-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HYCHTvon/oayv8QB7d1opP0WZ4sSH3sor/N6O6rH5a+lfmDJ3s4lWEYgNxDBwebt b+s/LAdbRIGz4g9/vdcTLw== 0000912057-02-021632.txt : 20020522 0000912057-02-021632.hdr.sgml : 20020522 20020522171228 ACCESSION NUMBER: 0000912057-02-021632 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 36 FILED AS OF DATE: 20020522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STOREVERYTHING INC CENTRAL INDEX KEY: 0001173528 IRS NUMBER: 364426552 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-18 FILM NUMBER: 02660184 BUSINESS ADDRESS: STREET 1: P O BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROSOURCE PROPERTIES LTD CENTRAL INDEX KEY: 0001173529 IRS NUMBER: 341793575 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-19 FILM NUMBER: 02660185 BUSINESS ADDRESS: STREET 1: P O BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIRVA RELOCATION LLC CENTRAL INDEX KEY: 0001173531 IRS NUMBER: 300066709 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-16 FILM NUMBER: 02660181 BUSINESS ADDRESS: STREET 1: 6070 PARKLAND DRIVE CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 BUSINESS PHONE: 4406845445 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US RELOCATION SERVICES INC CENTRAL INDEX KEY: 0001173530 IRS NUMBER: 841180078 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-17 FILM NUMBER: 02660183 BUSINESS ADDRESS: STREET 1: 1801 CALIFORNIA STREET 2: SUITE 2740 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3032927100 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL ASSOCIATION OF INDEPENDENT TRUCKERS LLC CENTRAL INDEX KEY: 0001173527 IRS NUMBER: 810288174 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-20 FILM NUMBER: 02660186 BUSINESS ADDRESS: STREET 1: 215 DIEHL ROAD CITY: NAPERVILLE STATE: IL ZIP: 60563 BUSINESS PHONE: 8003238560 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL VAN LINES INC CENTRAL INDEX KEY: 0001173525 IRS NUMBER: 810288174 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-21 FILM NUMBER: 02660187 BUSINESS ADDRESS: STREET 1: 5001 U S HIGHWAY 30 WET STREET 2: P O BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED TRANSPORTATION FORWARDING INC CENTRAL INDEX KEY: 0001173524 IRS NUMBER: 363422806 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-22 FILM NUMBER: 02660188 BUSINESS ADDRESS: STREET 1: 215 W DIAHL ROAD CITY: NAPERVILLE STATE: IL ZIP: 60563 BUSINESS PHONE: 6307173000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORPORATE TRANSFER SERVICES INC CENTRAL INDEX KEY: 0001173523 IRS NUMBER: 411439350 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-23 FILM NUMBER: 02660189 BUSINESS ADDRESS: STREET 1: 3300 FERNBROOK LANE NORTH STREET 2: SUITE 300 CITY: PLYMOUTH STATE: MN ZIP: 55447 BUSINESS PHONE: 7635253700 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRS TITLE AGENCY INC CENTRAL INDEX KEY: 0001173522 IRS NUMBER: 341942433 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-24 FILM NUMBER: 02660190 BUSINESS ADDRESS: STREET 1: 6070 PARKLAND DRIVE CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 BUSINESS PHONE: 4406845500 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRS ACQUISITION CORP CENTRAL INDEX KEY: 0001173521 IRS NUMBER: 341876193 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-25 FILM NUMBER: 02660191 BUSINESS ADDRESS: STREET 1: 6070 PARKLAND DRIVE CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 BUSINESS PHONE: 4406845500 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERIDIAN MOBILITY RESOURCES INC CENTRAL INDEX KEY: 0001169079 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-92688-16 FILM NUMBER: 02660192 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: POST OFFICE BOX 988 CITY: FORT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 219 429 2511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NACAL INC CENTRAL INDEX KEY: 0001104471 IRS NUMBER: 952368626 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-10 FILM NUMBER: 02660170 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT FALLS NORTH AMERICAN INC CENTRAL INDEX KEY: 0001104470 IRS NUMBER: 351900598 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-09 FILM NUMBER: 02660171 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRONTRUNNER WORLDWIDE INC CENTRAL INDEX KEY: 0001104469 IRS NUMBER: 351900598 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-08 FILM NUMBER: 02660172 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEET INSURANCE MANAGEMENT INC CENTRAL INDEX KEY: 0001104468 IRS NUMBER: 351471355 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-07 FILM NUMBER: 02660173 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: A RELOCATION SOLUTIONS MANAGEMENT CO CENTRAL INDEX KEY: 0001104229 IRS NUMBER: 360719320 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-06 FILM NUMBER: 02660174 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: POST OFFICE BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: BOX 988 CITY: FT WAYNE STATE: IL ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED VAN LINES TERMINAL CO CENTRAL INDEX KEY: 0001104228 IRS NUMBER: 360719320 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-05 FILM NUMBER: 02660175 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: POST OFFICE BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: BOX 988 CITY: FT WAYNE STATE: IL ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED INTERNATIONAL NA INC CENTRAL INDEX KEY: 0001104227 IRS NUMBER: 362906660 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-04 FILM NUMBER: 02660176 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: POST OFFICE BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: BOX 988 CITY: FT WAYNE STATE: IL ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED FREIGHT FORWARDING INC CENTRAL INDEX KEY: 0001104226 IRS NUMBER: 362405833 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-03 FILM NUMBER: 02660177 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: POST OFFICE BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 W STREET 2: BOX 988 CITY: FT WAYNE STATE: IL ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VANGUARD INSURANCE AGENCY INC CENTRAL INDEX KEY: 0001104225 IRS NUMBER: 362777624 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-02 FILM NUMBER: 02660178 BUSINESS ADDRESS: STREET 1: 215 W DIEHL RD CITY: NAPERVILLE STATE: IL ZIP: 60563 BUSINESS PHONE: 6307175522 MAIL ADDRESS: STREET 1: 215 W DIEHL RD CITY: NAPERVILLE STATE: IL ZIP: 60563 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED VAN LINES INC CENTRAL INDEX KEY: 0000003975 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 360719320 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-01 FILM NUMBER: 02660180 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 W PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH AMERICAN VAN LINES INC /DE CENTRAL INDEX KEY: 0001103280 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 521840893 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233 FILM NUMBER: 02660182 BUSINESS ADDRESS: STREET 1: 5001 WEST PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RELOCATION MANAGEMENT SYSTEMS INC CENTRAL INDEX KEY: 0001104482 IRS NUMBER: 351635373 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-15 FILM NUMBER: 02660193 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH AMERICAN VAN LINES OF TEXAS INC CENTRAL INDEX KEY: 0001104480 IRS NUMBER: 741440447 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-14 FILM NUMBER: 02660194 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH AMERICAN LOGISTICS LTD CENTRAL INDEX KEY: 0001104478 IRS NUMBER: 132890402 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-13 FILM NUMBER: 02660195 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH AMERICAN DISTRIBUTION SYSTEMS INC CENTRAL INDEX KEY: 0001104476 IRS NUMBER: 351115697 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-12 FILM NUMBER: 02660196 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAVTRANS INTERNATIONAL FREIGHT FORWARDING INC CENTRAL INDEX KEY: 0001104474 IRS NUMBER: 356296161 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-96233-11 FILM NUMBER: 02660197 BUSINESS ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 BUSINESS PHONE: 2194292511 MAIL ADDRESS: STREET 1: 5001 US HIGHWAY 30 WEST STREET 2: PO BOX 988 CITY: FT WAYNE STATE: IN ZIP: 46801-0988 S-4/A 1 a2002828zs-4a.txt S-4/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 2002 REGISTRATION NO. 333-96233 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 2 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ NORTH AMERICAN VAN LINES, INC. (Exact name of Registrant as specified in its charter) DELAWARE 4213 52-1840893 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
------------------------------ 5001 U.S. HIGHWAY 30 WEST P.O. BOX 988 FT. WAYNE, INDIANA 46801-0988 (260) 429-2511 (Address, including ZIP code, and telephone number, including area code, of Registrant's principal executive offices) ------------------------------ RALPH A. FORD NORTH AMERICAN VAN LINES, INC. SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY 5001 U.S. HIGHWAY 30 WEST P.O. BOX 988 FT. WAYNE, INDIANA 46801-0988 (260) 429-2511 (Name, address, including ZIP code, and telephone number, including area code, of Registrant's agent for service) ------------------------------ WITH COPY TO: PAUL S. BIRD, ESQ. DEBEVOISE & PLIMPTON 919 THIRD AVENUE NEW YORK, NEW YORK 10022 (212) 909-6000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / If this form is filed to register additional securities of an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / ------------------------------ CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED OFFERING MAXIMUM TITLE OF EACH CLASS AMOUNT TO BE PRICE PER AGGREGATE AMOUNT OF OF SECURITIES TO BE REGISTERED REGISTERED SECURITY(1) OFFERING PRICE REGISTRATION FEE 13 3/8% Senior Subordinated Notes Due 2009... $150,000,000 100% $150,000,000 $39,600
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 promulgated under the Securities Act of 1933, as amended. ------------------------------ 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. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OTHER REGISTRANTS
ADDRESS, INCLUDING ZIP PRIMARY STANDARD CODE, AND TELEPHONE JURISDICTION OF INDUSTRIAL I.R.S. EMPLOYER NUMBER, INCLUDING AREA INCORPORATION OR CLASSIFICATION IDENTIFICATION CODE, OF PRINCIPAL NAME OF REGISTRANT FORMATION NUMBER NUMBER EXECUTIVE OFFICE - ------------------ ---------------- ---------------- --------------- -------------------------- Allied Freight Forwarding, Inc. Delaware 4731 36-2405833 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 Allied International N.A., Inc. Delaware 4731 36-2906660 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 Allied Transportation Forwarding, Delaware 4731 36-3422806 215 W. Diehl Road Inc. Naperville, Illionis 60563 Allied Van Lines, Inc. Delaware 4212, 4213, 4225 36-0719320 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 Allied Van Lines Terminal Company Delaware 4213 36-2582535 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 A Relocation Solutions Management Delaware 4731 36-3295067 5001 U.S. Highway 30 West Company P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 CRS Acquisition Corp. Delaware N/A 34-1876193 6070 Parkland Drive Mayfield Heights, Ohio 44124 (440) 684-5500 CRS Title Agency, Inc. Ohio 8742, 8810 34-1942433 6070 Parkland Drive Mayfield Heights, Ohio 44124 (440) 684-8151 Corporate Transfer Service, Inc. Minnesota 8742, 8810 41-1439350 3300 Fernbrook Lane North, Suite 300 P.O. Box 47300 Plymouth, Minnesota 55447 (763) 525-3700
ii
ADDRESS, INCLUDING ZIP PRIMARY STANDARD CODE, AND TELEPHONE JURISDICTION OF INDUSTRIAL I.R.S. EMPLOYER NUMBER, INCLUDING AREA INCORPORATION OR CLASSIFICATION IDENTIFICATION CODE, OF PRINCIPAL NAME OF REGISTRANT FORMATION NUMBER NUMBER EXECUTIVE OFFICE - ------------------ ---------------- ---------------- --------------- -------------------------- Federal Traffic Service, Inc. Indiana 4212 35-1115697 5001 U.S. Highway 30 West (formerly known as Customized P.O. Box 988 Product Management, Inc., formerly Ft. Wayne, Indiana known as North American 46801-0988 Distribution Systems, Inc.) (260) 429-2511 Fleet Insurance Management, Inc. Indiana 6411 35-1471355 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 FrontRunner Worldwide, Inc. Delaware 4731 35-1900598 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 Global Van Lines, Inc. Indiana 4213 52-2150248 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 Great Falls North American, Inc. Montana 4214,4213 81-0288174 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 Meridian Mobility Resources Inc. Delaware 7389 36-4158623 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 NACAL, Inc. California 4213 95-2368626 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 National Association of Independent Delaware 8611 73-1641384 215 W. Diehl Road Truckers, LLC Naperville, Illinois 60563 (630) 717-5522 NAVTRANS International Freight Indiana 4731 35-6296161 5001 U.S. Highway 30 West Forwarding, Inc. P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 North American Logistics, Ltd. Indiana 4731 13-2890402 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511
iii
ADDRESS, INCLUDING ZIP PRIMARY STANDARD CODE, AND TELEPHONE JURISDICTION OF INDUSTRIAL I.R.S. EMPLOYER NUMBER, INCLUDING AREA INCORPORATION OR CLASSIFICATION IDENTIFICATION CODE, OF PRINCIPAL NAME OF REGISTRANT FORMATION NUMBER NUMBER EXECUTIVE OFFICE - ------------------ ---------------- ---------------- --------------- -------------------------- North American Van Lines of Texas, Texas 4731/4213 75-1440447 5001 U.S. Highway 30 West Inc. P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 ProSource Properties, Ltd. Ohio 8742, 8810 34-1793575 6070 Parkland Drive Mayfield Heights, Ohio 44124 (440) 684-5500 Relocation Management Systems, Inc. Delaware 5045 35-1635373 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 SIRVA Relocation LLC Delaware 8742, 8810 30-0066709 6070 Parkland Drive Mayfield Heights, Ohio 44124 (440) 684-5445 StorEverything, Inc. Delaware 4214, 4225, 4226 36-4426552 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 (260) 429-2511 U.S. Relocation Services, Inc. Delaware 8742, 8810 84-1180078 1801 California, Suite 2740 Denver, Colorado 80202 (303) 292-7100 Vanguard Insurance Agency, Inc. Illinois 6411 36-2777624 215 W. Diehl Road Naperville, Illinois 60563 (630) 717-5522
iv THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED , 2002 PROSPECTUS - ------------- OFFER TO EXCHANGE $150,000,000 OUTSTANDING 13 3/8% SENIOR SUBORDINATED NOTES DUE 2009 FOR $150,000,000 REGISTERED 13 3/8% SENIOR SUBORDINATED NOTES DUE 2009 THE NEW NOTES: - The terms of the new notes are identical to the terms of the old notes except that the new notes are registered under the Securities Act of 1933 and will not contain restrictions on transfer or provisions relating to additional interest and will contain different administrative terms. INVESTING IN THE NEW NOTES INVOLVES RISKS. YOU SHOULD CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 6 OF THIS PROSPECTUS. THE EXCHANGE OFFER: - Our offer to exchange old notes for new notes will be open until 5:00 p.m., New York City time, on , 2002, unless we extend the offer. - No public market currently exists for the notes. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is , 2002 WHERE YOU CAN FIND MORE INFORMATION In connection with the exchange offer, we have filed with the Securities and Exchange Commission, or the SEC, a registration statement on Form S-4 under the Securities Act of 1933 relating to the new notes to be issued in the exchange offer. As permitted by SEC rules, this prospectus omits information included in the registration statement. For a more complete understanding of this exchange offer, you should refer to the registration statement, including its exhibits. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and, in each instance, if the contract or document is filed as an exhibit, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement, each statement being qualified in all respects by that reference. The indentures pursuant to which the notes are issued require us to distribute to the holders of the notes annual reports containing our financial statements audited by our independent public accountants and quarterly reports containing unaudited condensed consolidated financial statements for the first three quarters of each fiscal year. Following completion of the exchange offer, we will file annual, quarterly and current reports and other information with the SEC. The public may read and copy any reports or other information that we file with the SEC at the SEC's public reference room, Room 1024 at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, or at the SEC's regional offices located at 233 Broadway, New York, New York 10279, and Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. These documents are also available to the public at the web site maintained by the SEC at http://www.sec.gov. You may also obtain a copy of the exchange offer registration statement at no cost by writing or telephoning us at the following address: North American Van Lines, Inc. 5001 U.S. Highway 30 West P.O. Box 988 Ft. Wayne, Indiana 46801-0988 Attention: Ralph A. Ford Telephone: (260) 429-2511 IN ORDER TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST DOCUMENTS FROM US NO LATER THAN , 2002, WHICH IS FIVE DAYS BEFORE THE EXPIRATION DATE OF THE EXCHANGE OFFER ON , 2002. TABLE OF CONTENTS
PAGE -------- Certain References.......................................... iii Industry Data............................................... iii Presentation of Financial Information....................... iii Summary..................................................... 1 Risk Factors................................................ 7 The Exchange Offer.......................................... 16 Use of Proceeds............................................. 24 Capitalization.............................................. 25 Selected Historical Financial Data.......................... 26 Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 31 Business.................................................... 52 Management.................................................. 61 Ownership of Capital Stock.................................. 73 Certain Relationships and Related Party Transactions........ 75 Description of Other Indebtedness........................... 79 Description of Notes........................................ 82 Certain United States Federal Tax Considerations............ 139 Plan of Distribution........................................ 145 Legal Matters............................................... 145 Experts..................................................... 146 Index to Financial Statements............................... F-1
ii CERTAIN REFERENCES When we refer to "North American Van Lines" or "NAVL" we are referring to North American Van Lines, Inc., the issuer of the notes, together with its subsidiaries and their predecessors, except where the context otherwise requires. When we refer to "Allied" or to "NFC Moving Services Group," we are referring to the Allied and Pickfords businesses prior to the Allied acquisition described in the summary section of this prospectus under the heading "The Allied Acquisition" or, after that acquisition, to our operations carried out under the Allied and Pickfords brand names, as the context requires. When we refer to "SIRVA," we are referring to our parent, SIRVA, Inc., formerly known as Allied Worldwide, Inc. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS ABOUT THE TRANSACTIONS WE DISCUSS IN THIS PROSPECTUS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF YOU ARE GIVEN ANY INFORMATION OR REPRESENTATION ABOUT THESE MATTERS THAT IS NOT DISCUSSED, YOU MUST NOT RELY ON THAT INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES ANYWHERE OR TO ANYONE WHERE OR TO WHOM WE ARE NOT PERMITTED TO OFFER OR SELL SECURITIES UNDER APPLICABLE LAW. THE DELIVERY OF THIS PROSPECTUS OR THE NOTES OFFERED BY THIS PROSPECTUS DOES NOT, UNDER ANY CIRCUMSTANCES, MEAN THAT THERE HAS NOT BEEN A CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS PROSPECTUS. IT ALSO DOES NOT MEAN THAT THE INFORMATION IN THIS PROSPECTUS IS CORRECT AFTER THIS DATE. INDUSTRY DATA Industry data used throughout this prospectus are derived from either (1) research conducted by us based upon data collected by the Department of Transportation and other unaffiliated third-party sources which we believe to be reliable, or (2) reports and other information published by the American Moving and Storage Association, an industry research company and publisher, and the American Trucking Association, a national trucking organization. Although we believe our third-party sources to be reliable, the accuracy and completeness of the information provided to us are not guaranteed. Neither such data nor the information included in the industry publications we reference, including market and competitive position data, have been independently verified by us. Although such market and competitive position data are inherently imprecise, based on its understanding of the markets in which we compete, management believes that such data are generally indicative of our relative market share and competitive position. PRESENTATION OF FINANCIAL INFORMATION In this prospectus, except where otherwise indicated, references to - "U.S. Dollars," "Dollars" or "$" are to the currency of the United States, and - "Pound sterling," "Pounds," or "L" are to the currency of the United Kingdom. Except as otherwise stated, in this prospectus, translations of non-dollar currencies to dollars have been calculated, for income statement purposes, on the basis of average exchange rates over the related periods and, for balance sheet purposes, the rate in effect on the date of the relevant balance sheet. These translations should not be construed as representations that the non-dollar currency amounts actually represent such dollar amounts or could be converted into dollars at the rates indicated or at any other rates. This prospectus contains pound-denominated financial statements of Allied. Solely for your convenience, the following table reflects the exchange rates for the period pertaining to such statements. iii We do not represent that the pound amounts shown in this prospectus would have been converted into Dollars at the quoted exchange rates.
FISCAL YEAR ENDED SEPTEMBER 30, 1999 ------------------- Exchange rate at the end of period.......................... 1.65 Average exchange rate during period......................... 1.63 High exchange rate during period............................ 1.72 Low exchange rate during period............................. 1.55
iv SUMMARY YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED INFORMATION REGARDING OUR COMPANY, THE SECURITIES BEING SOLD AND OUR CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE IN THIS PROSPECTUS. OUR BUSINESS We are a leading global relocation and moving services company and also the largest logistics services provider among all U.S. van lines. We are a global network manager of agents, owner/operators and company-owned branches with locations in 21 countries. Our relocation businesses provide high-quality packing, warehousing, hauling and delivery for both domestic and international residential moves. We also provide a broad portfolio of services to commercial customers, including office and industrial relocations and records management. Our logistics services segment provides customized solutions to facilitate the movement of high-value products that require specialized transport and handling such as electronics, telecommunications and medical equipment and fine art. Our diversified customer base includes many leading Fortune 500 and FTSE-100 companies, private transferees and the government and military of the United States and other countries. THE ALLIED ACQUISITION On November 19, 1999, we acquired the Allied and Pickfords moving van businesses from Exel plc, formerly known as NFC plc. In the acquisition, we acquired capital stock of various Exel subsidiaries located throughout the world, and the moving van-related assets of Exel's Canadian operating subsidiary. Concurrently with the closing of the acquisition, and as part of the financing for the transaction, North American Van Lines issued and sold the old notes, and borrowed an aggregate of $325.0 million in term loan borrowings and $65.0 million in revolving credit borrowings under a senior secured credit facility. In addition, as part of that financing, SIRVA, Inc. (formerly known as Allied Worldwide, Inc.), our parent, incurred $35.0 million initial accreted value of unsecured senior discount term loan borrowings (such amount had accreted to $50.1 million as of March 31, 2002). As part of that financing, SIRVA borrowed $40.0 million in term loan borrowings under an interim loan facility. On December 1, 1999, Clayton, Dubilier & Rice Fund V Limited Partnership, our controlling shareholder, and a subsidiary of Exel subscribed for and purchased additional common stock of SIRVA for $40.0 million in cash. The proceeds from this stock purchase were used to repay this $40.0 million interim loan. CLAYTON, DUBILIER & RICE INVESTMENT FUNDS The controlling shareholder of our parent, SIRVA, Inc., is Clayton, Dubilier & Rice Fund V Limited Partnership. Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership formed in March 1995, is a private investment fund that receives management services from Clayton, Dubilier & Rice, Inc., a Delaware corporation. As of May 20, 2002, Clayton Dubilier & Rice Fund VI Limited Partnership, held approximately 24.0% of the capital stock of our parent, SIRVA, Inc. Clayton Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership formed in August 1998, is an affiliate of our controlling shareholder, Clayton, Dubilier & Rice Fund V Limited Partnership. It is a private investment fund that receives management services from Clayton, Dubilier & Rice, Inc. See "Certain Relationships and Related Party Transactions". * * * North American Van Lines' principal executive offices are located at 5001 U.S. Highway 30 West, P.O. Box 988, Ft. Wayne, Indiana 46801-0988. Its phone number is (260) 429-2511. 1 SUMMARY OF THE TERMS OF THE EXCHANGE OFFER On November 19, 1999, we completed a private offering of $150,000,000 principal amount of 13 3/8% senior subordinated notes. In this prospectus, we refer to (1) the notes sold in that original offering as the old notes, (2) the notes offered hereby in exchange for the old notes as the new notes, and (3) the old notes and the new notes together as notes. The Exchange Offer........................ You may exchange old notes for new notes. Resale of New Notes....................... We believe the new notes that will be issued in this exchange offer may be resold by most investors without compliance with the registration and prospectus delivery provisions of the Securities Act, subject to certain conditions. You should read the discussion under the heading "The Exchange Offer" for further information regarding the exchange offer and resale of the new notes. Registration Rights Agreement............. We have undertaken this exchange offer pursuant to the terms of a registration rights agreement entered into with the initial purchasers of the old notes. See "The Exchange Offer" and "Description of Notes--Registration Rights." Consequence of Failure to Exchange Old Notes................................... You will continue to hold old notes that remain subject to their existing transfer restrictions if: - you do not tender your old notes or - you tender your old notes and they are not accepted for exchange. With some limited exceptions, we will have no obligation to register the old notes after we consummate the exchange offer. See "The Exchange Offer--Terms of the Exchange Offer" and "--Consequences of Failure to Exchange." Expiration Date........................... The exchange offer will expire at 5:00 p.m., New York City time, on , 2002 (the "Expiration Date"), unless we extend it, in which case "Expiration Date" means the latest date and time to which the exchange offer is extended. Interest on the New Notes................. The new notes will accrue interest from the most recent date to which interest has been paid or provided for on the old notes. Pursuant to the Registration Rights Agreement, the new notes will accrue interest at a rate of 13 7/8% per annum to the day before the consummation of the Exchange Offer. From the date of consummation of the Exchange Offer, the interest rate will be 13 3/8% per annum. No additional interest will be paid on old notes tendered and accepted for exchange. Condition to the Exchange Offer........... The exchange offer is subject to several customary conditions, which we may waive. See "The Exchange Offer--Conditions."
2 Procedures for Tendering Old Notes........ If you wish to accept the exchange offer, you must submit required documentation and effect a tender of old notes pursuant to the procedures for book-entry transfer (or other applicable procedures) all in accordance with the instructions described in this prospectus and in the relevant letter of transmittal. See "The Exchange Offer--Procedures for Tendering," "--Book-Entry Transfer," and "--Guaranteed Delivery Procedures." Other procedures may apply with respect to book-entry transfers. See "The Exchange Offer--Exchanging Book-Entry Notes." Guaranteed Delivery Procedures............ If you wish to tender your old notes, but cannot properly do so prior to the expiration date, you may tender your old notes according to the guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery Procedures." Withdrawal Rights......................... Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw a tender of old notes, a written or facsimile transmission notice of withdrawal must be received by the exchange agent at its address set forth in "The Exchange Offer--Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. Acceptance of Old Notes and Delivery of New Notes............................... Except in some circumstances, any and all old notes that are validly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date will be accepted for exchange. The new notes issued pursuant to the exchange offer will be delivered as soon as practicable following the expiration date. See "The Exchange Offer--Terms of the Exchange Offer." Certain U.S. Tax Considerations........... We believe that the exchange of the old notes for new notes should not constitute a taxable exchange for U.S. federal income tax purposes. See "Certain United States Federal Tax Considerations." Exchange Agent............................ State Street Bank and Trust Company is serving as exchange agent.
3 SUMMARY OF THE TERMS OF THE NEW NOTES The terms of the new notes are identical to the terms of the old notes EXCEPT that the new notes: - are registered under the Securities Act, and therefore will not contain restrictions on transfer, - will not contain provisions relating to additional interest, and - will contain terms of an administrative nature that differ from those of the old notes. Maturity.................................. December 1, 2009. Interest.................................. Interest is payable in cash on June 1 and December 1 of each year. Ranking................................... The notes are our senior subordinated debt. Accordingly, they will rank: - behind all of our existing and future senior debt; - equally with all our future subordinated, unsecured debt that does not expressly provide that it is subordinated to the notes; - ahead of any of our future debt that expressly provides that it is subordinated to the notes; and - behind all of the liabilities of our existing and future foreign subsidiaries, and our domestic subsidiaries that do not guarantee our payment of our bank indebtedness. As of March 31, 2002, we had approximately $362.6 million of senior debt for borrowed money outstanding. In addition, our foreign subsidiaries and our domestic subsidiaries that do not guarantee our payment of our bank indebtedness had $128.6 million of balance sheet liabilities. Guarantees................................ The notes will be guaranteed by our domestic subsidiaries that guarantee our payment of our bank indebtedness. Optional Redemption....................... On or after December 1, 2004, we may redeem some or all of the notes at any time at the redemption prices described in the "Description of Notes--Optional Redemption." Prior to December 1, 2002, we may redeem up to 35% of the notes with proceeds from certain equity offerings at the redemption prices described in the section "Description of Notes--Optional Redemption." Mandatory Offer to Repurchase............. If we sell specified assets or experience specific kinds of change of control, we must offer to repurchase the notes at the prices described in "Description of Notes--Change of Control." Basic Covenants of Indenture.............. The indenture under which the notes are issued contains covenants that will, among other things, restrict our ability to: - borrow money; - pay dividends on stock or repurchase stock; - make investments; - use assets as security in other transactions; and - sell certain assets or merge with or into other companies. See "Description of Notes--Certain Covenants."
RISK FACTORS YOU SHOULD REFER TO THE SECTION ENTITLED "RISK FACTORS" FOR AN EXPLANATION OF SOME OF THE RISKS RELATING TO US, OUR BUSINESS, AND AN INVESTMENT IN THE NOTES. 4 SUMMARY HISTORICAL FINANCIAL DATA We derived our selected historical financial data for the years 1997 and 1999 through 2001 and for the three month period ended March 28, 1998 and for the nine month period ended December 26, 1998 from our audited financial statements or those of our predecessor for the periods then ended. Our selected historical financial data for the periods presented ending after November 19, 1999 (the date of completion of the Allied Acquisition) includes financial data of Allied. Our selected historical financial data as of and for the three months ended March 31, 2002 and 2001, respectively, are derived from our unaudited interim financial statements. The unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the financial condition and results of operations as of and for the periods presented. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. The presentation of selected historical financial data is only a summary and you should read it together with our historical financial statements and related notes.
ANNUAL DATA ------------------------------------------------------------------------------------------ PREDECESSOR(1) NAVL ----------------------------- ---------------------------------------------------------- NINE MONTH THREE MONTH PERIOD FROM PERIOD FROM MARCH 29, DECEMBER 28, 1998 1997 (INCEPTION) YEAR ENDED THROUGH THROUGH YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 27, MARCH 28, DECEMBER 26, DECEMBER 25, DECEMBER 31, DECEMBER 31, 1997 1998 1998 1999(2) 2000(2)(3) 2001(2)(3) ------------- ------------- ------------- ------------ ------------ ------------ (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Operating revenues...... $ 941.5 $ 207.3 $ 759.2 $1,159.8 $2,378.7 $2,249.3 Restructuring and other unusual charges(4).... (5.5) 4.6 -- 9.1 4.9 4.9 Income/(loss) from operations............ 31.2 (1.3) 11.5 (1.1) 49.8 53.3 Net income (loss)....... 22.3 (0.7) (1.2) (19.9) (17.1) (10.9) BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents........... $ 2.9 $ 9.2 $ 2.1 $ 25.2 $ 43.5 $ 32.1 Working capital......... 62.0 63.2 31.4 32.7 13.7 (28.2) Property and equipment, net................... 57.8 56.4 73.6 165.9 158.7 165.4 Total assets............ 302.3 284.3 392.1 1,162.1 1,216.6 1,095.8 Total debt(5)........... 0.7 0.7 168.6 554.8 562.6 525.0 Stockholder's equity.... 108.1 101.0 63.7 167.7 145.1 121.8 OTHER DATA: Net cash provided by (used for) operating activities............ $ 28.9 $ 10.3 $ (1.6) $ 11.6 $ 52.8 $ 111.3 Capital expenditures.... 10.6 1.4 5.7 12.7 55.4 48.3 Depreciation and amortization(6)....... 12.5 2.9 22.5 31.2 53.9 48.7 Ratio of earnings to fixed charges(7)...... 7.61 0.01 1.74 0.96 1.63 1.66 EBITDA, as defined(8)... 38.2 6.2 34.0 43.4 130.2 125.0 THREE MONTH DATA --------------------------- (UNAUDITED) --------------------------- THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, MARCH 31, 2001 2002 ------------ ------------ (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Operating revenues...... $ 510.4 $ 429.7 Restructuring and other unusual charges(4).... 0.2 (0.7) Income/(loss) from operations............ (4.4) 6.2 Net income (loss)....... 4.9 (3.3) BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents........... $ 37.2 $ 25.6 Working capital......... 20.8 (42.4) Property and equipment, net................... 153.2 165.1 Total assets............ 1,153.3 1,042.3 Total debt(5)........... 558.6 513.4 Stockholder's equity.... 139.3 118.4 OTHER DATA: Net cash provided by (used for) operating activities............ $ 5.3 $ 16.1 Capital expenditures.... 9.8 8.6 Depreciation and amortization(6)....... 12.0 8.6 Ratio of earnings to fixed charges(7)...... 0.78 1.36 EBITDA, as defined(8)... 12.8 16.0
- ------------------------------ (1) See note 1 to Selected Historical Financial Data appearing elsewhere in this prospectus. (2) See note 2 to Selected Historical Financial Data appearing elsewhere in this prospectus. (3) See note 3 to Selected Historical Financial Data appearing elsewhere in this prospectus. (4) See note 4 to Selected Historical Financial Data appearing elsewhere in this prospectus. (5) See note 8 to Selected Historical Financial Data appearing elsewhere in this prospectus. (6) See note 10 to Selected Historical Financial Data appearing elsewhere in this prospectus. 5 (7) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations plus fixed charges less capitalized interest. Fixed charges consist of (i) interest whether expensed or capitalized, (ii) the amortization of deferred debt issuance costs and (iii) an allocation of one-third of the rental expense from operating leases, which management considers to be a reasonable approximation of the interest factor of operating lease payments. For the three months ended March 31, 2001, the year ended December 25, 1999 and the three month period ended March 28, 1998, earnings were insufficient to cover fixed charges by approximately $4.5 million, $1.1 million and $1.3 million, respectively. (8) EBITDA for the historical periods presented is generally calculated in accordance with the definition of that term given in the senior credit agreement governing our senior credit facility (including certain allowable adjustments) and includes Allied's results since November 19, 1999, the date of completion of the Allied Acquisition. EBITDA is determined by combining income (loss) from operations, restructuring and other unusual charges, depreciation and amortization, non-operating income (loss) and allowable EBITDA adjustments. See note 12 to Selected Historical Financial Data appearing elsewhere in this prospectus. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations as determined by generally accepted accounting principles, and our calculation thereof may not be comparable to that reported by other companies. We believe that it is widely accepted that EBITDA provides useful information regarding a company's ability to service and/or incur indebtedness. EBITDA does not take into account a company's working capital requirements, debt service requirements and other commitments and, accordingly, is not necessarily indicative of amounts that may be available for discretionary use. 6 RISK FACTORS YOU SHOULD READ AND CONSIDER CAREFULLY EACH OF THE FOLLOWING FACTORS, AS WELL AS THE OTHER INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE INTO THIS PROSPECTUS, BEFORE MAKING A DECISION TO INVEST IN THE NOTES. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS OR ABILITY TO PAY PRINCIPAL OR INTEREST ON THE NOTES COULD BE MATERIALLY ADVERSELY AFFECTED. IN THAT EVENT, YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT. RISKS RELATING TO THE NOTES IF YOU DO NOT PROPERLY TENDER YOUR OLD NOTES, YOU WILL CONTINUE TO HOLD UNREGISTERED OLD NOTES AND YOUR ABILITY TO TRANSFER OLD NOTES WILL BE ADVERSELY AFFECTED. We will only issue new notes in exchange for old notes that are timely and properly tendered. Therefore, you should allow sufficient time to ensure timely delivery of the old notes and you should carefully follow the instructions on how to tender your old notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the old notes. If you do not exchange your old notes for new notes pursuant to the exchange offer, the existing transfer restrictions will continue to apply to the old notes you hold. In general, the old notes may not be offered or sold, unless registered under the Securities Act, or exempt from registration under the Securities Act and applicable state securities laws. We do not anticipate that we will register old notes under the Securities Act. After the exchange offer is consummated, if you continue to hold any old notes, you may have trouble selling them because the liquidity of the market for such notes may be diminished as there will likely be fewer old notes outstanding. In addition, if a large number of old notes are not tendered or are tendered improperly, the limited amount of new notes that would be issued and outstanding after we consummate the exchange offer could lower the market price of such new notes. OUR SUBSTANTIAL INDEBTEDNESS AND OUR ABILITY TO INCUR MORE INDEBTEDNESS COULD PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES. We have significant indebtedness. On March 31, 2002 we had total indebtedness, consisting of indebtedness for borrowed money and capital leases and excluding letters of credit, of approximately $513.4 million (of which $150.0 million consisted of the notes and the balance consisted of borrowings of $341.2 million under our senior credit facility and other debt of $22.2 million (see "Capitalization")) and stockholders' equity of approximately $118.4 million. Our ratio of earnings to fixed charges for the three months ended March 31, 2002 is 1.36 to 1. The indenture pursuant to which the notes are issued, the agreements governing SIRVA's $35.0 million (such amount had accreted to $50.1 million as of March 31, 2002) of senior discount debt and the agreements governing the senior credit facility limit, but do not prohibit, our incurrence of additional indebtedness. In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we incurred an additional $50.0 million of senior indebtedness. See "Management's Discussion and Analysis of Financial Condition and Results of Operation--Subsequent Events." A substantial level of debt may make it more difficult for us to repay you. Our indebtedness will have important consequences to you. For example, it could: - make it more difficult for us to make payments on the notes; - limit our ability to borrow additional money for working capital, capital expenditures, debt service requirements or other purposes; - require us to use a substantial portion of our future cash flow from operations to pay principal and interest on our indebtedness and other obligations, which would reduce the availability of this cash 7 flow to fund working capital, capital expenditures, debt service requirements or other general corporate expenditures; - limit our flexibility in planning for, or reacting to changes in, our business and restrict our ability to take advantage of future business opportunities; - place us at a competitive disadvantage to those competitors with less indebtedness; and - limit our ability to react to changing market conditions, changes in our industry and economic downturns. WE MAY NOT HAVE ENOUGH CASH AVAILABLE TO SERVICE OUR INDEBTEDNESS. Our ability to pay interest on the notes and meet our other debt service obligations will depend on our future performance, which in turn depends on successful implementation of our strategy and on financial, competitive, regulatory, technical and other factors, many of which are beyond our control. If we cannot generate sufficient cash flow from operations or meet our debt service requirements, we may be required to refinance our indebtedness, including the notes. Our ability to obtain such financing will depend on our financial condition at the time, the restrictions in the agreements governing our indebtedness and other factors, including general market and economic conditions. If such refinancing were not possible, we could be forced to dispose of assets at unfavorable prices. In addition, we could default on our debt obligations, including our obligations to make payments on the notes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Financial Condition--Liquidity and Capital Resources." OUR DEBT AGREEMENTS IMPOSE OPERATING AND FINANCIAL RESTRICTIONS ON US THAT MAY PREVENT US FROM CAPITALIZING ON BUSINESS OPPORTUNITIES. The indenture pursuant to which the notes are issued, the agreements governing SIRVA's $35.0 million (such amount had accreted to $50.1 million as of March 31, 2002) of senior discount debt and the agreements governing the senior credit facility impose significant operating and financial restrictions on us. The terms of any other financings we may obtain may do so as well. These restrictions may substantially limit or prohibit us from taking various actions, including incurring additional debt, making investments, paying dividends to our shareholders, creating liens, selling assets, engaging in mergers and consolidations, repurchasing or redeeming capital stock and capitalizing on business opportunities. IF WE DO NOT COMPLY WITH THE SUBSTANTIAL RESTRICTIONS IN ALL OF OUR DEBT ARRANGEMENTS, WE MAY DEFAULT UNDER THESE ARRANGEMENTS, INCLUDING THE NOTES. We are subject to substantial operating and financial restrictions in connection with several debt arrangements, including the indenture, the agreements governing SIRVA's $35.0 million (such amount had accreted to $50.1 million as of March 31, 2002) of senior discount debt and our senior credit facility, and the respective agreements governing these arrangements interact with each other in complex ways. Failure to comply with the covenants and restrictions in the indenture or other financing agreements could trigger defaults under such agreements even if we are able to make payments on our debt. These defaults could result in a default on the notes and could delay or preclude payment of principal of or interest on the notes. THE NOTES WILL BE SUBORDINATED TO OUR SENIOR DEBT, INCLUDING A SENIOR CREDIT FACILITY. The notes will be subordinated in right of payment to all of North American Van Lines' current and future senior indebtedness. North American Van Lines has senior indebtedness, including a senior credit facility, and may incur additional senior indebtedness in the future. If we default on our senior indebtedness or, in the event of bankruptcy, liquidation or reorganization, the holders of our senior debt will be entitled to be paid in full in cash before any payment may be made with respect to the notes. Also, 8 in the event of bankruptcy, liquidation or reorganization, holders of the notes will participate ratably with all holders of our subordinated indebtedness that is deemed to be of the same class as the notes, and potentially with all our other general creditors, in distributions of our remaining assets. In these events, we cannot assure you that there would be sufficient assets to pay you in full or at all. See "Description of Notes--Ranking." As of March 31, 2002, we had senior indebtedness for borrowed money and capital leases, including borrowings under our senior credit facility, of approximately $362.6 million, and approximately $77.5 million would have been available for additional borrowing under our senior credit facility. In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under our senior credit facility. See "Management's Discussion and Analysis of Financial Condition and Results of Operation--Subsequent Events." THE NOTES WILL BE EFFECTIVELY SUBORDINATED TO OBLIGATIONS OF OUR FOREIGN SUBSIDIARIES AND ANY DOMESTIC SUBSIDIARY THAT DOES NOT GUARANTEE THE NOTES. North American Van Lines conducts a substantial portion of its business through direct or indirect subsidiaries. Only those domestic subsidiaries that guarantee its payment of its bank indebtedness will guarantee payment of the notes. Creditors of North American Van Lines' other subsidiaries, including holders of indebtedness and trade creditors, would generally be entitled to payment of their claims from the assets of the affected subsidiaries before any funds were made available for distribution to North American Van Lines. The indenture permits the incurrence of additional indebtedness by North American Van Lines and its subsidiaries and will permit investments by North American Van Lines in its subsidiaries. In the event of a bankruptcy, liquidation or reorganization of a subsidiary that does not guarantee the notes, holders of any such subsidiary's indebtedness will have a claim to the assets of the subsidiary that is prior to North American Van Lines' interest in those assets. As of March 31, 2002, those North American Van Lines subsidiaries that do not guarantee the notes had $128.6 million of indebtedness for borrowed money, trade payables and other balance sheet liabilities. If any subsidiary indebtedness were to be accelerated, we cannot assure you that the assets of such subsidiary would be sufficient to pay that indebtedness or that the assets of North American Van Lines and its subsidiaries that then guarantee the notes would be sufficient to repay in full North American Van Lines' indebtedness, including the notes. OUR ACCESS TO THE CASH FLOW OF OUR SUBSIDIARIES IS RESTRICTED. Although a substantial portion of North American Van Lines' business is conducted through its subsidiaries, only those domestic subsidiaries that guarantee its payment of its bank indebtedness will guarantee the notes. None of our subsidiaries will have any other obligation, contingent or otherwise, to make any funds available to us for payment of the notes. Accordingly, our ability to pay the notes is dependent upon the earnings of these subsidiaries and the distribution of funds from these subsidiaries to North American Van Lines. These subsidiaries are permitted under the indenture to incur substantial additional indebtedness that may severely restrict or prohibit the making of distributions, the payment of dividends and the making of loans by such subsidiaries to North American Van Lines. Applicable law of the jurisdictions in which these subsidiaries are organized or contractual or other obligations to which they are subject may limit their ability to pay dividends or make or repay on intercompany loans, including any that may be made with the proceeds of the offering of the notes. In particular, our insurance subsidiaries are subject to extensive regulation in their respective jurisdictions that limits loans, the transfer of assets, or payments by such insurance subsidiaries to their affiliates, including North American Van Lines. Such regulation could limit North American Van Lines' ability to draw on these insurance subsidiaries' assets to repay its indebtedness, including the notes. See "Business--Government Regulation." 9 Additionally, those subsidiaries that are not guaranteeing the notes may generate substantial revenue that will not be available to pay the notes unless and until such revenue is distributed to North American Van Lines or an intermediate parent company that does guarantee the notes. Furthermore, the payment of interest and principal on intercompany loans and advances as well as the payment of dividends by North American Van Lines' subsidiaries may be taxable. We cannot assure you that our operations will generate sufficient cash flow to support payment of the notes, or that dividends, distributions, loans or other funds will be available from North American Van Lines' subsidiaries to fund these payments. WE MAY NOT BE ABLE TO FINANCE A CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE. If we undergo particular types of changes of control, we may be required to offer to repurchase all outstanding notes. However, we cannot assure you that sufficient funds will be available at the time of such occurrences to make any required repurchases of notes tendered or that restrictions in our senior credit facility or the debt agreements of SIRVA will allow us to make such required repurchases. Notwithstanding these provisions, we could enter into certain transactions, including certain recapitalizations, that would not constitute a change of control as defined in the indenture but would increase the amount of debt outstanding at such time. See "Description of Notes--Change of Control." THERE MAY BE NO PUBLIC TRADING MARKET FOR THE NOTES, AND YOUR ABILITY TO TRANSFER THEM IS LIMITED. IN ADDITION, THE NOTES MAY, IF TRADED AT ALL, TRADE AT A DISCOUNT FROM THEIR INITIAL OFFERING PRICE. No active trading market currently exists for the notes. If these securities are traded after we issue them, they may trade at a discount from their initial offering price, depending on prevailing interest rates, the market for similar securities and other factors, including general economic conditions and our financial condition, performance and prospects, as well as recommendations of securities analysts. We cannot assure you that an active trading market for the notes will develop or, if one does develop, that it will be sustained. The liquidity of, and trading market for, the notes may also be impacted by declines in the market for high yield securities generally. Such a decline may materially and adversely affect any liquidity and trading of the notes independent of our financial performance and prospects. UNDER CERTAIN CIRCUMSTANCES, A COURT COULD AVOID OR SUBORDINATE THE AMOUNTS OWING UNDER THE GUARANTEES AND THE NOTES TO OUR PRESENTLY EXISTING AND FUTURE INDEBTEDNESS, AND COULD TAKE OTHER ACTIONS DETRIMENTAL TO YOUR INTERESTS AS A NOTE HOLDER. Under federal or state fraudulent transfer laws, the indebtedness represented by the notes and/or the note guarantees may be avoided or the claims on this indebtedness could be subordinated to our other debt if, among other things, (1) the notes and/or the note guarantees were incurred with an intent to hinder, delay or defraud creditors or (2) less than a reasonably equivalent value or fair consideration was received for the incurrence of this indebtedness and North American Van Lines or any note guarantor (A) was insolvent or rendered insolvent by reason of such incurrence, (B) was engaged in a business or transaction for which its remaining assets constituted unreasonably small amount of capital, or (C) intended to incur, or believed that it would incur, debts beyond its ability to pay as they matured. If a court were to find that North American Van Lines or such note guarantor came within clause (1) or (2) above, North American Van Lines or such note guarantor, or its creditors or the trustee in 10 bankruptcy, could seek to avoid the grant of security interests to the lenders under our senior credit facility. This would result in an event of default with respect to indebtedness incurred under our senior credit facility which, under the terms of such indebtedness, depending on applicable law, would allow the lenders to terminate their obligations under our senior credit facility and to accelerate payment of such indebtedness. The measure of insolvency for purposes of the foregoing will vary depending upon which jurisdiction's law is applied. Generally, however, a company would be considered insolvent for purposes of the foregoing if, at the time it incurred the indebtedness: - the sum of such company's debts including contingent liabilities is greater than all such company's property at a fair valuation; - the present fair saleable value of such company's assets is less than the amount that will be required to pay its probable liability on its existing debts and liabilities (including contingent liabilities) as they become absolute and matured; or - the company incurred obligations beyond its ability to pay as such obligations become due. There can be no assurance as to what standards a court would use to determine whether North American Van Lines or a note guarantor was solvent at the relevant time, or whether, whatever standards were applied, the notes or the note guarantees would not be avoided or further subordinated on any of the grounds set forth above. RISKS RELATING TO OUR COMPANY WE HAVE A HISTORY OF NET LOSSES, AND MAY NOT BE PROFITABLE IN THE FUTURE. Since our acquisition by Clayton, Dubilier & Rice Fund V Limited Partnership in March of 1998, we have had significant interest expense. Following the Allied Acquisition, we continue to have a substantial amount of interest expense. We reported net losses of $1.2 million, $19.9 million, $17.1 million, $10.9 million and $3.3 million for the nine month period ended December 26, 1998, the year ended December 25, 1999, the years ended December 31, 2000 and 2001 and the three month period ending March 31, 2002, respectively. We expect that continued development of our business will require significant additional capital expenditures. We expect that these continued expenses will result in future net losses and affect our ability to reduce our leverage. WE MAY NOT BE ABLE TO RECRUIT AND RETAIN A SUFFICIENT NUMBER OF AGENTS, REPRESENTATIVES OR OWNER/OPERATORS TO CARRY OUT OUR GROWTH PLANS. We rely on the services of agents to market our services and to act as intermediaries with customers, and on agents and owner/operators to provide a significant portion of our packing, warehousing and hauling services. Although we believe our relationships with our agents and owner/operators are good, we have had some difficulty in obtaining or retaining qualified owner/operators in the past due to other available employment choices with more earnings potential or individuals' desire to pursue a lifestyle that is not "on-the-road." We recently concluded negotiations with the Allied agents for a new agency contract, with a term extending to early 2005, which is being executed by agents currently. There is no assurance that every Allied agent will agree to execute that contract. Although we have experienced relatively low agent turnover in the past, we cannot assure you that these contracts will be renewed on favorable terms or at all. Allied agents who have not yet signed the agreement represent approximately 7.9% of 2001 van line network segment revenue. Our agents are independent businesses that provide marketing and other services to us while also offering local and intrastate moving and storage services to their own customers. Generally, there are few 11 additional new entrants into this business and thus recruiting new agents often requires a conversion of an agent from a competing van line. Competing van lines also recruit our agents. However, there is significant cost for an agent to transition from one van line to another in terms of change of trademarks, signage and business process. Owner/operators are independent contractors who own their own trucks and provide hauling and other services. Fluctuations in the economy and fuel prices, as well as a lifestyle that requires drivers to be away from home often from four to eight weeks at a time, create challenges for new entrants to that business. Further, competition for long haul owner/operators is strong among competing van lines. We cannot assure you that we will be successful in retaining our agents or owner/operators or that agents or owner/operators that terminate their contracts can be replaced by equally qualified personnel. A loss in the number of qualified drivers could lead to an increased frequency of accidents, potential claims exposure and, indirectly, insurance costs. Because agents have the primary relationship with customers, we expect that some customers would terminate their relationship with us were the agent that handles such customers' business to terminate its relationship with us. WE MAY HAVE DIFFICULTY INTEGRATING OR ENHANCING SOPHISTICATED INFORMATION SYSTEMS. ANY SUCH DIFFICULTIES COULD DELAY OR DISRUPT OUR ABILITY TO SERVICE OUR CUSTOMERS OR IMPAIR OUR COMPETITIVENESS. Sophisticated information systems are vital to our growth and our ability to manage and monitor the flow of goods we are transporting and to provide attractive logistics solutions services, which depend on technologically advanced systems. As these systems are evolving rapidly, we will need to continually enhance them. We may encounter difficulties in enhancing these systems or in integrating new technology into our systems in a timely and cost-effective manner. Such difficulties could have a material adverse effect on our ability to operate efficiently and to provide competitive customer service. To compete effectively, we must anticipate and adapt to technological changes and offer, on a timely basis, competitively priced services that meet evolving industry standards and customer preferences. We may choose new technologies that later prove to be inadequate, or may be forced to implement new technologies at substantial cost to remain competitive. In addition, competitors may implement new technologies before we do, allowing such competitors to provide lower priced or enhanced services and superior quality compared to those we provide. This development could have a material adverse effect on our ability to compete. We are currently in the process of evaluating a vendor to provide the outsourcing of 100% of our information systems infrastructure and, initially, 50% of our application software development. Certain of the application software development may be provided by entities outside of the U.S. We anticipate signing a definitive agreement with a vendor later in the second quarter of 2002. OUR OWNER/OPERATORS ARE CURRENTLY NOT CONSIDERED TO BE EMPLOYEES BY TAXING AND OTHER REGULATORY AUTHORITIES. SHOULD THESE AUTHORITIES CHANGE THEIR POSITION AND CONSIDER OUR OWNER/OPERATORS TO BE OUR EMPLOYEES, OUR COSTS RELATED TO OUR TAX, UNEMPLOYMENT COMPENSATION AND WORKERS' COMPENSATION PAYMENTS COULD INCREASE SIGNIFICANTLY. From time to time, certain parties, including the Internal Revenue Service, state authorities and the owners/operators themselves, have sought to assert that owner/operators in the trucking industry are employees rather than independent contractors. To date, these parties have not been successful in making these assertions against us. We consider all of our owner/operators to be independent contractors. We cannot assure you that tax authorities will not successfully challenge this position, that interpretations supporting our position will not change, or that federal and state tax or other applicable laws will not change. If owner/operators were deemed to be employees, our costs related to tax, unemployment compensation, and workers' compensation could increase significantly. In addition, such changes may be 12 applied retroactively, and if so we may be required to pay additional amounts to compensate for prior periods. WE ARE DEPENDENT ON OUR HIGHLY TRAINED EXECUTIVE OFFICERS AND EMPLOYEES. ANY DIFFICULTY IN MAINTAINING OUR CURRENT EMPLOYEES OR IN HIRING SIMILAR EMPLOYEES WOULD ADVERSELY AFFECT OUR ABILITY TO OPERATE OUR BUSINESS. Our operations are managed by a small number of key executive officers. The loss of any of these individuals could have a material adverse effect on us. In addition, our success depends on our ability to continue to attract, recruit and retain sufficient qualified personnel in an increasingly technology-based industry as we grow. Competition for qualified personnel is intense. We cannot assure you that we will be able to retain senior management, integrate new managers, or recruit qualified personnel in the future. WE ARE CONTROLLED BY PARTIES WHOSE INTERESTS MAY NOT BE ALIGNED WITH YOURS. As of May 20, 2002, Clayton, Dubilier & Rice Fund V Limited Partnership indirectly held approximately 57.6% of our capital stock on an undiluted basis and 52.6% on a fully diluted basis, and Clayton, Dubilier & Rice Fund VI Limited Partnership indirectly held approximately 24.0% of our capital stock on an undiluted basis and 21.9% on a fully diluted basis. Such ownership may present conflicts of interest between these owners and you if we encounter financial difficulties. These owners could cause us to effect decisions affecting our capital structure, including the incurrence of additional indebtedness, issuance of preferred stock and the declaration of dividends. RISKS RELATING TO OUR INDUSTRY POTENTIAL LIABILITY ASSOCIATED WITH ACCIDENTS IN THE TRUCKING TRANSPORTATION INDUSTRY IS SEVERE AND OCCURRENCES ARE UNPREDICTABLE. IN ADDITION, AN INCREASE IN LIABILITY, PROPERTY OR CASUALTY INSURANCE PREMIUMS COULD CAUSE US TO INCUR SIGNIFICANT COSTS. We use the services of a significant number of drivers in connection with our pick-up and delivery operations, and from time to time such drivers are involved in accidents. Potential liability associated with accidents in the trucking industry may be severe and occurrences are unpredictable. We are also subject to substantial exposure due to workers' compensation and cargo claims expense, whether or not injuries or damage occur in the context of a traffic accident. We carry insurance to cover liability and workers' compensation claims. We cannot assure you, however, that our insurance will be adequate to cover all of our liabilities. To the extent we were to experience a material increase in the frequency or severity of accidents, cargo claims or workers' compensation claims, or in the unfavorable resolution of existing claims, we might be required to incur substantial costs to cover these claims. In addition, our results of operations would be adversely affected if the premiums for our liability, workers' compensation and casualty claims were to increase substantially. OUR OPERATING RESULTS ARE SUBJECT TO CUSTOMER DEMAND. We serve numerous industries and customers that experience significant fluctuations in demand based on economic conditions and other factors beyond our control. Demand for our services could be materially adversely affected by downturns in the business of our corporate customers or a decrease in the frequency of household moves. As a result, our business and financial condition could be adversely affected. IF WE DO NOT SUCCESSFULLY COMPETE WITHIN THE HIGHLY COMPETITIVE RELOCATION AND LOGISTICS SERVICES INDUSTRY, WE MAY BE UNABLE TO REPAY THE NOTES. The relocation services business is highly competitive and fragmented. Aside from the handful of large van lines and relocation services companies, the industry remains extremely fragmented with many small private participants that may have strong positions in local markets. We compete primarily with truckload 13 carriers and independent contractors and, with respect to certain aspects of our business, relocation services companies, intermodal transportation, railroads and less-than-truckload carriers. Intermodal transportation (the hauling of truck trailers or containers on rail cars or ships) has increased in recent years as reductions in train crew size and the development of new rail technology have reduced costs of intermodal shipping. The logistics industry is becoming increasingly consolidated due to, among other things, the need for global distribution networks, large vehicle fleets and global information technology systems. In addition, consolidation is driven by customers' desire for integrated services, the high growth in international and cross-border delivery segments and, in Europe, the deregulation of European delivery markets. Industry participants are acquiring, merging with or forming alliances with partners that can expand global reach, breadth of services or technological capabilities in order to better enable those participants to compete in a rapidly changing global environment. If we do not successfully compete within the highly competitive relocation and logistics services industry, we may be unable to pay the notes. IF WE LOST ONE OR MORE OF OUR GOVERNMENT LICENSES OR PERMITS OR BECAME SUBJECT TO MORE ONEROUS GOVERNMENT REGULATIONS, WE COULD BE ADVERSELY AFFECTED. Our operations are subject to a number of complex and stringent transportation, environmental, labor, employment and other laws and regulations. These laws and regulations generally require us to maintain a wide variety of certificates, permits, licenses and other approvals. Our failure to maintain required certificates, permits or licenses, or to comply with applicable laws, ordinances or regulations, could result in substantial fines or possible revocation of our authority to conduct our operations, which in turn could restrict our ability to conduct our business effectively and to provide competitive customer services and thereby have an adverse impact on our financial condition. We cannot assure you that existing laws or regulations will not be revised or that new more restrictive laws or regulations will not be adopted or become applicable to us. We also cannot assure you that we will be able to recover any or all increased costs of compliance from our customers or that our business and financial condition will not be materially and adversely affected by future changes in applicable laws and regulations. See "Business--Government Regulation." THE INTERNATIONAL SCOPE OF OUR OPERATIONS MAY ADVERSELY AFFECT OUR BUSINESS. We may face certain risks because we conduct an international business, including: - regulatory restrictions or prohibitions on the provision of our services; - restrictions on foreign ownership of subsidiaries; - tariffs and other trade barriers; - longer payment cycles; - problems in collecting accounts receivables; - political risks; and - potentially adverse tax consequences of operating in multiple jurisdictions. Current world events, including the September 11, 2001 attacks against the United States, the U.S. retaliation for those attacks, the armed conflict in the Middle East and political volatility in the Middle East and central and south Asia could have a material adverse effect on our business as a global relocation services provider by reducing the demand for relocation and logistics services in locations affected by such events and by disrupting global financial markets or our access to them. In addition, an adverse change in laws or administrative practices in countries within which we operate could have a material adverse effect on us. 14 We are exposed to fluctuation in foreign currencies, as our revenues, costs, assets and liabilities are denominated in multiple local currencies. Our payment obligations with respect to the notes and a significant amount of our other indebtedness are denominated in U.S. Dollars, but a substantial portion of our revenues is denominated in other currencies as well. Any appreciation in the value of the U.S. Dollar relative to such currencies could have an adverse effect on us. EVENTS DESCRIBED BY OUR FORWARD LOOKING STATEMENTS MAY NOT OCCUR. This prospectus contains "forward-looking statements." You should not place undue reliance on these statements. Forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider this prospectus, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. Some important factors include: - operations and prospects, - ability to achieve estimated cost savings, - funding needs and financing sources, - expected financial position, - business and financing plans, - realization of deferred tax assets, - future cash flows for restructuring and expected benefits, - availability of cash to pay liabilities, - markets, including the future growth of the logistics and relocation markets, - expected characteristics of competition, - ability to consummate potential acquisitions, - expected actions of third parties such as agents, representatives, owner/operators and suppliers and - various other factors beyond our control. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by those cautionary statements. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur and you should not place undue reliance upon them. 15 THE EXCHANGE OFFER The following contains a summary of the material provisions of the registration rights agreement. It does not contain all of the information that may be important to an investor in the notes. Reference is made to the provisions of the registration rights agreement, which has been filed as an exhibit to the registration statement. Copies are available as set forth under the heading "Where You Can Find More Information." TERMS OF THE EXCHANGE OFFER GENERAL. In connection with the issuance of the old notes pursuant to a purchase agreement, dated as of November 12, 1999, between North American Van Lines and the initial purchasers, the initial purchasers and their respective assignees became entitled to the benefits of the registration rights agreement. Under the registration rights agreement, we have agreed (1) to use our commercially reasonable best efforts to cause to be filed with the Commission the registration statement of which this prospectus is a part with respect to a registered offer to exchange the old notes for the new notes and (2) to use all commercially reasonable efforts to cause the registration statement to be declared effective under the Securities Act within 210 calendar days after the initial issuance of the old notes. We will keep the exchange offer open for the period required by applicable law, but in any event for at least ten business days after the date notice of the exchange offer is mailed to holders of the old notes. Because the exchange offer was not consummated on or before the 240th day after the original issue date of the old notes, the interest rate borne by such old notes was increased by 0.50% per annum in the aggregate. This additional interest will accrue until the exchange offer is consummated. Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date will be accepted for exchange. New notes will be issued in exchange for an equal principal amount of outstanding old notes accepted in the exchange offer. Old notes may be tendered only in integral multiples of $1,000. This prospectus, together with the letter of transmittal, is being sent to all registered holders as of , 2002. The exchange offer is not conditioned upon any minimum principal amount of old notes being tendered for exchange. However, the obligation to accept old notes for exchange pursuant to the exchange offer is subject to certain customary conditions as set forth herein under "--Conditions." Old notes shall be deemed to have been accepted as validly tendered when, as and if we have given oral or written notice of such acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of old notes for the purposes of receiving the new notes and delivering new notes to such holders. Based on interpretations by the Staff of the Commission as set forth in no-action letters issued to third parties (including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5, 1991), K-III Communications Corporation (available May 14, 1993) and Shearman & Sterling (available July 2, 1993)), we believe that the new notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by any holder of such new notes, other than any such holder that is a broker-dealer or an "affiliate" of us within the meaning of Rule 405 under the Securities Act, without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that: - such new notes are acquired in the ordinary course of business, - at the time of the commencement of the exchange offer such holder has no arrangement or understanding with any person to participate in a distribution of such new notes, and 16 - such holder is not engaged in, and does not intend to engage in, a distribution of such new notes. We have not sought, and do not intend to seek, a no-action letter from the Commission with respect to the effects of the exchange offer, and there can be no assurance that the Staff would make a similar determination with respect to the new notes as it has in such no-action letters. By tendering old notes in exchange for new notes and executing the letter of transmittal, each holder will represent to us that: - any new notes to be received by it will be acquired in the ordinary course of business, - it has no arrangements or understandings with any person to participate in the distribution of the old notes or new notes within the meaning of the Securities Act, and - it is not our "affiliate," as defined in Rule 405 under the Securities Act. If such holder is a broker-dealer, it will also be required to represent that the old notes were acquired as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of new notes. See "Plan of Distribution." Each holder, whether or not it is a broker-dealer, shall also represent that it is not acting on behalf of any person that could not truthfully make any of the foregoing representations contained in this paragraph. If a holder of old notes is unable to make the foregoing representations, such holder may not rely on the applicable interpretations of the Staff of the Commission and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction unless such sale is made pursuant to an exemption from such requirements. Each broker-dealer that receives new notes for its own account in exchange for old notes where such new notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act and that it has not entered into any arrangement or understanding with us or an affiliate of ours to distribute the new notes in connection with any resale of such new notes. See "Plan of Distribution." Upon consummation of the exchange offer, any old notes not tendered will remain outstanding and continue to accrue interest at the rate of 13 3/8% but, with limited exceptions, holders of old notes who do not exchange their old notes for new notes in the exchange offer will no longer be entitled to registration rights and will not be able to offer or sell their old notes, unless such old notes are subsequently registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. With limited exceptions, we will have no obligation to effect a subsequent registration of the old notes. EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION. The Expiration Date shall be , 2002, unless North American Van Lines, in its sole discretion, extends the exchange offer, in which case the Expiration Date shall be the latest date to which the exchange offer is extended. To extend the Expiration Date, we will notify the exchange agent of any extension by oral or written notice and will notify the holders of old notes by means of a press release or other public announcement prior to 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date. Such announcement may state that we are extending the exchange offer for a specified period of time. We reserve the right (1) to delay acceptance of any old notes, to extend the exchange offer or to terminate the exchange offer and not permit acceptance of old notes not previously accepted if any of the conditions set forth under "--Conditions" shall have occurred and shall not have been waived by us prior to the Expiration Date, by giving oral or written notice of such delay, extension or termination to the exchange agent, or 17 (2) to amend the terms of the exchange offer in any manner deemed by us to be advantageous to the holders of the old notes. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice of such delay, extension, termination or amendment to the exchange agent. If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the holders of the old notes of such amendment. Without limiting the manner in which we may choose to make public announcement of any delay, extension, amendment or termination of the exchange offer, we shall have no obligations to publish, advertise, or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency. INTEREST ON THE NEW NOTES Each new note will accrue interest at the rate of 13 7/8% per annum from the last interest payment date on which interest was paid on the old note surrendered in exchange for such new note to the day before the consummation of the exchange offer and thereafter, at the rate of 13 3/8% per annum, PROVIDED, that if an old note is surrendered for exchange on or after a record date for an interest payment date that will occur on or after the date of such exchange and as to which interest will be paid, interest on the new note received in exchange for such old note will accrue from the date of such interest payment date. Interest on the new notes is payable on December 1 and June 1 of each year. No additional interest will be paid on old notes tendered and accepted for exchange. PROCEDURES FOR TENDERING To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile of such letter of transmittal, have the signatures on such letter of transmittal guaranteed if required by such letter of transmittal, and mail or otherwise deliver such letter of transmittal or such facsimile, together with any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the Expiration Date. In addition, either - certificates of old notes must be received by the exchange agent along with the applicable letter of transmittal, or - a timely confirmation of a book-entry transfer of such old notes, if such procedure is available, into the exchange agent's account at the book-entry transfer facility, The Depository Trust Company, pursuant to the procedure for book-entry transfer described below, must be received by the exchange agent prior to the Expiration Date with the applicable letter of transmittal, or - the holder must comply with the guaranteed delivery procedures described below. THE METHOD OF DELIVERY OF OLD NOTES, LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE NOTE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO OLD NOTES, LETTERS OF TRANSMITTAL OR OTHER REQUIRED DOCUMENTS SHOULD BE SENT TO US. Delivery of all old notes (if applicable), letters of transmittal and other documents must be made to the exchange agent at its address set forth below. Holders may also request their respective brokers, dealers, commercial banks, trust companies or nominees to effect such tender for such holders. The tender by a holder of old notes will constitute an agreement between such holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the applicable letter of transmittal. Any beneficial owner whose old notes are registered in the name of a broker, dealer, 18 commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on his behalf. Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by any member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor" institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934 (each, an "Eligible Institution") unless the old notes tendered pursuant to such letter of transmittal or notice of withdrawal, as the case may be are tendered (1) by a registered holder of old notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal or (2) for the account of an Eligible Institution. If a letter of transmittal is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such person should so indicate when signing, and unless waived by us, provide evidence satisfactory to us of their authority to so act must be submitted with such letter of transmittal. All questions as to the validity, form, eligibility, time of receipt and withdrawal of the tendered old notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all old notes not properly tendered or any old notes which, if accepted, would, in the opinion of counsel for us, be unlawful. We also reserve the absolute right to waive any irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Neither we, the exchange agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of old notes, nor shall any of them incur any liability for failure to give such notification. Tenders of old notes will not be deemed to have been made until such irregularities have been cured or waived. Any old note received by the exchange agent that is not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost to such holder by the exchange agent, unless otherwise provided in the letter of transmittal, as soon as practicable following the Expiration Date. In addition, we reserve the right in our sole discretion, subject to the provisions of the indentures pursuant to which the notes are issued, - to purchase or make offers for any old notes that remain outstanding subsequent to the Expiration Date or, as set forth under "--Conditions," to terminate the exchange offer, - to redeem old notes as a whole or in part at any time and from time to time, as set forth under "Description of Notes--Optional Redemption," and - to the extent permitted under applicable law, to purchase old notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer. ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES Upon satisfaction or waiver of all of the conditions to the exchange offer, all old notes properly tendered will be accepted promptly after the Expiration Date, and the new notes will be issued promptly after acceptance of the old notes. See "--Conditions." For purposes of the exchange offer, old notes shall be deemed to have been accepted as validly tendered for exchange when, as and if we have given oral or written notice thereof to the exchange agent. For each old note accepted for exchange, the holder of such old note will receive a new note having a principal amount equal to that of the surrendered old note. 19 In all cases, issuance of new notes for old notes that are accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of - certificates for such old notes or a timely book-entry confirmation of such old notes into the exchange agent's account at the applicable book-entry transfer facility, - a properly completed and duly executed letter of transmittal, and - all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer, such unaccepted or such nonexchanged old notes will be returned without expense to the tendering holder of such notes, if in certificated form, or credited to an account maintained with such book-entry transfer facility as promptly as practicable after the expiration or termination of the exchange offer. BOOK-ENTRY TRANSFER The exchange agent will make a request to establish an account with respect to the old notes at the book-entry transfer facility for purposes of the exchange offer within two business days after the date of this prospectus. Any financial institution that is a participant in the book-entry transfer facility's systems may make book-entry delivery of old notes by causing the book-entry transfer facility to transfer such old notes into the exchange agent's account at the book-entry transfer facility in accordance with such book-entry transfer facility's procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at the book-entry transfer facility, the letter of transmittal or facsimile thereof with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the exchange agent at one of the addresses set forth below under "--Exchange Agent" on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with. EXCHANGING BOOK-ENTRY NOTES The exchange agent and the book-entry transfer facility have confirmed that any financial institution that is a participant in the book-entry transfer facility may utilize the book-entry transfer facility Automated Tender Offer Program ("ATOP") procedures to tender old notes. Any participant in the book-entry transfer facility may make book-entry delivery of old notes by causing the book-entry transfer facility to transfer such old notes into the exchange agent's account in accordance with the book-entry transfer facility's ATOP procedures for transfer. However, the exchange for the old notes so tendered will only be made after a book-entry confirmation of the book-entry transfer of old notes into the exchange agent's account, and timely receipt by the exchange agent of an agent's message and any other documents required by the letter of transmittal. The term "agent's message" means a message, transmitted by the book-entry transfer facility and received by the exchange agent and forming part of a book-entry confirmation, which states that the book-entry transfer facility has received an express acknowledgment from a participant tendering old notes that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce such agreement against such participant. GUARANTEED DELIVERY PROCEDURES If the procedures for book-entry transfer cannot be completed on a timely basis, a tender may be effected if - the tender is made through an Eligible Institution, 20 - prior to the Expiration Date, the exchange agent receives by facsimile transmission, mail or hand delivery from such Eligible Institution a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, which (1) sets forth the name and address of the holder of old notes and the amount of old notes tendered, (2) states that the tender is being made thereby, and (3) guarantees that within three New York Stock Exchange ("NYSE") trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the Eligible Institution with the exchange agent, and - the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery. WITHDRAWAL OF TENDERS Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal to be effective, a written notice of withdrawal must be received by the exchange agent prior to 5:00 p.m., New York City time, on the Expiration Date at the address set forth below under "--Exchange Agent." Any such notice of withdrawal must - specify the name of the person having tendered the old notes to be withdrawn, - identify the old notes to be withdrawn, including the principal amount of such old notes, - in the case of old notes tendered by book-entry transfer, specify the number of the account at the book-entry transfer facility from which the old notes were tendered and specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn old notes and otherwise comply with the procedures of such facility, - contain a statement that such holder is withdrawing its election to have such old notes exchanged, - be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the old notes register the transfer of such old notes in the name of the person withdrawing the tender, and - specify the name in which such old notes are registered, if different from the person who tendered such old notes. All questions as to the validity, form, eligibility and time of receipt of such notice will be determined by us, which determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the tendering holder of such notes without cost to such holder, in the case of physically tendered old notes, or credited to an account maintained with the book-entry transfer facility for the old notes as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures described under "--Procedures for 21 Tendering" and "--Book-Entry Transfer" above at any time on or prior to 5:00 p.m., New York City time, on the Expiration Date. CONDITIONS Notwithstanding any other provision of the exchange offer, we shall not be required to accept for exchange, or to issue new notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time prior to 5:00 p.m., New York City time, on the Expiration Date, we determine in our reasonable judgment that the exchange offer violates applicable law, any applicable interpretation of the Staff of the Commission or any order of any governmental agency or court of competent jurisdiction. The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in our reasonable discretion. Our failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. In addition, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of either indenture under the Trust Indenture Act of 1939, as amended. We are required to use every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the registration statement at the earliest possible time. EXCHANGE AGENT State Street Bank and Trust Company has been appointed as exchange agent for the exchange offer. Questions and requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows: BY MAIL, HAND DELIVERY OR FOR INFORMATION CALL: OVERNIGHT COURIER: (617) 662-1525 State Street Bank and Trust Company FACSIMILE TRANSMISSION NUMBER: Corporate Trust Department (617) 662-1452 5th Floor CONFIRM BY TELEPHONE: 2 Avenue de Lafayette (617) 662-1603 Boston, Massachusetts 02111 Attention: Mackenzie Elijah
FEES AND EXPENSES The expenses of soliciting tenders pursuant to the exchange offer will be borne by us. The principal solicitation for tenders pursuant to the exchange offer is being made by mail; however, additional solicitations may be made by telegraph, telephone, telecopy or in person by our officers and regular employees. We will not make any payments to brokers, dealers or other persons soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket expenses in connection therewith. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of the prospectus and related documents to the beneficial owners of the old notes, and in handling or forwarding tenders for exchange. 22 The expenses to be incurred by us in connection with the exchange offer will be paid by us, including fees and expenses of the exchange agent and trustee and accounting, legal, printing and related fees and expenses. We will pay all transfer taxes, if any, applicable to the exchange of old notes pursuant to the exchange offer. If, however, new notes or old notes for principal amounts not tendered or accepted for exchange are to be registered or issued in the name of any person other than the registered holder of the old notes tendered, or if tendered old notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of old notes pursuant to the exchange offer, then the amount of any such transfer taxes imposed on the registered holder or any other persons will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. CONSEQUENCES OF FAILURE TO EXCHANGE Holders of old notes who do not exchange their old notes for new notes pursuant to the exchange offer will continue to be subject to the restrictions on transfer of such old notes as set forth in the legend on the old notes as a consequence of the issuance of the old notes pursuant to exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the old notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. North American Van Lines does not currently anticipate that it will register the old notes under the Securities Act. To the extent that old notes are tendered and accepted in the exchange offer, the trading market for untendered and tendered but unaccepted old notes could be adversely affected because the liquidity of this market will be diminished and their restrictions on transfer will make them less attractive to potential investors than the new notes. REGULATORY REQUIREMENTS Following the effectiveness of the registration statement covering the exchange offer, no material federal or state regulatory requirement must be complied with in connection with this exchange offer. 23 USE OF PROCEEDS There will be no proceeds from the issuance of new notes pursuant to the exchange offer. The net proceeds from the original offering were $145.4 million, after deducting discounts and commissions and expenses of the original offering payable by North American Van Lines. We used the net proceeds from the original offering primarily to finance the Allied Acquisition. 24 CAPITALIZATION The following table sets forth NAVL's total capitalization at March 31, 2002. This table should be read in conjunction with the audited and unaudited financial statements and related notes appearing elsewhere in this prospectus and "Management's Discussion and Analysis of Financial Condition and Results of Operations."
AS OF MARCH 31, 2002 ---------------------- (DOLLARS IN THOUSANDS) Cash and cash equivalents................................... $ 25,646 ======== Debt, including current maturities: Revolving credit facility................................. $ 56,600 Term loans................................................ 284,596 Notes..................................................... 150,000 Other debt(1)............................................. 22,227 -------- Total debt.............................................. 513,423 Stockholders' equity........................................ 118,419 -------- Total capitalization........................................ $631,842 ========
- ------------------------ (1) Comprised of capital lease obligations of $20,164, NAVL foreign subsidiary borrowings on lines of credit of $855 and other debt of $1,208. 25 SELECTED HISTORICAL FINANCIAL DATA We derived our selected historical financial data for the years 1997 and 1999 through 2001 and for the three month period ended March 28, 1998 and for the nine month period ended December 26, 1998 from our audited financial statements or those of our predecessor for the periods then ended. Our selected historical financial data for the periods presented ending after November 19, 1999 (the date of completion of the Allied Acquisition) includes financial data of Allied. Our selected historical financial data as of and for the three months ended March 31, 2002 and 2001, respectively, are derived from our unaudited interim financial statements. The unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the financial condition and results of operations as of and for the periods presented. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. The presentation of selected historical financial data is only a summary and you should read it together with our historical financial statements and related notes.
ANNUAL DATA ------------------------------------------------------------------------------------------ PREDECESSOR(1) NAVL ----------------------------- ---------------------------------------------------------- NINE MONTH THREE MONTH PERIOD FROM PERIOD FROM MARCH 29, DECEMBER 28, 1998 1997 (INCEPTION) YEAR ENDED THROUGH THROUGH YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 27, MARCH 28, DECEMBER 26, DECEMBER 25, DECEMBER 31, DECEMBER 31, 1997 1998 1998 1999(2) 2000(2)(3) 2001(2)(3) ------------- ------------- ------------- ------------ ------------ ------------ (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Operating revenues................... $ 941.5 $ 207.3 $ 759.2 $1,159.8 $2,378.7 $2,249.3 Restructuring and other unusual charges(4)......................... (5.5) 4.6 -- 9.1 4.9 4.9 Income/(loss) from operations........ 31.2 (1.3) 11.5 (1.1) 49.8 53.3 Income/(loss) from continuing operations......................... 20.0 (0.7) (1.2) (16.5) (17.1) (10.6) Discontinued operations--income net of income taxes(5)................. 2.3 -- -- -- -- -- Income/(loss) before extraordinary charge............................. 22.3 (0.7) (1.2) (16.5) (17.1) (10.6) Extraordinary charge--debt retirement, net of income tax benefit(6)......................... -- -- -- (3.4) -- -- Income (loss) before cumulative effect of accounting change........ 22.3 (0.7) (1.2) (19.9) (17.1) (10.6) Cumulative effect of accounting change, net of tax(7).............. -- -- -- -- -- (0.3) Net income (loss).................... 22.3 (0.7) (1.2) (19.9) (17.1) (10.9) BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents............ $ 2.9 $ 9.2 $ 2.1 $ 25.2 $ 43.5 $ 32.1 Working capital...................... 62.0 63.2 31.4 32.7 13.7 (28.2) Property and equipment, net.......... 57.8 56.4 73.6 165.9 158.7 165.4 Total assets......................... 302.3 284.3 392.1 1,162.1 1,216.6 1,095.8 Total debt(8)........................ 0.7 0.7 168.6 554.8 562.6 525.0 Stockholder's equity................. 108.1 101.0 63.7 167.7 145.1 121.8 OTHER DATA: Net cash provided by (used for) operating activities............... $ 28.9 $ 10.3 $ (1.6) $ 11.6 $ 52.8 $ 111.3 Capital expenditures................. 10.6 1.4 5.7 12.7 55.4 48.3 Agent contract expenditures(9)....... 9.2 2.2 1.5 1.8 2.2 1.4 Depreciation and amortization(10).... 12.5 2.9 22.5 31.2 53.9 48.7 Ratio of earnings to fixed charges(11)........................ 7.61 0.01 1.74 0.96 1.63 1.66 EBITDA, as defined(12)............... 38.2 6.2 34.0 43.4 130.2 125.0 THREE MONTH DATA --------------------------- (UNAUDITED) --------------------------- THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, MARCH 31, 2001 2002 ------------ ------------ (DOLLARS IN MILLIONS) STATEMENT OF OPERATIONS DATA: Operating revenues................... $ 510.4 $ 429.7 Restructuring and other unusual charges(4)......................... 0.2 (0.7) Income/(loss) from operations........ (4.4) 6.2 Income/(loss) from continuing operations......................... 5.2 (3.3) Discontinued operations--income net of income taxes(5)................. -- -- Income/(loss) before extraordinary charge............................. 5.2 (3.3) Extraordinary charge--debt retirement, net of income tax benefit(6)......................... -- -- Income (loss) before cumulative effect of accounting change........ 5.2 (3.3) Cumulative effect of accounting change, net of tax(7).............. (0.3) -- Net income (loss).................... 4.9 (3.3) BALANCE SHEET DATA (AT END OF PERIOD): Cash and cash equivalents............ 37.2 $ 25.6 Working capital...................... 20.8 (42.4) Property and equipment, net.......... 153.2 165.1 Total assets......................... 1,153.3 1,042.3 Total debt(8)........................ 558.6 513.4 Stockholder's equity................. 139.3 118.4 OTHER DATA: Net cash provided by (used for) operating activities............... $ 5.3 $ 16.1 Capital expenditures................. 9.8 8.6 Agent contract expenditures(9)....... 0.3 0.3 Depreciation and amortization(10).... 12.0 8.6 Ratio of earnings to fixed charges(11)........................ 0.78 1.36 EBITDA, as defined(12)............... 12.8 16.0
- ------------------------ (1) On March 29, 1998, SIRVA (whose majority shareholder is Clayton, Dubilier & Rice Fund V Limited Partnership), through its wholly owned subsidiary NA Acquisition, acquired all of the outstanding shares of 26 common stock of North American Van Lines. On such date, NA Acquisition was merged into North American Van Lines with North American Van Lines as the surviving corporation and remaining a wholly owned subsidiary of SIRVA. The acquisition was accounted for as a purchase in accordance with U.S. GAAP. The consolidated financial statements for periods prior to March 29, 1998 have been prepared on the historical cost basis using accounting principles that had been adopted by our predecessor. After our acquisition by Clayton, Dubilier & Rice Fund V Limited Partnership on March 29, 1998, we changed our accounting basis to recognize estimated revenue and related transportation expenses when shipments are delivered, the preferred method under U.S. GAAP. Our predecessor company recognized estimated revenue and related transportation expenses when shipments were loaded. Management estimates that the impact of this difference on reported operating revenues and income from operations is not material. (2) Includes financial data of Allied from November 19, 1999. On November 19, 1999, we completed the acquisition of Allied from Exel plc, formerly known as NFC plc, which was accounted for as a purchase. The terms of the acquisition provided for an adjustment to the purchase price pertaining to the amount of net controllable assets acquired as of the date of the Allied Acquisition. We were unable to negotiate the final amount of net controllable assets acquired with Exel, and therefore, a third party arbitator was engaged for resolution of that amount in accordance with the terms of the acquisition agreement. On September 12, 2001, the third party arbitrator rendered a binding determination. The arbitrator determined that the amount of the net controllable assets as of the acquisition date was greater than the amount estimated in the acquisition agreement by $18.1 million, resulting in an increase of the purchase price of $18.1 million. Interest on the purchase price adjustment of $3.3 million was paid for the period from the acquisition date to the date when we made payment and was accounted for as interest expense. The acquisition agreement also contained indemnification obligations on Exel for certain tax payments made by us on behalf of Exel. These tax payments plus associated interest totaled $4.0 million and were deducted from the purchase price adjustment. Our cash payment to Exel on October 19, 2001, for the net balance owed to Exel totaled $17.4 million. The purchase adjustment resulted in a net increase to goodwill of $18.1 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Financial Condition--Allied Acquisition and Arbitration Settlement." (3) On December 31, 2001, we completed a stock-for-stock merger with Moveline, Inc., under an agreement and plan of merger, dated as of November 9, 2001, pursuant to which Moveline merged with one of our wholly owned subsidiaries with such subsidiary as the surviving corporation. Under the terms of the merger agreement, Moveline's stockholders received a fraction of a share of common stock of our parent, SIRVA, for each Moveline share acquired in the merger. Immediately following the merger, we contributed the surviving subsidiary to Allied Van Lines, Inc., another of our wholly-owned subsidiaries. Allied Van Lines subsequently merged with that subsidiary, with Allied Van Lines as the surviving corporation. In connection with the stock-for-stock merger, Clayton, Dubilier & Rice Fund V Limited Partnership acquired 176,057 additional shares of common stock of SIRVA, Inc. Moveline, which was founded and spun-off by SIRVA on August 1, 2000, had developed and marketed a proprietary information technology-based customer care solution that builds upon the relocation industry's historical van-line business model. Prior to the merger, Clayton, Dubilier & Rice Fund V Limited Partnership held a majority of the capital stock of both Moveline and SIRVA. In accordance with the accounting rules for mergers of entities under common control, our merger with Moveline has been accounted for in a manner similar to a pooling-of-interests since it was acquired from Clayton, Dubilier & Rice Fund V Limited Partnership, the controlling shareholder of Moveline and our parent, SIRVA. Our consolidated financial statements have been restated to include the combined results of operations, financial position and cash flows of Moveline since its inception. As a result of the merger, all material intercompany accounts and transactions with Moveline have been eliminated in consolidation. 27 Operating revenues and net loss previously reported by the separate companies and the combined amounts presented in the accompanying Consolidated Statement of Operations are as follows:
YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- (DOLLARS IN MILLIONS) Operating Revenues: North American Van Lines, Inc....................... $ 2,228.8 $ 2,371.9 Moveline, Inc....................................... 26.6 9.0 Eliminations........................................ (6.1) (2.2) ---------- ---------- Combined............................................ $ 2,249.3 $ 2,378.7 ========== ========== Net Loss: North American Van Lines, Inc....................... $ (2.7) $ (10.3) Moveline, Inc....................................... (8.2) (6.8) ---------- ---------- Combined.............................................. $ (10.9) $ (17.1) ========== ==========
Fees and expenses related to the merger and costs to integrate the combined companies were expensed in the fourth quarter 2001. (4) Restructuring and other unusual charges or credits (which are also reflected as adjustments to EBITDA) have been included in this line item as follows: (a) in the three months ended March 31, 2002, we recorded $0.7 million of restructuring credit pertaining to the logistics services' parts centers as we were able to sublease certain parts centers facilities earlier than originally estimated; (b) in the three months ended March 31, 2001 we incurred $0.2 million of restructuring charges relating to our moving and storage services segment's U.K. branch network and the elimination of management redundancy within the industrial moving unit (which we refer to as the "U.K. restructuring"); (c) in the year ended December 31, 2001, we incurred $4.9 million of restructuring charges, of which $4.3 million related to exiting the logistics services' parts center business and associated headcount reductions and $0.6 million relate to the U.K. restructuring; (d) in the year ended December 31, 2000 we incurred $4.9 million of restructuring charges consisting of $2.7 million of costs relating to the U.K. restructuring and $2.2 million of restructuring charges in connection with implementing Fast Forward (a long-term initiative designed to improve productivity and profitability targeted as improving efficiency by eliminating or streamlining work processes and reducing costs by eliminating redundant equipment, facilities and related headcount); (e) in the year ended December 25, 1999 we incurred $4.1 million of restructuring expense for severance related costs, building lease terminations and losses on the sale of equipment, all related to implementing Fast Forward and $5.0 million of expense related to a customer contract termination and related settlement costs; (f) in 1998, the predecessor incurred incremental compensation of $4.6 million due to contracts with key executives with incentive provisions to encourage them to remain with the predecessor until a sale of the business was completed and (g) in 1997, the predecessor received payment in settlement of an auto liability insurance coverage dispute which had been in litigation. (5) Represents the reversal of liabilities attributable to discontinued operations, from reductions in accrued casualty and workers' compensation claims based on actuarial valuations. (6) During 1999, we retired debt resulting in an extraordinary charge of $3.4 million, net of applicable income tax benefit. (7) Effective January 1, 2001 we adopted FAS Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") as amended, which resulted in a change in method of accounting. The cumulative effect of this accounting change was a loss of $0.5 million ($0.3 million, net of tax). See "Management's Discussion and Analysis of Financial Condition and of Operations--Accounting Change." (8) Total debt consists of long-term debt, current portion of long-term debt, capital lease obligations, amounts outstanding under the revolving credit facility forming part of our senior credit facility and other short-term debt. 28 (9) Represents cash outflows to agents to secure long-term contracts. (10) Includes depreciation expense for property and equipment and amortization expense for intangible assets and deferred agent contract expenditures. Excludes amortization expense for deferred debt issuance costs, which are recorded as part of interest expense. (11) For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations plus fixed charges less capitalized interest. Fixed charges consist of (i) interest whether expensed or capitalized, (ii) the amortization of deferred debt issuance costs and (iii) an allocation of one-third of the rental expense from operating leases, which management considers to be a reasonable approximation of the interest factor of operating lease payments. For the three months ended March 31, 2001, the year ended December 25, 1999 and the three month period ended March 28, 1998, earnings were insufficient to cover fixed charges by approximately $4.5 million, $1.1 million and $1.3 million, respectively. (12) EBITDA for the historical periods presented is generally calculated in accordance with the definition of that term given in the senior credit agreement governing our senior credit facility (including certain allowable adjustments) and includes Allied's results since November 19, 1999, the date of completion of the Allied Acquisition. EBITDA is determined by combining income (loss) from operations, restructuring and other unusual charges, depreciation and amortization, nonoperating income (loss) and allowable EBITDA adjustments. EBITDA, as defined, is calculated as follows:
NINE MONTH THREE MONTH PERIOD FROM PERIOD FROM MARCH 29, DECEMBER 28, 1998 1997 (INCEPTION) YEAR ENDED THROUGH THROUGH YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 27, MARCH 28, DECEMBER 26, DECEMBER 25, DECEMBER 31, DECEMBER 31, 1997 1998 1998 1999 2000 2001 ------------ ------------ ------------ ------------ ------------ ------------ (DOLLARS IN MILLIONS) Income (loss) from operations......... $31.2 $(1.3) $11.5 $(1.1) $ 49.8 $ 53.3 Restructuring and other unusual charges............ (5.5) 4.6 -- 9.1 4.9 4.9 Depreciation and amortization....... 12.5 2.9 22.5 31.2 53.9 48.7 Nonoperating income (expense).......... -- -- -- -- 0.3 -- EBITDA adjustments... -- -- -- 4.2 21.3 18.1 ----- ----- ----- ----- ------ ------ EBITDA............... $38.2 $ 6.2 $34.0 $43.4 $130.2 $125.0 ===== ===== ===== ===== ====== ====== THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, MARCH 31, 2001 2002 ------------- ------------- (DOLLARS IN MILLIONS) Income (loss) from operations......... $ (4.4) $ 6.2 Restructuring and other unusual charges............ 0.2 (0.7) Depreciation and amortization....... 12.0 8.6 Nonoperating income (expense).......... (0.2) 0.4 EBITDA adjustments... 5.2 1.5 ------ ------ EBITDA............... $ 12.8 $ 16.0 ====== ======
EBITDA adjustments have been included in this line item as follows: (a) in the three months ended March 31, 2002, we incurred $1.5 million of EBITDA adjustments consisting of $0.4 million of EBITDA losses incurred by Moveline, permitted under an amendment to the credit agreement governing our senior credit facility, referred to as "Moveline Related Strategic Initiatives", $0.6 million of e-commerce spending and $0.5 million for the development and implementation of new information technology; (b) in the three months ended March 31, 2001 we incurred $5.2 million of EBITDA adjustments consisting of $3.8 million of Moveline Related Strategic Initiatives, $0.3 million of expense related to achieving certain cost savings through synergies arising as a result of the combination with Allied, $0.9 million of e-commerce spending and $0.2 million for the development and implementation of new information technology; (c) in the year ended December 31, 2001, we incurred 29 $18.1 million of EBITDA adjustments, consisting of $11.6 million of Moveline Related Strategic Initiatives, $3.3 million of e-commerce spending, $0.3 million of expense related to achieving certain cost savings through synergies arising as a result of the combination with Allied, $2.2 million for the development and implementation of new information technology and $0.7 million for additional expenses pertaining to exiting the parts centers business; (d) in the year ended December 31, 2000, we incurred $21.3 million of EBITDA adjustments, consisting of $11.4 million of Moveline Related Strategic Initiatives, $5.1 million of expense related to achieving certain cost savings through synergies arising as a result of the combination with Allied, $3.0 million of special pension termination expense and $1.8 million of e-commerce spending and (e) in the year ended December 25, 1999, we incurred $4.2 million of EBITDA adjustments, consisting primarily of incremental expenses of $3.4 million for professional services in connection with developing Fast Forward. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations as determined by generally accepted accounting principles, and our calculation thereof may not be comparable to that reported by other companies. We believe that it is widely accepted that EBITDA provides useful information regarding a company's ability to service and/or incur indebtedness. EBITDA does not take into account a company's working capital requirements, debt service requirements and other commitments and, accordingly, is not necessarily indicative of amounts that may be available for discretionary use. 30 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Our operating revenues are derived from the following business segments: (1) our van line network, (2) our logistics services and (3) our moving and storage services. Our operating income and cash flow from operations are influenced by industry volume and market share as well as selling prices for our services. Additionally, they are impacted by the availability and cost of hauling capacity and by a number of significant business, economic and competitive factors, many of which are not within our control. Our van line network segment, which is based in North America and operates under the northAmerican, Allied and Global brand names, provides two types of relocation services: (1) domestic, which provides residential relocation services in the United States and Canada through a network of exclusive agents who provide the sales, packing, loading, transportation, delivery and warehousing services; and (2) international, which primarily markets to multi-national companies most often based in the United States and provides or coordinates relocation services for residential shipments destined to or originating in foreign countries using our exclusive agent network in North America and authorized representatives around the world to complete the service offering. Our logistics services segment consists of (1) logistics solutions, which includes finished goods distribution, order fulfillment, project-specific delivery management and the tracking of products through the supply chain, with a focus on high-value products; (2) specialized transportation services, which facilitates the movement of computers, electronics, telecommunications and medical equipment, trade show exhibition materials, fine art and other products that require specialized transportation, distribution or delivery solutions; and (3) European operations, which handles logistics solutions and specialized transportation of high-value products to and from any major city in the United Kingdom and Europe. Our moving and storage services segment operates in the United Kingdom, Europe, Australia and Asia/Pacific through a network of company-owned branches that utilize the Pickford or Allied Pickfords brand names among others. This segment provides complete domestic and international residential relocation services, including sales, packing, loading, transportation, delivery and warehousing. The moving and storage services segment also provides records management and office and industrial relocation services. Customers of the van line network and moving and storage services segments include (1) corporate accounts, (2) private transferees and (3) government and military. Financial Reporting Release No. 60, which was recently issued by the Securities and Exchange Commission ("SEC"), requires all registrants to discuss critical accounting policies or methods used in the preparation of financial statements. Note 1 to the consolidated financial statements includes a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements. The following is a review of the more significant accounting policies and methods used by the Company: REVENUE RECOGNITION: We recognize estimated gross revenue to be invoiced to the transportation customer and all related transportation expenses on the date a shipment is delivered or services are completed. The estimate of revenue remains in a receivable account called Delivered Not Processed ("DNP") until the customer is invoiced. Concurrent with the DNP estimate, we recognize an accrual for Purchased Transportation Expenses ("PTE") to account for the estimated costs of packing services, transportation expenses and other such costs associated with the service delivery. The estimate for PTE is not reversed until we receive actual charges. INSURANCE RESERVES: We estimate costs relating to cargo damage and delay claims based on actuarial methods and our history of loss data, which approximates 10 years. Our multiple-line property and 31 commercial liability insurance group sets its reserve rates based on a percentage of earned premium. The percentage is based on historical data, run rates and actuarial methods. PENSIONS AND OTHER POSTRETIREMENT BENEFITS: We provide a range of benefits to our employees and retired employees, including defined benefit retirement plans, postretirement health care and life insurance benefits and post-employment benefits (primarily severance). We record annual amounts relating to these plans based on calculations specified by U.S. GAAP, which include various actuarial assumptions, such as discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend rates. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. As required by U.S. GAAP, the effect of the modifications is generally recorded or amortized over future periods. We believe that the assumptions utilized in recording the Company's obligations under our plans, which are presented in Note 12 to the consolidated financial statements, are reasonable based on our experience and advice from our actuaries. INCOME TAXES: We follow Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In addition, the amounts of any future tax benefits are reduced by a valuation allowance to the extent such benefits are not expected to be realized on a more likely than not basis. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the areas where estimation is significant are as follows: (a) DNP is the estimated revenues associated with shipments delivered or services completed and not invoiced; (b) PTE is the associated purchased transportation expense that is estimated corresponding to the DNP revenue; (c) accounts and notes receivable reserves for doubtful accounts are estimated based on historical write-off data to establish the uncollectible portion of the receivables; (d) costs relating to cargo damage and delay claims are estimated based on actuarial methods; and (e) loss reserves of our insurance subsidiaries are estimated using third party actuaries to estimate insurance reserves. RESULTS OF OPERATIONS Our operating revenues are derived from our van line network, logistics services and our moving and storage services segments. Transportation expenses for the van line network are comprised of payments to: - owner/operators or agents driven on a predetermined rate schedule to provide equipment and haul shipments, - owner/operators or agent crews for services such as packing, crating, loading and unloading, - agents for booking (sales activity), estimating and customer service, and - other third parties such as ocean freight carriers for other transportation services. 32 Transportation expenses for the moving and storage segment are similar to those of the van line network, except that expenses incurred to provide moving and storage services are largely in the form of direct labor and equipment expenses rather than in the form of agent or owner/operator expenses. Transportation expenses for the logistics services segment are comprised of the following: - payments to owner/operators, employee or agent drivers on a predetermined rate schedule to provide equipment and haul shipments, - payments to owner/operators, employee or agent crews for services such as pick-up, delivery and installation, - facility and equipment costs, including lease expense and labor costs associated with running the transportation network and our equipment, - payments to agents for booking (sales activity) and customer service, and - sub-contracted transportation expenses in providing supply chain management services. Operating expenses include our consolidated insurance and claims, bad debt and general and administrative expenses. Employee compensation and benefits account for over 50% of general and administrative expense. Other significant components of general and administrative expenses are communication costs, rent, supplies and other purchased services. Our financial statements reflect operations since our acquisition by Clayton, Dubilier & Rice Fund V Limited Partnership on March 29, 1998 through December 26, 1998, for the years ended December 25, 1999, December 31, 2000 and 2001 and for the three months ended March 31, 2002. After our acquisition by Clayton, Dubilier & Rice Fund V Limited Partnership, in accordance with Emerging Issues Task Force 91-9, "Revenue and Expense Recognition for Freight Services in Process", we changed our accounting basis and recognize estimated revenue and direct costs when shipments are delivered. Our predecessor company recognized estimated revenue and direct costs when shipments were loaded. Management believes the impact of this difference on reported operating revenues and income from operations is not material. The results of operations for the period December 28, 1997 through March 28, 1998 represents the historical results of operations of our predecessor under the ownership of Norfolk Southern Corporation prior to the closing of the Clayton, Dubilier & Rice Fund V Limited Partnership acquisition. Solely to facilitate comparison and assessment of the trends in the results of operations, the following presentation of results of operations for the year ended December 26, 1998 was obtained by combining the historical results of operations of our predecessor for the period from December 28, 1997 through March 28, 1998 with our results of operations for the period from March 29, 1998 through December 26, 1998 (the "1998 Period") adjusted for the effects of purchase accounting as if the transaction had occurred as of December 28, 1997. Prior to the Allied Acquisition on November 19, 1999, we had operated on a fiscal calendar ending on the Saturday nearest to December 31 of each year. To coordinate our accounting calendar with Allied's following the Allied Acquisition, we recorded the operations of North American Van Lines and its non-Allied subsidiaries for the last week of December 1999 as January 2000 business. This has resulted in an additional week (the "2000 Additional Week") in the year ended December 31, 2000, as compared to the year ended December 25, 1999 and the year ended December 31, 2001. Our financial and operating data for the periods ending after November 19, 1999 include financial and operating data of Allied. 33 The following table sets forth the percentage relationship of certain items to our operating revenues for the periods indicated:
THREE MONTHS THREE MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED DECEMBER 27, 1998 DECEMBER 25, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31, (PERCENT OF REVENUES) 1997 PERIOD 1999 2000 2001 2001 2002 - --------------------- ------------- -------- ------------- ------------- ------------- ------------ ------------ Operating revenues: Van line network...... 55.1% 52.7% 51.1% 62.2% 61.7% 57.0% 54.9% Logistics services.... 44.9% 47.3% 45.7% 24.2% 23.6% 27.6% 26.7% Moving and storage services............ n/a n/a 3.2% 13.6% 14.7% 15.4% 18.4% ----- ----- ----- ----- ----- ----- ----- Operating revenues...... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Transportation and operating expenses............ 97.3% 99.1% 99.3% 97.7% 97.4% 100.9% 98.7% Restructuring and other unusual charges............. (0.6)% 0.4% 0.8% 0.2% 0.2% 0.0% (0.2)% ----- ----- ----- ----- ----- ----- ----- Income (loss) from operations............ 3.3% 0.5% (0.1)% 2.1% 2.4% (0.9)% 1.5% Interest income (expense)........... 0.1% (1.6)% (1.9)% (2.8)% (2.8)% (3.1)% (2.9)% ----- ----- ----- ----- ----- ----- ----- Income (loss) before taxes................. 3.4% (1.1)% (2.0)% (0.7)% (0.4)% (4.0)% (1.4)% Income tax provision (benefit)........... 1.3% (0.3)% (0.6)% 0.0% 0.1% (5.0)% (0.6)% Discontinued operations/ extraordinary charge/ cumulative effect..... 0.3% n/a (0.3)% n/a (0.0)% (0.0)% n/a ----- ----- ----- ----- ----- ----- ----- Net income (loss)....... 2.4% (0.8)% (1.7)% (0.7)% (0.5)% 1.0% (0.8)% ===== ===== ===== ===== ===== ===== ===== Income (loss) from operations: Van line network...... 1.6% 0.2% 0.1% 1.0% 1.4% (0.9)% 0.7% Logistics services.... 1.7% 0.3% (0.3)% 0.2% (0.1)% (0.6)% 0.2% Moving and storage services............ n/a n/a 0.1% 0.9% 1.1% 0.6% 0.6% ----- ----- ----- ----- ----- ----- ----- Income (loss) from operations............ 3.3% 0.5% (0.1)% 2.1% 2.4% (0.9)% 1.5% ===== ===== ===== ===== ===== ===== =====
34 THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001. The following table sets forth certain figures regarding our results of operations for the three months ended March 31, 2002, compared to the three months ended March 31, 2001.
THREE THREE MONTHS MONTHS ENDED ENDED % INCREASE MARCH 31, MARCH 31, (DECREASE) FROM 2002 2001 PRIOR PERIOD(A) ---------- ---------- --------------- (DOLLARS IN MILLIONS) Operating revenues: Van line network......................................... $235.6 $291.2 (19.1)% Logistics services....................................... 114.9 140.8 (18.4)% Moving and storage services.............................. 79.2 78.4 1.0 % ------ ------ Operating revenues......................................... $429.7 $510.4 (15.8)% ====== ====== Gross margin............................................... $ 91.0 $ 98.4 (7.5)% Operating expenses....................................... 85.5 102.6 (16.7)% Restructuring............................................ (0.7) 0.2 f ------ ------ Income (loss) from operations.............................. $ 6.2 $ (4.4) f ====== ====== Income (loss) from operations: Van line network......................................... $ 3.0 $ (4.4) f Logistics services....................................... 0.9 (2.8) f Moving and storage services.............................. 2.3 2.8 (17.9)% ------ ------ $ 6.2 $ (4.4) f ====== ======
- ------------------------ (a) Percentages are reflected except when greater than 100%, in which case an "f" for favorable or a "u" for unfavorable is shown. Shipment counts are a measure of activity commonly used by the transportation industry. The following table represents shipments handled by the van line network and logistics services segments. A van line network shipment is the movement of household goods from the point of origin to the final destination. Logistics services shipments represent the movement of truckload or less-than-truckload quantities of products from the point of origin to the final destination. Our moving and storage services segment, which operates outside of North America (principally the United Kingdom and Australia), primarily generates revenues among the following activities: domestic moving, international moving, business moving services and records management. While shipments are an indicator of revenue in residential moving, aggregate shipment counts for our moving and storage services segment are not routinely prepared and therefore are not provided.
NUMBER OF SHIPMENTS ----------------------- THREE THREE MONTHS MONTHS ENDED ENDED % INCREASE MARCH 31, MARCH 31, (DECREASE) FROM 2002 2001 PRIOR PERIOD ---------- ---------- --------------- Van line network: U.S. and Canada.................................... 39,200 48,400 (19.0)% International...................................... 6,200 9,100 (31.9)% Special products division.......................... 17,400 17,700 (1.7)% Logistics services: Specialized transportation......................... 77,400 87,600 (11.6)% European operations................................ 93,300 102,000 (8.6)%
35 OPERATING REVENUES. Operating revenues for the three months ended March 31, 2002 were $429.7 million, a decrease of $80.7 million compared to the same period in 2001 primarily as a result of the factors discussed below. Revenue in the van line network for the three months ended March 31, 2002 decreased $55.6 million as compared to the three months ended March 31, 2001 due primarily to the general economic slowdown which resulted in lower shipment activity of approximately 20% and 16% in the Allied and northAmerican lines, respectively, and in the international unit. The shortfall was partially offset by higher insurance unit revenues of $1.5 million due to additional product offerings and an expanded customer base. Revenue in logistics services decreased $25.9 million in the three months ended March 31, 2002 as compared to the three months ended March 31, 2001 due primarily to reduced shipments within specialized transportation and reduced activity levels in freight forwarding. Also, revenues were $4.9 million lower than in the three months ending March 31, 2001 as we exited the parts center business at the end of 2001. These reductions were partially offset by new volume in logistics solutions due to the addition of new customers and increased volume with existing customers. Revenue in moving and storage services increased $0.8 million in the three months ended March 31, 2002 as compared to the three months ended March 31, 2001. This was primarily due to an increase in Asia Pacific revenue, as Asia business and the domestic and international moving business in Australia improved. Records management business also improved for the three months ended March 31, 2002 as compared to the three months ended March 31, 2001. This was partially offset by softness in U.K. industrial moving. GROSS MARGIN. Gross margin for the three months ended March 31, 2002 was $91.0 million, a decrease of $7.4 million compared to the three months ended March 31, 2001. The decrease was due primarily to a shipment volume decline due to the general economic slowdown. The gross margin (as a percentage of sales) was 21.2% for the three months ended March 31, 2002 and was 19.3% for the three months ended March 31, 2001. This increase was due primarily to customer mix and operating and service delivery efficiencies. OPERATING EXPENSES. Operating expenses for the three months ended March 31, 2002 were $85.5 million, a decrease of $17.1 million compared to the three months ended March 31, 2001. The decrease is primarily due to reduced shipment volume, which resulted in reduced cargo and related claims expense. General and administrative expenses are lower, as cost containment programs continue, such as delayering the organization and generally reducing discretionary expenses. Also, effective January 2002, we adopted Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", under which goodwill is no longer amortized but is reviewed at least annually for impairment. The resultant decrease due to the elimination of goodwill amortization was $2.8 million. As a percentage of revenue, operating expenses were 19.9% for the three months ended March 31, 2002, compared to 20.1% for the three months ended March 31, 2001. RESTRUCTURING. In the three months ended March 31, 2002, we incurred $0.7 million of restructuring credit pertaining to the logistics parts centers, as we were able to sublease certain parts centers facilities earlier than originally estimated. In the three months ended March 31, 2001, we incurred $0.2 million of costs relating to the U.K. restructuring. INCOME (LOSS) FROM OPERATIONS. Income from operations for the three months ended March 31, 2002 was $6.2 million, compared to a loss of $4.4 million for the same period in 2001 as a result of the factors discussed below. Income from operations in the van line network for the three months ended March 31, 2002 as compared to the three months ended March 31, 2001 increased $7.4 million primarily due to lower cargo claims related expense and reduced general and administrative expenses. Insurance unit margins were 36 higher due to additional product offerings and an expanded customer base. Income from operations in the van line network for the three months ended March 31, 2002 was also higher than for the three months ended March 31, 2001 due to a year-over-year FAS 133 derivatives gain of $1.8 million and the expenses associated with the January 2001 agent convention. These favorable variances were partially offset by lower Allied and northAmerican lines margins as a result of the general economic slowdown. Income from operations in logistics services for the three months ended March 31, 2002 was $0.9 million, an increase of $3.7 million compared to the three months ended March 31, 2001 due to lower general and administrative expenses and the elimination of $0.4 million of goodwill amortization. Also, there was a credit of $0.7 million in the parts center restructuring reserve. This was partially offset by lower margins due to the reduction in shipment volume. Income from operations for the moving and storage services segment decreased $0.5 million in the three months ended March 31, 2002 as compared to the three months ended March 31, 2001. Gross margin was lower due to revenue mix. Also, the unfavorable variance was attributable to $1.1 million of lower year-over-gains relating to outstanding foreign currency exchange contracts. This was partially offset by the elimination of goodwill amortization, which was $1.1 million in the three months ended March 31, 2001. INTEREST EXPENSE. Interest expense for the three months ended March 31, 2002 was $12.6 million compared to $15.8 million in the three months ended March 31, 2001. This decrease is due primarily to lower interest rates. INCOME TAX BENEFIT. For the three months ended March 31, 2002, the income tax benefit was $2.7 million based on a pre-tax loss of $6.0 million. For the three months ended March 31, 2001, the income tax benefit was $25.6 million based on a pre-tax loss of $20.4 million. Our estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This difference is primarily due to (1) the non-deductibility of certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable income that is greater than income reported for financial statement purposes. 37 YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000. The following table sets forth certain figures regarding our results of operations for the year ended December 31, 2001, compared to the year ended December 31, 2000.
YEAR YEAR ENDED ENDED % INCREASE DECEMBER 31, DECEMBER 31, (DECREASE) FROM 2001 2000 PRIOR PERIOD(A) ------------- ------------- --------------- (DOLLARS IN MILLIONS) Operating revenues: Van line network................................... $1,386.9 $1,478.7 (6.2)% Logistics services................................. 532.0 576.6 (7.7)% Moving and storage services........................ 330.4 323.4 2.2 % -------- -------- Operating revenues................................... $2,249.3 $2,378.7 (5.4)% ======== ======== Gross margin......................................... $ 436.9 $ 446.6 (2.2)% Operating expenses................................. 378.7 391.9 (3.4)% Restructuring...................................... 4.9 4.9 0.0% -------- -------- Income from operations............................... $ 53.3 $ 49.8 7.0 % ======== ======== Income (loss) from operations: Van line network................................... $ 31.3 $ 23.1 35.5 % Logistics services................................. (2.5) 4.8 u Moving and storage services........................ 24.5 21.9 11.9 % -------- -------- $ 53.3 $ 49.8 7.0 % ======== ========
- ------------------------ (a) Percentages are reflected except when greater than 100%, in which case an "f" for favorable or a "u" for unfavorable is shown. Shipment counts are a measure of activity commonly used by the transportation industry. The following table represents shipments handled by the van line network and logistics services segments. A van line network shipment is the movement of household goods from the point of origin to the final destination. Logistics services shipments represent the movement of truckload or less-than-truckload quantities of products from the point of origin to the final destination. Our moving and storage services segment, which operates outside of North America (principally the United Kingdom and Australia), generates revenues approximately evenly divided among three major activities: domestic moving, international moving and business moving services. While shipments are an indicator of revenue in residential moving, aggregate shipment counts for our moving and storage services segment are not routinely prepared and therefore are not provided.
NUMBER OF SHIPMENTS ----------------------------- YEAR YEAR ENDED ENDED % INCREASE DECEMBER 31, DECEMBER 31, (DECREASE) FROM 2001 2000 PRIOR PERIOD ------------- ------------- --------------- Van line network: U.S. and Canada.................................... 238,800 271,200 (11.9)% International...................................... 34,200 41,600 (17.8)% Special products division.......................... 65,700 95,100 (30.9)% Logistics services: Specialized transportation......................... 328,900 348,400 (5.6)% European operations................................ 380,300 313,700 21.2 %
38 OPERATING REVENUES. Operating revenues for the year ended December 31, 2001 were $2,249.3 million, a decrease of $129.4 million compared to the same period in 2000 primarily as a result of the factors discussed below. Revenue in the van line network for the year ended December 31, 2001 decreased $91.8 million as compared to the year ended December 31, 2000 due primarily to the general economic slowdown which resulted in lower shipment activity in the Allied and northAmerican lines, the international unit and the special products division. The special products division primarily hauls specialty products such as medical and fitness equipment and tradeshow-related items. The northAmerican line revenue is also lower due to the 2000 Additional Week. These shortfalls were partially offset by increased revenue per shipment in the Allied and northAmerican lines and higher insurance unit revenues of $4.4 million due to additional product offerings and an expanded customer base. Of the $20.9 million decrease in the special products division revenue, $12.5 million was due to the loss of the special products division's largest agent in late 2000. The agent terminated its relationship with us in order to serve another van line, due to contract pricing differences. Revenue in logistics services decreased $44.6 million in the year ended December 31, 2001 as compared to the year ended December 31, 2000 due primarily to the elimination of $14.1 million of revenue associated with the home delivery business, reduced activity levels totaling $15.6 million of revenue in the parts center business which reflects the loss of a major customer (we exited the parts center business at the end of 2001) and lower volume in specialized transportation, principally due to the general economic slowdown. These decreases were partially offset by higher solutions volume due to the addition of new customers and the addition of new business in the European operations. Revenue in moving and storage services increased $7.0 million in the year ended December 31, 2001 as compared to the year ended December 31, 2000. This was primarily due to underlying growth on a local currency basis in records management, increased volume in the residential moving business in the U.K. and industrial moving business improvement year-over-year. The Australia unit of Asia/Pacific also showed improvement due primarily to an increase in international moving. New Zealand has increased its revenue due to an acquisition made in late 2000. This was partially offset by an unfavorable currency impact of $19.8 million. For the year ended December 31, 2001, the Pound Sterling, the Australian dollar and the Euro were weaker as compared to the year ended December 31, 2000 by approximately 5%, 11% and 3%, respectively, when translated into the relatively stronger U.S. Dollar. GROSS MARGIN. Gross margin for the year ended December 31, 2001 was $436.9 million, a decrease of $9.7 million compared to the year ended December 31, 2000. The decrease was due primarily to a shipment volume decline due to the general economic slowdown. The gross margin (as a percentage of sales) was 19.4% for the year ended December 31, 2001 and was 18.8% for the year ended December 31, 2000. This increase was due primarily to customer mix and operating and service delivery efficiencies. OPERATING EXPENSES. Operating expenses for the year ended December 31, 2001 were $378.7 million, a decrease of $13.2 million compared to the year ended December 31, 2000. The decrease is due to reduced shipment volume, which resulted in reduced cargo and related claims expense. As a percentage of revenue, operating expenses were 16.8% for the year ended December 31, 2001, compared to 16.4% for the year ended December 31, 2000. The increase was due primarily to incremental systems expenses aimed at enhancing applications in our logistics services segment. RESTRUCTURING. In the year ended December 31, 2001, we incurred $4.9 million of restructuring expense, of which $4.3 million relates to the exiting of the logistics services parts center business and headcount reductions and $0.6 million relates to the U.K. restructuring. In the year ended December 31, 2000, we incurred $2.7 million of costs relating to the U.K. restructuring and $2.2 million of restructuring charges in connection with our Fast Forward program. 39 INCOME (LOSS) FROM OPERATIONS. Income from operations for the year ended December 31, 2001 was $53.3 million, compared to $49.8 million for the same period in 2000 as a result of the factors discussed below. Income from operations in the van line network for the year ended December 31, 2001 as compared to the year ended December 31, 2000 increased $8.2 million primarily due to lower cargo claims related expense and reduced bad debt and depreciation expense. Also, general and administrative expenses were lower than in the same period in 2000. Insurance unit margins were higher due to additional product offerings and an expanded customer base. These favorable variances were partially offset by lower Allied and northAmerican lines margins as a result of the general economic slowdown, the expenses associated with the January 2001 agent convention and the margin effect of the 2000 Additional Week in the northAmerican line. Loss from operations in logistics services for the year ended December 31, 2001 was $2.5 million, a decrease of $7.3 million compared to the year ended December 31, 2000 due to lower margins in specialized transportation and in the parts centers partially offset by improved margins in programs. Also contributing to the unfavorable performance was $3.3 million of additional restructuring expense year-over-year consisting of severance and employee benefit costs, lease and asset impairment costs related to the exiting of the parts center business and incremental systems expenses aimed at enhancing solutions applications, partially offset by reduced depreciation expense. The margin effect of the 2000 Additional Week also contributed to the unfavorable variance. Income from operations for the moving and storage services segment increased $2.6 million in the year ended December 31, 2001 as compared to the year ended December 31, 2000. Margins were higher, with improvement in Australia and New Zealand offset by lower margins in the residential moving business in the U.K. Depreciation expense was lower and there was additional restructuring expense that occurred in 2000. The 2001 favorable variance in income from operations was partially offset by an unfavorable currency impact of $1.2 million and lower year-over-year gains relating to outstanding foreign currency exchange contracts. INTEREST EXPENSE. Interest expense for the year ended December 31, 2001 was $62.0 million compared to $67.3 million in the year ended December 31, 2000. This decrease is due primarily to lower interest rates. The decrease in interest expense was partially offset by $3.3 million of interest paid on the purchase price adjustment. See "Financial Condition--Allied Acquisition and Arbitration Settlement." INCOME TAX PROVISION (BENEFIT). For the year ended December 31, 2001, the income tax provision was $1.9 million based on a pre-tax loss of $8.8 million. For the year ended December 31, 2000, the income tax benefit was less than $0.1 million based on a pre-tax loss of $17.1 million. Our estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This difference is primarily due to (1) the non-deductibility of amortization expense associated with certain intangible assets and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable income that is greater than income reported for financial statement purposes. 40 YEAR ENDED DECEMBER 31, 2000 AS COMPARED TO YEAR ENDED DECEMBER 25, 1999 The following table sets forth certain figures regarding our results of operations for the year ended December 31, 2000, compared to the year ended December 25, 1999. The financial and operating data for the years ended December 31, 2000 and December 25, 1999, includes financial and operating data of Allied from November 19, 1999, the date of the Allied Acquisition.
% INCREASE YEAR ENDED YEAR ENDED (DECREASE) FROM DECEMBER 31, 2000 DECEMBER 25, 1999 PRIOR PERIOD(A) ------------------ ------------------ --------------- (DOLLARS IN MILLIONS) Operating revenues: Van line network............................ $1,478.7 $ 593.2 f Logistics services.......................... 576.6 529.7 8.9% Moving and storage services................. 323.4 36.9 f -------- -------- Operating revenues............................ $2,378.7 $1,159.8 f ======== ======== Gross margin.................................. 446.6 240.7 85.5% Operating expenses.......................... 391.9 232.7 68.4% Restructuring and other unusual charge...... 4.9 9.1 (46.2)% -------- -------- Income (loss) from operations................. $ 49.8 $ (1.1) f ======== ======== Income (loss) from operations: Van line network............................ $ 23.1 $ 1.5 f Logistics services.......................... 4.8 (3.6) f Moving and storage services................. 21.9 1.0 f -------- -------- $ 49.8 $ (1.1) f ======== ========
- ------------------------ (a) Percentages are reflected except when greater than 100%, in which case an "f" for favorable or a "u" for unfavorable is shown. Shipment counts are a measure of activity commonly used by the transportation industry. The following table represents shipments handled by the van line network and logistics services segments. A van line network shipment is the movement of household goods from the point of origin to the final destination. Logistics services shipments represent the movement of truckload or less-than-truckload quantities of products from the point of origin to the final destination. Our moving and storage services segment, which operates outside of North America (principally the United Kingdom and Australia), generates revenues approximately evenly divided among three major activities: domestic moving, international moving and business moving services. While shipments are an indicator of revenue in residential moving, aggregate shipment counts for our moving and storage services segment are not routinely prepared and therefore are not provided.
NUMBER OF SHIPMENTS --------------------------------------- % INCREASE YEAR ENDED YEAR ENDED (DECREASE) FROM DECEMBER 31, 2000 DECEMBER 25, 1999 PRIOR PERIOD(A) ------------------ ------------------ --------------- Van Line Network: U.S. and Canada............................. 271,200 107,900 f International............................... 41,600 28,400 46.5% Special products division................... 95,100 12,000 f Logistics Services: Specialized transportation.................. 348,400 332,200 4.9% European operations......................... 313,700 337,700 (7.1)%
- ------------------------ (a) Percentages are reflected except when greater than 100%, in which case an "f" for favorable or a "u" for unfavorable is shown. 41 OPERATING REVENUES. Operating revenues for the year ended December 31, 2000 were $2,378.7 million, an increase of $1,218.9 million compared to the year ended December 25, 1999. This increase is due primarily to the Allied Acquisition. Apart from the impact of the Allied Acquisition, operating revenues in the van line network were higher than in the year ended December 25, 1999 due primarily to a stronger domestic household relocation market, primarily in the first six months of 2000, $20.7 million of revenue resulting from the acquisition of Global, increased revenue per shipment for domestic household goods resulting from the impact of the annual tariff increase and the effect of an industry-wide fuel surcharge, which resulted in $22.2 million of additional revenue. In times of rising fuel costs, tariff regulations allow for a supplemental charge to defray higher fuel costs and provide further insurance against the negative impact of such increases. Although this fuel surcharge results in a favorable variance to revenue, it is passed on to our drivers, and has no effect on our absolute margin, but slightly reduces our gross margin as a percentage of sales. Such fuel surcharge was reinstated by the industry in December 1999. In addition to the impact of the Allied Acquisition, operating revenues in logistics services were higher than in the year ended December 25, 1999 due primarily to increased volume with our specialized transportation customers, as shipments rose 4.9%, additional programs with logistics solutions clients such as Ericsson, Hitachi Data Systems, Micron and Hewlett Packard and the impact of fuel surcharges. The inclusion of the Additional Week in our operating results for the year ended December 31, 2000 also contributed somewhat to the increase in operating revenues in both the van line network and logistics services segments. GROSS MARGIN. Gross margin for the year ended December 31, 2000 was $446.6 million, an increase of $205.9 million compared to the year ended December 25, 1999. The increase is due primarily to the Allied Acquisition. The gross margin (as a percentage of sales) for the year ended December 31, 2000 was 18.8% and was 20.8% for the year ended December 25, 1999. This decrease was due primarily to an increase in the residential hauling commission paid to our haulers in the van line network and a decrease in the gross margin in the logistics services due to the mix impact of certain products offered in the year ended December 31, 2000 versus the year ended December 25, 1999, partially offset by higher margins in the moving and storage service business. OPERATING EXPENSES. Operating expenses for the year ended December 31, 2000 were $391.9 million, an increase of $159.2 million compared to the year ended December 25, 1999. The increase is due primarily to the Allied Acquisition. As a percentage of revenue, operating expenses were 16.5% for the year ended December 31, 2000, compared to 20.1% for the year ended December 25, 1999. This was primarily due to cost savings from synergies as a result of the combination with Allied and cost savings from Fast Forward. RESTRUCTURING AND OTHER UNUSUAL CHARGE. In the year ended December 31, 2000, we incurred $2.7 million of costs relating to the U.K. restructuring and $2.2 million of restructuring charges in connection with our Fast Forward program. In the year ended December 25, 1999, we incurred $4.1 million of restructuring charges relating to the Fast Forward program primarily for severance related costs and $5.0 million of expense related to a customer contract termination and related settlement costs. INCOME (LOSS) FROM OPERATIONS. Income (loss) from operations for the year ended December 31, 2000 was $49.8 million, compared to a loss of $1.1 million for the year ended December 25, 1999. This improvement is due primarily to the Allied Acquisition. Apart from the Allied Acquisition, this increase was primarily the result of the improved performance of our northAmerican line in the domestic household goods business of the van line network, the increased revenues in logistics services as discussed above and the acquisition of Global. INTEREST EXPENSE. Interest expense for the year ended December 31, 2000 was $67.3 million compared to $21.4 million in the year ended December 25, 1999. This increase is due primarily to the additional debt incurred in connection with the Allied Acquisition. 42 INCOME TAX PROVISION (BENEFIT). For the year ended December 31, 2000, the income tax benefit was less than $0.1 million based on a pre-tax loss of $17.1 million. The variance from statutory rates is due primarily to the permanent nature of certain non-deductible intangible assets, which results in us having a greater taxable income amount for purposes of the provision than it will show as income (loss) before income taxes in the financial statements. For the year ended December 25, 1999, the income tax benefit was $6.4 million based on a pre-tax loss of $23.0 million. FINANCIAL CONDITION The SEC recently issued Financial Reporting Release No. 61, which sets forth the views of the SEC regarding enhanced disclosures relating to liquidity and capital resources. The information provided below about our cash flows, debt, credit facilities, capital and operating lease obligations and future commitments is included here to facilitate a review of our liquidity. LIQUIDITY AND CAPITAL RESOURCES We broadly define liquidity as our ability to generate sufficient cash flow from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives. Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and meeting debt service commitments. Our short-term and long-term liquidity needs will arise primarily from: - interest expense, which was $62.0 million in 2001, and is expected to approximate $59.0 million in 2002 (excluding any indebtedness we may incur in connection with acquisitions that we expect to make in the second quarter of 2002); - principal repayments of debt, which will total $17.0 million in 2002, $22.0 million in 2003, $21.9 million in 2004, $36.7 million in 2005, $109.7 million in 2006 and $250.2 million thereafter; - capital expenditures, which were $48.3 million in 2001, and are expected to approximate $38.0 million in 2002, and - working capital requirements as may be needed to support business growth. The notes mature on December 1, 2009. If we are unable to refinance the amounts outstanding under the senior credit facilities and the notes when they become due and payable, we could default on our debt obligations, including our obligations to make payments on the notes. See "Risk Factors--Risks Relating to the Notes--We may not have enough cash available to service our indebtedness." Additionally, the seasonal nature of the moving business results in increased short-term working capital requirements in the summer months. This will result in an increase in revolving credit borrowings which are typically collected and repaid by the late fall. Due to this seasonality, we can operate with negative working capital due to the turnover of our accounts receivable and access to our revolving credit facility. ALLIED ACQUISITION AND ARBITRATION SETTLEMENT. On November 19, 1999, we completed the acquisition of Allied from Exel plc, formerly NFC plc, which was accounted for as a purchase. The terms of the acquisition provided for an adjustment to the purchase price pertaining to the amount of net controllable assets acquired as of the date of the Allied Acquisition. We were unable to negotiate the final amount of net controllable assets acquired with Exel, and therefore, a third party arbitrator was engaged for resolution of that amount in accordance with the terms of the acquisition agreement. 43 On September 12, 2001, the third party arbitrator rendered a binding determination. The arbitrator determined that the amount of net controllable assets as of the acquisition date was greater than the amount estimated in the acquisition agreement by $18.1 million, resulting in an increase of the purchase price by $18.1 million. Interest expense on the purchase price adjustment of approximately $3.3 million was paid for the period from the acquisition date to the date when we made the payment. The acquisition agreement also contained indemnifications by Exel for certain tax payments made by us on behalf of Exel. These tax payments plus associated interest totaled approximately $4.0 million and were deducted from the purchase price adjustment. On October 19, 2001, we paid approximately $17.4 million to Exel for the net balance owed. The purchase price adjustment resulted in a net increase to goodwill of approximately $18.1 million. DEBT SERVICE. Principal and interest payments under our senior credit facility and interest payments on the notes represent significant liquidity requirements for us. As of March 31, 2002, we had $513.4 million of indebtedness comprised of indebtedness for borrowed money and capital leases, consisting of - the $150.0 million principal amount of our 13 3/8% senior subordinated notes, - $284.6 million outstanding under our term loans (consisting of a tranche A term loan and a tranche B term loan amounting to $124.7 million and $159.9 million, respectively), - $56.6 million outstanding under our $150.0 million revolving credit facility, - $20.2 million of capital leases, and - $2.0 million of other debt. As a result, we are required to devote a substantial amount of our cash flow to service this indebtedness. We are required to repay our tranche A term loan in quarterly principal payments over seven years and our tranche B term loan in quarterly principal payments over eight years. We are required to repay any amounts borrowed under the revolving credit facility forming part of our senior credit facility by the seventh anniversary of the initial borrowings under the senior credit facility. All borrowings under the senior credit facility bear interest at floating rates based upon the interest rate option elected by us. During 2002, 2001 and 2000, additional interest capped at a maximum amount of 0.50% per annum was paid on our 13 3/8% senior subordinated notes in accordance with the registration rights agreement pertaining to such notes, as a registered exchange offer for such notes had not yet been consummated. In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under the tranche B term loan facility. See "Management's Discussion and Analysis of Financial Condition and of Operations--Subsequent Events." COVENANT RESTRICTIONS. The senior credit facility imposes restrictions on our ability to make capital expenditures. Additionally, the senior credit facility, the indenture governing the notes and the agreements governing SIRVA's senior discount debt limit our ability to incur additional indebtedness. Such restrictions could limit our ability to - respond to certain market conditions, - meet our capital spending program, - provide for unanticipated capital investments or - take advantage of business opportunities. 44 The covenants in the senior credit facility also, among other things, restrict our ability to - dispose of assets, - incur guarantee obligations, - prepay other indebtedness, - make restricted payments, - create liens, - make equity or debt investments, - make acquisitions, - modify terms of the indenture, - engage in mergers or consolidations, - change the business conducted by us, - make capital expenditures or - engage in certain transactions with affiliates. The indenture and the agreements governing SIRVA's senior discount debt contain a number of similar restrictions. CAPITAL AND AGENT CONTRACT EXPENDITURES. Capital expenditures for 2001 were $48.3 million which primarily consisted of computer equipment, software development and transportation and warehouse equipment. During 2001, we entered into various vehicle, trailer and equipment leases totaling $14.3 million, which are being accounted for as capital leases. The leases require us to pay customary operating and repair expenses that will keep these assets in operating and roadworthy condition. In the van lines network, we commit to certain payments to agents as an incentive either to convert from a competing van line or to renew or otherwise enter into long-term contracts with us. Agent contract expenditures in 2001 were $1.4 million. We anticipate agent contract expenditures to be $3.5 million in 2002. FINANCING SOURCES. As of March 31, 2002, there was approximately $77.5 million available under the revolving credit facility forming part of our senior credit facility to meet our future working capital and other business needs. We believe that cash generated from operations, which was $111.3 million, primarily from the collection of accounts receivable for the year ended December 31, 2001, together with amounts available under the revolving credit facility and any other available source of liquidity will be adequate to permit us to meet our debt service obligations, capital expenditure program requirements, ongoing operating costs and working capital needs for at least the next twelve months. Our future operating performance and ability to service or refinance the notes and to repay, extend, or refinance our senior credit facility will be, among other things, subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. We made a $21.9 million prepayment of tranche A and tranche B debt on March 29, 2002, due to excess cash flow in 2001, as defined in our senior credit facility. Of that amount, approximately $4.2 million 45 replaced principal payments due at that time, with the remaining approximately $17.7 million reducing future principal payments. The following table provides a summary, as of December 31, 2001, of our contractual obligations related to debt, leases and other commercial commitments:
PAYMENTS DUE BY PERIOD ----------------------------------------- LESS THAN 1 1-3 4-5 AFTER 5 CONTRACTUAL OBLIGATIONS TOTAL YEAR YEARS YEARS YEARS - --------------------------------------------------- -------- -------- -------- -------- -------- (DOLLARS IN MILLIONS) Long-Term Debt..................................... $457.4 $ 17.0 $ 43.8 146.4 250.2 Capital Lease Obligations.......................... 20.4 4.0 5.4 7.2 3.8 Operating Leases................................... 233.0 49.4 69.8 44.8 69.0 Unconditional Purchase Obligations................. 9.8 5.2 3.9 0.7 -- ------ ------ ------ ------ ------ Total Contractual Cash Obligations................. $720.6 $ 75.6 $122.9 $199.1 $323.0 ====== ====== ====== ====== ======
In addition, we guarantee operating lines of credit maintained by wholly-owned foreign subsidiaries. As of December 31, 2001 and 2000, the outstanding balance was $1.2 million and $1.9 million, respectively. In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under our senior credit facility. See "Management's Discussion and Analysis of Financial Condition and of Operations--Subsequent Events." OFF BALANCE SHEET ARRANGEMENTS During 2001, we sold a portion of our equipment notes receivable portfolio to an unaffiliated third party. The transaction, which qualified as a sale under Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" resulted in cash proceeds of $6.3 million, which approximated the fair value of notes receivables sold. The equipment notes receivable are due from agents or owner-operators for trailers, tractors and straight trucks and are collateralized by those assets. Each note is generally for a term of five years, bearing interest at either a fixed or variable rate of prime plus 1.0% - 2.0%. Principal and interest are payable monthly over the term of the agreement. Under the terms of the sales agreement, we are responsible for servicing, administering, and collecting these notes receivable on behalf of the unaffiliated third party. Servicing fees under the sales agreement are deemed adequate compensation to us for performing the servicing and, accordingly, no servicing asset or liability has been recognized in the accompanying financial statements. Under the terms of the transaction, the maximum recourse exposure to us was $0.7 million. RELATED PARTY TRANSACTIONS We are parties to a consulting agreement with Clayton Dubilier and Rice, Inc. whereby Clayton Dubilier and Rice, Inc. receives a management fee for financial advisory and management consulting services. For the three months ended March 31, 2002 and the years ended December 31, 2001 and 2000 and December 25, 1999, such fees were $0.125 million, $1.375 million, $0.4 million and $0.4 million, respectively. We have guaranteed loans in an aggregate principal amount of $0.5 million and $0.021 million as of March 31, 2002 and December 31, 2001, respectively, to various members of management in connection with their investment in our parent, SIRVA. These loans mature on various dates in 2004 and bear interest at the prime rate plus 1.0%. See "Certain Relationships and Related Party Transactions." 46 FOREIGN CURRENCY TRANSLATION The following is a historical discussion of currency translations. The future magnitude and direction of the adjustments described depends on the relationship of the U.S. Dollar to other foreign currencies. The effects of foreign currency fluctuations in our foreign operations are somewhat mitigated by the fact that the majority of expenses are incurred in the same currency in which corresponding revenues are generated. Operating revenues from operations outside of the United States during 2001 amounted to $450.1 million, or 20.0% of our operating revenues. At December 31, 2001, approximately 47.1% of our total long-lived assets were denominated in currencies other than the U.S. Dollar. The functional currency for our international subsidiaries is the local currency for the country in which the subsidiaries own their primary assets. We have operations in several foreign countries including those that use the Canadian dollar, the British pound sterling, the Australian dollar or the Euro as their functional currencies. The translation of the applicable currencies into U.S. Dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The effect of U.S. Dollar currency exchange rates in Canada, the U.K., Europe, Australia and the other countries in which we operate produced a net currency translation adjustment loss of $0.80 million, which was recorded as an adjustment to stockholders' equity as an element of other comprehensive income, for the three months ended March 31, 2002. INFLATION We believe that inflation generally does not have a material effect on the results of our operations. SEASONALITY Our operations are subject to seasonal trends common to the moving industry. Results of our operations for the quarters ending in December and March are typically lower than the quarters ending in June and September due to reduced shipments in the winter months. With respect to the van line network, over half of the network revenue is typically generated from May through September. For logistics services, shipping requirements of the customer base result in higher shipment volumes at the end of each quarter. Moving and storage services experiences seasonality with respect to residential relocations; however, this is somewhat diminished by the geographic diversity of our business moving activities and involvement with other non-seasonal operations such as records management and office moving. ACCOUNTING CHANGE Effective January 1, 2001, we adopted SFAS 133 as amended which resulted in a change in method of accounting. The cumulative effect of this accounting change was a loss of $0.5 million ($0.3 million, net of tax). SFAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivation instruments embedded in other contracts, and for hedging activities. It requires recognition of all derivatives as either assets or liabilities on the balance sheet and the measurement of those instruments at fair value. Changes in the fair value of derivatives will be recorded in each period in earnings or accumulated other comprehensive income ("OCI"), depending upon whether a derivative is designated and is effective as part of a hedge transaction and, if it is, the type of hedge transaction. If the instrument is designated as a qualifying hedge transaction and is confirmed to be effective, the effective portions of the changes in the fair value of the derivative are recorded in OCI and are recognized in the income statement when the hedged item affects earnings. Ineffective portions are recognized in earnings. Derivative gains or losses included in OCI are reclassified into earnings at the time when the hedged items affect earnings. During the three months ended March 31, 2002, a loss of $1.1 million was reclassified to interest expense. During the three months ended March 31, 2002, ineffectiveness related to cash flow hedges was income of $0.02 million. 47 RECENT ACCOUNTING PRONOUNCEMENTS In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") that supersede Accounting Principles Board ("APB") Opinion No. 16, "Business Combinations", and APB Opinion No. 17, "Intangible Assets". The two statements modify the method of accounting for business combinations and address the accounting and reporting for goodwill and intangible assets. SFAS 141 is effective for all business combinations initiated after June 30, 2001 and all business combinations accounted for by the purchase method for which the date of acquisition is after June 30, 2001. The adoption of SFAS 141 did not have a material effect on our operating results or financial condition. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. Beginning in 2002, we no longer amortize goodwill on a straight-line basis, but instead evaluate goodwill for impairment annually. Also, amortization of approximately $10.9 million on an annualized basis has ceased. We completed the goodwill evaluation process and determined there was no impairment. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), superseding SFAS 121, effective for fiscal years beginning after December 15, 2001. The provisions of SFAS 144 are for long-lived assets to be disposed of by sale or otherwise are effective for disposal activities initiated by an entity's commitment to a plan after the initial date of adoption of SFAS 144. We are currently assessing the impact of SFAS 144 on our operating results and financial condition. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to various market risks, including changes in interest rates and foreign currency exchange rates. We are exposed to various interest rate risks that arise in the normal course of business. We finance our operations with borrowings comprised primarily of variable rate indebtedness. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service indebtedness. An increase of 1% in interest rates payable on our variable rate indebtedness would increase our annual interest rate expense by approximately $2.5 million. We utilize interest rate agreements and foreign exchange contracts to manage interest rate and foreign currency exposures. The principal objective of such contracts is to minimize the risks and/or costs associated with financial and international operating activities. We do not utilize financial instruments for trading purposes. The counterparties to these contractual arrangements are financial institutions with which we also have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the other parties, and no material loss would be expected from their nonperformance. We had three open interest rate swap agreements as of March 31, 2002. The intent of these agreements is to reduce interest rate risk by swapping an unknown variable interest rate for a fixed rate. These agreements qualify for hedge accounting treatment. Therefore, market rate changes are reported in OCI. The following is a recap of each agreement. Notional amount......................... $40.0 million $70.0 million $20.0 million Fixed rate paid......................... 4.91% 5.44% 4.785% Variable rate received.................. 3 month LIBOR 1 month LIBOR 1 month LIBOR Expiration date......................... March 2003 December 2002 April 2003
Assets, liabilities, and commitments that are to be settled in cash and are denominated in foreign currencies for transaction purposes are sensitive to changes in currency exchange rates. All material trade 48 receivable balances are denominated in the host currency of the local operation. For the three months ended March 31, 2002 and 2001, we recognized currency gains of $0.6 million and $0.2 million, respectively, for transactional related items. From time to time, we utilize foreign currency forward contracts in the regular course of business to manage our exposure against foreign currency fluctuations. The forward contracts establish the exchange rates at which we will purchase or sell the contracted amount of U.S. Dollars for specified foreign currencies at a future date. We utilize forward contracts which are short-term in duration (less than one year). The major currency exposures hedged by us are the Australian dollar, the British pound sterling and the Euro. The contract amounts of foreign currency forwards at March 31, 2002 and December 31, 2001 were $4.0 million and $3.5 million, respectively. A hypothetical 10% adverse movement in foreign exchange rates applied to our foreign currency exchange rate sensitive instruments held as of December 31, 2001 would result in a hypothetical loss of approximately $0.35 million. Changes in fair value relating to these derivatives are recognized in current period earnings. For the three months ended March 31, 2002 and 2001, we recognized $0 and $1.1 million, respectively, of gains resulting from changes in the fair value of foreign currency derivatives. The company holds various convertible bonds in the investment portfolio of our insurance operations. The value of the conversion feature is bifurcated from the value of the underlying bond. Changes in fair value are recorded in current period earnings. For the three months ended March 31, 2002 and 2001, we recognized $1.4 million of gains and $0.4 million of losses, respectively. Other assets at March 31, 2002, included marketable equity securities which are classified as available-for-sale and are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income until realized. RESTRUCTURING AND OTHER UNUSUAL CHARGE The following summarizes our restructuring and other unusual charge: - Fast Forward Program In January 1999, with the help of outside consultants, we initiated the Fast Forward Program, which was a detailed evaluation of our existing cost structure. The program was comprised of a number of initiatives, primarily relating to employee redundancy. The charges included estimated severance costs for 237 employees across all our operating divisions, outplacement services and other costs. None of these charges related to the Allied Acquisition. A total of 188 employees were terminated. During 2000, the Fast Forward Program was completed, with remaining severance costs paid in 2001. - Allied Acquisition Included in the acquisition purchase price allocation were restructuring charges related to the Allied Acquisition, which reflected certain severance and relocation costs we incurred to effect a worldwide integration plan for Allied's operations. A total of 66 employees were terminated and 55 were relocated. In 2000, based on an evaluation of the remaining amount needed, a reduction of $1.6 million was made to the restructuring accrual, which was offset by an adjustment to goodwill. During 2000, the program was completed with remaining severance costs paid in 2001. - Moving and Storage Services--UK Operating Segment In 2000, our Moving and Storage Services operating segment initiated programs in its United Kingdom operations in an effort to restructure the branch system and to eliminate management redundancy within its Pickfords Vanguard unit, reducing headcount by 93 employees. Charges were 49 recorded as branch locations were identified for closure. The identification process continued through 2001 and headcount was reduced by an additional 16 employees. The programs were completed in 2001. - Business Needs Staffing Adjustment In November 2000, due to business needs as determined by management, we established a restructuring reserve of $1.1 million whereby headcount was reduced by 50 employees. The charges included estimated severance costs across all of our operating divisions. Severance costs were paid out and the program was completed in 2001. - Logistics Parts Centers In June 2001, our Logistics Services operating segment established a program to exit the Parts Center business. The charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the Parts Center business by the end of 2001. Due to lease terms and severance agreements, certain facility lease payments will continue through September 2005. During the three months ended March 31, 2002, $0.7 million of restructuring credit occurred when we were able to sublease certain Parts Center facilities earlier than originally estimated. - Other Unusual Charge In 1999, we incurred expense of $5.0 million related to a customer contract termination. The settlement agreement provided for reimbursement of costs for cargo claims, delay claims and other costs associated with customer service matters. The settlement allowed us to offset customer receivables against the claim payment otherwise due. As a result of our various restructuring efforts, we have realized savings from the elimination of redundant positions, process innovation, terminal and network efficiencies and other general and administrative savings primarily as a result of process redesign and productivity. SUBSEQUENT EVENTS On April 2, 2002, SIRVA filed a certificate of amendment to its certificate of incorporation with the State of Delaware authorizing SIRVA to increase the number of shares of its common stock from 1,800,000 shares to 2,400,000 shares. On April 12, 2002, we purchased National Association of Independent Truckers, a leading provider of insurance services to independent contract truck drivers, for approximately $30.0 million in cash, and a deferred amount of $3.0 million payable subject to the completion of certain operating performance objectives during 2002 and 2003. National Association of Independent Truckers is an association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical damage and non-trucking liability insurance, as well as access to a suite of professional services. The purchase price was funded from the sale of investments and existing cash balances and $20.0 million of cash from the sale of 140,846 shares of SIRVA common stock to Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton Dubilier and Rice, Inc., and an affiliate of Clayton, Dubilier & Rice Fund V Limited Partnership, the controlling shareholder of SIRVA. On May 3, 2002, SIRVA purchased substantially all the assets of Cooperative Resource Services, Ltd., a business that provides comprehensive relocation services to companies and their employees, including home sale services, relocation logistics services and mortgage lending services. One of our wholly-owned subsidiaries purchased all of such business' assets other than the assets relating to certain mortgage lending operations of the seller. The mortgage lending operations of the seller were purchased by a direct 50 wholly-owned subsidiary of SIRVA. Subject to certain adjustments, the combined cash purchase price for the acquisitions was approximately $60.0 million, of which $3.5 million was paid for the assets of the mortgage lending operations. Approximately $45.0 million of the cash purchase price was paid in cash and $15.0 million was paid in notes issued by us. In addition, certain liabilities relating to the acquired business were assumed in connection with the acquisition, including $26.6 million of indebtedness under a revolving credit facility used to fund the mortgage lending operations, which was assumed by the SIRVA acquisition subsidiary. The cash purchase price for the acquisition, as well as approximately $24.1 million of other indebtedness of the acquired business that was refinanced as part of the acquisition, were financed with the proceeds of $40.0 million of cash from the sale of 281,691 shares of SIRVA common stock to Clayton, Dubilier & Rice Fund VI Limited Partnership, and the incurrence of $50.0 million of additional senior indebtedness. In connection with the investments made by Clayton, Dubilier & Rice Fund VI Limited Partnership on April 12 and May 3, 2002 to finance the acquisitions referred to above, accredited investors who currently hold shares of SIRVA common stock, including members of management, will be offered the opportunity to purchase, on a pro rata basis, additional shares of SIRVA common stock. The total number of shares that is expected to be offered to such stockholders is 204,426. 51 BUSINESS GENERAL We are a leading global relocation and moving services company and also the largest logistics services provider among all U.S. van lines. We are a global network manager of agents, owner/operators and company-owned branches with locations in 21 countries. Our diversified customer base includes many leading Fortune 500 and FTSE-100 companies, private transferees and the government and military of the United States and other countries. On March 29, 1998, NA Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of our parent, SIRVA, Inc., a Delaware corporation, formerly known as Allied Worldwide, Inc. and NA Holding Corporation, acquired (the "1998 Acquisition") all of the capital stock of North American Van Lines from Norfolk Southern Corporation and J.P. Morgan Ventures Corporation. NA Acquisition and SIRVA were formed by Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership, a private investment fund that is managed by Clayton, Dubilier & Rice, Inc. After the 1998 Acquisition, NA Acquisition was merged with and into North American Van Lines with North American Van Lines being the surviving corporation and a direct wholly owned subsidiary of SIRVA. On November 19, 1999, we completed the Allied Acquisition, acquiring the Allied/Pickfords businesses from Exel plc, formerly known as NFC plc. The terms of the Allied Acquisition provided for an adjustment to the purchase price pertaining to the amount of net controllable assets acquired as of the date of the Allied Acquisition. We were unable to negotiate the final amount of net controllable assets acquired with Exel, and therefore, a third party expert was engaged and the matter has been resolved in accordance with the terms of the acquisition agreement. On April 1, 2000, we completed the acquisition of certain assets of Global Van Lines, including the rights to name, marks, operating authorities and agency contracts, for $4.2 million. The Global agents are located throughout the U.S. with a concentration on the West Coast. The acquisition of Global has strengthened our position in the marketplace and increased our share of the domestic relocation business and is expected to improve our hauling balance given growing westward population patterns. On December 31, 2001, we completed a stock-for-stock merger with Moveline, Inc., under an agreement and plan of merger dated as of November 9, 2001, pursuant to which Moveline merged with one of our wholly-owned subsidiaries, with such subsidiary as the surviving corporation. Under the terms of the merger agreement, Moveline's stockholders received a fraction of a share of the common stock of our parent, SIRVA, for each Moveline share acquired in the merger. Immediately following the merger, we contributed the surviving subsidiary to Allied Van Lines, Inc., another of our wholly-owned subsidiaries. Allied Van Lines subsequently merged with that subsidiary with Allied Van Lines as the surviving corporation. In connection with the stock-for-stock merger, Clayton, Dubilier & Rice Fund V Limited Partnership acquired 176,057 additional shares of SIRVA. Prior to the merger, Moveline had developed and marketed a proprietary information technology-based customer care solution that builds upon the relocation industry's historical van line business model. On April 12, 2002, the Company purchased National Association of Independent Truckers, a leading provider of insurance services to independent contract truck drivers, for approximately $30 million in cash, and a deferred amount of $3 million payable subject to the completion of certain operating performance objectives during 2002 and 2003. National Association of Independent Truckers is an association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical damage and non-trucking liability insurance, as well as access to a suite of professional services. To finance a portion of the purchase price, Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton, Dubilier and Rice, Inc., and an 52 affiliate of Clayton, Dubilier & Rice Fund V Limited Partnership, purchased 140,846 shares of SIRVA common stock. On May 3, 2002, SIRVA purchased the relocation services business of Cooperative Resource Services, Ltd. The business provides comprehensive relocation services to companies and their employees, including home sale services, relocation logistics services and mortgage lending services. A wholly-owned subsidiary of North American Van Lines purchased all of such business' assets other than the assets relating to certain mortgage lending operations of the seller. The mortgage lending operations of the seller were purchased by a direct wholly-owned subsidiary of SIRVA. To finance a portion of the purchase price, Clayton, Dubilier & Rice Fund VI Limited Partnership purchased an additional 281,691 shares of SIRVA common stock. BUSINESS SEGMENTS We are a diversified motor carrier operating under the brand names of northAmerican, Global Van Lines, Allied Van Lines, Pickfords and Allied Pickfords; with operations located throughout the United States, Canada, portions of Europe, the United Kingdom, Australia, New Zealand and other Asia/Pacific locations. We conduct our U.S. and Canadian operations primarily through a network of exclusive agents and affiliated representatives on an international basis. We conduct our other foreign operations primarily through 213 locations, which we own and operate directly, using selected other affiliated representatives to complete our service offering on a worldwide basis. We are not dependent on any single or major group of customers or suppliers for our operating revenues. We organize our operations in three segments: van line network, logistics services and moving and storage services ("MSS"). VAN LINE NETWORK SEGMENT Operating under the brand names northAmerican, Allied and Global throughout the United States and Canada, we provide both domestic and international residential relocation services. Our van line network business is primarily conducted through a network of approximately 1,280 exclusive northAmerican, Allied or Global agent locations in the United States and Canada. Agents are independently owned local moving companies that provide customers with the local packing, warehousing and a portion of the hauling required to support household moves anywhere in the world. We, in turn, provide our agents with a broad range of services including identification and coordination of hauling capacity, coordination of shipments, optimization of capacity, sophisticated transportation and logistics technology, brand management, national advertising and a variety of other marketing services. We participate in all lines of the residential relocation interstate transportation business and have a highly diversified customer base, including (1) corporate accounts, (2) private transferees, and (3) government and military. The northAmerican, Allied and Global agents are the primary sales channels for most of our business activities, for which they receive commissions, and market our services locally or as intermediaries with customers. Owner/operators are independent contractors who own and drive their tractors for us. The majority of the equipment used in the van line network is owned by our network of agents and owner/ operators. See "--Agent Network" and "--Owner/Operators." For domestic moves, we coordinate origin and destination activities through our agents. For international moves originating in the United States and Canada, our northAmerican and Global lines act primarily as freight forwarders, arranging for cross-border transportation services with third-party providers and subcontracting with non-exclusive representatives for the hauling, delivery and unpacking required at the destination. With respect to Allied, international moves are coordinated by Allied's international moving services network. This network consists of Allied's wholly-owned moving services companies in the major non-U.S. markets and independent affiliated agents in major U.S. markets. Each network member is responsible for providing origin and freight-forwarding services for moves originating 53 in its country of operation, as well as coordinating destination services using network members in the country of delivery. Customers moving either domestically or internationally contact local agents who obtain shipment details and provide moving cost estimates. Once a quote turns into a booking, the agents register the move with us, and we coordinate all parties involved in the move, including the origination and processing of all documents associated with the transaction. The van line network segment has historically experienced stable pricing for its service offerings, although relocation revenues are subject to seasonal swings and competition from other van lines or service providers for available shipments. In April 2000, we merged a captive insurance subsidiary licensed in Indiana, North American Transport Insurance Company, Inc. into TransGuard Insurance Company of America, Inc. (an Illinois corporation that is licensed in forty-three states). This multiple-line property and commercial liability insurance group insures owner/operators, agents of the Company and various other parties in the transportation industry against loss from certain risks, primarily in cargo warehousing, commercial auto physical damage, commercial auto liability and general liability. LOGISTICS SERVICES SEGMENT The logistics services segment provides customized solutions to facilitate the handling of high-value products that require specialized transport, distribution and installation such as electronics, telecommunications, medical equipment and fine art. Many businesses are outsourcing management of all or a part of their distribution chain, and as a result, third-party logistics providers, such as us, have become extensively involved in the full range of customer supply chain functions. Logistics services include order fulfillment, freight bill auditing and payment, cross-docking, product marking, labeling and packaging, supply chain and warehouse management, parts return and repair and the actual physical movement of goods. Our logistics services segment manages the coordination of complex supply chain networks, with a focus on high-value products that require specialized transport and handling such as electronics, telecommunication equipment and medical equipment. Specifically, we provide our clients with integrated supply chain management, distribution facilities, turnkey new store equipment transportation and set up, freight forwarding and product assembly. Our logistics services segment is organized into three business units: - logistics solutions, which uses customized information technology to coordinate a variety of services such as finished goods and emergency parts distribution, order fulfillment, project-specific delivery management and the tracing of products through the supply chain; - specialized transportation; and - European operations, which handles logistics solutions and specialized transportation of high-value products to and from any major city in the United Kingdom and Europe through wholly owned subsidiaries operating under the trade name midiData. Logistics services manages the cost efficiency of clients' shipments primarily through its OnTrac Network, a system that combines logistics tools with 39 distribution centers and agent service points. We have established numerous ongoing relationships with key corporate logistics clients, including many Fortune 500 companies with no single customer representing more than 5.0% of our logistics services revenue in 2001. These customers are located primarily in the United States, Canada and Europe, with distribution systems that range from regional to global. This segment is driven by corporate customers' increasing need for specialized handling of sophisticated equipment. It has traditionally been focused largely on the computer and electronics sector, but has recently experienced increasing growth in the telecommunications and medical equipment sectors. 54 With our fleet of trailers specifically equipped to handle the loading, unloading and hauling of sensitive, technology based products, we can combine our physical distribution capabilities with our logistics solutions to provide our clients with a complete package of distribution management. The specialized product delivery process is similar to that in relocation services, where corporate accounts contact local representatives to establish shipment requirements and we then coordinate the availability of our specially equipped trailers with the availability of owner/operators who provide the tractor and perform the hauling. The logistics services segment has historically experienced stable pricing. Our revenues are affected by competition from other van lines and from less-than-truckload and logistics service providers, as well as changes in business demand for computer, electronics and other specialty products. In 2000, we also began a comprehensive upgrade of software within the logistics services segment. We intend to utilize this advanced technology in order to better serve our existing customer base and to enhance our ability to attract new customers. MOVING AND STORAGE SERVICES SEGMENT Our MSS segment provides residential relocation services primarily in the United Kingdom, Australia and New Zealand by operating local moving branches which provide similar services as agents perform in the van line network segment. Unlike the van line network, MSS owns or leases property and vehicle assets used in its network. Operating in the United Kingdom under the brand name Pickfords, our MSS segment, through company-owned branches, deals directly with corporate clients, private transferees and government departments. In Australia and New Zealand, we also provide domestic and international relocation services through company-owned branches operating primarily under the Allied Pickfords brand name and some smaller brands. In Asia, the network is a combination of company-owned branches, franchises and preferred agents, with a focus on international, rather than domestic, relocations. In addition to its residential relocation services, Pickfords also provides crating services, storage services and records management which includes, among other things, the cataloging, storage, retrieval, look-up, destruction and transportation of customers' records. Pickfords also provides a full range of office and industrial relocation services involving the transportation of office furnishings and equipment in connection with the relocation of any aspect of a business' operations throughout Europe. Similar services are offered by Allied Pickfords in Australia and New Zealand. Another component of the MSS segment is contract-engineering services such as moving heavy plant equipment and installing electrical facilities. Allied Arthur Pierre, based in Belgium, is a market leader in international residential relocations in Belgium and Luxembourg and also operates in France. Our other moving operations in continental Europe include Allied Varekamp, a market leader in international household relocations in the Netherlands. Allied also has operations in major cities in Eastern Europe, including Budapest, Moscow, Prague and Warsaw. We also operate The Baxendale Insurance Company Ltd. (licensed in Ireland) as part of our MSS segment. Our MSS segment has also experienced stable pricing historically for its relocations service offerings in a competitive market for its services, although relocation revenues are subject to seasonal swings. The industrial moving business, a niche business within the United Kingdom, however, is experiencing strong competitive pricing pressures. Because we own or lease our facilities and equipment, we have some ability to adjust pricing, labor and equipment based on regional demands. AGENT NETWORK In our van line network and logistics services segments, our agents provide (1) local sales, packing and warehousing, (2) hauling services and distribution of goods; and (3) direct sales solicitation and customer development. The agents own the assets associated with operating in their markets (warehouses, tractors, 55 trailers and other equipment) and in many instances have contracts with owner/operators or have hired employee drivers to bring hauling capacity to the network. We have established exclusive long-term relationships with an extensive network of agents in approximately 1,280 locations in the United States and Canada. Agents typically enter into renewable, multiyear contractual relationships with us. We recently concluded negotiations with the Allied agents for a new agency contract, with a term extending to early 2005, which is being executed by agents currently. There can be no assurance that every Allied agent will execute such contract. However, we have historically experienced relatively low agent turnover. Allied agents who have not yet signed the agreement represent approximately 7.9% of 2001 van line segment revenue. No one agent constituted more than approximately 4% of the combined revenues of the van line network and the logistics services segments in 2001. Our agent network in the van line network and logistics services segments comprised approximately 78% of 2001 revenue in those segments. OWNER/OPERATORS Owner/operators are independent contractors with either us or with our agents. They: - provide the hauling skills required to transport shipments interstate; - provide or contract with temporary workers to provide labor required for servicing the customer; - provide an element of customer service at the pick-up or delivery point and - supply equipment they own to provide hauling services. The owner/operators enter into contractual agreements with either us directly or through our agents who set compensation rates and other terms. Owner/operators do not generate revenue through any sales or marketing efforts. We maintain approximately 760 company or agent owner/operators for relocation services and approximately 950 company owner/operators for logistics services. These owner/operators own or lease their own tractors, but in most cases, pull company/agent-owned trailers. Owner/operators provide most of the logistics hauling capacity and supplement the relocation fleet of agent drivers. In addition to the primary owner/operator contract for transportation, we have also developed additional programs or services offered to owner/operators that provide us with additional sources of revenue, including tractor sales and financing, fleet service maintenance and fuel sales and physical damage insurance coverage. As we believe is the case in general in the van line industry, we have had some difficulty in attracting and retaining qualified owner/operators. SALES AND MARKETING Our sales, customer support and marketing department evaluates target markets and sets a customer-driven sales agenda, ensures the consistency of customer communication, directs local input via the Corporate Marketing Agent Advisory Council and provides the ability for agents to locally customize advertising and sales-support programs. Our sales force is comprised of experienced agents and product sales specialists. We provide a broad range of professional sales training programs and customized sales management training to our agents and employees. We also support industry association-based training and certification programs such as the American Moving and Storage Association's Certified Moving Consultant and Registered International Mover. Advertising campaigns work in tandem with directory advertising to create brand awareness in the industry and the market. We advertise primarily on cable television and through national billboard buys. Advertising targets key customer segments, as well as owner/operators. 56 COMPETITION The relocation services business is highly competitive and fragmented. With respect to our van line network, aside from the handful of large van lines, the industry remains extremely fragmented with many small private players that may have strong positions in local markets. We compete primarily with other van lines, truckload carriers and independent contractors and, with respect to certain aspects of its business, intermodal transportation, railroads and less-than-truckload carriers. Intermodal transportation (the hauling of truck trailers or containers on rail cars or ships) has increased in recent years as reductions in train crew size and the development of new rail technology have reduced costs of intermodal shipping. Some of our chief competitors in the van line network are Unigroup (United and Mayflower), Atlas and Bekins. Our quality and customer service in the moving relocation industry are key drivers in the mover selection process. We invest much time and effort to provide value-added services to our customers. This service is exemplified through our history of on-time delivery, strong safety record, numerous quality recognition awards, diverse customer base and long-term agent relationships. The logistics services segment is also highly competitive and fragmented but is consolidating because of the advantages of global distribution networks, large vehicle fleets and global information technology systems. In addition, consolidation is driven by the customers' desire for integrated services, the high growth in international and cross-border delivery segments and, in Europe, the deregulation of European delivery markets. Industry participants are acquiring, merging or forming alliances with partners that can expand global reach, breadth of services or technological capabilities in order to better enable those participants to compete in a rapidly changing global environment. In specialized transportation services, we compete with a broad spectrum of transportation providers including forwarders, brokers and various logistics providers. The primary basis of competition is in performance, specifically within our information technology systems. We offer sophisticated systems approaches to manage and monitor the flow of goods we are transporting and to provide attractive logistics solutions services. Both in North America and Europe, logistics services providers are bundling services to offer single-source logistics solutions. Some of our primary competitors in supply chain management services are Ryder Logistics, FedEx Logistics, Menlo Logistics, Deutsche Post and UPS Logistics. United Van Lines and Uni-Data continue as formidable competitors in the specialized transportation sector. Our MSS segment is also extremely fragmented between regional, national and local companies. Many of these companies may specialize in segments of the moving market such as international, domestic or office moving. Price is a key driver in selection of a mover, so there is a need to operate cost effectively while maintaining high customer service standards. Our chief competitors in the moving and storage services segment include Crown Relocations, Britannia, TransEuro, Amertrans, Sterling, Michael Gerson, White & Company and Interdean in residential relocations, Harrow Green, Edes and Business Moves in office relocation and Beck & Pollitzer and Ainscough in industrial relocation. Competition for the freight we transport is based primarily on service, freight rate, reliability, transit times and scope of operations. In the United States, competition and the reduction in regulation caused by the Motor Carrier Act of 1980 has created downward pressure on the logistics industry's pricing structure. GOVERNMENT REGULATION Our operations are subject to various federal, state, local and foreign laws and regulations that in many instances require permits and licenses. Our U.S. motor carrier operations, as a common and contract carrier, are regulated by the Surface Transportation Board (the "STB") which is an independent, three-member agency within the U.S. Department of Transportation (the "DOT"). The STB has jurisdiction similar to the former Interstate Commerce Commission (the "ICC") which includes issues such as rates, tariffs, antitrust immunity and undercharge and overcharge claims. The DOT, and in particular the Federal Highway Safety Administration (the "FHWSA") within the DOT, also has jurisdiction over such matters as safety, the registration of motor carriers, freight forwarders and brokers, insurance (financial 57 responsibility) matters, financial reporting requirements and enforcement of leasing and loading and unloading practices. In addition to motor carrier operations, we also conduct domestic operations as a licensed or permitted freight forwarder and property broker. Many of the licenses and permits that we hold were issued by the ICC. With respect to interstate motor carrier operations, the FHWSA is the principal regulator in terms of safety including issues such as carrier and driver qualification, drug and alcohol testing of drivers, hours of service requirements and maintenance and qualification of equipment. We are an ocean transportation intermediary pursuant to the Shipping Act of 1984, as amended. As such, we hold ocean freight forwarder licenses issued by the Federal Maritime Commission (the "FMC") and are subject to the FMC bonding requirements applicable to ocean freight forwarders. We also conduct certain operations as a non-vessel-operating common carrier ("NVOCC") and are subject to the regulations relating to FMC tariff filing and bonding requirement bonds, and under the Shipping Act of 1984, particularly with respect to terms thereof proscribing rebating practices. The FMC does not currently regulate the level of our fees in any material respect. Our U.S. customs brokerage activities are licensed by the United States Department of the Treasury and are regulated by the United States Customs Service. We are also subject to similar regulations by the regulatory authorities of foreign jurisdictions in which we operate. With respect to U.S. state and Canadian provincial licenses, the permitting and licensing structure largely parallels the U.S. federal licensing regulatory structure. In the United States, NAVL, Allied and Global have been participants in certain collective activities, including collective rate-making with other motor carriers pursuant to an exemption from the antitrust laws as currently set forth in The Motor Carrier Act of 1980. Over the years, the scope of the antitrust exemption has decreased and there can be no assurance that such exemption from the antitrust laws will continue in the future. The loss of such exemption could result in an adverse effect on our operations or financial condition. In Europe, including the United Kingdom, we hold "O" (operators) licenses, international transport licenses and certificates of professional competences. These licenses are approvals from the relevant local authority permitting the operation of commercial vehicles from specified bases. One of the prerequisites for these licenses is the employment by the relevant business of individuals who hold certain certificates of professional competence. The Baxendale Insurance Company Ltd. and our other insurance subsidiaries such as TransGuard Insurance Company of America, Inc. are subject to extensive supervision and regulation by insurance regulators in their respective jurisdictions, including regulations limiting the transfer of assets, loans, or the payments of dividends from such insurance subsidiaries to their affiliates, including us. Such regulation could limit our ability to draw on these insurance subsidiaries' assets to repay our indebtedness. Any violation of the laws and regulations discussed above could increase claims and/or liabilities, including claims for uninsured punitive damages. Failure to maintain required permits or licenses, or to comply with applicable regulations, including environmental permits and regulations could subject us to fines or, in the event of a serious violation, suspension or revocation of operating authority or criminal penalties. All of these regulatory authorities have broad powers generally governing activities such as authority to engage in motor carrier operations, rates and charges and certain mergers, consolidations and acquisitions. Although compliance with these regulations has not had a materially adverse effect on our operations or financial condition in the past, there can be no assurance that such regulations or any changes to such regulations will not materially adversely impact our operations in the future. Our international operations are conducted primarily through local branches owned or leased by various subsidiaries in 21 countries outside the United States and in a number of additional countries through agents, franchises and non-exclusive representatives. We are subject to certain customary risks inherent in carrying on business abroad, including the effect of regulatory and legal restrictions imposed by 58 foreign governments. As discussed above under "--Moving and Storage Services Segment," our MSS operations are conducted almost exclusively outside of the United States. ENVIRONMENTAL MATTERS Our operations are subject to a range of environmental requirements in the various foreign, federal, state and local jurisdictions in which we operate. In particular, because we own or lease or have in the past owned or leased facilities at which underground storage tanks are located and operated, we are subject to regulations governing the design, construction and operation of underground storage tanks and governing releases from these tanks. We have incurred, and will continue to incur, costs related to our investigation and cleanup of releases of materials from underground storage tanks, though such costs are not expected to have a material adverse effect on our financial position, results of operations or liquidity. We have been named as a potentially responsible party ("PRP") in several environmental cleanup proceedings by federal or state authorities or by other PRPs. The suits are brought under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or other federal or state statutes. Based on all known information, it is estimated that the settlement cost of each PRP site would not be materially or significantly larger than the reserves established. It is possible that additional claims or lawsuits involving known or unknown environmental matters may arise in the future. We actively monitor our compliance with various U.S. federal, state and local environmental regulations and management believes that we are presently in material compliance with all applicable U.S. federal, state and local environmental laws and regulations. Underground storage tanks are monitored on a regular basis by company personnel and pressure tested periodically by qualified third-party providers. The tanks have leak detection systems for early leak detection. Our two main fleet services facilities have environmental assessments on a regular basis. Periodic employee training for proper hazardous material handling is performed in compliance within the required three-year cycle. Further, certain employees are trained on proper shipping procedures, covering DOT and IATA regulations. The majority of expense for such testing and training is for personnel costs for designated trainers to monitor its compliance with foreign environmental regulations and we believe that we are presently in substantial compliance with all applicable foreign environmental laws and regulations. These compliance costs are included in our results of operations and are not material. We can be expected to continue to incur ongoing capital and operating expenses to maintain compliance with applicable environmental requirements, to upgrade existing equipment at its facilities and to meet new regulatory requirements. While it is not possible to predict with certainty future environmental compliance requirements, management believes that future expenditures relating to environmental compliance requirements will not materially adversely affect our financial condition. As conditions may exist on our properties related to environmental problems that are latent or undisclosed, there can be no assurance that we will not incur liabilities or costs, the amount and materiality of which cannot be reliably estimated at this time. However, based on our assessment of facts and circumstances now known, management believes it is unlikely that any identified matters, either individually or in aggregate, will have a material adverse effect on our financial position, results of operations, or liquidity. TRADEMARKS The marks northAmerican-Registered Trademark-, Allied-Registered Trademark-, Home Touch-Registered Trademark- and Worldtrac-Registered Trademark- are registered trademarks. Other brand or product names used in this prospectus are trademarks or registered trademarks of their respective companies. We have been highly active in seeking protection for numerous marks and logos relating to the "northAmerican", "Allied", "Global" and "Pickfords" brands. We have actively contested unauthorized 59 use of the "northAmerican", "Global" and "Allied" marks. We have largely been successful, but in a few exceptional circumstances have tolerated some third-party use of the mark in transport-related commerce not directly competitive with our business. EMPLOYEES As of March 31, 2002, our workforce comprised approximately 6,800 employees, of which approximately 2,000 were unionized. We believe our relationships with our employees are good. The unionized employees consisted of approximately 1,700 employees covered by union agreements in the United Kingdom and approximately 300 employees in Asia, New Zealand and Australia and a small number of U.S. employees in our logistics services business. We have not experienced any major work stoppages in the last ten years. PROPERTIES We own executive and administrative office space at our headquarters at 5001 U.S. Highway 30 West, Fort Wayne, Indiana, of approximately 385,676 square feet and operate warehouse space of approximately 211,860 square feet (which is primarily owned). All the other properties used in our operations consist of freight forwarding offices, administrative offices and warehouse and distribution facilities. As of March 31, 2002, we had 283 facilities in 21 countries around the world, 27 of which were owned and 256 of which were leased. We own or lease major facilities in Naperville, Illinois, Canada and throughout the United Kingdom, Australia and New Zealand, and own or lease facilities at significant moving and storage services locations in many countries throughout the world. The following table sets forth our owned or leased properties by location.
LOCATION OWNED LEASED TOTAL - -------- -------- -------- -------- United States and Canada............................... 3 66 69 United Kingdom and Europe.............................. 23 109 132 Australia and New Zealand.............................. 1 67 68 Asia (including United Arab Emirates).................. 0 14 14 -- --- --- Total.................................................. 27 256 283
We believe that our office, warehouse and distribution facilities are generally well maintained and suitable to support our current and planned business needs. LEGAL PROCEEDINGS We are involved from time to time in other routine legal matters incidental to our business. We believe that the resolution of such matters will not have a material adverse effect on our financial position or results of operations. 60 MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth certain information with respect to our current directors and officers.
NAME AGE POSITION - ---- -------- ---------------------------------------------------- James W. Rogers........................ 51 Chairman of the Board, President and Chief Executive Officer Michael G. Babiarz..................... 36 Director Edmund M. Carpenter.................... 60 Director Wesley K. Clark........................ 57 Director Kevin J. Conway........................ 43 Director Kenneth E. Homa........................ 54 Director Richard J. Schnall..................... 32 Director Carl T. Stocker........................ 58 Director Michael P. Fergus...................... 49 President, Van Line Network Ralph A. Ford.......................... 55 Senior Vice President, General Counsel and Secretary Douglas V. Gathany..................... 46 Vice President, Treasurer Larry L. Gunther....................... 59 Senior Vice President, Chief Information Officer Gregory S. Maiers...................... 53 President, Logistics Services Ronald L. Milewski..................... 51 Senior Vice President, Chief Financial Officer Kevin D. Pickford...................... 45 Managing Director, MSS Asia Pacific Peter Schleicher....................... 59 Vice President--European Logistics Todd W. Schorr......................... 44 Senior Vice President, Human Resources Dennis M. Thompson..................... 42 Vice President, Corporate Controller Jacob van Leenen....................... 49 Vice President and Managing Director, AWW International Lawrence A. Writt...................... 44 Vice President, Insurance
JAMES W. ROGERS is a principal of Clayton, Dubilier & Rice, Inc., a limited partner of CD&R Associates V Limited Partnership and CD&R Associates VI Limited Partnership, and a stockholder and director of CD&R Investment Associates II, Inc. and CD&R Investment Associates VI, Inc. Prior to joining Clayton, Dubilier & Rice, Inc. in 1998, Mr. Rogers was a Senior Vice President and a member of the Corporate Executive Council of General Electric Company. From 1995 to 1998, Mr. Rogers was President and Chief Executive Officer of GE Industrial Control Systems. Mr. Rogers has an undergraduate degree in economics from Rutgers College. Mr. Rogers serves as the Chairman of the Board and is a Director of our company. Mr. Rogers has served as President and Chief Executive Officer since April 2, 2001. MICHAEL G. BABIARZ is a principal of Clayton, Dubilier & Rice, Inc., a limited partner of CD&R Associates V Limited Partnership and CD&R Associates VI Limited Partnership, and a stockholder and director of CD&R Investment Associates II, Inc. and CD&R Investment Associates VI, Inc. Prior to joining Clayton, Dubilier & Rice, Inc. in 1990, he worked in mergers and acquisitions at Drexel Burnham Lambert Incorporated. Mr. Babiarz serves as a director of RACI Holding, Inc., Remington Arms Company, Inc. and Fairchild Dornier Corporation. He holds a Bachelor of Science in Economics from the University of Pennsylvania's Wharton School. Mr. Babiarz serves as a Director of our company. EDMUND M. CARPENTER is President and Chief Executive Officer of Barnes Group Inc. and is a former professional employee of Clayton, Dubilier & Rice, Inc. Mr. Carpenter is also a director of Campbell Soup Company, Dana Corporation, Texaco Inc. and The Business Council. From 1988 to 1995, Mr. Carpenter was Chairman and Chief Executive Officer of General Signal Corporation. Prior to 1998, Mr. Carpenter served as President and Chief Operating Officer of ITT Corporation. Mr. Carpenter has also served as 61 president of the Automotive Truck Group at Kelsey Hayes Company and President of Freuhauf de Brazil. Mr. Carpenter attended the University of Michigan, where he earned both a Bachelor of Science in Economics and a Masters of Business Administration. Mr. Carpenter serves as a Director of our company. GENERAL WESLEY K. CLARK became a Director of our company in May 2001. Prior to his retirement from the United States military, General Clark served as the Commander in Chief of the United States European Command and was also the Supreme Allied Commander Europe from 1997 to 2000. He graduated from the United States Military Academy at West Point and holds a master's degree in Philosophy, Politics and Economics from Oxford University. He graduated from the National War College, Command and General Staff College, Armor Officer Advanced and Basic Courses, and Ranger and Airborne schools. General Clark was a White House Fellow in 1975-1976 and served as a Special Assistant to the Director of the Office of Management and Budget. He has also served as an instructor and later Assistant Professor of Social Science at the United States Military Academy. KEVIN J. CONWAY is a principal of Clayton, Dubilier & Rice, Inc., a director and stockholder of CD&R Investment Associates II, Inc. and CD&R Investment Associates VI, Inc. and a limited partner of CD&R Associates V Limited Partnership and CD&R Associates VI Limited Partnership. Mr. Conway is also a Vice President and the Secretary of CD&R Investment Associates II, Inc. and CD&R Investment Associates VI, Inc. Mr. Conway is also a director of the Riverwood International Corporation and Covansys. Prior to joining Clayton, Dubilier & Rice, Inc. in 1994, he spent ten years with Goldman, Sachs & Co., where he was elected a partner. He was a senior member of the Mergers & Acquisitions Department at Goldman, Sachs & Co. and served as the Chief of Staff of the Investment Banking Division. Mr. Conway is a graduate of Amherst College, Columbia University School of Business and Columbia Law School. Mr. Conway serves as a Director of our company. KENNETH E. HOMA is currently on the faculty of Georgetown University, McDonough School of Business where he teaches graduate courses in marketing, new product development and operations. Prior to joining Georgetown in 1996, Mr. Homa was a consultant with McKinsey & Company and held various executive and management positions with Black & Decker and General Electric. Mr. Homa has an undergraduate degree in economics from Princeton University and a M.B.A. from the University of Chicago, where he was a lecturer in marketing and strategic planning. Mr. Homa serves as a Director of our company. RICHARD J. SCHNALL is a principal of Clayton, Dubilier & Rice, Inc. Prior to joining Clayton, Dubilier & Rice, Inc. in 1996, he worked in the Investment Banking division of Donaldson, Lufkin & Jenrette, Inc. and Smith Barney & Co. He also worked for McKinsey and Company. Mr. Schnall serves as a director of Acterna Corporation and Schulte GmBH & Co. KG. Mr. Schnall is a graduate of the Wharton School of Business and Harvard Business School. He is a limited partner of CD&R Associates V Limited Partnership and CD&R Associates VI Limited Partnership, and a director and stockholder of CD&R Investment Associates II, Inc. and CD&R Investment Associates VI, Inc. Mr. Schnall serves as a Director of our company. CARL T. STOCKER has owned and managed his own acquisition, investment, and consulting company since 1996. Prior to that time, he served as Chief Financial Officer of General Electric's Industrial Systems Business from 1990 to 1996 and Chief Information Officer from 1992 to 1996. He was a member of General Electric's Corporate Finance and Information Technology Councils. He has also served as a senior integration leader for the Space Systems Division created by General Electric's acquisition of RCA. Mr. Stocker graduated from Wright State University in 1970 after serving with the U.S. Army. Mr. Stocker serves as a Director of our company and as the Chairman of the Audit Committee of the Board. MICHAEL P. FERGUS serves as President of Van Line Network. Mr. Fergus has been President and Chief Executive Officer of Allied Van Lines since 1995. Mr. Fergus joined Allied in 1973 and held various management positions in the company including Vice President, Allied International; Senior Vice President, Operations, and Chief Operating Officer. Mr. Fergus holds a Bachelor of Science in communications from Southern Illinois University and is a member of the World Trade Club. 62 RALPH A. FORD joined us in 1999 and serves as Senior Vice President, General Counsel and Secretary. Previously, Mr. Ford served 18 years in the General Electric legal department, most recently as General Counsel to GE Industrial Control Systems. Prior to that, Mr. Ford served as group counsel for Bell & Howell Company and as an attorney for E.I. duPont deNemours & Co. Mr. Ford earned a Bachelor of Arts from Morgan State College and a Juris Doctor from Boston University Law School. DOUGLES V. GATHANY joined us in June 2001 and currently serves as Vice President, Treasurer. Prior to joining us, Mr. Gathany served in various positions with Montgomery Ward since 1979, including as Vice President-Treasurer. He received a Masters of Business Administration in Finance from The University of Chicago and a B.A. from Colby College. LARRY L. GUNTHER joined us in March of 2000 and currently serves as Senior Vice President and Chief Information Officer for SIRVA. Mr. Gunther came to us from Boise Cascade Office Products where he served as Chief Information Officer and vice president since 1997. Prior to that, he was Chief Information Officer with Gillette for the United States, Canada and Europe. He received his Bachelor of Science degree from Brigham Young University and his Masters of Business Administration from Rockhurst University. GREGORY S. MAIERS has served as President, Logistics Services since September, 2001. Previously, he held a number of management leadership positions with North American Van Lines from 1985 through 2000. Prior to that he spent approximately 10 years in the freight industry with a variety of other businesses. He received a Masters of Business Administration in transportation and logistics from Michigan State University and a Bachelor of Science in marketing and economics from Eastern Michigan University. RONALD L. MILEWSKI joined us in 1990 as Vice President Finance and serves as Senior Vice President and Chief Financial Officer. Previously, Mr. Milewski served as Group Controller at Johnson Controls from 1985 to 1990 and Assistant Controller for Hoover Universal from 1979 to 1985. Mr. Milewski holds a Bachelor of Business Administration in accounting from Eastern Michigan University and is a Certified Public Accountant. He is a member of the American Institute of Certified Public Accountants and the American Moving and Storage Association and the ATA Technical Councils. KEVIN D. PICKFORD serves as Managing Director, Moving & Storage Asia Pacific. Mr. Pickford joined NFC plc in 1978 and has held a variety of senior management roles. From 1997 until the Allied Acquisition, he was Managing Director for NFC's Asia Pacific Moving Services. Prior to this, he was Managing Director for Allied Pickfords P/L with responsibility for Australian and New Zealand operations. Mr. Pickford is a graduate and Fellow of the Chartered Association of Certified Accountants and additionally holds membership in the Australian Institute of Company Directors. PETER SCHLEICHER joined us in 1986 and currently serves as Vice President, European Logistics. Prior to that, Mr. Schleicher was President for Global International Forwarding and held various executive management positions overseas with Global Van Lines. Mr. Schleicher graduated from the Willy-Hellpach College of Technology in Heidelberg and has a degree in forwarding/logistics. TODD W. SCHORR serves as Senior Vice President, Human Resources and joined us in June 2000. Mr. Schorr has over 18 years of broad functional experience and proven leadership in the Human Resources area at Pepsi Co. and Cummins Inc. From 1984 until he joined us, he served at Cummins as Group Director of International Human Resources, with functional responsibility for operations in India, China, UK, Korea, Japan, Brazil, Mexico, and Australia. Mr. Schorr holds a Bachelor of Science degree from Indiana University, and a Masters degree with specialization in Labor Relations and Labor Law from Indiana University. DENNIS M. THOMPSON joined us in 1986 and currently serves as Vice President, Corporate Controller. Prior to joining us, he held various management positions with Schneider National. Mr. Thompson received his Bachelor of Science degree in accounting and his Masters of Business Administration from Indiana University and is a Certified Public Accountant. 63 JACOB VAN LEENEN serves as Vice President and Managing Director for AWW International. Mr. van Leenen joined us in 1998 as President for the Canadian moving businesses. Prior to joining us, Mr. van Leenen served as Vice President of Operations for GE Capital in Europe and Vice President and General Manager for GE Capital in Canada from 1991 to 1998. Mr. van Leenen successfully completed several GE Leadership courses. LAWRENCE A. WRITT serves as Vice President, Insurance. Mr. Writt joined Allied Van Lines in 1979 and since 1991 has been President and Chief Executive Officer of TransGuard Insurance Company of America, Inc. and Vanguard Insurance Agency, Inc., both wholly owned subsidiaries of Allied Van Lines. Mr. Writt is also a director of both TransGuard and Vanguard. Mr. Writt has a Bachelor of Science in economics and accounting from St. Joseph's College. COMPOSITION OF BOARD AND COMMITTEES The business and affairs of North American Van Lines are managed under the direction of its Board of Directors. Each of the directors of North American Van Lines is also a director of SIRVA (the holder of all of North American Van Lines' outstanding common stock). The Board is currently composed of eight directors, none of whom, with the exception of Mr. Rogers, are officers of SIRVA or North American Van Lines. No director who is (1) an officer or employee of Clayton, Dubilier & Rice, Inc. at any time that Clayton, Dubilier & Rice, Inc. is providing consulting services to North American Van Lines or (2) an officer of North American Van Lines, is entitled to receive any compensation for his services as a director (although he may be reimbursed his reasonable expenses in connection with such service). Each director may hold office until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. The North American Van Lines Board has established the following committees: EXECUTIVE COMMITTEE The Executive Committee may, in the intervals between meetings of the Board, exercise the powers and authority of the Board in the management of the property, affairs and business of North American Van Lines. The Executive Committee currently consists of James W. Rogers (Chairman) and Kevin J. Conway. COMPENSATION COMMITTEE The Compensation Committee makes recommendations to the Board regarding salaries and any supplemental employee compensation of the executive officers and acts upon management's recommendations for salary and supplemental compensation for all other employees. The Compensation Committee also acts upon management's recommendations which require director action with respect to all employee pension and welfare benefit plans. The Compensation Committee currently consists of Kenneth E. Homa (Chairman), Edmund M. Carpenter, Richard J. Schnall, and General Wesley K. Clark. AUDIT COMMITTEE The Audit Committee recommends to the Board the firm of independent certified public accountants to annually audit the books and records of North American Van Lines. The Audit Committee reviews and reports on the activities of the independent certified public accountants to the Board and reviews and advises the Board as to the adequacy of North American Van Lines' system of internal accounting controls. The Audit Committee adopted a written charter in 2000, which was approved by the Board on March 8, 2001. The Audit Committee currently consists of Carl T. Stocker (Chairman) and Michael G. Babiarz. OTHER COMMITTEES The Board may form such other committees of the Board as it deems appropriate. 64 COMPENSATION OF DIRECTORS Members of the North American Van Lines Board and of the SIRVA Board who are not employees of North American Van Lines, SIRVA or Clayton, Dubilier & Rice, Inc. receive an annual retainer fee of $40,000. An additional annual fee of $10,000 is paid to the chairman of each committee who is not an employee of North American Van Lines, SIRVA or Clayton, Dubilier & Rice, Inc. Members of the SIRVA Board do not receive any additional compensation for their services in such capacity. All directors are reimbursed for reasonable travel and lodging expenses incurred to attend meetings. EXECUTIVE COMPENSATION The following table describes the compensation paid to (1) the current and former Chief Executive Officers for services rendered during the fiscal year ended December 31, 2001, and (2) the five other most highly compensated executive officers for services rendered during the fiscal year ended December 31, 2001 (collectively, the "Named Executives").
LONG-TERM COMPENSATION AWARDS ------------------------- SECURITIES UNDERLYING ALL OTHER SALARY BONUS OTHER ANNUAL OPTION COMPENSATION NAME & PRINCIPAL POSITION YEAR ($)(4) ($) COMPENSATION ($)(5) (#)(6) ($)(7) - ------------------------- -------- -------- -------- ------------------- ---------- ------------ Jeffrey P. Gannon(1) Director, President, Chief Executive Officer........ 2001 $163,502 -- $ 2,704 -- $355,774 James W. Rogers(2) Chairman of the Board, President and Chief Executive Officer...................... 2001 -- -- -- -- -- Michael P. Fergus President, Van Line Network.... 2001 $294,219 18,000 $ 5,538 2,000 $ 29,692 Richard H. Bogan(3) President, Logistics Services..................... 2001 $113,846 79,231 $ 6,169 -- $ 85,385 Ronald L. Milewski Senior Vice President, Chief Financial Officer........ 2001 $202,154 -- $10,965 1,000 $ 55,746 Larry L. Gunther Senior Vice President, Chief Information Officer...... 2001 $245,192 -- $ 3,542 -- $ 12,778 Ralph A. Ford Senior Vice President, General Counsel and Secretary.................... 2001 $231,231 -- $ 2,179 500 $ 2,730
- ------------------------ (1) Mr. Gannon became President and Chief Executive Officer on January 5, 2000. Mr. Gannon resigned as Director, President and Chief Executive Officer effective April 2, 2001. Upon his resignation, all of Mr. Gannon's options were cancelled without payment. See "Separation Agreement with Jeffrey P. Gannon." (2) Mr. Rogers was elected President and Chief Executive Officer upon Mr. Gannon's resignation on April 2, 2001. Mr. Rogers is a principal of Clayton, Dubilier & Rice, Inc., a limited partner of CD&R Associates Fund V Limited Partnership and of CD&R Associates Fund VI Limited Partnership and a stockholder and director of CD&R Investment Associates II, Inc. and CD&R Investment Associates 65 VI, Inc. Mr. Rogers receives no compensation for his services as President and Chief Executive Officer. Mr. Rogers also serves as Chairman of the Board. (3) Mr. Bogan became President, Logistics Services on January 15, 2001. He resigned from his position on September 4, 2001. See "--Separation Agreement with Richard H. Bogan." (4) Amounts in this column include all amounts contributed by the Named Executives to the North American Van Lines, Inc. Savings Plan and Trust or the Allied Van Lines, Inc. Profit Sharing and Retirement on Savings Plan, whichever is applicable to the Named Executives, both of which are qualified under section 401(k) of the Internal Revenue Code of 1986, as amended. (5) The company provides certain perquisites to the Named Executives (namely, a car allowance and, in certain cases, club membership fees), in each case in an amount less than the amount required to be disclosed. The amounts disclosed are amounts reimbursement to the Named Executives for the payment of income taxes due in connection with the receipt of such perquisites. (6) All options are held under the SIRVA Stock Incentive Plan. (7) Amounts in this column include (i) severance payments made to Mr. Gannon ($355,774) and Mr. Bogan ($85,385); (ii) amounts contributed by SIRVA to the Allied Van Lines, Inc. Profit Sharing and Retirement Savings Plan and the Allied Van Lines, Inc. Executive Retirement Savings Plan on behalf of Mr. Fergus ($20,022) and Mr. Gunther ($12,778); (iii) the payment by SIRVA of relocation expenses for Mr. Milewski ($55,746) and Mr. Ford ($2,730) taking into account the taxable nature of providing such a benefit and (iv) the payment by SIRVA of premiums on a split-dollar life insurance policy for Mr. Fergus ($9,670). STOCK OPTION GRANTS AND VALUES AS OF MAY 20, 2002 The following table sets forth information regarding grants of options to purchase shares of SIRVA common stock and the value of such options as of May 20, 2002. Such options were granted to the executive officers listed in the Summary Compensation Table pursuant to the SIRVA, Inc. Stock Incentive Plan (described below). 66 AGGREGATED OPTION EXERCISES IN 2001 AND MAY 20, 2002 OPTION VALUE
VALUE OF UNEXERCISED IN- NUMBER OF SECURITIES THE-MONEY UNDERLYING UNEXERCISED OPTIONS/SARS AT OPTIONS/SARS AT FISCAL FISCAL YEAR-END YEAR-END(#) ($) SHARES ---------------------- --------------- ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/ NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE - ---- ----------- ----------- ---------------------- --------------- Jeffrey P. Gannon(1).................... -- -- 0 shares/ $ 0/0 0 shares James W. Rogers......................... -- -- 0 shares/ $ 0/0 0 shares Michael P. Fergus....................... -- -- 2,738 shares/ $ 0/0 7,262 shares Larry L. Gunther........................ -- -- 0 shares/ $ 0/0 0 shares Ralph A. Ford........................... -- -- 2,225 shares/ $ 0/0 4,775 shares Ronald L. Milewski...................... -- -- 4,429 shares/ $186,018/ 2,571 shares 65,982 Richard H. Bogan........................ -- -- 0 shares/ $ 0/0 0 shares
- -------------------------- (1) Upon his resignation, all of Mr. Gannon's options were cancelled without payment. See "--Separation Agreement with Jeffrey P. Gannon." SIRVA, INC. STOCK INCENTIVE PLAN GENERAL The SIRVA Board administers the SIRVA, Inc. Stock Incentive Plan. Under this plan the SIRVA Board may grant rights to purchase shares of SIRVA common stock and options to purchase shares of SIRVA common stock to executives, officers and other key employees and agents and consultants of SIRVA selected by the Board. The SIRVA Board may delegate the authority to administer the plan to a duly constituted committee of the SIRVA Board. A maximum of 300,000 shares may be issued under the plan. Of those shares, up to 100,000 shares of common stock are permitted to be sold to management and up to 200,000 options may be granted. The options allow participants to purchase shares of SIRVA common stock. Options granted under the plan that are canceled without having been exercised may be reissued under the plan. As of May 20, 2002, 35,720 shares and 81,307 options were outstanding under the plan. SHARES Under the stock incentive plan, participants may be offered the right to purchase shares of SIRVA common stock. The purchase price of the shares will equal the fair market value of SIRVA common stock on the date of the offer. If a participant chooses to purchase shares, such participant must agree not to sell or otherwise dispose of the shares purchased under the stock incentive plan, except in compliance with the Securities Act and the subscription agreement entered into between SIRVA and such participant. Under the subscription agreement, participants are not permitted to transfer shares purchased at any time before an underwritten public offering of SIRVA common stock, which is led by at least one underwriter of nationally recognized standing except under limited circumstances. Clayton, Dubilier & Rice Fund V Limited Partnership is the only stockholder that currently has the right to initiate a public offering by itself. In addition, any sale or other disposition must also be made in compliance with any applicable state and foreign securities laws. Further, if SIRVA files a registration statement under the Securities Act with 67 respect to an underwritten public offering of the common stock, participants may not sell or distribute any shares of common stock to the public during the 20 days before and the 180 days after the effective date of the registration statement, other than as part of the public offering. The restrictions on transfer will not continue following a public offering of the common stock. OPTIONS Under the stock incentive plan, two types of options may be granted: service options and performance options. Service options become vested and exercisable in equal annual installments on each of the first five anniversaries of the grant date. Performance options generally become vested and exercisable upon achievement of specified cumulative EBITDA targets, except that, to the extent not vested sooner, they become vested on the ninth anniversary of the grant date. In addition, the SIRVA Board may accelerate the exercisability of any option at any time and from time to time. All options granted expire after ten years from the grant date. In connection with offerings of common stock to participants under the plan that took place prior to December 31, 2001, the Company granted two options for each share of SIRVA common stock purchased: one service option and one performance option. In future offerings, the Company expects to grant two service options for each share of SIRVA common stock purchased. In such case, no performance options will be granted. The exercise price of the options will equal the fair market value of SIRVA common stock at the date of the grant. Fair market value is determined by the Board based on an independent appraisal using various financial methodologies. Grantees who choose to exercise their options must pay all applicable taxes, which are due upon exercise before shares may be granted. To exercise an option, a holder may pay the exercise price in full in cash or cash equivalents, including by personal check, at the time of exercise. The exercise price of any options exercised at any time following a public offering may be paid in full or in part in the form of shares of SIRVA common stock that have been owned by the holder for at least six months, based on the fair market value of such shares of common stock on the date of exercise. In the event of a participant's termination of service with SIRVA or any subsidiary by reason of death, disability or retirement at age 65, those options that have become vested and exercisable prior to the date of termination of service shall remain exercisable until the first to occur of: (1) the day that is six months after the date of termination of employment; or (2) the expiration of the term of the option. Those options that have not become vested and exercisable prior to the date of termination of service by reason of death, disability or retirement at age 65 shall be canceled immediately upon such termination of service. In the event of the participant's termination of service with SIRVA or any subsidiary for cause, then all vested and unvested options held by a participant shall be forfeited and terminated immediately upon such termination of service. In the event a participant's service with SIRVA or any subsidiary is terminated for any other reason, such participant's vested and exercisable options shall remain exercisable solely until the first to occur of: - the 60th day after the earliest of the expiration of Clayton, Dubilier & Rice Fund V Limited Partnership's right to purchase the options or receipt of written notice that Clayton, Dubilier & Rice Fund V Limited Partnership does not intend to exercise its right to purchase the options (see Repurchase Provisions below) and - the expiration of the term of the options. Those options that have not become vested and exercisable prior to the date of termination of service shall be canceled immediately upon such termination of employment. Upon a "Change in Control" in SIRVA or North American Van Lines (as defined in the stock incentive plan), each vested and unvested service option, all vested performance options and a percentage of the unvested performance options will be canceled in exchange for a payment in cash of an amount equal to the excess, if any, of the price paid in the change in control transaction over the exercise price. All 68 remaining unvested performance options will be canceled. Any payments made in such event will generally be paid within 30 days after the change in control and will be made in cash or in shares of capital stock of the acquirer, as determined by the SIRVA Board. Notwithstanding the foregoing, if the SIRVA Board determines before the change in control either that: - all outstanding options will be honored or assumed by the acquirer, or - alternative options with equal or better terms will be made available, the outstanding options will not be canceled, their vesting and exercisability will not be accelerated, and there will be no payment in exchange for the options. To be approved by the Board, any alternative options offered must: - have substantially equivalent economic value to the outstanding options, and - must have terms which provide, upon the involuntary termination of an optionee's employment within two years of the Change in Control, for either (a) unrestricted exercisability and transferability of the alternative options; or (b) a payment in exchange for any alternative options that equals the difference between the exercise price of such alternative options and the fair market value of the stock subject to such alternative options at the time of the involuntary termination. Options cannot be transferred or assigned by a participant other than by will or by the laws of descent or to the SIRVA or Clayton, Dubilier & Rice Fund V Limited Partnership under their right to purchase options on termination of employment. In addition, options can be exercised only by a participant on a participant's estate after death. If the employment of a participant terminates for any reason before the first public offering, SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership each have an option to repurchase all or any portion of any shares of SIRVA common stock or options to purchase shares of SIRVA common stock. SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership are not obligated to purchase securities, except in limited circumstances. If service is terminated by SIRVA or any subsidiary (1) without cause; (2) by death, disability or retirement at age 65; or (3) by resignation of the participant, the repurchase price for the stock is its fair market value as determined in good faith by the SIRVA Board based on an independent appraisal using various financial methodologies. The purchase price for any options equals the excess, if any, of (1) the fair market value of the shares issuable upon exercise of the options purchased as of the date of termination over (2) the aggregate exercise price of the options. If service is terminated by SIRVA or any subsidiary with cause, the repurchase price for the stock is the lesser of the fair market value and the original purchase price. As discussed above, any options are immediately forfeited. Participants who have terminated their employment with SIRVA or any subsidiary are entitled to keep any shares that are not repurchased by SIRVA or Clayton, Dubilier & Rice Fund V Limited Partnership. Participants have the right to require SIRVA to repurchase their shares if their employment terminates by reason of death, disability or requirement at age 65. For participants who acquired shares prior to July 1, 2000, the fair market value of any shares to be repurchased is determined as of the effective date of termination of employment. For participants who acquired shares on or after July 1, 2000, the fair market value of any shares to be repurchased is determined as of the later of (i) the effective date of termination of employment or (ii) six months and one day after the date of acquisition. All repurchase rights and obligations will expire automatically upon the consummation of a public offering and will not apply to shares offered or sold in connection with such an offering. 69 SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership are entitled to apply any portion of the purchase price of shares or options to discharge any indebtedness a participant may owe to SIRVA or to North American Van Lines or indebtedness that is guaranteed by North American Van Lines, including, without limitation, indebtedness incurred by such participant to purchase shares of common stock. REGISTRATION RIGHTS SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership are parties to a registration and participation agreement, dated as of March 30, 1998, as amended. On November 19, 1999, SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership amended the registration and participation agreement to add Exel as a party. This agreement permits holders of securities of SIRVA who collectively own at least 50% of SIRVA common stock to require SIRVA to register their securities and pay for such registration under certain conditions. Because Clayton, Dubilier & Rice Fund V Limited Partnership holds more than 50% of SIRVA common stock, it is the only shareholder able to initiate the initial registration by itself. Furthermore, members of management generally do not have registration rights under the registration and participation agreement for shares of SIRVA common stock issued upon exercise of options if SIRVA has registered such shares under the Securities Act. If SIRVA files a registration statement under the Securities Act with respect to a public offering of its common stock, members of management who have previously purchased SIRVA common stock are not permitted to effect any public sale or distribution of any shares of such stock during the 20 days before and the 180 days after the effective date of the registration statement (other than as part of the public offering). SEPARATION AGREEMENT WITH JEFFREY P. GANNON As of April 2, 2001, SIRVA and Mr. Gannon entered into a separation agreement pursuant to which Mr. Gannon resigned from his service as President and Chief Executive Officer and as a Director of SIRVA. As described below, any liabilities which may have accrued to SIRVA under Mr. Gannon's employment agreement have been satisfied by the separation agreement. Under the terms of the separation agreement during the one-year period following his resignation, Mr. Gannon will continue to receive his annual base salary payable in accordance with SIRVA's usual payroll practices, with SIRVA retaining the right to accelerate the payment of all or a portion of such benefit at any time. In addition, Mr. Gannon will continue to receive medical and welfare benefits during such one-year period as if he had remained in the employ of SIRVA. Both of these benefits are subject to reduction if Mr. Gannon obtains other employment within such one-year period. Mr. Gannon also received payment of any earned and unpaid base salary for the period prior to the date of termination. Upon his resignation, all of Mr. Gannon's 22,500 options were cancelled without payment and all of his 7,500 shares of SIRVA common stock were repurchased by SIRVA for a purchase price of $142 per share (their fair market value as of the date of repurchase and the price at which Mr. Gannon originally purchased such shares). Mr. Gannon has agreed that during the five years following termination of his employment with SIRVA, he will refrain from disclosing confidential information regarding SIRVA. Additionally, for the one-year period following his resignation, Mr. Gannon will not: - participate in any business that is engaged in the business of or that is otherwise in competition with any business conducted by SIRVA or its affiliates; - induce or attempt to induce any employee of SIRVA or its affiliates to leave the employ of SIRVA or its affiliates or - solicit any business relationship that is competitive with the business or relationship of SIRVA or any of its affiliates with any agent, customer, client, distributor or vendor. 70 SEPARATION AGREEMENT WITH RICHARD H. BOGAN As of August 31, 2001, SIRVA and Mr. Bogan entered into a Separation Agreement pursuant to which Mr. Bogan resigned from his service as President, Logistics Services. As described below, any liabilities that may accrue to SIRVA under Mr. Bogan's employment agreement have been satisfied by the Separation Agreement. Under the terms of the Separation Agreement, during a one year period following his resignation, Mr. Bogan will continue to receive his annual base salary payable in accordance with SIRVA's usual payroll practices. This benefit ceases as of such time as Mr. Bogan begins any new employment or becomes self- employed. In addition, Mr. Bogan will continue to receive medical and welfare benefits during such one year period as if he had remained in the employ of SIRVA. These benefits are subject to reduction if Mr. Bogan obtains other employment. Mr. Bogan has agreed that during the one year following the effective date of the Separation Agreement, he will refrain from disclosing confidential information regarding SIRVA. Additionally, for the one year following his resignation, Mr. Bogan will not: - become employed by, or engage in business with, or act as a consultant to, any business or entity that competes in a material way with SIRVA's domestic and foreign logistics, blanketwrap or high tech business solutions, or - solicit or induce any employee, consultant or agent of SIRVA to leave employment with SIRVA or end its agency relationship with SIRVA. RETIREMENT PLANS SIRVA sponsors the NAVL, Inc. Employee Retirement Plan, a funded, non-contributory defined benefit pension plan covering eligible employees of North American Van Lines in the United States. SIRVA also sponsors an excess benefit plan which is an unfunded, non-qualified plan that provides retirement benefits not otherwise provided under the retirement plan because of the benefit limitations imposed by Section 415 and 401(a)(17) of the Internal Revenue Code. The excess benefit plan ensures that an executive receives the total pension benefit to which he or she would otherwise be entitled, were it not for such Code limitations. Ronald L. Milewski and Ralph A. Ford were the only Named Executives participating in these plans during fiscal year 2001. The retirement plan provides each eligible employee with retirement benefits based principally on years of service with North American Van Lines, compensation rates over that time, and estimated primary Social Security benefits. The following table shows the estimated annual pension benefits payable to a covered participant at normal retirement age (65) under both the retirement plan and the excess benefit plan. These benefits are based on the final pay formula contained in the retirement plan that applies to all benefits and that accrue under both plans, which is discussed below. 71 PENSION PLAN TABLE
YEARS OF SERVICE ------------------------------------------------------------ AVERAGE ANNUAL COMPENSATION 5 10 15 20 25 --------------------------- ---------------- -------- -------- -------- -------- $200,000.......................... $13,690 $ 27,379 $ 41,069 $ 54,758 $ 68,448 $225,000.......................... $15,565 $ 31,129 $ 46,694 $ 62,258 $ 77,823 $250,000.......................... $17,440 $ 34,879 $ 52,319 $ 69,758 $ 87,198 $275,000.......................... $19,315 $ 38,629 $ 57,944 $ 77,258 $ 96,573 $300,000.......................... $21,190 $ 42,379 $ 63,569 $ 84,758 $105,948 $400,000.......................... $28,690 $ 57,379 $ 86,069 $114,758 $143,448 $600,000.......................... $43,690 $ 87,379 $131,069 $174,758 $218,448 $800,000.......................... $58,690 $117,379 $176,069 $234,758 $293,448 $1,000,000........................ $73,690 $147,379 $221,069 $294,758 $368,448 $1,200,000........................ $88,690 $177,379 $266,069 $354,758 $443,448
Benefits available under the retirement plan and the excess benefit plan are subject to offset for Social Security benefits. Compensation taken into account under the plans is the average monthly compensation paid to a participant during the consecutive 60-month period over the most recent 120-month period that produces the highest average compensation. For this purpose, compensation includes the total of base salary and bonus. Benefits are payable in the form of straight life annuity or a joint and survivor annuity. As of December 31, 2001, Mr. Ford had accrued 2.25 years of credited service. Mr. Milewski had accrued 6 years of credited service. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Board established a Compensation Committee to review all compensation arrangements for executive officers of North American Van Lines. The individuals serving on the Compensation Committee during 2001 were James W. Rogers (Chairman), Edmund M. Carpenter and Kenneth E. Homa. Mr. Rogers, who serves as President and Chief Executive Officer of SIRVA, is a principal of Clayton, Dubilier & Rice, Inc., a limited partner of CD&R Associates Fund V Limited Partnership and CD&R Associates Fund VI Limited Partnership and a stockholder and director of CD&R Investment Associates II, Inc. and CD&R Investment Associates VI, Inc. Clayton, Dubilier & Rice, Inc. receives an annual fee for management and financial consulting services to North American Van Lines, including expenses. The consulting fees paid to Clayton, Dubilier & Rice, Inc. were $400,000 for each of 1998 through 2000. Such consulting fees were increased to $1.0 million annually from January 1, 2001 and will be reviewed on an annual basis. North American Van Lines paid Clayton, Dubillier & Rice, Inc. an additional $375,000 in consulting fees in 2001 in connection with the services provided by Mr. Rogers as President and Chief Executive Officer of North American Van Lines since his election on April 2, 2001. Mr. Rogers receives no compensation for his services as President and Chief Executive Officer. SIRVA and North American Van Lines have also agreed to indemnify the members of the Boards to the full extent permitted by Delaware law, and to indemnify Clayton, Dubilier & Rice, Inc. and Clayton, Dubilier & Rice Fund V Limited Partnership (together with any other investment vehicle managed by Clayton, Dubilier & Rice, Inc., including Clayton, Dubilier & Rice Fund VI Limited Partnership, their respective directors, officers, partners, employees, agents and controlling persons) against certain liabilities incurred under the federal securities laws and other laws regulating the business of North American Van Lines and certain other claims and liabilities with respect to their services for SIRVA and North American Van Lines. 72 OWNERSHIP OF CAPITAL STOCK SIRVA owns all of the outstanding capital stock of North American Van Lines. The outstanding capital stock of SIRVA is beneficially owned as set forth in the following table, which includes information as of May 20, 2002 as to (1) each person known to North American Van Lines to own five percent or more of the common stock of SIRVA, (2) each director of North American Van Lines, (3) each executive officer of North American Van Lines listed in the Summary Compensation Table under "Management" above, and (4) all directors and executive officers of North American Van Lines as a group.
NUMBER PERCENTAGE NAME AND ADDRESS OF BENEFICIAL OWNER(1) OF SHARES OF SHARES - --------------------------------------- ---------- ----------- Clayton, Dubilier & Rice Fund V Limited Partnership(2) ..... 1,016,459 57.6% 1403 Foulk Road, Suite 106 Wilmington, Delaware 19803 Clayton, Dubilier & Rice Fund VI Limited Partnership(3) .... 422,537 24.0% 1403 Foulk Road, Suite 106 Wilmington, Delaware 19803 NFC International Holdings (Netherlands II) BV(4) .......... 318,779 13.1% c/o Exel plc Ocean House The Ring Bracknell Berkshire RG12 1AW England
NAME OF EXECUTIVE OFFICER OR DIRECTOR - ------------------------------------- James W. Rogers............................................. 10,000 * Michael P. Fergus(5)........................................ 6,738 * Ronald L. Milewski(6)....................................... 7,429 * Ralph A. Ford(7)............................................ 5,929 * Larry L. Gunther............................................ -- * Michael G. Babiarz.......................................... -- -- Edmund M. Carpenter......................................... -- -- Kevin J. Conway............................................. -- -- Kenneth E. Homa............................................. 2,500 * Carl T. Stocker............................................. -- -- All directors and executive officers as a group (20 persons)(8)............................................... 44,037 2.3%
- ------------------------ * Less than 1% (1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, a person is deemed a "beneficial owner" of a security if he or she has or shares the power to vote or direct the voting of such security or the power to dispose or direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities which that person has the right to acquire 73 beneficial ownership of within 60 days. More than one person may be deemed to be a beneficial owner of the same securities. (2) CD&R Associates V Limited Partnership, a Cayman Islands exempted limited partnership, is the general partner of Clayton, Dubilier & Rice Fund V Limited Partnership and has the power to direct Clayton, Dubilier & Rice Fund V Limited Partnership as to the voting and disposition of shares held by Clayton, Dubilier & Rice Fund V Limited Partnership. CD&R Investment Associates II, Inc., a Cayman Island exempted company, is the managing general partner of Associates V and has the power to direct Associates V as to its direction of Clayton, Dubilier & Rice Fund V Limited Partnership's voting and disposition of the shares held by Clayton, Dubilier & Rice Fund V Limited Partnership. No person controls the voting and disposition of CD&R Investment Associates II, Inc. with respect to the shares owned by Clayton, Dubilier & Rice Fund V Limited Partnership. Each of CD&R Associates V Limited Partnership and CD&R Investment Associates II, Inc. expressly disclaims beneficial ownership of the shares owned by Clayton, Dubilier & Rice Fund V Limited Partnership. The business address for each of Clayton, Dubilier & Rice Fund V Limited Partnership, CD&R Associates V Limited Partnership and CD&R Investment Associates II, Inc. is 1403 Foulk Road, Suite 106, Wilmington, Delaware 19803. (3) CD&R Associates VI Limited Partnership, a Cayman Islands exempted limited partnership, is the general partner of Clayton, Dubilier & Rice Fund VI Limited Partnership and has the power to direct Clayton, Dubilier & Rice Fund VI Limited Partnership as to the voting and disposition of shares held by Clayton, Dubilier & Rice Fund VI Limited Partnership. CD&R Investment Associates VI, Inc., a Cayman Island exempted company, is the general partner of CD&R Associates VI Limited Partnership and has the power to direct CD&R Associates VI Limited Partnership as to its direction of Clayton, Dubilier & Rice Fund VI Limited Partnership's voting and disposition of the shares held by Clayton, Dubilier & Rice Fund VI Limited Partnership. No person controls the voting and disposition of CD&R Investment Associates VI, Inc. with respect to the shares owned by Clayton, Dubilier & Rice Fund VI Limited Partnership. Each of CD&R Associates VI Limited Partnership and CD&R Investment Associates VI, Inc. expressly disclaims beneficial ownership of the shares owned by Clayton, Dubilier & Rice Fund VI Limited Partnership. The business address for each of Clayton, Dubilier & Rice Fund VI Limited Partnership, CD&R Associates VI Limited Partnership and CD&R Investment Associates VI, Inc. is 1403 Foulk Road, Suite 106, Wilmington, Delaware 19803. (4) Includes 87,480 shares issuable to NFC International Holdings (Netherlands II) upon exercise of the warrant received by Exel as part of the consideration for the sale of the Allied business. (5) Includes 2,738 shares issuable to Mr. Fergus upon exercise of options exercisable within 60 days. (6) Includes 4,429 shares issuable to Mr. Milewski upon exercise of options exercisable within 60 days. (7) Includes 2,225 shares issuable to Mr. Ford upon exercise of options exercisable within 60 days. (8) Includes approximately 12,614 shares issuable upon exercise of options exercisable within 60 days. 74 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Each of Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership, and Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership, is a private investment fund managed by Clayton, Dubilier & Rice, Inc. Amounts contributed to Clayton, Dubilier & Rice Fund V Limited Partnership or to Clayton, Dubilier & Rice Fund VI Limited Partnership by its limited partners are invested at the discretion of the general partner in equity or equity-related securities of entities formed to effect leveraged acquisition transactions and in the equity of corporations where the infusion of capital, coupled with the provision of managerial assistance by Clayton, Dubilier & Rice, Inc., can be expected to generate returns on investments comparable to returns historically achieved in leveraged acquisition transactions. The general partner of Clayton, Dubilier & Rice Fund V Limited Partnership is CD&R Associates V Limited Partnership ("Associates V"). Associates V has three general partners. The managing general partner of Associates V is CD&R Investment Associates II, Inc. ("Investment Associates II"). The other general partners of Associates V are CD&R Cayman Investment Associates, Inc., a Cayman Islands exempted company ("Associates Cayman Inc."), and CD&R Investment Associates, Inc., a Delaware corporation ("Associates Inc."). Under the partnership agreement of Associates V, all management authority (other than with respect to the amendment of the partnership agreement) is vested in Investment Associates II. The general partner of Clayton, Dubilier & Rice Fund VI Limited Partnership is CD&R Associates VI Limited Partnership ("Associates VI"). Associates VI has a general partner, CD&R Investment Associates VI, Inc. ("Investment Associates VI"). An organizational chart showing the ownership structure of SIRVA, on an undiluted basis, and NAVL is set forth below: [LOGO] Each of James Rogers, Michael Babiarz, Kevin Conway and Richard Schnall, who are principals of Clayton, Dubilier & Rice, Inc., and limited partners of Associates V and Associates VI and stockholders and directors of Investment Associates II and Investment Associates VI, is a director of North American Van Lines. Mr. Conway is also a Vice President and the Secretary of Investment Associates II and Investment Associates VI. In addition, Edmund Carpenter, a director of North American Van Lines, is a former professional employee of Clayton, Dubilier & Rice, Inc. Clayton, Dubilier & Rice, Inc. is a private investment firm that is organized as a Delaware corporation. Clayton, Dubilier & Rice, Inc. is the manager of a series of investment funds, including Clayton, Dubilier & Rice Fund V Limited Partnership and Clayton, Dubilier & Rice Fund VI Limited Partnership, formed to invest in equity or equity-related securities. Clayton, Dubilier & Rice, Inc. generally assists in structuring, arranging financing for and negotiating the transactions in which the funds it manages invest. After the consummation of such transactions, Clayton, Dubilier & Rice, Inc. generally provides management and financial consulting services to the companies in which its investment funds have invested during the period of such funds' investment. Such services include helping such companies to establish effective banking, legal and other business relationships and assisting management in developing 75 and implementing strategies for improving the operational, marketing and financial performance of such companies. SIRVA, North American Van Lines and Clayton, Dubilier & Rice, Inc. are parties to an Amended and Restated Consulting Agreement, dated as of January 1, 2001, pursuant to which Clayton, Dubilier & Rice, Inc. provides financial advisory and management consulting services to SIRVA and North American Van Lines. Clayton, Dubilier & Rice, Inc. is paid a management fee of $1.0 million annually, which is reviewed on an annual basis. For the three months ended March 31, 2002 and the year ended December 31, 2001 Clayton, Dubilier & Rice, Inc. was paid an additional $0.125 million and $0.375 million, respectively, in connection with the services provided by Mr. Rogers, a principal of Clayton, Dubilier & Rice, Inc., as President and Chief Executive Officer of SIRVA and North American Van Lines since his election on April 2, 2001. Mr. Rogers receives no compensation for his services as President and Chief Executive Officer. SIRVA and North American Van Lines have also entered into an Indemnification Agreement, dated as of March 30, 1998, in favor of Clayton, Dubilier & Rice, Inc. and Clayton, Dubilier & Rice Fund V Limited Partnership (together with any other investment vehicle managed by Clayton, Dubilier & Rice, Inc., including Clayton, Dubilier & Rice Fund VI Limited Partnership, their respective directors, officers, partners, employees, agents and controlling persons, the "Indemnitees"), pursuant to which SIRVA and North American Van Lines have agreed, subject to certain exceptions, to indemnify and hold harmless the members of the boards of directors of SIRVA and North American Van Lines to the full extent permitted by Delaware law, and to indemnify the Indemnitees from and against any suits, claims, damages or expenses that may be made against or incurred by them under applicable securities laws in connection with offerings of securities of North American Van Lines, liabilities to third parties arising out of any action or failure to act by North American Van Lines, and, except in the case of gross negligence or intentional misconduct, the provision by Clayton, Dubilier & Rice, Inc. of management, consulting and financial advisory services. North American Van Lines has guaranteed loans as of May 20, 2002 in an aggregate principal amount of $0.5 million, to eight members of management in connection with their investment in SIRVA. These loans mature on various dates in 2004 and bear interest at the prime rate plus 1.0%. An affiliate of Exel, NFC International Holdings (Netherlands II) BV, holds a Common Stock Purchase Warrant issued by SIRVA in connection with the Allied Aquisition. The warrant entitles the holder to purchase 87,480 shares of common stock of SIRVA, par value $0.01 per share, at an exercise price of $400.00 per share. The term of the warrant is five years and it contains customary anti-dilution protections. In addition, the warrant and any shares issued upon its exercise are subject to certain transfer restrictions, including rights of first refusal and drag-along rights in our favor and in favor of Clayton, Dubilier & Rice Fund V Limited Partnership and hold-back covenants. An affiliate of Exel also holds 24,500 shares of junior preferred stock of SIRVA, which shares have an initial liquidation preference of $24.5 million. The dividend rate on this junior preferred stock is 12.4% compounded quarterly, although the payment of dividends is subject to the discretion of the Board of Directors of SIRVA and the ability of SIRVA to pay dividends is subject to our various debt agreements, including the indenture and the senior credit facility. In limited circumstances the junior preferred stock is exchangeable at the option of SIRVA for subordinated exchange debentures of SIRVA. Subject to the terms of our debt agreements, including the indenture and the senior credit facility agreements, the junior preferred stock is required to be redeemed on the eleventh anniversary of its issue date, or upon the occurrence of certain other events. In addition, SIRVA has a right, subject to the terms of its debt agreements, to redeem the junior preferred stock at any time after the first anniversary of its issue date. SIRVA and Exel are parties to a letter agreement which gives Exel the right, so long as it or any of its affiliates holds ten percent of the outstanding shares of SIRVA, to nominate one director to the board of directors of SIRVA and North American Van Lines. The remaining members of the boards are appointed 76 by Clayton, Dubilier & Rice Fund V Limited Partnership. The letter agreement also imposes certain restrictions on the transfer of the 174,961 shares of common stock of SIRVA held by NFC International Holdings (Netherlands II), such as rights of first refusal, drag-along rights and hold-back covenants. SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership are parties to a Registration and Participation Agreement, dated as of March 30, 1998, as amended, which permits holders of securities of SIRVA to require SIRVA to register their securities and pay for such registration under certain conditions. In connection with the Allied Acquisition, this agreement was amended to include Exel as a party and to accord Exel the right, so long as it or its affiliate owns 115,650 shares of common stock of SIRVA, to demand that SIRVA register its securities. In addition, the amendment allows Exel or such affiliate to participate in the demand rights exercised by other holders of SIRVA securities and if Clayton, Dubilier & Rice Fund V Limited Partnership or any other investment vehicle managed by Clayton, Dubilier & Rice, Inc., including Clayton, Dubilier & Rice Fund VI Limited Partnership, subscribes for additional shares of the SIRVA, to buy a pro rata portion of such shares. SIRVA and Clayton, Dubilier & Rice Fund V Limited Partnership are parties to a Stock Subscription Agreement, dated as of March 30, 1998, which sets forth the terms and conditions of the purchase by Clayton, Dubilier & Rice Fund V Limited Partnership of 615,050 shares of common stock of SIRVA. Pursuant to such agreement, Clayton, Dubilier & Rice Fund V Limited Partnership is entitled to consult with SIRVA with respect to the operation of SIRVA or any of its subsidiaries at any time, to have observers attend meetings of the board of directors of SIRVA and certain of its subsidiaries and to receive all quarterly and annual financial reports and budgets, as well as other documents, of SIRVA. In addition, the Stock Subscription Agreement imposes certain restrictions on the transfer of the shares of common stock of SIRVA owned by Clayton, Dubilier & Rice Fund V Limited Partnership. On December 1, 1999, pursuant to two Stock Subscription Agreements, each dated as of November 19, 1999, Clayton, Dubilier & Rice Fund V Limited Partnership and Exel purchased 225,352 and 56,338 shares of common stock of SIRVA, respectively. These Stock Subscription Agreements impose certain restrictions on the transfer of the shares of common stock purchased under these agreements, and provide that the purchasers of such stock are entitled to the rights and subject to the obligations created under the Registration and Participation Agreement described above. The proceeds of this stock subscription were used to repay a $40 million interim loan incurred by SIRVA in connection with the Allied Acquisition. As a result of this stock subscription, accredited investors who were stockholders of SIRVA at the time of such subscription, including members of management, were entitled to buy, on a pro rata basis, additional shares of common stock from SIRVA. The total number of shares purchased by these accredited investors was 6,562. In connection with the Allied Acquisition, in December 1999, SIRVA offered and sold to certain members of North American Van Lines' management shares of its common stock and granted options to purchase such shares, pursuant to the SIRVA Stock Incentive Plan. Several additional management offerings were made in 2000, 2001 and 2002. As of May 20, 2002, 114 members of management owned 35,720 shares of such stock and/or had been granted options to purchase 81,307 additional shares of such stock pursuant to these management stock offerings. See "Management--SIRVA Stock Incentive Plan." On August 25, 2000, our parent, SIRVA, and certain of its subsidiaries, including North American Van Lines, contributed certain assets to Moveline, Inc., then a newly incorporated corporation, in exchange for non-voting convertible preferred stock representing approximately 30% of the initial fully diluted capital stock of Moveline. Clayton, Dubilier & Rice Fund V Limited Partnership invested additional funds for approximately 50% of the inital fully diluted capital stock of Moveline. The remaining 20% of Moveline's capital stock was reserved for issuance to Moveline management and third party business partners. On December 31, 2001, we completed a stock-for-stock merger with Moveline, Inc., under an agreement and plan of merger, dated as of November 9, 2001, pursuant to which Moveline merged with one of our wholly-owned subsidiaries, with such subsidiary as the surviving corporation. Under the terms of 77 the merger agreement, Moveline's stockholders received a fraction of a share of the common stock of our parent, SIRVA, for each Moveline share acquired in the merger. Immediately following the merger, we contributed the surviving subsidiary to Allied Van Lines, Inc., another of our wholly-owned subsidiaries. Allied Van Lines subsequently merged with that subsidiary with Allied Van Lines as the surviving corporation. In connection with the stocks for stock merger, Clayton, Dubilier & Rice Fund V Limited Partnership acquired 176,057 additional shares of SIRVA. Prior to the merger, Moveline had developed and marketed a proprietary information technology-based customer care solution that builds upon the relocation industry's historical van-line business model. Clayton, Dubilier & Rice Fund VI Limited Partnership and SIRVA are parties to a Stock Subscription Agreement, dated April 12, 2002. Pursuant to such agreement, Clayton, Dubilier & Rice Fund VI Limited Partnership is entitled to consult with SIRVA with respect to the operations of SIRVA or any of its subsidiaries at any time, to have observers attend meetings of the board of directors of SIRVA and certain of its subsidiaries and to receive all quarterly and annual financial reports and budgets, as well as other documents, of SIRVA. In addition, the Stock Subscription Agreement imposes certain restrictions on the transfer of the shares of common stock of SIRVA owned by Clayton, Dubilier & Rice Fund VI Limited Partnership. Pursuant to the Stock Subscription Agreement, Clayton, Dubilier & Rice Fund VI Limited Partnership purchased 140,846 shares of SIRVA common stock on April 12, 2002. The proceeds of this stock subscription were used to fund a portion of the purchase price for North American Van Lines' purchase of National Association of Independent Truckers, a leading provider of insurance services to independent contract truck drivers. On May 3, 2002, Clayton, Dubilier & Rice Fund VI Limited Partnership purchased an additional 281,691 shares of SIRVA common stock. The proceeds of this stock subscription were used to fund a portion of North American Van Lines' purchase of the Cooperative Resource Services, Ltd. business that provides comprehensive relocation services to companies and their employees, including home sale services, relocation logistics services and mortgage lending services. In connection with these investments made by Clayton, Dubilier & Rice Fund VI Limited Partnership on April 12 and May 3, 2002, accredited investors who currently hold shares of SIRVA common stock, including members of management, will be offered the opportunity to purchase, on a pro rata basis, additional shares of SIRVA common stock. The total number of shares that is expected to be offered to such stockholders is 204,426. On March 21, 2002, the board of directors of SIRVA approved a management stock offering to certain new members of management. In connection with such offering, SIRVA expects to sell up to 17,500 shares of SIRVA common stock and options to purchase 35,000 shares of SIRVA common stock. Our subsidiary, TransGuard Insurance Company of America, Inc., is party to several intercompany agreements with Vanguard Insurance Agency, Inc., Allied Van Lines, ClaimGuard, Inc. and TransGuard General Agency, Inc., governing various matters such as the terms and conditions of the solicitation of accounts by Vanguard on behalf of TransGuard and the payment by Allied Van Lines of certain of TransGuard's operating expenses. Consistent with Illinois law governing the insurance industry and with the exception of the payment by TransGuard to Vanguard on a commission basis, all payments made pursuant to these intercompany agreements are made on a cost-reimbursement basis, with payment amounts ranging from $0.05 million to $2.7 million per year. Exel plc and its affiliates provide certain information technology and real property services to us pursuant to a transition services agreement entered into in connection with the Allied Acquisition. In addition there are a number of properties in the United Kingdom which are used both for operations of the moving and storage services businesses we acquired and also for operations of other businesses of Exel which Exel retained. Certain subsidiaries of Exel lease or sublease, as the case may be, portions of those facilities which we acquired in connection with the Allied Acquisition. Similarly, in the case of the shared sites which we acquired in connection with the Allied Acquisition, Pickfords Limited leases or subleases, as 78 the case may be, to certain Exel entities portions of those facilities for their use. The terms of these leasing and subleasing arrangements range from less than one year to up to fifteen years and are generally at market rents and conditions. DESCRIPTION OF OTHER INDEBTEDNESS SENIOR CREDIT FACILITY GENERAL. In connection with the Allied Acquisition, we entered into a credit facility with a syndicate of financial institutions, with The Chase Manhattan Bank as administrative agent (the "Agent") and Banc of America Securities LLC as syndication agent. The following summary is a description of the principal terms of the senior credit agreement, as amended, and the related documents governing the facility (the "Credit Documentation") and is subject to and qualified in its entirety by reference to the Credit Documentation. The senior credit agreement and its amendments governing the facility have been filed as exhibits to the registration statement of which this prospectus is a part. It is available as set forth under the heading "Where You Can Find More Information." The senior credit agreement originally provided for senior secured credit facilities in an aggregate principal amount of up to $475.0 million, consisting of: - a revolving credit facility in an aggregate principal amount of up to $150.0 million, - a seven-year term loan of $150.0 million (the "Tranche A Term Loan") and - an eight-year term loan of $175.0 million (the "Tranche B Term Loan"). In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, North American Van Lines borrowed an additional $50.0 million under the Tranche B Term Loan facility. These senior secured credit facilities are made available to North American Van Lines. The revolving credit facility is also made available to certain foreign subsidiaries of North American Van Lines (together with North American Van Lines, the "Borrowers"). USE OF FACILITY. In connection with the closing of the Allied Acquisition, North American Van Lines used the term loans and borrowed under the revolving credit facility to refinance certain existing indebtedness and as part of the financing for the Allied Acquisition. In connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd., North American Van Lines used the additional $50.0 million borrowed under the Tranche B Term Loan facility to fund a portion of the purchase price for the acquired business, to refinance certain existing indebtedness of the acquired business, and to refinance existing indebtedness under the revolving credit facility. The remaining unused commitment under the revolving credit facility is available to the Borrowers from time to time for general corporate purposes. GUARANTEE AND SECURITY. The obligations of North American Van Lines are guaranteed by SIRVA and certain of the existing and subsequently acquired or organized domestic subsidiaries of North American Van Lines. In the event that any foreign subsidiary of North American Van Lines is permitted to borrow under the senior credit facility, its obligations will be guaranteed by SIRVA, North American Van Lines, certain of North American Van Lines' domestic subsidiaries and certain of the subsidiaries, including foreign subsidiaries, of such foreign subsidiary borrower. North American Van Lines' obligations under the senior credit facility are secured by substantially all of the tangible and intangible assets of SIRVA, North American Van Lines and certain of its domestic subsidiaries, except that - the stock or securities of the foreign subsidiaries of North American Van Lines (other than any direct first-tier foreign subsidiary of North American Van Lines) is not required to be pledged to secure these obligations, - no more than 65% of the stock or securities of a direct first-tier foreign subsidiary of North American Van Lines is required to be pledged to secure these obligations, and 79 - no more than 65% of the stock or securities of any domestic subsidiary of North American Van Lines that acts as a holding company for foreign subsidiaries of North American Van Lines is required to be pledged to secure these obligations. In the event that any foreign subsidiary of North American Van Lines is permitted to borrow under the senior credit facility, its obligations will be secured by not more than 65% of the stock of such foreign subsidiary borrower and by substantially all of the tangible and intangible assets of such foreign subsidiary borrower, SIRVA, North American Van Lines, certain of North American Van Lines' domestic subsidiaries and the capital stock of certain of the subsidiaries, including foreign subsidiaries, of such foreign subsidiary borrower. AMORTIZATION; INTEREST; FEES; MATURITY. The term loan obligations under the senior credit agreement are repayable in quarterly principal payments over seven years, in the case of the Tranche A Term Loan, or eight years, in the case of the Tranche B Term Loan. Loans under the revolving credit facility mature on the seventh anniversary of the initial borrowing. The term loans and loans under the revolving credit facility bear interest at floating rates based upon the interest rate option we elect. As of March 31, 2002 the interest rate on the Tranche A loan was 4.89%, the interest rate on the Tranche B loan was 5.89% and the interest on the $56.6 million then outstanding under the revolving credit facility was 4.91%. The transaction fees and expenses set forth in the sources and uses of funds for the Allied Acquisition include transaction fees payable in connection with the commitments under the senior credit agreement. In addition, a commitment fee is payable quarterly on the daily average undrawn portion of the revolving credit facility, in the amount of 0.50% per annum or less, depending on our financial performance. PREPAYMENTS. The senior credit agreement permits voluntary prepayment of the term loans or loans under the revolving credit facility without premium or penalty except for breakage costs incurred in connection with prepayment during a euro currency interest period and except as provided for in the next sentence. Optional prepayments of Tranche B Term loans and any prepayments, whether optional or mandatory, made as a result of or in connection with a change of control, or any refinancing of any of the senior credit facilities, shall be at par plus accrued interest. With limited exceptions, mandatory prepayments will be required to be made from net cash proceeds of certain asset sales, net cash proceeds of certain debt issuances and 50% of excess cash flow, such percentage to be reduced to zero upon our achievement of performance criteria. COVENANTS AND EVENTS OF DEFAULT. The senior credit facility is subject to covenants that, among other things, restrict our ability to: - dispose of assets, - incur indebtedness or guarantee obligations, - prepay other indebtedness, - make dividends and other restricted payments, - create liens, - make equity or debt investments, - make acquisitions, - modify terms of the indenture, - engage in mergers or consolidations, - change the business we conduct, - make capital expenditures - or engage in certain transactions with affiliates. 80 In addition, under the senior credit facility, North American Van Lines is also subject to certain financial covenants, including the requirement to maintain a minimum interest expense coverage ratio and a maximum leverage ratio. These financial tests become more restrictive in future years. The senior credit facility is subject to customary events of default. SIRVA SENIOR DISCOUNT DEBT GENERAL. In connection with the Allied Acquisition, SIRVA incurred $35.0 million initial accreted value of unsecured senior discount term loan borrowings from The Chase Manhattan Bank who has assigned its interest in the loan to its affiliate, J.P. Morgan Securities Inc., (formerly known as Chase Securities Inc.) and Blue Ridge Investments, LLC, affiliates of the initial purchasers of the old notes. This senior discount loan will accrete at a rate of 16% per annum from its initial accreted value of $35.0 million at November 19, 1999. Such amount had accreted to $50.1 million as of March 31, 2002. Under the loan agreement relating to the senior discount loan, as amended (the "Senior Discount Loan Agreement"), the lenders may, at their option, exchange the senior discount loan for senior discount notes due 2009 at any time prior to July 8, 2002, which is the next business day following the date that is 960 days after the initial closing date, by giving written notice to SIRVA, and if they have not done so by that date, they will be deemed to have given that notice on that date. The issuance and delivery of the senior discount notes to the initial holders of such notes, who are expected to be the lenders under the senior discount loan or affiliates of those lenders will be in exchange for, and repayment in full and cancellation of, the senior discount loan. The initial accreted value of the senior discount notes will equal the then accreted value of the senior discount loan. SIRVA will not receive any proceeds from the offering and sale of the senior discount notes by the initial holders to purchasers. So long as the SIRVA senior discount debt is held by Blue Ridge Investments and (J.P. Morgan Securities Inc., formerly known as Chase Securities Inc.) or their respective affiliates as loans under the Senior Discount Loan Agreement, the senior discount debt may be redeemed in whole or in part, at a price equal to its accreted value plus accrued and unpaid interest, if any. The following is a brief summary of the principal terms of the senior discount notes, and is subject to and qualified in its entirety by reference to the indenture by which the senior discount notes will be governed. The senior discount loan has economic and other substantive terms substantially identical to those of the senior discount notes. PAYMENT. The senior discount notes will accrete until December 1, 2004 at a rate of 16.00% per annum. Thereafter, the senior discount notes will bear interest at a rate of 16.00% per annum, payable semi-annually. The senior discount notes will be senior unsecured obligations of SIRVA, and will not have the benefit of guarantees. CHANGE OF CONTROL. Each holder of senior discount notes will be entitled to require SIRVA, and SIRVA must offer, to repurchase the senior discount notes held by such holder at a price of 101% of the aggregate principal amount, or accreted value, as the case may be, of such notes, plus accrued and unpaid interest and liquidated damages, if any, to the date of repurchase, upon the occurrence of a Change of Control Triggering Event (as defined in the senior discount notes indenture). OPTIONAL REDEMPTION. SIRVA may redeem all or a part of the senior discount notes at the redemption prices set forth in the senior discount notes indenture plus accrued and unpaid interest, if any, on such notes, to the applicable redemption date. The senior discount notes will not be subject to any mandatory redemption requirements. COVENANTS, EVENTS OF DEFAULT AND REGISTRATION RIGHTS. The senior discount notes will be subject to covenants, events of default and registration requirements similar to those relating to the notes described in this prospectus. 81 DESCRIPTION OF NOTES GENERAL North American Van Lines issued the old notes, and will issue the new notes, under an indenture, dated as of November 19, 1999, among itself, the initial Note Guarantors and State Street Bank and Trust Company, as trustee. The indenture has been filed as an exhibit to the registration statement of which this prospectus is a part. It is available as set forth under the heading "Where You Can Find More Information." The terms of the new notes are identical to the terms of the old notes, except that the new notes will be registered under the Securities Act, and therefore will not contain restrictions on transfer, will not contain provisions relating to additional interest, and will contain terms of an administrative nature that differ from those of the old notes. New notes will otherwise be treated as notes for the purposes of the indenture. The following is a summary of the material provisions of the indenture. This summary does not contain all of the information that may be important to an investor in the notes. It is subject to, and is qualified in its entirety by reference to, all the provisions of the indenture, including terms defined in the indenture and provisions of the Trust Indenture Act of 1939, as amended ("TIA"). Whenever particular defined terms of the indenture not otherwise defined here are referred to, those defined terms are incorporated here by reference. For definitions of certain capitalized terms used in the following summary, see "--Certain Definitions" below. In this summary, "North American Van Lines" refers only to North American Van Lines, Inc., and its successors under the indenture and not to any of North American Van Lines, Inc.'s subsidiaries. The notes will be unsecured obligations of North American Van Lines, ranking subordinate in right of payment to all Senior Indebtedness of North American Van Lines. TERMS OF THE NOTES The notes will mature on December 1, 2009. Subject to the terms of the registration rights agreement described under "--Registration Rights" below, each note will bear interest at a rate of 13 3/8% per annum from the date of issuance, or from the most recent date to which interest has been paid or provided for, payable semiannually in cash on June 1 and December 1 of each year, commencing June 1, 2000, to holders of record at the close of business on the May 15 or November 15 immediately preceding the interest payment date. Interest on the notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. In addition to the notes offered hereby, North American Van Lines may from time to time issue additional notes ("Additional Notes") in an aggregate principal amount equal to the aggregate principal amount of notes issued on the date of the indenture. Any offering of Additional Notes is subject to the covenant described below under the caption "--Certain Covenants--Limitation on Indebtedness." The notes and any Additional Notes subsequently issued under the indenture would be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. North American Van Lines will issue notes in fully registered form, without coupons, in denominations of $1,000 and integral multiples thereof. The notes will mature on December 1, 2009. Except where the context otherwise requires, in this "Description of Notes," references to the notes include any old notes or Additional Notes, as well as the new notes. METHODS OF RECEIVING PAYMENTS ON THE NOTES Payments of principal, premium, if any, and interest will be made at the office or agency of North American Van Lines in the Borough of Manhattan, The City of New York (which initially shall be the corporate trust office of an affiliate of the trustee) or the corporate trust office of an affiliate of the Paying 82 Agent in New York City, except that, at the option of North American Van Lines, payment of interest may be made by check mailed to the address of each registered holder of the notes as such address appears in the Note Register, or, if a holder has given wire instructions to North American Van Lines, by wire transfer to a United States dollar account maintained by the holder with a bank located in New York City. PAYING AGENT AND REGISTRAR FOR THE NOTES The trustee will initially act as principal Paying Agent and Registrar at the corporate trust offices of its affiliate in the City of New York, State of New York. North American Van Lines may change the Paying Agent or Registrar without prior notice to the holders, and North American Van Lines or any of its Subsidiaries may act as Paying Agent or Registrar. OPTIONAL REDEMPTION The notes will be redeemable, at North American Van Lines' option, in whole or in part, and from time to time on and after December 1, 2004 and prior to maturity. Such redemption may be made upon notice mailed by first-class mail to each holder's registered address, not less than 30 nor more than 60 days prior to the redemption date. The notes will be so redeemable at the following redemption prices (expressed as a percentage of principal amount), plus accrued interest, if any, to the relevant redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on December 1 of the years set forth below:
REDEMPTION PERIOD PRICE - ------ ---------- 2004........................................................ 106.688% 2005........................................................ 104.458% 2006........................................................ 102.229% 2007 and thereafter......................................... 100.000%
In addition, at any time and from time to time prior to December 1, 2002, North American Van Lines at its option may redeem notes in an aggregate principal amount equal to up to 35% of the original aggregate principal amount of the notes (including the principal amount of any Additional Notes), with funds in an aggregate amount (the "Redemption Amount") not exceeding the aggregate proceeds of one or more Equity Offerings (as defined below) at a redemption price (expressed as a percentage of principal amount thereof) of 113.375% plus accrued interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that an aggregate principal amount of notes equal to at least 65% of the original aggregate principal amount of the notes (including the principal amount of any Additional Notes) must remain outstanding after each such redemption. "Equity Offering" means a sale of Capital Stock (other than Disqualified Stock) (X) that is a sale of Capital Stock of North American Van Lines, or (Y) proceeds of which in an amount equal to or exceeding the Redemption Amount are contributed to North American Van Lines or any of its Restricted Subsidiaries. North American Van Lines may make such redemption upon notice mailed by first-class mail to each holder's registered address, not less than 30 nor more than 60 days prior to the redemption date (but in no event more than 180 days after the completion of the related Equity Offering). SELECTION In the case of any partial redemption, selection of the notes for redemption will be made by the trustee on a PRO RATA basis, by lot or by such other method as the trustee in its sole discretion shall deem to be fair and appropriate, although no note of $1,000 in original principal amount or less will be redeemed in part. If any note is to be redeemed in part only, the notice of redemption relating to such note shall state 83 the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note. NOTE GUARANTEES On the Issue Date, each Domestic Subsidiary that then guarantees payment by North American Van Lines of Bank Indebtedness of North American Van Lines will also guarantee payment of the notes. In addition, after the Issue Date, North American Van Lines will cause each Domestic Subsidiary that guarantees payment by North American Van Lines of Bank Indebtedness of North American Van Lines to execute and deliver to the trustee a supplemental indenture or other instrument pursuant to which such Subsidiary will guarantee payment of the notes, whereupon such Subsidiary will become a Note Guarantor for all purposes under the indenture. North American Van Lines will also have the right to cause any other Subsidiary so to guarantee payment of the Notes. Note Guarantees will be subject to release and discharge under certain circumstances prior to payment in full of the notes. See "--Certain Covenants--Future Note Guarantors." RANKING The indebtedness evidenced by the notes is unsecured Senior Subordinated Indebtedness of North American Van Lines, is subordinated in right of payment, as set forth in the indenture, to the payment when due in full in cash of all existing and future Senior Indebtedness of North American Van Lines, including North American Van Lines' obligations under the Senior Credit Facility, ranks PARI PASSU in right of payment with all existing and future Senior Subordinated Indebtedness of North American Van Lines and is senior in right of payment to all existing and future Subordinated Obligations of North American Van Lines. The notes are also effectively subordinated to any Secured Indebtedness of North American Van Lines to the extent of the value of the assets securing such Indebtedness. However, payment from the money or the proceeds of U.S. Government Obligations held in any defeasance trust described under "--Defeasance" below is not subordinated to any Senior Indebtedness or subject to the restrictions described herein. At March 31, 2002, Senior Indebtedness consisting of indebtedness for borrowed money of North American Van Lines was $362.6 million and North American Van Lines had additional availability of $77.5 million for borrowings under the Senior Credit Facility, all of which would have been Secured Indebtedness, and no Senior Subordinated Indebtedness (other than the Indebtedness represented by the notes) and no Subordinated Obligations. Although the indenture contains limitations on the amount of additional Indebtedness that North American Van Lines may Incur, under certain circumstances the amount of such Indebtedness could be substantial and, in any case, such Indebtedness may be Senior Indebtedness or Secured Indebtedness. See "--Certain Covenants--Limitation on Indebtedness" below. The obligations of each Note Guarantor under the Note Guarantee to which it is a party will be unsecured Guarantor Senior Subordinated Indebtedness of such Note Guarantor, will be subordinated in right of payment, as set forth in the indenture, to the payment when due in full in cash of all existing and future Guarantor Senior Indebtedness of such Note Guarantor, including the Note Guarantor's obligations under or relating to the Senior Credit Facility, will rank PARI PASSU in right of payment with all existing and future Guarantor Senior Subordinated Indebtedness of such Note Guarantor and will be senior in right of payment to all existing and future Guarantor Subordinated Obligations of such Note Guarantor. The Note Guarantee of each Note Guarantor will also be effectively subordinated to any Secured Indebtedness of such Note Guarantor to the extent of the value of the assets securing such Indebtedness. The terms on which each Note Guarantee will be subordinated to the prior payment in full of Guarantor Senior Indebtedness will be substantially identical to those described below governing the subordination of the notes to the prior payment in full of Senior Indebtedness. 84 A substantial part of the operations of North American Van Lines are conducted through its Subsidiaries. Claims of creditors of such Subsidiaries (other than Subsidiaries that are Note Guarantors), including trade creditors, and claims of preferred shareholders (if any) of such Subsidiaries will have priority with respect to the assets and earnings of such Subsidiaries over the claims of creditors of North American Van Lines, including holders of the notes. The notes, therefore, will be effectively subordinated to creditors (including trade creditors) and preferred shareholders (if any) of Subsidiaries of North American Van Lines (other than Subsidiaries that are Note Guarantors). Certain of the operations of a Note Guarantor may be conducted through Subsidiaries thereof that are not also Note Guarantors. Claims of creditors of such Subsidiaries, including trade creditors, and claims of preferred shareholders (if any) of such Subsidiaries will have priority with respect to the assets and earnings of such Subsidiaries over the claims of creditors of such Note Guarantor, including claims under the Note Guarantee of such Note Guarantor. Such Note Guarantee, therefore, will be effectively subordinated to creditors (including trade creditors) and preferred shareholders (if any) of such Subsidiaries. Although the indenture limits the incurrence of Indebtedness (including preferred stock) by certain of North American Van Lines' Subsidiaries, such limitation is subject to a number of significant qualifications. As of December 31, 2001, North American Van Lines Subsidiaries (other than Subsidiaries who became Note Guarantors on the Issue Date) would have had substantial liabilities, including Indebtedness for borrowed money and other balance sheet liabilities (including trade payables). No preferred stock of such Subsidiaries was outstanding at such date. See "--Certain Covenants--Limitation on Indebtedness" below. "Senior Indebtedness" means, with respect to North American Van Lines, the following obligations, whether outstanding on the date of the indenture or thereafter issued, without duplication: (A) all Bank Indebtedness, (B) all obligations in respect of any Receivables Financing, and (C) all obligations consisting of the principal of and premium, if any, and accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to North American Van Lines regardless of whether post-filing interest is allowed in such proceeding) on, and fees and other amounts owing in respect of, all other Indebtedness of North American Van Lines, unless, in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is expressly provided that the obligations in respect of such Indebtedness are not senior in right of payment to the notes; provided, however, that Senior Indebtedness shall not include (1) any obligation of North American Van Lines to any Subsidiary, (2) any liability for Federal, state, foreign, local or other taxes owed or owing by North American Van Lines, (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including Guarantees thereof or instruments evidencing such liabilities), (4) any Indebtedness of North American Van Lines (or Guarantee by North American Van Lines of any Indebtedness) that is expressly subordinated in right of payment to any other Indebtedness of North American Van Lines (or Guarantee by North American Van Lines of any Indebtedness), (5) any Capital Stock of North American Van Lines or (6) that portion of any Indebtedness of North American Van Lines that is Incurred by North American Van Lines in violation of the covenant described under "--Certain Covenants--Limitation on Indebtedness" (but no such violation shall be deemed to exist for purposes of this clause (6) if any holder of such Indebtedness or such holder's representative shall have received an Officer's Certificate of North American Van Lines to the effect that such Incurrence of such 85 Indebtedness does not (or that the Incurrence by North American Van Lines of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such covenant). If any Senior Indebtedness is disallowed, avoided or subordinated pursuant to the provisions of Section 548 of Title 11 of the United States Code or any applicable state fraudulent conveyance law, such Senior Indebtedness nevertheless will constitute Senior Indebtedness. Only Indebtedness of North American Van Lines that is Senior Indebtedness will rank senior to the notes in accordance with the provisions of the indenture. The notes will in all respects rank PARI PASSU with all other Senior Subordinated Indebtedness of North American Van Lines. Only Indebtedness of a Note Guarantor that is Guarantor Senior Indebtedness will rank senior to the Note Guarantee of such Note Guarantor in accordance with the provisions of the indenture. Such Note Guarantee will in all respects rank PARI PASSU with all other Guarantor Senior Subordinated Indebtedness of such Note Guarantor. North American Van Lines has agreed in the indenture that it will not Incur, directly or indirectly, any Indebtedness that is expressly subordinated in right of payment to Senior Indebtedness of North American Van Lines unless such Indebtedness is PARI PASSU with, or subordinated in right of payment to, the notes. Each Note Guarantor will agree that it will not Incur, directly or indirectly, any Indebtedness that is expressly subordinated in right of payment to Guarantor Senior Indebtedness of such Note Guarantor unless such Indebtedness is PARI PASSU with, or subordinated in right of payment to, the Note Guarantee of such Note Guarantor. Unsecured Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness merely because it is unsecured, and Indebtedness that is not guaranteed by a particular Person is not deemed to be subordinate or junior to Indebtedness that is so guaranteed merely because it is not so guaranteed. North American Van Lines may not pay principal of, or premium (if any) or interest on, the notes or make any deposit pursuant to the provisions described under "--Defeasance" below and may not otherwise purchase, redeem or otherwise retire any notes (except that holders of notes may receive and retain Permitted Junior Securities and payments made from the trust described under "--Defeasance" if the funding of such trust is permitted under the defeasance section of the indenture) (collectively, "pay the notes") if (1) any Senior Indebtedness is not paid when due in cash or Cash Equivalents or (2) any other default on Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms (either such event, a "Payment Default") unless, in either case, (A) the Payment Default has been cured or waived and any such acceleration has been rescinded in writing or (B) such Senior Indebtedness has been paid in full in cash or Cash Equivalents. However, North American Van Lines may pay the notes without regard to the foregoing if North American Van Lines and the trustee receive written notice approving such payment from the Representative for the Designated Senior Indebtedness with respect to which the Payment Default has occurred and is continuing. In addition, during the continuance of any default (other than a Payment Default) with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace period (a "Non-payment Default"), North American Van Lines may not pay the notes for the period specified as follows (a "Payment Blockage Period") (except that holders of notes may receive and retain Permitted Junior Securities and payments made from the trust described under "--Defeasance" if the funding of such trust is permitted under the defeasance section of the indenture). 86 The Payment Blockage Period shall commence upon the receipt by the trustee (with a copy to North American Van Lines) of written notice (a "Blockage Notice") of such Non-payment Default from the Representative for such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and shall end on the earliest to occur of the following events: (1) 179 days shall have elapsed since such receipt of such Blockage Notice, (2) the Non-payment Default giving rise to such Blockage Notice is no longer continuing (and no other Payment Default or Non-payment Default is then continuing), (3) such Designated Senior Indebtedness shall have been discharged or repaid in full in cash or Cash Equivalents or (4) such Payment Blockage Period shall have been terminated by written notice to the trustee and North American Van Lines from the Person or Persons who gave such Blockage Notice. North American Van Lines shall promptly resume payments on the notes, including any missed payments, after such Payment Blockage Period ends, unless any Payment Default otherwise exists. Not more than one Blockage Notice may be given in any 360 consecutive day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period. In no event may the total number of days during which any Payment Blockage Period is in effect extend beyond 179 days from the date of receipt by the trustee of the relevant Blockage Notice, and there must be a 181 consecutive day period during any 360 consecutive day period during which no Payment Blockage Period is in effect. No nonpayment default that existed or was continuing on the date of delivery of any Blockage Notice to the trustee shall be, or be made, the basis for a subsequent Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 consecutive days. Upon any payment or distribution of the assets of North American Van Lines upon a total or partial liquidation or dissolution or reorganization of or similar proceeding relating to North American Van Lines or its property, or in a bankruptcy, insolvency, receivership or similar proceeding relating to North American Van Lines or its property, the holders of Senior Indebtedness will be entitled to receive payment in full in cash of the Senior Indebtedness before the noteholders are entitled to receive any payment (except that holders of notes may receive and retain Permitted Junior Securities and payments made from the trust described under "--Defeasance" if the funding of such trust is permitted under the defeasance section of the indenture) and until the Senior Indebtedness is paid in full in cash, any payment or distribution to which noteholders would be entitled but for the subordination provisions of the indenture will be made to holders of the Senior Indebtedness as their interests may appear. If a distribution is made to noteholders that due to the subordination provisions should not have been made to them, such noteholders are required to hold it in trust for the holders of Senior Indebtedness and pay it over to them as their interests may appear. If North American Van Lines fails to make any payment on the notes when due or within any applicable grace period, whether or not on account of the payment blockage provisions referred to above, such failure would constitute an Event of Default under the indenture and would enable the holders of the notes to accelerate the maturity thereof. See "--Defaults." If payment of the notes is accelerated because of an Event of Default, North American Van Lines or the trustee shall promptly notify the holders of the Bank Indebtedness or the Representative of such holders of the acceleration. Such acceleration will not be effective until five Business Days after such holders or the Representative of such holders receive notice of such acceleration. Thereafter, North American Van Lines may pay the notes only if the subordination provisions of the indenture otherwise permit payment at that time. 87 By reason of such subordination provisions contained in the indenture, in the event of liquidation, receivership, reorganization or insolvency, (1) creditors of North American Van Lines that are holders of Senior Indebtedness may recover more, ratably, than the noteholders, (2) trade creditors of North American Van Lines that are not holders of Senior Indebtedness or of Senior Subordinated Indebtedness (including the notes) may recover less, ratably, than holders of Senior Indebtedness and may recover more, ratably, than holders of Senior Subordinated Indebtedness, and (3) North American Van Lines may be unable to meet its obligations on the notes. In addition, as described above, the notes will be effectively subordinated, with respect to North American Van Lines' Subsidiaries, to the claims of creditors of those Subsidiaries. CHANGE OF CONTROL Upon the occurrence after the Issue Date of a Change of Control (as defined below) and the failure of the notes to have, on the 30th day after such Change of Control, a rating of at least BBB- (or equivalent successor rating) by S&P and a rating of at least Baa3 (or equivalent successor rating) by Moody's (a "Change of Control Triggering Event"), each holder will have the right to require North American Van Lines to repurchase all or any part of such holder's notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that North American Van Lines shall not be obligated to repurchase notes pursuant to this covenant in the event that it has exercised its right to redeem all of the notes as described under "--Optional Redemption." The term "Change of Control" means: (1) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders or Holding, is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of North American Van Lines, provided that so long as North American Van Lines is a Subsidiary of Holding, no Person shall be deemed to be or become a "beneficial owner" of more than 50% of the total voting power of the Voting Stock of North American Van Lines unless such Person shall be or become a "beneficial owner" of more than 50% of the total voting power of the Voting Stock of Holding; (2) North American Van Lines sells or transfers (in one or a series of related transactions) all or substantially all of the assets of North American Van Lines and its Restricted Subsidiaries to another Person (other than one or more Permitted Holders or Holding or one or more Subsidiaries thereof); or (3) during any period of two consecutive years (during which period North American Van Lines has been a party to the indenture), individuals who at the beginning of such period were members of the board of directors of North American Van Lines (together with any new members thereof whose election by such board of directors or whose nomination for election by holders of Capital Stock of North American Van Lines was approved by one or more Permitted Holders or by a vote of a majority of the members of such board of directors then still in office who were either members thereof at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such board of directors then in office. 88 In the event that, at the time of such Change of Control Triggering Event, the terms of the Bank Indebtedness restrict or prohibit the repurchase of notes pursuant to this covenant, then prior to the mailing of the notice to holders provided for in the immediately following paragraph but in any event not later than 30 days following the date North American Van Lines obtains actual knowledge of any Change of Control Triggering Event (unless North American Van Lines has exercised its right to redeem all the notes as described under "--Optional Redemption"), North American Van Lines shall (1) repay in full all Bank Indebtedness or offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender who has accepted such offer or (2) obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the notes as provided for in the immediately following paragraph. North American Van Lines shall first comply with the provisions of the immediately preceding sentence before it shall be required to repurchase notes pursuant to the provisions described below. North American Van Lines' failure to comply with such provisions or the provisions of the immediately following paragraph shall constitute an Event of Default described in clause (4) and not in clause (2) under "--Defaults" below. Unless North American Van Lines has exercised its right to redeem all the notes as described under "--Optional Redemption," North American Van Lines shall, not later than 30 days following the date North American Van Lines obtains actual knowledge of any Change of Control Triggering Event having occurred, mail a notice to each holder with a copy to the trustee stating: (1) that a Change of Control Triggering Event has occurred or may occur and that such holder has, or upon such occurrence will have, the right to require North American Van Lines to purchase such holder's notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date); (2) the circumstances and relevant facts and financial information regarding such Change of Control; (3) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); (4) the instructions determined by North American Van Lines, consistent with this covenant, that a holder must follow in order to have its notes purchased; and (5) if such notice is mailed prior to the occurrence of a Change of Control or Change of Control Triggering Event, that such offer is conditioned on the occurrence of such Change of Control Triggering Event. North American Van Lines will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, North American Van Lines will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. The Change of Control Triggering Event purchase feature is a result of negotiations between North American Van Lines and the initial purchasers. North American Van Lines has no present plans to engage in a transaction involving a Change of Control, although it is possible that North American Van Lines would decide to do so in the future. Subject to the limitations discussed below, North American Van Lines could, in the future, enter into certain transactions, including acquisitions, refinancings or recapitalizations, that would not constitute a Change of Control under the indenture, but that could increase the amount of 89 Indebtedness outstanding at such time or otherwise affect North American Van Lines' capital structure or credit ratings. The occurrence of a Change of Control would constitute a default under the Senior Credit Agreement. Agreements governing future Senior Indebtedness of North American Van Lines may contain prohibitions of certain events that would constitute a Change of Control or require such Senior Indebtedness to be repurchased or repaid upon a Change of Control. Moreover, the exercise by the holders of their right to require North American Van Lines to repurchase the notes could cause a default under such agreements, even if the Change of Control itself does not, due to the financial effect of such repurchase on North American Van Lines. Finally, North American Van Lines' ability to pay cash to the holders upon a repurchase may be limited by North American Van Lines' then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases. The definition of Change of Control includes a phrase relating to the sale or other transfer of "all or substantially all" of North American Van Lines' assets, as such phrase is used in the Revised Model Business Corporation Act. Although there is a developing body of case law interpreting the phrase "substantially all," there is no precise definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty in ascertaining whether a particular transaction would involve a disposition of "all or substantially all" of the assets of North American Van Lines, and therefore it may be unclear as to whether a Change of Control has occurred and whether the holders of the notes have the right to require North American Van Lines to repurchase such notes. CERTAIN COVENANTS The indenture contains covenants including, among others, the following: LIMITATION ON INDEBTEDNESS. (a) North American Van Lines will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness; provided, however, that North American Van Lines or any Note Guarantor may Incur Indebtedness if on the date of the Incurrence of such Indebtedness, after giving effect to the Incurrence thereof, the Consolidated Coverage Ratio would be greater than 2.00:1.00 if such Indebtedness is Incurred on or prior to December 1, 2001 or 2.25:1.00 if such Indebtedness is Incurred thereafter. (b) Notwithstanding the foregoing paragraph (a), North American Van Lines and its Restricted Subsidiaries may Incur the following Indebtedness: (1) Indebtedness Incurred pursuant to Credit Facilities (including but not limited to in respect of letters of credit or bankers' acceptances issued or created thereunder) and (without limiting the foregoing) any Refinancing Indebtedness in respect thereof, in a maximum principal amount at any time outstanding (giving effect to any refinancing thereof) not exceeding in the aggregate the amount equal to the sum of (A) $475.0 million and (B) the aggregate amount by which the Borrowing Base determined as of the date of such Incurrence exceeds $245.0 million (plus in the case of any refinancing of any Credit Facility or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing) LESS the aggregate principal amount of Indebtedness Incurred pursuant to this clause (b)(1) under the Credit Facilities (or any refinancing thereof) that is permanently repaid pursuant to the covenant described below under "--Limitation on Sales of Assets and Subsidiary Stock"; 90 (2) Indebtedness (A) of any Restricted Subsidiary to North American Van Lines or (B) of North American Van Lines or any Restricted Subsidiary to any Restricted Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock of such Restricted Subsidiary to which such Indebtedness is owed, or other event, that results in such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of such Indebtedness (except to North American Van Lines or a Restricted Subsidiary) will be deemed, in each case, an Incurrence of such Indebtedness by the issuer thereof; (3) Indebtedness represented by the notes (other than Additional Notes), any Indebtedness (other than the Indebtedness described in clauses (1) or (2) above) outstanding on the Issue Date and any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (3) or paragraph (a) above; (4) Purchase Money Obligations and Capitalized Lease Obligations, and any Refinancing Indebtedness with respect thereto, in an aggregate principal amount at any time outstanding (giving effect to any refinancing thereof) not exceeding an amount equal to the greater of (A) $35.0 million and (B) 5% of Consolidated Tangible Assets; (5) Indebtedness of any Person that is assumed by North American Van Lines or any Restricted Subsidiary in connection with its acquisition of assets from such Person or any Affiliate thereof or is issued and outstanding on or prior to the date on which such Person was acquired by North American Van Lines or any Restricted Subsidiary or merged or consolidated with or into any Restricted Subsidiary (other than Indebtedness Incurred to finance, or otherwise in connection with, such acquisition), PROVIDED that on the date of such acquisition, merger or consolidation, after giving effect thereto, North American Van Lines could Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) above; and any Refinancing Indebtedness with respect to any such Indebtedness; (6) (A) Guarantees by North American Van Lines or any Restricted Subsidiary of Indebtedness or any other obligation or liability of North American Van Lines or any Restricted Subsidiary (other than any Indebtedness incurred by North American Van Lines or such Restricted Subsidiary, as the case may be, in violation of the covenant described under "--Limitation on Indebtedness"), or (B) without limiting the covenant described under "--Limitation on Liens," Indebtedness of North American Van Lines or any Restricted Subsidiary arising by reason of any Lien granted by or applicable to such Person securing Indebtedness of North American Van Lines or any Restricted Subsidiary (other than any Indebtedness incurred by North American Van Lines or such Restricted Subsidiary, as the case may be, in violation of the covenant described under "--Limitation on Indebtedness"); (7) Indebtedness of North American Van Lines or any Restricted Subsidiary (A) arising from the honoring of a check, draft or similar instrument of such Person drawn against insufficient funds, provided that such Indebtedness is extinguished within five Business Days of its incurrence, or (B) consisting of guarantees, indemnities, obligations in respect of earnouts or other purchase price adjustments, or similar obligations, Incurred in connection with the acquisition or disposition of any business, assets or Person (including pursuant to the Allied Acquisition); 91 (8) Indebtedness of North American Van Lines or any Restricted Subsidiary in respect of (A) letters of credit, bankers' acceptances or other similar instruments or obligations issued, or relating to liabilities or obligations incurred, in the ordinary course of business (including those issued to governmental entities in connection with self-insurance under applicable workers' compensation statutes), (B) completion guarantees, surety, judgment, appeal or performance bonds, or other similar bonds, instruments or obligations, provided, or relating to liabilities or obligations incurred, in the ordinary course of business, (C) Hedging Obligations entered into for bona fide hedging purposes in the ordinary course of business, (D) Management Guarantees, (E) Agent Guarantees in an aggregate principal amount not exceeding $10.0 million outstanding at any time, or (F) the financing of insurance premiums in the ordinary course of business; (9) Indebtedness of a Receivables Subsidiary secured by a Lien on all or part of the assets disposed of in, or otherwise incurred in connection with, a Financing Disposition, which Indebtedness is, except for Standard Receivables Obligations, otherwise without recourse to North American Van Lines or any Restricted Subsidiary of North American Van Lines (other than any Receivables Subsidiary); (10) Indebtedness of a Foreign Subsidiary if, on the date of Incurrence of such Indebtedness, after giving effect to the Incurrence thereof, (A) the Consolidated Coverage Ratio would be at least 2.25:1.00 and (B) if, as a result of such Incurrence, such Foreign Subsidiary shall then become subject to any restriction or limitation (under any agreement or instrument governing such Indebtedness) on its ability to pay dividends or make other distributions to North American Van Lines, the Foreign Subsidiary Coverage Ratio would be greater than 2.75:1.00; provided, that if such Indebtedness is not incurred pursuant to the preceding clause (B), such Indebtedness shall not be amended, modified or otherwise supplemented such that such Foreign Subsidiary will become subject to any such restriction or limitation referred to in such clause unless such Indebtedness could then be Incurred pursuant to such clause; and any Refinancing Indebtedness with respect to any such Indebtedness; (11) Indebtedness of North American Van Lines or any Restricted Subsidiary in an aggregate principal amount at any time outstanding (giving effect to any refinancing thereof) not exceeding an amount equal to $45.0 million. (c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this covenant, (1) any other obligation of the obligor on such Indebtedness (or of any other Person who could have Incurred such Indebtedness under this covenant) arising under any Guarantee, Lien or letter of credit, bankers' acceptance or other similar instrument or obligation supporting such Indebtedness shall be disregarded to the extent that such Guarantee, Lien or letter of credit, bankers' acceptance or other similar instrument or obligation secures the principal amount of such Indebtedness; 92 (2) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in paragraph (b) above, North American Van Lines, in its sole discretion, shall classify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of such clauses; and (3) the amount of Indebtedness issued at a price that is less than the principal amount thereof shall be equal to the amount of the liability in respect thereof determined in accordance with GAAP. (d) For purposes of determining compliance with any Dollar-denominated restriction on the Incurrence of Indebtedness denominated in a foreign currency, the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness, provided that (1) the Dollar-equivalent principal amount of any such Indebtedness outstanding on the Issue Date shall be calculated based on the relevant currency exchange rate in effect on the Issue Date, (2) if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced and (3) the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency and Incurred pursuant to the Senior Credit Facility shall be calculated based on the relevant currency exchange rate in effect on, at North American Van Lines' option, (A) the Issue Date, (B) any date on which any of the respective commitments under the Senior Credit Facility shall be reallocated between or among facilities or subfacilities thereunder, or on which such rate is otherwise calculated for any purpose thereunder, or (C) the date of such Incurrence. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing. LIMITATION ON LAYERING. North American Van Lines shall not Incur any Indebtedness that is expressly subordinated in right of payment to any Senior Indebtedness of North American Van Lines, unless such Indebtedness so Incurred ranks PARI PASSU in right of payment with the notes, or is subordinated in right of payment to the notes. No Note Guarantor shall Incur any Indebtedness that is expressly subordinated in right of payment to any Guarantor Senior Indebtedness of such Note Guarantor, unless such Indebtedness so Incurred ranks PARI PASSU in right of payment with such Note Guarantor's Note Guarantee, or is subordinated in right of payment to such Note Guarantor's Note Guarantee. Unsecured Indebtedness is not deemed to be subordinate or junior to secured Indebtedness merely because it is unsecured, and Indebtedness that is not guaranteed by a particular Person is not deemed to be subordinate or junior to Indebtedness that is so guaranteed merely because it is not so guaranteed. 93 LIMITATION ON RESTRICTED PAYMENTS. (a) North American Van Lines shall not, and shall not permit any Restricted Subsidiary, directly or indirectly, to (1) declare or pay any dividend or make any distribution on or in respect of its Capital Stock (including any such payment in connection with any merger or consolidation to which North American Van Lines or any Restricted Subsidiary is a party) except (x) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock) and (y) dividends or distributions payable to North American Van Lines or any Restricted Subsidiary (and, in the case of any such Restricted Subsidiary making such dividend or distribution, to other holders of its Capital Stock on no more than a pro rata basis, measured by value), (2) purchase, redeem, retire or otherwise acquire for value any Capital Stock of North American Van Lines held by Persons other than North American Van Lines or a Restricted Subsidiary, (3) purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations (other than a purchase, redemption, defeasance or other acquisition or retirement for value in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such acquisition or retirement) or (4) make any Investment (other than a Permitted Investment) in any Person (any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition or retirement or Investment being herein referred to as a "Restricted Payment"), if at the time North American Van Lines or such Restricted Subsidiary makes such Restricted Payment: (x) a Default shall have occurred and be continuing (or would result therefrom); (y) North American Van Lines could not incur at least an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under "--Limitation on Indebtedness"; or (z) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be as determined in good faith by the Board of Directors, whose determination shall be conclusive) declared or made subsequent to the Issue Date and then outstanding would exceed the sum of: (A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from September 30, 1999 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which consolidated financial statements of North American Van Lines are available (or, in case such Consolidated Net Income shall be a negative number, 100% of such negative number); (B) the aggregate Net Cash Proceeds and the fair market value of Qualified Proceeds received (X) by North American Van Lines as capital contributions to North American Van Lines after the Issue Date or from the issuance or sale (other than to a Restricted Subsidiary) of its Capital Stock (other than Disqualified Stock) after the Issue Date or (Y) by North American Van Lines or any Restricted Subsidiary from the issuance and sale by North American Van Lines or any Restricted Subsidiary after the Issue Date of Indebtedness that shall have been converted into or exchanged for Capital Stock of North American Van Lines (other than Disqualified Stock), PLUS the amount of cash and the fair market value of Qualified Proceeds received by North American Van Lines or any Restricted Subsidiary upon such conversion or exchange; 94 (C) the aggregate amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from (1) dividends, distributions, interest payments, return of capital, repayments of Investments or other transfers of assets to North American Van Lines or any Restricted Subsidiary from any Unrestricted Subsidiary (in each case, in the form of cash, Cash Equivalents or Qualified Proceeds), or (2) the redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of "Investment"), not to exceed in the case of any such Unrestricted Subsidiary the aggregate amount of Investments (other than Permitted Investments) made by North American Van Lines or any Restricted Subsidiary in such Unrestricted Subsidiary after the Issue Date; and (D) in the case of any disposition or repayment of any Investment (in each case, in the form of cash, Cash Equivalents or Qualified Proceeds) constituting a Restricted Payment (without duplication of any amount deducted in calculating the amount of Investments at any time outstanding included in the amount of Restricted Payments), an amount in the aggregate equal to the lesser of the return of capital, repayment or other proceeds with respect to all such Investments and the initial amount of all such Investments. (b) The provisions of the foregoing paragraph (a) will not prohibit any of the following (each, a "Permitted Payment"): (1) any purchase, redemption, repurchase, defeasance or other acquisition or retirement of Capital Stock of North American Van Lines or Subordinated Obligations made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent issuance or sale of, Capital Stock of North American Van Lines (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary) or a substantially concurrent capital contribution to North American Van Lines; provided, that the Net Cash Proceeds from such issuance, sale or capital contribution shall be excluded in subsequent calculations under clause (B) of the preceding paragraph (a); (2) any purchase, redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Obligations (x) made by exchange for, or out of the proceeds of the substantially concurrent issuance or sale of, Refinancing Indebtedness Incurred in compliance with the covenant described under "--Limitation on Indebtedness"; (y) from Net Available Cash to the extent permitted by the covenant described under "--Limitation on Sales of Assets and Subsidiary Stock"; or (Z) to the extent required by the agreement governing such Subordinated Obligations only following the occurrence of a Change of Control Triggering Event (or, in the case of Acquired Debt, any similar event), but only if in each case, North American Van Lines shall have complied with the covenant described under "--Change of Control" and, if required, purchased all notes tendered pursuant to the offer to repurchase all the notes required thereby, prior to purchasing or repaying such Subordinated Obligations; (3) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with the preceding paragraph (a); (4) loans, advances, dividends or distributions by North American Van Lines to Holding to permit Holding to repurchase or otherwise acquire its Capital Stock (including any options, warrants or other rights in respect thereof), or payments by North American Van Lines to repurchase or otherwise acquire Capital Stock (including any options, warrants or other rights in respect thereof), in each case from Management Investors, such payments, loans, advances, dividends or distributions not 95 to exceed an amount (net of repayments of any such loans or advances equal to (A) $12.5 million PLUS (B) $2.5 million multiplied by the number of calendar years that have commenced since the Issue Date PLUS (C) the Net Cash Proceeds received by North American Van Lines since the Issue Date from, or as a capital contribution from, the issuance or sale to Management Investors of Capital Stock (including any options, warrants or other rights in respect thereof), to the extent such Net Cash Proceeds are not included in any calculation under clause (3)(B)(x) of the preceding paragraph (a); (5) the payment by North American Van Lines of, or loans, advances, dividends or distributions by North American Van Lines to Holding to pay, dividends on the common stock or equity of North American Van Lines or Holding following a public offering of such common stock or equity, in an amount not to exceed in any fiscal year 6% of the aggregate gross proceeds received by North American Van Lines in or from such public offering; (6) Restricted Payments (including loans or advances) in an aggregate amount outstanding at any time not to exceed $10.0 million (net of repayments of any such loans or advances); (7) loans, advances, dividends or distributions to Holding or other payments by North American Van Lines or any Restricted Subsidiary (A) to satisfy or permit Holding to satisfy obligations under the Management Agreements, (B) pursuant to the Tax Sharing Agreement, or (C) to pay or permit Holding to pay any Holding Expenses or any Related Taxes; (8) payments by North American Van Lines, or loans, advances, dividends or distributions by North American Van Lines to Holding to make payments, to holders of Capital Stock of North American Van Lines or Holding in lieu of issuance of fractional shares of such Capital Stock, not to exceed $100,000 in the aggregate outstanding at any time; (9) the distribution, as a dividend or otherwise, of Investments in Unrestricted Subsidiaries (with the exception of Investments in Unrestricted Subsidiaries acquired pursuant to the definition of Permitted Investments other than pursuant to clause (17) of such definition); (10) the Transactions; and (11) any purchase, redemption, retirement or other acquisition of Capital Stock that may be deemed to occur upon exercise of stock options, warrants or similar rights to the extent such Capital Stock represents all or part of the exercise price thereof; provided, that (A) in the case of clauses (3) and (5), the net amount of any such Permitted Payment shall be included in subsequent calculations of the amount of Restricted Payments, (B) in the case of clause (4), 50% of the amount of any such Permitted Payment shall be included in subsequent calculations of the amount of Restricted Payments, (C) in all cases other than pursuant to clauses (A) and (B) immediately above, the net amount of any such Permitted Payment shall be excluded in subsequent calculations of the amount of Restricted Payments and (D) with respect to clauses (5) and (6), no Default or Event of Default shall have occurred or be continuing at the time of any such Permitted Payment after giving effect thereto. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED SUBSIDIARIES. North American Van Lines will not, and will not permit any Restricted Subsidiary to, create or otherwise cause to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (A) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to North American Van Lines, 96 (B) make any loans or advances to North American Van Lines or (C) transfer any of its property or assets to North American Van Lines, except any encumbrance or restriction: (1) pursuant to an agreement or instrument in effect at or entered into on the Issue Date (including, without limitation, the Senior Credit Facility), the indenture or the notes; (2) pursuant to any agreement or instrument of a Person, or relating to Indebtedness or Capital Stock of a Person, which Person is acquired by or merged or consolidated with or into North American Van Lines or any Restricted Subsidiary, or which agreement or instrument is assumed by North American Van Lines or any Restricted Subsidiary in connection with an acquisition of assets from such Person, as in effect at the time of such acquisition, merger or consolidation (except to the extent that such Indebtedness was incurred to finance, or otherwise in connection with, such acquisition, merger or consolidation), provided that for purposes of this clause (2), if another Person is the Successor Company, any Subsidiary thereof or agreement or instrument of such Person or any such Subsidiary shall be deemed acquired or assumed, as the case may be, by North American Van Lines or a Restricted Subsidiary, as the case may be, when such Person becomes the Successor Company; (3) pursuant to an agreement or instrument (a "Refinancing Agreement") effecting a refinancing of Indebtedness Incurred pursuant to, or that otherwise extends, renews, refunds, refinances or replaces, an agreement or instrument referred to in clause (1) or (2) of this covenant or this clause (3) (an "Initial Agreement") or contained in any amendment, supplement or other modification to an Initial Agreement (an "Amendment"); provided, however, that the encumbrances and restrictions contained in any such Refinancing Agreement or Amendment taken as a whole are not materially less favorable to the holders of the notes than encumbrances and restrictions contained in the Initial Agreement or Initial Agreements to which such Refinancing Agreement or Amendment relates (as determined in good faith by North American Van Lines); (4) (a) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any lease, license or other contract, (b) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of North American Van Lines or any Restricted Subsidiary not otherwise prohibited by the indenture, (c) contained in mortgages, pledges or other security agreements securing Indebtedness of a Restricted Subsidiary to the extent restricting the transfer of the property or assets subject thereto, (d) pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of North American Van Lines or any Restricted Subsidiary, (e) pursuant to Purchase Money Obligations that impose encumbrances or restrictions on the property or assets so acquired, (f) on cash or other deposits or net worth imposed by customers under agreements entered into in the ordinary course of business, (g) pursuant to customary provisions contained in agreements and instruments entered into in the ordinary course of business (including but not limited to leases and joint venture and other similar agreements entered into in the ordinary course of business) or 97 (h) that arises or is agreed to in the ordinary course of business and does not detract from the value of property or assets of North American Van Lines or any Restricted Subsidiary in any manner material to North American Van Lines or such Restricted Subsidiary; (5) with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition; (6) required by any applicable law, rule, regulation or order or by any regulatory authority having jurisdiction over North American Van Lines or any Restricted Subsidiary or any of their businesses; or (7) pursuant to an agreement or instrument (A) relating to any Indebtedness permitted to be Incurred subsequent to the Issue Date pursuant to the provisions of the covenant described under "--Limitation on Indebtedness," if North American Van Lines determines in good faith that the encumbrances and restrictions contained in the agreements and instruments relating to such Indebtedness, taken as a whole, are not materially less favorable to the holders of the notes than encumbrances and restrictions contained in the agreements and instruments referred to in clause (1) of this covenant, (B) relating to Indebtedness of a Foreign Subsidiary incurred pursuant to clause (b)(1) or (b)(10) of the covenant described under "--Limitation on Indebtedness," (C) relating to a sale of accounts receivable by a Foreign Subsidiary on customary terms (as determined in good faith by North American Van Lines) or (D) relating to Indebtedness of or a Financing Disposition to or by any Receivables Entity. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a) North American Van Lines will not, and will not permit any Restricted Subsidiary to, make any Asset Disposition unless (1) North American Van Lines or such Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the fair market value of the shares and assets subject to such Asset Disposition, as such fair market value may be determined (and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $10.0 million) in good faith by the Board of Directors, whose determination shall be conclusive (including as to the value of all noncash consideration), (2) in the case of any Asset Disposition (or series of related Asset Dispositions) at least 75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions) of assets, any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) received by North American Van Lines or such Restricted Subsidiary is in the form of (a) cash, or (b) Designated Noncash Assets having an aggregate fair market value, taken together with all other Designated Noncash Assets received in consideration for Asset Dispositions pursuant to this clause (b) that are at the time outstanding, not to exceed the greater of (x) 5% of Consolidated Tangible Assets and (y) $35.0 million at the time of receipt of such Designated Noncash Assets; and (3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by North American Van Lines (or any Restricted Subsidiary, as the case may be) as follows: (A) FIRST, either (X) to the extent North American Van Lines elects (or is required by the terms of any Senior Indebtedness or Indebtedness of a Restricted Subsidiary), to prepay, repay or purchase Senior Indebtedness or such Indebtedness of a Restricted Subsidiary (in each case 98 other than Indebtedness owed to North American Van Lines or a Restricted Subsidiary) within 365 days after the date of such Asset Disposition, or (Y) to the extent North American Van Lines or such Restricted Subsidiary elects, to reinvest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by North American Van Lines or another Restricted Subsidiary) within 365 days from the date of such Asset Disposition; (B) SECOND, to the extent of the balance of such Net Available Cash after application in accordance with clause (A) above (such balance, the "Excess Proceeds"), to make an offer to purchase notes and (to the extent North American Van Lines or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any other Senior Subordinated Indebtedness or Guarantor Senior Subordinated Indebtedness, pursuant and subject to the conditions of the indenture and the agreements governing such other Indebtedness; and (C) THIRD, to the extent of the balance of such Net Available Cash after application in accordance with clauses (A) and (B) above, to fund (to the extent consistent with any other applicable provision of the indenture) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (A)(x) or (B) above, North American Van Lines or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this covenant, North American Van Lines and the Restricted Subsidiaries shall not be required to apply any Net Available Cash in accordance with this covenant except to the extent that the aggregate Net Available Cash from all Asset Dispositions that is not applied in accordance with this covenant exceeds $15.0 million. If the aggregate principal amount of notes, Senior Subordinated Indebtedness and Guarantor Senior Subordinated Indebtedness validly tendered and not withdrawn (or otherwise subject to purchase, redemption or repayment) in connection with an offer pursuant to clause (B) above exceeds the Excess Proceeds, the Excess Proceeds will be apportioned between the notes and such Senior Subordinated Indebtedness and Guarantor Senior Subordinated Indebtedness, with the portion of the Excess Proceeds payable in respect of the notes to equal the lesser of: (x) the Excess Proceeds amount multiplied by a fraction, the numerator of which is the outstanding principal amount of the notes and the denominator of which is the sum of the outstanding principal amount of the notes and the outstanding principal amount of the relevant Senior Subordinated Indebtedness and Guarantor Senior Subordinated Indebtedness, and (y) the aggregate principal amount of notes validly tendered and not withdrawn. For the purposes of clause (2) of paragraph (a) above, the following are deemed to be cash: (1) Temporary Cash Investments and Cash Equivalents, (2) the assumption of Indebtedness of North American Van Lines (other than Disqualified Stock of North American Van Lines) or any Restricted Subsidiary and the release of North American Van Lines or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition, (3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that North American Van Lines and each other 99 Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition, (4) securities received by North American Van Lines or any Restricted Subsidiary from the transferee that are converted by North American Van Lines or such Restricted Subsidiary into cash within 180 days after the consummation of such Asset Disposition and (5) consideration consisting of outstanding Indebtedness of North American Van Lines or a Restricted Subsidiary which is then retired. (b) In the event of an Asset Disposition that requires the purchase of notes pursuant to clause (3)(B) of paragraph (a) above, North American Van Lines will be required to purchase notes tendered pursuant to an offer by North American Van Lines for the notes (the "Offer") at a purchase price of 100% of their principal amount plus accrued and unpaid interest to the Purchase Date in accordance with the procedures (including prorating in the event of oversubscription) set forth in the indenture. If the aggregate purchase price of the notes tendered pursuant to the Offer is less than the Net Available Cash allotted to the purchase of notes, the remaining Net Available Cash will be available to North American Van Lines for use in accordance with clause (3)(B) of paragraph (a) above (to repay Senior Subordinated Indebtedness or Guarantor Senior Subordinated Indebtedness) or clause (3)(C) of paragraph (a) above. North American Van Lines shall not be required to make an Offer for notes pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in clause (3)(A) of paragraph (a) above) is less than $15.0 million for any particular Asset Disposition (which lesser amounts shall be carried forward for purposes of determining whether an Offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). (c) North American Van Lines will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, North American Van Lines will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a) North American Van Lines will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of North American Van Lines (an "Affiliate Transaction") unless (1) the terms of such Affiliate Transaction are not materially less favorable to North American Van Lines or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time in a transaction with a Person who is not such an Affiliate and (2) if such Affiliate Transaction involves aggregate consideration in excess of $10.0 million, the terms of such Affiliate Transaction have been approved by a majority of the Disinterested Directors. For purposes of this paragraph, any Affiliate Transaction shall be deemed to have satisfied the requirements set forth in this paragraph if (X) such Affiliate Transaction is approved by a majority of the Disinterested Directors or (Y) in the event there are no Disinterested Directors, a fairness opinion is provided by a nationally recognized appraisal or investment banking firm with respect to such Affiliate Transaction. (b) The provisions of the preceding paragraph (a) will not apply to: (1) any Restricted Payment Transaction, (2) (A) the entering into, maintaining or performance of any employment contract, collective bargaining agreement, benefit plan, program or arrangement, related trust agreement or any 100 other similar arrangement for or with any employee, officer or director heretofore or hereafter entered into in the ordinary course of business, including vacation, health, insurance, deferred compensation, severance, retirement, savings or other similar plans, programs or arrangements, (B) the payment of compensation, performance of indemnification or contribution obligations, or any issuance, grant or award of stock, options, other equity-related interests or other securities, to employees, officers or directors in the ordinary course of business, (C) the payment of fees to directors of North American Van Lines or any of its Subsidiaries, (D) any transaction with an officer or director in the ordinary course of business not involving more than $100,000 in any one case, or (E) Management Advances and payments in respect thereof, (3) any transaction with North American Van Lines, any Restricted Subsidiary, or any Receivables Entity, (4) any transaction arising out of agreements or instruments in existence on the Issue Date, and any payments made pursuant thereto, (5) execution, delivery and performance of the Tax Sharing Agreement and Management Agreements, including (A) payment to CDR or any Affiliate of CDR of a fee of $5.0 million plus out-of-pocket expenses in connection with the Transactions, and (B) payment to CDR or any Affiliate of CDR of fees of up to $1.0 million in any fiscal year plus all out-of-pocket expenses incurred by CDR or any such Affiliate in connection with its performance of management consulting, monitoring, financial advisory or other services with respect to North American Van Lines and its Restricted Subsidiaries, (6) the Transactions, all transactions in connection therewith (including but not limited to the financing thereof), and all fees or expenses paid or payable in connection with the Transactions, (7) any transaction in the ordinary course of business on terms not materially less favorable to North American Van Lines or the relevant Restricted Subsidiary than those that could be obtained at the time in a transaction with a Person who is not an Affiliate of North American Van Lines, and (8) any transaction in the ordinary course of business, or approved by a majority of the Board of Directors, between North American Van Lines or any Restricted Subsidiary and any Affiliate of North American Van Lines controlled by North American Van Lines that is a joint venture or similar entity. LIMITATION ON LIENS. North American Van Lines shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or permit to exist any Lien (other than Permitted Liens) on any of its property or assets (including Capital Stock of any other Person), whether owned on the date of the indenture or thereafter acquired, securing any Indebtedness of North American Van Lines or any Note Guarantor that by its terms is expressly subordinated in right of payment to or ranks PARI PASSU in right of payment with the notes or such Note Guarantor's Note Guarantee (the "Initial Lien"), unless contemporaneously therewith effective provision is made to secure the Indebtedness due under the indenture and the notes or, in respect of Liens on any Restricted Subsidiary's property or assets, any Note Guarantee of such Restricted Subsidiary, equally and ratably with such obligation for so long as such obligation is so secured by such Initial Lien. Any such Lien thereby created in favor of the notes or any such Note Guarantee will be automatically and unconditionally released and discharged upon (1) the release and discharge of the Initial Lien to which it relates, or (2) any sale, exchange or transfer to any Person not an Affiliate of North American Van Lines of the property or assets secured by such Initial Lien, or of all of the Capital Stock held by North 101 American Van Lines or any Restricted Subsidiary in, or all or substantially all the assets of, any Restricted Subsidiary creating such Lien. FUTURE NOTE GUARANTORS. After the Issue Date, North American Van Lines will cause each Domestic Subsidiary that guarantees payment by North American Van Lines of Bank Indebtedness of North American Van Lines to execute and deliver to the trustee a supplemental indenture or other instrument pursuant to which such Subsidiary will guarantee payment of the notes, whereupon such Subsidiary will become a Note Guarantor for all purposes under the indenture. In addition, North American Van Lines may cause any Subsidiary that is not a Note Guarantor so to guarantee payment of the notes and become a Note Guarantor. Each Note Guarantor, as primary obligor and not merely as surety, will jointly and severally, irrevocably and fully and unconditionally Guarantee, on a senior subordinated basis, the punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all monetary obligations of North American Van Lines under the indenture and the notes, whether for principal of or interest on the notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Note Guarantors being herein called the "Guaranteed Obligations"). Such Note Guarantor will agree to pay, in addition to the amount stated above, any and all reasonable out-of-pocket expenses (including reasonable counsel fees and expenses) incurred by the trustee or the holders in enforcing any rights under its Note Guarantee. The obligations of each Note Guarantor will be limited to the maximum amount, as will, after giving effect to all other contingent and fixed liabilities of such Note Guarantor, result in the obligations of such Note Guarantor under the Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law, or being void or unenforceable under any applicable law, including any law relating to insolvency of debtors. Each such Note Guarantee shall be a continuing Guarantee and shall: (1) remain in full force and effect until payment in full of the principal amount of all outstanding notes (whether by payment at maturity, purchase, redemption, defeasance, retirement or other acquisition) and all other Guaranteed Obligations then due and owing, unless earlier terminated as described below, (2) be binding upon such Note Guarantor and (3) inure to the benefit of and be enforceable by the trustee, the holders and their permitted successors, transferees and assigns. Notwithstanding the preceding paragraph, any Note Guarantor will automatically and unconditionally be released from all obligations under its Note Guarantee, and such Note Guarantee shall thereupon terminate and be discharged and of no further force or effect, (1) concurrently with any sale or disposition (by merger or otherwise) of any Note Guarantor or any interest therein in accordance with the terms of the indenture (including the covenant described under "--Certain Covenants--Limitation on Sales of Assets and Subsidiary Stock") by North American Van Lines or a Restricted Subsidiary, following which such Note Guarantor is no longer a Restricted Subsidiary of North American Van Lines, (2) pursuant to the terms of its Note Guarantee, (3) at any time that such Note Guarantor is released from all of its obligations under all of its Guarantees of payment by North American Van Lines of Bank Indebtedness of North American Van Lines, (4) upon the merger or consolidation of any Note Guarantor with and into North American Van Lines or another Note Guarantor that is the surviving Person in such merger or consolidation, 102 (5) upon legal or covenant defeasance of North American Van Lines' obligations, or satisfaction and discharge of the indenture, or (6) subject to customary contingent reinstatement provisions, upon payment in full of the aggregate principal amount of all notes then outstanding and all other Guaranteed Obligations then due and owing. In addition, North American Van Lines will have the right, upon 30 days' notice to the trustee, to cause any Note Guarantor that has not guaranteed payment by North American Van Lines of any Bank Indebtedness of North American Van Lines to be unconditionally released from all obligations under its Note Guarantee, and such Note Guarantee shall thereupon terminate and be discharged and of no further force or effect. Upon any such occurrence specified in this paragraph, the trustee shall execute any documents reasonably required in order to evidence such release, discharge and termination in respect of such Note Guarantee. Neither North American Van Lines nor any such Note Guarantor shall be required to make a notation on the notes to reflect any such Guarantee or any such release, termination or discharge. SEC REPORTS. Notwithstanding that North American Van Lines may not be required to be or remain subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, North American Van Lines will file with the SEC (unless such filing is not permitted under the Exchange Act or by the SEC), so long as notes are outstanding, the annual reports, information, documents and other reports that North American Van Lines is required to file with the Commission pursuant to such Section 13(a) or 15(d) or would be so required to file if North American Van Lines were so subject. North American Van Lines will also, within 15 days after the date on which North American Van Lines was so required to file or would be so required to file if North American Van Lines were so subject (or, if later, 120 days after the Issue Date), transmit by mail to all holders, as their names and addresses appear in the Note Register, and to the trustee copies of any such information, documents and reports (without exhibits) so required to be filed (or, in lieu of one or more of the annual reports for the fiscal year ended December 25, 1999 and the quarterly reports for the following fiscal year, a registration statement filed with the SEC under the Securities Act or any amendment thereto, provided such registration statement or amendment contains the information that would have been included in each such report). North American Van Lines will be deemed to have satisfied such requirements if Holding files and provides reports, documents and information of the types otherwise so required, in each case within the applicable time periods, and North American Van Lines is not required to file such reports, documents and information separately under the applicable rules and regulations of the SEC (after giving effect to any exemptive relief) because of the filings by Holding. North American Van Lines also will comply with the other provisions of TIA Section 314(a). MERGER AND CONSOLIDATION North American Van Lines will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless: (1) the resulting, surviving or transferee Person (the "Successor Company") will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not North American Van Lines) will expressly assume all the obligations of North American Van Lines under the notes and the indenture by executing and delivering to the trustee a supplemental indenture or one or more other documents or instruments in form reasonably satisfactory to the trustee; (2) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default will have occurred and be continuing; 103 (3) immediately after giving effect to such transaction, the Successor Company could Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of the covenant described under "--Certain Covenants--Limitation on Indebtedness"; (4) each Note Guarantor (other than any party to any such consolidation or merger) shall have delivered a supplemental indenture or other document or instrument in form reasonably satisfactory to the trustee, confirming its Note Guarantee; and (5) North American Van Lines will have delivered to the trustee an Officer's Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger or transfer complies with the provisions described in this paragraph, provided that (x) in giving such opinion such counsel may rely on an Officer's Certificate as to compliance with the foregoing clauses (2) and (3) and as to any matters of fact, and (y) no Opinion of Counsel will be required for a consolidation, merger or transfer described in the last paragraph of this covenant. Any Indebtedness that becomes an obligation of North American Van Lines or any Restricted Subsidiary (or that is deemed to be Incurred by any Restricted Subsidiary that becomes a Restricted Subsidiary) as a result of any such transaction undertaken in compliance with this covenant, and any Refinancing Indebtedness with respect thereto, shall be deemed to have been Incurred in compliance with the covenant described under "--Certain Covenants--Limitation on Indebtedness." The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, North American Van Lines under the indenture, and thereafter the predecessor Company shall be relieved of all obligations and covenants under the indenture. Clauses (2) and (3) of the first paragraph of this "Merger and Consolidation" section will not apply to any transaction in which (a) any Restricted Subsidiary consolidates with, merges into or transfers all or part of its assets to North American Van Lines or (b) North American Van Lines consolidates or merges with or into or transfers all or substantially all its properties and assets to (X) an Affiliate incorporated or organized for the purpose of reincorporating or reorganizing North American Van Lines in another jurisdiction or changing its legal structure to a corporation or other entity or (Y) a Restricted Subsidiary of North American Van Lines so long as all assets of North American Van Lines and the Restricted Subsidiaries immediately prior to such transaction (other than Capital Stock of such Restricted Subsidiary) are owned by such Restricted Subsidiary and its Restricted Subsidiaries immediately after the consummation thereof. DEFAULTS An Event of Default is defined in the indenture as: (1) a default in any payment of interest on any note when due, continued for 30 days, (2) a default in the payment of principal of any note when due, whether at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, whether or not such payment is prohibited by the provisions described under "--Ranking" above, (3) the failure by North American Van Lines to comply for 30 days after notice with its obligations under the covenant described under "--Merger and Consolidation" above, (4) the failure by North American Van Lines to comply for 30 days after notice with any of its obligations under the covenant described under "--Change of Control" above (other than a failure to purchase notes), 104 (5) the failure by North American Van Lines to comply for 60 days after notice with its other agreements contained in the notes or the indenture, (6) the failure by any Note Guarantor to comply for 45 days after notice with its obligations under its Note Guarantee, (7) the failure by North American Van Lines or any Significant Subsidiary to pay any Indebtedness within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, if the total amount of such Indebtedness so unpaid or accelerated exceeds $15.0 million or its foreign currency equivalent (the "cross acceleration provision"), (8) certain events of bankruptcy, insolvency or reorganization of North American Van Lines or a Significant Subsidiary (the "bankruptcy provisions"), (9) the rendering of any judgment or decree for the payment of money in an amount (net of any insurance or indemnity payments actually received in respect thereof prior to or within 90 days from the entry thereof, or to be received in respect thereof in the event any appeal thereof shall be unsuccessful) in excess of $15.0 million or its foreign currency equivalent against North American Van Lines or a Significant Subsidiary that is not discharged, or bonded or insured by a third Person, if such judgment or decree remains outstanding for a period of 90 days following such judgment or decree and is not discharged, waived or stayed (the "judgment default provision"), (10) the failure of any Note Guarantee by a Note Guarantor that is a Significant Subsidiary to be in full force and effect (except as contemplated by the terms thereof or of the indenture) or the denial or disaffirmation in writing by any Note Guarantor that is a Significant Subsidiary of its obligations under its Note Guarantee, if such Default continues for 10 days, or (11) the failure of Holding to consummate the Holding Stock Issuance on or before December 31, 1999. The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. However, a Default under clause (3), (4), (5) or (6) will not constitute an Event of Default until the trustee or the holders of at least 25% in principal amount of the outstanding notes notify North American Van Lines of the Default and North American Van Lines does not cure such Default within the time specified in such clause after receipt of such notice. If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of North American Van Lines) occurs and is continuing, the trustee by notice to North American Van Lines, or the holders of at least a majority in principal amount of the outstanding notes by notice to North American Van Lines and the trustee, may declare the principal of and accrued but unpaid interest on all the notes to be due and payable, provided that so long as any Bank Indebtedness shall be outstanding, such acceleration shall not be effective until the earlier to occur of: (x) five Business Days following delivery of a written notice of such acceleration of the notes to North American Van Lines and the holders of all Bank Indebtedness or each Representative thereof and (y) the acceleration of any Bank Indebtedness. Upon the effectiveness of such a declaration, such principal and interest will be due and payable immediately. Notwithstanding the foregoing, if an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of North American Van Lines occurs and is continuing, the principal of and accrued interest on all the notes will become immediately due and payable without any declaration or other act on 105 the part of the trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of the outstanding notes may rescind any such acceleration with respect to the notes and its consequences. Notwithstanding the foregoing, in the event of a declaration of acceleration in respect of the notes because an Event of Default specified in clause (7) above shall have occurred and be continuing, such declaration of acceleration of the notes and such Event of Default and all consequences thereof (including without limitation any acceleration or resulting payment default) shall be annulled, waived and rescinded, automatically and without any action by the trustee or the holders, and be of no further effect, if within 60 days after such Event of Default arose (x) the Indebtedness that is the basis for such Event of Default has been discharged, or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default, or (z) the default in respect of such Indebtedness that is the basis for such Event of Default has been cured. Subject to the provisions of the indenture relating to the duties of the trustee, in case an Event of Default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders unless such holders have offered to the trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal or interest when due, no holder may pursue any remedy with respect to the indenture or the notes unless (a) such holder has previously given the trustee written notice that an Event of Default is continuing, (b) holders of at least 25% in principal amount of the outstanding notes have requested the trustee in writing to pursue the remedy, (c) such holders have offered the trustee reasonable security or indemnity against any loss, liability or expense, (d) the trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (e) the holders of a majority in principal amount of the outstanding notes have not given the trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of the outstanding notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or of exercising any trust or power conferred on the trustee. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the trustee determines is unduly prejudicial to the rights of any other holder or that would involve the trustee in personal liability. Prior to taking any action under the indenture, the trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. The indenture provides that if a Default occurs and is continuing and is known to the trustee, the trustee must mail to each holder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of, or premium (if any) or interest on, any note, the trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the noteholders. In addition, North American Van Lines is required to deliver to the trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. North American Van Lines also is required to deliver to the trustee, within 30 days after the occurrence thereof, written notice of any 106 event that would constitute certain Defaults, their status and what action North American Van Lines is taking or proposes to take in respect thereof. AMENDMENTS AND WAIVERS Subject to certain exceptions, the indenture may be amended with the consent of the holders of a majority in principal amount of the notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the notes then outstanding (including in each case, consents obtained in connection with a tender offer or exchange offer for notes). However, without the consent of each holder of an outstanding note affected, no amendment or waiver may (1) reduce the principal amount of notes whose holders must consent to an amendment or waiver, (2) reduce the rate of or extend the time for payment of interest on any note, (3) reduce the principal of or extend the Stated Maturity of any note, (4) reduce the premium payable upon the redemption of any note or change the date on which any note may be redeemed as described under "Optional Redemption" above, (5) make any note payable in money other than that stated in the note, (6) make any change to the subordination provisions of the indenture that adversely affects the rights of any holder in any material respect, (7) impair the right of any holder to receive payment of principal of and interest on such holder's notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's notes or (8) make any change in the amendment or waiver provisions described in this sentence. Without the consent of any holder, North American Van Lines, the trustee and (as applicable) any Note Guarantor may amend the indenture to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor of the obligations of North American Van Lines under the indenture, to provide for uncertificated notes in addition to or in place of certificated notes, to add Guarantees with respect to the notes, to secure the notes, to confirm and evidence the release, termination or discharge of any Guarantee or Lien with respect to or securing the notes when such release, termination or discharge is provided for under the indenture, to add to the covenants of North American Van Lines for the benefit of the noteholders or to surrender any right or power conferred upon North American Van Lines, to provide that any Indebtedness that becomes or will become an obligation of the Successor Company or a Note Guarantor pursuant to a transaction governed by the provisions described under "--Merger and Consolidation" (and that is not a Subordinated Obligation) is Senior Subordinated Indebtedness or Guarantor Senior Subordinated Indebtedness for purposes of the indenture, to provide for or confirm the issuance of Additional Notes, to make any change that does not adversely affect the rights of any holder, or to comply with any requirement of the SEC in connection with the qualification of the indenture under the TIA or otherwise. However, no amendment may be made to the subordination provisions of the indenture that adversely affects the rights of any holder of Senior Indebtedness then outstanding (which Senior Indebtedness has been previously designated in writing by North American Van Lines to the trustee for this purpose) unless the holders of such Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change. The consent of the noteholders is not necessary under the indenture to approve the particular form of any proposed amendment or waiver. It is sufficient if such consent approves the substance of the proposed 107 amendment or waiver. Until an amendment or waiver becomes effective, a consent to it by a noteholder is a continuing consent by such noteholder and every subsequent holder of all or part of the related note. Any such noteholder or subsequent holder may revoke such consent as to its note by written notice to the trustee or North American Van Lines, received thereby before the date on which North American Van Lines certifies to the trustee that the holders of the requisite principal amount of notes have consented to such amendment or waiver. After an amendment or waiver under the indenture becomes effective, North American Van Lines is required to mail to noteholders a notice briefly describing such amendment or waiver. However, the failure to give such notice to all noteholders, or any defect therein, will not impair or affect the validity of the amendment or waiver. DEFEASANCE North American Van Lines at any time may terminate all its obligations under the notes and the indenture ("legal defeasance"), except for certain obligations, including those relating to the defeasance trust and obligations to register the transfer or exchange of the notes, to replace mutilated, destroyed, lost or stolen notes and to maintain a registrar and paying agent in respect of the notes. North American Van Lines at any time may terminate its obligations under certain covenants under the indenture, including the covenants described under "--Certain Covenants" and "--Change of Control," the operation of the default provisions relating to such covenants described under "--Defaults" above, the operation of the cross acceleration provision, the bankruptcy provisions with respect to Subsidiaries and the judgment default provision described under "--Defaults" above, and the limitations contained in clauses (3), (4) and (5) under "--Merger and Consolidation" above ("covenant defeasance"). If North American Van Lines exercises its legal defeasance option or its covenant defeasance option, each Note Guarantor will be released from all of its obligations with respect to its Note Guarantee. North American Van Lines may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If North American Van Lines exercises its legal defeasance option, payment of the notes may not be accelerated because of an Event of Default with respect thereto. If North American Van Lines exercises its covenant defeasance option, payment of the notes may not be accelerated because of an Event of Default specified in clause (4), (5) (as it relates to the covenants described under "--Certain Covenants" above), (6), (7), (8) (but only with respect to events of bankruptcy, insolvency or reorganization of a Significant Subsidiary), (9) or (10) under "Defaults" above or because of the failure of North American Van Lines to comply with clause (3), (4) or (5) under "--Merger and Consolidation" above. Either defeasance option may be exercised to any redemption date or to the maturity date for the notes. In order to exercise either defeasance option, North American Van Lines must irrevocably deposit in trust (the "defeasance trust") with the trustee money or U.S. Government Obligations, or a combination thereof, for the payment of principal of, and premium (if any) and interest on, the notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the trustee of an Opinion of Counsel to the effect that holders of the notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law since the Issue Date). SATISFACTION AND DISCHARGE The indenture will be discharged and cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the notes, as expressly provided for in the indenture) as to all outstanding notes when 108 (1) either (a) all the notes previously authenticated and delivered (other than certain lost, stolen or destroyed notes, and certain notes for which provision for payment was previously made and thereafter the funds have been released to North American Van Lines) have been delivered to the trustee for cancellation or (b) all notes previously delivered to the trustee for cancellation (X) have become due and payable, (Y) will become due and payable at their Stated Maturity within one year or (Z) are to be called for redemption within one year under arrangements reasonably satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of North American Van Lines; (2) North American Van Lines has irrevocably deposited or caused to be deposited with the trustee money, U.S. Government Obligations, or a combination thereof, sufficient to pay and discharge the entire indebtedness on the notes not previously delivered to the trustee for cancellation, for principal, premium, if any, and interest to the date of deposit (in the case of notes that have become due and payable) or to the Stated Maturity or redemption date, as the case may be; (3) North American Van Lines has paid or caused to be paid all other sums payable under the indenture by North American Van Lines; and (4) North American Van Lines has delivered to the trustee an Officer's Certificate and an Opinion of Counsel each to the effect that all conditions precedent under the "Satisfaction and Discharge" section of the indenture relating to the satisfaction and discharge of the indenture have been complied with, provided that any such counsel may rely on any Officer's Certificate as to matters of fact (including as to compliance with the foregoing clauses (1), (2) and (3)). NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, INCORPORATORS AND STOCKHOLDERS No director, officer, employee, incorporator, member or stockholder, as such, of North American Van Lines, Holding, any Note Guarantor or any Subsidiary of any thereof shall have any liability for any obligation of North American Van Lines, Holding or any Note Guarantor under the indenture, the notes or any Note Guarantee, or for any claim based on, in respect of, or by reason of, any such obligation or its creation. Each noteholder, by accepting the notes, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. CONCERNING THE TRUSTEE State Street Bank and Trust Company is the trustee under the indenture and has been appointed by North American Van Lines as Registrar and Paying Agent with regard to the notes. The indenture will provide that, except during the continuance of an Event of Default, the trustee will perform only such duties as are set forth specifically in the indenture. During the existence of an Event of Default, the trustee will exercise such of the rights and powers vested in it under the indenture and use the same degree of care and skill in their exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. The indenture and the TIA will impose certain limitations on the rights of the trustee, should it become a creditor of North American Van Lines, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The trustee is permitted to engage in other transactions; provided, that if it acquires any conflicting interest as described in the TIA, it must eliminate such conflict, apply to the SEC for permission to continue as trustee with such conflict, or resign. 109 GOVERNING LAW The indenture provides that it and the notes will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any principles of conflict of laws to the extent that the application of the law of another jurisdiction would be required thereby. BOOK-ENTRY, DELIVERY AND FORM The notes will be represented by one or more notes in registered, global form deposited with the trustee as custodian for the Depository Trust Company ("DTC") and registered in the name of Cede & Co. as nominee of DTC, in each case for credit to the accounts of DTC participants and indirect participants (each as described below) including, without limitation, Morgan Guaranty Trust Company of New York, Brussels office, as operator (the "Euroclear Operator") of the Euroclear System and Cedelbank. Except in the limited circumstances set forth below, notes in certificated form will not be issued. DEPOSITARY PROCEDURES DTC has advised North American Van Lines as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a "banking organization" within the meaning of New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for persons who have accounts with it ("DTC participants") and to facilitate the clearance and settlement of securities transactions between DTC participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. DTC participants include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly ("indirect participants"). DTC has advised North American Van Lines that pursuant to procedures established by it, (1) upon initial deposit of a global note, DTC will credit the accounts of DTC participants with portions of the principal amount of such global note deposited, (2) for DTC participants, initial ownership of interests in such global note will be shown on, and the transfer of ownership thereof will be effected through, records maintained by DTC and (3) for non-DTC participant owners, ownership interests in such global note will only be shown on, and the transfer of ownership thereof will only be effected through, the records of the DTC participants, including Euroclear and Cedelbank, or others through which they hold their account. All interests in a global note deposited with DTC, including those held through Euroclear and Cedelbank, are subject to the procedures and requirements of DTC. Those interests held through Euroclear are also subject to the procedures and requirements of such system. Except as described below, owners of interests in any global note will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or holders of notes for any purpose. So long as DTC (or its nominee) is the registered owner or holder of a global note, such party will be considered the sole owner or holder of the notes represented by such global note for all purposes under the indenture and the notes. Accordingly, each person owning a beneficial interest in a global note must rely on the procedures of DTC and its participants to exercise any rights and remedies of a holder of notes under the indenture. Payments of 110 principal and interest on any global note will be made to DTC or its nominee as the registered owners thereof. The laws of some countries and some states in the United States require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a global note to such persons may be limited to that extent. Because DTC can act only on behalf of its participants, the ability of a person having beneficial interests in a global note to pledge such interests to persons or entities that do not participate in the relevant clearing system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. PAYMENTS ON THE GLOBAL NOTES Payments in respect of the principal of, and premium, if any, and interest on a global note will be made through a payment agent appointed pursuant to the indenture and will be payable to DTC (or its nominee) in its capacity as the registered holder of such notes under the indenture. Under the terms of the indenture, the Issuer and the trustee will treat the persons in whose names the notes, including the global notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, none of North American Van Lines, the trustee, or any agent of North American Van Lines or the trustee has or will have any responsibility or liability for (1) any aspect or accuracy of the records of the relevant clearing system, the participants therein or the account holders thereof, as the case may be, relating to payments made on account of beneficial ownership interests in the global notes, or for maintaining, supervising or reviewing any records of such clearing system, participant or account holder relating to beneficial ownership interests in the global notes, or (2) any other matter relating to the actions and practices of the relevant clearing system or the participants therein or the account holders thereof. North American Van Lines understands that DTC, upon receipt of any such payment, will immediately credit the accounts of its relevant participants with payments in amounts proportionate to their respective holdings in principal amount of beneficial interests in the relevant global note, as shown on the records of DTC. North American Van Lines expects that payments by such participants to the beneficial owners of global notes will be governed by standing instructions and customary practices and will be the responsibility of such participants. Neither North American Van Lines nor the trustee will have responsibility or liability for the payment of amounts owing in respect of beneficial interests in the global notes held by DTC. TRANSFERS OF GLOBAL SECURITIES AND INTERESTS THEREIN Unless definitive securities are issued, a global note may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Transfers of beneficial interests in the global notes will be subject to the applicable rules and procedures of DTC and its direct and indirect participants (including, if applicable, those of Euroclear and Cedelbank), which are subject to change from time to time. Any secondary market trading activity in beneficial interests in the global notes is expected to occur through the participants of DTC, and the securities custody accounts of investors are expected to be credited with their holdings against payment in same-day funds on the settlement date. No service charge will be made for any registration of transfer or exchange of notes, but the trustee or North American Van Lines may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Although DTC has agreed to certain procedures to facilitate transfers of interests in the global notes among participants in DTC, it is under no obligation to perform or to continue to perform such 111 procedures, and such procedures may be discontinued at any time. None of North American Van Lines, the trustee, nor any agent of North American Van Lines or the trustee will have any responsibility for the nonperformance or misperformance (as a result of insolvency, mistake, misconduct or otherwise) by DTC, or its participants or indirect participants, of their respective obligations under the rules and procedures governing their operations. North American Van Lines understands that under existing industry practices, if either North American Van Lines or the trustee requests any action of holders of notes, or if an owner of a beneficial interest in a global note desires to give instructions or take an action that a holder is entitled to give or take under the indenture, DTC would authorize its participants owning the relevant beneficial interest to give such instructions or take such action, and such participants would authorize indirect participants to give such instructions or take such action, or would otherwise act upon the instructions of such indirect participants. North American Van Lines understands that under existing practices of DTC, if less than all of the respective class of notes are to be redeemed at any time, DTC will credit its participants' accounts on a proportionate basis (with adjustments to prevent fractions) or by lot or on such other basis as DTC deems fair and appropriate, provided that no beneficial interests of less than $1,000 may be redeemed in part. CERTIFICATED NOTES Beneficial interests in a global note are exchangeable for definitive notes in registered certificated form only if (1) DTC (a) notifies North American Van Lines that it is unwilling or unable to continue as depositary for such global note or (b) has ceased to be a "clearing agency" registered under the Exchange Act and, in each case, North American Van Lines thereupon is unable to locate a qualified successor depositary within 90 days; (2) North American Van Lines, at its option, notifies the trustee in writing that it elects to cause the issuance of notes in definitive form under the indenture; or (3) upon the occurrence of certain other events. In all cases, certificated notes delivered in exchange for any global note or beneficial interest therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of DTC in accordance with its customary procedures. The notes may not be issued in bearer form. In the case of the issuance of certificated notes in the limited circumstances set forth above, the holder of any such certificated note may transfer such note by surrendering it at the offices or agencies of North American Van Lines maintained for such purpose within the City and State of New York. Until otherwise designated by North American Van Lines, North American Van Lines' office or agency in the City and State of New York will be the office of an affiliate of the trustee maintained for such purpose. In the event of a partial transfer of a holding of notes represented by one certificate, or partial redemption of such a holding represented by one certificate, a new certificate shall be issued to the transferee in respect of the part transferred or redeemed and a further new certificate in respect of the balance of the holding not transferred or redeemed shall be issued to the transferor, provided that no certificate in denominations less than $1,000 shall be issued. North American Van Lines shall not be required to register the transfer or exchange of certificated notes for a period of 15 days preceding (a) the due date for any payment of principal of or interest on the notes or (b) a selection of notes to be redeemed. Also, North American Van Lines is not required to register the transfer or exchange of any notes selected for redemption. In the event of the transfer of any certificated note, the trustee may require a holder, among other things, to furnish appropriate 112 endorsements and transfer documents, and North American Van Lines may require a holder to pay any taxes and fees required by law and permitted by the indenture and the notes. If certificated notes are issued and a holder of a certificated note claims that the note has been lost, destroyed or wrongfully taken or if such note is mutilated and is surrendered to the trustee, North American Van Lines shall issue and the trustee shall authenticate a replacement note if the trustee's and North American Van Lines' requirements are met. If required by the trustee or North American Van Lines, an indemnity bond sufficient in the judgment of both to protect North American Van Lines, the trustee and any paying agent or authenticating agent appointed pursuant to the indenture from any loss which any of them may suffer if a note is replaced must be posted. North American Van Lines may charge for its expenses in replacing a note. In case any such mutilated, destroyed, lost or stolen note has become or is about to become due and payable, or is about to be redeemed or purchased by North American Van Lines pursuant to the provisions of the indenture, North American Van Lines in its discretion may, instead of issuing a new note, pay, redeem or purchase such note, as the case may be. REGISTRATION RIGHTS The following summary of certain provisions of the registration rights agreement does not contain all of the information that may be important to an investor in the notes. It is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement. A copy of the registration rights agreement is available as set forth under the heading "Where You Can Find More Information." Pursuant to the registration rights agreement, North American Van Lines has agreed to use its commercially reasonable best efforts to file a registration statement for this exchange offer and to use all commercially reasonable efforts to cause it to become effective. The registration statement of which this prospectus is a part constitutes the registration statement to be filed pursuant to the registration rights agreement. If, as a result of a change in law or interpretations of the staff of the SEC North American Van Lines is not permitted to effect the exchange offer, or if any holder of the notes (other than the initial purchasers, an affiliate of North American Van Lines or a noteholder that cannot make required representations) is not permitted by applicable law to participate in, or to receive the benefit of, the exchange offer, North American Van Lines will use its reasonable best efforts to file a shelf registration statement with respect to resales of old notes or new notes, as the case may be, and to cause the shelf registration statement to be declared effective under the Securities Act within 270 days after the Issue Date. After such shelf registration statement is declared effective, North American Van Lines will use its reasonable best efforts to keep the shelf registration statement in effect until the earlier of two years from the Issue Date (or one year in the case of a shelf registration effected at the request of the initial purchasers) or such shorter period that will terminate when all the old notes or new notes covered by the shelf registration statement (1) have been sold pursuant thereto or (2) are distributed to the public pursuant to Rule 144 or become eligible for resale pursuant to Rule 144 without volume restriction, if any. Under certain circumstances, North American Van Lines may suspend the availability of the shelf registration statement for certain periods of time. North American Van Lines will, in the event a shelf registration statement is filed, among other things, provide to each holder for whom such shelf registration statement was filed copies of the prospectus that is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the old notes or the new notes, as the case may be. A holder of notes selling such notes pursuant to the shelf registration statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by certain provisions of 113 the registration rights agreement (including certain indemnification obligations). In addition, each such holder of notes will be required, among other things, to deliver information to be used in connection with the shelf registration statement within the time periods set forth in the registration rights agreement in order to benefit from the provisions regarding additional interest set forth in the following paragraph. If the exchange offer is not consummated on or before the 240th day after the original issue date of the old notes or, if a shelf registration statement is required to be filed, such shelf registration statement is not declared effective by the SEC with respect to the old notes on or before the 270th day after the original issue date of the old notes, the interest rate borne for such old notes will be increased by 0.25% per annum. This additional interest will increase by 0.25% per annum every twelve weeks thereafter, but will not exceed 0.50% per annum in the aggregate in any event. This additional interest will accrue until the exchange offer is consummated or the shelf registration statement is declared effective. CERTAIN DEFINITIONS "Acquired Debt" means Indebtedness of any Person that is assumed by North American Van Lines or any Restricted Subsidiary in connection with its acquisition of assets from such Person or any Affiliate thereof or is issued and outstanding on or prior to the date on which such Person was acquired by North American Van Lines or any Restricted Subsidiary or merged or consolidated with or into North American Van Lines or any Restricted Subsidiary (other than Indebtedness Incurred to finance, or otherwise in connection with or in contemplation of, such acquisition). "Additional Assets" means (1) any property or assets that replace the property or assets that are the subject of an Asset Disposition; (2) any property or assets (other than Indebtedness and Capital Stock) to be used by North American Van Lines or a Restricted Subsidiary in a Related Business; (3) the Capital Stock of a Person that is engaged in a Related Business and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by North American Van Lines or another Restricted Subsidiary; or (4) Capital Stock of any Person that at such time is a Restricted Subsidiary, acquired from a third party. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any moving or storage company or contractor, or other Person, that provides sales, packing, warehousing, hauling or other services in connection with the ordinary course of business or operations of North American Van Lines or any of its Subsidiaries, or any Affiliate of any such Agent. "Agent Guarantee" means any Guarantee by North American Van Lines or any Restricted Subsidiary of Indebtedness or other obligations of any Agent, entered into in accordance with the indenture. "all or substantially all" has the meaning given to such phrase in the Revised Model Business Corporation Act and commentary thereto. "Allied Acquisition" means the acquisition of Capital Stock and/or assets of certain Subsidiaries of NFC plc engaged in moving services businesses pursuant to the Acquisition Agreement dated as of September 14, 1999 between Holding and NFC plc, and the other transactions contemplated thereby. 114 "Asset Disposition" means any sale, lease, transfer or other disposition of shares of Capital Stock of a Restricted Subsidiary (other than directors' qualifying shares, or (in the case of a Foreign Subsidiary) to the extent required by applicable law), property or other assets (each referred to for the purposes of this definition as a "disposition") by North American Van Lines or any of its Restricted Subsidiaries (including any disposition by means of a merger, consolidation or similar transaction), other than (1) a disposition to North American Van Lines or a Restricted Subsidiary, (2) a disposition in the ordinary course of business, (3) the sale or discount (with or without recourse, and on customary or commercially reasonable terms) of accounts receivable or notes receivable arising in the ordinary course of business, or the conversion or exchange of accounts receivable for notes receivable, (4) any Restricted Payment Transaction, (5) a disposition that is governed by the provisions described under "--Merger and Consolidation," (6) any Financing Disposition, (7) any "fee in lieu" or other disposition of assets to any governmental authority or agency that continue in use by North American Van Lines or any Restricted Subsidiary, so long as North American Van Lines or any Restricted Subsidiary may obtain title to such assets upon reasonable notice by paying a nominal fee, (8) any exchange of like property pursuant to Section 1031 (or any successor section) of the Code, (9) any financing transaction with respect to property built or acquired by North American Van Lines or any Restricted Subsidiary after the Issue Date, including without limitation any sale/ leaseback transaction or asset securitization, (10) any disposition arising from foreclosure, condemnation or similar action with respect to any property or other assets, (11) any disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary, (12) a disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than North American Van Lines or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), entered into in connection with such acquisition, (13) a disposition of not more than 5% of the outstanding Capital Stock of a Foreign Subsidiary to one or more members of the management of such Foreign Subsidiary that has been approved by the Board of Directors, or (14) any disposition or series of related dispositions for aggregate consideration not to exceed $2.5 million. "Average Life" means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by 115 (2) the sum of all such payments. "Bank Indebtedness" means any and all amounts, whether outstanding on the Issue Date or thereafter incurred, payable under or in respect of the Senior Credit Facility, including without limitation principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to North American Van Lines or any Restricted Subsidiary whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees, other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof. "Board of Directors" means the board of directors or other governing body of North American Van Lines or, if North American Van Lines is owned or managed by a single entity, the board of directors or other governing body of such entity, or, in either case, any committee thereof duly authorized to act on behalf of such board or governing body. "Borrowing Base" means 85% of accounts receivables of North American Van Lines and its Restricted Subsidiaries (determined in accordance with GAAP as of the end of the most recently ended fiscal quarter for which consolidated financial statements of North American Van Lines are available). "Business Day" means a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in New York City. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligation" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP. The Stated Maturity of any Capitalized Lease Obligation shall be the date of the last payment of rent or any other amount due under the related lease. "Cash Equivalents" means any of the following: (a) securities issued or fully guaranteed or insured by the United States Government or any agency or instrumentality thereof, (b) time deposits, certificates of deposit or bankers' acceptances of (1) any lender under the Senior Credit Agreement or (2) any commercial bank having capital and surplus in excess of $500,000,000 and the commercial paper of the holding company of which is rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency), (c) commercial paper rated at least A-l or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's (or if at such time neither is issuing ratings, then a comparable rating of another nationally recognized rating agency) and (d) investments in money market funds complying with the risk limiting conditions of Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of 1940, as amended. "CDR" means Clayton, Dubilier & Rice, Inc. "CDR Fund V" means Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership, and any successor in interest thereto. "Code" means the Internal Revenue Code of 1986, as amended. "Company" means North American Van Lines, Inc., a Delaware corporation, and any successor in interest thereto. 116 "Consolidated Coverage Ratio" as of any date of determination means the ratio of (x) the aggregate amount of Consolidated EBITDA of North American Van Lines and its Restricted Subsidiaries for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of North American Van Lines are available to (y) Consolidated Interest Expense for such four fiscal quarters (in each case, determined, for each fiscal quarter (or portion thereof) of the four fiscal quarters ending prior to the Issue Date, on a pro forma basis to give effect to the Allied Acquisition as if it had occurred at the beginning of such four-quarter period); provided, that (1) if since the beginning of such period North American Van Lines or any Restricted Subsidiary has Incurred any Indebtedness that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation shall be computed based on (A) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (B) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation), (2) if since the beginning of such period North American Van Lines or any Restricted Subsidiary has repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged any Indebtedness (each, a "Discharge") or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such Discharge had occurred on the first day of such period, (3) if since the beginning of such period North American Van Lines or any Restricted Subsidiary shall have disposed of any company, any business or any group of assets constituting an operating unit of a business (any such disposition, a "Sale"), the Consolidated EBITDA for such period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets that are the subject of such Sale for such period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to (A) the Consolidated Interest Expense attributable to any Indebtedness of North American Van Lines or any Restricted Subsidiary repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged with respect to North American Van Lines and its continuing Restricted Subsidiaries in connection with such Sale for such period (including but not limited to through the assumption of such Indebtedness by another Person) plus (B) if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period attributable to the Indebtedness of such Restricted Subsidiary to the extent North American Van Lines and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such Sale, (4) if since the beginning of such period North American Van Lines or any Restricted Subsidiary (by merger, consolidation or otherwise) shall have made an Investment in any Person that thereby becomes a Restricted Subsidiary, or otherwise acquired any company, any business or any group of 117 assets constituting an operating unit of a business, including any such Investment or acquisition occurring in connection with a transaction causing a calculation to be made hereunder (any such Investment or acquisition, a "Purchase"), Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any related Indebtedness) as if such Purchase occurred on the first day of such period, and (5) if since the beginning of such period any Person became a Restricted Subsidiary or was merged or consolidated with or into North American Van Lines or any Restricted Subsidiary, and since the beginning of such period such Person shall have Discharged any Indebtedness or made any Sale or Purchase that would have required an adjustment pursuant to clause (2), (3) or (4) above if made by North American Van Lines or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Discharge, Sale or Purchase occurred on the first day of such period. For purposes of this definition, whenever pro forma effect is to be given to any Sale, Purchase or other transaction, or the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred or repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged in connection therewith, the pro forma calculations in respect thereof may include anticipated cost savings relating to any such Sale, Purchase or other transaction that North American Van Lines reasonably believes in good faith could have been achieved during the relevant four quarter period as a result of such Sale, Purchase or other transaction (PROVIDED that both (1) such cost savings were identified and quantified in an Officer's Certificate delivered to the trustee at the time of the consummation of such transaction and (2) with respect to each such transaction completed prior to the 90th day preceding the relevant date of determination, actions were commenced or initiated by North American Van Lines within 90 days of the consummation of such transaction to effect such cost savings identified in such Officer's Certificate and with respect to any other transaction, such Officer's Certificate sets forth the specific steps to be taken within the 90 days after the consummation of such transaction to accomplish such cost savings). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness). If any Indebtedness bears, at the option of North American Van Lines or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as North American Van Lines or such Restricted Subsidiary may designate. If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of North American Van Lines to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. "Consolidated EBITDA" means, for any period, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income: (1) provision for all taxes (whether or not paid, estimated or accrued) based on income, profits or capital, (2) Consolidated Interest Expense, (3) depreciation, amortization (including but not limited to amortization of goodwill and intangibles and amortization and write-off of financing costs) and all other non-cash charges or non-cash losses, 118 (4) any expenses or charges related to any Equity Offering, Investment or Indebtedness permitted by the indenture (whether or not consummated or incurred) and (5) the amount of any minority interest expense. To the extent Consolidated EBITDA would otherwise include the amount of any Receivables Fees excluded from Consolidated Interest Expense pursuant to clause (3) of the definition of Consolidated Interest Expense, Consolidated EBITDA shall be reduced by such amount. "Consolidated Interest Expense" means, for any period, (1) the total interest expense of North American Van Lines and its Restricted Subsidiaries to the extent deducted in calculating Consolidated Net Income, net of any interest income of North American Van Lines and its Restricted Subsidiaries, including without limitation any such interest expense consisting of (a) interest expense attributable to Capitalized Lease Obligations, (b) amortization of debt discount, (c) interest in respect of Indebtedness of any other Person that has been Guaranteed by North American Van Lines or any Restricted Subsidiary of North American Van Lines (other than Indebtedness Guaranteed under any Management Guarantee or Agent Guarantee, except to the extent the interest thereon is actually being paid by North American Van Lines or a Restricted Subsidiary thereof), (d) non-cash interest expense, (e) the interest portion of any deferred payment obligation, and (f) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, plus (2) dividends paid in cash in respect of Disqualified Stock of North American Van Lines or a Restricted Subsidiary or in respect of Preferred Stock of a Restricted Subsidiary of North American Van Lines and minus (3) to the extent otherwise included in such interest expense referred to in clause (1) above, Receivables Fees and amortization or write-off of financing costs, in each case under clauses (1) through (3) as determined on a Consolidated basis in accordance with GAAP; provided, that gross interest expense shall be determined after giving effect to any net payments made or received by North American Van Lines and its Restricted Subsidiaries with respect to Interest Rate Agreements. "Consolidated Net Income" means, for any period, the net income (loss) of North American Van Lines and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends; provided, that there shall not be included in such Consolidated Net Income: (1) any net income (loss) of any Person if such Person is not a Restricted Subsidiary, except that (A) subject to the limitations contained in clause (4) below, North American Van Lines' equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount actually distributed by such Person during such period to North American Van Lines or a Restricted Subsidiary of North American Van Lines as a dividend or other distribution 119 (subject, in the case of a dividend or other distribution to a Restricted Subsidiary of North American Van Lines, to the limitations contained in clause (3) below) and (B) North American Van Lines' equity in the net loss of such Person shall be included to the extent of the aggregate Investment of North American Van Lines or any of its Restricted Subsidiaries in such Person, (2) any net income (loss) of any Person acquired by North American Van Lines or a Restricted Subsidiary of North American Van Lines in a pooling of interests transaction for any period prior to the date of such acquisition, (3) any net income (loss) of any Restricted Subsidiary of North American Van Lines if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of similar distributions by such Restricted Subsidiary, directly or indirectly, to North American Van Lines by operation of the terms of such Restricted Subsidiary's charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its stockholders (other than (x) restrictions that have been waived or otherwise released, (y) restrictions pursuant to the notes or the indenture and (z) restrictions in effect on the Issue Date with respect to a Restricted Subsidiary and other restrictions with respect to such Restricted Subsidiary that taken as a whole are not materially less favorable to the noteholders than such restrictions in effect on the Issue Date), except that (A) subject to the limitations contained in clause (4) below, North American Van Lines' equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of any dividend or distribution that was or that could have been made by such Restricted Subsidiary during such period to North American Van Lines or another Restricted Subsidiary of North American Van Lines (subject, in the case of a dividend that could have been made to another Restricted Subsidiary, to the limitation contained in this clause) and (B) the net loss of such Restricted Subsidiary shall be included to the extent of the aggregate Investment of North American Van Lines or any of its other Restricted Subsidiaries in such Restricted Subsidiary, (4) any gain or loss realized upon the sale or other disposition of any asset of North American Van Lines or any Restricted Subsidiary of North American Van Lines (including pursuant to any sale/ leaseback transaction) that is not sold or otherwise disposed of in the ordinary course of business (as determined in good faith by the Board of Directors), (5) any item classified as an extraordinary, unusual or nonrecurring gain, loss or charge (including without limitation (a) any compensation expense for stock options that will be cashed out, converted, exchanged or otherwise retired in connection with the Allied Acquisition, (b) any charge or expense incurred for employee bonuses in connection with the Allied Acquisition, and (c) fees, expenses and charges associated with the Allied Acquisition or any acquisition, merger or consolidation after the Issue Date), (6) the cumulative effect of a change in accounting principles, (7) all deferred financing costs written off and premiums paid in connection with any early extinguishment of Indebtedness, (8) any unrealized gains or losses in respect of Currency Agreements, (9) any unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person, and (10) any non-cash compensation charge arising from any grant of stock, stock options or other equity based awards. In the case of any unusual or nonrecurring gain, loss or charge not included in Consolidated Net Income pursuant to clause (5) above in any determination thereof, North American Van Lines will deliver 120 an Officer's Certificate to the trustee promptly after the date on which Consolidated Net Income is so determined, setting forth the nature and amount of such unusual or nonrecurring gain, loss or charge. "Consolidated Tangible Assets" means, as of any date of determination, the total assets less the total intangible assets (including, without limitation, goodwill) shown on the consolidated balance sheet of North American Van Lines and its Restricted Subsidiaries as of the most recent date for which such a balance sheet is available, determined on a consolidated basis in accordance with GAAP (and, in the case of any determination relating to any Incurrence of Indebtedness or any Investment, on a pro forma basis including any property or assets being acquired in connection therewith). "Consolidation" means the consolidation of the accounts of each of the Restricted Subsidiaries with those of North American Van Lines in accordance with GAAP; provided that "Consolidation" will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of North American Van Lines or any Restricted Subsidiary in any Unrestricted Subsidiary will be accounted for as an investment. The term "Consolidated" has a correlative meaning. "Credit Facilities" means, one or more of (x) the Senior Credit Facility and (y) other facilities or arrangements, in each case with one or more banks or other institutions providing for revolving credit loans, term loans, receivables financings (including without limitation through the sale of receivables to such institutions or to special purpose entities formed to borrow from such institutions against such receivables), letters of credit or other Indebtedness, in each case, including all agreements, instruments and documents executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original banks or other institutions or other banks or other institutions or otherwise, and whether provided under any original Credit Facility or one or more other credit agreements, indentures, financing agreements or other Credit Facilities or otherwise). Without limiting the generality of the foregoing, the term "Credit Facility" shall include any agreement (1) changing the maturity of any Indebtedness incurred thereunder or contemplated thereby, (2) adding Subsidiaries of North American Van Lines as additional borrowers or guarantors thereunder, (3) increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder or (4) otherwise altering the terms and conditions thereof. "Currency Agreement" means, in respect of a Person, any foreign exchange contract, currency swap agreement or other similar agreement or arrangements (including derivative agreements or arrangements), as to which such Person is a party or a beneficiary. "Default" means any event or condition that is, or after notice or passage of time or both would be, an Event of Default. "Designated Noncash Assets" means any non-cash consideration received by North American Van Lines or one of its Restricted Subsidiaries in connection with an Asset Disposition that is designated as Designated Noncash Assets pursuant to an Officer's Certificate executed by the principal financial officer of North American Van Lines or such Restricted Subsidiary. Such Officer's Certificate shall state the basis of valuation of such consideration which shall be the good faith determination of the Board of Directors. The fair market value of each outstanding item of Designated Noncash Assets shall equal its value measured at the time received and without giving effect to subsequent changes in value, less the amount of cash or Cash Equivalents received upon any subsequent sale or other disposition of any portion thereof; provided that such cash and Cash Equivalents are applied in accordance with the covenant described under 121 "--Certain Covenants--Limitation on Sales of Assets and Subsidiary Stock," to the extent required thereby. "Designated Senior Indebtedness" means (1) the Bank Indebtedness and (2) any other Senior Indebtedness that, at the date of determination, has an aggregate principal amount equal to or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25.0 million and is specifically designated by North American Van Lines in an agreement or instrument evidencing or governing such Senior Indebtedness as "Designated Senior Indebtedness" for purposes of the indenture. "Disinterested Director" means, with respect to any Affiliate Transaction, a member of the Board of Directors having no material direct or indirect financial interest in or with respect to such Affiliate Transaction. A member of the Board of Directors shall not be deemed to have such a financial interest by reason of such member's holding Capital Stock of North American Van Lines or Holding or any options, warrants or other rights in respect of such Capital Stock. "Disqualified Stock" means, with respect to any Person, any Capital Stock (other than Management Stock) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (2) is convertible or exchangeable for Indebtedness or Disqualified Stock or (3) is redeemable at the option of the holder thereof, in whole or in part, in each case on or prior to the 91st day following the final Stated Maturity of the notes. Notwithstanding the preceding sentence, (a) any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require North American Van Lines to repurchase such Capital Stock upon the occurrence of an event described therein as a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that North American Van Lines may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "--Certain Covenants--Limitation on Restricted Payments"; and (b) any Capital Stock that would constitute Disqualified Stock solely because such Capital Stock is issued pursuant to any plan for the benefit of employees and may be required to be repurchased by North American Van Lines in order to satisfy applicable regulatory obligations shall not constitute Disqualified Stock. "Domestic Subsidiary" means any Restricted Subsidiary of North American Van Lines other than a Foreign Subsidiary. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Financing Disposition" means any sale, transfer, conveyance or other disposition of property or assets by North American Van Lines or any Subsidiary thereof to any Receivables Entity, or by any Receivables Subsidiary, in each case in connection with the Incurrence by a Receivables Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets. "Foreign Subsidiary" means (a) any Restricted Subsidiary of North American Van Lines that is not organized under the laws of the United States of America or any state thereof or the District of Columbia and 122 (b) any Restricted Subsidiary of North American Van Lines that has no material assets other than securities of one or more Foreign Subsidiaries, and other assets relating to an ownership interest in any such securities or Subsidiaries. "Foreign Subsidiary Coverage Ratio" as of any date of determination means the ratio of (1) the combined portion attributable to Foreign Subsidiaries, taken as a whole, of the aggregate amount of Consolidated EBITDA of North American Van Lines and its Restricted Subsidiaries for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which consolidated financial statements of North American Van Lines are available to (2) the combined portion attributable to Foreign Subsidiaries, taken as a whole, of Consolidated Interest Expense for such four fiscal quarters, all calculated after giving effect to all intercompany eliminations applied in preparing the relevant consolidated financial statements of North American Van Lines (and without giving effect to clause (3) of the definition of the term Consolidated Net Income as it relates to restrictions on the payment of dividends or the making of similar distributions by any Foreign Subsidiary to North American Van Lines or any Domestic Sudsidiary, but giving effect to such clause as it relates to any such restrictions on the payment of dividends or the making of similar distributions by any Foreign Subsidiary to another Foreign Subsidiary), and otherwise in accordance with the definition of the term "Coverage Ratio" (including but not limited to in accordance with all pro forma and other adjustments provided for in such definition). "GAAP" means generally accepted accounting principles in the United States of America as in effect on the Issue Date (for purposes of the definitions of the terms "Consolidated Coverage Ratio," "Foreign Subsidiary Coverage Ratio," "Consolidated EBITDA," "Consolidated Interest Expense," "Consolidated Net Income" and "Consolidated Tangible Assets," all defined terms in the indenture to the extent used in or relating to any of the foregoing definitions, and all ratios and computations based on any of the foregoing definitions) and as in effect from time to time (for all other purposes of the indenture), including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in the indenture shall be computed in conformity with GAAP. "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person; provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Guarantor Senior Indebtedness" means, with respect to any Note Guarantor, the following obligations, whether outstanding on the date of the indenture or thereafter issued, without duplication: (a) any Guarantee of Bank Indebtedness by such Note Guarantor and all other Guarantees by such Note Guarantor of Senior Indebtedness of North American Van Lines or Guarantor Senior Indebtedness of any other Note Guarantor; (b) all obligations in respect of any Receivables Financing; and (c) all obligations consisting of the principal of and premium, if any, and accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Note Guarantor regardless of whether post-filing interest is allowed in such proceeding) on, and fees and other amounts owing in respect of, all other Indebtedness of the Note Guarantor, unless, in the instrument creating or evidencing the same or pursuant to which the 123 same is outstanding, it is expressly provided that the obligations in respect of such Indebtedness are not senior in right of payment to the obligations of such Note Guarantor under its Note Guarantee; provided, however, that Guarantor Senior Indebtedness shall not include (1) any obligations of such Note Guarantor to North American Van Lines or any other Subsidiary of North American Van Lines, (2) any liability for Federal, state, local, foreign or other taxes owed or owing by such Note Guarantor, (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including Guarantees thereof or instruments evidencing such liabilities), (4) any Indebtedness of such Note Guarantor (or Guarantee by such Note Guarantor of Indebtedness) that is expressly subordinated in right of payment to any other Indebtedness of such Note Guarantor (or Guarantee by such Note Guarantor of Indebtedness), (5) any Capital Stock of such Note Guarantor or (6) that portion of any Indebtedness of such Note Guarantor that is Incurred by such Note Guarantor in violation of the covenant described under "--Certain Covenants--Limitation on Indebtedness" (but no such violation shall be deemed to exist for purposes of this clause (6) if any holder of such Indebtedness or such holder's representative shall have received an Officer's Certificate to the effect that such Incurrence of such Indebtedness does not (or that the Incurrence by such Note Guarantor of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such covenant). If any Guarantor Senior Indebtedness is disallowed, avoided or subordinated pursuant to the provisions of Section 548 of Title 11 of the United States Code or any applicable state fraudulent conveyance law, such Guarantor Senior Indebtedness nevertheless will constitute Guarantor Senior Indebtedness. "Guarantor Senior Subordinated Indebtedness" means, with respect to a Note Guarantor, (1) the obligations of such Note Guarantor under its Note Guarantee and (2) any other Indebtedness of such Note Guarantor that ranks PARI PASSU in right of payment with the obligations of such Note Guarantor under its Note Guarantee. "Guarantor Subordinated Obligations" means, with respect to a Note Guarantor, any Indebtedness of such Note Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is expressly subordinated in right of payment to the obligations of such Note Guarantor under the Note Guarantee pursuant to a written agreement. "Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement. "holder" or "noteholder" means the Person in whose name a note is registered in the Note Register. "Holding" means NA Holding Corporation, a Delaware corporation, and any successor in interest thereto. 124 "Holding Expenses" means (1) costs (including all professional fees and expenses) incurred by Holding to comply with its reporting obligations under federal or state laws or under the indenture or the Holding Notes, including any reports filed with respect to the Securities Act, Exchange Act or the respective rules and regulations promulgated thereunder, (2) indemnification obligations of Holding owing to directors, officers, employees or other Persons under its charter or by-laws or pursuant to written agreements with any such Person, (3) fees and expenses payable by Holding in connection with the Transactions, (4) other operational expenses of Holding incurred in the ordinary course of business, (5) expenses incurred by Holding in connection with any public offering of Capital Stock or Indebtedness (X) where the net proceeds of such offering are intended to be received by or contributed or loaned to North American Van Lines or a Restricted Subsidiary, or (Y) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received, contributed or loaned, or (Z) otherwise on an interim basis prior to completion of such offering so long as Holding shall cause the amount of such expenses to be repaid to North American Van Lines or the relevant Restricted Subsidiary out of the proceeds of such offering promptly if completed, and (6) interest payments on the Holding Loan for any period or portion thereof ending on or prior to December 31, 1999. "Holding Loan" means $40.0 million in aggregate principal amount of Indebtedness Incurred by Holding in connection with the Transactions. "Holding Notes" means the senior discount notes due 2009 issued (or any Indebtedness in lieu thereof Incurred) by Holding on the Issue Date, and any refinancing in respect thereof, together with any agreement or instrument evidencing, governing or otherwise relating to any of the foregoing. "Holding Stock Issuance" means one or more issuances by Holding, subsequent to the Issue Date, of Capital Stock of Holding for gross proceeds of not less than $40.0 million in the aggregate. "Incur" means issue, assume, enter into any Guarantee of, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an Incurrence of Indebtedness. Any Indebtedness issued at a discount (including Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be deemed Incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof. The term "Incurrence" shall have a correlative meaning. "Indebtedness" means, with respect to any Person on any date of determination (without duplication): (1) the principal of indebtedness of such Person for borrowed money, (2) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (3) all reimbursement obligations of such Person in respect of letters of credit or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit or other instruments plus the aggregate amount of drawings thereunder that have not then been reimbursed), 125 (4) all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables), which purchase price is due more than one year after the date of placing such property in final service or taking final delivery and title thereto, (5) all Capitalized Lease Obligations of such Person, (6) the redemption, repayment or other repurchase amount of such Person with respect to any Disqualified Stock of such Person or (if such Person is a Subsidiary of North American Van Lines other than a Note Guarantor) any Preferred Stock of such Subsidiary, but excluding, in each case, any accrued dividends (the amount of such obligation to be equal at any time to the maximum fixed involuntary redemption, repayment or repurchase price for such Capital Stock, or if less (or if such Capital Stock has no such fixed price), to the involuntary redemption, repayment or repurchase price therefor calculated in accordance with the terms thereof as if then redeemed, repaid or repurchased, and if such price is based upon or measured by the fair market value of such Capital Stock, such fair market value shall be as determined in good faith by the Board of Directors or the board of directors or other governing body of the issuer of such Capital Stock), (7) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of Indebtedness of such Person shall be the lesser of (A) the fair market value of such asset at such date of determination (as determined in good faith by North American Van Lines) and (B) the amount of such Indebtedness of such other Persons, (8) Guarantees of all Indebtedness of other Persons to the extent so Guaranteed by such Person, and (9) to the extent not otherwise included in this definition, net Hedging Obligations of such Person (the amount of any such obligation to be equal at any time to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person at such time). The amount of Indebtedness of any Person at any date shall be determined as set forth above or otherwise provided in the indenture, or otherwise shall equal the amount thereof that would appear on a balance sheet of such Person (excluding any notes thereto) prepared in accordance with GAAP. "Interest Rate Agreement" means, with respect to any Person, any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement (including derivative agreements or arrangements), as to which such Person is party or a beneficiary. "Inventory" means goods held for sale or lease by a Person in the ordinary course of business, net of any reserve for goods that have been segregated by such Person to be returned to the applicable vendor for credit, as determined in accordance with GAAP. "Investment" in any Person by any other Person means any direct or indirect advance, loan or other extension of credit (other than to customers, suppliers, Agents, directors, officers or employees of any Person in the ordinary course of business) or capital contribution (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) to, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person. For purposes of the definition of "Unrestricted Subsidiary" and the covenant described under "--Certain Covenants--Limitation on Restricted Payments," (1) "Investment" shall include the portion (proportionate to North American Van Lines' equity interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of North American Van Lines at the time that such Subsidiary is designated an Unrestricted Subsidiary, provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, North American Van 126 Lines shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (X) North American Van Lines' "Investment" in such Subsidiary at the time of such redesignation less (Y) the portion (proportionate to North American Van Lines' equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time of such redesignation, (2) property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer, and (3) in each case under clause (1) or (2) above, fair market value shall be as determined in good faith by the Board of Directors. A Guarantee shall not be deemed to be or give rise to an Investment until such Guarantee is funded (in whole or in part). The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at North American Van Lines' option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment; provided, that to the extent that the amount of Restricted Payments outstanding at any time is so reduced by any portion of any such amount or value that would otherwise be included in the calculation of Consolidated Net Income, such portion of such amount or value shall not be so included for purposes of calculating the amount of Restricted Payments that may be made pursuant to paragraph (a) of the covenant described under "--Certain Covenants--Limitation on Restricted Payments." "Investors" means CDR Fund V. "Issue Date" means the first date on which notes are issued. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Management Advances" means (1) loans or advances made to directors, officers or employees of Holding, North American Van Lines or any Restricted Subsidiary (x) in respect of travel, entertainment or moving-related expenses incurred in the ordinary course of business, (y) in respect of moving-related expenses incurred in connection with any closing or consolidation of any facility, or (z) in the ordinary course of business and (in the case of this clause (z)) not exceeding $2.5 million in the aggregate outstanding at any time, (2) promissory notes of Management Investors acquired in connection with the issuance of Management Stock to such Management Investors, (3) loans to Management Investors of funds applied to purchase Management Stock in an aggregate principal amount not exceeding $10.0 million outstanding at any time (less the aggregate principal amount of then outstanding borrowings by Management Investors then guaranteed by North American Van Lines pursuant to clause (x) of the definition of Management Guarantees), (4) Management Guarantees, or (5) other Guarantees of borrowings by Management Investors in connection with the purchase of Management Stock, which Guarantees are permitted under the covenant described under "--Certain Covenants--Limitation on Indebtedness." "Management Agreements" means, collectively, the Consulting Agreement, dated as of March 30, 1998, among Holding, North American Van Lines and CDR (and, in each case, its respective permitted successors and assigns thereunder) and the Indemnification Agreement, dated as of March 30, 1998, among Holding, North American Van Lines, CDR and the Investors (and, in each case, its respective permitted successors and assigns thereunder), as each may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of the indenture. 127 "Management Guarantees" means guarantees (x) of up to an aggregate principal amount of $10.0 million of borrowings by Management Investors in connection with their purchase of Management Stock outstanding at any time (less the aggregate principal amount of then outstanding loans made to Management Investors by North American Van Lines pursuant to clause (3) of the definition of Management Advances) or (y) made on behalf of, or in respect of loans or advances made to, directors, officers or employees of Holding, North American Van Lines or any Restricted Subsidiary (1) in respect of travel, entertainment and moving-related expenses incurred in the ordinary course of business, or (2) in the ordinary course of business and (in the case of this clause (2)) not exceeding $2.5 million in the aggregate outstanding at any time. "Management Investors" means the officers, directors, employees and other members of the management of Holding, North American Van Lines or any of their respective Subsidiaries (or of any Agent), or family members or relatives thereof, or trusts or partnerships for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives, or any Agent, who at any date beneficially own or have the right to acquire, directly or indirectly, Capital Stock of North American Van Lines or Holding. "Management Stock" means Capital Stock of North American Van Lines or Holding (including any options, warrants or other rights in respect thereof) held by any of the Management Investors. "Moody's" means Moody's Investors Service, Inc., and its successors. "Net Available Cash" from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of (1) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition (including as a consequence of any transfer of funds in connection with the application thereof in accordance with the covenant described under "--Certain Covenants--Limitation on Sales of Assets and Subsidiary Stock"), (2) all payments made, and all installment payments required to be made, on any Indebtedness that is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition, (3) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition, or to any other Person (other than North American Van Lines or a Restricted Subsidiary) owning a beneficial interest in the assets disposed of in such Asset Disposition and (4) any liabilities or obligations associated with the assets disposed of in such Asset Disposition and retained by North American Van Lines or any Restricted Subsidiary after such Asset Disposition, including without limitation pension and other post-employment benefit liabilities, liabilities related to environmental matters, and liabilities relating to any indemnification obligations associated with such Asset Disposition. "Net Cash Proceeds," with respect to any issuance or sale of any securities of North American Van Lines or any Subsidiary by North American Van Lines or any Subsidiary, or any capital contribution, means 128 the cash proceeds of such issuance, sale or contribution net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance, sale or contribution and net of taxes paid or payable as a result thereof. "Note Guarantee" means any of (1) the guarantees of the notes by the Domestic Subsidiaries to be entered into on the Issue Date as described under "--Note Guarantees," and (2) any guarantee that may from time to time be entered into by a Restricted Subsidiary of North American Van Lines pursuant to the covenant described under "--Certain Covenants--Future Note Guarantors." "Note Guarantor" means any Restricted Subsidiary of North American Van Lines that enters into a Note Guarantee. "Officer" means, with respect to North American Van Lines or any other obligor upon the notes, the Chairman of the Board, the President, the Chief Executive Officer, the Chief Financial Officer, any Vice President, the Controller, the Treasurer or the Secretary (a) of such Person or (b) if such Person is owned or managed by a single entity, of such entity (or any other individual designated as an "Officer" for the purposes of the indenture by the Board of Directors). "Officer's Certificate" means, with respect to North American Van Lines or any other obligor upon the notes, a certificate signed by one Officer of such Person. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the trustee. The counsel may be an employee of or counsel to North American Van Lines or the trustee. "Permitted Holder" means any of the following: (1) any of the Investors, Management Investors, CDR and their respective Affiliates; (2) any investment fund or vehicle managed, sponsored or advised by CDR; and (3) any Person acting in the capacity of an underwriter in connection with a public or private offering of Capital Stock of Holding or North American Van Lines. "Permitted Investment" means an Investment by North American Van Lines or any Restricted Subsidiary in, or consisting of, any of the following: (1) a Restricted Subsidiary, North American Van Lines, or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; (2) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, or is liquidated into, North American Van Lines or a Restricted Subsidiary; (3) Temporary Cash Investments or Cash Equivalents; (4) receivables owing to North American Van Lines or any Restricted Subsidiary, if created or acquired in the ordinary course of business; (5) any securities or other Investments received as consideration in, or retained in connection with, sales or other dispositions of property or assets, including Asset Dispositions made in compliance with the covenant described under "--Certain Covenants--Limitation on Sales of Assets and Subsidiary Stock"; (6) securities or other Investments received in settlement of debts created in the ordinary course of business and owing to North American Van Lines or any Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments, including in connection with any bankruptcy proceeding or other reorganization of another Person; (7) Investments in existence or made pursuant to legally binding written commitments in existence on the Issue Date; 129 (8) Currency Agreements, Interest Rate Agreements and related Hedging Obligations, which obligations are Incurred in compliance with the covenant described under "--Certain Covenants--Limitation on Indebtedness"; (9) pledges or deposits (x) with respect to leases or utilities provided to third parties in the ordinary course of business or (y) otherwise described in the definition of "Permitted Liens" or made in connection with Liens permitted under the covenant described under "--Certain Covenants--Limitation on Liens"; (10) Investments in joint ventures or similar entities that are not Restricted Subsidiaries, or in any Related Business, in an aggregate amount outstanding at any time not to exceed the greater of (x) $15.0 million and (y) 2.5% of Consolidated Tangible Assets; (11) (1) Investments in any Receivables Subsidiary, or in connection with a Financing Disposition by or to any Receivables Entity, including Investments of funds held in accounts permitted or required by the arrangements governing such Financing Disposition or any related Indebtedness, or (2) any promissory note issued by North American Van Lines or Holding, provided that if Holding receives cash from the relevant Receivables Entity in exchange for such note, an equal cash amount is contributed by Holding to North American Van Lines; (12) bonds secured by assets leased to and operated by North American Van Lines or any Restricted Subsidiary that were issued in connection with the financing of such assets so long as North American Van Lines or any Restricted Subsidiary may obtain title to such assets at any time by paying a nominal fee, canceling such bonds and terminating the transaction; (13) notes; (14) any Investment to the extent made using Capital Stock of North American Van Lines (other than Disqualified Stock), or Capital Stock of Holding, as consideration; (15) Management Advances and payments in respect thereof; (16) Agent Guarantees in an aggregate principal amount not exceeding $10.0 million outstanding at any time and payments in respect thereof; and (17) other Investments in an aggregate amount outstanding at any time not to exceed $10.0 million. "Permitted Junior Securities" means: (a) debt securities of North American Van Lines as reorganized or readjusted, if applicable, and guaranteed by the Note Guarantors, or debt securities of North American Van Lines (or any other company, trust or organization provided for by a plan of reorganization or readjustment succeeding to the assets and liabilities of North American Van Lines) and guaranteed by the Note Guarantors, in each of the foregoing cases, which securities and guarantees are subordinated, to at least the same extent as the notes and the Note Guarantees, to the payment of all Senior Indebtedness and guarantees thereof that will be outstanding after giving effect to such reorganization or readjustment, if applicable, so long as (1) such debt securities are not entitled to the benefit of covenants or defaults more beneficial to the holders of such debt securities than those in effect with respect to the notes (or the Senior Indebtedness, after giving effect to such reorganization or readjustment, if applicable) and (2) such debt securities shall not provide for amortization-including sinking fund and mandatory prepayment provisions (other than a mandatory prepayment of the type described under the caption "--Change of Control") commencing prior to the date which is one year after 130 the final scheduled maturity date of the Senior Indebtedness (as modified by such reorganization or readjustment, if applicable), or (b) Capital Stock in North American Van Lines or any Note Guarantor; provided, that in each case with respect to clauses (a) and (b) above, if a new corporation results from any such reorganization or readjustment, such corporation assumes all Senior Indebtedness that will be outstanding after giving effect thereto and provided further, that the rights of the holders of Senior Indebtedness are not impaired. "Permitted Liens" means: (a) Liens for taxes, assessments or other governmental charges not yet delinquent or the nonpayment of which in the aggregate would not reasonably be expected to have a material adverse effect on North American Van Lines and its Restricted Subsidiaries, or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of North American Van Lines or a Subsidiary thereof, as the case may be, in accordance with GAAP; (b) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other like Liens arising in the ordinary course of business in respect of obligations that are not overdue for a period of more than 60 days, or that are bonded or that are being contested in good faith and by appropriate proceedings; (c) pledges, deposits or Liens in connection with workers' compensation, unemployment insurance and other social security and other similar legislation or other insurance-related obligations (including, without limitation, pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements); (d) pledges, deposits or Liens to secure the performance of bids, tenders, trade, government or other contracts (other than for borrowed money), obligations for utilities, leases, licenses, statutory obligations, completion guarantees, surety, judgment, appeal or performance bonds, other similar bonds, instruments or obligations, and other obligations of a like nature incurred in the ordinary course of business; (e) easements (including reciprocal easement agreements), rights-of-way, building, zoning and similar restrictions, utility agreements, covenants, reservations, restrictions, encroachments, changes, and other similar encumbrances or title defects incurred, or leases or subleases granted to others, in the ordinary course of business, which do not in the aggregate materially interfere with the ordinary conduct of the business of North American Van Lines and its Subsidiaries, taken as a whole; (f) Liens existing on, or provided for under written arrangements existing on, the Issue Date, or (in the case of any such Liens securing Indebtedness of North American Van Lines or any of its Subsidiaries existing or arising under written arrangements existing on the Issue Date) securing any Refinancing Indebtedness in respect of such Indebtedness so long as the Lien securing such Refinancing Indebtedness is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or under such written arrangements could secure) the original Indebtedness; (g) (1) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any developer, landlord or other third party on property over which North American Van Lines or any Restricted Subsidiary of North American Van Lines has 131 easement rights or on any leased property and subordination or similar agreements relating thereto and (2) any condemnation or eminent domain proceedings affecting any real property; (h) Liens securing Hedging Obligations, Purchase Money Obligations or Capitalized Lease Obligations Incurred in compliance with the covenant described under "--Certain Covenants--Limitation on Indebtedness"; (i) Liens arising out of judgments, decrees, orders or awards in respect of which North American Van Lines shall in good faith be prosecuting an appeal or proceedings for review, which appeal or proceedings shall not have been finally terminated, or if the period within which such appeal or proceedings may be initiated shall not have expired; (j) leases, subleases, licenses or sublicenses to third parties; (k) Liens securing (1) Indebtedness Incurred in compliance with clause (b)(1), (b)(4), (b)(5), (b)(7) or (b)(8)(F) of the covenant described under "--Certain Covenants--Limitation on Indebtedness," (2) Bank Indebtedness, (3) commercial bank Indebtedness, (4) the notes or (5) Indebtedness or other obligations of any Receivables Entity; (l) Liens existing on property or assets of a Person at the time such Person becomes a Subsidiary of North American Van Lines (or at the time North American Van Lines or a Restricted Subsidiary acquires such property or assets); provided, however, that such Liens are not created in connection with, or in contemplation of, such other Person becoming such a Subsidiary (or such acquisition of such property or assets), and that such Liens are limited to all or part of same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate; (m) Liens on Capital Stock or other securities of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary; (n) any encumbrance or restriction (including, but not limited to, put and call agreements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement; and (o) Liens securing Refinancing Indebtedness Incurred in respect of any Indebtedness secured by, or securing any refinancing, refunding, extension, renewal or replacement (in whole or in part) of any other obligation secured by, any other Permitted Liens, provided that any such new Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the obligations to which such Liens relate. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock" as applied to the Capital Stock of any corporation means Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation. 132 "Purchase Money Obligations" means any Indebtedness Incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets, and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise. "Qualified Proceeds" means property or assets that are used, usable or useful in, or a majority of the Voting Stock of any Person engaged in, a Related Business; provided that the fair market value of any such assets or Capital Stock shall be determined by the Board of Directors in good faith. "Receivable" means a right to receive payment arising from a sale or lease of goods or services by a Person pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit, as determined in accordance with GAAP. "Receivables Entity" means (x) any Receivables Subsidiary or (y) any other Person that is engaged in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time), other accounts and/or other receivables, and/or related assets. "Receivables Fees" means distributions or payments made directly or by means of discounts with respect to any participation interest issued or sold in connection with, and other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing. "Receivables Financing" means any financing of Receivables of North American Van Lines or any Restricted Subsidiary that have been transferred to a Receivables Entity in a Financing Disposition. "Receivables Subsidiary" means a Subsidiary of North American Van Lines that (a) is engaged solely in the business of acquiring, selling, collecting, financing or refinancing Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles), all proceeds thereof and all rights (contractual and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and (b) is designated as a "Receivables Subsidiary" by the Board of Directors. "Receivables Repurchase Obligation" means any obligation of a seller of receivables to repurchase receivables (including Receivables, accounts (as defined in the Uniform Commercial Code as in effect in any jurisdiction from time to time) and other accounts and receivables (including any thereof constituting or evidenced by chattel paper, instruments or general intangibles)) arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller. "Refinance" means refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell or extend (including pursuant to any defeasance or discharge mechanism); and the terms "refinances," "refinanced" and "refinancing" as used for any purpose in the indenture shall have a correlative meaning. "Refinancing Indebtedness" means Indebtedness that is Incurred to refinance any Indebtedness existing on the date of the indenture or Incurred in compliance with the indenture (including Indebtedness of North American Van Lines that refinances Indebtedness of any Restricted Subsidiary (to the extent permitted in the indenture) and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of 133 another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness; provided, that (1) if the Indebtedness being refinanced is Subordinated Obligations or Guarantor Subordinated Obligations, the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced, (2) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced, plus (y) fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such Refinancing Indebtedness and (3) Refinancing Indebtedness shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness of North American Van Lines or a Note Guarantor that was incurred by North American Van Lines or a Note Guarantor pursuant to paragraph (a) of the covenant described under "--Certain Covenants-Limitation on Indebtedness" or (y) Indebtedness of North American Van Lines or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary. "Related Business" means those businesses in which North American Van Lines or any of its Subsidiaries is engaged on the date of the indenture, or that are related, complementary, incidental or ancillary thereto or extensions, developments or expansions thereof. "Related Taxes" means (x) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed on payments made by Holding), required to be paid by Holding by virtue of its being incorporated or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than North American Van Lines or any of its Subsidiaries), or being a holding company parent of North American Van Lines or receiving dividends from or other distributions in respect of the Capital Stock of North American Van Lines, or having guaranteed any obligations of North American Van Lines or any Subsidiary thereof, or having made any payment in respect of any of the items for which North American Van Lines is permitted to make payments to Holding pursuant to the covenant described under "--Certain Covenants--Limitation on Restricted Payments," or (y) any other federal, state, foreign, provincial or local taxes measured by income for which Holding is liable up to an amount not to exceed with respect to such federal taxes the amount of any such taxes that North American Van Lines would have been required to pay on a separate company basis or on a consolidated basis if North American Van Lines had filed a consolidated return on behalf of an affiliated group (as defined in Section 1504 of the Code or an analogous provision of state, local or foreign law) of which it were the common parent, or with respect to state and local taxes, on a combined basis if North American Van Lines had filed a combined return on behalf of an affiliated group consisting only of North American Van Lines and its Subsidiaries, or (z) any federal, state, foreign, provincial or local withholding taxes paid by Holding by virtue of any dividend distributions in respect of the Preferred Stock issued in the Allied Acquisition (other than any such dividend distributions paid in cash). 134 "Representative" means the trustee, agent or representative (if any) for an issue of Senior Indebtedness. "Restricted Payment Transaction" means any Restricted Payment permitted pursuant to the covenant described under "--Certain Covenants--Limitation on Restricted Payments," any Permitted Payment, any Permitted Investment, or any transaction specifically excluded from the definition of the term "Restricted Payment." "Restricted Subsidiary" means any Subsidiary of North American Van Lines other than an Unrestricted Subsidiary. "SEC" means the Securities and Exchange Commission. "Secured Indebtedness" means any Indebtedness of North American Van Lines secured by a Lien. "Senior Credit Agreement" means the credit agreement dated as of the Issue Date among North American Van Lines, any Subsidiaries of North American Van Lines party thereto from time to time, the banks and other financial institutions party thereto from time to time, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank as collateral agent and administrative agent, as such agreement may be assumed by any successor in interest, and as such agreement may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Credit Agreement or otherwise). "Senior Credit Facility" means the collective reference to the Senior Credit Agreement, any Loan Documents (as defined therein), any notes and letters of credit issued pursuant thereto and any guarantee and collateral agreement, patent and trademark security agreement, mortgages, letter of credit applications and other guarantees, pledge agreements, security agreements and collateral documents, and other instruments and documents, executed and delivered pursuant to or in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original agent and lenders or other agents and lenders or otherwise, and whether provided under the original Senior Credit Agreement or one or more other credit agreements, indentures (including the indenture) or financing agreements or otherwise). Without limiting the generality of the foregoing, the term "Senior Credit Facility" shall include any agreement (1) changing the maturity of any Indebtedness incurred thereunder or contemplated thereby, (2) adding Subsidiaries of North American Van Lines as additional borrowers or guarantors thereunder, (3) increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder or (4) otherwise altering the terms and conditions thereof. "Senior Subordinated Indebtedness" means the notes and any other Indebtedness of North American Van Lines that ranks PARI PASSU with the notes. "Significant Domestic Subsidiary" means any Domestic Subsidiary that is a Significant Subsidiary. "Significant Subsidiary" means any Restricted Subsidiary that would be a "significant subsidiary" of North American Van Lines within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as in effect on the Issue Date. 135 "S&P" means Standard & Poor's Ratings Service, a division of The McGraw-Hill Companies, Inc., and its successors. "Standard Receivable Obligations" means representations, warranties, covenants, indemnities and other obligations (including Guarantees and Indebtedness) that are reasonably customary in connection with a Financing Disposition (as determined by North American Van Lines in good faith), including, without limitation, those relating to the servicing of the assets of a Receivables Entity, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Receivable Obligation. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency). "Subordinated Obligations" means any Indebtedness of North American Van Lines (whether outstanding on the date of the indenture or thereafter Incurred) that is expressly subordinated in right of payment to the notes pursuant to a written agreement. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other equity interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (1) such Person or (2) one or more Subsidiaries of such Person. "Successor Company" shall have the meaning assigned thereto in clause (1) under "--Merger and Consolidation." "Tax Sharing Agreement" means the Tax Sharing Agreement, dated as of the Issue Date, between North American Van Lines and Holding, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof and of the indenture. "Temporary Cash Investments" means any of the following: (1) any investment in (X) direct obligations of the United States of America or any agency or instrumentality thereof or obligations Guaranteed by the United States of America or any agency or instrumentality thereof, or (Y) direct obligations of any foreign country recognized by the United States of America rated at least "A" by S&P or "A-1" by Moody's (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody's then exists, the equivalent of such rating by any nationally recognized rating organization), (2) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers' acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by (X) any lender under the Senior Credit Agreement or (Y) a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250 million (or the foreign currency equivalent thereof) and whose long term debt is rated at least "A" by S&P or "A-1" by Moody's (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody's then exists, the equivalent of such rating by any nationally recognized rating organization) at the time such Investment is made, (3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) or (2) above entered into with a bank meeting the qualifications described in clause (2) above, 136 (4) investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a Person (other than North American Van Lines or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of "P-2" (or higher) according to Moody's or "A-2" (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody's then exists, the equivalent of such rating by any nationally recognized rating organization), (5) Investments in securities maturing not more than one year after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody's then exists, the equivalent of such rating by any nationally recognized rating organization), (6) investment funds investing 95% of their assets in securities of the type described in clauses (1)--(5) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), (7) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America, in each case, having capital and surplus in excess of $250 million (or the foreign currency equivalent thereof), or investments in money market funds complying with the risk limiting conditions of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act of 1940, as amended, or (8) similar short-term investments approved by the Board of Directors in the ordinary course of business. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. SectionSection77aaa-7bbbb) as in effect on the date of the indenture. "Trade Payables" means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services. "Transactions" means, collectively, the Allied Acquisition, the offering and issuance of the notes and the Holding Notes, the initial borrowings under the Senior Credit Facility, the issuance by Holding of Capital Stock as part of the consideration for the Allied Acquisition, the Holding Stock Issuance, and all other related transactions. "Trust Officer" means the Chairman of the Board, the President or any other officer or assistant officer of the trustee assigned by the trustee to administer its corporate trust matters. "Unrestricted Subsidiary" means (1) any Subsidiary of North American Van Lines that at the time of determination is an Unrestricted Subsidiary, as designated by the Board of Directors in the manner provided below, and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of North American Van Lines (including any newly acquired or newly formed Subsidiary of North American Van Lines) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, North American Van Lines or any other Restricted Subsidiary of North American Van Lines that is not a Subsidiary of the Subsidiary to be so designated; provided, that either (A) the Subsidiary to be so designated has total consolidated assets of $1,000 or less or 137 (B) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under the covenant described under "--Certain Covenants--Limitation on Restricted Payments." The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that immediately after giving effect to such designation either (x) North American Van Lines could incur at least $1.00 of additional Indebtedness under paragraph (a) in the covenant described under "--Certain Covenants--Limitation on Indebtedness" or (y) the Consolidated Coverage Ratio would be greater than it was immediately prior to giving effect to such designation. Any such designation by the Board of Directors shall be evidenced to the trustee by promptly filing with the trustee a copy of the resolution of North American Van Lines' Board of Directors giving effect to such designation and an Officer's Certificate of North American Van Lines certifying that such designation complied with the foregoing provisions. "Voting Stock" of an entity means all classes of Capital Stock of such entity then outstanding and normally entitled to vote in the election of directors or all interests in such entity with the ability to control the management or actions of such entity. 138 CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS UNITED STATES FEDERAL TAX CONSIDERATIONS The following is a summary of the principal United States federal income tax consequences of the acquisition, ownership and disposition of the new notes to the beneficial owners, and the principal U.S. estate tax consequences of the ownership of the notes to beneficial owners who are non-U.S. holders (as defined below). This summary is based on provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed U.S. Treasury regulations promulgated thereunder (the "Treasury Regulations") and administrative and judicial interpretations thereof, all as of the date hereof and all of which are subject to change, possibly on a retroactive basis. This summary addresses tax consequences only for holders that exchange old notes for new notes and who hold the notes as capital assets. This summary is for general information only, and does not address all of the tax consequences that may be relevant to particular holders in light of their personal circumstances, or to certain types of holders (such as banks and other financial institutions, real estate investment trusts, regulated investment companies, insurance companies, tax-exempt organizations, dealers in securities and persons who hold the notes as part of a hedge or a straddle with other investments). In addition, this summary does not include any description of the tax laws of any state, local or non-U.S. government that may be applicable to a particular holder. HOLDERS OF NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES TO THEM OF THE EXCHANGE, OWNERSHIP AND DISPOSITION OF THE NOTES, AS WELL AS THE TAX CONSEQUENCES UNDER STATE, LOCAL, NON-U.S. AND OTHER U.S. FEDERAL TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN TAX LAWS. EXCHANGE OFFER The exchange of any old note for a new note should not constitute a taxable exchange of the old note. As a result, the new notes should have the same issue price (and adjusted issue price immediately after the exchange) and the same amount of original issue discount, if any, as the old notes, and each holder should have the same adjusted tax basis and holding period in the new notes as it had in the old notes immediately before the exchange. The following discussion assumes that the exchange of old notes for new notes pursuant to the exchange offer will not be treated as a taxable exchange and that the old notes and the new notes will be treated as the same security for federal income tax purposes. TAXATION OF U.S. HOLDERS As used in this prospectus, the term "U.S. holder" means a holder of a note that is, for U.S. federal income tax purposes, (a) a citizen or resident of the United States, (b) a corporation or partnership created or organized in the United States or under the laws of the United States or of any state of the United States, (c) an estate whose income is includable in gross income for U.S. federal income tax purposes regardless of its source or (d) a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and (2) at least one U.S. person has authority to control all substantial decisions of the trust. 139 The Code authorizes the issuance of Treasury Regulations that, under certain circumstances, could reclassify as a non-U.S. partnership a partnership that would otherwise be treated as a U.S. partnership, or could reclassify as a U.S. partnership a partnership that would otherwise be treated as a non-U.S. partnership. Such regulations would apply only to partnerships created or organized after the date that proposed Treasury Regulations are filed with the Federal Register (or, if earlier, the date of issuance of a notice substantially describing the expected contents of the regulations). PAYMENT OF INTEREST ON THE NOTES OTHER THAN PAYMENTS UPON REGISTRATION DEFAULT. In general, interest paid on a note (other than payments upon a registration default discussed below) will be taxable to a U.S. holder as ordinary interest income, as received or accrued, in accordance with such holder's method of accounting for federal income tax purposes. If original issue discount on a note is not greater than a DE MINIMIS amount equal to 0.25% of its stated principal amount multiplied by the number of complete years to its maturity, any such discount will be deemed to be equal to zero, and a holder will not be required to accrue a portion of such discount as income in each taxable year. See, however, the discussion below under "--Payments upon Registration Default." Holders should consult their tax advisors as to the possible effect of payments upon a registration default on the treatment of original issue discount on the note if any. PAYMENTS UPON REGISTRATION DEFAULT. Because the notes provide for the payment of additional interest under the circumstances described above under "Description of Notes--Registration Rights," the notes could be subject to certain Treasury Regulations relating to debt instruments that provide for one or more contingent payments (the "Contingent Payment Regulations"). Under the Contingent Payment Regulations, however a payment is not a contingent payment merely because of a contingency that, as of the issue date, is either "remote" or "incidental." The Company intends to take the position that, for purposes of the Contingent Payment Regulations, the payment of such additional interest is a remote or incidental contingency as of the issue date. The Company also intends to take the position that payments of additional interest that were actually made were "insignificant" under the Contingent Payment Regulations and that the notes are not treated as reissued for purposes of the original issue discount rules as a result of such payments. If the U.S. Internal Revenue Service (the "IRS") were to take the position that the payments of additional interest were actually made and such payments were "not insignificant" under the Contingent Payment Regulations, the notes would be treated as reissued for purposes of applying the original issue discount rules. As a consequence of such reissuance, a U.S. holder could be required to accrue all payments on a note in excess of its issue price (including, possibly, amounts that would otherwise constitute DE MINIMIS original issue discount) on a constant yield basis. If the IRS were to take the position that, as of the date of issuance, the payment of such additional interest were not a "remote" or "incidental" contingency for purposes of the Contingent Payment Regulations, then (1) all payments (including any projected payments of such additional interest) on a note in excess of its issue price would effectively be treated as original issue discount, and (2) in each taxable year, a holder would be required to include an allocable portion of such amounts in gross income on a constant yield basis whether or not the payment of such additional interest were fixed or determinable in the taxable year. The Company's position for purposes of the Contingent Payment Regulations that the payment of such additional interest is a remote contingency as of the issue date is binding on each holder for federal income tax purposes, unless such holder discloses in the proper manner to the IRS that it is taking a different position. Holders should consult their tax advisors as to the tax considerations relating to debt instruments providing for payments such as the additional interest payable upon a registration default, particularly in connection with the possible application of the Contingent Payment Regulations. 140 SALE, EXCHANGE OR RETIREMENT OF THE NOTES. Upon the sale, exchange, redemption, retirement at maturity or other disposition of a note, a U.S. holder will generally recognize taxable gain or loss equal to the difference between the sum of the cash and the fair market value of all other property received on such disposition (except to the extent such cash or property is attributable to accrued interest, which will be taxable as ordinary income) and such holder's adjusted tax basis in the note. Gain or loss recognized on the disposition of a note generally will be capital gain or loss, and will be long-term capital gain or loss if, at the time of such disposition, the holder's holding period for the note is more than one year. A reduced tax rate on capital gain will apply to an individual U.S. holder if such holder's holding period for the note is more than one year at the time of disposition. MARKET DISCOUNT. A U.S. holder (other than a holder who makes the election described below) that acquires a note with market discount that is not de minimis, except in certain non-recognition transactions, generally will be required to treat any gain realized upon the disposition of the note as interest income to the extent of the market discount that accrued during the period such holder held such note. (For this purpose, a person disposing of a market discount note in a transaction other than a sale, exchange or involuntary conversion generally is treated as realizing an amount equal to the fair market value of the note.) A holder may also be required to recognize as ordinary income any principal payments with respect to a note to the extent such payments do not exceed the accrued market discount on the note. For these purposes, market discount generally equals the excess of the stated redemption price of the note over the tax basis of the note in the hands of the holder immediately after its acquisition. However, market discount is deemed not to exist if the market discount is less than a de minimis amount equal to 0.25% of the note's redemption price at maturity multiplied by the number of complete years to the note's maturity after the holder acquired the note (or, in the case of a holder that acquires a new note pursuant to the exchange offer, the old note exchanged for such new note). The market discount rules also provide that any holder of notes that were acquired at a market discount may be required to defer the deduction of a portion of the interest on any indebtedness incurred or maintained to acquire or carry the notes, until the notes are disposed of. A holder of a note acquired at a market discount may elect to include market discount in income as the discount accrues. In such a case, the foregoing rules with respect to the recognition of ordinary income on dispositions and with respect to the deferral of interest deductions on indebtedness related to such note would not apply. The current inclusion election applies to all market discount obligations acquired on or after the first day of the first taxable year to which the election applies, and may not be revoked without the consent of the IRS. AMORTIZABLE BOND PREMIUM. Generally, if the tax basis of an obligation held as a capital asset exceeds the amount payable at maturity of the obligation, such excess may constitute amortizable bond premium that the holder of such obligation may elect to amortize under the constant interest rate method and deduct over the period from the holder's acquisition date to the obligation's maturity date. A holder that elects to amortize bond premium must reduce its tax basis in the related obligation by the amount of the aggregate deductions allowable for the amortizable bond premium. Any election to amortize bond premium applies to all bonds (other than bonds the interest on which is excludible from gross income) held by the holder at the beginning of the first taxable year to which the election applies or thereafter acquired by the holder. The election may not be revoked without the consent of the IRS. In the case of an obligation, such as a note, that may be called at a premium prior to maturity, an earlier call date is treated as its maturity date, and the amount of bond premium is determined by treating the amount payable on such call date as the amount payable at maturity if such a calculation produces a smaller amortizable bond premium than any other call date or the method described in the preceding paragraph. For purposes of amortizing bond premium, if a holder of a note is required to amortize and deduct bond premium by reference to a call date, the note will be treated as maturing on such date for the amount payable, and, if not redeemed on such date, the note will be treated as reissued on such date for 141 the amount so payable. If a note purchased at a premium is redeemed pursuant to a call prior to such early call date or its maturity, a purchaser who has elected to deduct bond premium may deduct the excess of its adjusted tax basis in the note over the amount received on redemption (or, if greater, the amount payable on maturity) as an ordinary loss in the taxable year of redemption. The amortizable bond premium deduction is treated as a reduction of interest on the bond instead of as a deduction. The offset of amortizable bond premium against interest income on the bond occurs when income is taxable to a holder as received or accrued, in accordance with such holder's method of accounting for such income. BACKUP WITHHOLDING AND INFORMATION REPORTING. The Company will report to each U.S. holder and the IRS amounts paid on or with respect to the notes during each calendar year and the amount of tax, if any, withheld from such payments. Certain non-corporate U.S. holders of the notes (including all individuals) may be subject to backup withholding. In general, backup withholding will apply to a non-corporate U.S. holder if the U.S. holder: - fails to furnish its Taxpayer Identification Number, or TIN (which for an individual is the holder's Social Security number); - furnishes an incorrect TIN; - is notified by the IRS that it has failed to properly report payments of interest and dividends; or - under certain circumstances, fails to certify, under penalties of perjury, that it has furnished a correct TIN and has not been notified by the IRS that it is subject to backup withholding due to underreporting of interest or dividends, or otherwise fails to comply with applicable requirements of the backup withholding rules. Backup withholding will not apply if the non-corporate U.S. holder provides a properly completed IRS Form W-9 to the Company or the Company's paying agent. The amount of any backup withholding from a payment to a U.S. holder will be allowed as a credit against such U.S. holder's U.S. federal income tax liability and may entitle such U.S. holder to a refund. TAXATION OF NON-U.S. HOLDERS The following is a general discussion of the U.S. federal income and estate tax considerations relating to the ownership and disposition of the notes by a holder that is not a U.S. holder (a "non-U.S. holder"). For purposes of the following discussion, interest and gain on the sale, exchange or other disposition of the notes will be considered "U.S. trade or business income" if such income or gain (a) is effectively connected with the conduct of a trade or business in the United States, and (b) in the case of a resident of a country having the benefit of an income tax treaty or agreement between that country and the United States, is attributable to a permanent establishment in the United States, in each case of a particular non-U.S. holder. PAYMENT OF INTEREST ON NOTES. A non-U.S. holder will not be subject to U.S. federal income or withholding tax in respect of interest income on the notes if the interest qualifies for the so-called "portfolio interest exemption." This will be the case if each of the following requirements is satisfied: - The interest is not U.S. trade or business income. - The non-U.S. holder provides to the Company or the Company's paying agent the appropriate certification. - The non-U.S. holder does not actually or constructively own 10% or more of the Company's voting stock. 142 - The non-U.S. holder is not a controlled foreign corporation, within the meaning of the Code, that is actually or constructively related to the Company. The certification requirement can be satisfied in one of the following ways: - If the non-U.S. holder provides to the Company or the Company's paying agent a statement on IRS Form W-8BEN (or suitable substitute or successor form), together with all appropriate attachments, signed under penalties of perjury, identifying the non-U.S. holder and stating, among other things, that the non-U.S. holder is not a U.S. person. - If a note is held through a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business, (a) the non-U.S. holder provides such a form to the organization, bank or other institution and (b) the organization, bank or other institution, under penalties of perjury, certifies to the Company that it has received such statement from the beneficial owner or another intermediary and furnishes the Company or the Company's paying agent with a copy. Alternative documentation procedures may also be available for satisfying the certification requirement described above. For instance, under one such alternative, a withholding agent would be allowed to rely on an IRS Form W-8IMY (or suitable substitute or successor form), furnished by a financial institution or other intermediary on behalf of one or more beneficial owners or other intermediaries, without having to obtain from the beneficial owner the certificate described in the preceding paragraph, provided that the financial institution or intermediary has entered into a withholding agreement with the IRS and thus is a qualified intermediary. Under another alternative, an authorized non-U.S. agent of a U.S. withholding agent would be permitted to act on behalf of the U.S. withholding agent, provided specified conditions are met. With respect to the certification requirement for notes that are held by a non-U.S. partnership, the final regulations provide that unless the partnership has entered into a withholding agreement with the IRS, the partnership will be required, in addition to providing an intermediary Form W-8IMY, to attach an appropriate certification by each partner. Prospective holders, including non-U.S. partnerships and their partners, should consult their tax advisors regarding possible additional reporting requirements. If the portfolio interest exemption is not satisfied with respect to a non-U.S. holder, a 30% withholding tax will apply to interest income on the notes paid to such non-U.S. holder, unless one of the following two exceptions is satisfied: The first exception is that an applicable income tax treaty or agreement reduces or eliminates such tax, and a non-U.S. holder claiming the benefit of such treaty or agreement provides to the Company or the Company's paying agent a properly executed IRS Form W-8BEN (or suitable substitute or successor form). The second exception is that the interest is U.S. trade or business income and the non-U.S. holder provides an appropriate statement to that effect on an IRS Form W-8ECI (or suitable substitute or successor form). In the latter case, such non-U.S. holder generally will be subject to U.S. federal income tax with respect to all income from the notes in the same manner as U.S. holders, as described above. Additionally, in such event, non-U.S. holders that are corporations could be subject to a branch profits tax on such income at a rate of 30% (or at a reduced rate under an applicable income tax treaty or agreement). SALE, EXCHANGE OR RETIREMENT OF THE NOTES. A non-U.S. holder generally will not be subject to U.S. federal income tax (or withholding of U.S. federal withholding tax) in respect of gain realized upon the sale, exchange (other than an exchange pursuant to the exchange offer), redemption, retirement at maturity or other disposition of notes, unless (a) the gain is U.S. trade or business income or (b) the holder is an individual who is present in the United States for a period or periods aggregating 183 or more days in the taxable year of the disposition and certain other conditions are met. As described under "--Taxation of U.S. Holders--Payments upon Registration Default," the notes provide for the payment of additional interest upon a registration default. Non-U.S. holders should consult 143 their tax advisors as to the tax considerations relating to debt instruments providing for payments such as the additional interest, in particular as to the availability of the exemption for portfolio interest, and the ability of holders to claim the benefits of income tax treaty exemptions from U.S. withholding tax on interest, in respect of such additional interest. ESTATE TAX. Subject to applicable estate tax treaty regulations, notes held at the time of death (or theretofore transferred subject to certain retained rights or powers) by an individual who at the time of death is a non-U.S. holder will not be included in such holder's gross estate for U.S. federal estate tax purposes, provided that (a) the individual does not actually or constructively own 10% of more of the total combined voting power of all classes of stock of the Company entitled to vote and (b) the income on the notes is not effectively connected with the conduct of a U.S. trade or business by the individual. Recently enacted U.S. federal tax legislation provides for reductions in U.S. federal estate tax through 2009 and the elimination of such estate tax entirely in 2010. Under the legislation, such estate tax would be fully reinstated, as in effect prior to the reductions, in 2011. BACKUP WITHHOLDING AND INFORMATION REPORTING. The Company will report to each non-U.S. holder and the IRS amounts paid on or with respect to the notes during each calendar year and the amount of tax, if any, withheld from such payments. Copies of the information returns reporting such interest and withholding also may be made available to the tax authorities in the country in which a non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement. Certain non-U.S. holders of notes may be subject to backup withholding as described above under "--Taxation of U.S. Holders--Backup Withholding and Information Reporting." Treasury regulations provide that backup withholding and information reporting will not apply to payments on the notes by the Company to a non-U.S. holder if the non-U.S. holder certifies as to its status as a non-U.S. holder under penalties of perjury or otherwise establishes an exemption, provided that neither the Company nor the Company's paying agent has actual knowledge that the holder is a U.S. person or that any other conditions of the exemption are not, in fact, satisfied. Additional backup withholding and information reporting requirements with respect to the payment of the proceeds from the disposition of a note by a non-U.S. holder are as follows: - If the proceeds are paid to or through the U.S. office of a broker, they generally will be subject to backup withholding and information reporting. However, no such reporting and withholding is required if (a) the holder either certifies as to its status as a non-U.S. holder under penalties of perjury on an IRS Form W-8BEN, (or a suitable substitute or successor form) or otherwise establishes an exemption; and (b) the broker does not have actual knowledge that the holder is a U.S. person or that any other conditions of the exemption are not, in fact, satisfied. - If the proceeds are paid to or through a non-U.S. office of a broker that is not a U.S. person or a "U.S. related person," as defined below, they will not be subject to backup withholding or information reporting. - If the proceeds are paid to or through a non-U.S. office of a broker that is either a U.S. person or a U.S. related person, they generally will be subject to information reporting. However, no such reporting is required if (a) the holder certifies as to its status as a non-U.S. holder under penalties of perjury or the broker has certain documentary evidence in its files as to the non-U.S. holder's foreign status, and (b) the broker has no actual knowledge to the contrary. Backup withholding will generally not apply to payments of the proceeds made through a non-U.S. office of a U.S. person or a U.S. related person. For purposes of these provisions a "U.S. related person" is: - a controlled foreign corporation, within the meaning of the Code; 144 - a non-U.S. person 50% or more of whose gross income from all sources for the three-year period ending with the close of its taxable year preceding the payment, or, if shorter, for such part of the period that it has been in existence, is U.S. trade or business income; or - a non-U.S. partnership if at any time during its taxable year one or more of its partners are U.S. persons who, in the aggregate, hold more than 50% of the income or capital interests of the partnership or if, at any time during its taxable year, the partnership is engaged in the conduct of a U.S. trade or business. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a refund or a credit against such non-U.S. holder's U.S. federal income tax liability, provided that the required procedures are followed. PLAN OF DISTRIBUTION Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge and represent that it will deliver a prospectus in connection with any resale of such new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by certain broker-dealers (as specified in the registration rights agreement) in connection with resales of new notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period not to exceed 90 days after the expiration date, we will make this prospectus, as amended or supplemented available to any such broker-dealer for use in connection with any such resale. In addition, until , 2002, all dealers effecting transactions in the new notes may be required to deliver a prospectus. We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of new notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 90 days after the expiration date, we will send additional copies of this prospectus to certain broker-dealers (as specified in the registration rights agreement) that request such documents in the letter of transmittal. We have agreed to pay certain expenses incident to the exchange offer, and will indemnify holders of the notes (including broker-dealers) against certain liabilities, including liabilities under the Securities Act. LEGAL MATTERS The validity of the new notes offered hereby and the subsidiary guarantees will be passed upon for North American Van Lines by Debevoise & Plimpton, New York, New York, special New York counsel to North American Van Lines. Franci J. Blassberg, Esq., a member of Debevoise & Plimpton, is married to Joseph L. Rice III, who is a shareholder of the managing general partner of the general partner of Clayton, Dubilier & Rice Fund V Limited Partnership. 145 EXPERTS The financial statements of North American Van Lines as of December 31, 2001 and 2000, and for each of the three years ended December 31, 2001 included in this prospectus have been audited by PricewaterhouseCoopers LLP, independent auditors, as stated in their report herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The combined financial statements of NFC Moving Services Group for the year ended September 30, 1999 included in this prospectus has been audited by Ernst & Young, independent auditors, as set forth in their report appearing herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 146 INDEX TO FINANCIAL STATEMENTS
PAGE -------- NORTH AMERICAN VAN LINES, INC. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED): Condensed Consolidated Balance Sheets at March 31, 2002 and December 31, 2001 (unaudited)....................... F-2 Consolidated Statements of Operations for the three months ended March 31, 2002 and 2001 (unaudited)............... F-3 Consolidated Statement of Stockholder's Equity for the three months ended March 31, 2002 (unaudited)........... F-4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2002 and 2001 (unaudited)............................................. F-5 Notes to Condensed Consolidated Financial Statements (unaudited)............................................. F-6 NORTH AMERICAN VAN LINES, INC. CONSOLIDATED FINANCIAL STATEMENTS: Report of Independent Acountants.......................... F-16 Consolidated Balance Sheets at December 31, 2001 and 2000.................................................... F-17 Consolidated Statements of Operations for the years ended December 31, 2001 and 2000 and December 25, 1999........ F-19 Consolidated Statements of Changes in Stockholder's Equity for the years ended December 31, 2001 and 2000 and December 25, 1999....................................... F-20 Consolidated Statements of Cash Flows for the years ended December 31, 2001 and 2000 and December 25, 1999........ F-21 Notes to Consolidated Financial Statements................ F-22 NORTH AMERICAN VAN LINES, INC. SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS........................................ F-60 NFC MOVING SERVICES GROUP COMBINED FINANCIAL STATEMENTS: Report of Independent Auditors............................ F-61 Combined profit and loss accounts for the year ended September 30, 1999...................................... F-62 Combined statement of total recognized gains and losses for the year ended September 30, 1999................... F-63 Combined cash flow statement for the year ended September 30, 1999................................................ F-64 Notes to the combined financial statements................ F-66
F-1 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (1) BASIS OF PRESENTATION This report covers North American Van Lines, Inc. and its subsidiaries (the "Company"). On March 7, 2002, the Company's parent, Allied Worldwide, Inc., filed a certificate of amendment to its articles of incorporation with the State of Delaware effecting a change of its name from Allied Worldwide, Inc. to SIRVA, Inc. ("SIRVA"). The accompanying unaudited condensed consolidated financial statements should be read together with the Company's audited consolidated financial statements for the year ended December 31, 2001. Certain information and footnote disclosures normally included in the aforementioned financial statements prepared in accordance with generally accepted accounting principles are condensed or omitted. Management of the Company believes the interim financial statements include all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial condition and results of operations for the interim periods presented. On December 31, 2001, the Company and Moveline, Inc. ("Moveline") completed a merger under an agreement and plan of merger dated as of November 9, 2001, through a stock-for-stock merger of Moveline and a wholly owned subsidiary of the Company ("Merger") with such subsidiary as the surviving corporation. Immediately following the Merger, the Company contributed the surviving subsidiary to Allied Van Lines, Inc. ("AVL"), another wholly owned subsidiary of the Company. AVL and that subsidiary were merged, with AVL as the surviving entity. Prior to the Merger, Clayton, Dubilier and Rice Fund V Limited Partnership ("Fund V") was the primary stockholder of both Moveline and SIRVA. In accordance with the accounting rules for mergers of entities under common control, the Company's merger with Moveline has been accounted for in a manner similar to a pooling of interest since it was acquired from Fund V, the controlling shareholder of Moveline and SIRVA. The Company's consolidated financial statements have been restated to include the combined results of operations, financial position, and cash flows of Moveline since inception as though it has always been a part of the Company. Certain reclassifications have been made to the condensed consolidated financial statements for the prior periods presented to conform with the March 31, 2002 presentation. (2) GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets consisted of the following:
MARCH 31, 2002 DECEMBER 31, 2001 --------------- ------------------ Trade names, net............................... $165,670 $165,670 Goodwill, net.................................. 247,559 247,559 -------- -------- $413,229 $413,229 ======== ========
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but rather, be tested for impairment at lease annually. The company adopted the provisions of SFAS 142 effective January 1, 2002 F-6 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (2) GOODWILL AND INTANGIBLE ASSETS (CONTINUED) and has discontinued the amortization of goodwill and intangible assets with indefinite useful lives. The carrying amount of goodwill attributable to each reportable business segment was as follows:
MARCH 31, 2002 DECEMBER 31, 2001 --------------- ------------------ Van Line Network............................... $118,459 $118,459 Logistics Services............................. 13,604 13,604 Moving and Storage Services.................... 115,496 115,496 -------- -------- $247,559 $247,559 ======== ========
Trade names consist of the brand names northAmerican, Allied, Pickfords and Allied Pickfords. These intangible assets have been identified as having indefinite useful lives and were tested for impairment consistent with the provisions of SFAS 142. The Company completed such testing and determined that there was no impairment of intangible assets. The following represents a comparison of results for the three months ended March 31, 2002 with the three months ended March 31, 2001, adjusted to exclude amortization expense:
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 2002 MARCH 31, 2001 ------------------ ------------------ Net income (loss), as reported........... $(3,307) $ 4,915 Amortization of goodwill and trade names.................................. -- 2,762 Income tax provision..................... -- (1,105) ------- ------- Adjusted net income (loss)............... $(3,307) $ 6,572 ======= =======
(3) INCOME TAXES The Company's estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This is primarily due to (1) the non-deductibility of certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable income that is greater than income reported for financial statement purposes. F-7 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (4) LONG-TERM DEBT Long-term debt consisted of the following:
MARCH 31, 2002 DECEMBER 31, 2001 --------------- ------------------ Note payable--Tranche A........................ $124,709 $135,000 Note payable--Tranche B........................ 159,887 171,500 Senior Subordinated Notes...................... 150,000 150,000 Other.......................................... 1,208 868 -------- -------- Total debt..................................... 435,804 457,368 Less current maturities........................ 10,390 16,958 -------- -------- Total long-term debt........................... $425,414 $440,410 ======== ========
On March 28, 2002, the Company made a $21,904 prepayment of Tranche A and Tranche B debt due to excess cash flow, as defined in the credit agreement, in 2001. A total of $4,188 replaced principal payments due at that time, with the remaining $17,716 reducing future principal payments. (5) COMMITMENTS AND CONTINGENCIES (A) LITIGATION The Company and certain subsidiaries are defendants in numerous lawsuits relating principally to motor carrier operations. In the opinion of management, after consulting with its legal counsel, the amount of the Company's ultimate liability resulting from these matters will not materially affect the Company's financial position, results of operations or liquidity, however, such liability may be material to any given quarter. (B) ENVIRONMENTAL MATTERS The Company has been named as a potentially responsible party ("PRP") in two environmental cleanup proceedings by federal or state authorities and one additional environmental clean-up proceeding by a group of PRP's. The suits are brought under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, or other federal or state statutes. Based on all known information, it is estimated that the settlement cost of each PRP site would not be materially or significantly larger than the litigation reserves established, which totaled $35 as of March 31, 2002 and December 31, 2001, respectively. It is possible that additional claims or lawsuits involving now unidentified environmental sites may arise in the future. The Company owns or has owned and leases or has leased facilities at which underground storage tanks for diesel fuel are located and operated. Management believes that the Company has taken the appropriate and necessary action with regard to releases of diesel fuel that have occurred. Based on its assessment of the facts and circumstances now known and after consulting with its legal counsel, management believes that it has recorded appropriate estimates of liability for those environmental matters of which the Company is aware. Further, management believes it is unlikely that any identified matters, either individually or in aggregate, will have a material effect on the Company's financial position, F-8 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (5) COMMITMENTS AND CONTINGENCIES (CONTINUED) results of operations or liquidity. As conditions may exist on these properties related to environmental problems that are latent or undisclosed, there can be no assurance that the Company will not incur liabilities or costs, the amount of which cannot be estimated reliably at this time. (C) PURCHASE COMMITMENTS The Company has entered into certain purchase commitments primarily for trailers and software licenses in the amount of $8,201 and $9,844 as of March 31, 2002 and December 31, 2001, respectively. (6) OPERATING SEGMENTS The tables below represent information about revenues, income (loss) from operations and total assets by segment used by the chief decision-makers of the Company:
THREE MONTHS ENDED --------------------------------- MARCH 31, 2002 MARCH 31, 2001 --------------- --------------- Revenues Van Line Network.......................................... $235,616 $291,154 Logistics Services........................................ 114,881 140,771 Moving and Storage Services............................... 79,157 78,446 Corporate................................................. -- -- -------- -------- Consolidated revenues....................................... $429,654 $510,371 ======== ======== Income (loss) from operations Van Line Network.......................................... $ 3,052 $ (4,432) Logistics Services........................................ 871 (2,811) Moving and Storage Services............................... 2,301 2,883 Corporate................................................. -- -- -------- -------- Consolidated income (loss) from operations.................. $ 6,224 $ (4,360) ======== ========
AS OF ------------------------------------ MARCH 31, 2002 DECEMBER 31, 2001 --------------- ------------------ Total assets Van Line Network.......................................... $ 410,821 $ 441,296 Logistics Services........................................ 174,751 186,046 Moving and Storage Services............................... 412,261 416,634 Corporate................................................. 44,493 51,838 ---------- ---------- Consolidated total assets................................... $1,042,326 $1,095,814 ========== ==========
F-9 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (7) RESTRUCTURING The following table provides details of restructuring for the three months ended March 31, 2002:
RESTRUCTURING RESTRUCTURING ACCRUAL AS OF RESTRUCTURING ACCRUAL AS OF DECEMBER 31, 2001 CREDIT PAYMENTS MARCH 31, 2002 ------------------ ------------- -------- --------------- LOGISTICS PARTS CENTERS Severance cost............ $ 40 $ -- $ (30) $ 10 Building leases........... 2,117 (731) (254) 1,132 Asset impairment.......... 80 -- (61) 19 ------ ----- ----- ------ Total restructuring cost.................... $2,237 $(731) $(345) $1,161 ====== ===== ===== ======
In June 2001, the Company's Logistics Services operating segment established a program to exit the Parts Center business. The charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the Parts Center business by the end of 2001. Due to lease terms and severance agreements, certain payments will continue through September 2005. During the three months ended March 31, 2002, the restructuring accrual was reduced when the Company was able to sublease certain Parts Centers facilities sooner than originally estimated. (8) SUBSEQUENT EVENTS On April 12, 2002, the Company purchased the National Association of Independent Truckers ("NAIT"), a leading provider of insurance services to independent contract truck drivers, for $30,000 in cash, and a deferred amount of $3,000 payable subject to the completion of certain operating performance objectives during 2002 and 2003. NAIT is an association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical damage and non-trucking liability insurance, as well as access to a suite of professional services. The purchase price was funded from the sale of investments, existing cash balances and $20,000 of cash from the sale of 140,846 shares of SIRVA's common stock to Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton, Dubilier and Rice, Inc. ("Fund VI"), and an affiliate of Fund V, the controlling shareholder of SIRVA. On May 3, 2002, SIRVA purchased substantially all the assets of Cooperative Resource Services, Ltd., a business that provides comprehensive relocation services to companies and their employees, including home sale services, relocation logistics services and mortgage lending services. A wholly-owned subsidiary of the Company purchased all of such business' acquired assets other than assets relating to certain mortgage lending operations of the seller. The mortgage lending operations of the seller were purchased by a direct wholly-owned subsidiary of SIRVA. Subject to certain adjustments, the combined cash purchase price for the acquisitions was approximately $60,000, of which $3,500 was paid for the assets of the mortgage lending operations. Approximately $45,000 of the purchase price was paid in cash and $15,000 was paid in notes issued by the Company. In addition, certain liabilities relating to the acquired business were assumed in connection with the acquisition including $26,572 of indebtedness under a revolving credit facility used to fund the mortgage lending operations, which was assumed by the SIRVA acquisition F-10 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (8) SUBSEQUENT EVENTS (CONTINUED) subsidiary. The cash purchase price for the acquisition, as well as approximately $24,100 of other indebtedness of the acquired business that was refinanced as part of the acquisition, were financed with proceeds of $40,000 of cash from the sale of 281,691 shares of SIRVA's common stock to Fund VI and the incurrence of $50,000 additional senior indebtedness. (9) SUPPLEMENTAL INFORMATION The following summarized consolidating balance sheets, statements of operations and statements of cash flows were prepared to segregate such financial statements between those entities that have guaranteed the Company's senior subordinated notes ("Guarantor" entities) and those entities that did not guarantee such debt ("Non-Guarantor" entities). Consolidated condensed balance sheet data as of March 31, 2002 and December 31, 2001 is summarized as follows:
MARCH 31, 2002 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Current assets: Accounts and notes receivable, net... $ 94,048 $ 79,598 $ 59,600 $ (7,793) $ 225,453 Other current assets................. 37,249 24,534 43,080 (71) 104,792 -------- -------- -------- --------- ---------- Total current assets................... 131,297 104,132 102,680 (7,864) 330,245 -------- -------- -------- --------- ---------- Property and equipment, net............ 67,890 16,585 80,590 -- 165,065 Goodwill and intangible assets, net.... 409,994 3,235 -- -- 413,229 Other assets........................... 319,098 6,051 266,178 (457,540) 133,787 -------- -------- -------- --------- ---------- Total assets........................... $928,279 $130,003 $449,448 $(465,404) $1,042,326 ======== ======== ======== ========= ========== Current liabilities.................... $145,378 $111,055 $120,652 $ (4,417) $ 372,668 Long-term debt and capital lease obligations.......................... 433,395 229 7,901 -- 441,525 Other liabilities...................... 206,235 2,615 -- (99,136) 109,714 -------- -------- -------- --------- ---------- Total liabilities...................... 785,008 113,899 128,553 (103,553) 923,907 Stockholder's equity................... 143,274 16,104 320,892 (361,851) 118,419 -------- -------- -------- --------- ---------- Total liabilities and stockholder's equity............................... $928,282 $130,003 $449,445 $(465,404) $1,042,326 ======== ======== ======== ========= ==========
F-11 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (9) SUPPLEMENTAL INFORMATION (CONTINUED)
DECEMBER 31, 2001 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Current assets: Accounts and notes receivable, net... $118,345 $ 92,560 $ 63,795 $ (7,588) $ 267,112 Other current assets................. 43,935 21,701 44,619 (294) 109,961 -------- -------- -------- --------- ---------- Total current assets................... 162,280 114,261 108,414 (7,882) 377,073 -------- -------- -------- --------- ---------- Property and equipment, net............ 72,523 11,687 81,157 -- 165,367 Goodwill and intangible assets, net.... 409,993 3,236 -- -- 413,229 Other assets........................... 279,378 151,257 374,030 (664,520) 140,145 -------- -------- -------- --------- ---------- Total assets........................... $924,174 $280,441 $563,601 $(672,402) $1,095,814 ======== ======== ======== ========= ========== Current liabilities.................... $152,406 $138,820 $122,525 $ (8,454) $ 405,297 Long-term debt and capital lease obligations.......................... 448,225 226 8,325 -- 456,776 Other liabilities...................... 82,809 25,199 -- 3,943 111,951 -------- -------- -------- --------- ---------- Total liabilities...................... 683,440 164,245 130,850 (4,511) 974,024 Stockholder's equity................... 240,734 116,196 432,751 (667,891) 121,790 -------- -------- -------- --------- ---------- Total liabilities and stockholder's equity............................... $924,174 $280,441 $563,601 $(672,402) $1,095,814 ======== ======== ======== ========= ==========
F-12 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (9) SUPPLEMENTAL INFORMATION (CONTINUED) Consolidated condensed statements of operations data for the three months ended March 31, 2002 and 2001 are summarized as follows:
THREE MONTHS ENDED MARCH 31, 2002 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Operating revenues..................... $151,574 $30,910 $265,002 $(17,832) $429,654 Total operating expenses............... 151,637 32,107 257,518 (17,832) 423,430 -------- ------- -------- -------- -------- Income (loss) from operations.......... (63) (1,197) 7,484 -- 6,224 Non-operating income (expense) and minority interest.................... 1,101 -- (736) -- 365 -------- ------- -------- -------- -------- Income (loss) before interest, income taxes and accounting change.......... 1,038 (1,197) 6,748 -- 6,589 Interest expense (income).............. 11,675 36 (9,635) 10,500 12,576 -------- ------- -------- -------- -------- Income (loss) before income taxes and accounting change.................... (10,637) (1,233) 16,383 (10,500) (5,987) Provision (benefit) for income taxes... (5,721) 171 2,870 -- (2,680) -------- ------- -------- -------- -------- Net income (loss)...................... $ (4,916) $(1,404) $ 13,513 $(10,500) $ (3,307) ======== ======= ======== ======== ========
THREE MONTHS ENDED MARCH 31, 2001 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Operating revenues..................... $191,567 $38,759 $294,175 $(14,130) $510,371 Total operating expenses............... 198,253 38,332 292,343 (14,197) 514,731 -------- ------- -------- -------- -------- Income (loss) from operations.......... (6,686) 427 1,832 67 (4,360) Non-operating expense and minority interest............................. 7 137 48 -- 192 -------- ------- -------- -------- -------- Income (loss) before interest and income taxes......................... (6,693) 290 1,784 67 (4,552) Interest expense (income).............. 16,302 40 (11,077) 10,572 15,837 -------- ------- -------- -------- -------- Income (loss) before income taxes...... (22,995) 250 12,861 (10,505) (20,389) Provision (benefit) for income taxes... (26,971) 202 1,137 -- (25,632) -------- ------- -------- -------- -------- Income (loss) before accounting change............................... 3,976 48 11,724 (10,505) 5,243 Cumulative effect of accounting change, net of tax........................... -- -- (328) -- (328) -------- ------- -------- -------- -------- Net income (loss)...................... $ 3,976 $ 48 $ 11,396 $(10,505) $ 4,915 ======== ======= ======== ======== ========
F-13 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (9) SUPPLEMENTAL INFORMATION (CONTINUED) Consolidated condensed statements of cash flows data for the three months ended March 31, 2002 and 2001 are summarized as follows:
THREE MONTHS ENDED MARCH 31, 2002 ------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS CONSOLIDATED -------- ---------- ---------- ------------ Net cash provided by (used for) operating activities...................................... $ 13,296 $ 5,371 $ (2,609) $ 16,058 -------- ------- -------- -------- Cash flows from investing activities: Additions of property and equipment............. (2,326) (1,909) (4,350) (8,585) Proceeds from sale of property and equipment.... 65 147 21 233 Purchases of investments........................ -- -- (20,114) (20,114) Proceeds from maturity or sale of investments... -- -- 27,301 27,301 Other investing activites....................... (134) (199) -- (333) -------- ------- -------- -------- Net cash provided by (used for) investing activities...................................... (2,395) (1,961) 2,858 (1,498) -------- ------- -------- -------- Cash flows from financing activities: Borrowings (repayments) on revolving credit facility, net................................. 11,600 -- (365) 11,235 Change in balance of outstanding checks......... (3,874) (2,802) (2,909) (9,585) Principal payments on long-term debt............ (21,968) -- -- (21,968) Other financing activities...................... (269) -- (242) (511) -------- ------- -------- -------- Net cash provided by (used for) financing activities...................................... (14,511) (2,802) (3,516) (20,829) -------- ------- -------- -------- Effect of translation adjustment on cash.......... -- -- (204) (204) -------- ------- -------- -------- Net increase (decrease) in cash and cash equivalents..................................... (3,610) 608 (3,471) (6,473) Cash and cash equivalents at beginning of period.......................................... 5,687 4,054 22,378 32,119 -------- ------- -------- -------- Cash and cash equivalents at end of period........ $ 2,077 $ 4,662 $ 18,907 $ 25,646 ======== ======= ======== ========
F-14 NORTH AMERICAN VAN LINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2002 (DOLLARS IN THOUSANDS) (UNAUDITED) (9) SUPPLEMENTAL INFORMATION (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001 ------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS CONSOLIDATED -------- ---------- ---------- ------------ Net cash provided by (used for) operating activities....................................... $10,305 $(4,087) $ (939) $ 5,279 ------- ------- -------- -------- Cash flows from investing activities: Additions of property and equipment.............. (4,964) (735) (4,087) (9,786) Proceeds from sale of property and equipment..... 170 -- 1,312 1,482 Purchases of investments......................... -- -- (20,010) (20,010) Proceeds from maturity or sale of investments.... -- -- 24,798 24,798 Other investing activities....................... (301) -- -- (301) ------- ------- -------- -------- Net cash provided by (used for) investing activities....................................... (5,095) (735) 2,013 (3,817) ------- ------- -------- -------- Cash flows from financing activities: Repayments on revolving credit facility, net..... (506) -- -- (506) Change in balance of outstanding checks.......... (1,345) 8,015 (10,498) (3,828) Principal payments on long-term debt............. (2,950) -- -- (2,950) Other financing activities....................... (480) 137 -- (343) ------- ------- -------- -------- Net cash provided (used for) by financing activities....................................... (5,281) 8,152 (10,498) (7,627) ------- ------- -------- -------- Effect of translation adjustment on cash........... -- -- (178) (178) ------- ------- -------- -------- Net increase (decrease) in cash and cash equivalents...................................... (71) 3,330 (9,602) (6,343) Cash and cash equivalents at beginning of period... 2,027 12,519 28,963 43,509 ------- ------- -------- -------- Cash and cash equivalents at end of period......... $ 1,956 $15,849 $ 19,361 $ 37,166 ======= ======= ======== ========
- ------------------------ (1) Parent includes the accounts of North American Van Lines, Inc., a Delaware corporation and the issuer of the debt. (2) Total Guarantors include the accounts of the following subsidiaries of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc.; Fleet Insurance Management, Inc., an Indiana corporation; FrontRunner Worldwide, Inc., a Delaware corporation; NACAL, Inc., a California corporation; NAVTRANS International Freight Forwarding, Inc., an Indiana corporation; Federal Traffic Services, Inc., an Indiana corporation; North American Logistics. Ltd., an Indiana corporation; North American Van Lines of Texas, Inc., a Texas corporation; Relocation Management Systems, Inc., a Delaware corporation; Great Falls North American, Inc., a Montana corporation; Allied Van Lines, Inc., a Delaware corporation; Allied International N.A., Inc. a Delaware corporation; A Relocation Solutions Management Company, Inc., a Delaware corporation; Vanguard Insurance Agency, Inc., an Illinois corporation; Allied Van Lines Terminal Company, Inc., a Delaware corporation; Meridian Mobility Resources, Inc., a Delaware corporation; Allied Transporation Forwarding, Inc., an Illinois corporation; and Allied Freight Forwarding, Inc., a Delaware corporation. Each Guarantor is a wholly owned subsidiary of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc. and will jointly and severally, irrevocably and fully and unconditionally guarantee the punctual payment of such debt used in connection with the Allied acquisition. F-15 REPORT OF INDEPENDENT ACCOUNTANTS The Board of Directors Allied Worldwide, Inc.: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' equity and cash flows present fairly, in all material respects, the financial position of North American Van Lines, Inc. and its subsidiaries at December 31, 2001 and December 31, 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, the accompanying financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements, are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. [LOGO] Chicago, Illinois March 4, 2002 F-16 NORTH AMERICAN VAN LINES, INC. CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS)
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- ASSETS Current assets: Cash and cash equivalents................................. $ 32,119 $ 43,509 Short-term investments.................................... 5,984 3,378 Accounts and notes receivable, net of allowance for doubtful accounts of $24,386 and $26,721, respectively............................................ 267,112 377,965 Current portion of contracts receivable, net of valuation allowance of $367 and $255, respectively................ 7,080 9,438 Supplies inventory........................................ 7,980 8,280 Resale equipment inventory................................ 3,373 8,530 Prepaid expenses and other current assets................. 13,872 12,029 Deferred income taxes..................................... 37,051 38,719 Federal income tax recoverable............................ 2,502 1,126 ---------- ---------- Total current assets........................................ 377,073 502,974 ---------- ---------- Long-term portion of contracts receivable................... 10,187 17,407 Long-term portion of notes receivable....................... 1,601 3,210 Investments................................................. 60,267 56,116 Property and equipment, net................................. 165,367 158,651 Deferred agent contract costs............................... 13,526 16,813 Goodwill and intangible assets, net......................... 413,229 410,257 Other assets................................................ 54,564 51,174 ---------- ---------- Total long-term assets...................................... 718,741 713,628 ---------- ---------- Total assets................................................ $1,095,814 $1,216,602 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. F-17 NORTH AMERICAN VAN LINES, INC. CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS EXCEPT SHARE DATA)
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Current portion of long-term debt......................... $ 16,958 $ 11,800 Current portion of capital lease obligations.............. 4,006 2,009 Revolving credit facility................................. 47,235 85,261 Accounts payable.......................................... 61,009 71,679 Outstanding checks........................................ 26,575 30,761 Accrued transportation expense............................ 66,532 100,956 Deferred credits.......................................... 25,084 20,679 Compensation and benefits................................. 22,137 29,092 Other current liabilities................................. 54,854 57,776 Insurance reserves and accruals........................... 78,622 75,626 Accrued income tax payable................................ 2,285 3,652 ---------- ---------- Total current liabilities................................... 405,297 489,291 ---------- ---------- Long-term debt............................................ 440,410 456,721 Capital lease obligations................................. 16,366 6,798 Insurance reserves and accruals........................... 6,985 8,973 Accrued compensation and benefits......................... 36,737 32,273 Due to Allied Worldwide, Inc.............................. 38,515 38,265 Deferred income taxes..................................... 29,714 38,470 ---------- ---------- Total long-term liabilities................................. 568,727 581,500 ---------- ---------- Total liabilities........................................... 974,024 1,070,791 ---------- ---------- Commitments and contingencies Minority interest........................................... -- 727 Stockholder's equity: Common stock, $.01 par value, 1,000 shares authorized, issued and outstanding at December 31, 2001 and 2000, respectively............................................ -- -- Additional paid-in-capital................................ 188,950 188,950 Accumulated other comprehensive loss...................... (17,988) (5,641) Accumulated deficit....................................... (49,172) (38,225) ---------- ---------- Total stockholder's equity.................................. 121,790 145,084 ---------- ---------- Total liabilities and stockholder's equity.................. $1,095,814 $1,216,602 ========== ==========
The accompanying notes are an integral part of the consolidated financial statements. F-18 NORTH AMERICAN VAN LINES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 AND DECEMBER 25, 1999 (DOLLARS IN THOUSANDS)
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ----------------- ----------------- ----------------- Operating revenues........................... $2,249,303 $2,378,694 $1,159,787 Operating expenses: Purchased transportation expense........... 1,439,279 1,560,317 732,560 Other direct transportation expense........ 373,089 371,765 186,538 ---------- ---------- ---------- Total direct expenses........................ 1,812,368 1,932,082 919,098 Gross margin................................. 436,935 446,612 240,689 Insurance and claims....................... 52,829 61,469 37,307 Other indirect expense..................... 9,786 12,907 8,949 ---------- ---------- ---------- Total indirect expenses...................... 62,615 74,376 46,256 General and administrative expense......... 305,229 306,584 183,325 Goodwill amortization...................... 10,906 10,948 3,126 Restructuring and other unusual charge..... 4,883 4,859 9,099 ---------- ---------- ---------- Income (loss) from operations............ 53,302 49,845 (1,117) Non-operating income (expense) and minority interest................................... (51) 318 (468) ---------- ---------- ---------- Income (loss) before interest, income taxes, extraordinary item and cumulative effect of accounting change................ 53,251 50,163 (1,585) Interest expense............................. 62,001 67,251 21,409 ---------- ---------- ---------- Loss before income taxes, extraordinary item and cumulative effect of accounting change..................................... (8,750) (17,088) (22,994) Provision (benefit) for income taxes......... 1,869 (9) (6,447) ---------- ---------- ---------- Loss before extraordinary item and cumulative effect of accounting change..... (10,619) (17,079) (16,547) Extraordinary loss on debt extinguishment, net of tax................................. -- -- (3,387) ---------- ---------- ---------- Loss before cumulative effect of accounting change..................................... (10,619) (17,079) (19,934) Cumulative effect of accounting change, net of tax..................................... (328) -- -- ---------- ---------- ---------- Net loss................................... $ (10,947) $ (17,079) $ (19,934) ========== ========== ==========
See accompanying notes to condensed consolidated financial statements. F-19 NORTH AMERICAN VAN LINES, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 AND DECEMBER 25, 1999 (DOLLARS IN THOUSANDS)
ACCUMULATED OTHER ACCUMULATED COMPREHENSIVE COMMON ADDITIONAL TOTAL DEFICIT INCOME (LOSS) STOCK PAID-IN-CAPITAL -------- ----------- ------------- --------- --------------- Balance at December 26, 1998................. $ 63,650 $ (1,212) $ (138) $ -- $ 65,000 -------- -------- -------- --------- -------- Capital contribution from parent............. 123,950 123,950 Comprehensive income (loss): Net loss................................... (19,934) (19,934) Net change in unrealized holding gain on available-for-sale securities.............. 288 288 Minimum pension liability.................. (111) (111) Foreign currency translation adjustment.... (175) (175) -------- -------- -------- --------- -------- Total comprehensive loss..................... (19,932) -------- -------- -------- --------- -------- Balance at December 25, 1999................. 167,668 (21,146) (136) -- 188,950 -------- -------- -------- --------- -------- Comprehensive income (loss): Net loss................................... (17,079) (17,079) Net change in unrealized holding gain on available-for-sale securities, net of tax of $308.................................... 3 3 Minimum pension liability, net of tax benefit of $(223).......................... (224) (224) Foreign currency translation adjustment, net of tax benefit of $(3,846)............. (5,284) (5,284) -------- -------- -------- --------- -------- Total comprehensive loss..................... (22,584) -------- -------- -------- --------- -------- Balance at December 31, 2000................. 145,084 (38,225) (5,641) -- 188,950 -------- -------- -------- --------- -------- Comprehensive income (loss): Net loss..................................... (10,947) (10,947) Derivative transactions: Cumulative effect of accounting change, net of tax of $219............................. 328 328 Unrealized hedging loss, net of tax benefit of $(1,551)................................ (2,326) (2,326) Net change in unrealized holding loss on available-for-sale securities, net of tax benefit of $(104).......................... (157) (157) Minimum pension liability, net of tax benefit of $(5,424)................................ (8,136) (8,136) Foreign currency translation adjustment, net of tax benefit of $(1,371)................. (2,056) (2,056) -------- -------- -------- --------- -------- Total comprehensive loss..................... (23,294) -------- -------- -------- --------- -------- Balance at December 31, 2001................. $121,790 $(49,172) $(17,988) $ -- $188,950 ======== ======== ======== ========= ========
The accompanying notes are an integral part of the consolidated financial statements. F-20 NORTH AMERICAN VAN LINES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 AND DECEMBER 25, 1999 (DOLLARS IN THOUSANDS)
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 25, 2001 2000 1999 -------------- -------------- -------------- Cash flows from operating activities: Net loss before extraordinary item and cumulative effect of accounting change.................................... $(10,619) $(17,079) $(16,547) Adjustments to reconcile net loss to net cash provided by operating activities: Cumulative effect of accounting change.................... (328) -- -- Extraordinary item........................................ -- -- (3,387) Depreciation.............................................. 33,536 38,021 25,591 Amortization.............................................. 17,706 18,388 12,373 Provision for losses on accounts and notes receivable..... 959 3,425 724 Deferred income taxes..................................... (7,088) (25,387) (3,136) (Gain)/loss on sale of property and equipment, net........ 1,053 (6,144) 115 Loss on sale of subsidiary................................ -- -- 200 Change in operating assets and liabilities, net of effect of acquisition: Accounts and notes receivable........................... 97,893 (66,476) (12,606) Contracts receivable.................................... 9,577 12,776 (8,072) Prepaid expenses and other current assets............... 11,893 7,114 (12,641) Federal income tax recoverable.......................... (1,376) 4,548 (5,674) Accounts payable........................................ (10,372) 9,415 15,709 Other current liabilities............................... (43,639) 38,088 (619) Insurance reserves and accruals......................... 1,008 8,045 12,034 Accrued income taxes payable............................ (1,368) (23) (673) Other long-term assets and liabilities.................. 12,488 28,102 8,196 -------- -------- -------- Net cash provided by operating activities................... 111,323 52,813 11,587 -------- -------- -------- Cash flows from investing activities: Additions of property and equipment....................... (48,348) (55,377) (12,727) Proceeds from sale of property and equipment.............. 3,477 15,592 3,451 Purchases of available-for-sale securities................ (86,660) (55,347) (4,047) Purchases of held-to-maturity securities.................. (645) (594) -- Proceeds from sale of available-for-sale securities....... 81,305 49,353 2,083 Proceeds from maturity of held-to-maturity securities..... 600 -- 500 Payment of agent contract costs........................... (1,371) (2,233) (1,825) Acquisitions, net of cash acquired........................ (4,000) (5,780) (396,371) Settlement of acquisition purchase price dispute.......... (17,357) -- -- -------- -------- -------- Net cash used for investing activities...................... (72,999) (54,386) (408,936) -------- -------- -------- Cash flows from financing activities: Debt issuance costs....................................... -- -- (19,208) Borrowings (repayments) on revolving credit facility and notes payable, net........................................ (37,943) 18,514 41,929 Change in balance of outstanding checks................... (4,082) 10,166 2,578 Borrowings on long-term debt.............................. 672 -- 475,000 Sale of equipment note receivable......................... 6,317 11,121 -- Principal payments on long-term debt...................... (11,833) (6,811) (143,018) Principal payments under capital lease obligations........ (2,482) (4,406) (87) Payment for transfer of insurance liabilities............. -- (6,672) (10,865) Proceeds from capital contribution from parent............ -- -- 73,950 Minority interest......................................... (243) (99) 326 -------- -------- -------- Net cash (used for) provided by financing activities........ (49,594) 21,813 420,605 -------- -------- -------- Effect of translation adjustments on cash................... (120) (1,886) (175) -------- -------- -------- Net increase (decrease) in cash and cash equivalents........ (11,390) 18,354 23,081 Cash and cash equivalents at beginning of period............ 43,509 25,155 2,074 -------- -------- -------- Cash and cash equivalents at end of period.................. $ 32,119 $ 43,509 $ 25,155 ======== ======== ======== Supplemental disclosure of cash flow information -- cash paid during the years ended December 31, 2001 and 2000 and December 25, 1999: Interest.................................................. $ 56,649 $ 64,892 $ 13,013 Income taxes.............................................. $ 3,159 $ 4,697 $ 672
The accompanying notes are an integral part of the consolidated financial statements. F-21 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) ORGANIZATION AND BUSINESS DESCRIPTION On March 29, 1998, Allied Worldwide, Inc. ("Allied Worldwide") acquired all of the capital stock of North American Van Lines, Inc. (the "Company") from Norfolk Southern Corporation ("NS") and J.P. Morgan Ventures Corporation (the "1998 Acquisition"). Allied Worldwide was formed by Clayton, Dubilier and Rice Fund V Limited Partnership ("Fund V"), a private investment fund that is managed by Clayton, Dubilier and Rice, Inc. ("CD&R"). The Company is a wholly-owned subsidiary of Allied Worldwide. The 1998 Acquisition was accounted for as a purchase and resulted in a new basis of accounting for the Company, based upon the purchase of Allied Worldwide. On November 19, 1999, the Company completed the acquisition of NFC Moving Services Group (the "Allied Acquisition", see Note 2) and now operates as a global services provider under the brand names of North American Van Lines, Global Van Lines, Allied Van Lines, Pickfords and Allied Pickfords with operations located throughout the United States, Canada, portions of Europe, the United Kingdom and Australia, New Zealand and other Asia/Pacific locations. The Company conducts its U.S. and Canadian operations primarily through a network of exclusive agents with approximately 1,300 locations in the U.S. and Canada and nearly 600 affiliated representatives on an international basis. The Company conducts its other foreign business primarily through units which it owns and operates directly, using selected other affiliated representatives to complete its service offering on a worldwide basis. The Company is not dependent on any single or major group of customers or suppliers for its operating revenues. The Company has wholly-owned subsidiaries which operate as multiple-line property and commercial liability insurance companies under the provisions of the insurance laws of the State of Illinois and the country of Ireland and insure owner-operators, agents of the Company and various other parties in the transportation industry against loss from certain risks, primarily cargo warehousing, commercial auto physical damage, commercial auto liability and general liability. (B) BASIS OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. During the fourth quarter 2001, the Company purchased the remaining 49% of a limited liability company, Manufacturing Support Services, LLC, ("MSS LLC") that it did not already own for $4,000. Prior to the purchase, the results of MSS LLC and related minority interest were reflected in the consolidated financial statements of the Company. (C) CASH EQUIVALENTS Cash equivalents are highly liquid investments purchased three months or less from original maturity. (D) CONTRACTS RECEIVABLE AND RESALE EQUIPMENT INVENTORY In the normal course of business, the Company sells tractors, trailers and other equipment ("resale equipment inventory") to its agents and to owner-operators under conditional sales agreements F-22 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ("contracts receivable"). Sales of equipment are financed by the Company, generally over a four-year period. Resale equipment inventory is recorded at the lower of cost or net realizable value. (E) SUPPLIES INVENTORY Supplies inventory consists of pallets, blanket stock, crates, replacement and repair parts and tires and is valued at the lower of cost, determined using a first-in, first-out method, or market. (F) INVESTMENTS Investments consist of U.S. Treasury and corporate debt securities and joint ventures. Investments are classified as current or noncurrent based on their maturities and/or the Company's expectations of sales and redemptions in the following year. Interest and dividends on debt and equity securities are included in income as earned. The Company classifies its debt securities in one of two categories: available-for-sale or held-to-maturity. Held-to-maturity securities are those securities in which the Company has the ability and intent to hold the securities until maturity. All other securities are classified as available-for-sale. Available-for-sale securities are recorded at fair value. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis. (G) PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful lives used in computing depreciation are summarized as follows:
USEFUL LIFE -------------- Buildings and improvements.................................. 20 to 40 years Transportation equipment.................................... 4 to 15 years Warehouse equipment......................................... 5 to 10 years Computer equipment and software............................. 3 to 5 years Other....................................................... 1 to 10 years
Transportation equipment includes tractors, straight trucks, trailers, van equipment, containers and satellite-communication equipment. Salvage values are only calculated on tractors, straight trucks and trailers. Leased property and equipment meeting certain criteria is capitalized and the present value of the related lease payments is recorded as a liability. Depreciation of capitalized leased assets is computed on a straight-line basis over the term of the lease. F-23 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The amount of internally developed software, representing primarily the cost of independent contractor developed software, that was capitalized during the years ended December 31, 2001 and 2000 was $10,370 and $5,675, respectively, and is included in computer equipment and software. The amount of capitalized interest related to internally developed software at December 31, 2001 and 2000 was $578 and $183, respectively. Amortization of capitalized software costs for the years ended December 31, 2001 and 2000 and December 25, 1999 was $2,513, $482 and $244, respectively. Repairs and maintenance expenditures are charged to expenses as incurred. (H) INTANGIBLE ASSETS Intangible assets consist of trade names and goodwill. Trade names and goodwill are primarily amortized on a straight-line basis over their estimated lives of 40 years. (I) LONG-LIVED ASSETS In accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of" ("SFAS 121"), long-lived assets held and used by the Company, including intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows of the assets. (J) DEFERRED AGENT CONTRACT COSTS Deferred agent contract costs are payments made to certain agents for entering into long-term contracts with the Company. These payments are capitalized and amortized over the lives of the related contracts, which generally range from 3 to 10 years. (K) DEFERRED CREDITS Included in deferred credits are unearned premiums related to the Company's insurance business. Policies are issued and income is recognized over the life of the policy, generally 12 months. (L) INSURANCE RESERVES AND ACCRUALS Concurrent with the 1998 Acquisition, the Company transferred its casualty and workers' compensation liabilities for claims incurred in 1997 and prior to American International Group for $38,600 payable in installments over a three-year period. At the same time the Company purchased first dollar coverage for principally all insurable business risks except cargo damage and delay claims. The Company estimates costs relating to cargo damage and delay claims based on actuarial methods. (M) REVENUE RECOGNITION The Company recognizes estimated gross revenue to be invoiced to the transportation customer and all related transportation expenses on the date a shipment is delivered or services are completed. The F-24 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) estimate of revenue remains in a receivable account called Delivered Not Processed ("DNP") until the customer is invoiced. Concurrent with the DNP estimate, the Company recognizes an accrual for Purchased Transportation Expenses ("PTE") to account for the estimated costs of packing services, transportation expenses and other such costs associated with the service delivery. The estimate for PTE is not reversed until the Company receives actual charges. (N) FOREIGN CURRENCY TRANSLATION A majority of the Company's foreign operations use the local currency as their functional currency. Assets and liabilities of these operations are translated to U.S. dollars at the exchange rates in effect on the balance sheet date. Income statement items are translated at the average exchange rate. The impact of currency fluctuation is included in stockholder's equity as a component of accumulated other comprehensive income. (O) INCOME TAXES The Company follows Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax laws and tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In addition, the amounts of any future tax benefits are reduced by a valuation allowance to the extent such benefits are not expected to be realized on a more likely than not basis. (P) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the areas where estimation is significant are as follows: (a) DNP is the estimated revenue associated with shipments delivered or services completed and not invoiced; (b) PTE is the associated purchased transportation expense that is estimated corresponding to the DNP revenue; (c) accounts and notes receivable reserves for doubtful accounts are estimated based on historical write-off data to establish the uncollectible portion of the receivables; (d) costs relating to cargo damage and delay claims are estimated based on actuarial methods; and (e) the Company's insurance subsidiaries utilize third party actuaries to estimate insurance reserves. (Q) ACCOUNTING CHANGE Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended, ("SFAS 133"), which resulted in a change in method of accounting. The cumulative effect of this accounting change was a F-25 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) loss of $547 ($328, net of tax). SFAS 133 established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires recognition of all derivatives as either assets or liabilities on the balance sheet and the measurement of those instruments at fair value. Changes in the fair value of derivatives will be recorded in each period in earnings or accumulated other comprehensive income ("OCI"), depending upon whether a derivative is designated and is effective as part of a hedge transaction and, if it is, the type of hedge transaction. If the derivative is designated and is effective as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded in OCI and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions are recognized in earnings. (R) RECENT ACCOUNTING PRONOUNCEMENTS In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 141, "Business Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") that supersede Accounting Principles Board (APB) Opinion No. 16, "Business Combinations", and APB Opinion No. 17, "Intangible Assets". The two statements modify the method of accounting for business combinations and address the accounting and reporting for goodwill and intangible assets. SFAS 141 is effective for all business combinations initiated after June 30, 2001 and all business combinations accounted for by the purchase method for which the date of acquisition is after June 30, 2001. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. Beginning in fiscal year 2002, the company will no longer amortize goodwill on a straight-line basis, but will instead evaluate goodwill for impairment annually and amortization of approximately $10,900 on an annualized basis will cease. The adoption of SFAS 141 did not have a material effect on the Company's operating results or financial condition. The Company is currently assessing the impact of SFAS 142 on its operating results and financial condition. In August 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), superseding SFAS 121, effective for fiscal years beginning after December 15, 2001. The provisions of SFAS 144 are for long-lived assets to be disposed of by sale or otherwise are effective for disposal activities initiated by an entity's commitment to a plan after the initial date of adoption of SFAS 144. The Company is currently assessing the impact of SFAS 144 on its operating results and financial condition. (S) RECLASSIFICATIONS Certain reclassifications have been made to the consolidated financial statements for the prior periods presented to conform with the December 31, 2001 presentation. (T) YEAR-END The Company changed its year-end effective 2000 to December 31. Prior to 2000, the fiscal year ended on the Saturday nearest to December 31 each year. F-26 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (2) ALLIED ACQUISITION AND ARBITRATION SETTLEMENT On November 19, 1999, the Company completed the Allied Acquisition from Exel plc, formerly NFC plc ("Seller"), for $450,000 (subject to purchase price adjustment). The Allied Acquisition was funded through borrowings under new credit facilities of $390,000, proceeds from the issuance of $150,000 of Company senior subordinated notes and a capital contribution of $123,950 from Allied Worldwide consisting of cash of $73,950 and $50,000 (non-cash) of ownership in Allied Worldwide. The terms of the acquisition provided for an adjustment to the purchase price pertaining to the amount of net controllable assets acquired as of the date of the Allied Acquisition as determined by the Company and Seller. The Company and Seller were unable to negotiate the final amount of net controllable assets acquired, therefore, per the terms of the acquisition agreement, a third party arbitrator was engaged for resolution of that amount. On September 12, 2001, the third party arbitrator rendered a binding determination to the Company and Seller. The arbitrator increased the net controllable assets and purchase price as estimated in the acquisition agreement by $18,087. Interest expense on the purchase price adjustment of $3,250 was paid for the period from the acquisition date to the date when the Company made payment. The acquisition agreement also contained indemnifications by the Seller for certain tax payments made by the Company on behalf of the Seller. These tax payments plus associated interest totaled $3,980 and were netted against the purchase price adjustment. Cash payment by the Company to the Seller on October 19, 2001, for the net purchase price adjustment totaled $17,357. The purchase price adjustment resulted in an adjustment to goodwill of $18,087. (3) INVESTMENTS Investments consisted primarily of debt and equity securities held by the Company's insurance subsidiaries. These marketable investment securities included:
DECEMBER 31, 2001 DECEMBER 31, 2000 ---------------------------------------------- ---------------------------------------------- UNREALIZED UNREALIZED UNREALIZED UNREALIZED FAIR AMORTIZED HOLDING HOLDING FAIR AMORTIZED HOLDING HOLDING VALUE COST GAINS LOSSES VALUE COST GAINS LOSSES -------- --------- ---------- ---------- -------- --------- ---------- ---------- Current Available-for-sale..... $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- Held-to-maturity....... 5,984 5,984 -- -- 3,375 3,378 -- (3) ------- ------- ------ ------- ------- ------- ------ ------- Total current............ $ 5,984 $ 5,984 $ -- $ -- $ 3,375 $ 3,378 $ -- $ (3) ======= ======= ====== ======= ======= ======= ====== ======= Noncurrent Available-for-sale..... $56,122 $55,065 $2,256 $(1,199) $52,351 $51,580 $1,796 $(1,025) Held-to-maturity....... 4,391 4,144 247 -- 3,724 3,557 167 -- ------- ------- ------ ------- ------- ------- ------ ------- Total noncurrent......... $60,513 $59,209 $2,503 $(1,199) $56,075 $55,137 $1,963 $(1,025) ======= ======= ====== ======= ======= ======= ====== =======
F-27 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (3) INVESTMENTS (CONTINUED) The Company holds investments in certain debt securities with the following aggregate maturities as of December 31, 2001:
HELD-TO-MATURITY AVAILABLE-FOR-SALE YEAR COST FAIR VALUE - ---- ---------------- ------------------ 2002................................................... $ 5,984 $ 100 2003-2007.............................................. 4,144 9,220 2008-2012.............................................. -- 7,404 Thereafter............................................. -- 28,224 ------- ------- $10,128 $44,948 ======= =======
Marketable securities are exposed to various risks and rewards, such as interest rate, market and credit risk. Due to these risks and rewards associated with marketable securities, it is possible that changes in the values of marketable securities may occur and that such changes could affect the amounts reported on the balance sheet. Investments included noncurrent investments in joint ventures of $1 and $208 at December 31, 2001 and 2000, respectively. (4) PROPERTY AND EQUIPMENT Property and equipment consisted of the following:
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Land................................................ $ 2,385 $ 2,517 Buildings and improvements.......................... 40,289 45,704 Transportation equipment............................ 91,538 79,000 Warehouse equipment................................. 50,431 38,200 Computer equipment and software..................... 62,563 46,127 Internally developed software in progress........... 25,230 20,045 Other............................................... 7,627 7,809 -------- -------- 280,063 239,402 Less accumulated depreciation....................... 114,696 80,751 -------- -------- $165,367 $158,651 ======== ========
F-28 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (5) GOODWILL AND INTANGIBLE ASSETS Goodwill and intangible assets included the following:
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Trade names......................................... $178,100 $178,100 Goodwill............................................ 261,637 247,959 Accumulated amortization............................ (26,508) (15,802) -------- -------- $413,229 $410,257 ======== ========
(6) OTHER ASSETS Other assets consisted of the following:
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Deferred debt issuance costs, net................... $15,361 $17,858 Prepaid pension..................................... 8,477 8,465 Cash surrender value of life insurance.............. 4,781 4,576 Deposits............................................ 1,634 1,551 Receivable from Allied Worldwide, Inc............... 23,268 18,567 Other............................................... 1,043 157 ------- ------- $54,564 $51,174 ======= =======
(7) OTHER CURRENT LIABILITIES Other current liabilities consisted of the following:
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Accrued sales and fuel taxes........................ $11,542 $ 7,325 Accrued interest.................................... 3,516 6,590 Accrued customer discounts.......................... 7,546 7,874 Accrued restructuring expense....................... 2,237 1,961 Interest swap agreement liability................... 3,959 -- Escheat liability................................... 2,199 1,378 Accrued agent incentives............................ 2,852 3,980 Accrued other....................................... 21,003 28,668 ------- ------- $54,854 $57,776 ======= =======
F-29 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (8) INCOME TAXES (A) PROVISION (BENEFIT) FOR INCOME TAXES The Company and its wholly owned domestic subsidiaries file a consolidated federal income tax return along with its parent company, with the exception of Moveline (see Note 21). Moveline filed a separate consolidated return for 2000 and expects to file a separate consolidated return in 2001. The components of loss before income taxes, extraordinary item and cumulative effect of accounting change are:
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ----------------- ----------------- ----------------- U.S. operations...................... $(33,511) $(31,896) $(22,364) Foreign operations................... 24,761 14,808 (630) -------- -------- -------- $ (8,750) $(17,088) $(22,994) ======== ======== ========
The provision (benefit) for income taxes includes:
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31,2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ---------------- ----------------- ----------------- Current: Federal............................ $(3,425) $1,332 $(4,579) Foreign............................ 6,225 3,596 1,482 State.............................. 938 669 (414) ------- ------ ------- Total current taxes.................. 3,738 5,597 (3,511) Deferred: Federal............................ (1,380) (5,518) (2,094) Foreign............................ 2,613 847 (376) State.............................. (3,102) (935) (466) ------- ------ ------- Total deferred taxes................. (1,869) (5,606) (2,936) ------- ------ ------- Provision (benefit) for income taxes.............................. $ 1,869 $ (9) $(6,447) ======= ====== =======
F-30 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (8) INCOME TAXES (CONTINUED) (B) RECONCILIATION OF STATUTORY RATE TO EFFECTIVE RATE Total income taxes as reflected in the Consolidated Statements of Operations differ from the amounts computed by applying the statutory federal corporate tax rate as follows:
YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ----------------- ----------------- ----------------- Federal income tax at statutory rate............................... $(3,063) $(5,981) $(8,048) State income taxes, net of federal tax benefit........................ (1,407) (173) (572) Foreign income taxes................. 3,066 3,747 479 Intangibles amortization............. 2,161 2,102 1,205 Other--net........................... 1,112 296 489 ------- ------- ------- Provision (benefit) for income taxes.............................. $ 1,869 $ (9) $(6,447) ======= ======= =======
(C) DEFERRED TAX ASSETS AND LIABILITIES Deferred taxes related to the following:
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Deferred tax assets: Property and equipment............................ $ 1,089 $ 2,919 Reserves, including casualty and other claims..... 32,640 35,474 Employee benefits................................. 7,239 8,555 Taxes other than income taxes..................... 2,039 2,034 Postretirement benefits other than pensions....... 9,417 8,429 Net operating loss carryforwards.................. 19,684 3,247 Pension obligation................................ 4,432 -- Unrealized gains and other........................ 7,337 8,396 -------- -------- Total gross deferred tax assets..................... 83,877 69,054 Less valuation allowance............................ (211) (120) -------- -------- Net deferred tax asset.............................. 83,666 68,934 -------- -------- Deferred tax liabilities: Foreign earnings.................................. 5,048 2,741 Property and equipment............................ 4,291 1,346 State income taxes................................ 2,196 683 Intangibles....................................... 64,794 63,915 -------- -------- Total gross deferred tax liabilities................ 76,329 68,685 -------- -------- Net deferred tax assets............................. 7,337 249 Less net current deferred tax assets................ 37,051 38,719 -------- -------- Net long-term deferred tax liability................ $(29,714) $(38,470) ======== ========
F-31 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (8) INCOME TAXES (CONTINUED) At December 31, 2001 and December 31, 2000, a valuation allowance has been established due to the uncertainty of realization of foreign net operating loss ("NOL") carryforwards. The net change in the total valuation allowance for the period ended December 31, 2001 was an increase of $91. The increase was the result of additional losses generated in jurisdictions where realization is uncertain. The domestic NOL carryforwards expire between the years 2019 - 2021. Management believes it is more likely than not all other deferred tax assets will be realized based on the Company's anticipated future taxable earnings or available tax planning alternatives. (D) TAXING AUTHORITY REVIEWS Consolidated federal income tax returns of NS have been examined and Revenue Agent Reports have been received for all years up to and including 1996. NS will indemnify the Company for any tax liabilities prior to the 1998 Acquisition to the extent they were not accrued at the purchase date. Exel plc will indemnify the Company for any Allied Acquisition companies' tax liabilities related to periods prior to the Allied Acquisition. (9) REVOLVING CREDIT FACILITY In connection with the Allied Acquisition, the Company entered into a credit agreement (the "Credit Agreement") on November 19, 1999 that replaced a former credit agreement. The Credit Agreement consists of a revolving credit facility (the "Revolving Credit Facility") and two term loans. See Note 10 for discussion of the term loans and the extraordinary loss related to the early extinguishment of the former credit agreement. Under the Revolving Credit Facility, as amended and restated, the Company may borrow up to $150,000, which includes a $10,000 swing line subfacility and a $50,000 letter of credit subfacility, until its scheduled maturity on November 18, 2006. Advances must be made in increments of no less than $5,000 or multiples of $1,000 in excess thereof. If lesser amounts are required, then the swing line subfacility may be activated. Borrowing under the Revolving Credit Facility was $46,000 and $83,400 at December 31, 2001 and 2000, respectively. A commitment fee of 0.5% is charged on the unused portion of the Revolving Credit Facility and is payable quarterly. The Company had outstanding letters of credit of $15,819 and $13,673 at December 31, 2001 and 2000, respectively, primarily in conjunction with its insurance agreements. The Company has available credit of $88,181 and $52,927 at December 31, 2001 and 2000, respectively. Interest is payable at ABR rates (based on prime, base CD or federal funds effective rates), plus a margin of 2.0% (effective rate of 6.75% as of December 31, 2001) or the London Interbank Offered Rate (LIBOR), plus a margin of 3.0% (effective rate of 5.14% as of December 31, 2001). The weighted average interest rates for the years ended December 31, 2001 and 2000 were 7.29% and 9.48%, respectively. The rate selected is determined by the facility/subfacility from which the borrowings are drawn, the maturity date of the loan and the required notice of the borrowing. ABR interest is payable at the end of each quarter and LIBOR interest is payable in arrears on the last day of the loan period for loans less than three months and at the end of each quarter for loans greater than three months. Principal is repaid as funds are available. F-32 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (9) REVOLVING CREDIT FACILITY (CONTINUED) Certain wholly-owned foreign subsidiaries maintain operating lines of credit totaling $14,299. Interest is payable monthly or quarterly at the bank's base or prime rate (currently 4.0%--6.7%) plus 0.25%--1.0%, and include commitment fees ranging from 0%--0.30% on the unused portion of the line. As of December 31, 2001 and 2000, the outstanding balance was $1,235 and $1,861, respectively. These agreements are guaranteed by the Company. See Note 10 regarding covenants relating to the Credit Agreement. (10) LONG-TERM DEBT In connection with the closing of the Allied Acquisition, the Company entered into debt agreements to refinance existing indebtedness and to finance a portion of the Allied Acquisition. Long-term debt consisted of:
DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Note payable--Tranche A............................. $135,000 $145,050 Note payable--Tranche B............................. 171,500 173,250 Senior Subordinated Notes........................... 150,000 150,000 Other............................................... 868 221 -------- -------- Total debt.......................................... 457,368 468,521 Less current maturities............................. 16,958 11,800 -------- -------- Total long-term debt................................ $440,410 $456,721 ======== ========
(A) NOTES PAYABLE--TRANCHE A AND TRANCHE B As part of the financing of the Allied Acquisition, the Company replaced a former credit agreement with the Credit Agreement, which includes two term loans, as amended and restated, amounting to $150,000 (Note payable--Tranche A) and $175,000 (Note payable--Tranche B), respectively. Notes payable Tranche A and Tranche B are senior notes, collateralized by substantially all the assets of the Company, payable in consecutive quarterly interest and principal installments, commencing on March 24, 2000, through maturity of November 18, 2006 and November 18, 2007, respectively. Interest is payable at ABR or LIBOR, plus an applicable margin, which corresponds to the achievement of certain performance criteria determined from the financial statements. At December 31, 2001 and 2000, respectively, Tranche A interest was accruing at LIBOR, plus 3%, (5.10% and 9.78%) and Tranche B interest was accruing at LIBOR, plus 4%, (6.10% and 10.78%). The Credit Agreement, as amended and restated, governing Tranche A, Tranche B and the Revolving Credit Facility contains a number of covenants that limit, among other things, the incurrence of additional indebtedness, the incurrence of capital lease obligations and purchase of operating property. The Credit Agreement also requires the Company to maintain certain financial tests, including a consolidated interest coverage ratio and a leverage ratio, and includes a general lien on certain of the Company's assets. The agreement also includes certain cross default provisions such that a default under any other loan F-33 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (10) LONG-TERM DEBT (CONTINUED) agreements by the Company or its Parent would cause a default in the Credit Agreement. The Company is in compliance with all financial convenants. In connection with the extinguishment of the former credit agreement, the Company recognized an extraordinary loss (non-cash) of $3,387 ($5,519 before applicable tax benefit) in 1999 for the write-off of associated unamortized deferred debt issuance costs. (B) SENIOR SUBORDINATED NOTES Also in connection with the Allied Acquisition, the Company issued $150,000 aggregate principal amount of 13.375% Senior Subordinated Notes ("Senior Subordinated Notes") due December 1, 2009. Each note bears interest at a rate of 13.375% per annum and is payable in semi-annual installments on June 1 and December 1 each year to holders of record at the close of business on the May 15 or November 15 immediately preceding the interest payment date. During 2001 and 2000, in accordance with the registration rights agreement, additional maximum interest of 0.50% per annum began accruing on the Senior Subordinated Notes, as a registered exchange offer for such notes has not yet been consummated. Such registration is expected to commence in 2002. The Senior Subordinated Notes are unsecured senior subordinated indebtedness of the Company. They are subordinated in right of payment, as set forth in the Senior Subordinated Notes Indenture ("Indenture"), to the payment when due in full cash of all existing and future senior indebtedness of the Company. These Senior Subordinated Notes have been guaranteed by certain domestic subsidiaries of the Company. The indenture and the agreements governing this debt contain a number of similar less restrictive covenants as those included in the Credit Agreement described above. In 1999, the Company issued these notes in a Rule 144A private placement under the Securities Act. (C) TRANSFERS AND SERVICING OF FINANCIAL ASSETS During 2001, the Company sold a portion of its equipment notes receivable portfolio to an unaffiliated third party. The transaction, which qualified as a sale under Statement of Financial Accounting Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" resulted in cash proceeds of $6,317, which approximated the fair value of notes receivables sold. The equipment notes receivable are due from agents or owner-operators for trailers, tractors and straight trucks and are collateralized by those assets. Each note is generally for a term of five years, bearing interest at either a fixed or variable rate of prime plus 1.0%--2.0%. Principal and interest are payable monthly over the term of the agreement. Under the terms of the sales agreement, the Company is responsible for servicing, administering, and collecting these notes receivable on behalf of the unaffiliated third party. Servicing fees under the sales agreement are deemed adequate compensation to the Company for performing the servicing, accordingly no servicing asset or liability has been recognized in the accompanying financial statements. Under the terms of the transaction, the maximum recourse exposure to the Company was $748. F-34 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (10) LONG-TERM DEBT (CONTINUED) Future maturities of long-term debt are as follows:
DECEMBER 31, 2001 ----------------- 2002........................................................ $ 16,958 2003........................................................ 21,925 2004........................................................ 21,910 2005........................................................ 36,700 2006........................................................ 109,650 Thereafter.................................................. 250,225 -------- $457,368 ========
The fair value of the Company's long-term debt approximates the carrying amount based on the present value of cash flows discounted at the current rates offered to the Company on similar debt instruments. (11) CAPITAL AND OPERATING LEASES During 2001, the Company entered into two trailer lease agreements (non-cash) totaling $3,833 and a tractor satellite-communication equipment lease agreement in the amount of $563. Each of these leases is being accounted for as a capital lease and requires the company to pay customary operating and repair expenses that will keep these assets in operating condition. The trailer leases contain purchase options at amounts approximating fair market value at lease termination in 2008. The tractor satellite-communication equipment lease contains a bargain purchase option of $1 at lease termination in 2006. Also, during 2001, the MSS-UK operating segment entered into two vehicle lease agreements totaling $9,870 (non-cash). Both of the leases are being accounted for as capital leases and require the company to pay customary operating and repair expenses that will keep the assets in roadworthy condition through the termination dates of 2008 and 2010. The vehicle leases do not contain purchase options, however, the MSS-UK operating segment has the right to share in any profits made from the sale of the assets by the financing company after the lease termination date. During 2000, the Company sold trailers for $12,716 having a net book value of $7,343. The assets were leased back from the purchaser over a period of between three and six years depending on the age of the individual assets. The resulting lease is being accounted for as a capital lease and the resulting deferred gain of $5,373 is being amortized over the life of the lease. The lease requires the Company to pay customary operating and repair expenses that will keep these assets in roadworthy condition. The lease contains purchase options at amounts approximating fair market value in 2003, 2004 and at lease termination. The Company has noncancelable lease commitments under operating leases for rental of office space, warehouse facilities and office equipment. The Company's rental expense under these operating leases was $52,438, $35,693 and $20,081 for the years ended December 31, 2001 and 2000 and December 25, 1999, respectively. F-35 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (11) CAPITAL AND OPERATING LEASES (CONTINUED) Future minimum rental payments under capital lease obligations and operating leases at December 31, 2001 are as follows:
CAPITAL OPERATING LEASES LEASES ---------- ---------- 2002........................................................ $ 5,144 $ 49,411 2003........................................................ 3,797 39,982 2004........................................................ 3,136 29,795 2005........................................................ 3,057 26,357 2006........................................................ 5,014 18,415 Thereafter.................................................. 4,045 69,001 ------- -------- Total minimum lease payments................................ 24,193 $232,961 ------- ======== Less interest............................................... 3,821 ======= Present value of net minimum lease payments................. 20,372 ======= Less current portion........................................ 4,006 ======= Long-term portion of capital lease obligation............... $16,366 =======
Assets under capital leases consist of the following:
DECEMBER 31, DECEMBER 31, 2001 2000 ------------ ------------ Transportation equipment.................................... $27,361 $13,430 Less accumulated depreciation............................... 6,434 3,054 ------- ------- $20,927 $10,376 ======= =======
F-36 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (12) RETIREMENT AND POSTRETIREMENT MEDICAL PLANS DEFINED BENEFIT PLANS The Company has several defined pension plans covering substantially all of its domestic employees and certain employees in other countries. Pension benefits earned are generally based on years of service and compensation during active employment, however, the level of benefits and terms of vesting may vary among plans. Pension plan assets are administered by trustees and are principally invested in equity securities, fixed income securities, and pooled separate accounts. The funding of pension plans is determined in accordance with statutory funding requirements. The Company also has an Excess Benefit Plan and an Executive Retirement and Savings Plan which are unfunded nonqualified plans that provide retirement benefits not otherwise provided under the Qualified Plan because of the benefit limitations imposed by Section 415 and 401(a)(17) of the Internal Revenue Code. These Plans ensure that an executive receives the total pension benefit to which he/she otherwise would be entitled, were it not for such limitations. The expense associated with the Excess Benefit Plan is included within the Pension Benefits table below. For the years ended December 31, 2001 and 2000 and the period November 19, 1999 through December 31, 1999, the expense and (income) associated with the Executive Retirement and Savings Plan was $496, $250 and $(556), respectively. In addition, the Overlap Benefit Plan for various domestic employees, an unfunded, nonqualified retirement plan, provides retirement benefits forfeited by the highly compensated employees under the Qualified Plan because of the changes to the retirement plan formula which were effective April 18, 1989. Eligible employees of Allied Pickfords, the Company's United Kingdom subsidiary, continued to be eligible for a defined benefit plan of the Seller through April 5, 2000. At the time of the Allied Acquisition, the Company provided each participant with the opportunity to join its defined benefit plan. Substantially all the eligible participants elected to join. The Company has recognized net periodic pension costs associated with the plan since the participant election date of April 5, 2000. On September 19, 2001, the benefit obligation and plan assets related to prior service costs for this plan were determined by an independent actuary and transferred from the Seller. In conjunction herewith, the loss in fair value in plan assets from the Allied Acquisition date to September 19, 2001 has been reflected as a reduction in plan asset value prior to the transfer of $19,322. The Company has recorded a prepaid pension asset of approximately $8,103. F-37 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (12) RETIREMENT AND POSTRETIREMENT MEDICAL PLANS (CONTINUED) Information on the Company's domestic and foreign defined benefit plans and amounts recognized in the Company's consolidated balance sheets, based on actuarial valuation, are as follows:
COMBINED PLANS EXCLUDING UNITED KINGDOM UNITED KINGDOM ------------------------------------- ----------------- DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 31, 2001 ----------------- ----------------- ----------------- CHANGE IN BENEFIT OBLIGATION Benefit obligation at beginning of period.... $ 89,247 $80,326 $54,515 Service cost................................. 2,926 3,240 3,136 Interest cost................................ 6,657 6,294 3,179 Plan participants' contribution.............. -- -- 1,601 Actuarial (gain)/loss........................ 3,428 5,054 (8,155) Special termination benefits................. -- 1,438 -- Benefits paid.............................. (5,147) (6,978) (582) Currency translation......................... (214) (127) (1,401) -------- ------- ------- Benefit obligation at end of period.......... $ 96,897 $89,247 $52,293 -------- ------- ------- CHANGE IN PLAN ASSETS Fair value of plan assets at beginning of period..................................... $ 88,788 $93,034 $74,830 Reduction in plan asset value prior to transfer................................... -- -- (19,322) Actual return on plan assets................. (3,444) 632 7,941 Employer contribution........................ 124 2,035 -- Plan participants' contribution.............. -- -- 1,601 Benefits paid................................ (5,064) (6,913) (582) Currency translation......................... -- -- (1,924) -------- ------- ------- Fair value of plan assets at end of period... $ 80,404 $88,788 $62,544 -------- ------- ------- FUNDED STATUS RECONCILIATION Funded status................................ $(16,493) $ (459) $10,251 Unrecognized net actuarial (gain)/loss....... 21,195 6,615 (2,148) -------- ------- ------- Prepaid (accrued) benefit cost............... $ 4,702 $ 6,156 $ 8,103 ======== ======= ======= AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET Prepaid benefit cost......................... $ -- $ 8,280 -- Cost transferred from seller................. -- -- 8,368 Accrued benefit liability.................... (9,416) (2,682) -- Intangible asset............................. 41 -- -- Accumulated other comprehensive income....... 14,077 558 -- Net change in prepaid benefit (September 19-December 31)................. -- -- (265) -------- ------- ------- Net amount recognized........................ $ 4,702 $ 6,156 $ 8,103 ======== ======= =======
F-38 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (12) RETIREMENT AND POSTRETIREMENT MEDICAL PLANS (CONTINUED) The following actuarial assumptions were used for the Company's pension plans:
COMBINED PLANS EXCLUDING UNITED KINGDOM UNITED KINGDOM ------------------------------------------ -------------- DECEMBER 31, DECEMBER 31, DECEMBER 25, DECEMBER 31, 2001 2000 1999 2001 ------------ ------------ ------------ -------------- WEIGHTED-AVERAGE ASSUMPTIONS Discount rate............................. 7.00-7.25% 7.00-7.50% 7.00-7.75% 5.75% Expected return on plan assets............ 9.00% 9.00% 9.00% 7.75% Rate of compensation increase............. 2.00-5.00% 2.00-5.00% 2.00-5.00% 4.00%
Information on the Company's significant domestic and foreign defined benefit plans and amounts recognized in the Company's consolidated statements of operations, based on actuarial valuation are as follows:
COMBINED PLANS EXCLUDING UNITED KINGDOM UNITED KINGDOM ------------------------------------------ -------------- DECEMBER 31, DECEMBER 31, DECEMBER 25, DECEMBER 31, 2001 2000 1999 2001 ------------ ------------ ------------ -------------- COMPONENTS OF NET PERIODIC BENEFIT COST Service cost.............................. $ 2,926 $ 3,240 $ 3,087 $ 3,136 Interest cost............................. 6,657 6,294 3,796 3,179 Expected return on plan assets............ (7,837) (8,560) (4,841) (5,710) Amortization of recognized actuarial (gain)/loss............................. 135 (28) 16 68 ------- ------- ------- ------- Net periodic benefit cost................. 1,881 946 2,058 673 Special termination benefits and curtailment............................. -- 1,438 -- -- ------- ------- ------- ------- Net periodic benefit cost after curtailment and settlements............. $ 1,881 $ 2,384 $ 2,058 $ 673 ======= ======= ======= =======
The Company recognizes an accrued benefit liability in its financial statements for its unfunded Excess Benefit Plan and Overlap Benefit Plan. The accrued benefit cost at December 31, 2001 and 2000 included $1,012 and $1,107, respectively, related to this liability. The Company intends to fund at least the minimum amount required under the Employee Retirement Income Security Act of 1974, as amended, for its plans. The minimum funding amount at December 31, 2001 and 2000 is $14,118 and $558, respectively. This amount is included in accrued benefit costs. The Company's NAVL Canadian subsidiary, North American Van Lines Canada Ltd., has a defined benefit plan with the benefits generally based upon years of service and the highest five-year average salary during employment. As of December 31, 2001 and 2000, the accumulated benefit obligation of accrued pension benefits was $1,403 and $1,575, respectively, and the aggregate market value of pension plan assets was $1,772 and $1,786, respectively. As of December 31, 2001 and 2000, the prepaid pension cost was $190 and $185, respectively. The (income) expense associated with the plan for the years ended December 31, 2001 and 2000 and December 25, 1999 was $53, $(61) and $(36), respectively. F-39 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (12) RETIREMENT AND POSTRETIREMENT MEDICAL PLANS (CONTINUED) POSTRETIREMENT MEDICAL PLANS The Company has nonpension postretirement benefit plans for certain domestic employees that provide specific health care and death benefits to eligible retired employees. Under the present plans, which may be amended or terminated at the Company's option, a defined percentage of health care expenses is covered, after reductions for any deductibles, co-payments, Medicare payments and, in some cases, coverage provided by other group insurance policies. The cost of such health care coverage to a retiree may be determined in part by a retiree's years of vested service with the Company prior to retirement. Death benefits are based on a fixed amount at time of retirement.
DECEMBER 31,2001 DECEMBER 31,2000 ---------------- ---------------- CHANGE IN BENEFIT OBLIGATION Benefit obligation at beginning of period................... $ 15,611 $ 12,800 Service cost................................................ 1,158 892 Interest cost............................................... 1,293 949 Plan participants' contribution............................. 57 42 Actuarial loss.............................................. 2,051 94 Special termination benefits................................ -- 1,857 Curtailment gains........................................... -- (298) Benefits paid............................................... (1,180) (846) Other actuarial adjustment.................................. -- 121 -------- -------- Benefit obligation at end of period....................... $ 18,990 $ 15,611 ======== ======== FUNDED STATUS RECONCILIATION AND AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEETS Funded status............................................... $(18,990) $(15,611) Unrecognized net actuarial (gain)/loss...................... 847 (1,192) -------- -------- Accrued benefit cost and net amount recognized.............. $(18,143) $(16,803) ======== ========
The following actuarial assumptions were used for the Company's postretirement plans:
DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ----------------- ----------------- ----------------- WEIGHTED-AVERAGE ASSUMPTIONS Discount rate................................ 7.25% 7.50% 7.75% Health care cost trend rates................. 8.50% 7.00% 7.50%
F-40 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (12) RETIREMENT AND POSTRETIREMENT MEDICAL PLANS (CONTINUED) The health care cost trend rate was assumed to decrease gradually to 4.5% for 2010 and remain at that level thereafter.
DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ----------------- ----------------- ----------------- COMPONENTS OF NET PERIODIC BENEFIT COST Service cost................................. $1,158 $ 892 $1,050 Interest cost................................ 1,293 949 880 Amortization of recognized actuarial (gain)/loss................................ 12 (39) -- ------ ------ ------ Net periodic benefit cost.................... 2,463 1,802 1,930 Special termination benefits and curtailment gains...................................... -- 1,570 -- ------ ------ ------ Net periodic benefit cost after curtailment and settlements............................ $2,463 $3,372 $1,930 ====== ====== ======
The 2000 special termination benefits and curtailment gains were related to benefit enhancements granted under certain programs for those employees who ceased work during 2000. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in the assumed health care cost trend rate would have the following effects:
ONE-PERCENTAGE POINT --------------------- INCREASE DECREASE --------- --------- Effect on total of service and interest cost components..... $ 478 $ (394) Effect on postretirement benefit obligation................. $3,123 $(2,658)
DEFINED CONTRIBUTION PLANS In 1994, the Company's NAVL United Kingdom subsidiary, North American Van Lines, Ltd., established a contributory defined contribution plan for eligible employees. The plan is funded through contributions from employees, generally 3% of earnings, which are matched by the Company. The expense associated with the plan was $36, $47 and $59 for the years ended December 31, 2001 and 2000 and December 25, 1999, respectively. In addition, the Company maintains the NAVL Employees Savings Plan and Trust and the Allied Van Lines, Inc. Profit-Sharing and Retirement Savings Plan for eligible employees. Both plans qualify under Section 401(a) and 401(k) of the Internal Revenue Code. The Company has made no contributions to the NAVL plan since its inception. For the Allied plan, the Company makes matching contributions based on participant contributions to the plan and also contributes a profit-sharing contribution which is 4% of the eligible compensation of each participant. The Company made contributions of $1,225, $1,216 and $164 for the years ended December 31, 2001 and 2000 and the period November 19, 1999 to December 31, 1999, respectively. F-41 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (13) POSTEMPLOYMENT MEDICAL PLAN The Company provides certain postemployment health care continuation benefits to inactive NAVL employees and their dependents during the period following employment but before retirement. As of December 31, 2001 and 2000, the accumulated postemployment benefit obligation for such benefits was $2,012 and $1,663, respectively. The expense associated with the plan was $789, $196 and $357 for the years ended December 31, 2001 and 2000 and December 25, 1999, respectively. (14) INCENTIVE AND DEFERRED COMPENSATION The Company maintains a Management Incentive Plan for certain executives and key management employees. The plan is administered by the Board of Directors who do not participate in the plan. Incentive compensation is based upon achievement of certain predetermined corporate performance goals. The Company also maintains a Performance Incentive Plan for eligible employees not included in the Management Incentive Plan. The plan is administered by the Vice President Human Resources, who does not participate in the plan. Incentive compensation is based upon achievement of certain predetermined corporate performance goals. The expense associated with the incentive plans was $147, $8,133 and $3,933 for the years ended December 31, 2001 and 2000 and December 25, 1999, respectively. (15) STOCK OPTION PLAN The Company's parent maintains a stock option plan (the "Option Plan") for officers and other key employees which provides for the granting of options to acquire up to 300,000 shares of the parent's Common Stock. The administrator of the Option Plan is Allied Worldwide's Board of Directors. Under the Option Plan, Service Options and Performance Options have been granted with each share of stock sold to the officers and other key employees. Service Options are vested in equal annual installments on each of the first five anniversaries of the grant date. Performance Options are vested dependant on achievement of cumulative EBITDA targets, or if not vested sooner, become vested on the ninth anniversary of the grant date. All options granted expire after ten years from the grant date. The exercise price of the options equaled the fair market value of common stock at the date of the grant. Fair market value was determined by management to be equal to the price paid for common stock issued at the grant date. F-42 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (15) STOCK OPTION PLAN (CONTINUED) Information with respect to the options granted under the Option Plan is as follows:
# OF WEIGHTED AVG. SHARES EXERCISE PRICE -------- -------------- Outstanding at December 26, 1998...................... 71,400 $100.00 -------- ------- Options granted..................................... 56,468 136.99 Options cancelled................................... (10,000) 100.00 -------- ------- Outstanding at December 25, 1999...................... 117,868 117.72 Options granted..................................... 32,560 142.00 Options cancelled................................... (59,050) 106.04 -------- ------- Outstanding at December 31, 2000...................... 91,378 133.92 Options granted..................................... 6,694 142.00 Options cancelled................................... (38,482) 136.46 -------- ------- Outstanding at December 31, 2001...................... 59,590 $133.19 ======== =======
The weighted average remaining contractual life of these options is 7.93 years. At December 31, 2001, the number of options that became exercisable were 23,827. At December 31, 2000 and December 25, 1999, the number of options that became exercisable were 9,553 and 10,398, respectively. During the years ended December 31, 2001 and 2000, the fair value of common stock was $142.00. During the year ended December 25, 1999, the fair value of common stock ranged from $100.00 to $142.00. In accordance with the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), the Parent has elected to continue to account for stock-based compensation under the intrinsic value based method of accounting described by Accounting Principles Board Opinion 25, "Accounting for Stock Issued to Employees" ("APB 25"). Under APB 25, generally no cost is recorded for stock options issued to employees unless the option price is below market at the time options are granted. Had the parent elected to apply the provisions of SFAS 123 regarding recognition of compensation expense to the extent of the calculated fair value of stock options granted, the net loss would have been increased as follows:
DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 25, 1999 ----------------- ----------------- ----------------- Net loss as reported......................... $(10,947) $(17,079) $(19,934) Pro forma net loss........................... $(11,291) $(17,437) $(20,158)
The fair value of each option is estimated on the date of grant, using the Black-Scholes option pricing model with the following weighted average assumptions used: risk-free interest rates of 4.59% for 2001, 5.00% to 6.66% for 2000 and 5.36% to 6.47% for 1999, expected volatility of 0.01%, expected life of 5 years for all years and no dividend payments. F-43 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (16) COMMITMENTS AND CONTINGENCIES (A) LITIGATION The Company and certain subsidiaries are defendants in numerous lawsuits relating principally to motor carrier operations. In the opinion of management, after consulting with its legal counsel, the amount of the Company's ultimate liability resulting from these matters should not materially affect the Company's financial position, results of operations or liquidity. (B) ENVIRONMENTAL MATTERS The Company has been named as a potentially responsible party ("PRP") in two environmental clean-up proceedings by federal and state authorities and one additional environmental clean-up proceeding by a group of PRP's. The suits are brought under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or other federal or state statutes. Based on all known information, it is estimated that the settlement cost of each site will not be significantly larger than the litigation reserves established, which totaled $35 as of December 31, 2001 and 2000. It is possible that additional claims or lawsuits involving unknown environmental matters or now unidentified environmental sites may arise in the future. The Company owns or has owned and leases or has leased facilities at which underground storage tanks for diesel fuel are located and operated. Management believes that the Company has taken the appropriate and necessary action with regard to releases of diesel fuel that have occurred. As conditions may exist on these properties related to environmental problems that are latent or undisclosed, there can be no assurance that the Company will not incur liabilities or costs, the amount of which cannot be estimated reliably at this time. However, based on its assessment of the facts and circumstances now known and after consulting with its legal counsel, management believes that it has recorded appropriate estimates of liability for those environmental matters of which the Company is aware. Further, management believes it is unlikely that any identified matters, either individually or in aggregate, will have a material effect on the Company's financial position, results of operations or liquidity. (C) PURCHASE COMMITMENTS The Company has entered into certain purchase commitments of $9,844 and $23,471 for software licenses at December 31, 2001 and trailers and software licenses at December 31, 2000, respectively. (17) FINANCIAL INSTRUMENTS The Company utilizes interest rate agreements and foreign exchange contracts to manage interest rate and foreign currency exposures. The principal objective of such contracts is to minimize the risks and/or costs associated with financial and international operating activities. The Company does not utilize financial instruments for trading purposes. The counterparties to these contractual arrangements are financial institutions with which the Company also has other financial relationships. The Company is exposed to credit loss in the event of nonperformance by these counterparties. However, the Company does not anticipate nonperformance by the other parties, and no material loss would be expected from their nonperformance. F-44 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (17) FINANCIAL INSTRUMENTS (CONTINUED) (A) INTEREST RATE INSTRUMENTS The company enters into interest swap agreements to manage its exposure to changes in interest rates. The swaps involve the exchange of variable interest rate payments for fixed interest rate payments without exchanging the notional principal amounts. The Company records the payments or receipts on the agreements as adjustments to interest expense. Interest rate swap agreements are accounted for as cash flow hedges. Derivative gains or losses included in OCI are reclassified into earnings at the time when the hedged item affects earnings. During the year ended December 31, 2001, $1,900 was reclassified as interest expense. During the year ended December 31, 2001, $82 of expense was recognized in earnings for ineffectiveness relating to cash flow hedges. The Company estimates that net derivative losses of $3,482 included in accumulated other comprehensive income at December 31, 2001 will be reclassified into earnings during the next twelve months. The following is a recap of each agreement: Notional amount....... $40,000 $20,000 $70,000 $20,000 Fixed rate paid....... 4.91% 5.35% 5.44% 4.785% Variable rate 3 month LIBOR 1 month LIBOR 1 month LIBOR 1 month LIBOR received............ Expiration date....... March 2003 January 2002 December 2002 April 2003
(B) FOREIGN EXCHANGE INSTRUMENTS From time-to-time, the Company utilizes foreign currency forward contracts in the regular course of business to manage its exposure against foreign currency fluctuations. The forward contracts establish the exchange rates at which the Company will purchase or sell the contracted amount of U.S. Dollars for specified foreign currencies at a future date. The Company utilizes forward contracts which are short-term in duration (less than one year). The major currency exposures hedged by the Company are the Australian dollar, British pound, German mark and Euro. The contract amount of foreign currency forwards was $3,523 and $1,870 at December 31, 2001 and 2000, respectively. Changes in fair value relating to these derivatives are recognized in current period earnings. Approximately $432 of gains resulting from changes in fair value of these derivatives was recognized in earnings for the year ended December 31, 2001. (C) CONVERTIBLE BOND INSTRUMENTS The Company holds various debt securities with convertible features in the available-for-sale investment portfolio of its insurance operations. The value of the conversion feature is bifurcated from the value of the underlying bond. Changes in fair value are recorded in current period earnings. During the year ended December 31, 2001, $9 of gains from increases in the fair market value of these instruments was recorded in earnings. (18) OPERATING SEGMENTS The Company has three reportable segments--Van Line Network, Logistics Services, and Moving and Storage Services. Intersegment transactions, principally relating to international relocations, are recorded at market rates as determined by management. The consolidation process results in the appropriate F-45 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (18) OPERATING SEGMENTS (CONTINUED) elimination of intercompany transactions, with revenues reflected in the segment responsible for billing the end customer. The Van Line Network segment provides domestic and international residential relocation services, operating as North American Van Lines, Allied Van Lines and Global Van Lines, through a network of exclusive agents. It is comprised of the Relocation Services Division, which provides packing, loading, transportation, delivery and warehousing services for any type of household move in the U.S. and Canada, and the International Division, which provides or coordinates these same services for customers on a global basis. The Van Line Network segment also includes a multiple-line property and casualty insurance company. The Logistics Services segment is comprised of the Specialized Transportation unit, which provides transportation and related services to principally electronics, medical equipment and other suppliers of sensitive goods requiring specialized handling in the U.S.; the Solutions unit which provides customized solutions and programs to facilitate the handling of high-value products; and the Europe unit, which provides these same logistics services in the United Kingdom and mainland Europe. The Moving and Storage Services segment, operating principally as Pickfords or Allied Pickfords, operates in the United Kingdom, portions of Europe, Australia, New Zealand and other Asia/ Pacific locations and provides complete domestic and international relocation services. Moving and Storage Services also provides a full range of office and industrial relocation services including records management in most of the aforementioned locations. The tables below represent information about revenues, depreciation and amortization, income (loss) from operations and total assets by segment used by the chief decision-makers of the Company as of and for the years ended December 31, 2001 and 2000 and December 25, 1999:
DEPRECIATION AND INCOME (LOSS) DECEMBER 31, 2001: REVENUES AMORTIZATION(1)(2) FROM OPERATIONS TOTAL ASSETS(3) - ------------------ ---------- ------------------ --------------- --------------- Van Line Network.............. $1,386,922 $18,434 $31,282 $ 441,296 Logistics Services............ 531,973 10,997 (2,509) 186,046 Moving and Storage Services... 330,408 19,311 24,529 416,634 Corporate..................... -- -- -- 51,838 ---------- ------- ------- ---------- Consolidated Totals........... $2,249,303 $48,742 $53,302 $1,095,814 ========== ======= ======= ==========
DEPRECIATION AND INCOME FROM DECEMBER 31, 2000: REVENUES AMORTIZATION(1)(2) OPERATIONS TOTAL ASSETS(3) - ------------------ ---------- ------------------ ------------ --------------- Van Line Network.............. $1,478,733 $20,484 $23,070 $ 518,211 Logistics Services............ 576,574 12,117 4,857 203,046 Moving and Storage Services... 323,387 21,279 21,918 402,753 Corporate..................... -- -- -- 92,592 ---------- ------- ------- ---------- Consolidated Totals........... $2,378,694 $53,880 $49,845 $1,216,602 ========== ======= ======= ==========
F-46 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (18) OPERATING SEGMENTS (CONTINUED)
DEPRECIATION AND INCOME (LOSS) DECEMBER 25, 1999: REVENUES AMORTIZATION(1)(2) FROM OPERATIONS - ------------------ ---------- ------------------ --------------- Van Line Network................... $ 593,234 $11,322 $ 1,490 Logistics Services(4).............. 529,661 18,097 (3,616) Moving and Storage Services........ 36,892 1,790 1,009 Corporate.......................... -- -- -- ---------- ------- ------- Consolidated Totals................ $1,159,787 $31,209 $(1,117) ========== ======= =======
- ------------------------ (1) Depreciation expense for capital expenditures in the corporate category is allocated to the segments in order to determine segment income from operations. (2) Depreciation and amortization are comprised of depreciation, goodwill and amortization and deferred agent contract amortization. (3) Total assets by segment are specific assets such as trade receivables and property and equipment. Assets included in the corporate category include non-allocated assets such as the corporate headquarters building, computer hardware and software, contracts receivable associated with equipment sales, deferred taxes and goodwill. (4) Income (loss) from operations includes $5,000 of customer contract termination costs. Specified items related to segment assets:
DECEMBER 31, 2001 DECEMBER 31, 2000 CAPITAL EXPENDITURES CAPITAL EXPENDITURES -------------------- -------------------- Van Line Network................................. $11,000 $17,345 Logistics Services............................... 14,553 12,443 Moving and Storage Services...................... 18,492 14,918 Corporate........................................ 4,303 10,671 ------- ------- Consolidated Totals.............................. $48,348 $55,377 ======= =======
Revenue and long-lived asset information by geographic area as of and for the years ended December 31, 2001 and 2000 and December 25, 1999:
2001 2000 1999 ----------------------- ----------------------- ---------- LONG-LIVED LONG-LIVED REVENUE ASSETS REVENUE ASSETS REVENUE ---------- ---------- ---------- ---------- ---------- United States................. $1,799,200 $305,944 $1,941,399 $279,328 $1,029,969 Foreign....................... 450,103 272,652 437,295 289,580 129,818 ---------- -------- ---------- -------- ---------- Total......................... $2,249,303 $578,596 $2,378,694 $568,908 $1,159,787 ========== ======== ========== ======== ==========
Foreign revenue is based on the country in which the sales originated, principally in the United Kingdom and Australia. F-47 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (18) OPERATING SEGMENTS (CONTINUED) Long-lived assets are comprised of property and equipment, net and goodwill and intangible assets, net. (19) RESTRUCTURING AND OTHER UNUSUAL CHARGE The following tables provide details of the restructuring accrual as of December 31, 2001:
RESTRUCTURING RESTRUCTURING ACCRUALS AS ACCRUALS AS OF ADDITIONAL OF DECEMBER 31, RESTRUCTURING OTHER ASSET DECEMBER 31, 2000 CHARGE ADJUSTMENTS IMPAIRMENT PAYMENTS 2001 ------------- ------------- ----------- ---------- -------- ------------- FAST FORWARD PROGRAM Severance cost................... $ 418 $ -- $292 $ -- $ (710) $ -- Outplacement services and other.......................... 257 -- (247) -- (10) -- ------ ------ ---- ----- ------- ------ Total restructuring cost......... 675 -- 45 -- (720) -- ------ ------ ---- ----- ------- ------ ALLIED ACQUISITION Severance cost................... 335 -- (170) -- (165) -- Other............................ 65 -- 112 -- (177) -- ------ ------ ---- ----- ------- ------ Total restructuring cost......... 400 -- (58) -- (342) -- ------ ------ ---- ----- ------- ------ MOVING AND STORAGE SERVICES-- UK OPERATING SEGMENT Severance cost................... 135 595 -- -- (730) -- ------ ------ ---- ----- ------- ------ Total restructuring cost......... 135 595 -- -- (730) -- ------ ------ ---- ----- ------- ------ BUSINESS NEEDS STAFFING ADJUSTMENT Severance cost................... 751 429 15 -- (1,195) -- ------ ------ ---- ----- ------- ------ Total restructuring cost......... 751 429 15 -- (1,195) -- ------ ------ ---- ----- ------- ------ LOGISTICS PARTS CENTERS Severances cost.................. -- 969 (325) -- (604) 40 Building leases.................. -- 2,167 353 -- (403) 2,117 Asset impairment................. -- 772 (79) (576) (37) 80 ------ ------ ---- ----- ------- ------ Total restructuring cost......... -- 3,908 (51) (576) (1,044) 2,237 ------ ------ ---- ----- ------- ------ Total restructuring accrual...... $1,961 $4,932 $(49) $(576) $(4,031) $2,237 ====== ====== ==== ===== ======= ======
F-48 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (19) RESTRUCTURING AND OTHER UNUSUAL CHARGE (CONTINUED) The following table provides details of restructuring for the year ended December 31, 2000:
RESTRUCTURING RESTRUCTURING ACCRUALS AS ACCRUALS AS OF ALLIED OF DECEMBER 25, ACQUISITION RESTRUCTURING OTHER DECEMBER 31, 1999 ADJUSTMENT CHARGE ADJUSTMENTS PAYMENTS 2000 ------------- ----------- ------------- ----------- -------- ------------- FAST FORWARD PROGRAM Severance cost................... $2,365 -- $1,235 $(265) $(2,917) $ 418 Outplacement services and other.......................... 422 -- -- 105 (270) 257 ------ ------- ------ ----- ------- ------ Total restructuring cost......... 2,787 -- 1,235 (160) (3,187) 675 ------ ------- ------ ----- ------- ------ ALLIED ACQUISITION Severance cost................... 2,916 (1,255) -- -- (1,326) 335 Other............................ 860 (300) -- -- (495) 65 ------ ------- ------ ----- ------- ------ Total restructuring cost......... 3,776 (1,555) -- -- (1,821) 400 ------ ------- ------ ----- ------- ------ MOVING AND STORAGE SERVICES-- U.K. OPERATING SEGMENT Severance cost................... -- -- 2,700 -- (2,565) 135 ------ ------- ------ ----- ------- ------ Total restructuring cost......... -- -- 2,700 -- (2,565) 135 ------ ------- ------ ----- ------- ------ BUSINESS NEEDS STAFFING ADJUSTMENT Severance cost................... -- -- 1,084 -- (333) 751 ------ ------- ------ ----- ------- ------ Total restructuring cost......... -- -- 1,084 -- (333) 751 ------ ------- ------ ----- ------- ------ Total restructuring accrual...... $6,563 $(1,555) $5,019 $(160) $(7,906) $1,961 ====== ======= ====== ===== ======= ======
The following table provides details of restructuring for the year ended December 25, 1999:
RESTRUCTURING ACQUISITION RESTRUCTURING ACCRUALS AS OF PURCHASE ACCRUALS AS OF DECEMBER 26, RESTRUCTURING PRICE DECEMBER 25, 1998 CHARGE ALLOCATION PAYMENTS 1999 -------------- ------------- ----------- -------- -------------- FAST FORWARD PROGRAM Severance cost........................ $ -- $3,453 $ -- $(1,088) $2,365 Outplacement services................. -- 318 -- (67) 251 Other................................. -- 328 -- (157) 171 --------- ------ ------ ------- ------ Total restructuring cost.............. -- 4,099 -- (1,312) 2,787 --------- ------ ------ ------- ------ ALLIED ACQUISITION Severance cost........................ -- -- $2,916 -- 2,916 Other................................. -- -- 860 -- 860 --------- ------ ------ ------- ------ Total restructuring cost.............. -- -- 3,776 -- 3,776 --------- ------ ------ ------- ------ Total restructuring accrual........... $ -- $4,099 $3,776 $(1,312) $6,563 ========= ====== ====== ======= ======
F-49 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (19) RESTRUCTURING AND OTHER UNUSUAL CHARGE (CONTINUED) (A) FAST FORWARD PROGRAM In January 1999, with the help of outside consultants, the Company initiated the Fast Forward Program, which was a detailed evaluation of its existing cost structure. The program was comprised of a number of initiatives, primarily relating to employee redundancy. The charges included estimated severance costs for 237 employees across all operating divisions of the Company, outplacement services and other costs. None of these charges related to the Allied Acquisition. A total of 188 employees were terminated. During 2000, the Fast Forward Program was completed, with remaining severance costs paid in 2001. (B) ALLIED ACQUISITION Included in the acquisition purchase price allocation were restructuring charges related to the Allied Acquisition, which reflected certain severance and relocation costs the Company incurred to effect a worldwide integration plan for Allied's operations. A total of 66 employees were terminated and 55 were relocated. In 2000, based on an evaluation of the remaining amount needed, a reduction of $1,555 was made to the restructuring accrual, which was offset by an adjustment to goodwill. During 2000, the program was completed with remaining severance costs paid in 2001. (C) MOVING AND STORAGE SERVICES-UK OPERATING SEGMENT In 2000, the Company's Moving and Storage Services operating segment initiated programs in its United Kingdom operations in an effort to restructure the branch system and to eliminate management redundancy within its Pickfords Vanguard unit, reducing headcount by 93 employees. Charges were recorded as branch locations were identified for closure. The identification process continued through 2001 and headcount was reduced by an additional 16 employees. The programs were completed in 2001. (D) BUSINESS NEEDS STAFFING ADJUSTMENT In November 2000, due to business needs as determined by management, the Company established a restructuring reserve of $1,084 whereby headcount was reduced by 50 employees. The charges included estimated severance costs across all operating divisions of the Company. Severance costs were paid out and the program was completed in 2001. (E) LOGISTICS PARTS CENTERS In June 2001, the Company's Logistics Services operating segment established a program to exit the Parts Center business. The charges included severance and employee benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the Parts Center business by the end of 2001. Due to the lease terms and severance agreements, certain payments will continue through September 2005. OTHER UNUSUAL CHARGE In 1999, the Company incurred expense of $5,000 related to a customer contract termination. The settlement agreement provided for reimbursement of costs for cargo claims, delay claims and other costs F-50 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (19) RESTRUCTURING AND OTHER UNUSUAL CHARGE (CONTINUED) associated with customer service matters. The settlement allowed for the Company to offset customer receivables against the claim payment otherwise due. (20) RELATED PARTY The Company, Allied Worldwide and CD&R are parties to a consulting agreement to which CD&R is paid a management fee for financial advisory and management consulting services. For the years ended December 31, 2001 and 2000 and December 25, 1999, such fees were $1,375, $400 and $400, respectively. The Company has guaranteed loans in an aggregate principal amount of $21 and $236 as of December 31, 2001 and 2000, respectively, to various members of management in connection with their investment in Allied Worldwide. These loans mature on various dates in 2004 and bear interest at the prime rate plus 1.0%. (21) MERGER WITH MOVELINE On December 31, 2001, the Company and Moveline, Inc. ("Moveline") completed a merger under an agreement and plan of merger ("Merger Agreement") dated as of November 9, 2001, through a stock-for-stock merger of Moveline and a wholly owned subsidiary of the Company ("Merger") with such subsidiary as the surviving corporation. Under the terms of the Merger Agreement, Moveline's stockholders received 186,879 shares of common stock of the Company's parent, Allied Worldwide, for Moveline shares acquired in the Merger. Immediately following the Merger, the Company contributed the surviving subsidiary to Allied Van Lines, Inc. ("AVL"), another wholly owned subsidiary of the Company. AVL and that subsidiary were merged, with AVL as the surviving entity. Moveline, which was founded and spun-off by Allied Worldwide on August 1, 2000, has developed and markets a proprietary information technology-based customer care solution that builds upon the relocation industry's historical van-line business model. Prior to the Merger, Fund V was the primary stockholder of both Moveline and Allied Worldwide. In accordance with the accounting rules for mergers of entities under common control, the Company's merger with Moveline has been accounted for in a manner similar to a pooling-of-interests since it was acquired from Fund V, the controlling shareholder of Moveline and the Company's parent, Allied Worldwide. The Company's consolidated financial statements have been restated to include the combined results of operations, financial position, and cash flows of Moveline since inception as though it has always been a part of the Company. As a result of the Merger, all intercompany accounts and transactions that occurred between the Company and Moveline have been eliminated in consolidation. There were no material adjustments to conform the accounting policies of the combined companies. F-51 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (21) MERGER WITH MOVELINE (CONTINUED) Operating revenues and net loss previously reported by the separate companies and the combined amounts presented in the accompanying Consolidated Statements of Operations are as follows:
YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 ----------------- ----------------- Operating Revenues: North American Van Lines, Inc............. $2,228,815 $2,371,895 Moveline, Inc............................. 26,622 9,000 Eliminations.............................. (6,134) (2,201) ---------- ---------- Combined.................................... $2,249,303 $2,378,694 ========== ========== Net Loss: North American Van Lines, Inc............. $ (2,763) $ (10,272) Moveline, Inc............................. (8,184) (6,807) ---------- ---------- Combined.................................... $ (10,947) $ (17,079) ========== ==========
Costs of integration related to the Merger of $619 were expensed in the fourth quarter 2001. (22) SUBSEQUENT EVENTS (UNAUDITED) On March 7, 2002, Allied Worldwide filed a certificate of amendment to its articles of incorporation with the State of Delaware effecting a change of its name from Allied Worldwide, Inc. to SIRVA, Inc. On March 13, 2002, the Company announced its intention to purchase the National Association of Independent Truckers ("NAIT"), a leading provider of insurance services to independent contract truck drivers, for approximately $30,000 in cash, subject to certain adjustments. NAIT is an association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical damage and non-trucking liability insurance, as well as access to a suite of professional services. The transaction is expected to close approximately April 1, 2002. The purchase price is expected to be funded by cash on hand and an approximately $20,000 equity contribution from Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton, Dubilier & Rice, Inc. ("CD&R Fund VI"), and an affiliate of the controlling shareholder of Allied Worldwide, Clayton, Dubilier & Rice Fund V Limited Partnership. On March 19, 2002, Allied Worldwide entered into a definitive agreement to purchase a business that provides comprehensive relocation services to companies and their employees, including home sale services, relocation logistics services, and mortgage lending services. It is expected that a wholly-owned subsidiary of the Company will purchase all of such business' assets other than assets relating to certain mortgage lending operations of the seller. The Company expects that the purchase of certain assets of the mortgage lending operations of the seller will be structured so that such operations will be owned by a direct wholly-owned subsidiary of Allied Worldwide. Subject to certain adjustments, the purchase price for the acquisition is approximately $60,000, of which approximately $45,000 is payable in cash and $15,000 is payable in notes to be issued by the Company acquisition subsidiary. In addition, certain liabilities relating to the acquired business will be assumed in connection with the acquisition, including indebtedness under a F-52 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (22) SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED) revolving credit facility used to fund the mortgage lending operations, under which as of February 28, 2002 approximately $27,100 was outstanding, and which the Company expects will be assumed by the Allied Worldwide acquisition subsidiary. The Company expects that the cash purchase price for the acquisition, as well as other indebtedness of the acquired business to be assumed as part of the acquisition, which as of February 28, 2002 was approximately $23,800, will be financed with the proceeds of an equity contribution by CD&R Fund VI, the assumption and/or refinancing of such indebtedness and the incurrence of additional senior indebtedness. On March 29, 2002, the Company, per terms of the Credit Agreement, is required to make a $21,900 prepayment of Tranche A and Tranche B debt due to excess cash flow in 2001. A total of $4,188 will replace principle payments due at that time with the remaining $17,712 to reduce future principle payments. (23) SUPPLEMENTAL INFORMATION The following summarized consolidating balance sheets, statements of operations and statements of cash flows were prepared to segregate such financial statements between those entities that have guaranteed the Company's senior subordinated notes issued in connection with the Allied Acquisition ("Guarantor" entities) and those entities that did not guarantee such debt ("Non-Guarantor" entities). See Note 2 for additional information on the Allied Acquisition. F-53 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (23) SUPPLEMENTAL INFORMATION (CONTINUED) Consolidated condensed balance sheet data as of December 31, 2001 and 2000 is summarized as follows:
DECEMBER 31, 2001 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Current assets: Accounts and notes receivable, net... $118,345 $ 92,560 $ 63,795 $ (7,588) $ 267,112 Other current assets................. 43,935 21,701 44,619 (294) 109,961 -------- -------- -------- --------- ---------- Total current assets................... 162,280 114,261 108,414 (7,882) 377,073 -------- -------- -------- --------- ---------- Property and equipment, net............ 72,523 11,687 81,157 -- - 165,367 Goodwill and intangible assets, net.... 409,993 3,236 -- - -- - 413,229 Other assets........................... 279,378 151,257 374,030 (664,520) 140,145 -------- -------- -------- --------- ---------- Total assets........................... $924,174 $280,441 $563,601 $(672,402) $1,095,814 ======== ======== ======== ========= ========== Current liabilities.................... $152,406 $138,820 $122,525 $ (8,454) $ 405,297 Long-term debt and capital lease obligations.......................... 448,225 226 8,325 -- - 456,776 Other liabilities...................... 82,809 25,199 -- - 3,943 111,951 -------- -------- -------- --------- ---------- Total liabilities...................... 683,440 164,245 130,850 (4,511) 974,024 Stockholder's equity................... 240,734 116,196 432,751 (667,891) 121,790 -------- -------- -------- --------- ---------- Total liabilities and stockholder's equity............................... $924,174 $280,441 $563,601 $(672,402) $1,095,814 ======== ======== ======== ========= ==========
DECEMBER 31, 2000 ------------------------------------------------------------------ (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED ---------- ---------- ---------- ------------ ------------ Current assets: Accounts and notes receivable, net.............................. $ 168,318 $142,005 $ 69,528 $ (1,886) $ 377,965 Other current assets............... 58,164 20,069 35,607 11,169 125,009 ---------- -------- -------- --------- ---------- Total current assets................. 226,482 162,074 105,135 9,283 502,974 ---------- -------- -------- --------- ---------- Property and equipment, net.......... 64,864 12,089 81,698 -- 158,651 Goodwill and intangible assets, net................................ 410,257 -- -- -- 410,257 Other assets......................... 412,447 161,313 298,169 (727,209) 144,720 ---------- -------- -------- --------- ---------- Total assets......................... $1,114,050 $335,476 $485,002 $(717,926) $1,216,602 ========== ======== ======== ========= ========== Current liabilities.................. $ 210,522 $155,156 $108,299 $ 15,314 $ 489,291 Long-term debt and capital lease obligations........................ 462,994 525 -- -- 463,519 Other liabilities and minority interest........................... 123,412 -- -- (4,704) 118,708 ---------- -------- -------- --------- ---------- Total liabilities.................... 796,928 155,681 108,299 10,610 1,071,518 Stockholder's equity................. 317,122 179,795 376,703 (728,536) 145,084 ---------- -------- -------- --------- ---------- Total liabilities and stockholder's equity............................. $1,114,050 $335,476 $485,002 $(717,926) $1,216,602 ========== ======== ======== ========= ==========
F-54 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (23) SUPPLEMENTAL INFORMATION (CONTINUED) Consolidated condensed statements of operations data for the years ended December 31, 2001 and 2000 and December 25, 1999 are summarized as follows:
YEAR ENDED DECEMBER 31, 2001 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Operating revenues..................... $824,687 $867,856 $619,686 $(62,926) $2,249,303 Total operating expenses............... 838,363 850,299 570,573 (63,234) 2,196,001 Income (loss) from operations.......... (13,676) 17,557 49,113 308 53,302 Non-operating income (expense) and minority interest.................... 3,147 (43) (3,155) -- (51) -------- -------- -------- -------- ---------- Income (loss) before interest, income taxes and accounting change.......... (10,529) 17,514 45,958 308 53,251 Interest expense (income).............. (16,798) (6,111) (11,183) 96,093 62,001 -------- -------- -------- -------- ---------- Income (loss) before income taxes and accounting change.................... 6,269 23,625 57,141 (95,785) (8,750) Provision (benefit) for income taxes... (19,641) 5,721 15,789 -- 1,869 -------- -------- -------- -------- ---------- Income (loss) before accounting change............................... 25,910 17,904 41,352 (95,785) (10,619) -------- -------- -------- -------- ---------- Cumulative effect of accounting change, net of tax........................... -- -- (328) -- (328) -------- -------- -------- -------- ---------- Net income (loss)...................... $ 25,910 $ 17,904 $ 41,024 $(95,785) $ (10,947) ======== ======== ======== ======== ==========
YEAR ENDED DECEMBER 31, 2000 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Operating revenues..................... $919,362 $934,549 $567,959 $(43,176) $2,378,694 Total operating expenses............... 932,364 914,544 526,271 (44,330) 2,328,849 -------- -------- -------- -------- ---------- Income (loss) from operations.......... (13,002) 20,005 41,688 1,154 49,845 Non-operating income (expense) and minority interest.................... 3,257 (200) (2,739) -- 318 -------- -------- -------- -------- ---------- Income (loss) before interest and income taxes......................... (9,745) 19,805 38,949 1,154 50,163 Interest expense (income).............. 66,022 1,199 (748) 778 67,251 -------- -------- -------- -------- ---------- Income (loss) before income taxes...... (75,767) 18,606 39,697 376 (17,088) Provision (benefit) for income taxes... (23,268) 5,484 17,775 -- (9) -------- -------- -------- -------- ---------- Net income (loss)...................... $(52,499) $ 13,122 $ 21,922 $ 376 $ (17,079) ======== ======== ======== ======== ==========
F-55 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (23) SUPPLEMENTAL INFORMATION (CONTINUED)
YEAR ENDED DECEMBER 25, 1999 ---------------------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS ELIMINATIONS CONSOLIDATED -------- ---------- ---------- ------------ ------------ Operating revenues..................... $872,932 $131,972 $172,157 $(17,274) $1,159,787 Total operating expenses............... 879,589 132,581 166,008 (17,274) 1,160,904 -------- -------- -------- -------- ---------- Income (loss) from operations.......... (6,657) (609) 6,149 -- (1,117) Non-operating income (expense) and minority interest.................... 76 (379) (165) -- (468) -------- -------- -------- -------- ---------- Income (loss) before interest, income taxes and extraordinary loss......... (6,581) (988) 5,984 -- (1,585) Interest expense (income).............. 25,750 (5,091) (290) 1,040 21,409 -------- -------- -------- -------- ---------- Income (loss) before income taxes and extraordinary loss................... (32,331) 4,103 6,274 (1,040) (22,994) Provision (benefit) for income taxes... (12,779) 2,048 4,284 -- (6,447) -------- -------- -------- -------- ---------- Income (loss) before extraordinary loss................................. (19,552) 2,055 1,990 (1,040) (16,547) Extraordinary loss on debt extinguish- ment, net of income tax benefit...... (3,387) -- -- -- (3,387) -------- -------- -------- -------- ---------- Net income (loss)...................... $(22,939) $ 2,055 $ 1,990 $ (1,040) $ (19,934) ======== ======== ======== ======== ==========
F-56 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (23) SUPPLEMENTAL INFORMATION (CONTINUED) Consolidated condensed statements of cash flows data for the years ended December 31, 2001 and 2000 and December 25, 1999 are summarized as follows:
YEAR ENDED DECEMBER 31, 2001 ------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS CONSOLIDATED -------- ---------- ---------- ------------ Net cash provided by (used in) operating activities........................................ $ 82,473 $ (673) $ 29,523 $111,323 -------- ------- -------- -------- Cash flows from investing activities: Additions of property and equipment............. (24,431) (2,970) (20,947) (48,348) Proceeds from sale of property and equipment.... 1,810 553 1,114 3,477 Purchases of investments........................ -- -- (87,305) (87,305) Proceeds from maturity or sale of investments... -- -- 81,905 81,905 Payment of agent contract costs................. (1,371) -- -- (1,371) Acquisitions (net of cash acquired)............. -- (4,000) -- (4,000) Settlement of acquisition purchase price dispute....................................... (17,357) -- -- (17,357) -------- ------- -------- -------- Net cash used in investing activities............. (41,349) (6,417) (25,233) (72,999) -------- ------- -------- -------- Cash flows from financing activities: Borrowings from revolving credit facility, net........................................... (36,508) -- (1,435) (37,943) Change in balance of outstanding checks......... (2,815) 8,081 (9,348) (4,082) Borrowings on long-term debt.................... 672 -- -- 672 Sale of equipment notes receivable.............. -- 6,317 -- 6,317 Principal payments on long-term debt............ (11,833) -- -- (11,833) Principal payments under capital lease obligations................................... (2,159) (81) (242) (2,482) Other financing activities...................... -- (243) -- (243) -------- ------- -------- -------- Net cash provided by (used for) financing activities........................................ (52,643) 14,074 (11,025) (49,594) -------- ------- -------- -------- Effect of translation adjustment on cash.......... -- -- (120) (120) -------- ------- -------- -------- Net increase (decrease) in cash and cash equivalents....................................... (11,519) 6,984 (6,855) (11,390) Cash and cash equivalents at beginning of period............................................ 17,516 (2,969) 28,962 43,509 -------- ------- -------- -------- Cash and cash equivalents at end of period........ $ 5,997 $ 4,015 $ 22,107 $ 32,119 ======== ======= ======== ========
F-57 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (23) SUPPLEMENTAL INFORMATION (CONTINUED)
YEAR ENDED DECEMBER 31, 2000 ------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS CONSOLIDATED -------- ---------- ---------- ------------ Net cash provided by (used in) operating activities........................................ $ 27,157 $(5,676) $ 31,332 $ 52,813 -------- ------- -------- -------- Cash flows from investing activities: Additions of property and equipment............. (30,014) (3,952) (21,411) (55,377) Proceeds from sale of property and equipment.... 15,086 -- 506 15,592 Purchases of investments........................ (800) -- (55,141) (55,941) Proceeds from maturity or sale of investments... -- -- 49,353 49,353 Payment of agent contract costs................. (1,120) (1,113) -- (2,233) Acquisitions (net of cash acquired)............. (4,200) -- (1,580) (5,780) -------- ------- -------- -------- Net cash used in investing activities............. (21,048) (5,065) (28,273) (54,386) -------- ------- -------- -------- Cash flows from financing activities: Borrowings from revolving credit facility, net........................................... 18,330 -- 184 18,514 Change in balance of outstanding checks......... 9,980 209 (23) 10,166 Sale of equipment notes receivable.............. -- 11,121 -- 11,121 Principal payments on long-term debt............ (6,811) -- -- (6,811) Principal payments under capital lease obligations................................... (4,315) (91) -- (4,406) Payment for transfer of insurance liabilities... (6,672) -- -- (6,672) Other financing activities...................... -- (99) -- (99) -------- ------- -------- -------- Net cash provided by financing activities......... 10,512 11,140 161 21,813 -------- ------- -------- -------- Effect of translation adjustment on cash.......... -- -- (1,886) (1,886) -------- ------- -------- -------- Net increase in cash and cash equivalents......... 16,621 399 1,334 18,354 Cash and cash equivalents at beginning of period............................................ 894 (3,368) 27,629 25,155 -------- ------- -------- -------- Cash and cash equivalents at end of period........ $ 17,515 $(2,969) $ 28,963 $ 43,509 ======== ======= ======== ========
F-58 NORTH AMERICAN VAN LINES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) AT DECEMBER 31, 2001 AND 2000 (DOLLARS IN THOUSANDS) (23) SUPPLEMENTAL INFORMATION (CONTINUED)
YEAR ENDED DECEMBER 25, 1999 -------------------------------------------------- (2) (1) TOTAL NON- NAVL PARENT GUARANTORS GUARANTORS CONSOLIDATED --------- ---------- ---------- ------------ Net cash provided by (used in) operating activities....................................... $ (10,799) $(3,842) $26,228 $ 11,587 --------- ------- ------- --------- Cash flows from investing activities: Additions of property and equipment............ (8,689) -- (4,038) (12,727) Proceeds from sale of property and equipment... 3,437 -- 14 3,451 Purchases of investments....................... -- -- (4,047) (4,047) Proceeds from maturity or sale of investments.................................. -- -- 2,583 2,583 Payment of agent contract costs................ (1,825) -- -- (1,825) Acquisitions (net of cash acquired)............ (396,371) -- -- (396,371) --------- ------- ------- --------- Net cash used in investing activities............ (403,448) -- (5,488) (408,936) --------- ------- ------- --------- Cash flows from financing activities: Debt issuance costs............................ (19,208) -- -- (19,208) Borrowings from revolving credit facility, net.......................................... 41,929 -- -- 41,929 Change in balance of outstanding checks........ 2,548 53 (23) 2,578 Borrowings on long-term debt................... 475,000 -- -- 475,000 Principal payments on long-term debt........... (143,018) -- -- (143,018) Principal payments under capital lease obligations.................................. (87) -- -- (87) Payment for transfer of insurance liabilities.................................. (10,865) -- -- (10,865) Proceeds from capital contribution from parent....................................... 73,950 -- -- 73,950 Other financing activities..................... -- 326 -- 326 --------- ------- ------- --------- Net cash provided by (used in) financing activities....................................... 420,249 379 (23) 420,605 --------- ------- ------- --------- Effect of translation adjustments on cash........ (175) -- -- (175) --------- ------- ------- --------- Net increase (decrease) in cash and cash equivalents...................................... 5,827 (3,463) 20,717 23,081 Cash and cash equivalents at beginning of period........................................... 311 95 1,668 2,074 --------- ------- ------- --------- Cash and cash equivalents at end of period....... $ 6,138 $(3,368) $22,385 $ 25,155 ========= ======= ======= =========
- ------------------------ (1) Parent includes the accounts of North American Van Lines, Inc., a Delaware corporation and the issuer of the debt. (2) Total Guarantors include the accounts of the following subsidiaries of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc.; Fleet Insurance Management, Inc., an Indiana corporation; FrontRunner Worldwide, Inc., a Delaware corporation; NACAL, Inc., a California corporation; NAVTRANS International Freight Forwarding, Inc., an Indiana corporation; Federal Traffic Services, Inc., an Indiana corporation; North American Logistics. Ltd., an Indiana corporation; North American Van Lines of Texas, Inc., a Texas corporation; Relocation Management Systems, Inc., a Delaware corporation; Great Falls North American, Inc., a Montana corporation; Allied Van Lines, Inc., a Delaware corporation; Allied International N.A., Inc. a Delaware corporation; A Relocation Solutions Management Company, Inc., a Delaware corporation; Vanguard Insurance Agency, Inc., an Illinois corporation; Allied Van Lines Terminal Company, Inc., a Delaware corporation; Meridian Mobility Resources, Inc., a Delaware corporation; and Allied Freight Forwarding, Inc., a Delaware corporation. Each Guarantor is a wholly owned subsidiary of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc. and will jointly and severally, irrevocably and fully and unconditionally guarantee the punctual payment of such debt used in connection with the Allied acquisition. F-59 SCHEDULE II NORTH AMERICAN VAN LINES, INC. VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000 AND DECEMBER 25, 1999 (in thousands)
COL. A COL. B COL. C COL. D COL. E - ------------------------------------------- ---------- ------------------------ ------------- --------- ADDITIONS ------------------------ CHARGED TO OTHER BALANCE AT CHARGED TO BALANCE BEGINNING COSTS AND AT END DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(A) DEDUCTIONS(B) OF PERIOD - ------------------------------------------- ---------- ---------- ----------- ------------- --------- 2001: Allowance for doubtful accounts.......... $26,721 $5,558 $ -- $(7,893) $24,386 Valuation allowance for contracts receivable............................... 255 112 -- -- 367 ------- ------ ------- ------- ------- $26,976 $5,670 $ -- $(7,893) $24,753 ======= ====== ======= ======= ======= 2000: Allowance for doubtful accounts.......... $18,771 $7,131 $ 1,194 $ (375) $26,721 Valuation allowance for contracts receivable............................... 255 -- -- -- 255 ------- ------ ------- ------- ------- $19,026 $7,131 $ 1,194 $ (375) $26,976 ======= ====== ======= ======= ======= 1999: Allowance for doubtful accounts.......... $11,656 $2,775 $ 6,391 $(2,051) $18,771 Valuation allowance for contracts receivable............................... 25 230 -- -- 255 ------- ------ ------- ------- ------- $11,681 $3,005 $ 6,391 $(2,051) $19,026 ======= ====== ======= ======= =======
- ------------------------ (a) Primarily related to acquisitions. (b) Primarily related to write-offs of accounts receivable, net of recoveries and currency translation. F-60 [LOGO] NFC MOVING SERVICES GROUP REPORT OF INDEPENDENT AUDITORS To: The Board of Directors Exel plc We have audited the combined profit & loss account and combined statement of total recognised gains and losses, cash flows and NFC Group Investment of NFC Moving Services Group for the year ended September 30, 1999. These financial statements are the responsibility of the management of NFC Moving Services Group. Our responsibility is to form an opinion on these financial statements based on our audit. We conducted our audit in accordance with United Kingdom auditing standards and United States generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined results of operations and combined cash flows of NFC Moving Services Group for the year ended September 30, 1999 in conformity with accounting principles generally accepted in the United Kingdom which differ in certain respects from those generally accepted in the United States (see Note 16 of Notes to the Combined Financial Statements). [LOGO] ERNST & YOUNG London, England March 10, 2000 F-61 NFC MOVING SERVICES GROUP COMBINED PROFIT AND LOSS ACCOUNT
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) TURNOVER--(Note 4).......................................... 717.5 ===== Operating profit (i)--(Note 7) Before exceptional items.................................... 29.1 Exceptional costs of reorganization......................... (1.3) ----- Total operating profit...................................... 27.8 Profit on disposals of properties........................... 0.4 ----- PROFIT BEFORE INTEREST...................................... 28.2 Interest (net) (ii)--(Note 8)............................... (3.4) ----- Profit before tax and exceptional items..................... 25.7 Exceptional items........................................... (0.9) ----- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION............... 24.8 Taxation (ii)--(Note 9)..................................... (7.0) ----- PROFIT FOR THE FINANCIAL YEAR (i) (ii)...................... 17.8 =====
- ------------------------ (i) A summary of the significant adjustments to profit for the financial year which would be required if US generally accepted accounting principles had been applied instead of those generally accepted in the United Kingdom is given in Note 16 of Notes to the Combined Financial Statements. (ii) Interest (net) and taxation are not necessarily representative of the income and charges that would have been earned or incurred by NFC Moving Services Group on a stand-alone basis or that will be earned or incurred by NFC Moving Services Group in the future. F-62 NFC MOVING SERVICES GROUP COMBINED STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) PROFIT FOR THE FINANCIAL YEAR............................... 17.8 Exchange differences........................................ 0.6 Unrealized surplus on revaluation of properties............. 0.6 ---- TOTAL GAINS AND LOSSES RELATING TO THE YEAR (i)............. 19.0 ====
- ------------------------ (i) The significant differences between the combined statement of total recognized gains and losses presented above and the combined statement of comprehensive income required under US generally accepted accounting principles are described in Note 16 of Notes to the Combined Financial Statements. COMBINED STATEMENT OF HISTORICAL COST PROFITS AND LOSSES
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION............... 24.8 Difference between depreciation based on historical costs and on revalued amounts................................... 0.2 ---- HISTORICAL COST PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION.................................................. 25.0 ==== Historical cost profit for the financial year............... 18.0 ====
F-63 NFC MOVING SERVICES GROUP COMBINED CASH FLOW STATEMENT (I)
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- NET CASH INFLOW FROM OPERATING ACTIVITIES................... 35.1 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received........................................... 3.1 Interest paid............................................... (0.1) NFC Group interest (net).................................... (6.4) ----- NET CASH (OUTFLOW)/INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (II)................................. (3.4) TAXATION UK corporation tax paid..................................... (0.2) Overseas tax paid........................................... (4.9) NFC Group tax (net)......................................... (3.3) ----- TAX PAID (II)............................................... (8.4) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Purchases of property, plant and equipment.................. (15.9) Purchases of investments (net).............................. (4.4) Disposals of property, plant and equipment.................. 3.4 ----- NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT................................................ (16.9) ----- FREE CASH FLOW.............................................. 6.4 ACQUISITIONS AND DISPOSALS Purchases of subsidiary undertakings--(Note 14)............. (10.3) ===== NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING.................. (3.9) NET CASH INFLOW/(OUTFLOW) FROM FINANCING (II)--(NOTE 14).... 14.2 ----- INCREASE IN CASH--(NOTE 14)................................. 10.3 ===== RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOW OPERATING PROFIT............................................ 27.8 Depreciation and amortization............................... 10.3 Profit on disposals of tangible fixed assets................ (0.4) Movements in provisions--(Note 14).......................... 0.9 Movements in working capital--(Note 14)..................... (3.5) ----- NET CASH INFLOW FROM OPERATING ACTIVITIES................... 35.1 =====
- ------------------------ (i) The significant differences between the combined cash flow statements presented above and those required under US generally accepted accounting principles are described in Note 16 of Notes to the Combined Financial Statements. (ii) Net interest received/(paid), tax paid and financing cash flows are not necessarily representative of the amounts that would have occurred in NFC Moving Services Group on a stand-alone basis or that will occur in NFC Moving Services Group in the future. F-64 NFC MOVING SERVICES GROUP COMBINED STATEMENT OF CHANGES IN NFC GROUP INVESTMENT
SEPTEMBER 30 ------------------ 1999 ---- (L MILLION) Profit for the financial year............................ 17.8 NFC Group funding/(divestment (net)...................... (136.5) Unrealized surplus on revaluation of properties.......... 0.6 Goodwill on acquisitions................................. -- Exchange differences..................................... 0.6 ------ Movement in year......................................... (119.5) Opening balance.......................................... 49.2 ------ Closing balance(i)....................................... (70.3) ======
- ------------------------ (i) At September 30, 1999, the cumulative goodwill written off, excluding that relating to undertakings disposed of, was L69.4 million. F-65 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS NOTE 1 -- BASIS OF PREPARATION On November 19, 1999, NA Holding Corporation acquired all of the moving services businesses and assets (NFC Moving Services Group) of Exel plc (formerly NFC plc, the company having changed its name on February 23, 2000). These combined financial statements have been prepared to show the performance of NFC Moving Services Group for the year ended September 30, 1999 as if it had been in existence from October 1, 1996. They are based on the audited financial information of the NFC Group as if the businesses which comprise NFC Moving Services Group had been part of NFC Moving Services Group for all of this period. The funding of NFC Moving Services Group's operations included share capital, loans from NFC plc group companies (both interest free and interest bearing) and/or external borrowings. These combined financial statements include interest income and expense actually earned by or charged to NFC Moving Services Group in respect of external deposits or borrowings or deposits with or borrowings from members of the NFC Group not included in NFC Moving Services Group. These amounts are not necessarily representative of the amounts that would have been earned or incurred by NFC Moving Services Group on a stand-alone basis or that will arise in NFC Moving Services Group in the future. The businesses within NFC Moving Services Group have been included in the tax arrangements of the NFC Group. These combined financial statements include tax charges and cash flows actually borne by the businesses within NFC Moving Services Group. These charges and cash flows are not necessarily representative of the charges or cash flows that would have arisen in NFC Moving Services Group on a stand-alone basis or that will arise in NFC Moving Services Group in the future. These combined financial statements include an allocation of NFC Group's central overhead costs based on the level of operating profit. Management believes that this is a reasonable basis for allocation. These amounts are not necessarily representative of the amounts that would have arisen in NFC Moving Services Group on a stand-alone basis or that will arise in NFC Moving Services Group in the future. NOTE 2 -- ACCOUNTING POLICIES (A) ACCOUNTING CONVENTION The combined financial statements are prepared under the historical cost convention as modified by the revaluation of certain land and buildings and are in accordance with all applicable UK accounting standards. Operational freehold and long leasehold land and buildings are revalued to existing use value over a five year rolling period. With effect from October 1, 1998, new UK Financial Reporting Standards (FRS) will apply to the financial statments of NFC Moving Services Group. Restructuring costs are now charged to the combined profit and loss account in the period in which the expense was committed, as required by FRS 12, Provisions, Contingent Liabilities and Contingent Assets, which has been applied in these combined financial statements. From the same date, goodwill on acquisitions is capitalized and amortized over its useful life in accordance with FRS 10, Goodwill and Intangible Assets. (B) FOREIGN CURRENCIES Assets, liabilities, revenues and costs denominated in foreign currencies are recorded at the rates of exchange ruling at the date of the transactions; monetary assets and liabilities at balance sheet dates are F-66 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 2 -- ACCOUNTING POLICIES (CONTINUED) translated at year-end rates of exchange. All exchange differences thus arising are reported as part of the result for the relevant year. On combination, the results of businesses accounting in foreign currencies are translated at average rates of exchange ruling during the relevant year. The assets and liabilities of such businesses are translated at rates ruling at balance sheet dates. Differences arising on net investment in overseas businesses are taken to NFC Group Investment. (C) FIXED ASSETS AND DEPRECIATION Depreciation of property, plant and equipment (excluding freehold land, which is not depreciated) is calculated on the straight line basis at rates estimated to write off the whole of the revalued amount or cost of each asset over its estimated useful life. Assets which are not expected to be held for the whole of their useful life are written down to estimated residual values at the expected times of disposal. The categories of property, plant and equipment are as follows. Freehold buildings....................... The maximum useful life is estimated as 50 years. Leasehold land and buildings............. Costs are written off over the terms of the leases, or, in respect of buildings, the estimated remaining life if shorter. Revenue earning vehicles, plant and Estimated lives are mainly five to ten equipment.............................. years with a few exceptions for specialized equipment, for which the maximum estimated life is 15 years.
Disposals of land and buildings are taken into account when sale agreements have been entered into prior to the balance sheet date, provided that the disposal has been completed before the UK statutory accounts are approved. (D) LEASED ASSETS Assets held under leasing arrangements which transfer substantially all the risks and rewards of ownership to the businesses are capitalized. The capital element of the related rental obligations is included in accounts payable. The interest element of the rental obligations is charged to the profit and loss account so as to produce a constant periodic rate of charge on the remaining balance of the obligation. Hire purchase arrangements, which are not separately distinguished, are dealt with similarly. Rentals for other leased assets acquired under the terms of operating leases are charged directly to the profit and loss account on the straight line basis over the terms of the leases. (E) TURNOVER Turnover comprises the value of charges, exclusive of value added tax and equivalent taxes, made to outside parties for services rendered. F-67 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 2 -- ACCOUNTING POLICIES (CONTINUED) (F) GOODWILL Goodwill arising on acquisitions is set off against NFC Group Investment. From October 1, 1998, goodwill is capitalized and amortized over its useful life in accordance with FRS 10. On the disposal of a business, any goodwill relating thereto that can be identified and has not previously been charged to profit and loss account is included in the profit or loss on disposal. (G) DEFERRED TAXATION Deferred taxation is provided at expected future rates of tax on all timing differences to the extent that it is probable that a liability or asset will crystallize. (H) PENSIONS The UK businesses included in these financial statements contribute to the NFC Retirement Plan for the funding of retirement benefits for each scheme member during his or her working life in order to pay benefits to them after retirement and to their dependents after their death. The regular cost of providing these benefits is assessed by external professional actuaries and is charged to the combined profit and loss account. Overseas businesses make provisions for pensions in accordance with local law and practice. There are no other post-retirement benefits. (I) SURPLUS PROPERTIES When leasehold properties become surplus to requirements, a provision for holding costs through to estimated disposal dates is charged to the combined profit and loss account. NOTE 3 -- EXCHANGE RATES The significant exchange rates relative to L sterling used in the preparation of these financial statements are as follows. Average rates are weighted according to monthly net sales.
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ----------------------- AVERAGE YEAR END RATE RATE ---------- ---------- Australian dollar...................................... 2.55 2.52 United States dollar................................... 1.63 1.65 ==== ====
F-68 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 4 -- TURNOVER
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) United Kingdom and Ireland.............................. 126.5 Continental Europe...................................... 21.8 Americas................................................ 516.2 Asia Pacific............................................ 53.0 ----- 717.5 =====
The analysis of turnover is by management structure. The analysis by destination would not be materially different. Turnover between geographical segments is not material. NOTE 5 -- OPERATING CHARGES
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- Raw materials, consumables and other purchases.......... 11.2 Staff costs wages and salaries.................................... 88.8 social security costs................................. 7.9 other pension costs -- (Note 11)...................... 3.8 Depreciation............................................ 10.1 Amortization............................................ 0.2 Operating lease rentals (including short-term hire) vehicles, plant and equipment......................... 6.6 land and buildings.................................... 12.5 Redundancy.............................................. 0.2 Auditors' remuneration.................................. 0.2 Exceptional costs of reorganization..................... 1.3 Sub-contractors' and agents' charges.................... 453.9 Other operating charges................................. 93.0 ----- 689.7 =====
The remuneration of the auditors for non-audit work amounted to Lnil in respect of UK businesses and L0.1 million in respect of overseas businesses. F-69 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 6 -- EMPLOYEES The average number of persons employed during the year was as follows:
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- United Kingdom and Ireland.............................. 1,759 Continental Europe...................................... 340 Americas................................................ 861 Asia Pacific............................................ 839 ----- 3,799 =====
The number of persons employed at the end of the year was as follows:
SEPTEMBER 30 ------------ 1999 ---- United Kingdom and Ireland.............................. 1,848 Continental Europe...................................... 326 Americas................................................ 849 Asia Pacific............................................ 824 ----- 3,847 =====
NOTE 7 -- OPERATING PROFIT
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- United Kingdom and Ireland.............................. 12.3 Continental Europe...................................... 1.2 Americas................................................ 12.6 Asia Pacific............................................ 3.0 ---- 29.1 Exceptional items United Kingdom and Ireland............................ (0.4) Continental Europe.................................... (0.9) Americas.............................................. -- ---- 27.8 ====
F-70 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 8 -- INTEREST (NET) (I)
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- Interest on bank loans and overdrafts................... (0.1) NFC Group interest payable.............................. (7.4) ---- (7.5) Interest income......................................... 3.1 NFC Group interest receivable........................... 1.0 ---- (3.4) ====
- ------------------------ (i) As explained in Note 1, interest (net) is not necessarily representative of the income and charges that would have been reported by NFC Moving Services Group on a stand-alone basis or that will be reported by NFC Moving Services Group in the future. NOTE 9 -- TAXATION (I) The analysis of the taxation charge is as follows:
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) UK corporation tax at 30.5%............................. 2.6 Double taxation relief.................................. (0.1) Deferred corporation tax................................ 1.2 Overseas taxes -- current............................... 2.5 -- deferred.............................. 0.8 ---- 7.0 ====
- ------------------------ (i) As explained in Note 1, taxation is not necessarily representative of the charges that would have been reported by NFC Moving Services Group on a stand-alone basis or that will be reported by NFC Moving Services Group in the future. F-71 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 10--PROVISIONS FOR LIABILITIES AND CHARGES
SURPLUS DEFERRED PROPERTIES INSURANCE TAXATION OTHER TOTAL ---------- --------- -------- -------- -------- October 1, 1998.................................... 0.8 24.9 (0.3) 0.8 26.2 Exchange differences............................... -- 0.7 (0.1) -- 0.6 Charged to profit and loss account................. (0.2) 44.4 2.0 0.1 46.3 Utilized........................................... (0.3) (43.0) -- (0.1) (43.4) ---- ----- ----- ---- ----- September 30, 1999................................. 0.3 27.0 1.6 0.8 29.7 ==== ===== ===== ==== =====
The major components of the provision for deferred taxation and the amounts not provided are as follows:
PROVIDED NOT PROVIDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 1999 1999 ------------- ------------- (L MILLION) (L MILLION) Accelerated tax depreciation................................ 2.2 2.6 Other (provisions, losses, etc.)............................ (0.6) (10.8) ---- ----- 1.6 (8.2) ==== =====
The above summary does not include any liability to tax on capital gains which might arise if land and buildings were to be sold at their revalued amounts. NOTE 11--PENSIONS The UK businesses covered by these combined financial statements participate in the NFC Retirement Plan which is fully funded. It is a defined benefit plan, except for that part of it for members under 40 which is a defined contribution plan. The assets of the Plan are held in trust funds independent of the participating businesses. The Plan has a surplus which is recognized and disclosed in the financial statements of NFC plc but none of which has been allocated to any of the businesses covered by these financial statements. Employer and employee contributions to the Plan are determined across participating businesses in the NFC Group in consultation with external professional actuaries, whose latest valuation was made as at March 31, 1997. The charge in these combined financial statements in respect of the Plan is the regular cost of benefits accruing. The majority of overseas plans are defined contribution plans. The Allied Van Lines retirement program consisted of a defined benefit plan and a defined contribution plan. These plans were terminated on December 31, 1997 and the accrued benefits frozen. The terminated plans have been replaced by defined contribution plans. The latest actuarial valuations of overseas defined benefit plans show that they are adequately funded. NOTE 12--CONTINGENT LIABILITIES The nature of the businesses included in these financial statements and the extent of their operations are such that they are from time to time involved in legal proceedings, as plaintiff or defendant. No such proceedings as at September 30, 1999, are expected to have a material effect on these businesses. F-72 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 12--CONTINGENT LIABILITIES (CONTINUED) One of the UK businesses included in these financial statements, together with businesses not so included, has given cross guarantees to and entered into set off arrangements with bankers which guarantee and offset any monies owing or owed from time to time, including principal, interest and other related charges, in respect of the cash management facilities of the NFC Group. At September 30, 1999, the relevant business had a contingent liability under these arrangements of L2.7m. Its contingent liabilities under these arrangements were terminated on the change of ownership on November 19, 1999 (see Note 1). Some of the companies included in these financial statements are guarantors of agreements entered into by Exel plc (formerly NFC plc) for the provision of borrowing facilities and they are jointly and severally liable for all borrowing thereunder. At September 30, 1999, there were no drawings under these facilities and the contingent liabilities were terminated on November 19, 1999. One of the businesses included in these financial statements is a user and another is a guarantor of letters of credit made in the ordinary course of business; no liabilities are expected to arise under these arrangements. The guarantor was released on November 19, 1999. For VAT purposes, the UK businesses included in these financial statements were, until September 30, 1998, members of the Pickfords VAT group, under which they had joint and several liability for amounts due by other members of that group. From that date until November 19, 1999, those businesses were members of the NFC VAT group and they are jointly and severally liable for amounts due by other members (including businesses not included in these financial statements) of that VAT group. Since November 19, 1999, those businesses have been members of the Pickfords VAT group and they are jointly and severally liable for amounts due by other members of that VAT group. NOTE 13--ACQUISITION The assets and liabilities acquired with the business of Pickfords Vanguard on November 16, 1998 were as follows (with the fair values being the book values):
FAIR VALUES ----------- (L MILLION) Property, plant and equipment............................... 0.9 Net debt.................................................... (0.1) Other current assets........................................ 5.3 Other current liabilities................................... (1.4) ---- 4.7 Goodwill.................................................... 5.9 ---- Consideration and costs..................................... 10.6 ====
F-73 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 14--CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED SEPTEMBER 30 ------------ 1999 ---- (L MILLION) MOVEMENTS IN PROVISIONS Insurance................................................... 1.4 Surplus property............................................ (0.5) ---- 0.9 ==== MOVEMENTS IN WORKING CAPITAL Inventories................................................. (0.1) Receivables................................................. (7.5) Payables.................................................... 4.1 ---- (3.5) ==== ACQUISITIONS Consideration and costs..................................... 10.6 Deferred consideration...................................... (0.3) ---- Cash paid................................................... 10.3 ==== FINANCING NFC Group funding (net)..................................... 14.2 ====
CASH
BANK CASH OVERDRAFTS TOTAL -------- ---------- -------- (L MILLION) October 1, 1998....................................... 18 (2.2) 15.8 Exchange differences.................................. 0.5 (0.1) 0.4 Movements............................................. 12.1 (1.8) 10.3 ---- ---- ---- September 30, 1999.................................... 30.6 (4.1) 26.5 ==== ==== ====
F-74 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 14--CONSOLIDATED CASH FLOW STATEMENT (CONTINUED) RECONCILIATION OF CASH
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) Net cash inflow before financing........................ (3.9) Exchange differences.................................... 0.4 Net NFC Group funding................................... 14.2 ---- Movement in net cash.................................... 10.7 Net cash at beginning of year........................... 15.8 ---- Net cash at end of year................................. 26.5 ====
ANALYSIS OF NET CASH
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) Cash at bank and in hand................................ 30.6 Overdrafts.............................................. (4.1) ---- 26.5 ====
NOTE 15--RELATED PARTY TRANSACTIONS NFC Moving Services Group does not operate as a separate group and consequently there were a number of transactions between its businesses and companies and other businesses and companies within the NFC Group in the year ended September 30, 1999. These included transactions relating to insurance management and underwriting, pension administration, treasury, property and taxation management and other central services supplied by Exel plc (formerly NFC plc). The transactions have not been identified individually as it is not practical to do so. Transitional arrangements have been agreed for the provision on normal commercial terms of pensions administration and certain other central services for periods after the acquisition. NOTE 16-- DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The accounting policies under which these combined financial statements have been prepared conform with accounting principles generally accepted in the United Kingdom ("UK GAAP"). Such principles differ from those generally accepted in the United States ("US GAAP") in the following significant respects. TAXATION: Deferred taxation is provided at expected future rates of tax using the liability method on all material timing differences where, in the opinion of the Directors, liabilities or assets will crystallize in the forseeable future. Under US GAAP, deferred tax is recognized on all temporary differences between the tax and book bases of assets and liabilities including the differences between the assigned fair values and tax bases of assets and liabilities acquired, subject to a valuation allowance if it is more likely than not that some or all of a deferred tax asset will not be realised. The taxation charges included in these combined financial statements are not representative of those that would have arisen in NFC Moving Services Group F-75 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 16-- DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED) on a stand-alone basis or would arise in NFC Moving Services Group in the future. The reconciliations below include adjustments required to show taxation charges on a stand-alone basis. DISPOSAL OF PROPERTY: Profits and losses on the disposal of property are taken into account where sale agreements have been entered into prior to the accounting date and completion of such agreements has taken place before the date of approval of the UK statutory accounts. Under US GAAP such profits and losses would only be accounted for if completion had taken place on or before the accounting date. REVALUATIONS OF LAND AND BUILDINGS: Certain properties were revalued at September 30, 1995, April 30, 1996, April 30, 1997, April 30, 1998 and April 30, 1999 and those revaluations have been incorporated in the financial statements. Accordingly, in subsequent years the amortization and depreciation charges are based on the relevant valuations. Under US GAAP property is shown at cost and amortization and depreciation charges are related thereto. STAFF COSTS: The Group's policy in respect of holiday pay is to charge it as it is paid. US GAAP require that account must be taken of all such payments due but not paid. PENSION COSTS: Provision is made for the cost of retirement benefits payable by the NFC Retirement Plan as assessed by external professional actuaries and is charged to the profit and loss account so as to spread the cost over the period during which the employer derives benefit from the employee's services. Under US GAAP, the NFC Retirement Plan would be treated as a multiemployer plan. As such, the contributions made to the Plan would be recognized as the pension cost in the year. These financial statements include the regular cost of pensions which are paid to a company in the NFC Group. As these contributions are not paid by that company to the Plan, they would, under US GAAP, be treated as distributions to the NFC Group and would be included in NFC Group Investment. INVESTMENTS: Under UK GAAP, investments are stated at cost less any provision for permanent diminution in value. Under US GAAP investments available for sale are included at market value. Under US GAAP, unrealized gains on investments are included in comprehensive income. GOODWILL: Goodwill arising on acquisitions is written off to NFC Group Investment on acquisition and, on the subsequent sale of a business, is taken into account in the determination of the gain or loss on sale. Under US GAAP, goodwill is amortized over its estimated useful life not exceeding 40 years. For the purposes of the summary below goodwill has been amortized over its estimated useful life which is estimated to range from 10 to 40 years. From October 1, 1998, goodwill is capitalized and amortized over its useful life in accordance with FRS 10. On the sale of a business, any unamortized goodwill relating thereto would be taken into account in the determination of the gain or loss on the sale. For the purposes of US GAAP, the businesses periodically evaluate the recoverability of goodwill based on estimates of future profitability. If an impairment is determined, the amount of such impairment is calculated based on estimated recoverability. EXCEPTIONAL ITEMS: Under US GAAP, the presentation of operating profit before exceptional items and profit before tax and exceptional items is not permitted. The amounts reported as exceptional items, which include the profit or loss on disposals of properties and the loss on disposal of operations reported after operating profit under UK GAAP, would be included in the determination of operating profit under US GAAP. F-76 NFC MOVING SERVICES GROUP NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED) NOTE 16-- DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (CONTINUED) The effect of the significant adjustments to profit for the financial year, comprehensive income and NFC Group Investment which would be required if US GAAP had been applied instead of UK GAAP is summarized below. PROFIT FOR THE FINANCIAL YEAR
YEAR ENDED SEPTEMBER 30 ----------------------- 1999 ---- (L MILLION) Profit for the financial year as reported..................... 17.8 US GAAP adjustments: Operating charges Staff costs -wages and salaries............ 0.8 -pensions...................... 1.7 Depreciation and -goodwill...................... (0.9) amortization -revaluation of land and buildings.................... 0.2 Taxation -- stand-alone adjustment............................ (0.9) Deferred taxation -methodology................... 0.8 -on adjustments above.......... (1.7) ---- -- ---- Profit for the financial year as adjusted to accord with US GAAP.......................................................... 17.8 ==== COMPREHENSIVE INCOME Total recognized gains and losses as reported................. 19.0 US GAAP adjustments: Adjustments to profit for the financial year as above......... -- Unrealized surplus on revaluation of properties............... (0.6) Unrealized holding losses on investments...................... (1.0) Deferred taxation on unrealized holding gains/(losses) on investments................................................... 0.4 ---- Comprehensive income in accordance with US GAAP............... 17.8 ====
F-77 - -------------------------------------------------------------------------------- PROSPECTUS - -------------------------------------------------------------------------------- NORTH AMERICAN VAN LINES, INC. OFFER TO EXCHANGE ITS 13 3/8% SENIOR SUBORDINATED NOTES DUE 2009 , 2002 - -------------------------------------------------------------------------------- DEALER PROSPECTUS DELIVERY OBLIGATION Until , 2002, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS North American Van Lines' Restated Certificate of Incorporation and its By-Laws, as amended, authorize the indemnification of officers and directors of the corporation consistent with Section 145 of the Delaware Corporation Law, as amended, and to the full extent permitted under Delaware law. Section 145 of the Delaware Corporation Law, as amended, provides in regards to indemnification of directors and officers as follows: "145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE.--(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in II-1 subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. (e) Expenses (including attorney's fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. (h) For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person." II-2 Article VI of the By-Laws of North American Van Lines authorizes indemnification of officers and directors in cases of liability if the director or officer (1) acted in good faith and in a manner reasonably believed to be or not opposed to the best interests of the corporation and (2) with respect to any criminal action, had no reasonable cause to believe his conduct was unlawful. In cases involving an action or suit by or on behalf of North American Van Lines, indemnification is limited to expenses actually or reasonably incurred and prohibit in cases where the officer or director has been adjudged liable unless otherwise ordered by the Delaware Court of Chancery or the court in which the original action or suit was brought. Section 6.01 of the By-Laws of North American Van Lines further provide that in a cases involving an action or suit by or on behalf of North American Van Lines, such indemnification is limited to expenses actually and reasonably incurred by such director or officer and indemnification of officers and directors to the full extent permitted under Delaware law, including a provision eliminating (except under certain enumerated circumstances) the liability of directors for duty of care violations. In addition, North American Van Lines' Restated Certificate of Incorporation, consistent with Section 102(b) of the Delaware Corporation Law, as amended, precludes indemnification of directors in cases of liability of any director (1) for any breach of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (3) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware Corporation Law, as amended and (4) for any transaction from which the director derived an improper personal benefit. The indemnification provided for the Delaware Corporation Law is not exclusive of any other rights of indemnification, and a corporation may maintain insurance against liabilities for which indemnification is not expressly provided by the Delaware Corporation Law. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) List of Exhibits.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.1 Restated Certificate of Incorporation of North Previously filed as Exhibit 3.1 to American Van Lines, Inc. Form S-4, filed February 4, 2000. 3.2 Amended and Restated By-Laws of North American Previously filed as Exhibit 3.2 to Van Lines, Inc. Form S-4, filed February 4, 2000. 3.3 Amended Certificate of Incorporation of NA Previously filed as Exhibit 3.3 to Holding Corporation, now known as SIRVA, Inc. Form S-4, filed February 4, 2000. 3.4 Amended and Restated By-Laws of NA Holding Previously filed as Exhibit 3.4 to Corporation, now known as SIRVA, Inc. Form S-4, filed February 4, 2000. 3.5 Articles of Incorporation of Fleet Insurance Previously filed as Exhibit 3.5 to Management, Inc. Form S-4, filed February 4, 2000.
II-3
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.6 By-Laws of Fleet Insurance Management, Inc. Previously filed as Exhibit 3.6 to Form S-4, filed February 4, 2000. 3.7 Certificate of Incorporation of FrontRunner Previously filed as Exhibit 3.7 to Worldwide, Inc. Form S-4, filed February 4, 2000. 3.8 By-Laws of FrontRunner Worldwide, Inc. Previously filed as Exhibit 3.8 to Form S-4, filed February 4, 2000. 3.9 Articles of Incorporation of Tri-City Moving & Previously filed as Exhibit 3.9 to Storage, Inc., now known as North American Form S-4, filed February 4, 2000. Distribution Systems, Inc. 3.10 By-Laws of Tri-City Moving & Storage, Inc. now Previously filed as Exhibit 3.10 to known as North American Distribution Systems, Form S-4, filed February 4, 2000. Inc. 3.11 Amended Articles of Incorporation of North Previously filed as Exhibit 3.11 to American Travel Service, Inc., now known as Form S-4, filed February 4, 2000. North American Logistics, Inc. 3.12 By-Laws of North American Travel Service, Inc., Previously filed as Exhibit 3.12 to now known as North American Logistics, Inc. Form S-4, filed February 4, 2000. 3.13 Amended Articles of Incorporation of North Previously filed as Exhibit 3.13 to American Distribution Systems, Inc., now known Form S-4, filed February 4, 2000. as NAVTRANS International Freight Forwarding, Inc. 3.14 By-Laws of North American Distribution Systems, Previously filed as Exhibit 3.14 to Inc., now known as NAVTRANS International Form S-4, filed February 4, 2000. Freight Forwarding, Inc. 3.15 Certificate of Incorporation of Relocation Previously filed as Exhibit 3.15 to Management Systems, Inc. Form S-4, filed February 4, 2000. 3.16 By-Laws of Relocation Management Systems, Inc. Previously filed as Exhibit 3.16 to Form S-4, filed February 4, 2000. 3.17 Articles of Incorporation of NACAL, Inc. Previously filed as Exhibit 3.17 to Form S-4, filed February 4, 2000. 3.18 By-Laws of NACAL, Inc. Previously filed as Exhibit 3.18 to Form S-4, filed February 4, 2000. 3.19 Amended Articles of Incorporation of Marlew, Previously filed as Exhibit 3.19 to Inc., now known as North American Van Lines of Form S-4, filed February 4, 2000. Texas, Inc. 3.20 By-Laws of Marlew, Inc., now known as North Previously filed as Exhibit 3.20 to American Van Lines of Texas, Inc. Form S-4, filed February 4, 2000. 3.21 Articles of Incorporation of Great Falls North Previously filed as Exhibit 3.21 to American, Inc. Form S-4, filed February 4, 2000. 3.22 By-Laws of Great Falls North American, Inc. Previously filed as Exhibit 3.22 to Form S-4, filed February 4, 2000. 3.23 Amended Articles of Incorporation of Relocation Previously filed as Exhibit 3.23 to Solutions Management, Inc., now known as A Form S-4, filed February 4, 2000. Relocation Solutions Management, Inc.
II-4
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.24 By-Laws of Relocation Solutions Management, Previously filed as Exhibit 3.24 to Inc., now known as A Relocation Solutions Form S-4, filed February 4, 2000. Management, Inc. 3.25 Amended Articles of Incorporation of Allied Sea Previously filed as Exhibit 3.25 to Van Company, now known as Allied Freight Form S-4, filed February 4, 2000. Forwarding, Inc. 3.26 Restated By-Laws of Allied Van Lines Previously filed as Exhibit 3.26 to International Corporation, now known as Allied Form S-4, filed February 4, 2000. Freight Forwarding, Inc. 3.27 Amended Certificate of Incorporation of Allied Previously filed as Exhibit 3.27 to Pickfords U.S.A., Inc., now known as Allied Form S-4, filed February 4, 2000. International N.A., Inc. 3.28 Restated By-Laws of Allied International N.A., Previously filed as Exhibit 3.28 to Inc. Form S-4, filed February 4, 2000. 3.29 Certificate of Agreement of Merger of NFC Merger Previously filed as Exhibit 3.29 to Corporation with and into Allied Van Lines, Inc. Form S-4, filed February 4, 2000. 3.30 By-Laws of Allied Van Lines, Inc. Previously filed as Exhibit 3.30 to Form S-4, filed February 4, 2000. 3.31 Amended Articles of Incorporation of Allied Van Previously filed as Exhibit 3.31 to Lines Insurance Agency, Inc., now known as Form S-4, filed February 4, 2000. Vanguard Insurance Agency, Inc. 3.32 By-Laws of Allied Van Lines Insurance Agency, Previously filed as Exhibit 3.32 to Inc., now known as Vanguard Insurance Agency, Form S-4, filed February 4, 2000. Inc. 3.33 Certificate of Incorporation of Allied Van Lines Previously filed as Exhibit 3.33 to Terminal Company Form S-4, filed February 4, 2000. 3.34 Restated By-Laws of Allied Van Lines Terminal Previously filed as Exhibit 3.34 to Corporation Form S-4, filed February 4, 2000. 3.35 Certificate of Amendment of Certificate of Previously filed as Exhibit 3.35 to Incorporation of SIRVA, Inc., formerly known as Amendment No. 1 to Form S-4, filed Allied Worldwide, Inc. April 4, 2002. 3.36 Certificate of Amendment to the Certificate of Previously filed as Exhibit 3.36 to Incorporation of SIRVA, Inc. Amendment No. 1 to Form S-4, filed April 4, 2002. 3.37 Certificate of Incorporation of Eclipse Mobility Previously filed as Exhibit 3.37 to Resources, Inc., now know as Meridian Mobility Amendment No. 1 to Form S-4, filed Resources, Inc. April 4, 2002. 3.38 By-Laws of Meridian Mobility Resources, Inc. Previously filed as Exhibit 3.38 to Amendment No. 1 to Form S-4, filed April 4, 2002. 3.39 Certficate of Amendment to Articles of Filed herewith Incorporation of Federal Traffic Service, Inc., formerly known as North American Distribution Systems, Inc.
II-5
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.40 Certificate of Incorporation of Filed herewith StoreYourThings.com, Inc. 3.41 Certificate of Incorporation of StorEverything, Filed herewith Inc., formerly known as StoreYourThings.com, Inc. 3.42 By-Laws of StoreYourThings.com, Inc., now known Filed herewith as StorEverything, Inc. 3.43 Articles of Incorporation of Able Van Lines, Filed herewith Inc., now known as Global Van Lines, Inc. 3.44 Articles of Amendment to the Articles of Filed herewith Incorporation of Global Van Lines, Inc., formerly known as Able Van Lines, Inc. 3.45 By-Laws of Able Van Lines, Inc., now known as Filed herewith Global Van Lines, Inc. 3.46 Certificate of Formation of TGIA Acqusition Filed herewith Company, LLC, now known as National Association of Independent Truckers, LLC. 3.47 Certificate of Amendment of Certificate of Filed herewith Formation of National Association of Independent Truckers, LLC, formerly known as TGIA Acquisition Company, LLC. 3.48 Limited Liability Company Agreement of TGIA Filed herewith Acqusition Company, LLC, now known as National Association of Independent Truckers, LLC. 3.49 Certificate of Formation of AWW Acquisition Filed herewith Company, LLC 3.50 Certificate of Formation of SIRVA Acqusition Filed herewith Company, LLC, formerly known as AWW Acqusition Company, LLC 3.51 Certificate of Amendment to Certificate of Filed herewith Formation of SIRVA Relocation LLC, formerly known as SIRVA Acquisition Company, LLC 3.52 Limited Liability Company Agreement of SIRVA Filed herewith Acquisition Company, LLC, now known as SIRVA Relocation LLC 3.53 Articles of Organization of ProSource Filed herewith Properties, Ltd. 3.54 Amended and Restated Operating Agreement of Filed herewith ProSource Properties, Ltd. 3.55 Certificate of Incorporation of U.S. Relocation Filed herewith Services, Inc. 3.56 By-Laws of U.S. Relocation Services, Inc. Filed herewith 3.57 Articles of Incorporation of Corporate Transfer Filed herewith Service, Inc.
II-6
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.58 Certificate of Amendment to Articles of Filed herewith Incorporation of Corporate Transfer Service, Inc. 3.59 Certificate of Amendment to Articles of Filed herewith Incorporation of Corporate Transfer Service, Inc. 3.60 By-Laws of Corporate Transfer Service, Inc. Filed herewith 3.61 [Certificate] of Incorporation of CRS Acqusition Filed herewith Corp. 3.62 By-Laws of CRS Acqusition Corp. Filed herewith 3.63 Articles of Incorporation of CRS Title Agency, Filed herewith Inc. 3.64 Code of Regulations of CRS Title Agency, Inc. Filed herewith 3.65 Certificate of Incorporation of Allied Filed herewith Transportation Forwarding, Inc. 3.66 By-Laws of Allied Transportation Forwarding, Filed herewith Inc. 4.1 Indenture, dated as of November 19, 1999, among Previously filed as Exhibit 4.1 to North American Van Lines, State Street Bank and Form S-4, filed February 4, 2000. Trust Company and the subsidiary guarantors party thereto 4.2 Registration Rights Agreement, dated November Previously filed as Exhibit 4.2 to 19, 1999, among North American Van Lines, Inc., Form S-4, filed February 4, 2000. Banc of America Securities LLC, Chase Securities Inc. and the subsidiary guarantors party thereto 4.3 Form of 13 3/8 Senior Subordinated Note due 2009 Previously filed as Exhibit 4.3 to (included in Exhibit 4.1) Form S-4, filed February 4, 2000. 5.1 Opinion of Debevoise & Plimpton Filed herewith 10.1 Acquisition Agreement, dated as of Previously filed as Exhibit 10.1 to September 14, 1999, between NA Holding Form S-4, filed February 4, 2000. Corporation and NFC plc 10.2 Amendment No. 1 to the Acquisition Agreement, Previously filed as Exhibit 10.2 to dated as of November 19, 1999, between NA Form S-4, filed February 4, 2000. Holding Corporation and NFC plc 10.3 Credit Agreement, dated as of November 19, 1999 Previously filed as Exhibit 10.3 to and amended as of November 23, 1999, among North Form S-4, filed February 4, 2000. American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent
II-7
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 10.4 Guaranty and Collateral Agreement, dated as of Previously filed as Exhibit 10.4 to November 19, 1999, made by NA Holding Form S-4, filed February 4, 2000. Corporation, North American Van Lines, Inc. and certain of its subsidiaries in favor of The Chase Manhattan Bank, as collateral agent and administrative agent 10.5 Common Stock Purchase Warrant No. 1, dated as of Previously filed as Exhibit 10.5 to November 19, 1999, for 87,480 shares of NA Form S-4, filed February 4, 2000. Holding Common Stock, issued in the name of NFC International Holdings (Netherlands II) BV 10.6 Indemnification Agreement, dated as of Previously filed as Exhibit 10.6 to March 30, 1998, among NA Holding Corporation, Form S-4, filed February 4, 2000. NA Acquisition Corporation, North American Van Lines, Clayton, Dubilier & Rice, Inc. and Clayton, Dubilier & Rice Fund V Limited Partnership 10.7 Consulting Agreement, dated as of March 30, Previously filed as Exhibit 10.7 to 1998, among NA Holding Corporation, NA Form S-4, filed February 4, 2000. Acquisition Corporation, and North American Van Lines, Inc. and Clayton, Dubilier & Rice, Inc. 10.8 Registration and Participation Agreement, dated Previously filed as Exhibit 10.8 to as of March 30, 1998, among NA Holding Form S-4, filed February 4, 2000. Corporation and Clayton, Dubilier & Rice Fund V Limited Partnership 10.9 Amendment No. 1, dated as of November 19, 1999, Previously filed as Exhibit 10.9 to to the Registration and Participation Agreement, Form S-4, filed February 4, 2000. dated as of March 30, 1998, among NA Holding Corporation and Clayton, Dubilier & Rice Fund V Limited Partnership 10.10 Letter Agreement, dated as of November 19, 1999, Previously filed as Exhibit 10.10 to among NA Holding Corporation, Clayton, Form S-4, filed February 4, 2000. Dubilier & Rice Fund V Limited Partnership and NFC plc with respect to rights and obligations of NFC by virtue of its acquisition of 174,961 shares of common stock, par value $0.01 per share, of NA Holding Corporation 10.11 Stock Subscription Agreement, dated as of Previously filed as Exhibit 10.11 to November 19, 1999, between the NA Holding Form S-4, filed February 4, 2000. Corporation and Clayton, Dubilier & Rice Fund V Limited Partnership 10.12 Stock Subscription Agreement, dated as of Previously filed as Exhibit 10.12 to November 19, 1999, between NA Holding Form S-4, filed February 4, 2000. Corporation and NFC plc 10.13 Form of Management Stock Subscription Agreement Previously filed as Exhibit 10.13 to for SIRVA, Inc. (formerly Allied Worldwide, Form S-4, filed February 4, 2000. Inc.) 10.14 Form of Management Stock Option Agreement for Previously filed as Exhibit 10.14 to SIRVA, Inc. (formerly Allied Worldwide, Inc.) Form S-4, filed February 4, 2000.
II-8
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 10.15 Transition Services Agreement, dated as of Previously filed as Exhibit 10.15 to November 19, 1999, by and between NFC plc and NA Form S-4, filed February 4, 2000. Holding Corporation 10.16 Tax Matters Agreement, dated as of Previously filed as Exhibit 10.16 to September 14, 1999, between NA Holding Form S-4, filed February 4, 2000. Corporation and NFC plc 10.17 Amended and Restated Consulting Agreement, dated Previously filed as Exhibit 10.17 to as of January 1, 2001, by and among SIRVA Inc. Amendment No. 1 to Form S-4, filed (formerly Allied Worldwide, Inc.) and North April 4, 2002. American Van Lines, Inc. and Clayton, Dubilier & Rice, Inc. 10.18 Second Amendment, dated as of August 11, 2000, Previously filed as Exhibit 10.18 to to the Credit Agreement, dated as of November Amendment No. 1 to Form S-4, filed 19, 1999 and amended as of November 23, 1999, April 4, 2002. among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent. 10.19 Third Amendment and Waiver, dated as of Previously filed as Exhibit 10.19 to December 21, 2001, to the Credit Agreement, Amendment No. 1 to Form S-4, filed dated as of November 19, 1999 and amended as of April 4, 2002. November 23, 1999, among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent. 10.20 Fourth Amendment, dated as of March 19, 2002, to Filed herewith the Credit Agreement, dated as of November 19, 1999 and amended as of November 23, 1999, among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent.
II-9
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 10.21 Fifth Amendment, dated as of [ ], to the Filed herewith Credit Agreement, dated as of November 19, 1999 and amended as of November 23, 1999, among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent. 10.22 Stock Subscription Agreement, dated as of Filed herewith April 12, 2002, between SIRVA, Inc., formerly known as Allied Worldwide, Inc. and Clayton, Dubilier & Rice Fund VI Limited Partnership 12.1 Calculation of Ratios Previously filed as Exhibit 12.1 to Amendment No. 1 to Form S-4, filed April 4, 2002. 15.1 Letter of PricewaterhouseCoopers LLP regarding Previously filed as Exhibit 15.1 to unaudited interim financial information Form S-4, filed February 4, 2000. 15.2 Letter of Ernst & Young regarding unaudited Previously filed as Exhibit 15.2 to interim financial information Form S-4, filed February 4, 2000. 21.1 List of Subsidiaries of North American Van Lines Filed herewith 23.1 Consent of Debevoise & Plimpton (contained in Filed herewith Exhibit 5.1) 23.2 Consent of PricewaterhouseCoopers LLP Filed herewith 23.3 Consent of Ernst & Young LLP Filed herewith 24.1 Powers of Attorney (contained on signature Filed herewith pages) 25.1 Statement of Eligibility of State Street Bank Previously filed as Exhibit 25.1 to and Trust on Form T-1 Amendment No. 1 to Form S-4, filed April 4, 2002. 27.1 Financial Data Schedule Previously filed as Exhibit 27.1 to Form S-4, filed February 4, 2000. 99.1 Form of Letter of Transmittal Previously filed as Exhibit 99.1 to Amendment No. 1 to Form S-4, filed April 4, 2002. 99.2 Form of Notice of Guaranteed Delivery Previously filed as Exhibit 99.2 to Amendment No. 1 to Form S-4, filed April 4, 2002. 99.3 Form of Instruction to Registered Holder and/or Previously filed as Exhibit 99.3 to Book Entry Transfer Participant from Beneficial Amendment No. 1 to Form S-4, filed Owner for Tender of 13 3/8 Senior Subordinated April 4, 2002. Notes Due 2009 for registered 13 3/8 Senior Subordinated Notes Due 2009
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EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 99.4 Guidelines for Certification of Taxpayer Previously filed as Exhibit 99.4 to Identification Number on Substitution Form W-9 Amendment No. 1 to Form S-4, filed April 4, 2002. 99.5 Form of Exchange Agent Agreement by and between Previously filed as Exhibit 99.5 to North American Van Lines, Inc. and State Street Amendment No. 1 to Form S-4, filed Bank and Trust Company April 4, 2002.
- ------------------------ (b) Financial Statement Schedules. Schedule II: Valuation and Qualifying Accounts appears on page F-46 of this prospectus. ITEM 22. UNDERTAKINGS The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (b) To reflect in the prospectus any facts or events arising after the effective date of the 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 the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the 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 offering 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. (4) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such II-11 indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (5) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (6) The undersigned registrant hereby undertakes to supply by means of post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-12 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. NORTH AMERICAN VAN LINES, INC. By: /s/ JAMES W. ROGERS ----------------------------------------- Name: James W. Rogers Title:PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Director, President and /s/ JAMES W. ROGERS Chief Executive Officer - ------------------------------------------- (Principal executive May 22, 2002 James W. Rogers officer) /s/ RONALD L. MILEWSKI Chief Financial Officer - ------------------------------------------- (Principal financial May 22, 2002 Ronald L. Milewski officer) /s/ DENNIS M. THOMPSON Vice President, Controller - ------------------------------------------- (Principal accounting May 22, 2002 Dennis M. Thompson officer) /s/ MICHAEL G. BABIARZ Director - ------------------------------------------- May 22, 2002 Michael G. Babiarz /s/ EDMUND M. CARPENTER Director - ------------------------------------------- May 22, 2002 Edmund M. Carpenter
II-13 /s/ WESLEY K. CLARK Director - ------------------------------------------- May 22, 2002 Wesley K. Clark /s/ KEVIN J. CONWAY Director - ------------------------------------------- May 22, 2002 Kevin J. Conway /s/ KENNETH E. HOMA Director - ------------------------------------------- May 22, 2002 Kenneth E. Homa /s/ CARL T. STOCKER Director - ------------------------------------------- May 22, 2002 Carl T. Stocker /s/ RICHARD J. SCHNALL Director - ------------------------------------------- May 22, 2002 Richard J. Schnall
II-14 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. FLEET INSURANCE MANAGEMENT, INC. By: /s/ LAWRENCE A. WRITT ----------------------------------------- Name: Lawrence A. Writt Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ LAWRENCE A. WRITT Director and President - ------------------------------------------- (Principal executive May 22, 2002 Lawrence A. Writt officer) /s/ DENNIS M. THOMPSON Treasurer (Principal - ------------------------------------------- accounting officer) May 22, 2002 Dennis M. Thompson /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford
II-15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. FRONTRUNNER WORLDWIDE, INC. By: /s/ DOUGLAS V. GATHANY ----------------------------------------- Name: Douglas V. Gathany Title: TREASURER
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ DOUGLAS V. GATHANY Treasurer (Principal - ------------------------------------------- executive officer) May 22, 2002 Douglas V. Gathany /s/ RONALD L. MILEWSKI Director and Principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. FEDERAL TRAFFIC SERVICE, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. NORTH AMERICAN LOGISTICS LTD. By: /s/ GREGORY S. MAIERS ----------------------------------------- Name: Gregory S. Maiers Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ GREGORY S. MAIERS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Gregory S. Maiers /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-18 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. NAVTRANS INTERNATIONAL FREIGHT FORWARDING, INC. By: /s/ GREGORY S. MAIERS ----------------------------------------- Name: Gregory S. Maiers Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ GREGORY S. MAIERS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Gregory S. Maiers /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-19 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. MERIDIAN MOBILITY RESOURCES INC By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. RELOCATION MANAGEMENT SYSTEMS, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-21 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. NACAL, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James A. Rogers
II-22 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. NORTH AMERICAN VAN LINES OF TEXAS, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-23 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. GREAT FALLS NORTH AMERICAN, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-24 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. ALLIED VAN LINES, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: CHIEF EXECUTIVE OFFICER AND PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS Chief Executive Officer and - ------------------------------------------- President (Principal May 22, 2002 Michael P. Fergus executive officer) /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-25 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. ALLIED INTERNATIONAL N.A., INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: CHIEF EXECUTIVE OFFICER AND PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS Chief Executive Officer and - ------------------------------------------- President (Principal May 22, 2002 Michael P. Fergus executive officer) /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-26 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. ALLIED FREIGHT FORWARDING, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-27 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. A RELOCATION MANAGEMENT SOLUTIONS COMPANY By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS Chairman of the Board and - ------------------------------------------- President (Principal May 22, 2002 Michael P. Fergus executive officer) /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers
II-28 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. ALLIED VAN LINES TERMINAL COMPANY By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ RONALD L. MILEWSKI Director and principal - ------------------------------------------- financial officer May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ RALPH A. FORD Director - ------------------------------------------- May 22, 2002 Ralph Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 Rogers W. Rogers
II-29 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Naperville, State of Illinois, on May 22, 2002. VANGUARD INSURANCE AGENCY, INC. By: /s/ LAWRENCE A. WRITT ----------------------------------------- Name: Lawrence A. Writt Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson, and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ LAWRENCE A. WRITT President and Chief Executive - ------------------------------------------- Officer (Principal May 22, 2002 Lawrence A. Writt executive officer) /s/ RONALD L. MILEWSKI (Principal financial officer) - ------------------------------------------- May 22, 2002 Ronald L. Milewski /s/ DENNIS M. THOMPSON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Dennis M. Thompson /s/ MICHAEL P. FERGUS Director - ------------------------------------------- May 22, 2002 Michael P. Fergus /s/ MARSHALL B. FELBEIN Director - ------------------------------------------- May 22, 2002 Marshall B. Felbein
II-30 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. GLOBAL VAN LINES, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ DOUGLAS V. GATHANY Treasurer (Principal - ------------------------------------------- financial and accounting May 22, 2002 Douglas V. Gathany officer) /s/ RALPH A. FORD Director and Secretary - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ ROBERT SANDORA Vice President - ------------------------------------------- May 22, 2002 Robert Sandora /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers /s/ RONALD L. MILEWSKI Director - ------------------------------------------- May 22, 2002 Ronald L. Milewski
II-31 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. ALLIED TRANSPORTATION FORWARDING, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ DOUGLAS V. GATHANY Treasurer (Principal - ------------------------------------------- financial and accounting May 22, 2002 Douglas V. Gathany officer) /s/ TIMOTHY SCHNEEMAN Vice President - ------------------------------------------- May 22, 2002 Timothy Schneeman /s/ RALPH A. FORD Director and Secretary - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers /s/ RONALD L. MILEWSKI Director - ------------------------------------------- May 22, 2002 Ronald L. Milewski
II-32 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Mayfield Heights, State of Ohio, on May 22, 2002. CRS ACQUISITION CORP. By: /s/ HENRY A. ROTH ----------------------------------------- Name: Henry A. Roth Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ HENRY A. ROTH Director and President - ------------------------------------------- (Principal executive May 22, 2002 Henry A. Roth officer) /s/ EUGENE A. NOVAK Director and Treasurer and - ------------------------------------------- Secretary (Principal May 22, 2002 Eugene A. Novak financial officer)
II-33 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Mayfield Heights, State of Ohio, on May 22, 2002. CRS TITLE AGENCY, INC. By: /s/ PATRICK SPICUZZA ----------------------------------------- Name: Patrick Spicuzza Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ PATRICK SPICUZZA President (Principal - ------------------------------------------- executive officer) May 22, 2002 Patrick Spicuzza /s/ EUGENE A. NOVAK Treasurer (Principal - ------------------------------------------- financial and accounting May 22, 2002 Eugene A. Novak officer) /s/ PATRICIA ROSEN-GRAY Secretary - ------------------------------------------- May 22, 2002 Patricia Rosen-Gray /s/ RONALD L. MILEWSKI Director - ------------------------------------------- May 22, 2002 Ronald L. Milewski
II-34 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Plymouth, State of Minnesota, on May 22, 2002. CORPORATE TRANSFER SERVICE, INC. By: /s/ BRYAN MCCOSKEY ----------------------------------------- Name: Bryan McCoskey Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ BRYAN MCCOSKEY President and Chief Operating - ------------------------------------------- Officer (Principal May 22, 2002 Bryan McCoskey executive officer) /s/ EUGENE A. NOVAK Director and Treasurer - ------------------------------------------- (Principal financial May 22, 2002 Eugene A. Novak officer) /s/ MARVIN HANNON (Principal accounting - ------------------------------------------- officer) May 22, 2002 Marvin Hannon /s/ HENRY A. ROTH Director and Secretary - ------------------------------------------- May 22, 2002 Henry A. Roth
II-35 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Mayfield Heights, State of Ohio, on May 22, 2002. PROSOURCE PROPERTIES, LTD. By: SIRVA RELOCATION LLC, its Manager By: /s/ JAMES W. ROGERS ----------------------------------------- Name: James W. Rogers Title: CHAIRMAN AND PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ JAMES W. ROGERS Chairman and President - ------------------------------------------- (Principal executive May 22, 2002 James W. Rogers officer) /s/ EUGENE A. NOVAK Chief Financial Officer - ------------------------------------------- (Principal financial and May 22, 2002 Eugene A. Novak accounting officer) /s/ RALPH A. FORD Secretary - ------------------------------------------- May 22, 2002 Ralph A. Ford
II-36 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Denver, State of Colorado, on May 22, 2002. U.S. RELOCATION SERVICES, INC. By: /s/ MARGARET A. PICCINELLI ----------------------------------------- Name: Margaret A. Piccinelli Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MARGARET A. PICCINELLI Director and President - ------------------------------------------- (Principal executive May 22, 2002 Margaret A. Piccinelli officer) Director and Chief Financial /s/ EUGENE A. NOVAK Officer and Treasurer - ------------------------------------------- (Principal financial May 22, 2002 Eugene A. Novak officer) /s/ FRANK DI TIRRO (Principal accounting - ------------------------------------------- officer) May 22, 2002 Frank Di Tirro /s/ HENRY A. ROTH Director and Secretary - ------------------------------------------- May 22, 2002 Henry A. Roth /s/ RONALD L. MILEWSKI Director - ------------------------------------------- May 22, 2002 Ronald L. Milewski
II-37 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Mayfield Heights, State of Ohio, on May 22, 2002. SIRVA RELOCATION LLC By: /s/ JAMES W. ROGERS ----------------------------------------- Name: James W. Rogers Title: CHAIRMAN AND PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ JAMES W. ROGERS Director and Chairman and - ------------------------------------------- President (Principal May 22, 2002 James W. Rogers executive officer) /s/ RONALD L. MILEWSKI Director and Vice President - ------------------------------------------- and Treasurer (Principal May 22, 2002 Ronald L. Milewski financial officer) /s/ RALPH A. FORD Director and Vice President - ------------------------------------------- and Secretary May 22, 2002 Ralph A. Ford /s/ MICHAEL P. FERGUS Vice President - ------------------------------------------- May 22, 2002 Michael P. Fergus
II-38 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Ft. Wayne, State of Indiana, on May 22, 2002. STOREVERYTHING, INC. By: /s/ MICHAEL P. FERGUS ----------------------------------------- Name: Michael P. Fergus Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. /s/ MICHAEL P. FERGUS President (Principal - ------------------------------------------- executive officer) May 22, 2002 Michael P. Fergus /s/ DOUGLAS V. GATHANY Treasurer (Principal - ------------------------------------------- financial and accounting May 22, 2002 Douglas V. Gathany officer) /s/ RALPH A. FORD Director and Secretary - ------------------------------------------- May 22, 2002 Ralph A. Ford /s/ JAMES W. ROGERS Director - ------------------------------------------- May 22, 2002 James W. Rogers /s/ RONALD L. MILEWSKI Director - ------------------------------------------- May 22, 2002 Ronald L. Milewski
II-39 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Naperville, State of Illinois, on May 22, 2002. NATIONAL ASSOCIATION OF INDEPENDENT TRUCKERS, LLC By: /s/ LAWRENCE A. WRITT ----------------------------------------- Name: Lawrence A. Writt Title: PRESIDENT
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ralph A. Ford, Dennis M. Thompson and Ronald L. Milewski, jointly and severally, as his true and lawful attorney-in-fact and agent, acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact full power and authority to do and reform each and every act and thing requisite or necessary to be done in and about the premises, as person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Director and Chairman and /s/ LAWRENCE A. WRITT President and Treasurer - ------------------------------------------- (Principal executive and May 22, 2002 Lawrence A. Writt financial officer) /s/ ROBERT J. HENRY Director and Vice President - ------------------------------------------- and Secretary May 22, 2002 Robert J. Henry
II-40 EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.1 Restated Certificate of Incorporation of North Previously filed as Exhibit 3.1 to American Van Lines, Inc. Form S-4, filed February 4, 2000. 3.2 Amended and Restated By-Laws of North American Previously filed as Exhibit 3.2 to Van Lines, Inc. Form S-4, filed February 4, 2000. 3.3 Amended Certificate of Incorporation of NA Previously filed as Exhibit 3.3 to Holding Corporation, now known as SIRVA, Inc. Form S-4, filed February 4, 2000. 3.4 Amended and Restated By-Laws of NA Holding Previously filed as Exhibit 3.4 to Corporation, now known as SIRVA, Inc. Form S-4, filed February 4, 2000. 3.5 Articles of Incorporation of Fleet Insurance Previously filed as Exhibit 3.5 to Management, Inc. Form S-4, filed February 4, 2000. 3.6 By-Laws of Fleet Insurance Management, Inc. Previously filed as Exhibit 3.6 to Form S-4, filed February 4, 2000. 3.7 Certificate of Incorporation of FrontRunner Previously filed as Exhibit 3.7 to Worldwide, Inc. Form S-4, filed February 4, 2000. 3.8 By-Laws of FrontRunner Worldwide, Inc. Previously filed as Exhibit 3.8 to Form S-4, filed February 4, 2000. 3.9 Articles of Incorporation of Tri-City Moving & Previously filed as Exhibit 3.9 to Storage, Inc., now known as North American Form S-4, filed February 4, 2000. Distribution Systems, Inc. 3.10 By-Laws of Tri-City Moving & Storage, Inc. now Previously filed as Exhibit 3.10 to known as North American Distribution Systems, Form S-4, filed February 4, 2000. Inc. 3.11 Amended Articles of Incorporation of North Previously filed as Exhibit 3.11 to American Travel Service, Inc., now known as Form S-4, filed February 4, 2000. North American Logistics, Inc. 3.12 By-Laws of North American Travel Service, Inc., Previously filed as Exhibit 3.12 to now known as North American Logistics, Inc. Form S-4, filed February 4, 2000. 3.13 Amended Articles of Incorporation of North Previously filed as Exhibit 3.13 to American Distribution Systems, Inc., now known Form S-4, filed February 4, 2000. as NAVTRANS International Freight Forwarding, Inc. 3.14 By-Laws of North American Distribution Systems, Previously filed as Exhibit 3.14 to Inc., now known as NAVTRANS International Form S-4, filed February 4, 2000. Freight Forwarding, Inc. 3.15 Certificate of Incorporation of Relocation Previously filed as Exhibit 3.15 to Management Systems, Inc. Form S-4, filed February 4, 2000. 3.16 By-Laws of Relocation Management Systems, Inc. Previously filed as Exhibit 3.16 to Form S-4, filed February 4, 2000. 3.17 Articles of Incorporation of NACAL, Inc. Previously filed as Exhibit 3.17 to Form S-4, filed February 4, 2000. 3.18 By-Laws of NACAL, Inc. Previously filed as Exhibit 3.18 to Form S-4, filed February 4, 2000. 3.19 Amended Articles of Incorporation of Marlew, Previously filed as Exhibit 3.19 to Inc., now known as North American Van Lines of Form S-4, filed February 4, 2000. Texas, Inc.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.20 By-Laws of Marlew, Inc., now known as North Previously filed as Exhibit 3.20 to American Van Lines of Texas, Inc. Form S-4, filed February 4, 2000. 3.21 Articles of Incorporation of Great Falls North Previously filed as Exhibit 3.21 to American, Inc. Form S-4, filed February 4, 2000. 3.22 By-Laws of Great Falls North American, Inc. Previously filed as Exhibit 3.22 to Form S-4, filed February 4, 2000. 3.23 Amended Articles of Incorporation of Relocation Previously filed as Exhibit 3.23 to Solutions Management, Inc., now known as A Form S-4, filed February 4, 2000. Relocation Solutions Management, Inc. 3.24 By-Laws of Relocation Solutions Management, Previously filed as Exhibit 3.24 to Inc., now known as A Relocation Solutions Form S-4, filed February 4, 2000. Management, Inc. 3.25 Amended Articles of Incorporation of Allied Sea Previously filed as Exhibit 3.25 to Van Company, now known as Allied Freight Form S-4, filed February 4, 2000. Forwarding, Inc. 3.26 Restated By-Laws of Allied Van Lines Previously filed as Exhibit 3.26 to International Corporation, now known as Allied Form S-4, filed February 4, 2000. Freight Forwarding, Inc. 3.27 Amended Certificate of Incorporation of Allied Previously filed as Exhibit 3.27 to Pickfords U.S.A., Inc., now known as Allied Form S-4, filed February 4, 2000. International N.A., Inc. 3.28 Restated By-Laws of Allied International N.A., Previously filed as Exhibit 3.28 to Inc. Form S-4, filed February 4, 2000. 3.29 Certificate of Agreement of Merger of NFC Merger Previously filed as Exhibit 3.29 to Corporation with and into Allied Van Lines, Inc. Form S-4, filed February 4, 2000. 3.30 By-Laws of Allied Van Lines, Inc. Previously filed as Exhibit 3.30 to Form S-4, filed February 4, 2000. 3.31 Amended Articles of Incorporation of Allied Van Previously filed as Exhibit 3.31 to Lines Insurance Agency, Inc., now known as Form S-4, filed February 4, 2000. Vanguard Insurance Agency, Inc. 3.32 By-Laws of Allied Van Lines Insurance Agency, Previously filed as Exhibit 3.32 to Inc., now known as Vanguard Insurance Agency, Form S-4, filed February 4, 2000. Inc. 3.33 Certificate of Incorporation of Allied Van Lines Previously filed as Exhibit 3.33 to Terminal Company Form S-4, filed February 4, 2000. 3.34 Restated By-Laws of Allied Van Lines Terminal Previously filed as Exhibit 3.34 to Corporation Form S-4, filed February 4, 2000. 3.35 Certificate of Amendment of Certificate of Previously filed as Exhibit 3.35 to Incorporation of SIRVA, Inc., formerly known as Amendment No. 1 to Form S-4, filed Allied Worldwide, Inc. April 4, 2002. 3.36 Certificate of Amendment to the Certificate of Previously filed as Exhibit 3.36 to Incorporation of SIRVA, Inc. Amendment No. 1 to Form S-4, filed April 4, 2002. 3.37 Certificate of Incorporation of Eclipse Mobility Previously filed as Exhibit 3.37 to Resources, Inc., now know as Meridian Mobility Amendment No. 1 to Form S-4, filed Resources, Inc. April 4, 2002.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.38 By-Laws of Meridian Mobility Resources, Inc. Previously filed as Exhibit 3.38 to Amendment No. 1 to Form S-4, filed April 4, 2002. 3.39 Certficate of Amendment to Articles of Filed herewith Incorporation of Federal Traffic Service, Inc., formerly known as North American Distribution Systems, Inc. 3.40 Certificate of Incorporation of Filed herewith StoreYourThings.com, Inc. 3.41 Certificate of Incorporation of StorEverything, Filed herewith Inc., formerly known as StoreYourThings.com, Inc. 3.42 By-Laws of StoreYourThings.com, Inc., now known Filed herewith as StorEverything, Inc. 3.43 Articles of Incorporation of Able Van Lines, Filed herewith Inc., now known as Global Van Lines, Inc. 3.44 Articles of Amendment to the Articles of Filed herewith Incorporation of Global Van Lines, Inc., formerly known as Able Van Lines, Inc. 3.45 By-Laws of Able Van Lines, Inc., now known as Filed herewith Global Van Lines, Inc. 3.46 Certificate of Formation of TGIA Acqusition Filed herewith Company, LLC, now known as National Association of Independent Truckers, LLC. 3.47 Certificate of Amendment of Certificate of Filed herewith Formation of National Association of Independent Truckers, LLC, formerly known as TGIA Acquisition Company, LLC. 3.48 Limited Liability Company Agreement of TGIA Filed herewith Acqusition Company, LLC, now known as National Association of Independent Truckers, LLC. 3.49 Certificate of Formation of AWW Acquisition Filed herewith Company, LLC 3.50 Certificate of Formation of SIRVA Acqusition Filed herewith Company, LLC, formerly known as AWW Acqusition Company, LLC 3.51 Certificate of Amendment to Certificate of Filed herewith Formation of SIRVA Relocation LLC, formerly known as SIRVA Acquisition Company, LLC 3.52 Limited Liability Company Agreement of SIRVA Filed herewith Acquisition Company, LLC, now known as SIRVA Relocation LLC 3.53 Articles of Organization of ProSource Filed herewith Properties, Ltd. 3.54 Amended and Restated Operating Agreement of Filed herewith ProSource Properties, Ltd.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 3.55 Certificate of Incorporation of U.S. Relocation Filed herewith Services, Inc. 3.56 By-Laws of U.S. Relocation Services, Inc. Filed herewith 3.57 Articles of Incorporation of Corporate Transfer Filed herewith Service, Inc. 3.58 Certificate of Amendment to Articles of Filed herewith Incorporation of Corporate Transfer Service, Inc. 3.59 Certificate of Amendment to Articles of Filed herewith Incorporation of Corporate Transfer Service, Inc. 3.60 By-Laws of Corporate Transfer Service, Inc. Filed herewith 3.61 Certificate of Incorporation of CRS Acqusition Filed herewith Corp. 3.62 By-Laws of CRS Acqusition Corp. Filed herewith 3.63 Articles of Incorporation of CRS Title Agency, Filed herewith Inc. 3.64 Code of Regulations of CRS Title Agency, Inc. Filed herewith 3.65 Certificate of Incorporation of Allied Filed herewith Transportation Forwarding, Inc. 3.66 By-Laws of Allied Transportation Forwarding, Filed herewith Inc. 4.1 Indenture, dated as of November 19, 1999, among Previously filed as Exhibit 4.1 to North American Van Lines, State Street Bank and Form S-4, filed February 4, 2000. Trust Company and the subsidiary guarantors party thereto 4.2 Registration Rights Agreement, dated November Previously filed as Exhibit 4.2 to 19, 1999, among North American Van Lines, Inc., Form S-4, filed February 4, 2000. Banc of America Securities LLC, Chase Securities Inc. and the subsidiary guarantors party thereto 4.3 Form of 13 3/8 Senior Subordinated Note due 2009 Previously filed as Exhibit 4.3 to (included in Exhibit 4.1) Form S-4, filed February 4, 2000. 5.1 Opinion of Debevoise & Plimpton Filed herewith 10.1 Acquisition Agreement, dated as of Previously filed as Exhibit 10.1 to September 14, 1999, between NA Holding Form S-4, filed February 4, 2000. Corporation and NFC plc 10.2 Amendment No. 1 to the Acquisition Agreement, Previously filed as Exhibit 10.2 to dated as of November 19, 1999, between NA Form S-4, filed February 4, 2000. Holding Corporation and NFC plc 10.3 Credit Agreement, dated as of November 19, 1999 Previously filed as Exhibit 10.3 to and amended as of November 23, 1999, among North Form S-4, filed February 4, 2000. American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 10.4 Guaranty and Collateral Agreement, dated as of Previously filed as Exhibit 10.4 to November 19, 1999, made by NA Holding Form S-4, filed February 4, 2000. Corporation, North American Van Lines, Inc. and certain of its subsidiaries in favor of The Chase Manhattan Bank, as collateral agent and administrative agent 10.5 Common Stock Purchase Warrant No. 1, dated as of Previously filed as Exhibit 10.5 to November 19, 1999, for 87,480 shares of NA Form S-4, filed February 4, 2000. Holding Common Stock, issued in the name of NFC International Holdings (Netherlands II) BV 10.6 Indemnification Agreement, dated as of Previously filed as Exhibit 10.6 to March 30, 1998, among NA Holding Corporation, Form S-4, filed February 4, 2000. NA Acquisition Corporation, North American Van Lines, Clayton, Dubilier & Rice, Inc. and Clayton, Dubilier & Rice Fund V Limited Partnership 10.7 Consulting Agreement, dated as of March 30, Previously filed as Exhibit 10.7 to 1998, among NA Holding Corporation, NA Form S-4, filed February 4, 2000. Acquisition Corporation, and North American Van Lines, Inc. and Clayton, Dubilier & Rice, Inc. 10.8 Registration and Participation Agreement, dated Previously filed as Exhibit 10.8 to as of March 30, 1998, among NA Holding Form S-4, filed February 4, 2000. Corporation and Clayton, Dubilier & Rice Fund V Limited Partnership 10.9 Amendment No. 1, dated as of November 19, 1999, Previously filed as Exhibit 10.9 to to the Registration and Participation Agreement, Form S-4, filed February 4, 2000. dated as of March 30, 1998, among NA Holding Corporation and Clayton, Dubilier & Rice Fund V Limited Partnership 10.10 Letter Agreement, dated as of November 19, 1999, Previously filed as Exhibit 10.10 to among NA Holding Corporation, Clayton, Form S-4, filed February 4, 2000. Dubilier & Rice Fund V Limited Partnership and NFC plc with respect to rights and obligations of NFC by virtue of its acquisition of 174,961 shares of common stock, par value $0.01 per share, of NA Holding Corporation 10.11 Stock Subscription Agreement, dated as of Previously filed as Exhibit 10.11 to November 19, 1999, between the NA Holding Form S-4, filed February 4, 2000. Corporation and Clayton, Dubilier & Rice Fund V Limited Partnership 10.12 Stock Subscription Agreement, dated as of Previously filed as Exhibit 10.12 to November 19, 1999, between NA Holding Form S-4, filed February 4, 2000. Corporation and NFC plc 10.13 Form of Management Stock Subscription Agreement Previously filed as Exhibit 10.13 to for SIRVA, Inc. (formerly Allied Worldwide, Form S-4, filed February 4, 2000. Inc.) 10.14 Form of Management Stock Option Agreement for Previously filed as Exhibit 10.14 to SIRVA, Inc. (formerly Allied Worldwide, Inc.) Form S-4, filed February 4, 2000.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 10.15 Transition Services Agreement, dated as of Previously filed as Exhibit 10.15 to November 19, 1999, by and between NFC plc and NA Form S-4, filed February 4, 2000. Holding Corporation 10.16 Tax Matters Agreement, dated as of Previously filed as Exhibit 10.16 to September 14, 1999, between NA Holding Form S-4, filed February 4, 2000. Corporation and NFC plc 10.17 Amended and Restated Consulting Agreement, dated Previously filed as Exhibit 10.17 to as of January 1, 2001, by and among SIRVA Inc. Amendment No. 1 to Form S-4, filed (formerly Allied Worldwide, Inc.) and North April 4, 2002. American Van Lines, Inc. and Clayton, Dubilier & Rice, Inc. 10.18 Second Amendment, dated as of August 11, 2000, Previously filed as Exhibit 10.18 to to the Credit Agreement, dated as of November Amendment No. 1 to Form S-4, filed 19, 1999 and amended as of November 23, 1999, April 4, 2002. among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent. 10.19 Third Amendment and Waiver, dated as of Previously filed as Exhibit 10.19 to December 21, 2001, to the Credit Agreement, Amendment No. 1 to Form S-4, filed dated as of November 19, 1999 and amended as of April 4, 2002. November 23, 1999, among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent. 10.20 Fourth Amendment, dated as of March 19, 2002, to Filed herewith the Credit Agreement, dated as of November 19, 1999 and amended as of November 23, 1999, among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT METHOD OF FILING - --------------------- ------------------------------------------------ ------------------------------------------ 10.21 Fifth Amendment, dated as of April 30, 2002, to Filed herewith the Credit Agreement, dated as of November 19, 1999 and amended as of November 23, 1999, among North American Van Lines, the foreign subsidiary borrowers from time to time parties thereto, the several banks and other financial institutions from time to time parties thereto, The Bank of New York, as documentation agent, Banc of America Securities LLC, as syndication agent, and The Chase Manhattan Bank, as collateral and administrative agent. 10.22 Stock Subscription Agreement, dated as of Filed herewith April 12, 2002, between SIRVA, Inc., formerly known as Allied Worldwide, Inc. and Clayton, Dubilier & Rice Fund VI Limited Partnership 12.1 Calculation of Ratios Previously filed as Exhibit 12.1 to Amendment No. 1 to Form S-4, filed April 4, 2002. 15.1 Letter of PricewaterhouseCoopers LLP regarding Previously filed as Exhibit 15.1 to unaudited interim financial information Form S-4, filed February 4, 2000. 15.2 Letter of Ernst & Young regarding unaudited Previously filed as Exhibit 15.2 to interim financial information Form S-4, filed February 4, 2000. 21.1 List of Subsidiaries of North American Van Lines Filed herewith 23.1 Consent of Debevoise & Plimpton (contained in Filed herewith Exhibit 5.1) 23.2 Consent of PricewaterhouseCoopers LLP Filed herewith 23.3 Consent of Ernst & Young LLP Filed herewith 24.1 Powers of Attorney (contained on signature Filed herewith pages) 25.1 Statement of Eligibility of State Street Bank Previously filed as Exhibit 25.1 to and Trust on Form T-1 Amendment No. 1 to Form S-4, filed April 4, 2002. 27.1 Financial Data Schedule Previously filed as Exhibit 27.1 to Form S-4, filed February 4, 2000. 99.1 Form of Letter of Transmittal Previously filed as Exhibit 99.1 to Amendment No. 1 to Form S-4, filed April 4, 2002. 99.2 Form of Notice of Guaranteed Delivery Previously filed as Exhibit 99.2 to Amendment No. 1 to Form S-4, filed April 4, 2002. 99.3 Form of Instruction to Registered Holder and/or Previously filed as Exhibit 99.3 to Book Entry Transfer Participant from Beneficial Amendment No. 1 to Form S-4, filed Owner for Tender of 13 3/8 Senior Subordinated April 4, 2002. Notes Due 2009 for registered 13 3/8 Senior Subordinated Notes Due 2009 99.4 Guidelines for Certification of Taxpayer Previously filed as Exhibit 99.4 to Identification Number on Substitution Form W-9 Amendment No. 1 to Form S-4, filed April 4, 2002. 99.5 Form of Exchange Agent Agreement by and between Previously filed as Exhibit 99.5 to North American Van Lines, Inc. and State Street Amendment No. 1 to Form S-4, filed Bank and Trust Company April 4, 2002.
EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in this Registration Statement on Form S-4 of North American Van Lines, Inc. of our report dated March 4, 2002 relating to the financial statements and financial statement schedule of North American Van Lines, Inc., which appears in such Registration Statement. We also consent to the references to us under the headings "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP May 20, 2002 EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm, formerly known as Ernst & Young, under the caption "Experts" and to the use of our report dated March 10, 2000, on the combined financial statements of NFC Moving Services Group for the year ended September 30, 1999 in Amendment No. 2 to the Registration Statement (Form S-4 No. 333-96233) and related Prospectus of North American Van Lines, Inc. for the registration of $150,000,000 of its 13 3/4% Senior Subordinated Notes Due 2009. /s/ Ernst & Young Ernst & Young LLP London, England May 21, 2002 EX-3.39 3 a2079698zex-3_39.txt EXHIBIT 3.39 EXHIBIT 3.39 [LOGO] ARTICLES OF AMENDMENT OF THE [SEAL] ARTICLES OF INCORPORATION Approved By INSTRUCTIONS INDIANA CODE 23-1-38-1 ET SEQ. FILING FEE: $30.00 [SEAL] ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF: Name of Corporation Date of incorporation Customized Project Management Solutions, Inc. October 7, 1965 The undersigned officers of the above referenced Corporation (HEREINAFTER REFERRED TO AS THE "CORPORATION") existing pursuant to the provisions of: (Indicate appropriate act) /X/ Indiana Business Corporation / / Indiana Professional Corporation Act Law of 1983 as amended (HEREINAFTER REFERRED TO AS THE "ACT"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certify the following facts: ARTICLE I AMENDMENT(S) The exact text of Article(s) 1 of the Articles (NOTE: IF AMENDING THE NAME OF CORPORATION, WRITE ARTICLE "I" IN SPACE ABOVE AND WRITE "THE NAME OF THE CORPORATION IS __________" BELOW) The name of the Corporation is Federal Traffic Service, Inc. ARTICLE II Date of each amendment's adoption: February 7, 2001 ARTICLE III MANNER OF ADOPTION AND VOTE Mark applicable section: NOTE - Only in limited situations does Indiana law permit an Amendment without shareholder approval. Because a name change requires shareholder approval, Section 2 must be marked and either A or B completed. / / SECTION 1 This amendment was adopted by the Board of Directors or Incorporators and shareholder action was not required. /X/ SECTION 2 The shareholders of the Corporation entitled to vote in respect to the amendment adopted the proposed amendment. The amendment was adopted by: (SHAREHOLDER APPROVAL MAY BE BY EITHER A OR B) A. Vote of such shareholders during a meeting called by the Board of Directors. The result of such vote is as follows: / / Shares entitled to vote. / / Number of shares represented at the meeting. / / Shares voted in favor. / / Shares voted against. B. Unanimous written consent executed on February 7, 2001 and signed by all shareholders entitled to vote. ARTICLE IV COMPLIANCE WITH LEGAL REQUIREMENTS The manner of the adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. I hereby verify, subject to the penalties of perjury, that the statements contained herein are true, this 20th day of February, 2001. Signature of current officer or Printed name of officer or chairman of the board chairman of the board /s/ Richard A. Clark Richard A. Clark Signature's Title Assistant Secretary EX-3.40 4 a2079698zex-3_40.txt EXHIBIT 3.40 EXHIBIT 3.40 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 02:00 PM 02/09/2001 010068167-3351911 STATE OF DELAWARE CERTIFICATE OF INCORPORATION A STOCK CORPORATION - - FIRST: The name of this Corporation is ------------------------------------ StoreYourThings.com, Inc. -------------------------------------------------------------------------- - - SECOND: Its registered office in the State of Delaware is to be located at 1209 Orange Street, in the City of Wilmington County of New Castle Zip Code 19801. The registered agent in charge thereof is The Corporation Trust Company -------------------------------------------------------------------------- -------------------------------------------------------------------------- -------------------------------------------------------------------------- - - THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. - - FOURTH: The amount of the total authorized capital stock of this corporation is Ten Thousand Dollars ($10,000) divided into 1,000,000 shares of No and 01/100 Dollars ($0.01) each. - - FIFTH: The name and mailing address of the incorporator are as follows: Name Janine E. Rudolph --------------------------------------------------------- Mailing Address P.O. Box 988 ---------------------------------------------- Fort Wayne, IN Zip Code 46801-0988 ------------------ ---------------- - - I, The Undersigned, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate, and do certify that the facts herein stated are true, and I have accordingly hereunto set my hand this 5th day of February, A.D. 2001. BY: /s/ Janine E. Rudolph ----------------------------- (Incorporator) NAME: Janine E. Rudolph --------------------------- (Type or Print) EX-3.41 5 a2079698zex-3_41.txt EXHIBIT 3.41 EXHIBIT 3.41 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 06/08/2001 010279120 - 3351912 STATE OF DELAWARE CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION - - FIRST: That at a meeting of the Board of Directors of ------------------------ StoreYourThings.com, Inc. - -------------------------------------------------------------------------------- resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: RESOLVED, that the Certificate of Incorporation of this corporation be amended by changing the Article thereof numbered "1" so that, as amended, said Article shall be and read as follows: " The name of the Corporation is: StorEverything, Inc. ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------" - - SECOND: That thereafter, pursuant to resolution of its Board of Directors, a special meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment. - - THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. - - FOURTH: That the capital of said corporation shall not be reduced under or by reason of said amendment. BY: /s/ Eric A. Baker -------------------------- (Authorized Officer) NAME: Eric A. Baker - Secretary -------------------------- (Type or Print) EX-3.42 6 a2079698zex-3_42.txt EXHIBIT 3.42 EXHIBIT 3.42 BY-LAWS OF STOREYOURTHINGS.COM, INC. (HEREINAFTER CALLED THE "CORPORATION") ARTICLE I OFFICES Section 1. REGISTERED OFFICE. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. PLACE OF MEETINGS. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware as shall be designated from time to time by the President and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. ANNUAL MEETING. The annual meeting of stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before said meeting shall be held on such date and at such time as stated in the notice of the meeting. Written notice of the annual meeting stating the place, date and hours of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Unless otherwise stated in such notice, the meeting shall be held at 10:00 a.m. (local time at the place of the meeting) on the third Tuesday in February of each year, if not a legal holiday, and, if a legal holiday, then at the same time and place on the next succeeding full business day. Section 3. SPECIAL MEETINGS. Unless otherwise prescribed by law or by the Certificate of Incorporation, special meetings of stockholders, for any purpose or purposes, may be called by either the President, the Secretary or any Assistant Secretary, and shall be called by any such officer at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. Section 4. QUORUM. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority - 2 - of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting. Section 5. VOTING. Unless otherwise required by law, the Certificate of Incorporation or these By-Laws, any question brought before any meeting of stockholders shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy but no - 3 - proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot. Section 6. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Section 7. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and -4- showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present. Section 8. STOCK LEDGER. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 7 of this Article II or the books of the Corporation or to vote in person or by proxy at any meeting of stockholders. -5- ARTICLE III DIRECTORS Section 1. NUMBER AND ELECTION OF DIRECTORS. The Board of Directors shall consist of not less than three nor more than fifteen members, the exact number of which shall initially be fixed by the Incorporator and thereafter from time to time by the Board of Directors. Except as provided in Section 2 of this Article, directors shall be elected by a plurality of the votes cast at annual meetings of stockholders, and each director so elected shall hold office until the next annual meeting and until his or her successor is duly elected and qualified, or until his or her earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders. Section 2. VACANCIES. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified, or until their earlier resignation or removal. Section 3. DUTIES AND POWERS. The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation -6- and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders. Section 4. MEETINGS. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without such notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the President or any director. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. Section 5. QUORUM. Except as may be otherwise specifically provided by law, the Certificate of Incorporation or these By-Laws, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors - 7 - present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 6. ACTIONS OF BOARD. Unless otherwise provided by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or committee. Section 7. MEETINGS BY MEANS OF CONFERENCE TELEPHONE. Unless otherwise provided by the Certificate of Incorporation or these By-Laws, members of the Board of Directors of the Corporation, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 7 shall constitute presence in person at such meeting. Section 8. COMMITTEES. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors, designate one or more committees, each committee to consist of one - 8 - or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation. Each committee shall keep regular minutes and report to the Board of Directors when required. - 9 - ARTICLE IV OFFICERS Section 1. GENERAL. The officers of the corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors, in its discretion, may also choose one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation nor need such officers be directors of the Corporation. Section 2. ELECTION. The Board of Directors at its first meeting held after each annual meeting of stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. -10- Section 3. VOTING SECURITIES OWNED BY THE CORPORATION. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President and any such officer may, in the name of and on behalf of the Corporation, take all such action any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons. Section 4. PRESIDENT. The President shall, subject to the control of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He or she shall execute all bonds, mortgages, contracts and other instruments of the Corporation except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the -11- President. The President shall preside at all meetings of the stockholders and Board of Directors. The President shall be the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as from time to time may be assigned to him or her by these By-Laws or by the Board of Directors. Section 5. VICE PRESIDENTS. At the request of the President or in his or her absence or in the event of his or her inability or refusal to act, the Vice President or the Vice Presidents if there is more than one shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. Section 6. SECRETARY. The Secretary shall attend all meetings of the Board of Directors and all meetings of stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he or she shall be. If the Secretary shall be unable or shall refuse to cause to -12- be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be. Section 7. TREASURER. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all monies in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, when -13- so requested or required, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation. Section 8. ASSISTANT SECRETARIES. Except as may be otherwise provided in these By-Laws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his or her disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary. Section 9. ASSISTANT TREASURERS. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his or her disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. Section 10. OTHER OFFICERS. Such other officers as the President may choose shall perform such duties and have such power as from time to time may be assigned to them by the President. -14- ARTICLE V STOCK Section 1. FORM OF CERTIFICATES. Every holder of stock in the Corporation shall be entitled to have a certificate signed in the name of the Corporation (i) by the President or a Vice President and (ii) by the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him or her in the Corporation. Section 2. SIGNATURES. Where a certificate is countersigned by (i) a transfer agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. Section 3. LOST CERTIFICATES. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new -15- certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 4. TRANSFERS. Stock of the Corporation shall be transferable in the manner prescribed by law and in these By-Laws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his or her attorney lawfully constituted in writing and upon the surrender of the certificate therefore, which shall be cancelled before a new certificate shall be issued. Section 5. RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be - 16 - more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of Directors may fix a new record date for the adjourned meeting. Section 6. BENEFICIAL OWNERS. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. ARTICLE VI NOTICES Section 1. NOTICES. Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at his or her address as it appears on the records of the Corporation, with postage thereon prepaid, and - 17 - such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telefax, telex or cable. Section 2. WAIVERS OF NOTICE. Whenever any notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed, by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE VII INDEMNIFICATION Section 1. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS OTHER THAN THOSE BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director or officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit - 18 - plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. Section 2. POWER TO INDEMNIFY IN ACTIONS, SUITS OR PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. Subject to Section 3 of this Article VII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a -19- director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonable entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 3. AUTHORIZATION OF INDEMNIFICATION. Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VII, as the case may be. Such determination shall be made (i) by the Board of Directors by a -20- majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders. To the extent, however, that a director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith, without the necessity of authorization in the specific case. Section 4. GOOD FAITH DEFINED. For purposes of any determination under Section 3 of this Article VII, a person shall be deemed to have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his or her conduct was unlawful, if his or her action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to him or her by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information on records given or reports made to -21- the Corporation or another enterprise by an independent certified public accountant or by the Corporation or another enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the corporation as a director, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections 1 or 2 of this Article VII, as the case may be. Section 5. INDEMNIFICATION BY A COURT. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because he or she has met the applicable standards of conduct set forth in Sections 1 or 2 of this Article VII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VII nor the absence of any determination thereunder - 22 - shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application. Section 6. EXPENSES PAYABLE IN ADVANCE. Expenses incurred by a director or officer in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article VII. Section 7. NONEXCLUSIVITY OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by or granted pursuant to this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any By-Law, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both - 23 - as to action in his or her official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VII shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in Sections 1 or 2 of this Article VII but whom the Corporation has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware, or otherwise. Section 8. INSURANCE. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power or the obligation to indemnify him or her against such liability under the provisions of this Article VII. Section 9. CERTAIN DEFINITIONS. For purposes of this Article VII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation - 24 - (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under that provisions of this Article VII with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation of its separate existence had continued. For purposes of this Article VII, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article VII. - 25 - Section 10. SURVIVAL OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. Section 11. LIMITATION ON INDEMNIFICATION. Notwithstanding anything contained in this Article VII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 hereof), the Corporation shall not be obligated to indemnify any director or officer in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation. Section 12. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VII to directors and officers of the Corporation. - 26 - EX-3.43 7 a2079698zex-3_43.txt EXHIBIT 3.43 EXHIBIT 3.43 ----------------------------- SUE ANNE GILROY [INDIANA STATE SEAL] SECRETARY OF STATE ARTICLES OF INCORPORATION CORPORATIONS DIVISION State Form 4159 (R10 / 8-95) 302 W. Washington St. RM. E018 Approved by State Board of Accounts 1995 Indianapolis, IN 46204 Telephone: (317) 232-6576 ------------------------------ INSTRUCTIONS: USE 8 1/2" X 11" WHITE PAPER FOR INSERTS. Indiana Code 23-1-21-2 PRESENT ORIGINAL AND TWO (2) COPIES TO FILING FEE: $90.00 ADDRESS IN UPPER RIGHT CORNER OF THIS FORM. PLEASE TYPE OR PRINT. UPON COMPLETION OF FILING, THE SECRETARY OF STATE WILL ISSUE A RECEIPT. - -------------------------------------------------------------------------------- ARTICLES OF INCORPORATION - -------------------------------------------------------------------------------- The undersigned, desiring to form a corporation (HEREINAFTER REFERRED TO AS "CORPORATION") pursuant to the provisions of: /X/ Indiana Business Corporation Law / / Indiana Professional Corporation Act 1983, Indiana Code 23-1.5-1-1, ET SEQ. (PROFESSIONAL CORPORATIONS MUST INCLUDE CERTIFICATE OF REGISTRATION.) As amended, executes the following Articles of Incorporation: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ARTICLE I - NAME AND PRINCIPAL OFFICE - -------------------------------------------------------------------------------- Name of Corporation (THE NAME MUST INCLUDE THE WORD "CORPORATION","INCORPORATED", "LIMITED", "COMPANY" OR AN ABBREVIATION THEREOF.) Able Van Lines, Inc. - -------------------------------------------------------------------------------- Principal Office: The address of the principal office of the Corporation is: - -------------------------------------------------------------------------------- Post office address City State ZIP code 5001 U.S. Highway 30 West Fort Wayne IN 46818 - ------------------------------ ----------------- ----------- ---------------- - -------------------------------------------------------------------------------- ARTICLE II - REGISTERED OFFICE AND AGENT - -------------------------------------------------------------------------------- Registered Agent: The name and street address of the Corporation's Registered Agent and Registered Office for service of process are: - -------------------------------------------------------------------------------- Name of Registered Agent CT Corporation System - -------------------------------------------------------------------------------- Address of Registered Office City Indiana ZIP code (STREET OR BUILDING) One North Capitol Avenue Indianapolis IN 46204 - ------------------------------ ----------------- ----------- ---------------- - -------------------------------------------------------------------------------- ARTICLE III - AUTHORIZED SHARES - -------------------------------------------------------------------------------- Number of shares the Corporation is authorized to issue: 1,000 IF THERE IS MORE THAN ONE CLASS OF SHARES, SHARES WITH RIGHTS AND PREFERENCES, LIST SUCH INFORMATION AS "EXHIBIT A." - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ARTICLE IV - INCORPORATORS [THE NAME(S) AND ADDRESS(ES) OF THE INCORPORATORS OF THE CORPORATION] - -------------------------------------------------------------------------------- NAME NUMBER AND STREET CITY STATE ZIP CODE OR BUILDING - -------------------------------------------------------------------------------- Janine E. Rudolph 5001 US Highway 30 W Fort Wayne IN 46818 - ------------------- -------------------------- ------------- --------- --------- Richard A. Clark 5001 US Highway 30 W Fort Wayne IN 46818 - ------------------- -------------------------- ------------- --------- --------- - -------------------------------------------------------------------------------- In Witness Whereof, the undersigned being all the Incorporators of said Corporation execute these Articles of Incorporation and verify, subject to penalties of perjury, that the statements contained herein are true, this 8th day of February, 1999. - -------------------------------------------------------------------------------- Signature Printed name /s/ Janine E. Rudolph Janine E. Rudolph - ------------------------------------------- ----------------------------------- Signature Printed name /s/ Richard A. Clark Richard A. Clark - ------------------------------------------- ----------------------------------- Signature Printed name - -------------------------------------------------------------------------------- This Instrument was prepared by: (NAME) Janine E. Rudolph - ------------------------------------------------------------------- ----------- Address (NUMBER, STREET, CITY AND STATE) ZIP code 5001 US Highway 30 West, Fort Wayne, IN. 46818 - -------------------------------------------------------------------------------- EX-3.44 8 a2079698zex-3_44.txt EXHIBIT 3.44 [INDIANA STATE SEAL] EXHIBIT 3.44 ----------------------------- ARTICLES OF AMENDMENT OF THE SUE ANNE GILROY ARTICLES OF INCORPORATION SECRETARY OF STATE STATE FORM 38333 (R8 / 12-98) CORPORATIONS DIVISION APPROVED BY STATE BOARD OF ACCOUNTS 1995 302 W. WASHINGTON ST., RM. E018 INDIANAPOLIS, IN 46204 TELEPHONE: (317) 232-6576 ----------------------------- INSTRUCTIONS: USE 8 1/2" x 11" WHITE PAPER FOR INSERTS. PRESENT ORIGINAL AND TWO COPIES TO ADDRESS IN UPPER RIGHT HAND CORNER OF THIS PLEASE TYPE OR PRINT. Indiana Code 23-1-38-1 ET SEQ. Filing Fee $30.00 - -------------------------------------------------------------------------------- ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION OF: - -------------------------------------------------------------------------------- Name of Corporation Date of incorporation - ----------------------------------------------- ------------------------------- Able Van Lines, Inc. February 16, 1999 - -------------------------------------------------------------------------------- The undersigned officers of the above referenced Corporation (HEREINAFTER REFERRED TO AS THE "CORPORATION") existing pursuant to the provisions of (INDICATE APPROPRIATE ACT) /X/-Indiana Business Corporation Law / / Indiana Professional Corporation Act of 1983 as amended (HEREINAFTER REFERRED TO AS THE "ACT"), desiring to give notice of corporate action effectuating amendment of certain provisions of its Articles of Incorporation, certify the following facts: - -------------------------------------------------------------------------------- ARTICLE I AMENDMENT(S) - -------------------------------------------------------------------------------- The exact text of Article(s) 1 of the Articles (NOTE: IF AMENDING THE NAME OF CORPORATION, WRITE ARTICLE "I" IN SPACE ABOVE AND WRITE "THE NAME OF THE CORPORATION IS " BELOW.) The name of the Corporation is Global Van Lines, Inc. - -------------------------------------------------------------------------------- ARTICLE II - -------------------------------------------------------------------------------- Date of each amendment's adoption: March 22, 2000 - -------------------------------------------------------------------------------- (CONTINUED ON THE REVERSE SIDE) RECEIVED CORPORATIONS DIV. 00 MAR 27 AM11:32 SUE ANNE GILROY - -------------------------------------------------------------------------------- ARTICLE III MANNER OF ADOPTION AND VOTE - -------------------------------------------------------------------------------- Mark applicable section; NOTE--Only in limited situations does Indiana law permit an Amendment without shareholder approval. Because a name change requires shareholder approval, Section 2 must be marked and either A or B completed. - -------------------------------------------------------------------------------- SECTION 1 This amendment was adopted by the Board of Directors or incorporators and shareholder action was not required. - -------------------------------------------------------------------------------- SECTION 2 The shareholders of the Corporation entitled to vote in respect to the amendment adopted the proposed amendment. The amendment was adopted by: (SHAREHOLDER APPROVAL MAY BE BY EITHER A OR B.) A. Vote of such shareholders during a meeting called by the Board of Directors. The result of such vote is as follows: _____Shares entitled to vote. _____Number of shares represented at the meeting. _____Shares voted in favor. _____Shares voted against. B. Unanimous written consent executed on March 22, 2000 and signed by all shareholders entitled to vote. - -------------------------------------------------------------------------------- ARTICLE IV COMPLIANCE WITH LEGAL REQUIREMENTS - -------------------------------------------------------------------------------- The manner of the adoption of the Articles of Amendment and the vote by which they were adopted constitute full legal compliance with the provisions of the Act, the Articles of Incorporation, and the By-Laws of the Corporation. - -------------------------------------------------------------------------------- I hereby verify, subject to the penalties of perjury, that the statements contained herein are true, this 24th day of March, in 2000. - -------------------------------------------------------------------------------- Signature of current officer or Printed name of officer or chairman of the board chairman of the board /s/ Richard A. Clark Richard A. Clark - ----------------------------------------- ------------------------------------- Signature's title Secretary - -------------------------------------------------------------------------------- EX-3.45 9 a2079698zex-3_45.txt EXHIBIT 3.45 EXHIBIT 3.45 BY-LAWS OF ABLE VAN LINES, INC. ARTICLE I - OFFICES The principal office of the Corporation in the State of Indiana shall be located in the City of Fort Wayne, County of Allen. The Corporation may have such other offices, either within or without the State of incorporation as the Board of Directors may designate or as the business of the Corporation may from time to time require. ARTICLE II - STOCKHOLDERS 1. ANNUAL MEETING. The annual meeting of the stockholders shall be held on the 16th day of February in each year, beginning with the year 2000 at the hour 9:00 o'clock a.m., for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day. 2. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the president or by the directors, and shall be called by the president at the request of the holders of not less than 50 percent of all the outstanding shares of the Corporation entitled to vote at the meeting. 3. PLACE OF MEETING. The directors may designate any place, either within or without the State unless otherwise prescribed by statute, as the place of meeting for any annual meeting or for any special meeting called by the directors. A waiver of notice signed by all stockholders entitled to vote at a meeting may designate any place, either within or without the state unless otherwise prescribed by statute, as the place for holding such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the Corporation. 4. NOTICE OF MEETING. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten (10) nor more than thirty (30) days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer of persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such Notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon pre-paid. 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the directors of the Corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, thirty (30) days. If the stock transfer books shall be closed for the purpose or determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than thirty (30) days and, in case of a meeting of stockholders, not less than thirty (30) days prior to the date on which the particular action requiring such determination of stockholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof. 6. VOTING LISTS. The officer or agent having charge of the stock transfer books for shares of the Corporation shall make, at least ten (10) days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the principal office of the Corporation and shall be subject to inspection by any stockholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to who are the stockholders entitled to examine such list or transfer books or to vote at the meeting of stockholders. -2- 7. QUORUM. At any meeting of stockholders 50 percent of the outstanding shares of the Corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If less than said number of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. 8. PROXIES. At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or by his duly authorized attorney in fact. Such proxy shall be filed with the secretary of the Corporation before or at the time of the meeting. 9. VOTING. Each stockholder entitled to vote in accordance with the terms and provisions of the certificate of incorporation and these Bylaws shall be entitled to one vote, in person or by proxy, for each share of stock entitled to vote held by such stockholders. Upon the demand of any stockholder, the vote for directors and upon any questions before the meeting shall be by ballot. All elections for directors shall be decided by plurality vote; all other questions shall be decided by majority vote except as otherwise provided by the Certificate of Incorporation or the laws of this State. 10. ORDER OF BUSINESS. The order of business at all meetings of the stockholders, shall be as follows: a. Roll Call. b. Proof of notice of meeting or waiver of notice. c. Reading of minutes of preceding meeting. d. Reports of Officers. e. Reports of Committees. f. Election of Directors. g. Unfinished Business. h. New Business. 11. INFORMAL ACTION BY STOCKHOLDERS. Unless otherwise provided by law, any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be -3- taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. ARTICLE III - BOARD OF DIRECTORS 1. GENERAL POWERS. The business and affairs of the Corporation shall be managed by its Board of Directors. The directors shall in all cases act as a board, and they may adopt such rules and regulations for the conduct of their meetings and the management of the Corporation, as they may deem proper, not inconsistent with these bylaws and the laws of this State. 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the Corporation shall be three (3). Each director shall hold office until the next annual meeting of stockholders and until his successor shall have been elected and qualified. 3. REGULAR MEETINGS. A regular meeting of the directors, shall be held without other notice than this by-law immediately after, and at the same place as, the annual meeting of stockholders. The directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution. 4. SPECIAL MEETINGS. Special meetings of the directors may be called by or at the request of the president or any two directors. The person or persons authorized to call special meetings of the directors may fix the place for holding any special meeting of the directors called by them. 5. NOTICE. Notice of any special meeting shall be given at least ten (10) days previously thereto by written notice delivered personally, or by telegram or mailed to each director at his business address. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. -4- 6. QUORUM. At any meeting of the directors two (2) shall constitute a quorum for the transaction of business, but if less than said number is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the directors. 8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the board for any reason except the removal of directors without cause may be filled by a vote of a majority of the directors then in office, although less than a quorum exists. Vacancies occurring by reason of the removal of directors without cause shall be filled by vote of the stockholders. A director elected to fill a vacancy caused by resignation, death or removal shall be elected to hold office for the unexpired term of his predecessor. 9. REMOVAL OF DIRECTORS. Any or all of the directors may be removed for cause by vote of the stockholders or by action of the board. Directors may be removed without cause only by vote of the stockholders. 10. RESIGNATION. A director may resign at any time by giving written notice to the board, the president or the secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the board or such officer, and the acceptance of the resignation shall not be necessary to make it effective. 11. COMPENSATION. No compensation shall be paid to directors, as such, for their services, but by resolution of the board a fixed sum and expenses for actual attendance at each regular or special meeting of the board may be authorized. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. 12. PRESUMPTION OF ASSENT. A director of the Corporation who is present at a meeting of the directors at which action on any corporate matter is taken shall be presume to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or -5- shall forward such dissent by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. 13. EXECUTIVE AND OTHER COMMITTEES. The board, by resolution, may designate from among its members an executive committee and other committees, each consisting of three or more directors. Each such committee shall serve at the pleasure of the board. 14. INFORMAL ACTION BY DIRECTORS. Unless otherwise provided by law, any action required to be taken at a meeting of the directors, or any other action which may be taken at a meeting of the directors, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all the directors entitled to vote with respect to the subject matter thereof. ARTICLE IV - OFFICERS 1. NUMBER. The officers of the Corporation shall be a president, a vice-president, a secretary and a treasurer, each of whom shall be elected by the directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the directors. 2. ELECTION AND TERM OF OFFICE. The officers of the Corporation to be elected by the directors shall be elected annually at the first meeting of the directors held after each annual meeting of the stockholders. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. 3. REMOVAL. Any officer or agent elected or appointed by the directors may be removed by the directors whenever in their judgement the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the directors for the unexpired portion of the term. -6- 5. PRESIDENT. The president shall be the principal executive officer of the Corporation and, subject to the control of the directors, shall in general supervise and control all of the business and affairs of the Corporation. He shall, when present, preside at all meetings of the stockholders and of the directors. He may sign, with the secretary or any other proper officer of the Corporation thereunto authorized by the directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments which the directors have authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the directors or by these bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the directors from time to time. 6. VICE-PRESIDENT. In the absence of the president or in event of his death, inability or refusal to act, the vice-president shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all restrictions upon the president. The vice-president shall perform such other duties as from time to time may be assigned to him by the President or by the directors. 7. SECRETARY. The secretary shall keep the minutes of the stockholders' and of the directors' meetings in one or more books provided for that purpose, see that all notices are duly given in accordance with the provisions of these bylaws or as required, be custodian of the corporate records and of the seal of the Corporation and keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder, have general charge of the stock transfer books of the Corporation and in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the President or by the directors. 8. TREASURER. If required by the directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the directors shall determine. He shall have charge and custody of and be responsible for all funds and securities of the Corporation; receive and give receipts for monies due and payable to the Corporation from any source whatsoever, and deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with these bylaws and in general perform all of the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the President or by the directors. -7- Able Van Lines, Inc. Consent of Directors in Lieu of Meeting - -------------------------------------------------------------------------------- Pursuant to the provisions of the Indiana General Corporation Act [I.C. 23-1-34-2(a)] and Section 14 of Article III of the by-laws of the Corporation, each of the undersigned members of the Board of Directors of the Corporation does hereby consent that the following action be taken and the following resolution be adopted without a meeting of the Board of Directors, such action and resolution to take effect upon the filing of this Consent, signed by all of the directors, with the minutes of proceedings of the Board of Directors of the Corporation; provided, however, that the date of filing shall be noted on the Consent: RESOLVED: That the Board of Directors of the Corporation recommends that the name of the Corporation be, and subject to approval of the shareholders of the Corporation, and approval by the Secretary of the State of Indiana, hereby is, changed to Global Van Lines, Inc. Dated and filed this 22nd day of March, 2000. /s/ Michael P. Fergus ----------------------------------------- Michael P. Fergus /s/ Jeffrey Kaczka ----------------------------------------- Jeffrey Kaczka /s/ Ralph A. Ford ----------------------------------------- Ralph A. Ford Able Van Lines, Inc. Consent of Shareholders in Lieu of Meeting - -------------------------------------------------------------------------------- Pursuant to the provisions of the Indiana General Corporation Act [I.C. 23-1-29-4(a)] and Section 11 of Article II of the by-laws of the Corporation, North American Van Lines, Inc., a Delaware Corporation, being the holder of all of the issued and outstanding stock of the Corporation, hereby consents that this action be taken as the written consent of shareholders: RESOLVED: That the recommendation of the Corporation's Board of Directors proposed by resolution set forth in Consent of Directors in Lieu of Meeting on March 22, 2000, recommending the name change of said Corporation to Global Van Lines, Inc., is hereby approved, ratified and affirmed. Dated this 22nd day of March, 2000. NORTH AMERICAN VAN LINES, INC. By: /s/ Jeffrey P. Gannon -------------------------------------- Jeffrey P. Gannon President 9. SALARIES. The salaries of the officers shall be fixed from time to time by the directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the Corporation. 10. INDEMNIFICATION OF DIRECTORS AND OFFICERS. a. Each director and officer, elected or appointed, shall be entitled, without the necessity of further act or deed on the part of himself or the Corporation to be indemnified by the Corporation from and against any and all claims, liabilities, fines or penalties, whether or not reduced to judgement, imposed upon or asserted against him by reason of his being or having been a director or officer of the Corporation or otherwise, and also from and against all cost and expenses (including, without any limitation of the foregoing, fees and disbursements of counsel) reasonably incurred by him as a result thereof, whether in settlement of the same or in connection with any action, suit or proceeding to which he is now or may hereafter become or be made a party for a like reason; PROVIDED, HOWEVER, that such indemnification shall not extend to any instance in which: (1) any liability, fine or penalty is imposed upon him by final judgement of a court of competent jurisdiction or the claims against him are dismissed or barred upon the ground of any statute of limitations or of any other technical defense not going to the merits of the claims involved, unless the court shall find that the liability, fine or penalty so imposed or the claims so dismissed or barred resulted from action taken or omitted to be taken by him in good faith and without negligence or misconduct in the performance of his duty or, in the absence of such a finding, unless counsel selected or approved by the Board of Directors shall have advised the Corporation that in the opinion of such counsel such liability, fine or penalty or such claims resulted from action taken or omitted to be taken by him in good faith and without negligence or misconduct in the performance of his duty; or, (2) any amount is paid or is to be paid by him to the Corporation in or in connection with the settlement of any action, suit, proceeding or claim, with or without the entry of any judgement therein or in respect thereof by a court of competent jurisdiction; or (3) any amount is paid or is to be paid by him to any party other than the Corporation in or in connection with the settlement of any action, suit, proceeding or claim, with or without the entry of any judgement therein or in respect thereof by a court of competent jurisdiction, unless such court shall find that such director or officer acted in good faith and without negligence or misconduct in the performance of his duty, or unless, in the absence of such finding, the Corporation shall be advised by counsel selected or approved by the Board that in the opinion of such counsel such action, suit, proceeding or claim is without substantial merit or that such director or officer acted in good faith and without negligence or misconduct in the performance of his duty with respect to the matters involved therein, but in no event shall the amount of the indemnity under this -8- subdivision (3) exceed the expense which might, in the judgement of the Board, reasonably be incurred by such director or officer in conducting his defense to a final conclusion; nor shall such indemnification extend to any costs or expenses in connection with any case referred to in clause (1), (2) and (3) above. b. The Corporation's obligation aforesaid (i) shall exist whether or not a director or officer is or has continued to be a director or officer of the Corporation at or up to the time any costs or expenses are incurred or any claims or liabilities arise or any settlement is effected, (ii) shall inure to the benefit of the heirs, executors or administrators of such director or officer, (iii) shall not be exclusive of any other rights to which he or they may be entitled as a matter of law, and (iv) may, but need not, be evidenced by a writing to be delivered to him in connection with his election or appointment as such director and/or officer and in consideration of his acceptance of the same. Notwithstanding any repeal of this Section or other amendment of these bylaws affecting or purporting to affect this Section or the indemnification herein provided, such obligation shall be binding upon the Corporation (subject only to the exceptions hereinbefore set forth) as to all matters which occur during or are allocable to the period prior to any such repeal or amendment and shall cover all claims, liabilities, costs and expenses at any time connected therewith, and also any settlement thereof, as hereinabove stated. c. In determining whether and to what extent, if any, a director or officer of the Corporation is entitled to indemnification hereunder or under any writing aforesaid and in making any payments pursuant to such determination, the Board of Directors and/or each director and officer, whether or not interested in any such determination or payment, may rely upon, and shall be protected by, an opinion of counsel selected or approved by the Board, which counsel may, but need not, be counsel advising as above mentioned. In the selection of counsel for any one or more of the purposes hereinabove set forth, the determination of the board shall be final and binding, notwithstanding that one or more, or all, of the directors taking part in such selection are or were interested in any payment or indemnification to which claim is made hereunder. ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS 1. CONTRACTS. The directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. 2. LOANS. No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness -9- shall be issued in its name unless authorized by a resolution of the directors. Such authority may be general or confined to specific instances. 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as shall from time to time be determined by resolution of the directors. 4. DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the directors may select. ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER 1. CERTIFICATES FOR SHARES. Certificates representing shares of the Corporation shall be in such form as shall be determined by the directors. Such certificates shall be signed by the President and by the Secretary or by such other officers authorized by law and by the directors. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the stockholders, the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. All certificates surrendered to the Corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the Corporation as the directors may prescribe. 2. TRANSFERS OF SHARES. a. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate; every such transfer shall be entered on the transfer book of the Corporation which shall be kept at its principal office. b. The Corporation shall be entitled to treat the holder of record of any share as the holder in fact thereof, and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by the laws of this state. -10- ARTICLE VII - FISCAL YEAR The fiscal year of the Corporation shall begin on the first Sunday following the last Saturday in December of each year. ARTICLE VIII - DIVIDENDS The directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law. ARTICLE IX - SEAL The directors shall provide a Corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation, the state of incorporation, year of incorporation and the words, "Corporate Seal". ARTICLE X - WAIVER OF NOTICE Unless otherwise provided by law, whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of these bylaws or under the provisions of the articles of incorporation, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XI - AMENDMENTS These bylaws may be altered, amended or repealed and new bylaws may be adopted by a vote of the stockholders representing a majority of all the shares issued and outstanding, at any annual stockholders' meeting or at any special stockholders' meeting when the proposed amendment has been set out in the notice of such meeting. These bylaws may also be altered, amended or repealed and new bylaws may be adopted by a vote of the majority of the directors at either an annual meeting, a special meeting, or by consent as provided in Article III, Section 14 hereof. - 11 - EX-3.46 10 a2079698zex-3_46.txt EXHIBIT 3.46 EXHIBIT 3.46 [SEAL] CERTIFICATE OF FORMATION OF TGIA ACQUISITION COMPANY, LLC This Certificate of Formation of TGIA Acquisition Company, LLC (the "Company"), dated March 25, 2002, is being duly executed and filed by Yael Lustmann, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 DEL.C. Section 18-101, ET SEQ.). FIRST. The name of the limited liability company formed hereby is TGIA Acquisition Company, LLC. SECOND. The address of the registered office of the Company in the State of Delaware is c/o Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. THIRD. The name and address of the registered agent for service of process on the Company in the State of Delaware are The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first above written. /s/ Yael Lustmann -------------------------- Yael Lustmann Authorized Person EX-3.47 11 a2079698zex-3_47.txt EXHIBIT 3.47 EXHIBIT 3.47 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF FORMATION OF TGIA ACQUISTION COMPANY, LLC PURSUANT TO SECTION 202 OF THE DELAWARE LIMITED LIABILITY COMPANY ACT TGIA Acquisition Company, LLC, a limited liability company organized under and by virtue of the Limited Liability Company Act of the State of Delaware (the "COMPANY"), hereby certifies as follows: 1. The name of the limited liability company is TGIA Acquisition Company, LLC; and 2. Article FIRST of the Certificate of Formation of the Company is hereby amended and restated to read in its entirety as follows: "FIRST. The name of the limited liability company formed hereby is National Association of Independent Truckers, LLC." IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Certificate of Formation as of April 12, 2002. /s/ Yael Lustmann ----------------------------------- Yael Lustmann Authorized Person EX-3.48 12 a2079698zex-3_48.txt EXHIBIT 3.48 Exhibit 3.48 LIMITED LIABILITY COMPANY AGREEMENT OF TGIA ACQUISITION COMPANY, LLC This Limited Liability Company Agreement (this "AGREEMENT") of TGIA Acquisition Company, LLC, dated as of March 27, 2002, is entered into by North American Van Lines, Inc., a Delaware corporation, as the sole member (the "MEMBER"). The Member hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 DEL.C. Section 18-101, ET SEQ.), as amended from time to time (the "ACT"), and hereby agrees as follows: ARTICLE I NAME, PURPOSE, ETC. Section 1.1 NAME. The name of the limited liability company hereby formed is TGIA Acquisition Company, LLC (the "COMPANY"). The Company may do business under that name and, as permitted by applicable law, under any other name determined from time to time by the Member. Section 1.2 PURPOSE. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any and all activities necessary or incidental to the foregoing. Section 1.3 POWERS OF THE COMPANY. Subject to any limitations set forth in this Agreement, the Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purposes set forth in Section 1.2. Section 1.4 TERM. The term of the Company commences on the date the Certificate of Formation is filed in the office of the Secretary of State of the State of Delaware and shall continue until the Company is dissolved pursuant to the provisions of Section 5.1 of this Agreement. Section 1.5 REGISTERED OFFICE. The address of the registered office of the Company in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The Company may also have offices at such other places within or without the State of Delaware as the Member may from time to time designate or the business of the Company may require. Section 1.6 REGISTERED AGENT. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. Section 1.7 QUALIFICATION IN OTHER JURISDICTIONS. Any authorized person of the Company shall execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business. Section 1.8 FISCAL YEAR. The fiscal year of the Company (the "FISCAL YEAR") shall end on December 31. Section 1.9 TAXATION. The Company shall not be, and the Member and the Board shall not permit the Company to elect to be, treated as an association taxable as a corporation for U.S. federal, state or local income tax purposes, including without limitation by electing to treat the Company as an association taxable as a corporation under Treasure Regulations section 301.7701-3(a) or any corresponding provision of state or local law. Section 1.10 CERTAIN RATIFIED ACTIONS. Without in any way limiting the generality of the foregoing or anything else contained in this Agreement or in any other document, Yael Lustmann, is hereby designated as an authorized person, within the meaning of the Act and the execution and filing of the Certificate of Formation of the Company on March 25, 2002, with the Secretary of State are hereby ratified and confirmed. ARTICLE II BOARD OF DIRECTORS Section 2.1 GENERALLY. The business and affairs of the Company shall be managed by or under the direction of a committee of the Company (the "BOARD") consisting of at least two natural persons designated as directors (the "DIRECTORS") as provided below. The Board shall have discretion to manage and control the business and affairs of the Company, to make decisions affecting the business and affairs of the Company, and to take actions as it deems necessary or appropriate to accomplish the purposes of the Company and to exercise all of the power and authority that limited liability companies may take under the Act, PROVIDED, HOWEVER, that there shall be reserved to the Member the powers that, under the Delaware General Corporation Law, are reserved to the stockholders of a corporation organized under laws of the State of Delaware. Section 2.2 ELECTION OF BOARD. The Directors shall be chosen by the Member. The initial Directors of the Company will be as set forth on Annex A hereto. Each Director shall hold office until a successor is selected by the Member or until such Director's death, resignation or removal. Each Director is hereby designated as a "manager" (within the meaning of the Act) of the Company. Section 2.3 MEETINGS OF THE BOARD. The Board shall meet from time to time to discuss the business of the Company. The Board may hold meetings either within or without the State of Delaware. Meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board or the 2 Member. Any Director may call a meeting of the Board on three days' notice to each other Director, either personally, by telephone, by facsimile or by any other similarly timely means of communication. Section 2.4 QUORUM AND ACTS OF THE BOARD. At all meetings of the Board, a majority of the Directors then in office shall constitute a quorum for the transaction of business. Except as otherwise provided in this Agreement, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if a majority of the members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 2.5 ELECTRONIC COMMUNICATIONS. Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. Section 2.6 COMMITTEES OF DIRECTORS. The Board may, by resolution passed by unanimous consent of the Directors, designate one or more committees. Such resolution shall specify the duties and quorum requirements of such committees, each such committee to consist of one or more of the Directors. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required. Section 2.7 COMPENSATION OF DIRECTORS. The Board shall have the authority to fix the compensation of Directors. The Directors may be paid their expenses, if any, of attendance at such meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated salary as Director. No such payment shall preclude any Director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. No Director who is an employee of the Member or the Company shall receive compensation for his or her service as a Director. 3 Section 2.8 RESIGNATION. Any Director may resign at any time by giving written notice to the Company. The resignation of any Director shall take effect upon receipt of such notice or at such later time as shall be specified in the notice; and, unless otherwise specified in the notice, the acceptance of the resignation by the Company, the Members or the remaining Directors shall not be necessary to make it effective. Section 2.9 REMOVAL OF DIRECTORS. If at any time the Member desires to remove, with or without cause, any Director, the Member shall have the power to take all such actions promptly as shall be necessary or desirable to cause the removal of such Director. Any vacancy caused by any such removal may be filled in accordance with Section 2.10. Section 2.10 VACANCIES. If any vacancies shall occur in the Board, by reason of death, resignation, removal or otherwise, the Directors then in office shall continue to act, and such vacancies may be filled by a majority of the Directors then in office, although less than a quorum. A Director selected to fill a vacancy shall hold office until his or her successor has been selected and qualified or until his or her earlier death, resignation or removal. Section 2.11 DIRECTORS AS AGENTS. The Directors, to the extent of their powers set forth in this Agreement, are agents of the Company for the purpose of the Company's business, and the actions of the Directors taken in accordance with such powers shall bind the Company. ARTICLE III OFFICERS Section 3.1 EXECUTIVE OFFICERS. The officers of the Company shall be a Chairman of the Board of Directors, a President, a Treasurer and a Secretary, all of whom shall be elected annually by the Board, and shall hold office during the pleasure of the Board. In addition, the Board may elect one or more Vice-Presidents, Assistant Treasurers, or Assistant Secretaries. All vacancies occurring among any of the officers shall be filled by the Board. Any officer may be removed and/or replaced at any time by the affirmative vote of a majority of the Directors present at a regular meeting of Directors or at a special meeting of Directors called for the purpose. The initial officers of the Company will be as set forth on Annex B hereto. Section 3.2 OTHER OFFICERS. The Board may appoint, remove and replace such other officers, including assistant officers and agents, with such powers and duties as it shall deem necessary. The Board may by resolution authorize the President to appoint and remove such other officers. Section 3.3 THE CHAIRMAN OF THE BOARD. The Chairman of the Board of Directors, if one be elected, shall preside when present at all meetings of the Board of Directors, and he or she shall have and perform such other duties as from time to time may be assigned by the Board of Directors, or the Executive Committee, if any. Section 3.4 THE PRESIDENT. The President shall be selected from among the directors, and shall, in the absence or non-election of a Chairman of the Board, preside at 4 all meetings of the directors. When the Board is not in session, the President shall have general management and control of the business and affairs of the Company. Section 3.5 THE VICE-PRESIDENT. The Vice-President, if any, or if there be more than one, the senior Vice-President as determined by the Board of Directors, shall in the absence or disability of the President, exercise the powers and perform the duties of the President, and each Vice-President shall exercise such other powers and perform such other duties as shall be prescribed by the Board. Section 3.6 THE TREASURER. The Treasurer shall have custody of all funds, securities and evidences of indebtedness of the Company; shall receive and give receipts and acquittances for moneys paid in on account of the Company, and shall pay out of the funds on hand all bills, payrolls, and other just debts of the Company, of whatever nature, upon maturity; shall enter regularly in books to be kept by him for that purpose, full and accurate accounts of all moneys received and paid out by the Treasurer on account of the Company, and shall perform all other duties incident to the office of Treasurer and as may be prescribed by the Board. Section 3.7 THE SECRETARY. The Secretary shall keep the minutes of all proceedings of the Board of Directors; shall attend to the giving and serving of all notices to the Directors or other notice required by law, or by this Agreement; shall affix the seal of the Company to deeds, contracts and other instruments in writing requiring a seal, when duly signed or when so ordered by the Board of Directors; shall have charge of the certificate books and stock books and such other books and papers as the Board may direct, and shall perform all other duties incident to the office of Secretary. Section 3.8 RELIANCE BY THIRD PARTIES. Any Person dealing with the Company or any Officer may rely upon a certificate signed by the President, Secretary or any Vice President as to: (a) the identity of the President or any Member, Director, or other Officer; (b) the existence or non-existence of any fact or facts which constitute a condition precedent to acts by the President, any other Officer, a Director, or the Board, or which are in any other manner germane to the affairs of the Company; (c) the Persons who are authorized to execute and deliver any instrument or document of or on behalf of the Company; or (d) any act or failure to act by the Company or as to any other matter whatsoever involving the Company or any Member. Section 3.9 SALARIES. The salaries of all officers shall be fixed by the Board of Directors, and the Board has the authority by majority vote to reimburse expenses. 5 ARTICLE IV CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS Section 4.1 MEMBERSHIP INTEREST. The Company shall have membership interests evidenced by a certificate in the form attached as ANNEX C. The Company shall issue to the Member a certificate to evidence its membership interest. Section 4.2 ADDITIONAL CAPITAL CONTRIBUTIONS. The Member shall have the right, but not the obligation, to make capital contributions to the Company in the form of cash, services or otherwise, at the times and in the amounts determined by the Member. Section 4.3 DISTRIBUTIONS. Distributions may be made to the Member at the times and in the aggregate amounts determined by the Board. Notwithstanding anything to the contrary contained herein, the Company, and the Member on behalf of the Company, shall not make a distribution to the Member on account of the interest of the Member in the Company if such distribution would violate Section 18-607 of the Act or any other applicable law. ARTICLE V DISSOLUTION, ASSIGNMENT, TRANSFER Section 5.1 DISSOLUTION. The Company shall be dissolved upon the earliest to occur of any of the following: (a) the sale, transfer or other disposition of all the assets of the Company, (b) the decision of the Member to dissolve the Company or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act. Section 5.2 ASSIGNMENTS. The Member shall be permitted to transfer all or part of its interest in the Company to any person or entity that assumes all or such portion of the Member's obligations under this Agreement. Section 5.3 RESIGNATION. The Member may only resign from the Company if it has transferred all of its interest in the Company to another person or entity. Section 5.4 ADDITIONAL MEMBERS. In the sole discretion of the Board of Directors, the Company may admit any person as an additional member of the Company. ARTICLE VI LIABILITY, EXCULPATION, INDEMNIFICATION Section 6.1 LIABILITY OF THE MEMBER. (a) Except as otherwise provided by the Act or herein, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. 6 (b) Neither the Member nor any of its or the Company's directors, officers, employees, shareholders, agents or representatives (each, a "COVERED PERSON"), shall be liable to the Company for any loss, liability, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company, except that a Covered Person shall be liable for any loss, liability, damage or claim incurred by reason of such Covered Person's gross negligence or willful misconduct. Section 6.2 FIDUCIARY DUTY. (a) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company, a Covered Person acting under this Agreement shall not be liable to the Company for such Covered Person's good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person. Whenever in this Agreement a Covered Person is permitted or required to make decisions in good faith, the Covered Person shall act under such standard and shall not be subject to any other or different standard imposed by this Agreement or any relevant provisions of law or in equity or otherwise. (b) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any person or entity as to matters the Covered Person reasonably believes are within such person's or entity's professional or expert competence. Section 6.3 INDEMNIFICATION. To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person's gross negligence or willful misconduct with respect to such acts or omissions; PROVIDED, that any indemnity under this Section 6.3 shall be provided out of and to the extent of Company assets only, and no Covered Person shall have any personal liability on account thereof. Section 6.4 EXPENSES. To the extent permitted by applicable law, expenses (including reasonable attorneys' fees, disbursements, fines and amounts paid in settlement) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding relating to or arising out of their performance of their duties on behalf of the Company may, from time to time and at the discretion of the Board, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to 7 repay such amount if it shall ultimately be determined that the Covered Person is not entitled to be indemnified as authorized in Section 6.3. ARTICLE VII MISCELLANEOUS Section 7.1 AMENDMENT, WAIVER, ETC. This Agreement may not be amended or supplemented, and no waiver of or consent to departures from the provisions hereof shall be effective, unless set forth in a writing signed by the Member. Section 7.2 BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of all parties hereto and their successors and permitted assigns. Section 7.3 SEVERABILITY. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Section 7.4 INTEGRATION. This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto. Section 7.5 NO THIRD-PARTY BENEFICIARIES. Except as provided in Article VI with respect to the exculpation and indemnification of Covered Persons, nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto and their successors and permitted assigns. Section 7.6 CERTIFICATES. (a) GENERAL. The Member shall be entitled to a certificate representing its interest in the Company, in such form as may from time to time be prescribed by the Board. Such certificate shall be signed by an officer of the Company, which signature may be a facsimile thereof. In case the officer of the Company who has signed or whose facsimile signature has been place on such certificate shall have ceased to be an officer of the Company before such certificate is issued, it may be issued by the Company with the same effect as if such person were an officer of the Company at the time of its issue. The certificate shall contain a legend with respect to any restrictions on transfer. (b) APPLICATION OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE. The Company hereby irrevocably elects that all interests in the Company shall be securities governed by Article 8 of the Uniform Commercial Code in effect in the State of Delaware. Each certificate evidencing an interest in the Company shall bear the following legend: "This Certificate evidences a membership interest in TGIA Acquisition Company, LLC and shall be a security for purposes of Article 8 of the Uniform Commercial Code in effect in the State of Delaware." 8 No change to this provision shall be effective until all outstanding certificates have been surrendered for cancellation and any new certificates thereafter issued shall not bear the foregoing legend. Section 7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 9 IN WITNESS WHEREOF, the undersigned, being the sole Member of the Company, intending to be legally bound hereby, has duly executed this Agreement as of the date first above written. NORTH AMERICAN VAN LINES, INC. By: /s/ Douglas V. Gathamy ----------------------------------------- Name: Douglas V. Gathamy Title: Vice President 10 ANNEX A DIRECTORS Robert J. Henry Lawrence A. Writt 11 ANNEX B OFFICERS Name Title Lawrence A. Writt Chairman, President and Treasurer Robert J. Henry Vice President and Secretary 12 ANNEX C TGIA ACQUISITION COMPANY, LLC CERTIFICATE OF MEMBERSHIP INTEREST The undersigned certifies that NORTH AMERICAN VAN LINES, INC. is the holder of _________ of membership interest in TGIA ACQUISITION COMPANY, LLC, a Delaware limited liability company (the "Company"). The membership interest represented by this Certificate is transferable only on the books of the Company by the holder hereof in person or by power of attorney upon surrender of this Certificate properly endorsed. IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed and signed this _____ day of ________, 2002. TGIA ACQUISITION COMPANY, LLC By: ------------------------------------ Name: Title: THE MEMBERSHIP INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (I) (A) SUCH DISPOSITION IS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (B) THE HOLDER HAS DELIVERED TO THE CORPORATION AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SUCH ACT, WHICH OPINION AND COUNSEL MUST BE REASONABLY SATISFACTORY TO THE COMPANY, OR (C) THE HOLDER HAS OBTAINED A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH DISPOSITION, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, AND (II) SUCH DISPOSITION IS PURSUANT TO, OR UNDER AN EXEMPTION FROM, REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE EVIDENCES A MEMBERSHIP INTEREST IN TGIA ACQUISITION COMPANY, LLC AND SHALL BE A SECURITY FOR PURPOSES OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE IN EFFECT IN THE STATE OF DELAWARE. EX-3.49 13 a2079698zex-3_49.txt EXHIBIT 3.49 EXHIBIT 3.49 [SEAL] CERTIFICATE OF FORMATION OF AWW ACQUISITION COMPANY, LLC This Certificate of Formation of AWW Acquisition Company, LLC (the "Company"), dated March 7, 2002, is being duly executed and filed by Laura Beny, as an authorized person, to form a limited liability company under the Delaware Limited Liability Company Act (6 DEL.C. Section 18-101, ET SEQ.). FIRST. The name of the limited liability company formed hereby is AWW Acquisition Company, LLC. SECOND. The address of the registered office of the Company in the State of Delaware is c/o Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. THIRD. The name and address of the registered agent for service of process on the Company in the State of Delaware are The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation as of the date first above written. /s/ Laura Beny --------------------- Laura Beny Authorized Person EX-3.50 14 a2079698zex-3_50.txt EXHIBIT 3.50 EXHIBIT 3.50 [SEAL] CERTIFICATE OF AMENDMENT OF CERTIFICATE OF FORMATION OF AWW ACQUISITION COMPANY, LLC 1. The name of the limited liability company is AWW Acquisition Company, LLC. 2. The Certificate of Formation of the limited liability company is hereby amended to change the name of the limited liability company to SIRVA Acquisition Company, LLC. 3. This Certificate of Amendment shall be effective on March 14, 2002. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Certificate of Formation this 14th day of March, 2002. /s/ Laura N. Beny --------------------- Laura N. Beny Authorized Person EX-3.51 15 a2079698zex-3_51.txt EXHIBIT 3.51 Exhibit 3.51 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF FORMATION OF SIRVA ACQUISITION COMPANY, LLC 1. The name of the limited liability company is SIRVA Acquisition Company, LLC. 2. The Certificate of Formation of the limited liability company is hereby amended to change the name of the limited liability company to SIRVA Relocation LLC. 3. This Certificate of Amendment shall be effective on May 13, 2002. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Certificate of Formation this 13th day of May, 2002. /s/ Ralph A. Ford --------------------------------------- Ralph A. Ford Secretary EX-3.52 16 a2079698zex-3_52.txt EXHIBIT 3.52 Exhibit 3.52 LIMITED LIABILITY COMPANY AGREEMENT OF SIRVA ACQUISITION COMPANY, LLC This Limited Liability Company Agreement (this "AGREEMENT") of SIRVA Acquisition Company, LLC, is entered into by SIRVA, Inc., as the sole member (the "MEMBER"), as of March 14, 2002. The Member hereby forms a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 DEL.C. Section 18-101, ET SEQ.), as amended from time to time (the "ACT"), and hereby agrees as follows: ARTICLE I NAME, PURPOSE, ETC. Section 1.1. NAME. The name of the limited liability company hereby formed is SIRVA Acquisition Company, LLC (the "COMPANY"). The Company may do business under that name and, as permitted by applicable law, under any other name determined from time to time by the Member. 1.2. PURPOSE. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any and all activities necessary or incidental to the foregoing. 1.3. TERM. The term of the Company commences on the date the Certificate of Formation is filed in the office of the Secretary of State of the State of Delaware and shall continue until the Company is dissolved pursuant to the provisions of Section 5.1 of this Agreement. 1.4. REGISTERED OFFICE. The address of the registered office of the Company in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The Company may also have offices at such other places within or without the State of Delaware as the Member may from time to time designate or the business of the Company may require. 1.5. REGISTERED AGENT. The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. 1.6. QUALIFICATION IN OTHER JURISDICTIONS. Any authorized person of the Company shall execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business. 1.7. FISCAL YEAR. The fiscal year of the Company (the "FISCAL YEAR") shall end on December 31. 1.8. TAXATION. The Company shall not, and the Member and the Board shall not permit the Company to elect to be treated as an association taxable as a corporation for U.S. federal, state or local income tax purposes, including without limitation by electing to treat the Company as an association taxable as a corporation under Treasury Regulations section 301.7701-3(a) or any corresponding provision of state or local law. 1.9 CERTAIN RATIFIED ACTIONS. Without in any way limiting the generality of the foregoing or anything else contained in this Agreement or in any other document, Laura Beny, is hereby designated as an authorized person, within the meaning of the Act and the execution and filing of the Certificate of Formation of the Company on March 7, 2002, and the Certificate of Amendment of Certificate of Formation of the Company on March 14, 2002, with the Secretary of State are hereby ratified and confirmed. 1.10 PROJECT BROWNSTONE. Without in any way limiting the generality of the foregoing or anything else contained in this Agreement or in any other document: (a) the Company be and is hereby authorized and empowered to purchase the relocation services business (the "BROWNSTONE BUSINESS") conducted by Cooperative Resource Services, Ltd., an Ohio limited liability company (the "BROWNSTONE SELLER"), and certain of its subsidiaries, through the purchase of the assets of the Seller related to such Brownstone Business and the capital stock of such subsidiaries for an equity purchase price of up to $60 million (the "BROWNSTONE EQUITY PURCHASE PRICE") and assumption of up to $65 million of indebtedness (the "BROWNSTONE ASSUMED DEBT") of the Brownstone Business (the "BROWNSTONE ACQUISITION"); (b) the form, terms and provisions of the Purchase Agreement (the "BROWNSTONE PURCHASE AGREEMENT"), among the Member, the Company, the Brownstone Seller, Edward J. Davidson and the other parties thereto, a draft dated March 15, 2002 of which has been distributed to the Member, which is conditioned upon, among other things, the consent of the lenders to the Member and its subsidiaries under certain financing facilities of the Member and its subsidiaries, and providing for, among other things, the purchase of the assets of the Seller and the capital stock of certain of its subsidiaries relating to the Brownstone Business, be and it is hereby authorized and approved, and that any of the President, any Vice President, Treasurer or Secretary (each an "AUTHORIZED OFFICER") be, and they hereby are, authorized and empowered to execute and deliver each such agreement in the name and on behalf of the Company, substantially in such form with such changes, additions or deletions as any Authorized Officer executing such agreement may approve, his or her execution thereof to be conclusive evidence of such approval and of such Officer's authority to do so; (c) the Company be, and it hereby is, authorized and empowered to perform its respective obligations under the Brownstone Purchase Agreement, and to consummate the transactions contemplated thereby, including but not limited to the Brownstone Acquisition and the payment of the purchase price under the Brownstone Agreement; 2 (d) the form, terms and provisions of each of (i) the Tranche A Note and Tranche B Note, (ii) the Escrow Agreement, (iii) the Transitional Services Agreement, (iv) the Commercial Services Agreement, (v) the Cleveland HQ Sublease, and (vi) the Consulting Agreement, each substantially in the form of the draft attached to the Brownstone Purchase Agreement, and which is to be entered into in connection with the closing of the Brownstone Acquisition, by the parties contemplated by such agreement or note, be, and they hereby are, approved; and that any of the Authorized Officers be, and each of them hereby is, authorized and empowered to execute and deliver each such agreement or note in the name and on behalf of the Company, substantially in such form with such changes, additions or deletions as any Authorized Officer executing such agreement or note may approve, his or her execution thereof to be conclusive evidence of such approval and of such Officer's authority to do so; (e) the issuance by the Company of the Tranche A Note in the aggregate principal amount of $10 million and the Tranche B Note in the aggregate principal amount of $5 million, each to bear interest at an annual rate of 10 percent, be and it hereby is, approved; and (f) in connection with the Brownstone Acquisition, the Company be, and it hereby is, authorized to borrow up to $15 million in acquisition financing from such financial institutions and on such terms and conditions as the Treasurer may determine. ARTICLE II BOARD OF DIRECTORS 2.1. GENERALLY. The business and affairs of the Company shall be managed by or under the direction of a committee of the Company (the "BOARD") consisting of at least four natural persons designated as directors (the "DIRECTORS") as provided below. The Board shall have discretion to manage and control the business and affairs of the Company, to make decisions affecting the business and affairs of the Company, and to take actions as it deems necessary or appropriate to accomplish the purposes of the Company and to exercise all of the power and authority that limited liability companies may take under the Act, PROVIDED, HOWEVER, that there shall be reserved to the Member the powers that, under the Delaware General Corporation Law, are reserved to the stockholders of a corporation organized under laws of the State of Delaware. 2.2. ELECTION OF BOARD. The Directors shall be chosen by the Member. The initial Directors of the Company will be as set forth on Annex A hereto. Each Director shall hold office until a successor is selected by the Member or until such Director's death, resignation or removal. Each Director is hereby designated as a "manager" (within the meaning of the Act) of the Company. 2.3. MEETINGS OF THE BOARD. The Board shall meet from time to time to discuss the business of the Company. The Board may hold meetings either within or without the State of Delaware. Meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board or the Member. Any Director may call a meeting of the Board on three days' notice to each other Director, 3 either personally, by telephone, by facsimile or by any other similarly timely means of communication. 2.4. QUORUM AND ACTS OF THE BOARD. At all meetings of the Board, a majority of the Directors then in office shall constitute a quorum for the transaction of business. Except as otherwise provided in this Agreement, the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if a majority of the members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. 2.5. ELECTRONIC COMMUNICATIONS. Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. 2.6. COMMITTEES OF DIRECTORS. The Board may, by resolution passed by unanimous consent of the Directors, designate one or more committees. Such resolution shall specify the duties and quorum requirements of such committees, each such committee to consist of one or more of the Directors. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required. 2.7. COMPENSATION OF DIRECTORS. The Board shall have the authority to fix the compensation of Directors. The Directors may be paid their expenses, if any, of attendance at such meeting of the Board and may be paid a fixed sum for attendance at each meeting of the Board or a stated salary as Director. No such payment shall preclude any Director from serving the Company in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. No Director who is an employee of the Member or the Company shall receive compensation for his or her service as a Director. 4 2.8. RESIGNATION. Any Director may resign at any time by giving written notice to the Company. The resignation of any Director shall take effect upon receipt of such notice or at such later time as shall be specified in the notice; and, unless otherwise specified in the notice, the acceptance of the resignation by the Company, the Members or the remaining Directors shall not be necessary to make it effective. 2.9. REMOVAL OF DIRECTORS. If at any time the Member desires to remove, with or without cause, any Director, the Member shall have the power to take all such actions promptly as shall be necessary or desirable to cause the removal of such Director. Any vacancy caused by any such removal may be filled in accordance with Section 2.10. 2.10. VACANCIES. If any vacancies shall occur in the Board, by reason of death, resignation, removal or otherwise, the Directors then in office shall continue to act, and such vacancies may be filled by a majority of the Directors then in office, although less than a quorum. A Director selected to fill a vacancy shall hold office until his or her successor has been selected and qualified or until his or her earlier death, resignation or removal. 2.11. DIRECTORS AS AGENTS. The Directors, to the extent of their powers set forth in this Agreement, are agents of the Company for the purpose of the Company's business, and the actions of the Directors taken in accordance with such powers shall bind the Company. ARTICLE III OFFICERS 3.1. EXECUTIVE OFFICERS. The officers of the Company shall be a Chairman of the Board of Directors, a President, a Treasurer and a Secretary, all of whom shall be elected annually by the Board, and shall hold office during the pleasure of the Board. In addition, the Board may elect one or more Vice-Presidents, Assistant Treasurers, or Assistant Secretaries. All vacancies occurring among any of the officers shall be filled by the Board. Any officer may be removed and/or replaced at any time by the affirmative vote of a majority of the Directors present at a regular meeting of Directors or at a special meeting of Directors called for the purpose. The initial officers of the Company will be as set forth on Annex B hereto. 3.2. OTHER OFFICERS. The Board may appoint, remove and replace such other officers, including assistant officers and agents, with such powers and duties as it shall deem necessary. The Board may by resolution authorize the President to appoint and remove such other officers. 3.3. THE CHAIRMAN OF THE BOARD. The Chairman of the Board of Directors, if one be elected, shall preside when present at all meetings of the Board of Directors, and he or she shall have and perform such other duties as from time to time may be assigned by the Board of Directors, or the Executive Committee, if any. 3.4. THE PRESIDENT. The President shall be selected from among the directors, and shall, in the absence or non-election of a Chairman of the Board, preside at all meetings 5 of the directors. When the Board is not in session, the President shall have general management and control of the business and affairs of the Company. 3.5. THE VICE-PRESIDENT. The Vice-President, if any, or if there be more than one, the senior Vice-President as determined by the Board of Directors, shall in the absence or disability of the President, exercise the powers and perform the duties of the President, and each Vice-President shall exercise such other powers and perform such other duties as shall be prescribed by the Board. 3.6. THE TREASURER. The Treasurer shall have custody of all funds, securities and evidences of indebtedness of the Company; shall receive and give receipts and acquittances for moneys paid in on account of the Company, and shall pay out of the funds on hand all bills, payrolls, and other just debts of the Company, of whatever nature, upon maturity; shall enter regularly in books to be kept by him for that purpose, full and accurate accounts of all moneys received and paid out by the Treasurer on account of the Company, and shall perform all other duties incident to the office of Treasurer and as may be prescribed by the Board. 3.7. THE SECRETARY. The Secretary shall keep the minutes of all proceedings of the Board of Directors; shall attend to the giving and serving of all notices to the Directors or other notice required by law, or by this Agreement; shall affix the seal of the Company to deeds, contracts and other instruments in writing requiring a seal, when duly signed or when so ordered by the Board of Directors; shall have charge of the certificate books and stock books and such other books and papers as the Board may direct, and shall perform all other duties incident to the office of Secretary. 3.9. RELIANCE BY THIRD PARTIES. Any Person dealing with the Company or any Officer may rely upon a certificate signed by the President, Secretary or any Vice President as to: (a) the identity of the President or any Member, Director, or other Officer; (b) the existence or non-existence of any fact or facts which constitute a condition precedent to acts by the President, any other Officer, a Director, or the Board, or which are in any other manner germane to the affairs of the Company; (c) the Persons who are authorized to execute and deliver any instrument or document of or on behalf of the Company; or (d) any act or failure to act by the Company or as to any other matter whatsoever involving the Company or any Member. 3.9. SALARIES. The salaries of all officers shall be fixed by the Board of Directors, and the Board has the authority by majority vote to reimburse expenses. ARTICLE IV CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS 6 4.1. INITIAL CAPITAL CONTRIBUTIONS. On or immediately prior to the Closing Date, the Member shall make an initial capital contribution to the Company in the amount of $10 cash. 4.2. ADDITIONAL CAPITAL CONTRIBUTIONS. The Member shall have the right, but not the obligation, to make capital contributions to the Company in the form of cash, services or otherwise, at the times and in the amounts determined by the Member. 4.3. CAPITAL ACCOUNTS. A capital account (a "CAPITAL ACCOUNT") shall be established and maintained for the Member. The Capital Account of the Member shall be adjusted, as of the close of business of each Accounting Period, as follows: (a) by crediting the Capital Account of the Member for any Capital Contributions made by the Member during such Accounting Period; (b) by crediting or debiting, as the case may be, the Capital Account of the Member for the Member's share of the Company's profits and losses, as determined under the Act, during such Accounting Period; and (c) by debiting the Capital Account of the Member by the amount of any distributions made to the Member during such Accounting Period. 4.4. DISTRIBUTIONS. Distributions may be made to the Member at the times and in the aggregate amounts determined by the Board. Notwithstanding anything to the contrary contained herein, the Company, and the Member on behalf of the Company, shall not make a distribution to the Member on account of the interest of the Member in the Company if such distribution would violate Section 18-607 of the Act or any other applicable law. ARTICLE V DISSOLUTION, ASSIGNMENT, TRANSFER 5.1. DISSOLUTION. The Company shall be dissolved upon the earliest to occur of any of the following: (a) the sale, transfer or other disposition of all the assets of the Company, (b) the decision of the Member to dissolve the Company or (c) the entry of a decree of judicial dissolution under Section 18-802 of the Act. 5.2. ASSIGNMENTS. The Member shall be permitted to transfer all or part of its interest in the Company to any person or entity that assumes all or such portion of the Member's obligations under this Agreement. 5.3. RESIGNATION. The Member may only resign from the Company if it has transferred all of its interest in the Company to another person or entity. 5.4. ADDITIONAL MEMBERS. In the sole discretion of the Board of Directors, the Company may admit any person as an additional member of the Company. ARTICLE VI LIABILITY, EXCULPATION, INDEMNIFICATION 7 6.1. LIABILITY OF THE MEMBER. (a) Except as otherwise provided by the Act or herein, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member of the Company. (b) Neither the Member nor any of its or the Company's directors, officers, employees, shareholders, agents or representatives (each, a "COVERED PERSON"), shall be liable to the Company for any loss, liability, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company, except that a Covered Person shall be liable for any loss, liability, damage or claim incurred by reason of such Covered Person's gross negligence or willful misconduct. 6.2. FIDUCIARY DUTY. (a) To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company, a Covered Person acting under this Agreement shall not be liable to the Company for such Covered Person's good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person. Whenever in this Agreement a Covered Person is permitted or required to make decisions in good faith, the Covered Person shall act under such standard and shall not be subject to any other or different standard imposed by this Agreement or any relevant provisions of law or in equity or otherwise. (b) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any person or entity as to matters the Covered Person reasonably believes are within such person's or entity's professional or expert competence. Section 6.3. INDEMNIFICATION. To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person's gross negligence or willful misconduct with respect to such acts or omissions; PROVIDED, that any indemnity under this Section 6.3 shall be provided out of and to the extent of Company assets only, and no Covered Person shall have any personal liability on account thereof. Section 6.4. EXPENSES. To the extent permitted by applicable law, expenses (including reasonable attorneys' fees, disbursements, fines and amounts paid in settlement) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding relating to or arising out of their performance of their duties on behalf of the 8 Company may, from time to time and at the discretion of the Board, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall ultimately be determined that the Covered Person is not entitled to be indemnified as authorized in Section 6.3. ARTICLE VII MISCELLANEOUS 7.1. AMENDMENT, WAIVER, ETC. This Agreement may not be amended or supplemented, and no waiver of or consent to departures from the provisions hereof shall be effective, unless set forth in a writing signed by the Member. 7.2. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of all parties hereto and their successors and permitted assigns. 7.3. SEVERABILITY. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. 7.4. INTEGRATION. This Agreement constitutes the entire agreement of the Member with respect to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto. 7.5. NO THIRD-PARTY BENEFICIARIES. Except as provided in Article VI with respect to the exculpation and indemnification of Covered Persons, nothing in this Agreement shall confer any rights upon any person or entity other than the parties hereto and their successors and permitted assigns. 7.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. 9 IN WITNESS WHEREOF, the undersigned, being the sole Member of the Company, intending to be legally bound hereby, has duly executed this Agreement as of the date first above written. SIRVA, INC. By: /s/ Ronald L. Milewski ----------------------------------------- Name: Ronald L. Milewski Title: Senior Vice President and Chief Financial Officer 10 ANNEX A DIRECTORS James W. Rogers Ronald L. Milewski Ralph A. Ford 11 ANNEX B OFFICERS Name Title James W. Rogers Chairman and President Ronald L. Milewski Vice President and Treasurer Ralph A. Ford Vice President and Secretary Michael Fergus Vice President 12 EX-3.53 17 a2079698zex-3_53.txt EXHIBIT 3.53 EXHIBIT 3.53 [LETTERHEAD] [SEAL] ARTICLES OF ORGANIZATION (Under Section 1705.04 of the Ohio Revised Code) Limited Liability Company The undersigned, desiring to form a limited liability company, under Chapter 1705 of the Ohio Revised Code, do hereby state the following: FIRST: The name of said limited liability company shall be ProSource Properties, Ltd. (THE NAME MUST INCLUDE THE WORDS "LIMITED LIABILITY COMPANY", "LIMITED", "LTD" OR "LTD.") SECOND: This limited liability company shall exist for a period of in perpetuity THIRD: The address to which interested persons may direct requests for copies of any operating agreement and any bylaws of this limited liability company is: 5875 Landerbrook Drive, Suite 200 (street or post office box) Mayfield Heights, Ohio 44124 (city, village or township) (state) (zip code) / / Please check this box if additional provisions are attached hereto Provisions attached hereto are incorporated herein and made a part of these articles of organization. [SEAL] 1 FOURTH: Purpose (optional) IN WITNESS WHEREOF, we have hereunto subscribed our names, this 22nd day of December , 1994. Signed: /s/ Renita Charrlin Signed: /s/ Edward J. Davidson -------------------------- ------------------------------------ Renita Charrlin Edward J. Davidson Signed: Signed: -------------------------- ------------------------------------ Signed: Signed: -------------------------- ------------------------------------ (IF INSUFFICIENT SPACE FOR ALL SIGNATURES, PLEASE ATTACH A SEPARATE SHEET CONTAINING ADDITIONAL SIGNATURES) INSTRUCTIONS 1. The fee for filing Articles of Organization for a limited liability company is $85.00. 2. Articles will be returned unless accompanied by a written appointment of agent signed by all or a majority of the members of the limited liability company which must include a written acceptance of the appointment by the named agent. 3. A limited liability company must be formed by a minimum of two persons. 4. Any other provisions that are from the operating agreement or that are not inconsistent with applicable Ohio law and that the members elect to set out in the articles for the regulation of the affairs of the limited liability company may be attached. [Ohio Revised Code Section 1705.04] 2 EX-3.54 18 a2079698zex-3_54.txt EXHIBIT 3.54 EXHIBIT 3.54 AMENDED AND RESTATED OPERATING AGREEMENT OF PROSOURCE PROPERTIES, LTD. An Ohio Limited Liability Company THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") is made and entered into as of the ________ day of April, 2002, by and among the persons listed on EXHIBIT A attached hereto and made a part hereof (hereinafter collectively referred to as the "Members", and, individually, as a "Member"). This Agreement amends and restates the Operating Agreement of Prosource Properties, Ltd., an Ohio limited liability company (the "Company"), dated December 31, 1994. ARTICLE I DEFINITIONS Section 1.1 DEFINITIONS. Whenever used in this Agreement the following terms shall have the meanings respectively assigned to them in this Article I unless otherwise expressly provided herein or unless the context otherwise requires: ACT: "Act" shall mean Ohio Revised Code 1705.01 to 1705.58, inclusive, as in effect from time to time in the State of Ohio. ADDITIONAL MEMBER: "Additional Member" shall mean any Person admitted as a Member of the Company after the date of original execution of this Agreement in accordance with the provisions of Section 4.2 hereof. AFFILIATE: "Affiliate" of another Person shall mean (a) any person directly or indirectly owning, controlling or holding with power to vote 10% or more of the outstanding voting securities of such other person; (b) any person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by such other person; (c) any person directly or indirectly controlling, controlled by, or under common control with, such other person; (d) any officer, director or partner of such other person; and (e) if such other person is an officer, director or partner in a company, the company for which such person acts in any such capacity. AGREED VALUE: "Agreed Value" shall mean the fair market value of Contributed Property as agreed to by the contributing Member and the Company, using such reasonable method of valuation as they may adopt. ASSIGNEE: "Assignee" shall mean a person who has acquired a beneficial interest in the Company from one of the Members, but who is not a Substitute Member. BANKRUPT MEMBER: "Bankrupt Member" shall mean any Member (a) that (i) makes a general assignment for the benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceedings; (iv) files a petition or answer seeking for the Member a reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Member in a proceeding of the type described in subclauses (i) through (iv) of this clause (a); or (vi) seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of the Member's or of all or any substantial part of the Member's properties; or (b) against which, a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any law has been commenced and ninety (90) days have expired without dismissal thereof or with respect to which, without the Member's consent or acquiescence, a trustee, receiver or liquidator of the Member or of all of any substantial part of the Member's properties has been appointed and sixty (60) days have expired without the appointment's having been vacated or stayed, or ninety (90) days have expired after the date of expiration of a stay, if the appointment has not previously been vacated. BANKRUPTCY CODE: "Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as amended, 11 U.S.C. 101 et seq. CAPITAL ACCOUNT: "Capital Account" shall mean, as to a Member, the account established and maintained for such Member pursuant to Article VI hereof. CAPITAL CONTRIBUTION: "Capital Contribution" shall mean the amount in cash or the Agreed Value of Contributed Property contributed by each Member (or his original predecessor in interest) to the capital of the Company for such Member's Membership Interest in the Company. CASH FLOW: "Cash Flow" shall mean all revenue received by the Company from Company operations, or from the sale, exchange or other disposition of all or any part of the property of the Company or from the refinancing of any mortgage indebtedness on the property owned by the Company, less all expenses of every kind (before deduction for cost recovery or other non-cash expenses) of the Company for any period. CODE: "Code" shall mean the Internal Revenue Code of 1986, as amended. CONTRIBUTED PROPERTY: "Contributed Property" shall mean each Member's interest in property or other consideration, (excluding services and cash) contributed to the Company by such Member. DEFAULT RATE OF INTEREST: "Default Rate of Interest" shall mean a rate per annum equal to the lesser of (a) 6% plus a varying rate per annum that is equal to the prime rate of interest as set forth in the Wall Street Journal from time to time with adjustments in that varying rate to be made on the same date as any change in that rate, and (b) the maximum rate permitted by applicable law. DISPOSE, DISPOSING OR DISPOSITION: "Dispose," "Disposing," or "Disposition" shall mean a sale, assignment, transfer, exchange, mortgage, pledge, grant of a security interest, or other disposition or encumbrance (including, without limitation, by operation of law), or the acts thereof. 2 EXCESS CASH FLOW: "Excess Cash Flow" shall mean Cash Flow of the Company in excess of such reserves as the Managers reasonably determine are necessary from time to time for the efficient operation of the Company's business. GENERAL RATE OF INTEREST: "General Rate of Interest" shall mean a rate per annum equal to the lesser of (a) 2% plus a varying rate per annum that is equal to the prime rate of interest rate as set forth in the Wall Street Journal from time to time with adjustments in that varying rate to be made on the same date as any change in that rate, and (b) the maximum rate permitted by applicable law. IRS: "IRS" shall mean the Internal Revenue Service. MANAGER: "Manager" shall mean each individual elected as a manager of the Company by the Members in accordance with the applicable provision of this Agreement. MEMBERS: "Members" shall mean the persons set forth on EXHIBIT A of this Agreement and any Person hereafter admitted to the Company as a Member as provided in this Agreement. MEMBERSHIP INTEREST: "Membership Interest" shall mean the interest of a Member in the Company, including, without limitation, rights to distributions (liquidating or otherwise) and allocations. The Membership Interest shall be expressed as a percentage for certain purposes herein, which percentage shall be set forth on EXHIBIT A hereto. OFFICER: "Officer" shall mean any individual appointed to act as the President, a Vice President or the Secretary of the Company or any other office established by the Managers pursuant to this Agreement. PERSON: "Person" shall have the meaning given that term in Section 1705.01(K) of the Act. REQUIRED INTEREST: "Required Interest" shall mean one or more Members having among them at least 51% of the Membership Interests of all Members. SUBSTITUTE MEMBER: "Substitute Member" shall mean any Person not a Member of the Company to whom a Membership Interest in the Company has been transferred and who has been admitted to the Company as a Member pursuant to and in accordance with the provisions of Section 4.5 of this Agreement. ARTICLE II ORGANIZATION Section 2.1 FORMATION; NAME. The Members hereby enter into this Agreement for the purpose of setting forth the rights and obligations of the Members. The name of the Company shall ProSource Properties, Ltd. Section 2.2 ARTICLES OF ORGANIZATION; FOREIGN QUALIFICATION. The Managers shall forthwith cause to be filed for record the Articles of Organization of the Company in the 3 offices of the Secretary of State of the State of Ohio (and in such other jurisdictions as the Managers deem appropriate) in accordance with 1705.04 of the Act. Prior to the Company's conducting business in any jurisdiction other than the state of Ohio, the Managers shall cause the Company to comply, to the extent procedures are available and those matters are reasonably within the control of the Managers, with all requirements necessary to qualify the Company as a foreign limited liability Company in that jurisdiction. At the request of the Managers, each Member shall execute, acknowledge, swear to, and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue and terminate the Company as a foreign limited liability company in all such jurisdictions in which the Company may conduct business. Section 2.3 NO STATE LAW PARTNERSHIP; LIABILITY TO THIRD PARTIES. The Members intend that the Company not be a partnership (including, without limitation, a limited partnership) or joint venture, and that no Member or Manager be a partner or joint venturer of any other Member or Manager, for any purposes other than federal and state tax purposes, and that this Agreement not be construed to suggest otherwise. Except as otherwise provided in the Act, no Member or Manager shall be liable for the debts, obligations or liabilities of the Company, including under a judgment decree or order of a court. ARTICLE III PURPOSES AND POWERS, REGISTERED OFFICE AND REGISTERED AGENT AND TERM OF COMPANY Section 3.1 PURPOSES AND POWERS. The Company has been formed for the purpose of (i) engaging in the acquisition and disposal of real and other properties for profit; (ii) engaging in providing of relocation services and administration for corporate and other clients; (iii) acting as a real estate broker and manager; and (iv) conducting any business that may lawfully be conducted by a limited liability company formed under the Act. The Company shall have all of the powers granted to a limited liability company under the laws of the State of Ohio, including, without limitation, the powers specifically enumerated in 1705.03 of the Act. Section 3.2 REGISTERED AGENT. The registered agent for service of process on the Company in the State of Ohio shall be A.G.C. Co., whose address is 3200 National City Center, Cleveland, Ohio 44114. The Managers may change, at any time and from time to time, such statutory agent. Section 3.3 TERM. The Company as herein constituted shall continue until December 31, 2024, unless earlier dissolved or terminated, pursuant to law or the provisions of this Agreement. ARTICLE IV MEMBERSHIP, DISPOSITIONS OF INTERESTS AND BANKRUPT MEMBER Section 4.1 NAMES, ADDRESSES AND PERCENTAGE INTERESTS. The names, addresses, capital contributions and Percentage Interests of Membership Interests of the Members are set forth on EXHIBIT A hereto. The Managers shall promptly named EXHIBIT A from 4 time to time to reflect the admission or withdrawal of a Member; a change in a Member's address; the sale, grant, issuance or redemption of Membership Interests; or the receipt of Capital Contributions; and any such amendment shall be effective as of the event necessitating such amendment. Section 4.2 ADDITIONAL MEMBERS; ELIMINATION OF PREEMPTIVE RIGHTS. Additional Persons may be admitted to the Company as Members and Membership Interests may be created and issued to those Persons and to existing Members at the direction of (a) a majority of the Managers who are Members, or (b) if there are no Managers who are Members, a Required Interest, on such terms and conditions as the Manager or Members, as the case may be, may determine at the time of admission. The terms of admission or issuance must specify the Capital Contribution and Membership Interest applicable thereto and may provide for the creation of different classes or groups of Members and having different rights, powers and duties. The Managers shall reflect the creation of any new class or group in an amendment to this Agreement indicating the different rights, powers and duties, and such an amount need be executed only by the managers. Any such admission shall be effective only after the new Member has executed and delivered to the Managers a document including the new Member's notice address and its agreement to be bound by this Agreement. No Member or holder of any Membership Interest of any class shall be entitled as such, as a matter of right, to subscribe for or purchase Membership Interests of any class, now or hereafter authorized, or to subscribe for or purchase securities convertible into or exchangeable for Membership Interests in the Company or to which shall be attached or appertain any warrants or rights entitling the holder thereof to subscribe for or purchase Membership Interests. Section 4.3 INTERESTS IN A MEMBER. A Member that is not a natural person may not cause or permit a Membership Interest, direct or indirect, in itself to be Disposed of such that, after the Disposition (a) the Company would be considered to have terminated within the meaning of Section 708 of the Code, or (b) without the consent of a Required Interest, that Member shall cease to be controlled by substantially the same Persons who control it as of the date of its admission to the Company. On any breach of the provisions of clause (b) of the immediately preceding sentence, the Company shall have the option to buy, and on exercise of the option the breaching Member shall sell, the breaching Member's Membership Interest, all in accordance with Section 4.6 as if the breaching Member were a Bankrupt Member. Section 4.4 WITHDRAWAL. Except as set forth in this Agreement or in a written agreement between the Company and one or more Members, a Member does not have the right or power to withdraw from the Company as a Member. Section 4.5 RESTRICTION ON THE DISPOSITION OF A MEMBERSHIP INTEREST; RIGHT OF FIRST REFUSAL. (a) Except as specifically provided in this Section 4.5, a Disposition of a Membership Interest in the Company may not be effected without first offering the Membership Interest to be Disposed of to the Company on the same terms and conditions as the proposed Disposition. The Company may exercise its right of first refusal by providing written notice thereof at any time within the sixty (60) day period commencing on the date that the right of first refusal arises to the Member seeking to Dispose of its Membership Interest. If the Company exercises its right of first refusal, the closing of the sale of the interest of such Member shall take 5 place no later than sixty (60) days after such exercise unless otherwise provided by agreement of the Company and the selling Member. If the Company does not elect to exercise its right of first refusal, the Member seeking to Dispose of its Membership Interest may do so provided such Member has obtained the consent (which my be granted or withheld in the sole discretion of the Person whose consent is required) of a Required Interest. Any attempted Disposition by a Person of an interest or right, or any part thereof, in or in respect of the company other than in accordance with this Section 4.5 shall be, and is hereby declared, null and void ab initio. (b) Subject to the provisions of subsections 4.5(c), (d) and (e), a Person to whom an Membership Interest in the Company is transferred has the right to become a Substitute Member owning the Membership Interest so transferred to such Person, if (i) the Member making such transfer grants the transferee the right to be so admitted, and (ii) such transfer is consented to by a Required Interest in accordance with Section 4.5(a) above. (c) The Company shall not recognize for any purpose any purported Disposition of all or part of a Membership Interest unless and until the other applicable provisions of this Section 4.5 have been satisfied and the Managers have received, on behalf of the Company, a document (i) executed by both the Member effecting the Disposition and the Person to which the Membership Interest or part thereof is Disposed, (ii) including the notice address of any Person to be admitted to the Company as a Substitute Member and such Person's agreement to be bound by this Agreement in respect of the Membership Interest or part thereof being obtained, (iii) setting forth the Membership Interest after the Disposition of the Member effecting the Disposition and the Person to which the Membership Interest or part thereof is Disposed, and (iv) containing a warranty and representation that the Disposition was made in accordance with all applicable laws and regulations. Each Disposition and, if applicable, admission complying with the provisions of this Section 4.5(c) is effective as of the first day of the calendar month immediately succeeding the month in which the Managers receive the notification of Disposition and the other requirements of this Section 4.5 have been met. (d) For the right of a Member to Dispose of a Membership Interest or any part thereof or of any Person to be admitted as a Substitute Member in connection therewith to exist or be exercised, (i) either (A) the Membership Interest or part thereof subject to the Disposition must be registered under the Securities Act of 1933, as amended, and any applicable state securities laws or (B) the Company must receive a favorable opinion of the Company's legal counsel to the effect that the Disposition or admission is exempt from registration under those laws, and (ii) the Company must receive a favorable opinion of the Company's legal counsel to the effect that the Disposition or admission, when added to the total of all other sales, assignments or other Dispositions within the preceding twelve months, would not result in the Company's being considered to have terminated within the meaning of the code. (e) The Member effecting a Disposition and any Person admitted as a Substitute Member in connection therewith shall pay, or reimburse the Company for, all reasonable costs incurred by the Company in connection with the Disposition (including, without limitation, the legal fees incurred in connection with the legal opinions referred to in Section 4.5(d)) on or before the tenth day after the receipt by that Person of the Company's invoice for 6 the amount due. If payment is not made by the date due, the Person owing that amount shall pay interest on the unpaid amount from the date due until paid at the Default Rate of Interest. Section 4.6 BANKRUPT MEMBER. Subject to Section 9.1(c), if any Member becomes a Bankrupt Member, the Company shall have the option, exercisable by notice from the Managers to the Bankrupt Member (or its representative) at any time prior to the 180th day after receipt of notice of the occurrence of the event causing it to become a Bankrupt Member, to buy, and on the exercise of this option the Bankrupt Member or its representative shall sell, its Membership Interest. The purchase price shall be an amount equal to the fair market value thereof determined by agreement by the Bankrupt Member (or its representative) and the Managers; however, if those Persons do not agree on the fair market value on or before the 30th day following the exercise of the option, either such Person, by notice to the other, may require the determination of fair market value to be made by an independent appraiser specified in that notice. If the Person receiving that notice objects on or before the tenth day following receipt to the appraiser designated in that notice, and those Persons otherwise fail to agree an independent appraiser, either such Person may petition the United States District Judge for the Northern District of Ohio then senior in service to designate an independent appraiser. The determination of the independent appraiser, however designated, is final and binding on all parties. The Bankrupt Member and the Company each shall pay one-half of the costs of the appraisal. The Company, if it elects to so purchase such Membership Interest shall pay the fair market value as so determined in five equal cash installments, the first due on closing and the remainder (together with accumulated interest on the amount unpaid at the General Interest Rate) due on each of the first four anniversaries thereof. The payment to be made to the Bankrupt Member or its representative pursuant to this Section 4.6 is in complete liquidation and satisfaction of all the riots and interest of the Bankrupt Member and its representative (and of all Persons claiming by, through, or under the Bankrupt Member and its representative) in and in respect of the Company, including, without limitation, any Membership Interest and any rights in specific Company property, and any rights against the Company and (insofar as the affairs of the Company are concerned) against the Members. ARTICLE V CAPITAL CONTRIBUTIONS Section 5.1 CAPITAL CONTRIBUTIONS. The Capital Contributions of the Members are set forth on EXHIBIT A to this Agreement. No Member will be required to make any Capital Contributions other than the initial Capital Contributions required to be made by such Member pursuant to this Section 5.1. Section 5.2 ADDITIONAL MEMBERS. Each Additional Member shall make the Capital Contribution - determined to be made by such Additional Member at the time such Additional Member is admitted as a Member of the Company in accordance with Section 4.2 of this Agreement. Section 5.3 ADDITIONAL CAPITAL. If a Required Interest determines that from time to time additional capital is needed to carry on the business of the Company, THE MANAGERS 7 ARE EMPOWERED TO SELL SUCH ADDITIONAL MEMBER INTERESTS OR TO INCUR SUCH ADDITIONAL INDEBTEDNESS AS IS APPROVED BY A REQUIRED INTEREST. No Member shall be required to contribute additional capital to the Company. Section 5.4 RETURN OF CONTRIBUTIONS. A Member is not entitled to the return of any part of its Capital Contributions or to interest in respect of either its capital account or its Capital Contributions UNLESS SPECIFICALLY PROVIDED FOR HEREIN. An unreturned Capital Contribution is not a liability of the Company or of any Member. ARTICLE VI PROFITS, LOSSES, ACCOUNTING, TAXES AND DISTRIBUTIONS Section 6.1 ALLOCATION OF PROFITS AND LOSSES. Except as otherwise provided in and subject to the provisions of this Agreement and Exhibit B hereto, net losses incurred by the Company and net profits from, the operation of the business of the Company (including gain or loss from the sale, exchange or other disposition of all or any portion of the assets of the Company) shall be divided among and borne by the Members in accordance with the Members' Membership Interests except that Preferred Interests shall only be entitled to allocations in accordance with the terms of the Preferred Class of Interests set forth in the Company action adopted to authorize issuance or in the agreements by and between the Preferred Member and the Company. Section 6.2 BOOKS; FISCAL YEAR; ACCOUNTING TERMS. (a) The books of the Company shall be kept on the accrual basis and in accordance with accounting principles consistently applied. (b) The fiscal year of the Company shall be the calendar year. (c) The terms "profits", and "losses," as used herein, shall mean profits and losses as determined for federal income tax purposes and shall also include each Member's share of income described in Section 705(a)(1)(B) of the Code, any expenditures described in Section 705(a)(2)(B) of the Code, any expenditures described in Section 709(a) of the Code which are not deducted or amortized in accordance with Section 709(b) of the Code, losses not deductible pursuant to Sections 267(a) and 707(b) of the Code and adjustments made pursuant to Exhibit B. (d) Unless prohibited by the Code, Company shall use the cash method of accounting for tax purposes. Section 6.3 CAPITAL ACCOUNTS. (a) There shall be maintained a Capital Account for each Member in accordance with this Section 6.3 and the principles set forth in Exhibit B attached hereto and made a part hereof. The amount of cash or the Agreed Value of Contributed Property contributed to the Company by each Member, net of liabilities assumed by the Company or to which the property of the Company is subject, shall be credited to such Member's Capital Account, and from time to time, but not less often than annually, the share of each Member in 8 profits, losses and fair market value of distributions shall be credited or charged to such Member's Capital Account. The determination of Members' Capital Accounts, and any adjustments thereto, shall be made consistent with tax accounting and other principles set forth in Section 704(b) of the Code and the applicable regulations thereunder. (b) Except as otherwise specifically provided herein, no Member shall be required to make any further contribution to the capital of the Company to restore a loss, to discharge any liability of the Company or for any other purpose, nor shall any Member personally be liable for any liabilities of the Company or of any other Member except as provided by law or this Agreement. (c) Immediately following the transfer of any Membership Interest, the Capital Account of the transferee Member shall be equal to the Capital Account of the transferor Member attributable to the transferred Membership Interest and such Capital Account shall not be adjusted to reflect any basis adjustment under Section 743 of the Code. (d) For purposes of computing the amount of any item of income, gain, deduction or loss to be reflected in the Members' Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes, taking into account any adjustments required pursuant to Section 704(b) of the Code and the applicable regulations thereunder as more fully described in Exhibit B. Section 6.4 ELECTIONS. The Managers shall elect pursuant to Section 754 of the Code to adjust the basis of the Company's assets for all transfers of Membership Interests if such election would benefit any Member or the Company. Section 6.5 TAX RETURNS. The Managers shall cause to be prepared and filed all necessary federal and state income tax returns for the Company. Each Member shall furnish to the Managers all pertinent information in its possession relating to Company operations that is necessary to enable the Company's income tax returns to be prepared and filed. Neither the Company nor any Manager or Member may make an election for the Company to be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of applicable state law, and no provision of this Agreement shall be construed to sanction or approve such an election. Section 6.6 TAX MATTERS PARTNER. A majority of the Managers who are Members shall designate one Manager that is a Member to be the "tax matters partner" of the Company pursuant to Section 6231(a)(7) of the Code; or, if there is no Manager that is a Member, the "tax matters partner" shall be a Member that is designated as such by a Required Interest. Any Member who is designated "tax matters partner" shall inform each other Member of all significant matters that may come to its attention in its capacity as "tax matters partner" by giving notice thereof on or before the fifth business day after becoming aware thereof and, within that time, shall forward to each Member copies of all significant written communications it may receive in that capacity. Any Member who is designated "tax matters partner" may not take any action contemplated by Section 6222 through 6232 of the Code without the consent of a Required Interest, but this sentence does not authorize such Manager (or any other Manager) to take any action left to the determination of an individual Member under Sections 6222 through 6232 of the Code. 9 Section 6.7 DISTRIBUTIONS OF EXCESS CASH FLOW. From time to time (but at least once each calendar year) the Managers shall determine in their reasonable judgment to what extent (if any) there exists Excess Cash Flow. Any such Excess Cash Flow shall be distributed to the Members in accordance with their respective Membership Interests within ninety (90) days following the close of each fiscal year of the Company. Section 6.8 WITHDRAWALS. No Member shall be entitled to make withdrawals from his Capital Account except as provided herein. ARTICLE VII MANAGERS Section 7.1 MANAGEMENT BY MANAGERS. (a) Except for situations in which the approval of the Members is required by this Agreement or by nonwaivable provisions of applicable law, and subject to the provisions of subsection (b) below, (i) the powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Managers; and (ii) the Managers may make all decisions and take all actions for the Company not otherwise provided for in this Agreement, including, without limitation, the following: (i) entering into, making, and performing contracts, agreements, and other undertakings binding the Company that may be necessary, appropriate, or advisable in furtherance of the purposes of the Company and making all decisions and waivers thereunder; (ii) opening and maintaining bank and investment accounts and arrangements, drawing checks and other orders for the payment of money, and designating individuals with authority to sign or give instructions with respect to those accounts and arrangements; (iii) maintaining the assets of the Company in good order; (iv) collecting sums due the Company; (v) to the extent that funds of the Company are available therefor, paying debts and obligations of the Company; (vi) acquiring, utilizing for Company purposes, and disposing of any asset of the Company; (vii) borrowing money or otherwise committing the credit of the Company for Company activities and voluntary prepayments or extensions of debt; (viii) selecting, removing, and changing the authority and responsibility of lawyers, accountants, and other advisors and consultants; (ix) obtaining insurance for the Company; 10 (x) determining distributions of Company Excess Cash Flow and other property as provided in Section 6.7; and (xi) establishing a seal for the Company. (b) Notwithstanding the provisions of Section 7.1(a), the Managers may not cause the Company to do any of the following without the approval of Members holding a Required Interest: (i) sell, lease, exchange or otherwise dispose of (other than by way of a pledge, mortgage, deed of trust or trust indenture) all or substantially all of the Company's property and assets, other than in the usual and regular course of the Company's business; (ii) be a party to (1) a merger, or (2) an exchange or acquisition; or (iii) amend or restate the Articles of Organization of the Company or this Agreement (except as specifically provided for in Article X of this Agreement). Section 7.2 NUMBER OF MANAGERS. Until changed in accordance with the provisions of this section, the number of Managers of the Company, none of whom need be Members, shall be one. The number of Managers may be fixed or changed at any annual meeting or at any special meeting called for that purpose by the affirmative vote of a Required Interest. Section 7.3 ELECTION OF MANAGERS. Managers shall be elected at the annual meeting of Members, but when the annual meeting is not held or managers are not elected thereat, they may be elected at a special meeting called and held for that purpose. Such election shall be by ballot whenever requested by any Member entitled to vote at such election; but, unless such request is made, the election may be conducted in any manner approved at such meeting. At each meeting of Members for the election of Managers, the persons receiving the greatest number of votes shall be Managers. Each Member shall be entitled to cast one vote for each whole percentage point comprising such Member's Membership Interest. Upon execution of this Agreement, the Manager shall be COOPERATIVE RESOURCE SERVICES, LTD., an Ohio limited liability company, until its successor is duly elected and qualified. Section 7.4 TERM OF OFFICE. Each Manager shall hold office until the annual meeting next succeeding his election and until his successor is elected and qualified, or until his earlier resignation, removal from office or death. Section 7.5 REMOVAL. All of the Managers or any individual Manager may be removed from office, without assigning any cause, by the vote of a Required Interest. In case of any such removal, a new Manager may be elected at the same meeting for the unexpired term of each Manager removed. 11 Section 7.6 VACANCIES. Manager vacancies may be filled by a majority vote of the remaining Managers until an election to fill such vacancies is had. Members entitled to elect Managers shall have the right to fill any vacancy (whether the same has been temporarily filled by the remaining Managers or not) at any meeting of the Members called for that purpose, and any Managers elected at any such meeting of Members shall serve until the next annual election of Managers and until their successors are elected and qualified. Section 7.7 QUORUM AND TRANSACTION OF BUSINESS. A majority of the whole authorized number of Managers shall constitute a quorum, for the transaction of business, except that a majority of the Managers in office shall constitute a quorum for filling a vacancy on the board. Whenever less than a quorum is present at the time and place appointed for any meeting of the Managers, a majority of those present may adjourn the meeting from time to time, until a quorum shall be present. The act of a majority of the Managers present at a meeting at which a quorum is present shall be the act of the Managers. Section 7.8 ANNUAL MEETING. Annual meetings of the Managers shall be held immediately following annual meetings of the Members, or as soon thereafter as is practicable. If no annual meeting of the Members is held, or if Managers are not elected thereat, then the annual meeting of the Managers shall be held immediately following any special meeting of the Members at which managers are elected, or as soon thereafter as is practicable. If such annual meeting of Managers is held immediately following a meeting of the Members, it shall be held at the same place at which such Members' meeting was held. Section 7.9 REGULAR MEETINGS. Regular meetings of the Managers shall be held at such times and places, within or without the State of Ohio, as the Managers may, by resolution or by-law, from time to time, determine. The secretary shall give notice of each such resolution or by-law to any Manager who was not present at the time the same was adopted, but no further notice of such regular meeting need be given. Section 7.10 SPECIAL MEETINGS. Special meetings of the Managers may be called by the chairman, the president, any vice president, or any two Managers, and shall be held at such times and places, within or without the State of Ohio, as may be specified in such call. Section 7.11 NOTICE OF ANNUAL OR SPECIAL MEETINGS. Notice of the time and place of each annual or special meeting shall be given to each Manager by the secretary or by the person or persons calling such meeting. Such notice need not specify the purpose or purposes of the meeting and may be given in any manner or method and at such time so that the Manager receiving it may have reasonable opportunity to participate in the meeting. Such notice shall, in all events, be deemed to have been properly and duly given if mailed at least forty-eight (48) hours prior to the meeting and directed to the residence of each Manager as shown upon the secretary's records and, in the event of a meeting to be held through the use of communications equipment, if the notice sets forth the telephone number at which each Manager may be reached for purposes of participation in the meeting as shown upon the secretary's records and states that the secretary must be notified if a Manager desires to be reached at a different telephone number. 12 The giving of notice shall be deemed to have been waived by any Manager who shall participate in such meeting and may be waived, in a writing, by any Manager either before or after such meeting. Section 7.12 ACTIONS BY MANAGERS; COMMITTEES; DELEGATION OF AUTHORITY OF DUTIES. (a) In managing the business and affairs of the Company and exercising its powers, the Managers shall act (i) collectively through meetings and written consents pursuant to Sections 7.14; (ii) through committees; and (iii) through Managers or officers to whom authority and duties have been delegated pursuant to this Agreement on a written consent. Section 7.13 APPROVAL OR RATIFICATION OF ACTS OR CONTRACTS BY MEMBERS. The Managers in their discretion may submit any act or contract for approval or ratification at any annual meeting of the Members, or at any special meeting of the Members called for the purpose of considering any such act or contract, and any act or contract that shall be approved or be ratified by a Required Interest shall be as valid and as binding upon the Company and upon all the Members as if it shall have been approved or ratified by every Member of the Company. Section 7.14 ACTION BY WRITTEN CONSENT OR TELEPHONE CONFERENCE. Any action permitted or required by the Act, the Articles of Organization or this Agreement to be taken at a meeting of the Managers or any committee designated by the Managers may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed by all Managers or members of such committee, as the case may be. Such consent shall have the same force and effect as a unanimous vote at a meeting and may be stated as such in any document or instrument filed with the Secretary of State of Ohio, and the execution of such consent shall constitute attendance or presence in person at a meeting of the Managers or any such committee, as the case may be. Subject to the requirements of the Act, the Articles of Organization or this Agreement for notice of meetings, unless otherwise restricted by the Articles of Organization, Managers, or members of any committee designated by the Managers, may participate in and hold a meeting of the Managers or any committee of Managers, as the case may be, by means of a conference telephone or similar communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in such meeting shall constitute attendance and presence in person at such meeting, except where a Person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Section 7.15 COMPENSATION. Any Member and any Manager may receive compensation for their services if approved by a Required Interest. Section 7.16 OFFICERS. The Managers may elect a chairman, a CHIEF EXECUTIVE OFFICER (CEO), such number of vice presidents as the chairman and/or the CEO, acting together if both be elected, may from time to time determine, a secretary and a treasurer. The Managers may from time to time create such offices and appoint such other officers, subordinate officers and assistant officers as they may determine. The CEO, any vice president who succeeds to the office of the CEO, and the chairman shall be, but the other officers need not be, chosen from among the Managers. Any two of such offices, other than that of CEO and vice president, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity. 13 Each officer of the many shall hold office during the pleasure of the Managers, and, unless sooner removed by the Managers, until the organization meeting of the Managers following the date of their election and until their successors are chosen and qualified. The Managers may rove arty officer at any time, with or without cause. A vacancy in any office, however created, shall be filled by the Managers. The officers shall have the following duties: (a) CHAIRMAN. The chairman shall preside at all meetings of the Managers and shall have such other powers and duties as may be prescribed by the Managers. (b) CEO. The CEO shall be the PRESIDENT of the Company and shall exercise supervision over the business of the company and over its several officers, subject, however, to the control of the Managers. He shall preside at all meetings of Members, and, in the absence of the Chairman shall also preside at meetings of the Managers. He shall have authority to sign all certificates and all deeds, mortgages, bonds, agreements, notes, and other instruments requiring his signature and shall have all the powers and duties the Managers may from time to time assign to him. (c) VICE PRESIDENTS. The vice presidents shall have such powers and duties as may from time to time be assigned to them by the Managers or the CEO. At the request of the CEO, or in the case of his absence or disability, the vice president designated by the CEO (or in the absence of such designation, the vice president designated by the Managers) shall perform all the duties of the CEO and, when so acting, shall have all the powers of the CEO. The authority of vice presidents to sign in the name of the Company certificates and deeds, mortgages, bonds, agreements, notes and other instruments shall be coordinate with like authority of the CEO. (d) SECRETARY. The secretary shall keep minutes of all the proceedings of the Members and Managers and shall make proper record of the same, which shall be attested by him; shall have authority to execute and deliver certificates as to any of such proceedings and any other records of the Company; shall have authority to sign all certificates and all deeds, mortgages, bonds, agreements, notes and other instruments to be executed by the Company which require his signature: shall give notice of meetings of Members and Managers; shall produce on request at each meeting of Members a certified list of Members arranged in alphabetical order: shall keep such books and records as may be required by law or by the Managers: and, in general, shall perform all duties incident to the office of secretary and such other duties as may from time to time be assigned to him by the Managers or the president. (e) TREASURER. The treasurer shall be the chief financial officer of the Company and shall have general supervision of all finances; he shall receive and have in charge all money, bills, notes, deeds, leases, mortgages and similar property belonging to the Company, and shall do with the same as may from time to time be required by the Managers. He shall cause to be kept adequate and correct accounts of the business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, contributed capital and Membership Interests, together with such other accounts as may be required, and upon the expiration of his term of office shall turn over to his successor or to the Managers all property, books, papers and money of the Company in his hands: and shall have such other powers and duties as may from time to time be assigned to him by the managers or the president. (f) ASSISTANT AND SUBORDINATE OFFICERS. The Managers may appoint such assistant and subordinate officers as they may deem desirable. Each such officer shall hold office 14 during the pleasure of the Managers, and perform such duties as the Managers or the CEO may prescribe. The Managers may, from time to time, authorize any officer to appoint and remove subordinate officers, to prescribe their authority and duties, and to fix their compensation. Section 7.17 INDEMNIFICATION. (a) INDEMNIFICATION IN NON-DERIVATIVE ACTIONS. The Company may indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the Company, by reason of the fact that he is or was a Manager, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, Manager, trustee, officer, partner, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, limited liability company or other enterprise, against expenses, including attorneys' fees, judgments, fines, and warrants paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Company, and with respect to any criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful. (b) INDEMNIFICATION IN DERIVATIVE ACTIONS. The Company may, to the extent permitted by applicable law, indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a Manager, officer, employee or agent of the Company, or is or was serving at the request of the Company as a Manager, trustee, officer, partner, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, limited liability company or other enterprise against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that the court in which such action or suit was brought, shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper. (c) INDEMNIFICATION AS MATTER OF RIGHT. To the extent that a Manager, officer, employee or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in subsections (a) and (b) of this Section 7.17, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses, including attorneys' fees, actually and reasonably incurred by him in connection therewith. 15 (d) DETERMINATION OF CONDUCT. Any indemnification under subsections (a) and (b) of this Section 7.17, unless ordered by a court, shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the Manager, officer, employee or agent acted proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b) of this Section 7.17. Such determination shall be made (i) by the Members by a vote of a Required Interest; (ii) by majority vote of a committee duly designated by the Members, in which Members who are parties may participate, consisting solely of two or more Members not at the time parties to the proceeding; or (iii) by independent legal counsel selected by the Members prescribed in (i) or (ii) immediately above. (e) ADVANCE PAYMENT OF EXPENSES. Expenses, including attorneys' fees, incurred in defending any action, suit, or proceeding referred to in subsections (a) and (b) of this Section 7.17, may be paid by the Company as they are incurred, in advance of the final disposition of such action, suit, or proceeding as authorized by the Managers in the specific case upon receipt of an undertaking by or on behalf of the Manager, officer, employee or agent to repay such amount, if it shall ultimately be determined that he is not entitled to be indemnified by the Company as authorized in this Section 7.17. (f) NONEXCLUSIVITY. The indemnification provided by this Section 7.17 shall not be deemed exclusive of, and shall be in addition to, any other rights to which those seeking indemnification may be entitled under the this Agreement or any agreement, vote of members or disinterested Managers, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office and shall continue as to a person who has ceased to be a Manager or officer and shall inure to the benefit of the heirs, executors, and administrators of such a person. (g) LIABILITY INSURANCE. The Company may purchase and maintain insurance or furnish similar protection on behalf of or for any person who is or was a Manager or officer of the Company, or is or was serving at the request of the Company as a Manager, director, trustee, officer, partner, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under the provisions of this Section 7.17. (h) NO OBLIGATION OF REPAYMENT. The authority of the Company to indemnify persons pursuant to subsections (a) and (b) of this Section 7.17 does not limit the payment of expenses as they are incurred, indemnification, insurance, or other protection that may be provided pursuant to this Section 7.17. Subsections (a) and (b) of this Section 7.17 do not create any obligation to repay or return payments made by the Company pursuant to this Section 7.17. ARTICLE VIII MEETINGS OF MEMBERS Section 8.1 MEETINGS OF MEMBERS. 16 (a) ANNUAL MEETINGS. The annual meeting of Members shall be held at such time and on such date during the first quarter thereof (January through March) each year as may be fixed by the Managers of the Company and stated in the notice of the meeting, for the election of Managers, the consideration of reports to be laid before such meeting and the transaction of such other business as may properly come before the meeting. (b) SPECIAL MEETINGS. Special meetings of the Members shall be called upon the written request of a majority of the Managers, acting either with or without a meeting, or of the Members holding Membership Interests entitling them to exercise fifty percent (50%) of the voting power of the Company entitled to vote thereat. Calls for such meetings shall specify the purposes thereof. No business other than that specified in the call shall be considered at any special meeting. (c) NOTICES OF MEETINGS. Unless waived, written notice of each annual or special meeting stating the time, place, and the purposes thereof shall be given by personal delivery or by mail to each Member of record entitled to vote at or entitled to notice of the meeting, not more than sixty (60) days nor less than seven (7) days before any such meeting. If mailed, such notice shall be directed to the Member at his address as the same appears upon the records of the Company. any Member, either before or after any meeting, may waive any notice required to be given by law or under this Agreement. (d) PLACE OF MEETINGS. Meetings of Members shall be held at the principal office of the company unless the Managers determine that a meeting shall be held at some other place within or without the State of Ohio and causes the notice thereof to so state. (e) QUORUM. The holders of Membership Interests in the Company entitling them to exercise a majority of the voting power of the Company entitled to vote at any meeting, present in person or by proxy, shall constitute a quorum for the transaction of business to be considered at such meeting; provided, however, that no action required by law or by the Articles of Organization or this Agreement to be authorized or taken by the holders of a designated proportion of the Membership Interests of any particular class or of each class may be authorized or taken by a lesser proportion. The holders of a majority of the voting Membership Interests represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time, until a quorum shall be present. (f) RECORD DATE. The Managers may fix a record date for any lawful purpose, including without limiting the generality of the foregoing, the determination of Members entitled to (i) receive notice of or to vote at any meeting, (ii) receive payment of any distribution, (iii) receive or exercise rights of purchases of or subscription for, or exchange or conversion of, certificates or other securities, subject to any contract right with respect thereto, or (iv) participate in the execution of written consents, waivers or releases. Said record date shall not be more than sixty (60) days preceding the date of such meeting, the date fixed for the payment of any distribution or the date fixed for the receipt or the exercise of rights, as the case may be. If a record date shall not be fixed, the record date for the determination of Members who are entitled to notice of, or who are entitled to vote at, a meeting of Members, shall be the close of business on the date next preceding the day on which notice is given, or the close of business on the date next preceding the day on which the meeting is held, as the case may be. 17 (g) PROXIES. A person who is entitled to attend a Members' meeting, to vote thereat, or to execute consents, waivers or releases, may be represented at such meeting or vote thereat, and execute consents, waivers and releases, and exercise any of his other rights, by proxy or proxies appointed by a writing signed by such person. ARTICLE IX DISSOLUTION, LIQUIDATION AND TERMINATION OF THE COMPANY Section 9.1 DISSOLUTION. The Company shall be dissolved and its affairs wound up on the first to occur of the following: (a) the written consent of a Required Interest; (b) the expiration of the term specified in Section 3.3 of this Agreement; (c) any Member shall die, retire, resign, be expelled, become a Bankrupt Member or dissolve, or there shall occur any other event that terminates the continued membership in the Company of any Member; provided, however, that if any event described in this Section 9.1(c) shall occur and there shall be at least one Member remaining, the Company shall not be dissolved and its affairs wound up, and the business of the Company shall be continued if all remaining Members so agree in writing; and (d) an entry of a decree of judicial dissolution of the Company under 1705.47 of the Act. Section 9.2 LIQUIDATION AND TERMINATION. On dissolution of the Company, the Managers shall act as liquidator. The liquidator shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Act. The costs of liquidation shall be borne as a Company expense. Until final distribution, the liquidator shall continue to operate the Company properties with all of the power an authority of the Managers. A reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the discharge of liabilities to creditors so as to enable the liquidator to minimize any losses resulting from liquidation. The liquidator, as promptly as possible after dissolution and again after final liquidation, shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company's assets, liabilities, and operations the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable, and shall apply the proceeds of liquidation as set forth in the remaining sections of this Article IX. Section 9.3 PAYMENT OF DEBTS. The assets shall first be applied to the payment of the liabilities of the company (other than any loans or advances that may have been made by Members to the Company) and the expenses of liquidation. Section 9.4 DEBTS TO MEMBERS. The remaining assets shall next be applied to the repayment of any loans made by any Member to the Company. 18 Section 9.5 REMAINING DISTRIBUTION. The remaining assets shall then be distributed to the Members in accordance with the Members' positive capital account balances, after making the adjustments for allocations under Article VI hereof. Section 9.6 RESERVE. Notwithstanding the provisions of Sections 9.4 and 9.5, the liquidator may retain such amount as it deems necessary as a reserve for any contingent liabilities or obligations of the Company, which reserve, after the passage of a reasonable period of time, shall be distributed pursuant to the provisions of this Article IX. Section 9.7 FINAL ACCOUNTING. Each of the Members shall be furnished with a statement prepared by the Company's certified public accountants, which shall set forth the assets and liabilities of the Company as of the date of the complete liquidation. Upon the compliance by the liquidator with the foregoing distribution plan, the liquidator shall execute and cause to be filed a Certificate of Cancellation and any and all other documents necessary with respect to termination and cancellation of the company under the Act. ARTICLE X AMENDMENTS Section 10.1 AUTHORITY TO AMEND. (a) This Agreement may be amended by the Managers without the approval of the Members if such amendment is solely for the purpose of clarification and does not change the substance hereof. (b) This Agreement may be amended by the Managers without the approval of the Members if such amendment is solely for the purpose of admitting Additional Members or Substitute Members in accordance with the terms of Section 4.2 and 5.3 of this Agreement. (c) This Agreement may further be amended by the Managers without approval of the Members if such amendment is, in the opinion of counsel for the Company, necessary or appropriate to satisfy requirements of the Code or of any federal or state securities laws or regulations. Any amendment made pursuant to this Subsection 10.1(c) may be made effective as of the date of this Agreement. (d) Notwithstanding any contrary provision of this Agreement, any amendment to this Agreement or other act which would (i) adversely affect the federal income tax treatment to be afforded the Members, (ii) adversely affect the liabilities of the Members, (iii) change the method of allocation of profit and loss as provided in Article VI or the distribution provisions of Articles VI and IX hereof, or (iv) seek to impose personal liability on the Members, shall require the approval of a Required Interest. (e) Except as otherwise specifically provided in this Section 10.1, amendments to this Agreement shall require the approval of a Required Interest. Section 10.2 NOTICE OF AMENDMENTS. A copy of any amendment to be approved by the Members pursuant to Subsections 10.1(d) or 10.1(e) shall be mailed no more than thirty (30) and no fewer than five (5) days in advance to the Members. The Members shall 19 be notified as to the substance of any amendment pursuant to Subsections 10.1(a), (b) or (c), and upon request shall be furnished a copy thereof. ARTICLE XI POWER OF ATTORNEY Section 11.1 POWER. Each Member irrevocably constitutes and appoints the Secretary of the Company as its true and lawful attorney in its name, place and stead to make, execute, swear to, acknowledge, deliver and file: (a) Any certificates or other instruments which may be required to be filed by the Company under the laws of the State of Ohio or of any other state or jurisdiction in which the Managers shall deem advisable; (b) Any documents, certificates or other instruments, including but not limited to, any and all amendments and modifications of this Agreement or of the instruments described in Subsection 11.1(a) which may be required or deemed desirable by the Managers to effectuate the provisions of any part of this Agreement, and, by way of extension and not in limitation, to do all such other things as shall be necessary to continue and to carry on the business of the Company; and (c) All documents, certificates or other instruments which may be required to effectuate the dissolution and termination of the Company, to the extent such dissolution and termination is authorized hereby. The power of attorney granted hereby shall not constitute a waiver of, or be used to avoid, the rights of the Members to approve certain amendments to this Agreement pursuant to Subsections 10.1 (d) and 10.1(e) or be used in any other manner inconsistent with the status of the Company as a limited liability Company or inconsistent with the provisions of this Agreement. Section 11.2 SURVIVAL OF POWER. It is expressly intended by each Member that the foregoing power of attorney is coupled with an interest, is irrevocable and shall survive the death, dissolution or other termination of such Member. The foregoing power of attorney shall survive the delivery of an assignment by a Member of its entire Membership Interest in the Company, except that where an assignee of such entire Membership Interest has become a Substitute Member, then the foregoing power of attorney of the assignor Member shall survive the delivery of such assignment for the sole purpose of enabling the Members to execute, acknowledge and file any and all instruments necessary to effectuate such substitution. ARTICLE XII INVESTMENT REPRESENTATION Section 12.1 REPRESENTATION. Each Member hereby warrants and represents that it is acquiring its Membership Interest in the Company solely for investment purposes and 20 not with a view toward the distribution or resale thereof and acknowledges that its purchase of its Membership Interest in the Company is expressly subject to the conditions and limitations on transferability set forth in this Agreement. ARTICLE XIII MISCELLANEOUS Section 13.1 METHOD OF GIVING CONSENT. Any consent required by this Agreement may be given by a written consent given by the consenting Member and received by the Member soliciting such consent at or prior to the doing of the act or thing for which the consent is solicited, provided that such consent shall not have been nullified by subsequent notice. Section 13.2 GOVERNING LAW. The Company and this Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. Section 13.3 AGREEMENT FOR FURTHER ACTION. At any time or times upon the request of the Managers, each Member agrees to sign and swear to any certificate, any amendment to or cancellation of such certificate, acknowledge similar certificates or affidavits or certificates of fictitious firm name or the like (and any amendments or cancellations thereof) required by the laws of the state of Ohio, or any other jurisdiction in which the company does, or proposes to do, business. This Section 13.3 shall not prejudice or affect the rights of the Members to approve certain amendments to this Agreement pursuant to Subsections 10.1(d) and 10.1(e). Section 13.4 ENTIRE AGREEMENT. This Agreement and the Articles contain the entire understanding among the parties and supersedes any prior understandings or agreements between them respecting the within subject matter. There are no representations, agreements, arrangements or understandings, oral or written, between or among the parties hereto relating to the subject matter of this Agreement and the Articles which are not fully expressed herein and therein. Section 13.5 SEVERABILITY. This Agreement are intended to be performed in accordance with, and only to the extent permitted by, all applicable laws, ordinances, rules and regulations of the jurisdictions in which the Company does business. If any provision of this Agreement, or the application thereof to any person or circumstance, shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but rather shall be enforced to the greatest extent permitted by law. Section 13.6 NOTICES. Notices to Members or to the Company shall be deemed to have been given when personally delivered or mailed, by prepaid registered or certified mail, addressed as set forth in this Agreement, unless a notice of change of address has previously been given in writing by the addressee to the addressor, in which case such notice shall be addressed to the address set forth in such notice of change of address. 21 Section 13.7 TITLES AND CAPTIONS. All titles and captions are for convenience only, do not form a substantive part of this Agreement, and shall not restrict or enlarge any substantive provisions of this Agreement. Section 13.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts, each one of which shall constitute an original executed copy of this Agreement. Section 13.9 PRONOUNS. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons may require. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 22 IN WITNESS WHEREOF, the parties have hereunto set their hands as of the day and year first above written. MEMBERS: COOPERATIVE RESOURCE SERVICES, LTD. By: /s/ Eugene A. Novak ----------------------------- Its: CFO ----------------------------- THE 24KT TRUST By: /s/ Steven Gold, Trustee ----------------------------- Its: ----------------------------- 23 EXHIBIT A
AGREED VALUE NAME AND NOTICE OF CONTRIBUTED TOTAL CAPITAL MEMBERSHIP ADDRESS PROPERTY CONTRIBUTION INTEREST Cooperative Resource $ $ 99% Services, Ltd. 6070 Parkland Boulevard Mayfield Heights, OH 44124 The 24KT Trust $ $ 1% c/o Cooperative Resource Services, Ltd. 6070 Parkland Boulevard Mayfield Heights, OH 44124
24 EXHIBIT B For purposes of interpreting and implementing Article VI of the Operating Agreement (the "Agreement") of the Company, the following rules shall apply and shall be treated as part of the terms of the Agreement: A. Special Allocation Provisions. 1. For purposes of determining the amount of gain or loss to be allocated pursuant to Article V of the Agreement, any basis adjustments permitted pursuant to Section 743 of the Code shall be disregarded. 2. Income, loss, deductions and credits shall be allocated to the Members in accordance with the portion of the year during which the Members have held their respective interests except that special allocations may be permitted if approved by a Required Interest. All items of income, loss and deduction shall be considered to have been earned ratably over the period of the fiscal year of the Company, except that gains and losses arising from the disposition of assets shall be taken into account as of the date thereof. 3. Notwithstanding any other provision of the Agreement, to the extent required by law, income, gain, loss and deduction attributable to property contributed to the Company by a Member shall be shared among the Members so as to take into account any variation between the basis of the property and the fair market value of the property at the time of contribution in accordance with the requirements of Section 704 (c) of the Code and the applicable regulations thereunder as more fully described in Part B hereof. 4. Notwithstanding any other provision of the Agreement, in the event the Company is entitled to a deduction for interest imputed under any provision of the Code on any loan or advance from a Member (whether such interest is currently deducted, capitalized or amortized), such deduction shall be allocated solely to such Member. 5. Notwithstanding any provision of the Agreement to the contrary, to the extent any payments in the nature of fees made to a Member are finally determined by the IRS to be distributions to a Member for federal income tax purposes, there will be a gross income allocation to such Member in the amount of such distribution. 6. (a) Notwithstanding any provision of the Agreement to the contrary and subject to the exceptions set forth in Section 1.704-2 (f) (2)-(5) of the Treasury Regulations, if there is a net decrease in Company Minimum Gain during any Company fiscal year, each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain determined in accordance with Section 1.704-2(g)(2) of the Treasury Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(f) of the Treasury Regulations. This paragraph 6 (a) is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith. To the extent permitted by such Section of the Regulations and for purposes of this paragraph 6(a) only, each 25 Member's Adjusted Capital Account Balance shall be determined prior to any other allocations pursuant to Article V of the Agreement with respect to such fiscal year and without regard to any net decrease in Member Minimum Gain during such fiscal year. (b) Notwithstanding any provision of the Agreement to the contrary, except paragraph 6(a) of this Exhibit and subject to the exceptions set forth in Section 1.704-2(i)(4) of the Treasury Regulations, if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Company fiscal year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(3) of the Treasury Regulations, shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt Minimum Gain, determined in accordance with Section 1.704-2(i)(5) of the Treasury Regulations. Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(i)(4) of the Regulations. This paragraph 6(b) is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith. Solely for purposes of this paragraph 6(b), each Member's Adjusted Capital Account Balance shall be determined prior to any other allocations pursuant to Article V of the Agreement with respect to such fiscal year, other than allocations pursuant to paragraph 6(a) hereof. 7. Notwithstanding any provision of the Agreement to the contrary, in the event any Members unexpectedly receive any adjustments, allocations or distributions described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain shall be specially allocated to such Members in an amount and manner sufficient to eliminate the deficits in their Adjusted Capital Account Balances created by such adjustments, allocations or distributions as quickly as possible. 8. No loss shall be allocated to any Member to the extent that such allocation would result in a deficit in its Adjusted Capital Account Balance while any other Member continues to have a positive Adjusted Capital Account Balance; in such event losses shall first be allocated to any Members with positive Adjusted Capital Account Balances, and in proportion to such balances, to the extent necessary to reduce their positive Adjusted Capital Account Balances to zero. 9. Any special allocations of items pursuant to this Part A shall be taken into account in computing subsequent allocations so that the net amount of any items so allocated and the profits, losses and all other items allocated to each such Member pursuant to Article V of the Agreement shall, to the extent possible, be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of Article V of the Agreement if such special allocations had not occurred. 10. Notwithstanding any provision of the Agreement to the contrary, Nonrecourse Deductions for any fiscal year or, other period shall be specially allocated to the Members in accordance with the percentages set forth in Section 5.1(a). 26 11. Notwithstanding any provision of the Agreement to the contrary, any Member Nonrecourse Deduction for any fiscal year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Section 1.704-2(i) of the Treasury Regulations. B. Capital Account Adjustments and 704 (c) Tax Allocations. 1. For purposes of computing the amount of any item of income, gain deduction or loss to be reflected in the Member's capital accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes; provided, however, that: (a) Any deductions for depreciation, cost recovery or amortization (other than depletion under Section 611 of the Code) attributable to a Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Company was equal to the Agreed Value of such property. Upon an adjustment to the Carrying Value of any Company property subject to depletion under Section 611 of the Code, and further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined as if the adjusted basis of such property was equal to the Carrying Value of such property immediately following such adjustment. (b) Any income, gain or loss attributable to the taxable disposition of any property (including any property subject to depletion under Section 611 of the Code) shall be determined by the Company as if the adjusted basis of such property as of such date of disposition was equal in amount to the Company's Carrying Value with respect to such property as of such a date. (c) If the Company's adjusted basis in a depreciable or cost recovery property is reduced for federal income tax purposes pursuant to Section 48(q)(1) of the Code, the amount of such reduction shall, solely for purposes hereof, be deemed to be an additional depreciation or cost recovery deduction in the year such property is placed in service and shall be allocated among the Members pursuant to Article V of the Agreement. Any restoration of such basis pursuant to Section 48 (q) (2) of the Code shall be allocated in the same manner to the Members to whom such deemed deduction was allocated. (d) The computation of all items of income, gain, loss and deduction shall be made by the Company and, as to those items described in Section 705 (a) (1) (B) or Section 705 (a) (2) (B) of the Code, without regard to the fact that such items are not includable in gross income or are neither currently deductible nor capitalizable for federal income tax purposes. 2. A transferee of a Membership Interest will succeed to the capital account relating to the Membership Interest transferred; provided, however, that if the transfer causes a termination of the Company under Section 708 (b) (1) (B) of the Code, the Company properties shall be deemed to have been distributed in liquidation of the Company to the Members (including the transferee of a Membership Interest) and re-contributed by such Members and transferees in reconstitution of the Company. The capital accounts of such reconstituted Company shall be maintained in accordance with the principles set forth herein. 27 3. Upon an issuance of additional Membership Interests for cash or Contributed Property, the capital accounts of all Members (and the Carrying Values of all Company properties) shall, immediately prior to such issuance, be adjusted (consistent with the provisions hereof) upward or downward to reflect any unrealized gain or unrealized loss attributable to each Company property (as if such unrealized gain or unrealized loss had been recognized upon an actual sale of such property at the fair market value thereof, immediately prior to such issuance, and had been allocated to the Members, at such time, pursuant to Article V of the Agreement). In determining such unrealized gain or unrealized loss attributable to the properties, the fair market value of Company properties shall be determined by the Managers using such reasonable methods of valuation as it may adopt. 4. Immediately prior to the distribution of any Company property in liquidation of the Company, the capital accounts of all Members. (and the Carrying Values of all Company properties) shall be adjusted (consistent with the provisions hereof and Section 704 of the Code) upward or downward to reflect any unrealized gain or unrealized loss attributable to each Company property (as if such unrealized gain or unrealized loss had been recognized upon an actual sale of each such Property, immediately prior to such distribution, and had been allocated to the Members, at such time, pursuant to Article V of the Agreement). In determining such unrealized gain or unrealized loss attributable to the properties, the fair market value of Company properties shall be determined by the Manager using such reasonable methods of valuation as it may adopt. 5. In accordance with Section 704(c) and the regulations thereunder, income, gain, loss and deduction with respect to any Contributed Property shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Agreed Value. 6. In the event the Agreed Value of any Company asset is adjusted as described in paragraph 3 or 4 above, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Agreed Value in the same manner as under Section 704(c) of the Code and the regulations thereunder. 7. Any elections or other decisions relating to such allocations shall be made by the Managers in any manner that reasonably reflects the purpose and intention of the Agreement. C. Definitions. For the purposes of this Exhibit, the following terms shall have the meanings indicated unless the context clearly indicates otherwise: "Adjusted Capital Account Balance": means the balance in the capital account of a Member as of the end of the relevant fiscal year of the Company, after giving effect to the following: (a) credit to such capital account any amounts the Member is obligated to restore, pursuant to the terms of the Agreement or otherwise, or is deemed obligated to restore pursuant to the penultimate sentences of Section 1.704-2(g)(1) and 1.704-2(i)(5) of the Treasury Regulations, and (b) debit to such capital account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations. 28 "Agreed Value": means the fair market value of Contributed Properties as agreed to by the contributing Member and the Company, using such reasonable method of valuation as they may adopt. "Carrying Value": means (a) with respect to Contributed Property, the Agreed Value of such property reduced (but not below zero) by all amortization, depreciation and cost recovery deductions charged to the Members' capital accounts with respect to such property, as well as any other charges for sales, retirements and other dispositions of assets included in a Contributed Property, as of the time of determination, and (b) with respect to any other property, the adjusted basis of such property for federal income tax purposes as of the time of determination. The Carrying Value of any property shall be adjusted in accordance with the principles set forth herein. "Contributed Property": means each Member's interest in property or other consideration (excluding services and cash) contributed to the Company by such Member. "Nonrecourse Deductions": shall have the meaning set forth in Section 1.704-2(b)(1) of the Treasury Regulations. The amount of Nonrecourse Deductions for a Company fiscal year equals the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain during that fiscal year over the aggregate amount of any distributions during that fiscal year of proceeds of a Nonrecourse Liability that are allocable to an increase, in Company Minimum Gain, determined according to the provisions of Section 1.704-2(c) of the Treasury Regulations. "Nonrecourse Liability": shall have the meaning set forth in Section 1.704-2(b)(3) of the Treasury Regulations. "Member Nonrecourse Debt Minimum Gain": means an amount, with respect to each Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i) of the Treasury Regulations. "Member Nonrecourse Debt": shall have the meaning set forth in Section 1.704-2(b)(4) of the Treasury Regulations. "Member Nonrecourse Deductions": shall have the meaning set forth in Section 1.704-(i) (2) of the Treasury Regulations. The amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Company fiscal year equals the excess, if any, of the net increase, if any, in the amount of Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt during the fiscal year over the aggregate amount of any distributions during the fiscal year to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.702-2(i)(2) of the Treasury Regulations. "Company Minimum Gain": shall have the meaning set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury Regulations. 29 For purposes of this Exhibit, all other capitalized terms will have the same definition as in the Agreement. 30 EX-3.55 19 a2079698zex-3_55.txt EXHIBIT 3.55 EXHIBIT 3.55 [SEAL] CERTIFICATE OF INCORPORATION OF U.S. RELOCATION SERVICES, INC. The undersigned natural person, having capacity to contract and acting as the incorporator of a corporation pursuant to Section 101 of the General Corporation Law of the State of Delaware ("General Corporation Law") adopts the following certificate of incorporation for such corporation: 1. The name of the corporation is U.S. Relocation Services, Inc. 2. The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 3. The number of shares of stock that the corporation is authorized to issue is One Hundred Thousand (100,000) shares having a par value of One ($1.00) Dollar per share, which are herewith classified as follows and may be issued in the following manner: The corporation is authorized to issue Ten Thousand (10,000) shares of common stock having unlimited voting rights. The corporation is authorized to issue Ninety Thousand (90,000) shares of preferred stock. The board of directors of the corporation shall be entitled to issue preferred stock in such classes and series as it may from time to time determine by resolution, and shall designate from time to time by resolution, prior to the issuance of shares in any such class or series, the number of shares of preferred stock to be included within such class or series and the powers, designations, preferences, privileges, limitations and relative rights of all shares to be issued as a part of such class or series. The powers, designations, preferences, privileges, limitations and relative rights of each share within a particular class or series of preferred stock shall be identical with those of all other shares of the same class or series. Prior to issuing preferred stock of a particular class or series, the corporation shall deliver to the Secretary of State of Delaware a Certificate of Designations setting forth the number of shares within the particular class or series to be issued, which Certificate shall contain such designations and shall otherwise be in such form and in compliance with such procedures as may from time to time be required pursuant to the General Corporation Law of Delaware (specifically, sections 151(g) and 103 thereof, as amended). 4. The street address and zip code of the corporation's initial registered office, the county in which the office is located and the name of its initial registered agent at that office are as follows: The Corporation Trust Company 1209 Orange Street County of New Castle Wilmington, Delaware 19801 5. The name and mailing address of the sole incorporator is as follows: John A. Good 6075 Poplar Avenue Suite 623 Memphis, Tennessee 38119 6. The powers of the incorporator shall terminate upon the filing of this certificate of incorporation, and at such time management of the corporation shall be vested in the initial board of directors of the corporation, each of whom will serve until the first annual meeting of the shareholders of the corporation or until his successor is duly elected and qualified. The name, address and zip code of each initial director of the corporation is as follows: Kenneth L. Rich 1801 California, Suite 2740 Denver, Colorado 80202 Mickey A. Williams 2204 Castle Rock Road Arlington, Texas 76006 William F. Harrison 785 Crossover Lane Suite 219 Memphis, Tennessee 38117 7. The street address and zip code of the principal office of the corporation is 1801 California, Suite 2740, Denver, Colorado 80202. 8. The corporation is for profit. 2 9. No director shall be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director; provided, however, that this provision shall not eliminate or limit the liability of a director (A) for any breach of the director's duty of loyalty to the corporation or its shareholders; (B) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of the law; (C) under Section 174 of the General Corporation Law of Delaware; or (D) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of the foregoing provisions of this Article 9 by the shareholders of the corporation shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification. 10. Any director may be removed for cause by a vote of a majority of the entire board of directors, cause being hereby defined as final conviction of a felony, declaration of incompetency or unsound mind by a court of competent jurisdiction, adjudication of bankruptcy, non-acceptance of office or conduct prejudicial to the interest of the corporation. 11. The by-laws of the corporation may be amended only by the affirmative vote of a majority of both common stock and preferred stock entitled to vote at a properly called annual or special meeting of the shareholders. Dated: August 30, 1991. /s/ John A. Good ---------------------------- Incorporator 3 EX-3.56 20 a2079698zex-3_56.txt EXHIBIT 3.56 EXHIBIT 3.56 U.S. RELOCATION SERVICES, INC. * * * * * B Y - L A W S * * * * * ARTICLE I OFFICES Section 1. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. All meetings of the stockholders for the election of directors shall be held in the City of Denver, State of Colorado, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders, commencing with the year 1992, shall be held on the 15th day of May if not a legal holiday, and if a legal holiday, then on the next secular day following, at 10:00 A. M., or at such other date and time as shall be designated from time to time by the board of directors and stated in the notice of the meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting. Section 3. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place 2 where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder entitled to vote at such meeting. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all 3 meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 10. Unless otherwise provided in the certificate of incorporation each stockholder shall at every 4 meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period. Section 11. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III DIRECTORS Section 1. The number of directors which shall constitute the whole board shall be not less than three (3) nor more than seven (7). The first board shall consist of three (3) 5 directors. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders. Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If, at the time of filling any vacancy or any newly created directorship, the directors then in office shall constitute less than a majority of the whole board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. 6 Section 3. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders. MEETING OF THE BOARD OF DIRECTORS Section 4. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 5. The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors. 7 Section 6. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board. Section 7. Special meetings of the board may be called by the president on two (2) days' notice to each director, either personally or by mail or by telegram; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director: in which case special meetings shall be called by the president or secretary in like manner and on like notice on the written request of the sole director. Section 8. At all meetings of the board a majority of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 9. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all 8 members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. Section 10. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. COMMITTEES OF DIRECTORS Section 11. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they 9 constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of incorporation, (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the board of directors as provided in Section 151(a) fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation) adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation; and, unless the resolution or the certificate of incorporation 10 expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock or to adopt a certificate of ownership and merger. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Section 12. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. COMPENSATION OF DIRECTORS Section 13. Unless otherwise restricted by the certificate of incorporation or these by-laws, the board of directors shall have the authority to fix the compensation of directors. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. REMOVAL OF DIRECTORS Section 14. Unless otherwise restricted by the certificate of incorporation or by law, any director or the 11 entire board of directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors. ARTICLE IV NOTICES Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. 12 ARTICLE V OFFICERS Section 1. The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer. The board of directors may also choose additional vice-presidents, and one or more assistant secretaries and assistant treasurers. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide. Section 2. The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer. Section 3. The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board. Section 4. The salaries of all officers and agents of the corporation shall be fixed by the board of directors. Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors. 13 THE PRESIDENT Section 6. The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect. Section 7. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. THE VICE-PRESIDENTS Section 8. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. 14 THE SECRETARY AND ASSISTANT SECRETARY Section 9. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. Section 10. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. 15 THE TREASURER AND ASSISTANT TREASURERS Section 11. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. Section 12. He shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper voucher for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation. Section 13. If required by the board of directors, he shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. 16 Section 14. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. ARTICLE VI CERTIFICATES FOR SHARES Section 1. The shares of the corporation shall be represented by a certificate or shall be uncertificated. Certificates shall be signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) or a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences 17 and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 2. Any of or all the signatures on a certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. LOST CERTIFICATES Section 3. The board of directors may direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates or uncertificated shares, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal 18 representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. TRANSFER OF STOCK Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Upon receipt of proper transfer instructions from the registered owner of uncertificated shares such uncertificated shares shall be cancelled and issuance of new equivalent uncertificated shares or certificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the corporation. FIXING RECORD DATE Section 5. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to 19 receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting: provided, however, that the board of directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. 20 ARTICLE VII GENERAL PROVISIONS DIVIDENDS Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. ANNUAL STATEMENT Section 3. The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation. 21 CHECKS Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. FISCAL YEAR Section 5. The fiscal year of the corporation shall be fixed by resolution of the board of directors. SEAL Section 6. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. INDEMNIFICATION Section 7. The corporation shall indemnify its officers, directors, employees and agents to the extent permitted by the General Corporation Law of Delaware. 22 ARTICLE VIII AMENDMENTS Section 1. These by-laws may be altered, amended or repealed or new by-laws may be adopted by the stockholders or by the board of directors, when such power is conferred upon the board of directors by the certificate of incorporation at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal by-laws is conferred upon the board of directors by the certificate of incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal by-laws. /s/ William F. Harrison --------------------------------- William F. Harrison /s/ Kenneth L. Rich --------------------------------- Kenneth L. Rich /s/ Mickey A. Williams --------------------------------- Mickey A. Williams /s/ Susan E. Haskell --------------------------------- Susan E. Haskell 23 EX-3.57 21 a2079698zex-3_57.txt EXHIBIT 3.57 EXHIBIT 3.57 ARTICLES OF INCORPORATION OF CORPORATE TRANSFER SERVICE, INC. For the purpose of forming a corporation pursuant to the provisions of Chapter 302A, Minnesota Statutes, and laws amendatory thereof and supplementary thereto, the following Articles of Incorporation are adopted: ARTICLE I. The name of this corporation is CORPORATE TRANSFER SERVICE, INC. ARTICLE II. Its purposes are: (a) provide local and national relocation services to corporations, (b) to own, sell, manage alone, or in association or partnership with others, land, buildings or land and building, (c) To buy and sell land, whether occupied or unoccupied, and to develop said land individually or in association with others, (d) To buy, sell, convey, lease, pledge, mortgage, exchange, assign or otherwise acquire, hold and dispose of, handle and otherwise deal in and with real and personal property of any interest therein of whatever name, nature or description, and wherever the same may be situated, either within or without the State of Minnesota, and to exercise unlimitedly all rights and powers incident to the acquisition, holding or disposition of such interest, (e) To lend money, credit or property to, guarantee or assume interests in, the contracts or obligations of, and otherwise aid or assist in any other manner, other corporations, associations and persons, (f) To do all things necessary or desirable to protect, enhance or directly or indirectly promote the value of any interest owned by the corporation or in which it may have any beneficial interest or rights, to borrow money, credit or property, to make contracts, to incur obligations and to secure the same by mortgage or pledge of all or part of its assets or franchises, to act for others in any capacity or manner, (g) To participate with others and to consolidate or merge with other concerns in any business, enterprise or transaction which the company is authorized to engage in, in any manner and on any terms, (h) To do any and all further acts consistent with the purposes hereinbefore set forth, as now or hereafter authorized by law for a corporation, it being the intention that the enumeration of specific powers shall not operate to limit in any manner the general powers conferred upon corporations by the laws of the State of Minnesota, (i) To do everything necessary, proper, advisable or convenient for the accomplishment of the purposes hereinabove set forth, and to do all other things incidental thereto or connected therewith, which are not forbidden by the laws under which this corporation is organized, by other laws, or by these Articles of Incorporation, (j) To carry out the purposes hereinabove set forth in any state, territory, district or possession of the United States, or in any foreign country to the extent that such purposes are not forbidden by the laws thereof and in the case of any state territory, district or possession of the United States, or any foreign country, in which one or more of such purposes are forbidden by law, and to limit any certificate for application to do business to the purpose or purposes as are not forbidden by law, (k) The corporation shall have all powers granted to private corporations organized for profit by said Minnesota Business Corporation Act, these powers being in furtherance, and not in limitation, of the powers set forth herein. ARTICLE III. The duration of this corporation shall be perpetual. ARTICLE IV. The location and post office address of its registered office in this State is 1421 East Wayzata Boulevard, Wayzata, Minnesota 55391. ARTICLE V. The amount of stated capital with which this corporation shall begin business is $1,000.00. ARTICLE VI. The total authorized number of shares which the corporation shall have authority to issue is 25,000 common shares, each having a par value of $1.00. Said shares shall be issued in such manner and at such times and in such amounts and for such consideration as may be fixed and determined by the shareholders as set forth in Article XI. ARTICLE VII. The name and post office address of the undersigned incorporator: NAME ADDRESS LOUIS B. OBERHAUSER 2425 Dunwoody Lane Wayzata, MN 55391 ARTICLE VIII. The name and post office address of the first Board of Directors is: NAME ADDRESS ROGER FAZENDIN 18700 11th Avenue North Plymouth, MN 55447 DANIEL FAZENDIN 18555 11th Avenue North Plymouth, MN 55447 RAYMOND D. QUIST 18820 8th Avenue North Plymouth, MN 55447 Said Directors shall continue to serve in office until the first Annual Meeting of Shareholders or until their successor is duly elected and has qualified. "ARTICLE IX." The Board of Directors shall have no rights to amend, make or rescind any and all of the By-Laws of this corporation without the written consent to said action of the holders of more than 75% of the authorized, issued, and outstanding shares of the common voting stock of this corporation. "ARTICLE X." Amendment to the Articles of Incorporation and agreement of consolidation or merger shall require the affirmative vote of more than 75% of the authorized, issued, and outstanding shares of the common voting stock of this corporation. The affirmation vote of more than 75% of the authorized, issued and outstanding stock shall be required to authorize the Board of Directors to sell, lease, exchange or otherwise dispose of all or substantially all of the assets of this corporation including its good will. "ARTICLE XI." That any of the following actions shall require the written and signed consent of the holders of more than 75% of the authorized, issued and outstanding shares of common voting stock of the corporation entitled to vote for the election of the Board of Directors. a) The issuance of any shares of common voting shares of the corporation from its unissued or treasury stocks. b) Establishment of additional classes of stock c) Changes in officers compensation d) Payment of dividends or bonuses e) Hiring new employees or increasing employee benefits f) Borrowing money on behalf of the corporation or incurring any installment or lease obligation in excess of six months. IN WITNESS WHEREOF, the above named incorporator, LOUIS B. OBERHAUSER signed these ARTICLES OF INCORPORATION, this 7th day of December, 1982. INCORPORATOR: /s/ Louis B. Oberhauser ------------------------------------ LOUIS B. OBERHAUSER: EX-3.58 22 a2079698zex-3_58.txt EXHIBIT 3.58 EXHIBIT 3.58 CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF CORPORATE TRANSFER SERVICE, INC. WE, THE UNDERSIGNED, RAYMOND D. QUIST and LOUIS B. OBERHAUSER, respectively the President and Secretary of Corporate Transfer Service, Inc. a Minnesota corporation, subject to the provisions of Chapter 302A of the Minnesota Statutes, known as the Minnesota Business Corporation Act, do hereby certify that at a special meeting of the shareholders on July 2nd, 1987, the shareholders holding the majority of the issued and outstanding voting stock of Corporate Transfer Service, Inc. agreed to and adopted the Resolution attached hereto as Exhibit "A" effective July 2, 1987. IN WITNESS WHEREOF, we have subscribed our names this 2nd day of July, 1987. /s/ Raymond D. Quist ------------------------------------ RAYMOND D. QUIST, President /s/ Louis B. Oberhauser ------------------------------------ LOUIS B. OBERHAUSER, Secretary EXHIBIT "A" Upon motion duly made, seconded, and carried, it was RESOLVED, that the Articles of Incorporation of Corporate Transfer Service, Inc. be amended by adding Article XII which will read as follows: ARTICLE XII. Indemnification Each director, officer, employee or agent, past and present, of the Corporation and each person who serves or may have served at the request of the Corporation as a director, officer, employee or agent of another Corporation or an employee benefit plan, and their respective heirs, administrators and executors, shall be indemnified by the Corporation in accordance with, and to the fullest extent permissable under the provisions of Chapter 302A of the Minnesota Statutes, as it may from time to time be amended. [SEAL] EX-3.59 23 a2079698zex-3_59.txt EXHIBIT 3.59 EXHIBIT 3.59 CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF CORPORATE TRANSFER SERVICE, INC. WE, THE UNDERSIGNED, RAYMOND D. QUIST and LOUIS B. OBERHAUSER, respectively the President and Secretary of Corporate Transfer Service, Inc. a Minnesota corporation, subject to the provisions of Chapter 302A of the Minnesota Statutes, known as the Minnesota Business Corporation Act, do hereby certify that at the annual meeting of the shareholders on August 18, 1987, the shareholders holding the majority of the issued and outstanding voting stock of Corporate Transfer Service, Inc. agreed to and adopted the Resolution attached hereto as Exhibit "A" effective August 18, 1987. IN WITNESS WHEREOF, we have subscribed our names this 30th day of August, 1987. /s/ Raymond D. Quist ------------------------------------ RAYMOND D. QUIST, President /s/ Louis B. Oberhauser ------------------------------------ LOUIS B. OBERHAUSER, Secretary EXHIBIT "A" Upon motion duly made, seconded, and carried, it was RESOLVED, that the Articles of Incorporation of Corporate Transfer Service, Inc. which reads as follows: ARTICLE XI. That any of the following actions shall require the written and signed consent of the holders of more than 75% of the authorized, issued and outstanding shares of common voting stock of the corporation entitled to vote for the election of the Board of Directors. a) The issuance of any shares of common voting shares of the corporation from its unissued or treasury stocks. b) Establishment of additional classes of stock c) Changes in officers compensation d) Payment of dividends or bonuses e) Hiring new employees or increasing employee benefits f) Borrowing money on behalf of the corporation or incurring any installment or lease obligation in excess of six months. be amended to read as follows: ARTICLE XI. That any of the following actions shall require the written and signed consent of the holders of more than 75% of the authorized, issued and outstanding shares of common voting stock of the corporation entitled to vote for the election of the Board of Directors. a) The issuance of any shares of common voting shares of the corporation from its unissued or treasury stocks. b) Establishment of additional classes of stock. c) Changes in officers compensation d) Payment of dividends or bonuses [SEAL] EX-3.60 24 a2079698zex-3_60.txt EXHIBIT 3.60 EXHIBIT 3.60 BY-LAWS OF CORPORATE TRANSFER SERVICE, INC. AS AMENDED Article I. Offices The principal office of the corporation in the State of Minnesota shall be located in the City of Wayzata, Minnesota, County of Hennepin. The corporation may have such other offices, either within or without the State of Minnesota, as the Board of Directors may designate or as the business of the corporation may require from time to time. The registered office of the corporation required by the Minnesota Business Corporation Act to be maintained in the State of Minnesota may be, but need not be, identical with the principal office in the State of Minnesota, and the address of the registered office may be changed from time to time by the Board of Directors. Article II. Shareholders SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall be established by the Board of Directors at a convenient point in time subsequent to the end of the fiscal year, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the State of Minnesota such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be. SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the President or by the Board of Directors, and shall be called by the President at the request of the holders of not less than one-fifth of all the outstanding shares of the corporation entitled to vote at the meeting. SECTION 3. PLACE OF MEETING. The Board of Directors may designate any place, either within or without the State of Minnesota, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all shareholders entitled to vote at a meeting may designate any place, either within or without the State of Minnesota, as the place for the holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the registered office of the corporation in the State of Minnesota. SECTION 4. NOTICE OF MEETING. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the President, or the Secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with postage thereon prepaid. SECTION 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, fifty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment theref except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired. SECTION 6. VOTING LISTS. The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at least ten days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list, for a period of ten days prior to such meeting, shall be kept on file at the registered office of the corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock transfer book shall be prima facie evidence as to who are the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders. SECTION 7. QUORUM. A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. SECTION 8. PROXIES. At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney in fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy. SECTION 9. VOTING OF SHARE. Subject to the provisions of Section 11 of this Article II, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of another corporation may be voted by such officer, agent or proxy as the By-Laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so be contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred. Shares of its own stock belonging to the corporation or held by it in a fiduciary capacity shall not be voted, directly, or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares at any given time. SECTION 11. CUMULATIVE VOTING. At each election for directors every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote, or to cumulate his votes by giving one candidate as many votes as the number of such directors multiplied by the number of his shares shall equal, or by distributing such votes on the same principle among any number of candidates. SECTION 12. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be taken at a meeting of the shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if a consent in writing, setting forth the action so taken shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. ARTICLE III. Board of Directors SECTION 1. GENERAL POWERS. The business and affairs of the corporation shall be managed by its Board of Directors. SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of the corporation shall be not less than three or the number of shareholders, if less, nor more than seven, with the initial number of directors of corporations to be set at three (3). Any change in the number of directors shall be determined at the annual meeting of the shareholders by the affirmative vote of the holders of more than seventy-five percent (75%) of the authorized and issued shares of stock entitled to vote. Each director shall hold office until the next annual meeting of shareholders and until his successor shall have been elected and qualified. Directors need not be residents of the State of Minnesota or shareholders of the corporation. SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without other notice than this By-Law immediately after, and at the same place as, the annual meeting of the shareholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Minnesota for the holding of additional regular meetings without other notice than such resolution. SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the President or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Minnesota, as the place for holding any special meeting of the Board of Directors called by them, except no meeting of the Board of Directors shall be held outside of the State of Minnesota without the consent of all of the directors. SECTION 5. NOTICE. Notice of any special meeting shall be given at least two days previously thereto by written notice delivered personally or mailed to each director at his business address, or by telegram. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, not the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. SECTION 6. QUORUM. Unless a higher quorum be required by the Articles of Incorporation, a majority of the number of directors elected by the shareholders at the last annual or special meeting shall then constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. SECTION 7. MANNER OF ACTING. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. SECTION 8. VACANCIES. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number or directors shall be filled by election at an annual meeting or at a special meeting of shareholders called for that purpose. SECTION 9. COMPENSATION. By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors, and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. SECTION 10. PRESUMPTION OF ASSENT. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 11. ACTION WITHOUT A MEETING. Any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors. ARTICLE IV. Officers SECTION 1. NUMBER. The officers of the corporation shall be a Chief Executive Officer and Chief Financial Officer, each of whom shall be elected by the Boaard of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person, except the offices of Chief Executive Officer. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed or in the manner hereinafter provided. SECTION 3. REMOVAL. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. SECTION 5. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer, also called the President, shall be the principal executive officer of the corporation and, subject to the control of the Board of Directors shall in general, supervise and control all of the business and affairs of the corporation. He shall, when present, preside at all meetings of the shareholders and of the Board of Directors. He may sign, with the Secretary or any other proper office of the corporation thereunto authorized by the Board of Directors, certificates for shares of the corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of Chief Executive Officer and such other duties as may be prescribed by the Board of Directors from time to time. SECTION 6. VICE-PRESIDENTS. In the absence of the Chief Executive Officer or in the event of his death, inability or refusal to act, the Vice-President (or in the event there by more than one Vice-President, the Vice-Presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the Chief Executive Officer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer. Any Vice-President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties as from time to time may be assigned to him by the Chief Executive Officer or by the Board of Directors. SECTION 7. THE SECRETARY. The Secretary shall: (a) keep the minutes of the shareholders and of the Board of Directors' meetings in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; (c) be custodian of the corporate records and of the seal, if one, of the corporation and see that the seal of the corporation is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a register of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; (e) sign with the Chief Executive Officer or a Vice-President, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; (f) have general charge of the stock transfer books of the corporation; and (g) in general perform all duties incident to the office of Secretary; and such other duties as from time to time may be assigned to him by the Chief Financial Officer or by the Board of Directors. SECTION 8. THE CHIEF FINANCIAL OFFICER. The Treasurer of the company shall be the Chief Financial Officer. If required by the Board of Directors, the Chief Financial Officer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of Article V of these By-Laws; and (b) in general perform all of the duties incident to the office of Chief Financial Officer and such other duties as from time to time may be assigned to him by the Chief Executive Officer or by the Board of Directors. SECTION 9. SALARIES. The salaries of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation subject to the requirements of the Articles of Incorporation. ARTICLE V. Contracts, Loans, Checks and Deposits SECTION 1. CONTRACTS. The Board of Directors by majority vote may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution passed by a majority of the Board of Directors. Such authority may be general or confined to specific instances. SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select by majority vote. ARTICLE VI. Directors' Interest in Contracts In the absence of fraud, no contract or other transaction between the corporation and any other corporation and no act of the corporation shall in any way be affected or invalidated by the fact that any of the directors of the corporation are pecuniarily or otherwise interested in, or are directors or officers of, such other corporation; in the absence of fraud, any director, individually, or any firm of which any director may be a member, may be a part to, or may be pecuniarily or otherwise interested in, any contract or transaction of the corporation, provided that the fact that he or such firm which is so interested shall be disclosed or shall have been known to the Board of Directors or a majority thereof; and any Director of the corporation who is also a director or officer of such other corporation or who is so interested may be counted in determining the existence of a quorum at any meeting of the Board of Directors of the corporation which shall authorize any such contract or transaction, and may vote there to authorize any such contract or transaction, with like force and effect as if he were not such director or officer of such other corporation or not so interested. ARTICLE VII. Certificates for Shares and Their Transfer SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of the corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the Chief Executive Officer, also known as President, or a Vice-President and by the Secretary or an Assistant Secretary. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe. ARTICLE VIII. Fiscal Year The fiscal year of the corporation shall begin on the first day of April and end on the 31st day of March in each year. ARTICLE IX. Dividends The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Articles of Incorporation. ARTICLE X. Seal This corporation shall have no seal. ARTICLE XI. Sale of shares by Shareholders All shares of stock issued by the Corporation shall be subject to the provisions of this Article unless otherwise modified by a stock purchase agreement signed by the Corporation. SECTION 1. MARKET VALUE. Market value shall be the price mutually agreed upon between the corporation and shareholders and if said corporation and shareholders cannot agree upon the fair market value of the stock, then the fair market value shall be fixed by three appraisers, one of whom shall be named by the company and affirmed by the shareholders not offering their stock for sale, and the second appraiser shall be named by the shareholder offering his stock for sale, and the third appraiser shall be chosen by the appraisers previously named. The fair market value so fixed by the majority of the appraisers so named shall be binding upon the company, and all shareholders of said corporation. SECTION 2. OFFER FOR SALE. The shares of stock of the company shall not be transferable or the subject of sale, assignment or pledge until said shareholder has first offered all of the shares owned by said shareholder to the company at the then fair market value. If said offer is refused by the company, then said stock shall be offered to the shareholders and, if necessary, prorated among them or such of them as desire to purchase. In each of the foregoing cases if such offer shall be made and refused by the company and the shareholders, the shares so offered shall be subject to sale, pledge or transfer, but not otherwise. In no case shall any share be assignable or transferable until after offer to the company and refusal by it and subsequent offer and refusal by the shareholders to purchase at the established fair market value. This restriction shall not apply to spousal transfers or transfers by gift or inheritance provided that said transfer does not increase the number of shareholders of the corporation under the Internal Revenue Code for a Sub "S" corporation election by a Small Business Corporation. SECTION 3. TIME. Any Shareholder offering shares of stock of the company for sale shall make said offer in writing at the fair market value as previously established, and thereafter the company shall have thirty (30) days within which to notify the shareholder of its intention to purchase said stock. If said company fails to notify said shareholder within said thirty (30) day period, said offer shall be considered rejected by said company and said shareholder shall offer said shares of stock to the remaining shareholders of said company and as its previously determined fair market value of said shareholders shall have thirty (30) days to consent to the purchase of said stock at its fair market value. If said shareholders should fail to accept said offer of sale in writing before the expiration of said thirty (30) day period it shall be deemed that they have rejected said offer. If said offer of sale is accepted by the company and/or shareholders, said shares of stock should be transferred to the company and/or prorated among the shareholders within fourteen (14) days of the company's and/or shareholders' acceptance of said offer to sell, and said stock shall be paid for by said company and/or shareholders by a cashier's or certified check totaling the cost of said stock being so purchased. SECTION 4. REFUSAL TO PURCHASE. There shall be no obligation on the company and/or shareholders to purchase the shares of stock so offered for sale, and if the company and/or shareholders refuse to accept the offer of sale said shares so offered shall be subject to sale, pledge or transfer, but not otherwise. ARTICLE XII. Waiver of Notice Whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation or under the provisions of the Minnesota Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE XIII. Amendments The Board of Directors shall have authority pursuant to the Articles of Incorporation to make or alter the By-Laws of the corporation, subject to the power of the shareholders to change or repeal the same; provided, however, that the Board of Directors shall not make or alter any By-Law fixing the number, qualifications, classification or term of office of directors. ARTICLE XIV. Indemnification of Directors and Officers Each director and officer of the corporation, whether or not then in office, shall be indemnified by the corporation against reasonable costs and expenses (including counsel fees) incurred by him in connection with any action, suit or proceeding to which he may be a party by reason of his being or having been a director or officer of the corporation, except in relation to matters as to which he shall finally be adjudged in such action, suit or proceeding to have been derelict in the performance of his duties as such director or officer; and the foregoing right of indemnification shall not be exclusive of other rights to which he shall be entitled as a matter of law. We, the undersigned, Chief Executive Officer and Secretary of hereby certify that at a meeting of the Board of Directors of said corporation held in Wayzata, Minnesota on December 17th, 1982, at which meeting all members of said Board of Directors were present and took part in the meeting, the foregoing By-Laws were adopted as and for the By-Laws of said corporation. Dated this 17th day of December, 1982. /s/ Raymond D. Quist ----------------------------------- /s/ Roger A. Fazendin ----------------------------------- Chief Executive Officer /s/ Louis B. Oberhauser ----------------------------------- Secretary We, the undersigned, being all of the Shareholders acknowledge that these are the By-Laws of the Corporation as of December 17,1982. /s/ Roger A. Fazendin ----------------------------------- Roger A. Fazendin /s/ Daniel Fazendin ----------------------------------- Daniel Fazendin /s/ Raymond D. Quist ----------------------------------- Raymond D. Quist EX-3.61 25 a2079698zex-3_61.txt EXHIBIT 3.61 EXHIBIT 3.61 [SEAL] CERTIFICATE OF INCORPORATION OF CRS ACQUISITION CORP. FIRST: The name of the Corporation is CRS ACQUISITION CORP. SECOND: The address of the Corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD: The nature of the business or purposes to be conducted or promoted are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The total number of shares of stock that the Corporation shall have authority to issue is Five Hundred (500) shares, all of which shall be Common Stock of the par value of $.01 per share. FIFTH: The name and mailing address of the sole Incorporator are as follows: NAME MAILING ADDRESS Halle F. Terrion, Esq. Baker & Hostetler LLP 3200 National City Center 1900 E. 9th Street Cleveland, Ohio 44114 SIXTH: The Board of Directors is authorized to make, alter or repeal the By-Laws of the Corporation. SEVENTH: Any one or more directors may be removed, with or without cause, by the vote or written consent of the holders of a majority of the issued and outstanding shares of stock of the Corporation entitled to be voted at an election of directors. EIGHTH: Meetings of stockholders shall be held at such place, within or without the state of Delaware, as may be designated by or in the manner provided in the By-Laws, or, if not so designated, at the registered office of the Corporation in the State of Delaware. Elections of directors need not be by written ballot unless and to the extent that the By-Laws so provide. NINTH: The Corporation reserves the right to amend, alter or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute, and all rights of stockholders herein are subject to this reservation. TENTH: To the fullest extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. THE UNDERSIGNED, being the incorporator above named for the purposes of forming a corporation pursuant to the General Corporation Law of the State -2- of Delaware, has signed this instrument the 31st day of July, 1998 and does thereby acknowledge that it is his act and deed and that the facts stated therein are true. /s/ Halle F. Terrion ----------------------------------- Halle F. Terrion, Esq. Sole Incorporator -3- EX-3.62 26 a2079698zex-3_62.txt EXHIBIT 3.62 EXHIBIT 3.62 BY-LAWS OF CRS ACQUISITION CORP. ARTICLE I STOCKHOLDERS Section 1. PLACE OF STOCKHOLDERS' MEETINGS. All meetings of the stockholders of the Corporation shall be held at such place or places, within or outside the State of Delaware, as may be fixed by the Board of Directors from time to time or as shall be specified in the respective notices thereof. Section 2. DATE, HOUR AND PURPOSE OF ANNUAL MEETINGS OF STOCKHOLDERS. Annual Meetings of Stockholders, commencing with the year 1999, shall be held on such day and at such time as the Directors may determine from time to time by resolution, at which meeting the stockholders shall elect, by a plurality of the votes cast at such election, a Board of Directors, and transact such other business as may properly be brought before the meeting. If for any reason a Board of Directors shall not be elected at the Annual Meeting of Stockholders, or if it appears that such Annual Meeting is not held on such date as may be fixed by the Directors in accordance with the provisions of the By-laws, then in either such event the Directors shall cause the election to be held as soon thereafter as convenient. Section 3. SPECIAL MEETINGS OF STOCKHOLDERS. Special meetings of the stockholders entitled to vote may be called by the Chairman of the Board, if any, the Vice Chairman of the Board, if any, the President or any Vice President, the Secretary or by the Board of Directors, and shall be called by any of the foregoing at the request in writing of stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the meeting. Section 4. NOTICE OF MEETINGS OF STOCKHOLDERS. Except as otherwise expressly required or permitted by the laws of Delaware, not less than ten days nor more than sixty days before the date of every stockholders' meeting the Secretary shall give to each stockholder of record entitled to vote at such meeting written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Such notice, if mailed, shall be deemed to be given when deposited in the United States mail, with postage thereon prepaid, addressed to the stockholder at the post office address for notices to such stockholder as it appears on the records of the Corporation. An Affidavit of the Secretary or an Assistant Secretary or of a transfer agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Section 5. QUORUM OF STOCKHOLDERS. (a) Unless otherwise provided by the laws of Delaware, at any meeting of the stockholders the presence in person or by proxy of stockholders entitled to cast a majority of the votes thereat shall constitute a quorum. (b) At any meeting of the stockholders at which a quorum shall be present, a majority of those present in person or by proxy may adjourn the meeting from time to time without notice other than announcement at the meeting. In the absence of a quorum, the officer presiding thereat shall have power to adjourn the meeting from time to time until a quorum shall be present. Notice of any adjourned meeting other than announcement at the meeting shall not be required to be given, except as provided in paragraph (d) below and except where expressly required by law. (c) At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting originally called, but only those stockholders entitled to vote at the meeting as originally noticed shall be entitled to vote at any adjournment or adjournments thereof, unless a new record date is fixed by the Board of Directors. (d) If an adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. Section 6. CHAIRMAN AND SECRETARY OF MEETING. The Chairman, or in his absence, the Vice Chairman, or in his absence, the President, or in his absence, any Vice President, shall preside at meetings of the stockholders. The Secretary shall act as secretary of the meeting, or in his absence an Assistant Secretary shall act, or if neither is present, then the presiding officer shall appoint a person to act as secretary of the meeting. Section 7. VOTING BY STOCKHOLDERS. Except as may be otherwise provided by the Certificate of Incorporation or by these By-laws, at every meeting of the stockholders each stockholder shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation on the record date for the meeting. All elections and questions shall be decided by the vote of a majority in interest of the stockholders present in person or represented by proxy and entitled to vote at the meeting, except as otherwise permitted or required by the laws of Delaware, the Certificate of Incorporation or these By-laws. Section 8. PROXIES. Any stockholder entitled to vote at any meeting of stockholders may vote either in person or by his attorney-in-fact. Every proxy shall be in writing, subscribed by the stockholder or his duly authorized attorney-in-fact, but need not be dated, sealed, witnessed or acknowledged. 2 Section 9. LIST OF STOCKHOLDERS. (a) At least ten days before every meeting of stockholders, the Secretary shall prepare or cause to be prepared a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. (b) During ordinary business hours, for a period of at least ten days prior to the meeting, such list shall be open to examination by any stockholder for any purpose germane to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. (c) The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and it may be inspected by any stockholder who is present. (d) The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this Section or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders. ARTICLE II DIRECTORS Section 1. POWERS OF DIRECTORS. The property, business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all the powers of the Corporation except such as are by the laws of Delaware or the Certificate of Incorporation or these By-laws required to be exercised or done be the stockholders. Section 2. NUMBER, METHOD OF ELECTION, TERMS OF OFFICE OF DIRECTORS. The number of Directors which shall constitute the whole Board of Directors shall be such as from time to time shall be determined by resolution of the Board of Directors, but the number shall not be less than one provided that the tenure of a Director shall not be affected by any decrease in the number of Directors so made by the Board. Each Director shall hold office until his successor is elected and qualified, provided however that a Director may resign at any time. Section 3. VACANCIES ON BOARD OF DIRECTORS. (a) Any Director may resign his office at any time by delivering his resignation in writing to the Chairman or the President or the Secretary. It will take effect at the time specified therein, or if no time is specified, it will be effective at the time of its receipt by the 3 Corporation. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. (b) Any vacancy or newly created Directorship resulting from any increase in the authorized number of Directors may be filled by vote of a majority of the Directors then in office, though less than a quorum, and any Director so chosen shall hold office until the next annual election of Directors by the stockholders and until his successor is duly elected and qualified, or until his earlier resignation or removal. Section 4. MEETINGS OF THE BOARD OF DIRECTORS. (a) The Board of Directors may hold their meetings, both regular and special, either within or outside the State of Delaware. (b) Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by resolution of the Board of Directors. (c) The first meeting of each newly elected Board of Directors except the initial Board of Directors shall be held as soon as practicable after the Annual Meeting of the stockholders for the election of officers and the transaction of such other business as may come before it. (d) Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman or the President or at the request of Directors constituting one-third of the number of Directors then in office, but not less than two Directors. (e) The Secretary shall give notice to each Director of any meeting of the Board of Directors by mailing the same at least two days before the meeting or by telegraphing or delivering the same not later than the day before the meeting. Such notice need not include a statement of the business to be transacted at, or the purpose of, any such meeting. Any and all business may be transacted at any meeting of the Board of Directors. No notice of any adjourned meeting need be given. No notice to or waiver by any Director shall be required with respect to any meeting at which the Director is present. Section 5. QUORUM AND ACTION. A majority of the entire Board of Directors shall constitute a quorum for the transaction of business; but if there shall be less than a quorum at any meeting of the Board, a majority of those present may adjourn the meeting from time to time. Unless otherwise provided by the laws of Delaware, the Certificate of Incorporation or these By-laws, the act of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. 4 Section 6. PRESIDING OFFICER AND SECRETARY OF MEETING. The Chairman or, in his absence, a member of the Board of Directors selected by the members present, shall preside at meetings of the Board. The Secretary shall act as secretary of the meeting, but in his absence the presiding officers shall appoint a secretary of the meeting. Section 7. ACTION BY CONSENT WITHOUT MEETING. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the records of the Board or committee. Section 8. EXECUTIVE COMMITTEE. The Board of Directors may appoint from among its members and from time to time may fill vacancies in an Executive Committee to serve during the pleasure of the Board. The Executive Committee shall consist of three members, or such greater number of members as the Board of Directors may by resolution from time to time fix. One of such members shall be the Chairman of the Board and another shall be the Vice Chairman of the Board, who shall be the presiding officer of the Committee. During the intervals between the meetings of the Board, the Executive Committee shall possess and may exercise all of the powers of the Board in the management of the business and affairs of the Corporation conferred by these By-laws or otherwise. The Committee shall keep a record of all its proceedings and report the same to the Board. A majority of the members of the Committee shall constitute a quorum. The act of a majority of the members of the Committee present at any meeting at which a quorum is present shall be the act of the Committee. Section 9. OTHER COMMITTEES. The Board of Directors may also appoint from among its members such other committees of two or more Directors as it may from time to time deem desirable, and may delegate to such committees such powers of the Board as it may consider appropriate. Section 10. COMPENSATION OF DIRECTORS. Directors shall receive such reasonable compensation for their service on the Board of Directors or any committees thereof, whether in the form of salary or a fixed fee for attendance at meetings, or both, with expenses, if any, as the Board of Directors may from time to time determine. Nothing herein contained shall be construed to preclude any Director from serving in any other capacity and receiving compensation therefor. ARTICLE III OFFICERS Section 1. EXECUTIVE OFFICERS OF THE CORPORATION. The executive officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Secretary and a Treasurer. The Board of Directors also may appoint a Chairman of the Board, a Vice Chairman of the Board, and such Vice Presidents, Assistant Secretaries and Assistant Treasurers as they shall deem necessary. Any two offices except those of Chairman of the Board and Vice Chairman of the 5 Board, President and Vice President, or President and Secretary may be filled by the same person. None of the officers need be a member of the Board except the Chairman of the Board and the Vice Chairman of the Board. Section 2. CHOOSING OF EXECUTIVE OFFICERS. The Board of Directors at its first meeting after each Annual Meeting of Stockholders shall choose a President, a Secretary and a Treasurer. Section 3. ADDITIONAL OFFICERS. The Board of Directors may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. Section 4. SALARIES. The salaries of all officers and agents of the Corporation specially appointed by the Board shall be fixed by the Board of Directors. Section 5. TERM, REMOVAL AND VACANCIES. The officers of the Corporation shall hold office until their respective successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and of the stockholders. He shall be the Chief Executive Officer of the Company, unless the Board has designated the President as the Chief Executive Officer. In the absence or disability of the Chairman of the Board: (a) the Vice Chairman of the Board shall preside at all meetings of the Board of Directors and of the stockholders, and (b) the powers and duties of the Chairman of the Board shall be exercised jointly by the Vice Chairman of the Board and the President until such authority is altered by action of the Board of Directors. The Chairman of the Board shall present to the Annual Meeting of Stockholders a report of the business of the preceding fiscal year. Section 7. VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board, if any, shall have such powers and perform such duties, as are provided in these By-laws or as may be delegated to him by the Chairman of the Board, and shall perform such other duties as may from time to time be assigned to him by the Board of Directors. Section 8. PRESIDENT. The President shall have such powers and perform such duties as are provided in these By-laws or as may be delegated to him by the Board of Directors or the Chairman of the Board. If there is no Chairman of the Board, the President shall be the Chief Executive Officer of the Corporation and shall have all the duties and responsibilities previously enumerated for the Chairman of the Board. In the absence of the Chairman of the Board and the Vice Chairman of the Board, the President shall preside at all meetings of the stockholders. 6 Section 9. POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have general charge and supervision of the business of the Company and shall exercise and perform all the duties incident to the office of the Chief Executive Officer. He shall have direct supervision of the other officers and shall also exercise and perform such powers and duties as may be assigned to him by the Board of Directors. Section 10. POWERS AND DUTIES OF VICE PRESIDENTS. Any Vice President designated by the Board of Directors shall, in the absence, disability, or inability to act of the President, perform all duties and exercise all the powers of the President and shall perform such other duties as the Board may from time to time prescribe. Each Vice President shall have such other powers and shall perform such other duties as may be assigned to him by the Board. Section 11. POWERS AND DUTIES OF TREASURER AND ASSISTANT TREASURERS. (a) The Treasurer shall have the care and custody of all the funds and securities of the Corporation except as may be otherwise ordered by the Board of Directors, and shall cause such funds to be deposited to the credit of the Corporation in such banks or depositories as may be designated by the Board of Directors, the Chairman, the President or the Treasurer, and shall cause such securities be placed in safekeeping in such manner as may be designated by the Board of Directors, the Chairman, the President or the Treasurer. (b) The Treasurer, or an Assistant Treasurer, or such other person or persons as may be designated for such purpose by the Board of Directors, the Chairman, the President or the Treasurer, may endorse in the name and on behalf of the Corporation all instruments for the payment of money, bills of lading, warehouse receipts, insurance policies and other commercial documents requiring such endorsement. (c) The Treasurer, or an Assistant Treasurer, or such other person or persons as may be designated for such purpose by the Board of Directors, the Chairman, the President or the Treasurer, may sign all receipts and vouchers for payments made to the Corporation; he shall render a statement of the cash account of the Corporation to the Board of Directors as often as it shall require the same; he shall enter regularly in books to be kept by him for that purpose full and accurate accounts of all moneys received and paid by him on account of the Corporation and of all securities received and delivered by the Corporation. (d) Each Assistant Treasurer shall perform such duties as may from time to time be assigned to him by the Treasurer or by the Board of Directors. In the event of the absence of the Treasurer or his incapacity or inability to act, then any Assistant Treasurer may perform any of the duties and may exercise any of the powers of the Treasurer. 7 Section 12. POWERS AND DUTIES OF SECRETARY AND ASSISTANT SECRETARIES. (a) The Secretary shall attend all meetings of the Board, all meetings of the stockholders, and shall keep the minutes of all proceedings of the stockholders and the Board of Directors in proper books provided for that purpose. The Secretary shall attend to the giving and serving of all notices of the Corporation in accordance with the provisions of the By-laws and as required by the laws of Delaware. The Secretary may, with the President, a Vice President or other authorized officer, sign all contracts and other documents in the name of the Corporation. He shall perform such other duties as may be prescribed in these By-laws or assigned to him and all other acts incident to the position of Secretary. (b) Each Assistant Secretary shall perform such duties as may from time to time be assigned to him by the Secretary or by the Board of Directors. In the event of the absence of the Secretary or his incapacity or inability to act, then any Assistant Secretary may perform any of the duties and may exercise any of the powers of the Secretary. (c) In no case shall the Secretary or any Assistant Secretary, without the express authorization and direction of the Board of Directors, have any responsibility for, or any duty or authority with respect to, the withholding or payment of any federal, state or local taxes of the Corporation, or the preparation or filing of any tax return. ARTICLE IV CAPITAL STOCK Section 1. STOCK CERTIFICATES. (a) Every holder of stock in the Corporation shall be entitled to have a certificate signed in the name of the Corporation by the Chairman or the President or the Vice Chairman or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number of shares owned by him. (b) If such a certificate is countersigned by a transfer agent other than the Corporation or its employee, or by a registrar other than the Corporation or its employee, the signatures of the officers of the Corporation may be facsimiles and, if permitted by Delaware law, any other signature on the certificate may be a facsimile. (c) In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. 8 (d) Certificates of stock shall be issued in such form not inconsistent with the Certificate of Incorporation as shall be approved by the Board of Directors. They shall be numbered and registered in the order in which they are issued. No certificate shall be issued until fully paid. Section 2. RECORD OWNERSHIP. A record of the name and address of the holder of each certificate, the number of shares represented thereby, and the date of issue thereof shall be made on the Corporation's books. The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as required by the laws of Delaware. Section 3. TRANSFER OF RECORD OWNERSHIP. Transfers of stock shall be made on the books of the Corporation only by direction of the person named in the certificate or his attorney, lawfully constituted in writing, and only upon the surrender of the certificate therefor and a written assignment of the shares evidenced thereby. Whenever any transfer of stock shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and transferee request the Corporation to do so. Section 4. LOST, STOLEN OR DESTROYED CERTIFICATES. Certificates representing shares of the stock of the Corporation shall be issued in place of any certificate alleged to have been lost, stolen or destroyed in such manner and on such terms and conditions as the Board of Directors from time to time may authorize. Section 5. TRANSFER AGENT, REGISTRAR, RULES RESPECTING CERTIFICATES. The Corporation shall maintain one or more transfer offices or agencies where stock of the Corporation shall be transferable. The Corporation shall also maintain one or more registry offices where such stock shall be registered. The Board of Directors may make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock certificates. Section 6. FIXING RECORD DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. The Board of Directors may fix in advance a date as the record date for the purpose of determining the stockholders entitled to notice of, or to vote at, any meeting of the stockholders or any adjournment thereof, or the stockholders entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or to express consent to corporate action in writing without a meeting, or in order to make a determination of the stockholders for the purpose of any other lawful action. Such record date in any case shall not be more than sixty days nor less than ten days before the date of a meeting of the stockholders, nor more than sixty days prior to any other action requiring such determination of the stockholders. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 9 ARTICLE V SECURITIES HELD BY THE CORPORATION Section 1. VOTING. Unless the Board of Directors shall otherwise order, the Chairman, the Vice Chairman, the President, any Vice President or the Treasurer shall have full power and authority on behalf of the Corporation to attend, act and vote at any meeting of the stockholders of any corporation in which the Corporation may hold stock and at such meeting to exercise any or all rights and powers incident to the ownership of such stock, and to execute on behalf of the Corporation a proxy or proxies empowering another or others to act as aforesaid. The Board of Directors from time to time may confer like powers upon other person or persons. Section 2. GENERAL AUTHORIZATION TO TRANSFER SECURITIES HELD BY THE CORPORATION. (a) Any of the following officers, to-wit: the Chairman, the President, any Vice President, the Treasurer or the Secretary of the Corporation shall be and are hereby authorized and empowered to transfer, convert, endorse, sell, assign, set over and deliver any and all shares of stock, bonds, debentures, notes, subscription warrants, stock purchase warrants, evidences of indebtedness, or other securities now or hereafter standing in the name of or owned by the Corporation, and to make, execute and deliver under the seal of the Corporation any and all written instruments of assignment and transfer necessary or proper to effectuate the authority hereby conferred. (b) Whenever there shall be annexed to any instrument of assignment and transfer executed, pursuant to and in accordance with the foregoing paragraph (a), a certificate of the Secretary or an Assistant Secretary of the Corporation in office at the date of such certificate setting forth the provisions hereof and stating that they are in full force and effect and setting forth the names of persons who are then officers of the Corporation, then all persons to whom such instrument and annexed certificate shall thereafter come shall be entitled, without further inquiry or investigation and regardless of the date of such certificate, to assume and to act in reliance upon the assumption that the shares of stock or other securities named in such instrument were theretofore duly and properly transferred, endorsed, sold, assigned, set over and delivered by the Corporation, and that with respect to such securities the authority of these provisions of the By-laws and of such officers is still in full force and effect. ARTICLE VI DIVIDENDS Section 1. DECLARATION OF DIVIDENDS. Dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting, pursuant to law. 10 Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Section 2. PAYMENT AND RESERVES. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Directors shall think conductive to the interest of the Corporation, and the directors may modify or abolish any such reserves in the manner in which they were created. Section 3. RECORD DATE. The Board of Directors may, to the extent provided by law, prescribe a period, in no event in excess of sixty (60) days, prior to the date for payment of any dividend, as a record date for the determination of stockholders entitled to receive payment of any such dividend, and in such case such stockholders and only such stockholders as shall be stockholders of record on said date so fixed shall be entitled to receive payment of such dividend, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. ARTICLE VII GENERAL PROVISIONS Section 1. SIGNATURES OF OFFICERS. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. The signature of any officer upon any of the foregoing instruments may be a facsimile whenever authorized by the Board. Section 2. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. Section 3. SEAL. Upon resolution of the Board of Directors, the Corporation may elect to have a corporate seal. In such event, the corporate seal shall have inscribed thereon the name of the Corporation, the year of its incorporation and the words "Corporate Seal, Delaware". Said seal may be used for causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. 11 ARTICLE VIII WAIVER OF OR DISPENSING WITH NOTICE Whenever any notice of the time, place or purpose of any meeting of the stockholders, Directors or a committee is required to be given under the laws of Delaware, the Certificate of Incorporation or these By-laws, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the holding thereof, or actual attendance at the meeting in person, or in the case of the stockholders, by his attorney-in-fact, shall be deemed equivalent to the giving of such notice to such persons. No notice need be given to any person with whom communication is made unlawful by any law of the United States or any rule, regulation, proclamation or executive order issued under any such law. ARTICLE IX AMENDMENT OF BY-LAWS These By-laws, or any of them, may from time to time be supplemented, amended or repealed by the Board of Directors, or by the vote of a majority in interest of the stockholders represented and entitled to vote at any meeting at which a quorum is present. 12 EX-3.63 27 a2079698zex-3_63.txt EXHIBIT 3.63 EXHIBIT 3.63 [SEAL] ARTICLES OF INCORPORATION (UNDER CHAPTER 1701 OF THE OHIO REVISED CODE) PROFIT CORPORATION The undersigned, desiring to form a corporation, for profit, under Sections 1701.01 et. seq. of the Ohio Revised Code, do hereby state the following: FIRST. The name of said corporation shall be: CRS TITLE AGENCY, INC. -------------------------------------------------------------------- SECOND. The place in Ohio where its principal office is to be located is MAYFIELD HEIGHTS CUYAHOGA County, Ohio -------------------------------------- ------------- (city, village or township) THIRD. The purpose(s) for which this corporation is formed is: For the purpose of engaging in any lawful act or activity for which corporations may be formed under ORC sections 1701.01 to 1701.98. To solicit and sell title insurance and to generally conduct the business of a title insurance agency and do any and all acts and things necessary and proper to the accomplishment of the forgoing and to do all other incidental things to the operation of a title insurance agency. FOURTH. The number of shares which the corporation is authorized to have outstanding is: 850 (Please state whether shares are common or preferred, and their par value, if any. Shares will be recorded as common with no par value unless otherwise indicated.) IN WITNESS WHEREOF, we have hereunto subscribed our names, on January 20, 2000 ----------- (date) By: /s/ Henry A. Roth , Incorporator ----------------------- Name: HENRY A. ROTH ----------------------- Page 1 of 2 EX-3.64 28 a2079698zex-3_64.txt EXHIBIT 3.64 EXHIBIT 3.64 CODE OF REGULATIONS OF CRS TITLE AGENCY, INC. CHAPTER I SHARE CERTIFICATES 1.01 FORM OF CERTIFICATES AND SIGNATURES Each holder of shares shall be entitled to one or more certificate signed by the Chairman of the Board or the President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the Corporation, which shall certify the number and class of shares held by him in the Corporation, but no certificate for shares shall be executed or delivered until such shares are fully paid. When such a certificate is countersigned by an incorporated transfer agent or registrar, the signature of any of said officers of the Corporation may be facsimile, engraved, stamped, or printed. Although any officer of the Corporation whose manual or facsimile signature is affixed to such a certificate ceases to be such officer before the certificate is delivered, such certificate nevertheless shall be effective in all respects when delivered. 1.02 TRANSFER OF SHARES Shares of the Corporation shall be transferable upon the books of the Corporation by the holders thereof, in person, or by a duly authorized attorney, upon surrender and cancellation of certificates for a like number of shares of the same class or series, with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures to such assignment and power of transfer as the corporation or its agents may reasonably require. 1.03 LOST, STOLEN, OR DESTROYED CERTIFICATES The Corporation may issue a new certificate for shares in place of any certificate theretofore issued by it and alleged to have been lost, stolen, or destroyed, and the Board of Directors may, in its discretion, require the owner, or his legal representative to give the Corporation a bond containing such terms as the Board of Directors may require to protect the Corporation or any person injured by the execution and delivery of a new certificate. 1.04 TRANSFER AGENT AND REGISTRAR The Board of Directors may appoint, or revoke the appointments of transfer agents and registrars and may require all certificates for shares to bear the signatures of such transfer agents and registrars, or any of them. CHAPTER II SHAREHOLDERS 2.01 ANNUAL MEETINGS The annual meeting of shareholders of the Corporation for the election of directors, the consideration of reports to be laid before such meeting, and the transaction of such other business as may be properly brought before such meeting shall be held at the principal office of the Corporation, or at such other place, within or without the State of Ohio, as may be designated by the Board of Directors, and specified in the notice thereof on the third Tuesday of May of each year, but if that day is a legal holiday, or the first business day next following. 2.02 SPECIAL MEETINGS A special meeting of the shareholders may be called by the President, or by any two Directors, or my shareholders representing 25% of the outstanding shares of the Corporation entitled to vote thereat. The call for each special meeting shall specify the time, place (which may be within or without the State of Ohio) and purpose or purposes thereof, and no other business other than that specified in said call shall be considered at such meeting. 2.03 NOTICE OF MEETINGS A written notice of every meeting of the shareholders (including the annual meeting), stating the time, place and purposes thereof, shall be given by or at the direction of the President, the Secretary or the officer or persons calling the meeting, to each shareholder of record entitled to notice of the meting not less than seven nor more than sixty days before such meeting. All notices with respect to any shares to which persons are jointly entitled may be given to that one of such persons who is first named upon the books of the Corporation and notice so given shall be sufficient notice to all the holders of such shares. Such notice shall be deemed to be sufficiently delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the records of the Corporation with postage thereon prepaid. 2.04 WAIVER OF NOTICE A written waiver, signed by a shareholder, of notice of a shareholder's meeting, whether executed before, at or after such meeting, shall be equivalent to giving such notice. Attendance by a shareholder at a shareholder's meeting, without objection prior to or at the commencement of such meeting, shall constitute a waiver by him of notice of such meeting. 2.05 CLOSING OF BOOKS AND FIXING RECORD DATE The Board of Directors may determine the record date for the determination of which persons are entitled to notices, dividends, distributions, rights and the like, but said record date shall not be a date earlier than the date on which the record date is fixed and shall not be more than sixty days preceding the date of the meeting of shareholders or the date fixed for the payment of dividends or distributions or the exercise of any rights. The Board of Directors may close the stock record book against transfers of shares during the whole or any part of such period. 2.06 QUORUM, ADJOURNMENT At any meeting of the shareholders, the holders of a majority of the shares entitled to vote then issued and outstanding, whether present in person or represented by proxy, shall constitute a quorum. If a quorum shall not be present or represented at any meeting of the shareholders, those shareholders present or represented shall have the power, without notice other than announcement at a meeting, to adjourn the meeting until a quorum shall be present or represented. At such adjourned meeting at which a quorum is present or represented any business may be transacted as might have been if the quorum had been present at the originally scheduled meeting. The Corporation shall not, directly or indirectly, vote any shares issued by it and thereafter acquired and owned by it and not retired, and such shares shall not be considered issued and outstanding in computing the number of shares entitled to vote at any meeting of shareholders. 2.07 VOTING Unless expressly provided to the contrary in the Articles of Incorporation, this code of Regulations, or the Ohio Revised Code, each question properly before any meeting of the shareholders at which a quorum is present shall be decided by a vote of the holders of a majority of the shares entitled to vote which are present or represented at such meeting. 2.08 ACTION BY WRITTEN CONSENT Any action which may be authorized or taken at a meeting of the shareholders, may be taken or authorized without a meeting by writing or writings signed by all of the shareholders, which writing or writings shall be filed with or entered upon the records of the Corporation. 2.09 PROXIES Persons entitled to vote shares or to act with respect to shares may vote or act in person by proxy. Holders of proxies need not be shareholders. Unless the writing appointing a proxy otherwise provides, the presence at a meeting of the person having appointed a proxy shall not operate to revoke such appointment. Notice to the Corporation in writing or at an open meeting, of the revocation of a proxy shall not affect any vote or act previously taken. 2.10 APPROVAL AND RATIFICATION OF ACTS OF OFFICERS OR BOARD OF DIRECTORS Any contract, act or transaction, prospective or past, of the Corporation, or of the Board of Directors, or of the officers, may be approved or ratified by the affirmative vote at a meeting of shareholders, or by written consent, with or without a meeting, of the holders of record of shares entitling them to exercise a majority of voting power of the Corporation, and such approval or ratification shall be as valid and binding as though affirmatively voted for or consented to by every shareholder of the Corporation. 2.11 RESTRICTIONS ON TRANSFER OF SHARES Shares of the Corporation may be restricted as to transfer by provision therefore in the Articles of Incorporation, or by an appropriate action or agreement executed by the shareholders. CHAPTER III DIRECTORS 3.01 NUMBER OF DIRECTORS The number of Directors, which shall not be less than two or the number of shareholders, whichever is fewer, may be fixed or changed at a meeting of the shareholders called for the purpose of fixing the number of Directors or of electing Directors at which a quorum is present, by the vote of the holders of a majority of the shares represented at a meeting and entitled to vote on such proposal. In case the shareholders final to fix the number of Directors to be elected, the number elected shall be deemed to be the number of elected shall be deemed to be the number of Directors fixed. 3.02 ELECTION AND TERM Directors shall be elected at the annual meeting of shareholders or a special meeting called for that purpose. Each director who shall be elected shall serve until the next annual meeting of shareholders and shall hold office until his successor is elected or until his death, resignation or removal. 3.03 AUTHORITY All the authority of the corporation shall be exercised by the Board of Directors, except as otherwise provided by the Articles of Incorporation, this Code of Regulations or the Ohio Revised Code. 3.04 PLACE OF MEETING The Board of Directors may hold its meetings as such place or places within or without the State of Ohio, as the Board may, from time to time, determine. 3.05 ANNUAL MEETINGS An annual meeting of the Board of Directors shall be held immediately following the annual meeting of shareholders. No prior notice of such meeting shall be required. 3.06 SPECIAL MEETINGS Special Meetings of the Board of Directors may be called by the President, Chairman of the Board, or any two members of the Board of Directors. 3.07 NOTICE OF MEETING Written notice of the time and place of each special meeting of the Board of Directors shall be given at or by the direction of the President or the Secretary to each Director, either by personal delivery or by mail, telegram or cablegram, at least two day before the meeting. Such notice need not specify the purposes of such meeting. The attendance of any Director at any meeting without protesting, prior to or at the commencement of said meeting, the lack of proper notice shall be deemed to be a waiver by him of notice. 3.08 QUORUM A majority of the number of Directors then fixed shall constitute a quorum for the transaction of business. 3.09 VOTING Unless expressly provided to the contrary in the Articles of Incorporation, this Code of Regulations, or the Ohio Revised Code, each question, properly before any meeting of the Directors at which a quorum is present shall be decided by a vote of a majority of the Directors who are present. 3.10 ACTION BY WRITTEN CONSENT Any action which may be authorized or taken at a meeting of the Board of Directors, may be authorized or taken without a meeting by a writing or writings signed by all of the Directors, which writing or writings shall be filed with or entered upon the records of the Corporation. 3.11 RESIGNATION Any Director may resign at any time by giving notice to the Board of Directors or the President or Secretary, and such resignation shall be deemed to take effect upon its receipt by the person or persons to whom addressed, unless some other time is specified therein. 3.12 VACANCY In case of any vacancy in the Board of Directors, thorough death, insanity, bankruptcy, resignation or disqualification, or through removal as provided in the Ohio Revised Code, the remaining Directors, though less than a majority of the whole authorized number of Directors, may, by the vote of a majority of their number, elect a successor to hold office for the unexpired portion of the term of the Director whose place shall be vacant, and until his successor is elected. 3.13 VACANCY DEEMED TO EXIST A vacancy within the meaning of Section 3.12 shall also be deemed to exist if, at any time, the shareholders increase the authorized number of Directors or do not, at the same meeting or at any adjournment thereof, elect the necessary additional Director or Directors. 3.14 COMPENSATION The board of Directors may, by the affirmative vote of a majority of those in office and irrespective of any persons interested therein, establish reasonable compensation for service as a Director which may include profit-sharing, pension, disability and death benefits and may provide for the reimbursement of expenses incurred by a Director in the discharge of his duties. 3.15 ATTENDANCE AT MEETINGS OF PERSONS WHO ARE NOT DIRECTORS Unless waived by a majority of Directors in attendance, not less than twenty-four (24) hours before any regular or special meeting of the Board of Directors, any Director who desires the presence at such a meeting of not more than one (1) person who is not a Director shall so notify all other Directors, request the presence of such person at the meeting, and state the reason in writing. Such person will not be permitted to attend a Director's meeting unless a majority of the Directors in attendance vote to admit such person to the meeting. Such vote shall constitute the first order of business for any such meeting by the vote of the majority of the Directors in attendance. CHAPTER IV COMMITTEES 4.01 DESIGNATION OF EXECUTIVE COMMITTEE The Board of Directors may designate three or more Directors to constitute the Executive Committee. No member of the Executive Committee shall continue to be a member thereof after he ceases to be a Director of the Corporation. The Board of Directors shall have the power at any time to increase or decrease the number of members of the Executive Committee (but in no event no less than three), to fill vacancies thereon, to remove any member thereof, and to change the functions or terminate the existence thereof. 4.02 POWERS OF THE EXECUTIVE COMMITTEE During the intervals between meetings of the Board of Directors, and subject to such limitations as may be required by law or by resolution of the Board of Directors, the Executive Committee shall have and may exercise all of the authority of the Board of Directors in the management of the Corporation; provided, however, it shall not have the power to fill vacancies occurring in the Board of Directors or in any committee. The Executive Committee may also from time to time formulate and recommend to the Board of Directors for approval general policies regarding the management of the business and affairs of the Corporation. 4.03 PROCEDURE; MEETINGS; QUORUM Unless otherwise ordered by the Board of Directors, a majority of the members of any committee appointed by the Directors pursuant to this chapter shall constitute a quorum at any meeting thereof, and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. Action may be taken by any committee, without a meeting by a writing or writings signed by all of its members. Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Directors and the rules prescribed by this Code of Regulations and shall keep a written record of all action taken by it. CHAPTER V OFFICERS 5.01 OFFICERS This Corporation may have a Chairman of the Board, a Chairman of the Executive Committee and shall have a President (all of whom shall be Directors), a Secretary, and a Treasurer. The Corporation may also have one or more Vice Presidents and Vice Chairmen and such other officers and assistant officers as the Directors may deem necessary. By designating a person to serve as an officer of the Corporation, the Directors shall be deemed to have considered such office necessary and to have established such office in accordance with this Section. 5.02 ELECTION, TERM AND QUALIFICATION The officers shall be elected at the annual meeting of the Board of Directors, or as soon thereafter as possible. Each such officer shall serve until the next annual meeting of the Board of Directors and until his successor is elected, or until his death, resignation or removal. 5.03 RESIGNATION An officer may resign at any time by giving notice to the board of Directors, the President or the Secretary. Such notice shall be effective when received by the person or persons to whom directed, unless some other time is specified therein. 5.04 REMOVAL Any officer may be removed, with or without cause by the Board of Directors without prejudice to the contract rights of such officer. The election of an officer for a given term and the provisions of this Code of Regulations with respect to term of office shall not be deemed to create contract rights. 5.05 VACANCY The board of Directors may fill any vacancy in any office occurring by whatever reason. 5.06 AUTHORITY AND DUTIES OF OFFICERS The President shall be the chief executive officer of the Corporation. Subject to the foregoing, the officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, subject always to the directions of the Board of Directors, or as may be specified from time to time by the Board of Directors regardless of such authority and duties are customarily incident to such office. Unless otherwise provided by the Board of Directors, if the Corporation has a Vice Chairman of the Board his sole duty shall be to preside at meetings in the absence of the Chairman of the Board. 5.07 COMPENSATION The Board of Directors may, irrespective of any personal interest of any of them, establish reasonable compensation of officers, which may include profit-sharing, pension, disability and death benefits, for services and may provide for reimbursement for expenses incurred by any officer of the Corporation in the discharge of his duties. CHAPTER VI INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES 6.01 COSTS INCURRED (i) Unless expressly provided to the contrary in the Articles of Incorporation, this Code of Regulations, or the general corporation law of Ohio, the Corporation may indemnify or agree to indemnify a director, officer, or employee, or a former director, officer, or employee, or any person who is serving or has served at its request as a director, officer or employee of another corporation against expenses actually and necessarily incurred by him in connection with the defense of any pending or threatened action, suit or proceeding, criminal or civil, to which he is or may be made a party by reason of being or having such director, officer, or employee provided (a) he is adjudicated or determined not to have been negligent or guilty of misconduct in the performance of his duty to the corporation of which he is a director, officer or employee; (b) he is determined to have acted in "good faith" in what he reasonably believed to be the best interest of such corporation; and (c) is any matter the subject of a criminal action, suit or proceeding, he is determined to have had no reasonable cause to believe that his conduct was unlawful. The determination as to (b) and (c) and, in the absence of an adjudication as to (a) shall be made by the directors of the indemnifying corporation acting at a meeting at which a quorum consisting of directors who are not parties to or threatened with any such action, suit or proceeding is present. Any director who is a party to or threatened with any such action, suit or proceeding shall not be qualified to vote and, if for this reason a quorum of directors cannot be obtained to vote on such indemnification, no indemnification shall be made except in accordance with Section (2) (i) or paragraph 6.02. (ii) A corporation, pursuant to its articles, its regulations, or any agreement authorized or a resolution adopted by the shareholders at a meeting held for such purpose by the affirmative vote of the holders of shares entitling them to exercise a majority of the voting power of the corporation on such proposal or authorized or adopted without a meeting by the written consent of the holders of shares entitling them to exercise two-thirds of the voting power on such proposal, may indemnify or agree to indemnify such director, officer, or employee against expenses, judgments, decrees, fines, penalties, or amounts paid in settlement in connection with the defense of any pending or threatened action, suit or proceeding, criminal or civil, to which he is or may be made party by reason of being or having been such director, officer, or employee, provided a determination is made by the directors in the manner set forth in Section (i) of this section or is made by or in accordance with a method established by the articles, the regulations, such agreement, or such resolution (a) that such director, officer, or employee was not, and has not been adjudicated to have been, negligent or guilty of misconduct in the performance of his duty to the corporation of which he is a director, officer, or employee, (b) that he acted in good faith in what he reasonably believed to be the best interest of such corporation, and (c) that in any matter the subject of a criminal action, suit or proceeding, he had no reasonable cause to believe that his conduct was unlawful. 6.02 N0N-EXCLUSIVE The foregoing right of indemnification shall not be deemed exclusive and shall be in addition to any rights to which any Director, officer, or employee, or former Director, officer, or employee may otherwise be entitled as a matter of law or e1uity and is not in restriction or Limitation of any other privilege or power which the Corporation may have with respect to the indemnification or reimbursement of Directors, officers, or employees under the Articles of Incorporation, the Code of Regulations, any agreement, any insurance purchased by the Corporation, vote of the shareholders or otherwise. 6.03 SUCCESSORS All rights of indemnification shall insure to the benefit of the heirs, executors or administrators of each such Director, officer, or employee, or any other person who is serving or has served at its request as a Director, officer, or employee of another corporation. CHAPTER VII AGENDA 7.01 AGENDA FOR MEETING OF SHAREHOLDERS a) Call meeting to order. b) Selection of Chairman and/or Secretary. c) Proof of notice of meeting. d) Roll call including filing of proxies with Secretary. e) Upon demand, appointment of inspectors of election. f) Reading and disposition of previously unapproved minutes. g) Reports of officers and Committees. h) If an annual meeting, or special meeting called for that purpose, election of Directors. i) Unfinished business. j) New business. k) Adjournment. 7.02 AGENDA FOR MEETING OF DIRECTORS a) Call to order. b) Proof of notice of meeting. c) Roll Call. d) Reading and disposition of previously unapproved minutes. e) Consideration in sequence of all matters set forth in the call for written notice of meeting. f) Reports of officers and committees. g) Unfinished business. h) New business. i) Adjournment. CHAPTER VII EMERGENCY REGULATIONS 8.01 SPECIAL RULES IN THE EVENT OF EMERGENCY The following special rules shall be applicable when the Governor of Ohio or any other person lawfully exercising the power and discharging the duties of the office of the Governor of Ohio, proclaims that an attack on the United States or any nuclear, atomic, or other disaster has caused an emergency. Said rules are as follows: 1) Meetings of the Directors may be called by an officer or Director. 2) Notice of the time and place of each meeting of the Directors shall be given to such of the Directors as it may be feasible to reach at the time and by such means of communication, written or oral, personal or mass, as may be practicable at the time. 3) The Director of Directors present at any meeting of the Directors which has been duly called and notice of which has been duly given shall constitute a quorum of such meeting, and, in the absence of one or more of the Directors, the Director or Directors present may appoint one or more of the officers of the Corporation Directors for such meeting. 4) In the event that none of the Directors attend a meeting of the Directors which has been duly called the notice of which has been duly given, the officers of the corporation who are present, not exceeding three, in order of rank, shall be Directors for such meeting, shall constitute a quorum for such meeting, and may appoint one or more of the other officers of the corporation Directors for such meeting. 5) If the chief executive officer dies, is missing, or for any other reason is temporarily or permanently incapable of discharging the duties of his office, the next ranking officer who is available shall assume the duties and authority of the officer of such deceased, missing, or incapacitated chief executive officer until such time as the Directors shall otherwise order. 6) The offices of Secretary and Treasurer shall be deemed to be of equal rank and, within the same office and as between the offices of Secretary and Treasurer, rank shall be determined by priority in time of the first election to the office or, if two or more persons shall have been first elected to the office at the same time, by seniority in age. CHAPTER IX MISCELLANEOUS 9.01 SEAL If the Board of Directors shall so order, the Corporation shall have a Seal, which shall be circular inform and mounted upon a metal die. About the upper periphery shall appear the name of the Corporation and about the lower periphery the word "Ohio". In the center of the Seal shall appear the words "Corporate Seal". The failure to affix the Seal though ordered by the Board of Directors shall in no event affect the validity of any instrument. 9.02 ENDORSEMENT OF STOCK CERTIFICATES Unless otherwise ordered by the Board of Directors, any share or shares of stock issued by any corporation and owned by the Corporation (including reacquired shares of stock of the Corporation) may, for sale or transfer, be endorsed in the name of the Corporation by the President or one of the vice presidents and attested by the Secretary or an Assistant Secretary, either with or without affixing thereto the corporate Seal. 9.03 VOTING UPON SHARES HELD BY THE CORPORATION Unless otherwise ordered by the Board of Directors, the President in person or by proxy or proxies appointed by him shall have full power and authority on behalf of the Corporation to vote, act and consent with respect to any shares issued by other corporations which the Corporation may own, which may be held in the Corporation's name or as to which the Corporation may otherwise have the right to vote, act or consent. 9.04 DEPOSITS All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such depositories as the Board of Directors may select. 9.05 CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation and in such manner as the Board of Directors may determine. CHAPTER X AMENDMENTS 10.01 AMENDMENT OF CODE OF REGULATIONS The Code of Regulations may be amended or repealed and new amendments may be adopted by the affirmative vote of the holders of shares entitling them to exercise of majority of the voting power of the Corporation, or by action by written consent of a like number of shareholders. CHAPTER XI CONSISTENCY 11.01 CONSISTENCY WITH ARTICLES OF INCORPORATION If any provision of these regulations shall be inconsistent with the Corporation's Articles of Incorporation (and as they may be amended from time to time), the Articles of Incorporation shall govern. CHAPTER XII HEADINGS 12.01 SECTION HEADINGS The headings contained in this Code of Regulations are for reference purposes only and shall not be construed to be part of and/or shall not affect in any way the meaning or interpretation of this Code of Regulations. EX-3.65 29 a2079698zex-3_65.txt EXHIBIT 3.65 EXHIBIT 3.65 [SEAL] CERTIFICATE OF INCORPORATION OF ALLIED TRANSPORTATION FORWARDING, INC. * * * * * 1. The name of the corporation is ALLIED TRANSPORTATION FORWARDING, INC. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is One Thousand (1,000) and the par value of each of such shares is Ten Cents ($.10) amounting in the aggregate to One Hundred Dollars ($100.00). 5A. The name and mailing address of each incorporator is as follows: NAME MAILING ADDRESS Robert J. Henry 2120 South 25th Avenue Broadview, Illinois 60153 5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows: NAME MAILING ADDRESS T. J. Lavin, Jr. 2120 S. 25th Avenue Broadview, IL 60153 William H. Whalen, Jr. 2120 S. 25th Avenue Broadview, IL 60153 Sidney Epstein 2120 S. 25th Avenue Broadview, IL 60153 Peter P. Mazzetti 2120 S. 25th Avenue Broadview, IL 60153 Frank W. Borta 2120 S. 25th Avenue Broadview, IL 60153 6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statue, the board of directors is expressly authorized to make, alter or repeal the by-laws of the corporation. 8. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation. 9. (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason or the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) judgments, fines and amounts paid in settlement actually and reasonably incurred by him, in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. (b) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of the Corporation, and is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and expect that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in sections (a) and (b), or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under section (a) and (b) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in sections (a) and (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtain- able, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. (e) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article. (f) The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (g) The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article. (h) For purposes of this Bylaw, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agent, so that any person who is or was a director, officer, employee or agent of such constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Bylaw with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this Bylaw, references to 'other enterprises' shall include employee benefit plans, references to 'fines' shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to 'serving at the request of the corporation' shall include any service as a director, officer, employee, or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner 'not opposed to the best interests of the corporation' as referred to in this Bylaw. 10. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true, and accordingly have hereunto set my hand this 23rd day of September, 1985. /s/ Robert J. Henry ---------------------------- Robert J. Henry [SEAL] EX-3.66 30 a2079698zex-3_66.txt EX-3.66 EXHIBIT 3.66 * * * * * BY-LAWS * * * * * ARTICLE I OFFICES Section 1. The registered office shall be in the City of Wilmington, Country of New Castle, State of Delaware. Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the board of directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. All meetings of the stockholders for the election of directors shall be held in the City of Broadview, State of Illinois, at such place as may be fixed from time to time by the board of directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the board of directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held at such date and time in each year as may be designated from time to time by the Board of Directors. Section 3. Written notice of the annual meeting stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. - 1 - Section 4. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation Issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting, to each stockholder entitled to vote at such meeting. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of one-fourth of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in - 2 - person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 10. Unless otherwise provided in the certificate of incorporation each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period. Section 11. Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all share entitled to vote thereon where present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. - 3 - ARTICLE III DIRECTORS Section 1. The number of directors which shall constitute the whole board shall be not less than three nor more than twenty. The first board shall consist of five directors. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the board of directors or by the stockholders at the annual meeting. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders. Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. Section 3. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders. MEETINGS OF THE BOARD OF DIRECTORS Section 4. The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 5. The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place - 4 - of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors. Section 6. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board. Section 7. Special meetings of the board may be called by the president on two days' notice to each director, either personally or by mail or by telegram; special meetings shall be called by the president or secretary in like manner and on like notice on the written request of two directors unless the board consists of only one director; in which case special meetings shall be called by the president or secretary in like manner and on like notice on written request of the sole director. Section 8. At all meetings of the board one-third of the directors then in office shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the board of directors the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 9. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all members of the board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee. Section 10. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the board of directors, or any committee designated by the board of directors, may participate in a meeting of - 5 - the board of directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. COMMITTEES OF DIRECTORS Section 11. The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the board of directors, shall have and may exercise all the powers and authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the by-laws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Section 12. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. - 6 - COMPENSATION OF DIRECTORS Section 13. The board of directors shall serve without compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors. REMOVAL OF DIRECTORS Section 14. Unless otherwise restricted by the certificate of incorporation or bylaw, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of shares entitled to vote at an election of directors. ARTICLE IV NOTICES Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these by-laws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder, at his address as it appears on the records of the corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to directors may also be given by telegram. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section 1. The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice-president, a secretary and a treasurer. The board of directors may also choose additional vice-presidents, and one or more - 7 - assistant secretaries and assistant treasures. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide. Section 2. The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, one or more vice-presidents, a secretary and a treasurer. Section 3. The board of directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board. Section 4. The salaries of all officers and agents of the corporation shall be fixed by the board of directors. Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors may be removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation shall be filled by the board of directors. THE PRESIDENT Section 6. The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation and shall see that all orders and resolutions of the board of directors are carried into effect. Section 7. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. - 8 - THE VICE-PRESIDENTS Section 8. In the absence of the president or in the event of his inability or refusal to act, the vice-president (or in the event there be more than one vice-president, the vice-presidents in the order designated by the directors, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice-presidents shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. THE SECRETARY AND ASSISTANT SECRETARY Section 9. The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors or president, under whose supervision he shall be. He shall have custody of the corporate seal of the corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his signature. Section 10. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. - 9 - THE TREASURER AND ASSISTANT TREASURERS Section 11. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. Section 12. He shall disburse the funds of the corporation as may be ordered by the board of directors, taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at its regular meetings, or when the board of directors so requires, an account of all his transactions as treasurer and of the financial condition of the corporation. Section 13. If required by the board of directors, he shall give the corporation a bond (which shall be renewed every six years) In such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. Section 14. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors (or if there be no such determination, then in the order of their election), shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the board of directors may from time to time prescribe. ARTICLE VI CERTIFICATE OF STOCK Section 1. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by, the chairman or vice-chairman of the board of directors, or the president or a vice-president and the - 10 - treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation, certifying the number of shares owned by him in the corporation. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor, and the amount paid thereon shall be specified. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualification, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 2. Any of or all the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. LOST CERTIFICATES Section 3. The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock - 11 - to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen or destroyed. TRANSFER OF STOCK Section 4. Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. FIXING RECORD DATE Section 5. In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or the express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other awful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meetings: provided, however, that the board of directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS Section 6. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, - 12 - and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interests in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII GENERAL PROVISIONS DIVIDENDS Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conductive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. ANNUAL STATEMENT Section 3. The board of directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation. CHECKS Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate. - 13 - FISCAL YEAR Section 5. The fiscal year of the corporation shall be the calendar year, unless otherwise fixed by resolution of the board of directors. SEAL Section 6. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. INDEMNIFICATION Section 7. The corporation shall indemnity its officers, directors, employees and agents to the extent permitted by the General Corporation Law of Delaware. ARTICLE VII AMENDMENTS Section 1. These by-laws may be altered, amended or repealed or new by-laws may be adopted by the stockholders or by the board of directors, when such power is conferred upon the board of directors by the certificate of incorporation at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. If the power to adopt, amend or repeal by-laws is conferred upon the board of directors by the certificate of incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal by-laws. - 14 - EX-5.1 31 a2079698zex-5_1.txt EXHIBIT 5.1 Exhibit 5.1 May 22, 2002 North American Van Lines, Inc. Allied Transportation Forwarding, Inc. Allied Freight Forwarding, Inc. National Association of Independent Truckers, LLC Allied International N.A., Inc. Van Guard Insurance Agency, Inc. Allied Van Lines, Inc. 215 West Diehl Road Allied Van Lines Terminal Company Naperville, Illinois 60563 A Relocation Solutions Management Company Naperville, Federal Traffic Service, Inc. CRS Acquisition Corp Fleet Insurance Management, Inc. CRS Title Agency, Inc. FrontRunner Worldwide, Inc. ProSource Properties, Ltd. Global Van Lines, Inc. SIRVA Relocation LLC Great Falls North American, Inc. 6070 Parkland Drive Meridian Mobility Resources, Inc. Mayfield Heights, Ohio 44124 NACAL, Inc. NAVTRANS International Freight Corporate Transfer Service, Inc. Forwarding, Inc. 3300 Fernbrook Lane North North American Logistics, Ltd. Suite 300 North American Van Lines of Texas, Inc. Plymouth, Minnesota 55447 Relocation Management Systems, Inc. StorEverything, Inc. U.S. Relocation Services, Inc. 5001 U.S. Highway 30 West 1801 California, Suite 2740 P.O. Box 988 Denver, Colorado 80202 Ft. Wayne, Indiana 46801-0988
Registration Statement on Form S-4 of North American Van Lines, Inc. and the Note Guarantors Referred to Therein (REGISTRATION NO. 333-96233) Ladies and Gentlemen: We have acted as special counsel to North American Van Lines, Inc., a Delaware corporation (the "Company") and the Note Guarantors (as defined herein) in connection with the preparation and filing with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-4 (as amended to the date hereof, the "Registration Statement"), which includes a form of Prospectus (the "Prospectus") relating to the proposed exchange by the Company of $150,000,000 aggregate principal amount of the Company's 13 3/8% Senior Subordinated Notes Due 2009 (the "New Notes"), which are to be registered under the Act pursuant to the Registration Statement, in exchange for an equal principal amount of its outstanding 13 3/8% Senior Subordinated Notes Due 2009 (the "Existing Notes"). The New Notes are to be issued pursuant to the Indenture dated as of November 19, 1999 (the "Indenture"), among the Company, State Street Bank and Trust Company (the "Trustee") and Allied Freight Forwarding, Inc., Allied International 1 N.A., Inc., Allied Van Lines, Inc., Allied Van Lines Terminal Company, A Relocation Solutions Management Company, Federal Traffic Service, Inc. (formerly known as North American Distribution Systems, Inc.), Fleet Insurance Management, Inc., FrontRunner Worldwide, Inc., Great Falls North American, Inc., NACAL, Inc., NAVTRANS International Freight Forwarding, Inc., North American Logistics, Ltd., North American Van Lines of Texas, Inc., Relocation Management Systems, Inc. and Vanguard Insurance Agency, Inc. (together with Meridian Mobility Resources, Inc., the "Note Guarantors"). The obligations of the Company pursuant to the New Notes are to be guaranteed by the Note Guarantors pursuant to and as set forth in the Indenture (such guarantees, collectively, the "Guarantees"). In so acting, we have examined and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of such corporate and limited liability company records, documents, certificates and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below. In all such examinations, we have assumed the legal capacity of all natural persons executing documents, the genuineness of all signatures on original or certified copies, the authenticity of all original or certified copies and the conformity to original or certified documents of all copies submitted to us as conformed or reproduction copies. We have relied as to factual matters upon, and have assumed the accuracy of, representations, statements and certificates of or from public officials and of or from officers and representatives of the Company, the Note Guarantors and others. With your permission, for purposes of the opinion expressed herein, we have assumed (i) that the Trustee is and has been duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (ii) that the Trustee had and has the power and authority to enter into and perform, and has duly authorized, executed and delivered, the Indenture, (iii) that the Indenture is valid, binding and enforceable with respect to the Trustee, (iv) the New Notes will be duly authenticated by the Trustee in the manner provided in each Indenture and (v) as being correct the opinions expressed in the opinion letter of Ralph A. Ford, Esq., Senior Vice President--General Counsel of the Company and in the opinion letters of Crowley, Haughey, Hanson, Toole & Dietrich P.L.L.P., Allen Matkins Leck Gamble & Mallory LLP, Jackson Walker LLP, and Leonard, Street and Deinard Professional Association, as to certain matters of Montana, California, Texas and Minnesota law, respectively, of even date herewith, addressed to each of you and to us. Based on the foregoing, and subject to the further qualifications set forth below, we are of the opinion that: Upon the execution and issuance of the New Notes by the Company and authentication of the New Notes by the Trustee in accordance with the Indenture and delivery of the New Notes against exchange therefor of the Existing Notes pursuant to the exchange offer described in the Registration Statement, (1) the New Notes will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, and (2) the Guarantee of each Note Guarantor will constitute the valid and binding obligation of such Note Guarantor, enforceable against such Note Guarantor in accordance with its terms. 2 The foregoing opinion is limited by and subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization or moratorium laws or other similar laws relating to or affecting enforcement of creditors' rights or remedies generally and (ii) general principles of equity (whether such principles are considered in a proceeding at law or equity), including the discretion of the court before which any proceeding may be brought, concepts of good faith, reasonableness and fair dealing, and standards of materiality. We express no opinion as to the effect of any Federal or state laws regarding fraudulent transfers or conveyances. We express no opinion as to the laws of any jurisdiction other than the Federal laws of the United States and the laws of the State of New York. We consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the heading "Legal Matters" in the Prospectus. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder. Very truly yours, /s/ Debevoise & Plimpton ------------------------ Debevoise & Plimpton 3 EX-10.20 32 a2079698zex-10_20.txt EXHIBIT 10.20 Exhibit 10.20 FOURTH AMENDMENT FOURTH AMENDMENT, dated as of March 19, 2002 (this "AMENDMENT"), to the Credit Agreement, dated as of November 19, 1999 (as amended, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"), among NORTH AMERICAN VAN LINES, INC., a Delaware corporation (the "PARENT BORROWER"), the Foreign Subsidiary Borrowers (as defined in the Credit Agreement) from time to time parties to the Credit Agreement, the several banks and other financial institutions from time to time parties to the Credit Agreement (the "LENDERS"), THE BANK OF NEW YORK, as documentation agent, BANC OF AMERICA SECURITIES LLC, as syndication agent, and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a New York banking corporation, as collateral agent and administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"). W I T N E S S E T H : - - - - - - - - - - WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and have made, certain loans and other extensions of credit to the Parent Borrower; and WHEREAS, the Parent Borrower has requested that the Lenders agree to amend certain provisions of the Credit Agreement, upon the terms and conditions contained herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. SECTION 2. AMENDMENT TO SUBSECTION 1.1 (DEFINED TERMS). Subsection 1.1 of the Credit Agreement is hereby amended by inserting the following new definitions in the appropriate alphabetical order: "NAIT": National Association of Independent Truckers, Inc., a Missouri corporation. "NAIT BUSINESS": the business of NAIT and certain affiliated Persons, consisting primarily of the marketing, processing and administration of certain occupational accident, workers compensation and medical insurance policies to and for van line drivers, motor carriers and other Persons (including participants in NAIT's membership programs) and providing certain affiliation services for the benefit of participants in NAIT's membership programs. SECTION 3. AMENDMENT TO SUBSECTION 8.10 (LIMITATIONS ON CERTAIN ACQUISITIONS). Subsection 8.10 of the Credit Agreement is hereby amended by (i) deleting the word "or" at the end of paragraph (c) thereof, (ii) inserting the word "or" at the end of paragraph (d) thereof and (iii) inserting the following new paragraph (e) immediately after paragraph (d) thereof: (e) such acquisition is an acquisition of the NAIT Business; PROVIDED that (i) the portion of the purchase price for such acquisition paid in cash shall not exceed $35,000,000 (excluding post-closing purchase price adjustments) and (ii) the cash portion of the purchase price for such acquisition shall be funded (A) with available cash including a $10,500,000 dividend from TransGuard to the Parent Borrower and (B) with not less than $20,000,000 of proceeds of equity contributions to the Parent Borrower from CD&R Fund V and/or investors arranged by CD&R. SECTION 4. CONDITIONS TO EFFECTIVENESS. This Amendment shall become effective as of the date first written above (the "AMENDMENT EFFECTIVE DATE") upon the receipt by the Administrative Agent of (i) this Amendment, executed by the Required Lenders and the Parent Borrower and (ii) the attached Acknowledgment and Consent, executed by each Guarantor. SECTION 5. REPRESENTATIONS AND WARRANTIES. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Parent Borrower hereby represents and warrants to the Administrative Agent and the Lenders that the representations and warranties made by the Parent Borrower in Section 5 of the Credit Agreement are true and correct in all material respects on and as of the Amendment Effective Date, before and after giving effect to the effectiveness of this Amendment, as if made on and as of the Amendment Effective Date, except to the extent such representations and warranties expressly relate to a specific earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date. SECTION 6. PAYMENT OF EXPENSES. The Parent Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent. SECTION 7. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. On and after the Amendment Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents. Except as expressly amended herein, all of the provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force and effect in accordance with the terms thereof and are hereby in all respects ratified and confirmed. SECTION 8. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 9. COUNTERPARTS. This Amendment may be executed by the parties hereto in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Amendment signed by all the parties shall be lodged with the Parent Borrower and the Administrative Agent. SECTION 10. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and inure to the benefit of the Parent Borrower and its successors and assigns, and upon the Administrative Agent and the Lenders and their successors and assigns. The execution and delivery of this Amendment by any Lender prior to the Amendment Effective Date shall be binding upon its successors and assigns and shall be effective as to any loans or commitments assigned to it after such execution and delivery. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the day and year first above written. NORTH AMERICAN VAN LINES, INC. By: /s/ Ralph A. Ford -------------------------- Name: Ralph A. Ford Title: Secretary JPMORGAN CHASE BANK, as Administrative Agent and as a Lender By: /s/ William J. Caggiano -------------------------- Name: William L. Caggiano Title: Managing Director ARCHIMEDES FUNDING II, LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski -------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST ARCHIMEDES FUNDING III, LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski -------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST ARCHIMEDES FUNDING IV (CAYMAN), LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski -------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST Bank of America ----------------------------- Name of Lender By: /s/ W. Thomas Barnett -------------------------- Name: W. Thomas Barnett Title: Managing Director The Bank of New York -------------------- Name of Lender By: /s/ Maurice A. Campbell ----------------------- Name: MAURICE A. CAMPBELL Title: ASSISTANT VICE PRESIDENT BANK OF TOKYO-MITSUBISHI TRUST COMPANY -------------------------------------- Name of Lender By: /s/ Eric Planey ------------------------- Name: Eric Planey Title: Assistant Vice President Bankers Trust Company --------------------- Name of Lender By: /s/ Marguerite Sutton ------------------------- Name: Marguerite Sutton Title: Vice President Carlyle High Yield Partners III, Ltd. ------------------------------------- Name of Lender By: /s/ Linda Pace ------------------------- Name: LINDA PACE Title: PRINCIPAL Clydesdale CLO 2001-1, Ltd. --------------------------- Name of Lender By: Nomura Corporate Research and Asset Management Inc. as Collateral Manager By: /s/ Elizabeth Maclean ------------------------- Name: Elizabeth Maclean Title: Vice President COPERNICUS CDO EURO-I B.V. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski ------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST DEBT STRATEGIES FUND, INC. By: /s/ Anthony Heyman ------------------------- Anthony Heyman AUTHORIZED SIGNATORY Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO I, LTD. By: /s/ John Thacker ------------------------- Name: John Thacker Title: Chief Credit Officer Denali Capital LLC, managing member of DC Funding Partners, portfolio manager for DENALI CAPITAL CLO II, LTD., or an affiliate By: /s/ John Thacker ------------------------- Name: John Thacker Title: Chief Credit Officer Heller Financial Inc. --------------------- Name of Lender By: /s/ Robert Kadlick ------------------------- Name: Robert Kadlick Title: Duty Authorized Signatory Indosuez Capital Funding IV, L.P., By: RBC Leveraged Capital as Portfolio Advisor By: /s/ Melissa Marano ------------------------- Name: Melissa Marano Title: Director KZH ING-2 LLC. as a Lender By: /s/ Joyce Fraser-Bryant ---------------------------- Name: JOYCE FRASER-BRYANT Title: AUTHORIZED AGENT Longhorn CDO (Cayman) LTD By: Merrill Lynch Investment Managers, L.P. as Investment Advisor By: /s/ Anthony Heyman ------------------------- Anthony Heyman AUTHORIZED SIGNATORY MASTER SENIOR FLOATING RATE TRUST By: /s/ Anthony Heyman ------------------------- Anthony Heyman AUTHORIZED SIGNATORY MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By: /s/ Anthony Heyman ------------------------- Anthony Heyman AUTHORIZED SIGNATORY National City Bank of Indiana ----------------------------- Name of Lender By: /s/ Mark A. Minnick -------------------------- Name: Mark A. Minnick Title: Senior Vice President Nomura Bond & Loan Fund -------------------------- Name of Lender BY: UFJ TRUST COMPANY OF NEW YORK AS TRUSTEE BY: NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC. ATTORNEY IN FACT By: /s/ Elizabeth Maclean ---------------------------- Name: Elizabeth Maclean Title: Vice President NEMEAN CLO, LTD. BY: ING Capital Advisors LLC, as Investment Manager BY: /s/ Steven Gorski ---------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST The Bank of Nova Scotia -------------------------------- Name of Lender By: /s/ N. Bell ---------------------------- Name: N. BELL Title: ASSISTANT AGENT PPM SPYCLASS FUNDING TRUST By: /s/ Ann E. Morris ---------------------------- Name: ANN E. MORRIS Title: AUTHORIZED AGENT ORYX CLO, LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski ---------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST Textron Financial Corporation By: /s/ Matthew J. Colgan ---------------------------- Name: Matthew J. Colgan Title: Director ACKNOWLEDGMENT AND CONSENT Each of the undersigned corporations as guarantors under the Guarantee and Collateral Agreement, dated as of November 19, 1999, made by the undersigned corporations in favor of the Administrative Agent, for the benefit of the Lenders, hereby (a) consents to the transactions contemplated by this Amendment and (b) acknowledges and agrees that the guarantees (and grants of collateral security therefor) contained in such Guarantee and Collateral Agreement are, and shall remain, in full force and effect after giving effect to this Amendment. SIRVA, INC. (formerly known as Allied Worldwide, Inc.) By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Assistant Secretary FLEET INSURANCE MANAGEMENT, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Assistant Secretary FRONTRUNNER WORLDWIDE, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary GREAT FALLS NORTH AMERICAN, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary NACAL, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary NAVTRANS INTERNATIONAL FREIGHT FORWARDING, INC. By: /s/ Ralph A. Ford ---------------------------- Name: Ralph A. Ford Title: Vice President NORTH AMERICAN DISTRIBUTION SYSTEMS, INC. n/k/a FEDERAL TRAFFIC SERVICE, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary NORTH AMERICAN LOGISTICS, LTD. By: /s/ Ralph A. Ford ---------------------------- Name: Ralph A. Ford Title: Vice President NORTH AMERICAN VAN LINES OF TEXAS, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary RELOCATION MANAGEMENT SYSTEMS, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary A RELOCATION SOLUTIONS MANAGEMENT COMPANY By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary ALLIED FREIGHT FORWARDING, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary ALLIED VAN LINES, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary ALLIED INTERNATIONAL N.A., INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Vice President ALLIED VAN LINES TERMINAL COMPANY By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary VANGUARD INSURANCE AGENCY, INC. By: /s/ Robert J. Henry ---------------------------- Name: Robert J. Henry Title: Secretary EX-10.21 33 a2079698zex-10_21.txt EXHIBIT 10.21 EXHIBIT 10.21 EXECUTION COPY FIFTH AMENDMENT FIFTH AMENDMENT, dated as of April 30, 2002 (this "AMENDMENT"), to the Credit Agreement, dated as of November 19, 1999 (as amended, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"), among NORTH AMERICAN VAN LINES, INC., a Delaware corporation (the "PARENT BORROWER"), the Foreign Subsidiary Borrowers (as defined in the Credit Agreement) from time to time parties to the Credit Agreement, the several banks and other financial institutions from time to time parties to the Credit Agreement (the "LENDERS"), THE BANK OF NEW YORK, as documentation agent, BANC OF AMERICA SECURITIES LLC, as syndication agent, and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a New York banking corporation, as collateral agent and administrative agent for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"); and THIRD AMENDMENT to the Guarantee and Collateral Agreement (as defined in the Credit Agreement). W I T N E S S E T H : WHEREAS, the Parent Borrower and certain of the Parent Borrower's wholly owned subsidiaries propose to acquire (the "CRS ACQUISITION") substantially all of the assets of Cooperative Resource Services, Ltd. ("CRS") relating to the business of providing comprehensive relocation services, including the voting securities of certain of CRS's subsidiaries (collectively with CRS, the "TARGET") for approximately $65,000,000 (including fees and expenses of approximately $5,000,000, and excluding the pay-off of approximately $24,000,000 of indebtedness of the Target pursuant to the terms of the Acquisition Agreement, dated as of March 19, 2002 (as amended, supplemented or otherwise modified from time to time, the "ACQUISITION AGREEMENT"), among SIRVA, Inc., a Delaware corporation and the holding company parent of the Parent Borrower ("HOLDING"), SIRVA Acquisition Company, LLC, a Delaware limited liability company ("CRS Holding"), the Target and certain other parties; WHEREAS, in order to finance a portion of the purchase price of the CRS Acquisition, the Parent Borrower has requested that the Administrative Agent and the Lenders agree to amend the Credit Agreement in order to provide for an incremental increase of $50,000,000 in the Parent Borrower's existing Tranche B Term Loan facility (the "INCREMENTAL TRANCHE B TERM LOAN FACILITY"; the loans thereunder, the "INCREMENTAL TRANCHE B TERM LOANS"); WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and have made, certain loans and other extensions of credit to the Parent Borrower; and WHEREAS, the Parent Borrower has requested that the Lenders agree to amend certain provisions of the Credit Agreement and the Guarantee and Collateral Agreement, upon the terms and conditions contained herein; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. SECTION 2. AMENDMENTS TO SUBSECTION 1.1 (DEFINED TERMS). (a) The definitions of "Arrangers" and "Tranche B Term Loan" in subsection 1.1 of the Credit Agreement are hereby amended in their respective entireties to read as follows: "ARRANGERS": JPMorgan and BAS in their respective capacities as arrangers and as joint financial advisors. "TRANCHE B TERM LOAN": an Original Tranche B Term Loan or an Incremental Tranche B Term Loan, as the context shall require; collectively, the "TRANCHE B TERM LOANS". (b) The definition of "Indebtedness" in subsection 1.1 of the Credit Agreement is hereby amended by inserting at the end thereof the following new sentence: Notwithstanding the foregoing, in no event shall "Indebtedness" include (i) obligations of CRS Holding or any of its Subsidiaries to make payments under or with respect to mortgage notes payable in the ordinary course of business in connection with the provision of relocation services or (ii) such mortgage notes; PROVIDED that the aggregate principal amount of all such mortgage notes referred to in the foregoing clauses (i) and (ii) does not exceed $40,000,000 at any time outstanding. (c) Subsection 1.1 of the Credit Agreement is hereby amended by inserting the following new definitions in the appropriate alphabetical order: "CD&R FUND VI": Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by CD&R. "CMS": Cooperative Mortgage Services, Inc., an Ohio corporation. "CMS HOLDING": CMS Holding, LLC, a Delaware limited liability company. "CRS": Cooperative Resource Services Ltd., an Ohio limited liability company. "CRS ACQUISITION": the acquisition by CRS Holding and/or its Wholly Owned Subsidiaries of substantially all of the assets of CRS relating to the business of providing comprehensive relocation services, including the voting securities of certain of CRS's Subsidiaries. 2 "CRS HOLDING": SIRVA Acquisition Company, LLC, a Delaware limited liability company and Wholly Owned Subsidiary of the Parent Borrower. "EBITDA": for any period, Consolidated Net Income for such period adjusted to exclude the following items (without duplication) of income or expense to the extent that such items are included in the calculation of Consolidated Net Income: (a) Consolidated Interest Expense, (b) any non-cash expenses and charges (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), (c) total income tax expense, (d) depreciation expense, (e) the expense associated with amortization of intangible and other assets (including amortization or other expense recognition of any costs associated with asset write-ups in accordance with APB Nos. 16 and 17), (f) non-cash provisions for reserves for discontinued operations, (g) any extraordinary, unusual or non-recurring gains or losses or charges or credits, (h) any gain or loss associated with the sale or write-down of assets not in the ordinary course of business, (i) any income or loss accounted for by the equity method of accounting (except in the case of income to the extent of the amount of cash dividends or cash distributions paid to the Parent Borrower or any Subsidiary by the entity accounted for by the equity method of accounting), (j) up to the Available Adjustment in respect of any cash expenses for (i) the development and implementation of an e-commerce strategy and (ii) the development and implementation of new information technology and (k) for any period ending on or prior to December 31, 2002, any losses incurred by Moveline for such period and any costs incurred for such period in connection with the Moveline strategic initiatives identified by the Parent Borrower, PROVIDED that the amounts referred to in this clause (k) shall not exceed $25,000,000 in the aggregate. For the purposes of calculating EBITDA for any period of four consecutive fiscal quarters (each, a "REFERENCE PERIOD") pursuant to any determination of the Leverage Ratio, (x) if at any time during such Reference Period the Parent Borrower or any of its Subsidiaries shall have made any Material Disposition, the EBITDA for such Reference Period shall be reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the EBITDA (if negative) attributable thereto for such Reference Period any (y) if during such Reference Period the Parent Borrower or any of its Subsidiaries shall have made a Material Acquisition, EBITDA for such Reference Period shall be calculated after giving PRO FORMA effect thereto as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, "Material Acquisition" means any acquisition of property or series of related acquisitions of property that (A) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (B) involves the payment of consideration by the Parent Borrower and its Subsidiaries in excess of $1,000,000; and "Material Disposition" means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Parent Borrower or any of its Subsidiaries in excess of $1,000,000. 3 "INCREMENTAL TRANCHE B EFFECTIVE DATE": the Effective Date as defined in the Fifth Amendment dated as of April 30, 2002 to this Agreement. "INCREMENTAL TRANCHE B TERM LOAN": as defined in subsection 2.6(c). "JPMORGAN": J.P. Morgan Securities Inc. "ORIGINAL TRANCHE B TERM LOAN": as defined in subsection 2.6(b). SECTION 3. AMENDMENT TO SUBSECTION 2.6 (TERM LOANS). The first sentence of subsection 2.6 of the Credit Agreement is hereby amended in its entirety to read as follows: Subject to the terms and conditions hereof, each Term Loan Lender (a) made a term loan (a "TRANCHE A TERM LOAN") to the Parent Borrower on the Effective Date in an aggregate principal amount set forth opposite such Term Loan Lender's name in Schedule I under the heading "Tranche A Term Loan Commitment", (b) made a term loan (an "ORIGINAL TRANCHE B TERM LOAN") to the Parent Borrower on the Effective Date in an aggregate principal amount set forth opposite such Term Loan Lender's name in Schedule I under the heading "Tranche B Term Loan Commitment" and (c) severally agrees to make a term loan (an "INCREMENTAL TRANCHE B TERM LOAN") to the Parent Borrower on the Incremental Tranche B Effective Date in an aggregate principal amount set forth opposite such Term Loan Lender's name in Schedule A-1 under the heading "Incremental Tranche B Term Loan Commitment". SECTION 4. AMENDMENT TO SUBSECTION 2.8 (TRANCHE B TERM NOTES). Subsection 2.8 of the Credit Agreement is hereby amended in its entirety to read as follows: 2.8 TRANCHE B TERM NOTES. (a) The Parent Borrower agrees that, upon the request to the Administrative Agent by any Tranche B Term Loan Lender made on or prior to the Effective Date (or, in the case of any Incremental Tranche B Term Loan, on or prior to the Incremental Tranche B Effective Date) or in connection with any assignment of its Loan, in order to evidence such Term Loan Lender's Tranche B Term Loan, the Parent Borrower will execute and deliver to such Term Loan Lender one or more promissory notes substantially in the form of Exhibit A-3 (each, as amended, supplemented, replaced or otherwise modified from time to time, a "TRANCHE B TERM NOTE"), with appropriate insertions therein as to payee, date and principal amount, payable to the order of such Term Loan Lender and in an aggregate principal amount equal to the lesser of (i) the sum of (A) the amount set forth opposite such Term Loan Lender's name on Schedule I under the heading "Tranche B Term Loan Commitment" plus (B) the amount set forth opposite such Term Loan Lender's name on Schedule A-1 under the heading "Incremental Tranche B Term Loan Commitment" and (ii) the unpaid principal amount of the Tranche B Term Loans made by such Term Loan Lender. Each Tranche B Term Note shall (x) be dated the Effective Date (or, in the case of any Incremental Tranche B Term Loan, the Incremental Tranche B Effective Date), 4 (y) be payable as provided in subsection 2.8(b) and (z) provide for the payment of interest in accordance with subsection 4.1. (b) The aggregate Tranche B Term Loans of all the Term Loan Lenders shall be payable in 20 consecutive installments on the dates and in a principal amount equal to the amount set forth below (together with all accrued interest thereon) opposite the applicable installment date (or, if less, the aggregate amount of the Tranche B Term Loans then outstanding):
Dates Amount ----- ------ March 28, 2003 $ 540,945.99 June 27, 2003 $ 540,945.99 September 26, 2003 $ 540,945.99 December 26, 2003 $ 540,945.99 March 26, 2004 $ 540,945.99 June 25, 2004 $ 540,945.99 September 24, 2004 $ 540,945.99 December 24, 2004 $ 540,945.99 March 25, 2005 $ 540,945.99 June 24, 2005 $ 540,945.99 September 23, 2005 $ 540,945.99 December 30, 2005 $ 540,945.99 March 31, 2006 $ 19,937,723.60 June 30, 2006 $ 19,937,723.60 September 29, 2006 $ 19,937,723.60 December 29, 2006 $ 19,937,723.60 March 30, 2007 $ 30,911,199.38 June 29, 2007 $ 30,911,199.38 September 28, 2007 $ 30,911,199.38 Final Maturity Date $ 30,911,199.38
SECTION 5. AMENDMENT TO SUBSECTION 2.9 (PROCEDURE FOR TERM LOAN BORROWING). Subsection 2.9 of the Credit Agreement is hereby amended in its entirety to read as follows: 2.9 PROCEDURE FOR TERM LOAN BORROWING. The Parent Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to (a) 12:30 P.M., New York City time, at least three Business Days prior to the Effective Date (or, in the case of Incremental Tranche B Term Loans, the Incremental Tranche B Effective Date), if all or any part of the Term Loans are to be initially Eurocurrency Loans made in Dollars, (b) 11:00 A.M., London time, at least three Business Days prior to the Effective Date, if any part of the Tranche A Term Loans are to be initially Eurocurrency Loans made in any Designated Foreign Currency or (c) 12:30 P.M., New York City time, at least one Business Day prior to the Effective Date (or the Incremental Tranche B Effective Date, as the case may be), otherwise) requesting that the Term Loan Lenders make the Term Loans on the Effective Date (or the 5 Incremental Tranche B Effective Date, as the case may be) and specifying (i) the amount to be borrowed, (ii) whether the Term Loans are to be initially Eurocurrency Loans, ABR Loans or a combination thereof, and (iii) if the Term Loans are to be entirely or partly Eurocurrency Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Periods therefor and, if the Eurocurrency Loans in respect of any part of the borrowing of Tranche A Term Loans are to be made entirely or partly in any Designated Foreign Currency, the Designated Foreign Currency thereof. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Loan Lender thereof. Each Term Loan Lender will make the amount of its PRO RATA share of the Term Loans available to the Administrative Agent for the account of the Parent Borrower at the office of the Administrative Agent specified in subsection 11.2 prior to 10.00 A.M., New York City time, or at such other office of the Administrative Agent or at such other time as to which the Administrative Agent shall notify such Term Loan Lender and the Parent Borrower reasonably in advance of the Effective Date (or the Incremental Tranche B Effective Date, as the case may be) with respect thereto, on the Effective Date (or the Incremental Tranche B Effective Date, as the case may be) in Dollars or the applicable Designated Foreign Currency and in funds immediately available to the Administrative Agent. The Administrative Agent shall on such date credit the account of the Parent Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Loan Lenders and in like funds as received by the Administrative Agent. SECTION 6. AMENDMENT TO SUBSECTION 4.10 (REQUIREMENTS OF LAW). Subsection 4.10 of the Credit Agreement is hereby amended by adding the phrase ", or with respect to the Incremental Tranche B Term Loans, the Incremental Tranche B Effective Date" immediately before the phrase "(or, if later, the date on which such Lender becomes a Lender)" in each place the latter phrase appears. SECTION 7. AMENDMENT TO SUBSECTION 4.11(b) (TAXES). Subsection 4.11 (b) is hereby amended by adding the phrase "(or, if later, with respect to the Incremental Tranche B Term Loans, the Incremental Tranche B Effective Date)" immediately after the phrase "after the date such Person becomes a Lender hereunder". SECTION 8. AMENDMENTS TO SUBSECTION 5.17 (PURPOSE OF LOANS). (a) Subsection 5.17 of the Credit Agreement is hereby amended by adding the phrase "(other than the Incremental Tranche B Term Loans)" immediately after the phrase "The proceeds of the Term Loans". (b) Subsection 5.17 of the Credit Agreement is hereby further amended by adding the following sentence to the end thereof: The proceeds of the Incremental Tranche B Term Loans shall be used by the Borrower to finance a portion of the purchase price of the CRS Acquisition, to pay certain transaction fees and expenses related to the CRS Acquisition (such 6 transaction fees and expenses not to exceed $5,500,000) and for general corporate purposes of the Parent Borrower and its Subsidiaries. SECTION 9. AMENDMENT TO SUBSECTION 7.4 (CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE). Subsection 7.4 of the Credit Agreement is hereby amended by adding the phrase ", or business of the same general type as conducted by CRS and its Subsidiaries on the Incremental Tranche B Effective Date" immediately after the phrase "on the Effective Date". SECTION 10. AMENDMENT TO SUBSECTION 7.9(a) (AFTER-ACQUIRED REAL PROPERTY AND FIXTURES). Subsection 7.9(a) of the Credit Agreement is hereby amended by adding the following language at the end of the first sentence thereof: ; and PROVIDED FURTHER that nothing in this paragraph (a) shall require the grant of a Lien of record in respect of any owned residential real property, fixtures, or related assets acquired by CRS Holding or any of its Subsidiaries in the ordinary course of business in connection with the provision of relocation services. SECTION 11. AMENDMENT TO SUBSECTION 7.10 (ACQUIRED SUBSIDIARIES; FURTHER SECURITY AND GUARANTEES). Each of subsection 7.10(a) and subsection 7.10(b) is hereby amended by adding the following language at the end of the first sentence thereof: ; PROVIDED that nothing in this paragraph shall require the execution of any documents or the taking of any actions to grant a Lien of record in respect of any owned residential real property, fixtures, or related assets acquired by CRS Holding or any of its Subsidiaries in the ordinary course of business in connection with the provision of relocation services. SECTION 12. AMENDMENT TO SUBSECTION 8.1(b) (FINANCIAL CONDITION COVENANTS). Subsection 8.1(b) of the Credit Agreement is hereby amended in its entirety to read as follows: (b) MAINTENANCE OF LEVERAGE RATIO. Permit, at the last day of any fiscal quarter ending during any test period set forth below, the Leverage Ratio to be greater than the ratio set forth opposite such test period below:
Test Period Ratio ----------- ----- December 29, 2001 - March 29, 2002 4.60 to 1.00 March 30, 2002 - June 28, 2002 4.60 to 1.00 June 29, 2002 - September 27, 2002 4.60 to 1.00 September 28, 2002 - December 27, 2002 4.35 to 1.00 December 28, 2002 - March 28, 2003 4.35 to 1.00 March 29, 2003 - June 27, 2003 4.60 to 1.00 June 28, 2003 - September 26, 2003 4.60 to 1.00 September 27, 2003 - December 26, 2003 3.85 to 1.00 December 27, 2003 - March 26, 2004 3.85 to 1.00 March 27, 2004 - June 25, 2004 3.95 to 1.00
7 June 26, 2004 - September 24, 2004 3.95 to 1.00 September 25, 2004 - December 31, 2004 3.35 to 1.00 January 1, 2005 and thereafter 3.00 to 1.00
PROVIDED that in the event that the Parent Borrower changes its fiscal year end to the last day of December, each of the foregoing test periods occurring after such change shall be deemed to commence on the first day of January, April, July or October, as applicable, and end on the last day of March, June, September or December, as applicable (e.g., the test period from December 29, 2001 through March 29, 2002 would become the period from January 1, 2002 through March 31, 2002). SECTION 13. AMENDMENT TO SUBSECTION 8.2 (LIMITATION ON INDEBTEDNESS). Subsection 8.2 of the Credit Agreement is hereby amended by (a) deleting the word "and" at the end of paragraph (p) thereof, (b) deleting the "." at the end of paragraph (q) thereof and substituting ";" in lieu thereof and (c) inserting the following new paragraphs (r) and (s) immediately after paragraph (q) thereof: (r) Indebtedness of the Parent Borrower, or of a Subsidiary of the Parent Borrower that is a Guarantor, in respect of subordinated seller notes in a principal amount not exceeding $15,000,000 in the aggregate at any time outstanding, issued to pay a portion of the purchase price of the CRS Acquisition and having subordination and other terms reasonably satisfactory to the Administrative Agent; and (s) Indebtedness of CRS Holding or any of its Subsidiaries incurred in connection with financing the acquisition of residential real property, fixtures or related assets by CRS Holding or any of its Subsidiaries in the ordinary course of business in connection with the provision of relocation services, not exceeding $20,000,000 in aggregate principal amount at any time outstanding. SECTION 14. AMENDMENT TO SUBSECTION 8.3 (LIMITATION ON LIENS). Subsection 8.3 of the Credit Agreement is hereby amended by (a) deleting the word "and" at the end of paragraph (r) thereof, (b) deleting the "." at the end of paragraph (s) thereof and substituting "; and" in lieu thereof and (c) inserting the following new paragraph (t) immediately after paragraph (s) thereof; (t) Liens on residential real property, fixtures and related assets acquired as contemplated by Section 8.2(s), securing Indebtedness permitted by Section 8.2(s). SECTION 15. AMENDMENT TO SUBSECTION 8.9 (LIMITATION ON INVESTMENTS, LOANS AND ADVANCES). Subsection 8.9 of the Credit Agreement is hereby amended by (a) deleting the word "and" at the end of paragraph (s) thereof, (b) deleting the "." at the end of paragraph (t) thereof and substituting "; and" in lieu thereof and (c) inserting the following new paragraph (u) immediately after paragraph (t) thereof: 8 (u) loans and advances made by CRS Holding or any of its Subsidiaries for the purpose of financing a portion of the purchase price for the acquisition of residential real estate, fixtures or related assets, PROVIDED that such loans and advances are made by CRS Holding or such Subsidiaries in the ordinary course of business in connection with the provision of relocation services. SECTION 16. AMENDMENTS TO SUBSECTION 8.10 (LIMITATIONS ON CERTAIN ACQUISITIONS). (a) Subsections 8.10(b) and 8.10(c)(ii) of the Credit Agreement are hereby amended by (i) deleting therefrom the words "Effective Date" and substituting in lieu thereof the words "Incremental Tranche B Effective Date" in each instance and (ii) adding to the end of each such subsection the phrase "; PROVIDED that any portion of the cash consideration for any such acquisition funded with the proceeds of any new equity contributed by CD&R Fund VI and/or investors arranged by CD&R shall not be included in the calculation of aggregate consideration hereunder". (b) Subsection 8.10 of the Credit Agreement is hereby amended by (i) deleting the word "or" at the end of paragraph (d) thereof, (ii) deleting the "." at the end of paragraph (e) thereof and substituting ";" in lieu thereof and (iii) inserting the following new paragraphs (f), (g) and (h) immediately after paragraph (e) thereof: (f) such acquisition is the CRS Acquisition, PROVIDED that (i) the aggregate consideration (including cash, contingent earn-out payments to the existing shareholders of CRS and any Indebtedness assumed by the Parent Borrower or any of its Subsidiaries in connection with such acquisition, but excluding any Indebtedness of CRS and its Subsidiaries repaid in connection therewith) does not exceed $65,500,000, (ii) the aggregate amount of Indebtedness of CRS and its Subsidiaries repaid in connection with such acquisition does not exceed $24,000,000, (iii) a portion of the purchase price for such acquisition shall be funded with not less than $36,500,000 of proceeds of equity contributions to Holding from CD&R Fund VI and/or investors arranged by CD&R (which proceeds shall have been contributed by Holding to the Parent Borrower as an equity contribution) and (iv) no Indebtedness shall be issued as part of the consideration for such acquisition other than the Indebtedness permitted by subsection 8.2(r); (g) such acquisition was expressly permitted by clause (b) of subsection 8.10 as in effect immediately prior to the Incremental Tranche B Effective Date and was consummated prior to such date; or (h) such acquisition was expressly permitted by clause (c) of subsection 8.10 as in effect immediately prior to the Incremental Tranche B Effective Date and was consummated prior to such date; SECTION 17. AMENDMENT TO SUBSECTION 8.16(a) (LIMITATION ON LINES OF BUSINESS; CREATION OF SUBSIDIARIES). Subsection 8.16(a) is hereby amended by inserting therein the phrase "or those in which CRS and its Subsidiaries are engaged on the Incremental Tranche B Effective Date," immediately prior to the phrase "or which are related thereto". 9 SECTION 18. AMENDMENT OF SUBSECTION 11.6 (SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS). Subsection 11.6(e) of the Credit Agreement is hereby amended in its entirety as follows: (e) Notwithstanding anything in this Agreement to the contrary, no assignment under subsection 11.6(c) of any rights or obligations under or in respect of the Loans or the Notes evidencing such Loans shall be effective unless and until the Administrative Agent shall have recorded the assignment pursuant to subsection 11.6(d). Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the Administrative Agent and the Parent Borrower), together with payment to the Administrative Agent of a registration and processing fee of $3,500 (which fee need not be paid in the case of any assignment to an affiliate of the assigning Lender or to an Approved Fund; and provided that in the case of contemporaneous assignments by a Lender to more than one fund managed by the same investment advisor (which funds are not then Lenders hereunder, affiliates thereof or Approved Funds), only a single fee of $3,500 shall be payable for all such contemporaneous assignments), the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give prompt notice of such acceptance and recordation to the Lenders and the Parent Borrower. On or prior to such effective date, the assigning Lender shall surrender any outstanding Notes held by it all or a portion of which are being assigned, and the Parent Borrower, at its own expense, shall, upon the request to the Administrative Agent by the assigning Lender or the Assignee, as applicable, execute and deliver (and cause the applicable Foreign Subsidiary Borrowers to execute and deliver) to the Administrative Agent (in exchange for the outstanding Notes of the assigning Lender) a new Revolving Credit Note, a Tranche A Term Note, one or more Tranche B Term Notes and/or a Swing Line Note, as the case may be, to the order of such Assignee in an amount equal to (i) in the case of a Revolving Credit Note, the lesser of (A) the amount of such Assignee's Revolving Credit Commitment and (B) the aggregate principal amount of all Revolving Credit Loans made by such Assignee, (ii) in the case of a Tranche A Term Note, the amount of such Assignee's Tranche A Term Loan, (iii) in the case of any Tranche B Term Notes, the amount of such Assignee's Tranche B Term Loans and (iv) in the case of a Swing Line Note, the lesser of (A) the Swing Line Commitment and (B) the aggregate principal amount of all Swing Line Loans made by such Assignee, in each case with respect to the relevant Loan, Swing Line Commitment, or Revolving Credit Commitment after giving effect to such Assignment and Acceptance and, if the assigning Lender has retained a Swing Line Commitment, Revolving Credit Commitment or Term Loan hereunder, a new Revolving Credit Note, a new Tranche A Term Note, one or more new Tranche B Term Notes and/or a new Swing Line Note, as the case may be, to the order of the assigning Lender in an amount equal to (i) in the case of a Revolving Credit Note, the lesser of (A) the amount of such Lender's Revolving Credit Commitment and (B) the aggregate principal amount of all Revolving Credit Loans made by such Lender, (ii) in the case of a Tranche A 10 Term Note, the amount of such Lender's Tranche A Term Loan, (iii) in the case of any Tranche B Term Notes, the amount of such Lender's Tranche B Term Loans and (iv) in the case of a Swing Line Note, the lesser of (A) the Swing Line Commitment and (B) the aggregate principal amount of all Swing Line Loans made by such Lender, in each case with respect to the relevant Loan, Swing Line Commitment or Revolving Credit Commitment after giving effect to such Assignment and Acceptance. Any such new Notes shall be dated the Effective Date (or, in the case of any Incremental Tranche B Term Loans, the Incremental Tranche B Effective Date) and shall otherwise be in the form of the Note replaced thereby. Any Notes surrendered by the assigning Lender shall be returned by the Administrative Agent to the Parent Borrower marked "cancelled". SECTION 19. SCHEDULE A-1. The Credit Agreement is hereby amended by adding as Schedule A-1 thereto the document attached to this Amendment as Schedule A-1. SECTION 20. AMENDMENT TO SUBSECTION 5.4.1 OF THE GUARANTEE AND COLLATERAL AGREEMENT (CAPITAL CONTRIBUTIONS TO THE PARENT BORROWER). Section 5.4.1 of the Guarantee and Collateral Agreement is hereby amended by deleting therefrom the words "all of such cash proceeds" and substituting in lieu thereof the words "all net cash proceeds thereof". SECTION 21. AMENDMENTS TO SUBSECTION 5.4.2 OF THE GUARANTEE AND COLLATERAL AGREEMENT (LIMITATION ON ACTIVITIES OF HOLDING). (a) The lead-in to subsection 5.4.2 of the Guarantee and Collateral Agreement is hereby amended by inserting the words ",Holding will not" at the end thereof. (b) Clause (j) of subsection 5.4.2(i) of the Guarantee and Collateral Agreement is hereby amended in its entirety to read as follows: (j) the making of loans to or other Investments in, or incurrence of Indebtedness to, its Subsidiaries (to the extent not otherwise prohibited by any of the Loan Documents) PROVIDED that the amount of loans to, Investments in or incurrence of Indebtedness to CMS and CMS Holding made or incurred after the Incremental Tranche B Effective Date shall not exceed of $1,000,000 in the aggregate at any time outstanding, (c) Subsection 5.4.2(ii) of the Guarantee and Collateral Agreement is hereby amended by (i) deleting clause (a) thereof in its entirety and substituting in lieu thereof the following: (a) liabilities or obligations imposed by operation of law or otherwise arising in connection with any activity permitted under the preceding clause (i); PROVIDED that any Indebtedness incurred as permitted by this clause (a) after the Incremental Tranche B Effective Date shall not exceed $1,000,000 in the aggregate at any time outstanding, (ii) deleting the word "and" at the end of clause (f) thereof and substituting "," in lieu thereof and (iii) inserting the following new clauses (h) and (i) immediately after clause (g) thereof: 11 (h) Guarantee Obligations of Holding in respect of subordinated seller notes permitted by subsection 8.2(r) of the Credit Agreement, provided that such Guarantee Obligations are subordinated to Holding's Guarantee to the same extent as the obligations of the issuer of such seller subordinated notes thereunder are subordinated to such issuer's obligations under the Credit Agreement or the Guarantee and Collateral Agreement, as applicable and (i) Guarantee Obligations of Holding (A) in respect of Indebtedness of CMS under arrangements in effect on the Incremental Tranche B Effective Date among CMS and one or more lenders relating to the financing by any such lender or lenders of mortgage loans originated or otherwise acquired by CMS in the ordinary course of business or (B) in respect of any amendments, refinancings, refundings, renewals, replacements or extensions of such Indebtedness; PROVIDED that the terms and conditions of the Indebtedness resulting from any such amendment, refinancing, refunding, renewal, replacement or extension (and any Guarantee Obligation of Holding in respect thereof) shall be reasonably satisfactory in form and substance to the Administrative Agent if the terms and conditions of such amended or new Indebtedness, as applicable (and the related Guarantee Obligation of Holding), are, taken as a whole, materially worse than the terms and conditions of the Indebtedness and any Guarantee Obligation of Holding in respect thereof as in effect prior to such amendment, refinancing, refunding, renewal, replacement or extension, taken as a whole (it being understood and agreed that, in the event of any such amendment, refinancing, refunding, renewal, replacement or extension that has the effect of replacing the sole or lead lender, as applicable, or materially modifying the terms of such Indebtedness, Holdings shall provide written notice to the Administrative Agent describing such event no later than 10 Business Days prior to the effectiveness of such event); (d) Subsection 5.4.2(ix) of the Guarantee and Collateral Agreement is hereby amended by adding to the end thereof the phrase "and other than the ownership of shares of Capital Stock of CMS and CMS Holding, or otherwise as contemplated by or in connection with any activity permitted under the preceding clause (i) of this subsection 5.4.2". SECTION 22. CONDITIONS TO EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of the following conditions precedent (the effective date of this Amendment, the "EFFECTIVE DATE"): (a) AMENDMENT. The Administrative Agent shall have received (i) counterparts of this Amendment executed by (A) the Parent Borrower, (B) the Required Lenders, (C) the Revolving Credit Lenders, the Revolving Credit Commitment Percentages of which aggregate at least 51%, (D) Tranche A Term Loan Lenders, the Tranche A Term Loan Percentages of which aggregate at least 51%, (E) Tranche B Term Loan Lenders, the Tranche B Term Loan Percentages of which aggregate at least 51% and (F) each Lender under the Incremental Tranche B Term Loan Facility; and (ii) the attached Acknowledgment and Consent, executed by each Guarantor. (b) MORTGAGES. With respect to each of the Mortgages, to the extent reasonably requested by the Administrative Agent, a mortgage amendment in form and 12 substance reasonably satisfactory to the Administrative Agent (a "MORTGAGE AMENDMENT"), which has the effect of including all obligations of the Loan Parties in respect of the Incremental Tranche B Term Loans as secured obligations under such Mortgage, executed and delivered by a duly authorized officer of the Loan Party signatory thereto. (c) ACQUISITION AGREEMENT; CONSUMMATION OF THE CRS ACQUISITION. The Acquisition Agreement shall not have been amended, supplemented, waived or otherwise modified in any material respect since the date thereof, except as may have been consented to in writing by the Administrative Agent acting reasonably. The CRS Acquisition shall have been consummated in accordance with the terms and conditions of the Acquisition Agreement for an aggregate purchase price of approximately $65,000,000 (including fees and expenses of approximately $5,000,000, and excluding the pay-off of approximately $24,000,000 of Indebtedness of the Target), of which up to $15,000,000 may have been paid with subordinated seller notes issued by the Parent Borrower or a Subsidiary of the Parent Borrower that is a Guarantor having terms and conditions (including subordination terms) reasonably satisfactory to the Administrative Agent. None of the conditions to the respective obligations of Holding, the Parent Borrower and the Subsidiaries to consummate the CRS Acquisition and the other transactions contemplated by the Acquisition Agreement shall have been waived by Holding, the Parent Borrower or any of the Subsidiaries in any material respect without the prior written consent of the Administrative Agent. (d) EQUITY INVESTMENT. The Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to it, that (i) Clayton, Dubilier & Rice Fund VI Limited Partnership and (at the election of the Parent Borrower) one or more investors arranged by CD&R shall have made a cash equity investment in the common stock of Holding in an aggregate amount not less than $36,500,000 (the "EQUITY INVESTMENT") and (ii) the Parent Borrower shall have received the amount of the Equity Investment in cash by capital contribution from Holding. (e) TRANSACTION FEES. The fees and expenses incurred in connection with the CRS Acquisition and the transactions contemplated hereby and thereby shall not exceed $5,500,000 in the aggregate. (f) FINANCIAL INFORMATION. The Lenders shall have received copies of and shall be reasonably satisfied, in form and substance, with (i) the audited consolidated financial statements of CRS for the 2001 fiscal year, (ii) unaudited interim consolidated financial statements of CRS for each quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this paragraph as to which financial statements are available, (iii) the unaudited consolidated financial statements of the Target for the 2000 and 2001 fiscal years and (iv) a PRO FORMA consolidated balance sheet of the Parent Borrower as at March 31, 2002, adjusted to give effect to the CRS Acquisition, the financing contemplated hereby and transactions relating thereto and hereto as if such transactions had occurred on such date. (g) FINANCIAL CONDITION OF TARGET. The Lenders shall have received a certificate of a Responsible Officer of the Parent Borrower stating that the EBITDA of the Target for the four consecutive fiscal quarters ending December 31, 2001, after giving effect to certain 13 adjustments that are reasonably satisfactory to the Administrative Agent, shall be at least $8,500,000 and including calculations to support such statement. (h) MORTGAGE SUBSIDIARY. Cooperative Mortgage Services, Inc., an Ohio corporation that, before giving affect to the CRS Acquisition, is a Subsidiary of CRS ("CMS"), shall not, after giving effect to the CRS Acquisition, be a consolidated subsidiary of the Parent Borrower in accordance with GAAP. (i) CERTAIN MORTGAGE ARRANGEMENTS. The Administrative Agent shall have received evidence reasonably satisfactory to it that the arrangements currently in effect among CMS and one or more lenders (including Washington Mutual Bank, FA), relating to the financing by any such lender or lenders of mortgage loans originated or otherwise acquired by CMS (as the same may be modified in a manner reasonably satisfactory to the Administrative Agent prior to the consummation of the CRS Acquisition) shall continue to be in full force and effect after the consummation of the CRS Acquisition. (j) LENDER SATISFACTION WITH DOCUMENTATION. The Lenders shall be reasonably satisfied with the form and substance of all documents to be executed in connection with the CRS Acquisition and the transactions contemplated thereby (including, without limitation, the Acquisition Agreement and each other material Contractual Obligation relating to the CRS Acquisition to which Holding, the Parent Borrower or any Subsidiary will become bound on the Effective Date). (k) NO MATERIAL ADVERSE EFFECT. Since December 31, 2001, there shall not have been any event, occurrence, fact or change that, individually or in the aggregate, is or would reasonably be expected to be materially adverse to the business, operations, assets, liabilities or results of operations of the Parent Borrower and its Subsidiaries (after giving effect to the CRS Acquisition) taken as whole (a "MATERIAL ADVERSE EFFECT"). (l) NO MATERIAL LITIGATION. No litigation, inquiry, injunction or restraining order shall be pending, entered or threatened that would reasonably be expected to have a Material Adverse Effect or a material adverse effect on the transactions contemplated hereby. (m) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent shall have received a certificate of a Responsible Officer of the Parent Borrower stating that all consents, authorizations, notices and filings required in connection with this Amendment, the Incremental Tranche B Term Loan Facility, the security, collateral and guarantees for the Incremental Tranche B Loan Facility and the CRS Acquisition as contemplated hereby (except for (i) filings to perfect the Liens created by the Security Documents and (ii) consents, authorizations, notices and filings which the failure to obtain or make would not reasonably be expected to have a Material Adverse Effect) are in full force and effect or have the status described therein. (n) COMPLIANCE WITH INDENTURE. The Administrative Agent shall have received a certificate of a Responsible Officer of the Parent Borrower stating that the making of the Incremental Tranche B Term Loans, the CRS Acquisition and the other transactions contemplated hereby and thereby comply with the provisions of the Senior Subordinated Note Indenture. 14 (o) NO DEFAULT. No Default or Event of Default shall have occurred and be continuing (both before and after giving affect to the making of the Incremental Tranche B Term Loans, the CRS Acquisition and the other transactions contemplated hereby and thereby). (p) LEGAL OPINIONS. The Administrative Agent shall have received the following executed legal opinions: (i) the executed legal opinion of Debevoise & Plimpton, special counsel to each of Holding, the Parent Borrower and the other Loan Parties, substantially in the form of Exhibit A-1 to this Amendment; and (ii) the executed legal opinion of Ralph Ford, Esq., counsel to each of Holding, the Parent Borrower and the other Loan Parties, substantially in the form of Exhibit A-2 to this Amendment. (q) COLLATERAL. All necessary or reasonably advisable collateral filings shall have been duly made or taken and all necessary or reasonably advisable amendments to the Security Documents shall have become effective, and all Collateral shall be free and clear of all Liens, except Liens permitted by subsection 8.3 of the Credit Agreement. The Parent Borrower and its Subsidiaries (after giving effect to the CRS Acquisition) shall have executed all such documents and instruments, and taken all such actions, required by subsection 7.10 of the Credit Agreement in connection with the acquisition of a Material Subsidiary. (r) PROJECTIONS. The Administrative Agent shall have received projections for the Parent Borrower and its consolidated subsidiaries, after giving effect to the CRS Acquisition, through 2007, together with a statement of assumptions underlying such projections, in form and substance reasonably satisfactory to the Lenders. (s) FEES. The Administrative Agent, the Arrangers and the Lenders shall have received all fees and expenses required to be paid or delivered by the Parent Borrower to them on or prior to the Effective Date. (t) BORROWING CERTIFICATE. The Administrative Agent shall have received a certificate of the Parent Borrower, dated the Effective Date, substantially in the form of Exhibit J to the Credit Agreement, with appropriate insertions, attachments and modifications to reflect this Amendment, reasonably satisfactory in form and substance to the Administrative Agent, executed by a Responsible Officer and the Secretary or any Assistant Secretary of the Parent Borrower. (u) CORPORATE PROCEEDINGS OF THE LOAN PARTIES. The Administrative Agent shall have received a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors of each Loan Party authorizing, as applicable, (i) the execution, delivery and performance of this Amendment, any Tranche B Term Notes, the Mortgage Amendments and the other Loan Documents to which it is or will be a party, (ii) the Incremental Tranche B Term Loans (and Guarantees thereof) contemplated hereunder and (iii) the granting by it of the Liens to be created pursuant to the Security Documents to which it is or will be a party certified by the Secretary or an Assistant Secretary of such Loan Party as of the Effective Date, which certificate shall be in form and substance reasonably satisfactory to the 15 Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified (except as any later such resolution may modify any earlier such resolution), revoked or rescinded and are in full force and effect. (v) INCUMBENCY CERTIFICATES OF THE LOAN PARTIES. The Administrative Agent shall have received a certificate of each Loan Party, dated the Effective Date, as to the incumbency and signature of the officers of such Loan Party executing any Loan Document, reasonably satisfactory in form and substance to the Administrative Agent, executed by a Responsible Officer and the Secretary or any Assistant Secretary of such Loan Party. (w) CORPORATE DOCUMENTS. The Administrative Agent shall have received copies of the certificate of incorporation and by-laws of each Loan Party that has not previously delivered such documents to the Administrative Agent, certified as of the Effective Date as complete and correct copies thereof by the Secretary or an Assistant Secretary of such Loan Party. (x) AMENDMENT FEE. The Parent Borrower shall have paid to the Administrative Agent, on behalf of each Lender which shall have executed and delivered this Amendment to counsel to the Administrative Agent by 3:00 P.M. (New York City time) on April 30, 2002, an amendment fee in an amount equal to 0.125% of the sum of each such Lender's Revolving Credit Commitment and Term Loans (other than Incremental Tranche B Term Loans) then outstanding. The making of the Incremental Tranche B Term Loans by the relevant Lenders hereunder shall conclusively be deemed to constitute an acknowledgement by the Administrative Agent and each Lender that each of the conditions precedent set forth in this Section 22 shall have been satisfied in accordance with its respective terms or shall have been irrevocably waived by such Person. SECTION 23. POST-CLOSING CONDITIONS; TITLE INSURANCE. This Amendment shall remain effective so long as the requirements of Section 22 hereof have been satisfied, and so long as, within 30 days of the date hereof, the Administrative Agent shall have received in respect of each of the existing mortgagee title policies (each, an "EXISTING MORTGAGEE TITLE POLICY") an endorsement or endorsements (collectively, the "ENDORSEMENTS") or marked up unconditional binder for the issuance of such Endorsements dated no later than 30 days after the Effective Date. Each of the Endorsements shall modify the relevant Existing Mortgage Title Policy to (i) insure that the Mortgage insured thereby (as amended) continues to be a valid first Lien on the Mortgaged Property encumbered thereby free and clear of all defects and encumbrances, except those listed on Schedule B of the Existing Mortgage Title Policies and those permitted by subsection 8.3 of the Credit Agreement and such as may be approved by the Administrative Agent; (ii) name the Administrative Agent for the benefit of the Lenders, including the Lenders under the Incremental Tranche B Term Loan Facility, as the insured thereunder; and (iii) be in form and substance reasonably satisfactory to the Administrative Agent. The Administrative Agent shall have received evidence reasonably satisfactory to it that all premiums in respect of each of the Endorsements, and all charges for mortgage recording tax, if any, have been paid. The Administrative Agent shall have also received a copy of all recorded documents referred to, or listed as exceptions to title in, the Endorsements referred to in this subsection and a copy, certified by such parties as the Administrative Agent may deem 16 reasonably appropriate, of all other documents affecting the property covered by each Mortgage as shall have been reasonably requested by the Administrative Agent. SECTION 24. REPRESENTATIONS AND WARRANTIES. In order to induce the Administrative Agent and the Lenders to enter into this Amendment, the Parent Borrower hereby represents and warrants to the Administrative Agent and the Lenders that the representations and warranties of the Parent Borrower contained in the Loan Documents are true and correct in all material respects on and as of the Effective Date (after giving effect hereto) as if made on and as of the Effective Date, except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date; PROVIDED that all references to the "Credit Agreement" and the "Guarantee and Collateral Agreement" in any Loan Document shall be and are deemed to mean the Credit Agreement or the Guarantee and Collateral Agreement, as the case may be, as amended hereby. SECTION 25. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 26. COUNTERPARTS. This Amendment may be executed by the parties hereto in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Amendment signed by all the parties shall be lodged with the Parent Borrower and the Administrative Agent. SECTION 27. PAYMENT OF EXPENSES. The Parent Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent. SECTION 28. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and inure to the benefit of the Parent Borrower and its successors and assigns, and upon the Administrative Agent and the Lenders and their respective successors and assigns. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any loans or commitments assigned to it after such execution and delivery. SECTION 29. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. On and after the Effective Date, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. On and after the Effective Date, each reference in the Guarantee and Collateral Agreement to "this Agreement", "hereunder", "hereof" or words of like import 17 referring to the Guarantee and Collateral Agreement, and each reference in the other Loan Documents to "the Guarantee and Collateral Agreement", "thereunder", "thereof" or words of like import referring to the Guarantee and Collateral Agreement, shall mean and be a reference to the Guarantee and Collateral Agreement as amended hereby. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents. Except as expressly amended herein, all of the provisions of the Credit Agreement, the Guarantee and Collateral Agreement and the other Loan Documents are and shall remain in full force and effect in accordance with the terms thereof and are hereby in all respects ratified and confirmed. 18 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the day and year first above written. NORTH AMERICAN VAN LINES, INC. By: ---------------------------------- Name: Title: JPMORGAN CHASE BANK, as Administrative Agent and as a Lender By: /s/ William J. Caggiano ---------------------------------- Name: William J. Caggiano Title: Managing Director IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their respective duly authorized officers as of the day and year first above written. NORTH AMERICAN VAN LINES, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer JPMORGAN CHASE BANK, as Administrative Agent and as a Lender By: ---------------------------------- Name: Title: ARCHIMEDES FUNDING II, LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski ---------------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST ARCHIMEDES FUNDING III, LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski ---------------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST ARCHIMEDES FUNDING IV (CAYMAN), LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski ---------------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST NEMEAN CLO, LTD. BY: ING Capital Advisors LLC, as Investment Manager BY: /s/ Steven Gorski ---------------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST ORYX CLO, LTD. BY: ING Capital Advisors LLC, as Collateral Manager BY: /s/ Steven Gorski ---------------------------------- Name: STEVEN GORSKI Title: VICE PRESIDENT & SENIOR CREDIT ANALYST Clydesdale CLO 2001-1, Ltd. -------------------------------------- Name of Lender NOMURA CORPORATION RESEARCH AND ASSET MANAGEMENT INC. AS COLLATERAL MANAGER By: /s/ Richard W. Stewart ---------------------------------- Name: RICHARD W. STEWART Title: DIRECTOR Nomura Bond & Loan Fund -------------------------------------- Name of Lender By: UFJ Trust Company of New York as Trustee By: Nomura Corporate Research and Asset Management Inc. Attorney In Fact By: /s/ Richard W. Stewart ---------------------------------- Name: RICHARD W. STEWART Title: DIRECTOR By: ---------------------------------- Name: Title: Bank of America, N.A. -------------------------------------- Name of Lender By: /s/ W. Thomas Barnett ---------------------------------- Name: W. Thomas Barnett Title: Managing Director THE BANK OF NEW YORK -------------------------------------- Name of Lender By: /s/ Maurice A. Campbell ---------------------------------- Name: MAURICE A. CAMPBELL Title: ASSISTANT VICE PRESIDENT THE BANK OF NOVA SCOTIA By: /s/ N. Bell ---------------------------------- Name: N. Bell Title: Sr. Manager - Loan Operations BANK OF TOKYO-MITSUBISHI TRUST COMPANY -------------------------------------- Name of Lender By: /s/ Eric Planey ---------------------------------- Name: Eric Planey Title: Assistant Vice President Carlyle High Yield Partners III, Ltd. -------------------------------------- Name of Lender By: /s/ Linda Pace ---------------------------------- Name: LINDA PACE Title: PRINCIPAL COPERNICUS EURO CDO-I B.V. -------------------------------------- Name of Lender ON BEHALF OF ING CAPITAL ADVISORS LLC AS COLLATERAL MANAGER FOR COPERNICUS EURO CDO-I B.V. By: /s/ Simon Wood ---------------------------------- Name: SIMON WOOD Title: MANAGING DIRECTOR By: /s/ Herman Guelovani ---------------------------------- Name: HERMAN GUELOVANI Title: VICE PRESIDENT Deutsche Bank Trust Company America (f/k/a Bankers Trust Company) -------------------------------------- Name of Lender By: /s/ Marguerite Sutton ---------------------------------- Name: Marguerite Sutton Title: Vice President Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO I, LTD. By: /s/ John Thacker ---------------------------------- Name: John Thacker Title: Chief Credit Officer Denali Capital LLC, managing member of DC Funding Partners, portfolio manager for DENALI CAPITAL CLO II, LTD., or an affiliate By: /s/ John Thacker ---------------------------------- Name: John Thacker Title: Chief Credit Officer Flagship CLO 2001-1 -------------------------------------- Name of Lender By: /s/ Mark S. Pelletier ---------------------------------- Name: MARK S. PELLETIER Title: DIRECTOR Flagship CLO II -------------------------------------- Name of Lender By: /s/ Mark S. Pelletier ---------------------------------- Name: MARK S. PELLETIER Title: ATTORNEY-IN-FACT Heller Financial, Inc. -------------------------------------- Name of Lender By: /s/ Robert Kadlick ---------------------------------- Name: Robert Kadlick Title: Duly Authorized Signatory INDOSUEZ CAPITAL FUNDING IIA, LIMITED By: Indosuez Capital as Portfolio Advisor By: /s/ Andrew Brady ---------------------------------- Name: Andrew Brady Title: Vice President Indosuez Capital Funding IV, L.P., By: RBC Leveraged Capital as Portfolio Advisor By: /s/ Lee M. Shaiman ---------------------------------- Name: Lee M. Shaiman Title: Managing Director MORGAN STANLEY PRIME INCOME TRUST -------------------------------------- Name of Lender By: /s/ Sheila A. Finnerty ---------------------------------- Name: Sheila A. Finnerty Title: Executive Director MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By: /s/ Anthony Heyman ---------------------------------- Anthony Heyman AUTHORIZED SIGNATORY DEBT STRATEGIES FUND, INC. By: /s/ Anthony Heyman ---------------------------------- Anthony Heyman AUTHORIZED SIGNATORY LONGHORN CDO (CAYMAN) LTD By: Merrill Lynch Investment Managers, L.P. as Investment Advisor By: /s/ Anthony Heyman ---------------------------------- Anthony Heyman AUTHORIZED SIGNATORY MASTER SENIOR FLOATING RATE TRUST By: /s/ Anthony Heyman ---------------------------------- Anthony Heyman AUTHORIZED SIGNATORY PPM SPYGLASS FUNDING TRUST By: /s/ Diana L. Mushill ---------------------------------- Name: DIANA L. MUSHILL Title: AUTHORIZED AGENT LANDMARK CDO LIMITED By: Aladdin Asset Management LLC, as Manager /s/ John M. Johnson -------------------------------- By: John M. Johnson Title: Authorized Signatory NATIONAL CITY BANK OF INDIANA -------------------------------------- Name of Lender By: /s/ Mark A. Minnick ---------------------------------- Name: Mark A. Minnick Title: Senior Vice President NUVEEN FLOATING RATE FUND -------------------------------------- Name of Lender By: /s/ Geoffrey G. Gavin ---------------------------------- Name: GEOFFREY G. GAVIN Title: PORTFOLIO MANAGER NUVEEN SENIOR INCOME FUND -------------------------------------- Name of Lender By: /s/ Geoggrey G. Gavin ---------------------------------- Name: GEOGGREY G. GAVIN Title: PORTFOLIO MANAGER THE PROVIDENT BANK -------------------------------------- Name of Lender By: /s/ Thomas W. Doe ---------------------------------- Name: THOMAS W. DOE Title: VICE PRESIDENT Textron Financial Corporation By: /s/ Matthew J. Colgan ---------------------------------- Name: Matthew J. Colgan Title: Director SCHEDULE A-1 TO CREDIT AGREEMENT Incremental Tranche B Term Loan Commitments
Incremental Tranche B Lender Term Loan Commitment - ------ --------------------- JPMorgan Chase Bank $ 16,666,666.66 Bank of America, N.A. $ 16,666,666.67 Deutsche Bank Trust Company Americas $ 16,666,666.67 TOTAL 50,000,000.00 =====================
ACKNOWLEDGMENT AND CONSENT Each of the undersigned corporations as guarantors under the Guarantee and Collateral Agreement, dated as of November 19, 1999, made by the undersigned corporations in favor of the Administrative Agent, for the benefit of the Lenders, hereby (a) consents to the transactions contemplated by this Amendment, (b) consents and agrees to the amendments to the Guarantee and Collateral Agreement set forth in this Amendment and (c) acknowledges and agrees that the guarantees (and grants of collateral security therefor) contained in such Guarantee and Collateral Agreement are, and shall remain, in full force and effect after giving effect to this Amendment. SIRVA, INC. (formerly known as Allied Worldwide, Inc.) By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer FLEET INSURANCE MANAGEMENT, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer FRONTRUNNER WORLDWIDE, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer GREAT FALLS NORTH AMERICAN, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer NACAL, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer NAVTRANS INTERNATIONAL FREIGHT FORWARDING, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer NORTH AMERICAN DISTRIBUTION SYSTEMS, INC. n/k/a FEDERAL TRAFFIC SERVICE, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer NORTH AMERICAN LOGISTICS, LTD. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer NORTH AMERICAN VAN LINES OF TEXAS, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer RELOCATION MANAGEMENT SYSTEMS, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer A RELOCATION SOLUTIONS MANAGEMENT COMPANY By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer ALLIED FREIGHT FORWARDING, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: ALLIED VAN LINES, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer ALLIED INTERNATIONAL N.A., INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer ALLIED VAN LINES TERMINAL COMPANY By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer VANGUARD INSURANCE AGENCY, INC. By: /s/ Ronald L. Milewaki ---------------------------------- Name: Ronald L. Milewaki Title: Treasurer MERIDIAN MOBILITY RESOURCES, INC. By: /s/ Douglas V. Gathany ---------------------------------- Name: Douglas V. Gathany Title: Treasurer TGIA ACQUISITION COMPANY, LLC n/k/a NATIONAL ASSOCIATION OF INDEPENDENT TRUCKERS, LLC By: /s/ Lawrence A. Writt ---------------------------------- Name: Lawrence A. Writt Title: Treasurer EX-10.22 34 a2079698zex-10_22.txt EXHIBIT 10.22 EXHIBIT 10.22 STOCK SUBSCRIPTION AGREEMENT STOCK SUBSCRIPTION AGREEMENT, dated as of April 12, 2002, between SIRVA, Inc., formerly known as Allied Worldwide, Inc., a Delaware corporation (the "COMPANY"), and Clayton, Dubilier & Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership (together with any successor investment vehicle managed by Clayton, Dubilier & Rice, Inc., the "PURCHASER"). W I T N E S S E T H: WHEREAS, pursuant to an Asset Purchase Agreement, dated as of the date of this Agreement, as may be amended from time to time (the "GRAND PURCHASE AGREEMENT"), between TGIA Acquisition Company, a Delaware corporation and an indirect wholly-owned subsidiary of the Company ("TGIA ACQUISITION"), National Association of Independent Truckers, Inc., a Missouri corporation, ("NAIT"), and certain other parties (NAIT, together with such other parties, the "GRAND SELLERS"), and V. Cheryl Womack, TGIA Acquisition has agreed to acquire from the Grand Sellers all of their assets relating to the marketing, processing and administration of certain occupational accident insurance, workers compensation insurance and medical insurance policies to the members of NAIT and the provision for the benefit of the members of NAIT certain affiliation services (the "GRAND ACQUISITION"); WHEREAS, pursuant to a Purchase Agreement, dated as of March 19, 2002, as may be amended from time to time (the "BROWNSTONE PURCHASE AGREEMENT"), between the Company, SIRVA Acquisition Company, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company ("SIRVA ACQUISITION"), Cooperative Resource Services, Ltd., an Ohio limited liability company ("CRSL"), Edward J. Davidson, a resident of the State of Ohio, and certain of his associates, SIRVA Acquisition has agreed to acquire from CRSL all of CRSL's assets relating to the comprehensive relocation business conducted by CRSL and its subsidiaries (the "BROWNSTONE ACQUISITION", and together with the Grand Acquisition, the "ACQUISITIONS"); WHEREAS, (a) the Company will issue 140,846 shares of its common stock, par value $ 0.01 per share (the "COMMON STOCK"), to the Purchaser concurrently with the closing of the Grand Acquisition on the date of this Agreement (such closing, the "GRAND CLOSING"), and (b) the Company will issue up to an additional 387,324 shares of Common Stock concurrently with the closing of the Brownstone Acquisition (such closing, the "BROWNSTONE CLOSING", and the date of the Brownstone Closing, the "BROWNSTONE CLOSING DATE"); WHEREAS, the Purchaser desires to subscribe for and purchase, and the Company desires to sell to the Purchaser, 140,846 shares of Common Stock concurrently with the Grand Closing, and up to an additional 387,324 shares of Common Stock concurrently with the Brownstone Closing, at a purchase price of $142.00 per share; NOW, THEREFORE, to implement the foregoing and in consideration of the mutual agreements contained in this Agreement, the parties hereby agree as follows: 1. PURCHASE AND SALE OF COMMON STOCK. (a) PURCHASE OF COMMON STOCK. Subject to all of the terms and conditions of this Agreement, the Purchaser agrees to subscribe for and purchase, and the Company agrees to sell to the Purchaser, at a purchase price of $142.00 per share: (i) at the Grand Closing, 140,846 shares of Common Stock (the "GRAND SHARES"); and (ii) at the Brownstone Closing, such number of shares of Common Stock as the Purchaser may elect in a written notice to be delivered to the Company at least two business days prior to the anticipated Brownstone Closing Date, but not exceeding 387,324 (such shares, the "BROWNSTONE SHARES", and together with the Grand Shares, the "SHARES"). (b) CONSIDERATION. Subject to the terms and conditions of this Agreement, the Purchaser shall deliver to the Company: (i) at the Grand Closing, immediately available funds in the amount of $20,000,132; and (ii) at the Brownstone Closing, immediately available funds in the amount equal to the aggregate purchase price of the Brownstone Shares purchased at such closing. 2. CLOSING. (a) TIME AND PLACE. Except as otherwise mutually agreed by the Company and the Purchaser, the closings of the transactions contemplated by this Agreement (the "CLOSINGS") will be held at the offices of Debevoise & Plimpton, 919 Third Avenue, New York, New York at 10 a.m. (New York time) on the date of this Agreement, and on the Brownstone Closing Date, respectively. (b) DELIVERY BY THE COMPANY. At each Closing, the Company shall deliver to the Purchaser a stock certificate registered in such Purchaser's name and representing the Grand Shares, or the Brownstone Shares, as the case may be, which certificate will bear the legend set forth in Section 4(b). 2 (c) DELIVERY BY THE PURCHASER. At each Closing, the Purchaser will deliver to the Company the relevant consideration referred to in Section 1(b). 3. MANAGEMENT RIGHTS. For so long as the Purchaser owns any shares of Common Stock and there has not been an underwritten public offering of the Common Stock (other than a Special Registration, as such term is defined in the Registration and Participation Agreement referred to in Section 4(g)), the Purchaser will have the following rights with respect to the Company and North American Van Lines, Inc. ("NAVL", and together with the Company, the "SIRVA COMPANIES"): (a) RIGHT OF CONSULTATION. The Purchaser shall have the right, and the Company shall cause the other SIRVA Company to grant to the Purchaser the right, to consult with and advise the management of each of the SIRVA Companies, at any time or from time to time, on all matters relating to the operation of the SIRVA Companies, including, without limitation, significant changes in management personnel and compensation or employee benefits, the introduction of new products or new lines of business, important acquisitions or dispositions of plant and equipment, significant research and development programs, the purchase or sale of important patents, trademarks, licenses and concessions, and the proposed compromise of any significant litigation. (b) OBSERVATION RIGHTS. The Purchaser shall have the right, and the Company shall cause the other SIRVA Company to grant to the Purchaser the right, to have its representatives (in addition to its representatives that are directors) attend meetings of the Boards of Directors of each of the SIRVA Companies. The Company shall give, or shall cause the other SIRVA Company to give, as appropriate, to the Purchaser (i) at least three days' notice of each regular meeting of the Board of Directors of each of the SIRVA Companies, (ii) such notice as is necessary under the circumstances to enable the Purchaser's representatives to attend each special or emergency meeting of the Board of Directors of each of the SIRVA Companies, (iii) on or prior to the date of each meeting of the Board of Directors of each of the SIRVA Companies, all information given to the directors at such meeting, and (iv) within 90 days following each meeting of the Board of Directors of each of the SIRVA Companies, copies of the minutes of such meeting. (c) INSPECTION AND ACCESS. The Company shall provide to the Purchaser true and correct copies of all quarterly and annual financial reports and budgets prepared by or on behalf of each of the SIRVA Companies and their subsidiaries, and such other documents, reports, financial data and other information as the Purchaser may reasonably request. The Company shall permit any authorized representatives designated by the Purchaser to visit and inspect any of the properties of the Company or any of its subsidiaries, including its and their books of account (and to make copies and take extracts therefrom), and to discuss its and their affairs, finances and accounts with its and their officers and their current and prior independent public accountants (and by this 3 provision the Company authorizes such accountants to discuss with such representatives the affairs, finances and accounts of the Company and its subsidiaries, whether or not a representative of the Company is present), all at such reasonable times and as often as the Purchaser may reasonably request. 4. Purchaser's Representations, Warranties and Covenants. The Purchaser represents and warrants as follows: (a) INVESTMENT INTENTION. The Purchaser is acquiring the Shares solely for its own account for investment and not with a view to or for sale in connection with any distribution thereof in any transaction or series of transactions that would be in violation of the securities laws of the United States or any state thereof. The Purchaser agrees that it will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of any of the Shares (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of any Shares), except in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder, and in compliance with applicable state securities or "blue sky" laws. The Purchaser further understands, acknowledges and agrees that none of the Shares may be transferred, sold, pledged, hypothecated or otherwise disposed of unless (i) (A) such disposition is pursuant to an effective registration statement under the Securities Act, (B) the Purchaser shall have delivered to the Company an opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Company, to the effect that such disposition is exempt from the provisions of Section 5 of the Securities Act, or (C) a no-action letter from the Commission, reasonably satisfactory to the Company, shall have been obtained with respect to such disposition and (ii) such disposition is pursuant to registration under any applicable state securities laws or an exemption therefrom. (b) LEGEND. The Purchaser acknowledges that the certificates representing the Shares shall bear the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (i) (A) SUCH DISPOSITION IS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (B) THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE COMPANY AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF 4 SECTION 5 OF SUCH ACT OR (C) A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, SHALL HAVE BEEN OBTAINED WITH RESPECT TO SUCH DISPOSITION AND (ii) SUCH DISPOSITION IS PURSUANT TO REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM." "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE BENEFITS OF AND ARE BOUND BY THE OBLIGATIONS SET FORTH IN A REGISTRATION AND PARTICIPATION AGREEMENT, DATED AS OF MARCH 30,1998, AS AMENDED, AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH IS LOCATED AT THE PRINCIPAL OFFICE OF THE COMPANY." (c) SECURITIES LAW MATTERS. The Purchaser acknowledges receipt of advice from the Company that (i) the Shares have not been registered under the Securities Act or qualified under any state securities or "blue sky" laws, (ii) it is not anticipated that there will be any public market for the Shares, (iii) the Shares must be held indefinitely and the Purchaser must continue to bear the economic risk of the investment in the Shares unless the Shares are subsequently registered under the Securities Act and such state laws or an exemption from registration is available, (iv) Rule 144 promulgated under the Securities Act ("RULE 144") is not presently available with respect to the sales of any securities of the Company and the Company has made no covenant to make Rule 144 available, (v) when and if the Shares may be disposed of without registration in reliance upon Rule 144, such disposition can be made only in limited amounts in accordance with the terms and conditions of such Rule, if the Purchaser is deemed to be an "affiliate" of the Company within the meaning of Rule 144, (vi) the Company does not plan to file reports with the Commission or make public information concerning the Company available unless required to do so by law or by the terms of its financing agreements, (vii) if the exemption afforded by Rule 144 is not available, sales of the Shares may be difficult to effect because of the absence of public information concerning the Company, (viii) a restrictive legend in the form heretofore set forth shall be placed on the certificates representing the Shares and (ix) a notation shall be made in the appropriate records of the Company indicating that the Shares are subject to restrictions on transfer set forth in this Agreement and, if the Company should in the future engage the services of a stock transfer agent, appropriate stop-transfer restrictions will be issued to such transfer agent with respect to the Shares. (d) COMPLIANCE WITH RULE 144. If any of the Shares are to be disposed of in accordance with Rule 144, the Purchaser shall transmit to the Company an executed copy of Form 144 (if required by Rule 144) no later than the time such form is required to be 5 transmitted to the Commission for filing and such other documentation as the Company may reasonably require to assure compliance with Rule 144 in connection with such disposition. (e) ABILITY TO BEAR RISK. (i) The financial situation of the Purchaser is such that it can afford to bear the economic risk of holding the Shares for an indefinite period, and (ii) the Purchaser can afford to suffer the complete loss of its investment in the Shares. (f) ACCESS TO INFORMATION. (i) The Purchaser has participated in the preparation and negotiation of the Grand Purchase Agreement and the Brownstone Purchase Agreement and has carefully reviewed all of the materials furnished to it in connection with the transactions contemplated thereby and hereby, (ii) it has been granted the opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of the purchase of the Shares and to obtain any additional information that it deems necessary to verify the accuracy of the information contained in such material, and (iii) its knowledge and experience in financial and business matters is such that it is capable of evaluating the risks of the investment in the Shares. (g) REGISTRATION AND PARTICIPATION AGREEMENT. The Purchaser acknowledges and agrees that it will be entitled to the rights and subject to the obligations created under the Registration and Participation Agreement, dated as of March 30, 1998, as may be amended from time to time, among the Company, Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership, and certain other stockholders. The Purchaser agrees that, in the event that the Company files a registration statement under the Securities Act with respect to an underwritten public offering of any shares of its capital stock, the Purchaser will not effect any public sale or distribution of any shares of the Common Stock (other than as part of such underwritten public offering) during the 20 days prior to and the 180 days after the effective date of such registration statement. 5. Representations and Warranties of the Company. The Company represents and warrants to the Purchaser that (a) the Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware, (b) this Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and (c) the Shares, when issued and delivered in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of any liens or encumbrances other than those created pursuant to this Agreement or otherwise in connection with the transactions contemplated hereby. 6 6. Covenants of the Company. (a) RULE 144. The Company agrees that at all times after it has filed a registration statement pursuant to the requirements of the Securities Act or Section 12 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), relating to any class of equity securities of the Company (other than (i) the registration of equity securities of the Company and/or options in respect thereof to be offered primarily to directors and members of management and employees of the Company or its direct or indirect subsidiaries, or (ii) the registration of equity securities and/or options in respect thereof solely on Form S-4 or S-8 or any successor form), it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, if the Company is not required to file such reports, it will, upon the request of the Purchaser, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act), and will take such further action as the Purchaser may reasonably request, all to the extent required from time to time to enable the Purchaser to sell Shares without registration under the Securities Act within the limitation of the exemptions provided by (x) Rule 144, as such Rule may be amended from time to time, or (y) any successor rule or regulation hereafter adopted by the Commission. (b) STATE SECURITIES LAWS. The Company agrees to use its best efforts to comply with all state securities or "blue sky" laws applicable to the sale of the Shares to the Purchaser. (c) EXPENSES. The Company hereby agrees to pay all expenses relating to this Agreement, including but not limited to (i) the cost of printing, reproducing and distributing this Agreement, the Shares and any associated documents, (ii) the Purchaser's reasonable out-of-pocket expenses incurred in connection with this Agreement, the Shares and any associated documents, (iii) the reasonable fees and disbursements of Purchaser's counsel, (iv) the cost of delivering the Shares purchased at the Closings, insured to the satisfaction of the Purchaser, to such address as the Purchaser shall designate, (v) all reasonable out-of-pocket expenses relating to any amendment or modification of, or any waiver, consent or preservation of rights under, this Agreement and (vi) all other expenses, including counsel's fees, incurred by the Company in connection with the transactions contemplated by this Agreement or any other agreements or documents entered into in connection with the Acquisitions. 7. Conditions to the Brownstone Closing. (a) CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The respective obligation of each party to effect the transactions contemplated by this Agreement to be consummated at the Brownstone Closing is subject to the satisfaction on or prior to the Brownstone 7 Closing Date of each of the following conditions (any of which may be waived by the parties in writing, in whole or in part, to the extent permitted by applicable law): (i) NO INJUNCTION OR PROCEEDING. Consummation of the transactions contemplated by this Agreement may not have been restrained, enjoined or otherwise prohibited by any applicable law. No governmental authority may have determined any applicable law to make illegal the consummation of the transactions contemplated by this Agreement, and no proceeding with respect to the application of any such applicable law to such effect may be pending. (ii) HSR AND OTHER COMPETITION LAWS. Any waiting period applicable to the consummation of the transactions contemplated by this Agreement under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, must have expired or been terminated, and no action may have been instituted by the United States Department of Justice or the United States Federal Trade Commission or other governmental entity and still be pending which challenges or seeks to enjoin the consummation of such transactions. (b) CONDITIONS TO THE OBLIGATION OF THE PURCHASER. The obligation of the Purchaser to effect the transactions contemplated by this Agreement to be consummated at the Brownstone Closing is subject to the satisfaction (or waiver by the Purchaser) on or prior to the Brownstone Closing Date of each of the following additional conditions, which the Company and the Purchaser agree to use their commercially reasonable efforts to cause to be fulfilled. (i) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company contained in Section 5 (i) shall be true and correct in all respects at and as of the date of this Agreement; and (ii) shall be repeated and shall be true and correct in all respects on and as of the Brownstone Closing Date with the same effect as though made on and as of the Brownstone Closing Date. (ii) COVENANTS. The Company shall have duly performed and complied with all covenants contained in Section 6 required by this Agreement to be performed or complied with by the Company prior to or at the Brownstone Closing. (iii) OFFICER'S CERTIFICATE. The Company shall have delivered to the Purchaser a certificate dated the Brownstone Closing Date and duly signed by an authorized officer of the Company certifying the closing conditions set forth in this Section 7(b) have been satisfied. (c) CONDITIONS TO THE OBLIGATION OF THE COMPANY. The obligation of the Company to effect the transactions contemplated by this Agreement to be consummated 8 at the Brownstone Closing is subject to the satisfaction (or waiver by the Company) on or prior to the Brownstone Closing Date of each of the following additional conditions, which the Company and the Purchaser agree to use their commercially reasonable efforts to cause to be fulfilled. (i) REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Purchaser contained in Section 4 (i) shall be true and correct in all respects at and as of the date of this Agreement; and (ii) shall be repeated and shall be true and correct in all respects on and as of the Brownstone Closing Date with the same effect as though made on and as of the Brownstone Closing Date. (ii) COVENANTS. The Purchaser shall have duly performed and complied with all covenants contained in Section 4 and required by this Agreement to be performed or complied with by the Company prior to or at the relevant Closing. (iii) OFFICER'S CERTIFICATE. The Purchaser shall have delivered to the Company a certificate dated the Brownstone Closing Date and duly signed by an authorized officer of the Purchaser certifying the closing conditions set forth in this Section 7(c) have been satisfied. 8. Miscellaneous. (a) NOTICES. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by certified or express mail, return receipt requested, postage prepaid, or by any recognized international equivalent of such mail delivery, to the Company or the Purchaser, as the case may be, at the following addresses or to such other address as the Company or the Purchaser, as the case may be, shall specify by notice to the others: (i) if to the Company, to: SIRVA, Inc. 215 W. Diehl Road Naperville, IL 60563 Attention: General Counsel (ii) if to the Purchaser, to: Clayton, Dubilier & Rice Fund VI Limited Partnership 1403 Foulk Road, Suite 106 9 Wilmington, Delaware 19803 Attention: General Partner All such notices and communications shall be deemed to have been received on the date of delivery or on the third business day after the mailing thereof. Copies of any notice or other communication given under this Agreement shall also be given to: Clayton, Dubilier & Rice, Inc. 375 Park Avenue New York, New York 10152 Attention: Kevin J. Conway and Debevoise & Plimpton 919 Third Avenue New York, New York 10022 Attention: Paul S. Bird, Esq. (b) BINDING EFFECT; BENEFITS. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein. (c) WAIVER; AMENDMENT. (i) WAIVER. Either party may by written notice to the other (A) extend the time for the performance of any of the obligations or other actions of the other under this Agreement, (B) waive compliance with any of the conditions or covenants of the other contained in this Agreement, and (C) waive or modify performance of any of the obligations of the other under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of either party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party's rights or privileges hereunder or shall be deemed a waiver of such party's rights to exercise the same at any subsequent time or times hereunder. 10 (ii) AMENDMENT. This Agreement may be amended, modified or supplemented only by a written instrument executed by the Purchaser and the Company. (d) ASSIGNABILITY. Neither this Agreement nor any right, remedy, obligation or liability arising under or by reason of this Agreement shall be assignable by the Company or the Purchaser without the prior written consent of the other party. (e) APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the law of the State of New York. (f) SECTION AND OTHER HEADINGS, ETC. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. (g) COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. 11 IN WITNESS WHEREOF, the Company and the Purchaser have duly executed this Agreement by their authorized representatives as of the date first above written. SIRVA, INC. By: /s/ Robert J. Henry ------------------------------ Name: Robert J. Henry Title: Assistant Secretary CLAYTON, DUBILIER & RICE FUND VI LIMITED PARTNERSHIP By: CD&R Associates VI Limited Partnership, its general partner By: CD&R Investment Associates VI, Inc., its managing general partner By: /s/ Donald J. Gogel ------------------------------- Name: Donald J. Gogel Title: President and CEO, Assistant Secretary and Assistant Treasurer 12 EX-21.1 35 a2002828zex-21_1.txt EXHIBIT 21.1 Exhibit 21.1 ALLIED WORLDWIDE, INC. (Subsidiaries) North American Van Lines, Inc. SUBSIDIARIES OF NORTH AMERICAN VAN LINES, INC. A Five Star Forwarding, Inc. A Three Rivers Forwarding, Inc. Alaska USA Van Lines, Inc. Allied Van Lines, Inc. SUBSIDIARIES OF ALLIED VAN LINES, INC. A Relocation Solutions Management Company A.V.L. Transportation, Inc. Allied International N.A., Inc. Allied Interstate Transportation, Inc. Allied Van Lines, Inc. of Indiana Allied Van Lines Terminal Company Meridian Mobility Resources, Inc. SUBSIDIARIES OF ALLIED VAN LINES TERMINAL COMPANY Allied Freight Forwarding, Inc. SUBSIDIARIES OF ALLIED FREIGHT FORWARDING, INC. Allied Alliance Forwarding, Inc. Allied Continental Forwarding, Inc. Allied Domestic Forwarding, Inc. Allied Intermodal Forwarding, Inc. Allied Transcontinental Forwarding, Inc. Allied Transportation Forwarding, Inc. Cartwright Moving & Storage Co., Inc. Cartwright Van Lines, Inc. Trident Transport International, Inc. TransGuard Insurance Company of America, Inc. SUBSIDIARY OF TRANSGUARD INSURANCE COMPANY OF AMERICA, INC. ClaimGuard, Inc. Vanguard Insurance Agency, Inc. SUBSIDIARY OF VANGUARD INSURANCE AGENCY, INC. TransGuard General Agency, Inc. Americas Quality Van Lines, Inc. Anaheim Moving Systems, Inc. City Storage & Transfer, Inc. CMS Reinsurance, Ltd. CRS Acquisition Corp. CRS Title Agency, Inc. Corporate Transfer Service, Inc. Federal Traffic Service, Inc. Fleet Insurance Management, Inc. Frontrunner Worldwide, Inc. Global Van Lines, Inc. Global Worldwide, Inc. Great Falls North American, Inc. Lyon Van Lines, Inc. Lyon Worldwide Shipping, Inc. Move Management Services, Inc. NACAL, Inc. National Association of Independent Truckers, LLC Navtrans Container Lines, Inc. Navtrans International Freight Forwarding, Inc. Noram Forwarding, Inc. North American Forwarding, Inc. North American Logistics, Ltd. SUBSIDIARIES OF NORTH AMERICAN LOGISTICS, LTD. Manufacturing Support Services, LLC (51%) North American Moving & Storage, Inc. North American Van Lines of Texas, Inc. ProSource Properties, Ltd. Relocation Management Systems, Inc. SIRVA Relocation LLC StorEverything, Inc. U.S. Relocation Services, Inc. NORTH AMERICAN INTERNATIONAL HOLDING CORPORATION SUBSIDIARIES OF NORTH AMERICAN INTERNATIONAL HOLDING CORPORATION NA Acquisition (Ireland) SUBSIDIARIES OF NA ACQUISITION (IRELAND) The Baxendale Insurance Company Ltd. (Ire) (90%) ALNAV Platinum Group Inc. SUBSIDIARIES OF ALNAV PLATINUM GROUP INC. Westmount Moving & Storage, Inc. (Demanagement et Entreposage Westmount) North American Platinum Transportation Group Ltd. Allied Worldwide (Asia Pacific) Pty. Ltd. (Aus) SUBSIDIARIES OF ALLIED WORLDWIDE (ASIA PACIFIC) PTY. LTD. (AUS) Allied Pickfords Pty. Ltd. (Aus) SUBSIDIAIRES OF ALLIED PICKFORDS PTY. LTD. (AUS) Trans International Moving & Shipping Pty. Ltd. (Aus) AWG Australasia Superannuation Pty. Ltd. (Aus) Downward Pickfords (North Queensland) Pty. Ltd. (Aus) Allied Worldwide New Zealand Ltd. (NZ) SUBSIDIARIES OF ALLIED WORLDWIDE NEW ZEALAND LTD. (NZ) Allied Pickfords Ltd. (NZ) Allied Movers (NZ) Ltd. (NZ) Imaging Systems (NZ) Ltd. (NZ) NA (UK) GP Corporation NA (UK) Limited Partnership SUBSIDIARES NA (UK) LIMITED PARTNERSHIP NA Acquisition (UK) Limited SUBSIDIARIES OF NA ACQUISITION (UK) LIMITED Pickfords Ltd. (E&W) SUBSIDIARIES OF PICKFORDS LTD. (E&W) Pickfords 1999 Limited (E&W) SUBSIDIARIES OF PICKFORD 1999 LIMITED (E&W) The Baxendale Insurance Company Ltd. (Ire) (10%) A&N Removals Ltd. (E&W) Arthur Pierre (UK) Ltd. (E&W) Bullens Ltd. (E&W) Hoults Removals Ltd. (E&W) GB Crate Hire Ltd. (E&W) NA Moving Services, Ltd. (E&W) Pitt & Scott Ltd. (E&W) Allied Pickfords Ltd. (E&W) Pickfords Manhire Ltd. (E&W) Irish Security Archives Ltd. (NI) Moving Services Property Ltd. (E&W) Removedeal Ltd. (E&W) Irish Security Archives Ltd. (Ire) SUBSIDIARES OF IRISH SECURITY ARCHIVES LTD. (IRE) Allied Pickfords Ltd. (Ire) midiData Spedition GmbH midiData Logistik GmbH NAVTRANS International Speditions GmbH North American (UK) Ltd. Allied Arthur Pierre SA (Lux) Allied Pickfords KeS Kft (Hun) A.L. Movers Private Ltd. (India) Allied Pickfords LLC (UAE) Allied Pickfords Ltd. (Hong Kong) SUBSIDIARIES OF ALLIED PICKFORDS LTD. (HONG KONG) Pickfords Worldwide Moving Ltd. (HK) Pickfords Ltd. (HK) AWG Investment Asia Pacific Pte. Ltd. (Sing) SUBSIDIARIES OF AWG INVESTMENT ASIA PACIFIC PTE. LTD. Allied Pickfords (S) Pte. Ltd. (Sing) Allied Pickfords (M) Sdn Bhd (Mal) Pierre Finance (Nederland) Renting BV (Neth) Allied Pickfords BV (Neth) Allied Varekamp BV (Neth) Allied Pickfords Polska SP ZOO (Poland) Allied Pickfords sro (Czech) Allied Arthur Pierre NV (Belgium) Allied Arthur Pierre SA (France) Allied International SA (Spain) EX-23.2 36 a2002828zex-23_2.txt EXHIBIT 23.2 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in this Registration Statement on Form S-4 of North American Van Lines, Inc. of our report dated March 4, 2002 relating to the financial statements and financial statement schedule of North American Van Lines, Inc., which appears in such Registration Statement. We also consent to the references to us under the headings "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP May 20, 2002 EX-23.3 37 a2002828zex-23_3.txt EXHIBIT 23.3 EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm, formerly known as Ernst & Young, under the caption "Experts" and to the use of our report dated March 10, 2000, on the combined financial statements of NFC Moving Services Group for the year ended September 30, 1999 in Amendment No. 2 to the Registration Statement (Form S-4 No. 333-96233) and related Prospectus of North American Van Lines, Inc. for the registration of $150,000,000 of its 13 3/4% Senior Subordinated Notes Due 2009. /s/ Ernst & Young Ernst & Young LLP London, England May 21, 2002 -----END PRIVACY-ENHANCED MESSAGE-----