Overnite Corp – IPO: ‘S-1/A’ on 7/27/98

As of:  Monday, 7/27/98   ·   Accession #:  950109-98-3980   ·   File #:  333-53169

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Initial Public Offering (IPO):  Pre-Effective Amendment to Registration Statement (General Form)   —   Form S-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Amendment No.4 to Form S-1/A                          96    555K 
 2: EX-23.1     Auditors Consent                                       1      4K 

S-1/A   —   Amendment No.4 to Form S-1/A
Document Table of Contents

S-1/A
1st Page of 96
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 1998       

                                                    REGISTRATION NO. 333-53169

================================================================================
SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

--------------- 

AMENDMENT NO. 4       
TO  
FORM S-1  
REGISTRATION STATEMENT  
UNDER 
THE SECURITIES ACT OF 1933  

--------------- 
OVERNITE CORPORATION  
(Exact name of Registrant as specified in its charter)  

VIRGINIA                     6719                   54-1904443  
(State or other      (Primary Standard Industrial    (I.R.S. Employer   
jurisdiction of          Classification Code)     Identification Number)
incorporation or                                                        
organization)                                                         

1000 SEMMES AVENUE  
P.O. BOX 1216 
RICHMOND, VIRGINIA 23218  
(804) 231-8000  
(Address, including zip code and telephone number, including area code, of  
Registrant's principal executive offices) 

--------------- 
MR. PATRICK D. HANLEY 
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 
1000 SEMMES AVENUE  
P.O. BOX 1216 
RICHMOND, VIRGINIA 23218  
(804) 231-8000  
(Name, address, including zip code and telephone number, including area code, 
of agent for service) 

--------------- 

Copies to:  

   DAVID M. CARTER, ESQ.                WILLIAM P. ROGERS, JR., ESQ.
  HUNTON & WILLIAMS                    CRAVATH, SWAINE & MOORE
RIVERFRONT PLAZA, EAST TOWER                  825 EIGHTH AVENUE       
 951 EAST BYRD STREET                   NEW YORK, NEW YORK 10019
RICHMOND, VIRGINIA 23219                      (212) 474-1270      
(804) 788-8200                                          

--------------- 

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as 
practicable after the effective date of this Registration Statement.            

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, 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, 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)    
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering. [_]                                                      

If the delivery of the prospectus is expected to be made pursuant to Rule   
434, please check the following box. [_]                                        

--------------- 

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR    
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT      
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS              
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH     
SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION           
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING         
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.                                   

================================================================================

S-1/A
2nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 2nd
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

PROSPECTUS (Subject to Completion)                                              

Issued July 27, 1998           33,600,000 Shares                                

[LOGO OF OVERNITE CORPORATION APPEARS HERE] 

COMMON STOCK
----------- 

OF THE 33,600,000 SHARES OF COMMON STOCK OFFERED HEREBY, 26,880,000 SHARES ARE  
BEING OFFERED INITIALLY IN THE UNITED STATES AND CANADA BY THE U.S. UNDERWRITERS
AND 6,720,000 SHARES ARE BEING OFFERED INITIALLY OUTSIDE THE UNITED STATES AND  
CANADA BY THE INTERNATIONAL UNDERWRITERS. SEE "UNDERWRITERS." ALL OF THE SHARES 
OF COMMON STOCK OFFERED HEREBY ARE BEING SOLD BY THE COMPANY. THE NET PROCEEDS  
FROM THE OFFERING WILL BE USED BY THE COMPANY (I) TOGETHER WITH BORROWINGS UNDER
A BANK CREDIT FACILITY, TO PURCHASE INDIRECTLY FROM UNION PACIFIC CORPORATION   
("UPC") ALL OF THE OUTSTANDING SHARES OF COMMON STOCK OF OVERNITE TRANSPORTATION
COMPANY AND (II) TO THE EXTENT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS       
EXERCISED, TO REPAY A PORTION OF THE INDEBTEDNESS UNDER SUCH FACILITY. PRIOR TO 
THE OFFERING, THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK OF THE       
COMPANY. IT IS CURRENTLY ESTIMATED THAT THE INITIAL PUBLIC OFFERING PRICE PER   
SHARE WILL BE BETWEEN $12 AND $14. SEE "UNDERWRITERS" FOR A DISCUSSION OF THE   
FACTORS TO BE CONSIDERED IN DETERMINING THE INITIAL PUBLIC OFFERING PRICE.      
----------- 

THE COMMON STOCK HAS BEEN APPROVED FOR QUOTATION ON THE NASDAQ NATIONAL MARKET
SYSTEM UNDER THE SYMBOL "OVNT." 
----------- 

SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE 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 $   A SHARE 
----------- 

                                                                [Download Table]

                                                       UNDERWRITING             
                                             PRICE TO DISCOUNTS AND  PROCEEDS TO
                                              PUBLIC  COMMISSIONS(1) COMPANY(2) 
                                             -------- -------------- -----------
                                                                                
Per Share...................................    $           $            $      
Total (3)...................................  $           $             $       

-----                                                                           
(1) The Company has agreed to indemnify the Underwriters against certain        
liabilities, including liabilities under the Securities Act of 1933, as 
amended.                                                                
(2) Before deducting certain expenses payable by the Company estimated at       
$1,570,000. Certain other expenses of the Offering will be paid by UPC. 
(3) The Company has granted the U.S. Underwriters an option, exercisable within 
30 days of the date hereof, to purchase up to an aggregate of 3,360,000 
  additional shares of Common Stock at the price to public less underwriting
 discounts and commissions for the purpose of covering over-allotments, if
   any. If the U.S. Underwriters exercise such option in full, the total price
to public, underwriting discounts and commissions and proceeds to the   
Company will be $  , $   and $  , respectively. See "Underwriters."     
----------- 

The Shares are offered, subject to prior sale, when, as and if accepted by  
the Underwriters named herein and subject to approval of certain legal matters  
by Cravath, Swaine & Moore, counsel for the Underwriters. It is expected that   
delivery of the Shares will be made on or about August  , 1998 at the office of 
Morgan Stanley & Co. Incorporated, New York, N.Y., against payment therefor in  
immediately available funds.                                                    
----------- 

MORGAN STANLEY DEAN WITTER                                                      
CREDIT SUISSE FIRST BOSTON              
                        DONALDSON, LUFKIN & JENRETTE
                          Securities Corporation
                                                             MERRILL LYNCH & CO.

, 1998                                                              

S-1/A
3rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 3rd
EXPLANATORY NOTE  

This registration statement contains two forms of prospectus: one to be used
in connection with a United States and Canadian offering of the registrant's    
Common Stock (the "U.S. Prospectus") and one to be used in connection with a    
concurrent international offering of the Common Stock (the "International       
Prospectus" and, together with the U.S. Prospectus, the "Prospectuses"). The    
International Prospectus will be identical to the U.S. Prospectus except that   
it will have a different front cover page. The U.S. Prospectus included herein  
is followed by the front cover page to be used in the International             
Prospectus. The front cover page for the International Prospectus included      
herein has been labeled "Alternate Cover Page for International Prospectus."    

If required pursuant to Rule 424(b) of the General Rules and Regulations    
under the Securities Act of 1933, as amended, ten copies of each of the         
Prospectuses in the forms in which they are used will be filed with the         
Securities and Exchange Commission.                                             

S-1/A
4th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 4th
[Map of Company's system including locations of service centers]

S-1/A
5th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 5th
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE 
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS             
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT   
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER.  
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN    
OFFER TO BUY ANY SECURITY OTHER THAN THE COMMON STOCK OFFERED HEREBY TO ANY     
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR    
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY    
SALE MADE HEREBY SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION        
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.       
----------------  

UNTIL     , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL      
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT              
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.    
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO       
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR      
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.                                             
----------------  

For investors outside the United States: No action has been or will be taken
in any jurisdiction by the Company or by any Underwriter that would permit a    
public offering of the Common Stock or possession or distribution of this       
Prospectus in any jurisdiction where action for that purpose is required,       
other than in the United States. Persons into whose possession this Prospectus  
comes are required by the Company and the Underwriters to inform themselves     
about and to observe any restrictions as to the offering of the Common Stock    
and the distribution of this Prospectus.                                        
----------------  

TABLE OF CONTENTS 

                                                                [Download Table]

                                                                          PAGE
                                                                          ----
                                                                              
Prospectus Summary.......................................................   4 
Risk Factors.............................................................  12 
Use of Proceeds..........................................................  16 
Dividend Policy..........................................................  16 
Capitalization...........................................................  17 
Selected Historical and Pro Forma Consolidated Financial Data............  18 
Management's Discussion and Analysis of Financial Condition and Results       
 of Operations...........................................................  20 
Business.................................................................  29 
Management...............................................................  41 
The Acquisition..........................................................  50 
Agreements with Union Pacific Corporation................................  50 
Description of Capital Stock.............................................  53 
Shares Eligible for Future Sale..........................................  55 
Bank Credit Facility.....................................................  55 
Underwriters.............................................................  57 
Certain Federal Tax Consequences.........................................  60 
Legal Matters............................................................  62 
Experts..................................................................  62 
Additional Information...................................................  62 
Index to Consolidated Financial Statements............................... F-1 

----------------  

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS   
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,     
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SHORT-COVERING              
TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE       
"UNDERWRITERS."                                                                 

3 

S-1/A
6th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 6th
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed     
information, including "Risk Factors," and the historical and pro forma         
financial statements appearing elsewhere in this Prospectus. For purposes of    
this Prospectus, unless the context otherwise requires, all references herein   
to the "Company" (i) when used in relation to any period prior to the           
completion of the Offering, mean Overnite Transportation Company ("OTC"), its   
direct parent company, Overnite Holding, Inc. ("OHI"), and its subsidiaries,    
and (ii) when used in relation to any period after the completion of the        
Offering, mean Overnite Corporation and its subsidiaries, including OHI and     
OTC. Unless the context otherwise requires, the information in this Prospectus  
assumes that the Underwriters do not exercise their over-allotment option. See  
"Underwriters."                                                                 

THE COMPANY 

The Company is a leading provider of less-than-truckload ("LTL")            
transportation, offering a full spectrum of regional, inter-regional and long-  
haul services nationwide. Management believes that the Company's operating      
flexibility and favorable cost structure enhance its ability to effectively     
compete in the LTL industry by providing its customers with high-quality        
service on a cost-efficient basis. Over 90% of the Company's revenues are       
derived from its LTL business, with the remainder derived from truckload        
services and value-added services which complement the core LTL business. The   
Company's workforce of approximately 12,500 employees is predominantly non-     
union. The Company achieved a significant turnaround from 1996 to 1997, with    
net income (before goodwill amortization) of $23.8 million in 1997 compared to  
a net loss (before goodwill amortization) of $23.4 million in 1996, and an      
operating ratio (the ratio of operating expenses before goodwill amortization   
to total revenues) of 96.8% in 1997 compared to 105.0% in 1996.                 

The LTL industry has been consolidating over the last few years, and recent 
increases in the demand for LTL services have resulted in tightening capacity   
and increasing freight rates. The LTL industry is composed of three segments:   
regional, inter-regional and long-haul. The regional segment covers lanes       
shorter than 500 miles that generally involve next-day and two-day service, and 
is primarily served by a large number of non-union regional and niche carriers. 
The inter-regional segment, where lanes are generally between 500 and 1,200     
miles, is primarily served by large regional carriers and national unionized    
carriers. The long-haul segment, where lanes are generally over 1,200 miles, is 
served primarily by the national unionized carriers. The Company estimates that 
the 25 largest LTL carriers generated approximately $17 billion in revenues and 
constituted at least 80% of the LTL market in 1997.                             

 The Company had operating revenues of $946.0 million in 1997 and is the sixth
largest provider of LTL services in the United States, serving all three        
segments of the LTL industry. Approximately 31% of the Company's LTL revenues   
were derived from the regional segment, 43% were derived from the inter-        
regional segment and 26% were derived from the long-haul segment during the     
first six months of 1998. The Company competes principally with national        
unionized carriers and regional carriers. The Company's flexible work rules and 
lower cost structure allow it to compete effectively with the national          
unionized carriers which rely in part on rail service and are bound by          
restrictive work rules which result in longer transit times and higher costs.   
Through its national network of 166 service centers, the Company covers more    
territory than most of its regional competitors. The Company believes that this 
combination of strengths will enable it to achieve profitable growth in all     
three LTL segments.                                                             

TURNAROUND                                                                      

The Company was founded in 1935, became a public company in 1957 and was    
acquired by Union Pacific Corporation ("UPC") in 1986. After the acquisition,   
the Company initiated a program of geographic expansion and focused on          
marketing its services to large, national accounts. This rapid expansion,       
coupled with the sudden growth in the Company's long-haul and inter-regional    
traffic resulting from the 1994 nationwide strike against unionized LTLs,       
strained the Company's ability to provide reliable service and resulted in a    
lack of focus on its traditional regional and inter-regional strengths. In      
addition, the Company did not rationalize its pricing to accommodate the change 
in traffic mix, leading to substantial profit and yield erosion. These factors  
contributed                                                                     

4 

S-1/A
7th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 7th
to net losses (before goodwill amortization) of $4.2 million and $23.4 million  
in 1995 and 1996, respectively. As its service levels and profitability         
declined, the Company's relations with its employees deteriorated. Since 1994,  
the Company has received petitions at 66 Company locations to organize under    
the International Brotherhood of Teamsters, AFL-CIO (the "Teamsters Union").    
The Company believes that employee relations have improved significantly since  
the turnaround began, as evidenced by Company victories in seven out of eight   
union elections held since July 1997. As of the date of this Prospectus, 22 of  
the Company's 166 service centers are represented by the Teamsters Union,       
accounting for approximately 14% of the Company's workforce (approximately 17%  
of the non-management workforce). The Company is currently engaged in           
negotiations with the Teamsters Union at these service centers, but has not     
entered into any collective bargaining agreements.                              

On July 9, 1998, the Teamsters Union announced that Teamster leaders        
authorized a nationwide strike to occur at the Company if the Teamsters do not  
succeed in reaching a contract with the Company. Prior to such announcement,    
certain Company employees staged one-day work stoppages at four Teamster-       
represented service centers. Each of the service centers remained open during   
the day with Company drivers continuing to make pickups and deliveries. On July 
24, 1998, the Teamsters Union announced that it was temporarily holding in      
abeyance strike plans while awaiting the outcome of contract negotiations.      
However, the Company cannot predict whether additional Teamster-organized work  
stoppages or other job actions may be staged throughout the Offering period or  
thereafter. The Company also cannot predict the nature, scope or duration of    
any such activities or the effect such activities may have on the Company's     
business or financial condition. On July 10, 1998, the Company offered the      
Teamsters Union an opportunity for a system-wide election. The Teamsters Union  
has rejected the Company's proposal. See "Risk Factors--Disputes with Labor     
Organizations."                                                                 

The Company's service and operational turnaround began in April 1996, when  
UPC appointed Leo Suggs, a well-regarded, 40-year trucking veteran, as Chairman 
and Chief Executive Officer. Mr. Suggs assembled a new management team          
throughout the organization, from senior managers to service center managers,   
by selectively hiring and promoting experienced individuals. The new management 
team developed a plan to restore the Company's reputation for service and       
reliability and to return the Company to profitability. Management streamlined  
the Company's operations, closing 14 service centers and reducing its workforce 
by approximately 15% in 1996. The Company also reviewed the profitability of    
its major accounts and sought significant rate increases from customers         
representing approximately 20% of its revenue base. As a result of management's 
turnaround initiatives and employee commitment, the Company's financial         
performance improved dramatically between 1996 and 1997. These gains have       
continued in 1998, as the Company's operating ratio improved from 97.8% in the  
first six months of 1997 to 95.0% in the first six months of 1998.              

BUSINESS STRATEGY                                                               

In restoring high-quality service and returning the Company to profitability
over the past two years, the Company's new management team implemented the      
measures discussed above and focused on four critical on-going areas of the     
business: service quality, cost control, yield improvement and profitable       
revenue growth. Management believes that working with its employees to pursue   
these four success factors will reinforce the gains already achieved in the     
turnaround, improve financial performance, create a more positive work          
environment for employees and enhance the Company's ability to continue to      
reward its employees with a competitive wage and benefits package.              

.  Provide Quality Service. Since 1996, management has sought to foster a     
 consistent service culture and institute accountability for service quality
throughout the organization. The Company has reduced transit times and    
continues to focus on on-time delivery of damage-free shipments to        
customers. The Company has instituted daily conference calls (the "Daily  
Service Review") with senior, district and service center management to   
facilitate the timely resolution of operational problems and to discuss   
service improvement opportunities. The Company has also established a     
Customer Advisory Council to enable management to meet periodically with  
customers regarding service quality levels, potential new services and new
ideas for improving operations. In the first quarter of 1997, the Company 
shortened scheduled transit times on                                      

5 

S-1/A
8th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 8th
 approximately half of its lanes without affecting its high level of on-time
 deliveries. The Company has also increased training for employees to reduce
service problems. These efforts have contributed to (i) an improvement in 
on-time performance from 91.9% in 1996 to 95.9% in 1997 and (ii) a 25.4%  
improvement in exception frequency (the ratio of shipments delivered with 
 shortages or damages to the total shipment handlings) from 1.77% in 1996 to
1.32% in 1997.                                                            

.  Improve Cost Controls. The Company has established numerous cost control   
initiatives since 1996, implementing financial discipline and             
accountability throughout all levels of management. These measures include
(i) identification of operational improvement opportunities through the   
Daily Service Review, (ii) the creation of service center profit and loss 
statements, which encourage each service center and district manager to   
manage based on profitability, in addition to more traditional operating  
measures, (iii) a weekly financial review process for senior management to
allow for timely corrections to financial or operational problems and (iv)
a weekly analysis of general and administrative expense levels for each   
location. In addition, management has initiated a multi-year "cost of     
quality" process to identify cost reduction opportunities in target       
 business functions, such as billing accuracy, claims prevention and network
operations. Management anticipates that these cost control initiatives,   
 coupled with the "cost of quality" process, will result in significant cost
savings and other productivity improvements.                              

.  Continue Yield Improvement.  The Company introduced several programs to    
improve its pricing discipline, including rationalizing prices on its     
 largest, low-margin accounts (representing approximately 20% of its revenue
base), improving freight mix and increasing prices on certain lanes to    
reflect market rates and cost of operations. A pricing committee,         
comprising representatives from a cross-section of senior management, was 
established to review all pricing decisions for large customers. In       
addition, the Company implemented a contract performance review system to 
analyze account profitability after the award of a contract to ensure that
shipment levels and service requirements are consistent with bid          
assumptions. These initiatives have contributed to a 12.7% increase in    
average revenue per hundredweight, from $9.97 in 1996 to $11.24 in 1997.  

.  Achieve Profitable Revenue Growth. The Company has enhanced its existing   
sales force, instituted sales goals, targeted high-margin accounts and    
implemented a profitability-based sales incentive program to achieve      
profitable revenue growth. The Company upgraded the quality of its sales  
 force through selective hiring and increased training. The Company improved
the compensation program for its sales employees by creating a sales      
incentive plan based on revenues and profitability that enables sales     
employees to earn quarterly incentives of up to 41% of base salary on an  
annual basis. In addition, sales representatives are required to formulate
daily, weekly, monthly and annual sales plans which are reviewed with     
district and senior management on a weekly basis. The Company enhanced its
existing sales force with a new department (Inside Sales) focused on high-
margin, small accounts. These initiatives have contributed to an increase 
 in revenues of 15.1% from $451.3 million in the first six months of 1997 to
$519.3 million in the first six months of 1998. At the same time, the     
Company has increased net income (before goodwill amortization) from $8.3 
million in the first six months of 1997 to $19.8 million in the first six 
months of 1998.                                                           

.  Maintain Positive Work Environment. Management believes that employee      
 satisfaction and commitment to the Company's strategies described above are
critical to its success. Management intends for all employees to benefit  
from the Company's success through improved wages, benefits and job       
 security. To date, the Company has implemented and enhanced incentive plans
that reward employees for focusing on service quality, cost control,      
safety, yield improvement and profitable revenue growth. Management       
regularly meets with all employees to discuss these factors and listen to 
 ideas for achieving these objectives. To fortify employee commitment to the
 Company's financial success, the Company plans to grant all employees stock
options for shares of Common Stock, contingent on completion of the       
Offering, and to maintain an employee stock purchase plan that will permit
employees to invest directly in the Company.                              

6 

S-1/A
9th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 9th
Management's emphasis on the critical success factors discussed above has   
reestablished the traditional Overnite culture by focusing on meeting or        
exceeding service commitments while offering competitive pricing and            
maintaining an efficient cost structure. Management believes that the return to 
the traditional Overnite culture and continued focus on these critical areas    
will enable the Company to sustain its competitive advantage and successfully   
pursue its growth strategy.                                                     

GROWTH STRATEGY                                                                 

With a new management team in place and the cultural change and turnaround  
well underway, the Company has implemented a strategic planning process to      
develop its growth strategy. This process includes an in-depth analysis of both 
market and competitor trends affecting the Company. From this analysis,         
management believes that the Company has significant growth opportunities,      
particularly in the inter-regional and long-haul LTL markets, through further   
penetration of existing markets, expansion into new markets and development of  
new services. In addition, the Company intends to maintain its strong presence  
in the regional markets. Furthermore, the Company is well-positioned to         
implement its growth strategy through its efficient cost structure, operating   
flexibility, breadth of geographic coverage and economies of scale. The         
Company's strategy is to pursue disciplined growth through the following:       

 .  Expand Inter-Regional Traffic.  The inter-regional LTL segment accounted for
approximately 43% of the Company's total LTL revenues in the first six    
  months of 1998. Management believes that inter-regional traffic represents a
 significant growth opportunity for the Company, particularly in the eastern
 half of the United States where the Company benefits from strong brand name
recognition and extensive geographic coverage. A substantial portion of   
inter-regional traffic is served by the national, unionized LTL carriers. 
The Company believes that it offers better service quality and shorter    
 transit times on more lanes than these carriers, at competitive prices. The
 Company also believes that it has a competitive advantage over the regional
carriers, some of whom are also targeting this traffic, because it is     
  already operating an expansive network that extends beyond the boundaries of
most regional and niche carriers. To capitalize on its strengths, the     
Company plans to focus marketing efforts on inter-regional services to new
and existing customers.                                                   

.  Continue to Penetrate Long-Haul Markets.  The long-haul LTL business is    
served primarily by four unionized nationwide carriers. Long-haul services
accounted for approximately 26% of the Company's total LTL revenues in the
  first six months of 1998 and has grown as a percentage of total LTL revenues
  over the past year. The Company plans to increase its share of the long-haul
  market by continuing to offer faster transit times and more reliable service
at competitive prices. The Company currently provides nationwide long-haul
  service that includes all major metropolitan areas. In order to increase its
share of the long-haul market, the Company intends to further expand its  
coverage in the western United States.                                    

.  Continue to Grow Regional Business. The regional market represented        
approximately 31% of the Company's LTL revenues in the first six months of
1998. Traditionally, the Company was the largest regional carrier in the  
southeastern United States. This position enabled the Company to          
successfully expand regional coverage and develop inter-regional traffic. 
The Company's ability to offer inter-regional and long-haul services in   
addition to its high-quality regional services provides it with the       
  competitive advantage of being able to offer a full range of services to its
regional customers. With its restored high-quality service product, the   
Company intends to leverage its brand name recognition and long-standing  
customer relationships to grow its regional business.                     

.  Increase Sales to Local Accounts. Locally managed accounts produce higher  
 margins for the Company than national accounts and provide the Company with
incremental revenues and a more diversified customer base. Local accounts 
 represented approximately 44% of the Company's total tonnage shipped in the
first six months of 1998. The Company plans to increase local account     
revenues through sales promotions, continued expansion of the newly-      
developed Inside Sales department and implementation of programs that     
emphasize                                                                 

7 

S-1/A
10th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 10th
the development of driver-customer relationships and encourage driver-    
generated sales leads. Furthermore, management has designed the Company's 
profitability-based sales incentive program to motivate the sales force to
emphasize high-margin, local accounts.                                    

.  Develop and Promote New Value-Added Services.  In the past year, the       
Company has introduced and expanded ancillary high-margin businesses, such
as guaranteed and expedited services, cross-border, trade show, and       
assembly and distribution, that leverage the Company's existing           
infrastructure. These ancillary services offer the Company a significant  
growth opportunity given the size and growth potential of each of these   
market segments. For 1997, these services together represented            
approximately 3% of total operating revenues. The Company estimates that  
the market for guaranteed and expedited LTL services represents about $1-2
billion in annual revenues, the Canadian and Mexican cross-border LTL     
market represents about $2 billion in annual revenues, and the trade show 
market represents about $500 million in annual revenues. The Company      
intends to continue to capitalize on these profitable market opportunities
and develop additional customer-specific transportation solutions to suit 
the growing needs of its current customers and complement its core        
offerings to attract new customers.                                       

The Company's headquarters are located at 1000 Semmes Avenue, P.O. Box 1216,
Richmond, Virginia 23218. Its telephone number is (804) 231-8000.               

BACKGROUND TO THE OFFERING                                                      

Prior to the Offering, the business of the Company has been conducted by    
OTC, an indirect subsidiary of UPC. On May 20, 1998, UPC announced that it      
intended to effect a sale of its entire interest in OTC through an initial      
public offering. Overnite Corporation was incorporated to issue and sell        
shares of Common Stock pursuant to the Offering and to purchase from UPC (the   
"Acquisition") all of the issued and outstanding shares of capital stock (the   
"OHI Stock") of OHI, a wholly-owned subsidiary of UPC and the parent company    
of OTC.                                                                         

The Company and UPC will make elections under Section 338(h)(10) of the     
Internal Revenue Code of 1986, as amended (the "Section 338 Elections"), so     
that the Company's acquisition of the OHI Stock will be treated, for federal    
income tax purposes, as a purchase of all of OHI's and OTC's assets. As a       
result, for federal income tax purposes, the basis of the assets of OHI and     
OTC acquired by the Company will be adjusted in accordance with applicable      
Treasury regulations to reflect the price paid by the Company for the OHI       
Stock, plus the liabilities of OHI deemed assumed for federal income tax        
purposes at the time of the Acquisition. As a result of the Section 338         
Elections, the Company will be able to claim depreciation or amortization       
deductions for substantially all of the purchase price (including goodwill)     
for Federal income tax purposes. See "Unaudited Pro Forma Consolidated          
Financial Statements."                                                          

The Company will use the proceeds of the Offering, estimated to be          
approximately $414 million net of underwriting discounts, together with a $105  
million borrowing under a new bank credit facility (the "Bank Credit            
Facility"), to complete the Acquisition. The purchase price for the             
Acquisition will be determined through discussions and negotiations among UPC,  
the Company and the Underwriters and, inasmuch as it will be based on the       
offering price of the shares of Common Stock of the Company being sold in the   
Offering, will reflect the factors considered in determining such offering      
price. If the Underwriters' over-allotment option is exercised, the net         
proceeds therefrom will be used by the Company to reduce indebtedness under     
the Bank Credit Facility. See "Underwriters."                                   

The existing management of OTC will operate the Company after the Offering  
and the Acquisition.                                                            

8 

S-1/A
11th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 11th
THE OFFERING

The closings of the Offering of 26,880,000 shares of Common Stock of the    
Company in the United States and Canada (the "U.S. Offering") and the Offering  
of 6,720,000 shares of Common Stock outside of the United States and Canada     
(the "International Offering" and collectively, the "Offering"), are each       
conditioned upon the concurrent closing of the other.                           

Common Stock offered (1)........  33,600,000 shares                             

U.S. Offering.................  26,880,000 shares                           

International Offering........  6,720,000 shares                            

Total Common Stock to be                                                        
outstanding after the Offering                                                
(2)............................  33,600,000 shares                            

Use of proceeds by the                                                          
Company.........................  Assuming the Underwriters do not exercise     
                               their over-allotment option, the entire net
                                proceeds of the Offering will be paid by the
                               Company to UPC as partial consideration for
                                 the Acquisition. The net proceeds received by
                        the Company from any exercise of the
                               Underwriters' over-allotment option will be
                              used to reduce indebtedness under the Bank
                           Credit Facility. See "Use of Proceeds."

Nasdaq National Market trading                                                  
symbol.........................  "OVNT"                                       
--------                                                                        
(1) Excludes up to 3,360,000 shares which may be sold if the over-allotment     
option granted by the Company to the Underwriters is exercised. See     
"Underwriting."                                                         
(2) Excludes 3.7 million shares under the Company's Stock Compensation Plan     
that are either reserved for issuance pursuant to options that will be  
outstanding immediately after the Offering or issued as retention shares
that remain subject to forfeiture that will be outstanding immediately  
after the Offering.                                                     

9 

S-1/A
12th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 12th
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

                                                        [Enlarge/Download Table]

                                           YEAR ENDED DECEMBER 31,                         SIX MONTHS ENDED JUNE 30,    
                        ---------------------------------------------------------------- -------------------------------
                                                                            PRO FORMA(1)                    PRO FORMA(1)
                        1993(2)      1994      1995       1996       1997       1997       1997      1998       1998    
                        --------  ---------- ---------  ---------  -------- ------------ --------  -------- ------------
                                                   (IN THOUSANDS, EXCEPT PER SHARE DATA)                                
                                                                                                                        
STATEMENT OF INCOME                                                                                                     
 DATA:                                                                                                                  
Operating revenue...... $939,199  $1,037,236 $ 975,963  $ 960,998  $945,968    $945,968  $451,329  $519,316    $519,316 
Operating expenses:                                                                                                     
 Salaries, wages and                                                                                                    
  benefits.............  550,882     597,324   625,573    622,569   572,381     573,542   280,245   313,040     313,621 
 Supplies and                                                                                                           
  expenses.............  110,222     115,960   125,936    130,565   109,922     109,922    52,094    57,303      57,303 
 Operating taxes.......   41,258      48,251    49,085     46,027    41,091      41,091    21,059    22,010      22,010 
 Claims and insurance..   26,198      38,613    30,359     33,921    30,291      30,291    14,422    15,836      15,836 
 Rents and purchased                                                                                                    
  transportation.......   61,380      88,859    83,274     91,380    75,632      75,632    32,354    42,472      42,472 
 Communications and                                                                                                     
  utilities............   16,017      18,618    19,057     19,488    17,497      17,497     9,144     9,054       9,054 
 Depreciation..........   34,574      40,355    44,932     45,418    42,516      42,516    21,107    22,821      22,821 
 Amortization of                                                                                                        
  goodwill (1).........   23,000      23,000    19,500     19,500    19,500       4,351     9,750     9,750       2,176 
 Other expenses........    6,811       9,433    17,407     19,596    26,826      31,915    11,125    10,884      13,428 
                        --------  ---------- ---------  ---------  --------  ----------  --------  --------  ---------- 
 Total operating                                                                                                        
  expenses.............  870,342     980,413 1,015,123  1,028,464   935,656     926,757   451,300   503,170     498,721 
                        --------  ---------- ---------  ---------  --------  ----------  --------  --------  ---------- 
Operating income                                                                                                        
 (loss)................   68,857      56,823   (39,160)   (67,466)   10,312      19,211        29    16,146      20,595 
Intercompany interest                                                                                                   
 income................   14,046       8,101     9,399      9,268    11,378         --      5,069     6,067         --  
Interest expense.......      755       1,342     1,822      1,532     1,774       8,849       667       727       4,265 
Other income                                                                                                            
 (expense).............      (92)      1,188      (325)     3,116         2           2      (331)      463         463 
                        --------  ---------- ---------  ---------  --------  ----------  --------  --------  ---------- 
Income (loss) before                                                                                                    
 income taxes..........   82,056      64,770   (31,908)   (56,614)   19,918      10,364     4,100    21,949      16,793 
Income tax (benefit)...   41,089      30,367    (8,163)   (13,723)   15,609       4,859     5,570    11,866       6,351 
                        --------  ---------- ---------  ---------  --------  ----------  --------  --------  ---------- 
Net income (loss)(3)... $ 40,967  $   34,403 $ (23,745) $ (42,891) $  4,309    $  5,505  $ (1,470) $ 10,083    $ 10,442 
                        ========  ========== =========  =========  ========  ==========  ========  ========  ========== 
Pro forma income                                                                                                        
 per share (3)                                                                                                          
 Basic.................                                                        $    .16                        $    .31 
 Diluted...............                                                             .16                             .31 
Pro forma weighted                                                                                                      
 average number of                                                                                                      
 shares outstanding                                                                                                     
 Basic.................                                                      33,600,000                      33,600,000 
 Common stock                                                                                                           
  equivalents..........                                                          82,680                          82,680 
 Diluted...............                                                      33,682,680                      33,682,680 

                                                                [Download Table]

                                                     AS OF         
                                                 JUNE 30, 1998     
                                             ----------------------
                                              ACTUAL   PRO FORMA(1)
                                             --------- ------------
                                                 (IN THOUSANDS)    
                                                                   
BALANCE SHEET DATA:                                                
Current assets.............................  $ 344,881   $166,644  
Properties-net.............................    453,986    478,986  
Goodwill-net...............................    551,663    174,025  
Total assets...............................  1,383,153    823,364  
Current liabilities........................    149,826    149,826  
Debt due after one year....................      3,898    108,898  
Common stockholders' equity................  1,112,084    412,295  

--------                                                                        
(1) See note 1 to the selected historical and pro forma financial information   
and the unaudited pro forma financial statements included herein.       
(2) Net income for 1993 excludes the effect of a $79 million after-tax charge   
  for the cumulative effects of adjustments related to changes in accounting
principles for the recognition of liabilities of other postretirement   
benefits and deferred taxes and revenue recognition.                    
(3) If the Underwriters' over-allotment option is exercised in full, (i) pro    
 forma net income for 1997 and the six months ended June 30, 1998 would be
$7,199,789 and $11,289,395, respectively, and (ii) pro forma basic net  
 income per share for 1997 and the six months ended June 30, 1998 would be
  $.20 and $.31, respectively (assuming, in each case, that the net proceeds
 to the Company from the exercise of the over-allotment option equal $41.4
million).                                                               

10

S-1/A
13th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 13th
                                                        [Enlarge/Download Table]

                                                                       SIX MONTHS ENDED   
                                  YEAR ENDED DECEMBER 31,                  JUNE 30,       
                          -------------------------------------------  ------------------ 
                           1993     1994     1995     1996     1997      1997      1998   
                          -------  -------  -------  -------  -------  --------  -------- 
                                                                                          
SELECTED OPERATING DATA:                                                                  
For the period:                                                                           
Operating ratio (1).....     90.2%    92.3%   102.0%   105.0%    96.8%     97.8%     95.0%
Gross weight hauled (2)                                                                   
 Less-than-truckload....    8,553    9,115    8,860    8,580    7,682     3,705     4,023 
 Truckload..............    1,466    1,335    1,223      872      538       265       226 
                          -------  -------  -------  -------  -------  --------  -------- 
 Total..................   10,019   10,450   10,083    9,452    8,220     3,970     4,249 
Shipments (000's)                                                                         
 Less-than-truckload....    8,146    8,535    8,279    8,184    7,482     3,534     3,939 
 Truckload..............       60       58       53       39       24        12        11 
                          -------  -------  -------  -------  -------  --------  -------- 
 Total..................    8,206    8,593    8,332    8,223    7,506     3,546     3,950 
Average length of haul                                                                    
 (miles) (3)............      684      725      712      739      732       722       764 
Linehaul load factor                                                                      
 (pounds) (4)...........   12,544   12,328   11,777   12,375   12,625    12,008    12,648 
Average revenue per hun-                                                                  
 dredweight.............    $9.28    $9.82    $9.55    $9.97   $11.24    $11.10    $11.94 
At end of period:                                                                         
Average age of equipment                                                                  
 (years):                                                                                 
 Tractors...............      6.8      6.5      6.8      7.0      7.1       N/A       6.8 
 Trailers...............      8.0      7.0      7.2      7.7      8.7       N/A       8.8 
Tractors owned or                                                                         
 leased.................    5,254    5,364    5,414    5,023    4,799       N/A     4,834 
Trailers owned or                                                                         
 leased.................   17,105   18,858   19,809   19,479   19,439       N/A    19,611 
Service centers.........      166      173      175      161      164       N/A       166 

--------                                                                        
(1) The ratio of operating expenses (before goodwill amortization) to operating 
revenues.                                                               
(2) In millions of pounds.                                                      
(3) LTL only (weighted by cubic feet).                                          
(4) Average weight per 28-foot-long trailer.                                    

11

S-1/A
14th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 14th
RISK FACTORS  

An investment in the shares of Common Stock offered hereby involves a high  
degree of risk. Prospective purchasers of the Common Stock should carefully     
consider the following risk factors in addition to the other information        
contained in this Prospectus in evaluating an investment in the shares of       
Common Stock offered hereby.                                                    

RECENT LOSSES                                                                   

Although the Company reported net income (before goodwill amortization) of  
$23.8 million in 1997 and $19.8 million for the first six months of 1998, the   
Company experienced net losses (before goodwill amortization) of $4.2 million   
and $23.4 million in 1995 and 1996, respectively. There can be no assurance     
that the Company will be able to generate net income on a quarterly or annual   
basis in the future.                                                            

THREAT OF COMPETITION                                                           

The LTL trucking industry is highly competitive, and the Company competes   
against other carriers on the basis of service quality and reliability, as      
well as price. The Company competes with regional and national LTL and          
truckload carriers, and, to a lesser extent, with package carriers and          
railroads, some of which have greater financial and other resources or lower    
operating costs than the Company. In addition, in any particular market, other  
carriers often have greater economies of scale and lane density that enhance    
their ability to compete on the basis of service quality or price.              
Deregulation in the industry has resulted in ease of entry and increased        
competition. Intense competition has from time to time resulted in aggressive   
price discounting and narrow margins. Although the Company believes it is       
positioned well to compete in the industry in the future, there can be no       
assurance that the Company will be successful in its attempts to meet the       
competitive demands of the industry. Failure to do so would have a material     
adverse effect on its business or financial condition.                          

DISPUTES WITH LABOR ORGANIZATIONS                                               

In general, non-union carriers in the LTL trucking industry have significant
advantages over unionized carriers, including less restrictive work rules and   
lower labor costs, particularly with respect to benefit plan costs. There can   
be no assurance that the Company will be able to maintain its current cost      
advantage over certain of its competitors, particularly if the portion of the   
Company's work force that is represented by a union increases significantly.    
Such a change could cause the Company to alter its collective bargaining        
practices, increase its costs and change its operating methods. In addition,    
while the Company has not experienced any significant work stoppages by its     
employees, the existence of union organizing activities and unresolved          
collective bargaining negotiations at certain of the Company's facilities       
means that there can be no assurance that the Company will not experience work  
stoppages in the future. Any such significant work stoppage, or the threat      
thereof, could, in turn, adversely affect the Company's operations. The         
Company has adopted contingency plans should a work stoppage occur. However,    
depending upon the scope, duration and severity of any such stoppage and the    
effectiveness of the Company's contingency plans, the effect could be           
material.                                                                       

Teamsters Union representatives have publicly stated their intention of     
increasing the Union's organizing and bargaining efforts during the Offering.   
On July 9, 1998, the Teamsters Union announced that Teamster leaders            
authorized a nationwide strike to occur at the Company if the Teamsters do not  
succeed in reaching a contract with the Company. Prior to such announcement,    
certain employees at the Company's Atlanta service center staged a one-day      
work stoppage on June 22, 1998 and certain employees at the Company's           
Cincinnati, Kansas City and Miami service centers staged one-day work           
stoppages on June 29, 1998. Each of these Teamster-represented service centers  
remained open during the day with Company drivers continuing to make pickups    
and deliveries. On July 24, 1998, the Teamsters Union announced that it was     
temporarily holding in abeyance strike plans while awaiting the outcome of      
contract negotiations. However, the Company cannot predict whether additional   
Teamster-organized work stoppages or other job actions may be staged            
throughout the Offering period or thereafter. The Company also cannot predict   
the nature, scope or duration of any such activities or the effect such         
activities may have on the Company's business or financial condition. In        
particular, the Company cannot predict the effect that such activities, or the  
threat thereof, will                                                            

12  

S-1/A
15th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 15th
have on the Company's customer base. On July 10, 1998, the Company offered the  
Teamsters Union an opportunity for a system-wide election. The Teamsters Union  
has rejected the Company's proposal. In 1995, the Company made a similar offer  
through the NLRB which was not accepted by the Teamsters Union.                 

The Teamsters Union has made efforts to represent employees at certain of   
the Company's 166 service centers, particularly over the last several years.    
Since 1994, the Company has received 89 petitions for union elections at 66     
service centers. To date, approximately 1,800 employees at 22 service centers,  
including hub service centers in Kansas City, Kansas, and Memphis, Tennessee,   
representing approximately 14% of all employees (approximately 17% of non-      
management employees), are represented by the Teamsters Union. Elections        
affecting approximately 400 additional employees at four additional service     
centers, representing approximately 3% of the Company's employees               
(approximately 4% of non-management employees), are unresolved. There are no    
elections currently scheduled; however, the Company recently has received a     
petition for a union election at its service center in Irwin, Pennsylvania,     
which has approximately 30 employees. To date, the Company has not entered      
into any collective bargaining agreements with the Teamsters Union; however,    
the Company is engaged in collective bargaining negotiations over union         
contract demands at the 22 represented locations, two of which (the Kansas      
City hub and Memphis hub) are among the five largest Company service centers.   

At 15 additional service centers (only 13 of which are currently operating),
the General Counsel of the National Labor Relations Board (the "NLRB") and the  
Teamsters Union are disputing the outcome of union elections won by the         
Company and are seeking NLRB orders that the Company must bargain with the      
union despite the election outcomes. On April 10, 1998, an administrative law   
judge at the NLRB issued a recommended order (the "ALJ Order") that, among      
other things, would require the Company to bargain with the union upon request  
at four of these service centers. The Company plans to appeal this decision to  
the full NLRB, and, if necessary, to a U.S. Court of Appeals. The complaints    
for bargaining orders at 11 remaining service centers (only nine of which are   
currently operating) are still before NLRB administrative law judges.           
Employees at the four service centers subject to the ALJ Order, together with   
those at the 11 other service centers where bargaining orders are being         
sought, account for approximately 8% of the Company's nationwide work force     
(approximately 9% of the non-management work force).                            

There are no assurances that more employees will not vote for unionization. 
In that circumstance, one possibility would be for the Company to alter its     
posture in collective bargaining, increase its costs and change its operating   
methods, which in turn could have a materially adverse effect on the Company's  
operating results. Another possibility is for the Teamsters Union to change     
its contract demands in a way that would permit the Company to agree without    
significantly increasing costs and operating structures. A third possibility    
is a strike that, if sufficiently widespread, lengthy and severe, could have a  
materially adverse effect on the Company. See "Business--Employees."            

INFLUENCE OF ECONOMY                                                            

The Company is affected directly by the state of the overall economy as well
as by the regional economies of the eastern half of the United States, where    
its principal operations are located, and over which the Company has no         
control. Any significant decline in tonnages shipped as a result of an          
economic slowdown could increase competitive pressures and adversely affect     
the Company.                                                                    

EFFECTS OF SEASONAL CHANGES                                                     

The LTL trucking industry is affected by seasonal fluctuations, which affect
tonnage to be transported. Freight shipments, operating costs and earnings are  
also affected adversely by inclement weather conditions. Decreased shipping     
demand and weather conditions usually result in lower profitability in the      
first and fourth quarters of each year. See "Management's Discussion and        
Analysis of Financial Condition and Results of Operations--Seasonality and      
Quarterly Results of Operations."                                               

13  

S-1/A
16th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 16th
DEPENDENCE ON FUEL                                                              

In 1997, fuel (excluding fuel taxes) represented approximately 3% of total  
operating costs. As of June 30, 1998, the Company had hedged approximately 42%  
of its forecasted fuel consumption for the remainder of 1998. For this portion  
of its fuel expense, the Company will not be materially affected (positively    
or negatively) by changes in fuel prices. However, for the remaining 58% of     
its forecasted fuel consumption for the remainder of 1998, and for any other    
period, to the extent not hedged, fuel costs will change with market prices.    
When fuel costs exceed the Company's planned levels, the Company seeks to       
charge a portion of the higher cost to its customers as a fuel surcharge. If    
fuel prices increase and the Company is unable to pass this cost to its         
customers, the additional expense will have an adverse effect on Company's      
business and financial condition. See "Business--Fuel."                         

RELIANCE ON DRIVERS                                                             

Competition for qualified drivers is intense within the transportation      
industry, and periodically the trucking industry has suffered from a shortage   
of qualified drivers. Management believes that this problem has primarily       
affected the truckload carriers. Since its March 1995 wage increase, the        
Company has not experienced problems hiring a sufficient number of drivers.     
However, there can be no assurance the Company will not experience a shortage   
of qualified drivers, which could result in temporary underutilization of       
revenue equipment, difficulty in meeting shippers' demands and increased        
compensation levels, and which could have a material adverse effect on the      
Company's business, financial condition or growth. See "Business--Drivers."     

REQUIREMENTS FOR CAPITAL                                                        

The Company's business requires substantial ongoing capital investments,    
particularly for new tractors and trailers. In 1998, the Company expects that   
capital expenditures will total approximately $58.2 million, including $26.1    
million spent during the first six months. To date, the Company has been a      
wholly-owned subsidiary of UPC and not an independent entity. Accordingly, a    
portion of the Company's capital expenditures have been financed by advances    
from UPC or facilitated by credit support from UPC. Following the Offering,     
however, capital expenditures will be limited to the resources of the Company   
and its ability to obtain debt or equity financing. In connection with the      
Offering, the Company has entered into a commitment letter for the Bank Credit  
Facility, which will provide $200 million of revolving credit for five years.   
See "Bank Credit Facility." The Company intends to use primarily cash flow      
from operations to fund its capital expenditure program. In the future, if the  
Company were unable to generate sufficient cash flow from operations, borrow    
sufficient funds, enter into acceptable leases or debt financing arrangements,  
or sell additional equity, it would be forced to limit its growth and might be  
required to operate its fleet with older equipment, which could have a          
material adverse effect on the Company's business. See "Management's            
Discussion and Analysis of Financial Condition and Results of Operations--      
Liquidity and Capital Resources."                                               

DEPENDENCE ON KEY MANAGERS                                                      

The success of the Company's business is dependent upon the ability of the  
Company's Chief Executive Officer, Leo Suggs, and its other senior executive    
officers to continue to implement the restructuring of the Company's            
operations that began in 1996. The loss of services of any of these key         
personnel could have a material adverse effect on the business. The Company     
does not have employment or non-competition contracts with, nor does it intend  
to maintain key man life insurance on, any of its executive officers.           

RELIANCE ON PURCHASED TRANSPORTATION                                            

The Company uses purchased transportation, primarily intermodal rail and    
contract linehaul, to handle chronic lane imbalances. The Company will move     
trailer loads in one direction using purchased rail intermodal or contract      
carriage in situations when scheduling a Company driver to move the load would  
result in the driver returning with empty trailers. The Company will also, on   
occasion, augment its linehaul capacity during certain peak periods through     
the use of purchased transportation. As customers demand shorter transit        
times, the number of cost-effective intermodal options which conform to         
customer requirements may be reduced. A reduction in the availability of        
purchased transportation may mean the Company could provide certain customer    
services only                                                                   

14  

S-1/A
17th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 17th
at increased cost, which could have an adverse affect on the Company's          
business. See "Business--Company Operations--Network Operations."               

ABSENCE OF RECENT HISTORY AS A STAND-ALONE COMPANY                              

Since 1986, the Company has been a wholly-owned subsidiary of UPC. Although 
the Company has operated as a separate business, distinct from UPC's other      
activities, the Company has relied on UPC for certain support functions, as     
well as financial support. No recent financial or operating history of the      
Company as an independent entity is available for investors to evaluate. As     
described in the pro forma financial statements included herein, the Company    
currently estimates that it will incur approximately $6.5 million per year of   
incremental operating expenses as a result of being a stand-alone public        
company and will no longer receive intercompany interest from UPC. The stand-   
alone costs are estimates, and actual incremental expenses could be higher.     
The Company expects to borrow under the Bank Credit Facility in connection      
with the Acquisition, and may make further borrowings thereunder from time to   
time after the Acquisition to finance working capital and capital               
expenditures. Accordingly, the Company will have additional leverage and will   
incur additional interest expense following the Offering which could affect     
its financial and operating flexibility. See "Management's Discussion and       
Analysis of Financial Condition and Results of Operations--Liquidity and        
Capital Resources" and the pro forma consolidated financial statements          
included elsewhere herein.                                                      

ABSENCE OF PRIOR PUBLIC MARKET                                                  

Prior to the Offering, there has been no public market for any securities of
the Company and there can be no assurance that any active public market for     
the Common Stock will develop. The Common Stock has been approved for           
quotation on the Nasdaq National Market System. The offering price per share    
of the Common Stock will be determined in negotiations among the Company, UPC   
and representatives of the Underwriters and may not be indicative of the        
market price after the Offering. See "Underwriters."                            

DIVIDEND POLICY                                                                 

The Company currently intends to retain its future earnings for general     
corporate purposes, including working capital and capital expenditures. Any     
payment of cash dividends in the future will be at the discretion of the        
Company's Board of Directors and will depend upon the Company's results of      
operations, earnings, capital requirements, contractual restrictions and other  
factors deemed relevant by the Company's Board.                                 

CONSEQUENCES OF ANTI-TAKEOVER PROVISIONS                                        

The Company's Articles of Incorporation and Bylaws contain certain          
provisions which may discourage or make more difficult any attempt by a person  
or group to obtain control of the Company, including provisions authorizing     
the issuance of preferred stock without shareholder approval, requiring         
staggered three-year terms for directors, and providing that directors may be   
removed only for cause. In addition, certain provisions of Virginia law could   
delay or make more difficult a merger, tender offer or proxy contest involving  
the Company, including limitations on "affiliated transactions" with an         
"interested shareholder". The Company has opted out of limits on "control       
share acquisitions" provided under Virginia law, but could opt in to such       
provisions in the future without a shareholder vote. See "Description of        
Capital Stock--Virginia Corporate Law, Articles of Incorporation and Bylaws     
Provisions."                                                                    

POSSIBLE ADVERSE EFFECT OF GOVERNMENT POLICY AND REGULATIONS                    

Transportation. The LTL trucking industry is subject to regulation by       
various federal and state agencies, including the U.S. Department of            
Transportation. These regulatory authorities have broad powers, and the         
trucking industry is subject to regulatory and legislative changes (including   
as to limits on vehicle weights and size) that can affect the economics of the  
industry by requiring changes in operating practices or influencing the demand  
for, and the costs of providing, services to shippers. See "Business--          
Regulation."                                                                    

Environmental. The Company's trucking operations are subject to stringent   
environmental laws and regulations, including laws and regulations dealing      
with the transportation, storage, presence, use, disposal and                   

15  

S-1/A
18th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 18th
handling of hazardous materials, discharge of storm water, facility and         
vehicle emissions into the atmosphere and underground storage tanks.            
Approximately 7% of the shipments transported by the Company in 1997 were       
classified as hazardous under applicable federal or state regulations. Such     
shipments give rise to potential costs for spills or other incidents, although  
the Company has not incurred material liability for such incidents to date,     
and to the need to manage the Company's freight handling operations to avoid    
carrying incompatible cargo, such as foodstuffs and certain hazardous           
materials. In some situations involving the release or disposal of hazardous    
materials the Company could be liable for cleanup costs or be subject to        
fines, even if the contamination resulted from conduct of the Company that was  
lawful at the time or from improper conduct of persons engaged by the Company   
to dispose of hazardous materials. Costs associated with such cleanup and with  
compliance with environmental laws could be substantial and could have a        
material adverse effect on the Company's business, financial condition or       
results of operations. See "Business--Environmental Regulation" and             
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations--Environmental Matters."                                             

EXTENT OF YEAR 2000 PROBLEM                                                     

Sophisticated information systems are vital to the Company's profitability  
and growth. The "Year 2000 Problem" refers to the risk that computer hardware   
and software may be unable to recognize and properly execute date-sensitive     
functions involving dates after December 31, 1999. Computer hardware or         
software that does not properly recognize such information could generate       
erroneous data or cause a system to fail. In 1995, the Company began modifying  
its computer systems to process transactions involving the year 2000 and        
beyond. Costs to convert these systems, estimated to total $7 million, are      
expensed as incurred. To date, approximately 70% of the Company's mainframe     
applications have been converted and the Company plans to complete the          
conversion of the entire mainframe environment by year-end 1998. Vendor-        
purchased PC and client server packages will be upgraded to year 2000 releases  
by year-end 1998. In addition, the Company is requesting certification letters  
from all major suppliers to ensure the ability of those vendors to provide      
products that are year 2000 compliant during the millennium changeover. All     
work is planned to be completed no later than the second quarter of 1999.       

There can be no assurance that the Company will identify the extent of its  
entire Year 2000 Problem, or that its suppliers will do so, in advance of the   
new millennium, or that the Company or its suppliers will successfully remedy   
all the problems that are discovered. A failure in whole or in part of the      
Company's or the Company's suppliers' computer systems could have a material    
adverse effect on the business or financial condition of the Company.           

USE OF PROCEEDS 

Assuming the Underwriters do not exercise their over-allotment option, the  
proceeds to the Company from the issuance of the Common Stock pursuant to the   
Offering are estimated to be approximately $414 million net of underwriting     
discounts. All such net proceeds received by the Company, together with a $105  
million borrowing under the Bank Credit Facility, will be used to purchase all  
the outstanding OHI Stock from UPC. See "Certain Transactions." In addition,    
the Company will be required to pay certain of the expenses of the Offering,    
which are estimated at $1,570,000.                                              

If the Underwriters' over-allotment option is exercised in full, the        
proceeds to the Company from the sale of the 3,360,000 shares covered by such   
option are estimated to be approximately $41.4 million net of underwriting      
discounts. These net proceeds will be used to reduce indebtedness under the     
Bank Credit Facility that was incurred immediately prior to the Acquisition to  
finance a portion of the cost of the Acquisition. See "The Acquisition."        

DIVIDEND POLICY 

The Company currently intends to retain its future earnings for general     
corporate purposes, including working capital and capital expenditures. Any     
payment of cash dividends in the future will be at the discretion of the        
Company's Board of Directors and will depend upon the Company's results of      
operations, earnings, capital requirements, contractual restrictions and other  
factors deemed relevant by the Company's Board.                                 

16  

S-1/A
19th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 19th
CAPITALIZATION  

The following table sets forth the short-term debt and capitalization of the
Company at June 30, 1998 and such short-term debt and capitalization on a pro   
forma basis after giving effect to (i) the Offering (assuming net proceeds to   
the Company of $414 million) and (ii) the Acquisition. The entire net proceeds  
to the Company from the Offering (before payment of expenses and without        
giving effect to any exercise of the Underwriters' over-allotment option),      
together with a $105 million borrowing under the Bank Credit Facility, will be  
used to purchase the OHI Stock from UPC. This table should be read in           
conjunction with the consolidated financial statements and the notes thereto    
and the unaudited pro forma consolidated financial information of the Company   
included elsewhere in this Prospectus.                                          

                                                                [Download Table]

                                                           JUNE 30, 1998   
                                                         ------------------
                                                          ACTUAL  PRO FORMA
                                                         -------- ---------
                                                           (IN MILLIONS)   
                                                                           
Short-term debt (including current portion of long-term                    
 debt).................................................. $    2.9  $  2.9  
                                                         ========  ======  
Long-term debt:                                                            
  Bank facility (1)(2)..................................      --    105.0  
  Other long-term debt..................................      3.9     3.9  
                                                         --------  ------  
    Total long-term debt................................      3.9   108.9  
Stockholders' equity:                                                      
  UPC investment........................................  1,112.1     --   
  Common stock (par value $.01; authorized 150,000,000;                    
   issued and outstanding 33,600,000 pro forma).........      --       .3  
  Additional paid-in capital............................      --    412.0  
                                                         --------  ------  
      Total capitalization.............................. $1,116.0  $521.2  
                                                         ========  ======  

--------                                                                        
(1) At the closing of the Offering, the Company will have a $200 million        
revolving Bank Credit Facility. An initial $105 million borrowing       
  thereunder will be used to finance a portion of the purchase price for the
Acquisition. The remaining borrowing capacity will be available for     
working capital, capital expenditures and other corporate purposes. See 
"Bank Credit Facility."                                                 
(2) If the Underwriters' over-allotment option is exercised, the net proceeds   
to the Company therefrom will be used to reduce indebtedness under the  
Bank Credit Facility.                                                   

17  

S-1/A
20th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 20th
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA 

The selected historical consolidated statement of income data for each of   
the three years in the period ended December 31, 1997 and historical            
consolidated balance sheet data as of December 31, 1996 and 1997 are derived    
from the consolidated financial statements of the Company, which have been      
audited by Deloitte & Touche LLP, independent auditors. The selected            
historical consolidated financial data set forth below should be read in        
conjunction with the consolidated financial statements and notes thereto of     
the Company included elsewhere in this Prospectus, "Management's Discussion     
and Analysis of Financial Condition and Results of Operations" and other        
financial data included herein. The selected historical consolidated statement  
of income data for the years ended December 31, 1993 and 1994 and the six       
months ended June 30, 1997 and 1998 and historical balance sheet data as of     
December 31, 1993, 1994 and 1995 and June 30, 1998 are derived from the         
unaudited condensed consolidated financial statements of the Company. In the    
opinion of the Company, such unaudited condensed consolidated financial         
statements include all adjustments (consisting of only normal recurring         
adjustments) necessary for a fair presentation of the information set forth     
therein. The results of operations for the six months ended June 30, 1998 are   
not necessarily indicative of results that may be expected for the full year.   
The selected pro forma consolidated financial data are derived from the         
unaudited pro forma consolidated financial statements of the Company included   
elsewhere in this Prospectus. The selected pro forma consolidated financial     
data give effect to the Offering and the Acquisition as if they had been        
consummated at the beginning of each period presented with respect to the pro   
forma statement of income data and as of the date presented with respect to     
the pro forma statement of financial condition. The selected pro forma          
consolidated financial data may not be indicative of results that would have    
actually occurred if the Offering and the Acquisition had been effected on the  
dates indicated or the results that may be obtained in the future. The          
selected pro forma consolidated financial data should be read in conjunction    
with the consolidated financial statements and notes thereto of the Company,    
and the unaudited pro forma consolidated financial statements of the Company    
included elsewhere in this Prospectus.                                          

                                                        [Enlarge/Download Table]

                                       YEAR ENDED DECEMBER 31,                                SIX MONTHS ENDED JUNE 30,
                   ------------------------------------------------------------------ ---------------------------------
                                                                         PRO FORMA(1)                    PRO FORMA(1)  
                   1993(2)      1994       1995        1996       1997       1997       1997      1998       1998      
                   --------  ---------- ----------  ----------  -------- ------------ --------  -------- ------------  
                                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)                              
                                                                                                                       
STATEMENT OF                                                                                                           
 INCOME DATA:                                                                                                          
Operating                                                                                                              
 revenue.........  $939,199  $1,037,236 $  975,963  $  960,998  $945,968    $945,968  $451,329  $519,316    $519,316   
Operating                                                                                                              
 expenses:                                                                                                             
 Salaries, wages                                                                                                       
  and benefits...   550,882     597,324    625,573     622,569   572,381     573,542   280,245   313,040     313,621   
 Supplies and                                                                                                          
  expenses.......   110,222     115,960    125,936     130,565   109,922     109,922    52,094    57,303      57,303   
 Operating                                                                                                             
  taxes..........    41,258      48,251     49,085      46,027    41,091      41,091    21,059    22,010      22,010   
 Claims and                                                                                                            
  insurance......    26,198      38,613     30,359      33,921    30,291      30,291    14,422    15,836      15,836   
 Rents and                                                                                                             
  purchased                                                                                                            
  transportation..   61,380      88,859     83,274      91,380    75,632      75,632    32,354    42,472      42,472   
 Communications                                                                                                        
  and utilities..    16,017      18,618     19,057      19,488    17,497      17,497     9,144     9,054       9,054   
 Depreciation....    34,574      40,355     44,932      45,418    42,516      42,516    21,107    22,821      22,821   
 Amortization of                                                                                                       
  goodwill (1)...    23,000      23,000     19,500      19,500    19,500       4,351     9,750     9,750       2,176   
 Other expenses..     6,811       9,433     17,407      19,596    26,826      31,915    11,125    10,884      13,428   
                   --------  ---------- ----------  ----------  --------  ----------  --------  --------  ----------   
 Total operating                                                                                                       
  expenses.......   870,342     980,413  1,015,123   1,028,464   935,656     926,757   451,300   503,170     498,721   
                   --------  ---------- ----------  ----------  --------  ----------  --------  --------  ----------   
Operating income                                                                                                       
 (loss)..........    68,857      56,823    (39,160)    (67,466)   10,312      19,211        29    16,146      20,595   
Intercompany                                                                                                           
 interest                                                                                                              
 income..........    14,046       8,101      9,399       9,268    11,378          --     5,069     6,067          --   
Interest                                                                                                               
 expense.........       755       1,342      1,822       1,532     1,774       8,849       667       727       4,265   
Other income                                                                                                           
 (expense).......       (92)      1,188       (325)      3,116         2           2      (331)      463         463   
                   --------  ---------- ----------  ----------  --------  ----------  --------  --------  ----------   
Income (loss)                                                                                                          
 before income                                                                                                         
 taxes...........    82,056      64,770    (31,908)    (56,614)   19,918      10,364     4,100    21,949      16,793   
Income tax                                                                                                             
 (benefit).......    41,089      30,367     (8,163)    (13,723)   15,609       4,859     5,570    11,866       6,351   
                   --------  ---------- ----------  ----------  --------  ----------  --------  --------  ----------   
Net income                                                                                                             
 (loss)(3).......  $ 40,967  $   34,403 $  (23,745) $  (42,891) $  4,309    $  5,505  $ (1,470) $ 10,083    $ 10,442   
                   ========  ========== ==========  ==========  ========  ==========  ========  ========  ==========   
Pro forma income                                                                                                       
 per share (3)                                                                                                         
 Basic...........                                                           $    .16                        $    .31   
 Diluted.........                                                           $    .16                        $    .31   
Pro forma                                                                                                              
 weighted average                                                                                                      
 number of shares                                                                                                      
 outstanding                                                                                                           
 Basic...........                                                         33,600,000                      33,600,000   
 Common stock                                                                                                          
  equivalents....                                                             82,680                          82,680   
 Diluted.........                                                         33,682,680                      33,682,680   

18  

S-1/A
21st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 21st
                                                        [Enlarge/Download Table]

                                                                                        AS OF       
                                         YEAR ENDED DECEMBER 31,                    JUNE 30, 1998   
                          ------------------------------------------------------ -------------------
                                                                                              PRO   
                             1993       1994       1995       1996       1997      ACTUAL   FORMA(1)
                          ---------- ---------- ---------- ---------- ---------- ---------- --------
                                                        (IN THOUSANDS)                              
                                                                                                    
BALANCE SHEET DATA:                                                                                 
Current assets..........  $  287,498 $  303,082 $  283,784 $  304,120 $  330,404 $  344,881 $166,644
Properties-net..........     455,986    503,779    506,269    464,404    452,990    453,986  478,986
Goodwill-net............     765,309    742,929    600,413    580,913    561,413    551,663  174,025
Total assets............   1,510,750  1,550,845  1,435,033  1,389,980  1,380,239  1,383,153  823,364
Current liabilities.....     136,220    150,071    129,774    154,459    159,801    149,826  149,826
Debt due after one                                                                                  
 year...................         --      14,123     11,328      8,363      5,224      3,898  108,898
Common stockholders' eq-                                                                            
 uity...................   1,214,726  1,220,329  1,180,583  1,121,692  1,110,001  1,112,084  412,295

                                                        [Enlarge/Download Table]

                                                                         SIX MONTHS     
                                                                            ENDED       
                                  YEAR ENDED DECEMBER 31,                 JUNE 30,      
                          -------------------------------------------  ---------------- 
                           1993     1994     1995     1996     1997     1997     1998   
                          -------  -------  -------  -------  -------  -------  ------- 
                                                                                        
SELECTED OPERATING DATA:                                                                
For the period:                                                                         
Operating ratio (4).....     90.2%    92.3%   102.0%   105.0%    96.8%    97.8%    95.0%
Gross weight hauled                                                                     
 (millions of pounds):                                                                  
 Less-than-truckload....    8,553    9,115    8,860    8,580    7,682    3,705    4,023 
 Truckload..............    1,466    1,335    1,223      872      538      265      226 
                          -------  -------  -------  -------  -------  -------  ------- 
 Total..................   10,019   10,450   10,083    9,452    8,220    3,970    4,249 
Shipments (000's):                                                                      
 Less-than-truckload....    8,146    8,535    8,279    8,184    7,482    3,534    3,939 
 Truckload..............       60       58       53       39       24       12       11 
                          -------  -------  -------  -------  -------  -------  ------- 
 Total..................    8,206    8,593    8,332    8,223    7,506    3,546    3,950 
Average length of haul                                                                  
 (miles) (5)............      684      725      712      739      732      722      764 
Linehaul load factor                                                                    
 (pounds) (6)...........   12,544   12,328   11,777   12,375   12,693   12,008   12,648 
Average revenue per hun-                                                                
 dredweight.............    $9.28    $9.82    $9.55    $9.97   $11.24   $11.10   $11.94 
At end of period:                                                                       
Average age of equipment                                                                
 (years):                                                                               
 Tractors...............      6.8      6.5      6.8      7.0      7.1      N/A      6.8 
 Trailers...............      8.0      7.0      7.2      7.7      8.7      N/A      8.8 
Tractors owned or                                                                       
 leased.................    5,254    5,364    5,414    5,023    4,799      N/A    4,834 
Trailers owned or                                                                       
 leased.................   17,105   18,858   19,809   19,479   19,439      N/A   19,611 
Service centers.........      166      173      175      161      164      N/A      166 

--------                                                                        
(1) The unaudited pro forma data give effect to the Offering and the            
Acquisition. As described in the notes to the pro forma consolidated    
  financial statements included herein, (i) the Acquisition will result in a
new basis of accounting which will result in the assets and liabilities 
being recorded at fair value, all historical goodwill associated with   
UPC's acquisition of the Company being eliminated and new goodwill being
recorded to reflect the excess of the purchase price over the fair value
of the assets acquired, (ii) immediately prior to the Acquisition, the  
Company will borrow $105 million under the Bank Credit Facility to pay a
  portion of the purchase price, (iii) the Company will forgive $148 million
of intercompany debt owed by UPC and (iv) following the Acquisition, the
Company will incur operating expenses and interest expense in excess of 
the amounts reflected in the historical financial statements and will no
 longer receive intercompany interest from UPC. If the Underwriters' over-
  allotment option is exercised, the net proceeds will be used to reduce the
indebtedness under the Bank Credit Facility.                            
(2) Net income for 1993 excludes the effect of a $79 million after-tax charge   
  for the cumulative effects of adjustments related to changes in accounting
principles for the recognition of liabilities of other postretirement   
benefits and deferred taxes and revenue recognition.                    
(3) If the Underwriters' over-allotment option is exercised in full, (i) pro    
 forma net income for 1997 and the six months ended June 30, 1998 would be
$7,199,789 and $11,289,395, respectively, and (ii) pro forma basic net  
 income per share for 1997 and the six months ended June 30, 1998 would be
  $.20 and $.31, respectively (assuming, in each case, that the net proceeds
 to the Company from the exercise of the over-allotment option equal $41.4
million).                                                               
(4) The ratio of operating expenses (before goodwill amortization) to           
operating revenues.                                                     
(5) LTL only (weighted by cubic feet).                                          
(6) Average weight per 28-foot-long trailer.                                    

19  

S-1/A
22nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 22nd
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

OVERVIEW                                                                        

The following discussion and analysis should be read in conjunction with the
historical consolidated financial statements of the Company and the notes       
thereto. In addition, as described under "Pro Forma Consolidated Financial      
Statements," significant changes will occur in the funding and operations of    
the Company following the Offering. As a result, the historical consolidated    
financial statements may not be indicative of the financial position and the    
results of operations that the Company would have attained if it had been an    
independent stand-alone company during the periods presented or which may       
occur in the future. The Company currently amortizes goodwill associated with   
UPC's purchase of the Company in 1986 in the amount of $19.5 million per year.  
This goodwill will be eliminated following the Offering and new goodwill will   
be recorded equal to the excess of the purchase price over the fair value of    
the assets acquired. Following the Acquisition, the Company will no longer      
receive interest income from UPC and expects to incur certain costs in          
connection with its status as a stand-alone public company that will exceed     
the costs that are currently charged to the Company by UPC and reflected in     
the historical consolidated financial statements. The Company's current         
estimate of the amount of these additional expenses is reflected in the pro     
forma consolidated financial statements included herein. The Company expects    
to incur indebtedness under the Bank Credit Facility in connection with the     
Acquisition and, as necessary, to finance working capital and capital           
expenditures after the Offering. The estimated interest expense associated      
with the initial borrowing under the Bank Credit Facility is reflected in the   
pro forma financial statements.                                                 

HISTORICAL REVENUES AND OPERATING COSTS                                         

Operating revenue varies depending upon the amount of volume hauled and     
price per hundredweight charged to customers. Beginning in 1996, as the         
Company initiated its turnaround, quarterly gross volume began declining from   
a level of 2.6 billion pounds and reached a low point of 1.9 billion pounds in  
the first quarter of 1997. These declines reflected reduced volume, following   
significant price increases targeted at certain low-margin customers.           
Quarterly volume has increased to 2.1 billion pounds in the second quarter of   
1998.                                                                           

Revenue per hundredweight varies based upon commodities shipped as well as  
the distance goods are transported. Average revenue per hundredweight, which    
was $9.65 for the first quarter of 1996, has increased in seven of the nine     
following quarters reaching $12.01 for the second quarter of 1998. The recent   
increase in tonnage and overall growth in revenue per hundredweight was         
primarily the result of improved service quality and stronger pricing           
discipline, as well as the continued strength of the U.S. economy.              

Salaries, wages and benefits expense is the primary component of operating  
costs, representing approximately 60% of operating revenue. While a majority    
of these costs vary with tonnage levels, portions of these costs, such as       
sales and marketing and general and administrative expenses are relatively      
fixed. Other major expenses include fuel, maintenance and purchased             
transportation, which generally vary based upon the number of shipments and     
miles traveled as well as demand for Company services.                          

Throughout 1997 and the first six months of 1998, the Company benefited from
several strategic initiatives implemented in 1996 to better compete in the      
current trucking industry environment. The development of these initiatives     
was a direct result of the Company's adoption of a new business strategy        
emphasizing service quality, cost control, yield improvement and profitable     
revenue growth. Actions taken by the Company included service center            
consolidations, centralization of the network management process, work force    
reductions and pricing initiatives targeting the Company's lowest margin        
customers. As a result, the Company generated net income (before goodwill       
amortization) of $23.8 million in 1997, compared to a net loss (before          
goodwill amortization) of $23.4 million in 1996. The Company recorded net       
income of $4.3 million in 1997 compared with a net loss of $42.9 million in     
1996.                                                                           

20  

S-1/A
23rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 23rd
RESULTS OF OPERATIONS                                                           

The following table sets forth certain statement of income data expressed as
a percentage of operating revenue:                                              

                                                                [Download Table]

                                                                 SIX MONTHS   
                                               YEAR ENDED           ENDED     
                                              DECEMBER 31,        JUNE 30,    
                                            -------------------  ------------ 
                                            1995   1996   1997   1997   1998  
                                            -----  -----  -----  -----  ----- 
                                                                              
Operating revenue.......................... 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses:                                                           
 Salaries, wages and benefits..............  64.1   64.8   60.5   62.1   60.3 
 Supplies and expenses.....................  12.9   13.6   11.6   11.5   11.0 
 Operating taxes...........................   5.0    4.8    4.3    4.7    4.2 
 Claims and insurance......................   3.1    3.5    3.2    3.2    3.1 
 Rents and purchased transportation........   8.5    9.5    8.0    7.2    8.2 
 Communications and utilities..............   2.0    2.0    1.8    2.0    1.7 
 Depreciation..............................   4.6    4.7    4.5    4.7    4.4 
 Amortization of goodwill..................   2.0    2.0    2.1    2.1    1.9 
 Other expenses............................   1.8    2.1    2.9    2.5    2.1 
                                            -----  -----  -----  -----  ----- 
    Total operating expenses............... 104.0  107.0   98.9  100.0   96.9 
                                            -----  -----  -----  -----  ----- 
Operating income (loss)....................  (4.0)  (7.0)   1.1    0.0    3.1 
Intercompany interest income...............   1.0    1.0    1.2    1.1    1.2 
Interest expense...........................   0.2    0.2    0.2    0.1    0.1 
Other income...............................   0.0    0.3    0.0   (0.1)   0.1 
                                            -----  -----  -----  -----  ----- 
Income (loss) before income taxes..........  (3.2)  (5.9)   2.1    0.9    4.3 
Income taxes (benefit).....................  (0.8)  (1.4)   1.7    1.2    2.3 
                                            -----  -----  -----  -----  ----- 
Net income (loss)..........................  (2.4)  (4.5)   0.4   (0.3)   2.0 
                                            =====  =====  =====  =====  ===== 
Operating ratio (before goodwill amortiza-                                    
 tion)..................................... 102.0% 105.0%  96.8%  97.8%  95.0%

Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997     
(unaudited)                                                                     

Operating Revenue. Operating revenue increased 15.1% to $519.3 million for  
the six months ended June 30, 1998, from $451.3 million for the comparable      
period in 1997. This improvement was primarily the result of increased volume   
($36.0 million), particularly in the long-haul segment, as well as yield        
enhancements ($32.0 million), including a 5.4% general rate increase that was   
implemented on January 4, 1998. An increased average yield of $11.94 per        
hundredweight was attained in the six months ended June 30, 1998, as compared   
to $11.10 per hundredweight for the comparable period in 1997.                  

Operating Expenses. Salaries, wages and benefits increased 11.7% to $313.0  
million for the six months ended June 30, 1998, from $280.2 million for the     
comparable period in 1997. As a percentage of operating revenue, salaries,      
wages and benefits decreased to 60.3% for the six months ended June 30, 1998,   
from 62.1% for the comparable period in 1997. The increase in salaries and      
wages was due to the increase in volume ($15.7 million), as well as a 3.1%      
wage increase for all freight handling employees effective January 1, 1998 and  
all other employees as of April 5 ($8.0 million). Increased benefit costs in    
1998 ($9.2 million) were due to benefit enhancements and higher payroll-        
related taxes. The increase in payroll costs was also attributable to $0.9      
million in severance costs incurred in June 1998 as a result of efforts to      
streamline operations and to decentralize billing functions. The                
decentralization initiative is expected to result in additional one-time costs  
in the third quarter of less than $1.0 million. These increases were partially  
offset by productivity improvements and the increased use of purchased          
services.                                                                       

Supplies and expenses, which consist primarily of fuel, maintenance and     
operating supplies, increased 10.0% to $57.3 million for the six months ended   
June 30, 1998, from $52.1 million for the comparable period in 1997. As a       
percentage of operating revenues, supplies and expenses decreased to 11.0% for  
the six months ended June 30, 1998, from 11.5% for the comparable period in     
1997. The increase in freight volume was primarily                              

21  

S-1/A
24th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 24th
responsible for the increase in cost ($5.9 million), which was partially        
offset by favorable fuel prices and improved fuel efficiency from a newer       
fleet ($2.9 million). The increase in absolute cost was also due to increases   
in the use of temporary services in the billing operation and contract          
programmers ($1.8 million) to handle increased billing volume and continued     
work on the Year 2000 project. These costs are likely to subside as billing is  
decentralized and the Year 2000 project nears completion.                       

Operating taxes increased 4.5% to $22.0 million for the six months ended    
June 30, 1998, from $21.1 million for the comparable period in 1997. As a       
percentage of operating revenue, operating taxes decreased to 4.2% for the six  
months ended June 30, 1998, from 4.7% for the comparable period in 1997. The    
cost increase was due primarily to the higher quantity of fuel purchased ($0.8  
million).                                                                       

Claims and insurance increased 9.8% to $15.8 million for the six months     
ended June 30, 1998, from $14.4 million for the comparable period, which is     
consistent with higher freight volumes. As a percentage of operating revenue,   
claims and insurance expense decreased to 3.1% for the six months ended June    
30, 1998 from 3.2% for the comparable period in 1997, primarily due to the      
reduced number of claims paid as a result of improved freight handling.         

Rents and purchased transportation increased 31.1% to $42.5 million for the 
six months ended June 30, 1998, from $32.4 million for the comparable period    
in 1997. As a percentage of operating revenue, rents and purchased              
transportation increased to 8.2% for the six months ended June 30, 1998, from   
7.2% for the comparable period in 1997. The increase included additional        
contract and rail miles due to the volume increase ($1.2 million). Substitute   
linehaul miles were increased further in order to meet service standards and    
to reduce imbalance on the linehaul system ($6.9 million). In addition, more    
local purchased transportation was utilized to remain current with the higher   
than anticipated volumes ($1.5 million).                                        

Depreciation increased 8.1% to $22.8 million for the six months ended June  
30, 1998, from $21.1 million for the comparable period in 1997. As a            
percentage of operating revenue, depreciation decreased to 4.4% for the six     
months ended June 30, 1998, from 4.7% for the comparable period in 1997. The    
increase was a result of the $57.1 million of investments made in building      
improvements and revenue equipment enhancements during the last two quarters    
of 1997 and the first half of 1998.                                             

Other expense of $10.9 million for the six months ended June 30, 1998,      
consisting primarily of legal expense and bad debt expense, decreased $0.2      
million from the amount reported for the comparable period in 1997. As a        
percentage of operating revenue, other expense decreased to 2.1% for the six    
months ended June 30, 1998 from 2.5% for the comparable period in 1997.         

Operating Income. Operating income increased by $16.1 million to $16.1      
million for the six months ended June 30, 1998, from the $29 thousand reported  
for the comparable period in 1997. This improvement was primarily due to the    
increased volumes and yield ($68.0 million), which was offset by increased      
expenses ($51.9 million).                                                       

Intercompany Interest Income. Intercompany interest income increased 19.7%  
to $6.1 million for the six months ended June 30, 1998, from $5.1 million for   
the comparable period in 1997. This increase was due to higher intercompany     
balances from favorable cash flow from improved earnings.                       

1997 Compared to 1996                                                         

Operating Revenue. Operating revenue decreased 1.6% to $946.0 million in    
1997, from $961.0 million in 1996. The decrease was primarily due to a 13%      
decrease in tonnage hauled ($105.7 million). This volume decrease was a result  
of pricing initiatives begun in mid-1996. Partially offsetting the decrease in  
tonnage, an increased average yield of $11.24 per hundredweight was attained    
in 1997, as compared to $9.97 in 1996 ($90.7 million). The improvement in       
yield was attributable to contract renegotiation with national customers, as    
well as a general rate increase of 5.9% implemented at the beginning of 1997.   

22  

S-1/A
25th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 25th
Operating Expenses. Salaries, wages and benefits decreased 8.1% to $572.4   
million in 1997 from $622.6 million in 1996. As a percentage of operating       
revenue, salaries, wages and benefits decreased to 60.5% in 1997, from 64.8%    
in 1996. This improvement was a result of reduced volume ($64.9 million) and    
improved productivity ($5.6 million), and was slightly offset by a 3.1% wage    
increase ($17.3 million) and the shift from purchased services to Company       
wages ($3.1 million).                                                           

Supplies and expenses decreased 15.8% to $109.9 million in 1997, from $130.6
million in 1996. As a percentage of operating revenue, supplies and expenses    
decreased to 11.6% in 1997, from 13.6% in 1996. This reduction was due to       
reduced volume ($16.8 million), favorable fuel prices ($2.5 million), and       
reduced outside vehicle maintenance expense ($1.3 million).                     

Operating taxes decreased 10.7% to $41.1 million in 1997 from $46.0 million 
in 1996. As a percentage of operating revenue, operating taxes decreased to     
4.3% in 1997, from 4.8% in 1996. This change was a result of lower consumption  
of fuel ($4.1 million), as well as reduced expenses related to a smaller fleet  
and a lower number of facilities ($0.8 million).                                

Claims and insurance decreased 10.6% to $30.3 million in 1997, from $33.9   
million in 1996. As a percentage of operating revenue, claims and insurance     
decreased to 3.2% in 1997 from 3.5% in 1996. This improvement was due           
primarily to the implementation of several claims prevention programs,          
resulting in reduced claims expense.                                            

Rents and purchased transportation decreased 17.2% to $75.6 million in 1997,
from $91.4 million in 1996. As a percentage of operating revenue, rents and     
purchased transportation decreased to 8.0% in 1997, from 9.5% in 1996. The      
reduction was primarily a result of decreased volume ($11.9 million). In        
addition, savings were realized from an initiative to have more freight         
handled by Company employees as opposed to outside vendors, partially offset    
by the shift from rail to more expensive contract linehaul in order to          
maintain high levels of service ($3.9 million).                                 

Communications and utilities decreased 10.2% to $17.5 million in 1997, from 
$19.5 million in 1996. As a percentage of operating revenue, communications     
and utilities decreased to 1.8% in 1997 from 2.0% in 1996. This absolute        
dollar reduction reflects the lower number of facilities ($0.7 million),        
decreased shipment volume and controlled spending in communications             
(aggregating $1.3 million).                                                     

Depreciation decreased 6.4% to $42.5 million in 1997, from $45.4 million in 
1996. As a percentage of operating revenue, depreciation decreased to 4.5% in   
1997, from 4.7% in 1996. This decrease was a result of fewer facilities and a   
reduced fleet size.                                                             

Other expenses increased 36.9% to $26.8 million in 1997, from $19.6 million 
in 1996. As a percentage of operating revenue, other expense increased to 2.8%  
in 1997, from 2.0% in 1996. This increase was primarily due to an increase in   
legal ($3.2 million) and bad debt expense ($2.1 million).                       

Operating Income. Operating income increased $77.8 million to $10.3 million 
in 1997, from an operating loss of $67.5 million in 1996. The improvement was   
primarily attributable to the decrease in revenue ($15.8 million) being offset  
by a much higher decrease in operating expenses ($92.8 million), as described   
above.                                                                          

Intercompany Interest Income. Intercompany interest income increased 22.8%  
to $11.4 million in 1997, from $9.3 million in 1996. The increase was due to    
higher intercompany balances resulting from favorable cash flow from improved   
earnings.                                                                       

1996 Compared to 1995                                                         

Operating Revenue. Operating revenue decreased 1.5% to $961.0 million in    
1996, from $976.0 million in 1995. During the second quarter 1996, a pricing    
initiative was implemented, targeting the Company's largest low-margin          
accounts, representing approximately 20% of revenues. Significant price         
increases were sought from                                                      

23  

S-1/A
26th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 26th
all of these customers, and as a result most of the volume was lost when        
customers did not agree to the increases. The resulting revenue decrease was    
due to the lost tonnage from these customers ($38.0 million), partially offset  
by improvements in yield ($18.3 million), as well as the assessment of a fuel   
surcharge beginning in June of 1996 ($4.7 million).                             

Operating Expenses. Salaries, wages and benefits decreased 0.5% to $622.6   
million in 1996 from $625.6 million in 1995. As a percentage of operating       
revenue, salaries, wages and benefits increased to 64.8% in 1996, from 64.1%    
in 1995. The decrease in absolute cost was a result of a reduction in           
headcount primarily due to lower volumes and reductions in the general and      
administrative work force during the second and fourth quarters ($31.3          
million), offset by a general wage increase of 3.3% and other wage adjustments  
($24.6 million), and severance pay ($3.7 million).                              

Supplies and expenses increased 3.7% to $130.6 million in 1996, from $125.9 
million in 1995. As a percentage of operating revenue, supplies and expenses    
increased to 13.6% in 1996, from 12.9% in 1995. The increase was primarily a    
result of a 36% increase in fuel price per gallon ($7.4 million), and was       
offset by reduced miles driven, as well as the implementation of cost control   
measures for general and operating supplies expense ($2.7 million).             

Operating taxes decreased 6.2% to $46.0 million in 1996 from $49.1 million  
in 1995. The decrease was consistent with the reduction in volume. As a         
percentage of operating revenue, operating taxes decreased to 4.8% in 1996      
from 5.0% in 1995.                                                              

Claims and insurance increased 11.7% to $33.9 million in 1996, from $30.4   
million in 1995. As a percentage of operating revenue, claims and insurance     
increased to 3.5% in 1996, from 3.1% in 1995. This increase was due to service  
deterioration.                                                                  

Rents and purchased transportation increased 9.7% to $91.4 million in 1996, 
from $83.3 million in 1995. As a percentage of operating revenue, rents and     
purchased transportation increased to 9.5% in 1996, from 8.5% in 1995. The      
increase was primarily due to a higher usage of substitute linehaul (contract   
and rail) in an effort to balance freight flows ($4.1 million). In addition,    
local purchased transportation expense increased by approximately $2.2          
million, and building and equipment rental expense increased by approximately   
$1.5 million.                                                                   

Communications and utilities increased 2.3% to $19.5 million in 1996 from   
$19.1 million in 1995. As a percentage of operating revenue, communications     
and utilities was 2.0% for both 1996 and 1995. The cost increase was primarily  
due to harsh weather conditions in the first quarter of 1996, which resulted    
in higher utilities expense ($0.3 million).                                     

Depreciation increased 1.1% to $45.4 million in 1996, from $44.9 million in 
1995. As a percentage of operating revenue, depreciation increased to 4.7% in   
1996 from 4.6% in 1995. This increase was a result of the $24.5 million of      
capital expenditures made during the second half of 1995 and 1996.              

Other expense increased 12.6% to $19.6 million in 1996, from $17.4 million  
in 1995. The increase was due to higher professional services expense ($2.1     
million). As a percentage of operating revenue, other expense increased to      
2.0% in 1996 from 1.8% in 1995.                                                 

Operating Income.  Operating loss increased $28.3 million to $67.5 million  
in 1996 from the $39.2 million loss reported in 1995. As a percentage of        
operating revenue, operating loss increased to 7.0% in 1996, from 4.0% in       
1995. The higher loss was due to reduced revenue ($15.0 million) and increased  
expense ($13.3 million), as described above.                                    

Other Income. Other income increased by $3.4 million to $3.1 million in     
1996, from a loss of $0.3 million in 1995. This increase was primarily due to   
the sale of properties resulting from the consolidation of facilities during    
1996.                                                                           

24  

S-1/A
27th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 27th
SEASONALITY AND QUARTERLY RESULTS OF OPERATIONS                                 

In the LTL trucking industry, revenues generally follow a seasonal pattern  
as customers reduce shipments during and after the winter holiday season.       
Also, highway transportation can be adversely affected depending upon the       
severity of the weather in various sections of the country during the winter    
months. The Company's                                                           
operating expenses have historically been higher in winter months.              
Accordingly, the Company's results of operations may fluctuate to reflect such  
seasonality. Since 1996, these seasonal factors have been somewhat offset by    
the effects of the turnaround.                                                  

The following table summarizes certain quarterly financial and other data   
for the Company for 1996, 1997 and the first two quarters of 1998:              

                                                        [Enlarge/Download Table]

                                                               QUARTER ENDED                                           
                     --------------------------------------------------------------------------------------------------
                     MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31,  JUNE 30,  SEPT. 30,  DEC. 31,  MARCH 31, JUNE 30,
                       1996      1996     1996      1996      1997      1997       1997      1997      1998      1998  
                     --------- -------- --------- -------- ---------- --------- ---------- --------- --------- --------
                                                                                                                       
STATEMENT OF INCOME                                                                                                    
 DATA (MILLIONS):                                                                                                      
Operating revenue     $255.1    $256.6   $234.2    $215.1    $214.1    $237.3     $249.6    $245.0    $257.4    $261.9 
Operating expenses:                                                                                                    
 Salaries, wages                                                                                                       
  and benefits.....    168.7     163.6    152.1     138.2     135.6     144.7      149.0     143.1     154.4     158.7 
 Supplies and                                                                                                          
  expenses.........     35.8      35.4     30.6      28.7      25.7      26.4       27.4      30.4      28.4      28.9 
 Operating taxes...     13.0      12.4     10.7       9.9      10.7      10.4        9.8      10.2      11.0      10.9 
 Claims and insur-                                                                                                     
  ance.............      7.8       8.8      9.0       8.3       7.0       7.4        8.0       7.9       8.1       7.7 
 Rents and                                                                                                             
  purchased                                                                                                            
  transportation...     27.5      28.2     19.2      16.6      14.4      17.9       20.2      23.0      21.5      21.0 
 Communication and                                                                                                     
  utilities........      5.4       4.7      4.8       4.7       4.8       4.3        4.1       4.2       4.5       4.6 
 Depreciation......     11.4      11.4     11.7      10.9      10.5      10.6       10.6      10.9      11.2      11.7 
 Amortization of                                                                                                       
  goodwill.........      4.9       4.9      4.9       4.9       4.9       4.9        4.9       4.9       4.9       4.9 
 Other expenses....      5.3       4.7      4.5       4.9       5.2       5.9        6.8       9.0       5.2       5.6 
                      ------    ------   ------    ------    ------    ------     ------    ------    ------    ------ 
  Total operating                                                                                                      
   expenses........    279.8     274.1    247.5     227.1     218.8     232.5      240.8     243.6     249.2     254.0 
Operating income                                                                                                       
 (loss)............    (24.7)    (17.5)   (13.3)    (12.0)     (4.7)      4.8        8.8       1.4       8.2       7.9 
Intercompany inter-                                                                                                    
 est income........      1.8       2.1      2.5       2.9       2.4       2.6        3.1       3.3       3.0       3.1 
Interest expense...       .4        .4       .4        .3        .3        .3         .6        .5        .4        .4 
Other income (ex-                                                                                                      
 pense)............       --        --       .2       2.9        --       (.4)        .2        .1        .2        .3 
                      ------    ------   ------    ------    ------    ------     ------    ------    ------    ------ 
Income (loss)                                                                                                          
 before income                                                                                                         
 taxes.............    (23.3)    (15.8)   (11.0)     (6.5)     (2.6)      6.7       11.5       4.3      11.0      10.9 
Income taxes (bene-                                                                                                    
 fits).............     (6.9)     (4.0)    (2.2)      (.5)      1.0       4.5        6.4       3.7       6.2       5.6 
                      ------    ------   ------    ------    ------    ------     ------    ------    ------    ------ 
Net income (loss)..   $(16.4)   $(11.8)  $ (8.8)   $ (6.0)   $ (3.6)   $  2.2     $  5.1    $   .6    $  4.8    $  5.3 
                      ======    ======   ======    ======    ======    ======     ======    ======    ======    ====== 
SELECTED OPERATING                                                                                                     
 DATA:                                                                                                                 
Operating ratio                                                                                                        
 (excluding good-                                                                                                      
 will).............    107.8%    104.9%   103.6%    103.3%     99.9%     95.9%      94.5%     97.4%     94.9%     95.1%
Gross weight hauled                                                                                                    
 (billions of                                                                                                          
 pounds)...........      2.6       2.6      2.3       2.0       1.9       2.1        2.1       2.1       2.1       2.1 
Shipments (mil-                                                                                                        
 lions)............      2.2       2.2      2.0       1.8       1.7       1.9        2.1       1.9       2.0       2.0 
Average revenue per                                                                                                    
 hundredweight.....    $9.65     $9.73   $10.16    $10.49    $11.11    $11.09     $11.39    $11.35    $11.87    $12.01 
Average length of                                                                                                      
 haul (miles)(1)...      745       746      729       732       719       724        735       747       764       763 
Linehaul load                                                                                                          
 factor (thousands                                                                                                     
 of pounds)(2).....     12.0      12.0     12.4      13.1      12.7      12.6       12.6      12.6      12.7      12.9 

-------                                                                         
(1) LTL only (weighted by cubic feet).                                          
(2) Average weight per 28-foot-long trailer.                                    

LIQUIDITY AND CAPITAL RESOURCES                                                 

Net cash from operations was $42.6 million, $71.4 million and $27.0 million 
in 1996, 1997 and the six months ended June 30, 1998, respectively. Net cash    
from operations is attributable primarily to changes in net income (loss) and   
working capital items. In June 1998, the Company made a $10 million payment to  
the employee retirement plan. As a result, the plan is fully funded on both an  
accumulated benefit obligation and a projected benefit obligation basis.        

The Company's business requires substantial ongoing capital investments,    
particularly for new tractors and trailers. Capital expenditures totaled        
approximately $10.5 million, $40.4 million, and $26.1 million during 1996,      
1997 and the six months ended June 30, 1998, respectively, as set forth below:  

25  

S-1/A
28th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 28th
                                                                [Download Table]

                                                    YEAR ENDED               
                                                     DECEMBER                
                                                        31,          SIX     
                                                    ----------- MONTHS ENDED 
                                                    1996  1997  JUNE 30, 1998
                                                    ----- ----- -------------
                                                          (IN MILLIONS)      
                                                                             
Revenue equipment.................................. $ 4.9 $24.3     $13.3    
Land and buildings.................................    .6  10.2       7.2    
Other equipment....................................   5.0   5.9       5.6    
                                                    ----- -----     -----    
  Total capital expenditures....................... $10.5 $40.4     $26.1    
                                                    ===== =====     =====    

The Company has budgeted capital expenditures of $58.2 million for 1998,    
including $32.1 million for the last six months of the year, and currently      
expects 1999 capital expenditures to be approximately $60.0 million. The        
Company's 1998 capital budget includes $12.4 million to purchase new tractors   
and $2.2 million for new trailers in the last six months of 1998. In addition,  
the Company plans to spend approximately $9.9 million on real estate projects   
in the last six months of 1998, including facilities in Dallas, Texas;          
Memphis, Tennessee; Nashville, Tennessee; Tyler, Texas; and Fontana,            
California. The Company also plans to purchase $7.7 million of other            
equipment, primarily computer-related products, lift trucks and scales, during  
the last six months of 1998. The Company expects that on an annual basis        
capital expenditures in 1998 and 1999 will be funded by cash flow from          
operations.                                                                     

The Company's capital expenditures have been funded primarily through cash  
provided by operations and to a lesser extent by the proceeds of sales of used  
equipment and real estate. The Company generated cash proceeds from the sales   
of used tractors of $1.1 million, $3.0 million and $0.4 million in 1996, 1997   
and the six months ended June 30, 1998, respectively. The Company also          
generated cash proceeds from the sale of land and buildings of $7.9 million,    
$7.0 million, and $2.6 million in 1996, 1997 and the six months ended June 30,  
1998, respectively. Cash proceeds from the sale of other assets were $1.0       
million and $0.5 million in 1996 and 1997, respectively. There were no          
material cash proceeds from the sale of other assets in the six months ended    
June 30, 1998.                                                                  

Net cash used in financing activities was approximately $50.1 million, $43.0
million and $2.1 million in 1996, 1997 and the six months ended June 30, 1998,  
respectively. The Company paid cash dividends to UPC of $16.0 million, $16.0    
million and $8.0 million in 1996, 1997 and the six months ended June 30, 1998,  
respectively. The Company repaid $2.8 million, $3.0 million and $1.5 million    
of debt in 1996, 1997 and the first six months of 1998, respectively,           
consisting entirely of capitalized lease obligations. The Company paid net      
cash advances to UPC of $26.9 million in 1996 and $30.6 million in 1997, and    
received net cash advances from UPC of $7.9 million in the first six months of  
1998. At June 30, 1998, long-term debt totaled $3.9 million, maturing through   
2000, and obligations relating to operating leases totaled $20.3 million        
through 2010.                                                                   

Following the Offering, the Company intends to retain its future earnings   
for general corporate purposes, including working capital and capital           
improvements. Any payment of cash dividends in the future will be at the        
discretion of the Company's Board of Directors and will depend upon the         
Company's results of operations, earnings, capital requirements, contractual    
restrictions and other factors deemed relevant by the Company's Board.          

In connection with the Offering, the Company and Crestar Bank ("Crestar")   
have entered into a commitment letter (the "Commitment Letter") for a bank      
revolving credit facility (the "Bank Credit Facility") that will provide up to  
$200 million of available credit. An initial borrowing of $105 million under    
the Bank Credit Facility will be used to pay a portion of the consideration     
for the Acquisition. Thereafter, the Company expects to utilize the Bank        
Credit Facility primarily for (i) periodic borrowings for working capital and   
capital expenditures and (ii) to support trade letters of credit. The Bank      
Credit Facility will terminate on the fifth anniversary of its closing, at      
which time the principal and accrued interest of all outstanding borrowings     
will be due.                                                                    

26  

S-1/A
29th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 29th
The Bank Credit Facility will contain various financial and other covenants,
including covenants requiring the Company to maintain certain financial         
ratios. The Bank Credit Facility will also contain various events of default,   
including a cross default to other outstanding indebtedness. The closing of     
the Bank Credit Facility will be conditioned on, among other things, the        
completion of the Offering. The Company expects that cash flow from operations  
will be sufficient to pay anticipated interest expense on borrowings under the  
Bank Credit Facility. The Company does not believe that compliance with the     
covenants contained in the Bank Credit Facility will have a material impact on  
the Company's liquidity or results of operations. See "Bank Credit Facility."   

ENVIRONMENTAL MATTERS                                                           

The Company generates and transports hazardous and nonhazardous materials in
its current and former operations, and is subject to federal, state and local   
environmental laws and regulations. A liability of approximately $1 million     
has been accrued for future costs at all sites where the Company's obligation   
is probable and where such costs can be reasonably estimated. The Company       
believes that it has adequately accrued for its ultimate share of costs at      
sites where it is alleged to be subject to joint and several liability. Future  
environmental obligations are not expected to have a material impact on the     
results of operations or financial condition of the Company.                    

The Company or its current or former operating subsidiaries have been       
notified by the U.S. Environmental Protection Agency that it or they are a      
potentially responsible person under the Comprehensive Environmental Response,  
Compensation and Liability Act ("CERCLA") or other federal or state             
environmental statutes at 11 hazardous waste sites. Under CERCLA, the Company   
may be jointly and severally liable for all site remediation and expenses.      
After investigating the nature and costs of potential response actions at       
these sites and its own involvement, alone and in relation to the involvement   
of other named potentially responsible parties, in waste disposal or waste      
generation at such sites, the Company has resolved its liability through de     
minimis settlements or believes that its obligations with respect to all such   
sites not subject to settlement will involve immaterial monetary liability,     
though there can be no assurances in this regard. Furthermore, management       
believes it is in material compliance with all laws applicable to its           
operations and is not aware of any situation or condition that it believes is   
likely to have a material adverse effect on the Company's business, financial   
condition or results of operations.                                             

RECENT ACCOUNTING PRONOUNCEMENTS                                                

In June 1997, the Financial Accounting Standards Board ("FASB") issued      
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting        
Comprehensive Income," which is effective for all periods in 1998. The Company  
has adopted the provisions of SFAS No. 130 effective January 1, 1998. The       
components of comprehensive income include, among other things, changes in the  
market value of futures contracts which qualify for hedge accounting and any    
net loss recognized as an additional pension liability but not yet recognized   
as net periodic pension cost. Adoption of SFAS No. 130 had no impact on the     
financial statements for the six months ended June 30, 1998.                    

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information," that will be effective in 1998.      
Management is currently analyzing the effects of this statement and does not    
believe the effects will be material.                                           

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures     
about Pensions and Other Postretirement Benefits." The Company has elected to   
adopt the provisions of SFAS No. 132 in its 1997 financial statements.          

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative      
Instruments and Hedging Activities" that will be effective in 2000. Management  
has not yet determined the effect, if any, SFAS No. 133 will have on the        
Company's financial statements, but expects the effect to be minimal.           

27  

S-1/A
30th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 30th
YEAR 2000 COSTS                                                                 

In 1995, the Company began modifying its computer systems to process        
transactions involving the year 2000 and beyond. Costs to convert these         
systems, estimated to total $7 million, are expensed as incurred. To date,      
approximately 70% of the Company's mainframe applications have been converted,  
and the Company plans to complete the conversion of the entire mainframe        
environment by year-end 1998. Vendor-purchased PC and client server packages    
will be upgraded to year 2000 releases by year-end 1998. In addition, the       
Company is requesting certification letters from all major suppliers to ensure  
the ability of those vendors to provide products that are year 2000 compliant   
during the millennium changeover. All work is planned to be completed no later  
than the second quarter of 1999.                                                

The Company believes its systems will be successfully and timely modified.  
However, failure on the part of the Company or third parties with whom the      
Company does business to successfully and timely modify applicable systems      
could materially affect the Company's operations and financial results.         

28  

S-1/A
31st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 31st
BUSINESS  

The Company is a leading provider of LTL transportation, offering a full    
spectrum of regional, inter-regional and long-haul services nationwide.         
Management believes that the Company's operating flexibility and favorable      
cost structure enhance its ability to effectively compete in the LTL industry   
by providing its customers with high-quality service on a cost-efficient        
basis. Over 90% of the Company's revenues are derived from its LTL business,    
with the remainder derived from truckload services and value-added services     
which complement the core LTL business. The Company's workforce of              
approximately 12,500 employees is predominantly non-union. The Company          
achieved a significant turnaround from 1996 to 1997, with net income (before    
goodwill amortization) of $23.8 million in 1997 compared to a net loss (before  
goodwill amortization) of $23.4 million in 1996, and an operating ratio (the    
ratio of operating expenses before goodwill amortization to total revenues) of  
96.8% in 1997 compared to 105.0% in 1996.                                       

The Company had operating revenues of $946.0 million in 1997 and is the     
sixth largest provider of LTL services in the United States, serving all three  
segments of the LTL industry. Approximately 31% of the Company's LTL revenues   
were derived from the regional segment, 43% were derived from the inter-        
regional segment and 26% were derived from the long-haul segment during the     
first six months of 1998. The Company competes principally with national        
unionized carriers and regional carriers. The Company's flexible work rules     
and lower cost structure allow it to compete effectively with the national      
unionized carriers which rely in part on rail service and are bound by          
restrictive work rules which result in longer transit times and higher costs.   
Through its national network of 166 service centers, the Company covers more    
territory than most of its regional competitors. The Company believes that      
this combination of strengths will enable it to achieve profitable growth in    
all three LTL segments.                                                         

TURNAROUND                                                                      

The Company was founded in 1935, became a public company in 1957 and was    
acquired by UPC in 1986. After the acquisition, the Company initiated a         
program of geographic expansion and focused on marketing its services to        
large, national accounts. This rapid expansion, coupled with the sudden growth  
in the Company's long-haul and inter-regional traffic resulting from the 1994   
nationwide strike against unionized LTLs, strained the Company's ability to     
provide reliable service and resulted in a lack of focus on its traditional     
regional and inter-regional strengths. In addition, the Company did not         
rationalize its pricing to accommodate the change in traffic mix, leading to    
substantial profit and yield erosion. These factors contributed to net losses   
(before goodwill amortization) of $4.2 million and $23.4 million in 1995 and    
1996, respectively. As its service levels and profitability declined, the       
Company's relations with its employees deteriorated. Since 1994, the Company    
has received petitions at 66 Company locations to organize under the Teamsters  
Union. The Company believes that employee relations have improved               
significantly since the turnaround began, as evidenced by Company victories in  
seven out of eight union elections held since July 1997. As of the date of      
this Prospectus, 22 of the Company's 166 service centers are represented by     
the Teamsters Union, accounting for approximately 14% of the Company's          
workforce (approximately 17% of the non-management workforce). The Company is   
currently engaged in negotiations with the Teamsters Union at these service     
centers, but has not entered into any collective bargaining agreements.         

On July 9, 1998, the Teamsters Union announced that Teamster leaders        
authorized a nationwide strike to occur at the Company if the Teamsters do not  
succeed in reaching a contract with the Company. Prior to such announcement,    
certain Company employees staged one-day work stoppages at four Teamster-       
represented service centers. Each of the service centers remained open during   
the day with Company drivers continuing to make pickups and deliveries. On      
July 24, 1998, the Teamsters Union announced that it was temporarily holding    
in abeyance strike plans while awaiting the outcome of contract negotiations.   
However, the Company cannot predict whether additional Teamster-organized work  
stoppages or other job actions may be staged throughout the Offering period or  
thereafter. The Company also cannot predict the nature, scope or duration of    
any such activities or the effect such activities may have on the Company's     
businesses or financial condition. On July 10, 1998, the Company offered the    
Teamsters Union an opportunity for a system-wide election. The Teamsters Union  
has rejected the Company's proposal.                                            

29  

S-1/A
32nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 32nd
proposal, if the Company were to win such election the Teamsters Union would    
no longer represent any Overnite employees. If the Company were to lose such    
election the Teamsters Union would gain the right to represent all eligible     
road, city, dock and maintenance employees. Management is confident that the    
Company would win such election. In 1995, the Company made a similar election   
offer through the NLRB which was not accepted by the Teamsters Union. See       
"Risk Factors--Disputes with Labor Organizations."                              

The Company's service and operational turnaround began in April 1996, when  
UPC appointed Leo Suggs, a well-regarded, 40-year trucking veteran, as          
Chairman and Chief Executive Officer. Mr. Suggs assembled a new management      
team throughout the organization, from senior managers to service center        
managers, by selectively hiring and promoting experienced individuals. The new  
management team developed a plan to restore the Company's reputation for        
service and reliability and to return the Company to profitability. Management  
streamlined the Company's operations, closing 14 service centers and reducing   
its workforce by approximately 15% in 1996. The Company also reviewed the       
profitability of its major accounts and sought significant rate increases from  
customers representing approximately 20% of its revenue base. As a result of    
management's turnaround initiatives and employee commitment, the Company's      
financial performance improved dramatically between 1996 and 1997. These gains  
have continued in 1998, as the Company's operating ratio improved from 97.8%    
in the first six months of 1997 to 95.0% in the first six months of 1998.       

BUSINESS STRATEGY                                                               

In restoring high-quality service and returning the Company to profitability
over the past two years, the Company's new management team implemented the      
measures discussed above and focused on four critical on-going areas of the     
business: service quality, cost control, yield improvement and profitable       
revenue growth. Management believes that working with its employees to pursue   
these four success factors will reinforce the gains already achieved in the     
turnaround, improve financial performance, create a more positive work          
environment for employees and enhance the Company's ability to continue to      
reward its employees with a competitive wage and benefits package.              

.  Provide Quality Service. Since 1996, management has sought to foster a     
 consistent service culture and institute accountability for service quality
throughout the organization. The Company has reduced transit times and    
continues to focus on on-time delivery of damage-free shipments to        
 customers. The Company has instituted the Daily Service Review with senior,
district and service center management to facilitate the timely resolution
of operational problems and service improvement opportunities. The Company
has also established a Customer Advisory Council to enable management to  
meet periodically with customers regarding service quality levels,        
potential new services and to discuss new ideas for improving operations. 
 In the first quarter of 1997, the Company shortened scheduled transit times
on approximately half of its lanes without affecting its high level of on-
time deliveries. The Company has also increased training for employees to 
reduce service problems. These efforts have contributed to (i) an         
improvement in on-time performance from 91.9% in 1996 to 95.9% in 1997 and
(ii) a 25.4% improvement in exception frequency (the ratio of shipments   
delivered with shortages or damages to the total shipment handlings) from 
1.77% in 1996 to 1.32% in 1997.                                           

.  Improve Cost Controls. The Company has established numerous cost control   
initiatives since 1996, implementing financial discipline and             
 accountability throughout all levels of management. These measures include:
(i) identification of operational improvement opportunities through the   
Daily Service Review, (ii) the creation of service center profit and loss 
statements, which encourage each service center and district manager to   
manage based on profitability in addition to more traditional operating   
measures, (iii) a weekly financial review process for senior management to
allow for timely corrections to financial or operational problems and (iv)
a weekly analysis of general and administrative expense levels for each   
location. In addition, management has initiated a multi-year "cost of     
quality" process to identify cost reduction opportunities in target       
 business functions, such as billing accuracy, claims prevention and network
operations. Management anticipates that these cost control initiatives,   
 coupled with the "cost of quality" process, will result in significant cost
savings and other productivity improvements.                              

30  

S-1/A
33rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 33rd
.  Continue Yield Improvement. The Company introduced several programs to     
improve its pricing discipline, including rationalizing prices on its     
 largest, low-margin accounts (representing approximately 20% of its revenue
base), improving freight mix and increasing pricing on certain lanes to   
reflect market rates and cost of operations. A pricing committee,         
comprising representatives from a cross-section of senior management, was 
established to review all pricing decisions for large customers. In       
addition, the Company implemented a contract performance review system to 
analyze account profitability after the award of a contract to ensure that
shipment levels and service requirements are consistent with bid          
assumptions. These initiatives have contributed to a 12.7% increase in    
average revenue per hundredweight, from $9.97 in 1996 to $11.24 in 1997.  

.  Achieve Profitable Revenue Growth. The Company has enhanced its existing   
sales force, instituted sales goals, targeted high-margin accounts and    
implemented a profitability-based sales incentive program to achieve      
profitable revenue growth. The Company upgraded the quality of its sales  
 force through selective hiring and increased training. The Company improved
the compensation program for its sales employees by creating a sales      
incentive plan based on revenues and profitability that enables sales     
employees to earn quarterly incentives of up to 41% of base salary on an  
annual basis. In addition, sales representatives are required to formulate
daily, weekly, monthly and annual sales plans which are reviewed with     
district and senior management on a weekly basis. The Company enhanced its
existing sales force with a new department (Inside Sales) focused on high-
margin, small accounts. These initiatives have contributed to an increase 
 in revenues of 15.1% from $451.3 million in the first six months of 1997 to
$519.3 million in the first six months of 1998. At the same time, the     
Company has increased net income (before goodwill amortization) from $8.3 
million in the first six months of 1997 to $19.8 million in the first six 
months of 1998.                                                           

.  Maintain Positive Work Environment. Management believes that employee      
 satisfaction and commitment to the Company's strategies described above are
critical to its success. Management intends for all employees to benefit  
from the Company's success through improved wages, benefits and job       
 security. To date, the Company has implemented and enhanced incentive plans
that reward employees for focusing on service quality, cost control,      
safety, yield improvement and profitable revenue growth. Management       
regularly meets with all employees to discuss these factors and listen to 
 ideas for achieving these objectives. To fortify employee commitment to the
 Company's financial success, the Company plans to grant all employees stock
options for shares of Common Stock, contingent on completion of the       
Offering, and to maintain an employee stock purchase plan that will permit
employees to invest directly in the Company.                              

Management's emphasis on the critical success factors discussed above has   
reestablished the traditional Overnite culture by focusing on meeting or        
exceeding service commitments while offering competitive pricing and            
maintaining an efficient cost structure. Management believes that the return    
to the traditional Overnite culture and continued focus on these critical       
areas will enable the Company to sustain its competitive advantage and          
successfully pursue its growth strategy.                                        

GROWTH STRATEGY                                                                 

With a new management team in place and the cultural change and turnaround  
well underway, the Company has implemented a strategic planning process to      
develop its growth strategy. This process includes an in-depth analysis of      
both market and competitor trends affecting the Company. From this analysis,    
management believes that the Company has significant growth opportunities,      
particularly in the inter-regional and long-haul LTL markets, through further   
penetration of existing markets, expansion into new markets and development of  
new services. In addition, the Company intends to maintain its strong presence  
in the regional markets. Furthermore, the Company is well-positioned to         
implement its growth strategy through its efficient cost structure, operating   
flexibility, breadth of geographic coverage and economies of scale. The         
Company's strategy is to pursue disciplined growth through the following:       

31  

S-1/A
34th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 34th
.  Expand Inter-Regional Traffic. The inter-regional LTL segment currently    
accounts for approximately 43% of the Company's total LTL revenues in the 
first six months of 1998. Management believes that inter-regional traffic 
represents a significant growth opportunity for the Company, particularly 
in the eastern half of the United States, where the Company benefits from 
strong brand name recognition and extensive geographic coverage. A        
substantial portion of inter-regional traffic is served by the national,  
unionized LTL carriers. The Company believes that it offers better service
quality and shorter transit times on more lanes than these carriers, at   
competitive prices. The Company also believes that it has a competitive   
advantage over the regional carriers, some of whom are also targeting this
traffic, because it is already operating an expansive network that extends
 beyond the boundaries of most regional and niche carriers. To capitalize on
its strengths, the Company plans to focus marketing efforts on inter-     
regional services to new and existing customers.                          

.  Continue to Penetrate Long-Haul Markets. The long-haul LTL business is     
served primarily by four unionized nationwide carriers. Long-haul services
accounted for approximately 26% of the Company's total LTL revenues in the
first six months of 1998 and has grown as a percentage of total LTL       
 revenues over the past year. The Company plans to increase its share of the
long-haul market by continuing to offer faster transit times and more     
reliable service at competitive prices. The Company currently provides    
 nationwide long-haul service that includes all major metropolitan areas. In
 order to increase its share of the long-haul market, the Company intends to
further expand its coverage in the western United States.                 

.  Continue to Grow Regional Business. The regional market represented        
approximately 31% of the Company's LTL revenues in the first six months of
1998. Traditionally, the Company was the largest regional carrier in the  
southeastern United States. This position enabled the Company to          
successfully expand regional coverage and develop inter-regional traffic. 
The Company's ability to offer inter-regional and long-haul services in   
addition to its high quality regional services provides it with the       
competitive advantage of being able to offer a full range of services to  
 its regional customers. With its restored high-quality service product, the
Company intends to leverage its brand name recognition and long-standing  
customer relationships to grow its regional business.                     

.  Increase Sales to Local Accounts. Locally managed accounts produce higher  
 margins for the Company than national accounts and provide the Company with
incremental revenues and a more diversified customer base. Local accounts 
 represented approximately 44% of the Company's total tonnage shipped in the
first six months of 1998. The Company plans to increase local account     
revenues through sales promotions, continued expansion of the newly-      
developed Inside Sales department and implementation of programs that     
emphasize the development of driver-customer relationships and encourage  
driver-generated sales leads. Furthermore, management has designed the    
 Company's profitability-based sales incentive program to motivate the sales
force to emphasize high margin, local accounts.                           

.  Develop and Promote New Value-Added Services. In the past year, the Company
has introduced and expanded ancillary high-margin businesses, such as     
guaranteed and expedited services, cross-border, trade show, and assembly 
and distribution, that leverage the Company's existing infrastructure.    
 These ancillary services offer the Company a significant growth opportunity
given the size and growth potential of each of these market segments. For 
1997, these services together represented approximately 3% of total       
 operating revenues. The Company estimates that the guaranteed and expedited
 LTL services represents about $1-2 billion in annual revenues, Canadian and
Mexican cross-border LTL market represents about $2 billion in annual     
 revenues, and the trade show market represents about $500 million in annual
 revenues. The Company intends to continue to capitalize on these profitable
market opportunities and develop additional customer-specific             
 transportation solutions to suit the growing needs of its current customers
and complement its core offerings to attract new customers.               

32  

S-1/A
35th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 35th
INDUSTRY OVERVIEW                                                               

The for-hire trucking industry is typically divided into two segments, LTL  
and truckload. The size of the domestic truckload segment, which has            
historically hauled shipments over 20,000 pounds, is estimated to be over $30   
billion dollars in annual revenues. The size of the LTL industry, which         
typically hauls shipments that are less than 20,000 pounds, is estimated to be  
between $18 and $22 billion in annual revenues. The Company's primary business  
is LTL transportation. LTL carriers, including the Company, also haul some      
truckload shipments to add revenue or increase equipment utilization,           
especially in back-haul lanes. Over the last decade truckload carriers, and to  
a lesser extent the overnight package carriers, have entered the traditional    
LTL markets by altering the size limits of the shipments they haul. The         
Company believes that this competition, absent some extraordinary change in     
the pricing environment or operating methodologies, has reached its natural     
limits and the LTL industry will continue to grow with the U.S. economy.        

The trucking industry has been substantially deregulated by the enactment of
the Motor Carrier Act of 1980, the Trucking Industry Regulatory Reform Act of   
1994, the Federal Aviation Administration Authorization Act of 1994 and the     
ICC Termination Act of 1995. As a result, trucking companies are now able to    
expand the territory in which they provide pickup and delivery service and new  
competitors can enter the interstate and intrastate LTL and truckload markets   
without overcoming any significant regulatory barriers.                         

In general, customers are looking for consistent, high-quality, on-time     
performance and reduced transit times at a lower cost. Additionally, customers  
want more information about their shipments throughout the shipment cycle. In   
this environment, carriers that can distinguish themselves through quality of   
service, information services and scope of offerings, have demonstrated the     
ability to grow in size and market share and should advance at the expense of   
other carriers.                                                                 

The LTL Industry                                                              

The LTL industry has been consolidating over the last few years, and recent 
increases in the demand for LTL services have resulted in tightening capacity   
and increasing freight rates. The LTL industry is composed of three segments:   
regional, inter-regional and long-haul. The regional segment covers lanes       
shorter than 500 miles that generally involve next-day and two-day service,     
and is primarily served by a large number of non-union regional and niche       
carriers. The inter-regional segment, where lanes are generally between 500     
and 1,200 miles, is primarily served by large regional carriers and national    
unionized carriers. The long-haul segment, where lanes are generally over       
1,200 miles, is served primarily by the national carriers. The Company          
estimates that the 25 largest LTL carriers generated approximately $17 billion  
in revenues and constituted at least 80% of the LTL market in 1997.             

SERVICES                                                                        

LTL Services. The Company offers a full range of regional, inter-regional   
and long-haul LTL services in all 50 states, and portions of Canada, Mexico,    
Puerto Rico and Guam. Approximately 31% of the Company's LTL revenues in the    
first six months of 1998 were derived from the regional segment, 43% from the   
inter-regional segment and 26% from the long-haul segment. The Company          
provides LTL services through its network of 166 service centers and 35         
agents. The Company's LTL business is concentrated in the eastern half of       
United States, where the Company provides service to all of the primary and     
secondary markets through its own service centers and benefits from greater     
brand name recognition. The Company also provides long-haul service to the      
west coast through 14 service centers and interline partners in the western     
United States. The Company has recently expanded to provide direct coverage to  
approximately 95% of the population of Texas and offers extensive LTL service   
between the United States and Canada through its service center in Montreal     
and agency relationships covering the rest of Canada. In 1997, LTL service      
represented over 90% of total operating revenues. The Company transports a      
variety of products, including chemicals, fabricated metal products, textiles,  
machinery, electronics and paper products.                                      

33  

S-1/A
36th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 36th
The Company manages the time critical nature of its services through a focus
on on-time departures and disciplined operations. The Company's network is a    
hybrid of the "direct-load" network used by regional carriers and the "hub-     
and-spoke" network typically associated with long-haul carriers. The Company    
maximizes its network efficiency through "direct loading" where it has the      
density to do so, and using consolidation points on lanes lacking the           
necessary density. While the Company has six main breakbulk centers, over 40    
of its service centers handle some "through freight" to help balance the        
number of loads moving on a lane, optimize the number of loads generated,       
reduce circuity and lessen the dependence on its largest hubs. The Company      
employs a combination of single drivers (one driver in the tractor) performing  
round trips and long runs (involving a layover at another service center) and   
sleeper teams (two drivers in a tractor) to move loads between service          
centers. Many of its drivers unload and load their trailer as part of the       
planned work schedule. The flexibility of having drivers work on the dock       
helps the Company manage its labor cost according to the volume of business.    

LTL-Related Services. The Company has developed certain high-margin         
specialized services that are targeted to specific market niches that leverage  
the strengths of the Company's existing distribution network. For 1997, these   
services together represented approximately 3% of total operating revenues.     

Guaranteed Transportation Solutions. The Company offers guaranteed and    
 expedited delivery service for time-critical LTL shipments with commitments
sometimes as much as three days faster than the Company's standard transit
time. In providing this service, the Company primarily uses its own       
resources, but in certain cases makes specialized arrangements with       
airfreight carriers and commercial airlines to extend the reach or shorten
the transit time to meet the customer's requirements.                     

Cross-border Services. The Company offers specialized services for        
 customers transporting freight across the Canadian and Mexican borders. The
Company provides single carrier responsibility for cross-border shipments,
eliminating the need to deal with a second carrier in the destination     
country. The Company also handles customs documentation for the shippers  
and provides an advance customs clearance process that allows shipments to
be cleared immediately upon arrival at the border.                        

Trade Show Services. This service, which the Company began to offer in    
 1997, focuses on the time- sensitive market for exhibit transportation. The
Company estimates that the trade show transportation market is            
 approximately $500 million in annual revenues, with profit margins superior
to those of ordinary LTL traffic.                                         

Assembly and Distribution. Using its extensive service center network and   
hub service centers, the Company offers assembly and distribution services. 
The Company performs assembly services by picking up LTL shipments for a    
customer across multi-state areas, transporting them to a regional hub and  
consolidating them into a full truckload for inter-regional or long haul    
transport. The Company performs distribution services by receiving the      
truckload at a regional hub and separating it into LTL shipments which are  
transported by the Company to designated customers throughout a multi-state 
area.                                                                       

Truckload Services. The Company's truckload service provides for the        
transportation of freight by the truckload (using trailers 28 feet in length)   
from a single customer. The Company provides truckload services primarily as    
an ancillary service to its LTL national and local accounts, using its LTL      
staff and network. In addition, the Company's Streamline Volume Services group  
works with dispatchers to identify back haul lanes and markets truckload        
services to major shippers to secure freight for returning trucks. Truckload    
traffic, excluding the Special Services Division (described below), accounted   
for 6% of the Company's tonnage and 3% of the Company's operating revenues in   
1997.                                                                           

Special Services Division. The Company's Special Services Division offers   
premium-service dedicated full truckload transportation to selected markets     
where on-time reliability is a critical requirement. The Company targets this   
service to customers that employ "just-in-time" manufacturing and others, such  
as automobile manufacturers, that employ time-sensitive inventory management    
systems. The Company positions itself as a provider of premium service at       
compensatory rates rather than competing solely on the basis of price.          
Currently,                                                                      

34  

S-1/A
37th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 37th
the majority of this division's business involves transport of intermodal rail  
containers and regional dry-van transportation for the auto industry. In 1997,  
the Special Services Division represented approximately 2% of total operating   
revenues.                                                                       

SALES AND MARKETING                                                             

The Company's sales force of approximately 400 employees is organized into  
three segments. Approximately 20 national account managers develop              
relationships with large customers that have multiple shipping locations and    
centralized decision making. Approximately 340 local account managers are       
responsible for generating sales through locally-managed accounts within a      
territory covered by one of the Company's service centers. Approximately 40     
Inside Sales associates establish and maintain their own customer base of       
small accounts and can develop leads for the local account managers. All sales  
professionals participate in incentive compensation plans based on revenues     
and profitability that offer the opportunity to earn quarterly incentives of    
up to 41% of base salary on an annual basis. From time to time, the Company     
will solicit direct city driver involvement in the sales effort through         
promotional contests with potential for significant awards for participating    
drivers.                                                                        

The Company uses its shipment costing systems to direct the efforts of its  
sales and marketing team. The system assigns an activity cost to every          
shipment which can then be summarized by customer, by origin-destination lane,  
by service center or by commodity. For any segment of the business, the         
Company can analyze profitability, contribution to fixed cost, cost relative    
to other similar segments and price relative to similar segments. By looking    
at these measures, the sales team is able to target accounts that need to be    
renegotiated and identify, and thereby focus on, customers and commodities      
which have the greatest profit potential.                                       

SERVICE CENTERS                                                                 

The Company operates 166 service centers totaling 8,430 loading doors. The  
20 largest service centers, in terms of the number of loading doors, are        
listed below.                                                                   

                                                                [Download Table]

SERVICE CENTER                                             DOORS OWNED/LEASED
--------------                                             ----- ------------
                                                                             
Gaffney, SC...............................................   264    Owned    
Harrisburg, PA............................................   187    Owned    
Kansas City, KS...........................................   162    Owned    
Lexington, KY.............................................   147    Owned    
Memphis, TN...............................................   147    Owned    
Atlanta, GA...............................................   138    Owned    
Minneapolis, MN...........................................   135    Owned    
Los Angeles, CA...........................................   125    Owned    
Greensboro, NC............................................   124    Owned    
Richmond, VA..............................................   124    Owned    
Baltimore, MD.............................................   122    Owned    
South Holland, IL.........................................   121    Leased   
Charlotte, NC.............................................   119    Owned    
Columbus, OH..............................................   115    Owned    
Chicago, IL...............................................   110    Owned    
Detroit, MI...............................................   107    Owned    
Richfield, OH.............................................   107    Owned    
Raleigh-Durham, NC........................................   103    Owned    
Greenville, SC............................................    98    Owned    
Louisville, KY............................................    92    Owned    
                                                           -----             
Total of Top 20........................................... 2,647             
107 others owned.......................................... 4,743             
39 others leased.......................................... 1,040             
                                                           -----             
  Total................................................... 8,430             

35  

S-1/A
38th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 38th
FLEET                                                                           

As of December 31, 1997, the Company operated a fleet of 4,876 tractors,    
19,439 trailers and 1,616 forklifts. The number, type and age of the tractors   
and trailers are summarized below.                                              

                                                                [Download Table]

                                    TRACTORS                     TRAILERS      
                     -------------------------------------- -------------------
                     ROAD AND LOCAL          STRAIGHT        28-               
AGE                     DAY CABS    SLEEPERS  TRUCKS  TOTAL  FOOT  VANS  TOTAL 
---                  -------------- -------- -------- ----- ------ ----- ------
                                                                               
0-3 years...........       600        132        1      733  1,208   462  1,670
4-6 years...........     1,417        140      --     1,557  5,988   806  6,794
7-12 years..........     1,983        198       74    2,255  4,953 1,418  6,371
Over 12 years.......       329        --         2      331  1,588 3,016  4,604
                         -----        ---      ---    ----- ------ ----- ------
  Total.............     4,329        470       77    4,876 13,737 5,702 19,439
                         =====        ===      ===    ===== ====== ===== ======

FLEET MAINTENANCE SERVICES                                                      

The Company maintains its fleet through 70 shops strategically co-located   
with service centers throughout its network. Typically, smaller shops perform   
repairs and preventive maintenance and larger shops have the ability to do      
complete engine rebuilds and body work for tractors and trailers. In addition,  
the Company operates a tire shop for recapping tires. In 1997, the tire shop    
recapped over 42,000 tires, more than twice the number of new tires purchased.  
The Company produces recapped tires for approximately 40% of the cost of        
buying recaps. The Company also operates five "mobile shop" vans that perform   
preventive maintenance checks and minor repairs. In total, the fleet services   
department employs over 650 mechanics and 150 administrative, clerical and      
management personnel. The Company augments its fleet maintenance capability     
through purchased services that amount to just over 8% of its total fleet       
maintenance expenditures.                                                       

INFORMATION TECHNOLOGY                                                          

Sophisticated information systems are vital to the Company's profitability  
and growth. The Company's mainframe system provides comprehensive data          
collection for critical information, including all freight and equipment        
movement events, sales calls and activity, billing and rating information and   
customer activity information. The Company has built a data warehouse to        
evaluate every material component of a shipment's cost. The data warehouse      
serves as an information repository used extensively throughout the Company to  
control costs, improve operational efficiency and enhance revenue yield. The    
information provides decision support for evaluating business indicators, such  
as the profitability of a specific customer or the operational efficiency of a  
service center.                                                                 

The Company uses optical document scanning technology to enhance customer   
service and billing procedures. As a result, customer service representatives   
can, for example, view images of scanned bills of lading and delivery receipts  
at their work stations and, if requested, fax a copy of a document to a         
customer. The Company has an advanced dispatching system to assist in the       
monitoring of driver/trailer schedules and adherence to business operating      
plans. Typically, central dispatchers match "extra" loads to available          
tractors and drivers located within a geographic region, and the system         
enhances the dispatcher's ability to manage loads and drivers from multiple     
service centers, thereby improving coordination between dispatchers.            

The Company continues to enhance its means of providing communication       
abilities via electronic data interchange ("EDI"). The Company supplies         
customers with a comprehensive PC software package to help facilitate their     
ability to track shipments, create bills of lading and submit claims using EDI  
standards. Mainframe-to-mainframe connectivity is also available to certain     
customers.                                                                      

FUEL                                                                            

For 1997, fuel (excluding fuel taxes) represented approximately 3% of total 
operating costs. As of June 30, 1998, the Company had hedged approximately 42%  
of its forecasted fuel consumption for the remainder of 1998.                   

36  

S-1/A
39th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 39th
For this portion of its fuel expense, the Company will not be materially        
affected (positively or negatively) by changes in fuel prices. However, for     
the remaining 58% of forecasted fuel consumption for the remainder of 1998 and  
for any other period, to the extent not hedged, fuel costs will change with     
market prices. When fuel costs exceed the Company's planned levels, the         
Company seeks to charge a portion of the higher cost to its customers through   
a fuel surcharge.                                                               

COMPETITION                                                                     

The LTL industry is highly competitive, and the Company competes against    
other carriers on the basis of service quality and reliability, as well as      
price. The Company competes with regional and national motor carriers, and to   
a lesser extent, with package carriers and railroads, some of which have        
greater financial and other resources or lower operating costs than the         
Company. The Company estimates that the 25 largest LTL carriers generated       
approximately $17 billion in revenues and constituted at least 80% of the LTL   
market in 1997. The regional market is primarily served by regional, non-union  
carriers. The long-haul market is primarily served by national, unionized       
carriers. Regional carriers and national carriers provide inter-regional LTL    
service. The Company is a full service provider, offering regional, inter-      
regional and long-haul service to its customers. The Company does not believe   
that any one carrier is dominant in any of the segments of the LTL industry.    
The Company believes that it generally competes favorably with most other       
carriers on the basis of service quality, reliability and price. The Company    
also believes that its size and lane density are advantages when competing      
against smaller carriers in the regional and inter-regional markets and         
disadvantages when competing against the large national carriers in the long    
haul and in certain cases in inter-regional markets. Additionally, certain      
smaller niche carriers have greater lane density in certain regional markets    
which may give them a competitive advantage in service quality and price in     
those markets.                                                                  

INSURANCE AND SAFETY                                                            

LTL trucking companies, including the Company, face multiple claims for     
personal injury and property damage relating to accidents, cargo damage and     
workers compensation. The Company currently maintains insurance covering these  
risks, in amounts and subject to deductibles which it believes are adequate     
for its business.                                                               

UPC administers an insurance program for workers compensation and public    
liability claims for its corporate entities. Under the insurance program UPC    
has provided, where required by law or contract, the necessary indemnities,     
insurance guarantees, or letters of credit for the performance of the           
Company's obligations. UPC has indemnified certain states and insurance         
companies against the failure of the Company to pay workers compensation and    
public liability claims. In some cases, these indemnities are supported by      
letters of credit under which UPC is liable to the issuing bank. Following the  
Offering, there will be an increase in the Company's financial guaranty and     
indemnification requirements and a related increase in its expenses incurred    
in maintaining related letters of credit and surety bonds, an estimate of       
which is included in the pro forma consolidated financial statements included   
elsewhere in this Prospectus. In addition, failure by the Company to remain in  
compliance with the financial covenants and other terms in its Bank Credit      
Facility would likely prevent the Company from maintaining the letters of       
credit and surety bonds necessary to maintain the insurance agreements, which   
could adversely affect the Company's business or financial condition.           

EMPLOYEES                                                                       

The Company has over 12,500 employees, over 9,800 of whom are drivers, dock 
workers, fleet mechanics and sales professionals. The Company believes labor    
relations as a whole are good and improving, as evidenced by Company victories  
in seven out of eight union elections held since July 1997. There are no        
elections currently scheduled; however, the Company recently has received a     
petition for a union election at its service center in Irwin, Pennsylvania,     
which has approximately 30 employees. On July 10, 1998, the Company offered     
the Teamsters Union an opportunity for a system-wide election. The Teamsters    
Union has rejected the Company's proposal. In 1995, the Company made a similar  
election offer through the NLRB which was not accepted by the Teamsters Union.  
The Teamsters Union has made efforts to represent employees at certain of the   
Company's                                                                       

37  

S-1/A
40th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 40th
166 service centers, particularly over the last several years. Since 1994, the  
Company has received 89 petitions for union elections at 66 service centers.    
To date, approximately 1,800 employees at 22 service centers, including hub     
service centers in Kansas City, Kansas and Memphis, Tennessee, representing     
approximately 14% of all employees (approximately 17% of non-management         
employees), are represented by the Teamsters Union. Elections affecting         
approximately 400 additional employees at four additional service centers,      
representing approximately 3% of the Company's employees (approximately 4% of   
non-management employees), are unresolved. The Company has not to date entered  
into any collective bargaining agreements with the Teamsters Union. The         
Company is engaged in collective bargaining negotiations over union contract    
demands at the 22 represented locations, two of which (the Kansas City hub and  
Memphis hub) are among the five largest Company service centers.                

Successful operations have enabled the Company to improve equipment,        
facilities, wages, benefits, job security and job satisfaction. There are no    
assurances, however, that more employees will not vote for unionization in the  
future. In that circumstance, one possibility would be for the Company to       
alter its posture in collective bargaining, increase its costs and change its   
operating methods, which in turn could have a materially adverse effect on the  
Company's operating results. Another possibility is for the Teamsters Union to  
change its contract demands in a way that would permit the Company to agree     
without significantly increasing costs and operating structures. A third        
possibility is a strike that, if sufficiently widespread, lengthy and severe,   
could have a materially adverse effect on the Company.                          

In 1995, the NLRB General Counsel issued a series of complaints before the  
NLRB contending that the Company had engaged in unfair labor practices that     
affected the outcome of employee elections regarding union representation. The  
Teamsters disputed the outcome of the union elections at 18 service centers     
and sought an order that the Company bargain with the union at these locations  
despite the employees' vote against union representation. The Teamsters Union   
also sought implementation of a wage increase which had been awarded to non-    
union employees in March 1995 but withheld from employees at four other union-  
represented service centers pending negotiations with the union. In July 1995,  
the Company and the NLRB General Counsel settled certain of these claims, by    
requiring the Company to post notices promising not to engage in certain        
alleged unfair labor practices. Further, at the four service centers where      
employee elections in favor of union representation had been certified by the   
NLRB, the Company agreed to implement the wage increase which had been          
implemented previously at non-union service centers. The settlement explicitly  
did not admit the commission of any unfair labor practices. It did not          
resolve, however, whether the Company could be ordered to bargain with the      
union at a number of service centers where the union had lost elections. On     
April 10, 1998, an administrative law judge at the NLRB found in favor of the   
Teamsters Union and the NLRB General Counsel with respect to certain of the     
remaining allegations, issuing the ALJ Order that, among other things, would    
require the Company to bargain with the Teamsters Union upon request at four    
additional service centers, representing 2.7% of employees (3.1% of non-        
management employees): Louisville, Kentucky; Lawrenceville, Georgia; Norfolk,   
Virginia; and Bridgeton, Missouri. Consolidated into the cases decided by the   
ALJ was a complaint claiming that a wage and benefit increase withheld from     
Teamster-represented employees in 1996, because the union would not negotiate   
the Company's productivity improvement flexibilities on which the increase was  
contingent, should have been granted to those employees. The ALJ Order          
sustained that claim and recommended that the Company be ordered to make        
payments that would amount to approximately $2 million of back pay. The         
Company plans to appeal this decision to the full NLRB, and, if necessary, to   
a U.S. Court of Appeals. Complaints for bargaining orders at 11 remaining       
service centers are still before NLRB administrative law judges. Employees at   
the four service centers that are subject to the ALJ Order, together with       
those at the 11 other service centers where bargaining orders are being sought  
(only nine of which are operating), account for approximately 8% of the         
Company's nationwide work force (approximately 9% of non-management             
employees).                                                                     

In general, non-union carriers in the LTL trucking industry have significant
advantages over unionized carriers, including less restrictive work rules and   
lower labor costs, particularly with respect to benefit plan costs. There can   
be no assurance that the Company will be able to maintain its current cost      
advantage over certain of its competitors, particularly if the portion of the   
Company's work force that is represented by a union increases                   

38  

S-1/A
41st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 41st
significantly. In addition, while the Company has not experienced any           
significant work stoppages by its employees, the existence of union organizing  
activities and unresolved collective bargaining negotiations at certain of the  
Company's facilities means that there can be no assurance that the Company      
will not experience work stoppages in the future. Any such significant work     
stoppage would, in turn, adversely affect the Company's operations. The         
Company has adopted contingency plans should a work stoppage occur. However,    
depending upon the scope, duration and severity of any such stoppage and the    
effectiveness of the Company's contingency plans, the effect could be           
material.                                                                       

Teamsters Union representatives have publicly stated their intention of     
increasing the Union's organizing and bargaining efforts during the Offering.   
On July 9, 1998, the Teamsters Union announced that Teamster leaders            
authorized a nationwide strike to occur at the Company if the Teamsters do not  
succeed in reaching a contract with the Company. Prior to such announcement,    
certain employees at the Company's Atlanta service center staged a one-day      
work stoppage on June 22, 1998 and certain employees of the Company's           
Cincinnati, Kansas City and Miami service centers staged one-day work           
stoppages on June 27, 1998. Each of these Teamster-represented service centers  
remained open during the day with Company drivers continuing to make pickups    
and deliveries. On July 24, 1998, the Teamsters Union announced that it was     
temporarily holding in abeyance strike plans while awaiting the outcome of      
contract negotiations. However, the Company cannot predict whether additional   
Teamster-organized work stoppages or other job actions may be staged            
throughout the Offering or thereafter. The Company also cannot predict the      
nature, scope or duration of any such activities or the effect such activities  
may have on the Company's business or financial condition. In particular, the   
Company cannot predict the effect that such activities, or the threat thereof,  
will have on the Company's customer base.                                       

DRIVERS                                                                         

The Company currently utilizes approximately 2,500 road drivers and 3,000   
city drivers. City drivers generally perform pickups and deliveries in a        
designated zone within a service center's coverage area. Road drivers operate   
between service centers on predetermined routes established to meet the         
Company's service standards. In addition, the Company has approximately 500     
other employees qualified to perform driver functions. All drivers employed by  
the Company are selected in accordance with specific Company guidelines         
relating primarily to safety records and driving experience. Drivers, as well   
as dockmen and mechanics, are required to pass drug tests at the beginning of   
employment, periodically thereafter and for cause.                              

REGULATION                                                                      

The trucking industry has been substantially deregulated by the enactment of
the Motor Carrier Act of 1980, the Trucking Industry Regulatory Reform Act of   
1994, the Federal Aviation Administration Authorization Act of 1994 and the     
ICC Termination Act of 1995. Rates and services are now largely free of         
regulatory controls. However, interstate motor carriers remain subject to       
certain regulatory controls imposed by agencies within the Department of        
Transportation, such as the Federal Highway Administration and the Surface      
Transportation Board. Interstate motor carrier operations are subject to        
safety requirements prescribed by the Department of Transportation. Such        
matters as weight and dimension of equipment are also subject to federal and    
state regulations.                                                              

The Federal Aviation Administration Authorization Act of 1994 essentially   
deregulated intrastate transportation by motor carriers, prohibiting            
individual states from regulating entry, pricing, or service levels. However,   
the states retained the right to require compliance with safety and insurance   
requirements.                                                                   

ENVIRONMENTAL REGULATION                                                        

The Company is subject to federal, state and local environmental laws and   
regulations including among other things laws and regulations dealing with the  
transportation, storage, presence, use, disposal and handling of hazardous      
materials, discharge of storm water, facility and vehicle emissions into the    
atmosphere and underground storage tanks. The Company believes that it is in    
substantial compliance with all such environmental laws and regulations.        

39  

S-1/A
42nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 42nd
The Company stores some of the fuel for use in its trucks in 155 underground
storage tanks located in 35 states. The Company has completed a capital         
program to upgrade these tanks to comply with current regulations.              

The Company's drivers and dock workers are trained in the handling and      
transportation of hazardous materials, and drivers are required to have a       
hazardous materials endorsement on their driver licenses. Approximately 7% of   
the shipments transported by the Company in 1997 were classified as hazardous.  
If the Company were to be involved in a spill or other accident involving       
hazardous materials, if such materials were found to have contaminated the      
Company's equipment or facilities, or if the Company were found to be in        
violation of applicable laws and regulations, the Company could be responsible  
for clean-up costs, property damage and fines or other penalties, any of which  
could have a materially adverse effect on the Company. Shipping hazardous       
materials also has the potential to affect freight handling logistics, due to   
Department of Transportation and other requirements limiting the types of       
materials that can be shipped as part of the same cargo load with certain       
hazardous materials.                                                            

The Company has been notified by the U.S. Environmental Protection Agency   
that it is a potentially responsible person under the Comprehensive             
Environmental Response, Compensation, and Liability Act ("CERCLA") or other     
federal or state environmental statutes at 11 hazardous waste sites. Under      
CERCLA, the Company may be jointly and severally liable for all site            
investigation and remediation costs and expenses. After investigating the       
nature and costs of potential response actions at these sites and its own       
involvement, alone and in relation to the involvement of other named            
potentially responsible parties, in waste disposal or waste generation at such  
sites, the Company has resolved its liability through de minimis settlements    
or believes that its obligations with respect to all such sites not subject to  
settlement will involve immaterial monetary liability, though there can be no   
assurances in this regard.                                                      

LITIGATION                                                                      

The Company is subject to various litigation in the personal injury,        
property damage, freight claim, employment and labor law areas. The Teamsters   
Union historically has filed numerous charges alleging violations of the        
National Labor Relations Act, which the Company contests and defends. If all    
or a substantial portion of this labor law litigation were decided adversely    
to the Company, it could have a materially adverse effect on the Company's      
operating results. See "--Employees."                                           

Various other legal actions, the majority of which arise in the normal      
course of business are pending. None of these other legal actions is expected   
to have a material adverse effect on the Company's financial condition.         

40  

S-1/A
43rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 43rd
MANAGEMENT  

DIRECTORS AND EXECUTIVE OFFICERS                                                

Set forth below is information concerning the current executive officers and
directors of the Company. The Company currently has four directors, all of      
whom are employees of the Company. Within 90 days following the Offering, the   
Company will appoint two additional directors, neither of whom will be          
employees of the Company, UPC or their respective affiliates. Within 180 days   
following the Offering, the Company plans to appoint two additional directors,  
neither of whom will be employees of the Company, UPC or their respective       
affiliates. These two additional outside directors will replace two inside      
directors, other than Mr. Suggs.                                                

The names and ages of each of the Company's current executive officers and  
directors are listed below, followed by a description of their employment       
history and current directorships of publicly traded companies.                 

                                                                [Download Table]

        NAME          AGE                       POSITION                     
        ----          ---                       --------                     
                                                                             
Leo H. Suggs.........  58 Chairman of the Board of Directors, Chief Executive
                          Officer and President                              
Patrick D. Hanley....  53 Senior Vice President and Chief Financial Officer  
                          and Director                                       
Gordon S. Mackenzie..  53 Senior Vice President--Operations and Director     
John W. Fain.........  44 Senior Vice President--Marketing and Sales and     
                          Director                                           
J. Paul Heaton.......  60 Senior Vice President--Operations Strategy         
Mark B. Goodwin......  49 Vice President and General Counsel                 

Leo H. Suggs. Mr. Suggs, who was appointed Chairman and Chief Executive     
Officer of the Company in April 1996, has 40 years of experience in the         
trucking industry. Before joining the Company, he was President and Chief       
Executive Officer of Preston Trucking Company Inc., an LTL carrier, from 1993   
to 1996. Prior to that, Mr. Suggs served in various executive positions with    
Yellow Corporation, Preston Trucking Company, Inc., and Ryder PIE.              

Patrick D. Hanley. Mr. Hanley was appointed as Senior Vice President and    
Chief Financial Officer of the Company in June 1996. Before joining the         
Company, Mr. Hanley served in a variety of finance positions at UPC and its     
subsidiaries, beginning in 1983. He was Vice President of Finance of Union      
Pacific Resources Group, Inc. from 1990 to 1996. He previously held various     
management positions with Ford Motor Company beginning in 1971.                 

Gordon S. Mackenzie. Mr. Mackenzie was appointed Senior Vice President--    
Operations for the Company in July 1996. Prior to that, Mr. Mackenzie served    
as Senior Vice President--Marketing and Sales for the Company from April 1996   
to July 1996. Prior to joining the Company in 1996, he served as Senior Vice    
President and Chief Operating Officer of Preston Trucking Company, Inc. from    
1993 to 1996. Prior to that, Mr. Mackenzie served in various executive          
positions with Standard Trucking, Ryder PIE and Transcon Lines.                 

John W. Fain. Mr. Fain was appointed Senior Vice President--Sales and       
Marketing in 1996. From 1995 to 1996 he served as Senior Vice President--       
Operations, and from 1992 to 1995 as Vice President--Southeast Region. Mr.      
Fain joined the Company as General Counsel in 1982.                             

J. Paul Heaton. Mr. Heaton was appointed Senior Vice President--Operations  
Strategy in 1995. From 1989 to 1995 he served as Senior Vice President--        
Operations. Prior to that, he held various positions with the Company.          

Mark B. Goodwin. Mr. Goodwin was appointed Vice President and General       
Counsel of the Company in 1992. Prior to that, he served as principal labor     
counsel to Union Pacific Railroad Company from 1983 to 1992, and prior to       
that, as a lawyer with Steptoe & Johnson in Washington, D.C.                    

COMMITTEES OF THE BOARD                                                         

AUDIT COMMITTEE                                                               

Within 90 days following the Offering, an Audit Committee will be formed and
will consist of at least two directors, none of whom will be employees of the   
Company or the Company's subsidiaries. The Audit                                

41  

S-1/A
44th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 44th
Committee will meet regularly with the Company's financial management,          
internal auditors and independent certified public accountants to review the    
work of each. The independent certified public accountants and the internal     
auditors will meet regularly with the Audit Committee, without the Company's    
financial management present, to discuss the results of their examination and   
their opinions on the adequacy of the internal controls and the quality of the  
financial reporting. The Committee also will review the scope of audits. The    
Committee will recommend to the Board of Directors each year the firm of        
independent certified public accountant to audit the books and accounts of the  
Company and its consolidated subsidiaries.                                      

COMPENSATION COMMITTEE                                                        

Within 90 days following the Offering, a Compensation Committee will be     
formed and consist of at least two directors, none of whom will be employees    
of the Company or the Company's subsidiaries. The Committee will make           
recommendations to the Board of Directors as to the salaries and other          
benefits of all senior executive officers. The Committee will administer the    
Company's Executive and Management Incentive, Stock Compensation, Employee      
Stock Option and Employee Stock Purchase Plans and determine the amounts of,    
and the individuals to whom, incentive, stock and stock-related awards shall    
be made thereunder. The Compensation Committee also will review the             
performance of the Chief Executive Officer and President, review the            
evaluations of the Company's senior management conducted by the Chief           
Executive Officer and President and oversee his development of plans for the    
succession of senior management personnel.                                      

GOVERNANCE COMMITTEE                                                          

After the Offering, the Board of Directors will designate a Governance      
Committee that will consist of at least two directors, a majority of whom will  
not be employees of the Company or the Company's subsidiaries. The Governance   
Committee will be responsible for matters related to service on the Board of    
Directors and associated issues of corporate governance. The Governance         
Committee from time to time will evaluate the size, composition and             
performance of the Board of Directors. Prior to each meeting of shareholders    
of the Company, the Governance Committee will review the qualifications of      
individuals for consideration as director candidates and shall recommend to     
the Board of Directors, for its consideration, the names of individuals for     
election. The Governance Committee also will recommend to the Board of          
Directors those directors to be selected for membership on the various Board    
committees and, from time to time, will conduct studies and make                
recommendations to the Board of Directors regarding compensation for            
directors.                                                                      

EXECUTIVE COMMITTEE                                                           

After the Offering, an Executive Committee will be formed. To the extent    
permitted by Virginia law, the Executive Committee will have all the powers of  
the Board, when the Board is not in session, to direct and manage, in the       
Company's best interest, all of the business and affairs of the Company in all  
cases in which specific directions have not been given by the Board.            

ELECTION AND COMPENSATION OF DIRECTORS                                          

The Board of Directors of the Company is divided into three classes.        
Directors of the first class will hold office until the annual meeting of       
shareholders to be held in 1999; directors of the second class will hold        
office until the annual meeting of shareholders to be held in 2000; and         
directors of the third class, which will include Mr. Suggs, will hold office    
until the annual meeting of shareholders to be held in 2001. Thereafter, each   
director will be elected for a term of three years.                             

After the Offering, all directors not employed by the Company will receive a
retainer of $16,000 per year, payable 50% in cash and 50% in Company Common     
Stock. Directors who are employees of the Company will not receive retainers.   
In addition, directors will receive $1,000 for each Board meeting attended and  
$500 for each Board Committee meeting attended. Directors will be reimbursed    
for travel expenses incurred in conjunction with attendance at Board and Board  
Committee meetings.                                                             

42  

S-1/A
45th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 45th
COMPENSATION OF EXECUTIVES                                                      

The following table summarizes the compensation paid by the Company or UPC  
to the Company's Chief Executive Officer and the next four most highly          
compensated executive officers of the Company, in their capacities as officers  
of OTC, for 1997.                                                               

                                                        [Enlarge/Download Table]

                               ANNUAL COMPENSATION             LONG-TERM COMPENSATION      
                          -----------------------------  ----------------------------------
                                                         RESTRICTED                        
       NAME AND                           OTHER ANNUAL     STOCK     OPTIONS/   ALL OTHER  
   PRINCIPAL POSITION      SALARY  BONUS  COMPENSATION    AWARDS(C)    SARS    COMPENSATION
   ------------------     -------- ------ -------------  ----------- --------- ------------
                                                                                           
Leo H. Suggs............  $307,500 $    0   $252,442(a)      $ 0        $ 0      $15,085(d)
 Chairman of the Board                                                                     
 of Directors and Chief                                                                    
 Executive Officer                                                                         
Patrick D. Hanley.......   221,400 90,000           (b)        0          0       10,165(e)
 Senior Vice President                                                                     
 and Chief Financial                                                                       
 Officer                                                                                   
Gordon S. Mackenzie.....   205,000 81,500           (b)        0          0        6,990(f)
 Senior Vice President--                                                                   
 Operations                                                                                
John W. Fain............   169,200 81,500           (b)        0          0        6,415(g)
 Senior Vice President--                                                                   
 Marketing and Sales                                                                       
J. Paul Heaton..........   169,900 45,000           (b)        0          0       13,189(h)
 Senior Vice President--                                                                   
 Operations Strategy                                                                       

--------                                                                        
(a) Amount includes $226,825 paid to Mr. Suggs in connection with his           
  relocation to Richmond, Virginia and the resulting loss on the sale of his
home.                                                                   
(b) Personal benefits in amounts below reporting thresholds have been omitted.  
(c) The following UPC restricted stock holdings as of December 31, 1997 are     
subject to forfeiture if the holder terminates his employment with the  
Company within three years of the date of grant of the restricted stock 
  award: Mr. Suggs, 4,462 shares with a value of $279,433; Mr. Hanley, 4,500
shares with a value of $281,813; Mr. Fain, 11,600 shares with a value of
$726,450. Dividends are accumulated but will not be paid on Mr. Suggs'  
  4,462 shares and 7,436 of Mr. Fain's shares until the restrictions expire.
Dividends are currently payable on all other such shares. Following the 
end of fiscal year 1997, Mr. Suggs received restricted stock awards     
aggregating 7,276 shares and Mr. Hanley received restricted stock awards
totaling 1,650 shares.                                                  

    Certain other restricted stock holdings were awarded under the UPC Long-Term
Performance Plan (the "UPC LTPP"). These holdings were awarded in three 
    installments that are subject to UPC stock price targets of $72, $82 and $92
per share, respectively. Dividends are not payable on restricted shares 
 awarded under the UPC LTPP until the UPC stock targets are met. The stock
    price levels must be sustained for 20 consecutive days prior to November 20,
   2000 and the holder generally must remain employed with the Company through
   November 20, 2000 in order to receive the shares. UPC's closing stock price
    on December 31, 1997 was $62.625 per share and on July 10, 1998 was $43.0625
 per share. Aggregate restricted stock holdings under the UPC LTPP and the
value thereof as of December 31, 1997 are as follows: Mr. Suggs, 31,500 
 shares, $1,972,688; Mr. Hanley, 25,200 shares, $1,578,150; Mr. Mackenzie,
   25,200 shares, $1,578,150; Mr. Fain, 25,200 shares, $1,578,150; Mr. Heaton,
   9,450 shares, $591,806. Upon consummation of the Offering, certain of these
    restricted stock holdings will be forfeited and replaced by restricted stock
of the Company. See"--Treatment of Existing Grants of UPC Options and   
Retention Shares."                                                      

(d) Amount includes $10,360 in executive life insurance premiums and $4,725 in  
matching contributions to the Company's thrift plans.                   
(e) Amount includes $3,763 in executive life insurance premiums and $6,402 in   
matching contributions to the Company's thrift plans.                   
(f) Amount includes $3,836 in executive life insurance premiums and $3,154 in   
matching contributions to the Company's thrift plans.                   
(g) Amount includes $1,533 in executive life insurance premiums and $4,882 in   
matching contributions to the Company's thrift plans.                   
(h) Amount includes $8,070 in executive life insurance premiums and $5,119 in   
matching contributions to the Company's thrift plans.                   

43  

S-1/A
46th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 46th
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END         
OPTION/SAR VALUES                                                               

The following table presents information concerning UPC options that were   
acquired by the Company's Chief Executive Officer and the next four most        
highly compensated executive officers of the Company while such persons were    
employed by the Company and that were exercised during 1997 and 1997 fiscal     
year end numbers and values for such options.                                   

                                                        [Enlarge/Download Table]

                                                                               VALUE OF UNEXERCISED   
                                                     NUMBER OF UNEXERCISED         IN-THE-MONEY       
                            SHARES                  OPTIONS/SARS AT FY END    OPTIONS/SARS AT FY END  
                         ACQUIRED ON     VALUE     ------------------------- -------------------------
          NAME           EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
          ----           ------------ ------------ ----------- ------------- ----------- -------------
                                                                                                      
Leo H. Suggs............         0      $      0     29,778       90,000     $  490,593    $551,250   
Patrick D. Hanley.......         0             0          0       72,000              0     441,000   
Gordon S. Mackenzie.....         0             0          0       72,000              0     441,000   
John W. Fain............     4,760       184,141     49,547       72,000      1,207,140     441,000   
J. Paul Heaton..........    18,145       632,468     72,681       27,000      2,068,203     165,375   

COMPENSATION PURSUANT TO COMPANY PLANS                                          

Set forth below is information with respect to certain benefit plans of the 
Company to be effective on and after the date of the Offering pursuant to       
which cash and noncash compensation is proposed to be paid or distributed in    
the future to the executive officers of the Company:                            

COMPANY EXECUTIVE AND MANAGEMENT INCENTIVE PLANS                              

The Company plans to adopt an Executive Incentive Plan ("EIP") and a        
Management Incentive Plan ("MIP") as programs designed to tie executive pay     
specifically to Company performance. Certain senior executives will be          
eligible to participate in the EIP and certain other key employees will be      
eligible to participate in the MIP. The EIP and the MIP will be administered    
by the Compensation Committee of the Board of Directors. The Committee will     
select those employees who will participate in the EIP and the MIP for a        
particular year and will determine the incentive award, if any, payable to      
each participant for a particular year.                                         

The aggregate incentive payments under the EIP and the MIP for any year     
cannot exceed the amount credited to the Incentive Reserve Account at the end   
of that year. The maximum amount that may be credited to the Incentive Reserve  
Account will be based on a formula to be contained in the EIP and the MIP when  
adopted. The Company's independent certified public accountants will            
determine, and report to the Committee, the amount that may be credited to the  
Incentive Reserve Account each year in accordance with the formula. Amounts     
that are credited to the Incentive Reserve Account that are not awarded in a    
particular year may be awarded in later years.                                  

Participants in the EIP may defer receipt of all or part of their awards    
under the plan. Deferrals are credited with gains, and charged with losses, as  
if such amounts were invested in the same funds that are offered as investment  
options under the Company's thrift plans.                                       

STOCK COMPENSATION PLAN                                                       

The Company intends to adopt a Stock Compensation Plan. The Stock           
Compensation Plan is intended to serve as a long-term compensation plan for     
executives, certain key managers and other contributing employees. The Company  
believes that the Stock Compensation Plan will assist it in recruiting and      
retaining employees with ability and initiative and will help those employees   
associate their interests with those of the Company and its shareholders.       

The Compensation Committee of the Board will administer the Stock           
Compensation Plan. The Compensation Committee may delegate its authority to     
administer the Stock Compensation Plan to one or more officers of the Company;  
provided, however, that the Compensation Committee may not delegate its         

44  

S-1/A
47th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 47th
responsibility with respect to individuals who are subject to Section 16 of     
the Exchange Act. As used in this summary, the term "Administrator" means the   
Compensation Committee and any delegate.                                        

Any employee of the Company or a related entity who, in the sole discretion 
of the Administrator, has contributed or can be expected to contribute to the   
profits or growth of the Company or a related entity may be selected to         
participate in the Stock Compensation Plan. Any such employee may be awarded    
options, stock appreciation rights ("SARs"), stock awards, performance shares,  
or a combination of such awards.                                                

Options granted under the Stock Compensation Plan may be incentive stock    
options or nonqualified stock options. Except for options issued on conversion  
of certain UPC options as described below, the option price cannot be less      
than the shares' fair market value on the date of grant. The option price may   
be paid in cash, in a cash equivalent acceptable to the Administrator, with     
shares of Common Stock or with a combination of cash and Common Stock. Options  
may be exercised in whole or in part at such times and subject to such          
conditions as may be prescribed by the Administrator; provided, however, that   
the option cannot be exercised more than ten years after its grant.             

Participants in the Stock Compensation Plan also may be granted SARs. SARs  
entitle the participant to receive the lesser of (a) the excess, if any, of     
the fair market value of the Company's Common Stock on the date of exercise     
over the Initial Value or (b) the Initial Value. The Initial Value is           
determined by the Administrator on the date of grant but cannot be less than    
the fair market value of a share of Company Common Stock on that date. The      
amount payable upon the exercise of an SAR may be paid in cash, Company Common  
Stock or a combination of the two. SARs may be granted in tandem with options   
or independently of options. SARs may be exercised in whole or in part at such  
times and subject to such conditions as may be prescribed by the                
Administrator; provided, however, that an SAR cannot be exercised more than     
ten years after its grant.                                                      

Participants in the Stock Compensation Plan may be awarded shares of Company
Common Stock. A participant's rights in the stock award may be nontransferable  
or forfeitable or both for a period of time or subject to such conditions as    
may be prescribed by the Administrator. These conditions may include, for       
example, a requirement that the participant continue employment for a           
specified period, i.e., a retention stock award, or that the Company, related   
entity or the participant achieve stated objectives. If the shares are not      
immediately vested and transferable, the period of restriction will be at       
least three years; provided, however, that the period may be one year if the    
transferability, vesting or both is subject to the satisfaction of performance  
objectives.                                                                     

The Stock Compensation Plan also authorizes the award of performance shares 
to participants. A performance share award entitles the participant to receive  
a payment equal to the fair market value of a specified number of shares of     
Company Common Stock if certain performance objectives or other conditions      
prescribed by the Administrator are satisfied. The performance period will be   
at least three years; provided, however, that the period may be one year if     
the performance shares will be earned upon the achievement of stated            
performance objectives. To the extent that the performance shares are earned,   
the obligation may be settled in cash, Company Common Stock or a combination    
of the two.                                                                     

The Stock Compensation Plan provides that each outstanding option and SAR   
will become fully exercisable, each outstanding stock award will become vested  
and transferable and outstanding performance shares will be earned in the       
event of a change in control (as defined in the Stock Compensation Plan) or     
upon certain tender offers and exchange offers for the Company Common Stock.    
If a participant becomes subject to the excise tax under Section 4999 of the    
Internal Revenue Code of 1986, as amended (the "Code") on account of a change   
in control, the Stock Compensation Plan provides that benefits thereunder will  
be reduced to avoid that result if such reduction would allow the participant   
to receive a greater net after-tax benefit.                                     

A maximum of 3.75 million shares of Company Common Stock may be issued under
the Stock Compensation Plan, including options and retention stock awards       
issued on conversion of certain UPC options                                     

45  

S-1/A
48th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 48th
and retention awards as described below. A maximum of 1.25 million shares of    
Company common stock may be issued under the Stock Compensation Plan as stock   
awards and in settlement of performance share awards. The share limitations     
will be adjusted as the Compensation Committee deems appropriate in the event   
of a stock dividend, stock split, combination, reclassification or other        
similar events.                                                                 

No option, SAR, stock award or performance shares may be granted under the  
Stock Compensation Plan after August 1, 2008. The Board may sooner terminate    
the Stock Compensation Plan without further action by shareholders. The Board   
also may amend the Stock Compensation Plan except that no amendment will be     
effective without shareholder approval if the amendment (a) increases the       
aggregate number of shares of Company Common Stock that may be issued under     
the Stock Compensation Plan (other than an adjustment described in the          
preceding paragraph) or (b) changes the class of individuals who are eligible   
to participate in the Stock Compensation Plan.                                  

The Company currently anticipates that Mr. Suggs will be entitled to grants 
of 9,852 and 14,778 retention shares, subject to attainment of certain          
earnings targets for 1998 and 1999, respectively, to be set by the Board of     
the Company.                                                                    

To fortify employee commitment to the financial success of the Company, and 
contingent upon the completion of the Offering, the Company intends to award    
options to purchase shares to all employees. Each person who is classified as   
a full-time or part-time employee of the Company, OTC or OHI on the effective   
date of the Offering will be granted a nonqualified option under the Stock      
Compensation Plan. Options granted to full-time employees will cover 200        
shares of the Company's Common Stock and options granted to part-time           
employees will cover 100 shares of the Company's Common Stock. The option       
price per share will equal the initial public offering price of the Company's   
Common Stock (the "IPO Price"). The options will become exercisable in two      
equal installments on August 1, 1999 and August 1, 2000, except that            
exercisability will be accelerated in the event of the optionee's death,        
disability or retirement or in the event of a change in control (as defined in  
the Stock Compensation Plan) or certain tenders or exchanges offer for the      
Company's Common Stock. The options will expire on July 31, 2008. If the        
optionee terminates employment for any reason other than death, disability or   
retirement, the option may be exercised, to the extent that it is exercisable   
at termination, for up to 90 days following termination. If the optionee's      
employment ends on account of death, disability or retirement, the option may   
be exercised during the five-year period following termination or until July    
31, 2008, whichever is shorter. Each person who is classified as a full-time    
or part-time employee of the Company, OTC or OHI on August 1, 1999, and who     
does not hold an option granted on the effective date of the Offering will be   
granted a nonqualified option under the Stock Compensation Plan for 100 and 50  
shares of the Company's Common Stock, respectively. The options will become     
exercisable on August 1, 2000 and will be subject to the same terms and         
conditions as the original option grants. The Company's grant of options under  
the Stock Compensation Plan to employees who are represented by the Teamsters   
Union is subject to bargaining with Teamsters Union representatives.            

EMPLOYEE STOCK PURCHASE PLAN                                                  

Under the Company's Employee Stock Purchase Plan (the "Purchase Plan"), all 
employees of the Company have been able to subscribe annually for up to 200     
shares of UPC common stock at a discount from the prevailing market price as    
described below. For 1998, 1,705 employees have subscribed for a total of       
53,811 shares of UPC common stock. In connection with the Offering and subject  
to employee cancellation rights described below, the employee subscriptions     
will be equitably converted into subscriptions for an equivalent value of       
Company Common Stock at an equivalent discount per share. Under the Purchase    
Plan, employees will continue to have the right to cancel their subscriptions   
on or before October 9, 1998 and receive all funds deposited, with interest at  
the rate of 5 3/4% per year.                                                    

The Purchase Plan, as equitably adjusted, permits employees to elect to     
participate in the Purchase Plan before the commencement of a subscription      
period that is determined each year by the Board of Directors. Each             

46  

S-1/A
49th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 49th
employee may subscribe for a limited number of shares of Common Stock and pay   
for such Common Stock with cash or may designate an amount to be withheld from  
his or her paycheck. Such withheld amounts will be applied to the purchase of   
shares of the Company's Common Stock on the last day of the subscription        
period. The price of the shares purchased under the Purchase Plan will be 95%   
of the closing price per share of the Company's Common Stock on the Nasdaq      
National Market (the "Fair Market Value") on the last date available to         
subscribe to the Purchase Plan for the applicable year.                         

If a participating employee ceases to be an employee of the Company before  
the last date on which the employee may cancel his or her subscription and      
withdraw from the Purchase Plan, for any reason other than death or             
retirement, his or her subscription will be automatically canceled. All funds   
deposited by such employee will be returned, with interest at the rate of 5     
3/4% per year.                                                                  

The Company plans to continue the Purchase Plan for Company Common Stock    
following the completion of the Offering. The Compensation Committee of the     
Board of Directors will administer the Purchase Plan. The Board of Directors    
may amend or terminate the Purchase Plan. The Purchase Plan is intended to      
comply with the requirements of Section 423 of the Code. Availability of the    
Purchase Plan, as adjusted, to employees at the Company's facilities that are   
represented by the Teamsters Union is subject to bargaining with the Teamsters  
Union.                                                                          

PENSION PLAN                                                                  

Pensions for employees of the Company are provided through the Retirement   
Plan for Employees of Overnite Transportation Company and Subsidiaries (the     
"Basic Plan") and, with respect to certain employees of the Company, the        
Company's Supplemental Executive Retirement Plan (the "Supplemental Plan").     

The Basic Plan is a noncontributory, funded plan. The amount of the annual  
pension benefit from all sources is based upon average annual compensation for  
the five consecutive calendar years that produce the highest average ("final    
average earnings"), and number of years of credited service (capped at 30       
years of credited service). Regular compensation for this purpose is W-2        
income plus deferrals under Sections 401(k) and 125 of the Code, less the       
amount of executive life insurance premiums and income from option exercises.   
For the named executive officers, regular compensation for 1997 equals the      
amounts included in the salary column of the summary compensation table above   
and $226,825 of Other Annual Compensation for Mr. Suggs disclosed in such       
table. The amounts listed in the bonus column of the summary compensation       
table were paid in 1998 and will be included in regular compensation for 1998.  

The Supplemental Plan is a noncontributory, unfunded plan that provides,    
unlike the Basic Plan, for the grant of up to five years of deemed additional   
service and/or deemed age to employees, for the inclusion of earnings in        
excess of the limits contained in the Code and deferred incentive compensation  
in the calculation of final average earnings and for any benefit in excess of   
the limitations provided for under the Code.                                    

The estimated annual benefits payable under the Basic Plan and Supplemental 
Plan at normal retirement age 65 based upon final average earnings and years    
of credited service are illustrated in the following table.                     

PENSION PLAN TABLE  

                                                                [Download Table]

                                             YEARS OF CREDITED SERVICE          
                                    --------------------------------------------
FINAL AVERAGE EARNINGS                 15       20       25       30       35   
----------------------              -------- -------- -------- -------- --------
                                                                                
$125,000........................... $ 32,344 $ 43,125 $ 53,906 $ 64,688 $ 64,688
 150,000...........................   38,813   51,750   64,688   77,625   77,625
 175,000...........................   45,281   60,375   75,469   90,563   90,563
 200,000...........................   51,750   69,000   86,250  103,500  103,500
 225,000...........................   58,219   77,625   97,031  116,438  116,438
 250,000...........................   64,688   86,250  107,813  129,375  129,375
 300,000...........................   77,625  103,500  129,375  155,250  155,250
 400,000...........................  103,500  138,000  172,500  207,000  207,000
 500,000...........................  129,375  172,500  215,625  258,750  258,750

47  

S-1/A
50th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 50th
The benefits in the foregoing Pension Plan Table would be paid in the form  
of a life annuity or another actuarially equivalent form and are not subject    
to any deduction for Social Security benefits.                                  

The credited years of service for each of the five individuals named in the 
Summary Compensation Table under both the Basic Plan and the Supplemental Plan  
are as follows: Mr. Suggs 2, Mr. Fain 16, Mr. Hanley 15, Mr. Heaton 35 (capped  
at 30), and Mr. Mackenzie 2. The Company and Mr. Suggs have agreed that if Mr.  
Suggs remains employed with the Company until April 15, 1999, he will receive   
seven additional years of credited service.                                     

THRIFT PLANS                                                                  

The Company maintains two thrift plans (the "Basic 401(k) Plans") that are  
qualified under the Code for the benefit of its eligible hourly and salaried    
employees. Under the Basic 401(k) Plans, participants may elect to defer        
between 1% and 10% of their compensation, up to a maximum of $10,000 per year.  
The Company currently matches 50% of all amounts deferred by a participant, up  
to a deferral of 6% of a participant's compensation. Based on the Company's     
financial performance, these matching contributions can increase to 75% or      
100% of amounts deferred by participants up to a deferral of 6% of a            
participant's compensation. The Company's matching contributions allocated to   
each participant vest in increments over the third to fifth years of service.   
All contributions under the Basic 401(k) Plans are currently invested,          
pursuant to participant-directed elections, in mutual funds and institutional   
commingled funds managed by The Vanguard Group of Investment Companies.         

The Company also maintains a supplemental 401(k) plan for certain employees 
(the "Supplemental 401(k) Plan"). The Supplemental 401(k) Plan is an unfunded,  
nonqualified plan that provides benefits to participants in the Basic 401(k)    
Plan for salaried employees in excess of those permitted under the Basic        
401(k) Plan because of limitations set forth in the Code. The Supplemental      
401(k) Plan otherwise mirrors the terms of the Basic 401(k) Plan.               

TREATMENT OF EXISTING GRANTS OF UPC OPTIONS AND RETENTION SHARES              

The Company and UPC have agreed that, upon consummation of the Offering, all
UPC options (other than certain options described below) held by employees of   
the Company will remain outstanding options on UPC stock and will vest (if      
unvested) contingent on continued employment with the Company, in accordance    
with their current vesting schedule. Subject to vesting and without extending   
the exercise period of 10 years from the date of grant, Company employees who   
hold such options will have up to five years from the date of the Acquisition   
to exercise such options. Any of these options that are Incentive Stock         
Options ("ISOs") will automatically become nonqualified options. Any UPC        
retention shares, except those associated with UPC's Long Term Performance      
Program (the "UPC LTPP"), will remain shares of UPC common stock and vest       
immediately upon completion of the Offering.                                    

UPC options granted in connection with the UPC LTPP were awarded in three   
installments, with different vesting requirements for each installment.         
Options in the first installment ("Installment One") vested in January 1998.    
Installment One options will remain options on UPC shares, subject to a         
maximum exercise period of five years from the date of the Acquisition. Two     
thirds of the retention shares granted in the UPC LTPP will remain UPC shares   
subject to existing vesting requirements of continuous employment with the      
Company until November 20, 2000 and achieving certain UPC stock price targets.  
Options in the second installment ("Installment Two") and the third             
installment ("Installment Three"), which would have vested in January of 1999   
and 2000, respectively, and the remaining one third of the retention shares     
will be forfeited as part of the UPC LTPP, but participants will be             
immediately eligible for participation in the Company's Stock Compensation      
Plan as described below.                                                        

The Company will grant options on shares of Common Stock (the "New Options")
and retention shares of Common Stock (the "New Retention Shares") under the     
Company's Stock Compensation Plan in lieu of the                                

48  

S-1/A
51st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 51st
forfeited Installment Two and Installment Three UPC options and the forfeited   
one third of the retention shares. The option price for the New Options (the    
"New Option Price") will be calculated by multiplying the IPO Price by a        
fraction, the numerator of which is the forfeited UPC option price (the "UPC    
Option Price") and the denominator of which is the price of UPC common stock    
as of the date of commencement of the Offering (the "UPC Calculation Price"),   
provided that the New Option Price will not be more than the IPO Price.         

Each New Option will entitle the holder to purchase the number of shares of 
Company Common Stock determined in accordance with the following formula:       

Number of                                                                   
 New      = Number of forfeited  X  (UPC Calculation Price - UPC Option Price)
Options       UPC Options               (IPO Price - New Option Price)      

In the event the New Option Price is the IPO Price, the number of New Options   
will be determined by multiplying the number of forfeited UPC Options by the    
ratio of the UPC Calculation Price to the IPO Price.                            

Subject to continued employment with the Company, the New Options will vest 
incrementally over a three-year period. Three installments of New Retention     
Shares, totalling 17.5% of the holder's New Option awards, will be awarded by   
the Company in lieu of the forfeited UPC retention shares. New Retention        
Shares in the first installment, equal to 7.5% of the New Option awards, will   
vest three years after the Offering subject to the holder's continuous          
employment with the Company (with certain exceptions). New Retention Shares in  
the second and third installments, each equal to 5% of the New Option awards,   
will also vest three years after the Offering subject to the holder's           
continuous employment with the Company (with certain exceptions), provided the  
Company's Common Stock price equals or exceeds 125% and 160% of the IPO Price,  
respectively, for 20 consecutive days on or before the date falling four years  
after the completion of the Offering.                                           

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                  

The following table indicates the number of shares of Common Stock of the   
Company that will be owned beneficially upon consummation of the Offering and   
the number of shares of common stock of UPC owned beneficially as of June 30,   
1998 by each director and executive officer of the Company. Prior to the        
Offering, no director or executive officer beneficially owned any other equity  
securities of the Company or UPC. Each of the executive officers of the         
Company has consented to the substitution of certain options to purchase        
shares of UPC common stock and UPC retention shares beneficially owned prior    
to the Offering for options to purchase shares of Common Stock and Company      
retention stock, respectively, after the Offering. See "--Treatment of          
Existing Grants of UPC Options and Retention Shares." Assuming all such         
substitutions, the percentage of outstanding Common Stock that will be          
beneficially owned after the Offering by directors and executive officers as a  
group will be less than 1% of the outstanding Common Stock. Unless otherwise    
noted, each individual has sole voting and investment power.                    

                                                                [Download Table]

                                  SHARES OF                              
                               COMPANY COMMON  SHARES OF UPC COMMON STOCK
                                 STOCK TO BE       OWNED BENEFICIALLY    
                                    OWNED            AS OF JUNE 30,      
NAME                           BENEFICIALLY(1)            1998           
----                           --------------- --------------------------
                                                                         
Leo H. Suggs..................      34,781              103,016          
Patrick D. Hanley.............      27,825               78,144          
Gordon S. Mackenzie...........      27,825               49,400          
John W. Fain..................      27,825              117,561          
J. Paul Heaton................      10,434              110,094          
All directors and executive                                              
 officers as a group..........     133,907              486,671          

--------                                                                        
(1) Represents Company Retention Shares to be granted pursuant to the           
Company's Stock Compensation Plan upon completion of the Offering at an 
assumed conversion ratio of 3.3125 to 1. See "--Compensation Pursuant to
Company Plans--Treatment of Existing Grants of UPC Options and Retention
Shares."                                                                

49  

S-1/A
52nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 52nd
THE ACQUISITION 

Prior to the Offering, the business of the Company has been conducted by    
OTC, an indirect subsidiary of UPC. On May 20, 1998, UPC announced that it      
intended to sell its entire interest in OTC through an initial public           
offering. Overnite Corporation was incorporated to issue and sell shares of     
Common Stock pursuant to the Offering and to consummate the Acquisition. Upon   
consummation of the Offering and the Acquisition, OTC will become an indirect   
wholly owned subsidiary of the Company.                                         

The Company and UPC will make elections under Section 338(h)(10) of the     
Code, so that the Company's acquisition of the OHI Stock will be treated, for   
federal income tax purposes, as a purchase of all of OHI's and OTC's assets.    
As a result, for federal income tax purposes, the basis of the assets of OHI    
and OTC acquired by the Company will be adjusted in accordance with applicable  
Treasury regulations to reflect the price paid by the Company for the OHI       
Stock, plus the liabilities of OHI deemed assumed for federal income tax        
purposes at the time of the Acquisition. As a result of the Section 338         
Elections, the Company will be able to claim depreciation or amortization       
deductions for substantially all of the purchase price (including goodwill)     
for federal income tax purposes. See "Unaudited Pro Forma Consolidated          
Financial Statements."                                                          

The Company will use the estimated net proceeds of the Offering of $414     
million, together with a $105 million borrowing under the Bank Credit           
Facility, to complete the Acquisition. The purchase price for the OHI Stock     
will be determined through discussions and negotiations among UPC, the Company  
and the Underwriters and, inasmuch as it will be based on the offering price    
of the shares of Common Stock of the Company being sold in the Offering, will   
reflect the factors considered in determining such offering price. If the       
Underwriters' over-allotment option is exercised, the net proceeds therefrom    
will be used to reduce indebtedness under the Bank Credit Facility. See         
"Underwriters."                                                                 

The existing management of OTC will operate the Company after the Offering  
and the Acquisition.                                                            

AGREEMENTS WITH UNION PACIFIC CORPORATION 

In connection with the Offering, the Company, OHI, OTC and UPC are entering 
into a number of agreements. These include (1) the Stock Purchase and           
Indemnification Agreement, pursuant to which (a) the Company will purchase all  
of the shares of OHI Stock from UPC, and (b) the Company, OHI and OTC, on the   
one hand, and UPC, on the other, will agree to indemnify each other and the     
respective subsidiaries, directors, officers, employees, agents and             
representatives thereof for certain costs and liabilities relating to the       
Offering, the Acquisition and their respective businesses and operations; (2)   
the Services Agreement, which will provide for the continued provision of       
certain corporate and administrative services by UPC to the Company; (3) the    
Tax Allocation Agreement, which will provide for the payment of taxes for       
periods during which the Company and UPC are included in the same consolidated  
group for Federal income tax purposes or the same consolidated, combined or     
unitary returns for state tax purposes, the allocation of responsibility for    
the filing of tax returns and certain other related matters; (4) the Pension    
Plan Agreement, which will provide for the transfer of the Company's pension    
plan assets from a master trust established by UPC to a separate trust to be    
established by the Company; and (5) Computer and Information Technology         
Agreements pursuant to which UPC will provide the Company with certain          
computer and telecommunications services.                                       

STOCK PURCHASE AND INDEMNIFICATION AGREEMENT                                    

The Company, OHI, OTC and UPC are entering into a Stock Purchase and        
Indemnification Agreement. Under this Agreement, the Company will consummate    
the Acquisition by purchasing all of the outstanding shares of OHI Stock for    
an estimated aggregate purchase price of $519 million immediately following     
the Offering. In addition, the Company, OHI and OTC, on the one hand, and UPC,  
on the other (the "Indemnifying Party"), will indemnify the other and the       
respective subsidiaries, directors, officers, employees, agents and             

50  

S-1/A
53rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 53rd
representatives thereof (the "Indemnified Party") for certain costs or          
liabilities relating to, resulting from or arising out of (1) Federal or state  
securities laws which are incurred by the Indemnified Party as a result of the  
Offering, including costs and liabilities arising out of certain                
misrepresentations in or omissions from the Registration Statement or           
Prospectus but, in the case where UPC is the Indemnifying Party, only to the    
extent that such costs and liabilities arise out of misrepresentations or       
omissions relating to the businesses or operations of UPC or its subsidiaries   
other than the Company, (2) the Offering and the Acquisition, (3) the           
businesses, operations or assets conducted or owned or formerly conducted or    
owned by the Indemnifying Party and its subsidiaries and (4) the failure by     
the Indemnifying Party to comply with the Indemnification Agreement or any      
other agreements executed in connection with the Offering.                      

The Stock Purchase and Indemnification Agreement also provides that the     
Company and OTC will use reasonable efforts to obtain the release of UPC, or    
their substitution for UPC, on all guarantees, surety and performance bonds,    
letters of credit and other arrangements pursuant to which UPC guarantees or    
secures any Company, OHI or OTC liability, and will indemnify UPC for any       
liabilities incurred under such guarantees, bonds, letters of credit and other  
agreements, or costs incurred for the maintenance of such guarantees, bonds,    
letters of credit and other agreements to the extent UPC is not released        
thereunder. So long as UPC's guaranty of OTC's obligations under a leveraged    
lease financing of certain trucks remains in effect, the Company, OHI and OTC   
have agreed either (1) to maintain certain financial covenants which are the    
same as those applicable to the Bank Credit Agreement or (2) to deposit         
Collateral (as defined in the agreement) with UPC with a value equal to UPC's   
estimated maximum exposure under such guaranty.                                 

The Stock Purchase and Indemnification Agreement requires the Company, OHI  
and OTC to indemnify UPC for any liabilities (and related costs) relating to    
benefits under, or resulting from administration of, the Company's or OTC's     
employee benefit plans and relating to the participation of its employees or    
former employees in such plans of UPC. A comparable indemnification runs to     
the Company, OHI and OTC from UPC for any liabilities (and related costs)       
attributable to UPC's administration of its employee benefit plans and          
relating to the participation of its employees or former employees.             

SERVICES AGREEMENT                                                              

The Company and UPC are entering into a Services Agreement pursuant to which
UPC will continue to provide certain corporate and administrative services to   
the Company, OHI and OTC. These services will include financial reporting,      
auditing, employee benefits administration, insurance and governmental          
relations. Charges for the services provided by UPC through third parties will  
be based on the actual costs incurred. Charges for all other services will be   
based on fees negotiated by the parties, which fees shall include a reasonable  
allocation of direct and indirect costs (including, without limitation,         
employee salaries, benefits and other costs) and be subject to good faith       
renegotiation each month if necessary. The Services Agreement may be            
terminated (1) at any time as to any service or part thereof by the Company on  
30 days' notice, and (2) as to any or all services by UPC after certain         
specified time periods following the Offering on 30 days' notice.               

TAX ALLOCATION AGREEMENT                                                        

The Company, OHI, OTC and UPC are entering into a Tax Allocation Agreement  
to provide for (1) the allocation and payment of taxes for periods during       
which the Company's subsidiaries and UPC (or its affiliates other than the      
Company and its subsidiaries) are included in the same consolidated group for   
Federal income tax purposes or the same consolidated, combined, or unitary      
returns for state tax purposes, (2) the allocation of responsibility for the    
filing of tax returns, (3) the conduct of tax audits and the handling of tax    
controversies, (4) UPC's provision of certain tax services and (5) various      
related matters. For periods during which the Company's subsidiaries are        
included in UPC's consolidated Federal income tax returns or state              
consolidated, combined, or unitary tax returns (which periods are expected to   
end upon the closing of the Offering), the Company will be                      

51  

S-1/A
54th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 54th
required to pay to or entitled to receive from UPC its allocable portion of     
the consolidated Federal income and state tax liability, benefit or credits.    
The Company will be responsible for foreign and separate return state and       
local tax liabilities for itself and for its subsidiaries for all periods.      

PENSION PLAN AGREEMENT                                                          

The Company and UPC are entering into a Pension Plan Agreement to provide   
for the separation of the assets of the Company's Basic Plan from a master      
trust established by UPC. Under the Pension Plan Agreement, the Company is      
required to establish a separate trust for the Basic Plan, and UPC is required  
to cause the trustee of the master trust to transfer the Basic Plan's           
allocable portion of the master trust's assets to the new trust.                

COMPUTER AND INFORMATION TECHNOLOGY AGREEMENTS                                  

The Company and UPC are entering into Computer and Information Technology   
Agreements with respect to the following services: Development Staff, Resource  
Sharing Applications, Data Center Processing, Telecommunications and            
Miscellaneous Services. Pursuant to these Agreements, UPC or its affiliates     
will continue to provide, or cause third party contractors to provide, to the   
Company (i) development staff and programming services in connection with the   
Company's mainframe and distributed applications, key development projects,     
Year 2000 compliance and other ad hoc projects identified by the Company, (ii)  
resource sharing applications in connection with certain research and           
development projects, and the Company's human resources/payroll and general     
accounting systems, (iii) data center processing services on a dedicated        
mainframe in support of the Company's business applications, including          
applications services, decision support services and disaster recovery          
support, (iv) voice and data networking services and related support services,  
including 800 and long distance telephone services and frame relay services     
for all Company service centers, and (v) other miscellaneous services           
including EDI, AutoFax, video conferencing, AVR and electronic mail             
environments. The foregoing services will be provided for initial terms at      
rates negotiated by the parties, and such terms may be extended at the option   
of the Company.                                                                 

52  

S-1/A
55th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 55th
DESCRIPTION OF CAPITAL STOCK  

The Company is authorized to issue 150,000,000 shares of Common Stock, par  
value $0.01 per share, and 25,000,000 shares of Preferred Stock, par value      
$10.00 per share.                                                               

COMMON STOCK                                                                    

Prior to the Offering, there were 100 shares of Common Stock issued and     
outstanding. Immediately following the Offering there will be 33,600,000        
shares of Common Stock outstanding (assuming no exercise of the Underwriters'   
over-allotment option and no exercise of outstanding options).                  

The holders of Common Stock are entitled to one vote for each share held of 
record on all matters submitted to a vote of the shareholders. Holders of       
Common Stock do not have cumulative voting rights in the election of directors  
and do not have preemptive rights. Holders of the Common Stock are entitled to  
receive dividends, when and if declared by the Board, out of funds legally      
available therefor. Subject to any preferential liquidation rights of holders   
of Preferred Stock, upon any liquidation, dissolution or winding-up of the      
Company, the holders of Common Stock are entitled to share ratably in all       
assets of the Company remaining after payments in full of all liabilities of    
the Company.                                                                    

All of the Common Stock offered hereby, when issued, will be fully paid and 
nonassessable.                                                                  

PREFERRED STOCK                                                                 

The Board of Directors is empowered by the Company's Articles of            
Incorporation to designate and issue from time to time one or more series of    
Preferred Stock without shareholder approval. The Board of Directors may fix    
and determine the preferences, limitations and relative rights of each series   
of Preferred Stock so issued. Because the Board of Directors has the power to   
establish the preferences and rights of each series of Preferred Stock, it may  
afford the holders of any series of Preferred Stock preferences and rights,     
voting or otherwise, senior to the rights of holders of Common Stock. The       
issuance of Preferred Stock could have the effect of delaying or preventing a   
change in control of the Company. The Board of Directors has no present plans   
to issue any shares of Preferred Stock.                                         

VIRGINIA CORPORATE LAW, ARTICLES OF INCORPORATION AND BYLAW PROVISIONS          

VIRGINIA STOCK CORPORATION ACT                                                

Shareholders' rights and related matters are governed by the Virginia Stock 
Corporation Act ("VSCA"), the Company's Articles of Incorporation and its       
Bylaws. Certain provisions of the VSCA, Articles of Incorporation and Bylaws    
of the Company, which are summarized below, may discourage or make more         
difficult any attempt by a person or group to obtain control of the Company.    
See "Risk Factors--Consequences of Anti-Takeover Provisions."                   

The VSCA contains certain anti-takeover provisions regarding affiliated     
transactions, control share acquisitions and the adoption of shareholder        
rights plans. In general, the VSCA's affiliated transactions provisions         
prevent a Virginia corporation from engaging in an "affiliated transaction"     
(as defined) with an "interested shareholder" (generally defined as a person    
owning more than 10% of any class of voting securities of the corporation)      
unless approved by a majority of the "disinterested directors" (as defined)     
and the holders of at least two-thirds of the outstanding voting stock not      
owned by the interested shareholder, subject to certain exceptions.             

Under the control share acquisitions provisions of the VSCA, shares acquired
in a "control share acquisition" (defined generally as transactions that        
increase the voting strength of the person acquiring such shares above certain  
thresholds in director elections) generally have no voting rights unless        
granted by a majority of the outstanding voting stock not owned by such         
acquiring person. If such voting rights are granted and the                     

53  

S-1/A
56th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 56th
acquiring person controls 50% or more of the voting power, all shareholders,    
other than the acquiring person, are entitled to receive "fair value" (as       
defined) for their shares. If such voting rights are not granted, the           
corporation may, if authorized by its articles of incorporation or bylaws,      
purchase the acquiring person's shares at their cost to the acquiring person.   
As permitted by the VSCA, the Company has included a provision in its Bylaws    
that opt the Company out of the control share acquisition statute. The          
Company's Bylaws, however, may be amended by the Directors without the          
shareholders' approval.                                                         

Finally, the shareholder rights plan provisions of the VSCA permit the Board
to adopt a shareholder rights plan that could render a hostile takeover         
prohibitively expensive if the Board determines that such a takeover is not in  
the best interests of the Company. The existence of the shareholder rights      
plan provisions of the VSCA, as well as the affiliated transactions and         
control share acquisition provisions, could delay or prevent a change in        
control of the Company, impede a merger, consolidation or other business        
combination involving the Company or discourage a potential acquirer from       
making a tender offer or otherwise attempting to obtain control of the          
Company.                                                                        

ARTICLES OF INCORPORATION AND BYLAWS                                          

The Company's Articles of Incorporation and Bylaws contain certain          
provisions that could inhibit or impede acquisition of control of the Company   
by means of a tender offer, a proxy contest or otherwise and inhibit attempts   
at such transactions. These provisions are expected to discourage certain       
types of coercive takeover practices and inadequate takeover bids and to        
encourage persons seeking to acquire control of the Company to negotiate first  
with the Board. The Company believes that these provisions increase the         
likelihood that proposals initially will be on more attractive terms than       
would be the case in their absence and increase the likelihood of               
negotiations, which might outweigh the potential disadvantages of discouraging  
such proposals because, among other things, negotiation of such proposals       
might result in improvement of their terms. The description set forth below is  
a summary only, and is qualified in its entirety by reference to the Company's  
Articles of Incorporation and Bylaws, which have been filed as exhibits to the  
Registration Statement of which this Prospectus is a part.                      

Number of Directors; Removal; Filling Vacancies. The Articles of            
Incorporation provide that the number of directors shall be between three and   
seven and that, subject to any rights of holders of Preferred Stock to elect    
additional directors under specified circumstances, the number of directors     
within this range will be fixed in accordance with the Bylaws. The Bylaws       
provide that, following the Offering, the number of directors shall initially   
be four. It is the intention of the Company that the number of directors shall  
be increased to six within 90 days of the Offering. In addition, the Bylaws     
provide that any vacancies will be filled by the affirmative vote of a          
majority of the remaining directors, though less than a quorum of the Board.    
Thus, any vacancies created by an increase in the total number of directors     
may be filled by a majority of the Board. Accordingly, the Board could          
temporarily prevent any shareholder from enlarging the Board and then filling   
the new directorship with such shareholder's own nominees. Moreover, the        
Articles of Incorporation provide that directors may be removed only for        
cause. A shareholder therefore could be prevented from replacing the Company's  
directors with the shareholder's own nominees if the shareholder did not have   
cause to remove such directors.                                                 

Staggered Terms for Directors. The Company's Articles of Incorporation      
require that the Board of Directors be divided into three classes of            
directors. At each annual meeting of shareholders, the class of directors to    
be elected at such meeting will be elected for a three-year term, and the       
directors in the other two classes will continue in office. Because holders of  
Common Stock have no right to cumulative voting for the election of directors,  
at each annual meeting of shareholders, the holders of the shares of Common     
Stock with a majority of the voting power of the Common Stock will be able to   
elect all of the successors of the class of directors whose term expires at     
the meeting. In effect, the classified Board of Directors may make more         
difficult or delay a change in control of the Company or the removal of         
incumbent management.                                                           

Preferred Stock. The Articles of Incorporation authorize the Board to       
establish one or more series of Preferred Stock and to determine, with respect  
to any series of Preferred Stock, the preferences, rights and other terms of    
such series. See "--Preferred Stock." The Company believes that the ability of  
the Board to issue one or more series of Preferred Stock will provide the       
Company with increased flexibility in structuring possible future financings    
and acquisitions and in meeting other corporate needs. The authorized shares    
of Preferred                                                                    

54  

S-1/A
57th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 57th
Stock, as well as shares of Common Stock, will be available for issuance        
without further action by the Company's shareholders, unless such action is     
required by applicable law or the rules of any stock exchange or automated      
quotation system on which the Company's securities may be listed or traded.     
Although the Board has no present intention to do so, it could, in the future,  
issue a series of Preferred Stock that, due to its terms, could impede a        
merger, tender offer or other transaction that some, or a majority, of the      
Company's shareholders might believe to be in their best interests, or in       
which shareholders might receive a premium over then-prevailing market prices   
for their shares of Common Stock.                                               

OTHER MATTERS                                                                   

The Common Stock has been approved for quotation on the Nasdaq National     
Market under the symbol "OVNT."                                                 

SHARES ELIGIBLE FOR FUTURE SALE 

Upon completion of the Offering, the Company will have issued and           
outstanding 33,600,000 shares of Common Stock (36,960,000 if the Underwriters   
exercise their over-allotment option in full), all of which will be fully       
tradeable without restriction or further registration under the Securities      
Act, except for any of such shares held by "affiliates" (as defined under Rule  
405 of the Securities Act) of the Company. The senior officers of the Company   
have agreed to certain restrictions on the transfer of such shares for a        
period of 180 days after the date of this Prospectus without the prior written  
consent of Morgan Stanley & Co. Incorporated. See "Underwriters." Officers and  
directors who are "affiliates" of the Company must comply with certain volume   
limits and manner of sale restrictions applicable under Rule 144 under the      
Securities Act to any resales of shares of Common Stock they may make, unless   
such resales are registered under the Securities Act. In general, in order to   
comply with Rule 144, (i) the amount sold by an affiliate within any 3-month    
period cannot exceed the greater of (x) 1% of the total number of shares of     
Common Stock outstanding and (y) the average weekly trading volume in the       
Common Stock for the most recent four weeks and (ii) such shares must be sold   
in "brokers transactions" or transactions with a "market maker" (each as        
defined) not involving the solicitation of a purchaser's order.                 

BANK CREDIT FACILITY  

GENERAL                                                                         

On      , 1998, the Company and Crestar, as agent, entered into a $200      
million revolving credit facility (the "Bank Credit Facility"). The Company     
expects to utilize the Bank Credit Facility primarily for (i) funding $105      
million of the consideration for the Acquisition, (ii) periodic borrowings for  
working capital and capital expenditures and (iii) to support trade letters of  
credit.                                                                         

Interest on revolving loans and swing line loans under the Bank Credit      
Facility is payable at rates per annum equal to (a) the higher of (i)           
Crestar's prime rate and (ii) the overnight federal funds rate plus 0.5% or     
(b) at the Company's option and with respect to revolving loans only, the       
London Interbank Offered Rate ("LIBOR"), plus a spread that adjusts based on    
the Company's ratio of consolidated indebtedness to consolidated cash flow      
(the "LIBOR Spread"). In addition, the Bank Credit Facility may be utilized by  
way of letters of credit for a per annum fee equal to (i) the LIBOR Spread for  
the preceding quarter multiplied by the aggregate amount of all letters of      
credit outstanding during such quarter plus (ii) 0.05% of the amount of the     
applicable letter of credit. The Company also pays certain fees in connection   
with the establishment and maintenance of the Bank Credit Facility.             

The Bank Credit Facility will terminate on      , 2003 and all accrued and  
unpaid interest and fees and outstanding principal will be due on such date.    
Revolving loan borrowings under the Bank Credit Facility may be prepaid in      
whole or in part at any time and from time to time, without premium or          
penalty, except that the prepayment of a LIBOR-based rate loan that is made     
prior to the end of the applicable interest period will be subject to           
reimbursement of breakage costs.                                                

CONDITIONS TO FUNDING                                                           

The Company's borrowing under the Bank Credit Facility is conditioned on,   
among other things, the completion of the Offering.                             

55  

S-1/A
58th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 58th
COVENANTS                                                                       

The Bank Credit Facility is evidenced by a credit agreement, notes and other
loan documents (the "Loan Documents") which will contain covenants that, among  
other things, will restrict the ability of the Company to (i) enter into        
future loans, advances and investments, (ii) incur liens in favor of parties    
other than the lenders under the Bank Credit Facility, (iii) pay cash           
dividends on its capital stock, (iv) consolidate, merge or sell all or any      
substantial part of its assets, and (v) change its business.                    

The Loan Documents contain certain financial covenants that, among other    
things, will require that (i) the Company's ratio of consolidated indebtedness  
(as defined in the Bank Credit Facility) to consolidated cash flow (as defined  
in the Bank Credit Facility) shall not exceed 3.0 to 1.0, (ii) the Company's    
ratio of consolidated cash flow (as defined in the Bank Credit Facility) to     
interest charges and rental expenses under operating leases shall exceed 3.25   
to 1.0, and (iii) the Company's consolidated tangible net worth (as defined in  
the Bank Credit Facility) shall not be less than 85% of its consolidated        
tangible net worth on the closing date of the Bank Credit Facility, plus 85%    
of the net proceeds from the exercise of the Underwriters' over-allotment       
option, plus 100% of net proceeds of a future cash equity offering, plus 50%    
of consolidated net income.                                                     

EVENTS OF DEFAULT                                                               

The Loan Documents provide that upon certain "Events of Default", all       
amounts outstanding thereunder will become immediately due and payable. The     
following events, among others, constitute Events of Default: (i) failure to    
pay when due any interest, principal or fees payable under the Bank Credit      
Facility, (ii) failure to observe or perform any covenant in the Loan           
Documents, (iii) a breach of the Company's representations or warranties, (iv)  
certain cross defaults to other debt of the Company, (v) bankruptcy and (vi)    
any change of control of the Company.                                           

56  

S-1/A
59th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 59th
UNDERWRITERS  

Under the terms and subject to the conditions contained in an Underwriting  
Agreement, dated the date hereof (the "Underwriting Agreement"), the U.S.       
Underwriters named below for whom Morgan Stanley & Co. Incorporated, Credit     
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities        
Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting   
as U.S. Representatives, and the International Underwriters named below for     
whom Morgan Stanley & Co. International Limited, Credit Suisse First Boston     
(Europe) Limited, Donaldson, Lufkin & Jenrette International and Merrill Lynch  
International are acting as International Representatives, have severally       
agreed to purchase, and the Company has agreed to sell to them, severally, the  
respective number of shares of Common Stock set forth opposite the names of     
such Underwriters below:                                                        

                                                                [Download Table]

         NAME                                                   NUMBER OF SHARES
         ----                                                   ----------------
                                                                                
U.S. Underwriters:                                                              
  Morgan Stanley & Co. Incorporated............................                 
  Credit Suisse First Boston Corporation.......................                 
  Donaldson, Lufkin & Jenrette Securities Corporation..........                 
  Merrill Lynch, Pierce, Fenner & Smith                                         
       Incorporated............................................                 
                                                                   ----------   
    Subtotal...................................................    26,880,000   
                                                                   ----------   
International Underwriters:                                                     
  Morgan Stanley & Co. International Limited...................                 
  Credit Suisse First Boston (Europe) Limited..................                 
  Donaldson, Lufkin & Jenrette International...................                 
  Merrill Lynch International..................................                 
                                                                   ----------   
    Subtotal...................................................     6,720,000   
                                                                   ----------   
          Total................................................    33,600,000   
                                                                   ==========   

The U.S. Underwriters and the International Underwriters, and the U.S.      
Representatives and the International Representatives, are collectively         
referred to as the "Underwriters" and the "Representatives," respectively. The  
Underwriting Agreement provides that the obligations of the several             
Underwriters to pay for and accept delivery of the shares of Common Stock       
offered hereby are subject to the approval of certain legal matters by their    
counsel and to certain other conditions. The Underwriters are obligated to      
take and pay for all of the shares of Common Stock offered hereby (other than   
those covered by the U.S. Underwriters' over-allotment option described below)  
if any such shares are taken.                                                   

Pursuant to the Agreement between U.S. and International Underwriters, each 
U.S. Underwriter has represented and agreed that, with certain exceptions: (i)  
it is not purchasing any Shares (as defined herein) for the account of anyone   
other than a United States or Canadian Person (as defined herein) and (ii) it   
has not offered or sold, and will not offer or sell, directly or indirectly,    
any Shares or distribute any prospectus relating to the Shares outside the      
United States or Canada or to anyone other than a United States or Canadian     
Person. Pursuant to the Agreement between U.S. and International Underwriters,  
each International Underwriter has represented and agreed that, with certain    
exceptions: (i) it is not purchasing any Shares for the account of any United   
States or Canadian Person and (ii) it has not offered or sold, and will not     
offer or sell, directly or indirectly, any Shares or distribute any prospectus  
relating to the Shares in the United States or Canada or to any United States   
or Canadian Person. With respect to any Underwriter that is a U.S. Underwriter  
and an International Underwriter, the foregoing representations and agreements  
(i) made by it in its capacity as a U.S. Underwriter apply only to it in its    
capacity as a U.S. Underwriter and (ii) made by it in its capacity as an        
International Underwriter apply only to it in its capacity as an International  
Underwriter. The foregoing limitations do not apply to stabilization            
transactions or to certain other transactions specified in the Agreement        
between U.S. and International Underwriters. As used herein, "United States or  
Canadian Person" means any national or resident of the United                   

57  

S-1/A
60th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 60th
States or Canada, or any corporation, pension, profit-sharing or other trust    
or other entity organized under the laws of the United States or Canada or of   
any political subdivision thereof (other than a branch located outside the      
United States and Canada of any United States or Canadian Person), and          
includes any United States or Canadian branch of a person who is otherwise not  
a United States or Canadian Person. All shares of Common Stock to be purchased  
by the Underwriters under the Underwriting Agreement are referred to herein as  
the "Shares."                                                                   

Pursuant to the Agreement between U.S. and International Underwriters, sales
may be made between the U.S. Underwriters and International Underwriters of     
any number of Shares as may be mutually agreed. The per share price of any      
Shares so sold shall be the public offering price set forth on the cover page   
hereof, in United States dollars, less an amount not greater than the per       
share amount of the concession to dealers set forth below.                      

Pursuant to the Agreement between U.S. and International Underwriters, each 
U.S. Underwriter has represented that it has not offered or sold, and has       
agreed not to offer or sell, any Shares, directly or indirectly, in any         
province or territory of Canada or to, or for the benefit of, any resident of   
any province or territory of Canada in contravention of the securities laws     
thereof and has represented that any offer or sale of Shares in Canada will be  
made only pursuant to an exemption from the requirement to file a prospectus    
in the province or territory of Canada in which such offer or sale is made.     
Each U.S. Underwriter has further agreed to send to any dealer who purchases    
from it any of the Shares a notice stating in substance that, by purchasing     
such Shares, such dealer represents and agrees that it has not offered or       
sold, and will not offer or sell, directly or indirectly, any of such Shares    
in any province or territory of Canada or to, or for the benefit of, any        
resident of any province or territory of Canada in contravention of the         
securities laws thereof and that any offer or sale of Shares in Canada will be  
made only pursuant to an exemption from the requirement to file a prospectus    
in the province or territory of Canada in which such offer or sale is made,     
and that such dealer will deliver to any other dealer to whom it sells any of   
such Shares a notice containing substantially the same statement as is          
contained in this sentence.                                                     

Pursuant to the Agreement between U.S. and International Underwriters, each 
International Underwriter has represented and agreed that (i) it has not        
offered or sold and, prior to the date six months after the closing date for    
the sale of the Shares to the International Underwriters, will not offer or     
sell, any Shares to persons in the United Kingdom except to persons whose       
ordinary activities involve them in acquiring, holding, managing or disposing   
of investments (as principal or agent) for the purposes of their businesses or  
otherwise in circumstances which have not resulted and will not result in an    
offer to the public in the United Kingdom within the meaning of the Public      
Offers of Securities Regulations 1995; (ii) it has complied and will comply     
with all applicable provisions of the Financial Services Act 1986 with respect  
to anything done by it in relation to the Shares in, from or otherwise          
involving the United Kingdom; and (iii) it has only issued or passed on and     
will only issue or pass on in the United Kingdom any document received by it    
in connection with the offering of the Shares to a person who is of a kind      
described in Article 11(3) of the Financial Services Act 1986 (Investment       
Advertisements) (Exemptions) Order 1996, as amended, or is a person to whom     
such document may otherwise lawfully be issued or passed on.                    

Pursuant to the Agreement between U.S. and International Underwriters, each 
International Underwriter has further represented that it has not offered or    
sold, and has agreed not to offer or sell, directly or indirectly, in Japan or  
to or for the account of any resident thereof, any of the Shares acquired in    
connection with the distribution contemplated hereby, except for offers or      
sales to Japanese International Underwriters or dealers and except pursuant to  
any exemption from the registration requirements of the Securities and          
Exchange Law and otherwise in compliance with applicable provisions of          
Japanese law. Each International Underwriter has further agreed to send to any  
dealer who purchases from it any of the Shares a notice stating in substance    
that, by purchasing such Shares, such dealer represents and agrees that it has  
not offered or sold, and will not offer or sell, any of such Shares, directly   
or indirectly, in Japan or to or for the account of any resident thereof        
except for offers or sales to Japanese International Underwriters or dealers    
and except pursuant to any exemption from the registration requirements of the  
Securities and Exchange Law and otherwise in compliance with applicable         
provisions of Japanese law, and that such dealer will send to any other dealer  
to whom it sells any of such Shares a notice containing substantially the same  
statement as is contained in this sentence.                                     

58  

S-1/A
61st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 61st
The Underwriters initially propose to offer part of the shares of Common    
Stock directly to the public at the public offering price set forth on the      
cover page hereof and part to certain dealers at a price that represents a      
concession not in excess of $    a share under the public offering price. Any   
Underwriter may allow, and such dealers may reallow, a concession not in        
excess of $    a share to other Underwriters or to certain dealers. After the   
initial offering of the shares of Common Stock, the offering price and other    
selling terms may from time to time be varied by the Representatives.           

The Company has granted to the U.S. Underwriters an option, exercisable for 
30 days from the date of this Prospectus, to purchase up to an aggregate of     
3,360,000 additional shares of Common Stock at the public offering price set    
forth on the cover page hereof, less underwriting discounts and commissions.    
The U.S. Underwriters may exercise such option solely for the purpose of        
covering overallotments, if any, made in connection with the offering of the    
shares of Common Stock offered hereby. To the extent such option is exercised,  
each U.S. Underwriter will become obligated, subject to certain conditions, to  
purchase approximately the same percentage of such additional shares of Common  
Stock as the number set forth next to such U.S. Underwriter's name in the       
preceding table bears to the total number of shares of Common Stock set forth   
next to the names of all U.S. Underwriters in the preceding table.              

The Underwriters have informed the Company that they do not intend sales to 
discretionary accounts to exceed five percent of the total number of shares of  
Common Stock offered by them.                                                   

The Common Stock has been approved for quotation, subject to official notice
of issuance, on the Nasdaq National Market under the symbol "OVNT."             

Each of the Company and the directors, executive officers and certain other 
senior officers of the Company has agreed that, without the prior written       
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it  
will not, during the period ending 180 days after the date of this Prospectus,  
(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 to purchase, lend or otherwise transfer or dispose of, directly or      
indirectly, any shares of Common Stock or any securities convertible into or    
exercisable or exchangeable for Common Stock or (ii) enter into any swap or     
other arrangement that transfers to another, in whole or in part, any of the    
economic consequences of ownership of the Common Stock, whether any such        
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             
restrictions described in this paragraph do not apply to (x) the sale of        
Shares to the Underwriters, (y) the issuance by the Company of shares of        
Common Stock upon the exercise of an option or a warrant or the conversion of   
a security outstanding on the date of this Prospectus of which the              
Underwriters have been advised in writing or (z) transactions by any person     
other than the Company relating to shares of Common Stock or other securities   
acquired in open market transactions after the completion of the offering of    
the Shares.                                                                     

In order to facilitate the offering of the Common Stock, the Underwriters   
may engage in transactions that stabilize, maintain or otherwise affect the     
price of the Common Stock. Specifically, the Underwriters may overallot in      
connection with the offering, creating a short position in the Common Stock     
for their own account. In addition, to cover overallotments or to stabilize     
the price of the Common Stock, the Underwriters may bid for, and purchase,      
shares of Common Stock in the open market. Finally, the underwriting syndicate  
may reclaim selling concessions allowed to an Underwriter or a dealer for       
distributing the Common Stock in the offering, if the syndicate repurchases     
previously distributed Common Stock in transactions to cover syndicate short    
positions, in stabilization transactions or otherwise. The Underwriters have    
reserved the right to reclaim selling concessions in order to encourage         
Underwriters and dealers to distribute the Common Stock for investment, rather  
than short-term profit taking. Increasing the proportion of the offering held   
for investment may reduce the supply of Common Stock available for short-term   
trading. Any of these activities may stabilize or maintain the market price of  
the Common Stock above independent market levels. The Underwriters are not      
required to engage in these activities, and may end any of these activities at  
any time.                                                                       

From time to time, certain of the Underwriters, including the               
Representatives, or their affiliates, have provided, and continue to provide,   
investment banking and general financing and banking services to UPC.           

59  

S-1/A
62nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 62nd
The Company, UPC and the Underwriters have agreed to indemnify each other   
against certain liabilities, including liabilities under the Securities Act.    

PRICING OF THE OFFERING                                                         

Prior to the Offering, there has been no public market for the Common Stock.
The initial public offering price will be determined by negotiations among      
UPC, the Company and the U.S. Representatives. Among the factors to be          
considered in determining the initial public offering price will be the future  
prospects of the Company and its industry in general, sales, earnings and       
certain other financial operating information of the Company in recent          
periods, and the price-earnings ratios, price-sales ratios, market prices of    
securities and certain financial and operating information of companies         
engaged in activities similar to those of the Company. The estimated initial    
public offering price range set forth on the cover page of this preliminary     
Prospectus is subject to change as a result of market conditions and other      
factors.                                                                        

CERTAIN FEDERAL TAX CONSEQUENCES  

The following is a general discussion of the material United States Federal 
income and estate tax consequences of the ownership and disposition of Common   
Stock by a "Non-United States Holder" and of the issuance of the Common Stock   
by the Company. A "Non-United States Holder" is a person or entity that, for    
United States Federal income tax purposes, is (i) a non-resident alien          
individual, (ii) a foreign corporation or partnership, (iii) an estate, other   
than an estate the income of which is includible in gross income for United     
States Federal income tax purposes regardless of its source, or (iv) a trust    
that is not subject either to the primary supervision of a court within the     
United States or the control of a United States fiduciary.                      

This discussion is based on the Code and administrative interpretations as  
of the date hereof, all of which may be changed either retroactively or         
prospectively. This discussion does not address all aspects of United States    
Federal income and estate taxation that may be relevant to Non-United States    
Holders in light of their particular circumstances and does not address any     
tax consequences arising under the laws of any state, local or foreign taxing   
jurisdiction.                                                                   

Prospective holders should consult their own tax advisors with respect to   
the United States Federal, state, local and non-United States income and other  
tax consequences to them of holding and disposing of Common Stock.              

CONSEQUENCES TO NON-UNITED STATES HOLDERS OF COMMON STOCK                       

DIVIDENDS                                                                     

The Company does not expect to pay dividends for the foreseeable future.    
Subject to the discussion below, any dividends paid to a Non-United States      
Holder of Common Stock generally will be subject to withholding tax at a 30%    
rate or such lower rate as may be specified by an applicable income tax treaty  
unless the dividend is effectively connected with the conduct of a trade or     
business within the United States, or, if an income tax treaty applies, is      
attributable to a United States permanent establishment of the Non-United       
States Holder and, in either case, the Non-United States Holder provides the    
payor with proper documentation (Form 4224), in which event the dividend will   
be taxable under the rules discussed below. In order to claim the benefit of    
an applicable tax treaty rate, a Non-United States Holder may have to file      
with the Company or its dividend paying agent an exemption or reduced treaty    
rate certificate or letter in accordance with the terms of such treaty.         

Under current United States Treasury regulations, for purposes of           
determining whether tax is to be withheld at a 30% rate or at a reduced rate    
as specified by an income tax treaty, the Company ordinarily will presume that  
dividends paid to a stockholder at an address in a foreign country are paid to  
a resident of such country absent knowledge that such presumption is not        
warranted. Recently promulgated regulations effective after December 31, 1999,  
eliminate such current law presumption that dividends paid to an address in a   
foreign country are paid to a resident of that country and impose certain       
certification and documentation requirements on Non-United States Holders       
claiming the benefit of a reduced withholding rate with respect to dividends    
under a tax treaty.                                                             

60  

S-1/A
63rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 63rd
In the case of dividends that are effectively connected with the Non-United 
States Holder's conduct of a trade or business within the United States or, if  
an income tax treaty applies, are attributable to a United States permanent     
establishment of the Non-United States Holder, the Non-United States Holder     
will generally be subject to regular United States income tax in the same       
manner as if the Non-United States Holder were a United States resident. A      
Non-United States corporation receiving effectively connected dividends also    
may be subject to an additional "branch profits tax" which is imposed, under    
certain circumstances, at a rate of 30% (or such lower rate as may be           
specified by an applicable treaty) of the Non-United States corporation's       
"effectively connected earnings and profits," subject to certain adjustments.   

GAIN ON DISPOSITION OF COMMON STOCK                                           

A Non-United States Holder will not be subject to United States Federal     
income tax with respect to gain realized on a sale or other disposition of      
Common Stock unless (i) the gain is effectively connected with a trade or       
business of such Non-United States Holder in the United States, (ii) in the     
case of certain Non-United States Holders who are non-resident alien            
individuals and hold the Common Stock as a capital asset, such individuals are  
present in the United States for 183 or more days in the taxable year of the    
disposition and either (a) such individuals have a "tax home" (as defined for   
United States Federal income tax purposes) in the United States, or (b) the     
gain is attributable to an office or other fixed place of business maintained   
by such individuals in the United States, (iii) the Non-United States Holder    
is subject to tax, pursuant to the provisions of United States tax law          
applicable to certain United States expatriates, or (iv) the Company is or has  
been a "United States real property holding corporation" within the meaning of  
Section 897(c)(2) of the Code at any time within the shorter of the five-year   
period preceding such disposition or such Non-United States holding period.     

The Company believes that it is not currently, and will not become, a United
States real property holding corporation. If the Company were to become a       
United States real property holding corporation, any gain recognized on a sale  
or other disposition of Common Stock by a Non-United States Holder would be     
subject to United States Federal income tax if (i) the Common Stock were not    
regularly traded on an established securities market for tax purposes or (ii)   
the Common Stock were regularly traded on an established Securities market for  
tax purposes and the Non-United States Holder held, directly or indirectly, at  
any time within the five-year period preceding such disposition, more than 5%   
of the outstanding Common Stock.                                                

FEDERAL ESTATE TAXES                                                          

An individual Non-United States Holder who is treated as the owner of or has
made certain lifetime transfers of an interest in the Common Stock will be      
required to include the value thereof in his gross estate for United States     
Federal estate tax purposes, and may be subject to United States Federal        
estate tax unless an applicable estate tax treaty provides otherwise.           

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX                 

Under current United States Treasury regulations, the Company must report   
annually to the Internal Revenue Service (the "IRS") and to each Non-United     
States Holder the amount of dividends paid to such holder and any tax withheld  
with respect to such dividends. These information reporting requirements may    
apply regardless of whether withholding is required. Copies of the information  
returns reporting such dividends and withholding may also be made available to  
the tax authorities in the country in which the Non-United States Holder is a   
resident under the provisions of an applicable income tax treaty or agreement.  

United States backup withholding (which generally is withholding tax imposed
at the rate of 31% on certain payments to persons that fail to furnish certain  
information under the United States information reporting requirements)         
generally will not apply to (i) dividends paid to Non-United States Holders     
that are subject to the 30% withholding discussed above (or that are not so     
subject because a tax treaty applies that reduces or eliminates such 30%        
withholding) or (ii) under current law, dividends paid to a Non-United States   
Holder at an address outside of the United States.                              

61  

S-1/A
64th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 64th
Backup withholding and information reporting generally will apply to        
dividends paid to addresses inside the United States on shares of Common Stock  
owned by beneficial owners that are not "exempt recipients" and that fail to    
provide certain identifying information in the manner required.                 

The payment of the proceeds of the disposition of Common Stock to or through
the U.S. office of a broker is subject to information reporting unless the      
disposing holder certifies under penalty of perjury its Non-United States       
status or otherwise establishes an exemption. Generally, United States          
information reporting and backup withholding will not apply to a payment of     
disposition proceeds if the payment is made outside the United States through   
a Non-United States office of a Non-United States broker. However, information  
reporting requirements (but not backup withholding) will apply to a payment of  
disposition proceeds outside the United States if (a) the payment is made       
through an office outside the United States of a broker that is either (i) a    
United States person, (ii) a foreign person which derives 50% or more of its    
gross income for certain periods from the conduct of a trade or business in     
the United States, or (iii) a "controlled foreign corporation" for United       
States Federal income tax purposes, and (b) the broker fails to maintain        
documentary evidence that the holder is a Non-United States Holder and that     
certain conditions are met, or that the holder otherwise is entitled to an      
exemption.                                                                      

Backup withholding is not an additional tax. Rather, the tax liability of   
persons subject to backup withholding will be reduced by the amount of tax      
withheld. If withholding results in an overpayment of taxes, a refund may be    
obtained, provided the required information is furnished to the IRS.            

On October 6, 1997, the IRS issued final regulations relating to            
withholding, backup withholding and information reporting that unify current    
certification procedures and forms and clarify reliance standards. Such         
regulations generally will be effective with respect to payments made after     
December 31, 1999.                                                              

LEGAL MATTERS 

Certain legal matters with respect to the validity of the shares of Common  
Stock offered hereby will be passed upon for the Company by Hunton & Williams,  
Richmond, Virginia. Certain legal matters in connection with the Offering will  
be passed upon for the Underwriters by Cravath, Swaine & Moore, New York, New   
York.                                                                           

EXPERTS 

The consolidated financial statements as of December 31, 1996 and 1997 and  
for each of the three years in the period ended December 31, 1997, included in  
this Prospectus have been audited by Deloitte & Touche llp, independent         
auditors, as stated in their report appearing herein, and have been so          
included in reliance upon the report of such firm given upon their authority    
as experts in accounting and auditing.                                          

ADDITIONAL INFORMATION  

The Company has filed a Registration Statement on Form S-1 (together with   
all amendments thereto, the "Registration Statement") under the Securities Act  
of 1933, as amended, with the Securities and Exchange Commission (the           
"Commission") with respect to the shares of Common Stock offered hereby. This   
Prospectus, which is a part of the Registration Statement, does not contain     
all the information set forth in the Registration Statement and the exhibits    
and schedules thereto, certain portions of which have been omitted pursuant to  
the rules and regulations of the Commission. For further information with       
respect to the Company and the Common Stock, reference is hereby made to the    
Registration Statement, and exhibits and schedules contained therein, which     
may be inspected without charge at the principal office of the Commission at    
Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549, and copies of all or  
any part of which may be obtained from the Commission upon payment of the       
prescribed fees. The summaries contained in this Prospectus concerning          
information included in the Registration Statement, or in any exhibit or        
schedule thereto, are qualified in their entirety by reference to such          
information, exhibit or schedule.                                               

62  

S-1/A
65th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 65th
After consummation of this Offering, the Company will be subject to the     
informational requirements of the Securities Exchange Act of 1934, as amended,  
and, in accordance therewith, will file reports, proxy statements and other     
information with the Commission. The reports, proxy statements and other        
information filed with the Commission, as well as the Registration Statement,   
may be inspected and copied at the public reference facilities maintained by    
the Commission at Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549,     
and at the Commission's Regional Offices at Seven World Trade Center, 13th      
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,   
Suite 1400, Chicago, Illinois 60661. Copies of such material also can be        
obtained by mail from the Public Reference Section of the Commission at 450     
Fifth Street N.W., Washington, D.C. 20549, at prescribed rates. The Commission  
maintains a World Wide Web site on the Internet at http://www.sec.gov that      
contains reports, proxy statements and other information regarding registrants  
that file electronically with the Commission.                                   

The Company intends to furnish its shareholders with an annual report       
containing consolidated financial statements certified by its independent       
auditors.                                                                       

63  

S-1/A
66th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 66th
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                [Download Table]

                                                                           PAGE
                                                                           ----
                                                                               
FINANCIAL STATEMENTS:                                                          
Overnite Holding, Inc.                                                         
Audited Consolidated Financial Statements                                      
  Independent Auditors' Report............................................ F-2 
  Statement of Consolidated Income for the years ended December 31, 1995,      
   1996 and 1997.......................................................... F-3 
  Statement of Consolidated Financial Position as of December 31, 1996 and     
   1997................................................................... F-4 
  Statement of Consolidated Cash Flows for the years ended December 31,        
   1995, 1996 and 1997.................................................... F-5 
  Statement of Stockholder's Equity for the years ended December 31, 1995,     
   1996 and 1997.......................................................... F-6 
  Notes to the Consolidated Financial Statements.......................... F-7 
Unaudited Interim Consolidated Financial Statements                            
  Unaudited Interim Statement of Consolidated Income for the six months        
   ended June 30, 1997 and 1998........................................... F-16
  Unaudited Interim Statement of Consolidated Financial Position as of         
   December 31, 1997 and                                                       
   June 30, 1998.......................................................... F-17
  Unaudited Interim Statement of Consolidated Cash Flows for the six           
   months ended June 30, 1997 and 1998.................................... F-18
  Unaudited Interim Statement of Stockholder's Equity for the six months       
   ended June 30, 1997 and 1998........................................... F-19
  Notes to Unaudited Interim Consolidated Financial Statements............ F-20
Unaudited Pro Forma Consolidated Financial Statements of Overnite              
 Corporation                                                                   
  Unaudited Pro Forma Statement of Consolidated Income for the year ended      
   December 31, 1997 and the six months ended June 30, 1998............... F-22
  Unaudited Pro Forma Statement of Consolidated Financial Position as of       
   June 30, 1998.......................................................... F-23
  Notes to Unaudited Pro Forma Consolidated Financial Statements.......... F-24

F-1 

S-1/A
67th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 67th
INDEPENDENT AUDITORS' REPORT  

Union Pacific Corporation                                                       
Dallas, Texas                                                                   

Overnite Holding, Inc.                                                          
Wilmington, Delaware                                                            

We have audited the accompanying statements of consolidated financial       
position of Overnite Holding, Inc. and subsidiary companies (the "Company") as  
of December 31, 1997 and 1996, and the related statements of consolidated       
income, stockholder's equity and consolidated cash flows for each of the three  
years in the period ended December 31, 1997. These financial statements are     
the responsibility of the Company's management. Our responsibility is to        
express an opinion on these financial statements based on our audits.           

We conducted our audits in accordance with generally accepted auditing      
standards. Those standards require that we plan and perform the audit to        
obtain reasonable assurance about whether the financial statements are free of  
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the financial statements. An audit    
also includes assessing the accounting principles used and significant          
estimates made by management, as well as evaluating the overall financial       
statement presentation. We believe that our audits provide a reasonable basis   
for our opinion.                                                                

In our opinion, such consolidated financial statements present fairly, in   
all material respects, the financial position of the Company as of December     
31, 1997 and 1996, and the results of their operations and their cash flows     
for each of the three years in the period ended December 31, 1997 in            
conformity with generally accepted accounting principles.                       

Deloitte & Touche LLP                                                           

Richmond, Virginia                                                              
May 8, 1998                                                                     

F-2 

S-1/A
68th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 68th
OVERNITE HOLDING, INC.

STATEMENT OF CONSOLIDATED INCOME

                                                                [Download Table]

                                                  YEAR ENDED DECEMBER 31,      
                                              ---------------------------------
                                                 1995        1996       1997   
                                              ----------  ----------  ---------
                                                      (IN THOUSANDS)           
                                                                               
Operating Revenue............................ $  975,963  $  960,998  $ 945,968
Operating Expenses                                                             
  Salaries, wages and benefits...............    625,573     622,569    572,381
  Supplies and expenses......................    125,936     130,565    109,922
  Operating taxes............................     49,085      46,027     41,091
  Claims and insurance.......................     30,359      33,921     30,291
  Rents and purchased transportation.........     83,274      91,380     75,632
  Communications and utilities...............     19,057      19,488     17,497
  Depreciation...............................     44,932      45,418     42,516
  Amortization of goodwill...................     19,500      19,500     19,500
  Other expenses.............................     17,407      19,596     26,826
                                              ----------  ----------  ---------
    Total operating expenses.................  1,015,123   1,028,464    935,656
                                              ----------  ----------  ---------
Operating income (loss)......................    (39,160)    (67,466)    10,312
Intercompany interest income (note 10).......      9,399       9,268     11,378
Interest expense.............................      1,822       1,532      1,774
Other income (expenses)......................       (325)      3,116          2
                                              ----------  ----------  ---------
Income (loss) before income taxes............    (31,908)    (56,614)    19,918
Income taxes (benefits) (note 4).............     (8,163)    (13,723)    15,609
                                              ----------  ----------  ---------
Net income (loss)............................ $  (23,745) $  (42,891) $   4,309
                                              ==========  ==========  =========

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.

F-3 

S-1/A
69th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 69th
OVERNITE HOLDING, INC.

STATEMENT OF CONSOLIDATED FINANCIAL POSITION

                                                                [Download Table]

                                                             AS OF DECEMBER 31,    
                                                            ---------------------- 
                                                               1996        1997    
                                                            ----------  ---------- 
                                                               (IN THOUSANDS)      
                                                                                   
                       ASSETS                                                      
Current assets                                                                     
  Cash..................................................... $    3,842  $    2,278 
  Accounts receivable (less allowance of $14,510 and                               
   $12,625)................................................     93,454     122,427 
  Advances to affiliate (note 10)..........................    128,784     159,345 
  Current deferred tax asset (note 4)......................     24,593      26,551 
  Inventories..............................................      8,003       8,246 
  Prepaid expenses.........................................     45,444      11,557 
                                                            ----------  ---------- 
    Total current assets...................................    304,120     330,404 
                                                            ----------  ---------- 
Properties                                                                         
  Cost (note 3)............................................    736,253     750,486 
  Accumulated depreciation (note 3)........................   (271,849)   (297,496)
                                                            ----------  ---------- 
    Net properties.........................................    464,404     452,990 
                                                            ----------  ---------- 
Other                                                                              
  Goodwill--net............................................    580,913     561,413 
  Deferred tax asset (note 4)..............................     35,059      32,029 
  Other assets.............................................      5,484       3,403 
                                                            ----------  ---------- 
    Total assets........................................... $1,389,980  $1,380,239 
                                                            ==========  ========== 
           LIABILITIES AND STOCKHOLDER'S EQUITY                                    
Current liabilities                                                                
  Accounts payable......................................... $   21,803  $   24,516 
  Bank overdrafts..........................................      3,032       9,510 
  Accrued wages and deductions.............................     13,085      15,364 
  Accrued vacation, benefits and employee savings plan.....     36,854      41,621 
  Accrued casualty costs...................................     22,763      22,100 
  Interest payable.........................................      1,289       1,744 
  Income and other taxes...................................      8,111       9,446 
  Lease due within one year (note 5).......................      2,965       3,139 
  Current retiree benefit obligation (note 7)..............     38,765      20,318 
  Other current liabilities................................      5,792      12,043 
                                                            ----------  ---------- 
    Total current liabilities..............................    154,459     159,801 
Other liabilities                                                                  
  Lease due after one year (note 5)........................      8,363       5,224 
  Accrued casualty costs...................................     34,410      31,663 
  Retiree benefit obligation (note 7)......................     71,056      73,550 
                                                            ----------  ---------- 
    Total other liabilities................................    113,829     110,437 
                                                            ----------  ---------- 
Stockholder's equity                                                               
  Common stockholder's equity..............................  1,121,692   1,110,001 
                                                            ----------  ---------- 
    Total liabilities and stockholder's equity............. $1,389,980  $1,380,239 
                                                            ==========  ========== 

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.  

F-4 

S-1/A
70th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 70th
OVERNITE HOLDING, INC.

STATEMENT OF CONSOLIDATED CASH FLOWS

                                                                [Download Table]

                                                   YEAR ENDED DECEMBER 31,     
                                                  ---------------------------- 
                                                    1995      1996      1997   
                                                  --------  --------  -------- 
                                                        (IN THOUSANDS)         
                                                                               
Cash from operations                                                           
 Net income (loss)............................... $(23,745) $(42,891) $  4,309 
  Non-cash items included in net income (loss):                                
   Depreciation..................................   44,932    45,418    42,516 
   Amortization of goodwill......................   19,500    19,500    19,500 
   Deferred income taxes (note 4)................   14,784     1,811       883 
   Other--net....................................   (2,091)   (8,945)    2,630 
  Accounts receivable............................    8,726    20,195   (28,973)
  Inventories....................................   (1,083)      275      (243)
  Other current assets and prepaid expenses......  (14,313)  (21,792)   31,929 
  Accounts payable...............................    6,537   (10,009)    2,713 
  Leases due within one year.....................      160       171       174 
  Other current liabilities......................   (8,904)   38,869    (4,023)
                                                  --------  --------  -------- 
    Net cash from operations.....................   44,503    42,602    71,415 
                                                  --------  --------  -------- 
Investing activities                                                           
 Capital investments.............................  (49,411)  (10,479)  (40,411)
 Proceeds from sales of assets...................    1,882    10,034    10,480 
                                                  --------  --------  -------- 
    Net cash used in investing activities........  (47,529)     (445)  (29,931)
                                                  --------  --------  -------- 
Financing activities                                                           
 Dividends paid..................................  (16,000)  (16,000)  (16,000)
 Repayment of debt...............................   (2,634)   (2,795)   (2,965)
 Advances from affiliate (note 10)...............  138,593    90,439   181,163 
 Advances to affiliate (note 10)................. (110,152) (117,383) (211,724)
 Bank overdrafts.................................   (2,052)   (4,348)    6,478 
                                                  --------  --------  -------- 
    Net cash (used in) provided by financing                                   
     activities..................................    7,755   (50,087)  (43,048)
                                                  --------  --------  -------- 
Net change in cash...............................    4,729    (7,930)   (1,564)
Cash at beginning of year........................    7,043    11,772     3,842 
                                                  --------  --------  -------- 
Cash at end of year.............................. $ 11,772  $  3,842  $  2,278 
                                                  ========  ========  ======== 
Supplemental cash flow information                                             
 Income taxes paid (received).................... $ (8,748) $(34,700) $ 14,300 
 Interest paid...................................    1,822     1,532     1,342 

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.

F-5 

S-1/A
71st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 71st
OVERNITE HOLDING, INC.

STATEMENT OF STOCKHOLDER'S EQUITY 

                                                                [Download Table]

                                                YEAR ENDED DECEMBER 31        
                                           ---------------------------------- 
                                              1995        1996        1997    
                                           ----------  ----------  ---------- 
                                                    (IN THOUSANDS)            
                                                                              
Common stock, $10 par value (authorized                                       
 100 shares)                                                                  
  Balance at beginning of year............ $        1  $        1  $        1 
  Balance at end of year..................          1           1           1 
Paid-in surplus                                                               
  Balance at beginning of year............  1,242,186   1,242,186   1,242,186 
  Balance at end of year..................  1,242,186   1,242,186   1,242,186 
Retained earnings                                                             
  Balance at beginning of year............    (21,859)    (61,604)   (120,495)
  Net income (loss).......................    (23,745)    (42,891)      4,309 
                                           ----------  ----------  ---------- 
    Total.................................    (45,604)   (104,495)   (116,186)
  Cash dividends declared.................    (16,000)    (16,000)    (16,000)
                                           ----------  ----------  ---------- 
  Balance at end of year..................    (61,604)   (120,495)   (132,186)
                                           ----------  ----------  ---------- 
    Total common stockholder's equity..... $1,180,583  $1,121,692  $1,110,001 
                                           ==========  ==========  ========== 

The accompanying accounting policies and notes to the consolidated financial
statements are an integral part of these statements.  

F-6 

S-1/A
72nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 72nd
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  

1. SIGNIFICANT ACCOUNTING POLICIES                                              

Consolidation                                                               

The consolidated financial statements include the accounts of Overnite  
Holding, Inc. (the "Company") and its wholly-owned subsidiaries. Overnite   
Transportation Company ("OTC") is the major operating subsidiary. All       
significant intercompany accounts and transactions have been eliminated.    
The Company is a wholly-owned subsidiary of Union Pacific Corporation       
("UPC").                                                                    

The Company is a major interstate trucking company specializing in less-
than-truckload shipments. The Company serves all 50 states and portions of  
Canada, Mexico, Puerto Rico and Guam through 164 service centers located    
throughout the United States. The Company transports a variety of products, 
including chemicals, fabricated metal products, textiles, machinery,        
electronics and paper products. The following describes major accounting    
policies used in the preparation of the accompanying financial statements   
that are not covered in other notes.                                        

Property and Depreciation                                                   

Properties are carried at cost. Provisions for depreciation are computed
on the straight-line method based on estimated service lives of depreciable 
property. Service lives range from 10 to 40 years for buildings and         
improvements, 6 to 15 years for revenue equipment, and 5 to 10 years for    
other equipment. Gains and losses on dispositions of revenue and other      
equipment are reported with depreciation expense while gains and losses for 
all other dispositions (principally real estate) are reported in other      
income.                                                                     

Long-Lived and Intangible Assets                                            

 Goodwill represents the excess paid by UPC in its 1986 acquisition of the
Company over the fair value of net assets acquired, net of amortization     
over 40 years. The Company assesses the recoverability of long-lived and    
intangible assets through a review of undiscounted cash flows and fair      
values of those assets per the Statement of Financial Accounting Standards  
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to be Disposed Of." Accumulated goodwill amortization was 
$234.3 million and $253.8 million at December 31, 1996 and 1997,            
respectively.                                                               

Revenue Recognition                                                         

Transportation revenues are recognized on a percentage-of-completion    
basis, while delivery costs are recognized as incurred.                     

Hedging Transactions                                                        

The Company periodically hedges fuel purchases. Unrealized gains and    
losses from swaps, futures and forward contracts are deferred and           
recognized as a component of fuel expense as the fuel is consumed.          

Use of Estimates                                                            

The consolidated financial statements of the Company include estimates  
and assumptions regarding certain assets, liabilities, revenues and         
expenses and the disclosure of certain contingent assets and liabilities.   
Actual future results may differ from such estimates.                       

Earnings Per Share                                                          

Earnings per share have been omitted from the consolidated statement of 
income as the Company was a wholly-owned subsidiary of UPC for all periods  
presented.                                                                  

F-7 

S-1/A
73rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 73rd
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

Bank Overdrafts                                                             

The Company participates in a cash management program with UPC which    
provides daily replenishment of the major bank account for check-clearing   
requirements. Due to these arrangements negative cash balances representing 
outstanding checks exist at the end of all periods presented. These amounts 
are reflected as current liabilities in the Statement of Consolidated       
Financial Position.                                                         

Claims Liabilities                                                          

The Company is self-insured for workers compensation, health insurance, 
property damage, liability claims and cargo losses up to certain limits.    
Provisions have been made for the estimated losses in these areas based on  
historical estimates, actuarial analysis and other methods. The actual      
costs may vary from estimates based upon trends of losses for filed claims  
and claims yet to be filed.                                                 

2. FINANCIAL INSTRUMENTS                                                        

Risk Management                                                             

The Company periodically uses derivative financial instruments to manage
a portion of its risk of fluctuating fuel prices. The Company does not use  
derivatives for trading purposes. Where the Company has fixed fuel prices   
through the use of swaps, futures or forward contracts, the Company has     
mitigated the downside risk of adverse price movements; however, it has     
also limited future gains from favorable movements. The Company has not     
been required to provide, nor has it received, any collateral relating to   
its hedging activity. The fair market values of the Company's derivative    
financial instrument positions at December 31, 1997 and 1996 described      
below were developed based on the present value of expected future cash     
flows. Unrealized gains and losses from swaps, futures and forward          
contracts are deferred and recognized as a component of fuel expenses as    
the fuel is consumed.                                                       

At December 31, 1997, the Company had hedged 34% of its forecasted 1998 
fuel consumption. At December 31, 1996, the Company had not hedged any of   
its forecasted 1997 fuel consumption. At year-end 1997, the Company had     
outstanding swap agreements of $10 million, with gross and net liability    
positions of $1 million. Fuel hedging had no significant effect on fuel     
costs for the Company for the periods presented.                            

Fair Value of Financial Instruments                                         

The carrying value of the Company's financial instruments approximates  
fair value.                                                                 

3. PROPERTIES                                                                   

Major property accounts are as follows:                                 

                                                                [Download Table]

                                                         AS OF DECEMBER 31, 
                                                         -------------------
                                                           1996      1997   
                                                         --------- ---------
                                                           (IN THOUSANDS)   
                                                                            
Land.................................................... $  69,125 $  68,305
Buildings and improvements..............................   186,373   190,128
Equipment...............................................   386,589   394,462
Other transportation property...........................    94,166    97,591
                                                         --------- ---------
  Total................................................. $ 736,253 $ 750,486
                                                         ========= =========

F-8 

S-1/A
74th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 74th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

Accumulated depreciation accounts are as follows:                       

                                                                [Download Table]

                                                         AS OF DECEMBER 31, 
                                                         -------------------
                                                           1996      1997   
                                                         --------- ---------
                                                           (IN THOUSANDS)   
                                                                            
Buildings and improvements.............................. $  62,065 $  68,451
Equipment...............................................   153,396   164,393
Other transportation property...........................    56,388    64,652
                                                         --------- ---------
  Total................................................. $ 271,849 $ 297,496
                                                         ========= =========

4. INCOME TAXES                                                                 

The Company is included in the consolidated Federal income tax return of
UPC. The consolidated Federal income tax liability of UPC is allocated      
among all corporate entities in the consolidated group on the basis of each 
entity's contributions to the consolidated Federal income tax liability.    
Full benefit of tax losses and credits made available and utilized in UPC's 
consolidated Federal income tax returns is allocated to the individual      
companies generating such items. Components of income tax expense (benefit) 
are as follows:                                                             

                                                                [Download Table]

                                           FOR THE YEAR ENDED DECEMBER 31,   
                                           ----------------------------------
                                              1995        1996       1997    
                                           ----------  ----------  ----------
                                                   (IN THOUSANDS)            
                                                                             
Current:                                                                     
  Federal................................. $  (19,848) $  (15,531) $  15,007 
  State...................................     (3,099)         (3)      (281)
                                           ----------  ----------  --------- 
    Total current.........................    (22,947)    (15,534)    14,726 
Deferred:                                                                    
  Federal.................................     14,599       3,473     (1,772)
  State...................................        185      (1,662)     2,655 
                                           ----------  ----------  --------- 
    Total deferred........................     14,784       1,811        883 
                                           ----------  ----------  --------- 
    Total................................. $   (8,163) $  (13,723) $  15,609 
                                           ==========  ==========  ========= 

Deferred tax liabilities (assets) comprise the following:               

                                                                [Download Table]

                                                       AS OF DECEMBER 31,   
                                                       -------------------- 
                                                         1996       1997    
                                                       ---------  --------- 
                                                         (IN THOUSANDS)     
                                                                            
Current deferred tax asset............................ $ (24,593) $ (26,551)
                                                       ---------  --------- 
Excess tax over book depreciation.....................    78,782     76,947 
State taxes--net......................................     1,880      3,772 
Tax amortizable intangible assets.....................  (111,632)  (105,948)
Excess accrued liabilities............................   (39,089)   (41,800)
Other tax reserves....................................    35,000     35,000 
                                                       ---------  --------- 
Net long-term deferred tax asset......................   (35,059)   (32,029)
                                                       ---------  --------- 
Net deferred tax asset................................ $ (59,652) $ (58,580)
                                                       =========  ========= 

F-9 

S-1/A
75th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 75th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

A reconciliation between statutory and effective tax rates of continuing
operations is as follows:                                                   

                                                                [Download Table]

                                            FOR THE YEAR ENDING DECEMBER 31,  
                                            ----------------------------------
                                               1995        1996       1997    
                                            ----------- ----------- ----------
                                                                              
Statutory tax rate.........................     (35.0%)     (35.0%)     35.0% 
State taxes--net...........................      (5.9)       (1.9)       7.8  
Amortization of goodwill...................      21.4        12.1       34.3  
Other......................................      (6.1)        0.6        1.3  
                                            ----------- ----------- --------- 
Effective tax rate.........................     (25.6%)     (24.2%)     78.4% 
                                            =========== =========== ========= 

All material IRS deficiencies prior to 1983 have been settled. UPC has  
reached a partial settlement with the Appeals Office of the IRS for 1983    
through 1985; the remaining issues will be resolved through refund claims   
filed for those years. UPC is negotiating with the Appeals Office           
concerning 1986 through 1989 tax years. The IRS is examining UPC's returns  
for 1990 through 1994. UPC and the Company believe that the Company has     
adequately provided for Federal and State income taxes.                     

5. DEBT                                                                         

Total debt is summarized below:                                         

                                                                [Download Table]

                                                          AS OF DECEMBER 31, 
                                                          -------------------
                                                            1996      1997   
                                                          --------- ---------
                                                            (IN THOUSANDS)   
                                                                             
Capitalized lease obligations............................ $  11,328 $  8,363 
Less current portion.....................................     2,965    3,139 
                                                          --------- -------- 
  Total long-term lease.................................. $   8,363 $  5,224 
                                                          ========= ======== 

Lease maturities for 1998, 1999 and 2000 are $3.1 million, $2.6 million 
and $2.6 million, respectively. There are no debt maturities scheduled      
beyond 2000.                                                                

6. LEASES                                                                       

The Company leases certain revenue equipment and other property. Future 
minimum lease payments for capital and operating leases with initial or     
remaining non-cancelable lease terms in excess of one year as of December   
31, 1997 are as follows:                                                    

                                                                [Download Table]

                                                           OPERATING CAPITAL 
                                                            LEASES   LEASES  
                                                           --------- ------- 
                                                            (IN THOUSANDS)   
                                                                             
1998......................................................  $ 7,347  $ 3,291 
1999......................................................    5,051    3,832 
2000......................................................    2,805    4,074 
2001......................................................    2,136       -- 
2002......................................................    1,744       -- 
Later years...............................................    3,621       -- 
                                                            -------  ------- 
Total minimum payments....................................  $22,704  $11,197 
Amount representing interest..............................            (2,834)
                                                                     ------- 
Present value of minimum lease payments...................           $ 8,363 
                                                                     ======= 

Rent expenses for operating leases with terms exceeding one year were   
$5.2 million, $6.4 million and $7.5 million in 1995, 1996 and 1997,         
respectively. Contingent rentals and sub-rentals are not significant.       

F-10  

S-1/A
76th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 76th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

Assets under capital lease are $19.0 million net of $5.8 million            
accumulated depreciation. Lease amortization is included in depreciation    
expense.                                                                    

7. RETIREMENT PLANS                                                             

Pension and Postretirement Benefits                                     

In February 1998, the Financial Accounting Standards Board ("FASB")     
issued Statement No. 132 "Employers' Disclosures about Pensions and Other   
Postretirement Benefits" ("SFAS 132"). SFAS 132 standardizes the disclosure 
requirements for pension and other postretirement benefits to the extent    
practicable, requires additional information on changes in the benefit      
obligations and fair values of plan assets that will facilitate financial   
analysis, and eliminates certain disclosures that are no longer as useful   
as they were in the past. This statement requires restatement of            
disclosures for earlier periods. Although not required until the end of     
1998, earlier application is encouraged. The Company has elected to adopt   
the provisions of SFAS 132.                                                 

The Company sponsors a noncontributory pension plan covering            
substantially all employees and a postretirement health and life insurance  
plan. Qualified and non-qualified pension benefits are based on years of    
service and the highest average annual compensation during any five         
consecutive calendar years of employment. The qualified pension plans are   
funded based on the Projected Unit Credit actuarial funding method and are  
funded at not less than the minimum funding standards set forth in the      
Employee Retirement Income Security Act of 1974, as amended. Other          
postretirement benefits are provided on a cost-sharing basis for qualifying 
employees. In November 1997, the pension plan was amended to allow for full 
early retirement benefits upon attaining 30 years of service and 55 years   
of age. These amendments, effective January 1, 1998, are reflected in the   
pension liability for the year ended December 31, 1997.                     

The following tables represent activity in the Company's pension and    
other postretirement benefit accounts:                                      

                                                                [Download Table]

                                                                OTHER       
                                                           POSTRETIREMENT   
                                                PENSION       BENEFITS      
                                               ----------  ---------------- 
                                               1996  1997   1996     1997   
CHANGE IN PROJECTED BENEFITS OBLIGATION:       ----  ----  -------  ------- 
                                                     (IN MILLIONS)          
                                                                            
Projected benefits obligation at beginning of                               
 year........................................  $345  $389  $    48  $    49 
Service cost.................................    19    18        4        3 
Interest cost................................    27    30        3        3 
Plan amendments..............................    --    39       --       -- 
Actuarial loss (gain)........................    11    26        8        7 
Benefits paid................................   (13)  (13)      (1)      (1)
                                               ----  ----  -------  ------- 
Projected benefits obligation at end of                                     
 year........................................  $389  $489  $    62  $    61 
                                               ====  ====  =======  ======= 

                                                                OTHER       
                                                           POSTRETIREMENT   
                                                PENSION       BENEFITS      
                                               ----------  ---------------- 
                                               1996  1997   1996     1997   
CHANGE IN PLAN ASSETS:                         ----  ----  -------  ------- 
                                                     (IN MILLIONS)          
                                                                            
Fair value of plan assets at beginning of                                   
 year........................................  $352  $390  $    --  $    -- 
Actual return on plan assets.................    50    66       --       -- 
Employer contribution........................     1    35        1        1 
Benefits paid................................   (13)  (13)      (1)      (1)
                                               ----  ----  -------  ------- 
Fair value of plan assets at end of year.....  $390  $478  $    --  $    -- 
                                               ====  ====  =======  ======= 

F-11  

S-1/A
77th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 77th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

                                                                [Download Table]

                                                                OTHER       
                                                           POSTRETIREMENT   
                                                PENSION       BENEFITS      
                                               ----------  ---------------- 
                                               1996  1997   1996     1997   
FUNDED STATUS:                                 ----  ----  -------  ------- 
                                                     (IN MILLIONS)          
                                                                            
Funded status................................. $  1  $(11) $   (62) $   (61)
Unrecognized net actuarial loss (gain)........  (35)  (47)       9        3 
Unrecognized prior service cost (gain)........    1    40      (14)     (10)
Unrecognized initial transition obligation....  (10)   (8)      --       -- 
                                               ----  ----  -------  ------- 
Net amount recognized......................... $(43) $(26) $   (67) $   (68)
                                               ====  ====  =======  ======= 

At December 31, 1997, the pension plan is in compliance with all funding
requirements established by the Internal Revenue Service.                   

At December 31, 1996 and 1997, the fair value of the pension plan's     
assets exceeded the accumulated benefit obligation by $53 million and $56   
million, respectively.                                                      

                                                                [Download Table]

                                                               OTHER       
                                                          POSTRETIREMENT   
                                               PENSION       BENEFITS      
                                              ----------  ---------------- 
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER   1996  1997   1996     1997   
31:                                           ----  ----  -------  ------- 
                                                                           
Discount rate...............................  7.50% 7.00%    7.50%    7.00%
Expected return on plan assets..............  8.00% 8.00%      --       -- 
Rate of compensation increase...............  4.50% 4.00%      --       -- 

                                                                [Download Table]

                                                                 OTHER       
                                                             POSTRETIREMENT  
                                              PENSION           BENEFITS     
                                           ----------------  ----------------
                                           1995  1996  1997  1995  1996  1997
COMPONENTS OF NET PERIODIC BENEFIT COST:   ----  ----  ----  ----  ----  ----
                                                   (IN MILLIONS)             
                                                                             
Service cost-benefits earned during the                                      
 period.................................   $ 16  $ 19  $ 18  $ 3   $ 4   $ 3 
Interest on projected benefit                                                
 obligation.............................     24    27    30    3     3     4 
Expected return on assets...............    (22)  (26)  (29)  --    --    -- 
Net amortization costs..................     (2)   (2)   (1)  (4)   (4)   (5)
                                           ----  ----  ----  ---   ---   --- 
Charge to operations....................   $ 16  $ 18  $ 18  $ 2   $ 3   $ 2 
                                           ====  ====  ====  ===   ===   === 

 As of year-end 1996 and 1997, approximately 37% and 32%, respectively, of
the funded plan's assets were held in fixed-income and short-term           
securities, with the remainder in equity securities.                        

Assumed health care cost trend rates have a significant effect on the   
amounts reported for the health care plans. The health care cost trend rate 
is assumed to decrease gradually from 9% for 1998 to 4.5% for 2005 and all  
future years. A one percentage point change in assumed health care cost     
trend rates would have the following effects:                               

                                                                [Download Table]

                                       1% POINT INCREASE 1% POINT DECREASE
                                       ----------------- -----------------
                                                 (IN THOUSANDS)           
                                                                          
Change in service and interest cost                                       
 components...........................       $ 88              $ 86       
Change in postretirement benefits                                         
 obligation...........................       $598              $587       

F-12  

S-1/A
78th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 78th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

Tax Reduction Investment Plans                                              

 The Company maintains two defined contribution plans (the "401(k) Plans")
under which employees are eligible to defer a portion of their compensation 
(as defined in the 401(k) Plans) ranging from 1% to 10% as provided in      
Section 401(k) of the Internal Revenue Code of 1986, as amended. The        
Company currently matches 50% of deferrals up to 6% of employee             
compensation. Based on the Company's financial performance, these matching  
contributions could increase to 75% or 100% of deferrals up to 6% of        
employee compensation. The Company contributed $8.4 million and $7.5        
million in matching contributions to the 401(k) Plans in 1996 and 1997,     
respectively.                                                               

8. STOCK OPTION PLANS                                                           

The FASB issued Statement No. 123, "Accounting for Stock-Based          
Compensation ("SFAS 123"), which was effective for 1996 financial           
statements. SFAS 123 requires either recognition of compensation expense    
for stock options and other stock-based compensation or supplemental        
disclosure of the impact such expense recognition would have had on the     
Company's results of operations had the Company recognized such expense.    
The Company has elected the supplemental disclosure option.                 

Certain of the Company's officers and key employees participate in UPC's
stock option, retention and restricted stock plans. As of December 31,      
1997, there were 1,111,436 UPC stock options held by employees of the       
Company, of which 600,011 UPC stock options were then exercisable. Options  
under the plans have an option price equal to 100% of the fair market value 
of UPC common stock at the date of grant and are exercisable for a period   
of 10 years from the grant date. Options become exercisable no earlier than 
one year after grant. In addition, eligible employees of the Company have   
been issued restricted stock awards representing 233,602 shares of UPC      
common stock as of December 31, 1997. Pro forma net income (loss) (as       
defined in SFAS No. 123) for 1995, 1996 and 1997, including compensation    
expense computed pursuant to SFAS No. 123 (as though the value of options   
were charged to income over the vesting period) would not have been         
materially different from reported net income (loss).                       

9. COMMITMENTS AND CONTINGENCIES                                                

There are various claims and lawsuits pending against the Company. The  
Company is also subject to Federal, state and local environmental laws and  
regulations, and is currently participating in the investigation and        
remediation of a number of sites. Where the remediation costs can be        
reasonably determined, and where such remediation is probable, the Company  
has recorded a liability. At December 31, 1997, the Company had accrued $1  
million for estimated future environmental costs. The accrual is based on   
management's best estimate of the undiscounted future remediation costs     
associated with all the identified sites, and excludes any recoveries that  
may arise from other parties. The accrual is founded on management's        
experience in dealing with similar environmental matters at other sites.    

In 1995, the National Labor Relations Board ("NLRB") General Counsel    
issued a series of complaints before the NLRB contending that the Company   
had engaged in unfair labor practices that affected the outcome of employee 
elections regarding union representation. The Teamsters disputed the        
outcome of the union elections at 18 service centers and sought an order    
that the Company bargain with the union at these locations despite the      
employees' vote against union representation. The Teamsters Union also      
sought implementation of a wage increase which had been awarded to non-     
union employees in March 1995 but withheld from employees at four other     
union-represented service centers pending negotiations with the union. In   
July 1995, the Company and the NLRB General Counsel settled certain of      
these claims, by requiring the Company to post notices promising not to     
engage in certain alleged unfair labor practices. Further, at the four      
service centers where employee elections in favor of union representation   
had been certified by the NLRB, the Company agreed to implement the wage    
increase which had been implemented                                         

F-13  

S-1/A
79th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 79th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

previously at non-union service centers. The settlement explicitly did not  
admit the commission of any unfair labor practices. It did not resolve,     
however, whether the Company could be ordered to bargain with the union at  
a number of service centers where the union had lost elections. On April    
10, 1998, an administrative law judge at the NLRB found in favor of the     
Teamsters Union and the NLRB General Counsel with respect to certain of the 
remaining allegations, issuing a recommended order (the "ALJ Order") that,  
among other things, would require the Company to bargain with the Teamsters 
Union upon request at four additional service centers: Louisville,          
Kentucky; Lawrenceville, Georgia; Norfolk, Virginia; and Bridgeton,         
Missouri. Consolidated into the cases decided by the ALJ was a complaint    
claiming that a wage and benefit increase withheld from Teamster-           
represented employees in 1996, because the union would not negotiate the    
Company's productivity improvement flexibilities on which the increase was  
contingent, should have been granted to those employees. The ALJ Order      
sustained that claim and recommended that the Company be ordered to make    
payments that would amount to approximately $2 million of back pay. The     
Company plans to appeal this decision to the full NLRB, and, if necessary,  
to a U.S. Court of Appeals. Complaints for bargaining orders at 11          
remaining service centers are still before administrative law judges.       
Employees at the four service centers that are subject to the ALJ Order,    
together with those at the 11 other service centers where bargaining orders 
are being sought (only nine of which are operating), account for            
approximately 8% of the Company's nationwide work force (approximately 9%   
of non-management employees).                                               

It is not possible at this time for the Company to fully determine the  
effect of all unasserted claims on its consolidated financial condition,    
results of operations or liquidity; however, to the extent possible, where  
unasserted claims can be estimated and where such claims are considered     
probable, the Company has recorded a liability. If all or a substantial     
portion of the labor law litigation were decided adversely to the Company,  
it could have a materially adverse effect on the Company's operating        
results. The Company does not expect that any other known lawsuits, claims, 
environmental costs, commitments or guarantees will have a material adverse 
effect on its consolidated financial condition or operating results.        

 The Company has been notified by the U.S. Environmental Protection Agency
that it is a potentially responsible person under the Comprehensive         
Environmental Response, Compensation and Liability Act ("CERCLA") or other  
federal or state environmental statutes at 11 hazardous waste sites. Under  
CERCLA the Company may be jointly and severally liable for all site         
remediation and expenses. After investigating the Company's involvement in  
waste disposal or waste generation at such sites, the Company either has    
agreed to de minimis settlements or believes that its obligations with      
respect to such sites will involve immaterial monetary liability, although  
there can be no assurances in this regard.                                  

10. RELATED PARTY TRANSACTIONS                                                  

Advances to and from affiliated companies have historically accrued     
interest at a rate which represents UPC's cost of borrowing. The interest   
rate on the advances was 7.5% in 1996 and 1997. The Company had a net       
receivable from UPC at December 31, 1996 and 1997, principally the result   
of cash advanced to UPC in excess of that needed to meet the capital and    
operating expense requirements of the Company.                              

Services performed by UPC on behalf of the Company include cash         
management, internal audit, certain tax services, information services      
technical support and employee benefits administration. Costs for services  
provided have been reflected in the Company's financial statements.         

Charges incurred by UPC which are directly attributable to the Company  
were charged to the Company as incurred. Other costs were charged to the    
Company based on usage or percentage of assets. Amounts charged were        
approximately $20 million, $18 million, and $18 million for 1995, 1996, and 
1997, respectively. The Company and UPC believe such allocations are        
reasonable. Had the Company operated as an unaffiliated entity during each  
of the three years in the period ended December 31, 1997, it would have     
incurred incremental expenses of approximately $6.5 million per year.       

F-14  

S-1/A
80th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 80th
OVERNITE HOLDING, INC.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

11. ACCOUNTING PRONOUNCEMENTS                                                   

In June 1997, FASB issued Statement of Financial Accounting Standards   
("SFAS") No. 130, "Reporting Comprehensive Income," which is effective      
January 1, 1998. The Company has adopted the provisions of SFAS No. 130     
effective January 1, 1998. The components of comprehensive income include,  
among other things, changes in the market value of futures contracts which  
qualify for hedge accounting and any net loss recognized as an additional   
pension liability but not yet recognized as net periodic pension cost.      

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about     
Segments of an Enterprise and Related Information," that is effective in    
1998. Management is currently analyzing the effects of this statement and   
does not believe the effects will be material.                              

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures 
about Pensions and Other Postretirement Benefits." The Company has elected  
to adopt the provisions of SFAS No. 132 in its 1997 financial statements.   

F-15  

S-1/A
81st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 81st
OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF CONSOLIDATED INCOME

                                                                [Download Table]

                                                             SIX MONTHS ENDED  
                                                                 JUNE 30,      
                                                             ------------------
                                                               1997      1998  
                                                             --------  --------
                                                              (IN THOUSANDS)   
                                                                               
Operating revenue........................................... $451,329  $519,316
Operating expenses                                                             
  Salaries, wages and benefits..............................  280,245   313,040
  Supplies and expenses.....................................   52,094    57,303
  Operating taxes...........................................   21,059    22,010
  Claims and insurance......................................   14,422    15,836
  Rents and purchased transportation........................   32,354    42,472
  Communications and utilities..............................    9,144     9,054
  Depreciation..............................................   21,107    22,821
  Amortization of goodwill..................................    9,750     9,750
  Other expenses............................................   11,125    10,884
                                                             --------  --------
    Total operating expenses................................  451,300   503,170
                                                             --------  --------
Operating income............................................       29    16,146
Intercompany interest income................................    5,069     6,067
Interest expense............................................      667       727
Other income................................................     (331)      463
                                                             --------  --------
Income before income taxes..................................    4,100    21,949
Income taxes................................................    5,570    11,866
                                                             --------  --------
Net income (loss)........................................... $ (1,470) $ 10,083
                                                             ========  ========

See notes to the unaudited interim consolidated financial statements. 

F-16

S-1/A
82nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 82nd
OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF CONSOLIDATED FINANCIAL POSITION

                                                                [Download Table]

                                                              AS OF       AS OF    
                                                           DECEMBER 31,  JUNE 30,  
                                                           ------------ ---------- 
                                                               1997        1998    
                                                           ------------ ---------- 
                                                               (IN THOUSANDS)      
                                                                                   
                       ASSETS                                                      
Current assets                                                                     
  Cash....................................................  $    2,278  $    4,161 
  Accounts receivable (less allowance of $12,625 and                               
   $14,164)...............................................     122,427     137,544 
  Advances to affiliate...................................     159,345     151,427 
  Current deferred tax asset..............................      26,551      30,169 
  Inventories.............................................       8,246       7,199 
  Prepaid expenses........................................      11,557      14,381 
                                                            ----------  ---------- 
    Total current assets..................................     330,404     344,881 
                                                            ----------  ---------- 
Properties                                                                         
  Cost....................................................     750,486     769,656 
  Accumulated depreciation................................    (297,496)   (315,670)
                                                            ----------  ---------- 
    Properties--net.......................................     452,990     453,986 
                                                            ----------  ---------- 
Other                                                                              
  Goodwill--net...........................................     561,413     551,663 
  Deferred tax asset......................................      32,029      28,914 
  Other...................................................       3,403       3,709 
                                                            ----------  ---------- 
    Total assets..........................................  $1,380,239  $1,383,153 
                                                            ==========  ========== 
           LIABILITIES AND STOCKHOLDER'S EQUITY                                    
Current liabilities                                                                
  Accounts payable........................................  $   24,516  $   19,526 
  Bank overdrafts.........................................       9,510       9,018 
  Accrued wages and deductions............................      15,364      19,554 
  Accrued vacation, benefits and employee savings plan....      41,621      45,401 
  Accrued casualty costs..................................      22,100      23,491 
  Interest payable........................................       1,744       1,980 
  Income and other taxes..................................       9,446       4,046 
  Lease due within one year...............................       3,139       2,916 
  Retiree benefit obligation..............................      20,318      10,318 
  Other current liabilities...............................      12,043      13,576 
                                                            ----------  ---------- 
    Total current liabilities.............................     159,801     149,826 
                                                            ----------  ---------- 
Other liabilities                                                                  
  Lease due after one year................................       5,224       3,898 
  Accrued casualty costs..................................      31,663      31,700 
  Retiree benefit obligation..............................      73,550      85,645 
                                                            ----------  ---------- 
    Total other liabilities...............................     110,437     121,243 
                                                            ----------  ---------- 
Stockholder's equity                                                               
  Common stockholder's equity.............................   1,110,001   1,112,084 
                                                            ----------  ---------- 
    Total liabilities and stockholder's equity............  $1,380,239  $1,383,153 
                                                            ==========  ========== 

See notes to the unaudited interim consolidated financial statements. 

F-17

S-1/A
83rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 83rd
OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF CONSOLIDATED CASH FLOWS

                                                                [Download Table]

                                                            SIX MONTHS ENDED   
                                                                JUNE 30,       
                                                            ------------------ 
                                                              1997      1998   
                                                            --------  -------- 
                                                             (IN THOUSANDS)    
                                                                               
Cash from operations                                                           
Net income (loss).......................................... $ (1,470) $ 10,083 
 Non-cash items included in net income (loss):                                 
  Depreciation.............................................   21,107    22,821 
  Amortization of goodwill.................................    9,750     9,750 
  Deferred income taxes....................................    3,339      (505)
  Changes in assets and liabilities........................  (13,586)  (33,198)
  Other--net...............................................    6,734    18,083 
                                                            --------  -------- 
Net cash provided by operations............................   25,874    27,034 
                                                            --------  -------- 
Investing Activities                                                           
  Capital investments......................................   (9,444)  (26,101)
  Proceeds from sales of assets............................    7,679     3,073 
                                                            --------  -------- 
Net cash used in investing activities......................   (1,765)  (23,028)
                                                            --------  -------- 
Financing Activities                                                           
  Dividends paid...........................................   (8,000)   (8,000)
  Repayment of debt........................................   (1,461)   (1,549)
  Advances from affiliate..................................   76,966    83,442 
  Advances to affiliate....................................  (95,904)  (75,524)
  Bank overdrafts..........................................    1,922      (492)
                                                            --------  -------- 
Net cash used in financing activities......................  (26,477)   (2,123)
                                                            --------  -------- 
Net change in cash.........................................   (2,368)    1,883 
Cash at beginning of period................................    3,842     2,278 
                                                            --------  -------- 
Cash at end of period...................................... $  1,474  $  4,161 
                                                            ========  ======== 
Supplemental cash flow information                                             
  Income taxes paid........................................ $  5,313  $ 21,680 
  Interest paid............................................      404       355 

See notes to the unaudited interim consolidated financial statements. 

F-18

S-1/A
84th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 84th
OVERNITE HOLDING, INC.

UNAUDITED INTERIM STATEMENT OF STOCKHOLDER'S EQUITY 

                                                                [Download Table]

                                                   SIX MONTHS        
                                                 ENDED JUNE 30,      
                                              ---------------------- 
                                                 1997        1998    
                                              ----------  ---------- 
                                                 (IN THOUSANDS)      
                                                                     
Common stock, $10 par value (authorized 100                          
 shares)                                                             
  Balance at beginning of period............. $        1  $        1 
  Balance at end of period...................          1           1 
Paid-in surplus                                                      
  Balance at beginning of period.............  1,242,186   1,242,186 
  Balance at end of period...................  1,242,186   1,242,186 
Retained earnings                                                    
  Balance at beginning of period.............   (120,495)   (132,186)
  Net income (loss).............................  (1,470)     10,083 
                                              ----------  ---------- 
    Total....................................   (121,965)   (122,103)
  Cash dividends declared....................     (8,000)     (8,000)
                                              ----------  ---------- 
  Balance at end of period...................   (129,965)   (130,103)
                                              ----------  ---------- 
    Total common stockholder's equity........ $1,112,222  $1,112,084 
                                              ==========  ========== 

See notes to the unaudited interim consolidated financial statements. 

F-19

S-1/A
85th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 85th
OVERNITE HOLDING, INC.  

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS  

1. RESPONSIBILITIES FOR FINANCIAL STATEMENTS                                    

The interim consolidated financial statements are unaudited and reflect all 
adjustments (consisting only of normal and recurring adjustments) that are, in  
the opinion of management, necessary for a fair presentation of the financial   
position and operating results for the interim periods. The interim             
consolidated financial statements should be read in conjunction with the        
audited consolidated financial statements and notes thereto contained herein.   
The results of operations for the six months ended June 30, 1998 are not        
necessarily indicative of the results for the entire year ending December 31,   
1998.                                                                           

2. FINANCIAL INSTRUMENTS                                                        

The Company periodically uses derivative financial instruments to manage a  
portion of its risk to fluctuating fuel prices. The Company does not use        
derivatives for trading purposes. Where the Company has fixed fuel prices       
through the use of swaps, futures, or forward contracts, the Company has        
mitigated the downside risk of adverse price movements; however, it has also    
limited future gains from favorable movements. The Company has not been         
required to provide, nor has it received, any collateral relating to its        
hedging activity.                                                               

The fair market values of the Company's derivative financial instrument     
positions at June 30, 1998 and 1997 were developed based on the present value   
of future cash flows.                                                           

At June 30, 1998, the Company had hedged 42% of its remaining 1998 diesel   
fuel consumption at $0.51 per gallon on a Gulf Coast basis. The Company had     
outstanding swap agreements of $5.8 million, with gross and net liability       
positions of $1.3 million. Fuel hedging increased fuel expense in the first     
six months of 1998 by $1.6 million and had no impact on the first six months    
of 1997.                                                                        

3. COMMITMENTS AND CONTINGENCIES                                                

There are various claims and lawsuits pending against the Company. The      
Company is also subject to Federal, state and local environmental laws and      
regulations, and is currently participating in the investigation and            
remediation of a number of sites. Where the remediation costs can be            
reasonably determined, and where such remediation is probable, the Company has  
recorded a liability.                                                           

It is not possible at this time for the Company to fully determine the      
effect of all unasserted claims on its consolidated financial condition,        
results of operations or liquidity; however, to the extent possible, where      
unasserted claims can be estimated and where such claims are considered         
probable, the Company has recorded a liability. If all or a substantial         
portion of the labor law litigation were decided adversely to the Company, it   
could have a materially adverse effect on the Company's operating results. The  
Company does not expect that any other known lawsuits, claims, environmental    
costs, commitments or guarantees will have a material adverse effect on its     
consolidated financial condition or operating results.                          

See note 9 to the Consolidated Financial Statements.                        

4. ACCOUNTING PRONOUNCEMENTS                                                    

In June 1997, the Financial Accounting Standards Board (FASB) issued        
Statement No. 130, "Reporting Comprehensive Income" (FAS 130), that is          
effective for all periods in 1998, including interim periods. The Company has   
adopted the provisions of FAS 130 effective January 1, 1998. The components of  
comprehensive income include, among other things, changes in the market value   
of futures contracts which qualify for hedge accounting and a net loss          
recognized as an additional pension liability but not yet recognized as net     
periodic pension cost. There is no impact from adopting FAS 130 for the six     
months ended June 30, 1998.                                                     

In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative 
Instruments and Hedging Activities" (FAS 133) that will be effective in 2000.   
Management has not yet determined the effect, if any, FAS 133 will have on the  
Company's financial statements but expects the effect to be minimal.            

F-20  

S-1/A
86th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 86th
OVERNITE CORPORATION  
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS 

FOR THE YEAR ENDED DECEMBER 31, 1997  
AND FOR AND AS OF THE SIX MONTHS ENDED JUNE 30, 1998  

The unaudited pro forma consolidated financial statements are derived from  
the historical consolidated financial statements of Overnite Holding, Inc. and  
give effect to (x) the initial public offering (the "Offering") of the common   
stock of Overnite Corporation, and (y) the use of the proceeds therefrom to     
acquire (the "Acquisition") Overnite Transportation Company ("OTC") through     
the purchase of all the outstanding capital stock of its direct parent          
company, Overnite Holding, Inc., from Union Pacific Corporation ("UPC") as if   
such transactions had been consummated at the beginning of the respective       
periods presented, in the case of the pro forma statements of income, and at    
the date presented in the case of the pro forma statement of financial          
condition. As described in the accompanying notes, (i) the Acquisition will     
result in a new basis of accounting which will result in the assets and         
liabilities of the Company being recorded at fair value, the historical         
goodwill associated with UPC's acquisition of OTC being eliminated and new      
goodwill being recorded to reflect the excess of the purchase price over the    
fair value of the assets acquired, (ii) immediately prior to the Acquisition,   
the Company will borrow $105 million under a bank credit facility (the "Bank    
Credit Facility") to pay a portion of the purchase price, (iii) the Company     
will forgive $148 million of intercompany debt owed to the Company by UPC and   
(iv) following the Acquisition, the Company will incur ongoing operating        
expenses and interest expenses in excess of the amounts reflected in the        
historical financial statements and will no longer receive interest income      
from UPC. If the Underwriters exercise their over-allotment option, the net     
proceeds to the Company therefrom will be used to reduce the indebtedness       
under the Bank Credit Facility.                                                 

The pro forma information does not purport to reflect the results of        
operations that actually would have resulted had the Offering and the           
Acquisition occurred as of the dates indicated or to project the results of     
operations for any future period. The unaudited pro forma consolidated          
financial statements should be read in conjunction with the accompanying notes  
and the historical consolidated financial statements, including the notes       
thereto, of Overnite Holding, Inc. included elsewhere in this Prospectus. The   
pro forma adjustments for certain assets and liabilities are based on an        
allocation of preliminary estimates of fair value by management. Final amounts  
are not expected to materially differ from those presented herein.              

F-21  

S-1/A
87th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 87th
OVERNITE CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE SIX MONTHS ENDED JUNE 30, 1998 

                                                                [Download Table]

                                     YEAR ENDED DECEMBER 31, 1997          
                                   --------------------------------------- 
                                               PRO FORMA                   
                                   HISTORICAL ADJUSTMENTS       PRO FORMA  
                                   ---------- -----------       ---------- 
                                              (IN THOUSANDS)               
                                                                           
Operating revenue.................  $945,968                      $945,968 
Operating expenses                                                         
  Salaries, wages and benefits....   572,381   $  1,161 (a)        573,542 
  Supplies and expenses...........   109,922                       109,922 
  Operating taxes.................    41,091                        41,091 
  Claims and insurance............    30,291                        30,291 
  Rents and purchased                                                      
   transportation.................    75,632                        75,632 
  Communications and utilities....    17,497                        17,497 
  Depreciation....................    42,516                        42,516 
  Amortization of goodwill........    19,500    (19,500)(b)                
                                                  4,351 (c)          4,351 
  Other expenses..................    26,826      5,089 (a)         31,915 
                                                                  -------- 
                                    --------   --------                    
    Total operating expenses......   935,656     (8,899)           926,757 
                                                                  -------- 
                                    --------   --------                    
Operating income..................    10,312      8,899             19,211 
Intercompany interest income......    11,378    (11,378)(d)                
Interest expense..................     1,774      6,825 (e)(i)       8,849 
                                                    250 (a)                
Other income......................         2                             2 
                                                                  -------- 
                                    --------   --------                    
Income before income taxes........    19,918     (9,554)            10,364 
Income taxes......................    15,609    (10,750)(f)          4,859 
                                                                  -------- 
                                    --------   --------                    
Net income........................  $  4,309   $  1,196 (i)       $  5,505 
                                    ========   ========           ======== 
Pro forma income per share                                                 
  Basic...........................                                $    .16 
  Diluted.........................                                $    .16 
Pro forma weighted average number                                          
 of shares                                                                 
  Basic...........................                              33,600,000 
  Common stock equivalents........                                  82,680 
  Diluted.........................                              33,682,680 

                                      SIX MONTHS ENDED JUNE 30, 1998       
                                   ----------------------------------------
                                               PRO FORMA                   
                                   HISTORICAL ADJUSTMENTS       PRO FORMA  
                                   ---------- -----------       ---------- 
                                                                           
Operating revenue.................  $519,316                      $519,316 
Operating expenses                                                         
  Salaries, wages and benefits....   313,040   $    581 (a)        313,621 
  Supplies and expenses...........    57,303                        57,303 
  Operating taxes.................    22,010                        22,010 
  Claims and insurance............    15,836                        15,836 
  Rents and purchased                                                      
   transportation.................    42,472                        42,472 
  Communications and utilities....     9,054                         9,054 
  Depreciation....................    22,821                        22,821 
  Amortization of goodwill........     9,750     (9,750)(b)                
                                                  2,176 (c)          2,176 
  Other expenses..................    10,884      2,544 (a)         13,428 
                                                                  -------- 
                                    --------   --------                    
    Total operating expenses......   503,170     (4,449)           498,721 
                                                                  -------- 
                                    --------   --------                    
Operating income..................    16,146      4,449             20,595 
Intercompany interest income......     6,067     (6,067)(d)                
Interest expense..................       727      3,413 (e)(i)       4,265 
                                                    125 (a)                
Other income......................       463                           463 
                                                                  -------- 
                                    --------   --------                    
Income before income taxes........    21,949     (5,156)            16,793 
Income taxes......................    11,866     (5,515)(f)          6,351 
                                                                  -------- 
                                    --------   --------                    
Net income........................  $ 10,083   $    359 (i)       $ 10,442 
                                    ========   ========           ======== 
Pro forma income per share                                                 
  Basic...........................                                $    .31 
  Diluted.........................                                $    .31 
Pro forma weighted average number                                          
 of shares                                                                 
  Basic...........................                              33,600,000 
  Common stock equivalents........                                  82,680 
  Diluted.........................                              33,682,680 

See the notes to the unaudited pro forma consolidated financial statements. 

F-22

S-1/A
88th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 88th
OVERNITE CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                [Download Table]

                                               AS OF JUNE 30, 1998              
                                         ---------------------------------------
                                                      PRO FORMA                 
                                         HISTORICAL  ADJUSTMENTS       PRO FORMA
                                         ----------  -----------       ---------
                                                  (IN THOUSANDS)                
                                                                                
                ASSETS                                                          
Current assets                                                                  
 Cash and temporary investments........  $    4,161                    $  4,161 
 Accounts receivable...................     137,544                     137,544 
 Advances from affiliate...............     151,427   $(148,068)(d)       3,359 
 Current deferred tax asset............      30,169     (30,169)(c)(g)       -- 
 Inventories...........................       7,199                       7,199 
 Prepaid expenses......................      14,381                      14,381 
                                         ----------   ---------        -------- 
  Total current assets.................     344,881    (178,237)        166,644 
                                         ----------   ---------        -------- 
Properties                                                                      
 Cost..................................     769,656    (290,670)(h)     478,986 
 Accumulated depreciation..............    (315,670)    315,670 (h)          -- 
                                         ----------   ---------        -------- 
                                            453,986      25,000         478,986 
                                         ----------   ---------        -------- 
Other                                                                           
 Goodwill--net.........................     551,663    (551,663)(b)          -- 
                                                        174,025 (c)     174,025 
 Deferred tax asset....................      28,914     (28,914)(c)(g)       -- 
 Other.................................       3,709                       3,709 
                                         ----------   ---------        -------- 
  Total assets.........................  $1,383,153   $(559,789)       $823,364 
                                         ==========   =========        ======== 
 LIABILITIES AND STOCKHOLDERS' EQUITY                                           
Current liabilities                                                             
 Accounts payable......................  $   19,526                    $ 19,526 
 Bank overdrafts.......................       9,018                       9,018 
 Accrued wages and deductions..........      19,554                      19,554 
 Accrued vacation, benefits and em-                                             
  ployee savings plan..................      45,401                      45,401 
 Accrued casualty costs................      23,491                      23,491 
 Interest payable......................       1,980                       1,980 
 Income and other taxes................       4,046                       4,046 
 Debt due within one year..............       2,916                       2,916 
 Current retiree benefit obligations...      10,318                      10,318 
 Other current liabilities.............      13,576                      13,576 
                                         ----------                    -------- 
  Total current liabilities............     149,826                     149,826 
                                         ----------                    -------- 
Other liabilities                                                               
 Debt due after one year...............       3,898   $ 105,000(e)(i)   108,898 
 Other tax reserves....................                  35,000 (c)(g)   35,000 
 Accrued casualty costs................      31,700                      31,700 
 Retiree benefit obligation............      85,645                      85,645 
                                         ----------   ---------        -------- 
  Total other liabilities..............     121,243     140,000         261,243 
                                         ----------   ---------        -------- 
Stockholders' equity                                                            
 Stockholders' equity..................   1,112,084    (148,068)(d)             
                                                        (59,083)(c)(g)          
                                                        (35,000)(c)(g)          
                                                       (551,663)(c)             
                                                         25,000 (c)             
                                                       (105,000)(c)(e)  412,295 
                                                        174,025 (c)             
                                         ----------   ---------        -------- 
  Total liabilities and stockholders'                                           
   equity..............................  $1,383,153   $(559,789)       $823,364 
                                         ==========   =========        ======== 

See the notes to unaudited pro forma consolidated financial statements. 

F-23

S-1/A
89th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 89th
OVERNITE CORPORATION  
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS  

(a) The adjustments reflect management's estimate of additional administrative  
 and third-party costs that the Company will incur as a result of becoming
a stand-alone public company. The costs include certain administrative  
  costs for services currently performed for the Company by UPC such as cash
management, internal audit and information technology, and incremental  
costs the Company will incur, including SEC compliance, corporate       
 secretary, shareholder relations, and outside director costs. The Company
estimates these costs will increase expenses by $6.5 million per year.  

(b) The change of ownership in the Company from the Offering will result in a   
new basis of accounting, and the assets and liabilities will be recorded
at fair value. The adjustments reflect the elimination of historical    
 goodwill and its amortization. New goodwill will be recorded equal to the
excess of the purchase price over fair value of the assets acquired.    
Amortization of goodwill is recorded over 40 years on a straight-line   
  basis. The Company regularly assesses the recoverability of its intangible
assets through a review of undiscounted cash flows and fair values of   
those assets. See note (h).                                             

(c) New basis of accounting for the Company is estimated to result in the       
following goodwill and amortization (in thousands):                     

                                                                [Download Table]
                                                                          
Existing stockholder's equity................................. $1,112,084 
Dividend intercompany balance.................................   (148,068)
Remove existing other tax assets..............................    (59,083)
Restore other tax reserves....................................    (35,000)
Remove existing goodwill......................................   (551,663)
Estimated increase in fair value of fixed assets..............     25,000 
Long-term debt................................................   (105,000)
                                                               ---------- 
  Restated equity.............................................    238,270 
Net cash proceeds from IPO....................................    412,295 
                                                               ---------- 
  New goodwill................................................    174,025 
                                                               ========== 
Annual amortization over 40 years.............................      4,351 
                                                               ---------- 

(d) Immediately prior to the Acquisition, the Company will declare a dividend   
to UPC of $148 million of its intercompany receivable from UPC. As a    
 result, the Company will not receive interest income from this receivable
  after the Offering. The adjustments reflect (i) such dividend payment, and
(ii) the elimination of intercompany interest.                          

(e) Prior to the Acquisition, the Company will borrow $105 million under its    
bank credit facility (the "Bank Credit Facility") and will pay the      
proceeds to UPC as part of the purchase price. As a result the Company  
will incur additional annual interest expense of approximately $6.8     
 million. For purposes of these unaudited pro forma consolidated financial
statements, the Company has assumed an interest rate of 6.5%. The       
adjustments reflect the above borrowing and interest expense.           

(f) Income taxes have been computed using a 37% tax rate on all pro forma       
adjustments except historical goodwill amortization, which is amortized 
net of tax. After the Acquisition, goodwill amortization will affect tax
expense because the Company and UPC will make tax elections to adjust   
depreciable and amortizable basis to reflect the purchase price.        

(g) The adjustments reflect the elimination of all current and long-term net    
deferred tax assets associated with historical temporary differences,   
  based upon the assumption that available tax elections are made that allow
 for restatement of assets and liabilities to fair value for tax purposes.
 The other tax liability represents provision for Federal and state income
 tax and interest for tax issues partially settled or under examination in
prior years. This amount has been reclassified as a long-term liability.

(h) The Company revalued its fixed asset base as part of the new basis of       
accounting opening adjustments. The new values are based on management's
preliminary estimates of the fair values of the service centers and     

F-24  

S-1/A
90th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 90th
OVERNITE HOLDING INCORPORATED 

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 

other equipment and are subject to change. The adjustments reflect a net  
increase in the carrying values of fixed assets as a result of the        
elimination of the historical cost and accumulated depreciation and (ii)  
the recording of the assets at their respective fair values. See note (b).

(i) If the Underwriters' over-allotment option is exercised, the net proceeds   
will be used to reduce indebtedness under the Bank Credit Facility. If  
  such option is exercised in full, (i) the amount of indebtedness under the
  Bank Credit Facility would be reduced by $41.4 million, (ii) the amount of
  interest expense associated with the Bank Credit Facility would be reduced
by $2.7 million for 1997 and $1.3 million for the six months ended June 
30, 1998 (based on an assumed interest rate of 6.5% per annum) and (iii)
  net income would be increased by $1.7 million for 1997 and $.8 million for
the six months ended June 30, 1998.                                     

F-25  

S-1/A
91st Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 91st
[LOGO OF OVERNITE CORPORATION APPEARS HERE] 

S-1/A
92nd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 92nd
PART II 

INFORMATION NOT REQUIRED IN PROSPECTUS  

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION                            

The estimated expenses* in connection with the Offerings are as follows:    

                                                                [Download Table]
                                                                          
Securities and Exchange Commission registration fee............ $  189,655
NASD filing fee................................................     30,500
Nasdaq listing fee.............................................     95,000
Legal fees.....................................................    120,000
Accounting fees................................................    250,000
Printing, engraving and postage expenses.......................    328,000
Miscellaneous..................................................     30,000
Bank financing fees (upfront, legal, etc.).....................    780,000
                                                                ----------
  Total........................................................ $1,823,155
                                                                ==========

--------                                                                
* UPC has agreed to pay all accounting fees and the Company will pay  
all other expenses of the Offering.                                 

The amounts set forth above are estimates except for the SEC registration   
fee and the NASD filing fees.                                                   

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.                             

Directors and officers of the Company may be indemnified against            
liabilities, fines, penalties and claims imposed upon or asserted against them  
as provided in the Virginia Stock Corporation Act and the Company's Articles    
of Incorporation. Such indemnification covers all costs and expenses            
reasonably incurred by a director or officer. The Board of Directors, by a      
majority vote of a quorum of disinterested directors or, under certain          
circumstances, independent counsel appointed by the Board of Directors, must    
determine that the director or officer seeking indemnification was not guilty   
of willful misconduct or a knowing violation of the criminal law. In addition,  
the Virginia Stock Corporation Act and the Company's Articles of Incorporation  
eliminate the liability of directors and officers in a shareholder or           
derivative proceeding under certain circumstances.                              

If the person involved is not a director or officer of the Company, the     
Board of Directors may cause the Company to indemnify to the same extent        
allowed for directors and officers of the Company such person who was or is a   
party to a proceeding, by reason of the fact that he is or was an employee or   
agent of the Company, or is or was serving at the request of the Company as a   
director, officer, employee or agent of another corporation, partnership,       
joint venture, trust, employee benefit plan or other enterprise.                

The Company has in effect a policy insuring the directors and officers of   
the Company against losses which they or any of them shall become legally       
obligated to pay by reason of any actual or alleged error or misstatement or    
misleading statement or act or omission or neglect or breach of duty by the     
directors and officers in the discharge of their duties, individually or        
collectively, or any matter claimed against them solely by reason of their      
being directors or officers, such insurance coverage being limited by the       
specific terms and provisions of the insurance policy.                          

Pursuant to the Underwriting Agreement, in the form filed as an exhibit to  
the Registration Statement, any Underwriters under the Underwriting Agreement   
will agree to indemnify the registrant's directors and officers and persons     
controlling the registrant within the meaning of the Securities Act of 1933     
against certain liabilities that might arise out of or are based upon certain   
information furnished to the registrant by any such indemnifying party.         

II-1  

S-1/A
93rd Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 93rd
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.                               

The registrant has not sold unregistered securities in the three years prior
to the effective date of this Registration Statement.                           

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.                            

(A) Exhibits                                                                

                                                                [Download Table]

EXHIBIT                                                            
NUMBER                     DESCRIPTION OF EXHIBIT                  
-------                    ----------------------                  
                                                                   
 1.1    Form of Underwriting Agreement to be entered into among the
         Company, Union Pacific and the Underwriters**             
 3.1    Company's Articles of Incorporation**                      
 3.2    Company's Bylaws**                                         
 4.1    Specimen of Common Stock Certificate**                     
 5      Opinion of Hunton & Williams with respect to legality**    
10.1    Form of Bank Credit Facility**                             
10.2    Stock Compensation Plan**                                  
10.3    Stock Purchase and Indemnification Agreement**             
10.4    Services Agreement**                                       
10.5    Tax Allocation Agreement**                                 
10.6    Computer and Information Technology Agreements**           
10.7    Pension Plan Agreement**                                   
21      Subsidiaries of the Registrant**                           
23.1    Consent of Deloitte & Touche LLP                           
23.2    Consent of Hunton & Williams (included in Exhibit 5)**     
24      Power of attorney (included on Page II-4)**                
27      Financial Data Schedule**                                  

--------                                                                        
* To be filed by amendment                                                    
** Previously filed                                                             

(B) Financial statement schedules                                           

ITEM 17. UNDERTAKINGS                                                           

(a) Insofar as indemnification for liabilities arising under the Securities 
Act of 1933 may be permitted to directors, officers and controlling persons of  
the registrant pursuant to the foregoing provisions, or otherwise, the          
registrant has been advised that in the opinion of the Securities and Exchange  
Commission such indemnification is against public policy as expressed in the    
Securities Act and is, therefore, unenforceable. In the event that a claim for  
indemnification against such liabilities (other than the payment by the         
registrant of expenses incurred or paid by a director, officer or controlling   
person of the registrant in the successful defense of any action, suit or       
proceeding) is asserted by such director, officer or controlling person in      
connection with the securities being registered, the registrant will, unless    
in the opinion of its counsel the matter has been settled by controlling        
precedent, submit to a court of appropriate jurisdiction the question whether   
such indemnification by it is against public policy as expressed in the         
Securities Act and will be governed by the final adjudication of such issue.    

(b) The registrant hereby undertakes that:                                  

 (i) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of  
this registration statement in reliance upon Rule 430A and contained in a   
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or    
(4) or 497(h) under the Securities Act shall be deemed to be part of this   
registration statement as of the time it was declared effective; and        

II-2  

S-1/A
94th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 94th
(ii) For the purpose of determining any liability under the Securities  
Act of 1933, each post-effective amendment that contains a form of          
prospectus shall be deemed to be a new registration statement relating to   
the securities offered therein, and the offering of such securities at that 
time shall be deemed to be the initial bona fide offering thereof.          

(c) The undersigned registrant undertakes to provide to the underwriters at 
the closing specified in the underwriting agreements, certificates in such      
denominations and registered in such names as required by the underwriters to   
permit prompt delivery to each purchaser.                                       

II-3  

S-1/A
95th Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 95th
SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE 
REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 4 TO REGISTRATION STATEMENT TO BE 
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY 
OF RICHMOND, COMMONWEALTH OF VIRGINIA ON JULY 27, 1998.                         

                      Overnite Corporation
              (Registrant)

                                 By:     /s/ Gordon S. Mackenzie
                                            ----------------------------------
                                       GORDON S. MACKENZIE
                                        SENIOR VICE PRESIDENT-OPERATIONS
                                        AND DIRECTOR

                                                                [Download Table]


             SIGNATURE                       TITLE                 DATE    
             ---------                       -----                 ----    
                                                                           
                 *                    Chairman of the         July 27, 1998
------------------------------------   Board of                            
            LEO H. SUGGS               Directors, Chief                    
                                       Executive Officer                   
                                       and President                       
                                      (Principal                           
                                       Executive Officer)                  

                 *                    Senior Vice             July 27, 1998
------------------------------------   President, Chief                    
         PATRICK D. HANLEY             Financial Officer                   
                                       and Director                        
                                      (Principal                           
                                       Financial and                       
                                       Accounting                          
                                       Officer)                            

      /s/ Gordon S. Mackenzie         Senior Vice             July 27, 1998
------------------------------------   President--                         
        GORDON S. MACKENZIE            Operations and                      
                                       Director                            

                                      Senior Vice             July 27, 1998
------------------------------------   President--                         
            JOHN W. FAIN               Marketing and                       
                                       Sales and Director                  

     * By  /s/ David M. Carter                                July 27, 1998
------------------------------------                                       
  DAVID M. CARTER ATTORNEY-IN-FACT                                         

II-4

S-1/A
Last Page of 96
TOC
1st
Previous
Next
↓Bottom
Just 96th
EXHIBIT INDEX 

                                                                [Download Table]

EXHIBIT                                                            
NUMBER                     DESCRIPTION OF EXHIBIT                  
-------                    ----------------------                  
                                                                   
 1.1    Form of Underwriting Agreement to be entered into among the
         Company, Union Pacific and the Underwriters**             
 3.1    Company's Articles of Incorporation**                      
 3.2    Company's Bylaws**                                         
 4.1    Specimen of Common Stock Certificate**                     
 5      Opinion of Hunton & Williams with respect to legality**    
10.1    Form of Bank Credit Facility**                             
10.2    Stock Compensation Plan**                                  
10.3    Stock Purchase and Indemnification Agreement**             
10.4    Services Agreement**                                       
10.5    Tax Allocation Agreement**                                 
10.6    Computer and Information Technology Agreements**           
10.7    Pension Plan Agreement**                                   
21      Subsidiaries of the Registrant**                           
23.1    Consent of Deloitte & Touche LLP                           
23.2    Consent of Hunton & Williams (included in Exhibit 5)**     
24      Power of attorney (included on Page II-4)**                
27      Financial Data Schedule**                                  

--------                                                                        
*To be filed by amendment                                                     
**Previously filed                                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-1/A’ Filing		Date		First		Last			Other Filings
		8/1/08		48
		7/31/08		48
		11/20/00		45		50
		8/1/00		48
		12/31/99		18		64
		8/1/99		48
		4/15/99		50
		12/31/98		85
		10/9/98		48
Filed on:		7/27/98		1		95
		7/24/98		7		41
		7/10/98		7		45
		7/9/98		7		41
		6/30/98		12		90
		6/29/98		14
		6/27/98		41
		6/22/98		14		41
		5/20/98		10		52			S-1
		5/8/98		67
		4/10/98		15		79
		1/4/98		23
		1/1/98		23		85
		12/31/97		20		87
		10/6/97		64
		6/30/97		20		85
		12/31/96		20		79
		12/31/95		20		66
		12/31/94		20
		12/31/93		20
									List all Filings