-----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, VWTpC+748mKXrK2kL3KC9EBKpYjSgAHHn+1B+amvbfJDhGtQ14Aw7aIQ7GCWO1Sy OPHXB81yLDyintARqoqDiQ== 0000950124-97-000130.txt : 19970114 0000950124-97-000130.hdr.sgml : 19970114 ACCESSION NUMBER: 0000950124-97-000130 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: USFREIGHTWAYS CORP CENTRAL INDEX KEY: 0000881791 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 363790696 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-19637 FILM NUMBER: 97504656 BUSINESS ADDRESS: STREET 1: 9700 HIGGINS RD STE 570 CITY: ROSEMONT STATE: IL ZIP: 60018 BUSINESS PHONE: 7086960200 MAIL ADDRESS: STREET 1: 9700 HIGGINS ROAD SUITE 570 CITY: ROSEMONT STATE: IL ZIP: 60018 FORMER COMPANY: FORMER CONFORMED NAME: TNT FREIGHTWAYS CORP DATE OF NAME CHANGE: 19930328 S-3 1 FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1997 REGISTRATION STATEMENT NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _________________ USFREIGHTWAYS CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 36-3790696 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 9700 HIGGINS ROAD, SUITE 570, ROSEMONT, ILLINOIS 60018 (847) 696-0200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) _________________ JOHN CAMPBELL CARRUTH USFREIGHTWAYS CORPORATION 9700 HIGGINS ROAD, SUITE 570 ROSEMONT, ILLINOIS 60018 (847) 696-0200 (Name, address, including zip code, and telephone number, including area code, of agent for service) _________________ Copies to: WILLIAM N. WEAVER, JR. ROBERT F. WALL MISTY S. GRUBER R. CABELL MORRIS, JR. SACHNOFF & WEAVER, LTD. WINSTON & STRAWN 30 S. WACKER DRIVE, 29TH FLOOR 35 W. WACKER DRIVE, SUITE 4200 CHICAGO, ILLINOIS 60606-7484 CHICAGO, ILLINOIS 60601 TELEPHONE NO. (312) 207-1000 TELEPHONE NO. (312) 558-5600 _________________ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. _________________ If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. / / If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / _______________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / _______________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / / 2
CALCULATION OF REGISTRATION FEE ========================================================================================================= TITLE OF EACH CLASS OF PROPOSED PROPOSED MAXIMUM SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF TO BE REGISTERED REGISTERED (1) PRICE PER UNIT(2) PRICE (2) REGISTRATION FEE - --------------------------------------------------------------------------------------------------------- Common Stock, par value $.01 per share 3,105,000 shares $27.125 $84,223,125 $28,074 =========================================================================================================
(1) Includes 405,000 shares to cover over-allotments, if any. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and (g). THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ 3 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED JANUARY 13, 1997 2,700,000 SHARES [LOGO] USFREIGHTWAYS CORPORATION COMMON STOCK ($.01 PAR VALUE) _________________ This Prospectus covers 2,700,000 shares of common stock, par value $.01 per share (the "Common Stock") of USFreightways Corporation (the "Company"). The Common Stock is traded on the Nasdaq National Market under the symbol "USFC." On January 10, 1997, the last reported sale price of the Common Stock on the Nasdaq National Market was $27 1/4 per share. See "Price Range of Common Stock." SEE "RISK FACTORS" BEGINNING ON PAGE ___ FOR A DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY POTENTIAL INVESTORS. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================== Price Proceeds to Underwriting to Public Discount (1) Company(2) - ------------------------------------------------------------------ Per Share.................. $ $ $ - ------------------------------------------------------------------ Total(3) .................. $ $ $ ==================================================================
(1) The Company has agreed to indemnify the several Underwriters against certain liabilities under the Securities Act of 1933. See "Underwriting." (2) Before deducting offering expenses payable by the Company estimated at $__________. (3) The Company has granted the Underwriters a 30-day option to purchase up to 405,000 additional shares of Common Stock solely to cover over-allotments, if any. If the Underwriters exercise this option in full, the total Price to Public, Underwriting Discount and Proceeds to Company will be $_______, $_______, and $_______, respectively. See "Underwriting." The shares of Common Stock are offered subject to receipt and acceptance by the Underwriters, to prior sale and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of share certificates will be made at the offices of Merrill Lynch & Co., New York, New York on or about __________, 1997. MERRILL LYNCH & CO. SCHRODER WERTHEIM & CO. The date of this Prospectus is ________, 1997. 4 - - INSIDE COVER [Map of Regional Areas] 5 AVAILABLE INFORMATION The Company has filed a Registration Statement on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (the "Commission") with respect to the shares offered by this Prospectus. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. Statements contained herein concerning the provisions of any documents are not necessarily complete and, in each instance, reference is made to the copy of such documents filed as an exhibit to the Registration Statement, and each such statement shall be deemed qualified in its entirety by such reference. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information filed by the Company with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New York 10048; and Midwest Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be obtained from the Public Reference Section of the Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company is subject to the electronic filing requirements of the Commission. Accordingly, pursuant to the rules and regulations of the Commission, certain documents, including annual and quarterly reports and proxy statements, filed by the Company with the Commission have been or will be filed electronically. The Commission maintains a World Wide Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission at http://www.sec.gov. The Company's Common Stock is listed on the Nasdaq National Market under the symbol USFC, and such reports, proxy statements and other information can also be inspected at the offices of the Nasdaq National Market, Reports Section, 1735 Street, N.W., Washington, D.C. 20006. This Prospectus does not contain all the information set forth in the Registration Statement and exhibits thereto which the Company has filed with the Commission under the Securities Act. INFORMATION INCORPORATED BY REFERENCE The Company's Annual Report on Form 10-K for the fiscal year ended December 30, 1995, the Company's Quarterly Reports on Form 10-Q for the quarters ended March 30, 1996, June 29, 1996 and September 28, 1996, the description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A declared effective February 12, 1992, and the Company's Current Report on Form 8-K dated as of January 7, 1997, each of which has been filed with the Commission, are incorporated by reference in this Prospectus. All documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Common Stock registered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified and superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom this Prospectus is delivered, upon written or oral request of such person, a copy of any and all of the information that has been incorporated by reference in this Prospectus, excluding exhibits. Such requests should be directed to USFreightways Corporation, 9700 Higgins Road, Suite 570, Rosemont, Illinois 60018, Attention: Senior Vice President, Finance. Telephone: (847) 696-0200. 6 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY ENGAGE IN PASSIVE MARKET TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE EXCHANGE ACT. SEE "UNDERWRITING." IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE NASDAQ NATIONAL MARKET, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information (including the consolidated financial statements and the notes thereto) included elsewhere in this Prospectus and incorporated by reference herein. Potential investors should carefully consider the factors set forth in the section entitled "Risk Factors" and are urged to read this Prospectus in its entirety. Unless otherwise indicated, all information contained in this Prospectus assumes (i) an offering price of $________ per share and (ii) no exercise of the Underwriters' over-allotment option. See "Underwriting." THE COMPANY OVERVIEW USFreightways Corporation (the "Company") is a leader in the regional less than truckload ("LTL") general transportation business. The Company owns a group of five regional, general commodities motor carriers, which focuses on overnight and second-day freight delivery and provides service throughout the continental United States, Hawaii, Alaska, and to certain points in Canada. Over 70% of the Company's regional shipments are delivered within one day and over 95% within two days. The Company's logistics subsidiaries provide specialized and dedicated services in management and distribution. For the fiscal year ended December 30, 1995, the Company generated $1.14 billion of consolidated operating revenue and $67.5 million of income from operations. During the four year period ended December 30, 1995, operating revenue and income from operations grew at a compound annual rate of 15.2% and 25.3%, respectively. Management believes that its growth to date and prospects reflect a strategy that capitalizes on evolving trends in the transportation industry. Typically, LTL carriers transport freight along scheduled routes from multiple shippers to multiple consignees utilizing a network of terminals, together with fleets of line-haul and pick-up and delivery tractors and trailers. Freight is picked up from customers by local drivers and consolidated for shipment. The freight is then loaded into intercity trailers and transferred by line-haul drivers to the terminal servicing the delivery area. There, the freight is transferred to local trailers and delivered to its destination by local drivers. At December 28, 1996, the Company maintained 239 terminals. During the year ended December 28, 1996, the Company transported 10.2 million shipments through the use of approximately 18,500 pieces of revenue equipment. With these capital assets, management believes the Company is able to effectively compete in the $19 billion LTL market, as estimated by Cass Information Systems. 2 7 LTL operators are generally categorized as regional, interregional or long-haul carriers, depending on the distance freight travels from pick-up to final delivery. Regional carriers usually have average lengths of haul of 500 miles or less and tend to provide either overnight or second-day service. Regional LTL carriers usually are able to load freight for direct transport to a destination terminal, thereby avoiding the costly and time-consuming use of breakbulk terminals (where freight is rehandled and reloaded to its ultimate destination). In contrast, long-haul LTL carriers (average lengths of haul in excess of 1,000 miles) operate networks of breakbulk and satellite terminals (hub and spoke systems) and rely heavily on interim handling of freight. Interregional carriers (500 to 1,000 miles per average haul) also rely on breakbulk terminals but to a lesser degree than long-haul carriers. Management believes that the regional LTL segment is the most attractive segment of the LTL trucking industry both because customer distribution strategies have shifted over time thereby increasing demand, and regional carriers tend to be more cost competitive for this type of freight. Whereas in the past shippers would send multiple shipments to multiple ultimate consignees throughout the country via long-haul LTL carriers, they are increasingly sending large quantities to a few distribution centers by truckload carriers and then shipping to the ultimate consignees via regional LTL carriers. Also, freight in general is moving over shorter distances. Approximately 70% of all general freight today is shipped 500 miles or less. Furthermore, management believes the regional LTL market has attractive growth prospects, as significant barriers to entry exist, thereby reducing competition from new entrants due to (i) the substantial capital requirements for terminals and revenue equipment, and (ii) the need for a large, well-coordinated and skilled work force. The Company is one of the largest regional LTL operators, having developed a network of regional carriers throughout the United States, while retaining and enhancing overall profitability. Management remains firmly committed to increasing operating profitability and enhancing shareholder value. The table below details the operating performance of the Company's regional carriers and logistics operations. Revenue and Operating Ratios Unaudited (Dollars in Thousands)
Operating Revenue Operating Ratio(a) Operating Revenue Operating Ratio(a) -------------------- -------------------- -------------------- -------------------- Three Months Ended Nine Months Ended ------------------------------------------ ------------------------------------------ 09/30/95 09/28/96 09/30/95 09/28/96 09/30/95 09/28/96 09/30/85 09/28/96 --------- --------- --------- --------- --------- --------- --------- --------- Operating Company (Region) - -------------------------- Holland (Midwest) $131,280 $153,725 91.9% 90.6% $397,250 $440,800 91.4% 91.4% Red Star (Northeast) 50,778 48,571 102.2 101.6 149,580 147,961 100.0 102.8 Reddaway (West Coast, Northwest) 43,395 46,383 90.6 92.2 121,666 132,506 92.6 94.6 Bestway (Southwest) 27,184 28,416 90.9 88.9 80,297 84,321 90.3 89.4 Dugan (Plains, South) (b) 19,304 38,543 93.6 96.1 57,099 111,755 92.5 97.8 Logistics Operations 16,798 22,969 94.8 94.7 46,852 62,073 95.4 97.3 Other 1,225 4,596 3,336 9,581 --------- --------- --------- --------- Total Operating Revenue $289,964 $343,203 $856,080 $988,997 ========= ========= ========= ========= Income from Operations $17,326 $22,528 $53,225 $50,171 ========= ========= ========= =========
(a) Operating ratio is operating expenses as a percentage of operating revenue. (b) Includes revenues resulting from the acquisition of the general commodities business of Transus, Inc., effective as of January 1, 1996. The Company believes that the increase in the demand for regional LTL transportation services is a result of two market phenomena: (i) an increase in shippers' desire to reduce costs in their supply chain; and (ii) an increase in customers' material and inventory turnover. Shippers are increasingly using regional distribution 3 8 centers, consolidating or eliminating warehouses and adopting other just-in-time or quick response distribution practices ("JIT/QR"). Industry sources estimate that the percentage of goods moved in the United States using JIT/QR as a percentage of the total is expected to be approximately 35% in 1997, a three-fold increase from the 13% of goods moved using such practices in 1990. The Company has addressed these changes in the patterns of distribution by forming two operating entities, Comet Transport and Logix, to respond to customers' evolving transportation needs. Comet Transport, an interregional truckload carrier, ships freight between the Company's regions and provides third party for-hire shipments. Logix, the Company's contract logistics subsidiary, enables the Company to offer its customers a single source for logistic management and dedicated carriage. STRATEGY Management's long-term operating and financial objectives include being the leading regional LTL carrier, recognized for its premier service, and enhancing its profitability. While significant accomplishments have been achieved since the Company was established, management believes the Company is well positioned to further these objectives. As a result, management has developed a growth strategy based on evolving customer and industry trends. Management believes these trends include: * An increasing emphasis by shippers toward limiting the number of individual carriers they use to provide transportation services. The effect of this "core carrier" focus is to increase the customer's leverage with and, at the same time, dependence on certain specific suppliers of transportation services; * Enhancing the quality and scope of the transportation services. This trend relates to not only traditional qualitative service benchmarks such as on-time service and claims-free delivery of goods, but also to increasing the information/technology associated with issues such as inventory management, billing and logistics; * Continued strong competition in the marketplace thereby elevating the importance of maintaining both a strong financial position and a unit cost advantage over other LTL providers; and * Further consolidation within the trucking industry as well as the possible convergence among suppliers of various modes of transportation services. Over the past several years, numerous mergers, acquisitions and joint ventures have been formed within the trucking arena. Management believes long-term benefits will accrue to the larger operators that successfully integrate companies that possess diverse operational, cultural and financial characteristics. The trends highlighted above have been and continue to be evolving in the trucking industry. Several years ago management embarked on a strategy to capitalize on these trends. Management believes the Company is well positioned to further exploit these opportunities. The Company's strategy, as described below, illustrates its historical success and future plans in pursuing its long-term financial and strategic objectives. (i) Continue Geographic Expansion. After expanding operations to all 50 states in 1994, the Company began focusing on increasing the density of coverage of its regional trucking companies, especially at USF Holland, its largest operating subsidiary, with approximately 46% of the Company's consolidated revenue in 1995. During 1995, the Company's regional LTL companies increased the number of terminals by 20 over a dozen states across the country. During 1996, the Company increased its number of terminals by seven, and began providing direct service into Ontario and Quebec, Canada, as well as container service to Guam and the Caribbean. Early in 1996, the Company dramatically increased density in the Southeast by acquiring the general commodities business of Transus, Inc. and merged this operation into USF 4 9 Dugan. In February 1996, the Company merged two of the most dominant carriers in their respective territories, United (covering the Northwest and Rocky Mountain states) and USF Reddaway (covering the West Coast). Management believes this consolidation has enhanced productivity and customer service capabilities of the newly consolidated USF Reddaway entity, which now has 55 terminals. (ii) Broaden Service Offerings. The Company also has expanded into new business activities through internal growth and acquisitions. Three examples include logistics, interregional LTL carriage and distribution. Logix, the Company's newly renamed contract logistics business, provides complete supply chain management services, from supplying raw materials to delivering products to customers. Logix provides integrated logistics solutions throughout the logistics pipeline, including dedicated carriage, contract warehousing, inventory management, customer service, order fulfillment, and freight management. Through client server platforms, Logix's systems utilize communication links with satellites and computers to manage transportation, dispatch and operations. In the initial design of a customer's logistics needs, Logix uses decision support software to provide solutions in such areas as transportation optimization, routing carrier selection, load planning and order optimization. In July, 1996, Logix acquired the Interamerican Group, a third party logistics provider primarily in the contract warehousing business, whose customers include Proctor & Gamble, Kimberly-Clark, Microsoft, Xerox, Alberto-Culver, and Becton Dickinson. In 1995, the Company broadened its service capabilities with the launch of Comet Transport, a premium, long-haul, expedited truckload carrier. Management believes Comet Transport's operations complement its regional LTL carriers by providing expedited service on interregional freight, improve its ability to meet demanding delivery schedules and make the Company more valuable to its customers, since the Company now offers integrated long-haul truckload and regional LTL service. Thirdly, the Company is positioning its USF Distribution Services business to meet new demands. The business collects and ships components to manufacturers and receives, sorts and moves merchandise from suppliers to retail stores. In 1996, USF Distribution opened a fully automated freight handling facility near Chicago. This facility integrates state-of-the-art bar-code scanning, automated sortation, full case order picking, and labeling systems to provide the customer speed, accuracy, and flexibility in getting product to the market. (iii) Develop Value-Added Technology. In an effort to continue to be a leader in service quality, the Company has made significant investments in value-added technology. Value-added is that which differentiates the Company's products by reducing costs to both the Company and its customers. The Company's strategy has been to invest in technology where a reasonable return can be achieved. The Company is continuing to upgrade its computer systems through implementation of a common operating platform and communications infrastructure across all operating companies. The Company now utilizes imaging systems that provide instant access to shipping and other customer related documents that can be retrieved and directly faxed in response to customer inquiries. Management believes its ability to integrate and leverage information technology will continue to be a significant factor in differentiating the Company from its competitors and that its ability to capture, consolidate and provide access to timely and accurate data will be as important to the Company's success as its ability to move freight. Management believes yields are enhanced through its investment in technology. (iv) Remain a Low-Cost Provider. As competition in the LTL industry remains fierce, management has executed an operating strategy of maintaining a low-cost structure to enhance profitability. In the first nine months of 1996, regional operating ratios ranged from a low of 89.4% (USF Bestway) to a high of 102.8% (USF Red Star). Excluding USF Red Star's operations, all regions produced positive operating margins. Management's success is best evidenced by the profitability 5 10 of its largest operation, USF Holland. USF Holland generated 45% of total operating revenue in the first nine months of 1996 with an operating ratio of 91.4%. This success is due in part to USF Holland's strong brand recognition in the LTL marketplace and its reputation for premier service quality. The Company has been disappointed by USF Red Star's high operating ratio. To restore profitability, management undertook a restructuring of its USF Red Star subsidiary that included closing terminals, implementing strict cost controls and increasing yields per shipment. The Company anticipates that USF Red Star will report a small operating profit for the fourth quarter of 1996. (v) Seek Opportunistic Acquisitions. The fragmentation that has historically characterized the trucking industry positions it for further consolidation, and management has implemented a strategy to capitalize on this trend. The recent acquisitions of Transus, Inc. and Interamerican Group are examples of the implementation of this strategy. Given the complexity associated with integrating operations, fleets and cultures into the Company, the Company has been very selective when evaluating opportunities. Management seeks acquisitions which enhance the Company's brand, expand its service base, afford a favorable return on capital and complement existing operations. Moreover, as customer demand shifts, the Company may determine to expand beyond its core LTL truck haulage services to other modes of transportation. (vi) Maintain Financial Flexibility. Management's strategy is to maintain financial flexibility through a strong balance sheet and access to the public capital markets. This flexibility allows the Company to be opportunistic in making selective acquisitions, purchasing equipment, investing in facilities or expanding its business. As of December 30, 1995, the Company had approximately 13,000 employees, of which 58% were members of unions. Approximately 88% of these union workers were employed by USF Holland and USF Red Star and belonged to the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Management believes relationships with its employees are good. The Company's executive offices are located at 9700 Higgins Road, Suite 570, Rosemont, Illinois 60018. The Company's telephone number is (847) 696-0200. 6 11 SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION
FISCAL YEAR ENDED ------------------------------------------------------------ 52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 1991 1993 1994 1994 1995 ---- ---- ---- ---- ---- (In thousands of dollars, except per share and operating statistics) STATEMENT OF OPERATIONS DATA: Operating Revenue $649,775 $774,678 $898,920 $1,016,464 $1,144,458 Income from operations 27,365 39,501 61,222 69,666 67,543 Interest expense, net (31) (1,632) (7,391) (8,417) (8,177) Other non-operating expense (210) (1,067) (1,683) (2,011) (878) -------- -------- -------- ---------- ---------- Net income from continuing operations before income taxes 27,124 36,802 52,148 59,238 58,488 Net income from continuing operations 14,814 20,804 28,545 33,356 33,338 Net income 14,872 6,902 27,348 32,065 33,338 Net income per share from continuing operations $0.59 $0.78 $1.25 $1.51 $1.51 Net income per share $0.59 $0.26 $1.20 $1.45 $1.51 Average shares outstanding 25,200 26,882 22,853 22,142 22,123 OPERATING STATISTICS: Total tons (000) 4,487 5,184 5,977 6,210 6,835 Total shipments (000) 7,015 7,934 8,762 9,045 10,187 Revenue equipment 11,087 12,877 14,479 16,171 18,481 Employees 8,811 9,721 11,089 12,184 13,187 NINE MONTHS ENDED ------------------- SEPT. 30 SEPT. 28 1995 1996 ---- ---- (In thousands of dollars, except per share and operating statistics) STATEMENT OF OPERATIONS DATA: Operating Revenue $856,080 $988,997 Income from operations 53,225 50,171 Interest expense, net (5,948) (8,584) Other non-operating expense (537) (516) -------- -------- Net income from continuing operations before income taxes 46,740 41,071 Net income from continuing operations 26,642 23,510 Net income 26,642 23,510 Net income per share from continuing operations $1.20 $1.05 Net income per share $1.20 $1.05 Average shares outstanding 22,144 22,312 OPERATING STATISTICS: Total tons (000) 5,052 5,761 Total shipments (000) 7,476 8,639 Revenue equipment 17,437 21,609 Employees 13,387 15,393 SEPTEMBER 28, 1996 ------------------------------------------- Actual As Adjusted ------ ----------- BALANCE SHEET DATA: Working Capital $57,394 Total assets 698,359 Long-term obligations, excluding current portion 189,111 Stockholders' equity 262,362
RISK FACTORS An investment in the Company's Common Stock involves a degree of risk. In determining whether to make an investment in the Common Stock, potential investors should consider carefully all of the information set forth and incorporated into this Prospectus and, in particular, the following factors. GENERAL ECONOMIC AND BUSINESS FACTORS The Company's business is dependent upon a number of factors that may have a material adverse effect on its results of operations, many of which are beyond the Company's control. These factors include excess capacity in the trucking industry, work stoppages by those Company employees who are members of unions, significant increases or rapid fluctuations in fuel prices and interest rates, to the extent not offset by increases in freight rates or 7 12 fuel surcharges. The Company's results of operations also are affected by global and national economic cycles and in customers' business cycles. In addition, the Company's results of operations are affected by seasonal factors such as post-holiday reductions in shipments and increased operating costs and higher fuel consumption in colder weather due to increased idle time. COMPETITION The trucking industry is extremely competitive and fragmented. The Company competes with many other LTL carriers of varying sizes and, to a lesser extent, with truckload carriers. Regional LTL carriers, including the Company's trucking subsidiaries, principally compete against other regional LTL carriers. To a lesser extent, they compete against interregional and long-haul LTL carriers, and overnight package companies. Significant barriers to entry into the regional LTL market exist as a result of the substantial capital requirements for terminals and revenue equipment and the need for a large, well-coordinated and skilled work force. In response to recent industry over-capacity, many LTL carriers have adopted discounting programs for shipping customers. Additionally, when new LTL competitors enter a geographic region, they often offer discounted prices to lure customers away from the Company's trucking subsidiaries. Such attempts to gain market share through rate reduction programs exert downward pressure on the industry's price structure and profit margins and have caused many LTL carriers to cease operations. ACQUISITIONS The growth of the Company has been, and may continue to be, dependent in part upon the acquisition of small-to-medium sized trucking and logistics companies throughout the United States. To date, the Company has been successful in identifying companies to acquire and in integrating such companies' operations into the Company's operations. The Company may face competition from transportation companies or other third parties for acquisition opportunities that become available. There can be no assurance that the Company will identify further acquisition candidates that will result in successful combinations in the future. Any future acquisitions by the Company may result in the incurrence of additional debt and amortization of expenses related to goodwill and other intangible assets, which could adversely affect the Company's profitability, or could involve the potentially dilutive issuance of additional equity securities. In addition, acquisitions involve numerous risks, including difficulties in the assimilation of the acquired company's operations, particularly in the period immediately following the consummation of such transactions, the diversion of the attention of the Company's management from other business concerns, the risk of entering into markets in which the Company has had no or only limited direct experience, and the potential loss of customers, key employees and drivers of the acquired company, all of which could have a material adverse effect on the Company's business and operating results. Although the Company does not have any commitments with respect to any acquisitions as of the date of this Prospectus, the Company continually evaluates acquisition opportunities as part of its growth strategy. REGULATION The Company is regulated by the United States Department of Transportation and by various state agencies. These regulatory authorities exercise broad powers, generally governing activities such as authorization to engage in motor carrier operations, operations, safety, financial reporting, and certain mergers, consolidations and acquisitions. In addition, the Company's operations are subject to various environmental laws and regulations dealing with the transportation, storage, presence, use, disposal and handling of hazardous materials, discharge of stormwater and underground fuel storage tanks. If the Company suffers a spill or other accident involving hazardous substances or if the Company were found to be in violation of applicable laws or regulations, it could have a material adverse effect on the Company's business and operating results. DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Prospectus, including all documents incorporated herein by reference contains forward-looking statements. Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise. The words "believe," "expect," "anticipate," 8 13 and "project" and similar expressions identify forward-looking statements, which speak only as of the date the statement is made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, information regarding revenues, income or loss, capital expenditures, acquisitions, plans for future operations, financing needs or plans, the impact of inflation and plans relating to services of the Company, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Statements in this Prospectus, including those set forth in "Risk Factors," and in "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 30, 1995, which is incorporated by reference herein, describe factors, among others, that could contribute to or cause such differences. USE OF PROCEEDS The net proceeds to be received by the Company from the sale of the 2,700,000 shares of Common Stock offered by the Company are estimated to be approximately $_________ (approximately $___________ if the Underwriters' over-allotment option is exercised in full), after deducting underwriting discounts and estimated expenses of the offering. The Company intends to apply the net proceeds of this offering to reduce its outstanding indebtedness under its existing revolving credit facility. This credit facility, which had an outstanding principal balance of $89.0 million at September 28, 1996, bears a rate of interest based on LIBOR and expires on September 30, 1999. The weighted average rate of interest on the outstanding balance at September 28, 1996 was 5.77%. The Company may in the future use amounts available under the credit facility for general corporate and working capital purposes, including investments in capital equipment and to fund acquisitions. Pending the use of proceeds as described above, the net proceeds will be invested in short-term interest bearing securities. PRICE RANGE OF COMMON STOCK The Company's Common Stock is traded on the Nasdaq National Market under the trading symbol "USFC." The following table sets forth the quarterly high and low sales prices of the Company's Common Stock as reported by the Nasdaq National Market. The last sale price of the Common Stock on January 10, 1997 was $27.250 per share. HIGH LOW ------- ------- 1995 - ---- First Quarter ....................................... $28.688 $20.500 Second Quarter ...................................... $25.000 $18.125 Third Quarter ....................................... $24.375 $17.750 Fourth Quarter ...................................... $21.125 $16.250 HIGH LOW ------- ------- 1996 - ---- First Quarter ....................................... $23.250 $18.250 Second Quarter ...................................... $24.250 $19.375 Third Quarter ....................................... $22.500 $16.750 Fourth Quarter ...................................... $28.250 $19.500 As of November 11, 1996, there were 22,545,210 shares of Common Stock outstanding, which were held by approximately ____ stockholders of record. 9 14 DIVIDEND POLICY Since July 2, 1992, the Company has paid a quarterly dividend of $0.093333 per share. Although it is the present intention of the Company to continue paying quarterly dividends, the timing, amount and form of future dividends will be determined by the board of directors and will depend, among other things, on the Company's results of operations, financial condition, cash requirements, certain legal requirements and other factors deemed relevant by the board of directors. SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth the selected consolidated financial data for the Company. The selected "Statement of Operations Data" and "Balance Sheet Data" presented below for, and as of the end of, each of the years in the five-year period ended December 30, 1995 are derived from consolidated financial statements of the Company, which consolidated financial statements have been audited by KPMG Peat Marwick LLP, independent certified public accountants. The selected "Statement of Operations Data" and "Balance Sheet Data" presented below for, and as of, the nine months ended September 30, 1995 and September 28, 1996 are derived from the unaudited interim consolidated condensed financial statements of the Company which, in the opinion of management, have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the financial data shown. The results of operations for the nine months ended September 28, 1996 are not necessarily indicative of the results to be expected for the year ended December 30, 1996. This information should be read in conjunction with the consolidated financial statements and the notes thereto incorporated herein by reference and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Annual Report on Form 10-K for the year ended December 30, 1995 and in the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 1996, both of which are incorporated by reference herein.
----------------------------------------------------------- ------------------------ AS OF AND FOR AS OF AND FOR FISCAL YEAR ENDED NINE MONTHS ENDED (UNAUDITED) ----------------------------------------------------------- ------------------------ (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) 52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 SEPT. 30 SEPT. 28 1991 1993 1994 1994 1995 1995 1996 -------- ---------- ---------- --------- ---------- ---------- --------- STATEMENT OF OPERATIONS DATA: Operating Revenue $649,775 $774,678 $898,920 $1,016,464 $1,144,458 $856,080 $988,997 Operating expenses: Salaries, wages and benefits 419,062 497,375 568,891 633,197 733,441 546,207 630,513 Purchased transportation 18,194 26,829 31,526 42,427 43,763 33,163 35,863 Operating expenses and supplies 83,621 97,729 109,525 125,936 144,702 107,655 133,592 Operating taxes and licenses 25,024 29,808 35,682 42,101 48,585 36,234 41,932 Insurance claims 11,745 13,369 16,039 18,012 17,556 13,749 17,010 Communication and utilities 9,387 10,024 10,489 12,247 13,337 9,937 11,475 Depreciation and equipment leases 34,036 37,623 44,209 47,519 50,866 37,332 48,099 Building and office equipment rents 9,021 10,690 11,361 13,485 13,283 9,962 11,554 Amortization of intangible assets 6,487 5,391 3,038 3,020 2,583 2,001 1,821 Other operating expenses 5,833 6,339 6,938 8,854 8,799 6,615 6,967 -------- ---------- --------- ------------ ---------- ---------- ----------- Total operating expenses 622,410 735,177 837,698 946,798 1,076,915 802,855 938,826 -------- ---------- --------- ------------ ---------- ---------- ----------- Income from operations 27,365 39,501 61,222 69,666 67,543 53,225 50,171 -------- ---------- --------- ------------ ---------- ---------- ----------- Non-operating income (expense): Interest expense (2,546) (2,024) (7,621) (9,081) (8,884) (6,491) (9,072) Interest income 2,515 392 230 664 707 543 488
10 15
-------------------------------------------------------- -------------------- AS OF AND FOR AS OF AND FOR FISCAL YEAR ENDED NINE MONTHS ENDED (UNAUDITED) --------------------------------------------------------- -------------------- (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) 52 WEEKS 53 WEEKS 52 WEEKS 52 WEEKS 52 WEEKS DEC. 28 JAN. 2 JAN. 1 DEC. 31 DEC. 30 SEPT. 30 SEPT. 28 1991 1993 1994 1994 1995 1995 1996 -------- ---------- ---------- -------- --------- --------- -------- Other, net (210) (1,067) (1,683) (2,011) (878) (537) (516) ------- --------- ------- -------- ------- ------- ------- Total non-operating expenses (241) (2,699) (9,074) (10,428) (9,055) (6,485) (9,100) ------- --------- ------- -------- ------- ------- ------- Net income from continuing operations before income taxes 27,124 36,802 52,148 59,238 58,488 46,740 41,071 Income tax expense (12,310) (15,998) (23,603) (25,882) 25,150) (20,098) (17,561) ------- --------- ------- -------- ------- ------- ------- Net income from continuing operations 14,814 20,804 28,545 33,356 33,338 26,642 23,510 Discontinued operations, net 58 288 (1,197) -- -- -- -- Extraordinary item, net -- -- -- (1,291) -- -- -- Cumulative effect of accounting change for income taxes -- (14,190) -- -- -- -- -- ------- --------- ------- -------- ------- ------- ------- Net income $14,872 $6,902 $27,348 $32,065 $33,338 $26,642 $23,510 ======= ========= ======= ======== ======= ======= ======= Net income per share from continuing operations $0.59 $0.78 $1.25 $1.51 $1.51 $1.20 $1.05 Net income per share $0.59 $0.26 $1.20 $1.45 $1.51 $1.20 $1.05 Average shares outstanding 25,200 26,882 22,853 22,142 22,123 22,144 22,312 BALANCE SHEET DATA: Working capital $23,442 $23,680 $25,140 $26,168 $30,127 $30,215 $57,394 Total assets 388,447 406,837 460,780 501,002 578,194 569,604 698,359 Long-term obligations, less current portion 12,691 47,024 124,085 105,667 137,333 126,417 189,111 Stockholders' equity 205,780 229,779 180,509 208,094 233,152 227,935 262,362
11 16 MANAGEMENT The following table sets forth information with respect to the directors and executive officers of the Company:
NAME AGE POSITION - ---------------------- --- ---------------------------------- Morley Koffman 66 Chairman of the Board of Directors John Campbell Carruth 66 Chief Executive Officer, President and Director William N. Weaver, Jr. 62 Director Robert P. Neuschel 78 Director Neil A. Springer 58 Director Robert V. Delaney 61 Director John W. Puth 68 Director Christopher L. Ellis 52 Senior Vice President, Finance and Chief Financial Officer
MORLEY KOFFMAN, has been a director of the Company since December 1991. He was elected Chairman of the Board in January of 1992. Mr. Koffman was a member of the law firm of Freeman & Company of Vancouver, British Columbia until March 31, 1993. Effective April 1, 1993, he became a member of Koffman Birnie & Kalef. Mr. Koffman is a director of Ainsworth Lumber Co. Ltd. and Westar Group Ltd. JOHN CAMPBELL CARRUTH, was appointed as the Company's Chief Executive Officer and President in June 1991 and has been a director of the Company since December 1991. Mr. Carruth was Chief Executive Officer and President of TNT Transport Group Inc., a subsidiary of TNT Limited, the Company's former parent corporation, from 1985 to 1992. WILLIAM N. WEAVER, JR., has been a director of the Company and the Company's Assistant Secretary since March 1992. Mr. Weaver is a member of the law firm of Sachnoff & Weaver, Ltd., an Illinois professional corporation, which is outside counsel to the Company. Mr. Weaver has practiced law in the State of Illinois since 1964 and serves as a director of System Software Associates, Inc. as well as several privately-held corporations. He holds an A.B. degree from Oberlin College and a J.D. from John Marshall Law School. ROBERT P. NEUSCHEL, has been a director of the Company since December 1991. Since 1978, Professor Neuschel has been Professor of Management at the J. L. Kellogg Graduate School of Management, where he is currently Professor of Corporate Governance and Associate Dean for Advisory Board Relations. From 1978 to December 1991, he was Managing Director of the Transportation Center at Northwestern University. NEIL A. SPRINGER, has been a director of the Company since December 1991. He has been Managing Director of Springer Souder & Associates since June 1994. He was Senior Vice President of Slayton International Inc. From September 1992 to May 1994. He was President-Central Region of Alexander Proudfoot Company from August 1991 to August 1992. Mr. Springer is a director of Idex Corporation and Dorsey Trailers, Inc. ROBERT V. DELANEY, has been a director of the Company since December 1991. Mr. Delaney has been an Executive Vice President of Cass Information Systems since January 1990. 12 17 JOHN W. PUTH, has been a director of the Company since January 1992. Mr. Puth has been President of J. W. Puth Associates since December 1987, Chairman of American Lantern since December 1987, and Chairman of the Executive Committee of Sullivan Graphics since June 1992. Mr. Puth is a director of A.M. Castle & Co., Allied Products Co., Brockway Standard Holdings Corporation, L. B. Foster Inc., Lindberg Corporation, System Software Associates, Inc. and several private manufacturing companies. CHRISTOPHER L. ELLIS, has been Senior Vice President, Finance and Chief Financial Officer of the Company since June 1991. Previously, he served as Vice President, Finance for the predecessor corporation of the Company. UNDERWRITING Subject to the terms and conditions set forth in an underwriting agreement among the Company and the Underwriters (the "Underwriting Agreement"), the Company has agreed to sell to each of the Underwriters named below (the "Underwriters"), and each of the Underwriters has severally agreed to purchase from the Company, the aggregate number of shares of Common Stock set forth opposite its name below: NUMBER OF UNDERWRITERS SHARES - ------------ --------- Merrill Lynch, Pierce, Fenner & Smith. Incorporated............................. Schroder Wertheim & Co. Incorporated................. --------- Total.................................... 2,700,000 ========= In the Underwriting Agreement, the Underwriters have severally agreed, subject to the terms and conditions set forth therein, to purchase all of the shares of Common Stock offered hereby (other than those subject to the over-allotment option described below) if any are purchased. The Company has been advised by the Underwriters that the Underwriters propose initially to offer the shares of Common Stock to the public at the public offering price set forth on the cover page of this Prospectus, and to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share to certain other dealers. After commencement of the offering, the price to the public and concessions to dealers may be changed. The Company has granted the Underwriters an option, exercisable within 30 days of the date of this Prospectus, to purchase up to 405,000 additional shares of Common Stock to cover over-allotments, if any, at the price to the public less the underwriting discount set forth on the cover page of this Prospectus. To the extent that the Underwriters exercise such option, in whole or in part, each Underwriter will have a firm commitment, subject to certain conditions, to purchase the same proportion of the option shares that the number of shares of Common Stock to be purchased by such Underwriter in the above table bears to the total number of shares of Common Stock offered by the Underwriters hereby. The Underwriting Agreement provides that the Company will indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act, or contribute to payments the Underwriters may be required to make in respect thereof. The Company has agreed with the Underwriters that they will not offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offering of, any shares of Common Stock or any securities convertible into, or exchangeable for, shares of Common Stock or any securities convertible into, or exchangeable 13 18 for, shares of Common Stock for a period of 90 days from the date of this Prospectus, without the prior written consent of Merrill Lynch & Co., except for grants of options and issuance and sales of Common Stock issued pursuant to any existing stock option or other benefit or incentive plans maintained for its officers, directors or employees or the issuance of Common Stock in connection with acquisitions. In connection with this offering, certain Underwriters may engage in passive market making transactions in the Common Stock on the Nasdaq National Market in accordance with Rule 10b-6A under the Exchange Act, during the two business day period before commencement of offers or sales of the Common Stock offered hereby. Passive market making transactions must comply with certain volume and price limitations and be identified as such. In general, a passive market maker may display its bid at a price not in excess of the highest independent bid for the security and if all independent bids are lowered below the passive market maker's bid then such bid must be lowered when certain purchase limits are exceeded. LEGAL MATTERS The validity of the shares of Common Stock and certain other legal matters in connection with the offering will be passed upon for the Company by Sachnoff & Weaver, Ltd., Chicago, Illinois. Mr. William N. Weaver, Jr., a shareholder of Sachnoff & Weaver, Ltd. serves as a director of the Company. Certain legal matters relating to this offering will be passed upon for the Underwriters by Winston & Strawn, Chicago, Illinois. EXPERTS The consolidated financial statements of USFreightways Corporation as of December 30, 1995 and December 31, 1994 and for each of the years in the three-year period ended December 30, 1995 have been incorporated herein by reference in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, also incorporated by reference herein, and given upon the authority of said firm as experts in accounting and auditing. 14 19 BACK INSIDE COVER [Pictures of Company Facilities] 20 No dealer, salesperson or other individual has been authorized to give any information or to make any representation other than those contained or incorporated by reference in this Prospectus in connection with the offer made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or the Underwriters. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstance, create any implication that there has been no change in the affairs of the Company since the date as of which information is given in this Prospectus. This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. ______________________ TABLE OF CONTENTS PAGE Available Information..................................... Information Incorporated by Reference............................................ Prospectus Summary........................................ The Company............................................... Summary of Consolidated Financial and Operating Information............................... Risk Factors.............................................. Use of Proceeds........................................... Price Range of Common Stock............................... Dividend Policy........................................... Selected Consolidated Financial Data...................... Management................................................ Underwriting.............................................. Legal Matters............................................. Experts................................................... 2,700,000 SHARES USFREIGHTWAYS CORPORATION COMMON STOCK ($.01 PAR VALUE) ______________________ P R O S P E C T U S ______________________ MERRILL LYNCH & CO. SCHRODER WERTHEIM & CO. ______________________ _____________, 1997 21 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the costs and expenses (other than underwriting discounts and commissions) payable by the Company in connection with the sale of the Common Stock being registered hereby. All of the amounts shown are estimated, except the SEC registration fee, the NASD filing fee and the Nasdaq National Market supplemental listing fee. SEC registration fee ................................ $28,074.00 NASD filing fee ..................................... 8,922.00 (+)Nasdaq National Market supplemental listing fee .. -- (+)Printing expenses ................................ -- (+)Legal fees and expenses .......................... -- (+)Accounting fees and expenses ..................... -- (+)Blue Sky fees and expenses ....................... -- (+)Miscellaneous expenses ........................... -- Total ....................................... $ ========== - --------------- (+) To be filed by Amendment. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 145 of the General Corporation Law of the State of Delaware permits indemnification of directors, officers, employees and agents of corporations under certain conditions and subject to certain limitations. Section 13.1 of Article Thirteen of the Company's By-Laws provides for indemnification of any director, officer, employee or agent of the Company, or any person serving in the same capacity in any other enterprise at the request of the Company, under certain circumstances. Article Six of the Company's Amended and Restated Certificate of Incorporation eliminates the liability of directors of the Company under certain circumstances for breaches of fiduciary duty to the Company and its shareholders. Directors and officers of the Company are insured, at the expense of the Registrant, against certain liabilities which might arise out of their employment and which might not be subject to indemnification under the By-Laws. II-1 22 ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed herewith or incorporated herein by reference. EXHIBIT NUMBER DESCRIPTION OF EXHIBITS ------ ----------------------- 1.1 Form of Underwriting Agreement 4.2 Form of Indenture dated as of May 1, 1993 between USFreightways Corporation (formerly known as TNT Freightways Corporation) and Harris Trust and Savings Bank, as Trustee (incorporated by reference from USFreightways Corporation's Registration Statement on Form S-1, filed on April 16, 1993, Registration No. 33-61134. (+)5 Opinion of Sachnoff & Weaver, Ltd. 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5) 24 Powers of Attorney (included on signature page) - --------------- (+) To be filed by Amendment. ITEM 17 UNDERTAKINGS The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-2 23 In addition, the Company hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 24 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, USFreightways Corporation certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Registration Statement on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Rosemont, State of Illinois, on January 10, 1997. USFREIGHTWAYS CORPORATION By: /s/ John Campbell Carruth ---------------------------------- John Campbell Carruth, Chief Executive Officer, President and Director POWER OF ATTORNEY Each person whose signature appears below hereby authorizes and appoints, John Campbell Carruth and Christopher L. Ellis, and each of them, with full power of substitution and full power to act without the other, as his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such person and in such person's name, place and stead, and to execute in the name on behalf of each person, individually and in each capacity stated below, and to sign and file any and all amendments to this Registration Statement with the Securities and Exchange Commission. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated: Signature Title Date - -------------------------- ------------------------------ ---------------- /s/ Morley Koffman Chairman of the Board January 10, 1997 - -------------------------- of Directors Morley Koffman /s/ John Campbell Carruth Chief Executive Officer, January 10, 1997 - -------------------------- President and Director John Campbell Carruth (Principal Executive Officer) /s/ William N. Weaver, Jr. Director January 10, 1997 - -------------------------- William N. Weaver, Jr. /s/ Robert P. Neuschel Director January 10, 1997 - -------------------------- Robert P. Neuschel /s/ Neil A. Springer Director January 10, 1997 - -------------------------- Neil A. Springer /s/ Robert V. Delaney Director January 10, 1997 - -------------------------- Robert V. Delaney /s/ John W. Puth Director January 10, 1997 - -------------------------- John W. Puth /s/ Christopher L. Ellis Senior Vice President, January 10, 1997 - -------------------------- Finance and Chief Christopher L. Ellis Financial Officer (Principal Financial Officer) /s/ Robert S. Owen Controller January 10, 1997 - -------------------------- (Principal Accounting Officer) Robert S. Owen 25 EXHIBIT INDEX The following documents are filed herewith or incorporated herein by reference. EXHIBIT NUMBER DESCRIPTION OF EXHIBITS - ------- ------------------------------ 1.1 Form of Underwriting Agreement 4.2 Form of Indenture dated as of May 1, 1993 between USFreightways Corporation (formerly known as TNT Freightways Corporation) and Harris Trust and Savings Bank, as Trustee (incorporated by reference from USFreightways Corporation's Registration Statement on Form S-1, filed on April 16, 1993, Registration No. 33-61134. (+)5 Opinion of Sachnoff & Weaver, Ltd. 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of Sachnoff & Weaver, Ltd. (included in Exhibit 5) 24 Powers of Attorney (included on signature page) - --------------- (+) To be filed by Amendment. EX-1.1 2 UNDERWRITING AGREEMENT 1 USFREIGHTWAYS CORPORATION (a Delaware corporation) 2,700,000 Shares of Common Stock PURCHASE AGREEMENT Dated: ________, 1997 2 TABLE OF CONTENTS PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 3 (a) Representations and Warranties by the Company . . . . . . . . . . . . . 3 (i) Compliance with Registration Requirements . . . . . . . . . . . 3 (ii) Incorporated Documents . . . . . . . . . . . . . . . . . . . . 4 (iii) Independent Accountants . . . . . . . . . . . . . . . . . . . . 4 (iv) Financial Statements . . . . . . . . . . . . . . . . . . . . . 4 (v) No Material Adverse Change in Business . . . . . . . . . . . . 4 (vi) Good Standing of the Company . . . . . . . . . . . . . . . . . 5 (vii) Good Standing of Subsidiaries . . . . . . . . . . . . . . . . . 5 (viii) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 5 (ix) Authorization of Agreement . . . . . . . . . . . . . . . . . . 5 (x) Authorization and Description of Securities . . . . . . . . . . 6 (xi) Absence of Defaults and Conflicts . . . . . . . . . . . . . . . 6 (xii) Absence of Labor Dispute . . . . . . . . . . . . . . . . . . . 6 (xiii) Absence of Proceedings . . . . . . . . . . . . . . . . . . . . 7 (xiv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . . . . . 7 (xv) Possession of Intellectual Property . . . . . . . . . . . . . . 7 (xvi) Absence of Further Requirements . . . . . . . . . . . . . . . . 7 (xvii) Possession of Licenses and Permits . . . . . . . . . . . . . . 8 (xviii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . 8 (xix) Compliance with Cuba Act . . . . . . . . . . . . . . . . . . . 8 (xx) Investment Company Act . . . . . . . . . . . . . . . . . . . . 8 (xxi) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 9 (b) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 2. Sale and Delivery to Underwriters; Closing . . . . . . . . . . . . . . . 9 (a) Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (b) Option Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 (c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (d) Denominations; Registration . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 3. Covenants of the Company. . . . . . . . . . . . . . . . . . . . . . . . 11 (a) Compliance with Securities Regulations and Commission Requests . . . . . 11 (b) Filing of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (c) Delivery of Registration Statements . . . . . . . . . . . . . . . . . . 11 (d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . . . . . . 12 (e) Continued Compliance with Securities Laws . . . . . . . . . . . . . . . 12 (f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . . . . . . 12 (g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 -i-
3 (h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 (i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 (j) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . 13 (k) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 13 SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 13 (a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 (b) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 14 SECTION 5. Conditions of Underwriters' Obligations . . . . . . . . . . . . . . . . 14 (a) Effectiveness of Registration Statement . . . . . . . . . . . . . . . . 14 (b) Opinion of Counsel for Company . . . . . . . . . . . . . . . . . . . . . 14 (c) Opinion of Counsel for Underwriters . . . . . . . . . . . . . . . . . . 15 (d) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 15 (e) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . . . . . . 15 (f) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . 15 (g) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . 16 (h) No Objection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 (i) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 (j) Conditions to Purchase of Option Securities . . . . . . . . . . . . . . 16 (i) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 16 (ii) Opinion of Counsel for Company . . . . . . . . . . . . . . . . 16 (iii) Opinion of Counsel for Underwriters . . . . . . . . . . . . . . 16 (iv) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . 16 (k) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 17 (l) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 17 SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 (a) Indemnification of Underwriters . . . . . . . . . . . . . . . . . . . . 17 (b) Indemnification of Company, Directors and Officers . . . . . . . . . . . 18 (c) Actions against Parties; Notification . . . . . . . . . . . . . . . . . 18 (d) Settlement without Consent if Failure to Reimburse . . . . . . . . . . . 19 SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 8. Representations, Warranties and Agreements to Survive Delivery . . . . . 20 SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 21 (a) Termination; General . . . . . . . . . . . . . . . . . . . . . . . . . . 21 (b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 SECTION 10. Default by One or More of the Underwriters . . . . . . . . . . . . . . . 21 SECTION 11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-ii- 4 SECTION 12. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 SECTION 13. Governing Law and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 SECTION 14. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 SCHEDULES Schedule A - List of Underwriters . . . . . . . . . . . . . . . Sch A-1 Schedule B - Pricing Information . . . . . . . . . . . . . . . Sch B-1 Schedule C - List of Subsidiaries . . . . . . . . . . . . . . . Sch C-1 Schedule D - List of Persons subject to Lock-up . . . . . . . . Sch D-1 EXHIBITS Exhibit A - Form of Opinion of Company's Counsel and Form of Opinion of Company's Special Regulatory Counsel . . A-1 Exhibit B - Form of Lock-up Letter . . . . . . . . . . . . . . . . B-1
-iii- 5 Draft of 1/7/97 USFREIGHTWAYS CORPORATION (a Delaware corporation) 2,700,000 Shares of Common Stock (Par Value $.01 Per Share) PURCHASE AGREEMENT __________, 1997 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated Schroder Wertheim & Co. Incorporated as Representative(s) of the several Underwriters c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: USFreightways Corporation, a Delaware corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in Schedule A hereto (collectively, the "Underwriters", which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch and Schroder Wertheim & Co. Incorporated are acting as representative(s) (in such capacity, the "Representative(s)"), with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Common Stock, par value $.01 per share, of the Company ("Common Stock") set forth in said Schedule A, and with respect to the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 405,000 additional shares of Common Stock to cover over-allotments, if any. The aforesaid 2,700,000 shares of Common Stock (the "Initial Securities") to be purchased by the Underwriters and all or any part of the 405,000 shares of Common Stock subject to the option described in Section 2(b) hereof (the "Option Securities") are hereinafter called, collectively, the "Securities". 6 The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representative(s) deem(s) advisable after this Agreement has been executed and delivered. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-_____) covering the registration of the Securities under the Securities Act of 1933, as amended (the "1933 Act"), including the related preliminary prospectus or prospectuses. Promptly after execution and delivery of this Agreement, the Company will either (i) prepare and file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The information included in such prospectus or in such Term Sheet, as the case may be, that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each prospectus used before such registration statement became effective, and any prospectus that omitted, as applicable, the Rule 430A Information or the Rule 434 Information, that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a "preliminary prospectus." Such registration statement, including the exhibits thereto, schedules thereto, if any, and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became effective and including the Rule 430A Information and the Rule 434 Information, as applicable, is herein called the "Registration Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b) Registration Statement," and after such filing the term "Registration Statement" shall include the Rule 462(b) Registration Statement. The final prospectus, including the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for use in connection with the offering of the Securities is herein called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the preliminary prospectus dated ______________, 1997 together with the Term Sheet and all references in this Agreement to the date of the Prospectus shall mean the date of the Term Sheet. For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the -2- 7 filing of any document under the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the Registration Statement, such preliminary prospectus or the Prospectus, as the case may be. SECTION 1. Representations and Warranties. (a) Representations and Warranties by the Company. The Company represents and warrants to each Underwriter as of the date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees with each Underwriter, as follows: (i) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective and at the Closing Time (and, if any Option Securities are purchased, at the Date of Delivery), the Registration Statement, the Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto [(including any prospectus wrapper)], at the time the Prospectus or any such amendment or supplement was issued and at the Closing Time (and, if any Option Securities are purchased, at the Date of Delivery), included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If Rule 434 is used, the Company will comply with the requirements of Rule 434. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through Merrill Lynch expressly for use in the Registration Statement or Prospectus. Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the -3- 8 Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (ii) Incorporated Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective, at the time the Prospectus was issued and at the Closing Time (and if any Option Securities are purchased, at the Date of Delivery), did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (iii) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Registration Statement are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iv) Financial Statements. The financial statements included in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement. (v) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) except for regular quarterly dividends on the Common Stock in amounts per share that are consistent with past practice, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. -4- 9 (vi) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (vii) Good Standing of Subsidiaries. Each "significant subsidiary" of the Company (as such term is defined in Rule 1-02 of Regulation S-X) and ____________, __________ and _________ (each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise disclosed in the Registration Statement, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. The only subsidiaries of the Company are (a) the subsidiaries listed on Schedule C hereto and (b) certain other subsidiaries which, considered in the aggregate as a single Subsidiary, do not constitute a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X. (viii) Capitalization. The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus). The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (ix) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company. -5- 10 (x) Authorization and Description of Securities. The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued, fully paid and non-assessable; the Common Stock conforms to all statements relating thereto contained in the Prospectus and such description conforms to the rights set forth in the instruments defining the same; no holder of the Securities will be subject to personal liability by reason of being such a holder; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. (xi) Absence of Defaults and Conflicts. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any subsidiary is subject (collectively, "Agreements and Instruments") except for such defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, including, without limitation, the Interstate Commerce Commission ("ICC"), the United States Department of Transportation ("DOT") or any applicable state highway and transportation agency, having jurisdiction over the Company or any subsidiary or any of their assets, properties, or operations. As used herein, a "Repayment Event" means any event or condition that gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any subsidiary. (xii) Absence of Labor Dispute. No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees -6- 11 of any of its or any subsidiary's principal suppliers, manufacturers, customers or contractors, which, in either case, may reasonably be expected to result in a Material Adverse Effect. (xiii) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, including, without limitation, the ICC, the DOT or any applicable state highway and transportation agency, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any subsidiary, that is required to be disclosed in the Registration Statement (other than as disclosed therein), or that might reasonably be expected to result in a Material Adverse Effect, or that might reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder; the aggregate of all pending legal or governmental proceedings to which the Company or any subsidiary is a party or of which any of their respective property or assets is the subject that are not described in the Registration Statement, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect. (xiv) Accuracy of Exhibits. There are no contracts or documents that are required to be described in the Registration Statement, the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto that have not been so described and filed as required. (xv) Possession of Intellectual Property. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances that would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect. (xvi) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations or state securities laws. -7- 12 (xvii) Possession of Licenses and Permits. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies, including, without limitation, the ICC, the DOT and any applicable state highway and transportation agencies, that are necessary to conduct the business now operated by them; the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses that singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect; and neither the Company nor any of its subsidiaries is in violation of any law, ordinance, administrative or governmental rule or regulation or court decree applicable to it, including, without limitation, the ICC, the DOT or any applicable state highway and transportation agency, that singly or in the aggregate would result in a Material Adverse Effect. (xviii) Title to Property. The Company and its subsidiaries have good and marketable title to all real property owned by the Company and its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Prospectus or (b) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the Prospectus, are in full force and effect, and neither the Company nor any subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease. (xix) Compliance with Cuba Act. The Company has complied with, and is and will be in compliance with, the provisions of that certain Florida act relating to disclosure of doing business with Cuba, codified as Section 517.075 of the Florida statutes, and the rules and regulations thereunder (collectively, the "Cuba Act") or is exempt therefrom. (xx) Investment Company Act. The Company is not, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be, an "investment company" or an entity "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act"). -8- 13 (xxi) Environmental Laws. Except as described in the Registration Statement and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws. (b) Officer's Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representative(s) or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby. SECTION 2. Sale and Delivery to Underwriters; Closing. (a) Initial Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule B, the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities that such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof. (b) Option Securities. In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, severally and not jointly, to purchase up to an additional 375,000 shares of Common Stock at the price per share set forth in Schedule B, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The option hereby granted will expire 30 days -9- 14 after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments that may be made in connection with the offering and distribution of the Initial Securities upon notice by the Representative(s) to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (a "Date of Delivery") shall be determined by the Representative(s), but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject in each case to such adjustments as the Representative(s) in their discretion shall make to eliminate any sales or purchases of fractional shares. (c) Payment. Payment of the purchase price for, and delivery of certificates for, the Initial Securities shall be made at the offices of Sachnoff & Weaver, Ltd., 30 S. Wacker Dr., 29th Floor, Chicago, Illinois, or at such other place as shall be agreed upon by the Representative(s) and the Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representative(s) and the Company (such time and date of payment and delivery being herein called "Closing Time"). In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates for, such Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representative(s) and the Company, on each Date of Delivery as specified in the notice from the Representative(s) to the Company. Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representative(s) for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representative(s), for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, that it has agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder. (d) Denominations; Registration. Certificates for the Initial Securities and the Option Securities, if any, shall be in such denominations and registered in such names as the Representative(s) may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be. The certificates for the Initial Securities and the -10- 15 Option Securities, if any, will be made available for examination and packaging by the Representative(s) in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. SECTION 3. Covenants of the Company. The Company covenants with each Underwriter as follows: (a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A or Rule 434, as applicable, and will notify the Representative(s) immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (b) Filing of Amendments. The Company will give the Representative(s) notice of its intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Representative(s) with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representative(s) or counsel for the Underwriters shall object. (c) Delivery of Registration Statements. The Company has furnished or will deliver to the Representative(s) and counsel for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Representative(s), without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be -11- 16 identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. (e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. (f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative(s) may designate and to maintain such qualifications in effect for a period of not less than one year from the later of the effective date of the Registration Statement and any Rule 462(b) Registration Statement; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such -12- 17 jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement and any Rule 462(b) Registration Statement. (g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act. (h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under "Use of Proceeds". (i) Listing. The Company will use its best efforts to effect and maintain the quotation of the Securities on the Nasdaq National Market and will file with the Nasdaq National Market all documents and notices required by the Nasdaq National Market of companies that have securities that are traded in the over-the-counter market and quotations for which are reported by the Nasdaq National Market. (j) Restriction on Sale of Securities. During a period of 120 days from the date of the Prospectus, the Company will not, without the prior written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any share of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the Prospectus, (C) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee benefit plans of the Company referred to in the Prospectus or (D) any shares of Common Stock issued pursuant to any non-employee director stock plan or dividend reinvestment plan. (k) Reporting Requirements. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations. SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as -13- 18 originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement, any Agreement among Underwriters and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheets and of the Prospectus and any amendments or supplements thereto, (vii) the preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of any transfer agent or registrar for the Securities and (ix) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by the National Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Securities and (x) the fees and expenses incurred in connection with the inclusion of the Securities in the Nasdaq National Market. (b) Termination of Agreement. If this Agreement is terminated by the Representative(s) in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. SECTION 5. Conditions of Underwriters' Obligations. The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: (a) Effectiveness of Registration Statement. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing the Rule 430A Information shall have been filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet shall have been filed with the Commission in accordance with Rule 424(b). (b) Opinions of Counsel for Company. At Closing Time, the Representative(s) shall have received the favorable opinions, dated as of Closing Time, of (i) Sachnoff & -14- 19 Weaver, Ltd., counsel for the Company, and (ii) [ ], special regulatory counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters each to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request. (c) Opinion of Counsel for Underwriters. At Closing Time, the Representative(s) shall have received the favorable opinion, dated as of Closing Time, of Winston & Strawn, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to the matters set forth in clauses (i), (ii), (v), (vi) (solely as to preemptive or other similar rights arising by operation of law or under the charter or by-laws of the Company), (viii) through (x), inclusive, (xiii), (xv) (solely as to the information in the Prospectus under "Description of Capital Stock --Common Stock") and the penultimate paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, and the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to the Representative(s). Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. (d) Officers' Certificate. At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representative(s) shall have received a certificate of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1(a) hereof are true and correct with the same force and effect as though expressly made at and as of Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or are contemplated by the Commission. (e) Accountant's Comfort Letter. At the time of the execution of this Agreement, the Representative(s) shall have received from KPMG Peat Marwick LLP a letter dated such date, in form and substance satisfactory to the Representative(s), together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. -15- 20 (f) Bring-down Comfort Letter. At Closing Time, the Representative(s) shall have received from KPMG Peat Marwick LLP a letter, dated as of Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section, except that the specified date referred to shall be a date not more than three business days prior to Closing Time. (g) Approval of Listing. At Closing Time, the Securities shall have been approved for inclusion in the Nasdaq National Market, subject only to official notice of issuance. (h) No Objection. The NASD has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements. (i) Lock-up Agreements. At the date of this Agreement, the Representative(s) shall have received an agreement substantially in the form of Exhibit B hereto signed by the persons listed on Schedule D hereto. (j) Conditions to Purchase of Option Securities. In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company or any subsidiary of the Company hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representative(s) shall have received: (i) Officers' Certificate. A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains true and correct as of such Date of Delivery. (ii) Opinions of Counsel for Company. The favorable opinions of (i) Sachnoff & Weaver, Ltd., counsel for the Company, and (ii) [ ], special regulatory counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise each to the same effect as the opinions required by Section 5(b) hereof. (iii) Opinion of Counsel for Underwriters. The favorable opinion of Winston & Strawn, counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof. (iv) Bring-down Comfort Letter. A letter from KPMG Peat Marwick LLP, in form and substance satisfactory to the Representative(s) and dated such Date of -16- 21 Delivery, substantially in the same form and substance as the letter furnished to the Representative(s) pursuant to Section 5(f) hereof, except that the "specified date" in the letter furnished pursuant to this paragraph shall be a date not more than five days prior to such Date of Delivery. (k) Additional Documents. At Closing Time and at each Date of Delivery, counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representative(s) and counsel for the Underwriters. (l) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities, on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representative(s) by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and remain in full force and effect. SECTION 6. Indemnification. (a) Indemnification of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, -17- 22 or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Merrill Lynch expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Merrill Lynch expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability that it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of -18- 23 more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) (ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement. SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein; then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to the aggregate initial public offering price of the Securities as set forth on such cover. -19- 24 The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters. -20- 25 SECTION 9. Termination of Agreement. (a) Termination; General. The Representative(s) may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representative(s), impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the Nasdaq National Market, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a banking moratorium has been declared by either Federal or New York authorities. (b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such termination and remain in full force and effect. SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase the Securities that it or they are obligated to purchase under this Agreement (the "Defaulted Securities"), the Representative(s) shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representative(s) shall not have completed such arrangements within such 24-hour period, then: (a) if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase -21- 26 and of the Company to sell the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities, as the case may be, either the Representative(s) or the Company shall have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used herein, the term "Underwriter" includes any person substituted for an Underwriter under this Section 10. SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representative(s) at North Tower, World Financial Center, New York, New York 10281-1201 and notices to the Company shall be directed to it at 9700 Higgins Road, Suite 570, Rosemont, Illinois 60018, attention of John Campbell Carruth. SECTION 12. Parties. This Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 14. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, -22- 27 will become a binding agreement between the Underwriters and the Company in accordance with its terms. Very truly yours, USFREIGHTWAYS CORPORATION By_____________________________________ Title: CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH & CO. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED SCHRODER WERTHEIM & CO. INCORPORATED BY: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By___________________________________ Authorized Signatory For themselves and as Representative(s) of the other Underwriters named in Schedule A hereto. -23- 28 SCHEDULE A
Number of Initial Name of Underwriter Securities ------------------- ---------- Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . . . . . . . . . . . . Schroder Wertheim & Co. Incorporated . . . . . . . . . . . . . ------------- Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,700,000 =============
Sch A-1 29 SCHEDULE B USFREIGHTWAYS CORPORATION 2,700,000 Shares of Common Stock (Par Value $.01 Per Share) 1. The initial public offering price per share for the Securities, determined as provided in said Section 2, shall be $________. 2. The purchase price per share for the Securities to be paid by the several Underwriters shall be $_______, being an amount equal to the initial public offering price set forth above less $_____ per share; provided that the purchase price per share for any Option Securities purchased upon the exercise of the over-allotment option described in Section 2(b) shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. Sch B-1 30 SCHEDULE C List of Subsidiaries Sch C-1 31 SCHEDULE D List of Persons and entities subject to Lock-up Sch D-1 32 Exhibit A FORM OF OPINION OF COMPANY'S COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Purchase Agreement. (iii) The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. (iv) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to the Purchase Agreement or pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus); the shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. (v) The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to the Purchase Agreement and, when issued and delivered by the Company pursuant to the Purchase Agreement against payment of the consideration set forth in the Purchase Agreement, will be validly issued and fully paid and non-assessable and no holder of the Securities is or will be subject to personal liability by reason of being such a holder. (vi) The issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. (vii) Each Subsidiary has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the A-1 33 ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise disclosed in the Registration Statement, all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and, to the best of our knowledge, is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. (viii) The Purchase Agreement has been duly authorized, executed and delivered by the Company. (ix) The Registration Statement, including any Rule 462(b) Registration Statement, has been declared effective under the 1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); and, to the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or threatened by the Commission. (x) The Registration Statement, including any Rule 462(b) Registration Statement, the Rule 430A Information and the Rule 434 Information, as applicable, the Prospectus, excluding the documents incorporated by reference therein, and each amendment or supplement to the Registration Statement and Prospectus, excluding the documents incorporated by reference therein, as of their respective effective or issue dates (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which we need express no opinion) complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. (xi) The documents incorporated by reference in the Prospectus (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which we need express no opinion), when they were filed with the Commission, complied as to form in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder. (xii) The form of certificate used to evidence the Common Stock complies in all material respects with all applicable statutory requirements, with any applicable requirements of the charter and by-laws of the Company and the requirements of the Nasdaq National Market. (xiii) To the best of our knowledge, there is not pending or threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any subsidiary is a party, or to which the property of the Company or any subsidiary is subject, before or brought by any court or governmental agency or body, domestic or foreign, that might reasonably be expected to result in a Material Adverse Effect, or that might reasonably be expected to materially and adversely affect A-2 34 the properties or assets thereof or the consummation of the transactions contemplated in the Purchase Agreement or the performance by the Company of its obligations thereunder. (xiv) The information in the Prospectus under [" "], and in the Registration Statement under Item 15, to the extent that it constitutes matters of law, summaries of legal matters, the Company's charter and bylaws or legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material respects. (xv) To the best of our knowledge, there are no statutes or regulations that are required to be described in the Prospectus that are not described as required. (xvi) All descriptions in the Registration Statement of contracts and other documents to which the Company or its subsidiaries are a party are accurate in all material respects; to the best of our knowledge, there are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects. (xvii) To the best of our knowledge, neither the Company nor any subsidiary is in violation of its charter or by-laws and no default by the Company or any subsidiary exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the Prospectus or filed or incorporated by reference as an exhibit to the Registration Statement. (xviii) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign (other than under the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may be required under the securities or blue sky laws of the various states, as to which we need express no opinion) is necessary or required in connection with the due authorization, execution and delivery of the Purchase Agreement or for the offering, issuance, sale or delivery of the Securities. (xix) The execution, delivery and performance of the Purchase Agreement and the consummation of the transactions contemplated in the Purchase Agreement and in the Registration Statement (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use Of Proceeds") and compliance by the Company with its obligations under the Purchase Agreement do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section 1(a)(xi) of the Purchase Agreement) under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any other agreement or instrument, known to me, to which the Company or any subsidiary is a party or by which it or any of them may be bound, or to A-3 35 which any of the property or assets of the Company or any subsidiary is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary, or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their respective properties, assets or operations. (xx) The Company is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the 1940 Act. Nothing has come to our attention that would lead us to believe that the Registration Statement or any amendment thereto, including the Rule 430A Information and Rule 434 Information (if applicable) (except for financial statements and schedules and other financial data included or incorporated by reference therein or omitted therefrom, as to which we need make no statement), at the time such Registration Statement or any such amendment became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto (except for financial statements and schedules and other financial data included or incorporated by reference therein or omitted therefrom, as to which we need make no statement), at the time the Prospectus was issued, at the time any such amended or supplemented prospectus was issued or at the Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal conclusions), to the extent they deem proper, on certificates of responsible officers of the Company and public officials. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). A-4 36 FORM OF OPINION OF COMPANY'S SPECIAL REGULATORY COUNSEL TO BE DELIVERED PURSUANT TO SECTION 5(b) (i) No consent, approval, authorization, order, registration or qualification of or with the ICC or DOT is required with respect to the sale of the Securities. (ii) No consent, approval, authorization, order, registration or qualification of or with any highway or transportation agency having jurisdiction over the Company or any of its subsidiaries is required with respect to the sale of the Securities (such counsel may rely on the opinions of local counsel). (iii) Each subsidiary of the Company to the best of our knowledge holds all licenses, franchises, permits, authorizations, approvals and orders of and from all governmental regulatory officials and bodies, including the ICC, the DOT and any applicable state highway and transportation agencies, that are necessary to own or lease their properties and conduct their businesses as described in the Prospectus and are material to the consolidated financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole; (iv) To the best of our knowledge and other than as set forth in the Prospectus, neither the Company nor any of its subsidiaries is in violation of any law, ordinance, administrative or governmental rule or regulation or court decree applicable to it, including the ICC, the DOT or any applicable state highway and transportation agency, or is not in compliance with any term or condition of, or has failed to obtain, any license, permit, franchise or other administrative or governmental authorization, including the ICC, the DOT or any applicable state highway and transportation agency, necessary to the ownership of its property or to the conduct of its business, which violation, noncompliance or failure to obtain would individually or in the aggregate have a material adverse effect on the consolidated financial position, shareholder's equity or results of operations of the Company and its subsidiaries, taken as a whole. A-5 37 [FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO SECTION 5(I)] Exhibit B ______________, 1997 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated, SCHRODER WERTHEIM & CO. INCORPORATED as Representative(s) of the several Underwriters to be named in the within-mentioned Purchase Agreement c/o Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Re: Proposed Public Offering by USFreightways Corporation Dear Sirs: The undersigned, a stockholder [and an officer and/or director] of USFreightways Corporation, a Delaware corporation (the "Company"), understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and Schroder Wertheim & Co. Incorporated propose to enter into a Purchase Agreement (the "Purchase Agreement") with the Company providing for the public offering of shares (the "Securities") of the Company's common stock, par value $.01 per share (the "Common Stock"). In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder [and an officer and/or director] of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Purchase Agreement that, during a period of 120 days from the date of the Purchase Agreement, the undersigned will not, without the prior written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company's Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or file any registration statement under the Securities Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common B-1 38 Stock, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. Very truly yours, Signature: Print Name: B-2 39 Annex A [FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)] [We are independent public accountants with respect to the Company within the meaning of the 1933 Act and the applicable published 1933 Act Regulations] (i) in our opinion, the audited financial statements [and the related financial statement schedules] included or incorporated by reference in the Registration Statement and the Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the published rules and regulations thereunder; (ii) on the basis of procedures (but not an examination in accordance with generally accepted auditing standards) consisting of a reading of the unaudited interim consolidated financial statements of the Company for the three month periods ended March 31, 1995 and March 30, 1996, the three and six month periods ended June 30, 1995 and June 29, 1996 and the three and nine month periods ended September 30, 1995 and September 28, 1996, included or incorporated by reference in the Registration Statement and the Prospectus (collectively, the "10-Q Financials"), a reading of the latest available unaudited interim consolidated financial statements of the Company, a reading of the minutes of all meetings of the stockholders and directors of the Company and its subsidiaries and the _____________________ and _______________________ Committees of the Company's Board of Directors [and any subsidiary committees] since December 31, 1995, inquiries of certain officials of the Company [and its subsidiaries] responsible for financial and accounting matters, a review of interim financial information in accordance with standards established by the American Institute of Certified Public Accountants in Statement on Auditing Standards No. 71, Interim Financial Information ("SAS 71"), with respect to the nine month periods ended September 30, 1995 and September 28, 1996 and such other inquiries and procedures as may be specified in such letter, nothing came to our attention that caused us to believe that: (A) the 10-Q Financials incorporated by reference in the Registration Statement and the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the 1934 Act and the 1934 Act Regulations applicable to unaudited financial statements included in Form 10-Q or any material modifications should be made to the 10-Q Financials incorporated by reference in the Registration Statement and the Prospectus for them to be in conformity with generally accepted accounting principles; (B) at a specified date not more than five days prior to the date of this Agreement, there was any change in the capital stock of the Company [and its subsidiaries] or any decrease in the stockholders' equity or net current assets of the Company [and its subsidiaries] or any increase in the long-term debt of the Company [and its subsidiaries,] in each case as compared with amounts shown in the latest Annex A-1 40 balance sheet included in the Registration Statement, except in each case for changes, decreases or increases that the Registration Statement discloses have occurred or may occur; or (C) for the period from January 1, 1996 to a specified date not more than five days prior to the date of this Agreement, there was any decrease in net sales, or total or per share amounts of net income, in each case as compared with the comparable period in the preceding year, except in each case for any decreases that the Registration Statement discloses have occurred or may occur; (iii) based upon the procedures set forth in clause (ii) above and a reading of the Selected Consolidated Financial Data included in the Registration Statement, nothing came to our attention that caused us to believe that the Selected Consolidated Financial Data included in the Registration Statement do not comply as to form in all material respects with the disclosure requirements of Item 301 of Regulation S-K of the 1933 Act, that the amounts included in the Selected Consolidated Financial Data are not in agreement with the corresponding amounts in the audited consolidated financial statements for the respective periods or that the financial statements not included in the Registration Statement from which certain of such data were derived are not in conformity with generally accepted accounting principles; (iv) we have compared the information in the Registration Statement under selected captions with the disclosure requirements of Regulation S-K of the 1933 Act and on the basis of limited procedures specified herein, nothing came to our attention that caused us to believe that this information does not comply as to form in all material respects with the disclosure requirements of Items 302, 402 and 503(d), respectively, of Regulation S-K; (v) in addition to the procedures referred to in clause (ii) above, we have performed other procedures, not constituting an audit, with respect to certain amounts, percentages, numerical data and financial information appearing in the Registration Statement, which are specified herein, and have compared certain of such items with, and have found such items to be in agreement with, the accounting and financial records of the Company. Annex A-2 EX-23.1 3 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.1 The Board of Directors USFreightways Corporation: We consent to the use of our report dated January 17, 1996, except for note 1, which is as of January 26, 1996, relating to the consolidated financial statements of USFreightways Corporation as of December 30, 1995 and December 31, 1994, and for each of the years in the three-year period ended December 30, 1995 incorporated herein by reference and to the reference to our firm under the heading "Experts" and "Selected Consolidated Financial Data" in the prospectus. Chicago, Illinois January 10, 1997 -----END PRIVACY-ENHANCED MESSAGE-----