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Agreement of Merger, Dated May 15, 2005

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Sectors: Transportation
Governing Law: Delaware, View Delaware State Laws
Effective Date: May 15, 2005
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AGREEMENT OF MERGER
AMONG
UNITED PARCEL SERVICE, INC.,
OLYMPIC MERGER SUB, INC.
AND
OVERNITE CORPORATION
DATED AS OF MAY 15, 2005


AGREEMENT OF MERGER


TABLE OF CONTENTS


PAGE
---- ARTICLE I. DEFINITIONS......................................................... 1 SECTION 1.1..... Certain Definitions......................................... 1


ARTICLE II. THE MERGER......................................................... 7 SECTION 2.1. The Merger.................................................. 7 SECTION 2.2. Effective Time; Closing..................................... 7 SECTION 2.3. Effect of the Merger........................................ 7 SECTION 2.4. Conversion of Company Common Stock.......................... 7 SECTION 2.5. Surrender of Shares of Company Common Stock; Stock Transfer
Books....................................................... 8 SECTION 2.6. Company Stock Awards........................................ 10


ARTICLE III. THE SURVIVING CORPORATION......................................... 11 SECTION 3.1. Articles of Incorporation................................... 11 SECTION 3.2. Bylaws...................................................... 11 SECTION 3.3. Directors and Officers...................................... 11


ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................... 11 SECTION 4.1. Organization and Standing................................... 11 SECTION 4.2. Authority for Agreement..................................... 11 SECTION 4.3. Capitalization.............................................. 12 SECTION 4.4. Subsidiaries................................................ 12 SECTION 4.5. No Conflict................................................. 13 SECTION 4.6. Required Filings and Consents............................... 13 SECTION 4.7. Compliance.................................................. 13 SECTION 4.8. Litigation.................................................. 14 SECTION 4.9. Reports; Financial Statements............................... 14 SECTION 4.10. Absence of Certain Changes or Events........................ 15 SECTION 4.11. Taxes....................................................... 15 SECTION 4.12. Title to Personal Property.................................. 16 SECTION 4.13. Real Property............................................... 16 SECTION 4.14. Environmental Compliance and Disclosure..................... 18 SECTION 4.15. Officers and Employees...................................... 19 SECTION 4.16. Employee Benefit Plans...................................... 19 SECTION 4.17. Labor Relations............................................. 21 SECTION 4.18. Contracts and Commitments................................... 22 SECTION 4.19. Proxy Statement, Etc. ...................................... 23 SECTION 4.20. Intellectual Property....................................... 23 SECTION 4.21. Insurance Policies.......................................... 24 SECTION 4.22. Notes Receivable............................................ 25 SECTION 4.23. Transactions with Affiliates................................ 25 SECTION 4.24. Customer and Supplier Relations............................. 25 SECTION 4.25. Ethical Practices........................................... 25 SECTION 4.26. Customs Matters............................................. 26 SECTION 4.27. Government Contracts........................................ 26


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PAGE
---- SECTION 4.28. No Existing Discussions..................................... 26 SECTION 4.29. Antitakeover Statutes....................................... 26 SECTION 4.30. Brokers..................................................... 27 SECTION 4.31. Vote Required............................................... 27


ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.................... 27 SECTION 5.1. Organization and Standing................................... 27 SECTION 5.2. Authority for Agreement..................................... 27 SECTION 5.3. No Conflict................................................. 27 SECTION 5.4. Required Filings and Consents............................... 28 SECTION 5.5. Information Supplied........................................ 28 SECTION 5.6. Brokers..................................................... 28 SECTION 5.7. Ownership of Sub............................................ 28


ARTICLE VI. COVENANTS.......................................................... 28 SECTION 6.1. Conduct of the Business Pending the Merger.................. 28 SECTION 6.2. Access to Information; Confidentiality...................... 30 SECTION 6.3. Notification of Certain Matters............................. 30 SECTION 6.4. Further Assurances.......................................... 30 SECTION 6.5. Board Recommendations....................................... 31 SECTION 6.6. Shareholder Litigation...................................... 32 SECTION 6.7. Indemnification............................................. 32 SECTION 6.8. Public Announcements........................................ 33 SECTION 6.9. Acquisition Proposals....................................... 33 SECTION 6.10. Shareholders' Meeting....................................... 34 SECTION 6.11. Proxy Statement............................................. 34 SECTION 6.12. Shareholder Lists........................................... 34 SECTION 6.13. Undertakings of Parent...................................... 34 SECTION 6.14. Director Resignations....................................... 34 SECTION 6.15. Company Stock Awards........................................ 35 SECTION 6.16. Employee Matters............................................ 35


ARTICLE VII. CONDITIONS........................................................ 36 SECTION 7.1. Conditions to the Obligation of Each Party.................. 36 SECTION 7.2. Conditions to Obligations of Parent and Sub to Effect the
Merger...................................................... 36 SECTION 7.3. Conditions to Obligations of the Company to Effect the
Merger...................................................... 37


ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER................................ 37 SECTION 8.1. Termination................................................. 37 SECTION 8.2. Effect of Termination....................................... 38 SECTION 8.3. Amendments.................................................. 39 SECTION 8.4. Waiver...................................................... 39


ARTICLE IX. GENERAL PROVISIONS................................................. 39 SECTION 9.1. No Third Party Beneficiaries................................ 39 SECTION 9.2. Entire Agreement............................................ 39 SECTION 9.3. Succession and Assignment................................... 40 SECTION 9.4. Counterparts................................................ 40


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PAGE
---- SECTION 9.5. Headings.................................................... 40 SECTION 9.6. Governing Law............................................... 40 SECTION 9.7. Severability................................................ 40 SECTION 9.8. Specific Performance........................................ 40 SECTION 9.9. Construction................................................ 40 SECTION 9.10. Non-Survival of Representations and Warranties and
Agreements.................................................. 40 SECTION 9.11. Fees and Expenses........................................... 40 SECTION 9.12. Notices..................................................... 40


EXHIBITS Exhibit A Plan of Merger Exhibit B Articles of Incorporation of the Surviving Corporation Exhibit C Bylaws of the Surviving Corporation Exhibit D Other Actions


iii


AGREEMENT OF MERGER


THIS AGREEMENT OF MERGER (this "Agreement"), dated as of May 15, 2005, by and among United Parcel Service, Inc., a Delaware corporation ("Parent"), Olympic Merger Sub, Inc., a Virginia corporation ("Sub") and indirect wholly owned subsidiary of Parent, and Overnite Corporation, a Virginia corporation (the "Company").


WITNESSETH:


WHEREAS, the parties to this Agreement desire to effect the acquisition of the Company by Parent;


WHEREAS, in furtherance of the foregoing, upon the terms and subject to the conditions of this Agreement, including the Plan of Merger in the form attached hereto as Exhibit A (the "Plan of Merger"), and in accordance with the Virginia Stock Corporation Act (the "VSCA"), Sub will merge with and into the Company (the "Merger"), with the Company as the surviving corporation;


WHEREAS, the Board of Directors of the Company unanimously (i) determined that this Agreement, the Plan of Merger and the transactions contemplated herein, including the Merger, are advisable, fair to and in the best interests of the Company and the Company Shareholders (as defined hereafter), (ii) approved and adopted this Agreement, the Plan of Merger and the transactions contemplated herein, including the Merger, and (iii) recommended approval and adoption of this Agreement, the Plan of Merger and the transactions contemplated herein, including the Merger, by the Company Shareholders; and


WHEREAS, the respective Board of Directors of Parent and Sub, and United Parcel Service of America, Inc., as the sole shareholder of Sub ("UPSOA"), have each approved and adopted this Agreement, the Plan of Merger and the transactions contemplated herein, including the Merger, upon the terms and subject to the conditions set forth herein.


NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements contained in this Agreement and intending to be legally bound hereby, the parties hereto agree as follows:


ARTICLE I.


DEFINITIONS


SECTION 1.1. Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth in this Section.


(a) "10-K" means the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004.


(b) "Acquisition Agreement" has the meaning set forth in Section
6.5(b).


(c) "Acquisition Proposal" has the meaning set forth in Section 6.9.


(d) "ADA" means the Americans with Disabilities Act.


(e) "ADEA" means the Age Discrimination in Employment Act.


(f) "Affiliate" of a party means an "affiliate" of such party as that
term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act
(including at a minimum, all those Persons subject to the reporting
requirements of Rule 16(a) under the Exchange Act).


(g) "Agreement" has the meaning set forth in the Preamble.


(h) "Applicable Benefit Laws" means ERISA, the Code and all other
Laws, regulations, orders or other legislative, administrative or judicial
promulgations, including those of a jurisdiction outside the United States
of America, applicable to Employee Benefits Plans.


1


(i) "Alternative Transaction" has the meaning set forth in Section
6.5(b).


(j) "Associate" has the meaning set forth in Rule 12b-2 of the
Exchange Act.


(k) "Blue Sky Laws" means state securities or "blue sky" Laws.


(l) "CERCLA" means the Federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended.


(m) "Certificate" means each certificate representing a share or
shares of Company Common Stock.


(n) "Code" means the Internal Revenue Code of 1986, as amended.


(o) "Combined Group" means (i) any "affiliated group" as defined in
Section 1504 of the Code or (ii) any combined or similar reporting group
for state, local, foreign or other tax purposes of which the Company or any
of the Subsidiaries has been a part.


(p) "Company" has the meaning set forth in the Preamble.


(q) "Company Articles of Incorporation" means the Company's Amended
and Restated Articles of Incorporation, dated as of September 8, 2003.


(r) "Company Benefit Plans" means each Employee Benefit Plan sponsored
or maintained or required to be sponsored or maintained at any time by the
Company or any Subsidiary, or to which the Company or any Subsidiary makes
or has made, or has or has had an obligation to make, contributions at any
time.


(s) "Company Bylaws" means the bylaws of the Company.


(t) "Company Charter Documents" means, collectively, the Company
Bylaws and the Company Articles of Incorporation.


(u) "Company Common Stock" means the Company's common stock, par value
$0.01 per share.


(v) "Company Disclosure Letter" means the Company Disclosure Letter
delivered by the Company to Parent prior to the execution of this
Agreement.


(w) "Company ESPP" has the meaning set forth in Section 2.6(b).


(x) "Company Financial Advisor" means Morgan Stanley & Co.
Incorporated.


(y) "Company Financial Statements" means the Company's consolidated
statements of financial position, consolidated statements of income,
consolidated statements of cash flows and consolidated statements of
changes in common shareholders' equity (including the notes thereto)
included in the SEC Reports.


(z) "Company Insurance Policies" means all insurance policies which at
any time since the Spin-Off Date named the Company, any Subsidiary, or any
of their respective directors, officers or employees as an insured or
beneficiary or as a loss payable payee or for which the Company or any
Subsidiary since the Spin-Off Date has paid or is or was obligated to pay
all or part of the premiums.


(aa) "Company Licensed Software" means all third party software (other
than Company Proprietary Software or standard, off-the-shelf third party
personal computer or server-based products such as word processing,
accounting, spreadsheet programs, or so forth) licensed to the Company and
the Subsidiaries.


(bb) "Company Material Adverse Effect" means any change, event,
circumstance or effect shall have occurred or been threatened that, when
taken together with all other adverse changes, events, circumstances or
effects that have occurred or been threatened, (i) is or is reasonably
likely to be materially adverse to the business, operations, properties,
condition (financial or otherwise), assets or


2


liabilities (including contingent liabilities) of the Company and the
Subsidiaries taken as a whole or (ii) prevents or materially delays the
performance by the Company of any of its obligations under this Agreement
or the consummation of the Merger or the other transactions contemplated
herein, except, in the case of (i) above, to the extent resulting from (A)
any changes in general United States or global economic conditions or any
changes in the industry in which the Company operates; provided that any
such change does not adversely affect in a materially disproportionate
manner the Company and the Subsidiaries taken as a whole as compared to
similarly situated businesses; (B) any changes to financial or securities
markets (including any disruption thereof and any decline in the price of
any security, including the Company Common Stock, or market index, in each
case, in and of itself); provided that any such change does not adversely
affect in a materially disproportionate manner the Company and the
Subsidiaries taken as a whole as compared to similarly situated businesses;
(C) any changes, events, circumstances or effects resulting from entering
into this Agreement or the announcement thereof or the pendency or
consummation of the transactions contemplated hereby, including any changes
relating to the workforce of the Company and its Subsidiaries; and (D) any
changes in applicable Law or GAAP or the interpretation thereof after the
date of this Agreement; provided that any such change does not adversely
affect in a materially disproportionate manner the Company and the
Subsidiaries taken as a whole as compared to similarly situated businesses.


(cc) "Company Preferred Stock" means the Company's preferred stock,
par value $0.01 per share.


(dd) "Company Proprietary Software" means all software owned by the
Company and the Subsidiaries.


(ee) "Company Restricted Stock Award" means an award of restricted
Company Common Stock.


(ff) "Company Shareholder" means any holder of Company Common Stock.


(gg) "Company Software" means the Company Licensed Software together
with the Company Proprietary Software.


(hh) "Company Stock" means the Company Common Stock together with the
Company Preferred Stock.


(ii) "Company Stock Award Consideration" means the aggregate amounts
payable under Sections 2.6(a), 2.6(b) and 2.6(c) and the employer
employment tax liability for the Company Stock Award Consideration.


(jj) "Company Stock Award Plans" means any plan or arrangement or
agreement relating to stock options, restricted stock, stock appreciation
rights, performance shares, restricted stock units, dividend equivalents or
other equity based awards of the Company listed in the Company Disclosure
Letter, including the Stock Incentive Plan and the Executive Incentive
Plan.


(kk) "Company Stock Awards" means all outstanding options or other
rights to acquire Company Common Stock, including any stock appreciation
rights, restricted stock, performance shares, restricted stock units,
dividend equivalents or other equity based awards granted under the Company
Stock Award Plans.


(ll) "Company Stock Option" has the meaning set forth in Section
2.6(a)(i).


(mm) "Company Stock Option Consideration" has the meaning set forth in
Section 2.6(a)(i).


(nn) "Confidentiality Agreement" means the confidentiality agreement
between United Parcel Service General Services Co. and the Company, dated
February 21, 2005.


(oo) "Current Company Benefit Plan" has the meaning set forth in
Section 4.16(a).


(pp) "Customer Inventory" means the materials, products or other
substances held by the Company or any Subsidiary for the account of a
customer of the Company or any Subsidiary.


3


(qq) "Customs" has the meaning set forth in Section 4.26.


(rr) "Effective Time" has the meaning set forth in Section 2.2.


(ss) "Employee/Consulting Agreements" means any contracts, consulting
agreements, termination or severance agreements, change of control
agreements or any other agreements respecting the terms and conditions of
employment or of an independent contractor relationship with respect to any
officer, employee or former employee, or consultant or independent
contractor who is performing services exclusively for the Company or any
Subsidiaries.


(tt) "Employee Benefit Plan" means with respect to any Person each
plan, fund, program, arrangement or scheme (collectively, "Plan"),
including, but not limited to each Plan maintained or required to be
maintained under the Laws of a jurisdiction outside the United States of
America (other than a Plan maintained solely to comply with applicable
workers' compensation law, social security law, mandated benefit laws or
other similar Laws (in each case, only to the extent the Plan is no more
generous than the mandatory minimum requirements under such laws)), in each
case, that is at any time sponsored or maintained or required to be
sponsored or maintained by such Person or to which such Person makes or has
made, or has or has had an obligation to make, contributions providing for
employee benefits or for the remuneration, direct or indirect, of the
employees, former employees, directors, officers, consultants, independent
contractors, contingent workers or leased employees of such Person or the
dependents of any of them (whether written or oral), including each
deferred compensation, bonus, incentive compensation, pension, retirement,
stock purchase, stock option and other equity compensation plan, "welfare"
plan (within the meaning of Section 3(1) of the ERISA, determined without
regard to whether such Plan is subject to ERISA); each "pension" plan
(within the meaning of Section 3(2) of ERISA, determined without regard to
whether such plan is subject to ERISA); each severance plan or agreement,
health, vacation, summer hours, supplemental unemployment benefit,
hospitalization insurance, medical, dental, legal and each other employee
benefit plan, fund, program, arrangement or scheme.


(uu) "Environmental Laws" means local, state and federal Laws and
regulations relating to protection of the environment, pollution control,
product registration and management, release, or disposal of Hazardous
Materials.


(vv) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.


(ww) "ERISA Affiliate" means any Person (whether incorporated or
unincorporated), that together with the Company or any Subsidiary would be
deemed a "single employer" within the meaning of Section 414 of the Code.


(xx) "ERISA Affiliate Plan" means each Employee Benefit Plan sponsored
or maintained or required to be sponsored or maintained at any time by an
ERISA Affiliate or to which such ERISA Affiliate makes or has made, or has,
or has had, an obligation to make, contributions at any time.


(yy) "ESP Shares" has the meaning set forth in Section 2.6(c).


(zz) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.


(aaa) "Executive Incentive Plan" means the Company's Executive
Incentive Compensation and Deferral Plan.


(bbb) "FLSA" means the Fair Labor Standards Act.


(ccc) "FMLA" means the Family and Medical Leave Act.


(ddd) "Fund" has the meaning set forth in Section 2.5(a).


(eee) "GAAP" means generally accepted accounting principles in the
United States.


4


(fff) "Governmental Entity" means any United States federal, state or
local or any foreign government or any court, administrative or regulatory
agency or commission or other governmental authority or agency, domestic or
foreign.


(ggg) "Government Reports" has the meaning set forth in Section
4.9(a).


(hhh) "Hazardous Materials" means any waste, pollutant, hazardous
substance, toxic, radioactive, ignitable, reactive or corrosive substance,
hazardous waste, special waste, controlled waste, industrial substance,
by-product, process intermediate product or waste, petroleum or petroleum-
derived substance or waste, chemical liquids or solids, liquid or gaseous
products, or any constituent of any such substance or waste, the use,
handling, storage, treatment or disposal of which by the Company is
governed by or subject to any applicable Environmental Law.


(iii) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.


(jjj) "Intellectual Property Rights" means the following and all
rights arising out of the following: all copyrights, trade names,
trademarks, trade secrets, service marks or patents (or applications
therefor) as to which the Company or any Subsidiary claim an ownership
interest.


(kkk) "Knowledge of the Company" means the actual knowledge of Leo H.
Suggs, Patrick D. Hanley, Gordon S. Mackenzie, John W. Fain, Mark B.
Goodwin, Paul A. Hoelting, David W. Barnett, Michael Mahan, M. Parker
Myers, Carol D. Miller, Lisa McKnight or Phil Warren following reasonable
inquiry of appropriate employees with respect to the referenced matters.


(lll) "Labor Laws" means all Laws and all contracts or collective
bargaining agreements governing or concerning labor relations, unions and
collective bargaining, conditions of employment, employment discrimination
and harassment, wages, hours or occupational safety and health, including,
without limitation, the United States Immigration Reform and Control Act of
1986, the United States National Labor Relations Act, the United States
Civil Rights Acts of 1866 and 1964, as amended, Equal Pay Act, ADEA, ADA,
FMLA, WARN, Occupational Safety and Health Act, the United States Davis
Bacon Act, the United States Walsh-Healy Act, the United States Service
Contract Act, United States Executive Order 11246, FLSA and the United
States Rehabilitation Act of 1973 and all rules and regulations promulgated
under such acts.


(mmm) "Landlord's Estoppel Certificate and Consent" has the meaning
set forth in Section 4.13(k).


(nnn) "Law" means any United States federal, state or local or any
foreign statute, law, rule, regu
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