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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2)
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))
(_) Definitive Proxy Statement
(X) Definitive Additional Materials
(_) Soliciting Material Pursuant to Section 240.14a-11c or Section
240.14a-12
CONSOLIDATED FREIGHTWAYS, INC.
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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):
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11.
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[CNF LETTERHEAD]
Dear Institutional Investor:
An important item on CNF's Annual Meeting Agenda this year is approval of
the CNF Transportation Inc. 1997 Equity and Incentive Plan (the "Plan").
Last fall, as you know, we effected a spin-off of CF MotorFreight in order
to substantially increase value for our shareholders. The Plan is yet
another demonstration of our long-term commitment to building shareholder
value. It has been expressly designed to provide the right mix of equity-
based incentive compensation arrangements to drive shareholder value after
the spin-off, without imposing excessive costs on the shareholders through
dilution.
In constructing the Plan, CNF took great care, including seeking counsel
from objective, outside advisors, to address issues raised by our recent
massive restructuring, as well as concerns of shareholders. An independent
compensation consulting firm assisted in designing the Plan. Our proxy
solicitors, Georgeson & Company Inc. helped us view the Plan from the
perspective of our investors. Richard H. Koppes, the former General
Counsel of CalPERS, also reviewed the Plan, and congratulated us in
achieving such "success" in our first year as a "new" company.
Specifically, Mr. Koppes was impressed that:
- - More incentive pay was put at risk;
- - There is no ability to reprice options;
- - Options are tied to performance of the company, which clearly aligns
with creation of shareholder value; and
- - The Plan qualifies under IRS 162m provisions
Mr. Koppes alludes to our first year. Indeed, you should keep in mind
that, after the spin-off, CNF is essentially a new company. As a new
company, the shares reserved in the Plan are only an additional 4.9% of the
outstanding. Overall dilution of common stock alone under the Plan and all
other existing compensation plans is 11.88% on a fully diluted basis, net
of options which expired in March 1997 as a result of the transfer of
optionees in the spin-off.
We sincerely appreciate your ownership in CNF and urge you to review our
Plan with a clear eye toward the long-term value we believe it will create
for you. We hope we can count on your support. If you have any questions,
or would like to discuss the matter further, please call me at (415)813-
5326, or Henry Schmitt, our Vice President-Corporate Relations, at (415)813-
5333.
Sincerely,
/s/Eberhard G. H. Schmoller
Eberhard G. H. Schmoller
Secretary
