<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1997
REGISTRATION STATEMENT NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________________
USFREIGHTWAYS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3790696
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9700 HIGGINS ROAD, SUITE 570, ROSEMONT, ILLINOIS 60018 (847) 696-0200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
_________________
JOHN CAMPBELL CARRUTH
USFREIGHTWAYS CORPORATION
9700 HIGGINS ROAD, SUITE 570
ROSEMONT, ILLINOIS 60018
(847) 696-0200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_________________
Copies to:
WILLIAM N. WEAVER, JR. ROBERT F. WALL
MISTY S. GRUBER R. CABELL MORRIS, JR.
SACHNOFF & WEAVER, LTD. WINSTON & STRAWN
30 S. WACKER DRIVE, 29TH FLOOR 35 W. WACKER DRIVE, SUITE 4200
CHICAGO, ILLINOIS 60606-7484 CHICAGO, ILLINOIS 60601
TELEPHONE NO. (312) 207-1000 TELEPHONE NO. (312) 558-5600
_________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
_________________
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, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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. / /
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================
TITLE OF EACH CLASS OF PROPOSED PROPOSED MAXIMUM
SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED (1) PRICE PER UNIT(2) PRICE (2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 3,105,000 shares $27.125 $84,223,125 $28,074
=========================================================================================================
</TABLE>
(1) Includes 405,000 shares to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (g).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 13, 1997
2,700,000 SHARES
[LOGO] USFREIGHTWAYS CORPORATION
COMMON STOCK
($.01 PAR VALUE)
_________________
This Prospectus covers 2,700,000 shares of common stock, par value $.01
per share (the "Common Stock") of USFreightways Corporation (the "Company").
The Common Stock is traded on the Nasdaq National Market under the symbol
"USFC." On January 10, 1997, the last reported sale price of the Common Stock
on the Nasdaq National Market was $27 1/4 per share. See "Price Range of
Common Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE ___ FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY POTENTIAL INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
==================================================================
Price Proceeds
to Underwriting to
Public Discount (1) Company(2)
- ------------------------------------------------------------------
<S> <C> <C> <C>
Per Share.................. $ $ $
- ------------------------------------------------------------------
Total(3) .................. $ $ $
==================================================================
</TABLE>
(1) The Company has agreed to indemnify the several Underwriters against
certain liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting offering expenses payable by the Company estimated at
$__________.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
405,000 additional shares of Common Stock solely to cover over-allotments, if
any. If the Underwriters exercise this option in full, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $_______,
$_______, and $_______, respectively. See "Underwriting."
The shares of Common Stock are offered subject to receipt and acceptance
by the Underwriters, to prior sale and to the Underwriters' right to reject any
order in whole or in part and to withdraw, cancel or modify the offer without
notice. It is expected that delivery of share certificates will be made at the
offices of Merrill Lynch & Co., New York, New York on or about __________,
1997.
MERRILL LYNCH & CO. SCHRODER WERTHEIM & CO.
The date of this Prospectus is ________, 1997.
<PAGE> 4
- - INSIDE COVER
[Map of Regional Areas]
<PAGE> 5
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Securities
and Exchange Commission (the "Commission") with respect to the shares offered
by this Prospectus. This Prospectus does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules thereto.
Statements contained herein concerning the provisions of any documents are not
necessarily complete and, in each instance, reference is made to the copy of
such documents filed as an exhibit to the Registration Statement, and each such
statement shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Commission.
Such reports, proxy statements and other information filed by the Company with
the Commission may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the Commission: Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and Midwest
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Section of the Commission, at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Company is subject to the electronic
filing requirements of the Commission. Accordingly, pursuant to the rules and
regulations of the Commission, certain documents, including annual and
quarterly reports and proxy statements, filed by the Company with the
Commission have been or will be filed electronically. The Commission maintains
a World Wide Web site that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission at http://www.sec.gov. The Company's Common Stock is listed on the
Nasdaq National Market under the symbol USFC, and such reports, proxy
statements and other information can also be inspected at the offices of the
Nasdaq National Market, Reports Section, 1735 Street, N.W., Washington, D.C.
20006. This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto which the Company has filed with
the Commission under the Securities Act.
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 1995, the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 30, 1996, June 29, 1996 and September 28, 1996, the
description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A declared effective February 12, 1992, and
the Company's Current Report on Form 8-K dated as of January 7, 1997, each of
which has been filed with the Commission, are incorporated by reference in this
Prospectus.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the Common
Stock registered hereby shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the respective dates of filing of
such documents. Any statement contained 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 modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified and superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the information that has been incorporated by reference in this
Prospectus, excluding exhibits. Such requests should be directed to
USFreightways Corporation, 9700 Higgins Road, Suite 570, Rosemont, Illinois
60018, Attention: Senior Vice President, Finance. Telephone: (847) 696-0200.
<PAGE> 6
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY ENGAGE IN PASSIVE
MARKET TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY ON THE NASDAQ NATIONAL
MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE EXCHANGE ACT. SEE
"UNDERWRITING."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE NASDAQ NATIONAL MARKET,
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information (including the consolidated financial statements and the notes
thereto) included elsewhere in this Prospectus and incorporated by reference
herein. Potential investors should carefully consider the factors set forth in
the section entitled "Risk Factors" and are urged to read this Prospectus in
its entirety. Unless otherwise indicated, all information contained in this
Prospectus assumes (i) an offering price of $________ per share and (ii) no
exercise of the Underwriters' over-allotment option. See "Underwriting."
THE COMPANY
OVERVIEW
USFreightways Corporation (the "Company") is a leader in the regional less
than truckload ("LTL") general transportation business. The Company owns a
group of five regional, general commodities motor carriers, which focuses on
overnight and second-day freight delivery and provides service throughout the
continental United States, Hawaii, Alaska, and to certain points in Canada.
Over 70% of the Company's regional shipments are delivered within one day and
over 95% within two days. The Company's logistics subsidiaries provide
specialized and dedicated services in management and distribution. For the
fiscal year ended December 30, 1995, the Company generated $1.14 billion of
consolidated operating revenue and $67.5 million of income from operations.
During the four year period ended December 30, 1995, operating revenue and
income from operations grew at a compound annual rate of 15.2% and 25.3%,
respectively. Management believes that its growth to date and prospects reflect
a strategy that capitalizes on evolving trends in the transportation industry.
Typically, LTL carriers transport freight along scheduled routes from
multiple shippers to multiple consignees utilizing a network of terminals,
together with fleets of line-haul and pick-up and delivery tractors and
trailers. Freight is picked up from customers by local drivers and
consolidated for shipment. The freight is then loaded into intercity trailers
and transferred by line-haul drivers to the terminal servicing the delivery
area. There, the freight is transferred to local trailers and delivered to its
destination by local drivers. At December 28, 1996, the Company maintained 239
terminals. During the year ended December 28, 1996, the Company transported
10.2 million shipments through the use of approximately 18,500 pieces of
revenue equipment. With these capital assets, management believes the Company
is able to effectively compete in the $19 billion LTL market, as estimated by
Cass Information Systems.
2
<PAGE> 7
LTL operators are generally categorized as regional, interregional or
long-haul carriers, depending on the distance freight travels from pick-up to
final delivery. Regional carriers usually have average lengths of haul of 500
miles or less and tend to provide either overnight or second-day service.
Regional LTL carriers usually are able to load freight for direct transport to
a destination terminal, thereby avoiding the costly and time-consuming use of
breakbulk terminals (where freight is rehandled and reloaded to its ultimate
destination). In contrast, long-haul LTL carriers (average lengths of haul in
excess of 1,000 miles) operate networks of breakbulk and satellite terminals
(hub and spoke systems) and rely heavily on interim handling of freight.
Interregional carriers (500 to 1,000 miles per average haul) also rely on
breakbulk terminals but to a lesser degree than long-haul carriers.
Management believes that the regional LTL segment is the most attractive
segment of the LTL trucking industry both because customer distribution
strategies have shifted over time thereby increasing demand, and regional
carriers tend to be more cost competitive for this type of freight. Whereas in
the past shippers would send multiple shipments to multiple ultimate consignees
throughout the country via long-haul LTL carriers, they are increasingly
sending large quantities to a few distribution centers by truckload carriers
and then shipping to the ultimate consignees via regional LTL carriers. Also,
freight in general is moving over shorter distances. Approximately 70% of all
general freight today is shipped 500 miles or less. Furthermore, management
believes the regional LTL market has attractive growth prospects, as
significant barriers to entry exist, thereby reducing competition from new
entrants due to (i) the substantial capital requirements for terminals and
revenue equipment, and (ii) the need for a large, well-coordinated and skilled
work force.
The Company is one of the largest regional LTL operators, having developed
a network of regional carriers throughout the United States, while retaining
and enhancing overall profitability. Management remains firmly committed to
increasing operating profitability and enhancing shareholder value. The table
below details the operating performance of the Company's regional carriers and
logistics operations.
Revenue and Operating Ratios
Unaudited (Dollars in Thousands)
<TABLE>
<CAPTION>
Operating Revenue Operating Ratio(a) Operating Revenue Operating Ratio(a)
-------------------- -------------------- -------------------- --------------------
Three Months Ended Nine Months Ended
------------------------------------------ ------------------------------------------
09/30/95 09/28/96 09/30/95 09/28/96 09/30/95 09/28/96 09/30/85 09/28/96
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Company (Region)
- --------------------------
Holland (Midwest) $131,280 $153,725 91.9% 90.6% $397,250 $440,800 91.4% 91.4%
Red Star (Northeast) 50,778 48,571 102.2 101.6 149,580 147,961 100.0 102.8
Reddaway (West Coast,
Northwest) 43,395 46,383 90.6 92.2 121,666 132,506 92.6 94.6
Bestway (Southwest) 27,184 28,416 90.9 88.9 80,297 84,321 90.3 89.4
Dugan (Plains, South) (b) 19,304 38,543 93.6 96.1 57,099 111,755 92.5 97.8
Logistics Operations 16,798 22,969 94.8 94.7 46,852 62,073 95.4 97.3
Other 1,225 4,596 3,336 9,581
--------- --------- --------- ---------
Total Operating Revenue $289,964 $343,203 $856,080 $988,997
========= ========= ========= =========
Income from Operations $17,326 $22,528 $53,225 $50,171
========= ========= ========= =========
</TABLE>
(a) Operating ratio is operating expenses as a percentage of operating revenue.
(b) Includes revenues resulting from the acquisition of the general
commodities business of Transus, Inc., effective as of January 1, 1996.
The Company believes that the increase in the demand for regional LTL
transportation services is a result of two market phenomena: (i) an increase
in shippers' desire to reduce costs in their supply chain; and (ii) an increase
in customers' material and inventory turnover. Shippers are increasingly using
regional distribution
3
<PAGE> 8
centers, consolidating or eliminating warehouses and adopting other just-in-time
or quick response distribution practices ("JIT/QR"). Industry sources estimate
that the percentage of goods moved in the United States using JIT/QR as a
percentage of the total is expected to be approximately 35% in 1997, a
three-fold increase from the 13% of goods moved using such practices in 1990.
The Company has addressed these changes in the patterns of distribution by
forming two operating entities, Comet Transport and Logix, to respond to
customers' evolving transportation needs. Comet Transport, an interregional
truckload carrier, ships freight between the Company's regions and provides
third party for-hire shipments. Logix, the Company's contract logistics
subsidiary, enables the Company to offer its customers a single source for
logistic management and dedicated carriage.
STRATEGY
Management's long-term operating and financial objectives include being the
leading regional LTL carrier, recognized for its premier service, and enhancing
its profitability. While significant accomplishments have been achieved since
the Company was established, management believes the Company is well positioned
to further these objectives. As a result, management has developed a growth
strategy based on evolving customer and industry trends.
Management believes these trends include:
* An increasing emphasis by shippers toward limiting the number of
individual carriers they use to provide transportation services. The
effect of this "core carrier" focus is to increase the customer's
leverage with and, at the same time, dependence on certain specific
suppliers of transportation services;
* Enhancing the quality and scope of the transportation services. This
trend relates to not only traditional qualitative service benchmarks
such as on-time service and claims-free delivery of goods, but also to
increasing the information/technology associated with issues such as
inventory management, billing and logistics;
* Continued strong competition in the marketplace thereby elevating the
importance of maintaining both a strong financial position and a unit
cost advantage over other LTL providers; and
* Further consolidation within the trucking industry as well as the
possible convergence among suppliers of various modes of
transportation services. Over the past several years, numerous
mergers, acquisitions and joint ventures have been formed within the
trucking arena. Management believes long-term benefits will accrue to
the larger operators that successfully integrate companies that
possess diverse operational, cultural and financial characteristics.
The trends highlighted above have been and continue to be evolving in the
trucking industry. Several years ago management embarked on a strategy to
capitalize on these trends. Management believes the Company is well positioned
to further exploit these opportunities. The Company's strategy, as described
below, illustrates its historical success and future plans in pursuing its
long-term financial and strategic objectives.
(i) Continue Geographic Expansion. After expanding operations to all 50
states in 1994, the Company began focusing on increasing the density
of coverage of its regional trucking companies, especially at USF
Holland, its largest operating subsidiary, with approximately 46% of
the Company's consolidated revenue in 1995. During 1995, the
Company's regional LTL companies increased the number of terminals
by 20 over a dozen states across the country.
During 1996, the Company increased its number of terminals by
seven, and began providing direct service into Ontario and Quebec,
Canada, as well as container service to Guam and the Caribbean.
Early in 1996, the Company dramatically increased density in the
Southeast by acquiring the general commodities business of Transus,
Inc. and merged this operation into USF
4
<PAGE> 9
Dugan. In February 1996, the Company merged two of the most
dominant carriers in their respective territories, United (covering
the Northwest and Rocky Mountain states) and USF Reddaway (covering
the West Coast). Management believes this consolidation has
enhanced productivity and customer service capabilities of the newly
consolidated USF Reddaway entity, which now has 55 terminals.
(ii) Broaden Service Offerings. The Company also has expanded into new
business activities through internal growth and acquisitions. Three
examples include logistics, interregional LTL carriage and
distribution. Logix, the Company's newly renamed contract logistics
business, provides complete supply chain management services, from
supplying raw materials to delivering products to customers. Logix
provides integrated logistics solutions throughout the logistics
pipeline, including dedicated carriage, contract warehousing,
inventory management, customer service, order fulfillment, and
freight management. Through client server platforms, Logix's
systems utilize communication links with satellites and computers to
manage transportation, dispatch and operations. In the initial
design of a customer's logistics needs, Logix uses decision support
software to provide solutions in such areas as transportation
optimization, routing carrier selection, load planning and order
optimization. In July, 1996, Logix acquired the Interamerican
Group, a third party logistics provider primarily in the contract
warehousing business, whose customers include Proctor & Gamble,
Kimberly-Clark, Microsoft, Xerox, Alberto-Culver, and Becton
Dickinson.
In 1995, the Company broadened its service capabilities with the
launch of Comet Transport, a premium, long-haul, expedited
truckload carrier. Management believes Comet Transport's
operations complement its regional LTL carriers by providing
expedited service on interregional freight, improve its ability to
meet demanding delivery schedules and make the Company more
valuable to its customers, since the Company now offers integrated
long-haul truckload and regional LTL service.
Thirdly, the Company is positioning its USF Distribution Services
business to meet new demands. The business collects and ships
components to manufacturers and receives, sorts and moves
merchandise from suppliers to retail stores. In 1996, USF
Distribution opened a fully automated freight handling facility
near Chicago. This facility integrates state-of-the-art bar-code
scanning, automated sortation, full case order picking, and
labeling systems to provide the customer speed, accuracy, and
flexibility in getting product to the market.
(iii) Develop Value-Added Technology. In an effort to continue to be a
leader in service quality, the Company has made significant
investments in value-added technology. Value-added is that which
differentiates the Company's products by reducing costs to both the
Company and its customers. The Company's strategy has been to
invest in technology where a reasonable return can be achieved. The
Company is continuing to upgrade its computer systems through
implementation of a common operating platform and communications
infrastructure across all operating companies. The Company now
utilizes imaging systems that provide instant access to shipping and
other customer related documents that can be retrieved and directly
faxed in response to customer inquiries. Management believes its
ability to integrate and leverage information technology will
continue to be a significant factor in differentiating the Company
from its competitors and that its ability to capture, consolidate
and provide access to timely and accurate data will be as important
to the Company's success as its ability to move freight. Management
believes yields are enhanced through its investment in technology.
(iv) Remain a Low-Cost Provider. As competition in the LTL industry
remains fierce, management has executed an operating strategy of
maintaining a low-cost structure to enhance profitability. In the
first nine months of 1996, regional operating ratios ranged from a
low of 89.4% (USF Bestway) to a high of 102.8% (USF Red Star).
Excluding USF Red Star's operations, all regions produced positive
operating margins. Management's success is best evidenced by the
profitability
5
<PAGE> 10
of its largest operation, USF Holland. USF Holland generated 45% of
total operating revenue in the first nine months of 1996 with an
operating ratio of 91.4%. This success is due in part to USF
Holland's strong brand recognition in the LTL marketplace and its
reputation for premier service quality.
The Company has been disappointed by USF Red Star's high operating
ratio. To restore profitability, management undertook a
restructuring of its USF Red Star subsidiary that included closing
terminals, implementing strict cost controls and increasing yields
per shipment. The Company anticipates that USF Red Star will
report a small operating profit for the fourth quarter of 1996.
(v) Seek Opportunistic Acquisitions. The fragmentation that has
historically characterized the trucking industry positions it for
further consolidation, and management has implemented a strategy to
capitalize on this trend. The recent acquisitions of Transus, Inc.
and Interamerican Group are examples of the implementation of this
strategy. Given the complexity associated with integrating
operations, fleets and cultures into the Company, the Company has
been very selective when evaluating opportunities. Management seeks
acquisitions which enhance the Company's brand, expand its service
base, afford a favorable return on capital and complement existing
operations. Moreover, as customer demand shifts, the Company may
determine to expand beyond its core LTL truck haulage services to
other modes of transportation.
(vi) Maintain Financial Flexibility. Management's strategy is to
maintain financial flexibility through a strong balance sheet and
access to the public capital markets. This flexibility allows the
Company to be opportunistic in making selective acquisitions,
purchasing equipment, investing in facilities or expanding its
business.
As of December 30, 1995, the Company had approximately 13,000 employees, of
which 58% were members of unions. Approximately 88% of these union workers were
employed by USF Holland and USF Red Star and belonged to the International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America.
Management believes relationships with its employees are good. The Company's
executive offices are located at 9700 Higgins Road, Suite 570, Rosemont,
Illinois 60018. The Company's telephone number is (847) 696-0200.
6
<PAGE> 11
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------
52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS
DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30
1991 1993 1994 1994 1995
---- ---- ---- ---- ----
(In thousands of dollars, except per share and operating statistics)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating Revenue $649,775 $774,678 $898,920 $1,016,464 $1,144,458
Income from operations 27,365 39,501 61,222 69,666 67,543
Interest expense, net (31) (1,632) (7,391) (8,417) (8,177)
Other non-operating expense (210) (1,067) (1,683) (2,011) (878)
-------- -------- -------- ---------- ----------
Net income from continuing
operations before income taxes 27,124 36,802 52,148 59,238 58,488
Net income from continuing
operations 14,814 20,804 28,545 33,356 33,338
Net income 14,872 6,902 27,348 32,065 33,338
Net income per share from
continuing operations $0.59 $0.78 $1.25 $1.51 $1.51
Net income per share $0.59 $0.26 $1.20 $1.45 $1.51
Average shares outstanding 25,200 26,882 22,853 22,142 22,123
OPERATING STATISTICS:
Total tons (000) 4,487 5,184 5,977 6,210 6,835
Total shipments (000) 7,015 7,934 8,762 9,045 10,187
Revenue equipment 11,087 12,877 14,479 16,171 18,481
Employees 8,811 9,721 11,089 12,184 13,187
<CAPTION>
NINE MONTHS ENDED
-------------------
SEPT. 30 SEPT. 28
1995 1996
---- ----
(In thousands of dollars, except per share and operating statistics)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating Revenue $856,080 $988,997
Income from operations 53,225 50,171
Interest expense, net (5,948) (8,584)
Other non-operating expense (537) (516)
-------- --------
Net income from continuing
operations before income taxes 46,740 41,071
Net income from continuing
operations 26,642 23,510
Net income 26,642 23,510
Net income per share from
continuing operations $1.20 $1.05
Net income per share $1.20 $1.05
Average shares outstanding 22,144 22,312
OPERATING STATISTICS:
Total tons (000) 5,052 5,761
Total shipments (000) 7,476 8,639
Revenue equipment 17,437 21,609
Employees 13,387 15,393
SEPTEMBER 28, 1996
-------------------------------------------
Actual As Adjusted
------ -----------
BALANCE SHEET DATA:
Working Capital $57,394
Total assets 698,359
Long-term obligations, excluding current portion 189,111
Stockholders' equity 262,362
</TABLE>
RISK FACTORS
An investment in the Company's Common Stock involves a degree of risk. In
determining whether to make an investment in the Common Stock, potential
investors should consider carefully all of the information set forth and
incorporated into this Prospectus and, in particular, the following factors.
GENERAL ECONOMIC AND BUSINESS FACTORS
The Company's business is dependent upon a number of factors that may have
a material adverse effect on its results of operations, many of which are
beyond the Company's control. These factors include excess capacity in the
trucking industry, work stoppages by those Company employees who are members of
unions, significant increases or rapid fluctuations in fuel prices and interest
rates, to the extent not offset by increases in freight rates or
7
<PAGE> 12
fuel surcharges. The Company's results of operations also are affected by
global and national economic cycles and in customers' business cycles. In
addition, the Company's results of operations are affected by seasonal factors
such as post-holiday reductions in shipments and increased operating costs and
higher fuel consumption in colder weather due to increased idle time.
COMPETITION
The trucking industry is extremely competitive and fragmented. The
Company competes with many other LTL carriers of varying sizes and, to a lesser
extent, with truckload carriers. Regional LTL carriers, including the
Company's trucking subsidiaries, principally compete against other regional LTL
carriers. To a lesser extent, they compete against interregional and long-haul
LTL carriers, and overnight package companies. Significant barriers to entry
into the regional LTL market exist as a result of the substantial capital
requirements for terminals and revenue equipment and the need for a large,
well-coordinated and skilled work force. In response to recent industry
over-capacity, many LTL carriers have adopted discounting programs for shipping
customers. Additionally, when new LTL competitors enter a geographic region,
they often offer discounted prices to lure customers away from the Company's
trucking subsidiaries. Such attempts to gain market share through rate
reduction programs exert downward pressure on the industry's price structure
and profit margins and have caused many LTL carriers to cease operations.
ACQUISITIONS
The growth of the Company has been, and may continue to be, dependent in
part upon the acquisition of small-to-medium sized trucking and logistics
companies throughout the United States. To date, the Company has been
successful in identifying companies to acquire and in integrating such
companies' operations into the Company's operations. The Company may face
competition from transportation companies or other third parties for
acquisition opportunities that become available. There can be no assurance
that the Company will identify further acquisition candidates that will result
in successful combinations in the future. Any future acquisitions by the
Company may result in the incurrence of additional debt and amortization of
expenses related to goodwill and other intangible assets, which could adversely
affect the Company's profitability, or could involve the potentially dilutive
issuance of additional equity securities. In addition, acquisitions involve
numerous risks, including difficulties in the assimilation of the acquired
company's operations, particularly in the period immediately following the
consummation of such transactions, the diversion of the attention of the
Company's management from other business concerns, the risk of entering into
markets in which the Company has had no or only limited direct experience, and
the potential loss of customers, key employees and drivers of the acquired
company, all of which could have a material adverse effect on the Company's
business and operating results. Although the Company does not have any
commitments with respect to any acquisitions as of the date of this Prospectus,
the Company continually evaluates acquisition opportunities as part of its
growth strategy.
REGULATION
The Company is regulated by the United States Department of Transportation
and by various state agencies. These regulatory authorities exercise broad
powers, generally governing activities such as authorization to engage in motor
carrier operations, operations, safety, financial reporting, and certain
mergers, consolidations and acquisitions. In addition, the Company's
operations are subject to various environmental laws and regulations dealing
with the transportation, storage, presence, use, disposal and handling of
hazardous materials, discharge of stormwater and underground fuel storage
tanks. If the Company suffers a spill or other accident involving hazardous
substances or if the Company were found to be in violation of applicable laws
or regulations, it could have a material adverse effect on the Company's
business and operating results.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including all documents incorporated herein by reference
contains forward-looking statements. Additional written or oral
forward-looking statements may be made by the Company from time to time in
filings with the Securities and Exchange Commission or otherwise. The words
"believe," "expect," "anticipate,"
8
<PAGE> 13
and "project" and similar expressions identify forward-looking statements,
which speak only as of the date the statement is made. Such forward-looking
statements are within the meaning of that term in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Such statements may include, but are not limited to,
information regarding revenues, income or loss, capital expenditures,
acquisitions, plans for future operations, financing needs or plans, the impact
of inflation and plans relating to services of the Company, as well as
assumptions relating to the foregoing. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified. Future events and actual results could differ
materially from those set forth in, contemplated by, or underlying the
forward-looking statements. Statements in this Prospectus, including those set
forth in "Risk Factors," and in "Business" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report on Form 10-K for the year ended December 30, 1995, which is
incorporated by reference herein, describe factors, among others, that could
contribute to or cause such differences.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
2,700,000 shares of Common Stock offered by the Company are estimated to be
approximately $_________ (approximately $___________ if the Underwriters'
over-allotment option is exercised in full), after deducting underwriting
discounts and estimated expenses of the offering. The Company intends to apply
the net proceeds of this offering to reduce its outstanding indebtedness under
its existing revolving credit facility. This credit facility, which had an
outstanding principal balance of $89.0 million at September 28, 1996, bears a
rate of interest based on LIBOR and expires on September 30, 1999. The
weighted average rate of interest on the outstanding balance at September 28,
1996 was 5.77%. The Company may in the future use amounts available under the
credit facility for general corporate and working capital purposes, including
investments in capital equipment and to fund acquisitions. Pending the use of
proceeds as described above, the net proceeds will be invested in short-term
interest bearing securities.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under
the trading symbol "USFC." The following table sets forth the quarterly high
and low sales prices of the Company's Common Stock as reported by the Nasdaq
National Market. The last sale price of the Common Stock on January 10, 1997
was $27.250 per share.
HIGH LOW
------- -------
1995
- ----
First Quarter ....................................... $28.688 $20.500
Second Quarter ...................................... $25.000 $18.125
Third Quarter ....................................... $24.375 $17.750
Fourth Quarter ...................................... $21.125 $16.250
HIGH LOW
------- -------
1996
- ----
First Quarter ....................................... $23.250 $18.250
Second Quarter ...................................... $24.250 $19.375
Third Quarter ....................................... $22.500 $16.750
Fourth Quarter ...................................... $28.250 $19.500
As of November 11, 1996, there were 22,545,210 shares of Common Stock
outstanding, which were held by approximately ____ stockholders of record.
9
<PAGE> 14
DIVIDEND POLICY
Since July 2, 1992, the Company has paid a quarterly dividend of $0.093333
per share. Although it is the present intention of the Company to continue
paying quarterly dividends, the timing, amount and form of future dividends
will be determined by the board of directors and will depend, among other
things, on the Company's results of operations, financial condition, cash
requirements, certain legal requirements and other factors deemed relevant by
the board of directors.
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth the selected consolidated financial data
for the Company. The selected "Statement of Operations Data" and "Balance
Sheet Data" presented below for, and as of the end of, each of the years in the
five-year period ended December 30, 1995 are derived from consolidated
financial statements of the Company, which consolidated financial statements
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants. The selected "Statement of Operations Data" and "Balance Sheet
Data" presented below for, and as of, the nine months ended September 30, 1995
and September 28, 1996 are derived from the unaudited interim consolidated
condensed financial statements of the Company which, in the opinion of
management, have been prepared on the same basis as the audited consolidated
financial statements and include all adjustments, consisting only of normal
recurring adjustments, which management considers necessary for a fair
presentation of the financial data shown. The results of operations for the
nine months ended September 28, 1996 are not necessarily indicative of the
results to be expected for the year ended December 30, 1996. This information
should be read in conjunction with the consolidated financial statements and
the notes thereto incorporated herein by reference and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included in the
Company's Annual Report on Form 10-K for the year ended December 30, 1995 and
in the Company's Quarterly Report on Form 10-Q for the quarter ended September
28, 1996, both of which are incorporated by reference herein.
<TABLE>
<CAPTION>
----------------------------------------------------------- ------------------------
AS OF AND FOR AS OF AND FOR
FISCAL YEAR ENDED NINE MONTHS ENDED
(UNAUDITED)
----------------------------------------------------------- ------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS
DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 SEPT. 30 SEPT. 28
1991 1993 1994 1994 1995 1995 1996
-------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating Revenue $649,775 $774,678 $898,920 $1,016,464 $1,144,458 $856,080 $988,997
Operating expenses:
Salaries, wages and benefits 419,062 497,375 568,891 633,197 733,441 546,207 630,513
Purchased transportation 18,194 26,829 31,526 42,427 43,763 33,163 35,863
Operating expenses and supplies 83,621 97,729 109,525 125,936 144,702 107,655 133,592
Operating taxes and licenses 25,024 29,808 35,682 42,101 48,585 36,234 41,932
Insurance claims 11,745 13,369 16,039 18,012 17,556 13,749 17,010
Communication and utilities 9,387 10,024 10,489 12,247 13,337 9,937 11,475
Depreciation and equipment leases 34,036 37,623 44,209 47,519 50,866 37,332 48,099
Building and office equipment
rents 9,021 10,690 11,361 13,485 13,283 9,962 11,554
Amortization of intangible assets 6,487 5,391 3,038 3,020 2,583 2,001 1,821
Other operating expenses 5,833 6,339 6,938 8,854 8,799 6,615 6,967
-------- ---------- --------- ------------ ---------- ---------- -----------
Total operating expenses 622,410 735,177 837,698 946,798 1,076,915 802,855 938,826
-------- ---------- --------- ------------ ---------- ---------- -----------
Income from operations 27,365 39,501 61,222 69,666 67,543 53,225 50,171
-------- ---------- --------- ------------ ---------- ---------- -----------
Non-operating income (expense):
Interest expense (2,546) (2,024) (7,621) (9,081) (8,884) (6,491) (9,072)
Interest income 2,515 392 230 664 707 543 488
</TABLE>
10
<PAGE> 15
<TABLE>
<CAPTION>
-------------------------------------------------------- --------------------
AS OF AND FOR AS OF AND FOR
FISCAL YEAR ENDED NINE MONTHS ENDED
(UNAUDITED)
--------------------------------------------------------- --------------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS
DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 SEPT. 30 SEPT. 28
1991 1993 1994 1994 1995 1995 1996
-------- ---------- ---------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Other, net (210) (1,067) (1,683) (2,011) (878) (537) (516)
------- --------- ------- -------- ------- ------- -------
Total non-operating expenses (241) (2,699) (9,074) (10,428) (9,055) (6,485) (9,100)
------- --------- ------- -------- ------- ------- -------
Net income from continuing
operations before income taxes 27,124 36,802 52,148 59,238 58,488 46,740 41,071
Income tax expense (12,310) (15,998) (23,603) (25,882) 25,150) (20,098) (17,561)
------- --------- ------- -------- ------- ------- -------
Net income from continuing
operations 14,814 20,804 28,545 33,356 33,338 26,642 23,510
Discontinued operations, net 58 288 (1,197) -- -- -- --
Extraordinary item, net -- -- -- (1,291) -- -- --
Cumulative effect of accounting change
for income taxes -- (14,190) -- -- -- -- --
------- --------- ------- -------- ------- ------- -------
Net income $14,872 $6,902 $27,348 $32,065 $33,338 $26,642 $23,510
======= ========= ======= ======== ======= ======= =======
Net income per share from
continuing operations $0.59 $0.78 $1.25 $1.51 $1.51 $1.20 $1.05
Net income per share $0.59 $0.26 $1.20 $1.45 $1.51 $1.20 $1.05
Average shares outstanding 25,200 26,882 22,853 22,142 22,123 22,144 22,312
BALANCE SHEET DATA:
Working capital $23,442 $23,680 $25,140 $26,168 $30,127 $30,215 $57,394
Total assets 388,447 406,837 460,780 501,002 578,194 569,604 698,359
Long-term obligations, less current
portion 12,691 47,024 124,085 105,667 137,333 126,417 189,111
Stockholders' equity 205,780 229,779 180,509 208,094 233,152 227,935 262,362
</TABLE>
11
<PAGE> 16
MANAGEMENT
The following table sets forth information with respect to the directors
and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------- --- ----------------------------------
<S> <C> <C>
Morley Koffman 66 Chairman of the Board of Directors
John Campbell Carruth 66 Chief Executive Officer,
President and Director
William N. Weaver, Jr. 62 Director
Robert P. Neuschel 78 Director
Neil A. Springer 58 Director
Robert V. Delaney 61 Director
John W. Puth 68 Director
Christopher L. Ellis 52 Senior Vice President, Finance
and Chief Financial Officer
</TABLE>
MORLEY KOFFMAN, has been a director of the Company since December 1991. He was
elected Chairman of the Board in January of 1992. Mr. Koffman was a member of
the law firm of Freeman & Company of Vancouver, British Columbia until March
31, 1993. Effective April 1, 1993, he became a member of Koffman Birnie &
Kalef. Mr. Koffman is a director of Ainsworth Lumber Co. Ltd. and Westar Group
Ltd.
JOHN CAMPBELL CARRUTH, was appointed as the Company's Chief Executive Officer
and President in June 1991 and has been a director of the Company since
December 1991. Mr. Carruth was Chief Executive Officer and President of TNT
Transport Group Inc., a subsidiary of TNT Limited, the Company's former parent
corporation, from 1985 to 1992.
WILLIAM N. WEAVER, JR., has been a director of the Company and the Company's
Assistant Secretary since March 1992. Mr. Weaver is a member of the law firm
of Sachnoff & Weaver, Ltd., an Illinois professional corporation, which is
outside counsel to the Company. Mr. Weaver has practiced law in the State of
Illinois since 1964 and serves as a director of System Software Associates,
Inc. as well as several privately-held corporations. He holds an A.B. degree
from Oberlin College and a J.D. from John Marshall Law School.
ROBERT P. NEUSCHEL, has been a director of the Company since December 1991.
Since 1978, Professor Neuschel has been Professor of Management at the J. L.
Kellogg Graduate School of Management, where he is currently Professor of
Corporate Governance and Associate Dean for Advisory Board Relations. From
1978 to December 1991, he was Managing Director of the Transportation Center at
Northwestern University.
NEIL A. SPRINGER, has been a director of the Company since December 1991. He
has been Managing Director of Springer Souder & Associates since June 1994. He
was Senior Vice President of Slayton International Inc. From September 1992 to
May 1994. He was President-Central Region of Alexander Proudfoot Company from
August 1991 to August 1992. Mr. Springer is a director of Idex Corporation and
Dorsey Trailers, Inc.
ROBERT V. DELANEY, has been a director of the Company since December 1991. Mr.
Delaney has been an Executive Vice President of Cass Information Systems since
January 1990.
12
<PAGE> 17
JOHN W. PUTH, has been a director of the Company since January 1992. Mr. Puth
has been President of J. W. Puth Associates since December 1987, Chairman of
American Lantern since December 1987, and Chairman of the Executive Committee
of Sullivan Graphics since June 1992. Mr. Puth is a director of A.M. Castle &
Co., Allied Products Co., Brockway Standard Holdings Corporation, L. B. Foster
Inc., Lindberg Corporation, System Software Associates, Inc. and several
private manufacturing companies.
CHRISTOPHER L. ELLIS, has been Senior Vice President, Finance and Chief
Financial Officer of the Company since June 1991. Previously, he served as
Vice President, Finance for the predecessor corporation of the Company.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
among the Company and the Underwriters (the "Underwriting Agreement"), the
Company has agreed to sell to each of the Underwriters named below (the
"Underwriters"), and each of the Underwriters has severally agreed to purchase
from the Company, the aggregate number of shares of Common Stock set forth
opposite its name below:
NUMBER OF
UNDERWRITERS SHARES
- ------------ ---------
Merrill Lynch, Pierce, Fenner & Smith.
Incorporated.............................
Schroder Wertheim & Co. Incorporated.................
---------
Total.................................... 2,700,000
=========
In the Underwriting Agreement, the Underwriters have severally agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Common Stock offered hereby (other than those subject to the
over-allotment option described below) if any are purchased.
The Company has been advised by the Underwriters that the Underwriters
propose initially to offer the shares of Common Stock to the public at the
public offering price set forth on the cover page of this Prospectus, and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $ per share to certain other dealers. After
commencement of the offering, the price to the public and concessions to
dealers may be changed.
The Company has granted the Underwriters an option, exercisable within 30
days of the date of this Prospectus, to purchase up to 405,000 additional
shares of Common Stock to cover over-allotments, if any, at the price to the
public less the underwriting discount set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, in whole
or in part, each Underwriter will have a firm commitment, subject to certain
conditions, to purchase the same proportion of the option shares that the
number of shares of Common Stock to be purchased by such Underwriter in the
above table bears to the total number of shares of Common Stock offered by the
Underwriters hereby.
The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, or contribute to payments the Underwriters may be required to
make in respect thereof.
The Company has agreed with the Underwriters that they will not offer,
sell or contract to sell, or otherwise dispose of, directly or indirectly, or
announce an offering of, any shares of Common Stock or any securities
convertible into, or exchangeable for, shares of Common Stock or any securities
convertible into, or exchangeable
13
<PAGE> 18
for, shares of Common Stock for a period of 90 days from the date of this
Prospectus, without the prior written consent of Merrill Lynch & Co., except
for grants of options and issuance and sales of Common Stock issued pursuant to
any existing stock option or other benefit or incentive plans maintained for
its officers, directors or employees or the issuance of Common Stock in
connection with acquisitions.
In connection with this offering, certain Underwriters may engage in
passive market making transactions in the Common Stock on the Nasdaq National
Market in accordance with Rule 10b-6A under the Exchange Act, during the two
business day period before commencement of offers or sales of the Common Stock
offered hereby. Passive market making transactions must comply with certain
volume and price limitations and be identified as such. In general, a passive
market maker may display its bid at a price not in excess of the highest
independent bid for the security and if all independent bids are lowered below
the passive market maker's bid then such bid must be lowered when certain
purchase limits are exceeded.
LEGAL MATTERS
The validity of the shares of Common Stock and certain other legal matters
in connection with the offering will be passed upon for the Company by Sachnoff
& Weaver, Ltd., Chicago, Illinois. Mr. William N. Weaver, Jr., a shareholder
of Sachnoff & Weaver, Ltd. serves as a director of the Company. Certain legal
matters relating to this offering will be passed upon for the Underwriters by
Winston & Strawn, Chicago, Illinois.
EXPERTS
The consolidated financial statements of USFreightways Corporation as of
December 30, 1995 and December 31, 1994 and for each of the years in the
three-year period ended December 30, 1995 have been incorporated herein by
reference in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, also incorporated by reference herein, and given
upon the authority of said firm as experts in accounting and auditing.
14
<PAGE> 19
BACK INSIDE COVER
[Pictures of Company Facilities]
<PAGE> 20
No dealer, salesperson or other individual has been authorized to give any
information or to make any representation other than those contained or
incorporated by reference in this Prospectus in connection with the offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or the
Underwriters. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstance, create any implication that there has
been no change in the affairs of the Company since the date as of which
information is given in this Prospectus. This Prospectus does not constitute
an offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to anyone to whom it is unlawful
to make such offer or solicitation.
______________________
TABLE OF CONTENTS
PAGE
Available Information.....................................
Information Incorporated
by Reference............................................
Prospectus Summary........................................
The Company...............................................
Summary of Consolidated Financial
and Operating Information...............................
Risk Factors..............................................
Use of Proceeds...........................................
Price Range of Common Stock...............................
Dividend Policy...........................................
Selected Consolidated Financial Data......................
Management................................................
Underwriting..............................................
Legal Matters.............................................
Experts...................................................
2,700,000 SHARES
USFREIGHTWAYS CORPORATION
COMMON STOCK
($.01 PAR VALUE)
______________________
P R O S P E C T U S
______________________
MERRILL LYNCH & CO.
SCHRODER WERTHEIM & CO.
______________________
_____________, 1997
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses (other than
underwriting discounts and commissions) payable by the Company in connection
with the sale of the Common Stock being registered hereby. All of the amounts
shown are estimated, except the SEC registration fee, the NASD filing fee and
the Nasdaq National Market supplemental listing fee.
SEC registration fee ................................ $28,074.00
NASD filing fee ..................................... 8,922.00
(+)Nasdaq National Market supplemental listing fee .. --
(+)Printing expenses ................................ --
(+)Legal fees and expenses .......................... --
(+)Accounting fees and expenses ..................... --
(+)Blue Sky fees and expenses ....................... --
(+)Miscellaneous expenses ........................... --
Total ....................................... $
==========
- ---------------
(+) To be filed by Amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
permits indemnification of directors, officers, employees and agents of
corporations under certain conditions and subject to certain limitations.
Section 13.1 of Article Thirteen of the Company's By-Laws provides for
indemnification of any director, officer, employee or agent of the Company, or
any person serving in the same capacity in any other enterprise at the request
of the Company, under certain circumstances. Article Six of the Company's
Amended and Restated Certificate of Incorporation eliminates the liability of
directors of the Company under certain circumstances for breaches of fiduciary
duty to the Company and its shareholders.
Directors and officers of the Company are insured, at the expense of the
Registrant, against certain liabilities which might arise out of their
employment and which might not be subject to indemnification under the By-Laws.
II-1
<PAGE> 22
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed herewith or incorporated herein by
reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------ -----------------------
1.1 Form of Underwriting Agreement
4.2 Form of Indenture dated as of May 1, 1993 between
USFreightways Corporation (formerly known as TNT Freightways
Corporation) and Harris Trust and Savings Bank, as Trustee
(incorporated by reference from USFreightways Corporation's
Registration Statement on Form S-1, filed on April 16, 1993,
Registration No. 33-61134.
(+)5 Opinion of Sachnoff & Weaver, Ltd.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5)
24 Powers of Attorney (included on signature page)
- ---------------
(+) To be filed by Amendment.
ITEM 17 UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts 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; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this 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 therein, 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.
II-2
<PAGE> 23
In addition, the Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company'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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company 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 Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, USFreightways
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this Registration Statement 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 Rosemont, State of
Illinois, on January 10, 1997.
USFREIGHTWAYS CORPORATION
By: /s/ John Campbell Carruth
----------------------------------
John Campbell Carruth,
Chief Executive Officer, President
and Director
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and appoints,
John Campbell Carruth and Christopher L. Ellis, and each of them, with full
power of substitution and full power to act without the other, as his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for such person and in such person's name, place and stead, and
to execute in the name on behalf of each person, individually and in each
capacity stated below, and to sign and file any and all amendments to this
Registration Statement with the Securities and Exchange Commission.
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 the dates indicated:
Signature Title Date
- -------------------------- ------------------------------ ----------------
/s/ Morley Koffman Chairman of the Board January 10, 1997
- -------------------------- of Directors
Morley Koffman
/s/ John Campbell Carruth Chief Executive Officer, January 10, 1997
- -------------------------- President and Director
John Campbell Carruth (Principal Executive Officer)
/s/ William N. Weaver, Jr. Director January 10, 1997
- --------------------------
William N. Weaver, Jr.
/s/ Robert P. Neuschel Director January 10, 1997
- --------------------------
Robert P. Neuschel
/s/ Neil A. Springer Director January 10, 1997
- --------------------------
Neil A. Springer
/s/ Robert V. Delaney Director January 10, 1997
- --------------------------
Robert V. Delaney
/s/ John W. Puth Director January 10, 1997
- --------------------------
John W. Puth
/s/ Christopher L. Ellis Senior Vice President, January 10, 1997
- -------------------------- Finance and Chief
Christopher L. Ellis Financial Officer
(Principal Financial Officer)
/s/ Robert S. Owen Controller January 10, 1997
- -------------------------- (Principal Accounting Officer)
Robert S. Owen
<PAGE> 25
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- ------------------------------
1.1 Form of Underwriting Agreement
4.2 Form of Indenture dated as of May 1, 1993 between
USFreightways Corporation (formerly known as TNT Freightways
Corporation) and Harris Trust and Savings Bank, as Trustee
(incorporated by reference from USFreightways Corporation's
Registration Statement on Form S-1, filed on April 16, 1993,
Registration No. 33-61134.
(+)5 Opinion of Sachnoff & Weaver, Ltd.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5)
24 Powers of Attorney (included on signature page)
- ---------------
(+) To be filed by Amendment.
<PAGE> 1
USFREIGHTWAYS CORPORATION
(a Delaware corporation)
2,700,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: ________, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 3
(a) Representations and Warranties by the Company . . . . . . . . . . . . . 3
(i) Compliance with Registration Requirements . . . . . . . . . . . 3
(ii) Incorporated Documents . . . . . . . . . . . . . . . . . . . . 4
(iii) Independent Accountants . . . . . . . . . . . . . . . . . . . . 4
(iv) Financial Statements . . . . . . . . . . . . . . . . . . . . . 4
(v) No Material Adverse Change in Business . . . . . . . . . . . . 4
(vi) Good Standing of the Company . . . . . . . . . . . . . . . . . 5
(vii) Good Standing of Subsidiaries . . . . . . . . . . . . . . . . . 5
(viii) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 5
(ix) Authorization of Agreement . . . . . . . . . . . . . . . . . . 5
(x) Authorization and Description of Securities . . . . . . . . . . 6
(xi) Absence of Defaults and Conflicts . . . . . . . . . . . . . . . 6
(xii) Absence of Labor Dispute . . . . . . . . . . . . . . . . . . . 6
(xiii) Absence of Proceedings . . . . . . . . . . . . . . . . . . . . 7
(xiv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . . . . . 7
(xv) Possession of Intellectual Property . . . . . . . . . . . . . . 7
(xvi) Absence of Further Requirements . . . . . . . . . . . . . . . . 7
(xvii) Possession of Licenses and Permits . . . . . . . . . . . . . . 8
(xviii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . 8
(xix) Compliance with Cuba Act . . . . . . . . . . . . . . . . . . . 8
(xx) Investment Company Act . . . . . . . . . . . . . . . . . . . . 8
(xxi) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 9
(b) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2. Sale and Delivery to Underwriters; Closing . . . . . . . . . . . . . . . 9
(a) Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Option Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3. Covenants of the Company. . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Compliance with Securities Regulations and Commission Requests . . . . . 11
(b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(c) Delivery of Registration Statements . . . . . . . . . . . . . . . . . . 11
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . . . . . . 12
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . . . . 12
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . . . . . . 12
(g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
-i-
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . 13
(k) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5. Conditions of Underwriters' Obligations . . . . . . . . . . . . . . . . 14
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . . . . 14
(b) Opinion of Counsel for Company . . . . . . . . . . . . . . . . . . . . . 14
(c) Opinion of Counsel for Underwriters . . . . . . . . . . . . . . . . . . 15
(d) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . . . . . . 15
(f) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(h) No Objection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(i) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(j) Conditions to Purchase of Option Securities . . . . . . . . . . . . . . 16
(i) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 16
(ii) Opinion of Counsel for Company . . . . . . . . . . . . . . . . 16
(iii) Opinion of Counsel for Underwriters . . . . . . . . . . . . . . 16
(iv) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . 16
(k) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(l) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Indemnification of Underwriters . . . . . . . . . . . . . . . . . . . . 17
(b) Indemnification of Company, Directors and Officers . . . . . . . . . . . 18
(c) Actions against Parties; Notification . . . . . . . . . . . . . . . . . 18
(d) Settlement without Consent if Failure to Reimburse . . . . . . . . . . . 19
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery . . . . . 20
SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Termination; General . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 10. Default by One or More of the Underwriters . . . . . . . . . . . . . . . 21
SECTION 11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
SECTION 12. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 13. Governing Law and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 14. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SCHEDULES
Schedule A - List of Underwriters . . . . . . . . . . . . . . . Sch A-1
Schedule B - Pricing Information . . . . . . . . . . . . . . . Sch B-1
Schedule C - List of Subsidiaries . . . . . . . . . . . . . . . Sch C-1
Schedule D - List of Persons subject to Lock-up . . . . . . . . Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel and Form of
Opinion of Company's Special Regulatory Counsel . . A-1
Exhibit B - Form of Lock-up Letter . . . . . . . . . . . . . . . . B-1
</TABLE>
-iii-
<PAGE> 5
Draft of 1/7/97
USFREIGHTWAYS CORPORATION
(a Delaware corporation)
2,700,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
__________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Schroder Wertheim & Co. Incorporated
as Representative(s) of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
USFreightways Corporation, a Delaware corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named
in Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch and Schroder Wertheim & Co. Incorporated are
acting as representative(s) (in such capacity, the "Representative(s)"), with
respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("Common
Stock") set forth in said Schedule A, and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 405,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 2,700,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 405,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities".
<PAGE> 6
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative(s) deem(s) advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-_____) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule
424(b). The information included in such prospectus or in such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is
herein called the "Prospectus." If Rule 434 is relied on, the term "Prospectus"
shall refer to the preliminary prospectus dated ______________, 1997 together
with the Term Sheet and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the
-2-
<PAGE> 7
filing of any document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto
[(including any prospectus wrapper)], at the time the Prospectus or
any such amendment or supplement was issued and at the Closing Time
(and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the
-3-
<PAGE> 8
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. The documents incorporated
or deemed to be incorporated by reference in the Registration
Statement and the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the Prospectus,
at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time (and if any Option
Securities are purchased, at the Date of Delivery), did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules included
in the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements
included in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to be
stated therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that
of the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the
Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
-4-
<PAGE> 9
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) and ____________, __________ and _________ (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse Effect; except
as otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.
The only subsidiaries of the Company are (a) the subsidiaries listed
on Schedule C hereto and (b) certain other subsidiaries which,
considered in the aggregate as a single Subsidiary, do not constitute
a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
-5-
<PAGE> 10
(x) Authorization and Description of Securities. The
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectus and such description conforms to
the rights set forth in the instruments defining the same; no holder
of the Securities will be subject to personal liability by reason of
being such a holder; and the issuance of the Securities is not subject
to the preemptive or other similar rights of any securityholder of the
Company.
(xi) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
including, without limitation, the Interstate Commerce Commission
("ICC"), the United States Department of Transportation ("DOT") or any
applicable state highway and transportation agency, having
jurisdiction over the Company or any subsidiary or any of their
assets, properties, or operations. As used herein, a "Repayment
Event" means any event or condition that gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company
or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees
-6-
<PAGE> 11
of any of its or any subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, including, without
limitation, the ICC, the DOT or any applicable state highway and
transportation agency, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, that is required to be disclosed in the Registration
Statement (other than as disclosed therein), or that might reasonably
be expected to result in a Material Adverse Effect, or that might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of
its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject that are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents that are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto that have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances that would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance
or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
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(xvii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies, including, without limitation, the ICC, the DOT
and any applicable state highway and transportation agencies, that are
necessary to conduct the business now operated by them; the Company
and its subsidiaries are in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force
and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; neither the Company
nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses that singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect; and neither the Company nor any of its subsidiaries is
in violation of any law, ordinance, administrative or governmental
rule or regulation or court decree applicable to it, including,
without limitation, the ICC, the DOT or any applicable state highway
and transportation agency, that singly or in the aggregate would
result in a Material Adverse Effect.
(xviii) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any
kind except such as (a) are described in the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the
Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither
the Company nor any subsidiary has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company
or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the
rules and regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(xx) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
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(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no pending
or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are
no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating
to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its subsidiaries delivered to the Representative(s) or
to counsel for the Underwriters shall be deemed a representation and warranty
by the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities that such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
375,000 shares of Common Stock at the price per share set forth in Schedule B,
less an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days
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after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments that may be made in
connection with the offering and distribution of the Initial Securities upon
notice by the Representative(s) to the Company setting forth the number of
Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the Representative(s), but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the
total number of Initial Securities, subject in each case to such adjustments as
the Representative(s) in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Sachnoff & Weaver, Ltd., 30 S. Wacker Dr., 29th Floor, Chicago, Illinois, or at
such other place as shall be agreed upon by the Representative(s) and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representative(s) and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representative(s) and the Company, on each Date of Delivery as specified in the
notice from the Representative(s) to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the Representative(s) for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative(s), for its account, to
accept delivery of, receipt for, and make payment of the purchase price for,
the Initial Securities and the Option Securities, if any, that it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Representative(s) may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the
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Option Securities, if any, will be made available for examination and packaging
by the Representative(s) in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Representative(s) immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take
such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Filing of Amendments. The Company will give the
Representative(s) notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the
Representative(s) with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the
Representative(s) or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representative(s) and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative(s), without
charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be
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<PAGE> 16
identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered
to each Underwriter, without charge, as many copies of each
preliminary prospectus as such Underwriter reasonably requested, and
the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will
be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in
this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel
for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its
best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Representative(s) may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
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<PAGE> 17
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to
effect and maintain the quotation of the Securities on the Nasdaq
National Market and will file with the Nasdaq National Market all
documents and notices required by the Nasdaq National Market of
companies that have securities that are traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National
Market.
(j) Restriction on Sale of Securities. During a period
of 120 days from the date of the Prospectus, the Company will not,
without the prior written consent of Merrill Lynch, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Securities to be sold hereunder, (B) any shares of
Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof
and referred to in the Prospectus, (C) any shares of Common Stock
issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company referred to in the
Prospectus or (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the
period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, will file all documents required to be filed with
the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
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originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to
the Underwriters, including any stock or other transfer taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the Securities to
the Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities and (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Market.
(b) Termination of Agreement. If this Agreement is terminated by
the Representative(s) in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy
of the representations and warranties of the Company contained in Section 1
hereof or in certificates of any officer of the Company or any subsidiary of
the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a
Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinions of Counsel for Company. At Closing Time,
the Representative(s) shall have received the favorable opinions,
dated as of Closing Time, of (i) Sachnoff &
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Weaver, Ltd., counsel for the Company, and (ii) [ ],
special regulatory counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters
each to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing
Time, the Representative(s) shall have received the favorable opinion,
dated as of Closing Time, of Winston & Strawn, counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters with respect to the matters set
forth in clauses (i), (ii), (v), (vi) (solely as to preemptive or
other similar rights arising by operation of law or under the charter
or by-laws of the Company), (viii) through (x), inclusive, (xiii),
(xv) (solely as to the information in the Prospectus under
"Description of Capital Stock --Common Stock") and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, and the federal law of
the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the
Representative(s). Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representative(s) shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Representative(s) shall have received
from KPMG Peat Marwick LLP a letter dated such date, in form and
substance satisfactory to the Representative(s), together with signed
or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
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(f) Bring-down Comfort Letter. At Closing Time, the
Representative(s) shall have received from KPMG Peat Marwick LLP a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities
shall have been approved for inclusion in the Nasdaq National Market,
subject only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness
of the underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement,
the Representative(s) shall have received an agreement substantially
in the form of Exhibit B hereto signed by the persons listed on
Schedule D hereto.
(j) Conditions to Purchase of Option Securities. In the
event that the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and
the statements in any certificates furnished by the Company or any
subsidiary of the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representative(s) shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting officer
of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(d) hereof remains true
and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable
opinions of (i) Sachnoff & Weaver, Ltd., counsel for the
Company, and (ii) [ ], special regulatory
counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise each to the same effect as the
opinions required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Winston & Strawn, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities
to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from KPMG Peat
Marwick LLP, in form and substance satisfactory to the
Representative(s) and dated such Date of
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Delivery, substantially in the same form and substance as the
letter furnished to the Representative(s) pursuant to Section
5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each
Date of Delivery, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in
form and substance to the Representative(s) and counsel for the
Underwriters.
(l) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as required to
be fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is after
the Closing Time, the obligations of the several Underwriters to
purchase the relevant Option Securities, may be terminated by the
Representative(s) by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened,
-17-
<PAGE> 22
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability that it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to
Section 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of
-18-
<PAGE> 23
more than one counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) (ii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein; then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet, bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
-19-
<PAGE> 24
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
-20-
<PAGE> 25
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative(s) may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which
is such as to make it, in the judgment of the Representative(s), impracticable
to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the Nasdaq National
Market, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities that it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representative(s) shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representative(s)
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the number of Securities to be purchased on such date, each of
the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Underwriters to purchase
-21-
<PAGE> 26
and of the Company to sell the Option Securities to be purchased and
sold on such Date of Delivery shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the Representative(s) or the
Company shall have the right to postpone Closing Time or the relevant Date of
Delivery, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to the Representative(s) at North Tower,
World Financial Center, New York, New York 10281-1201 and notices to the
Company shall be directed to it at 9700 Higgins Road, Suite 570, Rosemont,
Illinois 60018, attention of John Campbell Carruth.
SECTION 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts,
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<PAGE> 27
will become a binding agreement between the Underwriters and the Company in
accordance with its terms.
Very truly yours,
USFREIGHTWAYS CORPORATION
By_____________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SCHRODER WERTHEIM & CO. INCORPORATED
BY: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By___________________________________
Authorized Signatory
For themselves and as Representative(s) of the other Underwriters named in
Schedule A hereto.
-23-
<PAGE> 28
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial
Name of Underwriter Securities
------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . .
Schroder Wertheim & Co. Incorporated . . . . . . . . . . . . .
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,700,000
=============
</TABLE>
Sch A-1
<PAGE> 29
SCHEDULE B
USFREIGHTWAYS CORPORATION
2,700,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $________.
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $_______, being an amount equal to the
initial public offering price set forth above less $_____ per share; provided
that the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial Securities but not payable on the
Option Securities.
Sch B-1
<PAGE> 30
SCHEDULE C
List of Subsidiaries
Sch C-1
<PAGE> 31
SCHEDULE D
List of Persons and entities
subject to Lock-up
Sch D-1
<PAGE> 32
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect.
(iv) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to the Purchase Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or pursuant
to the exercise of convertible securities or options referred to in the
Prospectus); the shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of
any securityholder of the Company.
(v) The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to the Purchase Agreement and, when
issued and delivered by the Company pursuant to the Purchase Agreement against
payment of the consideration set forth in the Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of the
Securities is or will be subject to personal liability by reason of being such
a holder.
(vi) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(vii) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the
A-1
<PAGE> 33
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement,
all of the issued and outstanding capital stock of each Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and, to
the best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock
of any Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary.
(viii) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectus, excluding the documents incorporated by
reference therein, and each amendment or supplement to the Registration
Statement and Prospectus, excluding the documents incorporated by reference
therein, as of their respective effective or issue dates (other than the
financial statements and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) The documents incorporated by reference in the
Prospectus (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no opinion),
when they were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the Commission thereunder.
(xii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws of
the Company and the requirements of the Nasdaq National Market.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the Company
or any subsidiary is subject, before or brought by any court or governmental
agency or body, domestic or foreign, that might reasonably be expected to
result in a Material Adverse Effect, or that might reasonably be expected to
materially and adversely affect
A-2
<PAGE> 34
the properties or assets thereof or the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xiv) The information in the Prospectus under [" "],
and in the Registration Statement under Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by us
and is correct in all material respects.
(xv) To the best of our knowledge, there are no statutes
or regulations that are required to be described in the Prospectus that are not
described as required.
(xvi) All descriptions in the Registration Statement of
contracts and other documents to which the Company or its subsidiaries are a
party are accurate in all material respects; to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xvii) To the best of our knowledge, neither the Company nor
any subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement
or instrument that is described or referred to in the Registration Statement or
the Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the
1933 Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which we need express no opinion) is necessary or required in connection with
the due authorization, execution and delivery of the Purchase Agreement or for
the offering, issuance, sale or delivery of the Securities.
(xix) The execution, delivery and performance of the
Purchase Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use Of Proceeds")
and compliance by the Company with its obligations under the Purchase Agreement
do not and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 1(a)(xi) of the Purchase Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to me, to which the Company
or any subsidiary is a party or by which it or any of them may be bound, or to
A-3
<PAGE> 35
which any of the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any subsidiary or any of their respective properties,
assets or operations.
(xx) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in
the 1940 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable) (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no statement),
at the time such Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we need make no statement), at the time the Prospectus was issued, at the time
any such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
A-4
<PAGE> 36
FORM OF OPINION OF COMPANY'S
SPECIAL REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) No consent, approval, authorization, order,
registration or qualification of or with the ICC or DOT is required with
respect to the sale of the Securities.
(ii) No consent, approval, authorization, order,
registration or qualification of or with any highway or transportation agency
having jurisdiction over the Company or any of its subsidiaries is required
with respect to the sale of the Securities (such counsel may rely on the
opinions of local counsel).
(iii) Each subsidiary of the Company to the best of our
knowledge holds all licenses, franchises, permits, authorizations, approvals
and orders of and from all governmental regulatory officials and bodies,
including the ICC, the DOT and any applicable state highway and transportation
agencies, that are necessary to own or lease their properties and conduct their
businesses as described in the Prospectus and are material to the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(iv) To the best of our knowledge and other than as set
forth in the Prospectus, neither the Company nor any of its subsidiaries is in
violation of any law, ordinance, administrative or governmental rule or
regulation or court decree applicable to it, including the ICC, the DOT or any
applicable state highway and transportation agency, or is not in compliance
with any term or condition of, or has failed to obtain, any license, permit,
franchise or other administrative or governmental authorization, including the
ICC, the DOT or any applicable state highway and transportation agency,
necessary to the ownership of its property or to the conduct of its business,
which violation, noncompliance or failure to obtain would individually or in
the aggregate have a material adverse effect on the consolidated financial
position, shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole.
A-5
<PAGE> 37
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(I)]
Exhibit B
______________, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
SCHRODER WERTHEIM & CO. INCORPORATED
as Representative(s) of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by USFreightways Corporation
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
USFreightways Corporation, a Delaware corporation (the "Company"), understands
that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and Schroder Wertheim & Co. Incorporated propose to enter
into a Purchase Agreement (the "Purchase Agreement") with the Company providing
for the public offering of shares (the "Securities") of the Company's common
stock, par value $.01 per share (the "Common Stock"). In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
[and an officer and/or director] of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 120 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common
B-1
<PAGE> 38
Stock, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature:
Print Name:
B-2
<PAGE> 39
Annex A
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
[We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations]
(i) in our opinion, the audited financial statements [and
the related financial statement schedules] included or incorporated by
reference in the Registration Statement and the Prospectus comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim consolidated financial statements of
the Company for the three month periods ended March 31, 1995 and March
30, 1996, the three and six month periods ended June 30, 1995 and June
29, 1996 and the three and nine month periods ended September 30, 1995
and September 28, 1996, included or incorporated by reference in the
Registration Statement and the Prospectus (collectively, the "10-Q
Financials"), a reading of the latest available unaudited interim
consolidated financial statements of the Company, a reading of the
minutes of all meetings of the stockholders and directors of the
Company and its subsidiaries and the _____________________ and
_______________________ Committees of the Company's Board of Directors
[and any subsidiary committees] since December 31, 1995, inquiries of
certain officials of the Company [and its subsidiaries] responsible
for financial and accounting matters, a review of interim financial
information in accordance with standards established by the American
Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with
respect to the nine month periods ended September 30, 1995 and
September 28, 1996 and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us
to believe that:
(A) the 10-Q Financials incorporated by reference in
the Registration Statement and the Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations applicable to unaudited financial statements
included in Form 10-Q or any material modifications should be
made to the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) at a specified date not more than five days
prior to the date of this Agreement, there was any change in
the capital stock of the Company [and its subsidiaries] or any
decrease in the stockholders' equity or net current assets of
the Company [and its subsidiaries] or any increase in the
long-term debt of the Company [and its subsidiaries,] in each
case as compared with amounts shown in the latest
Annex A-1
<PAGE> 40
balance sheet included in the Registration Statement, except
in each case for changes, decreases or increases that the
Registration Statement discloses have occurred or may occur;
or
(C) for the period from January 1, 1996 to a
specified date not more than five days prior to the date of
this Agreement, there was any decrease in net sales, or total
or per share amounts of net income, in each case as compared
with the comparable period in the preceding year, except in
each case for any decreases that the Registration Statement
discloses have occurred or may occur;
(iii) based upon the procedures set forth in clause (ii)
above and a reading of the Selected Consolidated Financial Data
included in the Registration Statement, nothing came to our attention
that caused us to believe that the Selected Consolidated Financial
Data included in the Registration Statement do not comply as to form
in all material respects with the disclosure requirements of Item 301
of Regulation S-K of the 1933 Act, that the amounts included in the
Selected Consolidated Financial Data are not in agreement with the
corresponding amounts in the audited consolidated financial statements
for the respective periods or that the financial statements not
included in the Registration Statement from which certain of such data
were derived are not in conformity with generally accepted accounting
principles;
(iv) we have compared the information in the Registration
Statement under selected captions with the disclosure requirements of
Regulation S-K of the 1933 Act and on the basis of limited procedures
specified herein, nothing came to our attention that caused us to
believe that this information does not comply as to form in all
material respects with the disclosure requirements of Items 302, 402
and 503(d), respectively, of Regulation S-K;
(v) in addition to the procedures referred to in clause
(ii) above, we have performed other procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data
and financial information appearing in the Registration Statement,
which are specified herein, and have compared certain of such items
with, and have found such items to be in agreement with, the
accounting and financial records of the Company.
Annex A-2
<PAGE> 1
EXHIBIT 23.1
The Board of Directors
USFreightways Corporation:
We consent to the use of our report dated January 17, 1996, except for note 1,
which is as of January 26, 1996, relating to the consolidated financial
statements of USFreightways Corporation as of December 30, 1995 and December
31, 1994, and for each of the years in the three-year period ended December 30,
1995 incorporated herein by reference and to the reference to our firm under
the heading "Experts" and "Selected Consolidated Financial Data" in the
prospectus.
Chicago, Illinois
January 10, 1997
