<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CONSOLIDATED FREIGHT WAYS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
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NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1996
[CONSOLIDATED FREIGHTWAYS, INC. LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
[CONSOLIDATED FREIGHTWAYS, INC. LOGO]
3240 HILLVIEW AVENUE TELEPHONE: 415-494-2900
PALO ALTO, CALIFORNIA 94304
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Monday, April 29, 1996
9:00 A.M., Eastern Time
Du Barry Room, Hotel du Pont, 11th and Market Streets, Wilmington, Delaware
FELLOW SHAREHOLDER:
The Annual Meeting of Shareholders of the Company will be held at 9:00 A.M.,
Eastern Time, on Monday, April 29, 1996 to:
1. Elect four Class II directors for a three-year term.
2. Ratify the appointment of auditors.
3. Act upon a shareholder proposal, if properly presented at the meeting.
4. Transact any other business properly brought before the meeting.
Shareholders of record at the close of business on March 4, 1996, are
entitled to notice of and to vote at the meeting.
Your vote is important. Whether or not you plan to attend, I urge you to
SIGN, DATE AND RETURN THE ENCLOSED WHITE PROXY CARD IN THE ENVELOPE PROVIDED,
in order that as many shares as possible will be represented at the meeting. If
you attend the meeting and prefer to vote in person, you will be able to do so
and your vote at the meeting will revoke any proxy you may submit.
Sincerely,
MARYLA R. BOONSTOPPEL
Vice President and Secretary
March 22, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Proxy Statement............................................................. 1
Board of Directors' Recommendations....................................... 1
Proxy Voting Procedures................................................... 1
Voting Requirements....................................................... 1
Voting Shares Outstanding................................................. 1
Proxy Voting Convenience.................................................. 2
Attendance at the Meeting................................................. 2
Election of Directors....................................................... 2
Stock Ownership by Directors and Executive Officers......................... 9
Information About the Board of Directors and Certain Board Committees....... 10
Compensation of Directors................................................... 11
Compensation of Executive Officers.......................................... 12
I.Summary Compensation Table.............................................. 12
II.Option/SAR Grants Table................................................ 13
III.Option/SAR Exercises and Year-End Value Table......................... 14
IV.Long-Term Incentive Plan Awards Table.................................. 15
Compensation Committee Report on Executive Compensation..................... 15
Compensation Committee Interlocks and Insider Participation................. 19
A Comparison of Five-Year Cumulative Total Shareholder Return............... 19
Pension Plan Table.......................................................... 20
Appointment of Auditors..................................................... 20
Shareholder Proposal........................................................ 21
Principal Shareholders...................................................... 23
Compliance With Section 16 of the Exchange Act.............................. 24
Confidential Voting......................................................... 24
Submission of Shareholder Proposals......................................... 24
Other Matters............................................................... 25
</TABLE>
<PAGE>
CONSOLIDATED FREIGHTWAYS, INC.
3240 HILLVIEW AVENUE
PALO ALTO, CALIFORNIA 94304
TELEPHONE: 415/494-2900
PROXY STATEMENT
March 22, 1996
The Annual Meeting of Shareholders of Consolidated Freightways, Inc. (the
"Company") will be held on April 29, 1996. Shareholders of record at the close
of business on March 4, 1996 will be entitled to vote at the meeting. This
proxy statement and accompanying proxy are first being sent to shareholders on
or about March 22, 1996.
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 the appointment of Arthur Andersen LLP as independent auditors, and
against the shareholder proposal 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 who receive the greatest number of votes cast for
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 4, 1996, the record date for the Annual
Meeting, there were outstanding and entitled to vote 43,970,125 shares of
Common Stock and 951,838 shares of Series B Cumulative Convertible Preferred
Stock ("Series B Preferred Stock"). Each share of Common Stock has the right to
one non-cumulative vote and each share of Series B Preferred Stock has the
right to 5.2 non-cumulative votes. Therefore, an aggregate of 48,919,682 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
All shareholders are invited to attend the meeting. Due to the limited
seating capacity, persons who are not shareholders may attend only if invited
by the Board of Directors. IF YOU ARE A SHAREHOLDER BUT DO NOT OWN SHARES IN
YOUR NAME, YOU MUST BRING PROOF OF OWNERSHIP (E.G., A CURRENT BROKER'S
STATEMENT) IN ORDER TO BE ADMITTED TO THE MEETING.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
The Board of Directors of the Company, pursuant to the By-Laws, has
determined that the number of Directors of the Company shall be twelve.
Directors are elected by a plurality of the votes cast. Unless you withhold
authority to vote, your proxy will be voted for election of the nominees named
below.
The following persons are the nominees of the Board of Directors for election
as Class II directors to serve for a three-year term until the 1999 Annual
Meeting of Shareholders and until their successors are duly elected and
qualified:
Donald E. Moffitt
Ronald E. Poelman
Robert D. Rogers
William D. Walsh
If a nominee becomes unable or unwilling to serve, proxy holders are
authorized to vote for election of such person or persons as shall be
designated by the Board of Directors; however, management knows of no reason
why any nominee should be unable or unwilling to serve.
The Company has three classes of directors, each of which is elected for a
three-year term. Class III directors will be elected in 1997 and Class I
directors will be elected in 1998. All directors have previously been elected
by the shareholders, except William D. Walsh who was appointed by the Board as
a Class II director in September 1994, Margaret G. Gill who was appointed by
the Board as a Class III director in January 1995, and Richard A. Clarke, who
was appointed by the Board as a Class I director in January 1996.
In accordance with the Company's retirement policy for directors at age 72,
at the Annual Meeting of Directors held on April 29, 1995, Raymond F. O'Brien
retired as Chairman of the Board and as a director of the Company. Donald E.
Moffitt, the President and Chief Executive Officer of the Company and a Class
II director, was elected as Mr. O'Brien's successor as Chairman of the Board of
Directors.
IN MEMORIAM
It is with deep sorrow that the Board reports the death of Gerhard E. Liener,
a Class II Director of the Company, in Germany on December 14, 1995. Dr. Liener
will be remembered for his milestone accomplishments in a global financial
arena, including the acquisition by Daimler Benz of Freightliner Corporation
and the listing of Daimler Benz shares on the New York Stock Exchange, the
first German corporation to be listed on the Exchange.
2
<PAGE>
--------------------------------------------
CLASS II DIRECTORS
DONALD E. MOFFITT Director 1986-1988
Director since 1991
Chairman of the Board, President and Chief Executive
Officer,
Consolidated Freightways, Inc.
[PHOTO] Mr. Moffitt was named President and Chief Executive
Officer of the Company in 1991, and Chairman of the Board of
Directors in 1995. He joined Consolidated Freightways
Corporation of Delaware, the Company's nationwide, full-
service trucking 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 63,
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. Mr. Moffitt is Chairman of the Executive Committee
and serves on the Director Affairs Committee 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
[PHOTO] 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 67, is a graduate of the University of Utah
Law School and the Harvard Advanced Management Program. He
currently serves as Chairman of the Board of Deseret Trust
Company and of Deseret Gymnasium. Mr. Poelman is a member of
the Compensation and Director Affairs Committees of the
Company.
3
<PAGE>
ROBERT D. ROGERS Director since 1990
President and Chief Executive Officer,
Texas Industries, Inc.
a producer of steel, cement, aggregates and concrete
[PHOTO] 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 and
Dallas Medical Resource, and is a member of the Executive
Board for Southern Methodist University's School of
Business. Mr. Rogers, age 59, 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 Committee of the Company.
WILLIAM D. WALSH Director since 1994
General Partner, Sequoia Associates, a private investment
firm
[PHOTO] Mr. Walsh has been a general partner with Sequoia
Associates since the company was founded in 1982. The firm
has major investments in established operating companies.
From 1967 to 1982, Mr. Walsh served as Senior Vice President
and Chief Administrative Officer for the Arcata Corporation
of Menlo Park, California. Prior to that Mr. Walsh was a
consultant for McKinsey & Co. for six years, managing
projects involving acquisitions, organization structure and
strategic planning for major U.S. companies. From 1955 to
1961, Mr. Walsh served as Assistant U.S. Attorney for the
Southern District of New York and as Counsel to the New York
State Commission of Investigation. Mr. Walsh, age 65, earned
his law degree from Harvard Law School in 1955 and holds a
Bachelor of Arts degree from Fordham University. He
currently serves on the boards of directors for Newcourt
Credit Group, Inc.; URS Corporation; BVP, Inc. and the
National Education Corporation of Irvine, California. Mr.
Walsh is Chairman of Champion Road Machinery Limited of
Ontario, Canada; and the Newell Industrial Corporation of
Lowell, Michigan. He is also a member of the Board of
Visitors of the University of Southern California School of
Business, a member of the Visiting Committee of Harvard Law
School and a member of the Committee on University Resources
of Harvard University. He is a member of the Audit and the
Director Affairs Committees of the Company.
4
<PAGE>
--------------------------------------------
CLASS III DIRECTORS
ROBERT ALPERT Director since 1976
Chairman of the Board,
The Empire A.B.,
a Swedish diversified metals company
[PHOTO] Mr. Alpert is Chairman of the Board of The Empire A.B., a
Swedish group of companies dealing in aluminum, brass and
other metal products and services, and of Alpert
Corporation, a Dallas financial services and real estate
company formed in 1965. He is also Honorary Consul for
Sweden in Dallas. Mr. Alpert holds directorships with
Aladdin Industries, Inc., Texas Industries, Inc., and
Chaparral Steel Company. He is an advisory director for I.C.
Deal Companies, Heartland Capital Partners, Ltd. and Asia
Info Services. 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 of the Dallas Foundation for
Health, Education and Research, a public charity. He is also
a member of the Chief Executive Forum, World Business
Council and Young Presidents' Organization. Mr. Alpert, age
64, is a member of the Director Affairs, the Executive and
the Finance Committees of the Company.
MARGARET G. GILL Director since 1995
Senior Vice President-Legal, External Affairs
and Secretary,
AirTouch Communications,
a wireless communications company
[PHOTO] Mrs. Gill joined AirTouch Communications in 1994 following
a 20-year partnership in the law firm of Pillsbury, Madison
& Sutro in San Francisco. From 1983 to 1993, she served as
practice group manager and senior partner for the firm's
corporate and securities group, and as managing partner in
the Menlo Park, California office from 1991 to 1993. Mrs.
Gill earned her law degree in 1965 from Boalt Hall Law
School, University of California at Berkeley, and holds a
Bachelor of Arts degree from Wellesley College. She is a
fellow of the American Bar Foundation, serves on the
advisory board for the Institute for Corporate Counsel and
has served on several committees for the American Bar
Association and the California Bar Association. Mrs. Gill,
age 55, is also a member of the board of directors of the
Episcopal Diocese of California and a trustee and executive
committee member of the San Francisco Ballet. She is a
former director and general counsel for the United Way of
the Bay Area and a past trustee of St. Lukes Hospital
Foundation. Mrs. Gill is a member of the Audit and the
Compensation Committees of the Company.
5
<PAGE>
ROBERT JAUNICH II Director since 1992
Managing Director,
The Fremont Group,
a private investment corporation
[PHOTO] Mr. Jaunich joined The Fremont Group (formerly Bechtel
Investments, Inc.), a private investment corporation
managing assets in excess of $6.0 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, Chairman of the Managing General Partner of
Crown Pacific Partners, L.P., and 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 56, is a
graduate of Wesleyan University and The Wharton School,
University of Pennsylvania. Mr. Jaunich is Chairman of the
Director Affairs Committee and a member of the Executive and
the Finance Committees of the Company.
ROBERT P. WAYMAN Director since 1994
Executive Vice President,
Finance and Administration
and Chief Financial Officer,
Hewlett-Packard Company,
a computer-manufacturing company
[PHOTO] 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 50,
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 Board of Directors of
Sybase Inc., and is a member of the Board 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. He is a
member of the Audit and the Compensation Committees of the
Company.
6
<PAGE>
--------------------------------------------
CLASS I DIRECTORS
EARL F. CHEIT Director since 1976
Dean Emeritus, Haas School of Business
University of California at Berkeley
[PHOTO] Dr. Cheit has served on the University of California at
Berkeley 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 69,
is a member of the Board of Shaklee Corporation, Simpson
Manufacturing Co. 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 serves on the
Audit, the Executive and the Finance Committees of the
Company.
RICHARD A. CLARKE Director since 1996
Retired Chairman of the Board,
Pacific Gas and Electric Company,
one of the nation's largest utility companies
[PHOTO] Mr. Clarke retired from PG&E in 1995 after serving as
chairman of the board for nine years. As chairman and CEO he
oversaw management of a $10 billion company that produces
electric power and gas and is involved with power plant
construction. Mr. Clarke began his association with PG&E as
an attorney and served in various managerial positions
leading to his appointment as Chairman and CEO. Between 1960
and 1969 he was a partner in the law firm of Rockwell,
Fulkerson & Clarke. He is a member of the boards of
directors of PG&E, Potlatch Corporation and BankAmerica
Corporation and is a member of the President's Council of
Sustainable Development. He serves as director of the Bay
Area Council, Bay Area Economic Forum and the Business
Council. He is a member of the Board of Governors of the San
Francisco Symphony, the Board of Trustees of the Boalt Hall
Trust--University of California, Berkeley, School of Law,
and the Advisory Board of the Walter A. Haas School of
Business, University of California, Berkeley. Mr. Clarke has
previously held executive-level posts with the California
Roundtable, California Chamber of Commerce, Edison Electric
Institute and the President's Council on Environmental
Quality. A native of San Francisco, Mr. Clarke, 65, earned
his law degree from the University of California, Boalt
Hall, and holds a bachelor's degree in political science.
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
[PHOTO] 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
64, is a graduate of Wagner College with graduate studies at
the University of Pennsylvania and the University of
California at Los Angeles Graduate Schools of Business. He
is currently a director of Fibreboard Corporation and Swift
Energy Co. 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 Director Affairs Committee of
the Company.
RICHARD B. MADDEN Director since 1992
Retired Chairman and Chief Executive Officer,
Potlatch Corporation, a diversified forest products company
[PHOTO] Mr. Madden was Chief Executive Officer of Potlatch
Corporation from 1971 and Chairman of the Board from 1977
until his retirement in May of 1994. He was previously
associated with Mobil Oil Corporation where he served in
various management capacities for fifteen years. Mr. Madden
is a director of Potlatch Corporation, 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 the Board of
Governors of the San Francisco Symphony Association; Board
of Directors of the Smith-Kettlewell Eye Research Institute
and Board of Directors of the National Park Foundation. Mr.
Madden, age 66, 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
Chairman of the Compensation Committee and serves on the
Executive and Finance Committees of the Company.
8
<PAGE>
STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding beneficial ownership of
the Company's Common Stock and Series B Preferred Stock, as of January 31,
1996, by the directors, the five most highly compensated executive officers and
by the directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------------ ---------------------- --------
<S> <C> <C>
Robert Alpert.................................... 56,336 Common *
0 Series B Preferred
David I. Beatson(2).............................. 57,285 Common *
51 Series B Preferred
Earl F. Cheit.................................... 4,286 Common *
0 Series B Preferred
Richard A. Clarke................................ 919 Common *
0 Series B Preferred
W. Roger Curry(3)................................ 324,332 Common *
111 Series B Preferred
G. Robert Evans.................................. 6,286 Common *
0 Series B Preferred
Margaret G. Gill................................. 3,779 Common *
0 Series B Preferred
Robert Jaunich II................................ 10,786 Common *
0 Series B Preferred
Richard B. Madden................................ 6,286 Common *
0 Series B Preferred
Donald E. Moffitt(4)............................. 484,588 Common *
0 Series B Preferred
Ronald E. Poelman................................ 4,286 Common *
0 Series B Preferred
Gregory L. Quesnel(5)............................ 175,682 Common *
100 Series B Preferred
Robert T. Robertson(6)........................... 253,168 Common *
111 Series B Preferred
Robert D. Rogers................................. 11,786 Common *
0 Series B Preferred
William D. Walsh................................. 44,343 Common *
0 Series B Preferred
Robert P. Wayman................................. 4,286 Common *
0 Series B Preferred
All directors and executive officers as a group.. 1,564,143 Common 3.6%
(17 persons) 453 Series B Preferred
</TABLE>
- --------
* Less than one percent of the Company's outstanding shares of Common Stock.
(1) Represents shares as to which the individual has sole voting and investment
power (or shares such power with his or her spouse). The shares shown for
non-employee directors include the following
9
<PAGE>
number of shares of Restricted Stock, and shares which the non-employee
director has the right to acquire within 60 days of January 31, 1996 because
of vested stock options: Mr. Alpert, 1,536 and 2,750; Mr. Cheit, 1,536 and
2,750; Mr. Clarke, 502 and 417; Mr. Evans, 1,536 and 2,750; Mrs. Gill, 1,029
and 2,750; Mr. Jaunich, 1,536 and 2,750; Mr. Madden, 1,536 and 2,750; Mr.
Poelman, 1,536 and 2,750; Mr. Rogers, 1,536 and 2,750; Mr. Walsh, 1,593 and
2,750; and Mr. Wayman, 1,536 and 2,750. The Restricted Stock and stock
options were awarded under and are governed by the Amended and Restated
Equity Incentive Plan for Non-Employee Directors.
(2) The shares shown include 56,600 shares which Mr. Beatson has the right to
acquire within 60 days of January 31, 1996 because of vested stock options.
(3) The shares shown include 300,582 shares which Mr. Curry has the right to
acquire within 60 days of January 31, 1996 because of vested stock options.
(4) The shares shown include 447,212 shares which Mr. Moffitt has the right to
acquire within 60 days of January 31, 1996 because of vested stock options.
(5) The shares shown include 173,945 shares which Mr. Quesnel has the right to
acquire within 60 days of January 31, 1996 because of vested stock options.
(6) The shares shown include 251,798 shares which Mr. Robertson has the right
to acquire within 60 days of January 31, 1996 because of vested stock
options.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND CERTAIN BOARD COMMITTEES
During 1995, the Board of Directors held 8 meetings. Each incumbent director
attended at least 75% of all meetings of the Board and the committees of the
Board on which he or she served.
The Board of Directors currently has the following standing committees: Audit
Committee, Compensation Committee, Director Affairs Committee, Executive
Committee and Finance Committee. Effective January 1, 1996, the Charitable
Contributions Committee was dissolved and the Pension and Employee Benefits
Committee was merged into the Compensation Committee. In addition, the
responsibilities of the Advisory Nominating Committee were expanded to include
oversight of director compensation and other matters pertaining to the
functioning of the Board. In order to reflect these expanded responsibilities,
the name of the Advisory Nominating Committee was changed to the Director
Affairs Committee.
Descriptions of the Audit, Compensation and Director Affairs Committees
follow:
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 G.
Robert Evans--Chairman, Earl F. Cheit, Margaret G. Gill, William D. Walsh and
Robert P. Wayman. The Committee met 3 times during 1995.
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 short-term and long-term incentive
compensation plans and grants of stock options under the Company's Stock Option
Plan of 1988 and the administration of the retirement and benefit plans of the
Company and its domestic subsidiaries for non-contractual employees. The
members of the Compensation Committee are Richard B. Madden--Chairman, Margaret
G. Gill, Ronald E. Poelman, Robert D. Rogers and Robert P. Wayman. The
Committee met 5 times during 1995.
DIRECTOR AFFAIRS COMMITTEE: The Director Affairs Committee reviews the
qualifications of candidates to serve on the Board of Directors, consults with
the management of the Company
10
<PAGE>
concerning potential candidates and recommends to the Board of Directors
nominees for membership on the Board. The Committee also oversees directors'
compensation, reviews and considers other matters pertaining to the functioning
of the Board, and reviews and advises the Board regarding corporate governance
issues. Shareholders' proposals for nominees will be given due consideration by
the Committee for recommendation to the Board based on the nominees'
qualifications. Shareholder nominee proposals should be submitted in writing to
the Chairman of the Director Affairs Committee in care of the Corporate
Secretary. The members of the Director Affairs Committee are Robert Jaunich
II--Chairman, Robert Alpert, G. Robert Evans, Donald E. Moffitt, Ronald E.
Poelman and William D. Walsh. The Committee met 3 times during 1995.
COMPENSATION OF DIRECTORS
During 1995, each non-employee director (other than Raymond F. O'Brien) was
paid an annual retainer of $20,000 and accrued a retirement benefit of $20,000.
Mr. O'Brien, who served as Chairman of the Board during 1995 from January 1 to
April 29, but who was not an employee of the Company during that period, was
paid a retainer of $6,667 and a Chairman's fee of $33,333, and accrued a
retirement benefit of $6,667. Non-employee directors were also paid $1,000 per
Board meeting attended and $750 per Committee meeting attended. Chairmen of the
Audit, Compensation, Finance and Pension and Employee Benefits Committees
received an additional $3,000 and Chairmen of the Advisory Nominating and the
Charitable Contributions Committees received an additional $2,000.
Effective January 1, 1996, Board meeting fees were increased from $1,000 to
$1,500 per meeting attended, and Committee meeting fees were increased from
$750 to $1,000 per meeting attended. All Committee chairs will be paid chair
fees of $3,000 in 1996.
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.
A director of the Company accrues a retirement benefit for each full calendar
month he or she is a non-employee director of the Company in an amount equal to
one-twelfth of the annual cash retainer. The retirement benefit vests when a
director has served on the Board for five years. The amount accrued prior to
1994 was $30,000 per year of service. In 1994, $15,000 in retirement benefits
accrued and in 1995, $20,000 in retirement benefits accrued. Retirement
payments continue for the director's number of years of service as a non-
employee director up to a maximum of 20 years, with the earliest accruals paid
first.
A restricted stock grant having a fair market value of $12,500 was made to
each non-employee director following approval of the Equity Incentive Plan for
Non-Employee Directors by shareholders in 1994 and to non-employee directors
who joined the Board following the 1994 Annual Meeting of Shareholders. On each
of January 1, 1995 and January 1, 1996, in accordance with the terms of the
Amended and Restated Equity Incentive Plan for Non-Employee Directors (the
"Amended Plan"), an additional restricted stock grant having a fair market
value of $12,500 was made to each non-employee director serving on the Board at
that date. Restrictions lapse five years from the date of grant.
Stock options were granted on January 1, 1995 to each non-employee director
for 2,500 shares of Common Stock of the Company at an exercise price of
$22.375, the fair market value of the stock on that date. The January 1, 1995
stock option grant was subject to approval of shareholders of the Amended Plan
at the 1995 Annual Meeting, which approval was received. Directors joining the
Board after January 1, 1995 received options for 2,500 shares at an exercise
price equal to the fair market value of the stock on the date of joining the
Board. Under the Amended Plan, additional stock options were granted on January
1, 1996 to each incumbent non-employee director for 1,000 shares of Common
Stock of the Company at an exercise price of $26.50, the fair market value of
the stock on that date.
11
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
I. SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the Company's
Chief Executive Officer and the four next most highly paid executive officers
(the "Named Executives") for the three fiscal years ended December 31, 1995.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION(4)
------------------------------ ---------------
AWARDS
---------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND SALARY BONUS(2) COMPENSATION OPTIONS/ COMPENSATION
PRINCIPAL POSITION(S) YEAR $ $ (3) SAR'S (#) (5) ($)
- ----------------------- ---- -------- -------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Moffitt 1995 $650,000 $ 30,999 $ 3,538 175,000/0 $ 84,398
President & Chief 1994 618,038 561,548 38,621 77,000/0 89,556
Executive Officer 1993 600,028 603,028 50,370 52,500/0 88,175
W. Roger Curry(1) 1995 412,048 0 71,958 30,000/0 5,667
Senior Vice President 1994 363,944 419,740 83,648 105,375/0 9,455
1993 317,148 380,578 48,273 32,500/0 8,306
Robert T. Robertson(1) 1995 412,048 94,471 12,698 30,000/0 4,437
Senior Vice President 1994 363,944 357,849 23,826 30,375/0 6,955
1993 317,148 279,537 4,797 72,500/0 8,306
Gregory L. Quesnel 1995 350,272 12,850 2,960 30,000/0 3,306
Exec. Vice President & 1994 335,126 242,453 17,175 30,375/0 4,138
Chief Financial Officer 1993 300,040 241,232 7,174 92,500/0 4,084
David I. Beatson(1) 1995 288,808 57,781 0 25,000/0 3,230
Senior Vice President 1994 223,872 221,404 2,101 50,000/0 3,198
1993 160,537 110,256 587 6,600/0 4,336
</TABLE>
- --------
(1) Mr. Curry is also President and Chief Executive Officer of CF MotorFreight,
the Company's nationwide, full-service trucking subsidiary. Mr. Robertson
is also President and Chief Executive Officer of Con-Way Transportation
Services, Inc., the Company's regional trucking subsidiary. Mr. Beatson is
also President and Chief Executive Officer of Emery Air Freight
Corporation, the Company's air freight subsidiary.
(2) 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.
(3) Amounts shown for 1995 in this column include: (a) Long-Term Incentive Plan
interest earned and deferred for Messrs. Curry, Robertson and Quesnel of
$71,958, $385 and $237, respectively; (b) interest earned on deferred
compensation accounts above 120% of the applicable federal rate for Messrs.
Moffitt, Robertson and Quesnel of $2,472, $12,313 and $2,723, respectively;
and (c) payments by the Company, on behalf of Mr. Moffitt, totaling $1,066
for FICA tax liability. 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.
(4) There were no restricted stock awards and no long-term incentive payouts in
any of the three years.
(5) Amounts shown for 1995 in this column include:
(a) Payments by the Company for premiums for taxable group life insurance on
behalf of Messrs. Moffitt, Curry, Robertson, Quesnel and Beatson of
$10,881, $3,417, $2,187, $1,056, and $980 respectively.
(b) Company contributions to the Thrift and Stock Plan accounts of Messrs.
Curry, Robertson, Quesnel and Beatson of $2,250 each.
(c) Payments by the Company to Mr. Moffitt totaling $73,517, made pursuant
to the terms of his employment agreement with the Company as
compensation for retirement benefits no longer payable following his
return to the Company in 1990.
12
<PAGE>
II. OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT
DATE
PRESENT
INDIVIDUAL GRANTS(1) VALUE(3)
-------------------------------------------- --------
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL
OPTIONS/ OPTIONS/SARS EXERCISE
SARS GRANTED TO OR BASE
GRANTED EMPLOYEES IN PRICE EXPIRATION
(#)(2) FISCAL YEAR ($/SHARE) DATE ($)
---------- ------------ --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Donald E. Moffitt......... 100,000/0 16.19% $25.875 04/25/05 $975,000
75,000/0 12.15% $23.25 07/24/05 $607,500
W. Roger Curry............ 30,000/0 4.86% $23.25 07/24/05 $243,000
Robert T. Robertson....... 30,000/0 4.86% $23.25 07/24/05 $243,000
Gregory L. Quesnel........ 30,000/0 4.86% $23.25 07/24/05 $243,000
David I. Beatson ......... 25,000/0 4.05% $23.25 07/24/05 $202,500
</TABLE>
- --------
(1) No SARs were issued in 1995.
(2) All options are exercisable in whole or in part on the first anniversary of
the grant date or earlier upon a change in control of the Company.
(3) Present value based on modified Black-Scholes option pricing model which
includes assumptions for the following variables: (i) option exercise
prices equal the fair market values on the dates of grant; (ii) option term
equals 6.05 years, based on actual option exercises for exercisable options
granted since January, 1990; (iii) volatility equals 0.331; (iv) risk-free
interest rate equals 6.92% for the April 1995 grant and 6.30% for the July
1995 grants; and (v) estimated future average dividend yield equals 2.0%.
The Company's use of this model should not be construed as an endorsement
of its accuracy in valuing options. The Company's executive stock options
are not transferable so the "present value" shown cannot be realized by the
executive. Future compensation resulting from option grants will ultimately
depend on the amount by which the market price of the stock exceeds the
exercise price on the date of exercise.
13
<PAGE>
III. OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL-YEAR END OPTION/SAR VALUES
The following table provides information on option/SAR exercises in 1995 by
the Named Executives and the value of such officers' unexercised options/SARs
at December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END AT FY-END
VALUE (#)(2) ($)(2)(3)(4)(5)
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
--------------- -------- --------------- ------------------
<S> <C> <C> <C> <C>
Donald E. Moffitt....... 8,437(1) $14,062 447,212/175,000 $4,731,181/306,250
W. Roger Curry.......... 12,075(1) $20,125 325,001/30,000 2,728,791/97,500
Robert T. Robertson..... 3,637(1) $ 4,243 252,107/30,000 2,442,114/97,500
Gregory L. Quesnel...... 0 0 174,554/30,000 1,472,286/97,500
David I. Beatson........ 6,000 71,250 56,600/25,000 257,563/81,250
</TABLE>
- --------
(1) Expiration date for these options was December 31, 1995.
(2) Mr. Moffitt has 447,212 exercisable options valued at $4,731,181; 175,000
unexercisable options valued at $306,250; and 0 stock appreciation rights
(SARs). Mr. Curry has 300,582 exercisable options valued at $2,474,416;
30,000 unexercisable options valued at $97,500; and 24,419 SARs the
appreciation on which is valued at $254,375. Mr. Robertson has 251,799
exercisable options valued at $2,442,114; 30,000 unexercisable options
valued at $97,500; and 308 SARs the appreciation on which is valued at $0.
Mr. Quesnel has 173,945 exercisable options valued at $1,470,004; 30,000
unexercisable options valued at $97,500; and 609 SARs the appreciation on
which is valued at $2,282. Mr. Beatson has 56,600 exercisable options
valued at $257,563; 25,000 unexercisable options valued at $81,250; and 0
SARs. 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 $26.50 on December 29, 1995.
(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 credited to outstanding balances of
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.
14
<PAGE>
IV. LONG-TERM INCENTIVE PLAN AWARDS TABLE
There were no Long-Term Incentive Plan awards made to the Named Executives in
1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
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. The Company has
put a significant portion of total potential compensation for all executives
"at risk" through short-term and long-term incentive compensation. It is the
Company's policy to tie a greater portion of an executive's total potential
compensation to performance of the Company and its subsidiaries, than is the
case for Company employees generally. In keeping with the general policy of pay
for performance, an even greater portion of the total potential compensation
for the five highest-paid executives named in the Summary Compensation Table on
page 12 ("Named Executives") is tied to performance than is the case for
Company executives generally.
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 are some of the same as those included in the performance graph that
follows this report with the addition of several other transportation
companies. These exceptions and additions were made on the basis of comparable
size.
For 1995, we reviewed base salaries for executive officers against
competitive salary data for officers in similar positions at peer companies as
well as surveys of executive compensation for the general industry. The
Committee determined that executive salaries were generally competitive. As to
the Named Executives, the increase for Mr. Beatson for 1995 over 1994 includes
an adjustment to bring his salary more in line with competitive levels.
The Board unanimously approved the recommendations 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
15
<PAGE>
compilation of the profit goals of the subsidiaries. The final incentive
compensation plans are reviewed and approved by the Committee. The 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. In 1995, the
performance objective for Messrs. Moffitt and Quesnel was based on pre-tax,
pre-incentive income of the parent Company, the performance objective for Mr.
Robertson was based on the pre-incentive operating income of Con-Way
Transportation Services, Inc., the performance objective for Mr. Curry was
based on the pre-incentive operating income of CF MotorFreight, and the
performance objective for Mr. Beatson was based on pre-incentive operating
income of Emery Air Freight Corporation.
Upon attainment of the established performance goals, participants, other
than the Named 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. For 1995, the
participation factors for the Chief Executive Officer and the four other Named
Executives were 65% and 50% of salary, respectively, also with the opportunity
to double that percentage for extraordinary results.
In 1995, because of the performance at Con-Way, Emery and CF MotorFreight, no
bonuses were paid to participants in the CF MotorFreight incentive compensation
plan, and the bonuses paid to participants in the Con-Way, Emery and parent
Company incentive compensation plans were only a fraction of the participants'
participation factors. As to the Named Executives, Messrs. Moffitt and Quesnel
earned incentive compensation of 4.8% and 3.7%, respectively, of their
respective salaries, under the parent Company plan. Similarly, Mr. Robertson
earned incentive compensation of 22.9% of his salary, under the Con-Way plan;
and Mr. Beatson earned incentive compensation of 20.0% of his salary, under the
Emery plan. Bonuses for the Named Executives are reflected in the Summary
Compensation Table for Compensation of Executive Officers.
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. 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, and for 1995 was the
Company's only long-term compensation program.
In 1995, at the suggestion of the Committee, the Company engaged an
independent executive compensation consultant to reassess the competitiveness
of the Company's compensation programs for senior management. As part of this
study, the consultant was asked to analyze and compare the Company's base
salaries, annual bonuses and long-term incentive awards with competitive
practices and levels. The consultant concluded that, taken together, the
elements of the Company's compensation package deliver pay opportunity that is
situated well within competitive norms for base salary and annual bonuses. The
consultant concluded that the long-term incentive compensation was at the low
end of the competitive range.
As part of the 1995 engagement, the consultant was asked to review various
stock option allocation methodologies and to recommend a formula appropriate
for the Company and consistent with practices in comparable companies. The
allocation formula recommended by the consultant takes into consideration each
executive's organizational position, decision-making influence and
accountability over the strategic results of the Company. After reviewing
information and suggestions provided by the consultant and adjusting for
individual factors, the Committee granted options for 517,500 shares to
executives of the Company and its subsidiaries. These awards were effective
July 24, 1995.
16
<PAGE>
As in 1994, the Committee in 1995 continued the policy of granting the first
4,000 options to each executive in the form of Incentive Stock Options ("ISOs")
as that term is used in (S) 422 of the Internal Revenue Code of 1986. The use
of ISOs, recommended by the Company's independent compensation consultant, is
consistent with the Company's desire to encourage long-term accumulation of
Company stock by executives.
In addition to the above-described pool of "regular" stock option grants, the
Committee also made an extraordinary option grant of 100,000 shares to Mr.
Moffitt, a Named Executive, in April 1995 upon his election as Chairman of the
Board of Directors, replacing Mr. O'Brien. No salary increase was granted at
the time of the election. The exercise price for all options granted in 1995
was equal to the fair market value of the Company's stock on the date the
options were granted.
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 such growth awards have been awarded since 1990.
In order to bring the Company's long-term incentive compensation to
competitive levels, the Committee also approved a long-term bonus plan for
executives based on the Company's shareholder equity, to be effective in 1996.
CEO COMPENSATION
The Compensation Committee based Mr. Moffitt's salary increase for 1995 on an
evaluation of his performance and the Company's performance (see Company
Performance below) and total shareholder return (see chart on page 19), taking
into consideration competitive salary data provided by the Company's
independent compensation consultant.
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 financial results. During the five years following Mr. Moffitt's
return to the Company (see chart on page 19), the Company's total shareholder
return largely kept pace with that of both the S & P 500 and the Peer Group
Index through mid-1993 and surpassed both indexes in the final quarter of 1993,
when Emery returned to profitability. Total shareholder return continued to
exceed these indexes throughout 1995. Some key measures of the Company's
improved financial performance since Mr. Moffitt's return to the Company are
set forth below:
COMPANY PERFORMANCE
<TABLE>
<CAPTION>
CHANGE
FROM
1990 TO
1990 1995 1995
-------- ---------- ---------
<S> <C> <C> <C>
Operating Income--(in thousands).............. $ 6,044 $ 143,901 +$137,857
Net Earnings (Loss)--(in thousands)........... $(40,727) $ 46,566 +$ 87,293
Net Margin.................................... (1.0%) 0.9% +1.9 pts
Primary Earnings per Share (EPS).............. $ (1.16) $ 1.10 +$ 2.26
Return on Average Equity (ROE)................ (7%) 8% +15 pts
Market Value--(in thousands).................. $411,253 $1,163,141 +183%
Long-Term Debt & Capital Leases............... $673,611 $ 495,510 -26.4%
Debt to Total Capital Ratio................... 54% 41% -13 pts
</TABLE>
For 1995, Mr. Moffitt earned short-term incentive compensation of $30,999,
based on the pre-tax, pre-incentive income objective for the parent Company
established at the beginning of 1995. For 1995, Mr. Moffitt elected to defer
all of his short-term incentive compensation until his retirement from the
Company.
17
<PAGE>
As discussed under "Long-Term Incentive Compensation" on page 16, the
Company's independent executive compensation consultant was specifically asked
to recommend a formula for stock option allocations. Consistent with the
recommended formula, Mr. Moffitt was awarded options for shares having an
aggregate exercise price of approximately three times his annual salary. Mr.
Moffitt also received an extraordinary option grant of 100,000 shares upon his
election as Chairman of the Board of Directors in April 1995.
POLICY ON DEDUCTIBILITY OF COMPENSATION
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 1996, even if all
performance goals are attained under the Company's short-term incentive plans.
The Compensation Committee intends to consider the matter again later this
year.
COMMITTEE MEMBERSHIP
As of December 4, 1995, the Committee was reorganized by adding Mr. Ronald E.
Poelman and Mrs. Margaret G. Gill to the Committee. As of that date, Messrs.
Robert Alpert and G. Robert Evans ceased serving as members of the Committee.
All compensation decisions in 1995 were made by the Committee comprising
Messrs. Alpert, Evans, Madden, Rogers and Wayman. The foregoing report is
approved by Messrs. Alpert and Evans and the current members of the Committee
identified below.
THE COMPENSATION COMMITTEE
Richard B. Madden, Chairman Robert D. Rogers
Margaret G. Gill Robert P. Wayman
Ronald E. Poelman
18
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Members of the Compensation Committee are all independent directors of the
Company and have no other relationships with the Company and its subsidiaries.
A COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN*
CONSOLIDATED FREIGHTWAYS, INC., S & P 500 INDEX, PEER GROUP INDEX
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG CONSOLIDATED FREIGHTWAYS INC., CUSTOM COMPOSITE INDEX
(7 STOCKS) AND S&P 500 INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period CONSOLIDATED CUSTOM S&P S&P
(Fiscal Year Covered) FREIGHTWAYS INC. COMPOSITE INDEX 500 INDEX
- --------------------- ---------------- --------------- ---------
<S> <C> <C> <C>
Measurement Pt- 12/90 $100 $100 $100
FYE 12/91 $131 $132 $130
FYE 12/92 $150 $158 $140
FYE 12/93 $201 $164 $155
FYE 12/94 $191 $162 $157
FYE 12/95 $230 $166 $215
</TABLE>
* Assumes $100 invested on December 31, 1990 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 consisting of
the common stock of the following companies: Airborne Freight Corporation,
Arkansas Best Corporation, Federal Express Corporation, Roadway Services, Inc.,
TNT Freightways Corporation, Worldway Corporation (formerly Carolina Freight
Corporation), and Yellow Corporation. Worldway Corporation was acquired by
Arkansas Best Corporation effective August 8, 1995, and is included in the
calculation of total return through June 30, 1995.
On February 29, 1996, the Wall Street Journal published data showing the
relative performances of nine trucking companies based on one, three and five
year total shareholder returns. In addition to the Company, the Wall Street
Journal data included Rollins Truck Leasing, Werner Enterprises, Inc., Arnold
Industries, Inc., J.B. Hunt Transport Services, Inc., Roadway Services, Inc.,
Yellow Corp., TNT Freightways Corp. and Landstar System, Inc. According to the
data published in the Wall Street Journal, and as shown in the table below, the
Company's total return significantly exceeded the nine-company average over the
one, three and five year periods ended December 31, 1995.*
<TABLE>
<CAPTION>
1 YEAR 3 YEAR 5 YEAR
RETURN RETURN RETURN
------ ------ ------
<S> <C> <C> <C>
Company................................................ 19.9% 15.2% 18.1%
9 Company Average...................................... -10.9% -0.2% 12.5%
Company Return In Excess of 9 Company Average.......... 30.8% 15.4% 5.6%
</TABLE>
* The data published in the Wall Street Journal did not include three and
five year returns for Landstar System, Inc., or a five year return for TNT
Freightways Corp.
19
<PAGE>
PENSION PLAN TABLE
ESTIMATED ANNUAL RETIREMENT BENEFITS
The following table illustrates the approximate annual pension that may
become payable to an employee in the higher salary classifications under the
Company's retirement plans.
<TABLE>
<CAPTION>
AVERAGE FINAL TOTAL EARNINGS DURING YEARS OF PLAN PARTICIPATION
HIGHEST FIVE CONSECUTIVE YEARS --------------------------------------------
OF LAST TEN YEARS OF EMPLOYMENT 15 20 25 30 35
----------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$200,000........................ $ 47,834 $ 66,445 $ 85,056 $103,667 $122,278
$300,000........................ 72,334 100,445 128,556 156,667 184,778
$400,000........................ 96,834 134,445 172,056 209,667 247,278
$500,000........................ 121,334 168,445 215,556 262,667 300,778
$600,000........................ 145,834 202,445 259,056 315,667 372,278
$700,000........................ 170,334 236,445 302,556 368,667 434,778
$800,000........................ 194,834 270,445 346,056 421,667 497,278
</TABLE>
Compensation covered for the Named Executives is the highest five-year
average over the last ten years of employment of the "Salary" and "Bonus" shown
in the Summary Compensation Table on page 12. 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.
Applicable law limits the annual benefits which may be paid from a tax-
qualified retirement plan to $120,000 per year currently, and prevents pension
accruals for compensation in excess of $150,000 per year and for deferred
compensation. The Company has adopted non-qualified plans to provide for
payment out of the Company's general funds of benefits not covered by the
qualified plans. The table above represents total retirement benefits which may
be paid from a combination of qualified and non-qualified plans.
As of December 31, 1995, Messrs. Moffitt, Curry, Robertson, Quesnel and
Beatson had 28, 27, 24, 20 and 13 years of plan participation, respectively.
----------------
APPOINTMENT OF AUDITORS
At last year's annual meeting, shareholders approved the appointment of
Arthur Andersen LLP as independent public accountants to audit the consolidated
financial statements of the Company for the year ended December 31, 1995. The
Board recommends that shareholders vote in favor of the reappointment of Arthur
Andersen LLP as the Company's independent auditors for the year ending December
31, 1996. 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 LLP 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.
20
<PAGE>
----------------
SHAREHOLDER PROPOSAL
Jack Boyle, 4124 Nichandros Street, Castro Valley, California 94546, who owns
approximately 1,100 shares of the Company's Common Stock, has stated his
intention to present the following proposal at the 1996 Annual Meeting. Mr.
Boyle is an employee of a Company subsidiary and a member of the Teamsters
Union. The proposal and supporting statement, for which the Board of Directors
and Company accept no responsibility, are set forth below. The Board opposes
this proposal for the reasons stated after such proposal.
RESOLUTION: That the stockholders of Consolidated Freightways urge that the
Board of Directors take the necessary steps to declassify the board 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
The board at Consolidated Freightways is divided into three classes so that
only a third of the board faces election each year, and an individual director
faces election only every three years.
CF says such a structure provides continuity. Yet continuity can also be
achieved through reelection. Continuity that defies shareholder sentiment
constitutes entrenchment.
Reducing the frequency that a director faces election can also reduce
accountability.
Accountability remains important at our Company. CF may claim it deserves
shareholder confidence because of recent performance gains. Yet CF's stock
price remains below 1989 levels (ignoring inflation). It's a hollow boast for
long term shareholders who continue to suffer paper losses.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL FOR THE
FOLLOWING REASONS:
The Company believes that this proposal is made in furtherance of the
Teamsters' continuing efforts to harass and pressure the Company and its
subsidiaries in an effort to achieve certain labor-related goals that are
contrary to the interests of the Company's shareholders. The Company believes
that shareholder support of this proposal will only encourage and prolong this
three and a half year effort by the Teamsters.
This advisory proposal is virtually identical to proposals made at the
Company's Annual Meetings in each of the last three years. In each of those
three years, the Company's shareholders defeated such proposal by a substantial
margin.
We continue to 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 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 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,
21
<PAGE>
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 in 1995 on the average,
shareholders of public companies voted against efforts to declassify boards by
a substantial margin.
The Company is firmly committed to good corporate governance practices. At
the same time, we believe there is no single approach to corporate governance
that suits all companies. The key consideration is whether a company's
corporate governance practices support and promote financial performance in
furtherance of shareholder interests.
As highlighted in the "Company Performance" table contained in the
Compensation Committee Report on Executive Compensation appearing on page 17 of
this proxy statement, the Company's financial results have dramatically
improved since the current management team was installed in 1990.
In recent years, the Company has voluntarily eliminated "golden parachutes,"
terminated its Shareholder Rights Plan one year prior to its scheduled
expiration date and adopted a confidential voting policy. We believe that the
Company's financial performance, together with its commitment to good corporate
governance practices, demonstrate a high level of management and Board
accountability to shareholders.
Approval of this advisory proposal requires the favorable vote of the holders
of a majority of the voting power represented at the meeting. If approved, the
proposal would serve as a recommendation to the Board of Directors to take
necessary steps to eliminate the classified Board. Such steps would require the
repeal of the classified Board of Directors and, in accordance with the terms
of the Certificate of Incorporation approved by the Company's shareholders in
1985, the favorable vote, at a future 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 in each of the last three years
considered virtually identical proposals and voted against them 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.
22
<PAGE>
----------------
PRINCIPAL SHAREHOLDERS
According to information furnished to the Company as of February 15, 1996,
the only persons known to the Company to own beneficially an interest in 5% or
more of the shares of Common Stock or Series B Preferred Stock are set forth
below. All such information is as reported in the most recent Schedule 13G
filed by each such person with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
---------------- ---------------------- --------
<S> <C> <C>
J.P. Morgan & Co., Incorporated........... 5,056,322 Common(1) 11.6%
60 Wall Street
New York, NY 10260
Loomis, Sayles & Company, L.P. ........... 4,179,100 Common(2) 9.6%
One Financial Center
Boston, MA 02111
T. Rowe Price Associates, Inc. 11,390 Common(3) 0.03%
and T. Rowe Price Trust Company.......... 766,829 Preferred(3) 8.4%
100 East Pratt Street
Baltimore, MD 21202
FMR Corp. ................................ 3,146,420 Common(4) 7.2%
82 Devonshire Street
Boston, MA 02109
The Goldman Sachs Group, L.P. ............ 3,141,513 Common(5) 7.2%
and Goldman Sachs & Co.
85 Broad Street
New York, NY 10004
</TABLE>
- --------
(1) J.P. Morgan & Co., Incorporated has sole voting power over 2,921,782
shares, shared voting power over 42,645 shares, sole dispositive power over
4,991,602 shares and shared dispositive power over 61,920 shares.
(2) Loomis, Sayles & Company, L.P. has sole voting power over 2,089,503 shares,
shared voting power over 24,000 shares, sole dispositive power over 0
shares and shared dispositive power over 4,179,100 shares.
(3) T. Rowe Price Associates, Inc. ("Price Associates") has sole voting power
over 7,900 shares, shared voting power over 3,987,512 shares, sole
dispositive power over 11,390 shares and shared dispositive power over
3,987,512 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 3,987,512 shares, sole dispositive
power over 0 shares and shared dispositive power over 3,987,512 shares.
The holdings include 11,390 shares of Common Stock and 766,829 shares of
Series B Preferred Stock (which Preferred Stock is held pursuant to the
Consolidated Freightways, Inc. Thrift and Stock Plan). Such shares of Series
B Preferred Stock represent 80.6% of all outstanding shares of Series B
Preferred Stock. Each share of Series B Preferred Stock has the right to 5.2
noncumulative votes on each matter submitted to the meeting. The Series B
Preferred Stock is convertible at the Trust Company's option under certain
circumstances into four shares of Common Stock for each share of Series B
Preferred Stock. On a fully converted basis, these holdings represent 6.6%
of the Common Stock.
Price Associates serves as investment advisor with shared power to vote
these securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates and the Trust Company are
deemed to be the beneficial owners of the Common Stock and Series B
Preferred Stock which has not been allocated to participants' 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.
23
<PAGE>
(4) FMR Corp., through its subsidiaries Fidelity Management & Research Company
and Fidelity Management Trust Company, has sole voting power over 10,688
shares, shared voting power over 0 shares, sole dispositive power over
3,146,420 shares and shared dispositive power over 0 shares.
(5) The Goldman Sachs Group, L.P. and Goldman Sachs & Co. have sole voting
power over 0 shares, shared voting power over 2,404,513 shares, sole
dispositive power over 0 shares and shared dispositive power over 3,141,513
shares.
----------------
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
The Company believes that, during 1995 its executive officers and directors
have complied with all Section 16 filing requirements, except that the Company
has become aware that David I. Beatson was one month late in filing a Form 4
reporting his acquisition of common stock of the Company under the Company's
Employee Stock Purchase Plan and inadvertently failed to report holdings of
approximately 200 shares of the Company's common stock in his Form 3 filed in
1994.
----------------
CONFIDENTIAL VOTING
In September 1994, the Board of Directors adopted a confidential voting
policy. Under this policy, all proxies, ballots and voting materials that
identify the votes of specific shareholders will be kept confidential from the
Company except as may be required by law or to assist in the pursuit or defense
of claims or judicial actions, and except in the event of a contested proxy
solicitation. In addition, comments written on proxies, ballots, or other
voting materials, together with the name and address of the commenting
shareholder, will be made available to the Company without reference to the
vote of the shareholder, except where such vote is included in the comment or
disclosure is necessary to understand the comment. Certain vote tabulation
information may also be made available to the Company, provided that the
Company is unable to determine how any particular shareholder voted.
Access to proxies, ballots and other shareholder voting records will be
limited to inspectors of election who are not employees of the Company and to
certain Company employees and agents engaged in the receipt, count and
tabulation of proxies.
----------------
SUBMISSION OF SHAREHOLDER PROPOSALS
Under the rules of the Securities and Exchange Commission now in effect,
shareholder proposals intended for inclusion in next year's proxy statement
must be directed to the Corporate Secretary, Consolidated Freightways, Inc., at
3240 Hillview Avenue, Palo Alto, California 94304, and must be received by
November 22, 1996.
24
<PAGE>
----------------
OTHER MATTERS
The Company will furnish to interested shareholders, free of charge, a copy
of its 1995 Annual Report on Form 10-K filed with the Securities and Exchange
Commission. The report will be available for mailing after April 10, 1996.
Please direct your written request to the Corporate Secretary, Consolidated
Freightways, Inc., 3240 Hillview Avenue, Palo Alto, California 94304.
Your Board knows of no other matters to be presented at the meeting. If two
proposals that were excluded from this proxy statement in accordance with Rule
14a-8 of the Securities Exchange Act of 1934 are properly brought before the
meeting, it is intended that the proxy holders will use their discretionary
authority to vote the proxies against such proposals. If any other matters come
before the meeting, it is the intention of the proxy holders to vote on such
matters in accordance with their best judgment.
----------------
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 $10,000, plus expenses. The Company has also engaged Chemical Mellon
Shareholder Services 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.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE MEETING.
PLEASE SIGN, DATE AND RETURN THE ACCOMPANYING WHITE PROXY CARD AS SOON AS
POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
MARYLA R. BOONSTOPPEL
Vice President and Secretary
March 22, 1996
25
<PAGE>
[LOGO OF RECYCLED PAPER]
<PAGE>
PROXY
CONSOLIDATED FREIGHTWAYS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CONSOLIDATED FREIGHTWAYS, INC.
The undersigned appoints E.F. CHEIT, R. JAUNICH II, R.B. MADDEN 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 29, 1996 at 9:00 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 II directors for a three-year term.
Nominees: Donald E. Moffitt
Ronald E. Poelman
Robert D. Rogers
William D. Walsh
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 ITEM 2 BELOW AND AGAINST ITEM 3 BELOW.
The Board of Directors recommends a vote FOR the election of directors
and FOR Item 2 below.
1. Election of Directors (see reverse) FOR WITHHELD
[_] [_]
For, except vote withheld from
the following nominees)
_________________________________________
2. Ratify appointment of Independent FOR AGAINST ABSTAIN
Auditors [_] [_] [_]
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 22, 1996.
The Board of Directors recommends a
vote AGAINST Item 3 below.
3. Shareholder Proposal on
Declassification of Board of
Directors
FOR AGAINST ABSTAIN
[_] [_] [_]
DATE: , 1996
------------------------------------
SIGNATURE(S)
------------------------------------
------------------------------------
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>
[LETTERHEAD OF CONSOLIDATED FREIGHTWAYS, INC.]
March 22, 1996
Dear Fellow Employee:
Enclosed is proxy material for the Consolidated Freightways, Inc. Annual
Meeting of Shareholders to be held on April 29, 1996. This material is being
sent to you as a participant in the Consolidated Freightways, Inc. Thrift and
Stock Plan and includes (1) the Company's 1996 Proxy Statement, (2) a card to
instruct T. Rowe Price Trust Company, the Plan trustee, as to how you wish the
shares of Consolidated Freightways, Inc. credited to your account to be voted,
(3) if you wish to instruct the Trustee to vote the preferred shares of stock
credited to your account differently than the common shares, a direction form
to instruct the Trustee as to how you wish to vote such preferred shares, and
(4) an envelope to forward your instructions to First Chicago Trust Company of
New York, the Company's stock transfer agent. A copy of our 1995 Annual Report
is being sent to you under separate cover.
In order to vote the shares credited to your account, you must complete and
return the enclosed instruction card giving the trustee specific voting
instructions for the common and preferred shares. If you wish, you may sign
and return the card without giving specific voting instructions and the shares
will be voted as recommended by the Consolidated Freightways, Inc. Board of
Directors. The instruction card will direct the trustee to vote both the
common and preferred shares of stock credited to your account. If you wish to
vote the preferred shares of stock differently than the common shares, you
must also complete the preferred stock direction form and return it to First
Chicago Trust Company of New York with the instruction card. Under the terms
of the Plan, the trustee votes the shares of each class of stock credited to
your account for which it does not receive a signed instruction card on a
timely basis in the same manner and proportion as the shares in such class of
stock for which it does receive valid voting instructions on a timely basis.
Your instruction card must be returned directly to First Chicago Trust
Company of New York, the Company's stock transfer agent. It will be treated
confidentially by the transfer agent and the trustee.
THE EXERCISE OF SHAREHOLDER VOTING RIGHTS IS A VERY IMPORTANT FEATURE OF THE
PLAN BECAUSE IT ALLOWS YOU TO PARTICIPATE DIRECTLY IN THE AFFAIRS OF THE
COMPANY. WE URGE YOU TO EXERCISE YOUR VOTING RIGHTS. IN ORDER FOR THE TRUSTEE
TO COMPLY WITH YOUR INSTRUCTIONS, FIRST CHICAGO TRUST COMPANY OF NEW YORK MUST
RECEIVE YOUR COMPLETED INSTRUCTION CARD NO LATER THAN APRIL 23, 1996.
Sincerely,
/s/ Maryla R. Boonstoppel
<PAGE>
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 29, 1996 at 9:00 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 II directors for a three-year term.
Nominees: Donald E. Moffitt
Ronald E. Poelman
Robert D. Rogers
William D. Walsh
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 7895
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 Item 2 below, and AGAINST Item 3 below.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR the election
of directors and FOR Item 2 below.
- -------------------------------------------------------------------------------
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [_] [_] 2. Ratify appointment [_] [_] [_]
Directors. of Independent
(see reverse) Auditors.
For, except vote withheld from the following nominee(s):
- -------------------------------------------------------
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote AGAINST Item 3 below.
- -------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. Shareholder Proposal on [_] [_] [_]
Declassification of Board of
Directors.
- -------------------------------------------------------------------------------
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 22, 1996.
SIGNATURE(S) _____________________________ DATE ____________, 1996
NOTE: Please sign exactly as name appears hereon.
<PAGE>
===============================================================================
DIRECTION FORM
===============================================================================
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 29, 1996 at 9:00 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, IF NO CHOICE IS SPECIFIED, THE TRUSTEE WILL VOTE FOR THE
ELECTION OF DIRECTORS, FOR ITEM 2 BELOW, AND AGAINST ITEM 3 BELOW AS DESCRIBED
IN THE ACCOMPANYING PROXY STATEMENT.
1. Election of Four Class II directors for a three-year term.
Nominees: Donald E. Moffitt, Ronald E. Poelman, Robert D. Rogers and
William D. Walsh
[_] Vote FOR all nominees listed above; except vote withheld from the
following nominees (if any):
----------------------------------------------------------------------
----------------------------------------------------------------------
[_] Vote WITHHELD from all nominees.
2. Ratify appointment of Arthur Andersen LLP as the Company's auditors for the
year 1996.
FOR [_] AGAINST [_] ABSTAIN [_]
3. Declassification of Board.
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 22, 1996.
, 1996
------------------------------------------
Signature of Participant Date
------------------------------------------
Name (Please Print)
------------------------------------------
Address (Please Print)
------------------------------------------
City State Zip Code
<PAGE>
[LETTERHEAD OF CONSOLIDATED FREIGHTWAYS, INC.]
March 22, 1996
Dear Fellow Employee:
Enclosed is proxy material for the Consolidated Freightways, Inc. Annual
Meeting of Shareholders to be held on April 29, 1996. This material is being
sent to you as a participant in the Consolidated Freightways, Inc. Common Stock
Fund and includes (1) the Company's 1996 Proxy Statement, (2) a card to
instruct Mellon Bank, the Fund trustee, as to how you wish the shares of
Consolidated Freightways, Inc. credited to your account to be voted, and (3) an
envelope to send your instruction card to First Chicago Trust Company of New
York, the Company's stock transfer agent. A copy of our 1995 Annual Report is
being sent to you under separate cover.
In order to vote the shares credited to your account, you must complete and
return the enclosed instruction card giving the trustee specific voting
instructions. If you wish, you may sign and return the card without giving
specific voting instructions in which case your shares will be voted as
recommended by the Consolidated Freightways, Inc. Board of Directors. Under the
terms of the Plan, the trustee votes any shares credited to your account for
which it does not receive a signed instruction card on a timely basis in the
same manner and proportion as the shares of stock for which it does receive
valid voting instructions on a timely basis.
Your instruction card must be returned directly to First Chicago Trust
Company of New York, the Company's stock transfer agent. It will be treated
confidentially by the transfer agent and the trustee.
THE EXERCISE OF SHAREHOLDER VOTING RIGHTS IS A VERY IMPORTANT FEATURE OF THE
COMMON STOCK FUND BECAUSE IT ALLOWS YOU TO PARTICIPATE DIRECTLY IN THE AFFAIRS
OF THE COMPANY. WE URGE YOU TO EXERCISE YOUR VOTING RIGHTS. IN ORDER FOR THE
TRUSTEE TO COMPLY WITH YOUR INSTRUCTIONS, FIRST CHICAGO TRUST COMPANY OF NEW
YORK MUST RECEIVE YOUR COMPLETED INSTRUCTION CARD NO LATER THAN APRIL 23, 1996.
Sincerely,
/s/ Maryla R. Boonstoppel
<PAGE>
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 29, 1996 at 9:00 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 II directors for a three-year term.
Nominees: Donald E. Moffitt
Ronald E. Poelman
Robert D. Rogers
William D. Walsh
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
