or bylaws,
purchase the acquiring person's shares at their cost to the acquiring person.
As permitted by the VSCA, the Company has included a provision in its Bylaws
that opt the Company out of the control share acquisition statute. The
Company's Bylaws, however, may be amended by the Directors without the
shareholders' approval.

Finally, the shareholder rights plan provisions of the VSCA permit the Board
to adopt a shareholder rights plan that could render a hostile takeover
prohibitively expensive if the Board determines that such a takeover is not in
the best interests of the Company. The existence of the shareholder rights
plan provisions of the VSCA, as well as the affiliated transactions and
control share acquisition provisions, could delay or prevent a change in
control of the Company, impede a merger, consolidation or other business
combination involving the Company or discourage a potential acquirer from
making a tender offer or otherwise attempting to obtain control of the
Company.

ARTICLES OF INCORPORATION AND BYLAWS

The Company's Articles of Incorporation and Bylaws contain certain
provisions that could inhibit or impede acquisition of control of the Company
by means of a tender offer, a proxy contest or otherwise and inhibit attempts
at such transactions. These provisions are expected to discourage certain
types of coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control of the Company to negotiate first
with the Board. The Company believes that these provisions increase the
likelihood that proposals initially will be on more attractive terms than
would be the case in their absence and increase the likelihood of
negotiations, which might outweigh the potential disadvantages of discouraging
such proposals because, among other things, negotiation of such proposals
might result in improvement of their terms. The description set forth below is
a summary only, and is qualified in its entirety by reference to the Company's
Articles of Incorporation and Bylaws, which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.

Number of Directors; Removal; Filling Vacancies. The Articles of
Incorporation provide that the number of directors shall be between three and
seven and that, subject to any rights of holders of Preferred Stock to elect
additional directors under specified circumstances, the number of directors
within this range will be fixed in accordance with the Bylaws. The Bylaws
provide that, following the Offering, the number of directors shall initially
be four. It is the intention of the Company that the number of directors shall
be increased to six within 90 days of the Offering. In addition, the Bylaws
provide that any vacancies will be filled by the affirmative vote of a
majority of the remaining directors, though less than a quorum of the Board.
Thus, any vacancies created by an increase in the total number of directors
may be filled by a majority of the Board. Accordingly, the Board could
temporarily prevent any shareholder from enlarging the Board and then filling
the new directorship with such shareholder's own nominees. Moreover, the
Articles of Incorporation provide that directors may be removed only for
cause. A shareholder therefore could be prevented from replacing the Company's
directors with the shareholder's own nominees if the shareholder did not have
cause to remove such directors.

Staggered Terms for Directors. The Company's Articles of Incorporation
require that the Board of Directors be divided into three classes of
directors. At each annual meeting of shareholders, the class of directors to
be elected at such meeting will be elected for a three-year term, and the
directors in the other two classes will continue in office. Because holders of
Common Stock have no right to cumulative voting for the election of directors,
at each annual meeting of shareholders, the holders of the shares of Common
Stock with a majority of the voting power of the Common Stock will be able to
elect all of the successors of the class of directors whose term expires at
the meeting. In effect, the classified Board of Directors may make more
difficult or delay a change in control of the Company or the removal of
incumbent management.

Preferred Stock. The Articles of Incorporation authorize the Board to
establish one or more series of Preferred Stock and to determine, with respect
to any series of Preferred Stock, the preferences, rights and other terms of
such series. See "--Preferred Stock." The Company believes that the ability of
the Board to issue one or more series of Preferred Stock will provide the
Company with increased flexibility in structuring possible future financings
and acquisitions and in meeting other corporate needs. The authorized shares
of Preferred

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<PAGE>

Stock, as well as shares of Common Stock, will be available for issuance
without further action by the Company's shareholders, unless such action is
required by applicable law or the rules of any stock exchange or automated
quotation system on which the Company's securities may be listed or traded.
Although the Board has no present intention to do so, it could, in the future,
issue a series of Preferred Stock that, due to its terms, could impede a
merger, tender offer or other transaction that some, or a majority, of the
Company's shareholders might believe to be in their best interests, or in
which shareholders might receive a premium over then-prevailing market prices
for their shares of Common Stock.

OTHER MATTERS

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol "OVNT."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have issued and
outstanding 33,600,000 shares of Common Stock (36,960,000 if the Underwriters
exercise their over-allotment option in full), all of which will be fully
tradeable without restriction or further registration under the Securities
Act, except for any of such shares held by "affiliates" (as defined under Rule
405 of the Securities Act) of the Company. The senior officers of the Company
have agreed to certain restrictions on the transfer of such shares for a
period of 180 days after the date of this Prospectus without the prior written
consent of Morgan Stanley & Co. Incorporated. See "Underwriters." Officers and
directors who are "affiliates" of the Company must comply with certain volume
limits and manner of sale restrictions applicable under Rule 144 under the
Securities Act to any resales of shares of Common Stock they may make, unless
such resales are registered under the Securities Act. In general, in order to
comply with Rule 144, (i) the amount sold by an affiliate within any 3-month
period cannot exceed the greater of (x) 1% of the total number of shares of
Common Stock outstanding and (y) the average weekly trading volume in the
Common Stock for the most recent four weeks and (ii) such shares must be sold
in "brokers transactions" or transactions with a "market maker" (each as
defined) not involving the solicitation of a purchaser's order.

BANK CREDIT FACILITY

GENERAL

On June 18, 1998, the Company and Crestar entered into a commitment letter
(the "Commitment Letter") to provide for a $200 million revolving credit
facility (the "Bank Credit Facility"). Crestar will act as agent for the Bank
Credit Facility. The Company expects to utilize the Bank Credit Facility
primarily for (i) funding $105 million of the consideration for the
Acquisition, (ii) periodic borrowings for working capital and capital
expenditures and (iii) to support trade letters of credit.

Interest on the Bank Credit Facility will be payable at rates per annum
equal to, at the Company's option, (a) the London Interbank Offered Rate, plus
a spread that adjusts based on the Company's ratio of consolidated
indebtedness to consolidated cash flow, or (b) the higher of (i) Crestar's
prime rate and (ii) the overnight federal funds rate plus an agreed spread.
The Company will also pay certain fees in connection with the establishment
and maintenance of the Bank Credit Facility.

The Bank Credit Facility will terminate on the fifth anniversary of the
closing of the Bank Credit Facility and all accrued interest and outstanding
principal will be due on such date.

CONDITIONS TO FUNDING

The Company's borrowing under the Bank Credit Facility will be conditioned
on, among other things, the completion of the Offering.

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<PAGE>

COVENANTS

The Bank Credit Facility will be evidenced by a credit agreement, notes and
other loan documents (the "Loan Documents") which will contain covenants that,
among other things, will restrict the ability of the Company to (i) enter into
future loans, advances and investments, (ii) consolidate, merge or sell all or
any substantial part of its assets, and (iii) change its business.

The Loan Documents also will contain certain financial covenants with
respect to (i) the Company's ratio of consolidated indebtedness (as defined in
the Commitment Letter) to consolidated cash flow (as defined in the Commitment
Letter), (ii) the Company's ratio of consolidated earnings before income
taxes, interest charges, depreciation and amortization, plus the amount of all
rental expenses under operating leases, to interest charges and rental
expenses under operating leases, and (iii) the Company's consolidated tangible
net worth.

EVENTS OF DEFAULT

The Loan Documents will provide that upon certain "Events of Default", all
amounts outstanding thereunder will become immediately due and payable. The
following events, among others, will constitute Events of Default: (i) failure
to pay when due any interest, principal or fees payable under the Bank Credit
Facility, (ii) failure to observe or perform any covenant in the Loan
Documents, (iii) a breach of the Company's representations or warranties, (iv)
certain cross defaults to other debt of the Company, and (v) any change of
control of the Company.

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<PAGE>

UNDERWRITERS

Under the terms and subject to the conditions contained in an Underwriting
Agreement, dated the date hereof (the "Underwriting Agreement"), the U.S.
Underwriters named below for whom Morgan Stanley & Co. Incorporated, Credit
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting
as U.S. Representatives, and the International Underwriters named below for
whom Morgan Stanley & Co. International Limited, Credit Suisse First Boston
(Europe) Limited, Donaldson, Lufkin & Jenrette International and Merrill Lynch
International are acting as International Representatives, have severally
agreed to purchase, and the Company has agreed to sell to them, severally, the
respective number of shares of Common Stock set forth opposite the names of
such Underwriters below:

<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated............................
Credit Suisse First Boston Corporation.......................
Donaldson, Lufkin & Jenrette Securities Corporation..........
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
----------
Subtotal................................................... 26,880,000
----------
International Underwriters:
Morgan Stanley & Co. International Limited...................
Credit Suisse First Boston (Europe) Limited..................
Donaldson, Lufkin & Jenrette International...................
Merrill Lynch International..................................
----------
Subtotal................................................... 6,720,000
----------
Total................................................ 33,600,000
==========
</TABLE>

The U.S. Underwriters and the International Underwriters, and the U.S.
Representatives and the International Representatives, are collectively
referred to as the "Underwriters" and the "Representatives," respectively. The
Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are obligated to
take and pay for all of the shares of Common Stock offered hereby (other than
those covered by the U.S. Underwriters' over-allotment option described below)
if any such shares are taken.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented and agreed that, with certain exceptions: (i)
it is not purchasing any Shares (as defined herein) for the account of anyone
other than a United States or Canadian Person (as defined herein) and (ii) it
has not offered or sold, and will not offer or sell, directly or indirectly,
any Shares or distribute any prospectus relating to the Shares outside the
United States or Canada or to anyone other than a United States or Canadian
Person. Pursuant to the Agreement between U.S. and International Underwriters,
each International Underwriter has represented and agreed that, with certain
exceptions: (i) it is not purchasing any Shares for the account of any United
States or Canadian Person and (ii) it has not offered or sold, and will not
offer or sell, directly or indirectly, any Shares or distribute any prospectus
relating to the Shares in the United States or Canada or to any United States
or Canadian Person. With respect to any Underwriter that is a U.S. Underwriter
and an International Underwriter, the foregoing representations and agreements
(i) made by it in its capacity as a U.S. Underwriter apply only to it in its
capacity as a U.S. Underwriter and (ii) made by it in its capacity as an
International Underwriter apply only to it in its capacity as an International
Underwriter. The foregoing limitations do not apply to stabilization
transactions or to certain other transactions specified in the Agreement
between U.S. and International Underwriters. As used herein, "United States or
Canadian Person" means any national or resident of the United

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<PAGE>

States or Canada, or any corporation, pension, profit-sharing or other trust
or other entity organized under the laws of the United States or Canada or of
any political subdivision thereof (other than a branch located outside the
United States and Canada of any United States or Canadian Person), and
includes any United States or Canadian branch of a person who is otherwise not
a United States or Canadian Person. All shares of Common Stock to be purchased
by the Underwriters under the Underwriting Agreement are referred to herein as
the "Shares."

Pursuant to the Agreement between U.S. and International Underwriters, sales
may be made between the U.S. Underwriters and International Underwriters of
any number of Shares as may be mutually agreed. The per share price of any
Shares so sold shall be the public offering price set forth on the cover page
hereof, in United States dollars, less an amount not greater than the per
share amount of the concession to dealers set forth below.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented that it has not offered or sold, and has
agreed not to offer or sell, any Shares, directly or indirectly, in any
province or territory of Canada or to, or for the benefit of, any resident of
any province or territory of Canada in contravention of the securities laws
thereof and has represented that any offer or sale of Shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus
in the province or territory of Canada in which such offer or sale is made.
Each U.S. Underwriter has further agreed to send to any dealer who purchases
from it any of the Shares a notice stating in substance that, by purchasing
such Shares, such dealer represents and agrees that it has not offered or
sold, and will not offer or sell, directly or indirectly, any of such Shares
in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of the
securities laws thereof and that any offer or sale of Shares in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus
in the province or territory of Canada in which such offer or sale is made,
and that such dealer will deliver to any other dealer to whom it sells any of
such Shares a notice containing substantially the same statement as is
contained in this sentence.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has represented and agreed that (i) it has not
offered or sold and, prior to the date six months after the closing date for
the sale of the Shares to the International Underwriters, will not offer or
sell, any Shares to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied and will comply
with all applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Shares in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by it
in connection with the offering of the Shares to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document
may otherwise lawfully be issued or passed on.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has further represented that it has not offered or
sold, and has agreed not to offer or sell, directly or indirectly, in Japan or
to or for the account of any resident thereof, any of the Shares acquired in
connection with the distribution contemplated hereby, except for offers or
sales to Japanese International Underwriters or dealers and except pursuant to
any exemption from the registration requirements of the Securities and
Exchange Law and otherwise in compliance with applicable provisions of
Japanese law. Each International Underwriter has further agreed to send to any
dealer who purchases from it any of the Shares a notice stating in substance
that, by purchasing such Shares, such dealer represents and agrees that it has
not offered or sold, and will not offer or sell, any of such Shares, directly
or indirectly, in Japan or to or for the account of any resident thereof
except for offers or sales to Japanese International Underwriters or dealers
and except pursuant to any exemption from the registration requirements of the
Securities and Exchange Law and otherwise in compliance with applicable
provisions of Japanese law, and that such dealer will send to any other dealer
to whom it sells any of such Shares a notice containing substantially the same
statement as is contained in this sentence.

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<PAGE>

The Underwriters initially propose to offer part of the shares of Common
Stock directly to the public at the public offering price set forth on the
cover page hereof and part to certain dealers at a price that represents a
concession not in excess of $ a share under the public offering price. Any
Underwriter may allow, and such dealers may reallow, a concession not in
excess of $ a share to other Underwriters or to certain dealers. After the
initial offering of the shares of Common Stock, the offering price and other
selling terms may from time to time be varied by the Representatives.

The Company has granted to the U.S. Underwriters an option, exercisable for
30 days from the date of this Prospectus, to purchase up to an aggregate of
3,360,000 additional shares of Common Stock at the public offering price set
forth on the cover page hereof, less underwriting discounts and commissions.
The U.S. Underwriters may exercise such option solely for the purpose of
covering overallotments, if any, made in connection with the offering of the
shares of Common Stock offered hereby. To the extent such option is exercised,
each U.S. Underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional shares of Common
Stock as the number set forth next to such U.S. Underwriter's name in the
preceding table bears to the total number of shares of Common Stock set forth
next to the names of all U.S. Underwriters in the preceding table.

The Underwriters have informed the Company that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
Common Stock offered by them.

The Common Stock has been approved for quotation, subject to official notice
of issuance, on the Nasdaq National Market under the symbol "OVNT."

Each of the Company and the directors, executive officers and certain other
senior officers of the Company has agreed that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of this Prospectus,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The
restrictions described in this paragraph do not apply to (x) the sale of
Shares to the Underwriters, (y) the issuance by the Company of shares of
Common Stock upon the exercise of an option or a warrant or the conversion of
a security outstanding on the date of this Prospectus of which the
Underwriters have been advised in writing or (z) transactions by any person
other than the Company relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the offering of
the Shares.

In order to facilitate the offering of the Common Stock, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Common Stock. Specifically, the Underwriters may overallot in
connection with the offering, creating a short position in the Common Stock
for their own account. In addition, to cover overallotments or to stabilize
the price of the Common Stock, the Underwriters may bid for, and purchase,
shares of Common Stock in the open market. Finally, the underwriting syndicate
may reclaim selling concessions allowed to an Underwriter or a dealer for
distributing the Common Stock in the offering, if the syndicate repurchases
previously distributed Common Stock in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. The Underwriters have
reserved the right to reclaim selling concessions in order to encourage
Underwriters and dealers to distribute the Common Stock for investment, rather
than short-term profit taking. Increasing the proportion of the offering held
for investment may reduce the supply of Common Stock available for short-term
trading. Any of these activities may stabilize or maintain the market price of
the Common Stock above independent market levels. The Underwriters are not
required to engage in these activities, and may end any of these activities at
any time.

From time to time, the Representatives have provided, and continue to
provide, investment banking services to UPC.

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<PAGE>

The Company, UPC and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.

PRICING OF THE OFFERING

Prior to the Offering, there has been no public market for the Common Stock.
The initial public offering price will be determined by negotiations among
UPC, the Company and the U.S. Representatives. Among the factors to be
considered in determining the initial public offering price will be the future
prospects of the Company and its industry in general, sales, earnings and
certain other financial operating information of the Company in recent
periods, and the price-earnings ratios, price-sales ratios, market prices of
securities and certain financial and operating information of companies
engaged in activities similar to those of the Company. The estimated initial
public offering price range set forth on the cover page of this preliminary
Prospectus is subject to change as a result of market conditions and other
factors.

CERTAIN FEDERAL TAX CONSEQUENCES

The following is a general discussion of the material United States Federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a "Non-United States Holder" and of the issuance of the Common Stock
by the Company. A "Non-United States Holder" is a person or entity that, for
United States Federal income tax purposes, is (i) a non-resident alien
individual, (ii) a foreign corporation or partnership, (iii) an estate, other
than an estate the income of which is includible in gross income for United
States Federal income tax purposes regardless of its source, or (iv) a trust
that is not subject either to the primary supervision of a court within the
United States or the control of a United States fiduciary.

This discussion is based on the Code and administrative interpretations as
of the date hereof, all of which may be changed either retroactively or
prospectively. This discussion does not address all aspects of United States
Federal income and estate taxation that may be relevant to Non-United States
Holders in light of their particular circumstances and does not address any
tax consequences arising under the laws of any state, local or foreign taxing
jurisdiction.

Prospective holders should consult their own tax advisors with respect to
the United States Federal, state, local and non-United States income and other
tax consequences to them of holding and disposing of Common Stock.

CONSEQUENCES TO NON-UNITED STATES HOLDERS OF COMMON STOCK

DIVIDENDS

The Company does not expect to pay dividends for the foreseeable future.
Subject to the discussion below, any dividends paid to a Non-United States
Holder of Common Stock generally will be subject to withholding tax at a 30%
rate or such lower rate as may be specified by an applicable income tax treaty
unless the dividend is effectively connected with the conduct of a trade or
business within the United States, or, if an income tax treaty applies, is
attributable to a United States permanent establishment of the Non-United
States Holder and, in either case, the Non-United States Holder provides the
payor with proper documentation (Form 4224), in which event the dividend will
be taxable under the rules discussed below. In order to claim the benefit of
an applicable tax treaty rate, a Non-United States Holder may have to file
with the Company or its dividend paying agent an exemption or reduced treaty
rate certificate or letter in accordance with the terms of such treaty.

Under current United States Treasury regulations, for purposes of
determining whether tax is to be withheld at a 30% rate or at a reduced rate
as specified by an income tax treaty, the Company ordinarily will presume that
dividends paid to a stockholder at an address in a foreign country are paid to
a resident of such country absent knowledge that such presumption is not
warranted. Recently promulgated regulations effective after December 31, 1999,
eliminate such current law presumption that dividends paid to an address in a
foreign country are paid to a resident of that country and impose certain
certification and documentation requirements on Non-United States Holders
claiming the benefit of a reduced withholding rate with respect to dividends
under a tax treaty.

60
<PAGE>

In the case of dividends that are effectively connected with the Non-United
States Holder's conduct of a trade or business within the United States or, if
an income tax treaty applies, are attributable to a United States permanent
establishment of the Non-United States Holder, the Non-United States Holder
will generally be subject to regular United States income tax in the same
manner as if the Non-United States Holder were a United States resident. A
Non-United States corporation receiving effectively connected dividends also
may be subject to an additional "branch profits tax" which is imposed, under
certain circumstances, at a rate of 30% (or such lower rate as may be
specified by an applicable treaty) of the Non-United States corporation's
"effectively connected earnings and profits," subject to certain adjustments.

GAIN ON DISPOSITION OF COMMON STOCK

A Non-United States Holder will not be subject to United States Federal
income tax with respect to gain realized on a sale or other disposition of
Common Stock unless (i) the gain is effectively connected with a trade or
business of such Non-United States Holder in the United States, (ii) in the
case of certain Non-United States Holders who are non-resident alien
individuals and hold the Common Stock as a capital asset, such individuals are
present in the United States for 183 or more days in the taxable year of the
disposition and either (a) such individuals have a "tax home" (as defined for
United States Federal income tax purposes) in the United States, or (b) the
gain is attributable to an office or other fixed place of business maintained
by such individuals in the United States, (iii) the Non-United States Holder
is subject to tax, pursuant to the provisions of United States tax law
applicable to certain United States expatriates, or (iv) the Company is or has
been a "United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code at any time within the shorter of the five-year
period preceding such disposition or such Non-United States holding period.

The Company believes that it is not currently, and will not become, a United
States real property holding corporation. If the Company were to become a
United States real property holding corporation, any gain recognized on a sale
or other disposition of Common Stock by a Non-United States Holder would be
subject to United States Federal income tax if (i) the Common Stock were not
regularly traded on an established securities market for tax purposes or (ii)
the Common Stock were regularly traded on an established Securities market for
tax purposes and the Non-United States Holder held, directly or indirectly, at
any time within the five-year period preceding such disposition, more than 5%
of the outstanding Common Stock.

FEDERAL ESTATE TAXES

An individual Non-United States Holder who is treated as the owner of or has
made certain lifetime transfers of an interest in the Common Stock will be
required to include the value thereof in his gross estate for United States
Federal estate tax purposes, and may be subject to United States Federal
estate tax unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

Under current United States Treasury regulations, the Company must report
annually to the Internal Revenue Service (the "IRS") and to each Non-United
States Holder the amount of dividends paid to such holder and any tax withheld
with respect to such dividends. These information reporting requirements may
apply regardless of whether withholding is required. Copies of the information
returns reporting such dividends and withholding may also be made available to
the tax authorities in the country in which the Non-United States Holder is a
resident under the provisions of an applicable income tax treaty or agreement.

United States backup withholding (which generally is withholding tax imposed
at the rate of 31% on certain payments to persons that fail to furnish certain
information under the United States information reporting requirements)
generally will not apply to (i) dividends paid to Non-United States Holders
that are subject to the 30% withholding discussed above (or that are not so
subject because a tax treaty applies that reduces or eliminates such 30%
withholding) or (ii) under current law, dividends paid to a Non-United States
Holder at an address outside of the United States.

61
<PAGE>

Backup withholding and information reporting generally will apply to
dividends paid to addresses inside the United States on shares of Common Stock
owned by beneficial owners that are not "exempt recipients" and that fail to
provide certain identifying information in the manner required.

The payment of the proceeds of the disposition of Common Stock to or through
the U.S. office of a broker is subject to information reporting unless the
disposing holder certifies under penalty of perjury its Non-United States
status or otherwise establishes an exemption. Generally, United States
information reporting and backup withholding will not apply to a payment of
disposition proceeds if the payment is made outside the United States through
a Non-United States office of a Non-United States broker. However, information
reporting requirements (but not backup withholding) will apply to a payment of
disposition proceeds outside the United States if (a) the payment is made
through an office outside the United States of a broker that is either (i) a
United States person, (ii) a foreign person which derives 50% or more of its
gross income for certain periods from the conduct of a trade or business in
the United States, or (iii) a "controlled foreign corporation" for United
States Federal income tax purposes, and (b) the broker fails to maintain
documentary evidence that the holder is a Non-United States Holder and that
certain conditions are met, or that the holder otherwise is entitled to an
exemption.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained, provided the required information is furnished to the IRS.

On October 6, 1997, the IRS issued final regulations relating to
withholding, backup withholding and information reporting that unify current
certification procedures and forms and clarify reliance standards. Such
regulations generally will be effective with respect to payments made after
December 31, 1999.

LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of Common
Stock offered hereby will be passed upon for the Company by Hunton & Williams,
Richmond, Virginia. Certain legal matters in connection with the Offering will
be passed upon for the Underwriters by Cravath, Swaine & Moore, New York, New
York.

EXPERTS

The consolidated financial statements as of December 31, 1996 and 1997 and
for each of the three years in the period ended December 31, 1997, included in
this Prospectus have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and have been so
included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement on Form S-1 (together with
all amendments thereto, the "Registration Statement") under the Securities Act
of 1933, as amended, with the Securities and Exchange Commission (the
"Commission") with respect to the shares of Common Stock offered hereby. This
Prospectus, which is a part of the Registration Statement, does not contain
all the information set forth in the Registration Statement and the exhibits
and schedules thereto, certain portions of which have been omitted pursuant to
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock, reference is hereby made to the
Registration Statement, and exhibits and schedules contained therein, which
may be inspected without charge at the principal office of the Commission at
Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549, and copies of all or
any part of which may be obtained from the Commission upon payment of the
prescribed fees. The summaries contained in this Prospectus concerning
information included in the Registration Statement, or in any exhibit or
schedule thereto, are qualified in their entirety by reference to such
information, exhibit or schedule.

62
<PAGE>

After consummation of this Offering, the Company will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and, in accordance therewith, will file reports, proxy statements and other
information with the Commission. The reports, proxy statements and other
information filed with the Commission, as well as the Registration Statement,
may be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material also can be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a World Wide Web site on the Internet at http://www.sec.gov that
contains reports, proxy statements and other information regarding registrants
that file electronically with the Commission.

The Company intends to furnish its shareholders with an annual report
containing consolidated financial statements certified by its independent
auditors.

63
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS:
Overnite Holding, Inc.
Audited Consolidated Financial Statements
Independent Auditors' Report............................................ F-2
Statement of Consolidated Income for the years ended December 31, 1995,
1996 and 1997.......................................................... F-3
Statement of Consolidated Financial Position as of December 31, 1996 and
1997................................................................... F-4
Statement of Consolidated Cash Flows for the years ended December 31,
1995, 1996 and 1997.................................................... F-5
Statement of Stockholder's Equity for the years ended December 31, 1995,
1996 and 1997.......................................................... F-6
Notes to the Consolidated Financial Statements.......................... F-7
Unaudited Interim Consolidated Financial Statements
Unaudited Interim Statement of Consolidated Income for the six months
ended June 30, 1997 and 1998........................................... F-16
Unaudited Interim Statement of Consolidated Financial Position as of
December 31, 1997 and
June 30, 1998.......................................................... F-17
Unaudited Interim Statement of Consolidated Cash Flows for the six
months ended June 30, 1997 and 1998.................................... F-18
Unaudited Interim Statement of Stockholder's Equity for the six months
ended June 30, 1997 and 1998........................................... F-19
Notes to Unaudited Interim Consolidated Financial Statements............ F-20
Unaudited Pro Forma Consolidated Financial Statements of Overnite
Corporation
Unaudited Pro Forma Statement of Consolidated Income for the year ended
December 31, 1997 and the six months ended June 30, 1998............... F-22
Unaudited Pro Forma Statement of Consolidated Financial Position as of
June 30, 1998.......................................................... F-23
Notes to Unaudited Pro Forma Consolidated Financial Statements.......... F-24
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

Union Pacific Corporation
Dallas, Texas

Overnite Holding, Inc.
Wilmington, Delaware

We have audited the accompanying statements of consolidated financial
position of Overnite Holding, Inc. and subsidiary companies (the "Company") as
of December 31, 1997 and 1996, and the related statements of consolidated
income, stockholder's equity and consolidated cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December
31, 1997 and 1996, and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP

Richmond, Virginia
May 8, 1998

F-2
<PAGE>

OVERNITE HOLDING, INC.

STATEMENT OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1995 1996 1997
---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating Revenue............................ $ 975,963 $ 960,998 $ 945,968
Operating Expenses
Salaries, wages and benefits............... 625,573 622,569 572,381
Supplies and expenses...................... 125,936 130,565 109,922
Operating taxes............................ 49,085 46,027 41,091
Claims and insurance....................... 30,359 33,921 30,291
Rents and purchased transportation......... 83,274 91,380 75,632
Communications and utilities............... 19,057 19,488 17,497
Depreciation............................... 44,932 45,418 42,516
Amortization of goodwill................... 19,500 19,500 19,500
Other expenses............................. 17,407 19,596 26,826
---------- ---------- ---------
Total operating expenses................. 1,015,123 1,028,464 935,656
---------- ---------- ---------
Operating income (loss)...................... (39,160) (67,466) 10,312
Intercompany interest income (note 10)....... 9,399 9,268 11,378
Interest expense............................. 1,822 1,532 1,774
Other income (expenses)...................... (325) 3,116 2
---------- ---------- ---------
Income (loss) before income taxes............ (31,908) (56,614) 19,918
Income taxes (benefits) (note 4)............. (8,163) (13,723) 15,609
---------- ---------- ---------
Net income (loss)............................ $ (23,745) $ (42,891) $ 4,309
========== ========== =========
</TABLE>

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.

F-3
<PAGE>

OVERNITE HOLDING, INC.

STATEMENT OF CONSOLIDATED FINANCIAL POSITION

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------
1996 1997
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets
Cash..................................................... $ 3,842 $ 2,278
Accounts receivable (less allowance of $14,510 and
$12,625)................................................ 93,454 122,427
Advances to affiliate (note 10).......................... 128,784 159,345
Current deferred tax asset (note 4)...................... 24,593 26,551
Inventories.............................................. 8,003 8,246
Prepaid expenses......................................... 45,444 11,557
---------- ----------
Total current assets................................... 304,120 330,404
---------- ----------
Properties
Cost (note 3)............................................ 736,253 750,486
Accumulated depreciation (note 3)........................ (271,849) (297,496)
---------- ----------
Net properties......................................... 464,404 452,990
---------- ----------
Other
Goodwill--net............................................ 580,913 561,413
Deferred tax asset (note 4).............................. 35,059 32,029
Other assets............................................. 5,484 3,403
---------- ----------
Total assets........................................... $1,389,980 $1,380,239
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable......................................... $ 21,803 $ 24,516
Bank overdrafts.......................................... 3,032 9,510
Accrued wages and deductions............................. 13,085 15,364
Accrued vacation, benefits and employee savings plan..... 36,854 41,621
Accrued casualty costs................................... 22,763 22,100
Interest payable......................................... 1,289 1,744
Income and other taxes................................... 8,111 9,446
Lease due within one year (note 5)....................... 2,965 3,139
Current retiree benefit obligation (note 7).............. 38,765 20,318
Other current liabilities................................ 5,792 12,043
---------- ----------
Total current liabilities.............................. 154,459 159,801
Other liabilities
Lease due after one year (note 5)........................ 8,363 5,224
Accrued casualty costs................................... 34,410 31,663
Retiree benefit obligation (note 7)...................... 71,056 73,550
---------- ----------
Total other liabilities................................ 113,829 110,437
---------- ----------
Stockholder's equity
Common stockholder's equity.............................. 1,121,692 1,110,001
---------- ----------
Total liabilities and stockholder's equity............. $1,389,980 $1,380,239
========== ==========
</TABLE>

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.

F-4
<PAGE>

OVERNITE HOLDING, INC.

STATEMENT OF CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1995 1996 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash from operations
Net income (loss)............................... $(23,745) $(42,891) $ 4,309
Non-cash items included in net income (loss):
Depreciation.................................. 44,932 45,418 42,516
Amortization of goodwill...................... 19,500 19,500 19,500
Deferred income taxes (note 4)................ 14,784 1,811 883
Other--net.................................... (2,091) (8,945) 2,630
Accounts receivable............................ 8,726 20,195 (28,973)
Inventories.................................... (1,083) 275 (243)
Other current assets and prepaid expenses...... (14,313) (21,792) 31,929
Accounts payable............................... 6,537 (10,009) 2,713
Leases due within one year..................... 160 171 174
Other current liabilities...................... (8,904) 38,869 (4,023)
-------- -------- --------
Net cash from operations..................... 44,503 42,602 71,415
-------- -------- --------
Investing activities
Capital investments............................. (49,411) (10,479) (40,411)
Proceeds from sales of assets................... 1,882 10,034 10,480
-------- -------- --------
Net cash used in investing activities........ (47,529) (445) (29,931)
-------- -------- --------
Financing activities
Dividends paid.................................. (16,000) (16,000) (16,000)
Repayment of debt............................... (2,634) (2,795) (2,965)
Advances from affiliate (note 10)............... 138,593 90,439 181,163
Advances to affiliate (note 10)................. (110,152) (117,383) (211,724)
Bank overdrafts................................. (2,052) (4,348) 6,478
-------- -------- --------
Net cash (used in) provided by financing
activities.................................. 7,755 (50,087) (43,048)
-------- -------- --------
Net change in cash............................... 4,729 (7,930) (1,564)
Cash at beginning of year........................ 7,043 11,772 3,842
-------- -------- --------
Cash at end of year.............................. $ 11,772 $ 3,842 $ 2,278
======== ======== ========
Supplemental cash flow information
Income taxes paid (received).................... $ (8,748) $(34,700) $ 14,300
Interest paid................................... 1,822 1,532 1,342
</TABLE>

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.

F-5
<PAGE>

OVERNITE HOLDING, INC.

STATEMENT OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1995 1996 1997
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Common stock, $10 par value (authorized
100 shares)
Balance at beginning of year............ $ 1 $ 1 $ 1
Balance at end of year.................. 1 1 1
Paid-in surplus
Balance at beginning of year............ 1,242,186 1,242,186 1,242,186
Balance at end of year.................. 1,242,186 1,242,186 1,242,186
Retained earnings
Balance at beginning of year............ (21,859) (61,604) (120,495)
Net income (loss)....................... (23,745) (42,891) 4,309
---------- ---------- ----------
Total................................. (45,604) (104,495) (116,186)
Cash dividends declared................. (16,000) (16,000) (16,000)
---------- ---------- ----------
Balance at end of year.................. (61,604) (120,495) (132,186)
---------- ---------- ----------
Total common stockholder's equity..... $1,180,583 $1,121,692 $1,110,001
========== ========== ==========
</TABLE>

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.

F-6
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of Overnite
Holding, Inc. (the "Company") and its wholly-owned subsidiaries. Overnite
Transportation Company ("OTC") is the major operating subsidiary. All
significant intercompany accounts and transactions have been eliminated.
The Company is a wholly-owned subsidiary of Union Pacific Corporation
("UPC").

The Company is a major interstate trucking company specializing in less-
than-truckload shipments. The Company serves all 50 states and portions of
Canada, Mexico, Puerto Rico and Guam through 164 service centers located
throughout the United States. The Company transports a variety of products,
including chemicals, fabricated metal products, textiles, machinery,
electronics and paper products. The following describes major accounting
policies used in the preparation of the accompanying financial statements
that are not covered in other notes.

Property and Depreciation

Properties are carried at cost. Provisions for depreciation are computed
on the straight-line method based on estimated service lives of depreciable
property. Service lives range from 10 to 40 years for buildings and
improvements, 6 to 15 years for revenue equipment, and 5 to 10 years for
other equipment. Gains and losses on dispositions of revenue and other
equipment are reported with depreciation expense while gains and losses for
all other dispositions (principally real estate) are reported in other
income.

Long-Lived and Intangible Assets

Goodwill represents the excess paid by UPC in its 1986 acquisition of the
Company over the fair value of net assets acquired, net of amortization
over 40 years. The Company assesses the recoverability of long-lived and
intangible assets through a review of undiscounted cash flows and fair
values of those assets per the Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." Accumulated goodwill amortization was
$234.3 million and $253.8 million at December 31, 1996 and 1997,
respectively.

Revenue Recognition

Transportation revenues are recognized on a percentage-of-completion
basis, while delivery costs are recognized as incurred.

Hedging Transactions

The Company periodically hedges fuel purchases. Unrealized gains and
losses from swaps, futures and forward contracts are deferred and
recognized as a component of fuel expense as the fuel is consumed.

Use of Estimates

The consolidated financial statements of the Company include estimates
and assumptions regarding certain assets, liabilities, revenues and
expenses and the disclosure of certain contingent assets and liabilities.
Actual future results may differ from such estimates.

Earnings Per Share

Earnings per share have been omitted from the consolidated statement of
income as the Company was a wholly-owned subsidiary of UPC for all periods
presented.

F-7
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Bank Overdrafts

The Company participates in a cash management program with UPC which
provides daily replenishment of the major bank account for check-clearing
requirements. Due to these arrangements negative cash balances representing
outstanding checks exist at the end of all periods presented. These amounts
are reflected as current liabilities in the Statement of Consolidated
Financial Position.

Claims Liabilities

The Company is self-insured for workers compensation, health insurance,
property damage, liability claims and cargo losses up to certain limits.
Provisions have been made for the estimated losses in these areas based on
historical estimates, actuarial analysis and other methods. The actual
costs may vary from estimates based upon trends of losses for filed claims
and claims yet to be filed.

2. FINANCIAL INSTRUMENTS

Risk Management

The Company periodically uses derivative financial instruments to manage
a portion of its risk of fluctuating fuel prices. The Company does not use
derivatives for trading purposes. Where the Company has fixed fuel prices
through the use of swaps, futures or forward contracts, the Company has
mitigated the downside risk of adverse price movements; however, it has
also limited future gains from favorable movements. The Company has not
been required to provide, nor has it received, any collateral relating to
its hedging activity. The fair market values of the Company's derivative
financial instrument positions at December 31, 1997 and 1996 described
below were developed based on the present value of expected future cash
flows. Unrealized gains and losses from swaps, futures and forward
contracts are deferred and recognized as a component of fuel expenses as
the fuel is consumed.

At December 31, 1997, the Company had hedged 34% of its forecasted 1998
fuel consumption. At December 31, 1996, the Company had not hedged any of
its forecasted 1997 fuel consumption. At year-end 1997, the Company had
outstanding swap agreements of $10 million, with gross and net liability
positions of $1 million. Fuel hedging had no significant effect on fuel
costs for the Company for the periods presented.

Fair Value of Financial Instruments

The carrying value of the Company's financial instruments approximates
fair value.

3. PROPERTIES

Major property accounts are as follows:

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------
1996 1997
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Land.................................................... $ 69,125 $ 68,305
Buildings and improvements.............................. 186,373 190,128
Equipment............................................... 386,589 394,462
Other transportation property........................... 94,166 97,591
--------- ---------
Total................................................. $ 736,253 $ 750,486
========= =========
</TABLE>

F-8
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Accumulated depreciation accounts are as follows:

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------
1996 1997
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Buildings and improvements.............................. $ 62,065 $ 68,451
Equipment............................................... 153,396 164,393
Other transportation property........................... 56,388 64,652
--------- ---------
Total................................................. $ 271,849 $ 297,496
========= =========
</TABLE>

4. INCOME TAXES

The Company is included in the consolidated Federal income tax return of
UPC. The consolidated Federal income tax liability of UPC is allocated
among all corporate entities in the consolidated group on the basis of each
entity's contributions to the consolidated Federal income tax liability.
Full benefit of tax losses and credits made available and utilized in UPC's
consolidated Federal income tax returns is allocated to the individual
companies generating such items. Components of income tax expense (benefit)
are as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------
1995 1996 1997
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................. $ (19,848) $ (15,531) $ 15,007
State................................... (3,099) (3) (281)
---------- ---------- ---------
Total current......................... (22,947) (15,534) 14,726
Deferred:
Federal................................. 14,599 3,473 (1,772)
State................................... 185 (1,662) 2,655
---------- ---------- ---------
Total deferred........................ 14,784 1,811 883
---------- ---------- ---------
Total................................. $ (8,163) $ (13,723) $ 15,609
========== ========== =========
</TABLE>

Deferred tax liabilities (assets) comprise the following:

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------
1996 1997
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Current deferred tax asset............................ $ (24,593) $ (26,551)
--------- ---------
Excess tax over book depreciation..................... 78,782 76,947
State taxes--net...................................... 1,880 3,772
Tax amortizable intangible assets..................... (111,632) (105,948)
Excess accrued liabilities............................ (39,089) (41,800)
Other tax reserves.................................... 35,000 35,000
--------- ---------
Net long-term deferred tax asset...................... (35,059) (32,029)
--------- ---------
Net deferred tax asset................................ $ (59,652) $ (58,580)
========= =========
</TABLE>

F-9
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

A reconciliation between statutory and effective tax rates of continuing
operations is as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDING DECEMBER 31,
----------------------------------
1995 1996 1997
----------- ----------- ----------
<S> <C> <C> <C>
Statutory tax rate......................... (35.0%) (35.0%) 35.0%
State taxes--net........................... (5.9) (1.9) 7.8
Amortization of goodwill................... 21.4 12.1 34.3
Other...................................... (6.1) 0.6 1.3
----------- ----------- ---------
Effective tax rate......................... (25.6%) (24.2%) 78.4%
=========== =========== =========
</TABLE>

All material IRS deficiencies prior to 1983 have been settled. UPC has
reached a partial settlement with the Appeals Office of the IRS for 1983
through 1985; the remaining issues will be resolved through refund claims
filed for those years. UPC is negotiating with the Appeals Office
concerning 1986 through 1989 tax years. The IRS is examining UPC's returns
for 1990 through 1994. UPC and the Company believe that the Company has
adequately provided for Federal and State income taxes.

5. DEBT

Total debt is summarized below:

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------
1996 1997
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Capitalized lease obligations............................ $ 11,328 $ 8,363
Less current portion..................................... 2,965 3,139
--------- --------
Total long-term lease.................................. $ 8,363 $ 5,224
========= ========
</TABLE>

Lease maturities for 1998, 1999 and 2000 are $3.1 million, $2.6 million
and $2.6 million, respectively. There are no debt maturities scheduled
beyond 2000.

6. LEASES

The Company leases certain revenue equipment and other property. Future
minimum lease payments for capital and operating leases with initial or
remaining non-cancelable lease terms in excess of one year as of December
31, 1997 are as follows:

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
(IN THOUSANDS)
<S> <C> <C>
1998...................................................... $ 7,347 $ 3,291
1999...................................................... 5,051 3,832
2000...................................................... 2,805 4,074
2001...................................................... 2,136 --
2002...................................................... 1,744 --
Later years............................................... 3,621 --
------- -------
Total minimum payments.................................... $22,704 $11,197
Amount representing interest.............................. (2,834)
-------
Present value of minimum lease payments................... $ 8,363
=======
</TABLE>

Rent expenses for operating leases with terms exceeding one year were
$5.2 million, $6.4 million and $7.5 million in 1995, 1996 and 1997,
respectively. Contingent rentals and sub-rentals are not significant.

F-10
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Assets under capital lease are $19.0 million net of $5.8 million
accumulated depreciation. Lease amortization is included in depreciation
expense.

7. RETIREMENT PLANS

Pension and Postretirement Benefits

In February 1998, the Financial Accounting Standards Board ("FASB")
issued Statement No. 132 "Employers' Disclosures about Pensions and Other
Postretirement Benefits" ("SFAS 132"). SFAS 132 standardizes the disclosure
requirements for pension and other postretirement benefits to the extent
practicable, requires additional information on changes in the benefit
obligations and fair values of plan assets that will facilitate financial
analysis, and eliminates certain disclosures that are no longer as useful
as they were in the past. This statement requires restatement of
disclosures for earlier periods. Although not required until the end of
1998, earlier application is encouraged. The Company has elected to adopt
the provisions of SFAS 132.

The Company sponsors a noncontributory pension plan covering
substantially all employees and a postretirement health and life insurance
plan. Qualified and non-qualified pension benefits are based on years of
service and the highest average annual compensation during any five
consecutive calendar years of employment. The qualified pension plans are
funded based on the Projected Unit Credit actuarial funding method and are
funded at not less than the minimum funding standards set forth in the
Employee Retirement Income Security Act of 1974, as amended. Other
postretirement benefits are provided on a cost-sharing basis for qualifying
employees. In November 1997, the pension plan was amended to allow for full
early retirement benefits upon attaining 30 years of service and 55 years
of age. These amendments, effective January 1, 1998, are reflected in the
pension liability for the year ended December 31, 1997.

The following tables represent activity in the Company's pension and
other postretirement benefit accounts:

<TABLE>
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS
---------- ----------------
1996 1997 1996 1997
CHANGE IN PROJECTED BENEFITS OBLIGATION: ---- ---- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Projected benefits obligation at beginning of
year........................................ $345 $389 $ 48 $ 49
Service cost................................. 19 18 4 3
Interest cost................................ 27 30 3 3
Plan amendments.............................. -- 39 -- --
Actuarial loss (gain)........................ 11 26 8 7
Benefits paid................................ (13) (13) (1) (1)
---- ---- ------- -------
Projected benefits obligation at end of
year........................................ $389 $489 $ 62 $ 61
==== ==== ======= =======
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS
---------- ----------------
1996 1997 1996 1997
CHANGE IN PLAN ASSETS: ---- ---- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Fair value of plan assets at beginning of
year........................................ $352 $390 $ -- $ --
Actual return on plan assets................. 50 66 -- --
Employer contribution........................ 1 35 1 1
Benefits paid................................ (13) (13) (1) (1)
---- ---- ------- -------
Fair value of plan assets at end of year..... $390 $478 $ -- $ --
==== ==== ======= =======
</TABLE>

F-11
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS
---------- ----------------
1996 1997 1996 1997
FUNDED STATUS: ---- ---- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Funded status................................. $ 1 $(11) $ (62) $ (61)
Unrecognized net actuarial loss (gain)........ (35) (47) 9 3
Unrecognized prior service cost (gain)........ 1 40 (14) (10)
Unrecognized initial transition obligation.... (10) (8) -- --
---- ---- ------- -------
Net amount recognized......................... $(43) $(26) $ (67) $ (68)
==== ==== ======= =======
</TABLE>

At December 31, 1997, the pension plan is in compliance with all funding
requirements established by the Internal Revenue Service.

At December 31, 1996 and 1997, the fair value of the pension plan's
assets exceeded the accumulated benefit obligation by $53 million and $56
million, respectively.

<TABLE>
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS
---------- ----------------
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 1996 1997 1996 1997
31: ---- ---- ------- -------
<S> <C> <C> <C> <C>
Discount rate............................... 7.50% 7.00% 7.50% 7.00%
Expected return on plan assets.............. 8.00% 8.00% -- --
Rate of compensation increase............... 4.50% 4.00% -- --
</TABLE>

<TABLE>
<CAPTION>
OTHER
POSTRETIREMENT
PENSION BENEFITS
---------------- ----------------
1995 1996 1997 1995 1996 1997
COMPONENTS OF NET PERIODIC BENEFIT COST: ---- ---- ---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Service cost-benefits earned during the
period................................. $ 16 $ 19 $ 18 $ 3 $ 4 $ 3
Interest on projected benefit
obligation............................. 24 27 30 3 3 4
Expected return on assets............... (22) (26) (29) -- -- --
Net amortization costs.................. (2) (2) (1) (4) (4) (5)
---- ---- ---- --- --- ---
Charge to operations.................... $ 16 $ 18 $ 18 $ 2 $ 3 $ 2
==== ==== ==== === === ===
</TABLE>

As of year-end 1996 and 1997, approximately 37% and 32%, respectively, of
the funded plan's assets were held in fixed-income and short-term
securities, with the remainder in equity securities.

Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. The health care cost trend rate
is assumed to decrease gradually from 9% for 1998 to 4.5% for 2005 and all
future years. A one percentage point change in assumed health care cost
trend rates would have the following effects:

<TABLE>
<CAPTION>
1% POINT INCREASE 1% POINT DECREASE
----------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Change in service and interest cost
components........................... $ 88 $ 86
Change in postretirement benefits
obligation........................... $598 $587
</TABLE>

F-12
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Tax Reduction Investment Plans

The Company maintains two defined contribution plans (the "401(k) Plans")
under which employees are eligible to defer a portion of their compensation
(as defined in the 401(k) Plans) ranging from 1% to 10% as provided in
Section 401(k) of the Internal Revenue Code of 1986, as amended. The
Company currently matches 50% of deferrals up to 6% of employee
compensation. Based on the Company's financial performance, these matching
contributions could increase to 75% or 100% of deferrals up to 6% of
employee compensation. The Company contributed $8.4 million and $7.5
million in matching contributions to the 401(k) Plans in 1996 and 1997,
respectively.

8. STOCK OPTION PLANS

The FASB issued Statement No. 123, "Accounting for Stock-Based
Compensation ("SFAS 123"), which was effective for 1996 financial
statements. SFAS 123 requires either recognition of compensation expense
for stock options and other stock-based compensation or supplemental
disclosure of the impact such expense recognition would have had on the
Company's results of operations had the Company recognized such expense.
The Company has elected the supplemental disclosure option.

Certain of the Company's officers and key employees participate in UPC's
stock option, retention and restricted stock plans. As of December 31,
1997, there were 1,111,436 UPC stock options held by employees of the
Company, of which 600,011 UPC stock options were then exercisable. Options
under the plans have an option price equal to 100% of the fair market value
of UPC common stock at the date of grant and are exercisable for a period
of 10 years from the grant date. Options become exercisable no earlier than
one year after grant. In addition, eligible employees of the Company have
been issued restricted stock awards representing 233,602 shares of UPC
common stock as of December 31, 1997. Pro forma net income (loss) (as
defined in SFAS No. 123) for 1995, 1996 and 1997, including compensation
expense computed pursuant to SFAS No. 123 (as though the value of options
were charged to income over the vesting period) would not have been
materially different from reported net income (loss).

9. COMMITMENTS AND CONTINGENCIES

There are various claims and lawsuits pending against the Company. The
Company is also subject to Federal, state and local environmental laws and
regulations, and is currently participating in the investigation and
remediation of a number of sites. Where the remediation costs can be
reasonably determined, and where such remediation is probable, the Company
has recorded a liability. At December 31, 1997, the Company had accrued $1
million for estimated future environmental costs. The accrual is based on
management's best estimate of the undiscounted future remediation costs
associated with all the identified sites, and excludes any recoveries that
may arise from other parties. The accrual is founded on management's
experience in dealing with similar environmental matters at other sites.

In 1995, the National Labor Relations Board ("NLRB") General Counsel
issued a series of complaints before the NLRB contending that the Company
had engaged in unfair labor practices that affected the outcome of employee
elections regarding union representation. The Teamsters disputed the
outcome of the union elections at 18 service centers and sought an order
that the Company bargain with the union at these locations despite the
employees' vote against union representation. The Teamsters Union also
sought implementation of a wage increase which had been awarded to non-
union employees in March 1995 but withheld from employees at four other
union-represented service centers pending negotiations with the union. In
July 1995, the Company and the NLRB General Counsel settled certain of
these claims, by requiring the Company to post notices promising not to
engage in certain alleged unfair labor practices. Further, at the four
service centers where employee elections in favor of union representation
had been certified by the NLRB, the Company agreed to implement the wage
increase which had been implemented

F-13
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

previously at non-union service centers. The settlement explicitly did not
admit the commission of any unfair labor practices. It did not resolve,
however, whether the Company could be ordered to bargain with the union at
a number of service centers where the union had lost elections. On April
10, 1998, an administrative law judge at the NLRB found in favor of the
Teamsters Union and the NLRB General Counsel with respect to certain of the
remaining allegations, issuing a recommended order (the "ALJ Order") that,
among other things, would require the Company to bargain with the Teamsters
Union upon request at four additional service centers: Louisville,
Kentucky; Lawrenceville, Georgia; Norfolk, Virginia; and Bridgeton,
Missouri. Consolidated into the cases decided by the ALJ was a complaint
claiming that a wage and benefit increase withheld from Teamster-
represented employees in 1996, because the union would not negotiate the
Company's productivity improvement flexibilities on which the increase was
contingent, should have been granted to those employees. The ALJ Order
sustained that claim and recommended that the Company be ordered to make
payments that would amount to approximately $2 million of back pay. The
Company plans to appeal this decision to the full NLRB, and, if necessary,
to a U.S. Court of Appeals. Complaints for bargaining orders at 11
remaining service centers are still before administrative law judges.
Employees at the four service centers that are subject to the ALJ Order,
together with those at the 11 other service centers where bargaining orders
are being sought (only nine of which are operating), account for
approximately 8% of the Company's nationwide work force (approximately 9%
of non-management employees).

It is not possible at this time for the Company to fully determine the
effect of all unasserted claims on its consolidated financial condition,
results of operations or liquidity; however, to the extent possible, where
unasserted claims can be estimated and where such claims are considered
probable, the Company has recorded a liability. If all or a substantial
portion of the labor law litigation were decided adversely to the Company,
it could have a materially adverse effect on the Company's operating
results. The Company does not expect that any other known lawsuits, claims,
environmental costs, commitments or guarantees will have a material adverse
effect on its consolidated financial condition or operating results.

The Company has been notified by the U.S. Environmental Protection Agency
that it is a potentially responsible person under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or other
federal or state environmental statutes at 11 hazardous waste sites. Under
CERCLA the Company may be jointly and severally liable for all site
remediation and expenses. After investigating the Company's involvement in
waste disposal or waste generation at such sites, the Company either has
agreed to de minimis settlements or believes that its obligations with
respect to such sites will involve immaterial monetary liability, although
there can be no assurances in this regard.

10. RELATED PARTY TRANSACTIONS

Advances to and from affiliated companies have historically accrued
interest at a rate which represents UPC's cost of borrowing. The interest
rate on the advances was 7.5% in 1996 and 1997. The Company had a net
receivable from UPC at December 31, 1996 and 1997, principally the result
of cash advanced to UPC in excess of that needed to meet the capital and
operating expense requirements of the Company.

Services performed by UPC on behalf of the Company include cash
management, internal audit, certain tax services, information services
technical support and employee benefits administration. Costs for services
provided have been reflected in the Company's financial statements.

Charges incurred by UPC which are directly attributable to the Company
were charged to the Company as incurred. Other costs were charged to the
Company based on usage or percentage of assets. Amounts charged were
approximately $20 million, $18 million, and $18 million for 1995, 1996, and
1997, respectively. The Company and UPC believe such allocations are
reasonable. Had the Company operated as an unaffiliated entity during each
of the three years in the period ended December 31, 1997, it would have
incurred incremental expenses of approximately $6.5 million per year.

F-14
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

11. ACCOUNTING PRONOUNCEMENTS

In June 1997, FASB issued Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income," which is effective
January 1, 1998. The Company has adopted the provisions of SFAS No. 130
effective January 1, 1998. The components of comprehensive income include,
among other things, changes in the market value of futures contracts which
qualify for hedge accounting and any net loss recognized as an additional
pension liability but not yet recognized as net periodic pension cost.

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," that is effective in
1998. Management is currently analyzing the effects of this statement and
does not believe the effects will be material.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits." The Company has elected
to adopt the provisions of SFAS No. 132 in its 1997 financial statements.

F-15
<PAGE>

OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------
1997 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Operating revenue........................................... $451,329 $519,316
Operating expenses
Salaries, wages and benefits.............................. 280,245 313,040
Supplies and expenses..................................... 52,094 57,303
Operating taxes........................................... 21,059 22,010
Claims and insurance...................................... 14,422 15,836
Rents and purchased transportation........................ 32,354 42,472
Communications and utilities.............................. 9,144 9,054
Depreciation.............................................. 21,107 22,821
Amortization of goodwill.................................. 9,750 9,750
Other expenses............................................ 11,125 10,884
-------- --------
Total operating expenses................................ 451,300 503,170
-------- --------
Operating income............................................ 29 16,146
Intercompany interest income................................ 5,069 6,067
Interest expense............................................ 667 727
Other income................................................ (331) 463
-------- --------
Income before income taxes.................................. 4,100 21,949
Income taxes................................................ 5,570 11,866
-------- --------
Net income (loss)........................................... $ (1,470) $ 10,083
======== ========
</TABLE>

See notes to the unaudited interim consolidated financial statements.

F-16
<PAGE>

OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF CONSOLIDATED FINANCIAL POSITION

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, JUNE 30,
------------ ----------
1997 1998
------------ ----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets
Cash.................................................... $ 2,278 $ 4,161
Accounts receivable (less allowance of $12,625 and
$14,164)............................................... 122,427 137,544
Advances to affiliate................................... 159,345 151,427
Current deferred tax asset.............................. 26,551 30,169
Inventories............................................. 8,246 7,199
Prepaid expenses........................................ 11,557 14,381
---------- ----------
Total current assets.................................. 330,404 344,881
---------- ----------
Properties
Cost.................................................... 750,486 769,656
Accumulated depreciation................................ (297,496) (315,670)
---------- ----------
Properties--net....................................... 452,990 453,986
---------- ----------
Other
Goodwill--net........................................... 561,413 551,663
Deferred tax asset...................................... 32,029 28,914
Other................................................... 3,403 3,709
---------- ----------
Total assets.......................................... $1,380,239 $1,383,153
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable........................................ $ 24,516 $ 19,526
Bank overdrafts......................................... 9,510 9,018
Accrued wages and deductions............................ 15,364 19,554
Accrued vacation, benefits and employee savings plan.... 41,621 45,401
Accrued casualty costs.................................. 22,100 23,491
Interest payable........................................ 1,744 1,980
Income and other taxes.................................. 9,446 4,046
Lease due within one year............................... 3,139 2,916
Retiree benefit obligation.............................. 20,318 10,318
Other current liabilities............................... 12,043 13,576
---------- ----------
Total current liabilities............................. 159,801 149,826
---------- ----------
Other liabilities
Lease due after one year................................ 5,224 3,898
Accrued casualty costs.................................. 31,663 31,700
Retiree benefit obligation.............................. 73,550 85,645
---------- ----------
Total other liabilities............................... 110,437 121,243
---------- ----------
Stockholder's equity
Common stockholder's equity............................. 1,110,001 1,112,084
---------- ----------
Total liabilities and stockholder's equity............ $1,380,239 $1,383,153
========== ==========
</TABLE>

See notes to the unaudited interim consolidated financial statements.

F-17
<PAGE>

OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------
1997 1998
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Cash from operations
Net income (loss).......................................... $ (1,470) $ 10,083
Non-cash items included in net income (loss):
Depreciation............................................. 21,107 22,821
Amortization of goodwill................................. 9,750 9,750
Deferred income taxes.................................... 3,339 (505)
Changes in assets and liabilities........................ (13,586) (33,198)
Other--net............................................... 6,734 18,083
-------- --------
Net cash provided by operations............................ 25,874 27,034
-------- --------
Investing Activities
Capital investments...................................... (9,444) (26,101)
Proceeds from sales of assets............................ 7,679 3,073
-------- --------
Net cash used in investing activities...................... (1,765) (23,028)
-------- --------
Financing Activities
Dividends paid........................................... (8,000) (8,000)
Repayment of debt........................................ (1,461) (1,549)
Advances from affiliate.................................. 76,966 83,442
Advances to affiliate.................................... (95,904) (75,524)
Bank overdrafts.......................................... 1,922 (492)
-------- --------
Net cash used in financing activities...................... (26,477) (2,123)
-------- --------
Net change in cash......................................... (2,368) 1,883
Cash at beginning of period................................ 3,842 2,278
-------- --------
Cash at end of period...................................... $ 1,474 $ 4,161
======== ========
Supplemental cash flow information
Income taxes paid........................................ $ 5,313 $ 21,680
Interest paid............................................ 404 355
</TABLE>

See notes to the unaudited interim consolidated financial statements.

F-18
<PAGE>

OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
----------------------
1997 1998
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Common stock, $10 par value (authorized 100
shares)
Balance at beginning of period............. $ 1 $ 1
Balance at end of period................... 1 1
Paid-in surplus
Balance at beginning of period............. 1,242,186 1,242,186
Balance at end of period................... 1,242,186 1,242,186
Retained earnings
Balance at beginning of period............. (120,495) (132,186)
Net income (loss)............................. (1,470) 10,083
---------- ----------
Total.................................... (121,965) (122,103)
Cash dividends declared.................... (8,000) (8,000)
---------- ----------
Balance at end of period................... (129,965) (130,103)
---------- ----------
Total common stockholder's equity........ $1,112,222 $1,112,084
========== ==========
</TABLE>

See notes to the unaudited interim consolidated financial statements.

F-19
<PAGE>

OVERNITE HOLDING, INC.

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. RESPONSIBILITIES FOR FINANCIAL STATEMENTS

The interim consolidated financial statements are unaudited and reflect all
adjustments (consisting only of normal and recurring adjustments) that are, in
the opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The interim
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto contained herein.
The results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results for the entire year ending December 31,
1998.

2. FINANCIAL INSTRUMENTS

The Company periodically uses derivative financial instruments to manage a
portion of its risk to fluctuating fuel prices. The Company does not use
derivatives for trading purposes. Where the Company has fixed fuel prices
through the use of swaps, futures, or forward contracts, the Company has
mitigated the downside risk of adverse price movements; however, it has also
limited future gains from favorable movements. The Company has not been
required to provide, nor has it received, any collateral relating to its
hedging activity.

The fair market values of the Company's derivative financial instrument
positions at June 30, 1998 and 1997 were developed based on the present value
of future cash flows.

At June 30, 1998, the Company had hedged 42% of its remaining 1998 diesel
fuel consumption at $0.51 per gallon on a Gulf Coast basis. The Company had
outstanding swap agreements of $5.8 million, with gross and net liability
positions of $1.3 million. Fuel hedging increased fuel expense in the first
six months of 1998 by $1.6 million and had no impact on the first six months
of 1997.

3. COMMITMENTS AND CONTINGENCIES

It is not possible at this time for the Company to fully determine the
effect of all unasserted claims on its consolidated financial condition,
results of operations or liquidity; however, to the extent possible, where
unasserted claims can be estimated and where such claims are considered
probable, the Company has recorded a liability. If all or a substantial
portion of the labor law litigation were decided adversely to the Company, it
could have a materially adverse effect on the Company's operating results. The
Company does not expect that any other known lawsuits, claims, environmental
costs, commitments or guarantees will have a material adverse effect on its
consolidated financial condition or operating results.

See note 9 to the Consolidated Financial Statements.

4. ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement No. 130, "Reporting Comprehensive Income" (FAS 130), that is
effective for all periods in 1998, including interim periods. The Company has
adopted the provisions of FAS 130 effective January 1, 1998. The components of
comprehensive income include, among other things, changes in the market value
of futures contracts which qualify for hedge accounting and a net loss
recognized as an additional pension liability but not yet recognized as net
periodic pension cost. There is no impact from adopting FAS 130 for the six
months ended June 30, 1998.

In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133) that will be effective in 2000.
Management has not yet determined the effect, if any, FAS 133 will have on the
Company's financial statements but expects the effect to be minimal.

F-20
<PAGE>

OVERNITE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR AND AS OF THE SIX MONTHS ENDED JUNE 30, 1998

The unaudited pro forma consolidated financial statements are derived from
the historical consolidated financial statements of Overnite Holding, Inc. and
give effect to (x) the initial public offering (the "Offering") of the common
stock of Overnite Corporation, and (y) the use of the proceeds therefrom to
acquire (the "Acquisition") Overnite Transportation Company ("OTC") through
the purchase of all the outstanding capital stock of its direct parent
company, Overnite Holding, Inc., from Union Pacific Corporation ("UPC") as if
such transactions had been consummated at the beginning of the respective
periods presented, in the case of the pro forma statements of income, and at
the date presented in the case of the pro forma statement of financial
condition. As described in the accompanying notes, (i) the Acquisition will
result in a new basis of accounting which will result in the assets and
liabilities of the Company being recorded at fair value, the historical
goodwill associated with UPC's acquisition of OTC being eliminated and new
goodwill being recorded to reflect the excess of the purchase price over the
fair value of the assets acquired, (ii) immediately prior to the Acquisition,
the Company will borrow $105 million under a bank credit facility (the "Bank
Credit Facility") to pay a portion of the purchase price, (iii) the Company
will forgive $148 million of intercompany debt owed to the Company by UPC and
(iv) following the Acquisition, the Company will incur ongoing operating
expenses and interest expenses in excess of the amounts reflected in the
historical financial statements and will no longer receive interest income
from UPC. If the Underwriters exercise their over-allotment option, the net
proceeds to the Company therefrom will be used to reduce the indebtedness
under the Bank Credit Facility.

The pro forma information does not purport to reflect the results of
operations that actually would have resulted had the Offering and the
Acquisition occurred as of the dates indicated or to project the results of
operations for any future period. The unaudited pro forma consolidated
financial statements should be read in conjunction with the accompanying notes
and the historical consolidated financial statements, including the notes
thereto, of Overnite Holding, Inc. included elsewhere in this Prospectus. The
pro forma adjustments for certain assets and liabilities are based on an
allocation of preliminary estimates of fair value by management. Final amounts
are not expected to materially differ from those presented herein.

F-21
<PAGE>

OVERNITE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE SIX MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
---------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Operating revenue................. $945,968 $945,968
Operating expenses
Salaries, wages and benefits.... 572,381 $ 1,161 (a) 573,542
Supplies and expenses........... 109,922 109,922
Operating taxes................. 41,091 41,091
Claims and insurance............ 30,291 30,291
Rents and purchased
transportation................. 75,632 75,632
Communications and utilities.... 17,497 17,497
Depreciation.................... 42,516 42,516
Amortization of goodwill........ 19,500 (19,500)(b)
4,351 (c) 4,351
Other expenses.................. 26,826 5,089 (a) 31,915
--------
-------- --------
Total operating expenses...... 935,656 (8,899) 926,757
--------
-------- --------
Operating income.................. 10,312 8,899 19,211
Intercompany interest income...... 11,378 (11,378)(d)
Interest expense.................. 1,774 6,825 (e)(i) 8,849
250 (a)
Other income...................... 2 2
--------
-------- --------
Income before income taxes........ 19,918 (9,554) 10,364
Income taxes...................... 15,609 (10,750)(f) 4,859
--------
-------- --------
Net income........................ $ 4,309 $ 1,196 (i) $ 5,505
======== ======== ========
Pro forma income per share
Basic........................... $ .16
Diluted......................... $ .16
Pro forma weighted average number
of shares
Basic........................... 33,600,000
Common stock equivalents........ 82,680
Diluted......................... 33,682,680
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1998
-------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
Operating revenue................. $519,316 $519,316
Operating expenses
Salaries, wages and benefits.... 313,040 $ 581 (a) 313,621
Supplies and expenses........... 57,303 57,303
Operating taxes................. 22,010 22,010
Claims and insurance............ 15,836 15,836
Rents and purchased
transportation................. 42,472 42,472
Communications and utilities.... 9,054 9,054
Depreciation.................... 22,821 22,821
Amortization of goodwill........ 9,750 (9,750)(b)
2,176 (c) 2,176
Other expenses.................. 10,884 2,544 (a) 13,428
--------
-------- --------
Total operating expenses...... 503,170 (4,449) 498,721
--------
-------- --------
Operating income.................. 16,146 4,449 20,595
Intercompany interest income...... 6,067 (6,067)(d)
Interest expense.................. 727 3,413 (e)(i) 4,265
125 (a)
Other income...................... 463 463
--------
-------- --------
Income before income taxes........ 21,949 (5,156) 16,793
Income taxes...................... 11,866 (5,515)(f) 6,351
--------
-------- --------
Net income........................ $ 10,083 $ 359 (i) $ 10,442
======== ======== ========
Pro forma income per share
Basic........................... $ .31
Diluted......................... $ .31
Pro forma weighted average number
of shares
Basic........................... 33,600,000
Common stock equivalents........ 82,680
Diluted......................... 33,682,680
</TABLE>

See the notes to the unaudited pro forma consolidated financial statements.

F-22
<PAGE>

OVERNITE CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION

<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
---------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and temporary investments........ $ 4,161 $ 4,161
Accounts receivable................... 137,544 137,544
Advances from affiliate............... 151,427 $(148,068)(d) 3,359
Current deferred tax asset............ 30,169 (30,169)(c)(g) --
Inventories........................... 7,199 7,199
Prepaid expenses...................... 14,381 14,381
---------- --------- --------
Total current assets................. 344,881 (178,237) 166,644
---------- --------- --------
Properties
Cost.................................. 769,656 (290,670)(h) 478,986
Accumulated depreciation.............. (315,670) 315,670 (h) --
---------- --------- --------
453,986 25,000 478,986
---------- --------- --------
Other
Goodwill--net......................... 551,663 (551,663)(b) --
174,025 (c) 174,025
Deferred tax asset.................... 28,914 (28,914)(c)(g) --
Other................................. 3,709 3,709
---------- --------- --------
Total assets......................... $1,383,153 $(559,789) $823,364
========== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable...................... $ 19,526 $ 19,526
Bank overdrafts....................... 9,018 9,018
Accrued wages and deductions.......... 19,554 19,554
Accrued vacation, benefits and em-
ployee savings plan.................. 45,401 45,401
Accrued casualty costs................ 23,491 23,491
Interest payable...................... 1,980 1,980
Income and other taxes................ 4,046 4,046
Debt due within one year.............. 2,916 2,916
Current retiree benefit obligations... 10,318 10,318
Other current liabilities............. 13,576 13,576
---------- --------
Total current liabilities............ 149,826 149,826
---------- --------
Other liabilities
Debt due after one year............... 3,898 $ 105,000(e)(i) 108,898
Other tax reserves.................... 35,000 (c)(g) 35,000
Accrued casualty costs................ 31,700 31,700
Retiree benefit obligation............ 85,645 85,645
---------- --------- --------
Total other liabilities.............. 121,243 140,000 261,243
---------- --------- --------
Stockholders' equity
Stockholders' equity.................. 1,112,084 (148,068)(d)
(59,083)(c)(g)
(35,000)(c)(g)
(551,663)(c)
25,000 (c)
(105,000)(c)(e) 412,295
174,025 (c)
---------- --------- --------
Total liabilities and stockholders'
equity.............................. $1,383,153 $(559,789) $823,364
========== ========= ========
</TABLE>

See the notes to unaudited pro forma consolidated financial statements.

F-23
<PAGE>

OVERNITE CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

(a) The adjustments reflect management's estimate of additional administrative
and third-party costs that the Company will incur as a result of becoming
a stand-alone public company. The costs include certain administrative
costs for services currently performed for the Company by UPC such as cash
management, internal audit and information technology, and incremental
costs the Company will incur, including SEC compliance, corporate
secretary, shareholder relations, and outside director costs. The Company
estimates these costs will increase expenses by $6.5 million per year.

(b) The change of ownership in the Company from the Offering will result in a
new basis of accounting, and the assets and liabilities will be recorded
at fair value. The adjustments reflect the elimination of historical
goodwill and its amortization. New goodwill will be recorded equal to the
excess of the purchase price over fair value of the assets acquired.
Amortization of goodwill is recorded over 40 years on a straight-line
basis. The Company regularly assesses the recoverability of its intangible
assets through a review of undiscounted cash flows and fair values of
those assets. See note (h).

(c) New basis of accounting for the Company is estimated to result in the
following goodwill and amortization (in thousands):

<TABLE>
<S> <C>
Existing stockholder's equity................................. $1,112,084
Dividend intercompany balance................................. (148,068)
Remove existing other tax assets.............................. (59,083)
Restore other tax reserves.................................... (35,000)
Remove existing goodwill...................................... (551,663)
Estimated increase in fair value of fixed assets.............. 25,000
Long-term debt................................................ (105,000)
----------
Restated equity............................................. 238,270
Net cash proceeds from IPO.................................... 412,295
----------
New goodwill................................................ 174,025
==========
Annual amortization over 40 years............................. 4,351
----------
</TABLE>

(d) Immediately prior to the Acquisition, the Company will declare a dividend
to UPC of $148 million of its intercompany receivable from UPC. As a
result, the Company will not receive interest income from this receivable
after the Offering. The adjustments reflect (i) such dividend payment, and
(ii) the elimination of intercompany interest.

(e) Prior to the Acquisition, the Company will borrow $105 million under its
bank credit facility (the "Bank Credit Facility") and will pay the
proceeds to UPC as part of the purchase price. As a result the Company
will incur additional annual interest expense of approximately $6.8
million. For purposes of these unaudited pro forma consolidated financial
statements, the Company has assumed an interest rate of 6.5%. The
adjustments reflect the above borrowing and interest expense.

(f) Income taxes have been computed using a 37% tax rate on all pro forma
adjustments except historical goodwill amortization, which is amortized
net of tax. After the Acquisition, goodwill amortization will affect tax
expense because the Company and UPC will make tax elections to adjust
depreciable and amortizable basis to reflect the purchase price.

(g) The adjustments reflect the elimination of all current and long-term net
deferred tax assets associated with historical temporary differences,
based upon the assumption that available tax elections are made that allow
for restatement of assets and liabilities to fair value for tax purposes.
The other tax liability represents provision for Federal and state income
tax and interest for tax issues partially settled or under examination in
prior years. This amount has been reclassified as a long-term liability.

(h) The Company revalued its fixed asset base as part of the new basis of
accounting opening adjustments. The new values are based on management's
preliminary estimates of the fair values of the service centers and

F-24
<PAGE>

OVERNITE HOLDING INCORPORATED

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

other equipment and are subject to change. The adjustments reflect a net
increase in the carrying values of fixed assets as a result of the
elimination of the historical cost and accumulated depreciation and (ii)
the recording of the assets at their respective fair values. See note (b).

(i) If the Underwriters' over-allotment option is exercised, the net proceeds
will be used to reduce indebtedness under the Bank Credit Facility. If
such option is exercised in full, (i) the amount of indebtedness under the
Bank Credit Facility would be reduced by $41.4 million, (ii) the amount of
interest expense associated with the Bank Credit Facility would be reduced
by $2.7 million for 1997 and $1.3 million for the six months ended June
30, 1998 (based on an assumed interest rate of 6.5% per annum) and (iii)
net income would be increased by $1.7 million for 1997 and $.8 million for
the six months ended June 30, 1998.

F-25
<PAGE>

[LOGO OF OVERNITE CORPORATION](R)
<PAGE>

[ALTERNATE COVER PAGE FOR INTERNATIONAL PROSPECTUS]

PROSPECTUS (Subject to Completion)

Issued July 13, 1998
33,600,000 Shares
[LOGO OF OVERNITE CORPORATION](R)

COMMON STOCK
----------

OF THE 33,600,000 SHARES OF COMMON STOCK OFFERED HEREBY, 6,720,000 SHARES ARE
BEING OFFERED INITIALLY OUTSIDE THE UNITED STATES AND CANADA BY THE
INTERNATIONAL UNDERWRITERS AND 26,880,000 SHARES ARE BEING OFFERED INITIALLY
IN THE UNITED STATES AND CANADA BY THE U.S. UNDERWRITERS. SEE
"UNDERWRITERS." ALL OF THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING
SOLD BY THE COMPANY. THE NET PROCEEDS FROM THE OFFERING WILL BE USED BY
THE COMPANY (I) TOGETHER WITH BORROWINGS UNDER A BANK CREDIT FACILITY, TO
PURCHASE INDIRECTLY FROM UNION PACIFIC CORPORATION ("UPC") ALL OF THE
OUTSTANDING SHARES OF COMMON STOCK OF OVERNITE TRANSPORTATION COMPANY
AND (II) TO THE EXTENT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS
EXERCISED, TO REPAY A PORTION OF THE INDEBTEDNESS UNDER SUCH FACILITY.
PRIOR TO THE OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON
STOCK OF THE COMPANY. IT IS CURRENTLY ESTIMATED THAT THE INITIAL
PUBLIC OFFERING PRICE PER SHARE WILL BE BETWEEN $12 AND $14. SEE
"UNDERWRITERS" FOR A DISCUSSION OF THE FACTORS TO BE CONSIDERED IN
DETERMINING THE INITIAL PUBLIC OFFERING PRICE.
----------

THE COMMON STOCK HAS BEEN APPROVED FOR QUOTATION ON THE NASDAQ NATIONAL MARKET
SYSTEM UNDER THE SYMBOL "OVNT."
----------

SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
----------

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.
----------
PRICE $ A SHARE
----------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
-------- -------------- -----------
<S> <C> <C> <C>
Per Share................................... $ $ $
Total (3)................................... $ $ $
</TABLE>
- -----
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.

(2) Before deducting certain expenses payable by the Company estimated at
$1,570,000. Certain other expenses of the Offering will be paid by UPC.

The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriters named herein and subject to approval of certain legal matters
by Cravath, Swaine & Moore, counsel for the Underwriters. It is expected that
delivery of the Shares will be made on or about August , 1998, at the office
of Morgan Stanley & Co. Incorporated, New York, N.Y., against payment therefor
in immediately available funds.
----------

MORGAN STANLEY DEAN WITTER
CREDIT SUISSE FIRST BOSTON
DONALDSON, LUFKIN & JENRETTE
International
MERRILL LYNCH INTERNATIONAL

, 1998
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses* in connection with the Offerings are as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............ $ 189,655
NASD filing fee................................................ 30,500
Nasdaq listing fee............................................. 95,000
Legal fees..................................................... 120,000
Accounting fees................................................ 250,000
Printing, engraving and postage expenses....................... 328,000
Miscellaneous.................................................. 30,000
Bank financing fees (upfront, legal, etc.)..................... 780,000
----------
Total........................................................ $1,823,155
==========
</TABLE>
--------
* UPC has agreed to pay all accounting fees and the Company will pay
all other expenses of the Offering.

The amounts set forth above are estimates except for the SEC registration
fee and the NASD filing fees.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Directors and officers of the Company may be indemnified against
liabilities, fines, penalties and claims imposed upon or asserted against them
as provided in the Virginia Stock Corporation Act and the Company's Articles
of Incorporation. Such indemnification covers all costs and expenses
reasonably incurred by a director or officer. The Board of Directors, by a
majority vote of a quorum of disinterested directors or, under certain
circumstances, independent counsel appointed by the Board of Directors, must
determine that the director or officer seeking indemnification was not guilty
of willful misconduct or a knowing violation of the criminal law. In addition,
the Virginia Stock Corporation Act and the Company's Articles of Incorporation
eliminate the liability of directors and officers in a shareholder or
derivative proceeding under certain circumstances.

If the person involved is not a director or officer of the Company, the
Board of Directors may cause the Company to indemnify to the same extent
allowed for directors and officers of the Company such person who was or is a
party to a proceeding, by reason of the fact that he is or was an employee or
agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.

The Company has in effect a policy insuring the directors and officers of
the Company against losses which they or any of them shall become legally
obligated to pay by reason of any actual or alleged error or misstatement or
misleading statement or act or omission or neglect or breach of duty by the
directors and officers in the discharge of their duties, individually or
collectively, or any matter claimed against them solely by reason of their
being directors or officers, such insurance coverage being limited by the
specific terms and provisions of the insurance policy.

Pursuant to the Underwriting Agreement, in the form filed as an exhibit to
the Registration Statement, any Underwriters under the Underwriting Agreement
will agree to indemnify the registrant's directors and officers and persons
controlling the registrant within the meaning of the Securities Act of 1933
against certain liabilities that might arise out of or are based upon certain
information furnished to the registrant by any such indemnifying party.

II-1
<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The registrant has not sold unregistered securities in the three years prior
to the effective date of this Registration Statement.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement to be entered into among the
Company, Union Pacific and the Underwriters*
3.1 Company's Articles of Incorporation**
3.2 Company's Bylaws**
4.1 Specimen of Common Stock Certificate*
5 Opinion of Hunton & Williams with respect to legality*
10.1 Company's Executive and Management Incentive Plan*
10.2 Company's Stock Compensation Plan*
10.3 Stock Purchase and Indemnification Agreement*
10.4 Services Agreement*
10.5 Tax Allocation Agreement*
10.6 Computer and Information Technology Agreement*
10.7 Pension Plan Agreement*
11 Computation of earnings per share*
21 Subsidiaries of the Registrant**
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Hunton & Williams (included in Exhibit 5)*
24 Power of attorney (included on Page II-4)**
27 Financial Data Schedule**
</TABLE>
- --------
* To be filed by amendment
** Previously filed

(B) Financial statement schedules

ITEM 17. UNDERTAKINGS

(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

(b) The registrant hereby undertakes that:

(i) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; and

II-2
<PAGE>

(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(c) The undersigned registrant undertakes to provide to the underwriters at
the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

II-3
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 2 TO REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF RICHMOND, COMMONWEALTH OF VIRGINIA ON JULY 13, 1998.

Overnite Corporation
(Registrant)

/s/ Patrick D. Hanley
By: __________________________________
PATRICK D. HANLEY
SENIOR VICE PRESIDENT, CHIEF
FINANCIAL OFFICER AND DIRECTOR

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Chairman of the
* Board of July 13, 1998
- ------------------------------------ Directors, Chief
LEO H. SUGGS Executive Officer
and President
(Principal
Executive Officer)

Senior Vice
* President, Chief July 13, 1998
- ------------------------------------ Financial Officer
PATRICK D. HANLEY and Director
(Principal
Financial and
Accounting
Officer)

Senior Vice
* President-- July 13, 1998
- ------------------------------------ Operations and
GORDON S. MACKENZIE Director

Senior Vice
President-- July 13, 1998
- ------------------------------------ Marketing and
JOHN W. FAIN Sales and Director

* By /s/ David M. Carter July 13, 1998
- ------------------------------------
DAVID M. CARTER
ATTORNEY-IN-FACT
</TABLE>

II-4
<PAGE>

EXHIBIT INDEX

<PAGE>

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement No.
333-53169 of Overnite Corporation on Form S-1 of our report dated May 8, 1998,
on the financial statements of Overnite Holding, Inc. appearing in the
Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings "Selected
Historical and Pro Forma Consolidated Financial Data" and "Experts" in such
Prospectus.

/s/ Deloitte & Touche LLP

Richmond, Virginia

July 13, 1998