Filed Pursuant to Rule 424(b)(5)
Registration No. 333-62536
PROSPECTUS SUPPLEMENT
To Prospectus Dated June 14, 2001
[LOGO] Union Pacific Corporation
$50,000,000
5.75% Notes due 2007
The Notes offered by this prospectus supplement constitute an additional
issuance of our 5.75% notes due 2007, $300,000,000 of which have been
previously issued on October 1, 2001. The offered Notes will become part of the
same series as the outstanding notes.
The Notes will bear interest at the rate of 5.75% per year. Interest on the
Notes is payable on April 15 and October 15 of each year, beginning on October
15, 2002. The Notes will mature on October 15, 2007. We may redeem some or all
of the Notes at any time. The redemption prices are discussed under the caption
"Description of the Notes--Optional Redemption."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the related prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
--------------------------------------------------------------------------------
Price to Underwriting Proceeds to Company
Public (1) Discounts Before Expenses (1)
-----------------------------------------------------
Per Note 99.362% 0.625% 98.737%
-----------------------------------------------------
Total $49,681,000 $312,500 $49,368,500
--------------------------------------------------------------------------------
(1) Interest on the Notes will accrue from April 15, 2002.
The underwriter expects to deliver the Notes to purchasers on or about May 17,
2002.
JPMorgan
May 10, 2002
In making your investment decision, you should rely only on the information
contained in this prospectus supplement. We have not authorized any other
person to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. You should
assume that the information appearing in this prospectus supplement is accurate
as of the date on the front cover of this prospectus supplement only. Our
business, financial condition, results of operations and prospects may have
changed since that date. Neither the delivery of this prospectus supplement nor
any sale made hereunder shall under any circumstances imply that the
information herein is correct as of any date subsequent to the date on the
cover of this prospectus supplement.
-----------------
Table of Contents
Prospectus Supplement Page
--------------------- ----
The Company.......................................................... S-3
Use of Proceeds...................................................... S-3
Capitalization....................................................... S-4
Selected Financial Information....................................... S-5
Description of the Notes............................................. S-6
Underwriting......................................................... S-8
Prospectus Page
---------- ----
About This Prospectus................................................ 1
Where You Can Find More Information.................................. 1
Incorporation By Reference........................................... 1
The Company.......................................................... 2
Forward-Looking Statements........................................... 2
Ratio of Earnings to Fixed Charges................................... 3
Use of Proceeds...................................................... 3
Description of Debt Securities....................................... 4
Description of Preferred Stock....................................... 11
Description of Common Stock.......................................... 15
Description of Securities Warrants................................... 16
Plan of Distribution................................................. 17
Legal Opinions....................................................... 19
Experts.............................................................. 19
S-2
THE COMPANY
Union Pacific Corporation (referred in this prospectus supplement as "we,"
"us," "our" or the "Company") operates through subsidiaries primarily in the
areas of rail transportation and trucking. Our rail transportation operations
principally consist of Union Pacific Railroad Company ("UPRR"), and our
trucking operations principally consist of Overnite Transportation Company
("Overnite") and, as of November 30, 2001, Motor Cargo Industries, Inc.
Our executive offices are located at 1416 Dodge Street, Omaha, Nebraska
68179, and our telephone number is (402) 271-5777. We will, upon request,
provide without charge to each person to whom this prospectus supplement and
the accompanying prospectus is delivered a copy of any or all of the documents
incorporated or deemed to be incorporated by reference into this prospectus
supplement or the accompanying prospectus (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents). Written or oral requests should be directed to: Union Pacific
Corporation, 1416 Dodge Street, Omaha, Nebraska 68179, Attention: Corporate
Secretary (telephone (402) 271-5777).
USE OF PROCEEDS
We expect to use the net proceeds from the sale of the Notes in the offering
for the repayment of outstanding commercial paper borrowings, other debt
obligations and general corporate purposes. At May 10, 2002, we had $60 million
of commercial paper outstanding with a weighted average interest cost of
2.7833% per annum.
S-3
CAPITALIZATION
The following table presents the consolidated capitalization of the Company
(i) as of December 31, 2001, and (ii) as adjusted for the net proceeds from the
issuance of the Notes offered hereby and the use of the entire proceeds to
repay outstanding commercial paper borrowings and other debt obligations.
December 31, 2001
----------------
As
Actual Adjusted
------- --------
(in millions)
Cash and temporary investments........................................... $ 113 $ 113
======= =======
Total Debt:
Notes offered hereby.................................................. $ -- $ 50
Notes and debentures.................................................. 4,682 4,667/(1)/
Capitalized leases.................................................... 1,441 1,441
Medium term notes..................................................... 736 736
Equipment obligations................................................. 619 619
Commercial paper...................................................... 34 -- /(1)/
Term floating rate debt............................................... 300 300
Mortgage bonds........................................................ 153 153
Tax-exempt financings................................................. 168 168
Unamortized discount.................................................. (53) (54)
------- -------
Total............................................................. $ 8,080 $ 8,080
Debt due within one year................................................. (194) (194)
------- -------
Total long-term debt..................................................... $ 7,886 $ 7,886
Company-obligated mandatorily redeemable Convertible Preferred Securities 1,500 1,500
Stockholders' Equity..................................................... 9,575 9,575
------- -------
Total Capitalization..................................................... $18,961 $18,961
------- -------
--------
(1) Reflects the repayment of outstanding commercial paper and other debt
obligations which are intended to be repaid out of the proceeds of the
issuance of the Notes.
As of May 10, 2002, the Company had $1.825 billion in revolving credit
facilities, of which $825 million expires in March 2003, with the remaining
$1.0 billion expiring in 2005. The credit facilities are with various United
States and foreign banks and are available to support commercial paper
borrowings and for other purposes. As of May 10, 2002, there were no
outstanding borrowings under the credit facilities, and there was $60 million
in commercial paper outstanding.
S-4
SELECTED FINANCIAL INFORMATION
The following is a consolidated summary of earnings for each of the years
ended December 31, 2001 and 2000. The information was derived from the audited
consolidated financial statements of the Company and its subsidiary companies.
You should read the following data together with the Consolidated Financial
Statements (and related notes) and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in our Annual Reports on
Form 10-K for the years ended December 31, 2001 and 2000.
Year Ended
December 31,
--------------------
2001 2000/(1)/
------- --------
(dollars in millions
Operating Revenues..................... $11,973 $11,878
Operating Expenses..................... 9,901 9,975
Operating Income....................... 2,072 1,903
Other Income--Net...................... 162 130
Interest Expense....................... (701) (723)
------- -------
Income Before Income Taxes............. 1,533 1,310
Income Tax Expense..................... (567) (468)
------- -------
Net Income............................. $ 966 $ 842
======= =======
Ratio of Earnings to Fixed Charges/(2)/ 3.0 2.5
--------
(1) Results for the year ended December 31, 2000 include a work-force reduction
charge of $115 million pre-tax and $72 million after-tax.
(2) The ratio of earnings to fixed charges has been computed on a consolidated
basis. Earnings represent income before the cumulative effect of accounting
charges, less equity in undistributed earnings of unconsolidated
affiliates, plus fixed charges and taxes based on income. Fixed charges
represent interest charges, amortization of debt discount and expense, and
an estimated amount representing the interest factor for rents.
S-5
DESCRIPTION OF THE NOTES
The following description of the Notes offered hereby (the "Notes")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Debt Securities set forth in the
accompanying prospectus, to which description reference is hereby made.
General
The Notes offered by this prospectus supplement constitute an additional
issuance of our 5.75% notes due 2007, $300,000,000 of which have been
previously issued on October 1, 2001 and are currently outstanding. The offered
Notes shall have the same terms, including without limitation, the same
maturity date, interest rate and interest payment dates as the outstanding
notes, and will become part of the same series and will be designated by the
same CUSIP number as the outstanding notes. The Notes are a series of debt
securities referred to in this prospectus supplement. We may, without the
consent of the holders, increase such principal amount in the future, on the
same terms and conditions and with the same CUSIP number, as the Notes being
offered hereby. We will not issue any such additional notes unless the further
notes are fungible with the Notes being issued hereby for U.S. federal income
tax purposes. Each Note will bear interest at 5.75% per annum. Interest on each
Note will be payable semiannually on April 15 and October 15 of each year,
commencing October 15, 2002, to the person in whose name the Note is
registered, subject to certain exceptions as provided in the Indenture, at the
close of business on April 1 and October 1 (each, a "Record Date"), as the case
may be, immediately preceding such April 15 or October 15. The Notes will
mature on October 15, 2007. Interest on the Notes will be paid on the basis of
a 360-day year consisting of twelve 30-day months. The Notes will be issued
under an Indenture dated as of December 20, 1996, between Citibank, N.A. as
Trustee, and us.
Optional Redemption
The Notes will be redeemable in whole or in part at any time and from time
to time, at our option, at a redemption price equal to the greater of (i) 100%
of the principal amount of the Notes to be redeemed or (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon (exclusive of interest accrued to the date of redemption) discounted to
the date of redemption on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the then current Treasury Rate plus 25
basis points, plus, in either case, accrued and unpaid interest on the
principal amount being redeemed to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, (i) the yield,
under the heading which represents the average for the immediately preceding
week, appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The Treasury Rate shall be calculated
on the third Business Day preceding the redemption date.
"Business Day" means any calendar day that is not a Saturday, Sunday or
legal holiday in New York, New York and on which banking institutions and trust
companies are open for business in New York, New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes.
S-6
"Comparable Treasury Price" means (i) the average of five Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or (ii) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Independent Investment Banker" means Salomon Smith Barney Inc. or J.P.
Morgan Securities Inc. or, if both such firms are unwilling or unable to select
the Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee.
"Reference Treasury Dealer" means (i) Salomon Smith Barney Inc., J.P. Morgan
Securities Inc., ABN AMRO Incorporated, Banc of America Securities LLC, Credit
Suisse First Boston Corporation and U.S. Bancorp Piper Jaffray Inc. and their
respective successors, provided, however, that if any of the foregoing is not
at the time a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), we shall substitute therefor another Primary
Treasury Dealer and (ii) any other Primary Treasury Dealer selected by the
Independent Investment Banker after consultation with us.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker at 5:00 p.m., New York
City time, on the third Business Day preceding such redemption date.
Notice of the redemption will be mailed to holders of Notes by first-class
mail at least 30 and not more than 60 days prior to the date fixed for
redemption. If fewer than all of the Notes are to be redeemed, the Trustee will
select, not more than 60 days prior to the redemption date, the particular
Notes or portions thereof for redemption from the outstanding Notes not
previously called by such method as the Trustee deems fair and appropriate.
Sinking Fund
There is no provision for a sinking fund for the Notes.
Defeasance
Under certain circumstances, we will be deemed to have discharged the entire
indebtedness on all of the outstanding Notes by defeasance. See "Description of
Debt Securities--Defeasance of the Indenture and Debt Securities" in the
accompanying prospectus for a description of the terms of any such defeasance
and the tax consequences thereof.
Book-Entry System
The Notes will be issued in the form of a fully registered Global Security.
The Global Security will be deposited with, or on behalf of, The Depository
Trust Company ("DTC" or the "Depository") and registered in the name of the
Depository's nominee.
Upon the issuance of a Global Security, the Depository will credit, on its
book-entry registration and transfer system, the principal amount of the Notes
represented by such Global Security to the accounts of institutions that have
accounts with the Depository or its nominee ("Participants"). The accounts to
be credited will be designated by the underwriters, dealers or agents.
Ownership of beneficial interests in the Global Security will be shown on, and
the transfer of that ownership will be effected only through, records
maintained by the Depository (with respect to Participants' interests), the
Participants and others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with Participants,
either directly or indirectly ("indirect participants"). The laws of some
states may require that certain persons take physical delivery in definitive
form of securities which they own. Consequently, such persons may be prohibited
from purchasing beneficial interests in the Global Security from any beneficial
owner or otherwise.
S-7
So long as the Depository's nominee is the registered owner of the Global
Security, such nominee for all purposes will be considered the sole owner or
holder of the Notes represented by such Global Security for all purposes under
the Indenture. Except as provided below, owners of beneficial interests in the
Global Security will not be entitled to have any of the Notes represented by
such Global Security registered in their names, will not receive or be entitled
to receive physical delivery of the Notes in definitive form and will not be
considered the owners or holders thereof under the Indenture. Accordingly, each
person owning a beneficial interest in the Global Security must rely on the
procedures of the Depository and, if such person is not a Participant, on the
procedures of the Participant and, if applicable, the indirect participant,
through which such person owns its interest, to exercise any rights of a holder
under the Indenture. We understand that under existing practice, in the event
that we request any action of the holders or a beneficial owner desires to take
any action a holder is entitled to take, the Depository would act upon the
instructions of, or authorize, the Participant to take such action.
We expect that the Depository or its nominee, upon receipt of any payment of
principal or interest, will immediately credit the accounts of the Participants
with such payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of the Depository or such nominee.
If DTC is at any time unwilling, unable or ineligible to continue as
depositary for a Global Security and a successor depositary is not appointed by
the Company within 90 days, we will issue certificated Notes in definitive form
in exchange for such Global Security. In addition, we may at any time determine
not to have the Notes represented by a Global Security, and, in such event,
will issue certificated Notes in definitive form in exchange for such Global
Security. In either instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of certificated Notes in
definitive form equal in principal amount to such beneficial interest in such
Global Security and to have such certificated Notes registered in its name.
Certificated Notes so issued in definitive form will be issued in denominations
of $1,000 and integral multiples thereof and will be issued in registered form
only, without coupons.
See "Description of Debt Securities" in the accompanying prospectus for
additional information concerning the Notes, the Indenture and the book-entry
system.
UNDERWRITING
Subject to the terms and conditions stated in the underwriting agreement
dated as of the date of this prospectus supplement, the underwriter named below
has agreed to purchase, and we have agreed to sell to the underwriter, the
principal amount of Notes set forth opposite the underwriter's name.
--------------------------------------------------------------------------------
Underwriter Principal Amount
--------------------------- ----------------
J.P. Morgan Securities Inc. $50,000,000
-----------
Total...................... $50,000,000
--------------------------------------------------------------------------------
The underwriting agreement provides that the obligations of the underwriter
to purchase the notes included in this offering are subject to approval of
legal matters by counsel and to other conditions. The underwriter is obligated
to purchase all the Notes if they purchase any of the Notes.
The underwriter proposes to offer some of the Notes directly to the public
at the public offering price set forth on the cover page of this prospectus
supplement and some of the Notes to dealers at the public offering price less a
concession not to exceed 0.375% of the principal amount of the notes. In
addition, the underwriter may allow, and dealers may reallow, a concession not
to exceed 0.250% of the principal amount of the notes on sales to other
dealers. After the initial offering of the Notes to the public, the underwriter
may change the public offering price and concessions.
S-8
The following table shows the underwriting discounts and commissions that we
are to pay to the underwriter in connection with this offering (expressed as a
percentage of the principal amount of the Notes).
--------------------------
Paid by the Company
--------------------------
Per Note...... 0.625%
--------------------------
There is currently no established public trading market for the Notes. The
underwriter intends to make a secondary market for the Notes. However, it is
not obligated to do so and may discontinue making a secondary market for the
Notes at any time without notice. No assurance can be given as to how liquid
the trading market for the Notes will be.
In connection with the offering, J.P. Morgan Securities Inc. may purchase
and sell Notes in the open market. These transactions may include
over-allotment, covering transactions and stabilizing transactions.
Over-allotment involves sales of Notes in excess of the principal amount of
Notes to be purchased by the underwriter in the offering, which creates a short
position. Covering transactions involve purchases of the Notes in the open
market after the distribution has been completed in order to cover short
positions. Stabilizing transactions consist of certain bids or purchases of
Notes made for the purpose of preventing or retarding a decline in the market
price of the Notes while the offering is in progress.
Any of these activities may have the effect of preventing or retarding a
decline in the market price of the Notes. They may also cause the price of the
Notes to be higher than the price that otherwise would exist in the open market
in the absence of these transactions. The underwriter may conduct these
transactions in the over-the-counter market or otherwise. If the underwriter
commences any of these transactions, it may discontinue them at any time.
We estimate that our total expenses for this offering, excluding
underwriting discounts, will be approximately $30,000.
The underwriter and its affiliates have performed investment banking and
advisory services for us from time to time for which they have received
customary fees and expenses. The underwriter and its affiliates may, from time
to time, engage in transactions with, and perform services for, us in the
ordinary course of their respective businesses.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriter may be required to make because of any of those
liabilities.
S-9
[LOGO] Union Pacific
Corporation
$1,000,000,000
Debt Securities
Preferred Stock
Common Stock
Securities Warrants
-----------------
Union Pacific Corporation may sell from time to time, in one or more
offerings:
. Debt Securities
. Preferred Stock
. Common Stock
. Warrants for Debt Securities or Preferred Stock
Debt securities and preferred stock may be convertible into debt securities,
preferred stock or common stock.
The total offering price of these securities, in the aggregate, will not
exceed $1,000,000,000. We will provide specific terms of these securities in
supplements to this prospectus. You should read this prospectus and any
supplement to this prospectus carefully before you invest.
We may offer the securities directly or through underwriters, agents or
dealers. The supplements to this prospectus will designate the terms of our
plan of distribution. The discussion under the heading "Plan Of Distribution"
provides more information on this topic.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
This prospectus is dated June 14, 2001
TABLE OF CONTENTS
Page
----
About This Prospectus.............. 1
Where You Can Find More Information 1
Incorporation By Reference......... 1
The Company........................ 2
Forward-Looking Statements......... 2
Ratio of Earnings to Fixed Charges. 3
Use of Proceeds.................... 3
Description of Debt Securities..... 4
Description of Preferred Stock..... 11
Description of Common Stock........ 15
Description of Securities Warrants. 16
Plan of Distribution............... 17
Legal Opinions..................... 19
Experts............................ 19
ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration statement that Union Pacific
Corporation ("we" or "the Company") filed with the Securities and Exchange
Commission ("SEC"). Under this shelf registration statement, we may sell any
combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $1,000,000,000. For further
information about our business and the securities, you should refer to this
registration statement and its exhibits. The exhibits to the registration
statement contain the full text of certain contracts and other important
documents summarized in this prospectus. Because these summaries may not
contain all the information that you may find important in deciding whether to
purchase the securities we may offer, you should review the full text of these
documents. You can obtain the registration statement from the SEC as indicated
under the heading "Where You Can Find More Information."
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."
You should rely only on the information contained or incorporated by
reference in this prospectus and the prospectus supplement. We have not
authorized anyone to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. This
prospectus and the prospectus supplement may only be used where it is legal to
offer the securities. The information in this prospectus, as well as
information we have previously filed with the SEC and incorporated by reference
in this prospectus, is accurate only as of the date on the front cover of this
prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. Our
SEC filings are available at the SEC's website on the World Wide Web at
http://www.sec.gov. You may also read and copy any document we file with the
SEC at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices in New
York, Seven World Trade Center, 13th Floor, New York, New York 10048, and
Chicago, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. You may call the SEC at 1-800-SEC-0330 for more information
about the public reference rooms and their copy charges. Our common stock is
listed and traded on the New York Stock Exchange. You may also inspect the
information we file with the SEC at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
INCORPORATION BY REFERENCE
The SEC requires us to "incorporate by reference" certain information we
file with them, which means that we will disclose important information to you
by referring you to those documents. The information incorporated by reference
is an important part of this prospectus. Any information that we file with the
SEC after the date of this prospectus as part of an incorporated document will
automatically update and supersede information contained in this prospectus.
We incorporate by reference the documents listed below:
Our Annual Report on Form 10-K for the fiscal year ended December 31,
2000;
Our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2001; and
Our Current Report on Form 8-K dated April 26, 2001.
1
We also incorporate by reference any filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date of this prospectus but before the end of the offering made by this
prospectus.
You may request a copy of any filings referred to above, excluding exhibits,
at no cost, by writing or telephoning us at the following address: Union
Pacific Corporation, 1416 Dodge Street, Omaha, Nebraska 68179, Attention:
Corporate Secretary (telephone 402-271-5777).
THE COMPANY
We operate primarily in the areas of rail transportation, through our
subsidiary Union Pacific Railroad Company ("UPRR"), and trucking, through our
subsidiary Overnite Transportation Company ("Overnite"). Union Pacific
Corporation was incorporated in Utah in 1969.
Rail Transportation
UPRR is the largest rail system in the United States, operating nearly
34,000 route miles linking Pacific Coast and Gulf Coast ports to the Midwest
and eastern U.S. gateways, and providing several north/south corridors to key
Mexican gateways. UPRR serves the western two-thirds of the country and
maintains coordinated schedules with other carriers for the handling of freight
to and from the Atlantic Coast, the Pacific Coast, the Southeast, the
Southwest, Canada and Mexico. Export and import traffic is moved through Gulf
Coast and Pacific Coast ports and across Mexican and, primarily through
interline connections, Canadian borders. Major commodities hauled by UPRR are
agricultural, automotive, chemicals, energy (primarily coal), industrial
products and intermodal.
Since 1995, we have significantly expanded our rail operations, completing
acquisitions of Chicago and North Western Transportation Company and Southern
Pacific Transportation Company and their respective affiliated railroads.
Currently, UPRR holds a 26% ownership interest in a 50-year concession for the
Pacific North and Chihuahua Pacific rail lines in Mexico.
Trucking
Overnite, a major interstate trucking company specializing in
less-than-truckload shipments, serves all 50 states and portions of Canada and
Mexico through 167 service centers located throughout the United States.
Overnite transports a variety of products, including machinery, tobacco,
textiles, plastics, electronics and paper products.
Executive Offices
Our executive offices are located at 1416 Dodge Street, Omaha, Nebraska
68179, and our telephone number is (402) 271-5777.
FORWARD-LOOKING STATEMENTS
This prospectus, including documents incorporated by reference, contains
forwarding-looking statements as defined by the Securities Act of 1933 and the
Securities Exchange Act of 1934. These forward-looking statements include,
without limitation, statements regarding: expectations as to operational
improvements; expectations as to cost savings, revenue growth and earnings; the
time by which certain objectives will be achieved; estimates of costs relating
to environmental remediation and restoration; proposed new products and
services; expectations that claims, lawsuits, environmental costs, commitments,
contingent liabilities, labor negotiations or agreements, or other matters will
not have a material adverse effect on our consolidated financial position,
results of operations or liquidity; and statements concerning projections,
predictions,
2
expectations, estimates or forecasts as to our financial and operational
results, and future economic performance, statements of management's goals and
objectives and other similar expressions concerning matters that are not
historical facts.
Forward-looking statements should not be read as a guarantee of future
performance or results, and will not necessarily be accurate indications of the
times at, or by which, such performance or results will be achieved.
Forward-looking information is based on information available at the time
and/or management's good faith belief with respect to future events, and is
subject to risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in the statements.
Important factors that could cause such differences include, but are not
limited to, whether we are fully successful in implementing our financial and
operational initiatives; industry competition, conditions, performance and
consolidation; legislative and/or regulatory developments, including possible
enactment of initiatives to re-regulate the rail business; natural events such
as severe weather, flood and earthquakes; the effects of adverse general
economic conditions, both within the United States and globally; changes in
fuel prices; changes in labor costs; labor stoppages; and the outcome of claims
and litigation.
Forward-looking statements speak only as of the date the statement was made.
We assume no obligation to update forward-looking information to reflect actual
results, changes in assumptions or changes in other factors affecting
forward-looking information. If we update one or more forward-looking
statements, no inference should be drawn that we will make additional updates
with respect thereto or with respect to other forward-looking statements.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows the ratio of earnings to fixed charges on a
historical basis for each of the five years ended December 31, 2000 and the
three months ended March 31, 2001. The Company does not have any preferred
stock outstanding. Accordingly, the ratio of earnings to combined fixed charges
and preferred stock dividends is the same as the ratio of earnings to fixed
charges.
Three months
Year Ended December 31, ended March 31,
1996 1997 1998(a) 1999 2000 2001
---- ---- ------- ---- ---- ---------------
Ratio of earnings to fixed charges 2.7 1.8 0.2 2.3 2.5 2.4
--------
(a) For the fiscal year ended December 31, 1998, fixed charges exceeded
earnings by approximately $740 million. Excluding the impact of a one-time
goodwill charge of $547 million pre- and after-tax in 1998, the ratio of
earnings to fixed charges would have been 0.8.
The ratio of earnings to fixed charges has been computed on a consolidated
basis. Earnings represent income before the cumulative effect of accounting
changes, less equity in undistributed earnings of unconsolidated affiliates,
plus fixed charges based on income. Fixed charges represent interest charges,
amortization of debt discount and the estimated amount representing the
interest factor for rents.
USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement, the net proceeds from
the sale of the securities offered by this prospectus will be used for general
corporate purposes, including repayment of borrowings, working capital, capital
expenditures, stock repurchase programs and acquisitions. Additional
information on the use of net proceeds from the sale of offered securities will
be described in a prospectus supplement relating to those securities.
3
DESCRIPTION OF DEBT SECURITIES
This section describes the general terms of the debt securities to which any
prospectus supplement may relate. A prospectus supplement will describe the
terms relating to any debt securities to be offered in greater detail, and may
provide information that is different from this prospectus. If the information
in the prospectus supplement with respect to the particular debt securities
being offered differs from this prospectus, you should rely on the information
in the prospectus supplement.
The debt securities will be issued under one or more indentures. We have
entered into separate indentures with each of Citibank, N.A., as trustee, and
The Chase Manhattan Bank, as trustee. Copies of those indentures have been
filed as exhibits to the registration statement. Alternatively, we may choose
another trustee, who will be identified in a prospectus supplement relating to
the particular debt securities being offered.
Summaries of some of the provisions of the indentures follow. The particular
provisions of the indentures and terms defined in the indentures referred to
below are incorporated by reference in this prospectus. Capitalized terms used
in this section and not defined have the definitions given to them in the
indentures.
General
The debt securities may be either senior securities or subordinated
securities, and will be unsecured unless the Company is required to secure the
debt securities as described below under "Covenants." The indentures permit an
unlimited amount of debt securities, and debt securities may be issued up to
the aggregate principal amount which may be authorized from time to time by the
board of directors. (Section 301) Debt securities will be issued from time to
time and offered on terms determined by market conditions at the time of sale.
Senior securities will be unsecured and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. Subordinated
securities will be unsecured and will be subordinated and junior to all "senior
indebtedness," which for this purpose includes any senior securities, to the
extent provided in the applicable supplemental indenture and described in the
prospectus supplement relating to that series.
The debt securities may be issued in one or more series with the same or
various maturities at par, at a premium or at a discount. Any debt securities
bearing no interest or interest at a rate which at the time of issuance is
below market rates will be sold at a discount, which may be substantial, from
their stated principal amount. Federal income tax consequences and other
special considerations applicable to any such substantially discounted debt
securities will be described in the related prospectus supplement.
You should refer to the prospectus supplement relating to the debt
securities to be offered for the following terms of the debt securities:
. The designation, aggregate principal amount and authorized denominations
of such debt securities;
. The percentage of their principal amount at which such debt securities
will be issued;
. The date or dates on which the debt securities will mature;
. The rate or rates, which may be fixed or floating, per annum at which
the debt securities will bear interest, if any, or the method of
determining such rate or rates;
. The date or dates on which any such interest will be payable, the date
or dates on which payment of any such interest will commence and the
Regular Record Dates for such Interest Payment Dates;
. Whether such debt securities are senior securities or subordinated
securities;
. The terms of any mandatory or optional redemption or repayment option,
including any provisions for any sinking, purchase or other analogous
fund;
. The currency, currencies or currency units for which the debt securities
may be purchased and the currency, currencies or currency units in which
the principal thereof, any premium thereon and any interest thereon may
be payable;
4
. If the currency, currencies or currency units for which the debt
securities may be purchased or in which the principal thereof, any
premium thereon and any interest thereon may be payable is at the
election of the Company or the purchaser, the manner in which such
election may be made;
. If the amount of payments on the debt securities is determined with
reference to an index based on one or more currencies or currency units,
changes in the price of one or more securities or changes in the price
of one or more commodities, the manner in which such amounts may be
determined;
. The extent to which any of the debt securities will be issuable in
temporary or permanent global form, or the manner in which any interest
payable on a temporary or permanent global security will be paid;
. The terms and conditions upon which conversion or exchange of the debt
securities into or for common stock, preferred stock or other debt
securities will be effected, including the conversion price or exchange
ratio, the conversion or exchange period and any other conversion or
exchange provisions;
. Information with respect to book-entry procedures, if any;
. A discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations with respect to the debt
securities; and
. Any other specific terms of the debt securities not inconsistent with
the applicable indenture.
If any of the debt securities are sold for one or more foreign currencies or
foreign currency units or if the principal of, premium, if any, or any interest
on any series of debt securities is payable in one or more foreign currencies
or foreign currency units, the restrictions, elections, Federal income tax
consequences, specific terms and other information with respect to such issue
of debt securities and such currencies or currency units will be described in
the related prospectus supplement.
Unless otherwise specified in the prospectus supplement, the principal of,
any premium on, and any interest on the debt securities will be payable, and
the debt securities will be transferable, at the corporate trust office of the
trustee in New York, New York, provided that payment of interest, if any, may
be made at the option of the Company by check mailed on or before the payment
date, first class mail, to the address of the person entitled thereto as it
appears on the registry books of the Company or its agent.
Unless otherwise specified in the prospectus supplement, the debt securities
will be issued only in fully registered form and in denominations of $1,000 and
any integral multiple thereof. (Sections 301 and 302) No service charge will be
made for any transfer or exchange of any debt securities, but the Company may,
except in certain specified cases not involving any transfer, require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith. (Section 305)
Global Securities
The debt securities of a series may be issued, in whole or in part, in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary identified in the prospectus supplement relating to such
series. Global securities may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole
or in part for the individual debt securities represented thereby, a global
security may not be transferred except as a whole by the depositary for such
global security to a nominee of such depositary or by a nominee of such
depositary to such depositary or another nominee of such depositary or by the
depositary or any nominee of such depositary to a successor depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
debt securities will be described in the related prospectus supplement. We
anticipate that the following provisions will generally apply to depositary
arrangements.
5
Upon the issuance of a global security, the depositary for such global
security or its nominee will credit, on its book entry registration and
transfer system, the respective principal amounts of the individual debt
securities represented by such global security to the accounts of persons that
have accounts with such depositary. Such accounts shall be designated by the
dealers, underwriters or agents with respect to such debt securities or by the
Company if such debt securities are offered and sold directly by the Company.
Ownership of beneficial interests in a global security will be limited to
persons that have accounts with the applicable depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such global security will be shown on, and the transfer of that
ownership will be effected only through records maintained by the applicable
depositary or its nominee, with respect to interests of participants, and the
records of participants, with respect to interests of persons other than
participants. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a global security.
So long as the depositary for a global security, or its nominee, is the
registered owner of such global security, such depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by such global security for all purposes under the
applicable indenture. Except as provided below, owners of beneficial interests
in a global security will not be entitled to have any of the individual debt
securities of the series represented by such global security registered in
their names, will not receive or be entitled to receive physical delivery of
any such debt securities of such series in definitive form and will not be
considered the owners or holders thereof under the applicable indenture
governing such debt securities.
Payments of principal of, any premium on, and any interest on, individual
debt securities represented by a global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee, as the
case may be, as the registered owner of the global security representing such
debt securities. Neither the Company, the trustee for such debt securities, any
paying agent, nor the security registrar for such debt securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the global
security for such debt securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the depositary for a series of debt securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent global security representing any of such debt
securities, immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such global security for such debt securities as shown on the records
of such depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such global security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." Such payments will
be the responsibility of such participants.
If the depositary for a series of debt securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will issue individual
debt securities of such series in exchange for the global security representing
such series of debt securities. In addition, the Company may at any time and in
its sole discretion, subject to any limitations described in the prospectus
supplement relating to such debt securities, determine not to have any debt
securities of a series represented by one or more global securities and, in
such event, will issue individual debt securities of such series in exchange
for the global security or securities representing such series of debt
securities. Further, if the Company so specifies with respect to the debt
securities of a series, an owner of a beneficial interest in a global security
representing debt securities of such series may, on terms acceptable to the
Company, the trustee and the depositary for such global security, receive
individual debt securities of such series in exchange for such beneficial
interests, subject to any limitations described in the prospectus supplement
relating to such debt securities. In any such instance, an owner of a
beneficial interest in a global security will be entitled to physical delivery
of individual debt securities of the series represented by such global security
equal in principal amount
6
to such beneficial interest and to have such debt securities registered in its
name. Individual debt securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and
integral multiples thereof.
Senior Securities
The senior securities will be direct, unsecured obligations of the Company,
and will constitute senior indebtedness (in each case as defined in the
applicable supplemental indenture) ranking on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
Subordinated Securities
The subordinated securities will be direct, unsecured obligations of the
Company. The obligations of the Company pursuant to the subordinated securities
will be subordinate in right of payment to the extent set forth in the
applicable indenture and the applicable supplemental indenture to all senior
securities (in each case as defined in the applicable supplemental indenture).
Except to the extent otherwise set forth in a prospectus supplement, the
indentures do not contain any restriction on the amount of senior indebtedness
which the Company may incur.
The terms of the subordination of a series of subordinated securities,
together with the definition of senior indebtedness related thereto, will be as
set forth in the applicable supplemental indenture and the prospectus
supplement relating to such series.
The subordinated securities will not be subordinated to indebtedness of the
Company which is not senior indebtedness, and the creditors of the Company who
do not hold senior indebtedness will not benefit from the subordination
provisions described herein. In the event of the bankruptcy or insolvency of
the Company before or after maturity of the subordinated securities, such other
creditors would rank pari passu with holders of the subordinated securities,
subject, however, to the broad equity powers of the Federal bankruptcy court
pursuant to which such court may, among other things, reclassify the claims of
any series of subordinated securities into a class of claims having a different
relative priority with respect to the claims of such other creditors or any
other claims against the Company.
Definitions
Some of the terms defined in Section 101 of the indentures are summarized
below.
"Debt" means indebtedness for money borrowed.
"Domestic Subsidiary" means a Subsidiary incorporated or conducting its
principal operations within the United States or any State thereof.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or security
interest of any kind.
"Subsidiary," when used with respect to the Company, means any corporation
of which a majority of the outstanding voting stock is owned, directly or
indirectly, by the Company or by one or more of its other Subsidiaries, or both.
Covenants
The indentures contain certain covenants, including the limitation on liens
covenant summarized below which will be applicable, unless waived or amended,
so long as any of the debt securities are outstanding, unless stated otherwise
in the prospectus supplement.
Limitation on Liens. The Company will not, nor will it permit any
Subsidiary to, create, assume, incur or suffer to exist any Mortgage upon any
stock or indebtedness, whether owned on the date of the applicable
7
indenture or thereafter acquired, of any Domestic Subsidiary, to secure any
Debt of the Company or any other person (other than the debt securities),
without in any such case making effective provision whereby all the outstanding
debt securities shall be directly secured equally and ratably with such Debt.
There will be excluded from this restriction any Mortgage upon stock or
indebtedness of a corporation existing at the time such corporation becomes a
Domestic Subsidiary or at the time stock or indebtedness of a Domestic
Subsidiary is acquired and any extension, renewal or replacement of any such
Mortgage. (Section 1006)
Consolidation, Merger, Sale or Conveyance
The indentures provide that the Company may not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any person, unless:
. The successor is a corporation organized and existing under the laws of
the United States or any state thereof or the District of Columbia, and
expressly assumes by a supplemental indenture the due and punctual
payment of the principal of, any premium on, and any interest on, all
the outstanding debt securities and the performance of every covenant in
the applicable indenture on the part of the Company to be performed or
observed;
. Immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing;
and
. The Company delivers to the trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with the
foregoing provisions relating to such transaction.
(Section 801) In case of any such consolidation, merger, conveyance or
transfer, such successor corporation will succeed to and be substituted for the
Company as obligor on the debt securities, with the same effect as if it had
been named in the applicable indenture as the Company. (Section 802) Other than
the restrictions on Mortgages described above, the indentures and the debt
securities do not contain any covenants or other provisions designed to protect
holders of debt securities in the event of a highly leveraged transaction
involving the Company or any Subsidiary.
Events of Default; Waiver and Notice Thereof; Debt Securities in Foreign
Currencies
As to any series of debt securities, an Event of Default is defined in the
indentures as:
1. Default for 30 days in payment of any interest on the debt securities
of such series;
2. Default in payment of principal of or any premium on the debt
securities of such series at maturity;
3. Default in payment of any sinking or purchase fund or analogous
obligation, if any, on the debt securities of such series;
4. Default by the Company in the performance of any other covenant or
warranty contained in the applicable indenture for the benefit of such
series which shall not have been remedied for a period of 90 days after
notice is given as specified in the applicable indenture; and
5. Certain events of bankruptcy, insolvency and reorganization of the
Company.
(Section 501) A default under other indebtedness of the Company will not be a
default under the indentures and a default under one series of debt securities
will not necessarily be a default under another series. Any additions,
deletions or other changes to the Events of Default which will be applicable to
a series of debt securities will be described in the prospectus supplement
relating to such series of debt securities.
The indentures provide that if an Event of Default described in clause (1),
(2), (3) or (4) above (if the Event of Default under clause (4) is with respect
to less than all series of debt securities then outstanding) shall have
8
occurred and be continuing with respect to any series, either the trustee or
the holders of not less than 25% in aggregate principal amount of the debt
securities of such series then outstanding (each such series acting as a
separate class) may declare the principal (or, in the case of Original Issue
Discount Securities, the portion thereof specified in the terms thereof) of all
outstanding debt securities of such series and the interest accrued thereon, if
any, to be due and payable immediately. The indentures provide that if an Event
of Default described in clause (4) or (5) above (if the Event of Default under
clause (4) is with respect to all series of debt securities then outstanding)
shall have occurred and be continuing, either the trustee or the holders of at
least 25% in aggregate principal amount of all debt securities then
outstanding, treated as one class, may declare the principal (or, in the case
of Original Issue Discount Securities, the portion thereof specified in the
terms thereof) of all debt securities then outstanding and the interest accrued
thereon, if any, to be due and payable immediately. Upon certain conditions,
such declarations may be annulled and past defaults (except for defaults in the
payment of principal of, any premium on, or any interest on, such debt
securities and in compliance with certain covenants) may be waived by the
holders of at least a majority in aggregate principal amount of the debt
securities of such series then outstanding on behalf of the holders of all debt
securities. (Sections 502 and 513)
Under the indentures, the trustee must give to the holders of each series of
debt securities notice of all uncured defaults known to it with respect to such
series within 90 days after such a default occurs (the term default to include
the events specified above without notice or grace periods). However, except in
the case of default in the payment of principal of, any premium on, or any
interest on, any of the debt securities, or default in the payment of any
sinking or purchase fund installment or analogous obligations, the trustee
shall be protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interests of the holders of the
debt securities of such series. (Section 602)
No holder of any debt securities of any series may institute any action
under the applicable indenture unless:
. Such holder shall have given the trustee written notice of a continuing
Event of Default with respect to such series;
. The holders of not less than 25% in aggregate principal amount of the
debt securities of such series then outstanding shall have requested the
trustee to institute proceedings in respect of such Event of Default;
. Such holder or holders shall have offered the trustee such reasonable
indemnity as the trustee may require;
. The trustee shall have failed to institute an action for 60 days
thereafter, and
. No inconsistent direction shall have been given to the trustee during
such 60-day period by the holders of a majority in aggregate principal
amount of debt securities of such series. (Section 507)
The holders of a majority in aggregate principal amount of the debt
securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to such series of debt
securities. (Section 512) The indentures provide that, in case an Event of
Default shall occur and be continuing, the trustee, in exercising its rights
and powers under the applicable indenture, will be required to use the degree
of care of a prudent man in the conduct of his own affairs. (Section 601) The
indentures further provide that the trustee shall not be required to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under the applicable indenture unless it has
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is reasonably assured to it. (Section
601)
The Company must furnish to the trustee within 120 days after the end of
each fiscal year a statement signed by one of certain officers of the Company
stating that a review of the activities of the Company during such year and of
its performance under the applicable indenture and the terms of the debt
securities has been made, and, to
9
the best of the knowledge of the signatory based on such review, the Company
has complied with all conditions and covenants of the applicable indenture or,
if the Company is in default, specifying such default. (Section 1004)
If any debt securities are denominated in a coin or currency other than that
of the United States, then for the purposes of determining whether the holders
of the requisite principal amount of debt securities have taken any action as
herein described, the principal amount of such debt securities shall be deemed
to be that amount of United States dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange into United States
dollars for the currency in which such debt securities are denominated (as
evidenced to the trustee by an Officers' Certificate) as of the date the taking
of such action by the holders of such requisite principal amount is evidenced
to the trustee as provided in the indentures. (Section 104)
If any debt securities are Original Issue Discount Securities, then for the
purposes of determining whether the holders of the requisite principal amount
of debt securities have taken any action herein described, the principal amount
of such debt securities shall be deemed to be the portion of such principal
amount that would be due and payable at the time of the taking of such action
upon a declaration of acceleration of maturity thereof. (Section 101)
Modification of the Indentures
The Company and the trustee may, without the consent of the holders of the
debt securities (provided that in the case of clauses (2), (3), (4) and (6),
the interests of the holders of debt securities would not be adversely
affected), enter into one or more supplemental indentures for, among others,
one or more of the purposes listed below:
1. To evidence the succession of another corporation to the Company, and
the assumption by such successor of the Company's obligations under the
applicable indenture and the debt securities of any series;
2. To add covenants of the Company, or surrender any rights of the
Company, conferred by the applicable indenture, for the benefit of the
holders of debt securities of any or all series;
3. To cure any ambiguity, omission, defect or inconsistency in or make
any other provision with respect to questions arising under the applicable
indenture.
4. To establish the form or terms of any series of debt securities,
including any subordinated securities;
5. To evidence and provide for the acceptance of any successor trustee
with respect to one or more series of debt securities or to facilitate the
administration of the trusts thereunder by one or more trustees in
accordance with the applicable indenture; and
6. To provide any additional Events of Default. (Section 901)
The indentures or the rights of the holders of the debt securities may be
modified by the Company and the trustee with the consent of the holders of a
majority in aggregate principal amount of the debt securities of each series
affected by such modification then outstanding, but no such modification may be
made without the consent of the holder of each outstanding debt security
affected thereby which would:
. Change the maturity of any payment of principal of, or any premium on,
or any installment of interest on any debt security, or reduce the
principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or
interest thereon on any date or change any place of payment where, or
the coin or currency in which, any debt security or any premium or
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the maturity thereof,
or, in the case of redemption or repayment, on or after the redemption
date or the repayment date, as the case may be;
10
. Reduce the percentage in principal amount of the outstanding debt
securities of any series, the consent of whose holders is required for
any such modification, or the consent of whose holders is required for
any waiver of compliance with certain provisions of the applicable
indenture or certain defaults thereunder and their consequences provided
for in the applicable indenture; or
. Modify any of the provisions of certain sections of the applicable
indenture, including the provisions summarized in this paragraph, except
to increase any such percentage or to provide that certain other
provisions of the applicable indenture cannot be modified or waived
without the consent of the holder of each outstanding debt security
affected thereby. (Section 902)
Defeasance of the Indentures and Debt Securities
If the terms of any series of debt securities so provide, the Company will
be deemed to have paid and discharged the entire indebtedness on all the
outstanding debt securities of such series by, in addition to meeting certain
other conditions, depositing with the trustee either:
(1) As trust funds in trust an amount sufficient to pay and discharge the
entire indebtedness on all debt securities of such series for principal,
premium, if any, and interest; or
(2) As obligations in trust such amount of direct obligations of, or
obligations the principal of and interest on which are fully guaranteed by,
the government which issued the currency in which the debt securities are
denominated as will, together with the income to accrue thereon without
consideration of any reinvestment thereof, be sufficient to pay and
discharge the entire indebtedness on all such debt securities for principal,
premium, if any, and interest, and satisfying certain other conditions
precedent specified in the applicable indenture.
(Section 403) In the event of any such defeasance, holders of such debt
securities would be able to look only to such trust fund for payment of
principal of, any premium on, and any interest on their debt securities.
A defeasance is likely to be treated as a taxable exchange by holders of the
relevant debt securities for an issue consisting of either obligations of the
trust or a direct interest in the cash and securities held in the trust, with
the result that such holders would be required for tax purposes to recognize
gain or loss as if such obligations or the cash or securities deposited, as the
case may be, had actually been received by them in exchange for their debt
securities. In addition, if the holders are treated as the owners of their
proportionate share of the cash or securities held in trust, such holders would
then be required to include in their income for tax purposes any income, gain
or loss attributable thereto even though no cash was actually received. Thus,
such holders might be required to recognize income for tax purposes in
different amounts and at different times than would be recognized in the
absence of defeasance. Prospective investors are urged to consult their own tax
advisors as to the specific consequences of defeasance.
Concerning the Trustees
Citibank, N.A. and The Chase Manhattan Bank conduct normal banking
relationships with us and certain of our subsidiaries and, in addition, are
participants in various financial agreements of the Company. Citibank, N.A. and
The Chase Manhattan Bank act as trustee under certain equipment trust
agreements of UPRR and trustee under various indentures in respect of certain
securities of the Company and our subsidiaries' securities.
DESCRIPTION OF PREFERRED STOCK
This section describes the general terms of the preferred stock to which any
prospectus supplement may relate. A prospectus supplement will describe the
terms relating to any preferred stock to be offered in greater detail, and may
provide information that is different from this prospectus. If the information
in the prospectus supplement with respect to the particular preferred stock
being offered differs from this prospectus, you should rely on the information
in the prospectus supplement.
11
Summaries of some of the provisions of our revised articles of incorporation
follow. A copy of the revised articles of incorporation has been filed as an
exhibit to the registration statement. A certificate of amendment to the
revised articles of incorporation will specify the terms of the preferred stock
being offered, and will be filed as an exhibit to the registration statement or
incorporated by reference before the preferred stock is issued.
The revised articles of incorporation authorize us to issue up to 20,000,000
shares of preferred stock, without par value. No shares of preferred stock are
currently outstanding, and no shares are reserved for issuance. The board of
directors is authorized to issue preferred stock in one or more series from
time to time, with such designations, preferences and relative participating,
optional or other special rights and qualifications, limitations and
restrictions thereof, as may be provided in resolutions adopted by the board of
directors. All shares of any one series of preferred stock will be identical,
except that shares of any one series issued at different times may differ as to
the dates from which dividends may be cumulative. All series shall rank equally
and shall provide for other terms as described in the applicable prospectus
supplement.
Preferred stock of a particular series will have the dividend, liquidation,
redemption, conversion and voting rights described below unless otherwise
provided in the prospectus supplement relating to that series. You should refer
to the prospectus supplement relating to preferred stock being offered for a
description of specific terms, including:
. The distinctive serial designation and the number of shares constituting
the series;
. The dividend rate or rates, the payment date or dates for dividends and
the participating or other special rights, if any, with respect to
dividends;
. Any redemption, sinking or retirement fund provisions applicable to the
preferred stock;
. The amount or amounts payable upon the shares of preferred stock in the
event of voluntary or involuntary liquidation, dissolution or winding up
of the Company prior to any payment or distribution of the assets of the
Company to the holders of any class or classes of stock which are junior
in rank to the preferred stock; and
. Any terms for the conversion into or exchange for shares of common
stock, shares of preferred stock or debt securities.
The term "class or classes of stock which are junior in rank to the
preferred stock" means the Company's common stock, and any other class or
classes of stock of the Company hereafter authorized which rank junior to the
preferred stock as to dividends or upon liquidation.
Dividends
Holders of preferred stock will be entitled to receive, when, as and if
declared by the board of directors out of funds of the Company legally
available therefor, cash dividends payable on such dates in March, June,
September and December of each year and at such rates per share per annum as
set forth in the applicable prospectus supplement. The prospectus supplement
will also indicate the applicable record dates regarding the payment of
dividends. The holders of preferred stock will be entitled to such cash
dividends before any dividends on any class of stock junior in rank to
preferred stock shall be declared or paid or set apart for payment. Whenever
dividends shall not have been so paid or declared or set apart for payment upon
all shares of each series of preferred stock, such dividends shall be
cumulative and shall be paid, or declared and set apart for payment, before any
dividends can be declared or paid on any class or classes of stock of the
Company junior in rank to the preferred stock. Any such accumulations of
dividends on preferred stock shall not bear interest. The foregoing shall not
apply to dividends payable in shares of any class or classes of stock junior in
rank to the preferred stock.
Convertibility
No series of preferred stock will be convertible into, or exchangeable for,
shares of common stock, shares of preferred stock or any other class or classes
of stock of the Company or debt securities except as set forth in the related
prospectus supplement.
12
Redemption and Sinking Fund
No series of preferred stock will be redeemable or receive the benefit of a
sinking, retirement or other analogous fund except as set forth in the related
prospectus supplement.
Liquidation Rights
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of any series of preferred stock will be entitled to
receive payment of or to have set aside for payment the liquidation amount per
share, if any, specified in the related prospectus supplement, in each case
together with any applicable accrued and unpaid dividends, before any
distribution to holders of common stock or any class of stock junior in rank to
the preferred stock. A voluntary sale, lease, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially all
of the Company's property or assets to, or a consolidation or merger of the
Company with, one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up of the Company for purposes of this paragraph.
Voting Rights
Except as provided below, holders of preferred stock shall be entitled to
one vote for each share held and shall vote together with the holders of common
stock as one class for the election of directors and upon all other matters
which may be voted upon by stockholders of the Company. Holders of preferred
stock shall not possess cumulative voting rights in the election of directors.
See "Description of Common Stock--Voting Rights" for a discussion of voting
rights in the election of directors.
If dividends on the preferred stock shall be in arrears in an aggregate
amount at least equal to six quarterly dividends, then the holders of all
series of preferred stock, voting separately as one class, shall be less
entitled, at the next annual meeting of the stockholders of the Company or at a
special meeting held in place thereof, or at a special meeting of the holders
of the preferred stock called as provided below, to elect two directors of the
Company. While the holders of preferred stock are so entitled to elect two
directors of the Company, they shall not be entitled to participate with the
common stock in the election of any other such directors. Whenever all
arrearages in dividends on the preferred stock shall have been paid and
dividends thereon for the current quarterly period shall have been paid or
declared and a sum sufficient for the payment thereof set aside, then the right
of the holders of the preferred stock to elect two directors shall cease,
provided that such voting rights shall again vest in the case of any similar
future arrearages in dividends.
At any time after the right to vote for two directors shall have so vested
in the preferred stock, the secretary of the Company may, and upon the written
request of the holders of record of 10% or more of the shares of preferred
stock then outstanding, shall, call a special meeting of the holders of the
preferred stock for the election of the directors to be elected by them, to be
held within 30 days after such call and at the place and upon the notice
provided by law and in the Company's by-laws for the holding of meetings of
stockholders. The secretary shall not be required to call such meeting in the
case of any such request received less than 90 days before the date fixed for
any annual meeting of stockholders of the Company. If any such special meeting
shall not be called by the secretary within 30 days after receipt of any such
request, then the holders of record of 10% or more of the shares of preferred
stock then outstanding may designate in writing one of their number to call
such meeting, and the person so designated may call such meeting to be held at
the place and upon the notice provided above, and for that purpose shall have
access to the stock ledger of the Company. No such special meeting and no
adjournment thereof shall be held on a date later than 30 days before the
annual meeting of the stockholders of the Company or a special meeting held in
place thereof next succeeding the time when the holders of the preferred stock
become entitled to elect directors as provided above.
If any meeting of the Company's stockholders shall be held while holders of
preferred stock are entitled to elect two directors as provided above, and if
the holders of at least a majority of the shares of preferred stock then
outstanding shall be present or represented by proxy at such meeting or any
adjournment thereof, then, by vote of
13
the holders of at least a majority of the shares of preferred stock present or
so represented at such meeting, the then authorized number of directors of the
Company shall be increased by two and at such meeting the holders of the
preferred stock shall be entitled to elect the additional directors so provided
for, but such additional director so elected shall hold office beyond the
annual meeting of the stockholders or a special meeting held in place thereof
next succeeding the time when the holders of the preferred stock become
entitled to elect two directors as provided above. Whenever the holders of the
preferred stock shall be divested of special voting power as provided above,
the terms of office of all persons elected as directors by the holders of the
preferred stock as a class shall forthwith terminate, and the authorized number
of directors of the Company shall be reduced accordingly.
The affirmative vote or consent of 66 2/3% of all shares of preferred stock
outstanding shall be required before the Company may:
. Create any other class or classes of stock prior in rank to the
preferred stock, either as to dividends or upon liquidation, or increase
the number of authorized shares of such class of stock; or
. Amend, alter or repeal any provisions of the Company's revised articles
of resolution adopted by the board of directors providing for the
issuance of any series of preferred stock so as to adversely affect the
preferences, rights or powers of the preferred stock.
The affirmative vote or consent of at least a majority of the shares of
preferred stock at the time outstanding shall be required for the Company to:
. Increase the authorized number of shares of preferred stock;
. Create or increase the authorized number of shares of any other class of
stock ranking on a parity with the preferred stock either as to
dividends or upon liquidation; or
. Sell, lease or convey all or substantially all of the property or
business of the Company, or voluntarily liquidate, dissolve or wind up
the Company, or merge or consolidate the Company with any other
corporation unless the resulting or surviving corporation will have
after such merger or consolidation no stock either authorized or
outstanding (except such stock of the corporation as may have been
authorized or outstanding immediately preceding such merger or
consolidation, or such stock of the resulting or surviving corporation
as may be issued in exchange therefor) prior in rank either as to
dividends or upon liquidation to the preferred stock or the stock of the
resulting or surviving corporation issued in exchange therefor.
No consent of the holders of preferred stock shall be required in connection
with any mortgaging or other hypothecation by the Company of all or any part of
its property or business.
Transactions with Ten Percent Stockholders
The Company's revised articles of incorporation provide that certain
transactions between the Company and a beneficial owner of more than 10% of the
Company's voting stock (which includes preferred stock) must either:
. Be approved by a majority of the Company's voting stock other than that
held by such beneficial owner;
. Satisfy minimum price and procedural criteria; or
. Be approved by a majority of the Company's directors who are not related
to such beneficial owner.
The transactions covered by these provisions include mergers,
consolidations, sales or dispositions of assets, adoption of a plan of
liquidation or dissolution, or other transactions involving a beneficial owner
of more than 10% of the Company's voting stock.
14
Miscellaneous
The preferred stock offered hereby has no preemptive rights, is not liable
for further assessments or calls and will be fully paid and non-assessable upon
issuance. Shares of preferred stock which have been issued and reacquired in
any manner by the Company shall resume the status of authorized and unissued
shares of preferred stock and shall be available for subsequent issuance. There
are no restrictions on repurchase or redemption of the preferred stock while
there is any arrearage in dividends or sinking fund installments except as may
be set forth in the related prospectus supplement.
Transfer Agent and Registrar
The transfer agent and registrar for each series of preferred stock will be
described in the related prospectus supplement.
DESCRIPTION OF COMMON STOCK
This section describes the general terms of the common stock. A copy of our
revised articles of incorporation has been filed as an exhibit to the
registration statement. The common stock and the rights of common stockholders
are subject to the applicable provisions of the Utah Revised Business
Corporation Act and the revised articles of incorporation. The Company is
presently authorized to issue 500,000,000 shares of common stock, par value
$2.50 per share. At May 31, 2001, an aggregate of 248,274,367 shares of common
stock were outstanding.
Dividends
Subject to the rights of holders of any preferred stock which may be issued,
the holders of common stock are entitled to receive dividends when, as and if
declared by the board of directors out of any legally available funds. The
Company may not pay dividends on common stock, other than dividends payable in
common stock or any other class or classes of stock junior in rank to the
preferred stock as to dividends or upon liquidation, unless all dividends
accrued on outstanding preferred stock have been paid or declared and set apart
for payment.
Voting Rights
Holders of common stock are entitled to one vote for each share held. Except
as provided in the related prospectus supplement, any series of preferred stock
will be entitled, with certain exceptions, to vote together with the holders of
common stock as one class for the election of directors and upon all matters
voted upon by shareholders. See "Description of Preferred Stock--Voting
Rights." In voting for the election of directors, holders of common stock shall
not have the right to cumulate their votes. Notwithstanding that stockholders
shall not be entitled to cumulate votes in the election of directors, no one of
the directors may be removed if the votes of a sufficient number of shares are
cast against removal which, at an election of the board of directors would have
been sufficient to elect the director if cumulative voting were applicable.
Liquidation Rights
Any preferred stock would be senior to the common stock as to distributions
upon liquidation, dissolution or winding up of the Company. After distribution
in full of the preferential amounts to be distributed to holders of preferred
stock, holders of common stock will be entitled to receive all remaining assets
of the Company available for distribution to stockholders in the event of
voluntary or involuntary liquidation.
15
Transactions With Ten Percent Stockholders
The revised articles of incorporation provide for certain voting rights for
the holders of the Company's voting stock (including common stock) in the case
of certain transactions between the Company and a beneficial owner of more than
10% of the Company's voting stock. See "Description of Preferred
Stock--Transactions With Ten Percent Stockholders."
Miscellaneous
The common stock is not redeemable, has no preemptive or conversion rights
and is not liable for further assessments or calls. All shares of common stock
offered hereby will be fully paid and non-assessable.
Transfer Agent and Registrar
Computershare Trust Company of New York is the transfer agent and registrar
for the common stock. The common stock is listed on the New York Stock Exchange.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue securities warrants for the purchase of debt
securities or preferred stock. Securities warrants may be issued independently
or together with any debt securities or shares of preferred stock offered by
any prospectus supplement and may be attached to or separate from such debt
securities or shares of preferred stock. The securities warrants are to be
issued under warrant agreements to be entered into between the Company and
Citibank, N.A. or The Chase Manhattan Bank, as warrant agent, or such other
bank or trust company as is named in the prospectus supplement relating to the
particular issue of securities warrants. The warrant agent will act solely as
an agent of the Company in connection with the securities warrants and will not
assume any obligation or relationship of agency or trust for or with any
holders of securities warrants or beneficial owners of securities warrants. The
following summaries of certain provisions of the form of warrant agreement and
securities warrants do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
applicable warrant agreement and the securities warrants.
General
If securities warrants are offered, the prospectus supplement will describe
the terms of the securities warrants, including the following if applicable to
the particular offering:
. The offering price;
. The currency, currencies or currency units for which securities warrants
may be purchased;
. The designation, aggregate principal amount, currency, currencies or
currency units and terms of the debt securities purchasable upon
exercise of the warrants and the price at which such debt securities may
be purchased upon such exercise;
. The designation, number of shares and terms of the series of preferred
stock purchasable upon exercise of the securities warrants to purchase
preferred stock and the price at which such shares of preferred stock
may be purchased upon such exercise;
. The designation and terms of the debt securities or preferred stock with
which the securities warrants are issued and the number of securities
warrants issued with each such debt security or share of preferred stock;
. The date on and after which the securities warrants and the related debt
securities or preferred stock will be separately transferable;
16
. The date on which the right to exercise the securities warrants shall
commence and the date (the "Expiration Date") on which such right shall
expire;
. Whether the securities warrants will be issued in registered or bearer
form;
. A discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations relating to the securities
warrants; and
. Any other terms of the securities warrants.
Securities warrants may be exchanged for new securities warrants of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the warrant agent or any other office indicated in the prospectus supplement.
Before the exercise of their securities warrants, holders of securities
warrants will not have any of the rights of holders of the debt securities or
shares of preferred stock purchasable upon such exercise, including the right
to receive payments of principal of, any premium on, or any interest on, the
debt securities purchasable upon such exercise or to enforce the covenants in
the indenture or to receive payments of dividends, if any, on the preferred
stock purchasable upon such exercise or to exercise any applicable right to
vote.
Exercise of Securities Warrants
Each securities warrant will entitle the holder to purchase such principal
amount of debt securities or such number of shares of preferred stock at such
exercise price as shall in each case be set forth in, or calculable from, the
prospectus supplement relating to the securities warrant. Securities warrants
may be exercised at such times as are set forth in the prospectus supplement
relating to such securities warrants. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised securities warrants will become void.
Subject to any restrictions and additional requirements that may be set forth
in the prospectus supplement relating thereto, securities warrants may be
exercised by delivery to the warrant agent of the certificate evidencing such
securities warrants properly completed and duly executed and of payment as
provided in the prospectus supplement of the amount required to purchase the
debt securities or shares of preferred stock purchasable upon such exercise.
The exercise price will be the price applicable on the date of payment in full,
as set forth in the prospectus supplement relating to the securities warrants.
Upon receipt of such payment and the certificate representing the securities
warrants to be exercised properly completed and duly executed at the corporate
trust office of the warrant agent or any other office indicated in the
prospectus supplement, the Company will, as soon as practicable, issue and
deliver the debt securities or shares of preferred stock purchasable upon such
exercise. If fewer than all of the securities warrants represented by such
certificate are exercised, a new certificate will be issued for the remaining
amount of securities warrants.
PLAN OF DISTRIBUTION
The Company may sell the securities offered by this prospectus through
underwriters or dealers, through agents, directly to purchasers, or through a
combination of any such methods of sale. Any such underwriter, dealer or agent
may be deemed to be an underwriter within the meaning of the Securities Act.
The prospectus supplement relating to the offered securities will set forth
their offering terms, including the name or names of any underwriters, dealers
or agents, the purchase price of the securities offered and the proceeds to the
Company from such sale, any underwriting discounts, commissions and other items
constituting compensation to underwriters, dealers or agents, any initial
public offering price, any discounts or concessions allowed or reallowed or
paid by underwriters or dealers to other dealers, and any securities exchanges
on which the offered securities may be listed.
If underwriters or dealers are used in the sale, the offered securities will
be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price
17
or prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The offered securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
prospectus supplement, the obligations of underwriters or dealers to purchase
the offered securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the offered
securities if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid by underwriters or
dealers to other dealers may be changed from time to time.
Offered securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the offered securities in respect of which this prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth in the prospectus supplement. Unless otherwise indicated in the
prospectus supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
If so indicated in the prospectus supplement, the Company will authorize
underwriters, dealers or agents to solicit offers by certain specified
institutions to purchase offered securities from the Company at the public
offering price set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject to any conditions set forth in the
prospectus supplement and the prospectus supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
by the Company to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will be described in an applicable
prospectus supplement. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for the Company in the
ordinary course of business.
Each series of offered securities other than common stock will be a new
issue of securities with no established trading market. Any underwriters to
whom offered securities are sold by the Company for public offering and sale
may make a market in such offered securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any offered securities.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids to do not exceed a specified maximum. The underwriters may
over-allot offered securities, thereby creating a short position in the
underwriters' account. Syndicate covering transactions involve purchases of
offered securities in the open market after the distribution has been completed
to cover syndicate short positions. Stabilizing and syndicate covering
transactions may cause the price of the offered securities to be higher than it
would otherwise be in the absence of such transactions. These transactions, if
commenced, may be discontinued at any time.
18
LEGAL OPINIONS
The validity of the offered securities will be passed upon for the Company
by James J. Theisen, Jr., Esquire, Senior Corporate Counsel of the Company, or
another senior corporate counsel designated by the Company, and for the
underwriters, dealers or agents, if any, by Cravath, Swaine & Moore, Worldwide
Plaza, 825 Eighth Avenue, New York, N.Y. 10019, unless otherwise specified in
the prospectus supplement. Mr. Theisen beneficially owns 625 shares of common
stock, including retention shares granted under the Company's 1993 Stock Option
and Retention Stock Plan, and holds options to purchase 2,100 additional shares
of the common stock. Cravath, Swaine & Moore has provided legal services from
time to time to the Company and its affiliates.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of the Company and its subsidiaries as of December 31, 2000 and 1999
and for each of the years in the three-year period ended December 31, 2000,
incorporated in this prospectus by reference from the Company's Annual Report
on Form 10-K for the year ended December 31, 2000, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
19
================================================================================
[LOGO] Union Pacific
Corporation
================================================================================