<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
---------------------
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
---------------------
Check the appropriate box:
[X] Preliminary Proxy Statement [ ]Definitive Proxy Statement
[ ] Definitive Additional Materials [ ]Soliciting Material Pursuant
to (S) 240-14a-11(c) or (S) 240-14a-12
---------------------
CONSOLIDATED FREIGHTWAYS, INC.
(Name of Registrant as Specified in its Charter)
---------------------
CONSOLIDATED FREIGHTWAYS, INC.
(Name of Person(s) Filing Proxy Statement)
---------------------
Payment of Filing Fee (Check the appropriate box):
- --------------------------------------------------
[ ] $125 per Exchange Act Rules 0-11 (c) (1) (ii), 14a-6 (i) (1), or 14a-6 (j)
(2).
[X] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6
(i) (3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6 (i) (4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11*:
(4) Proposed maximum aggregate value of transaction:
------------
* Set forth the amount on which the filing fee is calculated and state how
it was determined.
---------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11 (a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
Notice of Annual Meeting
and
Proxy Statement
Annual Meeting of Shareholders
APRIL 25, 1994
(LOGO OF CONSOLIDATED FREIGHTWAYS, INC.)
<PAGE>
PRELIMINARY PROXY STATEMENT
CONSOLIDATED FREIGHTWAYS, INC.
(LOGO OF CONSOLIDATED FREIGHTWAYS)
3240 HILLVIEW AVE. TELEPHONE: 415-494-2900
PALO ALTO, CA 94304 FAX: 415-813-5311
--------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF CONSOLIDATED FREIGHTWAYS, INC.:
The Annual Meeting of Shareholders of the Company will be held in the Olympic
Ballroom of the Pan Pacific Hotel, 500 Post Street, San Francisco, California,
at 10:00 A.M., Monday, April 25, 1994:
1. To elect four Class III directors for a three-year term.
2. To consider adoption of the Consolidated Freightways, Inc. Equity Incentive
Plan for Non-Employee Directors.
3. To appoint Arthur Andersen & Co. as independent auditors of the Company and
its subsidiaries for the year 1994.
4. To consider and act upon, if properly presented, shareholder proposals,
opposed by management, regarding the Company's [classified board of
directors/confidential voting] and the 80% voting requirement to alter Board
structure.
5. To act on such other matters as may properly come before the meeting or any
adjournments or postponements thereof.
Shareholders of record at the close of business on March 1, 1994, are entitled
to notice of and to vote at the meeting. The list of such shareholders is held
at the office of the Company's stock transfer agent, First Chicago Trust Company
of New York, 14 Wall Street, New York, New York 10005.
PLEASE SIGN, DATE AND MAIL THE ENCLOSED WHITE PROXY IN THE ACCOMPANYING ENVELOPE
AT YOUR EARLIEST CONVENIENCE.
BY ORDER OF THE BOARD OF DIRECTORS
MARYLA R. BOONSTOPPEL
Vice President and Secretary
March 18, 1994
<PAGE>
PRELIMINARY PROXY STATEMENT
CONSOLIDATED FREIGHTWAYS, INC.
3240 HILLVIEW AVE
PALO ALTO, CALIFORNIA 94304
TELEPHONE: 415-494-2900
FAX: 415-813-5311
PROXY STATEMENT
March 18, 1994
The Annual Meeting of Shareholders will be held on April 25, 1994.
Shareholders of record at the close of business on March 1, 1994 are entitled to
vote at the meeting. This proxy statement and accompanying proxy have first been
sent to eligible shareholders on or about March 18, 1994.
BOARD OF DIRECTORS' RECOMMENDATIONS
The Board of Directors of the Company is soliciting your proxy for use at the
meeting and any adjournment or postponement of the meeting. The Board
recommends a vote for the election of the nominees for directors described
below, for adoption of the Consolidated Freightways, Inc. Equity Incentive Plan
for Non-Employee Directors, for the appointment of Arthur Andersen & Co. as
independent auditors of the Company, and against the two shareholder proposals
set forth in this proxy statement.
PROXY VOTING PROCEDURES
To be effective, properly signed proxies must be returned to the Company prior
to the meeting. The shares represented by your proxy will be voted in accordance
with your instructions. However, if no instructions are given, your shares will
be voted in accordance with the recommendations of the Board. See "Other
Matters" below for information concerning the voting of proxies if other matters
are properly brought before the meeting.
VOTING REQUIREMENTS
A majority of the votes attributable to all voting shares must be represented
in person or by proxy at the meeting to establish a quorum for action at the
meeting. The four nominees for election of directors who receive the greatest
number of votes cast for the election of directors at the meeting will be
elected directors for a three-year term. Approval of all other matters expected
to come before the meeting requires a favorable vote of the holders of a
majority of the voting power represented at the meeting.
In the election of directors, broker non-votes will be disregarded and have no
effect on the outcome of the vote. With respect to the other matters,
abstentions from voting will have the same effect as voting against such matters
and broker non-votes will be disregarded and have no effect on the outcome of
the vote.
VOTING SHARES OUTSTANDING
At the close of business on March 1, 1994, the record date for the Annual
Meeting, there were outstanding and entitled to vote ___________________shares
of Common Stock and ______________shares of Series B Cumulative Convertible
Preferred Stock ("Series B Preferred Stock"). Each record share of Common Stock
has the right to one non-cumulative vote and each record share of Series B
Preferred Stock has the right to 5.2 non-cumulative votes. Therefore, an
aggregate of _____________________votes are eligible to be cast at the meeting.
-1-
<PAGE>
PROXY VOTING CONVENIENCE
You are encouraged to exercise your right to vote by returning to the
Company a properly executed WHITE proxy in the enclosed envelope, whether or not
you plan to attend the meeting. This will ensure that your votes are cast.
You may revoke or change your proxy at any time prior to its use at the
meeting. There are three ways you may do so: (1) give the Company a written
direction to revoke your proxy; (2) submit a later dated proxy; or (3) attend
the meeting and vote in person.
ATTENDANCE AT THE MEETING
Due to the limited seating capacity, admission to the meeting will be
limited to shareholders and guests invited by the Board of Directors. IF YOU DO
NOT OWN SHARES IN YOUR OWN NAME, YOU MUST BRING PROOF OF OWNERSHIP (E.G., A
CURRENT BROKER'S STATEMENT) IN ORDER TO BE ADMITTED TO THE MEETING.
-2-
<PAGE>
ELECTION OF DIRECTORS
The following persons are the nominees of the Board of Directors for election
as Class III directors to serve a three-year term until the the 1997 Annual
Meeting of Shareholders and until their successors are duly elected and
qualified:
Robert Alpert
Robert Jaunich II
Raymond F. O'Brien
Robert P. Wayman
Unless you withhold authority to vote, the shares represented by the enclosed
proxy will be voted for the election of these Class III nominees. The Board has
no reason to believe that these nominees will be unable or will decline to serve
if elected. However, in the event of the death, disqualification, refusal or
inability of any of them to serve, proxy holders are authorized to vote for the
election of such other person or persons as they determine in their discretion.
The Company has three classes of directors, each of which is elected for a
three-year term. Four Class I directors will be elected in 1995 and four Class
II directors will be elected in 1996. All directors have previously been elected
by the shareholders, except Messrs. Robert Jaunich II and Robert P. Wayman who
were appointed as Class III directors by the Board of Directors in 1992 and
1994, respectively. Under the Company's retirement policy for directors at age
72, Mr. John S. Perkins will not be standing for election as a Class III
director and will retire from the Board at the Annual Meeting of Directors
following the Annual Meeting of Shareholders. Mr. John C. Bolinger, Jr. will
also retire from the Board at the Annual Meeting of Directors, unless the Board
takes appropriate steps to modify the policy to enable him to remain on the
Board until his successor is selected. Mr. Perkins and Mr. Bolinger have each
served on the Board for more than 15 years. The Board joins the Company's
management in thanking them for their years of loyal service and valuable advice
as directors of the Company.
_______________________
CLASS III DIRECTORS
ROBERT ALPERT Director since 1976
Chairman of the Board,
Alpert Corporation,
a financial services and real estate firm
Mr. Alpert is currently Chairman of the Board of
Alpert Corporation, a company formed in 1965. He is also
Honorary Consul for Sweden in Dallas. Mr. Alpert holds
directorships with Aladdin Industries, Inc., Texas
Industries, Inc., Chaparral Steel Company, The Empire
A.B. in Sweden and M.A.L.E. in Finland, and is an
advisory director for I.C. Deal Companies. Additionally,
he is a member of the Advisory Council for the
University of Texas at Austin, College of Business
Administration; a Trustee Emeritus for Colby College in
Maine; and director for the Dallas Foundation for
Health, Education and Research, a public charity. He is
also a member of the Chief Executive Forum, World
Business Council, Young Presidents' Organization and
National Association of Corporate Directors. Mr.
Alpert, age 62, serves as Chairman of the Compensation
Committee and as a member of the Executive and the
Finance Committees of the Company.
-3-
<PAGE>
ROBERT JAUNICH II Director since 1992
Managing Director,
The Fremont Group,
a private investment corporation
Mr. Jaunich joined The Fremont Group (formerly Bechtel
Investments, Inc.), a private investment corporation
managing assets in excess of $4.0 billion, in January
1991 as Managing Director of Direct Investments and
member of the boards of directors for The Fremont Group
and Sequoia Ventures, Inc. Additionally, he is President
of Fremont Capital, Inc., a registered broker-dealer.
Prior to joining The Fremont Group, Mr. Jaunich was
Member, Chief Executive Officer and Executive Vice
President of Swiss-based Jacobs Suchard AG (1986-1990),
President of Osborne Computer Corporation (1983),
President of Sara Lee Corporation, (1978-1982), and
Executive Vice President of Memorex Corporation (1970-
1978). Mr. Jaunich is Chairman of Coldwell Banker
Corporation and of Crown Pacific, Ltd. He is also
Chairman of the Board of Control for Petro. He serves as
a trustee of the non-profit National Recreation
Foundation and is a life member of the World Presidents
Organization. Mr. Jaunich, age 54, is a graduate of
Wesleyan University and The Wharton School, University
of Pennsylvania. Mr. Jaunich serves on the Advisory
Nominating, the Audit, the Finance and the Pension and
Employee Benefits Committees of the Company.
RAYMOND F. O'BRIEN Director since 1966
Chairman of the Board,
Consolidated Freightways, Inc.
Mr. O'Brien began his career with the Company in 1958
as a Controller, advancing to Vice President and
Treasurer in 1963, Vice President-Finance in 1967, and
Executive Vice President in 1969. From 1973 to 1975, he
also served as President and Chief Executive Officer of
Consolidated Freightways Corporation of Delaware, the
Company's principal motor carrier subsidiary. In 1975
Mr. O'Brien was elected President of the Company, a
post he held until 1980 and resumed from 1981 to 1986.
From 1977 to 1988, he was the Company's Chief Executive
Officer and was reelected to that position from 1990 to
1991. He has been Chairman of the Board since 1979. Mr.
O'Brien, age 71, is a graduate of the University of
Missouri and the Harvard Advanced Management Program. He
is a director of Transamerica Corporation and Watkins-
Johnson Company. He is also a regent of St. Mary's
College of California. Mr. O'Brien is a former director
of the Charles Armstrong Schools, a former trustee of
St. Mary's College and a former Chairman of the Western
Highway Institute. He has served on several other
corporate boards and executive committees of industry
associations and educational institutions. He is
Chairman of the Executive Committee and a member of the
Advisory Nominating Committee of the Company.
-4-
<PAGE>
ROBERT P. WAYMAN Director since 1994
Executive Vice President,
Finance and Administration,
and Chief Financial Officer,
Hewlett-Packard Company,
a computer-manufacturing company
Mr. Wayman joined Hewlett-Packard Company in 1969.
After serving in several accounting management
positions, he was elected Vice-President and Chief
Financial Officer in 1984. He became a Senior Vice
President in 1987 and an Executive Vice President in
1992. He assumed additional responsibility for
administration in 1992, and was elected to Hewlett-
Packard's Board of Directors in 1993. Mr. Wayman, age
48, holds a bachelor's degree in science engineering and
a master's degree in business administration from
Northwestern University. He is a member of the Chief
Financial Officers Task Force of the Private Sector
Council, the Policy Council of the Tax Foundation, the
Financial Executives Institute, the Council of Financial
Executives of the Conference Board and the Advisory
Board to the Northwestern University School of Business.
______________________
CLASS II DIRECTORS
JOHN C. BOLINGER, JR. Director since 1979
Vice Chairman of the Board,
Piedmont Natural Gas Company,
a diversified natural gas company
Mr. Bolinger has been Vice Chairman of Piedmont
Natural Gas Company since 1986. He is a past Chairman of
the University of Tennessee Development Council and
currently serves on the Advisory Council of the
University's College of Business. Mr. Bolinger is a
director of Aladdin Industries, Inc. and Home Federal
Savings Bank of Tennessee. He is also a management
consultant and in that capacity has served as an
officer, director or consultant of various companies.
Mr. Bolinger, age 72, holds degrees from the University
of Tennessee and the Harvard Graduate School of
Business. He serves as Chairman of the Advisory
Nominating Committee, and as a member of the Audit and
the Pension and Employee Benefits Committees of the
Company.
-5-
<PAGE>
DONALD E. MOFFITT Director 1986-1988
Director since 1991
President and Chief Executive Officer,
Consolidated Freightways, Inc.
Mr. Moffitt was named President and Chief Executive
Officer of the Company in 1991. He joined Consolidated
Freightways Corporation of Delaware, the Company's
principal motor carrier subsidiary, as an accountant in
1955 and advanced to Vice President-Finance in 1973. In
1975, he transferred to the Company as Vice President-
Finance and Treasurer and in 1981 was elected Executive
Vice President-Finance and Administration. In 1983 he
assumed the additional duties of President, CF
International and Air, Inc., where he directed the
Company's international and air freight businesses. Mr.
Moffitt was elected Vice Chairman of the Board of the
Company in 1986. He retired as an employee and as Vice
Chairman of the Board of Directors in 1988 and returned
to the Company as Executive Vice President-Finance and
Chief Financial Officer in 1990. Mr. Moffitt, age 61,
serves on the Executive Committee of the Board of
Directors of the Highway Users Federation and is a
member of the Board of Directors of the Bay Area
Council, the Automotive Safety Foundation and the
American Red Cross. He is a member of the California
Business Roundtable and the Business Advisory Council of
the Northwestern University Transportation Center. He
also serves on the Advisory Council of the Peninsula
Conflict Resolution Center . Mr. Moffitt is a member of
the Advisory Nominating and the Executive Committees of
the Company.
RONALD E. POELMAN Director since 1971
Member of the First Quorum of the Seventy,
The Church of Jesus Christ of Latter-day Saints
Mr. Poelman began his career in the transportation
industry in 1952. While still in college, he joined
Utah-Arizona Freight Lines, which was later acquired by
the Company. After receiving his law degree in 1955, he
transferred to the Company where he advanced to
Corporate Secretary in 1959 and Vice President in 1964.
He left the Company in 1978 to render full time service
to his church. Mr. Poelman, age 65, is a graduate of the
University of Utah Law School and the Harvard Advanced
Management Program. He currently serves as Chairman of
the Boards of Deseret Trust Company and Deseret
Gymnasium. Mr. Poelman is Chairman of the Pension and
Employee Benefits Committee and a member of the
Charitable Contributions Committee of the Company.
-6-
<PAGE>
ROBERT D. ROGERS Director since 1990
President and Chief Executive Officer,
Texas Industries, Inc.,
a producer of steel, cement, aggregates and concrete
Mr. Rogers joined Texas Industries, Inc., in 1963 as
General Manager/European Operations. In 1964 he was
named Vice President-Finance; in 1968, Vice President-
Operations, and in 1970 he became President and Chief
Executive Officer. Mr. Rogers is also a director of
Texas Industries, Inc. and serves as a member and
Chairman of Chaparral Steel Company's Board of
Directors. Mr. Rogers is a graduate of Yale University
and earned an M.B.A from the Harvard Graduate School of
Business. He is a director of the American Business
Conference, British-North American Committee, Dallas
Medical Resource, and North Texas Public Broadcasting,
and is a member of the Executive Board for Southern
Methodist University's School of Business. Mr. Rogers,
age 57, served as Chairman of the Federal Reserve Bank
of Dallas from 1984 to 1986 and was Chairman of the
Greater Dallas Chamber of Commerce from 1986 to 1988. He
is Chairman of the Finance Committee and a member of the
Compensation and the Pension and Employee Benefits
Committees of the Company.
___________________________
CLASS I DIRECTORS
EARL F. CHEIT Director since 1976
Dean Emeritus, Haas School of Business,
University of California at Berkeley
Dr. Cheit has served on the University of California
faculty since 1957. He held a number of administrative
positions, both on and off the campus, including
Executive Vice Chancellor of the University. In 1976 he
was named Dean of the Business School, after serving as
Associate Director and Senior Research Fellow of the
Carnegie Council on Policy Studies in Higher Education.
In 1983 he resumed his teaching career at the University
and in 1990 he was again named Dean of the Business
School for the academic year 1990/1991. In 1993 he
served as the University's Interim Athletic Director.
Dr. Cheit, age 67, is a member of the Board of Shaklee
Corporation, Meridien Point Properties and a trustee of
Mills College. He is a graduate of the University of
Minnesota, from which he holds B.S., LL.B and Ph.D
degrees. He is the author of numerous books and articles
and serves as a consultant to various public and private
organizations. Dr. Cheit is Chairman of the Charitable
Contributions Committee and serves on the Audit, the
Executive and the Finance Committees of the Company.
-7-
<PAGE>
G. ROBERT EVANS Director since 1990
Chairman of the Board and Chief Executive Officer,
Material Sciences Corporation, a developer of
materials and technologies for emerging markets
Mr. Evans has been Chairman of the Board and Chief
Executive Officer of Material Sciences Corporation since
1991. His prior business career includes 15 years with
United States Gypsum Company and 13 years with Arcata
Corporation, where he served as President and Chief
Executive Officer. Mr. Evans was President and Chief
Executive Officer of Southwall Technologies, Inc. in
1983 and 1984; of Allsteel Inc. from 1984 to 1987; of
Bemrose Group USA from 1987 to 1990, and of Corporate
Finance Associates Illinois, Inc., from 1990 to 1991.
Mr. Evans, age 62, is a graduate of Wagner College with
graduate studies at the University of Pennsylvania and
the University of California at Los Angeles Graduate
School of Business. He is currently a director of
Fibreboard Corporation, Elco Industries, Inc., and the
Old Second Bancorp. He is also a trustee of Wagner
College and a member and past Chairman of the University
of Tennessee Development Council. Mr. Evans is Chairman
of the Audit Committee and serves on the Advisory
Nominating and the Compensation Committees of the
Company.
GERHARD E. LIENER Director since 1984
Member of the Board of Management,
Daimler-Benz AG, a holding company of a
high technology and motor vehicle group
Dr. Liener has been associated with Daimler-Benz AG of
Stuttgart, Germany, since 1967 when he joined the
company as a Member of the Department responsible for
all subsidiaries and affiliated companies. He was made a
Deputy Member of the Executive Board in 1982,
responsible for the New Subsidiaries and Affiliates
Division and was appointed a full member of the Board in
charge of that division in 1984. When Daimler-Benz
reorganized its activities in January of 1987, Dr.
Liener became the Management Board member responsible
for the Commercial Vehicles Division. As a result of
further Management Board restructuring in November 1987,
Dr. Liener now heads up his company's Finance and
Materials Management. Dr. Liener, age 61, is a director
of Chaparral Steel Company. He received his Doctorate in
Economics at the University of Tuebingen. Earlier he
held scholarships at the University of Madrid and
Lausanne University and in 1958 participated in an
advanced business program sponsored by the University of
California at Berkeley. Dr. Liener is a member of the
Board of Directors of Daimler-Benz North America
Corporation, New York, Mercedes-Benz North America, Inc.
and Freightliner Corp., Portland, Oregon. Dr. Liener
serves on the Charitable Contributions Committee of the
Company.
-8-
<PAGE>
RICHARD B. MADDEN Director since 1992
Chairman and Chief Executive Officer,
Potlatch Corporation, a diversified
forest products company
Mr. Madden has been Chief Executive Officer of
Potlatch Corporation since 1971 and Chairman of the
Board since 1977. He was previously associated with
Mobil Oil Corporation where he served in various
management capacities for fifteen years. Mr. Madden is a
director of Pacific Gas and Electric Company and URS
Corporation. He is also a Trustee Emeritus of the
American Enterprise Institute for Public Policy
Research. His civic activities include Vice President,
member of the Board of Governors and Executive Committee
of the San Francisco Symphony Association; Board of
Directors of the Smith-Kettlewell Eye Research
Institute; Board of Trustees of the Corporation of the
Fine Arts Museums and the Fine Arts Museums Foundation
of San Francisco; member of the Executive Committee of
the Bay Area Council; and member of the Business-Higher
Education Forum. Mr. Madden, age 64, holds a B.S. degree
in engineering from Princeton University, a J.D. degree
from the University of Michigan, and an M.B.A. from New
York University. He is a member of the Compensation,
the Executive, the Finance and the Pension and Employee
Benefits Committees of the Company.
____________________
DIRECTOR NOT CONTINUING IN OFFICE
JOHN S. PERKINS Director since 1979
General Partner,
Hampton Properties, L.P.,
a real estate and investment firm
Mr. Perkins has served as General Partner of Hampton
Properties, L.P., since its formation in 1981. From
1978 to 1981 he held the position of President and
Chairman of the Board of the predecessor corporation,
Hampton Securities Company. Prior to that time, Mr.
Perkins was associated with KPMG Peat Marwick, a firm of
independent public accountants, which he joined in 1946
and where he was admitted to partnership in 1953. He was
the Managing Partner of their San Francisco office from
1966 until his retirement in 1977. Mr. Perkins, age 72,
is a graduate of the University of Kansas and a
certified public accountant. He is a member of the Audit
and the Charitable Contributions Committees of the
Company.
-9-
<PAGE>
BENEFICIAL OWNERSHIP OF STOCK BY DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the beneficial ownership of shares of the Company's
Common Stock and Series B Preferred Stock and of the Company's Depositary
Shares, each representing one-tenth of a share of Series C Conversion Preferred
Stock ("Depositary Shares"), as of January 31, 1994, by the directors, the
executive officers named in the Summary Compensation Table beginning on page
___, and by all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership(1) Class
- ------------------------ ----------------------- ----------
<S> <C> <C>
Robert Alpert 52,050 Common *
0 Series B Preferred
0 Depositary Shares
John C. Bolinger, Jr. 5,000 Common *
0 Series B Preferred
0 Depositary Shares
Earl F. Cheit 300 Common *
0 Series B Preferred
0 Depositary Shares
W. Roger Curry(2) 198,423 Common *
81 Series B Preferred
0 Depositary Shares
G. Robert Evans 1,000 Common *
0 Series B Preferred
0 Depositary Shares
Robert Jaunich II 1,500 Common *
0 Series B Preferred
0 Depositary Shares
Robert H. Lawrence(3) 263,640 Common *
83 Series B Preferred
0 Depositary Shares
Gerhard E. Liener 0 Common *
0 Series B Preferred
0 Depositary Shares
Richard B. Madden 2,000 Common *
0 Series B Preferred
0 Depositary Shares
Donald E. Moffitt(4) 343,521 Common *
0 Series B Preferred
5,000 Depositary Shares
Raymond F. O'Brien(5) 264,450 Common *
0 Series B Preferred
0 Depositary Shares
</TABLE>
-10-
<PAGE>
<TABLE>
<S> <C> <C>
John S. Perkins 4,000 Common *
0 Series B Preferred
0 Depositary Shares
Ronald E. Poelman 1,030 Common *
0 Series B Preferred
0 Depositary Shares
Gregory L. Quesnel(6) 102,695 Common *
72 Series B Preferred
0 Depositary Shares
Robert T. Robertson(7) 153,815 Common *
81 Series B Preferred
0 Depositary Shares
Robert D. Rogers 7,500 Common *
0 Series B Preferred
0 Depositary Shares
Robert P. Wayman 0 Common *
0 Series B Preferred
0 Depositary Shares
All directors and
executive officers
as a group(19) 1,487,543 Common 4.2%
445 Series B Preferred *
5,000 Depositary Shares *
</TABLE>
*Represents holdings of less than one percent.
(1) Represents shares as to which the individual has sole voting and investment
power (or shares such power with his spouse).
(2) Includes 174,782 shares which Mr. Curry has the right to acquire within 60
days of January 31, 1994 through the exercise of options issued under the
Company's stock option plans.
(3) Includes 246,703 shares which Mr. Lawrence has the right to acquire within
60 days of January 31, 1994 through the exercise of options issued under
the Company's stock option plans.
(4) Includes 342,968 shares which Mr. Moffitt has the right to acquire within
60 days of January 31, 1994 through the exercise of options issued under
the Company's stock option plans.
(5) Includes 225,225 shares which Mr. O'Brien has the right to acquire within
60 days of January 31, 1994 through the exercise of options issued under
the Company's stock option plans.
(6) Includes 101,070 shares which Mr. Quesnel has the right to acquire within
60 days of January 31, 1994 through the exercise of options issued under
the Company's stock option plans.
(7) Includes 152,561 shares which Mr. Robertson has the right to acquire within
60 days of January 31, 1994 through the exercise of options issued under
the Company's stock option plans.
-11-
<PAGE>
INFORMATION ABOUT THE BOARD OF DIRECTORS AND
CERTAIN BOARD COMMITTEES
During 1993, the Board of Directors held ten meetings. All directors attended
at least 75% of all meetings of the Board and the Board committees on which
they served, except Dr. Liener who resides in Germany.
The Board of Directors has the following standing committees: Advisory
Nominating Committee, Audit Committee, Charitable Contributions Committee,
Compensation Committee, Executive Committee, Finance Committee, and Pension and
Employee Benefits Committee. As required by Securities and Exchange Commission
regulations, descriptions of the Advisory Nominating, Audit and Compensation
Committees follow:
ADVISORY NOMINATING COMMITTEE: The Advisory Nominating Committee reviews
the qualifications of candidates to serve on the Board of Directors, consults
with the management of the Company concerning potential candidates and
recommends to the Board of Directors nominees for membership on the Board.
Shareholders' proposals for nominees also will be accepted by the Committee and
will be given due consideration for recommendation to the Board in light of the
nominees' qualifications. Shareholder nominee proposals should be submitted in
writing to the Chairman of the Advisory Nominating Committee in care of the
Corporate Secretary. The members of the Advisory Nominating Committee are
Messrs. John C. Bolinger, Jr.--Chairman, G. Robert Evans, Robert Jaunich II,
Donald E. Moffitt and Raymond F. O'Brien. The Committee met once during 1993.
AUDIT COMMITTEE: The Audit Committee recommends independent public accountants
for appointment by the shareholders to perform the audit of the Company's
accounting records and authorizes the performance of services by the accountants
so appointed. The Committee reviews the annual audit of the Company by the
independent public accountants, and, in addition, annually reviews the results
of the examinations of accounting procedures and controls performed by the
Company's internal auditors. The members of the Audit Committee are Messrs. G.
Robert Evans--Chairman, John C. Bolinger, Jr., Earl F. Cheit, Robert Jaunich II
and John S. Perkins. The Committee met four times during 1993.
COMPENSATION COMMITTEE: The Compensation Committee recommends to the Board the
salaries of the executive officers of the Company. The Committee also oversees
the administration of the Company's incentive compensation plans and the
granting of stock options under the Company's Stock Option Plan of 1988. The
members of the Compensation Committee are Messrs. Robert Alpert--Chairman, G.
Robert Evans, Richard B. Madden and Robert D. Rogers. Mr. Raymond F. O'Brien
served on the Committee during 1993, but resigned as a Committee member on
December 6, 1993. The Committee met four times during 1993.
COMPENSATION OF DIRECTORS
During 1993, directors who were not employees of the Company or its affiliates
were paid an annual retainer of $30,000. An annual fee of $100,000 was
established for the Chairman of the Board, who is a non-employee director, by
the Board of Directors effective August 1, 1993. Directors may elect to defer
payment of their fees. Payment of any deferred amount and interest equivalents
accrued thereon will be made in a lump sum or in installments beginning no later
than the year following the director's final year on the Company's Board.
Directors are also provided with certain insurance coverages and, in addition,
are reimbursed for travel expenses incurred in attending Board and Committee
meetings. Upon retirement from the Board, directors with at least five years of
Board service receive retirement benefits in the same annual amount as the
directors' annual retainer being paid at the time of retirement. Retirement
payments continue for the director's number of years of service as a non-
employee director up to a maximum of 20 years.
-12-
<PAGE>
During 1993, the Compensation Committee of the Board of Directors conducted a
review of current board compensation packages at a selected number of major
American corporations. The Committee then recommended to the Board a new
compensation plan designed to:
. Recognize attendance at Board and Committee meetings and the inherent
responsibilities of Committee Chairmanships;
. Bring director's compensation into the mainstream of current
corporate practice;
. Approximate the Board's current annual cash compensation; and
. Provide long-term potential through restricted stock grants in lieu
of a portion of the existing retirement benefits accrual, subject to
shareholder approval.
Under the new plan, non-employee directors will be paid an annual retainer of
$15,000 and their retirement benefits will be accrued at $15,000 per year. Such
directors will also be paid $1,000 per Board meeting attended and $500 per
committee meeting attended. Chairmen of the Audit, Compensation, Finance and
Pension and Employee Benefits Committees will receive an additional $3,000 per
year and Chairmen of the Advisory Nominating and the Charitable Contributions
Committees will receive an additional $2,000 per year. The Chairman of the
Board, as a non-employee director, will continue to be paid $100,000 per year.
Terms of the annual restricted stock grant are described in the Equity
Incentive Plan for Non-Employee Directors, on pages _____ of this proxy
statement. In the event this Plan is not approved by shareholders, retirement
benefits for non-employee directors will continue to be calculated at $30,000
per year.
-13-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
I. SUMMARY COMPENSATION TABLE
The following table discloses compensation received by the Company's Chief
Executive Officer and the four next most highly paid executive officers for the
three fiscal years ended December 31, 1993.
<TABLE>
<CAPTION>
Annual Compensation(2) Long Term Compensation
---------------------- --------------------------
Awards Payouts
---------- -----------
Securities
Underlying Long-Term All Other
Options/ Incentive Compen-
Name and Salary Bonus(3) SAR's Payouts(4) sation(5)
Principal Positions(s) Year $ $ (#) ($) ($)
- ---------------------- ---- -------- -------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Moffitt 1993 $600,028 $603,028 52,500/0 $ 0 $ 88,175
President & Chief 1992 526,202 98,004 0/0 0 133,141
Executive Officer 1991 484,155 0 145,187/0 0 *
Robert H. Lawrence 1993 400,036 0 32,500/0 0 10,288
Exec. Vice President- 1992 400,036 0 0/0 6,051 11,769
Operations 1991 382,143 0 94,465/0 12,673 *
Robert T. Robertson 1993 317,148 279,537 72,500/0 0 8,533
Senior Vice President 1992 302,249 134,111 0/0 3,701 9,419
1991 293,231 6,082 65,573/0 5,957 *
W. Roger Curry 1993 317,148 380,578 32,500/0 0 50,739
Senior Vice President 1992 295,239 46,000 0/0 6,392 51,402
1991 289,980 0 69,307/0 15,295 *
Gregory L. Quesnel 1993 300,040 241,232 92,500/0 0 4,224
Exec. Vice President & 1992 250,802 47,124 0/0 1,622 6,042
Chief Financial Officer 1991 231,150 0 68,495/0 2,139 *
</TABLE>
- --------
*Under applicable rules of the Securities and Exchange Commission,
information is not required for 1991.
(1) Mr. Lawrence is also President and Chief Executive Officer of Consolidated
Freightways Corporation of Delaware, the Company's long-haul trucking
subsidiary. Mr. Robertson is also President and Chief Executive Officer of
Con-Way Transportation Services, Inc., the Company's regional trucking
subsidiary. Mr. Curry is also President and Chief Executive Officer of
Emery Air Freight Corporation, the Company's air freight subsidiary.
(2) There are no amounts of Other Annual Compensation which are required to be
disclosed for 1993. Perquisites and other personal benefits for each named
executive officer were below the lesser of $50,000 or 10% of the total
annual salary and bonus. There were no restricted stock awards in 1991,
1992 or 1993.
(3) The amounts shown in this column reflect payments under the Company's
short-term incentive compensation plans in which all regular, full-time,
non-contractual employees of the Company participate.
-14-
<PAGE>
(4) The amounts shown in this column reflect the dollar value of units that
have vested in each named executive officer's account under the Company's
Long-Term Incentive Plan in each respective year. Amounts reported may have
been either paid or deferred under the terms of the Plan.
(5) Amounts shown for 1993 in this column include:
(a) Payments by the Company for premiums for taxable group life insurance
on behalf of Messrs. Moffitt, Lawrence, Robertson, Curry, and Quesnel
of $14,658, $6,750, $4,768, $4,768, and $546, respectively.
(b) Long-Term Incentive Plan interest earned and deferred for Messrs.
Robertson, Curry and Quesnel of $227, $42,433 and $140, respectively.
(c) Company contributions to the Thrift and Stock Plan accounts of Messrs.
Lawrence, Robertson, Curry and Quesnel of $3,538 each.
(d) Payments by the Company to Mr. Moffitt under the Supplemental
Retirement Plan and the Excess Benefit Plan totaling $73,517 as a
result of his prior retirement.
-15-
<PAGE>
II. OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Values at Assumed Annual Grant
Rates of Stock Price Date
Appreciation for Present
Individual Grants(1) Options Term(3) Value(4)
-------------------------------------------------- ------------------------- ----------
Number of
Securities
Underlying % of Total
Options/ Options/SARs Exercise
SARs Granted to of Base
Granted Employees in Price Expiration
(#)(2) Fiscal Year ($/Share) Date 5%($) 10%($) ($)
---------- ------------ --------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald E. Moffitt 52,500/0 8.08% $14.9375 08/02/03 493,191 1,249,643 321,300
Robert H. Lawrence 32,500/0 5.00% $14.9375 08/02/03 305,309 773,712 198,900
Robert T. Robertson 32,500/0 5.00% $14.9375 08/02/03 305,309 773,712 198,900
40,000/0 6.15% $19.2500 10/25/03 484,249 1,227,182 315,600
W. Roger Curry 32,500/0 5.00% $14.9375 08/02/03 305,309 773,712 198,900
Gregory L. Quesnel 32,500/0 5.00% $14.9375 08/02/03 305,309 773,712 198,900
60,000/0 9.23% $19.2500 10/25/03 726,373 1,840,773 473,400
All Shareholders 373,057,175 983,112,851
Named Executives'
Gain as % of All
Shareholder's Gain 0.70% 0.75%
</TABLE>
(1) No SARs were issued in 1993.
(2) All options are exercisable in whole or in part on the first anniversary of
the grant date or earlier upon a change in control of the Company.
(3) The dollar gains under these columns result from calculations assuming 5%
and 10% growth rates prescribed by the Securities and Exchange Commission.
This presentation is not intended to forecast possible future appreciation,
if any, of the Company's Common Stock price. These are unrelated to the
Grant Date Present Value shown in the next column.
(4) Present value based on modified Black-Scholes option pricing model which
includes assumptions for the following variables: (i) option exercise
prices equal the fair market values on the dates of grant; (ii) option term
equals 7.36 years, based on actual option exercises for exercisable options
granted since January, 1990; (iii) volatility equals 0.352; (iv) risk-free
interest rate equals 5.5%; (v) estimated future average dividend yield
equals 1.5%. The dividend assumption presented here is for the purposes of
estimating option values and does not imply any pending change in the
Company's current dividend policy.
The Company's use of this model should not be construed as an endorsement of
its accuracy in valuing options. The Company's executive stock options are
not transferable so the "present value" shown cannot be realized by the
executive. Future compensation resulting from option grants will ultimately
depend on the amount by which the market price of the stock exceeds the
exercise price on the date of exercise.
-16-
<PAGE>
III. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL-YEAR END OPTION/SAR VALUES
The following table provides information on option/SAR exercises in 1993 by
the named officers and the value of such officers' unexercised options/SARs at
December 31, 1993.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End at FY-End
(#)(2) ($)(2)(3)(4)(5)
Shares Acquired Exercisable/ Exercisable/
on Exercise(#) Value Realized($) Unexercisable Unexercisable
--------------- ----------------- --------------- ------------------
<S> <C> <C> <C> <C>
Donald E. Moffitt 8,775(1) $25,777 342,968/52,500 $3,087,818/456,094
Robert H. Lawrence 6,300(1) 19,294 272,464/32,500 2,326,443/282,344
Robert T. Robertson 152,869/72,500 1,304,213/457,344
W. Roger Curry 199,201/32,500 1,598,262/282,344
Gregory L. Quesnel 101,679/92,500 962,916/544,844
</TABLE>
(1) Expiration date for these options was December 31, 1993.
(2) Mr. Moffitt has 342,968 exercisable options valued at $3,087,818; 52,500
unexercisable options valued at $456,094; and 0 stock appreciation rights
(SARs). Mr. Lawrence has 246,703 exercisable options valued at $2,054,000;
32,500 unexercisable options valued at $282,344; and 25,761 SARs valued at
$272,443. Mr. Robertson has 152,561 exercisable options valued at
$1,304,213; 72,500 unexercisable options valued at $457,344; and 308 SARs
valued at $0. Mr. Curry has 174,782 exercisable options valued at
$1,343,887; 32,500 unexercisable options valued at $282,344; and 24,419
SARs valued at $254,375. Mr. Quesnel has 101,070 exercisable options valued
at $960,634; 92,500 unexercisable options valued at $544,894; and 609 SARs
valued at $2,282. The value of outstanding SARs was fixed as described in
footnote 5 below when the Company's SAR plan was terminated on March 31,
1990.
(3) Based on the closing stock price of $23.625 on December 31, 1993.
(4) Numbers shown reflect the value of options granted at various times over a
ten-year period.
(5) The Company's Incentive Compensation Stock Appreciation Rights Plan ("SAR
Plan") was terminated on March 31, 1990. Under the SAR plan, selected key
employees were afforded the opportunity to convert cash awards under the
Company's short-term incentive compensation plans into SARs corresponding
in value to the Company's shares of Common Stock. The SARs fluctuated in
value as the price of the Common Stock increased or decreased and earned
amounts equal to dividends declared on the Common Stock. When the SAR Plan
was terminated, the value of all outstanding SARs was fixed as of that date.
Interest equivalents have been paid on outstanding balances credited to
participants since April 1, 1990. Payouts are made in cash and commence upon
a participant's prior election or termination of employment with the
Company.
-17-
<PAGE>
IV. LONG-TERM INCENTIVE PLAN AWARDS TABLE
There were no Long-Term Incentive Plan awards made to the five named executive
officers in 1993.
CORPORATE GOVERNANCE STATEMENT
The Board of Directors and the management of Consolidated Freightways, Inc.
are committed to shareholder-sensitive corporate governance. Set out below is a
summary of the key elements of the Company's governance principles:
. The offices of the Chairman of the Board and the Chief Executive Officer are
separate.
. Ten of the thirteen directors are neither present nor former employees of the
Company; the Chief Executive Officer is the only current executive serving on
the Board.
. The Audit and Compensation Committees consist entirely of independent
directors.
. There are no interlocking directorships.
. All common stock shareholders have equal voting rights--one share, one vote.
. The Company has never repriced stock options.
. The Company's classified board was established and approved by shareholders in
1985.
. The Company voluntarily eliminated "golden parachutes" in 1990.
. In 1993, the Company amended its Shareholder Rights Plan to provide for its
termination in 1995. Any extension of the Plan or adoption of any other
rights plan must first be approved by shareholders.
. In 1993, directors adopted a new compensation plan, subject to shareholder
approval, which will give independent directors a direct interest in the
Company's attainment of its financial goals through stock ownership. The plan
also recognizes meeting attendance and the inherent responsibilities of
committee chairmanships.
. The Company believes in the value of a diversified board and has retained an
advisory firm to assist it in its goal of achieving greater Board diversity.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The following report was given to the Board of Directors by the Compensation
Committee and is included in the proxy statement to inform shareholders of the
Committee's duties and its rationale for compensation of executives. Neither the
report nor the performance graphs that follow this report is intended to be
used for any other purpose or to be incorporated by reference in any of the
Company's past or future filings with the Securities and Exchange Commission.
-18-
<PAGE>
To the Board of Directors:
As members of the Compensation Committee of the Board of Directors, it is
our duty to administer the Company's executive compensation program to ensure
the attraction, retention and appropriate reward of executive officers, to
motivate their performance in the achievement of the Company's business
objectives, and to align the interests of executive officers with the long-term
interests of the Company's shareholders. Because the Company's compensation
policy is to pay for performance, each executive's total compensation is based
on the performance of the Company, the executive's business unit, and the
executive individually. Executive compensation consists of three components:
base salary, short-term incentive compensation and long-term incentive
compensation. At this time, the Company has not adopted a formal weighting
system for these various components.
Base Salary
The Company strives to pay base salaries that are competitive with those of
other companies in the freight transportation industry, taking into account the
Company's size compared to those companies. The companies used for this
comparison (the "Peer Companies") were selected by the Company's independent
executive compensation consultant and are the same as those included in the
performance graphs that follow this report with the exception of Arkansas Best
and Carolina Freight and the addition of CSX Corporation, Santa Fe Pacific
Corporation, Norfolk Southern Corporation and American President Companies,
Ltd. These exceptions and additions were made on the basis of comparable size.
For 1993, we reviewed base salaries for executive officers against
competitive salary data for officers in similar positions at Peer Companies,
and recommended to the Board of Directors adjustments in base salary to position
base salary for our executives within the second quartile of the peer group. The
salaries for Mr. Donald E. Moffitt, the President and Chief Executive Officer,
and Mr. Gregory L. Quesnel, a named executive, were consequently adjusted to
position them in this second quartile. Increases for two other named executives
were given in order to maintain their base pay positions relative to their
counterparts in the Peer Companies. The Board unanimously approved the
recommentations of the Committee. Mr. Moffitt, the only member of the Board of
Directors who is also an executive officer of the Company, did not participate
in deliberations concerning his own salary.
Short Term Incentive Compensation
The Committee has delegated to the Chief Executive Officer and other
executive officers the responsibility and authority to design and administer the
Company's short-term incentive plans. These plans provide for annual awards to
regular, full-time, non-contractual employees.
At the end of the year, each major subsidiary develops goals which reflect
its business objectives for the following year. These goals represent
measurable performance objectives based on such criteria as profits, revenue,
expenses and/or service. The parent company goals generally represent a
compilation of the profit goals of the subsidiaries. The final incentive
compensation plans are then incorporated into the Company's business plan for
the ensuing year and presented to the Board of Directors for approval and
adoption.
Upon attainment of the established performance goals, participants, other
than the top five executives, may receive incentive compensation ranging from
5% to 50% of base salary (the participant's "participation factor"), according
to a participant's level of responsibility, with the opportunity to double that
percentage for performance in excess of the stated goals. 18,857 employees were
eligible to participate in the Company's incentive compensation plans in 1993.
The participation factors for the Chief Executive Officer and the four named
executives are 75% and 60% of salary, respectively, again with the opportunity
to double that percentage for extraordinary results.
-19-
<PAGE>
At the end of the year, short-term incentive payouts for the participants,
if any, are calculated based on the specific, measurable objectives assigned to
the operating unit to which each participant belongs. A partial payout is
generally made in December and the balance early the following year.
In 1993, Con-Way Transportation Services, Inc., Emery Air Freight
Corporation and the parent company exceeded their respective performance
objectives, with Con-Way and Emery each achieving record results. Accordingly,
bonuses were paid to participants in Con-Way, Emery and the parent company.
Messrs. Moffitt and Quesnel earned incentive compensation of 134% of their
respective participation factors, based on the amount by which corporate pre-
tax, pre-incentive income exceeded the minimum target level established at the
beginning of the year. Similarly, Mr. Robert T. Robertson earned incentive
compensation of 147% of his participation factor, based on the amount by which
the pre-tax, pre-incentive income on Con-Way exceeded its minimum target level
established at the beginning of the year; and Mr. W. Roger Curry earned
incentive compensation of 200% of his participation factor, based on the amount
by which the pre-tax operating profit of Emery exceeded its minimum target
level established at the beginning of the year. These bonuses are reflected in
the Summary Compensation Table for Compensation of Executive Officers.
In addition to the Company's established incentive compensation plans, which
are based on measurable objectives, the Compensation Committee and Board of
Directors in 1982 granted the Chief Executive Officer the authority to
recommend, from time to time, discretionary incentive awards to designated
employees based on the individual performance of these employees during the year
and/or progress made on achieving strategic or other non-numerical goals. These
payments, of up to 30% of annual compensation, would be in addition to any
incentive earned under the Company's incentive compensation plans. No
discretionary payments were awarded in 1993.
Long-Term Incentive Compensation
We believe that executives should have a large stake in the risks and
rewards of long-term ownership of the Company and that executive compensation
should include long-term programs tied directly to the performance of the
Company which place a greater portion of an executive's potential total
compensation "at risk" than is the case for other employees.
The Stock Option Plan of 1988 provides for the granting of options to
purchase shares of the Company's Common Stock to key employees of the Company
and its subsidiaries. During 1993, the Committee, consistent with its view that
stock options tie executive performance to shareholder interests, reviewed with
the Chief Executive Officer each executive's scope of accountability over the
strategic results of the Company based on his or her organizational position,
level of responsibility and subjective performance evaluations. The Company
utilizes a Hay Compensation Group formula for determining the relative ranking
of position values and responsibilities.
The Committee, in determining the number of options granted each year, takes
into consideration the number of options available for grant over the remaining
years of the Plan, dilution after giving effect to severely "underwater"
options, and the anticipated overall performance of the Company. Based on this
evaluation, the Committee recommended to the Board that a pool of 500,000 the
market-priced stock options be awarded to 58 executives. These awards were
effective on the customary August 1 award date.
During 1993, the Company promoted Mr. Quesnel to Executive Vice President.
Consequently in December, a stock option for 60,000 shares was made to Mr.
Quesnel to reflect his increased influence on the Company's results. Similarly,
Mr. Robertson was granted an option to purchase 40,000 shares in recognition of
his extraordinary performance over the past ten years as President of Con-Way.
Under the Long-Term Incentive Plan of 1988 and its predecessor, the Long-
Term Incentive Plan of 1978, key employees of the Company and its subsidiaries,
including the named executives, have previously been awarded growth units
entitling them to certain cash benefits upon such units vesting and
appreciating in value. No awards were granted in 1993.
-20-
<PAGE>
CEO COMPENSATION
The CEO's salary increase for 1993 was based on a subjective evaluation of
his performance by the Compensation Committee and competitive salary data
provided by the Company's executive compensation consultants.
Mr. Moffitt returned to the employ of the Company in 1990 and was elected
President and Chief Executive Officer in 1991. The initiatives and programs put
in place since his return have resulted in dramatic improvements in the
Company's performance. Some of the key measures of this improvement are set
forth below.
COMPANY PERFORMANCE
<TABLE>
<CAPTION>
Change from
1990 1993 1990 to 1993
---- ---- ------------
<S> <C> <C> <C>
Net Earnings (Loss)-(in thousands) $(40,727) $ 31,607 $ +72,334
Net Margin -1.0% 0.8% +1.8 pts
Primary Earnings per Share (EPS) $ (1.16) $ 0.87 $ +2.03
Return on Equity (ROE) -7% 8% +15 pts
Market Value-(in thousands) $411,253 $996,122 142.2%
Long-Term Debt & Capital Leases 673,611 408,409 -39.4%
Debt to Total Capital Ratio 54% 40% -14 pts
</TABLE>
ON-GOING REVIEW OF COMPENSATION
The Company has engaged an executive compensation consulting firm to advise
the Committee on various compensation matters. The consulting firm has been
asked to continue its review of the Company's existing executive compensation
programs to determine the extent to which they are compatible with long-term
shareholder objectives, support the future direction of the Company,
differentiate and reward for component company performance, and attract and
retain high caliber talent. The consulting firm has also been asked to make
recommendations for a new long-term incentive plan tied to performance of
component companies and overall corporate performance.
The Committee has not yet developed a policy with respect to amending pay
policies or asking shareholders to vote on "pay for performance" plans in order
to qualify compensation in excess of $1 million a year which may be paid to the
five highest-paid executives for federal tax deductibility. Under current
compensation plans and deferral elections, no executive officer's compensation
subject to the deductibility limit will exceed $1 million in 1994, even if all
performance goals are attained under the Company's short-term incentive plans.
The Compensation Committee intends to consider the matter further when final
regulations on this subject are issued under the Internal Revenue Code. At that
time, the Committee will balance the interests of the Company in maintaining
flexible incentive plans against the possible loss of a tax deduction should
taxable compensation for any of the five highest-paid executives exceed $1
million in future years.
The foregoing report is approved by all members of the Committee.
THE COMPENSATION COMMITTEE
Robert Alpert, Chairman Richard B. Madden
G. Robert Evans Robert D. Rogers
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Committee set forth above are all independent directors of
the Company and have no other relationships with the Company and its
subsidiaries. Mr. Raymond F. O'Brien, Chairman of the Board, served on the
Compensation Committee until December 6, 1993, when he resigned from the
Committee. He was appointed to the Committee in 1992. He is a former executive
officer of the Company, but has not served as an officer since 1991.
-21-
<PAGE>
A COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN*
Consolidated Freightways, Inc., S & P 500 Index, Peer Group Index
Total Returns with Dividends Reinvested on Pay Date Base 12/31/88
Composite Market Cap Weighted
Quarter Peer S & P
Ending CNF Group 500
- --------- --- ----- -----
12/31/93 76 162 197
9/30/93 51 145 193
6/30/93 52 124 188
3/31/93 55 140 187
12/31/92 57 142 179
9/30/92 43 117 171
6/30/92 42 125 165
3/31/92 56 139 162
12/31/91 50 122 166
9/30/91 38 114 154
6/30/91 52 113 146
3/31/91 53 109 146
12/31/90 38 91 128
9/30/90 43 81 117
6/30/90 42 102 136
3/31/90 52 116 128
12/31/89 83 105 132
9/30/89 99 111 129
6/30/89 89 92 117
3/31/89 91 92 107
12/31/88 100 100 100
All Data per Georgeson & Co. 1/20/94
*Assumes $100 invested on December 31, 1988 in Consolidated Freightways, Inc.,
S & P 500 Index and a Peer Group Index, described below, and that any dividends
were reinvested.
The Peer Group Index is a market-capitalization weighted index comprised of
the common stock of the following companies: Airborne Freight Corporation,
Arkansas Best Corporation, Carolina Freight Corporation, Federal Express
Corporation, Roadway Services, Inc., TNT Freightways Corporation and Yellow
Corporation.
A five-year cumulative total shareholder return graph, such as the one above,
may be useful in assessing management's performance over that period of time.
However, a new management team charged with restoring the Company's financial
strength was put in place during 1990 to deal with the problems that arose
following the acquisition of Emery Air Freight Corporation in April, 1989. For a
shareholder today it is far more useful to focus on the Company's performance
since this new management team was installed and addressed the serious
financial and operational issues left behind by former management.
The chart to the right shows total shareholder returns, assuming $100 was
invested on December 31, 1990 in Consolidated Freightways, Inc., the S&P 500
Index, and the Peer Group Index as defined above, with any dividends reinvested.
As this chart demonstrates, under direction of new management, the stock of the
Company has outperformed the broad S & P index and the Peer Group index over
this period of time.
Total Returns with Dividends Reinvested on Pay Date Base 12/31/90
Composite Market Cap Weighted
Quarter Peer S & P
Ending CNF Group 500
- --------- --- ----- -----
12/31/93 200 178 154
9/30/93 134 159 151
6/30/93 137 136 147
3/31/93 145 154 146
12/31/92 150 156 140
9/30/92 113 129 134
6/30/92 111 137 129
3/31/92 147 153 127
12/31/91 132 134 130
9/30/91 100 125 120
6/30/91 137 124 114
3/31/91 139 120 114
12/31/90 100 100 100
All Data per Georgeson & Co. 1/20/94
-22-
<PAGE>
PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFITS
The following table shows the estimated combined annual benefits payable
upon retirement to full-time and certain part-time non-contractual employees on
the Company's domestic payroll under the Company's Pension and Retirement Plans,
Supplemental Retirement Plan and Excess Benefit Plan (the "Plans").
Years of Plan Participation
------------------------------------------------
Average Final Total Earnings
During Highest Five
Consecutive Years of Last
Ten Years of Employment 15 20 25 30 35
- ---------------------------- -------- -------- -------- -------- --------
$200,000 $ 50,588 $ 69,410 $ 88,263 $107,115 $127,115
$300,000 77,558 106,410 135,263 164,115 194,115
$400,000 104,558 143,410 182,263 221,115 261,115
$500,000 131,558 180,410 229,263 278,115 328,115
$600,000 158,558 217,410 276,263 335,115 395,115
$700,000 185,558 254,410 323,263 392,115 462,115
$800,000 212,558 291,410 370,263 449,115 529,115
The compensation covered under the Plans whose benefits are summarized in
the Pension Plan Table above is the highest five-year average over the last ten
years of employment of the amounts shown in the "Salary" and "Bonus" columns of
the Summary Compensation Table on page ____. The pension benefit is reduced by
the vested amount of the employee's account in the Company's Common Stock Fund.
The Common Stock Fund operates together with the Plans as a "floor/offset"
arrangement. Pension benefits under the Plans are provided first by the value of
shares of the Company's Common Stock Fund, with any remainder being paid under
the Plans. All full-time and certain part-time non-contractual employees on the
Company's domestic payroll participate in the Common Stock Fund. Final
allocations were made at year-end 1993. In 1933, Messrs. Moffitt, Lawrence,
Robertson, Curry, and Quesnel were each allocated 151 shares of Company Common
Stock with a value of $3,564.
The Internal Revenue Code of 1986, as amended, limits the annual benefits
which may be paid from a tax-qualified retirement plan to $118,800. The Company
has adopted the Supplemental Retirement Plan and the Excess Benefit Plan to
provide for payment out of the Company's general funds of benefits calculated
under the Pension and Retirement Plans which may be above that dollar limit.
As of December 31, 1993, Messrs. Moffitt, Lawrence, Robertson, Curry and
Quesnel had 26, 21, 22, 25 and 18 years of Plan participation, respectively.
Retirement benefits shown are payable at or after age 65 in the form of a
single life annuity, using the current level of Social Security benefits to
compute the adjustment for such benefits.
-----------------------
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APPROVAL OF EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS
The Board of Directors recommends the adoption of the Equity Incentive Plan
for Non-Employee Directors (the "Plan"). The Plan provides for the issuance of
up to 150,000 shares of the Company's Common Stock through awards of restricted
and/or stock options to directors of the Company who are neither officers nor
employees of the Company ("Non-Employee Directors").
The primary purpose of the Plan is to give Non-Employee Directors a direct
interest in the Company's attainment of its financial goals through stock
ownership and thereby to align their interests more closely with the interests
of shareholders of the Company. The text of the Plan is set forth in Appendix A
to the proxy statement. The following is a summary of the Plan and should be
read together with the full Plan text.
If approved, the Plan will be administered by the Compensation Committee of
the Board of Directors (the "Committee"). While the Committee is authorized to
interpret the Plan, prescribe, amend and rescind rules relating to the Plan, and
generally to make such determinations and take such actions it deems advisable
which are not contrary to the express terms of the Plan, the Committee has no
discretion to determine the Non-Employee Directors to receive awards under the
Plan or the timing of the awards or otherwise to alter the terms of the Plan.
RESTRICTED STOCK AWARDS
The Plan provides for the automatic grant of awards of Common Stock of the
Company to Non-Employee Directors ("Restricted Stock Awards"). Immediately
following approval of the Plan by the shareholders, each Non-Employee Director
will receive a Restricted Stock Award consisting of Common Stock with a fair
market value of $12,500. The awards will be made in lieu of an annual retirement
accrual of $15,000 previously given to Non-Employee Directors.
Following the initial awards, any person first appointed or elected to the
Board who qualifies as a Non-Employee Director immediately following such
appointment or election will receive a Restricted Stock Award, as of the date of
such election or appointment, having a fair market value of $12,500. In
addition, beginning January 1, 1995, and on each January 1 thereafter, each Non-
Employee Di rector who is a director on that date will receive a Restricted
Stock Award as of that date having a fair market value of $12,500.
For purposes of the Plan, the fair market value of the Company's Common
Stock is deemed to be the grant date composite closing price for such Common
Stock on the New York Stock Exchange ("NYSE"), or if the Common Stock is not
traded on the date of grant, on the immediately preceding trading day. The total
number of shares of Common Stock awarded to an individual Director on each award
date is determined by dividing $12,500 by such fair market value of the Common
Stock.
Generally, shares of Common Stock received pursuant to a Restricted Stock
Award may not be sold, assigned, pledged, hypothecated, transferred or
otherwise disposed of by the Non-Employee Director until five years from the
date of grant. If a Non-Employee Director voluntarily resigns or is removed for
cause as a Board member before completion of the fifth year, the shares of
Common Stock granted pursuant to such Restricted Stock Award will be forfeited.
The restrictions lapse sooner than five years immediately upon (1)
termination of the director's service as a result of death, disability,
retirement or failure to be nominated or elected as a Board member, (2) a merger
or consolidation of the Company in which the Company is not the surviving
corporation, (3) sale of substantially all of the assets of the Company or
acquisition of 50% of the outstanding stock of the Company by another entity,
and (4) a "change in control" of the Company, which is deemed to have occurred
if, during any two year period, the individuals who comprise the Board at the
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beginning of the period (along with any successor nominated or elected by two-
thirds of such directors) cease to constitute a majority of the Board at any
time during that period.
During the period in which the stock is restricted, the Non-Employee
Director will have the right to vote and to receive any dividends and payments
on such stock.
STOCK OPTIONS
The Plan also includes a contingent feature providing for automatic grants
to the Non-Employee Directors of options ("Options") to purchase Common Stock at
an exercise price equal to the fair market value of the stock on the date the
Option is granted. No stock options will be granted until the Committee
activates the stock option feature, and specifies the number of shares subject
to an annual option grant to each Non-Employee Director, not to exceed 1,000
shares (the "Annual Amount"). The automatic Option grant provisions of the Plan
are contingent and may never be activated. However, if shareholders approve the
Plan, the Committee will have the ability to activate this contingent feature
of the Plan without further shareholder approval.
If the contingent Option grant feature of the Plan is implemented, an option
to purchase the Annual Amount of shares of Common Stock will be granted (1) on
January 1 of the first year which begins at least six months after such feature
has become effective to each person who is an Non-Employee Director on such
grant date and (2) to other Non-Employee Directors elected or appointed to the
Board after such January 1 date on the date each first becomes a Director of
the Company. On January 1 of each year thereafter, each Non-Employee Director
will be granted an Option to purchase the Annual Amount of shares of Common
Stock.
Each Option granted will be evidenced by a stock option agreement which may
contain such terms and conditions as may be determined by the Committee and not
inconsistent with the Plan. Each Option to be granted under the Plan would vest
and become exercisable as to 1/12 of the shares covered thereby on a monthly
basis such that the option would be fully exercisable one year after its date of
grant. The term of the option will be no longer than ten years from the date of
grant.
Each Option granted pursuant to the Plan would be exercisable only by that
director during his or her lifetime, and the Option would not be transferable
by such director by operation of law or otherwise other than by will or the laws
of descent and distribution.
The exercise price per share of Common Stock covered by each Option would be
equal to the composite closing price for the Common Stock on the NYSE on the
date of grant, or if the Common Stock is not traded on the date of grant, on the
immediately preceding trading day.
SHARES SUBJECT TO THE PLAN
One Hundred Fifty Thousand (150,000) shares of the Company's Common Stock
are authorized for issuance under the Plan. This authorization may be increased
from time to time by approval of the Board and by the shareholders of the
Company. Appropriate adjustments in the number and class of shares subject to
outstanding and future Options and Restricted Stock Awards will be made by the
Committee for stock splits, stock dividends, recapitalizations,
reorganizations, mergers, acquisitions, etc.
Shares of Common Stock which are issued as Restricted Stock Awards, and
Options to purchase Common Stock granted under the Plan, reduce the maximum
number of shares of Common Stock remaining available for issuance under the
Plan. Any shares of Common Stock that are issued as Restricted Stock Awards, but
later forfeited, will not be available for reissuance under the Plan. In the
event that any Option granted under the Plan lapses or otherwise terminates
prior to being fully exercised, any shares of stock allocable to the
unexercised portion of such grant will again be available for future Restricted
Stock Awards or grants of Options under the Plan.
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AMENDMENT AND TERMINATION OF THE PLAN
In general, the Board may amend or terminate the Plan without shareholder
approval (unless shareholder approval is required by law). However, no
amendment may be made more than once every six months, other than to comply with
changes in applicable law or regulation. In no event may the dollar value of
the annual Restricted Stock Award be increased from $12,500 to more than $25,000
per Non-Employee Director, nor may the Annual Amount for Options be increased
to more than 1,000 shares of Common Stock per Non-Employee Director. Any
amendment or modification to the Plan may not affect any Restricted Stock Award
or Option previously granted.
Unless sooner terminated by the Board, the Plan terminates ten years after
the date the Plan is approved by shareholders. No Options or Restricted Stock
Awards may be granted after termination of the Plan.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the federal income tax consequences to the
Non-Employee Directors and the Company.
Restricted Stock--Unless an election is made under Section 83 (b) of the
Internal Revenue Code, Non-Employee Directors who receive Restricted Stock
Awards will recognize taxable income as of the date on which the restrictions on
the Common Stock lapse in the amount of the fair market value of the stock at
that time. Non-Employee Directors may elect under Section 83 (b) of the Code to
report as taxable income in the year of the Restricted Stock Award an amount of
ordinary income equal to the Common Stock's fair market value at that time. If
such an election is made, the electing Non-Employee Director is not required
thereafter to report any further compensation income upon becoming vested in
the stock covered by the election.
The Company will be entitled to a tax deduction to the extent and in the
year that ordinary income is recognized by the Non-Employee Director. Dividends
paid on Common Stock awarded under the Plan are generally treated as additional
compensation before the restrictions lapse, but are treated as true dividends
after the restrictions lapse (or after a Section 83 (b) election). Dividends are
not deductible by the Company.
If a Non-Employee Director forfeits Common Stock received pursuant to a
Restricted Stock Award, and no Section 83 (b) election has been made, he or she
will not recognize any income or loss. In addition, if an Non-Employee Director
forfeits Common Stock for which a Section 83 (b) election has been made, no
loss or deduction is allowed with respect to the amount previously included in
income as a result of the Section 83 (b) election.
Non-Employee Directors will recognize gain or loss upon the disposition of
their stock equal to the difference between (1) the amount realized on such
disposition and (2) the ordinary income recognized with respect to their stock
under the principles set forth above. That gain or loss will be recognized as
long or short term capital gain or loss depending on whether the stock was held
for at least one year.
Stock Options--Generally, a Non-Employee Director will recognize no taxable
income as the result of the grant of an Option. Upon exercise of an Option, a
Non-Employee Director will normally recognize ordinary compensation income for
federal tax purposes equal to the excess of the then fair market value of the
shares over the exercise price. The Company will be entitled to a tax deduction
to the extent and in the year that ordinary income is recognized by the Non-
Employee Director.
Upon a sale of shares acquired pursuant to the exercise of an Option, any
difference between the sale price and the fair market value of the shares on the
date of exercise will be treated as capital
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gain or loss, and will qualify for long-term capital gain or loss treatment if
the shares have been held for more than twelve months.
VOTE REQUIRED
Approval of the adoption of the Plan requires the affirmative vote of the
holders of a majority of the voting power represented at the Annual Meeting. For
this purpose, abstentions from voting will have the same effect as a vote
against the proposal, while broker non-votes will be disregarded and have no
effect on the outcome of the vote on the proposal.
The following table illustrates the benefits that would be received in 1994 by
the Non-Employee Directors pursuant to the Restricted Stock Awards under the
Plan, assuming the stock value set forth in the footnote. No officer or employee
will receive any benefits under the Plan.
<TABLE>
<CAPTION>
Restricted
Stock Shares of
Name Award ($) Common Stock (1)
- ---- ---------- ----------------
<S> <C> <C>
Per Director $ 12,500 529
All Non-Employee Directors $137,500 5,819
</TABLE>
- ---------
(1) There are currently 11 Non-Employee Directors. The number of shares of
Common Stock granted to each Non-Employee Director pursuant to a Restricted
Stock Award will be determined by dividing $12,500 by the fair market value
of the Company's Common Stock. The fair market value is deemed to be the
composite closing price for such Common Stock on the New York Stock
Exchange on the date of grant. The fair market value of the Common Stock on
December 31, 1993 was $23.625 per share, and that value was used for
determining the number of shares of Common Stock in the above table.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF THE
---
EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS
________________________________________
APPOINTMENT OF AUDITORS
At last year's annual meeting, shareholders approved the appointment of
Arthur Andersen & Co. as independent public accountants to audit the
consolidated financial statements of the Company for the year ended December 31,
1993. The Board recommends that shareholders vote in favor of the reappointment
of Arthur Andersen & Co. as the Company's Independent auditors for the year
ending December 31, 1994. A representative of the firm will be present at the
Annual Meeting of Shareholders with the opportunity to make a statement if he or
she desires to do so and to respond to questions from shareholders.
The Company has been informed by Arthur Andersen & Co. that neither the firm
nor any of its members or their associates has any direct financial interest or
material indirect financial interest in the Company or its affiliates.
________________________________________
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SHAREHOLDER PROPOSAL NO. 1-A
A shareholder proponent has stated his intention to present the following
proposal at the 1994 Annual Meeting. The proposal and supporting statement, for
which the Board of Directors and Company accept no responsibility, are set
forth on the following pages. The Board opposes this proposal for the reasons
stated after such proposal.
John F. (Jack) Boyle, of 4124 Nichandros Street, Castro Valley, California,
the owner of 2,000 shares of the Company's Common Stock, has submitted the
following resolution for vote by the shareholders.
BE IT RESOLVED: That the stockholders of Consolidated Freightways, Inc. (CF)
urge that the Board of Directors take the necessary steps to declassify the
Board of Directors for the purpose of director elections, which shall be done in
a manner that does not affect the unexpired terms of directors previously
elected.
PROPONENT'S SUPPORTING STATEMENT
Staggered board terms don't serve the best interests of CF and its
shareholders.
The Board of CF is divided into three classes serving staggered three-year
terms. This means that it would take three years and three separate votes for
shareholders to replace the whole board.
CF's stated purpose is to provide continuity and prevent manipulative
takeovers. But a staggered board is unnecessary since as a Delaware company,
state law provides ample protection from hostile bidders. "Providing continuity"
really means shareholders can't hold directors accountable in annual elections.
Only 52.85% of the shareholders supported management's classified board
proposal in 1985, a slim margin reflecting shareholder concern about management
entrenchment. Events have borne this out:
. The board learned of possible insider trading involving the chief
executive officer, other CF employees and a securities firm. The
Board filed a lawsuit, which stated,
CF alleges that defendant...and others have conspired and are
continuing to conspire to obtain and trade on inside information
from CF.
CF has taken the deposition of Defendant and others. The
information discovered during those depositions supports its
allegations...
In 1992 the court ruled that the board brought the suit to the wrong
forum. Rather than bringing it to the proper forum, the Company did
nothing.
. The company's own chairman sold 32,500 shares of CF stock at $36.75
a share, a value of $1,194,375.00 days before the announced
takeover of Emery in February 1989. Following the takeover, CF stock
slid by more than 50%.
. In 1993, the board approved an incentive plan for its Emery division
diverting most Emery profits to a management bonus pool. But the
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board failed to disclose this plan until months after company
executives openly trumpeted Emery's newfound profitability. Many
investors purchased CF stock during this period of optimistic
reports. When the plan was disclosed publicly, CF stock value
declined by nearly 20%, or more than $113 million in market value.
. The Board's management of Emery and its important Express Mail
contract with the U.S. Postal Service remains troubled. The U.S.
Justice Department opened a fraud probe. Congress asked its General
Accounting Office to review the big government contract settled
outside the normal open-bidding process. The USPS also required a
remedial ethics policy special for Emery.
. Between 1990 and 1992 the Board oversaw an increase in executive
compensation to the top five executives of 76% even though the
stock declined by nearly 30%.
Generally, shareholders have grown hostile to classified boards, rejecting
three of the four management proposals to classify a board in 1992, and
overturning a staggered board at Martin Marietta in 1993, according to the
Investor Responsibility Research Center.
For the reasons outlined above, you are encouraged to vote FOR this
proposal.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
This advisory proposal is sponsored by an employee of a Company subsidiary who
is a member of the International Brotherhood of Teamsters. It is virtually
identical to a proposal sponsored at the Company's 1993 Annual Meeting by
another member of the Teamsters Union. Despite an active solicitation conducted
and financed by the Teamsters in favor of last year's proposal, the Company's
shareholders defeated that proposal by a substantial margin.
The Company believes that this proposal, together with the proposal on pages
____ of this proxy statement sponsored by another member of the Teamsters
Union, is made in furtherance of the Teamsters' continuing efforts to harass and
pressure the Company and its subsidiaries in connection with various labor-
management matters. For example, THE JOURNAL OF COMMERCE reported on November
30, 1993: "Seeking to flex their muscles prior to critical contract
negotiations, Teamsters union activists are working to place shareholder
resolutions on ballots of the three largest unionized trucking companies for
consideration at their annual meetings next April." The Company and two other
corporations, whose subsidiaries are currently in joint contract negotiations
with the Teamsters Union, are the identified targets of these proposals.
The Company believes that shareholders' support of this proposal will
encourage and prolong the eighteen month-old effort by the Teamsters to use
corporate governance and other corporate campaign tactics to harass and pressure
the Company or its subsidiaries into entering into labor agreements that are
contrary to the interest of the Company's shareholders.
The proponent's supporting statement appears designed to attack the Company
and its management, rather than address the issue of a classified Board on its
merits. While the Company believes that the proponent's supporting statement is
replete with inaccurate statements and inferences, we see no productive purpose
in using this proxy statement to respond to these allegations. Instead, we will
address the issue of a classified Board on its merits.
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<PAGE>
We believe the proposal is not in the best interests of the Company or its
shareholders for a number of reasons.
In 1985, the Company's shareholders considered and approved an amendment to
the Company's Certificate of Incorporation to provide for the classification of
the Board of Directors into three equal or nearly equal classes, each to serve
for terms of three years, with one class being elected each year.
The Board of Directors firmly believes that classification gives the Board a
greater continuity of experience, since at any one time approximately one third
of the Board will be in its third year of service. In addition, the Board of
Directors believes that a classified Board serves as an obstacle to any sudden
and disruptive attempts to obtain control of the Company. For example,
throughout the 1980s there were a number of attempts by various individuals and
entities to acquire significant minority positions in certain companies with the
intent of obtaining actual control of the companies by electing their own slate
of directors, or of achieving some other goal, such as the repurchase of their
shares at a premium, by threatening to obtain such control. These insurgents
often threaten to elect a company's entire board of directors through a proxy
contest or otherwise, even though they do not own a majority of the company's
outstanding shares entitled to vote. The Company's classified Board may
discourage such purchases because its provisions operate to delay the
purchaser's ability to obtain control of the Board in a relatively short period
of time. The delay arises because, at a minimum, two successive annual meetings
are required in order to elect a majority of the Board of Directors. For this
reason, a person seeking to acquire control of the Company also is encouraged to
initiate such action through arm's length negotiations with management and the
Board of Directors, who are in a position to negotiate a transaction that is
fair to all of the Company's shareholders.
For these reasons, approximately half of the Fortune 500 companies provide for
the staggered election of directors. Statistics compiled by the Investor
Responsibility Research Center, Inc. show that shareholders of public companies
have overwhelmingly supported the use of classified boards, as indicated by the
fact that in responding to shareholder proposals to eliminate classified boards
in 1993 an average of only 30.3% of all shares were voted for elimination.
If approved, the proposal would serve as a recommendation to the Board of
Directors to take the necessary steps to eliminate the classified Board. Such
steps would require the repeal of the classified board provision in the
Company's Certificate of Incorporation, which in accordance with the terms
approved by the Company's shareholders in 1985, could not be done without the
favorable vote, at a shareholders' meeting, of the holders of at least 80% of
the then-outstanding shares of voting stock of the Company.
As stated above, the Company's shareholders last year considered a virtually
identical proposal, and voted against it by a substantial margin.
THE BOARD OF DIRECTORS BELIEVES IT IS IN THE INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS TO REJECT THE PROPOSAL AND RECOMMENDS A VOTE AGAINST THE
SHAREHOLDER PROPOSAL.
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------------------------
SHAREHOLDER PROPOSAL No. 1-B
A shareholder proponent has stated his intention to present the following
proposal at the 1994 Annual Meeting. The proposal and supporting statement, for
which the Board of Directors and Company accept no responsibility, are set forth
on the following pages. The Board opposes this proposal for the reasons stated
after such proposal.
James R. Weaver, of 2298 Riverwoods Trails, Florissant, Missouri, the owner of
2000 shares of the Company's Common Stock, has submitted the following
resolution for vote of the shareholders.
RESOLVED: That the stockholders of Consolidated Freightways, Inc. ("Company")
recommend that the Board of Directors take the necessary steps to adopt and
implement a policy of confidential voting at all meetings of its shareholders,
and that this includes the following provisions:
1. That the voting of all proxies, consents and authorizations be secret, and
that no such document shall be available for examination nor shall the vote
or identity of any shareholder be disclosed except to the extent necessary to
meet the legal requirements, if any, of the company's state of incorporation;
and
2. That the receipt, certification, and tabulation of such votes shall be
performed by independent election inspectors.
PROPONENT'S SUPPORTING STATEMENT
Voting can only fairly reflect a voter's conviction when the process is free
of potential coercion. Secret balloting is considered essential to such a
process.
Major institutional investors support confidential voting, including many of
the prominent funds that own sizable shares of CF stock.
Protecting confidentiality is important so that shareholders feel free to
oppose management nominees and vote on resolutions without fear of management
intervention.
Money managers can jeopardize business relationships by their voting
positions. The gravity of this problem is demonstrated by the finding by the
Investor Responsibility Research Center's study that a majority of those
surveyed faced resolicitation from company management after they submitted their
proxy.
Some shareholders of the company do business with various firms connected to
incumbent directors. Other shareholders are customers. These connections create
the possibility of pressure.
Employee shareholders at CF, who own more than 13% of the stock, are
especially vulnerable. The company has made personal criticism of employee
shareholders for opposing management efforts.
Many shareholders believe confidentiality can be assured by holding stock in a
street or nominee name. This is not the case; some brokers or nominees reveal
their customers' votes. Moreover, a shareholder who own stock in a street or
nominee name is giving up important legal rights such as access to corporate
records that are given only to shareholders of record.
In fact, the Company does offer confidentiality to several thousand
shareholders, including every manager, holding through certain employee stock
plans. If it is good enough for them, why not for all shareholders?
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<PAGE>
Many companies are adopting confidential voting policies, including Sears,
Baxter International, Weyerhaeuser, General Signal, Unisys, and W.R. Grace.
Shareholders at Avon, Lockheed, and USX enacted confidential voting over
management opposition. At National Intergroup, management tried to get
shareholders to accept limited confidentiality, but 69.9 percent of shares voted
instead in favor of full confidentiality.
Last year, a Teamster employee-shareholder at Anheuser-Busch asked the
company to adopt confidential voting, and the company agreed.
For these reasons, we urge you to vote FOR the resolution.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
This advisory proposal is sponsored by a former employee of a Company
subsidiary who was a member of the Teamsters Union prior to his retirement. The
Company believes that this proposal, together with the proposal on pages _____
of this proxy statement, is made in furtherance of the Teamsters' continuing
efforts to harass and pressure the Company and its subsidiaries in connection
with various labor-management matters. For example, THE JOURNAL OF COMMERCE
reported on November 30, 1993: "Seeking to flex their muscles prior to critical
contract negotiations, Teamsters union activists are working to place
shareholder resolutions on ballots of the three largest unionized trucking
companies for consideration at their annual meetings next April." The Company
and two other corporations, whose subsidiaries are currently in joint contract
negotiations with the Teamsters union, are the identified targets of these
proposals.
The Company believes that shareholder support of this proposal will only
encourage and prolong the eighteen month-old effort by the Teamsters to use
corporate governance and other corporate campaign tactics to harass and
pressure the Company or its subsidiaries into entering into labor agreements
that are contrary to the interests of the Company's shareholders.
We believe that the proposal is not in the best interests of the Company or
its shareholders for a number of reasons.
The Board of Directors must serve in the best interests of all shareholders,
large and small, individual and institutional. To so serve, the Board must be
able to determine and to understand as clearly as possible how shareholders with
different expectations vote on various issues. An open vote, rather than a
confidential vote, fosters this process. The present open voting process has
served the Company's shareholders in a fair and democratic manner for many
years and furthers the interests of all shareholders.
Voting by shareholders is not analogous to voting in the political process.
In the political process, representatives of the voters are elected by secret
ballot. In turn, the representatives vote by open ballot so that their vote may
be determined and understood by those they represent. In the corporate voting
process, many of those voting are managers of pension and mutual funds, who are
acting in a representative capacity for the individuals whose money they
manage. As representatives, their vote should be open and understood, not
secret and unexplained.
Recently, the Securities and Exchange Commission ("SEC") adopted extensive
revisions to the rules which govern the solicitation of proxies. Although
confidential voting had been advocated by some, the SEC did not mandate
confidential voting. In addition, the new SEC proxy rules substantially expand
the ability of shareholders to communicate among themselves, and in many cases
on a confidential basis. Your Board believes that at a time when the rights of
shareholders to communicate with each other are being expanded, the Board's
ability to communicate with shareholders should not be restricted.
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The proponent's supporting statement implies that shareholders may have
been, or may be, coerced into voting with the Board of Directors. The Board
states unequivocally that it knows of no such coercion and that such action
would be contrary to Company policy. The proponent's suggestion of possible
pressure or the appearance of retaliation is entirely hypothetical. The rights
of the shareholders of the Company to vote or give a proxy free from any
pressure or threat of retaliation are expressly affirmed.
The Board of Directors believes that the proponent's proposal to keep
shareholder votes confidential is unnecessary to protect shareholders who wish
to cast a confidential vote. Under the current system, any shareholder, by
registering his or her shares in the name of a bank, broker, or other nominee,
may vote confidentially, since nominee holders do not disclose the names of
beneficial owners without specific permission. Further, shares held by
employees in the Company's benefit plans are held in trust and voted by
trustees who are not permitted to disclose to anyone how the employee has voted.
Under the present process, shareholders may communicate with the Company by
writing comments on their proxy card. This is one way the small shareholder may
choose to express to the Company his or her views. The Board believes that it is
desirable to maintain this dialogue through the open vote process and not make
it more difficult by having confidential voting.
The Company believes that members of the Company's Board (and others who may
solicit proxies on behalf of the Board) should continue to have the opportunity
to contact shareholders for a variety of reasons during a proxy solicitation.
They may need to contact those who have not returned their proxy cards in order
to encourage their participation and help assure a legally sufficient and sub-
stantial vote, or to contact those whose proxy cards contain obvious errors or
deficiencies so that they may correct their proxies and cast their votes as
intended. This is especially important in light of the serious difficulties
experienced by the Automatic Data Processing, Inc. ("ADP") system during the
1993 proxy season in tabulating the votes of institutional investors who hold in
"street name". Likewise, shareholders should continue to have the opportunity
to send a message to the Board through an identifiable voice and, as noted
above, through comments written on their proxy cards.
SHAREHOLDER PROPOSAL NO. 2
The Company has been advised that Larry E. Ellison, who also is an employee
of a Company subsidiary and a member of the Teamsters Union, intends to submit
the following proposal for a vote at the meeting:
RESOLVED: That the Board of Directors take the necessary steps to remove the
by-law requirement that 80% of the outstanding shares must be voted to change
the structure of the Board.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
The Company believes that this proposal, like the proposal on pages
_________ of this proxy statement, is made in furtherance of the Teamsters'
continuing efforts to harass and pressure the Company and its subsidiaries in
connection with various labor-management matters. In this regard, we refer to
the quote from THE JOURNAL OF COMMERCE cited on page _____ of this proxy
statement. The Company believes that shareholder support of this proposal will
only encourage and prolong the eighteen month-old effort by the Teamsters to
use corporate governance and other corporate campaign tactics to harass and
pressure the Company or its subsidiaries into entering into labor agreements
that are contrary to the interests of the Company's shareholders.
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We believe that the proposal is not in the best interests of the Company or
its shareholders.
In 1985, the Company's shareholders considered and approved an amendment to
the Company's Certificate of Incorporation which provides that the classified
Board provision cannot be modified or repealed without the favorable vote, at a
shareholders' meeting, of the holders of at least 80% of the then-outstanding
shares of voting stock of the Company. Following such shareholder approval, the
Board of Directors adopted a conforming amendment to the Company's By-laws.
Accordingly, under the Company's governing documents the Board is not empowered
to eliminate the 80% vote requirement without an 80% vote of shareholders. In
addition, the Company believe s that the 80% vote requirement in the Certificate
of Incorporation was approved by shareholders in order to insure that the
benefits recognized by shareholders in voting for the classification of the
Board could not be eliminated unless the holders of at least 80% of the then
outstanding shares thought it was beneficial to do so.
THE BOARD OF DIRECTORS BELIEVES IT IS IN THE INTERESTS OF THE COMPANY AND
ITS SHAREHOLDERS TO REJECT THE PROPOSAL AND RECOMMENDS A VOTE AGAINST THE
SHAREHOLDER PROPOSAL. -------
________________________________________
PRINCIPAL SHAREHOLDERS
According to information furnished to the Company as of December 31, 1993,
the only persons known to the Company to beneficially own an interest in 5% or
more of the shares of Common Stock or Series B Preferred Stock are as follows:
Name and Address Amount and Mature of Percent of
of Beneficial Owner Beneficial Ownership Class
- ------------------- ---------------------- ----------
T. Rowe Price Associates, Inc. 8,590 Common (1) 0.02%
And T. Rowe Price Trust Company 843,382 Preferred (1) 8.7%
100 East Pratt Street
Baltimore, MD 21202
FMR Corp. 2,010,213 Common (2) 5.6%
82 Devonshire Street
Boston, MA 02109
The Capital Group, Inc. 2,107,360 Common (3) 5.8%
333 South Hope Street
Los Angeles, CA 90071
State of Wisconsin Investment Board 3,348,600 Common (4) 9.4%
P.O. Box 7842
Madison, WI 53707
(1) T. Rowe Price Associates, Inc. ("Price Associates") has sole voting power
over 6,800 shares, shared voting power over 4,385,586 shares, sole
dispositive power over 8,590 shares and shared dispositive power over
4,385,586 shares. T. Rowe Price Trust Company, the trustee under the
Company's Thrift and Stock Plan ("Trust Company"), has sole voting power
over 0 shares, shared voting power over 4,385,586 shares, sole dispositive
power over 0 shares and shared dispositive power over 4,385,536 shares.
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<PAGE>
These holdings include 8,590 shares of Common Stock and 843,382 shares of
Preferred Stock (which Preferred Stock is held pursuant to the Consolidated
Freightways, Inc. Thrift and Stock Plan). Each record share of Preferred
Stock has the right to 5.2 noncumulative votes on each matter submitted to
the meeting. The Preferred Stock is convertible at the trustee's option
under certain circumstances into four shares of Common Stock for each share
of Preferred Stock. On a fully converted basis, these holdings represent
8.7% of the Common Stock and 11.00% of the voting power.
Price Associates serves as investment adviser with shared power to vote the
securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates and the Trust Company are deemed to
be beneficial owners of the Common Stock and Preferred Stock which has not
been allocated to participant's accounts under the Thrift and Stock Plan.
However, Price Associates and the Trust Company expressly disclaim that
they are, in fact, the beneficial owners of such securities.
(2) FMR Corp., through its subsidiary Fidelity Management & Research Company,
has sole voting power over 0 shares, shared voting power over 0 shares,
sole dispositive power over 2,010,213 shares and shared dispositive power
over 0 shares. FMR Corp., through its subsidiary Fidelity Management Trust
Company, has sole voting power over 59,668 shares and shared voting power,
sole dispositive power and shared dispositive power over 0 shares.
According to its most recent Schedule 13G, FMR Corp. also holds 1,096,900
Depositary Shares, each representing one-tenth of a share of Series C
Conversion Preferred Stock. Each Depository Share will automatically
convert into one share of Common Stock, plus unpaid dividends in the form of
cash or additional common stock, on March 15, 1995 or earlier at the option
of the Company.
(3) The Capital Group, Inc., through its subsidiaries, has sole voting power
over 221,030 shares, shared voting power over 0 shares, sole dispositive
power over 2,107,360 shares and shared dispositive power over 0 shares.
Certain operating subsidiaries of the Capital Group, Inc., exercised
investment discretion over various institutional accounts which held as of
December 31, 1993, 2,107,360 shares of Common Stock. Capital Guardian Trust
Company, a bank, and one of such operating companies, exercised investment
discretion over 429,360 of such shares. Capital Research and Management
Company, and Capital International, Inc., registered investment advisers,
and Capital International, S.A., another operating subsidiary, had
investment discretion with respect to 1,453,000, 8,500 and 140,000,
respectively, of such shares.
(4) State of Wisconsin Investment Board has sole voting power over 3,348,600
shares, shared voting power over 0 shares, sole dispositive power over
3,348,600 shares and shared dispositive power over 0 shares.
COMPLIANCE WITH THE EXCHANGE ACT
The Securities Exchange Act of 1934 requires the Company's executive
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and the New York Stock Exchange. The rules also require executive officers and
directors to file annual reports with the Commission disclosing (1) any exempt
transactions which occurred during the last fiscal year that were not previously
reported and (2) any currently reportable transactions for which executive
officers and directors should have made filings (but did not) for the last two
years.
By Commission regulation, they are also required to furnish the Company with
copies of all such filings. Based solely on its review of the copies of filings
received, and/or written representations made, the Company believes that all
filing requirements applicable to its executive officers, directors, and
greater than ten percent beneficial owners were complied with in 1993.
------------------------------
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<PAGE>
CERTAIN LITIGATION
On January 31, 1994, Timothy J. Buban, an individual who is an employee of
a Company subsidiary and a member of the International Brotherhood of Teamsters
(the "IBT"), filed a purported class action in the United States District Court
for the Northern District of California in which Raymond F. O'Brien, the
Company's Chairman of the Board, and an executive with a Company subsidiary,
were named defendants. The complaint alleges that the defendants violated Rules
10b-5 and 14e-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and are liable under Section 20A of the Exchange Act, in
connection with sales of shares of the Company's Common Stock in early February
1989, prior to the time the Company entered into and publicly announced an
agreement to acquire Emery Air Freight Corporation. The class action is asserted
on behalf of persons who purchased the Company's Common Stock between February
3, 1989 and February 10, 1989. The Company is not a party to the lawsuit. The
plaintiff alleges that he purchased 2.84 shares of the Company's Common Stock
for a total of $100 on February 9, 1989. The defendants have advised the
Company that they believe the allegations are entirely without merit and that
they intend to defend against these allegations vigorously. The defendants also
have advised the Company that they believe this lawsuit is part of the
continuing corporate campaign being waged against the Company and its management
by the IBT for the purpose of harassing and pressuring the Company and its
subsidiaries in connection with various labor-management matters. The defendants
intend to respond to the Complaint on or before March 18, 1994.
------------------------------
FUTURE SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 1995
Annual Meeting of Shareholders must be received by the Company by November 18,
1994, for inclusion in the proxy statement and form of proxy relating to that
meeting.
------------------------------
OTHER MATTERS
The Company will furnish to interested shareholders, free of charge, a copy
of its 1993 Annual Report to the Securities and Exchange Commission on Form
10-K. The report will be available for mailing after April ______, 1994. Please
direct your written request to the Corporate Secretary, Consolidated
Freightways, Inc., 3240 Hillview Avenue, Palo Alto, CA 94304.
Your Board knows of no other business that will come before the meeting. If
a proposal relating to [confidential voting/declassification of the Board of
Directors] that was excluded from this proxy statement in accordance with the
applicable provisions of Rule 14a-8 of the Securities Exchange Act of 1934 is
properly brought before the meeting, it is intended that the proxy holders will
use their discretionary authority to vote the proxies against the proposal. If
any other matters are properly brought before the meeting, it is intended that
the proxies will be voted in accordance with the best judgment of the proxy
holders.
------------------------------
The expense of proxy solicitation will be borne by the Company. The
solicitation is being made by mail and may also be made by telephone, telegraph,
facsimile, or personally by directors, officers, and regular employees of the
Company who will receive no extra compensation for their services. In addition,
the Company has engaged the services of Georgeson & Company, Inc., New York, New
York, to assist in the solicitation of proxies at a fee of $7,500, plus
expenses. The Company has also engaged Chemical Bank to act as inspector of
elections. The Company will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy material to beneficial owners of the Company's voting stock.
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<PAGE>
YOU ARE RESPECTFULLY REQUESTED TO EXERCISE YOUR RIGHT TO VOTE BY FILLING IN,
DATING AND SIGNING THE ENCLOSED WHITE PROXY AND RETURNING IT IN THE ENVELOPE
ENCLOSED FOR YOUR CONVENIENCE.
BY ORDER OF THE BOARD OF DIRECTORS
MARYLA R. BOONSTOPPEL
Vice President and Secretary
March 18, 1994
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<PAGE>
APPENDIX A
CONSOLIDATED FREIGHTWAYS, INC.
EQUITY INCENTIVE PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION 1
INTRODUCTION
1.1 ESTABLISHMENT. Consolidated Freightways, Inc., a Delaware corporation (the
"Company"), hereby establishes the Consolidated Freightways, Inc. Equity
Incentive Plan for Non-Employee Directors (the "Plan") for those directors
("Directors") of the Company who are neither officers nor employees of the
Company. The Plan provides for the grant of restricted stock awards and stock
options to Directors of the Company.
1.2 PURPOSES. The purposes of the Plan are to encourage the Directors to own
shares of the Company's stock and thereby to align their interests more closely
with the interests of the other stockholders of the Company, to encourage the
highest level of Director performance by providing the Directors with a direct
interest in the Company's attainment of its financial goals, and to provide a
financial incentive that will help attract and retain the most qualified
Directors.
1.3 EFFECTIVE DATE. The Effective Date of the Plan (the "Effective Date")
shall be the date the Plan is approved by stockholders of the Company. This
Plan and each award granted hereunder is conditioned on approval of the Plan by
the Company's stockholders at the 1994 Annual Meeting of Stockholders in
accordance with the requirements of Rule 16b-3 and the NYSE (as defined below).
SECTION 2
DEFINITIONS
2.1 DEFINITIONS. The following terms shall have the meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means a committee consisting of members of the Board who
are empowered hereunder to take actions in the administration of the
Plan. The Committee shall be so constituted at all times as to permit the
Plan to comply with Rule 16b-3 ("Rule 16b-3") promulgated under the
Securities Exchange Act of 1934 (the "1934 Act"). Members of the Committee
shall be appointed from time to time by the Board, shall serve at the
pleasure of the Board and may resign at any time upon written notice to
the Board.
(c) "Director" means a member of the Board who is neither an officer nor
an employee of the Company. For purposes of the Plan, an employee is an
individual whose wages are subject to the withholding of federal income
tax under Section 3401 of the Internal Revenue Code, and an officer is an
individual elected or appointed by the Board or chosen in such other
manner as may be prescribed in the bylaws of the Company to serve as such.
-A1-
<PAGE>
(d) "Fair Market Value" means the closing price of the Stock as reported
on The New York Stock Exchange ("NYSE") Composite Tape on a particular
date. If there are no Stock transactions on such date, the Fair Market
Value shall be determined as of the immediately preceding date on which
there were Stock transactions on the NYSE. If the Stock is not listed on
the NYSE at the time of an award, the Fair Market Value of the Stock on
the particular date shall be as determined by the Committee using a
reference comparable to the NYSE, such as the National Market System of
the National Association of Securities Dealers Automated Quotation System
or such other exchange or automated quotation system on which the Stock is
then traded.
(e) "Internal Revenue Code" means the Internal Revenue Code of 1986, as it
may be amended from time to time.
(f) "Option" means an option to purchase Stock granted to a Director
pursuant to Section 7 hereof that is subject to certain restrictions
imposed in accordance with the provisions of the Plan.
(g) "Restricted Stock Award" means an award of Stock granted to a Director
pursuant to Section 6 hereof that is subject to certain restrictions
imposed in accordance with the provisions of the Plan.
(h) "Stock" means the Common Stock, $0.625 par value, of the Company.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context, the
masculine gender shall also include the feminine gender, and the definition of
any term herein in the singular shall also include the plural.
SECTION 3
PLAN ADMINISTRATION
The Committee shall be responsible for the administration of the Plan.
However, subject to the ability of the Board to amend the Plan pursuant to
Section 10 hereof, the Committee shall have no authority, discretion or power to
select the Directors who will receive Restricted Stock Awards or Options,
determine the Restricted Stock Awards or Options to be granted pursuant to the
Plan, the number of shares of Stock to be issued thereunder or the time at
which such Restricted Stock Awards or Options are to be granted (subject in
each case to Section 7 hereof), establish the duration and nature of Restricted
Stock Awards or Options or alter any other terms or conditions specified in the
Plan, except in the sense of administering the Plan subject to the provisions of
the Plan. Subject to the foregoing limitations, the Committee, by majority
action thereof, is authorized to interpret the Plan, prescribe, amend and
rescind rules and regulations relating to the Plan, provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company and make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. No member of the Committee shall be liable for any
action or determination made in good faith. The determinations, interpretations
and other actions of the Committee pursuant to the provisions of the Plan shall
be binding and conclusive for all purposes and on all persons.
-A2-
<PAGE>
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. One Hundred Fifty Thousand (150,000) shares of Stock are
authorized for issuance under the Plan in accordance with the provisions of the
Plan and subject to such restrictions or other provisions as the Committee may
from time to time deem necessary. This authorization may be increased from time
to time by approval of the Board and by the stockholders of the Company if, in
the opinion of counsel for the Company, such stockholder approval is required.
Shares of Stock which are issued as Restricted Stock Awards shall be applied to
reduce the maximum number of shares of Stock remaining available for use under
the Plan. In the event that any Option grant hereunder lapses or otherwise
terminates prior to being fully exercised, any shares of Stock allocable to the
unexercised portion of such grant shall again be available for future Restricted
Stock Awards or grants of Options under the Plan. The Company shall at all times
during the term of the Plan retain as authorized and unissued Stock at least the
number of shares from time to time required under the provisions of the Plan, or
otherwise assure itself of its ability to perform its obligations hereunder.
4.2 EFFECT OF FORFEITURES AND TERMINATIONS ON SHARES AVAILABLE. Any shares of
Stock that are subject to a Restricted Stock Award and which are forfeited
shall not be available for reissuance under the Plan. In the event that any
Option grant hereunder terminates prior to being fully exercised, the shares of
Stock underlying the unexercised portion of such Option shall again be
available for Restricted Stock Awards or grants of Options under the Plan.
4.3 ADJUSTMENT PROVISIONS.
(a) If:
(i) any recapitalization, reclassification, spin-off, split-up or
consolidation of Stock is effected;
(ii) the outstanding shares of Stock are exchanged, in connection with a
merger or consolidation of the Company or a sale by the Company of all or
a part of its assets, for a different number or class of shares of stock
or other securities of the Company or for shares of the stock or other
securities of any other corporation;
(iii) new, different or additional shares or other securities of the
Company or of another company are received by the holders of Stock; or
(iv) any distribution is made to the holders of Stock other than a cash
dividend;
Then the appropriate adjustments will be made to:
(i) the number and class of shares or other securities that may be issued
or transferred pursuant to outstanding Options or Restricted Stock Awards;
(ii) the number and class of shares or other securities available for
issuance under the Plan; and
(iii) the purchase price to be paid per share under outstanding Options.
-A3-
<PAGE>
(b) Upon the dissolution or liquidation of the Company, the Plan shall
terminate, and, except as otherwise provided herein, all Options previously
granted shall terminate on the date of such dissolution or liquidation of the
Company; provided that a Director shall have the right to exercise any Option
held by him (either before or during the Option Period) immediately prior to
such dissolution or liquidation to the full extent not theretofore exercised.
(c) Adjustments under subparagraph (a) of this Section 4.3 shall be made
according to the sole discretion of the Committee, and its decision shall be
binding and conclusive, subject to any legally required approval of the Board of
Directors or of any other entity.
(d) Except as provided in subparagraphs (a) and (b) of this Section 4.3, the
issuance by the Company of shares of capital stock of any class, or securities
convertible into shares of capital stock of any class shall not affect Options
or Restricted Stock Awards hereunder.
4.4 DIVIDEND PAYABLE IN STOCK OF ANOTHER CORPORATION, ETC. If the Company
shall at any time pay or make any dividend or other distribution upon the Stock
payable in securities or other property (except money), a proportionate part of
such securities or other property shall be set aside and delivered to any
Director then holding a Restricted Stock Award upon lapse of all restrictions
applicable to such Restricted Stock Award. Prior to the time that any such
securities or other property are delivered to a Director in accordance with the
foregoing, the Director shall, subject to the same forfeiture provisions
applicable to the Restricted Stock Award to which such securities or other
property relates, be the owner of such securities or other property and shall
have the right to vote the securities, receive any dividends payable on such
securities and in all other respects shall be treated as the owner. If
securities or other property which have been set aside by the Company in
accordance with this Section are not delivered to a Director because
restrictions applicable to such Restricted Stock Award do not lapse and such
Stock is forfeited, then such securities or other property shall be forfeited
to the Company and shall be dealt with by the Company as it shall determine in
its sole discretion.
4.5 RIGHTS TO SUBSCRIBE. If the Company shall at any time grant to the holders
of its Stock rights to subscribe pro rata for additional shares thereof or for
any other securities of the Company or of any other corporation, there shall be
reserved with respect to the shares then outstanding pursuant to any Restricted
Stock Award the Stock or other securities which the Director would have been
entitled to subscribe for if immediately prior to such grant the restrictions
applicable to such Restricted Stock Award had lapsed. Upon the lapse of all
restrictions applicable to Stock held pursuant to a Restricted Stock Award the
Director shall be provided the opportunity to subscribe for the additional
shares or other securities issuable with respect to such shares of Stock.
4.6 GENERAL ADJUSTMENT RULES. No adjustment or substitution provided for in
this Section 4 shall require the Company to issue a fractional share of Stock,
and the total substitution or adjustment with respect to each Restricted Stock
Award shall be limited by deleting any fractional share. In the case of any such
substitution or adjustment appropriate adjustments shall be made to Restricted
Stock Awards to reflect any such substitution or adjustment.
4.7 DETERMINATION BY THE COMMITTEE, ETC. Adjustments under this Section 4
shall be made by the Committee, whose determinations with regard thereto shall
be final and binding upon all parties thereto.
SECTION 5
PARTICIPATION
Each Director shall receive Options or Restricted Stock Awards on the terms
and conditions set forth under the Plan. Each Director shall, if required by the
Committee, enter into an agreement with the Company, in such form as the
Committee shall determine and which is consistent with the provisions of the
Plan. In the event of any inconsistency between the provisions of the Plan and
any such agreement entered into hereunder, the provisions of the Plan shall
govern.
-A4-
<PAGE>
SECTION 6
RESTRICTED STOCK AWARDS
6.1 INITIAL RESTRICTED STOCK AWARDS. Upon the Effective Date of the Plan, each
Director who is then a member of the Board shall receive a Restricted Stock
Award having a value, as determined pursuant to Section 6.3 below, of $12,500.
Thereafter any person first appointed or elected to the Board who qualifies as a
Director immediately following such appointment or election, shall receive a
Restricted Stock Award, as of the date of such election or appointment having a
value determined pursuant to Section 6.3 below, of $12,500. Grants pursuant to
this Section 6.1 are referred to in this Plan as "Initial Restricted Stock
Awards."
6.2 SUBSEQUENT RESTRICTED STOCK AWARDS. Beginning January 1, 1995, and on each
January 1 thereafter, each Director who is a Director on that date, shall
receive a Restricted Stock Award as of that date (a "Subsequent Restricted Stock
Award") having a value, determined pursuant to Section 6.3 below, of $12,500.
6.3 DATE OF GRANT, NUMBER OF SHARES. The Initial Restricted Stock Award shall
be made, as applicable, on (i) the Effective Date or (ii) the date after the
Effective Date that a Director is first elected or appointed as a member of the
Board. Subsequent Restricted Stock Awards shall be made on January 1 of each
year, beginning January 1, 1995. The total number of shares of Stock included
in each such Restricted Stock Award shall be determined by dividing $12,500 by
the Fair Market Value of a share of Stock on the date of grant. In no event
shall the Company be required to issue fractional shares. Whenever under the
terms of this Section 6 a fractional share of Stock would otherwise be required
to be issued, an amount in lieu thereof shall be paid in cash based upon the
Fair Market Value of such fractional share.
6.4 RETENTION OF AWARD, TERMINATION. If after an Initial Restricted Stock
Award or Subsequent Restricted Stock Award, a Director voluntarily resigns or
is removed for cause as a Board member before completion of the fifth
anniversary of the date of the grant of such Restricted Stock Award, the shares
of Stock granted pursuant to such Restricted Stock Award shall be forfeited.
6.5 RESTRICTIONS. Except as otherwise provided in the Plan, shares of Stock
received pursuant to a Restricted Stock Award may not be sold, assigned,
pledged, hypothecated, transferred or otherwise disposed of until the
restrictions applicable to such Stock have lapsed pursuant to Section 6.6.
6.6 LAPSE OF RESTRICTIONS. Restrictions on Stock covered by a Restricted Stock
Award shall lapse upon the fifth anniversary of the date of grant of the
Restricted Stock Award. In addition, all restrictions on Stock covered by a
Restricted Stock Award shall lapse upon any of the following events:
(a) Upon the termination of a Director's service as a Board member as a
result of death, disability, retirement at normal retirement age for
directors, failure to be nominated for election as a director or failure
to be elected by stockholders as a Board member;
(b) In the event that the Company is merged or consolidated with another
corporation (other than a merger or consolidation in which the Company is
the continuing corporation and which does not result in any
reclassification or change of outstanding Stock), or if all or
substantially all of the assets or more than 50% of the outstanding Stock
of the Company is acquired by any other corporation, business entity or
person (other than a sale or conveyance in which the Company continues as
a holding company of an entity or entities that conduct the business or
businesses formerly conducted by the Company), or in case of a
reorganization (other than a reorganization under the United States
Bankruptcy Code) or liquidation of the Company; or
-A5-
<PAGE>
(c) In the event of a change of control of the Company. For purposes of
the Plan, a "change of control" shall be deemed to have occurred if
during any period of two consecutive years (not including any period prior
to the Effective Date), individuals who at the beginning of such period
constitute the Board (and any new director whose election by the Board or
whose nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority thereof.
6.7 PRIVILEGES OF A STOCKHOLDER. A Director shall have all voting, dividend,
liquidation and other rights with respect to Stock in accordance with its terms
received by him as a Restricted Stock Award under this Section 6.
6.8 ENFORCEMENT OF RESTRICTIONS. The Committee shall cause a legend to be
placed on the Stock certificates issued pursuant to each Restricted Stock Award
referring to the restrictions imposed in the Plan and, in addition, may in its
sole discretion require one or more of the following methods of enforcing such
restrictions:
(a) Requiring the Director to keep the Stock certificates, duly endorsed,
in the custody of the Company while the restrictions remain in effect; or
(b) Requiring that the Stock certificates, duly endorsed, be held in the
custody of a third party while the restrictions remain in effect.
SECTION 7
OPTION GRANTS
7.1 AUTHORIZING DATE. The Option grant provisions of the Plan shall not become
operative until that date after the Effective Date on which the Committee
adopts a resolution stating (i) that the Option grant provisions are thereafter
in effect ("Authorizing Date") and (ii) the number of shares of Stock to be
subject to each annual Option grant hereunder ("Annual Amount").
7.2 INITIAL OPTION GRANTS; SUBSEQUENT OPTION GRANTS. An option to purchase the
Annual Amount of shares of Stock shall be granted ("Initial Option Grant") (i)
on January 1 of the first year which begins at least six months after the
Authorizing Date to each person who is a Director on such grant date and (ii) to
other Directors elected or appointed to the Board after such January 1 date on
the date each first becomes a Director of the Company. Thereafter, on January 1
of each year, each Director who is a Director on that date shall be granted an
Option to purchase the Annual Amount of shares of Stock ("Subsequent Option
Grant").
7.3 EXERCISE PRICE FOR OPTIONS. The exercise price per share of Stock covered
by each Option shall be the Fair Market Value of the Stock on the date the
Option is granted. The exercise price of an Option granted under the Plan shall
be subject to adjustment to the extent provided in Section 4.3 hereof.
7.4 TERMS AND CONDITIONS OF OPTIONS. Each Option granted pursuant to the Plan
shall be evidenced by a written stock option agreement executed by the Company
and the Director to whom such Option is granted. The stock option agreement may
contain such other terms, provisions and conditions as may be determined by the
Committee and not inconsistent with the Plan. Each Option granted under the
Plan shall vest and become exercisable as to 1/12 of the shares covered thereby
on a monthly basis such that the option will be fully exercisable one year after
its date of grant.
-A6-
<PAGE>
7.5 ASSIGNABILITY OF OPTIONS. Each Option granted pursuant to the Plan shall,
during the Director's lifetime, be exercisable only by the Director, and the
Option shall not be transferable by the Director by operation of law or
otherwise other than by will or the laws of descent and distribution.
7.6 PAYMENT UPON EXERCISE. Payment of the exercise price upon exercise of any
Option granted under the Plan shall be made in whole or in part with cash or
cash equivalents (including personal checks).
SECTION 8
RIGHTS OF DIRECTORS
Nothing contained in the Plan or in any Option or Restricted Stock Award
granted under the Plan shall interfere with or limit in any way the right of
the stockholders of the Company to remove any Director from the Board pursuant
to the Certificate of Incorporation or bylaws of the Company, nor confer upon
any Director any right to continue in the service of the Company.
SECTION 9
GENERAL RESTRICTIONS
9.1 INVESTMENT REPRESENTATIONS. The Company may require any Director to whom
an Option or Restricted Stock Award is granted, as a condition of receiving
such Option or Restricted Stock Award or exercising an Option, to give written
assurances in substance and form satisfactory to the Company and its counsel to
the effect that such person is acquiring the Option or Stock subject to the
Restricted Stock Award or Option for his own account for investment and not with
any present intention of selling or otherwise distributing the same, and to
such other effects as the Company deems necessary or appropriate in order to
comply with Federal and applicable state securities laws.
9.2 COMPLIANCE WITH SECURITIES LAWS. Each Option or Restricted Stock Award
shall be subject to the requirement that, if at any time counsel to the Company
shall determine that the listing, registration or qualification of the shares
subject to such Option or Restricted Stock Award upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance of shares thereunder, such Restricted Stock Award
or Option may not be accepted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
9.3 TAXES. Each Director shall make appropriate arrangements for the
satisfaction of any applicable federal, state or local income or other tax
withholding requirements applicable to any Restricted Stock Award or Option
granted hereunder. In addition, each Director shall provide the Company with a
copy of any election which such Director may make under Section 83(b) of the
Code with respect to a Restricted Stock Award.
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<PAGE>
SECTION 10
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate and from time to time may amend or modify
the Plan; provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the stockholders
if stockholder approval is required to enable the Plan to satisfy any
applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that stockholder approval is otherwise necessary
or desirable and, provided further that (i) no amendment or modification shall
be made more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employment Retirement Income Security Act, or the
rules promulgated thereunder, (ii) in no event shall the dollar value under
Section 6 be increased from $12,500 to more than $25,000, and (iii) in no event
will the Annual Amount under Section 7 be increased to more than 1,000 shares
of Stock per Director.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options or Restricted Stock Awards theretofore granted
under the Plan without the consent of the Director holding such Options or
Restricted Stock Awards.
SECTION 11
REQUIREMENTS OF LAW
11.1 REQUIREMENTS OF LAW. The issuance of stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
11.2 FEDERAL SECURITIES LAW REQUIREMENTS. Awards granted hereunder shall be
subject to all conditions required under Rule 16b-3 to qualify the Option or
Restricted Stock Award for any exception from the provisions of Section 16(b) of
the 1934 Act available under that Rule. Such conditions shall be set forth in
the agreement with the Director which describes the Option or Restricted Stock
Award.
11.3 GOVERNING LAW. The Plan and all agreements hereunder shall be construed
in accordance with and governed by the laws of the State of California.
SECTION 12
DURATION OF THE PLAN
The Plan shall terminate ten years after the date the Plan is approved by
stockholders of the Company or at such earlier time as may be determined by the
Board, and no Options or Restricted Stock Awards shall be granted after such
termination.
-A8-
<PAGE>
PROXY
PRELIMINARY PROXY MATERIAL
CONSOLIDATED FREIGHTWAYS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CONSOLIDATED FREIGHTWAYS, INC.
The undersigned appoints E.F. CHEIT, G. ROBERT EVANS, R.E. POELMAN and each of
them, the proxies of the undersigned, with full power of substitution, to vote
the stock of CONSOLIDATED FREIGHTWAYS, INC., which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders to be held on Monday,
April 25, 1994 at 10:00 A.M. or at any adjournments or postponements thereof.
The proxies are authorized to vote in their discretion upon such other business
as may properly come before the meeting and any and all adjournments or
postponements thereof.
Election of four Class III directors for a three-year term.
Nominees: Robert Alpert
Robert Jaunich II
Raymond F. O'Brien
Robert P. Wayman
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
PLEASE SIGN THIS CARD ON THE REVERSE SIDE
<PAGE>
X Please mark your votes as in this example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR PROPOSALS 2 AND 3 AND AGAINST PROPOSALS 4 AND 5.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 4 AND 5.
1. Election of Directors (see reverse)
FOR / / WITHHELD / /
For, except vote withheld from the following nominee(s):
---------------------------------
2. Approval of Equity Incentive Plan for Non-Employee Directors
FOR / / AGAINST / / ABSTAIN / /
3. Approval of Independent Auditors
FOR / / AGAINST / / ABSTAIN / /
4. Shareholder Proposal No. 1-A on Declassification of Board of Directors/
Shareholder Proposal No. 1-B on Confidential Voting
FOR / / AGAINST / / ABSTAIN / /
5. Shareholder Proposal No. 2 on the 80% Vote Requirement to Alter Board
Structure
FOR / / AGAINST / / ABSTAIN / /
- --------------------------------------------------------------------------
The proxies are hereby authorized to vote in their discretion upon such other
matters as may properly come before the meeting and any adjournments or
postponements thereof. See "Other Matters" in the Consolidated Freightways,
Inc. Proxy Statement dated March 18, 1994.
- ---------------------------------- -----------------------------
SIGNATURE(S) DATE
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as an attorney, executor, administrator, trustee or
guardian, please give full title as such.
<PAGE>
PRELIMINARY PROXY MATERIAL
CONSOLIDATED FREIGHTWAYS, INC. COMMON STOCK FUND
DIRECTION OF PARTICIPANT TO TRUSTEE OF
CONSOLIDATED FREIGHTWAYS, INC. COMMON STOCK FUND
The undersigned hereby directs the Trustee of the Consolidated Freightways,
Inc. Common Stock Fund to vote all shares of Consolidated Freightways, Inc.
common stock credited to the individual account of the undersigned under the
Common Stock Fund at the Annual Meeting of Shareholders of Consolidated
Freightways, Inc. to be held on Monday, April 25, 1994 at 10:00 A.M. or at
any adjournments or postponements thereof. The Trustee is hereby directed to
authorize the proxies to vote in their discretion upon such other business as
may properly come before the meeting and any and all adjournments or
postponements thereof.
Election of four Class III directors for a three-year term.
Nominees: Robert Alpert
Robert Jaunich II
Raymond F. O'Brien
Robert P. Wayman
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO DIRECT THE
TRUSTEE TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
PLEASE SIGN THIS CARD ON THE REVERSE SIDE
<PAGE>
X Please mark your votes as in this example.
THIS DIRECTION CANNOT BE VOTED UNLESS IT IS PROPERLY SIGNED AND RETURNED.
IF PROPERLY SIGNED AND RETURNED, THE TRUSTEE WILL VOTE AS DIRECTED BY THE
UNDERSIGNED OR, IF NO CHOICE IS SPECIFIED, THE TRUSTEE WILL VOTE FOR THE
ELECTION OF DIRECTORS, FOR PROPOSALS 2 AND 3, AND AGAINST PROPOSALS 4 AND 5
AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 4 AND 5.
1. Election of Directors (see reverse)
FOR / / WITHHELD / /
For, except vote withheld from the following nominee(s):
---------------------------------
2. Approval of Equity Incentive Plan for Non-Employee Directors
FOR / / AGAINST / / ABSTAIN / /
3. Approval of Independent Auditors
FOR / / AGAINST / / ABSTAIN / /
4. Shareholder Proposal No. 1-A on Declassification of Board of Directors/
Shareholder Proposal No. 1-B on Confidential Voting
FOR / / AGAINST / / ABSTAIN / /
5. Shareholder Proposal No. 2 on the 80% Vote Requirement to Alter Board
Structure
FOR / / AGAINST / / ABSTAIN / /
- --------------------------------------------------------------------------
The Trustee is hereby directed to authorize the proxies to vote in their
discretion upon such other business as may properly come before the meeting
and any and all adjournments or postponements thereof. See "Other Matters"
in the Consolidated Freightways, Inc. Proxy Statement dated March 18, 1994.
- ---------------------------------- -----------------------------
SIGNATURE(S) DATE
NOTE: Please sign exactly as name appears hereon.
<PAGE>
PRELIMINARY PROXY MATERIAL
CONSOLIDATED FREIGHTWAYS, INC. THRIFT AND STOCK PLAN
DIRECTION OF PARTICIPANT TO TRUSTEE OF
CONSOLIDATED FREIGHTWAYS, INC. THRIFT AND STOCK PLAN
(COMMON STOCK AND PREFERRED STOCK)
The undersigned hereby directs the Trustee of the Consolidated Freightways,
Inc. Thrift and Stock Plan to vote all shares of Consolidated Freightways,
Inc. common stock and preferred stock credited to the individual account of
the undersigned under the Plan at the Annual Meeting of Shareholders of
Consolidated Freightways, Inc. to be held on Monday, April 25, 1994 at
10:00 A.M. or at any adjournments or postponements thereof. The Trustee is
hereby directed to authorize the proxies to vote in their discretion
upon such other business as may properly come before the meeting and any
and all adjournments or postponements thereof.
Election of four Class III directors for a three-year term.
Nominees: Robert Alpert
Robert Jaunich II
Raymond F. O'Brien
Robert P. Wayman
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO DIRECT THE
TRUSTEE TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
PLEASE SIGN THIS CARD ON THE REVERSE SIDE
<PAGE>
X Please mark your votes as in this example.
THIS DIRECTION CANNOT BE VOTED UNLESS IT IS PROPERLY SIGNED AND RETURNED.
IF PROPERLY SIGNED AND RETURNED, THE TRUSTEE WILL VOTE AS DIRECTED BY THE
UNDERSIGNED OR, IF NO CHOICE IS SPECIFIED, THE TRUSTEE WILL VOTE FOR THE
ELECTION OF DIRECTORS, FOR PROPOSALS 2 AND 3, AND AGAINST PROPOSALS 4 AND 5
AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSALS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSALS 4 AND 5.
1. Election of Directors (see reverse) For, except vote withheld from
the following nominee(s):
FOR / / WITHHELD / / FOR / / AGAINST / / ABSTAIN / /
- ---------------------------------
2. Approval of Equity Incentive Plan for Non-Employee Directors
3. Approval of Independent Auditors
FOR / / AGAINST / / ABSTAIN / /
4. Shareholder Proposal No. 1-A on Declassification of Board of Directors/
Shareholder Proposal No. 1-B on Confidential Voting
5. Shareholder Proposal No. 2 on the 80% Vote Requirement to Alter Board
Structure
- --------------------------------------------------------------------------
The Trustee is hereby directed to authorize the proxies to vote in their
discretion upon such other business as may properly come before the meeting
and any and all adjournments or postponements thereof. See "Other Matters"
in the Consolidated Freightways, Inc. Proxy Statement dated March 18, 1994.
- ---------------------------------- -----------------------------
SIGNATURE(S) DATE
NOTE: Please sign exactly as name appears hereon.
<PAGE>
PRELIMINARY PROXY MATERIAL
SERIES B CUMULATIVE CONVERTIBLE PREFERRED STOCK
DIRECTION TO TRUSTEE
(USE ONLY IF YOU WISH TO VOTE PREFERRED SHARES SEPARATELY)
The undersigned hereby directs the Trustee of the Consolidated Freightways,
Inc. Thrift and Stock Plan to vote all shares of Consolidated Freightways,
Inc. preferred stock credited to the individual account of the undersigned
under the Plan at the Annual Meeting of Shareholders of Consolidated
Freightways, Inc. to be held on Monday, April 25, 1994 at 10:00 A.M. or at any
adjournments or postponements thereof.
THIS DIRECTION CANNOT BE VOTED UNLESS IT IS PROPERLY SIGNED AND RETURNED, IF
PROPERLY SIGNED AND RETURNED, THE TRUSTEE WILL VOTE AS DIRECTED BY THE
UNDERSIGNED OR, OF NO CHOICE IS SPECIFIED, THE TRUSTEE WILL VOTE FOR THE
---
ELECTION OF DIRECTORS, FOR PROPOSALS 2 AND 3, AND AGAINST PROPOSALS 4 AND 5 AS
--- -------
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
1. Election of Four Class III directors for a three-year term.
Nominees: Robert Alpert, Robert Jaunich II, Raymond F. O'Brien and
Robert P. Wayman
/ / Vote FOR all nominees listed above; except vote withheld from the following
nominees (if any):
------------------------------------------------------------------------
------------------------------------------------------------------------
/ / Vote WITHHELD from all nominees.
2. Approve Equity Incentive Plan for Non-Employee Directors.
FOR / / AGAINST / / ABSTAIN / /
3. Appointment of Arthur Andersen & Co. as the Company's auditors for the year
1994.
FOR / / AGAINST / / ABSTAIN / /
4. Declassification of Board/Confidential Voting.
FOR / / AGAINST / / ABSTAIN / /
5. Eliminate 80% Vote Requirement to Alter Board Structure.
FOR / / AGAINST / / ABSTAIN / /
The Trustee is hereby directed to authorize the proxies to vote in their
discretion upon such other business as may properly come before the meeting and
any and all adjournments or postponements thereof. See "Other Matters" in the
Consolidated Freightways, Inc. Proxy Statement dated March 18, 1994.
-----------------------------------
Signature of Participant Date
-----------------------------------
Name (Please Print)
-----------------------------------
Address (Please Print)
-----------------------------------
City State Zip Code
