<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1995.
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
CONSOLIDATED FREIGHTWAYS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4213 94-1444798
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
</TABLE>
3240 HILLVIEW AVENUE
PALO ALTO, CALIFORNIA 94304
(415) 494-2900
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
-------------------
EBERHARD G. H. SCHMOLLER
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
CONSOLIDATED FREIGHTWAYS, INC.
3240 HILLVIEW AVENUE
PALO ALTO, CALIFORNIA 94304
(415) 494-2900
(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)
-------------------
WITH COPIES TO:
Eric S. Haueter William H. Hinman, Jr.
Brown & Wood Shearman & Sterling
555 California Street 555 California Street
San Francisco, California 94104 San Francisco, California 94104
(415) 772-1200 (415) 616-1100
(415) 397-4621 (fax) (415) 616-1199 (fax)
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement is declared effective.
-------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT (1) OFFERING PRICE (1) REGISTRATION FEE
<S> <C> <C> <C> <C>
7.35% Notes due 2005................. $100,000,000 100% $100,000,000 $34,482.76
<FN>
(1) Estimated solely for the purpose of computing the registration fee.
</TABLE>
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K Showing
the Location of Information Required by Part I of Form S-4
<TABLE>
<CAPTION>
ITEM NO. CAPTION LOCATION IN PROSPECTUS
- ---------- --------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
Item 1. Forepart of Registration Statement and Outside
Front Cover Page of
Prospectus........................................ Facing Page of the Registration Statement; Outside
Front Cover Page of the Prospectus
Item 2. Inside Front and Outside Back Cover Pages of
Prospectus........................................ Available Information; Incorporation of Certain
Documents by Reference
Item 3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information............................. Incorporation of Certain Documents by Reference;
Summary; Selected Consolidated Financial Data; The
Exchange Offer
Item 4. Terms of the Transaction........................... Summary; The Exchange Offer; Description of the New
Notes; Description of the Old Notes; Certain United
States Federal Income Tax Considerations
Item 5. Pro Forma Financial Information.................... *
Item 6. Material Contracts with the Company Being
Acquired.......................................... *
Item 7. Additional Information Required for Reoffering by
Persons and Parties Deemed to Be Underwriters..... *
Item 8. Interest of Named Experts and Counsel.............. *
Item 9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.... *
Item 10. Information with Respect to S-3 Registrants........ Available Information; Incorporation of Certain
Documents by Reference
Item 11. Incorporation of Certain Information by
Reference......................................... Incorporation of Certain Documents by Reference
Item 12. Information with Respect to S-2 or S-3
Registrants....................................... *
Item 13. Incorporation of Certain Information by
Reference......................................... *
Item 14. Information with Respect to Registrants Other than
S-2 or S-3 Registrants............................ *
Item 15. Information with Respect to S-3 Companies.......... *
Item 16. Information with Respect to S-2 or S-3 Companies... *
Item 17. Information with Respect to Companies Other than
S-2 or S-3 Companies.............................. *
Item 18. Information if Proxies, Consents or Authorizations
are to be Solicited............................... *
Item 19. Information if Proxies, Consents or Authorizations
are not to be Solicited or in an Exchange Offer... The Exchange Offer
<FN>
- ------------------------
* Omitted because the item is inapplicable or the answer is negative.
</TABLE>
<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.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 27, 1995
PROSPECTUS
- -------------
CONSOLIDATED FREIGHTWAYS, INC.
OFFER TO EXCHANGE ITS
7.35% NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7.35% NOTES DUE 2005
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1995, UNLESS EXTENDED.
-------------------
Consolidated Freightways, Inc., a Delaware corporation (the "Company"),
hereby offers, upon the terms and subject to the conditions set forth in this
Prospectus (as the same may be amended or supplemented from time to time, the
"Prospectus") and in the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange up to $100,000,000 aggregate
principal amount of its 7.35% Notes due 2005 (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like principal amount of its outstanding
7.35% Notes due 2005 (the "Old Notes"), of which $100,000,000 aggregate
principal amount is outstanding.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that (i) the New Notes have been registered under
the Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the Old Notes and will not be entitled to registration
rights, (ii) the New Notes are issuable in minimum denominations of $1,000
compared to minimum denominations of $250,000 for the Old Notes, and (iii) the
New Notes will not provide for any increase in the interest rate thereon. In
that regard, the Old Notes provide that, if the Exchange Offer is not
consummated by October 29, 1995, the interest rate borne by the Old Notes will
increase by 0.25% per annum following October 29, 1995 until the Exchange Offer
is consummated. See "Description of the Old Notes." The New Notes are being
offered for exchange in order to satisfy certain obligations of the Company
under the Registration Rights Agreement dated as of June 1, 1995 (the
"Registration Rights Agreement") between the Company and the Initial Purchasers
(as defined herein) of the Old Notes. The New Notes will be issued under the
same Indenture (as defined herein) as the Old Notes and the New Notes and the
Old Notes will constitute a single series of debt securities under the
Indenture. In the event that the Exchange Offer is consummated, any Old Notes
which remain outstanding after consummation of the Exchange Offer and the New
Notes issued in the Exchange Offer will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding principal amount of Notes (as defined herein) have taken certain
actions or exercised certain rights under the Indenture. The New Notes and the
Old Notes are collectively referred to herein as the "Notes." See "Description
of the New Notes" and "Description of the Old Notes."
Interest on the New Notes is payable semiannually on June 1 and December 1
of each year (each, an "Interest Payment Date"), commencing on the first such
date following the original issuance date of the New Notes. The New Notes will
mature on June 1, 2005. The New Notes are not entitled to any sinking fund and
are not redeemable prior to maturity.
--------------------------
(CONTINUED ON FOLLOWING PAGE)
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The date of this Prospectus is , 1995.
<PAGE>
The Company is making the Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the Securities and Exchange
Commission (the "Commission") as set forth in certain interpretive letters
addressed to third parties in other transactions. However, the Company has not
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Company believes that New Notes issued pursuant to this Exchange
Offer in exchange for Old Notes may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Notes. However, any holder of Old Notes who is an "affiliate" of the
Company or who intends to participate in the Exchange Offer for the purpose of
distributing New Notes, or any broker-dealer who purchased Old Notes from the
Company to resell pursuant to Rule 144A under the Securities Act ("Rule 144A")
or any other available exemption under the Securities Act, (a) will not be able
to rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive letters,
(b) will not be permitted or entitled to tender such Old Notes in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Notes unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, if any broker-dealer holds Old
Notes acquired for its own account as a result of market-making or other trading
activities and exchanges such Old Notes for New Notes, then such broker-dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Notes.
Each holder of Old Notes who wishes to exchange Old Notes for New Notes in
the Exchange Offer will be required to represent that (i) it is not an
"affiliate" of the Company, (ii) any New Notes to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Notes, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Notes for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, the Company believes that broker-dealers who acquired Old
Notes for their own accounts, as a result of market-making activities or other
trading activities ("Participating Broker-Dealers") may fulfill their prospectus
delivery requirements with respect to the New Notes received upon exchange of
such Old Notes (other than Old Notes which represent an unsold allotment from
the original sale of the Old Notes) with a prospectus meeting the requirements
of the Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution with
respect to the resale of such New Notes. Accordingly, this Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer during the period referred to below in connection with resales of
New Notes received in exchange for Old Notes where such Old Notes were acquired
by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Notes
for a period ending 90 days after the Expiration Date (subject to extension
under certain limited circumstances described below) or, if earlier, when all
such New Notes have been disposed of by such Participating Broker-Dealer. See
"Plan of Distribution." Any Participating Broker-Dealer who is an "affiliate" of
the Company may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. See "The Exchange Offer -- Resales of
New Notes."
In that regard, each Participating Broker-Dealer who surrenders Old Notes
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that, upon receipt of notice from the Company of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit
2
<PAGE>
to state a material fact necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances under which they
were made, not misleading or of the occurrence of certain other events specified
in the Registration Rights Agreement, such Participating Broker-Dealer will
suspend the sale of New Notes pursuant to this Prospectus until the Company has
amended or supplemented this Prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented Prospectus to such
Participating Broker-Dealer or the Company has given notice that the sale of the
New Notes may be resumed, as the case may be. If the Company gives such notice
to suspend the sale of the New Notes, it shall extend the 90-day period referred
to above during which Participating Broker-Dealers are entitled to use this
Prospectus in connection with the resale of New Notes by the number of days
during the period from and including the date of the giving of such notice to
and including the date when Participating Broker-Dealers shall have received
copies of the amended or supplemented Prospectus necessary to permit resales of
the New Notes or to and including the date on which the Company has given notice
that the sale of New Notes may be resumed, as the case may be.
The New Notes will be a new issue of securities for which there currently is
no market. Although the Initial Purchasers have informed the Company that they
each currently intend to make a market in the New Notes, they are not obligated
to do so, and any such market making may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the New Notes. The Company currently does not intend
to apply for listing of the New Notes on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System.
Any Old Notes not tendered and accepted in the Exchange Offer will remain
outstanding and will be entitled to all the same rights and will be subject to
the same limitations applicable thereto under the Indenture (except for those
rights which terminate upon consummation of the Exchange Offer). Following
consummation of the Exchange Offer, the holders of Old Notes will continue to be
subject to the existing restrictions upon transfer thereof and the Company will
have no further obligation to such holders (other than to the Initial Purchasers
under certain limited circumstances) to provide for registration under the
Securities Act of the Old Notes held by them. To the extent that Old Notes are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Old Notes could be adversely affected. See "Summary -- Certain
Consequences of a Failure to Exchange Old Notes."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD NOTES ARE URGED TO READ THIS PROSPECTUS AND THE
RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR
OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
Old Notes may be tendered for exchange on or prior to 5:00 p.m., New York
City time, on , 1995 (such time on such date being hereinafter
called the "Expiration Date"), unless the Exchange Offer is extended by the
Company (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended). Tenders of Old Notes may be
withdrawn at any time on or prior to the Expiration Date. The Exchange Offer is
not conditioned upon any minimum principal amount of Old Notes being tendered
for exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Company and to the terms and provisions of
the Registration Rights Agreement. Old Notes may be tendered in whole or in part
in a principal amount of $1,000 and integral multiples thereof, provided that if
any Old Note is tendered for exchange in part, the untendered principal amount
thereof must be $250,000 or any integral multiple of $1,000 in excess thereof.
The Company has agreed to pay all expenses of the Exchange Offer. See "The
Exchange Offer -- Fees and Expenses". Each New Note will bear interest from the
most recent date to which interest has been paid or duly provided for on the Old
Note surrendered in exchange for such New Note or, if no such interest has been
paid or duly provided for on such Old Note, from June 1, 1995. Holders of the
Old Notes whose Old Notes are accepted for exchange will not receive accrued
interest on such Old Notes for any period from and after the last Interest
Payment Date to which interest has been paid or duly provided for on such Old
Notes prior to the original issue date of the New Notes or, if no such interest
has been paid or duly provided for, will not receive any accrued interest on
such Old Notes, and will be deemed to have waived the right to receive any
interest on such Old Notes accrued from and after such Interest Payment Date or,
if no such interest has been paid or duly provided for, from and after June 1,
1995.
This Prospectus, together with the Letter of Transmittal, is being sent to
all registered holders of Old Notes as of , 1995.
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. No dealer-manager is being used in connection with this
Exchange Offer. See "Use of Proceeds" and "Plan of Distribution."
3
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the Commission's Regional Offices in New York City (Seven
World Trade Center, 13th Floor, New York, New York 10048), and Chicago (Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). Copies of
these materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Reports, proxy statements and other information concerning the Company may also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005 and at the offices of the Pacific Stock Exchange, 301 Pine
Street, San Francisco, California 94104.
This Prospectus constitutes a part of a registration statement on Form S-4
(together with all amendments thereto, the "Registration Statement") filed by
the Company with the Commission under the Securities Act. This Prospectus, which
forms a part of the Registration Statement, does not contain all the information
set forth in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and related exhibits and
schedules filed therewith for further information with respect to the Company
and the New Notes offered hereby. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed or incorporated by
reference as an exhibit to the Registration Statement or otherwise filed by the
Company with the Commission and each such statement is qualified in its entirety
by such reference. The Registration Statement and the exhibits and schedules
thereto may be inspected and copied at the public reference facilities
maintained by the Commission at the addresses described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission by the Company
pursuant to the Exchange Act are incorporated herein by reference: (i) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994; and (ii) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the Exchange Offer for the New Notes shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement or document so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. Subject to the foregoing, all
information appearing in this Prospectus is qualified in its entirety by the
information appearing in the documents incorporated herein by reference.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any and all of the documents
incorporated by reference other than exhibits to such documents which are not
specifically incorporated by reference in such documents. Written or telephone
requests should be directed to: Consolidated Freightways, Inc., Office of the
Corporate Secretary, at 3240 Hillview Avenue, Palo Alto, California 94304
(telephone (415) 494-2900).
4
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND IS SUBJECT TO,
THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS CONTAINED ELSEWHERE AND
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS OTHERWISE INDICATED OR
UNLESS THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES IN THIS PROSPECTUS TO THE
COMPANY INCLUDE CONSOLIDATED FREIGHTWAYS, INC. AND ITS SUBSIDIARIES.
THE COMPANY
Consolidated Freightways, Inc. (the "Company") is a holding company which
participates through subsidiaries in various forms of nationwide and regional
trucking services, truckload and intermodal rail services, domestic and
international air cargo delivery services, contract logistics and related
transportation activities. These operations are organized into three primary
business groups: nationwide, full-service trucking (CF MotorFreight); regional
trucking and full-service truckload services (Con-Way); and air freight (Emery
Worldwide).
CF MOTORFREIGHT
CF MotorFreight provides general freight services nationwide and in Canada
and, on a limited basis, in Mexico, the Caribbean area, Central and South
America, Europe and the Pacific Rim. Operations consist of an extensive
transportation network moving freight that typically consists of shipments of
manufactured or non-perishable processed products having relatively high value
and requiring expedited service. The primary business of CF MotorFreight is
transporting freight that is less-than-truckload ("LTL"), an industry
designation for shipments weighing less than 10,000 pounds. Based on its 1994
revenues of $2,094.1 million, CF MotorFreight is one of the nation's largest LTL
motor carriers.
CON-WAY TRANSPORTATION SERVICES
Con-Way includes three business units that provide regional LTL freight
trucking and one business unit that provides full-service truckload freight
delivery utilizing over-the-road and intermodal rail resources for
transcontinental, inter-regional and regional transportation. Con-Way also
provides local and interstate container drayage and freight assembly and
distribution services. Con-Way's 1994 revenues were $1,018.5 million.
EMERY WORLDWIDE
Emery Worldwide provides commercial door-to-door delivery for same-day,
next-day, second-day and deferred shipments in North America through a dedicated
aircraft and ground fleet. Internationally, with offices and agents in 89
countries, Emery Worldwide operates primarily as a freight forwarder. Emery
Worldwide is focused primarily on heavy air freight. Emery Worldwide was formed
when the Company purchased Emery Air Freight Corporation in April 1989 and
merged it with the Company's existing air freight operation. Emery Worldwide's
1994 revenues were $1,567.9 million.
The Company was incorporated in Delaware in 1958 as a successor to a
business originally established in 1929. The Company's principal executive
office is located at 3240 Hillview Avenue, Palo Alto, California 94304
(telephone (415) 494-2900).
5
<PAGE>
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The Exchange Offer................ Up to $100,000,000 aggregate principal amount of New
Notes are being offered in exchange for a like aggregate
principal amount of Old Notes. Old Notes may be tendered
for exchange in whole or in part in a principal amount
of $1,000 and integral multiples thereof, provided that
if any Old Note is tendered for exchange in part, the
untendered principal amount thereof must be $250,000 or
any integral multiple of $1,000 in excess thereof. The
Company is making the Exchange Offer in order to satisfy
its obligations under the Registration Rights Agreement
relating to the Old Notes. For a description of the
procedures for tendering Old Notes, see "The Exchange
Offer -- Procedures for Tendering Old Notes."
Expiration Date................... 5:00 p.m., New York City time, on , 1995 (such
time on such date being hereinafter called the
"Expiration Date") unless the Exchange Offer is extended
by the Company (in which case the term "Expiration Date"
shall mean the latest date and time to which the
Exchange Offer is extended). See "The Exchange Offer --
Expiration Date; Extensions; Amendments."
Certain Conditions to the Exchange
Offer............................ The Exchange Offer is subject to certain conditions. The
Company reserves the right in its sole and absolute
discretion, subject to applicable law, at any time and
from time to time, (i) to delay the acceptance of the
Old Notes for exchange, (ii) to terminate the Exchange
Offer if certain specified conditions have not been
satisfied, (iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Notes tendered
pursuant to the Exchange Offer, subject, however, to the
right of holders of Old Notes to withdraw their tendered
Old Notes, or (iv) to waive any condition or otherwise
amend the terms of the Exchange Offer in any respect.
See "The Exchange Offer -- Expiration Date; Extensions;
Amendments" and "-- Certain Conditions to the Exchange
Offer."
Withdrawal Rights................. Tenders of Old Notes may be withdrawn at any time on or
prior to the Expiration Date by delivering a written
notice of such withdrawal to the Exchange Agent in
conformity with certain procedures set forth below under
"The Exchange Offer -- Withdrawal Rights."
Procedures for Tendering Old
Notes............................ Tendering holders of Old Notes must complete and sign a
Letter of Transmittal in accordance with the
instructions contained therein and forward the same by
mail, facsimile or hand delivery, together with any
other required documents, to the Exchange Agent, either
with the Old Notes to be tendered or in compliance with
the specified procedures for guaranteed delivery of Old
Notes. Certain brokers, dealers, commercial banks, trust
companies and other nominees may also effect tenders by
book-entry transfer. Holders of Old Notes registered in
the name of a broker, dealer, commercial bank, trust
company or other nominee are urged to contact such
person promptly if they wish to tender Old Notes
pursuant to the Exchange Offer. See "The
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Exchange Offer -- Procedures for Tendering Old Notes."
Letters of Transmittal and certificates representing Old
Notes should not be sent to the Company. Such documents
should only be sent to the Exchange Agent. Questions
regarding how to tender and requests for information
should be directed to the Exchange Agent. See "The
Exchange Offer -- Exchange Agent."
Resales of New Notes.............. The Company is making the Exchange Offer in reliance on
the position of the staff of the Division of Corporation
Finance of the Commission as set forth in certain
interpretive letters addressed to third parties in other
transactions. However, the Company has not sought its
own interpretive letter and there can be no assurance
that the staff of the Division of Corporation Finance of
the Commission would make a similar determination with
respect to the Exchange Offer as it has in such
interpretive letters to third parties. Based on these
interpretations by the staff of the Division of
Corporation Finance, and subject to the two immediately
following sentences, the Company believes that New Notes
issued pursuant to this Exchange Offer in exchange for
Old Notes may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such
New Notes are acquired in the ordinary course of such
holder's business and that such holder is not
participating, and has no arrangement or understanding
with any person to participate, in a distribution
(within the meaning of the Securities Act) of such New
Notes. However, any holder of Old Notes who is an
"affiliate" of the Company or who intends to participate
in the Exchange Offer for the purpose of distributing
the New Notes, or any broker-dealer who purchased the
Old Notes from the Company to resell pursuant to Rule
144A or any other available exemption under the
Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be
permitted or entitled to tender such Old Notes in the
Exchange Offer and (c) must comply with the registration
and prospectus delivery requirements of the Securities
Act in connection with any sale or other transfer of
such Old Notes unless such sale is made pursuant to an
exemption from such requirements. In addition, as
described below, if any broker-dealer holds Old Notes
acquired for its own account as a result of
market-making or other trading activities and exchanges
such Old Notes for New Notes, then such broker-dealer
must deliver a prospectus meeting the requirements of
the Securities Act in connection with any resales of
such New Notes.
Each holder of Old Notes who wishes to exchange Old
Notes for New Notes in the Exchange Offer will be
required to represent that (i) it is not an "affiliate"
of the Company, (ii) any New Notes to be received by it
are being acquired in the ordinary course of its
business, (iii) it has no arrangement or understanding
with any person to participate in a distribution (within
the meaning of the Securities Act) of such New Notes,
and (iv) if such holder is not a
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
broker-dealer, such holder is not engaged in, and does
not intend to engage in, a distribution (within the
meaning of the Securities Act) of such New Notes. Each
broker-dealer that receives New Notes for its own
account pursuant to the Exchange Offer must acknowledge
that it acquired the Old Notes for its own account as
the result of market-making activities or other trading
activities and must agree that it will deliver a
prospectus meeting the requirements of the Securities
Act in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. Based on the position
taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters
referred to above, the Company believes that
broker-dealers who acquired Old Notes for their own
accounts as a result of market-making activities or
other trading activities ("Participating
Broker-Dealers") may fulfill their prospectus delivery
requirements with respect to the New Notes received upon
exchange of such Old Notes (other than Old Notes which
represent an unsold allotment from the original sale of
the Old Notes) with a prospectus meeting the
requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with
respect to the resale of such New Notes. Accordingly,
this Prospectus, as it may be amended or supplemented
from time to time, may be used by a Participating
Broker-Dealer in connection with resales of New Notes
received in exchange for Old Notes where such Old Notes
were acquired by such Participating Broker-Dealer for
its own account as a result of market-making or other
trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement and to the
limitations described below under "The Exchange Offer --
Resale of New Notes", the Company has agreed that this
Prospectus, as it may be amended or supplemented from
time to time, may be used by a Participating
Broker-Dealer in connection with resales of such New
Notes for a period ending 90 days after the Expiration
Date (subject to extension under certain limited
circumstances) or, if earlier, when all such New Notes
have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution." Any
Participating Broker-Dealer who is an "affiliate" of the
Company may not rely on such interpretive letters and
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any resale transaction. See "The
Exchange Offer -- Resales of New Notes."
Exchange Agent.................... The exchange agent with respect to the Exchange Offer is
Bank One, Columbus, NA (the "Exchange Agent"). The
addresses, and telephone and facsimile numbers of the
Exchange Agent are set forth in "The Exchange Offer --
Exchange Agent" and in the Letter of Transmittal.
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
Use of Proceeds................... The Company will not receive any cash proceeds from the
issuance of the New Notes offered hereby. See "Use of
Proceeds."
Certain United States Federal
Income Tax Considerations........ Holders of Old Notes should review the information set
forth under "-- Certain United States Federal Income Tax
Considerations" prior to tendering Old Notes in the
Exchange Offer.
THE NEW NOTES
Securities Offered................ Up to $100,000,000 aggregate principal amount of the
Company's 7.35% Notes due 2005 which have been
registered under the Securities Act.
The New Notes will be issued and the Old Notes were
issued under an Indenture dated as of August 1, 1989
(the "Indenture") between the Company and Bank One,
Columbus, NA, as successor trustee (the "Trustee"). The
New Notes and any Old Notes which remain outstanding
after consummation of the Exchange Offer will constitute
a single series of debt securities under the Indenture
and, accordingly, will vote together as a single class
for purposes of determining whether holders of the
requisite percentage in outstanding principal amount
thereof have taken certain actions or exercised certain
rights under the Indenture. See "Description of the New
Notes -- General."
The terms of the New Notes are identical in all material
respects to the terms of the Old Notes, except that (i)
the New Notes have been registered under the Securities
Act and therefore are not subject to certain
restrictions on transfer applicable to the Old Notes and
will not be entitled to registration rights or other
rights under the Registration Rights Agreement, (ii) the
New Notes are issuable in minimum denominations of
$1,000 compared to minimum denominations of $250,000 for
the Old Notes and (iii) the New Notes will not provide
for any increase in the interest rate thereon. See "The
Exchange Offer -- Purpose of the Exchange Offer,"
"Description of the New Notes" and "Description of the
Old Notes."
Maturity Date..................... June 1, 2005.
Interest Payment Dates............ June 1 and December 1 of each year, commencing on the
first such date following the original issuance of the
New Notes.
Denominations..................... The New Notes will be issued in minimum denominations of
$1,000 and integral multiples of $1,000 in excess
thereof.
Redemption........................ The New Notes may not be redeemed prior to maturity.
Sinking fund...................... None.
Ranking........................... The New Notes will constitute unsecured unsubordinated
indebtedness of the Company and will rank PARI PASSU
with all other unsecured and unsubordinated indebtedness
of the Company for borrowed money. Because the Company
is a holding company, the New Notes will be effectively
subordinated
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
to all existing and future indebtedness, trade payables,
guarantees, lease obligations and letter of credit
obligations of the Company's subsidiaries. As of March
31, 1995, the Company's subsidiaries had approximately
$133 million of outstanding indebtedness and obligations
under capital leases and approximately $88 million of
outstanding undrawn letters of credit. In addition,
certain subsidiaries are guarantors under the Company's
$300 million bank credit facility (the "Credit
Agreement"). At December 31, 1994, the Company's
subsidiaries were subject to long-term non-cancelable
operating leases requiring future minimum lease payments
of approximately $501 million. See "Capitalization" and
"Description of the New Notes -- Ranking; Holding
Company Structure."
Absence of Market for the New
Notes............................ The New Notes will be a new issue of securities for
which there currently is no market. Although Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., J.P. Morgan
Securities Inc., and Salomon Brothers Inc, the initial
purchasers of the Old Notes (the "Initial Purchasers"),
have informed the Company that they each currently
intend to make a market in the New Notes, they are not
obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly,
there can be no assurance as to the development or
liquidity of any market for the New Notes. The Company
currently does not intend to apply for listing of the
New Notes on any securities exchange or for quotation
through the National Association of Securities Dealers
Automated Quotation System.
</TABLE>
FOR FURTHER INFORMATION REGARDING THE NEW NOTES, SEE "DESCRIPTION OF THE NEW
NOTES."
10
<PAGE>
CERTAIN CONSEQUENCES OF A FAILURE TO EXCHANGE OLD NOTES
The Old Notes have not been registered under the Securities Act or any state
securities laws and therefore may not be offered, sold or otherwise transferred
except in compliance with the registration requirements of the Securities Act
and any other applicable securities laws, or pursuant to an exemption therefrom
or in a transaction not subject thereto, and in each case in compliance with
certain other conditions and restrictions, including the Company's and the
Trustee's right in certain cases to require the delivery of opinions of counsel,
certifications and other information prior to any such transfer. Old Notes which
remain outstanding after consummation of the Exchange Offer will continue to
bear a legend reflecting such restrictions on transfer. In addition, upon
consummation of the Exchange Offer, holders of Old Notes which remain
outstanding will not be entitled to any rights to have such Old Notes registered
under the Securities Act or to any similar rights under the Registration Rights
Agreement (subject to certain limited exceptions applicable solely to the
Initial Purchasers). The Company currently does not intend to register under the
Securities Act any Old Notes which remain outstanding after consummation of the
Exchange Offer (subject to such limited exceptions, if applicable).
To the extent that Old Notes are tendered and accepted in the Exchange
Offer, a holder's ability to sell untendered Old Notes could be adversely
affected. In addition, although the Old Notes are eligible for trading in the
Private Offerings, Resale and Trading through Automatic Linkages ("PORTAL")
market, to the extent that Old Notes are tendered and accepted in connection
with the Exchange Offer, any trading market for Old Notes which remain
outstanding after the Exchange Offer could be adversely affected.
The New Notes and any Old Notes which remain outstanding after consummation
of the Exchange Offer will constitute a single series of debt securities under
the Indenture and, accordingly, will vote together as a single class for
purposes of determining whether holders of the requisite percentage in
outstanding principal amount thereof have taken certain actions or exercised
certain rights under the Indenture. See "Description of the New Notes --
General."
The Old Notes provide that, if the Exchange Offer is not consummated by
October 29, 1995, the interest rate borne by the Old Notes will increase by
0.25% per annum following October 29, 1995 until the Exchange Offer is
consummated. See "Description of the Old Notes." Following consummation of the
Exchange Offer, the Old Notes will not be entitled to any increase in the
interest rate thereon. The New Notes will not be entitled to any such increase
in the interest rate thereon.
11
<PAGE>
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. In consideration for issuing the New Notes in exchange for
Old Notes as described in this Prospectus, the Company will receive Old Notes in
like principal amount. The Old Notes surrendered in exchange for the New Notes
will be retired and cancelled. Accordingly, the issuance of the New Notes will
not result in any change in the indebtedness of the Company.
The net proceeds to the Company from the sale of the Old Notes was
approximately $98,890,000. The Company has used a portion of the net proceeds
from the issuance of the Old Notes to repay short-term borrowings and intends to
use the remainder for other general corporate purposes, including capital
expenditures. Pending such application, such proceeds may be invested in
short-term investments. At March 31, 1995, the Company had $55 million of
outstanding short-term borrowings which were incurred for capital expenditures
and other general corporate purposes.
CAPITALIZATION
The following table sets forth (i) the current maturities of long-term debt
and capital leases and short-term borrowings of the Company as of March 31, 1995
and as adjusted to reflect the application of a portion of the estimated net
proceeds from the sale of the Old Notes to repay short-term borrowings, and (ii)
the consolidated capitalization of the Company as of March 31, 1995 and as
adjusted to reflect the sale of the Old Notes.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1995
-----------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
SHORT-TERM DEBT
Current maturities of long-term debt and capital leases................................................. $ 2,174 $ 2,174
Short-term borrowings (1)............................................................................... 55,000 --
---------- -----------
Total Short-Term Debt............................................................................... $ 57,174 $ 2,174
---------- -----------
---------- -----------
LONG-TERM DEBT AND CAPITAL LEASES (NET OF CURRENT MATURITIES)
9 1/8% Notes due 1999................................................................................... $ 117,705 $ 117,705
Industrial Revenue Bonds due through 2014............................................................... 19,900 19,900
7.35% Notes due 2005.................................................................................... -- 100,000
Guaranteed TASP Notes due through 2009 (2).............................................................. 149,000 149,000
Obligations under capital leases........................................................................ 111,010 111,010
Other debt.............................................................................................. 74 74
---------- -----------
Total Long-Term Debt (3)............................................................................ 397,689 497,689
---------- -----------
SHAREHOLDERS' EQUITY
Preferred Stock, no par value; authorized 5,000,000 shares:
Series A, designated 600,000 shares; none issued...................................................... -- --
Series B, 8.5% cumulative, convertible, $.01 stated value; designated 1,100,000 shares; issued 961,032
shares............................................................................................... 10 10
Additional paid-in capital, preferred stock............................................................. 146,163 146,163
Deferred Thrift and Stock Plan compensation............................................................. (119,167) (119,167)
---------- -----------
Total Preferred Shareholders' Equity................................................................ 27,006 27,006
---------- -----------
Common Stock, $.625 par value; authorized 100,000,000 shares; issued 50,892,217 shares.................. 31,808 31,808
Additional paid-in capital, common stock................................................................ 230,229 230,229
Cumulative translation adjustment....................................................................... 2,672 2,672
Retained earnings....................................................................................... 594,726 594,726
Cost of repurchased common stock (7,589,934 shares)..................................................... (187,139) (187,139)
---------- -----------
Total Common Shareholders' Equity................................................................... 672,296 672,296
---------- -----------
Total Shareholders' Equity.......................................................................... 699,302 699,302
---------- -----------
Total Capitalization................................................................................ $1,096,991 $1,196,991
---------- -----------
---------- -----------
<FN>
- ------------------------------
(1) Short-term borrowings consist of borrowings outstanding under the Company's
$300 million Credit Agreement.
(2) These notes (the "TASP Notes") were issued by the Company's Thrift and
Stock Plan and are guaranteed by the Company. See "Description of the Notes
-- Certain Covenants of the Company."
(3) In addition to the amounts reflected in the above table, at March 31, 1995
the Company had $110.1 million of letters of credit outstanding under the
Credit Agreement, $70.4 million of letters of credit outstanding and
secured by Emery Worldwide receivables under the $100 million Emery
Worldwide receivables sales facility, and $40.4 million of letters of
credit outstanding under several unsecured letter of credit facilities. At
that date, no drawings were outstanding under these letters of credit.
</TABLE>
12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data for the
Company and its subsidiaries as of and for the three months ended March 31, 1994
and 1995 and as of and for the five years ended December 31, 1994. The selected
consolidated financial data (other than the ratio of earnings to fixed charges
set forth below) as of and for the five years ended December 31, 1994 has been
derived from the Company's audited consolidated financial statements. The
selected consolidated financial data (other than the ratio of earnings to fixed
charges set forth below) as of and for the three months ended March 31, 1994 and
1995 has been derived from the Company's unaudited consolidated financial
statements. In the opinion of management, such unaudited consolidated financial
statements include all normal recurring adjustments necessary to present fairly
the information required to be set forth therein. Operating results for the
three months ended March 31, 1995 are not necessarily indicative of the results
to be expected for the year ending December 31, 1995. The following data should
be read in conjunction with the Company's consolidated financial statements and
notes thereto incorporated by reference herein. See "Available Information."
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
----------------------------- -------------------------------------------------------------
1995 1994 1994 1993 1992 1991
------------- ------------- ------------- ------------- ------------- -------------
(UNAUDITED) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES
CF MotorFreight........... $ 608,425 $ 532,383 $2,094,081 $2,112,237 $2,184,190 $2,142,603
Con-Way................... 274,890 230,408 1,018,544 818,301 724,195 639,443
Emery Worldwide........... 412,772 340,430 1,567,854 1,261,273 1,147,204 1,300,211
------------- ------------- ------------- ------------- ------------- -------------
Total................... $1,296,087 $1,103,221 $4,680,479 $4,191,811 $4,055,589 $4,082,257
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
OPERATING INCOME (LOSS)
CF MotorFreight........... $ 10,123 $ 3,913 $ (46,602) $ 31,712 $ 27,485(1) $ 51,991
Con-Way................... 28,848 20,924 111,220 71,854 53,747 33,318
Emery Worldwide........... 13,062 10,647 77,616 16,591 (32,651) (83,573)
------------- ------------- ------------- ------------- ------------- -------------
Total................... $ 52,033 $ 35,484 $ 142,234 $ 120,157 $ 48,581 $ 1,736
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
Depreciation and
amortization............... $ 35,310 $ 36,749 $ 145,765 $ 146,297 $ 166,917 $ 168,527
Investment income........... 125 515 2,205 5,586 5,041 10,558
Interest expense............ 7,201 6,876 27,945 30,333 38,893 46,703
Net income (loss)........... 24,166 15,256 54,773(3) 50,574 (81,075)(4) (40,421)
Preferred stock dividends... 4,324 4,734 19,063 18,967 16,653 12,691
Net income (loss) applicable
to common shareholders..... 19,842 10,522 35,710(3) 31,607 (97,728)(4) (53,112)
Ratio of earnings to fixed
charges(5)................. 2.5x 2.0x 1.9x 1.8x 0.8x(6) 0.5x(6)
BALANCE SHEET DATA AT END OF
PERIOD:
Net working capital......... $ 63,601 $ 80,069 $ 86,297 $ 56,931 $ 152,309 $ 141,008
Cost in excess of net assets
of businesses acquired,
net........................ 319,585 351,463 322,169 354,076 363,710 373,881
Property, plant and
equipment, net............. 972,474 913,230 944,592 910,444 886,834 896,922
Total assets................ 2,558,865 2,335,031 2,472,723 2,316,350 2,293,067 2,285,466
Long-term indebtedness
(7)........................ 397,689 408,199 397,857 408,409 505,320 646,655
Shareholders' equity........ 699,302 640,351 673,629 623,375 579,161 547,083
<CAPTION>
1990
-------------
<S> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES
CF MotorFreight........... $2,185,271
Con-Way................... 638,098
Emery Worldwide........... 1,385,158
-------------
Total................... $4,208,527
-------------
-------------
OPERATING INCOME (LOSS)
CF MotorFreight........... $ 108,462
Con-Way................... 25,547(2)
Emery Worldwide........... (127,965)
-------------
Total................... $ 6,044
-------------
-------------
Depreciation and
amortization............... $ 170,757
Investment income........... 2,531
Interest expense............ 40,178
Net income (loss)........... (27,981)
Preferred stock dividends... 12,746
Net income (loss) applicable
to common shareholders..... (40,727)
Ratio of earnings to fixed
charges(5)................. 0.6x(6)
BALANCE SHEET DATA AT END OF
PERIOD:
Net working capital......... $ 125,161
Cost in excess of net assets
of businesses acquired,
net........................ 384,179
Property, plant and
equipment, net............. 953,504
Total assets................ 2,412,003
Long-term indebtedness
(7)........................ 673,611
Shareholders' equity........ 581,979
<FN>
- ------------------------------
(1) Includes special charges of $17.3 million related to CF MotorFreight and
the write-off of Canadian operating authorities.
(2) Includes one-time subsidiary closure costs of $11.3 million.
(3) Includes $5.5 million extraordinary charge, net of related tax benefits,
for the write-off of intrastate operating rights.
(4) Includes $70 million cumulative effect of change in method of accounting
for post retirement benefits and $7.4 million extraordinary charge from
early retirement of debt, net of income tax benefits. Also included are
special charges of $11.6 million and $6.5 million of charges for the
write-down of properties held for sale and certain other intangibles, net
of income tax benefits.
(5) The ratio of earnings to fixed charges is unaudited for all periods
presented. The ratio of earnings to fixed charges was derived by dividing
earnings before fixed charges and income taxes by fixed charges. For this
purpose, "earnings" represents income before consolidated income taxes and
fixed charges (excluding capitalized interest and dividends on all of the
Company's preferred stock). "Fixed charges" represents interest on capital
leases and short-term and long-term debt, capitalized interest, dividends
on shares of the Series B Cumulative Convertible Preferred Stock used to
pay debt service on notes issued by the Company's Thrift and Stock Plan
(the "TASP") (see "Capitalization"), and the applicable portion of the
consolidated rent expense which approximates the interest portion of lease
payments. All of the outstanding shares of such Series B Cumulative
Convertible Preferred Stock are held by the TASP.
(6) Earnings were inadequate to cover fixed charges for the periods shown; the
deficiency was $23.9 million, $57.7 million and $47.9 million for the years
ended December 31, 1992, 1991 and 1990, respectively.
(7) Long-term indebtedness includes capital lease obligations and notes issued
by the TASP which are guaranteed by the Company. See "Capitalization."
</TABLE>
13
<PAGE>
BUSINESS OF THE COMPANY
Consolidated Freightways, Inc. is a holding company which participates
through subsidiaries in various forms of nationwide and regional trucking
services, truckload and intermodal rail services, domestic and international air
cargo delivery services, contract logistics and related transportation
activities. These operations are organized into three primary business groups:
nationwide, full-service trucking (CF MotorFreight); regional trucking and
full-service truckload services (Con-Way); and air freight (Emery Worldwide).
CF MOTORFREIGHT
CF MotorFreight provides general freight services nationwide and in Canada
and, on a limited basis, in Mexico, the Caribbean area, Central and South
America, Europe and the Pacific Rim. General freight consists typically of
shipments of manufactured or non-perishable processed products of relatively
high value and requiring expedited service, compared to the bulk raw materials
characteristically transported by railroads, pipelines and water carriers. The
primary business of CF MotorFreight is transporting freight that is
less-than-truckload ("LTL"), an industry designation for shipment weighing less
than 10,000 pounds. Based on its 1994 revenues of $2,094.1 million, CF
MotorFreight is one of the nation's largest LTL motor carriers.
As a large carrier of LTL general freight, CF MotorFreight has pick-up and
delivery fleets in each area served, in addition to a fleet of intercity
tractors and trailers. It has a network of 437 U.S. and Canadian
freight-terminals, metro centers and regional consolidation centers. The metro
centers reduce freight handling by allowing more direct city to city service,
thereby improving productivity. CF MotorFreight operations are supported by a
sophisticated data processing system for the control and management of the
business.
Industry trends towards regionalization and new competitors entering the
small shipment segment of the business have led to increased competition and
consequent pricing pressure. The Company believes that these competitive
pressures will be offset, in part, by various CF MotorFreight initiatives. In
that regard, CF MotorFreight began to implement changes to its operations in the
fourth quarter of 1994 which are intended, among other things, to take advantage
of flexibilities achieved through a new labor agreement entered into in 1994
with the International Brotherhood of Teamsters (the "IBT"). The agreement,
which expires in 1998, allows the Company to (i) increase its use of lower-cost
rail on long-haul segments, (ii) utilize part-time employees to supplement the
regular work force rather than providing overtime for unionized employees, and
(iii) pay new hires 75% of the standard wage for an initial employment period.
Contract flexibilities are also expected to allow the Company to restructure its
transportation network to reduce freight handling and total miles driven. These
changes are expected to be implemented throughout 1995 and thereafter. CF
MotorFreight also believes that the trend towards certain customers limiting
themselves to a core group of carriers plays to the strengths of CF
MotorFreight's national network and integrated information services.
CF MotorFreight had approximately 20,700 employees at December 31, 1994, at
which time approximately 85% of its domestic employees were represented by labor
unions, primarily the IBT. The Company's results of operations for 1994 were
adversely affected by a 24-day strike by the IBT in April 1994. In connection
with the settlement of the strike, CF MotorFreight and the IBT entered into the
new labor agreement described above.
CF MotorFreight's 1994 revenues of $2,094.1 million were 0.9% less than 1993
revenues of $2,112.2 million. Due in large part to losses incurred during the
April 1994 strike and the subsequent recovery period, CF MotorFreight
experienced a 1994 operating loss of $46.6 million, compared to 1993 operating
income of $31.7 million. For the first quarter of 1995, CF MotorFreight had
operating income of $10.1 million on revenues of $608.4 million, compared to
$3.9 million of operating income on revenues of $532.4 million during the
comparable period in 1994. CF MotorFreight's first quarter 1995 results reflect
benefits from a rate increase announced in January 1995 and programs intended to
improve its revenues and operational efficiencies. Also contributing to first
quarter 1995 results was increased operating income from CF MotorFreight's
non-carrier operations compared to the first quarter of 1994. However, with
growth in the economy
14
<PAGE>
beginning to slow, CF MotorFreight is experiencing increased rate discounting
and intensified competition. A 3.3% wage and benefit increase for contractual
labor went into effect on April 1, 1995. To offset, in part, the impact of rate
discounting and this wage and benefit increase, CF MotorFreight intends to
initiate additional changes to operations designed to reduce freight handling
and transit times.
The CF MotorFreight business group also includes three non-carrier operating
units. Menlo Logistics Inc., founded in 1990, provides customized single-source
logistics solutions for manufacturing, industrial and retail businesses. These
services include carrier management, dedicated fleet and warehouse operations,
just-in-time delivery programs, customer order processing and freight bill
payment and auditing. Road Systems, Inc. primarily manufactures trailers for
sale to other business units within the Company. VantageParts (formerly known as
Willamette Sales Co.) serves as a distributor of heavy-duty truck, marine and
construction equipment parts and generates a substantial portion of its revenues
from sales within the Company.
CON-WAY
Con-Way includes three business units that provide regional LTL freight
trucking and one business unit that provides full-service truckload freight
delivery utilizing over-the-road and intermodal rail resources for
transcontinental, inter-regional and regional transportation. Con-Way also
provides local and interstate container drayage and freight assembly and
distribution services. At December 31, 1994, Con-Way had approximately 10,000
employees, none of whom were unionized.
Three of Con-Way's business units are regional motor carriers, each of which
operates dedicated regional trucking networks principally serving core
geographic territories with next-day and second-day service. The regional
carriers serve manufacturing, industrial, commercial and retail
business-to-business customers with a fleet in excess of 16,700 trucks, tractors
and trailers. For 1994, more than two-thirds of the shipments made by these
three regional carriers were next-day shipments.
Con-Way Western Express ("CWX") operates in 13 western states and also
serves Canada and Mexico. In 1994, CWX expanded operations to include Utah and
Colorado. At December 31, 1994, CWX operated 74 service centers. In January
1995, CWX expanded operations into Oregon, Washington, Idaho and Vancouver,
British Columbia, opening 22 new service centers in the Pacific Northwest.
Con-Way Central Express ("CCX") serves 23 states of the central and
northeast U.S. and Ontario, Canada. CCX expanded into the New England states in
1994 and, at December 31, 1994, operated 187 service centers. In February 1995,
CCX expanded into New Jersey and began providing service for metropolitan New
York City.
Con-Way Southern Express ("CSE") serves a 14-state southern market from
Texas to the Carolinas and Florida, and also serves Puerto Rico and Mexico. CSE
operated 92 service centers at December 31, 1994. CSE was formed in December
1994 when, in order to improve operating efficiencies, Con-Way Southern Express,
Inc. and Con-Way Southwest Express, Inc. were combined into a single operating
unit under the CSE name.
A service expansion program initiated by Con-Way in 1994 allows each of CWX,
CCX and CSE to provide next-day and second-day freight delivery between their
principal geographic regions. The program generates additional business by
allowing each carrier to compete for new traffic and to provide coverage of
regional market lanes not individually serviced as part of the carrier's core
territory. Business from this initiative is expected to continue to increase as
additional lanes are opened.
Regional carriers currently face increasing competition as national LTL
companies extend into regional markets and acquire and combine formerly
independent regional carriers into inter-regional groups. Con-Way has pursued a
geographic expansion program in recent years and believes that further growth
can be anticipated as these new territories are developed. Additionally, new
service offerings, extension of next-day and second-day service standards and
enhanced inter-regional network capabilities are positioning Con-Way for growth
opportunities.
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Con-Way's fourth business unit is Con-Way Truckload Services, Inc. ("CWT"),
a full-service, multi-modal truckload company. It provides door-to-door
transcontinental movement of truckload shipments by rail container and rail
trailer, utilizing nationwide operating alliances with major railroads. It also
provides expedited inter-regional and regional over-the-road truckload service
with a fleet of Company-owned tractors and trailers. Additionally, CWT provides
rail freight forwarding with domestic intermodal marketing services, and local
and interstate container drayage.
Con-Way's 1994 revenues of $1,018.5 million were 24.5% greater than 1993
revenues of $818.3 million. This revenue growth was largely due to a tonnage
gain of approximately 21% over 1994, attributable to geographic expansion and
growth in existing markets, and also reflects business obtained during the April
1994 strike against unionized LTL carriers. Con-Way's 1994 operating income of
$111.2 million increased 54.8% from 1993 operating income of $71.9 million. For
the first quarter of 1995, Con-Way had revenues of $274.9 million, a 19.3%
increase over first quarter 1994 revenues of $230.4 million, while first quarter
1995 operating income of $28.8 million represented a 37.9% increase over the
$20.9 million in operating income for the comparable 1994 period. With weaker
economic growth expected for the second quarter of 1995, Con-Way is expecting
increased pricing pressure, especially in light of deregulation of intrastate
traffic. Con-Way expects to counter, at least in part, the weakness in the
economy by differentiating the level and type of services it provides customers,
including its ability to provide expanded geographic coverage.
EMERY WORLDWIDE
Emery Worldwide provides commercial door-to-door delivery for same-day,
next-day, second-day and deferred shipments in North America through a dedicated
aircraft and ground fleet and, as discussed separately below, also provides
domestic services to the United States Postal Service ("USPS"). Internationally,
with offices and agents in 89 countries, Emery Worldwide operates primarily as a
freight forwarder. Emery Worldwide is focused primarily on heavy air freight.
Emery Worldwide was formed when the Company purchased Emery Air Freight
Corporation in April 1989 and merged it with the Company's existing air freight
operation.
Emery Worldwide provides commercial door-to-door service within North
America by using its own airlift system, supplemented with commercial airlines.
International services are performed by operating primarily as an air freight
forwarder using commercial airlines and, when appropriate, using dedicated lift
capacity which is generally comprised of aircraft under contract from third
parties. For the first quarter of 1995, approximately 40% of Emery Worldwide's
commercial revenues were attributable to international shipments.
As of December 31, 1994, Emery Worldwide's commercial operations utilized a
fleet of 69 aircraft, 42 of which were leased on a long-term basis, 9 of which
were owned by the Company and 18 of which were contracted on a short-term basis
to supplement nightly volumes and to provide feeder services. At that date, the
nightly lift capacity of the aircraft fleet, excluding charters, was
approximately 4 million pounds. Emery Worldwide also operated approximately
1,300 trucks, vans and tractors at December 31, 1994.
Emery Worldwide's hub-and-spoke system is centralized at the Dayton
International Airport where a leased air cargo facility (the "Hub") and related
support facilities are located. The Hub handles all types of shipments, ranging
from small packages to heavyweight cargo, with a total effective sort capacity
of approximately 1.2 million pounds per hour. The operation of the Hub in
conjunction with Emery Worldwide's airlift system enables Emery Worldwide to
maintain a high level of service reliability.
Through a separate subsidiary, the Company provides nightly cargo airline
services under a contract with the USPS to carry Express and Priority Mail,
using 23 aircraft, 6 of which are leased on a long-term basis and 17 of which
are owned by the Company. The original contract for this operation was awarded
to the
Company in 1989 and had been renewed and extended through early January 1994. A
new USPS contract was awarded to the Company during 1993 and expires in 2004. In
total, the Company recognized approximately $112 million of revenue in 1994
under contracts with the USPS, of which approximately $95 million was realized
under the new ten-year USPS contract.
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Emery Worldwide's 1994 revenues of $1,567.9 million were 24.3% greater than
1993 revenues of $1,261.3 million. Emery Worldwide's 1994 operating income of
$77.6 million represented an approximately four-fold increase over 1993
operating income of $16.6 million. In addition, since Emery Worldwide's 1990
operating loss of $128.0 million, 1994 marked the fourth consecutive year in
which Emery Worldwide's operating income (loss) had improved by more than
approximately $45 million over the prior year. For the first quarter of 1995,
Emery Worldwide had revenues of $412.8 million, a 21.3% increase over $340.4
million for the first quarter of 1994, while first quarter 1995 operating income
of $13.1 million represented a 22.7% increase over $10.6 million of operating
income recorded in the first quarter of 1994. Domestic revenues for the first
quarter of 1995 increased 8.4% over the comparable quarter of 1994, despite a
weakening U.S. economy, particularly in the automotive sector which constitutes
a significant customer base for Emery Worldwide. International revenues for the
first quarter of 1995 increased 54.7% over the first quarter of 1994, reflecting
a continuation of Emery Worldwide's marketing strategy to increase its global
market share. Although the Company believes that improvements at its Hub
operation, the better utilization of dedicated lift capacity and other operating
efficiencies could yield improvements in its results of operations, there can be
no assurance in this regard.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Notes, the Company entered into the
Registration Rights Agreement with the Initial Purchasers, pursuant to which the
Company agreed to use its best efforts to file with the Commission a
registration statement with respect to the exchange of the Old Notes for debt
securities with terms identical in all material respects to the terms of the Old
Notes, except that (i) the New Notes have been registered under the Securities
Act and therefore will not be subject to certain restrictions on transfer
applicable to the Old Notes and will not be entitled to registration and other
rights under the Registration Rights Agreement, (ii) the New Notes are issuable
in minimum denominations of $1,000 compared to minimum denominations of $250,000
for the Old Notes, and (iii) the New Notes will not provide for any increase in
the interest rate thereon. In that regard, the Old Notes provide, among other
things, that, if the Exchange Offer is not consummated by October 29, 1995, the
interest rate borne by the Old Notes following October 29, 1995 will increase by
0.25% per annum until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, Holders of Old Notes will not be entitled to any increase in
the rate of interest thereon or any further registration rights under the
Registration Rights Agreement, except that the Initial Purchasers may have
certain registration rights under limited circumstances. See "Summary -- Certain
Consequences of a Failure to Exchange Old Notes" and "Description of the Old
Notes."
The Exchange Offer is not being made to, nor will the Company accept tenders
for exchange from, holders of Old Notes in any jurisdiction in which the
Exchange Offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction.
TERMS OF THE EXCHANGE
The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $100,000,000 aggregate principal amount of New Notes for a like
aggregate principal amount of Old Notes properly tendered on or prior to the
Expiration Date (as defined below) and not properly withdrawn in accordance with
the procedures described below. The Company will issue, promptly after the
Expiration Date, an aggregate principal amount of up to $100,000,000 of New
Notes in exchange for a like principal amount of outstanding Old Notes tendered
and accepted in connection with the Exchange Offer. Holders may tender their Old
Notes in whole or in part in a principal amount of $1,000 and integral multiples
thereof, provided that if any Old Note is tendered for exchange in part, the
untendered principal amount thereof must be $250,000 or any integral multiple of
$1,000 in excess thereof.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered. As of the date of this Prospectus $100,000,000 aggregate
principal amount of the Old Notes is outstanding.
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Holders of Old Notes do not have any appraisal or dissenters' rights in
connection with the Exchange Offer. Old Notes which are not tendered for
exchange or are tendered but not accepted in connection with the Exchange Offer
will remain outstanding and be entitled to the benefits of the Indenture, but
will not be entitled to any further registration rights under the Registration
Rights Agreement, except that the Initial
Purchasers may have certain registration rights under limited circumstances.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering holder thereof promptly after the Expiration
Date.
Holders who tender Old Notes in connection with the Exchange Offer will not
be required to pay brokerage commissions or fees or, subject to the instructions
in the Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes in connection with the Exchange Offer. The Company will pay all charges
and expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See " -- Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE COMPANY MAKES ANY
RECOMMENDATION TO HOLDERS OF OLD NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ALL OR ANY PORTION OF THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS
OF OLD NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD NOTES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1995 unless the Exchange Offer is extended by the Company (in which
case the term "Expiration Date" shall mean the latest date and time to which the
Exchange Offer is extended).
The Company expressly reserves the right in its sole and absolute
discretion, subject to applicable law, at any time and from time to time, (i) to
delay the acceptance of the Old Notes for exchange, (ii) to terminate the
Exchange Offer (whether or not any Old Notes have theretofore been accepted for
exchange) if the Company determines, in its sole and absolute discretion, that
any of the events or conditions referred to under "-- Certain Conditions to the
Exchange Offer" have occurred or exist or have not been satisfied, (iii) to
extend the Expiration Date of the Exchange Offer and retain all Old Notes
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Notes to withdraw their tendered Old Notes as described under "--
Withdrawal Rights," and (iv) to waive any condition or otherwise amend the terms
of the Exchange Offer in any respect. If the Exchange Offer is amended in a
manner determined by the Company to constitute a material change, or if the
Company waives a material condition of the Exchange Offer, the Company will
promptly disclose such amendment by means of a prospectus supplement that will
be distributed to the registered holders of the Old Notes, and the Company will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company may choose to make any public announcement and
subject to applicable law, the Company shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW NOTES
Upon the terms and subject to the conditions of the Exchange Offer, the
Company will exchange, and will issue to the Exchange Agent, New Notes for Old
Notes validly tendered and not withdrawn (pursuant to the withdrawal rights
described under "-- Withdrawal Rights") promptly after the Expiration Date.
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In all cases, delivery of New Notes in exchange for Old Notes tendered and
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of (i) Old Notes or a book-entry
confirmation of a book-entry transfer of Old Notes into the Exchange Agent's
account at The Depositary Trust Company ("DTC"), (ii) the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Notes into the Exchange Agent's account at DTC.
Subject to the terms and conditions of the Exchange Offer, the Company will
be deemed to have accepted for exchange, and thereby exchanged, Old Notes
validly tendered and not withdrawn as, if and when the Company gives oral or
written notice to the Exchange Agent of the Company's acceptance of such Old
Notes for exchange pursuant to the Exchange Offer. The Exchange Agent will act
as agent for the Company for the purpose of receiving tenders of Old Notes,
Letters of Transmittal and related documents, and as agent for tendering holders
for the purpose of receiving Old Notes, Letters of Transmittal and related
documents and transmitting New Notes to validly tendering holders. Such exchange
will be made promptly after the Expiration Date. If for any reason whatsoever,
acceptance for exchange or the exchange of any Old Notes tendered pursuant to
the Exchange Offer is delayed (whether before or after the Company's acceptance
for exchange of Old Notes) or the Company extends the Exchange Offer or is
unable to accept for exchange or exchange Old Notes tendered pursuant to the
Exchange Offer, then, without prejudice to the Company's rights set forth
herein, the Exchange Agent may, nevertheless, on behalf of the Company and
subject to Rule 14e-1(c) under the Exchange Act, retain tendered Old Notes and
such Old Notes may not be withdrawn except to the extent tendering holders are
entitled to withdrawal rights as described under "-- Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Old Notes will warrant
and agree in the Letter of Transmittal that it has full power and authority to
tender, exchange, sell, assign and transfer Old Notes, that the Company will
acquire good, marketable and unencumbered title to the tendered Old Notes, free
and clear of all liens, restrictions, charges and encumbrances, and the Old
Notes tendered for exchange are not subject to any adverse claims or proxies.
The holder also will warrant and agree that it will, upon request, execute and
deliver any additional documents deemed by the Company or the Exchange Agent to
be necessary or desirable to complete the exchange, sale, assignment, and
transfer of the Old Notes tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD NOTES
VALID TENDER. Except as set forth below, in order for Old Notes to be
validly tendered pursuant to the Exchange Offer, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, must be received by the
Exchange Agent at one of its addresses set forth under "-- Exchange Agent," and
either (i) tendered Old Notes must be received by the Exchange Agent, or (ii)
such Old Notes must be tendered pursuant to the procedures for book-entry
transfer set forth below and a book-entry confirmation must be received by the
Exchange Agent, in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedures set forth below must be complied with.
If less than all of the Old Notes are tendered, a tendering holder should
fill in the amount of Old Notes being tendered in the appropriate box on the
Letter of Transmittal. The entire amount of Old Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING
HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT
REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
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BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account with
respect to the Old Notes at DTC for purposes of the Exchange Offer within two
business days after the date of this Prospectus. Any financial institution that
is a participant in DTC's book-entry transfer facility system may make a
book-entry delivery of the Old Notes by causing DTC to transfer such Old Notes
into the Exchange Agent's account at DTC in accordance with DTC's procedures for
transfers. However, although delivery of Old Notes may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees and any other required documents, must in any
case be delivered to and received by the Exchange Agent at its address set forth
under "-- Exchange Agent" on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
SIGNATURE GUARANTEES. Certificates for the Old Notes need not be endorsed
and signature guarantees on the Letter of Transmittal are unnecessary unless (a)
a certificate for the Old Notes is registered in a name other than that of the
person surrendering the certificate or (b) such registered holder completes the
box entitled "Special Issuance Instructions" or "Special Delivery Instructions"
in the Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Old Notes must be duly endorsed or accompanied by a properly executed bond
power, with the endorsement or signature on the bond power and on the Letter of
Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as an "eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1 to
the Letter of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Old Notes pursuant to
the Exchange Offer and the certificates for such Old Notes are not immediately
available or time will not permit all required documents to reach the Exchange
Agent on or before the Expiration Date, or the procedures for book-entry
transfer cannot be completed on a timely basis, such Old Notes may nevertheless
be tendered, provided that all of the following guaranteed delivery procedures
are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Notes, in proper form for transfer, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees and any other documents required by
the Letter of Transmittal, are received by the Exchange Agent within five
New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Notes in
exchange for Old Notes tendered and accepted for exchange pursuant to the
Exchange Offer will in all cases be made only after timely receipt by the
Exchange Agent of Old Notes, or of a book-entry confirmation with respect to
such Old Notes, and a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees and any
other documents required by the Letter of Transmittal. Accordingly, the delivery
of New Notes might not be made to all tendering holders at the same time, and
will depend upon when Old Notes, book-entry confirmations with respect to Old
Notes and other required documents are received by the Exchange Agent.
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The Company's acceptance for exchange of Old Notes tendered pursuant to any
of the procedures described above will constitute a binding agreement between
the tendering holder and the Company upon the terms and subject to the
conditions of the Exchange Offer.
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Notes will be determined by the Company, in its sole
discretion, whose determination shall be final and binding on all parties. The
Company reserves the absolute right, in its sole and absolute discretion, to
reject any and all tenders determined by it not to be in proper form or the
acceptance of which, or exchange for, may, in the view of counsel to the
Company, be unlawful. The Company also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer as set
forth under "-- Certain Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Notes of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Company's interpretation of the terms and conditions of the Exchange
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding. No tender of Old Notes will be deemed to have been validly
made until all irregularities with respect to such tender have been cured or
waived. Neither the Company, any affiliates or assigns of the Company, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person
should so indicate when signing, and unless waived by the Company, proper
evidence satisfactory to the Company, in its sole discretion, of such person's
authority to so act must be submitted.
A beneficial owner of Old Notes that are held by or registered in the name
of a broker, dealer, commercial bank, trust company or other nominee or
custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF NEW NOTES
The Company is making the Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the Commission as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, the Company has not sought its own interpretive letter and there can be
no assurance that the staff of the Division of Corporation Finance of the
Commission would make a similar determination with respect to the Exchange Offer
as it has in such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporation Finance, and subject
to the two immediately following sentences, the Company believes that New Notes
issued pursuant to this Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further compliance with the registration
and prospectus delivery requirements of the Securities Act, provided that such
New Notes are acquired in the ordinary course of such holder's business and that
such holder is not participating, and has no arrangement or understanding with
any person to participate, in a distribution (within the meaning of the
Securities Act) of such New Notes. However, any holder of Old Notes who is an
"affiliate" of the Company or who intends to participate in the Exchange Offer
for the purpose of distributing New Notes, or any broker-dealer who purchased
Old Notes from the Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (a) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Notes in the Exchange Offer and (c)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old Notes
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer holds Old Notes acquired for
its own account as a result of
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market-making or other trading activities and exchanges such Old Notes for New
Notes, then such broker-dealer must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of such New
Notes.
Each holder of Old Notes who wishes to exchange Old Notes for New Notes in
the Exchange Offer will be required to represent that (i) it is not an
"affiliate" of the Company, (ii) any New Notes to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Notes, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Notes for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, the Company believes that broker-dealers who acquired Old
Notes for their own accounts as a result of market-making activities or other
trading activities ("Participating Broker-Dealers") may fulfill their prospectus
delivery requirements with respect to the New Notes received upon exchange of
such Old Notes (other than Old Notes which represent an unsold allotment from
the original sale of the Old Notes) with a prospectus meeting the requirements
of the Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution with
respect to the resale of such New Notes. Accordingly, this Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer during the period referred to below in connection with resales of
New Notes received in exchange for Old Notes where such Old Notes were acquired
by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Notes
for a period ending 90 days after the Expiration Date (subject to extension
under certain limited circumstances described below) or, if earlier, when all
such New Notes have been disposed of by such Participating Broker-Dealer. See
"Plan of Distribution." Any Participating Broker-Dealer who is an "affiliate" of
the Company may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Notes
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that, upon receipt of notice from the Company of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of New
Notes pursuant to this Prospectus until the Company has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Company has given notice that the sale of the New Notes may
be resumed, as the case may be. If the Company gives such notice to suspend the
sale of the New Notes, it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Notes by the number of days during the period
from and including the date of the giving of such notice to and including the
date when Participating Broker-Dealers shall have received copies of the amended
or supplemented Prospectus necessary to permit resales of the New Notes or to
and including the date on which the Company has given notice that the sale of
New Notes may be resumed, as the case may be.
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WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "-- Exchange Agent"
on or prior to the Expiration Date. Any such notice of withdrawal must specify
the name of the person who tendered the Old Notes to be withdrawn, the aggregate
principal amount of Old Notes to be withdrawn, and (if certificates for such Old
Notes have been tendered) the name of the registered holder of the Old Notes as
set forth on the Old Notes, if different from that of the person who tendered
such Old Notes. If Old Notes have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Old Notes, the
tendering holder must submit the serial numbers shown on the particular Old
Notes to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Old Notes tendered
for the account of an Eligible Institution. If Old Notes have been tendered
pursuant to the procedures for book-entry transfer set forth in "-- Procedures
for Tendering Old Notes," the notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawal of Old Notes, in
which case a notice of withdrawal will be effective if delivered to the Exchange
Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of
tenders of Old Notes may not be rescinded. Old Notes properly withdrawn will not
be deemed validly tendered for purposes of the Exchange Offer, but may be
retendered at any subsequent time on or prior to the Expiration Date by
following any of the procedures described above under "-- Procedures for
Tendering Old Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Company, any affiliates or assigns of the Company, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification. Any Old Notes which have been tendered
but which are withdrawn will be returned to the holder thereof promptly after
withdrawal.
INTEREST ON THE NEW NOTES
Each New Note will bear interest at the rate of 7.35% per annum from the
most recent date to which interest has been paid or duly provided for on the Old
Note surrendered in exchange for such New Note or, if no interest has been paid
or duly provided for on such Old Note, from June 1, 1995. Interest on the New
Notes will be payable semiannually on June 1 and December 1 of each year,
commencing on the first such date following the original issuance date of the
New Notes.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duly provided for
on such Old Notes prior to the original issue date of the New Notes or, if no
such interest has been paid or duly provided for, will not receive any accrued
interest on such Old Notes, and will be deemed to have waived the right to
receive any interest on such Old Notes accrued from and after such Interest
Payment Date or, if no such interest has been paid or duly provided for, from
and after June 1, 1995.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Company will not be required to accept for exchange,
or to exchange, any Old Notes for any New Notes, and, as described below, may
terminate the Exchange Offer (whether or not any Old Notes have theretofore been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the following conditions have occurred or exists or have not
been satisfied:
(a) the Exchange Offer, or the making of any exchange by a holder,
violates any applicable law or any applicable interpretation of the staff of
the Commission;
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(b) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in the Company's judgment, would reasonably be
expected to impair the ability of the Company to proceed with the Exchange
Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Company's judgment, would reasonably be expected to
impair the ability of the Company to proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or California or New York state authorities which, in the Company's
judgment, would reasonably be expected to impair the ability of the Company
to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Company's
judgment, would reasonably be expected to impair the ability of the Company
to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Company, threatened for that purpose.
If the Company determines in its sole and absolute discretion that any of
the foregoing events or conditions has occurred or exists or has not been
satisfied, the Company may, subject to applicable law, terminate the Exchange
Offer (whether or not any Old Notes have theretofore been accepted for exchange)
or may waive any such condition or otherwise amend the terms of the Exchange
Offer in any respect. If such waiver or amendment constitutes a material change
to the Exchange Offer, the Company will promptly disclose such waiver by means
of a prospectus supplement that will be distributed to the registered holders of
the Old Notes, and the Company will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
Bank One, Columbus, NA, has been appointed as Exchange Agent for the
Exchange Offer. Delivery of the Letters of Transmittal and any other required
documents, questions, requests for assistance, and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent as follows:
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY OR HAND:
- -------------------------------- ------------------------------------------
Bank One, Columbus, NA Bank One, Columbus, NA
235 West Schrock Road 235 West Schrock Road
Columbus, OH 43271-0184 Westerville, OH 43081
or or
Bank One, Columbus, NA Bank One, Columbus, NA
c/o First Chicago Trust Company c/o First Chicago Trust Company
of New York of New York
Attn: Corporate Trust Department Attn: Corporate Trust Department
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, NY 10005 New York, NY 10005
</TABLE>
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(614) 248-4856 (Ohio)
(212) 240-8862 (NY)
FACSIMILE TRANSMISSIONS:
(614) 248-7238 (Ohio)
(212) 240-8938 (NY)
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Delivery to other than one of the above addresses or facsimile numbers will not
constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Old Notes, and in handling or tendering for their
customers.
Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith. If, however, New Notes are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Notes tendered, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes in connection with the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer.
DESCRIPTION OF THE NEW NOTES
GENERAL
The Old Notes were issued and the New Notes are to be issued under the
Indenture dated as of August 1, 1989 (the "Indenture") between the Company and
Bank One, Columbus, NA, as successor trustee (the "Trustee"). The summaries of
certain provisions of the Indenture, the Old Notes and the New Notes set forth
below and under "Description of the Old Notes" do not purport to be complete and
are subject to and are qualified in their entirety by reference to all of the
provisions of the Indenture and the forms of the certificates evidencing the Old
Notes and the New Notes, which documents have been filed or incorporated by
reference as exhibits to the Registration Statement and are incorporated herein
by reference. See "Available Information." Certain capitalized terms used herein
are defined in the Indenture. As used in this "Description of the New Notes,"
all references to the "Company" shall mean Consolidated Freightways, Inc.,
excluding, unless the context shall otherwise require, its subsidiaries.
The Indenture does not limit the aggregate principal amount of debt
securities which may be issued thereunder and provides that debt securities may
be issued thereunder from time to time in one or more series.
The Old Notes and the New Notes will constitute a single series of debt
securities under the Indenture. If the Exchange Offer is consummated, holders of
the Old Notes who do not exchange their Old Notes for New Notes will vote
together with the holders of New Notes for all relevant purposes under the
Indenture. In that regard, the Indenture requires that certain actions by the
holders thereunder (including acceleration following an Event of Default) must
be taken, and certain rights must be exercised, by specified minimum percentages
of the aggregate principal amount of the outstanding debt securities of the
relevant series. In determining whether holders of the requisite percentage in
principal amount have given any notice, consent or waiver or taken any other
action permitted under the Indenture, any Old Notes which remain outstanding
after the Exchange Offer will be aggregated with the New Notes and the holders
of such Old Notes and New Notes will vote together as a single series for all
such purposes. Accordingly, all references herein to specified percentages in
aggregate principal amount of the outstanding Notes shall be deemed to mean, at
any time after the Exchange Offer is consummated, such percentage in aggregate
principal amount of the Old Notes and New Notes then outstanding.
The New Notes and the Old Notes are sometimes referred to as, collectively,
the "Notes" and, individually, a "Note."
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<PAGE>
The New Notes will be unsecured and unsubordinated obligations of the
Company and will be limited to an aggregate principal amount of $100,000,000.
Each New Note will bear interest at the rate of 7.35% per annum from the most
recent date to which interest has been paid or duly provided for on the Old Note
surrendered in exchange for such New Note or, if no interest has been paid or
duly provided for on such Old Note, from June 1, 1995, payable semiannually on
June 1 and December 1 of each year (each, an "Interest Payment Date"),
commencing with the first Interest Payment Date occurring after the date of
original issuance of such New Note, to the person in whose name such New Note is
registered at the close of business on the May 15 or November 15 next preceding
such Interest Payment Date. Interest on the New Notes will be computed on the
basis of a 360-day year of twelve 30-day months. The New Notes will mature on
June 1, 2005. The New Notes may not be redeemed prior to maturity and will not
be subject to any sinking fund.
The New Notes will not provide for any increase in the interest rate
thereon. For a discussion of the circumstances in which the interest rate on the
Old Notes may be temporarily increased, see "Description of the Old Notes."
FORM, DENOMINATION AND REGISTRATION
The New Notes will be issued only in fully registered form, without coupons,
in denominations of $1,000 and any integral multiple of $1,000 in excess
thereof.
Principal and interest on the New Notes will be payable, and New Notes may
be registered for transfer or exchange, at an office or agency maintained by the
Company in New York City, except that, at the option of the Company, interest
may be paid by check mailed to the persons entitled thereto. No service charge
may be made to a holder for any registration of transfer or exchange of the New
Notes, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
In case any New Note shall become mutilated, defaced, destroyed, lost or
stolen, the Company will execute and, upon the Company's request, the Trustee
will authenticate and deliver a new New Note, of like tenor and equal principal
amount in exchange and substitution for such New Note (upon surrender and
cancellation thereof) or in lieu of and substitution for such New Note. In case
such New Note is destroyed, lost or stolen, the applicant for a substituted New
Note shall furnish to the Company and the Trustee such security or indemnity as
may be required by them to hold each of them harmless, and, in every case of
destruction, loss or theft of such New Note, the applicant shall also furnish to
the Company or the Trustee satisfactory evidence of the destruction, loss or
theft of such New Note and of the ownership thereof. Upon the issuance of any
substituted New Note, the Company may require the payment by the registered
holder thereof of a sum sufficient to cover fees and expenses connected
therewith.
RANKING; HOLDING COMPANY STRUCTURE
The Old Notes are and the New Notes will be unsecured unsubordinated
obligations of the Company and rank and will rank on a parity in right of
payment with all other unsecured and unsubordinated indebtedness of the Company
for borrowed money.
The Old Notes are and the New Notes will be obligations exclusively of the
Company. The Company is a holding company substantially all of whose
consolidated assets are held by its subsidiaries. Accordingly, the cash flow of
the Company and the consequent ability to service its debt, including the Notes,
are largely dependent upon the earnings of such subsidiaries.
Because the Company is a holding company, the Old Notes are and the New
Notes will be effectively subordinated to all existing and future indebtedness,
trade payables, guarantees, lease obligations and letter of credit obligations
of the Company's subsidiaries. Therefore, the Company's rights and the rights of
its creditors, including the holders of the Notes, to participate in the assets
of any subsidiary upon the latter's liquidation or reorganization will be
subject to the prior claims of such subsidiary's creditors, except to the extent
that the Company may itself be a creditor with recognized claims against the
subsidiary, in which case the claims of the Company would still be effectively
subordinate to any security interest in, or mortgages or other liens on, the
assets of such subsidiary and would be subordinate to any indebtedness of such
subsidiary senior to that held by the Company. As of March 31, 1995, (i) the
Company had approximately $322 million
26
<PAGE>
of outstanding indebtedness (including TASP debt guaranteed by the Company (see
"Capitalization")) and approximately $133 million of outstanding letters of
credit, and (ii) the Company's subsidiaries had approximately $133 million of
outstanding indebtedness and obligations under capital leases and approximately
$88 million of outstanding letters of credit; no drawings were outstanding under
any such letters of credit at that date. In addition, certain subsidiaries of
the Company are guarantors under the Credit Agreement, including letters of
credit issued thereunder. At December 31, 1994, the Company's subsidiaries were
subject to long-term non-cancelable operating leases requiring future minimum
lease payments of approximately $501 million. Although certain debt instruments
to which the Company and its subsidiaries are parties impose limitations on the
incurrence of additional indebtedness, both the Company and its subsidiaries
retain the ability to incur substantial additional indebtedness and lease and
letter of credit obligations.
CERTAIN COVENANTS OF THE COMPANY
The Indenture does not limit the amount of indebtedness or lease obligations
that may be incurred by the Company and its subsidiaries. The Indenture does not
contain provisions which would give holders of the Notes the right to require
the Company to repurchase their Notes in the event of a decline in the credit
rating of the Company's debt securities resulting from a takeover,
recapitalization or similar restructuring. Holders of certain of the Company's
outstanding indebtedness, including its 9 1/8% Notes due 1999, the TASP Notes
and indebtedness under the Credit Agreement, have the right to require the
Company to repurchase or repay such indebtedness upon the occurrence of certain
changes in control of the Company or similar events or declines in the credit
rating on such indebtedness. See "Capitalization."
LIMITATION ON LIENS. In the Indenture, the Company covenants that, so long
as any of the Notes remain outstanding, it will not, nor will it permit any
Restricted Subsidiary (as defined below) to, create, assume or guarantee any
Debt (as defined below) that is secured by a mortgage, pledge, lien, security
interest or other encumbrance (a "Lien"), on any property or shares of capital
stock or Debt of the Company or any Restricted Subsidiary without in any such
case effectively providing, concurrently with the creation, assumption or
guarantee of any such Debt, that the Notes shall, so long as such other Debt is
so secured (and, if the Company shall so determine, any other existing Debt (or
Debt thereafter in existence) created, assumed or guaranteed by the Company or
any Restricted Subsidiary), be secured by any such Lien equally and ratably with
or prior to the Debt thereby secured; provided that Debt secured by such Liens
may be created, assumed or guaranteed if immediately after giving effect thereto
the aggregate amount of all such Debt of the Company and its Restricted
Subsidiaries (not including Debt described in (i) through (vii) below) does not
exceed 15% of Consolidated Net Tangible Assets (as defined below).
The foregoing restrictions shall not apply to Debt secured by (i) Liens on
property of the Company or any Restricted Subsidiary existing on the date of the
Indenture (August 1, 1989); (ii) certain Liens on property existing at the time
of acquisition thereof; (iii) Liens in favor of the Company or a Restricted
Subsidiary securing Debt of the Company or a Restricted Subsidiary; (iv) Liens
created in connection with tax assessments or legal proceedings and mechanic's
and materialman's liens and other similar liens created in the ordinary course
of business; (v) Liens on property of the Company or any Restricted Subsidiary
(except Liens on the capital stock or Debt of the Company or any Restricted
Subsidiary) in favor of the United States of America or any state thereof, or
any agency or political subdivision of either, or in favor of any other country
or agency or political subdivision thereof, in each case to secure payments
pursuant to contract or statute or to secure Debt created, assumed or guaranteed
for the purpose of financing all or any part of the purchase price or the cost
of construction or improvement of the property subject to such Liens, including
Liens incurred in connection with pollution control, industrial revenue bond or
other similar financings; (vi) certain purchase money Liens on property of the
Company or any Restricted Subsidiary that constitutes a fixed asset or a surface
or air transportation vehicle used in the freight business securing all or any
part of the purchase price thereof, or any Debt incurred to finance the purchase
price or the cost of construction or improvement thereof for which a written
commitment was executed within 180 days after acquisition or the completion of
construction or improvement, as the case may be; or (vii) certain permitted
extensions, renewals or replacements (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing
clauses (i) through (vi), inclusive.
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<PAGE>
CONSOLIDATION, MERGER AND SALE OF ASSETS. The Indenture provides that the
Company may not (i) consolidate with or merge into any Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, or (ii) permit any Person to consolidate with or merge into the Company,
or convey, transfer or lease its properties and assets substantially as an
entirety to the Company, unless (a) in the case of (i) above, such Person is
organized and existing under the laws of the United States, any State thereof or
the District of Columbia and shall expressly assume the due and punctual payment
of the principal of and interest on all of the Notes and the performance of the
Company's obligations under the Indenture and the Notes; (b) immediately after
giving effect to such transaction no Event of Default, and no event which after
notice or lapse of time or both would become an Event of Default, shall have
happened and be continuing; and (c) certain other conditions are met.
DEFINITION OF CERTAIN TERMS. The term "Consolidated Net Tangible Assets" as
used in the Indenture means, as of any particular time, the aggregate amount of
the Consolidated Assets (as defined in the Indenture) of the Company and its
consolidated Subsidiaries (as defined in the Indenture) (less depreciation,
amortization and other applicable reserves and other properly deductible items)
after deducting therefrom (i) all current liabilities, and (ii) all goodwill,
tradenames, trademarks, patents, debt discount and expense and other
intangibles, in each case net of applicable amortization, all as shown on the
Company's most recent consolidated financial statements prepared in accordance
with generally accepted accounting principles. The term "Restricted Subsidiary"
as used in the Indenture means any majority-owned or controlled Subsidiary of
the Company or any of its Subsidiaries (A) substantially all of the operating
assets of which are located or the principal business of which is carried on in
the United States, Puerto Rico, the U.S. Virgin Islands or Canada, and (B) the
assets of which have a gross book value (without deduction of any depreciation,
amortization and other applicable reserves) which exceeds 1% of the Company's
Consolidated Assets (except for any Subsidiary which in the opinion of the
Company's Board of Directors is not of material importance to the total business
conducted by the Company and its Subsidiaries taken as a whole). The term "Debt"
as used in the Indenture means (a) any liability of the Company or any
Restricted Subsidiary (1) for borrowed money, or under any reimbursement
obligation relating to a letter of credit, or (2) evidenced by a bond, note,
debenture or similar instrument, or (3) for payment obligations arising under
any conditional sale or other title retention arrangement (including a purchase
money obligation) given in connection with the acquisition of any businesses,
properties or assets of any kind, or (4) for the payment of money relating to a
capitalized lease obligation; (b) any liability of others described in the
preceding clause (a) that the Company or any Restricted Subsidiary has
guaranteed or that is otherwise its legal liability; and (c) any amendment,
supplement, modification, deferral, renewal, extension or refunding of any
liability of the types referred to in clauses (a) and (b) above.
EVENTS OF DEFAULT
An Event of Default with respect to the Notes is defined in the Indenture as
being: (i) default for 30 days in payment of any interest with respect to any
Note; (ii) default in payment of principal with respect to any Note when due
upon maturity or otherwise; (iii) default by the Company in the performance, or
breach, of any other covenant or warranty in the Indenture or any Note which
shall not have been remedied for a period of 90 days after notice to the Company
by the Trustee or the holders of not less than 25% in aggregate principal amount
of the Notes then outstanding; (iv) acceleration of the maturity of any single
outstanding issue of Debt of the Company or any Restricted Subsidiary with an
outstanding principal amount in excess of $25,000,000, as a result of an event
of default thereunder, which acceleration is not annulled or which Debt is not
discharged within 30 days thereafter or such longer period during which the
Company is contesting in good faith such acceleration; (v) default in payment
(after the expiration of any applicable grace period) of any portion of the
principal or any premium with respect to any single outstanding issue of Debt of
the Company or any Restricted Subsidiary with an outstanding principal amount in
excess of $25,000,000, which default is not cured or which Debt is not
discharged within 30 days thereafter or such longer period during which the
Company is contesting in good faith such default; or (vi) certain events of
bankruptcy, insolvency or reorganization of the Company. The Indenture provides
that the Trustee may withhold notice to the holders of the Notes of any default
with respect thereto (except a default in payment of principal or interest) if
the Trustee considers it in the interest of the holders to do so.
28
<PAGE>
The Indenture provides that if an Event of Default with respect to the Notes
shall have occurred and be continuing, the Trustee or the holders of at least
25% in principal amount of the Notes then outstanding may declare the principal
amount of all the Notes to be due and payable immediately, but upon certain
conditions such declaration may be annulled and past defaults (except for
payment defaults and certain other defaults) may be waived by the holders of a
majority in principal amount of the Notes then outstanding.
Subject to the provisions of the Indenture requiring the Trustee, during an
Event of Default, to act with the requisite standard of care, the Trustee is
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the holders of Notes unless such holders
have offered the Trustee reasonable indemnity. Subject to the foregoing, holders
of a majority in principal amount of the Notes then outstanding shall have the
right, subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee under the
Indenture. The Indenture requires the annual filing by the Company with the
Trustee of a certificate as to the absence of default and as to compliance with
the terms of the Indenture.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in principal amount of the
outstanding Notes, to modify the rights of the holders of the Notes under the
Indenture or any supplemental indenture or the terms of the Notes, provided that
no such modification shall, among other things, (i) change the stated maturity
of any Notes or reduce the principal amount thereof, or reduce the rate or
change the time of payment of interest thereon, or change any place where, or
the currency in which, any Notes are payable, or impair the holder's right to
enforce the payment of any Notes, or (ii) reduce the aforesaid percentage of
Notes, the consent of the holders of which is required for any such
modification; without in each such case obtaining the consent of the holder of
each outstanding Note so affected. The Indenture also contains provisions
permitting the Company and the Trustee, without the consent of the holders of
any Notes, to modify the Indenture or any supplemental indenture in order to,
among other things, (a) add to the Events of Default or the covenants of the
Company for the benefit of the holders of Notes, or (b) cure any ambiguity or
correct or supplement any provision therein which may be inconsistent with other
provisions therein, or to make any other provisions with respect to matters or
questions arising under the Indenture, provided that such actions shall not
adversely affect the interests of the holders of the Notes in any material
respect.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Company may elect either (A) to defease and
be discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of the Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold moneys for payment in trust)
("defeasance"), or (B) to be released from its obligations with respect to the
Notes described above under "-- Certain Covenants of the Company -- Limitation
on Liens" ("covenant defeasance"), upon the irrevocable deposit with the Trustee
(or other qualifying trustee), in trust for such purpose, of money, and/or U. S.
Government Obligations (as defined in the Indenture) which through the payment
of principal and interest in accordance with their terms will provide money, in
an amount sufficient to pay the principal of and interest on the Notes on the
due dates therefor, whether upon maturity or otherwise. Such defeasance or
covenant defeasance shall only be effective if, among other things, (i) it shall
not result in a breach or violation of, or constitute a default under, the
Indenture or any other agreement to which the Company or any Restricted
Subsidiary is a party or is bound, and (ii) the Company has delivered to the
Trustee an opinion of counsel (as specified in the Indenture) to the effect that
the holders of the Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance or covenant defeasance, as
the case may be, and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred. It shall also be a condition
to the effectiveness of such defeasance (but not covenant defeasance) that no
Event of Default or event which with notice or lapse of time or both would
become an Event of Default with respect to the Notes shall have occurred and
been continuing on the date of, or during the period ending on the 91st day
after the date of, such deposit into trust.
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GOVERNING LAW
The Indenture and the Notes will be governed by, and construed in accordance
with, the laws of the State of New York.
REGARDING THE TRUSTEE
The Trust Indenture Act of 1939 contains limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases or to realize on certain property received by it in respect of
any such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company and its subsidiaries from time to time,
provided that if the Trustee acquires any conflicting interest it must eliminate
such conflict upon the occurrence of an Event of Default, or else resign.
DESCRIPTION OF THE OLD NOTES
The terms of the Old Notes are identical in all material respects to the New
Notes, except that (i) the Old Notes have not been registered under the
Securities Act, are subject to certain restrictions on transfer and are entitled
to certain registration rights under the Registration Rights Agreement (which
rights will terminate upon consummation of the Exchange Offer, except to the
extent that the Initial Purchasers may have certain registration rights under
limited circumstances); (ii) the New Notes are issuable in minimum denominations
of $1,000 and integral multiples thereof compared to minimum denominations of
$250,000 and integral multiples of $1,000 in excess thereof for the Old Notes;
and (iii) the New Notes will not provide for any increase in the interest rate
thereon. In that regard, the Old Notes provide that, in the event that the
Exchange Offer is not consummated or a shelf registration statement (the "Shelf
Registration Statement") with respect to the resale of the Old Notes is not
declared effective on or prior to October 29, 1995, the interest rate on the Old
Notes will increase by 0.25% per annum following October 29, 1995; provided,
however, that if the Company requests holders of Old Notes to provide certain
information called for by the Registration Rights Agreement for inclusion in any
such Shelf Registration Statement, then Old Notes owned by holders who do not
deliver such information to the Company or who do not provide comments on the
Shelf Registration Statement when required pursuant to the Registration Rights
Agreement will not be entitled to any such increase in the interest rate. Upon
the consummation of the Exchange Offer or the effectiveness of a Shelf
Registration Statement, as the case may be, after October 29, 1995, the interest
rate on any Old Notes which remain outstanding will be reduced, from the date of
such consummation or effectiveness, as the case may be, to 7.35% per annum and
the Old Notes will not thereafter be entitled to any increase in the interest
rate thereon. The New Notes are not entitled to any such increase in the
interest rate thereon. In addition, the Old Notes and the New Notes will
constitute a single series of debt securities under the Indenture. See
"Description of the New Notes -- General." Accordingly, holders of Old Notes
should review the information set forth under "Summary -- Certain Consequences
of a Failure to Exchange Old Notes" and "Description of the New Notes."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain United States Federal income tax
considerations to holders of the New Notes who are subject to U.S. net income
tax with respect to the New Notes ("U.S. persons") and who will hold the New
Notes as capital assets. There can be no assurance that the U.S. Internal
Revenue Service (the "IRS") will take a similar view of the purchase, ownership
or disposition of the New Notes. This discussion is based upon the provisions of
the Internal Revenue Code of 1986, as amended, and regulations, rulings and
judicial decisions now in effect, all of which are subject to change. It does
not include any description of the tax laws of any state, local or foreign
governments or any estate or gift tax considerations that may be applicable to
the New Notes or holders thereof. It does not discuss all aspects of U.S.
Federal income taxation that may be relevant to a particular investor in light
of his particular investment circumstances or to certain types of investors
subject to special treatment under the U.S. Federal income tax laws (for
example, dealers in securities or currencies, S corporations, life insurance
companies, tax-exempt organizations, taxpayers subject to the alternative
minimum tax and non-U.S. persons) and also does not discuss New Notes held as a
hedge against currency risks or as part of a straddle with other investments or
as
30
<PAGE>
part of a "synthetic security" or other integrated investment (including a
"conversion transaction") comprised of a New Note and one or more other
investments, or situations in which the functional currency of the holders is
not the U.S. dollar.
Holders of Old Notes contemplating acceptance of the Exchange Offer should
consult their own tax advisors with respect to their particular circumstances
and with respect to the effects of state, local or foreign tax laws to which
they may be subject.
EXCHANGE OF NOTES
The exchange of Old Notes for New Notes should not be a taxable event to
holders for federal income tax purposes. The exchange of Old Notes for the New
Notes pursuant to the Exchange Offer should not be treated as an "exchange" for
federal income tax purposes because the New Notes should not be considered to
differ materially in kind or extent from the Old Notes. If, however, the
exchange of the Old Notes for the New Notes were treated as an exchange for
federal income tax purposes, such exchange should constitute a recapitalization
for federal income tax purposes. Accordingly, the New Notes should have the same
issue price as the Old Notes, and a holder should have the same adjusted basis
and holding period in the New Notes as it had in the Old Notes immediately
before the exchange.
INTEREST ON THE NEW NOTES
A holder of a New Note will be required to report as ordinary interest
income for U.S. Federal income tax purposes interest earned on the New Note in
accordance with the holder's method of tax accounting.
DISPOSITION OF NEW NOTES
A holder's tax basis for a New Note generally will be the holder's purchase
price for the Old Note. Upon the sale, exchange, redemption, retirement or other
disposition of a New Note, a holder will recognize gain or loss equal to the
difference (if any) between the amount realized and the holder's tax basis in
the New Note. Such gain or loss will be long-term capital gain or loss if the
New Note has been held for more than one year and otherwise will be short-term
capital gain or loss (with certain exceptions to the characterization as capital
gain if the New Note was acquired at a market discount).
BACKUP WITHHOLDING
A holder of a New Note may be subject to backup withholding at the rate of
31% with respect to interest paid on the New Note and proceeds from the sale,
exchange, redemption or retirement of the New Note, unless such holder (a) is a
corporation or comes within certain other exempt categories and, when required,
demonstrates that fact or (b) provides a correct taxpayer identification number,
certifies as to no loss of exemption from backup withholding and otherwise
complies with applicable requirements of the backup withholding rules. A holder
of a New Note who does not provide the Company with his correct taxpayer
identification number may be subject to penalties imposed by the IRS.
A holder of a New Note who is not a U.S. person will generally be exempt
from backup withholding and information reporting requirements, but may be
required to comply with certification and identification procedures in order to
obtain an exemption from backup withholding and information reporting.
Any amount paid as backup withholding will be creditable against the
holder's U.S. Federal income tax liability.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account in connection
with the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by Participating Broker-
Dealers during the period referred to below in connection with resales of New
Notes received in exchange for Old Notes if such Old Notes were acquired by such
Participating Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities. The Company has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Notes
for a period ending 90 days after the Expiration
31
<PAGE>
Date (subject to extension under certain limited circumstances described herein)
or, if earlier, when all such New Notes have been disposed of by such
Participating Broker-Dealer. See "The Exchange Offer -- Resales of New Notes."
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. New Notes received by broker-dealers for their own
accounts in connection with the Exchange Offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Notes or a combination
of such methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or at negotiated prices. Any
such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such New Notes. Any
broker-dealer that resells New Notes that were received by it for its own
account in connection with the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of New Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the New Notes will be passed upon
for the Company by Brown & Wood, San Francisco, California.
EXPERTS
The audited consolidated financial statements and schedule incorporated by
reference in this Prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated herein by
reference in reliance upon the authority of said firm as experts in giving said
reports.
32
<PAGE>
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED AND
INCORPORATED BY REFERENCE 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 ANY OF ITS AFFILIATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE SECURITIES
OFFERED HEREBY BY ANY PERSON IN ANY JURISDICTION IN WHICH OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS OR ANY
DOCUMENT INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT
TO THE DATE HEREOF OR THEREOF, AS THE CASE MAY BE.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 4
Incorporation of Certain Documents by
Reference..................................... 4
Summary........................................ 5
Use of Proceeds................................ 12
Capitalization................................. 12
Selected Consolidated Financial Data........... 13
Business of the Company........................ 14
The Exchange Offer............................. 17
Description of the New Notes................... 25
Description of the Old Notes................... 30
Certain United States Federal Income Tax
Considerations................................ 30
Plan of Distribution........................... 31
Legal Matters.................................. 32
Experts........................................ 32
</TABLE>
[LOGO]
CONSOLIDATED
FREIGHTWAYS, INC.
OFFER TO EXCHANGE ITS
7.35% NOTES DUE 2005
WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7.35% NOTES DUE 2005
---------------------
PROSPECTUS
---------------------
, 1995
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
- -------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 102(b)(7) of the Delaware General Corporation Law
(the "DGCL"), the Company's Certificate of Incorporation, as amended, eliminates
to the fullest extent permitted by Delaware law the personal liability of its
directors to the Company or its stockholders for monetary damages for any breach
of fiduciary duty as a director.
The Company's By-laws, as amended (the "By-laws"), provide that each person
who was or is made a party or is threatened to be made a party to or is involved
in any threatened, pending or completed action, suit or proceeding by reason of
the fact that he or she is or was a director, officer, employee or agent of the
Company or of another enterprise, serving as such at the request of the Company,
shall be indemnified and held harmless by the Company to the fullest extent
permitted under the DGCL; provided, however, that except as to actions to
enforce indemnification rights, the Company shall indemnify any such person
seeking indemnification in connection with an action, suit or proceeding (or
part thereof) initiated by such person only if the action, suit or proceeding
(or part thereof) was authorized by the Board of Directors of the Company. When
indemnification is authorized by the Company's By-laws, the director, officer,
employee or agent shall be indemnified for expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred by him or her
in connection therewith. The Company's By-laws also provide that expenses
incurred by an officer or director (acting in his or her capacity as such) in
defending a proceeding shall be paid by the Company in advance of final
disposition of the proceeding; provided, however, that if required by the DGCL,
the officer or director shall deliver to the Company an undertaking by the
officer or director to repay such expenses if it is ultimately determined that
he or she is not entitled to be indemnified by the Company. The Company's By-
laws also provide that in other circumstances expenses may be advanced upon such
terms and conditions as the Board of Directors deems appropriate.
The Company's By-laws further provide that the right to indemnification
granted thereunder shall be a contract right for the benefit of the Company's
directors, officers, employees and agents. The Company's By-laws also authorize
actions against the Company to enforce the indemnification rights provided by
the By-laws, subject to the Company's right to assert a defense in any such
action that the claimant has not met the standards of conduct that make it
permissible under the DGCL for the Company to indemnify the claimant for the
amount claimed, and the Company shall bear the burden of proving any such
defense.
Under Section 145 of the DGCL, a corporation may provide indemnification to
directors, officers, employees and agents may be provided against judgments,
penalties, fines, settlements and reasonable expenses (including attorneys'
fees) incurred in the defense or settlement of a third party action, or against
reasonable expenses (including attorneys' fees) in the defense or settlement of
a derivative action, provided there is a determination by a majority vote of a
quorum of disinterested directors, a committee of directors, independent legal
counsel, or a majority vote of stockholders that a person seeking
indemnification acted in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation, and, in the case of a
criminal proceeding, with no reasonable cause to believe his or her conduct was
unlawful. However, Section 145 also states that no indemnification may be made
in derivative actions where such person is adjudged liable to the corporation,
unless, and only to the extent, that a court determines upon application that
such person is fairly and reasonably entitled to indemnity for such expenses
which the court deems proper. Section 145 also permits indemnification of
expenses which the court deems proper and provides that indemnification of
expenses actually and reasonably incurred shall be provided when the individual
being indemnified has successfully defended the action on the merits or
otherwise in any action, suit or proceeding. The indemnification rights provided
by statute in Delaware are not deemed to be exclusive of any other rights which
those seeking indemnification may be entitled under any bylaw, agreement or
otherwise.
II-1
<PAGE>
The Company's By-laws also authorize the Company to purchase and maintain
insurance to protect itself and any person who is or was a director, officer,
employee or agent of the Company against any liability, expense or loss incurred
by or asserted against such person, whether or not the Company would have the
power to indemnify such person against such liability, expense or loss under
applicable law or the Company's By-laws. The Company presently maintains a
directors' and officers' liability insurance policy which insures directors and
officers of the Company and those of certain of its subsidiaries.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------
<C> <S>
4.1 Indenture dated as of August 1, 1989 between the Registrant and Security Pacific National Bank, as
trustee. (Exhibit 4.1 as filed on Form SE dated March 20, 1990*).
4.2 Registration Rights Agreement, dated as of June 1, 1995, between the Registrant and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., J.P. Morgan
Securities Inc. and Salomon Brothers Inc.
4.3 Form of Security for 7.35% Notes due 2005 originally issued by Consolidated Freightways, Inc. on
June 1, 1995.
4.4 Form of Security for 7.35% Notes due 2005 to be issued by Consolidated Freightways, Inc. and
registered under the Securities Act of 1933.
5 Opinion of Brown & Wood.
12 Statement re computation of ratio of earnings to fixed charges.
23.1 Consent of Independent Public Accountants (included on page II-6).
23.2 Consent of Counsel (included in Exhibit 5).
24 Powers of Attorney (included on page II-4).
25 Statement of eligibility of trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
<FN>
- ------------------------
* Previously filed with the Securities and Exchange Commission and incorporated
herein by reference.
</TABLE>
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
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 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.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
II-2
<PAGE>
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Palo Alto, State of
California, on the 26th day of June, 1995.
CONSOLIDATED FREIGHTWAYS, INC.
By /s/ EBERHARD G.H. SCHMOLLER
------------------------------------
Eberhard G.H. Schmoller
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL
POWER OF ATTORNEY
Each officer or director whose signature appears below hereby appoints each
of Eberhard G.H. Schmoller and David F. Morrison his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to sign on his behalf, as an individual and in the capacity stated below, any
amendment or post-effective amendment to this registration statement, to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing which such attorney-in-fact and agent may deem appropriate
or necessary, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ---------------------------------------- ---------------
<C> <S> <C>
/s/ DONALD E. MOFFITT Chairman of the Board, President and
------------------------------------------- Chief Executive Officer (Principal June 26, 1995
Donald E. Moffitt Executive Officer)
/s/ GREGORY L. QUESNEL Executive Vice President and Chief
------------------------------------------- Financial Officer (Principal Financial June 26, 1995
Gregory L. Quesnel and Principal Accounting Officer)
/s/ ROBERT ALPERT
------------------------------------------- Director June 26, 1995
Robert Alpert
------------------------------------------- Director
Earl F. Cheit
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ---------------------------------------- ---------------
<C> <S> <C>
/s/ G. ROBERT EVANS
------------------------------------------- Director June 26, 1995
G. Robert Evans
/s/ MARGARET G. GILL
------------------------------------------- Director June 26, 1995
Margaret G. Gill
/s/ ROBERT JAUNICH II
------------------------------------------- Director June 26, 1995
Robert Jaunich II
------------------------------------------- Director
Gerhard E. Liener
/s/ RICHARD B. MADDEN
------------------------------------------- Director June 26, 1995
Richard B. Madden
/s/ RONALD E. POELMAN
------------------------------------------- Director June 26, 1995
Ronald E. Poelman
/s/ ROBERT D. ROGERS
------------------------------------------- Director June 26, 1995
Robert D. Rogers
/s/ WILLIAM D. WALSH
------------------------------------------- Director June 26, 1995
William D. Walsh
/s/ ROBERT P. WAYMAN
------------------------------------------- Director June 26, 1995
Robert P. Wayman
</TABLE>
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated January 27, 1995
included and incorporated by reference in Consolidated Freightways, Inc.'s Form
10-K for the year ended December 31, 1994 and to all references to our firm
included in this Registration Statement.
/s/ Arthur Andersen LLP
Portland, Oregon,
June 26, 1995
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- --------------------------------------------------------------------------------------------------------
<S> <C>
4.1 Indenture dated as of August 1, 1989 between the Registrant and Security Pacific National Bank, as
trustee. (Exhibit 4.1 as filed on Form SE dated March 20, 1990*).
4.2 Registration Rights Agreement, dated as of June 1, 1995, between the Registrant and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., J.P. Morgan Securities Inc.
and Salomon Brothers Inc.
4.3 Form of Security for 7.35% Notes due 2005 originally issued by Consolidated Freightways, Inc. on June 1,
1995.
4.4 Form of Security for 7.35% Notes due 2005 to be issued by Consolidated Freightways, Inc. and registered
under the Securities Act of 1933.
5 Opinion of Brown & Wood.
12 Statement re computation of ratio of earnings to fixed charges.
23.1 Consent of Independent Public Accountants (included on page II-6).
23.2 Consent of Counsel (included in Exhibit 5).
24 Powers of Attorney (included on page II-4).
25 Statement of eligibility of trustee.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
</TABLE>
- ------------------------
* Previously filed with the Securities and Exchange Commission and incorporated
herein by reference.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of June 1, 1995
among
CONSOLIDATED FREIGHTWAYS, INC.,
Issuer,
and
MERRILL LYNCH & CO.,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
GOLDMAN, SACHS & CO.,
J.P. MORGAN SECURITIES INC. AND
SALOMON BROTHERS INC,
Initial Purchasers
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered as of June 1, 1995, among CONSOLIDATED FREIGHTWAYS, INC., a Delaware
corporation (the "Company"), and MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, GOLDMAN, SACHS & CO., J.P. MORGAN SECURITIES INC.
and SALOMON BROTHERS INC (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated May
25, 1995 among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $100,000,000 principal amount of the Company's
7.35% Notes due 2005 (the "Debt Securities"). In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree, and all
other Holders (as defined below) of Registrable Securities from time to time, by
their acceptance thereof, shall be conclusively deemed to have agreed, as
follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"CLOSING DATE" shall mean the date on which the Closing Time (as
defined in the Purchase Agreement) occurs.
"COMPANY" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"DEBT SECURITIES" shall have the meaning set forth in the preamble.
<PAGE>
2
"DEPOSITARY" shall mean the Trustee, or any other exchange agent
appointed by the Company.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"EXCHANGE SECURITIES" shall mean 7.35% Notes due 2005 issued by the
Company under the Indenture containing terms identical in all material
respects to the Debt Securities (except that (i) interest thereon shall
accrue from the last date on which interest was paid or duly provided for
on the Debt Securities or, if no such interest has been paid, from the date
of their original issue, (ii) the transfer restrictions thereon shall be
eliminated, (iii) certain provisions relating to an increase in the stated
rate of interest thereon shall be eliminated and (iv) the denominations
thereof shall be $1000 and integral multiples of $1000), to be offered to
Holders of Debt Securities in exchange for Debt Securities pursuant to the
Exchange Offer.
"HOLDERS" shall mean each of the Initial Purchasers, for so long as it
owns any Registrable Securities, and each of its successors, assigns and
direct and indirect transferees who shall at the time be owners of
Registrable Securities under the Indenture; provided that the term Holder
shall exclude any underwriter who purchased Registrable Securities for
distribution in an underwritten public offering pursuant to an effective
Registration Statement.
"INDENTURE" shall mean the Indenture relating to the Debt Securities
dated as of August 1, 1989 between the Company and Bank One, Columbus, NA,
as successor trustee, as the same may be amended from time to time in
accordance with the terms thereof, or such other indenture as may be
reasonably acceptable to Merrill Lynch.
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; PROVIDED
that whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is
<PAGE>
3
required hereunder, Registrable Securities held by the Company shall be
disregarded in determining whether such consent or approval was given by
the Holders of such required percentage or amount; and PROVIDED, FURTHER,
that whenever the consent or approval of Holders of Registrable Notes is
required hereunder with regard to matters related to an underwritten
registration or similar offering or with regard to matters pertaining to a
Registration Statement, Registrable Securities held by Holders not
participating in such underwritten registration or similar offering, or
Registrable Securities not registered pursuant to such Registration
Statement (or, at any time prior to the filing of a Subject Registration
Statement and after the determination to file such Subject Registration
Statement is made, Registrable Securities whose Holders have not requested
that such Registrable Securities be included in such Subject Registration
Statement), as the case may be, shall be disregarded in determining whether
such consent or approval was given by the Holders of such required
percentage or amount.
"MERRILL LYNCH" shall mean Merrill Lynch, Pierce, Fenner & Smith
Incorporated, on behalf of the Initial Purchasers.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Subject Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated or deemed to be incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"PURCHASER SHELF REGISTRATION STATEMENT" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of Section
2(b)(iii) of this Agreement with respect to offers and sales of Registrable
Securities held by any or all of the Initial Purchasers (except Registrable
Securities which the Initial Purchasers have elected not to include in such
Purchaser Shelf Registration Statement or the Initial Purchasers of which
have not complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of Section 2(b) hereof)
after completion of the Exchange Offer on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement,
including
<PAGE>
4
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Debt Securities; PROVIDED,
HOWEVER, that any Debt Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Debt Securities
shall have been declared effective under the 1933 Act and such Debt
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Debt Securities shall have been sold to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule
144A) under the 1933 Act, (iii) such Debt Securities shall have become
eligible for resale pursuant to Rule 144(k) under the 1933 Act, (iv) such
Debt Securities shall have ceased to be outstanding or (v) such Debt
Securities have been exchanged for Exchange Securities upon consummation of
the Exchange Offer.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. ("NASD") registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of one firm of
legal counsel for any underwriters and Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities),
(iii) all expenses of printing and distributing any Registration Statement,
any Prospectus and any amendments or supplements thereto, (iv) all rating
agency fees, (v) the fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, including the
expenses of "cold comfort" letters required by this Agreement, (vi) the
fees and expenses of the Trustee, and any escrow agent or custodian, and
(vii) the reasonable fees and expenses of any special experts retained by
the Company in connection with any Registration Statement, but excluding
fees of counsel to the underwriters or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale
or disposition of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments
and supplements to any such Registration Statement, including post-
effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
<PAGE>
5
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b)(i) or
(ii) of this Agreement which covers all of the Registrable Securities
(except Registrable Securities which the Holders have elected not to
include in such Shelf Registration Statement or the Holders of which have
not complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of Section 2(b) hereof)
on an appropriate form under Rule 415 under the 1933 Act, or any similar
rule that may be adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated or deemed to be incorporated by reference
therein.
"SUBJECT REGISTRATION STATEMENT" shall mean a Shelf Registration
Statement or a Purchaser Shelf Registration Statement or both (as the
context requires).
"TRUSTEE" shall mean the trustee with respect to the Debt Securities
under the Indenture.
All references herein to information which is "included" or "contained" in a
Registration Statement or Prospectus, and all references of like import, shall
include the information (including financial statements) incorporated or deemed
to be incorporated by reference therein, and all references herein to amendments
or supplements to a Registration Statement or Prospectus shall include any
documents filed by the Company under the 1934 Act which is deemed to be
incorporated by reference therein.
2. REGISTRATION UNDER THE 1933 ACT. (a) EXCHANGE OFFER
REGISTRATION. To the extent not prohibited by law (including, without
limitation, any applicable interpretation of the Staff of the SEC), the Company
shall use its best efforts (A) to file within 30 days after the Closing Date an
Exchange Offer Registration Statement covering the offer by the Company to the
Holders to exchange all of the Registrable Securities (except Registrable
Securities held by an Initial Purchaser and acquired directly from the Company
if such Initial Purchaser is not permitted, in the reasonable opinion of counsel
to the Initial Purchasers, pursuant to applicable law or SEC interpretation, to
participate in the Exchange Offer) for Exchange Securities, (B) to cause such
Exchange Offer Registration Statement to be declared effective by the SEC within
120 days after the Closing Date, (C) to cause such Registration Statement to
remain effective until the closing of the Exchange Offer and (D) to consummate
the Exchange Offer within 150 days following the Closing Date. The Exchange
Securities will be issued under the Indenture. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being
<PAGE>
6
the objective of such Exchange Offer to enable each Holder (other than
Participating Broker-Dealers (as defined in Section 3(f)) and broker-dealers who
purchased Notes directly from the Company to resell pursuant to Rule 144A or any
other available exemption under the 1933 Act) eligible and electing to exchange
Registrable Securities for Exchange Securities (assuming that such Holder is not
an affiliate of the Company, acquires the Exchange Securities in the ordinary
course of such Holder's business and has no arrangements or understandings with
any person to participate in the distribution (within the meaning of the 1933
Act) of Exchange Securities) to trade such Exchange Securities from and after
their receipt without any limitations or restrictions under the 1933 Act and
without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30 days after the
date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(iii) use the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Registrable Securities at
any time prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open, by sending to
the institution specified in the notice, a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Securities delivered for exchange, and a statement
that such Holder is withdrawing his election to have such Debt Securities
exchanged; and
(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange Registrable Securities duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
<PAGE>
7
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver Exchange
Securities to each Holder of Registrable Securities equal in amount to the
Registrable Securities of such Holder so accepted for exchange.
Interest on each Exchange Security will accrue from the last date on
which interest was paid or duly provided for on the Registrable Securities
surrendered in exchange therefor or, if no interest has been paid on the
Registrable Securities, from the date of their original issue. The Exchange
Offer shall not be subject to any conditions, other than (i) that the Exchange
Offer, or the making of any exchange by a Holder, does not violate applicable
law or any applicable interpretation of the Staff of the SEC, (ii) that no
action or proceeding shall have been instituted or threatened in any court or by
or before any governmental agency or body with respect to the Exchange Offer,
(iii) that there shall not have been adopted or enacted any law, statute, rule
or regulation, (iv) that there shall not have been declared by United States
federal or California or New York state authorities a banking moratorium, (v)
that trading on the New York Stock Exchange or generally in the United States
over-the-counter market shall not have been suspended by order of the SEC or any
other governmental authority and (vi) such other conditions as may be reasonably
acceptable to Merrill Lynch, in each of clauses (ii) through (v), which, in the
Company's judgment, would reasonably be expected to impair the ability of the
Company to proceed with the Exchange Offer. In addition, each Holder of
Registrable Securities (other than Participating Broker-Dealers) who wishes to
exchange such Registrable Securities for Exchange Securities in the Exchange
Offer will be required to represent that (i) it is not an affiliate of the
Company, (ii) any Exchange Securities to be received by it were acquired in the
ordinary course of business and (iii) it has no arrangement with any person to
participate in the distribution (within the meaning of the 1933 Act) of the
Exchange Securities. Each Participating Broker-Dealer shall be required to make
such representations as, in the reasonable judgment of the Company, may be
necessary under applicable SEC rules, regulations or interpretations or
customary in connection with similar exchange offers. Each Holder (including
Participating Broker-Dealers) shall be required to make such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or another
appropriate form under the 1933 Act available and will be required to agree to
comply with their agreements and covenants set forth in this Agreement. The
Exchange Offer shall be subject to the further condition that no stop order
shall have been issued by the SEC or any state securities authority suspending
the effectiveness of the Exchange Offer Registration Statement and no
proceedings shall have been initiated or, to the knowledge of the Company,
threatened for that purpose. To the extent permitted by law, the Company shall,
upon request of Merrill Lynch, inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers
<PAGE>
8
shall have the right to, and, if requested by the Company, shall, contact such
Holders and otherwise facilitate the tender of Registrable Securities in the
Exchange Offer.
For greater clarity, the Company's obligation to use its best efforts
to make the Exchange Offer hereunder terminates at the close of business on the
150th day following the Closing Date.
(b) SHELF REGISTRATION. (i) If, because of any change in law or
applicable interpretations thereof by the Staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer Registration Statement is not
declared effective within 120 days after the Closing Date, or (iii) upon the
request of Merrill Lynch (but only with respect to any Registrable Securities
which the Initial Purchasers acquired directly from the Company) following the
consummation of the Exchange Offer if any of the Initial Purchasers shall hold
Registrable Securities which it acquired directly from the Company and if such
Initial Purchaser is not permitted, in the reasonable opinion of counsel to the
Initial Purchasers, pursuant to applicable law or applicable interpretation of
the staff of the SEC to participate in the Exchange Offer, the Company shall, at
its cost (in the case of (i) and (ii) above) or at the cost of the Initial
Purchasers (in the case of (iii) above, which cost the Initial Purchasers hereby
agree to pay, unless the Company is required by clause (i) or (ii) above to file
a Shelf Registration Statement and Purchaser Shelf Registration Statement is a
combined Registration Statement with the Shelf Registration Statement):
(A) in the event clause (i) or (ii) is applicable, as promptly as
practicable, file with the SEC a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities (other than Registrable
Securities owned by Holders who have elected not to include such
Registrable Securities in such Shelf Registration Statement or who have not
complied with their obligations under the penultimate paragraph of Section
3 hereof or under the penultimate sentence of this Section 2(b)) by the
Holders from time to time in accordance with the methods of distribution
elected by the Majority Holders of such Registrable Securities and set
forth in such Shelf Registration Statement, and use its best efforts to
cause such Shelf Registration Statement to be declared effective by the SEC
by the 150th day after the Closing Date. In the event that the Company is
required to file a Purchaser Shelf Registration Statement upon the request
of Merrill Lynch pursuant to clause (iii) above, the Company shall use its
best efforts (unless clauses (i) or (ii) above are applicable) to file and
have declared effective by the SEC an Exchange Offer Registration Statement
pursuant to Section 2(a) with respect to all Registrable Securities (other
than Registrable Securities acquired directly from the Company and held by
the Initial Purchasers) and use its best efforts to file, promptly after
any such request from Merrill Lynch, and have declared effective, a
Purchaser Shelf Registration Statement (which may be a combined
Registration Statement with the Exchange Offer
<PAGE>
9
Registration Statement or, if clause (i) or (ii) above is applicable, a
combined Registration Statement with the Shelf Registration Statement);
(B) use its reasonable efforts to keep the relevant Subject
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of
three years from the date a Shelf Registration Statement is declared
effective by the SEC (or one year from the date a Purchaser Shelf
Registration Statement is declared effective) or in each case such shorter
period which will terminate when all of the Registrable Securities covered
by the relevant Subject Registration Statement have been sold pursuant to
the such Subject Registration Statement or otherwise are no longer
Registrable Securities; and
(C) notwithstanding any other provisions hereof, use its reasonable
efforts to ensure that (i) any Subject Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Subject Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of any Subject
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements, in light of the circumstances under which they were made,
not misleading.
To the extent permitted by law, the Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement (if
reasonably requested by one firm of legal counsel selected by the Majority
Holders) or the Purchaser Shelf Registration Statement (if reasonably requested
by Merrill Lynch), as the case may be, with respect to information relating to
the Holders or the Initial Purchasers, respectively, and otherwise as required
by Section 3(b) below, to use all reasonable efforts to cause any such amendment
to become effective and such Subject Registration Statement to become usable as
soon as thereafter practicable and to furnish to the Holders of Registrable
Securities registered thereby or the relevant Initial Purchasers, as the case
may be, copies of any such supplement or amendment promptly after its being used
or filed with the SEC. Anything herein to the contrary notwithstanding, the
Company shall not be required to (x) permit or effect more than one underwritten
offering of Registrable Securities pursuant to the Shelf Registration Statement,
(y) permit or effect any underwritten offerings under the Purchaser Shelf
Registration Statement or (z) permit or effect any offerings through sales
agents, distributors or other similar offerings in respect of any Registration
Statement. The Company may require, as a condition to including the Registrable
Securities of any Holder in any Subject Registration Statement, that such Holder
shall have furnished to the Company a written
<PAGE>
10
agreement to the effect that such Holder agrees to comply with and be bound by
the provisions of this Registration Rights Agreement. For further clarity, the
Company shall have no obligation to keep the Shelf Registration Statement
effective after consummation of the Exchange Offer, and the Company's
obligations to use its best efforts to file a Shelf Registration Statement and
to keep such Shelf Registration Statement effective shall immediately terminate
upon effectiveness of the Exchange Offer Registration Statement (regardless of
when such effectiveness shall occur).
(c) EXPENSES. The Company (i) shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) or 2(b), except
that the Initial Purchasers shall pay all Registration Expenses in connection
with any Purchaser Shelf Registration Statement pursuant to which only
Registrable Securities which they acquired directly from the Company are
registered for resale, and (ii) in the case of the Shelf Registration Statement,
will reimburse the Holders for the reasonable fees and disbursements of one firm
of legal counsel (reasonably satisfactory to the Company) designated in writing
by the Majority Holders to act as counsel for the Holders of the Registrable
Securities in connection therewith (including any Initial Purchasers whose
Registrable Securities are registered for resale pursuant to such Shelf
Registration Statement). Each Holder (including each Initial Purchaser) shall
pay all expenses of its counsel other than as set forth in the preceding
sentence, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to any Subject Registration Statement or the exchange of its
Registrable Securities pursuant to any Exchange Offer Registration Statement.
Notwithstanding anything in this Agreement to the contrary, the Company shall
not be required to pay the fees and disbursements of legal counsel for any
Holders (including Initial Purchasers) except (A) as provided in clause (ii) of
the first sentence of this paragraph, (B) to the extent such fees and
disbursements constitute Registration Expenses which the Company is required to
pay pursuant to the other provisions of this Agreement and (C) to the extent
required by Section 5 hereof.
(d) EFFECTIVE REGISTRATION STATEMENT. (i) The Company will be
deemed not to have used its best efforts or reasonable efforts, as the case may
be, to cause the Exchange Offer Registration Statement or any Subject
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if the Company voluntarily takes any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period unless
(A) such action is, in the reasonable judgment of the Company, required by
applicable law (including, without limitation, any interpretation of the SEC) or
(B) such action is taken by the Company in good faith and for valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, so long as the Company
promptly complies with the requirements of Section 3(k) hereof, if applicable.
<PAGE>
11
(ii) An Exchange Offer Registration Statement pursuant to Section
2(a) hereof or a Subject Registration Statement pursuant to Section 2(b) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; PROVIDED, HOWEVER, that if, after it has been declared
effective, the offering of Registrable Securities pursuant to such Subject
Registration Statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or any other governmental agency or court, such
Subject Registration Statement will be deemed not to have been effective during
the period of such interference, until the offering of Registrable Securities
pursuant to such Subject Registration Statement may legally resume.
(e) INCREASE IN INTEREST RATE. In the event that (i) the Exchange
Offer Registration Statement is not filed with the SEC on or prior to the 30th
calendar day after the Closing Date, (ii) the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 120th calendar
day after the Closing Date or (iii) the Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective by the SEC on or prior to
the 150th calendar day after the Closing Date, the interest rate borne by the
Debt Securities shall be increased by 0.25% per annum following such 30th day in
the case of clause (i) above, such 120th day in the case of clause (ii) above,
or such 150th day in the case of clause (iii) above; PROVIDED that the aggregate
amount of any such increase in such interest rate will in no event exceed 0.25%
per annum; and PROVIDED, FURTHER that if the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 120th day
following the Closing Date, then Debt Securities owned by Persons who do not
comply in all material respects with their obligations under the penultimate
paragraph of Section 3 will not be entitled to any such increase in the interest
rate for any day after the 150th day following the Closing Date. Upon (x) the
filing of the Exchange Offer Registration Statement after the 30th day described
in clause (i) above, (y) the effectiveness of the Exchange Offer Registration
Statement after the 120th day described in clause (ii) above or (z) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 150th day described in clause (iii)
above, the interest rate borne by the Debt Securities from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate.
(f) SPECIFIC ENFORCEMENT. Without limiting the remedies available
to the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that, in
the event of any such failure, the Initial Purchasers or any Holder may, to the
extent permitted by law, obtain such relief as may be required to specifically
enforce the Company's obligations under Section 2(a) and Section 2(b) hereof.
<PAGE>
12
3. REGISTRATION PROCEDURES. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, but only so long as the Company shall have an obligation
under this Agreement to keep a Registration Statement effective, the Company
shall:
(a) use its best efforts to prepare and file with the SEC a
Registration Statement, within the relevant time period specified in
Section 2, on the appropriate form under the 1933 Act, which form (i) shall
be selected by the Company, (ii) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities by
the selling Holders thereof and (iii) shall comply as to form in all
material respects with the requirements of the applicable form and include
or incorporate by reference all financial statements required by the SEC to
be filed therewith, and use its best efforts to cause such Registration
Statement to become effective and use its reasonable efforts to cause such
Registration Statement to remain effective in accordance with Section 2
hereof;
(b) to the extent permitted by law, use its reasonable efforts to
(i) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period, (ii) cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed (if
required) pursuant to Rule 424 under the 1933 Act, and (iii) comply with
the provisions of the 1933 Act with respect to the disposition of all
securities covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by
the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five days prior to filing, that the Shelf
Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable
Securities will be made in accordance with the method elected by the
Majority Holders; and (ii) furnish to each Holder of Registrable Securities
registered under the Shelf Registration Statement, to a single firm of
legal counsel for the Holders (including the Initial Purchasers) and to the
managing underwriters of an underwritten offering of Registrable
Securities, if any, and their counsel, without charge, as many copies of
each Prospectus, including each preliminary Prospectus, and any amendment
or supplement thereto and documents incorporated by reference therein as
such Holder, counsel or underwriters may reasonably request and, if the
Holder so requests, all exhibits (including those incorporated by
reference) in order to facilitate the public sale or other disposition of
the Registrable Securities; and (iii) subject to Section 3(k) and the last
paragraph of Section 3, hereby consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders of
Registrable Securities in
<PAGE>
13
connection with the offering and sale of the Registrable Securities covered
by the Prospectus or any amendment or supplement thereto but only during
the period of time that the Company is required to keep the Shelf
Registration Statement effective pursuant to this Agreement;
(d) use its reasonable efforts to register or qualify the
Registrable Securities under all applicable state securities or "blue sky"
laws of such jurisdictions in the United States as the Majority Holders of
Registrable Securities covered by a Registration Statement and the managing
underwriter of an underwritten offering of Registrable Securities shall
reasonably request at least ten days prior to the time the applicable
Registration Statement is declared effective by the SEC, to cooperate with
the Holders in connection with any filings required to be made with the
NASD, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder to consummate the disposition
in each such jurisdiction of such Registrable Securities owned by such
Holder pursuant to such Registration Statement; PROVIDED, HOWEVER, that the
Company shall not be required to (i) qualify as a foreign corporation or as
a dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d) or (ii) take any action that
would subject it to general service of process or taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of a Subject Registration Statement, notify a single
firm of legal counsel for the Holders of Registrable Securities registered
thereby (including any Initial Purchasers) and Merrill Lynch promptly and,
if requested by such counsel or Merrill Lynch, confirm such advice in
writing promptly (by notice to such counsel or to Merrill Lynch) (i) when
such Registration Statement has become effective and when any post-
effective amendments thereto become effective, (ii) of any request by the
SEC or any state securities authority for post-effective amendments and
supplements to such Registration Statement and the related Prospectus or
for additional information after such Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of such
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of such Registration Statement
and the closing of any sale of Registrable Securities covered thereby
pursuant to an underwriting agreement to which the Company is a party, the
representations and warranties of the Company contained in such
underwriting agreement cease to be true and correct in all material
respects, (v) of the receipt by an appropriate officer or employee of the
Company of any notification with respect to the suspension of the
qualification of the Registrable Securities covered by such Registration
Statement for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose and (vi) upon an appropriate officer or
employee of the Company becoming aware thereof, of the happening of any
event or the discovery of any facts during the
<PAGE>
14
period such Registration Statement is effective which (A) makes any
statement made in such Registration Statement or the related Prospectus
untrue in any material respect or (B) causes such Registration Statement or
the related Prospectus to omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(f) (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by Participating Broker-Dealers (as defined below)
who have exchanged their Registrable Securities for Exchange Securities for
the resale of such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who notifies the Company in writing that it desires to
participate in the Exchange Offer, without charge, as many copies of each
Prospectus included in the Exchange Offer Registration Statement, including
any preliminary prospectus, and any amendment or supplement thereto, as
such broker-dealer may reasonably request, (iii) include in the Exchange
Offer Registration Statement a statement that any broker-dealer who holds
Registrable Securities acquired for its own account as a result of market-
making activities or other trading activities (a "Participating Broker-
Dealer"), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be a statutory underwriter and must
deliver a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities, (iv) subject to Section 3(k)
and the last paragraph of Section 3, hereby consent to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Participating Broker-Dealer in
connection with the sale or transfer of the Exchange Securities covered by
the Prospectus or any amendment or supplement thereto for a period ending
90 days following consummation of the Exchange Offer or, if earlier, when
all Exchange Securities received by such Participating Broker-Dealer in
exchange for Registrable Securities acquired for their own account as a
result of market-making or other trading activities have been disposed of
by such Participating Broker-Dealer, and (v) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in
order to participate in the Exchange Offer a provision to substantially the
following effect (or such similar provision as is reasonably acceptable to
counsel for the Initial Purchasers and as, in the reasonable opinion of the
Company, may at the time be required by applicable law or SEC
interpretation):
"If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If the undersigned is a broker-
dealer that will receive Exchange Securities for its own account in
exchange for Registrable Securities, it represents that the
Registrable Securities to be exchanged for Exchange
<PAGE>
15
Securities were acquired by it as a result of market-making activities
or other trading activities and acknowledges that it will deliver a
prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Securities pursuant to the Exchange Offer;
however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter"
within the meaning of the 1933 Act"; and
(B) to the extent any Participating Broker-Dealer participates in
the Exchange Offer, the Company shall use its reasonable efforts to cause
to be delivered at the request of an entity representing the Participating
Broker-Dealers (which entity shall be Merrill Lynch, Pierce, Fenner & Smith
Incorporated or another Initial Purchaser) only one, if any, "cold comfort"
letter with respect to the Prospectus in the Exchange Offer Registration
Statement in the form existing on the last date for which exchanges are
accepted pursuant to the Exchange Offer; and
(C) to the extent any Participating Broker-Dealer participates in
the Exchange Offer and notifies the Company or causes the Company to be
notified in writing that it is a Participating Broker-Dealer, the Company
shall use its reasonable efforts to maintain the effectiveness of the
Exchange Offer Registration Statement for a period of 90 days following the
last date on which exchanges are accepted pursuant to the Exchange Offer,
or, if earlier, when all Exchange Securities received by Participating
Broker-Dealers in exchange for Registrable Securities acquired for their
own account as a result of market-making or other trading activities have
been disposed of by such Participating Broker-Dealers; and
(D) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b), or take any other action as a
result of this Section 3(f), for a period exceeding 90 days after the last
date for which exchanges are accepted pursuant to the Exchange Offer (or
such earlier date referred to in Paragraph (C) above) and Participating
Broker-Dealers shall not be authorized by the Company to, and shall not,
deliver such Prospectus after such period in connection with resales
contemplated by this Section 3 or otherwise;
it being understood that, notwithstanding anything in this Agreement to the
contrary, the Company shall not be required to comply with any provision of
this Section 3(f) or any other provision of this Agreement relating to the
distribution of Exchange Securities by Participating Broker-Dealers, to the
extent that the Company reasonably concludes (with the consent of Merrill
Lynch, not to be unreasonably withheld) that compliance with such provision
is no longer required by applicable law or interpretation of the staff of
the SEC;
<PAGE>
16
(g) (A) in the case of an Exchange Offer, furnish one firm of legal
counsel for the Initial Purchasers and (B) in the case of a Shelf
Registration, furnish one firm of legal counsel for the Holders of
Registrable Securities covered thereby copies of any request received by or
on behalf of the Company, from the SEC or any state securities authority
for amendments or supplements to the relevant Registration Statement and
Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable and provide prompt notice to one firm of legal counsel for the
Holders of the withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities registered thereby, without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legend (except any customary legend borne by
securities held through The Depository Trust Company or any similar
depository); and cause such Registrable Securities to be in such
denominations (consistent with the provisions of the Indenture and the
officers' certificate establishing the form and terms of the Debt
Securities pursuant to the Indenture) and registered in such names as the
selling Holders or the underwriters, if any, may reasonably request at
least two business days prior to the closing of any sale of Registrable
Securities;
(k) in the case of a Shelf Registration, upon an appropriate officer
or employee of the Company becoming aware of the occurrence of any event or
the discovery of any facts, each as contemplated by Section 3(e)(vi)
hereof, use its reasonable efforts to prepare a supplement or post-
effective amendment to the relevant Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers
of the Registrable Securities, such Prospectus will not contain at the time
of such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company
agrees to notify each Holder of Registrable Securities registered under the
relevant Subject Registration Statement to suspend use of the Prospectus as
promptly as practicable after an appropriate officer or employee of the
Company becomes aware of the occurrence of such an event, and each Holder
of Registrable Securities registered under the relevant Subject
<PAGE>
17
Registration Statement hereby agrees to suspend use of the Prospectus until
the Company has amended or supplemented the Prospectus to correct such
misstatement or omission or has advised such Holders that use of such
Prospectus may be resumed. At such time as such public disclosure is
otherwise made or the Company determines that such disclosure is not
necessary, in each case to correct any misstatement of a material fact or
to include any omitted material fact, or the Company otherwise determines
that use of such Prospectus may be resumed, the Company agrees promptly to
notify each Holder of Registrable Securities registered under the relevant
Subject Registration Statement of such determination and (if applicable) to
furnish each such Holder such numbers of copies of the Prospectus, as
amended or supplemented, as such Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Securities, or
Registrable Securities, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities or the Registrable Securities, as
the case may be, in a form eligible for deposit with the Depository Trust
Company (PROVIDED that the Company shall not be required to provide for any
Exchange Securities or Registrable Securities to be so-called "book-entry
only" securities);
(m) unless the Indenture, as it relates to the Exchange Securities
or the Registrable Securities, as the case may be, has already been so
qualified, use its reasonable efforts to (i) cause the Indenture to be
qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in
connection with the registration of the Exchange Securities or Registrable
Securities, as the case may be, (ii) cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA and
(iii) execute, and use its reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all
other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, take all customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of the
Registrable Securities registered thereby, PROVIDED that the Company shall
not be required to (A) enter into (x) more than one underwriting agreement
(the "Underwriting Agreement") with respect to Registrable Securities
registered under the Shelf Registration Statement or (y) any underwriting
agreement with respect to the sale of any Registrable Securities pursuant
to a Purchaser Shelf Registration Statement or (B) enter into any sales
agency agreements, distribution agreements or other similar agreements
whatsoever with respect to the Registrable Securities. The Company agrees
that it will in good faith negotiate the
<PAGE>
18
terms of any such Underwriting Agreement, which shall be in form and scope
as is customary for similar offerings of debt securities with similar
credit ratings (including, without limitation, representations and
warranties to the underwriters) and shall otherwise be reasonably
satisfactory to the Company and the managing underwriters; and:
(i) with regard to not more than one underwritten offering
pursuant to the Underwriting Agreement (opinions of counsel that are
required to be filed as Exhibit 5 to any registration statement being
specifically excluded from this limitation), if requested by the
managing underwriters, obtain opinions of counsel to the Company
(which counsel shall be reasonably satisfactory to the managing
underwriters) addressed to such underwriters, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and in substantially the forms specified in the
Underwriting Agreement; PROVIDED, HOWEVER, that all of such opinions
shall be dated as of a single date and no updates thereof shall be
required; and PROVIDED, FURTHER, that except as set forth in this
paragraph (i), the Company shall have no obligation to deliver any
legal opinions (excluding Exhibit 5 opinions) under or in connection
with this Agreement;
(ii) with regard to not more than one underwritten offering
pursuant to the Underwriting Agreement, if requested by the managing
underwriters, obtain a single "cold comfort" letter and a single
update thereto not later than two weeks after the date of the original
letter (or if not available under applicable accounting pronouncements
or standards, a single "procedures" letter and a single update
thereto) from the Company's independent certified public accountants
addressed to the underwriters named in the Underwriting Agreement and
use reasonable efforts to have such letter addressed to the selling
Holders of Registrable Securities (PROVIDED that such letter need not
be addressed to any Holders to whom, in the reasonable opinion of the
Company's independent certified public accountants, addressing such
letter is not permissible under applicable accounting standards), such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" (or "procedures") letters to
underwriters in connection with similar underwritten offerings;
PROVIDED, HOWEVER, that except as set forth in this paragraph (ii),
the Company shall have no obligation to deliver any "cold comfort" or
"procedures" letters or any updates thereto under or in connection
with this Agreement; and
(iii) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
underwritten offerings.
<PAGE>
19
Notwithstanding anything herein to the contrary, the Company shall have no
obligation to enter into any underwriting agreement or permit an underwritten
offering of Registrable Securities unless a request therefor shall have been
received from a majority of the Holders of all Registrable Securities then
outstanding. In the case of such a request for an underwritten offering, the
Company shall provide written notice to the Holders of all Registrable
Securities of such underwritten offering at least 30 days prior to the filing of
a prospectus supplement for such underwritten offering. Such notice shall (x)
offer each such Holder the right to participate in such underwritten offering
(but may indicate that whether or not all Registrable Securities are included
will be at the discretion of the underwriters), (y) specify a date, which shall
be no earlier than 10 days following the date of such notice, by which such
Holder must inform the Company of its intent to participate in such underwritten
offering and (z) include the instructions such Holder must follow in order to
participate in such underwritten offering;
(o) in the case of a Shelf Registration, and to the extent customary
in connection with a "due diligence" investigation for an offering of debt
securities with a similar credit rating to that of the Registrable
Securities, make available for inspection by representatives appointed by
the Majority Holders and any underwriters participating in any disposition
pursuant to a Shelf Registration Statement and one firm of legal counsel
retained for all Holders participating in such Shelf Registration, and one
firm of legal counsel to the underwriters, if any, all financial and other
records, pertinent corporate documents and properties of the Company
reasonably requested by any such persons, and cause the respective
officers, employees, and any other agents of the Company to supply all
information reasonably requested by any such representative, underwriters
or counsel in connection with the Shelf Registration Statement; PROVIDED
that, if any such records, documents or other information relates to
pending or proposed acquisitions or dispositions, or otherwise relates to
matters reasonably considered by the Company to constitute sensitive or
proprietary information, the Company need not provide such records,
documents or information unless the foregoing parties enter into a
confidentiality agreement in customary form and reasonably acceptable to
such parties and the Company;
(p) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any
amendment to an Exchange Offer Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the
Initial Purchasers, and make such changes in any such document prior to the
filing thereof as Merrill Lynch or one firm of legal counsel to the Initial
Purchasers may reasonably request; (ii) in the case of a Shelf
Registration, a reasonable time prior to filing any Shelf Registration
Statement, any Prospectus forming a part thereof, any amendment to such
Shelf Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to Merrill Lynch, one firm of legal counsel
appointed by the Majority
<PAGE>
20
Holders to represent the Holders participating in such Shelf Registration,
the managing underwriters of an underwritten offering of Registrable
Securities, if any, and their counsel, and make such changes in any such
document prior to the filing thereof as Merrill Lynch, such one firm of
legal counsel for the Holders, such managing underwriters or their counsel
may reasonably request; and (iii) cause the representatives of the Company
to be available for discussion of such document as shall be reasonably
requested by Merrill Lynch, one firm of legal counsel to the Holders, the
managing underwriters and their counsel and shall not at any time make any
filing of any such document of which Merrill Lynch, one firm of legal
counsel to the Holders, the managing underwriters and their counsel shall
not have previously been advised and furnished a copy or to which Merrill
Lynch, one firm of legal counsel to the Holders, the managing underwriters
and their counsel shall reasonably object; PROVIDED that the provisions of
this paragraph (p) shall not apply to any document filed by the Company
pursuant to the 1934 Act which is incorporated or deemed to be incorporated
by reference in any Registration Statement or Prospectus;
(q) use its reasonable efforts to cause the Exchange Securities, if
applicable, and, in the event of a Shelf Registration, the Debt Securities
to be rated with not more than two rating agencies selected by the Company,
if so requested by the Majority Holders or by the managing underwriters of
an underwritten offering of Registrable Securities, if any, unless the
Exchange Securities or the Registrable Securities, as the case may be, are
already so rated or unless the Company has obtained such ratings for its
long-term debt securities generally;
(r) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering at least 12 months which shall satisfy the provisions of
Section 11(a) of the 1933 Act and Rule 158 thereunder; PROVIDED that the
Company's obligations under this paragraph (r) shall be satisfied by the
filing of its quarterly and annual reports on Forms 10-K and 10-Q; and
(s) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any
managing underwriters and their counsel.
In the case of a Subject Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) (i) require
each Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and such other information as, in the reasonable opinion of the
Company, is required for inclusion in the Subject Registration Statement (which
requests may be given to a single firm of legal counsel for the Holders),
<PAGE>
21
and (ii) further require each Holder of Registrable Securities, through one firm
of legal counsel on behalf of all such Holders, to furnish to the Company
comments on the Subject Registration Statement and the Prospectus included
therein or any amendment or supplement to any of the foregoing not later than
such times as the Company reasonably may request.
In the case of a Subject Registration Statement, each Holder agrees
and, in the case of the Exchange Offer Registration Statement, each
Participating Broker-Dealer agrees that, upon receipt of any notice from the
Company of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(ii)-(vi) or Section 3(k) hereof (it being
understood and agreed that, for purposes of this paragraph, all references in
Sections 3(e)(ii)-(vi) and Section 3(k) to a "Subject Registration Statement", a
"Shelf Registration Statement" or a "Registration Statement" shall be deemed to
mean and include the Shelf Registration Statement, the Purchaser Shelf
Registration Statement or the Exchange Offer Registration Statement or all or
any combination thereof (as the context requires), MUTATIS MUTANDIS), such
Holder or Participating Broker-Dealer, as the case may be, will forthwith
discontinue disposition of Registrable Securities pursuant to such Registration
Statement and discontinue use of the Prospectus included therein until such
Holder's or Participating Broker-Dealer's receipt, as the case may be, of (A)
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof or (B) notice from the Company that the sale of the Registrable
Securities may be resumed , and, if so directed by the Company, such Holder or
Participating Broker-Dealer, as the case may be, will deliver to the Company (at
its expense) all copies in its possession, other than permanent file copies then
in its possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. If the Company shall give any
such notice to suspend the disposition of Registrable Securities pursuant to a
Registration Statement as a result of the happening of any event or the
discovery of any facts, each of the kind described in Section 3(e)(vi) or 3(k)
hereof, the Company shall be deemed to have used its reasonable efforts to keep
such Registration Statement effective during such period of suspension, PROVIDED
that the Company shall use its reasonable efforts to file and have declared
effective (if an amendment) as soon as practicable an amendment or supplement to
such Registration Statement or the related Prospectus and shall extend the
period during which such Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions or the date on which the Company has given
notice that the sale of Registrable Securities may be resumed, as the case may
be. Each Holder of Registrable Securities hereby agrees that it will at all
times use the then most current preliminary prospectus or Prospectus (as the
case may be), as then amended or supplemented, which has been provided to it by
the Company in connection with the resale or transfer of any Registrable
Securities pursuant to a Registration Statement or Prospectus.
<PAGE>
22
4. UNDERWRITTEN REGISTRATIONS. If any of the Registrable
Securities covered by the Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will manage the offering will be selected by the Majority
Holders of such Registrable Securities included in such offering and shall be
reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, each Holder and each Person,
if any, who controls any of such parties within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Securities
or Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
(subject to Section 5(c) below) the reasonable fees and disbursements of
counsel chosen by Merrill Lynch, Pierce, Fenner & Smith Incorporated or, in
the event that Merrill Lynch, Pierce, Fenner & Smith Incorporated is not an
indemnified party, by a
<PAGE>
23
majority of the indemnified parties), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or
proceeding by any court or governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under subparagraph (i) or (ii) of this
Section 5(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Initial Purchaser, any Holder or any underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); and PROVIDED, FURTHER, that this indemnity
agreement with respect to any Prospectus shall not inure to the benefit of any
Initial Purchaser or Holder from whom the person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities or Exchange
Securities (or any person who controls such Initial Purchaser or Holder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) if a
copy of the Prospectus (as then amended or supplemented and furnished by the
Company to such Initial Purchaser or Holder, as the case may be) was not sent or
given by or on behalf of such Initial Purchaser or Holder, as the case may be,
to such person, if such is required by law, at or prior to the sale of such
Registrable Securities or Exchange Securities and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability.
(b) In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Initial Purchaser, each underwriter who participates in an offering of
Registrable Securities and the other Holders and each of their respective
directors and officers (including each officer of the Company who signed the
Registration Statement in question) and each Person, if any, who controls the
Company, any Initial Purchaser, any underwriter or any other Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all losses, liabilities, claims, damages and expenses described in the
indemnity contained in Section 5(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto); PROVIDED, HOWEVER, that
no such Holder shall be liable for any claims hereunder in excess of the amount
of net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Registration Statement.
<PAGE>
24
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have other than on account of this indemnity agreement or the contribution
agreement set forth in Section 5(d) below. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying party or parties be liable for the fees and expenses of more
than one legal counsel (which shall be selected by Merrill Lynch, Pierce, Fenner
& Smith Incorporated or, in the event that Merrill Lynch, Pierce, Fenner & Smith
Incorporated is not an indemnified party, by a majority of the indemnified
parties) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which any of the indemnity provisions set forth in this
Section 5 are for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders, as incurred; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, the Initial Purchasers and the
Holders, such parties shall contribute to such aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement in such proportion as shall be appropriate to reflect (i) the relative
benefits received by the Company on the one hand, the Initial Purchasers on
another hand, and the Holders on another hand, from the offering of the Exchange
Securities or Registrable Securities, as the case may be, included in such
offering, and (ii) the relative fault of the Company on the one hand, the
Initial Purchasers on another hand, and the Holders on another hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The Company, the Initial Purchasers and the
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 5 were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5, each Person, if any, who
controls an Initial Purchaser or a Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Initial Purchaser or such Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement in
question, and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
<PAGE>
25
6. MISCELLANEOUS. (a) RULE 144 AND RULE 144A. For so long as the
Company is subject to the reporting requirements of Section 13 or 15 of the 1934
Act, the Company covenants that it will file the reports required to be filed by
it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations
adopted by the SEC thereunder, that if it ceases to be so required to file such
reports, it will upon the request of any Holder of Registrable Securities (i)
make publicly available such information as is necessary to permit sales
pursuant to Rule 144 under the 1933 Act, (ii) deliver such information to a
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the 1933 Act, and (iii) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (x) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time, (y) Rule 144A under
the 1933 Act, as such Rule may be amended from time to time, or (z) any similar
rules or regulations hereafter adopted by the SEC (PROVIDED that the obligations
of the Company under any such similar rules or regulations shall not be more
burdensome in any substantial respect than those referred to in clauses (x) or
(y)). Upon the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
(b) NO INCONSISTENT AGREEMENTS. The Company has not entered into
nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any such
agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; PROVIDED, HOWEVER, that to the extent any provision of this
Agreement relates to the Purchaser Shelf Registration Statement or otherwise to
the Initial Purchasers, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions thereof may be given,
by Merrill Lynch; and PROVIDED, FURTHER, that no amendment, modification,
supplement or waiver or consent to any departure from the provisions of Section
5 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the
<PAGE>
26
Company and Merrill Lynch to the extent that any such amendment, modification,
supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law (including any interpretation of the
staff of the SEC) or any change therein.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier providing overnight delivery (i)
if to a Holder, at its address appearing in the Securities Register (as defined
in the Indenture) or at such other address as shall have been given by such
Holder to the Company by means of a notice given in accordance with the
provisions of this Section 6(d), which address initially is, with respect to the
Initial Purchasers, the address care of Merrill Lynch, Pierce, Fenner & Smith
Incorporated set forth in the Purchase Agreement, and (ii) if to the Company
initially at the Company's address set forth in the Purchase Agreement, or in
each case to such other address notice of which is given in accordance with the
provisions of this Section 6(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier providing overnight
delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement, the
Indenture or the Offering Memorandum dated May 25, 1995; and PROVIDED, FURTHER,
that Holders of Registrable Securities may not assign their rights under this
Agreement except in connection with the permitted transfer of Registrable
Securities and then only insofar as relates to such Registrable Securities. If
any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. The Holders from time to time shall
each be a third party beneficiary to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
Merrill Lynch, Pierce, Fenner & Smith Incorporated shall have the right to
enforce such agreements directly to the extent it
<PAGE>
27
deems such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(I) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
----------------------------
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CONSOLIDATED FREIGHTWAYS, INC.
By
---------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By
---------------------------
Name:
Title:
Investment Banking Group
GOLDMAN, SACHS & CO.
By
---------------------------
(Goldman, Sachs & Co.)
J.P. MORGAN SECURITIES INC.
By
---------------------------
Name:
Title:
SALOMON BROTHERS INC
By
---------------------------
Name:
Title:
<PAGE>
[Legend for inclusion in Global Notes-- THIS NOTE IS A GLOBAL NOTE WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY (AS DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. THIS NOTE
IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]
[Legend for inclusion in Global Notes -- UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF JUNE 1, 1995 AND THE
LAST DATE ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)
IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR
AND, IF APPLICABLE, THE TRANSFEREE TO THE TRUSTEE.
THE HOLDER OF THIS NOTE IS ENTITLED TO THE BENEFITS OF THE REGISTRATION RIGHTS
AGREEMENT REFERRED TO BELOW AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
No. R- _____ $ _____
CUSIP 209237 AD 8 [Global Notes]
209237 AE 6 [AI]
U20923 AA 3 [REG S] Dated:_____
CONSOLIDATED FREIGHTWAYS, INC.
7.35% Notes due 2005
Consolidated Freightways, Inc., a Delaware corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to _____________,
or registered assigns, the principal sum of _____ DOLLARS ($_____) on June 1,
2005, and to pay interest thereon from June 1, 1995 or from the most recent date
to which interest has been paid or duly provided for, semiannually on June 1 and
December 1 in each year (each, an "Interest Payment Date"), commencing
December 1, 1995, and at Maturity, at the rate of 7.35% per annum, until the
principal hereof is paid or duly made available for payment. Interest on this
Note shall be calculated on the basis of a 360-day year consisting of twelve 30-
day months. The interest so payable and punctually paid or duly
<PAGE>
provided for on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the May 15 or November 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest which is payable, but is not punctually paid or duly provided
for, on any Interest Payment Date shall forthwith cease to be payable to the
registered Holder hereof on the relevant Regular Record Date by virtue of having
been such Holder, and may be paid to the Person in whose name this Note (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of this Note not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
The Holder of this Note is entitled to the benefits of the Registration
Rights Agreement dated as of June 1, 1995 among the Company and the Initial
Purchasers named therein (as the same may be amended from time to time, the
"Registration Rights Agreement"). In the event that either (a) the Exchange
Offer Registration Statement (as such term is defined in the Registration Rights
Agreement) is not filed with the Securities and Exchange Commission (the
"Commission") on or prior to the 30th day following June 1, 1995 (the "Original
Issue Date"), (b) the Exchange Offer Registration Statement has not been
declared effective by the Commission on or prior to the 120th day following the
Original Issue Date or (c) the Exchange Offer (as such term is defined in the
Registration Rights Agreement) is not consummated or a Shelf Registration
Statement (as such term is defined in the Registration Rights Agreement) is not
declared effective by the Commission on or prior to the 150th day following the
Original Issue Date, the interest rate borne by this Note shall be increased by
0.25% per annum following such 30th day in the case of clause (a) above,
following such 120th day in the case of clause (b) above or following such 150th
day in the case of clause (c) above; provided that the aggregate amount of any
such increase in the interest rate on this Note pursuant to the foregoing
provisions shall in no event exceed 0.25% per annum; and provided, further, that
if the Exchange Offer Registration Statement is not declared effective by the
Commission on or prior to the 120th day following the Original Issue Date, then
if this Note is owned by a Person (as defined in the Registration Rights
Agreement) who does not comply in all material respects with its obligations
under the penultimate paragraph of Section 3 of the Registration Rights
Agreement, this Note will not be entitled to any such increase in the interest
rate for any day after the 150th day following the Original Issue Date. Upon
(x) the filing of the Exchange Offer Registration Statement after the 30th day
described in clause (a) above, (y) the effectiveness of the Exchange Offer
Registration Statement after the 120th day described in clause (b) above or (z)
the consummation of the Exchange Offer or the effectiveness of a Shelf
Registration Statement, as the case may be, after the 150th day described in
clause (c) above, the interest rate borne by this Note from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
7.35% per annum. The Company shall promptly provide the Trustee with notice of
any change in the interest rate borne by this Note.
Payment of the principal of and the interest on this Note will be made at
the office or agency of the Company maintained for that purpose in The City of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, interest may be paid by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes") issued and to be issued in one or more series under
an Indenture dated as of August 1, 1989 (herein called, together with all
indentures supplemental thereto, the "Indenture") between the Company and Bank
One, Columbus, NA, as successor Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes, and the terms upon which
the Notes are, and are to be, authenticated and delivered. This Note is one of
the series designated on the face hereof, limited (subject to exceptions
provided in the Indenture) to the aggregate principal amount specified in the
Officers' Certificate dated June 1, 1995 establishing the terms of the Notes
pursuant to the Indenture.
The Notes are not subject to redemption prior to maturity.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of any series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Notes
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note,
at the time, place and rate, and in the coin or currency, herein and in the
Indenture prescribed.
As provided in the Indenture and subject to certain limitations set forth
therein and in this Note, the transfer of this Note may be registered on the
Security Register upon surrender of this Note for registration of transfer at
the office or agency of the Company maintained for the purpose in any place
where the principal of and interest on this Note are payable, duly endorsed, or
accompanied by a written instrument
2
<PAGE>
of transfer in form satisfactory to the Company and the Security Registrar duly
executed by the Holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Notes are issuable only in registered form without coupons in the
denominations specified in the Officers' Certificate dated June 1, 1995
establishing the terms of the Notes, all as more fully provided in the Indenture
and such Officers' Certificate. As provided in the Indenture and in such
Officers' Certificate, and subject to certain limitations set forth in the
Indenture, such Officers' Certificate and in this Note, the Notes are
exchangeable for a like aggregate principal amount of Notes in authorized
denominations as requested by the Holders surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith, other than in
certain cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be discharged
from its obligations with respect to the Notes (subject to certain exceptions)
or (ii) the Company may be released from its obligations under specified
covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations
sufficient to pay and discharge the entire indebtedness on all Notes, and
satisfies certain other conditions, all as more fully provided in the Indenture.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee under the Indenture by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefits under
the Indenture or be valid or obligatory for any purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[Seal] CONSOLIDATED FREIGHTWAYS, INC.
Attest: By:
----------------------------- --------------------------------
Maryla R. Boonstoppel David F. Morrison
Secretary Vice President and Treasurer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
BANK ONE, COLUMBUS, NA,
as Trustee
By:
-------------------------------
Authorized Signatory
4
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM--as tenants in common UNIF GIFT MIN ACT--______Custodian_______
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right of survivorship Under Uniform Gifts to Minors
and not as tenants in common Act__________________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
______________________________________
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------
--------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
Attorney
- ------------------------------------------------------------------------
to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:
--------------------------------------------------------------------------
Notice: The signature to this assignment must correspond with the
name as it appears upon the face of the within Note in every particular,
without alteration or enlargement or any change whatever.
<PAGE>
- --------------------------------------------------------------------------------
CERTIFICATE OF TRANSFER
In connection with any transfer of this Note occurring prior to the date
that is three years after the later of June 1, 1995 and the last date on which
this Note (or any Predecessor Security) was owned by the Company or any
affiliate of the Company, the undersigned confirms that this Note is being
transferred:
CHECK ONE BOX BELOW
/ / (a) as long as this Note is / / (c) To an institutional "accredited
eligible for resale pursuant to investor" (as defined in
Rule 144A under the Securities Act Rule 501(a)(1), (2), (3) or (7)
of 1933, as amended, to a person under the Securities Act of 1933,
the undersigned reasonably believes as amended) that has furnished to
is a "qualified institutional the Trustee a signed letter
buyer" (a "QIB") as defined in such containing certain representations
Rule 144A that purchases for its and agreements (the form of which
own account or for the account of letter can be obtained from the
a QIB to whom notice is given that Trustee); or
the transfer is being made in
reliance on such Rule 144A;
/ / (d) to the Company.
/ / (b) pursuant to offers and sales
to non-U.S. persons that occur
outside of the United States
within the meaning of Regulation S
under the Securities Act of 1933,
as amended;
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee under the Indenture by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefits under
the Indenture or be valid or obligatory for any purpose.
Dated:
------------------------------- ----------------------------------
SIGNATURE
Signature Guaranteed:
- -------------------------------------- ----------------------------------
SIGNATURE
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is acquiring this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it or any such account , as the case may be, is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
------------------------------- ----------------------------------
NOTICE: To be executed by an
executive officer
- --------------------------------------------------------------------------------
<PAGE>
No. _____ $_____
CUSIP _____
CONSOLIDATED FREIGHTWAYS, INC.
7.35% Notes due 2005
Consolidated Freightways, Inc., a Delaware corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to ____________,
or registered assigns, the principal sum of ______ DOLLARS ($______) on
June 1, 2005, and to pay interest thereon from _______________, 1995 or from
the most recent date to which interest has been paid or duly provided for,
semiannually on June 1 and December 1 in each year (each, an "Interest Payment
Date"), commencing _______________, 1995, and at Maturity, at the rate of
7.35% per annum, until the principal hereof is paid or duly made available for
payment. Interest on this Note shall be calculated on the basis of a 360-day
year consisting of twelve 30-day months. The interest so payable and punctually
paid or duly provided for on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the May 15 or November 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date shall forthwith cease to be payable
to the registered Holder hereof on the relevant Regular Record Date by virtue of
having been such Holder, and may be paid to the Person in whose name this Note
(or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to the Holder of this Note not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of and the interest on this Note will be made at
the office or agency of the Company maintained for that purpose in The City of
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, at the option of the Company, interest may be paid by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee under the Indenture by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefits under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[Seal] CONSOLIDATED FREIGHTWAYS, INC.
Attest: By:
--------------------------------- --------------------------------
Maryla R. Boonstoppel David F. Morrison
Vice President and Secretary Vice President and Treasurer
Dated:
----------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
BANK ONE, COLUMBUS, NA,
as Trustee
By:
------------------------------------
Authorized Signatory
2
<PAGE>
[Reverse of Note]
CONSOLIDATED FREIGHTWAYS, INC.
7.35% Notes due 2005
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes") issued and to be issued in one or more series under
an Indenture dated as of August 1, 1989 (herein called, together with all
indentures supplemental thereto, the "Indenture") between the Company and Bank
One, Columbus, NA, as successor Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes, and the terms upon which
the Notes are, and are to be, authenticated and delivered. This Note is one of
the series designated on the face hereof, limited (subject to exceptions
provided in the Indenture) to the aggregate principal amount specified in the
Officers' Certificates dated June 1, 1995 and _______________, 1995 establishing
the terms of the Notes pursuant to the Indenture.
The Notes are not subject to redemption prior to maturity.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series issued
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of any series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Notes
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note,
at the time, place and rate, and in the coin or currency, herein and in the
Indenture prescribed.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Security Register
upon surrender of this Note for registration of transfer at the office or agency
of the Company maintained for the purpose in any place where the principal of
and interest on this Note are payable, duly endorsed, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons in the
denominations specified in the Officers' Certificates dated June 1, 1995 and
_______________, 1995 establishing the terms of the Notes, all as more fully
provided in the Indenture and such Officers' Certificates. As provided in the
Indenture and in such Officers' Certificates, and subject to certain limitations
set forth in the Indenture and in such Officers' Certificates, the Notes are
exchangeable for a like aggregate principal amount of Notes in authorized
denominations as requested by the Holders surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith, other than in
certain cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be discharged
from its obligations with respect to the Notes (subject to certain exceptions)
or (ii) the Company may be released from its obligations under specified
covenants and agreements in the Indenture, in each case if the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations
sufficient to pay and discharge the entire indebtedness on all Notes, and
satisfies certain other conditions, all as more fully provided in the Indenture.
This Note shall be governed by and construed in accordance with the laws of
the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
3
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM--as tenants in common UNIF GIFT MIN ACT--______Custodian_______
TEN ENT--as tenants by the entireties (Cust) (Minor)
JT TEN --as joint tenants with right of survivorship Under Uniform Gifts to Minors
and not as tenants in common Act__________________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
______________________________________
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------
--------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
Attorney
- ------------------------------------------------------------------------
to transfer said Note on the books of the Company with full power of
substitution in the premises.
Dated:
--------------------------------------------------------------------------
Notice: The signature to this assignment must correspond with the
name as it appears upon the face of the within Note in every particular,
without alteration or enlargement or any change whatever.
<PAGE>
June 26, 1995
Consolidated Freightways, Inc.
3240 Hillview Avenue
Palo Alto, California 94304
CONSOLIDATED FREIGHTWAYS, INC.
Ladies and Gentlemen:
We have acted as special counsel to Consolidated Freightways, Inc., a
Delaware corporation (the "Company"), in connection with the filing by the
Company with the Securities and Exchange Commission of a registration statement
(the "Registration Statement") on Form S-4 under the Securities Act of 1933, as
amended (the "Securities Act"). The Registration Statement relates to the
proposed issuance of up to $100,000,000 aggregate principal amount of the
Company's 7.35% Notes due 2005 (the "New Notes") registered under the Securities
Act in exchange for up to $100,000,000 aggregate principal amount of the
Company's outstanding 7.35% Notes due 2005 (the "Old Notes"). The New Notes are
issuable under an Indenture dated as of August 1, 1989 (the
<PAGE>
"Indenture") between the Company and Bank One, Columbus, NA, as successor
trustee (the "Trustee").
As special counsel to the Company, we have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, certificates, corporate records and other instruments as we have
deemed necessary or advisable for the purpose of this opinion. In our
examination, we have assumed the authenticity of all documents submitted to us
as originals, the genuineness of all signatures thereon, the legal capacity of
natural persons executing such documents and the conformity to original
documents of all documents submitted to us as certified or photostatic copies.
Based upon the foregoing, and subject to the assumptions and limitations
set forth herein, we are of the opinion that, when (i) appropriate action is
taken by the Company to authorize the issuance and to establish, in accordance
with the Indenture, the form and terms of the New Notes, and (ii) the New Notes
are duly executed under the Company's corporate seal, attested, issued and
delivered by duly authorized officers of the Company and authenticated by the
Trustee, all in accordance with such Company action and the terms of the
Indenture, against surrender and cancellation of a like principal amount of Old
Notes, the New Notes will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as enforcement thereof may be subject to or limited by bankruptcy, insolvency,
fraudulent transfer, fraudulent conveyance, reorganization, moratorium,
arrangement or other similar laws
2
<PAGE>
relating to or affecting creditors' rights generally or by general equitable
principles.
To the extent relevant to the opinions set forth above, we have assumed
that the Trustee is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization; that the Trustee is duly qualified
to engage in the activities contemplated by the Indenture and is qualified and
eligible under the terms of the Indenture to act as trustee thereunder; that the
Indenture was duly authorized, executed and delivered by the original trustee
named therein; that the Trustee has been duly appointed as successor Trustee
under the Indenture and has duly authorized, executed and delivered an
instrument accepting such appointment, all in accordance with the provisions of
the Indenture; that the Indenture is a valid and binding obligation of the
Trustee; that the Trustee is in compliance, generally with respect to acting as
a trustee under the Indenture, with all applicable laws and regulations; and
that the Trustee has the requisite organizational and legal power and authority
to perform its obligations under the Indenture.
We express no opinion as to the enforceability of provisions of the
Indenture or the Notes which provide that the assertion or employment of any
right or remedy shall not prevent the concurrent assertion or employment of any
other right or remedy, or that every right and remedy shall be cumulative and in
addition to every other right and remedy, or that any delay or omission to
exercise any right or remedy shall not impair any other right or remedy or
constitute a waiver thereof.
3
<PAGE>
We are members of the bar of the State of New York and the foregoing
opinion is limited to matters arising under the laws of the State of New York
and the General Corporation Law of the State of Delaware, and we express no
opinion with respect to matters arising under the laws of any other
jurisdiction.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name under the caption "Legal Matters" in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/ Brown & Wood
4
<PAGE>
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FOR THE YEAR ENDED
MARCH 31, DECEMBER 31,
-------------------- ----------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Fixed Charges:
Interest Expense....................... $ 7,201 $ 6,876 $ 27,945 $ 30,333 $ 38,893 $ 46,703 $ 40,178
Capitalized Interest................... 175 360 1,042 1,224 543 1,703 2,470
Preferred Dividends.................... 3,112 3,126 12,475 12,551 12,618 12,691 12,746
--------- --------- ---------- ---------- ---------- ---------- ----------
Subtotal........................... 10,488 10,362 41,462 44,108 52,054 61,097 55,394
Interest Component of Rental Expense... 18,073 14,043 62,304 57,585 55,773 58,052 54,016
--------- --------- ---------- ---------- ---------- ---------- ----------
Fixed Charges (1)........................ 28,561 24,405 103,766 101,693 107,827 119,149 109,410
Less:
Capitalized Interest................. 175 360 1,042 1,224 543 1,703 2,470
Preferred Dividends.................. 3,112 3,126 12,475 12,551 12,618 12,691 12,746
--------- --------- ---------- ---------- ---------- ---------- ----------
Net Fixed Charges.................. $ 25,274 $ 20,919 $ 90,249 $ 87,918 $ 94,666 $ 104,755 $ 94,194
--------- --------- ---------- ---------- ---------- ---------- ----------
--------- --------- ---------- ---------- ---------- ---------- ----------
Earnings:
Income (Loss) Before Taxes............. $ 44,751 $ 28,758 $ 111,920 $ 91,441 $ (10,733) $ (43,337) $ (32,678)
Add: Net Fixed Charges................. 25,274 20,919 90,249 87,918 94,666 104,755 $ 94,194
--------- --------- ---------- ---------- ---------- ---------- ----------
Total Earnings..................... $ 70,025 $ 49,677 $ 202,169 $ 179,359 $ 83,933 $ 61,418 $ 61,516
--------- --------- ---------- ---------- ---------- ---------- ----------
--------- --------- ---------- ---------- ---------- ---------- ----------
Ratio of Earnings to Fixed Charges:
Total Earnings....................... $ 70,025 $ 49,677 $ 202,169 $ 179,359 $ 83,933 $ 61,418 $ 61,516
Fixed Charges........................ 28,561 24,405 103,766 101,693 107,827 119,149 109,410
Ratio................................ 2.5x 2.0x 1.9x 1.8x 0.8x(2) 0.5x(2) 0.6x(2)
<FN>
- ------------------------
(1) Fixed Charges represents interest on capital leases and short-term and
long-term debt, capitalized interest, dividends on shares of the Series B
Cumulative Convertible Preferred Stock used to pay debt service on notes
issued by the Company's Thrift and Stock Plan and the applicable portion of
the consolidated rent expense which approximates the interest portion of
lease payments.
(2) Earnings were inadequate to cover fixed charges for the periods shown; the
deficiency was $23.9 million, $57.7 million and $47.9 million for the years
ended December 31, 1992, 1991 and 1990, respectively.
</TABLE>
<PAGE>
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER
THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
BANK ONE, COLUMBUS, N.A.
----------------------------------------
Not Applicable 31-4148768
(State of Incorporation (I.R.S. Employer
if not a national bank) Identification No.)
100 East Broad Street, Columbus, Ohio 43271-0181
(Address of trustee's principal (Zip Code)
executive offices)
Stephen W. Boughton
c/o Bank One Trust Company, NA
100 East Broad Street
Columbus, Ohio 43271-0181
(614) 248-(5948)
(Name, address and telephone number of agent for service)
---------------------------------------
CONSOLIDATED FREIGHTWAYS, INC.
(Exact name of obligor as specified in its charter)
Delaware 94-1444798
(State or other jurisdiction of
(I.R.S.Employer
incorporation or organization) Identification No.)
3240 Hillview Avenue
Palo Alto, California 94304
(Address of principal executive
offices)
CONSOLIDATED FREIGHTWAYS, INC. 7.35% NOTES DUE 2005
(Title of the Indenture securities)
<PAGE>
GENERAL
1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of Cleveland, Cleveland, Ohio
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee.
16. LIST OF EXHIBITS
LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY
AND QUALIFICATION. (EXHIBITS IDENTIFIED IN PARENTHESES, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS EXHIBITS HERETO.)
Exhibit 1 - A copy of the Articles of Association of the trustee as now in
effect.
Exhibit 2 - A copy of the Certificate of Authority of the trustee to commence
business, see Exhibit 2 to Form T-1, filed in connection with Form S-3 relating
to Wheeling-Pittsburgh Corporation 9 3/8% Senior Notes due 2003, Securities and
Exchange Commission File No. 33-50709.
Exhibit 3 - A copy of the Authorization of the trustee to exercise corporate
trust powers, see Exhibit 3 to Form T-1, filed in connection with Form S-3
relating to Wheeling-Pittsburgh Corporation 9 3/8% Senior Notes due 2003,
Securities and Exchange Commission File No. 33-50709.
Exhibit 4 - A copy of the Bylaws of the trustee as now in effect.
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, as amended.
Exhibit 7 - Report of Condition of the trustee as of the close of business on
March 31, 1995, published pursuant to the requirements of the Comptroller of the
Company.
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
Items 3 through 15 are not answered pursuant to General Instruction B which
requires responses to Item 1, 2 and 16 only, if the obligor is not in default.
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, Bank One, Columbus, NA, a national banking association
organized under the National Banking Act, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in Columbus, Ohio, on June 9, 1995.
Bank One, Columbus, NA
By:/s/ Stephen W. Boughton
-------------------------
Stephen W. Boughton
Authorized Signer
2
<PAGE>
EXHIBIT 1
BANK ONE, COLUMBUS, NATIONAL ASSOCIATION
ARTICLES OF ASSOCIATION
For the purpose of organizing an association to carry on the business of
banking under the laws of the United States, the following Articles of
Association are entered into:
FIRST. The title of this Association shall be BANK ONE, COLUMBUS, NATIONAL
ASSOCIATION.
SECOND. The main office of the Association shall be in Columbus, County of
Franklin, State of Ohio. The general business of the Association shall be
conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five Directors, the exact number of
Directors within such minimum and maximum limits to be fixed and determined from
time-to-time by resolution of the shareholders at any annual or special meeting
thereof, provided, however, that the Board of Directors, by resolution of a
majority thereof, shall be authorized to increase the number of its members by
not more than two between regular meetings of the shareholders. Each Director,
during the full term of his directorship, shall own, as qualifying shares, the
minimum number of shares of either this Association or of its parent bank
holding company in accordance with the provisions of applicable law. Unless
otherwise provided by the laws of the United States, any vacancy in the Board of
Directors for any reason, including an increase in the number thereof, may be
filled by action of the Board of Directors.
FOURTH. The annual meeting of the shareholders for the election of
Directors and the transaction of whatever other business may be brought before
said meeting shall be held at the main office of this Association or such other
place as the Board of Directors may designate, on the day of each year specified
therefor in the By-Laws, but if no election is held on that day, it may be held
on any subsequent business day according to the provisions of law; and all
elections shall be held according to such lawful regulations as may be
prescribed by the Board of Directors.
FIFTH. The authorized amount of capital stock of this Association shall be
2,073,750 shares of common stock of the par value of Ten Dollars ($10) each; but
said capital stock may be increased or decreased from time-to-time, in
accordance with the provisions of the
3
<PAGE>
laws of the United States.
No holder of shares of the capital stock of any class of the
Association shall have the preemptive or preferential right of subscription to
any share of any class of stock of this Association, whether now or hereafter
authorized or to any obligations convertible into stock of this Association,
issued or sold, nor any right of subscription to any thereof other than such, if
any, as the Board of Directors, in its discretion, may from time-to-time
determine and at such price as the Board of Directors may from time-to-time fix.
This Association, at any time and from time-to-time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH. The Board of Directors shall appoint one of its members President
of the Association, who shall be Chairman of the Board, unless the Board
appoints another director to be the Chairman. The Board of Directors shall have
the power to appoint one or more Vice Presidents and to appoint a Secretary and
such other officers and employees as may be required to transact the business of
this Association.
The Board of Directors shall have the power to define the duties of
the officers and employees of this Association; to fix the salaries to be paid
to them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of this
Association shall be made; to manage and administer the business and affairs of
this Association; to make all By-Laws that it may be lawful for them to make;
and generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Columbus, Ohio, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of this Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
- 4 -
<PAGE>
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than 10 percent of the stock of
this Association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the laws of the United States, a notice of the
time, place and purpose of every annual and special meeting of the shareholders
shall be given by first-class mail, postage prepaid, mailed at least ten days
prior to the date of such meeting to each shareholder of record at his address
as shown upon the books of this Association.
TENTH. Every person who is or was a Director, officer or employee of the
Association or of any other corporation which he served as a Director, officer
or employee at the request of the Association as part of his regularly assigned
duties may be indemnified by the Association in accordance with the provisions
of this paragraph against all liability (including, without limitation,
judgments, fines, penalties and settlements) and all reasonable expenses
(including, without limitation, attorneys' fees and investigative expenses) that
may be incurred or paid by him in connection with any claim, action, suit or
proceeding, whether civil, criminal or administrative (all referred to hereafter
in this paragraphs as "Claims") or in connection with any appeal relating
thereto in which he may become involved as a party or otherwise or with which he
may be threatened by reason of his being or having been a Director, officer or
employee of the Association or such other corporation, or by reason of any
action taken or omitted by him in his capacity as such Director, officer or
employee, whether or not he continues to be such at the time such liability or
expenses are incurred, provided that nothing contained in this paragraph shall
be construed to permit indemnification of any such person who is adjudged guilty
of, or liable for, willful misconduct, gross neglect of duty or criminal acts,
unless, at the time such indemnification is sought, such indemnification in such
instance is permissible under applicable law and regulations, including
published rulings of the Comptroller of the Currency or other appropriate
supervisory or regulatory authority, and provided further that there shall be no
indemnification of directors, officers, or employees against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by an appropriate regulatory agency which proceeding or action
results in a final order
- 5 -
<PAGE>
assessing civil money penalties or requiring affirmative action by an individual
or individuals in the form of payments to the Association. Every person who may
be indemnified under the provisions of this paragraph and who has been wholly
successful on the merits with respect to any Claim shall be entitled to
indemnification as of right. Except as provided in the preceding sentence, any
indemnification under this paragraph shall be at the sole discretion of the
Board of Directors and shall be made only if the Board of Directors or the
Executive Committee acting by a quorum consisting of Directors who are not
parties to such Claim shall find or if independent legal counsel (who may be the
regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that in view of all of the circumstances then surrounding the
Claim, such indemnification is equitable and in the best interests of the
Association. Among the circumstances to be taken into consideration in arriving
at such a finding or opinion is the existence or non-existence of a contract of
insurance or indemnity under which the Association would be wholly or partially
reimbursed for such indemnification, but the existence or non-existence of such
insurance is not the sole circumstance to be considered nor shall it be wholly
determinative of whether such indemnification shall be made. In addition to
such finding or opinion, no indemnification under this paragraph shall be made
unless the Board of Directors or the Executive Committee acting by a quorum
consisting of Directors who are not parties to such Claim shall find or if
independent legal counsel (who may be the regular counsel of the Association)
selected by the Board of Directors or Executive Committee whether or not a
disinterested quorum exists shall render their opinion that the Director,
officer or employee acted in good faith in what he reasonably believed to be the
best interests of the Association or such other corporation and further in the
case of any criminal action or proceeding, that the Director, officer or
employee reasonably believed his conduct to be lawful. Determination of any
Claim by judgment adverse to a Director, officer or employee by settlement with
or without Court approval or conviction upon a plea of guilty or of
NOLOCONTENDERE or its equivalent shall not create a presumption that a Director,
officer or employee failed to meet the standards of conduct set forth in this
paragraph. Expenses incurred with respect to any Claim may be advanced by the
Association prior to the final disposition thereof upon receipt of an
undertaking satisfactory to the Association by or on behalf of the recipient to
repay such amount unless it is ultimately determined that he is entitled to
indemnification under this paragraph. The rights of indemnification provided in
- 6 -
<PAGE>
this paragraph shall be in addition to any rights to which any Director, officer
or employee may otherwise be entitled by contract or as a matter of law. Every
person who shall act as a Director, officer or employee of this Association
shall be conclusively presumed to be doing so in reliance upon the right of
indemnification provided for in this paragraph.
- 7 -
<PAGE>
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.
- 8 -
<PAGE>
Exhibit 4
BY-LAWS
OF
BANK ONE, COLUMBUS, NATIONAL ASSOCIATION
ARTICLE I
MEETING OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the Shareholders
of the Bank for the election of Directors and for the transaction of such
business as may properly come before the meeting shall be held at its main
banking house, or other convenient place duly authorized by the Board of
Directors, on the third Monday of January of each year, or on the next
succeeding banking day, if the day fixed falls on a legal holiday. If from any
cause, an election of directors is not made on the day fixed for the regular
meeting of shareholders or, in the event of a legal holiday, on the next
succeeding banking day, the Board of Directors shall order the election to be
held on some subsequent day, as soon thereafter as practicable, according to the
provisions of law; and notice thereof shall be given in the manner herein
provided for the annual meeting. Notice of such annual meeting shall be given
by or under the direction of the Secretary or such other officer as may be
designated by the Chief Executive Officer by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank mailed not less than ten days prior to the date fixed
for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of this
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
this Bank. The notice of any special meeting of the shareholders called by the
Board of Directors, stating the time, place and purpose of the meeting, shall be
given by or under the direction of the Secretary, or such other officer as is
designated by the Chief Executive Officer, by first-class mail, postage prepaid,
to all shareholders of record of the Bank at their respective addresses as shown
upon the books of the Bank, mailed not less than ten days prior to the date
fixed for such meeting.
Any special meeting of shareholders shall be conducted and its proceedings
recorded in the manner prescribed in these By-Laws for annual meetings of
shareholders.
- 9 -
<PAGE>
SECTION 1.03. SECRETARY OF SHAREHOLDERS' MEETING. The Board of Directors may
designate a person to be the Secretary of the meetings of shareholders. In the
absence of a presiding officer, as designated in these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a Secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as Secretary
of the meeting.
The Secretary of the meetings of shareholders shall cause the returns made
by the judges and election and other proceedings to be recorded in the minute
book of the Bank. The presiding officer shall notify the directors-elect of
their election and to meet forthwith for the organization of the new board.
The minutes of the meeting shall be signed by the presiding officer and the
Secretary designated for the meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many
as three shareholders to be judges of the election, who shall hold and conduct
the same, and who shall, after the election has been held, notify, in writing
over their signatures, the secretary of the shareholders' meeting of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
directors, to serve, the presiding officer of the meeting shall appoint other
shareholders or their proxies to fill the vacancies. The judges of election at
the request of the chairman of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall notify, in writing over their
signatures, the secretary of the Board of Directors of the result thereof.
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in his name for as many persons
as there are Directors to be
- 10 -
<PAGE>
elected, or to cumulate such shares as provided by Federal Law. In deciding all
other questions at meetings of shareholders, each shareholder shall be entitled
to one vote on each share of stock of record in his name. Shareholders may vote
by proxy duly authorized in writing. All proxies used at the annual meeting
shall be secured for that meeting only, or any adjournment thereof, and shall be
dated, and if not dated by the shareholder, shall be dated as of the date of
receipt thereof. No officer or employee of this Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and consti- tuting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
- 11 -
<PAGE>
ARTICLE II
DIRECTORS
SECTION 2.01. MANAGEMENT OF THE BANK. The business of the Bank shall be
managed by the Board of Directors. Each director of the Bank shall be the
beneficial owner of a substantial number of shares of BANC ONE CORPORATION and
shall be employed either in the position of Chief Executive Officer or active
leadership within his or her business, professional or community interest which
shall be located within the geographic area in which the Bank operates, or as an
executive officer of the Bank. A director shall not be eligible for nomination
and re-election as a director of the Bank if such person's executive or
leadership position within his or her business, professional or community
interests which qualifies such person as a director of Bank terminates. The age
of 70 is the mandatory retirement age as a director of the Bank. When a
person's eligibility as director of the Bank terminates, whether because of
change in share ownership, position, residency or age, within 30 days after such
termination, such person shall submit his resignation as a director to be
effective at the pleasure of the Board provided, however, that in no event shall
such person be nominated or elected as a director. Provided, however, following
a person's retirement or resignation as a director because of the age
limitations herein set forth with respect to election or re-election as a
director, such person may, in special or unusual circumstances, and at the
discretion of the Board, be elected by the directors as a Director Emeritus of
the Bank for a limited period of time. A Director Emeritus shall have the right
to participate in board meetings but shall be without the power to vote and
shall be subject to re-election by the Board at its organizational meeting
following the Bank's annual meeting of shareholders.
SECTION 2.02. QUALIFICATIONS. Each director shall have the qualification
prescribed by law. No person elected a director may exercise any of the powers
of his office until he has taken the oath of such office.
SECTION 2.03. TERM OF OFFICE/VACANCIES. A director shall hold office until the
annual meeting for the year in which his term expires and until his successor
shall be elected and shall qualify, subject, however, to his prior death,
resignation, or removal from office.
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Whenever any vacancy shall occur among the directors, the remaining directors
shall constitute the directors of the Bank until such vacancy is filled by the
remaining directors, and any director so appointed shall hold office for the
unexpired term of his or her successor. Notwithstanding the foregoing, each
director shall hold office and serve at the pleasure of the Board.
SECTION 2.04. ORGANIZATION MEETING. The directors elected by the share-
holders shall meet for organization of the new board at the time fixed by the
presiding officer of the annual meeting. If at the time fixed for such meeting
there is no quorum present, the Directors in attendance may adjourn from time to
time until a quorum is obtained. A majority of the number of Directors elected
by the shareholders shall constitute a quorum for the transaction of business.
SECTION 2.05. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held on the third Monday of each calendar month excluding March and
July, which meeting will be held at 4:00 p.m. When any regular meeting of the
Board falls on a holiday, the meeting shall be held on such other day as the
Board may previously designate or should the Board fail to so designate, on such
day as the Chairman of the Board of President may fix. Whenever a quorum is not
present, the directors in attendance shall adjourn the meeting to a time not
later than the date fixed by the Bylaws for the next succeeding regular meeting
of the Board.
SECTION 2.06. SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held at the call of the Chairman of the Board or President, or at the
request of two or more Directors. Any special meeting may be held at such place
in Franklin County, Ohio, and at such time as may be fixed in the call. Written
or oral notice shall be given to each Director not later than the day next
preceding the day on which special meeting is to be held, which notice may be
waived in writing. The presence of a Director at any meeting of the Board shall
be deemed a waiver of notice thereof by him. Whenever a quorum is not present
the Directors in attendance shall adjourn the special meeting from day to day
until a quorum is obtained.
SECTION 2.07. QUORUM. A majority of the Directors shall constitute a quorum at
any
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meeting, except when otherwise provided by law; but a lesser number may adjourn
any meeting, from time-to-time, and the meeting may be held, as adjourned,
without further notice. When, however, less than a quorum as herein defined,
but at least one-third and not less than two of the authorized number of
Directors are present at a meeting of the Directors, business of the Bank may be
transacted and matters before the Board approved or disapproved by the unanimous
vote of the Directors present.
SECTION 2.08. COMPENSATION. Each member of the Board of Directors shall
receive such fees for, and transportation expenses incident to, attendance at
Board and Board Committee Meetings and such fees for service as a Director
irrespective of meeting attendance as from time to time are fixed by resolution
of the Board; provided, however, that payment hereunder shall not be made to a
Director for meetings attended and/or Board service which are not for the Bank's
sole benefit and which are concurrent and duplicative with meetings attended or
board service for an affiliate of the Bank for which the Director receives
payment; and provided further, that payment hereunder shall not be made in the
case of any Director in the regular employment of the Bank or of one of its
affiliates.
SECTION 2.09. EXECUTIVE COMMITTEE. There shall be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all powers of the Board that may
lawfully be delegated. The Executive Committee shall also exercise the powers
of the Board of Directors in accordance with the Provisions of the "Employees
Retirement Plan" and the "Agreement and Declaration of Trust" as the same now
exist or may be amended hereafter. The Executive Committee shall consist of not
fewer than four board members, including the Chairman of the Board and President
of the Bank, one of whom, as hereinafter required by these By-laws, shall be the
Chief Executive Officer. The other members of the Committee shall be appointed
by the Chairman of the Board or by the President, with the approval of the Board
and shall continue as members of the Executive Committee until their successors
are appointed, provided, however, that any member of the Executive Committee may
be removed by the Board upon a majority vote thereof at any regular or special
meeting of the Board. The Chairman or President shall fill any vacancy in the
Committee by the appointment of another Director, subject to the approval of the
Board of Directors. The regular meetings of the Executive Committee shall be
held on a regular basis as scheduled
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by the Board of Directors. Special meetings of the Executive Committee shall be
held at the call of the Chairman or President or any two members thereof at such
time or times as may be designated. In the event of the absence of any member
or members of the Committee, the presiding member may appoint a member or
members of the Board to fill the place or places of such absent member or
members to serve during such absence. Not fewer than three members of the
Committee must be present at any meeting of the Executive Committee to
constitute a quorum, provided, however that with regard to any matters on which
the Executive Committee shall vote, a majority of the Committee members present
at the meeting at which a vote is to be taken shall not be officers of the Bank
and, provided further, that if, at any meeting at which the Chairman of the
Board and President are both present, Committee members who are not officers are
not in the majority, then the Chairman of the Board or President, which ever of
such officers is not also the Chief Executive Officer, shall not be eligible to
vote at such meeting and shall not be recognized for purposes of determining if
a quorum is present at such meeting. When neither the Chairman of the Board nor
President are present, the Committee shall appoint a presiding officer. The
Executive Committee shall keep a record of its proceedings and report its
proceedings and the action taken by it to the Board of Directors.
SECTION 2.10 COMMUNITY REINVESTMENT ACT AND COMPLIANCE POLICY COMMITTEE. There
shall be a standing committee of the Board of Directors known as the Community
Reinvestment Act and Compliance Policy Committee the duties of which shall be,
at least once in each calendar year, to review, develop and recommend policies
and programs related to the Bank's Community Reinvestment Act Compliance and
regulatory compliance with all existing statutes, rules and regulations
affecting the Bank under state and federal law. Such Committee shall provide
and promptly make a full report of such review of current Bank policies with
regard to Community Reinvestment Act and regulatory compliance in writing to the
Board, with recommendations, if any, which may be necessary to correct any
unsatisfactory conditions. Such Committee may, in its discretion, in fulfilling
its duties, utilize the Community Reinvestment Act officers of the Bank, Banc
One Ohio Corporation and Banc One Corporation and may engage outside Community
Reinvestment Act experts, as approved by the Board, to review, develop and
recommend policies and programs as herein required. The Community Reinvestment
Act and regulatory compliance policies and procedures established and the
recommendations made shall be consistent
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with, and shall supplement, the Community Reinvestment Act and regulatory
compliance programs, policies and procedures of Banc One Corporation and Banc
One Ohio Corporation. The Community Reinvestment Act and Compliance Policy
Committee shall consist of not fewer than four board members, one of whom shall
be the Chief Executive Officer and a majority of whom are not officers of the
Bank. Not fewer than three members of the Committee, a majority of whom are not
officers of the Bank, must be present to constitute a quorum. The Chairman of
the Board or President of the Bank, whichever is not the Chief Executive
Officer, shall be an ex officio member of the Community Reinvestment Act and
Compliance Policy Committee. The Community Reinvestment Act and Compliance
Policy Committee, whose chairman shall be appointed by the Board, shall keep a
record of its proceedings and report its proceedings and the action taken by it
to the Board of Directors.
SECTION 2.11. TRUST COMMITTEES. There shall be two standing Committees known
as the Trust Management Committee and the Trust Examination Committee appointed
as hereinafter provided.
SECTION 2.12. OTHER COMMITTEES. The Board of Directors may appoint such
special committees from time to time as are in its judgment necessary in the
interest of the Bank.
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ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.
(a) The officers of the Bank shall include a President, Secretary and
Security Officer and may include a Chairman of the Board, one or more
Vice Chairmen, one or more Vice Presidents (which may include one or
more Executive Vice Presidents and/or Senior Vice Presidents) and one
or more Assistant Secretaries, all of whom shall be elected by the
Board. All other officers may be elected by the Board or appointed in
writing by the Chief Executive Officer. The salaries of all officers
elected by the Board shall be fixed by the Board. The Board from
time-to-time shall designate the President or Chairman of the Board to
serve as the Bank's Chief Executive Officer.
(b) The Chairman of the Board, if any, and the President shall be elected
by the Board from their own number. The President and Chairman of the
Board shall be re-elected by the Board annually at the organizational
meeting of the Board of Directors following the Annual Meeting of
Shareholders. Such officers as the Board shall elect from their own
number shall hold office from the date of their election as officers
until the organization meeting of the Board of Directors following the
next Annual Meeting of Shareholders, provided, however, that such
officers may be relieved of their duties at any time by action of the
Board in which event all the powers incident to their office shall
immediately terminate.
(c) Except as provided in the case of the elected officers who are members
of the Board, all officers, whether elected or appointed, shall hold
office at the pleasure of the Board. Except as otherwise limited by
law or these By-laws, the Board assigns to Chief Executive Officer
and/or his designees the authority to appoint and dismiss any elected
or appointed officer or other member of the Bank's management staff
and other employees of the Bank, as the person in charge of and
responsible for any branch office, department, section, operation,
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function, assignment or duty in the Bank.
(d) The management staff of the Bank shall include officers elected by the
Board, officers appointed by the Chief Executive Officer, and such
other persons in the employment of the Bank who, pursuant to written
appointment and authorization by a duly authorized officer of the
Bank, perform management functions and have management responsi-
bilities. Any two or more offices may be held by the same person
except that no person shall hold the office of Chairman of the Board
and/or President and at the same time also hold the office of
Secretary.
(e) The Chief Executive Officer of the Bank and any other officer of the
Bank, to the extent that such officer is authorized in writing by the
Chief Executive Officer, may appoint persons other than officers who
are in the employment of the Bank to serve in management positions and
in connection therewith, the appointing officer may assign such title,
salary, responsibilities and functions as are deemed appropriate by
him, provided, however, that nothing contained herein shall be
construed as placing any limitation on the authority of the Chief
Executive Officer as provided in this and other sections of these
By-Laws.
SECTION 3.02. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Bank
shall have general and active management of the business of the Bank and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. Except as otherwise prescribed or limited by these By-Laws, the Chief
Executive Officer shall have full right, authority and power to control all
personnel, including elected and appointed officers, of the Bank, to employ or
direct the employment of such personnel and officers as he may deem necessary,
including the fixing of salaries and the dismissal of them at pleasure, and to
define and prescribe the duties and responsibility of all Officers of the Bank,
subject to such further limitations and directions as he may from time-to-time
deem proper. The Chief Executive Officer shall perform all duties incident to
his office and such other and further duties, as may, from time-to-time, be
required of him by the Board of Directors or the shareholders. The
specification of authority in these By-Laws wherever and to whomever granted
shall not be construed to limit in any manner the general powers of delegation
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granted to the Chief Executive Officer in conducting the business of the Bank.
The Chief Executive Officer or, in his absence, the Chairman of the Board or
President of the Bank, as designated by the Chief Executive Officer, shall
preside at all meetings of shareholders and meetings of the Board. In the
absence of the Chief Executive Officer, such officer as is designated by the
Chief Executive Officer shall be vested with all the powers and perform all the
duties of the Chief Executive Officer as defined by these By-Laws. When
designating an officer to serve in his absence, the Chief Executive Officer
shall select an officer who is a member of the Board of Directors whenever such
officer is available.
SECTION 3.03. POWERS OF OFFICERS AND MANAGEMENT STAFF. The Chief Executive
Officer, the Chairman of the Board, the President, and those officers so
designated and authorized by the Chief Executive Officer are authorized for an
on behalf of the Bank, and to the extent permitted by law, to make loans and
discounts; to purchase or acquire drafts, notes, stock, bonds, and other
securities for investment of funds held by the Bank; to execute and purchase
acceptances; to appoint, empower and direct all necessary agents and attor-
neys; to sign and give any notice required to be given; to demand payment and/or
to declare due for any default any debt or obligation due or payable to the Bank
upon demand or authorized to be declared due; to foreclose any mortgages, to
exercise any option, privilege or election to forfeit, terminate, extend or
renew any lease; to authorize and direct any proceedings for the collection of
any money or for the enforcement of any right or obligation; to adjust, settle
and compromise all claims of every kind and description in favor of or against
the Bank, and to give receipts, releases and discharges therefor; to borrow
money and in connection therewith to make, execute and deliver notes, bonds or
other evidences of indebtedness; to pledge or hypothe- cate any securities or
any stocks, bonds, notes or any property real or personal held or owned by the
Bank, or to rediscount any notes or other obligations held or owned by the
Bank, to employ or direct the employment of all personnel, including elected and
appointed officers, and the dismissal of them at pleasure, and in furtherance of
and in addition to the powers hereinabove set forth to do all such acts and to
take all such proceedings as in his judgment are necessary and incidental to the
operation of the Bank.
Other persons in the employment of the Bank, including but not limited to
officers and other members of the management staff, may be authorized by the
Chief Executive Officer,
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or by an officer so designated and authorized by the chief Executive Officer, to
perform the powers set forth above, subject, however, to such limitations and
conditions as are set forth in the authorization given to such persons.
SECTION 3.04. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Chief Executive
Officer or the Board of Directors as Assistant Secretary to perform the duties
of the Secretary.
SECTION 3.05. EXECUTION OF DOCUMENTS. The Chief Executive Officer, Chairman of
the Board, President, any officer being a member of the Bank's management staff
who is also a person in charge of and responsible for any department within the
Bank and any other officer to the extent such officer is so designated and
authorized by the Chief Executive Officer, the Chairman of the Board, the
President, or any other officer who is a member of the Bank's management staff
who is in charge of and responsible for any department within the Bank, are
hereby authorized on behalf of the Bank to sell, assign, lease, mortgage,
transfer, deliver and convey any real or personal property now or hereafter
owned by or standing in the name of the Bank or its nominee, or held by this
Bank as collateral security, and to execute and deliver such deeds, contracts,
leases, assignments, bills of sale, transfers or other papers or documents as
may be appropriate in the circumstances; to execute any loan agreement, security
agreement, commitment letters and financing statements and other documents on
behalf of the Bank as a lender; to execute purchase orders, documents and
agreements entered into by the Bank in the ordinary course of business, relating
to purchase, sale, exchange or lease of services, tangible personal property,
materials and equipment for the use of the Bank; to execute powers of attorney
to perform specific or general functions in the name of or on behalf of the
Bank; to execute promissory notes or other instruments evidencing debt of the
Bank; to execute instruments pledging or releasing securities for public funds,
documents submitting public fund bids on behalf of the Bank and public fund
contracts; to purchase and acquire any real or personal property including loan
portfolios and to execute and deliver such agreements, contracts or other papers
or documents as may be appropriate in the circumstances; to
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execute any indemnity and fidelity bonds, proxies or other papers or documents
of like or different character necessary, desirable or incidental to the conduct
of its banking business; to execute and deliver settlement agreements or other
papers or documents as may be appropriate in connection with a dismissal
authorized by Section 3.01(c) of these By-laws; to execute agreements,
instruments, documents, contracts or other papers of like or difference
character necessary, desirable or incidental to the conduct of its banking
business; and to execute and deliver partial releases from and discharges or
assignments of mortgages, financing statements and assignments or surrender of
insurance policies, now or hereafter held by this Bank.
The Chief Executive Officer, Chairman of the Board, President, any officer
being a member of the Bank's management staff who is also a person in charge of
and responsible for any department within the Bank, and any other officer of the
Bank so designated and authorized by the Chief Executive Officer, Chairman of
the Board, President or any officer who is a member of the Bank's management
staff who is in charge of and responsible for any department within the Bank are
authorized for and on behalf of the Bank to sign and issue checks, drafts, and
certificates of deposit; to sign and endorse bills of exchange, to sign and
countersign foreign and domestic letters of credit, to receive and receipt for
payments of principal, interest, dividends, rents, fees and payments of every
kind and description paid to the Bank, to sign receipts for property acquired by
or entrusted to the Bank, to guarantee the genuineness of signatures on
assignments of stocks, bonds or other securities, to sign certifications of
checks, to endorse and deliver checks, drafts, warrants, bills, notes,
certificates of deposit and acceptances in all business transactions of the
Bank.
Other persons in the employment of the Bank and of its subsidiaries,
including but not limited to officers and other members of the management staff,
may be authorized by the Chief Executive Officer, Chairman of the Board,
President or by an officer so designated by the Chief Executive Officer,
Chairman of the Board, or President to perform the acts and to execute the
documents set forth above, subject, however, to such limitations and conditions
as are contained in the authorization given to such person.
SECTION 3.06. PERFORMANCE BOND. All officers and employees of the Bank shall
be bonded for the honest and faithful performance of their duties for such
amount as may be
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prescribed by the Board of Directors.
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ARTICLE IV
TRUST DEPARTMENT
SECTION 4.01. TRUST DEPARTMENT. Pursuant to the fiduciary powers granted to
this Bank under the provisions of Federal Law and Regulations of the Comp-
troller of the Currency, there shall be maintained a separate Trust Department
of the Bank, which shall be operated in the manner specified herein.
SECTION 4.02. TRUST MANAGEMENT COMMITTEE. There shall be a standing Committee
known as the Trust Management Committee, consisting of at least five members, a
majority of whom shall not be officers of the Bank. The Committee shall consist
of the Chairman of the Board who shall be Chairman of the Com- mittee, the
President, and at least three other Directors appointed by the Board of
Directors and who shall continue as members of the Committee until their
successors are appointed. Any vacancy in the Trust Management Committee may be
filled by the Board at any regular or special meeting. In the event of the
absence of any member or members, such Committee may, in its discretion, appoint
members of the Board to fill the place of such absent members to serve during
such absence. Three members of the Committee shall constitute a quorum. Any
member of the Committee may be removed by the Board by a majority vote at any
regular or special meeting of the Board. The Committee shall meet at such times
as it may determine or at the call of the Chairman, or President or any two
members thereof.
The Trust Management Committee, under the general direction of the Board of
Directors, shall supervise the policy of the Trust Department which shall be
formulated and executed in accordance with Law, Regulations of the Comp- troller
of the Currency, and sound fiduciary principles.
SECTION 4.03. TRUST EXAMINATION COMMITTEE. There shall be a standing Commit-
tee known as the Trust Examination Committee, consisting of three directors
appointed by the Board of Directors and who shall continue as members of the
committee until their successors are appointed. Such members shall not be
active officers of the Bank. Two members of the Committee shall constitute a
quorum. Any member of the Committee may
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be removed by the Board by a majority vote at any regular or special meeting of
the Board. The Committee shall meet at such times as it may determine or at the
call of two members thereof.
This Committee shall, at least once during each calendar year and within
fifteen months of the last such audit, or at such other time(s) as may be
required by Regulations of the Comptroller of the Currency, make suitable audits
of the Trust Department or cause suitable audits to be made by auditors
responsible only to the Board of Directors, and at such time shall ascertain
whether the Department has been administered in accordance with Law, Regula-
tions of the Comptroller of the Currency and sound fiduciary principles.
The Committee shall promptly make a full report of such audits in writing
to the Board of Directors of the Bank, together with a recommendation as to what
action, if any, may be necessary to correct any unsatisfactory condition. A
report of the audits together with the action taken thereon shall be noted in
the Minutes of the Board of Directors and such report shall be a part of the
records of this Bank.
SECTION 4.04. MANAGEMENT. The Trust Department shall be under the management
and supervision of an officer of the Bank or of the trust affiliate of the Bank
designated by and subject to the advice and direction of the Chief Executive
Officer. Such officer having supervisory responsibility over the Trust
Department shall do or cause to be done all things necessary or proper in
carrying on the business of the Trust Department in accordance with provi- sions
of law and applicable regulations.
SECTION 4.05. HOLDING OF PROPERTY. Property held by the Trust Department may
be carried in the name of the Bank in its fiduciary capacity, in the name of
Bank, or in the name of a nominee or nominees.
SECTION 4.06. TRUST INVESTMENTS. Funds held by the Bank in a fiduciary
capacity awaiting investment or distribution shall not be held uninvested or
undistributed any longer than is reasonable for the proper management of the
account and shall be invested in accordance with the instrument establishing a
fiduciary relationship and local law. Where such instrument does not specify
the character or class of investments to be made and does not vest in the Bank
any discretion in the matter, funds held pursuant to such
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instrument shall be invested in any investment which corporate fiduciaries may
invest under local law.
The investments of each account in the Trust Department shall be kept
separate from the assets of the Bank, and shall be placed in the joint custody
or control of not less than two of the officers or employees of the Bank or of
the trust affiliate of the Bank designated for the purpose by the Trust
Management Committee.
SECTION 4.07. EXECUTION OF DOCUMENTS. The Chief Executive Officer, Chairman of
the Board, President, any officer of the Trust Department, and such other
officers of the trust affiliate of the Bank as are specifically designated and
authorized by the Chief Executive Officer, the President, or the officer in
charge of the Trust Department, are hereby authorized, on behalf of this Bank,
to sell, assign, lease, mortgage, transfer, deliver and convey any real property
or personal property and to purchase and acquire any real or personal property
and to execute and deliver such agreements, contracts, or other papers and
documents as may be appropriate in the circumstances for property now or
hereafter owned by or standing in the name of this Bank, or its nominee, in any
fiduciary capacity, or in the name of any principal for whom this Bank may now
or hereafter be acting under a power of attorney, or as agent and to execute and
deliver partial releases from any discharges or assignments or mortgages and
assignments or surrender of insurance policies, to execute and deliver deeds,
contracts, leases, assignments, bills of sale, transfers or such other papers or
documents as may be appropriate in the circumstances for property now or
hereafter held by this Bank in any fiduciary capacity or owned by any principal
for whom this Bank may now or hereafter be acting under a power of attorney or
as agent; to execute and deliver settlement agreements or other papers or
documents as may be appropriate in connection with a dismissal authorized by
Section 3.01(c) of these By-laws; provided that the signature of any such person
shall be attested in each case by any officer of the Trust Department or by any
other person who is specifically authorized by the Chief Executive Officer, the
President or the officer in charge of the Trust Department.
The Chief Executive Officer, Chairman of the Board, President, any officer
of the Trust Department and such other officers of the trust affiliate of the
Bank as are specifically designated and authorized by the Chief Executive
Officer, the President, or the officer in
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charge of the Trust Department, or any other person or corporation as is
specifically authorized by the Chief Executive Officer, the President or the
officer in charge of the Trust Department, are hereby authorized on behalf of
this Bank, to sign any and all pleadings and papers in probate and other court
proceedings, to execute any indemnity and fidelity bonds, trust agreements,
proxies or other papers or documents of like or different character necessary,
desirable or incidental to the appointment of the Bank in any fiduciary capacity
and the conduct of its business in any fiduciary capacity; also to foreclose any
mortgage, to execute and deliver receipts for payments of principal, interest,
dividends, rents, fees and payments of every kind and description paid to the
Bank; to sign receipts for property acquired or entrusted to the Bank; also to
sign stock or bond certificates on behalf of this Bank in any fiduciary capacity
and on behalf of this Bank as transfer agent or registrar; to guarantee the
genuineness of signatures on assignments of stocks, bonds or other securities,
and to authenticate bonds, debentures, land or lease trust certificates or other
forms of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as Trustee. Any such person, as well as such other persons
as are specifically authorized by the Chief Executive Officer or the officer in
charge of the Trust Department, may sign checks, drafts and orders for the
payment of money executed by the Trust Department in the course of its business.
SECTION 4.08. VOTING OF STOCK. The Chairman of the Board, President, any
officer of the Trust Department, any officer of the trust affiliate of the Bank
and such other persons as may be specifically authorized by Resolution of the
Trust Management Committee or the Board of Directors, may vote shares of stock
of a corporation of record on the books of the issuing company in the name of
the Bank or in the name of the Bank as fiduciary, or may grant proxies for the
voting of such stock of the granting if same is permitted by the instrument
under which the Bank is acting in a fiduciary capacity, or by the law applicable
to such fiduciary account. In the case of shares of stock which are held by a
nominee of the Bank, such shares may be voted by such person(s) authorized by
such nominee.
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ARTICLE V
STOCKS AND STOCK CERTIFICATES
SECTION 5.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the President, or a Vice President (which signature may be engraved,
printed or impressed), and shall be signed manually by the Secretary, or any
other officer appointed by the Chief Executive Officer for that purpose.
In case any such officer who has signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its fact
that the stock represented thereby is transferable only upon the books of the
Bank properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.
SECTION 5.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall
be transferable only upon the stock transfer books of the Bank and except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of any affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the President, or a Vice President. The Board of Directors, or the Chief
Executive Officer, may authorize the issuance of a new certificate therefor
without the furnishing of indemnity. Stock Transfer Books, in which all
transfers of stock shall be recorded, shall be provided.
The stock transfer books may be closed for a reasonable period and under
such conditions as the Board of Directors may at any time determine for any
meeting of shareholders, the payment of dividends or any other lawful purpose.
In lieu of closing the transfer books, the Board may, in its discretion, fix a
record date and hour constituting a
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reasonable period prior to the day designated for the holding of any meeting of
the shareholders or the day appointed for the payment of any dividend or for any
other purpose at the time as of which shareholders entitled to notice of and to
vote at any such meeting or to receive such dividend or to be treated as
shareholders for such other purpose shall be determined, and only shareholders
of record at such time shall be entitled to notice of or to vote at such meeting
or to receive such dividends or to be treated as shareholders for such other
purpose.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. SEAL. The impression made below is an impression of the seal
adopted by the Board of Directors of BANK ONE, COLUMBUS, NATIONAL ASSOCIATION.
The Seal may be affixed by any officer of the Bank to any document executed by
an authorized officer on behalf of the Bank, and any officer may certify any
act, proceedings, record, instrument or authority of the Bank.
SECTION 6.02. BANKING HOURS. Subject to ratification by the Executive
Committee, the Bank and each of its Branches shall be open for business on such
days and during such hours as the Chief Executive Officer of the Bank shall,
from time to time, prescribe.
SECTION 6.03. MINUTE BOOK. The organization papers of this Bank, the Articles
of Association, the returns of the judges of elections, the By-Laws and any
amendments thereto, the proceedings of all regular and special meetings of the
shareholders and of the Board of Directors, and reports of the committees of the
Board of Directors shall be recorded in the minute book of the Bank. The
minutes of each such meeting shall be signed by the presiding Officer and
attested by the secretary of the meetings.
SECTION 6.04. AMENDMENT OF BY-LAWS. These By-Laws may be amended by vote of a
majority of the Directors.
- 29 -
<PAGE>
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
CONSENT
The undersigned, designated to act as Trustee under the Indenture for
Consolidated Freightways, Inc. described in the attached Statement of
Eligibility and Qualification, does hereby consent that reports of examinations
by Federal, State, Territorial, or District Authorities may be furnished by such
authorities to the Commission upon the request of the Commission.
This Consent is given pursuant to the provision of Section 321(b) of the Trust
Indenture Act of 1939, as amended.
Bank One, Columbus, NA
Dated: June 9, 1995 By: /s/ Stephen W. Boughton
___________________________
Stephen W. Boughton
Authorized Signer
- 30 -
<PAGE>
EXHIBIT 7
Legal Title of Bank: BANK ONE, COLUMBUS, NA
Address: 100 East Broad Street
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
Call Date: 3/31/95 ST-BK: 39-1580 FFIEC 03X
Page RC-1
- ------------------------------------------------------------------------------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of
the quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
----
C400
------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS //////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): //////////////////
a. Noninterest-bearing balances and currency and coin(1) ..................................... 0081 465,196 1.a.
b. Interest-bearing balances(2) .............................................................. 0071 0 1.b.
2. Securities: //////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A) ................................ 1754 93,518 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) .............................. 1773 614,195 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices //////////////////
of the bank and of its Edge and Agreement subsidiaries, and in IBFs: //////////////////
a. Federal funds sold ........................................................................ 0276 88,583 3.a.
b. Securities purchased under agreements to resell ........................................... 0277 50,042 3.b.
4. Loans and lease financing receivables: //////////////////
------------------------ //////////////////
a. Loans and leases, net of unearned income (from Schedule RC-C) .... RCFD 2122 4,836,701 ////////////////// 4.a.
b. LESS: Allowance for loan and lease losses ........................ RCFD 3123 121,303 ////////////////// 4.b.
c. LESS: Allocated transfer risk reserve ............................ RCFD 3128 0 ////////////////// 4.c.
------------------------ //////////////////
d. Loans and leases, net of unearned income, //////////////////
allowance, and reserve (item 4, a minus 4.b and 4.c ....................................... 2125 4,715,398 4.d.
5. Trading assets (from Schedule RC-D) .......................................................... 3545 0 5.
6. Premises and fixed assets (including capitalized leases) ..................................... 2145 56,018 6.
7. Other real estate owned (from Schedule RC-M) ................................................. 2150 2,161 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-H) ..... 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding ................................. 2155 7,771 9.
10. Intangible assets (from Schedule RC-M) ....................................................... 2143 45,345 10.
11. Other assets (from Schedule RC-F) ............................................................ 2160 329,070 11.
12. Total assets (sum of items 1 through 11) ..................................................... 2170 6,467,297 12.
------------------
<FN>
_______________________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
- 31 -
<PAGE>
Legal Title of Bank: BANK ONE, COLUMBUS, NA
Address: 100 East Broad Street
City, State Zip: Columbus, OH 43271-1066
FDIC Certificate No.: 06559
Call Date: 3/31/95 ST-BK: 39-1580 FFIEC 03X
Page RC-2
- -------------------------------------------------------------------------------
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
----------------------
Dollar Amounts in Thousands //////// Bil Mil Thou
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES //////////////////////
13. Deposits: //////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) ..... RCON 2200 3,996,592 13.a.
----------------------- //////////////////////
(1) Noninterest-bearing(1) .................................. RCON 6631 1,081,090 ////////////////////// 13.a.
(2) Interest-bearing ........................................ RCON 6636 2,915,502 ////////////////////// 13.a.
----------------------- //////////////////////
b. Inforeign offices, Edge and Agreement subsidiaries, and IBF's (from Schedule RC-E, //////////////////////
part II) .............................................................................. RCFW 2200 230,197 13.b.
----------------------- //////////////////////
(1) Noninterest-bearing ..................................... RCFW 6631 0 ////////////////////// 13.b.
(2) Interest-bearing ........................................ RCFW 6636 230,197 ////////////////////// 13.b.
----------------------- //////////////////////
14. Federal funds purchased and securities sold under agreements to repurchase in domestic //////////////////////
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: //////////////////////
a. Federal funds purchased ............................................................... RCFD 0278 997,615 14.a.
b. Securities sold under agreements to repurchase ........................................ RCFD 0279 0 14.b.
15. a. Demand notes issued to the U.S. Treasury .............................................. RCON 2840 17,242 15.a.
b. Trading liabilities (from Schedule RC-D) .............................................. RCFD 3548 0 15.b.
16. Other borrowed money: //////////////////////
a. With original maturity of one year or less ............................................ RCFD 2332 214,841 16.a.
b. With original maturity of more than one year .......................................... RCFD 2333 1,135 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ........................... RCFD 2910 4,454 17.
18. Bank's liability on acceptances executed and outstanding ................................. RCFD 2920 7,771 18.
19. Subordinated notes and debentures ........................................................ RCFD 3200 189,179 19.
20. Other liabilities (from Schedule RC-G) ................................................... RCFD 2930 232,643 20.
21. Total liabilities (sum of Items 13 through 20) ........................................... RCFD 2948 5,891,669 21.
//////////////////////
22. Limited-life preferred stock and related surplus ........................................ RCFD 3282 0 22.
EQUITY CAPITAL //////////////////////
23. Perpetual preferred stock and related surplus ........................................... RCFD 3838 0 23.
24. Common stock ............................................................................ RCFD 3230 20,738 24.
25. Surplus (exclude all surplus related to preferred stock) ................................ RCFD 3839 107,356 25.
26. a. Undivided profits and capital reserves ............................................... RCFD 3632 447,414 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ............... RCFD 8434 120 26.b.
27. Cumulative foreign currency translation adjustments ..................................... RCFD 3284 0 27.
28. Total equity capital (sum of items 23 through 27) ....................................... RCFD 3210 575,628 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, //////////////////////
and 28) ................................................................................. RCFD 3300 6,467,297 29.
----------------------
</TABLE>
<TABLE>
<S> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the Number
most comprehensive level of auditing work performed for the bank by independent external ---------------------
auditors as of any date during 1994 .............................................................. RCFD 6724 2 M.1.
----------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a external auditors (may be required by state chartering
certified public accounting firm which submits a report authority)
on the bank 5 = Review of the bank's financial statements by external
2 = Independent audit of the bank's parent holding company auditors
conducted in accordance with generally accepted auditing 6 = Compilation of the bank's financial statements by
standards by a certified public accounting firm which external auditors
submits a report on the consolidated holding company 7 = Other audit procedures (excluding tax preparation work)
(but not on the bank separately) 8 = No external audit work
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
<FN>
_________________________
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
- 32 -
<PAGE>
LETTER OF TRANSMITTAL
CONSOLIDATED FREIGHTWAYS, INC.
OFFER TO EXCHANGE ITS
7.35% NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7.35% NOTES DUE 2005
PURSUANT TO THE PROSPECTUS
DATED , 1995
---------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , 1995, UNLESS THE OFFER IS EXTENDED.
------------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANK ONE, COLUMBUS, NA
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY OR HAND:
- ---------------------------------------------- ----------------------------------------------
Bank One, Columbus, NA Bank One, Columbus, NA
235 West Schrock Road 235 West Schrock Road
Columbus, OH 43271-0184 Westerville, OH 43081
or or
Bank One, Columbus, NA Bank One, Columbus, NA
c/o First Chicago Trust Company of New York c/o First Chicago Trust Company of New York
Attn: Corporate Trust Department Attn: Corporate Trust Department
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, NY 10005 New York, NY 10005
</TABLE>
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(614) 248-4856 (Ohio)
(212) 240-8862 (NY)
FACSIMILE TRANSMISSIONS:
(614) 248-7238 (Ohio)
(212) 240-8988 (NY)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Notes (as
defined below) either if Old Notes are to be forwarded herewith or if tenders of
Old Notes are to be made by book-entry transfer to an account maintained by Bank
One, Columbus, NA (the "Exchange Agent") at The Depository Trust Company ("DTC")
pursuant to the procedures set forth in "The Exchange Offer -- Procedures for
Tendering Old Notes" in the Prospectus.
Holders of Old Notes whose certificates (the "Certificates") for such Old
Notes are not immediately available or who cannot deliver their Certificates and
all other required documents to the Exchange Agent on or prior to the Expiration
Date (as defined in the Prospectus) or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Old Notes according to
the guaranteed delivery procedures set forth in "The Exchange Offer --
Procedures for Tendering Old Notes" in the Prospectus. SEE INSTRUCTION 1.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
DESCRIPTION OF OLD NOTES TENDERED
IF BLANK, PLEASE PRINT NAME AND ADDRESS OF OLD NOTES TENDERED
REGISTERED HOLDER. (ATTACH ADDITIONAL LIST IF NECESSARY)
PRINCIPAL AMOUNT OF
OLD
NOTES TENDERED (IF
CERTIFICATE PRINCIPAL AMOUNT LESS
NUMBER(S)* OF OLD NOTES THAN ALL)**
<S> <C> <C> <C>
TOTAL AMOUNT
TENDERED:
<FN>
* Need not be completed by book-entry holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000 and
integral multiples thereof, provided that if any Old Notes are tendered for
exchange in part, the untendered principal amount thereof must be $250,000
or any integral multiple of $1,000 in excess thereof. All Old Notes held
shall be deemed tendered unless a lesser number is specified in this column.
</TABLE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution _____________________________________________
DTC Account Number ________________________________________________________
Transaction Code Number ___________________________________________________
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holders(s) _____________________________________________
Window Ticket Number (if any) _____________________________________________
Date of Execution of Notice of Guaranteed Delivery ________________________
Name of Institution which Guaranteed Delivery _____________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution ____________________________________________
DTC Account Number _______________________________________________________
Transaction Code Number __________________________________________________
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES
ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Consolidated Freightways, Inc., a Delaware
corporation (the "Company"), the above described aggregate principal amount of
the Company's 7.35% Notes due 2005 (the "Old Notes") in exchange for a like
aggregate principal amount of the Company's 7.35% Notes due 2005 (the "New
Notes") which have been registered under the Securities Act of 1933 (the
"Securities Act"), upon the terms and subject to the conditions set forth in the
Prospectus dated , 1995 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is acknowledged, and in
this Letter of Transmittal (which, together with the Prospectus, constitute the
"Exchange Offer").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to such Old Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (with full knowledge that
the Exchange Agent is also acting as agent of the Company in connection with the
Exchange Offer) with respect to the tendered Old Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus, to (i) deliver Certificates for Old Notes to the Company
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Company, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Notes to be issued in exchange for such Old
Notes, (ii) present Certificates for such Old Notes for transfer, and to
transfer the Old Notes on the books of the Company, and (iii) receive for the
account of the Company all benefits and otherwise exercise all rights of
beneficial ownership of such Old Notes, all in accordance with the terms and
conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL
POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD NOTES
TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, THE COMPANY
WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF
ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE OLD NOTES
TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE
UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS
DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO
COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD NOTES TENDERED HEREBY,
AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION
RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Notes
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Old Notes. The
Certificate number(s) and the Old Notes that the undersigned wishes to tender
should be indicated in the appropriate boxes above.
If any tendered Old Notes are not exchanged pursuant to the Exchange Offer
for any reason, or if Certificates are submitted for more Old Notes than are
tendered or accepted for exchange, Certificates for such nonexchanged or
nontendered Old Notes will be returned (or, in the case of Old Notes tendered by
book-entry transfer, such Old Notes will be credited to an account maintained at
DTC), without expense to the tendering holder, promptly following the expiration
or termination of the Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant to any one of
the procedures described in "The Exchange Offer -- Procedures for Tendering Old
Notes" in the Prospectus and in the instructions hereto will, upon the Company's
acceptance for exchange of such tendered Old Notes, constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Exchange Offer. The undersigned recognizes that, under
certain circumstances set forth in the Prospectus, the Company may not be
required to accept for exchange any of the Old Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Notes be issued
in the name(s) of the undersigned or, in the case of a book-entry transfer of
Old Notes, that such New Notes be credited to the account indicated above
maintained at DTC. If applicable, substitute Certificates representing Old Notes
not exchanged or not accepted for exchange will be issued to the undersigned or,
in the case of a book-entry transfer of Old Notes,
3
<PAGE>
will be credited to the account indicated above maintained at DTC. Similarly,
unless otherwise indicated under "Special Delivery Instructions," please deliver
New Notes to the undersigned at the address shown below the undersigned's
signature.
BY TENDERING OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE COMPANY, (II) ANY NEW NOTES TO BE RECEIVED BY THE UNDERSIGNED
ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED
HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A
DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW NOTES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A
BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE
IN, A DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH NEW NOTES.
BY TENDERING OLD NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER
OF TRANSMITTAL, A HOLDER OF OLD NOTES WHICH IS A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE
DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, THAT (A) SUCH OLD NOTES HELD BY THE BROKER-DEALER ARE HELD ONLY
AS A NOMINEE, OR (B) SUCH OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES
AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO
TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY
RESALE OF SUCH NEW NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A
PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN
"UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN
CONNECTION WITH RESALES OF NEW NOTES RECEIVED IN EXCHANGE FOR OLD NOTES, WHERE
SUCH OLD NOTES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR
A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER
CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN
ALL SUCH NEW NOTES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN
THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING
BROKER-DEALER"), BY TENDERING SUCH OLD NOTES AND EXECUTING THIS LETTER OF
TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE
OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL
RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT
NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE
THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING OR OF THE OCCURENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE
SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED OR
SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS
FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING
BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE NEW NOTES MAY
BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY GIVES SUCH NOTICE TO SUSPEND THE
SALE OF THE NEW NOTES, IT SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE
DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN
CONNECTION WITH THE RESALE OF NEW NOTES BY THE NUMBER OF DAYS DURING THE PERIOD
FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE
DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE
SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE NEW NOTES
OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY HAS GIVEN NOTICE THAT THE SALE
OF NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duly provided for
on such Old Notes prior to the original issue date of the New Notes or, if no
such interest has been paid or duly provided for, will not receive any accrued
interest on such Old Notes, and the undersigned waives the right to receive any
interest on such Old Notes accrued from and after such Interest Payment Date or,
if no such interest has been paid or duly provided for, from and after June 1,
1995.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
4
<PAGE>
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Notes hereby tendered or on a security position
listing, or by any person(s) authorized to become the registered holder(s) by
endorsements and documents transmitted herewith (including such opinions of
counsel, certifications and other information as may be required by the Company
or the Trustee for the Old Notes to comply with the restrictions on transfer
applicable to the Old Notes). If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.
________________________________________________________________________________
________________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Date ________________________, 1995
Name(s) ________________________________________________________________________
(PLEASE PRINT)
Address ________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 2 AND 5)
Authorized Signature ___________________________________________________________
Name ___________________________________________________________________________
(PLEASE PRINT)
Date ________________________, 1995
Capacity or Title ______________________________________________________________
Name of Firm ___________________________________________________________________
Address ________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
5
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the New Notes are to be issued in the name of someone
other than the registered holder of the Old Notes whose name(s) appear(s) above.
Issue New Notes to:
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if New Notes are to be sent to someone other than the
registered holder of the Old Notes whose name(s) appear(s) above, or to such
registered holder(s) at an address other than that shown above.
Mail New Notes to:
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
OfferProcedures for Tendering Old Notes" in the Prospectus. Certificates, or
timely confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC, as well as this Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal, must
be received by the Exchange Agent at one of its addresses set forth herein on or
prior to the Expiration Date. Old Notes may be tendered in whole or in part in
the principal amount of $1,000 and integral multiples of $1,000, provided that,
if any Old Notes are tendered for exchange in part, the untendered principal
amount thereof must be $250,000 or any integral multiple of $1,000 in excess
thereof.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent on or prior
to the Expiration Date or (iii) who cannot complete the procedures for delivery
by book-entry transfer on a timely basis, may tender their Old Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures
for Tendering Old Notes" in the Prospectus. Pursuant to such procedures: (i)
such tender must be made by or through an Eligible Institution (as defined
below); (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Company, must be
received by the Exchange Agent on or prior to the Expiration Date; and (iii) the
Certificates (or a book-entry confirmation (as defined in the Prospectus))
representing all tendered Old Notes, in proper form for transfer, together with
a Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
within five New York Stock Exchange, Inc. trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in "The
Exchange Offer -- Procedures for Tendering Old Notes" in the Prospectus.
6
<PAGE>
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Notes to be
properly tendered pursuant to the guaranteed delivery procedure, the Exchange
Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein and in the Prospectus, "Eligible Institution" means a firm
or other entity identified in Rule 17Ad-15 under the Exchange Act as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance of
such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC
whose name appears on a security position listing as the owner of the Old
Notes) of Old Notes tendered herewith, unless such holder(s) has completed
either the box entitled "Special Issuance Instructions" or the box entitled
"Special Delivery Instructions" above, or
(ii) such Old Notes are tendered for the account of a firm that is an
Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Notes" is inadequate, the Certificate number(s) and/or the
principal amount of Old Notes and any other required information should be
listed on a separate signed schedule which is attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be
accepted only in the principal amount of $1,000 and integral multiples thereof,
provided that if any Old Notes are tendered for exchange in part, the untendered
principal amount thereof must be $250,000 or any integral multiple of $1,000 in
excess thereof. If less than all the Old Notes evidenced by any Certificate
submitted are to be tendered, fill in the principal amount of Old Notes which
are to be tendered in the box entitled "Principal Amount of Old Notes Tendered
(if less than all)." In such case, new Certificate(s) for the remainder of the
Old Notes that were evidenced by your old Certificate(s) will only be sent to
the holder of the Old Note, promptly after the Expiration Date. All Old Notes
represented by Certificates delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time on or prior to the Expiration Date. In order for a withdrawal to be
effective on or prior to that time, a written, telegraphic, telex or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus on
or prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Notes to be withdrawn, the aggregate
principal amount of Old Notes to be withdrawn, and (if Certificates for Old
Notes have been tendered) the name of the registered holder of the Old Notes as
set forth on the Certificate for the Old Notes, if different from that of the
person who tendered such Old Notes. If Certificates for the Old Notes have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Certificates for the Old Notes, the tendering holder
must submit the serial numbers shown on the particular
7
<PAGE>
Certificates for the Old Notes to be withdrawn and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution, except in the case
of Old Notes tendered for the account of an Eligible Institution. If Old Notes
have been tendered pursuant to the procedures for book-entry transfer set forth
in "The Exchange Offer -- Procedures for Tendering Old Notes," the notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawal of Old Notes, in which case a notice of withdrawal will be
effective if delivered to the Exchange Agent by written, telegraphic, telex or
facsimile transmission. Withdrawals of tenders of Old Notes may not be
rescinded. Old Notes properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to the Expiration Date by following any of the procedures described in
the Prospectus under "The Exchange Offer -- Procedures for Tendering Old Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Company, any affiliates or assigns of the Company, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification. Any Old Notes which have been tendered
but which are withdrawn will be returned to the holder thereof without cost to
such holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Old
Notes tendered hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the Certificate(s) without alteration, enlargement or
any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different name(s) on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to the Company, in its sole discretion, of such persons' authority
to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Notes listed and transmitted hereby, no endorsement(s) of Certificate(s) or
separate bond power(s) are required unless New Notes are to be issued in the
name of a person other than the registered holder(s). Signature(s) on such
Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Notes listed, the Certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name or names
of the registered owner(s) appear(s) on the Certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
the Company or the Trustee for the Old Notes may require in accordance with the
restrictions on transfer applicable to the Old Notes. Signatures on such
Certificates or bond powers must be guaranteed by an Eligible Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Notes are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Notes are to be sent to someone other than the signer of
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Notes not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Company will determine, in its sole discretion, all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Old Notes, which
determination shall be final and binding on all parties. The Company reserves
the absolute
8
<PAGE>
right to reject any and all tenders determined by it not to be in proper form or
the acceptance of which, or exchange for, may, in the view of counsel to the
Company, be unlawful. The Company also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer set forth
in the Prospectus under "The Exchange Offer -- Certain Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Old Notes of
any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The Company's interpretation of the terms and conditions of the Exchange
Offer (including this Letter of Transmittal and the instructions hereto) will be
final and binding. No tender of Old Notes will be deemed to have been validly
made until all irregularities with respect to such tender have been cured or
waived. Neither the Company, any affiliates or assigns of the Company, the
Exchange Agent, nor any other person shall be under any duty to give
notification of any irregularities in tenders or incur any liability for failure
to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Exchange Agent at its address and
telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a holder whose tendered Old Notes are accepted for exchange is required
to provide the Exchange Agent with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the Exchange Agent is not
provided with the correct TIN, the Internal Revenue Service (the "IRS") may
subject the holder or other payee to a $50 penalty. In addition, payments to
such holders or other payees with respect to Old Notes exchanged pursuant to the
Exchange Offer may be subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the tendering
holder has not been issued a TIN and has applied for a TIN or intends to apply
for a TIN in the near future. If the box in Part 2 is checked, the holder or
other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Exchange Agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60 day period following the date of the Substitute Form W-9.
If the holder furnishes the Exchange Agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the Exchange Agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Notes or of the last transferee appearing on the transfers attached to,
or endorsed on, the Old Notes. If the Old Notes are registered in more than one
name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
9
<PAGE>
Backup withholding is not an additional U.S. Federal income tax. Rather, the
U.S. Federal income tax liability of a person 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.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Notes have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the Certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Certificate(s) have been followed.
11. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New Notes are to be delivered to, or are to be issued in
the name of, any person other than the registered holder of the Old Notes
tendered, or if a transfer tax is imposed for any reason other than the exchange
of Old Notes in connection with the Exchange Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with the Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
10
<PAGE>
TO BE COMPLETED BY ALL
TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: BANK ONE, COLUMBUS, NA
<TABLE>
<S> <C> <C>
SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN ____________________
Form W-9 TIN IN THE BOX AT RIGHT AND Social Security Number or
CERTIFY BY SIGNING AND DATING Employer Identification
BELOW Number
Department of the Treasury Part 2
Internal Revenue Service Awaiting TIN / /
CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT (1) the number shown on this form is my correct
taxpayer identification number (or I am waiting for a number
to be issued to me), (2) I am not subject to backup
withholding either because (i) I am exempt from backup
withholding, (ii) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest
or dividends, or (iii) the IRS has notified me that I am no
longer subject to backup withholding, and (3) any other
information provided on this form is true and correct.
Payer's Request for Taxpayer SIGNATURE ___________________________________________
Identification Number (TIN) DATE ________________________________________________
and Certification You must cross out item (iii) in Part (2) above if you have
been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends
on your tax return and you have not been notified by the IRS
that you are no longer subject to backup withholding.
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO
THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the New Notes shall be retained until I
provide a taxpayer identification number to the Exchange Agent and that, if I do
not provide my taxpayer identification number within 60 days, such retained
amounts shall be remitted to the Internal Revenue Service as backup withholding
and 31% of all reportable payments made to me thereafter will be withheld and
remitted to the Internal Revenue Service until I provide a taxpayer
identification number.
Signature ____________________________ Date ____________________________
11
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
7.35% NOTES DUE 2005
OF
CONSOLIDATED FREIGHTWAYS, INC.
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Company's (as defined below) 7.35% Notes due 2005 (the "Old
Notes") are not immediately available, (ii) Old Notes, the Letter of Transmittal
and all other required documents cannot be delivered to Bank One, Columbus, NA
(the "Exchange Agent") on or prior to the Expiration Date (as defined in the
Prospectus referred to below) or (iii) the procedures for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand, overnight courier or mail, or transmitted by
facsimile transmission, to the Exchange Agent. See "The Exchange Offer --
Procedures for Tendering Old Notes" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
BANK ONE, COLUMBUS, NA
<TABLE>
<S> <C>
BY MAIL: BY OVERNIGHT DELIVERY OR HAND:
- ------------------------------------------------- -------------------------------------------------
Bank One, Columbus, NA Bank One, Columbus, NA
235 West Schrock Road 235 West Schrock Road
Columbus, OH 43271-0184 Westerville, OH 43081
or or
Bank One, Columbus, NA Bank One, Columbus, NA
c/o First Chicago Trust Company of New York c/o First Chicago Trust Company of New York
Attn: Corporate Trust Department Attn: Corporate Trust Department
14 Wall Street 14 Wall Street
8th Floor, Window 2 8th Floor, Window 2
New York, NY 10005 New York, NY 10005
</TABLE>
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(614) 248-4856 (Ohio)
(212) 240-8862 (NY)
FACSIMILE TRANSMISSIONS:
(614) 248-7238 (Ohio)
(212) 240-8938 (NY)
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to Consolidated Freightways, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus dated , 1995 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Notes set forth
below pursuant to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer -- Procedures for Tendering Old Notes."
<TABLE>
<S> <C>
Aggregate Principal Name(s) of Registered Holder(s):
Amount Tendered:
Certificate No(s). Address(es):
(if available): Area Code and Telephone Number(s):
If Old Notes will be tendered by book-entry transfer,
provide the following information: Signature(s):
DTC Account Number:
Date:
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Old Notes
tendered hereby in proper form for transfer, or confirmation of the book-entry
transfer of such Old Notes to the Exchange Agent's account at The Depositary
Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set
forth in the Prospectus, in either case together with one or more properly
completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and
any other required documents within five business days after the date of
execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Notes tendered hereby to the Exchange Agent within the
time period set forth above and that failure to do so could result in a
financial loss to the undersigned.
<TABLE>
<S> <C>
Name of Firm:
(Authorized Signature)
Address: Title:
Name:
(Zip (Please type or print)
Code)
Area Code and
Telephone Number: Date:
</TABLE>
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL
SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A
PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS.
2
<PAGE>
[FORM OF EXCHANGE AGENCY AGREEMENT]
-----------------------------------
, 1995
Bank One, Columbus, NA
100 East Broad Street
Columbus, Ohio 43271-0181
Ladies and Gentlemen:
Consolidated Freightways, Inc. (the "Company"), a Delaware corporation,
hereby appoints Bank One, Columbus, NA ("Bank One") to act as exchange agent
(the "Exchange Agent") in connection with an exchange offer by the Company to
exchange up to $100,000,000 aggregate principal amount of its 7.35% Notes due
2005 (the "New Notes"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for a like principal amount of its
outstanding 7.35% Notes due 2005 (the "Old Notes" and together with the New
Notes, the "Notes"). The terms and conditions of the exchange offer are set
forth in a Prospectus dated ______, 1995 (as the same may be amended or
supplemented from time to time, the "Prospectus") and in the related Letter of
Transmittal, which together constitute the "Exchange Offer." The registered
holders of the Notes are hereinafter referred to as the "Holders." Capitalized
terms used herein and not defined shall have the respective meanings described
thereto in the Prospectus.
On the basis of the representations, warranties and agreements of the
Company and Bank One contained herein and subject to the terms and conditions
hereof, the following sets forth the agreement between the Company and Bank One
as Exchange Agent for the Exchange Offer:
<PAGE>
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Company hereby authorizes Bank One to act as Exchange Agent in
connection with the Exchange Offer and Bank One agrees to act as Exchange Agent
in connection with the Exchange Offer. As Exchange Agent, Bank One will perform
those services as are outlined herein or which are customarily performed by an
exchange agent in connection with an exchange offer of like nature, including,
but not limited to, accepting tenders of Old Notes, assisting the Company in the
preparation of the documentation necessary to effect the transactions herein
contemplated (without assuming responsibility for such documentation, unless
such information has been furnished to the Company in writing by Bank One) and
communicating generally regarding the Exchange Offer with brokers, dealers,
commercial banks, trust companies and other persons, including Holders of the
Old Notes.
b. The Company acknowledges and agrees that Bank One has been retained
pursuant to this Agreement to act solely as Exchange Agent in connection with
the Exchange Offer, and in such capacity, Bank One shall perform such duties as
are outlined herein and which are specifically set forth in the section of the
Prospectus captioned "The Exchange Offer" and in the Letter of Transmittal;
provided, however, that in no way will Bank One's general duty to act in good
faith and without gross negligence or willful misconduct be discharged by the
foregoing.
c. Bank One will examine each of the Letters of Transmittal and
certificates for Old Notes and any other documents delivered or mailed to Bank
One by or for Holders of the Old Notes, and any book-entry conformations (as
defined in the Prospectus) received by
2
<PAGE>
Bank One with respect to the Old Notes, to ascertain whether: (i) the Letters of
Transmittal and any such other documents are duly executed and properly
completed in accordance with the instructions set forth therein and that such
book-entry confirmations are in due and proper form and contain the information
required to be set forth therein, and (ii) the Old Notes have otherwise been
properly tendered. In each case where the Letters of Transmittal or any other
documents have been improperly completed or executed or where book-entry
confirmations are not in due and proper form or omit certain information, or any
of the certificates for Old Notes are not in proper form for transfer or some
other irregularity in connection with the tender or acceptance of the Old Notes
exists, Bank One will endeavor, subject to the terms and conditions of the
Exchange Offer, to advise the tendering Holders of the irregularity and to take
any other action as may be necessary or advisable to cause such irregularity to
be corrected. Notwithstanding the above, Bank One shall not be under any duty to
give any notification of any irregularities in tenders or incur any liability
for failure to give any such notification.
d. With the approval of the President, any Senior Vice President, any
Executive Vice President, any Vice President or the Treasurer or any Assistant
Treasurer of the Company, (such approval, if given orally, to be confirmed in
writing) or any other party designated by any such officer, Bank One is
authorized to waive any irregularities in connection with any tender of Old
Notes pursuant to the Exchange Offer.
e. Tenders of Old Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange Offer"
and Old Notes shall be considered properly tendered only when tendered in
accordance with such
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procedures set forth therein. Notwithstanding the provisions of this paragraph,
Old Notes which the President, any Senior Vice President, any Executive Vice
President, any Vice President or the Treasurer, any Assistant Treasurer or any
other designated officer of the Company, shall approve (such approval, if given
orally, to be confirmed in writing) as having been properly tendered shall be
considered to be properly tendered.
f. Bank One shall advise the Company with respect to any Old Notes
received as soon as possible after 5:00 p.m., New York City time, on the
Expiration Date and accept its instructions with respect to disposition of such
Old Notes.
g. Bank One shall ensure (i) that each Letter of Transmittal and, if
required pursuant to the terms of the Exchange Offer, the related Old Notes or a
bond power are duly executed (with signatures guaranteed where required) by the
appropriate parties in accordance with the terms of the Exchange Offer; (ii) in
those instances where the person executing the Letter of Transmittal (as
indicated on the Letter of Transmittal) is acting in a fiduciary or a
representative capacity, proper evidence of his or her authority so to act is
submitted; (iii) in those instances where Old Notes are tendered by persons
other than the registered holder of such Old Notes, that customary transfer
requirements, including any applicable transfer taxes, and the requirements
imposed by the transfer restrictions on the Old Notes (including any applicable
requirements for certifications, legal opinions or other information) are
fulfilled; (iv) that Old Notes tendered in part are tendered in principal
amounts of $1,000 and integral multiples thereof and that if any Old Notes are
tendered for exchange in part, the untendered principal amount thereof is
$250,000 or any integral multiple of $1,000 in excess thereof; and (v) Bank One
shall deliver certificates for Old
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Notes tendered in part to the transfer agent for split-up and shall return any
untendered Old Notes or Old Notes which have not been accepted by the Company to
the Holders promptly after the expiration or termination of the Exchange Offer.
h. Upon acceptance by the Company of any Old Notes duly tendered pursuant
to the Exchange Offer (such acceptance if given orally, to be confirmed in
writing), Bank One will cause New Notes in exchange therefor to be issued as
promptly as possible (subject to receipt from the Company of appropriate
certificates under the related Indenture) and Bank One will deliver such New
Notes on behalf of the Company at the rate of $1,000 principal amount of New
Notes for each $1,000 principal amount of Old Notes tendered as promptly as
possible after acceptance by the Company of the Old Notes for exchange and
notice (such notice if given orally, to be confirmed in writing) of such
acceptance by the Company; provided, however, that in all cases, Old Notes
tendered pursuant to the Exchange Offer will be exchanged only after timely
receipt by Bank One of certificates for such Old Notes (or a book-entry
confirmation), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees and any other required
documents. Unless otherwise instructed by the Company, Bank One shall issue New
Notes only in denominations of $1,000 or any integral multiple thereof.
i. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time on or prior to the Expiration Date in accordance with the
terms of the Exchange Offer.
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j. Notice of any decision by the Company not to exchange any Old Notes
tendered shall be given by the Company either orally (if given orally, to be
confirmed in writing) or in a written notice to Bank One.
k. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Old Notes tendered because of an invalid tender, the
occurrence of certain other events set forth in the Prospectus under the caption
"The Exchange Offer -- Certain Conditions to the Exchange Offer" or otherwise,
Bank One shall, upon notice from the Company (such notice if given orally, to be
confirmed in writing), promptly after the expiration or termination of the
Exchange Offer return such certificates for unaccepted Old Notes (or effect
appropriate book-entry transfer), together with any related required documents
and the Letters of Transmittal relating thereto that are in Bank One's
possession, to the persons who deposited such certificates.
l. Certificates for reissued Old Notes, unaccepted Old Notes or New Notes
shall be forwarded by (a) first-class certified mail, return receipt requested
under a blanket surety bond obtained by Bank One protecting Bank One and the
Company from loss or liability arising out of the non-receipt or non-delivery of
such certificates or (b) by registered mail insured by Bank One separately for
the replacement value of each such certificate.
m. Bank One is not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, commercial bank, trust
company or other nominee or to engage or use any person to solicit tenders.
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n. As Exchange Agent, Bank One:
(i) shall have no duties or obligations other than those specifically
set forth in the Prospectus, the Letter of Transmittal or herein or as may
be subsequently agreed to in writing;
(ii) will make no representations and will have no responsibilities as
to the validity, value or genuineness of any of the certificates for the
Old Notes deposited pursuant to the Exchange Offer, and will not be
required to and will make no representation as to the validity, value or
genuineness of the Exchange Offer; PROVIDED, HOWEVER, that in no way will
Bank One's general duty to act in good faith and without gross negligence
or willful misconduct be limited by the foregoing;
(iii) shall not be obligated to take any legal action hereunder which
might in Bank One's reasonable judgment involve any expense or liability,
unless Bank One shall have been furnished with reasonable indemnity;
(iv) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to Bank One and reasonably
believed by Bank One to be genuine and to have been signed by the proper
party or parties;
(v) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution
and validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which Bank One believes
in good faith to be genuine and to have been signed or represented by a
proper person or persons acting in a
7
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fiduciary or representative capacity (so long as proper evidence of such
fiduciary's or representative's authority so to act is submitted to Bank
One) and Bank One examines and reasonably concludes that such evidence
properly establishes such authority;
(vi) may rely on and shall be protected in acting upon written or oral
instructions from the President, any Senior Vice President, any Executive
Vice President, any Vice President, the Treasurer, any Assistant Treasurer
or any other designated officer of the Company;
(vii) may consult with its own counsel with respect to any questions
relating to Bank One's duties and responsibilities and the written opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by Bank One
hereunder in good faith and in accordance with the written opinion of such
counsel; and
(viii) shall not advise any person tendering Old Notes pursuant to the
Exchange Offer as to whether to tender or refrain from tendering all or any
portion of its Old Notes or as to the market value, decline or appreciation
in market value of any Old Notes that may or may not occur as a result of
the Exchange Offer or as to the market value of the New Notes.
o. Bank One shall take such action as may from time to time be requested
by the Company (and such other action as Bank One may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery or such other forms as may be approved from time
to time by the Company, to all persons requesting such documents and to accept
and comply with telephone requests for information
8
<PAGE>
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for tendering into (or withdrawing from) the Exchange Offer.
The Company will furnish you with copies of such documents at your request.
p. Bank One shall advise orally and promptly thereafter confirm in
writing to the Company and such other person or persons as the Company may
request, daily (and more frequently during the week immediately preceding the
Expiration Date and if otherwise reasonably requested) up to and including the
Expiration Date, the aggregate principal amount of Old Notes which have been
duly tendered pursuant to and in compliance with the terms of the Exchange Offer
and the items received by Bank One pursuant to the Exchange Offer and this
Agreement, separately reporting and giving cumulative totals as to items
properly received and items improperly received. In addition, Bank One will
also provide, and cooperate in making available to the Company, or any such
other person or persons upon request (such request if made orally, to be
confirmed in writing) made from time to time, such other information as the
Company may reasonably request. Such cooperation shall include, without
limitation, the granting by Bank One to the Company, and such person or persons
as the Company may request, access to those persons on Bank One's staff who are
responsible for receiving tenders, in order to ensure that immediately prior to
the Expiration Date the Company shall have received adequate information in
sufficient detail to enable the Company to decide whether to extend the Exchange
Offer. Bank One shall prepare a final list of all persons whose tenders were
accepted, the aggregate principal amount of Old Notes tendered, the aggregate
principal amount of Old Notes accepted and deliver said list to the Company.
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q. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by Bank One as to the date and the time of
receipt thereof and shall be preserved by Bank One for a period of time at least
equal to the period of time Bank One preserves other records pertaining to the
transfer of securities, or one year, whichever is longer, and thereafter shall
be delivered by Bank One to the Company. Bank One shall dispose of unused
Letters of Transmittal and other surplus materials by returning them to the
Company.
r. Bank One hereby expressly waives any lien, encumbrance or right of
set-off whatsoever that Bank One may have with respect to funds deposited with
it for the payment of transfer taxes by reasons of amounts, if any, borrowed by
the Company, or any of its subsidiaries or affiliates pursuant to any loan or
credit agreement with Bank One or for compensation owed to Bank One hereunder or
for any other matter.
2. COMPENSATION.
Pursuant to a letter agreement, dated as of May 19, 1995 (the "Bond
Trusteeships Fee Schedule"), between the Company and Bank One, no additional
compensation will be payable to Bank One in its capacity as Exchange Agent, it
being understood and agreed that the Acceptance Fee and the Annual
Administration Fee payable pursuant to the Bond Trusteeships Fee Schedule are
intended to cover, among other things, the services of Bank One as Exchange
Agent; provided, further, that Bank One reserves the right to receive
reimbursement from the Company for any reasonable out-of-pocket expenses
incurred as Exchange Agent in performing the services described herein,
provided, however, that Bank
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One shall not be entitled to reimbursement for the fees or disbursements of its
legal counsel without the prior written consent of the Company.
3. INDEMNIFICATION.
a. The Company hereby agrees to protect, defend, indemnify and hold
harmless Bank One against and from any and all costs, losses, liabilities,
expenses (including reasonable counsel fees and disbursements) and claims
imposed upon or asserted against Bank One on account of any action taken or
omitted to be taken by Bank One in connection with its acceptance of or
performance of its duties under this Agreement and the documents related thereto
as well as the reasonable costs and expenses of defending itself against any
claim or liability arising out of or relating to this Agreement and the
documents related thereto. This indemnification shall survive the release,
discharge, termination, and/or satisfaction of this Agreement. Anything in this
Agreement to the contrary notwithstanding, the Company shall not be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of Bank One's bad faith, gross negligence or willful
misconduct. In no case shall the Company be liable under this indemnification
agreement with respect to any claim against Bank One unless the Company shall be
notified by Bank One, by letter, of the written assertion of a claim against
Bank One or of any other action commenced against Bank One, promptly after Bank
One shall have received any such written assertion or shall have been served
with a summons in connection therewith. The Company shall be entitled to
participate at its own expense in the defense of any such claim or other action,
and, if the Company so elects, the Company may assume the defense of any pending
or threatened action against Bank One in respect of which indemnification may be
sought
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hereunder, in which case the Company shall not thereafter be responsible for the
fees and disbursements of legal counsel for Bank One under this paragraph;
provided that the Company shall not be entitled to assume the defense of any
such action if the named parties to such action include both the Company and
Bank One and representation of both parties by the same legal counsel would, in
the written opinion of counsel for Bank One, be inappropriate due to actual or
potential conflicting interests between them. It is understood that the Company
shall not be liable under this paragraph for the fees and disbursements of more
than one legal counsel for Bank One. In the event that the Company shall assume
the defense of any such suit, the Company shall not therewith be liable for the
fees and expenses of any counsel retained by Bank One.
b. Bank One agrees that, without the prior written consent of the Company
(which consent shall not be unreasonably withheld), it will not settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding in respect of which indemnification could be sought
in accordance with the indemnification provision of this Agreement (whether or
not Bank One or the Company or any of its directors, officers and controlling
persons is an actual or potential party to such claim, action or proceeding),
unless such settlement, compromise or consent includes an unconditional release
of the Company and its directors, officers and controlling persons from all
liability arising out of such claim, action or proceeding.
4. TAX INFORMATION.
a. Bank One shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall
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<PAGE>
file any appropriate reports with the Internal Revenue Service. The Company
understands that Bank One is required, in certain instances, to deduct 31% with
respect to interest paid on the New Notes and proceeds from the sale, exchange,
redemption or retirement of the New Notes from Holders who have not supplied
their correct Taxpayer Identification Number or required certification. Such
funds will be turned over by Bank One to the Internal Revenue Service.
b. Bank One shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Old Notes and, upon receipt of written
approval from the Company shall deliver or cause to be delivered, in a timely
manner, to each governmental authority to which any transfer taxes are payable
in respect of the exchange of Old Notes, a check in the amount of all transfer
taxes so payable, and the Company shall reimburse Bank One for the amount of any
and all transfer taxes payable in respect of the exchange of Old Notes;
PROVIDED, HOWEVER, that Bank One shall reimburse the Company for amounts
refunded to it in respect of its payment of any such transfer taxes, at such
time as such refund is received by Bank One.
5. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that state.
6. NOTICES. Any communication or notice provided for hereunder shall be in
writing and shall be given (and shall be deemed to have been given upon receipt)
by delivery in person, telecopy, or overnight delivery or by registered or
certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below:
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If to the Company:
-----------------
Consolidated Freightways, Inc.
3240 Hillview Avenue
Palo Alto, California 94304
Telecopier No.: (415) 494-8372
Attention: David F. Morrison, Vice President and Treasurer
With a copy to:
--------------
Brown & Wood
555 California Street
San Francisco, California 94104
Telecopier No.: (415) 397-4621
Attention: Eric S. Haueter, Esq.
If to Bank One, Columbus, NA by Mail:
------------------------------------
235 West Schrock Road
Columbus, Ohio 43271-0184
Telecopier No. (614) 248-7238
Attention: Lora Marsch
With a copy by Mail to:
----------------------
Bank One, Columbus, NA
100 East Broad Street, 8th Floor
Columbus, Ohio 43271-0181
Telecopier No.: (614) 284-5195
Attention: Stephen W. Boughton
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section.
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7. PARTIES IN INTEREST. This Agreement shall be binding upon and inure solely
to the benefit of each party hereto and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
Without limitation to the foregoing, the parties hereto expressly agree that no
holder of Old Notes or New Notes shall have any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed an original, and all of such counterparts
shall together constitute one and the same agreement. If any term or other
provision of this Agreement or the application thereof is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the agreements contained herein is
not affected in any manner adverse to any party. Upon such determination that
any term or provision or the application thereof is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the agreements contained
herein may be performed as originally contemplated to the fullest extent
possible.
9. CAPTIONS. The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
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10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended or modified nor may any provision hereof be
waived except in writing signed by each party to be bound thereby.
11. TERMINATION. This Agreement shall terminate upon the earlier of (a) the
90th day following the expiration, withdrawal, or termination of the Exchange
Offer, (b) the close of business on the date of actual receipt of written notice
by Bank One from the Company stating that this Agreement is terminated, (c) one
year following the date of this Agreement, or (d) the time and date on which
this Agreement shall be terminated by mutual consent of the parties hereto.
12. MISCELLANEOUS.
a. Bank One hereby acknowledges receipt of the Prospectus and the Letter
of Transmittal and the Notice of Guaranteed Delivery and further acknowledges
that it has examined each of them. Any inconsistency between this Agreement, on
the one hand, and the Prospectus and the Letter of Transmittal and the Notice of
Guaranteed Delivery (as they may be amended or supplemented from time to time),
on the other hand, shall be resolved in favor of the latter three documents,
except with respect to the duties, liabilities and indemnification of Bank One
as Exchange Agent which shall be controlled by this Agreement.
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Kindly indicate your willingness to act as Exchange Agent and Bank One's
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to the Company a copy of this Agreement so
signed, whereupon this Agreement and Bank One's acceptance shall constitute a
binding agreement between Bank One and the Company.
Very truly yours,
CONSOLIDATED FREIGHTWAYS, INC.
By: ______________________________
Accepted and agreed to as of
the date first written above:
BANK ONE, COLUMBUS, NA
By: ______________________________
17
