<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1997.
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CNF TRANSPORTATION INC. DELAWARE 94-1444798
(FORMERLY CONSOLIDATED FREIGHTWAYS, INC.)
CNF TRUST I DELAWARE APPLIED FOR
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, GENERAL COUNSEL AND SECRETARY
CNF TRANSPORTATION 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)
---------------
COPIES TO:
ERIC S. HAUETER
BROWN & WOOD LLP
555 CALIFORNIA STREET, SAN FRANCISCO, CALIFORNIA 94104
(415) 772-1200
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(1) PER UNIT(1) PRICE(1)(2) FEE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Senior and Subordinated Debt Securities of
CNF Transportation Inc. (the
"Company")(3)(4)......................... --
Preferred Stock of the Company(5)......... --
Common Stock of the Company(5)(6)......... --
Common Stock Warrants of the Company(7)... (10) -- (10) (10)*
Depositary Shares(5)(8)................... --
Preferred Securities of CNF Trust I (the
"Trust")(5).............................. --
Guarantee of Preferred Securities(9)...... --
==================================================================================================
</TABLE>
* Paid previously. (Footnotes on next page)
---------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
===============================================================================
<PAGE>
Pursuant to Rule 429 under the Securities Act, the prospectus included in this
Registration Statement is a combined prospectus relating also to Registration
Statement No. 33-29793 and Registration Statement No. 33-60619 previously filed
by the Company under the Securities Act. This Registration Statement also con-
stitutes post-effective amendment No. 2 to such Registration Statement No. 33-
29793 and post-effective amendment No. 1 to such Registration Statement No. 33-
60619 and such post-effective amendments shall hereafter become effective con-
currently with the effectiveness of this Registration Statement and in accor-
dance with Section 8(c) of the Securities Act.
(Footnotes continued from previous page)
(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D of Form S-3. Securities registered hereby may be
offered for U.S. dollars or the equivalent thereof in foreign currencies,
currency units or composite currencies. Securities registered hereby may
be sold separately, together or in units with other securities registered
hereby.
(2) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(o). The proposed maximum offering price will be
determined from time to time by the applicable Registrant in connection
with the issuance by such Registrant of the securities registered
hereunder.
(3) If any Debt Securities are issued at an original issue discount, then such
greater amount as may be sold for an aggregate initial offering price of
up to the proposed maximum aggregate offering price.
(4) In addition to any Debt Securities that may be issued directly under this
Registration Statement, there is being registered hereunder such
indeterminate amount of Debt Securities as may be issued upon conversion
or exchange of other Debt Securities, Preferred Stock or Depositary
Shares, for which no consideration will be received by the Registrants,
and such aggregate principal amount of Debt Securities as may be issued
and sold to the Trust in connection with the issuance by the Trust of
Preferred Securities. Any Debt Securities sold to the Trust as aforesaid
may be distributed, under certain circumstances, to the holders of
Preferred Securities for no additional consideration.
(5) Such indeterminate number of shares of Preferred Stock and Common Stock,
and such indeterminate number of Depositary Shares and Preferred
Securities, as may be issued from time to time at indeterminate prices. In
addition to any Preferred Stock, Depositary Shares, Common Stock and
Preferred Securities that may be issued directly under this Registration
Statement, there are being registered hereunder such indeterminate number
of shares of Preferred Stock and Common Stock, and such indeterminate
number of Depositary Shares, as may be issued upon conversion or exchange
of Debt Securities, Preferred Stock, Depositary Shares or Preferred
Securities, as the case may be, for which no separate consideration will
be received by the Registrants.
(6) The aggregate amount of Common Stock registered hereunder is limited,
solely for purposes of any at the market offerings, to that which is
permissible under Rule 415(a)(4) of the Securities Act of 1933, as
amended.
(7) Common Stock Warrants will represent rights to purchase Common Stock
registered hereby.
(8) Depositary Shares will represent fractional interests in shares of
Preferred Stock registered hereby.
(9) Includes the rights of holders of the Preferred Securities under the
Guarantee and certain back-up undertakings consisting of obligations of
the Company with respect to such Preferred Securities under the Trust's
Amended and Restated Declaration of Trust (the "Declaration") and the
Company's Indenture relating to subordinated Debt Securities, as the same
may be amended or supplemented from time to time (the "Subordinated
Indenture"). No separate consideration will be received for such
Guarantee. The obligations of the Company under the subordinated Debt
Securities held by the Trust, the Subordinated Indenture, the Declaration
and the Guarantee, when taken together, will provide a full and
unconditional guarantee, on a subordinated basis, by the Company of the
Preferred Securities of the Trust.
(10) No additional amount of securities is being registered hereby. As
described elsewhere on the cover page of this Registration Statement,
$45,000,000 and $105,000,000 proposed maximum aggregate offering price of
securities or, if any such securities are issued at an original issue
discount, such greater amount as may be sold for an aggregate initial
offering price of up to $45,000,000 and $105,000,000 (or the equivalent
thereof in foreign currencies, currency units or composite currencies) are
being carried forward from Registration Statement Nos. 33-29793 and 33-
60619, respectively, previously filed by the Company under the Securities
Act; filing fees of $9,000 and $36,206.90 were previously paid to register
such securities under such prior registration statements.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS Subject to Completion, Dated May 6, 1997
CNF TRANSPORTATION INC.
Debt Securities, Preferred Stock, Depositary Shares,
Common Stock and Common Stock Warrants
CNF TRUST I
Preferred Trust Securities fully and unconditionally guaranteed
as set forth herein by CNF Transportation Inc.
CNF Transportation Inc. (the "Company") may from time to time offer and sell
(i) its unsecured debt securities, which may be either senior (the "Senior Debt
Securities") or subordinated (the "Subordinated Debt Securities" and, together
with the Senior Debt Securities, the "Debt Securities"), (ii) shares of its
preferred stock, no par value (the "Preferred Stock"), in one or more series;
(iii) depositary shares (the "Depositary Shares") evidenced by depositary
receipts; (iv) shares of its common stock, par value $.625 per share (the
"Common Stock"); and (v) warrants to purchase shares of Common Stock (the
"Common Stock Warrants"), for an aggregate initial public offering price of up
to $150,000,000 (or the equivalent in foreign currencies, currency units or
composite currencies (each, a "Currency")).
CNF Trust I (the "Trust"), a statutory business trust created under the laws of
the State of Delaware, may offer preferred securities representing undivided
beneficial interests in the assets of the Trust ("Trust Preferred Securities").
The payment of periodic cash distributions ("distributions") with respect to
Trust Preferred Securities out of moneys held by the Trust, and payment on
liquidation, redemption or otherwise with respect to such Trust Preferred
Securities, will be guaranteed by the Company to the extent described herein
(the "Trust Preferred Securities Guarantee"). See "Description of Trust
Preferred Securities Guarantee." The Company's obligations under the Trust
Preferred Securities Guarantee will be subordinate and junior in right of
payment to all other liabilities of the Company and will rank pari passu in
right of payment with the most senior preferred stock, if any, issued from time
to time by the Company. A series of Subordinated Debt Securities may be issued
and sold to the Trust, or a trustee of the Trust, in connection with the
investment of the proceeds from the offering of Trust Preferred Securities and
Trust Common Securities (as defined herein, together the "Trust Securities") of
the Trust. The Subordinated Debt Securities purchased by the Trust may be
subsequently distributed pro rata to holders of Trust Preferred Securities and
Trust Common Securities in connection with the dissolution of the Trust upon
the occurrence of certain events as may be described in an accompanying
supplement to this Prospectus (a "Prospectus Supplement"). The Trust Preferred
Securities Guarantee, when taken together with the Company's other obligations
under the Subordinated Debt Securities, the Subordinated Indenture (as defined
herein) and the Declaration (as defined herein), including its obligations to
pay certain costs, expenses, debts and liabilities of the Trust (other than
with respect to the Trust Securities), will provide a full and unconditional
guarantee on a subordinated basis by the Company of payments due on the Trust
Preferred Securities.
The Debt Securities, Preferred Stock, Depositary Shares, Common Stock, Common
Stock Warrants and Preferred Securities (collectively, the "Securities") may be
offered independently or together in any combination for sale directly to
purchasers or through dealers, underwriters or agents to be designated. The
Debt Securities, Preferred Stock and Preferred Securities may be convertible
into or exchangeable for other Securities. The Securities will be offered to
the public at prices and on terms determined at the time of offering. The
Securities may be sold for U.S. dollars or other Currencies and any amounts
payable by the Company or the Trust, as the case may be, in respect of the
Securities may likewise be payable in U.S. dollars or other Currencies.
The Senior Debt Securities will rank on a parity in right of payment with all
other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities will be subordinated to all existing and future
Senior Indebtedness (as defined herein) of the Company. See "Description of
Debt Securities."
(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 , 1997.
<PAGE>
(continued from cover page)
The Prospectus Supplement to this Prospectus sets forth (where applicable),
with respect to the series or issue of Securities (the "Offered Securities")
for which such Prospectus Supplement is being delivered: (i) the terms of any
Debt Securities offered, including, where applicable, their title, ranking, ag-
gregate principal amount, maturity, rate of interest (or method of calculation)
and time of payment thereof, any redemption or repayment terms, the Currency or
Currencies in which such Debt Securities will be denominated or payable, any
index, formula or other method pursuant to which principal, premium, if any, or
interest, if any, may be determined, any conversion or exchange provisions, the
right of the Company, if any, to defer payment of interest on such Debt Securi-
ties and the maximum length of any such deferral period, and other specific
terms not described in this Prospectus; (ii) the terms of any Preferred Stock
offered, including, where applicable, the specific designation, number of
shares, dividend rate (or method of calculation) and time of payment thereof,
liquidation preference, any redemption or repayment terms, any conversion or
exchange provisions, any voting rights, and other specific terms not described
in this Prospectus; (iii) the terms of any Depositary Shares offered which are
not described in this Prospectus, including the fraction of a share of Pre-
ferred Stock represented by each such Depositary Share; (iv) the terms of any
Common Stock Warrants offered, including where applicable, the exercise price,
detachability, duration and other specific terms not described in this Prospec-
tus; (v) the initial public offering price and the net proceeds to the Company
and other specific terms related to the Offered Securities; and (vi) the terms
of any Trust Preferred Securities offered, including, where applicable, the
specific designation, number of Trust Preferred Securities, distribution rate
(or method of calculation) and time of payment thereof, liquidation amount, any
redemption or repayment terms, any conversion or exchange provisions, any vot-
ing rights, the right of the Trust, if any, to defer payment of distributions
on the Trust Preferred Securities and the maximum length of any such deferral
period, and other specific terms not described in this Prospectus.
This Prospectus may not be used to consummate sales of Securities unless accom-
panied or, to the extent permitted by applicable law, preceded by a Prospectus
Supplement.
The Securities may be offered through dealers, underwriters or agents desig-
nated from time to time, as set forth in the accompanying Prospectus Supple-
ment. Net proceeds from the sale of Securities will be equal to the purchase
price in the case of a dealer, the public offering price less discount in the
case of an underwriter or the purchase price less commission in the case of an
agent in each case, less other expenses attributable to the issuance and dis-
tribution of the Securities. The Company may also sell Securities directly to
investors on its own behalf. In the case of sales made directly by the Company,
no commission will be payable. See "Plan of Distribution" for possible indemni-
fication arrangements for dealers, underwriters and agents.
2
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities Ex-
change Act of 1934, as amended (the "Exchange Act"), and, in accordance there-
with, files reports, proxy statements and other information with the Securi-
ties and Exchange Commission (the "Commission"). Such reports, proxy state-
ments and other information may be inspected and copied at the public refer-
ence facilities maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's Re-
gional Offices in New York (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., Wash-
ington, D.C. 20549, at prescribed rates. Such material may also be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov. Reports, proxy statements and other information concerning
the Company may also be inspected at the offices of the New York Stock Ex-
change, 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-3
(the "Registration Statement") filed by the Company and the Trust with the
Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus omits certain of the information contained in the Reg-
istration Statement in accordance with the rules and regulations of the Com-
mission. Reference is hereby made to the Registration Statement and related
exhibits for further information with respect to the Company, the Trust and
the Securities. 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 with the Commission. Each
such statement is qualified in its entirety by such reference.
No separate financial statements of the Trust have been included herein. The
Company does not consider that such financial statements would be material to
holders of the Trust Preferred Securities because (i) all of the voting secu-
rities of the Trust will be owned, directly or indirectly, by the Company, a
reporting company under the Exchange Act, (ii) the Trust has no independent
operations but exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in Subordinated Debt Securities issued by the Company, and
(iii) the Company's obligations described herein and in any accompanying Pro-
spectus Supplement under the Declaration, the Trust Preferred Securities Guar-
antee, the Subordinated Debt Securities purchased by the Trust and the Subor-
dinated Indenture, taken together, constitute a full and unconditional guaran-
tee of payments due on the Trust Preferred Securities. See "Description Of
Debt Securities" and "Description Of Trust Preferred Securities Guarantee."
The Trust is not currently subject to the information reporting requirements
of the Exchange Act. The Trust will become subject to such requirements upon
the effectiveness of the Registration Statement, although it intends to seek
and expects to receive exemptions therefrom.
3
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document has been filed by the Company with the Commission and is
incorporated herein by reference: the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996.
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 offering of the Securities shall be deemed to be in-
corporated 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 or is deemed to be incorporated by reference herein mod-
ifies or supersedes such statement. Any statement or document so modified or
superseded shall not be deemed, except as so modified or superseded, to consti-
tute part of this Prospectus.
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 described
above that are incorporated by reference herein other than exhibits to such
documents which are not specifically incorporated by reference in such docu-
ments. Written or telephone requests should be directed to: CNF Transportation
Inc., Office of the Corporate Secretary, at 3240 Hillview Avenue, Palo Alto,
California 94304 (telephone (415) 494-2900).
No person has been authorized to give any information or to make any represen-
tations other than those contained or incorporated by reference in this Pro-
spectus and, if given or made, such information or representations must not be
relied upon as having been authorized. This Prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities other than
the securities described in this Prospectus or an offer to sell or the solici-
tation of an offer to buy such securities in any jurisdiction where or to any
person to whom it is unlawful to make such an offer or solicitation. Neither
the delivery of this Prospectus or any Prospectus Supplement nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company or the Trust since
the date hereof or thereof or that the information contained or incorporated by
reference herein or therein is correct as of any time subsequent to its date.
4
<PAGE>
THE COMPANY
CNF Transportation Inc. (the "Company") is a holding company which partici-
pates through subsidiaries in domestic and international air cargo delivery
services, regional less-than-truckload highway trucking services, truckload
and intermodal rail services, ocean forwarding, contract logistics and related
transportation activities. These operations are organized into three primary
business segments: air freight and ocean forwarding (Emery Worldwide); re-
gional trucking and full-service truckload services (Con-Way Transportation
Services); and a third segment which is comprised of a third-party contract
logistics company (Menlo Logistics), Road Systems, a trailer manufacturer, and
VantageParts, a wholesale truck parts distributor.
The Company was incorporated in Delaware in 1958 as a successor to a business
originally established in 1929. The Company's principal executive offices are
located at 3240 Hillview Avenue, Palo Alto, California 94304 (telephone (415)
494-2900). Unless otherwise indicated or unless the context otherwise re-
quires, all references in this Prospectus to the Company include CNF Transpor-
tation Inc. and its subsidiaries.
THE TRUST
CNF Trust I (the "Trust") is a statutory business trust created under Delaware
law pursuant to (i) a trust agreement (as the same may be amended, supple-
mented or restated from time to time, the "Declaration") executed by the Com-
pany, as sponsor for the trust (the "Sponsor"), and certain of the CNF Trust-
ees (as defined herein) for the trust and (ii) the filing of a certificate of
trust with the Delaware Secretary of State on May 6, 1997. The Trust exists
for the exclusive purposes of (i) issuing the Trust Preferred Securities and
common securities representing undivided beneficial interests in the assets of
the Trust (the "Trust Common Securities" and, together with the Trust Pre-
ferred Securities, the "Trust Securities"), (ii) investing the gross proceeds
of the Trust Securities in a specific series of Subordinated Debt Securities
and (iii) engaging in only those other activities necessary or incidental
thereto. All of the Trust Common Securities will be directly or indirectly
owned by the Company. The Trust Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Trust Preferred Securities
except that upon an event of default under the Declaration, the rights of the
holders of the Trust Common Securities to payment in respect of distributions
and payments upon liquidation, redemption and otherwise will be subordinated
to the rights of the holders of the Trust Preferred Securities. The Company
will, directly or indirectly, acquire Trust Common Securities in an aggregate
liquidation amount equal to approximately 3% of the total capital of the
Trust. The Trust's business and affairs will be conducted by the trustees (the
"CNF Trustees") appointed by the Company, as the direct or indirect holder of
all the Trust Common Securities. Except in certain limited circumstances, the
holder of the Trust Common Securities will be entitled to appoint, remove or
replace any of, and to increase or reduce the number of, the CNF Trustees. The
duties and obligations of the CNF Trustees shall be governed by the Declara-
tion. A majority of the CNF Trustees (the "Regular Trustees") will be persons
who are employees or officers of or affiliated with the Company. One CNF
Trustee will be a financial institution which will be unaffiliated with the
Company and which shall act as property trustee and as indenture trustee (the
"Property Trustee") for purposes of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). In addition, unless the Property Trustee
maintains a principal place of business in the State of Delaware, and other-
wise meets the requirements of applicable law, one CNF Trustee will have its
principal place of business or reside in the State of Delaware (the "Delaware
Trustee"). The Company will pay all fees and expenses related to the Trust and
the offering of Trust Securities. The payment of periodic distributions with
respect to the Trust Preferred Securities out of moneys held by the Trust, and
payment on liquidation, redemption or otherwise with respect to the Trust Pre-
ferred Securities, will be guaranteed by the Company to the extent described
herein. See "Description of Trust Preferred Securities Guarantee." The
Company's obligations under the Trust Preferred Securities Guarantee will be
subordinate and junior in right of payment to all other liabilities of the
Company and rank pari passu in right of payment with the most senior preferred
stock, if any, issued from time to time by the Company. The principal place of
business of the Trust shall be c/o CNF Transportation Inc., 3240 Hillview Ave-
nue, Palo Alto, California 94304 (telephone (415) 494-2900).
5
<PAGE>
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the Company
intends to use the net proceeds from the sale of the Securities offered hereby
for general corporate purposes, which may include the repayment of indebted-
ness, capital expenditures and working capital. Pending such application, such
proceeds may be invested in short-term investments and marketable securities or
used to temporarily repay indebtedness under credit facilities. The proceeds
from the sale of Trust Securities will be invested by the Trust in Subordinated
Debt Securities.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The Company's consolidated ratios of earnings to fixed charges and of earnings
to combined fixed charges and preferred stock dividends for each of the periods
indicated are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1)............. 2.3x 2.6x 2.9x 1.7x 0.5x(2)
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends(3)................. 2.3x 2.5x 2.5x 1.5x 0.4x(4)
</TABLE>
- --------
(1) 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 from continuing operations 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 Company's Series B
Cumulative Convertible Preferred Stock used to pay debt service on notes
issued by the Company's Thrift and Stock Plan (the "TASP"), 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.
(2) Earnings were inadequate to cover fixed charges for the period shown; the
deficiency was $39.4 million for the year ended December 31, 1992.
(3) The ratio of earnings to combined fixed charges and preferred stock
dividends is unaudited for all periods presented. The ratio of earnings to
combined fixed charges and preferred stock dividends was derived by
dividing earnings before fixed charges and income taxes by combined fixed
charges and dividends on the Company's Series C Conversion Preferred Stock.
For this purpose, earnings and fixed charges are computed as described in
note (1) above. The Series C Conversion Preferred Stock was issued in March
1992 and all of the outstanding shares thereof were converted into Common
Stock in March 1995.
(4) Earnings were inadequate to cover combined fixed charges and preferred
stock dividends for the period shown; the deficiency was $47.8 million for
the year ended December 31, 1992.
DESCRIPTION OF DEBT SECURITIES
The Company may issue Debt Securities either separately, or together with, or
upon the conversion of or in exchange for, other Securities. The Debt Securi-
ties are to be either senior unsecured obligations (the "Senior Debt Securi-
ties") of the Company issued in one or more series under an Indenture (the "Se-
nior Indenture") to be entered into between the Company and a trustee (the "Se-
nior Trustee") whose name will be set forth in the applicable Prospectus Sup-
plement, or subordinated unsecured obligations (the
6
<PAGE>
"Subordinated Debt Securities") of the Company issued in one or more series
under an Indenture (the "Subordinated Indenture" and, together with the Senior
Indenture, the "Indentures") to be entered into between the Company and a
trustee (the "Subordinated Trustee" and, together with the Senior Trustee, the
"Trustees") whose name will be set forth in the applicable Prospectus Supple-
ment. The forms of the Indentures have been filed as exhibits to the Registra-
tion Statement. The terms of any series of Debt Securities will be those set
forth in the applicable Indenture and such Debt Securities and those made part
of such Indenture by the Trust Indenture Act. The summary of certain provi-
sions of the Indentures and the Debt Securities set forth below and the sum-
mary of certain terms of a particular series of Debt Securities set forth in
the applicable Prospectus Supplement do not purport to be complete and are
subject to and are qualified in their entirety by reference to all of the pro-
visions of the Indentures, which provisions of the Indentures (including de-
fined terms) are incorporated herein by reference. Certain capitalized terms
used herein and not defined are defined in the Indentures. As used in this
"Description of Debt Securities," all references to the "Company" shall mean
CNF Transportation Inc., excluding, unless the context shall otherwise re-
quire, its subsidiaries.
In the event that Subordinated Debt Securities are issued to the Trust or a
trustee of the Trust in connection with the issuance of Trust Securities, such
Subordinated Debt Securities will be issued pursuant to the Subordinated In-
denture and subsequently may be distributed pro rata to the holders of such
Trust Securities in connection with the dissolution of the Trust upon the oc-
currence of certain events described in the Prospectus Supplement relating to
such Trust Securities. Only one series of Subordinated Debt Securities will be
issued to the Trust or a trustee of the Trust in connection with the issuance
of Trust Securities by the Trust.
The following description of Debt Securities sets forth certain general terms
and provisions of the series of Debt Securities to which any Prospectus Sup-
plement may relate. Certain other specific terms of any particular series of
Debt Securities will be described in the applicable Prospectus Supplement. To
the extent that any particular terms of the Debt Securities described in a
Prospectus Supplement differ from any of the terms described herein, then such
terms described herein shall be deemed to have been superseded by such Pro-
spectus Supplement.
GENERAL
The Debt Securities may be issued from time to time in one or more series of
Senior Debt Securities and one or more series of Subordinated Debt Securities.
The Indentures do not limit the aggregate principal amount of Debt Securities
which may be issued thereunder and provide that Debt Securities of any series
may be issued thereunder up to an aggregate principal amount which may be au-
thorized from time to time by the Company. Reference is made to the applicable
Prospectus Supplement relating to the series of Debt Securities offered
thereby for specific terms, including (where applicable): (1) the title or
designation of such Debt Securities; (2) any limit on the aggregate principal
amount of such Debt Securities; (3) the price or prices (expressed as a per-
centage of the principal amount thereof) at which such Debt Securities will be
issued; (4) the date or dates on which the principal of and premium, if any,
on such Debt Securities will be payable, or the method or methods, if any, by
which such date or dates will be determined; (5) the rate or rates (which may
be fixed or variable) at which such Debt Securities will bear interest, if
any, or the method or methods, if any, by which such rate or rates are to be
determined, the date or dates, if any, from which such interest will accrue,
or the method or methods, if any, by which such date or dates are to be deter-
mined, and whether and under what circumstances Additional Amounts on such
Debt Securities will be payable, and the basis upon which interest will be
calculated if other than that of a 360-day year of twelve 30-day months; (6)
the dates on which such interest, if any, will be payable and the record
dates, if any, therefor; (7) the place or places where the principal of, pre-
mium, if any, and interest, if any, on such Debt Securities will be payable
and the place or places where such Debt Securities may be surrendered for reg-
istration of transfer and exchange, if other than The City of New York; (8) if
applicable, the date or dates on which, the period or periods within which,
the price or prices at which and the other terms and conditions upon which
such Debt Securities may be
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redeemed at the option of the Company or are subject to repurchase at the op-
tion of the holders; (9) the terms of any sinking fund or analogous provision;
(10) if other than U.S. dollars, the Currency for which the Debt Securities
may be purchased and the Currency in which the payment of principal thereof
and premium, if any, and interest, if any, thereon may be made, and the abili-
ty, if any, of the Company or the holders of Debt Securities to have payments
made in any Currency other than those in which the Debt Securities are stated
to be payable; (11) any addition to, or modification or deletion of, any cove-
nant or Event of Default with respect to such Debt Securities; (12) whether
any such Debt Securities are to be issuable in registered or bearer form or
both and, if in bearer form, the terms and conditions relating thereto and any
limitations on issuance of such Bearer Securities (including in exchange for
Registered Securities of the same series); (13) whether any such Debt Securi-
ties will be issued in temporary or permanent global form and, if so, the
identity of the depositary for such global Debt Security; (14) whether and un-
der what circumstances the Company will pay Additional Amounts (as contem-
plated by the relevant Indenture) on such Debt Securities to any holder who is
a United States Alien (as defined in the relevant Indenture, as such defini-
tion may be modified) in respect of any tax, assessment or other governmental
charge and, if so, whether the Company will have the option to redeem such
Debt Securities rather than pay such Additional Amounts; (15) the person to
whom any interest on any Registered Securities of the series shall be payable,
if other than the person in whose name the Registered Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, the manner in which, or the person to whom, any
interest on any Bearer Security of the series shall be payable, if other than
upon presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any inter-
est payable on a temporary global Debt Security will be paid if other than in
the manner provided in the relevant Indenture; (16) the portion of the princi-
pal amount of such Debt Securities which shall be payable upon acceleration
thereof if other than the full principal amount thereof; (17) the authorized
denominations in which such Debt Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof (in the case of Reg-
istered Securities) or $5,000 (in the case of Bearer Securities); (18) the
terms, if any, upon which such Debt Securities may be convertible into or ex-
changeable for other Securities; (19) whether such Debt Securities will be Se-
nior Debt Securities or Subordinated Debt Securities; (20) whether the amount
of payments of principal of, premium, if any, and interest, if any, on such
Debt Securities may be determined with reference to an index, formula or other
method or methods (any such Debt Securities being hereinafter called "Indexed
Securities") and the manner in which such amounts will be determined; and (21)
any other terms of such Debt Securities.
As used in this Prospectus and any Prospectus Supplement relating to the of-
fering of any Debt Securities, references to the principal of and premium, if
any, and interest, if any, on such Debt Securities will be deemed to include
mention of the payment of Additional Amounts, if any, required by the terms of
such Debt Securities in such context.
Debt Securities may be issued as Original Issue Discount Securities (as de-
fined in the Indentures) to be sold at a substantial discount below their
principal amount. In the event of an acceleration of the maturity of any Orig-
inal Issue Discount Security, the amount payable to the holder thereof upon
such acceleration will be determined in the manner described in the applicable
Prospectus Supplement. Material federal income tax and other considerations
applicable to Original Issue Discount Securities will be described in the ap-
plicable Prospectus Supplement.
If the purchase price of any Debt Securities is payable in a Currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any Currency other than U.S. dol-
lars, the specific terms and other information with respect to such Debt Secu-
rities and such foreign Currency will be specified in the Prospectus Supple-
ment relating thereto.
Under the Indenture, the terms of the Debt Securities of any series may differ
and the Company, without the consent of the holders of the Debt Securities of
any series, may reopen a previous series of Debt Securities and issue addi-
tional Debt Securities of such series or establish additional terms of such
series.
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REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement, each series
of Debt Securities will be issued in registered form only, without coupons. The
Indentures, however, provide that the Company may also issue Debt Securities in
bearer form only, or in both registered and bearer form. Bearer Securities
shall not be offered, sold, resold or delivered in connection with their origi-
nal issuance in the United States or to any United States person (as defined
below) other than offices located outside the United States of certain United
States financial institutions. As used herein, "United States person" means any
citizen or resident of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States, any es-
tate the income of which is subject to United States federal income taxation
regardless of its source, or any trust whose administration is subject to the
primary supervision of a United States court and which has one or more United
States fiduciaries who have the authority to control all substantial decisions
of the trust, and "United States" means, except for purposes of the definition
of "Restricted Subsidiary" set forth below under "--Certain Covenants of the
Company--Definition of Certain Terms," the United States of America (including
the states thereof and the District of Columbia), its territories, its posses-
sions and other areas subject to its jurisdiction. Purchasers of Bearer Securi-
ties will be subject to certification procedures and may be affected by certain
limitations under United States tax laws. Such procedures and limitations will
be described in the Prospectus Supplement relating to the offering of the
Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement, Registered
Securities will be issued in denominations of $1,000 or any integral multiple
thereof, and Bearer Securities will be issued in denominations of $5,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the princi-
pal, premium, if any, and interest, if any, of or on the Debt Securities will
be payable, and Debt Securities may be surrendered for registration of transfer
or exchange, at an office or agency to be maintained by the Company in the Bor-
ough of Manhattan, The City of New York, provided that payments of interest
with respect to any Registered Security may be made at the option of the Com-
pany by check mailed to the address of the person entitled thereto or by trans-
fer to an account maintained by the payee with a bank located in the United
States. No service charge shall be made for any registration of transfer or ex-
change of Debt Securities, but the Company may require payment of a sum suffi-
cient to cover any tax or other governmental charge and any other expenses that
may be imposed in connection therewith.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
principal of, premium, if any, and interest, if any, on Bearer Securities will
be made, subject to any applicable laws and regulations, at such office or
agency outside the United States as specified in the Prospectus Supplement and
as the Company may designate from time to time. Unless otherwise indicated in
the applicable Prospectus Supplement, payment of interest due on Bearer Securi-
ties on any Interest Payment Date will be made only against surrender of the
coupon relating to such Interest Payment Date. Unless otherwise indicated in
the applicable Prospectus Supplement, no payment of principal, premium or in-
terest with respect to any Bearer Security will be made at any office or agency
in the United States or by check mailed to any address in the United States or
by transfer to an account maintained with a bank located in the United States;
provided, however, that if amounts owing with respect to any Bearer Securities
shall be payable in U.S. dollars, payment with respect to any such Bearer Secu-
rities may be made at the Corporate Trust Office of the applicable Trustee or
at any office or agency designated by the Company in the Borough of Manhattan,
The City of New York, if (but only if) payment of the full amount of such prin-
cipal, premium or interest at all offices outside of the United States main-
tained for such purpose by the Company is illegal or effectively precluded by
exchange controls or similar restrictions.
Unless otherwise indicated in the applicable Prospectus Supplement, the Company
will not be required to (i) issue, register the transfer of or exchange Debt
Securities of any series during a period beginning at the opening of business
15 days before any selection of Debt Securities of that series of like tenor to
be redeemed and ending at the close of business on the day of that selection;
(ii) register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed
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<PAGE>
portion of any Registered Security being redeemed in part; (iii) exchange any
Bearer Security called for redemption, except to exchange such Bearer Security
for a Registered Security of that series and like tenor that is simultaneously
surrendered for redemption; or (iv) issue, register the transfer of or ex-
change any Debt Security which has been surrendered for repayment at the op-
tion of the holder, except the portion, if any, of such Debt Security not to
be so repaid.
RANKING OF DEBT SECURITIES; HOLDING COMPANY STRUCTURE
The Senior Debt Securities will be unsecured unsubordinated obligations of the
Company and will rank on a parity in right of payment with all other unsecured
and unsubordinated indebtedness of the Company. The Subordinated Debt Securi-
ties will be unsecured obligations of the Company and will be subordinated in
right of payment to all existing and future Senior Indebtedness (as defined
below) of the Company. See "--Subordination of Subordinated Debt Securities."
The Debt Securities are 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 Debt Securities, are largely depen-
dent upon the results of operations of such subsidiaries.
Because the Company is a holding company, the Debt Securities will be effec-
tively 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 Debt Securities, 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 in-
debtedness of such subsidiary senior to that held by the Company. Although
certain debt instruments to which the Company and its subsidiaries are parties
impose limitations on the incurrence of additional indebtedness, both the Com-
pany and its subsidiaries retain the ability to incur substantial additional
indebtedness and lease and letter of credit obligations.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more global securities that will be deposited with, or on behalf of,
a depositary (the "Depositary") identified in the Prospectus Supplement relat-
ing to such series. Global Debt Securities may be issued in either registered
or bearer form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for individual certificates evidencing Debt
Securities in definitive form represented thereby, a global Debt Security may
not be transferred except as a whole by the Depositary for such global Debt
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such suc-
cessor.
The specific terms of the depositary arrangement with respect to a series of
global Debt Securities and certain limitations and restrictions relating to a
series of global Bearer Securities will be described in the Prospectus Supple-
ment relating to such series.
OUTSTANDING DEBT SECURITIES
In determining whether the holders of the requisite principal amount of out-
standing Debt Securities have given any request, demand, authorization, direc-
tion, notice, consent or waiver under the relevant Indenture, (i) the portion
of the principal amount of an Original Issue Discount Security that shall be
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deemed to be outstanding for such purposes shall be that portion of the prin-
cipal amount thereof that could be declared to be due and payable upon a dec-
laration of acceleration thereof pursuant to the terms of such Original Issue
Discount Security as of the date of such determination, (ii) the principal
amount of any Indexed Security that shall be deemed to be outstanding for such
purpose shall be the principal face amount of such Indexed Security determined
on the date of its original issuance, (iii) the principal amount of a Debt Se-
curity denominated in a Currency other than U.S. dollars shall be the U.S.
dollar equivalent, determined on the date of original issue of such Debt Secu-
rity, of the principal amount of such Debt Security and (iv) any Debt Security
owned by the Company or any obligor on such Debt Security or any Affiliate of
the Company or such other obligor shall be deemed not to be outstanding.
REDEMPTION AND REPURCHASE
The Debt Securities of any series may be redeemable at the option of the Com-
pany, may be subject to mandatory redemption pursuant to a sinking fund or
otherwise, or may be subject to repurchase by the Company at the option of the
holders, in each case upon the terms, at the times and at the prices set forth
in the applicable Prospectus Supplement.
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series are convertible into
or exchangeable for Common Stock, Preferred Stock, Depositary Shares or other
Debt Securities will be set forth in the applicable Prospectus Supplement.
Such terms may include provisions for conversion or exchange, either mandato-
ry, at the option of the holders or at the option of the Company.
CERTAIN COVENANTS OF THE COMPANY
The Indentures do not limit the amount of indebtedness, guarantees or lease
obligations that may be incurred by the Company and its subsidiaries. The In-
dentures do not contain provisions which would give holders of the Debt Secu-
rities the right to require the Company to repurchase their Debt Securities 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, notes issued by the Company's Thrift and Stock Plan which are
guaranteed by the Company, and indebtedness under the Company's $350 million
bank credit facility, which is guaranteed by certain subsidiaries of the Com-
pany), have the right to require the Company to repurchase or repay such in-
debtedness upon the occurrence of certain changes in control of the Company or
similar events and/or declines in the credit rating on such indebtedness.
Covenant in the Senior Indenture--Limitation on Liens. The following covenant
will be applicable to Senior Debt Securities but not to Subordinated Debt Se-
curities. In the Senior Indenture, the Company covenants that, so long as any
of the Senior Debt Securities remains outstanding, it will not, nor will it
permit any Restricted Subsidiary (as defined below) to, create, assume or
guarantee any Indebtedness (as defined below) that is secured by a mortgage,
pledge, lien, security interest or other encumbrance (a "Lien") on any prop-
erty or shares of capital stock or Indebtedness of the Company or any Re-
stricted Subsidiary without in any such case effectively providing, concur-
rently with the creation, assumption or guarantee of any such Indebtedness,
that the Senior Debt Securities shall, so long as such other Indebtedness is
so secured (and, if the Company shall so determine, any other existing Indebt-
edness (or Indebtedness thereafter in existence) created, assumed or guaran-
teed by the Company or any Restricted Subsidiary), be secured by any such Lien
equally and ratably with or prior to the Indebtedness thereby secured; pro-
vided that Indebtedness secured by such Liens may be created, assumed or guar-
anteed if immediately after giving effect thereto the aggregate amount of all
such Indebtedness of the Company and its Restricted Subsidiaries (not includ-
ing Indebtedness described in (i) through (vii) below) does not exceed 15% of
Consolidated Net Tangible Assets (as defined below).
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The foregoing restrictions shall not apply to Indebtedness secured by (i)
Liens on property of the Company or any Restricted Subsidiary existing on the
date of the Senior Indenture; (ii) certain Liens on property existing at the
time of acquisition thereof; (iii) Liens in favor of the Company or a Re-
stricted Subsidiary securing Indebtedness of the Company or a Restricted Sub-
sidiary; (iv) Liens created in connection with tax assessments or legal pro-
ceedings and mechanics' and materialmens' liens and other similar liens cre-
ated in the ordinary course of business; (v) Liens on property of the Company
or any Restricted Subsidiary (except Liens on the capital stock or Indebted-
ness 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 Indebtedness created, incurred or guaranteed for the purpose of financ-
ing all or any part of the purchase price or the cost of construction or im-
provement 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 or providing for
the payment of all or any part of the purchase price thereof, or any Indebted-
ness incurred to finance the purchase or the cost of construction or improve-
ment 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 suc-
cessive extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses (i) through (vi), inclusive.
Covenant in Both Indentures--Consolidation, Merger and Sale of Assets. The
following covenant will be applicable to both Senior Debt Securities and Sub-
ordinated Debt Securities. Each Indenture provides that the Company shall not
consolidate with or merge into any Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person unless (a)
such Person (if other than the Company) is organized and existing under the
laws of the United States of America, any state thereof or the District of Co-
lumbia and shall expressly assume the due and punctual payment of the princi-
pal of, premium, if any, and interest, if any, on all the Debt Securities out-
standing under such Indenture and the performance of the Company's other obli-
gations under such Indenture and the Debt Securities outstanding thereunder;
(b) immediately after giving effect to such transaction, no Event of Default
under such Indenture, and no event which, after notice or lapse of time or
both would become an Event of Default under such Indenture, shall have hap-
pened and be continuing; and (c) certain other conditions are met.
Definition of Certain Terms. The term "Consolidated Net Tangible Assets" as
used in the Senior Indenture means, as of any particular time, the aggregate
amount of the Consolidated Assets (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 ac-
cepted accounting principles. The term "Consolidated Assets" as used in the
Senior Indenture means all amounts that would be shown as assets on a consoli-
dated balance sheet of the Company and its consolidated Subsidiaries (as de-
fined) prepared in accordance with generally accepted accounting principles.
The term "Restricted Subsidiary" as used in the Senior Indenture means any
Subsidiary of the Company (i) that is majority owned or controlled by the Com-
pany or any of its Subsidiaries; (ii) substantially all of the operating as-
sets of which are located or the principal business of which is carried on
within the United States, Puerto Rico, the U.S. Virgin Islands or Canada;
(iii) which was in existence on the date of the Senior Indenture or thereafter
becomes a Subsidiary of the Company, unless any such Subsidiary is determined
by the Board of Directors not to be a Restricted Subsidiary because in the
opinion of the Board of Directors it is not of material importance to the to-
tal business conducted by the Company and its Subsidiaries taken as a whole;
and (iv) the assets of which have a gross book value (without deducting any
depreciation, amortization or other applicable reserves) which exceeds 1% of
Consolidated Assets. The term "Indebtedness" as used in the
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<PAGE>
Indentures means, with respect to any Person, (a) any liability of such Person
(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 in-
strument, 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 as-
sets 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 such Person has guaranteed or that is otherwise its legal lia-
bility; 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
Unless otherwise specified in the applicable Prospectus Supplement, an Event
of Default with respect to the Debt Securities of any series is defined in the
relevant Indenture as being: (i) default for 30 days in payment of any inter-
est with respect to any Debt Security of such series; (ii) default in payment
of principal or any premium with respect to any Debt Security of such series
when due upon maturity, redemption or otherwise; (iii) default in making any
sinking fund payment or payment under any analogous provision when due with
respect to any Debt Security of such series; (iv) default by the Company in
the performance, or breach, of any other covenant or warranty in the relevant
Indenture (other than a covenant or warranty included therein solely for the
benefit of series of Debt Securities other than that series) or any Debt Secu-
rity of such series which shall not have been remedied for a period of 90 days
after notice to the Company by the relevant Trustee or the holders of not less
than 25% in aggregate principal amount of the Debt Securities of such series
then outstanding; (v) acceleration of the maturity of any single outstanding
issue of Indebtedness of the Company with an outstanding aggregate principal
amount in excess of $35,000,000 (including an acceleration under the relevant
Indenture with respect to Debt Securities of any other series), as a result of
an event of default thereunder, which acceleration is not annulled or which
Indebtedness is not discharged within 30 days thereafter or such longer period
during which the Company is contesting in good faith such acceleration; (vi)
certain events of bankruptcy, insolvency or reorganization of the Company; or
(vii) any other Event of Default established for the Debt Securities of such
series. No Event of Default with respect to any particular series of Debt Se-
curities necessarily constitutes an Event of Default with respect to any other
series of Debt Securities. Each Indenture provides that the Trustee thereunder
may withhold notice to the holders of the Debt Securities of any series of the
occurrence of a default with respect to the Debt Securities of such series
(except a default in payment of principal, premium, if any, interest, if any,
or sinking fund payments, if any) if the Trustee considers it in the interest
of the holders to do so.
Each Indenture provides that if an Event of Default with respect to any series
of Debt Securities issued thereunder shall have occurred and be continuing,
either the relevant Trustee or the holders of at least 25% in principal amount
of the Debt Securities of such series then outstanding may declare the princi-
pal amount (or if any Debt Securities of such series are Original Issue Dis-
count Securities, such lesser amount as may be specified in the terms thereof)
of all the Debt Securities of such series to be due and payable immediately,
but upon certain conditions such declaration and its consequences may be re-
scinded and annulled by the holders of a majority in principal amount of the
Debt Securities of such series then outstanding.
Subject to the provisions of Trust Indenture Act requiring each Trustee, dur-
ing an Event of Default under the relevant Indenture, to act with the requi-
site standard of care, a Trustee is under no obligation to exercise any of its
rights or powers under the relevant Indenture at the request or direction of
any of the holders of Debt Securities of any series unless such holders have
offered such Trustee reasonable indemnity. Subject to the foregoing, holders
of a majority in principal amount of the then outstanding Debt Securities of
any series issued under an Indenture 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 such Indenture with respect to
such series. Each Indenture requires the annual filing by the Company with the
relevant Trustee of a certificate as to whether or not the Company is in de-
fault under the terms of such Indenture.
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Notwithstanding any other provision of the Indentures, the holder of any Debt
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and interest, if any, on such
Debt Security on the respective due dates therefor (as the same may be ex-
tended in accordance with the terms of such Debt Security) and to institute
suit for enforcement of any such payment, and such right shall not be impaired
without the consent of such holder. In addition, in the case of a Subordinated
Debt Security issued to the Trust, if an Event of Default has occurred and is
continuing and such Event of Default is attributable to the failure by the
Company to pay the principal of or premium, if any, or interest, if any, on
such Subordinated Debt Security, then a holder of Trust Preferred Securities
may directly institute a proceeding against the Company for payment.
MODIFICATION, WAIVERS AND MEETINGS
Each Indenture contains provisions permitting the Company and the Trustee
thereunder, with the consent of the holders of a majority in principal amount
of the outstanding Debt Securities of each series issued under such Indenture
and affected by a modification or amendment, to modify or amend any of the
provisions of such Indenture or of the Debt Securities of such series or the
rights of the holders of the Debt Securities of such series under such Inden-
ture, provided that no such modification or amendment shall, among other
things, (i) change the stated maturity of the principal of, or premium, if
any, or any installment of interest, if any, on any Debt Securities issued un-
der such Indenture or reduce the principal amount thereof or any redemption
premium thereon, or reduce the rate of interest thereon, or reduce the amount
of principal of any Original Issue Discount Securities that would be due and
payable upon an acceleration of the maturity thereof, or adversely affect any
right of repayment at the option of any holder, or change any place where, or
the Currency in which, any Debt Securities issued under such Indenture are
payable, or impair the holder's right to institute suit to enforce the payment
of any such Debt Securities on or after the stated maturity thereof, or make
any change that materially adversely affects the right, if any, to convert or
exchange such Debt Securities for other securities in accordance with their
terms, or (ii) reduce the aforesaid percentage of Debt Securities of any se-
ries issued under such Indenture, the consent of the holders of which is re-
quired for any such modification or amendment or the consent of whose holders
is required for any waiver (of compliance with certain provisions of such In-
denture or certain defaults thereunder and their consequences) or reduce the
requirements for a quorum or voting at a meeting of holders of such Debt Secu-
rities or (iii) solely in the case of the Subordinated Indenture, modify any
of the provisions of Article Sixteen thereof (relating to subordination of the
Subordinated Debt Securities) or the definition of Senior Indebtedness in a
manner adverse to the holders of the Subordinated Debt Securities, without in
each such case obtaining the consent of the holder of each outstanding Debt
Security issued under such Indenture so affected.
If the Trust or the Property Trustee holds a series of Subordinated Debt Secu-
rities, no such amendment, modification or waiver which requires approval of
holders of a certain percentage in principal amount of the outstanding Subor-
dinated Debt Securities of such series shall be effective as to such series of
Subordinated Debt Securities, without the approval of the holders of at least
the same percentage of aggregate liquidation amount of outstanding Trust Secu-
rities.
Each Indenture also contains provisions permitting the Company and the rele-
vant Trustee, without the consent of the holders of any Debt Securities issued
thereunder, to modify or amend such Indenture in order to, among other things,
(a) add to the Events of Default or the covenants of the Company for the bene-
fit of the holders of all or any series of Debt Securities issued under such
Indenture; (b) to add or change any provisions of such Indenture to facilitate
the issuance of Bearer Securities; (c) to establish the form or terms of Debt
Securities of any series and any related coupons; (d) to 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 mat-
ters or questions arising under such Indenture which shall not adversely af-
fect the interests of the holders of any series of Debt Securities issued
thereunder in any material respect; or (e) to amend or supplement any provi-
sion contained in such Indenture, provided that such amendment or supplement
does not apply to any outstanding Debt Securities issued prior to the date of
such amendment or supplement and entitled to the benefits of such provision.
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The holders of a majority in aggregate principal amount of the outstanding Debt
Securities of any series may waive compliance by the Company with certain re-
strictive provisions of the relevant Indenture, including the covenant de-
scribed above under "Certain Covenants of the Company--Covenant in
theSenior Indenture-- Limitation on Liens" (which covenant is included only in
the Senior Indenture). The Holders of a majority in aggregate principal amount
of the outstanding Debt Securities of any series may, on behalf of all holders
of Debt Securities of that series, waive any past default under the applicable
Indenture with respect to Debt Securities of that series and its consequences,
except a default in the payment of the principal of, or premium, if any, or in-
terest, if any, on any Debt Securities of such series or in respect of a cove-
nant or provision which cannot be modified or amended without the consent of
the holder of each outstanding Debt Securities of such series affected.
Each Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series issued thereunder. A meeting may be called at any
time by the relevant Trustee, and also, upon request, by the Company or the
holders of at least 10% in principal amount of the outstanding Debt Securities
of such series, in any such case upon notice given in accordance with the pro-
visions of such Indenture. Except for any consent which must be given by the
holder of each outstanding Debt Security affected thereby, as described above,
any resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum (as described below) is present may be adopted by the affirma-
tive vote of the holders of a majority in principal amount of the outstanding
Debt Securities of that series; provided, however, that any resolution with re-
spect to any request, demand, authorization, direction, notice, consent, waiver
or other action which may be made, given or taken by the holders of a specified
percentage, which is less than a majority, in principal amount of the outstand-
ing Debt Securities of a series may be adopted at a meeting or adjourned meet-
ing duly reconvened at which a quorum is present by the affirmative vote of the
holders of such specified percentage in principal amount of the outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance
with the relevant Indenture will be binding on all holders of Debt Securities
of that series and the related coupons. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt Securities
of a series, subject to certain exceptions.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Upon the direction of the Company, either Indenture shall cease to be of fur-
ther effect with respect to any series of Debt Securities issued thereunder
specified by the Company (subject to the survival of certain provisions there-
of, including the obligation to pay Additional Amounts to the extent described
below) when (i) either (A) all outstanding Debt Securities of such series and,
in the case of Bearer Securities, all coupons appertaining thereto, have been
delivered to the relevant Trustee for cancellation (subject to certain excep-
tions) or (B) all Debt Securities of such series and, if applicable, any cou-
pons appertaining thereto, have become due and payable or will become due and
payable at their stated maturity within one year or are to be called for re-
demption within one year and the Company has deposited with the Trustee, in
trust, funds in U.S. dollars or in such Foreign Currency in which such Debt Se-
curities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium, if any) and inter-
est, if any, (and, to the extent that (x) the Debt Securities of such series
provide for the payment of Additional Amounts upon the occurrence of certain
events of taxation, assessment or governmental charge with respect to payments
on such Debt Securities and (y) the amount of any such Additional Amounts is at
the time of deposit reasonably determinable by the Company (in the exercise of
its sole discretion), any such Additional Amounts) to the date of such deposit
(if such Debt Securities have become due and payable) or to the Maturity there-
of, as the case may be, (ii) the Company has paid all other sums payable under
the Indenture with respect to the Debt Securities of such series, and (iii)
certain other conditions are met. If the Debt Securities of any such series
provide for the payment of Additional Amounts, the Company will remain obligat-
ed, following such deposit, to pay Additional Amounts on such Debt Securities
to the extent that the amount thereof exceeds the amount deposited in respect
of such Additional Amounts as aforesaid.
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Unless otherwise provided in the applicable Prospectus Supplement, the Company
may elect with respect to any series of Debt Securities either (a) to defease
and be discharged from any and all obligations with respect to such Debt Secu-
rities (except for, among other things, the obligation to pay Additional
Amounts, if any, upon the occurrence of certain events of taxation, assessment
or governmental charge with respect to payments on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as provided below, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilat-
ed, destroyed, lost or stolen Debt Securities, to maintain an office or agency
in respect of such Debt Securities, to hold moneys for payment in trust, and,
if applicable, to exchange or convert such Debt Securities into other securi-
ties in accordance with their terms) ("defeasance"), or (b) to be released from
its obligations with respect to such Debt Securities described above under "--
Certain Covenants of the Company-- Covenants in the Senior Indenture--Limita-
tion on Liens" (which covenant appears only in the Senior Indenture) and cer-
tain other restrictive covenants, if any, in the relevant Indenture and, if in-
dicated in the applicable Prospectus Supplement, its obligations with respect
to any other covenant applicable to the Debt Securities of such series, and any
omission to comply with such obligations shall not constitute a default or an
Event of Default with respect to the Debt Securities of such series ("covenant
defeasance"), in either case upon the irrevocable deposit with the relevant
Trustee (or other qualifying trustee), in trust for such purpose, of an amount,
in U.S. dollars or in such Foreign Currency in which such Debt Securities are
payable at Stated Maturity, and/or Government Obligations (as defined in the
relevant Indenture) which through the payment of principal and interest in ac-
cordance with their terms will provide money, in an amount sufficient to pay
the principal of and any premium and any interest on (and, to the extent that
(x) the Debt Securities of such series provide for the payment of Additional
Amounts and (y) the amount of any such Additional Amounts is at the time of de-
posit reasonably determinable by the Company (in the exercise of its sole dis-
cretion), any such Additional Amounts with respect to) such Debt Securities,
and any mandatory sinking fund or analogous payments thereon, on the scheduled
due dates therefor or the applicable redemption date, as the case may be.
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 relevant Indenture or any other material agreement relating
to indebtedness for borrowed money to which the Company is a party or is bound,
(ii) the Company has delivered to the relevant Trustee an opinion of counsel
(as specified in the relevant Indenture) to the effect that the holders of such
Debt Securities 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 and (iii) if the cash and Government Obli-
gations deposited are sufficient to pay the outstanding Debt Securities of such
series provided such Debt Securities are redeemed on a particular redemption
date, the Company shall have given the applicable Trustee irrevocable instruc-
tions to redeem such Debt Securities on such date. 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 be-
come an Event of Default with respect to Debt Securities of such series shall
have occurred and been continuing on the date of, or, solely in the case of
Events of Default described in clause (vi) of the first paragraph under "--
Events of Default" above, during the period ending on the 91st day after the
date of, such deposit into trust.
Unless otherwise provided in the applicable Prospectus Supplement, if after the
Company has deposited funds and/or Government Obligations to effect defeasance
or covenant defeasance with respect to Debt Securities of any series, (a) the
holder of a Debt Security of such series is entitled to, and does, elect pursu-
ant to the applicable Indenture or the terms of such Debt Security to receive
payment in a Currency other than that in which such deposit has been made in
respect of such Debt Security, or (b) a Conversion Event (as defined below) oc-
curs in respect of the Foreign Currency in which such deposit has been made,
the indebtedness represented by such Debt Security shall be deemed to have
been, and
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<PAGE>
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest, if any, on such Debt Security as such Debt
Security becomes due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the Currency in which such Debt
Security becomes payable as a result of such election or such Conversion Event
based on (x) in the case of payments made pursuant to clause (a) above, the ap-
plicable market exchange rate for such Foreign Currency in effect on the second
business day prior to such payment date, or (y) with respect to a Conversion
Event, the applicable market exchange rate for such Foreign Currency in effect
(as nearly as feasible) at the time of the Conversion Event.
"Conversion Event" means the cessation of use of (i) a Foreign Currency both by
the government of the country or the confederation which issued such Foreign
Currency and for the settlement of transactions by a central bank or other pub-
lic institutions of or within the international banking community, (ii) the ECU
both within the European Monetary System and for the settlement of transactions
by public institutions of or within the European Union or (iii) any currency
unit or composite currency other than the ECU for the purposes for which it was
established.
In the event the Company effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of the
occurrence of any Event of Default other than an Event of Default with respect
to the covenant described above under "--Certain Covenants of the Company--Cov-
enant in the Senior Indenture--Limitation on Liens" (which covenant appears
only in the Senior Indenture and which would no longer be applicable to such
Debt Securities after such covenant defeasance) or with respect to any other
covenant as to which there has been covenant defeasance, the amount of monies
and/or Government Obligations deposited with the applicable Trustee to effect
such covenant defeasance may not be sufficient to pay amounts due on such Debt
Securities at the time of any acceleration resulting from such Event of De-
fault. However, the Company would remain liable to make payment of such amounts
due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting or restricting such defeasance or covenant defeasance with re-
spect to the Debt Securities of a particular series.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
REGARDING THE TRUSTEES
The Trust Indenture Act of 1939 contains limitations on the rights of a trust-
ee, 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. Each Trustee is permitted to engage
in other transactions with the Company and its subsidiaries from time to time,
provided that if such Trustee acquires any conflicting interest it must elimi-
nate such conflict upon the occurrence of an Event of Default under the rele-
vant Indenture, or else resign.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The payment of the principal of, premium, if any, and interest, if any, on the
Subordinated Debt Securities will be subordinated, to the extent and in the
manner set forth in the Subordinated Indenture, in right of payment to the
prior payment in full of all Senior Indebtedness which may at any time and from
time to time be outstanding. Unless otherwise provided in the applicable Pro-
spectus Supplement with respect to an issue of Subordinated Debt Securities, in
the event of any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, (i) all Senior In-
debtedness shall first be paid in full, or such payment shall be provided for,
before any payment on
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account of the principal of, or premium, if any, or interest, if any, on the
Subordinated Debt Securities is made, (ii) any payment or distribution of as-
sets of the Company to which the holders of the Subordinated Debt Securities
would be entitled except for the subordination provisions of the Subordinated
Indenture shall be paid by the liquidating trustee or other person making such
distribution or directly to the holders of Senior Indebtedness or on their be-
half, to the extent necessary to make payment in full of all Senior Indebted-
ness remaining unpaid, after giving effect to any concurrent payment or distri-
bution to the holders of such Senior Indebtedness, and (iii) in the event that,
notwithstanding the foregoing, any payment or distribution of assets of the
Company is received by the Subordinated Trustee or the holders of any of the
Subordinated Debt Securities before all Senior Indebtedness is paid in full,
such payment or distribution will be paid over to the holders of such Senior
Indebtedness or on their behalf for application to the payment of all such Se-
nior Indebtedness remaining unpaid until all such Senior Indebtedness has been
paid in full or such payment provided for, after giving effect to any concur-
rent payment or distribution to the holders of such Senior Indebtedness. Sub-
ject to the payment in full of all Senior Indebtedness upon any such distribu-
tion of assets of the Company, the holders of the Subordinated Debt Securities
will be subrogated to the rights of the holders of the Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Com-
pany applicable to Senior Indebtedness until the principal of (and premium, if
any) and interest, if any, on the Subordinated Debt Securities shall be paid in
full.
By reason of such subordination, in the event of any distribution of assets of
the Company upon dissolution, winding up, liquidation, reorganization or other
similar proceedings of the Company, (i) holders of Senior Indebtedness will be
entitled to be paid in full before payments may be made on the Subordinated
Debt Securities and the holders of Subordinated Debt Securities will be re-
quired to pay over their share of such distribution, to the extent made in re-
spect of such Subordinated Debt Securities, to the holders of Senior Indebted-
ness until such Senior Indebtedness is paid in full and (ii) creditors of the
Company who are neither holders of Subordinated Debt Securities nor holders of
Senior Indebtedness may recover less, ratably, than holders of Senior Indebted-
ness and may recover more, ratably, than the holders of the Subordinated Debt
Securities. Furthermore, such subordination may result in a reduction or elimi-
nation of payments to the holders of Subordinated Debt Securities. The Subordi-
nated Indenture provides that the subordination provisions thereof will not ap-
ply to any money and securities held in trust pursuant to the discharge, defea-
sance and covenant defeasance provisions of the Subordinated Indenture (see "--
Discharge, Defeasance and Covenant Defeasance" above).
The Subordinated Indenture also provides that no payment on account of the
principal of, or premium, if any, sinking funds, if any, or interest, if any,
on the Subordinated Debt Securities shall be made unless full payment of
amounts then due for the principal of, premium, if any, sinking funds, if any,
and interest, if any, on Senior Indebtedness has been made or duly provided
for.
The Subordinated Indenture defines "Senior Indebtedness" as (a) any liability
of the Company (1) for borrowed money or under any reimbursement obligation re-
lating to a letter of credit, surety bond or similar instrument, or (2) evi-
denced by a bond, note, debenture or similar instrument, or (3) for obligations
to pay the deferred purchase price of property or services, except trade ac-
counts payable arising in the ordinary course of business, or (4) for the pay-
ment of money relating to a capitalized lease obligation, or (5) for the pay-
ment of money under any Swap Agreement; (b) any liability of others described
in the preceding clause (a) that the Company has guaranteed or that is other-
wise its legal liability; and (c) any deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (a) and (b) above, unless,
in the instrument creating or evidencing any such liability referred to in
clause (a) or (b) above or any such deferral, renewal, extension or refunding
referred to in clause (c) above or pursuant to which the same is outstanding,
it is expressly provided that such liability, deferral, renewal, extension or
refunding is subordinate in right of payment to all other Indebtedness of the
Company or is not senior or prior in right of payment to the Subordinated Debt
Securities or ranks pari passu with or subordinate to the Subordinated Debt Se-
curities in right of payment; and provided that the Subordinated Debt Securi-
ties shall not constitute Senior Indebtedness. The Subordinated Indenture de-
fines
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"Swap Agreement" as any financial agreement designed to manage the Company's
exposure to fluctuations in interest rates, currency exchange rates or commod-
ity prices, including without limitation swap agreements, option agreements,
cap agreements, floor agreements, collar agreements and forward purchase agree-
ments.
If this Prospectus is being delivered in connection with the offering of a se-
ries of Subordinated Debt Securities, the accompanying Prospectus Supplement or
the information incorporated by reference herein will set forth the approximate
amount of Senior Indebtedness outstanding as of a recent date. There are no
limitations in the Subordinated Indenture on the issuance or incurrence of Se-
nior Indebtedness of the Company.
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<PAGE>
DESCRIPTION OF PREFERRED STOCK
The Company may issue shares of its Preferred Stock, in one or more series, ei-
ther separately, or together with, or upon the conversion of or in exchange
for, other Securities. The summary of certain provisions of the Preferred Stock
set forth below and the summary of certain terms of a particular series of Pre-
ferred Stock set forth in the applicable Prospectus Supplement do not purport
to be complete and are subject to and qualified in their entirety by reference
to all of the provisions of the Company's certificate of incorporation, as
amended (the "Amended Certificate of Incorporation"), and the Company's By-
laws, which have been filed or incorporated by reference as exhibits to the
Registration Statement, and the form of certificate of designations relating to
such series of Preferred Stock which will be filed as an exhibit to or incorpo-
rated by reference in the Registration Statement, all of which are incorporated
herein by reference.
The following description of Preferred Stock sets forth certain general terms
and provisions of the series of Preferred Stock to which any Prospectus Supple-
ment may relate. Certain other terms of any particular series of Preferred
Stock, including Preferred Stock to be represented by Depositary Shares, will
be described in the applicable Prospectus Supplement. To the extent that any
particular terms of any Preferred Stock described in a Prospectus Supplement
differ from any of the terms described herein, then such terms described herein
shall be deemed to have been superseded by such Prospectus Supplement.
GENERAL
Under the Amended Certificate of Incorporation, the Company is authorized to
issue up to 5,000,000 shares of Preferred Stock, without par value, which may
be issued from time to time in one or more series. Subject to limitations pre-
scribed by Delaware law and the Amended Certificate of Incorporation, the Board
of Directors is authorized to fix the number of shares constituting each series
of Preferred Stock and the designations, preferences and relative, participat-
ing, optional or other special rights, and the qualifications, limitations or
restrictions thereof, including the dividend rights, dividend rates, conversion
rights, exchange rights, voting rights, rights and terms of redemption (includ-
ing sinking fund and purchase fund provisions), redemption prices and dissolu-
tion preferences.
The Company has issued and outstanding shares of its Series B Cumulative Con-
vertible Preferred Stock, no par value (the "Series B Preferred Stock"). Unless
otherwise provided in the applicable Prospectus Supplement, any Offered Pre-
ferred Stock will rank, as to the payment of dividends and the distribution of
assets on liquidation, dissolution or winding up of the Company, junior to the
Series B Preferred Stock. See "--Ranking" and "--Dividend, Repurchase and Re-
demption Restrictions" below and "Description of Capital Stock."
Reference is made to the applicable Prospectus Supplement relating to the se-
ries of Preferred Stock offered thereby (the "Offered Preferred Stock") for
specific terms, including (where applicable): (1) the title of such Offered
Preferred Stock; (2) the number of shares of such Offered Preferred Stock of-
fered, the liquidation preference per share and the initial public offering
price of such Offered Preferred Stock; (3) the dividend rate or method of cal-
culation thereof and the dividend payment dates or periods; (4) the date from
which dividends on such Offered Preferred Stock shall accrue and whether divi-
dends on such Offered Preferred Stock will be cumulative; (5) the procedures
for any auction or remarketing, if any, of such Offered Preferred Stock; (6)
the provisions for a sinking fund, if any, for such Offered Preferred Stock;
(7) the provisions for redemption or repurchase, if applicable, of such Offered
Preferred Stock; (8) any listing of such Offered Preferred Stock on any securi-
ties exchange; (9) the terms and conditions, if any, upon which such Offered
Preferred Stock will be convertible into or exchangeable for other Securities;
(10) whether interests in such Offered Preferred Stock will be represented by
Depositary Shares; (11) the preferences of such Offered Preferred Stock as to
dividends and upon liquidation, dissolution or winding up of the Company; and
(12) any other specific terms of such Offered Preferred Stock.
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<PAGE>
RANKING
Unless otherwise specified in the applicable Prospectus Supplement, any series
of Offered Preferred Stock offered thereby will rank, with respect to both the
payment of dividends and the distribution of assets upon liquidation, dissolu-
tion or winding up of the Company, (i) junior to the Series B Preferred Stock,
(ii) senior to the Common Stock, and (iii) on a parity with shares of any other
outstanding series of Offered Preferred Stock.
DIVIDEND, REPURCHASE AND REDEMPTION RESTRICTIONS
As described under "Description of Capital Stock--Authorized and Outstanding
Preferred Stock--Series B Preferred Stock," and unless otherwise described in
the applicable Prospectus Supplement, the Company will be prohibited (subject
to certain limited exceptions) from paying dividends on, and from redeeming or
otherwise purchasing, any shares of Offered Preferred Stock if the Company has
not paid full cumulative dividends on the Series B Preferred Stock. In addi-
tion, certain agreements to which the Company is a party contain covenants
which have the effect of restricting the payment of dividends and the redemp-
tion or repurchase of capital stock by the Company. In the event of a deterio-
ration in the financial condition or results of operations of the Company, such
covenants could limit or prohibit the payment of dividends on, or the repur-
chase or redemption of, Offered Preferred Stock. In addition, the Company is a
holding company substantially all of whose consolidated assets are held by its
subsidiaries, and the cash flow of the Company and the consequent ability to
pay dividends on and to redeem or repurchase its securities, including, Offered
Preferred Stock, are largely dependent upon the results of operations of such
subsidiaries. See "Description of Debt Securities--Ranking of Debt Securities;
Holding Company Structure."
DIVIDENDS
Subject to the preferential rights of holders of the Series B Preferred Stock
and any other capital stock of the Company ranking prior to any series of the
Offered Preferred Stock as to dividends, holders of shares of such Offered Pre-
ferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors of the Company, out of assets of the Company legally avail-
able therefor, dividends at such rates and on such dates as will be set forth
in, or as are determined by the method described in, the applicable Prospectus
Supplement. Such rates may be fixed or variable or both. If variable, the for-
mula used for determining the dividend rate for each dividend period will be
specified in the applicable Prospectus Supplement. Each such dividend shall be
payable to holders of record as they appear on the stock transfer books of the
Company on such record dates as shall be fixed by the Board of Directors of the
Company. Dividends may be paid in the form of cash, Preferred Stock (of the
same or a different series), or other securities or property, in each case as
specified in the applicable Prospectus Supplement.
Dividends on any series of the Offered Preferred Stock may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the ap-
plicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Offered Preferred Stock for which dividends are non-cumulative, then the hold-
ers of such series of the Offered Preferred Stock will have no right to receive
a dividend in respect of the dividend period ending on such dividend payment
date, and the Company will have no obligation to pay the dividend accrued for
such period, whether or not dividends on such series are declared payable on
any future dividend payment date.
No full dividends will be declared or paid or set aside for payment on any Pre-
ferred Stock of the Company ranking, as to dividends, on a parity with or ju-
nior to any outstanding series of Offered Preferred Stock for any period unless
full dividends on such series of Offered Preferred Stock (including accumulated
dividends on any such series of Offered Preferred Stock on which dividends are
cumulative) have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment
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<PAGE>
thereof set aside for payment. When dividends are not paid in full on any se-
ries of Offered Preferred Stock and any other Preferred Stock ranking on a par-
ity as to dividends with such series of Offered Preferred Stock, all dividends
declared or paid upon shares of Offered Preferred Stock of such series and any
other Preferred Stock ranking on a parity as to dividends with the Offered Pre-
ferred Stock of such series shall be declared and paid pro rata so that the
amount of dividends declared and paid per share on the Offered Preferred Stock
of such series and such other Preferred Stock shall in all cases bear to each
other the same ratio that accrued dividends per share (which in the case of
non-cumulative Preferred Stock shall not include any accumulation in respect of
unpaid dividends for prior dividend periods) on shares of such series of Of-
fered Preferred stock and such other Preferred Stock bear to each other. Except
as provided in the preceding sentence, unless full dividends on all outstanding
shares of any series of Offered Preferred Stock (including accumulated divi-
dends on any such series on which dividends are cumulative) have been or con-
temporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set aside for payment, no dividends (other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, Common Stock or any other stock of the Company rank-
ing junior to the Offered Preferred Stock of such series as to dividends and as
to distribution of assets upon liquidation, dissolution or winding up of the
Company) shall be declared or paid or set aside for payment or any other dis-
tribution declared or made upon the Common Stock or any other stock of the Com-
pany ranking junior to or on a parity with the Offered Preferred Stock of such
series as to dividends or distribution of assets upon liquidation, dissolution
or winding up of the Company, nor may any Common Stock or any other stock of
the Company ranking junior to or on a parity with the Preferred Stock of such
series as to dividends or distribution of assets upon liquidation, dissolution
or winding up of the Company be redeemed, purchased or otherwise acquired for
any consideration (and no moneys shall be paid to or made available for a sink-
ing fund for the redemption of any shares of any such junior of parity stock)
by the Company (except by conversion into or exchange for stock of the Company
ranking junior to the Offered Preferred Stock of such series as to dividends
and as to distribution of assets upon liquidation, dissolution or winding up of
the Company).
Holders of shares of any series of Offered Preferred Stock shall not be enti-
tled to any dividends, whether payable in cash, securities or other property,
in excess of full cumulative (if applicable) dividends on such series. No in-
terest, or sum of money in lieu of interest, shall be payable in respect of any
dividend or payments which may be in arrears.
The Company will be prohibited from paying dividends on Offered Preferred Stock
of any series in the event of a dividend arrearage on the Series B Preferred
Stock and may be prohibited from paying dividends on Offered Preferred Stock of
any series as a result of certain other dividend restrictions. See "--Dividend,
Repurchase and Redemption Restrictions" above and "Description of Capital
Stock-- Authorized and Outstanding Preferred Stock--Series B Preferred Stock"
below.
REDEMPTION AND REPURCHASE
The shares of Offered Preferred Stock of any series may be redeemable at the
option of the Company, may be subject to mandatory redemption pursuant to a
sinking fund or otherwise, or may be subject to repurchase by the Company at
the option of the holders, in each case upon the terms, at the times and at the
prices set forth in the applicable Prospectus Supplement. Offered Preferred
Stock redeemed by the Company will be restored to the status of authorized but
unissued shares of Preferred Stock.
The Prospectus Supplement relating to a series of Offered Preferred Stock which
is subject to mandatory redemption will specify the number of shares of such
series which shall be redeemed by the Company in each year commencing after a
date to be specified, at a redemption price per share to be specified, together
with an amount equal to all accrued and unpaid dividends thereon (including ac-
cumulated dividends on any such series on which dividends are cumulative) to
the date fixed for redemption. The redemption price may be payable in cash, se-
curities or other property, as specified in the Prospectus Supplement relating
to such series of Offered Preferred Stock.
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If fewer than all of the outstanding shares of any series of Offered Preferred
Stock are to be redeemed, the shares to be redeemed will be determined pro ra-
ta, by lot or by any other method deemed equitable by the Company.
In the event that full cumulative dividends on any series of Offered Preferred
Stock (including accumulated dividends on any such series on which dividends
are cumulative) have not been declared and paid or declared and a sum suffi-
cient for the payment thereof set apart for payment, the Company shall not re-
deem, repurchase or otherwise acquire any shares of such series of Offered Pre-
ferred Stock except by conversion into or exchange for capital stock of the
Company ranking junior to the Offered Preferred Stock of such series as to div-
idends and as to distributions upon liquidation, dissolution or winding up of
the Company, or except pursuant to a purchase or exchange offer made on the
same terms to all holders of such series of Offered Preferred Stock.
Notice of redemption shall be given by mailing the same to each record holder
of the shares to be redeemed, not less than 30 nor more than 60 days prior to
the date fixed for redemption thereof, to the respective addresses of such
holders as the same shall appear in the stock registry of the Company. Each
such notice shall state: (i) the redemption date; (ii) the number of shares and
series of Offered Preferred Stock to be redeemed; (iii) the redemption price;
(iv) the place or places where certificates for such Offered Preferred Stock
are to be surrendered for payment of the redemption price; (v) that dividends
on the shares to be redeemed will cease to accrue on such redemption date; and
(vi) the date upon which the holder's conversion rights as to such shares, if
any, shall terminate. If fewer than all shares of any series of the Preferred
Stock held by any holder are to be redeemed, the notice mailed to such holder
shall also specify the number of shares to be redeemed from such holder.
If a notice of redemption has been given, from and after the redemption date
for the shares of Offered Preferred Stock called for redemption (unless the
Company shall default in providing money for the payment of the redemption
price of the shares so called for redemption plus, if applicable, accrued and
unpaid dividends), dividends on the shares of Offered Preferred Stock so called
for redemption shall cease to accrue and such shares shall no longer be deemed
to be outstanding, and all rights of the holders thereof as shareholders of the
Company shall cease, except the right to receive the redemption price plus, if
applicable, accrued and unpaid dividends upon surrender of the certificates
representing the shares to be so redeemed (properly endorsed or assigned for
transfer, if the Company shall so require) in accordance with such notice. If
fewer than all of the shares represented by any such certificates are redeemed,
a new certificate shall be issued representing the unredeemed shares.
The Company will be prohibited from redeeming or repurchasing Offered Preferred
Stock of any series in the event of a dividend arrearage on the Series B Pre-
ferred Stock and may be prohibited from redeeming or repurchasing Offered Pre-
ferred Stock of any series as the result of certain other dividend restric-
tions. See "--Dividend, Repurchase and Redemption Restrictions" above and "De-
scription of Capital Stock" below.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Company, and after payment of all amounts due upon liquidation, dissolution or
winding up to holders of the Series B Preferred Stock and any other capital
stock of the Company ranking prior to the Offered Preferred Stock of any series
as to the distribution of assets upon liquidation, dissolution or winding up,
and subject to the rights of holders of any capital stock of the Company rank-
ing on a parity with the shares of Offered Preferred Stock of such series as to
distribution of assets upon liquidation, dissolution or winding up of the Com-
pany, the holders of shares of Offered Preferred Stock of such series shall be
entitled to receive, out of assets of the Company legally available therefor
and before any distribution or payment shall be made to the holders of any Com-
mon Stock or any other class or series of capital stock of the Company ranking
junior to the Offered Preferred Stock of such series as to distribution of as-
sets upon liquidation,
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dissolution or winding up of the Company, liquidating distributions in the
amount of the liquidation preference per share set forth in the applicable
Prospectus Supplement, plus accrued and unpaid dividends (including accumu-
lated dividends if dividends on such series of Offered Preferred Stock are cu-
mulative). After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Offered Preferred Stock of such se-
ries will have no right or claim to any of the remaining assets of the Compa-
ny. In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the legally available assets of the Company are in-
sufficient to pay the amount of the liquidating distributions on all outstand-
ing shares of Offered Preferred Stock of any series and the corresponding
amounts payable on all shares of other capital stock of the Company ranking on
a parity with the Offered Preferred Stock of such series in the distribution
of assets upon liquidation, dissolution or winding up, the holders of the Of-
fered Preferred Stock of such series and of such other capital stock shall
share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively enti-
tled.
For such purposes, the consolidation or merger of the Company with or into any
other person, or the sale, lease, transfer or conveyance of all or substan-
tially all or any portion of the property or business of the Company, shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Company.
VOTING RIGHTS
Holders of Offered Preferred Stock will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as indi-
cated in the applicable Prospectus Supplement. In the event that the Company
issues a series of Offered Preferred Stock with voting rights or the Offered
Preferred Stock of any series is entitled pursuant to applicable law to vote
on any matter, then, unless otherwise specified in the Prospectus Supplement
relating to such series, each share of such series will be entitled to one
vote on matters on which holders of such shares are entitled to vote. However,
as more fully described under "Description of Depositary Shares," if the Com-
pany elects to provide for the issuance of Depositary Shares representing
fractional interests in shares of any such series of Offered Preferred Stock,
the holder of any such Depositary Share will, in effect and subject to certain
limitations and conditions, be entitled to such fraction of a vote, rather
than a full vote. In the case of any series of Offered Preferred Stock having
one vote per share on matters on which holders of such series are entitled to
vote, the voting power of such series on matters on which holders of such se-
ries and holders of any other series of Preferred Stock or other capital stock
of the Company are entitled to vote as a single class will depend on the num-
ber of shares in such series, not the aggregate stated value, liquidation
preference or initial offering price of the shares of such series.
So long as any shares of Offered Preferred Stock remain outstanding, and ex-
cept as otherwise set forth in the applicable Prospectus Supplement or except
as otherwise required by applicable law, the Company will not, without the af-
firmative vote or consent of the holders of at least a majority of the shares
of any affected series of Offered Preferred Stock outstanding at the time
(voting separately as a single class with all other affected series of Pre-
ferred Stock ranking on a parity with the Offered Preferred Stock of such se-
ries either as to dividends or as to distribution of assets upon liquidation,
dissolution or winding up of the Company and upon which like voting rights
have been conferred and are then exercisable), given in person or by proxy,
either in writing or at a meeting, (i) authorize, create or issue, or increase
the authorized or issued amount of, any class or series of capital stock rank-
ing prior to such affected series of Offered Preferred Stock with respect to
payment of dividends or the distribution of assets upon liquidation, dissolu-
tion or winding up or reclassify any authorized capital stock of the Company
into any such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such shares; or (ii)
amend, alter or repeal the provisions of the Amended Certificate of Incorpora-
tion (including the certificate of designations for such affected series of
Offered Preferred Stock), whether by merger, consolidation or otherwise, so as
to materially and adversely affect any right, preference or privilege of such
affected series of Offered Preferred Stock; provided, however, that any in-
crease in the amount of the authorized Preferred Stock or the creation or is-
suance of any other class or series of capital stock or any other
24
<PAGE>
series of Preferred Stock, or any increase in the number of authorized shares
of any series of Preferred Stock, in each case, ranking on a parity with or ju-
nior to the Preferred Stock of such affected series with respect to payment of
dividends and the distribution of assets upon liquidation, dissolution or wind-
ing up, shall not be deemed to materially and adversely affect such rights,
preferences or privileges.
None of the foregoing voting provisions will apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected or occur, all outstanding shares of the relevant series of Offered
Preferred Stock shall have been redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect such
redemption.
Under Delaware law, notwithstanding anything to the contrary set forth above,
holders of all outstanding shares of Preferred Stock will be entitled to vote
as a class upon a proposed amendment to the Amended Certificate of Incorpora-
tion if the amendment would increase or decrease the aggregate number of autho-
rized shares of such class, increase or decrease the par value of the shares of
such class, or alter or change the powers, preferences or rights of the shares
of such class so as to affect them adversely. However, if any such proposed
amendment would change the powers, preferences or rights of one or more series
of Preferred Stock so as to affect them adversely, but shall not affect all se-
ries of Preferred Stock, then only the shares of the series so affected shall
be considered a separate class for such purposes. Any such amendment requires
the vote of a majority of the shares entitled to vote thereon, voting as a
class.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, upon which shares of any series of Preferred Stock are con-
vertible into or exchangeable for the Common Stock, another series of Preferred
Stock or other Securities will be set forth in the applicable Prospectus Sup-
plement relating thereto. Such terms may include provisions for conversion or
exchange, either mandatory, at the option of the holders or at the option of
the Company.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the shares of Preferred Stock will be
named in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
The Company may offer Depositary Shares (either separately or together with
other Securities) representing fractional interests in shares of Preferred
Stock of any series. In connection with the issuance of any Depositary Shares,
the Company will enter into a deposit agreement (a "Deposit Agreement") with a
bank or trust company, as depositary (the "Preferred Stock Depositary"), which
will be named in the applicable Prospectus Supplement. Depositary Shares will
be evidenced by depositary receipts (the "Depositary Receipts") issued pursuant
to the related Deposit Agreement. The summary of certain provisions of the De-
positary Shares and the Deposit Agreement set forth below and the summary of
certain terms of a particular issue of Depositary Shares and the related De-
posit Agreement set forth in the applicable Prospectus Supplement do not pur-
port to be complete and are subject to and qualified in their entirety by ref-
erence to all the provisions of the form of Deposit Agreement,
together with the form of related Depositary Receipt which will be filed as an
exhibit to or incorporated by reference in the Registration Statement, all of
which are incorporated herein by reference.
The following description of Depositary Shares sets forth certain general terms
and provisions of the Depositary Shares and the related Deposit Agreement to
which any Prospectus Supplement may relate. Certain other terms of any such De-
positary Shares and the related Deposit Agreement will be described in the ap-
plicable Prospectus Supplement. To the extent that any particular terms of the
Depositary Shares or the related Deposit Agreement described in a Prospectus
Supplement differ from any of the terms described herein, then such terms de-
scribed herein shall be deemed to have been superseded by such Prospectus Sup-
plement.
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GENERAL
The Company may provide for the issuance by the Preferred Stock Depositary of
Depositary Receipts evidencing the related Depositary Shares, each of which
Depositary Shares in turn will represent a fractional interest (which will be
specified in the applicable Prospectus Supplement) in one share of a series of
Preferred Stock. Shares of Preferred Stock of any series represented by Depos-
itary Shares will be deposited under a separate Deposit Agreement. Subject to
the terms of the Deposit Agreement, each owner of a Depositary Receipt will be
entitled, in proportion to the fraction of a share of Preferred Stock repre-
sented by the related Depositary Share, to all the rights, preferences and
privileges of, and will be subject to all of the limitations and restrictions
on, the Preferred Stock represented thereby (including, if applicable and sub-
ject to certain matters discussed below, dividend, voting, conversion, ex-
change, redemption and liquidation rights).
Depositary Shares may be issued in respect of shares of the Preferred Stock of
any series. Immediately following the issuance of any such shares of Preferred
Stock by the Company, the Company will deposit such shares of Preferred Stock
with the relevant Preferred Stock Depositary and will cause the Preferred
Stock Depositary to issue, on behalf of the Company, the related Depositary
Receipts.
Reference is made to the applicable Prospectus Supplement relating to the De-
positary Shares offered thereby for specific terms, including (where applica-
ble): (1) the terms of the series of Preferred Stock deposited by the Company
under the related Deposit Agreement; (2) the number of such Depositary Shares
and the fraction of one share of such Preferred Stock represented by one such
Depositary Share; (3) whether such Depositary Shares will be listed on any se-
curities exchange; (4) whether such Depositary Shares will be sold with any
other Securities and, if so, the amount and terms thereof; and (5) any other
specific terms of such Depositary Shares and the related Deposit Agreement.
Depositary Receipts may be surrendered for transfer or exchange for new Depos-
itary Receipts of different authorized denominations at any office or agency
of the relevant Preferred Stock Depositary maintained for such purpose, sub-
ject to the terms of the related Deposit Agreement. Unless otherwise specified
in the applicable Prospectus Supplement, Depositary Receipts will be issued in
denominations evidencing any whole number of Depositary Shares. No service
charge will be made for any permitted transfer or exchange of Depositary Re-
ceipts, but the Company or the Preferred Stock Depositary may require payment
of any tax or other governmental charge payable in connection therewith.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the related Preferred Stock to the
record holders of Depositary Receipts in proportion, insofar as possible, to
the number of Depositary Receipts owned by such holders on the relevant record
date. The Preferred Stock Depositary will distribute only such amount, howev-
er, as can be distributed without attributing to any holder of Depositary Re-
ceipts a fraction of one cent, and any balance not so distributed will be
added to and treated as part of the next sum, if any, received by the Pre-
ferred Stock Depositary for distribution to the record holders of Depositary
Receipts.
In the event of a distribution other than in cash, the Preferred Stock Deposi-
tary will distribute property received by it to the record holders of Deposi-
tary Receipts entitled thereto in proportion, insofar as possible, to the num-
ber of Depositary Receipts owned by such holders on the relevant record date,
unless the Preferred Stock Depositary determines that it is not feasible to
make such distribution, in which case the Preferred Stock Depositary may, with
the approval of the Company, adopt such method as it deems equitable and prac-
ticable for the purpose of effecting such distribution, including sale (public
or private) of such property and distribution of the net proceeds from such
sale to such holders.
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<PAGE>
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the related series of Preferred Stock will be made available to holders of De-
positary Receipts.
The amount distributed in any of the foregoing cases will be reduced by any
amount required to be withheld by the Company or the Preferred Stock Deposi-
tary on the account of taxes.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of the Depositary Receipts at an office or agency of the Pre-
ferred Stock Depositary maintained for such purpose (unless the related shares
of Preferred Stock have previously been called for redemption), the holder
thereof will be entitled to delivery, at such office or agency, to or upon
such holder's order, of the number of whole shares of the related series of
Preferred Stock and any money or other property represented by such Depositary
Receipts. Shares of Preferred Stock so withdrawn, however, may not be redepos-
ited. If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of whole shares of Preferred Stock
to be withdrawn, the Preferred Stock Depositary will deliver to such holder at
the same time a new Depositary Receipt evidencing such excess number of Depos-
itary Shares.
REDEMPTION AND REPURCHASE OF PREFERRED STOCK
If a series of Preferred Stock represented by Depositary Shares is subject to
redemption at the option of the Company, then, whenever the Company redeems
shares of Preferred Stock of such series held by the Preferred Stock Deposita-
ry, the Preferred Stock Depositary will redeem as of the same redemption date
the number of Depositary Shares representing the shares of the Preferred Stock
so redeemed, provided the Company shall have paid in full to the Preferred
Stock Depositary the redemption price of the Preferred Stock to be redeemed
plus any other amounts or property payable with respect to the Preferred Stock
to be redeemed. The redemption price per Depositary Share will be equal to the
redemption price and any other amounts or property per share payable with re-
spect to the Preferred Stock multiplied by the fraction of a share of Pre-
ferred Stock represented by one such Depositary Share. If less than all of the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by the Preferred Stock Depositary by lot or pro rata or other
equitable method, in each case as may be determined by the Company. If the De-
positary Shares evidenced by a Depositary Receipt are to be redeemed in part
only, one or more new Depositary Receipts will be issued for any Depositary
Shares not so redeemed.
After the date fixed for redemption, the Depositary Shares so called for re-
demption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Receipts evidencing the Depositary Shares so called
for redemption will cease, except the right to receive any monies payable upon
such redemption and any money or other property to which the holders of such
Depositary Receipts were entitled upon such redemption upon surrender of such
Depositary Receipts to the Preferred Stock Depositary.
Depositary Shares, as such, are not subject to repurchase by the Company at
the option of the holders. Nevertheless, if the Preferred Stock represented by
Depositary Shares is subject to repurchase of the option of the holders, the
related Depositary Receipts may be surrendered by the holders thereof to the
Preferred Stock Depositary with written instructions to the Preferred Stock
Depositary to instruct the Company to repurchase the Preferred Stock repre-
sented by the Depositary Shares evidenced by such Depositary Receipts at the
applicable repurchase price specified in the related Prospectus Supplement.
The Company, upon receipt of such instructions and subject to the Company hav-
ing funds legally available therefor, will repurchase the requisite whole num-
ber of shares of such Preferred Stock from the Preferred Stock Depositary, who
in turn will repurchase such Depositary Receipts. Notwithstanding the forego-
ing, holders shall only be entitled to request the repurchase of Depositary
Shares representing one or more whole shares of the related Preferred Stock.
The repurchase price per Depositary Share will be
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<PAGE>
equal to the repurchase price and any other amounts per share payable with re-
spect to the Preferred Stock multiplied by the fraction of a share of Preferred
Stock represented by one Depositary Share. If the Depositary Shares evidenced
by a Depositary Receipt are to be repurchased in part only, one or more new De-
positary Receipts will be issued for any Depositary Shares not to be repur-
chased.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock of any series represented by Depositary Shares are entitled to vote, the
relevant Preferred Stock Depositary will mail the information contained in such
notice of meeting to the record holders of the related Depositary Receipts.
Each record holder of Depositary Receipts evidencing Depositary Shares on the
record date (which will be the same date as the record date for the Preferred
Stock) will be entitled to instruct the Preferred Stock Depositary as to the
exercise of the voting rights pertaining to the amount of Preferred Stock rep-
resented by such holder's Depositary Shares. The Preferred Stock Depositary
will endeavor, insofar as practicable, to vote the number of shares of Pre-
ferred Stock represented by such Depositary Shares in accordance with such in-
structions, and the Company will agree to take all reasonable action which may
be deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will ab-
stain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Receipts evidencing the
Depositary Shares representing such Preferred Stock.
CONVERSION AND EXCHANGE OF PREFERRED STOCK
If the Preferred Stock represented by Depositary Shares is exchangeable at the
option of the Company for other Securities, then, whenever the Company exer-
cises its option to exchange all or a portion of such shares of Preferred Stock
held by the Preferred Stock Depositary, the Preferred Stock Depositary will ex-
change as of the same exchange date a number of such Depositary Shares repre-
senting the shares of the Preferred Stock so exchanged, provided the Company
shall have issued and deposited with the Preferred Stock Depositary the Securi-
ties for which such shares of Preferred Stock are to be exchanged. The exchange
rate per Depositary Share shall be equal to the exchange rate per share of Pre-
ferred Stock multiplied by the fraction of a share of Preferred Stock repre-
sented by one Depositary Share. If less than all of the Depositary Shares are
to be exchanged, the Depositary Shares to be exchanged will be selected by the
Preferred Stock Depositary by lot or pro rata or other equitable method, in
each case as may be determined by the Company. If the Depositary Shares evi-
denced by a Depositary Receipt are to be exchanged in part only, a new Deposi-
tary Receipt or Receipts will be issued for any Depositary Shares not to be ex-
changed.
Depositary Shares, as such, are not convertible or exchangeable at the option
of the holders into other Securities or property. Nevertheless, if the Pre-
ferred Stock represented by Depositary Shares is convertible into or exchange-
able for other Securities at the option of the holders, the related Depositary
Receipts may be surrendered by holders thereof to the Preferred Stock Deposi-
tary with written instructions to the Preferred Stock Depositary to instruct
the Company to cause conversion or exchange, as the case may be, of the Pre-
ferred Stock represented by the Depositary Shares evidenced by such Depositary
Receipts into a whole number of shares of Common Stock or Preferred Stock, a
whole number of Common Stock Warrants, or Debt Securities in authorized denomi-
nations, as specified in the related Prospectus Supplement. The Company, upon
receipt of such instructions and any amounts payable in respect thereof, will
cause the conversion or exchange, as the case may be, and will deliver to the
holders such number of whole shares of Common Stock or Preferred Stock, a whole
number of Common Stock Warrants, or a principal amount of Debt Securities in
authorized denominations (and cash in lieu of any fractional Security). The ex-
change or conversion rate per Depositary Share shall be equal to the exchange
or conversion rate per share of Preferred Stock multiplied by the fraction of a
share of Preferred Stock represented by one Depositary Share. If the Depositary
Shares evidenced by a Depositary Receipt are to be converted or exchanged in
part only, a new Depositary Receipt or Receipts will be issued for any Deposi-
tary Shares not to be converted or exchanged.
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<PAGE>
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The Depositary Receipts evidencing Depositary Shares and any provision of the
related Deposit Agreement may at any time be amended by agreement between the
Company and the Preferred Stock Depositary. However, any amendment that mate-
rially and adversely alters the rights of the holders of Depositary Receipts
issued under any Deposit Agreement will not be effective unless such amendment
has been approved by the holders of at least a majority of such Depositary Re-
ceipts then outstanding (or such greater proportion as may be required by the
rules of any securities exchange on which the related Depositary Shares may be
listed). In no event may any such amendment impair the right of any holder of
Depositary Receipts, subject to the conditions specified in the Deposit Agree-
ment, to receive the related Preferred Stock upon surrender of such Depositary
Receipts as described above under "--Withdrawal of Preferred Stock."
The Deposit Agreement may be terminated by the Company upon not less than 60
days' notice to the Preferred Stock Depositary. In any such case, the Pre-
ferred Stock Depositary shall deliver or make available to each holder of the
related Depositary Receipts, upon surrender of such Depositary Receipts, such
number of whole shares of the related series of Preferred Stock represented by
the Depositary Shares evidenced by such Depositary Receipts, together with
cash in lieu of any fractional shares (to the extent the Company has deposited
such cash with the Preferred Stock Depositary). The Deposit Agreement will au-
tomatically terminate if all of the shares of Preferred Stock deposited there-
under shall have been withdrawn, redeemed, converted or exchanged or if there
shall have been a final distribution in respect of such Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay the fees and expenses of the Preferred Stock Depositary
in connection with the performance of its duties under the Deposit Agreement,
and will pay all transfer and other taxes and governmental charges arising
solely from the existence of the Deposit Agreement. Holders of Depositary Re-
ceipts will be required to pay all other transfer and other taxes and govern-
mental charges (including taxes and other governmental charges in connection
with the transfer, exchange, surrender or conversion of Depositary Receipts)
and such other charges as are expressly provided in the Deposit Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its election to do so, and the Company may at any time re-
move the Preferred Stock Depositary, any such resignation or removal to take
effect upon the appointment of a successor Preferred Stock Depositary.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary Receipts
any reports and communications from the Company which are received by the Pre-
ferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if ei-
ther is prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performing their duties thereunder without gross negligence or
willful misconduct, and the Company and the Preferred Stock Depositary will
not be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or any related shares of Preferred Stock or Depositary Re-
ceipts unless satisfactory indemnity is furnished. The Company and the Pre-
ferred Stock Depositary may rely on advice of counsel, accountants or other
advisors, and information provided by persons presenting shares of Preferred
Stock for deposit, holders of Depositary Receipts or other persons believed to
be authorized or competent and on documents believed to be genuine.
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In the event that the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on
the one hand, and the Company, on the other hand, the Preferred Stock Deposi-
tary shall be entitled to act on such claims, requests or instructions received
from the Company.
DESCRIPTION OF COMMON STOCK
The Company may issue (either separately or together with other Securities)
shares of its Common Stock. Under its Amended Certificate of Incorporation, the
Company is authorized to issue up to 100,000,000 shares of Common Stock. Refer-
ence is made to the applicable Prospectus Supplement relating to Common Stock
offered thereby for the terms relevant thereto, including the number of shares
offered and the initial public offering price. For a summary of certain terms
of the Common Stock, see "Description of Capital Stock" below.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue (either separately or together with other Securities)
warrants for the purchase of Common Stock ("Common Stock Warrants"). The Common
Stock Warrants are to be issued under warrant agreements (each a "Common Stock
Warrant Agreement") to be entered into between the Company and a bank or trust
company, as warrant agent ("Common Stock Warrant Agent"), all as set forth in
the Prospectus Supplement relating to the particular issue of Common Stock War-
rants. The form of Common Stock Warrant Agreement, including the form of cer-
tificates representing the Common Stock Warrants ("Common Stock Warrant Certif-
icates"), that will be entered into with respect to a particular offering of
Common Stock Warrants will be filed as an exhibit to or incorporated by refer-
ence in the Registration Statement. The following summary of certain provisions
of the Common Stock Warrant Agreement and the Common Stock Warrants and the
summary of certain terms of the particular Common Stock Warrant Agreement and
Common Stock Warrants set forth in the applicable Prospectus Supplement do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the particular Common Stock Warrant
Agreement and the related Common Stock Warrant Certificates, all of which are
incorporated herein by reference.
The following description of the Common Stock Warrants sets forth certain gen-
eral terms and provisions of the Common Stock Warrants and the related Common
Stock Warrant Agreement to which any Prospectus Supplement may relate. Certain
other terms of any Common Stock Warrants and the related Common Stock Warrant
Agreement will be described in the applicable Prospectus Supplement. To the ex-
tent that any particular terms of the Common Stock Warrants or the related Com-
mon Stock Warrant Agreement described in a Prospectus Supplement differ from
any of the terms described herein, then such terms described herein shall be
deemed to have been superseded by such Prospectus Supplement.
GENERAL
Reference is made to the applicable Prospectus Supplement for the terms of the
Common Stock Warrants offered thereby, including (where applicable): (1) the
title and aggregate number of such Common Stock Warrants; (2) the number of
shares of Common Stock that may be purchased upon exercise of each such Common
Stock Warrant; the price, or the manner of determining the price, at which such
shares may be purchased upon such exercise; if other than cash, the property
and manner in which the exercise price may be paid; and any minimum number of
such Common Stock Warrants that are exercisable at any one time; (3) the time
or times at which, or period or periods during which, such Common Stock War-
rants may be exercised and the expiration date of such Common Stock Warrants;
(4) the terms of any right of the Company to redeem such Common Stock Warrants;
(5) the terms of any right
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of the Company to accelerate the exercise of such Common Stock Warrants upon
the occurrence of certain events; (6) whether such Common Stock Warrants will
be sold with any other Securities, and the date, if any, on and after which
such Common Stock Warrants and any such other Securities will be separately
transferable; and (7) any other terms of such Common Stock Warrants.
Common Stock Warrant Certificates may be surrendered for transfer or exchange
for new Common Stock Warrant Certificates of authorized denominations at any
office or agency of the relevant Common Stock Warrant Agent maintained for
such purpose, subject to the terms of the related Common Stock Warrant Agree-
ment. Unless otherwise specified in the applicable Prospectus Supplement, Com-
mon Stock Warrant Certificates will be issued in denominations evidencing any
whole number of Warrants. No service charge will be made for any permitted
transfer or exchange of Common Stock Warrant Certificates, but the Company or
the Common Stock Warrant Agent may require payment of any tax or other govern-
mental charge payable in connection therewith.
EXERCISE OF WARRANTS
Each Common Stock Warrant will entitle the holder to purchase such number of
shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable from, the Prospectus Supplement relating to such
Common Stock Warrants, by payment of such exercise price in the Currency and
in the manner specified in the Prospectus Supplement. Common Stock Warrants
may be exercised at any time up to the date and time specified in the applica-
ble Prospectus Supplement for the expiration thereof. After the specified ex-
piration time on the specified date of expiration, unexercised Common Stock
Warrants will become void.
Upon receipt at an office or agency indicated in the applicable Prospectus
Supplement of (i) payment of the exercise price and (ii) the Common Stock War-
rant Certificate properly completed and duly executed, the Company will, as
soon as practicable, forward a certificate or certificates representing the
whole number of shares of Common Stock purchasable upon such exercise. Unless
otherwise indicated in the applicable Prospectus Supplement, fractional shares
of Common Stock will not be issued upon the exercise of Warrants and, in lieu
thereof, the Company will make a cash payment in an amount determined as pro-
vided in the applicable Prospectus Supplement. If less than all of the Common
Stock Warrants represented by such Common Stock Warrant Certificate are exer-
cised, a new Common Stock Warrant Certificate will be issued for the remaining
number of Common Stock Warrants. The holder of a Common Stock Warrant will be
required to pay any tax or other governmental charge that may be imposed in
connection with any transfer involved in the issuance of the Common Stock pur-
chased upon such exercise.
MODIFICATIONS
Any Common Stock Warrant Agreement and the terms of the related Common Stock
Warrants may be modified or amended by the Company and the applicable Common
Stock Warrant Agent, without the consent of any holder of the related Common
Stock Warrants, for the purpose of curing any ambiguity, or of curing, cor-
recting or supplementing any defective or inconsistent provision contained
therein, or in any other manner that the Company deems necessary or desirable
and that will not materially and adversely affect the interests of the holders
of the related Common Stock Warrants.
The Company and the applicable Common Stock Warrant Agent may also modify or
amend the applicable Common Stock Warrant Agreement and the terms of the re-
lated Common Stock Warrants with the consent of the holders of not less than a
majority in number of the then outstanding unexercised Common Stock Warrants
affected thereby; provided that no such modification or amendment that accel-
erates the expiration date, increases the exercise price, or reduces the num-
ber of outstanding Common Stock Warrants the consent of whose holders is re-
quired for any such amendment or modification, may be made without the consent
of each holder affected thereby.
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NO RIGHTS AS STOCKHOLDERS
Holders of Common Stock Warrants are not entitled, by virtue of being such
holders, to vote, consent or receive notice as stockholders of the Company in
respect of any meeting of stockholders for the election of directors of the
Company or any other matter, or to exercise any other rights whatsoever as
stockholders of the Company, or to receive any dividends or distributions, if
any, on the Common Stock.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of (i) 100,000,000 shares
of Common Stock, par value $.625 per share, and (ii) 5,000,000 shares of Pre-
ferred Stock, no par value.
As of December 31, 1996, (i) 51,595,827 shares of Common Stock were issued and
outstanding and an additional 7,029,917 shares of Common Stock were issued and
held in the Company's treasury and (ii) 1,100,000 shares of the Company's Se-
ries B Cumulative Convertible Preferred Stock (the "Series B Preferred Stock")
had been authorized and 875,191 such shares were outstanding.
The following summary of certain provisions of the Common Stock, Preferred
Stock, Series B Preferred Stock, and the Company's Amended Certificate of In-
corporation and By-laws does not purport to be complete and is qualified in
its entirety by reference to the Amended Certificate of Incorporation (includ-
ing the certificate of designations establishing the terms of the Series B
Preferred Stock) and By-laws, copies of which have been incorporated by refer-
ence or filed as exhibits to the Registration Statement.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share on all matters
voted on by stockholders, including elections of directors, and, except as
otherwise required by law or provided by the express provisions of any series
of Preferred Stock of the Company, the holders of such shares will exclusively
possess all voting power of the Company. In that regard, the holders of Series
B Preferred Stock are entitled to vote with the Common Stock as a single class
on all matters upon which the Common Stock is entitled to vote. See "--Pre-
ferred Stock" below. There is no cumulative voting in the election of direc-
tors, and no holder of Common Stock is entitled as such, as a matter of right,
to subscribe for or purchase any shares of Common Stock or Preferred Stock.
Subject to the preferential rights of any outstanding series of Preferred
Stock, the holders of Common Stock are entitled to receive ratably such divi-
dends as may be declared from time to time by the Board of Directors from
funds legally available therefor. In the event of a liquidation, dissolution
or winding up of the Company, holders of Common Stock are entitled to share
ratably in all assets remaining after payment or provision for liabilities and
amounts owing in respect of any outstanding Preferred Stock.
Certain agreements to which the Company is a party contain covenants which
have the effect of restricting the payment of dividends on capital stock by
the Company. In the event of a deterioration in the financial condition or re-
sults of operations of the Company, such covenants could limit or prohibit the
payment of dividends on Common Stock. In addition, the Company is a holding
company substantially all of whose consolidated assets are held by its subsid-
iaries, and the cash flow of the Company and the consequent ability to pay
dividends on Common Stock are largely dependent upon the results of operations
of such subsidiaries. See "Description of Debt Securities--Ranking of Debt Se-
curities; Holding Company Structure."
The transfer agent for the Common Stock is First Chicago Trust Company of New
York.
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PREFERRED STOCK
Preferred Stock may be issued from time to time in one or more series. Subject
to limitations prescribed by Delaware law and the Amended Certificate of Incor-
poration, the Board of Directors is authorized to fix the number of shares con-
stituting each series of Preferred Stock and the designations, preferences and
relative participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, including, without limitation, the divi-
dend rights, dividend rates, conversion rights, exchange rights, voting rights,
rights and terms of redemption (including sinking and purchase fund provi-
sions), the redemption prices and the dissolution preferences. The issuance of
Preferred Stock, while providing flexibility in connection with possible acqui-
sitions and other corporate purposes, could, among other things, adversely, af-
fect the voting power of the holders of Common Stock and, under certain circum-
stances, make it more difficult for a third party to gain control of the Com-
pany and could have the effect of delaying or preventing a merger, tender offer
or other attempted takeover of the Company. No Holder of Preferred Stock shall
be entitled, as a matter of right, to subscribe for or purchase any shares of
Preferred Stock or Common Stock.
Series B Preferred Stock. In 1989, the Board of Directors amended the Company's
TASP. As part of this amendment, the Board designated a series of 1,100,000
preferred shares as Series B Preferred Stock. As of December 31, 1996, 875,191
shares of Series B Preferred Stock were issued and outstanding. The Series B
Preferred Stock is convertible into Common Stock at the option of the holder.
At December 31, 1996, the Series B Preferred Stock was convertible into Common
Stock at the rate of 4.71 shares of Common Stock for each share of Series B
Preferred Stock, subject to antidilution adjustments in certain circumstances
(which include, but are not limited to, issuances of Common Stock at less than
fair market value), subject to the matters described in the following para-
graph.
As of December 31, 1996, all of the outstanding shares of Series B Preferred
Stock were held for the benefit of the TASP participants by a trustee (the
"TASP Trustee"). In the event of any transfer of Series B Preferred Stock to a
person other than a trustee for an employee stock ownership or other employee
benefit plan of the Company, the shares of Series B Preferred Stock so trans-
ferred shall be automatically converted into shares of Common Stock on the
terms then in effect for such conversion. However, in the event that shares of
Series B Preferred Stock are automatically converted upon transfer to a partic-
ipant in an employee stock ownership plan of the Company in connection with the
termination of the transferee's participation in the plan, each such share
shall be converted into a number of shares of Common Stock which is the greater
of (i) 4.71 shares of Common Stock (the conversion rate at December 31, 1996),
subject to antidilution adjustments in certain circumstances, and (ii) the num-
ber of shares of Common Stock obtained by dividing $152.10 by the then fair
market value (as defined) of a share of Common Stock.
Holders of the Series B Preferred Stock are entitled to vote with the Common
Stock as a single class on all matters upon which the Common Stock is entitled
to vote and each share of Series B Preferred Stock is entitled to a number of
votes in such circumstances equal to the product of 1.3 times the number of
shares of Common Stock into which each share of the Series B Preferred Stock is
then convertible on the record date for such vote. The approval of the holders
of at least two-thirds of the outstanding shares of Series B Preferred Stock,
voting separately as a class, is required for certain actions, including, with-
out limitation, the authorization of any additional class of capital stock, or
any increase in the authorized amount of any class of capital stock, ranking
prior to or on parity with the Series B Preferred Stock as to dividends or the
distribution of assets upon liquidation, dissolution or winding up of the Com-
pany, except an increase in the authorized amount of any class of stock ranking
on a parity with the Series B Preferred Stock to be used for the purpose of
transferring such stock to an employee stock ownership plan or other employee
benefit plan of the Company or any subsidiary; any amendment to the Amended
Certificate of Incorporation or any other certificate filed pursuant to law
which would adversely affect any of the rights, powers or preferences of the
Series B Preferred Stock; or any consolidation, merger, sale or other transfer
of more than 50% of the "assets" or "earning power" (as defined) of the Company
which, in the determination of
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a majority of the Company's independent directors (as defined), can reasonably
be expected to jeopardize the Company's financial ability to meet its divi-
dend, redemption or liquidation payment obligations to the holders of the Se-
ries B Preferred Stock. The TASP Trustee is required to vote the allocated
shares of Series B Preferred Stock based upon instructions from the TASP par-
ticipants; unallocated shares are voted in proportion to the voting instruc-
tions received from the participants with allocated shares.
Each share of Series B Preferred Stock is entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available therefor,
cumulative cash dividends in the amount of $12.93 per annum, payable semi-an-
nually. In the event that full cumulative dividends on the Series B Preferred
Stock have not been declared and paid or set apart for payment when due, the
Company shall not declare or pay or set apart for payment any dividends, or
make any other distributions on, or make any payment on account of the pur-
chase, redemption or other retirement of, any other class or series of stock
of the Company ranking, as to dividends or as to distributions in the event of
a liquidation, dissolution or winding up of the Company, junior to the Series
B Preferred Stock (including, without limitation, the Common Stock and the
Preferred Stock offered hereby), until full cumulative dividends on the Series
B Preferred Stock shall have been paid or declared and set apart for payment;
provided that the foregoing shall not apply to (i) any dividend payable solely
in shares of stock ranking, as to dividends and as to distributions in the
event of a liquidation, dissolution or winding up of the Company, junior to
the Series B Preferred Stock, or (ii) the acquisition of shares of any stock
ranking, as to dividends or as to distributions in the event of a liquidation,
dissolution or winding up of the Company, junior to the Series B Preferred
Stock either (A) pursuant to any existing or future employee or director bene-
fit plan of the Company or any subsidiary, or (B) in exchange solely for
shares of any other stock ranking as to dividends and as to distributions in
the event of a liquidation, dissolution or winding up of the Company, junior
to the Series B Preferred Stock. No dividend may be declared or paid on any
shares of capital stock ranking on a parity with the Series B Preferred Stock
as to dividends unless there are also declared and paid or set apart for pay-
ment on the Series B Preferred Stock dividends for all dividend payment peri-
ods ending on or before the dividend payment date for such parity stock, rata-
bly in proportion to the respective amounts of dividends accrued and unpaid on
the Series B Preferred Stock and such parity stock.
Upon liquidation, dissolution or winding up of the Company, the holders of the
Series B Preferred Stock are entitled to receive out of assets legally avail-
able therefor and subject to the rights of any stock ranking senior to or on a
parity with the Series B Preferred Stock in respect of distributions upon liq-
uidation, dissolution or winding up, an amount equal to $152.10 per share plus
accrued and unpaid dividends, before any amount shall be paid or distributed
to the holders of shares of capital stock ranking junior to the Series B Pre-
ferred Stock with respect to distributions upon liquidation, dissolution and
winding up, including the Preferred Stock offered hereby and the Common Stock.
If, upon any such liquidation, dissolution or winding up, amounts payable in
respect of the Series B Preferred Stock and any other capital stock ranking as
to such distribution on a parity with the Series B Preferred Stock are not
paid in full, the holders of Series B Preferred Stock and such parity stock
shall share ratably in any distribution of assets in proportion to the full
respective preferential amounts to which they are entitled. Neither the merger
or consolidation of the Company with or into any other corporation, nor the
sale, transfer, exchange or lease of all or any portion of the assets of the
Company, shall be deemed to be a dissolution, liquidation or winding up for
the foregoing purposes.
The Series B Preferred Stock is redeemable, in whole or in part, at the
Company's option at a redemption price of $155.98 per share if redeemed during
the twelve months ending July 1, 1997, declining annually to $152.10 per share
if redeemed after July 1, 1999, and the Company may also redeem the Series B
Preferred Stock at any time at $152.10 under certain limited circumstances re-
lating to federal income tax matters, plus in each case accrued and unpaid
dividends to the date fixed for redemption. The Company, at its option, may
make payment of the redemption price in cash or shares of Common Stock or a
combination thereof. The Series B Preferred Stock is also subject to mandatory
redemption for cash or, at the Company's option, for shares of Common Stock or
a combination thereof, at a price
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<PAGE>
of $152.10 per share, plus accrued and unpaid dividends to the date fixed for
redemption, upon notice from the holder of the Series B Preferred Stock to the
Company, if and to the extent necessary (i) for the holder of Series B Pre-
ferred Stock to make required distributions to, or to satisfy an investment
election provided to, participants in an employee stock ownership plan of the
Company for which it is holding the Series B Preferred Stock, or (ii) for such
employee stock ownership plan to pay principal, interest or premium on its in-
debtedness.
Upon consummation of any consolidation, merger, reclassification or similar
transaction involving the Company in which the outstanding Common Stock is by
operation of law exchanged solely for or changed solely into stock of any suc-
cessor or resulting company (including the Company) which stock constitutes
"qualifying employer securities" (within the meaning of certain provisions of
the Internal Revenue Code of 1986 and the Employee Retirement Income Security
Act of 1974) with respect to a holder of Series B Preferred Stock, the Series
B Preferred Stock shall become preferred stock of such successor or resulting
company having, insofar as possible, the same terms as the Series B Preferred
Stock and shall be convertible into the number and kind of "qualifying em-
ployer securities" receivable by a holder of the number of shares of Common
Stock into which such shares of Series B Preferred Stock could have been con-
verted immediately prior to such transaction. Upon consummation or any consol-
idation, merger, reclassification or similar transaction involving the Company
pursuant to which the outstanding Common Stock is by operation of law ex-
changed for or changed into other securities, cash or other property other
than "qualifying employer securities," holders of shares of Series B Preferred
Stock are entitled to receive the same securities, cash or other property re-
ceivable by a holder of the number of shares of Common Stock into which such
shares of Series B Preferred Stock could have been converted immediately prior
to such transaction or, at the election of each holder of the Series B Pre-
ferred Stock, cash in an amount equal to the amount that would then be payable
to such holder in respect of such Series B Preferred Stock upon liquidation of
the Company.
The certificate of designations establishing the Series B Preferred Stock pro-
vides that it shall rank senior to the Common Stock as to the payment of divi-
dends and the distribution of assets on liquidation, dissolution and winding
up of the Company and, unless otherwise approved by holders of at least two-
thirds of the outstanding shares of Series B Preferred Stock, senior to all
other series of Preferred Stock (including the Preferred Stock offered hereby)
as to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up.
SECTION 203 OF THE DELAWARE LAW
The Company is subject to Section 203 of the Delaware General Corporation Law
(the "DGCL"). Generally, Section 203 prohibits a publicly held Delaware corpo-
ration from engaging in a "business combination" with an "interested stock-
holder" for a period of three years following the time that such stockholder
became an interested stockholder, unless (i) prior to such time either the
business combination or the transaction which resulted in the stockholder be-
coming an interested stockholder is approved by the board of directors of the
corporation, (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder
owns at least 85 percent of the voting stock of the corporation outstanding at
the time the transaction commenced, excluding for purposes of determining the
number of shares outstanding those shares owned by (A) persons who are both
directors and officers and (B) employee stock plans in which employee partici-
pants do not have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer, or (iii)
on or after such time the business combination is approved by the board of di-
rectors and authorized at an annual or special meeting of stockholders, and
not by written consent, by the affirmative vote of at least 66 2/3 percent of
the outstanding voting stock which is not owned by the interested stockholder.
A "business combination" includes certain mergers or consolidations with an
interested stockholder, certain asset sales and transfers to an interested
stockholder, certain issuances of capital stock to an interested stockholder
and certain other transactions resulting in financial benefit to an interested
stockholder. An
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"interested stockholder" is, in general, a person who, together with "affili-
ates" and "associates" (as defined), owns 15% or more of the corporation's
outstanding voting stock or is an affiliate or associate of the corporation
and was the owner of 15% or more of the corporation's outstanding voting stock
at any time during the prior three years, subject to certain exceptions. Al-
though a corporation's certificate of incorporation may exclude such corpora-
tion from the restrictions imposed by Section 203, the Amended Certificate of
Incorporation does not exclude the Company from those restrictions. According-
ly, Section 203 could make it more difficult for a third party to gain control
of the Company and could have the effect of delaying or preventing a merger,
tender offer, or other attempted takeover of the Company, and therefore may
discourage attempts to acquire the Company.
CERTAIN PROVISIONS OF THE AMENDED CERTIFICATE OF INCORPORATION AND BY-LAWS
Several provisions of the Company's Amended Certificate of Incorporation and
By-laws may have the effect of deterring a takeover of the Company. These pro-
visions include: (i) certain advance notice and content requirements for busi-
ness to be brought before the annual stockholders' meeting by a stockholder or
for nomination by any stockholder of persons for election to the Board of Di-
rectors; (ii) a requirement that stockholder action taken without a meeting be
by the affirmative vote of at least 80% of the voting power of the stockhold-
ers entitled to vote thereon; (iii) a requirement for the written request of
stockholders holding at least a majority of the voting power of all stockhold-
ers to call a special meeting of the stockholders; and (iv) the classification
of Company's Board of Directors into three classes serving staggered three-
year terms and the prohibition of any amendment, change or repeal of this
structure without the favorable vote, at a stockholders meeting, of at least
80% of the then outstanding shares of the Company's capital stock entitled to
vote. In addition, the approval of the holders of at least two-thirds of the
outstanding shares of Series B Preferred Stock is required, under certain cir-
cumstances, for a consolidation or merger of the Company or the sale or other
transfer of certain assets by the Company. See "--Preferred Stock--Series B
Preferred Stock" above.
The foregoing provisions could make it more difficult for a third party to
gain control of the Company, and could have the effect of delaying or prevent-
ing a merger, tender offer or other attempted takeover of the Company.
DESCRIPTION OF TRUST PREFERRED SECURITIES
The Trust may issue only one series of Trust Preferred Securities which shall
have terms described in the Prospectus Supplement relating thereto. The Decla-
ration of the Trust will authorize the Regular Trustees to issue on behalf of
the Trust one series of Trust Preferred Securities. The Declaration will be
qualified as an indenture under the Trust Indenture Act. The form of Declara-
tion has been or will be filed or incorporated by reference as an exhibit to
the Registration Statement. The terms of the Declaration will be those set
forth in the Declaration and those made part of the Declaration by the Trust
Indenture Act. The summary of certain provisions of the Trust Preferred Secu-
rities and the Declaration set forth below and in any Prospectus Supplement do
not purport to be complete and are subject to and are qualified in their en-
tirety by reference to all of the provisions of the Declaration and the Trust
Securities, which provisions (including defined terms) are incorporated herein
by reference.
The following description of the Trust Preferred Securities and the Declara-
tion sets forth certain general terms and provisions of the Trust Preferred
Securities and the Declaration to which any Prospectus Supplement may relate.
Certain other specific terms of the Trust Preferred Securities and the Decla-
ration will be described in the applicable Prospectus Supplement. To the ex-
tent that any particular terms of any Trust Preferred Securities or the Decla-
ration described in a Prospectus Supplement differ from any of the terms de-
scribed herein, then such terms described herein shall be deemed to have been
superseded by such Prospectus Supplement.
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<PAGE>
The Trust Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation, conversion rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the Declaration or made part of the Declaration by the Trust Indenture Act,
and which will generally mirror the terms of the Subordinated Debt Securities
held by the Trust and described in the Prospectus Supplement related thereto.
Reference is made to the Prospectus Supplement relating to the Trust Preferred
Securities for specific terms, including (i) the designation of such Trust
Preferred Securities; (ii) the number of Trust Preferred Securities; (iii) the
annual distribution rate (or method of determining such rate) for the Trust
Preferred Securities and the date or dates upon which such distributions shall
be payable; (iv) whether distributions on the Trust Preferred Securities shall
be cumulative, and, in the case of Trust Preferred Securities having such cu-
mulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on the Trust Preferred Securities shall
be cumulative; (v) the amount or amounts which shall be paid out of the assets
of the Trust to the holders of the Trust Preferred Securities upon voluntary
or involuntary dissolution, winding-up or termination of the Trust; (vi) the
right or obligation, if any, of the Trust to purchase or redeem the Trust Pre-
ferred Securities and the price or prices at which, the period or periods
within which, and the terms and conditions upon which, the Trust Preferred Se-
curities shall or may be purchased or redeemed, in whole or in part, pursuant
to such obligation; (vii) the voting rights, if any, of the Trust Preferred
Securities in addition to those required by law, including the number of votes
per Trust Preferred Security and any requirement for the approval by the hold-
ers of the Trust Preferred Securities, as a condition to specified action or
amendments to the Declaration; (viii) the terms and conditions, if any, upon
which the Trust Preferred Securities may be converted into or exchanged for
shares of Common Stock or other Securities, including the conversion price per
share or conversion rate and the circumstances, if any, under which any such
conversion right shall expire; (ix) the terms and conditions, if any, upon
which the Subordinated Debt Securities may be distributed to holders of the
Trust Preferred Securities; (x) if applicable, any securities exchange upon
which the Trust Preferred Securities shall be listed; and (xi) any other rele-
vant rights, preferences, privileges, limitations or restrictions of the Trust
Preferred Securities. All Trust Preferred Securities offered hereby will be
guaranteed by the Company to the extent set forth below under "Description of
Trust Preferred Securities Guarantee." Certain United States federal income
tax considerations applicable to any offering of Trust Preferred Securities
will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Trust Preferred Securities, the Trust will
issue one series of Trust Common Securities. The Declaration will authorize
the Regular Trustees to issue on behalf of the Trust one series of Trust Com-
mon Securities having such terms including distributions, redemption, voting
and liquidation rights or such restrictions as shall be set forth therein. The
terms of the Trust Common Securities will be substantially identical to the
terms of the Trust Preferred Securities, and the Trust Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Trust
Preferred Securities except that, upon an event of default under the Declara-
tion, the rights of the holders of the Trust Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and other-
wise will be subordinated to the rights of the holders of the Trust Preferred
Securities. Except in certain limited circumstances, the Trust Common Securi-
ties will also carry the right to vote to appoint, remove or replace any of
the Trustees. All of the Trust Common Securities will be directly or indi-
rectly owned by the Company.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an event of default under the Declaration occurs and is continuing, then
the holders of the Trust Preferred Securities would rely on the enforcement by
the Property Trustee of its rights as a holder of the Subordinated Debt Secu-
rities against the Company. In addition, the holders of a majority in liquida-
tion amount of the Trust Preferred Securities will have the right to direct
the time, method and place of conducting any proceeding for any remedy avail-
able to the Property Trustee or to direct the exercise of any trust or power
conferred upon the Property Trustee under the Declaration, including the right
to
37
<PAGE>
direct the Property Trustee to exercise the remedies available to it as a
holder of the Subordinated Debt Securities. If the Property Trustee fails to
enforce its rights under such Subordinated Debt Securities, a holder of the
Trust Preferred Securities, to the fullest extent permitted by law, may insti-
tute a legal proceeding directly against the Company to enforce the Property
Trustee's rights under such Subordinated Debt Securities without first insti-
tuting any legal proceeding against the Property Trustee or any other person
or entity. Notwithstanding the foregoing, if an event of default under the
Declaration has occurred and is continuing and such event is attributable to
the failure of the Company to pay the principal of or premium or interest, if
any, on such Subordinated Debt Securities on the date such principal, premium
or interest, as the case may be, is otherwise payable (or in the case of re-
demption, on the redemption date), then a holder of the Trust Preferred Secu-
rities may directly institute a proceeding for enforcement of payment to such
holder of the principal, premium or interest, as the case may be, on such Sub-
ordinated Debt Securities having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in the Subordinated
Debt Securities. In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of the Trust Preferred Securities un-
der the Declaration to the extent of any payment made by the Company to such
holder of Trust Preferred Securities in such Direct Action.
DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Trust Preferred Se-
curities Guarantee which will be executed and delivered by the Company for the
benefit of the holders from time to time of Trust Preferred Securities. The
Trust Preferred Securities Guarantee will be qualified as an indenture under
the Trust Indenture Act. A trustee whose name will be set forth in the appli-
cable Prospectus Supplement will act as the trustee under the Trust Preferred
Securities Guarantee (the "Preferred Guarantee Trustee") for purposes of the
Trust Indenture Act. The form of Trust Preferred Securities Guarantee has been
or will be filed or incorporated by reference as an exhibit to the Registra-
tion Statement. The terms of the Trust Preferred Securities Guarantee will be
those set forth in the Trust Preferred Securities Guarantee and those made
part of the Trust Preferred Securities Guarantee by the Trust Indenture Act.
The summary of certain provisions of the Trust Preferred Securities Guarantee
set forth below and in any Prospectus Supplement does not purport to be com-
plete and is subject to and qualified in its entirety by reference to all of
the provisions of the Trust Preferred Securities Guarantee, which provisions
of the Trust Preferred Securities Guarantee (including defined terms) are in-
corporated herein by reference. The Trust Preferred Securities Guarantee will
be held by the Preferred Guarantee Trustee for the benefit of the holders of
the Trust Preferred Securities.
The following description of the Trust Preferred Securities Guarantee sets
forth certain general terms and provisions of the Trust Preferred Securities
Guarantee to which any Prospectus Supplement may relate. Certain other spe-
cific terms of the Trust Preferred Securities Guarantee will be described in
the applicable Prospectus Supplement. To the extent that any particular terms
of the Trust Preferred Securities Guarantee described in a Prospectus Supple-
ment differ from any of the terms described herein, then such terms described
herein shall be deemed to have been superseded by such Prospectus Supplement.
GENERAL
Pursuant to the Trust Preferred Securities Guarantee, the Company will agree,
to the extent set forth therein, to pay in full, to the holders of the Trust
Preferred Securities, the Guarantee Payments (as defined herein) (except to
the extent paid by the Trust), as and when due, regardless of any defense,
right of setoff or counterclaim which the Trust may have or assert. The fol-
lowing payments with respect to the Trust Preferred Securities to the extent
not paid by the Trust (the "Guarantee Payments"), will be subject to the Trust
Preferred Securities Guarantee thereof (without duplication): (i) any accrued
and
38
<PAGE>
unpaid distributions which are required to be paid on such Trust Preferred Se-
curities, to the extent the Trust shall have funds available therefor; (ii)
the redemption price (if any) set forth in the applicable Prospectus Supple-
ment (the "Redemption Price"), which will not be lower than the liquidation
amount, and all accrued and unpaid distributions, to the extent the Trust has
funds available therefor, with respect to any Trust Preferred Securities
called for redemption by the Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Debt Securities to the holders of Trust
Preferred Securities or the conversion or redemption of all of the Trust Pre-
ferred Securities), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on the Trust Preferred Securities to
the date of payment, to the extent the Trust has funds available therefor, and
(b) the amount of assets of the Trust remaining available for distribution to
holders of the Trust Preferred Securities in liquidation of the Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of Trust Pre-
ferred Securities or by causing the Trust to pay such amounts to such holders.
The Trust Preferred Securities Guarantee will not apply to any payment of dis-
tributions on the Trust Preferred Securities except to the extent the Trust
shall have funds available therefor. If the Company does not make interest
payments on the Subordinated Debt Securities purchased by the Trust, the Trust
will not pay distributions on the Trust Preferred Securities issued by the
Trust and will not have funds available therefor. The Trust Preferred Securi-
ties Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Subordinated Indenture and the Declaration,
including its obligations to pay certain costs, expenses, debts and liabili-
ties of the Trust (other than with respect to the Trust Securities), will pro-
vide a full and unconditional guarantee on a subordinated basis by the Company
of payments due on the Trust Preferred Securities.
The Company has also agreed separately to guarantee the obligations of the
Trust with respect to the Trust Common Securities (the "Trust Common Securi-
ties Guarantee") to the same extent as the Trust Preferred Securities Guaran-
tee, except that upon an event of default under the Subordinated Indenture,
holders of Trust Preferred Securities shall have priority over holders of
Trust Common Securities with respect to distributions and payments on liquida-
tion, redemption or otherwise.
Certain covenants of the Company to be set forth in the Trust Preferred Secu-
rities Guarantee will be described in the applicable Prospectus Supplement.
MODIFICATION OF THE TRUST PREFERRED SECURITIES GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of Trust Preferred Securities (in which case no vote
will be required), the Trust Preferred Securities Guarantee may be amended
only with the prior approval of the holders of not less than a majority in
liquidation amount of the outstanding Trust Preferred Securities. The manner
of obtaining any such approval of holders of such Trust Preferred Securities
will be as set forth in an accompanying Prospectus Supplement. All guarantees
and agreements contained in the Trust Preferred Securities Guarantee shall
bind the successors, assigns, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Trust Preferred
Securities then outstanding.
TERMINATION
The Trust Preferred Securities Guarantee will terminate (a) upon full payment
of the Redemption Price of all Trust Preferred Securities, (b) upon distribu-
tion of the Subordinated Debt Securities held by the Trust to the holders of
the Trust Preferred Securities or the conversion or redemption, if applicable,
of all of the Trust Preferred Securities or (c) upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Trust. The Trust Preferred Securities Guarantee will continue to
39
<PAGE>
be effective or will be reinstated, as the case may be, if at any time any
holder of Trust Preferred Securities must restore payment of any sums paid un-
der the Trust Preferred Securities or the Trust Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under the Trust Preferred Securities Guarantee will occur
upon (a) the failure of the Company to perform any of its payment or other ob-
ligations thereunder or (b) if applicable, the failure by the Company to de-
liver Common Stock or other applicable securities upon an appropriate election
by the holder or holders of Trust Preferred Securities to convert the Trust
Preferred Securities into shares of Common Stock or other applicable securi-
ties, as the case may be.
The holders of a majority in liquidation amount of the Trust Preferred Securi-
ties have the right to direct the time, method and place of conducting any pro-
ceeding for any remedy available to the Preferred Guarantee Trustee in respect
of the Trust Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under such Trust
Preferred Securities. If the Preferred Guarantee Trustee fails to enforce such
Trust Preferred Securities Guarantee, any holder of Trust Preferred Securities
may institute a legal proceeding directly against the Company to enforce the
Preferred Guarantee Trustee's rights under such Trust Preferred Securities
Guarantee, without first instituting a legal proceeding against the Trust, the
Preferred Guarantee Trustee or any other person or entity. The Company will
waive any right or remedy to require that any action be brought first against
the Trust or any other person or entity before proceeding directly against the
Company.
STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEE
The Trust Preferred Securities Guarantee will constitute an unsecured obliga-
tion of the Company and will rank (i) subordinate and junior in right of pay-
ment to all other liabilities of the Company, (ii) pari passu in right of pay-
ment with the most senior preferred or preference stock now or hereafter issued
by the Company, if any, and with any guarantee now or hereafter entered into by
the Company in respect of any preferred or preference stock of any affiliate of
the Company and (iii) senior to Common Stock. The terms of the Trust Preferred
Securities provide that each holder of Trust Preferred Securities by acceptance
thereof agrees to the subordination provisions and other terms of the Trust
Preferred Securities Guarantee relating thereto.
The Trust Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal pro-
ceeding directly against the guarantor to enforce its rights under the guaran-
tee without instituting a legal proceeding against any other person or entity).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default with re-
spect to the Trust Preferred Securities Guarantee, undertakes to perform only
such duties as are specifically set forth in such Trust Preferred Securities
Guarantee and, after default, shall exercise the same degree of care as a pru-
dent individual would exercise in the conduct of his or her own affairs. Sub-
ject to such provisions, the Preferred Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by a Trust Preferred Securities
Guarantee at the request of any holder of the Trust Preferred Securities, un-
less offered reasonable indemnity against the costs, expenses and liabilities
which might be incurred thereby.
40
<PAGE>
PLAN OF DISTRIBUTION
The Company, or the Trust, as the case may be, may sell Securities to one or
more underwriters for public offering and sale by them or may sell Securities
through agents which solicit or receive offers on behalf of the Company or the
Trust, as the case may be, or through dealers or through a combination of any
such methods of sale, and the Company may also sell Securities directly to in-
vestors. Any such underwriter or agent involved in the offer and sale of Secu-
rities will be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or prices,
which may be changed, or from time to time at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at negoti-
ated prices. The Company or the Trust, as the case may be, may, from time to
time, authorize agents acting on a best or reasonable efforts basis to solicit
or receive offers to purchase the Securities upon the terms and conditions as
are set forth in the applicable Prospectus Supplement. In connection with the
sale of Securities, underwriters or agents may be deemed to have received com-
pensation from the Company or the Trust, as the case may be, in the form of
underwriting discounts or commissions or other underwriting compensation and
may also receive commissions from purchasers of Securities for whom they may
act as agents. Underwriters may sell Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any compensation paid by the Company or the Trust to underwriters or agents in
connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set
forth in the applicable Prospectus Supplement. Underwriters, dealers and
agents participating in a distribution of the Securities (including agents
only soliciting or receiving offers to purchase Securities on behalf of the
Company or the Trust) may be deemed to be underwriters, and any discounts,
commissions or other underwriting compensation received by them and any profit
realized by them on resale of Securities may be deemed to be underwriting dis-
counts and commissions.
Under agreements which may be entered into by the Company or the Trust, as the
case may be, underwriters, dealers and agents who participate in the distribu-
tion of Securities may be entitled to indemnification against certain liabili-
ties, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company may au-
thorize underwriters or other persons acting as the Company's agents to so-
licit offers by certain institutions to purchase Securities from the Company
pursuant to contracts providing for payment and delivery on a future date. In-
stitutions with which such contracts may be made include commercial and sav-
ings banks, insurance companies, pension funds, investment companies, educa-
tional and charitable institutions and others, but in all cases such institu-
tions must be approved by the Company. The obligations of any institutional
purchaser under any such contract will not be subject to any conditions except
(i) the purchase by such institution of the Securities covered by such con-
tract shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such institution is subject, and (ii) if such Securities
are being sold to underwriters, the Company shall have sold to such underwrit-
ers the total principal amount of such Securities less the principal amount
thereof covered by delayed delivery contracts.
Certain of the underwriters, dealers or agents and their affiliates may engage
in transactions with and perform services for the Company in the ordinary
course of business.
41
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the offering made hereby will be
passed upon for the Company by Eberhard G.H. Schmoller, Senior Vice President,
General Counsel and Secretary of the Company, and by Brown & Wood llp, San
Francisco, California. As of March 31, 1997, Mr. Schmoller owned approximately
4,391 shares of Common Stock, held options to acquire approximately 185,033 ad-
ditional shares of Common Stock, and beneficially owned approximately 99.84
shares of Series B Preferred Stock, which, on such date, were convertible into
approximately 470 shares of Common Stock. The validity of the Trust Preferred
Securities will be passed upon for the Company and the Trust by Richards, Lay-
ton & Finger, Wilmington, Delaware.
EXPERTS
The audited consolidated financial statements and schedule incorporated by ref-
erence 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 and therein by
reference in reliance upon the authority of said firm as experts in giving said
reports.
42
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses (all of which will be paid by the
Company) to be incurred in connection with the registration and sale of the
Securities:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee................... $ 45,207
Blue Sky fees and expenses...................................... 5,000
Rating agency fees..............................................
Legal fees and expenses......................................... 250,000
Accounting fees and expenses.................................... 30,000
Trustees' fees and expenses..................................... 10,000
Printing and engraving.......................................... 40,000
Miscellaneous...................................................
--------
Total......................................................... $
========
</TABLE>
All of the above amounts, other than the Securities and Exchange Commission
filing fee, are estimates. Such filing fee was previously paid in connection
with certain prior registration statements to which this Registration State-
ment constitutes a post-effective amendment.
ITEM 15. 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 eliminates to the
fullest extent permitted by Delaware law the personal liability of its direc-
tors to the Company or its stockholders for monetary damages for any breach of
fiduciary duty as a director.
The Company's Bylaws 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 en-
terprise, serving as such at the request of the Company, shall be indemnified
and held harmless by the Company to the fullest extent permitted by 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 au-
thorized by the Board of Directors of the Company. When indemnification is au-
thorized by the Company's Bylaws, the director, officer, employee or agent
shall be indemnified for expenses, liabilities and losses (including attor-
neys' 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 Bylaws also provide that expenses incurred by an of-
ficer or director (acting in his or her capacity as such) in defending a pro-
ceeding 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 direc-
tor 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 Bylaws also pro-
vide that in other circumstances, expenses may be advanced upon such terms and
conditions as the Board of Directors deems appropriate.
The Company's Bylaws further provide that the right to indemnification granted
thereunder shall be a contract right for the benefit of the Company's direc-
tors, officers, employees and agents. The Company's Bylaws also authorize ac-
tions against the Company to enforce the indemnification rights provided by
the
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<PAGE>
Bylaws, 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 permissi-
ble 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 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 ex-
penses (including attorneys' fees) in the defense or settlement of a deriva-
tive action, provided there is a determination by a majority vote of a quorum
of disinterested directors, a committee of directors, independent legal coun-
sel, 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 op-
posed 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 unlaw-
ful. 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 of the DGCL also permits indemnifi-
cation of expenses which the court deems proper and provides that indemnifica-
tion 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 by-
law, agreement or otherwise.
The Company's Bylaws also authorize the Company to purchase and maintain in-
surance 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 in-
curred by or asserted against such persons, whether or not the Company would
have the power to indemnify any such person against such liability, expense or
loss under applicable law or the Company's Bylaws. The Company presently main-
tains a directors' and officers' liability insurance policy which insures di-
rectors and officers of the Company and those of certain of its subsidiaries.
Reference is made to the form of Underwriting Agreement included or incorpo-
rated by reference or to be included or incorporated by reference herein as an
exhibit to the Registration Statement for provisions regarding indemnification
of the Company's officers, directors and controlling persons against certain
liabilities.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1(a) Form of Underwriting Agreement Basic Provisions for Debt Securities(d)
Form of Underwriting Agreement for the other Securities registered
1(b) hereby(a)
4(a) Certificate of Incorporation of the Company(b)
4(b) By-Laws of the Company, as amended(e)
4(c) Amendment to Certificate of Incorporation(e)
4(d) Form of Senior Indenture(d)
4(e) Form of Subordinated Indenture(d)
4(f) Form of Common Stock Warrant Agreement(a)
4(g) Form of Certificate of Designations for Preferred Stock(a)
4(h) Form of Senior Debt Security(d)
4(i) Form of Subordinated Debt Security(d)
4(j) Form of Deposit Agreement including form of Depositary Receipt(a)
</TABLE>
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<PAGE>
<TABLE>
<C> <S>
4(k) Declaration of Trust of the Trust(a)
4(l) Form of Amended and Restated Declaration of Trust of the Trust,
including form of Trust Preferred Security(a)
Form of Guarantee Agreement with respect to Trust Preferred
4(m) Securities(a)
5(a) Opinion of Brown & Wood LLP as to the validity of the Securities other
than the Trust Preferred Securities(a)
Opinion of Richards, Layton & Finger as to the validity of the Trust
5(b) Preferred Securities(a)
12(a) Computation of Ratio of Earnings to Fixed Charges(e)
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred
12(b) Stock Dividends(e)
23(a) Consent of Independent Public Accountants(e)
23(b) Consent of Brown & Wood LLP (included in Exhibit 5(a))
23(c) Consent of Richards, Layton & Finger (included in Exhibit 5(b))
Power of Attorney of certain officers and directors (included as part of
24 the signature pages hereof)
25(a) Form T-1 Statement of Eligibility of the Senior Trustee (to be filed or
incorporated by reference in connection with a particular offering of
securities)
25(b) Form T-1 Statement of Eligibility of the Subordinated Trustee (to be
filed or incorporated by reference in connection with a particular
offering of securities)
25(c) Form T-1 Statement of Eligibility of trustee with respect to the Amended
and Restated Declaration of Trust of the Trust (to be filed or
incorporated by reference in connection with a particular offering of
securities)
25(d) Form T-1 Statement of Eligibility of trustee with respect to the
Preferred Securities Guarantee (to be filed or incorporated by reference
in connection with a particular offering of securities)
</TABLE>
- --------
(a) To be filed by amendment or as an exhibit to a document to be incorporated
or deemed to be incorporated by reference in the Registration Statement.
(b) Incorporated herein by reference from the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1987.
(c) Incorporated herein by reference from the Company's Report on Form 8-A
dated October 27, 1986.
(d) Incorporated by reference from the Company's Registration Statement on Form
S-3 (no. 33-60619).
(e) Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement: (i) to include any prospec-
tus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect
in the prospectus any acts or events arising after the effective date of this
registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in this registration statement; (iii) to include any ma-
terial information with respect to the plan of distribution not previously dis-
closed in this registration statement or any material change to such informa-
tion in this registration statement; provided, however, that subparagraphs
(i) and (ii) do not apply if the information required to be included in a post-
effective amendment by those subparagraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the Securi-
ties Exchange Act of 1934 that are incorporated by reference in this registra-
tion statement. Notwithstanding the foregoing, any increase or
II-3
<PAGE>
decrease in volume of securities offered (if the total dollar value of securi-
ties offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) under
the Securities Act of 1933 if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby further undertakes that for the purpose of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
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.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant, pursuant to the provisions described under Item 15 or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and regula-
tions prescribed by the Commission under Section 305(b)(2) of the Trust Inden-
ture Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant cer-
tifies that it has reasonable grounds to believe that it meets all of the re-
quirements for filing on Form S-3 and has duly caused this registration state-
ment to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Palo Alto, State of California, on May 6, 1997.
CNF Transportation Inc.
/s/ Eberhard G.H. Schmoller
By: _________________________________
Eberhard G.H. Schmoller
Senior Vice President,
General Counsel and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature to this Regis-
tration Statement appears below hereby constitutes and appoints Gregory L.
Quesnel, Eberhard G.H. Schmoller and R. Guy Kraines, or any one or more of
them, as such person's true and lawful attorney-in-fact and agent with full
power of substitution for such person and in such person's name, place and
stead, in any and all capacities, to sign and to file with the Securities and
Exchange Commission any and all amendments and post-effective amendments to
this Registration Statement, with exhibits thereto, any registration statement
filed pursuant to Rule 462(b) promulgated under the Securities Act of 1933 and
other documents filed in connection with such filings, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the prem-
ises, as fully to all intents and purposes as such person might or could do in
person, hereby ratifying and confirming all that each said attorney-in-fact and
agent, or any substitute therefor, may lawfully do or cause to be done by vir-
tue thereof.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
on May 6, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ Donald E. Moffitt Chairman of the Board, President and
____________________________________ Chief Executive Officer (Principal
Donald E. Moffitt Executive Officer)
/s/ Gregory L. Quesnel Executive Vice President and Chief
____________________________________ Financial Officer (Principal Financial
Gregory L. Quesnel and Principal Accounting Officer)
/s/ Robert Alpert Director
____________________________________
Robert Alpert
/s/ Earl F. Cheit Director
____________________________________
Earl F. Cheit
/s/ Richard A. Clarke Director
____________________________________
Richard A. Clarke
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ Margaret G. Gill
____________________________________ Director
Margaret G. Gill
/s/ Robert Jaunich II
____________________________________ Director
Robert Jaunich II
/s/ W. Keith Kennedy, Jr.
____________________________________ Director
W. Keith Kennedy, Jr.
____________________________________ Director
Richard B. Madden
/s/ Michael J. Murray
____________________________________ Director
Michael J. Murray
/s/ Robert D. Rogers
____________________________________ Director
Robert D. Rogers
/s/ William J. Schroeder
____________________________________ Director
William J. Schroeder
/s/ Robert P. Wayman
____________________________________ Director
Robert P. Wayman
</TABLE>
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, CNF Trust I certi-
fies that it has reasonable grounds to believe that it meets all the require-
ments for filing on Form S-3 and 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 May 6, 1997.
CNF Trust I
By:CNF Transportation Inc.,
as Sponsor
/s/ Eberhard G.H. Schmoller
By: _________________________________
Eberhard G.H. Schmoller
Senior Vice President,
General Counsel and Secretary
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1(a) Form of Underwriting Agreement Basic Provisions for Debt
Securities(d)
1(b) Form of Underwriting Agreement for the other Securities
registered hereby(a)
4(a) Certificate of Incorporation of the Company(b)
4(b) By-Laws of the Company, as amended(e)
4(c) Amendment to Certificate of Incorporation(e)
4(d) Form of Senior Indenture(d)
4(e) Form of Subordinated Indenture(d)
4(f) Form of Common Stock Warrant Agreement(a)
4(g) Form of Certificate of Designations for Preferred Stock(a)
4(h) Form of Senior Debt Security(d)
4(i) Form of Subordinated Debt Security(d)
4(j) Form of Deposit Agreement including form of Depositary
Receipt(a)
4(k) Declaration of Trust of the Trust(a)
4(l) Form of Amended and Restated Declaration of Trust of the Trust,
including form of Trust Preferred Security(a)
4(m) Form of Guarantee Agreement with respect to Trust Preferred
Securities(a)
5(a) Opinion of Brown & Wood LLP as to the validity of the Securities
other than the Trust Preferred Securities(a)
5(b) Opinion of Richards, Layton & Finger as to the validity of the
Trust Preferred Securities(a)
12(a) Computation of Ratio of Earnings to Fixed Charges(e)
12(b) Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends(e)
23(a) Consent of Independent Public Accountants(e)
23(b) Consent of Brown & Wood LLP (included in Exhibit 5(a))
23(c) Consent of Richards, Layton & Finger (included in Exhibit 5(b))
24 Power of Attorney of certain officers and directors (included as
part of the signature pages hereof)
25(a) Form T-1 Statement of Eligibility of the Senior Trustee (to be
filed or incorporated by reference in connection with a
particular offering of securities)
25(b) Form T-1 Statement of Eligibility of the Subordinated Trustee
(to be filed or incorporated by reference in connection with a
particular offering of securities)
25(c) Form T-1 Statement of Eligibility of trustee with respect to the
Amended and Restated Declaration of Trust of the Trust (to be
filed or incorporated by reference in connection with a
particular offering of securities)
25(d) Form T-1 Statement of Eligibility of trustee with respect to the
Preferred Securities Guarantee (to be filed or incorporated by
reference in connection with a particular offering of
securities)
</TABLE>
- --------
(a) To be filed by amendment or as an exhibit to a document to be incorporated
or deemed to be incorporated by reference in the Registration Statement.
(b) Incorporated herein by reference from the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1987.
(c) Incorporated herein by reference from the Company's Report on Form 8-A
dated October 27, 1986.
(d) Incorporated by reference from the Company's Registration Statement on Form
S-3 (no. 33-60619).
(e) Filed herewith.
<PAGE>
EXHIBIT 4(b)
CNF TRANSPORTATION INC.
BYLAWS
As Amended May 3, 1997
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office of the Corporation in
the State of Delaware shall be in the City of Wilmington, County of New Castle.
SECTION 2. Other Offices. The Corporation shall also have and maintain a
principal office or place of business at such place as may be fixed by the Board
of Directors, and may also have other offices at such other places both within
and without the State of Delaware as the Board of Directors may from time to
time determine or as the business of the Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
SECTION 1. Place of Meetings. Meetings of the stockholders of the
Corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors or,
if not so designated, then at the principal office of the Corporation.
SECTION 2. Annual Meetings. The annual meetings of the stockholders of the
Corporation for the purpose of election of directors and for such other business
as may lawfully come before the meetings shall be held on a date and at a time
designated from time to time by the Board of Directors, or, if not so
designated, then at 10:00 a.m. on the last Monday in April in each year, if not
a legal holiday, or, if a legal holiday at the same hour and place on the next
succeeding day not a holiday. No business may be transacted at an annual meeting
of stockholders, other than business that is either (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors (or any duly authorized committee thereof), (b) otherwise properly
brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any stockholder of the Corporation (i) who
is a stockholder of record on the date of the giving of the notice provided for
in this Section 2 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (ii) who complies with the notice
procedures set forth in this Section 2.
<PAGE>
In addition to any other applicable requirement, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the stockholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
notice of the date of the annual meeting was mailed or public disclosure of the
date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before this
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such stockholder, (iii) the
class or series and number of shares of capital stock of the Corporation which
are owned beneficially or of record by such stockholder, (iv) a description of
all arrangements or understandings between such stockholder and any other person
or persons (including their names) in connection with the proposal of such
business by such stockholder and any material interest of such stockholder in
business and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.
Notwithstanding anything in the Bylaws to the contrary, no business shall
be conducted at the annual meeting except in accordance with the procedures set
forth in this Section 2.
The Chairman of an annual meeting shall, if the facts warrant, determine
and declare to the meeting that business was not properly brought before the
meeting in accordance with the provisions of this Section 2, and if he should so
determine, he shall so declare to the meeting and any such business shall not be
transacted.
SECTION 3. Special Meetings. Special meetings of the stockholders of the
Corporation may be called, for any purpose or purposes, by the Chief Executive
Officer or the Board of Directors at any time. Upon written request of any
stockholder or stockholders holding in the aggregate a majority of the voting
power of all stockholders, the Secretary shall call a special meeting of
stockholders to be held at a place in San Francisco, California specified in the
request for call, at such time as the Secretary may fix, such meeting to be held
not less than ten nor more than 60 days after the receipt of the request, and if
the Secretary shall neglect or refuse to call the meeting, the stockholder or
stockholders making the request may do so.
2
<PAGE>
SECTION 4. Notice of Meetings. Except as otherwise provided by law or the
Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten nor more than 50 days before the date of the
meeting to each stockholder entitled to vote thereat, directed to his address as
it appears upon the books of the Corporation; said notice to specify the place,
date and hour and purpose or purposes of the meeting. When a meeting is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken unless the adjournment is for more than thirty days, or
unless after the adjournment a new record date is fixed for the adjourned
meeting, in which event a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. Notice of the time, place
and purpose of any meeting of stockholders may be waived in writing, either
before or after such meeting, and will be waived by any stockholder by his
attendance thereat in person or by proxy. Any stockholder so waiving notice of
such meeting shall be bound by the proceedings of any such meeting in all
respects as if due notice thereof had been given.
SECTION 5. Quorum. At all meetings of stockholders, except where otherwise
provided by statute or by the Certificate of Incorporation, or by the Bylaws,
the presence, in person or by proxy duly authorized, of the holders of a
majority of the outstanding shares of stock entitled to vote shall constitute a
quorum for the transaction of business. Shares, the voting of which at said
meeting has been enjoined, or which for any reason cannot be lawfully voted at
such meeting shall not be counted to determine a quorum at said meeting. In the
absence of a quorum any meeting of stockholders may be adjourned, from time to
time, by vote of the holders of a majority of the shares represented thereat,
but no other business shall be transacted at such meeting. At such adjourned
meeting at which a quorum is present or represented any business may be
transacted which might have been transacted at the original meeting. The
stockholders present at a duly called or convened meeting, at which a quorum is
present, may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum. Except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws, all
action taken by the holders of a majority of the voting power represented at any
meeting at which a quorum is present shall be valid and binding upon the
Corporation.
SECTION 6. Voting Rights. Except as otherwise provided by law, only persons
in whose names shares entitled to vote stand on the stock records of the
Corporation on the record date for determining the stockholders entitled to vote
at said meeting shall be entitled to vote at such meeting. Shares standing in
the names of two or more persons shall be voted or represented in accordance
with the determination of the majority of such persons, or, if only one of such
persons is present in person or represented by proxy, such person shall have the
right to vote such shares and such shares shall be deemed to be represented for
the purpose of determining a quorum. Every person entitled to vote or execute
consents shall have the right to do so either in person or by an agent or agents
authorized by a written proxy executed by such person or his duly authorized
agent, which proxy shall be filed with the Secretary of the Corporation at or
before the meeting at which it is to be used. Said proxy so
3
<PAGE>
appointed need not be a stockholder. No proxy shall be voted on after three
years from its date unless the proxy provides for a longer period.
SECTION 7. List of Stockholders. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten (10) days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at said meeting, arranged in alphabetical order, showing the address of and
the number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to the meeting, either at a place within the city where the meeting is to
be held and which place shall be specified in the notice of the meeting, or, if
not specified, at the place where said meeting is to be held, and the list shall
be produced and kept at the time and place of meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
SECTION 8. Action Without Meeting. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the Certificate of
Incorporation, the meeting and vote of stockholders may be dispensed with: (1)
if all of the stockholders who would have been entitled to vote upon the action
if such meeting were held shall consent in writing to such corporate action
being taken; or (2) if the Certificate of Incorporation authorizes the action to
be taken with the written consent of the holders of less than all of the stock
who would have been entitled to vote upon the action if a meeting were held,
then on the written consent of the stockholders having not less than such
percentage of the number of votes as may be authorized in the Certificate of
Incorporation; provided that in no case shall the written consent be by the
holders of stock having less than the minimum percentage of the vote required by
statute for the proposed corporate action, and provided that prompt notice must
be given to all stockholders of the taking of corporate action without a meeting
and by less than unanimous written consent.
SECTION 9. Rules of Conduct. The Board of Directors of the Company shall be
entitled to make such rules or regulations for the conduct of meetings of
stockholders as it shall deem necessary, appropriate or convenient. Subject to
such rules and regulations of the Board of Directors, if any, the chairman of
the meeting shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or order of
business for the meeting, rules and procedures for maintaining order at the
meeting and the safety of those present, limitations on participation in such
meeting to stockholders of record of the Corporation and their duly authorized
and constituted proxies, and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the commencement
thereof, limitations on the time allotted to questions or comments by
participants and regulation of the opening and closing of the polls for
balloting on matters which are to be voted on by ballot. Unless, and to the
extent, determined by the Board of Directors or the
4
<PAGE>
chairman of the meeting, meetings of shareholders shall not be required to be
held in accordance with rules of parliamentary procedure.
ARTICLE III
DIRECTORS
SECTION 1. Powers. The powers of the Corporation shall be exercised, its
business conducted and its property controlled by the Board of Directors.
SECTION 2. Number, Qualifications and Classification. (a) A majority of the
directors holding office may by resolution increase or decrease the number of
directors, provided, however, that the number thereof shall never be less than
twelve nor greater than fifteen. A director need not be a stockholder. The
directors shall be divided into three classes, designated Class I, Class II and
Class III, as nearly equal in number as the then total number of directors
permits. At the 1985 annual meeting of stockholders, Class I directors shall be
elected for a one-year term, Class II directors for a two-year term and Class
III directors for a three-year term. At each succeeding annual meeting of
stockholders beginning in 1986, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term. If the
number of directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional directors of any class elected to
fill a vacancy resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of that class, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. 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 prior death, resignation, retirement,
disqualification or removal from office. Any vacancy on the Board of Directors,
including any vacancy that results from an increase in the number of directors,
may be filled by a majority of the Board of Directors then in office, although
less than a quorum, or by a sole remaining director. Any director elected to
fill a vacancy shall have the same remaining term as that of his predecessor.
(b) Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the Certificate of Incorporation applicable thereto, and such directors
so elected shall not be divided into classes pursuant to these Bylaws unless
expressly provided by such terms.
(c) Any amendment, change or repeal of this Section 2 of Article III, or
any other amendment to these Bylaws that will have the effect of permitting
circumvention of or modifying this Section 2 of Article III, shall require the
favorable vote, at a stockholders' meeting, of the holders of at least 80% of
the then-outstanding shares of stock of the Corporation entitled to vote.
5
<PAGE>
SECTION 3. Special Elections. If, for any cause, the Board of Directors
shall not have been elected at an annual meeting, it may be elected as soon
thereafter as is convenient at a special meeting of the stockholders called for
that purpose in the manner provided in these Bylaws.
SECTION 4. Vacancies. A vacancy in the Board of Directors shall be deemed
to exist in the case of the death, resignation or removal of any director, or if
the number of directors constituting the whole Board be increased, or if the
stockholders, at any meeting of stockholders at which directors are to be
elected, fail to elect the number of directors then constituting the whole
Board.
SECTION 5. Resignations. Any director may resign at any time by delivering
his written resignation to the Secretary, such resignation to specify whether it
will be effective at a particular time, upon receipt by the Secretary or at the
pleasure of the Board of Directors. If no such specification is made, it shall
be deemed effective at the pleasure of the Board of Directors.
SECTION 6. Meetings. (a) The annual meeting of the Board of Directors shall
be held at such time and place as the Board may determine. No notice of the
annual meeting of the Board of Directors shall be necessary if such meeting is
held immediately after the annual stockholders' meeting and at the place where
such stockholders' meeting is held. If the annual meeting of the Board of
Directors is held on a different date, or at a different time or place, notice
of the date, time and place of such annual meeting of the Board of Directors
shall be furnished to each director in accordance with the procedures of Article
III, Section 6(c) of these Bylaws. The annual meeting of the Board of Directors
shall be held for the purpose of electing officers and transacting such other
business as may lawfully come before it.
(b) Regular meetings of the Board of Directors shall be held at such place
within or without the State of Delaware, and at such times as the Board may from
time to time determine, and if so determined no notice thereof need be given.
(c) Special meetings may be called at any time and place within or without
the State of Delaware upon the call of the Chief Executive Officer or Secretary
or any two directors. Notice of the date, time, place and purposes of each
special meeting, and notice of the date, time and place of each annual and
regular meeting for which notice is required to be given, shall be sent by mail
at least seventy-two hours in advance of the time of the meeting, or by telegram
at least forty-eight hours in advance of the time of the meeting, or by
facsimile at least twenty-four hours in advance of the time of the meeting, to
the address or facsimile number (as applicable) of each director. Notice of any
special meeting may be waived in writing at any time before or after the meeting
and will be waived by any director by attendance thereat.
SECTION 7. Quorum and Voting. (a) A majority of the whole Board of
Directors shall constitute a quorum for all purposes, provided, however, at any
meeting whether a quorum be present or otherwise, a majority of the directors
present may adjourn from time to
6
<PAGE>
time and place to place, within or without the State of Delaware, without notice
other than by announcement at the meeting.
(b) At each meeting of the Board at which a quorum is present all questions
and business shall be determined by a vote of a majority of the directors
present, unless a different vote be required by law or by the Certificate of
Incorporation.
SECTION 8. Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these Bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or of such
committee, as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board or committee.
SECTION 9. Fees and Compensation. Directors shall not receive any stated
salary for their services as directors, but, by resolution of the Board,
compensation in a reasonable amount may be fixed by the Board, including,
without limitation, compensation in the form of an annual retainer, a fee for
each Board or Board Committee meeting attended, reimbursement for expenses of
attendance at any such meeting, or any combination of any of the foregoing.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity as an officer, agent, employee, or
otherwise, and receiving compensation therefor.
SECTION 10. Maximum Age of Directors. Directors who have attained the age
of 72 years shall be ineligible to stand for election or reelection as a
director. Except as may otherwise be determined by the Board of Directors, a
director who has attained the age of 72 years whose term as a director continues
beyond the annual meeting of shareholders next following attainment of 72 years
shall retire and resign as a director at the first directors' meeting following
such annual meeting of shareholders. Unless otherwise determined by the Board of
Directors in accordance with the preceding sentence, for this purpose such
resignation will be automatic and need not meet the requirements for resignation
set forth in Section 5 of this Article III.
SECTION 11. Nominations of Persons for Election to the Board of Directors.
Only persons who are nominated in accordance with the following procedures set
forth in these Bylaws shall be eligible for election as directors of the
Corporation. Nominations of persons for election to the Board of Directors may
be made at any annual meeting of stockholders (a) by or at the direction of the
Board of Directors (or any duly authorized committee thereof) or (b) by any
stockholder of the Corporation (i) who is a stockholder of record on the date of
the giving of the notice provided for in this Section 11 and on the record date
for the determination of stockholders entitled to vote and (II) who complies
with the notice procedures set forth in this Section 11.
7
<PAGE>
In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the stockholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
notice of the date of the annual meeting was mailed or public disclosure of the
date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (b) as to the stockholder giving the
notice (i) the name and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in person or by proxy at
the annual meeting to nominate the persons named in its notice and (v) any other
information relating to such stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder. Such notice
must be accompanied by a written consent of each proposed nominee to be named as
a nominee and to serve as a director if elected. The Corporation may require any
proposed nominee to furnish any other information that may reasonably be
required by the Corporation to determine the qualifications of such proposed
nominee to serve as a director of the Corporation. No person shall be eligible
for election as a director of the Corporation unless nominated in accordance
with the procedures set forth herein. These provisions shall not apply to
nomination of any persons entitled to be separately elected by holders of
Preferred Stock.
The Chairman of the annual meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
foregoing procedures,
8
<PAGE>
and if he should so determine, he shall so declare to the meeting and the
defective nomination shall be disregarded.
ARTICLE IV
OFFICERS AND COMMITTEES
SECTION 1. Officers Designated. The executive officers of the Corporation
shall be chosen by the Board of Directors and shall be the Chairman of the
Board, the President, one or more Vice Presidents, the Secretary, one or more
Assistant Secretaries, the Treasurer, one or more Assistant Treasurers, and such
other executive officers as the Board of Directors from time to time may
designate. The Board of Directors shall designate either the Chairman of the
Board or the President as the Chief Executive Officer of the Corporation. The
officer so designated shall have charge of the actual conduct and operation of
the business of the Corporation, subject to the control and direction of the
Board of Directors. The Chief Executive Officer shall, with the consent of the
Board of Directors, assign such additional titles to Vice Presidents as he shall
deem appropriate and designate the succession of officers to act in his stead in
his absence or disability. He may appoint additional Vice Presidents who shall
not, however, be executive officers. He shall assign all duties not otherwise
specified by these Bylaws to all officers and employees of the Corporation.
SECTION 2. Election, Qualification, Tenure of Office, and Duties of
Executive Officers and Other Officers. (a) At the annual meeting of the Board of
Directors following their election by the stockholders, the directors shall
elect all executive officers of the Corporation. Any one person may hold any
number of offices of the Corporation at any one time unless specifically
prohibited therefrom by law. The Chairman of the Board shall be a director but
no other officer need be a director.
(b) Each executive officer shall hold office from the date of his election
either until the date of his voluntary resignation, or death, or until the next
annual meeting of the Board of Directors and until a successor shall have been
duly elected and qualified, whichever shall first occur; provided that any such
officer may be removed by the Board of Directors whenever in its judgment the
best interest of the Corporation will be served thereby, and the Board may elect
another in the place and stead of the person so removed.
(c) Chairman of the Board: The Chairman of the Board shall preside at all
meetings of the stockholders, of the Board of Directors, and of the Executive
Committee. He shall have the responsibility of keeping the directors informed on
all policy matters, and shall have such other powers and perform such other
duties as may be prescribed by the Board.
(d) President: The President shall, in the absence of the Chairman of the
Board preside at all meetings of the stockholders, the Board of Directors and
the Executive Committee. He shall exercise all of the powers and discharge all
of the other duties of the Chairman of the Board in the absence of the Chairman
of the Board. He shall perform such other duties as may be prescribed by the
Chairman of the Board.
9
<PAGE>
(e) Vice Presidents: The Vice Presidents shall have such duties and have
such other powers as shall be prescribed by the Chief Executive Officer. Such
Vice President as may be designated by the Board of Directors or the Chairman of
the Board shall preside at all meetings of the stockholders.
(f) Secretary: The Secretary shall record all the proceedings of the
meetings of the Corporation and of the directors in a book or books kept for
that purpose. He shall attend to the giving and serving of all notices on behalf
of the Corporation. He shall have the custody of the corporate seal and affix
the same to such instruments as may be required. He shall have such other powers
and perform such other duties as may be prescribed by the Chief Executive
Officer.
(g) Assistant Secretaries: Assistant Secretaries shall assist the Secretary
in the performance of his duties and any one of the Assistant Secretaries may
perform all of the duties of the Secretary if at any time he shall be unable to
act. Assistant Secretaries shall have such other powers and perform such other
duties as may be prescribed by the Chief Executive Officer.
(h) Treasurer: The Treasurer shall have charge of the custody, control and
disposition of all funds of the Corporation and shall account for same. He shall
have such other powers and perform such other duties as may be prescribed by the
Chief Executive Officer.
(i) Assistant Treasurers: Assistant Treasurers shall assist the Treasurer
in the performance of his duties and any one of the Assistant Treasurers may
perform all of the duties of the Treasurer if at any time he shall be unable to
act. Assistant Treasurers shall have such other powers and perform such other
duties as may be prescribed by the Chief Executive Officer.
SECTION 3. Committees. (a) Executive Committee. The Board of Directors
shall, by resolution passed by a majority of the whole Board, appoint an
Executive Committee of not less than three members, all of whom shall be
directors. The Executive Committee, to the extent permitted by law, shall have
and may exercise when the Board of Directors is not in session all powers of the
Board in the management of the business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. It shall be the duty of the Secretary of the Corporation to record
the minutes of all actions of the Executive Committee.
(b) Other Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board, from time to time appoint such other committees as
may be permitted by law. The Chief Executive Officer may appoint such other
committees as he finds necessary to the conduct of the Corporation's business.
Such other committees appointed by the Board of Directors or the Chief Executive
Officer shall have such powers and perform such duties as may be prescribed by
the body or person appointing such committee.
10
<PAGE>
(c) Term; Number of Committee Members. The members of all committees of the
Board of Directors shall serve a term coexistent with that member 's remaining
term as a member of the Board of Directors, or until such time as the Board of
Directors shall replace that member on such committee or ask that member to
accept another committee assignment in its stead. The Board, subject to the
provisions of subsection (a) and (b) of this Section 3, may at any time increase
or decrease the number of members of a committee or terminate the existence of a
committee; provided, that no committee, while it exists, shall consist of less
than three members. The membership of a committee member shall terminate on the
date of his death or voluntary resignation, but the Board may at any time for
any reason remove any individual committee member and the Board may fill any
committee vacancy created by death, resignation, removal or increase in the
number of members of the committee. The Board of Directors may designate one or
more directors as alternate members of any committee, to replace any absent or
disqualified member at any meeting of the committee. If the qualified members of
a committee, in attendance at a committee meeting, believe that the absence or
disqualification of one or more members of that committee seriously impairs the
function of that committee, such remaining qualified members, whether or not
constituting a quorum, may by unanimous action appoint another member of the
Board of Directors to act as a committee member at that meeting.
(d) Notice of Committee Meetings. Notice of the date, time and place of
each committee meeting shall be sent to each committee member by mail at least
seventy-two hours in advance of the time of the meeting, or by telegram at least
forty-eight hours in advance of the time of the meeting, or by facsimile at
least twenty-four hours in advance of the time of the meeting, to the address or
facsimile number (as applicable) of each committee member.
ARTICLE V
CAPITAL STOCK
SECTION 1. Form and Execution of Certificates. Certificates for the shares
of stock of the Corporation shall be in such form as are consistent with the
Certificate of Incorporation and applicable law. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by, or in the name of
the Corporation by, the Chairman of the Board, President or any Vice President
and by the Treasurer or Assistant Treasurer or the Secretary or Assistant
Secretary, certifying the number of shares owned by him in the Corporation.
Where such certificate is countersigned by a transfer agent other than the
Corporation or its employee, or by a registrar other than the Corporation or its
employee, any other signature on the certificate may be a facsimile. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.
11
<PAGE>
SECTION 2. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost or destroyed.
SECTION 3. Transfers. Transfers of record of shares of the capital stock of
the Corporation shall be made upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a certificate or
certificates for a like number of shares, properly endorsed or accompanied by a
properly endorsed stock power.
SECTION 4. Fixing Record Dates. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. If no record
date is fixed: (1) the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held; and (2) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 5. Registered Stockholders. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VI
OTHER SECURITIES OF THE CORPORATION
12
<PAGE>
All bonds, debentures and other corporate securities of the Corporation,
other than stock certificates, may be signed by the Chairman of the Board, the
President or any Vice President, or such other person as may be authorized by
the Board of Directors, and the corporate seal impressed thereon or a facsimile
of such seal imprinted thereon and attested by the signature of the Secretary or
an Assistant Secretary, or the Treasurer or an Assistant Treasurer, or such
other person as may be authorized by the Board of Directors; provided, however,
that where any such bond, debenture or other corporate security shall be
authenticated by a trustee under an indenture pursuant to which such bond,
debenture or other corporate securities shall be issued, the signatures of the
persons signing and attesting the corporate seal on such bond, debenture or
other corporate security may be the imprinted facsimile of the signatures of
such persons. Interest coupons appertaining to any such bond, debenture or other
corporate security, authenticated by a trustee as aforesaid, shall be signed by
the Treasurer or an Assistant Treasurer of the Corporation, or such other person
as may be authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any person who shall have signed or
attested any bond, debenture or other corporate security, or whose facsimile
signature shall appear thereon or on any such interest coupon, shall have ceased
to be an officer before the bond, debenture or other corporate security so
signed or attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the Corporation and issued and
delivered as though the person who signed the same or whose facsimile signature
shall have been used thereon had not ceased to be such officer of the
Corporation.
ARTICLE VII
SECURITIES OWNED BY THE CORPORATION
Power to Vote. Unless otherwise ordered by the Board of Directors, the
Chief Executive Officer, or any officer designated in writing by the Chief
Executive Officer, shall have full power and authority in the name and on behalf
of the Corporation, to vote and to act either in person or by proxy at any
meeting of the holders of stock or securities in any corporation upon and in
respect of any securities therein which the Corporation may hold, and shall
possess and may exercise in the name of the Corporation any and all rights and
powers incident to the ownership of such stock or securities which, as the owner
thereof, the Corporation shall possess and might exercise including the right to
give written consents in respect to action taken or to be taken. The Board of
Directors may from time to time confer like powers upon any other person or
persons.
ARTICLE VIII
CORPORATE SEAL
The corporate seal shall consist of a die bearing the inscription, CNF
Transportation Inc. Corporate Seal Delaware.
13
<PAGE>
ARTICLE IX
AMENDMENTS
These Bylaws may be repealed, altered or amended or new Bylaws adopted by
written consent of stockholders in the manner authorized by Section 8 of Article
II or at any meeting of the stockholders, either annual or special, by the
affirmative vote of a majority of the stock entitled to vote at such meeting.
The Board of Directors shall also have the authority to repeal, alter or amend
these Bylaws or adopt new Bylaws by unanimous written consent or by the
affirmative vote of a majority of the whole Board at any annual, regular, or
special meeting subject to the power of the stockholders to change or repeal
such Bylaws.
ARTICLE X
MISCELLANEOUS
SECTION 1. Definitions. As used in these Bylaws and wherever the context
shall require, the word "person" shall include associations, partnerships and
corporations as well as individuals; words in the masculine gender shall include
the feminine and associations, partnerships and corporations; words in the
singular shall include the plural and words in the plural may mean only the
singular, and words "additional compensation" shall mean and include all bonus,
profit sharing, retirement, deferred compensation, and all other additional
compensation plans or arrangements affecting persons individually or as a group.
SECTION 2. Notices. Whenever, under any provisions of these Bylaws, notice
is required to be given to any stockholder, the same shall be given in writing,
timely and duly deposited in the United States Mail, postage prepaid, and
addressed to his last known post office address as shown by the stock record of
the Corporation or its transfer agent. Any notice required to be given to any
director may be given by the method hereinabove stated, by personal delivery, or
by telegram, except that such notice, other than one which is delivered
personally, shall be sent to such address as such director shall have filed in
writing with the Secretary of the Corporation, or, in the absence of such
filing, to the last known post office address of such director. If no address of
a stockholder or director be known, such notice may be sent to the principal
office of the Corporation. An affidavit of mailing, executed by a duly
authorized and competent employee of the Corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, director
or directors, to whom any such notice or notices was or were given, and the time
and method of giving the same, shall be conclusive evidence of the statements
therein contained. All notices given by mail, as above provided, shall be deemed
to have been given as at the time of mailing and all notices given by telegram
shall be deemed to have been given as at the sending time recorded by the
telegraph company transmitting the same. It shall not be necessary that the same
method of giving be employed in respect of all directors, but one permissible
method may be employed in respect
14
<PAGE>
of any one or more, and any other permissible method or methods may be employed
in respect of any other or others.
The period or limitation of time within which any stockholder may exercise
any option or right, or enjoy any privilege or benefit, or be required to act,
or within which any directors may exercise any power or right, or enjoy any
privilege, pursuant to any notice sent him in the manner above provided, shall
not be affected or extended in any manner by the failure of such stockholder or
such director to receive such notice. Whenever any notice is required to be
given under the provisions of the statutes or of the Certificate of
Incorporation, or of these Bylaws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Whenever notice is required
to be given, under any provision of law or of the Certificate of Incorporation
or Bylaws of the Corporation, to any person with whom communication is unlawful,
the giving of such notice to such person shall not be required and there shall
be no duty to apply to any governmental authority or agency for a license or
permit to give such notice to such person. Any action or meeting which shall be
taken or held without notice to any such person with whom communication is
unlawful shall have the same force and effect as if such notice had been duly
given. In the event that the action taken by the Corporation is such as to
require the filing of a certificate under any provision of the Delaware General
Corporation Law, the certificate shall state, if such is the fact and if notice
is required, that notice was given to all persons entitled to receive notice
except such persons with whom communication is unlawful.
SECTION 3. Indemnification of Officers, Directors, Employees and Agents.
(a) Right to Indemnification. 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, whether civil, criminal, administrative,
or investigative (hereinafter a "Proceeding"), by reason of the fact that he, or
a person of whom he is the legal representative, is or was a director, officer,
employee, or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, or agent of another corporation or
of a partnership, joint venture, trust, or other enterprise, including service
with respect to employee benefit plans, whether the basis of the Proceeding is
alleged action in an official capacity as a director, officer, employee, or
agent or in any other capacity while serving as a director, officer, employee,
or agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than were permitted prior to amendment) against all
expenses, liability, and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties, and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith;
provided, however, that except as to actions to enforce indemnification rights
pursuant to paragraph (c) of this Section, the Corporation shall indemnify any
such person seeking indemnification in connection with a Proceeding (or part
thereof) initiated by such person only if the Proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
15
<PAGE>
indemnification conferred in this Article shall be a contract right for the
benefit of the Corporation's directors, officers, employees, and agents.
(b) Authority to Advance Expenses. Expenses incurred (including attorneys'
fees) by an officer or director (acting in his capacity as such) in defending a
Proceeding shall be paid by the Corporation in advance of the final disposition
of such Proceeding, provided, however, that if required by the Delaware General
Corporation Law, as amended, such expenses shall be advanced only upon delivery
to the Corporation of an undertaking by or on behalf of such director or officer
to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article or
otherwise. Such expenses incurred by other employees or agents of the
Corporation (or by the directors or officers not acting in their capacity as
such, including service with respect to employee benefit plans) may be advanced
upon such terms and conditions as the Board of Directors deems appropriate.
(c) Right of Claimant to Bring Suit. If a claim under paragraph (a) or (b)
of this Section is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense (including attorneys' fees) of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending a Proceeding in advance of
its final disposition where the required undertaking has been tendered to the
Corporation) that the claimant has not met the standards of conduct that make it
permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed. The burden of proving such a
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper under the circumstances
because he has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant had not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct.
(d) Provisions Nonexclusive. The rights conferred on any person by this
Section shall not be exclusive of any other rights that such person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, Bylaw, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
(e) Authority to Insure. The Corporation may purchase and maintain
insurance to protect itself and any person who is or was a director, officer,
employee, or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise
16
<PAGE>
against any liability, expense, or loss asserted against or incurred by such
person, whether or not the Corporation would have the power to indemnify him
against such liability, expense, or loss under applicable law or the provisions
of this Article.
(f) Survival of Rights. The rights provided by this Section shall continue
as to a person who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of the heirs, executors, and administrators of such a
person.
(g) Effect of Amendment. Any amendment, repeal, or modification of this
Section shall not (a) adversely affect any right or protection of any director,
officer, employee, or agent existing at the time of such amendment, repeal, or
modification, or (b) apply to the indemnification of any such person for
liability, expense, or loss stemming from actions or omissions occurring prior
to such amendment, repeal, or modification.
17
<PAGE>
EXHIBIT 4(c)
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
*****
Consolidated Freightways, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:
FIRST: That its Board of Directors adopted certain
resolutions proposing and declaring advisable a particular
amendment to the Certificate of Incorporation of the corporation;
and that such amendment, which is set forth in Exhibit A, attached
hereto, was approved by the Shareholders of the corporation at
their Annual Meeting held on April 28, 1997.
SECOND: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Section 242 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Consolidated Freightways, Inc., has
caused this certificate to be signed by Eberhard G.H. Schmoller,
its Senior Vice President, General Counsel and Secretary, this 28th
day of April, 1997.
CONSOLIDATED FREIGHTWAYS, INC.
By: /s/ Eberhard G.H. Schmoller
---------------------------------
Eberhard G.H. Schmoller
Senior Vice President, General
Counsel and Secretary
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 04/28/1997
971136742 - 0526809
<PAGE>
EXHIBIT 4(c)
Consolidated Freightways, Inc.
Amendment to Certificate of Incorporation
-----------------------------------------
We are amending the corporation's Certificate of
Incorporation by changing Article FIRST to read as follows:
FIRST: The name of the corporation is CNF Transportation Inc.
<PAGE>
EXHIBIT 12(a)
CNF TRANSPORTATION INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(dollars in thousands)
Fixed Charges:
Interest Expense $ 39,766 $ 33,407 $ 27,065 $ 29,890 $ 33,023
Capitalized Interest 2,092 731 793 531 4
Preferred Dividends 12,645 12,419 12,475 12,551 12,618
-------- -------- -------- -------- --------
Total Interest 54,503 46,557 40,333 42,972 45,645
Interest Component of
Rental Expense 48,704 43,202 41,416 34,464 32,219
-------- -------- -------- -------- --------
Fixed Charges 103,207 89,759 81,749 77,436 77,864
Less:
Capitalized Interest 2,092 731 793 531 4
Preferred Dividends 12,645 12,419 12,475 12,551 12,618
-------- -------- -------- -------- --------
Net Fixed Charges $ 88,470 $ 76,609 $ 68,481 $ 64,354 $ 65,242
======== ======== ======== ======== ========
Earnings:
Income (Loss) from
Continuing Operations
Before Income Taxes $147,132 $152,942 $165,129 $ 66,202 $(26,783)
Add: Net Fixed Charges 88,470 76,609 68,481 64,354 65,242
-------- -------- -------- -------- --------
Total Earnings Before
Fixed Charges $235,602 $229,551 $233,610 $130,556 $ 38,459
======== ======== ======== ======== ========
Ratio of Earnings to
Fixed Charges:
Total Earnings $235,602 $229,551 $233,610 $130,556 $ 38,459
Fixed Charges(1) 103,207 89,759 81,749 77,436 77,864
Ratio 2.3x 2.6x 2.9x 1.7x 0.5x(2)
</TABLE>
- -------
(1) Fixed charges represent 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"), 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 period shown; the
deficiency was $39.4 million for the year ended December 31, 1992.
<PAGE>
EXHIBIT 12(b)
CNF TRANSPORTATION INC.
COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(dollars in thousands)
Combined Fixed Charges
and Preferred Stock
Dividends:
Interest Expense $ 39,766 $ 33,407 $ 27,065 $ 29,890 $ 33,023
Capitalized Interest 2,092 731 793 531 4
Preferred Dividends 12,645 14,626 23,102 23,178 20,968
-------- -------- -------- -------- --------
Total Interest 54,503 48,764 50,960 53,599 53,995
Interest Component of
Rental Expense 48,704 43,202 41,416 34,464 32,219
-------- -------- -------- -------- --------
Combined Fixed Charges
and Preferred Stock
Dividends: 103,207 91,966 92,376 88,063 86,214
Less:
Capitalized Interest 2,092 731 793 531 4
Preferred Dividends 12,645 14,626 23,102 23,178 20,968
-------- -------- -------- -------- --------
Net Fixed Charges $ 88,470 $ 76,609 $ 68,481 $ 64,354 $ 65,242
======== ======== ======== ======== ========
Earnings:
Income (Loss) from
Continuing Operations
Before Income Taxes $147,132 $152,942 $165,129 $ 66,202 $(26,783)
Add: Net Fixed Charges 88,470 76,609 68,481 64,354 65,242
-------- -------- -------- -------- --------
Total Earnings Before
Combined Fixed
Charges and
Preferred Stock
Dividends $235,602 $229,551 $233,610 $130,556 $ 38,459
======== ======== ======== ======== ========
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends:
Total Earnings $235,602 $229,551 $233,610 $130,556 $ 38,459
Combined Fixed Charges
and Preferred Stock
Dividends(1) 103,207 91,966 92,376 88,063 86,214
Ratio 2.3x 2.5x 2.5x 1.5x 0.4x(2)
</TABLE>
- -------
(1) Fixed charges represent 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"), and the
applicable portion of the consolidated rent expense which approximates the
interest portion of lease payments. Preferred stock dividends represent
dividends on the Series C Conversion Preferred Stock, all of which was
converted into Common Stock in March 1995.
(2) Earnings were inadequate to cover combined fixed charges and preferred
stock dividends for the period shown; the deficiency was $47.8 million for
the year ended December 31, 1992.
<PAGE>
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement, in Registration Statement No. 33-
29793 and in Registration Statement No. 33-60619 of our reports dated January
24, 1997 included and incorporated by reference in CNF Transportation Inc.'s
(formerly Consolidated Freightways, Inc.) Form 10-K for the year ended December
31, 1996 and to all references to our Firm included in such Registration State-
ments.
/s/ Arthur Andersen LLP
San Francisco, California,
May 5, 1997
